Ch. 36                                          1995 LAWS OF MARYLAND

THE DIRECTORS OF A DOMESTIC MUTUAL INSURER SHALL ASSESS ITS
MEMBERS WHO, AT ANY TIME DURING THE 36 MONTHS BEFORE THE NOTICE OF
ASSESSMENT IS MAILED TO THEM UNDER § 3-112(B) OF THIS SUBTITLE, HELD
POLICIES PROVIDING FOR CONTINGENT LIABILITY, IF:

(1)      THE ASSETS OF THE DOMESTIC MUTUAL INSURER AT ANY TIME ARE
LESS THAN ITS LIABILITIES PLUS THE MINIMUM SURPLUS REQUIRED TO BE
MAINTAINED TO TRANSACT THE KIND OF INSURANCE BEING TRANSACTED BY THE
DOMESTIC MUTUAL INSURER; AND

(2)      THE DEFICIENCY IS NOT BEING CURED FROM OTHER SOURCES.

(B)      LIABILITY OF MEMBERS.

MEMBERS ASSESSED UNDER THIS SECTION ARE LIABLE TO THE DOMESTIC
MUTUAL INSURER FOR THE AMOUNT ASSESSED.

(C)     AMOUNT OF ASSESSMENTS.

(1)      THE TOTAL OF ASSESSMENTS SHALL BE SUFFICIENT TO:

(I)       CURE THE DEFICIENCY; AND

(II)     PROVIDE REASONABLE WORKING FUNDS ABOVE THE
MINIMUM SURPLUS, NOT EXCEEDING 5% OF THE DOMESTIC MUTUAL INSURER'S
LIABILITIES ON THE DATE THAT THE DEFICIENCY WAS DETERMINED.

(2)      A MEMBER'S ASSESSMENT MAY NOT EXCEED THE LESSER OF:

(I)       ONE POLICY PREMIUM; OR

(II)     THE PREMIUM FOR A FULL YEAR.

(D)     COMPUTATION OF ASSESSMENT PER MEMBER.

THE ASSESSMENT ON A POLICY WITH CONTINGENT LIABILITY SHALL BE
COMPUTED BASED ON THE PREMIUMS EARNED ON THE POLICY DURING THE
PERIOD TO WHICH THE ASSESSMENT RELATES.

(E)     OFFSETS NOT ALLOWED.

A MEMBER MAY NOT HAVE AN OFFSET AGAINST AN ASSESSMENT FOR WHICH
THE MEMBER IS LIABLE BECAUSE OF A CLAIM FOR AN UNEARNED PREMIUM OR
LOSS PAYABLE.

REVISOR'S NOTE: This section is new language derived without substantive
change from former CA § 6-510.

In subsections (a)(1), (b), and (c)(1)(ii) of this section, the term "domestic
mutual insurer" is substituted for the former term "insurer" to clarify that this
section applies to domestic mutual insurers.

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