Michigan Administrative Code › Department - Insurance and Financial Services › Insurance › Life Insurance Contracts On Variable Basis › Section R. 500.861 - Standards of conduct and conflicts of interest

Current through Vol. 24-12, July 15, 2024
Rule 21. The following apply to standards of conduct and
				  conflict of interest:
(a) Every
				insurer seeking approval to enter into the variable life insurance business in
				this state, shall adopt by formal action of its board of directors, and file
				with the commissioner, a written statement specifying the standards of conduct
				of the insurer, its officers, directors, employees, and affiliates with respect
				to investments of variable life insurance separate accounts and variable life
				insurance operations. Such standards of conduct shall be binding on the insurer
				and those to whom it refers and shall contain at a minimum the items contained
				in subdivision (c) of this rule.
(b) Rules under any provisions of the
				insurance laws of this state or any regulation applicable to the officers and
				directors of insurance companies with respect to conflicts of interest shall
				also apply to members of any separate account's committee or other similar
				body. No officer or director of such company nor any member of any managing
				committee or body of separate account shall receive, directly or indirectly,
				any commission or any other compensation with respect to the purchase or sale
				of assets of such separate account. The board of directors of the insurer is
				responsible for all acts concerning the separate account, except to the extent
				that authority must be exercised by a separate account committee established
				pursuant to section 925(3) of the insurance code of 1956, as amended, being
				S500.925(3) of the Michigan Compiled Laws.
(c) Unless otherwise approved in writing by
				the commissioner in advance of the transaction, with respect to variable life
				insurance separate accounts, an insurer or affiliate thereof shall not:
(i) Sell to, or purchase from, any such
				separate account established by the insurer any securities or other property,
				other than variable life insurance policies.
(ii) Purchase, or allow to be purchased, for
				any such separate account, any securities of which the insurer or an affiliate
				is the issuer.
(iii) Accept any
				compensation, other than a regular salary or wages from such insurer or
				affiliate, for the sale or purchase of securities to or from any such separate
				account other than as provided in subdivision (d)(iii) of R 500.861.
(iv) Engage in any joint transaction,
				participation, or common undertaking whereby such insurer or an affiliate
				participates with such a separate account in any transaction in which an
				insurer or any of its affiliates obtains an advantage in the price or quality
				of the item purchased, in the service received, or in the cost of such service
				and the insurer or any of its other affiliates is disadvantaged in any of these
				respects by the same transaction.
(v) Borrow money or securities from any such
				separate account other than under a policy loan provision.