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§ 4-103. Capital and surplus requirements

West's Annotated Code of MarylandInsuranceEffective: October 1, 2011

West's Annotated Code of Maryland
Insurance (Refs & Annos)
Title 4. General Requirements for Insurers
Subtitle 1. Certificates of Authority (Refs & Annos)
Effective: October 1, 2011
MD Code, Insurance, § 4-103
§ 4-103. Capital and surplus requirements
In general
(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.
Capital stock and surplus requirements based on type of insurance business 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.
Reasonable assets and surplus in relation to outstanding liabilities and financial needs
(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.
Construction with Subtitle 3
(d) The provisions of this subtitle shall be supplemented by the requirements of Subtitle 3 of this title.

Credits

Added by Acts 1995, c. 36, § 1, eff. Oct. 1, 1997. Amended by Acts 1995, c. 339, § 2, eff. Oct. 1, 1997; Acts 1997, c. 70, § 1, eff. Oct. 1, 1997.
Formerly Art. 48A, § 47.
MD Code, Insurance, § 4-103, MD INSURANCE § 4-103
Current through all legislation from the 2022 Regular Session of the General Assembly. Some statute sections may be more current, see credits for details.
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