TITLE 33 INSURANCE

Section 11. Investments, 33-11-1 through 33-11-89.

ARTICLE 2 INVESTMENTS OF LIFE, ACCIDENT AND SICKNESS, PROPERTY, AND CASUALTY INSURERS

33-11-66. Cumulative nature of Code section; variable annuity contract; separate accounts; conduct of business; licensed or organized to do business in state; Commissioner's role.

1. This Code section is cumulative of and in addition to the authority granted by any other law of this state relating to separate accounts for insurance companies or to annuity contracts on a variable basis and shall not be deemed to repeal or affect the provisions of Code Section 33-11-65 dealing with the group variable annuity contracts referred to in subsection (f) of Code Section 33-11-65.
2. When used in this Code section, the term "variable annuity contract" shall mean any individual or group contract issued by an insurance company or annuity company providing for annuity benefits and incidental contractual payments or values which vary in whole or in part so as to reflect investment results of any segregated portfolio of investments or of a designated separate account or accounts in which amounts received or retained in connection with any of the contracts have been placed.
3. Any domestic life insurance company may establish one or more separate accounts and may allocate to those accounts amounts to provide for annuities (and benefits incidental thereto) payable in fixed or variable amounts or both.
4. Except as provided in subsection (f) of this Code section, 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 domestic life insurance companies, provided that, to the extent that the company's reserve liability with regard to benefits guaranteed as to amount and duration and 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 the reserve liability shall be invested in accordance with the laws of this state governing the investment of reserves of life insurance companies. The investments in the separate account or accounts shall not be taken into account in applying the investment limitations applicable to other investments of the company.
5. To the extent any such domestic company deems it necessary to comply with any applicable federal or state laws, the 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 in such separate account 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 the company, to manage the business of the account. This subsection shall not affect existing laws pertaining to the voting rights of the life insurance company's stockholders or policyholders except as provided in this Code section.
6. No domestic company shall, for any separate account, purchase the voting securities of a single issuer if such purchase would result in such company, and all domestic insurance companies, directly or indirectly controlling, controlled by, or under common control with the company and holding in the company's or companies' separate account or accounts an amount in excess of 10 percent of the total issued and outstanding voting securities of the issuer, provided that this limitation shall not apply with respect to securities held in separate accounts, the voting rights in which are exercisable in accordance with instructions from persons having interests in such accounts. This limitation shall not apply to the investment for a separate account in the securities of an investment company registered under the Investment Company Act of 1940.
7. No sale, exchange, or other transfer of assets may be made by any domestic 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, the transfer is made solely to establish the account or to support the operation of the contracts with respect to the separate account to which the transfer is made and unless the transfer, whether into or from a separate account, is made by transfer of cash or by a transfer of securities having a readily determinable market value, provided that transfer of securities is approved by the Commissioner. The Commissioner may approve other transfers among such accounts if, in his or her opinion, the transfers would not be inequitable.
8. The income, if any, and gains and losses, realized or unrealized, from assets allocated to each account shall be credited to or charged against the account without regard to income, gains, or losses of the company.
9. 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, as provided under the terms of the contract or the rules or other written agreement applicable to such separate account, provided that the portion of the assets of the separate account equal to the company's reserve liability with regard to the guaranteed benefits and funds referred to in subsection (d) of this Code section, if any, shall be valued in accordance with the rules otherwise applicable to the company's assets. The reserve liability for variable annuity contracts shall be determined in accordance with actuarial procedures that recognize the variable nature of the benefits provided and any mortality guarantees.
10. The amounts held in any separate 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 owners or beneficiaries of the variable annuity contracts applicable thereto.
11. Each domestic life insurance company shall have the power within the limits of its corporate charter to do all things necessary under any applicable state or federal law in order that variable annuity contracts may be lawfully sold or offered for sale including, without limitation, the power to provide for management of a separate account by persons who may otherwise be unaffiliated with the life insurance company and the power to grant in connection with such contracts such voting rights as are set forth in subsection (e) of this Code section. Each domestic life insurance company may allocate from its general accounts to each separate account established under this Code section an initial cash amount necessary to meet minimum capitalization requirements for such account as prescribed by the Securities and Exchange Commission, provided that the total of all such allocations shall not exceed 10 percent of the company's assets or $1 million, whichever is less. Any allocation may be withdrawn when sufficient amounts have been received by the company in connection with variable annuity contracts and allocated to a separate account to meet the minimum capitalization requirement.
12. Amounts allocated to a separate account in the exercise of the power granted by this Code section shall be owned by the company, and the company shall not be, or hold itself out to be, a trustee with respect to such amounts.
13. Any variable annuity contract providing benefits payable in variable amounts issued under this Code section shall contain a statement of the essential features of the procedure to be followed by the company in determining the dollar amount of such variable benefits. Any contract, including a group contract and certificate in evidence or variable benefits issued under such contract, shall state that such dollar amount will vary to reflect investment experience and shall contain on its first page a statement to the effect that benefits under the contract are on a variable basis.
14. No company shall deliver or issue for delivery variable annuity contracts within this state unless it is licensed or organized to do a life insurance or annuity business in this state or is organized as a nonprofit educational corporation in its state of domicile and issues variable annuity contracts solely for the purpose of aiding and strengthening nonproprietary and nonprofit-making colleges, universities, and other institutions engaged primarily in education or research and the Commissioner is satisfied that its condition or method of operation in connection with the issuance of such contracts will not render its operation hazardous to the public or its policyholders in this state. In this connection, the Commissioner shall consider among other things:
    1. The history and financial condition of the company;
    2. The character, responsibility, and fitness of the officers and directors of the company; and
    3. The law and regulation under which the company is authorized in the state of domicile to issue variable contracts.
15. The Commissioner shall have sole and exclusive authority to regulate the issuance or sale of the contracts and to issue such reasonable rules and regulations as may be necessary to carry out the purposes and provisions of this Code section; and the contracts, the companies which issue them, and the agents or other persons who sell them shall not be subject to Chapter 5 of Title 10, the "Georgia Uniform Securities Act of 2008," in the sale of the contracts.
16. Notwithstanding any other laws of this state, no individual shall, within this state, sell or offer for sale variable annuity contracts as defined in this Code section unless the individual shall have both a valid and current life insurance license and variable contract license issued by the Commissioner. No license shall be issued unless and until the Commissioner is satisfied, after examination, except as provided for in Code Section 33-23-16, that the person is by training, knowledge, ability, and character qualified to act as such a variable annuity agent. The Commissioner may reject any application or suspend or revoke or refuse to renew any variable contract agent's license upon any ground that would bar the applicant or the agent from being licensed to sell life insurance contracts in this state or for the violation of any federal or state securities laws or regulations. The rules governing any proceedings relating to the suspension or revocation of a life insurance agent's license shall also govern any proceedings for the suspension or revocation of a variable contract agent's license. Renewal of a variable contract agent's license shall follow the same procedure established for renewal of an agent's license to sell life insurance contracts in this state.
17. No contract or agreement made pursuant to this Code section or policy or certificate issued under this Code section shall be construed to violate Code Section 33-25-9, and the sale or offer of any policy or certificate shall not be deemed an unfair method of competition or an unfair or deceptive act or practice in the business of insurance in violation of paragraph (7) of subsection (b) and subparagraphs (b)(8)(B) and (b)(8)(C) of Code Section 33-6-4.
18. Except for paragraphs (1), (5), and (6) of subsection (b) of Code Section 33-28-2 and except as otherwise provided in this Code section, all pertinent provisions of this title shall apply to separate accounts and variable annuity contracts relating thereto. The Commissioner, by regulation, may require that any individual variable annuity contract delivered or issued for delivery in this state contain provisions as to grace period and reinstatement appropriate for a variable annuity contract.

(Code 1981, §33-11-66, enacted by Ga. L. 1999, p. 592, § 12; Ga. L. 2001, p. 925, § 3; Ga. L. 2008, p. 381, § 10/SB 358; Ga. L. 2018, p. 1112, § 33/SB 365.)

The 2018 amendment, effective May 8, 2018, part of an Act to revise, modernize, and correct the Code, substituted "paragraph (7) of subsection (b) and subparagraphs (b)(8)(B) and (b)(8)(C)" for "paragraph (7) and subparagraphs (B) and (C) of paragraph (8)" near the end of subsection (q).