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*hb1616*
HOUSE BILL 1616
C4 6lr3680
CF SB 982
By: Delegate Rogers
Introduced and read first time: February 19, 2026
Assigned to: Rules and Executive Nominations
Re–referred to: Economic Matters, February 26, 2026
Re–referred to: Judiciary, March 2, 2026
Committee Report: Favorable
House action: Adopted
Read second time: March 9, 2026
CHAPTER ______
AN ACT concerning 1
Mutual Insurance Holding Companies – Conversion to Mutual Insurers 2
FOR the purpose of authorizing a mutual insurance holding company to convert its mutual 3
insurance holding company system to a mutual insurer on adoption and approval of 4
a plan of conversion; establishing certain requirement s related to the plan of 5
conversion and its submission to the Maryland Insurance Commissioner for 6
approval; and generally relating to the conversion of mutual insurance holding 7
companies to mutual insurers. 8
BY repealing and reenacting, without amendments, 9
Article – Insurance 10
Section 3–121.1(a) 11
Annotated Code of Maryland 12
(2017 Replacement Volume and 2025 Supplement) 13
BY repealing and reenacting, with amendments, 14
Article – Insurance 15
Section 3–121.1(l) and (m) 16
Annotated Code of Maryland 17
(2017 Replacement Volume and 2025 Supplement) 18
BY adding to 19
Article – Insurance 20
2 HOUSE BILL 1616
Section 3–121.2 1
Annotated Code of Maryland 2
(2017 Replacement Volume and 2025 Supplement) 3
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 4
That the Laws of Maryland read as follows: 5
Article – Insurance 6
3–121.1. 7
(a) (1) In this section the following words have the meanings indicated. 8
(2) “Mutual insurance holding company” means a nonstock corporation 9
that: 10
(i) is incorporated in the State in accordance with a plan of 11
reorganization adopted and approved under this section; and 12
(ii) is the parent of a reorganized stock insurer. 13
(3) “Reorganized stock insurer” means the stock corporation into which a 14
mutual insurer is reorganized in accordance with a plan of reorganization adopted and 15
approved under this section. 16
(l) (1) A mutual insurance holding company: 17
(i) may not dissolve or liquidate except through proceedings under 18
Title 9 of this article OR IN ACCORDANCE WITH § 3–121.2 OF THIS SUBTITLE; and 19
(ii) shall be a party to any proceeding under Title 9 of this article 20
involving a reorganized stock insurer that is a subsidiary of the mutual insurance holding 21
company. 22
(2) In any proceeding under Title 9 involving a reorganized stock insurer 23
that i s a subsidiary of a mutual insurance holding company, the assets of the mutual 24
insurance holding company shall be deemed to be assets of the estate of the reorganized 25
stock insurer for purposes of satisfying the claims of the reorganized stock insurer’s 26
policyholders. 27
(m) A mutual insurance holding company may become a stock insurer in 28
accordance with § 3–121 of this subtitle OR A MUTUAL INSURER IN ACCORDANCE WITH 29
§ 3–121.2 OF THIS SUBTITLE. 30
3–121.2. 31
HOUSE BILL 1616 3
(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 1
INDICATED. 2
(2) “MUTUAL INSURANCE HOLDING COMPANY” MEANS A NONSTOCK 3
CORPORATION THAT: 4
(I) IS INCORPORATED IN T HE STATE IN ACCORDANCE W ITH A 5
PLAN OF REORGANIZATI ON ADOPTED AND APPRO VED UNDER § 3–121.1 OF THIS 6
SUBTITLE; AND 7
(II) IS THE PARENT OF A REORGANIZED STOCK INSURER. 8
(3) “REORGANIZED STOCK INS URER” MEANS THE STOCK 9
CORPORATION INTO WHICH A MUTUAL INSURER IS REORGANIZED IN ACCORDANCE 10
WITH A PLAN OF REORG ANIZATION ADOPTED AND APPROVED UNDER § 3–121.1 OF 11
THIS SUBTITLE. 12
(B) A MUTUAL INSURANCE HOLDING CO MPANY THAT , DIRECTLY OR 13
INDIRECTLY, OWNS 100% OF THE CAPITAL STOCK OF A REORGANIZED STO CK 14
INSURER MAY CONVERT ITS MUTUAL INSURANCE HOLDING COMPANY SYSTEM INTO 15
A MUTUAL INSURER IN ACCORDANCE WITH A PLAN OF CONVERSION ADOPTED AND 16
APPROVED UNDER THIS SECTION. 17
(C) A PLAN OF CONVERSION SHALL PROVIDE THAT: 18
(1) ON THE EFFECTIVE DATE OF THE CONVERSION, THE MEMBERSHIP 19
INTERESTS IN THE MUT UAL INSURANCE HOLDIN G COMPANY SHALL BECO ME 20
NONTRANSFERABLE MEMB ERSHIP INTERESTS IN THE CONVERTED MUTUAL 21
INSURER; 22
(2) FUTURE POLICYHOLDERS OF THE CONVERTED MUTUAL INSURER 23
SHALL BE MEMBERS OF THE CONVERTED MUTUAL INSURER; 24
(3) ON THE EFFECTIVE DATE OF THE CONVERSION, EACH POLICY OF 25
THE REORGANIZED STOC K INSURER SHALL REMA IN IN EFFECT AND MAY BE 26
ENDORSED; 27
(4) THE SHARES OF THE RE ORGANIZED STOCK INSU RER AND ANY 28
INTERMEDIATE STOCK HOLDING COMPANY SHALL BE RETIRED; 29
(5) THE MUTUAL INSURANCE HOLDING COMPANY AND ANY 30
INTERMEDIATE STOCK H OLDING COMPANY SHALL BE DISSOLVED BY FILI NG 31
4 HOUSE BILL 1616
ARTICLES OF DISSOLUTION WITH THE STATE DEPARTMENT OF ASSESSMENTS AND 1
TAXATION; AND 2
(6) THE CONVERTED MUTUAL INSURER SHALL HAVE SURPLUS FUNDS 3
THAT ARE REASONABLY ADEQUATE FOR THE SECURITY OF ITS POLICYHOLDERS. 4
(D) (1) A PLAN OF CONVERSION SHALL BE: 5
(I) APPROVED BY THE VOTE OF A MAJORITY OF THE BOARD OF 6
DIRECTORS OF THE MUT UAL INSURANCE HOLDIN G COMPANY AND ANY 7
INTERMEDIATE STOCK HOLDING COMPANY; 8
(II) SUBMITTED TO A MEETI NG OF MEMBERS OF THE MUTUAL 9
INSURANCE HOLDING COMPANY; AND 10
(III) APPROVED BY THE VOTE OF AT LEAST 75% OF THE 11
MEMBERS WHO VOTE ON THE PLAN OF CONVERSI ON IN PERSON, BY PROXY, OR BY 12
MAIL. 13
(2) NOTICE OF THE TIME, PLACE, AND PURPOSE OF THE MEETING OF 14
MEMBERS REQUIRED UND ER PARAGRAPH (1)(II) OF THIS SUBSECTION S HALL BE 15
PROVIDED IN THE MANNER APPROVED BY THE COMMISSIONER. 16
(E) A PLAN OF CONVERSION SHALL BE SUBMITTED TO THE COMMISSIONER 17
FOR APPROVAL AT LEAS T 60 DAYS BEFORE THE EFFE CTIVE DATE OF THE 18
CONVERSION, TOGETHER WITH: 19
(1) AMENDMENTS TO THE AR TICLES OF INCORPORAT ION AND 20
BYLAWS OF THE REORGA NIZED STOC K INSURER NECESSARY TO CONVERT TO A 21
MUTUAL INSURER; 22
(2) A 5–YEAR PLAN OF OPERATI ON FOR THE CONVERTED MUTUAL 23
INSURER, INCLUDING ANY PLANS FOR THE TRANSFER OF ASSETS OR LIABILITIE S 24
FROM THE MUTUAL INSU RANCE HOLDING COMPAN Y OR ANY INTERMEDIAT E 25
HOLDING COMPANY TO THE CONVERTED MUTUAL INSURER; 26
(3) A LIST OF THE OFFICE RS AND DIRECTORS OF THE CONVERTED 27
MUTUAL INSURER; 28
(4) A BIOGRAPHICAL AFFIDAVIT OF EACH OFFICER AND DIRECTOR OF 29
THE CONVERTED MUTUAL INSURER; AND 30
HOUSE BILL 1616 5
(5) ANY OTHER DOCUMENTS OR INFORMATION REQUESTED BY THE 1
COMMISSIONER. 2
(F) (1) UNLESS DISAPPROVED BY THE COMMISSIONER, A PLAN OF 3
CONVERSION IS APPROVED: 4
(I) ON WRITTEN NOTICE FROM THE COMMISSIONER; OR 5
(II) 60 DAYS AFTER THE DATE THAT THE PLAN AND AL L 6
INFORMATION REQUIRED UNDER THIS SECTION AND UNDER ANY REGULATION 7
ADOPTED IN ACCORDANC E WITH THIS SECTION ARE SUBMITTED TO THE 8
COMMISSIONER. 9
(2) (I) SUBJECT TO SUBPARAGRAPH (II) OF THIS PARAGRAPH, THE 10
COMMISSIONER SHALL APPROVE THE PLAN OF CONVERSION IF THE PLAN: 11
1. COMPLIES WITH THIS SECTION; AND 12
2. IS EQUITABLE TO THE MEMBERS OF THE MUTUA L 13
INSURANCE HOLDING COMPANY AND THE POLICY HOLDERS OF THE REORG ANIZED 14
STOCK INSURER. 15
(II) IN APPROVING A PLAN O F CONVERSION , THE 16
COMMISSIONER MAY IMPOSE ADDITIONAL CONDITIONS AND REQUIREMENTS THAT 17
THE COMMISSIONER DETERMINES ARE NECESSARY TO ACHIEVE THE PURPOSES OF 18
THIS SECTION. 19
(III) ON WRITTEN NOTICE TO THE MUTUAL INSURANCE HOLDING 20
COMPANY, THE COMMISSIONER MAY HOLD A HEARING NECESSARY TO DETERMINE 21
IF THE PLAN OF CONVERSION MEETS THE REQUIREMENTS OF THIS PARAGRAPH. 22
(3) THE COMMISSIONER MAY RETA IN, AT THE EXPENSE OF TH E 23
MUTUAL INSURANCE HOLDING COMPANY, A QUALIFIED EXPERT WHO IS NOT A PART 24
OF THE COMMISSIONER’S STAFF TO ASSIST IN REVIEWING THE PLAN O F 25
CONVERSION. 26
(G) THE COMMISSIONER MAY ADOP T REGULATIONS TO CAR RY OUT THIS 27
SECTION. 28
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 29
October 1, 2026. 30