A. Any domestic life insurance company may establish one or more separate accounts, and may allocate to such separate account or accounts any 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 in variable dollar amounts, or in both, subject to the following:

1. Except as hereinafter provided, the amounts allocated to each such 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; provided, that to the extent that the company's reserve liability with regard to a. benefits guaranteed as to amounts and duration, and b. funds guaranteed as to principal amount or stated rate of interest is maintained in any separate account, a portion of the assets of such separate account at least equal to such reserve liability shall be, except as the Commissioner may otherwise approve, invested in accordance with the laws of this state governing the investments of life insurance companies. The investments in such separate account or accounts shall not be taken into account in applying the investment limitations applicable to other investments of the company.

2. With respect to seventy-five percent (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 value, would exceed ten percent (10%) of the market value of the assets of said separate account; provided, however, that the Commissioner may waive such limitations 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.

3. No separate account shall invest in the voting securities of a single issuer if such investment would result in the company owning an amount in excess of ten percent (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 interest in such accounts.

4. The limitations provided in subsections 2. and 3. 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 subsections 2. and 3. hereof.

5. The income, if any, and gains and losses, realized or unrealized, from assets allocated to each account shall be credited to or charged against the account in accordance with the applicable contract without regard to other income, gains or losses of the company.

6. 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 in accordance with the applicable contract or the rules or other written agreement applicable to such separate account; provided, the portion of the assets of such separate account at least equal to the company's reserve liability with regard to the guaranteed benefits and funds referred to in subsection 1. hereof, if any, shall be valued in accordance with the rules otherwise applicable to the company's assets. The reserve liability for variable contracts shall be determined in accordance with actuarial procedures that recognize the variable nature of the benefits provided and any mortality guarantees.

7. 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.

8. The life insurance company shall have the power and the company's charter shall be deemed amended to authorize such company to do all things necessary under any applicable state or federal law in order that variable contracts may be lawfully sold or offered for sale including, without limitation, 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.

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 procedure to be followed by the company in determining the dollar amount of such variable benefits. Any such contract under which the benefits vary to reflect investment experience, including a group contract and any certificate issued thereunder shall state that such dollar amount may decrease or increase and shall contain on its first page a statement that the benefits thereunder are on a variable basis.

C. No domestic life insurance company, and no other life insurance company admitted to transact business in this state, shall be authorized to deliver within this state any variable contract providing benefits in variable amounts until said company has satisfied the Insurance Commissioner that its condition or methods of operation in connection with the issuance of such contracts will not render its operation hazardous to the public or its policyholders in this state. In determining the qualification of a company requesting authority to deliver such contracts within this state, the Insurance Commissioner shall consider, among other things:

1. The history and financial condition of the company;

2. The character, responsibility and general fitness of the officers and directors of the company; and

3. In the case of a company other than a domestic company, whether the statutes and regulations of the jurisdiction of its incorporation, or state of entry in the case of an alien company, provide a degree of protection to policyholders and the public which is substantially equal to that provided by this section and the rules and regulations issued thereunder.

An authorized life insurance company, whether domestic, foreign or alien, which issues variable contracts and which is a subsidiary of (or affiliated through common management or ownership with) another life insurance company authorized to do business in this state may be deemed to have met the provisions of this subsection if either it or the parent or affiliated company meets the requirements hereof.

D. The Insurance Commissioner shall have the sole and exclusive authority to regulate the issuance and sale of such contracts and to issue such reasonable rules and regulations as may be necessary to carry out the purposes and provisions of this section; and such contracts, the companies which issue them and the agents or other persons who sell them shall not be subject to the Oklahoma Securities Act nor to the jurisdiction of the Oklahoma Securities Commission thereunder.

Laws 1967, c. 287, § 1, emerg. eff. May 8, 1967; Laws 1969, c. 94, § 1, emerg. eff. March 27, 1969; Laws 1973, c. 194, § 1, emerg. eff. May 16, 1973.