§431:10D-118  Variable contracts.  (a) 
A domestic life insurance company may, by or pursuant to resolution of its
board of directors, establish one or more separate accounts, and may allocate
thereto amounts, including without limitation proceeds applied under optional
modes of settlement or under dividend options, to provide for life insurance or
annuities (and benefits incidental thereto), payable in fixed or variable
amounts or both, subject to the following:



(1)  The income, gains and losses, realized or
unrealized, from assets allocated to a separate account shall be credited to or
charged against the account, without regard to other income, gains or losses of
the company.



(2)  Except as hereinafter provided, 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;
provided that to the extent that the company's reserve liability with regard to
(A) benefits guaranteed as to amount and duration, and (B) funds guaranteed as
to principal amount or stated rate of interest is maintained in any separate
account, a portion of the assets of such separate account at least equal to such
reserve liability shall be, except as the commissioner may otherwise approve,
invested, in accordance with the laws of this State governing the investments
of life insurance companies.  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.



(3)  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 or other written
agreement applicable to such separate account; provided that unless otherwise
approved by the commissioner, a portion of the assets of such separate account
equal to the company's reserve liability with regard to the guaranteed benefits
and funds referred to in [subparagraphs] (A) and (B) of subsection (a)(2), if
any, shall be valued in accordance with the rules otherwise applicable to the
company's assets.



(4)  Amounts allocated to a separate account in the
exercise of the power granted by this section shall be owned by the company,
and the company shall not be, nor hold itself out to be, a trustee with respect
to such amounts.  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.



(5)  No sale, exchange or other transfer of assets may
be made by a company between any of its separate accounts or between any other
investment account and one or more of its separate accounts unless, in case of
a transfer into a separate account, such transfer is made solely to establish
the account or to support the operation of the contracts with respect to the
separate account to which the transfer is made, and unless such transfer,
whether into or from a separate account, is made (A) by a transfer of cash, or
(B) by a transfer of securities having a readily determinable market value,
provided that such transfer of securities is approved by the commissioner.  The
commissioner may approve other transfers among such accounts, if in the
commissioner's opinion, such transfers would not be inequitable.



(6)  To the extent such company deems it necessary to
comply with any applicable federal or state laws, such company, with respect to
any separate account, including without limitation any separate account which
is a management investment company or a unit investment trust, may provide for
persons having an interest therein appropriate voting and other rights and
special procedures for the conduct of the business of such account, including
without limitation special rights and procedures relating to investment policy,
investment advisory services, selection of independent public accountants, and
the selection of a committee, the members of which need not be otherwise
affiliated with such company, to manage the business of such account.



(b)  (1)  Any variable contract providing benefits
payable in variable amounts delivered or issued for delivery in this State
shall contain a statement of the essential features of the procedures to be
followed by the insurance company in determining the dollar amount of such
variable benefits.  Any such contract, including a group contract and any
certificate in evidence of variable benefits issued thereunder, shall state
that such dollar amount will vary to reflect investment experience and shall
contain on its first page a statement to the effect that the benefits
thereunder are on a variable basis.



(2)  Variable contracts delivered or issued for
delivery in this State may include as an incidental benefit provision for
payment on death during the deferred period of an amount not in excess of the
greater of the sum of the premiums or stipulated payments paid under the
contract or the value of the contract at time of death.  Any such provision
shall not be deemed to be life insurance and therefore not subject to the
provisions of this code governing life insurance carriers.  A provision for any
other benefit on death during the deferred period shall be subject to such
insurance provisions.



(c)  No company shall deliver or issue for
delivery within this State contracts under this section unless it is licensed
or organized to do a life insurance or annuity business in this State, and the
commissioner is satisfied that its condition or method of operation in
connection with the issuance of such contracts will not render its operation
hazardous to the public or its policyholders in this State.  In this
connection, the commissioner shall consider among other things:



(1)  The history and financial condition of the
company;



(2)  The character, responsibility and fitness of the
officers and directors of the company; and



(3)  The law and regulation under which the company is
authorized in the state of domicile to issue variable contracts.



A company which issues variable contracts and which
is a subsidiary of, or affiliated through common management or ownership with,
another life insurance company authorized to do business in this State shall be
deemed to have met the provisions of this subsection if either it or the parent
or affiliated company meets the requirements of this subsection.



(d)  Notwithstanding any other provision of
law, the commissioner shall have sole and exclusive authority to regulate the
issuance and sale of variable contracts and to provide for licensing of persons
selling such contracts, and to issue such reasonable rules and regulations as
may be appropriate to carry out the purposes and provisions of this section.



(e)  The provisions of section 431:10D-101
through section 431:10D-106 and section 431:10D-109 shall be inapplicable to
variable contracts, nor shall any provision in this code requiring contracts to
be participating be deemed applicable to variable contracts.  The commissioner,
by regulation, may require that any individual variable contract, delivered or
issued for delivery in this State, contain provisions as to grace period,
reinstatement or nonforfeiture which are appropriate to a variable contract. 
Except as otherwise provided in this section, all pertinent provisions of this
code shall apply to separate accounts and contracts relating thereto.  The
reserve liability for variable contracts shall be established in accordance
with actuarial procedures that recognize the variable nature of the benefits
provided and any mortality guarantees. [L 1987, c 347, pt of §2]