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PARRIS N. GLENDENING, Governor
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S.B. 763
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LIABILITY COMPANY, JOINT-STOCK COMPANY, JOINT VENTURE, TRUST, OR ANY
OTHER FORM OF BUSINESS ORGANIZATION, WHETHER FOR PROFIT OR NOT FOR
PROFIT.
(5) (I) "CASH EQUIVALENT" MEANS A HIGHLY LIQUID INVESTMENT OR
SECURITY WITH AN ORIGINAL TERM TO MATURITY OF 90 DAYS OR LESS THAT IS:
1. READILY CONVERTIBLE TO A KNOWN AMOUNT OF CASH
WITHOUT PENALTY;
2. SO NEAR MATURITY THAT IT PRESENTS AN
INSIGNIFICANT RISK OF CHANGE IN VALUE; AND
3. RATED:
A. "P-1" BY MOODY'S INVESTORS SERVICES, INC.;
B. "A-1" BY STANDARD AND POOR'S DIVISION OF THE
MCGRAW HILL COMPANIES. INC.; OR
C. EQUIVALENTLY BY A NATIONALLY RECOGNIZED
STATISTICAL RATING ORGANIZATION RECOGNIZED BY THE SECURITIES VALUATION
OFFICE OF THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS.
(II) "CASH EQUIVALENT" INCLUDES A GOVERNMENT MONEY
MARKET MUTUAL FUND AND A CLASS ONE MONEY MARKET MUTUAL FUND.
(4) (6) (I) "COUNTERPARTY EXPOSURE AMOUNT MEANS:
1. FOR AN OVER-THE-COUNTER DERIVATIVE INSTRUMENT
NOT ENTERED INTO PURSUANT TO A WRITTEN MASTER AGREEMENT THAT PROVIDES
FOR NETTING OF PAYMENTS OWED BY THE RESPECTIVE PARTIES:
A. THE MARKET VALUE OF THE OVER-THE-COUNTER
DERIVATIVE INSTRUMENT IF THE LIQUIDATION OF THE DERIVATIVE INSTRUMENT
WOULD RESULT IN A FINAL CASH PAYMENT TO THE INSURER; OR
B. ZERO IF THE LIQUIDATION OF THE DERIVATIVE
INSTRUMENT WOULD NOT RESULT IN A FINAL CASH PAYMENT TO THE INSURER;
2. FOR OVER-THE-COUNTER DERIVATIVE INSTRUMENTS
ENTERED INTO PURSUANT TO A WRITTEN MASTER AGREEMENT THAT PROVIDES FOR
NETTING OF PAYMENTS OWED BY THE RESPECTIVE PARTIES, AND THE DOMICILIARY
JURISDICTION OF THE COUNTERPARTY IS EITHER WITHIN THE UNITED STATES OR,
IF NOT WITHIN THE UNITED STATES, IS WITHIN A FOREIGN (NOT UNITED STATES)
JURISDICTION LISTED IN THE PURPOSES AND PROCEDURES MANUAL OF THE
SECURITIES VALUATION OFFICE AS ELIGIBLE FOR NETTING, THE GREATER OF ZERO
OR THE NET SUM PAYABLE TO THE INSURER IN CONNECTION WITH ALL DERIVATIVE
INSTRUMENTS SUBJECT TO THE WRITTEN MASTER AGREEMENT UPON THEIR
LIQUIDATION IN THE EVENT OF DEFAULT BY THE COUNTERPARTY PURSUANT TO
THE MASTER AGREEMENT (ASSUMING NO CONDITIONS PRECEDENT TO THE
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- 4127 -
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