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§ 20-404. Certification of statutory operating loss and assessment limits

West's Annotated Code of MarylandInsuranceEffective: June 1, 2023

West's Annotated Code of Maryland
Insurance (Refs & Annos)
Title 20. Maryland Automobile Insurance Fund (Refs & Annos)
Subtitle 4. Industry Automobile Insurance Association (Refs & Annos)
Effective: June 1, 2023
MD Code, Insurance, § 20-404
§ 20-404. Certification of statutory operating loss and assessment limits
Currentness
In general
(a) On or before March 15 of each year, the Fund shall determine and the Board of Trustees shall certify to the Board of Directors the information required under subsections (b) and (c) of this section.
Certified information separately identified by commercial and private passenger auto results
(b) Subject to subsection (f) of this section, the following information certified to the Board of Directors shall be separately identified by commercial auto and private passenger auto results:
(1) the statutory operating loss for the immediately preceding calendar year;
(2) a calculation to yield a private passenger auto assessment limit that is determined by subtracting the year-end total surplus of the Fund for the immediately preceding calendar year from an amount equal to 25% of the average of net direct written private passenger auto premiums of the Fund for each of the three immediately preceding calendar years; and
(3) a calculation to yield a commercial auto assessment limit that is determined by subtracting the year-end commercial auto surplus of the Fund for the immediately preceding calendar year from an amount equal to 25% of the average of net direct written commercial auto premiums of the Fund for each of the 3 immediately preceding calendar years.
Assessment certified to Board of Directors
(c) The assessment certified to the Board of Directors shall be equal to:
(1) subject to subsection (d) of this section, the assessment limit, if the assessment limit is less than or equal to the statutory operating loss; or
(2) the statutory operating loss, if the assessment limit is greater than the statutory operating loss.
Results less than or equal to zero
(d) If the calculation under subsection (b)(2) of this section yields a number that is less than or equal to zero, the assessment limit is zero.
Moneys not included in statutory operating loss or assessment
(e) The statutory operating loss or assessment certified to the Board of Directors may not include:
(1) assessment money received for a prior year; or
(2) money transferred between the commercial auto and private passenger auto divisions within the Fund.
Income or expenses not clearly attributed to either commercial or private passenger auto
(f) In a calculation made under this section, income or expenses not clearly attributable to either commercial auto or private passenger auto may be allocated pro rata for that year.
Notification of certification
(g) Promptly after the certification of an assessment by the Board of Trustees for commercial auto or private passenger auto under subsection (c) of this section the Board of Directors shall notify the Commissioner of the certification.
Authorization of withdrawal
(h) On the Commissioner's verification of the Board of Trustees' certification, the Board of Directors shall authorize the Fund to withdraw:
(1) an amount equal to the commercial auto or private passenger auto assessment, if the assessment balance for that portion exceeds the assessment; or
(2) the entire commercial auto or private passenger auto balance, if the assessment equals or exceeds the balance for that portion.
Not subject to annual assessment
(i) Association members may not be subject to an annual assessment if the amount of money held by the Fund from a prior overassessment is equal to or greater than the assessment.
Annual assessment still required
(j) Association members are subject to an annual assessment under § 20-405 of this subtitle if the amount of money held by the Fund from a prior overassessment is less than the assessment, based on the difference between:
(1) the commercial auto assessment or private passenger auto assessment; and
(2) the applicable amount of money held by the Fund from a prior overassessment.
Withdrawal of funds from prior overassessment
(k)(1) On June 1, 2023, the Board of Directors shall authorize the Fund to withdraw from the money held by the Fund from a prior overassessment.
(2) The funds withdrawn:
(i) shall be allocated to the surplus of the Fund; and
(ii) may not be credited to Association members.
Report
(l) On or before July 1, 2023, the Fund shall submit a report to the General Assembly, in accordance with § 2-1257 of the State Government Article, on the application of the funds withdrawn under this section and all fund balances in the Fund's Insured and Uninsured Divisions.

Credits

Added by Acts 1996, c. 11, § 1, eff. Oct. 1, 1997. Amended by Acts 1997, c. 592, § 1, eff. Oct. 1, 1997; Acts 2023, c. 535, § 1, eff. June 1, 2023.
Formerly Art. 48A, § 243A.
MD Code, Insurance, § 20-404, MD INSURANCE § 20-404
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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