Ch. 788                            MARVIN MANDEL, Governor                                 1643

CHAPTER 788
(House Bill 580)

AN ACT to repeal and re-enact, with amendments, Section 362 of Article 48A of
the Annotated Code of Maryland (1972 Replacement Volume), title "Insurance
Code," subtitle "21. Variable Contracts," to provide that any stock or mutual
life insurance company may invest up to [[50% ]] 25% of the assets of any
segregated asset account in non-dividend paying stock, provided that the issuer
of such stock has had a satisfactory earnings record as defined in the statute;
1 [to provide that the amounts allocated by a life insurance company to the
segregated asset account shall be owned by the life insurance company, that the
company shall not be nor hold itself out to be a trustee with respect to such
amounts,]] that to the extent provided under any applicable life insurance or
annuity contracts, that portion of the assets of any segregated asset account
equal to the reserve and other contract liabilities with respect to such account
will not be chargeable with liabilities arising out of any other business the life
insurance company may conduct and generally relating to variable annuities.

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That Section 362 of Article 48A of the Annotated Code of
Maryland (1972 Replacement Volume), title "Insurance Code," subtitle "21.
Variable Contracts," be and it is hereby repealed and re-enacted, with
amendments, to read as follows:

362.

(a) Any stock or mutual life insurer authorized to issue life insurance and/or
annuities in this State may also issue individual and group variable life insurance
and annuity contracts which provide for payment varying directly with the
investment experience of a segregated asset account, upon being specifically
authorized by the Commissioner to issue such variable contracts, such
authorization being based on the insurer's compliance with rules and regulations
promulgated by the Commissioner. Such rules and regulations may include
requirements for a minimum capital and surplus in excess of the amount otherwise
required for the issuance of life insurance and/or annuities which are not variable
contracts, and such other requirements which the Commissioner deems appropriate
to safeguard the interests of variable contract holders, other policyholders, insurers,
and the public.

[(b) The investments in any such segregated asset account shall be subject to the
provisions of this article except that preferred and common stock investments of
amounts allocated to any such account shall not be included in applying the 10%
limitations provided in the first proviso of Section 96, subsection (6) of this article.
Such investments shall also comply with rules and regulations promulgated by the
Commissioner in regard to such segregated asset accounts.]