Ch. 11                                          1996 LAWS OF MARYLAND

THIS SECTION DOES NOT APPLY TO A POLICY OF LIFE INSURANCE ISSUED ON
OR AFTER THE OPERATIVE DATE OF § 16-309 OF THIS SUBTITLE.

(B)     CALCULATION IN GENERAL.

(1)      FOR PURPOSES OF THIS SECTION, THE DATE OF ISSUE OF A POLICY
IS THE DATE AS OF WHICH THE RATED AGE OF THE INSURED IS DETERMINED.

(2)      SUBJECT TO SUBSECTION (D) OF THIS SECTION, THE ADJUSTED
PREMIUMS FOR A POLICY SHALL BE CALCULATED ON AN ANNUAL BASIS AND SHALL
BE A UNIFORM PERCENTAGE OF THE PREMIUMS SPECIFIED IN THE POLICY FOR
EACH POLICY YEAR, EXCLUDING EXTRA PREMIUMS ON A SUBSTANDARD POLICY,
SO THAT THE PRESENT VALUE OF THE ADJUSTED PREMIUMS, CALCULATED AS OF
THE DATE OF ISSUE, SHALL EQUAL THE SUM OF:

(I)      THE PRESENT VALUE OF THE FUTURE GUARANTEED
BENEFITS, CALCULATED AS OF THE DATE OF ISSUE, PROVIDED BY THE POLICY;

(II)     2% OF THE AMOUNT OF INSURANCE IF THE INSURANCE IS A
UNIFORM AMOUNT OR OF THE EQUIVALENT UNIFORM AMOUNT OF INSURANCE,
CALCULATED UNDER SUBSECTION (C) OF THIS SECTION, IF THE AMOUNT OF
INSURANCE VARIES WITH THE DURATION OF THE POLICY;

(III)    SUBJECT TO PARAGRAPH (3) OF THIS SUBSECTION, 40% OF THE
ADJUSTED PREMIUM FOR THE FIRST POLICY YEAR; AND

(IV)    SUBJECT TO PARAGRAPH (3) OF THIS SUBSECTION, 25% OF THE
LESSER OF:

1.        THE ADJUSTED PREMIUM FOR THE FIRST POLICY YEAR;
OR

2.        THE ADJUSTED PREMIUM FOR A WHOLE LIFE POLICY OF
THE SAME UNIFORM AMOUNT OR EQUIVALENT UNIFORM AMOUNT WITH UNIFORM
PREMIUMS FOR THE DURATION OF THE INSURED'S LIFE, ISSUED AT THE SAME AGE
AND FOR THE SAME AMOUNT OF INSURANCE.

(3)      IN APPLYING THE PERCENTAGES SPECIFIED IN PARAGRAPH (2)(III)
AND (IV) OF THIS SUBSECTION, ADJUSTED PREMIUMS MAY NOT BE CONSIDERED TO
EXCEED 4% OF THE AMOUNT OF INSURANCE OR OF THE EQUIVALENT UNIFORM
AMOUNT OF INSURANCE.

(C)     POLICIES WITH VARIABLE INSURANCE AMOUNT.

(1) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION, IF A POLICY HAS
A VARIABLE AMOUNT OF INSURANCE OVER ITS DURATION, FOR PURPOSES OF
SUBSECTION (B) OF THIS SECTION THE EQUIVALENT UNIFORM AMOUNT OF
INSURANCE SHALL BE BASED ON THE UNIFORM AMOUNT OF INSURANCE PROVIDED
BY AN OTHERWISE SIMILAR POLICY THAT:

(I)       CONTAINS THE SAME ENDOWMENT BENEFITS;

(II)     IS ISSUED AT THE SAME AGE AND FOR THE SAME TERM;

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