The following requirements are applicable to all insurers
either seeking authority to issue variable life insurance in this state or
having authority to issue variable life insurance in this state.
A. Licensing and Approval to do Business in
this State.
An insurer shall not deliver or issue for delivery in this
state any variable life insurance policy unless:
1. the insurer is licensed to do a life
insurance business in this state;
2. the insurer has obtained the written
approval of the
Commissioner for the issuance of variable life insurance
policies in this state. The
Commissioner shall grant such written approval only
after he has found that:
a. the plan of
operation for the issuance of variable life insurance policies is not
unsound;
b. 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; and
c. the present and foreseeable
future financial condition of the insurer and its method of operation in
connection with the issuance of such policies is not likely to render its
operation hazardous to the public or its policyholders in this state. The
Commissioner shall consider, among other things:
i. the history of operation and financial
condition of the insurer;
ii. 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;
iii. 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; and
iv. 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, meet these standards.
3. Before any insurer
shall deliver or issue for delivery any variable life insurance policy within
this state, it shall have assets in excess of $20,000,000.00 and in addition
thereto, have and maintain an amount of capital and surplus, if a stock
company, or an amount of surplus, if a mutual company, of at least
3,000,000.00. This provision may be waived if the Commissioner is satisfied
that the condition of such company and its method of operation in the issuance
of variable life insurance policies otherwise affords adequate protection to
contract holders; provided, however, any waiver shall be granted only to a
company that restricts their variable life insurance contracts to those
regulated by the Securities and Exchange Commission.
B. Filing for Approval to do Business in This
State.
1. Before any insurer shall deliver or
issue for delivery any variable life insurance policy in this state, it shall
file with this Department the following information for the consideration of
the Commissioner in making the determination required by Subsection (a)(2) of
this Section.
2. copies of and a
general description of the variable life insurance policies it intends to
issue;
3. If requested by the
Commissioner, 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, custodial or distribution services to the
insurer;
4. If requested by the
Commissioner, with respect to any separate account maintained by an insurer for
any variable life insurance policy, a statement of the investment policy the
issuer intends to follow for the investment of the assets held in such separate
account, and a statement of procedures for changing such investment policy. The
statement of investment policy shall include a description of the investment
objectives intended for the separate account;
5. If requested by the Commissioner, a
description of any investmentadvisory services contemplated as required by
Subsection (j) of Section 6;
6. 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; and
7. If
requested by the Commissioner, biographical data with respect to officers and
directors of the insurer on the National Association of Insurance Commissioners
Uniform Biographical Data Form; and
8. If requested by the Commissioner, a
statement of the insurer's actuary describing the mortality and expense risks
which the insurer will bear under the policy.
9. Any other information which the
Commissioner may require with respect to making the determination required by
this regulation as well as the other applicable laws and regulations.
C. Standards of Suitability.
Every insurer seeking approval to enter into the variable
life insurance business in this state shall establish and maintain a written
statement specifying the Standards of Suitability to be used by the insurer.
Such Standards of Suitability shall specify that no recommendations shall be
made to an applicant to purchase a variable life insurance policy and that no
variable life insurance policy shall be issued in the absence of reasonable
grounds to believe that the purchase of such policy is not unsuitable for such
applicant on the basis of information furnished after reasonable inquiry of
such applicant concerning the applicant's insurance and investment objectives,
financial situation and needs and any other information known to the insurer or
to the agent making the recommendation.
1. Use of Sales Materials.
An insurer authorized to transact variable life insurance
business in this state shall not use any sales material, advertising material,
or descriptive literature or other materials of any kind in connection with its
variable life insurance business in this state which is false, misleading,
deceptive, or inaccurate.
D. Requirements Applicable to Contractual
Services.
Any material contract between an insurer and suppliers of
consulting, investment, administrative, sales, marketing, custodial, or other
services with respect to variable life insurance operations shall be in writing
and provide that the supplier of such services shall furnish the Commissioner
with any information or reports in connection with such services which the
Commissioner may request in order to ascertain whether the variable life
insurance operations of the insurer are being conducted in a manner consistent
with these regulations and any other applicable law or regulation.
E. Reports to the
Commissioner.
1. Any insurer licensed to transact the
business of variable life insurance in this state shall submit to the
Commissioner, in addition to any other materials which may be required by this
regulation or any other applicable laws or regulations:
a. an Annual Statement of the business of its
separate account or accounts in such form as may be prescribed by the National
Association of Insurance Commissioners; and
b. prior to the use in this state any
information furnished to applicants as provided for in Section 7; and
c. prior to the use in this state
the form of any of the Reports to Policyholders as provided for in Section 9;
and
d. such additional information
concerning its variable life insurance operations or its separate accounts as
the Commissioner shall deem necessary.
2. Any material submitted to the Commissioner
under this Section shall be disapproved if it is found to be false, misleading,
deceptive, or inaccurate in any material respect and, if previously
distributed, the Commissioner shall require the distribution of amended
material.
F. Authority
of
Commissioner to Disapprove.
Any material required to be filed with and approved by the
Commissioner shall be subject to disapproval if at any time it is found by him
not to comply with the standards established by this
regulation.
