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31.05.10.00.htm 31.05.10.00. Title 31 MARYLAND INSURANCE ADMINISTRATION Subtitle 05 ASSETS, LIABILITIES, RESERVES, AND INVESTMENTS OF INSURERS Chapter 10 Financial Guaranty Insurance Authority: Insurance Article, §5-1005, Annotated Code of Maryland
31.05.10.01.htm 31.05.10.01. 01 Definitions. A. In this chapter, the following terms have the meanings indicated.. B. Terms Defined.. 1) Asset-Backed Security.. a) "Asset-backed security" has the meaning stated in Insurance Article, §5-511(a)3) Annotated Code of Maryland.b) "Asset-backed security" includes a pool of credit default swaps or credit default swaps referencing a pool of obligations if:i) The swap counterparty whose obligations are insured under the credit default swap is a special pu
31.05.10.02.htm 31.05.10.02. 02 Contingency Reserve Requirements.. A. In General.. 1) In addition to the unearned premium reserve and the liability established for unpaid losses and loss adjustment expenses, a financial guaranty insurer shall maintain a contingency reserve.2) The purpose of the contingency reserve is to protect policyholders against loss during periods of extreme economic contraction.B. Amount of Contingency Reserve. The contingency reserve shall be computed in accordance with COMAR
31.05.10.03.htm 31.05.10.03. 03 Scope of Certificate of Authority.. A. In General.. 1) A financial guaranty insurer that holds a certificate of authority for the purpose of transacting financial guaranty insurance may write financial guaranty insurance to insure debt instruments and other monetary obligations only in the following categories:a) Municipal obligation bonds;. b) Special revenue bonds;. c) Industrial development bonds;. d) Corporate obligations;. e) Limited partnership obligations;.
31.05.10.04.htm 31.05.10.04. 04 Credit Risk Exposure Limits.. A. A financial guaranty insurer's outstanding total liability for municipal obligation bonds, special revenue bonds, and industrial development bonds shall be investment grade to the following extent:1) For financial guaranty insurers rated AAA by a nationally recognized statistical rating organization, at least 95 percent;2) For financial guaranty insurers rated AA by a nationally recognized statistical rating organization, at least 85 percent; and
31.05.10.05.htm 31.05.10.05. 05 Aggregate Risk Limits.. A. A financial guaranty insurer shall at all times maintain capital, surplus, and contingency reserve in the aggregate not less than the sum of:1) 0.3333 percent or 1/300th of the total liability under guaranties of municipal obligation bonds and special revenue bonds, including obligations demonstrated to the satisfaction of the Commissioner to be the functional equivalent of municipal obligation bonds or special revenue bonds, and investm
31.05.10.06.htm 31.05.10.06. 06 Single Risk Limits.. A financial guaranty insurer doing business in this State shall limit its exposure to loss, net of collateral and reinsurance, as follows:A. For municipal obligation bonds, special revenue bonds, and obligations demonstrated to the satisfaction of the Commissioner to be the functional equivalent of municipal obligation bonds or special revenue bonds:1) The insured average annual debt service with respect to any one entity and backed by a single rev
31.05.10.07.htm 31.05.10.07. 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 expo
31.05.10.08.htm 31.05.10.08. 08 Collateral.. Collateral shall be:. A. Deposited with the financial guaranty insurer;. B. Held in trust by a trustee or custodian acceptable to the Commissioner for the benefit of the financial guaranty insurer; orC. Held in trust pursuant to the bond indenture or other trust arrangement for the benefit of security holders in the form of funds for the payment of insured obligations, sinking funds, or other reserves that may be used to pay the insured obligatio
31.05.10.9999.htm 31.05.10.9999. Administrative History Effective date: September 15, 2003 (30:18 Md. R. 1260). Regulation .01B 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)Regulation .04 repealed and new Regulation .04 adopted as an emergency provision effective March 9, 2006 (33:7 Md. R. 667) adopted permanently effective June 5, 2006 (33:11 Md. R. 954)Regulation .06B amended as an emergency provision
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