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PARRIS N. GLENDENING, Governor
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Ch. 660
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(19) (18) "REVERSE REPURCHASE TRANSACTION" MEANS A
TRANSACTION IN WHICH AN INSURER SELLS SECURITIES TO A BUSINESS ENTITY
AND IS OBLIGATED TO REPURCHASE THE SOLD SECURITIES OR EQUIVALENT
SECURITIES FROM THE BUSINESS ENTITY AT A SPECIFIED PRICE, EITHER WITHIN A
SPECIFIED PERIOD OF TIME OR ON DEMAND.
(20) (19) "SECURITIES LENDING TRANSACTION" MEANS A TRANSACTION
IN WHICH SECURITIES ARE LOANED BY AN INSURER TO A BUSINESS ENTITY THAT IS
OBLIGATED TO RETURN THE LOANED SECURITIES OR EQUIVALENT SECURITIES TO
THE INSURER, EITHER WITHIN A SPECIFIED PERIOD OF TIME OR ON DEMAND.
(21) (20) "SHELL BUSINESS ENTITY' MEANS A BUSINESS ENTITY HAVING
NO ECONOMIC SUBSTANCE, EXCEPT AS A VEHICLE FOR OWNING INTERESTS IN
ASSETS ISSUED, OWNED, OR PREVIOUSLY OWNED BY A PERSON DOMICILED IN A
FOREIGN JURISDICTION.
[(a)] (A-1) Each life insurer shall have and continually maintain an amount
equal to its entire reserves, as required by this article, in any combination of the types
of assets authorized by subsections [(c) through (1)] (C) THROUGH (P) of this section
subject to the limit, if any, set for each type or class of investment.
(b) (1) For purposes of this section, the entire reserves of a life insurer is the
sum of the amounts listed in paragraph (2) of this subsection less the amount of net
uncollected and deferred premiums.
(2) The sum to be used in paragraph (1) of this subsection consists of:
(i) the net present value of all outstanding policies in force, less
reinsurance;
(ii) reserves for accidental death benefits and total and permanent
disability benefits, less reinsurance;
(iii) the present value of supplementary contracts, including
dividends left with the life insurer to accumulate at interest;
(iv) liabilities on canceled policies that are not included in net
reserve and on which a surrender value may be demanded, and outstanding policy
claims and losses; and
(v) any additional reserves that the Commissioner reasonably
requires for the life insurance.
(c) The reserve investments of a life insurer may include:
(1) cash or deposits in checking or savings accounts, under certificates of
deposit, or in any other form in a national or State bank or trust company; or
(2) shares or deposits in a savings and loan association or building and
loan association to the extent that the investment or account is insured by the Federal
Deposit Insurance Corporation.
(d) (1) The reserve investments of a life insurer may include:
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- 3373 -
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