Ch. 36

1995 LAWS OF MARYLAND

5-306. SAME — COMPUTATION OF MINIMUM STANDARD BY CALENDAR YEAR OF
ISSUE.

(A)     DEFINITIONS.

(1)      IN THIS SECTION THE FOLLOWING WORDS HAVE THE MEANINGS
INDICATED.

(2)      "CHANGE IN FUND BASIS" MEANS A VALUATION BASIS UNDER
WHICH THE INTEREST RATE USED TO DETERMINE THE MINIMUM VALUATION
STANDARD APPLICABLE TO EACH CHANGE IN A FUND HELD UNDER AN ANNUITY
OR UNDER A GUARANTEED INTEREST CONTRACT IS THE CALENDAR YEAR
STATUTORY VALUATION INTEREST RATE FOR THE YEAR OF THE CHANGE IN THE
FUND.

(3)      "GUARANTEE DURATION" MEANS:

(I)       FOR LIFE INSURANCE, THE MAXIMUM NUMBER OF YEARS THE
LIFE INSURANCE CAN REMAIN IN FORCE ON A BASIS GUARANTEED IN THE POLICY
OR UNDER OPTIONS TO CONVERT TO PLANS OF LIFE INSURANCE WITH PREMIUM
RATES, NONFORFEITURE VALUES, OR BOTH, THAT ARE GUARANTEED IN THE
ORIGINAL POLICY; AND '

(II)     FOR AN ANNUITY OR FOR A GUARANTEED INTEREST.
CONTRACT:

1.        IF THE ANNUITY OR THE GUARANTEED INTEREST
CONTRACT HAS A CASH SETTLEMENT OPTION, THE NUMBER OF YEARS FOR WHICH
THE CONTRACT GUARANTEES INTEREST RATES IN EXCESS OF THE CALENDAR YEAR
STATUTORY VALUATION INTEREST RATE FOR LIFE INSURANCE POLICIES WITH
GUARANTEE DURATION IN EXCESS OF 20 YEARS; AND

2.        IF THE ANNUITY OR THE GUARANTEED INTEREST
CONTRACT DOES NOT HAVE A CASH SETTLEMENT OPTION, THE NUMBER OF YEARS
FROM THE DATE OF ISSUE OR DATE OF PURCHASE TO THE DATE ANNUITY
BENEFITS ARE SCHEDULED TO COMMENCE.

(4)      "ISSUE YEAR BASIS" MEANS A VALUATION BASIS UNDER WHICH THE
INTEREST RATE USED TO DETERMINE THE MINIMUM VALUATION STANDARD FOR
THE ENTIRE DURATION OF THE ANNUITY OR OF THE GUARANTEED INTEREST
CONTRACT IS THE CALENDAR YEAR STATUTORY VALUATION INTEREST RATE FOR
THE YEAR OF ISSUE OR YEAR OF PURCHASE OF THE ANNUITY OR GUARANTEED
INTEREST CONTRACT.

(B)      SCOPE OF SECTION.
THIS SECTION APPLIES TO:

(1)      ALL LIFE INSURANCE POLICIES ISSUED ON OR AFTER THE
OPERATIVE DATE OF § 15-309 OF THIS ARTICLE;

(2)      ALL INDIVIDUAL ANNUITY CONTRACTS AND PURE ENDOWMENT
CONTRACTS ISSUED ON OR AFTER JANUARY 1, 1983;

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