2013 Maryland Code
§ 24-107 - Rate Stabilization Reserve Fund

MD Ins Code § 24-107 (2013) What's This?


(a) (1) In this section the following words have the meanings indicated.

(2) “Fund” means the Rate Stabilization Reserve Fund.

(3) “Fund charge” means a Rate Stabilization Reserve Fund charge.

(b) (1) There is a Rate Stabilization Reserve Fund.

(2) The Fund shall be entered into the financial statement of the Society as a special surplus fund of the Society along with other premium and loss reserves.

(c) Three directors of the Society shall administer the Fund and, together with the Commissioner or deputy of the Commissioner, shall value the Fund annually.

(d) (1) Each policyholder of the Society shall pay to the Society a Fund charge.

(2) The directors of the Society shall determine the amount of the Fund charge.

(3) The Fund charge shall be stated separately in each policy.

(4) The Society shall cancel the policy of each policyholder that fails to pay the Fund charge.

(5) The Fund charge shall be collected until the net balance of the Fund is not less than the projected sum of the premiums to be written in the year after the valuation date.

(6) The Fund shall be credited with all Fund charges collected from policyholders and, in any year in which the Society has an operating loss, be charged with the loss.

(e) (1) Subject to paragraphs (2) and (3) of this subsection, each policyholder is subject to assessment as provided in §§ 3-110, 3-111, and 3-112 of this article.

(2) The amount of all assessments:

(i) may not exceed the premium for a full year calculated as of the policy anniversary immediately preceding the time of assessment; and

(ii) shall be reduced in the proportion that the percentage of the net balance of the Fund at the time of assessment bears to $5,000,000.

(3) With the approval of the Commissioner, the assessable liability of policyholders that does not exceed 5% of the annual premium may be extinguished.

(f) If the Society meets all applicable requirements of this article about the sale of nonassessable policies, including the requirements of §§ 4-104, 4-105, and 4-106 of this article, the Society may issue nonassessable policies subject to:

(1) § 3-113 of this article;

(2) all other applicable provisions of this article; and

(3) the Corporations and Associations Article.

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