(b) If no law or other rule provides for the custody of separate account assets and if such insurer is not the custodian of such separate account assets:

1. (1) All contracts for custody of such assets shall be in writing; and
2. (2) The Insurance Commissioner shall have authority to review and approve of both the terms of any such contract and the proposed custodian prior to the transfer of custody.

(c) Such insurer shall not without prior written approval of the commissioner employ in any material in connection with the handling of separate account assets any person who, within the last ten (10) years, has been:

1. (1) Convicted of any felony or misdemeanor arising out of such person's conduct involving embezzlement, fraudulent conversion, or misappropriation of funds or securities or in involving violations of Sections 1341, 1342, or 1343 of Title 18 of the United States Code;

2. (2) Found by any state regulatory authority to have violated or has acknowledged violation of any provision of any state insurance law involving:

   1. (A) Fraud;
   2. (B) Deceit; or
   3. (C) Knowing misrepresentation; or

3. (3) Found by federal and state regulatory authorities to have violated or has acknowledged violation of any provision of federal or state securities laws involving:

   1. (A) Fraud;
   2. (B) Deceit; or
   3. (C) Knowing misrepresentation.