Securian Financial Group, Inc.
400 Robert Street North
St. Paul, MN 55101-2098
www.securian.com
651.665.3500
[LOGO]
SECURIAN
November 12, 2009
Ms. Ellen Sazzman
Office of Insurance Products
Securities and Exchange Commission
100 F Street, NE
Washington, D.C. 20549-4644
Re: Post-Effective Amendment No. 4 to the Form N-6 Registration Statement
filed on behalf of Minnesota Life Individual Variable Universal Life
Account (File No. 333-148646 and 811-22093)
Dear Ms. Sazzman:
This letter is a comprehensive response to the SEC Staff comments received by
the Company in telephone conversations beginning on October 22, 2009. Below
are responses to the SEC Staff?s oral comments. For the SEC Staff?s
convenience, each of the SEC Staff?s comments is set forth below, and then the
response follows.
* * * * * * * * *
I. SEC Staff Comments received on October 22, 2009
Oral comments were received from the SEC Staff on October 22, 2009. The
Company responded to the following SEC Staff comments on October 31, 2009 via
facsimile correspondence (the responses to the following comments were
provided to the SEC Staff in a marked copy of the draft Supplement that
highlighted the Company?s responses to the comments received from the SEC
Staff on October 22, 2009).
General Comments:
1. Please confirm supplementally that the policy name on the front cover page
is and will continue to be the same as the EDGAR Class identifiers.
Response:
Minnesota Life Insurance Company (the ?Company?) confirms that the policy
name on the cover page of the prospectus is and will continue to be the
same as the EDGAR class identifiers associated with the policy.
Securian Financial Group provides financial security for individuals and
businesses through its subsidiaries including Minnesota Life Insurance
Company, Advantus Capital Management, Securian Financial Services and Securian
Trust Company.
F62483 2-2005
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November 12, 2009
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2. Please clarify supplementally whether there are third party guarantees to
support any of the company?s guarantees under the policy.
Response:
The Company asserts that there are no third-party guarantees to support its
guarantees provided in the Policy. The Company will be solely responsible
for paying out guarantees provided under the Policy.
3. Please confirm that the Rule 12h-7 representation is included in the
prospectus.
Response:
The Company confirms that the Rule 12h-7 representation is contained in
part A. of the registration statement and can be found on page 51 of the
prospectus.
4. General Account Description (p. 15)
Comment:
Please revise your general account discussion language to read as follows:
The general account is not segregated or insulated from the claims of
insurance company creditors. Investors look to the financial strength
of the insurance company for its insurance guarantees. Guarantees
provided by the insurance company as to the benefits promised in the
contract are subject to the claims paying ability of the insurance
company and are subject to the risk that the insurance company may
default on its obligations under those guarantees.
Response:
The Company has complied with the SEC Staff comment.
5. Add new disclosures that clarify that excess withdrawals from the policy
can reduce or eliminate certain riders or agreements. Since the riders or
agreements terminate when the accumulation value goes to zero, excess
withdrawals from the policy can terminate the benefit.
Response:
The Company notes that language regarding termination of the Policy is
contained in the second paragraph of the section entitled ?What are some of
the risks of the Policy? found on
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November 12, 2009
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page 3 of the prospectus. However, in response to the SEC Staff?s comment,
the following sentence has been added as the second sentence of that
paragraph:
If your Policy terminates, all of the agreements added to the Policy
will also terminate.
6. General Comment
Comment:
Please explain how and when this supplemental information will be
incorporated into the prospectus.
Response:
The supplemental attachment to the prospectus will be sent to each current
policy owner. In addition, as stated in the supplemental attachment, the
supplemental attachment will accompany the prospectus for each new purchaser.
This post-effective amendment incorporates by reference the content of the
registration statement for the policy filed with the SEC on April 30, 2009.
The information in the supplemental attachment will be included in the
prospectus to the registration statement for the Policy that will become
effective on or about May 1, 2010.
7. Introductory Paragraph to the Supplemental Attachment
Comment:
Please provide a description of each of the additional agreements being added,
which purchasers may benefit from the agreement and any potential risks
associated with purchasing the agreement.
Response:
The following information is being added as the third through seventh
sentences to the first paragraph of the supplemental attachment to the
prospectus:
The Guaranteed Insurability Option (GIO) allows you to purchase
additional insurance coverage or increased face amount under the policy
without the insured undergoing underwriting at the time you exercise the
GIO. You should consider purchasing the GIO if you think you may need
additional insurance protection prior to the policy anniversary nearest
the insured?s fortieth birthday and you are concerned about the
insured?s ability to qualify for additional insurance in the future
because of health or lifestyle issues. The GIO is available at issue
with underwriting and may be added at a later date subject to
underwriting. The GIO may also be added to policies that were purchased
prior to the initial date the GIO was available. If you purchase the
GIO and do not exercise the right
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November 12, 2009
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to purchase additional insurance coverage or face amounts on the
exercise date, you will still pay a charge for the GIO.
8. Page 1 of the Prospectus.
Comment:
Consider adding an overview of the benefits and risks of all the available
riders and agreements (provided it is not too long).
Response:
In response to the SEC Staff comment, the Company has reviewed the Summary
of Benefits and Risks section of the prospectus and it does not believe a
detailed discussion of the benefits and risks for each optional agreement
would allow it to meet the space requirements for this summary section.
However, the Company will add the following language to the second
paragraph of the section entitled ?What are some of the benefits of the
Policy??
Each of the optional agreements we offer provides the policy owner with
additional benefits that may affect the insurance protection or
accumulation value of the Policy. The particular benefits and risks
associated with each agreement are more fully explained in the section
entitled ?Supplemental Agreements?. The charges for each of these
agreements are described more fully in the section entitled ?Policy
Charges.?
9. Table of Periodic Charges other Than Investment Option Operating Expenses
(p. 8 of the Prospectus)
Comment:
Please clarify the term ?agreement coverage? Please make sure this is more
explicit in the Table.
Response:
In response to the SEC Staff comment, the term agreement coverage was modified
to read ?additional coverage layer?. In addition, the following sentence has
been added to footnote 25 to the Periodic Charges Other Than Investment
Operating Expenses Table:
The charge shown for the Guaranteed Insurability Option (GIO) is a
monthly charge for the option to purchase, on the available option
dates, the additional insurance coverage referred to as the additional
coverage layers elected by the policy owner when the GIO is purchased.
The charge will apply from the date the GIO is added to the policy until
the
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November 12, 2009
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date the GIO terminates, which generally occurs on the last specified
option date (which is generally the policy anniversary nearest the
insured?s fortieth birthday). The GIO charge varies based upon the
insured?s gender, risk class, age and the amount of additional coverage
layer that is elected when the GIO is purchased. The charges shown in
the table may not be representative of the charges you will pay. More
detailed information regarding the charges for the GIO is available upon
request by contacting us at the telephone number or address listed on
the cover page of this prospectus.
10. Effect of Option on Face Amount
Comment:
Confirm for the SEC Staff that the election of this option means an
increase in the face amount. What is the cost of insurance for this
coverage layer?
Response:
The Company confirms that election of this option will result in an
increase in the face death benefit of the policy. The amount of the face
death benefit increase is chosen by the policy holder at the time the
option added to the policy. The cost of insurance charge associated with
this coverage layer will be based upon the most recent underwriting risk
class and the age, gender and smoking class of the insured at the time the
coverage layer is added.
11. Cost of the Guaranteed Insurability Option
Comment:
Please clarify when the new charge for the option is imposed (i.e., upon
issuance, upon election of the option). Clarify how long the charge is
imposed for. Please make the appropriate clarifications on page 2 of the
supplement.
Response:
The Company clarifies that the charge for the Guaranteed Insurability
Option is imposed when the policy owner adds the option. It is a monthly
charge that is taken from the Policy?s accumulation value until the option
terminates. In response to the SEC Staff comment, the following language
is added as sentences two and three of the Guaranteed Insurability Option
description in the Policy Charges section of the prospectus:
The charge shown for the GIO is a monthly charge for the option to
purchase, on the available option dates, the additional insurance
coverage referred to as the additional coverage layers elected by the
policy owner when the GIO is purchased. The charge will apply from the
date the GIO is added to the policy until the date the GIO terminates, ?
November 12, 2009
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which generally occurs on the last specified option date (which is
generally the policy anniversary nearest the insured?s fortieth
birthday).
12. Narrative Description of Guaranteed Insurability Option (p. 39)
Comment:
Add information to the narrative description of the GIO regarding the
agreement charges.
Response:
The following sentence has been added as the second to the last sentence of
the first paragraph of the narrative description of the Guaranteed
Insurability Option:
The charge shown for the GIO is a monthly charge and will apply from the
time the GIO is added to the policy until the date the GIO terminates,
which generally occurs on the last specified option date (which is
generally the policy anniversary nearest the insured?s fortieth
birthday).
Note: This will also appear as part of the response to SEC Staff Comment
14.
13. Table of Periodic Charges other Than Investment Option Operating Expenses
(p. 1 of the Supplement and p. 8 of the Prospectus)
Comment:
The option has a representative insured that is age 10 and the minimum
charges are for an insured age 0. Please explain how you arrived at these
ages?
Response:
For a representative insured, the Company determines the most common age of
the insured under the particular agreement. In the case of the Guaranteed
Insurability Option, we examined the most common insured?s age for a
similar type rider offered on other life insurance policies issued by the
Company. That most common age for such purchases happens to be ten years
of age. The minimum monthly charges for life insurance policies and
benefits are often found at the youngest age of the insured. In the case
of the Guaranteed Insurability Option, the Company?s financial risk with
offering guaranteed insurance coverage is with the lowest issue age.
Therefore, the minimum charge for the agreement will correspond with the
lowest age of the insured.
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November 12, 2009
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14. Rider terminology (p.42)
Comment:
Please explain the basis for the use of the term ?guaranteed? in the
description of the agreement. Does the term mean no additional
underwriting?
Please clarify the term ?coverage layer?.
Please clarify when the option may be elected.
Please clarify over what period the option dates will occur.
Please clarify whether there are time limits on the exercise of an
option.
Please describe the option dates.
Response:
In response to the SEC Staff comment, the narrative description of the
Guaranteed Insurability Option found on the second page of the Supplement
has been rewritten in its entirety and will appear as follows:
The Guaranteed Insurability Option (GIO) guarantees you the ability to
purchase additional amounts of insurance coverage, or additional
coverage layers, on the insured?s life on specified option dates without
additional underwriting. The minimum amount of additional coverage
layer available is $10,000 and the maximum amount of additional coverage
layer available is the lesser of $100,000 or the face amount of the base
policy on which the GIO is added. At the time the GIO is purchased, the
policy owner will specify the maximum amount of insurance coverage or
additional coverage layer that may be added to the policy on each
specified option date. The GIO is only available for insureds between
the ages of zero and forty. The policy owner may purchase the GIO at
issue subject to underwriting of the insured. The policy owner may also
add the GIO after the policy is issued, subject to underwriting of the
insured. The GIO may also be added to policies that were purchased
prior to the initial date the GIO was available. The charge shown for
the GIO is a monthly charge and will apply from the time the GIO is
added to the policy until the date the GIO terminates, which generally
occurs on the last specified option date (which is generally the policy
anniversary nearest the insured?s fortieth birthday). The charge for
the GIO will not be affected by the purchase of an additional coverage
layer on a specified option date.
The GIO guarantees that the policy owner will be able to purchase an
additional coverage layer on the specified option dates, which occur on
the policy anniversary nearest to the insured?s birthday at ages 22, 25,
28, 31, 34, 37 and 40. You will also be able to purchase an additional
coverage layer in the event the insured marries or enters into a legal
partnership, experiences the birth of a child or the legal adoption of a
child, each known as an alternative option date. If the policy owner
exercises the GIO on an alternative option date, the current specified
option date or the next available specified ?
November 12, 2009
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option date will no longer be available. For example, if the insured
marries at age 26, the policy owner may purchase an additional coverage
layer effective as of the date of the marriage. Since there is no
specified option date at age 26, the next specified option date
available at age 28 will no longer be available. All of the remaining
specified option dates (at ages 31, 34, 37 and 40) will continue to be
available. On each available specified or alternative option date, the
policy owner will be able to purchase an additional coverage layer up to
the maximum amount elected under the GIO.
The cost of insurance charge for any additional coverage layer will be
calculated using the insured?s age and the most recent underwritten risk
class for the Policy at the time the GIO is exercised. The additional
cost of insurance charges for any additional coverage layer will be
deducted monthly from the Policy?s accumulation value. There is no
requirement to pay additional premium when adding an additional coverage
layer under the GIO. However, adding additional coverage layers will
increase the cost of insurance charges under the Policy and it may be
necessary to pay additional premium to cover those increased cost of
insurance charges. The Policy change transaction charge and a new
surrender charge and surrender charge period will apply to each new
additional coverage layer. The addition of an additional coverage layer
under the Policy will not result in any other charges.
The GIO and the monthly charge deducted for the GIO will terminate when
the GIO terminates at the policy anniversary nearest the insured?s
fortieth birthday, which will correspond with the last specified option
date under the GIO. The GIO and the monthly charge deducted for the GIO
may terminate earlier than the policy anniversary nearest the insured?s
fortieth birthday if an alternative option date occurs after the
insured?s thirty-seventh birthday and before the policy anniversary
nearest the insured?s fortieth birthday and you elect to add an
additional coverage layer on that alternative option date. The
additional coverage layers purchased prior to termination of the GIO
will continue after the termination of the GIO, unless such additional
coverage layer is subsequently reduced or eliminated at the request of
the Policy owner, subject to any surrender charges. You should purchase
the GIO if you believe that future changes in the insured?s life (e.g.,
marriage, children) will result in your need for additional death
benefit and you are concerned about the insured?s ability to qualify for
additional insurance coverage because of health or lifestyle concerns.
If you purchase the GIO and do not exercise the right to purchase
additional insurance coverage or face amounts on the exercise date, you
will still pay a charge for the GIO.
15. Effect of Option on Other Agreement charges.
Comment:
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November 12, 2009
Page 9 of 14
Please describe the effect of exercising the guaranteed insurability option
on other agreement charges. In addition, consider the following issues:
The effect of exercise of an option on the policy surrender charge?
Does exercise of the option result in an increase in the face amount?
Will the policy change transaction charge be imposed?
Will premiums increase?
Will any other charges described in the Table of Periodic charges be
impacted?
Response:
The Company believes that its response to the SEC Staff?s question 14 also
provides the information requested in Comment 15.
16. Narrative description of Guaranteed Insurability Option (p. 2 of the
Supplement)
Comment:
Consider the following changes to the description of the option:
Sentence 2: Please review and revise the grammatical construct of the
sentence.
Sentence 4: Please describe this in ?plain English?.
Sentence 5: Does this sentence reflect the cost of insurance charges?
If so, that should be stated directly.
Sentence 7: Clarify when the option is issued and when the option dates
occur more clearly.
Sentence 8: Consider describing the termination date of the option in
the summary. Also, clearly describe what happens to additional coverage
when the option terminates.
Please clarify the last sentence of the summary.
Response:
The Company believes that its response to the SEC Staff?s question 14 also
provides the information requested in Comment 16.
17. Statement of Additional Information
Comment:
Please confirm whether any changes are made to the Statement of Additional
Information.?
November 12, 2009
Page 10 of 14
Response:
The Company confirms that there are no changes to the Statement of Additional
Information as a result of the addition of the Guaranteed Insurability Option.
18. Power of Attorney
Comment:
Please include a copy of the Power of Attorney that includes the 1933 Act
number for this filing.
Response:
An updated Power of Attorney including the 1933 Act number for this filing is
incorporated herein by reference.
19. Tandy Representation
Comment:
Please provide an updated Tandy Representation letter.
Response:
The Company will provide the requested information in a separate letter
filed as correspondence to the Amendment.
* * * * * * * * *
II. SEC Staff Comments received on November 2, 2009
Additional oral comments were received from the SEC Staff on November 2, 2009.
The Company responded to the following SEC Staff comments on November 3, 2009
via facsimile correspondence (the responses to the following comments were
provided to the SEC Staff in a marked copy of the draft Supplement that
highlighted the Company?s responses to the comments received from the SEC
Staff on November 2, 2009):
1. Comment:
The SEC Staff requested information regarding the availability of the
GIO to existing policy holders, the use of consistent terminology for
the additional coverage layers, clarification as to who can add the
agreement and at what ages of the insured, additional ?
November 12, 2009
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disclosure as to available option dates, clarification as to the meaning
of alternative option dates, clarification regarding cost of insurance
charges for additional coverage layers and disclosure regarding
surrender charges as they apply to additional coverage layers.
Response:
The Company had previously responded in part to the SEC Staff?s comments in
the revised narrative description of the GIO previously provided to the SEC
Staff in response to SEC Staff comment 14 received by the Company on October
22, 2009. Further revisions were made in response to this comment are
included in the current narrative description to the GIO.
2. Comment:
Please provide additional disclosure in the section entitled
?Supplemental Agreements - Death Benefit Guarantee Agreement? regarding
how the Death Benefit Guarantee value is calculated and the assumptions
used to arrive at that value.
Response:
In response to the SEC Staff comment, the following language has been added to
the Supplement attached to the prospectus and will be included in the
narrative description of the Death Benefit Guarantee Agreement found in the
?Supplemental Agreements? section of the prospectus:
The following sentences are added after the second sentence of
description of the ?Death Benefit Guarantee Agreement? found in the
?Supplemental Agreements? section on page 41 of the Prospectus:
The Death Benefit Guarantee (DBG) value is an amount we calculate
using the actual premium payments made and assuming a 4.25%
interest rate is applied to those payments. We also assume
certain expense and cost of insurance charges are deducted from
the DBG value we calculate. Those expense and cost of insurance
charges are similar to those that are deducted to calculate the
Policy?s actual accumulation value. The DBG value will vary based
on the insured?s issue age, underwriting class and the amount and
timing of premium payments. The DBG value is not a value you may
take a loan against or access by taking a withdrawal. The DBG
value is used solely to determine whether or not the Policy
terminates when the accumulation value falls to zero. We will
provide the Policy owner with the amount of the DBG value upon
request.
3. Comment:
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November 12, 2009
Page 12 of 14
Due to time considerations, commitments of the SEC Staff and upcoming
federal holiday, the Company should consider filing an extension of the
effective date of the post
effective amendment to the prospectus in order to give the Company and
the SEC Staff sufficient time to resolve additional SEC Staff comments.
Response:
The Company respectfully asserts that at the time of the request, sufficient
time existed to resolve additional SEC Staff comments and still meet the
original effective date of November 9, 2009. However, in order to accommodate
SEC Staff commitments and in recognition of a federal holiday on November 11,
2009, the Company agreed to extend the effective date of the post effective
amendment to November 12, 2009. The Company made a 485BXT filing on November
8, 2009 extending the effective date of the post effective amendment to
November 12, 2009.
* * * * * * * * *
III. SEC Staff Comments received on November 3, 2009
Additional oral comments were received from the SEC Staff on November 3, 2009.
The Company responded to the following SEC Staff comments on November 4, 2009
via facsimile correspondence (the responses to the following comments were
provided to the SEC Staff in a marked copy of the draft Supplement that
highlighted the Company?s responses to the comments received from the SEC
Staff on November 3, 2009):
Comment:
The SEC Staff provided the Company with comments regarding additional
disclosure of the termination date, clarification of language regarding
adding the option to currently issued policies, changes to footnote 25
regarding the representative charges for the specific charges set forth
in the Table of Expenses, revisions to Insert F (describing the Death
Benefit Guarantee value) to make it more understandable to the reader
and a description of the impact of purchasing additional coverage layers
on the charge for the GIO.
Response:
The additional SEC Staff comments listed above were received on November 3,
2009. The Company responded to the SEC Staff?s comments via facsimile
correspondence on November 4, 2009. The SEC Staff was provided with a marked
copy of the draft Supplement highlighting the changes made to the Supplement.
Responses to the above comments were also addressed in the Company?s prior
responses to comments 9 and 14 received by the Company on October 22, 2009 and
the Company?s response to comment 2 received by the Company on November 2,
2009.?
November 12, 2009
Page 13 of 14
* * * * * * * * *
IV. SEC Staff Comments received on November 6 and 9, 2009
Additional oral SEC Staff comments were received on November 6, 2009 (via
voice mail) and on November 9, 2009. The Company responded to the following
SEC Staff comments on November 10, 2009 via facsimile correspondence (the
responses to the following comments were provided to the SEC Staff in a marked
copy of the draft Supplement highlighting the Company?s responses to each of
the four sets of comments received from the SEC Staff beginning on October 22,
2009):
Comment:
Please provide further clarification of the termination date for the GIO
and disclosure regarding the impact of the policy change transaction
charge upon adding additional coverage layers. In addition, the SEC
Staff provided the Company with minor editorial comments.
Response:
The above comments were previously addressed in the Company?s response to
comment 14 received by the Company on October 22, 2009. Responses to all of
the SEC Staff?s editorial comments were included in the Supplement.
* * * * * * * * *
Additional Matters:
On November 10, 2009, following the Company?s facsimile correspondence
incorporating the SEC Staff comments of November 9, 2009 into the Supplement,
I left the SEC Staff reviewer a voice mail message regarding the
correspondence. In light of the fact that the following day, November 11,
2009 was a federal holiday, I requested that the SEC Staff reviewer return my
call that day and confirm whether the Company could make its Rule 485(b)
filing on November 12, 2009, incorporating all of the SEC Staff comments. I
have no record of receiving a response from the SEC Staff confirming whether
the Company could make its filing on November 12, 2009. An additional phone
call was placed to the SEC Staff on November 11, 2009 requesting confirmation
that the Company may make the Rule 485(b) filing on November 12, 2009
incorporating all of the SEC Staff comments into the Supplement. SEC Staff
confirmation was received on the date of the filing (November 12, 2009).
* * * * * * * * *
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November 12, 2009
Page 14 of 14
The Company believes that the changes noted above satisfy all of the SEC
Staff?s comments. The Company plans to file its post-effective amendment to
incorporate the changes on
November 12, 2009. If there are additional questions or comments, please
contact the undersigned at (651) 665-4593.
Very truly yours,
/s/ Timothy E. Wuestenhagen
Timothy E. Wuestenhagen
Senior Counsel
Cc: Thomas Bisset, Sutherland Asbil & Brennan, LLP