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31.05.06.00.htm 31.05.06.00. Title 31 MARYLAND INSURANCE ADMINISTRATION Subtitle 05 ASSETS, LIABILITIES, RESERVES, and INVESTMENTS OF INSURERS Chapter 06 Investments of Life Insurers and Property and Casualty Insurers in High Yield/High Risk Obligations Authority: Insurance Article, §2-109, 4-103(c) 5-502, 5-506, 5-507, 5-511, 5-605, 5-606, and 5-608, Annotated Code of Maryland
31.05.06.01.htm 31.05.06.01. 01 Purpose.. The purpose of this chapter is to protect the interests of policyholders of life insurers and property and casualty insurers admitted to do business in Maryland by limiting the amount of high yield/high risk obligations in which an insurer may invest, so that the assets of the insurer will be reasonable in relation to the insurer's liabilities and adequate to its financial needs, permitting policyholders to rely with confidence on the insurer's a
31.05.06.02.htm 31.05.06.02. 02 Definitions.. A. In this chapter, the following terms have the meanings indicated.. B. Terms Defined.. 1) "Admitted assets" means those assets of the insurer which comply with the definition of the term contained in Insurance Article, §5-101, Annotated Code of Maryland, and which are listed on the last annual statement of the insurer filed with the Commissioner and valued in accordance with the then current instructions, rules, and regulations of the National Association of
31.05.06.03.htm 31.05.06.03. 03 Applicability.. This chapter is applicable to the acquisition of any high yield/high risk obligation by any life insurer or property and casualty insurer admitted to do business in Maryland.
31.05.06.04.htm 31.05.06.04. 04 Acquisition of Certain Obligations.. A. A life insurer or property and casualty insurer admitted to do business in Maryland may not acquire directly or indirectly, except with the prior approval of the Commissioner, or except under a plan of replacement approved by the Commissioner in accordance with §C of this regulation, any high yield/high risk obligation of any person if, after giving effect to the acquisition, the aggregate cost of the acquisition plus
31.05.06.05.htm 31.05.06.05. 05 Collateral Loans.. If a collateral loan is secured by one or more high yield/high risk obligations as well as by other types of collateral, the amount of the collateral loan to be considered for purposes of Regulation .04A of this chapter shall be that fraction of the loan which the value of the high yield/high risk obligations bears to the total value of the collateral.
31.05.06.06.htm 31.05.06.06. 06 Private Placements.. A. This regulation applies to private placements which have not been rated by rating agencies.. B. If a private placement does not qualify as an investment grade obligation in accordance with Regulation .02B(4) of this chapter it shall be considered a high yield/high risk obligation unless:1) In the case of an interest-bearing obligation which does not involve an equity feature, the interest rate charged is comparable to rates generally
31.05.06.07.htm 31.05.06.07. 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 e
31.05.06.9999.htm 31.05.06.9999. Administrative History Effective date: December 10, 1990 (17:24 Md. R. 2837). Regulation .01 amended effective September 26, 1994 (21:19 Md. R. 1634). Regulation .02B amended effective September 26, 1994 (21:19 Md. R. 1634). Regulation .03 amended effective September 26, 1994 (21:19 Md. R. 1634). Regulation .04 amended effective September 26, 1994 (21:19 Md. R. 1634). Regulation .07 amended effective September 26, 1994 (21:19 Md. R. 1634) ―. Chapter recodified from C
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