PARRIS N. GLENDENING, Governor                                   Ch. 11

substituted for the former reference to the "time of cash surrender" for
brevity.

In subsection (d)(1) of this section, the reference to the "time of surrender" is
substituted for the former reference "at that time" for clarity.

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

16-507. CONTRACTS WITHOUT CASH SURRENDER BENEFITS.

(A)     SCOPE OF SECTION.

THIS SECTION APPLIES ONLY TO ANNUITY CONTRACTS THAT DO NOT PROVIDE
CASH SURRENDER BENEFITS.

(B)      PAID-UP ANNUITY BENEFIT AVAILABLE BEFORE MATURITY.

THE PRESENT VALUE OF A PAID-UP ANNUITY BENEFIT AVAILABLE AS A
NONFORFEITURE OPTION BEFORE MATURITY MAY NOT BE LESS THAN THE SUM OF:

(1)      THE PRESENT VALUE OF THAT PART OF THE MATURITY VALUE OF
THE PAID-UP ANNUITY BENEFIT UNDER THE ANNUITY CONTRACT FROM
CONSIDERATIONS PAID BEFORE THE CONTRACT IS SURRENDERED FOR OR
CHANGED TO A DEFERRED PAID-UP ANNUITY; AND

(2)      ANY EXISTING ADDITIONAL AMOUNT CREDITED BY THE INSURER
TO THE CONTRACT.

(C)     CALCULATION OF PRESENT VALUE.

(1)      THE PRESENT VALUE UNDER SUBSECTION (B)(1) OF THIS SECTION
SHALL BE CALCULATED FOR THE PERIOD BEFORE THE MATURITY DATE USING AN
INTEREST RATE SPECIFIED IN THE ANNUITY FOR ACCUMULATING THE NET
CONSIDERATIONS TO DETERMINE THE MATURITY VALUE.

(2)      IF THE CONTRACT DOES NOT PROVIDE A DEATH BENEFIT BEFORE
THE START OF ANNUITY PAYMENTS, THE PRESENT VALUE SHALL BE CALCULATED
USING THE INTEREST RATE AND MORTALITY TABLE SPECIFIED IN THE CONTRACT
FOR DETERMINING THE MATURITY VALUE OF THE PAID-UP ANNUITY BENEFIT.

(D)     MINIMUM NONFORFEITURE AMOUNT.

THE PRESENT VALUE OF A PAID-UP ANNUITY BENEFIT MAY NOT BE LESS THAN
THE MINIMUM NONFORFEITURE AMOUNT AT THE TIME OF SURRENDER.

REVISOR'S NOTE: This section is new language derived without substantive
change from former Art. 48A, § 408B(g).

In subsection (b)(2) of this section, the defined term "insurer" is substituted
for the former term "company" for consistency.

In subsection (d) of this section, the reference to the "time of surrender" is

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