Annuity Investors Life Insurance Company, et al., 66204-66211 [E6-19075]
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66204
Federal Register / Vol. 71, No. 218 / Monday, November 13, 2006 / Notices
of the ICR. For proper consideration of
your comments, it is best if RRB and
OIRA receive them within 30 days of
publication date.
Previous Requests for Comments: The
RRB has already published the initial
60-day notice (71 FR 42887 on July 28,
2006) required by 44 U.S.C. 3506(c)(2).
That request elicited no comments.
cprice-sewell on PROD1PC66 with NOTICES
Information Collection Request (ICR)
Title: Application for Employee
Annuity Under the Railroad Retirement
Act.
OMB Control Number: 3220–0002.
Form(s) submitted: AA–1, Application
for Employee Annuity; AA–1cert,
Application Summary and Certification;
AA–1d, Application for Determination
of Employee’s Disability; and G–204,
Verification of Worker’s Compensation/
Public Disability Benefit Information.
Type of request: Revision of a
currently approved collection.
Affected public: Individuals or
households, State or local government.
Obligation to Respond: Required to
obtain or retain benefits.
Abstract: The Railroad Retirement Act
provides for payment of age, disability,
and supplemental annuities to qualified
employees. The application and related
forms obtain information about the
applicant’s family work history, military
service, disability benefits from other
government agencies and public or
private pensions. The information is
used to determine entitlement to and
the amount of the annuity applied for.
Changes Proposed: The RRB proposes
changes to the certification statements
of Form(s) AA–1 and AA–1(cert) that
are intended to provide additional
specificity regarding post-application
events that require an applicant to
contact the RRB. Other non-burden
impacting editorial and formatting
changes to Form AA–1cert and Form
AA–1 are also proposed. The RRB also
proposes the addition of an item to
Form AA–1d to ask a disability
applicant if any additional medical
procedures are scheduled after the filing
of the form, and if so, what those
procedures are, as well as minor nonburden impacting, editorial and
formatting changes. The RRB proposes
no changes to Form G–204.
The burden estimate for this ICR is
unchanged as follows:
Estimated annual number of
respondents: 13,105.
Total annual responses: 18,110.
Total annual reporting hours: 9,498.
FOR FURTHER INFORMATION CONTACT:
Copies of the form and supporting
documents can be obtained from
Charles Mierzwa, the agency clearance
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Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of application for an
order pursuant to Section 26(c) of the
Investment Company Act of 1940, as
amended (the ‘‘1940 Act’’), approving
certain substitutions of securities.
by mail. Hearing requests must be
received by the Commission by 5:30
p.m. on December 1, 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 requester’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, Mark F. Muething, Esq.,
Executive Vice President and Secretary,
Annuity Investors Life Insurance
Company, P.O. Box 5423, Cincinnati,
Ohio 45201–5423.
FOR FURTHER INFORMATION CONTACT:
Alison T. 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.
Annuity Investors Life
Insurance Company (‘‘Annuity
Investors’’), Annuity Investors Variable
Account A (‘‘Variable Account A’’),
Annuity Investors Variable Account B
(‘‘Variable Account B’’) and Annuity
Investors Variable Account C (‘‘Variable
Account C,’’ together with Variable
Account A and Variable Account B, the
‘‘Separate Accounts’’) (collectively, the
‘‘Applicants’’).
SUMMARY: Applicants seek an order
pursuant to Section 26(c) of the 1940
Act approving the proposed substitution
of shares issued by Old Mutual
Insurance Series Fund, DWS
Investments VIT Fund, Wells Fargo
Variable Trust, and Van Kampen-The
Universal Institutional Funds, Inc. (the
‘‘Replaced Portfolios’’) and held by
Variable Account A, Variable Account B
and Variable Account C (the
‘‘Substitutions’’).
FILING DATE: The Application was filed
on January 18, 2005 and an amended
and restated application was filed on
October 30, 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
Applicants’ Representations
1. Annuity Investors is a stock life
insurance company incorporated under
the laws of Ohio. Annuity Investors is
a subsidiary of Great American Life
Insurance Company, which is a whollyowned subsidiary of Great American
Financial Resources, Inc. (‘‘GAFRI’’), a
publicly traded insurance holding
company. GAFRI is in turn indirectly
controlled by American Financial
Group, Inc., a publicly traded holding
company.
2. Variable Account A was established
in 1995. Variable Account A is
registered under the Act as a unit
investment trust (File No. 811–7299)
and is used to fund variable annuity
contracts issued by Annuity Investors.
Two variable annuity contracts funded
by Variable Account A are affected by
this Application (the ‘‘Variable Account
A Contracts’’).
3. Variable Account B was established
in 1996. Variable Account B is
registered under the Act as a unit
investment trust (File No. 811–8017)
and is used to fund variable annuity
contracts issued by Annuity Investors.
Three variable annuity contracts funded
by Variable Account B are affected by
this Application (the ‘‘Variable Account
B Contracts’’).
4. Variable Account C was established
in 2001. Variable Account C is
officer at (312–751–3363) or
Charles.Mierzwa@rrb.gov.
Comments: Comments regarding the
information collection should be
addressed to Ronald J. Hodapp, Railroad
Retirement Board, 844 North Rush
Street, Chicago, Illinois 60611–2092 or
Ronald.Hodapp@rrb.gov and to the
OMB Desk Officer for the RRB, Karen
Matsuoka at kmatsuoka@omb.eop.gov,
FAX (202) 395–6974.
Charles Mierzwa,
RRB Clearance Officer.
[FR Doc. E6–19067 Filed 11–9–06; 8:45 am]
BILLING CODE 7905–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. IC–27546; File No. 812–13155]
Annuity Investors Life Insurance
Company, et al.
November 6, 2006.
AGENCY:
APPLICANTS:
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Federal Register / Vol. 71, No. 218 / Monday, November 13, 2006 / Notices
registered under the Act as a unit
investment trust (File No. 811–21095)
and is used to fund variable annuity
contracts issued by Annuity Investors.
Two variable annuity contracts funded
by Variable Account C are affected by
this Application (the ‘‘Variable Account
C Contracts,’’ together with the Variable
Account A Contracts and the Variable
Account B Contracts, the ‘‘Contracts’’).
5. Purchase payments under the
Contracts may be allocated to one or
more subaccounts of the Separate
Accounts. Income, gains and losses,
whether or not realized, from assets
allocated to the Separate Accounts are,
as provided in the Contracts, credited to
or charged against the Separate
Accounts without regard to other
income, gains or losses of Annuity
Investors. The assets maintained in the
Separate Accounts will not be charged
with any liabilities arising out of any
other business conducted by Annuity
Investors. Nevertheless, all obligations
arising under the Contracts, including
the commitment to make annuity
payments or death benefit payments, are
general corporate obligations of Annuity
Investors. Accordingly, all of the assets
of Annuity Investors are available to
meet its obligations under its Contracts.
6. Each of the Contracts permits
allocations of accumulation value to
available subaccounts that invest in
specific investment portfolios of
underlying mutual funds. As of May 1,
2006, each Variable Account A Contract
offered 30 portfolios, each Variable
Account B Contract offered 33
portfolios, and each Variable Account C
Contract offered 38 portfolios.
7. All of the portfolios in Variable
Account B Contracts and Variable
Account C Contracts that are the subject
of this Application were closed to new
investors on or before November 30,
2004. All of the portfolios in Variable
Account A Contracts that are the subject
of these Substitutions were closed to
new investors on or before May 1, 2005.
8. Each of the Contracts permits
transfers of accumulation value from
one subaccount to another subaccount
at any time prior to annuitization,
subject to certain restrictions and
charges described below. A transfer fee
of $25 is charged for each transfer in
excess of 12 in any contract year to
offset cost incurred in administering the
Contracts. A variety of automatically
scheduled transfers is permitted without
charge and is not counted against the 12
free transfers in a contract year.
Substitution
Replaced portfolio
1 ....................
Liberty Ridge Growth II Portfolio (now known as Old Mutual
Growth II Portfolio).
Liberty Ridge Mid-Cap Portfolio (now known as Old Mutual
Mid-Cap Portfolio).
Liberty Ridge Select Value Portfolio (now known as Old Mutual
Select Value Portfolio).
Liberty Ridge Large Cap Growth Portfolio (now known as Old
Mutual Large Cap Growth Portfolio).
Liberty Ridge Technology & Communications Portfolio (now
known as Old Mutual Columbus Circle Technology & Communications Portfolio).
Scudder VIT Equity 500 Index Fund (now known as DWS Equity 500 Index VIP).
Wells Fargo Advantage VT Discovery Fund ..............................
Wells Fargo Advantage VT Opportunity Fund ...........................
Wells Fargo Advantage VT Opportunity Fund ...........................
Van Kampen UIF Emerging Markets Equity Portfolio—Class I
Transfers from the Variable Account A
Contracts and the Variable Account B
Contracts must be at least $500, or, if
less, the entire amount in the
subaccount from which value is to be
transferred. Transfers from the
subaccounts of the Variable Account C
Contracts may be of any amount.
9. Each of the Contracts reserves the
right, upon notice to Contract owners
and compliance with applicable law, to
add or delete subaccounts or to
substitute portfolios. This reservation of
right is described in each Contract
prospectus.
10. The Substitutions are being
proposed by Annuity Investors to: (a)
Remove those fund families where the
authorities have identified improper
mutual fund trading and the Applicant
is uncertain of the impact on the fund
and its performance; (b) substitute
stable, established fund families with
solid reputations and longevity; and (c)
replace those funds that are closed to
new investors. None of the Applicants
are affiliated with any of the Replaced
Portfolios, the Replacement Portfolios or
their respective investment advisers.
11. Specifically, Applicants propose
the following substitutions:
2 ....................
3 ....................
4 ....................
5 ....................
6 ....................
7 ....................
8 ....................
9 ....................
10 ..................
Comparisons of Fees, Performance and
Investment Objectives
The investment objectives and
expense and performance information
Replacement portfolio
American Century VP Vista Fund—Class I.
American Century VP Mid Cap Value—Class I.
American Century VP Large Company Value—Class I.
American Century VP Ultra Fund—Class I.
Dreyfus IP Technology Growth Portfolio—Initial Shares.
Dreyfus Stock Index Fund, Inc.—Initial Shares.
American Century VP Vista Fund—Class I.
AIM V.I. Capital Development Fund—Series I Shares.
AIM V.I. Capital Development Fund—Series II Shares.
Janus Aspen Series International Growth Portfolio—Institutional Shares.
for the year ended December 31, 2005,
for each Replacement and Replaced
Fund are as follows:
12. The American Century VP Vista
Fund—Class I for the Liberty Ridge
Growth II Portfolio (now known as Old
Mutual Growth II Portfolio):
COMPARISON OF 2005 FEES
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[In percent]
Portfolio
Mgmt. fee
Liberty Ridge Growth II Portfolio .....................................
American Century VP Vista Fund—Class I .....................
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0.825
1.00
Fmt 4703
12b–1 fee
None
None
Sfmt 4703
Other
expenses
Total annual
operating
expenses
0.365
0.01
E:\FR\FM\13NON1.SGM
1.19
1.01
13NON1
Fee
reduction
0.15
N/A
Net total
annual
expenses
1.04
1.01
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COMPARISON OF PERFORMANCE AS OF DECEMBER 31, 2005
1 year
(percent)
Portfolio
3 year
(percent)
5 year
(percent)
10 year
(percent)
Liberty Ridge Growth II Portfolio .............................................................
11.35
14.28
(9.17)
N/A
American Century VP Vista Fund—Class I .............................................
8.13
21.12
N/A
N/A
The Liberty Ridge Growth II Portfolio
is a capital appreciation fund that
normally invests at least 65% of its net
assets in equity securities of small- and
mid-cap companies with favorable
growth prospects. The American
Century VP Vista Fund seeks long-term
growth. The fund’s managers look for
stocks of medium-sized and smaller
companies they believe will increase in
value over time, using investment
Inception
2.00%
4/30/97
9.14%
10/5/01
strategies developed by American
Century.
13. American Century VP Mid Cap
Value—Class I for the Liberty Ridge
Mid-Cap Portfolio (now known as Old
Mutual Mid-Cap Portfolio)
COMPARISON OF 2005 FEES
[In percent]
Portfolio
Mgmt. fee
Liberty Ridge Mid-Cap Portfolio .......................................
American Century VP Mid Cap Value—Class I ..............
12b–1 fee
0.95
1.00
Other
expenses
None
None
Total annual
operating
expenses
0.22
0.00
1.17
1.00
Fee
reduction
Net total
annual
expenses
0.18
N/A
0.99
1.00
COMPARISON OF PERFORMANCE AS OF DECEMBER 31, 2005
1 year
(percent)
Portfolio
3 year
(percent)
5 year
(percent)
10 year
(percent)
Liberty Ridge Mid-Cap Portfolio ...............................................................
5.71
9.06
8.18
N/A
American Century VP Mid-Cap Value—Class I ......................................
9.56
N/A
N/A
N/A
The Liberty Ridge Mid-Cap Portfolio
seeks to provide investors with aboveaverage total return over a 3 to 5 year
market cycle, consistent with reasonable
risk. The American Century VP Mid-Cap
Value Fund seeks long-term capital
growth.
14. American Century VP Large
Company Value—Class I for Liberty
Ridge Select Value Portfolio (now
Inception
14.78%
11/30/98
12.89%
12//01/04
known as Old Mutual Select Value
Portfolio)
COMPARISON OF 2005 FEES
[In percent]
Portfolio
Mgmt. fee
Liberty Ridge Select Value Portfolio ................................
American Century VP Large Company Value—Class I ..
0.75
0.90
12b–1 fee
Other
expenses
None
None
Total annual
operating
expenses
0.21
0.01
0.96
0.91
Fee
reduction
0.02
N/A
Net total
annual
expenses
0.94
0.91
COMPARISON OF PERFORMANCE AS OF DECEMBER 31, 2005
1 year
(percent)
Portfolio
3 year
(percent)
5 year
(percent)
10 year
4.51
8.34
(0.62)
N/A
American Century VP Large Company Value—Class I ..........................
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Liberty Ridge Select Value Portfolio ........................................................
4.83
N/A
N/A
N/A
The Liberty Ridge Select Value
Portfolio seeks to provide investors
long-term growth of capital and income.
Current income is a secondary objective.
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The American Century VP Large
Company Value Fund seeks long-term
capital growth. Income is a secondary
objective.
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Inception
7.38
10/28/97
6.66
12/01/04
15. American Century VP Ultra Fund
Value-Class I for Liberty Ridge Large
Cap Growth Portfolio (now known as
Old Mutual Large Cap Growth Portfolio)
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COMPARISON OF 2005 FEES
[In percent]
Portfolio
Mgmt. fee
Liberty Ridge Large Cap Growth Portfolio ......................
American Century VP Ultra(r) Fund—Class I ..................
12b–1 fee
0.85
1.00
Other
expenses
None
None
Total annual
operating
expenses
0.30
0.01
1.15
1.01
Fee
reduction
Net total
annual
expenses
0.19
N/A
0.96
1.01
COMPARISON OF PERFORMANCE AS OF DECEMBER 31, 2005
1 year
(percent)
Portfolio
3 year
(percent)
5 year
(percent)
10 year
Liberty Ridge Large Cap Growth Portfolio ..............................................
4.56
14.33
(5.40)
N/A
American Century VP Ultra Fund—Class I ...........................................
2.17
12.18
N/A
N/A
The Liberty Ridge Large Cap Growth
Portfolio seeks to provide investors with
long-term growth of capital. The
American Century VP Ultra Fund seeks
long-term capital growth.
16. Dreyfus IP Technology Growth
Portfolio-Initial Series for Liberty Ridge
Inception
7.71
4/30/97
0.85
5/01/01
Technology & Communications
Portfolio (now known as Old Mutual
Columbus Circle Technology &
Communications Portfolio)
COMPARISON OF 2005 FEES
[In percent]
Portfolio
Mgmt. fee
Liberty Ridge Technology & Communications Portfolio ..
Dreyfus IP Technology Growth Portfolio—Initial Shares
12b–1 fee
0.95
0.75
Other
expenses
None
None
Total annual
operating
expenses
0.19
0.06
1.14
0.81
Fee
reduction
0.29
N/A
Net total
annual
expenses
0.85
0.81
COMPARISON OF PERFORMANCE AS OF DECEMBER 31, 2005
1 year
(percent)
Portfolio
3 year
(percent)
5 year
(percent)
10 year
Liberty Ridge Technology & Communications Portfolio ..........................
9.91
19.35
(17.90)
N/A
Dreyfus IP Technology Growth Portfolio—Initial Series ..........................
3.78
16.32
(8.60)
N/A
The Liberty Ridge Technology &
Communications Portfolio, a nondiversified fund, seeks to provide
investors with long-term growth of
capital. Current income is incidental to
the portfolio’s goal. To pursue this goal,
the portfolio normally invests at least
80% of its net assets in equity securities
of companies in the technology and
communications sectors of the stock
market. The Dreyfus IP Technology
Growth Portfolio seeks capital
appreciation. To pursue this goal, the
portfolio normally invests at least 80%
of its assets in the stocks of growth
companies of any size that the fund
Inception
(0.08)
4/30/97
(4.96)
8/31/99
manager believes to be leading
procedures or beneficiaries of
technological innovation.
17. Dreyfus Stock Index Fund, Inc.—
Initial Series for the Scudder VIT Equity
500 Index Fund (now known as DWS
Equity 500 Index VIP)
COMPARISON OF 2005 FEES
[In percent]
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Portfolio
Mgmt. fee
Scudder VIT Equity 500 Index Fund ...............................
Dreyfus Stock Index Fund, Inc.—Initial Shares ...............
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0.19
0.25
Fmt 4703
12b–1 fee
None
None
Sfmt 4703
Other
expenses
Total annual
operating
expenses
0.15
0.02
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0.34
0.27
13NON1
Fee
reduction
0.06
N/A
Net total
annual
expenses
0.28
0.27
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COMPARISON OF PERFORMANCE AS OF DECEMBER 31, 2005
1 year
(percent)
Portfolio
3 year
(percent)
5 year
(percent)
10 year
Scudder VIT Equity 500 Index Fund .......................................................
4.68
14.05
0.24
N/A
Dreyfus Stock Index Fund, Inc.—Initial Series ........................................
4.69
14.14
0.27
8.77
The Scudder VIT Equity 500 Index
Fund seeks to replicate, as closely as
possible, before the deduction of
expenses, the performance of the
Standard & Poor’s 500 Composite Stock
Inception
4.61
10/01/97
N/A
18. American Century VP Vista
Fund—Class I for Wells Fargo
Advantage VT Discovery Fund
Price Index. The Dreyfus Stock Index
Fund, Inc. seeks to march the total
return of the Standard & Poor’s 500
Composite Stock Price Index.
COMPARISON OF 2005 FEES
[In percent]
Portfolio
Mgmt. fee
Wells Fargo Advantage Discovery FundSM .....................
American Century VP VistaSM Fund—Class I .................
12b–1 fee
0.75
1.00
Other
expenses
0.25
None
Total annual
operating
expenses
0.23
0.01
1.23
1.01
Fee
reduction
0.08
N/A
Net total
annual
expenses
1.15
1.01
COMPARISON OF PERFORMANCE AS OF DECEMBER 31, 2005
1 year
(percent)
Portfolio
Wells Fargo Advantage Discovery FundSM .............................................
American Century VP VistaSM Fund—Class I .........................................
3 year
(percent)
8.27
8.13
20.44
21.12
for growth. The American Century VP
Vista Fund seeks long-term capital
growth. The fund’s managers look for
stocks of medium-sized and smaller
companies they believes will increase in
value over time, using investment
The Wells Fargo Advantage VT
Discovery Fund seeks capital
appreciation by investing in securities
of small- and medium-capitalization
companies that the fund manager
believes offer attractive opportunities
5 year
(percent)
9.85
N/A
10 year
7.77
N/A
Inception
N/A
9.14
10/05/01
strategies developed by American
Century.
19. AIM V.I. Capital Development
Fund—Series I Shares for the Wells
Fargo Advantage VT Opportunity Fund
COMPARISON OF 2005 FEES
[In percent]
Portfolio
Mgmt. fee
Wells Fargo Advantage Opportunity Fund ......................
AIM V.I. Capital Development Fund—Series I Shares ...
0.72
0.75
12b–1 fee
Other
expenses
0.25
None
Total annual
operating
expenses
0.21
0.34
1.18
1.09
Fee
reduction
0.11
N/A
Net total
annual
expenses
1.07
1.09
COMPARISON OF PERFORMANCE AS OF DECEMBER 31, 2005
1 year
(percent
Portfolio
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Wells Fargo Advantage Opportunity Fund ..............................................
AIM V.I. Capital Development Fund—Series I Shares ...........................
The Wells Fargo Advantage VT
Opportunity Fund seeks long-term
capital appreciation. The fund manager
invests in equity securities of mediumcapitalization companies that it believes
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Jkt 211001
3 year
(percent)
7.88
9.61
are under-priced yet, have attractive
growth prospects. The AIM V.I. Capital
Development Fund’s investment
objective is long-term growth of capital.
The fund seeks to meet its objective by
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20.45
19.66
5 year
(percent)
4.25
4.37
10 year
(percent)
11.54
N/A
Inception
N/A
6.46
5/01/98
investing primarily in securities of
small- and medium-sized companies.
20. AIM V.I. Capital Development
Fund—Series II Shares for the Wells
Fargo Advantage VT Opportunity Fund
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COMPARISON OF 2005 FEES
[In percent]
Portfolio
Mgmt. fee
Wells Fargo Advantage Opportunity FundSM ..................
AIM V.I. Capital Development Fund—Series II Shares ..
12b–1 fee
0.72
0.75
Other
expenses
0.25
0.25
Total annual
operating
expenses
0.21
0.34
1.18
1.34
Fee
reduction
0.11
N/A
Net total
annual
expenses
1.07
1.34
COMPARISON OF PERFORMANCE AS OF DECEMBER 31, 2005
1 year
(percent)
Portfolio
Wells Fargo Advantage Opportunity FundSM ..........................................
AIM V.I. Capital Development Fund—Series II Shares ..........................
3 year
(percent)
7.88
9.27
20.45
19.37
Capital Development Fund’s investment
objective is long-term growth of capital.
21. Janus Aspen Series International
Growth Portfolio—Institutional Shares
The Wells Fargo Advantage VT
Opportunity Fund seeks long-term
capital appreciation. The AIM V.I.
5 year
(percent)
4.25
4.12
10 year
(percent)
11.54
N/A
Inception
N/A
6.20
8/21/01
for Van Kampen UIF Emerging Markets
Equity Portfolio—Class I
COMPARISON OF 2005 FEES
[In percent]
Portfolio
Mgmt. fee
Van Kampen UIF Emerging Markets Equity Portfolio—
Class I ..........................................................................
Janus Aspen Series International Growth Portfolio—Institutional Shares ..........................................................
12b–1 fee
Other
expenses
Total annual
operating
expenses
Fee
reduction
Net total
annual
expenses
1.25
None
0.41
1.66
0.01
1.65
0.64
None
0.06
0.70
N/A
0.70
COMPARISON OF PERFORMANCE AS OF DECEMBER 31, 2005
1 year
(percent)
Portfolio
3 year
(percent)
5 year
(percent)
10 year
(percent)
Inception
33.85
16.01
16.01
N/A
6.95
10/01/96
Janus Aspen Series International Growth Portfolio—Institutional
Shares ..................................................................................................
cprice-sewell on PROD1PC66 with NOTICES
Van Kampen UIF Emerging Markets Portfolio—Class I .........................
32.28
28.52
3.93
13.27
13.00
5/02/94
The Van Kampen UIF Emerging
Markets Equity Portfolio seeks long-term
capital appreciation by investing
primarily in growth-oriented equity
securities of issuers in emerging market
countries. The Janus Aspen Series
International Growth Portfolio is a
portfolio that seeks long-term growth of
capital by investing, under normal
circumstances, at least 80% of its net
assets (plus the amount of any
borrowings for investment purposes) in
securities of issuers from several
different countries, excluding the
United States.
22. The Substitutions will take place
at the portfolios’ relative net asset
values determined on the date of the
Substitutions in accordance with
Section 22 of the Act and Rule 22c–l
thereunder with no change in the
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15:22 Nov 09, 2006
Jkt 211001
amount of any contract owner’s cash
value or death benefit or in the dollar
value of his or her investment in any of
the subaccounts. Accordingly, there will
be no financial impact on any contract
owner. The Substitutions will be
effected by having each of the
subaccounts that invests in the Replaced
Portfolios redeem its shares for cash at
the net asset value calculated on the
date of the Substitutions and with such
cash purchase shares of the respective
Replacement Portfolios at the net asset
value calculated on the same date.
23. New contract owners are not
permitted to allocate funds to the
subaccounts that invest in the Replaced
Portfolios (‘‘Closed Subaccounts’’). As a
result, the prospectuses dated May 1,
2006 for the contracts do not include
any information about Closed
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Subaccounts. Information about the
applicable proposed substitutions is
included in the supplemental
prospectuses dated May 1, 2006 for the
Contracts (‘‘2006 Supplemental
Prospectuses’’), which provide
information about Closed Subaccounts
to the current contract owners who are
permitted to allocate funds to the Closed
Subaccounts.
24. The Substitutions will be
described in a supplement to the 2006
Supplemental Prospectuses (‘‘Stickers’’),
which will be filed with the
Commission and mailed to contract
owners. The Stickers will give contract
owners notice of the Substitutions and
will describe the reasons for engaging in
the Substitutions. The Stickers will also
inform contract owners with assets
allocated to Closed Subaccounts that no
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cprice-sewell on PROD1PC66 with NOTICES
additional amount may be allocated to
Closed Subaccounts on or after the date
of the Substitutions. In addition, the
Stickers will inform affected contract
owners that they will have the
opportunity to reallocate accumulation
value without the imposition of any
transfer charge or limitation and
without diminishing the number of free
transfers that may be made in a given
contract year, both (a) prior to the
Substitutions from the Closed
Subaccounts; and (b) for 30 days after
the Substitutions, from the Replacement
Portfolios to subaccounts investing in
other portfolios available under the
respective Contracts.
25. The prospectuses for the
Contracts, as supplemented by the
Stickers, will reflect the Substitutions.
Each contract owner will be provided
with a prospectus for the Replacement
Portfolios before the Substitutions.
Within five days after the Substitutions,
Annuity Investors will send affected
contract owners written confirmation
that the Substitutions have occurred.
26. 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 applicants under
the Contracts be altered in any way. The
Substitutions will not cause the fees and
charges under the Contracts currently
being paid by contract owners to be
greater after the Substitutions than
before the Substitutions. The
Substitutions will have no adverse tax
consequences to contract owners and
will in no way alter the tax benefits to
contract owners.
Applicants’ Legal Analysis
1. Section 26(c) of the Act makes it
unlawful for any depositor or trustee of
a registered unit investment trust
holding the security of a single issuer to
substitute another security for such
security unless the Commission
approves the substitution. The
Commission will approve such a
substitution if the evidence establishes
that it is consistent with the protection
of investors and the purposes fairly
intended by the policy and provisions of
the Act.
2. Applicants represent that the
purposes, terms and conditions of the
Substitutions are consistent with the
principles and purposes of Section 26(c)
and do not entail any of the abuses that
Section 26(c) is designed to prevent.
The Substitutions will not result in the
type of costly forced redemption that
Section 26(c) was intended to guard
against and, for the following reasons, is
consistent with the protection of
investors and the purposes fairly
intended by the Act:
VerDate Aug<31>2005
15:22 Nov 09, 2006
Jkt 211001
(a) The investment objectives and
policies of the Replacement Portfolios
are sufficiently similar to those of the
corresponding Replaced Portfolios (or
its predecessor) that contract owners
will have reasonable continuity in
investment expectations.
(b) The net total annual expense ratio
for the year ended December 31, 2005 of
the Replacement Portfolio was the same
as or lower than that of the Replaced
Portfolio or, if the net total annual
expense ratio of the Replacement
Portfolio was higher than that of the
Replaced Portfolio, Annuity Investors
proposes to eliminate this difference for
a period of time through an expense
reduction at the Separate Account level.
3. In connection with the
Substitutions, the Applicants make the
following representations:
(a) The investment objectives and
policies of each Replacement Portfolios
are sufficiently similar to those of the
corresponding Replaced Portfolio (or its
predecessor) that contract owners will
have reasonable continuity in
investment expectations.
(b) The costs of the Substitutions,
including any legal, accounting and
brokerage costs, will be borne by
Annuity Investors and will not be borne
by contract owners. No charges will be
assessed to effect the Substitutions.
(c) The Substitutions will be at the net
asset values of the respective shares
without the imposition of any transfer
or similar charge and there will be no
change in the amount of any contract
owner’s accumulation value, in the
amount of his or her cash value or death
benefit, or in the dollar value of his or
her investment in any of the
subaccounts in the applicable Separate
Account as a result of the Substitutions.
(d) The Substitutions will not cause
the fees and charges under the Contracts
currently being paid by contract owners
to be greater after the Substitutions than
before the Substitutions and will result
in contract owners’ Contract values
being moved to a Replacement
Portfolio(s) with a net total annual
expense ratio for the most recent fiscal
year that is the same or lower than that
of the corresponding Replaced Portfolio,
except in the case of the four
Replacement Portfolios in Substitutions
2, 4, 8 and 9 where, as discussed below
in paragraph (i), Annuity Investors
proposes to eliminate the difference in
expenses (provided that the amount of
such expenses is greater than $1.00 for
such Contract) through an expense
reduction at the Separate Account level.
(e) All Contract owners will be given
notice of the Substitutions and the
effective date of the Substitutions prior
to the Substitutions and will have an
PO 00000
Frm 00055
Fmt 4703
Sfmt 4703
opportunity, prior to the effective date
of the Substitutions and for 30 days after
the Substitutions, to reallocate
accumulation value among other
available subaccounts without the
imposition of any transfer charge or
limitation and without the reallocation
counting as one of the contract owner’s
free transfers in a contract year.
(f) Within five days after the
Substitutions, Annuity Investors will
send to affected Contract owners written
confirmation that the Substitutions have
occurred and the written confirmation
will reiterate that all Contract owners
may, during the 30 day period after the
effective date of the Substitutions,
reallocate accumulation value among
other available subaccounts without the
imposition of any transfer charge or
limitation and without the reallocation
counting as one of the Contract owner’s
free transfers in a contract year.
(g) The Substitutions will in no way
alter the insurance benefits to Contract
owners or the contractual obligations of
Annuity Investors.
(h) The Substitutions will have no
adverse tax consequences to Contract
owners and will in no way alter the tax
benefits to Contract owners.
(i) If, on the last day of each fiscal
quarter in the 12 month period
following the Substitutions, the net total
expense ratio of a Replacement Portfolio
exceeds on an annualized basis the net
total annual expense ratio of the
corresponding Replaced Portfolio for the
fiscal year ended December 31, 2005,
Annuity Investors will, for each
Contract outstanding on the date of the
Substitutions, reimburse (provided that
the amount of such reimbursement is
greater than $1.00 for such Contract) the
Separate Account as of the last day of
such fiscal quarter so that the amount of
the Replacement Portfolio’s net
expenses for such period, together with
the applicable expenses of the
corresponding Separate Account will,
on an annualized basis, be no greater
than the sum of the net expenses of the
corresponding Replaced Portfolio and
the applicable expenses of the Separate
Account for the 2005 fiscal year. In
addition, for 12 months following the
Substitutions, Annuity Investors will
not increase asset-based fees or charges
for Contracts outstanding on the day of
the Substitutions.
(j) In connection with assets held
under Contracts affected by the
Substitutions, Annuity Investors will
not receive, for three years from the date
of the Substitutions, any direct or
indirect benefits from the Replacement
Portfolios, their advisers or underwriters
(or their affiliates) at a rate higher than
that which they had received from the
E:\FR\FM\13NON1.SGM
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Federal Register / Vol. 71, No. 218 / Monday, November 13, 2006 / Notices
Replaced Portfolios, their advisers or
underwriters (or their affiliates),
including without limitation 12b–l,
shareholder service, administration or
other service fees, revenue sharing or
other arrangements in connection with
such assets. Annuity Investors
represents that the Substitutions and the
selection of the Replacement Portfolios
were not motivated by any financial
consideration paid or to be paid by the
Replacement Portfolios, their advisers or
underwriters, or their respective
affiliates.
Conclusion
For the reasons and upon the facts set
forth above, Applicants submit that the
requested order meets the standards set
forth in Section 26(c). Applicants
request an order of the Commission,
pursuant to Section 26(c) of the Act,
approving the Substitutions.
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
Nancy M. Morris,
Secretary.
[FR Doc. E6–19075 Filed 11–9–06; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[File No. 500–1]
In the Matter of FuelNation, Inc. and
Sytron, Inc.; Order of Suspension of
Trading
cprice-sewell on PROD1PC66 with NOTICES
November 8, 2006.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of FuelNation,
Inc. because it has not filed any periodic
reports since it filed a Form 10–QSB for
the period ended March 31, 2004.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Sytron, Inc.
because it has not filed any periodic
reports since it filed a Form 10–SB on
February 1, 2000.
The Commission is of the opinion that
the public interest and the protection of
investors require a suspension of trading
in the securities of the above-listed
companies.
Therefore, it is ordered, pursuant to
Section 12(k) of the Securities Exchange
Act of 1934, that trading in the abovelisted companies is suspended for the
period from 9:30 a.m. EST on November
8, 2006, through 11:59 p.m. EST on
November 21, 2006.
VerDate Aug<31>2005
15:22 Nov 09, 2006
Jkt 211001
By the Commission.
Nancy M. Morris,
Secretary.
[FR Doc. 06–9189 Filed 11–8–06; 11:55 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54690; File No. SR–
NYSEArca–2006–79]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating to Extending the
Time Period by Which the Exchange
Will Amend the NASD–NYSE Arca
Options Agreement Pursuant to Rule
17d–2
November 2, 2006.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on October
25, 2006, NYSE Arca, Inc. (‘‘NYSE
Arca’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Exchange filed the
proposal as a ‘‘non-controversial’’ rule
change pursuant to Section 19(b)(3)(A)
of the Act 3 and Rule 19b–4(f)(6)
thereunder,4 which renders the proposal
effective upon filing with the
Commission.5 The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is proposing to amend
its undertaking 6 to extend for 90 days
from the date of this filing the time
period by which the Exchange will enter
into an agreement with the National
Association of Securities Dealers, Inc.
(‘‘NASD’’) pursuant to Rule 17d–2
under the Act 7 (the ‘‘NASD / NYSE
Arca Options Agreement’’ or
‘‘Agreement’’). The Agreement would
expand the allocation to NASD of
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
5 The Exchange has asked the Commission to
waive the 5-day pre-filing notice requirement and
the 30-day operative delay. See 15 U.S.C.
78s(b)(3)(A), 17 CFR 240.19b–4(f)(6)(iii).
6 See Securities Exchange Act Release No. 54238
(July 28, 2006), 71 FR 44758 (August 7, 2006) (SR–
NYSEArca–2006–13) (OX Approval Order).
7 17 CFR 240.17d–2.
2 17
PO 00000
Frm 00056
Fmt 4703
Sfmt 4703
66211
regulatory responsibility to encompass
all the regulatory oversight and
enforcement responsibilities with
respect to the options activities of
Archipelago Securities, L.L.C.
(‘‘Archipelago Securities’’),8 except for
‘‘real-time market surveillance.’’
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of, and basis for,
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in Sections A, B and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
In connection with the Commission’s
approval of the Exchange’s new
electronic options trading platform, OX,
Archipelago Securities became a routing
broker for OX options orders on the
Exchange.9 In Amendment No. 3 to its
filing seeking approval of the OX
platform,10 the Exchange proposed to
clarify that NASD, a self-regulatory
organization unaffiliated with the
Exchange or any of its affiliates, would
continue to carry out oversight and
enforcement responsibilities as the
Designated Examining Authority
designated by the Commission pursuant
to Rule 17d–1 under the Act 11 with the
8 Archipelago Securities, a wholly-owned
subsidiary of Archipelago Holdings, Inc. and a
registered broker-dealer, acts as the outbound order
router for the NYSE Arca Marketplace (formerly
known as the Archipelago Exchange) and, as such,
is regulated as an exchange ‘‘facility’’ of NYSE Arca
and NYSE Arca Equities, Inc. See 15 U.S.C.
78c(a)(2). As such, any proposed rule change
relating to Archipelago Securities’ order-routing
function must be filed with the Commission, and
must operate in a manner that is consistent with the
provisions of the Act applicable to exchanges and
with NYSE Arca rules.
9 See OX Approval Order, supra note 6. Pursuant
to NYSE Arca Rule 6.1A(a)(15), which was adopted
in connection with the establishment of the new OX
trading platform, the term ‘‘OX Routing Broker’’
refers to the broker-dealer affiliate of the Exchange
that acts as agent for routing orders entered into OX
of OTP Holders, OTP Firms and OTP Firms’
Sponsored Participants to other Market Centers for
execution whenever such routing is permitted by
Exchange Rules. Archipelago Securities is the
Exchange’s only OX Routing Broker.
10 See OX Approval Order, supra note 6.
11 17 CFR 240.17d–1.
E:\FR\FM\13NON1.SGM
13NON1
]]>Agencies
[Federal Register Volume 71, Number 218 (Monday, November 13, 2006)]
[Notices]
[Pages 66204-66211]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-19075]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. IC-27546; File No. 812-13155]
Annuity Investors Life Insurance Company, et al.
November 6, 2006.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice of application for an order pursuant to Section 26(c) of
the Investment Company Act of 1940, as amended (the ``1940 Act''),
approving certain substitutions of securities.
-----------------------------------------------------------------------
APPLICANTS: Annuity Investors Life Insurance Company (``Annuity
Investors''), Annuity Investors Variable Account A (``Variable Account
A''), Annuity Investors Variable Account B (``Variable Account B'') and
Annuity Investors Variable Account C (``Variable Account C,'' together
with Variable Account A and Variable Account B, the ``Separate
Accounts'') (collectively, the ``Applicants'').
SUMMARY: Applicants seek an order pursuant to Section 26(c) of the 1940
Act approving the proposed substitution of shares issued by Old Mutual
Insurance Series Fund, DWS Investments VIT Fund, Wells Fargo Variable
Trust, and Van Kampen-The Universal Institutional Funds, Inc. (the
``Replaced Portfolios'') and held by Variable Account A, Variable
Account B and Variable Account C (the ``Substitutions'').
FILING DATE: The Application was filed on January 18, 2005 and an
amended and restated application was filed on October 30, 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 must be received by the
Commission by 5:30 p.m. on December 1, 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 requester'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, Mark F. Muething, Esq.,
Executive Vice President and Secretary, Annuity Investors Life
Insurance Company, P.O. Box 5423, Cincinnati, Ohio 45201-5423.
FOR FURTHER INFORMATION CONTACT: Alison T. 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.
Applicants' Representations
1. Annuity Investors is a stock life insurance company incorporated
under the laws of Ohio. Annuity Investors is a subsidiary of Great
American Life Insurance Company, which is a wholly-owned subsidiary of
Great American Financial Resources, Inc. (``GAFRI''), a publicly traded
insurance holding company. GAFRI is in turn indirectly controlled by
American Financial Group, Inc., a publicly traded holding company.
2. Variable Account A was established in 1995. Variable Account A
is registered under the Act as a unit investment trust (File No. 811-
7299) and is used to fund variable annuity contracts issued by Annuity
Investors. Two variable annuity contracts funded by Variable Account A
are affected by this Application (the ``Variable Account A
Contracts'').
3. Variable Account B was established in 1996. Variable Account B
is registered under the Act as a unit investment trust (File No. 811-
8017) and is used to fund variable annuity contracts issued by Annuity
Investors. Three variable annuity contracts funded by Variable Account
B are affected by this Application (the ``Variable Account B
Contracts'').
4. Variable Account C was established in 2001. Variable Account C
is
[[Page 66205]]
registered under the Act as a unit investment trust (File No. 811-
21095) and is used to fund variable annuity contracts issued by Annuity
Investors. Two variable annuity contracts funded by Variable Account C
are affected by this Application (the ``Variable Account C Contracts,''
together with the Variable Account A Contracts and the Variable Account
B Contracts, the ``Contracts'').
5. Purchase payments under the Contracts may be allocated to one or
more subaccounts of the Separate Accounts. Income, gains and losses,
whether or not realized, from assets allocated to the Separate Accounts
are, as provided in the Contracts, credited to or charged against the
Separate Accounts without regard to other income, gains or losses of
Annuity Investors. The assets maintained in the Separate Accounts will
not be charged with any liabilities arising out of any other business
conducted by Annuity Investors. Nevertheless, all obligations arising
under the Contracts, including the commitment to make annuity payments
or death benefit payments, are general corporate obligations of Annuity
Investors. Accordingly, all of the assets of Annuity Investors are
available to meet its obligations under its Contracts.
6. Each of the Contracts permits allocations of accumulation value
to available subaccounts that invest in specific investment portfolios
of underlying mutual funds. As of May 1, 2006, each Variable Account A
Contract offered 30 portfolios, each Variable Account B Contract
offered 33 portfolios, and each Variable Account C Contract offered 38
portfolios.
7. All of the portfolios in Variable Account B Contracts and
Variable Account C Contracts that are the subject of this Application
were closed to new investors on or before November 30, 2004. All of the
portfolios in Variable Account A Contracts that are the subject of
these Substitutions were closed to new investors on or before May 1,
2005.
8. Each of the Contracts permits transfers of accumulation value
from one subaccount to another subaccount at any time prior to
annuitization, subject to certain restrictions and charges described
below. A transfer fee of $25 is charged for each transfer in excess of
12 in any contract year to offset cost incurred in administering the
Contracts. A variety of automatically scheduled transfers is permitted
without charge and is not counted against the 12 free transfers in a
contract year. Transfers from the Variable Account A Contracts and the
Variable Account B Contracts must be at least $500, or, if less, the
entire amount in the subaccount from which value is to be transferred.
Transfers from the subaccounts of the Variable Account C Contracts may
be of any amount.
9. Each of the Contracts reserves the right, upon notice to
Contract owners and compliance with applicable law, to add or delete
subaccounts or to substitute portfolios. This reservation of right is
described in each Contract prospectus.
10. The Substitutions are being proposed by Annuity Investors to:
(a) Remove those fund families where the authorities have identified
improper mutual fund trading and the Applicant is uncertain of the
impact on the fund and its performance; (b) substitute stable,
established fund families with solid reputations and longevity; and (c)
replace those funds that are closed to new investors. None of the
Applicants are affiliated with any of the Replaced Portfolios, the
Replacement Portfolios or their respective investment advisers.
11. Specifically, Applicants propose the following substitutions:
------------------------------------------------------------------------
Substitution Replaced portfolio Replacement portfolio
------------------------------------------------------------------------
1................... Liberty Ridge Growth II American Century VP
Portfolio (now known as Vista Fund--Class I.
Old Mutual Growth II
Portfolio).
2................... Liberty Ridge Mid-Cap American Century VP Mid
Portfolio (now known as Cap Value--Class I.
Old Mutual Mid-Cap
Portfolio).
3................... Liberty Ridge Select American Century VP
Value Portfolio (now Large Company Value--
known as Old Mutual Class I.
Select Value Portfolio).
4................... Liberty Ridge Large Cap American Century VP
Growth Portfolio (now Ultra Fund--Class I.
known as Old Mutual
Large Cap Growth
Portfolio).
5................... Liberty Ridge Technology Dreyfus IP Technology
& Communications Growth Portfolio--
Portfolio (now known as Initial Shares.
Old Mutual Columbus
Circle Technology &
Communications
Portfolio).
6................... Scudder VIT Equity 500 Dreyfus Stock Index
Index Fund (now known Fund, Inc.--Initial
as DWS Equity 500 Index Shares.
VIP).
7................... Wells Fargo Advantage VT American Century VP
Discovery Fund. Vista Fund--Class I.
8................... Wells Fargo Advantage VT AIM V.I. Capital
Opportunity Fund. Development Fund--
Series I Shares.
9................... Wells Fargo Advantage VT AIM V.I. Capital
Opportunity Fund. Development Fund--
Series II Shares.
10.................. Van Kampen UIF Emerging Janus Aspen Series
Markets Equity International Growth
Portfolio--Class I. Portfolio--Institutiona
l Shares.
------------------------------------------------------------------------
Comparisons of Fees, Performance and Investment Objectives
The investment objectives and expense and performance information
for the year ended December 31, 2005, for each Replacement and Replaced
Fund are as follows:
12. The American Century VP Vista Fund--Class I for the Liberty
Ridge Growth II Portfolio (now known as Old Mutual Growth II
Portfolio):
Comparison of 2005 Fees
[In percent]
----------------------------------------------------------------------------------------------------------------
Total
Other annual Fee Net total
Portfolio Mgmt. fee 12b-1 fee expenses operating reduction annual
expenses expenses
----------------------------------------------------------------------------------------------------------------
Liberty Ridge Growth II Portfolio. 0.825 None 0.365 1.19 0.15 1.04
American Century VP Vista Fund-- 1.00 None 0.01 1.01 N/A 1.01
Class I..........................
----------------------------------------------------------------------------------------------------------------
[[Page 66206]]
Comparison of Performance as of December 31, 2005
----------------------------------------------------------------------------------------------------------------
1 year 3 year 5 year 10 year
Portfolio (percent) (percent) (percent) (percent) Inception
-----------------------------------------------------------------------------------------------------
Liberty Ridge Growth II Portfolio... 11.35 14.28 (9.17) N/A 2.00%
4/30/97
American Century VP Vista Fund-- 8.13 21.12 N/A N/A 9.14%
Class I............................ 10/5/01
----------------------------------------------------------------------------------------------------------------
The Liberty Ridge Growth II Portfolio is a capital appreciation
fund that normally invests at least 65% of its net assets in equity
securities of small- and mid-cap companies with favorable growth
prospects. The American Century VP Vista Fund seeks long-term growth.
The fund's managers look for stocks of medium-sized and smaller
companies they believe will increase in value over time, using
investment strategies developed by American Century.
13. American Century VP Mid Cap Value--Class I for the Liberty
Ridge Mid-Cap Portfolio (now known as Old Mutual Mid-Cap Portfolio)
Comparison of 2005 Fees
[In percent]
----------------------------------------------------------------------------------------------------------------
Total
Other annual Fee Net total
Portfolio Mgmt. fee 12b-1 fee expenses operating reduction annual
expenses expenses
----------------------------------------------------------------------------------------------------------------
Liberty Ridge Mid-Cap Portfolio... 0.95 None 0.22 1.17 0.18 0.99
American Century VP Mid Cap Value-- 1.00 None 0.00 1.00 N/A 1.00
Class I..........................
----------------------------------------------------------------------------------------------------------------
Comparison of Performance as of December 31, 2005
----------------------------------------------------------------------------------------------------------------
1 year 3 year 5 year 10 year
Portfolio (percent) (percent) (percent) (percent) Inception
----------------------------------------------------------------------------------------------------------------
Liberty Ridge Mid-Cap Portfolio................ 5.71 9.06 8.18 N/A 14.78%
11/30/98
American Century VP Mid-Cap Value--Class I..... 9.56 N/A N/A N/A 12.89%
12//01/04
----------------------------------------------------------------------------------------------------------------
The Liberty Ridge Mid-Cap Portfolio seeks to provide investors with
above-average total return over a 3 to 5 year market cycle, consistent
with reasonable risk. The American Century VP Mid-Cap Value Fund seeks
long-term capital growth.
14. American Century VP Large Company Value--Class I for Liberty
Ridge Select Value Portfolio (now known as Old Mutual Select Value
Portfolio)
Comparison of 2005 Fees
[In percent]
----------------------------------------------------------------------------------------------------------------
Total
Other annual Fee Net total
Portfolio Mgmt. fee 12b-1 fee expenses operating reduction annual
expenses expenses
----------------------------------------------------------------------------------------------------------------
Liberty Ridge Select Value 0.75 None 0.21 0.96 0.02 0.94
Portfolio........................
American Century VP Large Company 0.90 None 0.01 0.91 N/A 0.91
Value--Class I...................
----------------------------------------------------------------------------------------------------------------
Comparison of Performance as of December 31, 2005
----------------------------------------------------------------------------------------------------------------
1 year 3 year 5 year
Portfolio (percent) (percent) (percent) 10 year Inception
----------------------------------------------------------------------------------------------------------------
Liberty Ridge Select Value Portfolio........... 4.51 8.34 (0.62) N/A 7.38
10/28/97
American Century VP Large Company Value--Class 4.83 N/A N/A N/A 6.66
I............................................. 12/01/04
----------------------------------------------------------------------------------------------------------------
The Liberty Ridge Select Value Portfolio seeks to provide investors
long-term growth of capital and income. Current income is a secondary
objective. The American Century VP Large Company Value Fund seeks long-
term capital growth. Income is a secondary objective.
15. American Century VP Ultra Fund Value-Class I for Liberty Ridge
Large Cap Growth Portfolio (now known as Old Mutual Large Cap Growth
Portfolio)
[[Page 66207]]
Comparison of 2005 Fees
[In percent]
----------------------------------------------------------------------------------------------------------------
Total
Other annual Fee Net total
Portfolio Mgmt. fee 12b-1 fee expenses operating reduction annual
expenses expenses
----------------------------------------------------------------------------------------------------------------
Liberty Ridge Large Cap Growth 0.85 None 0.30 1.15 0.19 0.96
Portfolio........................
American Century VP Ultra(r) Fund-- 1.00 None 0.01 1.01 N/A 1.01
Class I..........................
----------------------------------------------------------------------------------------------------------------
Comparison of Performance as of December 31, 2005
----------------------------------------------------------------------------------------------------------------
1 year 3 year 5 year
Portfolio (percent) (percent) (percent) 10 year Inception
----------------------------------------------------------------------------------------------------------------
Liberty Ridge Large Cap Growth Portfolio....... 4.56 14.33 (5.40) N/A 7.71
4/30/97
American Century VP Ultra[supreg] Fund--Class I 2.17 12.18 N/A N/A 0.85
5/01/01
----------------------------------------------------------------------------------------------------------------
The Liberty Ridge Large Cap Growth Portfolio seeks to provide
investors with long-term growth of capital. The American Century VP
Ultra Fund seeks long-term capital growth.
16. Dreyfus IP Technology Growth Portfolio-Initial Series for
Liberty Ridge Technology & Communications Portfolio (now known as Old
Mutual Columbus Circle Technology & Communications Portfolio)
Comparison of 2005 Fees
[In percent]
----------------------------------------------------------------------------------------------------------------
Total
Other annual Fee Net total
Portfolio Mgmt. fee 12b-1 fee expenses operating reduction annual
expenses expenses
----------------------------------------------------------------------------------------------------------------
Liberty Ridge Technology & 0.95 None 0.19 1.14 0.29 0.85
Communications Portfolio.........
Dreyfus IP Technology Growth 0.75 None 0.06 0.81 N/A 0.81
Portfolio--Initial Shares........
----------------------------------------------------------------------------------------------------------------
Comparison of Performance as of December 31, 2005
----------------------------------------------------------------------------------------------------------------
1 year 3 year 5 year
Portfolio (percent) (percent) (percent) 10 year Inception
----------------------------------------------------------------------------------------------------------------
Liberty Ridge Technology & Communications 9.91 19.35 (17.90) N/A (0.08)
Portfolio..................................... 4/30/97
Dreyfus IP Technology Growth Portfolio--Initial 3.78 16.32 (8.60) N/A (4.96)
Series........................................ 8/31/99
----------------------------------------------------------------------------------------------------------------
The Liberty Ridge Technology & Communications Portfolio, a non-
diversified fund, seeks to provide investors with long-term growth of
capital. Current income is incidental to the portfolio's goal. To
pursue this goal, the portfolio normally invests at least 80% of its
net assets in equity securities of companies in the technology and
communications sectors of the stock market. The Dreyfus IP Technology
Growth Portfolio seeks capital appreciation. To pursue this goal, the
portfolio normally invests at least 80% of its assets in the stocks of
growth companies of any size that the fund manager believes to be
leading procedures or beneficiaries of technological innovation.
17. Dreyfus Stock Index Fund, Inc.--Initial Series for the Scudder
VIT Equity 500 Index Fund (now known as DWS Equity 500 Index VIP)
Comparison of 2005 Fees
[In percent]
----------------------------------------------------------------------------------------------------------------
Total
Other annual Fee Net total
Portfolio Mgmt. fee 12b-1 fee expenses operating reduction annual
expenses expenses
----------------------------------------------------------------------------------------------------------------
Scudder VIT Equity 500 Index Fund. 0.19 None 0.15 0.34 0.06 0.28
Dreyfus Stock Index Fund, Inc.-- 0.25 None 0.02 0.27 N/A 0.27
Initial Shares...................
----------------------------------------------------------------------------------------------------------------
[[Page 66208]]
Comparison of Performance as of December 31, 2005
----------------------------------------------------------------------------------------------------------------
1 year 3 year 5 year
Portfolio (percent) (percent) (percent) 10 year Inception
----------------------------------------------------------------------------------------------------------------
Scudder VIT Equity 500 Index Fund.............. 4.68 14.05 0.24 N/A 4.61
10/01/97
Dreyfus Stock Index Fund, Inc.--Initial Series. 4.69 14.14 0.27 8.77 N/A
----------------------------------------------------------------------------------------------------------------
The Scudder VIT Equity 500 Index Fund seeks to replicate, as
closely as possible, before the deduction of expenses, the performance
of the Standard & Poor's 500 Composite Stock Price Index. The Dreyfus
Stock Index Fund, Inc. seeks to march the total return of the Standard
& Poor's 500 Composite Stock Price Index.
18. American Century VP Vista Fund--Class I for Wells Fargo
Advantage VT Discovery Fund
Comparison of 2005 Fees
[In percent]
----------------------------------------------------------------------------------------------------------------
Total
Other annual Fee Net total
Portfolio Mgmt. fee 12b-1 fee expenses operating reduction annual
expenses expenses
----------------------------------------------------------------------------------------------------------------
Wells Fargo Advantage Discovery 0.75 0.25 0.23 1.23 0.08 1.15
FundSM...........................
American Century VP VistaSM Fund-- 1.00 None 0.01 1.01 N/A 1.01
Class I..........................
----------------------------------------------------------------------------------------------------------------
Comparison of Performance as of December 31, 2005
----------------------------------------------------------------------------------------------------------------
1 year 3 year 5 year
Portfolio (percent) (percent) (percent) 10 year Inception
----------------------------------------------------------------------------------------------------------------
Wells Fargo Advantage Discovery FundSM......... 8.27 20.44 9.85 7.77 N/A
American Century VP VistaSM Fund--Class I...... 8.13 21.12 N/A N/A 9.14
10/05/01
----------------------------------------------------------------------------------------------------------------
The Wells Fargo Advantage VT Discovery Fund seeks capital
appreciation by investing in securities of small- and medium-
capitalization companies that the fund manager believes offer
attractive opportunities for growth. The American Century VP Vista Fund
seeks long-term capital growth. The fund's managers look for stocks of
medium-sized and smaller companies they believes will increase in value
over time, using investment strategies developed by American Century.
19. AIM V.I. Capital Development Fund--Series I Shares for the
Wells Fargo Advantage VT Opportunity Fund
Comparison of 2005 Fees
[In percent]
----------------------------------------------------------------------------------------------------------------
Total
Other annual Fee Net total
Portfolio Mgmt. fee 12b-1 fee expenses operating reduction annual
expenses expenses
----------------------------------------------------------------------------------------------------------------
Wells Fargo Advantage Opportunity 0.72 0.25 0.21 1.18 0.11 1.07
Fund.............................
AIM V.I. Capital Development Fund-- 0.75 None 0.34 1.09 N/A 1.09
Series I Shares..................
----------------------------------------------------------------------------------------------------------------
Comparison of Performance as of December 31, 2005
----------------------------------------------------------------------------------------------------------------
1 year 3 year 5 year 10 year
Portfolio (percent (percent) (percent) (percent) Inception
----------------------------------------------------------------------------------------------------------------
Wells Fargo Advantage Opportunity Fund......... 7.88 20.45 4.25 11.54 N/A
AIM V.I. Capital Development Fund--Series I 9.61 19.66 4.37 N/A 6.46
Shares........................................ 5/01/98
----------------------------------------------------------------------------------------------------------------
The Wells Fargo Advantage VT Opportunity Fund seeks long-term
capital appreciation. The fund manager invests in equity securities of
medium-capitalization companies that it believes are under-priced yet,
have attractive growth prospects. The AIM V.I. Capital Development
Fund's investment objective is long-term growth of capital. The fund
seeks to meet its objective by investing primarily in securities of
small- and medium-sized companies.
20. AIM V.I. Capital Development Fund--Series II Shares for the
Wells Fargo Advantage VT Opportunity Fund
[[Page 66209]]
Comparison of 2005 Fees
[In percent]
----------------------------------------------------------------------------------------------------------------
Total
Other annual Fee Net total
Portfolio Mgmt. fee 12b-1 fee expenses operating reduction annual
expenses expenses
----------------------------------------------------------------------------------------------------------------
Wells Fargo Advantage Opportunity 0.72 0.25 0.21 1.18 0.11 1.07
FundSM...........................
AIM V.I. Capital Development Fund-- 0.75 0.25 0.34 1.34 N/A 1.34
Series II Shares.................
----------------------------------------------------------------------------------------------------------------
Comparison of Performance as of December 31, 2005
----------------------------------------------------------------------------------------------------------------
1 year 3 year 5 year 10 year
Portfolio (percent) (percent) (percent) (percent) Inception
----------------------------------------------------------------------------------------------------------------
Wells Fargo Advantage Opportunity FundSM....... 7.88 20.45 4.25 11.54 N/A
AIM V.I. Capital Development Fund--Series II 9.27 19.37 4.12 N/A 6.20
Shares........................................ 8/21/01
----------------------------------------------------------------------------------------------------------------
The Wells Fargo Advantage VT Opportunity Fund seeks long-term
capital appreciation. The AIM V.I. Capital Development Fund's
investment objective is long-term growth of capital.
21. Janus Aspen Series International Growth Portfolio--
Institutional Shares for Van Kampen UIF Emerging Markets Equity
Portfolio--Class I
Comparison of 2005 Fees
[In percent]
----------------------------------------------------------------------------------------------------------------
Total
Other annual Fee Net total
Portfolio Mgmt. fee 12b-1 fee expenses operating reduction annual
expenses expenses
----------------------------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets 1.25 None 0.41 1.66 0.01 1.65
Equity Portfolio--Class I........
Janus Aspen Series International 0.64 None 0.06 0.70 N/A 0.70
Growth Portfolio--Institutional
Shares...........................
----------------------------------------------------------------------------------------------------------------
Comparison of Performance as of December 31, 2005
----------------------------------------------------------------------------------------------------------------
1 year 3 year 5 year 10 year
Portfolio (percent) (percent) (percent) (percent) Inception
----------------------------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Portfolio-- 33.85 16.01 16.01 N/A 6.95
Class I....................................... 10/01/96
Janus Aspen Series International Growth 32.28 28.52 3.93 13.27 13.00
Portfolio--Institutional Shares............... 5/02/94
----------------------------------------------------------------------------------------------------------------
The Van Kampen UIF Emerging Markets Equity Portfolio seeks long-
term capital appreciation by investing primarily in growth-oriented
equity securities of issuers in emerging market countries. The Janus
Aspen Series International Growth Portfolio is a portfolio that seeks
long-term growth of capital by investing, under normal circumstances,
at least 80% of its net assets (plus the amount of any borrowings for
investment purposes) in securities of issuers from several different
countries, excluding the United States.
22. The Substitutions will take place at the portfolios' relative
net asset values determined on the date of the Substitutions in
accordance with Section 22 of the Act and Rule 22c-l thereunder with no
change in the amount of any contract owner's cash value or death
benefit or in the dollar value of his or her investment in any of the
subaccounts. Accordingly, there will be no financial impact on any
contract owner. The Substitutions will be effected by having each of
the subaccounts that invests in the Replaced Portfolios redeem its
shares for cash at the net asset value calculated on the date of the
Substitutions and with such cash purchase shares of the respective
Replacement Portfolios at the net asset value calculated on the same
date.
23. New contract owners are not permitted to allocate funds to the
subaccounts that invest in the Replaced Portfolios (``Closed
Subaccounts''). As a result, the prospectuses dated May 1, 2006 for the
contracts do not include any information about Closed Subaccounts.
Information about the applicable proposed substitutions is included in
the supplemental prospectuses dated May 1, 2006 for the Contracts
(``2006 Supplemental Prospectuses''), which provide information about
Closed Subaccounts to the current contract owners who are permitted to
allocate funds to the Closed Subaccounts.
24. The Substitutions will be described in a supplement to the 2006
Supplemental Prospectuses (``Stickers''), which will be filed with the
Commission and mailed to contract owners. The Stickers will give
contract owners notice of the Substitutions and will describe the
reasons for engaging in the Substitutions. The Stickers will also
inform contract owners with assets allocated to Closed Subaccounts that
no
[[Page 66210]]
additional amount may be allocated to Closed Subaccounts on or after
the date of the Substitutions. In addition, the Stickers will inform
affected contract owners that they will have the opportunity to
reallocate accumulation value without the imposition of any transfer
charge or limitation and without diminishing the number of free
transfers that may be made in a given contract year, both (a) prior to
the Substitutions from the Closed Subaccounts; and (b) for 30 days
after the Substitutions, from the Replacement Portfolios to subaccounts
investing in other portfolios available under the respective Contracts.
25. The prospectuses for the Contracts, as supplemented by the
Stickers, will reflect the Substitutions. Each contract owner will be
provided with a prospectus for the Replacement Portfolios before the
Substitutions. Within five days after the Substitutions, Annuity
Investors will send affected contract owners written confirmation that
the Substitutions have occurred.
26. 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 applicants under the Contracts be altered in any way. The
Substitutions will not cause the fees and charges under the Contracts
currently being paid by contract owners to be greater after the
Substitutions than before the Substitutions. The Substitutions will
have no adverse tax consequences to contract owners and will in no way
alter the tax benefits to contract owners.
Applicants' Legal Analysis
1. Section 26(c) of the Act makes it unlawful for any depositor or
trustee of a registered unit investment trust holding the security of a
single issuer to substitute another security for such security unless
the Commission approves the substitution. The Commission will approve
such a substitution if the evidence establishes that it is consistent
with the protection of investors and the purposes fairly intended by
the policy and provisions of the Act.
2. Applicants represent that the purposes, terms and conditions of
the Substitutions are consistent with the principles and purposes of
Section 26(c) and do not entail any of the abuses that Section 26(c) is
designed to prevent. The Substitutions will not result in the type of
costly forced redemption that Section 26(c) was intended to guard
against and, for the following reasons, is consistent with the
protection of investors and the purposes fairly intended by the Act:
(a) The investment objectives and policies of the Replacement
Portfolios are sufficiently similar to those of the corresponding
Replaced Portfolios (or its predecessor) that contract owners will have
reasonable continuity in investment expectations.
(b) The net total annual expense ratio for the year ended December
31, 2005 of the Replacement Portfolio was the same as or lower than
that of the Replaced Portfolio or, if the net total annual expense
ratio of the Replacement Portfolio was higher than that of the Replaced
Portfolio, Annuity Investors proposes to eliminate this difference for
a period of time through an expense reduction at the Separate Account
level.
3. In connection with the Substitutions, the Applicants make the
following representations:
(a) The investment objectives and policies of each Replacement
Portfolios are sufficiently similar to those of the corresponding
Replaced Portfolio (or its predecessor) that contract owners will have
reasonable continuity in investment expectations.
(b) The costs of the Substitutions, including any legal, accounting
and brokerage costs, will be borne by Annuity Investors and will not be
borne by contract owners. No charges will be assessed to effect the
Substitutions.
(c) The Substitutions will be at the net asset values of the
respective shares without the imposition of any transfer or similar
charge and there will be no change in the amount of any contract
owner's accumulation value, in the amount of his or her cash value or
death benefit, or in the dollar value of his or her investment in any
of the subaccounts in the applicable Separate Account as a result of
the Substitutions.
(d) The Substitutions will not cause the fees and charges under the
Contracts currently being paid by contract owners to be greater after
the Substitutions than before the Substitutions and will result in
contract owners' Contract values being moved to a Replacement
Portfolio(s) with a net total annual expense ratio for the most recent
fiscal year that is the same or lower than that of the corresponding
Replaced Portfolio, except in the case of the four Replacement
Portfolios in Substitutions 2, 4, 8 and 9 where, as discussed below in
paragraph (i), Annuity Investors proposes to eliminate the difference
in expenses (provided that the amount of such expenses is greater than
$1.00 for such Contract) through an expense reduction at the Separate
Account level.
(e) All Contract owners will be given notice of the Substitutions
and the effective date of the Substitutions prior to the Substitutions
and will have an opportunity, prior to the effective date of the
Substitutions and for 30 days after the Substitutions, to reallocate
accumulation value among other available subaccounts without the
imposition of any transfer charge or limitation and without the
reallocation counting as one of the contract owner's free transfers in
a contract year.
(f) Within five days after the Substitutions, Annuity Investors
will send to affected Contract owners written confirmation that the
Substitutions have occurred and the written confirmation will reiterate
that all Contract owners may, during the 30 day period after the
effective date of the Substitutions, reallocate accumulation value
among other available subaccounts without the imposition of any
transfer charge or limitation and without the reallocation counting as
one of the Contract owner's free transfers in a contract year.
(g) The Substitutions will in no way alter the insurance benefits
to Contract owners or the contractual obligations of Annuity Investors.
(h) The Substitutions will have no adverse tax consequences to
Contract owners and will in no way alter the tax benefits to Contract
owners.
(i) If, on the last day of each fiscal quarter in the 12 month
period following the Substitutions, the net total expense ratio of a
Replacement Portfolio exceeds on an annualized basis the net total
annual expense ratio of the corresponding Replaced Portfolio for the
fiscal year ended December 31, 2005, Annuity Investors will, for each
Contract outstanding on the date of the Substitutions, reimburse
(provided that the amount of such reimbursement is greater than $1.00
for such Contract) the Separate Account as of the last day of such
fiscal quarter so that the amount of the Replacement Portfolio's net
expenses for such period, together with the applicable expenses of the
corresponding Separate Account will, on an annualized basis, be no
greater than the sum of the net expenses of the corresponding Replaced
Portfolio and the applicable expenses of the Separate Account for the
2005 fiscal year. In addition, for 12 months following the
Substitutions, Annuity Investors will not increase asset-based fees or
charges for Contracts outstanding on the day of the Substitutions.
(j) In connection with assets held under Contracts affected by the
Substitutions, Annuity Investors will not receive, for three years from
the date of the Substitutions, any direct or indirect benefits from the
Replacement Portfolios, their advisers or underwriters (or their
affiliates) at a rate higher than that which they had received from the
[[Page 66211]]
Replaced Portfolios, their advisers or underwriters (or their
affiliates), including without limitation 12b-l, shareholder service,
administration or other service fees, revenue sharing or other
arrangements in connection with such assets. Annuity Investors
represents that the Substitutions and the selection of the Replacement
Portfolios were not motivated by any financial consideration paid or to
be paid by the Replacement Portfolios, their advisers or underwriters,
or their respective affiliates.
Conclusion
For the reasons and upon the facts set forth above, Applicants
submit that the requested order meets the standards set forth in
Section 26(c). Applicants request an order of the Commission, pursuant
to Section 26(c) of the Act, approving the Substitutions.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Nancy M. Morris,
Secretary.
[FR Doc. E6-19075 Filed 11-9-06; 8:45 am]
BILLING CODE 8011-01-P
