521G.5 Establishment of protected cells. 1. 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 such plansubmitted by the protected cell company with respect to each protected cell related to aninsurance securitization. The plan shall include, but not be limited to, the specific businessobjectives and investment guidelines of the protected cell company. Upon the written approval of the commissioner of the plan of operation, the protected cell company, consistentwith the approved plan of operation, may attribute to the protected cell insurance obligationswith respect to its insurance business and obligations relating to the insurance securitizationand assets to fund the obligations. A protected cell shall have its own distinct name ordesignation, which shall include the words 'protected cell'. The protected cell companyshall transfer all assets attributable to a protected cell to one or more separately establishedand 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 one or more separately establishedand 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 satisfyingthe obligations of that protected cell. 2. Attribution of assets and liabilities between a protected cell and the general account shall be pursuant to the plan of operation. Other attribution of assets or liabilities shallnot be made by a protected cell company between the protected cell company’s generalaccount and its protected cells. The attribution of assets and liabilities between the general account and a protected cell, or from investors in the form of principal on a debtinstrument issued by a protected cell company in connection with a protected cell companyinsurance securitization transaction, shall be in cash or in readily marketable securities withestablished market values. 3. The creation of a protected cell does not create, with respect to that protected cell, a legal person separate from the protected cell company. An amount attributed to a protectedcell under this chapter, including assets transferred to a protected cell account, is ownedby the ted cell, a legal person separate from the protected cell company. An amount attributed to a protectedcell under this chapter, including assets transferred to a protected cell account, is ownedby the protected cell company and the protected cell company shall not be, or hold itselfout to be, a trustee with respect to those protected cell assets of that protected cell account.Notwithstanding this subsection, a protected cell company may permit a security interest toattach to protected cell assets or a protected cell account which is in favor of a creditor of theprotected cell company and otherwise allowed under applicable law. 4. This chapter shall not be construed to prohibit the protected cell company from contracting with or arranging for an investment advisor, commodity trading advisor, orother third party to manage the protected cell assets of a protected cell, provided that allremuneration, expenses, and other compensation of the third-party advisor or manager arepayable from the protected cell assets of that protected cell and not from the protected cellassets of other protected cells or the assets of the protected cell company’s general account. 5. a. er arepayable from the protected cell assets of that protected cell and not from the protected cellassets of other protected cells or the assets of the protected cell company’s general account. 5. a. A protected cell company shall establish administrative and accounting procedures necessary to properly identify the protected cells of the protected cell company and theprotected cell assets and protected cell liabilities attributable to the protected cells. Theboard of directors of a protected cell company shall do both of the following: (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. (2) Keep protected cell assets and protected cell liabilities attributable to one protected cell separate and separately identifiable from protected cell assets and protected cell liabilitiesattributable to other protected cells. b. 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 generalaccount. tected cells. b. 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 generalaccount. The remedy of tracing shall not be construed as an exclusive remedy. 6. A protected cell company, when establishing a protected cell, shall attribute to the protected cell assets a value at least equal to the reserves and other insurance liabilitiesattributed to that protected cell. 2000 Acts, ch 1046, §5For future repeal of this section, effective January 1, 2025, see 2023 Acts, ch 107, §30 Sat Dec 23 00:53:16 2023 Iowa Code 2024, Section 521G.5 (16, 2)
Iowa Legal Code