Except as otherwise provided in this article, a person may not act as an insurer and an insurer may not engage in the insurance business in the State unless the person has a certificate of authority issued by the Commissioner.
An insurer may not have or maintain in this State an office, representative, or other facility to solicit or service any kind of insurance in another state unless the insurer is then authorized to engage in the same kind of insurance business in this State.
A certificate of authority is not required for an insurer to engage in:
transactions that relate to policies that were lawfully written in the State, or the liquidation of assets and liabilities of the insurer, including the collection of premiums on existing policies, resulting from former authorized operations of the insurer in the State;
transactions that occur after issuance of a policy that covers only subjects of insurance not resident, located, or expressly to be performed in the State at the time of issuance, or that covers property in the course of transportation by land, air, or water to, from, or through the State, including any incidental preparation and storage, and the coverage was lawfully solicited, written, and delivered outside the State;
transactions that relate to surplus lines coverages lawfully written under Title 3, Subtitle 3 of this article; or
reinsurance transactions, except as to domestic reinsurers.
To engage in the insurance business in the State, an insurer must:
be in compliance with its charter powers and with this article; and
be an incorporated stock insurer, incorporated mutual insurer, or reciprocal insurer.
An insurer may not be authorized to engage in the insurance business in the State if the insurer has or uses a name that is so similar to the name of an insurer already so authorized as to tend to cause uncertainty or confusion or that tends to deceive or mislead about the type of organization of the insurer.
A foreign insurer may not be authorized to engage in the insurance business in the State if:
the voting control or ownership of the foreign insurer is held in whole or substantial part by a government or governmental unit; or
the foreign insurer is operated for or by a government or governmental unit.
For purposes of this subsection, membership in a mutual insurer, subscribership in a reciprocal insurer, ownership of stock of an insurer by the alien property custodian or similar official of the United States, or supervision of an insurer by a public insurance supervisory authority are not considered to be ownership, control, or operation of the insurer.
In this subsection, “Lloyds underwriters” means an aggregation of individuals who, under a common name, engage in the insurance business for profit through an attorney in fact who has authority, within the limits specified in the power of attorney, to obligate the underwriters severally on insurance contracts made or issued by the attorney in fact, in the name of the aggregation of individuals, to and with any person insured.
A Lloyds underwriter may not be organized in the State and a foreign or alien Lloyds underwriter may not be authorized to engage in the insurance business in the State.
This subsection does not restrict the right of insurers to place surplus lines coverages in and to cede reinsurance to foreign or alien Lloyds underwriters, if the surplus lines and reinsurance transactions are otherwise allowed under this article.
Capital and surplus requirements for an insurer shall be based on all the kinds of insurance business that the insurer transacts or will transact, regardless of where the insurance business is transacted.
To qualify for an initial certificate of authority to engage in one kind or a combination of kinds of insurance business, an insurer must have and maintain the capital stock and surplus requirements of:
§§ 4–104 and 4–105 of this subtitle, for a stock insurer;
Title 3, Subtitle 1 of this article, for a mutual insurer;
Title 3, Subtitle 2 of this article, for a reciprocal insurer;
Title 8, Subtitle 4 of this article, for a fraternal benefit society; and
Title 14, Subtitle 1 of this article, for a nonprofit health service plan.
In addition to any other capital and surplus requirements of this article, each insurer’s assets and surplus as regards policyholders shall be reasonable in relation to the insurer’s outstanding liabilities and adequate to its financial needs.
In determining whether an insurer’s assets and surplus as regards policyholders are reasonable in relation to the insurer’s outstanding liabilities and adequate to its financial needs, the following factors, among others, shall be considered:
the size of the insurer as measured by its assets, capital and surplus, reserves, premium writings, insurance in force, and other appropriate criteria;
the extent to which the insurer’s business is diversified among the several lines of insurance;
the number and size of risks insured in each line of insurance;
the geographical dispersion of the insurer’s insured risks;
the nature and extent of reinsurance of the insurer’s risks;
the quality, diversification, and liquidity of the insurer’s investment portfolio;
the recent past and projected future trends in the size of the insurer’s surplus as regards policyholders;
the surplus as regards policyholders maintained by comparable insurers; and
the financial position of the insurer, after excluding from assets investments in and other transactions with persons that directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with another person.
The provisions of this subtitle shall be supplemented by the requirements of Subtitle 3 of this title.
Except as otherwise provided in this article, to qualify for a certificate of authority to engage in one kind of insurance business, an insurer that started business in the State on or before June 30, 1965, must have and maintain paid–in capital stock with a fixed nominal or par value in an amount not less than that applicable under the following schedule:
Kind of Minimum Capital
Insurance Business Stock Required
life insurance including annuities and health $200,000
insurance ……………………………………………
health insurance …………………………………… $100,000
property insurance and marine insurance other $250,000
than wet marine and transportation insurance…
title insurance ………………………………………… $250,000
wet marine and transportation insurance ………… $250,000
casualty insurance, not including vehicle liability $250,000
insurance for workers’ compensation insurance …
vehicle liability insurance …………………………… $250,000
workers’ compensation insurance …………………… $250,000
surety insurance ………………………………………… $250,000
To qualify for a certificate of authority to engage in two or more kinds of insurance business, an insurer that started business in the State on or before June 30, 1965, must have paid–in capital stock with a fixed nominal or par value in an amount not less than the lesser of:
the combined sum of the capital stock required for each of the kinds of insurance business to be authorized; or
$500,000.
Except as otherwise provided in this article, to qualify for a certificate of authority to engage in one kind of insurance business, an insurer that started business in the State during the period from July 1, 1965, to June 30, 1991, both inclusive, must have and maintain paid–in capital stock with a fixed nominal or par value in an amount not less than that applicable under the following schedule:
Kind of Minimum Capital
Insurance Business Stock Required
life insurance including annuities and health $500,000
insurance ……………………………………………
health insurance …………………………………… $250,000
property insurance and marine insurance other $250,000
than wet marine and transportation insurance…
title insurance ………………………………………… $250,000
wet marine and transportation insurance ………… $250,000
casualty insurance, not including vehicle liability $250,000
insurance for workers’ compensation insurance …
vehicle liability insurance …………………………… $250,000
workers’ compensation insurance …………………… $250,000
surety insurance ………………………………………… $250,000
To qualify for a certificate of authority to engage in two or more kinds of insurance business, an insurer that started business in the State during the period from July 1, 1965, to June 30, 1991, both inclusive, must have paid–in capital stock with a fixed nominal or par value in an amount not less than $500,000.
Except as otherwise provided in this article, to qualify for a certificate of authority to engage in one kind of insurance business, an insurer that started business in the State on or after July 1, 1991, must have and maintain paid–in capital stock with a fixed nominal or par value in an amount not less than that applicable under the following schedule:
Kind of Minimum Capital
Insurance Business Stock Required
life insurance including annuities……………… $1,500,000
health insurance …………………………………… $750,000
property insurance and marine insurance other $750,000
than wet marine and transportation insurance…
title insurance ………………………………………… $750,000
wet marine and transportation insurance ………… $750,000
casualty insurance, not including vehicle liability $250,000
insurance for workers’ compensation insurance …
vehicle liability insurance …………………………… $750,000
workers’ compensation insurance …………………… $750,000
surety insurance ………………………………………… $750,000
To qualify for a certificate of authority to engage in two or more kinds of insurance business, an insurer that started business in the State on or after July 1, 1991, must have paid–in capital stock with a fixed nominal or par value in an amount not less than $1,500,000.
On or after July 1, 2001, an insurer that qualified for a certificate of authority to engage in any kind of insurance business on or before June 30, 1991, must have and maintain paid–in capital stock with a fixed nominal or par value in an amount not less than 150% of that required of an insurer authorized to start insurance business in the State on June 30, 1991.
Notwithstanding the provisions of § 4–104 of this subtitle, a title insurer domiciled in this State shall have and maintain paid–in capital stock with a fixed nominal or par value in the amount of:
$500,000 as of July 1, 2010;
$625,000 as of July 1, 2011; and
$750,000 as of July 1, 2012, and each July 1 thereafter.
In addition to the minimum capital stock required by § 4-104 of this subtitle, to qualify for an initial certificate of authority to engage in one kind or a combination of kinds of insurance business, an insurer must have surplus assets or funds in an amount not less than 150% of the minimum capital stock required.
For authority to continue in the insurance business, in addition to the minimum capital stock required by § 4-104 of this subtitle, an insurer that started business in the State on or after July 1, 1966, must maintain surplus assets or funds in an amount not less than 100% of the minimum capital stock required.
For authority to continue in the insurance business, in addition to the minimum capital stock required by § 4-104 of this subtitle, an insurer that started business in the State on or before June 30, 1966:
must maintain surplus assets or funds in an amount not less than 50% of the minimum capital stock required; and
if authorized to write vehicle liability insurance, must maintain surplus assets or funds in an amount not less than $300,000, whether or not the insurer also is authorized to write other kinds of insurance.
The combined amount of surplus required by items (i) and (ii) of paragraph (1) of this subsection may not exceed the amount of surplus required by subsection (b) of this section of an insurer authorized on or after July 1, 1966, to transact the same kinds of insurance business.
Notwithstanding the provisions of § 4–105 of this subtitle, a title insurer domiciled in this State shall have and maintain minimum surplus in the amount of:
$500,000 as of July 1, 2010;
$625,000 as of July 1, 2011; and
$750,000 as of July 1, 2012, and each July 1 thereafter.
Except as provided in subsections (b) and (c) of this section, to qualify for a certificate of authority, an insurer shall deposit and maintain in trust with the Treasurer, for the protection of the insurer’s policyholders and creditors, an amount not less than $100,000 in:
cash; or
government securities eligible for the investment of capital funds of domestic insurers as specified in § 5-701(b) of this article.
For a foreign insurer, instead of all or part of the deposit required by subsection (a) of this section, the Commissioner shall accept the current certificate of the insurance supervisory official of another state showing that a like deposit by the foreign insurer is being maintained:
in public custody or in a depository approved by the official; and
in trust for protection of the policyholders and creditors of the foreign insurer in the United States.
For an alien insurer, instead of all or part of the deposit required by subsection (a) of this section, the Commissioner shall accept evidence satisfactory to the Commissioner that the alien insurer maintains in the United States assets available for discharge of its insurance obligations in the United States:
in public depositories, or in trust institutions in the United States approved by the Commissioner; and
in an amount not less than the outstanding liabilities of the insurer arising out of its insurance business in the United States, plus an amount equal to the deposit required under this section for other insurers requesting authority to engage in like kinds of insurance business.
On the form that the Commissioner provides, each insurer applying for a certificate of authority must appoint the Commissioner as attorney for service of process issued against the insurer in the State.
The appointment:
is irrevocable;
binds the insurer and any successor in interest or successor to the assets and liabilities of the insurer; and
remains in effect as long as there is in force in the State a contract made by the insurer or an obligation arising from a contract made by the insurer.
An applicant for an initial certificate of authority shall:
file with the Commissioner an application on the form that the Commissioner provides;
pay to the Commissioner the applicable fees required by § 2-112 of this article; and
file with the Commissioner:
a certified copy of its articles of incorporation with all amendments;
a certified copy of its bylaws with all amendments;
a copy of its annual statement as of the immediately preceding December 31;
for a foreign insurer or alien insurer, a copy of the report of last examination, if any, made of the insurer certified by the insurance supervisory official of the state of domicile of the foreign insurer or the state of entry into the United States of the alien insurer;
for a foreign insurer or alien insurer, a certificate of the insurance supervisory official of the state or country of domicile or state of entry into the United States of the insurer showing that the insurer is authorized to transact the kinds of insurance business proposed to be transacted in this State;
for an alien insurer, a copy of the appointment and authority of its United States manager;
a certificate evidencing a deposit in accordance with § 4-106 of this subtitle; and
any other information and documents that the Commissioner considers necessary to protect policyholders or ensure compliance with this article.
Within a reasonable time after the filing of a completed application for an initial certificate of authority, the Commissioner shall:
issue an appropriate certificate of authority; or
disapprove the application and state the grounds for disapproval.
On request of an insurer, the Commissioner may issue a certificate of authority limited to a particular type of insurance or insurance coverage within the scope of a kind of insurance.
A certificate of authority shall state the kind or combination of kinds of insurance business that the insurer is authorized to transact in the State.
Except as otherwise provided in this section, a certificate of authority authorizes an insurer to engage in one kind or a combination of kinds of insurance business.
Subject to paragraph (2) of this subsection, an insurer authorized to engage in the business of life insurance may also write annuity contracts but the insurer is not authorized to engage in any other kind of insurance business except health insurance.
The Commissioner shall continue to authorize an insurer authorized to engage in the business of life insurance to engage in other kinds of insurance business, in addition to annuities and health insurance, if the insurer:
was authorized to engage in one kind or a combination of kinds of insurance business in addition to life insurance, health insurance, and annuities immediately before December 31, 1963; and
is otherwise qualified to engage in that kind or combination of kinds of insurance business.
A reciprocal insurer may not engage in the business of life insurance or health insurance except as supplementary coverage in policies of liability insurance.
A certificate of authority expires on the first June 30 after its effective date unless it is renewed as provided in this section.
At least 2 months before a certificate of authority expires, the Commissioner shall mail to the holder of the certificate of authority, at the last known address of the holder, or by electronic means in accordance with § 2–116 of this article:
a renewal application form; and
a notice that states:
the date on which the current certificate of authority expires;
the date by which the Commissioner must receive the renewal application for the renewal to be issued and mailed before the certificate of authority expires; and
the amount of the renewal fee.
Before a certificate of authority expires, the holder of the certificate of authority may renew it for an additional 1-year term, if the holder:
otherwise is entitled to a certificate of authority;
files with the Commissioner a renewal application on the form that the Commissioner provides; and
pays to the Commissioner the appropriate renewal fee required by § 2-112 of this article.
The Commissioner shall renew the certificate of authority of each holder who meets the requirements of this subtitle.
If a certificate holder pays the applicable renewal fee before the certificate of authority expires, the certificate of authority remains in effect until the Commissioner renews or refuses to renew the certificate of authority.
An insurer shall mail, or send by electronic means in accordance with § 2–116 of this article, a renewal application and the applicable renewal fee on or before June 30. An insurer that fails to renew its certificate of authority on or before June 30 may forfeit:
$500 for each day from July 1 through July 10;
$1,000 for each day from July 11 through July 31; and
$5,000 for each day after July 31.
In addition to the provisions imposed under paragraph (1) of this subsection, an insurer that fails to renew its certificate of authority on or before June 30 in the previous year shall:
renew its certificate of authority on or before June 1 of the current year; and
forfeit $3,000 if the insurer fails to renew its certificate of authority on or before June 30 in the current year.
In addition to the monetary penalties imposed under this subsection, on July 1 of each year, for each insurer that fails to file its renewal application and continuation fee on or before June 30, the Commissioner may:
order that the insurer cease and desist from engaging further from the writing of insurance in this State in accordance with § 4–114 of this subtitle; or
issue an order to require the insurer to show cause why it should be allowed to continue to engage in the insurance business in the State.
In determining the amount of any financial penalty or forfeiture to be imposed under this section, the Commissioner:
shall consider the following factors:
the seriousness of the violation;
the good faith of the violator;
the violator’s history of previous violations;
the deleterious effect of the violation on the public and the insurance industry; and
the assets of the violator; and
may determine the appropriate amount of the penalty or forfeiture.
The Commissioner shall deny a certificate of authority to an applicant or refuse to renew, suspend, or revoke a certificate of authority if:
the action is required by any provision of this article;
the insurer no longer meets the requirements for the certificate of authority because of a deficiency in assets or any other reason;
the business of the insurer is fraudulently conducted;
the insurer is insolvent, or its assets are not sufficient for carrying on its business;
the insurer fails to pay taxes on premiums required under this article;
the insurer willfully fails to provide the Commissioner with required information about medical malpractice insurance issued by the insurer in this State or any other state;
the issuance or renewal of a certificate of authority is contrary to the public interest;
the Commissioner finds that the principal management personnel of the insurer is:
untrustworthy or not of good character; or
so lacking in insurer managerial experience as to make the proposed operation hazardous to the insurance–buying public or to the insurer’s stockholders; or
the Commissioner has good reason to believe that the insurer is affiliated, directly or indirectly, through ownership, control, management, reinsurance transactions, or other insurance or business relations with a person whose business operations are or have been marked by the manipulation of assets, accounts, or reinsurance or by bad faith, to the detriment of insureds, stockholders, or creditors.
The Commissioner may deny a certificate of authority to an applicant or, subject to the hearing provisions of Title 2 of this article, refuse to renew, suspend, or revoke a certificate of authority if the applicant or holder of the certificate of authority:
violates any provision of this article other than one that provides for mandatory denial, refusal to renew, suspension, or revocation for its violation;
knowingly fails to comply with a regulation or order of the Commissioner;
is found by the Commissioner to be in unsound condition or in a condition that renders further transaction of insurance business hazardous to the insurer’s policyholders or the public;
is engaged in writing policies in a jurisdiction in which it operates on a premium basis that the Commissioner finds to be insufficient, insecure, or impracticable so as to endanger the solvency of the insurer;
refuses or delays payment of amounts due claimants without just cause;
refuses to be examined or to produce its accounts, records, or files for examination by the Commissioner when required;
refuses to provide additional information that the Commissioner considers advisable in considering an application for renewal of the certificate of authority;
fails to pay a final judgment against it in the State within 30 days after the judgment becomes final;
is affiliated with and under the same general management or interlocking directorate or ownership as another insurer that transacts direct insurance in the State without having a certificate of authority to do so, except as allowed to a surplus lines insurer under Title 3, Subtitle 3 of this article;
is found by the Commissioner to have participated, with or without the knowledge of an insurance producer, in selling motor vehicle insurance without an actual intent to sell the insurance, as evidenced by a persistent pattern of filing certificates of insurance together with or closely followed by cancellation notices for the insurance;
except as allowed under § 10–103(c) of this article, is found by the Commissioner to have knowingly participated with a person, acting as an insurance producer, that does not have an appointment from the insurer in accepting insurance contracts that the person has sold, solicited, or negotiated, if committed with sufficient frequency to indicate a general business practice;
has had a certificate of authority revoked or suspended by the insurance regulatory authority of another state;
has violated the provisions of Title 6.5 of the State Government Article;
fails to provide to the Commissioner or an insurance producer any information required by § 10–118 of this article regarding the termination of an appointment of the insurance producer; or
in providing information required by or provided pursuant to § 10–118 of this article regarding the termination of an appointment of an insurance producer, makes an inaccurate statement with actual malice.
On refusal to renew, suspension, or revocation of an insurer’s certificate of authority, the Commissioner immediately shall notify:
the insurer; and
each insurance producer of the insurer in the state of record in the office of the Commissioner.
The refusal to renew, revocation, or suspension of a certificate of authority automatically suspends or revokes the appointment of each insurance producer of the insurer in the State.
The Commissioner shall state in the notice to each insurance producer under paragraph (1) of this subsection that the appointment of the insurance producer has been suspended or revoked.
The Commissioner may publish notice of the revocation of a certificate of authority in a newspaper published in the State.
Instead of or in addition to suspending or revoking a certificate of authority, the Commissioner may:
impose on the holder a penalty of not less than $100 but not more than $125,000 for each violation of this article; and
require the holder to make restitution to any person who has suffered financial injury because of the violation of this article including requiring the holder to:
fulfill any obligation under the policies or contracts of the holder that the holder failed to fulfill in violation of this article; or
pay a claim or an amount due under an insurance policy or contract not paid in violation of this article.
The Commissioner shall adopt regulations to:
establish standards for the imposition of a penalty under subsection (d) of this section; and
carry out the provisions of subsection (b)(11) of this section.
Without notice and before hearing, the Commissioner may issue and have served on an insurer an order requiring the insurer immediately to cease and desist from writing insurance in the State if it appears to the Commissioner that:
the insurer is:
conducting its business and affairs in a manner that threatens to make it insolvent or that is hazardous to its policyholders, creditors, or the general public; or
engaged in an act, practice, or transaction that constitutes grounds making the insurer subject to conservation or liquidation proceedings; and
irreparable loss and injury to the property and business of the insurer or the general public has occurred or may occur unless the Commissioner acts immediately.
When an order is served on an insurer under subsection (a) of this section, the Commissioner shall issue and also serve on the insurer notice of a hearing to be held at a place and time not later than 5 days after the date of the order.
If the insurer waives the right to a hearing within 5 days after the date of the order, the hearing shall be held within 30 days after service of the order.
In this section the following words have the meanings indicated.
“Domestic reinsurer” means an authorized insurer that:
operates solely as a reinsurer, as defined in § 5–901 of this article;
does not have any gross direct written premium; and
is domiciled in the State.
“Financial guaranty insurance company” means an insurer that derives at least 90% of its gross written premium from the business of financial guaranty insurance and financial guaranty reinsurance.
“Financial guaranty reinsurance company” means an insurer that derives at least 90% of its gross written premium from the business of financial guaranty reinsurance.
Except as provided in paragraph (2) of this subsection, a domestic insurer may not move its home or executive office out of the State without notice to and approval by the Commissioner.
A financial guaranty reinsurance company or financial guaranty insurance company that became domiciled in the State on or before December 31, 1993, is not required to have an office in the State.
A domestic reinsurer that became domiciled in the State on or before December 31, 1995, is not required to have an office in the State.
A domestic insurer, including a reciprocal insurer, fraternal benefit society, or nonprofit health service plan, with its home or executive office in the State shall keep in the State:
its general ledger accounting records; and
all of its assets except:
real property lawfully owned by the insurer and located outside of the State, personal property appurtenant to the real property, or mortgages on the real property;
property of the insurer that is customary and necessary to the operation of the insurer’s branch offices outside of the State;
securities deposited in a jurisdiction outside of the State as a condition of authority to transact business in that jurisdiction or securities deposited in connection with obtaining surety bonds;
securities held either by the insurer or in compliance with regulations adopted by the Commissioner; and
transactions or securities involved in transactions authorized by § 5–511(n) and (o) of this article or any other transactions or securities involved in transactions exempted by the Commissioner from this paragraph.
A financial guaranty reinsurance company or financial guaranty insurance company that became domiciled in the State on or before December 31, 1993, and that does not have its home or executive office in the State:
shall keep in the State its entire assets as required by paragraph (1)(ii) of this subsection; and
may keep its general ledger accounting records outside the State if it makes those records available in the State to the Commissioner within 2 business days after being requested to do so by the Commissioner.
A domestic reinsurer that became domiciled in the State on or before December 31, 1995, and that does not have its home or executive office in the State:
shall keep in the State its entire assets as required by paragraph (1)(ii) of this subsection; and
may keep its general ledger accounting records outside the State if it makes those records available in the State to the Commissioner within 2 business days after being requested to do so by the Commissioner.
This section does not prohibit the holding of funds or transmission of securities outside of the State to:
secure or record title to the securities; or
sell, lend, buy, redeem, or exchange the securities or alter the provisions of the securities.
On or before March 1 of each year, unless the Commissioner extends the time for good cause, each authorized insurer shall file with the Commissioner a complete statement of its financial condition, transactions, and affairs for the immediately preceding calendar year.
The annual statement shall:
be in the form and have the content approved for current use by the National Association of Insurance Commissioners or its successor organization; and
contain any additional information that the Commissioner requires.
Unless the Commissioner requires otherwise, the statement of an alien insurer shall relate only to its transactions and affairs in the United States.
Unless the Commissioner extends the time for filing, an authorized insurer that fails to file an annual statement on or before March 10 shall pay a penalty of:
$100 for each day from March 1 to March 10, both inclusive; and
$150 for each day from March 11 to the day before the Commissioner receives the statement, both inclusive.
At any time, the Commissioner may require an authorized insurer to file an interim statement containing the information that the Commissioner considers necessary.
Except as provided in subsection (d) of this section, on or before June 1 of each year, an authorized insurer shall file with the Commissioner an audited financial report for the immediately preceding calendar year.
The authorized insurer shall have the report prepared by an independent certified public accountant.
The Commissioner may:
set requirements for the form and content of the report; and
for good cause, extend the time for filing the report.
Unless the Commissioner extends the time for filing, an authorized insurer that fails to file an audited financial report on or before June 10 shall pay a penalty of:
$100 for each day from June 1 to June 10, both inclusive; and
$150 for each day from June 11 to the day before the Commissioner receives the report, both inclusive.
With 90 days’ advance notice, the Commissioner may require an authorized insurer to file an audited financial report earlier than the date specified in subsection (c) of this section.
At the time of payment, if the payment has been specifically authorized by the claimant’s attorney, an insurer shall provide written notice to a third party claimant of payment of $2,000 or more in settlement of a third party liability claim for bodily injury if:
the claimant is an individual; and
the payment is delivered to the claimant’s attorney by check, draft, or other means.
The notice required by subsection (a) of this section shall be sent by regular mail no more than 5 working days after payment is delivered under subsection (a)(2) of this section to the claimant at the last known address of the claimant.
The insurer may provide notice to the claimant by a copy of the letter of transmittal to the claimant’s attorney.
This section may not be construed to create:
a cause of action for any person against an insurer based on the insurer’s failure to provide the notice required by this section; or
a defense for any party against a cause of action based on the insurer’s failure to provide the notice required by this section.
The Commissioner may not recognize any person as a qualified independent certified public accountant unless the person:
is in good standing:
with the Maryland State Board of Public Accountancy; and
with the appropriate state board of accountancy of any other state in which the accountant is licensed to practice; or
in the case of a Canadian or British accountant, is a chartered accountant.
Except as otherwise provided in this section, an independent certified public accountant shall be recognized as qualified as long as the accountant conforms to:
for any certified public accountant not licensed in this State, the standards of the accountancy profession, as contained in the Code of Professional Ethics of the American Institute of Certified Public Accountants; or
Title 2 of the Business Occupations and Professions Article; and
the regulations and rules of professional conduct established by the Maryland State Board of Public Accountancy.
A partner in an accounting firm responsible for preparing an audited financial report under § 4–116 of this subtitle for an insurer may not act in that capacity for more than 5 consecutive years for the same insurer.
If a partner in an accounting firm responsible for preparing an audited financial report under § 4–116 of this subtitle for an insurer exceeds 5 consecutive years in that capacity, the partner shall be disqualified from acting in the same or similar capacity for that insurer or its insurance subsidiaries or affiliates for a period of not less than 5 consecutive years.
An insurer may apply to the Commissioner for an exception from the prohibition of paragraph (1) of this subsection on the basis of unusual circumstances.
In determining whether unusual circumstances exist that would justify the granting of an exception, the Commissioner may consider:
the number of partners in the accounting firm currently used by the insurer, the expertise of the partners in that firm, and the number of insurance clients of that firm;
the premium volume of the insurer; and
the number of jurisdictions in which the insurer transacts business.
The Commissioner may not recognize as a qualified independent certified public accountant, or accept any audited financial report prepared in whole or in part by, any individual who:
has been convicted of fraud, bribery, a violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961-1968, or any dishonest conduct or practices under federal or State law;
has violated the insurance laws of this State with respect to any audited financial reports previously submitted by that individual;
has violated any provision of Title 2 of the Business Occupations and Professions Article or any regulation or rule of professional conduct established by the State Board of Public Accountancy; or
has demonstrated a pattern or practice of failing to detect or disclose material information in any audited financial reports previously submitted by that individual.
Subject to §§ 2-210 through 2-215 of this article, the Commissioner may hold a hearing to determine whether a certified public accountant is qualified.
After considering the evidence presented at the hearing, the Commissioner shall rule on whether the accountant is qualified for purposes of expressing an opinion on the financial statements in the audited financial report required under § 4-116 of this subtitle.
If the Commissioner finds that the accountant is not qualified, the Commissioner shall require the insurer to replace the accountant with another who is qualified as provided under this section.