[LOGO] Kate Johnson - Second Vice President
Life & Annuity, SEC Compliance
One American Row Hartford, CT 06102-5056
(860) 403-5685 Fax: (860) 403-5239
Toll Free: 1-800-349-9267 (press 1, then 1)
Email: Kate.Johnson@phoenixwm.com
May 13, 2008
Mr. Min Oh
Staff Attorney
Office of Insurance Products
Division of Investment Management
U. S. Securities and Exchange Commission
Mail Stop 4644
100 F Street, NE
Washington, DC 20549-4644
RE:Phoenix Life Insurance Company:
Phoenix Life Variable Accumulation Account Post-Effective Amendment No. 15 to
Registration on Form N-4
File Nos. 333-68872 and 811-03488
Dear Mr. Oh:
Below please find our responses to the staff's comments taken by phone on
April 8, 2008 and further discussed on April 18, 2008. Although the staff
requested a responsive correspondence filing on or prior to the effectiveness
date of Post-Effective Amendment No. 17 to the referenced registration
statement, internal and vendor constraints prevented us from providing the
response in that timeframe. We did discuss our proposed responses to comments
1, 3, 4(c) and 13(c) with the staff prior to filing Post-Effective Amendment
No. 17. New and revised disclosure described in this letter was included in
Post-Effective Amendment No. 17 to the registration statement filed with the
Commission on May 1, 2008.
1. Please disclose to the staff whether there are any types of guarantees
or support agreements with third parties to support any of the company's
guarantees under the policy or whether the company will be primarily
responsible for paying out on any guarantees associated with the policy.
RESPONSE: There are no guarantees or support agreements with third
parties to support any of the company's obligations under the policy.
2. Confirm that the term "investment option" as a replacement for
"subaccount" has been used consistently throughout the document.
RESPONSE: We have reviewed the document to correct erroneous references
to "subaccount".
3. "Summary of Expenses" Section
a. Round all percentages to the nearest hundredth;
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RESPONSE: We have rounded the percentages in this section to the nearest
hundredth and have added a footnote where actual charges are lower to so
indicate.
b. Correct redundancy of the information related to the transfer charge in
the table.
RESPONSE: We have revised the table accordingly.
c. Show the maximum charge before the current charge in the charges for
optional benefits.
RESPONSE: While we do not believe the original placement of the current
charge obscured or impeded the understanding or disclosure of the
maximum charge, we have revised the presentation to show the maximum
charge before the current charge.
d. Delete the word "total" from the line item that currently reads "Net
Total Annual Fund Operating Expenses".
RESPONSE: We have made the requested change.
e. Confirm that the language preceding example 1 is correct.
RESPONSE: Under the contract, surrender charges may apply if amounts are
surrendered or are annuitized before the maturity date. We have
confirmed that the language preceding example 1 is accurate and will
continue to evaluate whether the words "or annuitize" should be added to
the language preceding example 2 for clarification. If we determine that
such clarification is necessary, we will make this clarification in a
subsequent filing.
f. Regarding footnote 5, describe what "other amounts" are and describe the
relationship these amounts would have, if any, if elected at issue.
RESPONSE: We have added responsive disclosure to footnote 5.
4. a. Page 16. Note the redundancy of the last bullet prior to the section
entitled "Withdrawals".
RESPONSE: We do not believe the disclosure is entirely redundant since
the preceding bullet relates to the required use of an asset allocation
program with certain guaranteed benefits. However, we have noted this
section for potential revision in the future.
b. To achieve consistency with the third bullet, note the Guaranteed
Minimum Accumulation Benefit Fee in place for contracts issued before
October 11, 2004.
RESPONSE: We have added a footnote to the current fees for the
guaranteed benefits in the table of "Optional Benefits Fees" directing
the reader to the Annuity Operations Division for information about
rates in effect in prior periods.
c. Clarify that for states that require a refund of all purchase payments
upon exercise of the right to return, contract owners will receive a
return of the greater of purchase payments or contract value.
RESPONSE: We have added disclosure to the section entitled "Free Look
Period" on page 19 to indicate that, if we utilize the Temporary Money
Market Amendment with a contract issued in a state that requires return
of premium upon a contract owner's exercise of the right to cancel, we
will return the greater of premiums paid and contract value. We
respectfully note that we are not currently utilizing the Temporary
Money Market Amendment but need to preserve
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our ability to do so should market conditions warrant. We further
respectfully note that applying this refund calculation to any "free
look" in a return of premium state would require unanticipated changes
to our administrative systems and refiling of contract forms in the
applicable states.
5. "Financial Highlights" section, explain the basis for providing only two
sets of condensed financial information.
RESPONSE: Death Benefit Option 3 under the contract was discontinued for
new sales effective May 1, 2007, and that fact is communicated in
several places in the prospectus. Additionally, there were no sales of
this death benefit option prior to its discontinuation.
6. Coordinate the disclosure on page 19, "Financial Statements", with that
included on page 21 regarding the availability of the general account
assets to support the obligations of Phoenix Life Insurance Company.
RESPONSE: We respectfully decline to incorporate this comment as we
believe each disclosure is appropriate and that they are not in
conflict. The disclosure contained in the "Financial Statements" section
relates to the relevance of the financial statements to the registration
statement for the variable product itself; whereas the disclosure in the
section entitled "Phoenix and the Separate Account" addresses the
relationship of the general account to the obligations of Phoenix Life
Insurance Company with respect to all insurance and annuity contracts
sold by the Company.
7. Add bold face to the last sentence of the section entitled "The Variable
Investment Options" on page 22.
RESPONSE: We have made the requested change.
8. a. Note in the "Summary" section that withdrawals from the Guaranteed
Interest Account must be taken over a four-year period.
RESPONSE: We have added the requested disclosure.
b. Disclose the current maximum GIA percentage applicable to contracts
issued after March 31, 2003.
RESPONSE: We respectfully decline to add the current maximum percentage
as we believe the existing disclosure is materially accurate and
complete. The existing disclosure specifies the maximum GIA percentage
that could be applied in any case and also notes that the applicable
percentage is contained in the contract. We have added disclosure to the
sixth bullet in the "Allocation of Premiums and Contract Value" portion
of the "Contract Summary" to indicate that the applicable maximum GIA
percentage is found on a contract's specifications page.
9. a. Page 25, "Deductions and Charges." Please clarify the maximum
"Guaranteed Minimum Income Benefit" fee for riders issued at various
times.
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RESPONSE: We have validated that the existing disclosure indicating that
the maximum fee for the rider is 1.00% is accurate regardless of when
the rider was issued. We are considering adjusting this disclosure in a
future post-effective amendment to simplify the presentation of rates
that had been in effect in prior periods.
b. Please add disclosure regarding the impact of the optional reset on the
fee for the GMWB.
RESPONSE: We will adjust this disclosure to address this comment in a
future post-effective amendment to this registration statement.
c. Page 27, "Mortality and Expense Risk Fee." Expand the disclosure in the
last paragraph to explain the basis for the disclosure.
RESPONSE: We will adjust this disclosure to address this comment in a
future post-effective amendment to this registration statement.
d. Pages 27, 28. Reconcile information and disclose whether amounts
deducted from contract value to cover surrender charges are themselves
subject to a surrender charge.
RESPONSE: We will adjust this disclosure to address this comment in a
future post-effective amendment to this registration statement.
e. Add disclosure of the potential for premium tax to the "Summary of
Expenses" section.
RESPONSE: We have added a footnote to the "deferred surrender charge"
description contained in the "Summary of Expenses" section highlighting
the potential for imposition of premium tax upon surrender.
10. a. Page 32, Please add the phrase "except as described below" to the first
sentence of the first full paragraph.
RESPONSE: We have added the disclosure.
b. Page 33, "Program Required for GMAB and GMWB". Given the deletion of the
first full sentence on page 33, clarify whether or when time
restrictions apply to making changes among or within a program.
RESPONSE: We have deleted conflicting disclosure that had appeared on
page 37 so the disclosure is now clear that there are no time
restrictions affecting a contract owner's ability to select or make an
allowable change within an asset allocation program.
c. Page 33, "Phoenix-Ibbotson Strategic Asset Allocation". Revise the
disclosure regarding the effect of the change to the rebalancing program
that was effective on September 10, 2007.
RESPONSE: We have clarified the disclosure.
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d. Page 34. Regarding the "Asset Rebalancing" feature, please disclose
whether there is a charge associated for this feature.
RESPONSE: We have added disclosure indicating that there is no charge
for this feature.
e. (i) Clarify the last paragraph on page 35.
RESPONSE: We have clarified the disclosure regarding the effect of an
early termination of an Enhanced Dollar Cost Averaging Program on the
interest rate credited during the program's duration.
e. (ii) Clarify the similarities and differences between the DCA and the
Enhanced DCA programs.
RESPONSE: We have added clarifying disclosure explaining the
similarities and differences between these programs.
f. Delete all references to MVA.
RESPONSE: We have deleted all references to MVA.
11. "Optional Riders". Consider adding examples showing how the formulas
work.
RESPONSE: Due to the short timeframe from receipt of this comment to the
date on which we were required to file our annual updating amendment we
were not able to develop arithmetic examples for use in the prospectus.
We will consider adding such examples in a future post-effective
amendment.
12. Page 37, "Guaranteed Minimum Accumulation Benefit". Please reconcile the
second to last sentence of the first paragraph with the third paragraph.
RESPONSE: We do not believe the disclosures cited are in conflict.
Currently, the Guaranteed Minimum Accumulation Benefit rider is
available only at contract issue. However, we have designed certain
disclosure to minimize the amount of disclosure revision necessary in
the event we make benefits available on a post-issue basis.
13. a. Page 39. Note the circular definition of "guaranteed annuitization
value" and also confirm whether the guaranteed annuitization value is
accumulated at an annual effective rate for people over age 80.
RESPONSE: We have noted the comment with respect to the definition of
"guaranteed annuitization value" and will consider revising this
definition in a future post-effective amendment. The annual effective
rate is set to zero on the contract anniversary following the older
annuitant's age 80.
b. Page 41, "GMIB Annuity Payment Options". Please confirm to whom
remaining annuity payments will be paid under Options A and F if the
annuitant or joint annuitant dies before the end of the period certain.
RESPONSE: We have clarified that remaining annuity payments remaining
under Options A and F will be paid to the beneficiary.
c. Note that any material variations among the various jurisdictions where
the contracts are offered and sold should be disclosed. For example,
note where certain riders are not effective.
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RESPONSE: We have validated that all currently offered optional benefit
riders are available in all states in which the contract is offered for
sale.
14. a. Page 45, "Roll-Up". Given the filing's effective date, revise the date
shown in the disclosure regarding the "roll-up".
RESPONSE: We have revised this disclosure to clarify that the applicable
roll-up percentage is determined based on a contract's issue date.
b. With respect to "Version I" of the GMWB, disclose the interaction
between the surrender charge and withdrawals when the rider is in effect
for a contract.
RESPONSE: We have added disclosure in "Charges and Deductions" to
indicate how the rider fee is deducted and the impact of surrendering
the contract on a date other than the contract anniversary on the
deduction of the rider fee.
c. Page 49, under "Contract Value reduced to Zero", clarify the unit of
measurement that results from the formula to determine the benefit
payment duration.
RESPONSE: We have noted this comment and will attempt to revise this
disclosure in a future post-effective amendment to this registration.
d. Pages 46 and 49, sections entitled "Contract Value Reduced to Zero".
Please explicitly disclose which is a return of principal GMWB and which
is a lifetime GMWB.
RESPONSE: We have added disclosure to the introduction of the New York
GMWB 5/New York GMWB 7 to indicate that it is not a "lifetime" GMWB.
e. Page 47. The prospectus lists the current figure for benefit amount
percentage. Revise the prospectus to clarify the circumstances under
which the percentage could change and the scope of the change. Do not
use capitalized terms until they are defined.
RESPONSE: We have noted these comments and will attempt to revise this
disclosure in a future post-effective amendment to this registration.
15. Confirm that the disclosure in the "Legal Proceedings" and "Federal
Income Taxes" sections are current.
RESPONSE: We have revised those disclosures as part of our annual update
process. The revised disclosures are included in Post-Effective
Amendment No. 17 to the registration statement.
16. Provide Tandy Representations.
The Registrant acknowledges that:
. the Registrant is responsible for the adequacy and accuracy of the
disclosure in its filings;
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. staff comments or changes to disclosure in response to staff comments
in the filings reviewed by the staff do not foreclose the Commission
from taking any action with respect to the filing; and
. the Registrant may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
Please feel free to contact me with any questions.
Sincerely,
/s/ Mary K. Johnson
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Mary K. (Kate) Johnson
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