2020 Oklahoma Statutes
Title 36. Insurance
§36-1695. Assets and liabilities of protected cells – Protected cell income – Insurance securitization.
A. The protected cell assets of any protected cell shall not be charged with liabilities arising out of any other business the protected cell company may conduct. All contracts or other documentation reflecting protected cell liabilities shall clearly indicate that only the protected cell assets are available for the satisfaction of those protected cell liabilities.
B. Unless otherwise approved by the Insurance Commissioner, assets attributed to a protected cell shall be valued at their fair value on the date of valuation.
C. 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 other protected cells. Amounts attributed to any protected cell and accumulations on the attributed amounts may be invested and reinvested without regard to any requirements or limitations imposed on investments of insurance companies domiciled in this state and the investments in any protected cell or cells may not be taken into account in applying the investment limitations otherwise applicable to the investments of the protected cell company, subject to any restrictions that may be imposed by the Commissioner in accordance with Section 9 of this act.
D. As permitted by the Commissioner, a protected cell company may, in respect of any of its protected cells, engage in fully funded indemnity triggered and/or fully funded nonindemnity 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 shall qualify as an insurance securitization under the terms of this section only after the Commissioner, in accordance with the authority granted under Section 9 of this act, adopts regulations addressing the methods of funding of the portion of the risk that is not indemnity-based, accounting, disclosure, risk-based capital treatment, and assessing risks associated with those securitizations. 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 any outstanding debt or other obligation attributable to that protected cell, and nothing in this section shall be construed or interpreted as preventing 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 that interest or other consideration.
E. In all protected cell company insurance securitizations, the contracts or other documentation effecting the transaction shall contain provisions identifying the protected cell to which the transaction will be attributed. In addition, the contracts or other documentation shall clearly disclose that the assets of that protected cell, and only those assets, are available to pay the obligations of that protected cell. Notwithstanding the foregoing, and subject to the provisions of this title and any other applicable law or rules, the failure to include that language in the contracts or other documentation shall not be used as the sole basis by creditors, reinsurers or other claimants to circumvent the provisions of this section.
F. At the cessation of business of a protected cell, and in absence of any placement under administrative supervision or order of conservation, rehabilitation or liquidation attributable to that protected cell or the protected cell company, the protected cell company shall voluntarily close out the protected cell account in accordance with a plan approved by the Commissioner.
G. A protected cell company shall only be authorized to attribute to a protected cell account the insurance obligations relating to the protected cell company's general account. Under no circumstances shall a protected cell be authorized to issue insurance or reinsurance contracts directly to policyholders or reinsureds or have any obligation to the policyholders or reinsureds of the protected cell company's general account.
Added by Laws 2019, c. 362, § 5, eff. Nov. 1, 2019.
