PARRIS N. GLENDENING, Governor                            S.B. 307

(A)    NOTWITHSTANDING ANY OTHER PROVISION OF THIS SUBTITLE, THE
SOCIETY MAY ESTABLISH, OWN, OR CONTROL A SUBSIDIARY FOR ANY BUSINESS
PURPOSE.

(B)     A SUBSIDIARY THAT IS ESTABLISHED, OWNED, OR CONTROLLED BY THE
SOCIETY IS NOT SUBJECT TO THE PROVISIONS OF THIS SUBTITLE.

(C)     (1) A SUBSIDIARY OF THE SOCIETY IS NOT AND MAY NOT BE DEEMED A
DEPARTMENT. UNIT. AGENCY. OR INSTRUMENTALITY OF THE STATE FOR ANY
PURPOSE.

(2) THE STATE MAY NOT BE HELD IN ANY WAY LIABLE OR
RESPONSIBLE FOR ANY OF THE DEBTS. CLAIMS. OBLIGATIONS, OR LIABILITIES OF A
SUBSIDIARY OF THE SOCIETY OR THE SOCIETY.

556.

(a)     If, in the judgment of the Board of Directors, the affairs of the Society thereby
may be administered suitably and efficiently, the [Company] SOCIETY may enter into a
contract, not to exceed five years in duration, whereby the affairs of the Society are
administered by a licensed insurer, or a licensed nonprofit health service plan, subject to
such continuing direction by the Board of Directors as specified in the articles of
incorporation, the bylaws, and the contract.

(b)     Upon the execution of any contract, the Society shall promptly file a true copy
with the State Insurance Commissioner. The contract shall become effective 30 days from
the date of filing unless the Commissioner, prior to the effective date, disapproves the
contract as being contrary to law, public policy or unduly onerous and states the reasons
for his findings.

Chapter 408 of the Acts of 1990

[SECTION 2. AND BE IT FURTHER ENACTED, That Medical Mutual
Liability Insurance Society of Maryland shall file interim reports with the State Insurance
Commissioner of Maryland in accordance with Article 48A, § 58(2) of the Code and an
annual report with the Legislative Policy Committee of the General Assembly on
November 1, of each year regarding subsidiary operations in states other than Maryland
describing the financial impact of these operations including all rate filing information
and certification of reserves.]

[SECTION 3. AND BE IT FURTHER ENACTED, That any application filed by
a subsidiary of the Society for admission in a state other than Maryland, shall be
simultaneously filed with the Commissioner, together with a 3-year business plan
demonstrating that sufficient capital, surplus, and reserve will be generated in the state in
which the application is filed to preserve the financial integrity and stability of the
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

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