February 12, 2021
VIA E-MAIL
Julie Collett, Esq.
Senior Director and Counsel
Equitable Financial Life Insurance Company
1290 Avenue of the Americas
New York, NY 10104
Re: Equitable Financial Life Insurance Company
Initial Registration Statement on Form S-3
File No. 333-251414
Equitable Financial Life Insurance Company of America
Initial Registration Statement on Form S-1
File No. 333-251416
Dear Ms. Collett:
On December 17, 2020, you filed the above-referenced initial
registration statements on
Form S-3 and Form S-1 on behalf of Equitable Financial Life Insurance Company
and Equitable
Financial Life Insurance Company of America (the Companies ). Where a
comment is made
with regard to the disclosure in one location, it is applicable to all similar
disclosure appearing
elsewhere in the registration statements. 1 Also, unless otherwise specified,
comments apply to
disclosure in both registration statements.
General
1. Please confirm that all missing information, including all exhibits,
will be filed in a pre-
effective amendment to each registration statement. We may have
further comments
when you supply the omitted information.
2. Please provide powers of attorney that relate specifically to each
registration statement as
required by Rule 483(b) of the Securities Act of 1933.
1Capitalized terms have the same meaning as in the registration statements
unless otherwise indicated. Page
numbering refers to the Form S-3 registration statement unless otherwise
indicated.
Julie Collett, Esq.
February 12, 2021
Page 2 of 9
3. The prospectus supplement describing how the Market Stabilizer Option (
MSO )
interrelates with the other provisions of the variable life insurance
policy is potentially
confusing for investors, and requires a side-by-side comparison of its
reading with the
corresponding Form N-6 prospectus. In accordance with plain English
principles, please
eliminate the supplement and confirm that all relevant MSO disclosures
therein will be
described in the Form N-6 prospectus.
Cover Page
4. The prospectus describes a new policy. Accordingly, please remove the
statement that
the prospectus supersedes all prior prospectuses.
5. Please indicate on the cover page the name of each variable life
insurance policy to which
the prospectus relates. If there is only one such policy, then please
revise the references
throughout the prospectus to policies, appropriate variable life
insurance policy
prospectus, certain variable life insurance policies, if your
policy allows, etc. If
there are multiple policies, then please clarify throughout the
prospectus the material
variations in the terms of the MSO for each such policy rather than using
vague language
such as for certain variable life insurance policies.
6. To more clearly explain up front that the MSO is an investment option
under the policy
that provides an opportunity to earn interest credited by the Company
based in part on the
performance of the S&P 500 Price Return Index over a one-year period,
please move the
What is the Market Stabilizer Option discussion to precede the
discussion of the terms
associated with the Market Stabilizer Option.
7. Please clarify in the third bullet and throughout the prospectus that the
owner bears the
risk of potential loss of principal and previously credited interest with
respect to
investments in the MSO.
8. In the fourth bullet, please briefly specify each type of distribution
that triggers an Early
Distribution Adjustment and loss of Index performance (e.g., surrenders,
loans, etc.).
9. Please state that index-linked investment options such as the MSO are
complex insurance
and investment options, and investors should speak with a financial
professional about
the MSO s features, benefits, risks, and fees, and whether the MSO is
appropriate for the
investor based upon his or her financial situation and objectives.
10. Please state that the Company s obligations under the MSO are subject
to its
creditworthiness and claims paying ability.
11. When stating in the penultimate paragraph that transfers are not
permitted into or out of a
Segment prior to the Segment Maturity Date, please also state that
partial withdrawals are
similarly not permitted.
Julie Collett, Esq.
February 12, 2021
Page 3 of 9
Contents of this Prospectus
12. Please provide a reasonably detailed table of contents (e.g., list the
subsections of
Description of the Market Stabilizer Option ). Item 502(b) of
Regulation S-K.
Definitions (pages 5-6)
13. Please provide a definition for Early Distribution to specify each
deduction from
Segment Account Value during a Segment Term that triggers an Early
Distribution
Adjustment and loss of Index performance (e.g., surrenders, loans,
etc.). Please revise
the prospectus where appropriate to include this defined term. Please
also disclose if
payment of the death benefit is considered to be an early distribution,
and if not, please
explain, where appropriate in the prospectus, how the index-linked
return is calculated if
death occurs prior to the Segment Maturity Date. Please also explain
that transfers and
partial withdrawals are not permitted during a Segment Term, and
therefore are not
considered to be early distributions.
14. The first two sentences of the Segment Maturity GIO Limitation
definition are
redundant; please revise.
Fee Table Summary (page 7)
15. Please provide the guaranteed maximum charges in the table more
prominently than the
current non-guaranteed charges (i.e., switch the two columns so that the
guaranteed
maximum charges are disclosed first).
16. The Variable Index Benefit Charge, both current and guaranteed, is
0.00%.
Accordingly, there is no such charge imposed on policy owners, and all
references to
the Variable Index Benefit Charge should be removed from the prospectus.
If the
Companies choose to assess such a charge for future sales, they may do
so in a future
amendment to each registration statement.
17. Please include in the fee table the mortality and expense risk charge,
which is assessed on
MSO Segment Account Value and amounts in the MSO Holding Account. Please
move
the disclosure in the last paragraph to a footnote that corresponds to
the mortality and
expense risk charge line item. Please also state in the footnote that
amounts in the MSO
Holding Account reflect fees and expenses of the EQ/Money Market
Portfolio.
18. Separate from the fee table, please include a summary of the material
features of the
MSO, including a brief description of (a) the Index, the Segment Term,
the Downside
Protection and Growth Cap Rate (including when each are reset and how
the minimum
Growth Cap Rate works), and the Early Distribution Adjustment; (b) how
policy owners
may make withdrawals and transfers to other investment options; and (c)
the Company s
right to change or discontinue an index, and how index performance will
be calculated if
this occurs. Please also include a prominent statement that in the event
of an early
distribution, the Early Distribution Adjustment will result in a loss of
principal and
Julie Collett, Esq.
February 12, 2021
Page 4 of 9
previously credited interest even if the Index has experienced positive
performance since
the Segment Start Date, and that this loss may be substantial. Item 3 of
Forms S-1 and S-
3; Item 503(a) of Regulation S-K.
Risk Factors (pages 8-10)
19. Please provide a risk factor stating that because the Company relies on a
single point in
time to calculate the Index return, an investor may experience a negative
return even if the
Index has experienced gains through some, or most, of the Segment Term.
Please also
include this disclosure in the summary (see staff comment 18 above).
20. In the first risk factor, please state that an investor could lose 90%
of principal which
includes any previously credited interest.
21. After listing in the fourth risk factor the negative consequences that
apply to early
removals from a Segment, please state that surrender charges and tax
consequences could
also apply.
22. When stating in the fourteenth risk factor that the Company reserves the
right to
implement a Segment Maturity GIO Limitation, please clarify that this
means a limitation
on the amount that may be allocated to the guaranteed interest option.
23. In the third risk factor on page 9, which states that if a minimum
Growth Cap Rate is not
specified, account value could be transferred to a Segment with a lower
Growth Cap
Rate than desired, please also state that if a minimum has been
specified, account value
could remain uninvested in the MSO Holding Account until the next
Segment, if any,
where the Growth Cap Rate is at or above the minimum specified by the
investor.
24. The risk factors discussion includes bullet points that explain
procedural restrictions on
certain policy riders if the MSO is elected (e.g., under the Living
Benefits Rider, cash
surrender value on lien will be transferred to the Unloaned GIO if the
owner allocates to
the MSO; the Enhanced Death Benefit Guarantee must be terminated prior
to allocating
to the MSO), but do not describe principal risks associated with the
MSO. Please move
this disclosure to a separate section of the prospectus that describes
how policy riders are
impacted if amounts are invested in the MSO.
Please also confirm supplementally that all disclosures describing the
impact of the MSO
on policy riders are also included in the variable life insurance
prospectus(es) filed on
Form N-6.
25. The risk factors include references to the Extended No Lapse Guarantee
Rider and the
Paid-Up Death Benefit Guarantee, despite the disclosure in the
prospectus supplement
stating that these two riders are not offered under the policy. If true,
please remove all
disclosures in the prospectus describing these riders.
Julie Collett, Esq.
February 12, 2021
Page 5 of 9
26. In place of the numerous risk factors that discuss, with varying
specificity, the impact of
an MSO election on the Policy Continuation Rider, Long-Term Care
Services Rider, and
Paid Up Death Benefit Guarantee, please provide one risk factor that
states that upon
exercise of any of these riders, the MSO will no longer be available,
and that any
Segments with Segment Account Value will be terminated, the Segment
Account Value
will be subject to an Early Distribution Adjustment, and the owner will
forfeit any
positive Index performance that could otherwise have been earned. Please
also clarify
where the Segment Account Value will be reallocated under the policy.
27. Please confirm supplementally that the penultimate risk factor in the
Form S-3
prospectus, referencing an enhanced death benefit guarantee, and the
last risk factor in
the Form S-3 prospectus, referencing riders that may result in face
amount increases, are
not included in the Form S-1 prospectus because such riders are not
offered with the
variable life insurance policy(ies) to which the Form S-1 prospectus
relates. Further,
where appropriate in the Form S-3 prospectus (and, if applicable, the
Form S-1
prospectus), please describe the face amount increases provision
of the MSO rider
referenced in the last bullet.
Description of the Market Stabilizer Option MSO Holding Account (page 11)
28. Please revise the third sentence in the first paragraph to state that
the MSO Holding
Account has the same rate of return and is subject to the same
underlying portfolio
operating expenses and same mortality and expense risk charges as the
EQ/Money
Market variable investment option.
29. In the second paragraph, please clarify in the third sentence that the
3rd Friday of June is
the Segment Start Date.
Description of the Market Stabilizer Option Segments (pages 11-12)
30. There are five conditions that must be met in order for amounts to be
transferred from the
MSO Holding Account into a new Segment, the last one being a possible
limit on the
total amount that may be allocated to the Segments. Please specify this
limit here and in
the Right to Discontinue and Limit Amounts Allocated to the MSO
section of the
prospectus.
Description of the Market Stabilizer Option Segment Maturity (page 12)
31. When describing the three options from which to choose when a Segment is
maturing,
please clarify the reference to the Segment Maturity GIO in the
third option.
Description of the Market Stabilizer Option Growth Cap Rate (page 12)
32. Please move the fourth paragraph, and copy the relevant portions of the
fifth paragraph,
to a separate section titled Downside Protection, and more clearly
disclose that the
Downside Protection will never decrease below -10%.
Julie Collett, Esq.
February 12, 2021
Page 6 of 9
The fourth paragraph states that policy owners will be notified in
advance of any increase
in Downside Protection, and may decline to participate in any Segment
that reflects such
an increase. While an increase in Downside Protection could result in a
lower Growth
Cap Rate, policy owners will not be informed in advance as to what this
rate will be.
Moreover, policy owners will have already specified the minimum Growth
Cap Rate that
they find acceptable. Accordingly, please explain supplementally why
policy owners will
be given a choice to decline an increase in Downside Protection, which
would only serve
to benefit them.
33. In the sixth paragraph, please disclose whether policy owners may change
the minimum
acceptable Growth Cap Rate after it has been established, and if so, how
they may do so.
Please also clarify whether the formula used to determine the minimum
Growth Cap Rate
that must be met to transfer into a Segment assumes the current or the
guaranteed
Variable Index Segment Account charge. Similarly, please revise the
hypothetical
example in the penultimate paragraph to reflect either the current
(0.40%) or guaranteed
(1.65%) Variable Index Segment Account charge rate.
Description of the Market Stabilizer Option Index-Linked Return (page 13)
34. Please state that the example assumes Downside Protection of -10%, and
that no early
distributions have occurred during the Segment Term.
35. The example assumes a Growth Cap Rate of 15%. Please confirm
supplementally that
the Growth Cap Rate and other assumptions reflected here, and in all
examples
throughout the prospectus (including Appendix: Early Distribution
Adjustment
Examples), are reasonable in light of current and anticipated market
conditions.
36. Please revise the first three paragraphs following the example to
correspond to the
example. For example, the second sentence in the first paragraph would
describe an
increase in the Index of 25% or 50%, rather than 20%, and the third
sentence would
describe an increase of 10% rather than 13%.
37. Please delete the sixth through eleventh paragraphs in this section
(i.e., everything after
the third paragraph following the example, other than the last paragraph
of the section),
as this information is redundant with earlier prospectus disclosure, not
relevant to the
calculation of the index-linked return, and obscures the index-linked
return disclosure.
Description of the Market Stabilizer Option Charges (page 14)
38. Please disclose that amounts in the MSO Holding Account reflect fees and
expenses of
the EQ/Money Market Portfolio, which are described in the prospectuses
for the variable
life insurance policy and the EQ/Money Market Portfolio.
Julie Collett, Esq.
February 12, 2021
Page 7 of 9
Description of the Market Stabilizer Option - How We Deduct Policy Monthly
Charges
During a Segment Term (page 15)
39. (Form S-3 Prospectus Only) In the second sentence of the first
paragraph, please define
the reference to the GIA. Please also confirm supplementally that
the disclosure
regarding the Corporate Owned IncentiveLife and COIL Institutional
Series policies is
not applicable to the Form S-1 prospectus.
Description of the Market Stabilizer Option Early Distribution Adjustment
(pages 15-17)
40. Please make more prominent the first sentence of the third paragraph.
41. Under Important Considerations, please state that surrender charges and
tax
consequences also could apply to early distributions.
Description of the Market Stabilizer Option Transfers (page 17)
42. Please state that the Company does not impose the policy s $25
transfer charge on
transfers into or out of the MSO.
43. Please disclose that in order to transfer account value to the MSO,
there must be
sufficient funds remaining in the guaranteed interest option following
the transfer to
cover the Charge Reserve Amount.
Cash Surrender Value, Net Cash Surrender Value, and Loan Value (page 18)
44. Please remove the cross-reference to the base variable life insurance
policy prospectus for
an explanation of cash surrender value and net cash surrender value, and
define such
terms in the MSO prospectus.
Description of the Market Stabilizer Option Loans (page 18)
45. The maximum loan spread (i.e., the difference between the interest
charged on policy
loans from the MSO Segments and the interest credited on amounts held as
collateral) is
5%. Please disclose the maximum interest rates charged and credited in
connection with a
Segment loan and how such rates are determined.
Description of the Market Stabilizer Option - Segment Maturity GIO Limitation
(page 19)
46. The prospectus describes a new policy. Accordingly, please remove the
reference to
November 18, 2013 with respect to when the Companies determined not to
exercise the
Segment Maturity GIO Limitation. Moreover, if the Companies are not
going to be
exercising the Segment Maturity GIO Limitation at any time, then please
remove all
references to this limitation in the prospectus.
Julie Collett, Esq.
February 12, 2021
Page 8 of 9
Description of the Market Stabilizer Option - Right to Discontinue and Limit
Amounts
Allocated to the MSO (page 19)
47. (Form S-3 Prospectus Only) Please clarify in the disclosure whether the
last paragraph of
this section applies to all policies or only to the Corporate Owned
IncentiveLife and
COIL Institutional Series policies. Please also confirm supplementally
that the last two
paragraphs of this section are not applicable to the Form S-1
prospectus. Finally, please
clarify what is meant by fund transfer in the last paragraph.
Distribution of the Policies (page 21)
48. Please identify the principal underwriter(s). Item 8 of Forms S-1 and
S-3; Item 508(a) of
Regulation S-K.
Incorporation of Certain Documents by Reference (p. 22)
49. (Form S-3 Prospectus Only) Please be sure to incorporate by reference
into the
prospectus all reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange
Act of 1934 since the end of the fiscal year covered by the annual
report on Form 10-K.
Item 12(a)(2) of Form S-3.
Appendix: Early Distribution Adjustment Examples
50. In footnote 3 to the first set of hypothetical examples, the Form S-1
prospectus states that
the examples assume implied volatility of 25%, whereas the Form S-3
prospectus states
that this assumption is 10%. As the examples are otherwise the same in
both
prospectuses, please reconcile this variation.
Appendix: Policy/Rider Variations
51. (Form S-1 Prospectus Only) Please remove this appendix (and all related
cross-
references), as the suspension of the Guaranteed Interest Option
Limitation does not vary
among policies.
Appendix: Impact of MSO Election on Other Policy Riders and/or Services
52. (Form S-3 Prospectus Only) We note that most of the information included
in this
appendix is described in the Risk Factors section of the prospectus.
Moreover, while
several disclosures in the prospectus cross-reference to this appendix,
the appendix does
not provide any further information with respect to such disclosures.
For example, the
definition of Segment Maturity GIO Limitation on page 6 provides a
cross-reference to
this appendix, but the appendix does not provide any information on the
Segment
Maturity GIO Limitation. Please delete this appendix (and all related
cross-references),
and ensure that all information therein is disclosed in a section of the
prospectus that
describes all material impacts to the policy riders if amounts are
invested in the MSO. See
also staff comment 24.
Julie Collett, Esq.
February 12, 2021
Page 9 of 9
Part II
53. Please revise the exhibit list so as not to incorporate by reference to
this registration
statement (i.e., these are initial registration statements and do not
have prior amendments
from which to incorporate).
54. (Form S-3 Prospectus Only) Please explain supplementally the purpose of
Exhibit 1(h).
********
Responses to this letter should be made in a letter to me filed on
Edgar and in the form of
pre-effective amendments filed pursuant to Rule 472 under the Securities Act.
Where no change
will be made in a filing in response to a comment, please indicate this fact in
the letter to us and
briefly state the basis for your position.
You should review and comply with all applicable requirements of the
federal securities
laws in connection with the preparation and distribution of preliminary
prospectuses.
Although we have completed our initial review of the registration
statements, the filings
will be reviewed further after we receive your response. Therefore, we reserve
the right to
comment further on the registration statements and any amendments. After we
have resolved all
issues, the Companies and their underwriters must request acceleration of the
effective date of
the registration statements.
In closing, we remind you that the Companies are responsible for the
accuracy and
adequacy of their disclosure in the registration statements, notwithstanding
any review,
comments, action, or absence of action by the staff.
Should you have any questions prior to filing pre-effective amendments,
please feel free
to contact me at 202-551-8045 or bentzingere@sec.gov.
Sincerely,
/s/
Elisabeth Bentzinger
Elisabeth
Bentzinger
Senior
Counsel
cc: Andrea Ottomanelli Magovern
Sally Samuel