§ 27-4-0.1 - Definitions. - Rhode Island Statutes

SECTION 27-4-0.1

   § 27-4-0.1  Definitions. – (a) "Annuities" means all agreements to make periodic payments for a certainperiod or where the making or continuance of all or some of a series of thepayments, or the amount of any payment, depends on the continuance of humanlife, except payments made in connection with a life insurance policy. Amountspaid the insured to provide annuities and proceeds applied under optional modesof settlement or under dividend options may be allocated by the insurer to oneor more separate accounts pursuant to provisions of the annuity contract.

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

   (2) Any insurer authorized to issue annuity contracts inRhode Island may issue one or more funding agreements, in fixed or variabledollar amounts or in both. The issuance of a funding agreement under thissection is deemed to be doing insurance business. Funding agreements may beissued to fund:

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

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

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

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

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

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

   (4) Amounts paid to the insurer under funding agreements maybe allocated by the insurer to its general account or to one or more separateaccounts 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 thecontrary, no funding agreement or portion of it, except to the extent thefunding agreement may be considered an unallocated annuity contract, inaccordance with the definition found in § 27-34.3-5, and except to theextent the funding agreement or portion of it has been issued to or inconnection with a specific employee, union or association of natural personsbenefit plan, not protected under the federal Pension Benefit GuarantyCorporation, or a government lottery, and except to the extent the fundingagreement 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 isprovided pursuant to chapter 34.3 of this title.

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

   (c) "Life insurance" means every insurance upon the lives ofhuman beings and every insurance appertaining to that life, including thegranting of endowment benefits, additional benefits in the event of death byaccident, additional benefits to safeguard the contract from lapse, acceleratedpayments of part or all of the death benefit, or a special surrender value upondiagnosis of terminal illness, defined as a life expectancy of twelve (12)months or less, or of a medical condition requiring extraordinary medical careor treatment regardless of life expectancy, or a special surrender value upontotal and permanent disability of the insured, and optional modes of settlementof proceeds. Amounts paid the insurer for life insurance and proceeds appliedunder optional modes of settlement or under dividend options may be allocatedby the insurer to one or more separate accounts pursuant to provisionscontained in the policy.