Chapter 408-E

Section 408-E:1

    408-E:1 Purpose and Scope. – This chapter specifically permits life insurance companies to issue funding agreements as a type of insurance business permitted under authority of RSA 401:1, III and establishes standards for the regulation of funding agreements.

Source. 2013, 108:1, eff. Aug. 23, 2013.

Section 408-E:2

    408-E:2 Definitions. –
In this chapter:
I. "Funding agreement" means an agreement issued by a life insurance company, not based on mortality or morbidity, providing for the accumulation of funds by the insurer for the purpose of making one or more payments to the holder, where the initial premium paid is $1,000,000 or more. Except as provided in this chapter, a "funding agreement" does not constitute life insurance or an annuity and does not constitute a security as defined in RSA 421-B:1-102(53).
II. "Holder" means a person described in RSA 408-E:4 to whom the life insurance company may issue a funding agreement.
III. "Life insurance company" means a life insurance company authorized to do business pursuant to RSA 401:1, III.
IV. "Optional modes of settlement" means the manner in which the funding agreement is structured to make payments to the holder.

Source. 2013, 108:1. 2015, 273:18, eff. Jan. 1, 2016.

Section 408-E:3

    408-E:3 Authorization and Regulation of Funding Agreements. –
I. Any licensed life insurance company may deliver or issue for delivery one or more funding agreements.
II. For the purposes of RSA 402-C:44, funding agreements shall be treated as insurance contracts, and holders of funding agreements shall be entitled to the same priority of distribution as policyholders.
III. Except as provided in this chapter, funding agreements shall not be subject to consumer protections that apply to annuity contracts including free-look requirements that permit consumers to void an issued contract and receive a return of premium by returning the contract within a specified time frame.
IV. Funding agreements shall be filed for approval by the commissioner consistent with this chapter.

Source. 2013, 108:1, eff. Aug. 23, 2013.

Section 408-E:4

    408-E:4 Permissible Holders of Funding Agreements. –
Funding agreements may be issued to:
I. Persons authorized by a state or foreign country to engage in an insurance business or to subsidiaries of such persons.
II. Entities other than persons authorized to engage in an insurance business and to individuals for the purpose of funding:
(a) Benefits under any employee benefit plan as defined in the federal Employee Retirement Income Security Act of 1974, 29 U.S.C. section 1001 et seq., maintained in the United States or in a foreign country;
(b) Activities of any organization exempt from taxation under section 501(c) of the Internal Revenue Code or of any similar organization in any foreign country;
(c) 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;
(d) Any agreement providing for one or more payments in satisfaction of a claim;
(e) Any program of an institution which has assets in excess of $25,000,000; or
(f) Any program of an institution for the purposes of providing collateral security for securities registered with the federal Securities and Exchange Commission.

Source. 2013, 108:1, eff. Aug. 23, 2013.

Section 408-E:5

    408-E:5 Amounts Guaranteed or Credited Under Funding Agreements. –
An amount shall not be guaranteed or credited under a funding agreement except upon:
I. Reasonable assumptions as to investment income and expenses; and
II. A basis equitable to all holders of funding agreements of a given class.

Source. 2013, 108:1, eff. Aug. 23, 2013.

Section 408-E:6

    408-E:6 Allocation to Separate Accounts. – Amounts paid to the insurer, and proceeds applied under optional modes of settlement under the funding agreement may be allocated by the insurer to one or more separate accounts pursuant to the provisions in RSA 408 addressing separate accounts.

Source. 2013, 108:1, eff. Aug. 23, 2013.

Section 408-E:7

    408-E:7 Reserve Requirements. – In establishing minimum reserve requirements for funding agreements the commissioner may use any relevant actuarial guidelines, regulations, interpretations, or papers as well as standards set forth in the Valuation Manual of the National Association of Insurance Commissioners for deposit-type contracts.

Source. 2013, 108:1, eff. Aug. 23, 2013.

Section 408-E:8

    408-E:8 Rules. –
The commissioner may adopt rules, pursuant to RSA 541-A, relative to:
I. The standards to be followed in the approval of forms of funding agreements;
II. The reserves to be maintained by insurers issuing funding agreements;
III. The accounting and reporting of funds credited under funding agreements; and
IV. The disclosure of information to be given to holders or third parties that purchase funding agreements.

Source. 2013, 108:1, eff. Aug. 23, 2013.