reglab/statecodes huggingface dataset:
2023 Maryland Statutes › Insurance › Title 4 - General Requirements for Insurers › Subtitle 5 - Corporate Governance Annual Disclosure Act › Section 4-501 - Definitions

(a)    In this subtitle the following words have the meanings indicated.
(b)    “Corporate Governance Annual Disclosure” or “CGAD” means a confidential report submitted by an insurer or the insurance group of which the insurer is a member in accordance with the requirements of this subtitle.
(c)    “Insurance group” means those insurers and affiliates included within an insurance holding company system as defined in § 7–101 of this article.
(d)    (1)    “Insurer” includes:
(i)    each person engaged as indemnitor, surety, or contractor in the business of entering into insurance contracts;
(ii)    a nonprofit health service plan;
(iii)    a health maintenance organization;
(iv)    a dental plan organization; and
(v)    a managed care organization.
(2)    “Insurer” does not include an agency, an authority, or an instrumentality of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, a state, or a political subdivision of a state.
(e)    “NAIC” means the National Association of Insurance Commissioners.
(f)    “ORSA Summary Report” has the meaning stated in § 32–101 of this article.
2023 Maryland Statutes › Insurance › Title 4 - General Requirements for Insurers › Subtitle 5 - Corporate Governance Annual Disclosure Act › Section 4-502 - Applicability and Construction of Subtitle

(a)    The requirements of this subtitle apply only to insurers domiciled in this State.
(b)    Subject to subsection (c) of this section, this subtitle may not be construed to require or impose corporate governance standards and internal procedures beyond those which are required under the Corporations and Associations Article.
(c)    This subtitle may not be construed to limit the Commissioner’s authority, or the rights or obligations of a third–party under Title 2, Subtitle 2 of this article.
2023 Maryland Statutes › Insurance › Title 4 - General Requirements for Insurers › Subtitle 5 - Corporate Governance Annual Disclosure Act › Section 4-504 - Discretion of Provider; Information Required

(a)    (1)    Subject to paragraph (2) of this subsection, an insurer or the insurance group of which the insurer is a member shall have discretion over the responses to a CGAD inquiry.
(2)    The CGAD shall contain the material information necessary to permit the Commissioner to develop an understanding of the corporate governance structure, policies, and practices of the insurer or insurance group.
(b)    The Commissioner may request from an insurer or the insurance group of which the insurer is a member additional information that the Commissioner determines material and necessary.
(c)    The insurer or the insurance group of which the insurer is a member shall:
(1)    maintain documentation and supporting information; and
(2)    make the documentation and supporting information available to the Commissioner on examination or on request of the Commissioner.
2023 Maryland Statutes › Insurance › Title 4 - General Requirements for Insurers › Subtitle 5 - Corporate Governance Annual Disclosure Act › Section 4-507 - Effect of Failure to Submit Cgad; Penalties

(a)    Subject to § 2–210 of this article, an insurer that fails to timely submit a CGAD to the Commissioner as required by this subtitle and without just cause is subject to a penalty of $200 for each day the violation continues, up to a maximum of $25,000.
(b)    The Commissioner may reduce a penalty imposed on an insurer under subsection (a) of this section if the insurer demonstrates to the Commissioner that the imposition of the penalty would constitute a financial hardship to the insurer.
(c)    This section does not limit the authority of the Commissioner to take any other action authorized by this article.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 1 - Assets and Liabilities › Section 5-102 - Assets Not Admitted

(a)    Notwithstanding § 5-101 of this subtitle, in determining the financial condition of an insurer, the following expressly are not allowed as admitted assets:
(1)    organizational expenses, trade names, and other similar intangible assets;
(2)    except for policy loans, a secured or unsecured advance to an officer of the insurer;
(3)    an advance given only on personal security to an employee or insurance producer of the insurer or to another person;
(4)    stock of the insurer owned by it, any material interest in the stock of the insurer, any loan that is secured by the stock of the insurer, or any material proportionate interest in the stock of the insurer acquired or held through the insurer’s ownership of an interest in another firm, corporation, or business unit;
(5)    except for electronic data processing equipment and operating system software allowed as admitted assets under § 5-101(a)(11) of this subtitle, fixtures, furniture, furnishings, libraries, safes, stationery, supplies, and vehicles; and
(6)    the amount, if any, by which the aggregate book value of investments carried in the ledger assets of the insurer exceeds the amount deemed collectible or the aggregate value of those investments as determined under this article.
(b)    Notwithstanding subsection (a) of this section, a bona fide mortgage loan to an officer or employee of the insurer may be allowed as an admitted asset if the loan:
(1)    is approved and ratified by the board of directors of the insurer;
(2)    is secured by a first mortgage on a principal residence of an officer or employee; and
(3)    does not exceed the amount allowed for any other mortgage investment under § 5-511(g) of this title.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 1 - Assets and Liabilities › Section 5-103 - Liabilities

In determining the financial condition of an insurer, capital stock and liabilities to be charged against the insurer’s assets include:
(1)    the amount of any capital stock outstanding;
(2)    the amount, estimated in accordance with this article, that is needed to pay:
(i)    all of the insurer’s reported or unreported losses and claims incurred on or before the date of the annual statement required under this article; and
(ii)    the expenses of adjustment or settlement of those losses and claims;
(3)    any additional reserves that the Commissioner reasonably requires for a specific kind of insurance;
(4)    taxes, expenses, and other obligations that are due or accrued at the date of the annual statement required under this article;
(5)    as to life insurance and disability insurance and annuity contracts:
(i)    reserves on life insurance policies and annuity contracts in force, valued according to the tables of mortality, rates of interest, and applicable methods adopted under this article;
(ii)    reserves for disability benefits for active and disabled lives;
(iii)    reserves for accidental death benefits;
(iv)    reserves for additional benefits that provide long-term home health care and long-term care in a nursing home or other related institution; and
(v)    any additional reserves that the Commissioner reasonably requires; and
(6)    as to insurance other than as specified in item (5) of this section, the amount of reserves equal to the unearned parts of the gross premiums charged on policies in force, computed in accordance with this article.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 2 - Reserves › Section 5-202 - Inadequate Reserves of Insurer

(a)    If the Commissioner determines that an insurer’s unearned premium reserve is inadequate, the Commissioner may require the insurer to increase the unearned premium reserve and maintain it at an adequate level.
(b)    If the Commissioner determines that an insurer’s loss reserves are inadequate as shown by the insurer’s loss experience, the Commissioner shall require the insurer to increase the reserves and maintain them at an adequate level.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 2 - Reserves › Section 5-203 - Active Life Reserves for Health Insurance Policies

(a)    An insurer shall maintain active life reserves for all health insurance policies.
(b)    The active life reserves:
(1)    shall place a sound value on the insurer’s liabilities under the health insurance policies;
(2)    may not be less than the reserves required by the appropriate standards set forth in regulations that the Commissioner adopts; and
(3)    in the aggregate, may not be less than the pro rata gross unearned premiums for the health insurance policies.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 2 - Reserves › Section 5-205 - Unearned Premium Reserves for Property, General Casualty, and Surety Insurance Policies

(a)    Except as provided in subsection (e) of this section, each insurer shall maintain unearned premium reserves on all policies in force with respect to:
(1)    insurance against loss or damage to property;
(2)    general casualty insurance; and
(3)    surety insurance.
(b)    The Commissioner may require that, after deducting reinsurance ceded to solvent insurers in the manner provided in this article, the reserves equal the unearned parts of the gross premiums in force that are computed on each respective risk from the policy’s date of issue.
(c)    Reserves under this section shall be computed:
(1)    at the option of the insurer, on a daily pro rata basis or a monthly pro rata basis if the insurance risk does not vary significantly during the contract period; or
(2)    over the period of risk in proportion to the amount of insurance protection provided if the period of risk differs significantly from the contract period.
(d)    After adopting a method for computing reserves, an insurer may change the method only with the approval of the Commissioner or the insurance supervisory official of the insurer’s domicile.
(e)    (1)    A marine insurance premium on a trip risk not terminated is considered unearned.
(2)    The Commissioner may require an insurer to carry reserves for unearned premiums equal to 100% on trip risks written during the month ended as of the date of the insurer’s annual statement required by this article.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 2 - Reserves › Section 5-206 - Guaranty Fund or Unearned Premium Reserves for Title Insurance Contracts

(a)    (1)    In this section, “risk premiums” means the amount charged for the assumption of risk.
(2)    “Risk premiums” includes title insurance producer commissions.
(3)    “Risk premiums” does not include charges for services rendered in the preparation of documents, searching, underwriting, recording of documents, or closing of a risk.
(b)    In addition to adequate reserves required by § 5–103 of this title for outstanding losses, a title insurer domiciled in the State shall maintain a statutory reserve or unearned premium reserve of at least an amount computed as follows:
(1)    8% of the total amount of the risk premiums written in the calendar year for the retained liability for title insurance contracts shall be as assigned originally to the reserves; and
(2)    during each of the 20 years that follow the year in which the contract is issued, the reserves applicable to the contract shall be reduced in equal 12–month installments in accordance with the following formula:
(i)    35% of the aggregate sum in the year succeeding the year of addition;
(ii)    15% of the aggregate sum in each of the succeeding 2 years;
(iii)    10% of the aggregate sum in the succeeding year;
(iv)    3% of the aggregate sum in each of the succeeding 3 years;
(v)    2% of the aggregate sum in each of the succeeding 3 years; and
(vi)    1% of the aggregate sum in each of the succeeding 10 years.
(c)    (1)    Each title insurer shall file with its annual statement required under § 4–116 of this article a certification by a member in good standing of the Casualty Actuarial Society, or a member in good standing of the American Academy of Actuaries who has been approved as qualified for signing casualty loss reserve opinions by the Casualty Practice Council of the American Academy of Actuaries, as to the adequacy of its reserves required under this section and § 5–103 of this title.
(2)    The actuarial certification required of a title insurer must conform to the National Association of Insurance Commissioners’ annual statement instructions for title insurers.
(d)    (1)    Unearned premium reserves may not be released under subsection (a) of this section to the extent that the release would result in the aggregate reserve falling below the amount required under this section and § 5–103 of this title.
(2)    Any amount of unearned premium reserves that may not be released under paragraph (1) of this subsection shall be considered an unearned premium reserve and may not be considered a supplemental reserve.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 3 - Standard Valuation Law › Section 5-301 - Definitions

(a)    In this  subtitle the following words have the meanings indicated.
(b)    “Accident and health insurance contract” has the meaning stated in § 5–201.1(a) of this title.
(c)    “Appointed actuary” means a qualified actuary who is appointed in accordance with the valuation manual to prepare an opinion required by § 5–201.1 of this title.
(d)    “Company” has the meaning stated in § 5–201.1(a) of this title.
(e)    “Deposit–type contract” has the meaning stated in § 5–201.1(a) of this title.
(f)    “Life insurance policy” has the meaning stated in § 5–201.1(a) of this title.
(g)    “NAIC” means the National Association of Insurance Commissioners.
(h)    “Operative date of the valuation manual” has the meaning stated in § 5–201.1(a) of this title.
(i)    (1)    “Policyholder behavior” means any action a policyholder, contract holder, or any other person with the right to elect options, including a certificate holder, may take under a life insurance policy, an accident and health insurance contract, or a deposit–type contract issued on or after the operative date of the valuation manual.
(2)    “Policyholder behavior” includes behavior relating to lapse, withdrawal, transfer, deposit, premium payment, loan, annuitization,  or benefit elections prescribed by a life insurance policy, an accident and health insurance contract, or a deposit–type contract issued on or after the operative date of the valuation manual.
(3)    “Policyholder behavior” does not include an event of mortality or morbidity that results in benefits prescribed in their essential aspects by the terms of a life insurance policy, an accident and health insurance contract, or a deposit–type contract issued on or after the operative date of the valuation manual.
(j)    “Principle–based valuation” means a reserve valuation that:
(1)    uses one or more methods or one or more assumptions determined by a company; and
(2)    meets the requirements of § 5–314 of this subtitle.
(k)    “Qualified actuary” has the meaning stated in § 5–201.1(a) of this title.
(l)    “Tail risk” means a risk that occurs when:
(1)    the frequency of low probability events is higher than expected under a normal probability distribution; or
(2)    events of very significant size or magnitude are observed.
(m)    “Valuation manual” has the meaning stated in § 5–201.1(a) of this title.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 3 - Standard Valuation Law › Section 5-301.1 - Valuation of Reserves Required

(a)    (1)    (i)    Subject to subparagraph (ii) of this paragraph, the Commissioner annually shall value or cause to be valued the reserves for all outstanding life insurance policies, annuity contracts, and pure endowment contracts issued by each life insurer doing business in the State before the operative date of the valuation manual.
(ii)    For an alien insurer, the valuation required by this subsection shall be limited to the alien insurer’s United States business.
(2)    To calculate reserves under this subsection, the Commissioner may use group methods and approximate averages for fractions of a year or otherwise.
(3)    For a foreign insurer or alien insurer, instead of the valuation of reserves required by paragraph (1) of this subsection, the Commissioner may accept a valuation made or caused to be made by the insurance supervisory official of another state or other jurisdiction if the valuation complies with the minimum standard under this subtitle.
(4)    Subject to the approval of the Commissioner, an insurer that has adopted a standard of valuation producing greater aggregate reserves than the aggregate reserves calculated under the minimum standard provided in this subtitle may adopt a lower standard of valuation if it is not lower than the minimum standard provided in this subtitle.
(b)    (1)    The Commissioner annually shall value or cause to be valued the reserves for all outstanding life insurance policies, accident and health insurance contracts, and deposit–type contracts issued by a company on or after the operative date of the valuation manual.
(2)    For a foreign company or an alien company, instead of the valuation of reserves required by paragraph (1) of this subsection, the Commissioner may accept a valuation made or caused to be made by the insurance supervisory official of another state if the valuation complies with the minimum standard under this subtitle.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 3 - Standard Valuation Law › Section 5-302 - Policies and Contracts Issued Before Operative Date of Standard Nonforfeiture Law

Except as otherwise provided in §§ 5-305 and 5-306 of this subtitle, the minimum standard for the valuation of a policy or contract issued before the operative date of the Maryland Standard Nonforfeiture Law for Life Insurance is the minimum standard provided by former Article 48A, § 83(2) of the Code in effect on September 30, 1997.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 3 - Standard Valuation Law › Section 5-303 - Policies and Contracts Issued on or After Operative Date of Standard Nonforfeiture Law -- Scope

(a)    Except as otherwise provided in §§ 5–305 and 5–306 of this subtitle for group annuity contracts and pure endowment contracts issued before the operative date of the Maryland Standard Nonforfeiture Law for Life Insurance:
(1)    §§ 5–304 through 5–312 of this subtitle apply only to policies and contracts, as appropriate, issued on or after that operative date and before the operative date of the valuation manual; and
(2)    §§ 5–313 and 5–314 of this subtitle do not apply to the policies and contracts.
(b)    Sections 5–313 and 5–314 of this subtitle apply to all life insurance policies, accident and health insurance contracts, and deposit–type contracts issued by a company on or after the operative date of the valuation manual.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 3 - Standard Valuation Law › Section 5-308 - Policies and Contracts Issued on or After Operative Date of Standard Nonforfeiture Law -- Reserve Valuation Method for Annuity and Pure Endowment Benefits

(a)    (1)    Except as provided in paragraph (2) of this subsection, this section applies to all annuity contracts and pure endowment contracts.
(2)    This section does not apply to:
(i)    group annuity contracts or pure endowment contracts purchased under a retirement plan or plan of deferred compensation, established or maintained by an employer, an employee organization, or both, unless the plan provides individual retirement accounts or individual retirement annuities under § 408 of the Internal Revenue Code; or
(ii)    any disability and accidental death benefits and benefits for long-term home health care and long-term care in a nursing home or other related institution included in an annuity contract or pure endowment contract.
(b)    (1)    (i)    For benefits under an annuity contract or pure endowment contract to which this section applies, the reserve according to the Commissioners annuity reserve method shall be the greatest of the amounts determined for each respective contract year under subparagraph (ii) of this paragraph.
(ii)    For each contract year, there shall be determined the amount by which the present value, at the date of valuation, of the future guaranteed benefits, including guaranteed nonforfeiture benefits, under the contract at the end of the contract year exceeds the present value, at the date of valuation, of any future valuation considerations derived from future gross considerations that are required by the terms of the contract and become payable prior to the end of the contract year.
(2)    For purposes of this subsection:
(i)    the future guaranteed benefits shall be determined by using the mortality table, if any, and interest rate specified in the contract for determining guaranteed benefits; and
(ii)    the valuation considerations are the portions of the respective gross considerations applied under the terms of the contract to determine nonforfeiture values.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 3 - Standard Valuation Law › Section 5-309 - Policies and Contracts Issued on or After Operative Date of Standard Nonforfeiture Law -- Minimum Reserves for Life Insurance Policies

(a)    This section does not apply to reserves for disability and accidental death benefits and benefits for long-term home health care and long-term care in a nursing home or other related institution included in a life insurance policy.
(b)    An insurer’s aggregate reserves for all life insurance policies may not be less than the aggregate reserves calculated in accordance with:
(1)    the methods set forth in §§ 5-307, 5-308, 5-311, and 5-312 of this subtitle; and
(2)    the mortality tables and rates of interest used in calculating nonforfeiture benefits for those policies.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 3 - Standard Valuation Law › Section 5-310 - Policies and Contracts Issued on or After Operative Date of Standard Nonforfeiture Law -- Optional Reserve Calculation

(a)    Subject to subsection (b) of this section, the Commissioner may establish any category of policies, contracts, or benefits for which reserves may be calculated, at the option of the insurer, under a standard that produces greater aggregate reserves for the category than the aggregate reserves calculated using the minimum standard provided in this subtitle.
(b)    (1)    This subsection does not apply to annuity contracts or pure endowment contracts.
(2)    The interest rate used to calculate the reserve for a policy or contract under a standard other than the minimum standard in this subtitle may not be higher than the corresponding interest rate used to calculate any nonforfeiture benefits provided by the policy or contract.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 3 - Standard Valuation Law › Section 5-311 - Policies and Contracts Issued on or After Operative Date of Standard Nonforfeiture Law -- Reserve Calculation for Valuation Net Premium Exceeding Gross Premium Charged

(a)    (1)    Except as provided in subsection (b) of this section, if in any contract year the gross premium charged by an insurer on a policy or contract is less than the valuation net premium for the policy or contract, the minimum reserve required for the policy or contract is the greater of:
(i)    the reserve calculated according to the mortality table, interest rate, and method actually used for the policy or contract; or
(ii)    the reserve calculated by using the method actually used for the policy or contract, but:
1.    using the minimum valuation standards of mortality and of interest in §§ 5-304 and 5-306 of this subtitle; and
2.    in each contract year for which the valuation net premium exceeds the actual gross premium, using the actual gross premium instead of the valuation net premium.
(2)    (i)    Except as provided in subparagraph (ii) of this paragraph, for purposes of paragraph (1) of this subsection, the valuation net premium for a policy or contract shall be calculated by the method used in calculating the reserve on the policy or contract using the minimum valuation standards of mortality and interest rate under §§ 5-304 and 5-306 of this subtitle.
(ii)    For future renewals under a renewable term insurance policy, the modern CSO mortality table published in The Transactions of The Society of Actuaries, Vol. XXVII (1975), shall be used instead of the minimum valuation standard of mortality under § 5-304 of this subtitle.
(3)    If the gross premium rates for a policy or contract are not based consistently on a suitable accepted or credible mortality basis or table, the Commissioner may require additional reserves in accordance with § 5-103(3) of this title.
(b)    For a life insurance policy described in § 5-307(a)(3)(ii) of this subtitle:
(1)    subsection (a) of this section shall be applied substituting the method described in § 5-307 of this subtitle, without regard to § 5-307(a)(4)(iii), for the method actually used in calculating the reserve for the policy; and
(2)    the minimum reserve at each policy anniversary of the policy shall be the greater of:
(i)    the minimum reserve calculated under § 5-307 of this subtitle, including § 5-307(a)(4)(iii); or
(ii)    the minimum reserve calculated under this section.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 3 - Standard Valuation Law › Section 5-312 - Policies and Contracts Issued on or After Operative Date of Standard Nonforfeiture Law -- Reserve Calculation for Indeterminate Premium Plans

(a)    This section applies to:
(1)    a plan of life insurance that provides for future premiums to be determined by the insurer based on estimates of future experience; and
(2)    a plan of life insurance or annuity that is of a nature that precludes determining the minimum reserves by the methods described in §§ 5-307, 5-308, and 5-311 of this subtitle.
(b)    In accordance with regulations adopted by the Commissioner, the reserves that are held under a plan described in subsection (a) of this section shall:
(1)    be appropriate in relation to the benefits and pattern of premiums for that plan; and
(2)    be computed by a method that is consistent with the principles of this subtitle.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 3 - Standard Valuation Law › Section 5-314 - Valuation Manual -- Reserves

(a)    For policies and contracts specified in the valuation manual, a company shall establish reserves using a principle–based valuation that:
(1)    quantifies the benefits and guarantees, and the funding, associated with the policies or contracts and their risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring during the lifetime of the policies or contracts;
(2)    for policies or contracts with significant tail risk, reflects conditions appropriately adverse to quantify the tail risk;
(3)    incorporates assumptions, risk analysis methods and financial models, and management techniques that are consistent with, but not necessarily identical to, those used within the company’s overall risk assessment process, while recognizing potential differences in financial reporting structures and any prescribed assumptions or methods;
(4)    incorporates assumptions that:
(i)    are prescribed in the valuation manual; or
(ii)    if not prescribed in the valuation manual:
1.    are established using the company’s available experience, to the extent it is relevant and statistically credible; or
2.    to the extent that company data is not available, relevant, or statistically credible, are established using other relevant, statistically credible experience; and
(5)    provides margins for uncertainty, including adverse deviation and estimation error, such that the greater the uncertainty the larger the margin and resulting reserve.
(b)    (1)    A company that uses a principle–based valuation for one or more policies or contracts subject to this section shall:
(i)    establish procedures for corporate governance and oversight of the actuarial valuation function consistent with those described in the valuation manual;
(ii)    provide to the Commissioner and the board of directors of the company an annual certification of the effectiveness of the company’s internal controls with respect to the principle–based valuation; and
(iii)    develop, and file with the Commissioner on request, a principle–based valuation report that complies with standards prescribed in the valuation manual.
(2)    The internal controls under paragraph (1)(ii) of this subsection shall be designed to ensure that:
(i)    all material risks inherent in the liabilities and associated assets subject to the principle–based valuation are included in the principle–based valuation; and
(ii)    principle–based valuations are made in accordance with the valuation manual.
(3)    The annual certification required under paragraph (1)(ii) of this subsection shall be based on the internal controls in place as of the end of the preceding calendar year.
(c)    A principle–based valuation may include a prescribed formulaic reserve component.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 3 - Standard Valuation Law › Section 5-317 - Exemptions

(a)    The Commissioner may exempt a specific product form or product line of a domestic company that holds a certificate of authority issued by the Commissioner and is doing business only in the State from the requirements of § 5–313 of this subtitle if:
(1)    the Commissioner has issued an exemption in writing to the company;
(2)    the exemption has not been revoked in writing by the Commissioner; and
(3)    the company computes reserves:
(i)    using assumptions and methods used before the operative date of the valuation manual; and
(ii)    in accordance with any requirements established by the Commissioner by regulation.
(b)    (1)    A company that is granted an exemption under subsection (a) of this section is subject to § 5–201 of this title and §§ 5–302 through 5–312 of this subtitle.
(2)    With respect to a company that is granted an exemption under subsection (a) of this section, any reference to § 5–313 of this subtitle found in § 5–201.1 of this title and §§ 5–302 through 5–312 of this subtitle is not applicable.
(c)    The Commissioner may exempt a domestic company that holds a certificate of authority issued by the Commissioner and is doing business in the State from the requirements of §§ 5–314 and 5–315 of this subtitle if the company meets the life principle–based reserves exemption criteria in the valuation manual.
(d)    For purposes of subsection (c) of this section, ordinary life premiums are measured as direct premium plus reinsurance assumed from an unaffiliated company, as reported in the annual statement for the prior calendar year.
(e)    (1)    A domestic company that meets the requirements of subsection (c) of this section shall:
(i)    compute reserves:
1.    using assumptions and methods used before the operative date of the valuation manual; and
2.    in accordance with any requirements established by the Commissioner in regulation; and
(ii)    file, before July 1 of each year, a statement with the Commissioner certifying that the domestic company meets the requirements of subsection (c) of this section for the current calendar year based on premiums and other values from the financial statements for the prior calendar year.
(2)    Before September 1 of each year, the Commissioner may reject a statement filed under paragraph (1)(ii) of this subsection and require a domestic company to comply with the valuation manual requirements for life insurance reserves.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 4 - Valuation of Investments › Section 5-401 - Valuation of Investments

(a)    (1)    Except for securities subject to amortization and except as otherwise provided in this title, an insurer’s investments shall be valued, at the discretion of the Commissioner, at:
(i)    their appraised value;
(ii)    their fair market value; or
(iii)    prices that the Commissioner determines represent their fair market value.
(2)    If the Commissioner finds that a special investment reserve would be prudent in view of the character of investments, the Commissioner may require the insurer to:
(i)    establish and maintain a special investment reserve of a reasonable amount for losses or fluctuations in value; and
(ii)    submit a statement or report to the Commissioner on the financial condition of the reserve.
(3)    In connection with an examination or required financial statement of an authorized insurer, the Commissioner may:
(i)    require the insurer to submit a complete financial statement and audited report of the financial condition of a corporation in which the insurer owns securities; and
(ii)    order an examination to be made of a subsidiary or affiliate of the insurer.
(b)    (1)    An insurer that owns 10% or more of the stock of another insurer shall have its stock valued at book value as shown by the more recent of:
(i)    the last annual statement of the other insurer; or
(ii)    the last report on examination of the other insurer.
(2)    Except as provided in paragraph (3) of this subsection, the book value of a share of common stock of an insurer shall be represented by a fraction:
(i)    the numerator of which is the amount of the insurer’s capital and surplus, less the value of any outstanding preferred stock; and
(ii)    the denominator of which is the number of shares of the insurer’s common stock issued and outstanding.
(3)    An insurer may value its holdings of stock in a subsidiary insurer in an amount that is not less than the acquisition cost, if the acquisition cost is less than the value determined under paragraph (2) of this subsection.
(c)    The stock of a subsidiary of an insurer shall be valued on the basis of only those assets that would be authorized investments for the insurer if the insurer acquired or held them directly.
(d)    Real estate that is acquired by foreclosure or by deed in lieu of foreclosure may not be valued at an amount greater than the sum of:
(1)    the unpaid principal of any defaulted loan at the date of the foreclosure or deed;
(2)    any taxes and expenses that the insurer pays or incurs to protect the investment or in connection with the acquisition, except for uncollected interest on any loan;
(3)    the cost of a later addition or improvement by the insurer; and
(4)    an amount that the insurer pays later on assessments levied for improvements in connection with the property.
(e)    Purchase-money mortgages shall be valued in an amount not exceeding the lesser of:
(1)    the acquisition cost of the real property; or
(2)    90% of the value of the real property.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 4 - Valuation of Investments › Section 5-402 - Valuation of Bonds

(a)    This section applies to a bond or other evidence of indebtedness that:
(1)    has a fixed term and rate of interest;
(2)    is held by an insurer;
(3)    is amply secured; and
(4)    is not in default as to principal or interest.
(b)    (1)    A bond or other evidence of indebtedness subject to this section may be valued:
(i)    if purchased at par, at the par value; or
(ii)    if purchased above or below par:
1.    on the basis of the purchase price adjusted to bring the value to par at maturity and to yield in the meantime the effective rate of interest at which the purchase was made; or
2.    according to another accepted method of valuation that the Commissioner approves.
(2)    The purchase price may not be valued at a higher figure than the sum of:
(i)    the actual market value at the time of purchase; and
(ii)    the actual brokerage, transfer, postage, or express charges paid in the acquisition of the bond or other evidence of indebtedness.
(3)    Unless otherwise provided by a valuation that the Commissioner establishes or approves, a bond or other evidence of indebtedness may not be carried on its books at above the call price for the entire issue during any period within which the security may be called.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 5 - Investments of Life Insurers › Section 5-502 - Investments of Foreign or Alien Life Insurers

(a)    For purposes of this section, the domicile in the United States of an alien insurer, other than an insurer formed under the laws of Canada, is deemed to be the state where the alien insurer maintains its largest deposit of trusteed assets.
(b)    The investment portfolio of a foreign life insurer or alien life insurer shall be:
(1)    as allowed by the laws of its domicile; and
(2)    of a quality substantially as high as that required under this subtitle for similar funds of like domestic life insurers.
(c)    The Commissioner may deny or refuse to renew a certificate of authority to a foreign life insurer or alien life insurer if:
(1)    the foreign life insurer or alien life insurer has investments in one person in excess of the limit provided in § 5-507 of this subtitle; or
(2)    the Commissioner finds that its investments do not comply in substance with the investment requirements and limitations of this subtitle for domestic life insurers transacting the same kind of insurance business.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 5 - Investments of Life Insurers › Section 5-503 - Date When Eligibility of Investment Determined

(a)    The eligibility of an investment shall be determined as of the date of the making or acquisition of the investment.
(b)    An investment limitation that is based on the amount of assets or particular funds of a life insurer shall relate to those assets or funds as shown by:
(1)    the annual statement of the life insurer as of the December 31 immediately preceding the date of acquisition of the investment by the life insurer; or
(2)    a current financial statement of the life insurer that reflects the result of merger or consolidation with another insurer, bulk reinsurance, or change in capitalization.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 5 - Investments of Life Insurers › Section 5-504 - General Qualifications of Investments

(a)    A life insurer may not purchase an investment or security at a price above its market value.
(b)    Subsection (a) of this section does not prohibit a life insurer from acquiring control of another insurer.
(c)    This subtitle does not prohibit a life insurer from acquiring other or additional securities or property that is received:
(1)    as a dividend;
(2)    as a lawful distribution of assets; or
(3)    under a lawful and bona fide agreement of bulk reinsurance, merger, or consolidation.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 5 - Investments of Life Insurers › Section 5-505 - Authorization of Investments and Loans

(a)    (1)    In this section the following words have the meanings indicated.
(2)    “Board” means the board of directors of a life insurer.
(3)    “Committee” means a committee authorized by the board of directors of a life insurer.
(b)    (1)    The board shall adopt a written plan for:
(i)    acquiring and holding investments; and
(ii)    engaging in investment practices.
(2)    The plan required under paragraph (1) of this subsection shall specify guidelines for the:
(i)    quality, maturity, and diversification of investments; and
(ii)    investment strategies that assure that investments and investment practices are appropriate for:
1.    the business conducted by the life insurer;
2.    the liquidity needs of the life insurer; and
3.    the capital and surplus requirements of the life insurer.
(3)    Before adopting the plan required under paragraph (1) of this subsection, the board shall review and assess the life insurer’s technical investment and administrative capabilities and investment expertise.
(c)    (1)    The board shall supervise and direct any investments acquired and held under this subtitle.
(2)    At least annually, the board by formal resolution shall determine whether all investments have been made in accordance with delegations, standards, limitations, and investment objectives prescribed by the board or committee charged with the responsibility of directing the life insurer’s investments.
(d)    In order to determine whether the investment activity of the life insurer is consistent with the plan required under subsection (b) of this section, on at least a quarterly basis, the board or committee shall:
(1)    receive and review a summary report on the life insurer’s investment portfolio, investment activities, and investment practices engaged in under delegated authority; and
(2)    review and revise as needed the plan required under subsection (b) of this section.
(e)    In the discharge of duties under this section:
(1)    the board shall require that the following be made available on a regular basis to the board:
(i)    the records of any authorizations or approvals;
(ii)    the reports of any action taken under the authority delegated under the plan required under subsection (b) of this section; and
(iii)    any other documentation as the board may require; and
(2)    each director shall perform their duties as a director, including any duties as a member of a committee:
(i)    in good faith;
(ii)    in a manner reasonably believed to be in the best interests of the insurer; and
(iii)    with that degree of care that an ordinarily prudent person in a like position would use under similar circumstances.
(f)    If a life insurer does not have a board, all references to the board in this section shall be deemed to be references to the governing body of the life insurer having authority equivalent to that of a board.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 5 - Investments of Life Insurers › Section 5-506 - Prohibited Investments and Loans

(a)    In addition to investments otherwise excluded under this article, a life insurer may not directly or indirectly invest in or lend its funds on the security of:
(1)    an investment or security that the Commissioner finds is designed to evade a prohibition of this article; or
(2)    issued shares of the life insurer’s capital stock, except:
(i)    for the purpose of mutualization under Title 3, Subtitle 1 of this article; or
(ii)    in connection with a plan approved by the Commissioner for purchase of the shares by employees or insurance producers of the life insurer.
(b)    A life insurer may not directly or indirectly make a loan to an officer or director of the life insurer, except:
(1)    a policy loan; or
(2)    a bona fide mortgage loan on the principal residence of the officer or director that has been approved or ratified by the board of directors of the life insurer.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 5 - Investments of Life Insurers › Section 5-507 - Investment in One Person

(a)    This section does not apply to:
(1)    policy loans made under this subtitle; or
(2)    general obligations of the United States, Canada, or a state.
(b)    Unless the Commissioner approves, a life insurer may not have at one time any combination of investments in or loans on the security of the obligations, property, or securities of one person in an aggregate amount exceeding 10% of the admitted assets of the life insurer.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 5 - Investments of Life Insurers › Section 5-508 - Policy Loans

(a)    A life insurer may lend to its policyholder on the policy as collateral security an amount not exceeding the cash surrender value of the policy.
(b)    A policy loan is an eligible reserve investment of a life insurer.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 5 - Investments of Life Insurers › Section 5-510 - Investment Requirements

(a)    Before investing in other classes or types of investment, each life insurer shall invest and maintain invested, in cash and securities of the classes described in subsection (b) of this section, funds in an amount not less than the minimum paid-in capital stock required under this article for authority to engage in the life insurance business.
(b)    The investments required by subsection (a) of this section may be made only in cash or the following classes of securities:
(1)    bonds or other evidences of indebtedness of the United States or an agency of the United States if the obligation is guaranteed as to principal and interest by the United States;
(2)    bonds or other evidences of indebtedness that are the direct obligations of the State or of a county, district, or municipal corporation of the State; or
(3)    bonds or other evidences of indebtedness that are direct obligations of another state.
(c)    After satisfying the minimum investment requirements of subsection (a) of this section, each life insurer shall invest and maintain invested additional funds, to bring its investments up to an amount not less than 100% of the life insurer’s required reserves, in cash or the classes of securities or investments authorized under § 5-511 of this subtitle.
(d)    A life insurer shall maintain the minimum investments required by this section free and clear from any lien or pledge, other than as a deposit required or allowed under § 4-106 of this article.
(e)    After satisfying the minimum investment requirements of this subtitle, a life insurer may invest any excess funds without limitation in investments not otherwise prohibited under this subtitle.
2023 Maryland Statutes › Insurance › Title 5 - Assets, Liabilities, Reserves, and Investments of Insurers › Subtitle 6 - Investments of Insurers Other Than Life Insurers › Section 5-602 - Investments of Foreign or Alien Insurers

(a)    For the purposes of this section, the domicile in the United States of an alien insurer, other than an insurer formed under the laws of Canada, is deemed to be the state where the alien insurer maintains its largest deposit of trusteed assets.
(b)    The investment portfolio of a foreign insurer or alien insurer, other than a life insurer, shall be:
(1)    as allowed by the laws of its domicile; and
(2)    of a quality substantially as high as that required under this subtitle for similar funds of like domestic insurers.
(c)    The Commissioner may deny or refuse to renew a certificate of authority to a foreign insurer or alien insurer if:
(1)    the foreign insurer or alien insurer has investments in one person in excess of the limit provided in § 5-606 of this subtitle; or
(2)    the Commissioner finds that its investments do not comply in substance with the investment requirements and limitations of this subtitle for domestic insurers transacting the same kind of insurance business.