H.B. 1022                                                VETOES

(2) The table used under this subsection shall be combined with a mortality
table allowed for calculating the reserves for life insurance certificates.

(!) For noncancellable accident and health benefits, the applicable table for the
minimum standard for the valuation of the certificate is:

(1)     the Class (3) Disability Table (1926) with conference modifications; or

(2)     with the consent of the Commissioner, tables based on the society's own
experience.

(m) The Commissioner may:

(1)     accept other standards for valuation if the Commissioner finds that the
reserves produced by those other standards will not be less in the aggregate than reserves
computed in accordance with the minimum valuation standard prescribed in this section;

(2)     vary the standards of mortality applicable to all certificates of insurance
on substandard lives or other extra-hazardous lives by any society authorized to do
business in the State; and

(3)     require additional reserves as necessary on account of the certificates
whenever the mortality experience under all certificates valued on the same mortality
table exceeds the expected mortality according to the table for a period of 3 consecutive
years.

(n) (1) With the consent of the insurance supervisory official of the state of
domicile of the society, and subject to any conditions the official may impose, a society
may establish and maintain reserves on its certificates that exceed the reserves required
under this section.

(2) The contractual rights of any insured member may not be affected by a
society establishing and maintaining reserves under paragraph (1) of this subsection.

(o) Instead of the provisions set forth in this section, with the approval of the
Commissioner, a society may use the standards for valuation authorized by §§ 5-303
through 5-312 of this article.]

8-445.

(A)    STANDARDS OF VALUATION FOR CERTIFICATES ISSUED BEFORE
JANUARY 1, 1998, SHALL BE THOSE PROVIDED BY THE LAWS APPLICABLE ON
DECEMBER 31, 1997.

(B)     (1) THE MINIMUM STANDARDS OF VALUATION FOR CERTIFICATES
ISSUED ON OR AFTER JANUARY 1, 1998, SHALL BE BASED ON THE FOLLOWING
TABLES:

(I) FOR CERTIFICATES OF LIFE INSURANCE:

1. THE COMMISSIONERS 1941 STANDARD ORDINARY
MORTALITY TABLE;

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