§ 38a-459 — (Formerly Sec. 38-33a). Funding agreements by domestic life insurance companies. Establishment of companies' obligations. Segregation of moneys.

Connecticut § 38a-459

• Jurisdiction: Connecticut
• Title 38a: Insurance
• Ch. 700b: Life Insurance, Annuities, Burial Contracts and Life Settlements

Text

(a) Notwithstanding any inconsistent provision in its charter, any domestic life insurance company may enter into written agreements (1) to fund benefits under any employee benefit plan as defined in the Employee Retirement Income Security Act of 1974, as amended from time to time, or any similar plan maintained in a foreign country, (2) to fund the activities of any organization exempt from taxation under Section 501(c) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, or of any similar organization in any foreign country, (3) to fund any program of the government of the United States, the government of any state, foreign country or political subdivision thereof, or any agency or instrumentality thereof, (4) to fund any agreement providing for periodic payments in satisfaction of a claim, or (5) to fund any program of an institution which has assets in excess of twenty-five million dollars. Under such agreements, the company's obligations may be established by reference to (A) amounts deposited with the company and allocated to such company's general account or to one or more separate accounts in accordance with subsection (b) or (c) of this section or pursuant to section 38a-433, or (B) an asset portfolio that is not owned or possessed by such company. The issuance or delivery of a funding agreement in this state shall constitute doing an insurance business in this state. (b) After adoption of a resolution by its board of directors and certification thereof to the Insurance Commissioner, any amounts which are paid to or held by such company in accordance with the terms of such written agreements may be allocated to one or more separate accounts. In connection with such separate accounts any such company may issue, subject to the terms of such written agreement, individual or group policies or contracts with benefits payable in fixed or variable amounts. The income, if any, and gains or losses, realized or unrealized, on each such account may be credited to or charged against the amount allocated to such account in accordance with such agreement, without regard to the other income, gains or losses of the company. Notwithstanding any inconsistent provision in its charter or in any section of the general statutes, the amounts allocated to such accounts and accumulations thereon may be invested and reinvested in any class of loans and investments specified in such agreement, and such loans and investments shall not be included in applying the limitations provided in sections 38a-102 to 38a-102h , inclusive. Amounts allocated by an insurance company to separate accounts in the exercise of the power granted by this section shall be owned by the company, and the company shall not be, or hold itself out to be, a trustee in respect to such amounts, except that such amounts shall not be chargeable with liabilities arising out of any other business the company may conduct. (c) Reserves for fixed retirement benefits, or other benefits incidental thereto, in the course of payment, may be maintained in a separate account with the approval of the Insurance Commissioner and under such conditions as he may prescribe, except that any such reserves which are attributable to contributions by a self-employed individual on his own behalf, or to contributions subject to Section 403(b) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, shall not be maintained in a separate account.

Legislative History

(1959, P.A. 317, S. 1; February, 1965, P.A. 515, S. 1; 1967, P.A. 530, S. 1; 1969, P.A. 465; P.A. 77-614, S. 163, 610; P.A. 80-482, S. 273, 348; P.A. 83-208, S. 1, 3; P.A. 85-125; P.A. 89-211, S. 43; P.A. 93-239, S. 14; P.A. 97-108, S. 2.) History: 1965 act authorized issuance of policies with benefits payable in both fixed and variable amounts and amended provisions where necessary to distinguish between the two types; 1967 act deleted exemption to provisions for “amounts contributed by a participant who is entitled to retirement benefits, or benefits incidental thereto, under such a pension, retirement or profit-sharing plan” in Subsec. (b); 1969 act deleted proviso in Subsec. (a) which required that plan must cover twenty-five or more individuals at time of agreement if benefits are to be payable in variable amounts and specified that separate accounts are not chargeable with liabilities arising from company's other business and entirely replaced Subsec. (b) which had exempted amounts applied to purchase of fixed retirement benefits and other incidental benefits from provisions of section; P.A. 77-614 placed insurance commissioner within the department of business regulation and made insurance department a division within that department, effective January 1, 1979; P.A. 80-482 restored insurance commissioner and division to prior independent status and abolished the department of business regulation; P.A. 83-208 amended Subsec. (a) to provide that any domestic life insurance company may enter into written agreements to fund benefits under any employee benefit plan, fund the activities of tax-exempt organizations, or fund any governmental program, deleting less specific provisions; P.A. 85-125 divided former Subsec. (a) into Subsecs. (a) and (b), relettering Subsec. (c) accordingly, authorized insurance companies to fund agreements providing for periodic payments in satisfying a claim and to fund programs of institutions having assets of more than $25,000,000, allowed companies to allocate funds from agreements to their general accounts and stated that issuance or delivery of agreements in this state constitutes doing an insurance business; P.A. 89-211 clarified references to the Internal Revenue Code of 1986; Sec. 38-33a transferred to Sec. 38a-459 in 1991; P.A. 93-239 made technical corrections for statutory consistency and substituted “sections 38a-102 to 38a-102h, inclusive” for “section 38a-95”; P.A. 97-108 amended Subsec. (a) to add Subparas. (A) and (B) re establishing a company's obligations and to make technical changes.