Ch. 36

1995 LAWS OF MARYLAND

A DOMESTIC SOCIETY MAY NOT REINSURE SUBSTANTIALLY ALL OF ITS
INSURANCE IN FORCE WITHOUT THE WRITTEN PERMISSION OF THE COMMISSIONER.

(C) CREDIT AS ADMITTED ASSET OR DEDUCTION FROM LIABILITY.

(1)     EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS SUBSECTION, A
CEDING DOMESTIC SOCIETY MAY TAKE CREDIT FOR THE RESERVES ON RISKS
CEDED UNDER THIS SECTION TO THE EXTENT REINSURED.

(2)     A CEDING DOMESTIC SOCIETY MAY NOT BE ALLOWED CREDIT, AS
AN ADMITTED ASSET OR AS A DEDUCTION FROM LIABILITY, FOR REINSURANCE
MADE, CEDED, RENEWED, OR THAT OTHERWISE BECAME EFFECTIVE AFTER
DECEMBER 31, 1963, UNLESS THE REINSURANCE IS PAYABLE BY THE ASSUMING
INSURER ON THE BASIS OF THE LIABILITY OF THE CEDING SOCIETY UNDER THE
CONTRACTS REINSURED WITHOUT DIMINUTION BECAUSE OF THE INSOLVENCY OF
THE CEDING SOCIETY.

REVISOR'S NOTE: This section is new language derived without substantive
change from former Art. 48A, § 335.

In subsection (a)(3) of this section, the word "insurance" is added to modify
the reference to doing "business" for clarity. The Insurance Article Review
Committee decided that the intent did not seem to be to allow a society to
cede risk to an insurer authorized to do any business, but to cede risk to an
insurer that is authorized to do insurance business. The Insurance Article
Review Committee calls this addition to the attention of the General
Assembly.

In subsection (c)(1) of this section, the introductory phrase "[e]xcept as
provided in paragraph (2) of this subsection" is added to clarify that the
general authority to take credit for reserves is qualified by paragraph (2) of
this subsection.

Defined terms: "Commissioner" § 1-101
"Insurance" § 1-101
"Insurance business" § 1-101
"Insurer" § 1-101
"Reinsurance" § 1-101
"Society" § 8-401

8-442. ASSETS; SPECIAL FUNDS; PAYMENTS AVAILABLE FOR EXPENSES.

(A) ASSETS.

(1)     ALL ASSETS OF A SOCIETY SHALL BE HELD, INVESTED, AND
DISBURSED FOR THE USE AND BENEFIT OF THE SOCIETY.

(2)     A SOCIETY MEMBER OR BENEFICIARY OF A MEMBER DOES NOT
HAVE AND MAY NOT ACQUIRE INDIVIDUAL RIGHTS IN THE ASSETS OF THE SOCIETY
AND IS NOT ENTITLED TO ANY APPORTIONMENT OR THE SURRENDER OF ANY PART
OF THE ASSETS EXCEPT AS PROVIDED IN THE INSURANCE CONTRACT.

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