Shown verbatim: the complete text as captured from the official PDF posted by the Maryland General Assembly, fetched 2026-09-25. Page and line markers are part of the official record; nothing is edited or removed. This is the chaptered version. The official bill page.
WES MOORE, Governor Ch. 688
Chapter 688
(House Bill 1616)
AN ACT concerning
Mutual Insurance Holding Companies – Conversion to Mutual Insurers
FOR the purpose of authorizing a mutual insurance holding company to convert its mutual
insurance holding company system to a mutual insurer on adoption and approval of
a plan of conversion; establishing certain requirements related to the plan of
conversion and its submission to the Maryland Insurance Commissioner for
approval; and generally relating to the conversion of mutual insurance holding
companies to mutual insurers.
BY repealing and reenacting, without amendments,
Article – Insurance
Section 3–121.1(a)
Annotated Code of Maryland
(2017 Replacement Volume and 2025 Supplement)
BY repealing and reenacting, with amendments,
Article – Insurance
Section 3–121.1(l) and (m)
Annotated Code of Maryland
(2017 Replacement Volume and 2025 Supplement)
BY adding to
Article – Insurance
Section 3–121.2
Annotated Code of Maryland
(2017 Replacement Volume and 2025 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article – Insurance
3–121.1.
(a) (1) In this section the following words have the meanings indicated.
(2) “Mutual insurance holding company” means a nonstock corporation
that:
(i) is incorporated in the State in accordance with a plan of
reorganization adopted and approved under this section; and
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Ch. 688 2026 LAWS OF MARYLAND
(ii) is the parent of a reorganized stock insurer.
(3) “Reorganized stock insurer” means the stock corporation into which a
mutual insurer is reorganized in accordance with a plan of reorganization adopted and
approved under this section.
(l) (1) A mutual insurance holding company:
(i) may not dissolve or liquidate except through proceedings under
Title 9 of this article OR IN ACCORDANCE WITH § 3–121.2 OF THIS SUBTITLE; and
(ii) shall be a party to any proceeding under Title 9 of this article
involving a reorganized stock insurer that is a subsidiary of the mutual insurance holding
company.
(2) In any proceeding under Title 9 involving a reorganized stock insurer
that is a subsidiary of a mutual insurance holding company, the assets of the mutual
insurance holding company shall be deemed to be assets of the estate of the reorganized
stock insurer for purposes of satisfying the claims of the reorganized stock insurer’s
policyholders.
(m) A mutual insurance holding company may become a stock insurer in
accordance with § 3–121 of this subtitle OR A MUTUAL INSURER IN ACCORDANCE WITH
§ 3–121.2 OF THIS SUBTITLE.
3–121.2.
(A) (1) IN THIS SECTION THE FOLLOWING WORDS HAVE THE MEANINGS
INDICATED.
(2) “MUTUAL INSURANCE HOLDING COMPANY” MEANS A NONSTOCK
CORPORATION THAT:
(I) IS INCORPORATED IN THE STATE IN ACCORDANCE WITH A
PLAN OF REORGANIZATION ADOPTED AND APPROVED UNDER § 3–121.1 OF THIS
SUBTITLE; AND
(II) IS THE PARENT OF A REORGANIZED STOCK INSURER.
(3) “REORGANIZED STOCK INSURER” MEANS THE STOCK
CORPORATION INTO WHICH A MUTUAL INSURER IS REORGANIZED IN ACCORDANCE
WITH A PLAN OF REORGANIZATION ADOPTED AND APPROVED UNDER § 3–121.1 OF
THIS SUBTITLE.
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WES MOORE, Governor Ch. 688
(B) A MUTUAL INSURANCE HOLDING COMPANY THAT, DIRECTLY OR
INDIRECTLY, OWNS 100% OF THE CAPITAL STOCK OF A REORGANIZED STOCK
INSURER MAY CONVERT ITS MUTUAL INSURANCE HOLDING COMPANY SYSTEM INTO
A MUTUAL INSURER IN ACCORDANCE WITH A PLAN OF CONVERSION ADOPTED AND
APPROVED UNDER THIS SECTION.
(C) A PLAN OF CONVERSION SHALL PROVIDE THAT:
(1) ON THE EFFECTIVE DATE OF THE CONVERSION, THE MEMBERSHIP
INTERESTS IN THE MUTUAL INSURANCE HOLDING COMPANY SHALL BECOME
NONTRANSFERABLE MEMBERSHIP INTERESTS IN THE CONVERTED MUTUAL
INSURER;
(2) FUTURE POLICYHOLDERS OF THE CONVERTED MUTUAL INSURER
SHALL BE MEMBERS OF THE CONVERTED MUTUAL INSURER;
(3) ON THE EFFECTIVE DATE OF THE CONVERSION, EACH POLICY OF
THE REORGANIZED STOCK INSURER SHALL REMAIN IN EFFECT AND MAY BE
ENDORSED;
(4) THE SHARES OF THE REORGANIZED STOCK INSURER AND ANY
INTERMEDIATE STOCK HOLDING COMPANY SHALL BE RETIRED;
(5) THE MUTUAL INSURANCE HOLDING COMPANY AND ANY
INTERMEDIATE STOCK HOLDING COMPANY SHALL BE DISSOLVED BY FILING
ARTICLES OF DISSOLUTION WITH THE STATE DEPARTMENT OF ASSESSMENTS AND
TAXATION; AND
(6) THE CONVERTED MUTUAL INSURER SHALL HAVE SURPLUS FUNDS
THAT ARE REASONABLY ADEQUATE FOR THE SECURITY OF ITS POLICYHOLDERS.
(D) (1) A PLAN OF CONVERSION SHALL BE:
(I) APPROVED BY THE VOTE OF A MAJORITY OF THE BOARD OF
DIRECTORS OF THE MUTUAL INSURANCE HOLDING COMPANY AND ANY
INTERMEDIATE STOCK HOLDING COMPANY;
(II) SUBMITTED TO A MEETING OF MEMBERS OF THE MUTUAL
INSURANCE HOLDING COMPANY; AND
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Ch. 688 2026 LAWS OF MARYLAND
(III) APPROVED BY THE VOTE OF AT LEAST 75% OF THE
MEMBERS WHO VOTE ON THE PLAN OF CONVERSION IN PERSON, BY PROXY, OR BY
MAIL.
(2) NOTICE OF THE TIME, PLACE, AND PURPOSE OF THE MEETING OF
MEMBERS REQUIRED UNDER PARAGRAPH (1)(II) OF THIS SUBSECTION SHALL BE
PROVIDED IN THE MANNER APPROVED BY THE COMMISSIONER.
(E) A PLAN OF CONVERSION SHALL BE SUBMITTED TO THE COMMISSIONER
FOR APPROVAL AT LEAST 60 DAYS BEFORE THE EFFECTIVE DATE OF THE
CONVERSION, TOGETHER WITH:
(1) AMENDMENTS TO THE ARTICLES OF INCORPORATION AND
BYLAWS OF THE REORGANIZED STOCK INSURER NECESSARY TO CONVERT TO A
MUTUAL INSURER;
(2) A 5–YEAR PLAN OF OPERATION FOR THE CONVERTED MUTUAL
INSURER, INCLUDING ANY PLANS FOR THE TRANSFER OF ASSETS OR LIABILITIES
FROM THE MUTUAL INSURANCE HOLDING COMPANY OR ANY INTERMEDIATE
HOLDING COMPANY TO THE CONVERTED MUTUAL INSURER;
(3) A LIST OF THE OFFICERS AND DIRECTORS OF THE CONVERTED
MUTUAL INSURER;
(4) A BIOGRAPHICAL AFFIDAVIT OF EACH OFFICER AND DIRECTOR OF
THE CONVERTED MUTUAL INSURER; AND
(5) ANY OTHER DOCUMENTS OR INFORMATION REQUESTED BY THE
COMMISSIONER.
(F) (1) UNLESS DISAPPROVED BY THE COMMISSIONER, A PLAN OF
CONVERSION IS APPROVED:
(I) ON WRITTEN NOTICE FROM THE COMMISSIONER; OR
(II) 60 DAYS AFTER THE DATE THAT THE PLAN AND ALL
INFORMATION REQUIRED UNDER THIS SECTION AND UNDER ANY REGULATION
ADOPTED IN ACCORDANCE WITH THIS SECTION ARE SUBMITTED TO THE
COMMISSIONER.
(2) (I) SUBJECT TO SUBPARAGRAPH (II) OF THIS PARAGRAPH, THE
COMMISSIONER SHALL APPROVE THE PLAN OF CONVERSION IF THE PLAN:
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WES MOORE, Governor Ch. 688
1. COMPLIES WITH THIS SECTION; AND
2. IS EQUITABLE TO THE MEMBERS OF THE MUTUAL
INSURANCE HOLDING COMPANY AND THE POLICYHOLDERS OF THE REORGANIZED
STOCK INSURER.
(II) IN APPROVING A PLAN OF CONVERSION, THE
COMMISSIONER MAY IMPOSE ADDITIONAL CONDITIONS AND REQUIREMENTS THAT
THE COMMISSIONER DETERMINES ARE NECESSARY TO ACHIEVE THE PURPOSES OF
THIS SECTION.
(III) ON WRITTEN NOTICE TO THE MUTUAL INSURANCE HOLDING
COMPANY, THE COMMISSIONER MAY HOLD A HEARING NECESSARY TO DETERMINE
IF THE PLAN OF CONVERSION MEETS THE REQUIREMENTS OF THIS PARAGRAPH.
(3) THE COMMISSIONER MAY RETAIN, AT THE EXPENSE OF THE
MUTUAL INSURANCE HOLDING COMPANY, A QUALIFIED EXPERT WHO IS NOT A PART
OF THE COMMISSIONER’S STAFF TO ASSIST IN REVIEWING THE PLAN OF
CONVERSION.
(G) THE COMMISSIONER MAY ADOPT REGULATIONS TO CARRY OUT THIS
SECTION.
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect
October 1, 2026.
Approved by the Governor, May 26, 2026.
–5–Every fact on this page links to its source, starting with the official bill record.