(a) An admitted life insurer that is financially qualified pursuant to subdivision (b) and complies with the provisions of this section and those of Section 10506 that expressly refer to this section or are not inconsistent with it, may guarantee, pursuant to an approved policy, contract, or agreement, the value of the assets allocated to a separate account, which as provided under the applicable policy, contract, or agreement is not chargeable with liabilities arising out of any other business the company may conduct, or the investment results thereof, or the income thereon, or the benefits payable pursuant to the approved policy, contract, or agreement, and may transfer to the separate account cash to maintain its reserves for those guarantees pursuant to paragraph (2) of subdivision (f) of Section 10506. The general account of the insurer shall be paid reasonable and sufficient compensation not less frequently than quarterly, for risks and other expenses incurred, from any separate account that receives a guarantee authorized by this section. (b) For the purposes of this section âapproved policy, contract, or agreementâ means a policy, contract, or agreement, the form of which has been approved by the commissioner, for issue or marketing in this state, and which in addition to meeting the requirements of all pertinent provisions of this code, meets the requirements of one of the following paragraphs: (1) A policy, contract, or agreement meets the requirements of this paragraph if it satisfies and is expected to satisfy over the full life of the policy, contract, or agreement all of the following conditions: (A) The weighted asset valuation reserve factor for the assets held in the separate account pursuant to the terms of the policy, contract, or agreement shall not exceed 2 percent. (B) Guarantees of interest that extend beyond 14 months at any time shall be no greater than 3 percent per annum. (C) Any reserves required because the contract value is less than the reserves required for the policy, contract, or agreement shall be maintained in a separate identified segment of the insurerâs general account or otherwise segregated within the general account, or be held in a separate account all of the assets of which shall also be chargeable with liabilities arising out of other business of the insurer. (D) In the event the policy, contract, or agreement provides for withdrawals (other than those resulting from an election by a participant under a pension, retirement, retirement medical benefit, or profit-sharing plan) of amounts other than on the conversion date or guarantee effective date, if any, the withdrawals shall be made in either of the following manners: (i) In a lump sum in an amount not to exceed the market value. (ii) In one or more contract value installments the present value of which is equal to or less than the market value of the aggregate withdrawal. (2) A policy, contract, or agreement meets the requirements of this paragraph if it satisfies and is expected to satisfy over the full life of the policy, contract, or agreement all of the following conditions: (A) The weighted asset valuation reserve factor for the assets held in the separate account pursuant to the terms of the policy, contract, or agreement shall not exceed 4 percent. (B) The market value of the assets held in the separate account plus any reserves described in subparagraph (C) shall exceed the current aggregate liabilities determined by discounting the guaranteed benefit liability cashflows at the rate of 105 percent of the then current yields as quoted on United States Government issued securities having substantially similar maturities by at least the following applicable amount: (i) For assets consisting of debt instruments, an amount equal to the asset valuation reserve âmaximum reserve factor,â provided, however, that the factor shall be reduced by 50 percent for the purpose of this calculation if the difference in durations o
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