CODE OF VIRGINIA

MODIFIED GUARANTEED LIFE INSURANCE AND MODIFIED GUARANTEED ANNUITIES; SEPARATE
ACCOUNTS; AUTHORITY TO ISSUE; STATEMENTS REQUIRED; REGULATIONS TO BE ISSUED;
APPROVAL EXPENSES (§ 38.2-3113.1)

A. For purposes of this section, “modified guaranteed contracts”
means modified guaranteed life insurance or modified guaranteed annuity
contracts.  The provisions of this section apply only to such contracts.

B. A domestic insurer that issues modified guaranteed contracts may establish
one or more separate accounts in connection with these types of contracts.  All
amounts received by the insurer to provide benefits under contracts for which
separate accounts have been established shall be added to the appropriate
separate account. Unless provided otherwise in the contract and approved by the
Commission in its discretion, the assets of any such separate account shall be
chargeable with liabilities arising out of any other business the insurer may
conduct.

C. A foreign or alien insurer licensed to do business in this Commonwealth may
be licensed to deliver or issue for delivery modified guaranteed contracts in
this Commonwealth only if authorized to issue such contracts under the laws of
its domicile.

D. No domestic, foreign, or alien insurer shall be licensed to deliver or issue
for delivery modified guaranteed contracts in this Commonwealth, until the
insurer has satisfied the Commission that its condition and methods of operation
in connection with the issuance of modified guaranteed contracts will not render
its operation hazardous to the public or to its policyholders in this
Commonwealth.  In determining the qualifications of an insurer to deliver or
issue for delivery such modified guaranteed 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.

E. Each insurer that has established any separate accounts in connection with
modified guaranteed contracts, and delivers or issues for delivery modified
guaranteed contracts in this Commonwealth shall file with the Commission, in
addition to the annual statement required by § 38.2-1300, any other periodic or
special reports the Commission prescribes.

F. Any modified guaranteed contract delivered or issued for delivery in this
Commonwealth, and any certificate evidencing nonforfeiture benefits that vary
according to a market-value adjustment formula issued pursuant to any life
insurance or annuity contract issued on a group basis shall (i) contain, on its
first page, a prominent statement that the nonforfeiture values may increase or
decrease, based on the market-value adjustment formula in the contract, and (ii)
for modified guaranteed life insurance only, be accompanied by a written
disclosure to the purchaser of the policy’s “interest adjusted net
cost index” in compliance with regulations or forms approved by the
Commission.

G. The Commission may promulgate reasonable regulations applicable to modified
guaranteed contracts and to any separate accounts that may be established in
connection with such contracts.

H. Reasonable actuarial expenses incurred in connection with approval of a
modified contract shall be paid by the person seeking approval of such a
contract.

HISTORY: 1992, c. 210.