Current through September 24, 2024
(1) A
domestic company issuing variable contracts shall establish one or more
separate accounts pursuant to T.C.A. §
56-3-501, subject to the following
provisions of this Article:
(a) Except as may
be provided with respect to reserves for guaranteed benefits and funds referred
to in subparagraph (b) hereof, 1. 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 2. 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.
(b) Reserves for 1. benefits guaranteed as to
dollar amount and duration and 2. 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 also
shall not be taken into account in applying the investment limitations
otherwise applicable to the investments of the company. If a variable contract
includes incidental minimum guarantees as referred to in Subparagraph (c) of
paragraph (4) of Rule 0780-1-17-.06, this paragraph shall apply only to the
reserve for any excess of such minimum guarantees over the reserves for the
benefits that would be payable under the contract if there were no such minimum
guarantees.
(c) With respect to 75%
of the market value of the total assets in a separate account, 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, would exceed 10% of the market value of the
assets of said separate account; provided, however, that the Commissioner may
waive such limitation if, in his opinion, such waiver will not render the
operation of such separate account hazardous to the public or the policyholders
in this State.
(d) 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, will own more than 10% 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.
(e) The same separate account may not be used
for both variable annuities and variable life insurance.
(f) The limitations provided in Subparagraphs
(c), (d), and (e) above 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, provided that the investments of such
investment company comply in substance with Subparagraphs (c) and (d) hereof.
(2) 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, 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 clauses 1.and 2.
of Subparagraph (b) of paragraph (1) shall be valued in accordance with the
rules otherwise applicable to the company's assets.
(3) If 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.
(4) 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 registered under the Investment Company Act
of 1940 and held in such separate accounts in accordance with instructions from
persons having interests in such accounts 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 its assets.
A company, committee, board or other body may make 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 hazardous to the public or the company's policyholders in this
State.
(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 to securities
having a valuation which could be readily determined in the market place,
provided that such transfer of securities is approved by the Commissioner. The
Commissioner may authorize other transfers among such accounts if, in his
opinion, such transfers would not be inequitable.
(6) The company shall maintain in each such
separate account assets with a value at least equal to the reserve and other
contract liabilities with respect to such account, except as may otherwise be
approved by the Commissioner.
(7)
Rules under any provision of the Insurance Laws of this State 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, board or other similar body. No officer or director of such company
nor any member of the committee, board or body of a separate account shall
receive directly or indirectly any commission or any other compensation with
respect to the purchase or sale of assets of such separate account.
Authority: T.C.A. §
56-3-508.
