Ch. 11                                          1996 LAWS OF MARYLAND

(2)      SUBJECT TO PARAGRAPH (3) OF THIS SUBSECTION, THE NET
CONSIDERATIONS FOR A GIVEN CONTRACT YEAR USED TO CALCULATE THE
MINIMUM NONFORFEITURE AMOUNT SHALL EQUAL THE REMAINDER OF:

(I)       THE CORRESPONDING GROSS CONSIDERATIONS CREDITED TO
THE CONTRACT DURING THAT CONTRACT YEAR; LESS

(II)     THE SUM OF:

1.        AN ANNUAL CONTRACT CHARGE OF $30; AND

2.        A COLLECTION CHARGE OF $1.25 PER CONSIDERATION
CREDITED TO THE CONTRACT DURING THAT CONTRACT YEAR.

(3)      THE NET CONSIDERATIONS FOR A GIVEN CONTRACT YEAR MAY
NOT BE LESS THAN ZERO.

(4)      THE PERCENTAGES OF NET CONSIDERATIONS ARE:

(I)       FOR THE FIRST CONTRACT YEAR, 65%; AND

(II)     SUBJECT TO PARAGRAPH (5) OF THIS SUBSECTION, FOR THE
SECOND AND SUBSEQUENT CONTRACT YEARS, 87.5%.

(5)      THE PERCENTAGE OF NET CONSIDERATIONS IS 65% OF THE PART OF
THE TOTAL NET CONSIDERATIONS FOR ANY RENEWAL CONTRACT YEAR THAT
EXCEEDS BY NOT MORE THAN 2 TIMES THE SUM OF THOSE PARTS OF THE NET
CONSIDERATIONS IN ALL PRIOR CONTRACT YEARS FOR WHICH THE PERCENTAGE
WAS 65%.

(C) CONTRACTS WITH FIXED CONSIDERATIONS.

(1)      THE MINIMUM NONFORFEITURE AMOUNT UNDER AN ANNUITY
CONTRACT THAT PROVIDES FOR FIXED SCHEDULED CONSIDERATIONS:

(I)       SHALL BE CALCULATED ON THE ASSUMPTION THAT
CONSIDERATIONS ARE PAID ANNUALLY IN ADVANCE; AND

(II)     EXCEPT AS PROVIDED IN PARAGRAPHS (2) AND (3) OF THIS
SUBSECTION, SHALL BE CALCULATED THE SAME AS FOR ANNUITY CONTRACTS
WITH FLEXIBLE CONSIDERATIONS THAT ARE PAID ANNUALLY.

(2)      THE PART OF THE NET CONSIDERATIONS FOR THE FIRST CONTRACT
YEAR TO BE ACCUMULATED IS THE SUM OF:

(I)       65% OF THE NET CONSIDERATIONS FOR THE FIRST CONTRACT
YEAR; AND

(II)     22.5% OF THE REMAINDER OF:

1. THE NET CONSIDERATIONS FOR THE FIRST CONTRACT
YEAR; LESS

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