1022                            LAWS OF MARYLAND                      [CH. 553

with the further proviso that if such lower rate differs from the rate
used in the calculation of the nonforfeiture benefits by more than one-
half per cent (½%) the insurer issuing such policies shall file with
the Commissioner a plan providing for such equitable increases, if
any, in the cash surrender values and nonforfeiture benefits in such
policies as the Commissioner shall approve.

(e) If the gross premium charged by any insurer on any policy
or contract is less than the net premium for the policy or contract
according to the mortality table, rate of interest and method used in
calculating the reserve thereon, there shall be maintained on such
policy or contract a deficiency reserve in addition to all other re-
serves required by law. For each such policy or contract the deficiency
reserve shall be the present value, according to such standard, of an
annuity of the difference between such net premium and the premium
charged for such policy or contract, running for the remainder of the
premium-paying period.

84. Valuation of Investments.

(1)   The investments of every insurer, except securities subject to
amortization and except as otherwise provided in this subtitle, shall
be valued, in the discretion of the Commissioner, at their market
value, or at their appraised value, or at prices determined by him as
representing their fair market value. If the Commissioner finds that
in view of the character of investments it would be prudent for such
insurer to establish a special reserve for possible losses or fluctua-
tions in the values of its investments, he may require such insurer to
establish such reserve, reasonable in amount, and may require that
such reserve be maintained and reported in any statement or report
of the financial condition of such insurer. The Commissioner may, in
connection with any examination or required financial statement of
an authorized insurer, require such insurer to furnish him a complete
financial statement and audited report of the financial condition of
any corporation of which the securities are owned wholly or partly
by such insurer and may cause an examination to be made of any sub-
sidiary or affiliate of such insurer.

(2)   When any insurer owns fifteen per cent or more of the stock
of another insurer, such stock shall be valued at its book value as
shown by its last annual statement or the last report on examination,
whichever is more recent. The book value of a share of common
stock of an insurance company shall be ascertained by dividing (1)
the amount of its capital and surplus less the value of all its preferred
stock, if any, outstanding, by (2) the number of shares of its com-
mon stock issued and outstanding. Notwithstanding the foregoing
provisions, an insurer may, at its option, value its holdings of stock
in a subsidiary insurance company in an amount not less than ac-
quisition cost if such acquisition cost is less than the value deter-
mined as hereinbefore provided.

(3)   Real estate acquired by foreclosure or by deed in lieu thereof,
in the absence of a recent appraisal deemed by the Commissioner to
be reliable, shall not be valued at an amount greater than the un-
paid principal of the defaulted loan at the date of such foreclosure
or deed, together with any taxes and expenses paid or incurred by
such insurer at such time in connection with such acquisition (but
not including any uncollected interest on such loan), and the cost
of additions or improvements thereafter made by such insurer and