New York Codes, Rules and Regulations › Title 11 - INSURANCE › Chapter III - Policy and Certificate Provisions › Subchapter A - Life, Accident and Health Insurance › Part 50 - Separate Accounts and Separate Account Contracts › Section 50.3 - Separate accounts

Current through Register Vol. 46, No. 28, July 10, 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.