Md. Code Regs. 31.08.09.07

Current through Register Vol. 51, No. 22, November 1, 2024

Section 31.08.09.07 - Excess Insurance Coverage

A. Each group shall maintain excess insurance coverage in an amount not less than $1,000,000 per occurrence and not less than $5,000,000 in the aggregate over a commercially available and reasonable attachment point subject to review of the Commissioner.

B. A group shall send a copy of its excess insurance policy to the Commissioner in the following circumstances:

(1) Within 60 days of the renewal or replacement of an existing policy unless, within 90 days after its inception date, such policy will be provided to the Commissioner pursuant to §B(3) of this regulation;

(2) Within 60 days of an amendment to an existing policy unless, within 90 days after its inception date, such amended policy will be provided to the Commissioner pursuant to §B(3) of this regulation;

(3) Annually as provided in COM4R 31.08.09.13B; or

(4) Upon request of the Commissioner.

C. The Commissioner may, in the Commissioner's discretion, take the following actions by notifying the group in writing:

(1) Increase the minimum amount of excess insurance coverage to assure adequacy of coverage for each group; and

(2) Require the group to obtain and maintain excess coverage with a specified attachment point upon consideration of, but not limited to, the following factors relating to the group:

(a) Size of group, that is, the number of members and premium volume;

(b) Financial condition of group;

(c) Group's risk versus surplus position;

(d) Group's loss development history; and

(e) The availability of reinsurance at specific attachment points at economically feasible rates.

D. Instead of maintaining excess insurance coverage as set forth in §A of this regulation, a group may deposit and maintain in trust with the State Treasurer, cash or government securities of the type described in Insurance Article, § 5-701(b), Annotated Code of Maryland, in an amount at least equal to the minimum excess insurance coverage required by §A of this regulation.

E. A policy of excess insurance may not be recognized by the Commissioner unless the policy is:

(1) Issued by an insurer admitted to do business in Maryland unless the Commissioner, in his discretion, allows the coverage to be placed with an approved surplus lines carrier; and

(2) Not subject to cancellation or nonrenewal for any reason except nonpayment of premium except upon 45 days notice sent by certified mail to the group and to the Commissioner.

Md. Code Regs. 31.08.09.07

Regulation .07 amended effective 44:4 Md. R. 256, eff. 1/1/2018