§ 9-102. Determination of financially hazardous condition of authorized insurer
West's Annotated Code of MarylandInsuranceEffective: October 1, 2010
Effective: October 1, 2010
MD Code, Insurance, § 9-102
§ 9-102. Determination of financially hazardous condition of authorized insurer
(a) In determining whether the continued operation of an authorized insurer engaging in insurance business in the State would be hazardous to policyholders or creditors of the authorized insurer or the general public, the Commissioner may consider:
(3) whether the authorized insurer has made adequate provision, according to presently accepted actuarial standards of practice, for the anticipated cash flows required by the contractual obligations and related expenses of the insurer, when considered in light of the assets held by the insurer with respect to such reserves and related actuarial items including, but not limited to, the investment earnings on such assets and the considerations anticipated to be received and retained under such policies and contracts;
(4) the ability of an assuming reinsurer to perform, including whether the reinsurance program of the authorized insurer provides sufficient protection for its remaining surplus, after taking into account the cash flow of the authorized insurer and classes of business written by the authorized insurer and the financial condition of the assuming reinsurer;
(5) whether in the last 12-month period or any shorter period, the authorized insurer's operating loss, calculated to include net capital gain or loss, change in non-admitted assets, and cash dividends paid to stockholders, is greater than 50% of that part of the authorized insurer's policyholder surplus that is in excess of the minimum required surplus;
(11) whether the management of the authorized insurer, including an officer, director, or any other person that has direct or indirect control over operation, fails to possess and demonstrate the competence, fitness, and reputation considered necessary to serve the authorized insurer in a position of control;
(19) whether transactions among affiliates, subsidiaries, or controlling persons for which the insurer receives assets or capital gains, or both, do not provide sufficient value, liquidity, or diversity to assure the authorized insurer's ability to meet its outstanding obligations as they mature; or
(b) In determining whether the financial condition of an authorized insurer would cause its continued operation in the State to be hazardous to policyholders or creditors of the authorized insurer or the general public, the Commissioner may:
(2) make appropriate adjustments, including disallowance, consistent with the National Association of Insurance Commissioners Accounting Policies and Procedures Manual and State laws and regulations, to asset values attributable to investments in or transactions with parents, subsidiaries, or affiliates of the authorized insurer;
(4) increase the liability of the authorized insurer in an amount equal to any contingent liability, pledge, or guarantee not otherwise included in the statement of liability if there is a substantial risk that the authorized insurer will have to discharge the liability, pledge, or guarantee within the next 12-month period.
Credits
Added by Acts 1996, c. 11, § 1, eff. Oct. 1, 1997. Amended by Acts 2010, c. 120, § 1, eff. Oct. 1, 2010.
Formerly Art. 48A, § 131B.
MD Code, Insurance, § 9-102, MD INSURANCE § 9-102
Current with all legislation from the 2023 Regular Session of the General Assembly. Some statute sections may be more current, see credits for details.
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