3220

LAWS OF MARYLAND

Ch. 876

values and nonforfeiture benefits in such policies as the
Commissioner shall approve.]

(e) If IN ANY CONTRACT YEAR the gross premium
charged by any insurer on any policy or contract is less
than the VALUATION net premium for the policy or contract
[according to the mortality table, rate of interest and]
CALCULATED BY THE method used in calculating the reserve
[thereon,] ON IT BUT USING THE MINIMUM VALUATION STANDARDS
OF MORTALITY AND RATE OF INTEREST [there shall be maintained
on such policy or contract a deficiency reserve in addition
to all other reserves 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]., THE MINIMUM RESERVE REQUIRED
FOR THE POLICY OR CONTRACT IN EACH CONTRACT YEAR SHALL BE
THE GREATER OF EITHER THE RESERVE CALCULATED ACCORDING TO
THE MORTALITY TABLE, RATE OF INTEREST, AND METHOD ACTUALLY
USED FOR THE POLICY OR CONTRACT, OR THE RESERVE CALCULATED
BY THE METHOD ACTUALLY USED FOR THE POLICY OR CONTRACT BUT
USING THE MINIMUM STANDARDS OF MORTALITY AND RATE OF
INTEREST AND REPLACING THE VALUATION NET PREMIUM FOR THAT
CONTRACT YEAR BY THE ACTUAL GROSS PREMIUM IN EACH CONTRACT
YEAR FOR EACH CONTRACT YEAR FOR THAT CONTRACT YEAR IN WHICH
THE VALUATION NET PREMIUM EXCEEDS THE ACTUAL GROSS PREMIUM.
IF THE GROSS PREMIUM RATES FOR THE POLICY OR CONTRACT ARE
NOT BASED CONSISTENTLY ON A SUITABLE ACCEPTED OR CREDIBLE
MORTALITY BASIS OR TABLE, THE COMMISSIONER MAY REQUIRE
ADDITIONAL RESERVES IN ACCORDANCE WITH SECTION 77(3)(IV) OF
THIS ARTICLE.

408A.

(D) THIS SECTION SHALL APPLY TO ONLY THOSE INDIVIDUAL
ANNUITIES ISSUED PRIOR TO THE OPERATIVE DATE OF SECTION 408B
(THE STANDARD NONFORFEITURE LAW FOR INDIVIDUAL DEFERRED
ANNUITIES).

408B.

(A)  THIS SECTION SHALL BE KNOWN AS THE STANDARD
NONFORFEITURE LAW FOR INDIVIDUAL DEFERRED ANNUITIES.

(B)  THIS SECTION MAY NOT APPLY TO:

(1)  ANY REINSURANCE, GROUP ANNUITY PURCHASED
UNDER A RETIREMENT PLAN OR PLAN OF DEFERRED COMPENSATION
ESTABLISHED OR MAINTAINED BY AN EMPLOYER (INCLUDING A
PARTNERSHIP OR SOLE PROPRIETORSHIP) OR BY AN EMPLOYEE
ORGANIZATION, OR BY BOTH, OTHER THAN A PLAN PROVIDING
INDIVIDUAL RETIREMENT ACCOUNTS OR INDIVIDUAL RETIREMENT
ANNUITIES UNDER SECTION 408 OF THE INTERNAL REVENUE CODE, AS
AMENDED;

(2)  PREMIUM DEPOSIT FUND;