Chapter 05 Period of Organization or Proof of Financial Worth Before Admission of Foreign Stock and Mutual Insurance Companies

Chapter 05 Period of Organization or Proof of Financial Worth Before Admission of Foreign Stock and Mutual Insurance Companies | Library of Maryland Regulations

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Title 31 MARYLAND INSURANCE ADMINISTRATION

Subtitle 04 INSURERS

Chapter 05 Period of Organization or Proof of Financial Worth Before Admission of Foreign Stock and Mutual Insurance Companies

Code of Maryland Regulations

Chapter 05 Period of Organization or Proof of Financial Worth Before Admission of Foreign Stock and Mutual Insurance Companies

Administrative History Effective date: June 22, 1966 Amended effective May 1, 1968 Regulation .01 amended effective October 23, 1995 (22:21 Md. R. 1615) —————— Chapter recodified from COMAR 09.30.05 to COMAR 31.04.05 effective September 7, 1998 (25:18 Md. R. 1439) Authority Insurance Article, §§ 2-109 , 4-102 , 4-103 , and 4-104 , Annotated Code of Maryland

.01 Application. A. 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. B. 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. C. 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. Agency Note: Experience has demonstrated that until a stock or mutual insurance company has been actively engaged in the business of insurance for at least 2 years, or within the 2-year period has adequately established its financial worth through the accumulation of certain minimum capital and surplus, there is not a sufficient basis upon which to form a judgment as to whether its methods and practices in the conduct of its business are such as to protect the interests of the policyholders and people of this State, or to confirm that the general fitness and experience of its officers and directors is sufficient to warrant that the business of the company will be efficiently conducted in accordance with the intent and purpose of the laws of Maryland which regulate the business of insurance, and that the public interest will not be jeopardized by admitting the company to engage in the business of insurance in this State.

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