1. A life insurance company organized under this chapter may issue funding agreements. The issuance of a funding agreement under this section is deemed to be doing insurance business. For purposes of this section, “funding agreement” means an agreement for an insurer to accept and accumulate funds and to make one or more payments at future dates in amounts that are not based on mortality or morbidity contingencies of the person to whom the funding agreement is issued. A funding agreement does not constitute life insurance, an annuity, or other insurance authorized by section 508.29, and does not constitute a security as defined in section 502.102.

Terms Used In Iowa Code 508.31A

  • Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Commission: means the real estate commission as established by chapter 543B. See Iowa Code 543C.1
  • Commissioner: means the commissioner of insurance. See Iowa Code 510.1B
  • Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
  • following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
  • Insurer: means a person duly licensed in this state as an insurance company pursuant to this subtitle. See Iowa Code 510.1B
  • person: means individual, corporation, limited liability company, government or governmental subdivision or agency, business trust, estate, trust, partnership or association, or any other legal entity. See Iowa Code 4.1
  • Proceeds: includes additions and contributions. See Iowa Code 508.32
  • Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
  • state: when applied to the different parts of the United States, includes the District of Columbia and the territories, and the words "United States" may include the said district and territories. See Iowa Code 4.1
  • United States: includes all the states. See Iowa Code 4.1
 2. a. Funding agreements may be issued to the following:

 (1) A person authorized by a state or foreign country to engage in an insurance business or a subsidiary of such business.
 (2) A person for the purpose of funding any of the following:

 (a) Benefits under an employee benefit plan as defined in the federal Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq., maintained in the United States or in a foreign country.
 (b) Activities of an organization exempt from taxation pursuant to section 501(c) of the Internal Revenue Code, or any similar organization in any foreign country.
 (c) A program of the United States government, another state government or political subdivision of such state, or of a foreign country, or any agency or instrumentality of any such government, political subdivision, or foreign country.
 (d) An agreement providing for periodic payments in satisfaction of a claim.
 (e) A program of an institution which has assets in excess of twenty-five million dollars.
 (3) A person other than a natural person that has assets of at least twenty-five million dollars.
 (4) A person other than a natural person for the purpose of providing collateral security for securities registered with the federal securities and exchange commission.
 b. A funding agreement issued pursuant to paragraph “a”, subparagraph (1), (2), or (3), shall be for a total amount of not less than one million dollars.
 c. An amount under a funding agreement shall not be guaranteed or credited except upon reasonable assumptions as to investment income and expenses and on a basis equitable to all holders of funding agreements of a given class. Such funding agreements shall not provide for payments to the insurer based on mortality or morbidity contingencies.
 d. Amounts paid to the insurer pursuant to a funding agreement, and proceeds applied under optional modes of settlement, may be allocated by the insurer to one or more separate accounts pursuant to section 508A.1.
 3. A funding agreement is a class 2 claim under section 507C.42, subsection 2.
 4. The commissioner may adopt rules to implement funding agreements.
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