Utah Code 31A-5-217.5. Variable contract law
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(1) This section applies to a separate account that is used to support one or more of the following:
Terms Used In Utah Code 31A-5-217.5
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Annuity: means an agreement to make periodical payments for a period certain or over the lifetime of one or more individuals if the making or continuance of all or some of the series of the payments, or the amount of the payment, is dependent upon the continuance of human life. See Utah Code 31A-1-301
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Contract: A legal written agreement that becomes binding when signed.
- Employee: means :(57)(a) an individual employed by an employer; or(57)(b) an individual who meets the requirements of Subsection (55)(b). See Utah Code 31A-1-301
- Equal: means , with respect to biological sex, of the same value. See Utah Code 68-3-12.5
- Insurance: includes :
(96)(b)(i) a risk distributing arrangement providing for compensation or replacement for damages or loss through the provision of a service or a benefit in kind;(96)(b)(ii) a contract of guaranty or suretyship entered into by the guarantor or surety as a business and not as merely incidental to a business transaction; and(96)(b)(iii) a plan in which the risk does not rest upon the person who makes an arrangement, but with a class of persons who have agreed to share the risk. See Utah Code 31A-1-301- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Life insurance: means :
(114)(a)(i) insurance on a human life; and(114)(a)(ii) insurance pertaining to or connected with human life. See Utah Code 31A-1-301- Person: includes :
(146)(a) an individual;(146)(b) a partnership;(146)(c) a corporation;(146)(d) an incorporated or unincorporated association;(146)(e) a joint stock company;(146)(f) a trust;(146)(g) a limited liability company;(146)(h) a reciprocal;(146)(i) a syndicate; or(146)(j) another similar entity or combination of entities acting in concert. See Utah Code 31A-1-301- Policy: includes a service contract issued by:
(150)(b)(i) a motor club under Chapter 11, Motor Clubs;(150)(b)(ii) a service contract provided under Chapter 6a, Service Contracts; and(150)(b)(iii) a corporation licensed under:(150)(b)(iii)(A) Chapter 7, Nonprofit Health Service Insurance Corporations; or(150)(b)(iii)(B) Chapter 8, Health Maintenance Organizations and Limited Health Plans. See Utah Code 31A-1-301- Rate: means :
(163)(a)(i) the cost of a given unit of insurance; or(163)(a)(ii) for property or casualty insurance, that cost of insurance per exposure unit either expressed as:(163)(a)(ii)(A) a single number; or(163)(a)(ii)(B) a pure premium rate, adjusted before the application of individual risk variations based on loss or expense considerations to account for the treatment of:(163)(a)(ii)(B)(I) expenses;(163)(a)(ii)(B)(II) profit; and(163)(a)(ii)(B)(III) individual insurer variation in loss experience. See Utah Code 31A-1-301- Security: means a:
(176)(a)(i) note;(176)(a)(ii) stock;(176)(a)(iii) bond;(176)(a)(iv) debenture;(176)(a)(v) evidence of indebtedness;(176)(a)(vi) certificate of interest or participation in a profit-sharing agreement;(176)(a)(vii) collateral-trust certificate;(176)(a)(viii) preorganization certificate or subscription;(176)(a)(ix) transferable share;(176)(a)(x) investment contract;(176)(a)(xi) voting trust certificate;(176)(a)(xii) certificate of deposit for a security;(176)(a)(xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in payments out of production under such a title or lease;(176)(a)(xiv) commodity contract or commodity option;(176)(a)(xv) certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed in Subsections (176)(a)(i) through (xiv); or(176)(a)(xvi) another interest or instrument commonly known as a security. See Utah Code 31A-1-301- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- State: when applied to the different parts of the United States, includes a state, district, or territory of the United States. See Utah Code 68-3-12.5
(1)(a) a variable life insurance policy that satisfies the requirements of Section 817, Internal Revenue Code;(1)(b) a variable annuity policy, including a modified guaranteed annuity; or(1)(c) benefits under a plan governed by the Employee Retirement Income Security Act of 1974.(2) If there is a conflict between this section and another section of this title as it relates to a separate account described in Subsection (1), this section prevails.(3)(3)(a) Subject to the other provisions of this Subsection (3), a domestic life insurer may:(3)(a)(i) establish one or more separate accounts; and(3)(a)(ii) allocate to those separate accounts amounts, which include:(3)(a)(ii)(A) proceeds applied under optional modes of settlement or under dividend options, to provide for life insurance or annuities; and(3)(a)(ii)(B) benefits incidental to life insurance or annuities, payable in fixed, variable, or both fixed and variable amounts.(3)(b) An insurer shall credit to or charge against a separate account the income, gains, and losses, realized or unrealized, from assets allocated to the separate account, without regard to other income, gains, or losses of the insurer.(3)(c) Except as may be provided with respect to reserves for guaranteed benefits and funds referred to in Subsection (3)(d):(3)(c)(i) an insurer may invest or reinvest amounts allocated to a separate account and accumulations on those amounts without regard to the requirements or limitations prescribed by the laws of this state governing the investments of a life insurer; and(3)(c)(ii) an insurer may not take into account the investments in a separate account in applying the investment limitations that otherwise apply to the investments of the insurer.(3)(d) Except with the approval of the commissioner and under any condition the commissioner prescribes as to investments and other matters, which shall recognize the guaranteed nature of the benefits provided, an insurer may not maintain in a separate account reserves for:(3)(d)(i) benefits guaranteed as to dollar amount and duration; and(3)(d)(ii) funds guaranteed as to principal amount or stated rate of interest.(3)(e)(3)(e)(i) Except as provided in Subsection (3)(e)(ii) and unless otherwise approved by the commissioner, assets allocated to a separate account shall be valued:(3)(e)(i)(A) at their market value on the date of valuation; or(3)(e)(i)(B) if there is no readily available market, then as provided under the terms of the contract, rules, or other written agreement that applies to the separate account.(3)(e)(ii) Unless otherwise approved by the commissioner, the portion of the assets of a separate account that are equal to the insurer’s reserve liability with regard to the guaranteed benefits and funds referred to in Subsection (3)(d) shall be valued in accordance with the rules that otherwise apply to the company’s assets.(3)(f)(3)(f)(i) An insurer owns the amounts it allocates to a separate account in the exercise of the power granted by this section, and the insurer may not be, nor hold itself out to be, a trustee with respect to those amounts.(3)(f)(ii) To the extent provided under the applicable insurance policy, an insurer may not charge the portion of the assets of a separate account that is equal to the reserves and other insurance liabilities with respect to the separate account with liabilities arising out of any other business the insurer may conduct.(3)(g)(3)(g)(i) A sale, exchange, or other transfer of assets may not be made by an insurer between any of its separate accounts or between any other investment account and one or more of its separate accounts unless:(3)(g)(i)(A) in case of a transfer into a separate account, the transfer is made solely to establish the account or to support the operation of the insurance policies with respect to the separate account to which the transfer is made; and(3)(g)(i)(B) the transfer, whether into or from a separate account, is made by:(3)(g)(i)(B)(I) a transfer of cash; or(3)(g)(i)(B)(II) if the transfer of securities is approved by the commissioner, a transfer of securities having a readily determinable market value.(3)(g)(ii) The commissioner may approve a transfer not described in Subsection (3)(g)(i) among the accounts described in Subsection (3)(g)(i) if, in the commissioner’s opinion, the transfer would not be inequitable.(3)(h) To the extent an insurer considers it necessary to comply with an applicable federal or state law, the insurer with respect to a separate account, including a separate account which is a management investment company or a unit investment trust, may provide for a person having an interest in the separate account to have appropriate voting and other rights and special procedures for the conduct of the business of the separate account, including:(3)(h)(i) special rights and procedures relating to investment policy;(3)(h)(ii) investment advisory services;(3)(h)(iii) selection of independent public accountants; and(3)(h)(iv) the selection of a committee, the members of which need not be otherwise affiliated with the insurer, to manage the business of the separate account.