Maryland Labor and Employment Section 10-125

      (a)      Except as provided in subsection (b) of this section, the Fund shall be:

            (1)      examined by the Commissioner in accordance with §§ 2-205 and 2-207 through 2-209 of the Insurance Article; and

            (2)      subject to the following provisions of the Insurance Article:

                  (i)      Title 4, Subtitle 3 (Risk Based Capital Standards for Insurers) as provided in subsection (d) of this section;

                  (ii)      Title 5, Subtitles 1, 2, 4, and 9 (Assets and Liabilities, Reserves, Valuation of Assets and Reinsurance);

                  (iii)      Title 9 (Impaired Entities); and

                  (iv)      §§ 3-124 (Bulk Reinsurance - Stock Insurers), 4-115 (Home Office; Location of Accounting Records and Assets), 4-116 (Annual and Interim Statements; Audited Financial Reports), and 4-118 (Qualified Independent Certified Public Accountants).

      (b)      (1)      The Commissioner may not take any action to enforce any provision of the Insurance Article to which the Fund is subject under subsection (a) of this section except:

                  (i)      the Commissioner may issue an order under Title 9 (Impaired Entities) of the Insurance Article; and

                  (ii)      the Commissioner may take action authorized under §§ 4-305, 4-306, 4-307, and 4-308 of the Insurance Article relating to risk based capital standards for insurers.

            (2)      Any order issued under this subsection:

                  (i)      may not include a requirement that the Fund increase rates; and

                  (ii)      shall be subject to Title 2, Subtitle 2, of the Insurance Article.

            (3)      The Commissioner shall report to the Board on the results of any examination conducted under subsection (a)(1) of this section.

      (c)      (1)      The Commissioner may examine or review the Fund for compliance with:

                  (i)      Title 12, Subtitle 1 of the Insurance Article (Policy Forms and Provisions);

                  (ii)      except for § 19-403 (Setting Premium Rates), Title 19, Subtitle 4 of the Insurance Article (Workers' Compensation Insurance); and

                  (iii)      Title 27 of the Insurance Article (Unfair Trade Practices and Other Prohibited Practices).

            (2)      The Commissioner may not take any action to enforce any provision of the Insurance Article under which the Commissioner has examined or reviewed compliance under this subsection.

            (3)      The Commissioner shall report to the Board on the results of any examination or review conducted under this subsection.

      (d)      With respect to any risk based capital calculation under Title 4, Subtitle 3 of the Insurance Article, the Fund shall be subject to the following reductions:

            (1)      for calendar year 2001, the required risk based capital for the Fund shall be 50% of the requirement for each action level set forth in §§ 4-305 through 4-308 of the Insurance Article;

            (2)      for calendar year 2002, the required risk based capital for the Fund shall be 60% of the requirement for each action level set forth in §§ 4-305 through 4-308 of the Insurance Article;

            (3)      for calendar year 2003, the required risk based capital for the Fund shall be 70% of the requirement for each action level set forth in §§ 4-305 through 4-308 of the Insurance Article;

            (4)      for calendar year 2004, the required risk based capital for the Fund shall be 85% of the requirement for each action level set forth in §§ 4-305 through 4-308 of the Insurance Article; and

            (5)      for calendar year 2005, the required risk based capital for the Fund shall be 100% of the requirement for each action level set forth in §§ 4-305 through 4-308 of the Insurance Article.

      (e)      For calendar years 2002 through 2005:

            (1)      if the Fund's risk based capital does not equal or exceed the phase-in level required under subsection (b) of this section, the provisions of §§ 4-305 through 4-308 of the Insurance Article applicable to that level shall apply;

            (2)      (i)      if the Fund's risk based capital equals or exceeds the phase-in level required under subsection (b) of this section, but is less than 100% of the company action level required under Title 4, Subtitle 3 of the Insurance Article, the Fund shall file a status report concerning the Fund's November 2, 2001 risk based capital plan; and

                  (ii)      the status report shall state whether the annual results meet or exceed the results projected in the risk based capital plan and shall describe any appropriate modification or adjustment to the plan; and

            (3)      if the Fund's risk based capital equals or exceeds 100% of the company action level required under Title 4, Subtitle 3 of the Insurance Article, the Fund may not be required to file a risk based capital plan for that year.