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§ 25-103. Requirements for out of state risk retention groups

West's Annotated Code of MarylandInsuranceEffective: December 14, 2022

West's Annotated Code of Maryland
Insurance (Refs & Annos)
Title 25. Alternative Market Mechanisms
Subtitle 1. Maryland Risk Retention Act (Refs & Annos)
Effective: December 14, 2022
MD Code, Insurance, § 25-103
§ 25-103. Requirements for out of state risk retention groups
Currentness
In general
(a) A risk retention group that is chartered and licensed in a state other than this State and that seeks to do business as a risk retention group in this State shall comply with the requirements of this section.
Submission of statements and information to Commissioner
(b)(1) Before a risk retention group offers insurance in this State, the risk retention group shall submit to the Commissioner:
(i) a statement that identifies:
1. the state or states in which the risk retention group is chartered and licensed as a liability insurance company;
2. the date of chartering and licensing;
3. the principal place of business of the risk retention group; and
4. any other information, including information on membership of the risk retention group, that the Commissioner requires to verify that the risk retention group qualifies as a risk retention group, as defined in § 25-101 of this subtitle;
(ii) subject to paragraphs (2) and (3) of this subsection, a copy of the plan of operation or feasibility study of the risk retention group and any revisions of the plan of operation or feasibility study submitted to the state in which the risk retention group is chartered and licensed;
(iii) a statement of registration that designates the Commissioner as its agent for service of legal process;
(iv) a copy of the financial statement of the risk retention group that:
1. was submitted to the state in which the risk retention group is chartered and licensed;
2. is certified by an independent certified public accountant; and
3. contains a statement of opinion on loss and loss adjustment expense reserves made by a member of the American Academy of Actuaries or a qualified loss reserve specialist;
(v) a copy of each examination of the risk retention group that is certified by the Commissioner or other public official that conducts the examination;
(vi) on request of the Commissioner, a copy of any information or document that relates to an outside audit performed with respect to the risk retention group; and
(vii) any other information that the Commissioner requires in order to verify the continuing qualification of the risk retention group as a risk retention group, as defined in § 25-101 of this subtitle.
(2) Subsection (b)(1)(ii) of this section does not apply to a line or classification of liability insurance that:
(i) was defined in the Product Liability Risk Retention Act of 19811 on or before October 26, 1986; and
(ii) was offered on or before October 26, 1986 by a risk retention group that had been chartered and operating for not less than 3 years on or before October 26, 1986.
(3) The risk retention group shall submit a copy of any material revision to its plan of operation or feasibility study equivalent to that required by § 25-102 of this subtitle within 30 days after the date of the approval of the revision by the commissioner of its chartering state or, if that approval is not required, within 30 days after filing.
(4) The Commissioner shall determine the filing fee for the statement of registration required by subsection (b)(1)(iii) of this section.
Taxes on premiums paid in State
(c)(1) All premiums paid in this State to risk retention groups chartered in another state for coverages are subject to taxation at the same rate and are subject to the same interest, fines, and penalties for nonpayment as are foreign admitted insurers.
(2) Each risk retention group subject to this subsection is liable for the payment of premium taxes and taxes on premiums of direct business for risks resident or located in the State.
(3) On or before March 1 of each year, each risk retention group shall report all premiums paid to it for risks resident or located in the State.
(4) If the risk retention group fails to pay the specified taxes, the taxes shall be paid by each of the risk retention group's members whose risks are resident or located in the State.
Compliance with Title 27, Subtitle 3
(d) Each risk retention group, and each agent or representative of a risk retention group, shall comply with Title 27, Subtitle 3 of this article.
Compliance with insurance laws regarding deceptive, false, or fraudulent acts or practices
(e)(1) Each risk retention group, and each agent or representative of a risk retention group, shall comply with all applicable insurance laws of the State regarding deceptive, false, or fraudulent acts or practices.
(2) The Commissioner may seek from a court an injunction regarding deceptive, false, or fraudulent acts or practices.
Submission to examination by Commissioner
(f)(1) A risk retention group shall submit to an examination by the Commissioner to determine its financial condition if the insurance commissioner of the jurisdiction in which the risk retention group is chartered and licensed has not initiated an examination or does not initiate an examination within 60 days after a request by the Commissioner.
(2) Each examination shall be coordinated to avoid unjustified repetition and conducted in an expeditious manner and in accordance with the National Association of Insurance Commissioners' Examiner Handbook.
Notice contained in application form for insurance from risk retention group
(g) Each application form for insurance from a risk retention group and each policy issued by a risk retention group for or on behalf of a resident of the State shall contain, in 10 point type on the front page and the declaration page, the following notice:
“Notice
This policy is issued by your risk retention group. Your risk retention group may not be subject to all of the insurance laws and regulations of your state. State insurance insolvency guaranty funds are not available for your risk retention group.”
Solicitation or sale of insurance to ineligible persons
(h)(1) A risk retention group may not solicit or sell insurance to a person that is not eligible for membership in the risk retention group.
(2) A risk retention group that is in a hazardous financial condition or is financially impaired may not solicit or sell insurance, or operate as a risk retention group.
Insurance company directly or indirectly owner of risk retention group
(i) Unless a risk retention group is comprised entirely of insurance companies, the risk retention group may not conduct business in this State if an insurance company is directly or indirectly a member or owner of the risk retention group.
Prohibited or unlawful coverage
(j) A risk retention group may not offer coverage that is prohibited by this article or declared unlawful by the Supreme Court of Maryland.
Finding of financial impairment by Commissioner
(k) If there has been a finding of financial impairment after an examination under subsection (f) of this section, a risk retention group that is not chartered in the State and that is doing business in the State shall comply with a lawful order issued in a voluntary dissolution proceeding or in a delinquency proceeding commenced by an insurance commissioner of a state.

Credits

Added by Acts 1996, c. 11, § 1, eff. Oct. 1, 1997. Amended by Acts 1997, c. 70, § 1, eff. Oct. 1, 1997; Acts 2018, c. 667, § 1, eff. Oct. 1, 2018; Acts 2021, c. 82, § 7, eff. Dec. 14, 2022; Acts 2021, c. 83, § 7, eff. Dec. 14, 2022.
Formerly Art. 48A, § 619.

Footnotes

1
Pub.L. 97-45, Sept. 25, 1981, 95 Stat. 949, codified 15 U.S.C.A. § 3901 et seq.
MD Code, Insurance, § 25-103, MD INSURANCE § 25-103
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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