Learn About the Law
Get help with your legal needs
FindLaw’s Learn About the Law features thousands of informational articles to help you understand your options. And if you’re ready to hire an attorney, find one in your area who can help.
Current as of December 31, 2021 | Updated by FindLaw Staff
(a) If a reciprocal insurer has a surplus of assets over all liabilities at least equal to the minimum capital stock and surplus required of a domestic stock insurer authorized to engage in like kinds of insurance business, on application of the attorney in fact of the reciprocal insurer and as approved by the subscribers' advisory committee, the Commissioner shall issue a certificate that authorizes the reciprocal insurer to:
(1) extinguish the contingent liability of subscribers under its policies then in force in the State; and
(2) omit provisions that impose contingent liability in all policies delivered or issued for delivery in the State as long as the surplus remains unimpaired.
(b)(1) The Commissioner may not authorize a domestic reciprocal insurer to extinguish the contingent liability of any of its subscribers or in any of its policies to be issued unless the reciprocal insurer qualifies to extinguish and does extinguish the contingent liability of all of its subscribers and in all of its policies for all kinds of insurance that the reciprocal insurer transacts.
(2) Notwithstanding paragraph (1) of this subsection, if required by the laws of another state in which the domestic reciprocal insurer is authorized to transact insurance, the domestic reciprocal insurer:
(i) may issue policies that provide for the contingent liability of its subscribers who acquire policies in that state; and
(ii) need not extinguish the contingent liability applicable to policies then in force in that state.
(c)(1) If the surplus described in subsection (a) of this section becomes impaired, the Commissioner immediately shall revoke the certificate that authorizes the reciprocal insurer to issue nonassessable policies.
(2) The revocation does not subject a policy then in force to contingent liability for the remainder of the period for which the premium has been paid.
(3) After revocation of authority to issue nonassessable policies, a reciprocal insurer may not issue or renew a policy without providing for the contingent liability of the subscriber.
Cite this article: FindLaw.com - Maryland Code, Insurance § 3-218 - last updated December 31, 2021 | https://codes.findlaw.com/md/insurance/md-code-insurance-sect-3-218/
FindLaw Codes may not reflect the most recent version of the law in your jurisdiction. Please verify the status of the code you are researching with the state legislature or via Westlaw before relying on it for your legal needs.
A free source of state and federal court opinions, state laws, and the United States Code. For more information about the legal concepts addressed by these cases and statutes, visit FindLaw's Learn About the Law.
Get help with your legal needs
FindLaw’s Learn About the Law features thousands of informational articles to help you understand your options. And if you’re ready to hire an attorney, find one in your area who can help.
Search our directory by legal issue
Enter information in one or both fields (Required)