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.