A stock insurer or mutual insurer may issue individual and group variable life insurance contracts that provide for payment varying directly with the investment experience of a segregated asset account if the stock insurer or mutual insurer: is authorized to issue life insurance contracts in the State; and is authorized by the Commissioner to issue individual and group variable life insurance contracts. A stock insurer or mutual insurer may issue individual and group variable annuity contracts that provide for payment varying directly with the investment experience of a segregated asset account if the stock insurer or mutual insurer: is authorized to issue annuity contracts in the State; and is authorized by the Commissioner to issue individual and group variable annuity contracts. To be authorized to issue variable contracts, a stock insurer or mutual insurer shall comply with regulations adopted by the Commissioner. The regulations of the Commissioner may include: requirements for a minimum capital and surplus in excess of the amount otherwise required for the issuance of life insurance contracts and annuity contracts that are not variable contracts; and other requirements that the Commissioner considers appropriate to safeguard the interests of variable contract holders, other policyholders, insurers, and the public.

A segregated asset account may invest in any investments contractually permitted for the segregated asset account and specified in a plan of operation, and the restrictions, limitations, and other provisions of this article relating to investments shall not apply to the investments contained in the segregated asset account, provided that prior to delivery or issuance for delivery in the State, the form of the policy or annuity contract and the plan of operation have been filed with and approved by the Commissioner. Preferred and common stock investments of amounts allocated to a segregated asset account may not be included in applying the 10% limitations under § 5–511(f) of this article. The investments of a segregated asset account shall comply with the regulations of the Commissioner. To the extent provided under the applicable contracts, the part of the assets of a segregated asset account equal to the reserves and other contract liabilities with respect to the account may not be chargeable with liabilities arising out of any other business that the insurer may conduct.

A variable life insurance policy or variable annuity contract may not be delivered or issued for delivery in the State until the form of the policy or annuity contract has been filed with and approved by the Commissioner. By regulation, the Commissioner shall determine the grace, reinstatement, and nonforfeiture provisions and other required policy provisions that are appropriate to variable life insurance contracts and variable annuity contracts.