(a)The protected cell assets of any protected cell may not be charged with liabilities arising out of any other business the protected cell company may conduct. All contracts or other documentation reflecting protected cell liabilities shall clearly indicate that only the protected cell assets are available for the satisfaction of those protected cell liabilities.
(b)The income, gains, and losses, realized or unrealized, from protected cell assets and protected cell liabilities must be credited to or charged against the protected cell without regard to other income, gains, or losses of the protected cell company, including income, gains, or losses of other protected cells. Amounts attributed to a protected cell and accumulations thereon may be invested and reinvested without regard to an
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(a) The protected cell assets of any protected cell may not be charged with liabilities arising out of any other business the protected cell company may conduct. All contracts or other documentation reflecting protected cell liabilities shall clearly indicate that only the protected cell assets are available for the satisfaction of those protected cell liabilities. (b) The income, gains, and losses, realized or unrealized, from protected cell assets and protected cell liabilities must be credited to or charged against the protected cell without regard to other income, gains, or losses of the protected cell company, including income, gains, or losses of other protected cells. Amounts attributed to a protected cell and accumulations thereon may be invested and reinvested without regard to any requirements or limitations of Article VIII of this Code (Investments of Domestic Companies), and the investments in a protected cell or cells may not be taken into account in applying the investment limitations otherwise applicable to the investments of the protected cell company. (c) Assets attributed to a protected cell must be valued at their market value on the date of valuation, or if there is no readily available market, then as provided in the contract or the rules or other written documentation applicable to the protected cell. (d) A protected cell company shall, in respect of any of its protected cells, engage in fully funded indemnity-triggered insurance securitization to support in full the protected cell exposures attributable to that protected cell. A protected cell company insurance securitization that is not indemnity-triggered may qualify as an insurance securitization under the terms of this Article only after the Director adopts rules addressing the methods of:(i) funding of the portion of the risk that is not indemnity based, (ii) accounting, and disclosure, (iii) risk-based capital treatment, and (iv) assessing risk associated with such securitizations. A protected cell company insurance securitization that is not fully funded, whether indemnity triggered or non-indemnity triggered, is prohibited. Protected cell assets may be used to pay interest or other consideration on any outstanding debt or other obligation attributable to that protected cell, and nothing in this subsection shall be construed or interpreted to prevent a protected cell company from entering into a swap agreement or other transaction for the account of the protected cell that has the effect of guaranteeing such interest or other consideration. (e) In all protected cell company insurance securitizations, the contracts or other documentation effecting such transaction shall contain provisions identifying the protected cell to which the transaction will be attributed. In addition, the contracts or other documentation shall clearly disclose that the assets of that protected cell, and only those assets, are available to pay the obligations of that protected cell. Notwithstanding the foregoing, and subject to the provisions of this Article and any other applicable law or rule, the failure to include such language in the contracts or other documentation shall not be used as the sole basis by creditors, reinsurers, or other claimants to circumvent the provisions of this Article. (f) A protected cell company may attribute to a protected cell account only the insurance obligations relating to the protected cell company's general account. A protected cell may not issue insurance or reinsurance contracts directly to policyholders or reinsureds or have any obligation to the policyholders or reinsureds of the protected cell company's general account. (g) At the cessation of business of a protected cell, the protected cell company shall voluntarily close out the protected cell account in accordance with a plan approved by the Director.