Ch. 36

1995 LAWS OF MARYLAND

Defined terms: "Annuity" § 1-101
"Commissioner" § 1-101
"Insurer" § 1-101
"Life insurance" § 1-101
"Premium" § 1-101.

GENERAL REVISOR'S NOTE TO SUBTITLE:

Former Art. 48A, § 83(2), which set forth the minimum standard for the valuation
of policies and contracts issued before the operative date of the Maryland Standard
Nonforfeiture Law, is transferred to the Session Laws of Maryland.

Depending on the insurer's election and possible extension by the Commissioner,
the operative date of the Maryland Standard Nonforfeiture Law is a date after June 1,
1947, but not later than December 31, 1949. The reserves required for policies and
contracts issued before that date have long been set and neither the minimum reserves
required nor the reserves established by insurers for these policies and contracts are
subject to further change (with the exception of possible reduction, under certain
circumstances, of reserves with the Commissioner's approval under § 5-301(d) of this
subtitle). The Insurance Article Review Committee decided that in view of its limited and
diminishing applicability, the former provision, should not be revised in this article.
However, as policies and contracts issued before the operative date of the Maryland
Standard Nonforfeiture Law remain in effect, the former provision clearly is not obsolete
at this time.

Accordingly, the former provision is preserved intact and transferred to the Session
Laws. See Ch. XX, Acts of 1995. The Insurance Article Review Committee calls this
transfer to the attention of the General Assembly.

SUBTITLE 4. VALUATION OF INVESTMENTS.
5-401. VALUATION OF INVESTMENTS.
(A) VALUATION IN GENERAL.

(1)     EXCEPT FOR SECURITIES SUBJECT TO AMORTIZATION AND EXCEPT
AS OTHERWISE PROVIDED IN THIS TITLE, AN INSURER'S INVESTMENTS SHALL BE
VALUED, AT THE DISCRETION OF THE COMMISSIONER, AT:

(I)      THEIR APPRAISED VALUE;

(II)    THEIR FAIR MARKET VALUE; OR

(III)   PRICES THAT THE COMMISSIONER DETERMINES REPRESENT
THEIR FAIR MARKET VALUE.

(2)      IF THE COMMISSIONER FINDS THAT A SPECIAL INVESTMENT
RESERVE WOULD BE PRUDENT IN VIEW OF THE CHARACTER OF INVESTMENTS, THE
COMMISSIONER MAY REQUIRE THE INSURER TO:

(I) ESTABLISH AND MAINTAIN A SPECIAL INVESTMENT RESERVE
OF A REASONABLE AMOUNT FOR LOSSES OR FLUCTUATIONS IN VALUE; AND

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