§ 3855. Establishment of accounts
(a) A domestic life insurer may establish one or more separate accounts and may allocate
thereto amounts, including proceeds applied under optional modes of settlement or
under dividend options, to provide for life insurance or annuities, and benefits incidental
thereto, payable in fixed or variable amounts, or both, subject to the following:
(1) The income, gains, and losses, realized or unrealized, from assets allocated to a
separate account shall be credited to or charged against the account, without regard
to other income, gains or losses of the company.
(2) Except as may be provided with respect to reserves for guaranteed benefits and funds
referred to in subdivision (3) of this subsection:
(A) amounts allocated to any separate account and accumulations thereon may be invested
and reinvested without regard to any requirements or limitations prescribed by the
laws of this State governing the investments of domestic insurers;
(B) the investments in such separate account or accounts may not be taken into account
in applying the investment limitations otherwise applicable to the investments of
the company; and
(C) uniform investment policies shall not be required for each of the separate accounts
established by a life insurer.
(3) Except with the approval of the Commissioner and under such conditions as to investments
and other matters as he or she may prescribe, which shall recognize the guaranteed
nature of the benefits provided, reserves for benefits guaranteed as to dollar amount
and duration and funds guaranteed as to principal amount or stated rate of interest
may not be maintained in a separate account.
(4) Unless otherwise approved by the Commissioner, assets allocated to a separate account
shall be valued at their market value on the date of valuation or, if there is no
readily available market, then as provided under the terms of the contract or the
rules or other written agreement applicable to such separate account, provided, that
unless otherwise approved by the Commissioner, the portion of any of the assets of
such separate account equal to the insurer’s reserve liability with regard to the
guaranteed benefits and funds referred to in subdivision (3) of this subsection shall
be valued in accordance with the rules otherwise applicable to the insurer’s assets.
(5) Amounts allocated to a separate account in the exercise of the power granted by this
subchapter are owned by the insurer, and the insurer may not be, nor hold itself out
to be, a trustee with respect to such amounts, if and to the extent so provided under
the applicable contracts, that portion of the assets of any such separate account
equal to the reserves and other contract liabilities with respect to such account
shall not be chargeable with liabilities arising out of any other business the insurer
may conduct.
(6) No sale, exchange, or other transfer of assets may be made by such insurer between
any of its separate accounts or between any other investment account and one or more
of its separate accounts unless, in case of a transfer into a separate account, such
transfer is made solely to establish the account or to support the operation of the
contracts with respect to the separate account to which the transfer is made, and
unless such transfer, whether into or from a separate account is made by a transfer
of cash, or by a transfer of securities having a readily determinable market value,
provided that such transfer of securities is approved by the Commissioner. The Commissioner
may approve other transfers among such accounts if, in his or her opinion, such transfers
would not be inequitable.
(7) To the extent such insurer deems it necessary to comply with any applicable federal
or state laws, such insurer, with respect to any separate account, including any
separate account that is a management investment company or a unit investment trust,
may provide for persons having an interest therein appropriate voting and other rights
and special procedures for the conduct of the business of such account, including
special rights and procedures relating to investment policy, investment advisory services,
selection of independent public accountants, and the selection of a committee, the
members of which need not be otherwise affiliated with such company, to manage the
business of such account.
(b) The corporate charter of every domestic life insurance company is deemed amended to
authorize it to do anything that is herein provided. (Added 1971, No. 106, § 1, eff. April 22, 1971.)