23-63-912. Duration and release of deposit of life insurance and annuity reserves.

23-63-912. Duration and release of deposit of life insurance and annuity reserves. (a) Deposits of assets and securities representing, and at least equal in amount to, the reserves of a domestic life insurer under certain of its life insurance policies and annuity contracts and deposited under § 23-81-130 shall be held as long as the policies and contracts with respect to which the reserves exist are in force. (b) With respect to policies and contracts in force, the applicable portion of the deposit shall not be released, whether or not the policies or contracts have been reinsured or the entire liability thereunder assumed by another insurer or the issuing insurer has become insolvent, subject to delinquency proceedings, or has been dissolved. (c) Upon proof satisfactory to the Insurance Commissioner that certain of the policies or contracts previously in force have lapsed, been surrendered for cash value, matured, or otherwise terminated and that all liabilities of the insurer to policyholders and beneficiaries with respect to those policies or contracts have been fully paid and discharged, the commissioner may release any applicable portion of the deposit if the deposit is then in excess of the amount otherwise required. The commissioner may accept and rely upon records of the insurer as kept, summarized, and reported to him or her in the regular course of its business, as to any such payment and discharge. (d)(1) If the issuing insurer, or any insurer which may have assumed direct liability with respect to any policy or contract, becomes insolvent, the commissioner shall make or cause to be made, pursuant to such reasonable procedure therefor as he or she may deem proper, direct payment to persons entitled thereto under the terms of those policies or contracts of the proportionate interest of the person in the assets and securities then held on deposit, after deducting from the deposit the expenses actually incurred by the commissioner, if any, in making the distribution to the extent that the expenses cannot be met out of the insurer's other assets without diminution of the equity therein of other policyholders, contract holders, and creditors of the insurer. (2) In the event of insolvency, the commissioner shall release to the receiver or rehabilitator of the insurer the excess, if any, of the deposit over the amount thereof necessary to discharge in full the obligations of the insurer as to policies and contracts for which the deposit is so held, together with the reasonable costs and expenses to be incurred by the commissioner in the discharge of the obligations as provided in this subsection. (e) If the issuing or assuming insurer is insolvent, for the purposes of subsection (d) of this section, the commissioner shall accept and rely upon the records of the insurer as to the identity of persons to whom the deposit is payable under policies and annuity contracts and the amount to which respectively entitled.