Ch. 11

1996 LAWS OF MARYLAND -

"provision" for conformity with § 16-201(a) of this title.

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

16-402. GRACE PERIOD.

(A) IN GENERAL.

EACH ANNUITY CONTRACT AND EACH PURE ENDOWMENT CONTRACT SHALL
CONTAIN A PROVISION THAT A GRACE PERIOD. OF NOT LESS THAN 30 DAYS SHALL
BE ALLOWED WITHIN WHICH ANY STIPULATED PAYMENT TO THE INSURER DUE
AFTER. THE FIRST MAY BE MADE.                                                                 

(B) EFFECT.                   

THE ANNUITY CONTRACT OR PURE ENDOWMENT CONTRACT CONTINUES IN
FULL FORCE DURING THE GRACE PERIOD.

(C) INTEREST.

THE INSURER MAY CHARGE INTEREST ON A PAYMENT MADE DURING THE
GRACE PERIOD AT A RATE SPECIFIED IN THE ANNUITY CONTRACT OR PURE
ENDOWMENT CONTRACT, NOT EXCEEDING 6% PER YEAR, FOR THE NUMBER OF
DAYS THAT ELAPSE IN THE GRACE PERIOD BEFORE THE PAYMENT.

.(D)' DEDUCTION FOR OVERDUE PAYMENTS.

IF A CLAIM ARISES UNDER THE ANNUITY CONTRACT OR PURE ENDOWMENT
CONTRACT DUE TO DEATH DURING THE GRACE PERIOD BEFORE THE OVERDUE
PAYMENT TO THE INSURER OR ANY DEFERRED PAYMENTS OF THE CURRENT
CONTRACT YEAR ARE MADE, THE AMOUNT OF THE PAYMENTS, WITH INTEREST ON
ANY OVERDUE PAYMENTS, MAY BE DEDUCTED FROM ANY AMOUNT PAYABLE
UNDER THE ANNUITY CONTRACT OR PURE ENDOWMENT CONTRACT IN
SETTLEMENT.

REVISOR'S NOTE: This section is new language derived without substantive
change from former Art. 48A, § 403.

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

16-403. INCONTESTABILITY.

(A) IN GENERAL.

SUBJECT TO § 16-405 OF THIS SUBTITLE, IF A STATEMENT, OTHER THAN A
STATEMENT ABOUT AGE, SEX, OR IDENTITY, IS REQUIRED AS A CONDITION TO
ISSUING AN ANNUITY CONTRACT OR PURE ENDOWMENT CONTRACT, EACH
ANNUITY CONTRACT AND EACH PURE ENDOWMENT CONTRACT SHALL CONTAIN A
PROVISION THAT THE CONTRACT IS INCONTESTABLE, EXCEPT FOR NONPAYMENT

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