Ch. 108

1997 LAWS OF MARYLAND

(II) IF THE COMMISSIONER FINDS THAT THE VALUE OF THE
MUTUAL INSURER IS INSUFFICIENT TO WARRANT FINANCIAL CONSIDERATION,
THAT THE CONVERSION SHALL BE ACCOMPLISHED WITHOUT FINANCIAL
CONSIDERATION TO PAST, PRESENT. OR FUTURE POLICYHOLDERS.

(3) (I) BY WRITTEN ORDER, THE COMMISSIONER MAY WAIVE THE
REQUIREMENTS OF SUBSECTION (B)(2) OF THIS SECTION IF THE COMMISSIONER
FINDS THAT THE MUTUAL INSURER NO LONGER MEETS STATUTORY
REQUIREMENTS WITH RESPECT TO CAPITAL SURPLUS, DEPOSITS, OR ASSETS.

(II) ANY FINDING THAT RESULTS IN A WAIVER UNDER THIS
PARAGRAPH SHALL BE MADE AFTER:

1. REVIEW OF THE PLAN; AND

2. A AN AUDIT OF THE MUTUAL INSURER'S QUARTERLY
OR ANNUAL FINANCIAL STATEMENT; OR

B. A FINANCIAL EXAMINATION OF THE MUTUAL INSURER.

(G) THE COMMISSIONER MAY ADOPT REGULATIONS TO ENFORCE THE
PROVISIONS OF THIS SECTION.

SUBTITLE 1. INSURANCE COMPANY MUTUAL TO STOCK CONVERSION.

3-401.

(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS
INDICATED.

(B) "CONVERTED STOCK COMPANY" MEANS A DOMICILED STOCK INSURANCE
COMPANY THAT CONVERTED FROM A DOMICILED MUTUAL INSURANCE COMPANY
UNDER THIS SUBTITLE.

(C) (1) "ELIGIBLE MEMBER" OR "MEMBER" MEANS A MEMBER OF A
MUTUAL COMPANY WHOSE POLICY IS IN FORCE ON THE DATE ON WHICH THE
BOARD OF DIRECTORS ADOPTS A PLAN OF CONVERSION UNDER THIS SUBTITLE.

(2) "ELIGIBLE MEMBER" OR "MEMBER" DOES NOT INCLUDE;

(I) A PERSON INSURED UNDER A GROUP POLICY; OR

(II) A PERSON WHOSE POLICY BECOMES EFFECTIVE AFTER THE
BOARD OF DIRECTORS ADOPTS THE PLAN BUT BEFORE THE PLAN'S EFFECTIVE
DATE AND WHO RESCINDS THE POLICY UNDER § 3-408 OF THIS SUBTITLE.

(D) "PARTICIPATING POLICY" MEANS A POLICY THAT GRANTS A HOLDER THE
RIGHT TO RECEIVE DIVIDENDS IF, AS, AND WHEN DECLARED BY THE MUTUAL
COMPANY.

(E) "PLAN" MEANS A PLAN ADOPTED BY THE BOARD OF DIRECTORS OF A
MUTUAL COMPANY UNDER THIS ARTICLE TO CONVERT THE MUTUAL COMPANY
INTO A STOCK COMPANY.

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