(1) Insurers authorized to deliver or issue for delivery life insurance policies in this state may deliver or issue for delivery one or more funding agreements, but the delivery or issuance for delivery of funding agreements shall not be deemed the business of insurance, life insurance or an annuity or other line of business as set forth in section 44-201, a security as defined in subdivision (15) of section 8-1101, or receipt of gross premiums as set forth in section 77-908. The delivery or issuance for delivery of a funding agreement by an admitted life insurer in this state shall constitute a lawful activity of that insurer that is reasonably related to and incidental to its insurance activities as provided in this section. However, this section shall not authorize any insurer to transact, under the guise of funding agreements, any line of insurance not authorized by its certificate of authority.

(2) No amounts shall be guaranteed or credited under any funding agreement except upon reasonable assumptions as to investment income and expenses and on a basis equitable to all holders of funding agreements of a given class.

(3) Amounts paid to the insurer, and proceeds applied under optional modes of settlement, under funding agreements may be allocated by the insurer to one or more separate accounts.

(4) The Director of Insurance may adopt and promulgate rules and regulations to implement this section, including rules and regulations setting forth the terms and conditions under which an insurer may issue funding agreements.

(5) Notwithstanding any other provision of law, the director shall have sole authority to regulate the issuance and sale of funding agreements, including the persons selling funding agreements on behalf of insurers.

(6) Nothing in this section is intended to affect the order in which allowed claims shall be given preference under section 44-4842. Holders of funding agreements shall retain the priority in allowance of claims described in subdivision (2) of section 44-4842.

(7) For purposes of this section, funding agreement means an agreement that authorizes an admitted life insurer to accept funds and that provides for an accumulation of those funds for the purpose of making one or more payments at future dates in amounts that are not based on mortality or morbidity contingencies. Funding agreement does not include any agreement in connection with the funding of one or more payments that are excludable from the gross income of the recipient under section 104(a)(2) of the Internal Revenue Code.