State Codes and Statutes
Statutes > Utah > Title-31a > Chapter-05 > 31a-5-21731A-5-217. Separate accounts for variable contracts.
(1) Separate accounts under this section may be designated by any appropriate name thecorporation wishes to use, except that the commissioner may by rule provide guidelines for thenaming of separate accounts.
(2) With the approval of the commissioner, any corporation may establish, or at thedirection of the commissioner shall establish, one or more separate accounts and allocate to themany amounts paid or remitted to, or held by, the corporation under designated contracts or classesof contracts. These amounts are to be applied to provide benefits payable partly or wholly invariable dollar amounts, and to provide benefits in fixed and guaranteed dollar amounts and otherincidental benefits.
(3) To the extent necessary to comply with the federal Investment Company Act of 1940,15 U.S.C. Sec. 80a-1 et seq., or its interpretive rules, the corporation may:
(a) adopt special procedures for the conduct of the business and affairs of a separateaccount; and
(b) for persons having beneficial interests in a separate account, provide special votingand other rights, including special rights and procedures relating to investment policy, investmentadvisory services, selection of certified public accountants, and selection of a committee, themembers of which need not be otherwise affiliated with the corporation, to manage the businessand affairs of the account.
(4) The commissioner may specify in the certificate of authority of a newly organizedcorporation the minimum required capital or the minimum required permanent surplus to beprovided for each separate account. If a separate account is established after a certificate ofauthority has been issued, the commissioner shall require the corporation to allocate an adequateamount of capital and surplus to the separate account. An insurer may not be required to allocatemore capital and surplus to a separate account than would be required of a separate insurer underSection 31A-5-211 and Chapter 17, Part 6, Risk-Based Capital.
(5) The income and assets attributable to a separate account shall always remainidentified with the particular account, but unless the commissioner so orders, the assets need notbe kept physically separate from other assets of the corporation. The income and gains andlosses, whether or not realized, from assets attributable to a separate account shall be credited toor charged against the account without regard to other income, gains, or losses of the corporation.
(6) Except as provided in Subsection (7), liabilities arising out of any other business ofthe corporation are not to be allocated to a separate account, nor are any liabilities arising out of aseparate account to be allocated to any other account of the corporation, except as provided inSubsection (11).
(7) (a) Each separate account shall be considered as an insurer within the meaning ofSubsection 31A-27a-102(23).
(b) A liquidation order under Section 31A-27a-401 for the general account or for anyseparate account shall have effect as a rehabilitation order under Section 31A-27a-301 for allother accounts of the corporation. Claims remaining unpaid after completion of the liquidationunder Chapter 27a, Insurer Receivership Act, shall be liens on the interests of shareholders, ifany, but not on any other interests, in all of the corporation's assets that are not liquidated. Therehabilitator may transform these liens into ownership interests under Section 31A-27a-302.
(8) Assets in excess of the liabilities allocated to separate accounts are the property of thecorporation.
(9) A corporation may own a particular asset in determinate proportions for separateaccounts, for its general account, or as a trustee when acting as such within its legal powers.
(10) The corporation may by an identifiable act transfer assets among the separateaccounts, the general account, and any trust accounts of the corporation, for fair consideration asdefined in Section 31A-27a-102.
(11) The general account of the corporation, or any separate account, may, for a fairconsideration as defined in Section 31A-27a-102, provide guarantees in connection with, performservices for, or reinsure other accounts, subject to rules adopted by the commissioner. Thedetermination of a fair consideration shall be made by applying generally accepted accountingprinciples and realistic actuarial tables.
(12) Section 31A-18-102 deals with separate account investments. Section 31A-20-106requires the commissioner's approval before delivery of certain variable contracts. Section31A-22-411 and Subsection 31A-21-301(1)(d) deal with policy provisions in separate accountcontracts.
Amended by Chapter 309, 2007 General Session
