PARRIS N. GLENDENING, Governor

Ch. 11

REVISOR'S NOTE: This section is new language derived without substantive
change from former Art. 48A, § 131A.

The former law defined "insurer" as an "authorized insurer, including a
nonprofit health service plan and a health maintenance organization". This
former definition served to delineate the scope of this subtitle. Throughout
this subtitle, therefore, the term "authorized insurer" is substituted for the
former term "insurer" to avoid confusion and to clarify that this subtitle
extends only to insurers to whom the Commissioner has issued a certificate of
authority. Because nonprofit health service plans and health maintenance
organizations are not included in the general definition of "insurer" for this
article, these entities are mentioned specifically as being subject to the
provisions of this subtitle that apply to authorized insurers. The Insurance
Article Review Committee notes these changes for the consideration of the
General Assembly. No substantive change is intended.

Defined term: "Authorized insurer" § 1-101

9-102. DETERMINATION OF FINANCIALLY HAZARDOUS CONDITION.

(A) GENERAL OPERATION.

. IN DETERMINING WHETHER THE CONTINUED OPERATION OF AN AUTHORIZED
INSURER ENGAGING IN INSURANCE BUSINESS IN THE STATE WOULD BE
HAZARDOUS TO POLICYHOLDERS OR CREDITORS OF THE AUTHORIZED INSURER
OR THE GENERAL PUBLIC, THE COMMISSIONER MAY CONSIDER:

(1)      ADVERSE FINDINGS REPORTED IN FINANCIAL CONDITION AND
MARKET CONDUCT EXAMINATION REPORTS;

(2)      THE INSURANCE REGULATORY INFORMATION SYSTEM AND
RELATED REPORTS OF THE NATIONAL ASSOCIATION OF INSURANCE
COMMISSIONERS;

(3)      THE RATIOS OF BENEFITS UNDER POLICIES, RESERVE INCREASES,
COMMISSION EXPENSE, AND GENERAL INSURANCE EXPENSE, AS TO ANNUAL
PREMIUM AND NET INVESTMENT INCOME AND WHETHER ANY OF THOSE RATIOS
COULD LEAD TO AN IMPAIRMENT OF CAPITAL AND SURPLUS;

(4)      WHETHER THE ASSET PORTFOLIO OF THE AUTHORIZED INSURER,
WHEN VIEWED IN LIGHT OF CURRENT ECONOMIC CONDITIONS, HAS SUFFICIENT
VALUE, LIQUIDITY, OR DIVERSITY TO ENSURE THE ABILITY OF THE AUTHORIZED
INSURER TO MEET ITS OUTSTANDING OBLIGATIONS AS THEY MATURE;

(5)      THE ABILITY OF AN ASSUMING REINSURER TO PERFORM,
INCLUDING WHETHER THE REINSURANCE PROGRAM OF THE AUTHORIZED
INSURER PROVIDES SUFFICIENT PROTECTION FOR ITS REMAINING SURPLUS, AFTER
TAKING INTO ACCOUNT THE CASH FLOW OF THE AUTHORIZED INSURER AND
CLASSES OF BUSINESS WRITTEN BY THE AUTHORIZED INSURER AND THE
FINANCIAL CONDITION OF THE ASSUMING REINSURER;

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