Sec. 38a-433. (Formerly Sec. 38-154a). Life insurance or annuities payable in fixed or variable amounts. Accumulation of funds pursuant to funding agreements.
Sec. 38a-433. (Formerly Sec. 38-154a). Life insurance or annuities payable in
fixed or variable amounts. Accumulation of funds pursuant to funding agreements.
(a) A domestic life insurance company, including for the purposes of this section all
domestic fraternal benefit societies which operate on a legal reserve basis, may establish
one or more separate accounts and may allocate thereto amounts, including without
limitation proceeds applied under optional modes of settlement or under dividend options, to provide for life insurance or life or period-certain annuities, and benefits incidental thereto, payable in fixed or variable amounts or both, or to accumulate funds
which are paid to or held by such company pursuant to section 38a-459, subject to the
following: (i) 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; (ii) except as may be provided with
respect to reserves for guaranteed benefits and funds referred to in subdivision (iii)
hereof, amounts allocated to any separate account and accumulations thereon may be
invested and reinvested in any class of loans and investments, and such loans and investments shall not be included in applying the limitations provided in sections 38a-102 to
38a-102h, inclusive; (iii) except with the approval of the commissioner and under such
conditions as to investments and other matters as he may prescribe, which shall recognize
the guaranteed nature of the benefits provided, reserves for (1) benefits guaranteed as
to dollar amount and duration and (2) funds guaranteed as to principal amount or stated
rate of interest shall not be maintained in a separate account; (iv) 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, if any, of the assets of such separate account equal to the
company's reserve liability with regard to the guaranteed benefits and funds referred
to in subdivision (iii) hereof, shall be valued in accordance with the rules otherwise
applicable to the company's assets; (v) amounts allocated to a separate account in the
exercise of the power granted by this section shall be owned by the company, and the
company shall 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 company may conduct; (vi) 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 (1)
by a transfer of cash, or (2) 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 opinion,
such transfers would not be inequitable; (vii) to the extent such company deems it necessary to comply with any applicable federal or state laws, such company, with respect
to any separate account, including without limitation any separate account which is a
management investment account or a unit investment trust, may provide for persons
having an interest therein appropriate voting and other rights and special procedures for
the conduct or the business of such account, including without limitation 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. The provisions of this subsection shall apply notwithstanding any inconsistent provision in the charter of any such domestic life insurance company or in the
general statutes.
(b) Any contract providing benefits payable in variable amounts delivered or issued
for delivery in this state shall contain a statement of the essential features of the procedures to be followed by the insurance company in determining the dollar amount of such
variable benefits. Any such contract under which the benefits vary to reflect investment
experience, including a group contract and any certificate in evidence of variable benefits
issued thereunder, shall state that such dollar amount will so vary and shall contain on
its first page a statement to the effect that the benefits thereunder are on a variable basis.
(c) Except to the extent permitted under section 38a-459, no domestic, foreign or
alien insurance company or fraternal benefit society shall deliver or issue for delivery
in this state any such contracts or annuities until the Insurance Commissioner licenses
it to do so. Such annuities or other contracts and the sale thereof, and such insurance
companies, shall be subject to the exclusive regulatory authority of the Insurance Commissioner and shall not be subject to The Connecticut Securities Act.
(d) Except for sections 38a-78 and 38a-440 in the case of a variable annuity contract
and section 38a-78 in the case of a variable life insurance policy and except as otherwise
provided herein, all pertinent provisions of sections 38a-61, 38a-77, 38a-78, 38a-81,
38a-82, 38a-284, 38a-287, 38a-430 to 38a-454, inclusive, and 38a-458 and, with respect
to fraternal benefit societies, sections 38a-595 to 38a-626, inclusive, 38a-631 to 38a-640, inclusive, and 38a-800, shall apply to separate accounts and contracts relating
thereto. The reserve liability for variable contracts shall be established in accordance
with actuarial procedures that recognize the variable nature of the benefits provided and
any mortality guarantees.
(e) The commissioner shall have power to enforce the provisions of this section,
and may adopt, in accordance with the provisions of chapter 54, such regulations as he
deems necessary for that purpose, covering, but not limited to, the form of life insurance
or annuity contracts providing for benefits payable in fixed or variable amounts by
domestic life insurance companies or domestic fraternal benefit societies operating on
a legal reserve basis; separation of the assets of contract accounts; accounting of the
income, gains and losses of contract accounts; distribution of the proceeds of accounts;
sale, exchange or transfer of assets between accounts; guaranteed benefits; investment
and reinvestment of contract or account assets, loans or investments; reserve liabilities;
valuation of account assets; voting and other rights and special procedures affecting
accounts, including investment policy, advisory services and the management, generally, of accounts.
(1967, P.A. 529, S. 1; 1971, P.A. 509; P.A. 75-25, S. 1, 2; P.A. 77-614, S. 163, 610; P.A. 78-312, S. 7; P.A. 80-482,
S. 297, 348; P.A. 83-208, S. 2, 3; P.A. 93-239, S. 13; P.A. 96-227, S. 8.)
History: 1971 act rewrote provisions in greater detail, clearly distinguishing between insurance, annuities, etc. payable
in fixed amounts and those paid in variable amounts; P.A. 75-25 added Subsec. (e); 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. 78-312 expanded exception to limit applicability with respect to Secs. 38-130d and 38-130e in Subsec. (d); 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 specifically provide that a domestic life insurance
company may provide life or period-certain annuities, or may accumulate funds pursuant to any funding agreement under
Sec. 38-33a; Sec. 38-154a transferred to Sec. 38a-433 in 1991; (Revisor's note: In 1993 obsolete references in Subsec. (d)
to repealed Secs. 38a-94 to 38a-101, inclusive, and 38a-966 to 38a-970, inclusive, were deleted editorially by the Revisors);
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. 96-227 amended Subsec. (c) to replace "other insurance company" with "foreign or alien
insurance company or fraternal benefit society".