Dodie Kent
Vice President and Associate General Counsel
AXA Equitable Life Insurance Company
1290 Avenue of the Americas
New York, NY 10104
(212) 314-3970
August 6, 2010
Sonny Oh, Esquire
Office of Insurance Products
Division of Investment Management
Securities and Exchange Commission
100 F Street NE
Washington, DC 20549
RE: AXA Equitable Life Insurance Company:
Separate Account No. 49 of AXA Equitable Life Insurance Co.
Protected Capital Strategies
Initial Registration Statement filed on Form N-4
File Nos. 811-07659 and 333-165395, and
Initial Registration Statement filed on Form S-3
File No. 333-165396
Dear Mr. Oh,
On behalf of AXA Equitable Life Insurance Company ("AXA Equitable" or the
"Company"), we respond below to an important issue raised in your letter dated
July 30, 2010, which provided a second set of comments of the SEC staff on the
above-referenced registration statements. In particular, the staff raised -- for
the first time -- a concern with the use of the word "Protected" in the names
"Protected Investment Option" and "Protected Capital Strategies." Although these
terms were prominently used in the prospectus filed in the initial registration
statements, the staff did not raise any comments or concerns in the staff's
initial comprehensive comment letter dated June 4, 2010.
Due to the late date of the staff's comments, and the potential significant
impact on the related state filing process, we would like to resolve the staff's
concerns expeditiously. Therefore, we respond below to the comment related to
the word "Protected" (Comment 1.d.), as well as a related comment on the status
of state filings (Comment 1.c.). The Company will file a subsequent response
letter addressing the remaining comments in the July 30, 2010 letter in the near
future.
COMMENT 1.C.
Please clarify supplementally in what states the registrant has filed to offer
the product and what the status of those filings is.
RESPONSE 1.C.
The Company has filed the contract in 52 states, and the filing has been
approved in 33 states. Attached is a chart detailing the approval status in all
the states where filed. See Attachment A.
COMMENT 1.D.
The staff is concerned with the use of the word "Protected" in the name
"Protected Investment Option" and "Protected Capital Strategies." The staff
believes that the terms could mislead investors in an insurance product as to
the risks that the products entail. Please either revise the name used to
describe the option and the contract or clarify supplementally why you believe
the phrase would not mislead investors.
RESPONSE 1.D.
The Company strongly believes that the word "Protected" in the names "Protected
Investment Option" and "Protected Capital Strategies" is not misleading.
Our understanding is that the staff's concern about the use of the word
"Protected" is due to the fact that the contract does not provide a guarantee
that the contract owner will receive a return of all or, substantially all, of
his or her investment. As discussed below, the word "Protected" is a generic
term that does not imply any specific degree of protection; nor does it imply a
guaranteed return of principal. Also, as discussed below, the prospectus
prominently discloses in several areas the extent of the protection offered, and
the fact that there is a risk of loss of principal.
The word "protect" generally means to "guard" or "cushion" against a "loss" (see
e.g., Random House Webster's Unabridged Dictionary (2d ed. 2001)). The degree to
which there is a "cushion" against a "loss" cannot be inferred from the word
"protect" alone. Thus, the word "protect" does not itself connote a guarantee.
The Protected Investment Option offers a Segment Buffer, which protects an
investor holding a Segment until maturity against the first 10%-30% of negative
performance of the relevant index (with the specific percentage selected by the
contract owner). Disclosure throughout the prospectus makes very clear that the
term "protect" does not mean that the Segment Buffer guarantees that the
investor could not lose principal. In fact, clear bolded language on the cover
page of the prospectus states that there is no such guarantee in this product.
The disclosure states:
THERE IS RISK OF SUBSTANTIAL LOSS OF YOUR PRINCIPAL BECAUSE YOU
AGREE TO ABSORB ALL LOSSES TO THE EXTENT THEY EXCEED THE PROTECTION
PROVIDED BY THE PROTECTED INVESTMENT OPTION. IF YOU WOULD LIKE A
GUARANTEE OF PRINCIPAL, WE OFFER OTHER PRODUCTS THROUGH OUR GENERAL
ACCOUNT THAT PROVIDE SUCH GUARANTEES.
It is also worth noting that that the prospectus does not link the term
"Protected" to any word that would suggest some type of guarantee or full return
of contribution, such as "Principal." Further, following the name of the product
on the cover page is the qualifier, "a variable and index-linked deferred
annuity contract". This qualifier informs the potential investor that there
could be variations in the value of the contract and that there is no promise of
a guaranteed return. We expect that this disclosure will become even more clear
and prominent as we work through the comments in the staff's July 30, 2010
comment letter.
Also, we ask that you consider the fact that unlike non-insurance company
registrants, the Company is subject to very stringent solvency requirements of
state insurance regulators. The Company is required to set aside reserves and
maintain capital requirements to support its obligations in the prospectus and
the contract. Thus, given the robust disclosure regarding the limits of the
protection offered in the product, and the fact that the Company has set aside
reserves and maintains capital requirements to meet its obligation to provide
the protection offered in the prospectus, we believe that the words "Protected"
in "Protected Capital Strategies" and "Protected Investment Option" are not
misleading.
Significantly, other regulators charged with preventing the misleading
description of our products have reviewed and approved the contract form and
advertising materials for this product. The 33 states insurance regulators who
have approved the product obviously agree that the words "Protected Capital
Strategies" and "Protected Investment Option" are not misleading. Also, FINRA
has approved marketing materials containing the words "Protected Capital
Strategies" and "Protected Investment Option." Neither the state insurance
regulators nor FINRA have raised an objection to the use of the word
"Protected".
Thus, in view of the foregoing, we believe that the use of the words "Protected
Capital Strategies and "Protected Investment Option" is not misleading.
Please contact me at (212) 314-3970 or Chris Palmer at (202) 346-4253 if you
have any questions or comments on this response. We look forward to resolving
any remaining concern promptly.
Yours truly,
Dodie Kent
Attachment
cc: Chris Palmer, Esq.
Attachment A:
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JURISDICTION FILING STATUS
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Alabama Approved
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Alaska Approved
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Arizona Filing Not Required
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Arkansas Approved
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California Approval Pending
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Colorado Filing Not Required
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Connecticut Approved
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Delaware Approval Pending
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District of Columbia Approved
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Florida Approved
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Georgia Approved
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Hawaii Approval Pending
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Idaho Approved
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Illinois Approval Pending
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Indiana Approved
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Iowa Approved
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Kansas Approved
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Kentucky Approved
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Louisiana Approved
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Maine Approved
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Maryland Approved
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Massachusetts Approved
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Michigan Approval Pending
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Minnesota Approved
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Mississippi Approved
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Missouri Approval Pending
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Montana Approval Pending
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Nebraska Approved
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Nevada Approved
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New Hampshire Approval Pending
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New Jersey Approval Pending
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New Mexico Approval Pending
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New York Approval Pending
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North Carolina Approved
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North Dakota Approved
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Ohio Approved
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Oklahoma Approved
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Oregon Approval Pending
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Pennsylvania Approval Pending
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Puerto Rico* Approval Pending
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Rhode Island Approved
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South Carolina Approved
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South Dakota Approved
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Tennessee Approved
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Texas Approval Pending
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Utah Approved
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Vermont Approval Pending
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Virginia Approval Pending
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Washington Approved
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West Virginia Approved
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Wisconsin Approved
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Wyoming Approved
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