November 15,
2019
Brian Stallworth, Esquire
Transamerica Life Insurance Company
Office of the General Counsel
4333 Edgewood Road, NE
Cedar Rapids, IA 52499
RE: Transamerica Life Insurance Company
Separate Account VA B
Initial Registration Statements on Form N-4
(File Nos 333-233812 and 811-06032)
(File Nos 333-233836 and 811-06032)
(File Nos 333-233837 and 811-06032)
(File Nos 333-233838 and 811-06032)
(File Nos 333-233839 and 811-06032)
Transamerica Financial Life Insurance Company
Separate Account VA BNY
Initial Registration Statements on Form N-4
(File Nos 333-233817 and 811-08750)
(File Nos 333-233840 and 811-08750)
(File Nos 333-233841 and 811-08750)
(File Nos 333-233842 and 811-08750)
(File Nos 333-233843 and 811-08750)
Dear Mr. Stallworth:
The staff has reviewed the above-referenced initial registration
statements for
Transamerica Life Insurance Company and Transamerica Financial Life Insurance
Company
(together "Transamerica"), which the Commission received on September 18, 2019
and
September 19, 2019. Unless indicated otherwise, comments and page numbers refer
to the
registration statement of the Transamerica B-Share Variable Annuity filed on
EDGAR (File No.
333-233836). Based on our review, we have the comments noted below. Unless
otherwise
indicated, our comments apply to the other registration statements to the
extent applicable.
General
1. Please confirm that the EDGAR series/class identifiers will be revised
appropriately prior
to effectiveness of the registration statements to reflect the policy name
disclosed on the
cover page of the prospectus.
Brian Stallworth, Esquire
November 15, 2019
2. Please clarify supplementally whether there are any types of guarantees
or support
agreements with third parties to support any of Transamerica's guarantees
under the policy
or whether Transamerica will be solely responsible for payment of policy
benefits.
3. Please update all blanks and bracketed language as appropriate.
Rate Sheet Prospectus Supplements
4. As this is an initial registration statement and an initial Rate Sheet
Prospectus Supplement
("Rate Sheet"), please delete the sentence that states: "This Rate Sheet
Prospectus
Supplement replaces and supersedes any previously issued Rate Sheet
Prospectus
Supplement(s), and must be used in conjunction with the above effective
variable annuity
prospectuses, as amended."
5. To avoid investor confusion, please also delete the sentences that state:
"The Rate Sheet
Prospectus Supplement applicable to your policy will be included with
your prospectus.
Please work with your financial professional or visit
www.transamerica.com to confirm the
current rates." Instead, please include disclosure on the cover page of
the prospectus
similar to the following: "WHEN DELIVERED IN CONNECTION WITH THE SALE
OF A NEW _____ POLICY, THIS PROSPECTUS MUST BE ACCOMPANIED BY THE
APPLICABLE RATE SHEET SUPPLEMENTS THAT SPECIFIES THE CURRENT
[specify terms]."
6. With respect to each Rate Sheet, please be consistent in the ordering of
the listed items
included in the Rate Sheet in the narrative and the following disclosure
(e.g., the narrative
lists "premium and rebalance allocation requirements" first, but the
first item described is
the "Rider Fee"). In addition, the terms used in the narrative should be
the same as the
headings.
Prospectus
7. Table of Contents. With respect to the fourteen appendixes, please
consider using a
labeling system such as "Appendix A," "Appendix B" etc. and re-numbering
the appendix
pages "A-1," "A-2," and "B-1," "B-2," etc. to help readers locate them in
the prospectus.
8. Glossary of Terms.
a. Please capitalize defined terms throughout the prospectus.
b. Please delete the term "market day," as it has been replaced by the
term "business day."
c. Transamerica I-Share II Variable Annuity.
i. Please revise the definition of "cash value" by removing the
reference to any
applicable surrender charge.
2
Brian Stallworth, Esquire
November 15, 2019
ii. The term "free amount" does not appear in the prospectus other
than in the
examples. If a "free amount" is available under this contract,
please revise the
disclosure throughout as applicable to reference and describe
this benefit.
iii. Please exclude all definitions that do not relate to a rider or
benefit offered by this
policy (e.g., nursing care).
9. Introduction - Choose Between Qualified and Non-Qualified (p. 3). Please
provide a plain
English definition of "qualified" and "non-qualified" in a footnote to
the table.
10. Introduction Choose Optional Guaranteed Benefits (If Desired) (p. 3).
a. Please include a brief parenthetical description of each benefit
identified in the table.
b. In the Transamerica Principium IV Variable Annuity, please explain to
the staff the
reference to "C-Share Rider" or delete.
11. Fee Table and Expense Examples (pp. 2-3).
a. With respect to the Transfer Fee, Special Service Fee and Annual
Service Charge, the
maximum charge (e.g., $10 or $50 respectively) should be reflected in
the fee table.
b. Please include, in parenthesis, the basis on which each "Optional
Separate Account
Expense" charge is calculated.
c. With respect to the "Optional Death Benefit Riders" heading, please
include a
parenthetical clarifying that only one of the Optional Death Benefit
Riders may be
elected.
d. Please include, in parenthesis, the basis on which the "Additional
Benefits available
with Retirement Income Choice 1.7 Rider" charges are calculated.
e. In footnote (*), please revise the second sentence as follows: "Your
rider fee
percentage will not exceed the maximum fee percentage in effect when
you purchased
the rider shown in this table.
12. Notes to Fee Table and Expense Examples (pp 4-5).
a. Please show the Notes that apply to the fee table separately from the
Notes applicable
to the expense examples.
b. Special Service Fee. The Note states that the Company may deduct a
charge for special
services. Please clarify whether the Company currently charges special
service fees.
Also, please clarify whether the fee varies based on the type of
service. Please also
identify the "customer initiated changes" that the Company considers
to be "special
services."
3
Brian Stallworth, Esquire
November 15, 2019
c. Annual Service Charge. The Note states that the annual service charge
is assessed on
"each policy anniversary" and "at the time of surrender." However, the
following table
includes captions for a "Maximum Annual Service Charge" and a "Service
Charge at
time of issue." Please resolve the apparent inconsistency.
d. Separate Account Annual Expenses. In the Transamerica Principium IV
Variable
Annuity, please explain to the staff the reason for omitting the
footnote describing the
Fund Facilitation Fee.
13. Condensed Financial Information. Please confirm supplementally that
condensed financial
information has not been provided for any subaccount offered under the
contracts being
registered because no such subaccount has commenced operations as of the
date of the
prospectus. Alternatively, if any subaccount has been previously made
available under any
other contract offered through the same separate account (e.g., the other
contract has the
same underlying fund option and the same total separate account expense),
then please
include the accumulation unit values and the number of accumulation units
outstanding for
each such subaccount from the date of its inception (or for ten years, if
less) in the
registration statement. See Instruction 1 to Item 4(a) of Form N-4..
Please revise
Appendix Condensed Financial Information (p. 100) as appropriate.
14. Static Allocation (p. 9). Please briefly describe each Static Allocation
strategy and specify
where more information about the strategies can be obtained (e.g., 10% to
Fund X, 20% to
Fund Y, etc.). In addition, if a Static Allocation is closed (rather than
terminated), please
disclose, if true, that amounts allocated to a closed subaccount will
remain in such
subaccount until reallocated by the owner.
15. Addition, Deletion, or Substitution of Investment Options (p.9). With
respect to the
Transamerica Advisory Annuity, the sixth sentence of the second paragraph
states: "If we
do not receive additional instructions, any subsequent premium payments,
or transfers into
a closed subaccount will be re-allocated to the remaining available
investment options
according to the investment allocation instructions you previously
provided." Please
clarify whether this includes Dollar Cost Averaging transactions or asset
rebalance
programs transactions.
16. The Fixed Account (p. 10). In the last sentence of the first paragraph of
this section, please
revise to state that "[d]isclosures relating to interests in the general
account "are," rather
than "may be" subject to certain generally applicable provisions of the
federal securities
laws...."
17. Transfers (p.11). Please highlight the parenthetical note regarding
limits on fixed account
transfers in bold. Please also highlight the first sentence of the
"Additional Restrictions"
subsection in bold.
18. Transfers - Transamerica I-Share II Variable Annuity (p. 11). The
disclosure states:
"In general, each transfer from a subaccount must be at least $500, or
the entire subaccount
value." Please explain to the staff why the language "or the entire
subaccount value" is
included or delete the language.
4
Brian Stallworth, Esquire
November 15, 2019
19. Surrender Charges (p. 14). The prospectus refers to a partial surrender
of cash value as a
"withdrawal" and all of the cash value as a "surrender." Please be
consistent in the use of
this terminology throughout the prospectus.
20. Fund Facilitation Fee (p.16). In the Transamerica Principium IV Variable
Annuity, please
explain to the staff why the Fund Facilitation Fee disclosure has been
omitted.
21. Access to Your Money (pp. 18-20).
a. Surrender and Withdrawals - Transamerica I-Share II Variable Annuity.
Please include
description of the "Maximum Advisory Fee Amount" and "Advisory Fee
Withdrawal
Maximum Percentage" referenced in "Appendix Advisory Fee Withdrawal
Examples."
b. Excess Interest Adjustment. The disclosure states: "The excess
interest adjustment
may vary for certain policies and may not be applicable for all
policies." Please
explain why this statement is applicable to policies issued under a
new registration
statement or delete.
22. Annuity Payments (The Income Phase) (p. 20).
a. All material state variations with respect to the annuity commencement
date should be
disclosed in the prospectus.
b. In the case of the life income with no period certain options, please
specify what
happens if the annuitant or both joint annuitants (in the case of a
joint and survivor
annuity) die before the due date of the first annuity payment.
c. The disclosure notes, "all benefits (including guaranteed minimum
death benefits and
living benefits) terminate upon annuitization." Please explain
supplementally how the
various guaranteed minimum living benefits offered in this
registration statement are
guaranteed "lifetime" benefits if they terminate upon annuitization
(i.e., the policy does
not provide for the greater of the rider withdrawal amount or the
annuity payment on
the Annuity Date). We note that on page 53, and elsewhere, the
disclosure states that if
an owner has reached the maximum annuity commencement date, he/she may
choose
an annuitization option that guarantees lifetime payments in an amount
equal to the
rider withdrawal amount. Why is this option not available for an
annuitization made
before the maximum annuity commencement date?
d. The disclosure notes that variable annuity payments can vary depending
on the
assumed investment rate. Please provide an example to demonstrate the
magnitude of
the change that can occur if the return is less than and more than the
assumed
investment rate.
23. Annual Step-Up Death Benefit Designated Investment Options (p. 24). The
disclosure
notes that all policy value must be allocated to one or more designated
investment options.
5
Brian Stallworth, Esquire
November 15, 2019
In light of the potentially adverse consequences of an improper
allocation, the Company
should either provide notice and opportunity to cure if an owner makes an
improper
election, or have systems in place that prevent an unauthorized
allocation or transfer as
suggested in the disclosure relating to the Retirement Income Max 1.2 -
Termination (p.
62).
24. Return of Premium Death Benefit (p. 25). The disclosure states: "The
Guaranteed
Minimum Death Benefit may vary for certain policies and may not be
available for all
policies, in all states, at all times or through all financial
intermediaries. We may
discontinue offering a guaranteed minimum death benefit at any time for
new sales." This
or similar language noting that the rider benefits "may vary for certain
polices" appears
throughout. Please explain supplementally how this language is applicable
to the new
policies offered in this registration statement. Further, please clarify
what is meant by new
sales (e.g., new policy purchases or elections by existing policy owners
after issue). Please
clarify this type of disclosure throughout.
25. Adjusted Withdrawal (p. 25). According to the disclosure, the formula
used to calculate
the adjusted withdrawal amount is "adjusted withdrawal = (amount of the
gross withdrawal
* value of the current death proceeds immediately prior to the gross
withdrawal) / policy
value immediately prior to the gross withdrawal." Please reconcile with
the formula
referenced in "Appendix Death Benefit."
26. Unemployment Waiver (p. 37). Please clarify how long the Unemployment
Waiver can
remain in effect.
27. Guaranteed Lifetime Withdrawal Benefits (p. 39). In the introduction,
please add
highlighted disclosure stating that (i) there are investment restrictions
associated with these
benefits that can limit participation in market gains, (ii) withdrawals
taken in excess of the
prescribed limits (rider withdrawal amount) will reduce the amount of the
benefit and may
eliminate the benefit altogether, if the amount of the excess withdrawal
exceeds the policy
value at the time of the withdrawal, (iii) the fee for the rider will not
be reduced for any
investment losses to policy value and, in fact, may be increased if there
are withdrawals
taken in excess of rider withdrawal amount, and (iv) withdrawals taken
while contract
value is greater than zero are withdrawals of the Owner's own money (not
the Company's).
Please also ensure that the introduction to each of the withdrawal
benefits sections
highlight these points as well.
28. Guaranteed Lifetime Withdrawal Benefit Comparison Table (p. 40). The
benefit summary
for each rider notes that the withdrawal benefit provides for a series of
payments from the
Company "if necessary." Please revise to summarize briefly in the table
when those
payments would be triggered, instead of simply saying "if necessary."
Please also add a
new row that summarizes how both excess withdrawals and withdrawals
within the rider
withdrawal amount reduce the amount of the withdrawal benefit.
6
Brian Stallworth, Esquire
November 15, 2019
29. Transamerica Principal Optimizer Summary (pp. 42-43).
a. In the eighth "Please Note" bullet point (and elsewhere), please
describe the
circumstances under which deductions for excess withdrawals will
be on more
than a dollar for dollar basis.
b. With respect to the Transamerica Axiom III Variable Annuity,
please confirm that
withdrawals up to the rider withdrawal amount are not subject to
an excess
interest adjustment. We note the Access Rider disclosure states
an excess interest
adjustment applies to withdrawals up the rider withdrawal
amount. This comment
is also applicable to the Retirement Income Max 1.2 Rider,
Retirement Income
Choice 1.7 Rider, and Retirement Income Edge 1.2 Rider.
30. Transamerica Principal Optimizer - Guaranteed Minimum Accumulation
Benefit (pp 44-
45).
a. Guaranteed Future Value. According to the disclosure, after the
guaranteed future
value date, the guaranteed future value equals zero unless an optional
reset is chosen.
Please explain that this means that the rider will terminate and there
will be no more
guaranteed future value adjustment, unless an optional reset is
chosen.
b. Optional Reset. Please clarify in plain English how the optional reset
works.
31. Transamerica Principal Optimizer - Rider Withdrawal Amount (p. 46).
a. Please specify what "additional information" will be included in the
applicable Rate
Sheet Supplement.
b. For qualified policies, if true, please consider adding a bullet
stating: "If any of the
above are not true, then the minimum required distribution is equal to
zero and it is not
available as a rider withdrawal amount."
c. Transamerica I-Share II Variable Annuity. Because the policy does not
impose a
surrender charge, please delete throughout the prospectus the
sentence, which states
"Surrender charges may apply if your rider withdrawal amount exceeds
your surrender
charge free amount." (e.g., disclosure applicable to the Retirement
Income Max 1.2
Rider, Retirement Income Choice 1.7 Rider, and Retirement Income Edge
1.2 Rider).
32. Transamerica Principal Optimizer Rate Sheet Prospectus Supplement (p.
47). Please
disclose that all superseded Rate Sheet Supplements applicable to
contracts issued under
this registration statement may be found in an appendix to the
prospectus. This comment is
also applicable to the "Rate Sheet Prospectus Supplement" sections for
Retirement Income
Max 1.2 Rider, Retirement Income Choice 1.7 Rider, and Retirement Income
Edge 1.2
Rider.
7
Brian Stallworth, Esquire
November 15, 2019
33. Retirement Income Max 1.2 Summary (pp. 55). In the fifth bullet point,
after the first
sentence, please consider adding: "The investment options are categorized
within
designated investment groups, each of which may have a different fees and
charges."
34. Retirement Income Max 1.2 - Withdrawal Base Component Adjustments (p.
59). If
applicable, at the end of the first paragraph, please insert "The effect
of an excess
withdrawal is magnified if the policy value is less than the withdrawal
base component."
35. Retirement Income Max 1.2 - Termination (p. 62). According to the eighth
bullet point, the
rider can terminate upon "the date any of your policy value is not
invested in one of the
Designated Investment options." Please explain how this is possible in
light of earlier
disclosure stating that a policy owner cannot make impermissible
allocations before
terminating the rider.
36. Retirement Income Choice 1.7 Summary (p. 63). The disclosure notes,
"any withdrawal
will reduce your rider death benefit (if applicable)." This disclosure
should also be noted
in the Transamerica Principal Optimizer Rider, Retirement Income Max 1.2
Rider, and
Retirement Income Edge 1.2 Rider.
37. Retirement Income Choice 1.7 Rider Withdrawal Amount (p. 65). If
applicable, please
add a bullet stating: "We will not refund charges that have been paid up
to the point of
terminating the policy or receiving annuity payments."
38. Retirement Income Choice 1.7 - Additional Options (p. 68). The disclosure
states: "The
rider fee will be disclosed in a Rate Sheet Prospectus Supplement which
may be amended
from time to time by us." Please delete the phrase "which may be amended
from time to
time by us" as the Company may not change the rider fee (other than
pursuant to an
automatic step-up or an optional reset) after the contract has been
issued.
39. Retirement Income Choice 1.7 - Termination (p. 72).
a. According to the disclosure, the rider will terminate upon the date
the Company
receives written notice requesting termination or "manual reset of the
rider." This is the
only reference to a "manual reset" in the prospectus. Please clarify
whether a "manual
reset" is possible under the rider.
b. Please clarify whether the policy will terminate if policy value is
not allocated 100% to
one or more of the designated investment options.
40. Transamerica Income Edge 1.2 - Rider Withdrawal Amount (p. 76). If true,
please
consider adding the following bullet points:
Any amount withdrawn in a rider year (including any surrender charge
or excess
interest adjustment) in excess of the rider withdrawal amount is an
excess withdrawal.
We will not refund charges that have been paid up to the point of
terminating the policy
or receiving annuity payments.
8
Brian Stallworth, Esquire
November 15, 2019
41. Transamerica Income Edge 1.2 Termination (p. 82). Please add a bullet
point, if true,
stating the rider will terminate upon "the date an excess withdrawal
reduces your policy
value to zero."
42. State Variations (p. 82).
a. In terms of organization, please separately identify each state
variation by topic (e.g.,
right to cancel, rider availability, etc.)
b. According to the disclosure, state variations are subject to change
without notice and
additional variations may be imposed as specific states approve new
riders. Please
clarify that the Company will amend the registration statement in the
event of any such
changes.
43. State Variations - California (p. 82). California owners of the
Transamerica Income Edge
1.2 rider and Transamerica Principal Optimizer rider, age 60 or above
have the option to
allocate the initial premium payment to the stable account as permitted
in the applicable
Rate Sheet Prospectus Supplement and the remaining premium to the money
market
portfolio. Please explain to the staff the legal basis for allocating the
initial premium
payment to the stable account during the free look period. Also, please
explain to the staff
why this is applicable to only owners of the Transamerica Income Edge 1.2
rider and
Transamerica Principal Optimizer rider.
44. State Variations New York: Transamerica I-Share II Variable Annuity (p.
83). Please
remove reference to the "Unemployment Waiver," as this feature is not
available under the
policy.
45. Voting Rights (p. 85). If relying on a mixed and shared order, please
disclose that shares
owned by the insurance company and its affiliates will also be
proportionately voted.
46. Information About Us (p. 87). The disclosure states: "All obligations
arising under the
policies, including the promise to make annuity payments, are general
corporate obligations
of ours." Please add "and subject to our claims paying ability."
47. Distribution of the Policies (p. 89). With respect to the Transamerica
Advisory Annuity,
the Company may pay promotional incentives or payments in the form of
cash or non-cash
compensation or reimbursement to some, but not all, financial
intermediaries and their
representatives. According to the disclosure, "these arrangements are
described further
below." However, there is nothing in the disclosure addressing this
subject. Please revise
the disclosure as needed.
48. Appendix Designated Investment Options (pp. 95-97). The table
identifies the
Designated Investment Options available for use with the Return of
Premium Death
Benefit, Annual Step-Up Death Benefit, Retirement Income Max 1.2 Rider
and Retirement
Income Choice 1.7 Rider. Retirement Income Choice 1.7 Rider indicates
Designated
9
Brian Stallworth, Esquire
November 15, 2019
Investment Options by Group A, B or C rather than by subaccount. However,
it appears
only Group A is available as a Designated Investment Option. Please
explain to the staff
why this is the case. Also, please describe the differences between
Groups A, B and C in
the prospectus.
49. Appendix Guaranteed Lifetime Withdrawal Benefit Transamerica Principal
Optimizer
and Transamerica Income Edge Riders Rebalancing Examples (p. 108). The
tables
included in this appendix are a little confusing visually. Consider
including bolded
headings for the Select Investment Options and Flexible Investment
Options. As currently
formatted, it appears the non-bolded indented sub-headings relate to the
Stable Account
and Select Investment Options rather than the Select Investment Options
and Flexible
Investment Options.
Part C
50. Please replace "forms of" exhibits with actual copies of the agreements
when they are
available.
Financial Statements
51. Any financial statements, exhibits, and any other required disclosure not
included in this
registration statement must be filed by pre-effective amendment to the
registration
statement.
* * * * * * * *
*
We note that portions of the filings are incomplete. We may have
additional comments
on such portions when you complete them in a pre-effective amendment, on
disclosures made in
response to this letter, on information supplied in your response letter, or on
exhibits added in
any pre-effective amendments.
Whenever a comment is made in one location, it is considered applicable
to all similar
disclosure appearing elsewhere in the registration statements.
Response to this letter should be in the form of a pre-effective
amendment filed pursuant
to Rule 472 under the Securities Act. The pre-effective amendment filing should
be
accompanied by a supplemental letter that includes your responses to each of
these comments.
Where no change will be made in the filings in response to a comment, please
indicate this fact
in your supplemental letter and briefly state the basis for your position.
In closing, we remind you that the Companies and their management are
responsible for
the accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
10
Brian Stallworth, Esquire
November 15, 2019
We will consider a written request for acceleration of the effective date
of the registration
statements as confirmation of the fact that those requesting acceleration are
aware of their
respective responsibilities.
Should you have any questions regarding this letter, please contact me
at (202) 551-6765
or cowanm@sec.gov.
Sincerely,
/s/ Mark Cowan
Mark Cowan
Senior Counsel
Cc: Sally Samuel
Harry Eisenstein
11