Code of Maryland Regulations › Title 31 - MARYLAND INSURANCE ADMINISTRATION › Subtitle 09 - LIFE INSURANCE AND ANNUITIES › Chapter 31.09.04 - Contracts on a Variable Basis › Section 31.09.04.07 - Contract Provisions

Current through Register Vol. 51, No. 14, July 12, 2024
A. Any contract on a variable basis issued or delivered in this State shall contain a statement of the essential features of the procedure to be followed by the insurer in determining the dollar amount of variable benefits or other contractual payments or values under the contract and shall state in clear terms that this amount may decrease or increase according to this procedure. A contract, and any certificate evidencing variable benefits issued pursuant to the contract on a group basis, and any application for the contract or certificate shall have prominently printed on its first page in boldface type not less than 10 point, a clear statement that payments and termination values provided by the contract are variable and not guaranteed as to dollar amount.
B. A contract issued or delivered in this State shall stipulate the expense, mortality, and investment increment factors to be used in computing the dollar amount of variable benefits or other contractual payments or values under the contract, and shall guarantee that expense and mortality experience will not adversely affect the dollar amount.
C. A contract shall contain all of the standard or uniform provisions required by Insurance Article, Annotated Code of Maryland, except that the Commissioner will give consideration to waiving the requirements of former Article 48A, § 408A, Annotated Code of Maryland (transferred to the Session Laws by § 6, Ch. 57, Acts of 1997), upon a showing by the insurer satisfactory to the Commissioner that the requirements are inconsistent with the purposes of the contract.
D. An individual contract on a variable basis may not be issued or delivered in this State unless it contains in substance the following provisions:
(1) That in event of default in payment of any consideration beyond the period of grace allowed by the contract for the payment thereof, the insurer will make payment of the value of the contract in accordance with an equitable plan specified in the contract, this payment to commence not later than the date contractual payments by the insurer would have begun if there had been no default.
(2) That upon request of the contract holder received by the insurer at least 90 days before the date contractual payments by the insurer would otherwise begin, the insurer will make payment of the value of the contract in accordance with an equitable plan specified in the contract which may be selected by the contract holder, this plan to become effective as of the date contractual payments under the contract would otherwise begin, unless another date is requested by the contract holder and agreed to by the insurer.
(3) That the insurer will mail to the contract holder at least once in each contract year, a report in a form approved by the Commissioner which shall include a statement of the number of units credited to the contract, the dollar value of a unit, and the dollar value of the total number of units credited, all this information to be furnished as of a stated date which shall be not more than 2 months before the date of mailing.