§ 4240. Separate accounts; fixed and variable life insurance and\nannuities and funding agreements. (a) In accordance with paragraphs one,\ntwo and three of subsection (a) of section one thousand one hundred\nthirteen and section three thousand two hundred twenty-two of this\nchapter, a domestic life insurance company may establish one or more\nseparate accounts and allocate thereto, pursuant to agreements for\nseparate accounts, amounts paid to it (i) to provide for annuities which\nare payable in fixed amounts guaranteed by it, or variable amounts, or\nboth, including any amounts paid to it which are subject to annuity\noptions; or (ii) to provide life insurance with benefits, premiums or\nboth payable on a variable basis and the reserves for which vary\naccording to the investment experience of such separate account; or\n(iii) to accumulate in such separate account funds to be applied to\nprovide life insurance, whether fixed or variable, or both; or (iv) to\naccumulate or hold in such separate account funds to be applied to\nprovide health insurance; or (v) to accumulate or hold in such separate\naccount proceeds applied under settlement or dividend options; or (vi)\nto accumulate or hold in such separate account funds credited under\nfunding agreements delivered pursuant to section three thousand two\nhundred twenty-two of this chapter; provided that any such separate\naccount shall be maintained in accordance with the following:\n (1) Income, gains and losses, whether or not realized, from assets\nallocated to a separate account shall, in accordance with the applicable\nagreement or agreements, be credited to or charged against such account\nwithout regard to other income, gains or losses of the insurer.\n (2) With respect to investments allocated to a separate account:\n (A) except as provided in paragraphs three and five of this\nsubsection, the insurer may invest in any investments contractually\npermitted for such separate account, the restrictions, limitations and\nother provisions relating to investments specified in this chapter shall\nnot apply to such investments, and such investments shall be\ndisregarded, and shall be excluded from admitted assets, in applying the\nquantitative investment limitations contained in this chapter to other\ninvestments;\n (B) no stock, bond, note or other security of a subsidiary or\naffiliate of the insurer, or of any company controlling or under common\ncontrol with the insurer, shall be allocated to any separate account if,\nafter giving effect to such allocation, any security of a different\nclass issued by such subsidiary or affiliate would be held in any other\naccount of the insurer, or by any company controlling or under common\ncontrol with the insurer or by any other subsidiary or affiliate of the\ninsurer; and\n (C) The insurer shall invest and reinvest for such separate account in\ngood faith and with that degree of care that an ordinarily prudent\nperson in a like position would use under similar circumstances.\n (3) The insurer may allocate amounts to a separate account to\nfacilitate its initial operations and amounts so allocated shall be\ndeemed to be invested under section one thousand four hundred four (in\nthe case of insurers making investments under the authority of section\none thousand four hundred four) of this chapter or under section one\nthousand four hundred five (in the case of insurers making investments\nunder the authority of section one thousand four hundred five) of this\nchapter and shall be subject to the qualitative standards and\nquantitative limitations provided in section one thousand four hundred\nfour or one thousand four hundred five of this chapter, as the case may\nbe.\n (4) Amounts received by the insurer pursuant to one or more such\nagreements may be maintained in one or more separate accounts.\n (5) No guarantee of the value of the assets allocated to a separate\naccount, or any interest therein, or the investment results th
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