North Dakota Administrative Code › Title 45 - Insurance, Commissioner of › Article 45-04 - Life Insurance › Chapter 45-04-02 - Variable Contracts › Section 45-04-02-04 - Separate accounts for variable annuity contracts

Current through Supplement No. 393, July, 2024
A domestic company issuing variable annuity contracts shall
				  establish one or more separate accounts pursuant to North Dakota Century Code
				  sections 26.1-33-13 and 26.1-34-11, subject to the following provisions:
1. Except as may be provided with
				respect to reserves for guaranteed benefits and funds referred to in subsection
				2, amounts allocated to any separate account and accumulations thereon may be
				invested and reinvested without regard to any requirements or limitations
				prescribed by the laws of this state governing the investments of life
				insurance companies and the investments in such separate account or accounts
				shall not be taken into account in applying the investment limitations
				otherwise applicable to the investments of the company.
2. Reserves for benefits guaranteed as to
				dollar amount and duration and funds guaranteed as to principal amount or
				stated rate of interest may be maintained in a separate account if a portion of
				the assets of such separate account at least equal to such reserve liability is
				invested in accordance with the laws and regulations of this state governing
				the investments of life insurance companies. Such portion of the assets shall
				not be taken into account in applying the investment limitations otherwise
				applicable to the investments of the company.
3. No company shall purchase or otherwise
				acquire the securities of any issuer, other than securities issued or
				guaranteed as to principal or interest by the United States, if immediately
				after such purchase or acquisition the market value of such investment,
				together with prior investments of such separate account in such security taken
				at market value, would exceed ten percent of the market value of the total
				assets of said separate account. However, the commissioner may waive such
				limitation if, in the commissioner's opinion, such waiver will not render the
				operation of such separate account hazardous to the policyholders or the public
				in this state.
4. Unless otherwise
				permitted by law or approved by the commissioner, no company shall purchase or
				otherwise acquire for its separate accounts the voting securities of any issuer
				if as a result of such acquisition the insurance company and its separate
				accounts, in the aggregate, would own more than ten percent of the total issued
				and outstanding voting securities of such issuer; provided, that the foregoing
				shall not apply with respect to securities held in separate accounts the voting
				rights in which are exercisable only in accordance with instructions from
				persons having interests in such accounts.
5. The limitations provided in subsections 3
				and 4 shall not apply to the investment with respect to a separate account in
				the securities of an investment company registered under the Investment Company
				Act of 1940, as amended [ 15
				U.S.C. 80a-1 through
				80a-52 ], provided the investments
				of such investment company comply in substance with subsections 3 and 4. In
				determining the percentage of voting securities of any issuer owned by the
				company and its separate accounts for purposes of subsection 4, the voting
				securities of such issuer owned indirectly through investment in an investment
				company shall be added to any such voting securities owned directly by the
				company and its separate accounts.
6. Unless otherwise approved by the
				commissioner, assets allocated to a separate account shall be valued at their
				market value on the date of valuation, or if there is no readily available
				market, then as provided under the terms of the contract or the rules of other
				written agreement applicable to such separate account; provided, that unless
				otherwise approved by the commissioner, the portion, if any, of the assets of
				such separate account equal to the company's reserve liability with regard to
				the benefits and funds referred to in subsection 2 shall be valued in
				accordance with the rules otherwise applicable to the company's assets.
7. If provided, and to the extent
				so provided under the applicable contracts, that portion of the assets of any
				such separate account equal to the reserves and other contract liabilities with
				respect to such account shall not be chargeable with liabilities arising out of
				any other business the company may conduct.
8. Notwithstanding any other provisions of
				law, a company may:
a. With respect to any
				separate account registered with the securities and exchange commission as a
				unit investment trust, exercise voting rights, in connection with any
				securities of a regulated Investment Company Act of 1940, as amended [
				15 U.S.C.
				80a-1 through
				80a-52 ], and held in such
				separate account, in accordance with instructions from persons having interests
				in such account ratably as determined by the company; or
b. With respect to any separate account
				registered with the securities and exchange commission as a management
				investment company, establish for such account a committee, board, or other
				body, the members of which may or may not be otherwise affiliated with such
				company and may be elected to such membership by the vote of persons having
				interests in such account ratably as determined by the company. Such committee,
				board, or other body may have the power, exercisable alone or in conjunction
				with others, to manage such separate account and the investment of assets. A
				company, committee, board, or other body may establish such other provisions in
				respect to any such separate account as may be deemed appropriate to facilitate
				compliance with requirements of any federal or state law now or hereafter in
				effect; provided, that the commissioner approves such provisions as not being
				hazardous to the policyholders or the public in this state.