§ 26-16-502 — Allocation to separate accounts to provide for life insurance or annuities; regulation of variable contracts

(a) A domestic life insurer may establish one (1) or more
separate accounts and may allocate to those accounts 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:
(i) The income and any gains and losses from assets
allocated to a separate account shall be credited to or charged
against the account, without regard to the insurer's other
income, gains or losses;
(ii) Except as may be provided with respect to
reserves for guaranteed benefits and funds referred to in
paragraph (iii) of this subsection, 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 the investments in the separate
accounts shall not be considered in applying the investment
limitations otherwise applicable to the insurer's investments;
(iii) Except with the commissioner's approval and
under conditions he prescribes as to investments and other
matters, which conditions shall recognize the guaranteed nature
of the benefits provided, reserves for benefits guaranteed as to
dollar amount and duration and funds guaranteed as to principal
amount or stated rate of interest shall not be maintained in a
separate account;
(iv) Unless the commissioner otherwise approves:
(A) 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 the separate account;
(B) The portion, if any, of the assets of the
separate account which are equal to the insurer's reserve
liability with regard to the guaranteed benefits and funds
referred to in paragraph (iii) of this subsection shall be
valued in accordance with the rules otherwise applicable to the
insurer's assets.
(v) The insurer shall own amounts allocated to a
separate account under this section and shall not be nor hold
itself out to be a trustee with respect to those amounts;
(vi) If and to the extent provided under the
applicable contracts, that portion of the assets of any separate
account equal to the reserves and other contract liabilities
with respect to the account are not chargeable with liabilities
arising out of any other business the insurer conducts;
(vii) No insurer shall sell, exchange or otherwise
transfer its assets between any of its separate accounts, or
between any other investment account and one (1) or more of its
separate accounts unless:
(A) In case of a transfer into a separate
account, the 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;
(B) The transfer, whether into or from a
separate account, is made by a transfer of cash or by a transfer
of securities having a readily determinable market value; and
(C) The commissioner approves the transfer of
securities, provided the commissioner may approve other
transfers among the accounts if, in his opinion, the transfers
are not inequitable.
(viii) To the extent deemed necessary to comply with
any applicable federal or state laws, the insurer, 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 the account,
including 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 the insurer, to
manage the business of the account.
(b) Any 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
the insurer is to follow in determining the dollar amount of the
variable benefits. The contract under which the benefits vary to
reflect investment experience, including a group contract and
any certificate in evidence of variable benefits issued
thereunder, shall state that the dollar amount will vary and
shall contain on its first page a statement to the effect that
the benefits thereunder are on a variable basis.
(c) No insurer shall deliver or issue for delivery within
this state variable contracts unless it is licensed 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 the 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:
(i) The insurer's history and financial condition;
(ii) The character, responsibility and fitness of the
insurer's officers and directors; and
(iii) The law and regulation under which the insurer
is authorized in the state of domicile to issue variable
contracts. The state of entry of an alien insurer is its place
of domicile for this purpose. If the insurer is a subsidiary of
an admitted life insurer, or affiliated with that insurer
through common management or ownership, it may be deemed by the
commissioner to have met the provisions of this subsection if
either it or the parent or the affiliated insurer meets the
requirements thereof.
(d) Notwithstanding any other provision of law, the
commissioner has sole authority to:
(i) Regulate the issuance and sale of variable
contracts; and
(ii) Issue reasonable rules and regulations
appropriate to carry out the purposes of this section.
(e) Except for W.S. 26-16-117(a), (b) and (g), 26-16-118
and article 2 of this chapter in the case of a variable annuity
contract and W.S. 26-16-103, 26-16-108 through 26-16-110,
26-16-201 through 26-16-212 and 26-17-111 in the case of a
variable life insurance contract and except as otherwise
provided in this section, all pertinent provisions of this code
apply to separate accounts and contracts relating thereto. Any
individual variable life insurance contract delivered or issued
for delivery in this state shall contain grace, reinstatement
and nonforfeiture provisions appropriate to the contract. Any
individual variable annuity contract delivered or issued for
delivery in this state shall contain grace and reinstatement
provisions appropriate to the contract. Any group variable life
insurance contract delivered or issued for delivery in this
state shall contain a grace provision appropriate to the
contract. 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.