Investment Company Act Of 1940


Definition of "Investment company act of 1940"

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Act that regulates the variable dollar insurance products (equity related) sold by insurance companies. The act includes regulations that stipulate: the variable dollar insurance products must be funded through a separate account (segregated from the other investment accounts of the insurance company); benefits and cash values must vary in tandem with the investment returns of this separate account; mortality and expense fluctuations (above the maximum chargeable stipulated in the policy) must be borne by the insurance company; maximum sales load; and periodic financial reports must be sent to the policy owner.

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