Ch. 399

2003 LAWS OF MARYLAND

(ii) may keep its general ledger accounting records outside the
State if it makes those records available in the State to the Commissioner within 2
business days after being requested to do so by the Commissioner.

(d) [Unless approved by the Commissioner, a domestic insurer may not keep
more than 15% of the domestic insurer's admitted assets outside of the State under
this section.

(e)] This section does not prohibit the holding of funds or transmission of
securities outside of the State to:

(1)     secure or record title to the securities; or

(2)     sell, lend, buy, redeem, or exchange the securities or alter the
provisions of the securities.

5-511.

(n) (1) The reserve investments of a life insurer may include securities
lending, repurchase, reverse repurchase, and dollar roll transactions with business
entities, subject to the requirements of paragraphs (2) through (9) of this subsection.

(2)     The insurer's board of directors shall adopt a written plan that
specifies guidelines and objectives to be followed, such as:

(i) a description of how cash received will be invested or used for
general corporate purposes of the insurer;

(ii) operational procedures to manage interest rate risk,
counterparty default risk, the conditions under which proceeds from reverse
repurchase transactions may be used in the ordinary course of business, and the use
of acceptable collateral in a manner that reflects the liquidity needs of the
transaction; and

(iii) the extent to which the insurer may engage in these
transactions.

(3)     (i) The insurer shall enter into a written agreement for all
transactions authorized under this subsection other than dollar roll transactions.

(ii) The written agreement shall require that each transaction
terminate no more than 1 year from its inception or on the earlier demand of the
insurer.

(iii) The agreement shall be with the business entity counterparty,
but for securities lending transactions, the agreement may be with an agent acting on
behalf of the insurer, if the agent is a qualified business entity, and if the agreement:

1.       requires the agent to enter into separate agreements with
each counterparty that are consistent with the requirements of this section; and

2.       prohibits securities lending transactions under the
agreement with the agent or its affiliates.

- 2846 -