N.Y. Insurance Law § 3222: Funding agreements

§ 3222. Funding agreements. (a) Any insurer authorized to deliver or

issue for delivery annuity contracts in the state may deliver or issue

for delivery one or more funding agreements. The issuance or delivery of

such funding agreements shall not be deemed to be doing a kind of

business specifically authorized by section one thousand one hundred

thirteen of this chapter or engaging in any business authorized by

section one thousand seven hundred fourteen of this chapter.

Notwithstanding the definition of "insurance contract" in paragraph one

of subsection (a) of section one thousand one hundred one of this

chapter, the issuance or delivery of a funding agreement by an insurer

in this state shall constitute doing an insurance business herein.

(b) Such funding agreements may be issued to persons authorized by a

state or foreign country to engage in an insurance business or

subsidiaries of such persons. Such funding agreements may also be issued

to entities other than persons authorized to engage in an insurance

business (and subsidiaries of such persons) and to individuals for the

following purposes: (i) to fund benefits under any employee benefit plan

as defined in the federal Employee Retirement Income Security Act of

1974, 29 U.S.C. §§ 1001 et seq, maintained in the United States or in a

foreign country, (ii) to fund the activities of any organization exempt

from taxation under section five hundred one (c) of the Internal Revenue

Code or of any similar organization in any foreign country, (iii) 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, (iv) to fund any agreement providing

for periodic payments in satisfaction of a claim or (v) to fund any

program of an institution which has assets in excess of twenty-five

million dollars.

(c) No amounts shall be guaranteed or credited under any such funding

agreement except upon reasonable assumptions as to investment income and

expenses and on a basis equitable to all holders of funding agreements

of a given class. Such funding agreements shall not provide for payments

to or by the insurer based on mortality or morbidity contingencies.

(d) Amounts paid to the insurer, and proceeds applied under optional

modes of settlement, under such funding agreements may be allocated by

the insurer to one or more separate accounts pursuant to section four

thousand two hundred forty of this chapter.

(e) (1) The superintendent may promulgate reasonable regulations

relating to (i) the standards to be followed in the approval of forms of

such funding agreements, (ii) the reserves to be maintained by insurers

issuing such funding agreements, (iii) the accounting and reporting of

funds credited under such funding agreements, (iv) the disclosure of

information to be given to holders and prospective holders of such

funding agreements, and (v) the qualification and compensation of

persons selling such funding agreements on behalf of insurers.

(2) Notwithstanding any other provision of law, the superintendent

shall have sole authority to regulate the issuance and sale of such

funding agreements, including the persons selling such funding

agreements on behalf of insurers.