Ch. 36

1995 LAWS OF MARYLAND

(4)      A REINSURER SHALL CONDUCT AT LEAST SEMIANNUALLY AN
ON-SITE REVIEW OF THE UNDERWRITING AND CLAIMS PROCESSING OPERATIONS
OF THE REINSURANCE MANAGER.

(5)      A REINSURER SHALL NOTIFY THE COMMISSIONER, IN WRITING,
WITHIN 30 DAYS AFTER TERMINATING A CONTRACT WITH A REINSURANCE
MANAGER.

(B)     PROHIBITED ACTS.

(1)      A REINSURER MAY NOT ENGAGE THE SERVICES OF A PERSON TO
ACT AS A REINSURANCE MANAGER ON ITS BEHALF UNLESS THE PERSON HAS
COMPLIED WITH THIS SUBTITLE.

(2)      UNLESS THE RELATIONSHIP BETWEEN THE REINSURER AND THE
REINSURANCE MANAGER IS CONTROLLED BY AND DISCLOSED UNDER § 8-106 OF
THIS TITLE OR TITLE 7, SUBTITLES 6 AND 7 OF THIS ARTICLE, A REINSURER MAY NOT
HAVE ON ITS BOARD OF DIRECTORS AN OFFICER, DIRECTOR, EMPLOYEE, AGENT,
OR CONTROLLING SHAREHOLDER OF ITS REINSURANCE MANAGER.

(C)     BINDING AUTHORITY FOR RETROCESSIONAL CONTRACTS.

THE BINDING AUTHORITY FOR ALL RETROCESSIONAL CONTRACTS OR
PARTICIPATION IN REINSURANCE SYNDICATES SHALL REST WITH AN OFFICER OF
THE REINSURER WHO IS NOT AFFILIATED WITH THE REINSURANCE MANAGER.

(D)     PENALTIES.

(1)      SUBJECT TO THE HEARING PROVISIONS OF TITLE 2 OF THIS
ARTICLE, IF A REINSURER VIOLATES ANY PROVISION OF THIS SUBTITLE, THE
REINSURER MAY BE:

(I)      REFUSED APPROVAL AS AN ACCEPTED REINSURER; OR

(II)     DISAPPROVED AS AN ACCEPTED REINSURER UNDER TITLE 5,
SUBTITLE 9 OF THIS ARTICLE.

(2)      IN ADDITION TO REMOVAL AS AN ACCEPTED REINSURER UNDER
TITLE 5, SUBTITLE 9 OF THIS ARTICLE, A REINSURER IS SUBJECT TO A CIVIL
PENALTY NOT EXCEEDING $5,000 FOR EACH VIOLATION OF THIS SUBTITLE.

REVISOR'S NOTE: This section is new language derived without substantive
change from former Art. 48A, §§ 728 and 714(b).

In subsection (a)(2) of this section, the phrase "that transacts business with
the reinsurer" is substituted for the former phrase "with which it has done
business" to conform to similar language used in § 8-519(a) of this subtitle.

In subsection (a)(4) of this section, the term "reinsurer" is substituted for the
former term "authorized insurer" for accuracy and consistency within this
section.

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