|
| Dear Ms. Marquigny: |
| |
| This letter is in response to the Staff’s comments you provided in writing on February 4, 2010 |
| regarding the above referenced Post-Effective Amendment No. 15 to Registrant’s Registration |
| Statement on Form N-4 as filed on December 31, 2009 pursuant to Rule 485(a) for the |
| Investment Plus Variable Annuity Contract. |
| |
| Registrant filed Post-Effective Amendment No. 16 to the Registration Statement on March 1, |
| 2010 pursuant to Rule 485(a) incorporating revisions made in response to the Staff’s comments. |
| |
| In order to facilitate the Staff’s review of Registrant’s responses, each of the Staff’s comments |
| (in italics) is set forth below in chronological order immediately followed by Registrant’s |
| response. |
| |
| Registrant is enclosing a courtesy copy of Post-Effective Amendment No. 16 marked to show |
| revisions made in response to the Staff’s comments (the “Marked Courtesy Copy”). Registrant is |
| also enclosing a clean courtesy copy of Post-Effective Amendment No. 16. (the “Clean Courtesy |
| Copy”). To assist the Staff in its review, the responses reference page numbers of the Marked |
| Courtesy Copy or Clean Courtesy Copy as appropriate. Generally, Registrant will refer to the |
| Marked Courtesy Copy but there are responses where Registrant believes it would be more |
| helpful to the Staff to look at the Clean Courtesy Copy. |
| |
| | outside cover page. Please note that because of the large number of portfolio |
| | companies, the list carries over to the next page. Please see pages 1 and 2 of |
| | the Clean Courtesy Copy. |
| |
| COMMENT 2. | Underlying Funds Offered (p. 3). Please identify which of the investment |
| | options are funds of funds and state that expenses of a fund of funds may be |
| | higher than a regular fund due to the two tiered level of expenses. |
| |
| RESPONSE: | Registrant has added a footnote that states “These underlying mutual funds are |
| | fund of funds and expenses may be higher due to the tiered level of expenses.” |
| | Please see page 2 of Marked Courtesy Copy. |
| |
| COMMENT 3. | Table of Contents (pp. 4-5). Per Rule 481(c), the Table of Contents “must |
| | show the page number of the various sections or subdivisions of the |
| | prospectus.” Please revise accordingly. |
| |
| RESPONSE: | Registrant has added the page numbers in the Table of Contents for the |
| | various sections of the prospectus. Please see pages 3 and 4 of the Clean |
| | Courtesy Copy. |
| |
| COMMENT 4. | Glossary (pp. 6-7). |
| |
| | (a) Accumulated Value. The definitions of accumulated value, DCA Plus |
| | accumulated value, Fixed Account accumulated value, and Separate Account |
| | division accumulated value are all circular. Please define the primary term |
| | independently. |
| |
| | RESPONSE: Registrant has revised the definition of “accumulated value” to |
| | mean “the sum of the amounts invested in the DCA Plus Account(s), the |
| | Fixed Account and the Separate Account divisions.” Please see page 10 of the |
| | Marked Courtesy Copy. |
| |
| | (b) Transfer. Please clarify what you mean by “simultaneous transfers.” The |
| | term “simultaneous” sounds like a single transfer is a one-to-one swap of |
| | underlying funds. Does it mean transfers among several funds on the same |
| | day would be counted as multiple transfers? |
| |
| | RESPONSE: Registrant has clarified the definition as follows – “All |
| | transfers initiated during the same valuation period are considered to be one |
| | transfer for purposes of calculating the transaction fee, if any.” Please see |
| | page 11 of the Marked Courtesy Copy. |
| |
| | (c) Unit/Unit Value. The distinction between unit and unit value is not very |
| | clear. As written, “unit” sounds like a division’s value (instead of the |
| | increments used to describe a division's value). Please revise as appropriate. |
| |
| | RESPONSE: Registrant has revised the definition of “unit” to mean “the |
| | accounting measure used to determine your proportionate interest in a |
| division.” Please see page 11 of the Marked Courtesy Copy. |
| |
| COMMENT 5. | Fee Table Presentation: Generally (pp. 8-11). |
| |
| | (a) Consistent Terminology. Maximum charges are referred to as |
| | “guaranteed maximum” in the transaction fee table and just “maximum” |
| | everywhere else. Based on the context (and the fact that the maximum figure |
| | for State Premium Taxes is called “guaranteed maximum”), the word |
| | “guaranteed” is confusing and obscures the understanding of the maximum |
| | charge. Please do not use it in any of the fee tables. See Form N-4, Item 3, |
| | Instruction 5. |
| |
| | RESPONSE: Registrant has deleted the words “guaranteed maximum” and |
| | used just “maximum” in the fee tables. Please see pages 7 and 8 of the Clean |
| | Courtesy Copy. |
| |
| | (b) Consistent Format/Presentation. If you wish to show current charges in |
| | addition to the required maximum charge, the presentation should be |
| | consistent for all fee tables. Each fee should have its own line item showing |
| | the maximum charge first and then the current charge. Per Instruction 5 of |
| | Item 3, Form N-4 states that current charges can not obscure or impede the |
| | understanding of the maximum charge. Please find an alternate format that |
| | will permit consistent presentation of maximum and current charges |
| | throughout. Consider, for example, presenting maximum charges in bold in |
| | one column and showing current charges in regular typeface in an adjacent |
| | column. Alternatively, for those line items that have a lower current charge, |
| | you may indicate it in a footnote to the table. |
| |
| | RESPONSE: Although Registrant believes that its current approach is |
| | consistent with the requirements of Item 3 of Form N-4, Registrant has |
| | revised the fee tables to create 3 columns – one for the name of the charge, the |
| | second for the maximum charge and the third for the current charge. Please |
| | see pages 7 and 8 of the Clean Courtesy Copy. |
| |
| COMMENT 6. | Transaction Fee Table (p. 8). |
| |
| | (a) Sales Charge. Please do not include a line item for sales charges if no |
| charges are or will be assessed. See Instruction 3 to Item 3. |
| |
| | RESPONSE: Registrant has deleted the line item for sales charges. Please |
| | see page 7 of the Clean Courtesy Copy. |
| |
| | (b) State Premium Taxes. The state premium tax charge presentation is |
| | confusing. If the charge depends on what each state assesses, is the reference |
| | to “guaranteed” maximum accurate? Is 3.5% the maximum premium tax |
| | charge Registrant would pass on to contractowners? |
| |
| | RESPONSE: Registrant has deleted the word “guaranteed” in the state |
| | premium tax charge presentation. Please see page 7 of the Clean Courtesy |
| | Copy. |
| |
| COMMENT 7. | Periodic Expenses Table Separate Account Charges. (p. 9).Please present a |
| single line item for each charge. See Comment 5(b), above. |
| |
| RESPONSE: | Although Registrant believes that its current approach is consistent with the |
| | requirements of Item 3 of Form N-4, Registrant has revised the fee tables to |
| | create 3 columns – one for the name of the charge, the second for the |
| | maximum charge and the third for the current charge. Please see page 8 of the |
| | Clean Courtesy Copy. |
| |
| COMMENT 8. | Optional Rider Charges (pp. 9, 11). |
| |
| | (a) Premium Payment Credit Rider Charge. The meaning of “plus a |
| | reduction” is not apparent. Please clarify. |
| |
| | RESPONSE: Under the Premium Payment Credit Rider, the maximum |
| | charge includes a reduction of 0.60% of the Fixed Account interest rate for |
| | any amounts allocated to the Fixed Account. Registrant has revised the |
| | disclosure to state “and a reduction.” Please see page 8 of the Clean Courtesy |
| | Copy. |
| |
| | (b) Percentages. The rider charges are presented as a percentage without |
| | identifying the base number to which the percentage refers. Please clarify (e.g, |
| | 0.30% of what value?). |
| |
| | RESPONSE: Registrant has added a parenthetical identifying the base |
| | number to which the percentage refers after the name of each rider in the fee |
| | tables where applicable. Please see page 8 of the Clean Courtesy Copy. |
| |
| | (c) Quarterly Charges. The annualized figures presented for some of the |
| | charges (e.g., GMWB 2-SL Rider and GMWB 2 SL/JL Rider) do not identify |
| | the base value to which the percentage applies. The table should state that the |
| | charge is a percentage of the base number (account value, investment back |
| | withdrawal benefit base, etc.). Also, please revise the corresponding footnote |
| | disclosure to make clear whether the quarterly deduction is based on the |
| | average value for the base number over the quarter, or the actual base charge |
| | value on the last day of the quarter instead. If correct, the revised footnote |
| |
| | should indicate that the maximum charge is the sum of the 4 quarterly charges |
| | and could be higher than a charge based on the average annual base value. |
| | The corresponding Item 6 disclosure should explain this as well. |
| |
| | RESPONSE: Registrant has added a parenthetical identifying the base |
| | number to which the percentage refers after the name of each rider in the fee |
| | tables where applicable. Please see page 8 of the Clean Courtesy Copy. For |
| | example, Registrant has revised the corresponding footnote disclosure to state |
| | that “The average quarterly Investment Back withdrawal benefit base is equal |
| | to the Investment Back withdrawal benefit base at the beginning of the |
| | calendar quarter plus the Investment Back withdrawal benefit base at the end |
| | of the calendar quarter and the sum is divided by two. There may be times |
| | when the sum of the four quarterly fee amounts is different than the fee |
| | amount if we calculated it annually. For example, if your withdrawal benefit |
| | base is changed on your contract anniversary, the fee for that calendar quarter |
| | will vary from the other quarters.” Please see page 17 of the Marked Courtesy |
| | Copy. |
| |
| | (d) Enhanced Death Benefit Rider - Footnote 6. In footnote 6, please cross- |
| | reference the appropriate Appendix section where the calculations are |
| | illustrated (Appendix F, p. 150). Please make similar revisions to the |
| | footnotes for other riders that include calculations in the appendices. |
| |
| | RESPONSE: Registrant has cross-referenced the appendices in the footnotes |
| | as applicable. Please see page 17 of the Marked Courtesy Copy. |
| |
| | (e) Riders No Longer Offered. Please move the charge presentation for riders |
| | you are no longer selling so the presentation of available riders is clear and |
| | not obscured. The charges for the old, unavailable riders should appear at the |
| | end of the Optional Riders section or in a footnote. |
| |
| | RESPONSE: Registrant has moved the charge presentation for riders no |
| | longer available for sale to the end of the optional riders section of the fee |
| | table. Please see page 8 of the Clean Courtesy Copy. |
| |
| COMMENT 9. | Portfolio Expenses (p. 10).Please confirm that the portfolio expense ranges |
| | do not reflect fee waivers or amend accordingly.1Also, please disclose |
| | whether the fees in the table reflect the expenses of the underlying funds for |
| | funds subject to a fund of funds structure. Finally, confirm that the figures |
| | presented comply with Instruction 17(a) to Item 3 of Form N-4. |
| |
| RESPONSE: | Registrant has added the following sentence after the portfolio expense ranges |
| | – “The minimum and maximum underlying mutual fund operating expenses |
| | above reflect the contractual waivers applied to some underlying mutual funds. |
| | Refer to underlying mutual fund prospectuses for expense information.” |
| | Please see page 16 of the Marked Courtesy Copy. Registrant confirms that the |
| | fees in the table reflect the expenses of the underlying funds for funds subject |
| | to a fund of funds structure as well as compliance with Instruction 17(a) to |
| | Item 3 of Form N-4. |
| |
| COMMENT 10. | Expense Examples (p. 12).Please clarify that the examples do not reflect |
| | premium taxes. Also, confirm that the expense example figures reflect (a) the |
| | highest total operating expenses charged by the currently available portfolio |
| | companies for the year ended December 31, 2009; (b) contractual fee waivers |
| | only for the duration of the contractual period, and (c) no additional charges |
| | attributable to the credit provided by the Premium Payment Credit Rider (e.g., |
| | if the credit was $100, the charges are not based on an investment of |
| | $10,100.). |
| |
| RESPONSE: | Registrant has added a bullet point to the example assumptions that states that |
| | “no premium taxes are deducted.” Registrant will update the examples to |
| | reflect the highest total operating expenses charged by the currently available |
| | portfolio companies for the year ended December 31, 2009 in the Registrant’s |
| | filing pursuant to Rule 485(b) on April 30, 2010. Registrant confirms that the |
| | examples will reflect any contractual fee waiver only for the duration of the |
| | contractual period. Finally, Registrant has added the following sentence to the |
| | bullet point regarding the Purchase Payment Credit Rider – “The premium |
| | payment credit is added to the accumulated value at issue and charges are |
| | based on that amount.” Please see page 18 of the Marked Courtesy Copy. |
| |
| COMMENT 11. | Summary: Investment Limitations (p. 13).Please add a bullet point |
| | indicating that certain riders may impose limitations on the investment |
| | options available to the contractowner. |
| |
| RESPONSE: | Registrant has added the requested bullet point. Please see page 19 of the |
| | Marked Courtesy Copy. |
| |
| COMMENT 12. | Summary: Transfers (p. 13).Please use boldface type or some other means of |
| | drawing attention to the statement immediately below the bullet points which |
| | reads, “[d]uring the annuitization period, transfers are not permitted (no |
| | transfers once payments have begun).” |
| |
| RESPONSE: | Registrant has used boldface type for the statement as requested. Please see |
| | page 19 of the Marked Courtesy Copy. |
| |
| COMMENT 13. | Summary: Examination Offer Period (free look) (p. 14).Please clarify the |
| | parenthetical in the first bullet point. Specifically, clarify that the underlying |
| | fund fees and charges are already factored into the Separate Account division |
| | accumulated value. As written, it could give the impression that the fund fees |
| | and expenses are deducted from the total accumulated value before that value |
| | is returned. Clear disclosure would explain that those charges are factored |
| | into the initial calculation of total accumulated value. |
| |
| RESPONSE: | Registrant has added the following sentence – “The underlying fund fees and |
| | charges are not refunded to you as they are already factored into the Separate |
| | Account division accumulated value.” Please see page 20 of the Marked |
| | Courtesy Copy. |
| |
| COMMENT 14. | Deletion or Substitution of Separate Account Divisions (pp. 16, 18, 67).Per |
| | the requirements of Item 7(c) and the related instruction, the description of |
| | separate account changes and changes described under “Rights Reserved by |
| | the Company” on page 67 should state who must approve these changes and |
| | who must receive notice. See Item 7(c)(ii) and (iii). Please do so. In addition, |
| | please confirm to the staff, that the prospectus describes all material changes |
| | registrant reserves the right to make, not just “examples” of such changes as |
| | the language on page 67 could suggest. See Instruction to Item 7(c). |
| |
| RESPONSE: | Registrant has revised the description under “Deletion or Substitution of |
| | Separate Account Divisions”. Please see page 22 of the Marked Courtesy |
| | Copy. In its filing pursuant to Rule 485 (b) on April 30, 2010, Registrant will |
| | replace the current disclosure under “Rights Reserved by the Company” with |
| | the same revised disclosure contained in “Deletion or Substitution of Separate |
| | Account Divisions.” In addition, Registrant confirms that the prospectus |
| | describes all material changes that Registrant reserves the right to make. |
| |
| COMMENT 15. | The Contract (p. 16).Please revise the 3rd paragraph to remove any |
| | implication that an investor may not rely upon the prospectus as a document |
| | that describes all the material rights and features of the policy. |
| |
| RESPONSE: | Registrant has revised the third paragraph to explain that the descriptions in |
| | the prospectus are based on the provisions of the contract. Please see page 23 |
| | of the Marked Courtesy Copy. |
| |
| COMMENT 16. | Premium Payments (p. 17).Please explain the procedure for obtaining prior |
| | approval to make premium payments in excess of $2 million or add a cross- |
| | reference to the prospectus page on which that procedure is described. |
| |
| RESPONSE: | Registrant has added a sentence that refers contract owners to a telephone |
| | number if they have questions about obtaining prior approval. Please see page |
| | 24 of the Marked Courtesy Copy. |
| |
| COMMENT 17. | Premium Payment Credit (p. 17).Please delete the phrase “[s]ubject to |
| | availability” or, in the cross-referenced section, add additional disclosure |
| | describing the limitation(s) to which it refers. |
| |
| RESPONSE: | Registrant has deleted the phrase. Please see page 24 of the Marked Courtesy |
| | Copy. |
| |
| COMMENT 18. | Principal Variable Annuity Exchange Offers (p. 18). |
| |
| | (a) Principal Variable Annuity Exchange Offers. In a response letter filed on |
| | EDGAR, please clarify whether “Principal Variable Annuity Contract” refers |
| | to any contract issued by Principal that meets the eligibility conditions or to a |
| | specific contract. If multiple contracts, please confirm that the chart in |
| | Appendix A is accurate for each contract. |
| |
| | RESPONSE: Registrant clarifies that “Principal Variable Annuity Contract” |
| | refers to a specific contract. |
| |
| | (b) Exchange Credit. In your response, please describe more clearly the |
| | existing contractowners to whom this exchange credit applies. Has Registrant |
| | provided separate notice/offer of exchange to a specific group of fixed |
| | deferred annuity owners? Where are the procedures for the exchange |
| | described? In your letter, please explain whether Registrant intends to file |
| | 485A amendments to this prospectus in the event this exchange offer is |
| | discontinued. Does Registrant intend to file 485A amendments if it exercises |
| | the right to change or discontinue the exchange credit as described in the |
| | disclosure? Finally, your response should specifically identify the exemptive |
| | application number and corresponding exemptive order covering the |
| | recapture of this exchange credit or explain why such an order is not required. |
| |
| | RESPONSE: The exchange credit applies to those Principal Life Insurance |
| | Company’s fixed deferred annuity owners who are no longer subject to |
| | surrender charges and elect to exchange their contracts for the Investment Plus |
| | Variable Annuity. This is an exchange credit, not an exchange offer. |
| | Registrant has not provided separate notice of the exchange to any specific |
| | group of fixed deferred annuity owners. Typically, if the owner is interested in |
| | a variable annuity, the registered representative informs the owner of the |
| | availability of this exchange credit. The fixed deferred annuity owner signs a |
| | disclosure document that describes the terms of the exchange credit. |
| |
| | If the Registrant determines that discontinuation or a change of the exchange |
| | credit is a material change that warrants the filing of a post-effective |
| | amendment pursuant to Rule 485(a), it will do so. |
| |
| | Finally, Registrant has deleted the sentence regarding recovering the exchange |
| | credit. Please see page 25 of the Marked Courtesy Copy. |
| |
| COMMENT 19. | Right to Examine (free look) (p. 19). |
| |
| | (a) Amount Returned & State Law. The following language is confusing and |
| | repeated several times, “depending on the state in which the Contract was |
| | issued, we will return any applicable fees and charges.” State law may govern |
| | the terms of a variable contract only to the extent that the state requirements |
| | do not conflict with the federal securities laws. We note that a security must |
| | be redeemable at surrender value which may exceed premiums paid if the |
| | value of the selected investment options increases due to positive market |
| | performance during the free-look period. Please revise the description of the |
| | amount to be returned so it is clear that Registrant will always return at least |
| | the surrender value of the policy, regardless of state law. |
| |
| | RESPONSE: Registrant has deleted the sentence “depending on the state in |
| | which the Contract was issued, we will return any applicable fees and |
| | charges”. Please see page 26 of the Marked Courtesy Copy. Registrant has |
| | also revised the disclosure to make it clear that in all states, Registrant will |
| | return at least the accumulated value. Please see page 26 of the Marked |
| | Courtesy Copy. |
| |
| | (b) Money Market Fund. Please clarify that if the Registrant allocates initial |
| | premiums to a money market account during the free look period and the free |
| | look is exercised, contractowners must receive the greater of their purchase |
| | payments (premiums) or the contract value without surrender charges. See, |
| | e.g., State Farm Life Insurance Company, No-Action Letter, 1997 SEC No-Act. |
| | LEXIS 959 (October 24, 1997). Also, please disclose the specific |
| | circumstances in which Registrant would exercise its right to allocate funds to |
| | the money market fund until the free look period expires. |
| |
| | RESPONSE: Registrant has added the following sentence to the disclosure – |
| | “If your initial premium payments are allocated to the Money Market Division |
| | and the free look is exercised, you will receive the greater of premium |
| | payments or the accumulated value without a surrender charge.” Registrant |
| | has also clarified that Registrant may exercise its right during times of |
| | economic uncertainty and with prior notice. Please see page 26 of the Marked |
| | Courtesy Copy. |
| |
| | (c) Premium Payment Credit Recapture. Please clarify the factual |
| | circumstances in which the amount refunded would be less than the initial |
| | premium payment (i.e., if the market value in the investment options has |
| | dropped). |
| |
| | RESPONSE: Please refer to the sixth bullet point under “Premium Payment |
| | Credit Rider” on page 44 of the Marked Courtesy Copy, where there is a |
| | discussion of the factual circumstances in which the amount refunded would |
| | be less than the initial premium payment. |
| |
| | (d) Exchange Credit. Page 18 indicates that any 1% exchange credit would |
| | also be recaptured during the free look period, but there is no parallel |
| | reference here. Please reconcile. |
| |
| | RESPONSE: As noted in our response to Comment 18(b), Registrant has |
| | deleted the sentence regarding recapture of the exchange credit. |
| |
| COMMENT 20. | Unscheduled Transfers (p. 21). |
| |
| | (a) Transferred Value. Please revise the second bullet point to make clear that |
| | the transfer is valued at the accumulation value next determined after the |
| | transfer request has been received. The current language is imprecise2and |
| | could be interpreted to mean that the transfer receives the AUVs existing at |
| | the time the transfer is received (instead of the ones next calculated). Please |
| | make corresponding revisions throughout the prospectus wherever similar |
| | language is used (e.g., under “Surrenders” on p. 24: sentence 2 of the 1st full |
| paragraph and 2nd bullet point under “Total Surrender”). |
| |
| | RESPONSE: Registrant has revised the second bullet point under |
| | “Unscheduled Transfers” as follows – “Transfer values are calculated using |
| | the price next determined after we receive your request.” Please see page 28 |
| | of the Marked Courtesy Copy. To be consistent, Registrant has revised the |
| | second bullet point under “Total Surrender” as requested. Please see page 31 of the |
| | Marked Courtesy Copy. In its filing pursuant to Rule 485(b) on April 30, 2010, |
| | Registrant will make a corresponding revision to the second sentence of the first |
| | full paragraph under “Surrenders”. |
| |
| | (b) Limitations on Unscheduled Transfers. The 2nd bullet point states that |
| | imposing a transfer fee is one method Registrant may use to curb market |
| | timing. If assessed, the charge reserved for in the fee table would apply to |
| | “each unscheduled transfer after the first unscheduled transfer in a contract |
| | year.” Given that it would apply after a single unscheduled transfer in a year, |
| | it does not appear to be the fee described in the market-timing disclosure. Is |
| | the market timing disclosure contemplating a different transfer fee from the |
| | one in the fee table? If so, please include it in the fee table (with a fee name |
| | indicating it as a market timing charge) and describe it in the charge |
| | narrative. If it is not a different charge, please revise the disclosure to make |
| |
| | this clear (i.e., narrative charge description on p. 32 & market timing bullet |
| | point on p. 21). |
| |
| | RESPONSE: Registrant notes that there is only one fee, the “transaction fee” |
| | as described in the fee table. Registrant has changed the reference to a |
| | “transfer fee” to “transaction fee.” Please see page 28 of the Marked Courtesy |
| | Copy. |
| |
| COMMENT 21. | The Annuitization Period (p. 27). |
| |
| | (a) Annuitization Date. Per the requirements of Item 8(b), the earliest and |
| | latest annuity commencement dates must be disclosed in the prospectus. |
| | Please supplement the reference to the contract data pages to meet this |
| | requirement. |
| |
| | RESPONSE: Registrant has added the earliest and latest annuity |
| | commencement dates to the disclosure. Please see page 34 of the Marked |
| | Courtesy Copy. |
| |
| | (b) Partial Annuitization. Please place the first paragraph under this heading |
| | in boldface type or use some other method to draw attention to the disclosure |
| | describing who can not partially annuitize. In addition, consider adding |
| | qualifying language to the partial annuitization references in the 2nd to last |
| | paragraph on page 28.3 |
| |
| | RESPONSE: Registrant has placed the first paragraph under this heading in |
| | boldface type. Please see page 34 of the Marked Courtesy Copy. Registrant |
| | does not understand the Staff’s comment regarding adding qualifying |
| | language and requests clarification. |
| |
| COMMENT 22. | Annuity Payment Options (pp. 28-29). |
| |
| | (a) Calculation of Annuity Benefit Payments. Either here or in the SAI, please |
| | explain in greater detail the method of determining the amount of annuity |
| | payments. See Instruction 2 to Item 8. See also Item 22. Specifically, clarify |
| | the italicized language in the following statement on page 28: “Annuity |
| | benefit payments are determined in accordance with annuity tables and other |
| | provisions contained in the Contract.” (emphasis added.) Note that all |
| | material provisions of the contract must be described in the prospectus. |
| |
| | RESPONSE: Registrant has revised the disclosure as follows – “The amount |
| | of the initial payment is determined by applying all or a portion of the |
| | accumulated value as of the date of the application to the annuity table for the |
| | annuitant’s annuity benefit payment option, gender, and age. The annuity |
| | benefit payment tables contained in the Contract are based on the Annuity |
| | 2000 Mortality Table. These tables are guaranteed for the life of the |
| | Contract.” Please see page 35 of the Marked Courtesy Copy. Registrant |
| | clarifies that all material provisions of the contract are described in the |
| | prospectus. |
| |
| | (b) Fixed Period Certain Payout Options. For non-life-contingent payment |
| | options based on a term certain, please explain to the Staff how these options |
| | are redeemable. The disclosure states that “there is no right to take any total |
| | or partial surrenders after the annuitization date.” This statement appears to |
| | apply without regard to the payout option selected. |
| |
| | RESPONSE: Registrant clarifies to the Staff that no amounts are redeemable |
| | for life contingent and non-life contingent payment options based on a term |
| | certain. |
| |
| | (c) Supplementary Contract. For annuity payment options that involve |
| | issuance of a supplemental annuity contract, please identify for the Staff the |
| | exemptive order permitting such exchange or represent that the exchange is |
| | permissible under Rule 11a-2 of the under the Investment Company Act of |
| | 1940. |
| |
| | RESPONSE: Registrant has deleted the paragraph regarding the |
| | “Supplementary Contract.” Please see page 36 of the Marked Courtesy Copy. |
| |
| COMMENT 23. | Charges and Deductions: Generally (pp. 30-34).Per Item 6(a), please state |
| | the purpose of the transaction fees. If the insurance company may realize a |
| | profit from this charge or any other charges under the contract, please |
| | disclose this also. |
| |
| RESPONSE: | Registrant has added disclosure about the purpose of the transaction fees. |
| | Please see page 38 of the Marked Courtesy Copy. Registrant does not expect a |
| | profit from this charge. Please see the first paragraph under “Charges and |
| | Deductions” on page 36 of the Marked Courtesy Copy. |
| |
| COMMENT 24. | Charges for Rider Benefits: Generally (p. 33).In your response letter, please |
| | describe the “detailed information concerning the optional riders” that is not |
| | contained in the prospectus. |
| |
| RESPONSE: | Registrant has revised the sentence as follows – “Please contact your |
| | registered representative or call us at 1-800-852-4450 if you have any |
| questions.” Please see page 40 of the Marked Courtesy Copy. |
| |
| COMMENT 25. | GMWB 2-SL/JL Rider — Investment Protector Plus 2:Charge Description |
| | (p. 33). Please add disclosure explicitly describing the value upon which the |
| | charge is based (called the “average quarterly Investment Back withdrawal |
| | benefit base”) and how it is calculated. Either the description should appear |
| | in the charge narrative or the charge section should include a cross reference |
| | to the wherever the term is explained. If the description is indicated via cross- |
| | reference, the reference must be specific enough for a reader to find the same |
| | term quickly and understand it easily. |
| |
| | Currently, there is no description of the “average quarterly Investment Back |
| | withdrawal benefit base” anywhere in the prospectus. The related rider's |
| | “Withdrawal Benefit Base” section does not explain what the relationship |
| | between that value (the Withdrawal Benefit Base) and the fee base actually is. |
| | The narrative does not connect these concepts adequately. For example, the |
| | Withdrawal Benefit Base section (p. 42) defines “the initial withdrawal base” |
| | for the rider's two withdrawal methods, the “For Life Withdrawal Option” |
| | and the “Investment Back Withdrawal Option.” It then describes how that |
| | value gets recalculated each contract anniversary. However, nothing connects |
| | the annual Withdrawal Benefit Base value to the amount that the rider fee is |
| | based on (the “average quarterly Investment Back withdrawal benefit base”). |
| | Please revise the disclosure so it describes how the average quarterly |
| | Investment Back withdrawal benefit base is determined based on the annual |
| | anniversary calculation of the Withdrawal Benefit Base. Also explain what |
| | makes it the “Investment Back” calculation instead of the “For Life” |
| | calculation. Finally, explain how 0.95% of the average quarterly value could |
| | differ from the sum of 4 quarterly deductions of 0.2375% of the quarterly |
| | value. See p. 33, final sentence. |
| |
| RESPONSE: | Registrant has revised the charge description disclosure as requested. Please |
| | see pages 41 and 42 of the Marked Courtesy Copy. |
| |
| COMMENT 26. | GMWB 2-SL/JL Rider Restrictions/Limitations (p. 39). |
| |
| | (a) Generally. This section does not adequately convey the impact of the |
| | investment restrictions and limited investment options required as a condition |
| | of participating in the rider. Please move the summary of this information |
| | from page 93 to the rider's investment limitation section in the prospectus |
| | narrative (at or around page 39). You may leave pages 94 to 97 of Appendix B |
| | as is (i.e., the list of permitted funds, models and related explanatory |
| | disclosure). |
| |
| | RESPONSE: Registrant has revised the disclosure as requested. Registrant |
| | has repeated parts of the summary information contained in Appendix B in the |
| | body of the prospectus. Please see pages 48, 50 and 51 of the Marked |
| | Courtesy Copy. |
| |
| | (b) Objective of Investment Restrictions. Please explain the purpose of the |
| | investment restrictions more directly. If the investment restrictions are |
| | intended to minimize the risk that the insurance company will have to pay |
| | withdrawal benefits because market risk reduced the contract value to zero, |
| | please say this in plain English. (Currently, the relevant sentence reads “[t]he |
| | GMWB investment options reflect a balanced investment objective that is |
| | intended to support the rider guarantees.”) Also, please make corresponding |
| | changes to the parallel disclosure under the “GMWB Investment Options” |
| | header on page 41 and in Appendix B - GMWB Investment. Options. |
| |
| | RESPONSE: Registrant has revised the disclosure as follows – “While a |
| | GMWB rider is in effect, the investment options you may select are restricted. |
| | The limited investment options available under a GMWB rider (the “GMWB |
| | investment options”) reflect a balanced investment objective and if your |
| | investment goal is aggressive growth, a GMWB rider may not support your |
| | investment objective. With GMWB investment options that reflect a balanced |
| | investment objective, there is potentially a reduced likelihood that we will |
| | have to make GMWB benefit payments when the Contract value goes to zero, |
| | reaches the maximum annuitization date, or if there is a death claim.” Please |
| | see pages 50 and 106 of the Marked Courtesy Copy. |
| |
| | (c) Right to Modify Permitted Options. The 2nd to last paragraph under this |
| | header reserves Registrant's right to change the permitted investment options |
| | under the rider without any additional explanation. Given that a |
| | contractowner cannot terminate the rider for at least 5 years, please add |
| | basic cautionary language about the impact of this right, the general |
| | circumstances in which it would be exercised, and the types of changes |
| | Principal may make. Per Comment 26(a), above, consider revising and |
| | moving the relevant disclosure on page 93 to address this concern. In addition, |
| | please make corresponding changes to the statement reserving the same right |
| | under the “GMWB Investment Options” header on page 41 or provide a |
| | cross-reference to the more specific disclosure. |
| |
| | RESPONSE: Registrant has revised the disclosure as requested. Please see |
| | page 51 of the Marked Courtesy Copy. |
| |
| COMMENT 27. | Withdrawal Options (p. 41). |
| |
| | (a) For Life Withdrawal Option. For accuracy, please insert the words “each |
| | year” between “eligible,” and “you.” |
| |
| | RESPONSE: Registrant has made the revision as requested. Please see page |
| | 51 of the Marked Courtesy Copy. |
| |
| | (b) Investment Back Withdrawal Option. Please clarify whether a |
| | contractowner can take a withdrawal prior to age 59 1/2 (or before the oldest |
| | owner or annuitant is 59 1/2) under this investment option. If so, does the pre- |
| | age 59 1/2 withdrawal mean that the contractowner can no longer select the |
| | For Life Withdrawal Option in the future if the contract value reaches zero? |
| | Please clarify. |
| |
| | RESPONSE: Registrant notes that a contractowner can take a withdrawal |
| | prior to the oldest owner attaining age 59 1/2 under the Investment Back |
| | withdrawal option. Such a withdrawal will be treated as an excess withdrawal |
| | for purposes of calculating the For Life withdrawal benefit bases. Please see |
| | page 51 of the Marked Courtesy Copy. |
| |
| COMMENT 28. | Withdrawal Benefit Base (pp. 41-42). |
| |
| | (a) Rider Charge Calculation. If the Withdrawal Benefit Base figure(s) must |
| | be recalculated each quarter for the purpose of deducting the charge for the |
| | rider, please add a statement or bullet point to that effect and describe the |
| | calculation of the rider charge basis (i.e., the “average quarterly Investment |
| Back withdrawal benefit base”). See Comment 25, above. |
|
| |
| | RESPONSE: Registrant notes that the withdrawal benefit base isnot |
| | recalculated each quarter for the purpose of deducting the charge. Please see |
| | “Withdrawal Benefit Base” on page 51 of the Marked Courtesy Copy for a |
| description of when the withdrawal benefit base is calculated. |
| |
| | (b) For Life Benefit Base Calculation. If a contractowner takes a withdrawal |
| | prior to their eligible age under the For Life Withdrawal Option, has the |
| | contractowner given up the opportunity to elect the For Life option in the |
| | future? If this is so and the For Life Benefit Base is no longer calculated |
| | annually, please clarify this. Where, appropriate, make corresponding |
| | changes to the procedural disclosure describing any other “For Life” benefits |
| | Registrant stops calculating as well (e.g., For Life remaining withdrawal |
| | benefit base?). If not, explain the effect of such a withdrawal on future For |
| | Life Benefit Base calculations. |
| |
| | RESPONSE: Registrant has added the following disclosure – “If you take |
| | withdrawals prior to the oldest owner attaining age 59½, the For Life benefit |
| | bases will be reduced for excess withdrawals. If the adjustment for the |
| | withdrawals causes the For Life withdrawal benefit base to reduce to zero, the |
| | For Life withdrawal option will no longer be available to you (unless you |
| |
| | make additional premium payments).” Please see page 51 of the Marked |
| | Courtesy Copy. |
| |
| COMMENT 29. | Remaining Withdrawal Benefit Base (p. 42).Why are the 3 bullet points that |
| | describe the remaining withdrawal benefit base calculation under this |
| | heading (right above “Withdrawal Benefit Payments” heading on p. 42) |
| | different from the 2 bullet points at the top of p. 42 (the annual contract |
| | anniversary calculation of the withdrawal benefit base)? Is there a difference |
| | between the remaining withdrawal benefit base calculation and the annual |
| | contract anniversary benefit base calculation? Please revise or explain. |
| |
| RESPONSE: | Registrant notes that thereisa difference between the remaining withdrawal |
| | benefit base calculation and the contract anniversary withdrawal benefit base |
| | calculation. The bullet points under each section accurately reflect the |
| | elements of each calculation. Please see page 51 and 52 of the Marked |
| | Courtesy Copy. |
| |
| COMMENT 30. | Withdrawal Benefit Payments: General Intro (p. 42).In the 2nd paragraph |
| | under this heading, please clarify that the For Life withdrawal benefit |
| | percentage varies based on the oldest contract owner's age the day the first |
| | For Life withdrawal is taken. |
| |
| RESPONSE: | Registrant has deleted the sentence as the calculation percentage is described |
| | in greater detail on the next page. Please see page 52 of the Marked Courtesy |
| | Copy. |
| |
| COMMENT 31. | “Joint Life” For Life Withdrawal Benefit Payments 43).Please identify the |
| | criteria for an “eligible covered life” more clearly. Currently, it is hard to tell |
| | whether the covered life needed to meet certain criteria at the time the rider |
| | was issued or when the covered life is designated. For example, is a spouse |
| | "eligible" for “Joint Life” if she could not make a spousal election under the |
| | federal tax laws when the rider was issued, but she can on the date she is |
| | designated as a covered life under the rider? Another example is the timing |
| | description in the second "NOTE" on page 43. Please rewrite it in plain |
| | English.4 |
| |
| RESPONSE: | Registrant has revised the disclosure to identify the criteria for an “eligible |
| | covered life” more clearly. Registrant has revised the second “NOTE” as |
| | follows – “At the time a covered life is designated, that covered life must |
| | satisfy this rider’s issue age requirements.” Please see pages 52 and 53 if the |
| | Marked Courtesy Copy. |
| |
| COMMENT 32. | Calculating the For Life Withdrawal Benefit Payment: Joint Life Chart (p. |
| | 44).The age described in the 1st column of the joint life chart is not clear. Is |
| | it the age of the younger spouse: |
| | (a) at the time of the 1st “For Life” rider withdrawal (i.e., the 1st rider |
| | withdrawal after the oldest owner/annuitant has already turned 59 1/2), or |
| | (b) at the time of the 1st “Investment Back” rider withdrawal (which could be |
| | before either of them have turned 59 1/2)? |
| | Please clarify. |
| |
| RESPONSE: | Registrant clarifies to the Staff that the age described in the 1stcolumn of the |
| | joint life chart is the age of the younger covered life at the time of first |
| | withdrawal. |
| |
| COMMENT 33. | Covered Life Change (pp. 44-45). |
| |
| | (a) Joint to Single Life. If Paragraph 4(c) on page 45 means that the |
| | withdrawal benefit percentage does not change but the payments are treated |
| | as “Single Life” payments, please state this directly. If there are additional |
| | tax implications related to this “Joint Life” to “Single Life” type of |
| | conversion, indicate this as well. |
| |
| | RESPONSE: Registrant notes that there is no “Joint Life” to “Single Life” |
| | type of conversion. |
| |
| | (b) Spousal Continuation. Please clarify the impact of adding a primary |
| | beneficiary to the contract but not as a covered life for the rider. Does this |
| | mean that the newly added spouse can continue the contract when the other |
| | spouse dies, but the rider terminates? |
| |
| | RESPONSE: Registrant has added disclosure clarifying that the newly added |
| | spouse can continue the contract when the other spouse dies but that the rider |
| terminates. Please see page 56 of the Marked Courtesy Copy. |
| |
| COMMENT 34. | Effect of Withdrawals (p. 45). |
| |
| | (a) Bonus. In the first paragraph under this heading, please summarize the |
| | bonus feature or add a cross-reference to the section describing the bonus |
| | (i.e., pp. 47-48). |
| |
| | RESPONSE: Registrant has added a cross-reference to the section describing |
| the bonus. Please see page 56 of the Marked Courtesy Copy. |
| |
| | (b) Effect on Withdrawal Benefit Base. The 3rd and 4th paragraphs seem to |
| | say contradictory things about when the withdrawal benefit base is affected by |
| | a withdrawal. For an excess withdrawal, is the remaining withdrawal benefit |
| |
| | base immediately reduced or does it stay the same until the next contract |
| | anniversary? Please reconcile. |
| |
| | RESPONSE: Registrant notes that the 3rdparagraph describes the impact of a |
| | withdrawal on theremaining withdrawal benefit basewhereas the 4th |
| | paragraph describes the impact of an excess withdrawal on thewithdrawal |
| | benefit base.Please note that the 3rd paragraph states withdrawal is reflected |
| | immediately in the remaining withdrawal benefit base (this includes excess |
| | withdrawals). Please see page 56 of the Marked Courtesy Copy. |
| |
| COMMENT 35. | Excess Withdrawals (p. 46). |
| |
| | (a) Missing Concept. Please expand the concepts described in the 2nd |
| | paragraph under this heading to address the relationship between the two |
| | withdrawal options. Can a withdrawal be an excess withdrawal for the |
| | purpose of the For Life option but not the Investment Back option (or vice |
| | versa)? If so, how does that affect the contractowner's future rider benefits |
| | and/or choices under each withdrawal option? |
| |
| | RESPONSE: Registrant has added the following disclosure – “The |
| | Investment Back withdrawal option permits larger payment to you than the |
| | For Life withdrawal option. As a result, if you take a withdrawal in an amount |
| | permitted under the Investment Back withdrawal option, that withdrawal will |
| | be an excess withdrawal to the extent that it exceeds the applicable For Life |
| | withdrawal benefit payment.” Please see page 57 of the Marked Courtesy |
| | Copy. |
| |
| | (b) Effect on Withdrawal Benefit Base/Remaining Withdrawal Benefit Base. |
| | Please clarify the practical effect of the difference between these two |
| | calculations. |
| |
| | RESPONSE: Registrant clarifies to the Staff that the remaining withdrawal |
| | benefit base is adjusted immediately at the time of each withdrawal, whereas |
| | the withdrawal benefit base is only adjusted for excess withdrawals and not |
| | until the Contract anniversary. Therefore, the withdrawal benefit base and |
| | remaining withdrawal benefit base values will differ. |
| |
| | (c) Note. Please explain the first note in greater detail. Specifically, does this |
| | mean that early withdrawals are treated as excess withdrawals under the |
| | Investment Back withdrawal option as well? If so, please state this |
| | prominently in the summary of the Investment Back Withdrawal Option on |
| | page 41. If correct, also add cautionary disclosure explaining the |
| | circumstances in which early withdrawals could be inconsistent with the |
| | purpose of Investment Back withdrawal option (i.e., “to allow a more rapid |
| |
| | recovery of your premium payment”). See “Investment Back Withdrawal |
| | Option,” p. 41. |
| |
| | RESPONSE: Registrant clarifies to the Staff that early withdrawals are not |
| | treated as excess withdrawals under the Investment Back withdrawal option. |
| |
| COMMENT 36. | RMD Program: Modification or Elimination (p. 47).Please clarify whether |
| | the section describing treatment of withdrawals after the effective date of the |
| | program's modification or elimination just applies to unscheduled |
| | withdrawals or to both scheduled and unscheduled withdrawals. If it applies |
| | to both, describe the procedure a contractowner can follow to avoid a penalty |
| | for any scheduled withdrawals remaining that year. Alternatively, if a |
| | contractowner can not avoid a penalty in this situation, please state this |
| | explicitly. |
| |
| RESPONSE: | Registrant has added disclosure to clarify that any scheduled or unscheduled |
| | withdrawal in excess of a withdrawal benefit payment after the effective date |
| | of the program’s modification or elimination will be deemed an excess |
| | withdrawal. Please see page 58 of the Marked Courtesy Copy. |
| |
| COMMENT 37. | Effect of Reaching the Maximum Annuitization Date Under the Rider (p. |
| | 49).Please add a plain English, practical summary of how rider withdrawals |
| | taken before the maximum annuitization date can affect the value of GMWB |
| rider payments as a payout option in lieu of annuitization. |
| |
| RESPONSE: | Registrant has added a cross-reference to the “Effect of Withdrawals” section |
| | for information on how withdrawals prior to the maximum annuitization date |
| | affect the GMWB values. Please see page 60 of the Marked Courtesy Copy. |
| |
| COMMENT 38. | Effect of the Contract Accumulated Value Reaching Zero Under the Rider |
| | (pp. 49-50).Please explain more clearly when this provision applies. |
| | Specifically, expand the parenthetical references in the first two bullet points. |
| | The disclosure should make clear how a contractowner's prior withdrawals |
| | are related to his/her eligibility for payments under the rider if the contract |
| | accumulated value reaches zero. Also, the Staff notes that the 1stparenthetical |
| | refers to the ‘remaining withdrawal benefit base” while the For Life |
| | parenthetical does not include the word “remaining.” Revise or explain. |
| |
| RESPONSE: | Registrant has added cross-references to the “Effect of Withdrawals” section |
| | for information on the impact of withdrawals prior to the contract |
| | accumulated value reaching zero. Please see page 60 of the Marked Courtesy |
| | Copy. Registrant confirms that the disclosure in the bullet points is accurate. |
| |
| COMMENT 39. | GMWB 2 SL/JL Death Provisions (pp. 51-56). |
| |
| | (a) Chart #1. In the last row of the 1st chart, the description of the spouse’s |
| | rights seems to contradict the statement on page 43 which reads, “‘Joint Life’ |
| | for Life withdrawal benefit payments will continue until the earlier of the date |
| | of the death of the last covered life or the date the ‘For Life’ withdrawal |
| benefit base reduces to zero.” Please reconcile or explain. |
| |
| | RESPONSE: To reconcile the disclosure, Registrant has added disclosure to |
| | the beginning of the sentence quoted in the Staff’s comment. Please see page |
| | 53 of the Marked Courtesy Copy. |
| |
| | (b) Chart #3. The description of payments to beneficiaries (last column, row 1) |
| | also seems inconsistent with earlier disclosure, specifically, the last sentence |
| | on page 42. The chart states that, upon the sole owner's death, the contract |
| | and rider benefits terminate, but the beneficiary still has a right to “receive |
| | the Investment Back remaining withdrawal benefit base as a series of |
| | payments” in lieu of the death benefit under the contract. However, the |
| | language on page 42 suggests that the right to withdrawal benefit payments |
| | terminates upon the owner's death.5Please reconcile or revise. This comment |
| | also applies to the 4th row of Chart #3 (p. 54, top row, 3rd column). |
| |
| | RESPONSE: Registrant notes the chart outlines what occurs at death if death |
| | occurs after the accumulated value reduces to zero. Once the accumulated |
| | value reduces to zero, we continue to send the owner any remaining |
| | withdrawal benefit payments. The owner no longer has any rights to elect |
| | scheduled or unscheduled payments. The sentence quoted in the Staff’s |
| | comment is referring to the benefit payments taken whereas, the chart outlines |
| | what happens upon death after the Contract value reduces to zero. |
| |
| COMMENT 40. | Termination & Reinstatement of the Rider (p. 57).Please clarify the 5th |
| | bullet point. If the contract has not been in effect for 5 years when one spouse |
| | dies, can the surviving spouse elect to continue the contract without the rider? |
| | If so, please note this exception here or in the Spousal Continuation section |
| | immediately following. |
| |
| RESPONSE: | Registrant has revised the 5thbullet point as follows – “The date your |
| | surviving spouse elects to continue the Contract without this rider (even if |
| | prior to the fifth Contract anniversary following the rider effective date).” |
| | Please see page 67 of the Marked Courtesy Copy. |
| |
| COMMENT 41. | Delay of Payments (p. 65).To clarify when the 7-day period begins, please |
| | add “following the expiration of a permitted delay” to the end of the following |
| | sentence: “[t]he transaction will be completed within seven business days.” |
| |
| RESPONSE: | Registrant has added the phrase as requested. Please see page 76 of the |
| | Marked Courtesy Copy. |
| |
| COMMENT 42. | Contract Termination (p. 66, 73).Please explain how Registrant's right to |
| | terminate the Contract based on low accumulated value applies when a |
| | contractowner has purchased a GMWB rider that provides benefits if the |
| | contract's accumulated value reaches zero. Also, please cross-reference this |
| | disclosure in the 2nd bullet point of the Reservation of Rights section on page |
| | 73 or make corresponding changes there as well. |
| |
| RESPONSE: | Registrant has revised the disclosure as follows – “We reserve the right to |
| | terminate the Contract and make a single payment (without imposing any |
| | charges) to you if your accumulated value at the end of the accumulation |
| | period is less than $2,000, unless you have the GMWB rider.” Please see page |
| | 77 and 85 of the Marked Courtesy Copy. |
| |
| COMMENT 43. | Performance Calculation (pp. 68-69, SAI p. 4).Please confirm that in all |
| | cases where non-standardized performance reflects the impact of the bonus or |
| | credit, that performance also will reflect the impact of the contingent deferred |
| | sales charge. |
| |
| RESPONSE: | Registrant confirms that in all cases where non-standardized performance |
| | reflects the impact of the bonus or credit, that performance also reflects the |
| | impact of the contingent deferred sales charge. |
| |
| COMMENT 44. | Appendix B - GMWB Investment Options (pp. 93-97). |
| |
| | (a) Table Format. Please revise the format of the tables showing the |
| | breakdown of the various Self-Build Models on pages 95 through 97. |
| | Specifically, please add headers to each chart as appropriate and avoid |
| | breaking charts to the extent possible. |
| |
| | RESPONSE: Registrant has added headers to each chart as requested and has |
| | avoided breaking charts to the extent possible. Please see pages 96 and 97 of |
| | the Clean Courtesy Copy. |
| |
| | (b) GMWB Select Models. If correct, please clarify that these models are not |
| | available for contracts purchased after the 11/21/08 availability date. If this is |
| | not correct, identify the contracts for which this disclosure is relevant. |
| |
| | RESPONSE: Registrant notes that Appendix B currently states in boldface |
| | type that “GMWB Select Models are not available after November 21, 2008.” |
| | Please see page 98 of the Clean Courtesy Copy. Please clarify what the Staff |
| | is requesting. |
| |
| COMMENT 45. | Appendix C - GMWB 2-SL/JL Examples (pp. 98-106). |
| |
| | (a) Example 3 (p. 99). The parenthetical in the second bullet point is puzzling. |
| | Why would a bonus credit be applied for the year a contractowner took a |
| | withdrawal? Please revise or explain. |
| |
| | RESPONSE: Registrant has deleted the parenthetical in the second bullet |
| | point. Please see page 115 of the Marked Courtesy Copy. |
| |
| | (b) Additional Example. Please provide at least one example showing how the |
| | Benefit Payment Percentage for both Investment Back and For Life options is |
| | calculated when the first withdrawal occurs before the oldest owner is 59 1/2. |
| |
| | RESPONSE: Registrant clarifies to the Staff that the withdrawal benefit |
| | payment percentage is always 7% for the Investment Back withdrawal option. |
| | The For Life withdrawal benefit payment percentage is based on the age of |
| | the younger covered life at the time of first withdrawal. Therefore, Registrant |
| | respectfully declines to add the additional example. |
| |
| COMMENT 46. | Appendices D & E (pp. 107-149).To the extent the GMWB 2-SL/JL Rider |
| | comments above also apply to the rider disclosure in Appendices D and E, |
| | please revise the corresponding disclosure here as well. |
| |
| | RESPONSE: Registrant has made revisions to the extent applicable in |
| | Appendices D and E. Please see pages 123-165 of the Marked Courtesy Copy. |
| |
| COMMENT 47. | Appendix F - Enhanced Death Benefit Rider (pp. 150-155). Where |
| | appropriate, please revise the charge description per staff comments on |
| | parallel charge disclosure in the body of the prospectus. |
| |
| | RESPONSE: Registrant has revised the charge description as requested. |
| | Please see page 166 of the Marked Courtesy Copy. |
| |
| COMMENT 48. | Part C: Item 24(b)(8).The footnote for multiple participation agreements |
| | says “To be filed by amendment.” We note this footnote is associated with |
| | participation agreements dating back to 2002 as well as several participation |
| | agreements with 2009 dates. Please explain to the Staff why these agreements |
| | have not been included in any of the amendments filed in the past six months. |
| |
| | RESPONSE: Registrant included 19 participation agreements as exhibits to |
| | its filing and will include roughly an additional 12 participation agreements |
| | with its post-effective amendment filing pursuant to Rule 485(b) on April 30, |
| | 2010. |
