Section R. 500.862 - Investment advisory contractsRule 22.
(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 advisors act of 1940;(b) The person providing such advice is an investment manager under the employee retirement income security act of 1974, 88 Stat. 829, 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 adviser: (i) The name and form of organization, state of organization, and its principal place of business.(ii) The names and addresses of its partners, officers, directors, and persons performing similar functions or, if such an investment adviser be an individual, or such individual.(iii) A written standard of conduct complying in substance with the requirements of subdivision (a) of R 500.861 which has been adopted by the investment adviser and is applicable to the investment adviser, its officers, directors, and affiliates; and any other persons or entities performing similar functions.(iv) A statement provided by the proposed adviser as to whether the adviser or any person associated therewith: (A) Has been convicted within 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 bank, an insurance agent, a securities broker, or an investment adviser; involving embezzlement, fraudulent conversion, or misappropriation of funds or securities, or involving the violation of 18 U.S.C. SS1341, 1342, and 1343.(B) Has been permanently or temporarily enjoined by order, judgment, or decree of any court of competent jurisdiction from acting as an investment adviser, 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 has acknowledged willful violation of, any provision of federal or state securities laws or state insurance laws or of any rule or regulation under any such laws.(D) Has been censured, denied an investment adviser registration, had a registration as an investment adviser revoked or suspended from being associated with an investment adviser by order of federal or state regulatory authorities.(2) 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 not more than 60 days' written notice to the investment adviser.(3) The commissioner, after notice and opportunity for hearing, may by order prohibit execution of such contract, or 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.(4) If the commissioner finds that the public safety or welfare requires emergency action, and incorporates the finding in his orders, he may summarily suspend an investment advisory contract.Mich. Admin. Code R. 500.862