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 31.09.04.08 - Administration and Accounting Procedures

Current through Register Vol. 51, No. 14, July 12, 2024
A. Any domestic life insurer specifically authorized by the Commissioner to issue contracts on a variable basis and any foreign or alien life insurer specifically authorized by the Commissioner to deliver these contracts in Maryland may establish and operate one or, upon express approval by the Commissioner, more than one, segregated asset accounts to be known as variable contract accounts. An insurer which has established a separate investment account as defined in Insurance Article, §
									5-512, Annotated Code of Maryland, may, upon express approval by the Commissioner, use the same segregated asset account as both a separate investment account and a variable contract account.
B. Except as may be otherwise specifically provided by the contract, all amounts received in connection with any contract on a variable basis shall be placed in the appropriate variable contract account, and all the liabilities of the contract shall be set up in that account.
C. The investments and liabilities of a variable contract account at all times shall be clearly identifiable and distinguishable in the books or other records of the insurer from the other investments and liabilities of the insurer. An insurer may not hypothecate any of the assets of any variable contract account or borrow on the security of these assets. An investment, other than cash, in any variable contract account, in any separate account, or in the insurer's general investment account may not be transferred by sale, exchange, substitution, or otherwise from one account to another except with the Commissioner's approval.
D. Assets allocated to a variable contract account shall be owned by the insurer and the insurer may not be, or hold itself out to be, a trustee with respect to these assets.
E. An insurer issuing a contract on a variable basis shall, annually on or before March first, submit to the Commissioner a true statement for the business of its variable contract accounts. This statement shall be in such form and content as is approved or adopted for current use by the National Association of Insurance Commissioners or its successor organization and as supplemented for additional information required by the Commissioner and shall include details as to all of the income, disbursements, assets, and liability items associated with the variable contract accounts.
F. The valuation of variable contract account assets for all purposes, including annual statements of the insurer to the Commissioner, shall be determined in accordance with the market value of the assets notwithstanding the application of other valuation methods to assets of the insurer other than the assets of the variable contract accounts. The valuation may be made as of such valuation dates as the insurer shall establish from time to time, except as otherwise required for the annual statements to the Commissioner. To accomplish the valuation at market value any equity security purchased for variable contract account shall be a security:
(1) Which is listed or admitted to trading on a securities exchange located in the United States of America or Canada; or
(2) Which is publicly held and traded in the over-the-counter market as defined by the Commissioner and as to which market quotations have been available.