Title 3. Kinds of Insurers — Subtitle 1. Stock Insurers and Mutual Insurers
Statutes in effect as of October 1, 2026.
Md. Code Ann., Ins. § 3-101 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–101LinkCopy Citation
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.
Md. Code Ann., Ins. § 3-102 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–102LinkCopy Citation
(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 is specifically included in a statute passed after December 31, 1963, a domestic insurer is only subject to regulation under this article.
Md. Code Ann., Ins. § 3-103 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–103LinkCopy Citation
(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 a member of the mutual insurer, with each right and obligation of membership.
(2)
Each policy shall state the provisions of paragraph (1) of this subsection.
(3)
Any person, government, governmental unit, state, or political subdivision may be a member of a domestic, foreign, or alien mutual insurer.
(4)
An officer, stockholder, trustee, or legal representative of a member:
(i)
may be recognized as acting in a representative capacity for or on behalf of the member for the purpose of the membership; and
(ii)
is not personally liable on the insurance contract for acting in that representative capacity.
(5)
A Maryland corporation may participate as a member of a mutual insurer incidentally to the purpose for which the corporation is organized.
(d)
(1)
Each member of a domestic mutual insurer is entitled to one vote, or to the number of votes the bylaws provide, based on:
(i)
the insurance in force;
(ii)
the number of policies held; or
(iii)
the amount of premium paid.
(2)
Only the policyholder under a group policy is a member of the mutual insurer and is entitled to vote at the meetings of the mutual insurer.
(e)
(1)
Except as provided in paragraph (2) of this subsection, the board of directors of a domestic insurer shall have at least nine members.
(2)
The board of directors of a domestic financial guaranty insurance company that is prohibited from issuing new policies of financial guaranty insurance shall have at least five members.
Md. Code Ann., Ins. § 3-104 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–104LinkCopy Citation
(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 them, has approved the articles as being in accordance with the insurance laws of the State.
Md. Code Ann., Ins. § 3-105 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–105LinkCopy Citation
(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 for policies, the person shall have funds acquired in accordance with § 3-116 of this subtitle in the amount of:
(i)
$125,000, if the person will solicit applications or premiums for one kind of insurance business, as set out in § 4-104 of this article; or
(ii)
$250,000, if the person will solicit applications or premiums for two or more kinds of insurance business.
(2)
The funds shall be held in cash or in investments authorized for capital and reserve under Title 5, Subtitle 6 of this article.
(c)
(1)
A person must obtain a license from the Commissioner before the person forms a mutual insurer in the State.
(2)
Before issuing a license, the Commissioner shall investigate the record of the applicant.
(3)
The Commissioner shall issue a license under this subsection if the Commissioner finds that the applicant is honest and trustworthy.
Md. Code Ann., Ins. § 3-106 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–106LinkCopy Citation
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 and other liabilities at least equal to the amount required by:
(i)
Sections 4-104 and 4-105 of this article, if the mutual insurer will be authorized to engage in insurance business on a nonassessable basis; or
(ii)
Section 3-107 of this subtitle, if the mutual insurer will be authorized to engage in insurance business on an assessable basis.
Md. Code Ann., Ins. § 3-107 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–107LinkCopy Citation
(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 which it shall issue simultaneously, or it must have in force, at least 20 policies to at least 20 members for the same kind of insurance, on at least 200 separate risks, each within the maximum single risk described in subsection (c) of this section.
(2)
To transact workers’ compensation insurance or employer’s liability insurance, the application shall cover at least 2,000 employees, with each employee considered a separate risk when determining the maximum single risk.
(c)
(1)
The maximum single risk may not exceed the greatest of:
(i)
20% of the admitted assets;
(ii)
3 times the average risk; and
(iii)
1% of the insurance in force.
(2)
When determining the maximum single risk, any authorized reinsurance that takes effect simultaneously with the policy shall be deducted from the maximum single risk.
(d)
(1)
On each insurance application required by subsection (b) of this section, the mutual insurer must have collected:
(i)
an annual cash premium; or
(ii)
a full premium for the term of the policy, if the policy is for less than 1 year.
(2)
The total of the premiums shall be held in cash or in investments authorized for capital and reserve under Title 5, Subtitle 6 of this article.
(e)
(1)
To qualify for authority to engage in one kind of insurance business allowed to be written on an assessable basis under this article, a mutual insurer must have total assets that:
(i)
equal at least $250,000; and
(ii)
exceed the amount required for reserves and all other liabilities by at least $125,000.
(2)
For purposes of paragraph (1) of this subsection, assets include borrowed surplus under § 3-116 of this subtitle, but exclude borrowed money or other borrowed assets.
(f)
To qualify for authority to engage in two or more kinds of insurance business allowed to be written on an assessable basis under this article, a mutual insurer must have assets that:
(1)
equal at least $500,000; and
(2)
exceed the amount required for reserves and all other liabilities by at least $250,000.
(g)
(1)
This subsection applies only to a domestic mutual insurer that:
(i)
is licensed only for property insurance and casualty insurance, other than motor vehicle physical damage insurance, motor vehicle liability insurance, or workers’ compensation insurance; and
(ii)
writes assessable policies.
(2)
Notwithstanding any other provision of this section, a domestic mutual insurer described by paragraph (1) of this subsection need not have assets or surplus exceeding the amount that the mutual insurer would be required to have if it wrote only one kind of insurance, if the mutual insurer:
(i)
restricts its operations to the county where its principal office is located and to the counties of the State that are immediately adjacent to that county;
(ii)
is not licensed to engage in the insurance business in another state;
(iii)
has been in existence for at least 20 years before July 1, 1968; and
(iv)
maintains an automatic reinsurance treaty, filed with and approved by the Commissioner, that reinsures liability coverages issued by the mutual insurer in excess of a net amount of retention that is satisfactory to the Commissioner.
Md. Code Ann., Ins. § 3-108 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–108LinkCopy Citation
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.
Md. Code Ann., Ins. § 3-109 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–109LinkCopy Citation
(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 in the kinds of insurance business being transacted, the Commissioner immediately shall:
(1)
determine the amount of deficiency; and
(2)
serve notice on the insurer to cure the deficiency within 60 days after service of the notice.
(b)
An insurer may cure the deficiency:
(1)
in cash or in assets eligible for the investment of the insurer’s funds under Title 5, Subtitle 5 or Subtitle 6 of this article;
(2)
if a stock insurer, by reducing its capital to an amount not below the minimum required for the kinds of insurance that the stock insurer will transact; or
(3)
if a mutual insurer, by amending its certificate of authority to cover only the kinds of insurance for which the mutual insurer has sufficient surplus under this article.
(c)
(1)
Except as provided in paragraph (2) of this subsection, if an insurer does not cure the deficiency and file proof that it has done so with the Commissioner within the 60-day period:
(i)
the insurer is considered insolvent; and
(ii)
the Commissioner shall institute delinquency proceedings against the insurer under Title 9, Subtitle 2 of this article.
(2)
If the deficiency exists because the Commissioner required increased loss reserves, disallowed certain assets, or reduced the value at which certain assets are carried in the insurer’s accounts, the Commissioner, on application and good cause shown, may extend for not more than an additional 60 days the period within which the insurer may cure the deficiency and file proof that it has done so.
(d)
The directors of an insurer are individually liable for losses incurred under policies that are issued by the insurer:
(1)
after expiration of the period provided for curing a deficiency of the insurer’s capital stock or surplus; and
(2)
before the deficiency is cured.
Md. Code Ann., Ins. § 3-110 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–110LinkCopy Citation
(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 in each policy.
(b)
Termination of the policy of a member does not relieve the member of the contingent liability for the member’s proportion, if any, of the obligations of the domestic mutual insurer that accrued while the policy was in force.
(c)
The unrealized contingent liability of a member is not an asset of the domestic mutual insurer in determining its financial condition.
Md. Code Ann., Ins. § 3-111 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–111LinkCopy Citation
(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 liabilities plus the minimum surplus required to be maintained to transact the kind of insurance being transacted by the domestic mutual insurer; and
(2)
the deficiency is not being cured from other sources.
(b)
Members assessed under this section are liable to the domestic mutual insurer for the amount assessed.
(c)
(1)
The total of assessments shall be sufficient to:
(i)
cure the deficiency; and
(ii)
provide reasonable working funds above the minimum surplus, not exceeding 5% of the domestic mutual insurer’s liabilities on the date that the deficiency was determined.
(2)
A member’s assessment may not exceed the lesser of:
(i)
one policy premium; or
(ii)
the premium for a full year.
(d)
The assessment on a policy with contingent liability shall be computed based on the premiums earned on the policy during the period to which the assessment relates.
(e)
A member may not have an offset against an assessment for which the member is liable because of a claim for an unearned premium or loss payable.
Md. Code Ann., Ins. § 3-112 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–112LinkCopy Citation
(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 the assessment to be paid; and
(ii)
the period within which the assessment must be paid.
(2)
The period within which the assessment must be paid may not be less than 20 days after notice.
(c)
(1)
If a member fails to pay the assessment within the period specified in the notice, the domestic mutual insurer may bring suit to collect the assessment.
(2)
Failure of the member to receive the notice mailed in accordance with subsection (b) of this section is not a defense in an action to collect the assessment.
Md. Code Ann., Ins. § 3-113 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–113LinkCopy Citation
(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 members as to all its policies in force and may issue nonassessable policies.
(b)
Subject to the requirements of this article for issuing nonassessable policies, a foreign or alien mutual insurer may issue nonassessable policies to its members in the State under its articles of incorporation and the laws of its domicile.
(c)
A mutual insurer may not issue assessable policies in the State if the mutual insurer issues nonassessable policies in the State or another jurisdiction.
(d)
A policy of a domestic mutual insurer that, under an order of the Commissioner, is without contingent liability and therefore is nonassessable by its terms is not subject to assessment for a debt or liability of the domestic mutual insurer.
(e)
The Commissioner shall revoke the authority of a mutual insurer to issue nonassessable policies if:
(1)
the assets of the mutual insurer at any time are less than the sum of its liabilities and the surplus required for that authority; or
(2)
the mutual insurer, by resolution of its board of directors approved by a majority of its members, requests that the authority be revoked.
(f)
After revocation of a mutual insurer’s authority to issue nonassessable policies, the mutual insurer may not:
(1)
issue a nonassessable policy; or
(2)
renew a policy that is renewable at the option of the mutual insurer without endorsing the policy to provide for the contingent liability of the policyholder.
Md. Code Ann., Ins. § 3-114 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–114LinkCopy Citation
(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 of policies or determination of participation under subsection (a) of this section shall be reasonable and may not discriminate unfairly between policyholders within the same classifications.
(c)
A life insurer may issue both participating and nonparticipating policies only if the right or absence of the right to participate is reasonably related to the premium charged.
Md. Code Ann., Ins. § 3-115 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–115LinkCopy Citation
(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 out of the domestic mutual insurer’s net realized savings and net realized earnings even though the domestic mutual insurer’s total surplus is then less than its total contributed surplus.
Md. Code Ann., Ins. § 3-116 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–116LinkCopy Citation
(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 shall:
(i)
be approved as to form and content by the Commissioner; and
(ii)
contain provisions that specify that:
(1)
the instrument is subordinate to policyholders, claimant and beneficiary claims, and all other classes of creditors other than surplus note holders; and
(2)
interest payments and principal repayments may not be made without prior approval of the Commissioner.
(3)
A loan or advance under this subsection and any interest on it:
(i)
is payable only out of the surplus remaining after the stock insurer or mutual insurer provides for all reserves and other liabilities; and
(ii)
is not otherwise a liability or claim against the stock insurer or mutual insurer or any of its assets.
(b)
(1)
Proceeds of a loan or advance under this section shall be in the form of cash or other admitted assets having readily determinable values and liquidity satisfactory to the Commissioner.
(2)
In each annual statement, a stock insurer or mutual insurer shall report the amount of each loan or advance made under this section.
Md. Code Ann., Ins. § 3-117 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–117LinkCopy Citation
(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 approved or ratified by the board of directors of the authorized insurer.
(2)
A director or executive officer may not accept, directly or indirectly, a loan prohibited by paragraph (1) of this subsection.
(b)
An authorized insurer may not make an advance to a director or executive officer of the authorized insurer for future services to be performed more than 1 year after the date of making the advance.
(c)
(1)
An authorized insurer or its affiliate or subsidiary may not guarantee, directly or indirectly, the financial obligation of a director or executive officer of the authorized insurer, affiliate, or subsidiary.
(2)
A guarantee made in violation of this subsection is void.
(3)
This subsection does not prohibit an insurer from making or entering into an insurance contract or surety bond that is authorized by its articles of incorporation for a director or executive officer.
(d)
This section does not prohibit a life insurer from making a policy loan to a director or executive officer of the life insurer on a policy or contract of the life insurer in an amount not exceeding the loan value of the policy or contract.
Md. Code Ann., Ins. § 3-118 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–118LinkCopy Citation
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 insurer or domestic mutual insurer or any other compensation for the person’s services.
Md. Code Ann., Ins. § 3-119 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–119LinkCopy Citation
(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 security; or
(5)
any other security that the Commissioner considers to be of a similar nature and necessary or appropriate to treat as an equity security, based on regulations adopted by the Commissioner in the public interest or to protect investors.
(b)
(1)
Subsections (d), (e), and (f) of this section do not apply to foreign or domestic arbitrage transactions unless those transactions are made in contravention of regulations adopted by the Commissioner to carry out this section.
(2)
Subsections (d), (e), and (f) of this section do not apply to equity securities of a domestic stock insurer if:
(i)
the securities are registered or required to be registered under § 12 of the Securities Exchange Act of 1934; or
(ii)
the domestic stock insurer did not have any class of its equity securities held of record by 100 or more persons on the last business day of the year immediately preceding the year in which equity securities of the insurer otherwise would be subject to subsections (d), (e), and (f) of this section.
(c)
(1)
The Commissioner:
(i)
may adopt regulations necessary to carry out this section; and
(ii)
for the purpose of adopting regulations, may classify domestic stock insurers, securities, and other persons or matters within the Commissioner’s jurisdiction.
(2)
The provisions of subsections (d), (e), and (f) of this section that impose liability may not be applied to an act committed or omitted in good faith in conformity with a regulation of the Commissioner, notwithstanding that the regulation is later amended, rescinded, or determined by judicial or other authority to be invalid for any reason.
(d)
(1)
A person shall file with the Commissioner, in the form the Commissioner requires, a statement of the amount of all equity securities of a domestic stock insurer of which the person is the beneficial owner within 10 days after the person becomes:
(i)
directly or indirectly the beneficial owner of more than 10% of any class of equity security of the domestic stock insurer; or
(ii)
a director or officer of the domestic stock insurer.
(2)
Within 10 days after the end of each calendar month in which there has been a change in ownership of securities that are subject to reporting under paragraph (1) of this subsection, the person whose ownership has changed shall file with the Commissioner, in the form the Commissioner requires, a statement indicating the person’s ownership at the end of the calendar month and the changes in ownership that have occurred during that calendar month.
(e)
(1)
The purpose of this subsection is to prevent the unfair use of information that may have been obtained by a beneficial owner, director, or officer of a domestic stock insurer because of that person’s relationship to the domestic stock insurer.
(2)
(i)
Except as provided in subparagraph (ii) of this paragraph, any profit realized by a beneficial owner, director, or officer of a domestic stock insurer from a purchase and sale, or a sale and purchase, of an equity security of the domestic stock insurer within a period of less than 6 months inures to and is recoverable by the domestic stock insurer, regardless of the intention of the beneficial owner, director, or officer in entering into the transaction of holding the equity security purchased or of not repurchasing the security sold for more than 6 months.
(ii)
An equity security acquired in good faith in connection with a debt contracted prior to the 6-month period is not subject to subparagraph (i) of this paragraph.
(3)
(i)
A suit to recover any profit obtained in violation of this subsection may be brought in a court of competent jurisdiction by:
(1)
the domestic stock insurer; or
(2)
the owner of any security of the domestic stock insurer in the name and on behalf of the domestic stock insurer, if the domestic stock insurer fails or refuses to bring the suit within 60 days after a request to do so or fails to prosecute the suit diligently.
(ii)
A suit under this subsection may not be brought more than 2 years after the date the profit was realized.
(4)
This subsection may not be construed to apply to:
(i)
a transaction in which the beneficial owner was not a beneficial owner both at the time of the purchase and sale, or the sale and purchase, of the security involved; or
(ii)
a transaction that the Commissioner exempts by regulation as not within the purpose of this subsection.
(f)
(1)
A beneficial owner, director, or officer of a domestic stock insurer may not sell, directly or indirectly, an equity security of the domestic stock insurer if the person selling the equity security or the person’s principal does not own the equity security sold.
(2)
A beneficial owner, director, or officer of a domestic stock insurer may not sell, directly or indirectly, an equity security of the domestic stock insurer owned by the person selling the security or the person’s principal if the person or the person’s principal:
(i)
does not deliver the equity security against the sale within 20 days after the sale; or
(ii)
within 5 days after the sale does not deposit the equity security in the mail or other usual channels of transportation.
(3)
A person is not considered to have violated this subsection if the person proves that, notwithstanding the exercise of good faith, the person was unable to make the delivery or deposit within the time allowed or proves that to do so would cause undue inconvenience or expense.
(g)
(1)
The following provisions do not apply to a dealer acting in the ordinary course of the dealer’s business and incident to the establishment or maintenance by that dealer of a primary or secondary market, other than on an exchange as defined in the Securities Exchange Act of 1934, for an equity security, except for equity securities held by the dealer in an investment account:
(i)
subsection (e) of this section, for any purchase and sale, or sale and purchase, of an equity security of a domestic stock insurer; and
(ii)
subsection (f) of this section, for any sale of an equity security of a domestic stock insurer.
(2)
By regulation as the Commissioner considers necessary or appropriate in the public interest, the Commissioner may define and require terms and conditions for:
(i)
securities held in an investment account; and
(ii)
transactions made in the ordinary course of business and incident to the establishment or maintenance of a primary or secondary market.
Md. Code Ann., Ins. § 3-120 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–120LinkCopy Citation
(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 a hearing.
(c)
The Commissioner may not approve a plan or procedure for mutualization unless:
(1)
the plan or procedure is equitable to stockholders and policyholders;
(2)
the plan is subject to approval by vote of the holders of at least three-fourths of the insurer’s outstanding capital stock with voting rights and by vote of at least two-thirds of the insurer’s policyholders who vote on the plan in person, by proxy, or by mail under the notice and procedure approved by the Commissioner;
(3)
for a life insurer, the right to vote under item (2) of this subsection is limited to holders of policies, other than term or group policies, that have been in force for more than 1 year;
(4)
mutualization will result in retirement of shares of the insurer’s capital stock at a price not exceeding the fair market value of the stock as determined by competent disinterested appraisers;
(5)
the plan provides for the purchase of the stock of an objecting stockholder in the same manner and subject to the same applicable conditions provided by Title 3, Subtitle 2 of the Corporations and Associations Article for the rights of objecting stockholders with respect to consolidation or merger of corporations;
(6)
the plan provides for definite conditions to be fulfilled by a designated early date on which the mutualization will be considered effective; and
(7)
the mutualization leaves the insurer with surplus funds that are reasonably adequate for the security of its policyholders and to enable the insurer to continue successfully in business in the states where it is then authorized to transact insurance business for the kinds of insurance included in its certificates of authority in those states.
Md. Code Ann., Ins. § 3-121 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–121LinkCopy Citation
(a)
A domestic mutual insurer may become a stock insurer under a plan and procedure that is approved by the Commissioner.
(b)
The Commissioner may not approve a plan or procedure for conversion of a mutual insurer to a stock insurer unless:
(1)
the plan or procedure is equitable to the insurer’s members;
(2)
the plan is subject to approval by vote of at least three-fourths of the insurer’s current members who vote on the plan in person, by proxy, or by mail at a meeting of members called for that purpose under reasonable notice and procedure approved by the Commissioner;
(3)
for a life insurer, the right to vote may be limited to members who hold policies, other than term or group policies, that have been in force for at least 1 year;
(4)
the plan provides as to any holder of a surplus note participating in the conversion that:
(i)
the rights of the holder shall be governed by the terms of the surplus note; or
(ii)
if the terms of the surplus note are silent regarding a conversion and the holder is not also a member, the holder may not vote on the planned conversion;
(5)
the equity of each policyholder in the insurer:
(i)
is determinable under a fair formula approved by the Commissioner; and
(ii)
is based on not less than the insurer’s entire surplus, minus contributed or borrowed surplus funds, plus a reasonable present equity in reserves and in all nonadmitted assets;
(6)
all current policyholders and all persons that were policyholders of the insurer within 3 years before the date the plan was submitted to the Commissioner are entitled to participate in the purchase of stock or distribution of assets;
(7)
the plan gives to each policyholder specified in item (6) of this subsection a preemptive right:
(i)
within a designated reasonable period, to acquire the policyholder’s proportionate part of all of the proposed capital stock of the insurer; and
(ii)
to apply on the purchase of proposed capital stock the amount of the policyholder’s equity in the insurer as determined under item (5) of this subsection;
(8)
stock is offered to policyholders at a price that is not greater than the price at which the stock will be offered to others in the initial offering, but that is not more than double the par value of the stock;
(9)
the plan provides for payment to each policyholder who elects not to apply the policyholder’s equity in the insurer for or on the purchase price of stock to which the policyholder is preemptively entitled, in cash in an amount that equals not less than 50% of the amount of the policyholder’s equity that was not used for the purchase of stock, and which payment, together with any stock purchased, constitutes full payment and discharge of the policyholder’s equity as an owner of the insurer; and
(10)
the completed plan provides that the converted insurer will have:
(i)
paid-in capital stock equal to not less than the minimum paid-in capital required of a domestic stock insurer that transacts like kinds of insurance business; and
(ii)
surplus funds equal to not less than 100% of the required capital.
(c)
Within 60 days of the filing of a plan that contains all of the information required under this section and any regulations adopted under this section, the Commissioner shall approve or disapprove the plan.
(d)
At the expense of the mutual insurer, the Commissioner may retain any qualified expert who is not a part of the staff of the Commissioner to assist in reviewing the plan.
(e)
After written notice to the mutual insurer and any other interested person, the Commissioner may hold a hearing on whether the terms of the plan comply with this section.
(f)
(1)
If a mutual insurer is insolvent or, in the judgment of the Commissioner, is in a hazardous financial condition, the board of directors of the mutual insurer, by a majority vote, may request by a petition, as provided under paragraph (2) of this subsection, that the Commissioner waive the requirements concerning notice to, and approval by, policyholders of the planned conversion.
(2)
The petition by the board of directors shall specify:
(i)
the method and basis for issuance of the shares of capital stock of the converted stock insurer to an independent party in connection with an investment by the independent party in an amount sufficient to restore the converted stock insurer to sound financial condition; and
(ii)
if the Commissioner finds that the value of the mutual insurer is insufficient to warrant financial consideration, that the conversion shall be accomplished without financial consideration to past, present, or future policyholders.
(3)
(i)
By written order, the Commissioner may waive the requirements of subsection (b)(2) of this section if the Commissioner finds that the mutual insurer no longer meets statutory requirements with respect to capital, surplus, deposits, or assets.
(ii)
Any finding that results in a waiver under this paragraph shall be made after:
(1)
review of the plan; and
(2)
(A)
an audit of the mutual insurer’s quarterly or annual financial statement; or
(B)
a financial examination of the mutual insurer.
(g)
The Commissioner may adopt regulations to enforce the provisions of this section.
Md. Code Ann., Ins. § 3-121.1 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–121.1LinkCopy Citation
(a)
(1)
In this section the following words have the meanings indicated.
(2)
“Mutual insurance holding company” means a nonstock corporation that:
(i)
is incorporated in the State in accordance with a plan of reorganization adopted and approved under this section; and
(ii)
is the parent of a reorganized stock insurer.
(3)
“Reorganized stock insurer” means the stock corporation into which a mutual insurer is reorganized in accordance with a plan of reorganization adopted and approved under this section.
(b)
Subject to the provisions of this section and in accordance with a plan of reorganization approved by the Commissioner, a mutual insurer may:
(1)
reorganize as a stock insurer; and
(2)
establish a mutual insurance holding company.
(c)
A plan of reorganization shall provide that:
(1)
all of the initial shares of capital stock of the reorganized stock insurer shall be issued to the mutual insurance holding company.
(2)
the mutual insurance holding company shall own a majority of:
(i)
the voting shares of the capital stock of the reorganized stock insurer; and
(ii)
the total market value of all outstanding shares of the capital stock of the reorganized stock insurer.
(3)
the class of capital stock owned by the mutual insurance holding company shall have dividend rights no less favorable than the dividend rights of any other class of stock of the reorganized stock insurer, unless:
(i)
at least two-thirds of the board of directors of the mutual insurance holding company determines that such a requirement is not in the best interests of the members; and
(ii)
the determination of the board of directors is approved by the Commissioner.
(4)
in an initial public offering or initial private equity placement of stock, each eligible member of the mutual insurance holding company shall receive, without payment, nontransferable subscription rights to purchase stock, unless:
(i)
at least two-thirds of the board of directors of the mutual insurance holding company determines that a subscription rights offering is not in the best interests of the members; and
(ii)
the determination of the board of directors is approved by the Commissioner.
(5)
(i)
the following individuals may not acquire, by stock option or any other manner, the legal or beneficial ownership of any class of stock of the reorganized stock insurer for 6 months from the date of an initial public offering or initial private equity placement:
(1)
an officer or director of the mutual insurance holding company;
(2)
an officer or director of the reorganized stock insurer; and
(3)
any relative of an officer or director, who resides with the officer or director.
(ii)
Notwithstanding subparagraph (i) of this paragraph, any individual who is a policyholder of the reorganized stock insurer may exercise subscription rights in accordance with paragraph (4) of this subsection.
(d)
(1)
Each policyholder of the reorganized stock insurer shall be a member of the mutual insurance holding company.
(2)
On the effective date of the reorganization, the membership interests of a policyholder in the mutual insurer shall become nontransferable membership interests in the mutual insurance holding company.
(3)
The plan of reorganization shall provide the terms and conditions under which future policyholders of the reorganized stock insurer shall become members of the mutual insurance holding company.
(4)
At least two-thirds of those members of the board of directors of the mutual insurance holding company who are eligible or qualified to purchase a policy from the reorganized stock insurer, shall be members of the mutual insurance holding company.
(e)
(1)
Except as provided in paragraph (2) of this subsection, each policy of the mutual insurer in effect on the effective date of the reorganization shall remain in effect in accordance with its terms and conditions.
(2)
The following rights and obligations under the policy of the mutual insurer shall be void as of the effective date of the reorganization:
(i)
voting rights of policyholders;
(ii)
except as to the holder of a participating policy, a right of a policyholder to share in the surplus or profits of the insurer; and
(iii)
assessment provisions.
(3)
A reorganized stock insurer shall continue to pay dividends to the holder of a participating policy that was in force on the effective date of the reorganization, in accordance with the methodology or formula used by the mutual insurer before the reorganization.
(f)
The reorganized stock insurer shall have:
(1)
paid-in capital stock not less than the minimum paid-in capital required of a domestic stock insurer that:
(i)
transacts like kinds of insurance business; and
(ii)
started business in the State on the date the mutual insurer received its original certificate of authority in the State; and
(2)
surplus funds not less than 100% of the required capital.
(g)
(1)
The plan of reorganization shall be:
(i)
approved by the vote of a majority of the board of directors of the mutual insurer; and
(ii)
submitted to a meeting of members and approved by the vote of at least three-fourths of the members who vote on the plan of reorganization in person, by proxy, or by mail.
(2)
Notice of the time, place, and purpose of the meeting of members shall be provided in the manner approved by the Commissioner.
(h)
The plan of reorganization shall be submitted to the Commissioner for approval at least 60 days before the effective date of the reorganization, together with:
(1)
the proposed articles of incorporation and bylaws of the mutual insurance holding company;
(2)
the amendments to the articles of incorporation and bylaws of the mutual insurer to reorganize as a stock insurer;
(3)
a 5-year plan of operation for the mutual insurance holding company and the reorganized stock insurer, including any plans for:
(i)
an initial public offering of stock in the reorganized stock insurer; or
(ii)
the transfer of assets or liabilities from the reorganized stock insurer or any subsidiaries of the reorganized stock insurer to the mutual insurance holding company;
(4)
a list of the officers and directors of the mutual insurance holding company and the reorganized stock insurer;
(5)
a biography of each officer and director of the mutual insurance holding company and the reorganized stock insurer; and
(6)
any other documents or information requested by the Commissioner.
(i)
(1)
Unless disapproved by the Commissioner, a plan of reorganization is approved:
(i)
on written notice from the Commissioner; or
(ii)
60 days after the plan and all information required under this section and under any regulations adopted in accordance with this section are submitted to the Commissioner.
(2)
(i)
Subject to subparagraph (ii) of this paragraph, the Commissioner shall approve the plan of reorganization if the plan of reorganization:
(1)
complies with this section; and
(2)
is equitable to the mutual insurer’s members.
(ii)
In approving a plan of reorganization, the Commissioner may impose additional conditions and requirements that the Commissioner determines are necessary to achieve the purposes of this section.
(3)
At the expense of the mutual insurer, the Commissioner may retain a qualified expert who is not a part of the staff of the Commissioner to assist in reviewing the plan of reorganization.
(4)
After written notice to the mutual insurer, the Commissioner may hold a hearing on whether the plan of reorganization:
(i)
complies with this section; and
(ii)
is equitable to the mutual insurer’s members.
(j)
(1)
A mutual insurance holding company is subject to Title 7 of this article.
(2)
The Commissioner may require the mutual insurance holding company to file annual statements with the Commissioner in the same manner as an insurer.
(3)
The articles of incorporation and any amendments to such articles of the mutual insurance holding company are subject to the approval of the Commissioner in the same manner as those of an insurer.
(k)
Compliance with the requirements for a plan of reorganization under this section exempts a mutual insurance holding company from the requirements of Title 7, Subtitle 3 of this article for the purpose of acquiring control of the reorganized stock insurer.
(l)
(1)
A mutual insurance holding company:
(i)
may not dissolve or liquidate except through proceedings under Title 9 of this article or in accordance with § 3–121.2 of this subtitle; and
(ii)
shall be a party to any proceeding under Title 9 of this article involving a reorganized stock insurer that is a subsidiary of the mutual insurance holding company.
(2)
In any proceeding under Title 9 involving a reorganized stock insurer that is a subsidiary of a mutual insurance holding company, the assets of the mutual insurance holding company shall be deemed to be assets of the estate of the reorganized stock insurer for purposes of satisfying the claims of the reorganized stock insurer’s policyholders.
(m)
A mutual insurance holding company may become a stock insurer in accordance with § 3–121 of this subtitle or a mutual insurer in accordance with § 3–121.2 of this subtitle.
(n)
The Commissioner may adopt regulations to enforce this section.
Md. Code Ann., Ins. § 3-121.2 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–121.2LinkCopy Citation
(a)
(1)
In this section the following words have the meanings indicated.
(2)
“Mutual insurance holding company” means a nonstock corporation that:
(i)
is incorporated in the State in accordance with a plan of reorganization adopted and approved under § 3–121.1 of this subtitle; and
(ii)
is the parent of a reorganized stock insurer.
(3)
“Reorganized stock insurer” means the stock corporation into which a mutual insurer is reorganized in accordance with a plan of reorganization adopted and approved under § 3–121.1 of this subtitle.
(b)
A mutual insurance holding company that, directly or indirectly, owns 100% of the capital stock of a reorganized stock insurer may convert its mutual insurance holding company system into a mutual insurer in accordance with a plan of conversion adopted and approved under this section.
(c)
A plan of conversion shall provide that:
(1)
on the effective date of the conversion, the membership interests in the mutual insurance holding company shall become nontransferable membership interests in the converted mutual insurer;
(2)
future policyholders of the converted mutual insurer shall be members of the converted mutual insurer;
(3)
on the effective date of the conversion, each policy of the reorganized stock insurer shall remain in effect and may be endorsed;
(4)
the shares of the reorganized stock insurer and any intermediate stock holding company shall be retired;
(5)
the mutual insurance holding company and any intermediate stock holding company shall be dissolved by filing articles of dissolution with the State Department of Assessments and Taxation; and
(6)
the converted mutual insurer shall have surplus funds that are reasonably adequate for the security of its policyholders.
(d)
(1)
A plan of conversion shall be:
(i)
approved by the vote of a majority of the board of directors of the mutual insurance holding company and any intermediate stock holding company;
(ii)
submitted to a meeting of members of the mutual insurance holding company; and
(iii)
approved by the vote of at least 75% of the members who vote on the plan of conversion in person, by proxy, or by mail.
(2)
Notice of the time, place, and purpose of the meeting of members required under paragraph (1)(ii) of this subsection shall be provided in the manner approved by the Commissioner.
(e)
A plan of conversion shall be submitted to the Commissioner for approval at least 60 days before the effective date of the conversion, together with:
(1)
amendments to the articles of incorporation and bylaws of the reorganized stock insurer necessary to convert to a mutual insurer;
(2)
a 5–year plan of operation for the converted mutual insurer, including any plans for the transfer of assets or liabilities from the mutual insurance holding company or any intermediate holding company to the converted mutual insurer;
(3)
a list of the officers and directors of the converted mutual insurer;
(4)
a biographical affidavit of each officer and director of the converted mutual insurer; and
(5)
any other documents or information requested by the Commissioner.
(f)
(1)
Unless disapproved by the Commissioner, a plan of conversion is approved:
(i)
on written notice from the Commissioner; or
(ii)
60 days after the date that the plan and all information required under this section and under any regulation adopted in accordance with this section are submitted to the Commissioner.
(2)
(i)
Subject to subparagraph (ii) of this paragraph, the Commissioner shall approve the plan of conversion if the plan:
(1)
complies with this section; and
(2)
is equitable to the members of the mutual insurance holding company and the policyholders of the reorganized stock insurer.
(ii)
In approving a plan of conversion, the Commissioner may impose additional conditions and requirements that the Commissioner determines are necessary to achieve the purposes of this section.
(iii)
On written notice to the mutual insurance holding company, the Commissioner may hold a hearing necessary to determine if the plan of conversion meets the requirements of this paragraph.
(3)
The Commissioner may retain, at the expense of the mutual insurance holding company, a qualified expert who is not a part of the Commissioner’s staff to assist in reviewing the plan of conversion.
(g)
The Commissioner may adopt regulations to carry out this section.
Md. Code Ann., Ins. § 3-122 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–122LinkCopy Citation
(a)
Except as otherwise provided in this section, the provisions of the Corporations and Associations Article on the consolidation, merger, and share exchange of stock corporations apply to the consolidations, mergers, and share exchanges of domestic stock insurers and domestic and foreign stock insurers.
(b)
The articles of consolidation, merger, or share exchange of stock insurers must be submitted to the Commissioner for examination and approval before the articles may be accepted for record by the Department of Assessments and Taxation.
(c)
(1)
Before approval of the articles of consolidation or merger, the Commissioner shall examine and review the affairs of the stock insurers involved in the consolidation or merger as the Commissioner finds necessary or desirable.
(2)
The Commissioner may hold a hearing on the proposed consolidation or merger after giving the notice that the Commissioner considers appropriate.
(d)
The Commissioner shall approve the articles of consolidation or merger by written endorsement on them before they become operative if the Commissioner finds that:
(1)
the articles comply with the Code; and
(2)
the policyholders in the successor stock insurer are protected through adequate reserves and assets for losses and claims then anticipated.
(e)
The successor stock insurer shall bear all expenses in connection with proceedings conducted by the Commissioner under this section.
Md. Code Ann., Ins. § 3-123 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–123LinkCopy Citation
(a)
(1)
One or more mutual insurers organized under the laws of any state may consolidate or merge with one or more domestic mutual insurers to form a domestic mutual insurer.
(2)
The successor mutual insurer may continue the corporate existence of one or more of the domestic parties to the consolidation or merger.
(b)
(1)
Mutual insurers consolidating or merging to form a domestic mutual insurer under this section shall enter into a written agreement that:
(i)
prescribes the terms and conditions of the consolidation or merger;
(ii)
states the name of the successor mutual insurer; and
(iii)
includes the successor mutual insurer’s amended certificate of incorporation, which shall contain the provisions required by this article for the organization of a mutual insurer.
(2)
The agreement shall be:
(i)
approved by the vote of a majority of the board of directors of each mutual insurer; and
(ii)
submitted to a meeting of members and approved by vote of at least two-thirds of those members of each mutual insurer who vote on the plan in person, by proxy, or by mail.
(3)
Notice of the time, place, and purpose of the meeting shall be:
(i)
mailed to the members of each mutual insurer not less than 20 days before the date of the meeting; or
(ii)
published at least once a week for 3 successive weeks in:
(1)
a newspaper printed in the county where each mutual insurer has its principal office; and
(2)
a newspaper printed in one of the two largest cities in each state where the successor mutual insurer will be licensed to do business.
(4)
The agreement shall be:
(i)
executed in duplicate original under corporate seal by officers authorized to do so on behalf of each of the mutual insurers; and
(ii)
submitted, with evidence of its approval, to the Commissioner.
(5)
If it appears to the Commissioner that the requirements of this section have been complied with, the Commissioner shall certify approval of the agreement by endorsing it.
(6)
A duplicate original of the agreement shall be filed with the Commissioner and a duplicate original of the agreement shall be delivered to the successor mutual insurer.
(c)
One or more domestic mutual insurers may consolidate or merge under the laws of any state with one or more foreign mutual insurers to form a successor mutual insurer under the laws of one of the foreign states in which one of the mutual insurers has its domicile.
(d)
(1)
Each domestic mutual insurer consolidating or merging with a foreign mutual insurer shall follow the procedure required by subsection (b) of this section.
(2)
Each foreign mutual insurer shall follow the procedure required by the state of its domicile with respect to a consolidation or merger.
(3)
The Commissioner shall require a certificate of approval from the insurance supervisory official of the state of domicile of each foreign insurer that is a party to the agreement certifying that the foreign insurer has complied with the laws of that state on consolidation or merger.
(4)
Parties to the agreement of consolidation or merger need not hold a certificate of authority in this State at the time of consolidation or merger if:
(i)
an application for a certificate of authority has been filed on behalf of the successor insurer, signed by each party to the agreement; and
(ii)
the Commissioner believes the successor insurer:
(1)
meets the applicable solvency requirements; and
(2)
has complied or agreed to comply with the laws of this State on the admission and authorization of foreign insurers.
(e)
(1)
An agreement of consolidation or merger is effective:
(i)
on an effective date, if any, stated in the agreement, if the effective date is after the date of approval by the Commissioner; or
(ii)
on the date on which the last certificate of approval is executed by the insurance supervisory official of the state of domicile of any of the parties to the agreement.
(2)
Within 15 days after a consolidation or merger agreement becomes effective, a copy of the agreement shall be filed of record in a public office where articles of incorporation are required to be filed by the laws of the state of domicile of any party to the agreement.
(f)
After a consolidation or merger, the following conditions apply:
(1)
the successor mutual insurer may require the return of the original policies held by each policyholder in each of the mutual insurers consolidated or merged and may issue replacement policies as the policyholders may be entitled to receive;
(2)
all rights and properties of the parties to the agreement shall accrue to and become the rights and properties of the successor mutual insurer, and the successor mutual insurer shall succeed to and assume all the obligations and liabilities of the consolidated or merged mutual insurers in the same manner as if incurred or contracted by the successor mutual insurer;
(3)
the policyholders of the consolidated or merged mutual insurers shall continue to be subject to all the liabilities, claims, and demands existing against them at or before the consolidation or merger;
(4)
an action or proceeding that is pending when the consolidation or merger occurs and to which any of the consolidated or merged mutual insurers is a party is not abated or discontinued because of the consolidation or merger, but the action or proceeding may be prosecuted to final judgment as if the successor mutual insurer were substituted for any insurer consolidated or merged by order of the court in which the action or proceeding is pending;
(5)
if the successor mutual insurer is a foreign insurer that must comply with the laws of this State on deposits that are required of a foreign insurer, all deposits that were made in this State by any mutual insurer that is a party to the consolidation or merger agreement shall be delivered to the successor mutual insurer; and
(6)
for the purpose of complying with the requirements of law relating to the age of an insurer, the successor mutual insurer is deemed to have the age of the eldest mutual insurer that is a party to the consolidation or merger.
(g)
(1)
When an agreement of consolidation or merger is filed, a certificate shall be filed with the Commissioner that sets forth all fees, commissions, or other compensation or valuable consideration paid or to be paid to any person for securing or promoting the consolidation or merger.
(2)
The certificate shall be:
(i)
signed by the president or a vice-president of each party to the agreement of consolidation or merger;
(ii)
attested by the secretary or an assistant secretary of each party to the agreement; and
(iii)
verified by affidavit.
(3)
A director or officer of any insurer that is a party to a consolidation or merger may not receive, directly or indirectly, any fee, commission, or other compensation or valuable consideration for helping or promoting the consolidation or merger in any manner other than as stated in the agreement of consolidation or merger.
(h)
(1)
Before approval of an agreement of consolidation or merger, the Commissioner shall examine and review the affairs of the mutual insurers that are parties to the agreement as the Commissioner finds necessary or desirable.
(2)
The Commissioner may hold a hearing on the agreement after giving the notice that the Commissioner considers appropriate.
(3)
The Commissioner shall approve the agreement before it becomes operative if the Commissioner finds that:
(i)
the agreement complies with the Code; and
(ii)
the policyholders and members in the successor mutual insurer are protected through adequate reserves and assets for losses and claims then anticipated.
(4)
The successor mutual insurer shall bear all expenses in connection with proceedings conducted by the Commissioner under this subsection.
Md. Code Ann., Ins. § 3-123.1 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–123.1LinkCopy Citation
(a)
Unless otherwise prohibited under this article and subject to the prior approval of the Commissioner, one or more mutual insurers organized under the laws of any state may form a business combination with one or more domestic mutual insurers for the purpose of purchasing reinsurance or other financial services.
(b)
(1)
Mutual insurers forming a business combination under this section shall enter into a written agreement that prescribes the terms and conditions of the business combination.
(2)
The agreement shall be approved by the vote of the majority of the board of directors of each mutual insurer.
(c)
The Commissioner may adopt regulations concerning the formation of business combinations under this section.
Md. Code Ann., Ins. § 3-124 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–124LinkCopy Citation
(a)
A domestic stock insurer may reinsure with another insurer all or substantially all of its insurance in force or a major class of its insurance in force by an agreement of bulk reinsurance.
(b)
(1)
An agreement of bulk reinsurance is not effective unless it is filed with and approved by the Commissioner.
(2)
The Commissioner shall approve the agreement within a reasonable time after it is filed unless the Commissioner finds that the agreement:
(i)
is inequitable to the stockholders of the domestic stock insurer; or
(ii)
would substantially reduce the protection of or service to the policyholders of the domestic stock insurer.
(3)
If the Commissioner does not approve the agreement, the Commissioner shall notify the domestic stock insurer in writing of the disapproval and specify the reasons for disapproval.
Md. Code Ann., Ins. § 3-125 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–125LinkCopy Citation
(a)
After compliance with this section, a domestic mutual insurer may reinsure with a stock insurer or mutual insurer all or substantially all of its insurance in force or a major class of its insurance in force by an agreement of bulk reinsurance.
(b)
(1)
An agreement of bulk reinsurance is not effective unless it is filed with and approved by the Commissioner in writing after a hearing.
(2)
The Commissioner shall approve the agreement within a reasonable time after it is filed if the Commissioner finds that the agreement:
(i)
is equitable to each domestic insurer involved; and
(ii)
would not reduce substantially the protection of or service to the policyholders of each domestic insurer involved.
(3)
If the Commissioner does not approve the agreement, the Commissioner shall notify each insurer involved in writing of the disapproval and specify the reasons for disapproval.
(c)
(1)
In accordance with reasonable notice and procedure approved by the Commissioner, the plan and agreement for bulk reinsurance must be approved by vote of at least two-thirds of each domestic mutual insurer’s members who vote on the agreement at meetings of the members called for that purpose.
(2)
For a life insurer, the right to vote may be limited to members with policies, other than term or group policies, that have been in force for more than 1 year.
(d)
(1)
If the agreement is for reinsurance of a mutual insurer in a stock insurer, the agreement must provide for payment in cash to each member of the insurer who is entitled to payment as on conversion of a mutual insurer to a stock insurer under § 3-121 of this subtitle.
(2)
Each member shall be paid the member’s equity in the insurance that is reinsured as determined under a fair formula approved by the Commissioner.
(3)
Each member’s equity shall be based on the member’s equity in the reserves, assets, whether or not admitted assets, and surplus, if any, of the mutual insurer to be taken over by the stock insurer.
Md. Code Ann., Ins. § 3-126 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–126LinkCopy Citation
(a)
(1)
A foreign insurer authorized to engage in the insurance business in the State may become a domestic insurer by:
(i)
complying with all requirements of the law relating to the formation and organization of a domestic insurer; and
(ii)
designating its principal place of business in the State.
(2)
On becoming a domestic insurer, the insurer:
(i)
is entitled to the certificates and licenses to transact insurance business in this State that are issued to domestic insurers;
(ii)
shall be recognized in all respects as an insurer formed under the laws of this State as of the date of authorization as an insurer in its original domiciliary state; and
(iii)
is subject to the authority and jurisdiction of the State.
(b)
(1)
When a foreign insurer authorized to engage in the insurance business in this State transfers its corporate domicile to this State or another state by merger, consolidation, or other lawful method, the certificate of authority, appointments of agents, rates, and other issues that are subject to the Commissioner’s approval and that are in existence at the time of the transfer remain in effect after the transfer if the insurer at all times remains qualified to engage in the insurance business in this State.
(2)
All outstanding policies of a transferring insurer remain in effect and need not be endorsed with the new name of the insurer or the new domiciliary and location of the insurer unless the Commissioner so orders.
(3)
A transferring insurer:
(i)
may file new policy forms with the Commissioner on or before the effective date of the transfer; or
(ii)
if allowed by and under conditions approved by the Commissioner, may use any existing policy form previously filed with the Commissioner with appropriate endorsements.
(4)
A foreign insurer that transfers its domicile to another state shall:
(i)
notify the Commissioner of the details of the proposed transfer; and
(ii)
file promptly with the Commissioner any resulting amendments to corporate documents and other items on file with the Commissioner.
Md. Code Ann., Ins. § 3-127 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–127LinkCopy Citation
(a)
(1)
In this section the following words have the meanings indicated.
(2)
“Offer to sell” has the meaning stated in the Maryland Securities Act.
(3)
“Register” means to register securities with the Division of Securities in the Office of the Attorney General in accordance with §§ 11–502 and 11–504 of the Corporations and Associations Article.
(4)
“Sale” has the meaning stated in the Maryland Securities Act.
(b)
(1)
The filing requirements of subsections (c) and (d) of this section apply to a person that engages in, proposes to engage in, or assists in the promotion or formation of:
(i)
a domestic insurer;
(ii)
an insurance holding corporation; or
(iii)
a corporation that finances:
(1)
a domestic insurer or the production of its business; or
(2)
an insurance holding corporation or the production of its business.
(2)
This section does not apply to a person that is or will be an affiliate of an authorized insurer that is a member of an insurance holding company registered with the Commissioner under § 7–601 of this article.
(c)
Within 5 days after a registration is filed with the Division of Securities, a person that is required to register a proposed sale or offer to sell securities under the Maryland Securities Act shall file with the Commissioner a copy of that registration.
(d)
At least 30 days before the proposed sale or offer to sell securities, a person that is exempt under § 11–602(9) and (10) of the Corporations and Associations Article from the registration requirements of §§ 11–502 and 11–504 of the Corporations and Associations Article shall file with the Commissioner the information otherwise required by § 11–502 or § 11–504 of the Corporations and Associations Article.
(e)
(1)
If the Commissioner determines that a person has engaged in or is about to engage in an act or practice that violates this section, the Commissioner, without notice and before a hearing, may issue and cause to be served on the person an order to cease and desist from engaging in the acts for which filing is required under this section.
(2)
(i)
Unless postponed by mutual consent of the parties, the Commissioner shall hold a hearing within 30 days after the date of the order.
(ii)
The Commissioner shall provide notice of the hearing to each party.
(f)
The Commissioner has the enforcement powers listed in §§ 2–201 and 2–203 of this article.
(g)
(1)
In addition to any penalty otherwise applicable under this article, the Commissioner may impose a civil penalty not exceeding $500 for each violation of this section.
(2)
Each day a violation of this section continues is a separate violation.
Md. Code Ann., Ins. § 3-128 (2026)
Title 3. Kinds of Insurers
Subtitle 1. Stock Insurers and Mutual Insurers
§ 3–128LinkCopy Citation
(a)
In this section, “reciprocating state” means a state under the laws of which a prohibition on solicitation similar to that imposed against domestic insurers under this section is imposed on and enforced against insurers domiciled in that state.
(b)
A domestic insurer may not knowingly solicit insurance business in a reciprocating state in which the domestic insurer is not licensed as an authorized insurer.
(c)
This section does not prohibit advertising through publication or by radio, television, or other broadcasts originating outside the reciprocating state if:
(1)
the insurer is licensed to engage in the insurance business in a majority of the states in which the advertising is disseminated; and
(2)
the advertising is not specifically directed to residents of the reciprocating state.
(d)
This section does not prohibit:
(1)
insurance covering persons or risks located in a reciprocating state under contracts solicited and issued in states in which the insurer is then licensed; or
(2)
insurance effectuated by the insurer as an unauthorized insurer under the laws of the reciprocating state.
(e)
If the Commissioner finds, after a hearing, that a domestic insurer has violated this section, the Commissioner shall suspend or revoke the certificate of authority of the domestic insurer.