(a)  “Annuities” means all agreements to make periodic payments for a certain period or where the making or continuance of all or some of a series of the payments, or the amount of any payment, depends on the continuance of human life, except payments made in connection with a life insurance policy. Amounts paid the insured to provide annuities and proceeds applied under optional modes of settlement or under dividend options may be allocated by the insurer to one or more separate accounts pursuant to provisions of the annuity contract.

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(b)(1)  “Funding agreements” means agreements where an insurer may accept and accumulate funds and make one or more payments at future dates in amounts that are not based on mortality or morbidity contingencies. Funding agreements do not constitute annuities as defined in subsection (a) of this section or life insurance as defined in subsection (c) of this section;

(2)  Any insurer authorized to issue annuity contracts in Rhode Island may issue one or more funding agreements, in fixed or variable dollar amounts or in both. The issuance of a funding agreement under this section is deemed to be doing insurance business. Funding agreements may be issued to fund:

(i)  Benefits under any employee benefit plan as defined in the federal Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1002;

(ii)  The activities of any organization exempt from taxation under § 501(c) of the Internal Revenue Code, 26 U.S.C. § 501(c), or any similar organization in any foreign country;

(iii)  Any program of the government of the United States, the government of any state or political subdivision of the state, or of a foreign country, or any agency or instrumentality of any foreign government, political subdivision or foreign country;

(iv)  agreement providing for periodic payments in satisfaction of a claim; or

(v)  Any program of any institution that has assets in excess of twenty-five million dollars ($25,000,000).

(3)  A funding agreement shall be for a total amount of not less than one million dollars ($1,000,000). An amount under a funding agreement shall not be guaranteed or credited except upon reasonable assumptions as to investment income and expenses and on a basis equitable to all holders of funding agreement of a given class. Funding agreements shall not provide for payments to or by the insurer based on mortality or morbidity contingencies.

(4)  Amounts paid to the insurer under funding agreements may be allocated by the insurer to its general account or to one or more separate accounts pursuant to § 27-32-1.

(5)  A funding agreement is a Class 3 claim under § 27-14.3-46.

(6)  Notwithstanding any provision in this title to the contrary, no funding agreement or portion of it, except to the extent the funding agreement may be considered an unallocated annuity contract, in accordance with the definition found in § 27-34.3-5, and except to the extent the funding agreement or portion of it has been issued to or in connection with a specific employee, union or association of natural persons benefit plan, not protected under the federal Pension Benefit Guaranty Corporation, or a government lottery, and except to the extent the funding agreement or portion of it is not limited or excluded under § 27-34.3-3(b)(2), shall qualify as a policy or contract as to which coverage is provided pursuant to chapter 34.3 of this title.

(7)  The commissioner shall have the authority to regulate the sale and issuance of funding agreements and to promulgate regulations governing the sale and issuance of funding agreements.

(c)  “Life insurance” means every insurance upon the lives of human beings and every insurance appertaining to that life, including the granting of endowment benefits, additional benefits in the event of death by accident, additional benefits to safeguard the contract from lapse, accelerated payments of part or all of the death benefit, or a special surrender value upon diagnosis of terminal illness, defined as a life expectancy of twelve (12) months or less, or of a medical condition requiring extraordinary medical care or treatment regardless of life expectancy, or a special surrender value upon total and permanent disability of the insured, and optional modes of settlement of proceeds. Amounts paid the insurer for life insurance and proceeds applied under optional modes of settlement or under dividend options may be allocated by the insurer to one or more separate accounts pursuant to provisions contained in the policy.