Ch. 35

1997 LAWS OF MARYLAND

THIS SECTION DOES NOT APPLY TO THE CONVERSION OF A CORPORATION
AUTHORIZED UNDER THIS SUBTITLE TO A STOCK HEALTH INSURER UNDER A
COURT ORDER IN CONNECTION WITH THE REHABILITATION OR REORGANIZATION
OF THE CORPORATION UNDER TITLE 9, SUBTITLE 2 OF THIS ARTICLE.

(B) AUTHORIZED.

A CORPORATION THAT IS INCORPORATED UNDER THE LAWS OF THE STATE
AND IS SUBJECT TO THIS SUBTITLE MAY CONVERT TO A FOR-PROFIT STOCK HEALTH
INSURER SUBJECT TO THE PROVISIONS OF THIS ARTICLE UNDER A PLAN AND
PROCEDURE APPROVED BY THE COMMISSIONER.

(C) STANDARDS FOR APPROVAL.

THE COMMISSIONER MAY NOT APPROVE A PLAN OR PROCEDURE FOR
CONVERSION UNLESS THE PLAN OR PROCEDURE:

(1) IS EQUITABLE TO SUBSCRIBERS AND CERTIFICATE HOLDERS, IF
ANY, OF THE CORPORATION;

(2) COMPLIES WITH TITLE 2, SUBTITLE 6 OF THE CORPORATIONS AND
ASSOCIATIONS ARTICLE;

(3) PROVIDES THAT NONE OF THE ASSETS OR SURPLUS OF THE
NONPROFIT HEALTH SERVICE PLAN WILL INURE DIRECTLY OR INDIRECTLY TO AN
OFFICER OR DIRECTOR OF THE CORPORATION;

(4) IS APPROVED BY AT LEAST TWO-THIRDS OF THE CORPORATION'S
CERTIFICATE HOLDERS WHO HAVE VOTED ON THE PLAN OR PROCEDURE IN
PERSON, BY PROXY, OR BY MAIL UNDER THE NOTICE AND PROCEDURE APPROVED
BY THE COMMISSIONER; AND

(5) ENSURES THAT THE RESULTING STOCK HEALTH INSURER WILL
POSSESS SURPLUS IN AN AMOUNT SUFFICIENT TO:

(I) COMPLY WITH THE SURPLUS REQUIREMENTS UNDER THIS
ARTICLE FOR A STOCK HEALTH INSURER; AND

(II) PROVIDE FOR THE SECURITY OF THE RESULTING STOCK
HEALTH INSURER'S POLICYHOLDERS AND CERTIFICATE HOLDERS.

(D) CORPORATE STATUS NOT ABANDONED.

A CORPORATION THAT BECOMES A FOR-PROFIT STOCK HEALTH INSURER
UNDER THIS SECTION DOES NOT ABANDON ITS CORPORATE STATUS BY
CONVERTING, UNLESS THE PLAN SPECIFICALLY PROVIDES OTHERWISE.

(E) EFFECT ON CERTIFICATE OF AUTHORITY, APPOINTMENTS, FORMS, AND
OTHER FILINGS.

IF THE CORPORATION AT ALL TIMES REMAINS QUALIFIED TO ENGAGE IN
BUSINESS IN THE STATE, THE CERTIFICATE OF AUTHORITY, AGENT APPOINTMENTS,

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