Ch. 11

LAWS OF MARYLAND

years next preceding the date of acquisition by such insurer, the
net earnings of the issuing, assuming or guaranteeing institution
available for its fixed charges, as hereinafter defined, shall
have been not less than one and one-quarter times the total of
its fixed charges for such year, or obligations which, at the
date of acquisition by such insurer, are adequately secured and
have investment qualities and characteristics wherein the
speculative elements are not predominant. In determining the
adequacy of collateral security, not more than one third of the
total value of such required collateral shall consist of stock
other than stock meeting the requirements of subdivision (3) OF
THIS SECTION.

DRAFTER'S NOTE: This corrects stylistic errors in internal
references in Article 48A, § 104(2)(i).

The stylistic errors occurred in Ch. 553 of the Acts
of 1963.

The stylistic errors were noted by the Michie Company
and by the professional staff of the Legislative
Division of the Department of Legislative Reference.

(3) Preferred or guaranteed stocks or shares of any
solvent institution, created or existing under the laws of the
United States or of any state, district or territory thereof, if
all of the prior obligations, and prior preferred stocks, if any,
of such institution at the date of acquisition by such insurer
are eligible as investments under this article; and if qualified
under paragraph (i) or paragraph (ii) [following] OF THIS
SUBSECTION:

(i) Preferred stocks or shares shall be deemed
qualified if both of the following requirements are met:

(A)  The net earnings of such institution
available for its fixed charges for a period of five fiscal years
next preceding the date of acquisition by such insurer shall have
averaged per year not less than one and one-half times the sum of
its average annual fixed charges, if any, its average annual
maximum contingent interest, if any, and its average annual
preferred dividend requirements applicable to such period; and

(B)  During either of the last two years
of such period such net earnings shall have been not less than
one and one-half times the sum of its fixed charges, contingent
interest and preferred dividend requirements for such year. The
term "preferred dividends requirements" shall be deemed to mean
cumulative or noncumulative dividends whether paid or not.

(ii) Guaranteed stocks or shares shall be
deemed qualified if the assuming or guaranteeing institution
meets the requirements of [paragraph (ii) of subsection (2)]

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