Section R. 500.856 - Separate accounts; investmentsRule 16. All of the following provisions apply to investments of separate accounts of variable life insurance:
(a) A sale, exchange, or other transfer of assets shall not be made by an insurer or any of its affiliates between any of its separate accounts or between any other investment account and 1 or more of its separate accounts unless both of the following requirements are satisfied: (i) 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 policies with respect to the separate account to which the transfer is made.(ii) Such transfer, whether into or from a separate account, is made by a transfer of cash; but other assets may be transferred if approved by the commissioner in advance.(b) Assets allocated to a variable life insurance separate account shall be held in cash or investments having a reasonably ascertainable market price. For purposes of this subdivision, only the following shall be considered investments having a reasonably ascertainable market price:(i) Liens in favor of the insurer against separate account policy reserves resulting from use by policyholders of cash values.(ii) Securities listed and traded on the New York stock exchange, the American stock exchange, or regional stock exchanges or successors to such exchanges having the same or similar qualifications.(iii) Securities listed on the national association of securities dealers automated quotations system.(iv) Shares of an investment company registered pursuant to the provisions of 15 U.S.C. S80a-1 et seq. Where such an investment company issues book shares instead of share certificates, such book shares shall be deemed to be adequate evidence of ownership.(v) Obligations of, or guaranteed by, the United States government, the Canadian government, any state, or any municipality or governmental subdivision of a state.(vi) Commercial paper issued by business corporations when the total of such paper issued by the corporation does not exceed in value a guaranteed short line of credit by a bank.(vii) Certificates of deposit issued by financial institutions, the deposits of which are insured by the federal deposit insurance corporation or the federal savings and loan insurance corporation.(viii) New bond or debt issues which may reasonably be expected to be listed on an exchange regulated by the securities exchange act of 1934, 15 U.S.C. S78a et seq.(ix) Financial futures contracts issued under terms and conditions regulated by a federal regulatory agency and in compliance with the requirements of section 943 of Act No. 218 of the Public Acts of 1956, as amended, being S500.943 of the Michigan Compiled Laws.(c) Assets allocated to a variable life insurance separate account shall not be invested in any of the following:(i) Letter or restricted stock, except through shares of an investment company registered under the provisions of 15 U.S.C. S80a-1 et seq.(ii) Units or other evidences of ownership or a separate account of another insurer, except those registered under the provisions of 15 U.S.C.S80a-1 et seq.(iii) Real estate other than shares of a real estate investment trust listed as described in subdivision (b)(ii) of this rule.(d) The separate account shall have sufficient net investment income and readily marketable assets to meet anticipated withdrawals under policies funded by the account.Mich. Admin. Code R. 500.856