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:

a. Benefits guaranteed as to dollar amount and duration; and

b. Funds guaranteed as to principal amount or stated rate of interest are 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 insurers.

(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:

a. By a transfer of cash; or

b. By a transfer of securities having a readily determinable market value, provided that such transfer of securities is approved by the commissioner.

(a) Any variable 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 to be followed by the insurer in determining the dollar amount of such variable benefits. Any such contract, including a group contract, and any certificate in evidence of variable benefits issued thereunder shall state that such dollar amount will vary to reflect investment experience and shall contain on its first page a statement to the effect that the benefits thereunder are on a variable basis.

(b) Variable annuity contracts delivered, or issued for delivery, in this state may include as an incidental benefit provision for payment on death during the deferred period of an amount not in excess of the greater of the sum of the premiums or stipulated payments paid under the contract or the value of the contract at time of death. Any such provision shall not be deemed to be life insurance and therefore shall not be subject to the provisions of this title governing life insurance contracts. A provision for any other benefit on death during the deferred period shall be subject to this title.

(a) 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 such 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:

(1) The history and financial condition of the insurer;

(2) The character, responsibility and fitness of the officers and directors of the insurer; and

(3) The law and regulation under which the insurer is authorized in the state of domicile to issue variable contracts.

(b) If the company is a subsidiary of an admitted life insurer or affiliated with such insurer through common management or ownership, it may be deemed to have met the provisions of the section if either it or the parent or affiliated company meets the requirements of this section.

Notwithstanding any other provision of law, the commissioner shall have sole authority to regulate the issuance and sale of variable contracts and the licensing of persons selling such contracts and to issue reasonable rules and regulations as may be appropriate to carry out the purposes and provisions of this chapter.

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.

Except for Sections 27-15-16, 27-15-17, 27-15-22, 27-15-23 and 27-15-28.1 of this title, in the case of a variable annuity contract, and Sections 27-15-2, 27-15-3, 27-15-8.1, 27-15-9, 27-15-10, 27-15-11 and 27-15-28 of this title, in the case of a variable life insurance policy, and except as otherwise provided in this chapter, all pertinent provisions of this title shall 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 such a contract.