PARRIS N. GLENDENING, Governor

Ch. 36

REVISOR'S NOTE: This section is new language derived without substantive
change from former Art. 48A, § 83(3)(a-3).

In subsection (a) of this section, the definitions of "change in fund basis",
"guarantee duration", and "issue year basis" are made applicable to the entire
section, reflecting the use of those terms outside the specific paragraphs for
which they were defined under former law.

In subsection (a)(2) and (4) of this section, in each instance, the word
"statutory" is added between "calendar year" and "valuation interest rate" for
consistency with the rest of this section.

In subsections (b) and (c) of this section, two concepts of applicability that
were merged together in former Art. 48A, § 83(3)(a-3)(1) are stated
separately for clarity. Subsection (b) of this section sets forth the policies and
contracts to which the section applies. For those policies and contracts to
which this section applies, subsection (c) specifies the applicable calendar year
statutory valuation interest rate. In subsection (c)(1) of this section, for life
insurance policies and individual annuity and pure endowment contracts, the
reference to the applicable interest rates being "the calendar year statutory
valuation interest rate as determined under this section for the calendar year
in which the policy or contract was issued" is substituted for the former
references to the applicable interest rates for "[all policies or contracts issued]
in a particular calendar year" being the calendar year statutory valuation
interest rates, for clarity. For annuities and pure endowments purchased
under group annuity and pure endowment contracts and for net increases in
amounts held under guaranteed interest contracts, similar substitutions are
made for clarity in subsection (c)(2) and (3) of this section.

In the introductory language of subsection (c) of this section, the reference to
the calendar year statutory valuation interest rates applying "[i]nstead of the
interest rates specified in §§ 5-304 and 5-305 of this subtitle" is added for
clarity, reflecting the exceptions under those sections cross-referencing this
section.

In subsection (e)(2) of this section, the phrase "[f]or the purposes of this
subsection" is added to clarify the applicability of the paragraph.

In subsection (e)(8) of this section, the former references to "Plan Type A",
etc. are deleted as unnecessary in light of the fact that the amount of the
increase specified for each plan type is the same.

In subsection (e)(8)(i) of this section, the phrase "12 months" is substituted
for the former phrase "1 year" for consistency.

Defined terms: "Annuity" § 1-101
"Annuity contract" § 1-101
"Commissioner" § 1-101

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