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PARRIS N. GLENDENING, Governor
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S.B. 598
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Senate Bill No. 598
AN ACT concerning
Motor Clubs - Required Security - Letters of Credit
FOR the purpose of authorizing an applicant for a license to provide motor club
service, in addition to other types of security, to deposit a certain letter of credit
in a certain amount as the security required for the license; providing for the
conditions of, liability under, and cancellation of the letters of credit; authorizing
the Insurance Commissioner to adopt certain regulations relating to letters of
credit; authorizing a motor club licensed by the Commissioner to substitute one
type of required security under certain circumstances for another type of
required security; and generally relating to letters of credit and required
security for motor clubs.
BY repealing and reenacting, with amendments,
Article - Insurance
Section 26-204
Annotated Code of Maryland
(1997 Volume and 2001 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:
Article - Insurance
26-204.
(a) An applicant for a license shall deposit with the Treasurer, who shall
maintain in trust:
(1) registered United States government bonds with a market value at
all times not less than $100,000 or, in the discretion of the Commissioner, a lower
amount not less than $15,000; [or]
(2) a corporate surety bond in the form that the Commissioner requires
in a penal sum not less than $100,000 or, in the discretion of the Commissioner, a
lower amount not less than $15,000; OR
(3) A LETTER OF CREDIT IN THE FORM THAT THE COMMISSIONER
REQUIRES IN AN AMOUNT NOT LESS THAN $100,000 OR, IN THE DISCRETION OF THE
COMMISSIONER, A LOWER AMOUNT NOT LESS THAN $15,000.
(b) (1) The bond OR LETTER OF CREDIT described under subsection (a)(2) OR
(3) of this section shall be:
(i) in favor of the State for the members of the applicant that
reside in the State;
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(ii) issued by a surety insurer OR BANK authorized to do business in
the State; and
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- 4733 -
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