The insurer must disclose in writing, prior to or
contemporaneously with delivery of the policy, charges that may be made against
the separate account, including, but not limited to, the following:
a. taxes or reserves for taxes attributable
to investment gains and income of the separate account;
b. actual cost of reasonable brokerage fees
and similar direct acquisition and sale costs incurred in the purchase or sale
of separate account assets;
c.
costs of coverage and the release of separate account liabilities;
d. charges for administrative expenses and
investment management expenses, including internal costs attributable to the
investment management of assets of the separate account;
e. a charge for any mortality or expense
guarantees;
f. any amounts in
excess of those required to be held in the separate accounts; and
g. charges for incidental insurance benefits.
Every insurer seeking approval to enter into the variable
annuity business in this state shall adopt by formal action of its Board of
Directors a written statement specifying the Standards of Conduct of the
insurer, its officers, directors, employees, and affiliates with respect to the
purchase or sale of investments of separate accounts. Such Standards of Conduct
shall be binding on the insurer and those to whom it refers. A code or codes of
ethics meeting the requirements of Section 17(j) under the Investment Company
Act of 1940 and applicable rules and regulations thereunder shall satisfy the
provisions of this Section.
Rules under any provision of the Insurance Code of Maine or
any regulation applicable to the officers and directors of insurance companies
with respect to conflicts of interest shall also apply to members of any
separate account's committee or other similar body.
An insurer shall not enter into a contract under which any
person undertakes, for a fee, to regularly furnish investment advice to such
insurer with respect to its separate accounts maintained for variable annuity
contracts unless:
a. the person
providing such advice is registered as an investment adviser under the
Investment Advisers Act of 1940; or
b. the person providing such advice is an
investment manager under the Employee Retirement Income Security Act of 1974
with respect to the assets of each employee benefit plan allocated to the
separate account; or
c. the insurer
has filed with the Superintendent and continues to file annually the following
information and statements concerning the proposed adviser:
(1) the name and form of organization, state
of organization, and its principal place of business;
(2) the names and addresses of its partners,
officers, directors, and persons performing similar functions or, if such an
investment adviser be an individual, of such individual;
(3) a written Standard of Conduct complying
in substance with the requirements of Section 8 of this Article which has been
adopted by the investment adviser and is applicable to the investment adviser,
its officers, directors, and affiliates;
(4) a statement provided by the proposed
adviser as to whether the adviser or any person associated therewith:
(A) has been convicted within ten years of
any felony or misdemeanor arising out of such person's conduct as an employee,
salesman, officer or director of an insurance company, a banker, an insurance
agent, a securities broker, or an investment adviser involving embezzlement,
fraudulent conversion, or misappropriation of funds or securities, or involving
the violation of Section 1341, 1342, or 1343 of Title 18 of United States
Code;
(B) has been permanently or
temporarily enjoined by order, judgment, or decree of any court of competent
jurisdiction from acting as an investment adviser, underwriter, broker, or
dealer, or as an affiliated person or as an employee of any investment company,
bank, or insurance company, or from engaging in or continuing any conduct or
practice in connection with any such activity;
(C) has been found by a federal or state
regulatory authority to have willfully violated or have acknowledged willful
violation of any provision of federal or state securities laws or state
insurance laws or of any rule or regulation under any such laws; or
(D) has been censured, denied an investment
adviser registration, had a registration as an investment advisor revoked or
suspended, or been barred or suspended from being associated with an investment
adviser by order of federal or state regulatory authorities; and
d. such investment
advisory contract shall be in writing and provide that it may be terminated by
the insurer without penalty to the insurer or the separate account upon no more
than sixty days' written notice to the investment adviser. The Superintendent
may, after notice and opportunity for hearing, by order require such investment
advisory contract to be terminated if he or she deems continued operation
thereunder to be hazardous to the public or the insurer's
policyholders.
