Ch. 11

1996 LAWS OF MARYLAND

(II)     WHOLLY FROM CHARGES COLLECTED FROM INSURED
DEBTORS; OR

(III)    PARTLY FROM THE FUNDS OF THE CREDITOR AND PARTLY
FROM CHARGES COLLECTED FROM INSURED DEBTORS.

(2)      A POLICY ON WHICH THE PREMIUM IS TO BE PAID WHOLLY OR
PARTLY FROM THE COLLECTION FROM INSURED DEBTORS OF IDENTIFIABLE
CHARGES NOT REQUIRED OF UNINSURED DEBTORS MAY NOT INCLUDE, IN THE
CLASS OR CLASSES OF DEBTORS ELIGIBLE FOR INSURANCE, DEBTORS UNDER
OBLIGATIONS OUTSTANDING AT ITS DATE OF ISSUE WITHOUT EVIDENCE OF
INDIVIDUAL INSURABILITY UNLESS AT LEAST 75% OF THE ELIGIBLE DEBTORS
ELECT TO PAY THE REQUIRED CHARGES.

(3)      A POLICY ON WHICH NO PART OF THE PREMIUM IS PAID FROM THE
COLLECTION OF IDENTIFIABLE CHARGES NOT REQUIRED OF UNINSURED DEBTORS
MUST INSURE:

(I)       ALL ELIGIBLE DEBTORS; OR

(II)     ALL ELIGIBLE DEBTORS OTHER THAN THOSE WHO HAVE
EVIDENCE OF INDIVIDUAL INSURABILITY THAT IS UNSATISFACTORY TO THE
INSURER.

(D)     NEW ENTRANTS TO GROUP.
THE POLICY MAY BE ISSUED ONLY IF:

(1)      THE POLICY RESERVES TO THE INSURER THE RIGHT TO REQUIRE
EVIDENCE OF INDIVIDUAL INSURABILITY IF LESS THAN 75% OF THE NEW ENTRANTS
BECOME INSURED; AND

(2)      THE GROUP OF ELIGIBLE DEBTORS:

(I)       IS RECEIVING NEW ENTRANTS AT THE RATE OF AT LEAST 100
INDIVIDUALS YEARLY; OR

(II)     MAY REASONABLY BE EXPECTED TO RECEIVE AT LEAST 100
NEW ENTRANTS DURING THE FIRST POLICY YEAR.

(E)     AMOUNT AND TERM OF INSURANCE.

(1)      THE AMOUNT OF INSURANCE ON THE LIFE OF A DEBTOR MAY NOT
EXCEED THE LESSER OF:

(I)       THE AMOUNT THE DEBTOR OWES TO THE CREDITOR; AND

(II)     $50,000.

(2)      EXCEPT AS PROVIDED IN PARAGRAPH (3) OF THIS SUBSECTION, IF
THE INDEBTEDNESS IS REPAYABLE IN ONE SUM TO THE CREDITOR, THE INSURANCE
ON THE LIFE OF A DEBTOR MAY NOT BE IN EFFECT FOR MORE THAN 18 MONTHS.

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