Code of Massachusetts Regulations › 211 CMR - DIVISION OF INSURANCE › Title 211 CMR 95.00 - Variable Life Insurance › Section 95.03 - Separate Accounts

Current through Register 1525, July 5, 2024
Any insurer issuing variable life insurance shall establish one
				or more separate accounts pursuant to M.G.L. c. 175, §§ 132F or 132G
				or pursuant to the corresponding section of the insurance law of the state of
				domicile of a foreign or alien insurer. Every separate account established for
				the funding of variable life insurance policies pursuant to M.G.L. c. 175,
				§§ 132F or 132G shall be subject to the following provisions:
(1) Except as may otherwise be permitted in
			 writing by the Commissioner, every insurer shall maintain in each separate
			 account assets with a value at least equal to the greater of the valuation
			 reserves for the variable portion of the variable life insurance policies or
			 the benefit base for such policies and other separate account liabilities with
			 respect to such account.
(2) The
			 Commissioner may disapprove any separate account that he or she deems to be
			 likely to render the operation of variable life insurance hazardous to the
			 public or the insurer's policyholders.
(3) The assets of such separate account shall
			 be valued at least as often as variable benefits are determined but in any
			 event at least monthly.
(4)
			 Notwithstanding the restrictions and limitations on investments generally
			 imposed by M.G.L. c. 175, §§ 132F or 132G, the assets allocated to
			 any separate account may be invested in the securities of an investment company
			 subject to or registered pursuant to the Federal Investment Company Act of
			 1940, as amended, or other pools of investment assets, provided that the
			 investments and investment policies of such investment companies comply
			 substantially with applicable portions of
			 211 CMR
			 95.00, and further provided that the insurance company
			 has satisfied the Commissioner that such investment by the separate account is
			 not hazardous to the public or the policyholders of the insurance company in
			 the Commonwealth.
(5) The separate
			 account shall have sufficient net investment income and readily marketable
			 assets to meet anticipated withdrawals under policies funded by the
			 accounts.
(6) Conflicts of interest
			 rules under any provision of M.G.L. c. 175 or any regulation promulgated
			 thereunder which are applicable to the officers or directors of insurance
			 companies shall also apply to the members of the committee, board or other
			 similar body of every separate account and investment advisor. No officer or
			 director of any company maintaining a separate account nor any member of the
			 committee, board or other similar body of the separate account or investment
			 advisor shall receive, in addition to his fixed salary or compensation, any
			 commission, other compensation, money or valuable thing, either directly or
			 indirectly, with respect to the purchase, sale or loan of the assets of the
			 separate account.
(7) If no law or
			 other regulation provides for the custody of separate accounts assets and if
			 such insurer is not the custodian of such separate account assets, all
			 contracts for custody of such assets shall be in writing and shall be made
			 available to the Commissioner upon his or her request and shall be subject to
			 his or her disapproval.
(8) No
			 insurer knowingly shall, without the prior written approval of the
			 Commissioner, contract with or employ in any material connection with the
			 handling of separate account assets any person who:
(a) within the last ten years has been
			 convicted of any felony or a misdemeanor arising out of the conduct of such
			 person involving embezzlement, fraudulent conversion, or misappropriation of
			 funds or securities or involving violation of
			 18 U.S.C. §§
										1341,
			 1342,
			 or
			 1343;
(b) within the last ten years has been found
			 by any state regulatory authority to have violated, has acknowledged violation
			 of, or has entered into any consent decree or agreement with any state
			 regulatory, investigatory or prosecutorial authority based on any allegations
			 of violation of, any provisions of any state insurance law involving fraud,
			 deceit, or knowing misrepresentation; or
(c) within the last ten years has been found
			 by federal or state regulatory authorities to have violated, has acknowledged
			 violation of, or has entered into any consent decree or agreement with any
			 state or federal regulatory, investigatory or prosecutorial authority based on
			 any allegations of violation of, any provision of federal or state securities
			 laws involving fraud, deceit, or knowing misrepresentation.