MARCH 13, 2013
METLIFE INSURANCE COMPANY OF CONNECTICUT
FORM S-3 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
FILE NO. 333-185333
MEMORANDUM RESPONDING TO COMMISSION STAFF WRITTEN COMMENTS
DATED FEBRUARY 27, 2012
PURSUANT TO COMMISSION RELEASE NO. 33-5231, MARCH 2, 1972
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Set out below are responses to written comments received from Sonny Oh of the
Securities and Exchange Commission ("Commission") staff on February 11, 2013
relating to the registration statement (the "Registration Statement") under the
Securities Act of 1933 on Form S-3 filed with the Commission by MetLife
Insurance Company of Connecticut ("MICC") on December 7, 2012 for MetLife Shield
Level Selector Annuity (f/k/a MetLife Flex Market Shield Annuity).
1. STAFF COMMENT:
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THE STAFF IS CONCERNED WITH THE USE OF THE WORD 'SHIELD' IN BOTH THE NAME OF THE
CONTRACT AND THE INVESTMENT OPTIONS. THE STAFF BELIEVES THAT THE TERM WOULD
MISLEAD INVESTORS IN AN INSURANCE PRODUCT AS TO THE RISKS THAT THE PRODUCT
ENTAILS. PLEASE EITHER REVISE THE NAME USED TO DESCRIBE THE CONTRACT AND
INVESTMENT OPTION OR CLARIFY SUPPLEMENTALLY WHY YOU BELIEVE THE TERM WOULD NOT
MISLEAD INVESTORS.
RESPONSE:
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Comment complied with. Based on conversations between Paul Cellupica of
Metropolitan Life Insurance Company and Bill Kotapish of the Commission staff,
MICC changed the name of the product to MetLife Shield Level Selector Annuity.
MICC also revised the Shield 10, Shield 15 and Shield 25 definitions in the
"Special Terms" to include the percentage amount of negative Index Performance
the Contract Owner would absorb. SEE pages 1 and 8 of Pre-Effective Amendment
No. 1 under the Securities Act of 1933 filed on March 13, 2013 (the
"Amendment").
2. STAFF COMMENT:
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PLEASE EXPLAIN TO THE STAFF THE BASIS, INCLUDING PRECEDENT, FOR YOUR BELIEF THAT
THE INTERESTS IN THE METLIFE FLEX MARKET SHIELD ANNUITY CONTRACT TO BE OFFERED
BY MICC ARE QUALIFIED TO BE REGISTERED ON FORM S-3.
RESPONSE: In July of 2012, Form S-3 was amended (the "Form S-3 Amendments") in
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a way MICC believes clarifies the use of Form S-3 for insurance contracts issued
by an insurance company (SEE SEC Release No. 33-9245 (Jul. 27, 2011) (the
"Amending Release")).
In order to be eligible to use Form S-3, a registrant must meet certain
eligibility requirements, and the security offering must fall within one of six
"conditions." As discussed below, MICC believes that interests in the MetLife
Shield Level Selector Annuity are qualified to be registered on Form S-3 because
MICC, as registrant, meets the registrant eligibility requirements, and the
security offering falls within "Primary Offerings of Non-Convertible Securities
Other than Common Equity," one of the six eligible conditions.
In pertinent part, General Instruction I. of Form S-3 requires that a registrant
relying on the Form (i) be organized under the laws of the U.S. or any state and
have its principal business operation in the U.S., (ii) file reports pursuant to
Section 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), (iii)
has filed all material required to be filed pursuant to Section 15(d) for a
period of at least twelve calendar months immediately preceding the filing of
the registration statement, (iv) has not failed to pay any dividend or sinking
fund installment on preferred stock or defaulted on any installment or
installments on indebtedness for borrowed money or on any rental on one or more
long term leases, which defaults in the aggregate are material to the financial
position of the registrant (collectively, a "Material Failure to Pay"), and (v)
submitted electronically to the Commission and posted on its corporate Website,
if any, all Interactive Data Files required to be submitted and posted pursuant
to Rule 405 of Regulation S-T during the twelve calendar months and any portion
for a month immediately preceding the filing of the registration statement. MICC
meets these conditions because MICC (i) is a stock insurance company chartered
in the state of Connecticut and has its principal offices located at 1300 Hall
Boulevard, Bloomfield, Connecticut 06002-2910, (ii) is required to file reports
pursuant to Section 15(d) of the Exchange Act and has filed all the material and
reports required by Section 15(d) in a timely manner for a period of at least
twelve calendar months immediately preceding the filing of this registration
statement, (iii) has not had a Material Failure to Pay and (iv) has met its
Interactive Data File obligations in the last twelve calendar months.
In addition to the registrant-specific requirements, General Instruction I.B. of
Form S-3 requires that the security offering meet the particular conditions of
any of the six types of security offerings specified. One of these eligible
conditions is the "primary offering of non-convertible securities other than
common equity" described in General Instruction I.B.2. Prior to the Form S-3
Amendments, there was some debate whether an insurance contract was a "primary
offering of non-convertible securities other than common equity" and whether an
insurance company could use its outstanding registered insurance contracts (such
as registered contracts with a market value adjustment feature and variable
annuities) to meet the requirement set forth in the condition that the
registrant must have outstanding, as of a date within 60 days prior to the
filing of the registration statement, at least $750 million of "non-convertible
2
securities, other than common equity, issued in primary offerings" for cash
registered under the Securities Act of 1933. MICC believes the addition of the
new instruction (the "New Instruction") to General Instruction I.B.2, brought
about by the Amending Release, makes clear that an insurance company using Form
S-3 to register offerings of insurance contracts may include the contract value,
as of the measurement date, of any outstanding insurance contracts, including
variable insurance contracts, issued in offerings registered under the
Securities Act when calculating whether it has at least $750 million of
non-convertible securities, other than common equity issued in primary
offerings. As of October 7, 2012, MICC has over $750 million outstanding in
insurance contract value for insurance contracts issued under the Securities Act
and thus satisfies this condition.
Other insurance companies have used Form S-3 to register insurance contracts
with features similar to the MetLife Shield Level Selector Annuity. SEE
Structured Investment Option issued by AXA Equitable Life Insurance Company (SEC
File No. 333-180899) and Allstate RightFit issued by Allstate Life Insurance
Company (SEC File No. 333-178570). In addition, MICC has registered a number of
insurance contracts with market value adjustment features on Form S-3. (SEE SEC
File Nos. 333-178884, 333-178885, 333-178886, 333-178888 and 333-178889).
3. STAFF COMMENT (FRONT COVER PAGE):
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(A) PLEASE HIGHLIGHT THE CROSS-REFERENCE TO RISK FACTORS BY PROMINENT TYPE OR
IN ANOTHER MANNER. ITEM 501(B)(5) OF REGULATION S-K PER ITEM 1 OF FORM S-3.
RESPONSE: Comment complied with. SEE page 1 of the Amendment.
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(B) PLEASE PROVIDE THE THIRD PARAGRAPH IN THE FORM OF A LEGEND. ITEM 501(B)(7)
OF REGULATION S-K PER ITEM 1 OF FORM S-3.
RESPONSE: Comment complied with. SEE page 1 of the Amendment.
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(C) PEASE INCLUDE AND CONFIRM THAT ALL OTHER DISCLOSURE ITEMS REQUIRED BY ITEM
501 OF REGULATION S-K PER ITEM 1 OF FORM S-3 HAVE BEEN INCLUDED, IN
PARTICULAR NOTE ITEM 501(B)(8) (UNDERWRITING) AND ITEM 501(B)(10)(SUBJECT
TO COMPLETION).
RESPONSE: Comment complied with. SEE page 1 of the Amendment.
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4. STAFF COMMENT (PAGE 5):
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(A) IN THE INTRODUCTORY SENTENCE, PLEASE ALSO DISCLOSE HOW A READER CAN
DISTINGUISH "SPECIAL TERMS" AS THEY APPEAR IN THE PROSPECTUS SO THEY KNOW
THAT THEIR MEANING IS PROVIDED HERE, I.E., NOT ALL UPPER CASED TERMS THAT
APPEAR IN THE PROSPECTUS ARE TERMS DEFINED IN THE "SPECIAL TERMS" SECTION.
3
RESPONSE: Comment complied with. SEE page 5 of the Amendment. All
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capitalized terms used in the prospectus have been conformed throughout the
prospectus.
(B) PLEASE CONFIRM THE ACCURACY OF THE DEFINITION OF "ACCOUNT VALUE," WHERE
THERE IS A REFERENCE TO ADJUSTMENTS "FOR ANY AMOUNTS THAT MAY BE INCLUDED
BY RIDER." THE STAFF INDENTIFIED NO APPLICABLE RIDERS AND THUS FOUND THE
PHRASE CONFUSING.
RESPONSE: Comment complied with. The reference to riders has been deleted.
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SEE page 5 of the Amendment.
(C) PLEASE CONFIRM THE ACCURACY OF THE DEFINITION OF "BUSINESS DAY." FOR
EXAMPLE, IT MAY BE MORE APPROPRIATE TO RELATE IT TO THE OPENING AND CLOSING
OF THE NEW YORK STOCK EXCHANGE.
RESPONSE: Comment complied with. SEE page 5 of the Amendment.
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(D) PLEASE REVIEW THE DEFINITION OF ALL SPECIAL TERMS, AND REVISE AS
APPROPRIATE TO EXPLAIN WHAT THE TERM MEANS. PLEASE NOTE THE FOLLOWING
EXAMPLES (THIS LIST IS NOT EXHAUSTIVE):
(I) TELLING THE READER WHERE TO FIND THE MATURITY DATE DOES NOT EXPLAIN
WHAT THE TERMS MEANS.
(II) COMPARE "MINIMUM PARTIAL WITHDRAWAL AMOUNT" TO "MINIMUM ACCOUNT
VALUE" WHERE THE FORMER MAY BE MORE SELF-EXPLANATORY, BUT THE MEANING
OF THE LATTER IS UNCLEAR, I.E., A MINIMUM ACCOUNT VALUE UNDER WHAT
CIRCUMSTANCES?
RESPONSE: Comment complied with. The definition of "Maturity Date" and
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"Minimum Account Value" has been expanded. SEE page 7 of the Amendment.
(E) FOR THE "MINIMUM GUARANTEED INTEREST RATE," PLEASE SPECIFY THE ACTUAL
MINIMUM RATE REQUIRED BY STATE LAW.
RESPONSE: Comment complied with. SEE page 7 of the Amendment.
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5. STAFF COMMENT (SUMMARY - PAGE 9):
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(A) THE SUMMARY SHOULD BE BRIEF AND NOT CONTAIN ALL THE DETAILED INFORMATION
IN THE PROSPECTUS. FOR EXAMPLE, IT IS NOT NECESSARY TO PROVIDE ALL OF THE
SHIELD OPTIONS ON PAGE 11 OF THE KEY FEATURES TABLE. ALSO, USING PLAIN
ENGLISH PRINCIPLES, PLEASE SIMPLIFY THE EXPLANATION OF TERMS IN THE KEY
FEATURES TABLE RATHER THAN REPEATING THE DEFINITIONS PROVIDED IN THE
"SPECIAL TERMS" SECTION.
4
RESPONSE: Comment complied with. The "Key Features of the Contract" table
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has been simplified so it is not as detailed as before. The intent of this
section is to give the Contract Owner a quick overview of the key features
of the product. This section continues to use the terms as defined in the
"Special Terms" section to promote consistency across the prospectus.
(B) PLEASE NOTE THAT THE IDENTITY OF THE INDICES (AS WELL AS ALL OTHER MISSING
MATERIAL DISCLOSURES) MUST BE PROVIDED IN A PRE-EFFECTIVE AMENDMENT, WHICH
WILL SUBJECT THE REGISTRATION STATEMENT TO FURTHER REVIEW BY THE STAFF.
RESPONSE: Comment complied with. The names of the indices and related
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disclosures have been added in the Amendment. SEE page 18 of the Amendment.
(C) IN THE FORMULA FOR THE RETURN OF PREMIUM DEATH BENEFIT, BEGINNING AT THE
END OF THE SUMMARY ON PAGE 12, PLEASE NOTE THAT THE SECOND PRONG OF THE
FORMULA DOES NOT ENCOMPASS PURCHASE PAYMENTS MADE INTO THE FIXED ACCOUNT.
PLEASE REVISE ACCORDINGLY BOTH HERE AND ANYWHERE ELSE APPLICABLE IN THE
PROSPECTUS.
RESPONSE: Comment complied with. The use of the term "Account Value" has
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been conformed throughout the prospectus.
6. STAFF COMMENT (RISK FACTORS - PAGE 14):
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(A) FOR CLARITY, IN LIEU OF PROVIDING ONE BULLET POINT LIST OF RISK FACTORS,
PLEASE UTILIZE SUB-CAPTIONS TO DIFFERENTIATE THE DIFFERENT TYPES OF RISK
ASSOCIATED WITH THE CONTRACT AND/OR MICC.
RESPONSE: Comment complied with. SEE pages 11-13 of the Amendment.
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(B) PLEASE REVISE THE SECOND PARAGRAPH OF THE FIFTH BULLET POINT (FIRST ONE AT
TOP OF PAGE 15) TO BE ANOTHER BULLET POINT AND EXPAND THE DISCLOSURE TO
FURTHER CLARIFY, IF TRUE, THAT MICC IS NOT OBLIGATED TO OFFER ANY SHIELD
OPTIONS AT ALL (SEE SECOND TO LAST SENTENCE OF SECOND PARAGRAPH UNDER
"SHIELD OPTION" ON PAGE 18, AND THE PARAGRAPH PRECEDING "TERM' ON PAGE 19),
AND PROVIDE ADDITIONAL RISK DISCLOSURE TO ADDRESS THE IMPACT THAT SUCH
SITUATION WOULD HAVE ON AN OWNER. IF THIS IS THE CASE, THE STAFF MAY HAVE
ADDITIONAL COMMENTS.
RESPONSE: Comment complied with. At least one Shield Option will always be
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available. SEE page 17 of the Amendment.
7. STAFF COMMENT (THE ANNUITY CONTRACT - PAGE 16):
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5
IN THE FIRST SENTENCE OF THE FIRST PARAGRAPH, PLEASE ADD THAT THE
PROSPECTUS DESCRIBES ALL MATERIAL RIGHTS AND OBLIGATIONS UNDER THE
CONTRACT.
RESPONSE: Comment complied with. SEE page 13 of the Amendment.
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8. STAFF COMMENT (INDICIES - PAGE 20):
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(A) PLEASE DISCLOSE THE MINIMUM NUMBER OF DAYS IN ADVANCE OF AN INDEX
SUBSTITUTION THAT AN OWNER WILL RECEIVE/MICC WILL SEND WRITTEN "NOTICE" OF
THE SUBSTITUTION.
RESPONSE: Comment complied with. SEE page 19 of the Amendment. MICC may be
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limited in the amount of notice it can provide because it may not receive
much advance notice from the Index provider if the Index provider
terminates the index. The amount of notice is generally not relevant to the
Contract Owner because a Contract Owner cannot transfer between Shield
Options during the Term of the Shield Option. Transfers may only be made at
the end of the Term.
(B) PLEASE PROVIDE A COMPLETE EXPLANATION, INCLUDING EXAMPLES, OF HOW THE
INVESTMENT AMOUNT AT THE TERM END DATE WILL BE CALCULATED IN THE EVENT AN
INDEX IS SUBSTITUTED BEFORE THE TERM END DATE.
RESPONSE: Comment complied with. SEE page 18 and Appendix B of the
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Amendment.
9. STAFF COMMENT (RATE CREDITING TYPES - PAGE 21):
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(A) UNDER "CAP RATE" AND "STEP RATE," RESPECTIVELY, PLEASE DISCLOSE THE
MINIMUM GUARANTEED CAP AND STEP RATE.
RESPONSE: Comment complied with. SEE page 7 of the Amendment.
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(B) UNDER "CAP RATE" AND "STEP RATE," RESPECTIVELY, PLEASE UTILIZE SIMPLE
EXAMPLES TO BETTER ILLUSTRATE HOW EACH RATE CREDITING TYPE OPERATES,
INCLUDING AN EXAMPLE TO DEMONSTRATE THE IMPACT OF CHOOSING ONE OVER THE
OTHER AS DISCUSSED IN THE SECOND PARAGRAPH UNDER "STEP RATE." FOR EXAMPLE,
NOTE THE BASIC EXAMPLES PROVIDED IN THE LATTER HALF OF THE FIRST PARAGRAPH
UNDER "SHIELD RATES" BEGINNING ON PAGE 20.
RESPONSE: Comment complied with. The examples have been revised to show how
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the Cap Rate and Step Rate would operate over time with fluctuating Index
Performance. SEE pages 22 to 24 of the Amendment.
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10. STAFF COMMENT (INVESTMENT AMOUNT - PAGE 22):
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(A) THE USE OF THE TERM "INVESTMENT AMOUNT" IS NOT CLEAR. IT IS UNCLEAR WHY,
IN THE CHART UNDER "EXAMPLE 2 - CALCULATING YOUR INTERIM VALUE" ON PAGE 29
AND UNDER "EXAMPLE 3 - WITHDRAWALS" ON PAGE 34, A ROW SHOWS "INVESTMENT
AMOUNT AS OF 2/1/15" WHEN AN INVESTMENT AMOUNT ONLY APPLIES AT THE END OF
THE TERM OR 2/1/17.
RESPONSE: Comment complied with. The examples have been revised to remove
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data elements not relevant to the immediate example. SEE pages 22 to 24 of
the Amendment.
11. STAFF COMMENT (CALCULATING YOUR INVESTMENT AMOUNT ON A TERM END DATE -
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PAGE 22):
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THE STAFF RECOMMENDS REVISING EXAMPLE 1 BEGINNING ON PAGE 25 TO BE EASIER
TO FOLLOW AND TO BETTER DEMONSTRATE THE ASPECTS OF THE SHIELD OPTION
DISCUSSED. FOR EXAMPLE, THE USE OF TWO OWNERS IN TWO TABLES UNNECESSARILY
COMPLICATES THE EXAMPLE AND INCLUSION OF A THIRD COLUMN FOR SHIELD OPTION 3
THAT IS NOT INVOLVED IN THE EXAMPLE FURTHER COMPLICATES THE EXAMPLE. IN
ADDITION, IN THE EXPLANATION OF WHAT HAPPENS TO EACH OWNER IN EACH SHIELD
OPTION BEGINNING ON PAGE 26, PLEASE INCLUDE ADDITIONAL LABELS AND/OR
EXPLAIN WHAT EACH OF THE NUMBERS REPRESENTS. PLEASE CONSIDER USING ONE
OWNER WITH ONE SHIELD OPTION WITH A SHIELD RATE LESS THAN 100% AND APPLY A
SINGLE CAP RATE AND STEP RATE FOLLOWED BY EXAMPLES TO EMPHASIZE THE IMPACT
OF THE SHIELD, CAP AND STEP RATES ON THE INVESTMENT AMOUNT. THE EXAMPLES
WOULD INCLUDE THE FOLLOWING: (I) NEGATIVE INDEX PERFORMANCE GREATER THAN
SHIELD PERCENTAGE; (II) NEGATIVE INDEX PERFORMANCE LESS THAN OR EQUAL TO
SHIELD PERCENTAGE; (III) 0% INDEX PERFORMANCE; (IV) POSITIVE INDEX
PERFORMANCE LESS THAN THE CAP AND STEP RATE; AND (V) POSITIVE INDEX
PERFORMANCE GREATER THAN NOR EQUAL TO THE CAP AND STEP RATE.
RESPONSE: Comment complied with. The examples have been limited to a single
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owner and simplified to make them easier to follow. SEE pages 22 to 24 of
the Amendment.
12. STAFF COMMENT (INTERIM VALUE CALCULATION - PAGE 28):
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(A) IN ADDITION TO THE EXAMPLE PROVIDED IN THE LATTER PART OF THE SECOND
PARAGRAPH UNDER "PERFORMANCE RATE FOR DETERMINATION OF INTERIM VALUES" AND
CONTINUING INTO THE ENSUING THIRD AND FOURTH PARAGRAPHS, PLEASE ADD ANOTHER
PARAGRAPH TO EXPLAIN HOW THE ACCRUED STEP RATE WOULD BE CALCULATED.
7
RESPONSE: Comment complied with. The examples have been simplified and
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footnotes have been added to explain how the values are calculated. SEE
pages 26 to 27 of the Amendment.
(B) THE STAFF RECOMMENDS REVISING EXAMPLE 2 BEGINNING ON PAGE 29 TO BE EASIER
TO FOLLOW AND TO BETTER DEMONSTRATE THE ASPECTS OF THE INTERIM VALUE
CALCULATION DISCUSSED. AGAIN, THE USE OF TWO OWNERS IN TWO TABLES
UNNECESSARILY COMPLICATES THE EXAMPLES AND INCLUSION OF THE FIRST AND
SECOND COLUMNS FOR SHIELD OPTIONS 1 AND 2 THAT ARE NOT INVOLVED IN THE
EXAMPLE FURTHER COMPLICATES THE EXAMPLE. AS WITH EXAMPLE 1, WHEN EXPLAINING
WHAT HAPPENS TO EACH OWNER IN EACH SHIELD OPTION BEGINNING ON PAGE 30,
PLEASE INCLUDE ADDITIONAL LABELS AND/OR EXPLAIN WHAT EACH OF THE NUMBERS
REPRESENTS. MOREOVER, A MAJOR PART OF CALCULATING THE INTERIM VALUE IS
DETERMINING THE APPLICABLE ACCRUED VALUES, YET IN LIEU OF PROVIDING A
THOROUGH EXPLANATION AS TO HOW THESE VALUES WERE CALCULATED, THE TABLE
SIMPLY PROVIDES THE ASTERISK FOOTNOTE TO THE TABLE.
RESPONSE: Comment complied with. The examples have been simplified and
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footnotes have been added to explain how the values are calculated. SEE
pages 26 to 27 of the Amendment.
13. STAFF COMMENT (WITHDRAWAL PROVISIONS - PAGE 31):
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(A) IN THE SECOND PARAGRAPH, PLEASE DISCLOSE THE VALUE OF THE MINIMUM PARTIAL
WITHDRAWAL AMOUNT.
RESPONSE: Comment complied with. SEE page 27 of the Amendment.
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(B) AS TOUCHED UPON IN COMMENT 10 ABOVE, IT IS UNCLEAR WHY THE LAST FOUR
SENTENCES IN THE FOURTH PARAGRAPH MAKE REFERENCE TO AN "INVESTMENT AMOUNT"
IN THE CONTEXT OF A WITHDRAWAL TAKEN BEFORE THE TERM END DATE WHERE THE
CALCULATION OF INTERIM VALUES HAS OCCURRED. AGAIN, THE TERM "INVESTMENT
AMOUNT" REQUIRES FURTHER CLARIFICATION AS TO ITS ROLE IN THE CALCULATION OF
THE INTERIM VALUE.
RESPONSE: Comment complied with. The examples illustrating the withdrawal
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concepts have been simplified and footnotes have been added to explain how
the values are calculated and the roles they play. SEE pages 30 to 31 of
the Amendment.
(C) PLEASE EXPAND THE FIFTH PARAGRAPH TO MORE FULLY AND COMPLETELY EXPLAIN HOW
THE INVESTMENT AMOUNT OF A SHIELD OPTION IS CALCULATED AT THE TERM END DATE
AFTER A WITHDRAWAL HAS BEEN TAKEN FROM THE APPLICABLE SHIELD OPTION PRIOR
TO THE TERM END DATE.
8
RESPONSE: Comment complied with. The examples illustrating the withdrawal
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concepts have been simplified and footnotes have been added to explain how
the values are calculated and the roles they play. In particular, see
footnote six to Example 3A and Example 3B. SEE pages 30 to 31 of the
Amendment.
(D) THE STAFF RECOMMENDS REVISING EXAMPLES 3 BEGINNING ON PAGE 34 TO BE EASIER
TO FOLLOW AND TO BETTER DEMONSTRATE THE CONSEQUENCES OF TAKING A
WITHDRAWAL, SET FORTH IN THE MANNER SUGGESTED IN COMMENTS 11 AND 12.B.
ABOVE FOR, RESPECTIVELY, EXAMPLES 1 AND 2. REVISIONS SHOULD ALSO INCLUDE
EXAMPLES OF HOW THE INVESTMENT AMOUNT OF A SHIELD OPTION IS CALCULATED AT
THE TERM END DATE AFTER A WITHDRAWAL HAS BEEN TAKEN.
RESPONSE: Comment complied with. The examples illustrating the withdrawal
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concepts have been simplified and footnotes have been added to explain how
the values are calculated and the roles they play. SEE pages 30 to 31 of
the Amendment.
14. STAFF COMMENT (TRANSFERS - PAGE 38):
-----------------------------------
(A) THE FIRST PARAGRAPH STATES THAT A TRANSFER MUST TAKE PLACE DURING THE
TRANSFER PERIOD. PLEASE DISCLOSE WHEN AND HOW A TRANSFER REQUEST IS
EXECUTED IN ORDER TO HAVE A TRANSFER TAKE PLACE DURING THE TRANSFER PERIOD.
RESPONSE: Comment complied with. SEE page 31 of the Amendment.
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(B) THE FOURTH SENTENCE OF THE THIRD PARAGRAPH STATES THAT THE FIXED ACCOUNT
MAY NOT BE AVAILABLE. IF IN FACT THERE MAY BE TIMES WHEN NO SHIELD OPTIONS
ARE AVAILABLE (SEE COMMENT 6.B. ABOVE), PLEASE CLARIFY WHETHER THE
UNAVAILABILITY OF THE FIXED ACCOUNT AND ALL SHIELD OPTIONS ARE MUTUALLY
EXCLUSIVE EVENTS OR MAY OCCUR SIMULTANEOUSLY, AND IF THE LATTER IS TRUE,
DISCLOSE HOW AN OWNER'S CONTRACT VALUE WOULD BE INVESTED.
RESPONSE: Comment complied with. At least one Shield Option will always be
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available. SEE page 17 of the Amendment.
(C) THE STAFF RECOMMENDS REVISING EXAMPLE 4 BEGINNING ON PAGE 39 TO BE EASIER
TO FOLLOW AND TO BETTER DEMONSTRATE THE CONSEQUENCES OF EXECUTING A
TRANSFER, SET FORTH IN THE MANNER SUGGESTED IN COMMENTS 11AND 12.B. ABOVE
FOR, RESPECTIVELY, EXAMPLES 1 AND 2. IN PARTICULAR, IT MAY SERVE AS A
HELPFUL REVIEW TO INCLUDE THE CALCULATION OF THE INVESTMENT AMOUNT AT THE
TERM END DATE OF THE SHIELD OPTION FROM WHICH MONEY IS TRANSFERRED TO
REFLECT THE APPROPRIATE AMOUNT THAT WOULD BE TRANSFERRED INTO THE NEW
SHIELD OPTION.
RESPONSE: Comment complied with. The examples illustrating the transfer
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concept have been simplified. SEE pages 32 to 33 of the Amendment.
9
15. STAFF COMMENT (OPTIONAL DEATH BENEFIT RETURN OF PREMIUM - PAGE 40):
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(A) PLEASE EXPAND ON THE LAST SENTENCE OF THE PARAGRAPH FOLLOWING THE FORMULA
FOR THE DEATH BENEFIT (FOURTH PARAGRAPH) TO BETTER EXPLAIN HOW USING THE
AGE OF THE OLDER JOINT OWNER WOULD IMPACT THE FORMULA.
RESPONSE: Comment complied with. The age of the eldest joint owner is used
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to determine whether the "Optional Death Benefit-Return of Premium" is
available. For example, if one of the joint owners is over 72, then it
would not be available. SEE page 33 of the Amendment.
(B) THE LAST SENTENCE OF THE SECTION REFERS THE READER TO APPENDIX B FOR
EXAMPLES OF THE RETURN OF PREMIUM DEATH BENEFIT RIDER. PLEASE REVISE THE
EXAMPLES IN APPENDIX B TO PROVIDE NARRATIVE EXPLANATIONS OF WHAT IS BEING
REFLECTED IN THE TABLE.
RESPONSE: The Example in Appendix C of the Return of Premium Death Benefit
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is the standard example for this benefit and is used in a number of
products with this death benefit. MICC believes the example is
self-explanatory.
(C) AS EXPLAINED IN THE LAST SENTENCE ON PAGE 39, THE COST OF THE OPTIONAL
RETURN OF PREMIUM DEATH BENEFIT RIDER IS REFLECTED IN LOWER CAP AND STEP
RATES. PLEASE DISCLOSE THE DIFFERENCE IN SUCH RATES TO GIVE THE READER A
BETTER IDEA OF HOW MUCH POTENTIAL POSITIVE EARNINGS THEY WOULD GIVE UP BY
ELECTING THE RIDER.
RESPONSE: Comment complied with. SEE page 33 of the Amendment.
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(D) THE SECOND PARAGRAPH UNDER "GENERAL DEATH BENEFIT PROVISIONS" ON PAGE 41
EXPLAINS THAT ANY DEATH BENEFIT AMOUNT IN EXCESS OF ACCOUNT VALUE CAN BE
ALLOCATED TO THE FIXED ACCOUNT AND THEN, IF NOT AVAILABLE, TO A SHIELD
OPTION. PLEASE EXPLAIN THE BASIS FOR ALLOWING A DEATH BENEFIT AMOUNT
DETERMINED AS OF THE DEATH OF THE FIRST OF MULTIPLE BENEFICIARIES TO THEN
BE "SUBJECT TO FLUCTUATION IN VALUE" AND EXPLAIN HOW FLUCTUATION COULD
OCCUR.
RESPONSE: Comment complied with. The paragraph has been moved to make clear
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that the Death Benefit Amount in excess of Account Value would only be
added to the contract if beneficiary chooses to continue the contract. The
fact that any monies added in this matter may be at risk is part of the
risk of choosing to continue the contract. SEE page 34 of the Amendment.
(E) IN THE LAST SENTENCE OF THE FIRST PARAGRAPH UNDER "TOTAL CONTROL ACCOUNT"
ON PAGE 41, PLEASE DISCLOSE THE VALUE FOR THE GUARANTEED MINIMUM ANNUAL
EFFECTIVE RATE.
10
RESPONSE: This "Total Control Account" is outside the registered contract
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and MICC cannot specify what the interest rate would be at this time.
(F) THE "DEATH BENEFIT OPTIONS" SUB-SECTION ON PAGE 42 STATES THAT A
BENEFICIARY "MUST CHOOSE PAYMENT OF THE DEATH BENEFIT UNDER ONE OF THE
OPTIONS [(A) THROUGH (C)]." PLEASE RECONCILE HAVING TO ELECT ONE OF THESE
OPTIONS WITH THE ABILITY TO ELECT THE "CONTROLLED PAYOUT" OR "TOTAL CONTROL
ACCOUNT" DISCUSSED ON PAGE 41, I.E., ARE OPTIONS (A) THROUGH (C) TYPES OF
CONTROLLED PAYOUT AND/OR TOTAL CONTROL ACCOUNTS?
RESPONSE: Controlled payout is chosen by the Contract Owner and cannot be
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changed by the Beneficiary. If the controlled payout is not chosen by the
Contract Owner, the Beneficiary(s) may choose Option 1, Option 2 or Option
3 as set forth on page 35 of the Amendment. The Total Control Account is
available only in Option 1. SEE page 35 of the Amendment.
(G) IN THE SECOND SENTENCE OF THE FIRST PARAGRAPH UNDER "NON-SPOUSAL
BENEFICIARY CONTINUATION" ON PAGE 43, PLEASE DISCLOSE THE VALUE FOR THE
"PUBLISHED MINIMUM FOR THIS RIGHT," OR EXPLAIN HOW THIS VALUE IS
DETERMINED.
RESPONSE: Comment complied with. SEE page 36 of the Amendment.
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16. STAFF COMMENT (FEDERAL TAX CONSIDERATIONS -- 46):
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PLEASE CONFIRM THIS SECTION IS CURRENT.
RESPONSE: Comment complied with. SEE pages 39 to 43 of the Amendment.
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17. STAFF COMMENT (DISTRIBUTION OF CONTRACTS - PAGE 53):
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PLEASE FILL IN ALL BLANK PERCENTAGES.
RESPONSE: Comment complied with. SEE page 47 of the Amendment.
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18. STAFF COMMENT (MATERIAL CHANGES):
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PLEASE CONFIRM COMPLIANCE WITH ITEM 11 OF FORM S-3
RESPONSE: Comment complied with. There have been no material changes. MICC
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will file updated financials at the end of March 2013, which will be
incorporated by reference in the section on page 58 in Pre-Effective
Amendment No. 2 that MICC expects to file on April 5(th). This second
pre-effective amendment will also have the requisite consents from the
accountants.
19. STAFF COMMENT:
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PLEASE PROVIDE THE DISCLOSURE REQUIRED BY ITEM 13.
RESPONSE: Comment complied with.
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20. STAFF COMMENT:
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PLEASE INCLUDE CONSENT UNDER EXHIBIT 23 FOR THE LEGAL OPINION TO BE
PROVIDED AS EXHIBIT 5.
RESPONSE: Comment complied with.
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21. STAFF COMMENT:
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PLEASE PROVIDE NEW POWERS OF ATTORNEY IN LIEU OF THOSE FILED ALONG WITH THE
REGISTRATION STATEMENT AND ENSURE THAT THEY "RELATED TO A SPECIFIC FILING"
AS REQUIRED BY RULE 483(B) UNDER THE SECURITIES ACT OF 1933.
RESPONSE: Comment complied with.
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22. STAFF COMMENT:
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ANY FINANCIAL STATEMENTS, EXHIBITS, AND ANY OTHER REQUIRED DISCLOSURE NOT
INCLUDED IN THIS REGISTRATION STATEMENT MUST BE FILED BY PRE-EFFECTIVE
AMENDMENT TO THE REGISTRATION STATEMENT.
RESPONSE: MICC anticipates filing Pre-Effective Amendment No. 2 on April 5,
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2013 to provide updated financials and expenses for Item No. 14.
23. STAFF COMMENT:
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WE URGE ALL PERSONS WHO ARE RESPONSIBLE FOR THE ACCURACY AND ADEQUACY OF
THE DISCLOSURE IN THE FILINGS REVIEWED BY THE STAFF TO BE CERTAIN THAT THEY
HAVE PROVIDED ALL INFORMATION INVESTORS REQUIRE FOR AN INFORMED DECISION.
SINCE THE REGISTRANTS ARE IN POSSESSION OF ALL FACTS RELATING TO THE
REGISTRANT'S DISCLOSURE, IT IS RESPONSIBLE FOR THE ACCURACY AND ADEQUACY OF
THE DISCLOSURES IT HAS MADE.
RESPONSE: MICC will file as correspondence on EDGAR the requested
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representations when it files Pre-Effective Amendment No. 2.
* * * * *
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