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.
003.01 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:
003.01A the insurer is licensed or organized
to do a life insurance business in this state;
003.01B the insurer has obtained the written
approval of the Director for the issuance of variable life insurance policies
in this state. The Director shall grant such written approval only after he has
found that:
003.01B(1) the plan of operation
for the issuance of variable life insurance policies is not unsound;
003.01B(2) 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
003.01B(3) 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:
003.01B(3)(a) the history of operation and
financial condition of the insurer;
003.01B(3)(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;
003.01B(3)(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; and
003.01B(3)(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, meet these standards.
003.02
Filing for Approval to Do Business in This State. The Director may, at his
discretion, require that an insurer, before it delivers or issues for delivery
any variable life insurance policy in this state, file with this Department the
following information for the consideration of the Director in making the
determination required by Subsection
003.01B:
003.02A copies of and a general description
of the variable life insurance policies it intends to issue;
003.02B 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;
003.02C 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, 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;
003.02D a description of
any investment advisory services contemplated as required by Subsection
006.10;
003.02E 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
003.02F biographical data with respect to
officers and directors of the insurer on the National Association of Insurance
Commissioners Uniform Biographical Data Form; and
003.02G a statement of the insurer's actuary
describing the mortality and expense risks which the insurer will bear under
the policy.
003.03
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.
003.04 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.
003.05 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 or 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
regulations.
003.06 Reports
to the Director
Any insurer authorized to transact the business of variable
life insurance in this state shall submit to the Director, in addition to any
other materials which may be required by this regulation or any other
applicable laws or regulations:
003.06A 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
003.06B prior to the use in this state any
Information furnished to Applicants as provided for in Section 007;
and
003.06C prior to the use in
this state the form of any of the Reports to Policyholders as provided for in
Section 009; and
003.06D such
additional information concerning its variable life insurance operations or its
separate accounts as the Director shall deem necessary.
Any material submitted to the Director 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 Director
shall require the distribution of an amended report.
003.07 Authority of Director to
Disapprove
Any material required to be filed with and approved by the
Director shall be subject to disapproval if at any time it is found by him not
to comply with the standards established by this regulation.
