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§ 9-231. Notice of impairment and contributions to impairment prohibited

West's Annotated Code of MarylandInsurance

West's Annotated Code of Maryland
Insurance (Refs & Annos)
Title 9. Impaired Entities
Subtitle 2. Liquidation, Rehabilitation, Reorganization, and Conservation (Refs & Annos)
MD Code, Insurance, § 9-231
§ 9-231. Notice of impairment and contributions to impairment prohibited
Currentness
Chief executive officer defined
(a) In this section, “chief executive officer” means a person charged by the board of directors or trustees of an insurer to administer and implement policies and procedures of the insurer.
Application of section
(b) The provisions of this section that apply to insurers also apply to:
(1) a corporation that operates a nonprofit health service plan under Title 14, Subtitle 1 of this article;
(2) a dental plan organization, as defined in § 14-401 of this article;
(3) a surplus lines insurer; and
(4) a health maintenance organization.
Notice to Commissioner and board of directors that insurer is impaired
(c)(1) A chief executive officer shall immediately provide the Commissioner and all members of the board of directors or the trustees of an insurer with written notice that the insurer is an impaired insurer, if the chief executive officer:
(i) knows that the insurer is an impaired insurer; and
(ii) for a period of 60 days, has been unable to remedy the impairment.
(2) A director, officer, or trustee of an insurer who knows that the insurer is an impaired insurer shall immediately notify the chief executive officer of the impairment.
Confidentiality of notice provided to Commissioner
(d) Notice provided to the Commissioner under this section has the confidentiality specified in § 7-106 of this article.
Concealment or transfer of property in contemplation of delinquency proceeding prohibited
(e) If a person knows that the action will result in or contribute to an insurer becoming an impaired insurer, the person may not:
(1) conceal property that belongs to the insurer;
(2) transfer or conceal property of the person or property that belongs to the insurer in contemplation of a delinquency proceeding;
(3) conceal, destroy, mutilate, alter, or falsify a document that relates to the property of the insurer;
(4) withhold a document from a receiver, trustee, or other officer of the court entitled to its possession under this subtitle; or
(5) give, obtain, or receive anything of value for acting or forbearing to act in a delinquency proceeding.
Fines and penalties
(f)(1) In addition to any other applicable penalty provided in this article, a person that violates subsection (e) of this section is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $50,000 or imprisonment not exceeding 3 years or both.
(2) In addition to any other applicable penalty provided in this article, a person that violates subsection (c) of this section is subject to a civil penalty not exceeding $50,000.
Cease and desist orders
(g) The Commissioner may issue a cease and desist order in accordance with § 27-103 of this article against a person that violates subsection (c) or subsection (e) of this section.

Credits

Added by Acts 1996, c. 11, § 1, eff. Oct. 1, 1997. Amended by Acts 1997, c. 70, § 1, eff. Oct. 1, 1997.
Formerly Art. 48A, § 58A.
MD Code, Insurance, § 9-231, MD INSURANCE § 9-231
Current through legislation effective through April 9, 2023, from the 2024 Regular Session of the General Assembly. Some statute sections may be more current, see credits for details.
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