PARRIS N. GLENDENING, Governor

Ch. 35

3-217. ASSESSMENTS.

(A) IN GENERAL.

ASSESSMENTS PERIODICALLY MAY BE LEVIED ON THE SUBSCRIBERS OF A
DOMESTIC RECIPROCAL INSURER LIABLE FOR ASSESSMENTS, AS ALLOWED BY THE
TERMS OF THE SUBSCRIBERS' POLICIES, BY:

(1) THE ATTORNEY IN FACT OF THE RECIPROCAL INSURER, AFTER
APPROVAL BY THE SUBSCRIBERS' ADVISORY COMMITTEE AND THE COMMISSIONER;
OR

(2) THE COMMISSIONER, IN LIQUIDATION OF THE RECIPROCAL

INSURER.

(B) SHARE OF DEFICIENCY.

(1) SUBJECT TO PARAGRAPH (3) OF THIS SUBSECTION, EACH
SUBSCRIBER'S SHARE OF A DEFICIENCY FOR WHICH AN ASSESSMENT IS MADE
SHALL BE CALCULATED BY MULTIPLYING:

(I) THE PREMIUM EARNED ON THE SUBSCRIBER'S POLICY
DURING THE PERIOD COVERED BY THE ASSESSMENT; BY

(II) THE RATIO OF THE TOTAL DEFICIENCY TO THE TOTAL
PREMIUMS EARNED DURING THAT PERIOD ON ALL POLICIES SUBJECT TO THE
ASSESSMENT.

(2) FOR PURPOSES OF CALCULATING THE EARNED PREMIUM UNDER
THIS SECTION:

(I) THE GROSS PREMIUM RECEIVED BY THE RECIPROCAL
INSURER FOR THE POLICY SHALL BE USED AS A BASE; AND

(II) DEDUCTIONS MAY BE TAKEN FROM THE GROSS PREMIUM
ONLY FOR CHARGES THAT DO NOT RECUR ON THE RENEWAL OR EXTENSION OF
THE POLICY.

(3) EACH SUBSCRIBER'S SHARE OF A DEFICIENCY MAY NOT EXCEED
THE SUBSCRIBER'S TOTAL CONTINGENT LIABILITY UNDER SUBSECTION (E) OF THIS
SECTION.

(C) OFFSETS.

A SUBSCRIBER MAY NOT HAVE AN OFFSET AGAINST AN ASSESSMENT FOR
WHICH THE SUBSCRIBER IS LIABLE BECAUSE OF A CLAIM FOR AN UNEARNED
PREMIUM OR LOSS PAYABLE.

(D) TIME LIMIT ON LIABILITY.

EACH SUBSCRIBER OF A DOMESTIC RECIPROCAL INSURER WITH CONTINGENT
LIABILITY IS LIABLE FOR AND SHALL PAY THE SUBSCRIBER'S SHARE OF AN

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