S.B. 844

VETOES

parties to the agreement. Insurers merging or consolidating under this section shall enter
into a written agreement prescribing the terms and conditions of the merger and setting
forth the name of the surviving company and its amended certificate of incorporation
which shall contain the provisions required by this article respecting the organization of a
mutual insurer. Such agreement shall be approved by the vote of a majority of the board
of directors of each company and such agreement shall be submitted to a meeting of
members and approved by the votes of at least two thirds of those members of each
company who[ are present and voting at the meeting] VOTE ON THE PLAN IN PERSON,
BY PROXY, OR BY MAIL. Notice shall be mailed to the members of the company not less
than twenty days before the date of the meeting of the time, place and purpose of the
meeting or in lieu thereof, notice shall be published at least once a week for three
successive weeks in some newspaper printed in the county in which the company has its
principal office and in addition thereto, in some newspaper printed in either of the two
largest cities in each state in which the company shall be licensed to do business.

Such agreement, executed under corporate seal by officers of the company
authorized for the purpose, and with evidence of its adoption shall be submitted to the
Commissioner. If it appears that the requirements of this section have been complied
with, the Commissioner shall so certify and approve the agreement by his endorsement
thereon, One of the duplicates shall thereupon be filed in his office and the other
duplicate shall be delivered to the continuing company.

493.

(D) SUBJECT TO THE APPROVAL OF THE COMMISSIONER AND TO THE
PROVISIONS OF THE SUBTITLE, A DOMESTIC MUTUAL INSURANCE COMPANY MAY
ACQUIRE OR FORM A SUBSIDIARY INSURANCE HOLDING COMPANY.

SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland
read as follows:

Article — Insurance

3-116.

(a) (1) (I) A director, officer, or member of a stock insurer [or mutual
insurer] or any other person may lend or advance to the stock insurer [or mutual
insurer] any money necessary to enable it to comply with a surplus requirement or any
other requirement of law.

[(2)] (II) Interest on the loan or advance TO A STOCK INSURER may not

exceed 6% per year.

[(b)] (2) A loan or advance UNDER THIS SUBSECTION and any interest on it:

[(1)] (I) is payable only out of the surplus remaining after the stock insurer
[or mutual insurer] provides for all reserves and other liabilities; and

[(2)] (II) is not otherwise a liability or claim against the stock insurer [or
mutual insurer] or any of its assets.

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