Ch. 35

1997 LAWS OF MARYLAND

Defined terms: "Domestic insurer" § 1-101
"Insurance contract" § 1-101
"Reciprocal insurer" § 1-101
"Subscriber" § 3-201

3-216. LIABILITY OF SUBSCRIBERS.

(A) IN GENERAL.

(1) EXCEPT AS TO A NONASSESSABLE POLICY, EACH SUBSCRIBER HAS A
CONTINGENT ASSESSMENT LIABILITY, IN THE AMOUNT STATED IN THE POWER OF
ATTORNEY OR SUBSCRIBER'S AGREEMENT, FOR PAYMENT OF LOSSES AND
EXPENSES INCURRED WHILE THE SUBSCRIBER'S POLICY IS IN FORCE.

(2) THE LIABILITY OF EACH SUBSCRIBER, OTHER THAN AS TO A
NONASSESSABLE POLICY, FOR THE OBLIGATIONS OF THE RECIPROCAL INSURER IS
INDIVIDUAL, SEVERAL, AND PROPORTIONATE AND IS NOT JOINT.

(B) LIMITATION ON AMOUNT OF LIABILITY.

(1) THE CONTINGENT LIABILITY OF EACH SUBSCRIBER SHALL BE AT
THE RATE OF NOT LESS THAN ONE ADDITIONAL ANNUAL PREMIUM OR PREMIUM
DEPOSIT STATED IN THE POLICY BUT NOT MORE THAN 10 TIMES THE ANNUAL
PREMIUM OR PREMIUM DEPOSIT.

(2) THE MAXIMUM TOTAL CONTINGENT LIABILITY SHALL BE
CALCULATED AS SET FORTH IN § 3-217(E) OF THIS SUBTITLE.

(C) STATEMENT IN POLICY.

EACH ASSESSABLE POLICY ISSUED BY A RECIPROCAL INSURER SHALL
CONTAIN A STATEMENT OF THE CONTINGENT LIABILITY.

REVISOR'S NOTE; This section is new language derived without substantive
change from former Art. 48A, §§ 294 and, as it related to the amount of
contingent liability, 285(b)(5).

In subsection (a)(1) of this section, the word "actual", which formerly
modified "losses and expenses", is deleted as surplusage.

In subsection (b)(2) of this section, the cross-reference to "§ 3-217(e) of this
subtitle" is substituted for the former incorrect cross-reference to [Art. 48A]
"§ 295". Former Art. 48A, § 297 - now § 3-217 (e) of this subtitle - covered
total contingent liability.

In subsection (c) of this section, the reference to a "reciprocal" insurer is
added for specificity.

Defined terms: "Policy" § 1-101
"Premium" § 1-101
"Reciprocal insurer" § 1-101
"Subscriber" § 3-201

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