In this subtitle, “trusteed assets” means assets deposited in trust by an alien insurer in accordance with this subtitle.

This subtitle applies to each alien insurer that desires to use Maryland as a state of entry to transact insurance business in the United States.

An alien insurer may use Maryland as a state of entry to transact insurance business in the United States if the alien insurer makes and maintains in Maryland a deposit of assets in trust with a solvent bank or trust company approved by the Commissioner. The deposit of trusteed assets shall be held for the benefit, security, and protection of the policyholders and creditors of the alien insurer in the United States. The deposit of trusteed assets, together with other trust deposits of the alien insurer held in the United States for the same purpose, may not be less than the deposits required of an alien insurer under § 4-106(c) of this article. The deposit of trusteed assets shall consist of cash, securities of the same character and diversification as those eligible for investment of the funds of domestic insurers under Subtitle 5 or 6 of this title, or both cash and securities. The deposit of trusteed assets shall be maintained as long as any liability of the alien insurer arising out of the transaction of its insurance business in the United States is outstanding.

A deposit of trusteed assets shall be made under a written trust agreement between the alien insurer and the trustee in accordance with this subtitle. The deposit of trusteed assets shall be authenticated in the manner approved by the Commissioner. Whether or not then authorized to transact insurance business in Maryland, an alien insurer that uses or proposes to use Maryland as a state of entry to transact insurance business in the United States may make and execute the trust agreement required by this subtitle. The trust agreement is not effective until filed with and approved in writing by the Commissioner. The Commissioner may not approve a trust agreement if the Commissioner finds that the trust agreement: does not comply with law; or has terms that do not provide reasonably adequate protection for the alien insurer’s policyholders and creditors in the United States. A trust agreement may be amended. The amendment is not effective until filed with and approved in writing by the Commissioner as complying with this subtitle. The Commissioner may withdraw approval of a trust agreement or amendment to a trust agreement if the Commissioner finds, after a hearing, that the requirements under this subtitle for approval of the trust agreement or amendment are no longer met. The Commissioner shall give notice of the hearing required under paragraph (1) of this subsection to the alien insurer and the trustee of the trust agreement.

For purposes of the trust deposit, title to the trusteed assets is vested in the trustee and its successor. The trust agreement shall provide that title to the trusteed assets be vested as described in paragraph (1) of this subsection. The trustee shall: keep the trusteed assets separate from other assets; and maintain a record of the trusteed assets sufficient to identify the trusteed assets at all times. On written request of the Commissioner, the trustee shall file with the Commissioner statements, in the form required by the Commissioner, certifying the character and amount of the trusteed assets. If the trustee after a reasonable time fails to file a statement requested by the Commissioner under paragraph (1) of this subsection, the Commissioner may suspend or revoke the certificate of authority of the alien insurer that deposited the trusteed assets. The Commissioner may examine the trusteed assets of an alien insurer at any time in accordance with the conditions and procedures that govern the examination of insurers in general under Title 2 of this article.

Except as otherwise provided in subsections (b) through (e) of this section, the trust agreement shall provide in substance that an alien insurer may not make, and the trustee may not allow, withdrawals of trusteed assets without advance written authorization of the Commissioner. The trust agreement may provide that, on request of an alien insurer or the United States manager of the alien insurer, all or part of the income, earnings, dividends, or interest accumulations of the trusteed assets may be paid to that manager. The trust agreement may provide that trusteed assets may be withdrawn and, at the same time, assets of equivalent or greater value to those trusteed assets being withdrawn may be substituted if: the substituted assets are eligible for investment of the funds of domestic insurers under Subtitle 5 or 6 of this title; the United States manager of the alien insurer requests the withdrawal in writing in accordance with written authority previously given or delegated by the board of directors or other similar governing body of the alien insurer; and a copy of that authority has been filed with the trustee. The trust agreement may provide that: trusteed assets may be withdrawn to make a deposit that is required by law in a state in which the alien insurer is or becomes authorized to engage in the insurance business, for the protection of the alien insurer’s policyholders and creditors in that state or in the United States, to the extent that the withdrawal does not reduce the alien insurer’s deposit in this State to an amount less than the minimum deposit required under § 4-106(c) of this article; and if a withdrawal is authorized under item (1) of this subsection, the trustee shall transfer directly to the depository required to receive the deposit in the other state the assets withdrawn in the amount required to be deposited in the other state, as certified in writing by the insurance supervisory official of the other state. The trust agreement may provide that trusteed assets may be transferred to a liquidator, conservator, or rehabilitator under an order of a court of competent jurisdiction. The Commissioner may authorize withdrawal of only those trusteed assets that exceed the amount required by this subtitle. If the Commissioner determines that an alien insurer is insolvent or that an alien insurer’s assets in the United States are less than required under § 4-106(c) of this article, the Commissioner in writing shall order the trustee to suspend the right of the alien insurer or any other person to withdraw the trusteed assets of the alien insurer. The trustee shall comply with the order until further order of the Commissioner.

Subject to the Commissioner’s approval, a new trustee may be substituted for the original trustee because of a vacancy or for other proper cause.