Ch. 36

1995 LAWS OF MARYLAND

(5)      ALL CURRENT POLICYHOLDERS AND ALL PERSONS THAT WERE
POLICYHOLDERS OF THE INSURER WITHIN 3 YEARS BEFORE THE DATE THE PLAN
WAS SUBMITTED TO THE COMMISSIONER ARE ENTITLED TO PARTICIPATE IN THE
PURCHASE OF STOCK OR DISTRIBUTION OF ASSETS;

(6)      THE PLAN GIVES TO EACH POLICYHOLDER SPECIFIED IN ITEM (5) OF
THIS SUBSECTION A PREEMPTIVE RIGHT:

(I)       WITHIN A DESIGNATED REASONABLE PERIOD, TO ACQUIRE
THE POLICYHOLDER'S PROPORTIONATE PART OF ALL OF THE PROPOSED CAPITAL
STOCK OF THE INSURER; AND

(II)     TO APPLY ON THE PURCHASE OF PROPOSED CAPITAL STOCK
THE AMOUNT OF THE POLICYHOLDER'S EQUITY IN THE INSURER AS DETERMINED
UNDER ITEM (4) OF THIS SUBSECTION;

(7)      STOCK IS OFFERED TO POLICYHOLDERS AT A PRICE THAT IS NOT
GREATER THAN THE PRICE AT WHICH THE STOCK WILL BE OFFERED TO OTHERS IN
THE INITIAL OFFERING, BUT THAT IS NOT MORE THAN DOUBLE THE PAR VALUE OF
THE STOCK;

(8)      THE PLAN PROVIDES FOR PAYMENT TO EACH POLICYHOLDER WHO
ELECTS NOT TO APPLY THE POLICYHOLDER'S EQUITY IN THE INSURER FOR OR ON
THE PURCHASE PRICE OF STOCK TO WHICH THE POLICYHOLDER IS PREEMPTIVELY
ENTITLED, IN CASH IN AN AMOUNT THAT EQUALS NOT LESS THAN 50% OF THE
AMOUNT OF THE POLICYHOLDER'S EQUITY THAT WAS NOT USED FOR THE
PURCHASE OF STOCK, AND WHICH PAYMENT, TOGETHER WITH ANY STOCK
PURCHASED, CONSTITUTES FULL PAYMENT AND DISCHARGE OF THE
POLICYHOLDER'S EQUITY AS AN OWNER OF THE INSURER; AND

(9)      THE COMPLETED PLAN PROVIDES THAT THE CONVERTED INSURER
WILL HAVE:

(I)       PAID-IN CAPITAL STOCK EQUAL TO NOT LESS THAN THE
MINIMUM PAID-IN CAPITAL REQUIRED OF A DOMESTIC STOCK INSURER THAT
TRANSACTS LIKE KINDS OF INSURANCE BUSINESS; AND

(II)     SURPLUS FUNDS EQUAL TO NOT LESS THAN 100% OF THE
REQUIRED CAPITAL.

REVISOR'S NOTE: This section is new language derived without substantive
change from former Art. 48A, § 270.

In subsection (b)(1) of this section, the reference to "the plan or procedure"
is substituted for the former vague reference to "[i]t" to clarify that the plan
or procedure must be equitable to the insurer's members.

In subsection (b)(2) of this section, the reference to "the plan'' is substituted
for the former vague reference to "[i]t" to clarify that "the plan", but not the
procedure, must be approved by certain members. This substitution conforms
to § 3-120(c)(2) of this subtitle.

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