Article 4.--GENERAL PROVISIONS RELATING TO LIFE INSURANCE COMPANIES
40-436.Establishment of separate accounts; investment and handling;contracts for benefits in variable amounts; limitation and regulation ofissuance; authority of commissioner; rules and regulations.(a) Any domestic life insurance company may after adoption of aresolution by its board of directors, establish one or more separateaccounts, and may allocate to such separate account or accounts anyamounts, including without limitation proceeds applied under optional modesof settlement or under dividend options, paid to the company which are tobe applied under the terms of an individual or group life or annuitycontract, funding agreement or guaranteed investment contract, issued inconnection therewith to provide benefits payable infixed or in variable amounts, or in both, and such contracts may provideother benefits.
(b) The amounts allocated to each such account and accumulations thereonmay be invested and reinvested in any class of investments which may beauthorized in the contracts without regard to any requirements orlimitations prescribed by the laws of this state governing the investmentsof life insurance companies. To theextent that thecompany's reserve liability with regard to (1) benefits guaranteed as toamount and duration, and (2) funds guaranteed as to principal amount orstated rate of interest is maintained in any separate account, a portion ofthe assets of such separate account at least equal to such reserveliability shall be invested in accordance with the laws of this stategoverning the investments of life insurance companies. The investments insuch separate account or accounts shall not be taken into account inapplying the investment limitations applicable to other investments of thecompany.
(c) The income, if any, and gains and losses, realized or unrealized, oneach account shall be credited to or charged against the amounts allocatedto the account in accordance with the contracts, without regard to otherincome, gains or losses of the company.
(d) Assets allocated to a separate account shall be valued at theirmarket value on the date of valuation, or if there is no readily availablemarket, then in accordance with the terms of the contracts. The portionof the assets of such separate account at leastequal tothe company's reserve liability with regard to the guaranteed benefits andfunds referred to in subsection (b) hereof, if any, shall be valued inaccordance with the rules otherwise applicable to the company's assets.
(e) Amounts allocated to a separate account in the exercise of the powergranted by this act shall be owned by the company, and the company shallnot be, nor hold itself out to be, a trustee with respect to such amounts.If and to the extent so provided under the applicable contracts, thatportion of the assets of any such separate account equal to the reservesand other contract liabilities with respect to such account shall not bechargeable with liability arising out of any other business the company mayconduct.
(f) The company shall maintain in each such separate account assets witha value at least equal to the reserves and other contract liabilities withrespect to such account, except as may otherwise be approved by thecommissioner of insurance. No sale, exchange or other transfer of assetsmay be made by a company between any of its separate accounts or betweenany other investment account and one or more of its separate accountsunless, in case of a transfer into a separate account, such transfer ismade solely to establish the account or to support the operation of thecontracts with respect to the separate account to which the transfer ismade, and unless such transfer, whether into or from a separate account, ismade (1) by a transfer of cash, or (2) by a transfer of securities having areadily determinable market value, provided that such transfer ofsecurities is approved by the commissioner. The commissioner may approveother transfers among such accounts if, in his opinion, such transferswould not be inequitable.
(g) If any contract provides for payment of benefits in variableamounts, it shall contain a statement of the essential features of theprocedure to be followed by the company in determining the dollar amount ofsuch variable benefits. Any such contract, including a group contract, andany certificate issued thereunder shall state that such dollar amount maydecrease or increase and shall contain on its first page a statement thatthe benefits thereunder are on a variable basis.
(h) A foreign or alien life insurance company authorized to do businessin this state may be authorized to issue or deliver contracts in this stateproviding for payments which vary directly according to investmentexperience only if authorized to issue such contracts under the laws of itsdomicile.
(i) No domestic life insurance company shall be authorized to issue suchcontracts, and no foreign or alien life insurance company shall beauthorized to issue or deliver such contracts in this state, until suchcompany has satisfied the commissioner that its condition and methods ofoperation in connection with the issuance of such contracts will not besuch as to render its operation hazardous to the public or to itspolicyholders in this state. In determining the qualification of a companyto issue or deliver such contracts in this state, the commissioner shallconsider, among other things, the history and financial condition of thecompany; the character, responsibility, and general fitness of the officersand directors of the company; and in the case of a foreign or aliencompany, whether the regulation provided by the laws of its domicileprovides a degree of protection to policyholders and the publicsubstantially equal to that provided by this section and the rules andregulations issued by the commissioner pursuant thereto. The state of entryof an alien company shall be deemed its place of domicile for this purpose.
(j) Every life insurance company which issues or delivers such contractsin this state shall file with the commissioner, in addition to the annualstatement required by K.S.A. 40-225, and amendments thereto, such otherperiodic or special reportsas the commissioner may prescribe.
(k) Any domestic life insurance company which establishes one or moreseparate accounts pursuant to this section, may amend its charter or bylawsto provide for special voting rights and procedures for the owners ofcontracts under such separate account relating to investment policy,investment advisory services and selection of independent publicaccountants, in relation to the administration of the assets in any suchseparate account and such other matters as the company deems necessary inthe management of the assets in any such separate account. This provisionshall not in any way affect existing laws pertaining to the voting rightsof the company's policyholders.
(l) The commissioner shall have the sole and exclusive jurisdiction andauthority to regulate the issuance and sale of such contracts and topromulgate such reasonable rules and regulations as may be necessary tocarry out the purposes and provisions of this act, and such contracts, thecompanies which issue them, and the agents or other persons who sell them,shall not be subject to the provisions of article 12 of chapter 17 of theKansas Statutes Annotated, and amendments thereto, nor to thejurisdiction of the securitiescommissioner of this state.
History: L. 1967, ch. 259, § 1; L. 1968, ch. 382, § 1;L. 1972, ch. 182, § 1;L. 2005, ch. 42, § 2; July 1.
Article 4.--GENERAL PROVISIONS RELATING TO LIFE INSURANCE COMPANIES
40-436.Establishment of separate accounts; investment and handling;contracts for benefits in variable amounts; limitation and regulation ofissuance; authority of commissioner; rules and regulations.(a) Any domestic life insurance company may after adoption of aresolution by its board of directors, establish one or more separateaccounts, and may allocate to such separate account or accounts anyamounts, including without limitation proceeds applied under optional modesof settlement or under dividend options, paid to the company which are tobe applied under the terms of an individual or group life or annuitycontract, funding agreement or guaranteed investment contract, issued inconnection therewith to provide benefits payable infixed or in variable amounts, or in both, and such contracts may provideother benefits.
(b) The amounts allocated to each such account and accumulations thereonmay be invested and reinvested in any class of investments which may beauthorized in the contracts without regard to any requirements orlimitations prescribed by the laws of this state governing the investmentsof life insurance companies. To theextent that thecompany's reserve liability with regard to (1) benefits guaranteed as toamount and duration, and (2) funds guaranteed as to principal amount orstated rate of interest is maintained in any separate account, a portion ofthe assets of such separate account at least equal to such reserveliability shall be invested in accordance with the laws of this stategoverning the investments of life insurance companies. The investments insuch separate account or accounts shall not be taken into account inapplying the investment limitations applicable to other investments of thecompany.
(c) The income, if any, and gains and losses, realized or unrealized, oneach account shall be credited to or charged against the amounts allocatedto the account in accordance with the contracts, without regard to otherincome, gains or losses of the company.
(d) Assets allocated to a separate account shall be valued at theirmarket value on the date of valuation, or if there is no readily availablemarket, then in accordance with the terms of the contracts. The portionof the assets of such separate account at leastequal tothe company's reserve liability with regard to the guaranteed benefits andfunds referred to in subsection (b) hereof, if any, shall be valued inaccordance with the rules otherwise applicable to the company's assets.
(e) Amounts allocated to a separate account in the exercise of the powergranted by this act shall be owned by the company, and the company shallnot be, nor hold itself out to be, a trustee with respect to such amounts.If and to the extent so provided under the applicable contracts, thatportion of the assets of any such separate account equal to the reservesand other contract liabilities with respect to such account shall not bechargeable with liability arising out of any other business the company mayconduct.
(f) The company shall maintain in each such separate account assets witha value at least equal to the reserves and other contract liabilities withrespect to such account, except as may otherwise be approved by thecommissioner of insurance. No sale, exchange or other transfer of assetsmay be made by a company between any of its separate accounts or betweenany other investment account and one or more of its separate accountsunless, in case of a transfer into a separate account, such transfer ismade solely to establish the account or to support the operation of thecontracts with respect to the separate account to which the transfer ismade, and unless such transfer, whether into or from a separate account, ismade (1) by a transfer of cash, or (2) by a transfer of securities having areadily determinable market value, provided that such transfer ofsecurities is approved by the commissioner. The commissioner may approveother transfers among such accounts if, in his opinion, such transferswould not be inequitable.
(g) If any contract provides for payment of benefits in variableamounts, it shall contain a statement of the essential features of theprocedure to be followed by the company in determining the dollar amount ofsuch variable benefits. Any such contract, including a group contract, andany certificate issued thereunder shall state that such dollar amount maydecrease or increase and shall contain on its first page a statement thatthe benefits thereunder are on a variable basis.
(h) A foreign or alien life insurance company authorized to do businessin this state may be authorized to issue or deliver contracts in this stateproviding for payments which vary directly according to investmentexperience only if authorized to issue such contracts under the laws of itsdomicile.
(i) No domestic life insurance company shall be authorized to issue suchcontracts, and no foreign or alien life insurance company shall beauthorized to issue or deliver such contracts in this state, until suchcompany has satisfied the commissioner that its condition and methods ofoperation in connection with the issuance of such contracts will not besuch as to render its operation hazardous to the public or to itspolicyholders in this state. In determining the qualification of a companyto issue or deliver such contracts in this state, the commissioner shallconsider, among other things, the history and financial condition of thecompany; the character, responsibility, and general fitness of the officersand directors of the company; and in the case of a foreign or aliencompany, whether the regulation provided by the laws of its domicileprovides a degree of protection to policyholders and the publicsubstantially equal to that provided by this section and the rules andregulations issued by the commissioner pursuant thereto. The state of entryof an alien company shall be deemed its place of domicile for this purpose.
(j) Every life insurance company which issues or delivers such contractsin this state shall file with the commissioner, in addition to the annualstatement required by K.S.A. 40-225, and amendments thereto, such otherperiodic or special reportsas the commissioner may prescribe.
(k) Any domestic life insurance company which establishes one or moreseparate accounts pursuant to this section, may amend its charter or bylawsto provide for special voting rights and procedures for the owners ofcontracts under such separate account relating to investment policy,investment advisory services and selection of independent publicaccountants, in relation to the administration of the assets in any suchseparate account and such other matters as the company deems necessary inthe management of the assets in any such separate account. This provisionshall not in any way affect existing laws pertaining to the voting rightsof the company's policyholders.
(l) The commissioner shall have the sole and exclusive jurisdiction andauthority to regulate the issuance and sale of such contracts and topromulgate such reasonable rules and regulations as may be necessary tocarry out the purposes and provisions of this act, and such contracts, thecompanies which issue them, and the agents or other persons who sell them,shall not be subject to the provisions of article 12 of chapter 17 of theKansas Statutes Annotated, and amendments thereto, nor to thejurisdiction of the securitiescommissioner of this state.
History: L. 1967, ch. 259, § 1; L. 1968, ch. 382, § 1;L. 1972, ch. 182, § 1;L. 2005, ch. 42, § 2; July 1.
Article 4.--GENERAL PROVISIONS RELATING TO LIFE INSURANCE COMPANIES
40-436.Establishment of separate accounts; investment and handling;contracts for benefits in variable amounts; limitation and regulation ofissuance; authority of commissioner; rules and regulations.(a) Any domestic life insurance company may after adoption of aresolution by its board of directors, establish one or more separateaccounts, and may allocate to such separate account or accounts anyamounts, including without limitation proceeds applied under optional modesof settlement or under dividend options, paid to the company which are tobe applied under the terms of an individual or group life or annuitycontract, funding agreement or guaranteed investment contract, issued inconnection therewith to provide benefits payable infixed or in variable amounts, or in both, and such contracts may provideother benefits.
(b) The amounts allocated to each such account and accumulations thereonmay be invested and reinvested in any class of investments which may beauthorized in the contracts without regard to any requirements orlimitations prescribed by the laws of this state governing the investmentsof life insurance companies. To theextent that thecompany's reserve liability with regard to (1) benefits guaranteed as toamount and duration, and (2) funds guaranteed as to principal amount orstated rate of interest is maintained in any separate account, a portion ofthe assets of such separate account at least equal to such reserveliability shall be invested in accordance with the laws of this stategoverning the investments of life insurance companies. The investments insuch separate account or accounts shall not be taken into account inapplying the investment limitations applicable to other investments of thecompany.
(c) The income, if any, and gains and losses, realized or unrealized, oneach account shall be credited to or charged against the amounts allocatedto the account in accordance with the contracts, without regard to otherincome, gains or losses of the company.
(d) Assets allocated to a separate account shall be valued at theirmarket value on the date of valuation, or if there is no readily availablemarket, then in accordance with the terms of the contracts. The portionof the assets of such separate account at leastequal tothe company's reserve liability with regard to the guaranteed benefits andfunds referred to in subsection (b) hereof, if any, shall be valued inaccordance with the rules otherwise applicable to the company's assets.
(e) Amounts allocated to a separate account in the exercise of the powergranted by this act shall be owned by the company, and the company shallnot be, nor hold itself out to be, a trustee with respect to such amounts.If and to the extent so provided under the applicable contracts, thatportion of the assets of any such separate account equal to the reservesand other contract liabilities with respect to such account shall not bechargeable with liability arising out of any other business the company mayconduct.
(f) The company shall maintain in each such separate account assets witha value at least equal to the reserves and other contract liabilities withrespect to such account, except as may otherwise be approved by thecommissioner of insurance. No sale, exchange or other transfer of assetsmay be made by a company between any of its separate accounts or betweenany other investment account and one or more of its separate accountsunless, in case of a transfer into a separate account, such transfer ismade solely to establish the account or to support the operation of thecontracts with respect to the separate account to which the transfer ismade, and unless such transfer, whether into or from a separate account, ismade (1) by a transfer of cash, or (2) by a transfer of securities having areadily determinable market value, provided that such transfer ofsecurities is approved by the commissioner. The commissioner may approveother transfers among such accounts if, in his opinion, such transferswould not be inequitable.
(g) If any contract provides for payment of benefits in variableamounts, it shall contain a statement of the essential features of theprocedure to be followed by the company in determining the dollar amount ofsuch variable benefits. Any such contract, including a group contract, andany certificate issued thereunder shall state that such dollar amount maydecrease or increase and shall contain on its first page a statement thatthe benefits thereunder are on a variable basis.
(h) A foreign or alien life insurance company authorized to do businessin this state may be authorized to issue or deliver contracts in this stateproviding for payments which vary directly according to investmentexperience only if authorized to issue such contracts under the laws of itsdomicile.
(i) No domestic life insurance company shall be authorized to issue suchcontracts, and no foreign or alien life insurance company shall beauthorized to issue or deliver such contracts in this state, until suchcompany has satisfied the commissioner that its condition and methods ofoperation in connection with the issuance of such contracts will not besuch as to render its operation hazardous to the public or to itspolicyholders in this state. In determining the qualification of a companyto issue or deliver such contracts in this state, the commissioner shallconsider, among other things, the history and financial condition of thecompany; the character, responsibility, and general fitness of the officersand directors of the company; and in the case of a foreign or aliencompany, whether the regulation provided by the laws of its domicileprovides a degree of protection to policyholders and the publicsubstantially equal to that provided by this section and the rules andregulations issued by the commissioner pursuant thereto. The state of entryof an alien company shall be deemed its place of domicile for this purpose.
(j) Every life insurance company which issues or delivers such contractsin this state shall file with the commissioner, in addition to the annualstatement required by K.S.A. 40-225, and amendments thereto, such otherperiodic or special reportsas the commissioner may prescribe.
(k) Any domestic life insurance company which establishes one or moreseparate accounts pursuant to this section, may amend its charter or bylawsto provide for special voting rights and procedures for the owners ofcontracts under such separate account relating to investment policy,investment advisory services and selection of independent publicaccountants, in relation to the administration of the assets in any suchseparate account and such other matters as the company deems necessary inthe management of the assets in any such separate account. This provisionshall not in any way affect existing laws pertaining to the voting rightsof the company's policyholders.
(l) The commissioner shall have the sole and exclusive jurisdiction andauthority to regulate the issuance and sale of such contracts and topromulgate such reasonable rules and regulations as may be necessary tocarry out the purposes and provisions of this act, and such contracts, thecompanies which issue them, and the agents or other persons who sell them,shall not be subject to the provisions of article 12 of chapter 17 of theKansas Statutes Annotated, and amendments thereto, nor to thejurisdiction of the securitiescommissioner of this state.
History: L. 1967, ch. 259, § 1; L. 1968, ch. 382, § 1;L. 1972, ch. 182, § 1;L. 2005, ch. 42, § 2; July 1.
