Ch. 36

1995 LAWS OF MARYLAND

Also in the introductory language of subsection (a) of this section, the phrase
"with another insurer" is added for clarity.

In subsection (a)(1) and (2) of this section, the references to deposits made
"under this subtitle" are added for clarity.

In subsection (a)(1) of this section, the reference to the "successor" insurer is
substituted for the former reference to the "consolidated or continuing"
insurer for clarity and to conform to language used in the Corporations and
Associations Article. Correspondingly, in subsection (a)(2) of this section, the
reference to a deposit no longer required of a "successor" insurer is
substituted for the former reference to a deposit no longer required of a
"consolidated or continuing" insurer, and in subsection (b)(2) of this section,
the reference to the "successor" insurer is substituted for the former reference
to the "continuing" insurer.

Also in subsection (a)(1) of this section, the reference to "any deposit" is
substituted for the former reference to "the residuary interest in the deposits"
for clarity and brevity.

In subsection (a)(2) of this section, the phrase "to the successor insurer" is
added for clarity.

In the introductory language of subsection (b) of this section, the reference to
the transfer or release of "a deposit under this section" is substituted for the
former reference to the transfer or release of "the residuary interest" for
clarity.

The Insurance Article Review Committee notes, for the consideration of the
General Assembly, that several provisions of this section appear to be
inconsistent with § 3-122 of this article, which governs consolidations,
mergers, and share exchanges of stock insurers, and § 3-123 of this article,
which governs consolidations and mergers of mutual insurers.

Section 3-122(a) of this article provides that mergers and consolidations of
stock insurers are governed by CA § 3-114(d)(1), which provides that the
assets of each corporation party to articles of merger or consolidation
"transfer to, vest in, and devolve on the successor without further act or
deed". Similarly, under § 3-123(f)(2) of this article all rights and properties of
the parties to an agreement of consolidation or merger become the rights and
property of the successor mutual insurer. Thus, while articles of merger or
consolidation for both stock and mutual insurers must be approved by the
Commissioner under §§ 3-122 and 3-123 of this article, once approved and
filed, assets pass to the successor insurer under these sections simply by virtue
of the merger or consolidation.

Under this section, however, a transfer or release of a deposit may not take
place without the approval of the Commissioner and an affidavit that the
liabilities of the merged or consolidated insurer have been "extinguished,
canceled, or reinsured". This seems to add to the requirements for a transfer
of assets in a merger or consolidation contained in §§ 3-122 and 3-123 of this

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