WILLIAM J. EVERS
VICE PRESIDENT AND COUNSEL
212-314-5027 (TEL)
212-314-3953 (FAX)
October 7, 2010
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.
Retirement Cornerstone(SM) - Series ADV
Post-effective Amendment No. 3 filed on Form N-4
File Nos. 811-07659 and 333-160951
Ladies and Gentlemen:
On behalf of the AXA Equitable Life Insurance Company ("AXA Equitable" or
the "Company"), we submit this letter in response to the staff's request that we
propose alternative labels to be used in the prospectus to identify one of the
two account values and its corresponding variable investment options
(hereinafter, collectively, referred to as "Performance account") under the new
version of the Retirement Cornerstone(SM) variable annuity contract (the
"Contract").
As background, on July 26, 2010, the Company filed an amendment to the
above-referenced registration statement under Rule 485(a) (the "Amendment"). On
September 23, 2010, the Company voluntarily filed an amendment under Rule
485(b)(1)(iii) in order to facilitate the staff's ability to provide comments on
the Amendment. On September 24, 2010, the staff provided to the Company an
11-page letter setting forth specific comments on the Amendment. On October 5,
2010, the Company filed a 30-page response letter, via correspondence, and a set
of revised pages for the prospectus.
In addition, on September 24, 2010, the staff orally informed the Company
that the staff may object to the use of the label "Protection account," which is
solely available in connection with the Contract's Guaranteed benefits. The
staff later confirmed that it did, in fact, object to the use of the label
"Protection account." After several phone calls with the staff, although we
continue to believe strongly that the term "Protection account" in the
prospectus is appropriate, we have mutually agreed to change the term to
"Protection benefit account."
During our discussions with the staff since September 24, 2010, the staff
raised an additional objection with respect to the label "Performance" when used
in connection with the portion of the contract and the variable investment
options that do not fund the Guaranteed benefits (hereinafter, collectively
referred to as the "Performance account"). The Company has suggested a variety
of alternative names for the Performance account, this, despite our continued
belief that the term Performance account is appropriate. To date, the staff has
rejected every suggestion and has not stated or provided any guidance as to what
label it would find acceptable.
In an effort to resolve the staff's objection before the Amendment
becomes automatically effective, the staff suggested that the Company submit a
letter listing our preferred labels (in order of preference), the reasons the
Company believes the labels to be appropriate, and the reasons the Company
believes the staff should not object. The staff stated that it would not simply
pick a single label that it prefers, but instead would identify the label
highest on the list that the staff would find acceptable.
SUGGESTED LABELS. Set forth below is the list of labels we propose best reflects
the portion of the contract that does not fund the Guaranteed benefits. As
requested, we list them in order of the Company's preference.
(1) Performance account
(2) Investment performance account
(3) Investment account
(4) Variable performance account
(5) Market performance account
(6) Asset management account
(7) Accumulation account
(8) Growth opportunities account
(9) Opportunities account
REASONS THE NAMES ARE IMPORTANT TO UNDERSTANDING THE CONTRACT
The reasons the Company believes strongly in the term "Performance
account" are discussed below. These same reasons apply to each of the suggested
labels, but we have listed them above in the order in which the Company believes
they best communicate to investors the objectives of the two distinct portions
of the contract.
o The Contract, unlike most variable annuities in the marketplace
today, allows an investor to allocate between 0 and 100% of the
total account value to the Protection benefit account. In essence,
the Contract has two parts: (i) an account that provides access to a
wide array of investment options in multiple asset classes and
sectors; and (ii) an account that funds a guaranteed income benefit
and three guaranteed minimum death benefits, but is subject to
investment restrictions. AXA Equitable created the Contract to
provide investors with the option to purchase a single contract that
satisfies two fundamental retirement saving approaches at the same
time: (i) the ability to potentially accumulate assets, pursuant to
the investor's risk profile, through an expansive investment
platform, and (ii) the ability to lock in guaranteed income and
death benefit protection. The Contract also affords the investor the
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unique ability to transfer accumulated assets in the Performance
account to the Protection benefit account, thus allowing for
continued growth of the Guaranteed benefits.
o Throughout the Prospectus, the labels also serve as a clear
delineation between the portions of the account value that is
subject to the charge(s) associated with the Guaranteed benefits.
o The labels used in the revised version of the Contract were
developed in response to recommendations from the Company's
distribution partners that it use plain English labels to emphasize
the Contract's two distinct account values and their corresponding
variable investment options. Our labels were chosen based on input
from our distribution partners, as well as input from and a
well-recognized consulting firm that specializes in language
strategy research. The consulting firm uses its research to identify
messages and marketing terms that are most clear and credible to
investors. These inputs helped us to determined that the use of two
primary simple terms would best convey the two portions of the
Contract - "Performance" and "Protection." These are of course only
labels, and they are associated with detailed Prospectus disclosure
about the two portions of the Contract and each investment option.
REASONS THE STAFF SHOULD NOT OBJECT
The staff's objection initially seemed to be based on the idea that the
use of the term "performance" connoted "positive performance;" we now understand
the current objection to be based on a concern that the label "Performance
account" suggests that the Protection benefit account does not offer the
opportunity to experience performance.
We strongly disagree with the staff's suggestion that the term
"Performance Account" is misleading or otherwise inappropriate for the following
reasons:
o The Company developed the "Performance" and "Protection" labels in
an effort to respond to feedback that the labels should be more
plain English than the labels used with the initial version of the
Contract. For example, in connection with the use of the terms
"Protection" and "Performance" in our marketing materials, we have
received numerous comments, including the following: "Thank you
for finally using terms that my client will understand. The one
thing I don't like about annuities is that my clients don't
understand the terms and become confused. With the two accounts,
my clients easily understand the difference of the investment goal
for each account."
o When the Prospectus discusses options available with the
Guaranteed benefits, it will use the term "Protection benefit
account variable investment options." The use of that term
specifically notes that the options are "variable." The Company
does not believe that investors will be misled into thinking that
those options are not variable investment options simply because
we refer to the options available with the other portions of the
Contract as "Performance account variable investment options."
o The portion of the Contract that does not fund the Guaranteed
benefits provides a significantly greater variety of investment
options, and thus possible performance results, than the portion
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of the Contract that funds the Guaranteed benefits. For account
value that is not associated with the Guaranteed benefits, the
investor may choose to allocate 0% to 100% to one or more of a
variety of 113 variable investment options that include a wide
variety of equity and fixed income asset classes. In contrast, to
provide effective pricing on the Guaranteed benefits, we have
limited the number of available variable investment options
through the Protection benefit account to 11, and further
restricted the investor to certain allocation limits. These limits
include a restriction that limits the equity allocation to no more
than 60%. These limits on both option selection and percentage
allocation stand in stark contrast to the wide selection of
performance outcomes available for the portion of the contract
that is not associated with the Guaranteed benefits. We believe
that having significant choice is best described by the label
"Performance account."
o The Company strongly believes that staff's objection to
Performance account is effectively substituting its judgment for
the business judgment of the Company with respect to the Company's
thoughtful determinations in how to more plainly label the two
account values of the Contract and their associated variable
investment options.
o The Company also notes that the staff requests - and the Company
agrees to provide - Tandy representations, noting that the Company
remains responsible for the disclosure in its prospectuses. In
effect, the staff's objection shows no deference to the Company
and its view of appropriate communications with investors.
THE PROCESS
The Company is troubled by the process by which the staff has provided
these objections and addressed the Company's responses. To date, there has never
been a statement as to the legal basis for the staff's concerns or citation to
any precedent. This has left the Company grasping for possible solutions while
it tries to meet the launch date that it reasonably planned in light of Rule
485(a).
Lastly, regardless of the outcome to this particular filing, the Company
reserves the right to continue to object to the staff's position and pursue at a
later date further discussions with the staff regarding appropriate names and
disclosure.
* * * * *
We look forward to the staff's response. We note that the launch of the
revised version of the Contract hinges on the prompt resolution of this matter.
Please feel free to contact either me or Dodie Kent if you have any questions.
Very truly yours,
/s/ William J. Evers
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William J. Evers
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