Section 26-A1004. VARIABLE ANNUITIES

 

1004.1No company shall be authorized by the Commissioner to issue or deliver variable contracts in or from the District until that company has satisfied the Commissioner that its condition and methods of operation in connection with the issuance of those variable contracts shall not render its operation hazardous to the public or to its contract holders or to its policyholders.

 

1004.2In determining the qualifications of a company to issue or deliver variable contracts in the District, the Commissioner shall consider, among other things, the history and financial condition of the company; the character, responsibility, and general fitness of the officers and directors of the company; and, in the case of a foreign or alien company,whether the regulation provided by the laws of its domicile provides a degree of protection to the public and to its contract holders and policyholders substantially equal to that provided by the laws of the District of Columbia and by the rules and regulations issued by the Commissioner pursuant thereto.

 

1004.3No company which has been authorized by the Commissioner to issue variable contracts shall be permitted to continue to conduct that business unless the actual management of the company is, in the opinion of the Commissioner, at all times capable by experience or otherwise of conducting the business in the public interest and in such a manner as to safeguard the solvency of the company and the interests of its contract holders, policyholders, and creditors.

 

1004.4The authority of the company to issue variable contracts may be withdrawn by the Commissioner by procedures which afford due process of law if the Commissioner finds any of the following circumstances:

 

(a)The actual management of the company is not capable;

 

(b)The business of the company is not being conducted so as to safeguard its solvency or the interests of its contract holders, policyholders, and creditors; or

 

(c)The company has not complied with the law or with this title.

 

1004.5Written notice of the appointment or election by any company of any new officer, manager, director, or trustee, or, of the resignation, discharge, or death of any person while occupying such a position with the company, shall, within five (5) days thereafter be submitted to the Commissioner.

 

1004.6The computation of the net investment factor shall be based exclusively upon the investment experience of the variable contract account, except as regards contracts issued prior to December 31, 1960, specifying otherwise.

 

1004.7No person while serving as an elected or appointed officer or as a director or trustee of any company shall receive directly or indirectly any commission on the business transactions of the company.

 

1004.8The company shall effect no transfer of assets or liabilities to or from the variable contract account except in making the adjustments necessitated by contract and the mortality experience adjustment specified in §35-541(a), D.C. Code, 1981 ed. These adjustments shall be made by a case transfer only.

 

1004.9The company shall value assets of the variable contract account at market values, where possible, or, in the absence of a market value, by appraisal.

 

1004.10Each company shall file with its annual statement the supplement included with the blank form.

 

1004.11All variable annuity contracts and the applications therefor shall contain a prominent notice that payments by the company, when based on investment experience, are variable and are not guaranteed as to fixed dollar amount.

 

1004.12The company shall establish one or more separate bank accounts into which only and all variable contract premiums and considerations will be deposited. All amounts so deposited will be appropriately transferred periodically, consistent with the company's general accounting procedure.

 

1004.13For each variable annuity contract the company shall maintain a history record card or ledger sheet showing, in addition to the usual premium or contract consideration information, each net annuity consideration applied and the increment and accumulated balance on either a unit or dollar value basis.