PARRIS N. GLENDENING, Governor                                  Ch. 36

(3)      FOR EXPIRED REDEEMABLE GROUND RENTS, ANY PREMIUMS PAID
MUST BE CHARGED OFF WHEN ACQUIRED.

(4)      A LIFE INSURER SHALL CARRY REDEEMABLE GROUND RENTS
PURCHASED AT A DISCOUNT AT AN AMOUNT NOT GREATER THAN THE COST OF
ACQUISITION.

(I) COLLATERAL LOANS.

(1)      THE RESERVE INVESTMENTS OF A LIFE INSURER MAY INCLUDE
COLLATERAL LOANS SECURED BY PLEDGE OF ANY SECURITY LISTED IN
SUBSECTIONS (C) THROUGH (H) OF THIS SECTION IF THE CURRENT MARKET VALUE
OF THE PLEDGED SECURITY AT ALL TIMES DURING THE TERM OF THE LOAN IS AT
LEAST 10% MORE THAN THE UNPAID BALANCE OF THE LOAN AMOUNT.

(2)      EACH COLLATERAL LOAN IS SUBJECT TO THE POWER OF THE LIFE
INSURER TO TERMINATE IT IF THE PLEDGED SECURITY DEPRECIATES BELOW 10%
OF THE UNPAID BALANCE OF THE LOAN AMOUNT.

(J) COMMERCIAL REAL ESTATE.

(1)      FOR PURPOSES OF THIS SUBSECTION, REAL ESTATE SOLD UNDER A
CONTRACT OF SALE IN WHICH TITLE IS RETAINED IN THE LIFE INSURER SHALL BE
CLASSIFIED AS REAL ESTATE.

(2)      SUBJECT TO PARAGRAPH (3) OF THIS SUBSECTION, THE RESERVE
INVESTMENTS OF A LIFE INSURER MAY INCLUDE:

(I)       REAL ESTATE FOR THE OFFICE AND BUSINESS PURPOSES ONLY
OF THE LIFE INSURER, EXCEPT AS AUTHORIZED BY SUBSECTIONS (G) AND (H) OF
THIS SECTION; OR

(II)     PROPERTY PRIMARILY FOR THE USE OF EMPLOYEES OR
CUSTOMERS OF THE LIFE INSURER FOR PARKING WITH OR WITHOUT CHARGE.

(3)      THE EQUITY VALUE OF ALL REAL ESTATE HELD UNDER
PARAGRAPH (2) OF THIS SUBSECTION MAY NOT EXCEED 20% OF THE LIFE INSURER'S
TOTAL ADMITTED ASSETS.

(4)      A LIFE INSURER MAY PURCHASE AND HOLD REAL ESTATE UNDER A
FORECLOSURE OF ITS OWN MORTGAGES OR A DEED IN LIEU OF MORTGAGE
FORECLOSURE FOR NOT MORE THAN 5 YEARS.

(5)      SUBJECT TO PARAGRAPH (6) OF THIS SUBSECTION, THE
COMMISSIONER MAY GRANT EXTENSIONS FOR PERIODS NOT EXCEEDING 5 YEARS
EACH OF THE PERIOD WITHIN WHICH REAL ESTATE MAY BE HELD UNDER
PARAGRAPH (4) OF THIS SUBSECTION, IF THE COMMISSIONER CONSIDERS THE
EXTENSIONS NECESSARY TO SERVE THE BEST INTEREST OF THE LIFE INSURER AND
ITS POLICYHOLDERS.

- 951 -