31.09.04.02

.02 Definitions.

A. In this chapter the following terms have the meanings indicated.

B. Terms Defined.

(1) “Contracts on a variable basis” means annuity contracts, as defined in Insurance Article, §1-101(e), Annotated Code of Maryland, which provide for payments varying directly with the investment experience of a segregated asset account, hereinafter referred to as “variable contract account”, as distinguished from “fixed annuity contracts”. This definition does not include any of the forms of insurance prohibited by Insurance Article, §§16-112 and 27-207, Annotated Code of Maryland.

(2) “Fixed annuity contracts” or “guaranteed annuity contracts” means annuity contracts, as defined in Insurance Article, §1-101(e), Annotated Code of Maryland, which provide for payment of fixed dollar amounts guaranteed in the contract.

C. A participating annuity contract providing for payment by the insurer of dividends or participation in the divisible surplus accruing under the contract in addition to fixed dollar payments guaranteed in the contract shall be deemed a fixed annuity contract and not a contract on a variable basis if, according to assumptions made by the insurer at the time the contract is issued, at least 50 percent of the consideration for the contract is required to support the fixed dollar guarantees.