Section 3-201 – “Subscriber” Defined

    In this subtitle, “subscriber” means a person that exchanges a mutual agreement of indemnity with other persons through a common attorney in fact.

Section 3-202 – Scope of Subtitle

    Except as expressly provided otherwise in this subtitle, this subtitle applies to foreign reciprocal insurers and to domestic reciprocal insurers.

Section 3-203 – Qualifications of Reciprocal Insurers

    (a)    A reciprocal insurer may be authorized to engage in the insurance business if the reciprocal insurer meets the requirements of this section and is otherwise in compliance with the applicable provisions of this article.     (b)    To write assessable policies, a reciprocal insurer must have surplus funds of not less than:         (1)    $375,000 for one kind of insurance […]

Section 3-204 – Organization and Application for Certificate of Authority

    (a)    Twenty-five or more persons domiciled in the State may organize a domestic reciprocal insurer and may apply to the Commissioner for a certificate of authority to engage in the insurance business as a reciprocal insurer.     (b)    The proposed attorney in fact of the reciprocal insurer shall fulfill the requirements of and shall execute, verify under oath, […]

Section 3-205 – Bond of Attorney in Fact

    (a)    (1)    When filing the declaration required by § 3-204 of this subtitle, the attorney in fact of a domestic reciprocal insurer shall file with the Commissioner a bond that:             (i)    is in favor of the State for the benefit of all persons damaged as a result of a breach of the conditions of the bond by the […]

Section 3-206 – Issuance of Certificate of Authority

    After payment of the applicable fee required by § 2-112 of this article, the Commissioner shall issue to the attorney in fact of each reciprocal insurer that meets the requirements of this subtitle a certificate of authority in the name of the reciprocal insurer.

Section 3-207 – Scope of Certificate of Authority

    (a)    A certificate of authority authorizes a reciprocal insurer to engage in one kind or a combination of kinds of insurance business, except for life insurance and health insurance other than as supplementary coverage in policies of liability insurance.     (b)    A certificate of authority authorizes a reciprocal insurer to purchase reinsurance and grant reinsurance as to any […]

Section 3-208 – Denials, Suspensions, and Revocations

    In addition to any other grounds for denial, suspension, or revocation of a certificate of authority, the Commissioner may deny, suspend, or revoke a certificate of authority if the attorney in fact of a reciprocal insurer fails to comply with any provision of this article.

Section 3-209 – Business Name; Authority to Sue

    A reciprocal insurer:         (1)    shall have and use a business name that includes the word “reciprocal”, “interinsurer”, “interinsurance”, “exchange”, “underwriters”, or “underwriting”; and         (2)    may sue and be sued in its own name.

Section 3-210 – Annual Statement

    The annual statement of a reciprocal insurer shall:         (1)    be made and filed by the attorney in fact of the reciprocal insurer; and         (2)    be supplemented by any additional information required by the Commissioner about the affairs and transactions of the attorney in fact as they relate to the reciprocal insurer.

Section 3-211 – Financial Condition of Reciprocal Insurer

    (a)    The Commissioner shall determine the financial condition of a reciprocal insurer in accordance with this section.     (b)    (1)    The surplus deposits of subscribers shall be allowed as assets, except that any premium deposits that are delinquent for 90 days or more shall be charged first against the surplus deposits.         (2)    Premium deposits that are delinquent for less than […]

Section 3-212 – Attorney in Fact; Power of Attorney

    (a)    The attorney in fact of a reciprocal insurer may be an individual, firm, or corporation.     (b)    The attorney in fact of a foreign or alien reciprocal insurer that is authorized to engage in the insurance business in the State is not considered to be doing business in the State within the meaning of any law of […]

Section 3-213 – Subscribers

    (a)    An individual, partnership, or corporation of the State may make application, enter into agreement for, hold policies or contracts in or with, and be a subscriber of a domestic, foreign, or alien reciprocal insurer.     (b)    (1)    In addition to the powers specified in its articles of incorporation, a corporation organized under the laws of the State has […]

Section 3-214 – Subscribers’ Advisory Committee

    (a)    The advisory committee of a domestic reciprocal insurer that exercises the subscribers’ rights shall be chosen under rules that the subscribers adopt.     (b)    Not less than two-thirds of the advisory committee shall be subscribers other than the attorney in fact of the reciprocal insurer or a person employed by, representing, or having a financial interest in […]

Section 3-215 – Modification of Subscribers’ Agreement or Power of Attorney

    (a)    Modification of the terms of the subscribers’ agreement or power of attorney of a domestic reciprocal insurer shall be made jointly by the attorney in fact of the reciprocal insurer and the subscribers’ advisory committee.     (b)    A modification described in subsection (a) of this section is not effective retroactively and does not apply to an insurance […]

Section 3-216 – Liability of Subscribers

    (a)    (1)    Except as to a nonassessable policy, each subscriber has a contingent assessment liability, in the amount stated in the power of attorney or subscriber’s agreement, for payment of losses and expenses incurred while the subscriber’s policy is in force.         (2)    The liability of each subscriber, other than as to a nonassessable policy, for the obligations of […]

Section 3-217 – Assessments

    (a)    Assessments periodically may be levied on the subscribers of a domestic reciprocal insurer liable for assessments, as allowed by the terms of the subscribers’ policies, by:         (1)    the attorney in fact of the reciprocal insurer, after approval by the subscribers’ advisory committee and the Commissioner; or         (2)    the Commissioner, in liquidation of the reciprocal insurer.     (b)    (1)    Subject to […]

Section 3-218 – Extinguishing Subscribers’ Liability and Issuance of Nonassessable Policies

    (a)    If a reciprocal insurer has a surplus of assets over all liabilities at least equal to the minimum capital stock and surplus required of a domestic stock insurer authorized to engage in like kinds of insurance business, on application of the attorney in fact of the reciprocal insurer and as approved by the subscribers’ advisory […]

Section 3-219 – Savings

    (a)    (1)    The attorney in fact of a reciprocal insurer:             (i)    periodically may fix and determine savings to be paid to each subscriber or policyholder on participating policies or contracts from the earned surplus of the reciprocal insurer; and             (ii)    after doing so, shall establish an adequate surplus from which the savings are to be paid.         (2)    The attorney in […]

Section 3-220 – Advances of Money

    (a)    This section does not apply to bank loans or to loans for which security is given.     (b)    The attorney in fact of a domestic reciprocal insurer or another person may advance to the reciprocal insurer on reasonable terms any money that the reciprocal insurer requires periodically in its operations.     (c)    (1)    The money advanced to a reciprocal insurer: […]