Md. Code Regs. 31.05.06.07

Current through Register Vol. 51, No. 24, December 2, 2024

Section 31.05.06.07 - Separate Accounts

A. This regulation is applicable only to life insurers, and not to property and casualty insurers.

B. In this regulation, the term "separate account" means a segregated asset account which is used to determine the basis of values of variable life insurance policies and variable annuity contracts and which complies with the requirements of Insurance Article, Title 16, Subtitle 6, Annotated Code of Maryland.

C. A life insurer, at its option, may regard the entire assets of a fund in a separate account as being investment grade assets if not more than 20 percent of the assets of the fund are invested in high yield/high risk obligations.

D. If more than 20 percent of the assets of a fund in account are invested in high yield/high risk obligations, the life insurer, at its option, may either:

(1) Allocate the assets of the fund between investment grade obligations and high yield/high risk obligations as the case may be; or

(2) Omit the total value of the fund from the calculation to be made under Regulation .04A of this chapter of both the life insurer's aggregate amount of high yield/high risk obligations and of its total admitted assets, if policyholders and contract holders selecting the funds have been furnished with a prospectus which indicates that the fund may invest in speculative or in high yield/high risk obligations.

E. For purposes of this regulation, if a fund has several series, the term "fund" as used in this regulation is applicable to each series separately.

Md. Code Regs. 31.05.06.07

Regulation .07 amended effective September 26, 1994 (21:19 Md. R. 1634)