20-536.01. Separate accounts

A. Except as may be provided with respect to reserves for guaranteed benefits referred to in section 20-651, subsection C, amounts allocated to any separate account established pursuant to section 20-651 and accumulations thereon may be invested and reinvested in any class of investments, having due regard for the kind of investments permitted and the qualitative requirements prescribed by the laws of this state governing the investments of life insurance companies, but without regard to the quantitative restrictions or limitations applicable to those investments, provided that separate account investments shall not be acquired through bulk reinsurance, merger or consolidation unless acquired with the specific consent of the director, and shall not include the investments described in section 20-556, paragraph 1. Notwithstanding any other law, section 20-549 applies to and governs investments in each separate account based on the value of its assets. The investments in such separate account or accounts shall not be taken into account in applying the investment limitations otherwise applicable to the investments of the company.

B. Investments in separate accounts shall be kept unencumbered and otherwise unimpaired. No sale, exchange or other transfer of assets may be made by a company between any of its separate accounts or between any other investment account and one or more of its separate accounts unless, in case of a transfer into a separate account, such transfer is made solely to establish the account or to support the operation of the contracts with respect to the separate account to which the transfer is made, and unless such transfer, whether into or from a separate account, is made by a transfer of cash, or by a transfer of securities having a readily determinable market value, provided that such transfer of securities is approved by the director. The director may approve other transfers among such accounts if, in the director's opinion, such transfers would not be inequitable.

C. Notwithstanding any other law, if approved by the director investments in separate accounts may be pledged as collateral to secure the commitment of a third party to pay in full the obligations of the life insurance company to contract holders of the separate account or separate accounts if the life insurance company becomes insolvent as defined in section 20-611 or is subject to an order of liquidation pursuant to sections 20-616 and 20-621 or if the investments in the separate account or separate accounts are not adequate to discharge the life insurance company's obligations to the contract holders under contracts that are supported by the separate account or separate accounts. The director shall issue an order after a hearing. The order shall establish criteria for the third parties who are eligible to provide credit enhancement for a separate account or separate accounts and to accept assets that are pledged pursuant to this subsection, except that the director may approve any specific transaction regardless of the criteria set forth in the order.

D. Notwithstanding any other law and except as may be provided with respect to reserves for guaranteed benefits under section 20-651, subsection C, amounts that are allocated to any separate account established for variable life contracts, variable annuity contracts and guaranteed investment contracts pursuant to section 20-651, and accumulations on the accounts, may be invested or reinvested in any class of investments permitted under this article subject to the qualitative, but without regard to the quantitative, restrictions or limitations prescribed by the laws of this state. Separate account investments shall not be acquired by bulk reinsurance, merger or consolidation unless the director specifically consents and shall not include investments described in section 20-556, paragraph 1. Section 20-549 applies to and governs investments in each separate account unless the director prescribes standards by order after hearing to allow investments in each separate account to exceed the limits prescribed in section 20-549.