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