Section 27-38-1
Establishment of separate accounts by life insurers to provide for life insurance or annuities and benefits incidental thereto.
A life insurer organized under the laws of this state may, by or pursuant to a resolution of its board of directors, establish one or more separate accounts and may allocate thereto 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:
(1) The income, gains, and losses, realized or unrealized, from assets allocated to a separate account shall be credited to, or charged against, the account, without regard to other income, gains, or losses of the insurer;
(2) Except as provided in this section, 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 insurers; provided, however, that to the extent that the insurer's reserve liability with regard to:
(3) With respect to 75 percent of the market value of the total assets in a separate account, no insurer 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 percent 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;
(4) Unless otherwise approved by the commissioner, no insurer shall purchase or otherwise acquire for its separate accounts:
a. Any securities of any subsidiary of the insurer; or
b. More than 10 percent of the total issued and outstanding voting securities of any other single issuer; provided, however, 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;
(5) The limitations provided in subdivisions (3) and (4) of this section 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 subdivisions (3) and (4) of this section.
(6) 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, however, that, unless otherwise approved by the commissioner, the portion of the assets of such separate account equal to the insurer's reserve liability with regard to the guaranteed benefits and funds referred to in paragraphs (2)a. and (2)b. of this section, if any, shall be valued in accordance with the rules otherwise applicable to the insurer's assets;
(7) Amounts allocated to a separate account in the exercise of the power granted by this section shall be owned by the insurer, and the insurer shall not be, nor hold itself out to be, a trustee with respect to such amounts. 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 insurer may conduct;
(8) To the extent such insurer deems it necessary to comply with any applicable federal or state laws, such 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 such account, including, without limitation, 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 such insurer, to manage the business of such account; and
(9) No sale, exchange, or other transfer of assets may be made by an insurer 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:
(Acts 1969, No. 565, p. 1045, §1; Acts 1971, No. 407, p. 707, §754; Acts 1985, 2nd Ex. Sess., No. 85-993, p. 357, §1.)