3380

LAWS OF MARYLAND

Ch. 553

THE BASIC CASH VALUE SHALL BE EQUAL TO THE PRESENT
VALUE, ON THE ANNIVERSARY, OF THE FUTURE GUARANTEED BENEFITS
WHICH WOULD HAVE BEEN PROVIDED FOR BY THE POLICY, EXCLUDING
ANY EXISTING PAID-UP ADDITIONS AND BEFORE DEDUCTION OF ANY
INDEBTEDNESS TO THE INSURER, IF THERE HAD BEEN NO DEFAULT,
LESS THE PRESENT VALUE OF THE NONFORFEITURE FACTORS, AS
HEREAFTER DEFINED, CORRESPONDING TO PREMIUMS WHICH WOULD
HAVE FALLEN DUE ON AND AFTER SUCH ANNIVERSARY. THE EFFECTS
ON THE BASIC CASH VALUE OF SUPPLEMENTAL LIFE INSURANCE OR
ANNUITY BENEFITS OR OF FAMILY COVERAGE, AS DESCRIBED IN
SUBSECTION (D) OR SUBSECTIONS (F) THROUGH (I), INCLUSIVE,
SHALL BE THE SAME AS ARE THE EFFECTS SPECIFIED IN SUBSECTION
(D) OR SUBSECTIONS (F) THROUGH (I), WHICHEVER IS APPLICABLE
ON THE CASH SURRENDER VALUES DEFINED IN THAT SUBSECTION.

THE NONFORFEITURE FACTOR FOR EACH POLICY YEAR SHALL BE
AN AMOUNT EQUAL TO A PERCENTAGE OF THE ADJUSTED PREMIUM FOR
THE POLICY YEAR, AS DEFINED IN SUBSECTIONS (F) THROUGH (I)
OR (K-l), WHICHEVER IS APPLICABLE. EXCEPT A3 IS REQUIRED BY
THE NEXT SUCCEEDING SENTENCE OF THIS PARAGRAPH, THAT
PERCENTAGE:

(1)  MUST BE THE SAME PERCENTAGE FOR EACH POLICY
YEAR BETWEEN THE SECOND POLICY ANNIVERSARY AND THE LATER OF:

(I)  THE FIFTH POLICY ANNIVERSARY; AND

(II)  THE FIRST POLICY ANNIVERSARY AT WHICH
THERE IS AVAILABLE UNDER THE POLICY A CASH SURRENDER VALUE
IN AN AMOUNT, BEFORE INCLUDING ANY PAID-UP ADDITIONS AND
BEFORE DEDUCTING ANY INDEBTEDNESS, OF AT LEAST .2 PERCENT OF
EITHER THE AMOUNT OF INSURANCE, IF THE INSURANCE BE ' UNIFORM
IN AMOUNT, OR THE AVERAGE AMOUNT OF INSURANCE AT THE
BEGINNING OF EACH OF THE FIRST 10 POLICY YEARS; AND

(2)  MUST BE SUCH THAT NO PERCENTAGE AFTER THE
LATER OF THE 2 POLICY ANNIVERSARIES SPECIFIED IN SUBDIVISION
(1) MAY APPLY TO FEWER THAN 5 CONSECUTIVE POLICY YEARS.

NO BASIC CASH VALUE MAY BE LESS THAN THE VALUE WHICH
WOULD BE OBTAINED IF THE ADJUSTED PREMIUMS FOR THE POLICY,
AS DEFINED IN SUBSECTIONS (F) THROUGH (I) OR (K-l),
WHICHEVER IS APPLICABLE, WERE SUBSTITUTED FOR THE
NONFORFEITURE FACTORS IN THE CALCULATION OF THE BASIC CASH
VALUE.

ALL ADJUSTED PREMIUMS AND PRESENT VALUES REFERRED TO IN
THIS SUBSECTION SHALL FOR EACH POLICY BE CALCULATED ON THE
SAME MORTALITY AND INTEREST BASES AS ARE USED IN
DEMONSTRATING THE POLICY'S COMPLIANCE WITH THE OTHER
SUBSECTIONS OF THIS SECTION. THE CASH SURRENDER VALUES
REFERRED TO IN THIS SUBSECTION SHALL INCLUDE ANY ENDOWMENT
BENEFITS PROVIDED FOR BY THE POLICY.