W. Va. Code R. § 114-11D-3

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 114-11D-3 - Qualification of Insurer to Issue Variable Life Insurance

3.1. The requirements of this section are applicable to all insurers either seeking authority to issue variable life insurance in this state or having authority to issue variable life insurance in this state.

3.2. Licensing and Approval to do Business in This State. An insurer may not deliver or issue for delivery in this state any variable life insurance policies unless:

3.2.a. The insurer is licensed or organized to do a life insurance business in this state;

3.2.b. The insurer has obtained the written approval of the Commissioner for the issuance of variable life insurance policies in this state. The Commissioner shall grant written approval only after the Commissioner has found that:

3.2.b.1. The plan of operation for the issuance of variable life insurance policies is sound;

3.2.b.2. The general character, reputation and experience of the management and those persons or firms proposed to supply consulting, investment, administrative or custodial services to the insurer are such as to reasonably assure competent operation of the variable life insurance business of the insurer in this state; and

3.2.b.3. The present and foreseeable future financial condition of the insurer and its method of operation in connection with the issuance of such policies is not likely to render its operation hazardous to the public or its policyholders in this state. The Commissioner shall consider, among other things:

3.2.b.3.A. The history of operation and financial condition of the insurer;

3.2.b.3.B. The qualifications, fitness, character, responsibility, reputation and experience of the officers and directors and other management of the insurer and those persons or firms proposed to supply consulting, investment, administrative or custodial services to the insurer;

3.2.b.3.C. The applicable law and regulations under which the insurer is authorized in its state of domicile to issue variable life insurance policies. The state of entry of an alien insurer shall be deemed its state of domicile for this purpose; and

3.2.b.3.D. If the insurer is a subsidiary of, or is affiliated by common management or ownership with another company, its relationship to such other company and the degree to which the requesting insurer, as well as the other company, meets these standards.

3.3. Filing for Approval to do Business in This State. The Commissioner may, at his or her discretion, require that an insurer, before it delivers or issues for delivery any variable life insurance policy in this state, file with the Commissioner the following information for the consideration of the Commissioner in making the determination required by subdivision b, subsection 3.2 of this section:

3.3.a. Copies of and a general description of the variable life insurance policies it intends to issue;

3.3.b. A general description of the methods of operation of the variable life insurance business of the insurer, including methods of distribution of policies and the names of those persons or firms proposed to supply consulting, investment, administrative, custodial or distribution services to the insurer;

3.3.c. With respect to any separate account maintained by an insurer for a variable life insurance policy, a statement of the investment policy the issuer intends to follow for the investment of the assets held in the separate account and a statement of procedures for changing the investment policy. The statement of investment policy shall include a description of the investment objectives intended for the separate account;

3.3.d. A description of any investment advisory services contemplated as required by subsection 6.9 of this rule;

3.3.e. A copy of the statutes and regulations of the state of domicile of the insurer under which it is authorized to issue variable life insurance policies;

3.3.f. Biographical data with respect to officers and directors of the insurer on the National Association of Insurance Commissioners Uniform Biographical Data Form; and

3.3.g. A statement of the insurer's actuary describing the mortality and expense risks which the insurer will bear under the policy.

3.4. Standards of Suitability. Every insurer seeking approval to enter into the variable life insurance business in this state shall establish and maintain a written statement specifying the standards of suitability to be used by the insurer. The standards of suitability shall specify that no recommendation shall be made to an applicant to purchase a variable life insurance policy and that no variable life insurance policy shall be issued in the absence of reasonable grounds to believe that the purchase of the policy is suitable for the applicant on the basis of information furnished after reasonable inquiry of the applicant concerning the applicant's insurance and investment objectives, financial situation and needs, and any other information known to the insurer or the producer making the recommendation.

3.5. Use of Sales Materials. An insurer authorized to transact variable life insurance business in this state may not use any sales material, advertising material or descriptive literature or other materials of any kind in connection with its variable life insurance business in this state which is false, misleading, deceptive or inaccurate. Variable life insurance sales material, advertising material and descriptive literature shall be subject to the additional requirements of W. Va. Code of St. R. §114 CSR 11.

3.6. Requirements Applicable to Contractual Services. Any material contract between an insurer and suppliers of consulting, investment, administrative, sales, marketing, custodial or other services with respect to variable life insurance operations shall be in writing and provide that the supplier of such services shall furnish the Commissioner with any information or reports in connection with the services which the Commissioner may request in order to ascertain whether the variable life insurance operations of the insurer are being conducted in a manner consistent with this rule and any other applicable law or rules.

3.7. Reports to the Commissioner.

3.7.a. An insurer authorized to transact the business of variable life insurance in this state shall submit to the Commissioner, in addition to any other materials that may be required by this rule or any other applicable laws or rules:

3.7.a.1. An annual statement of the business of its separate account or accounts in such forms as may be prescribed by the National Association of Insurance Commissioners; and

3.7.a.2. Prior to the use in this state any information furnished to applicants as provided for in section 7 of this rule; and

3.7.a.3. Prior to the use in this state the form of any of the reports to policyholders as provided for in section 9 of this rule; and

3.7.a.4. Such additional information concerning its variable life insurance operations or its separate accounts as the Commissioner shall deem necessary.

3.7.b. Any material submitted to the Commissioner under this section shall be disapproved if it is found to be false, misleading, deceptive or inaccurate in any material respect and, if previously distributed, the Commissioner shall require the distribution of amended material.

3.8. Authority of Commissioner to Disapprove. Any material required to be filed with and approved by the Commissioner is subject to disapproval if at any time it is found by him or her not to comply with the standards established in this rule.

W. Va. Code R. § 114-11D-3