Title 31 — Subtitle 04. Insurers

Regulation .02 of this chapter is applicable to a person who acts as an insurer in this State, including dental plan organizations, fraternal benefit societies, health maintenance organizations, and nonprofit health service plans.

Regulations .03 and .04 of this chapter are applicable to a person who acts as an insurer in this State, including dental plan organizations, fraternal benefit societies, health maintenance organizations, nonprofit health service plans, and accredited reinsurers.

In this regulation, “accreditated state” means a state in which its insurance regulatory agency meets the accreditation requirements of the National Association of Insurance Commissioners in accordance with its Financial Regulation Standards and Accreditation Program.

Except as provided in §C of this regulation, the Commissioner shall examine each foreign authorized insurer or alien authorized insurer whenever the Commissioner considers advisable and at least once every 5 years.

Exception.

This regulation applies to:

The Commissioner, or an examiner designated by the Commissioner, shall conduct an examination authorized under Insurance Article, Annotated Code of Maryland, or Health-General Article, Annotated Code of Maryland, in accordance with the Examiners' Handbook adopted by the National Association of Insurance Commissioners and any other guidelines or procedures considered necessary by the Commissioner.

Time Period for Completion and Filing Report.

In this chapter, the following terms have the meanings indicated.

Terms Defined.

Biographical affidavits shall be submitted on the individuals required by the applicable filing when:

Upon written request of the Commissioner and within 30 days of such a request, a foreign entity holding a current certificate of authority in this State that had a change in principal management shall provide a biographical affidavit for the affiant listed in the request.

For any change in principal management of a domestic entity, a person shall submit a biographical affidavit for the affiant within 30 days of the date of change.

Form. Each biographical affidavit required by this chapter shall be submitted to the Commissioner and the approved independent third party in a legible format, in the most recent form made available by the NAIC.

Contents. The biographical affidavit requires an affiant to provide information, including the affiant’s employment history, education, personal information, and character.

Date. Biographical affidavits must be certified by the affiant, notarized, and dated no earlier than 1 year prior to the date of submission of the application or statement, or management change.

NAIC Disclosure and Authorization Concerning Background Form.

The applicant is responsible for selecting an independent third party to perform the verification of the information contained in all submitted biographical affidavits.

When selecting the independent third party, the applicant:

The applicant is responsible for the payment of the services provided by the approved independent third party for the preparation and submission of the background report to the Commissioner.

Contents. A background report shall conform to the NAIC Background Investigation Guidelines and the Best Practices for NAIC Background Investigations for the preparation and content of the response from an approved independent third party.

Submission Requirements.

Annual Statements.

Quarterly Statements.

Annual Audited Financial Statements.

Definition.

Filings. The filings required by §§C and D of this regulation shall be made in accordance with the Annual Statement Instructions adopted by the NAIC.

Domestic Companies.

Foreign Companies

An application of a foreign stock or mutual insurance company for a license to transact the insurance business in Maryland may not be considered until it has met the requirements of either §B or C of this regulation.

The foreign stock or mutual insurance company shall have continuously, actively, and successfully transacted the business of insurance for at least 2 years immediately before the making of the application. However, the Commissioner may waive the 2-year requirement, if the Commissioner considers it in the public interest. In the case of reorganization, merger, or consolidation of stock or mutual insurance companies, the surviving company or new company may, in the discretion of the Commissioner, be considered as having the age of the eldest company which is a party to the reorganization, merger, or consolidation for the purpose of complying with the requirements of this regulation.

In the case of a foreign stock company making application within the 2-year period in §B of this regulation, the company shall have a capital of at least $3,000,000 and a surplus of at least $4,000,000 (in excess of its capital stock), and, in the case of a foreign mutual company making application within the 2-year period in §B of this regulation, a surplus of at least $7,000,000 if the company's assets are invested substantially in accordance with the Insurance Laws of Maryland governing investments, and will be maintained on the same basis.

All companies, both foreign and domestic, shall have ready for convenient inspection by examiners from this Administration both of the following:

The following two samples meet Insurance Administration requirements and should be followed closely by domestic companies, though they may pass additional board of directors' or trustees' resolutions or bylaws or require additional information on their questionnaires.

Foreign companies will be allowed sufficient latitude in the forms they use, so that they will not be obliged to use a special form merely to satisfy Maryland requirements. However, they should be substantially equivalent or more than equivalent in their breadth of coverage and the strictness of their requirements. The variances should not have the effect of lessening or weakening the requirements of the samples.

Be It Resolved That all Officers, Directors, Trustees and Employees of the Company in their transactions with others are expected to act in the best interests of the Company and not for their own advantage.

Resolved Further, That this policy requires that—

Resolved Further, That the officer of the Company to whom the questionnaires are returned must refer any conflict, disclosed to him, to the Board for review and appropriate action on or before ___________ 20__, and that a similar questionnaire shall be completed and returned in each succeeding year.

Do you or does any member of your family have any relationships or engage in any activities that might impair your independence of judgment concerning Company business?

Do you or does any member of your family have any personal financial interests that might impair your independence of judgment or influence your decisions or actions concerning Company business in the direction of such personal financial interests?

Have you accepted gifts, benefits, or unusual hospitality that might tend in any way to impair your independence of judgment or affect your decisions or actions concerning Company business?

This chapter does not apply to any insurer if 95 percent or more of its equity securities is owned or controlled by a parent or an affiliated insurer and the remaining securities are held of record by less than 500 persons. A domestic stock insurer which files with the Securities and Exchange Commission with respect to any class of securities forms of proxies, consents, and authorizations complying with the requirements of the Securities Exchange Act of 1934, as amended, and its applicable regulations, is exempt from the provisions of this chapter with respect to that class of securities.

A domestic stock insurer that has any class of equity securities held of record by 300 or more persons, or any director, officer, or employee of that insurer, or any other person, may not solicit, or permit the use of the person's name to solicit, by mail or otherwise, any proxy, consent, or authorization in respect to any class of equity securities in contravention of this regulation and Schedules A and B in Regulations .14 and .15 of this chapter.

Unless proxies, consents, or authorizations with respect to any class of equity securities of a domestic insurer subject to §B of this regulation are solicited by or on behalf of the management of the insurer from the holders of record of the securities in accordance with this chapter and its schedules prior to any annual or other meeting of the security holders, the insurer shall file with the Commissioner and transmit to every security holder who is entitled to vote in regard to any matter to be acted upon at the meeting and from whom a proxy is not solicited a written information statement containing the information specified in Schedule C of Regulation .16 of this chapter.

In this chapter, the following terms have the meanings indicated.

Terms Defined.

Regulation .10 of this chapter applies to every solicitation that is subject to Regulation .01 of this chapter.

Regulations .02—.09 and Regulation .11 of this chapter apply to every solicitation that is subject to Regulation .01 except the following:

A solicitation subject to this chapter may not be made unless each person solicited is concurrently furnished or has previously been furnished with a written proxy statement containing the information specified in Schedule A.

Annual Report.

Two copies of the report sent to security holders pursuant to this regulation shall be mailed to the Commissioner not later than the date on which the report was first sent or given to security holders, or the date on which preliminary copies of solicitation material are filed pursuant to Regulation .07 of this chapter, whichever date is later.

If the issuer knows that securities of any class entitled to vote at a meeting with respect to which the issuer intends to solicit proxies, consents, or authorizations are held of record by a broker, dealer, bank, or voting trustee, or their nominees, the issuer shall inquire of the record holder at least 10 days before the record date for the meeting of security holders whether other persons are the beneficial owners of the securities and, if so, the number of copies of the proxy and other soliciting material and, in the case of an annual meeting at which directors are to be elected, the number of copies of the annual report to security holders, necessary to supply these materials to beneficial owners. The issuer shall supply the record holder in a timely manner with additional copies assembled in a form and at a place the record holder may reasonably request, in order to address and send one copy to each beneficial owner of securities so held and shall, upon the request of the record holder, pay its reasonable expenses for mailing the materials to security holders to whom the material is sent.

Form of Proxy.

Contents.

A proxy may confer discretionary authority to vote with respect to any of the following matters:

A proxy may not confer authority to vote for the election of any individual to any office for which a bona fide nominee is not named in the proxy statement, or to vote at any annual meeting, other than the next annual meeting (or any adjournment of it), to be held after the date on which the proxy statement and form of proxy are first sent or given to security holders. A person is not considered to be a bona fide nominee and may not be named the bona fide nominee unless the individual has consented to being named in the proxy statement and to serve if elected.

The proxy statement or form of proxy shall provide, subject to reasonable specified conditions, that the securities represented by the proxy will be voted and that, if the person solicited specifies by means of a ballot provided pursuant to §B of this regulation a choice with respect to any matter to be acted upon, the securities will be voted in accordance with specifications so made.

The information included in the proxy statement shall be clearly presented, the statements made shall be divided into groups according to subject matter, and the various groups of statements shall be preceded by appropriate headings.

All proxy statements shall disclose, under an appropriate caption, the date by which proposals of security holders intended to be presented at the next annual meeting shall be received by the issuer for inclusion in the issuer's proxy statement and form of proxy relating to that meeting. This date shall be calculated in accordance with the provisions of Regulation .09A of this chapter. If the date of the next annual meeting is subsequently advanced by more than 30 calendar days or delayed by more than 90 calendar days from the date of the annual meeting to which the proxy statement relates, the issuer shall, in a timely manner, inform security holders of the change, and the date by which proposals of security holders must be received, by any means reasonably calculated to so inform them.

Two preliminary copies of the proxy statement and form of proxy, and any other soliciting material to be furnished to security holders with the proxy (or the information statement pursuant to Schedule C), shall be filed with the Commissioner at least 10 days before the date final copies of the material are first sent or given to security holders, or a shorter period before that date as the Commissioner may authorize upon a showing of good cause.

Two preliminary copies of any additional soliciting material relating to the same meeting or subject matter to be furnished to security holders after the proxy statement shall be filed with the Commissioner at least 2 days (exclusive of Saturdays, Sundays, and holidays) before the date copies of the material are first sent or given to security holders, or a shorter period before the date as the Commissioner may authorize upon a showing of good cause.

Two definitive copies of the proxy statement, form of proxy, and all other soliciting material (or the information statement), in the form in which the material is furnished to security holders, shall be filed with, or mailed for filing to, the Commissioner not later than the date the material is first sent or given to any security holder.

Copies of replies to inquiries from security holders requesting further information, and copies of communications that do no more than request that forms of proxy previously solicited be signed and returned, do not need to be filed pursuant to this regulation.

Despite the provisions of §§A and B of this regulation and of Regulation .12E of this chapter, copies of soliciting material in the form of speeches, press releases, and radio or television scripts may, but need not, be filed with the Commissioner before use or publication. Definitive copies, however, shall be filed with or mailed for filing to the Commissioner as required by §C of this regulation not later than the date the material is used or published. The provisions of §§A and B of this regulation and of Regulation .12E of this chapter apply, however, to any reprints or reproductions of all or any part of this material.

If any proxy statement, form of proxy, or other material filed pursuant to this regulation is amended or revised, one of the copies of the amended or revised material filed pursuant to this regulation shall be marked to indicate clearly and precisely the changes.

If the management of the issuer has made or intends to make any solicitation subject to this chapter, the issuer shall perform the acts in §§B—D of this regulation requested in writing with respect to the same subject matter or meeting by any security holder who is, or security holders who are, entitled to vote at least 1 percent of the votes entitled to be voted on the matter and who shall defray the reasonable expenses to be incurred by the issuer in the performance of the act or acts requested.

The issuer shall mail or otherwise furnish to a security holder, as promptly as practicable after the receipt of the request:

Issuer Responsibilities.

Instead of performing the acts specified in §§B—C of this regulation, the issuer may, at its option, furnish promptly to a security holder:

If any holder or holders of an issuer's securities (hereafter referred to as the “proponent”) notifies the issuer in writing not less than 90 days before the issuer's annual meeting of holder's intention to present a lawful proposal for action at an upcoming meeting of the issuer's security holders, and at the time of the notice the proponent is entitled to vote at least 1 percent of the votes entitled to be voted on the proposal, the issuer shall:

If the issuer opposes any proposal received from a proponent, it shall also, at the request of the proponent, include in its proxy statement a statement by the proponent of not more than 200 words in support of the proposal.

The issuer may omit a proposal and any statement in support from its proxy statement and form of proxy under any of the following circumstances:

If the issuer intends to omit any proposal from its proxy statement or forms of proxy, or both, it shall notify the proponent in writing of its intention at least 10 days before the issuer's preliminary proxy material is filed pursuant to Regulation .07A of this chapter.

Is false or misleading with respect to any material fact; or

Omits to state any material fact necessary:

Solicitations to Which this Regulation Applies. This regulation applies to any solicitation by any person or group for the purpose of opposing a solicitation subject to this chapter by any other person or group with respect to the election or removal of directors at any annual or special meeting of security holders.

Participant or Participant in a Solicitation.

Filing of Information Required by Schedule B.

Solicitations Before Furnishing Required Written Proxy Statement. Notwithstanding the provisions of Regulation .04A of this chapter, a solicitation subject to this regulation may be made before furnishing security holders a written proxy statement containing the information specified in Schedule A with respect to the solicitation, if:

Solicitations Before Furnishing Required Written Proxy Statement-Filing Requirements. Two copies of any soliciting materials proposed to be sent or given to security holders before the furnishing of the written proxy statement required by Regulation .04A of this chapter shall be filed with the Commissioner in preliminary form at least 5 business days before the date definitive copies of the material are first sent or given to the persons, or a shorter period the Commissioner may authorize upon a showing of good cause.

Notwithstanding the provisions of Regulation .04B of this chapter, two copies of any portion of the annual report referred to in Regulation .04B of this chapter which comments upon or refers to any solicitation subject to this regulation, or to any participant in any solicitation, other than the solicitation by the management, shall be filed with the Commissioner as proxy material subject to this chapter. This portion of the report shall be filed with the Commissioner, in preliminary form, at least 5 business days before the date copies of the report are first sent or given to security holders.

Solicitations not Subject to Regulation .12 of this Chapter.

Solicitations Subject to Regulation .12 of this Chapter.

Solicitations Not Subject to Regulation .12 of this Chapter. Describe briefly any substantial interest, direct or indirect, of each of the following persons in a matter to be acted upon, other than elections to office:

Solicitations Subject to Regulation .12 of this Chapter. Describe briefly any substantial interest, direct or indirect, of each participant (except the issuer) in any matter to be acted upon at the meeting. Include, with respect to each participant, the information required by Items 2A, 2D, 3, 4B, and 4C of Schedule B.

State, for each class of voting securities of the issuer entitled to be voted at the meeting, the number of shares outstanding and the number of votes to which each class is entitled.

Give the date that the record of security holders entitled to vote at the meeting will be determined. If the right to vote is not limited to security holders of record on that date, indicate the conditions under which other security holders may be entitled to vote.

If action is to be taken with respect to the election of directors and if the persons solicited have cumulative voting rights:

Furnish the following information as of the most practicable date, in substantially the tabular form indicated, with respect to:

Change in Control.

Identification of Directors and Officers. List the names and ages of all directors and officers of the issuer and all persons nominated or chosen to become directors or officers. Indicate all positions and offices with the issuer held by each person; state the term of office as director or officer, or both, and any period during which the person served. Briefly describe any arrangement or understanding between the person and any other person or persons (naming the persons) pursuant to which the person was or is to be selected as a director, officer, or nominee. The information regarding officers does not need to be furnished in proxy or information statements if the information is furnished in a separate item in the issuer's annual report to stockholders.

Family Relationships. State the nature of a family relationship not more remote than first cousin between a director, officer, or person nominated or chosen by the issuer to become a director or officer. State the nature of any family relationship between any such person and an officer or director of any of the issuer's parent companies, subsidiaries, or other affiliates.

Business Experience. State the principal occupations and employment during the past 5 years of each director and each person nominated or chosen to become a director or officer, and the name and principal business of any corporation or other organization in which the occupations and employment were carried on.

Directorships. Indicate other directorships held by each director or person nominated or chosen to become a director.

Involvement in Certain Legal Proceedings. Describe any legal proceedings that have occurred during the past 5 years or which are pending that are material to an evaluation of the ability or integrity of any director or nominee for director or officer of the issuer.

Describe any of the following relationships that exist:

Committees.

State the total number of meetings of the board of directors (including regularly scheduled and special meetings) that were held during the last full fiscal year. Name each incumbent director who, during the last full fiscal year, attended fewer than 75 percent of the aggregate of:

If a director has resigned or declined to stand for reelection to the board of directors since the date of the last annual meeting of shareholders because of a disagreement with the issuer on any matter relating to the issuer's operations, policies, or practices, and if the director has furnished the issuer with a letter describing that disagreement and requesting that the matter be disclosed, the issuer shall state the date of resignation or declination to stand for reelection and summarize the director's description of the disagreement. If the issuer believes that the description provided by the director is incorrect or incomplete, it may include a brief statement presenting its views of the disagreement.

Classes of Voting Stock.

Instructions.

Current Remuneration. Furnish the information required in the table below, in substantially the tabular form specified, concerning all remuneration of the following persons and groups for services in all capacities to the issuer and its subsidiaries during the issuer's last fiscal year or, in specified instances, certain prior fiscal years:

Proposed Remuneration.

Remuneration of Directors. Describe any standard or special arrangements, stating amounts, by which directors of the issuer are compensated for services as a director.

Options, Warrants, or Rights.

Indebtedness of Management.

Transactions with Management.

Transactions with Pension or Similar Plans.

State if the issuer's financial statements are not certified by independent public or certified accountants.

State if the board of directors has no audit or similar committee.

If the issuer's financial statements are certified by independent public or certified accountants, state that fact and provide the following information:

For the fiscal year most recently completed, describe each professional service provided by the principal accountant, state the percentage relationship that the aggregate of the fees for all nonaudit services bear to the audit fees, and, except as provided below, state the percentage relationship that the fee for each nonaudit service bears to the audit fees. Indicate whether, before each professional service provided by the principal accountant was rendered, it was approved by, and the possible effect on the independence of the accountant was considered by:

Describe briefly the material features of the plan, identify each class of persons who will participate, indicate the approximate number of persons in each class, and state the basis of the participation;

Furnish the information, in addition to that required by this item and Item 7, as may be necessary to describe adequately the provisions already made pursuant to all bonus, profit sharing, pension, retirement, stock option, stock purchase, deferred compensation, or other remuneration or incentive plans, now in effect or in effect within the past 5 years, for:

If the plan to be acted upon can be amended otherwise than by a vote of stockholders, to increase the cost to the issuer or to alter the allocation of the benefits as between the directors and officers on the one hand and employees on the other, state the nature of the amendments which can be made;

With regard to any bonus, profit sharing, or other remuneration plan, on which action is to be taken, furnish the following information:

With regard to any pension or retirement plan on which action is to be taken, furnish the following information:

State:

State:

Furnish the information, in addition to that required by this item and Item 7, necessary to describe adequately the provisions already made pursuant to all bonus, profit sharing, pension, retirement, stock option, stock purchase, deferred compensation, or other remuneration or incentive plans, now in effect or in effect within the past 5 years, for:

State the title and amount of securities to be authorized or issued;

If the securities are other than additional shares of common stock of a class outstanding, furnish a brief summary of the following, if applicable: dividend, voting, liquidation, preemptive and conversion rights, redemption and sinking fund provisions, interest rate, and date of maturity;

Describe briefly the transaction in which the securities are to be issued, including a statement as to:

If it is impracticable to describe the transaction in which the securities are to be issued, state the reason, indicate the purpose of the authorization of the securities, and state whether further authorization for the issuance of the securities by a vote of security holders will be solicited before issuance;

If the securities are to be issued otherwise than in a general public offering for cash, state the reasons for the proposed authorization or issuance and the general effect upon the rights of existing security holders.

If outstanding securities are to be modified, state the title and amount. If securities are to be issued in exchange for outstanding securities, state the title and amount of securities to be so issued, the title and amount of outstanding securities to be exchanged, and the basis of the exchange.

Describe any material differences between the outstanding securities and the modified or new securities.

State the reasons for the proposed modification or exchange and the general effect upon the rights of existing security holders.

Furnish a brief statement as to arrears in dividends or as to defaults in principal or interest with respect to the outstanding securities which are to be modified or exchanged and furnish other information appropriate in the particular case to disclose adequately the nature and effect of the proposed action.

Outline briefly any other material features of the proposed modification or exchange. If the plan of proposed action is set forth in a written document, file copies it with the Commissioner at the time the preliminary proxy material is filed.

Outline briefly the material features of the plan. State the reasons for the plan and the general effect of the plan upon the rights of existing security holders. If the plan is set forth in a written document, file three copies with the Commissioner at the time preliminary copies of the proxy statement and form of proxy are filed.

Furnish the following information as to the issuer and each person which is to be merged into the issuer, or into or with which the issuer is to be merged or consolidated, or the business or assets that are to be acquired, or which is the issuer of securities to be acquired by the issuer in exchange for all or a substantial part of its assets or to be acquired by security holders of the issuer. What is required is information essential to an investor's appraisal of the action proposed to be taken.

As to each class of securities of the issuer, or of any person specified in §B, which is admitted to dealing on a national securities exchange or with respect to which a market otherwise exists, and that will be materially affected by the plan, state the high and low sale prices (or, in the absence of trading in a particular period, the range of the bid and asked prices) for each quarterly period within 2 years. This information may be omitted if the plan involves merely the liquidation or dissolution of the issuer.

If action is to be taken with respect to any matter specified in Items 11, 12, or 13, furnish financial statements of the issuer and its subsidiaries complying with the requirements of Regulation .04B(1), (2) and (3) of the chapter, including schedules of supplementary profit and loss information. The statements may be omitted with respect to a plan described in answer to Item 13 if the plan involves only the issuer and one or more of its totally held subsidiaries.

If action is to be taken with respect to any matter specified in Item 13B, furnish for each person specified, other than the issuer, financial statements complying with the requirements of Regulation .04B(1), (2), and (3) of the chapter.

The Commissioner may, upon the request of the issuer, permit the omission of any of the statements required where the statements are not necessary for the exercise of prudent judgment in regard to any matter to be acted upon, or may permit the filing in substitution of appropriate statements of comparable character. The Commissioner may also require the filing of other statements in addition to, or in substitution for, the statements required in any case where the statements are necessary or appropriate for an adequate presentation of the financial condition of any person whose financial statements are required, or whose statements are otherwise material for the exercise of prudent judgment in regard to any matter to be acted upon. In the usual case, financial statements are considered material to the exercise of prudent judgment where the matter to be acted upon is authorization or issuance of a material amount of senior securities, but are not considered material where the matter to be acted upon is the authorization or issuance of common stock, otherwise than in an exchange, merger or consolidation, acquisition, or similar transaction.

The proxy statement may incorporate by reference any financial statements contained in an annual report sent to security holders with respect to the same meeting as that to which the proxy statement relates, if the financial statements substantially meet the requirements of this item.

Describe briefly the general character and location of the property.

State the nature and amount of consideration to be paid or received by the issuer or any subsidiary. To the extent practicable, outline briefly the facts bearing upon the question of the fairness of the consideration.

State the name and address of the transferor or transferee, as the case may be, and the nature of any material relationship of the person to the issuer or an affiliate of the issuer.

Outline briefly any other material features of the contract or transaction.

State the nature of the restatement and the date as of which it is to be effective.

Outline briefly the reasons for the restatement and for the selection of the particular effective date.

State the name and amount of each account (including any reserve accounts) affected by the restatement and the effect of the restatement on the account. Tabular presentation of the amounts shall be made when appropriate, particularly in the case of recapitalizations.

To the extent practicable, state whether and the extent, if any, to which the restatement will, as of the date of the restatement, alter the amount available for distribution to the holders of equity securities.

State whether or not the action is to constitute approval or disapproval of any of the matters referred to in the reports or minutes;

Identify each of the matters which it is intended will be approved or disapproved, and furnish the information required by the appropriate item or items of this schedule with respect to each matter.

State the following:

State the following:

State whether or not you are or have been a participant in any other proxy contest involving this company or other companies within the past 10 years. If so, identify the principals, the subject matter, and your relationship to the parties, and the outcome.

State whether or not, during the past 10 years, you have been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) and, if so, give dates, nature of conviction, name and location of court, and penalty imposed or other disposition of the case. A negative answer to this subitem does not need to be included in the proxy statement or other proxy soliciting material.

State the amount of each class of securities of the issuer that you own beneficially, directly or indirectly.

State the amount of each class of securities of the issuer that you own of record but not beneficially.

State, with respect to all securities of the issuer purchased or sold within the past 2 years, the dates when they were purchased or sold, and the amount purchased or sold on each date.

State if any part of the purchase price or market value of any of the securities specified in §C is represented by funds borrowed or otherwise obtained for the purpose of acquiring or holding securities. Indicate the amount of the indebtedness as of the latest practicable date. If funds were borrowed or obtained otherwise than pursuant to a margin account or bank loan in the regular course of business of a bank, broker, or dealer, briefly describe the transaction and state the names of the parties.

State whether or not you are a party to any contracts, arrangements, or understandings with any person with respect to any securities of the issuer including but not limited to joint ventures, loan or option arrangements, puts or calls guarantees against losses or guarantees of profits, division of losses or profits, or the giving or withholding of proxies. If so, name the persons with whom some contracts, arrangements, or understandings exist, and give the details of it.

State the amount of securities of the issuer owned beneficially, directly or indirectly, by each of your associates, and the name and address of each associate.

State the amount of each class of securities of any parent, subsidiary, or affiliate of the issuer that you own beneficially, directly or indirectly.

Describe the time and circumstances under which you became a participant in the solicitation, and state the nature and extent of your activities or proposed activities as a participant.

Describe briefly, and if practicable state the approximate amount of any material interest, direct or indirect, of yourself and of each of your associates in any material transactions since the beginning of the company's last fiscal year, or in any material proposed transactions, to which the company or any of its subsidiaries or affiliates was or is to be a party.

Arrangement or Understanding.

Describe briefly any substantial interest, direct or indirect, by security holdings or otherwise, of each of the following persons in any matter to be acted upon, other than elections to office:

Give the name of any director of the issuer who has informed the management in writing that he intends to oppose any action to be taken by the management at the meeting, and indicate the action that he intends to oppose.

In this chapter, the following terms have the meanings indicated.

Terms Defined.

Custody Agreement.

Filing Agreement with the Commissioner.

The terms of a custody agreement shall comply with the requirements of this regulation.

Certificated securities held by the custodian shall be held separate from the securities of the custodian and of all of its other customers.

Identification of Securities on Custodian's Records.

All custodied securities that are in registered form shall be registered:

Withdrawal of Securities.

The custodian shall:

Provision of Information to the Commissioner.

The custodian and its agents shall send to the carrier:

The custodian shall maintain:

On written request from an appropriate officer of the carrier, the custodian shall provide the appropriate affidavits, substantially in a form designated by the Commissioner, with respect to custodied securities.

The custodian shall:

The custodian shall indemnify the carrier for any loss of custodied securities caused by the negligence or dishonesty of the custodian.

If there is a loss of custodied securities for which the custodian is obligated to indemnify the carrier under §L of this regulation, the custodian promptly shall replace:

The agreement may provide that the custodian is not liable for failure to take an action required under the agreement in the event and to the extent that the taking of the action is prevented or delayed by:

Agreement between Custodian and Agent.

Notice of Termination or Withdrawal.

The agreement shall provide that the use of an agent by a custodian does not alter the custodian's obligations under the agreement and that the terms of the agreement may not be modified by the terms of any agreement between the custodian and the agent.

Compliance and Certification Required. For an existing custody agreement entered into before the effective date of this chapter, a carrier shall:

Form of Certification. The certification required by §A of this regulation shall be:

Failure to Comply.

Any transaction of purchase and sale, or sale and purchase, of a security which is effected in connection with the distribution of a substantial block of securities shall be exempt from the provisions of Insurance Article, §3-119(e), Annotated Code of Maryland, to the extent specified in this chapter, as not comprehended within the purpose of Insurance Article, §3-119(e), upon the following conditions:

The exemption of a transaction pursuant to this regulation with respect to the participation therein of one party thereto may not render the transaction exempt with respect to participation of any other party therein unless the other party also meets the conditions of this regulation.

The plan has been approved, directly or indirectly, by the affirmative votes of the holders of a majority of the securities of the issuer present, or represented, and entitled to vote at a meeting duly held in accordance with the applicable laws of Maryland, or by the written consent of the holders of a majority of the securities of the issuer entitled to vote. However, if the vote or written consent was not solicited substantially in accordance with the proxy rules and regulations prescribed by the National Association of Insurance Commissioners, if any, in effect at the time of the vote or written consent, the issuer shall furnish in writing to the holders of record of the securities entitled to vote for the plan substantially the same information concerning the plan which would be required by the rules and regulations so prescribed and in effect at the time the information is furnished, if proxies to be voted with respect to the approval or disapproval of the plan were then being solicited, on or before the date of the first annual meeting of security holders held subsequent to the later of the date Insurance Article, §3-119, Annotated Code of Maryland, first applies to the issuer, or the acquisition of an equity security for which exemption is claimed. The written information may be furnished by mail to the last known address of the security holders of record within 30 days before the date of mailing. Four copies of the written information shall be filed with, or mailed for filing to, the Insurance Commissioner not later than the date on which it is first sent or given to security holders of the issuer. For the purposes of this section, the term “issuer” includes a predecessor corporation if the plan or obligations to participate thereunder were assumed by the insurer in connection with the succession.

If the selection of any director or officer of the issuer to whom stock may be allocated or to whom qualified, restricted, or employee stock purchase plan stock options may be granted pursuant to the plan, or the determination of the number or maximum number of shares of stock which may be allocated to the director or officer or which may be covered by qualified, restricted, or employee stock purchase plan stock options granted to the director or officer, is subject to the discretion of any person, then the discretion shall be exercised only as follows:

As to each participant or as to all participants, the plan effectively limits the aggregate dollar amount or the aggregate number of shares of stock which may be allocated, or which may be subject to qualified, restricted, or employee stock purchase plan stock options granted, pursuant to the plan. The limitations may be established on an annual basis, or for the duration of the plan, whether or not the plan has a fixed termination date and may be determined either by fixed or maximum dollar amounts or fixed or maximum number of shares or by formulas based upon earnings of the issuer, dividends paid, compensation received by participants, option prices, market value of shares, outstanding shares or percentages of shares outstanding from time to time, or similar factors which will result in an effective and determinable limitation. Limitations may be subject to any provisions for adjustment of the plan or of stock allocable or options outstanding thereunder to prevent dilution or enlargement of rights.

Unless the context otherwise requires, all terms used in this regulation shall have the same meaning as in Insurance Article, Annotated Code of Maryland. In addition, the following definitions apply:

The equity security is acquired by way of redemption of another security of an issuer substantially all of whose assets other than cash (or government bonds) consist of securities of the issuer of the equity security so acquired, and which:

No security of the same class as the security redeemed was acquired by the director or officer within 6 months before the redemption or is acquired within 6 months after the redemption;

The issuer of the equity security acquired has recognized the applicability of §A of this regulation by appropriate corporate action.

To the extent specified in §B of this regulation, the Insurance Commissioner hereby exempts as not comprehended within the purposes of Insurance Article, §3-119(e), Annotated Code of Maryland, any transaction or transactions involving the purchase and sale, or sale and purchase, of any equity security if the purchase is pursuant to the exercise of an option or similar right either acquired:

In respect of transactions specified in §A of this regulation, the profits inuring to the issuer may not exceed the difference between the process of the sale and the lowest market price of any security of the same class within 6 months before or after the date of sale. Nothing in this section shall be deemed to enlarge the amount of profit which would inure to the issuer in the absence of this regulation.

The Insurance Commissioner also hereby exempts, as not comprehended within the purposes of Insurance Article, §3-119(e), Annotated Code of Maryland, the disposition of a security, purchased in a transaction specified in §A of this regulation pursuant to a plan or agreement for merger or consolidation, or reclassification of the issuer's securities, or for the exchange of its securities for the securities of another person which has acquired its assets, or which is in control, as defined in §368(c) of the Internal Revenue Code of 1954, of a person which has acquired its assets, when the terms of the plan or agreement are binding upon all stockholders of the issuer except to the extent that dissenting stockholders may be entitled, under statutory provisions or provisions contained in the certificate of incorporation, to receive the appraised or fair value of their holdings.

The exemptions provided by this regulation may not apply to any transaction made unlawful by Insurance Article, §3-119(f), Annotated Code of Maryland, or by any regulations thereunder.

The burden of establishing the market price of a security for the purpose of this regulation shall rest upon the person claiming the exemption.

The exemption granted pursuant to this regulation shall apply to any liability under Insurance Article, §3-119(e), Annotated Code of Maryland, existing at or after the effective date of this regulation, but may not be deemed to affect judgments rendered before that date.

The following transactions shall be exempt from the provisions of Insurance Article, §3-119(e), Annotated Code of Maryland, as not comprehended within the purpose of that statute:

A merger within the meaning of this regulation shall include the sale or purchase of substantially all the assets of one issuer by another in exchange for stock which is then distributed to the security holders of the issuer which sold its assets.

Notwithstanding the foregoing, if an officer, director, or stockholder shall make any purchase (other than a purchase exempted by this chapter or any other regulation under Insurance Article, §3-119(e), Annotated Code of Maryland, of a security in any company involved in the merger or consolidation and any sale (other than a sale exempted by this chapter or any other regulation under Insurance Article, §3-119(e), Annotated Code of Maryland, of a security in any other company involved in the merger or consolidation within any period of less than 6 months during which the merger or consolidation took place, the exemption provided by this regulation shall be unavailable to the officer, director, or stockholder to the extent of the purchase and sale.

A purchase of an equity security of the class deposited and a sale of any certificate representing an equity security of the class; or

A sale of an equity security of the class deposited and a purchase of any certificate representing an equity security of the class (otherwise than in a transaction involved in the deposit or withdrawal or in a transaction exempted by any other section of any regulation under Insurance Article, §3-119(e), Annotated Code of Maryland, within a period of less than 6 months which includes the date of the deposit or withdrawal.

Any acquisition or disposition of an equity security involved in the conversion of an equity security which, by its terms or pursuant to the terms of the corporate charter or other governing instruments, is convertible immediately or after a stated period of time into another equity security of the same issuer, shall be exempt from the operation of Insurance Article, §3-119(e), Annotated Code of Maryland. However, this regulation does not apply to the extent that there shall have been either:

For the purpose of this regulation an equity security is not deemed to be acquired or disposed of upon conversion of an equity security if the terms of the equity security converted require the payment or entail the receipt, in connection with the conversion, of cash or other property (other than equity securities involved in the conversion) equal in value at the time of conversion to more than 15 percent of the value of the equity security issued upon conversion.

For the purpose of this regulation an equity security shall be deemed convertible if it is convertible at the option of the holder or of some other person or by operation of the terms of the security or the governing instrument.

Five transactions with a single person who does not have an appointment from the insurer; or

One or more transactions with five or more people who do not have appointments from the insurer.

In this chapter, the following terms have the meanings indicated.

Terms Defined.

The terms of the contract required under this regulation between a controlling insurance producer and a controlled insurer within an insurance-producer-controlled holding company system shall comply with §B of this regulation.

The contract required under this regulation shall provide at a minimum that:

In this chapter, the following terms have the meanings indicated.

Terms Defined.

A member insurer or insurance producer may not deliver a life insurance policy, a health insurance policy, a health benefit plan (including a health maintenance organization contract or group master certificate), or an annuity contract which at the time of delivery exceeds the limitations imposed under Insurance Article, §9-407(k), Annotated Code of Maryland, or which is not subject to coverage under Insurance Article, §9-403, Annotated Code of Maryland, unless the member insurer or insurance producer before or at the time of delivery provides the policyholder or contract holder the notice described in §B of this regulation. This chapter does not prohibit a member insurer or insurance producer from delivering the notice to policyholders or contract holders who have full protection afforded by the corporation.

The notice required in §A of this regulation shall be in at least 12-point type and shall read as follows:

In this chapter, the following terms have the meanings indicated.

Terms Defined.

Antifraud Plan.

Contents of Antifraud Plan. An antifraud plan shall:

Amendments to Antifraud Plans. Within 30 days after modifying or amending an antifraud plan, an insurer shall:

Approval of Antifraud Plans and Amendments.

This regulation does not apply to third party administrators (TPAs) that only participate in federal programs and are therefore required to file a federal antifraud plan provided that:

Education/Training.

Detection.

Investigation.

Auditing.

Referral for Prosecution.

An insurer shall maintain appropriate records for the Commissioner to determine the effectiveness of its antifraud plan.

A report shall be developed and provided to the Administration on an annual basis regarding the plan's effectiveness and the effectiveness of the investigative and prosecutorial efforts.

The report shall be filed with the Administration by March 31 of each year, reporting the previous year's statistics. The report shall be limited to Maryland data. The following information shall be reported:

The Commissioner may require an insurer to file its underwriting standards, or any portion of its underwriting standards pertaining to specific subjects.

The insurer shall provide the Commissioner with the information requested within 30 days after receipt of the Commissioner's request.

In this chapter, the following terms have the meanings indicated.

Terms Defined.

Duplicate Forms Required For Nonelectronic Form Submissions.

A carrier submitting forms for approval, or premiums for forms pending approval or previously approved, shall print or type in a conspicuous manner immediately below the name of the carrier on the letter of transmittal the carrier's National Association of Insurance Commissioners (NAIC) company code number.

A carrier shall submit the following with each form filing:

Each form shall be identified by a form number which is unique to that form. This number should be printed in the lower lefthand corner of the first page, and no other number should appear in close proximity to the form number. If any loose leaf or alternate pages are submitted in accordance with Insurance Article, §12-203(e), Annotated Code of Maryland, each page shall also be identified by a unique form number.

Each form shall be printed in a size and style of type which is easily legible.

If any portion of a form is in a language other than English, an English translation shall appear in the same form.

Name of Carrier.

Modifications or Revisions.

Submission of Forms.

Submission Details. If the submission is new, the carrier shall point out the unique features of the form.

Representative Specimen Data.

Mortality Table or Interest Rate Changes in Life Insurance or Annuity Contracts. If no other change in the contract is being filed at the same time, a carrier may file a change in the nonforfeiture basis for a previously approved contract by filing:

Any individual or group policy, group certificate, policy amendment, rider, or endorsement form shall have affixed the signature of a responsible officer of the carrier as part of the form.

In the case of a life insurance policy or certificate, the carrier shall furnish a mathematical outline showing, for the specimen age and a specimen duration, computation of the:

Except for an annuity contract that is listed as exempt under Insurance Article, §16-501, Annotated Code of Maryland, in the case of an annuity contract, the carrier shall furnish:

Variable Information.

Contracts with Insert Pages.

Contracts Comprised of Sections.

The Commissioner shall deem a filing withdrawn by the carrier if the carrier fails to respond to correspondence from the Commissioner regarding the filing within 90 days of the date of the correspondence from the Commissioner.

If a carrier resubmits a form for approval after 90 days of the date of the Commissioner's correspondence regarding the filing in which the form was included, the carrier shall:

An application form shall stipulate the plan and amount of insurance and any added optional benefits being applied for.

If the carrier uses an application form which contains language substantially as follows, “Except that no change in amount, classification, plan of insurance or benefits shall be effective unless agreed to in writing by the applicant”, with an additional statement that this exception is effective only in certain states, the form shall specifically name Maryland as one of the states in which the exception is effective.

If an application inquires about the applicant's participation in “hazardous activities”, the application shall list the activities that are considered to be “hazardous”.

If an application inquires about the applicant's use of “other habit-forming drugs”, the application shall list the specific drugs that are considered “habit-forming”.

If an application contains questions regarding past or present health conditions:

If an application inquires about a symptom of an applicant, the question shall be asked about a “known symptom” of a physical condition or mental condition.

If an application inquires if an applicant has had any indication of a physical condition or mental condition, the question shall be asked about a “known indication” of a physical condition or mental condition.

Applications for Individual Insurance.

Applications for Group Insurance.

If an application is to be completed by more than one individual, the signature box in the application shall clearly indicate that the signature applies only to the portion of the application completed by that individual.

A form may not contain any advertising material.

A carrier may use a marketing name, registered trademark, or logo in a form, if the logo, registered trademark, or marketing name does not mislead as to the identity of the carrier.

A carrier may include text such as “50th Anniversary Year”, “Established over 100 Years”, or “Incorporated 1860” in a form.

In the case of term policies, the insurer shall indicate in clear, unambiguous language, whether or not coverage is granted if loss occurs on the term expiry date. Some examples of acceptable language are:

In the case of a renewable term life insurance policy (that is, a term policy containing an option on the part of the policyholder to renew for one or more further periods of term insurance), the actual premiums to be charged at each renewal date shall be shown in the policy. In a policy of wholesale or group term life insurance, however, the insurer may reserve the right to change the table of renewal premiums on any policy anniversary on 30 days' notice.

If the brief description of a policy indicates that the policy is renewable or convertible, or both, the brief description shall further indicate the term during which the policyholder may exercise the option to renew or convert, or both, unless this option may be exercised during the entire term of the policy or renewal of the policy.

In the case of a convertible term life insurance policy issued on a participating basis, if there is a provision for the computation of the cost of change on the basis of difference in premiums (or premiums plus interest), the cost of change also shall provide for adjustment in dividends.

If a life insurance policy contains a war or aviation exclusion, or both, a printed or stamped statement shall appear as part of the brief description on the first page of the policy reading “War Restrictions Included”, “Aviation Exclusions Included”, “War and Aviation Restrictions Included”, or any similar language approved by the Commissioner.

If a carrier embodies a brief description on the filing back of a form, the brief description shall be identical in language with that embodied on the first page of the form.

An application, policy, or contract may not require a warranty of the state of health of the insured or that the good health of the insured be a condition precedent to the policy or contract.

In any group life insurance policy, or in any provisions in either a life insurance policy or a certificate relating to additional disability benefits or to additional benefits in the event of death by accident or accidental means:

In nonprofit health service plan forms and health insurance forms, including certificates of health insurance issued by fraternal benefit societies, the carrier may not exclude unintentional self-destruction or unintentional self-inflicted injury, but may exclude self-destruction or self-inflicted injury by an insane person.

Except as provided in §B of this regulation, a contract shall provide for a refund of premium upon request of the policyholder of pro rata unearned premium for any period during which the insured is not covered if:

The refund of premium requirement described in §A of this regulation does not apply to:

Health Insurance Coverage Prohibited in Individual Life Insurance Policies. An ordinary or industrial life insurance policy may not include a health insurance benefit, except for the following types of benefits:

Natural Death Benefit Prohibited in Individual Health Insurance Policies.

The question of the computation of minimum cash values for a particular type of policy or type of insurance coverage has been made the subject of a study by the subcommittee of the National Association of Insurance Commissioners; and

Maryland does not have a specific regulation covering the question described in §A of this regulation.

Life Insurance. If a life insurance form excludes liability for injury or accidental death arising out of:

Health Insurance. Exclusions or limitations for riots or altercations in health insurance and nonprofit health service plan contracts shall comply with the applicable provisions found in COMAR 31.10.25.05A, COMAR 31.10.28.03A, and COMAR 31.11.10.06A.

In this chapter, the following terms have the meanings indicated.

Terms Defined.

The Commissioner may not deem any single factor as necessarily controlling;

The Commissioner shall consider the net effect of the factors, plus other factors deemed by the Commissioner to impact the financial condition of the insurer;

In comparing the surplus maintained by other insurers, the Commissioner shall consider the extent to which each of the factors varies from company to company; and

In determining the quality and liquidity of investments in subsidiaries, the Commissioner shall consider the individual subsidiary and may discount or disallow its valuation to the extent the individual investments so warrant.

A person required to file a statement, form, or notification pursuant to Insurance Article, Title 7, Annotated Code of Maryland, shall file the statement, form, or notification as specified in the instructions provided in this chapter, and in accordance with the format, guidelines, and instructions approved by the Commissioner. The forms are not intended to be blank forms which are to be filled in; rather, the forms are intended to be guides in the preparation of the statements. A filed statement shall contain the number and captions of all items outlined in the form, with text addressing each applicable item or a response in the negative where not applicable.

A person filing a statement, form, or notification pursuant to Insurance Article, Title 7, Annotated Code of Maryland, and this chapter shall provide the filing, including exhibits, documents, information, and all other papers filed as part of the submission:

The statement, form, or notification pursuant to §A of this regulation shall:

Exhibits, documents, information, and all other papers filed as part of the submission pursuant to §A of this regulation shall:

The person submitting a filing under §B(2) of this regulation:

A statement, form, or notification filed pursuant to Insurance Article, Title 7, Annotated Code of Maryland, shall be:

A person filing a statement, form, or notification pursuant to Insurance Article, Title 7, Annotated Code of Maryland, and this chapter may:

Exhibits, documents, information, and all other papers filed as part of the submission of a statement, form, or notification filed within 3 years of the current filing pursuant to Insurance Article, Title 7, Annotated Code of Maryland, and this chapter may be omitted as exhibits for the current filing.

References to exhibits, documents, information, and all other papers filed as part of the submission of prior filings shall:

Incorporation by reference pursuant to §§A and C of this regulation may not be used if the incorporation would render the submission of a statement, form, or notification pursuant to Insurance Article, Title 7, Annotated Code of Maryland, and this chapter incomplete, vague, or confusing.

If it is impractical for a person filing a statement, form, or notification pursuant to Insurance Article, Title 7, Annotated Code of Maryland, to furnish any required information, document, or report at the time it is required to be filed, the person shall file with the Commissioner a separate document:

The request for extension shall be deemed granted unless the Commissioner denies the request in writing and within 30 business days of the receipt of the request.

If a domestic insurer, including any person controlling a domestic insurer, is proposing a merger or acquisition pursuant to Insurance Article, §7–303(a), Annotated Code of Maryland, that person shall file with the Commissioner, at least 30 days before a transaction is proposed to become effective, a Form E, in accordance with the format, guidelines, and instructions approved by the Commissioner.

The acquiring person in an acquisition subject to Insurance Article, §7-403, Annotated Code of Maryland, shall file with the Commissioner, at least 30 days before the acquisition is proposed to become effective, a Form E, in accordance with the format, guidelines, and instructions approved by the Commissioner.

Upon request and in addition to the information provided in §A or B of this regulation, the Commissioner may require the opinion of an economist about the competitive impact of the acquisition or merger 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 pursuant to Insurance Article, §7–403(c)(2)(ii), Annotated Code of Maryland.

A person seeking to acquire control of a domestic insurer pursuant to Insurance Article, §7–304, Annotated Code of Maryland, shall file with the Commissioner and provide a copy to the domestic insurer a Form A at least 60 days before a transaction is proposed to become effective, in accordance with the format, guidelines, and instructions approved by the Commissioner.

If any material change occurs in the facts set forth in the statement filed with the Commissioner and provided to the insurer in the Form A, an amendment, together with copies of any documents or other materials necessary to describe the amendment, shall be filed with the Commissioner prior to the Commissioner’s disposition on the application, and provided to the insurer within the earlier of 2 business days after:

A person required to file an annual registration statement pursuant to Insurance Article, §7–601, Annotated Code of Maryland, shall file with the Commissioner a Form B, in accordance with the format, guidelines, and instructions approved by the Commissioner.

Unless extended by the Commissioner for good cause, the Form B shall be filed within 15 days after the insurer becomes subject to registration and, for each subsequent year, annually on or before May 1.

No information need be disclosed pursuant to §A of this regulation if the information is not material. Sales, purchases, exchanges, loans, or extensions of credit, investments, or guarantees involving 1/2 of 1 percent (.5 percent) or less of an insurer’s admitted assets as of the 31st day of the December next preceding may not be deemed material for the purposes of this section.

A disclaimer of affiliation or a request for termination of registration claiming that a person does not, or will not upon the taking of some proposed action, control another person (hereinafter referred to as the “subject”) shall contain the following information:

A request for termination of registration shall be deemed to have been granted unless the Commissioner, within 30 days after receipt of the request, notifies the registrant otherwise.

A person filing notice with the Commissioner of a proposed transaction pursuant to Insurance Article, Title 7, Subtitle 7, Annotated Code of Maryland, shall file a Form D, in accordance with the format, guidelines, and instructions approved by the Commissioner.

Pursuant to Insurance Article, §7-702(6), Annotated Code of Maryland, agreements, including but not limited to management agreements, service contracts, tax allocation agreements, or cost-sharing agreements shall include as applicable, the following provisions:

In determining whether a transaction is fair and reasonable pursuant to Insurance Article, §7-702, Annotated Code of Maryland, the Commissioner may consider:

Unless extended by the Commissioner for good cause, by July 1 of each year, file with the Commissioner a properly executed Form F in accordance with the format, guidelines, and instructions approved by the Commissioner; and

File any other document or information that the Commissioner considers necessary to identify the significant risks within the insurance holding company system that could pose enterprise risk to the insurer.

Pursuant to Insurance Article, §7-706, Annotated Code of Maryland, a domestic insurer may not pay an extraordinary dividend or make any other extraordinary distribution to its shareholders unless:

The insurer shall file a written request for approval of extraordinary dividends or any other extraordinary distribution to shareholders and shall include the following in the request:

Where an insurance holding company system has previously filed the annual group capital calculation required under Insurance Article, §7–603(i), Annotated Code of Maryland, the lead state commissioner has the discretion to exempt the ultimate controlling person from filing the annual group capital calculation if the lead state commissioner makes a determination based upon that filing that the insurance holding company system:

Where an insurance holding company system has previously filed the annual group capital calculation required under Insurance Article, §7–603(i), Annotated Code of Maryland, the lead state commissioner may accept a limited group capital filing in lieu of the group capital calculation if the insurance holding company system:

For an insurance holding company that has previously met an exemption with respect to the group capital calculation pursuant to §A or B of this regulation, the lead state commissioner may require at any time the ultimate controlling person to file an annual group capital calculation, completed in accordance with the group capital calculation instructions adopted by the NAIC, if:

A non-U.S. jurisdiction is considered to “recognize and accept” the group capital calculation, as described in Insurance Article, §7–603(i)(2)(v), Annotated Code of Maryland, if:

A list will be published through the NAIC committee process that:

For a non-U.S. jurisdiction where no U.S. insurance groups operate, the confirmation provided to meet the requirement of §D(1)(b) of this regulation will serve as support for recommendation to be published as a jurisdiction that “recognizes and accepts” the group capital calculation through the NAIC committee process.

If the lead state commissioner makes a determination pursuant to Insurance Article, §7–603(i)(2)(v), Annotated Code of Maryland that differs from the NAIC List, the lead state commissioner shall provide thoroughly documented justification to the NAIC and other states.

Upon determination by the lead state commissioner that a non-U.S. jurisdiction no longer meets one or more of the requirements to “recognize and accept” the group capital calculation, as described in Insurance Article, §7–603(i)(2)(v), Annotated Code of Maryland, the lead state commissioner may provide a recommendation to the NAIC that the non-U.S. jurisdiction be removed from the list of jurisdictions that “recognize and accepts” the group capital calculation.

In this chapter, the following terms have the meanings indicated.

Terms Defined.

COMAR 31.04.17 for life and health insurance filings; and

COMAR 31.10.01 for health insurance filings.

An insurer may request that a form filing be accepted under a file and use method.

The cover letter included with forms filed under the file and use method shall include the following:

The use of the file and use method shall be limited in accordance with the types of forms specified in Regulation .05 of this chapter.

An insurer may not combine in the same submission:

A request under a file and use method shall include a signed certification from a responsible officer that, to the best of the officer's knowledge and belief, the forms comply with applicable statutes and regulations.

A filing made under a file and use method shall be subject to the same filing fee requirements applicable to filings made under a prior approval method.

An insurer may issue a form for delivery in Maryland that was filed under the file and use method at the earlier of the following dates:

An insurer may not use the file and use method before the insurer has had a certificate of authority to write the same type of coverage in Maryland for at least 12 months.

An insurer may not use the file and use method to file a form in Maryland if:

The forms listed in §B of this regulation are the only forms that may be used on a file and use basis.

The following life insurance, health insurance, and annuity forms may be filed under the file and use method:

If an insurer uses a form which becomes effective under a file and use method and the form is found by the Commissioner to be noncompliant, the Commissioner may:

The Commissioner may remove file and use authority from an insurer upon a finding that the insurer has made inappropriate or noncompliant filings under this method with such frequency as to constitute a business practice.

This chapter establishes the process and procedures for market conduct actions.

This chapter does not apply to the examination or investigation of:

In this chapter, the following terms have the meanings indicated.

Terms Defined.

Whenever the Commissioner has the authority to conduct an analysis, examination, or investigation of a person's business practices, the Commissioner may conduct a market conduct action.

The Commissioner may conduct a market conduct action:

If the Commissioner determines information is needed from a person to conduct a market conduct action, in accordance with Regulation .05 of this chapter:

The Commissioner may participate in a market conduct action with one or more other states to determine if a Maryland law has been violated by the person subject to the market conduct action.

The Commissioner may request accounts, records, documents, files, or other information needed to complete a market conduct action.

The Commissioner may include a reference to the applicable law pertaining to the request.

The Commissioner may request information through:

Whenever a person receives a request from the Commissioner for information, the person shall provide the requested information:

When the person submits the information to the Commissioner, the person shall provide written certification, signed by an individual with authority to bind the person providing the response, that the:

If the person fails to provide the certification required under §E of this regulation, the absence of this certification:

A person may submit a written request, stating the reason for the request, to the Commissioner to extend the time for the submission of information:

If the Commissioner receives the request pursuant to §G of this regulation, the Commissioner shall:

The Commissioner shall conduct a market conduct examination in accordance with this regulation.

The Commissioner shall notify the person subject to the market conduct examination, in writing, that a market conduct examination has commenced.

The Commissioner's notification that a market conduct examination has commenced shall:

The person notified under §B of this regulation shall give written notice to the Commissioner of the individual who:

Following the notice provided under §§B and C of this regulation, the Commissioner shall conduct a conference with the person in a manner determined by the Commissioner to review:

After the completion of the conference required in §E of this regulation, the Commissioner:

The Commissioner shall notify the person subject to a market conduct examination of the date after which the Commissioner may not accept additional information unless an extension has been granted by the Commissioner in accordance with Regulation .05G and H of this chapter.

The Commissioner shall conduct an exit conference with the person subject to the market conduct examination in a manner determined by the Commissioner

At the discretion of the Commissioner, a report certified by the insurance supervisory official of another state may be accepted in lieu of conducting a market conduct examination.

Whenever a market conduct examination is conducted pursuant to Regulation .06 of this chapter, the Commissioner shall:

After receipt of the draft proposed market conduct examination report, a person may submit a written request, stating the reason for the request, to the Commissioner to extend the time for the submission of written comments.

If the Commissioner receives a request pursuant to §B of this regulation, the Commissioner shall:

The Commissioner shall provide the person with a copy of the proposed market conduct examination report.

Based on the information reviewed during a market conduct analysis the Commissioner may, in the Commissioner's sole discretion:

If the Commissioner conducts a market conduct investigation, the Commissioner may, in the Commissioner's sole discretion, based on the information reviewed during the market conduct investigation:

If the Commissioner conducts a market conduct examination, the Commissioner may, in the Commissioner's sole discretion, based on the information reviewed during the market conduct examination:

A person aggrieved by an order or proposed market conduct examination report may request a hearing in accordance with the provisions of COMAR 31.02.01.

Except as otherwise provided by law, a person may not rely on any information not timely provided in accordance with Regulation .06G of this chapter in any hearing held on an order or proposed market conduct examination report.

This chapter applies to the examination of rate filings made pursuant to:

This chapter does not apply to the Maryland Automobile Insurance Fund.

In this chapter, the following terms have the meanings indicated.

Terms Defined.

Whenever the Commissioner considers it advisable, the Commissioner may retain an actuarial consultant to examine a rate filing submitted by an advisory organization, carrier, or rating organization.

If the Commissioner retains an actuarial consultant to examine a rate filing submitted by an advisory organization, carrier, or rating organization the Commissioner shall notify the advisory organization, carrier, or rating organization that the Commissioner has retained an actuarial consultant to examine the rate filing.

The Commissioner or the actuarial consultant shall make a complete report of the examination in accordance with the provisions of Insurance Article, §2-209, Annotated Code of Maryland.

The advisory organization, carrier, or rating organization shall pay the expenses for the actuarial consultant’s examination of a rate filing in accordance with the provisions of Insurance Article, §2-208, Annotated Code of Maryland.

Establishes the minimum standards and procedures for conducting a review; and

Provides for the filing of a review report with the Commissioner.

In this chapter, the following terms have the meanings indicated.

Terms Defined.

A title insurer:

The review required under §A of this regulation shall, at a minimum, include:

If the principal agent does not maintain separate bank or trust accounts for each title insurer it represents, the title insurer shall verify that the trust deposits held on its behalf are reasonably ascertainable from the books of account and records of the principal agent.

A title insurer may enter into a written contract with a third party to perform a review.

A title insurer that enters into a written contract with a third party to perform a review is:

A title insurer shall prepare a written report setting forth the results of its annual review, which shall be made available to the Commissioner upon request.

A title insurer shall file a report with the Commissioner within 45 calendar days after the completion of the review if the title insurer has reasonable cause to believe that the title insurance producer or agency at any time engaged in any of the prohibited activities set forth in Insurance Article, §10-126, Annotated Code of Maryland. The report shall be submitted regardless of whether the prohibited activities ceased or were remedied prior to, during the course of, or as a result of the review. The report shall be in writing on a form specified by the Commissioner and submitted by electronic means directed by the Commissioner..

The report shall address the following areas:

A title insurer is not precluded from providing a more comprehensive description of the review.

The report shall contain:

Except as provided in §B of this regulation, if a title insurer has reason to believe that the principal agent has engaged in, or is engaging in, conduct that is prohibited by Insurance Article, §10-126, Annotated Code of Maryland, the title insurer shall notify the Commissioner in writing, which may be through email, facsimile, or other electronic transmission, within 10 calendar days after obtaining such knowledge or belief, in addition to filing any required a report.

A title insurer shall notify the Commissioner in writing, which may be through email, facsimile, or other electronic transmission, within 2 calendar days if a title insurer has reason to believe that a principal agent has converted or misappropriated money received or held in trust in addition to filing any required report.

A title insurer’s written notification to the Commissioner under §§A and B of this regulation shall include the following information:

A licensee shall maintain for a period of 5 years after the conclusion of an annual review, and make available to the Commissioner upon request, all documentation collected, prepared, and produced by the licensee during an annual review including, but not limited to, work papers, summaries, daily log notes, and the report.

Records required by this regulation may be maintained in paper, photographic, magnetic, mechanical, or electronic media or by any process that accurately reproduces the actual document, if the copy of the record is maintained in a manner that:

In this chapter, the following terms have the meanings indicated.

Terms Defined.

An insurer, or the insurance group of which the insurer is a member, required to file a CGAD under Insurance Article, Title 4, Subtitle 5, Annotated Code of Maryland, shall, no later than June 1 of each calendar year, submit to the Commissioner a CGAD that contains the information described in Regulation .04 of this chapter.

The CGAD shall include a signature of the insurer’s or insurance group’s Chief Executive Officer or Corporate Secretary attesting to the best of that individual’s belief and knowledge that the insurer or insurance group has implemented the corporate governance practices and that a copy of the CGAD has been provided to the insurer’s Board or its appropriate committee.

The insurer or insurance group shall have discretion regarding the appropriate format for providing the information required by these regulations and is permitted to customize the CGAD to provide the most relevant information utilized by the insurer or insurance group necessary to permit the Commissioner to gain an understanding of:

Completing the CGAD.

Notwithstanding §A of this regulation, and as outlined in Insurance Article, §4-503, Annotated Code of Maryland, if the CGAD is completed at the insurance group level:

An insurer or insurance group may comply with this regulation by referencing other existing documents if the documents provide information that is comparable to the information described in Regulation .04 of this chapter, if the insurer or insurance group:

Examples of other existing documents that may be referenced in the CGAD may include, without limitation: