Md. Code Regs. 31.05.10.07

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

Section 31.05.10.07 - Insurers That Exceed Limitations

A. Submission of Written Plan. Except as provided in §C of this regulation, if a financial guaranty insurer at any time exceeds any limitation prescribed by Regulation .03 or .04-.06 of this chapter, the financial guaranty insurer shall, within 30 days after the limitation is exceeded, submit a written plan to the Commissioner detailing the steps that the financial guaranty insurer will take or has taken to reduce its exposure to loss to not more than the permitted amounts.

B. Notice and Hearing; Order. If, after notice and hearing, the Commissioner determines that a financial guaranty insurer has exceeded any limitation prescribed by Regulation .03 or .04-.06 of this chapter, the Commissioner may order the financial guaranty insurer to:

(1) Cease transacting any new financial guaranty insurance business until the financial guaranty insurer's exposure to loss no longer exceeds the limitations; or

(2) Limit its writing to investment grade obligations until such time as it is in compliance with the limitations.

C. Financial Guaranty Insurance Outstanding Before Effective Date of Chapter.

(1) Except as provided in §C(2) of this regulation, a financial guaranty insurer shall be in compliance with Regulations .03 and .04-.06 of this chapter by December 31, 2006.

(2) A financial guaranty insurer may not be deemed in violation of any limitation prescribed by Regulation .06 of this chapter with respect to a financial guaranty insurance policy that was outstanding before the effective date of this chapter, if the financial guaranty insurer was in compliance with the applicable single risk limit in effect in this State at the time that the financial guaranty insurance policy was issued.

(3) Failure to comply with Regulations .03 or .04-.06 of this chapter by the date established in §C(1) of this regulation shall result in a financial guaranty insurer being subject to the actions prescribed in §B of this regulation.

Md. Code Regs. 31.05.10.07

Regulation .07C amended as an emergency provision effective March 9, 2006 (33:7 Md. R. 667); amended permanently effective June 5, 2006 (33:11 Md. R. 954)