3366

LAWS OF MARYLAND

Ch. 553

Internal Revenue Code, as amended.

Reserves according to the Commissioners Annuity Reserve
Method for benefits under annuity or pure endowment
contracts, excluding any disability and accidental death
benefits in these contracts, shall be the greatest of the
respective excesses of the present values, at the date of
valuation, of the future guaranteed benefits, including
guaranteed nonforfeiture benefits, provided for by these
contracts at the end of each respective contract year, over
the present value, at the date of valuation, of any future
valuation considerations derived from future gross
considerations, required by the terms of the contract, that
become payable prior to the end of the respective contract
year. The future guaranteed benefits shall be determined by
using the mortality table, if any, and the interest rate, or
rates, specified in these contracts for determining
guaranteed benefits. The valuation considerations are the
portions of the respective gross considerations applied
under the terms of these contracts to determine
nonforfeiture values.

(c)  An insurer's aggregate reserves for all life
insurance policies, excluding disability and accidental
death benefits, may not be less than the aggregate reserves
calculated in accordance with the methods set forth in
paragraphs (b-1), (b-2), [and] (e), AND (F) and the
mortality table or tables and rate or rates of interest used
in calculating nonforfeiture benefits for such policies.

(d)  Reserves for any category of policies,
contracts or benefits as established by the Commissioner,
may be calculated, at the option of the insurer, according
to any standards which produce greater aggregate reserves
for such category than those calculated according to the
minimum standard herein provided, but the rate or rates of
interest used for policies and contracts, other than annuity
and pure endowment contracts, may not be higher than the
corresponding rate or rates of interest used in calculating
any nonforfeiture benefits provided for therein.

(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
calculated by the method used in calculating the reserve on
the policy or contract using either the minimum valuation
standards of mortality and rate of interest, or, in the case
of future renewals under a renewable term insurance policy,
the modern CSO mortality table published in the Transactions
of The Society of Actuaries, Vol. XXVII (1975), the minimum
reserve required for the policy or contract shall be the
greater of either (1) the reserve calculated according to
the mortality table, rate of interest, and method actually
used for the policy or contract, or (2) the reserve
calculated by the method actually used for the policy or