Current through Register Vol. 46, No. 12, March 20, 2024
(a)
Every separate account established pursuant to section
4240 of the Insurance Law, as amended,
shall be subject to the following provisions of this section:
(1) Except as may otherwise be permitted in
writing by the superintendent, every company shall maintain in each separate
account assets with a value at least equal to the reserves and other contract
liabilities with respect to such account.
(2) A separate account annuity contract may
provide, pursuant to section
4240(a)(12) of the
Insurance Law, that the portion of the assets of the separate account not
exceeding the reserves and other contract liabilities with respect to such
separate account shall not be chargeable with liabilities arising out of any
other business of the insurer.
(3)
No sale, exchange or other transfer of assets may be made by a company 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:
(i) by a transfer of cash;
or
(ii) by a transfer of securities
having a valuation which can be readily determined in the marketplace, provided
that such transfer of securities is approved by the superintendent.
The superintendent may authorize other transfers among such
accounts if, in his opinion, such transfers would not be inequitable.
(4) Notwithstanding the
restrictions and limitations on investments imposed by section
4240(a)(2) of the
Insurance Law or any other provision of law, the assets allocated to any
separate account may be invested in the securities of an investment company
subject to or registered pursuant to the Federal Investment Company Act of
1940, as amended, provided that:
(i) the
insurance company has satisfied the superintendent that such investment by the
separate account is not hazardous to the public or the policyholders of the
insurance company in this State;
(ii) the investments of such investment
company comply with the restrictions and limitations on investments by the
insurance company imposed by section
4240(a)(2) of the
Insurance Law and any other provisions of such law; and
(iii) if, subsequent to the purchase of the
securities of such investment company, its investments cease to comply fully
with the restrictions and limitations imposed by subparagraph (ii) of this
paragraph, then all separate accounts shall cease investing in the securities
of such investment company and existing separate account investments in the
securities of such investment company shall be recognized as admitted assets,
for the purposes of subdivision (a)(1) of this section, only to the extent that
they comply with subparagraph (ii) of this paragraph.
(5) Expenses shall be allocated to the
separate account business in accordance with the provisions of section
4240(a)(6) of the
Insurance Law and Part 91 (Regulation 33) of this Title.)
(6) Conflicts of interest rules under any
provision of the Insurance Law or any regulation promulgated thereunder which
are applicable to the offices or directors of insurance companies shall also
apply to the members of the committee, board or other similar body of every
separate account. No officer or director of any company maintaining a separate
account nor any member of the committee, board or other similar body of the
separate account shall receive, in addition to his fixed salary or
compensation, any commission, other compensation, money or valuable thing
either directly or indirectly, with respect to the purchase, sale or loan of
the assets of the separate account.
(7) A separate account annuity contract may
provide, as an incidental benefit, for the payment of a death benefit in the
event of death prior to the annuity commencement date. The amount of such death
benefit shall not exceed the greater of:
(i)
the accumulated value of the contract; or
(ii) the aggregate amount of stipulated
payments or employee contributions, whichever is applicable, made under the
contract prior to the time of death.
A reserve liability for any such incidental benefit in
excess of the accumulated value of the contract shall be accumulated and
maintained in the general account of the company and must be in compliance with
Part 99 of this Title. Any such death benefit provision which complies with the
requirements of this paragraph shall not be subject to the provisions of the
Insurance Law applicable to life insurance contracts. However, any other death
benefit provision during the deferred period shall be subject to such Insurance
Law provisions.
(8) A separate account annuity contract may
provide that, at the time the annuity becomes payable, the insurer may, at its
option, in lieu of commencing annuity payments, cancel the annuity and pay the
contractholder its accumulated value, if such accumulated value is less than
$2,000, or would provide an income the initial amount of which is less than $20
per month or if the amount of the annuity does not meet other minimum
requirements as approved in writing by the superintendent.