Bulletin 97-02 Appendix
|Item No. 1 ......................... Instructions
Item No. 2 ......................... Certificate of Compliance
Item No. 3 ......................... Description of New Matters Form
Item No. 4 ......................... New Product Form
Item No. 5 ......................... New Fund Form
Item No. 6 ......................... New Subaccount/Portfolio Form
Item No. 7 ......................... Other Material Changes Form
Item No. 8 ......................... Sample Acknowledgment Letter
INSTRUCTIONS TO AMEND EXISTING QUALIFICATION TO TRANSACT A VARIABLE CONTRACT BUSINESS
PLEASE FOLLOW THESE INSTRUCTIONS TO MAKE A FILING WITH THE DEPARTMENT UNDER THE PROVISIONS OF BULLETIN BULLETIN 97- 2.
The California Insurance Department's current Regulation on Variable Contracts requires an insurer, already qualified to engage in a variable contract business in California, to comply with the following provision if certain changes will be made in the insurer's variable contract program:
"Subsequent to qualification, any amendments to the above mentioned resolutions of the Board of Directors, agreement establishing a separate account, variable contract, registration statement or prospectus, and any substantial change in management shall promptly be filed with the Commissioner for review as to continuance of qualification standards required by law." [Sec. 2526.1 of Title 10 of the California Administrative Code.} (Emphasis added)
For those insurers wishing to expedite the approval of their amendments to their qualification, a method of certifying compliance is offered by the Department. However, those insurers still desiring a prior approval may still choose to go through that process, which involves a review by both the Dept. Legal and Financial Analysis Divisions.
Appropriate FORMS, which are attached, must be included with the filing of the Certificate of Compliance, and related documents, including an effective prospectus, where applicable. First, a DESCRIPTION OF NEW MATTERS FORM (see attached format) should be completed to give the Department an overview of your amendment. Then, depending upon the nature of the amendment, one or more of the following Forms should be completed and attached: New Product Form; Fund Addition Form; New Subaccount Form; or, Other Material Changes Form.
The NEW PRODUCT FORM should be completed when you are offering a new contract in California, such as a variable annuity or variable life insurance contract.
The NEW FUND FORM should be completed when you are adding a new mutual fund to your variable contract investment options.
The NEW SUBACCOUNT/PORTFOLIO FORM tracks the FUND ADDITION FORM, and should be completed when you are adding a new subaccount to your Separate Account or Accounts.
Lastly, the OTHER MATERIAL CHANGES FORM is intended as a "catch-all", and should be completed when you have changed investment advisors, added a sub-advisor, changed custodians, added a 3rd party administrator, or implemented other significant changes.
Upon completion of the CERTIFICATE OF COMPLIANCE, and the appropriate FORMS, add the following minimum documentation to your filing package: currently effective prospectus and statement of additional information along with similar items for any new fund you are adding ; specimen of new policy contract (if any) [be sure to also file your policy with our Policy Approval Bureau] new or revised investment advisory, custodian, or administrative services contracts; and, any letter or narrative description you wish to add.
When you have filed this package of information, along with payment of a filing fee of $1,889, the Department will send you a written acknowledgment of your filing within a reasonable short period of time, (a sample of the acknowledgment letter you will receive is attached), subject to certain conditions granting the Department a reservation of its rights to fully review your filing at any time; and, if necessary, to disapprove or require changes for substantive cause. You may then proceed, at that time, to implement your Amendment in California.
If you have questions concerning this procedure, you may call the Department's Corporate Affairs Bureau in its Legal Division in San Francisco, (Telephone: (415) 538- 4035).
STATE OF CALIFORNIA DEPARTMENT OF INSURANCE 45 Fremont Street, 24th Floor San Francisco, CA 94105
[To Expedite Approval of Amendment or Changes to Existing Qualification]
Name of Applicant Company:
Person to Whom Correspondence Should Be Addressed:
(Directions: This Certificate may be utilized in lieu of applicant seeking a prior approval of its changes in its variable contract operation; such an approval being based upon a full review by the Department. This Certificate must be executed by an executive officer of the applicant, who has responsibility for applicant's variable contract operation. Please answer each question in the accompanying Forms completely. If more room is needed, attach a sheet of paper indicating the question being responded to.)
TO THE INSURANCE COMMISSIONER OF THE STATE OF CALIFORNIA
I, [__________________], a duly appointed executive officer of the Applicant Company, having responsibility for its variable contract operation, do state, under oath, that I have carefully read this Certification and the attached Forms, and that the information and answers to questions herein is true to the best of my own knowledge, except as to those specifically stated to be upon information and belief, and as to those I believe the answers to be true.
Further I state that the variable contract changes described herein comply with pertinent statues, regulations, and bulletins, and have been reviewed by me, or that I have been advised by competent legal counsel, representing the company, that the changes are in full compliance with the California Insurance Code, Regulations, Bulletins, and underlying guidelines.VARIABLE CONTRACT CERTIFICATE OF COMPLIANCE
All material changes occurring since my company's most recent amendment of its variable contract qualification, (and the approval or acknowledgment by the Department of that amendment), are explained and described herein, or in accompanying materials and documentation. The information given here does not relate to any changes previously submitted to the Department and disapproved by the Department, unless corrective action has been taken by my company to meet the objections previously stated by the Department to those changes.
I understand and acknowledge that false statements which are intended to mislead or deceive the Commissioner, or the willful omission of any material fact with he same intent, may be punishable under such sections of the Insurance Code as may be applicable.
WITNESS MY SIGNATURE this [__________] Day of [________], 199[___], at [___________].
signature [________________________________](Affiant) [________________________________] (Printed or typed name and title)
SUBSCRIBED AND SWORN TO before me on the date and year above written.
[________________________________](Notary Public in and for said County and State)
My commission expires [_____________]
DESCRIPTION OF NEW MATTERS FORM
1. Background Information:
a. Applicant's name:
b. Applicant's state of domicile
c. Date of applicant's California Certificate of Authority:
d. Date of applicant's original qualification for California Variable Authority:
e. Date and type of applicant's last amendment to its California Variable Authority:
f. What variable products is the applicant currently offering in California?
g. Has the applicant ever been subject to a regulatory disciplinary action, at either a state or federal level, for actions arising out of its variable annuity or variable life business?
. If yes, identify each action:
2. What amendments to the applicant's current variable qualification are being requested in this application? (Be sure to include a new product form, new fund form, new subaccount/portfolio form and/or other material changes form for each applicable amendment).
a. New Product:
b. New Fund:
c. New Subaccount/Portfolio:
d. Other Material Changes:
3. Is this application being filed under the expedited filing procedure set forth in this Bulletin?
If yes, has the applicant included an original certificate of compliance? .
4. If the amendments set forth in the application require a filing with the S.E.C., the application must include an effective prospectus and statement of additional information. Applications for amended variable qualification will not be accepted for filing until an effective prospectus has been submitted.
NEW PRODUCT FORM
1. PRODUCT NAME: What is the name of the New Product?
2. PRODUCT DESCRIPTION: Provide a brief description of the New Product.
3. POLICY FORM: Attach a specimen copy of the New Product policy form.
4. MARKETING: How will this new product be marketed?Who will be the target market for this new product? Attach copies of any advertising or marketing information which will be distributed to the applicant's marketing agents and/or sales force.
5. DISTRIBUTION: How will the New Product be distributed? Will a third party handle distribution? If yes, attach a copy of the distribution agreement.
6. ADMINISTRATION: Will the administration of this New Product be delegated to a third party? If yes, attach a copy of the administration agreement. Administration of a life or annuity product by a third party will require a third party administrator's license (California Insurance Code Section 1759).
7. SALES COMMISSION: What is the sales commission on this New Product?
8. SURRENDER CHARGE: What is the surrender charge on the New Product?
9. CONTRACT FEE: What is the annual contract fee on this New Product?
10. MORTALITY AND EXPENSE RISK CHARGES: What are the mortality and expense risk charges on this New Product?
11. PRODUCT PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION: Does this new product require the filing of a prospectus with the S.E.C.? If yes, attach a copy of the product prospectus and statement of additional information. (All insurers must provide an effective product prospectus and statement of additional information before an application to amend their variable qualification will be accepted for filing).
12. PLAN DOCUMENTS: If this New Product is not subject to filing with the S.E.C., attach a copy of the Plan Documents or other documentation which provides information about the new product.
NEW FUND FORM
1. FUND NAME: What is the name of the New Fund?
2. INVESTMENT ADVISOR: Who is the investment advisor for the new fund?
Attach a copy of the investment advisory agreement.
3. DISTRIBUTOR: Who is the distributor (broker/dealer) for the New Fund?
4. USE OF FUND(S) BY OTHER INSURANCE COMPANIES: Has this New Fund ever been qualified for use in California as an investment for variable products? If yes, please provide the names of the insurance companies you know are qualified to offer this fund.
5. S.E.C. DISCIPLINARY ACTION: Has this New Fund, its investment advisor or its broker-dealer been subject to any S.E.C. disciplinary action within the past ten years? If yes, attach a copy of each action.
6. FUND PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION: Does this New Fund require a filing with the S.E.C.? If yes, attach a copy of the effective fund prospectus and statement of additional information. The fund prospectus and statement of additional information must be effective before the application for amended variable qualification will be accepted for filing.
7. PLAN DOCUMENTS: If the New Fund is not subject to filing with the S.E.C., attach a copy of the Plan Documents or other documentation which provides information about the New Fund.
NEW SUBACCOUNT/PORTFOLIO FORM
1. SUBACCOUNT/PORTFOLIO NAME: What is the name of the New Subaccount/Portfolio?
2. INVESTMENT OBJECTIVE: What is the principal investment objective of the New Subaccount/Portfolio?
3. SUBACCOUNT/PORTFOLIO MANAGER: Who is the Subaccount/Portfolio manager for the New Subaccount/Portfolio?
4. FEES: Are any fees charged by the New Subaccount/Portfolio If yes, identify each charge.
5. S.E.C. DISCIPLINARY ACTION: Has the New Subaccount/Portfolio or its portfolio manager been subject to any S.E.C. disciplinary action within the past ten years? If yes, attach a copy of the action.
6. PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION: Does the New Subaccount/Portfolio require a filing with the S.E.C.? If yes, attach a copy of the effective product and/or fund prospectus and statement of additional information relating to the addition of this New Subaccount/Portfolio. The product and/or fund prospectus must be effective before the application for amended variable qualification will be accepted for filing.
7. PLAN DOCUMENTS OR OTHER INFORMATIONAL MATERIAL: If the New Subaccount/Portfolio is not subject to S.E.C. filing, attach a copy of the Plan Documents or other informational material which provides information about the subaccount/portfolio.
OTHER MATERIAL CHANGES
1. OTHER MATERIAL CHANGES: Identify any material changes to the applicant's current variable qualification.
(Examples of material changes are as follows: 1) change of custodian; 2) change of administrator; 3) change of broker/dealer; 4) change of investment advisor; 5) change of portfolio manager; 6) change in fund or portfolio name; 7) change in fund or portfolio investment objective; 8) S.E.C. disciplinary action against fund, investment advisor, portfolio manager or broker/dealer; 9) regulatory action against the insurer arising out of its variable annuity or variable life business; 10) amendments to: a) the Board of Directors resolutions, b) the agreement establishing the separate account, c) the variable contract, or d) registration statement or prospectus; and 11) any substantial change in management of the Separate Account).
2. PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION: If filing with the S.E.C. is required for any of the changes listed above, attach a copy of the effective prospectus and statement of additional information which reflects these changes.
3. PLAN DOCUMENTS: If filing with the S.E.C. for any of the changes identified above is not required, attach a copy of the Plan Documents or other documentation which provides information about these changes.
ACKNOWLEDGMENT OF CERTIFICATION OF AMENDED VARIABLE CONTRACT FILING SAMPLE
SUBJECT: Your amended VA/VL filing received [***date***], along with your Certificate of Compliance regarding the filing.
The California Department of Insurance acknowledges the above dated amendment filing, and recognizes that you have certified that your are in full compliance with California law regarding Separate Accounts and variable contracts.
You may now begin to market your amended product in California, subject to the following specific conditions:
1) The Department may review your amended filing at any time, now or in the future, and if it finds good cause to reasonable conclude that you are not, or were not, in compliance with California law, and applicable regulations, and bulletins, the Department may order your to withdraw your product from the market, or it may take whatever other regulatory action it deems reasonable and necessary, subject to affording you a right to be heard on the matter.
2) Variable contracts, offered for sale in California, pursuant to this amended filing, must be filed with and approved by the Policy Approval Bureau of the Department.
3) By acknowledging this filing, the Department neither approves nor disapproves of your amendment, or any of the contents of it, and the Department has not passed upon the accuracy of any statement or representation made.
Thank you for your cooperation.
Very truly yours,
COMMISSIONER OF INSURANCE