PARRIS N. GLENDENING, Governor

Ch. 36

The Insurance Article Review Committee notes, for consideration by the
General Assembly, that subsection (b)(3) of this section, which allows life
insurers to limit the right to vote on conversion to a stock insurer to members
whose policies have been in force for at least 1 year, does not conform to §
3-120(c)(3) of this subtitle, which requires life insurers to limit the right to
vote on mutualization to holders of policies that have been in force for more
than 1 year.

In subsection (b)(5) of this section, the former word "existing", which
modified "persons", is deleted as surplusage.

In subsection (b)(7) of this section, the phrase "in the initial offering" is
added for clarity.

Also in subsection (b)(7) of this section, the word "stock" is substituted for the
former word "[s]hares" for consistency with subsection (b)(6) and (8) of this
section.

The Insurance Article Review Committee notes, for consideration by the
General Assembly, that the reference in subsection (b)(7) of this section to
"double the par value" of the stock is archaic. Stock does not have to be
issued to policyholders at a particular par value.

Defined terms: "Commissioner" § 1-101
"Insurance business" § 1-101
"Insurer" § 1-101
"Life insurer" § 1-101
"Mutual insurer" § 1-101
"Person" § 1-101
"Policy" § 1-101
"Stock insurer" § 1-101

3-122. CONSOLIDATIONS, MERGERS, AND SHARE EXCHANGES OF STOCK INSURERS.

(A)     APPLICATION OF CORPORATIONS AND ASSOCIATIONS ARTICLE.

EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, THE PROVISIONS OF THE
CORPORATIONS AND ASSOCIATIONS ARTICLE ON THE CONSOLIDATION, MERGER,
AND SHARE EXCHANGE OF STOCK CORPORATIONS APPLY TO THE
CONSOLIDATIONS, MERGERS, AND SHARE EXCHANGES OF DOMESTIC STOCK
INSURERS AND DOMESTIC AND FOREIGN STOCK INSURERS.

(B)     SUBMISSION OF ARTICLES TO COMMISSIONER.

THE ARTICLES OF CONSOLIDATION, MERGER, OR SHARE EXCHANGE OF STOCK
INSURERS MUST BE SUBMITTED TO THE COMMISSIONER FOR EXAMINATION AND
APPROVAL BEFORE THE ARTICLES MAY BE ACCEPTED FOR RECORD BY THE
DEPARTMENT OF ASSESSMENTS AND TAXATION.

(C)     EXAMINATION AND REVIEW OF INSURER; HEARING.

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