Which statement best describes how variable life insurance and variable annuities are regulated for sale in Virginia?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Variable products combine an insurance chassis with securities features: their values vary with the performance of a separate account invested in securities. Virginia addresses the insurance side through Va. Code § 38.2-3113 and the administrative rules of the Virginia Administrative Code, including provisions such as 14 VAC 5-20-30 and 14 VAC 5-20-80 governing variable-rate and variable contracts, while federal securities regulation also applies through self-regulatory oversight of the securities industry. A candidate preparing to market variable products must therefore understand both regulatory layers.
Why the other options are wrong
- A) Ignoring the securities-law overlay misses the defining feature of variable products; their separate-account values bring them within federal securities regulation alongside Va. Code § 38.2-3113.
- B) The fixed chassis does not make the product fixed; the benefits that vary with investment performance are what trigger the dual regulation.
- C) Virginia's insurance rules squarely reach variable contracts through Va. Code § 38.2-3113 and the related administrative rules; federal law does not displace the state's insurance oversight.
Memory hook
Variable products wear two regulatory hats — securities on top, insurance underneath.