MarylandSB 09822026 Regular SessionSenate

Mutual Insurance Holding Companies - Conversion to Mutual Insurers

Sponsored By: Cory V. McCray (Democratic)

Signed by Governor

Insurance - Other than HealthCommerce and Business -see also- ElectrComm; ForeignTr; etc.HearingsInsurance AdministrationInsurance -see also- Health Ins; MAIF; Motor Vehicle InsNoticesPlans and ProposalsRules and Regulations

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Bill Overview

Analyzed Economic Effects

4 provisions identified: 3 benefits, 0 costs, 1 mixed.

Member vote and state review required

Beginning October 1, 2026, a conversion plan must get a majority vote of each board. Members must approve it by at least 75% of votes cast. The company must give meeting notices in a way the Commissioner approves. The plan and required documents must reach the Commissioner at least 60 days before the effective date. The Commissioner approves only if the plan follows the law and is fair to members and policyholders, and may add conditions, hold hearings, and make rules. If not disapproved, a complete filing is approved on written notice or automatically after 60 days. The Commissioner may hire outside experts, and the company pays those costs.

Policies stay active; policyholders become members

Beginning October 1, 2026, every policy stays in effect when a conversion happens; changes can be made by endorsement. After conversion, anyone who buys a policy becomes a member of the mutual insurer. The converted mutual insurer must keep a surplus that is reasonably adequate to protect policyholders.

Stronger backup for policyholder claims

Beginning October 1, 2026, the holding company must be a party to any Title 9 case involving its reorganized stock insurer. In those cases, the holding company’s assets count as assets of the insurer’s estate to help pay policyholder claims. A mutual insurance holding company may dissolve or liquidate only through Title 9 or the conversion process.

Holding companies can convert to mutual insurers

Beginning October 1, 2026, a mutual insurance holding company that owns 100% of its reorganized stock insurer can convert into a mutual insurer under an approved plan. It also may choose the separate stock‑insurer path set in law. On conversion, membership interests become nontransferable member rights in the mutual insurer. The plan retires all shares of the reorganized stock insurer and any intermediate holding company. The holding company and any intermediate holding company are dissolved by filing Articles of Dissolution with the State Department of Assessments and Taxation. The law defines who qualifies as a mutual insurance holding company and a reorganized stock insurer for this process.

Sponsors & Cosponsors

Sponsor

Cory V. McCray
Democratic • Senate

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 175 • No: 0

House vote • 4/13/2026

Third Reading Passed

Yes: 132 • No: 0 • Other: 8

Senate vote • 4/8/2026