2009 Iowa Code
Title 13 - Commerce
Subtitle 1 - Insurance and Related Regulation
CHAPTER 521G - PROTECTED CELL COMPANIES
521G.6 - USE AND OPERATION OF PROTECTED CELLS.

        521G.6  USE AND OPERATION OF PROTECTED CELLS.
         1.  The protected cell assets of a protected cell shall not be
      charged with liabilities arising out of any other business the
      protected cell company may conduct.  A contract or other
      documentation reflecting protected cell liabilities shall clearly
      indicate that only the protected cell assets of a protected cell are
      available for the satisfaction of the protected cell liabilities
      attributed to that same protected cell.
         2.  The income, gains, and losses, realized or unrealized, from
      protected cell assets and protected cell liabilities shall be
      credited to or charged against the protected cell without regard to
      other income, gains, or losses of the protected cell company,
      including income, gains, or losses of another protected cell.  An
      amount attributed to a protected cell and accumulations on the
      attributed amount may be invested and reinvested without regard to
      the requirements and limitations of section 511.8 or 515.35, and the
      investments in a protected cell shall not be taken into account in
      applying the investment limitations otherwise applicable to the
      investments of the protected cell company.
         3.  Assets and liabilities attributed to a protected cell shall be
      valued at their fair value on the date of valuation.
         4. a.  A protected cell company, with respect to its protected
      cells, shall engage in fully funded indemnity triggered insurance
      securitization to support in full the protected cell exposures
      attributable to that protected cell.  A protected cell company
      insurance securitization that is nonindemnity triggered qualifies as
      an insurance securitization under this chapter only after the
      commissioner adopts rules providing for all of the following:
         (1)  The methods of funding of the portion of the risk that is not
      indemnity based.
         (2)  Accounting requirements.
         (3)  Disclosure requirements.
         (4)  Risk-based capital treatment.
         (5)  Assessment of risks associated with such securitizations.
         b.  A protected cell company insurance securitization that is
      not fully funded, whether indemnity triggered or nonindemnity
      triggered, is prohibited.  Protected cell assets may be used to pay
      interest or other consideration on an outstanding debt or other
      obligation attributable to that protected cell.  This subsection
      shall not be construed or interpreted to prevent a protected cell
      company from entering into a swap agreement or other transaction for
      the account of the protected cell that has the effect of guaranteeing
      interest or other consideration.
         5.  In a protected cell company insurance securitization, a
      contract or other documentation affecting the transaction shall
      contain provisions identifying the protected cell to which the
      transaction is attributed.  In addition, the contract or other
      documentation shall clearly disclose that the assets of the protected
      cell, and only those assets, are available to pay the obligations of
      that protected cell.  Notwithstanding this subsection, the failure to
      include such language in a contract or other documentation shall not
      be used as the sole basis by a creditor, reinsurer, or other claimant
      to circumvent this chapter.
         6.  A protected cell company shall only attribute to a protected
      cell account the insurance obligations relating to the protected cell
      company's general account.  A protected cell shall not issue an
      insurance or reinsurance contract directly to a policyholder or
      reinsured, and shall not have an obligation to a policyholder or
      reinsured of the protected cell company's general account.
         7.  At the cessation of business of a protected cell pursuant to
      the plan approved by the commissioner, the protected cell company
      shall close the protected cell account.  

         2000 Acts, ch 1046, §6; 2007 Acts, ch 137, §22