Ch. 682                                    1997 LAWS OF MARYLAND

the insurance is obtained by the purchasing group, the insurance is written by an
authorized insurer, and the claim is made by a person residing or located in the State; or

2. arises out of a surety bond issued by the insolvent insurer for
the protection of a third party that is a resident;

(ii) that is presented on or before the last date fixed for the filing of
claims in the domiciliary delinquency proceeding as a claim to the corporation or to the
receiver in the State;

(iii) that:

1.       except for a surety bond claim, was incurred or existed
before, on, or within 30 days after the determination of insolvency; or

2.       for a surety bond claim that arises out of a surety bond issued
by a domestic insurer, was incurred or existed before, on, or within 18 months after the
determination of insolvency, whether or not the surety bond is issued for no stated period
or for a stated period; and

(iv) that arises out of a policy or surety bond of the insolvent insurer
issued for a kind of insurance to which this subtitle applies.

(2)     "Covered claim" does not include:

(i) an amount due a reinsurer, insurer, insurance pool, or
underwriting association, as a subrogation recovery or otherwise; or

(ii) an amount due that arises out of insurance covering the members
of a purchasing group if the insurance obtained by the purchasing group is written by an
unauthorized insurer.

(3)      (1) "COVERED CLAIM" DOES NOT INCLUDE A FIRST PARTY CLAIM
BY AN INSURED WHOSE NET WORTH EXCEEDS $50,000,000 ON DECEMBER 31 OF THE
YEAR BEFORE THE YEAR IN WHICH THE INSURER BECOMES AN INSOLVENT
INSURER.

(II) FOR PURPOSES OF THIS PARAGRAPH, THE NET WORTH OF AN
INSURED IS DEEMED TO INCLUDE THE AGGREGATE NET WORTH OF THE INSURED
AND ALL OF ITS SUBSIDIARIES CALCULATED ON A CONSOLIDATED BASIS.

9-310.1.

(A)    ANY OBLIGATION OF THE CORPORATION TO DEFEND AN INSURED SHALL
CEASE ON PAYMENT BY THE CORPORATION, BY SETTLEMENT RELEASING THE
INSURED OR ON A JUDGMENT, OF AN AMOUNT EQUAL TO THE LESSER OF THE
CORPORATION'S COVERED CLAIM OBLIGATION LIMIT OR THE APPLICABLE POLICY
LIMIT.

(B)     (1) IN THIS SUBSECTION, "AFFILIATE" MEANS A PERSON THAT
DIRECTLY OR INDIRECTLY, THROUGH ONE OR MORE INTERMEDIARIES, CONTROLS,
IS CONTROLLED BY, OR IS UNDER COMMON CONTROL WITH ANOTHER PERSON.

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