Section 95.03 - Separate AccountsAny insurer issuing variable life insurance shall establish one or more separate accounts pursuant to M.G.L. c. 175, §§ 132F or 132G or pursuant to the corresponding section of the insurance law of the state of domicile of a foreign or alien insurer. Every separate account established for the funding of variable life insurance policies pursuant to M.G.L. c. 175, §§ 132F or 132G shall be subject to the following provisions:
(1) Except as may otherwise be permitted in writing by the Commissioner, every insurer shall maintain in each separate account assets with a value at least equal to the greater of the valuation reserves for the variable portion of the variable life insurance policies or the benefit base for such policies and other separate account liabilities with respect to such account.(2) The Commissioner may disapprove any separate account that he or she deems to be likely to render the operation of variable life insurance hazardous to the public or the insurer's policyholders.(3) The assets of such separate account shall be valued at least as often as variable benefits are determined but in any event at least monthly.(4) Notwithstanding the restrictions and limitations on investments generally imposed by M.G.L. c. 175, §§ 132F or 132G, the assets allocated to any separate account may be invested in the securities of an investment company subject to or registered pursuant to the Federal Investment Company Act of 1940, as amended, or other pools of investment assets, provided that the investments and investment policies of such investment companies comply substantially with applicable portions of 211 CMR 95.00, and further provided that the insurance company has satisfied the Commissioner that such investment by the separate account is not hazardous to the public or the policyholders of the insurance company in the Commonwealth.(5) The separate account shall have sufficient net investment income and readily marketable assets to meet anticipated withdrawals under policies funded by the accounts.(6) Conflicts of interest rules under any provision of M.G.L. c. 175 or any regulation promulgated thereunder which are applicable to the officers or directors of insurance companies shall also apply to the members of the committee, board or other similar body of every separate account and investment advisor. No officer or director of any company maintaining a separate account nor any member of the committee, board or other similar body of the separate account or investment advisor shall receive, in addition to his fixed salary or compensation, any commission, other compensation, money or valuable thing, either directly or indirectly, with respect to the purchase, sale or loan of the assets of the separate account.(7) If no law or other regulation provides for the custody of separate accounts assets and if such insurer is not the custodian of such separate account assets, all contracts for custody of such assets shall be in writing and shall be made available to the Commissioner upon his or her request and shall be subject to his or her disapproval.(8) No insurer knowingly shall, without the prior written approval of the Commissioner, contract with or employ in any material connection with the handling of separate account assets any person who: (a) within the last ten years has been convicted of any felony or a misdemeanor arising out of the conduct of such person involving embezzlement, fraudulent conversion, or misappropriation of funds or securities or involving violation of 18 U.S.C. §§ 1341, 1342, or 1343;(b) within the last ten years has been found by any state regulatory authority to have violated, has acknowledged violation of, or has entered into any consent decree or agreement with any state regulatory, investigatory or prosecutorial authority based on any allegations of violation of, any provisions of any state insurance law involving fraud, deceit, or knowing misrepresentation; or(c) within the last ten years has been found by federal or state regulatory authorities to have violated, has acknowledged violation of, or has entered into any consent decree or agreement with any state or federal regulatory, investigatory or prosecutorial authority based on any allegations of violation of, any provision of federal or state securities laws involving fraud, deceit, or knowing misrepresentation.(9) Any contract subject to the provisions of 211 CMR 95.03(8) shall be in writing and shall provide that the contract may be terminated if the insurer learns that the other party is within one or more of the categories described in 211 CMR 95.03(8)(a) through (c).(10) All persons with access to the cash, securities, or other assets of the separate account shall be under bond in an amount of not less than $100,000.(11) Investments of the separate account shall be valued at their market value on the date of valuation or at amortized cost if it approximates market value.