Section 9-403 - Scope of subtitle.
§ 9-403. Scope of subtitle.
(a) Individuals covered.-
(1) Subject to paragraph (2) of this subsection, coverage shall be provided under this subtitle for the policies or contracts specified in subsection (b) of this section to an individual who is:
(i) a resident and an owner of or certificate holder under the policy or contract; or
(ii) a nonresident and an owner of or certificate holder under the policy or contract, if:
1. the insurer that issued the policy or contract is domiciled in this State;
2. the insurer that issued the policy or contract has never held a license or certificate of authority in the state in which the nonresident resides;
3. the state in which the nonresident resides has an insurance guaranty corporation or its equivalent similar to the Corporation established by § 9-405 of this subtitle; and
4. the nonresident is not eligible for coverage by the insurance guaranty corporation or its equivalent in the state in which the nonresident resides.
(2) Coverage shall be provided under this subtitle for the policies or contracts specified in paragraph (1) of this subsection to a beneficiary, assignee, or payee of an individual covered under paragraph (1) of this subsection, regardless of the individual's residence.
(b) Coverage provided.-
(1) Except as provided in paragraph (2) of this subsection, coverage shall be provided under this subtitle to individuals specified in subsection (a) of this section for:
(i) direct, nongroup life, health, annuity, including structured settlements, and supplemental policies or contracts; or
(ii) certificates under direct, group policies or contracts issued by member insurers, except as limited by this subtitle.
(2) Coverage may not be provided under this subtitle for:
(i) any part of a policy or contract:
1. that is not guaranteed by the insurer, or under which the risk is borne by the policyholder or contract holder; and
2. that, under subitem 1 of this item, includes the following types of policies:
A. variable annuity contracts;
B. variable life insurance contracts, except to the extent of guaranteed death benefits in the contract;
C. the value of an annuity contract in excess of the values guaranteed in the contract; or
D. the value of a universal life and interest sensitive life and similar products in excess of the values guaranteed in the contract;
(ii) a policy or contract of reinsurance, unless assumption certificates have been issued;
(iii) any part of a policy or contract to the extent that the rate of interest on which it is based:
1. averaged over the period of 4 years before the date on which the Corporation becomes obligated with respect to the policy or contract, exceeds a rate of interest determined by subtracting 2 percentage points from Moody's corporate bond yield average for the 4-year period before the date on which the Corporation became obligated or, if the policy or contract was issued less than 4 years before the Corporation became obligated, for that period; or
2. on or after the date on which the Corporation becomes obligated with respect to the policy or contract, exceeds the rate of interest determined by subtracting 3 percentage points from the most recent published Moody's corporate bond yield average;
(iv) a plan or program of an employer, association, or similar entity to provide life, health, or annuity benefits to its employees or members to the extent that the plan or program is self-funded or uninsured, including benefits payable by an employer, association, or similar entity under:
1. a multiple employer welfare arrangement, as defined in § 514 of the Employee Retirement Income Security Act of 1974;
2. a minimum premium group insurance plan;
3. a stop-loss group insurance plan; or
4. an administrative services only contract;
(v) any part of a policy or contract to the extent that it provides dividends or experience rating credits or provides that a fee or allowances be paid to an individual, including the policy or contract holder, in connection with the service to or administration of the policy or contract;
(vi) a policy or contract issued in the State by a member insurer at a time when it was not licensed or did not have a certificate of authority to issue the policy or contract in the State;
(vii) an annuity contract or group annuity certificate that is not issued to and owned by an individual policyholder, except to the extent of annuity benefits guaranteed to an individual policyholder by an insurer under the annuity contract or group certificate, including the following contracts:
1. unallocated funding agreements;
2. unallocated annuity contract benefits;
3. deposit administration contracts; or
4. guaranteed investment contract accounts;
(viii) a policy issued by an organization as provided in § 1-202(3) of this article; or
(ix) an annuity agreement issued under § 16-114 of this article.
[An. Code 1957, art. 48A, § 522; 1996, ch. 11.]