(a) Every separate account established pursuant to section 4240 of the Insurance Law, as amended, shall be subject to the following provisions of this section:

1. (1) Except as may otherwise be permitted in writing by the superintendent, every company shall maintain in each separate account assets with a value at least equal to the reserves and other contract liabilities with respect to such account.
2. (2) A separate account annuity contract may provide, pursuant to section 4240(a)(12) of the Insurance Law, that the portion of the assets of the separate account not exceeding the reserves and other contract liabilities with respect to such separate account shall not be chargeable with liabilities arising out of any other business of the insurer.

3. (3) No sale, exchange or other transfer of assets may be made by a company between any of its separate accounts or between any other investment account and one or more of its separate accounts unless, in case of a transfer into a separate account, such transfer is made solely to establish the account or to support the operation of the contracts with respect to the separate account to which the transfer is made, and unless such transfer, whether into or from a separate account, is made: The superintendent may authorize other transfers among such accounts if, in his opinion, such transfers would not be inequitable.

   1. (i) by a transfer of cash; or
   2. (ii) by a transfer of securities having a valuation which can be readily determined in the marketplace, provided that such transfer of securities is approved by the superintendent.

4. (4) Notwithstanding the restrictions and limitations on investments imposed by section 4240(a)(2) of the Insurance Law or any other provision of law, the assets allocated to any separate account may be invested in the securities of an investment company subject to or registered pursuant to the Federal Investment Company Act of 1940, as amended, provided that:

   1. (i) the insurance company has satisfied the superintendent that such investment by the separate account is not hazardous to the public or the policyholders of the insurance company in this State;
   2. (ii) the investments of such investment company comply with the restrictions and limitations on investments by the insurance company imposed by section 4240(a)(2) of the Insurance Law and any other provisions of such law; and
   3. (iii) if, subsequent to the purchase of the securities of such investment company, its investments cease to comply fully with the restrictions and limitations imposed by subparagraph (ii) of this paragraph, then all separate accounts shall cease investing in the securities of such investment company and existing separate account investments in the securities of such investment company shall be recognized as admitted assets, for the purposes of subdivision (a)(1) of this section, only to the extent that they comply with subparagraph (ii) of this paragraph.
5. (5) Expenses shall be allocated to the separate account business in accordance with the provisions of section 4240(a)(6) of the Insurance Law and Part 91 (Regulation 33) of this Title.)
6. (6) Conflicts of interest rules under any provision of the Insurance Law or any regulation promulgated thereunder which are applicable to the offices or directors of insurance companies shall also apply to the members of the committee, board or other similar body of every separate account. No officer or director of any company maintaining a separate account nor any member of the committee, board or other similar body of the separate account shall receive, in addition to his fixed salary or compensation, any commission, other compensation, money or valuable thing either directly or indirectly, with respect to the purchase, sale or loan of the assets of the separate account.

7. (7) A separate account annuity contract may provide, as an incidental benefit, for the payment of a death benefit in the event of death prior to the annuity commencement date. The amount of such death benefit shall not exceed the greater of: A reserve liability for any such incidental benefit in excess of the accumulated value of the contract shall be accumulated and maintained in the general account of the company and must be in compliance with Part 99 of this Title. Any such death benefit provision which complies with the requirements of this paragraph shall not be subject to the provisions of the Insurance Law applicable to life insurance contracts. However, any other death benefit provision during the deferred period shall be subject to such Insurance Law provisions.

   1. (i) the accumulated value of the contract; or
   2. (ii) the aggregate amount of stipulated payments or employee contributions, whichever is applicable, made under the contract prior to the time of death.
8. (8) A separate account annuity contract may provide that, at the time the annuity becomes payable, the insurer may, at its option, in lieu of commencing annuity payments, cancel the annuity and pay the contractholder its accumulated value, if such accumulated value is less than $2,000, or would provide an income the initial amount of which is less than $20 per month or if the amount of the annuity does not meet other minimum requirements as approved in writing by the superintendent.