Ch. 11                                          1996 LAWS OF MARYLAND

(2) A DISTRIBUTION TO ANY STOCKHOLDERS OF AN IMPAIRED
INSURER MAY NOT BE MADE UNTIL ALL OF THE ASSESSMENTS LEVIED BY THE
CORPORATION WITH RESPECT TO THE IMPAIRED INSURER HAVE BEEN FULLY
RECOVERED BY THE CORPORATION.

(F)      UNFAIR TRADE PRACTICES.

IT IS A PROHIBITED UNFAIR METHOD OF COMPETITION, SUBJECT TO TITLE 27
OF THIS ARTICLE (UNFAIR TRADE PRACTICES), FOR A PERSON TO MAKE USE IN ANY
MANNER OF THE PROTECTION AFFORDED BY THIS SUBTITLE IN THE SALE OF
INSURANCE.

(G)     RECOVERY OF DISTRIBUTIONS.

(1)      SUBJECT TO THE LIMITATIONS OF PARAGRAPHS (2) AND (4) OF THIS
SUBSECTION, IF AN ORDER FOR LIQUIDATION OR REHABILITATION OF AN INSURER
DOMICILED IN THE STATE HAS BEEN ENTERED, THE RECEIVER APPOINTED UNDER
THE ORDER SHALL HAVE A RIGHT TO RECOVER ON BEHALF OF THE INSURER, FROM
ANY AFFILIATE THAT CONTROLLED THE INSURER, THE AMOUNT OF DISTRIBUTION,
OTHER THAN STOCK DIVIDENDS PAID BY THE INSURER ON ITS CAPITAL STOCK,
MADE AT ANY TIME DURING THE 5 YEARS PRECEDING THE PETITION FOR
LIQUIDATION OR REHABILITATION.

(2)      A DIVIDEND DESCRIBED IN PARAGRAPH (1) OF THIS SUBSECTION IS
NOT RECOVERABLE IF THE INSURER SHOWS THAT:

(I)       THE DISTRIBUTION WAS LAWFUL AND REASONABLE WHEN
PAID; AND                                                            .

(II)     THE INSURER DID NOT KNOW AND COULD NOT REASONABLY
HAVE KNOWN THAT THE DISTRIBUTION MIGHT ADVERSELY AFFECT THE ABILITY
OF THE INSURER TO FULFILL ITS CONTRACTUAL OBLIGATIONS.

(3)      (I) A PERSON THAT WAS AN AFFILIATE THAT CONTROLLED THE
INSURER WHEN THE DISTRIBUTIONS DESCRIBED IN PARAGRAPH (1) OF THIS
SUBSECTION WERE PAID IS LIABLE UP TO THE AMOUNT OF DISTRIBUTIONS THE
PERSON RECEIVED.

(II)     A PERSON THAT WAS AN AFFILIATE THAT CONTROLLED THE
INSURER WHEN THE DISTRIBUTIONS DESCRIBED UNDER PARAGRAPH (1) OF THIS
SUBSECTION WERE DECLARED, IS LIABLE UP TO THE AMOUNT OF DISTRIBUTIONS
THE PERSON WOULD HAVE RECEIVED IF THEY HAD BEEN PAID IMMEDIATELY.

(III)    TWO OR MORE PERSONS THAT ARE LIABLE WITH RESPECT TO
THE SAME DISTRIBUTIONS ARE JOINTLY AND SEVERALLY LIABLE.

(4)      THE MAXIMUM AMOUNT RECOVERABLE UNDER THIS SUBSECTION
IS THE AMOUNT NEEDED IN EXCESS OF ALL OTHER AVAILABLE ASSETS OF THE
IMPAIRED INSURER TO PAY THE CONTRACTUAL OBLIGATIONS OF THE IMPAIRED
INSURER.

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