PARRIS N. GLENDENING, Governor

Ch. 36

2. THE NET LEVEL ANNUAL PREMIUM DETERMINED UNDER
THIS SUBPARAGRAPH MAY NOT EXCEED THE NET LEVEL ANNUAL PREMIUM ON THE
19-YEAR PREMIUM WHOLE LIFE PLAN FOR INSURANCE OF THE SAME AMOUNT AT
AN AGE 1 YEAR HIGHER THAN THE AGE AT ISSUE OF THE POLICY FOR WHICH THE
RESERVE IS CALCULATED UNDER THIS SUBSECTION.

(4) (I) 1. IN THIS PARAGRAPH THE FOLLOWING WORDS HAVE THE
MEANINGS INDICATED.

2.        "ASSUMED ENDING DATE" MEANS THE FIRST POLICY
ANNIVERSARY OF A POLICY ON WHICH THE SUM OF ANY ENDOWMENT BENEFIT
UNDER THE POLICY AND ANY CASH SURRENDER VALUE AVAILABLE ON THAT
POLICY ANNIVERSARY IS GREATER THAN THE EXCESS FIRST YEAR PREMIUM.

3.        "EXCESS FIRST YEAR PREMIUM" MEANS THE AMOUNT BY
WHICH THE CONTRACT PREMIUM IN THE FIRST POLICY YEAR OF A POLICY EXCEEDS
THE PREMIUM IN THE SECOND POLICY YEAR.

(II)     THIS PARAGRAPH APPLIES TO A LIFE INSURANCE POLICY
ISSUED ON OR AFTER JANUARY 1, 1986:

1.        FOR WHICH THE CONTRACT PREMIUM IN THE FIRST
POLICY YEAR EXCEEDS THE PREMIUM IN THE SECOND YEAR;

2.        THAT DOES NOT PROVIDE A COMPARABLE ADDITIONAL
BENEFIT IN THE FIRST YEAR FOR THE EXCESS FIRST YEAR PREMIUM; AND

3.        THAT PROVIDES AN ENDOWMENT BENEFIT OR A CASH
SURRENDER VALUE OR A COMBINATION IN AN AMOUNT GREATER THAN THE
EXCESS FIRST YEAR PREMIUM.

(III)    FOR A POLICY DESCRIBED IN SUBPARAGRAPH (II) OF THIS
PARAGRAPH, EXCEPT AS PROVIDED IN § 5-311 OF THIS SUBTITLE, THE RESERVE
ACCORDING TO THE COMMISSIONERS RESERVE VALUATION METHOD AS OF ANY
POLICY ANNIVERSARY ON OR BEFORE THE ASSUMED ENDING DATE OF THE POLICY
SHALL BE THE GREATER OF:

1.        THE RESERVE CALCULATED UNDER PARAGRAPH (2) OF
THIS SUBSECTION; OR

2.        THE RESERVE CALCULATED UNDER PARAGRAPH (2) OF
THIS SUBSECTION MODIFIED AS FOLLOWS:

A.       THE NET LEVEL ANNUAL PREMIUM DETERMINED UNDER
PARAGRAPH (3)(II) OF THIS SUBSECTION SHALL BE REDUCED BY 15% OF THE EXCESS
FIRST YEAR PREMIUM;

B.       ALL PRESENT VALUES OF BENEFITS AND PREMIUMS
SHALL BE DETERMINED WITHOUT REFERENCE TO PREMIUMS OR BENEFITS
PROVIDED UNDER THE POLICY AFTER THE ASSUMED ENDING DATE;

C.       THE POLICY SHALL BE ASSUMED TO MATURE ON THE
ASSUMED ENDING DATE AS AN ENDOWMENT; AND

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