Mich. Admin. Code R. 500.843 - Qualification of insurer to issue life insurance contracts on variable basis

Rule 3. All of the following requirements are applicable to all insurers that are seeking authority to issue variable life insurance in this state or that have authority to issue variable life insurance in this state:

(a) An insurer shall not deliver or issue for delivery in this state any variable life insurance policy unless both of the following requirements are satisfied:

(i) The insurer has a certificate of authority to engage in the life insurance business in this state.

(ii) The insurer has obtained the written approval of the commissioner for the issuance of variable life insurance policies in this state.

(b) The commissioner shall grant written approval for the issuance of variable life insurance only after he or she has found that all of the following requirements are satisfied:

(i) The plan of operation for the issuance of variable life insurance policies is not unsound.

(ii) The general character, reputation, and experience of the management and those persons or firms proposed to supply consulting, investment, administrative, or custodial services to the insurer are such as to reasonably assure competent operation of the variable life insurance business of the insurer in this state.

(iii) The present and foreseeable future financial condition of the insurer and its method of operation in connection with the issuance of such policies are not likely to render its operation hazardous to the public or its policyholders in this state. The commissioner shall consider all of the following factors:

(A) The history of operation and financial condition of the insurer.

(B) The qualifications, fitness, character, responsibility, reputation, and experience of the officers and directors and other management of the insurer and those persons or firms proposed to supply consulting, investment, administrative, or custodial services to the insurer.

(C) The applicable law and regulations under which the insurer is authorized in its state of domicile to issue variable life insurance policies. The state of entry of an alien insurer shall be deemed its state of domicile for this purpose.

(D) If the insurer is a subsidiary of, or is affiliated by common management or ownership with, another company, its relationship to such other company and the degree to which the requesting insurer, as well as the other company, meets these standards.

(E) Other relevant information.

(c) Before any insurer shall deliver or issue for delivery any variable life insurance policy in this state, it shall submit all of the following information for the consideration of the commissioner in making the determination required by subdivision (b) of this rule:

(i) Copies and a general description of the variable life insurance policies it intends to issue.

(ii) A general description of the methods of operation of the variable life insurance business of the insurer, including methods of distribution of policies, and the names of those persons or firms proposed to supply consulting, investment, administrative, distributive, or custodial services to the insurer.

(iii) With respect to any separate account maintained by an insurer for any variable life insurance policy, a statement of the investment policy the insurer intends to follow for the investment of the assets held in such separate account. The statement shall include a description of the investment objective and orientation intended for the separate account.

(iv) A description of any investment advisory services contemplated as required by R 500.862.

(v) If requested by the commissioner, a copy of the statutes and regulations of the state of domicile of the insurer under which it is authorized to issue variable life insurance policies.

(vi) A certification by the domiciliary regulatory authority that the insurer is in compliance with the laws and regulations applicable to variable life insurance.

(vii) If requested by the commissioner, biographical data of officers and directors of the insurer, which shall be submitted on the national association of insurance commissioners uniform biographical data form.

(viii) A statement describing the procedures for changing the investment policy of any separate account maintained by an insurer for any variable life insurance policy.

(ix) A statement of the insurer's actuary describing the mortality and expense risks which the insurer will bear under the policy.

(x) Such additional information as the commissioner may require.

(d) After the commissioner finds that the law or regulation in the place of domicile of a foreign company provides protection to the policyholders and the public which is substantially equal to that provided by these rules, the commissioner may determine that compliance with such law or regulation of the domiciliary constitutes compliance with these rules.

Notes

Mich. Admin. Code R. 500.843

1979 AC; 1988 AACS