PARRIS N. GLENDENING, Governor

Ch. 36

(B) INSURABLE INTEREST.

(1)      WITH REFERENCE TO PERSONAL INSURANCE, AN INSURABLE
INTEREST INCLUDES ONLY THE INTERESTS DESCRIBED IN THIS SUBSECTION.

(2)      FOR INDIVIDUALS RELATED CLOSELY BY BLOOD OR LAW, A
SUBSTANTIAL INTEREST ENGENDERED BY LOVE AND AFFECTION IS AN INSURABLE
INTEREST.

(3)      FOR PERSONS OTHER THAN INDIVIDUALS CLOSELY RELATED BY
BLOOD OR LAW, A LAWFUL AND SUBSTANTIAL ECONOMIC INTEREST IN THE
CONTINUATION OF THE LIFE, HEALTH, OR BODILY SAFETY OF THE INDIVIDUAL IS
AN INSURABLE INTEREST BUT AN INTEREST THAT ARISES ONLY BY, OR WOULD BE
ENHANCED IN VALUE BY, THE DEATH, DISABLEMENT, OR INJURY OF THE
INDIVIDUAL IS NOT AN INSURABLE INTEREST.

(4)      (I) THIS PARAGRAPH APPLIES ONLY TO EMPLOYEES WITH
RESPECT TO WHOM THE CORPORATE EMPLOYER OR AN EMPLOYER SPONSORED
TRUST FOR THE BENEFITS OF EMPLOYEES IS THE BENEFICIARY UNDER AN
INSURANCE CONTRACT, IF THE EMPLOYER IS:

1.        A PRIVATE CORPORATION; OR

2.        A PUBLIC CORPORATION, THE STOCK OF WHICH IS
TRADED ON A RECOGNIZED STOCK EXCHANGE OR TRADED IN ACCORDANCE WITH
THE NATIONAL ASSOCIATION OF SECURITIES DEALERS AUTOMATED QUOTATION
(NASDAQ) SYSTEMS.

(II) A LAWFUL AND SUBSTANTIAL ECONOMIC INTEREST EXISTS IN:

1.        A KEY EMPLOYEE OF A PRIVATE CORPORATION OR A
PUBLIC CORPORATION DESCRIBED IN SUBPARAGRAPH (I) OF THIS PARAGRAPH;
AND

2.        A NONKEY EMPLOYEE OF A PUBLIC CORPORATION
DESCRIBED IN SUBPARAGRAPH (I) OF THIS PARAGRAPH IF:

A.       THE EMPLOYEE HAS BEEN EMPLOYED BY THE PUBLIC
CORPORATION FOR AT LEAST 12 CONSECUTIVE MONTHS AND CONSENTS IN
WRITING TO THE INSURANCE CONTRACT; AND

B.       THE AMOUNT OF INSURANCE COVERAGE ON THE
NONKEY EMPLOYEE DOES NOT EXCEED AN AMOUNT COMMENSURATE WITH
EMPLOYER-PROVIDED BENEFITS.

(5)      (I) THIS PARAGRAPH APPLIES ONLY TO A CONTRACT OR OPTION
FOR THE PURCHASE OR SALE OF:

1.        AN INTEREST IN A BUSINESS PARTNERSHIP OR FIRM; OR

2.        STOCK SHARES, OR AN INTEREST IN STOCK SHARES, OF A
CLOSE CORPORATION.

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