                                 CODE OF VIRGINIA

VARIABLE LIFE INSURANCE AND VARIABLE ANNUITIES; SEPARATE ACCOUNTS TO BE
ESTABLISHED; AUTHORITY TO ISSUE; REPORTS; SPECIAL VOTING RIGHTS AND PROCEDURES
FOR OWNERS (§ 38.2-3113)

A. Each domestic insurer that issues life insurance or annuities providing for
payments that vary directly according to investment experience shall establish
one or more separate accounts in connection with these types of life insurance
or annuities. All amounts received by the insurer that are required by contract
to be applied to provide for variable payments shall be added to the appropriate
separate account. The assets of any such separate account shall not be
chargeable with liabilities arising out of any other business the insurer may
conduct. Any surplus or deficit that may arise in any separate account by virtue
of mortality experience shall be adjusted by withdrawals from or additions to
the account so that the assets of the account shall always at least equal the
assets required to satisfy the insurer&#8217;s obligations for the variable
payments.

B. A foreign or alien insurer licensed to do business in this Commonwealth may
be licensed to deliver or issue for delivery life insurance or annuity contracts
in this Commonwealth providing for payments which vary directly according to
investment experience only if authorized to issue such life insurance or annuity
contracts under the laws of its domicile.

C. No domestic, foreign, or alien insurer shall be licensed to deliver or issue
for delivery variable life insurance or variable annuity contracts in this
Commonwealth, until the insurer has satisfied the Commission that its condition
and methods of operation in connection with the issuance of variable life
insurance or variable annuity contracts will not render its operation hazardous
to the public or to its policyholders in this Commonwealth. In determining the
qualification of an insurer to deliver or issue for delivery such variable life
insurance or variable annuity contracts in this Commonwealth, the Commission
shall consider, but shall not be limited to considering, the following: (i) the
history and financial condition of the insurer; (ii) the character,
responsibility, and general fitness of the officers and directors of the
insurer; and, (iii) in the case of a foreign or alien insurer, whether the
regulation provided by the laws of its domicile provides a degree of protection
to policyholders and the public substantially equal to that provided by this
section and any rules and regulations issued by the Commission.

D. Each insurer that delivers or issues for delivery variable life insurance or
variable annuity contracts in this Commonwealth shall file with the Commission,
in addition to the annual statement required by &#xA7; 38.2-1300, any other
periodic or special reports the Commission prescribes.

E. The provisions of this section shall not apply to any contracts or policies
which do not provide for payments which vary directly according to investment
experience.

F. Any domestic life insurer that establishes one or more separate accounts
pursuant to this section may amend its charter to provide for special voting
rights and procedures for the owners of variable life insurance or variable
annuity contracts relating to investment policy, investment advisory services
and selection of certified public accountants, in relation to the administration
of the assets in any such separate account. This subsection shall not in any way
affect existing laws pertaining to the voting rights of the insurer&#8217;s
policyholders.

HISTORY: 1966, c. 289, § 38.1-443; 1976, c. 562; 1986, c. 562.