Any domestic insurer issuing variable life insurance shall establish one or more separate accounts pursuant to Section 59A-20-30 NMSA 1978 of the New Mexico Insurance Code.

1. A. If no law or other regulation provides for the custody of separate account assets and if such insurer is not the custodian of such separate account assets, all contracts for custody of such assets shall be in writing and the superintendent 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.

2. B. Such insurer shall not without the prior written approval of the superintendent employ in any material connection with the handling of separate account assets any person who:

   (1) within the last ten years has been convicted of any felony or a misdemeanor arising out of such person’s conduct involving embezzlement, fraudulent conversion, or misappropriation of funds or securities or involving violation of Sections 1341, 1342, or 1343 of Title 18, United States Code; or

   (2) within the last ten years has been found by any state regulatory authorities to have violated or has acknowledged violation of any provision of federal or state securities laws involving fraud, deceit, or knowing misrepresentation; or

   (3) within the last ten years has been found by federal or state regulatory authorities to have violated or has acknowledged violation of any provision of federal or state securities laws involving fraud, deceit, or knowing misrepresentation.

3. C. All persons with access to the cash securities, or other assets of the separate account shall be under bond in the amount of not less than $10,000.

4. D. 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.

   [12/1/85; Recompiled 11/30/01]