[AMERICAN GENERAL LIFE COMPANIES LETTERHEAD]
Helena Lee
Assistant General Counsel
Direct Line: (310) 772-6259
Fax: (310) 772-6569
E-mail: hlee@sunamerica.com
VIA EDGAR AND ELECTRONIC MAIL
October 24, 2014
Sally Samuel
Senior Counsel
Division of Investment Management
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re: Variable Separate Account and FS Variable Separate Account
(collectively, "Registrant")
American General Life Insurance Company and The United States Life
Insurance Company in the City of New York (collectively, "Depositor")
Initial Registration Statements on Form N-4 File Numbers: 333-198223 and
333-198224
Dear Ms. Samuel:
Thank you for speaking with me on October 23, 2014 and providing
additional comments to our responses provided to you on October 21, 2014
regarding the Initial Registration Statements filed on Form N-4 as referenced
above. This letter provides our responses to the Staff's comments.
1. Fee Table (Page 7)
a. Comment - Please add the N-1/A fee table disclosure regarding the
fee waiver i.e. who can terminate and under what circumstances in
the footnote.
Response - We have amended the footnote as follows:
"The maximum expense is for the AMT Absolute Return Multi-
Manager Portfolio, an Underlying Fund of Neuberger Berman
Advisers Management Trust. There is a contractual
agreement with Neuberger Berman Advisers Management Trust
under which it will waive 1.30% of its fee and the fee is
2.73% after the waiver. If the fee waiver was reflected in
the maximum expense, the expense would be 2.73%. The
contractual agreement with Neuberger Berman Advisers
Management Trust will continue until December 31, 2017 and
may not be terminated during its term without the consent
of the Neuberger Berman Advisers Management Trust Board of
Trustees. The minimum expense is for VALIC Company I Stock
Index Fund, an Underlying Fund of VALIC Company I."
Sally Samuel
October 24, 2014
Page 2 of 4
2. Purchasing A Polaris Select Investor Variable Annuity (Page 9)
a. Comment - In the fourth paragraph, please revise in plain English
the language "we further reserve the right to limit the death
benefit amount payable in excess of the contract value...." If this
means that you reserve the right to terminate the Optional Return
of Purchase Payment Death Benefit, please so state. If not,
please explain or delete.
Response - Per our conversation, we have removed the following
sentence:
"For any contracts that meet or exceed these dollar amount
limitations, we further reserve the right to limit the
death benefit amount payable in excess of contract value at
the time we receive all required paperwork and satisfactory
proof of death."
3. Dollar Cost Averaging Program (Page 20)
a. Comment - Please clarify the disclosure in the second paragraph:
"We may also offer DCA Fixed Account source account...." It is not
clear when the DCA Fixed Account may be used for transfers into
the DCA program.
Response - Per our conversation, we have revised the second
paragraph as follows:
"The DCA Fixed Accounts only accept initial and subsequent
Purchase Payments because they are offered as source
accounts exclusively to facilitate the DCA program for a
specified time period. You may not make a transfer from a
Variable Portfolio or available Fixed Account into a DCA
Fixed Account."
4. Polaris Portfolio Allocation Program (Page 20-22)
a. Comment - Please remove "unless you elect a Select Strategy"
because it is confusing as to whether a different percentage of
the Purchase Payment may be invested in a Select Strategy as
well. Also, please clarify what happens after termination of the
Polaris Portfolio Allocator Model.
We have revised the third paragraph under the header "Enrolling
in the Polaris Portfolio Allocator Program" as follows:
"You may only invest in one Portfolio Allocator model at a
time. Participation in this program requires that you
invest 100% of your initial Purchase Payment and subsequent
Purchase Payment(s) in the same Portfolio Allocator Model.
If you: 1) attempt to allocate a portion of your Purchase
Payment outside of your elected Portfolio Allocator model,
or 2) if you invest in any Variable Portfolios in addition
to investment in a Portfolio Allocator model under this
program, such an investment may no longer be consistent
with the Portfolio Allocator model's intended objectives
and therefore, will effectively terminate your election of
the Polaris Portfolio Allocator Model. If your election of
the Polaris Portfolio Allocator Model is terminated, your
investment will remain allocated to the same Variable
Portfolios and in the same amounts as before the program
was terminated; however, your investment will no longer be
deemed to be in a Polaris Portfolio Allocator
Sally Samuel
October 24, 2014
Page 3 of 4
Model."
5. Select Strategies (Page 22-24)
a. Comment - Please clarify what happens after termination of a
Select Strategy.
Response - We have revised the third paragraph under "Electing a
Select Strategy" as follows:
"You may only invest in one Select Strategy at a time.
Election of a Select Strategy requires that you invest 100%
of your initial Purchase Payment and subsequent Purchase
Payment(s) in the same Select Strategy. If you: 1) attempt
to allocate a portion of your Purchase Payment outside of
your elected Select Strategy, or 2) if you invest in any
Variable Portfolios in addition to investment in your
Select Strategy, such an investment may no longer be
consistent with the Select Strategy's intended objectives
and therefore, will effectively terminate your election of
the Select Strategy. If your election of a Select Strategy
is terminated, your investment will remain allocated to the
same Variable Portfolios and in the same amounts as before
the Select Strategy was terminated; however, your
investment will no longer be deemed to be in a Select
Strategy."
6. Spousal Continuation (Page 31)
a. Comment - Please further explain that the age of the Continuing
Spouse for the Return of Purchase Payment Death Benefit i.e.
under age 75, over age 76, would determine the amount of future
death benefits.
Response - This sentence has been revised as follows:
"The age of the Continuing Spouse on the Continuation Date
will be used to determine any future death benefits under
the contract. If you elected the optional Return of
Purchase Payment Death Benefit, the death benefit payable
upon the Continuing Spouse's death would differ depending
on whether the Continuing Spouse is age 75 or younger, or
age 76 and older, on the Continuation Date."
b. Comment - Please add disclosure that you will notify the contract
owner if and when you exercise the right to modify, suspend or
terminate the Spousal Continuation provision, the Polaris
Portfolio Allocation Program, the Select Strategies, the Systemic
Withdrawal Program and any other program where you reserve the
right to modify, suspend or terminate.
Response - We will amend the language for all programs such as
Systematic Withdrawal, Polaris Portfolio Allocator Models, etc.
where we reserve the right to modify, suspend or terminate to add
language that we will notify the contract owner as follows:
"We reserve the right to modify, suspend or terminate the
[Program] at any time and we will notify you if we exercise
that right."
Sally Samuel
October 24, 2014
Page 4 of 4
For Spousal Continuation, we would modify, suspend or terminate
for prospectively issued contracts only and we would supplement
or amend the prospectus to modify, suspend or terminate Spousal
Continuation.
Per our conversation, we will file all revisions and relevant exhibits
and financial statements in Pre-Effective Amendments to the Registration
Statements on November 3, 2014 along with the Acceleration Request asking for
effectiveness on November 4, 2014. As part of the Acceleration Request, we
will make the appropriate representations pursuant to the Staff's press
release dated June 24, 2004.
Should you have any questions or need any additional information
concerning the Registration Statements, please do not hesitate to contact me
at (310) 772-6259.
Very truly yours,
/s/ Helena Lee
Helena Lee