The Vermont Statutes Online

Title 8 : Banking and Insurance

Chapter 103 : Life Insurance Policies and Annuity Contracts

Subchapter 006 : Variable Annuities-Separate Accounts

• § 3855. Establishment of accounts

  (a) A domestic life insurer may 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 company.

  (2) Except as may be provided with respect to reserves for guaranteed benefits and funds referred to in subdivision (3) of this subsection:

  (A) 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 domestic insurers;

  (B) the investments in such separate account or accounts may not be taken into account in applying the investment limitations otherwise applicable to the investments of the company; and

  (C) uniform investment policies shall not be required for each of the separate accounts established by a life insurer.

  (3) Except with the approval of the Commissioner and under such conditions as to investments and other matters as he or she may prescribe, which 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 may not be maintained in a separate account.

  (4) 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, that unless otherwise approved by the Commissioner, the portion of any 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 subdivision (3) of this subsection shall be valued in accordance with the rules otherwise applicable to the insurer’s assets.

  (5) Amounts allocated to a separate account in the exercise of the power granted by this subchapter are owned by the insurer, and the insurer may not be, nor hold itself out to be, a trustee with respect to such amounts, 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 insurer may conduct.

  (6) No sale, exchange, or other transfer of assets may be made by such 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 by a transfer of cash, or by a transfer of securities having a readily determinable market value, provided that such transfer of securities is approved by the Commissioner. The Commissioner may approve other transfers among such accounts if, in his or her opinion, such transfers would not be inequitable.

  (7) 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 company, to manage the business of such account.

  (b) The corporate charter of every domestic life insurance company is deemed amended to authorize it to do anything which is herein provided. (Added 1971, No. 106 § 1, eff. April 22, 1971.)