COMAR 31.04.18.03. Adequacy of Surplus

The factors set forth in Insurance Article, §7 –105(a), Annotated Code of Maryland, are not intended to be an exhaustive list for use in determining whether an insurer’s assets and surplus are reasonable in relation to the insurer’s outstanding liabilities and adequate to meet its financial needs. In applying the factors set forth in Insurance Article, §7 –105(a), Annotated Code of Maryland, the Commissioner shall adhere to the following principles:

A. The Commissioner may not deem any single factor as necessarily controlling;

B. The Commissioner shall consider the net effect of the factors, plus other factors deemed by the Commissioner to impact the financial condition of the insurer;

C. In comparing the surplus maintained by other insurers, the Commissioner shall consider the extent to which each of the factors varies from company to company; and

D. In determining the quality and liquidity of investments in subsidiaries, the Commissioner shall consider the individual subsidiary and may discount or disallow its valuation to the extent the individual investments so warrant.