PARRIS N. GLENDENING, Governor

Ch. 50

Society. The Commissioner shall have 30 days in which to review the application and to
order its amendment or withdrawal. The application shall be deemed approved unless
disapproved by the Commissioner within 30 days after the application is filed.]

[SECTION 4. AND BE IT FURTHER ENACTED, That for 3 years following
admission to a state other than Maryland, a subsidiary of the Society shall file interim
reports with the Commissioner in accordance with Article 48A, § 58(2) of the Code
comparing actual operations in that state to the 3-year business plan submitted to the
Commissioner with the application for admission filed in that state.]

[SECTION 5. AND BE IT FURTHER ENACTED, That this Act may not be
construed to allow an insurance subsidiary of the Society to discount reserves without
following the requirements of Article 48A, § 80 of the Code.]

[SECTION 6. AND BE IT FURTHER ENACTED, That the Society may not
directly or indirectly capitalize, transfer moneys to, or purchase stock in any insurance
subsidiary beyond the $3,250,000 used prior to December 31, 1989 to capitalize the
insurance subsidiaries by the Society, without the prior approval of the Society's Board of
Directors, including the prior approval of at least 80% of the physician members of the
Society's Board of Directors.]

SECTION 2. AND BE IT FURTHER ENACTED. That the Laws of Maryland
read as follows;

Article 48A - Insurance Code

553.

[(a) A rate Stabilization Reserve Fund is established to be entered as a liability of
the Society and its subsidiaries along with other premium and loss reserves. The Fund
shall be administered and valued annually by three directors of the Society and one
director from each of its subsidiaries, together with the Commissioner of Insurance or his
deputy.

(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 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 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.]

[(d)](A) 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.

- 1327 -