20-2602

20-2602. Requirements applicable to insurers
issuing variable life insurance

A. An insurer shall not deliver or issue for delivery in this state a variable life
insurance policy unless all of the following apply:

1. The insurer is licensed to transact life insurance business in this state.

2. The director gives written approval to the insurer for the issuance of variable
life insurance policies in this state. The director shall grant the written approval
only after finding 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 that the insurer proposes to supply consulting, investment,
administrative or custodial services to the insurer will reasonably result in the
competent operation of the variable life insurance business of the insurer in this state.

(c) The financial condition of the insurer and its method of operation in
connection with the issuance of variable life policies is not likely to harm the public
or its policyholders in this state. The director shall consider at least the following:

(i) The insurer's history of operation and financial condition.

(ii) The qualifications, fitness, character, responsibility, reputation and
experience of the officers, directors and other management personnel of the insurer and
of those persons or firms that the insurer proposes to supply consulting, investment,
administrative or custodial services to the insurer.

(iii) The applicable law 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 is deemed to be its state of domicile.

(iv) If the insurer is a subsidiary of or is affiliated by common management or
ownership with another company, the insurer's relationship to the other company and the
degree to which the requesting insurer and the other company meet these standards.

B. Before delivering or issuing for delivery in this state a variable life
insurance policy, an insurer shall file the following information with the director:

1. Copies and a general description of the variable life insurance policies the
insurer intends to issue.

2. A general description of the insurer's methods of operation of the variable life
insurance business, including the methods of policy distribution and the names of those
persons or firms that the insurer proposes to supply consulting, investment,
administrative, custodial or distribution services to the insurer.

3. With respect to a separate account that the insurer maintains for any variable
life insurance policy, a statement of the investment policy that the issuer intends to
follow for the investment of the assets that are held in the separate account and a
statement of the procedures for changing the investment policy. The statement of
investment policy shall include a description of the investment objectives that are
intended for the separate account.

4. A description of any contemplated investment advisory services that satisfies
section 20-2606, subsection L.

5. A copy of the statutes and rules of the insurer's state of domicile under which
the insurer is authorized to issue variable life insurance policies, unless the insurer
is domiciled in this state.

6. A completed national association of insurance commissioners' uniform
biographical data form for the officers and directors of the insurer.

7. A statement that is completed by the insurer's actuary and that describes the
mortality and expense risks that the insurer will bear under the policy.

8. A statement that describes the method of computation of cash values and other
nonforfeiture benefits if not described in the policy.

C. Each insurer that seeks to enter into the variable life insurance business in
this state shall establish and maintain a written statement and shall specify in the
statement the standards of suitability the insurer will use. The standards of
suitability shall specify the following:

1. That an insurer shall not make a recommendation to an applicant to purchase a
variable life insurance policy.

2. That a variable life insurance policy shall not be issued if after the insurance
producer making the recommendation or the insurer considers the applicant's insurance and
investment objectives, financial situation and needs and any other information known to
the insurer or the insurance producer, the insurer or insurance producer determines that
the purchase of the policy is unsuitable for the applicant.

D. An insurer authorized to transact variable life insurance business in this state
shall not use any sales material, advertising material, descriptive literature or other
material of any kind in connection with its variable life insurance business in this
state that is false, misleading, deceptive or inaccurate. Variable life insurance sales
material, advertising material and descriptive literature are subject to section 20-1110,
subsection E.

E. A material contract that is entered into between an insurer and a supplier of
consulting, investment, administrative, sales, marketing, custodial or other services
with respect to variable life insurance operations shall be in writing and shall state
that on the director's request the supplier of the services shall furnish to the director
any information or reports in connection with the services that would allow the director
to determine if the variable life insurance operations of the insurer are being conducted
in a manner that is consistent with this article.