W. THOMAS CONNER
DIRECT LINE: 203.383.0590
Internet: thomas.conner@sablaw.com
May 19, 2008
VIA E-MAIL AND EDGAR CORRESPONDENCE SUBMISSION
----------------------------------------------
Mr. Michael L. Kosoff
Division of Investment Management
Office of Insurance Products
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
RE: INITIAL REGISTRATION STATEMENTS ON FORM N-4 FOR METLIFE INVESTORS USA
INSURANCE COMPANY, METLIFE INVESTORS USA SEPARATE ACCOUNT A, FIRST METLIFE
INVESTORS INSURANCE COMPANY, AND FIRST METLIFE INVESTORS VARIABLE ANNUITY
ACCOUNT ONE (FILE NOS. 333-148869, 333-148873, 333-148872, 333-148876,
----------------------------------------------------
333-148870, AND 333-148874)
---------------------------
Dear Mr. Kosoff:
On behalf of MetLife Investors USA Insurance Company ("MLI USA"), First
MetLife Investors Insurance Company ("FMLI," and together with MLI USA, the
"Companies") and their respective separate accounts, MetLife Investors USA
Separate Account A and First MetLife Investors Variable Annuity Account One, we
are responding to the comments that you provided to us on March 24, 2008 in
connection with the above-referenced initial registration statements filed on
January 25, 2008. Each of the Staff's comments is set forth below, followed by
the Companies' response. To the extent that a responce indicates that the
companies propose revised disclosure, the printers' proofs of the revised
prospectuses attached hereto reflect those revisions.
COMMENTS APPLICABLE TO EACH INITIAL REGISTRATION STATEMENT (FILE NOS.
---------------------------------------------------------------------
333-148869, 333-148873, 333-148872, 333-148876, 333-148870, AND 333-148874
--------------------------------------------------------------------------
(1) HIGHLIGHTS (P.5)
----------------
COMMENT: (a) Please confirm supplementally that the statement that your
contract is controlling is not intended to prevent a contract owner from
relying on any statement made within the registration statement. In
addition, please make it clear that the variations are solely due to state
law and that the prospectus discloses all material features. (METLIFE
INVESTORS USA ONLY)
Michael Kosoff
May 16, 2008
Page 2
RESPONSE: (a) On page 5, MLI USA has revised the "State Variations" section
of the prospectuses in accordance with the revisions made in response to
Staff comments on this same section in connection with the recent annual
update of MLI USA's prospectuses, including deleting the statement
regarding the contract and endorsements controlling and clarifying that the
variations are solely due to state law. MLI USA also confirms the
representation requested by the Staff in their previous comments that all
material features of the contract are described in the prospectus.
COMMENT: (b) Please consider adding a brief description of the death
benefit and optional benefit riders to the "Highlights" section (including
a comment about any consequences of excess withdrawals and any investment
restrictions imposed).
RESPONSE: (b) The Companies have considered adding to the "Highlights"
section a brief description of the various optional riders. The Companies
have concluded that this section would not be the best place to introduce
the riders, because this section is intended to provide an overview of the
fundamental nature and structure of a variable annuity contract, and
therefore simply notes that the benefits are available. The Companies do
believe, however, that there is value to a brief summary of the various
benefits, and accordingly, when they recently amended their prospectuses in
connection with annual updates, they expanded the sections of the
prospectus discussing the rider to include introductory text. The Companies
concluded that this proximity is most appropriate given that complete and
detailed disclosure is necessary for contract owners to understand the
riders.
(2) FEE TABLE (P.8)
---------------
COMMENT: (a) Please clarify that the "Total Separate Account Annual
Expenses including the Highest Charge for Optional Death Benefit" does not
include the Enhanced Death Benefit, whose fee is based off some criteria
other than separate account value. (METLIFE INVESTORS USA ONLY).
RESPONSE: (a) On page 8 of the prospectus, the Fee Table lists the four
death benefit rider expenses that are included in the "Total Separate
Account Annual Expenses including the Highest Charge for Optional Death
Benefit" calculation and the Enhanced Death Benefit rider expense is not
listed. In addition, Note 3 to the Fee Table provides a cross reference to
the section of the Fee Table that discloses the Enhanced Death Benefit
rider expense. Thus, MLI USA believes that it is clear that the "Total
Separate Account Annual Expenses including the Highest Charge for Optional
Death Benefit" does not include the Enhanced Death Benefit rider expense.
COMMENT: (b) Please list the charges for a GWB that are effective upon
Automatic Step-Up before you list the charges that apply to that GWB before
the Step-Up.
RESPONSE: (b) The Companies believe that it is most logical to present the
charges for a GWB that apply prior to a Step-Up before the charges for a
GWB that are effective upon Automatic Step-Up because this presentation is
indicative of the order in which the charges are likely to occur.
Specifically, the charge for the GWB prior to a Step-Up is
Michael Kosoff
May 16, 2008
Page 3
the current charge that a contract owner will pay for the GWB, while the
charge for a GWB that is effective upon Automatic Step-Up is the maximum
charge that a contract owner will pay only in the event of a Step-Up and
only if the charge applicable to contract purchases at the time of the
Step-Up is higher than the current GWB charge.
COMMENT: (c) Please note any impermissible rider combinations in the Fee
Table.
RESPONSE: (c) The Companies have revised the disclosure to note any
impermissible rider combinations in the Fee Table.
(3) TOTAL ANNUAL FUND OPERATING EXPENSES (PP. 10-11)
------------------------------------------------
COMMENT: (a) In the narrative preceding Total Annual Fund Operating
Expenses, if applicable, please disclose that some funds may also impose a
short-term redemption fee.
RESPONSE: (a) To the Companies' knowledge, none of the Underlying Funds
impose a short-term redemption fee.
COMMENT: (b) Please confirm supplementally that a range of portfolio
expenses reflect gross fees.
RESPONSE: (b) The Companies confirm that the range of portfolio expenses
reflects gross fees.
COMMENT: (c) Please note that contractual waivers and reimbursements ending
in less than one year from the effective date of the prospectuses cannot be
reflected in the fee tables.
RESPONSE: (c) When updating the expenses of the Underlying Funds, the
Companies will ensure that the waivers and reimbursements reflected in the
Fee Table are within one year of the effective date of the prospectus.
COMMENT: (d) Please be sure to include footnotes to the individual fund fee
tables describing the contractual fee waivers or expenses reimbursements
listed in the individual fund fee tables.
RESPONSE: (d) The Companies will include footnotes to the individual fund
fee tables describing the contractual fee waivers or expense reimbursements
listed in the individual fee tables.
(4) TERMINATION FOR LOW ACCOUNT VALUE (P.15)
----------------------------------------
COMMENT: Please explicitly state that the guaranteed withdrawal benefits
are not subject to this termination.
Michael Kosoff
May 16, 2008
Page 4
RESPONSE: The Companies will provide the requested clarification; the
Companies believe the most appropriate place for the disclosure is in the
"Termination of the Lifetime Withdrawal Guarantee II Rider" section of the
prospectuses in the third bullet which has been revised as follows:
"(3) the date there are insufficient funds to deduct the Lifetime
Withdrawal Guarantee II rider charge from the account value and
thereby your contract is terminated (you are still eligible to receive
either the Remaining Guaranteed Withdrawal Amount or lifetime
payments, provided the provisions and conditions of the rider have
been met; however, you will have no other benefits under the
contract)"
(5) INVESTMENT ALLOCATION RESTRICTIONS FOR CERTAIN RIDERS (P.16)
------------------------------------------------------------
COMMENT: Please confirm supplementally that account value changes due to
subaccount performance between rebalancing will not violate the allocation
restrictions.
RESPONSE: The Companies confirm that account value changes due to
subaccount performance between rebalancing will not violate the allocation
restrictions.
(6) FREE LOOK (P.17)
----------------
COMMENT: Please clarify that in states that require return of premium you
will refund the greater of contract value or net premiums.
RESPONSE: The Companies respectfully decline to add such disclosure because
it would require a change in the Companies' current policies regarding free
look rights that would be costly and burdensome and is not necessary for
investor protection. Under the Companies' existing procedures, in states
that require insurers to return premium payments during the free look
period, the Companies refund premium payments even if the surrender value
is higher (which, of course, would be extremely rare). (In this regard, we
note that the Companies are not "forcing" initial premium payments to a
money market subaccount during the free look period so the Companies are
not subject to the conditions of certain "no action" letters that request
that upon exercise of the free look right, contract owners will receive
the greater of contract value and premium payments. SEE MONY AMERICA
VARIABLE ACCOUNT A, SEC No-Action Letter (pub. avail. Oct. 26, 1988); LBVIP
VARIABLE ANNUITY ACCOUNT I, SEC No-Action Letter (pub. avail. Jan. 22,
1988); and FIDELITY INVESTMENTS VARIABLE ANNUITY ACCOUNT I, SEC No-Action
Letter (pub. avail. Dec. 8, 1987)). While erstwhile contract owners clearly
should be entitled to their contract's surrender value at any time after
the free look period, the Companies believe it is entirely appropriate to
refund premium payments rather than giving the surrender value to a
contract owner who has chosen to end his or her relationship with the
Companies during the free look period.
Michael Kosoff
May 16, 2008
Page 5
Moreover, the Companies' administrative systems are not currently capable
of returning the greater of purchase payments or surrender value in states
that only require return of purchase payments. Accordingly, it would be a
significant administrative and financial burden for the Companies' to
change their systems. Furthermore, the Companies note that Rule 6e-3(T)
under the Investment Company Act of 1940 (the "1940 Act") provides that an
insurer is exempt from Section 27(f), so long as the insurer permits a
contract owner to withdraw from the contract during a specified time period
(the "free look" period) and the insurer refunds the contract owner cash
value plus charges, provided that "...if state law or the contract so
-------------
require, the redeeming contract [owner] shall receive a refund of all
payments made for such contract." Although Rule 6e-3(T) is not applicable
in this situation, the Companies believe the fact that there is no "greater
of" standard apparent in this rule is an indication that the Commission did
not determine it is necessary to provide a "greater of" free look right to
variable contract owners generally.
(7) ACCUMULATION UNITS (P.17)
-------------------------
COMMENT: The prospectus notes in clause two that an element in the
determination of Accumulation Unit Value is "1 minus the Separate Account
product charges." Since those charges are a dollar amount, please clarify
how those charges are converted for purposes of this calculation.
RESPONSE: The Separate Account product charges are reflected in the Fee
Table in percentage terms. These percentages are used to determine the
Accumulation Unit Value. Accordingly, the Companies believe that the
prespectus makes it clear that the term "Separate Account product charges"
refers to percentage amounts of the charges.
(8) TRANSFER (PP. 19-20)
--------------------
COMMENT: (a) Please define the term "transfers" (i.e., Are all allocations
made in a single valuation day considered a single transfer?)
RESPONSE: (a) The Companies believe that transfers are adequately described
in the "Transfers" section of the prospectuses. The Companies currently
disclose in the "Transfers" section that all transfers made on the same
business day will be treated as one transfer. In addition, contract owners
seeking to make transfers will receive additional information about the
nature of the transfer on the transfer form prior to making the transfer
(i.e., whether the transfer amount is in dollars or in a percentage).
COMMENT: (b) Please include a warning stating that as a result of the 25%
restriction on transfers out of the fixed account, it may take a number of
years to effectively move all of one's account value from the fixed account
to the variable investment options. (METLIFE INVESTORS USA ONLY)
RESPONSE: (b) MLI USA believes that the disclosure stating that there
is a 25% restriction on transfers out of the fixed account is sufficient to
warn contract owners that it could take a maximum of 5 years to effectively
move account value out of the fixed
Michael Kosoff
May 16, 2008
Page 6
account to the variable investment options. Accordingly, MLI USA does not
believe it is necessary to revise the disclosure.
COMMENT: (c) Please confirm that any suspension of the transfer privilege
will take place pursuant to Section 22(e) of the Investment Company Act of
1940.
RESPONSE: (c) The Companies confirm that any suspension of transfer
privilege will take place pursuant to Section 22(e) of the Investment
Company Act of 1940.
COMMENT: (d) Please explain where the contractholders funds are placed when
transfers are broken down into redemption and purchase requests, and
whether any interest is accrued between the time of redemption and
purchase.
RESPONSE: (d) In the event of a time of drastic economic or market
conditions, to the extent there were to be a lag in time between (i) the
date a source investment portfolio next determined accumulation unit
value ("AUV"), and (ii) the date a Company received redemption proceeds
from the source portfolio, the proceeds would remain with the source
portfolio until they were transmitted to the Company. As soon as the
Company received the proceeds, it would effectuate the purchase of the new
investment portfolio at the next determined AUV and the proceeds would be
submitted on that date to the portfolio. The source proceeds would not
"sit" at the Company in this type of situation.
(9) EXPENSES (PP. 25-29)
--------------------
COMMENT: (a) With regard to the death benefit charge and withdrawal charge,
please briefly describe what is provided in consideration of the charges as
per Form N-4, Item 6(a).
RESPONSE: (a) The Companies have revised the prospectuses to add the
following disclosure to the "Death Benefit Rider Charges" section: "If you
select a death benefit rider, we will deduct a charge that compensates us
for the costs and risks we assume in providing the benefit." In addition,
the Companies have revised the prospectuses to add the following disclosure
under the "Withdrawal Charge" section: "We impose a withdrawal charge to
reimburse us for contract sales expense, including commissions and other
distribution, promotion, and acquisition expenses."
COMMENT: (b) With regard to the death benefit rider charges, please
reconcile the language that states the charge is assessed by canceling
accumulation units with the language in the Accumulation Units section (p.
17) which implies that the charge is assessed by reducing accumulation unit
value.
RESPONSE: (b) In the "Death Benefit Rider Charges" section, the disclosure
stating that the charge is assessed by canceling accumulation units only
applies to the Enhanced Death Benefit rider. It does not apply to the
Principal Protection Death Benefit, the Annual Step-Up Death Benefit, the
Compounded-Plus Death Benefit, or the Additional Death Benefit--Earnings
Preservation Benefit riders. The Companies believe that this
Michael Kosoff
May 16, 2008
Page 7
distinction is clear in the "Death Benefit Rider Charges" section. To
clarify this distinction in the "Accumulation Units" section, the Companies
have revised the second numerical bullet as follows:
"(2) multiplying it by one minus the Separate Account product charges
(including any rider charge for the Principal Protection Death
Benefit, Annual Step-Up Death Benefit, the Compounded-Plus Death
Benefit, and/or the Additional Death Benefit--Earnings Preservation
Benefit) for each day since the last business day and any charges for
taxes."
COMMENT: (c) The prospectus states on page 26 that you "may" reset the LWG
II charge upon reset. Please clarify the circumstances under which you
would not reset the rate and whether the rate reset would occur even if the
investor refuses the Step-Up.
RESPONSE: (c) The Companies would not reset the LWG II charge if the charge
at the time of the step-up was the same as the charge that the Companies
were currently charging new contract owners for the same rider. The
Companies also would also not reset the LWG II charge if a contract owner
refuses the step-up in writing.
(10) SUSPENSION OF PAYMENTS OR TRANSFER (P.32)
-----------------------------------------
COMMENT: Please explain your legal basis for refusing requests for
withdrawals in furtherance of anti-money laundering and counter terrorism,
in light of section 22(e) of the Investment Company Act of 1940.
RESPONSE: The Companies believe that they have a legal basis for refusing
requests for withdrawals in furtherance of anti-money laundering and
counter terrorism. Specifically, there have been a number of economic
sanctions programs administered by the Department of Treasury's Office of
Foreign Assets Control ("OFAC") that provide for the blocking of assets
owned by or held for the benefit of certain foreign countries and
designated individuals, such as terrorists and narcotics traffickers
("Designated Persons"). For example, the OFAC regulations implementing
Executive Order 13224 (Sept. 23, 2001) ("Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten To Commit, or Support
Terrorism") provide: "Unless otherwise authorized by this part or by a
specific license expressly referring to this section, any dealing in any
security (or evidence thereof) held within the possession or control of a
U.S. person and either registered or inscribed in the name of or known to
be held for the benefit of [certain Designated Persons] is prohibited." 31
CFR (S)594.210(b).
Consequently, while this regulation would prohibit an insurance company
from opening an account for a Designated Person, it would also on its face
prohibit an insurance company from providing redemption proceeds to a
person who, for instance, became a Designated Person after his or her
acquisition of the securities or where it became known to the insurance
company after the securities were issued that they were being held for the
benefit of a Designated Person. The Companies are not aware of any
regulation or
Michael Kosoff
May 16, 2008
Page 8
interpretive position stating specifically that these and similar OFAC
regulations preempt Section 22(e) of the Investment Company Act of 1940.
However, it would appear that the national security purposes of these
regulations would be compromised if they did not preempt, as far as
Designated Persons are concerned, other federal and state laws and
regulations such as Section 22(e) that provide generally for the right to
redeem or sell certain assets. In this regard, a "Frequently Asked
Question" or "FAQ" on OFAC's website addressing State insurance statutes
that limit an insurer's ability to withhold claim payments states that
"OFAC's regulations under the Trading with the Enemy Act and the
International Emergency Economic Powers Act are based on Presidential
declarations of national emergency and preempt state insurance
regulations."
(11) LIVING BENEFITS (P.32)
----------------------
COMMENT: Please briefly explain the differences between the two living
benefit riders and describe, in general terms, which one might be
preferable over the other.
RESPONSE: The Companies have revised the prospectuses to replace the second
paragraph in the "Guaranteed Withdrawal Benefits" section with the
following: "The Principal Guarantee rider is designed to guarantee that at
least the entire amount of purchase payments you make will be returned to
you through a series of withdrawals without annuitizing, regardless of
investment performance, as long as withdrawals in any contract year do not
exceed the maximum amount allowed under the rider. With the Lifetime
Withdrawal Guarantee II rider, you get the same benefits, but in addition,
if you make your first withdrawal on or after the date you reach age 59
1/2, you are guaranteed income without annuitizing for your life (and the
life of your spouse, if the Joint Life version of the rider was elected),
even after the entire amount of purchase payments has been returned." The
Companies believe that this revised disclosure will assist contract
owners to determine which rider might be preferable.
(12) LIFETIME WITHDRAWAL GUARANTEE II (PP. 34-38)
--------------------------------------------
COMMENT: (a) Please place in bold the effects of excess withdrawals.
RESPONSE: (a) The Companies will bold the disclosure that discusses the
effects of excess withdrawals.
COMMENT: (b) With regard to the annual benefit payment, the prospectus
states that one may be able to get a higher income amount by annuitizing
your contract. If annuitizing may result on a lower income amount, please
also warn of that fact.
RESPONSE: (b) The Companies respectfully decline to include the alternative
risk disclosure regarding annuitization because the possibility that
annuitizing may result in a lower income amount than the annual benefit
payment is not a risk associated with the Lifetime Withdrawal Guarantee II
rider.
Michael Kosoff
May 16, 2008
Page 9
COMMENT: (c) With respect to your statement that you do not include
withdrawal charges for the purpose of calculating whether there is an
excess withdrawal, please disclose how (or whether) you consider withdrawal
charges at all in making the GWB calculations.
RESPONSE: (c) If a withdrawal reduces the Total Guaranteed Withdrawal
Amount and/or the Remaining Guaranteed Withdrawal Amount, then the
applicable withdrawal charge will also be deducted from these amounts. If
the withdrawal reduces these amounts in the same proportion that the
withdrawal reduces account value, then the withdrawal charge will also
reduce these amounts in the same proportion that the withdrawal charge
reduces account value. Similarly, if the withdrawal reduces these amounts
on a dollar-for-dollar basis, then the withdrawal charge will also reduce
these amounts on a dollar-for-dollar basis. To clarify these points, the
Companies have revised the prospectus to add the parenthetical "(including
any applicable withdrawal charge)" in the appropriate places in the "Total
Guaranteed Withdrawal Amount" section and the "Remaining Guaranteed
Withdrawal Amount" section.
COMMENT: (d) With regard to the Automatic Annual Step-up, please explicitly
state whether the step-up is taken before or after the Compounding.
RESPONSE: (d) The Companies disclosed earlier in the prospectus that the
comparison of account value to the Total Guaranteed Withdrawal Amount takes
place after compounding, under the "Guaranteed Withdrawal Benefit - Rider
Charge" subheading under "Expenses." However, to further clarify, the
Companies have also revised the prospectuses to add the parenthetical
"(after compounding)" immediately following the term "Total Guaranteed
Withdrawal Amount" in the first sentence under the "Automatic Annual
Step-Up" subheading.
COMMENT: (e) Please consider moving the Investment Allocation Restrictions
subsection to the beginning of the section describing the rider.
RESPONSE: (e) The Companies believe that the "Investment Allocation
Restrictions" subsection appropriately appears towards the end of the
"Lifetime Withdrawal Guarantee II Rider" section because this is the most
logical and straightforward way to present the disclosure for this rider.
In this regard, the Companies believe that a detailed description of the
rider, which discusses the risks and benefits of the rider, should appear
before the investment allocation restrictions.
COMMENT: (f) Please confirm in the Additional Information subsection, that
the lump sum payment is reduced by partial withdrawals on a
dollar-for-dollar basis.
RESPONSE: (f) The Companies confirm that the lump sum payment is reduced by
partial withdrawal on a dollar-for-dollar basis. To clarify, the Companies
revised the prospectuses to add the parenthetical "(deducted on a
dollar-for-dollar basis)" immediately following "...payments less any
partial withdrawals" at the end of the third sentence under the "Additional
Information" subsection.
Michael Kosoff
May 16, 2008
Page 10
COMMENT: (g) Please clarify the extent to which the other contract benefits
remain if the rider terminates for insufficient value.
RESPONSE: (g) The Companies have confirmed that in the event the rider
terminates for insufficient value, the contract is also terminated and
therefore the contract owner no longer has any rights under the contract.
To further clarify, the Companies have revised the third numerical bullet
in the "Termination of the Lifetime Withdrawal Guarantee II Rider" section
of the prospectuses to read as follows:
"(3) the date there are insufficient funds to deduct the Lifetime
Withdrawal Guarantee II rider charge from the account value and
thereby your contract is terminated (you are still eligible to receive
either the Remaining Guaranteed Withdrawal Amount or lifetime
payments, provided the provisions and conditions of the rider have
been met; however, you will have no other benefits under the
contract)"
COMMENT: (h) The prospectus states that the Remaining Withdrawal Amount may
be selected as a death benefit and would be paid "instead of the
contractual death benefit...." Please clarify whether election of this
amount as the death benefit terminates any further obligation to pay for
other death benefits.
RESPONSE: (h) The Companies confirm that under the Lifetime Withdrawal
Guarantee II rider, once a contract owner elects to receive the Remaining
Withdrawal Amount as a death benefit instead of the contractual death
benefit, the contract owner is no longer required to pay the contractual
death benefit charge. To further clarify, the Companies have revised the
"Additional Information" subsection of the prospectuses to read as follows:
"This death benefit will be paid instead of the applicable contractual
death benefit or the additional death benefit amount calculated under the
LWG II as described above and there is no longer an obligation to pay the
charge for the contractual death benefit." In addition, the Companies
confirm that under the Principal Guarantee rider, once a beneficiary elects
to receive a payout of the Benefit Base as a death benefit instead of the
contractual death benefit, there is no longer an obligation to pay the
contractual death benefit charge. To further clarify, the Companies have
revised the "Additional Information" subsection of the prospectuses to read
as follows: "If the contract owner or joint owner (or the annuitant if the
owner is a non-natural person) should die while the Principal Guarantee
rider is in effect, your beneficiary may elect to receive a payout of the
Benefit Base instead of the applicable contractual death benefit as
described above and there is no longer an obligation to pay the charge for
the contractual death benefit."
COMMENT: (i) Please note that we will need to re-review this section once
the examples are included.
RESPONSE: (i) The Companies have noted that the Staff will need to
re-review the Lifetime Withdrawal Guarantee II section once the examples
are included. The
Michael Kosoff
May 16, 2008
Page 11
Companies have provided the Lifetime Withdrawal Guarantee II rider examples
in the prospectuses.
13. PRINCIPAL GUARANTEE (PP. 38-41)
-------------------------------
COMMENT: (a) Please explicitly state in bold that this guarantee does not
guarantee that one can withdraw 100% of their principal out of the contract
in a lump sum.
RESPONSE: (a) The Companies confirm that the requested disclosure is
already provided in the "Managing Withdrawals" subsection under the "Facts
about Guaranteed Withdrawal Benefit Riders" subsection. The Companies have
bolded this disclosure so that it will be highlighted for contract owners.
COMMENT: (b) With regard to the Benefit Base calculation, please revise the
third bullet point to the extent possible in order to make it easier to
read.
RESPONSE: (b) The Companies have revised the third bullet as follows:
. Less the amount of any withdrawals. In the following two situations we
will further reduce the Benefit Base by an amount equal to the
difference between the Benefit Base after the decrease for the
withdrawal and your account value after the decrease for the
withdrawal.
. If a withdrawal from your contract is not payable to the contract
owner or contract owner's bank account (or to the annuitant or
annuitant's bank account, if the owner is a non-natural person),
or
. If a withdrawal from your contract results in cumulative
withdrawals (including withdrawal charges) for the current
contract year exceeding the Annual Benefit Payment and the
resulting Benefit Base exceeds the account value.
COMMENT: (c) Please confirm supplementally that the Optional Reset does not
have any effect on the withdrawal rate.
RESPONSE: (c) The Companies confirm that the Optional Reset does not have
any effect on the withdrawal rate.
COMMENT: (d) Please note that we will need to re-review this section once
the examples are included.
RESPONSE: (d) The Companies have noted that the Staff will need to
re-review the Principal Guarantee section once the examples are included.
The Companies have provided the Principal Guarantee examples in the
prospectuses.
Michael Kosoff
May 16, 2008
Page 12
14. DEATH BENEFIT (PP. 42-47)
-------------------------
COMMENT: (a) Please include examples of how the death benefits operate. If
done through an appendix, please include cross-references where
appropriate.
RESPONSE: (a) The Companies will provide examples of how the Enhanced Death
Benefit operates in an appendix and will include a cross-reference in this
section to the appropriate appendix within the prospectuses. The Companies
have concluded that it is not necessary to provide examples for the other
death benefits, given their relatively straightforward nature.
COMMENT: (b) Please consider moving the Enhanced Death Benefit Description
after the description of the other optional death benefits, since this
death benefit is unique from the others in terms of the charge structure.
(METLIFE INVESTORS USA ONLY)
RESPONSE: (b) MLI USA has considered the Staff's request, and has concluded
that the Enhanced Death Benefit description is most appropriately placed in
its current location. MLI USA believes that the prospectuses adequately
explain the charge structure of the Enhanced Death Benefit and therefore,
contract owners will not be confused between the Enhanced Death Benefit
rider's charge structure and the charge structure of the other death
benefit riders.
COMMENT: (c) With regard to the Enhanced Death Benefit, there is language
stating the death benefit will not be less than the highest account value
on any anniversary. Please include disclosure stating that this is only
true if the Automatic Annual Step-Up is in place.
RESPONSE: (c) The statement as it stands is correct. The death benefit will
never be less than the Highest Account Value on any anniversary for the
following reason. Under the Enhanced Death Benefit rider, the death benefit
base is defined as the greater of the Highest Account Value on any
anniversary or as purchase payments adjusted to reflect the Annual Increase
Amount. If on a particular contract anniversary, the account value is
higher than the Annual Increase Amount, and if on that same anniversary,
the Automatic Annual Step-Up was elected, than the Annual Increase Amount
would be increased to equal that of the account value. However, even if the
Automatic Annual Step-Up was not elected, the death benefit would still
never be less than the Highest Account Value on any anniversary.
COMMENT: (d) With regard to the Enhanced Death Benefit Rider, please move
the subsection regarding investment restriction to the beginning of the
section describing this rider. Alternatively, please mention the investment
restrictions at the beginning of the section describing this death benefit.
(METLIFE INVESTORS USA ONLY)
RESPONSE: (d) MLI USA believes that the "Investment Allocation
Restrictions" subsection appropriately appears towards the end of the
"Optional Death Benefit--Enhanced Death Benefit" section because this is
the most logical and straightforward way to present the disclosure for this
rider. MLI USA believes that a detailed description
Michael Kosoff
May 16, 2008
Page 13
of the rider, which discusses the risks and benefits of the rider, should
appear before the investment allocation restrictions.
COMMENT: (e) With regard to the Compounded-Plus, please consider renaming
the second prong something other then "enhanced death benefit" to avoid any
confusion with another rider offered under this contract. (METLIFE
INVESTORS USA ONLY
RESPONSE: (e) MLI USA has revised the disclosure in the second prong to
remove references to the "enhanced death benefit."
COMMENT: (f) Please make it clear which death benefit riders can be held at
the same time as the Earnings Preservation Benefit. (METLIFE INVESTORS USA
ONLY)
RESPONSE: (f) The Earnings Preservation Benefit can be held at the same
time as any other rider and MLI USA believes that disclosure in the
prospectuses is consistent with this fact.
15. FEDERAL INCOME TAX STATUS (P. 47)
---------------------------------
COMMENT: Please include a section that clearly describes the concept of
Required Minimum Distributions.
RESPONSE: The Companies believe that the disclosure under the "Required
Minimum Distributions" subsection under the "Living Benefits" section
sufficiently describes the concept of Required Minimum Distributions.
16. POSSIBLE TAX LAW CHANGES (P. 52)
--------------------------------
COMMENT: Please describe who must be notified of any changes to the
contract as per item 7(c)(iii) of Form N-4.
RESPONSE: The Companies have revised the prospectuses to add the following
sentence in the "Possible Tax Law Changes" subsection: "We will notify you
of any changes to your contract."
17. SERIES AND CLASS IDENTIFIES
---------------------------
COMMENT: Please confirm supplementally that the contract name on the front
cover page of the prospectus is and will continue to be the same as the
EDGAR class identifiers.
RESPONSE: The contract name on the front cover page of the prospectuses has
been changed from Pioneer A, Pioneer B, and Pioneer C to Pioneer PRISM,
Pioneer PRISM XC, and Pioneer PRISM L, respectively. This name change will
also be reflected on the EDGAR class identifier for the contracts in the
next filing.
Michael Kosoff
May 16, 2008
Page 14
18. GUARANTEES AND SUPPORT AGREEMENTS
---------------------------------
COMMENT: Please clarify supplementally whether there are any types of
guarantees or support agreements with third parties to support any of the
company's guarantees under the contract or whether the company will be
primarily responsible for paying out on any guarantees associated with the
contract.
RESPONSE: MLI USA has no agreements; FMLI does, and the agreements are
disclosed in the applicable statements of additional information.
19. FINANCIAL STATEMENTS, EXHIBITS, MISSING INFORMATION, AND OTHER INFORMATION
--------------------------------------------------------------------------
COMMENT: Please confirm that the financial statements, exhibits, and
information missing from the initial registration statement will be filed
by a pre-effective amendment to the registration statement.
RESPONSE: The Companies confirm that the financial statements, exhibits,
and information missing from the initial registration statement will be
filed by a pre-effective amendment to the registration statement.
20. TANDY REPRESENTATION
--------------------
COMMENT: Please provide the appropriate Tandy representation.
RESPONSE: The Companies will submit a letter under separate cover
acknowledging the Tandy representation.
COMMENTS APPLICABLE ONLY TO FILE NOS. 333-148870, AND 333-148874
----------------------------------------------------------------
(1) PURCHASE PAYMENT CREDIT
-----------------------
COMMENT: (a) Please confirm supplementally that the registrant has relief
under sections 2(a)(32), 22(c) and 27(i)(2)(A) of the Investment Company
Act of 1940 and Rule 22c-1 thereunder for the recapture of certain bonus
credits.
RESPONSE: (a) The Companies believe that they are not required to obtain
relief under sections 2(a)(32), 22(c) and 27(i)(2)(A) of the Investment
Company Act of 1940 and Rule 22c-1 because the Companies are currently only
recapturing the purchase payment credits during the free look period and
the contract owners receive any investment gain on the purchase payment
credits, while the Companies bear any loss.
COMMENT: (b) Please disclose that you expect to make a profit from the
bonus charges.
RESPONSE: (b) The Companies do not expect to make any additional profit
from such higher charges. Rather, the higher charges associated with the
bonus are imposed merely to offset the cost of the bonus.
Michael Kosoff
May 16, 2008
Page 15
COMMENT: (c) Please confirm the bonus credits are not included in the
examples and that the figures do not reflect any additional fee
attributable to the bonus amount.
RESPONSE: (c) The Companies confirm that the bonus credits are not included
in the examples and that the figures do not reflect any additional fee
attributable to the bonus amount.
* * *
We hope that you will find these responses satisfactory. If you have any
questions or comments, please contact the undersigned at (202) 383-0590 or Lisa
Flanagan at (202) 383-0873.
Sincerely,
/s/ W. Thomas Conner
----------------------------------------
W. Thomas Conner
Enclosures
cc: Paula Minella, Esq.
Lisa Flanagan, Esq.