D.C. Mun. Regs. tit. 26, r. 26-A2728

Current through Register Vol. 71, No. 49, December 6, 2024

Rule 26-A2728 - INVESTMENT ADVISORY SERVICES TO A SEPARATE ACCOUNT

2728.1

An insurer shall not enter into a contract under which any person undertakes, for a fee, to regularly furnish investment advice to such insurer with respect to its separate accounts maintained for variable life insurance policies unless:

(a) The person providing such advice is registered as an investment adviser under the Investment Advice Act of 1940; or

(b) The person providing such advice is an investment manager under the Employee Retirement Income Security Act of 1974, Pub. L. 103-66, Title IV, Subtitle D, Section 4301(a) -(c)(1993), with respect to the assets of each employee benefit plan allocated to the separate account; or

(c) The insurer has filed with the Commissioner and continues to file annually the following information and statements concerning the proposed advisor:

(1) The name and form of organization, state of organization, and its principal place of business;

(2) The names and addresses of its partners, officers, directors and persons performing similar functions or, if such an investment advisory be an individual, of such individual;

(3) A written Standard of Conduct complying in substance with the requirements of Section 2726 of this chapter which has been adopted by the investment advisor and is applicable to the investment advisor, its officers, directors, and affiliates;

(4) A statement provided by the proposed advisor as to whether the advisor or any person associated therewith:

(A) Has been convicted within ten (10) years of any felony or misdemeanor arising out of such person's conduct as an employee, salesman, officer or director of an insurance company, a banker, an insurance agent, a securities broker or an investment advisor involving embezzlement, fraudulent conversion, or misappropriation of funds or securities, or involving the violation of Sections 1341, 1342, or 1343 of Title 18 of United States Codes;

(B) Has been permanently or temporarily enjoined by an order, judgment or decree of any court of competent jurisdiction from acting as an investment advisor, underwriter, broker or dealer, or as an affiliated person or as an employee of any investment company, bank or insurance company, or from engaging in or continuing any conduct or practice in connection with any such activity;

(C) Has been found by federal or state regulatory authorities to have willfully violated or have acknowledged willful violation of any provision of federal or state securities laws or District insurance laws or of any rule or regulation under any such laws; or

(D) Has been censured, denied an investment advisor registration, had a registration as an investment advisor revoked or suspended, or been barred or suspended from being associated with an investment advisor by order of federal or District regulatory authorities; and

(d) Such investment advisory contract shall be in writing and provide that it may be terminated by the insurer without penalty to the insurer or the separate account upon no more than sixty (60) days' written notice to the investment advisor.

2728.2

The Commissioner may, after notice and opportunity for hearing, by order require such investment advisory contract to be terminated if he deems continued operation thereunder to be hazardous to the public or the insurer's policyholders.

D.C. Mun. Regs. tit. 26, r. 26-A2728

Final Rulemaking published at 42 DCR 1047 (February 24, 1995)