Md. Code, Insurance, Title 4

in effect

Md. Code, Insurance § 4-101

(a) (1) Except as otherwise provided in this article, a person may not act as an insurer and an insurer may not engage in the insurance business in the State unless the person has a certificate of authority issued by the Commissioner. (2) An insurer may not have or maintain in this State an office, representative, or other facility to solicit or service any kind of insurance in another state unless the insurer is then authorized to engage in the same kind of insurance business in this State. (b) A certificate of authority is not required for an insurer to engage in: (1) transactions that relate to policies that were lawfully written in the State, or the liquidation of assets and liabilities of the insurer, including the collection of premiums on existing policies, resulting from former authorized operations of the insurer in the State; (2) transactions that occur after issuance of a policy that covers only subjects of insurance not resident, located, or expressly to be performed in the State at the time of issuance, or that covers property in the course of transportation by land, air, or water to, from, or through the State, including any incidental preparation and storage, and the coverage was lawfully solicited, written, and delivered outside the State; (3) transactions that relate to surplus lines coverages lawfully written under Title 3, Subtitle 3 of this article; or (4) reinsurance transactions, except as to domestic reinsurers.

Md. Code, Insurance § 4-102

(a) To engage in the insurance business in the State, an insurer must: (1) be in compliance with its charter powers and with this article; and (2) be an incorporated stock insurer, incorporated mutual insurer, or reciprocal insurer. (b) An insurer may not be authorized to engage in the insurance business in the State if the insurer has or uses a name that is so similar to the name of an insurer already so authorized as to tend to cause uncertainty or confusion or that tends to deceive or mislead about the type of organization of the insurer. (c) (1) A foreign insurer may not be authorized to engage in the insurance business in the State if: (i) the voting control or ownership of the foreign insurer is held in whole or substantial part by a government or governmental unit; or (ii) the foreign insurer is operated for or by a government or governmental unit. (2) For purposes of this subsection, membership in a mutual insurer, subscribership in a reciprocal insurer, ownership of stock of an insurer by the alien property custodian or similar official of the United States, or supervision of an insurer by a public insurance supervisory authority are not considered to be ownership, control, or operation of the insurer. (d) (1) In this subsection, “Lloyds underwriters” means an aggregation of individuals who, under a common name, engage in the insurance business for profit through an attorney in fact who has authority, within the limits specified in the power of attorney, to obligate the underwriters severally on insurance contracts made or issued by the attorney in fact, in the name of the aggregation of individuals, to and with any person insured. (2) A Lloyds underwriter may not be organized in the State and a foreign or alien Lloyds underwriter may not be authorized to engage in the insurance business in the State. (3) This subsection does not restrict the right of insurers to place surplus lines coverages in and to cede reinsurance to foreign or alien Lloyds underwriters, if the surplus lines and reinsurance transactions are otherwise allowed under this article.

Md. Code, Insurance § 4-103

(a) Capital and surplus requirements for an insurer shall be based on all the kinds of insurance business that the insurer transacts or will transact, regardless of where the insurance business is transacted. (b) To qualify for an initial certificate of authority to engage in one kind or a combination of kinds of insurance business, an insurer must have and maintain the capital stock and surplus requirements of: (1) §§ 4–104 and 4–105 of this subtitle, for a stock insurer; (2) Title 3, Subtitle 1 of this article, for a mutual insurer; (3) Title 3, Subtitle 2 of this article, for a reciprocal insurer; (4) Title 8, Subtitle 4 of this article, for a fraternal benefit society; and (5) Title 14, Subtitle 1 of this article, for a nonprofit health service plan. (c) (1) In addition to any other capital and surplus requirements of this article, each insurer’s assets and surplus as regards policyholders shall be reasonable in relation to the insurer’s outstanding liabilities and adequate to its financial needs. (2) In determining whether an insurer’s assets and surplus as regards policyholders are reasonable in relation to the insurer’s outstanding liabilities and adequate to its financial needs, the following factors, among others, shall be considered: (i) the size of the insurer as measured by its assets, capital and surplus, reserves, premium writings, insurance in force, and other appropriate criteria; (ii) the extent to which the insurer’s business is diversified among the several lines of insurance; (iii) the number and size of risks insured in each line of insurance; (iv) the geographical dispersion of the insurer’s insured risks; (v) the nature and extent of reinsurance of the insurer’s risks; (vi) the quality, diversification, and liquidity of the insurer’s investment portfolio; (vii) the recent past and projected future trends in the size of the insurer’s surplus as regards policyholders; (viii) the surplus as regards policyholders maintained by comparable insurers; and (ix) the financial position of the insurer, after excluding from assets investments in and other transactions with persons that directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with another person. (d) The provisions of this subtitle shall be supplemented by the requirements of Subtitle 3 of this title.

Md. Code, Insurance § 4-104

(a) Except as otherwise provided in this article, to qualify for a certificate of authority to engage in one kind of insurance business, an insurer that started business in the State on or before June 30, 1965, must have and maintain paid–in capital stock with a fixed nominal or par value in an amount not less than that applicable under the following schedule: Kind of Minimum Capital Insurance Business Stock Required (1) life insurance including annuities and health $200,000 insurance …………………………………………… (2) health insurance …………………………………… $100,000 (3) property insurance and marine insurance other $250,000 than wet marine and transportation insurance… (4) title insurance ………………………………………… $250,000 (5) wet marine and transportation insurance ………… $250,000 (6) casualty insurance, not including vehicle liability $250,000 insurance for workers’ compensation insurance … (7) vehicle liability insurance …………………………… $250,000 (8) workers’ compensation insurance …………………… $250,000 (9) surety insurance ………………………………………… $250,000 (b) To qualify for a certificate of authority to engage in two or more kinds of insurance business, an insurer that started business in the State on or before June 30, 1965, must have paid–in capital stock with a fixed nominal or par value in an amount not less than the lesser of: (1) the combined sum of the capital stock required for each of the kinds of insurance business to be authorized; or (2) $500,000. (c) Except as otherwise provided in this article, to qualify for a certificate of authority to engage in one kind of insurance business, an insurer that started business in the State during the period from July 1, 1965, to June 30, 1991, both inclusive, must have and maintain paid–in capital stock with a fixed nominal or par value in an amount not less than that applicable under the following schedule: Kind of Minimum Capital Insurance Business Stock Required (1) life insurance including annuities and health $500,000 insurance …………………………………………… (2) health insurance …………………………………… $250,000 (3) property insurance and marine insurance other $250,000 than wet marine and transportation insurance… (4) title insurance ………………………………………… $250,000 (5) wet marine and transportation insurance ………… $250,000 (6) casualty insurance, not including vehicle liability $250,000 insurance for workers’ compensation insurance … (7) vehicle liability insurance …………………………… $250,000 (8) workers’ compensation insurance …………………… $250,000 (9) surety insurance ………………………………………… $250,000 (d) To qualify for a certificate of authority to engage in two or more kinds of insurance business, an insurer that started business in the State during the period from July 1, 1965, to June 30, 1991, both inclusive, must have paid–in capital stock with a fixed nominal or par value in an amount not less than $500,000. (e) Except as otherwise provided in this article, to qualify for a certificate of authority to engage in one kind of insurance business, an insurer that started business in the State on or after July 1, 1991, must have and maintain paid–in capital stock with a fixed nominal or par value in an amount not less than that applicable under the following schedule: Kind of Minimum Capital Insurance Business Stock Required (1) life insurance including annuities……………… $1,500,000 (2) health insurance …………………………………… $750,000 (3) property insurance and marine insurance other $750,000 than wet marine and transportation insurance… (4) title insurance ………………………………………… $750,000 (5) wet marine and transportation insurance ………… $750,000 (6) casualty insurance, not including vehicle liability $250,000 insurance for workers’ compensation insurance … (7) vehicle liability insurance …………………………… $750,000 (8) workers’ compensation insurance …………………… $750,000 (9) surety insurance ………………………………………… $750,000 (f) To qualify for a certificate of authority to engage in two or more kinds of insurance business, an insurer that started business in the State on or after July 1, 1991, must have paid–in capital stock with a fixed nominal or par value in an amount not less than $1,500,000. (g) On or after July 1, 2001, an insurer that qualified for a certificate of authority to engage in any kind of insurance business on or before June 30, 1991, must have and maintain paid–in capital stock with a fixed nominal or par value in an amount not less than 150% of that required of an insurer authorized to start insurance business in the State on June 30, 1991.

Md. Code, Insurance § 4-104.1

§4–104.1. Notwithstanding the provisions of § 4–104 of this subtitle, a title insurer domiciled in this State shall have and maintain paid–in capital stock with a fixed nominal or par value in the amount of: (1) $500,000 as of July 1, 2010; (2) $625,000 as of July 1, 2011; and (3) $750,000 as of July 1, 2012, and each July 1 thereafter.

Md. Code, Insurance § 4-105

(a) In addition to the minimum capital stock required by § 4-104 of this subtitle, to qualify for an initial certificate of authority to engage in one kind or a combination of kinds of insurance business, an insurer must have surplus assets or funds in an amount not less than 150% of the minimum capital stock required. (b) For authority to continue in the insurance business, in addition to the minimum capital stock required by § 4-104 of this subtitle, an insurer that started business in the State on or after July 1, 1966, must maintain surplus assets or funds in an amount not less than 100% of the minimum capital stock required. (c) (1) For authority to continue in the insurance business, in addition to the minimum capital stock required by § 4-104 of this subtitle, an insurer that started business in the State on or before June 30, 1966: (i) must maintain surplus assets or funds in an amount not less than 50% of the minimum capital stock required; and (ii) if authorized to write vehicle liability insurance, must maintain surplus assets or funds in an amount not less than $300,000, whether or not the insurer also is authorized to write other kinds of insurance. (2) The combined amount of surplus required by items (i) and (ii) of paragraph (1) of this subsection may not exceed the amount of surplus required by subsection (b) of this section of an insurer authorized on or after July 1, 1966, to transact the same kinds of insurance business.

Md. Code, Insurance § 4-105.1

§4–105.1. Notwithstanding the provisions of § 4–105 of this subtitle, a title insurer domiciled in this State shall have and maintain minimum surplus in the amount of: (1) $500,000 as of July 1, 2010; (2) $625,000 as of July 1, 2011; and (3) $750,000 as of July 1, 2012, and each July 1 thereafter.

Md. Code, Insurance § 4-106

(a) Except as provided in subsections (b) and (c) of this section, to qualify for a certificate of authority, an insurer shall deposit and maintain in trust with the Treasurer, for the protection of the insurer’s policyholders and creditors, an amount not less than $100,000 in: (1) cash; or (2) government securities eligible for the investment of capital funds of domestic insurers as specified in § 5-701(b) of this article. (b) For a foreign insurer, instead of all or part of the deposit required by subsection (a) of this section, the Commissioner shall accept the current certificate of the insurance supervisory official of another state showing that a like deposit by the foreign insurer is being maintained: (1) in public custody or in a depository approved by the official; and (2) in trust for protection of the policyholders and creditors of the foreign insurer in the United States. (c) For an alien insurer, instead of all or part of the deposit required by subsection (a) of this section, the Commissioner shall accept evidence satisfactory to the Commissioner that the alien insurer maintains in the United States assets available for discharge of its insurance obligations in the United States: (1) in public depositories, or in trust institutions in the United States approved by the Commissioner; and (2) in an amount not less than the outstanding liabilities of the insurer arising out of its insurance business in the United States, plus an amount equal to the deposit required under this section for other insurers requesting authority to engage in like kinds of insurance business.

Md. Code, Insurance § 4-107

(a) On the form that the Commissioner provides, each insurer applying for a certificate of authority must appoint the Commissioner as attorney for service of process issued against the insurer in the State. (b) The appointment: (1) is irrevocable; (2) binds the insurer and any successor in interest or successor to the assets and liabilities of the insurer; and (3) remains in effect as long as there is in force in the State a contract made by the insurer or an obligation arising from a contract made by the insurer.

Md. Code, Insurance § 4-108

An applicant for an initial certificate of authority shall: (1) file with the Commissioner an application on the form that the Commissioner provides; (2) pay to the Commissioner the applicable fees required by § 2-112 of this article; and (3) file with the Commissioner: (i) a certified copy of its articles of incorporation with all amendments; (ii) a certified copy of its bylaws with all amendments; (iii) a copy of its annual statement as of the immediately preceding December 31; (iv) for a foreign insurer or alien insurer, a copy of the report of last examination, if any, made of the insurer certified by the insurance supervisory official of the state of domicile of the foreign insurer or the state of entry into the United States of the alien insurer; (v) for a foreign insurer or alien insurer, a certificate of the insurance supervisory official of the state or country of domicile or state of entry into the United States of the insurer showing that the insurer is authorized to transact the kinds of insurance business proposed to be transacted in this State; (vi) for an alien insurer, a copy of the appointment and authority of its United States manager; (vii) a certificate evidencing a deposit in accordance with § 4-106 of this subtitle; and (viii) any other information and documents that the Commissioner considers necessary to protect policyholders or ensure compliance with this article.

Md. Code, Insurance § 4-109

(a) Within a reasonable time after the filing of a completed application for an initial certificate of authority, the Commissioner shall: (1) issue an appropriate certificate of authority; or (2) disapprove the application and state the grounds for disapproval. (b) On request of an insurer, the Commissioner may issue a certificate of authority limited to a particular type of insurance or insurance coverage within the scope of a kind of insurance.

Md. Code, Insurance § 4-110

A certificate of authority shall state the kind or combination of kinds of insurance business that the insurer is authorized to transact in the State.

Md. Code, Insurance § 4-111

(a) Except as otherwise provided in this section, a certificate of authority authorizes an insurer to engage in one kind or a combination of kinds of insurance business. (b) (1) Subject to paragraph (2) of this subsection, an insurer authorized to engage in the business of life insurance may also write annuity contracts but the insurer is not authorized to engage in any other kind of insurance business except health insurance. (2) The Commissioner shall continue to authorize an insurer authorized to engage in the business of life insurance to engage in other kinds of insurance business, in addition to annuities and health insurance, if the insurer: (i) was authorized to engage in one kind or a combination of kinds of insurance business in addition to life insurance, health insurance, and annuities immediately before December 31, 1963; and (ii) is otherwise qualified to engage in that kind or combination of kinds of insurance business. (c) A reciprocal insurer may not engage in the business of life insurance or health insurance except as supplementary coverage in policies of liability insurance.

Md. Code, Insurance § 4-112

(a) A certificate of authority expires on the first June 30 after its effective date unless it is renewed as provided in this section. (b) At least 2 months before a certificate of authority expires, the Commissioner shall mail to the holder of the certificate of authority, at the last known address of the holder, or by electronic means in accordance with § 2–116 of this article: (1) a renewal application form; and (2) a notice that states: (i) the date on which the current certificate of authority expires; (ii) the date by which the Commissioner must receive the renewal application for the renewal to be issued and mailed before the certificate of authority expires; and (iii) the amount of the renewal fee. (c) Before a certificate of authority expires, the holder of the certificate of authority may renew it for an additional 1-year term, if the holder: (1) otherwise is entitled to a certificate of authority; (2) files with the Commissioner a renewal application on the form that the Commissioner provides; and (3) pays to the Commissioner the appropriate renewal fee required by § 2-112 of this article. (d) (1) The Commissioner shall renew the certificate of authority of each holder who meets the requirements of this subtitle. (2) If a certificate holder pays the applicable renewal fee before the certificate of authority expires, the certificate of authority remains in effect until the Commissioner renews or refuses to renew the certificate of authority. (e) (1) An insurer shall mail, or send by electronic means in accordance with § 2–116 of this article, a renewal application and the applicable renewal fee on or before June 30. An insurer that fails to renew its certificate of authority on or before June 30 may forfeit: (i) $500 for each day from July 1 through July 10; (ii) $1,000 for each day from July 11 through July 31; and (iii) $5,000 for each day after July 31. (2) In addition to the provisions imposed under paragraph (1) of this subsection, an insurer that fails to renew its certificate of authority on or before June 30 in the previous year shall: (i) renew its certificate of authority on or before June 1 of the current year; and (ii) forfeit $3,000 if the insurer fails to renew its certificate of authority on or before June 30 in the current year. (3) In addition to the monetary penalties imposed under this subsection, on July 1 of each year, for each insurer that fails to file its renewal application and continuation fee on or before June 30, the Commissioner may: (i) order that the insurer cease and desist from engaging further from the writing of insurance in this State in accordance with § 4–114 of this subtitle; or (ii) issue an order to require the insurer to show cause why it should be allowed to continue to engage in the insurance business in the State. (f) In determining the amount of any financial penalty or forfeiture to be imposed under this section, the Commissioner: (1) shall consider the following factors: (i) the seriousness of the violation; (ii) the good faith of the violator; (iii) the violator’s history of previous violations; (iv) the deleterious effect of the violation on the public and the insurance industry; and (v) the assets of the violator; and (2) may determine the appropriate amount of the penalty or forfeiture.

Md. Code, Insurance § 4-113

(a) The Commissioner shall deny a certificate of authority to an applicant or refuse to renew, suspend, or revoke a certificate of authority if: (1) the action is required by any provision of this article; (2) the insurer no longer meets the requirements for the certificate of authority because of a deficiency in assets or any other reason; (3) the business of the insurer is fraudulently conducted; (4) the insurer is insolvent, or its assets are not sufficient for carrying on its business; (5) the insurer fails to pay taxes on premiums required under this article; (6) the insurer willfully fails to provide the Commissioner with required information about medical malpractice insurance issued by the insurer in this State or any other state; (7) the issuance or renewal of a certificate of authority is contrary to the public interest; (8) the Commissioner finds that the principal management personnel of the insurer is: (i) untrustworthy or not of good character; or (ii) so lacking in insurer managerial experience as to make the proposed operation hazardous to the insurance–buying public or to the insurer’s stockholders; or (9) the Commissioner has good reason to believe that the insurer is affiliated, directly or indirectly, through ownership, control, management, reinsurance transactions, or other insurance or business relations with a person whose business operations are or have been marked by the manipulation of assets, accounts, or reinsurance or by bad faith, to the detriment of insureds, stockholders, or creditors. (b) The Commissioner may deny a certificate of authority to an applicant or, subject to the hearing provisions of Title 2 of this article, refuse to renew, suspend, or revoke a certificate of authority if the applicant or holder of the certificate of authority: (1) violates any provision of this article other than one that provides for mandatory denial, refusal to renew, suspension, or revocation for its violation; (2) knowingly fails to comply with a regulation or order of the Commissioner; (3) is found by the Commissioner to be in unsound condition or in a condition that renders further transaction of insurance business hazardous to the insurer’s policyholders or the public; (4) is engaged in writing policies in a jurisdiction in which it operates on a premium basis that the Commissioner finds to be insufficient, insecure, or impracticable so as to endanger the solvency of the insurer; (5) refuses or delays payment of amounts due claimants without just cause; (6) refuses to be examined or to produce its accounts, records, or files for examination by the Commissioner when required; (7) refuses to provide additional information that the Commissioner considers advisable in considering an application for renewal of the certificate of authority; (8) fails to pay a final judgment against it in the State within 30 days after the judgment becomes final; (9) is affiliated with and under the same general management or interlocking directorate or ownership as another insurer that transacts direct insurance in the State without having a certificate of authority to do so, except as allowed to a surplus lines insurer under Title 3, Subtitle 3 of this article; (10) is found by the Commissioner to have participated, with or without the knowledge of an insurance producer, in selling motor vehicle insurance without an actual intent to sell the insurance, as evidenced by a persistent pattern of filing certificates of insurance together with or closely followed by cancellation notices for the insurance; (11) except as allowed under § 10–103(c) of this article, is found by the Commissioner to have knowingly participated with a person, acting as an insurance producer, that does not have an appointment from the insurer in accepting insurance contracts that the person has sold, solicited, or negotiated, if committed with sufficient frequency to indicate a general business practice; (12) has had a certificate of authority revoked or suspended by the insurance regulatory authority of another state; (13) has violated the provisions of Title 6.5 of the State Government Article; (14) fails to provide to the Commissioner or an insurance producer any information required by § 10–118 of this article regarding the termination of an appointment of the insurance producer; or (15) in providing information required by or provided pursuant to § 10–118 of this article regarding the termination of an appointment of an insurance producer, makes an inaccurate statement with actual malice. (c) (1) On refusal to renew, suspension, or revocation of an insurer’s certificate of authority, the Commissioner immediately shall notify: (i) the insurer; and (ii) each insurance producer of the insurer in the state of record in the office of the Commissioner. (2) The refusal to renew, revocation, or suspension of a certificate of authority automatically suspends or revokes the appointment of each insurance producer of the insurer in the State. (3) The Commissioner shall state in the notice to each insurance producer under paragraph (1) of this subsection that the appointment of the insurance producer has been suspended or revoked. (4) The Commissioner may publish notice of the revocation of a certificate of authority in a newspaper published in the State. (d) Instead of or in addition to suspending or revoking a certificate of authority, the Commissioner may: (1) impose on the holder a penalty of not less than $100 but not more than $125,000 for each violation of this article; and (2) require the holder to make restitution to any person who has suffered financial injury because of the violation of this article including requiring the holder to: (i) fulfill any obligation under the policies or contracts of the holder that the holder failed to fulfill in violation of this article; or (ii) pay a claim or an amount due under an insurance policy or contract not paid in violation of this article. (e) The Commissioner shall adopt regulations to: (1) establish standards for the imposition of a penalty under subsection (d) of this section; and (2) carry out the provisions of subsection (b)(11) of this section.

Md. Code, Insurance § 4-114

(a) Without notice and before hearing, the Commissioner may issue and have served on an insurer an order requiring the insurer immediately to cease and desist from writing insurance in the State if it appears to the Commissioner that: (1) the insurer is: (i) conducting its business and affairs in a manner that threatens to make it insolvent or that is hazardous to its policyholders, creditors, or the general public; or (ii) engaged in an act, practice, or transaction that constitutes grounds making the insurer subject to conservation or liquidation proceedings; and (2) irreparable loss and injury to the property and business of the insurer or the general public has occurred or may occur unless the Commissioner acts immediately. (b) (1) When an order is served on an insurer under subsection (a) of this section, the Commissioner shall issue and also serve on the insurer notice of a hearing to be held at a place and time not later than 5 days after the date of the order. (2) If the insurer waives the right to a hearing within 5 days after the date of the order, the hearing shall be held within 30 days after service of the order.

Md. Code, Insurance § 4-115

(a) (1) In this section the following words have the meanings indicated. (2) “Domestic reinsurer” means an authorized insurer that: (i) operates solely as a reinsurer, as defined in § 5–901 of this article; (ii) does not have any gross direct written premium; and (iii) is domiciled in the State. (3) “Financial guaranty insurance company” means an insurer that derives at least 90% of its gross written premium from the business of financial guaranty insurance and financial guaranty reinsurance. (4) “Financial guaranty reinsurance company” means an insurer that derives at least 90% of its gross written premium from the business of financial guaranty reinsurance. (b) (1) Except as provided in paragraph (2) of this subsection, a domestic insurer may not move its home or executive office out of the State without notice to and approval by the Commissioner. (2) (i) A financial guaranty reinsurance company or financial guaranty insurance company that became domiciled in the State on or before December 31, 1993, is not required to have an office in the State. (ii) A domestic reinsurer that became domiciled in the State on or before December 31, 1995, is not required to have an office in the State. (c) (1) A domestic insurer, including a reciprocal insurer, fraternal benefit society, or nonprofit health service plan, with its home or executive office in the State shall keep in the State: (i) its general ledger accounting records; and (ii) all of its assets except: 1. real property lawfully owned by the insurer and located outside of the State, personal property appurtenant to the real property, or mortgages on the real property; 2. property of the insurer that is customary and necessary to the operation of the insurer’s branch offices outside of the State; 3. securities deposited in a jurisdiction outside of the State as a condition of authority to transact business in that jurisdiction or securities deposited in connection with obtaining surety bonds; 4. securities held either by the insurer or in compliance with regulations adopted by the Commissioner; and 5. transactions or securities involved in transactions authorized by § 5–511(n) and (o) of this article or any other transactions or securities involved in transactions exempted by the Commissioner from this paragraph. (2) A financial guaranty reinsurance company or financial guaranty insurance company that became domiciled in the State on or before December 31, 1993, and that does not have its home or executive office in the State: (i) shall keep in the State its entire assets as required by paragraph (1)(ii) of this subsection; and (ii) may keep its general ledger accounting records outside the State if it makes those records available in the State to the Commissioner within 2 business days after being requested to do so by the Commissioner. (3) A domestic reinsurer that became domiciled in the State on or before December 31, 1995, and that does not have its home or executive office in the State: (i) shall keep in the State its entire assets as required by paragraph (1)(ii) of this subsection; and (ii) may keep its general ledger accounting records outside the State if it makes those records available in the State to the Commissioner within 2 business days after being requested to do so by the Commissioner. (d) This section does not prohibit the holding of funds or transmission of securities outside of the State to: (1) secure or record title to the securities; or (2) sell, lend, buy, redeem, or exchange the securities or alter the provisions of the securities.

Md. Code, Insurance § 4-116

(a) (1) On or before March 1 of each year, unless the Commissioner extends the time for good cause, each authorized insurer shall file with the Commissioner a complete statement of its financial condition, transactions, and affairs for the immediately preceding calendar year. (2) The annual statement shall: (i) be in the form and have the content approved for current use by the National Association of Insurance Commissioners or its successor organization; and (ii) contain any additional information that the Commissioner requires. (3) Unless the Commissioner requires otherwise, the statement of an alien insurer shall relate only to its transactions and affairs in the United States. (4) Unless the Commissioner extends the time for filing, an authorized insurer that fails to file an annual statement on or before March 10 shall pay a penalty of: (i) $100 for each day from March 1 to March 10, both inclusive; and (ii) $150 for each day from March 11 to the day before the Commissioner receives the statement, both inclusive. (b) At any time, the Commissioner may require an authorized insurer to file an interim statement containing the information that the Commissioner considers necessary. (c) (1) Except as provided in subsection (d) of this section, on or before June 1 of each year, an authorized insurer shall file with the Commissioner an audited financial report for the immediately preceding calendar year. (2) The authorized insurer shall have the report prepared by an independent certified public accountant. (3) The Commissioner may: (i) set requirements for the form and content of the report; and (ii) for good cause, extend the time for filing the report. (4) Unless the Commissioner extends the time for filing, an authorized insurer that fails to file an audited financial report on or before June 10 shall pay a penalty of: (i) $100 for each day from June 1 to June 10, both inclusive; and (ii) $150 for each day from June 11 to the day before the Commissioner receives the report, both inclusive. (d) With 90 days’ advance notice, the Commissioner may require an authorized insurer to file an audited financial report earlier than the date specified in subsection (c) of this section.

Md. Code, Insurance § 4-117

(a) At the time of payment, if the payment has been specifically authorized by the claimant’s attorney, an insurer shall provide written notice to a third party claimant of payment of $2,000 or more in settlement of a third party liability claim for bodily injury if: (1) the claimant is an individual; and (2) the payment is delivered to the claimant’s attorney by check, draft, or other means. (b) The notice required by subsection (a) of this section shall be sent by regular mail no more than 5 working days after payment is delivered under subsection (a)(2) of this section to the claimant at the last known address of the claimant. (c) The insurer may provide notice to the claimant by a copy of the letter of transmittal to the claimant’s attorney. (d) This section may not be construed to create: (1) a cause of action for any person against an insurer based on the insurer’s failure to provide the notice required by this section; or (2) a defense for any party against a cause of action based on the insurer’s failure to provide the notice required by this section.

Md. Code, Insurance § 4-118

(a) The Commissioner may not recognize any person as a qualified independent certified public accountant unless the person: (1) is in good standing: (i) with the Maryland State Board of Public Accountancy; and (ii) with the appropriate state board of accountancy of any other state in which the accountant is licensed to practice; or (2) in the case of a Canadian or British accountant, is a chartered accountant. (b) Except as otherwise provided in this section, an independent certified public accountant shall be recognized as qualified as long as the accountant conforms to: (1) for any certified public accountant not licensed in this State, the standards of the accountancy profession, as contained in the Code of Professional Ethics of the American Institute of Certified Public Accountants; or (2) (i) Title 2 of the Business Occupations and Professions Article; and (ii) the regulations and rules of professional conduct established by the Maryland State Board of Public Accountancy. (c) (1) (i) A partner in an accounting firm responsible for preparing an audited financial report under § 4–116 of this subtitle for an insurer may not act in that capacity for more than 5 consecutive years for the same insurer. (ii) If a partner in an accounting firm responsible for preparing an audited financial report under § 4–116 of this subtitle for an insurer exceeds 5 consecutive years in that capacity, the partner shall be disqualified from acting in the same or similar capacity for that insurer or its insurance subsidiaries or affiliates for a period of not less than 5 consecutive years. (2) (i) An insurer may apply to the Commissioner for an exception from the prohibition of paragraph (1) of this subsection on the basis of unusual circumstances. (ii) In determining whether unusual circumstances exist that would justify the granting of an exception, the Commissioner may consider: 1. the number of partners in the accounting firm currently used by the insurer, the expertise of the partners in that firm, and the number of insurance clients of that firm; 2. the premium volume of the insurer; and 3. the number of jurisdictions in which the insurer transacts business. (d) The Commissioner may not recognize as a qualified independent certified public accountant, or accept any audited financial report prepared in whole or in part by, any individual who: (1) has been convicted of fraud, bribery, a violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961-1968, or any dishonest conduct or practices under federal or State law; (2) has violated the insurance laws of this State with respect to any audited financial reports previously submitted by that individual; (3) has violated any provision of Title 2 of the Business Occupations and Professions Article or any regulation or rule of professional conduct established by the State Board of Public Accountancy; or (4) has demonstrated a pattern or practice of failing to detect or disclose material information in any audited financial reports previously submitted by that individual. (e) (1) Subject to §§ 2-210 through 2-215 of this article, the Commissioner may hold a hearing to determine whether a certified public accountant is qualified. (2) After considering the evidence presented at the hearing, the Commissioner shall rule on whether the accountant is qualified for purposes of expressing an opinion on the financial statements in the audited financial report required under § 4-116 of this subtitle. (3) If the Commissioner finds that the accountant is not qualified, the Commissioner shall require the insurer to replace the accountant with another who is qualified as provided under this section.

Md. Code, Insurance § 4-201

(a) In this section, “industrial insured” means an insured that: (1) procures the insurance of a risk by the services of a full-time employee acting as an insurance manager or buyer or a regularly and continuously retained qualified insurance consultant; (2) has aggregate annual premiums for insurance on all risks that total at least $100,000; or (3) has at least 25 full-time employees. (b) This subtitle does not apply to: (1) transactions in the State that involve, and are subsequent to the issuance of, a policy that was lawfully solicited, written, and delivered outside of the State that covers only a subject of insurance not resident, located, or expressly to be performed in the State at the time of issuance of the policy; (2) an individual life insurance policy or individual health insurance policy in force on July 1, 1968; (3) reinsurance of the liability of an authorized insurer; (4) insurance against perils of navigation, transit, or transportation on hulls, freights, or disbursements, or other shipowner interest, on goods, wares, merchandise, and all other personal property and interests in personal property in the course of exportation from or importation into a country, or transportation coastwise, including transportation by land or water from point of origin to final destination and including war risks, and on marine builder's risks, dry docks, and marine railways, including insurance of ship repairer's liability, and protection and indemnity insurance, except for insurance covering: (i) bridges and tunnels; (ii) pleasure craft that are under 60 feet in length and are owned and used for pleasure and not for business, hire, or other commercial use; (iii) fishing vessels under 50 gross tons that are not part of a fleet of three or more vessels; or (iv) charter or head boats under 50 gross tons that are not part of a fleet of three or more vessels; (5) aircraft insurance; (6) insurance on property or operations of railroads engaged in interstate commerce; (7) surplus lines insurance effected in accordance with Title 3, Subtitle 3 of this article; (8) insurance against legal liability arising out of the ownership, operation, or maintenance of property with a permanent situs outside of the State; or (9) insurance against loss of or damage to property with a permanent situs outside of the State. (c) Except for the premium tax requirement of § 4-209 of this subtitle and the reporting requirement of § 4-210 of this subtitle, this subtitle does not apply to an insurer or underwriter issuing an insurance contract to an industrial insured.

Md. Code, Insurance § 4-202

(a) The General Assembly finds that: (1) many residents of the State hold policies issued by insurers and other persons not authorized to do insurance business in the State; (2) these residents face the often insurmountable obstacle of asserting their legal rights under those policies in forums that are foreign to them and under laws and rules of practice that are unfamiliar to them; and (3) protection from the acts of insurers and other persons not authorized to do insurance business in the State can be achieved by: (i) maintaining fair and honest insurance markets; (ii) protecting the premium tax revenues of the State; (iii) protecting authorized insurers, which are subject to strict regulation, from unfair competition by unauthorized persons and unauthorized insurers; and (iv) protecting against evasion of the insurance regulatory laws of the State. (b) (1) The General Assembly intends to subject certain insurers and other persons to the jurisdiction of the Commissioner, in proceedings before the Commissioner, and to the courts of the State in suits by or for the State and insureds or beneficiaries under insurance contracts. (2) To carry out this intent, the General Assembly provides for substituted service of process on certain insurers and other persons in any proceeding in a court and substituted service of any notice, order, pleading, or process on certain insurers and other persons in any proceeding before the Commissioner to enforce or effect full compliance with the insurance and tax laws of the State. (c) In carrying out the intent of this subtitle, the General Assembly declares that it is exercising: (1) its power to protect the residents of the State; (2) its power to define what constitutes doing an insurance business in the State; and (3) its powers and privileges under the McCarran-Ferguson Act.

Md. Code, Insurance § 4-203

(a) This section does not apply to: (1) acceptance of service of process; (2) surplus lines insurance; (3) a transaction for which a certificate of authority is not required under § 4-101(b) of this title; (4) reinsurance, as authorized under Title 5, Subtitle 9 of this article; (5) an adjuster while providing services with respect to a claim under a policy lawfully solicited, issued, and delivered outside of the State; or (6) the professional services of an attorney at law. (b) With respect to a subject of insurance resident, located, or to be performed in the State, a person may not in the State directly or indirectly act as an insurance producer for, or otherwise represent or help on behalf of another, an unauthorized insurer to: (1) solicit, negotiate, or effect insurance or an annuity contract; (2) inspect risks; (3) fix rates; (4) investigate or adjust losses; (5) collect premiums; or (6) transact insurance business in any other manner.

Md. Code, Insurance § 4-204

(a) (1) A person may not accept for publication or printing in a newspaper, magazine, or other periodical, or for broadcast on radio or television in the State, an advertisement or other notice that directly or indirectly solicits business for or sets forth the advantages of doing business with an insurer, insurance producer, or other person, unless the person that will publish or broadcast the advertisement or notice has a certificate issued by the Commissioner stating that the insurer, insurance producer, or other person named in the certificate is authorized to transact insurance business in the State. (2) On application of any person, the Commissioner shall issue the certificate without charge. (b) A person may not publish or print in a newspaper, magazine, periodical, circular letter, pamphlet, or in any other manner, or broadcast by radio or television in the State, an advertisement or other notice that directly or indirectly solicits business for or sets forth the advantages of doing business with an insurer, insurance producer, or other person that is not authorized to transact insurance business in the State. (c) A manufacturer, jobber, wholesaler, or retailer may not distribute or cause to be distributed matchbooks or other advertising matter, except newspapers and magazines of general circulation, that directly or indirectly solicits business for or sets forth the advantages of doing business with an insurer, insurance producer, or other person that is not authorized to transact insurance business in the State.

Md. Code, Insurance § 4-205

(a) This section does not apply to: (1) the lawful transaction of surplus lines insurance; (2) the lawful transaction of reinsurance by insurers; (3) transactions in the State that involve, and are subsequent to the issuance of, a policy that was lawfully solicited, written, and delivered outside of the State covering only a subject of insurance not resident, located, or expressly to be performed in the State at the time of issuance of the policy; (4) transactions that involve insurance contracts that are independently procured through negotiations occurring entirely outside of the State and that are reported and on which the premium tax is paid in accordance with §§ 4–210 and 4–211 of this subtitle; (5) an attorney while acting in the ordinary relation of attorney and client in the adjustment of claims or losses; (6) unless otherwise determined by the Commissioner, transactions in the State that involve group or blanket insurance or group annuities if the master policy of the group was lawfully issued and delivered in another state in which the person was authorized to engage in insurance business; or (7) a health care practitioner or set of health care practitioners, as defined in § 15–113 of this article, that accepts capitated payments in accordance with § 15–2102 of this article, but performs no other acts considered acts of an insurance business. (b) An insurer or other person may not, directly or indirectly, do any of the acts of an insurance business set forth in subsection (c) of this section, except as provided by and in accordance with the specific authorization of statute. (c) Any of the following acts in the State, effected by mail or otherwise, is considered to be doing an insurance business in the State: (1) making or proposing to make, as an insurer, an insurance contract; (2) making or proposing to make, as guarantor or surety insurer, a contract of guaranty or suretyship as a vocation and not merely incidental to another legitimate business or activity of the guarantor or surety insurer; (3) taking or receiving an application for insurance; (4) receiving or collecting premiums, commissions, membership fees, assessments, dues, or other consideration for insurance; (5) issuing or delivering an insurance contract to a resident of the State or a person authorized to do business in the State; (6) except as provided in subsection (d) of this section, with respect to a subject of insurance resident, located, or to be performed in the State, directly or indirectly acting as an insurance producer for, or otherwise representing or helping on behalf of another, an insurer or other person to: (i) solicit, negotiate, procure, or effect insurance or the renewal of insurance; (ii) disseminate information about coverage or rates; (iii) forward an application; (iv) deliver a policy or insurance contract; (v) inspect risks; (vi) fix rates; (vii) investigate or adjust claims or losses; (viii) transact matters arising out of an insurance contract after the insurance contract becomes effective; or (ix) in any other manner represent or help an insurer or other person to transact insurance business; (7) doing any kind of insurance business specifically recognized as doing an insurance business under statutes relating to insurance; (8) doing or proposing to do any insurance business that is substantially equivalent to any act listed in this subsection in a manner designed to evade the statutes relating to insurance; or (9) as an insurer transacting any other business in the State. (d) Subsection (c)(6) of this section does not prohibit a full-time salaried employee of a corporate insured from acting as an insurance manager or buyer in placing insurance for the corporate insured. (e) For purposes of this section, the venue of an act effected by mail is at the point where the matter transmitted by mail is delivered and takes effect.

Md. Code, Insurance § 4-206

(a) An unauthorized foreign insurer or unauthorized alien insurer is deemed to have appointed the Commissioner to be the attorney of the unauthorized insurer for purposes of service of process in a proceeding instituted by or for an insured or beneficiary arising out of an insurance contract and to have agreed that service on the Commissioner has the same legal effect as personal service in the State on the unauthorized insurer, if the unauthorized insurer in the State, by mail or otherwise: (1) issues or delivers insurance contracts to residents of the State or corporations authorized to do business in the State; (2) solicits applications for insurance contracts; (3) collects premiums, membership fees, assessments, or other considerations for insurance contracts; or (4) transacts any other insurance business. (b) (1) Service of process on the Commissioner under this subsection shall be made by: (i) delivering to the Commissioner or an individual in apparent charge of the office of the Commissioner two copies of the process; and (ii) paying to the Commissioner a service of process fee of $15. (2) Immediately after receipt of process, the Commissioner shall send one copy of the process by certified mail, return receipt requested, bearing a postmark from the United States Postal Service, to the unauthorized insurer at its last known principal place of business. (3) Service of process under this subsection is sufficient if: (i) within 10 days after delivering copies of the process to the Commissioner under paragraph (1) of this subsection, the plaintiff or plaintiff's attorney sends notice of the service and a copy of the process by certified mail, return receipt requested, bearing a postmark from the United States Postal Service, to the unauthorized insurer at its last known principal place of business; and (ii) on or before the date that the unauthorized insurer is required to appear or within any further time that the court allows, the plaintiff or plaintiff's attorney files with the clerk of the court in which the action is pending: 1. the unauthorized insurer's receipt, or the receipt issued by the United States Postal Service, showing the name of the sender of the letter and the name and address of the addressee; and 2. an affidavit of the plaintiff or plaintiff's attorney showing compliance with paragraph (1) of this subsection. (4) (i) The service of process fee shall be taxed in the costs of the proceeding. (ii) A court may award reimbursement of the service of process fee to a prevailing plaintiff in any proceeding against an unauthorized insurer. (iii) The Commissioner: 1. shall account quarterly to the Comptroller for fees collected under this subsection; and 2. after deducting expenses for mailing the process under paragraph (2) of this subsection, shall pay the fees on accounting to the State Treasurer, for the use of the State. (5) The Commissioner shall keep a record of all process served on the Commissioner under this subsection. (c) As an alternative to service of process under subsection (b) of this section, service of process is valid if: (1) service of process is made on any person in the State that, on behalf of an unauthorized foreign insurer or unauthorized alien insurer, is doing an act of insurance business listed in § 4-205(c) of this subtitle; (2) within 10 days after service of process under item (1) of this subsection, the plaintiff or plaintiff's attorney sends a copy of the process by certified mail, return receipt requested, bearing a postmark from the United States Postal Service, to the unauthorized insurer at its last known principal place of business; and (3) on or before the date that the unauthorized insurer is required to appear or within any further time that the court allows, the plaintiff or plaintiff's attorney files with the clerk of the court in which the action is pending: (i) the unauthorized insurer's receipt, or the receipt issued by the United States Postal Service, showing the name of the sender of the letter and the name and address of the addressee; and (ii) an affidavit of the plaintiff or plaintiff's attorney showing compliance with item (1) of this subsection. (d) A judgment by default may not be entered until the expiration of 45 days after the date of filing of the affidavit of compliance. (e) This subtitle does not limit the right to serve any process, notice, or demand on an insurer or another person in any other manner authorized by law.

Md. Code, Insurance § 4-207

(a) (1) An unauthorized insurer or person that does an act of insurance business listed in § 4-205(c) of this subtitle is deemed to have appointed irrevocably the Secretary of State to be the attorney of the unauthorized insurer or person in a proceeding in a court by the Commissioner or the State, and on whom may be served any notice, order, pleading, or process in a proceeding before the Commissioner, and which proceeding arises from the unauthorized insurer or person doing an insurance business in the State. (2) An unauthorized insurer or person that does an act of insurance business listed in § 4-205(c) of this subtitle is deemed to have agreed that service on the Secretary of State under this section has the same legal effect as personal service in the State on the unauthorized insurer or person. (3) The deemed appointment of the Secretary of State binds the unauthorized insurer or person and any executor, administrator, personal representative, or successor in interest if a corporation, of the unauthorized insurer or person. (b) (1) Service of process on the Secretary of State in a court proceeding or administrative proceeding under this section shall be made by delivering to the Secretary of State or an individual in apparent charge of the office of the Secretary of State two copies of the process in a court proceeding or the notice, order, pleading, or process in an administrative proceeding. (2) Immediately after receipt of process in a court proceeding or the notice, order, pleading, or process in an administrative proceeding, the Secretary of State shall mail one copy of the process or notice, order, pleading, or process to the defendant in the court proceeding, or to the person to whom the notice, order, pleading, or process is addressed or directed in the administrative proceeding, at its last known principal place of business. (3) Service of process under this section is sufficient if: (i) within 10 days after service on the Secretary of State under paragraph (1) of this subsection, the plaintiff or plaintiff's attorney in a court proceeding or the Commissioner in an administrative proceeding sends notice of the service and a copy of the court process, or the notice, order, pleading, or process in the administrative proceeding, by certified mail, return receipt requested, bearing a postmark from the United States Postal Service, to the defendant in a court proceeding or the person to whom the notice, order, pleading, or process is addressed or directed in the administrative proceeding at its last known principal place of business; and (ii) on or before the date that the defendant is required to appear or respond in a court or administrative proceeding or within any further time that the court or Commissioner allows, the plaintiff or plaintiff's attorney in a court proceeding or the Commissioner in an administrative proceeding files with the clerk of the court in which the court proceeding is pending or with the Commissioner in an administrative proceeding: 1. the defendant's receipt, or the receipt issued by the United States Postal Service, showing the name of the sender of the letter and the name and address of the addressee; and 2. an affidavit of the plaintiff or plaintiff's attorney in a court proceeding, or the Commissioner in an administrative proceeding, showing compliance with paragraph (1) of this subsection. (4) A certificate by the Secretary of State that shows service in accordance with paragraph (1) of this subsection and is attached to the original or third copy of the process is sufficient evidence of service. (5) Service on the Secretary of State under this section is deemed service on the principal. (6) The Secretary of State shall keep a record of all process served on the Secretary of State under this section that shows the day and time of service. (c) A judgment or determination, by default, in any court or administrative proceeding in which court process or a notice, order, pleading, or process is served under this section may not be entered until the expiration of 45 days after the date of filing of the affidavit of compliance. (d) This section does not limit the right to serve any process, notice, order, pleading, or demand on an insurer or another person in any other manner authorized by law. (e) On request of the Commissioner, the Attorney General may proceed in a court of this State or another state or in a federal court or agency to enforce an order or decision in a court proceeding or in an administrative proceeding before the Commissioner.

Md. Code, Insurance § 4-208

(a) This section does not apply to: (1) lawfully procured surplus lines insurance; or (2) insurance contracts that are independently procured through negotiations occurring entirely outside of the State and that are reported and on which the premium tax is paid under §§ 4-210 and 4-211 of this subtitle. (b) An unauthorized insurer may not enforce an insurance contract effective in the State and entered into by the unauthorized insurer.

Md. Code, Insurance § 4-209

(a) This section does not apply to: (1) premiums on lawfully procured surplus lines insurance; (2) premiums on independently procured insurance on which a tax has been paid under § 4–211 of this subtitle; or (3) wet marine and transportation insurance. (b) (1) If an unauthorized insurer effects, continues, or renews insurance on a subject resident, located, or to be performed in the State, the unauthorized insurer shall pay to the Commissioner, before March 1 of the next calendar year, a premium receipts tax of 3% of gross premiums charged for the insurance. (2) For policies effective before July 21, 2011: (i) if the policy covers property, risks, or exposures located or to be performed entirely in the State, the premium receipts tax shall be computed on the entire premium at the rate specified in paragraph (1) of this subsection; and (ii) if the policy covers property, risks, or exposures located or to be performed both in and outside the State, the premium receipts tax shall be computed at the rate specified in paragraph (1) of this subsection only on that portion of the premium that is properly allocable to the risks located in the State. (3) For policies effective on or after July 21, 2011, if the State is the insured’s home state, the premium receipts tax shall be computed on the entire premium at the rate specified in paragraph (1) of this subsection. (4) Insurance that an unauthorized insurer effects, continues, or renews on a subject resident, located, or to be performed in the State that is procured through negotiations or an application wholly or partly occurring or made in or from within or outside of the State, or for which premiums wholly or partly are remitted directly or indirectly from in or outside of the State, is deemed to be insurance procured, continued, or renewed in the State. (c) The premium receipts tax under this section is instead of all other State taxes. (d) If an unauthorized insurer defaults on the payment of the tax under this section, the insured shall pay the tax. (e) If the tax is not timely paid under subsection (b) of this section, the amount of the tax due shall be increased by a penalty of: (1) 25% of the tax due; and (2) an amount computed at the rate of 1% per month or any part of a month after the date the payment was due to the date the payment is made.

Md. Code, Insurance § 4-210

(a) In this section, “insured” includes an industrial insured who procures insurance of a risk through a full–time employee acting as a risk manager. (b) (1) Each insured that procures or causes to be procured insurance with an unauthorized insurer, or an insured or self–insured that procures or continues excess loss, catastrophe, or other insurance with an unauthorized insurer, on a subject of insurance resident, located, or to be performed in the State other than surplus lines insurance, shall file with the Commissioner a report under this section. (2) Insurance with an unauthorized insurer on a subject of insurance resident, located, or to be performed in the State that is procured through negotiations or an application wholly or partly occurring or made in or from within or outside of the State, or for which the premiums wholly or partly are remitted directly or indirectly from in or outside of the State, is deemed to be insurance procured in the State. (c) For policies effective before July 21, 2011, a report under this section shall be filed within 60 days after the date that the insurance was procured. (d) For policies effective on or after July 21, 2011, on or before March 15 and September 15 of each year, or at another interval that the Commissioner directs, each insured shall: (1) file with the Commissioner a report, on a form the Commissioner prescribes, on business subject to tax during the preceding half calendar year or other interval that the Commissioner directs; and (2) pay to the Commissioner the total amount of tax stated in the report. (e) By regulation, the Commissioner shall determine the required content and filing deadlines of the reports.

Md. Code, Insurance § 4-211

(a) This section does not apply to wet marine and transportation insurance. (b) (1) If an insured procures, continues, or renews insurance from an unauthorized insurer that is subject to a report under § 4–210 of this subtitle, a premium receipts tax of 3% of the gross premiums charged for the insurance is levied on the obligation, chose in action, or right represented by the premium charged for the insurance. (2) If an insurance contract subject to the tax is canceled and rewritten, the additional premium, for purposes of the premium receipts tax, is the premium in excess of the unearned premium of the canceled insurance contract. (c) If the insured fails to withhold from the premium the amount of the tax levied under this section, the insured is liable for the amount of the tax imposed under subsection (b) of this section and shall pay the tax to the Commissioner. (d) If the tax imposed under subsection (b) of this section is not timely paid, the amount of the tax due shall be increased by a penalty of: (1) 25% of the tax due; and (2) an amount computed at the rate of 1% per month or part of a month after the date the payment is due until the date the payment is made. (e) If the tax is not timely paid under this section, on request of the Commissioner, the Attorney General shall proceed in a court of this State or another state or in a federal court or agency to recover the tax.

Md. Code, Insurance § 4-211.1

§4–211.1. (a) (1) In this section the following words have the meanings indicated. (2) “Act” has the meaning stated in § 3–301 of this article. (3) “Home state” has the meaning stated in § 3–301 of this article. (4) “Nonadmitted insurance” has the meaning stated in § 3–301 of this article. (b) For policies effective on or after July 21, 2011, the placement of nonadmitted insurance is subject to the statutory and regulatory requirements solely of the insured’s home state. (c) The premiums charged for unauthorized insurance are subject to a premium receipts tax in the State on all gross premiums, less any returned premiums, charged for nonadmitted insurance as specified in §§ 4–209 and 4–211 of this subtitle. (d) For policies effective before July 21, 2011: (1) if the policy covers property, risks, or exposures located or to be performed entirely in the State, the premium receipts tax shall be computed on the entire premium at the rate specified in subsection (c) of this section; and (2) if the policy covers property, risks, or exposures located or to be performed both in and outside the State, the premium receipts tax shall be computed at the rate specified in subsection (c) of this section only on that portion of the premium that is properly allocable to the risks located in the State. (e) For policies effective on or after July 21, 2011, if the State is the insured’s home state, the premium receipts tax shall be computed on the entire premium at the rate specified in subsection (c) of this section. (f) For policies effective on or after July 21, 2011, only the home state of an insured may receive premium receipts tax payments and reports for nonadmitted insurance. (g) For policies effective on or after July 21, 2011, the regulation of nonadmitted insurance is subject to the statutory and regulatory requirements solely of the home state of the insured. (h) The Commissioner shall cooperate with other states to adopt and implement uniform requirements for nonadmitted insurance in compliance with the Act.

Md. Code, Insurance § 4-212

An unauthorized insurer or person that violates this subtitle is subject to a civil penalty of not less than $100 but not exceeding $125,000 for each violation.

Md. Code, Insurance § 4-301

(a) In this subtitle the following words have the meanings indicated. (b) “Adjusted RBC report” means an RBC report that has been adjusted by the Commissioner in accordance with § 4–303(b) of this subtitle. (c) “Corrective order” means an order issued by the Commissioner that specifies corrective actions that the Commissioner has determined are required. (d) (1) “Domestic insurer” means an insurer: (i) as defined in subsection (h) of this section; and (ii) that is formed under the laws of this State. (2) “Domestic insurer” does not include the Maryland Automobile Insurance Fund. (e) “Filing date” means March 1 of any given year. (f) “Foreign insurer” means an insurer: (1) as defined in subsection (h) of this section; and (2) that is formed under the laws of a jurisdiction other than this State. (f–1) “Fraternal benefit society” means a person authorized to transact insurance business in the State under Title 8, Subtitle 4 of this article. (g) (1) “Health insurer” means an insurer that: (i) is authorized to write health insurance in the State; and (ii) receives the majority of its premium from the sale of health insurance. (2) “Health insurer” includes: (i) a health maintenance organization operating under a certificate of authority issued by the Commissioner under Title 19, Subtitle 7 of the Health – General Article; (ii) a nonprofit health service plan operating under Title 14, Subtitle 1 of this article; (iii) a dental plan operating under Title 14, Subtitle 4 of this article; and (iv) a provider–sponsored organization operating under Title 19, Subtitle 7A of the Health – General Article. (3) “Health insurer” does not include a managed care organization operating under Title 15, Subtitle 1 of the Health – General Article. (h) (1) “Insurer” means an insurer or other entity authorized to engage in the insurance business in the State under a certificate of authority issued by the Commissioner. (2) “Insurer” includes: (i) a health maintenance organization operating under a certificate of authority issued by the Commissioner under Title 19, Subtitle 7 of the Health – General Article; (ii) a nonprofit health service plan operating under Title 14, Subtitle 1 of this article; (iii) a dental plan operating under Title 14, Subtitle 4 of this article; and (iv) a provider–sponsored organization operating under Title 19, Subtitle 7A of the Health – General Article. (3) “Insurer” does not include: (i) monoline: 1. mortgage guaranty insurers; 2. financial guaranty insurers; or 3. title insurers; or (ii) managed care organizations operating under Title 15, Subtitle 1 of the Health – General Article. (i) “Life insurer” means an insurer that: (1) is authorized to write life insurance in the State; and (2) receives the majority of its premium from the sale of life insurance. (j) “NAIC” means the National Association of Insurance Commissioners. (k) “Negative trend” means, with respect to a life insurer, health insurer, or fraternal benefit society, negative trend over a period of time, as determined in accordance with the “trend test calculation” included in the RBC instructions. (l) (1) “Property and casualty insurer” means an insurer that: (i) is authorized to write property insurance or casualty insurance in the State; and (ii) receives the majority of its premium from the sale of property insurance or casualty insurance. (2) “Property and casualty insurer” does not include: (i) a health maintenance organization operating under a certificate of authority issued by the Commissioner under Title 19, Subtitle 7 of the Health – General Article; (ii) a nonprofit health service plan operating under Title 14, Subtitle 1 of this article; (iii) a dental plan operating under Title 14, Subtitle 4 of this article; (iv) a provider–sponsored organization operating under Title 19, Subtitle 7A of the Health – General Article; or (v) a managed care organization operating under Title 15, Subtitle 1 of the Health – General Article. (m) “RBC instructions” means the risk based capital instructions developed and adopted by the NAIC. (n) “RBC level” means an insurer’s company action level RBC, regulatory action level RBC, authorized control level RBC, or mandatory control level RBC if: (1) “company action level RBC” means the product of 2.0 and the authorized control level RBC; (2) “regulatory action level RBC” means the product of 1.5 and the authorized control level RBC; (3) “authorized control level RBC” means the number determined under the risk based capital formula in accordance with the RBC instructions; or (4) “mandatory control level RBC” means the product of .70 and the authorized control level RBC. (o) “RBC plan” means a comprehensive financial plan that contains the elements specified in § 4–305(b) of this subtitle. (p) “RBC report” means a report prepared by a domestic insurer and submitted to the Commissioner that details the domestic insurer’s RBC levels as of the end of the immediately preceding calendar year. (q) “Revised RBC plan” means an RBC plan that has been: (1) rejected by the Commissioner; and (2) subsequently revised by the insurer, with or without the Commissioner’s recommendation. (r) “Total adjusted capital” means the sum of: (1) an insurer’s statutory capital and surplus as determined in accordance with the statutory accounting principles applicable to the annual financial statements required to be filed under State law and regulations; and (2) any other items provided for in the RBC instructions.

Md. Code, Insurance § 4-302

It is the public policy of the State that, in order to safeguard the solvency of the insurance business in the State: (1) an insurer should maintain an amount of capital in excess of the minimum RBC levels derived from the risk based capital requirements contained in this subtitle and the attendant formulas, schedules, and instructions; and (2) additional capital is used and useful in the insurance business and helps to secure an insurer against various risks inherent in, or affecting, the insurance business and not accounted for or only partially measured by the risk based capital requirements contained in this subtitle.

Md. Code, Insurance § 4-303

(a) (1) (i) On or before the filing date, each domestic insurer shall prepare and submit to the Commissioner a report of its RBC levels as of the end of the immediately preceding calendar year. (ii) The RBC report shall be in the form and shall contain the information required by the RBC instructions. (2) In addition to the requirements of paragraph (1) of this subsection, each domestic insurer shall file its RBC report: (i) with the NAIC in accordance with the RBC instructions; and (ii) on written request, with the insurance commissioner of any state in which the insurer is authorized to do business, on or before the later of: 1. 15 days after receipt of the written request to file its RBC report with that state; or 2. the filing date. (b) If a domestic insurer files an RBC report that, in the judgment of the Commissioner, is inaccurate, the Commissioner shall: (1) adjust the RBC report to correct the inaccuracy; and (2) notify the insurer of the adjustment, including a statement of the reason for the adjustment.

Md. Code, Insurance § 4-304

(a) (1) A life insurer’s or fraternal benefit society’s risk based capital shall be determined in accordance with the formula set forth in the RBC instructions. (2) By applying the factors in the manner set forth in the RBC instructions, the formula shall take into account and may adjust for the covariance between: (i) the risk with respect to the life insurer’s or fraternal benefit society’s assets; (ii) the risk of adverse insurance experience with respect to the life insurer’s or fraternal benefit society’s liabilities and obligations; (iii) the interest rate risk with respect to the life insurer’s or fraternal benefit society’s business; and (iv) all other business risks and other relevant risks as set forth in the RBC instructions. (b) (1) Except as provided in subsection (a) of this section, an insurer’s risk based capital shall be determined in accordance with the formula set forth in the RBC instructions. (2) By applying the factors in the manner set forth in the RBC instructions, the formula shall take into account and may adjust for the covariance between: (i) asset risk; (ii) credit risk; (iii) underwriting risk; and (iv) all other business risks and other relevant risks as set forth in the RBC instructions.

Md. Code, Insurance § 4-305

(a) A company action level event occurs: (1) when an insurer files an RBC report that indicates that: (i) the insurer has total adjusted capital that is: 1. greater than or equal to its regulatory action level RBC; and 2. less than its company action level RBC; (ii) in the case of a life insurer or fraternal benefit society, the life insurer or fraternal benefit society has total adjusted capital that: 1. is greater than or equal to its company action level RBC; 2. is less than the product of its authorized control level RBC and 3.0; and 3. has a negative trend; (iii) in the case of a property and casualty insurer, the property and casualty insurer has total adjusted capital that: 1. is greater than or equal to its company action level RBC; 2. is less than the product of its authorized control level RBC and 3.0; and 3. triggers the trend test calculation included in the property and casualty RBC instructions; or (iv) in the case of a health insurer, the health insurer has total adjusted capital that: 1. is greater than or equal to its company action level RBC; 2. is less than the product of its authorized control level RBC and 3.0; and 3. triggers the trend test calculation included in the health RBC instructions; (2) when the Commissioner notifies an insurer of an adjusted RBC report that indicates an event under item (1) of this subsection; or (3) if an insurer requests a hearing to challenge an adjusted RBC report that indicates an event under item (1) of this subsection, when the Commissioner notifies the insurer that the Commissioner, after a hearing, has rejected the insurer’s challenge. (b) In the event of a company action level event, the insurer shall prepare and submit to the Commissioner an RBC plan that shall: (1) identify the conditions that contribute to the company action level event; (2) contain proposals of corrective actions that the insurer intends to take and that would be expected to result in the elimination of the company action level event; (3) provide projections of the insurer’s financial results in the current year and at least the 4 succeeding years that: (i) project financial results: 1. in the absence of proposed corrective actions; and 2. that give effect to the proposed corrective actions; (ii) include projections of statutory operating income, net income, capital, and surplus; and (iii) for both new and renewal business, include separate projections for each major line of business and separately identify each significant income, expense, and benefit component; (4) identify the key assumptions that impact the insurer’s projections and the sensitivity of the projections to the assumptions; and (5) identify the quality of and the problems associated with the insurer’s business, including its assets, anticipated business growth and associated surplus strain, extraordinary exposure to risk, mix of business, and use of reinsurance, as appropriate. (c) The insurer shall submit the RBC plan to the Commissioner: (1) within 45 days after the date of the company action level event; or (2) if the insurer requests a hearing to challenge an adjusted RBC report, within 45 days after notification to the insurer that the Commissioner, after a hearing, has rejected the insurer’s challenge. (d) (1) Within 60 days after an insurer submits an RBC plan to the Commissioner, the Commissioner shall notify the insurer whether the Commissioner has determined that the RBC plan may be implemented or that the RBC plan is unsatisfactory. (2) If the Commissioner determines that the RBC plan is unsatisfactory, the notification to the insurer: (i) shall set forth the reasons for the determination; and (ii) may set forth proposed revisions that will make the RBC plan satisfactory to the Commissioner. (3) On notification that the RBC plan is unsatisfactory, the insurer shall: (i) prepare a revised RBC plan, which may incorporate by reference any revisions proposed by the Commissioner; and (ii) submit the revised RBC plan to the Commissioner. (4) The insurer shall submit the revised RBC plan required by paragraph (3) of this subsection to the Commissioner: (i) within 45 days after the notification from the Commissioner; or (ii) if the insurer requests a hearing to challenge the notification from the Commissioner, within 45 days after notification to the insurer that the Commissioner, after a hearing, has rejected the insurer’s challenge. (e) Subject to the right of the insurer to a hearing, when the Commissioner notifies an insurer that the insurer’s RBC plan or revised RBC plan is unsatisfactory, the Commissioner may specify in the notification that the notification constitutes a regulatory action level event. (f) (1) Each domestic insurer that files an RBC plan or revised RBC plan with the Commissioner shall file a copy of the RBC plan or revised RBC plan with the insurance commissioner of any state in which the insurer is authorized to do business if: (i) the state has a confidentiality provision substantially similar to § 4-310(a) of this subtitle; and (ii) the insurance commissioner of that state has notified the insurer in writing of its request for the filing. (2) On request of an insurance commissioner of another state under this subsection, the insurer shall file a copy of the RBC plan or revised RBC plan with that insurance commissioner by the later of: (i) 15 days after receipt of the notification to file a copy of its RBC plan or revised RBC plan with that state; or (ii) the date on which the RBC plan or revised RBC plan is filed under subsection (c) or (d) of this section.

Md. Code, Insurance § 4-306

(a) A regulatory action level event occurs when: (1) an insurer files an RBC report that indicates that the insurer has total adjusted capital that is: (i) greater than or equal to its authorized control level RBC; and (ii) less than its regulatory action level RBC; (2) the Commissioner notifies an insurer of an adjusted RBC report that indicates an event under item (1) of this subsection; (3) if an insurer requests a hearing to challenge an adjusted RBC report that indicates an event under item (1) of this subsection, the Commissioner notifies the insurer that the Commissioner, after a hearing, has rejected the insurer’s challenge; (4) an insurer fails to file an RBC report by the filing date, unless the insurer has: (i) provided the Commissioner with a satisfactory explanation for the failure; and (ii) cured the failure within 10 days after the filing date; (5) an insurer fails to submit an RBC plan to the Commissioner within the time period specified in § 4-305(c) of this subtitle; (6) the Commissioner notifies an insurer that: (i) the RBC plan or revised RBC plan submitted by the insurer is, in the judgment of the Commissioner, unsatisfactory; and (ii) the notification constitutes a regulatory action level event with respect to the insurer; (7) the Commissioner notifies an insurer that the insurer has failed to adhere to its RBC plan or revised RBC plan, but only if: (i) the insurer’s failure to adhere to the RBC plan or revised RBC plan has a substantial adverse effect on the ability of the insurer to eliminate the company action level event in accordance with its RBC plan or revised RBC plan; and (ii) the Commissioner has stated in the notification that the insurer’s failure to adhere to the RBC plan or revised RBC plan has a substantial adverse effect on the ability of the insurer to eliminate the company action level event; or (8) if an insurer requests a hearing to challenge a determination made by the Commissioner under item (6) or (7) of this subsection, the Commissioner notifies the insurer that the Commissioner, after a hearing, has rejected the insurer’s challenge. (b) In the event of a regulatory action level event, the Commissioner shall: (1) require the insurer to prepare and submit an RBC plan or, if applicable, a revised RBC plan; (2) perform any examination or analysis that the Commissioner considers necessary of the assets, liabilities, and operations of the insurer, including a review of the insurer’s RBC plan or revised RBC plan; and (3) after any examination or analysis performed under this subsection, issue a corrective order. (c) In determining the type of corrective action to be taken by the insurer, the Commissioner may take into account all factors that the Commissioner considers relevant with respect to the insurer based on the Commissioner’s examination or analysis of the assets, liabilities, and operation of the insurer, including the results of any sensitivity test undertaken pursuant to the RBC instructions. (d) The insurer shall submit the RBC plan or revised RBC plan to the Commissioner: (1) within 45 days after the date of the regulatory action level event; or (2) if an insurer has requested a hearing to challenge an adjusted RBC report or revised RBC plan, within 45 days after notification to the insurer that the Commissioner, after a hearing, has rejected the insurer’s challenge. (e) (1) The Commissioner may retain actuaries, investment experts, and other consultants as necessary in the judgment of the Commissioner to: (i) review an insurer’s RBC plan or revised RBC plan; (ii) examine or analyze the assets, liabilities, and operation of the insurer; and (iii) formulate the corrective order to be imposed on the insurer. (2) The fees, costs, and expenses that relate to any actuaries, investment experts, or other consultants retained under this subsection shall be borne by the affected insurer as directed by the Commissioner.

Md. Code, Insurance § 4-307

(a) An authorized control level event occurs when: (1) an insurer files an RBC report that indicates that the insurer has total adjusted capital that is: (i) greater than or equal to its mandatory control level RBC; and (ii) less than its authorized control level RBC; (2) the Commissioner notifies the insurer of an adjusted RBC report that indicates an event under item (1) of this subsection; (3) if an insurer requests a hearing to challenge an adjusted RBC report that indicates the event under item (1) of this subsection, the Commissioner notifies the insurer that the Commissioner, after a hearing, has rejected the insurer’s challenge; (4) the insurer fails to respond to a corrective order in a manner satisfactory to the Commissioner; or (5) if an insurer has requested a hearing to challenge a corrective order issued by the Commissioner: (i) the Commissioner notifies the insurer that the Commissioner, after a hearing, has rejected the insurer’s challenge or modified the corrective order; and (ii) the insurer fails to respond, in a manner satisfactory to the Commissioner, to the sustained or modified corrective order. (b) In the event of an authorized control level event, the Commissioner shall: (1) take any action required under § 4-306(b) of this subtitle for an insurer that experiences a regulatory action level event; or (2) if the Commissioner considers it to be in the best interest of the policyholders and creditors of the insurer and of the public, take any action that may be necessary to place the insurer under conservation, rehabilitation, or liquidation under Title 9 of this article. (c) (1) The Commissioner shall have the rights, powers, and duties under Title 9 of this article needed to carry out the requirements of this section. (2) If the Commissioner takes any action under Title 9 of this article pursuant to an adjusted RBC report as provided in this section, the insurer shall be entitled to the protections afforded to insurers under Title 9 of this article with regard to summary proceedings.

Md. Code, Insurance § 4-308

(a) A mandatory control level event occurs when: (1) an insurer files an RBC report that indicates that the insurer has total adjusted capital that is less than its mandatory control level RBC; (2) the Commissioner notifies the insurer of an adjusted RBC report that indicates an event under item (1) of this subsection; or (3) if an insurer requests a hearing to challenge an adjusted RBC report that indicates the event under item (1) of this subsection, the Commissioner notifies the insurer that the Commissioner, after a hearing, has rejected the insurer’s challenge. (b) (1) In the case of a life insurer or fraternal benefit society, if a mandatory control level event occurs with respect to the life insurer or fraternal benefit society, the Commissioner shall take any action that may be necessary to place the life insurer or fraternal benefit society under conservation, rehabilitation, or liquidation under Title 9 of this article. (2) In the case of a property and casualty insurer, if a mandatory control level event occurs with respect to the property and casualty insurer, the Commissioner: (i) shall take any action that may be necessary to place the property and casualty insurer under conservation, rehabilitation, or liquidation under Title 9 of this article; or (ii) in the case of a property and casualty insurer that is not writing any new business and that is running off its existing business, may allow the property and casualty insurer to continue its run–off under the supervision of the Commissioner. (3) In the case of a health insurer, if a mandatory control level event occurs with respect to the health insurer, the Commissioner shall take any action that may be necessary to place the health insurer under conservation, rehabilitation, or liquidation under Title 9 of this article. (c) The Commissioner may delay action under subsection (b) of this section for up to 90 days after the occurrence of the mandatory control level event if the Commissioner finds there is a reasonable expectation that the mandatory control level event may be eliminated within the 90–day period. (d) (1) The Commissioner shall have the rights, powers, and duties under Title 9 of this article needed to carry out the requirements of this section. (2) If the Commissioner takes any action under Title 9 of this article pursuant to an adjusted RBC report as provided in this section, the insurer shall be entitled to the protections afforded to insurers under Title 9 of this article with regard to summary proceedings.

Md. Code, Insurance § 4-309

(a) An insurer may challenge any of the following determinations made or actions taken by the Commissioner under this subtitle: (1) notification to an insurer by the Commissioner of an adjusted RBC report; (2) notification to an insurer by the Commissioner that: (i) the insurer’s RBC plan or revised RBC plan is unsatisfactory; and (ii) the notification constitutes a regulatory action level event with respect to that insurer; (3) notification to an insurer by the Commissioner that: (i) the insurer has failed to adhere to its RBC plan or revised RBC plan; and (ii) the failure has a substantial adverse effect on the ability of the insurer to eliminate the company action level event with respect to the insurer in accordance with its RBC plan or revised RBC plan; or (4) notification to an insurer by the Commissioner of a corrective order with respect to the insurer. (b) (1) At the request of an insurer, the Commissioner shall hold a confidential hearing on the record under § 2-213(a) of this article to determine the validity of a challenge by the insurer. (2) To request a hearing under this subsection, the insurer shall notify the Commissioner of its request within 5 days after the notification by the Commissioner under subsection (a) of this section. (3) On receipt of the insurer’s request for a hearing, the Commissioner shall hold a hearing within 30 days after the date of the insurer’s request.

Md. Code, Insurance § 4-310

(a) All RBC reports and RBC plans related to any domestic insurer or foreign insurer that are filed with the Commissioner: (1) constitute confidential commercial information that might be damaging to the insurer if made available to the insurer’s competitors; (2) shall be kept confidential by the Commissioner; and (3) may not be made public or be subject to subpoena, other than by the Commissioner and then only for the purpose of enforcement actions taken by the Commissioner under this subtitle or any other provision of this article. (b) The provisions of this section apply to: (1) RBC reports, to the extent the information in the RBC report is not required to be set forth in a publicly available annual statement schedule; and (2) RBC plans, including the results or report of any examination or analysis of an insurer performed in connection with any RBC plan and any corrective order issued by the Commissioner pursuant to the examination or analysis. (c) It is the public policy of the State that the comparison of an insurer’s total adjusted capital to any of its RBC levels: (1) is a regulatory tool that may indicate the need for possible corrective action with respect to the insurer; and (2) is not intended as a means to rank insurers generally. (d) It is the public policy of the State that the RBC instructions, RBC reports, adjusted RBC reports, RBC plans, and revised RBC plans: (1) are intended solely for use by the Commissioner in monitoring the solvency of insurers and the need for possible corrective action with respect to insurers; and (2) may not be used by the Commissioner for rate making or considered or introduced as evidence in any rate proceeding or used by the Commissioner to calculate or derive any elements of an appropriate premium level or rate of return for any line of insurance that an insurer or any affiliate is authorized to write.

Md. Code, Insurance § 4-311

(a) The provisions of this subtitle are supplemental to other laws of the State, and may not preclude or limit any other powers or duties of the Commissioner. (b) (1) The Commissioner may adopt regulations to carry out this subtitle. (2) The Commissioner, in consultation with the Secretary of Health, shall adopt regulations that apply appropriate risk based capital standards to managed care organizations as defined under § 15–101(e) of the Health – General Article. (c) The Commissioner may exempt from the application of this subtitle any domestic property and casualty insurer that: (1) writes direct business only in the State; (2) writes direct annual premiums of $2,000,000 or less; and (3) assumes no reinsurance in excess of 5% of direct premiums written. (d) The Commissioner may exempt from the application of this Act any domestic health insurer that: (1) (i) writes direct business only in the State; (ii) assumes no reinsurance in excess of 5% of direct premiums written; and (iii) writes direct annual premiums for comprehensive medical business of $2,000,000 or less; or (2) covers less than 2,000 lives if the health insurer is: (i) a nonprofit health service plan that provides coverage solely for dental services; or (ii) a dental plan organization.

Md. Code, Insurance § 4-312

(a) On written request of the Commissioner, a foreign insurer shall: (1) submit to the Commissioner an RBC report as of the end of the immediately preceding calendar year on the later of: (i) the date an RBC report would be required to be filed by a domestic insurer under this subtitle; or (ii) 15 days after the request is received by the foreign insurer; and (2) promptly submit to the Commissioner a copy of any RBC plan or revised RBC plan that the insurer has filed with the insurance commissioner of any other state. (b) (1) The Commissioner may require a foreign insurer to file an RBC plan with the Commissioner in the event of a company action level event, regulatory action level event, or authorized control level event with respect to the foreign insurer: (i) under the risk based capital statute of the foreign insurer’s state of domicile if the insurance commissioner of that state fails to require the foreign insurer to file an RBC plan in accordance with that state’s risk based capital statute; or (ii) under this subtitle if there is no risk based capital statute in force in the foreign insurer’s state of domicile. (2) If the foreign insurer fails to file an RBC plan with the Commissioner under this subsection, the Commissioner may order the foreign insurer to cease and desist from writing new insurance business in this State. (c) If a mandatory control level event occurs with respect to a foreign insurer and a domiciliary receiver has not been appointed with respect to that foreign insurer under the rehabilitation and liquidation statute applicable in the foreign insurer’s state of domicile, the Commissioner may file an action in the Circuit Court of Baltimore City under Title 9 of this article to seek the liquidation of any property of the foreign insurer found in the State.

Md. Code, Insurance § 4-313

There is no liability on the part of, and no cause of action arises against, the Commissioner or the Administration or its employees or agents for any action taken by them in the performance of their powers and duties under this subtitle.

Md. Code, Insurance § 4-314

All notices by the Commissioner to an insurer that may result in regulatory action under this subtitle shall be effective: (1) if transmitted by registered or certified mail, on the date of mailing; or (2) if transmitted by any other means, on the date of receipt of notice by the insurer.

Md. Code, Insurance § 4-401

(a) This section applies to: (1) each insurer that provides professional liability insurance to: (i) a physician, nurse, dentist, podiatrist, optometrist, or chiropractor licensed under the Health Occupations Article; or (ii) a hospital licensed under the Health – General Article; and (2) each self–insured hospital. (b) An entity subject to this section shall report quarterly any claim or action for damages for personal injury if the claim or action: (1) is claimed to have been caused by an error, omission, or negligence in the performance of the insured’s professional services or is based on a claimed performance of the insured’s professional services without consent; and (2) resulted in: (i) a final judgment in any amount; (ii) a settlement in any amount; or (iii) a final disposition that does not result in payment on behalf of the insured. (c) A report required under this section shall contain the information required under § 4–405(b) of this subtitle. (d) A report required under this section shall be filed within 90 days after the end of the quarter during which an event described in subsection (b)(2)(i), (ii), or (iii) of this section occurred. (e) (1) A report that relates to a physician shall be filed with the State Board of Physicians. (2) A report that relates to a hospital shall be filed with the Secretary of Health. (3) A report that relates to a nurse, dentist, podiatrist, optometrist, or chiropractor shall be filed with the appropriate licensing board for these health care providers. (f) (1) Subject to paragraph (2) of this subsection, a report filed in accordance with this section shall be treated as a personal record under § 4–501(e) of the General Provisions Article. (2) Each report shall be released to the Maryland Health Care Commission. (g) An insurer that reports under this section or its agents or employees, the State Board of Physicians or its representatives, and any appropriate licensing authority that receives a report under this section shall have the immunity from liability described in § 5–701 of the Courts Article for any action taken by them under this section. (h) Failure to report to a person specified in subsection (e)(1), (2), or (3) of this section may result in the imposition by a circuit court of a civil penalty of up to $5,000.

Md. Code, Insurance § 4-402

(a) Medical files on applicants and claimants that are compiled by insurers under policies of health insurance or life insurance shall be made available for inspection: (1) on request of the applicant or claimant; (2) on request of the agent of the applicant or claimant; or (3) on request of the applicant, to a physician of the applicant’s choice. (b) Information that is provided by a physician shall be made available on request: (1) after a period of 5 years after the date of the medical examination; or (2) at any time on written authorization of the physician. (c) An agent that requests to review the medical file of an applicant or claimant must have an authorization to review medical records signed by the applicant or claimant.

Md. Code, Insurance § 4-403

(a) Except as provided in subsection (b), (c), or (d) of this section, an insurer, or an insurance service organization whose functions include the collection of medical data, may not disclose the contents of an insured’s medical or claims records. (b) (1) An insurer may disclose specific medical information or medical data contained in an insured’s medical or claims records to: (i) the insured; (ii) the insured’s agent or representative; or (iii) on request of the insured, a physician of the insured’s choice. (2) An insurer, or an insurance service organization whose functions include the collection of medical data, may disclose specific medical information or medical data contained in an insured’s medical or claims records if the insured authorizes the disclosure. (c) An insurer, or an insurance service organization whose functions include the collection of medical data, may disclose specific medical information or medical data contained in an insured’s medical or claims records without the authorization of the insured: (1) to a medical review committee, accreditation board, or commission, if the information is requested by or is in furtherance of the purpose of the committee, board, or commission; (2) in response to legal process; (3) to a nonprofit health service plan or Blue Cross or Blue Shield plan to coordinate benefit payments under multiple sickness and accident, dental, or hospital medical contracts; (4) to investigate possible insurance fraud; (5) for reinsurance purposes; (6) in the normal course of underwriting, to an insurer information exchange that may not redisclose the information unless expressly authorized by the person to whom the information pertains; (7) to evaluate an application for or renewal of insurance; (8) to evaluate and adjust a claim for benefits under a policy or to evaluate and calculate provider fiscal incentives or other types of provider payments; (9) to evaluate, settle, or defend a claim or suit for personal injury; (10) in accordance with a cost containment contractual obligation to verify that benefits paid by the insurer were proper contractually; (11) to a policyholder if: (i) the policyholder does not further disclose the specific medical information; and (ii) the information is required for an audit of the billing made by the insurer to the policyholder; or (12) to the insured’s treating providers for the sole purposes of enhancing or coordinating patient care or assisting the treating providers’ clinical decision making, provided that: (i) a disclosure under this item is subject to the additional limitations in § 4–307 of the Health – General Article on disclosure of a medical record developed primarily in connection with the provision of mental health services; (ii) medical information or medical data contained in an insured’s medical or claims records may be disclosed only in accordance with the federal Health Insurance Portability and Accountability Act of 1996, any regulations adopted under the Act, and any other applicable federal privacy laws, and disclosures under this item may not be made in violation of the prohibited uses or disclosures under the federal Health Insurance Portability and Accountability Act of 1996; (iii) an insurer or an insurance service organization that discloses medical information or medical data contained in an insured’s medical or claims records in accordance with this item shall provide a notice consistent with the requirements of 45 C.F.R. § 164.520 specifying the information to be shared, with whom it will be shared, and the specific types of uses and disclosures that the insurer or insurance service organization may make in accordance with this item; (iv) the notice required by item (iii) of this item shall include an opportunity for the insured to opt–out of the sharing of the insured’s medical information or medical data contained in the insured’s medical or claims records with the insured’s treating providers for the purposes identified in this item; and (v) if an insurer or an insurance service organization discloses medical information or medical data through an infrastructure that provides organizational and technical capabilities for the exchange of protected health information, as defined in § 4–301 of the Health – General Article, among entities not under common ownership, the insurer is subject to the requirements of §§ 4–302.2 and 4–302.3 of the Health – General Article. (d) This section does not prohibit the use of medical records, data, or statistics if the use does not disclose the identity of a particular insured or covered person. (e) An insurer that knowingly violates this section is liable to a plaintiff for any damages recoverable in a civil action, including reasonable attorney’s fees.

Md. Code, Insurance § 4-404

If a life insurer denies a policy of life insurance to an applicant, the life insurer shall disclose the results of any medical examination administered to determine the applicant’s insurability to a physician of the applicant’s choice if the applicant so requests.

Md. Code, Insurance § 4-405

(a) (1) Each insurer providing professional liability insurance to a health care provider in the State shall submit to the Commissioner information on: (i) the nature and cost of reinsurance; (ii) the claims experience, by category, of health care providers; (iii) the amount of claim settlements and claim awards; (iv) the amount of reserves for claims incurred and incurred but unreported claims; (v) the number of structured settlements used in payment of claims; and (vi) any other information relating to health care malpractice claims prescribed by the Commissioner in regulation. (2) (i) An insurer subject to the reporting requirement under paragraph (1) of this subsection shall notify the Commissioner of any information that the insurer considers proprietary. (ii) In accordance with § 4–335 of the General Provisions Article, the Commissioner shall deny inspection of any part of a report submitted under paragraph (1) of this subsection that the Commissioner determines contains confidential commercial information or confidential financial information. (b) In addition to the information required under subsection (a) of this section, for each claim filed with the Director of the Health Care Alternative Dispute Resolution Office under § 3–2A–04 of the Courts Article, each insurer providing professional liability insurance to a health care provider in the State shall submit to the Commissioner the following information: (1) (i) name of insurer; (ii) name of insurer group; (iii) claim file identification; (iv) name of person completing form; (v) telephone number (area code); and (vi) date form completed; (2) (i) date of injury; (ii) date injury reported to insurer; and (iii) date claim closed; (3) age and gender of insured person at time of injury; (4) (i) type of injury; (ii) description of injury; and (iii) if the claim is against a health care provider covered under a policy issued or delivered by the insurer completing this form, the name of the health facility where the injury occurred; (5) (i) type of medical professional liability policy; (ii) if known, whether the patient was: 1. an inpatient; 2. an emergency room outpatient; or 3. other outpatient; (iii) physician ISO classification, or equivalent classification; (iv) health care provider name and license number; and (v) policy limits for: 1. each claim or medical incident; and 2. annual aggregate; (6) (i) if known, the facility, office, or county where injury occurred; and (ii) the case number and the name and location of the court where the suit was filed and the case was tried; (7) (i) whether settlement was reached or award was made at one of the following stages: 1. arbitration; 2. mediation; 3. before suit was filed; 4. after suit was filed, but before trial; 5. during trial, but before court verdict; 6. court verdict; 7. after verdict; or 8. after appeal was filed; (ii) if settlement was reached or award was made by court verdict, whether the result was: 1. directed verdict for plaintiff; 2. directed verdict for defendant; 3. judgment notwithstanding the verdict for the plaintiff; 4. judgment notwithstanding the verdict for the defendant; 5. judgment for the plaintiff; 6. judgment for the defendant; 7. for plaintiff, after appeal; 8. for defendant, after appeal; or 9. any other; (iii) if there was no final judgment or settlement, the date and reason for the final disposition; and (iv) if the case did go to trial, whether the case was tried by a jury; (8) with respect to the total amount paid to the claimant: (i) the amount paid by the insurer; (ii) the amount paid by the insured due to retention or deductible; (iii) if known, the amount paid by an excess carrier; (iv) if known, the amount paid by the insured due to settlement or award in excess of policy limits; (v) if known, the amount paid by other defendants or contributors; and (vi) the total amount of settlement or award; (9) a summary of the occurrence from which the claim or action arose, including: (i) a description of the misdiagnosis or alleged misdiagnosis made, if any, of the patient’s actual condition; (ii) a description of the procedure giving rise to the claim; and (iii) a description of the principal injury giving rise to the claim; (10) (i) whether a structured settlement or periodic payment was used in closing this claim; and (ii) if a structured settlement or periodic payment was used: 1. the amount of immediate payment; 2. the present value of the projected total future payout (price of annuity if purchased); and 3. the projected total future payout; (11) if a neutral expert witness is employed under § 3–2A–09(d)(2) of the Courts Article, the findings of a neutral expert witness as to a plaintiff’s future medical expenses or future loss of earnings; (12) if the case was tried to verdict, the amount of noneconomic damages; and (13) (i) the total allocated loss adjustment expense by fees and expenses paid to defense counsel; and (ii) the total allocated loss adjustment expense. (c) The Commissioner: (1) shall adopt regulations on the submission of information described in this section; and (2) may adopt regulations that require insurers of other lines of liability insurance to submit reports containing information that is substantially similar to the information described in subsection (a) of this section. (d) Failure to report in accordance with this section may result in the imposition by the Commissioner of a civil penalty of up to $5,000. (e) The Commissioner shall report, in accordance with § 2-1257 of the State Government Article, the Commissioner’s findings as to the impact of Chapter 5 of the Acts of the 2004 Special Session of the General Assembly and Chapter 477 of the Acts of the General Assembly of 1994 on the availability of health care malpractice and other liability insurance in the State to the Legislative Policy Committee on or before September 1 of each year.

Md. Code, Insurance § 4-501

(a) In this subtitle the following words have the meanings indicated. (b) “Corporate Governance Annual Disclosure” or “CGAD” means a confidential report submitted by an insurer or the insurance group of which the insurer is a member in accordance with the requirements of this subtitle. (c) “Insurance group” means those insurers and affiliates included within an insurance holding company system as defined in § 7–101 of this article. (d) (1) “Insurer” includes: (i) each person engaged as indemnitor, surety, or contractor in the business of entering into insurance contracts; (ii) a nonprofit health service plan; (iii) a health maintenance organization; (iv) a dental plan organization; and (v) a managed care organization. (2) “Insurer” does not include an agency, an authority, or an instrumentality of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, a state, or a political subdivision of a state. (e) “NAIC” means the National Association of Insurance Commissioners. (f) “ORSA Summary Report” has the meaning stated in § 32–101 of this article.

Md. Code, Insurance § 4-502

(a) The requirements of this subtitle apply only to insurers domiciled in this State. (b) Subject to subsection (c) of this section, this subtitle may not be construed to require or impose corporate governance standards and internal procedures beyond those which are required under the Corporations and Associations Article. (c) This subtitle may not be construed to limit the Commissioner’s authority, or the rights or obligations of a third–party under Title 2, Subtitle 2 of this article.

Md. Code, Insurance § 4-503

(a) (1) Not later than June 1 each calendar year beginning in 2020, an insurer or the insurance group of which the insurer is a member and for which the State is the lead state shall submit to the Commissioner a Corporate Governance Annual Disclosure that is in the form and contains the information required by regulation. (2) If an insurer is a member of an insurance group and the State is not the lead state for the insurance group, as determined by the procedures specified in the most recent Financial Analysis Handbook adopted by the NAIC, the insurer shall submit a CGAD to the commissioner of the lead state for the insurance group, in accordance with the laws of the lead state. (b) A CGAD submitted under subsection (a) of this section shall include a signature of the chief executive officer or corporate secretary of the insurer or the insurance group of which the insurer is a member attesting, to the best of that individual’s belief and knowledge, that: (1) the insurer has implemented a corporate governance structure, policies, and practices; and (2) a copy of the CGAD has been provided to the insurer’s board of directors or the appropriate committee of the board of directors. (c) On request of the Commissioner, an insurer that is not required to submit a CGAD under subsection (a)(1) of this section shall submit a CGAD to the Commissioner. (d) (1) Depending on how an insurer or the insurance group of which the insurer is a member has structured its corporate governance system, the insurer or insurance group submitting a CGAD to the Commissioner may provide information regarding its corporate governance structure at: (i) the ultimate controlling parent level; (ii) an intermediate holding company level; or (iii) the individual legal entity level. (2) In determining the level for which information will be provided under paragraph (1) of this subsection, the insurer or insurance group may consider the following criteria: (i) the level at which the insurer’s or insurance group’s risk appetite is determined; (ii) the level at which factors, such as earnings, capital, liquidity, operations, and reputation of the insurer, are overseen collectively, and at which level the supervision of those factors is coordinated and exercised; or (iii) the level at which legal liability for failure of general corporate governance duties would be placed. (3) If the insurer or insurance group determines the level of reporting based on the criteria listed under paragraph (2) of this subsection, the insurer or insurance group shall indicate which of the three criteria was used to determine the level of reporting and explain any subsequent changes in the level for which information is provided. (e) If a CGAD is submitted to a lead state under subsection (a)(2) of this section, a review of the CGAD and any additional requests for information shall be made through the lead state, as determined by the procedures specified in the most recent Financial Analysis Handbook adopted by the NAIC. (f) An insurer that includes information substantially similar to the information required under this subtitle in another document submitted to the Commissioner, including proxy statements filed in conjunction with Form B requirements, or other state or federal filings provided to the Administration: (1) may not be required to duplicate the information in a CGAD; and (2) shall cross–reference in the CGAD the other document in which the information is included.

Md. Code, Insurance § 4-504

(a) (1) Subject to paragraph (2) of this subsection, an insurer or the insurance group of which the insurer is a member shall have discretion over the responses to a CGAD inquiry. (2) The CGAD shall contain the material information necessary to permit the Commissioner to develop an understanding of the corporate governance structure, policies, and practices of the insurer or insurance group. (b) The Commissioner may request from an insurer or the insurance group of which the insurer is a member additional information that the Commissioner determines material and necessary. (c) The insurer or the insurance group of which the insurer is a member shall: (1) maintain documentation and supporting information; and (2) make the documentation and supporting information available to the Commissioner on examination or on request of the Commissioner.

Md. Code, Insurance § 4-505

(a) Any documents, materials, or other CGAD–related information, including a CGAD, relating to an insurer and in the possession or control of the Commissioner that is obtained by, created by, or disclosed to the Commissioner or any other person under this subtitle: (1) is confidential and privileged; (2) is not subject to the Public Information Act; (3) is not subject to subpoena; and (4) is not subject to discovery or admissible in evidence in any private civil action. (b) Except as otherwise provided by this subtitle, the Commissioner may not make public any documents, materials, or other CGAD–related information relating to an insurer without the prior written consent of the insurer. (c) The Commissioner may use any documents, materials, or other CGAD–related information relating to an insurer in the furtherance of any regulatory or legal action brought as a part of the duties of the Commissioner. (d) This section may not be construed to require written consent of an insurer before the Commissioner may share or receive confidential documents, materials, or other CGAD–related information that assist in the performance of the regulatory duties of the Commissioner. (e) The Commissioner and any person that received confidential documents, materials, or other CGAD–related information, through examination or otherwise, while acting under the authority of the Commissioner, or with whom the documents, materials, or other CGAD–related information are shared under this subtitle may not be allowed or required to testify in any private civil action concerning the confidential documents, materials, or other CGAD–related information. (f) (1) To assist in the performance of the regulatory duties of the Commissioner, the Commissioner may, on request, share documents, materials, or other CGAD–related information, including confidential and privileged documents, materials, or other CGAD–related information as provided under subsection (a) of this section with: (i) other state, federal, and international financial regulatory agencies, including members of any supervisory college as defined in § 2–209.1 of this article; (ii) the NAIC; and (iii) any third–party consultant the Commissioner designates. (2) The Commissioner may share documents, materials, or other CGAD–related information under paragraph (1) of this subsection if the recipient of the documents, materials, or other CGAD–related information: (i) agrees in writing to maintain the confidentiality and privileged status of the documents, materials, or other CGAD–related information; and (ii) verifies in writing that the recipient has the legal authority to maintain confidentiality and privileged status of the documents, materials, or other CGAD–related information. (g) (1) The Commissioner may receive documents, materials, or other CGAD–related information from: (i) other state, federal, and international financial regulatory agencies, including members of any supervisory college as defined in § 2–209.1 of this article; and (ii) the NAIC. (2) The Commissioner shall maintain as confidential and privileged any documents, materials, or other CGAD–related information received under paragraph (1) of this section that the Commissioner receives with notice or the understanding that the documents, materials, or other CGAD–related information are confidential and privileged under the laws of the jurisdiction that is the source of the documents, materials, or other CGAD–related information. (h) (1) The sharing of information and documents by the Commissioner under this subtitle may not constitute a delegation of regulatory authority or rulemaking. (2) The Commissioner is solely responsible for the administration, execution, and enforcement of the provisions of this subtitle. (i) A waiver of any applicable privilege or claim of confidentiality and privileges in any documents, materials, or other CGAD–related information may not occur as a result of: (1) the disclosure of the documents, materials, or other CGAD–related information to the Commissioner under this section; or (2) the sharing of the documents, materials, or other CGAD–related information under this subtitle.

Md. Code, Insurance § 4-506

(a) (1) The Commissioner may retain, at an insurer’s expense, third–party consultants as may be reasonably necessary to assist the Commissioner in: (i) reviewing a CGAD and documents, materials, or other CGAD–related information; or (ii) determining an insurer’s compliance with this subtitle. (2) Third–party consultants retained under paragraph (1) of this subsection may include attorneys, actuaries, accountants, and any other experts not otherwise a part of the Commissioner’s staff. (b) Any person retained under subsection (a) of this section shall: (1) be under the direction and control of the Commissioner; and (2) act in a purely advisory capacity. (c) The NAIC and any third–party consultant shall be subject to the same confidentiality standards and requirements as the Commissioner. (d) As part of the retention process, a third–party consultant shall verify to the Commissioner, with notice to the insurer, that the third–party consultant: (1) is free of a conflict of interest with the insurer; and (2) has internal procedures in place to monitor compliance regarding any conflict and to comply with the confidentiality standards and requirements under this subtitle. (e) (1) The Commissioner shall enter into a written agreement with the NAIC or a third–party consultant governing sharing and use of documents, materials, or other CGAD–related information submitted to the Commissioner under this subtitle. (2) The written agreement under paragraph (1) of this subsection shall: (i) require the written consent of an insurer before making public documents, materials, or other CGAD–related information submitted to the Commissioner under this subtitle; (ii) specify procedures and protocols for maintaining the confidentiality and security of documents, materials, or other CGAD–related information shared with the NAIC or a third–party consultant under this subtitle; (iii) specify procedures and protocols for the sharing of documents, materials, or other CGAD–related information by the NAIC only with other state regulators from states in which an insurance group has domiciled insurers; (iv) specify that the recipient of any documents, materials, or other CGAD–related information: 1. agrees in writing to maintain the confidentiality and privileged status of the documents, materials, or other CGAD–related information; and 2. has verified in writing the legal authority to maintain confidentiality; (v) specify that: 1. ownership of the documents, materials, or other CGAD–related information shared under this subtitle with the NAIC or a third–party consultant remains with the Commissioner; and 2. the NAIC’s or third–party consultant’s use of the information is subject to the direction of the Commissioner; (vi) prohibit the NAIC and any third–party consultant from storing documents, materials, or other CGAD–related information shared under this subtitle in a permanent database after the underlying analysis is completed; (vii) require the NAIC and any third–party consultant to provide prompt notice to the Commissioner and to the insurer or insurance group of which the insurer is a member regarding any subpoena, request for disclosure, or request for production of the insurer’s documents, materials, or other CGAD–related information; and (viii) require the NAIC and any third–party consultant to consent to intervention by an insurer in any judicial or administrative action in which the NAIC or the third–party consultant may be required to disclose confidential documents, materials, or other CGAD–related information about the insurer shared with the NAIC or the third–party consultant under this subtitle.

Md. Code, Insurance § 4-507

(a) Subject to § 2–210 of this article, an insurer that fails to timely submit a CGAD to the Commissioner as required by this subtitle and without just cause is subject to a penalty of $200 for each day the violation continues, up to a maximum of $25,000. (b) The Commissioner may reduce a penalty imposed on an insurer under subsection (a) of this section if the insurer demonstrates to the Commissioner that the imposition of the penalty would constitute a financial hardship to the insurer. (c) This section does not limit the authority of the Commissioner to take any other action authorized by this article.

Md. Code, Insurance § 4-508

The Commissioner may adopt regulations to carry out this subtitle.

Md. Code, Insurance § 4-509

This subtitle may be cited as the Corporate Governance Annual Disclosure Act.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://mgaleg.maryland.gov/mgawebsite/Laws/StatutesFetched: 10/16/2026