Ch. 36

1995 LAWS OF MARYLAND

3-113. ISSUANCE OF NONASSESSABLE POLICIES.

(A)     DOMESTIC MUTUAL INSURERS.

IF A DOMESTIC MUTUAL INSURER HAS SURPLUS FUNDS AT LEAST EQUAL TO
THE PAID-IN CAPITAL STOCK AND SURPLUS REQUIRED OF A DOMESTIC STOCK
INSURER THAT TRANSACTS LIKE KINDS OF INSURANCE BUSINESS, THE DOMESTIC
MUTUAL INSURER, ON RECEIPT OF AN ORDER OF THE COMMISSIONER
AUTHORIZING IT TO DO SO, MAY EXTINGUISH THE CONTINGENT LIABILITY OF ITS
MEMBERS AS TO ALL ITS POLICIES IN FORCE AND MAY ISSUE NONASSESSABLE
POLICIES.

(B)      FOREIGN OR ALIEN MUTUAL INSURERS.

SUBJECT TO THE REQUIREMENTS OF THIS ARTICLE FOR ISSUING
NONASSESSABLE POLICIES, A FOREIGN OR ALIEN MUTUAL INSURER MAY ISSUE
NONASSESSABLE POLICIES TO ITS MEMBERS IN THE STATE UNDER ITS ARTICLES OF
INCORPORATION AND THE LAWS OF ITS DOMICILE.

(C)      ISSUANCE OF ASSESSABLE POLICIES PROHIBITED.

A MUTUAL INSURER MAY NOT ISSUE ASSESSABLE POLICIES IN THE STATE IF
THE MUTUAL INSURER ISSUES NONASSESSABLE POLICIES IN THE STATE OR
ANOTHER JURISDICTION.

(D)     NONASSESSABLE POLICIES NOT SUBJECT TO ASSESSMENT.

A POLICY OF A DOMESTIC MUTUAL INSURER THAT, UNDER AN ORDER OF THE
COMMISSIONER, IS WITHOUT CONTINGENT LIABILITY AND THEREFORE IS
NONASSESSABLE BY ITS TERMS IS NOT SUBJECT TO ASSESSMENT FOR A DEBT OR
LIABILITY OF THE DOMESTIC MUTUAL INSURER.

(E)     REVOCATION OF AUTHORITY TO ISSUE NONASSESSABLE POLICIES.

THE COMMISSIONER SHALL REVOKE THE AUTHORITY OF A MUTUAL INSURER
TO ISSUE NONASSESSABLE POLICIES IF:

(1)      THE ASSETS OF THE MUTUAL INSURER AT ANY TIME ARE LESS
THAN THE SUM OF ITS LIABILITIES AND THE SURPLUS REQUIRED FOR THAT
AUTHORITY; OR .

(2)      THE MUTUAL INSURER, BY RESOLUTION OF ITS BOARD OF
DIRECTORS APPROVED BY A MAJORITY OF ITS MEMBERS, REQUESTS THAT THE
AUTHORITY BE REVOKED.

(F)      EFFECT OF REVOCATION.

AFTER REVOCATION OF A MUTUAL INSURER'S AUTHORITY TO ISSUE
NONASSESSABLE POLICIES, THE MUTUAL INSURER MAY NOT:

(1) ISSUE A NONASSESSABLE POLICY; OR

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