Ch. 11                                      1996 LAWS OF MARYLAND

(I)      THE STANDARDS FOR APPROVAL OF FORMS OF FUNDING
AGREEMENTS;

(II)    THE RESERVES TO BE MAINTAINED BY INSURERS THAT ISSUE
FUNDING AGREEMENTS;

(III)   THE ACCOUNTING AND REPORTING OF FUNDS CREDITED
UNDER FUNDING AGREEMENTS;

(IV)   THE DISCLOSURE OF INFORMATION TO HOLDERS AND
PROSPECTIVE HOLDERS OF FUNDING AGREEMENTS; AND

(V)     THE QUALIFICATION AND COMPENSATION OF PERSONS THAT
SELL FUNDING AGREEMENTS ON BEHALF OF INSURERS.

(2)      WITH RESPECT TO SEPARATE ACCOUNTS AND ANY RESULTING
ACCUMULATIONS, THE COMMISSIONER SHALL ADOPT REGULATIONS GOVERNING
THE TYPE AND AMOUNT OF INVESTMENTS THAT MAY BE MADE UNDER A FUNDING
AGREEMENT.

(3)     NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE
COMMISSIONER HAS SOLE AUTHORITY TO REGULATE:

(I)      THE ISSUANCE AND SALE OF FUNDING AGREEMENTS; AND

(II)     THE PERSONS THAT SELL FUNDING AGREEMENTS ON BEHALF
OF INSURERS.

(F) FUNDING AGREEMENT NOT BUSINESS OF INSURANCE.

(1)     THE ISSUANCE OR DELIVERY OF A FUNDING AGREEMENT IS NOT
THE BUSINESS OF LIFE INSURANCE, ANNUITIES, HEALTH INSURANCE, PROPERTY
INSURANCE, CASUALTY INSURANCE, SURETY INSURANCE, MARINE INSURANCE,
WET MARINE AND TRANSPORTATION INSURANCE, TITLE INSURANCE, OR
REINSURANCE, BUT IS AN INSURANCE BUSINESS.

(2)      SOLELY FOR THE PURPOSE OF APPLICATION OF THE TAX -
GENERAL ARTICLE, THE FUNDING AGREEMENTS AUTHORIZED BY THIS SECTION
ARE DEEMED TO BE ANNUITY CONTRACTS.

REVISOR'S NOTE: This section is new language derived without substantive
change from former Art. 48A, § 416B(a)(1) and (2) and (b) through (f).

Former Art. 48A, § 416B(a)(3), which defined "funding agreement" as any
agreement described by this section, is deleted as surplusage.

In subsection (f)(1) of this section, the specific references to types of
insurance are substituted for the former reference to a business "authorized
under [former] §§ 62 through 74 of this article" to clarify that former §§ 62
through 74 defined specific types of insurance.

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

- 380 -