ROBERT L. EHRLICH, JR., Governor                                  H.B. 2

(III)    INCOME AND EXPENSES; AND

(IV)    RETURN ON INVESTED SURPLUS; AND

(3) MANAGEMENT'S EVALUATION OF THE FINANCIAL POSITION OF THE
SOCIETY WHICH SHALL INCLUDE AN ANALYSIS INDICATING WHETHER SUFFICIENT
RESOURCES EXIST TO JUSTIFY PROVIDING A DIVIDEND OR SIMILAR DISTRIBUTION
TO MEMBERS IN THE CURRENT YEAR AND, IF NOT, HOW THE CURRENT
CIRCUMSTANCES VARY FROM PRIOR YEARS IN WHICH SUCH DISTRIBUTIONS HAVE
BEEN MADE.

(B)      (1) ANY RATE FILING BY THE SOCIETY SHALL INCLUDE THE
INFORMATION REQUIRED UNDER SUBSECTION (A) OF THIS SECTION.

(2)      BEFORE ANY RATE FILING BY THE SOCIETY WHICH WOULD RESULT
IN AN AGGREGATE INCREASE IN PREMIUM OF GREATER THAN 7.5% MAY BECOME
EFFECTIVE, THE COMMISSIONER SHALL DETERMINE WHETHER OTHER FINANCIAL
RESOURCES OF THE SOCIETY COULD PRUDENTLY BE APPLIED IN LIEU OF
INCREASED PREMIUMS.

(3)      IF THE COMMISSIONER DETERMINES OTHER FINANCIAL
RESOURCES OF THE SOCIETY MAY BE USED IN LIEU OF PREMIUMS, THE
COMMISSIONER SHALL ORDER THE RATES FILED TO BE REDUCED.

(C)      (1) BEFORE THE SOCIETY MAY PAY TO ITS MEMBERS A DIVIDEND OR
SIMILAR DISTRIBUTION, THE SOCIETY SHALL PROVIDE TO THE COMMISSIONER,
USING A METHODOLOGY PRESCRIBED BY THE COMMISSIONER, AN ANALYSIS
INDICATING THE EXTENT TO WHICH THE DISTRIBUTION RESULTS FROM ANY
EXCESS OF PREMIUMS COLLECTED OVER ACCUMULATED LOSSES FOR INCIDENTS
ARISING IN ANY PREMIUM YEAR DURING WHICH THE STATE PROVIDED FINANCIAL
ASSISTANCE.

(2) (I) TO THE EXTENT THE ANALYSIS REQUIRED UNDER PARAGRAPH
(1) OF THIS SUBSECTION DETERMINES THAT FUNDS AVAILABLE FOR DISTRIBUTION
ARE ATTRIBUTED TO A YEAR IN WHICH FINANCIAL ASSISTANCE IS PROVIDED, THE
COMMISSIONER SHALL ORDER THE SOCIETY TO PAY A PORTION OF THE
DISTRIBUTION TO THE STATE.

(II) THE AMOUNT PAID TO THE STATE SHALL BE DETERMINED
BASED ON THE RATIO OF STATE EXPENDITURES FOR FINANCIAL ASSISTANCE TO
TOTAL PREMIUMS EARNED FOR EACH PREMIUM YEAR FOR WHICH STATE FINANCIAL
ASSISTANCE WAS MADE.

24-212.

(A) NOTWITHSTANDING ANY OTHER PROVISION OF THIS ARTICLE, THE
COMMISSIONER MAY DETERMINE THAT THE SURPLUS OF THE SOCIETY IS
EXCESSIVE IF:

(1) THE TOTAL SURPLUS IS GREATER THAN THE APPROPRIATE RISK
BASED CAPITAL REQUIREMENTS, AS DETERMINED BY THE COMMISSIONER, FOR THE
IMMEDIATELY PRECEDING CALENDAR YEAR; AND

- 167 -