Steve Suleski
Vice President
Office of General Counsel
Phone: 608.231.7653
Fax: 608.236.7653
E-mail: steve.suleski@cunamutual.com
January 12, 2006
BY EDGAR
Robert S. Lamont, Esq.
U.S. Securities and Exchange Commission
Office of Insurance Products
100 F Street, NE
Washington, DC 20549
RE: CUNA MUTUAL LIFE VARIABLE ANNUITY ACCOUNT
POST-EFFECTIVE AMENDMENT NO. 4 TO REGISTRATION
STATEMENT ON FORM N-4 FILE, NOS. 333-116426; 811-8260
Dear Mr. Lamont:
On behalf of CUNA Mutual Life Insurance Company (the "Company") and the
CUNA Mutual Life Variable Annuity Account (the "Variable Account"), I am
providing the Company's response to your comments given orally to Pamela
Ellis of Sutherland Asbill & Brennan LLP on December 22 and December 28,
2005 with regard to Post-Effective Amendment No. 3 to the above-referenced
registration statement.
Post-Effective Amendment No. 4 (the "Amendment") to registration statement
was filed with the Commission on January 12, 2006. The Amendment has been
marked to reflect changes made in response to your comments, as well as
additional editorial and clarifying changes. Page number references are to
the prospectus supplement as filed as part of the Amendment.
Set forth below are your comments on Post-Effective Amendment No. 3. The
Company's response follows each comment.
1. PLEASE MAKE THE DISCLOSURE IN THE INTRODUCTION MORE CONSISTENT WITH
PLAIN-ENGLISH PRINCIPLES AND LIMIT THE USE OF ACRONYMS ON THE FIRST
PAGE OF THE PROSPECTUS SUPPLEMENT.
The disclosure on the first page has been rewritten to make the
introduction more consistent with plain-English principles. The
Company has limited the use of acronyms on the first page of the
prospectus supplement. The introduction is set forth in Appendix A to
this letter.
2. PLEASE PROVIDE INFORMATION IN THE INTRODUCTION TO THE PROSPECTUS
SUPPLEMENT AS TO WHY A CONTRACT OWNER SHOULD PURCHASE THE RIDERS.
Robert S. Lamont, Esq.
January 12, 2006
Page 2
The following disclosure been added on page 1 about the guaranteed
minimum withdrawal benefit:
This means that regardless of poor market performance, you will
be able to take predictable withdrawals.
The following disclosure has been added on page 1 about the guaranteed
minimum accumulation benefit:
This means that your benefit basis is guaranteed regardless of
poor market performance.
3. PLEASE PROVIDE INFORMATION AS TO WHETHER THE ASSET ALLOCATION PROGRAM
DESCRIBED IN THE PROSPECTUS SUPPLEMENT IS DYNAMIC OR STATIC IN NATURE.
The following disclosure has been added on pages 4 and 8 about the
static nature of the asset allocation program:
The benefit allocation models are static and offer pre-selected
Subaccounts and percentages that have been established for
different types of investors.
4. ON PAGE 8, PLEASE NOTE THAT THE GMWB ACRONYM SHOULD BE GMAB.
The acronym has been changed to GMAB.
5. ON PAGE 9, PLEASE PROVIDE MORE INFORMATION ABOUT HOW A PURCHASE
PAYMENT OUTSIDE THE WINDOW WILL INCREASE THE COST OF THE GUARANTEED
MINIMUM ACCUMULATION BENEFIT RIDER.
The following disclosure has been added on page 8:
Since the Company calculates the charge for the GMAB based on
your Contract Value, such purchase payments will increase the
cost of the rider (see GMAB Charge below) but will not increase
your benefit basis. In addition, because such additional purchase
payments will increase the cost of the GMAB without increasing
your benefit basis, such payments could limit your GMAB rider
benefits.
Robert S. Lamont, Esq.
January 12, 2006
Page 3
6. PLEASE DISCLOSE THE LENGTH TIME OF THE MINIMUM CHARGE PERIOD.
On page 9, the Company now discloses that the length of time of the
minimum charge period is seven years.
7. PLEASE EXPLAIN SUPPLEMENTALLY WHY THERE IS A MINIMUM CHARGE PERIOD.
The Company assumes certain risks under the GMWB and GMAB riders. To
help manage those risks, the Company purchases hedging instruments.
The minimum charge period generally is tied to those hedging
instruments.
8. ACKNOWLEDGEMENTS
As you requested, the Company acknowledges that:
o the Company, on behalf of the Variable Account, is responsible
for the adequacy and accuracy of the disclosure in Post-Effective
Amendment No. 4 to the Form N-4 registration statement for the
Variable Account filed with the Commission on January 12, 2006;
o Commission Staff comments or changes to disclosure in response to
Staff comments in the filing reviewed by the Staff do not
foreclose the Commission from taking any action with respect to
the filing; and
o the Company, on behalf of the Variable Account, may not assert
Staff comments as a defense in any proceedings initiated by the
Commission or any person under the federal securities laws of the
United States.
* * *
I hope you find these responses satisfactory. If you have any questions or
further comments regarding this Amendment, please call me at 608-231-7653 or
Pamela Ellis at 202-383-0566.
Sincerely,
/s/Steve Suleski
Steve Suleski, Esq.
Attachment
cc: Pamela Ellis, Esq.
APPENDIX A
This supplement updates your Prospectus for the MEMBERS Variable Annuity III
(the "Contract") issued through CUNA Mutual Life Variable Annuity Account. This
supplement describes two optional benefits, the Guaranteed Minimum Withdrawal
Benefit ("GMWB") and the Guaranteed Minimum Accumulation Benefit ("GMAB"), which
may be added by rider to the Contract in some states when you purchase the
Contract. You may elect either the Guaranteed Minimum Withdrawal Benefit or the
Guaranteed Minimum Accumulation Benefit, but not both optional benefits.
The Guaranteed Minimum Withdrawal Benefit permits you to receive up to the
guaranteed maximum withdrawal amount for either a set number of Contract Years
or each Contract Year during the Annuitant's lifetime (regardless of Contract
Value). This means that regardless of poor market performance, you will be able
to take predictable withdrawals. However, you should not elect the Guaranteed
Minimum Withdrawal Benefit if:
o you plan to take partial withdrawals in excess of the guaranteed
maximum withdrawal each Contract Year because those withdrawals may
significantly reduce or eliminate the value of the benefit; or
o you are interested in long term accumulation rather than receiving
payments.
The Guaranteed Minimum Accumulation Benefit guarantees that your Contract Value
will equal the benefit basis less adjustments for partial withdrawals at the
expiration of the benefit period. This means that your benefit basis is
guaranteed regardless of poor market performance. However, you should not elect
the Guaranteed Minimum Accumulation Benefit if you are interested in receiving
payments. Partials withdrawals may reduce the benefit basis by more than the
withdrawal amount.
Please note that you may not want to elect either the Guaranteed Minimum
Withdrawal Benefit or the Guaranteed Minimum Accumulation Benefit if:
o you plan to make additional purchase payments in excess of the maximum
window purchase payment amount because those payments will not
increase your benefit, but will increase the cost of the rider; or
o you would prefer that your Contract Value not participate in an
available benefit allocation model because all Contract Value must
participate in the available benefit allocation model for the riders
to remain in effect.
This supplement provides information in addition to that contained in the
Prospectus dated May 2, 2005 for the Contracts. It should be read in its
entirety and kept together with your Prospectus for future reference.
State variations may apply, and the Guaranteed Minimum Withdrawal Benefit and/or
the Guaranteed Minimum Accumulation Benefit may not be available in every
jurisdiction. Certain terms used in this supplement have special meanings. If a
term is not defined in this supplement, it has the meaning given to it in the
Prospectus.