Sec. 54.3. Separate accounts

Every separate account established for the funding of variable life insurance policies pursuant to section 4240 of the Insurance Law shall be subject to the following provisions of this section:

(a) Except as may otherwise be permitted in writing by the superintendent, every company shall maintain in each separate account assets with a value at least equal to the greater of the valuation reserves for the variable portion of the variable life insurance policies or the benefit base for such policies and other separate account liabilities with respect to such account.

(b) Except as set forth in subdivision (g) of this section, the assets of such separate accounts shall be valued at least as often as variable benefits are determined, but in any event at least monthly.

(c) 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, in case of a transfer into a separate account, such transfer is made solely to establish the account or to support the operation of the policies with respect to the separate account to which the transfer is made, and unless such transfer, whether into or from a separate account, is made (1) by a transfer of cash, or (2) by a transfer of securities having a valuation which can be readily determined in the market-place, provided that such transfer of securities is approved by the superintendent. The superintendent may authorize other transfers among such accounts if, in his opinion, such transfers would not be inequitable.

(d) Expenses shall be allocated to the separate account business in accordance with the provisions of section 4240(a)(6) of the Insurance Law and Part 91 of this Title.

(e) Each company which establishes one or more separate accounts pursuant to section 4240 of the Insurance Law shall maintain a record of the special contingent reserve fund showing progress in the repayment of the fund and the sum of advances from surplus made to establish or maintain the fund. A current statement of such record as of the end of each calendar year shall be filed with the superintendent on or before March 1st of the next following calendar year.

(f) Conflicts of interest rules under any provision of the Insurance Law or any regulation promulgated thereunder which are applicable to the officers or directors of insurance companies shall also apply to the members of the committee, board or other similar body of every separate account. No officer or director of any company maintaining a separate account, nor any member of the committee, board or other similar body of the separate account, shall receive, in addition to his fixed salary or compensation, any commission, other compensation, money or valuable thing, either directly or indirectly, with respect to the purchase, sale or loan of the assets of the separate account.

(g) The assets of a separate account established to provide life insurance under private placement variable life insurance policies shall be valued at least as often as variable benefits are determined, but no less frequently than annually. The determination of the value of the assets of a separate account, to the extent necessary, may be based upon reasonable approximations.