Title 16. Life Insurance and Annuities — Subtitle 5. Maryland Standard Nonforfeiture Law for Individual Deferred Annuities
Statutes in effect as of October 1, 2026.
Md. Code Ann., Ins. § 16-501 (2026)
Title 16. Life Insurance and Annuities
Subtitle 5. Maryland Standard Nonforfeiture Law for Individual Deferred Annuities
§ 16–501LinkCopy Citation
This subtitle does not apply to:
(1)
reinsurance;
(2)
a group annuity purchased under a retirement plan or deferred compensation plan established or maintained by an employer, including a partnership or sole proprietorship, or employee organization, or by both, other than a plan that provides individual retirement accounts or individual retirement annuities under § 408 of the Internal Revenue Code;
(3)
a premium deposit fund;
(4)
a variable annuity;
(5)
an investment annuity;
(6)
an immediate annuity;
(7)
a deferred annuity contract after annuity payments have begun;
(8)
a reversionary annuity; or
(9)
an annuity contract that is delivered outside the State through an insurance producer or other representative of the insurer issuing the contract.
Md. Code Ann., Ins. § 16-502 (2026)
Title 16. Life Insurance and Annuities
Subtitle 5. Maryland Standard Nonforfeiture Law for Individual Deferred Annuities
§ 16–502LinkCopy Citation
The operative date of this subtitle is:
(1)
a date from July 2, 1980, to June 30, 1982, both inclusive, as specified by the insurer if the insurer filed with the Commissioner written notice of an election to comply with this subtitle on a date before July 1, 1982; or
(2)
July 1, 1982.
Md. Code Ann., Ins. § 16-503 (2026)
Title 16. Life Insurance and Annuities
Subtitle 5. Maryland Standard Nonforfeiture Law for Individual Deferred Annuities
§ 16–503LinkCopy Citation
(a)
An annuity contract may not be delivered or issued for delivery in the State on or after the operative date of this subtitle unless the annuity contract contains:
(1)
each applicable provision of subsections (b) through (g) of this section; or
(2)
corresponding provisions that the Commissioner believes are at least as favorable to the contract holder after payment of considerations under the annuity contract stops.
(b)
Each annuity contract shall contain a provision that when payment of considerations under the annuity contract stops or on the written request of the contract owner, the insurer will grant a paid-up annuity benefit on a plan stipulated in the annuity contract in compliance with §§ 16-505 through 16-509 of this subtitle.
(c)
(1)
Each annuity contract shall contain a provision that if the annuity contract provides for a lump-sum settlement at maturity or at any other time, on surrender of the annuity contract on or before the start of annuity payments, the insurer will pay a cash surrender benefit in accordance with §§ 16-505, 16-506, 16-508, and 16-509 of this subtitle instead of a paid-up annuity benefit.
(2)
(i)
The annuity contract may state that the insurer shall reserve the right to defer the payment of the cash surrender value for up to 6 months after demand for payment with surrender of the annuity contract.
(ii)
(1)
Before making a deferment under subparagraph (i) of this paragraph, the insurer shall make a written request to the Commissioner to make the deferment under subparagraph (i) of this paragraph.
(2)
The request under subsubparagraph 1 of this subparagraph shall address the necessity of the deferral and the equitability to all policyholders of the deferral.
(iii)
After receiving written approval from the Commissioner on the request made under subparagraph (ii)1 of this paragraph, the insurer may defer the payment of the cash surrender value.
(d)
Each annuity contract shall contain a statement of any mortality table and interest rates used to calculate any minimum paid-up annuity, cash surrender, or death benefits, guaranteed by the annuity contract and shall provide sufficient information to determine the benefit amounts.
(e)
(1)
Each annuity contract shall contain a statement that any paid-up annuity, cash surrender, or death benefits available under the annuity contract are not less than the minimum benefits required under this article.
(2)
Each annuity contract shall contain an explanation of how benefits are altered due to any additional amount that the insurer credits to the annuity contract, any indebtedness to the insurer on the annuity contract, and any prior withdrawal from or partial surrender of the annuity contract.
(f)
If an annuity contract does not provide cash surrender benefits or does not provide death benefits that equal at least the minimum nonforfeiture amount before the start of annuity payments, the annuity contract shall contain a provision that so states in a prominent place in the annuity contract.
(g)
(1)
Notwithstanding the requirements of this section, a deferred annuity contract may contain a provision that the insurer may terminate the contract by making a single payment calculated under paragraph (2) of this subsection if:
(i)
no considerations have been received under the contract for 2 years; and
(ii)
the part of the paid-up annuity benefit at maturity under the contract that is available from the considerations paid before termination would be less than $20 per month.
(2)
The payment shall equal the present value of the part of the paid-up annuity benefit available under the contract, calculated as of the date of termination, based on any mortality table and interest rate specified in the contract for determining the paid-up annuity benefit.
(3)
A payment by an insurer under this section shall relieve the insurer of any further obligation under the deferred annuity contract.
Md. Code Ann., Ins. § 16-504 (2026)
Title 16. Life Insurance and Annuities
Subtitle 5. Maryland Standard Nonforfeiture Law for Individual Deferred Annuities
§ 16–504LinkCopy Citation
(a)
The minimum values specified under §§ 16–505 through 16–509 of this subtitle of any paid–up annuity, cash surrender, or death benefits under an annuity contract shall be based on minimum nonforfeiture amounts calculated under this section.
(b)
(1)
At any time before or at the start of any annuity payments, the minimum nonforfeiture amount under an annuity contract shall equal the remainder of:
(i)
the accumulation until that time, of the net considerations paid prior to that time, at an interest rate determined under subsection (c) of this section; less
(ii)
the sum of:
(1)
any withdrawal from or partial surrender of the contract accumulated at the interest rate determined under subsection (c) of this section;
(2)
an annual contract charge of $50 accumulated at the interest rate determined under subsection (c) of this section;
(3)
any premium tax actually paid by the company for the contract, not to include a premium tax credited back to the company, accumulated at the interest rate determined under subsection (c) of this section; and
(4)
any indebtedness to the insurer on the contract, including interest due and accrued.
(2)
The net considerations for a given contract year used to calculate the minimum nonforfeiture amount shall equal 87.5% of the gross considerations credited to the contract during that contract year.
(c)
(1)
The interest rate used to determine the minimum nonforfeiture amounts under subsection (b) of this section shall be an annual rate of interest that is equal to the lesser of:
(i)
3% per year; or
(ii)
the 5–year constant maturity treasury rate reported by the Federal Reserve Board.
(2)
The 5–year constant maturity treasury rate under paragraph (1)(ii) of this subsection shall be:
(i)
(1)
as of a date not more than 15 months before either the contract issue date or redetermination date; or
(2)
averaged over a period of not more than 15 months before the contract issue date or redetermination date; and
(ii)
rounded to the nearest one–twentieth of 1% and then reduced by 125 basis points.
(3)
The interest rate calculated under paragraphs (1) and (2) of this subsection may not be less than 0.15%.
(4)
(i)
The interest rate calculated under paragraphs (1) and (2) of this subsection:
(1)
shall apply to the initial contract period; and
(2)
may be redetermined for additional periods.
(ii)
The contract shall state:
(1)
whether the interest rate will be redetermined; and
(2)
the interest rate redetermination date, basis, and period, if any.
(d)
(1)
During the period that a contract provides for substantive participation in an equity index benefit, the insurer may increase the 125 basis points under subsection (c)(2)(ii) of this section up to an additional 100 basis points to reflect the value of the equity index benefit.
(2)
On the issue date of the contract, and on each redetermination date, the present value of the additional reduction may not exceed the market value of the equity index benefit.
(3)
(i)
The Commissioner may require the insurer to demonstrate that the present value of the additional reduction does not exceed the market value of the equity index benefit.
(ii)
If the Commissioner finds that the demonstration under subparagraph (i) of this paragraph is inadequate, the Commissioner may disallow or limit the additional reduction.
(e)
(1)
The Commissioner may adopt regulations to implement the provisions of this section.
(2)
The regulations under paragraph (1) of this subsection may provide for:
(i)
adjustments to the calculation of the minimum nonforfeiture amount for contracts that provide substantive participation in an equity index benefit; and
(ii)
adjustments for other contracts as determined by the Commissioner.
Md. Code Ann., Ins. § 16-505 (2026)
Title 16. Life Insurance and Annuities
Subtitle 5. Maryland Standard Nonforfeiture Law for Individual Deferred Annuities
§ 16–505LinkCopy Citation
(a)
Any paid-up annuity benefit available under an annuity contract shall be:
(1)
the present value of the annuity benefit on the date annuity payments are to begin; and
(2)
at least the minimum nonforfeiture amount on that date.
(b)
The present value shall be calculated using any mortality table and the interest rate specified in the annuity contract to determine minimum paid-up annuity benefits guaranteed in the contract.
Md. Code Ann., Ins. § 16-506 (2026)
Title 16. Life Insurance and Annuities
Subtitle 5. Maryland Standard Nonforfeiture Law for Individual Deferred Annuities
§ 16–506LinkCopy Citation
(a)
This section applies only to annuity contracts that provide cash surrender benefits.
(b)
Cash surrender benefits available before maturity under an annuity contract may not be less than the remainder of:
(1)
the present value as of the surrender date of the part of the maturity value of the paid-up annuity benefit that would be provided at maturity from considerations paid before the surrender date and any existing additional amount credited by the insurer to the contract; less
(2)
the appropriate amount that reflects prior withdrawals from or partial surrenders of the contract and any indebtedness to the insurer on the contract, including interest due and accrued.
(c)
The present value under subsection (b)(1) of this section shall be calculated using an interest rate not more than 1% higher than the interest rate specified in the contract for accumulating net considerations to determine the maturity value.
(d)
(1)
A cash surrender benefit may not be less than the minimum nonforfeiture amount at the time of surrender.
(2)
A death benefit under a contract subject to this section shall equal at least the cash surrender benefit.
Md. Code Ann., Ins. § 16-507 (2026)
Title 16. Life Insurance and Annuities
Subtitle 5. Maryland Standard Nonforfeiture Law for Individual Deferred Annuities
§ 16–507LinkCopy Citation
(a)
This section applies only to annuity contracts that do not provide cash surrender benefits.
(b)
The present value of a paid-up annuity benefit available as a nonforfeiture option before maturity may not be less than the sum of:
(1)
the present value of that part of the maturity value of the paid-up annuity benefit under the annuity contract from considerations paid before the contract is surrendered for or changed to a deferred paid-up annuity; and
(2)
any existing additional amount credited by the insurer to the contract.
(c)
(1)
The present value under subsection (b)(1) of this section shall be calculated for the period before the maturity date using an interest rate specified in the annuity for accumulating the net considerations to determine the maturity value.
(2)
If the contract does not provide a death benefit before the start of annuity payments, the present value shall be calculated using the interest rate and mortality table specified in the contract for determining the maturity value of the paid-up annuity benefit.
(d)
The present value of a paid-up annuity benefit may not be less than the minimum nonforfeiture amount at the time of surrender.
Md. Code Ann., Ins. § 16-508 (2026)
Title 16. Life Insurance and Annuities
Subtitle 5. Maryland Standard Nonforfeiture Law for Individual Deferred Annuities
§ 16–508LinkCopy Citation
(a)
This section applies to a determination of the benefits calculated under § 16-506 or § 16-507 of this subtitle for an annuity contract that allows an election to have annuity payments begin at optional maturity dates.
(b)
The maturity date of an annuity contract described in subsection (a) of this section shall be deemed to be the latest date for which an election is allowed under the contract, but may not be later than the later of the contract anniversary immediately following the annuitant’s 70th birthday or the tenth anniversary of the contract.
Md. Code Ann., Ins. § 16-509 (2026)
Title 16. Life Insurance and Annuities
Subtitle 5. Maryland Standard Nonforfeiture Law for Individual Deferred Annuities
§ 16–509LinkCopy Citation
(a)
Any paid-up annuity, cash surrender, or death benefits available at any time other than on a contract anniversary under an annuity contract with fixed scheduled considerations shall be calculated with an allowance for the lapse of time and the payment of any scheduled considerations after the start of the contract year in which payment of considerations stops.
(b)
(1)
This subsection applies only to an annuity contract that provides by rider or supplemental contract provision both annuity benefits and life insurance benefits that exceed the greater of:
(i)
the cash surrender benefits; or
(ii)
a return of the gross considerations with interest.
(2)
The minimum nonforfeiture benefits shall:
(i)
be calculated separately as if the annuity benefits and life insurance benefits were provided under separate contracts; and
(ii)
equal the sum of:
(1)
the minimum nonforfeiture benefits for the annuity part of the contract; and
(2)
the minimum nonforfeiture benefits for the life insurance part of the contract.
(c)
Notwithstanding this section and §§ 16-505 through 16-508 of this subtitle, the following supplemental benefits and considerations for the benefits shall be disregarded when calculating the minimum nonforfeiture amounts, paid-up annuity, cash surrender, and death benefits required under this subtitle:
(1)
benefits payable for total and permanent disability;
(2)
benefits payable as reversionary annuity or deferred reversionary annuity benefits; or
(3)
other policy benefits additional to life insurance, endowment, and annuity benefits.
(d)
Additional benefits under subsection (c) of this section need not be included in any paid-up benefits unless the additional benefits separately would require minimum nonforfeiture amounts, paid-up annuity, cash surrender, and death benefits.
Md. Code Ann., Ins. § 16-510 (2026)
Title 16. Life Insurance and Annuities
Subtitle 5. Maryland Standard Nonforfeiture Law for Individual Deferred Annuities
§ 16–510LinkCopy Citation
This subtitle is the Maryland Standard Nonforfeiture Law for Individual Deferred Annuities and shall be interpreted in a manner consistent with the Standard Nonforfeiture Model Law for Individual Deferred Annuities published by the National Association of Insurance Commissioners.