PARRIS N. GLENDENING, Governor

Ch. 35

(1) EXTINGUISH THE CONTINGENT LIABILITY OF SUBSCRIBERS UNDER
ITS POLICIES THEN IN FORCE IN THE STATE; AND

(2) OMIT PROVISIONS THAT IMPOSE CONTINGENT LIABILITY IN ALL
POLICIES DELIVERED OR ISSUED FOR DELIVERY IN THE STATE AS LONG AS THE
SURPLUS REMAINS UNIMPAIRED.

(B) LIMITATION ON DOMESTIC RECIPROCAL INSURERS.

(1) THE COMMISSIONER MAY NOT AUTHORIZE A DOMESTIC
RECIPROCAL INSURER TO EXTINGUISH THE CONTINGENT LIABILITY OF ANY OF ITS
SUBSCRIBERS OR IN ANY OF ITS POLICIES TO BE ISSUED UNLESS THE RECIPROCAL
INSURER QUALIFIES TO EXTINGUISH AND DOES EXTINGUISH THE CONTINGENT
LIABILITY OF ALL OF ITS SUBSCRIBERS AND IN ALL OF ITS POLICIES FOR ALL KINDS
OF INSURANCE THAT THE RECIPROCAL INSURER TRANSACTS.

(2) NOTWITHSTANDING PARAGRAPH (1) OF THIS SUBSECTION, IF
REQUIRED BY THE LAWS OF ANOTHER STATE IN WHICH THE DOMESTIC
RECIPROCAL INSURER IS AUTHORIZED TO TRANSACT INSURANCE, THE DOMESTIC
RECIPROCAL INSURER:

(I) MAY ISSUE POLICIES THAT PROVIDE FOR THE CONTINGENT
LIABILITY OF ITS SUBSCRIBERS WHO ACQUIRE POLICIES IN THAT STATE; AND

(II) NEED NOT EXTINGUISH THE CONTINGENT LIABILITY
APPLICABLE TO POLICIES THEN IN FORCE IN THAT STATE.

(C) REVOCATION OF AUTHORITY TO ISSUE NONASSESSABLE POLICIES.

(1) IF THE SURPLUS DESCRIBED IN SUBSECTION (A) OF THIS SECTION
BECOMES IMPAIRED, THE COMMISSIONER IMMEDIATELY SHALL REVOKE THE
CERTIFICATE THAT AUTHORIZES THE RECIPROCAL INSURER TO ISSUE
NONASSESSABLE POLICIES.

(2) THE REVOCATION DOES NOT SUBJECT A POLICY THEN IN FORCE TO
CONTINGENT LIABILITY FOR THE REMAINDER OF THE PERIOD FOR WHICH THE
PREMIUM HAS BEEN PAID.

(3) AFTER REVOCATION OF AUTHORITY TO ISSUE NONASSESSABLE
POLICIES, A RECIPROCAL INSURER MAY NOT ISSUE OR RENEW A POLICY WITHOUT
PROVIDING FOR THE CONTINGENT LIABILITY OF THE SUBSCRIBER.

REVISOR'S NOTE: This section is new language derived without substantive
change from former Art. 48A, § 298.

In subsection (b)(2) of this section, the reference to another state "in which
the domestic reciprocal insurer is authorized to transact insurance" is
substituted for the former reference to another state "in which the insurer is
transacting insurance as an authorized insurer" to avoid confusion with the
defined term "authorized insurer". See § 1-101 of this article.

Defined terms: "Commissioner" § 1-101
"Domestic insurer" § 1-101

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