Investment strategy: An evaluation point should of course be the strategy itself: if it has an attractive balance sheet, a solid process, an experienced manager, etc. From there, the sponsor of the plan can evaluate the vehicle by which the strategy is provided: investment fund, CIT or ISA. In order for a plan to be invested in a CIT, the plan sponsor must complete and return all the participation elements and other documents necessary to the CIT agent and expressly authorize the investment of assets in such a CIT. If, at any time, the agent finds that the plan is no longer eligible for a stake in such a CIT, the plan`s investment in such a CIT is immediately withdrawn and returned to the plan. At the end of the existing agreements, JMCG establishes a definitive list of all amounts due to FTB, in accordance with the terms of the mutual fund sale agreement prior to the termination date, and pays this amount to FTB in accordance with the provisions of the mutual fund agreement. Rules 6e-3 (T) (b) (15) allow VLI accounts offering flexible premium VLI contracts to hold only shares of an insurance fund that will be offered its shares exclusively on VLI accounts (through premium premium premium contracts or VLI contracts), WA accounts or general accounts of one or more affiliated insurance companies. (14) Therefore, Rule 6e-3 (T) does not allow a flexible premium VLI account to invest in shares of an underlying fund that serves as an investment vehicle for expanded joint financing or shared financing. The origin of these exclusivity restrictions is somewhat obscure, but they have generally evolved as a result of concern by the Securities and Exchange Commission (SEC) about possible conflicts between the interests of VLI contract owners, who have been indirectly invested in an insurance fund, and other investors in such a fund. For example, when Section 6e-2 was first adopted in 1976, there were no tax restrictions to prevent VLI accounts from holding shares in public funds.

The SEC appears to have been concerned that VLI contract owners, who are indirectly invested in a public fund, would have other investment incentives than community members invested in a public fund. For example, the tax treatment of the income and capital income of a fund for VLI owners would have been different from that of most other shareholders. Similarly, potential conflicts between the interests of VLI contract owners and other investors in insurance funds (as permitted by tax law) are now possible, such as owners of AV contracts. For example, the diversification rules in Section 817 (h) are different for VLI and AV accounts, which may encourage VLI contract owners to want an investment strategy for an insurance fund that is different from that desired by AV policyholders. Exceptions to SECExclusivity RestrictionsIn terms of luck for investment and insurance funds, there has been no serious conflict between the interests of VLI policyholders and other investors in insurance funds. (15) For this and other reasons, the SEC has granted exemptions from the exclusivity rules of Rules 6e-2 and 6th-3 (T) to the extent necessary to allow for mixed funding, shared funding and expanded mixed funding. Exemptions are subject to a number of essential conditions designed to ensure that potentially significant conflicts between the interests of VLI contract owners and other investors are identified and resolved in a manner that does not penalize a class of investors. (16) For example, directors of an insurance fund must monitor the fund`s activity to determine the emergence of substantial conflicts of interest between the interests of WA contract owners, VLI policyholders and plan eligible members, and determine what action to take in response to such conflicts, if any.