2006 Minnesota Statutes

61A.14 COMPANIES ENTITLED TO ISSUE CONTRACTS; ACCOUNTS;
INVESTMENTS.
    Subdivision 1. Separate accounts. Any domestic life insurance company may, by or
pursuant to resolution of its governing body, establish and operate one or more separate accounts
and issue contracts on a variable basis, subject to the provisions of sections 61A.13 to 61A.21.
    Subd. 2. Allocations to account. Except as may be otherwise specifically provided by the
contract concerned, all amounts received by a life insurance company in connection with any
contract on a variable basis shall be allocated to the appropriate separate account. The income, if
any, and gains or losses, realized or unrealized on each such account may be credited to or charged
against the amount allocated to such account in accordance with such contract, without regard to
the other income, gains, or losses of the company.
    Subd. 3. Investments. Except as hereinafter provided, amounts allocated to any separate
account and accumulations thereon may be invested and reinvested without regard to any
requirements or limitations prescribed by the laws of this state governing the investments of life
insurance companies; provided, that to the extent that the company's reserve liability with regard to
(a) benefits guaranteed as to amount and duration, and (b) funds guaranteed as to principal amount
or stated rate of interest is maintained in any separate account, a portion of the assets of such
separate account at least equal to such reserve liability shall be, except as the commissioner may
otherwise approve, invested in accordance with the laws of this state governing the investments of
life insurance companies and shall be segregated from the other assets in the separate account.
    Subd. 4. Other investments. For purposes of determining whether the capital, surplus and
other funds of a domestic life insurance company, other than assets held in a separate account
pursuant to this section, are invested in accordance with sections 61A.28 to 61A.31, and 60L.01
to 60L.15, assets held by the company in a separate account in accordance with this section
shall be disregarded.
    Subd. 5. Account ownership. The assets held in a separate account pursuant to this section
shall be owned by the company, and the company shall not be, nor hold itself out to be, a trustee
with respect to such amounts. If and to the extent so provided under the applicable contracts or
as required pursuant to the Federal Investment Company Act of 1940 that portion of the assets
of any such separate account equal to reserves and other contract liabilities with respect to such
account shall not be chargeable with liabilities arising out of any other business the company may
conduct, but shall be held and applied exclusively for the benefit of the holders of those contracts
on a variable basis for which the separate account has been established, provided, however, that
the assets shall always be at least equal to the reserves and other contract liabilities with respect
to such account.
    Subd. 6. Compliance with laws. To the extent such company deems it necessary to comply
with any applicable federal or state laws, such company, with respect to any separate account,
including without limitation any separate account which is a management investment company or
a unit investment trust, may provide for persons having an interest therein appropriate voting and
other rights and special procedures for the conduct of the business of such account, including
without limitation special rights and procedures relating to investment policy, investment advisory
services, selection of independent public accountants, and the selection of a committee, the
members of which need not be otherwise affiliated with such company, to manage the business
of such account.
    Subd. 7. Valuation of assets. Unless otherwise approved by the commissioner, assets
allocated to a separate account shall be valued at their market value on the date of valuation,
or if there is no readily available market, then as provided under the terms of the contract or
the rules or other written agreement applicable to such separate account; provided, that unless
otherwise approved by the commissioner, a portion of the assets of such separate account equal to
the company's reserve liability with regard to the guaranteed benefits and funds referred to in
clauses (a) and (b) of subdivision 3, if any, shall be valued in accordance with the rules otherwise
applicable to the company's assets.
    Subd. 8. Transfer of assets. No sale, exchange or other transfer of assets may be made by
a company between any of its separate accounts or between any other investment account and
one or more of its separate accounts unless, (a) in case of a transfer into a separate account,
such transfer is made solely to establish the account or to support the contractual obligations
of the company with respect to the separate account to which the transfer is made, or (b) in
case of a transfer from a separate account, such transfer would not cause the remaining assets
of the account to become less than the reserves and other contract liabilities with respect to
such separate account. Such transfer, whether into or from a separate account, shall be made by
a transfer of cash, or by a transfer of securities having a readily determinable market value,
provided that such transfer of securities is approved by the commissioner. The commissioner may
approve other transfers among such accounts if, in the commissioner's opinion, such transfers
would not be inequitable. Where a company transfers assets into a separate account for the
purpose of establishing such account, such transfer shall be in the form of cash and, except as
the commissioner may otherwise approve, shall be made only from its surplus, provided that not
more than five percent of its surplus may be so invested in such accounts.
    Subd. 9. Life insurance companies. A domestic life insurance company having a separate
account or accounts pursuant to this section in connection with variable contracts or other separate
account products may indemnify a person who is serving or has served as a member of the
managing committee of that separate account, and may purchase and maintain insurance for that
purpose, in accordance with section 302A.521.
History: 1967 c 395 art 2 s 14; 1969 c 7 s 21-23; 1969 c 752 s 2-8; 1973 c 480 s 2; 1986 c
444; 1998 c 319 s 16; 2005 c 69 art 2 s 10