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ROBERT L. EHRLICH, JR., Governor
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Ch. 498
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(c) (1) Each annuity contract shall contain a provision that if the annuity
contract provides for a lump-sum settlement at maturity or at any other time, on
surrender of the annuity contract on or before the start of annuity payments, the
insurer will pay a cash surrender benefit in accordance with §§ 16-505, 16-506,
16-508, and 16-509 of this subtitle instead of a paid-up annuity benefit.
(2) (I) The annuity contract shall MAY state that the insurer shall
reserve the right to defer the payment of the cash surrender value for up to 6 months
after demand for payment with surrender of the annuity contract.
(I) 1. BEFORE MAKING A DEFERMENT UNDER SUBPARAGRAPH
(I) OF THIS PARAGRAPH, THE INSURER SHALL MAKE A WRITTEN REQUEST TO THE
COMMISSIONER TO DEFER THE PAYMENT OF THE CASH SURRENDER VALUE FOR UP
TO 6 MONTHS AFTER A DEMAND FOR PAYMENT WITH SURRENDER OF THE ANNUITY
CONTRACT MAKE THE DEFERMENT UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH.
2. THE REQUEST UNDER SUBSUBPARAGRAPH 1 OF THIS
SUBPARAGRAPH, SHALL CONTAIN A STATEMENT AS TO ADDRESS THE NECESSITY OF
THE DEFERRAL AND THE EFFECT THE DEFERRAL WILL HAVE ON THE EQUITABILITY
TO ALL POLICYHOLDERS OF THE DEFERRAL.
(II) AFTER RECEIVING WRITTEN APPROVAL FROM THE
COMMISSIONER ON THE REQUEST MADE UNDER SUBPARAGRAPH (II)2 OF THIS
PARAGRAPH, THE INSURER MAY RESERVE THE RIGHT TO DEFER THE PAYMENT OF
THE CASH SURRENDER VALUE FOR UP TO 6 MONTHS AFTER DEMAND FOR PAYMENT
WITH SURRENDER OF THE ANNUITY CONTRACT.
(g) (1) Notwithstanding the requirements of this section, a deferred annuity
contract may contain a provision that the insurer may terminate the contract by
making a single payment calculated under paragraph (2) of this subsection if:
(i) no considerations have been received under the contract for 2
years; and
(ii) the part of the paid-up annuity benefit at maturity under the
contract that is available from the considerations paid before termination would be
less than $20 per month.
(2) The payment shall equal the present value of the part of the paid-up
annuity benefit available under the contract, calculated as of the date of termination,
based on any mortality table and interest rate specified in the contract for
determining the paid-up annuity benefit.
(3) A PAYMENT BY AN INSURER UNDER THIS SECTION SHALL RELIEVE
THE INSURER OF ANY FURTHER OBLIGATION UNDER THE DEFERRED ANNUITY
CONTRACT.
16-504.
[(b) (1) The minimum nonforfeiture amount under an annuity contract that
provides for flexible considerations at any time before or at the start of annuity
payments shall equal the remainder of:
- 2905 -
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