(a)  A protected cell company may establish one or more protected cells, with the prior written approval of the commissioner of a plan of operation or amendments to it submitted by the protected cell company with respect to each protected cell. Upon the written approval of the commissioner of the plan of operation, which shall include, but not be limited to, the specific business objectives and investment guidelines of the protected cell, the protected cell company may, in accordance with the approved plan of operations attribute to the protected cell amounts both reflective of insurance obligations with respect to its insurance business and obligations relating to the insurance securitization and assets to fund the obligations. Each protected cell of a protected cell company shall have its own distinct name or designation, which shall include the words “protected cell.” The protected cell company shall transfer all assets attributable to each protected cell to one or more separately established and identified protected cell accounts, bearing the name or designation of that protected cell. Protected cell assets shall be held in the protected cell accounts for the purpose of satisfying the obligations of that protected cell.

(b)  All attributions of assets and liabilities between a protected cell and the general account shall be in accordance with the plan of operation approved by the commissioner or shall be otherwise approved by the commissioner. Unless otherwise approved by the commissioner, no other attribution of assets or liabilities may be made by a protected cell company between the protected cell company’s general account and one or more of its protected cells. Any attribution of assets and liabilities between the general account and a protected cell, or from investors in the form of principal on a debt instrument issued by a protected cell company in connection with a protected cell company securitization shall be in cash or readily marketable securities with established market values unless otherwise approved in advance in writing by the commissioner.

(c)  The creation of a protected cell does not create, in respect of that protected cell, a legal person separate from the protected cell company. Amounts attributed to a protected cell under this chapter, including assets transferred to a protected cell account, are owned by the protected cell company and the protected cell company may not be, nor hold itself out to be, a trustee with respect to those protected cell assets of that protected cell account. Notwithstanding the foregoing, the protected cell company may allow for a security interest to attach to protected cell assets or a protected cell account when in favor of a creditor of the protected cell and otherwise allowed under applicable law.

(d)  Nothing in this chapter shall be construed to prohibit the protected cell company from contracting with or arranging for an investment advisor, commodity trading advisor, or other third party to manage the protected cell assets of a protected cell, provided that all remuneration, expenses, and other compensation of the third party advisor or manager are payable from the protected cell assets of that protected cell and not from the protected cell assets of other protected cells or the assets of the protected cell company’s general account. The contract shall clearly reference the protected cell or cells for which the contract has been arranged and shall contain a non-recourse provision in favor of the company that prohibits the contracting party from seeking recourse against, or attaching, the assets of the general account, or the assets of another protected cell, to satisfy the obligations of any one or more protected cells which are the subject of the contract.

(e)  A protected cell company shall establish any administrative and accounting procedures that are necessary to properly identify the one or more protected cells of the protected cell company and the protected cell assets and protected cell liabilities attributable to the protected cells. It shall be the duty of the directors of a protected cell company to: (1) keep protected cell assets and protected cell liabilities separate and separately identifiable from the assets and liabilities of the protected cell company’s general account, and (2) to keep protected cell assets and protected cell liabilities attributable to one protected cell separated and separately identifiable from protected cell assets and protected cell liabilities attributable to other protected cells. Notwithstanding the foregoing, and subject to the provisions of § 27-64-10, if this section is violated, the remedy of tracing shall be applicable to protected cell assets when commingled with protected cell assets of other protected cells or the assets of the protected cell company’s general account. The remedy of tracing shall not be construed as an exclusive remedy.

(f)  Unless otherwise approved by the commissioner, the protected cell company shall, when establishing a protected cell, attribute to the protected cell assets with a value at least equal to the reserves and other insurance liabilities attributed to that protected cell.