ING Life Insurance and Annuity Company, et al., Notice of Application, 42677-42686 [E6-11978]
Download as PDF
<![CDATA[
Federal Register / Vol. 71, No. 144 / Thursday, July 27, 2006 / Notices
accordance with Section C below, and/
or the number of persons present at the
designated time. At the outset of each
statement, the speaker should identify
himself or herself by stating their name,
city and state of residence, and stating
whether they have any affiliation (such
as employment, consultancy, or
membership) with any of the parties
(SERI or the NRC).
C. Submitting a Request To Make an
Oral Limited Appearance Statement
Persons wishing to make an oral
statement who have submitted a timely
written request to do so will be given
priority over those who have not filed
such a request. To be considered timely,
a written request to make an oral
statement must either be mailed, faxed,
or sent by e-mail so as to be received by
5 p.m. EDT on August 21, 2006. Written
requests to make an oral statement
should be submitted to:
Mail: Office of the Secretary,
Rulemakings and Adjudications Staff,
U.S. Nuclear Regulatory Commission,
Washington, DC 20555–0001.
Fax: (301) 415–1101 (verification
(301) 415–1966).
E-mail: hearingdocket@nrc.gov.
In addition, using the same method of
service, a copy of the written request to
make an oral statement should be sent
to the Chairman of this Licensing Board
as follows:
Mail: Administrative Judge Lawrence
G. McDade, c/o: Debra Wolf, Esq., Law
Clerk, Atomic Safety and Licensing
Board Panel, Mail Stop T–3 F23, U.S.
Nuclear Regulatory Commission,
Washington, DC 20555–0001.
Fax: (301) 415–5599 (verification
(301) 415–6094).
E-mail: daw1@nrc.gov.
rwilkins on PROD1PC63 with NOTICES
D. Submitted Written Limited
Appearance Statements
A written limited appearance
statement may be submitted to the
Board regarding this proceeding at any
time, either in lieu of or in addition to
any oral statement. Such statements
should be sent to the Office of the
Secretary using the methods prescribed
above, with a copy to the Licensing
Board Chairman.
E. Availability of Documentary
Information Regarding the Proceeding
Documents relating to this proceeding
are available for public inspection at the
Commission’s Public Document Room
(PDR), located at One White Flint North,
11555 Rockville Pike (first floor),
Rockville, Maryland, or electronically
from the publicly available records
component of NRC’s document system
(ADAMS). ADAMS is accessible from
VerDate Aug<31>2005
16:46 Jul 26, 2006
Jkt 208001
the NRC Web site at https://www.nrc.gov/
reading-rm/adams.html (Electronic
Reading Room). Persons who do not
have access to ADAMS or who
encounter problems in accessing the
documents located in ADAMS should
contact the NRC PDR reference staff by
telephone at (800) 397–4209 or (301)
415–4737, or by e-mail to pdr@nrc.gov.
F. Scheduling Information Updates
Any updated/revised scheduling
information regarding the limited
appearance session can be found on the
NRC Web site at https://www.nrc.gov/
public-involve/public-meetings/
index.cfm or by calling (800) 368–5642,
extension 5036, or (301) 415–5036.
Dated in Rockville, Maryland, July 21,
2006.
For the Atomic Safety and Licensing
Board.1
Lawrence G. McDade,
Chairman, Administrative Judge.
[FR Doc. 06–6507 Filed 7–26–06; 8:45 am]
BILLING CODE 7590–01–P
NUCLEAR REGULATORY
COMMISSION
U.S. Nuclear Regulatory
Commission.
ACTION: Request for comments on the
Nuclear Regulatory Commission’s low
level radioactive waste program;
Extension of Comment Period.
AGENCY:
The public comment period for
this action has been extended and now
closes September 5, 2006. Written
comments should be submitted as
described in the ADDRESSES section of
this notice. Comments submitted by
mail should be postmarked by that date
to ensure consideration. Comments
received or postmarked after that date
will be considered to the extent
practical.
FOR FURTHER INFORMATION CONTACT: Mr.
Ryan Whited, Chief, Low Level Waste
Section, Environmental and
Performance Assessment Directorate,
Division of Waste Management and
Environmental Protection, Office of
Nuclear Material Safety and Safeguards,
U.S. Nuclear Regulatory Commission,
Rockville, MD 20852. Telephone: (301)
415–7257; fax number: (301) 415–5370;
e-mail: arw2@nrc.gov.
DATES:
1 Copies of this Notice were sent this date by
Internet electronic mail transmission to counsel for
(1) applicant SERI; and (2) the NRC Staff.
Frm 00053
Fmt 4703
Sfmt 4703
SUMMARY: On July 7, 2006 (71 FR
38675), the U.S. Nuclear Regulatory
Commission published a document
requesting public comment on its low
level radioactive waste regulatory
program. The comment period for this
action, which was to have closed 30
days after publication, is being extended
for an additional 30 days.
ADDRESSES: Members of the public are
invited and encouraged to submit
comments to the Chief, Rules and
Directives Branch, Mail Stop T6–D59,
U.S. Nuclear Regulatory Commission,
Washington, DC 20555–0001.
Comments will also be accepted by email at NRCREP@nrc.gov or by fax to
(301) 415–5397, Attention: Ryan
Whited.
Dated at Rockville, Maryland this 20th day
of July, 2006.
For the Nuclear Regulatory Commission.
Scott Flanders,
Deputy Director, Environmental and
Performance Assessment Directorate,
Division of Waste Management and
Environmental Protection, Office of Nuclear
Materials Safety and Safeguards.
[FR Doc. E6–12022 Filed 7–26–06; 8:45 am]
BILLING CODE 7590–01–P
Request for Comments on the Nuclear
Regulatory Commission’s Low Level
Radioactive Waste Program; Extension
of Comment Period
PO 00000
42677
SECURITIES AND EXCHANGE
COMMISSION
[Release No. IC–27423; File No. 812–13260]
ING Life Insurance and Annuity
Company, et al., Notice of Application
July 20, 2006.
The Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of application for an
order pursuant to Section 26(c) of the
Investment Company Act of 1940
(‘‘1940 Act’’ or ‘‘Act’’), approving
certain substitutions of securities and
for an order of exemption pursuant to
Section 17(b) of the Act.
AGENCY:
ING Life Insurance and
Annuity Company, ING USA Annuity
and Life Insurance Company, ReliaStar
Life Insurance Company, (each a
‘‘Company’’ and together, the
‘‘Companies’’), Variable Annuity
Account B of ING Life Insurance and
Annuity Company, Variable Annuity
Account C of ING Life Insurance and
Annuity Company, Variable Annuity
Account I of ING Life Insurance and
Annuity Company, Separate Account B
of ING USA Annuity and Life Insurance
Company, Separate Account N of
Reliastar Life Insurance Company (each,
an ‘‘Account’’ and together, the
‘‘Accounts’’), ING Investors Trust, ING
Partners, Inc., and ING VP Balanced
APPLICANTS:
E:\FR\FM\27JYN1.SGM
27JYN1
42678
Federal Register / Vol. 71, No. 144 / Thursday, July 27, 2006 / Notices
Portfolio, Inc., collectively referred to
herein as (the ‘‘Applicants’’).
SUMMARY OF APPLICATION: The
Applicants request an order, pursuant to
Section 26(c) of the 1940 Act, permitting
the substitutions of securities issued by
certain registered investment companies
held by the Accounts to support certain
in force variable life insurance policies
and variable annuity contracts
(collectively, the ‘‘Contracts’’) issued by
the Companies. More particularly, the
Applicants propose to substitute shares
of certain series of ING Investors Trust
Replaced funds
Substitute funds
Baron Asset Fund .....................................................................................
Baron Growth Fund ..................................................................................
Fidelity Advisor Mid Cap Fund—Class T .................................................
Fidelity VIP Growth Portfolio—Initial Class ..............................................
AIM V.I. Capital Appreciation Fund—Series I
Fidelity VIP Equity-Income Portfolio—Initial Class ...................................
Fidelity VIP Equity-Income Portfolio—Service Class 2 ............................
AllianceBernstein Growth and Income Portfolio—Class A ......................
Alliance Bernstein Growth and Income Fund—Class A ..........................
Legg Mason Value Trust, Inc.—Primary Class ........................................
Lord Abbett Series Fund—Growth and Income Portfolio—Class VC ......
Lord Abbett Affiliated Fund—Class A
MFS Total Return Series—Initial Class ...................................................
Oppenheimer Global Fund—Class A .......................................................
Oppenheimer Main Street Fund—Class A ...............................................
Fidelity VIP High Income Portfolio—Initial Class .....................................
Pioneer Equity Income VCT Portfolio—Class I ........................................
AIM V.I. Core Equity Fund—Series I .......................................................
Pioneer Fund VCT Portfolio—Class I ......................................................
Pioneer Fund—Class A ............................................................................
Pioneer High Yield VCT Portfolio—Class I ..............................................
Pioneer High Yield Fund—Class A ..........................................................
Pioneer Mid Cap Value VCT Portfolio—Class I .......................................
Templeton Growth Fund, Inc.—Class A ..................................................
UBS U.S. Small Cap Growth Fund—Class A ..........................................
Fidelity VIP Asset Manager Portfolio—Initial Class .................................
Fidelity VIP Overseas Portfolio—Initial Class ..........................................
Lord Abbett Small-Cap Value Fund—Class A .........................................
Evergreen Special Values Fund—Class A
Applicants also seek an order of
exemption pursuant to Section 17(b) of
the 1940 Act to permit certain in-kind
redemptions and purchases in
connection with the substitutions.
The Application was filed
on February 9, 2006. The Application
was amended and restated on June 30,
2006, and July 18, 2006.
FILING DATE:
An
order granting the Application will be
issued unless the Commission orders a
hearing. Interested persons may request
a hearing by writing to the Secretary of
the Commission and serving Applicants
with a copy of the request, personally or
by mail. Hearing requests should be
received by the Commission by 5:30
p.m. on August 14, 2006, and should be
accompanied by proof of service on
Applicants, in the form of an affidavit
or, for lawyers, a certificate of service.
Hearing requests should state the nature
of the writer’s interest, the reason for the
request, and the issues contested.
Persons who wish to be notified of a
hearing may request notification by
writing to the Secretary of the
Commission.
rwilkins on PROD1PC63 with NOTICES
HEARING OR NOTIFICATION OF HEARING:
VerDate Aug<31>2005
16:46 Jul 26, 2006
Jkt 208001
and ING Partners, Inc., and certain
shares of the ING VP Balanced Portfolio,
Inc. (the ‘‘Substitute Funds’’) for shares
of certain registered investment
companies currently held by
subaccounts of the various Accounts
(the ‘‘Replaced Funds’’) as follows:
ING
ING
ING
ING
Baron Asset Portfolio—Class S.
Baron Small Cap Growth Portfolio—Class S.
FMR Diversified Mid Cap Portfolio—Class S.
FMR Earnings Growth Portfolio—Class I.
ING
ING
ING
ING
ING
ING
FMR Equity Income Portfolio—Class I.
FMR Equity Income Portfolio—Class S.
JPMorgan Value Opportunities Portfolio—Class I.
JPMorgan Value Opportunities Portfolio—Class S.
Legg Mason Value Portfolio -Class S.
Lord Abbett Affiliated Portfolio—Class I.
ING
ING
ING
ING
ING
ING
ING
ING
ING
ING
ING
ING
ING
ING
ING
ING
MFS Total Return Portfolio—Class I.
Oppenheimer Global Portfolio—Class S.
Oppenheimer Main Street Portfolio—Class S.
PIMCO High Yield Portfolio—Class I.
Pioneer Equity Income Portfolio—Class I.
Pioneer Fund Portfolio—Class I.
Pioneer Fund Portfolio—Class I.
Pioneer Fund Portfolio—Class S.
Pioneer High Yield Portfolio-Class I.
Pioneer High Yield Portfolio—Class S.
Pioneer Mid Cap Value Portfolio—Class I.
Templeton Global Growth Portfolio—Class I.
UBS U.S. Small Cap Growth Portfolio—Class S.
VP Balanced Portfolio, Inc.—Class I.
VP Index Plus International Equity Portfolio—Class S.
Wells Fargo Small Cap Disciplined Portfolio—Class S.
Secretary, Securities and
Exchange Commission, 100 F Street,
NE., Washington, DC 20549–1090.
Applicants, J. Neil McMurdie, Esquire,
ING Americas U.S. Legal Services, 151
Farmington Avenue, TS31, Hartford, CT
06156–8975.
ADDRESSES:
FOR FURTHER INFORMATION CONTACT:
Alison White, Senior Counsel, or Joyce
M. Pickholz, Branch Chief, Office of
Insurance Products, Division of
Investment Management, at (202) 551–
6795.
The
following is a summary of the
Application. The complete Application
is available for a fee from the Public
Reference Branch of the Commission,
100 F Street, NE., Room 1580,
Washington, DC 20549.
SUPPLEMENTARY INFORMATION:
Applicants’ Representations
1. Each of the Companies is an
indirect wholly owned subsidiary of
ING Groep, N.V. (‘‘ING’’). ING is a global
financial services holding company
based in The Netherlands which is
active in the field of insurance, banking
and asset management. As a result, each
PO 00000
Frm 00054
Fmt 4703
Sfmt 4703
Company likely would be deemed to be
an affiliate of the others.
2. ING Life Insurance and Annuity
Company (‘‘ING Life’’) is a stock life
insurance company organized under the
laws of the State of Connecticut in 1976
as Forward Life Insurance Company.
Through a December 31, 1976 merger,
ING Life’s operations include the
business of Aetna Variable Annuity Life
Insurance Company (formerly known as
Participating Annuity Life Insurance
Company). Through a December 31,
2005 merger, ING Life’s operations
include the business of ING Insurance
Company of America (‘‘ING America’’).
Prior to May 1, 2002, ING Life was
known as Aetna Life Insurance and
Annuity Company (‘‘Aetna’’). ING Life
is principally engaged in the business of
issuing life insurance and annuities.
3. ING USA Annuity and Life
Insurance Company (‘‘ING USA’’) is an
Iowa stock life insurance company
which was originally organized in 1973
under the insurance laws of Minnesota.
Through January 1, 2004 mergers, ING
USA’s operations include the business
of Equitable Life Insurance Company of
Iowa, United Life and Annuity
E:\FR\FM\27JYN1.SGM
27JYN1
42679
Federal Register / Vol. 71, No. 144 / Thursday, July 27, 2006 / Notices
Insurance Company, and USG Annuity
and Life Company. Prior to January 1,
2004, ING USA was known as Golden
American Life Insurance Company
(‘‘Golden’’). ING USA is principally
engaged in the business of issuing life
insurance and annuities.
4. ReliaStar Life Insurance Company
(‘‘ReliaStar’’) is a stock life insurance
company organized in 1885 and
incorporated under the laws of the State
of Minnesota. Through an October 1,
2002 merger, ReliaStar’s operations
include the business of Northern Life
Insurance Company (‘‘Northern’’).
ReliaStar is principally engaged in the
business of issuing life insurance,
annuities, employee benefits and
retirement contracts.
5. Each of the Accounts is a
segregated asset account of the
Company that is the depositor of such
Account, and is registered under the
1940 Act as a unit investment trust.
Each of the respective Accounts is used
by the Company of which it is a part to
support the Contracts that it issues.
6. Variable Annuity Account B of ING
Life Insurance and Annuity Company
(‘‘ING Life B’’) (File No. 811–2512) was
established by Aetna in 1976 as a
continuation of the separate account
established in 1974 under the laws of
the State of Arkansas by Aetna Variable
Annuity Life Insurance Company to
support certain Contracts.
7. Variable Annuity Account C of ING
Life Insurance and Annuity Company
(‘‘ING Life C’’). ING Life C (formerly
Variable Annuity Account C of Aetna
Life Insurance and Annuity Co) (File
No. 811–2513) was established by Aetna
in 1976 as a continuation of the separate
account established in 1974 in
accordance with the laws of the State of
Arkansas by Aetna Variable Annuity
Life Insurance Company to support
certain Contracts.
8. Variable Annuity Account I of ING
Life Insurance and Annuity Company
(‘‘ING Life I’’), (formerly ING Variable
Annuity Account I of ING Insurance
Company of America) (File No. 811–
8582), was established by ING America
(then known as Aetna Insurance
Company of America) in 1994 under the
laws of the State of Connecticut.
9. Separate Account B of ING USA
Annuity and Life Insurance Company
(‘‘ING USA B’’) (File No. 811–5626) was
established by Golden in 1988 under the
laws of the State of Minnesota.
10. Separate Account N of ReliaStar
Life Insurance Company (‘‘ReliaStar
Separate Account N’’), formerly
Separate Account One of Northern Life
Insurance Company (File No. 811–
9002), was established by Northern in
1994 under the laws of the State of
Washington.
11. Most of the Substitute Funds are
series of ING Investors Trust and ING
Partners, Inc. ING VP Balanced Portfolio
is also a Substitute Fund.
12. ING Investors Trust, formerly
known as the GCG Trust, was organized
as a Massachusetts business trust on
August 3, 1988. ING Investors Trust is
registered under the 1940 Act as an
open-end management investment
company (File No. 811–5629).
13. ING Partners, Inc. (‘‘ING
Partners’’), formerly known as Portfolio
Partners, Inc., was organized as a
Maryland Corporation in 1997 and
commenced operations on November
28, 1997. ING Partners is registered
under the 1940 Act as an open-end
management investment company (File
No. 811–08319).
14. ING VP Balanced Portfolio, Inc.,
formerly known as Aetna Investment
Advisers Fund, Inc., was organized as a
Maryland Corporation in 1988. ING VP
Balanced Portfolio is registered under
the 1940 Act as an open-end
management investment company (File
No. 811–05773).
15. Directed Services, Inc., ING
Investments, LLC, and ING Life are
registered as investment advisers under
the Investment Adviser Act of 1940.
Directed Services, Inc. provides or will
provide overall management services for
each series of the ING Investors Trust
except for the ING VP Index Plus
International Equity Portfolio. The ING
VP Index Plus International Equity
Portfolio and ING VP Balanced
Portfolio, Inc. are advised by ING
Investments, LLC. ING Life is the
investment adviser for each ING
Partners portfolio.
16. The terms and conditions,
including charges and expenses,
applicable to each Contract are
described in the registration statements
filed with the Commission for each. The
Contracts may be issued as individual
contracts or as group contracts where
the owner is the employer, sponsor or
trustee of a group retirement plan. In the
case of group contracts, members of the
group (‘‘Participants’’) acquire an
interest in the contract and have certain
rights as determined by the group
contract and/or, if applicable, the
retirement plan covering the
Participants’ interests. As each Contract
is structured, owners of the Contract, or
in the case of certain group contracts,
the Participant (each a ‘‘Contract
Owner’’) may select one or more of the
investment options available under the
Contract by allocating premiums and
transferring account value to that
subaccount of the relevant Account that
corresponds to the investment option
desired. Thereafter, the account value of
the Contract Owner will vary based on
the investment experience of the
selected subaccount(s). Generally, a
Contract Owner may, during the life of
each Contract, make unlimited transfers
of account values among the
subaccounts available under the
Contract, subject to any administrative
and/or transfer fees applicable under the
Contracts and any limits related to
frequent or disruptive transfers.
Comparison of Fees and Expenses
17. The comparative fees and
expenses for each fund in the proposed
substitutions are as follows:
[In percent]
rwilkins on PROD1PC63 with NOTICES
Management
fees
Substitute Fund:
• ING Baron Asset Portfolio—S
Class .......................................
Replaced Fund:
• Baron Asset Fund ...................
Substitute Fund:
• ING Baron Small Cap Growth
Portfolio—S Class ...................
Replaced Fund:
• Baron Growth Fund .................
Substitute Fund:
VerDate Aug<31>2005
16:46 Jul 26, 2006
Jkt 208001
Distribution
(12b–1) fees
Other
expenses
Total annual
expenses
Expense
waivers
Net annual
expenses
0.95
........................
1 0.46
1.41
0.11
1.30
1.00
0.25
0.09
1.34
........................
1.34
0.85
........................
2 0.48
1.33
0.02
1.31
1.00
0.25
0.06
1.31
........................
1.31
PO 00000
Frm 00055
Fmt 4703
Sfmt 4703
E:\FR\FM\27JYN1.SGM
27JYN1
42680
Federal Register / Vol. 71, No. 144 / Thursday, July 27, 2006 / Notices
[In percent]—Continued
rwilkins on PROD1PC63 with NOTICES
Management
fees
• ING FMR Diversified Mid Cap
Portfolio—Class S 3 .................
Replaced Fund:
• Fidelity Advisor Mid Cap
Fund—Class T ........................
Substitute Fund:
• ING FMR Earnings Growth
Portfolio—Class I ....................
Replaced Fund:
• Fidelity VIP Growth Portfolio—
Initial Class ..............................
Replaced Fund:
• AIM V.I. Capital Appreciation
Fund—Series I ........................
Substitute Fund:
• ING FMR Equity Income Portfolio—Class I ...........................
Replaced Fund:
• Fidelity VIP Equity-Income
Portfolio—Initial Class .............
Substitute Fund:
• ING FMR Equity Income Portfolio—Class S ..........................
Replaced Fund:
• Fidelity VIP Equity-Income
Portfolio—Service Class 2 ......
Substitute Fund:
• ING JPMorgan Value Opportunities Portfolio—Class I ...........
Replaced Fund:
• AllianceBernstein Growth and
Income Portfolio—Class A ......
Substitute Fund:
• ING JPMorgan Value Opportunities Portfolio—Class S .........
Replaced Fund:
• AllianceBernstein Growth and
Income Fund—Class A ...........
Substitute Fund:
• ING Legg Mason Value Portfolio—Class S 7 .......................
Replaced Fund:
• Legg Mason Value Trust,
Inc.—Primary Class ................
Substitute Fund:
• ING Lord Abbett Affiliated
Portfolio—Class I 9 ..................
Replaced Fund:
• Lord Abbett Series Fund—
Growth and Income Portfolio—
Class VC .................................
Replaced Fund:
• Lord Abbett Affiliated Fund—
Class A ....................................
Substitute Fund:
• ING MFS Total Return Portfolio—Class I 10 .......................
Replaced Fund:
• MFS Total Return Series—Initial Class ..................................
Substitute Fund:
• ING Oppenheimer Global Portfolio—Class S ..........................
Replaced Fund:
• Oppenheimer Global Fund—
Class A ....................................
Substitute Fund:
• ING Oppenheimer Main Street
Portfolio—Class S 12 ...............
Replaced Fund:
VerDate Aug<31>2005
16:46 Jul 26, 2006
Jkt 208001
Distribution
(12b–1) fees
Other
expenses
Total annual
expenses
Expense
waivers
Net annual
expenses
0.65
........................
4 0.26
0.91
........................
0.91
0.57
0.50
0.24
1.31
........................
1.31
0.57
........................
0.15
0.72
0.05
0.67
0.57
........................
0.10
0.67
........................
0.67
0.61
........................
0.29
0.90
........................
0.90
0.47
........................
0.13
0.60
0.04
0.56
0.47
........................
0.09
0.56
........................
0.56
0.47
........................
5 0.38
0.85
0.04
0.81
0.47
0.25
0.09
0.81
........................
0.81
0.40
........................
0.13
0.53
........................
0.53
0.55
........................
0.04
0.59
........................
0.59
0.40
........................
6 0.38
0.78
........................
0.78
0.48
0.28
0.26
1.02
........................
1.02
0.79
........................
8 0.25
1.04
........................
1.04
0.66
0.95
0.07
1.68
........................
1.68
0.75
........................
........................
0.75
........................
0.75
0.48
........................
0.41
0.89
........................
0.89
0.30
0.35
0.17
0.82
........................
0.82
0.64
........................
........................
0.64
........................
0.64
0.75
........................
0.09
0.84
........................
0.84
0.60
........................
11 0.31
0.91
........................
0.91
0.64
0.24
0.24
1.12
........................
1.12
0.63
........................
13 0.26
0.89
........................
0.89
PO 00000
Frm 00056
Fmt 4703
Sfmt 4703
E:\FR\FM\27JYN1.SGM
27JYN1
42681
Federal Register / Vol. 71, No. 144 / Thursday, July 27, 2006 / Notices
[In percent]—Continued
rwilkins on PROD1PC63 with NOTICES
Management
fees
• Oppenheimer
Main
Street
Fund—Class A ........................
Substitute Fund:
• ING PIMCO High Yield Portfolio—Class I 14 .......................
Replaced Fund:
• Fidelity VIP High Income Portfolio—Initial Class ....................
Substitute Fund:
• ING Pioneer Equity Income
Portfolio—Class I 15 .................
Replaced Fund:
• Pioneer Equity Income VCT
Portfolio—Class I ....................
Substitute Fund:
• ING Pioneer Fund Portfolio—
Class I 16 .................................
Replaced Fund:
• Pioneer Fund VCT Portfolio—
Class I .....................................
Substitute Fund:
• ING Pioneer Fund Portfolio—
Class S 18 ................................
Replaced Fund:
• Pioneer Fund—Class A ..........
Substitute Fund:
• ING Pioneer High Yield Portfolio—Class I ...........................
Replaced Fund:
• Pioneer High Yield VCT Portfolio—Class I ...........................
Substitute Fund:
• ING Pioneer High Yield Portfolio—Class S ..........................
Replaced Fund:
• Pioneer High Yield Fund—
Class A ....................................
Substitute Fund:
• ING Pioneer Mid Cap Value
Portfolio—Class I 21 .................
Replaced Fund:
• Pioneer Mid Cap Value VCT
Portfolio—Class I ....................
Substitute Fund:
• ING Templeton Global Growth
Portfolio—Class I 22 .................
Replaced Fund:
• Templeton
Growth
Fund,
Inc.—Class A ..........................
Substitute Fund:
• ING Pioneer Fund Portfolio—I
Class 23 ....................................
Replaced Fund:
• AIM V.I. Core Equity Fund—
Series I ....................................
Substitute Fund:
• ING UBS U.S. Small Cap
Growth Portfolio—Class S ......
Replaced Fund:
• UBS U.S. Small Cap Growth
Fund—Class A ........................
Substitute Fund:
• ING VP Balanced Portfolio—
Class I .....................................
Replaced Fund:
• Fidelity VIP Asset Manager
Portfolio—Initial Class .............
Substitute Fund:
• ING VP Index Plus International Equity Portfolio—
Class S ....................................
VerDate Aug<31>2005
16:46 Jul 26, 2006
Jkt 208001
Distribution
(12b–1) fees
Other
expenses
Total annual
expenses
Expense
waivers
Net annual
expenses
0.46
0.24
0.22
0.92
........................
0.92
0.49
........................
0.01
0.50
........................
0.50
0.57
........................
0.13
0.70
........................
0.70
0.65
........................
0.20
0.85
0.15
0.70
0.65
........................
0.06
0.71
........................
0.71
0.725
........................
0.01
0.735
0.65
........................
0.05
0.70
0.725
........................
19 0.26
0.53
0.25
0.28
1.06
........................
1.06
0.60
........................
0.21
0.81
0.06
0.75
0.65
........................
0.12
0.77
........................
0.77
0.60
........................
20 0.46
1.06
0.06
1.00
0.61
0.25
0.20
1.06
........................
1.06
0.64
........................
0.01
0.65
........................
0.65
0.65
........................
0.06
0.71
........................
0.71
0.93
........................
0.01
0.94
........................
0.94
0.58
0.25
0.23
1.06
........................
1.06
0.725
........................
0.01
0.735
0.60
........................
0.27
0.87
........................
0.87
0.85
........................
24 0.46
1.31
0.06
1.25
0.85
0.25
0.49
1.59
0.31
1.28
0.50
........................
0.10
0.60
........................
0.60
0.52
........................
0.12
0.64
........................
0.64
0.45
........................
25 0.59
1.04
0.24
0.80
PO 00000
Frm 00057
Fmt 4703
Sfmt 4703
E:\FR\FM\27JYN1.SGM
0.985
27JYN1
17 0.05
........................
0.05
0.05
0.685
0.70
0.935
0.685
42682
Federal Register / Vol. 71, No. 144 / Thursday, July 27, 2006 / Notices
[In percent]—Continued
Management
fees
Replaced Fund:
• Fidelity VIP Overseas Portfolio—Initial Class ....................
Substitute Fund:
• ING Wells Fargo Small Cap
Disciplined Portfolio—Class S
Replaced Fund:
• Lord Abbett Small-Cap Value
Fund—Class A ........................
Replaced Fund:
• Evergreen Special Values
Fund—Class A ........................
Distribution
(12b–1) fees
Other
expenses
Total annual
expenses
Expense
waivers
Net annual
expenses
0.72
........................
0.17
0.89
........................
0.89
0.72
........................
26 0.46
1.18
0.06
1.12
0.72
0.30
0.21
1.23
........................
1.23
0.78
0.25
0.34
1.37
........................
1.37
1 The
rwilkins on PROD1PC63 with NOTICES
‘‘Other Expenses’’ of this portfolio includes a Shareholder Services Fee of 0.25%.
2 The ‘‘Other Expenses’’ of this portfolio includes a Shareholder Services Fee of 0.25%.
3 This Substitute Fund is subject to a unified fee arrangement.
4 The ‘‘Other Expenses’’ of this portfolio includes a Shareholder Services Fee of 0.25%.
5 The ‘‘Other Expenses’’ of this portfolio includes a Shareholder Services Fee of 0.25%.
6 The ‘‘Other Expenses’’ of this portfolio includes a Shareholder Services Fee of 0.25%.
7 This Substitute Fund is subject to a unified fee arrangement.
8 The ‘‘Other Expenses’’ of this portfolio includes a Shareholder Services Fee of 0.25%.
9 This Substitute Fund is subject to a unified fee arrangement.
10 This Substitute Fund is subject to a unified fee arrangement.
11 The ‘‘Other Expenses’’ of this portfolio includes a Shareholder Services Fee of 0.25%.
12 This Substitute Fund is subject to a unified fee arrangement.
13 The ‘‘Other Expenses’’ of this portfolio includes a Shareholder Services Fee of 0.25%.
14 This Substitute Fund is subject to a unified fee arrangement.
15 This portfolio is not yet operational but will be before the effective date of the substitutions. Fees and expenses on the Effective Date will be
as shown.
16 This Substitute Fund is subject to a unified fee arrangement.
17 Directed Services, Inc. has agreed to a permanent expense cap on Management Fees and Other Expenses so that beginning on the Effective Date of the Substitutions the Total Net Annual Expenses for the Class I shares will never exceed 0.70%.
18 This Substitute Fund is subject to a unified fee arrangement.
19 The ‘‘Other Expenses’’ of this portfolio includes a Shareholder Services Fee of 0.25%.
20 The ‘‘Other Expenses’’ of this portfolio includes a Shareholder Services Fee of 0.25%.
21 This Substitute Fund is subject to a unified fee arrangement.
22 This Substitute Fund is subject to a unified fee arrangement.
23 This Substitute Fund is subject to a unified fee arrangement.
24 The ‘‘Other Expenses’’ of this portfolio includes a Shareholder Services Fee of 0.25%.
25 The ‘‘Other Expenses’’ of this portfolio includes a Shareholder Services Fee of 0.25%.
26 The ‘‘Other Expenses’’ of this portfolio includes a Shareholder Services Fee of 0.25%.
Investment Objectives and Policies
The investment objectives of each
Replaced and Substitute Fund follow:
18. ING Baron Asset Portfolio for the
Baron Asset Fund. The ING Baron Asset
Portfolio is patterned after the Baron
Asset Fund and these two portfolios
have the same investment objectives
and policies. The investment objective
of both portfolios is to seek capital
appreciation.
19. ING Baron Small Cap Growth
Portfolio for the Baron Growth Fund.
The ING Baron Small Cap Growth
Portfolio is patterned after the Baron
Growth Fund and these two portfolios
have the same investment objectives
and policies. The investment objective
of both portfolios is to seek capital
appreciation.
20. ING FMR Diversified Mid Cap
Portfolio for the Fidelity Advisor Mid
Cap Fund. The ING FMR Diversified
Mid Cap Portfolio and the Fidelity
Advisor Mid Cap Fund have the same
investment objective, to seek long-term
growth of capital. Each fund intends to
meet its objective by normally investing
VerDate Aug<31>2005
16:46 Jul 26, 2006
Jkt 208001
at least 80% of its assets in securities of
companies with medium market
capitalizations.
21. ING FMR Earnings Growth
Portfolio for the Fidelity VIP Growth
Portfolio. The investment objective of
the ING FMR Earnings Growth Portfolio
is to seek growth of capital over the long
term. The investment objective of
Fidelity VIP Growth Portfolio is to seek
to achieve capital appreciation.
22. ING FMR Earnings Growth
Portfolio for the AIM V.I. Capital
Appreciation Fund. The investment
objective of the ING FMR Earnings
Growth Portfolio and the AIM V.I.
Capital Appreciation Fund is to seek
growth of capital over the long term.
23. ING FMR Equity Income Portfolio
for the Fidelity VIP Equity-Income
Portfolio. The ING FMR Equity Income
Portfolio is patterned after the Fidelity
VIP Equity-Income Portfolio and these
two portfolios have the same investment
objectives and policies. The investment
objective of both portfolios is to seek
capital appreciation and reasonable
income.
PO 00000
Frm 00058
Fmt 4703
Sfmt 4703
24. ING JPMorgan Value
Opportunities Portfolio for the
AllianceBernstein Growth and Income
Portfolio. The investment objective of
the ING JPMorgan Value Opportunities
Portfolio is to provide long-term capital
appreciation. The investment objective
of the AllianceBernstein Growth and
Income Portfolio is to seek long-term
growth of capital.
25. ING JPMorgan Value
Opportunities Portfolio for the
AllianceBernstein Growth and Income
Fund. The investment objective of the
ING JPMorgan Value Opportunities
Portfolio is to provide long-term capital
appreciation. The investment objective
of the AllianceBernstein Growth and
Income Fund is to seek long-term
growth of capital.
26. ING Legg Mason Value Portfolio
for the Legg Mason Value Trust, Inc.
The ING Legg Mason Value Portfolio is
patterned after the Legg Mason Value
Trust, Inc., and these two portfolios
have the same investment objectives
and policies. The investment objective
E:\FR\FM\27JYN1.SGM
27JYN1
rwilkins on PROD1PC63 with NOTICES
Federal Register / Vol. 71, No. 144 / Thursday, July 27, 2006 / Notices
of both portfolios is to seek long-term
growth of capital.
27. ING Lord Abbett Affiliated
Portfolio for the Lord Abbett Series
Fund—Growth and Income Portfolio.
The investment objective of the ING
Lord Abbett Affiliated Portfolio is longterm growth of capital with current
income a secondary objective. The Lord
Abbett Series Fund—Growth and
Income Portfolio has an investment
objective that seeks long-term growth of
capital and income.
28. ING Lord Abbett Affiliated
Portfolio for the Lord Abbett Affiliated
Fund. The ING Lord Abbett Affiliated
Portfolio is patterned after the Lord
Abbett Affiliated Fund and these two
portfolios have the same investment
objectives and policies. The investment
objective of both portfolios is to seek
long-term growth of capital and income.
29. ING MFS Total Return Portfolio
for the MFS Total Return Series. The
ING MFS Total Return Portfolio is
patterned after the MFS Total Return
Series and these two portfolios have the
same investment objectives and
policies. The investment objective of
both portfolios is to seek above average
income (compared to a portfolio entirely
invested in equity securities) consistent
with the prudent employment of capital.
30. ING Oppenheimer Global Portfolio
for the Oppenheimer Global Portfolio.
The investment objectives of the ING
Oppenheimer Global Portfolio and the
Oppenheimer Global Fund are the same.
Each fund seeks capital appreciation.
31. ING Oppenheimer Main Street
Portfolio for the Oppenheimer Main
Street Fund. The investment objective of
the ING Oppenheimer Main Street
Portfolio is long-term growth of capital
and future income. The investment
objective of the Oppenheimer Main
Street Fund is high total return (which
includes growth in the value of its
shares as well as current income) from
equity and debt securities.
32. ING PIMCO High Yield Portfolio
for the Fidelity VIP High Income
Portfolio. The investment objective of
the ING PIMCO High Yield Portfolio is
to seek maximum total return,
consistent with the preservation of
capital and prudent investment
management. The investment objective
of Fidelity VIP High Income Portfolio is
to seek a high level of current income,
while also considering growth of
capital.
33. ING Pioneer Equity Income
Portfolio for the Pioneer Equity Income
VCT Portfolio. The ING Pioneer Equity
Income Portfolio is patterned after the
Pioneer Equity Income VCT Portfolio
and these two portfolios have the same
investment objectives and policies. The
VerDate Aug<31>2005
16:46 Jul 26, 2006
Jkt 208001
investment objective of both portfolios
is to seek current income and long-term
growth of capital from a portfolio
consisting primarily of income
producing equity securities of U.S.
corporations.
34. ING Pioneer Fund Portfolio for the
Pioneer Fund VCT Portfolio. The ING
Pioneer Fund Portfolio is patterned after
the Pioneer Fund VCT Portfolio and
these two funds have the same
investment objectives and policies. The
investment objective of both portfolios
is to seek reasonable income and capital
growth.
35. ING Pioneer Fund Portfolio for the
Pioneer Fund. The ING Pioneer Fund
Portfolio is patterned after the Pioneer
Fund and these two funds have the
same investment objectives and
policies. The investment objective of
both portfolios is to seek reasonable
income and capital growth.
36. ING Pioneer High Yield Portfolio
for the Pioneer High Yield VCT
Portfolio. The ING Pioneer High Yield
Portfolio is patterned after the Pioneer
High Yield VCT Portfolio and these two
portfolios have the same investment
objectives and policies. The investment
objective of both portfolios is to seek
maximum total return through a
combination of income and capital
appreciation.
37. ING Pioneer High Yield Portfolio
for the Pioneer High Yield Fund. The
ING Pioneer High Yield Portfolio is
patterned after the Pioneer High Yield
Fund and these two funds have the
same investment objectives and
policies. The investment objective of
both portfolios is to seek maximum total
return through a combination of income
and capital appreciation.
38. ING Pioneer Mid Cap Value
Portfolio for the Pioneer Mid Cap Value
VCT Portfolio. The ING Pioneer Mid
Cap Value Portfolio is patterned after
the Pioneer Mid Cap Value VCT
Portfolio and these two funds have the
same investment objectives and
policies. The investment objective of
both portfolios is to seek capital
appreciation.
39. ING Templeton Global Growth
Portfolio for the Templeton Growth
Fund, Inc. The ING Templeton Global
Growth Portfolio is patterned after the
Templeton Growth Fund, Inc. and these
two funds have similar investment
objectives and policies. The investment
objective of the ING Templeton Global
Growth Portfolio is to seek capital
appreciation. The Templeton Growth
Fund, Inc. seeks long-term capital
growth.
40. ING Pioneer Fund Portfolio for the
AIM V.I. Core Equity Fund. The
investment objective of the ING Pioneer
PO 00000
Frm 00059
Fmt 4703
Sfmt 4703
42683
Fund Portfolio is reasonable income and
capital growth. The investment
objective of the AIM V.I. Core Equity
Series is growth of capital.
41. ING UBS U.S. Small Cap Growth
Portfolio for the UBS U.S. Small Cap
Growth Fund. The ING UBS U.S. Small
Cap Growth Portfolio is patterned after
the UBS Small Cap Growth Fund and
these two funds have the same
investment objectives and policies. The
investment objective of both portfolios
is to seek to provide long-term capital
appreciation.
42. ING VP Balanced Portfolio, Inc.
for the Fidelity VIP Asset Manager
Portfolio. The investment objective of
the ING VP Balanced Portfolio is to seek
to maximize investment return,
consistent with reasonable safety of
principal, by investing in a diversified
portfolio of one or more of the following
asset classes: stocks, bonds and cash
equivalents, based on the judgment of
the portfolio’s management, of which of
those sectors or mix thereof offers the
best investment prospects. The
investment objective of Fidelity VIP II
Asset Manager Portfolio is to seek to
obtain high total return with reduced
risk over the long-term by allocating its
assets among stocks, bonds and shortterm instruments.
43. ING VP Index Plus International
Equity Portfolio for the Fidelity VIP
Overseas Portfolio. The ING VP
IndexPlus International Equity Portfolio
seeks to outperform the total return
performance of the Morgan Stanley
Capital International EAFE Index (MSCI
EAFE). The investment objective of the
Fidelity VIP Overseas Portfolio is longterm growth of capital.
44. ING Wells Fargo Small Cap
Disciplined Portfolio for the Lord Abbett
Small-Cap Value Fund. The investment
objective of both the ING Wells Fargo
Small Cap Disciplined Portfolio and
Lord Abbett Small-Cap Value Fund is
long-term capital appreciation.
45. ING Wells Fargo Small Cap
Disciplined Portfolio for the Evergreen
Special Values Fund. The investment
objective of the ING Wells Fargo Small
Cap Disciplined Portfolio is long-term
capital appreciation. The objective of
the Evergreen Special Values Fund is to
seek growth of capital.
Implementation of the Substitutions
46. Applicants will effect the
Substitutions as soon as practicable
following the issuance of the requested
order. As of the Effective Date of the
Substitutions, shares of each Replaced
Fund will be redeemed for cash or inkind. The Companies, on behalf of each
Replaced Fund subaccount of each
relevant Account, will simultaneously
E:\FR\FM\27JYN1.SGM
27JYN1
rwilkins on PROD1PC63 with NOTICES
42684
Federal Register / Vol. 71, No. 144 / Thursday, July 27, 2006 / Notices
place a redemption request with the
Replaced Fund and a purchase order
with the corresponding Substitute Fund
so that the purchase of Substitute Fund
shares will be for the exact amount of
the redemption proceeds. Thus,
Contract values will remain fully
invested at all times. The proceeds of
such redemptions will then be used to
purchase the appropriate number of
shares of the applicable Substitute
Fund.
47. The Substitutions will take place
at relative net asset value (in accordance
with Rule 22c–1 under the 1940 Act)
with no change in the amount of any
Affected Contract Owner’s (defined
below) account value or death benefit,
or in the dollar value of his or her
investment in the applicable Account.
Any in-kind redemption of shares of a
Replaced Fund or in-kind purchase of
shares of the corresponding Substitute
Fund will, except as noted below, take
place in substantial compliance with the
conditions of Rule 17a–7 under the 1940
Act. No brokerage commissions, fees or
other remuneration will be paid by
either the Replaced Fund or the
corresponding Substitute Fund or by
Affected Contract Owners in connection
with the Substitutions. The transactions
comprising the Substitutions will be
consistent with the policies of each
investment company involved and with
the general purposes of the 1940 Act.
48. Contract owners with interests in
the subaccounts of each Replaced Fund
(individually, an ‘‘Affected Contract
Owner’’ and, collectively, ‘‘Affected
Contract Owners’’) will not incur any
fees or charges as a result of the
Substitutions nor will their rights or the
Companies’ obligations under the
Contracts be altered in any way. The
Companies or their affiliates will pay all
expenses and transaction costs of the
Substitutions, including legal and
accounting expenses, any applicable
brokerage expenses, and other fees and
expenses. In addition, the Substitutions
will not impose any tax liability on
Affected Contract Owners. The
Substitutions will not cause the
Contract fees and charges currently
being paid by Affected Contract Owners
to be greater after the Substitutions than
before the Substitutions. Also, as
described more fully below, after
notification of the Substitutions and for
30 days after the Substitutions, Affected
Contract Owners may reallocate to any
other investment options available
under their Contract the subaccount
value of the Replaced Fund without
incurring any administrative costs or
allocation (transfer) charges.
49. All Affected Contract Owners
were notified of this Application by
VerDate Aug<31>2005
16:46 Jul 26, 2006
Jkt 208001
means of supplements to the Contract
prospectuses, shortly after the date of
this Application. Among other
information regarding the Substitutions,
the supplements informed Affected
Contract Owners that beginning on the
date of the first supplement the
Companies will not exercise any rights
reserved by them under the Contracts to
impose restrictions or fees on transfers
from the Replaced Funds (other than
restrictions related to frequent or
disruptive transfers) until at least 30
days after the Effective Date of the
Substitutions. Following the date the
order requested by the Application is
issued, but before the Effective Date,
Affected Contract Owners will receive a
second supplement to the Contract
prospectus setting forth the Effective
Date and advising Affected Contract
Owners of their right, if they so choose,
at any time prior to the Effective Date,
to reallocate or withdraw accumulated
value in the relevant Replaced Fund
subaccounts under their Contracts or
otherwise terminate their interest
therein in accordance with the terms
and conditions of their Contracts. If
Affected Contract Owners reallocate
account value prior to the Effective Date
or within 30 days after the Effective
Date, there will be no charge for the
reallocation of accumulated value from
each Replaced Fund subaccount and the
reallocation will not count as a transfer
when imposing any applicable
restriction or limit under the Contract
on transfers. The Companies will not
exercise any right they may have under
the Contracts to impose additional
restrictions or fees on transfers from the
Replaced Funds under the Contracts
(other than restrictions related to
frequent or disruptive transfers) for a
period of at least 30 days following the
Effective Date of the Substitutions.
Additionally, all current Contract
Owners will be sent prospectuses of the
Substitute Funds before the Effective
Date.
50. Within five (5) business days after
the Effective Date, Affected Contract
Owners will be sent a written
confirmation (‘‘Post-Substitution
Confirmation’’) indicating that shares of
the Replaced Funds have been
redeemed and that the shares of
Substitute Funds have been substituted.
The Post-Substitution Confirmation will
show how the allocation of the Affected
Contract Owner’s account value before
and immediately following the
Substitutions have changed as a result
of the Substitutions and detail the
transactions effected on behalf of the
respective Affected Contract Owner
because of the Substitutions.
PO 00000
Frm 00060
Fmt 4703
Sfmt 4703
Applicant’s Legal Analysis
1. Applicants represent that each of
the prospectuses for the Contracts
expressly discloses the reservation of
the Companies right, subject to
compliance with applicable law, to
substitute shares of another open-end
management investment company for
shares of an open-end management
investment company held by a
subaccount of an Account.
2. Registrants state that the
Companies reserved this right of
substitution both to protect themselves
and their Contract Owners in situations
where either might be harmed or
disadvantaged by circumstances
surrounding the issuer of the shares
held by one or more of its separate
accounts and to afford the opportunity
to replace such shares where to do so
could benefit the Contract Owners and
Companies.
3. Applicants maintain that Contract
Owners will be better served by the
proposed Substitutions. Applicants
anticipate that the replacement of
certain Replaced Funds will result in a
Contract that is administered and
managed more efficiently, and one that
is more competitive with other variable
products in both wholesale and retail
markets. For all of the proposed
substitutions, each Substitute Fund (or
sub-adviser managing a similar fund for
those Substitute Funds without a
performance history) generally has had
comparable or more consistent
investment performance than the
corresponding Replaced Fund that it
would replace. Moreover, each
Substitute Fund has fees that are the
same as or less than the corresponding
Replaced Fund. Applicants state that for
all of the proposed substitutions, the
investment objective and policies of
each Substitute Fund are the same as,
similar to, or consistent with the
investment objective and policies of the
corresponding Replaced Fund.
4. Applicants anticipate that Contract
Owners will be at least as well off with
the proposed array of subaccounts to be
offered after the proposed substitutions
as they have been with the array of
subaccounts offered before the
substitutions. The proposed
substitutions retain for Contract Owners
the investment flexibility which is a
central feature of the Contracts. If the
proposed substitutions are carried out,
all Contract Owners will be permitted to
allocate purchase payments and transfer
accumulated values and contract values
between and among the remaining
subaccounts as they could before the
proposed substitutions. The number of
available subaccounts varies from
E:\FR\FM\27JYN1.SGM
27JYN1
rwilkins on PROD1PC63 with NOTICES
Federal Register / Vol. 71, No. 144 / Thursday, July 27, 2006 / Notices
Contract to Contract, but the average
number of available subaccounts in all
Contracts is approximately 67 and the
smallest number of available
subaccounts in any one Contract after
the Substitutions is 22, the same
number of available subaccounts as
before the Substitutions.
5. Applicants assert that each of the
proposed substitutions is not the type of
substitution which Section 26(c) was
designed to prevent. Unlike traditional
unit investment trusts where a depositor
could only substitute an investment
security in a manner which
permanently affected all the investors in
the trust, the Contracts provide each
Contract Owner with the right to
exercise his or her own judgment and
transfer contract values into other
subaccounts. Moreover, the Contracts
will offer Contract Owners the
opportunity to transfer amounts out of
the subaccounts which invest in the
Replaced Funds into any of the
remaining subaccounts without cost or
other disadvantage. The proposed
substitutions, therefore, will not result
in the type of costly forced redemption
which Section 26(c) was designed to
prevent.
6. Applicants maintain that by
purchasing a Contract, Contract owners
select much more than a particular
investment company in which to invest
their account values. They also select
the specific types of insurance coverages
offered by the various Companies under
the Contracts as well as numerous other
rights and privileges set forth in each
Contract. Contract Owners may also
have considered the size, financial
condition, type, and reputation of ING
and the various Companies. These
factors will not change because of the
proposed substitutions.
7. Applicants maintain that the terms
of the Substitutions, including the
consideration to be paid and received by
each Replaced Fund or Substitute Fund,
are reasonable, fair and do not involve
overreaching principally because the
transactions do not cause owners’
interests under a Contract to be diluted,
and because the transactions will
conform with the principal conditions
enumerated in Rule 17a–7. The
proposed transactions will take place at
relative net asset value with no change
in the amount of any Contract Owner’s
contract value, cash value,
accumulation value, account value or
death benefit or in the dollar value of
his or her investment in any of the
Accounts.
8. Applicants submit that the
Substitutions by the Companies are
consistent with the policies of each
Substitute Fund and each Replaced
VerDate Aug<31>2005
16:46 Jul 26, 2006
Jkt 208001
Fund, as recited in the current
registration statements and reports filed
by each under the 1940 Act.
9. Applicants submit that, to the
extent that the Substitutions are deemed
to involve principal transactions
between affiliates, the procedures and
terms and descriptions described in the
Application demonstrate that neither
the Replaced Funds, the Substitute
Funds, the Accounts nor any other
Applicant will be participating in the
Substitutions on a basis less
advantageous than that of any other
participant. Even though the Applicants
may not rely on Rule 17a–7, Applicants
believe that the Rule’s conditions
outline the type of safeguards that result
in transactions that are fair and
reasonable to registered investment
company participants and preclude
overreaching in connection with an
investment company by its affiliated
persons.
10. The boards of trustees or directors,
as applicable, of each Replaced Fund
and ING Investors Trust, ING Partners,
Inc., and ING VP Balanced Portfolio,
Inc. have adopted procedures, as
required by paragraph (e)(1) of Rule
17a–7, pursuant to which the portfolios
or funds of each may purchase and sell
securities to and from their affiliates.
The Companies and the investment
advisers will carry out the Substitutions
in conformity with the principal
conditions of Rule 17a–7 and each
Replaced Fund’s and the Substitute
Fund’s procedures thereunder. Also no
brokerage commission, fee, or other
remuneration will be paid to any party
in connection with the proposed
transactions.
11. Except as noted below, applicants
state that the Substitutions will take
place in accordance with the
requirements enumerated in Rule 17a–
7 under the 1940 Act and with the
approval of the applicable board of ING
Investors Trust, ING Partners, and ING
VP Balanced Portfolio, Inc., except that
the Substitutions may be effected in
cash or in-kind.
12. With regard to the Substitutions
involving in-kind transfers, the
investment adviser of each Substitute
Fund and the investment adviser to the
corresponding Replaced Fund intend to
value securities selected for transfer
between the two funds in a manner that
is consistent with the current
methodology used to calculate the daily
net asset value of the Replaced Fund.
Where a Replaced Fund’s investment
adviser employs certain third party,
independent pricing services to value
securities held by the Replaced Fund
(‘‘Vendor Pricing’’), the investment
adviser of each Substitute Fund and the
PO 00000
Frm 00061
Fmt 4703
Sfmt 4703
42685
corresponding Replaced Fund’s
investment adviser intend to employ
Vendor Pricing to value securities held
by the Replaced Fund that are selected
for transfer to the Substitute Fund.
Vendor Pricing may be used in each of
the Substitutions. Generally, the
redemption of securities from the
Replaced Fund and subsequent transfer
to the Substitute Fund will be done on
a pro-rata basis. In the event that a
Replaced Fund holds illiquid or
restricted securities or assets that are not
otherwise readily distributable or if a
pro-rata transfer of securities would
result in the parties holding odd lots,
the investment advisers may agree to
have a Replaced Fund transfer to the
Substitute Fund an equivalent amount
of cash instead of securities.
13. Applicants submit that the
Substitutions are consistent with the
general purposes of the 1940 Act. The
proposed transactions do not present
any of the issues or abuses that the 1940
Act is designed to prevent. Moreover,
the proposed transactions will be
effected in a manner consistent with the
public interest and the protection of
investors, as required by Section 6(c) of
the 1940 Act. Contract Owners will be
fully informed of the terms of the
Substitutions through the supplements
and the Post-Substitution Confirmation
and will have an opportunity to
withdraw from the Replaced Fund
through reallocation to another
subaccount or otherwise terminate their
interest thereof in accordance with the
terms and conditions of their Contract
prior to the Effective Date.
Applicant’s Conditions
For purposes of the approval sought
pursuant to Section 26(c) of the 1940
Act, the substitutions described in the
application will not be completed
unless all of the following conditions
are met:
1. Each Substitute Fund has an
investment objective and investment
policies that are the same as, similar to
or consistent with the investment
objective and policies of the
corresponding Replaced Fund, so that
the objective of the Affected Contract
Owners can continue to be met.
2. For two years following the
implementation of the Substitutions
described herein, the net annual
expenses of each Substitute Fund will
not exceed the net annual expenses of
the corresponding Replaced Fund
immediately preceding the
Substitutions except for the ING Pioneer
Fund Portfolio where Directed Services,
Inc. has agreed to a permanent expense
cap on management fees and other
expenses so that beginning on the
E:\FR\FM\27JYN1.SGM
27JYN1
rwilkins on PROD1PC63 with NOTICES
42686
Federal Register / Vol. 71, No. 144 / Thursday, July 27, 2006 / Notices
effective date of the Substitutions total
net annual expenses for the Class I
shares will never exceed 0.70%. To
achieve these limitations, Directed
Services, Inc., ING Investments, LLC
and ING Life, as applicable, will waive
fees or reimburse the appropriate
Substitute Fund in certain amounts to
maintain expenses at or below the limit.
Any adjustments or reimbursements
will be made at least on a quarterly
basis. In addition, the Companies will
not increase the Contract fees and
charges, including asset based charges
such as mortality and expense risk
charges deducted from the subaccounts
that would otherwise be assessed under
the terms of the Contracts for a period
of at least two years following the
Substitutions.
3. Affected Contract Owners may
reallocate amounts from any of the
Replaced Funds without incurring a
reallocation charge or limiting their
number of future reallocations, or
withdraw amounts under any affected
Contract or otherwise terminate their
interest therein at any time prior to the
Effective Date and for a period of at least
30 days following the Effective Date in
accordance with the terms and
conditions of such Contract. Any such
reallocation will not count as a transfer
when imposing any applicable
restriction or limit under the Contract
on transfers.
4. The Substitutions will be effected
at the net asset value of the respective
shares in conformity with Section 22(c)
of the 1940 Act and Rule 22c–1
thereunder, without the imposition of
any transfer or similar charge by
Applicants.
5. The Substitutions will take place at
relative net asset value without change
in the amount or value of any Contract
held by Affected Contract Owners.
Affected Contract Owners will not incur
any fees or charges as a result of the
Substitutions, nor will their rights or the
obligations of the Companies under
such Contracts be altered in any way. In
addition, the Companies will not
increase the Contract fees and charges
currently being assessed under the
Contracts for a period of at least two
years following the Substitutions.
6. The Substitutions will be effected
so that the investment of securities will
be consistent with the investment
objectives, policies and diversification
requirements of the relevant Substitute
Fund. No brokerage commissions, fees
or other remuneration will be paid by
any Replaced Fund or the
corresponding Substitute Fund or
Affected Contract Owners in connection
with the Substitutions.
VerDate Aug<31>2005
16:46 Jul 26, 2006
Jkt 208001
7. The Substitutions will not alter in
any way the annuity, life or tax benefits
afforded under the Contracts held by
any Affected Contract Owner.
8. The Companies will send to their
Affected Contract Owners within five
(5) business days of the Substitutions a
written Post-Substitution Confirmation
which will include the before and after
account values (which will not have
changed as a result of the Substitutions)
and detail the transactions effected on
behalf of the respective Affected
Contract Owner with regard to the
Substitutions. With the PostSubstitution Confirmations the
Companies will remind Affected
Contract Owners that they may
reallocate amounts from any of the
Replaced Funds without incurring a
reallocation charge or limiting their
number of future reallocations for a
period of at least 30 days following the
Effective Date in accordance with the
terms and conditions of their Contract.
9. Under the manager-of-managers
relief granted to the ING Investors Trust,
ING Partners and relied upon by certain
of the other ING funds, a vote of the
shareholders is not necessary to change
a sub-adviser, except for changes
involving an affiliated sub-adviser.
Notwithstanding this, after the Effective
Date of the Substitutions the Applicants
agree not to change a Substitute Fund’s
sub-adviser without first obtaining
shareholder approval of either: (a) The
sub-adviser change or (b) the
Applicants’ continued ability to rely on
their manager-of-managers relief.
10. The Companies or their affiliates
will pay all expenses and transaction
costs of the Substitutions, including
legal and accounting expenses, any
applicable brokerage expenses, and
other fees and expenses. In addition, the
Substitutions will not impose any tax
liability on Affected Contract Owners.
11. The Commission shall have issued
an order: (a) Approving the
Substitutions under Section 26(c) of the
1940 Act; and (b) exempting the in-kind
redemptions from the provisions of
Section 17(a) of the 1940 Act as
necessary to carry out the transactions
described in this Application.
12. A registration statement for each
Substitute Fund is effective, and the
investment objectives and policies and
fees and expenses for each of the
Substitute Funds as described herein
have been implemented.
13. Each Affected Contract Owner
will have been sent a copy of: (a) A
Contract prospectus supplement
informing shareholders of this
Application; (b) a prospectus for the
appropriate Substitute Fund; and (c) a
second supplement to the Contract
PO 00000
Frm 00062
Fmt 4703
Sfmt 4703
prospectus setting forth the Effective
Date and advising Affected Contract
Owners of their right to reconsider the
Substitutions and, if they so choose, any
time prior to the Effective Date and for
30 days thereafter, to reallocate or
withdraw amounts under their affected
Contract or otherwise terminate their
interest therein in accordance with the
terms and conditions of their Contract.
14. The Companies shall have
satisfied themselves, that: (a) The
Contracts allow the substitution of
investment company shares in the
manner contemplated by the
Substitutions and related transactions
described herein; (b) the transactions
can be consummated as described in
this Application under applicable
insurance laws; and (c) any regulatory
requirements in each jurisdiction where
the Contracts are qualified for sales have
been complied with to the extent
necessary to complete the transactions.
15. The Shareholder Services Fee of
the Class S shares of the ING FMR
Diversified Mid Cap Portfolio, the ING
Legg Mason Value Portfolio, the ING
Oppenheimer Main Street Portfolio and
the ING Pioneer Fund Portfolio will be
permanently capped at .25%.
Conclusion
Applicants assert that for the reasons
summarized above the proposed
substitutions and related transactions
meet the standards of Section 26(c) of
the 1940 Act and are consistent with the
standards of Section 17(b) of the 1940
Act and that the requested orders
should be granted.
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6–11978 Filed 7–26–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meeting; Notice
FEDERAL REGISTER CITATION OF PREVIOUS
ANNOUNCEMENT: 71 FR 41484, July 21,
2006.
Closed Meeting.
100 F Street, NW., Washington,
STATUS:
PLACE:
DC.
DATE AND TIME OF PREVIOUSLY ANNOUNCED
MEETING: Thursday, July 27, 2006 at 2
p.m.
Deletion of Item.
The following item will not be
considered during the Closed Meeting
CHANGE IN THE MEETING:
E:\FR\FM\27JYN1.SGM
27JYN1
]]>Agencies
[Federal Register Volume 71, Number 144 (Thursday, July 27, 2006)]
[Notices]
[Pages 42677-42686]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-11978]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. IC-27423; File No. 812-13260]
ING Life Insurance and Annuity Company, et al., Notice of
Application
July 20, 2006.
AGENCY: The Securities and Exchange Commission (``Commission'').
ACTION: Notice of application for an order pursuant to Section 26(c) of
the Investment Company Act of 1940 (``1940 Act'' or ``Act''), approving
certain substitutions of securities and for an order of exemption
pursuant to Section 17(b) of the Act.
-----------------------------------------------------------------------
Applicants: ING Life Insurance and Annuity Company, ING USA Annuity and
Life Insurance Company, ReliaStar Life Insurance Company, (each a
``Company'' and together, the ``Companies''), Variable Annuity Account
B of ING Life Insurance and Annuity Company, Variable Annuity Account C
of ING Life Insurance and Annuity Company, Variable Annuity Account I
of ING Life Insurance and Annuity Company, Separate Account B of ING
USA Annuity and Life Insurance Company, Separate Account N of Reliastar
Life Insurance Company (each, an ``Account'' and together, the
``Accounts''), ING Investors Trust, ING Partners, Inc., and ING VP
Balanced
[[Page 42678]]
Portfolio, Inc., collectively referred to herein as (the
``Applicants'').
Summary of Application: The Applicants request an order, pursuant to
Section 26(c) of the 1940 Act, permitting the substitutions of
securities issued by certain registered investment companies held by
the Accounts to support certain in force variable life insurance
policies and variable annuity contracts (collectively, the
``Contracts'') issued by the Companies. More particularly, the
Applicants propose to substitute shares of certain series of ING
Investors Trust and ING Partners, Inc., and certain shares of the ING
VP Balanced Portfolio, Inc. (the ``Substitute Funds'') for shares of
certain registered investment companies currently held by subaccounts
of the various Accounts (the ``Replaced Funds'') as follows:
------------------------------------------------------------------------
Replaced funds Substitute funds
------------------------------------------------------------------------
Baron Asset Fund....................... ING Baron Asset Portfolio--
Class S.
Baron Growth Fund...................... ING Baron Small Cap Growth
Portfolio--Class S.
Fidelity Advisor Mid Cap Fund--Class T. ING FMR Diversified Mid Cap
Portfolio--Class S.
Fidelity VIP Growth Portfolio--Initial ING FMR Earnings Growth
Class. Portfolio--Class I.
AIM V.I. Capital Appreciation Fund--
Series I
Fidelity VIP Equity-Income Portfolio-- ING FMR Equity Income
Initial Class. Portfolio--Class I.
Fidelity VIP Equity-Income Portfolio-- ING FMR Equity Income
Service Class 2. Portfolio--Class S.
AllianceBernstein Growth and Income ING JPMorgan Value
Portfolio--Class A. Opportunities Portfolio--Class
I.
Alliance Bernstein Growth and Income ING JPMorgan Value
Fund--Class A. Opportunities Portfolio--Class
S.
Legg Mason Value Trust, Inc.--Primary ING Legg Mason Value Portfolio
Class. Class S.
Lord Abbett Series Fund--Growth and ING Lord Abbett Affiliated
Income Portfolio--Class VC. Portfolio--Class I.
Lord Abbett Affiliated Fund--Class A
MFS Total Return Series--Initial Class. ING MFS Total Return Portfolio--
Class I.
Oppenheimer Global Fund--Class A....... ING Oppenheimer Global
Portfolio--Class S.
Oppenheimer Main Street Fund--Class A.. ING Oppenheimer Main Street
Portfolio--Class S.
Fidelity VIP High Income Portfolio-- ING PIMCO High Yield Portfolio--
Initial Class. Class I.
Pioneer Equity Income VCT Portfolio-- ING Pioneer Equity Income
Class I. Portfolio--Class I.
AIM V.I. Core Equity Fund--Series I.... ING Pioneer Fund Portfolio--
Class I.
Pioneer Fund VCT Portfolio--Class I.... ING Pioneer Fund Portfolio--
Class I.
Pioneer Fund--Class A.................. ING Pioneer Fund Portfolio--
Class S.
Pioneer High Yield VCT Portfolio--Class ING Pioneer High Yield
I. Portfolio-Class I.
Pioneer High Yield Fund--Class A....... ING Pioneer High Yield
Portfolio--Class S.
Pioneer Mid Cap Value VCT Portfolio-- ING Pioneer Mid Cap Value
Class I. Portfolio--Class I.
Templeton Growth Fund, Inc.--Class A... ING Templeton Global Growth
Portfolio--Class I.
UBS U.S. Small Cap Growth Fund--Class A ING UBS U.S. Small Cap Growth
Portfolio--Class S.
Fidelity VIP Asset Manager Portfolio-- ING VP Balanced Portfolio,
Initial Class. Inc.--Class I.
Fidelity VIP Overseas Portfolio-- ING VP Index Plus International
Initial Class. Equity Portfolio--Class S.
Lord Abbett Small-Cap Value Fund--Class ING Wells Fargo Small Cap
A. Disciplined Portfolio--Class
S.
Evergreen Special Values Fund--Class A
------------------------------------------------------------------------
Applicants also seek an order of exemption pursuant to Section
17(b) of the 1940 Act to permit certain in-kind redemptions and
purchases in connection with the substitutions.
Filing Date: The Application was filed on February 9, 2006. The
Application was amended and restated on June 30, 2006, and July 18,
2006.
Hearing or Notification of Hearing: An order granting the Application
will be issued unless the Commission orders a hearing. Interested
persons may request a hearing by writing to the Secretary of the
Commission and serving Applicants with a copy of the request,
personally or by mail. Hearing requests should be received by the
Commission by 5:30 p.m. on August 14, 2006, and should be accompanied
by proof of service on Applicants, in the form of an affidavit or, for
lawyers, a certificate of service. Hearing requests should state the
nature of the writer's interest, the reason for the request, and the
issues contested. Persons who wish to be notified of a hearing may
request notification by writing to the Secretary of the Commission.
ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street,
NE., Washington, DC 20549-1090. Applicants, J. Neil McMurdie, Esquire,
ING Americas U.S. Legal Services, 151 Farmington Avenue, TS31,
Hartford, CT 06156-8975.
FOR FURTHER INFORMATION CONTACT: Alison White, Senior Counsel, or Joyce
M. Pickholz, Branch Chief, Office of Insurance Products, Division of
Investment Management, at (202) 551-6795.
SUPPLEMENTARY INFORMATION: The following is a summary of the
Application. The complete Application is available for a fee from the
Public Reference Branch of the Commission, 100 F Street, NE., Room
1580, Washington, DC 20549.
Applicants' Representations
1. Each of the Companies is an indirect wholly owned subsidiary of
ING Groep, N.V. (``ING''). ING is a global financial services holding
company based in The Netherlands which is active in the field of
insurance, banking and asset management. As a result, each Company
likely would be deemed to be an affiliate of the others.
2. ING Life Insurance and Annuity Company (``ING Life'') is a stock
life insurance company organized under the laws of the State of
Connecticut in 1976 as Forward Life Insurance Company. Through a
December 31, 1976 merger, ING Life's operations include the business of
Aetna Variable Annuity Life Insurance Company (formerly known as
Participating Annuity Life Insurance Company). Through a December 31,
2005 merger, ING Life's operations include the business of ING
Insurance Company of America (``ING America''). Prior to May 1, 2002,
ING Life was known as Aetna Life Insurance and Annuity Company
(``Aetna''). ING Life is principally engaged in the business of issuing
life insurance and annuities.
3. ING USA Annuity and Life Insurance Company (``ING USA'') is an
Iowa stock life insurance company which was originally organized in
1973 under the insurance laws of Minnesota. Through January 1, 2004
mergers, ING USA's operations include the business of Equitable Life
Insurance Company of Iowa, United Life and Annuity
[[Page 42679]]
Insurance Company, and USG Annuity and Life Company. Prior to January
1, 2004, ING USA was known as Golden American Life Insurance Company
(``Golden''). ING USA is principally engaged in the business of issuing
life insurance and annuities.
4. ReliaStar Life Insurance Company (``ReliaStar'') is a stock life
insurance company organized in 1885 and incorporated under the laws of
the State of Minnesota. Through an October 1, 2002 merger, ReliaStar's
operations include the business of Northern Life Insurance Company
(``Northern''). ReliaStar is principally engaged in the business of
issuing life insurance, annuities, employee benefits and retirement
contracts.
5. Each of the Accounts is a segregated asset account of the
Company that is the depositor of such Account, and is registered under
the 1940 Act as a unit investment trust. Each of the respective
Accounts is used by the Company of which it is a part to support the
Contracts that it issues.
6. Variable Annuity Account B of ING Life Insurance and Annuity
Company (``ING Life B'') (File No. 811-2512) was established by Aetna
in 1976 as a continuation of the separate account established in 1974
under the laws of the State of Arkansas by Aetna Variable Annuity Life
Insurance Company to support certain Contracts.
7. Variable Annuity Account C of ING Life Insurance and Annuity
Company (``ING Life C''). ING Life C (formerly Variable Annuity Account
C of Aetna Life Insurance and Annuity Co) (File No. 811-2513) was
established by Aetna in 1976 as a continuation of the separate account
established in 1974 in accordance with the laws of the State of
Arkansas by Aetna Variable Annuity Life Insurance Company to support
certain Contracts.
8. Variable Annuity Account I of ING Life Insurance and Annuity
Company (``ING Life I''), (formerly ING Variable Annuity Account I of
ING Insurance Company of America) (File No. 811-8582), was established
by ING America (then known as Aetna Insurance Company of America) in
1994 under the laws of the State of Connecticut.
9. Separate Account B of ING USA Annuity and Life Insurance Company
(``ING USA B'') (File No. 811-5626) was established by Golden in 1988
under the laws of the State of Minnesota.
10. Separate Account N of ReliaStar Life Insurance Company
(``ReliaStar Separate Account N''), formerly Separate Account One of
Northern Life Insurance Company (File No. 811-9002), was established by
Northern in 1994 under the laws of the State of Washington.
11. Most of the Substitute Funds are series of ING Investors Trust
and ING Partners, Inc. ING VP Balanced Portfolio is also a Substitute
Fund.
12. ING Investors Trust, formerly known as the GCG Trust, was
organized as a Massachusetts business trust on August 3, 1988. ING
Investors Trust is registered under the 1940 Act as an open-end
management investment company (File No. 811-5629).
13. ING Partners, Inc. (``ING Partners''), formerly known as
Portfolio Partners, Inc., was organized as a Maryland Corporation in
1997 and commenced operations on November 28, 1997. ING Partners is
registered under the 1940 Act as an open-end management investment
company (File No. 811-08319).
14. ING VP Balanced Portfolio, Inc., formerly known as Aetna
Investment Advisers Fund, Inc., was organized as a Maryland Corporation
in 1988. ING VP Balanced Portfolio is registered under the 1940 Act as
an open-end management investment company (File No. 811-05773).
15. Directed Services, Inc., ING Investments, LLC, and ING Life are
registered as investment advisers under the Investment Adviser Act of
1940. Directed Services, Inc. provides or will provide overall
management services for each series of the ING Investors Trust except
for the ING VP Index Plus International Equity Portfolio. The ING VP
Index Plus International Equity Portfolio and ING VP Balanced
Portfolio, Inc. are advised by ING Investments, LLC. ING Life is the
investment adviser for each ING Partners portfolio.
16. The terms and conditions, including charges and expenses,
applicable to each Contract are described in the registration
statements filed with the Commission for each. The Contracts may be
issued as individual contracts or as group contracts where the owner is
the employer, sponsor or trustee of a group retirement plan. In the
case of group contracts, members of the group (``Participants'')
acquire an interest in the contract and have certain rights as
determined by the group contract and/or, if applicable, the retirement
plan covering the Participants' interests. As each Contract is
structured, owners of the Contract, or in the case of certain group
contracts, the Participant (each a ``Contract Owner'') may select one
or more of the investment options available under the Contract by
allocating premiums and transferring account value to that subaccount
of the relevant Account that corresponds to the investment option
desired. Thereafter, the account value of the Contract Owner will vary
based on the investment experience of the selected subaccount(s).
Generally, a Contract Owner may, during the life of each Contract, make
unlimited transfers of account values among the subaccounts available
under the Contract, subject to any administrative and/or transfer fees
applicable under the Contracts and any limits related to frequent or
disruptive transfers.
Comparison of Fees and Expenses
17. The comparative fees and expenses for each fund in the proposed
substitutions are as follows:
[In percent]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Management Distribution Total annual Expense Net annual
fees (12b-1) fees Other expenses expenses waivers expenses
--------------------------------------------------------------------------------------------------------------------------------------------------------
Substitute Fund:
ING Baron Asset Portfolio--S Class......... 0.95 .............. \1\ 0.46 1.41 0.11 1.30
Replaced Fund:
Baron Asset Fund........................... 1.00 0.25 0.09 1.34 .............. 1.34
Substitute Fund:
ING Baron Small Cap Growth Portfolio--S 0.85 .............. \2\ 0.48 1.33 0.02 1.31
Class..............................................
Replaced Fund:
Baron Growth Fund.......................... 1.00 0.25 0.06 1.31 .............. 1.31
Substitute Fund:
[[Page 42680]]
ING FMR Diversified Mid Cap Portfolio-- 0.65 .............. \4\ 0.26 0.91 .............. 0.91
Class S \3\........................................
Replaced Fund:
Fidelity Advisor Mid Cap Fund--Class T..... 0.57 0.50 0.24 1.31 .............. 1.31
Substitute Fund:
ING FMR Earnings Growth Portfolio--Class I. 0.57 .............. 0.15 0.72 0.05 0.67
Replaced Fund:
Fidelity VIP Growth Portfolio--Initial 0.57 .............. 0.10 0.67 .............. 0.67
Class..............................................
Replaced Fund:
AIM V.I. Capital Appreciation Fund--Series 0.61 .............. 0.29 0.90 .............. 0.90
I..................................................
Substitute Fund:
ING FMR Equity Income Portfolio--Class I... 0.47 .............. 0.13 0.60 0.04 0.56
Replaced Fund:
Fidelity VIP Equity-Income Portfolio-- 0.47 .............. 0.09 0.56 .............. 0.56
Initial Class......................................
Substitute Fund:
ING FMR Equity Income Portfolio--Class S... 0.47 .............. \5\ 0.38 0.85 0.04 0.81
Replaced Fund:
Fidelity VIP Equity-Income Portfolio-- 0.47 0.25 0.09 0.81 .............. 0.81
Service Class 2....................................
Substitute Fund:
ING JPMorgan Value Opportunities Portfolio-- 0.40 .............. 0.13 0.53 .............. 0.53
Class I............................................
Replaced Fund:
AllianceBernstein Growth and Income 0.55 .............. 0.04 0.59 .............. 0.59
Portfolio--Class A.................................
Substitute Fund:
ING JPMorgan Value Opportunities Portfolio-- 0.40 .............. \6\ 0.38 0.78 .............. 0.78
Class S............................................
Replaced Fund:
AllianceBernstein Growth and Income Fund-- 0.48 0.28 0.26 1.02 .............. 1.02
Class A............................................
Substitute Fund:
ING Legg Mason Value Portfolio--Class S \7\ 0.79 .............. \8\ 0.25 1.04 .............. 1.04
Replaced Fund:
Legg Mason Value Trust, Inc.--Primary Class 0.66 0.95 0.07 1.68 .............. 1.68
Substitute Fund:
ING Lord Abbett Affiliated Portfolio--Class 0.75 .............. .............. 0.75 .............. 0.75
I \9\..............................................
Replaced Fund:
Lord Abbett Series Fund--Growth and Income 0.48 .............. 0.41 0.89 .............. 0.89
Portfolio--Class VC................................
Replaced Fund:
Lord Abbett Affiliated Fund--Class A....... 0.30 0.35 0.17 0.82 .............. 0.82
Substitute Fund:
ING MFS Total Return Portfolio--Class I 0.64 .............. .............. 0.64 .............. 0.64
\10\...............................................
Replaced Fund:
MFS Total Return Series--Initial Class..... 0.75 .............. 0.09 0.84 .............. 0.84
Substitute Fund:
ING Oppenheimer Global Portfolio--Class S.. 0.60 .............. \11\ 0.31 0.91 .............. 0.91
Replaced Fund:
Oppenheimer Global Fund--Class A........... 0.64 0.24 0.24 1.12 .............. 1.12
Substitute Fund:
ING Oppenheimer Main Street Portfolio-- 0.63 .............. \13\ 0.26 0.89 .............. 0.89
Class S \12\.......................................
Replaced Fund:
[[Page 42681]]
Oppenheimer Main Street Fund--Class A...... 0.46 0.24 0.22 0.92 .............. 0.92
Substitute Fund:
ING PIMCO High Yield Portfolio--Class I 0.49 .............. 0.01 0.50 .............. 0.50
\14\...............................................
Replaced Fund:
Fidelity VIP High Income Portfolio--Initial 0.57 .............. 0.13 0.70 .............. 0.70
Class..............................................
Substitute Fund:
ING Pioneer Equity Income Portfolio--Class 0.65 .............. 0.20 0.85 0.15 0.70
I \15\.............................................
Replaced Fund:
Pioneer Equity Income VCT Portfolio--Class 0.65 .............. 0.06 0.71 .............. 0.71
I..................................................
Substitute Fund:
ING Pioneer Fund Portfolio--Class I \16\... 0.725 .............. 0.01 0.735 \17\ 0.05 0.685
Replaced Fund:
Pioneer Fund VCT Portfolio--Class I........ 0.65 .............. 0.05 0.70 .............. 0.70
Substitute Fund:
ING Pioneer Fund Portfolio--Class S \18\... 0.725 .............. \19\ 0.26 0.985 0.05 0.935
Replaced Fund:
Pioneer Fund--Class A...................... 0.53 0.25 0.28 1.06 .............. 1.06
Substitute Fund:
ING Pioneer High Yield Portfolio--Class I.. 0.60 .............. 0.21 0.81 0.06 0.75
Replaced Fund:
Pioneer High Yield VCT Portfolio--Class I.. 0.65 .............. 0.12 0.77 .............. 0.77
Substitute Fund:
ING Pioneer High Yield Portfolio--Class S.. 0.60 .............. \20\ 0.46 1.06 0.06 1.00
Replaced Fund:
Pioneer High Yield Fund--Class A........... 0.61 0.25 0.20 1.06 .............. 1.06
Substitute Fund:
ING Pioneer Mid Cap Value Portfolio--Class 0.64 .............. 0.01 0.65 .............. 0.65
I \21\.............................................
Replaced Fund:
Pioneer Mid Cap Value VCT Portfolio--Class 0.65 .............. 0.06 0.71 .............. 0.71
I..................................................
Substitute Fund:
ING Templeton Global Growth Portfolio-- 0.93 .............. 0.01 0.94 .............. 0.94
Class I \22\.......................................
Replaced Fund:
Templeton Growth Fund, Inc.--Class A....... 0.58 0.25 0.23 1.06 .............. 1.06
Substitute Fund:
ING Pioneer Fund Portfolio--I Class \23\... 0.725 .............. 0.01 0.735 0.05 0.685
Replaced Fund:
AIM V.I. Core Equity Fund--Series I........ 0.60 .............. 0.27 0.87 .............. 0.87
Substitute Fund:
ING UBS U.S. Small Cap Growth Portfolio-- 0.85 .............. \24\ 0.46 1.31 0.06 1.25
Class S............................................
Replaced Fund:
UBS U.S. Small Cap Growth Fund--Class A.... 0.85 0.25 0.49 1.59 0.31 1.28
Substitute Fund:
ING VP Balanced Portfolio--Class I......... 0.50 .............. 0.10 0.60 .............. 0.60
Replaced Fund:
Fidelity VIP Asset Manager Portfolio-- 0.52 .............. 0.12 0.64 .............. 0.64
Initial Class......................................
Substitute Fund:
ING VP Index Plus International Equity 0.45 .............. \25\ 0.59 1.04 0.24 0.80
Portfolio--Class S.................................
[[Page 42682]]
Replaced Fund:
Fidelity VIP Overseas Portfolio--Initial 0.72 .............. 0.17 0.89 .............. 0.89
Class..............................................
Substitute Fund:
ING Wells Fargo Small Cap Disciplined 0.72 .............. \26\ 0.46 1.18 0.06 1.12
Portfolio--Class S.................................
Replaced Fund:
Lord Abbett Small-Cap Value Fund--Class A.. 0.72 0.30 0.21 1.23 .............. 1.23
Replaced Fund:
Evergreen Special Values Fund--Class A..... 0.78 0.25 0.34 1.37 .............. 1.37
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.
\2\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.
\3\ This Substitute Fund is subject to a unified fee arrangement.
\4\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.
\5\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.
\6\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.
\7\ This Substitute Fund is subject to a unified fee arrangement.
\8\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.
\9\ This Substitute Fund is subject to a unified fee arrangement.
\10\ This Substitute Fund is subject to a unified fee arrangement.
\11\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.
\12\ This Substitute Fund is subject to a unified fee arrangement.
\13\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.
\14\ This Substitute Fund is subject to a unified fee arrangement.
\15\ This portfolio is not yet operational but will be before the effective date of the substitutions. Fees and expenses on the Effective Date will be
as shown.
\16\ This Substitute Fund is subject to a unified fee arrangement.
\17\ Directed Services, Inc. has agreed to a permanent expense cap on Management Fees and Other Expenses so that beginning on the Effective Date of the
Substitutions the Total Net Annual Expenses for the Class I shares will never exceed 0.70%.
\18\ This Substitute Fund is subject to a unified fee arrangement.
\19\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.
\20\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.
\21\ This Substitute Fund is subject to a unified fee arrangement.
\22\ This Substitute Fund is subject to a unified fee arrangement.
\23\ This Substitute Fund is subject to a unified fee arrangement.
\24\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.
\25\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.
\26\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.
Investment Objectives and Policies
The investment objectives of each Replaced and Substitute Fund
follow:
18. ING Baron Asset Portfolio for the Baron Asset Fund. The ING
Baron Asset Portfolio is patterned after the Baron Asset Fund and these
two portfolios have the same investment objectives and policies. The
investment objective of both portfolios is to seek capital
appreciation.
19. ING Baron Small Cap Growth Portfolio for the Baron Growth Fund.
The ING Baron Small Cap Growth Portfolio is patterned after the Baron
Growth Fund and these two portfolios have the same investment
objectives and policies. The investment objective of both portfolios is
to seek capital appreciation.
20. ING FMR Diversified Mid Cap Portfolio for the Fidelity Advisor
Mid Cap Fund. The ING FMR Diversified Mid Cap Portfolio and the
Fidelity Advisor Mid Cap Fund have the same investment objective, to
seek long-term growth of capital. Each fund intends to meet its
objective by normally investing at least 80% of its assets in
securities of companies with medium market capitalizations.
21. ING FMR Earnings Growth Portfolio for the Fidelity VIP Growth
Portfolio. The investment objective of the ING FMR Earnings Growth
Portfolio is to seek growth of capital over the long term. The
investment objective of Fidelity VIP Growth Portfolio is to seek to
achieve capital appreciation.
22. ING FMR Earnings Growth Portfolio for the AIM V.I. Capital
Appreciation Fund. The investment objective of the ING FMR Earnings
Growth Portfolio and the AIM V.I. Capital Appreciation Fund is to seek
growth of capital over the long term.
23. ING FMR Equity Income Portfolio for the Fidelity VIP Equity-
Income Portfolio. The ING FMR Equity Income Portfolio is patterned
after the Fidelity VIP Equity-Income Portfolio and these two portfolios
have the same investment objectives and policies. The investment
objective of both portfolios is to seek capital appreciation and
reasonable income.
24. ING JPMorgan Value Opportunities Portfolio for the
AllianceBernstein Growth and Income Portfolio. The investment objective
of the ING JPMorgan Value Opportunities Portfolio is to provide long-
term capital appreciation. The investment objective of the
AllianceBernstein Growth and Income Portfolio is to seek long-term
growth of capital.
25. ING JPMorgan Value Opportunities Portfolio for the
AllianceBernstein Growth and Income Fund. The investment objective of
the ING JPMorgan Value Opportunities Portfolio is to provide long-term
capital appreciation. The investment objective of the AllianceBernstein
Growth and Income Fund is to seek long-term growth of capital.
26. ING Legg Mason Value Portfolio for the Legg Mason Value Trust,
Inc. The ING Legg Mason Value Portfolio is patterned after the Legg
Mason Value Trust, Inc., and these two portfolios have the same
investment objectives and policies. The investment objective
[[Page 42683]]
of both portfolios is to seek long-term growth of capital.
27. ING Lord Abbett Affiliated Portfolio for the Lord Abbett Series
Fund--Growth and Income Portfolio. The investment objective of the ING
Lord Abbett Affiliated Portfolio is long-term growth of capital with
current income a secondary objective. The Lord Abbett Series Fund--
Growth and Income Portfolio has an investment objective that seeks
long-term growth of capital and income.
28. ING Lord Abbett Affiliated Portfolio for the Lord Abbett
Affiliated Fund. The ING Lord Abbett Affiliated Portfolio is patterned
after the Lord Abbett Affiliated Fund and these two portfolios have the
same investment objectives and policies. The investment objective of
both portfolios is to seek long-term growth of capital and income.
29. ING MFS Total Return Portfolio for the MFS Total Return Series.
The ING MFS Total Return Portfolio is patterned after the MFS Total
Return Series and these two portfolios have the same investment
objectives and policies. The investment objective of both portfolios is
to seek above average income (compared to a portfolio entirely invested
in equity securities) consistent with the prudent employment of
capital.
30. ING Oppenheimer Global Portfolio for the Oppenheimer Global
Portfolio. The investment objectives of the ING Oppenheimer Global
Portfolio and the Oppenheimer Global Fund are the same. Each fund seeks
capital appreciation.
31. ING Oppenheimer Main Street Portfolio for the Oppenheimer Main
Street Fund. The investment objective of the ING Oppenheimer Main
Street Portfolio is long-term growth of capital and future income. The
investment objective of the Oppenheimer Main Street Fund is high total
return (which includes growth in the value of its shares as well as
current income) from equity and debt securities.
32. ING PIMCO High Yield Portfolio for the Fidelity VIP High Income
Portfolio. The investment objective of the ING PIMCO High Yield
Portfolio is to seek maximum total return, consistent with the
preservation of capital and prudent investment management. The
investment objective of Fidelity VIP High Income Portfolio is to seek a
high level of current income, while also considering growth of capital.
33. ING Pioneer Equity Income Portfolio for the Pioneer Equity
Income VCT Portfolio. The ING Pioneer Equity Income Portfolio is
patterned after the Pioneer Equity Income VCT Portfolio and these two
portfolios have the same investment objectives and policies. The
investment objective of both portfolios is to seek current income and
long-term growth of capital from a portfolio consisting primarily of
income producing equity securities of U.S. corporations.
34. ING Pioneer Fund Portfolio for the Pioneer Fund VCT Portfolio.
The ING Pioneer Fund Portfolio is patterned after the Pioneer Fund VCT
Portfolio and these two funds have the same investment objectives and
policies. The investment objective of both portfolios is to seek
reasonable income and capital growth.
35. ING Pioneer Fund Portfolio for the Pioneer Fund. The ING
Pioneer Fund Portfolio is patterned after the Pioneer Fund and these
two funds have the same investment objectives and policies. The
investment objective of both portfolios is to seek reasonable income
and capital growth.
36. ING Pioneer High Yield Portfolio for the Pioneer High Yield VCT
Portfolio. The ING Pioneer High Yield Portfolio is patterned after the
Pioneer High Yield VCT Portfolio and these two portfolios have the same
investment objectives and policies. The investment objective of both
portfolios is to seek maximum total return through a combination of
income and capital appreciation.
37. ING Pioneer High Yield Portfolio for the Pioneer High Yield
Fund. The ING Pioneer High Yield Portfolio is patterned after the
Pioneer High Yield Fund and these two funds have the same investment
objectives and policies. The investment objective of both portfolios is
to seek maximum total return through a combination of income and
capital appreciation.
38. ING Pioneer Mid Cap Value Portfolio for the Pioneer Mid Cap
Value VCT Portfolio. The ING Pioneer Mid Cap Value Portfolio is
patterned after the Pioneer Mid Cap Value VCT Portfolio and these two
funds have the same investment objectives and policies. The investment
objective of both portfolios is to seek capital appreciation.
39. ING Templeton Global Growth Portfolio for the Templeton Growth
Fund, Inc. The ING Templeton Global Growth Portfolio is patterned after
the Templeton Growth Fund, Inc. and these two funds have similar
investment objectives and policies. The investment objective of the ING
Templeton Global Growth Portfolio is to seek capital appreciation. The
Templeton Growth Fund, Inc. seeks long-term capital growth.
40. ING Pioneer Fund Portfolio for the AIM V.I. Core Equity Fund.
The investment objective of the ING Pioneer Fund Portfolio is
reasonable income and capital growth. The investment objective of the
AIM V.I. Core Equity Series is growth of capital.
41. ING UBS U.S. Small Cap Growth Portfolio for the UBS U.S. Small
Cap Growth Fund. The ING UBS U.S. Small Cap Growth Portfolio is
patterned after the UBS Small Cap Growth Fund and these two funds have
the same investment objectives and policies. The investment objective
of both portfolios is to seek to provide long-term capital
appreciation.
42. ING VP Balanced Portfolio, Inc. for the Fidelity VIP Asset
Manager Portfolio. The investment objective of the ING VP Balanced
Portfolio is to seek to maximize investment return, consistent with
reasonable safety of principal, by investing in a diversified portfolio
of one or more of the following asset classes: stocks, bonds and cash
equivalents, based on the judgment of the portfolio's management, of
which of those sectors or mix thereof offers the best investment
prospects. The investment objective of Fidelity VIP II Asset Manager
Portfolio is to seek to obtain high total return with reduced risk over
the long-term by allocating its assets among stocks, bonds and short-
term instruments.
43. ING VP Index Plus International Equity Portfolio for the
Fidelity VIP Overseas Portfolio. The ING VP IndexPlus International
Equity Portfolio seeks to outperform the total return performance of
the Morgan Stanley Capital International EAFE Index (MSCI EAFE). The
investment objective of the Fidelity VIP Overseas Portfolio is long-
term growth of capital.
44. ING Wells Fargo Small Cap Disciplined Portfolio for the Lord
Abbett Small-Cap Value Fund. The investment objective of both the ING
Wells Fargo Small Cap Disciplined Portfolio and Lord Abbett Small-Cap
Value Fund is long-term capital appreciation.
45. ING Wells Fargo Small Cap Disciplined Portfolio for the
Evergreen Special Values Fund. The investment objective of the ING
Wells Fargo Small Cap Disciplined Portfolio is long-term capital
appreciation. The objective of the Evergreen Special Values Fund is to
seek growth of capital.
Implementation of the Substitutions
46. Applicants will effect the Substitutions as soon as practicable
following the issuance of the requested order. As of the Effective Date
of the Substitutions, shares of each Replaced Fund will be redeemed for
cash or in-kind. The Companies, on behalf of each Replaced Fund
subaccount of each relevant Account, will simultaneously
[[Page 42684]]
place a redemption request with the Replaced Fund and a purchase order
with the corresponding Substitute Fund so that the purchase of
Substitute Fund shares will be for the exact amount of the redemption
proceeds. Thus, Contract values will remain fully invested at all
times. The proceeds of such redemptions will then be used to purchase
the appropriate number of shares of the applicable Substitute Fund.
47. The Substitutions will take place at relative net asset value
(in accordance with Rule 22c-1 under the 1940 Act) with no change in
the amount of any Affected Contract Owner's (defined below) account
value or death benefit, or in the dollar value of his or her investment
in the applicable Account. Any in-kind redemption of shares of a
Replaced Fund or in-kind purchase of shares of the corresponding
Substitute Fund will, except as noted below, take place in substantial
compliance with the conditions of Rule 17a-7 under the 1940 Act. No
brokerage commissions, fees or other remuneration will be paid by
either the Replaced Fund or the corresponding Substitute Fund or by
Affected Contract Owners in connection with the Substitutions. The
transactions comprising the Substitutions will be consistent with the
policies of each investment company involved and with the general
purposes of the 1940 Act.
48. Contract owners with interests in the subaccounts of each
Replaced Fund (individually, an ``Affected Contract Owner'' and,
collectively, ``Affected Contract Owners'') will not incur any fees or
charges as a result of the Substitutions nor will their rights or the
Companies' obligations under the Contracts be altered in any way. The
Companies or their affiliates will pay all expenses and transaction
costs of the Substitutions, including legal and accounting expenses,
any applicable brokerage expenses, and other fees and expenses. In
addition, the Substitutions will not impose any tax liability on
Affected Contract Owners. The Substitutions will not cause the Contract
fees and charges currently being paid by Affected Contract Owners to be
greater after the Substitutions than before the Substitutions. Also, as
described more fully below, after notification of the Substitutions and
for 30 days after the Substitutions, Affected Contract Owners may
reallocate to any other investment options available under their
Contract the subaccount value of the Replaced Fund without incurring
any administrative costs or allocation (transfer) charges.
49. All Affected Contract Owners were notified of this Application
by means of supplements to the Contract prospectuses, shortly after the
date of this Application. Among other information regarding the
Substitutions, the supplements informed Affected Contract Owners that
beginning on the date of the first supplement the Companies will not
exercise any rights reserved by them under the Contracts to impose
restrictions or fees on transfers from the Replaced Funds (other than
restrictions related to frequent or disruptive transfers) until at
least 30 days after the Effective Date of the Substitutions. Following
the date the order requested by the Application is issued, but before
the Effective Date, Affected Contract Owners will receive a second
supplement to the Contract prospectus setting forth the Effective Date
and advising Affected Contract Owners of their right, if they so
choose, at any time prior to the Effective Date, to reallocate or
withdraw accumulated value in the relevant Replaced Fund subaccounts
under their Contracts or otherwise terminate their interest therein in
accordance with the terms and conditions of their Contracts. If
Affected Contract Owners reallocate account value prior to the
Effective Date or within 30 days after the Effective Date, there will
be no charge for the reallocation of accumulated value from each
Replaced Fund subaccount and the reallocation will not count as a
transfer when imposing any applicable restriction or limit under the
Contract on transfers. The Companies will not exercise any right they
may have under the Contracts to impose additional restrictions or fees
on transfers from the Replaced Funds under the Contracts (other than
restrictions related to frequent or disruptive transfers) for a period
of at least 30 days following the Effective Date of the Substitutions.
Additionally, all current Contract Owners will be sent prospectuses of
the Substitute Funds before the Effective Date.
50. Within five (5) business days after the Effective Date,
Affected Contract Owners will be sent a written confirmation (``Post-
Substitution Confirmation'') indicating that shares of the Replaced
Funds have been redeemed and that the shares of Substitute Funds have
been substituted. The Post-Substitution Confirmation will show how the
allocation of the Affected Contract Owner's account value before and
immediately following the Substitutions have changed as a result of the
Substitutions and detail the transactions effected on behalf of the
respective Affected Contract Owner because of the Substitutions.
Applicant's Legal Analysis
1. Applicants represent that each of the prospectuses for the
Contracts expressly discloses the reservation of the Companies right,
subject to compliance with applicable law, to substitute shares of
another open-end management investment company for shares of an open-
end management investment company held by a subaccount of an Account.
2. Registrants state that the Companies reserved this right of
substitution both to protect themselves and their Contract Owners in
situations where either might be harmed or disadvantaged by
circumstances surrounding the issuer of the shares held by one or more
of its separate accounts and to afford the opportunity to replace such
shares where to do so could benefit the Contract Owners and Companies.
3. Applicants maintain that Contract Owners will be better served
by the proposed Substitutions. Applicants anticipate that the
replacement of certain Replaced Funds will result in a Contract that is
administered and managed more efficiently, and one that is more
competitive with other variable products in both wholesale and retail
markets. For all of the proposed substitutions, each Substitute Fund
(or sub-adviser managing a similar fund for those Substitute Funds
without a performance history) generally has had comparable or more
consistent investment performance than the corresponding Replaced Fund
that it would replace. Moreover, each Substitute Fund has fees that are
the same as or less than the corresponding Replaced Fund. Applicants
state that for all of the proposed substitutions, the investment
objective and policies of each Substitute Fund are the same as, similar
to, or consistent with the investment objective and policies of the
corresponding Replaced Fund.
4. Applicants anticipate that Contract Owners will be at least as
well off with the proposed array of subaccounts to be offered after the
proposed substitutions as they have been with the array of subaccounts
offered before the substitutions. The proposed substitutions retain for
Contract Owners the investment flexibility which is a central feature
of the Contracts. If the proposed substitutions are carried out, all
Contract Owners will be permitted to allocate purchase payments and
transfer accumulated values and contract values between and among the
remaining subaccounts as they could before the proposed substitutions.
The number of available subaccounts varies from
[[Page 42685]]
Contract to Contract, but the average number of available subaccounts
in all Contracts is approximately 67 and the smallest number of
available subaccounts in any one Contract after the Substitutions is
22, the same number of available subaccounts as before the
Substitutions.
5. Applicants assert that each of the proposed substitutions is not
the type of substitution which Section 26(c) was designed to prevent.
Unlike traditional unit investment trusts where a depositor could only
substitute an investment security in a manner which permanently
affected all the investors in the trust, the Contracts provide each
Contract Owner with the right to exercise his or her own judgment and
transfer contract values into other subaccounts. Moreover, the
Contracts will offer Contract Owners the opportunity to transfer
amounts out of the subaccounts which invest in the Replaced Funds into
any of the remaining subaccounts without cost or other disadvantage.
The proposed substitutions, therefore, will not result in the type of
costly forced redemption which Section 26(c) was designed to prevent.
6. Applicants maintain that by purchasing a Contract, Contract
owners select much more than a particular investment company in which
to invest their account values. They also select the specific types of
insurance coverages offered by the various Companies under the
Contracts as well as numerous other rights and privileges set forth in
each Contract. Contract Owners may also have considered the size,
financial condition, type, and reputation of ING and the various
Companies. These factors will not change because of the proposed
substitutions.
7. Applicants maintain that the terms of the Substitutions,
including the consideration to be paid and received by each Replaced
Fund or Substitute Fund, are reasonable, fair and do not involve
overreaching principally because the transactions do not cause owners'
interests under a Contract to be diluted, and because the transactions
will conform with the principal conditions enumerated in Rule 17a-7.
The proposed transactions will take place at relative net asset value
with no change in the amount of any Contract Owner's contract value,
cash value, accumulation value, account value or death benefit or in
the dollar value of his or her investment in any of the Accounts.
8. Applicants submit that the Substitutions by the Companies are
consistent with the policies of each Substitute Fund and each Replaced
Fund, as recited in the current registration statements and reports
filed by each under the 1940 Act.
9. Applicants submit that, to the extent that the Substitutions are
deemed to involve principal transactions between affiliates, the
procedures and terms and descriptions described in the Application
demonstrate that neither the Replaced Funds, the Substitute Funds, the
Accounts nor any other Applicant will be participating in the
Substitutions on a basis less advantageous than that of any other
participant. Even though the Applicants may not rely on Rule 17a-7,
Applicants believe that the Rule's conditions outline the type of
safeguards that result in transactions that are fair and reasonable to
registered investment company participants and preclude overreaching in
connection with an investment company by its affiliated persons.
10. The boards of trustees or directors, as applicable, of each
Replaced Fund and ING Investors Trust, ING Partners, Inc., and ING VP
Balanced Portfolio, Inc. have adopted procedures, as required by
paragraph (e)(1) of Rule 17a-7, pursuant to which the portfolios or
funds of each may purchase and sell securities to and from their
affiliates. The Companies and the investment advisers will carry out
the Substitutions in conformity with the principal conditions of Rule
17a-7 and each Replaced Fund's and the Substitute Fund's procedures
thereunder. Also no brokerage commission, fee, or other remuneration
will be paid to any party in connection with the proposed transactions.
11. Except as noted below, applicants state that the Substitutions
will take place in accordance with the requirements enumerated in Rule
17a-7 under the 1940 Act and with the approval of the applicable board
of ING Investors Trust, ING Partners, and ING VP Balanced Portfolio,
Inc., except that the Substitutions may be effected in cash or in-kind.
12. With regard to the Substitutions involving in-kind transfers,
the investment adviser of each Substitute Fund and the investment
adviser to the corresponding Replaced Fund intend to value securities
selected for transfer between the two funds in a manner that is
consistent with the current methodology used to calculate the daily net
asset value of the Replaced Fund. Where a Replaced Fund's investment
adviser employs certain third party, independent pricing services to
value securities held by the Replaced Fund (``Vendor Pricing''), the
investment adviser of each Substitute Fund and the corresponding
Replaced Fund's investment adviser intend to employ Vendor Pricing to
value securities held by the Replaced Fund that are selected for
transfer to the Substitute Fund. Vendor Pricing may be used in each of
the Substitutions. Generally, the redemption of securities from the
Replaced Fund and subsequent transfer to the Substitute Fund will be
done on a pro-rata basis. In the event that a Replaced Fund holds
illiquid or restricted securities or assets that are not otherwise
readily distributable or if a pro-rata transfer of securities would
result in the parties holding odd lots, the investment advisers may
agree to have a Replaced Fund transfer to the Substitute Fund an
equivalent amount of cash instead of securities.
13. Applicants submit that the Substitutions are consistent with
the general purposes of the 1940 Act. The proposed transactions do not
present any of the issues or abuses that the 1940 Act is designed to
prevent. Moreover, the proposed transactions will be effected in a
manner consistent with the public interest and the protection of
investors, as required by Section 6(c) of the 1940 Act. Contract Owners
will be fully informed of the terms of the Substitutions through the
supplements and the Post-Substitution Confirmation and will have an
opportunity to withdraw from the Replaced Fund through reallocation to
another subaccount or otherwise terminate their interest thereof in
accordance with the terms and conditions of their Contract prior to the
Effective Date.
Applicant's Conditions
For purposes of the approval sought pursuant to Section 26(c) of
the 1940 Act, the substitutions described in the application will not
be completed unless all of the following conditions are met:
1. Each Substitute Fund has an investment objective and investment
policies that are the same as, similar to or consistent with the
investment objective and policies of the corresponding Replaced Fund,
so that the objective of the Affected Contract Owners can continue to
be met.
2. For two years following the implementation of the Substitutions
described herein, the net annual expenses of each Substitute Fund will
not exceed the net annual expenses of the corresponding Replaced Fund
immediately preceding the Substitutions except for the ING Pioneer Fund
Portfolio where Directed Services, Inc. has agreed to a permanent
expense cap on management fees and other expenses so that beginning on
the
[[Page 42686]]
effective date of the Substitutions total net annual expenses for the
Class I shares will never exceed 0.70%. To achieve these limitations,
Directed Services, Inc., ING Investments, LLC and ING Life, as
applicable, will waive fees or reimburse the appropriate Substitute
Fund in certain amounts to maintain expenses at or below the limit. Any
adjustments or reimbursements will be made at least on a quarterly
basis. In addition, the Companies will not increase the Contract fees
and charges, including asset based charges such as mortality and
expense risk charges deducted from the subaccounts that would otherwise
be assessed under the terms of the Contracts for a period of at least
two years following the Substitutions.
3. Affected Contract Owners may reallocate amounts from any of the
Replaced Funds without incurring a reallocation charge or limiting
their number of future reallocations, or withdraw amounts under any
affected Contract or otherwise terminate their interest therein at any
time prior to the Effective Date and for a period of at least 30 days
following the Effective Date in accordance with the terms and
conditions of such Contract. Any such reallocation will not count as a
transfer when imposing any applicable restriction or limit under the
Contract on transfers.
4. The Substitutions will be effected at the net asset value of the
respective shares in conformity with Section 22(c) of the 1940 Act and
Rule 22c-1 thereunder, without the imposition of any transfer or
similar charge by Applicants.
5. The Substitutions will take place at relative net asset value
without change in the amount or value of any Contract held by Affected
Contract Owners. Affected Contract Owners will not incur any fees or
charges as a result of the Substitutions, nor will their rights or the
obligations of the Companies under such Contracts be altered in any
way. In addition, the Companies will not increase the Contract fees and
charges currently being assessed under the Contracts for a period of at
least two years following the Substitutions.
6. The Substitutions will be effected so that the investment of
securities will be consistent with the investment objectives, policies
and diversification requirements of the relevant Substitute Fund. No
brokerage commissions, fees or other remuneration will be paid by any
Replaced Fund or the corresponding Substitute Fund or Affected Contract
Owners in connection with the Substitutions.
7. The Substitutions will not alter in any way the annuity, life or
tax benefits afforded under the Contracts held by any Affected Contract
Owner.
8. The Companies will send to their Affected Contract Owners within
five (5) business days of the Substitutions a written Post-Substitution
Confirmation which will include the before and after account values
(which will not have changed as a result of the Substitutions) and
detail the transactions effected on behalf of the respective Affected
Contract Owner with regard to the Substitutions. With the Post-
Substitution Confirmations the Companies will remind Affected Contract
Owners that they may reallocate amounts from any of the Replaced Funds
without incurring a reallocation charge or limiting their number of
future reallocations for a period of at least 30 days following the
Effective Date in accordance with the terms and conditions of their
Contract.
9. Under the manager-of-managers relief granted to the ING
Investors Trust, ING Partners and relied upon by certain of the other
ING funds, a vote of the shareholders is not necessary to change a sub-
adviser, except for changes involving an affiliated sub-adviser.
Notwithstanding this, after the Effective Date of the Substitutions the
Applicants agree not to change a Substitute Fund's sub-adviser without
first obtaining shareholder approval of either: (a) The sub-adviser
change or (b) the Applicants' continued ability to rely on their
manager-of-managers relief.
10. The Companies or their affiliates will pay all expenses and
transaction costs of the Substitutions, including legal and accounting
expenses, any applicable brokerage expenses, and other fees and
expenses. In addition, the Substitutions will not impose any tax
liability on Affected Contract Owners.
11. The Commission shall have issued an order: (a) Approving the
Substitutions under Section 26(c) of the 1940 Act; and (b) exempting
the in-kind redemptions from the provisions of Section 17(a) of the
1940 Act as necessary to carry out the transactions described in this
Application.
12. A registration statement for each Substitute Fund is effective,
and the investment objectives and policies and fees and expenses for
each of the Substitute Funds as described herein have been implemented.
13. Each Affected Contract Owner will have been sent a copy of: (a)
A Contract prospectus supplement informing shareholders of this
Application; (b) a prospectus for the appropriate Substitute Fund; and
(c) a second supplement to the Contract prospectus setting forth the
Effective Date and advising Affected Contract Owners of their right to
reconsider the Substitutions and, if they so choose, any time prior to
the Effective Date and for 30 days thereafter, to reallocate or
withdraw amounts under their affected Contract or otherwise terminate
their interest therein in accordance with the terms and conditions of
their Contract.
14. The Companies shall have satisfied themselves, that: (a) The
Contracts allow the substitution of investment company shares in the
manner contemplated by the Substitutions and related transactions
described herein; (b) the transactions can be consummated as described
in this Application under applicable insurance laws; and (c) any
regulatory requirements in each jurisdiction where the Contracts are
qualified for sales have been complied with to the extent necessary to
complete the transactions.
15. The Shareholder Services Fee of the Class S shares of the ING
FMR Diversified Mid Cap Portfolio, the ING Legg Mason Value Portfolio,
the ING Oppenheimer Main Street Portfolio and the ING Pioneer Fund
Portfolio will be permanently capped at .25%.
Conclusion
Applicants assert that for the reasons summarized above the
proposed substitutions and related transactions meet the standards of
Section 26(c) of the 1940 Act and are consistent with the standards of
Section 17(b) of the 1940 Act and that the requested orders should be
granted.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6-11978 Filed 7-26-06; 8:45 am]
BILLING CODE 8010-01-P
