Ch. 36                                          1995 LAWS OF MARYLAND

A LIFE INSURER MAY ISSUE BOTH PARTICIPATING AND NONPARTICIPATING
POLICIES. ONLY IF THE RIGHT OR ABSENCE OF THE RIGHT TO PARTICIPATE IS
REASONABLY RELATED TO THE PREMIUM CHARGED.

REVISOR'S NOTE: This section is new language derived without substantive
change from former Art. 48A, § 264.

Defined terms: "Domestic insurer" § 1-101
"Life insurer" § 1-101
"Mutual insurer" § 1-101
"Policy" § 1-101
"Premium" § 1-101
"Stock insurer" § 1-101

3-115. DIVIDENDS.

(A)     IN GENERAL.

THE DIRECTORS OF A DOMESTIC. MUTUAL INSURER PERIODICALLY MAY
APPORTION AND PAY OR CREDIT TO ITS MEMBERS DIVIDENDS ONLY OUT OF THAT
PART OF SURPLUS FUNDS THAT REPRESENTS NET REALIZED SAVINGS AND NET
REALIZED EARNINGS IN EXCESS OF THE SURPLUS REQUIRED BY LAW TO BE
MAINTAINED.

(B)     TOTAL SURPLUS LESS THAN TOTAL CONTRIBUTED SURPLUS.

A DIVIDEND THAT IS OTHERWISE PROPER MAY BE PAYABLE OUT OF THE
DOMESTIC MUTUAL INSURER'S NET REALIZED SAVINGS AND NET REALIZED
EARNINGS EVEN THOUGH THE DOMESTIC MUTUAL INSURER'S TOTAL SURPLUS IS
THEN LESS THAN ITS TOTAL CONTRIBUTED SURPLUS.

REVISOR'S NOTE: This section is new language derived without substantive
change from former Art. 48A, § 265.

In subsection (b) of this section, the reference to the "domestic mutual
insurer" is substituted for the former reference to the "insurer" to clarify that
this section applies to domestic mutual insurers.

Defined terms: "Domestic insurer" § 1-101
"Mutual insurer" § 1-101

3-116. LOANS TO INSURERS.

(A) AUTHORIZED.

(1)      A DIRECTOR, OFFICER, OR MEMBER OF A STOCK INSURER OR
MUTUAL INSURER OR ANY OTHER PERSON MAY LEND OR ADVANCE TO THE STOCK
INSURER OR MUTUAL INSURER ANY MONEY NECESSARY TO ENABLE IT TO COMPLY
WITH A SURPLUS REQUIREMENT OR ANY OTHER REQUIREMENT OF LAW.

(2)      INTEREST ON THE LOAN OR ADVANCE MAY NOT EXCEED 6% PER
YEAR.

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