WILLIAM DONALD SCHAEFER, Governor                       Ch. 2

(2)   [dividends] DIVIDENDS:

(I)  paid or credited to policyholders[,]; or

(II)  applied to purchase additional insurance
or to shorten the premium paying period;

(3)  returns or refunds made or credited to
policyholders because of retrospective ratings or safe driver
rewards; and

(4)  premiums received by an insurance company under
policies providing health maintenance organization benefits [to]:

(I)  TO the extent of the amounts actually paid
by the insurance company to a nonprofit health maintenance
organization authorized under Title 19, Subtitle 7 of the Health

General Article operating solely as a health maintenance
organization which is exempt from taxes under § 19-727(b) of the
Health - General Article[,]; or

(II)  to the extent the premiums have been paid
by a health maintenance organization exempt under § 19-727(b) of
the Health - General Article.

(c)  (1) Gross direct premiums, or portions thereof, derived
from or reasonably attributable to insurance business in this
State shall be allocated to this State. [The]

(2) THE Insurance Commissioner [is hereby authorized
to prescribe or permit] MAY REQUIRE OR ALLOW, by regulations,
such method or methods of allocating the gross direct premiums
written by insurance companies as may justly and fairly determine
the portion thereof derived from or reasonably attributable to
their insurance business in this State.

(d)  (1) Funds accepted by a life insurer under a group
contract which provides for an accumulation of funds to purchase
annuities at future dates may be considered as "gross premiums
written" either upon receipt or upon the actual application of
such funds to the purchase of annuities. However, any interest
credited to funds accumulated while under the latter alternative
shall also be included in "gross premiums written," and any funds
taxed upon receipt, including any interest later credited
thereto, shall not be subject to taxation upon the purchase of
annuities. [Each]

(2) EACH life insurer shall signify on its premium
tax return covering premiums for the calendar year 1964 its
election between such two alternatives. Thereafter an insurer
shall not change such election without the consent of the
Commissioner. [Any]

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