Code of Maryland Regulations
Title 31 - MARYLAND INSURANCE ADMINISTRATION
Subtitle 05 - ASSETS, LIABILITIES, RESERVES, AND INVESTMENTS OF INSURERS
Chapter 31.05.06 - Investments of Life Insurers and Property and Casualty Insurers in High Yield/High Risk Obligations
Section 31.05.06.06 - Private Placements

(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 prevailing at the time of the loan for securities of comparable terms and duration which are classified in an investment grade classification (for example, BBB or Baa or higher) by at least one of the accepted rating agencies;

(2) In the case of an interest-bearing obligation which also provides minor equity benefits to the lender, the interest rate charged is comparable to interest rates generally prevailing at the time of the loan for securities of comparable terms and duration which are classified in the third grade (for example, A) by at least one of the accepted rating agencies; or

(3) In the case of an interest-bearing obligation which also provides substantial equity benefits to the lender, the interest rate charged is comparable to interest rates generally prevailing at the time of the loan for securities of comparable terms and duration which are classified in the second grade (for example, AA) by at least one of the accepted rating agencies.