PARRIS N. GLENDENING, Governor

Ch. 50

POLICYHOLDER OF THE SOCIETY IN EACH POLICY YEAR. THE AGGREGATE AMOUNT
OF THE RATE STABILIZATION CHARGE FOR ANY POLICY YEAR MAY NOT EXCEED
20% OF THE AGGREGATE PREMIUMS FOR THAT POLICY YEAR.

(b)     [Each policyholder of the Society and its subsidiaries shall pay a Stabilization
Reserve Fund charge.] The directors of the Society [and its subsidiaries] shall
determine the amount of the [Stabilization Reserve Fund] RATE STABILIZATION
charge. This charge shall be separately stated in the policy. The Society [and its
subsidiaries] shall cancel the policy of any policyholder who fails to pay the [Stabilization
Reserve Fund] RATE STABILIZATION charge.

(c)      [Collection of the Stabilization Reserve Fund charge shall continue until such
time as the net balance of the Stabilization Reserve Fund is not less than the projected
sum of premiums to be written in the year following the valuation date. The Fund shall be
credited with all reserve fund charges collected from policyholders and, in any year the
Society or its subsidiaries sustains an operating loss, be charged with the loss.] ALL RATE
STABILIZATION CHARGES SHALL BE DEEMED TO BE, AND SHALL BE ENTERED INTO
THE RECORDS OF THE SOCIETY AS, UNASSIGNED SURPLUS.

(d)     Each policyholder shall be subject to assessment as provided in §§ 6-509,
6-510 and 6-511 of the Corporations and Associations Article [, except that:

(1)     The amount of all assessments may not exceed a full year's premium
calculated as of the policy anniversary next preceding the time of assessment.

(2)     The amount specified in paragraph (1) shall be further reduced in the
proportion that the percentage of the net balance of the Stabilization Reserve Fund at
the time of assessment bears to $5,000,000.

(3)     Upon the Commissioner's approval, the assessable liability of the
policyholders not in excess of 5% of one year's annual premium may be extinguished].

(e)     Notwithstanding provisions of subsection (d) of this section, the Society [and
its subsidiaries] may issue nonassessable policies subject to the provisions of Sections 262
and 263, and all other applicable provisions of this article and the Corporations and
Associations Article when the Society [and its subsidiaries meet] MEETS all applicable
requirements of this article concerning the sale of nonassessable policies including, but
not limited to, Sections 48, 49, and 50 of this article.

554.

(a)     The terms and conditions of all policies issued by the Society [and its
subsidiaries] to each class of physicians and other health care providers shall be
essentially uniform in terms and coverage.

(b)     Notwithstanding the provisions of subsection (a), the Society [and its
subsidiaries] may prescribe reasonable classifications of physicians and other health care
providers and insured activities and exposures based on good faith determination of
relative exposures and hazards among classifications and may vary the limits, coverages,
exclusions, conditions, and loss-sharing provisions among classifications. Additionally,
the Society [and its subsidiaries] may prescribe, in the case of an individual physician or
other health care provider within a class, reasonable variations in the terms of coverage

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