1. (a) An insurer shall not enter into a contract under which any person undertakes, for a fee, to regularly furnish investment advice to such insurer with respect to its separate accounts maintained for variable life insurance policies unless:

   1. (1) The person providing such advice is registered as an investment adviser under the Investment Advisors Act of 1940, Pub. L. No. 115-417;
   2. (2) The person providing such advice is an investment manager under the Employee Retirement Income Security Act of 1974, Pub. L. No. 93-406, with respect to the assets of each employee benefit plan allocated to the separate account;

   3. (3) The insurer has filed with the Insurance Commissioner and continues to file annually the following information and statements concerning the proposed advisor:

      1. (A) The name and form of organization, state of organization, and its principal place of business;
      2. (B) The names and addresses of its partners, officers, directors, and persons performing similar functions or, if such an investment advisor be an individual, of such individual;
      3. (C) A written standard of conduct complying in substance with the requirements of 23 CAR § 93-509 that has been adopted by the investment advisor and is applicable to:

2. (i) The investment advisor; and

   1. (ii) Its officers, directors, and affiliates; and

      1. (D) A statement provided by the proposed advisor as to whether the advisor or any person associated therewith has been:

         1. (i) Convicted within ten (10) years of any felony or misdemeanor arising out of such person's conduct as an employee, salesman, officer, or director of an insurance company, a banker, an insurance agent, a securities broker, or an investment advisor involving:
3. (a) (a) Embezzlement;

4. (b) (b) Fraudulent conversion;

   1. (c) (c) Misappropriation of funds or securities; or

      1. (d) (d) The violation of Sections 1341, 134231, or 1343 of Title 18 of the United States Code;

         1. (ii) Permanently or temporarily enjoined by an order, judgment, or decree of any court of competent jurisdiction from:

5. (a) (a) Acting as:

   1. (1) (1) An investment advisor;
   2. (2) (2) An underwriter;
   3. (3) (3) A broker;
   4. (4) (4) A dealer; or

   5. (5) (5) An affiliated person or an employee of any:

      1. (A) (A) Investment company;
      2. (B) (B) Bank; or
      3. (C) (C) Insurance company; or

6. (b) (b) Engaging in or continuing any conduct or practice in connection with any such activity;

   1. (iii) Found by federal or state regulatory authorities to have willfully violated or have acknowledged willful violation of any provision of federal or state securities laws or state insurance laws or of any rule or regulation under any such laws; or

      1. (iv) Censured, denied an investment advisor registration, had a registration as an investment advisor revoked or suspended, or been barred or suspended from being associated with an investment advisor by order of federal or state regulatory authorities; and

   2. (4) Such investment advisory contract shall:

      1. (A) Be in writing; and
      2. (B) Provide that it may be terminated by the insurer without penalty to the insurer or the separate account upon no more than sixty (60) days' written notice to the investment advisor.
7. (b) The commissioner may, after the notice and opportunity for hearing, by order require such investment advisory contract to be terminated if he or she deems continued operation thereunder to be hazardous to the public or the insurer's policyholders.

Codification Notes: The Investment Advisers Act of 1940 is codified at 15 U.S.C. § 80b-1 et seq. The Employee Retirement Income Security Act of 1974 is codified at 29 U.S.C. § 1001 et seq.