PARRIS N. GLENDENING, Governor

Ch. 11

OUT OF OR BASED ON AN OBLIGATION CREATED AFTER JUNE 1, 1945, WHETHER OR
NOT THE RIGHT TO CHANGE THE NAMED BENEFICIARY IS RESERVED OR ALLOWED
TO THE INDIVIDUAL.

(B)     PROCEEDS DESCRIBED.

FOR PURPOSES OF THIS SECTION, PROCEEDS INCLUDE DEATH BENEFITS, CASH
SURRENDER AND LOAN VALUES, PREMIUMS WAIVED, AND DIVIDENDS, WHETHER
USED TO REDUCE THE PREMIUMS OR USED OR APPLIED IN ANY OTHER MANNER,
EXCEPT IF THE DEBTOR HAS, AFTER ISSUANCE OF THE POLICY, ELECTED TO
RECEIVE THE DIVIDENDS IN CASH.

(C)     EFFECT OF SECTION.

THIS SECTION DOES NOT PROHIBIT A CREDITOR FROM COLLECTING A DEBT
OUT OF THE PROCEEDS OF A LIFE INSURANCE POLICY PLEDGED BY THE INSURED
AS SECURITY FOR THE DEBT.

(D)    EFFECT OF CHANGE OR TRANSFER.

A CHANGE OF BENEFICIARY, ASSIGNMENT, OR OTHER TRANSFER IS VALID
EXCEPT FOR TRANSFER WITH ACTUAL INTENT TO HINDER, DELAY, OR DEFRAUD
CREDITORS.

REVISOR'S NOTE: This section is new language derived without substantive
change from former Art. 48A, § 385.

In subsection (a) of this section, the term "individual" is substituted for the
former term "person" since a life insurance policy or annuity contract would
be only on the life of an individual.

Also in subsection (a) of this section, the former language "heretofore or
hereafter" is deleted as unnecessary since, absent a limitation, it is not
necessary to describe when the life insurance policy or annuity contract could
be made or assigned.

Defined terms: "Annuity contract" § 1-101
"Life insurance" § 1-101
"Policy" § 1-101
"Premium" § 1-101

16-112. PROHIBITED AGREEMENTS OR PLANS.

A LIFE INSURER MAY NOT DELIVER IN THE STATE, AS PART OF OR IN
COMBINATION WITH AN INSURANCE, ENDOWMENT, OR ANNUITY CONTRACT, AND
ADDITIONAL TO THE RIGHTS, DIVIDENDS, AND BENEFITS ARISING OUT OF THE
CONTRACT, AN AGREEMENT OR PLAN THAT:

(1) PROVIDES FOR THE ACCUMULATION OF PROFITS OVER A PERIOD
OF YEARS AND FOR PAYMENT OF ALL OR PART OF THE ACCUMULATED PROFITS
ONLY TO MEMBERS OR POLICYHOLDERS OF A DESIGNATED GROUP OR CLASS WHO
CONTINUE AS MEMBERS OR POLICYHOLDERS UNTIL THE END OF A SPECIFIED
PERIOD OF YEARS;

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