Section 3-101 – Scope of Subtitle

    This subtitle applies to each stock insurer and each mutual insurer that engages in or proposes to engage in the insurance business in the State.

Section 3-102 – Applicability of General Corporation Statutes and Insurance Article

    (a)    Except as otherwise specifically provided in this article, each domestic insurer shall comply with the applicable provisions of the Corporations and Associations Article that relate to formation, powers vested in, and duties of corporations formed under the general provisions of the Corporations and Associations Article.     (b)    Unless a class of corporations to which this subtitle applies […]

Section 3-103 – Formation of Domestic Insurers

    (a)    A domestic insurer may be formed for insurance purposes under Title 2 of the Corporations and Associations Article.     (b)    A domestic insurer may be formed either as a mutual insurer or stock insurer, as stated in its articles of incorporation.     (c)    (1)    Each policyholder of a domestic mutual insurer, other than a holder of a reinsurance contract, is […]

Section 3-104 – Approval of Articles of Incorporation and Charter

    (a)    The articles of incorporation of each domestic insurer and any amendment to its charter must be submitted to the Commissioner for examination and approval before they may be accepted for record by the Department of Assessments and Taxation.     (b)    Articles of incorporation and articles of amendment are not effective unless the Commissioner, by written endorsement on […]

Section 3-105 – Prerequisites to Solicitation by Prospective Mutual Insurer

    (a)    A person proposing to form a mutual insurer may not solicit in the State applications or premiums for policies of the proposed mutual insurer until the person provides the Commissioner with specific information about the methods and proposed cost of the promotion.     (b)    (1)    Before a person proposing to form a mutual insurer solicits applications or premiums […]

Section 3-106 – Assets Required for Mutual Insurer — in General

    To qualify for a certificate of authority to engage in the insurance business, a mutual insurer must:         (1)    meet the requirements of § 3-105 of this subtitle; and         (2)    have received applications and collected cash premiums in an amount that, when added to any other legally available funds, results in unencumbered assets greater than all required reserves […]

Section 3-107 – Assets Required for Mutual Insurer — Engaging in Business on Assessable Basis

    (a)    A mutual insurer that proposes to or writes assessable policies must comply with all applicable requirements of this article except that the financial requirements of this section apply instead of the requirements of §§ 4-104, 4-105, and 4-106 and Title 5, Subtitle 10 of this article.     (b)    (1)    The mutual insurer must have applications for insurance on […]

Section 3-108 – Engaging in Additional Kinds of Insurance Business

    After being authorized to engage in one kind of insurance business, a mutual insurer may be authorized by the Commissioner to engage in additional kinds of insurance business as allowed by § 4-111 of this article if the mutual insurer otherwise complies with this article.

Section 3-109 – Impairment of Required Surplus

    (a)    If the minimum surplus of a stock insurer required to be maintained by § 4-105 of this article becomes impaired, or if the assets of a mutual insurer are less than its liabilities and the minimum amount of surplus required to be maintained by §§ 3-106 and 3-107 of this subtitle for authority to engage […]

Section 3-110 – Contingent Liability of Members

    (a)    (1)    Except as provided in § 3-113 of this subtitle for nonassessable policies, each member of a domestic mutual insurer other than a life insurer is contingently liable on a pro rata basis for the discharge of the liabilities of the domestic mutual insurer.         (2)    The contingent liability provided for by this subsection shall be expressly stated […]

Section 3-111 – Levy of Assessment

    (a)    The directors of a domestic mutual insurer shall assess its members who, at any time during the 36 months before the notice of assessment is mailed to them under § 3-112(b) of this subtitle, held policies providing for contingent liability, if:         (1)    the assets of the domestic mutual insurer at any time are less than its […]

Section 3-112 – Enforcement of Contingent Liability

    (a)    The determination by the domestic mutual insurer of the total assessment under § 3-111 of this subtitle and the amount of each member’s assessment is considered prima facie correct.     (b)    (1)    The domestic mutual insurer shall mail to each member, at the member’s last address of record with the domestic mutual insurer, notice of:             (i)    the amount of […]

Section 3-113 – Issuance of Nonassessable Policies

    (a)    If a domestic mutual insurer has surplus funds at least equal to the paid-in capital stock and surplus required of a domestic stock insurer that transacts like kinds of insurance business, the domestic mutual insurer, on receipt of an order of the Commissioner authorizing it to do so, may extinguish the contingent liability of its […]

Section 3-114 – Participating Policies

    (a)    A domestic stock insurer or domestic mutual insurer may:         (1)    issue any or all of its policies with or without participation in profits, savings, or unabsorbed parts of premiums;         (2)    classify policies issued on a participating and nonparticipating basis; and         (3)    determine the right to participate and the extent of participation of any class of policies.     (b)    The classification […]

Section 3-115 – Dividends

    (a)    The directors of a domestic mutual insurer periodically may apportion and pay or credit to its members dividends only out of that part of surplus funds that represents net realized savings and net realized earnings in excess of the surplus required by law to be maintained.     (b)    A dividend that is otherwise proper may be payable […]

Section 3-116 – Loans to Insurers

    (a)    (1)    A director, officer, or member of a stock insurer or mutual insurer or any other person may lend or advance to the stock insurer or mutual insurer any money necessary to enable it to comply with a surplus requirement or any other requirement of law.         (2)    The instrument evidencing a loan or advance under this subsection […]

Section 3-117 – Loans to and Guarantees of Obligations of Directors and Officers

    (a)    (1)    Except as provided in subsection (d) of this section, an authorized insurer or its subsidiary may not make, directly or indirectly, a loan to a director or executive officer of the authorized insurer unless the loan:             (i)    is a bona fide mortgage loan made on a principal residence of the director or executive officer; and             (ii)    is […]

Section 3-118 – Agreements to Pay Expenses of Management

    A domestic stock insurer or domestic mutual insurer may not enter into an agreement in which a person agrees to pay all or part of the expenses of management of the domestic stock insurer or domestic mutual insurer in consideration of an agreement to pay to the person commissions on premiums due the domestic stock […]

Section 3-119 – Restrictions on Purchase and Sale of Equity Securities of Domestic Stock Insurers

    (a)    In this section, “equity security” means:         (1)    stock or a similar security;         (2)    a security convertible, with or without consideration, into stock or a similar security;         (3)    a security carrying a warrant or right to subscribe to or purchase stock or a similar security;         (4)    any other warrant or right to subscribe to or purchase stock or a similar […]

Section 3-120 – Conversion of Stock Insurer to Mutual Insurer

    (a)    This section does not apply to mutualization under a court order in connection with the rehabilitation or reorganization of an insurer under Title 9, Subtitle 2 of this article.     (b)    A domestic stock insurer, other than a title insurer, may become a mutual insurer under a plan and procedure that is approved by the Commissioner after […]