Ch. 57

1997 LAWS OF MARYLAND

term insurance under a limited payment life preliminary term policy providing for the
payment of all premiums thereon in less than twenty years from the date of the policy, or
under an endowment preliminary term policy, exceeds that charged for like insurance
under twenty-payment life preliminary term policies of the same insurer, the reserve
thereon at the end of any year, including the first, shall not be less than the reserve of a
twenty-payment life preliminary term policy issued in the same year and at the same age,
together with an amount which shall be equivalent to the accumulation of a net level
premium sufficient to provide for a pure endowment at the end of the premium payment
period equal to the difference between the value at the end of such period of such a
twenty-payment life preliminary term policy and the full net level premium reserve at
such time of such a limited payment life or endowment policy. The premium payment
period is the period during which premiums are concurrently payable. The value of all
policies which contain any promise or agreement for the purchase of the policy at any
date prior to its maturity or its termination by death for a sum in excess of the value of the
policy at such date determined according to the standard of valuation herein prescribed
for such policy, shall be calculated in such manner and upon such assumption as to the
rate of interest and mortality, that the value of the policy so calculated shall at no time be
less than the amount stipulated therein, to be paid upon surrender of the policy at the
date then attained, and for the purpose of such valuation the standard adopted by the
insurer for the value of such obligation may, if adequate, be employed.

The legal minimum standard for valuation of industrial policies issued subsequent
to the thirty-first day of December, in the year nineteen hundred and eighteen, shall be
the American Experience Table of Mortality, with three and one-half percent interest per
annum, according to the net level premium method or in accordance with their terms by
the modified preliminary term method hereinabove described, provided, that any insurer
may value its industrial policies on the basis of the Standard Industrial or the
Substandard Industrial Mortality Table, or such other table or tables of mortality as may
be approved by the Commissioner, according to the net level premium method, or in
accordance with their terms by the modified preliminary term method hereinabove
described.

The Commissioner may, in his discretion, upon the request of any life insurer so
reporting to him, cause the net value of all or any number of policies in force in such
insurer to be calculated upon a higher basis of reserve than that prescribed above by the
assumption of a lower rate of interest than that prescribed, or the assumption of a higher
rate of mortality by the substitution of the Actuaries Table of Mortality for the American
Experience Table of Mortality or otherwise as the circumstances of the case may require;
provided, that in no case shall the net value so ascertained and taken as a basis of reserve
be less than that determined by the standard of valuation above prescribed; and in every
certificate of the valuation of policies issued by the Commissioner the basis upon which
the valuation is calculated shall be stated, if so requested by the insurer.

REVISOR'S NOTE: This section formerly was Art. 48A, § 83(2).

Depending on the insurer's election and possible extension by the
Commissioner, the operative date of the Maryland Standard Nonforfeiture
Law for Life Insurance is a date after June 1, 1947, but not later than
December 31, 1949. The reserves required for policies and contracts issued

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