<section article="gin" article_name="Insurance" number="7-101" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <level label="a"> <text>In this title the following words have the meanings indicated.</text> </level> <level label="b"> <text>“Affiliate” means a person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with another person.</text> </level> <level label="c"> <text>“Control”, “controlling”, “controlled by”, or “under common control with” means the direct or indirect possession of the power to direct or cause the direction of the management and policies of a person, through ownership of voting securities or of securities convertible into voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, whether or not the power is exercised or sought to be exercised unless the power is the result of an official position with or corporate office held by the person.</text> </level> <level label="d"> <level label="1"> <text>“Enterprise risk” means any activity, circumstance, event, or series of events involving one or more affiliates of an insurer that, if not remedied promptly, is likely to have a material adverse effect on the financial condition or liquidity of the insurer or its insurance holding company system as a whole.</text> </level> <level label="2"> <text>“Enterprise risk” includes anything that would:</text> <level label="i"> <text>cause the insurer’s risk based capital to fall to or below a company action level under Title 4, Subtitle 3 of this article; or</text> </level> <level label="ii"> <text>cause the insurer to be in a hazardous financial condition under § 9–102 of this article.</text> </level> </level> </level> <level label="e"> <text>“Group capital calculation instructions” means the group capital calculation instructions adopted by the NAIC, as amended from time to time.</text> </level> <level label="f"> <text>“Insurance holding company” means a person that directly or indirectly controls an insurer or controls a person that controls an insurer.</text> </level> <level label="g"> <text>“Insurance holding company system” means two or more affiliates, at least one of which is an insurer.</text> </level> <level label="h"> <text>“Lead state commissioner” means the lead state insurance commissioner of the insurance holding company system as determined by the procedures in the NAIC Financial Analysis Handbook.</text> </level> <level label="i"> <text>“NAIC” means the National Association of Insurance Commissioners.</text> </level> <level label="j"> <text>“NAIC liquidity stress test framework” means a separate NAIC publication that includes, as adopted by the NAIC and as amended:</text> <level label="1"> <text>a history of the NAIC’s development of regulatory liquidity stress testing;</text> </level> <level label="2"> <text>the scope criteria applicable for a specific data year; and</text> </level> <level label="3"> <text>the liquidity stress test instructions and reporting templates for a specific data year.</text> </level> </level> <level label="k"> <text>“Scope criteria” means the designated exposure bases along with minimum magnitudes of exposure for the specified data year, as detailed in the NAIC liquidity stress test framework, used to establish a preliminary list of insurers considered included in the scope of the NAIC liquidity stress test framework for that data year.</text> </level> <level label="l"> <text>“Subsidiary” means an affiliate of a person that, directly or indirectly, through one or more intermediaries, is controlled by that person.</text> </level> <level label="m"> <text>“Ultimate controlling person” means the person within a holding company system that is not controlled by any other person.</text> </level> </section> <section article="gin" article_name="Insurance" number="7-102" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <level label="a"> <text>The General Assembly finds that the public interest and the interest of policyholders and stockholders may be adversely affected when:</text> <level label="1"> <text>control of an insurer is sought by a person that would use that control adversely to the best interest of policyholders or stockholders;</text> </level> <level label="2"> <text>acquisition of control of an insurer would substantially lessen competition or create a monopoly in the insurance business in the State;</text> </level> <level label="3"> <text>an insurer that is part of an insurance holding company system enters into transactions or relationships with affiliates on terms that are not fair and reasonable; or</text> </level> <level label="4"> <text>an insurer pays to stockholders dividends that jeopardize the financial condition of the insurer.</text> </level> </level> <level label="b"> <text>The purposes of this title include promoting the public interest by:</text> <level label="1"> <text>requiring disclosures in acquisitions or mergers;</text> </level> <level label="2"> <text>requiring disclosures of material transactions, relationships between an insurer and its affiliates, and dividends to stockholders paid by insurers;</text> </level> <level label="3"> <text>requiring disclosures of relevant information about changes in control of insurers;</text> </level> <level label="4"> <text>providing standards governing material transactions between an insurer and its affiliates; and</text> </level> <level label="5"> <text>establishing penalties for failure to disclose and providing for the disapproval of certain transactions.</text> </level> </level> </section> <section article="gin" article_name="Insurance" number="7-103" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <level label="a"> <text>Except as otherwise specifically provided, the provisions of this title are intended to apply to authorized insurers.</text> </level> <level label="b"> <text>The provisions of this title that apply to an authorized insurer or a domestic insurer also apply to:</text> <level label="1"> <text>a nonprofit health service plan licensed under Title 14, Subtitle 1 of this article; and</text> </level> <level label="2"> <text>a mutual insurance holding company formed under § 3-121.1 of this article.</text> </level> </level> </section> <section article="gin" article_name="Insurance" number="7-104" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <level label="a"> <level label="1"> <text>Control is presumed to exist if a person directly or indirectly owns, directs the voting of, holds with the power to vote, or holds proxies representing 10% or more of the voting securities of another person.</text> </level> <level label="2"> <text>However, control is not presumed to exist if proxies have been obtained by an official of the person solely in connection with voting at a meeting of the owners of the person.</text> </level> </level> <level label="b"> <text>The presumption of control may be rebutted by showing by a preponderance of the evidence that control does not exist in fact.</text> </level> <level label="c"> <level label="1"> <text>Notwithstanding the presumption of control, the Commissioner, on application of an insurer, may find that a person presumed to control an insurer or person does not have control of the insurer or person.</text> </level> <level label="2"> <text>In addition, the Commissioner, after notice and an opportunity to be heard, may find that a person not presumed to have control of an insurer or person does have control of the insurer or person.</text> </level> </level> </section> <section article="gin" article_name="Insurance" number="7-105" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <level label="a"> <text>For purposes of this title, 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:</text> <level label="1"> <text>the size of the insurer as measured by its assets, capital and surplus, reserves, premium writings, insurance in force, and other appropriate criteria;</text> </level> <level label="2"> <text>the extent to which the insurer’s business is diversified among the several lines of insurance;</text> </level> <level label="3"> <text>the number and size of risks insured in each line of insurance;</text> </level> <level label="4"> <text>the geographical dispersion of the insurer’s insured risks;</text> </level> <level label="5"> <text>the nature and extent of reinsurance of the insurer’s risks;</text> </level> <level label="6"> <text>the quality, diversification, and liquidity of the insurer’s investment portfolio;</text> </level> <level label="7"> <text>the recent past and projected future trends in the size of the insurer’s surplus as regards policyholders;</text> </level> <level label="8"> <text>the surplus as regards policyholders maintained by comparable insurers;</text> </level> <level label="9"> <text>the quality and liquidity of investments in and other transactions with affiliates;</text> </level> <level label="10"> <text>the adequacy of the reserves of the insurer;</text> </level> <level label="11"> <text>the quality of the earnings of the insurer and the extent to which the reported earnings include extraordinary items; and</text> </level> <level label="12"> <text>the recent past and projected future trends in the size and quality of the insurer’s investment portfolio.</text> </level> </level> <level label="b"> <text>The Commissioner may discount an investment or treat an investment under subsection (a)(9) of this section as a nonadmitted asset for purposes of determining the adequacy of surplus as regards policyholders whenever the investment so warrants.</text> </level> </section> <section article="gin" article_name="Insurance" number="7-106" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <level label="a"> <text>Except as provided in subsections (b) and (c) of this section or otherwise by law, all information and documents that are filed with the Commissioner in compliance with the requirements of this title or that are reported to, obtained by, or otherwise disclosed to the Commissioner or any other person in the course of an examination or investigation made under this title:</text> <level label="1"> <text>are confidential material;</text> </level> <level label="2"> <text>are not subject to subpoena;</text> </level> <level label="3"> <text>may not be made public by the Commissioner, the NAIC, or any other person; and</text> </level> <level label="4"> <text>are not subject to discovery or admissible in evidence in any civil action.</text> </level> </level> <level label="b"> <text>Material that otherwise is confidential under subsection (a) of this section may be made public by any person who has received the prior written consent of the person to whom the material relates.</text> </level> <level label="c"> <text>If, after giving the person to whom the material relates notice and an opportunity to be heard, the Commissioner determines that it is in the interest of the policyholders, stockholders, or the public to make public any material relating to the person that otherwise is confidential under subsection (a) of this section, the Commissioner may make public all or part of the material in an appropriate manner.</text> </level> <level label="d"> <level label="1"> <text>In addition to the protections afforded confidential information filed under this title and § 2–209 of this article, the following provisions apply expressly to confidential information that is in the control or possession of the Commissioner and reported or provided to the Commissioner in accordance with § 7–603(i) and (j) of this title.</text> </level> <level label="2"> <text>Except as provided in paragraph (3) of this subsection, the document, material, or information:</text> <level label="i"> <text>is recognized as being proprietary and to contain trade secrets;</text> </level> <level label="ii"> <text>is confidential and privileged;</text> </level> <level label="iii"> <text>is not subject to the Public Information Act;</text> </level> <level label="iv"> <text>is not subject to subpoena; and</text> </level> <level label="v"> <text>is not subject to discovery or admissible in evidence in any private civil action.</text> </level> </level> <level label="3"> <text>The Commissioner may use any document, material, or information that is subject to this subsection to further any regulatory or legal action brought as part of the duties of the Commissioner.</text> </level> <level label="4"> <text>The Commissioner and any person that receives a document, material, or information that is subject to this subsection while acting under the authority of the Commissioner may not be allowed or required to testify in any private civil action concerning the document, material, or information.</text> </level> <level label="5"> <text>Except as provided in paragraph (3) of this subsection, for purposes of the information reported and provided to the Commissioner under § 7–603(i) of this title, the Commissioner shall maintain the confidentiality of the group capital calculation and group capital ratio produced within the calculation and any group capital information received from an insurance holding company supervised by the Federal Reserve Board or any U.S. group–wide supervisor.</text> </level> <level label="6"> <text>Except as provided in paragraph (3) of this subsection, for purposes of the information reported and provided to the Commissioner under § 7–603(j) of this title, the Commissioner shall maintain the confidentiality of the liquidity stress test results and supporting disclosures and any liquidity stress test information received from an insurance holding company supervised by the Federal Reserve Board and non–U.S. group–wide supervisors.</text> </level> <level label="7"> <text>In order to assist in the performance of the Commissioner’s duties, the Commissioner:</text> <level label="i"> <text>except as provided in item (ii) of this paragraph, may share documents, materials, or other information, including confidential and privileged information, that may include proprietary and trade secret documents and materials with other state, federal, and international regulatory agencies, the NAIC, any third–party consultants designated by the Commissioner, and state, federal, and international law enforcement authorities, including members of any supervisory college described in § 2–209.1 of this article, if the recipient:</text> <level label="1"> <text>agrees in writing to maintain the confidentiality and privileged status of the document, material, or other information; and</text> </level> <level label="2"> <text>has verified in writing the legal authority to maintain confidentiality;</text> </level> </level> <level label="ii"> <text>may share only confidential and privileged documents, material, or information reported under § 7–603(h) of this title with the commissioners of states having statutes or regulations substantially similar to this section and who have agreed in writing not to disclose the information;</text> </level> <level label="iii"> <level label="1"> <text>may receive documents, materials, or information, including otherwise confidential and privileged documents, materials, and information, that may include proprietary and trade secret information from the NAIC and its affiliates and subsidiaries and from regulatory and law enforcement officials of other foreign or domestic jurisdictions; and</text> </level> <level label="2"> <text>shall maintain as confidential and privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information; and</text> </level> </level> <level label="iv"> <text>shall enter into written agreements with the NAIC and any third–party consultant designated by the Commissioner governing the sharing and use of information provided in accordance with this title and consistent with this section.</text> </level> </level> <level label="8"> <text>An agreement entered into under paragraph (7)(iv) of this subsection shall:</text> <level label="i"> <text>specify procedures and protocols regarding confidentiality and security of information shared with the NAIC or a third–party consultant designated by the Commissioner under this title, including procedures and protocols for the sharing of the information by the NAIC with other state, federal, or international regulators;</text> </level> <level label="ii"> <text>provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the documents, materials, and other information and has verified in writing the legal authority to maintain the confidentiality;</text> </level> <level label="iii"> <text>specify that ownership of information shared with the NAIC or a third–party consultant under this title remains with the Commissioner and the use of the information is subject to the direction of the Commissioner;</text> </level> <level label="iv"> <text>excluding documents, material, or information reported under § 7–603(j) of this title, prohibit the NAIC or a third–party consultant designated by the Commissioner from storing the information shared under this title in a permanent database after the underlying analysis is completed;</text> </level> <level label="v"> <text>require prompt notice to be given to an insurer whose confidential information in the possession of the NAIC or a third–party consultant designated by the Commissioner is subject to a request or subpoena to the NAIC or a third–party consultant designated by the Commissioner for disclosure or production;</text> </level> <level label="vi"> <text>require the NAIC or a third–party consultant designated by the Commissioner to consent to intervention by an insurer in any judicial or administrative action in which the NAIC or a third–party consultant designated by the Commissioner may be required to disclose confidential information about the insurer shared by the NAIC or a third–party consultant designated by the Commissioner; and</text> </level> <level label="vii"> <text>for documents, material, or information reported under § 7–603(j) of this title, provide for the notification of the identity of the consultant to the applicable insurers, in the case of an agreement involving a third–party consultant.</text> </level> </level> <level label="9"> <level label="i"> <text>The sharing of information by the Commissioner under this title may not constitute a delegation of regulatory authority or rulemaking.</text> </level> <level label="ii"> <text>The Commissioner is solely responsible for the administration, execution, and enforcement of this title.</text> </level> </level> <level label="10"> <text>A waiver of any applicable privilege or claim of confidentiality in the documents, materials, or information may not occur as a result of disclosure to the Commissioner or as a result of sharing as authorized in this section.</text> </level> <level label="11"> <text>The group capital calculation and resulting group capital ratio required under § 7–603(i) of this title and the liquidity stress test along with its results and supporting disclosures required under § 7–603(j) of this title are regulatory tools for assessing group risks and capital adequacy and group liquidity risks, respectively, and are not intended as a means to rank insurers or insurance holding company systems generally.</text> </level> <level label="12"> <text>Disclosure of group capital calculation, group capital ratio, liquidity stress test results, or supporting disclosures by any insurer, broker, or other person engaged in any manner of the insurance business is subject to the following:</text> <level label="i"> <text>except as provided in item (ii) of this paragraph or as otherwise required by this title, the direct or indirect disclosure, in any written, electronic, or other manner as an advertisement, an announcement or a statement containing a representation, or a statement with regard to the group capital calculation, group capital ratio, the liquidity stress test results, or supporting disclosures for the liquidity stress test of any insurer or any insurer group, or of any component derived in the calculation by any insurer, broker, or other person engaged in any manner in the insurance business would be misleading and is therefore prohibited; and</text> </level> <level label="ii"> <text>the insurer may publish announcements in a written publication if:</text> <level label="1"> <text>any materially false statement with respect to the group capital calculation, resulting group capital ratio, an inappropriate comparison of any amount to an insurer’s or insurance group’s group capital calculation or resulting group capital ratio, liquidity stress test result, supporting disclosures for the liquidity stress test, or an inappropriate comparison of any amount to an insurer’s or insurance group’s liquidity stress test result or supporting disclosures is published in any written publication and the insurer is able to demonstrate to the Commissioner with substantial proof the falsity of the statement or the inappropriateness of the comparison; and</text> </level> <level label="2"> <text>the sole purpose of the announcements is to rebut the materially false statement or inappropriate comparison.</text> </level> </level> </level> </level> </section> <section article="gin" article_name="Insurance" number="7-107" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <text>An insurer aggrieved by an order of the Commissioner under this title has the right to a hearing and the right to appeal from the action of the Commissioner under §§ 2-210 through 2-215 of this article.</text> </section> <section article="gin" article_name="Insurance" number="7-108" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <text>The powers, remedies, procedures, and penalties provided in this title are in addition to any other powers, remedies, procedures, and penalties otherwise provided by law.</text> </section> <section article="gin" article_name="Insurance" number="7-109" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <text>All laws and parts of laws of the State that are inconsistent with this title are superseded to the extent of the inconsistency.</text> </section> <section article="gin" article_name="Insurance" number="7-201" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="2" subtitle_name="Acquisitions and Investments -- in General"> <level label="a"> <text>In addition to any other investment allowed elsewhere in this article, a domestic insurer, either alone or with another person, may invest in or otherwise acquire a subsidiary that engages in or is registered to engage in one or more of the following insurance businesses or business activities that are ancillary to an insurance business:</text> <level label="1"> <text>conducting an insurance business that is authorized by the jurisdiction where the subsidiary is incorporated;</text> </level> <level label="2"> <text>acting as an insurance producer for its parent, its parent’s insurer subsidiaries, or its parent’s intermediate insurer subsidiaries;</text> </level> <level label="3"> <text>investing, reinvesting, or trading in securities for itself, its affiliate, its parent, or another subsidiary of its parent;</text> </level> <level label="4"> <text>managing an investment company that is subject to the Investment Company Act of 1940, including managing related sales and services of the investment company;</text> </level> <level label="5"> <text>acting as a broker–dealer that is subject to the Securities Exchange Act of 1934;</text> </level> <level label="6"> <text>providing investment advice to governments, governmental units, corporations, or other organizations or groups;</text> </level> <level label="7"> <text>performing other services related to the operations of an insurance business, including actuarial, loss prevention, safety engineering, data processing, accounting, claims, appraisal, and collection services;</text> </level> <level label="8"> <text>owning and managing assets that its parent may own and manage;</text> </level> <level label="9"> <text>acting as administrative agent for a governmental unit that performs an insurance function;</text> </level> <level label="10"> <text>financing insurance premiums;</text> </level> <level label="11"> <text>conducting any other business activity that is reasonably ancillary to an insurance business; or</text> </level> <level label="12"> <text>owning one or more corporations engaged exclusively in or organized to engage exclusively in one or more of the business activities specified in this section.</text> </level> </level> <level label="b"> <text>Subject to the approval of the Commissioner and to the provisions of this title, a domestic mutual insurer may acquire or form a subsidiary insurance holding company.</text> </level> </section> <section article="gin" article_name="Insurance" number="7-202" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="2" subtitle_name="Acquisitions and Investments -- in General"> <level label="a"> <text>The investments authorized in this section are in addition to investments in common stock, preferred stock, debt obligations, and other securities allowed elsewhere in this article.</text> </level> <level label="b"> <text>In calculating investments under this section, a domestic insurer:</text> <level label="1"> <text>shall exclude investments in domestic or foreign insurance subsidiaries; and</text> </level> <level label="2"> <text>with respect to investments in all other subsidiaries, shall include:</text> <level label="i"> <text>the net total of money spent, obligations assumed, and other consideration given to acquire or form the subsidiary, including organizational expenses and contributions to capital and surplus of the subsidiary, whether or not represented by the purchase of capital stock or issuance of other securities; and</text> </level> <level label="ii"> <text>the amount spent after the subsidiary is acquired or formed to acquire additional common stock, preferred stock, debt obligations, and other securities and all contributions to the capital or surplus of the subsidiary.</text> </level> </level> </level> <level label="c"> <text>A domestic insurer may invest any amount in common stock, preferred stock, debt obligations, and other securities of one or more subsidiaries if:</text> <level label="1"> <text>the amount does not exceed the lesser of 10% of the domestic insurer’s assets and 50% of the domestic insurer’s surplus as regards policyholders; and</text> </level> <level label="2"> <text>after the investment, the domestic insurer has remaining surplus as regards policyholders that:</text> <level label="i"> <text>bears a reasonable relation to the domestic insurer’s outstanding liabilities; and</text> </level> <level label="ii"> <text>is adequate to meet the domestic insurer’s financial needs.</text> </level> </level> </level> <level label="d"> <level label="1"> <text>For purposes of this subsection, total liabilities are calculated in the same manner that total liabilities are calculated for the annual statement required by the National Association of Insurance Commissioners.</text> </level> <level label="2"> <text>This subsection applies only to a domestic insurer whose total liabilities are less than 10% of its assets.</text> </level> <level label="3"> <text>For purposes of this subsection, in calculating assets and surplus as regards policyholders remaining after an investment, a domestic insurer shall treat the investment as if it were a nonadmitted asset.</text> </level> <level label="4"> <text>A domestic insurer subject to this subsection may invest any amount in common stock of one or more of its subsidiaries if, after the investment, the domestic insurer has remaining assets and surplus as regards policyholders that:</text> <level label="i"> <text>bear a reasonable relation to the domestic insurer’s outstanding liabilities; and</text> </level> <level label="ii"> <text>are adequate to meet the domestic insurer’s financial needs.</text> </level> </level> <level label="5"> <text>A domestic insurer subject to this subsection may invest any amount in preferred stock and debt obligations of one or more of its subsidiaries if, after the investment, the domestic insurer has remaining surplus as regards policyholders that:</text> <level label="i"> <text>bears a reasonable relation to the domestic insurer’s outstanding liabilities; and</text> </level> <level label="ii"> <text>is adequate to meet the domestic insurer’s financial needs.</text> </level> </level> </level> <level label="e"> <level label="1"> <text>In this subsection, “total investment” includes:</text> <level label="i"> <text>a direct investment by the domestic insurer in an asset other than securities of its subsidiaries; and</text> </level> <level label="ii"> <text>the domestic insurer’s proportionate share of any investment in an asset by a subsidiary of the insurer, calculated by multiplying the amount of the subsidiary’s investment by the percentage of the domestic insurer’s ownership of the subsidiary.</text> </level> </level> <level label="2"> <text>A domestic insurer may invest any amount in common stock, preferred stock, debt obligations, and other securities of one or more subsidiaries engaged or organized to engage exclusively in the ownership and management of assets authorized as investments for the domestic insurer or one or more insurance subsidiaries, to the extent that each subsidiary limits its investments in any asset so that the investments will not cause the amount of the total investment of the domestic insurer to exceed any of the investment limitations applicable to the domestic insurer under subsection (c) of this section or under Title 5, Subtitles 5 and 6 of this article.</text> </level> </level> <level label="f"> <text>Notwithstanding the limitations specified in subsections (c), (d), and (e) of this section, and treating the investment as if it were a nonadmitted asset, with the approval of the Commissioner, a domestic insurer may invest any amount in common stock, preferred stock, debt obligations, and other securities of one or more subsidiaries if, after the investment, the domestic insurer has remaining surplus as regards policyholders that:</text> <level label="1"> <text>bears a reasonable relation to the domestic insurer’s outstanding liabilities; and</text> </level> <level label="2"> <text>is adequate to meet the domestic insurer’s financial needs.</text> </level> </level> </section> <section article="gin" article_name="Insurance" number="7-203" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="2" subtitle_name="Acquisitions and Investments -- in General"> <level label="a"> <level label="1"> <text>Except as provided in subsection (b) of this section, within 3 years after a domestic insurer ends its control of a subsidiary, the domestic insurer shall dispose of all investments in the subsidiary that were made under § 7-202 of this subtitle.</text> </level> <level label="2"> <text>The Commissioner may extend the time for disposal of the investments.</text> </level> </level> <level label="b"> <text>A domestic insurer is not required to dispose of an investment under subsection (a) of this section if, after the investment is made:</text> <level label="1"> <text>the investment meets the requirements for investment under another provision of this article; and</text> </level> <level label="2"> <text>the domestic insurer notifies the Commissioner that the investment meets the other requirements.</text> </level> </level> </section> <section article="gin" article_name="Insurance" number="7-301" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="3" subtitle_name="Acquisition of Control of Domestic Insurer or Insurance Holding Company"> <level label="a"> <text>Except as otherwise provided in this section, this subtitle applies to any purchase, exchange, merger, or other transaction that would result in the acquisition of direct or indirect control of a domestic insurer or of an insurance holding company controlling a domestic insurer.</text> </level> <level label="b"> <text>This subtitle does not apply to an offer for or invitation for tender of voting securities, or to an agreement to exchange securities for or otherwise to acquire control of a domestic insurer or of an insurance holding company controlling a domestic insurer, to the extent that the Commissioner determines that this subtitle is not intended to apply to the transaction and exempts the transaction from this subtitle by regulation or order.</text> </level> <level label="c"> <text>This subtitle does not apply to a securities broker who, while acting in the usual and customary broker’s function, holds less than 20% of the voting securities of an insurer or of a person controlling an insurer.</text> </level> <level label="d"> <text>This subtitle does not apply to the issuer of securities that makes a tender offer for, invites tenders of, enters into an agreement to exchange securities for, or otherwise acquires any voting security or security convertible into voting security of a domestic insurer or of an insurance holding company controlling a domestic insurer.</text> </level> </section> <section article="gin" article_name="Insurance" number="7-302" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="3" subtitle_name="Acquisition of Control of Domestic Insurer or Insurance Holding Company"> <text>With respect to a transaction subject to this subtitle, a person must comply with all requirements of this subtitle before the person:</text> <level label="1"> <text>makes a tender offer for, invites tenders of, enters into an agreement to exchange securities for, or otherwise acquires any voting security or security convertible into voting security of a domestic insurer, or a person, including an insurance holding company, that controls a domestic insurer; or</text> </level> <level label="2"> <text>makes an agreement to merge with or otherwise to acquire control of a domestic insurer, or a person, including an insurance holding company, that controls a domestic insurer.</text> </level> </section> <section article="gin" article_name="Insurance" number="7-303" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="3" subtitle_name="Acquisition of Control of Domestic Insurer or Insurance Holding Company"> <level label="a"> <text>With respect to a transaction subject to this subtitle, a person seeking to acquire control of a domestic insurer must file with the Commissioner the pre–acquisition notification required under Subtitle 4 of this title.</text> </level> <level label="b"> <text>The pre–acquisition notification must be filed at least 30 days before a transaction subject to this subtitle is proposed to become effective.</text> </level> <level label="c"> <text>The Commissioner may impose sanctions under § 7–405 of this title for failure to file the information required under subsection (a) of this section.</text> </level> <level label="d"> <level label="1"> <text>Any person that controls a domestic insurer seeking to divest its controlling interest in the domestic insurer shall file a confidential notice of its proposed divestiture with the Commissioner at least 30 days before the proposed divestiture and provide a copy of the notice to the insurer.</text> </level> <level label="2"> <text>The Commissioner shall determine those instances in which the party seeking to divest a controlling interest in an insurer must file for and obtain approval of the transaction.</text> </level> <level label="3"> <text>The information regarding the divestiture shall remain confidential until the conclusion of the transaction unless, in the Commissioner’s discretion, the Commissioner determines that confidential treatment will interfere with enforcement of this section.</text> </level> <level label="4"> <text>Unless the Commissioner determines otherwise, this subsection does not apply if the statement required by subsection (a) of this section is filed.</text> </level> </level> </section> <section article="gin" article_name="Insurance" number="7-304" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="3" subtitle_name="Acquisition of Control of Domestic Insurer or Insurance Holding Company"> <level label="a"> <text>A person seeking to acquire control of a domestic insurer must file a statement with the Commissioner and provide a copy to the domestic insurer.</text> </level> <level label="b"> <text>The statement must be filed at least 60 days before a transaction subject to this subtitle is proposed to become effective.</text> </level> <level label="c"> <text>The statement required by subsection (a) of this section must contain:</text> <level label="1"> <text>the name and address of each individual, by or for whom the transaction subject to this subtitle is to be made, and background information about the individual, including:</text> <level label="i"> <text>the principal occupation of and all offices and positions held by the individual during the past 10 years; and</text> </level> <level label="ii"> <text>other than minor traffic offenses, crimes of which the individual has been convicted during the past 10 years;</text> </level> </level> <level label="2"> <text>the name and address of each person that is not an individual, by or for whom the transaction subject to this subtitle is to be made, and background information about the person, including:</text> <level label="i"> <text>the nature of the person’s business operations and those of its predecessors during the past 10 years or any shorter period that the person and any predecessors have existed;</text> </level> <level label="ii"> <text>a description of the business that the person and its subsidiaries intend to do;</text> </level> <level label="iii"> <text>a list of the person’s current directors and executive officers, individuals who have been selected to hold those positions, and individuals who perform or will perform functions appropriate to those positions; and</text> </level> <level label="iv"> <text>for each individual listed under item (iii) of this item:</text> <level label="1"> <text>the principal occupation of and all offices and positions held by the individual during the past 10 years; and</text> </level> <level label="2"> <text>other than minor traffic offenses, crimes of which the individual has been convicted during the past 10 years;</text> </level> </level> </level> <level label="3"> <text>fully audited financial information about the earnings and financial condition of each acquiring person and any predecessor for the past 5 fiscal years or any shorter period that each acquiring person and any predecessor have existed;</text> </level> <level label="4"> <text>similar unaudited financial information dated within 90 days before the statement is filed;</text> </level> <level label="5"> <level label="i"> <text>copies of all actual or proposed tender offers, invitations for tender, exchange offers, and agreements to acquire or exchange that relate to any security described in this subtitle;</text> </level> <level label="ii"> <text>if distributed, copies of any additional soliciting materials that relate to the actions described in item (i) of this item;</text> </level> </level> <level label="6"> <text>the source and amount of the funds or other consideration for a transaction subject to this subtitle and, if a part of the funds or other consideration has been or is to be borrowed or otherwise obtained for a transaction subject to this subtitle, a description of that transaction and the names of the parties to that transaction;</text> </level> <level label="7"> <text>any plans or proposals to liquidate the domestic insurer or insurance holding company controlling a domestic insurer, sell its assets, merge it with any person, or make any other major change in its business or corporate structure or management;</text> </level> <level label="8"> <text>with regard to any security connected with a transaction subject to this subtitle:</text> <level label="i"> <text>the number of shares each acquiring person proposes to acquire;</text> </level> <level label="ii"> <text>the terms of the offer, invitation, agreement, or transaction subject to this subtitle; and</text> </level> <level label="iii"> <text>a statement of the method by which the fairness of the proposal was determined;</text> </level> </level> <level label="9"> <text>the name and address of each person and each of that person’s affiliates holding the following securities, the amount held in each class of the securities, and, for the past 2 years, the dates, amounts, and prices of sales and purchases of the securities by the person or affiliate:</text> <level label="i"> <text>beneficially owned voting securities of the domestic insurer;</text> </level> <level label="ii"> <text>voting securities of the domestic insurer in which there is a right to acquire beneficial ownership;</text> </level> <level label="iii"> <text>beneficially owned securities that may be converted into voting securities of the domestic insurer; and</text> </level> <level label="iv"> <text>securities in which there is a right to acquire beneficial ownership that may be converted into voting securities of the domestic insurer;</text> </level> </level> <level label="10"> <text>the names of the parties to and details of any contracts, arrangements, or understandings about securities of the domestic insurer or insurance holding company controlling the domestic insurer, including contracts, arrangements, or understandings providing for:</text> <level label="i"> <text>transfers of the securities;</text> </level> <level label="ii"> <text>joint ventures;</text> </level> <level label="iii"> <text>loan or option arrangements;</text> </level> <level label="iv"> <text>puts or calls;</text> </level> <level label="v"> <text>loan guarantees;</text> </level> <level label="vi"> <text>guarantees against loss or guarantees of profits;</text> </level> <level label="vii"> <text>divisions of losses or profits; and</text> </level> <level label="viii"> <text>giving or withholding of proxies;</text> </level> </level> <level label="11"> <text>a description of the purchase of any security described in this subtitle during the 12 calendar months immediately preceding the filing of the statement by an acquiring person, including:</text> <level label="i"> <text>the dates of purchase;</text> </level> <level label="ii"> <text>the names of the purchasers; and</text> </level> <level label="iii"> <text>the consideration paid or agreed to be paid;</text> </level> </level> <level label="12"> <text>a description of any recommendations to purchase any security subject to this subtitle made during the 12 calendar months immediately preceding the filing of the statement by:</text> <level label="i"> <text>an acquiring person; or</text> </level> <level label="ii"> <text>any other person, based on interviews with or at the suggestion of the acquiring person;</text> </level> </level> <level label="13"> <text>the terms of any agreements made or proposed to be made with brokers, securities dealers, service organizations, or other persons, including the amount of any fees, commissions, or other compensation to be paid, for soliciting shares for tender;</text> </level> <level label="14"> <text>an agreement by the person required to file the statement under this section that the person will provide the annual report specified in § 7–603(h) of this title for as long as control exists;</text> </level> <level label="15"> <text>an acknowledgment by the person required to file the statement under this section that the person and all affiliates in the insurance holding company system will provide information to the Commissioner on request as necessary to evaluate enterprise risk to the insurer; and</text> </level> <level label="16"> <text>other information necessary or appropriate in the public interest or for the protection of policyholders that the Commissioner requires by regulation.</text> </level> </level> <level label="d"> <level label="1"> <text>If the person required to file a statement under this section is a partnership, limited partnership, syndicate, or other group, the statement also shall include the information required by subsection (c) of this section for:</text> <level label="i"> <text>each partner of the partnership or limited partnership;</text> </level> <level label="ii"> <text>each member of the syndicate or group; and</text> </level> <level label="iii"> <text>each person controlling a partner or member.</text> </level> </level> <level label="2"> <text>If a person required to file the statement under this section is a corporation or if a person referred to in paragraph (1) of this subsection is a corporation, the statement also shall include the information required by subsection (c) of this section for:</text> <level label="i"> <text>the corporation;</text> </level> <level label="ii"> <text>each officer and director of the corporation; and</text> </level> <level label="iii"> <text>each person that directly or indirectly is the beneficial owner of more than 10% of the outstanding voting securities of the corporation.</text> </level> </level> <level label="3"> <text>If any material change occurs in the facts set forth in the statement filed with the Commissioner and provided to the insurer under this section, an amendment, together with copies of any documents or other materials necessary to describe the amendment, shall be filed with the Commissioner and provided to the insurer within the earlier of 2 business days after:</text> <level label="i"> <text>the change occurs; or</text> </level> <level label="ii"> <text>the person that filed the statement learns of the change.</text> </level> </level> </level> <level label="e"> <text>A person that is required to file a statement under this section instead may file with the Commissioner, in addition to any other materials that the Commissioner requests:</text> <level label="1"> <text>a registration statement filed under the Securities Act of 1933;</text> </level> <level label="2"> <text>a disclosure containing similar information filed under the Securities Exchange Act of 1934; or</text> </level> <level label="3"> <text>a registration or disclosure that contains similar information filed under another State law.</text> </level> </level> <level label="f"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection, on request of the person filing the statement, the Commissioner may not make public the name of a lender listed under subsection (c)(6) of this section as a source of funds, unless the transaction is made in the lender’s ordinary course of business.</text> </level> <level label="2"> <text>The Commissioner may make public the name of a lender under paragraph (1) of this subsection if the Commissioner considers the disclosure to be in the public interest.</text> </level> </level> <level label="g"> <text>The Commissioner shall provide the statement filed under this section to the person to be acquired on the date the attempt to acquire is made public.</text> </level> </section> <section article="gin" article_name="Insurance" number="7-305" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="3" subtitle_name="Acquisition of Control of Domestic Insurer or Insurance Holding Company"> <level label="a"> <text>At the time a person files the statement required by § 7-304 of this subtitle, the person shall:</text> <level label="1"> <text>file with the Commissioner:</text> <level label="i"> <text>all invitations for tenders or advertisements making a tender offer or inviting tenders of voting securities of the domestic insurer or insurance holding company controlling the domestic insurer made by or for the person; and</text> </level> <level label="ii"> <text>any agreement to:</text> <level label="1"> <text>exchange or otherwise acquire securities of the domestic insurer or insurance holding company controlling the domestic insurer; or</text> </level> <level label="2"> <text>merge with or otherwise acquire control of the domestic insurer or insurance holding company controlling the domestic insurer; and</text> </level> </level> </level> <level label="2"> <text>send to the domestic insurer or insurance holding company controlling the domestic insurer:</text> <level label="i"> <text>copies of the documents specified in item (1) of this subsection; and</text> </level> <level label="ii"> <text>any information contained in the statement filed under § 7-304 of this subtitle that the Commissioner requires by regulation.</text> </level> </level> </level> <level label="b"> <level label="1"> <text>By regulation, the Commissioner may set requirements that the Commissioner considers necessary or appropriate in the public interest or for the protection of policyholders for the contents of:</text> <level label="i"> <text>additional materials inviting tender offers after the initial invitations; and</text> </level> <level label="ii"> <text>amendments to agreements described in subsection (a)(1)(ii) of this section.</text> </level> </level> <level label="2"> <text>The additional materials and amendments shall contain the information that the Commissioner requires.</text> </level> <level label="3"> <text>The person required to file a statement under § 7-304 of this subtitle shall file with the Commissioner the additional materials and amendments required by paragraph (1) of this subsection and send copies to the domestic insurer or insurance holding company controlling the domestic insurer no later than the date that:</text> <level label="i"> <text>copies of the material are first published or sent or given to security holders; or</text> </level> <level label="ii"> <text>the amendment is entered into.</text> </level> </level> </level> </section> <section article="gin" article_name="Insurance" number="7-306" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="3" subtitle_name="Acquisition of Control of Domestic Insurer or Insurance Holding Company"> <level label="a"> <text>A transaction subject to this subtitle may not be made unless, within 60 days after the statement required by § 7–304 of this subtitle is filed with the Commissioner or within any extension of that period, the Commissioner approves the transaction or does not disapprove the transaction.</text> </level> <level label="b"> <text>Subject to subsection (c) of this section, the Commissioner shall disapprove a proposed transaction subject to this subtitle if the Commissioner finds that:</text> <level label="1"> <text>after the transaction, the domestic insurer could not satisfy the requirements for the issuance of a certificate of authority to engage in the insurance business which it intends to transact or is licensed to transact in the State, taking into consideration the financial and managerial resources and future prospects of the domestic insurer;</text> </level> <level label="2"> <text>the transaction may substantially lessen competition in insurance in the State or tend to create a monopoly;</text> </level> <level label="3"> <text>the financial condition of an acquiring person might jeopardize the financial stability of the domestic insurer or prejudice the interests of its policyholders or, in the case of an acquisition of control, the interests of any remaining stockholders who are unaffiliated with the acquiring person;</text> </level> <level label="4"> <text>the acquiring person has plans or proposals that are unfair or prejudicial to policyholders for liquidating the domestic insurer, selling its assets, merging it with another person, or making any other major change in its business or corporate structure or management;</text> </level> <level label="5"> <text>it would not be in the interest of policyholders, shareholders, or the public to allow the acquiring person to control the domestic insurer based on the competence, experience, and integrity of the persons that would control the operations of the domestic insurer;</text> </level> <level label="6"> <text>any party to an agreement to merge with a domestic insurer is not itself an insurer; or</text> </level> <level label="7"> <text>the interests of the domestic insurer’s policyholders and stockholders might otherwise be prejudiced, impaired, or not properly protected.</text> </level> </level> <level label="c"> <text>In disapproving a transaction based on a finding under subsection (b)(2) of this section:</text> <level label="1"> <text>the Commissioner may not disapprove a transaction subject to this subtitle if the Commissioner finds that any of the situations meeting the criteria of § 7–405(b) of this title exist;</text> </level> <level label="2"> <text>the Commissioner may condition the approval of a transaction subject to this subtitle on the removal of the basis of disapproval under subsection (b)(2) of this section within a specified period of time; and</text> </level> <level label="3"> <text>the disapproval is subject to § 7–405(c) of this title and the informational requirements under § 7–403(c) of this title.</text> </level> </level> </section> <section article="gin" article_name="Insurance" number="7-307" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="3" subtitle_name="Acquisition of Control of Domestic Insurer or Insurance Holding Company"> <text>At the expense of the acquiring person, the Commissioner may retain attorneys, actuaries, accountants, and other experts not otherwise a part of the Commissioner’s staff as are reasonably necessary to help the Commissioner in reviewing the proposed transaction subject to this subtitle.</text> </section> <section article="gin" article_name="Insurance" number="7-308" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="3" subtitle_name="Acquisition of Control of Domestic Insurer or Insurance Holding Company"> <level label="a"> <text>The courts of the State have jurisdiction over:</text> <level label="1"> <text>each person that does not reside in, is not domiciled in, or is not authorized to do business in the State that files a statement with the Commissioner under this subtitle; and</text> </level> <level label="2"> <text>all actions arising out of a violation of this subtitle.</text> </level> </level> <level label="b"> <level label="1"> <text>A person that is subject to the jurisdiction of the courts of the State under subsection (a)(1) of this section is deemed to appoint the Commissioner as attorney for service of process in any proceeding arising out of a violation of this subtitle.</text> </level> <level label="2"> <text>Copies of all process shall be served on the Commissioner.</text> </level> <level label="3"> <text>The Commissioner shall send a copy of the process by registered mail to the person at the person’s last known address.</text> </level> </level> </section> <section article="gin" article_name="Insurance" number="7-309" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="3" subtitle_name="Acquisition of Control of Domestic Insurer or Insurance Holding Company"> <text>A person violates this title if:</text> <level label="1"> <text>the person fails to file the statement required by this subtitle;</text> </level> <level label="2"> <text>without the Commissioner’s approval during the 60–day period under § 7–306(a) of this subtitle, or after the Commissioner’s disapproval, the person makes or attempts to make an acquisition of actual or presumed control of, or a merger with, a domestic insurer or a person, including an insurance holding company, that controls a domestic insurer; or</text> </level> <level label="3"> <text>without the Commissioner’s approval during the 30–day period under § 7–303(d) of this subtitle, or after the Commissioner’s disapproval, the person divests or attempts to divest actual or presumed control of a domestic insurer or a person, including an insurance holding company, that controls a domestic insurer.</text> </level> </section> <section article="gin" article_name="Insurance" number="7-401" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="4" subtitle_name="Acquisition of Control of Insurer"> <text>Except as provided in § 7-402 of this subtitle, this subtitle applies to any acquisition, agreement, arrangement, or activity, including the acquisition of voting securities or assets, bulk reinsurance, and merger, that results in a person acquiring directly or indirectly the control of an authorized insurer.</text> </section> <section article="gin" article_name="Insurance" number="7-402" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="4" subtitle_name="Acquisition of Control of Insurer"> <text>This subtitle does not apply to:</text> <level label="1"> <text>an acquisition that is subject to the approval or disapproval of the Commissioner under Subtitle 3 of this title;</text> </level> <level label="2"> <text>a purchase of securities solely for investment purposes if the securities are not used for voting or otherwise to cause, or attempt to cause, the substantial lessening of competition in any insurance market in the State;</text> </level> <level label="3"> <text>a purchase of securities that results in a presumption of control under § 7-104 of this title, but the commissioner of the insurer’s state of domicile:</text> <level label="i"> <text>accepts a disclaimer of control or affirmatively finds that control does not exist; and</text> </level> <level label="ii"> <text>informs the Commissioner of the disclaimer or finding;</text> </level> </level> <level label="4"> <text>an acquisition:</text> <level label="i"> <text>in which both the acquiring and acquired persons are not, either directly or through affiliates, primarily engaged in the insurance business; and</text> </level> <level label="ii"> <text>for which a pre-acquisition notification:</text> <level label="1"> <text>is filed with the Commissioner under § 7-403 of this subtitle; or</text> </level> <level label="2"> <text>is not required because the acquisition otherwise is excluded from this subtitle by another provision of this subsection;</text> </level> </level> </level> <level label="5"> <text>an acquisition in which the acquiring and acquired persons already are affiliated;</text> </level> <level label="6"> <text>considering “market” to be the direct written insurance premium in the State for a line of business as contained in the annual statement required to be filed by authorized insurers, an acquisition that would not result immediately in:</text> <level label="i"> <text>an increase in any market share;</text> </level> <level label="ii"> <text>a combined market share of the acquiring and acquired insurers, their affiliates, and the person resulting from a merger that exceeds 5% of any one market; or</text> </level> <level label="iii"> <text>in any one market:</text> <level label="1"> <text>a market share increase of more than 2%; and</text> </level> <level label="2"> <text>a combined market share of the acquiring and acquired insurers, their affiliates, and the person resulting from a merger that exceeds 12%;</text> </level> </level> </level> <level label="7"> <text>an acquisition for which a pre-acquisition notification would be required under this subtitle only because of the resulting effect on the ocean marine insurance line of business; or</text> </level> <level label="8"> <text>an acquisition as to which the commissioner of the state of domicile of the acquired insurer affirmatively finds and informs the Commissioner that:</text> <level label="i"> <text>the acquired insurer is in failing condition;</text> </level> <level label="ii"> <text>there is a lack of feasible alternatives to improving the failing condition of the acquired insurer; and</text> </level> <level label="iii"> <text>the public benefits from improving the acquired insurer’s condition through the acquisition outweigh the public benefits from not lessening competition.</text> </level> </level> </section> <section article="gin" article_name="Insurance" number="7-403" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="4" subtitle_name="Acquisition of Control of Insurer"> <level label="a"> <level label="1"> <text>The acquiring person in an acquisition subject to this subtitle must file a pre-acquisition notification with the Commissioner.</text> </level> <level label="2"> <text>The acquired person in an acquisition subject to this subtitle may file a pre-acquisition notification.</text> </level> </level> <level label="b"> <text>The pre-acquisition notification must be filed at least 30 days before the acquisition subject to this subtitle is proposed to become effective.</text> </level> <level label="c"> <level label="1"> <text>The pre-acquisition notification must be in the form and contain the information required by the National Association of Insurance Commissioners relating to those markets that, under § 7-402(6) of this subtitle, cause the acquisition not to be exempt from this subtitle.</text> </level> <level label="2"> <text>The Commissioner may require a pre-acquisition notification to contain:</text> <level label="i"> <text>additional material and information that the Commissioner considers necessary to determine whether the proposed acquisition, if effective, would violate § 7-405(a)(1)(i) of this subtitle; and</text> </level> <level label="ii"> <text>the opinion of an economist about the competitive impact of the acquisition in the State, together with a summary of the education and experience of the economist indicating the economist’s ability to make an informed opinion.</text> </level> </level> </level> </section> <section article="gin" article_name="Insurance" number="7-404" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="4" subtitle_name="Acquisition of Control of Insurer"> <level label="a"> <text>The waiting period for an acquisition subject to this subtitle:</text> <level label="1"> <text>begins on the day the Commissioner receives the pre-acquisition notification; and</text> </level> <level label="2"> <text>ends on the earlier of:</text> <level label="i"> <text>30 days after the period begins; or</text> </level> <level label="ii"> <text>the day on which the Commissioner ends the waiting period.</text> </level> </level> </level> <level label="b"> <level label="1"> <text>During the waiting period for an acquisition subject to this subtitle, the Commissioner may require that additional information relevant to the proposed acquisition be filed.</text> </level> <level label="2"> <text>If the Commissioner requires additional information, the waiting period shall be extended to the earlier of:</text> <level label="i"> <text>30 days after the Commissioner receives the additional information; or</text> </level> <level label="ii"> <text>the day on which the Commissioner ends the waiting period.</text> </level> </level> </level> </section> <section article="gin" article_name="Insurance" number="7-405" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="4" subtitle_name="Acquisition of Control of Insurer"> <level label="a"> <level label="1"> <text>Except as provided in subsection (b) of this section, the Commissioner may enter an order under this section with respect to an acquisition subject to this subtitle if:</text> <level label="i"> <text>there is substantial evidence that the effect of the acquisition may be substantially to lessen competition in any line of insurance in the State or tend to create a monopoly; or</text> </level> <level label="ii"> <text>the insurer fails to file adequate information in compliance with § 7–403 of this subtitle.</text> </level> </level> <level label="2"> <text>The order may:</text> <level label="i"> <text>require an acquiring or acquired insurer, its affiliates, or the person resulting from a merger to cease and desist from doing business in the State with respect to the line of insurance involved in the violation; or</text> </level> <level label="ii"> <text>deny the application of an acquiring or acquired insurer for a certificate of authority.</text> </level> </level> </level> <level label="b"> <text>The Commissioner may not enter an order under this section with respect to an acquisition subject to this subtitle if:</text> <level label="1"> <text>the acquisition will yield substantial economies of scale or economies in resource utilization that cannot be achieved feasibly in any other way, and public benefits from those economies outweigh the public benefits from not lessening competition; or</text> </level> <level label="2"> <text>the acquisition will increase substantially the availability of insurance, and public benefits from that increase outweigh the public benefits from not lessening competition.</text> </level> </level> <level label="c"> <level label="1"> <text>In determining whether a proposed acquisition subject to this subtitle would violate subsection (a)(1)(i) of this section, the Commissioner shall consider an acquisition that involves two or more insurers, including insurers under common ownership, management, or control, that compete in the same product and geographical market to be prima facie evidence of violation of subsection (a)(1)(i) of this section if the acquiring and acquired insurers, their affiliates, or the person resulting from a merger:</text> <level label="i"> <text>have a share of the market that exceeds the total of the two columns in the table under item (ii) of this paragraph, if more than two insurers are parties to the acquisition; or</text> </level> <level label="ii"> <text>have the following shares of the market:</text> <text>Insurer A Insurer B</text> <text>5% 4% or more</text> <text>10% 3% or more</text> <text>15% 2% or more</text> </level> </level> <level label="2"> <text>By treating the insurer with the largest share of the market as insurer “A”, the Commissioner may interpolate percentages not shown in the table under paragraph (1)(ii) of this subsection proportionately to the percentages that are shown.</text> </level> <level label="3"> <text>In the absence of sufficient information to the contrary:</text> <level label="i"> <text>the relevant product market is the direct written insurance premium for a line of business as the line appears in the annual statement required to be filed by insurers doing business in the State; and</text> </level> <level label="ii"> <text>the relevant geographical market is the State.</text> </level> </level> <level label="4"> <text>In determining the relevant product and geographical markets, the Commissioner shall consider, among other things:</text> <level label="i"> <text>any definitions or guidelines adopted by the National Association of Insurance Commissioners; and</text> </level> <level label="ii"> <text>any information submitted by parties to the acquisition.</text> </level> </level> </level> <level label="d"> <level label="1"> <text>Before the Commissioner enters an order under this section, the Commissioner shall:</text> <level label="i"> <text>give the parties notice of a hearing on the proposed order before the end of the waiting period under § 7–404 of this subtitle and at least 15 days before the hearing is scheduled; and</text> </level> <level label="ii"> <text>hold the hearing.</text> </level> </level> <level label="2"> <level label="i"> <text>The Commissioner shall enter an order after the conclusion of the hearing and no later than 60 days after the end of the waiting period.</text> </level> <level label="ii"> <text>The order shall be accompanied by a written decision of the Commissioner, findings of fact, and conclusions of law.</text> </level> </level> </level> <level label="e"> <level label="1"> <text>An order under this section may not become final earlier than 30 days after it is issued.</text> </level> <level label="2"> <text>Before an order becomes final, an insurer that is subject to the order may submit to the Commissioner a plan to remedy the anticompetitive impact of the acquisition within a reasonable time.</text> </level> <level label="3"> <text>Based on the plan or other information, the Commissioner may set conditions to be met while the anticompetitive impact is being remedied, and the order vacated or modified.</text> </level> </level> <level label="f"> <text>An order under this section does not apply if the acquisition is not consummated.</text> </level> <level label="g"> <text>A person that violates a cease and desist order issued by the Commissioner under this section, after notice and hearing and on order of the Commissioner, is subject to a penalty not exceeding $10,000 for each day of violation or suspension or revocation of the person’s certificate of authority or both.</text> </level> </section> <section article="gin" article_name="Insurance" number="7-406" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="4" subtitle_name="Acquisition of Control of Insurer"> <text>A person required to file a pre-acquisition notification under this subtitle or Subtitle 3 of this title that fails to file the notification and that also fails to demonstrate a good faith effort to comply with the filing requirement is subject to a penalty not exceeding $50,000.</text> </section> <section article="gin" article_name="Insurance" number="7-501" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="5" subtitle_name="Acquisition of Health Service Plan"> <level label="a"> <text>This section does not apply to:</text> <level label="1"> <text>a transaction that is preempted by federal law; or</text> </level> <level label="2"> <text>a transaction as to which:</text> <level label="i"> <text>the laws of the jurisdiction in which the nonprofit health service plan is domiciled authorize the commissioner of that jurisdiction to investigate and approve an acquisition of direct or indirect control of a nonprofit health service plan by conversion, merger, consolidation, exercise of a right to acquire, or otherwise; and</text> </level> <level label="ii"> <text>the Commissioner:</text> <level label="1"> <text>receives notice from the commissioner of the other jurisdiction about the acquisition; and</text> </level> <level label="2"> <text>has the right to request information and documents about that acquisition.</text> </level> </level> </level> </level> <level label="b"> <text>A person shall comply with the procedures required by Subtitles 3 and 4 of this title to the extent applicable before the person seeks control of a foreign nonprofit health service plan that is authorized to do business in the State under Title 4 of this article by:</text> <level label="1"> <text>making a tender for, inviting tenders of, entering into an agreement to exchange securities for, or acquiring in the open market or otherwise any voting security of the plan;</text> </level> <level label="2"> <text>entering into any other agreement about voting securities under which the person directly or indirectly would control the plan by conversion or by exercise of a right to acquire voting securities of the plan; or</text> </level> <level label="3"> <text>entering into an agreement to merge or consolidate with or otherwise to acquire control of the plan.</text> </level> </level> <level label="c"> <text>Approval by the Commissioner of an acquisition under this section is governed by § 7-306 of this title.</text> </level> </section> <section article="gin" article_name="Insurance" number="7-502" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="5" subtitle_name="Acquisition of Health Service Plan"> <level label="a"> <text>This section applies to a nonprofit health service plan or insurer that is being merged or consolidated with or acquired by another person.</text> </level> <level label="b"> <text>Current financing money that, in accordance with regulations adopted by the Health Services Cost Review Commission, is provided by a nonprofit health service plan or insurer to a hospital for discounted hospital rates is deemed to be security for the outstanding charges that the nonprofit health service plan or insurer owes to the hospital for bills or claims for services that the hospital provided before the merger, consolidation, or acquisition.</text> </level> </section> <section article="gin" article_name="Insurance" number="7-601" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="6" subtitle_name="Registration of Insurers in Insurance Holding Company Systems"> <level label="a"> <level label="1"> <text>Except as provided in subsection (b) of this section, each authorized insurer that is a member of an insurance holding company system shall register with the Commissioner in accordance with the requirements of this subtitle.</text> </level> <level label="2"> <text>The Commissioner may allow or require any authorized insurer that is part of an insurance holding company system to register and file the information and material required under this subtitle for an affiliated insurer that is required to register under this subsection.</text> </level> </level> <level label="b"> <text>Subsection (a)(1) of this section does not apply to a foreign insurer that is organized in a jurisdiction that has adopted by statute or regulation disclosure requirements and standards substantially similar to those in this title.</text> </level> <level label="c"> <text>This subtitle does not apply to an insurer or affiliate to the extent that the Commissioner determines that this subtitle is not intended to apply to the insurer or affiliate and exempts the insurer or affiliate from this subtitle by regulation or order.</text> </level> </section> <section article="gin" article_name="Insurance" number="7-602" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="6" subtitle_name="Registration of Insurers in Insurance Holding Company Systems"> <level label="a"> <text>Except as provided in subsection (b) of this section, each insurer subject to registration under this subtitle shall register with the Commissioner within 15 days after the insurer becomes subject to registration and, for each subsequent year, annually on or before May 1.</text> </level> <level label="b"> <text>If the Commissioner extends the time for registration for good cause, the insurer shall register on or before the date the Commissioner sets.</text> </level> </section> <section article="gin" article_name="Insurance" number="7-603" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="6" subtitle_name="Registration of Insurers in Insurance Holding Company Systems"> <level label="a"> <text>Each insurer subject to registration shall file the registration statement on the form provided by the Commissioner, containing the following current information:</text> <level label="1"> <text>the corporate and capital structure, general financial condition, ownership, and management of the insurer and of any person controlling the insurer;</text> </level> <level label="2"> <text>the identity and relationship of each member of the insurance holding company system;</text> </level> <level label="3"> <text>any pledge of the insurer’s stock, including stock of a subsidiary or controlling affiliate, for a loan made to any member of the insurance holding company system;</text> </level> <level label="4"> <text>the following agreements in force, and transactions currently outstanding or that have occurred during the previous calendar year between the insurer and the insurer’s affiliates:</text> <level label="i"> <text>loans, other investments, purchases, sales, and exchanges of securities of the affiliates by the insurer or of the insurer by its affiliates;</text> </level> <level label="ii"> <text>purchases, sales, and exchanges of assets;</text> </level> <level label="iii"> <text>transactions not in the ordinary course of business;</text> </level> <level label="iv"> <text>except for insurance contracts entered into in the ordinary course of the insurer’s business, guarantees or undertakings for the benefit of an affiliate that result in an actual contingent exposure to liability of the insurer’s assets;</text> </level> <level label="v"> <text>management agreements, service contracts, and cost–sharing arrangements;</text> </level> <level label="vi"> <text>reinsurance agreements;</text> </level> <level label="vii"> <text>dividends and other distributions to shareholders; and</text> </level> <level label="viii"> <text>consolidated tax allocation agreements;</text> </level> </level> <level label="5"> <text>statements that the insurer’s board of directors oversees corporate governance and internal controls and that the insurer’s officers or senior management have approved, implemented, and continue to maintain and monitor corporate governance and internal control procedures;</text> </level> <level label="6"> <text>on request from the Commissioner and in accordance with subsection (f) of this section, financial statements of or within an insurance holding company system, including all affiliates;</text> </level> <level label="7"> <text>any other matters about transactions between the insurer and its affiliates that the registration statement form requires; and</text> </level> <level label="8"> <text>a summary outlining all items in the current registration statement that represent changes from the prior registration statement.</text> </level> </level> <level label="b"> <text>Each affiliate in an insurance holding company system shall give an insurer subject to registration under this subtitle that is in the same insurance holding company system complete and accurate information if that information is reasonably necessary to enable the insurer to comply with this subtitle.</text> </level> <level label="c"> <text>Each insurer required to register under this subtitle shall, on request of the insurance commissioner of any state where the insurer is authorized to do business, file with that commissioner a copy of the registration statement summary required by subsection (a)(8) of this section.</text> </level> <level label="d"> <text>The Commissioner may allow or require affiliated insurers subject to registration under this subtitle to file a consolidated registration statement.</text> </level> <level label="e"> <text>The Commissioner may require an insurer that is a member of an insurance holding company system and that is not subject to registration under this subtitle to provide to the Commissioner a copy of the registration statement or other information that the insurer files with the commissioner of the insurer’s domiciliary jurisdiction.</text> </level> <level label="f"> <level label="1"> <text>Financial statements required under subsection (a)(6) of this section may include annual audited financial statements filed with the U.S. Securities and Exchange Commission under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.</text> </level> <level label="2"> <text>An insurer required to file financial statements under subsection (a) of this section may satisfy the request by providing the Commissioner with the most recently filed parent corporation financial statements that have been filed with the U.S. Securities and Exchange Commission.</text> </level> </level> <level label="g"> <level label="1"> <text>Except as provided in paragraph (3) of this subsection and unless otherwise provided by the Commissioner through regulation or order, a sale, a purchase, an exchange, a loan or an extension of credit, an investment, or a guarantee involving 0.5% or less of an insurer’s admitted assets as of the December 31 immediately preceding the transaction is not material for purposes of this section.</text> </level> <level label="2"> <text>Information need not be disclosed on the registration statement filed under subsection (a) of this section if the information is not material.</text> </level> <level label="3"> <text>Paragraph (1) of this subsection does not apply for purposes of the group capital calculation or the liquidity stress test framework.</text> </level> </level> <level label="h"> <level label="1"> <text>Beginning in 2015, the ultimate controlling person of every insurer subject to registration shall file an annual enterprise risk report on or before July 1 of each year unless the Commissioner extends the time for filing for good cause.</text> </level> <level label="2"> <text>The enterprise risk report shall, to the best of the ultimate controlling person’s knowledge and belief, identify the material risks within the insurance holding company system that could pose enterprise risk to the insurer.</text> </level> <level label="3"> <text>The enterprise risk report shall be filed with the lead state commissioner of the insurance holding company system as defined and determined by the procedures in the NAIC Financial Analysis Handbook.</text> </level> <level label="4"> <text>The Commissioner may share the enterprise risk report filed under paragraph (1) of this subsection with an insurance regulatory agency in a state that has laws or regulations that the Commissioner determines are substantially similar to § 2–209(g) and (h) of this article, only if the agency agrees in writing to maintain the confidentiality and privileged status of the report.</text> </level> </level> <level label="i"> <level label="1"> <level label="i"> <text>Except as provided in paragraph (2) of this subsection, the ultimate controlling person of each insurer subject to registration under this subtitle shall concurrently file with the registration statement an annual group capital calculation as directed by the lead state commissioner of the insurance group.</text> </level> <level label="ii"> <level label="1"> <text>The report shall be completed in accordance with the NAIC group capital calculation instructions.</text> </level> <level label="2"> <text>The NAIC group capital calculation instructions may authorize the lead state commissioner to allow a controlling person that is not the ultimate controlling person to file the group capital calculation.</text> </level> </level> <level label="iii"> <text>The report shall be filed with the lead state commissioner of the insurance holding company system as determined by the lead state commissioner in accordance with the procedures in the NAIC Financial Analysis Handbook.</text> </level> </level> <level label="2"> <text>The following insurance holding company systems are exempt from filing the group capital calculation:</text> <level label="i"> <text>an insurance holding company system that:</text> <level label="1"> <text>has only one insurer within its holding company structure;</text> </level> <level label="2"> <text>only writes business and is only licensed in its domestic state; and</text> </level> <level label="3"> <text>assumes no business from any other insurer;</text> </level> </level> <level label="ii"> <text>an insurance holding company system that is required to perform a group capital calculation specified by the Federal Reserve Board, unless the Federal Reserve Board cannot share the calculation with the lead state commissioner after the lead state commissioner makes a request under the terms of information sharing agreements in effect at the time the request is made;</text> </level> <level label="iii"> <text>an insurance holding company system whose non–U.S. group–wide supervisor is located within a reciprocal jurisdiction as described in § 5–917 of this article that recognizes the U.S. state regulatory approach to group supervision and group capital;</text> </level> <level label="iv"> <text>an insurance holding company system that provides information to the lead state that meets the requirements for accreditation under the NAIC financial standards and accreditation program, either directly or indirectly through the group–wide supervisor, who has determined that the information is satisfactory to allow the lead state to comply with the NAIC group supervision approach, as detailed in the NAIC Financial Analysis Handbook; and</text> </level> <level label="v"> <text>an insurance holding company system whose non–U.S. group–wide supervisor that is not in a reciprocal jurisdiction recognizes and accepts, as the lead state commissioner specifies by regulation, the group capital calculation as the world–wide group capital assessment for U.S. insurance groups that operate in that jurisdiction.</text> </level> </level> <level label="3"> <text>Notwithstanding paragraph (2)(iii), (iv), and (v) of this subsection, the lead state commissioner shall require the group capital calculation for U.S. operations of any non–U.S.–based insurance holding company system if, after any necessary consultation with other supervisors or officials, the lead state commissioner determines that the group capital calculation is appropriate for prudential oversight and solvency monitoring purposes or for ensuring the competitiveness of the insurance marketplace.</text> </level> <level label="4"> <text>Notwithstanding the exemptions from filing the group capital calculation stated in paragraph (2) of this subsection, the lead state commissioner may exempt the ultimate controlling person from filing the annual group capital calculation or may accept a limited group capital filing or report in accordance with criteria the lead state commissioner specifies by regulation.</text> </level> <level label="5"> <text>If the lead state commissioner determines that an insurance holding company system no longer meets one or more of the requirements for an exemption from filing the group capital calculation under this subsection, the insurance holding company system shall file the group capital calculation at the next annual filing date unless the lead state commissioner grants an extension based on reasonable grounds shown.</text> </level> </level> <level label="j"> <level label="1"> <text>The ultimate controlling person of every insurer that is subject to registration under this section and included in the scope of the NAIC liquidity stress test framework shall file the results of a specific year’s liquidity stress test concurrently with the registration statement.</text> </level> <level label="2"> <text>The filing shall be made to the lead state insurance commissioner of the insurance holding company system as determined by the procedures in the NAIC Financial Analysis Handbook in accordance with paragraph (3) of this subsection.</text> </level> <level label="3"> <level label="i"> <level label="1"> <text>The NAIC liquidity stress test framework includes scope criteria applicable to a specific data year.</text> </level> <level label="2"> <text>The scope criteria are reviewed at least annually by the Financial Stability Task Force or its successor.</text> </level> <level label="3"> <text>Any changes to the NAIC liquidity stress test framework or to the data year for which the scope criteria are to be measured shall be effective on January 1 of the year following the calendar year when the changes are adopted.</text> </level> </level> <level label="ii"> <text>Insurers meeting at least one threshold of the scope criteria are considered included in the scope of the NAIC liquidity stress test framework for the specified data year unless the lead state commissioner, in consultation with the NAIC Financial Stability Task Force or its successor, determines that the insurer should not be included in the scope of the framework for that data year.</text> </level> <level label="iii"> <text>Insurers that do not trigger at least one threshold of the scope criteria are considered excluded from the scope of the NAIC liquidity stress test framework for the specified data year, unless the lead state commissioner, in consultation with the NAIC Financial Stability Task Force or its successor, determines that the insurer should be included in the scope of the framework for that data year.</text> </level> <level label="iv"> <text>On request by an insurer, the lead state commissioner may consult with the Financial Stability Task Force or its successor to address the insurer’s experience of being included in or excluded from the scope of the NAIC liquidity stress test framework on a frequent basis.</text> </level> <level label="v"> <text>The performance of, and filing of the results from, a specific year’s liquidity stress test shall comply with the NAIC liquidity stress test framework’s instructions and reporting templates for that year and any lead state insurance commissioner determinations, in consultation with the Financial Stability Task Force or its successor, included in the framework.</text> </level> </level> </level> </section> <section article="gin" article_name="Insurance" number="7-604" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="6" subtitle_name="Registration of Insurers in Insurance Holding Company Systems"> <text>The Commissioner shall terminate the registration requirement for each insurer that demonstrates that it is no longer a member of an insurance holding company system.</text> </section> <section article="gin" article_name="Insurance" number="7-605" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="6" subtitle_name="Registration of Insurers in Insurance Holding Company Systems"> <level label="a"> <level label="1"> <text>To verify the information required in the insurer’s registration statement and in the annual enterprise risk report, and any addition or amendment to the registration statement or the annual enterprise risk report, and in addition to the powers granted under §§ 2–205 through 2–209 of this article relating to the examination of insurers, the Commissioner may order an insurer subject to registration under this subtitle to produce:</text> <level label="i"> <text>those records, books, or papers in the possession of the insurer or its affiliates that are necessary to verify the registration statement; and</text> </level> <level label="ii"> <text>additional information relevant to the registration statement.</text> </level> </level> <level label="2"> <text>The Commissioner shall examine the materials produced under this subsection at the time and place prescribed in §§ 2–205 through 2–209 of this article.</text> </level> </level> <level label="b"> <level label="1"> <text>The Commissioner may conduct an examination under subsection (a) of this section only:</text> <level label="i"> <text>if the examination of the insurer under §§ 2–205 through 2–209 of this article is inadequate, or the interests of the policyholders of the insurer are being adversely affected; and</text> </level> <level label="ii"> <text>within 3 years after the filing of the registration statement or the addition or amendment to the registration statement.</text> </level> </level> <level label="2"> <text>In a matter involving fraud, the 3–year limitation period of this subsection does not apply.</text> </level> </level> <level label="c"> <level label="1"> <text>The Commissioner may retain, at the insurer’s expense, the services of accountants, attorneys, actuaries, and other experts not otherwise a part of the Commissioner’s staff as may be reasonably necessary to assist in the conduct of an examination under subsection (a) of this section.</text> </level> <level label="2"> <text>The accountants, attorneys, actuaries, and other experts retained under this subsection are under the direction and control of the Commissioner and act only in an advisory capacity.</text> </level> </level> <level label="d"> <text>An insurer that produces materials for an examination under subsection (a) of this section is liable for and shall pay the expense of the examination in accordance with § 2–208 of this article.</text> </level> <level label="e"> <text>With regard to an examination under subsection (a) of this section, the Commissioner has the authority provided under § 2–203 of this article.</text> </level> </section> <section article="gin" article_name="Insurance" number="7-606" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="6" subtitle_name="Registration of Insurers in Insurance Holding Company Systems"> <level label="a"> <text>An insurer, a member of an insurance holding company system, or any other person may file with the Commissioner a disclaimer of affiliation with an authorized insurer that fully discloses:</text> <level label="1"> <text>all material relationships and bases for affiliation between the person filing the disclaimer and the authorized insurer; and</text> </level> <level label="2"> <text>the basis for disclaiming the affiliation.</text> </level> </level> <level label="b"> <level label="1"> <text>Within 30 days after receipt of a filing under subsection (a) of this section, the Commissioner shall give all parties in interest notice and an opportunity to be heard.</text> </level> <level label="2"> <text>Within 30 days after the close of the notice period under paragraph (1) of this subsection, the Commissioner may disallow a disclaimer based on specific findings of fact.</text> </level> <level label="3"> <text>If within 30 days after the close of the notice period the Commissioner has not disallowed the disclaimer, the disclaiming party is relieved of its duty to register or report under this subtitle, and the insurer is relieved of any duty to register or report under this subtitle that arises out of the insurer’s relationship with the person filing the disclaimer.</text> </level> <level label="4"> <text>In the event of disallowance, the disclaiming party may request an administrative hearing, which shall be granted.</text> </level> </level> </section> <section article="gin" article_name="Insurance" number="7-607" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="6" subtitle_name="Registration of Insurers in Insurance Holding Company Systems"> <level label="a"> <text>Failure to file the registration statement, summary, or enterprise risk report required by this subtitle in the time specified in this subtitle is a violation of this title.</text> </level> <level label="b"> <level label="1"> <text>An insurer that does not file a registration statement or summary required under § 7–603(a) of this subtitle on or before May 1 or the date the Commissioner sets in accordance with § 7–602(b) of this subtitle, may be subject to a penalty of up to:</text> <level label="i"> <text>$500 for each day from May 1 through May 10;</text> </level> <level label="ii"> <text>$1,000 for each day from May 11 through May 31; and</text> </level> <level label="iii"> <text>$5,000 for each day after May 31.</text> </level> </level> <level label="2"> <text>In determining the amount of any financial penalty to be imposed under this section, the Commissioner shall consider the following factors:</text> <level label="i"> <text>the seriousness of the violation;</text> </level> <level label="ii"> <text>the good faith of the violator;</text> </level> <level label="iii"> <text>the violator’s history of previous violations;</text> </level> <level label="iv"> <text>the deleterious effect of the violation on the public and the insurance industry; and</text> </level> <level label="v"> <text>the assets of the violator.</text> </level> </level> </level> </section> <section article="gin" article_name="Insurance" number="7-608" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="6" subtitle_name="Registration of Insurers in Insurance Holding Company Systems"> <text>Whenever it appears to the Commissioner that a person has committed a violation of § 7–603(h) of this subtitle that prevents a full understanding of the enterprise risk to the insurer by affiliates or by the insurance holding company system, the violation may serve as an independent basis for disapproving dividends or distributions and placing the insurer under an order of supervision in accordance with § 7–804 of this title.</text> </section> <section article="gin" article_name="Insurance" number="7-701" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="7" subtitle_name="Transactions Within Insurance Holding Company Systems"> <level label="a"> <text>This subtitle applies to insurers that are subject to registration under Subtitle 6 of this title.</text> </level> <level label="b"> <text>This subtitle does not authorize an insurer that is a member of an insurance holding company system to enter into a transaction that otherwise would be contrary to law for an insurer that is not a member of the same insurance holding company system.</text> </level> </section> <section article="gin" article_name="Insurance" number="7-702" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="7" subtitle_name="Transactions Within Insurance Holding Company Systems"> <text>Each transaction within an insurance holding company system to which an insurer subject to registration under Subtitle 6 of this title is a party is subject to the following standards:</text> <level label="1"> <text>the terms shall be fair and reasonable in light of the purposes of this title;</text> </level> <level label="2"> <text>the records of each party shall clearly and accurately disclose the precise nature and details of the transaction, including accounting information necessary to support the reasonableness of the charges or fees to the parties;</text> </level> <level label="3"> <text>after the transaction, including any dividend or distribution to shareholder affiliates, the insurer has assets and surplus as regards policyholders that:</text> <level label="i"> <text>bear a reasonable relation to the insurer’s outstanding liabilities; and</text> </level> <level label="ii"> <text>are adequate to meet the insurer’s financial needs;</text> </level> </level> <level label="4"> <text>charges or fees for services performed shall be reasonable;</text> </level> <level label="5"> <text>expenses incurred and payments received shall be allocated to the insurer in conformity with customary insurance accounting practices consistently applied; and</text> </level> <level label="6"> <text>agreements, including management agreements, service contracts, tax allocation agreements, or cost–sharing agreements, shall include the provisions that the Commissioner requires by regulation.</text> </level> </section> <section article="gin" article_name="Insurance" number="7-703" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="7" subtitle_name="Transactions Within Insurance Holding Company Systems"> <level label="a"> <level label="1"> <text>Before a domestic insurer and another member of the same insurance holding company system enter into any of the transactions specified in subsection (d) of this section, including amendments or modifications of affiliate agreements previously filed under this section, the domestic insurer shall notify the Commissioner in writing of its intention to enter into the transaction.</text> </level> <level label="2"> <text>The notice for amendments or modifications shall include the reasons for the amendments or modifications and the projected financial impact of the amendments or modifications on the domestic insurer.</text> </level> <level label="3"> <text>A domestic insurer that intends to terminate an agreement or other transaction previously filed under this section shall provide the Commissioner with written notice within 30 days after the termination of the agreement or other transaction.</text> </level> </level> <level label="b"> <text>The insurer shall notify the Commissioner under subsection (a) of this section:</text> <level label="1"> <text>at least 30 days before the transaction is to be entered into; or</text> </level> <level label="2"> <text>if the Commissioner allows a shorter notice period, within the time that the Commissioner sets.</text> </level> </level> <level label="c"> <text>A domestic insurer and another member of the same insurance holding company system may enter into, amend, or modify a transaction or an agreement under this section only if, within the notice period under subsection (b) of this section, the Commissioner does not disapprove the transaction.</text> </level> <level label="d"> <text>The following transactions are subject to subsections (a), (b), and (c) of this section:</text> <level label="1"> <text>a sale, purchase, exchange, loan, or extension of credit, if, as of the December 31 immediately preceding the transaction, the amount of the transaction equals or exceeds:</text> <level label="i"> <text>with respect to a life insurer, 3% of the insurer’s admitted assets; and</text> </level> <level label="ii"> <text>with respect to an insurer other than a life insurer, the lesser of 3% of the insurer’s admitted assets and 25% of surplus as regards policyholders;</text> </level> </level> <level label="2"> <text>a loan or extension of credit by an insurer to a person that is not an affiliate if:</text> <level label="i"> <text>the parties have an agreement or understanding that the proceeds of the transaction, as a whole or in substantial part, are to be used to make loans or extensions of credit to purchase assets of or to make investments in an affiliate of the insurer; and</text> </level> <level label="ii"> <text>as of the December 31 immediately preceding the transaction, the amount of the transaction equals or exceeds:</text> <level label="1"> <text>with respect to a life insurer, 3% of the insurer’s admitted assets; and</text> </level> <level label="2"> <text>with respect to an insurer other than a life insurer, the lesser of 3% of the insurer’s admitted assets and 25% of surplus as regards policyholders;</text> </level> </level> </level> <level label="3"> <text>in accordance with subsection (h) of this section, a reinsurance agreement, or a modification to a reinsurance agreement, including an agreement that requires as consideration the transfer of assets from an insurer to a person that is not its affiliate, if, as of the December 31 immediately preceding the transaction, the amount of the reinsurance premium or change in the insurer’s liabilities or the projected reinsurance premium or change in the insurer’s liabilities in any of the next 3 years equals or exceeds 5% of the insurer’s surplus as regards policyholders;</text> </level> <level label="4"> <text>all reinsurance pooling agreements;</text> </level> <level label="5"> <text>a management agreement, service contract, tax allocation agreement, or cost–sharing arrangement;</text> </level> <level label="6"> <text>subject to subsection (i) of this section, guarantees made by a domestic insurer;</text> </level> <level label="7"> <text>direct or indirect investments in a person that controls the insurer or an affiliate of the insurer in an amount that, together with its present holdings in the investments, exceeds 2.5% of the insurer’s surplus as regards policyholders;</text> </level> <level label="8"> <text>notwithstanding item (7) of this subsection, any direct or indirect investment in or acquisition of a subsidiary of the insurer; and</text> </level> <level label="9"> <text>a material transaction, as specified by regulation, that the Commissioner determines may adversely affect the interests of the insurer’s policyholders.</text> </level> </level> <level label="e"> <text>In reviewing transactions under subsection (d) of this section, the Commissioner shall consider whether a transaction:</text> <level label="1"> <text>complies with the standards stated in § 7–702 of this subtitle; or</text> </level> <level label="2"> <text>potentially adversely affects the interests of policyholders.</text> </level> </level> <level label="f"> <level label="1"> <text>A transaction that does not conform to this section is a violation of this title.</text> </level> <level label="2"> <text>In addition to the sanctions in §§ 7–802, 7–803, 7–805, and 7–807 of this title, the Commissioner may set aside and rescind a transaction that the Commissioner finds does not conform to this section at the initiative of the Commissioner or otherwise under applicable law.</text> </level> <level label="3"> <text>Within 90 days after the date that the Commissioner receives information about a transaction that the Commissioner finds does not conform to this section, the Commissioner shall give the insurer notice of the proposed action to set aside or rescind the transaction and an opportunity for a hearing.</text> </level> </level> <level label="g"> <level label="1"> <text>A domestic insurer and another member of the same insurance holding company system may not enter into a transaction that is part of a plan or series of like transactions if the purpose of making separate transactions is to avoid exceeding limitations under this section and the review of the transaction that otherwise would occur.</text> </level> <level label="2"> <text>If the Commissioner determines that separate transactions were entered into during any 12–month period in violation of paragraph (1) of this subsection, the Commissioner may impose any sanction authorized by §§ 7–802, 7–803, 7–805, and 7–807 of this title.</text> </level> </level> <level label="h"> <text>A reinsurance agreement subject to subsection (d)(3) of this section includes an agreement that requires as consideration the transfer of assets from an insurer to a nonaffiliate if an agreement or understanding exists between the insurer and nonaffiliate that any portion of the assets will be transferred to one or more affiliates of the insurer.</text> </level> <level label="i"> <level label="1"> <text>A guarantee that is quantifiable as to amount is not subject to the notice requirements of subsection (d)(6) of this section unless the guarantee exceeds the lesser of 0.5% of the insurer’s admitted assets or 10% of the insurer’s surplus as regards policyholders as of the December 31 immediately preceding the guarantee.</text> </level> <level label="2"> <text>All guarantees made by a domestic insurer that are not quantifiable as to amount are subject to the notice requirements of subsection (d)(6) of this section.</text> </level> </level> </section> <section article="gin" article_name="Insurance" number="7-704" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="7" subtitle_name="Transactions Within Insurance Holding Company Systems"> <text>A domestic insurer shall notify the Commissioner within 30 days after making any investment in one corporation if the total investment in the corporation by the domestic insurer’s insurance holding company system exceeds 10% of the corporation’s voting securities.</text> </section> <section article="gin" article_name="Insurance" number="7-705" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="7" subtitle_name="Transactions Within Insurance Holding Company Systems"> <level label="a"> <text>Except as provided in § 7-706 of this subtitle, before an insurer subject to registration under Subtitle 6 of this title pays a dividend or makes a distribution to its shareholders, the insurer shall notify the Commissioner of its intention to pay the dividend or make the distribution.</text> </level> <level label="b"> <text>The insurer shall notify the Commissioner under subsection (a) of this section:</text> <level label="1"> <text>within 5 business days after the declaration; and</text> </level> <level label="2"> <text>at least 10 days before the payment or distribution date.</text> </level> </level> <level label="c"> <text>The Commissioner shall keep the notice required by subsection (a) of this section confidential until the payment or distribution date.</text> </level> <level label="d"> <text>If the Commissioner finds that, after the payment or distribution to shareholders under this section, the insurer’s surplus as regards policyholders would be inadequate or could lead the insurer to a hazardous financial condition, the Commissioner may order that the dividend not be paid.</text> </level> </section> <section article="gin" article_name="Insurance" number="7-706" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="7" subtitle_name="Transactions Within Insurance Holding Company Systems"> <level label="a"> <level label="1"> <text>In this section, “earned surplus” means the part of surplus that, after deduction of all losses, represents the net earnings, gains, or profits that have not been distributed to shareholders as dividends, transferred to stated capital, transferred to capital surplus, or applied to other purposes allowed by law.</text> </level> <level label="2"> <text>In this section, “earned surplus” does not include unrealized capital gains or reevaluation of assets.</text> </level> </level> <level label="b"> <text>In this section, “extraordinary dividend” or “extraordinary distribution” includes any dividend or distribution of cash or other property with a fair market value, that when combined with the fair market value of any other dividends or distributions made in the preceding 12 months exceeds the lesser of:</text> <level label="1"> <text>10% of the insurer’s surplus as regards policyholders as of December 31 of the preceding year; or</text> </level> <level label="2"> <level label="i"> <text>for a life insurer, the net gain from operations of the insurer not including:</text> <level label="1"> <text>realized capital gains for the 12-month period ending December 31 of the preceding year; and</text> </level> <level label="2"> <text>pro rata distributions of any class of the insurer’s own securities; or</text> </level> </level> <level label="ii"> <text>for an insurer that is not a life insurer, the net investment income of the insurer not including:</text> <level label="1"> <text>realized capital gains for the 12-month period ending December 31 of the preceding year; and</text> </level> <level label="2"> <text>pro rata distributions of any class of the insurer’s own securities.</text> </level> </level> </level> </level> <level label="c"> <level label="1"> <text>In determining whether a dividend or distribution is extraordinary under this section, an insurer that is not a life insurer may carry forward net investment income from the 3 calendar years prior to the preceding calendar year that has not already been paid out as dividends.</text> </level> <level label="2"> <text>The amount carried forward under paragraph (1) of this subsection shall be computed by taking the net investment income from the 3 calendar years prior to the preceding calendar year:</text> <level label="i"> <text>not including realized capital gains; and</text> </level> <level label="ii"> <text>minus dividends paid in the preceding 3 calendar years.</text> </level> </level> </level> <level label="d"> <text>An insurer that is not a life insurer may pay an extraordinary dividend only out of earned surplus.</text> </level> <level label="e"> <text>A domestic insurer may not pay an extraordinary dividend or make any other extraordinary distribution to its shareholders unless:</text> <level label="1"> <text>the insurer provides notice of the declaration to the Commissioner at least 30 days before the declaration is made; and</text> </level> <level label="2"> <text>the Commissioner has approved or not disapproved the declaration within the 30 days following notice.</text> </level> </level> <level label="f"> <level label="1"> <text>Notwithstanding any other provision of law, an insurer may declare an extraordinary dividend or extraordinary distribution conditioned on the Commissioner’s approval.</text> </level> <level label="2"> <text>A conditional declaration confers no rights on shareholders unless, within 30 days after the Commissioner receives the notice under subsection (e) of this section, the Commissioner either approves the payment or distribution, or does not disapprove the payment or distribution.</text> </level> </level> </section> <section article="gin" article_name="Insurance" number="7-801" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="8" subtitle_name="Enforcement"> <text>Any person that obtains control of a domestic insurer is subject to the jurisdiction of the courts of the State with regard to any action, whether initiated by the Commissioner or otherwise, arising out of a violation of this title.</text> </section> <section article="gin" article_name="Insurance" number="7-802" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="8" subtitle_name="Enforcement"> <level label="a"> <text>In addition to any other penalty provided by law, a person that willfully violates this title or any regulation adopted under this title is subject to a penalty of up to $10,000 for the first day of violation and up to $1,000 for each additional day that the violation continues.</text> </level> <level label="b"> <text>In determining the amount of any financial penalty to be imposed under this section, the Commissioner shall consider the following factors:</text> <level label="1"> <text>the seriousness of the violation;</text> </level> <level label="2"> <text>the good faith of the violator;</text> </level> <level label="3"> <text>the violator’s history of previous violations;</text> </level> <level label="4"> <text>the deleterious effect of the violation on the public and the insurance industry; and</text> </level> <level label="5"> <text>the assets of the violator.</text> </level> </level> <level label="c"> <text>Before imposing a penalty under this subsection, the Commissioner:</text> <level label="1"> <text>shall give the person that allegedly committed the violation notice and an opportunity for hearing; and</text> </level> <level label="2"> <text>must find that the person willfully committed the violation.</text> </level> </level> </section> <section article="gin" article_name="Insurance" number="7-802.1" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="8" subtitle_name="Enforcement"> <level label="a"> <text>A director or an officer of an insurance holding company system who knowingly participates in, assents to, or allows any of the officers or agents of an insurer to engage in transactions or investments that have not been properly reported or submitted under Subtitles 6 and 7 of this title, shall pay, in the director’s or officer’s individual capacity, a civil penalty in accordance with § 7–802 of this subtitle, after notice and an opportunity for hearing before the Commissioner.</text> </level> <level label="b"> <text>In determining the amount of the civil penalty, the Commissioner shall take into account the factors in § 7–802(b) of this subtitle.</text> </level> <level label="c"> <level label="1"> <text>Whenever it appears to the Commissioner that an insurer subject to this title, or a director, an officer, an employee, or an agent of the insurer, has engaged in a transaction or entered into a contract that is subject to Subtitle 7 of this title and that would not have been approved if the approval had been requested, the Commissioner may order the insurer to cease and desist immediately any further activity under that transaction or contract.</text> </level> <level label="2"> <text>After notice and an opportunity for hearing, the Commissioner also may order the insurer to void any contracts and restore the status quo if, in the Commissioner’s judgment, the action is in the best interest of the policyholders, the creditors, or the public.</text> </level> </level> </section> <section article="gin" article_name="Insurance" number="7-803" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="8" subtitle_name="Enforcement"> <level label="a"> <text>Any violation of this title is an unfair trade practice in the business of insurance and is subject to the provisions of Title 27 of this article.</text> </level> <level label="b"> <text>In addition to any other penalty provided by law, with respect to a person that engages in an unfair trade practice, the Commissioner, after giving the person notice and an opportunity for a hearing, may take any or all of the following actions:</text> <level label="1"> <text>deny the person’s application for a license or certificate of authority, refuse to renew or revoke the person’s license or certificate of authority, or suspend the person’s license or certificate of authority for a period not exceeding 1 year;</text> </level> <level label="2"> <text>proceed against the person in a court of competent jurisdiction in or outside the State to enjoin an act that would violate this title or to invalidate a transaction made in violation of this title; or</text> </level> <level label="3"> <text>order compliance with this title, including the filing of evidence of compliance and periodic reports about that compliance, and enforce those orders by denying, refusing to renew, suspending, or revoking any license or certificate of authority or otherwise under the laws of the State.</text> </level> </level> </section> <section article="gin" article_name="Insurance" number="7-804" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="8" subtitle_name="Enforcement"> <text>If the Commissioner finds that a violation of this title impairs the financial condition of a domestic insurer so as to threaten insolvency or make the further transaction of business hazardous to policyholders, creditors, shareholders, or the public, the Commissioner may institute proceedings in accordance with Title 9, Subtitle 2 of this article to take possession of the domestic insurer’s property and conduct its business.</text> </section> <section article="gin" article_name="Insurance" number="7-805" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="8" subtitle_name="Enforcement"> <level label="a"> <text>If a person acquires or offers to acquire stock of an insurer or of an insurance holding company in violation of Subtitle 3 of this title, the following persons may petition a court of competent jurisdiction in the State for injunctive and other appropriate relief:</text> <level label="1"> <text>the issuer of the stock;</text> </level> <level label="2"> <text>a stockholder of the issuer;</text> </level> <level label="3"> <text>if the issuer is an insurance holding company, a stockholder of a subsidiary that is an insurer;</text> </level> <level label="4"> <text>a stockholder of the insurer; or</text> </level> <level label="5"> <text>the Commissioner.</text> </level> </level> <level label="b"> <text>Whenever it appears to the Commissioner that an insurer or a director, an officer, an employee, or an agent of the insurer has committed or is about to commit a violation of this title or any regulation or order of the Commissioner under this title, the Commissioner may petition a court of competent jurisdiction in the State for an order enjoining the insurer or the director, officer, employee, or agent from violating or continuing to violate this title or any regulation or order, and for other equitable relief that the nature of the case and the interest of the insurer’s policyholders, creditors, and shareholders or the public may require.</text> </level> <level label="c"> <level label="1"> <text>No security that is the subject of an agreement or arrangement regarding acquisition, or that is acquired or to be acquired contrary to this title or any regulation or order of the Commissioner under this title, may be voted at any shareholder’s meeting, or may be counted for quorum purposes, and any action of shareholders requiring the affirmative vote of a percentage of shares may be taken as though the securities were not issued and outstanding.</text> </level> <level label="2"> <text>An action taken at the meeting may not be invalidated by the voting of the securities, unless the action would materially affect control of the insurer or unless the courts of this State have so ordered.</text> </level> <level label="3"> <text>If an insurer or the Commissioner has reason to believe that any security of the insurer has been or is about to be acquired contrary to this title or any regulation or order of the Commissioner under this title, the insurer or the Commissioner may petition a court of competent jurisdiction in the State:</text> <level label="i"> <text>to enjoin any offer, request, invitation, agreement, or acquisition made contrary to Subtitle 4 of this title or any regulation or order of the Commissioner under that subtitle;</text> </level> <level label="ii"> <text>to enjoin the voting of any security so acquired;</text> </level> <level label="iii"> <text>to void any vote of the security already cast at any meeting of shareholders; and</text> </level> <level label="iv"> <text>for other equitable relief that the nature of the case and the interest of the insurer’s policyholders, creditors, and shareholders or the public may require.</text> </level> </level> </level> <level label="d"> <level label="1"> <text>In any case where a person has acquired or is proposing to acquire any voting securities in violation of this title or any regulation or order of the Commissioner under this title, a court of competent jurisdiction in the State, on notice that the court considers appropriate, on the application of the insurer or the Commissioner, may seize or sequester any voting securities of the insurer owned directly or indirectly by the person and issue an order appropriate to carry out this title.</text> </level> <level label="2"> <text>Notwithstanding any other law, for the purposes of this section, the location of the ownership of the securities of domestic insurers shall be deemed to be in the State.</text> </level> </level> </section> <section article="gin" article_name="Insurance" number="7-806" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="8" subtitle_name="Enforcement"> <level label="a"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection, when an order for liquidation, conservation, or rehabilitation of a domestic insurer is entered, the receiver appointed under the order may recover for the domestic insurer the following distributions and payments made within 1 year before the petition for liquidation, conservation, or rehabilitation was filed:</text> <level label="i"> <text>from any parent corporation, holding company, affiliate, or person that otherwise controlled the domestic insurer, the amount of distributions, other than distributions of shares of the same class of stock, paid by the domestic insurer on its capital stock; and</text> </level> <level label="ii"> <text>any payment in the form of a bonus, termination settlement, or extraordinary lump sum salary adjustment made by the domestic insurer or its subsidiaries to a director, officer, or employee.</text> </level> </level> <level label="2"> <text>A distribution is not recoverable under this section if the parent or affiliate shows that when the distribution was paid:</text> <level label="i"> <text>the distribution was lawful and reasonable; and</text> </level> <level label="ii"> <text>the domestic insurer did not know and could not reasonably have known that the distribution might adversely affect the ability of the domestic insurer to fulfill its contractual obligations.</text> </level> </level> <level label="3"> <text>The maximum amount recoverable under this section is the amount needed in excess of all other available assets of the impaired or insolvent domestic insurer to pay the contractual obligations of the impaired or insolvent domestic insurer and to reimburse any guaranty funds.</text> </level> </level> <level label="b"> <level label="1"> <text>A person that was a parent corporation, holding company, or person that otherwise controlled the domestic insurer or affiliate when a distribution was paid is liable for an amount not exceeding the distribution received.</text> </level> <level label="2"> <text>A person that otherwise controlled the domestic insurer when a distribution was declared is liable for an amount not exceeding the amount that the person would have received in an immediate distribution.</text> </level> <level label="3"> <text>Two or more persons that are liable with respect to the same distribution are jointly and severally liable.</text> </level> <level label="4"> <text>To the extent that a person liable to pay claims under this subsection is insolvent or otherwise fails to pay claims due, the liable person’s parent corporation or holding company and any other person that otherwise controlled the liable person when the distribution was paid are jointly and severally liable for any resulting deficiency in the amount recovered from the domestic insurer’s parent corporation or holding company or any other person that otherwise controlled the domestic insurer.</text> </level> </level> </section> <section article="gin" article_name="Insurance" number="7-807" title_number="7" title_name="Maryland Insurance Acquisitions Disclosure and Control Act" subtitle_number="8" subtitle_name="Enforcement"> <level label="a"> <level label="1"> <text>Whenever it appears to the Commissioner that any insurer or any director, officer, employee, or agent of the insurer has committed a willful violation of this title or any regulation adopted or order issued under this title, the Commissioner may institute criminal proceedings in a court of competent jurisdiction against the insurer or the responsible director, officer, employee, or agent.</text> </level> <level label="2"> <text>Any insurer that willfully violates this title or any regulation adopted or order issued under this title may be fined in accordance with subsection (b) of this section.</text> </level> </level> <level label="b"> <level label="1"> <text>Any officer, director, employee, or agent of an insurance holding company system who willfully and knowingly subscribes to or makes or causes to be made any false statement, report, or filing with the intent to deceive the Commissioner in the performance of the Commissioner’s duties under this article is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $100,000 or imprisonment not exceeding 5 years or both.</text> </level> <level label="2"> <text>Any fines imposed under this section shall be paid by the officer, director, employee, or agent in his or her individual capacity.</text> </level> </level> </section>