ROBERT L. EHRLICH, JR., Governor

Ch. 119

CHAPTER 119
(House Bill 114)

AN ACT concerning

Insurance - Reinsurance - Ceding Insurers

FOR the purpose of altering the circumstances under which credit, as an asset or
deduction from liability, may be allowed to a ceding insurer for reinsurance;
repealing a certain provision of law that prohibits the Maryland Insurance
Commissioner from approving or accepting reinsurance by a ceding domestic
insurer under certain circumstances; requiring certain payments made by a
reinsurer to be made directly to the ceding insurer or its domiciliary receiver
except under certain circumstances; providing that if a life and health insurance
guaranty association has elected to succeed to the rights and obligations of an
insolvent insurer under a reinsurance contract, the reinsurer's liability to pay
covered reinsured claims continues under the reinsurance contract, subject to a
certain condition; requiring payment for a covered reinsured claim to be made
by the reinsurer only at the direction of the life and health insurance guaranty
association or its designated successor; providing that payment by the reinsurer
for a covered reinsured claim discharges certain liability of the reinsurer under
certain circumstances; authorizing a reinsurance agreement to require that
certain notice of a claim made against an insolvent ceding insurer be given by
the insolvent ceding insurer's domiciliary receiver to the reinsurer within a
reasonable time after the claim is filed in the liquidation proceeding;
authorizing the reinsurer to investigate the claim and interpose certain defenses
in the liquidation proceeding; authorizing the reinsurer to file a claim against
the insolvent ceding insurer for certain expenses; specifying the maximum
amount of the claim; requiring a certain apportionment of certain expenses
under certain circumstances; and generally relating to reinsurance and ceding
insurers.

BY repealing and reenacting, without amendments,
Article - Insurance
Section 5-901

Annotated Code of Maryland
(1997 Volume and 2002 Supplement)

BY repealing and reenacting, with amendments,
Article - Insurance
Section 5-904

Annotated Code of Maryland
(1997 Volume and 2002 Supplement)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:

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