Md. Code Regs. 31.15.05.03

Current through Register Vol. 51, No. 12, June 14, 2024

Section 31.15.05.03 - Procedure

The following shall govern the contents of advertisements and public announcements concerning financial condition of insurers:

A. Domestic and Foreign Insurers. Except as provided elsewhere in this chapter, or as may be permitted by order of the Commissioner, every advertisement, sign, pamphlet, circular, card, or other public announcement, issued or distributed in this State by any domestic or foreign insurer, a subsidiary thereof, a holding company or controlled person as defined in Insurance Article, § 7-101, Annotated Code of Maryland, or by any agent of any of the foregoing, purporting to make known the separate financial condition of the insurer, shall show the amount of its admitted assets, its liabilities and reserves required or permitted by law, and the amount of its surplus as regards policyholders, and the same may not materially conflict with the true annual statement filed by it with the Commissioner next preceding the publication of the advertisement or the public distribution of the announcement. The surplus as regards policyholders shall show therein the amount of the paid up capital stock, if any, of the insurer. The foregoing does not apply to an advertisement, sign, pamphlet, circular, card, or other public announcement concerning an insurer showing only the amount of its capital paid up, or the surplus of the insurer and its capital, if any, separately or combined, but these items may not be in excess of the corresponding item shown on the true annual statement filed by the insurer with the Commissioner next preceding the making or issuing of the advertisement.

B. Alien Insurers. Every advertisement, sign, pamphlet, circular, card, or other public announcement, issued or distributed in this State by any alien insurer doing business in this State, a subsidiary thereof, a holding company or controlled person as defined in Insurance Article, § 7-101, Annotated Code of Maryland, as amended, or by any agent of any of the foregoing, purporting to make known the separate financial condition of the insurer, shall show as assets only its admitted assets held by its United States branch, its liabilities and reserves required by law, and the amount of its surplus as regards policyholders in the United States, and may not materially conflict with the true annual statement filed by it with the Commissioner next preceding the publication of the advertisement or the public distribution of the announcement. The surplus as regards policyholders shall show therein the amount of the statutory deposits of the United States branch, if any. Notwithstanding the foregoing requirement, any authorized life insurance company or fraternal society organized under the laws of Canada or any province of Canada may use in its advertising in this State a statement of its complete financial condition, in addition to its statement showing the amount of its total admitted assets and liabilities in the United States if a similar domestic insurer is permitted by the laws of Canada or any province of Canada to advertise therein its complete financial condition on a corresponding basis.

C. Pledged Securities. A published statement of separate financial condition may not be issued or distributed as provided in §A or B of this regulation concerning any such insurer unless there shall be clearly shown in the statement, or as a footnote to the statement, the amount of any of its securities, included in its admitted assets, which are pledged as collateral for any loan or loans or financial guarantees, or which, being neither in its possession nor under its control, are not available for the payment of losses and claims or are not held for the protection of of its policyholders or of its policyholders and creditors.

D. Reinsurance. No insurer authorized or accepted to do business in this State or any subsidiary thereof, or any holding company or controlled person as defined in Insurance Article, § 7-101, Annotated Code of Maryland, as amended, or any agent of any one of the foregoing, may, in any advertisement or other public announcement make any statement or communication to the effect that the insurer has, or expects to have, reinsurance, or to the effect that the insurer's policies are guaranteed, wholly or partly by any other person, insurer, or institution.

E. Reports to Government and Stockholders. Nothing in this chapter shall apply to reports issued to stockholders or government agencies or instrumentalities by a holding company or a controlled person as defined in Insurance Article, § 7-101, Annotated Code of Maryland, as amended. This regulation does not prohibit any supplemental reference concerning the separate financial condition of an insurer on the basis of actual market value of its securities or the inclusion of supplemental factual information with respect to the separate financial condition of the insurer in a report issued by the insurer to its stockholders or policyholders.

F. Holding Companies. Advertisements and other public announcements which are primarily directed at calling the attention of policyholders or prospective policyholders to an insurer and which contain a statement of the separate financial condition of the holding company system shall also contain a statement of the separate financial condition of the insurer which shall comply with this chapter.

G. Consolidated Statements. Consolidated financial statements of any authorized insurer and one or more of its subsidiaries may be used only to the extent authorized by the Commissioner or required by any government agency or instrumentality.

H. Exception for SEC Filings. Disclosures of financial condition contained in registration statements, prospectuses, and proxy statements filed with the Securities and Exchange Commission shall be deemed to meet the requirements of the provisions of this chapter with regard to their content so long as the disclosures are in conformity with the Securities Act of 1933 and the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder.

I. Waiver. Any person affected by this chapter may apply for a waiver from its provisions, or a modification of its provisions. The Commissioner may grant waiver or modification if he deems it to be justified and not adverse to the public interest.

Md. Code Regs. 31.15.05.03