PARRIS N. GLENDENING, Governor                                   Ch. 36

8-316. PROHIBITED ACTIVITIES OF ADMINISTRATOR.

(A)     IN GENERAL.

WITH RESPECT TO A PLAN, AN ADMINISTRATOR, DIRECTLY OR INDIRECTLY:

(1)      MAY NOT DEAL WITH THE ASSETS OF THE PLAN IN THE
ADMINISTRATOR'S OWN INTEREST OR FOR THE ADMINISTRATOR'S OWN ACCOUNT;

(2)      IN A TRANSACTION INVOLVING THE PLAN, MAY NOT ACT IN ANY
CAPACITY ON BEHALF OF OR REPRESENT IN ANY CAPACITY A PARTY WHOSE
INTERESTS ARE ADVERSE TO THE INTERESTS OF THE PLAN OR ITS PARTICIPANTS
OR BENEFICIARIES;

(3)      OTHER THAN COMMISSIONS OR SERVICE FEES RECEIVED FROM AN
INSURER, MAY NOT RECEIVE CONSIDERATION FOR THE ADMINISTRATOR'S OWN
PERSONAL ACCOUNT FROM A PARTY DEALING WITH THE PLAN IN CONNECTION
WITH A TRANSACTION INVOLVING THE ASSETS OF THE PLAN; OR

(4)      MAY NOT KNOWINGLY PARTICIPATE IN OR ATTEMPT TO CONCEAL
AN ACT OR OMISSION OF ANOTHER ADMINISTRATOR INVOLVED IN THE
ADMINISTRATION OF THAT PLAN, KNOWING THAT THE ACT OR OMISSION OF THE
OTHER ADMINISTRATOR WOULD BE A VIOLATION OF THIS SUBTITLE.

(B)     PROHIBITED BONDS.

AN ADMINISTRATOR MAY NOT PROCURE THE BOND REQUIRED BY THIS
SUBTITLE FROM A SURETY INSURER OR OTHER COMPANY OR THROUGH AN AGENT
OR BROKER IN WHOSE BUSINESS OPERATIONS THE ADMINISTRATOR HAS DIRECT
OR INDIRECT CONTROL OR SIGNIFICANT FINANCIAL INTEREST.

(C)     PRESUMPTION WHEN ADMINISTRATOR HOLDS ASSETS OR RECEIVES
COMPENSATION.

NOTWITHSTANDING SUBSECTION (A)(1) OF THIS SECTION, AN ADMINISTRATOR
IS NOT CONSIDERED TO HAVE DEALT WITH THE ASSETS OF A PLAN IN THE
ADMINISTRATOR'S OWN INTEREST OR FOR THE ADMINISTRATOR'S OWN ACCOUNT
SOLELY BECAUSE:

(1)      THE ADMINISTRATOR HELD THE ASSETS, AT INTEREST FOR THE
BENEFIT OF THE ADMINISTRATOR, FOR AN ADMINISTRATIVELY REASONABLE
PERIOD OF TIME BEFORE REMITTING THE ASSETS TO AN INSURER OR OTHER
PAYEE; OR

(2)      THE COMPENSATION THAT THE ADMINISTRATOR RECEIVES FOR
SERVICES NECESSARY FOR ESTABLISHING OR OPERATING THE PLAN DOES NOT
EXCEED REASONABLE COMPENSATION.

REVISOR'S NOTE: This section formerly was Art. 48A, § 691(a) and (c).

In subsection (b) of this section, the reference to the bond "required by this
subtitle" is added for clarity.

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