# Insurance (GIN)

## Title 5. Assets, Liabilities, Reserves, and Investments of Insurers

### Subtitle 10. Limitation of Risk

#### Section 5-1001

(a) In this subtitle the following words have the meanings indicated.

(b) "Subject of insurance" includes, as to insurance against fire and hazards other than windstorm, earthquake, or other catastrophe hazards, all properties that:

  (1) are insured by the same insurer; and

  (2) customarily are considered by underwriters to be subject to loss or damage from the same fire or the same occurrence of the hazard insured against.

(c) "Surplus to policyholders" means an insurer's capital, surplus, and voluntary reserves.

#### Section 5-1002

(a) This subtitle does not apply to:

  (1) life insurance;

  (2) health insurance;

  (3) annuities;

  (4) title insurance;

  (5) wet marine and transportation insurance;

  (6) workers' compensation insurance;

  (7) employer's liability coverage; or

  (8) a policy or type of coverage as to which the maximum possible loss to the insurer cannot be readily ascertained when the policy is issued or the coverage is provided.

(b) As to alien insurers, this subtitle applies only to risks and surplus to policyholders of an alien insurer's United States branch.

#### Section 5-1003

(a)

  (1) Subject to Sec. 5-1004 of this subtitle and except as provided under Sec. 5-1005 of this subtitle, an insurer may not retain a risk on any one subject of insurance, whether located or to be performed in the State or outside of the State, in an amount exceeding 10% of the insurer's surplus to policyholders.

  (2) An insurer's surplus to policyholders shall be determined at the time a risk is assumed from the more recent of:

    (i) the last sworn statement of the insurer on file with the Commissioner; or

    (ii) the last examination report of the insurer.

(b) In determining the amount of risk retained by an insurer, a deduction shall be made for reinsurance ceded by the insurer for which credit is allowed under Sec. 5-904 of this title.

#### Section 5-1004

(a) A surety insurer may execute transportation or warehousing bonds for federal internal revenue taxes in a net amount not exceeding 20% of the surety insurer's surplus to policyholders, determined under Sec. 5-1003(a)(2) of this subtitle.

(b) The net amount of exposure on any one surety risk shall be deemed within the 10% limit established by Sec. 5-1003(a)(1) of this subtitle if the surety insurer is protected in excess of that amount:

  (1) by authorized reinsurance;

  (2) by the cosuretyship of another surety insurer authorized to engage in the surety insurance business in the State;

  (3) by a deposit of property with the surety insurer in pledge or a conveyance of property to the surety insurer in trust for the protection of the surety insurer;

  (4) by a conveyance or mortgage of property for the protection of the surety insurer; or

  (5) if a suretyship or guaranty obligation was made on behalf of or on account of a fiduciary holding property in a trust capacity, by a deposit or other disposition of a part of the property held in trust that prohibits the sale, mortgage, or other disposition of the property without the consent of the surety insurer or a court order or decree.

(c) In determining the net amount of exposure on any one surety risk:

  (1) when the amount of a suretyship obligation exceeds the actual amount of the judgment that is being appealed and that is secured by a bond, or exceeds the amount of the subject matter in controversy, or exceeds the amount of the estate held by the fiduciary for the performance of whose duties a bond is conditioned, the actual amount of the judgment, the subject matter in controversy, or the estate not subject to the supervision or control of the surety insurer shall be used as the basis for determining whether the risk exceeds the 10% limit established by Sec. 5-1003(a)(1) of this subtitle; and

  (2) when the amount of a suretyship obligation required for the performance of a contract exceeds the contract price, the contract price shall be used as the basis for determining whether the risk exceeds the 10% limit established by Sec. 5-1003(a)(1) of this subtitle.

(d) In addition to any other limitation contained in this article, a surety insurer may not be exposed at any one time to risks on suretyship obligations that guaranty the deposits of a single financial institution in an aggregate net amount exceeding 10% of the surety insurer's surplus to policyholders, determined under Sec. 5-1003(a)(2) of this subtitle, unless the surety insurer is protected in excess of that amount as provided in subsection (b) of this section.

#### Section 5-1005

The Commissioner may establish by regulation limits on the risk retained by an insurer for a subject of financial guaranty insurance, including requirements for contingency reserves used in determining compliance with the applicable risk limits.

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Md. Code Ann., Ins. (as displayed at mgaleg.maryland.gov, October 16, 2026)