(a) On application of the Commissioner at any time, the court may issue ex parte an order that:
(1) directs the Commissioner to take possession and control of all or part of:
(i) the property, books, accounts, documents, and other records of an insurer; and
(ii) the premises that the insurer occupies for the transaction of its business; and
(2) enjoins the insurer and its officers, directors, stockholders, members, subscribers, agents, and all other persons from the transaction of its business without written consent of the Commissioner.
Duration of seizure order
(b)(1) The court shall specify the duration of a seizure order issued under this section.
(2) The duration of the seizure order shall be the time that the court considers necessary for the Commissioner to determine the condition of the insurer.
(3) On motion of the court or either party and after notice that the court considers appropriate, the court may hold hearings and extend, shorten, or modify the terms of the seizure order.
(4) If the Commissioner fails to commence a delinquency proceeding after having had a reasonable opportunity to do so, the court shall vacate the seizure order.
(5) An order of the court under a delinquency proceeding vacates the seizure order.
Seizure order not anticipatory breach of any contract of insurer
(c) Issuance of a seizure order under this section does not constitute an anticipatory breach of any contract of the insurer.
Petition for hearing and review of order
(d)(1) At any time after issuance of an ex parte order under this section, an insurer subject to the order may petition the court for a hearing and review of the order.
(2) Within 15 days after receipt of the petition, the court shall hold the hearing and review the order.
Notice to persons whose interest substantially affected by order
(e)(1) If at any time after issuance of a seizure order the court determines that a person whose interest is or will be substantially affected by the order did not appear at the hearing and has not been served, the court may order that notice be given to that person.
(2) The order that notice be given does not stay the effect of any other order previously issued by the court.
Injunctions or orders to prevent interference or waste of assets
(f) At any time during a delinquency proceeding, the court may issue an injunction or order to prevent:
(1) interference with the Commissioner or the delinquency proceeding;
(2) waste of the assets of the insurer;
(3) commencement or prosecution of an action;
(4) obtaining of preferences, judgments, attachments, or other liens; or
(5) levy against the insurer or all or part of its assets.
Confidentiality of documents and records relating to proceedings
(g)(1) Except when disclosure is necessary to comply with a court order, all documents and records that relate to a proceeding under this section, including records of the insurer, files of the Administration, and court records and papers, are confidential.
(2) The clerk of the court shall hold all documents and records filed with the court in a proceeding under this section in a confidential file.
(3) After hearing arguments from the parties, the court may order that a document or record be made public.
Commissioner not required to post bond
(h) Notwithstanding any other provision of law, the Commissioner may not be required to post a bond as a prerequisite for issuance of an order under this section.
(i)(1)(i) After the 14th day following the filing of a delinquency proceeding, a federal home loan bank may not be stayed or prohibited from exercising its rights regarding collateral pledged by an insurer-member.
(ii) If a federal home loan bank exercises its rights regarding collateral pledged by an insurer-member who is subject to a delinquency proceeding, the federal home loan bank shall repurchase any outstanding capital stock:
1. that exceeds the amount of federal home loan bank stock that the insurer-member is required to hold as a minimum investment; and
2. to the extent the federal home loan bank in good faith determines the repurchase to be:
A. permissible under applicable laws, regulations, regulatory obligations, and the federal home loan bank's capital plan; and
B. consistent with the federal home loan bank's current capital stock practices applicable to its entire membership.
(2) After the appointment of a receiver for an insurer-member, the federal home loan bank, within 10 business days after a request from the receiver, shall provide a process and establish a timeline for the following:
(i) the release of collateral that exceeds the amount required to support secured obligations remaining after any repayment of loans, as determined in accordance with the applicable agreements between the federal home loan bank and the insurer-member;
(ii) the release of any of the insurer-member's collateral remaining in the federal home loan bank's possession after full repayment of all outstanding secured obligations of the insurer-member;
(iii) the payment of any fees owed by the insurer-member to the federal home loan bank;
(iv) the operation of deposits and other accounts of the insurer-member with the federal home loan bank; and
(v) the possible redemption or repurchase of federal home loan bank stock or excess stock of any class that an insurer-member is required to own.
(3) On request of a receiver for an insurer-member, the federal home loan bank shall provide any options available to the insurer-member to renew or restructure a loan, subject to:
(i) market conditions;
(ii) the terms of any outstanding loans made to the insurer-member;
(iii) the applicable policies of the federal home loan bank; and
(iv) the federal home loan bank's compliance with federal laws and regulations.
Added by Acts 1996, c. 11, § 1, eff. Oct. 1, 1997. Amended by Acts 1997, c. 70, § 7, eff. Oct. 1, 1997; Acts 2021, c. 765, § 1, eff. June 1, 2021; Acts 2021, c. 766, § 1, eff. June 1, 2021.
Formerly Art. 48A, §§ 135, 135C.
MD Code, Insurance, § 9-215, MD INSURANCE § 9-215
Current with legislation effective through July 1, 2023, from the 2023 Regular Session of the General Assembly. Some statute sections may be more current, see credits for details.