Md. Code Regs. 11.18.02.04

Current through Register Vol. 51, No. 21, October 18, 2024

Section 11.18.02.04 - Security Requirements for Self-Insurers

A. The Administration may require a deposit of:

(1) Money;

(2) An irrevocable letter of credit;

(3) Other securities as may be appropriate; or

(4) A surety bond, in a form and amount determined by the Administration as sufficient, to provide protection to the public.

B. An irrevocable letter of credit or a surety bond filed with the Administration shall include a provision that the Administration will receive notice of cancellation at least 30 days before the cancellation date.

C. Money, Securities, or Surety Bond.

(1) A deposit of money or securities may be used by the Administrator for outstanding unpaid final judgments against the named self-insured, within statutory limits.

(2) A deposit of money, securities, or a surety bond may be released only if the Administration is satisfied that all claims have been satisfied and that the applicable statutes of limitation have expired.

D. The minimum security for self-insurance certification required for each class of self-insurer is, for:

(1) Class A, security in the amount of $250,000;

(2) Class B, a dedicated claim reserve fund with a minimum balance of $250,000 and irrevocable letters of credit for $100,000 increased each year for 5 years, as shown below:

Taxicabs	Letter of Credit or Surety Bond
(a) 26-50	$30,000 the first year and $15,000 each year for years 2-5,
(b) 51-100	$50,000 the first year and $25,000 each year for years 2-5,
(c) 101-200	$70,000 the first year and $35,000 each year for years 2-5,
(d) 201-300	$100,000 the first year and $50,000 each year for years 2-5,
(e) 301-400	$130,000 the first year and $65,000 each year for years 2-5;

(3) Class C, a letter of guarantee that any valid claims will be paid, signed by the chief executive and chief financial officers, or, in the case of a local government, the top elected official and the comptroller; and

(4) Class D, acceptable security in the amount of:

(a) $500,000; or

(b) $250,000, with an excess or reinsurance policy acceptable to the Administration.

E. The letters of credit required in §D(2) of this regulation shall:

(1) Be issued January 1 of each year,

(2) Be received by January 1 of each year,

(3) Be payable on demand to the Motor Vehicle Administration upon presentation of a final judgment against the named self-insured, within statutory limits, that remains unsatisfied, and

(4) Remain in effect for a period of 3 years after termination of self-insured status to cover claims that may be filed within the statutes of limitation, unless superseded by a bond or other evidence of financial security satisfactory to the Administration.

Md. Code Regs. 11.18.02.04

Regulations .04 adopted effective February 4, 1976 (3:3 Md. R. 153)
Regulations .04 adopted effective February 27, 1995 (22:4 Md. R. 237)