MetLife Insurance Company of Connecticut, et al., 13931-13939 [E8-5101]
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Federal Register / Vol. 73, No. 51 / Friday, March 14, 2008 / Notices
securities * * *.’’ For all the reasons
stated in Sections V.B. and VI of the
Application, the abuses described in
Sections l(b)(2) and (3) of the Act will
not occur in connection with the
proposed in-kind purchases.
15. The Section 17 Applicants note
that the Commission has previously
granted exemptions from Section 17(a)
in circumstances substantially similar in
all material respects to those presented
in this Application to applicants
affiliated with an open-end management
investment company that proposed to
purchase shares issued by the company
with investment securities of the type
that the company might otherwise have
purchased for its portfolio. In these
cases, the Commission issued an order
pursuant to Section 17(b) of the Act
where the expense of liquidating such
investment securities and using the cash
proceeds to purchase shares of the
investment company would have
reduced the value of investors’ ultimate
investment in such shares.
Conclusion
For the reasons and upon the facts set
forth above, the Applicants and the
Section 17 Applicants believe that the
requested order meets the standards set
forth in Section 26(c) and Section 17(b),
respectively, and should, therefore, be
granted.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–5100 Filed 3–13–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. IC–28190; File No. 812–13439]
MetLife Insurance Company of
Connecticut, et al.
March 10, 2008.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of application for an
order pursuant to Section 26(c) of the
Investment Company Act of 1940 (the
‘‘Act’’) approving certain substitutions
of securities and an order of exemption
pursuant to Section 17(b) of the Act
from Section 17(a) of the Act.
rwilkins on PROD1PC63 with NOTICES
AGENCY:
MetLife Insurance
Company of Connecticut (‘‘MetLife of
CT’’), MetLife of CT Separate Account
Five for Variable Annuities (‘‘Separate
Account Five’’), MetLife of CT Separate
Account Seven for Variable Annuities
APPLICANTS:
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(‘‘Separate Account Seven’’), MetLife of
CT Separate Account Nine for Variable
Annuities (‘‘Separate Account Nine’’),
MetLife of CT Separate Account Eleven
for Variable Annuities (‘‘Separate
Account Eleven’’), MetLife of CT
Separate Account Thirteen for Variable
Annuities (‘‘Separate Account
Thirteen’’), MetLife of CT Fund U for
Variable Annuities (‘‘Fund U’’), MetLife
of CT Separate Account PF for Variable
Annuities (‘‘Separate Account PF’’),
MetLife of CT Separate Account TM for
Variable Annuities (‘‘Separate Account
TM’’), MetLife of CT Fund ABD for
Variable Annuities (‘‘Fund ABD’’),
MetLife of CT Fund BD for Variable
Annuities (‘‘Fund BD’’), MetLife of CT
Separate Account QP for Variable
Annuities (‘‘Separate Account QP’’),
MetLife of CT Separate Account QPN
for Variable Annuities (‘‘Separate
Account QPN’’), MetLife of CT Fund BD
III for Variable Annuities (‘‘Fund BD
III’’), MetLife Insurance Company of CT
Variable Annuity Separate Account
2002 (‘‘Separate Account 2002’’),
MetLife of CT Separate Account
CPPVUL I (‘‘Separate Account CPPVUL
I’’), MetLife of CT Fund UL III for
Variable Life Insurance (‘‘Fund UL III’’),
MetLife of CT Fund UL for Variable Life
Insurance (‘‘Fund UL’’), MetLife of CT
Separate Account Six for Variable
Annuities (‘‘Separate Account Six’’),
MetLife of CT Separate Account Eight
for Variable Annuities (‘‘Separate
Account Eight’’), MetLife of CT Separate
Account Ten for Variable Annuities
(‘‘Separate Account Ten’’), MetLife of
CT Separate Account Twelve for
Variable Annuities (‘‘Separate Account
Twelve’’), MetLife of CT Separate
Account Fourteen for Variable
Annuities (‘‘Separate Account
Fourteen’’), MetLife of CT Separate
Account PF II for Variable Annuities
(‘‘Separate Account PF II’’), MetLife of
CT Separate Account TM II for Variable
Annuities (‘‘Separate Account TM II’’),
MetLife of CT Fund ABD II for Variable
Annuities (‘‘Fund ABD II’’), MetLife of
CT Fund BD II for Variable Annuities
(‘‘Fund BD II’’), MetLife of CT Fund BD
IV for Variable Annuities (‘‘Fund BD
IV’’), MetLife Life and Annuity
Company of CT Variable Annuity
Separate Account 2002 (‘‘MetLife LAN
Separate Account 2002’’), MetLife of CT
Fund UL II for Variable Life Insurance
(‘‘Fund UL II’’), MetLife Investors
Insurance Company (‘‘MetLife
Investors’’), MetLife Investors Variable
Annuity Account One (‘‘VA Account
One’’), MetLife Investors Variable
Annuity Account Five (‘‘VA Account
Five’’), MetLife Investors Variable Life
Account One (‘‘VL Account One’’),
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13931
MetLife Investors Variable Life Account
Five (‘‘VL Account Five’’), MetLife
Investors Variable Life Account Eight
(‘‘VL Account Eight’’), First MetLife
Investors Insurance Company (‘‘First
MetLife Investors’’), First MetLife
Investors Variable Annuity Account
One (‘‘First VA Account One’’), MetLife
Investors USA Insurance Company
(‘‘MetLife Investors USA’’), MetLife
Investors USA Separate Account A
(‘‘Separate Account A’’), Metropolitan
Life Insurance Company (‘‘MetLife’’),
Metropolitan Life Separate Account E
(‘‘Separate Account E’’), Metropolitan
Life Separate Account F (‘‘Separate
Account F’’), Metropolitan Life Separate
Account DCVL (‘‘Separate Account
DCVL’’), Metropolitan Life Separate
Account UL (‘‘Separate Account UL’’),
Metropolitan Life Variable Annuity
Separate Account I (formerly First
Citicorp Life Variable Annuity Separate
Account) (‘‘Separate Account I’’),
Metropolitan Life Variable Annuity
Separate Account II (formerly Citicorp
Life Variable Annuity Separate
Account) (‘‘Separate Account II’’),
Metropolitan Life Separate Account 18S
(formerly Security Equity Separate
Account 18) (‘‘Separate Account 18S’’),
Metropolitan Life Separate Account 13S
(formerly Security Equity Separate
Account 13) (‘‘Separate Account 13S’’),
Metropolitan Life Separate Account 37S
(formerly Security Equity Separate
Account 37) (‘‘Separate Account 37S’’),
Security Equity Separate Account
Twenty Six (‘‘SE Separate Account
Twenty Six’’), The New England
Variable Account (‘‘NEVA’’), New
England Life Insurance Company (‘‘New
England’’), New England Variable Life
Separate Account (‘‘NEVL Separate
Account’’), New England Variable Life
Separate Account Four (‘‘NEVL Separate
Account Four’’), New England Variable
Life Separate Account Five (‘‘NEVL
Separate Account Five’’), General
American Life Insurance Company
(‘‘General American’’) (together with
MetLife of CT, MetLife Investors, First
MetLife Investors, MetLife Investors
USA, MetLife, New England and
General American, the ‘‘Insurance
Companies’’), General American
Separate Account Two (‘‘GA Separate
Account Two’’), General American
Separate Account Seven (‘‘GA Separate
Account Seven’’), General American
Separate Account Eleven (‘‘GA Separate
Account Eleven’’), General American
Separate Account Twenty Eight (‘‘GA
Separate Account Twenty Eight’’),
General American Separate Account
Thirty-Three (‘‘Separate Account ThirtyThree’’), General American Separate
Account Fifty-Eight (‘‘GA Separate
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Account Fifty-Eight’’), General
American Separate Account Fifty-Nine
(‘‘GA Separate Account Fifty-Nine’’)
(together with Separate Account Six,
Separate Account Seven, Separate
Account Eight, Separate Account Nine,
Separate Account Ten, Separate
Account Eleven, Separate Account
Twelve, Separate Account Thirteen,
Separate Account Fourteen, Fund U,
Separate Account PF, Separate Account
TM, Fund ABD, Fund BD, Separate
Account QP, Separate Account QPN,
Fund BD III, Separate Account 2002,
Separate Account CPPVUL I, Separate
Account Five, Fund UL III, Fund UL,
Separate Account PF II, Separate
Account TM II, Fund ABD II, Fund BD
II, Fund BD IV, MetLife LAN Separate
Account 2002, Fund UL II, VA Account
One, VA Account Five, VL Account
Eight, First VA Account One, VL
Account One, VL Account Five,
Separate Account A, Separate Account
E, Separate Account F, Separate
Account DCVL, Separate Account UL,
Separate Account I, Separate Account II,
Separate Account 18S, Separate
Account 13S, Separate Account 37S, SE
Separate Account Twenty Six, NEVA,
NEVL Separate Account, NEVL Separate
Account Four, NEVL Separate Account
Five, GA Separate Account Two, GA
Separate Account Seven, GA Separate
Account Eleven, GA Separate Account
Twenty Eight, GA Separate Account
Thirty-Three, GA Separate Account
Fifty-Eight and GA Separate Account
Fifty-Nine, the ‘‘Separate Accounts’’),
Met Investors Series Trust (‘‘MIST’’) and
Metropolitan Series Fund, Inc. (‘‘Met
Series Fund’’ together with MIST, the
‘‘Investment Companies’’). The
Insurance Companies and the Separate
Accounts are referred to as the
‘‘Substitution Applicants’’ or
‘‘Applicants.’’ The Insurance
Companies, the Separate Accounts and
the Investment Companies are referred
to as the ‘‘Section 17 Applicants.’’
Applicants
seek an order approving the substitution
of certain series of the Investment
Companies for shares of series of other
registered investment companies held
by the Separate Accounts to fund
certain group and individual variable
annuity contracts and variable life
insurance policies issued by the
Insurance Companies (collectively, the
‘‘Contracts’’). The Section 17 Applicants
seek an order pursuant to Section 17(b)
of the Act to permit certain in-kind
transactions in connection with the
Substitutions.
rwilkins on PROD1PC63 with NOTICES
SUMMARY OF APPLICATION:
The application was filed
on October 10, 2007, and an amended
FILING DATE:
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and restated application was filed on
March 7, 2008.
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 April 14,
2008, 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 issued contested. Persons may
request notification of a hearing by
writing to the Secretary of the
Commission.
ADDRESSES: Secretary, Securities and
Exchange Commission, 100 F Street,
NE., Washington, DC 20549–1090.
Applicants c/o Paul G. Cellupica, Chief
Counsel, MetLife Group, One MetLife
Plaza, 27–01 Queens Plaza North, Long
Island City, NY 11101.
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
may be obtained for a fee from the
Public Reference Branch of the
Commission, 100 F Street, NE.,
Washington, DC 20549, (202–551–8090).
Applicants’ Representations
1. MetLife of CT (formerly, The
Travelers Insurance Company) is a stock
life insurance company organized in
1863 under the laws of Connecticut.
MetLife Investors is a stock life
insurance company organized on
August 17, 1981, under the laws of
Missouri. First MetLife Investors is a
stock life insurance company organized
on December 31, 1992, under the laws
of New York. MetLife Investors USA is
a stock life insurance company
organized on September 13, 1960, under
the laws of Delaware. MetLife is a stock
life insurance company organized in
1868 under the laws of New York. New
England is a stock life insurance
company organized in 1980 under the
laws of Delaware. General American is
a stock life insurance company
organized in 1933 under the laws of
Missouri.
2. Separate Account Five, Separate
Account Seven, Separate Account Nine,
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Separate Account Eleven, Separate
Account Thirteen, Fund U, Separate
Account PF, Separate Account TM,
Fund ABD, Fund BD, Separate Account
QP, Fund BD III, Separate Account
2002, Fund UL III, Fund UL, Separate
Account Six, Separate Account Eight,
Separate Account Ten, Separate
Account Twelve, Separate Account
Fourteen, Separate Account PF II,
Separate Account TM II, Fund ABD II,
Fund BD II, Fund BD IV, MetLife LAN
Separate Account 2002, Fund UL II, VA
Account One, VA Account Five, VL
Account One, VL Account Five, First
VA Account One, Separate Account A,
Separate Account E, Separate Account
UL, Separate Account I, Separate
Account II, Separate Account 13S, SE
Separate Account Twenty Six, NEVA,
NEVL Separate Account, GA Separate
Account Two, GA Separate Account
Eleven, and GA Separate Account
Twenty Eight are registered under the
Act as unit investment trusts for the
purpose of funding the Contracts.
Security interests under the Contracts
have been registered under the
Securities Act of 1933.
3. Separate Account QPN is exempt
from registration under the Act. Security
interests under the Contracts have been
registered under the Securities Act of
1933.
4. Separate Account CCPVUL 1, VL
Account Eight, Separate Account DCVL,
Separate Account 18S, Separate
Account 37S, NEVL Separate Account
Four, Separate Account F, NEVL
Separate Account Five, GA Separate
Account Seven, GA Separate Account
Thirty-Three, GA Separate Account
Fifty-Eight, and GA Separate Account
Fifty-Nine serve as separate account
funding vehicles for certain Contracts
that are exempt from registration under
Section 4(2) of the Securities Act of
1933 and Regulation D thereunder.
5. MIST and Met Series Fund are each
registered under the Act as open-end
management investment companies of
the series type, and their securities are
registered under the Securities Act of
1933. Met Investors Advisory, LLC and
MetLife Advisers, LLC serve as
investment adviser to MIST and Met
Series Fund, respectively.
6. The annuity contracts permit the
Insurance Companies to substitute
shares of one fund with shares of
another, including a fund of a different
registered investment company.
7. Each Insurance Company, on its
behalf and on behalf of the Separate
Accounts, proposes to make certain
substitutions of shares of sixteen funds
(the ‘‘Existing Funds’’) held in subaccounts of its respective Separate
Accounts for certain series (the
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‘‘Replacement Funds’’) of MIST and Met
Series Fund.
8. The proposed substitutions are as
follows: shares of MIST’s Lazard MidCap Portfolio for shares of AIM V.I. MidCap Core Equity Portfolio and Dreyfus
MidCap Stock Portfolio; shares of Met
Series Fund’s Davis Venture Value
Portfolio for shares of Dreyfus
Appreciation Portfolio; shares of Met
Series Fund’s T. Rowe Price Small Cap
Growth Portfolio for shares of Dreyfus
Developing Leaders Portfolio; shares of
MIST’s Oppenheimer Capital
Appreciation Portfolio for shares of
Fidelity VIP Growth Portfolio; shares of
MIST’s MFS Emerging Markets Equity
Portfolio for shares of Templeton
Developing Markets Securities Fund;
shares of Met Series Fund’s Jennison
Growth Portfolio for shares of Van
Kampen Strategic Growth Portfolio;
shares of MIST’s Van Kampen Mid-Cap
Growth Portfolio for shares of Van
Kampen UIF Mid Cap Growth Portfolio
and Putnam VT Discovery Growth
Fund; shares of Met Series Fund’s
Western Asset Management U.S.
Government Portfolio for shares of AIM
V.I. Government Securities Fund and
Legg Mason Partners Variable
Government Portfolio; shares of Met
Series Fund’s T. Rowe Price Large Cap
Growth Portfolio for shares of
AllianceBernstein VPS Large Cap
Growth Portfolio and MFS Emerging
13933
Growth Series; shares of MIST’s MFS
Research International Portfolio for
shares of Fidelity VIP Overseas
Portfolio; shares of Met Series Fund’s
Oppenheimer Global Equity Portfolio
for shares of Janus Worldwide Growth
Portfolio; and shares of MIST’s
BlackRock Large-Cap Core Portfolio for
shares of MFS Research Series.
9. Following is a summary of the
investment objectives and polices of the
Existing Funds and their respective
Replacement Funds. Additional
information including asset sizes, risk
factors and comparative performance
history for each Existing Fund and each
Replacement Fund can be found in the
Application.
Existing fund
Replacement fund
AIM V.I. Mid-Cap Core Equity Fund—seeks long-term capital growth.
The Fund normally invests at least 80% of its assets in equity securities, including convertible securities, of mid-capitalization companies.
Lazard Mid-Cap Portfolio—seeks long-term growth of capital. The Portfolio normally invests at least 80% of its net assets in equity securities including convertible securities of undervalued mid-cap companies.
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Dreyfus MidCap Stock Portfolio—seeks investment results that are
greater than the total return performance of publicly traded common
stocks of mid-sized domestic companies in the aggregate as represented by the Standard & Poor’s MidCap 400 Index. The Portfolio
normally invests at least 80% of its assets in stocks of mid-sized
companies.
Dreyfus Appreciation Portfolio—seeks long-term capital growth consistent with the preservation of capital. Current income is a secondary goal. Under normal circumstances, the Portfolio invests at
least 80% of its assets in common stocks.
Dreyfus Developing Leaders Portfolio—seeks capital growth. The Portfolio normally invests at least 80% of its assets in the stocks of companies believed to be developing leaders, companies characterized
by new or innovative products, services or processes having the potential to enhance earnings or revenue growth.
Fidelity VIP Growth Portfolio—seeks capital appreciation. Normally, the
Portfolio invests at least 80% of its assets in stocks, primarily common stocks.
Templeton Developing Markets Securities Fund—seeks long-term capital appreciation. Normally, the Fund invests at least 80% of its net
assets in emerging market investments.
Van Kampen Strategic Growth Portfolio—seeks capital appreciation.
Under normal market conditions, the Portfolio invests primarily in
common stocks of domestic or foreign companies considered to
have higher potential growth rates than may be currently expected in
the market.
Van Kampen UIF Mid Cap Growth Portfolio—seeks long-term capital
growth by investing primarily in common stocks and other equity securities.
Putnam VT Discovery Growth Fund—seeks long-term growth of capital.
The Fund invests mainly in the common stocks of U.S. companies
with a focus on growth stocks.
AIM V.I. Government Securities Fund—seeks a high level of current income consistent with reasonable concern for safety of principal. Normally, at least 80% of the Fund’s assets will be invested, issued,
guaranteed or otherwise backed by the U.S. Government or its agencies and instrumentalities.
Legg Mason Partners Variable Government Portfolio—seeks high current return consistent with preservation of capital. Under normal circumstances, the Portfolio invests at least 80% of its net assets in
debt securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities and related investments.
AllianceBernstein VPS Large Cap Growth Portfolio—seeks long term
growth of capital. Under normal circumstances, the Portfolio will invest at least 80% of its net assets in common stocks of a limited
number of large capitalization growth U.S. companies.
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Davis Venture Value Portfolio—seeks growth of capital. Under normal
circumstances, the majority of the Portfolio’s assets are primarily invested in equity securities of undervalued companies with market
capitalizations of at least $10 billion.
T. Rowe Price Small Cap Growth Portfolio—seeks long-term capital
growth. Under normal market conditions, invests at least 80% of the
Portfolio’s net assets in a diversified group of small capitalization
companies, within the range of market capitalization of companies in
the MSCI U.S. Small Cap Growth Index.
Oppenheimer Capital Appreciation Portfolio—seeks capital appreciation. The Portfolio invests mainly in common stocks of growth companies.
MFS Emerging Markets Equity Portfolio—seeks capital appreciation.
The Portfolio normally invests at least 80% of its net assets in equity
investments of issuers that are tied economically to emerging market
economies.
Jennison Growth Portfolio—seeks long-term growth of capital. The
Portfolio normally invests at least 65% of its assets in equity and equity-related securities of U.S. growth companies that exceed $1 billion in market capitalization and are believed to have strong capital
appreciation potential.
Van Kampen Mid-Cap Growth Portfolio—seeks capital appreciation.
Under normal market conditions, the Portfolio invests at least 80% of
its assets in securities of medium-sized companies.
Western Asset Management U.S. Government Portfolio—seeks to
maximize total return consistent with preservation of capital and
maintenance of liquidity. The Portfolio generally invests at least 80%
of its assets in fixed income securities issued or guaranteed by the
U.S. Government or its agencies, authorities or instrumentalities.
T. Rowe Price Large Cap Growth Portfolio—seeks long-term growth of
capital and, secondarily, dividend income. Normally, the Portfolio invests at least 80% of its assets in the equity securities of a diversified group of large capitalization companies.
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Existing fund
Replacement fund
MFS Emerging Growth Series—seeks capital appreciation. The Series
invests primarily in equity securities of companies believed to have
above average earnings growth potential.
Fidelity VIP Overseas Portfolio—seeks long-term growth of capital.
Normally, the Portfolio invests at least 80% of its assets in non-U.S.
securities, primarily common stocks.
Janus Worldwide Growth Portfolio—seeks long-term growth of capital
in a manner consistent with the preservation of capital. The Portfolio
invests primarily in the common stocks of companies of any size located throughout the world.
MFS Research Series—seeks capital appreciation. The investment adviser normally invests the Series’ assets primarily in equity securities.
MFS Research International Portfolio—seeks capital appreciation. The
Portfolio invests primarily in foreign equity securities, including
emerging market equity securities.
Oppenheimer Global Equity Portfolio—seeks capital appreciation.
Under normal circumstances the Portfolio invests in primarily common stocks of U.S. and foreign growth companies.
10. The management fees, 12b–1 fees
(if applicable) other expenses and total
BlackRock Large-Cap Core Portfolio—seeks long-term capital growth.
Normally, the Portfolio invests at least 80% of its assets in U.S.
large-cap companies.
operating expenses for each Existing
and Replacement Fund are as follows:
rwilkins on PROD1PC63 with NOTICES
Management
fees
Replacement Fund: Lazard Mid-Cap Portfolio, Class B .........
Existing Fund: AIM V.I. Mid-Cap Core Equity Fund, Series II
Replacement Fund: Lazard Mid-Cap Portfolio, Class A .........
Existing Fund: Dreyfus MidCap Stock Portfolio, Initial Class ..
Replacement Fund: Lazard Mid-Cap Portfolio, Class B .........
Existing Fund: Dreyfus MidCap Stock Portfolio, Service
Class .....................................................................................
Replacement Fund: Davis Venture Value Portfolio, Class A ..
Existing Fund: Dreyfus Appreciation Portfolio, Initial Class ....
Replacement Fund: T. Rowe Price Small Cap Growth Portfolio, Class B ........................................................................
Existing Fund: Dreyfus Developing Leaders Portfolio, Initial
Class .....................................................................................
Replacement Fund: Oppenheimer Capital Appreciation Portfolio, Class A ........................................................................
Existing Fund: Fidelity VIP Growth Portfolio, Initial Class .......
Replacement Fund: MFS Emerging Markets Equity Portfolio,
Class A .................................................................................
Existing Fund: Templeton Developing Markets Securities
Fund, Class 1 .......................................................................
Replacement Fund: MFS Emerging Markets Equity Portfolio,
Class B .................................................................................
Existing Fund:Templeton Developing Markets Securities
Fund, Class 2 .......................................................................
Replacement Fund: Jennison Growth Portfolio, Class A ........
Existing Fund: Van Kampen Strategic Growth Portfolio,
Class I ..................................................................................
Replacement Fund: Jennison Growth Portfolio, Class B ........
Existing Fund: Van Kampen Strategic Growth Portfolio,
Class II .................................................................................
Replacement Fund: Van Kampen Mid-Cap Growth Portfolio,
Class A .................................................................................
Existing Fund: Van Kampen UIF Mid Cap Growth Portfolio,
Class I ..................................................................................
Replacement Fund: Western Asset Management U.S. Government Portfolio, Class A ...................................................
Existing Fund: AIM V.I. Government Securities Fund, Series
I .............................................................................................
Replacement Fund: Western Asset Management U.S. Government Portfolio, Class B ...................................................
Existing Fund: AIM V.I. Government Securities Fund, Series
II ............................................................................................
Replacement Fund: T. Rowe Price Large Cap Growth Portfolio, Class B ........................................................................
Existing Fund: AllianceBernstein Large Cap Growth Portfolio,
Class B .................................................................................
Replacement Fund: MFS Research International Portfolio,
Class A .................................................................................
Existing Fund: Fidelity VIP Overseas Portfolio, Initial Class ...
Replacement Fund: MFS Research International Portfolio,
Class B .................................................................................
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Distribution
(12b–1) fees
Other expenses
Total annual expenses
Expense
waivers
Net annual expenses
0.70
0.72
0.70
0.75
0.70
0.06
0.34
0.06
0.06
0.06
1.01
1.31
0.76
0.81
1.01
N/A
N/A
N/A
N/A
N/A
1.01
1.31
0.76
0.81
1.01
0.75
0.71
0.75
0.25
N/A
N/A
0.06
0.04
0.07
1.06
0.75
0.82
N/A
N/A
N/A
1.06
0.75
0.82
0.51
*0.25
0.07
0.83
N/A
0.83
0.75
N/A
0.09
0.84
N/A
0.84
0.57
0.57
N/A
N/A
0.05
0.11
0.62
0.68
N/A
N/A
0.62
0.68
1.04
N/A
0.29
1.33
**0.03
1.30
1.23
N/A
0.24
1.47
N/A
1.47
1.04
*0.25
0.47
1.76
**0.21
1.55
1.23
0.63
0.25
N/A
0.24
0.05
1.72
0.68
N/A
N/A
1.72
0.68
0.70
0.63
N/A
*0.25
0.08
0.05
0.78
0.93
N/A
N/A
0.78
0.93
0.70
0.25
0.08
1.03
N/A
1.03
0.70
N/A
0.26
0.96
**0.05
0.91
0.75
N/A
0.31
1.06
N/A
1.06
0.50
N/A
0.07
0.57
N/A
0.57
0.46
N/A
0.33
0.79
**0.04
0.75
0.50
*0.25
0.07
0.82
N/A
0.82
0.46
0.25
0.33
1.04
**0.04
1.00
0.60
*0.25
0.08
0.93
N/A
0.93
0.75
0.25
0.08
1.08
N/A
1.08
0.72
0.72
N/A
N/A
0.14
0.16
0.86
0.88
N/A
N/A
0.86
0.88
0.72
Fmt 4703
*0.25
0.25
N/A
N/A
*0.25
*0.25
0.14
1.11
N/A
1.11
Sfmt 4703
E:\FR\FM\14MRN1.SGM
14MRN1
13935
Federal Register / Vol. 73, No. 51 / Friday, March 14, 2008 / Notices
Management
fees
Existing Fund: Fidelity VIP Overseas Portfolio, Service Class
2 ............................................................................................
Replacement Fund: Oppenheimer Global Equity Portfolio,
Class A .................................................................................
Existing Fund: Janus Worldwide Growth Portfolio, Institutional Class ...........................................................................
Replacement Fund: Oppenheimer Global Equity Portfolio,
Class B .................................................................................
Existing Fund: Janus Worldwide Growth Portfolio, Service
Class .....................................................................................
Replacement Fund: T. Rowe Price Large Cap Growth Portfolio, Class A ........................................................................
Existing Fund: MFS Emerging Growth Series, Initial Class ....
Replacement Fund: BlackRock Large-Cap Core Portfolio,
Class A .................................................................................
Existing Fund: MFS Research Series, Initial Class .................
Replacement Fund: Van Kampen Mid-Cap Growth Portfolio,
Class B .................................................................................
Existing Fund: Putnam VT Discovery Growth Fund, Class B
Replacement Fund: Western Asset Management U.S. Government Portfolio, Class A ...................................................
Existing Fund: Legg Mason Partners Variable Government
Portfolio, Class I ...................................................................
Distribution
(12b–1) fees
Other expenses
Total annual expenses
Expense
waivers
Net annual expenses
0.72
0.25
0.16
1.13
N/A
1.13
0.53
N/A
0.09
0.62
N/A
0.62
0.60
N/A
0.04
0.64
N/A
0.64
0.53
*0.25
0.09
0.87
N/A
0.87
0.60
0.25
0.05
0.90
N/A
0.90
0.60
0.75
N/A
N/A
0.08
0.12
0.68
0.87
N/A
N/A
0.68
0.87
0.63
0.75
N/A
N/A
0.22
0.14
0.85
0.89
N/A
N/A
0.85
0.89
0.70
0.70
*0.25
0.25
0.27
0.55
1.22
1.50
**0.06
N/A
1.16
1.50
0.50
N/A
0.07
0.57
N/A
0.57
0.55
N/A
0.13
0.68
N/A
0.68
rwilkins on PROD1PC63 with NOTICES
* Trustees/directors can increase 12b–1 fee to .50% without stockholder approval.
** Contractual waivers expiring 4/30/09.
11. MetLife Advisers, LLC or Met
Investors Advisory, LLC is the adviser of
each of the Replacement Funds. Each
Replacement Fund currently offers up to
five classes of shares, two of which,
Class A and Class B are involved in the
substitutions. No Rule 12b–1 Plan has
been adopted for any Replacement
Fund’s Class A shares. Each
Replacement Fund’s Class B shares have
adopted a Rule 12b–1 distribution plan
whereby up to 0.50% of a Fund’s assets
attributable to its Class B shares, may be
used to finance the distribution of the
Fund’s shares. Currently, payments
under the plan are limited to 0.25% for
Class B shares. The boards of trustees/
directors of each MIST and Met Series
Fund may increase payments under its
plans to the full amount without
shareholder approval. However, Met
Series Fund and MIST represent that
Rule 12b–1 fees of the Class B shares of
the Replacement Funds issued in
connection with the proposed
substitutions will not be raised above
the current rate without approval after
the substitution of a majority in interest
of the respective Replacement Funds’
shareholders.
12. Met Investors Advisory, LLC has
entered into an agreement with MIST
whereby, for the period ending April 30,
2009 and any subsequent year in which
the agreement is in effect, the total
annual operating expenses of the
following Replacement Funds
(excluding interest, taxes, brokerage
commissions and Rule 12b–1 fees) will
not exceed the amounts stated. These
VerDate Aug<31>2005
19:17 Mar 13, 2008
Jkt 214001
expense caps may be extended by the
investment adviser from year to year:
IC–23859 (1999)], to hire, monitor and
replace sub-advisers as necessary to
achieve optimal performance.
Percent
16. Contract owners with sub-account
balances invested (through the separate
Lazard Mid-Cap Portfolio ..............
0.80 account) in shares of the Replacement
Oppenheimer Capital Appreciation
Funds will have lower total expense
Portfolio .....................................
0.75
ratios taking into account fund expenses
MFS Emerging Markets Equity
Portfolio .....................................
1.30 (including Rule 12b–1 fees, if any) and
current fee waivers.
Van Kampen Mid-Cap Growth
17. In the following substitutions, the
Portfolio .....................................
0.90
management fee and applicable Rule
MFS Research International Portfolio ............................................
1.00 12b–1 fee of the Replacement Fund are
BlackRock Large-Cap Core Porteither currently higher, or, at certain
folio ............................................
1.00 management fee breakpoints, may be
higher than those of the respective
13. The Applicants believe the
Existing Fund: AIM V.I. Government
substitutions will provide significant
Securities Fund/Western Asset
benefits to Contract owners, including
Management U.S. Government Portfolio;
improved selection of sub-advisers and
Dreyfus Developing Leaders Portfolio/T.
simplification of fund offerings through Rowe Price Small Cap Growth Portfolio;
the elimination of overlapping offerings. Fidelity VIP Growth Portfolio/
14. As a result of the substitutions, the Oppenheimer Capital Appreciation
number of investment options under
Portfolio; Fidelity VIP Overseas
each Contract will either not be
Portfolio/MFS Research International
decreased, or, in those cases where the
Portfolio; Janus Worldwide Growth
number of investment options is being
Portfolio/Oppenheimer Global Equity
reduced, continue to offer a significant
Portfolio; Putnam VT Discovery Growth
number of alternative investment
Fund/Van Kampen Mid-Cap Growth
options (currently expected to range in
Portfolio; and Legg Mason Partners
number from 3 to 110 after the
Variable Government Portfolio/Western
substitutions versus 3 to 110 before the
Asset Management U.S. Government
substitutions).
Portfolio.
15. Those substitutions which replace
18. The Substitution Applicants
outside funds with funds for which
propose to limit Contract charges
either Met Investors Advisory, LLC or
attributable to Contract value invested
MetLife Advisers, LLC acts as
in the Replacement Funds identified
investment adviser will permit each
above following the proposed
adviser, under the respective Multisubstitutions to a rate that would offset
Manager Order [IC–22824 (1997) and
the difference in the expense ratio
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13936
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between each Existing Fund’s net
expense ratio and the net expense ratio
for the respective Replacement Fund.
The other substitutions will result in
decreased net expense ratios (ranging
from 2 basis points to 34 basis points),
except as listed above. Moreover, there
will be no increase in Contract fees and
expenses, including mortality and
expense risk fees and administration
and distribution fees charged to the
Separate Accounts as a result of the
substitutions. The Substitution
Applicants believe that the Replacement
Funds have investment objectives,
policies and risk profiles that are either
substantially the same as, or sufficiently
similar to, the corresponding Existing
Funds to make those Replacement
Funds appropriate candidates as
substitutes.
19. In addition, after the substitutions,
neither Met Investors Advisory, LLC,
MetLife Advisers, LLC nor any of their
affiliates will receive compensation
from the charges to the Separate
Accounts related to the Contracts or
from Rule 12b–1 fees or revenue sharing
from the Replacement Funds in excess
of the compensation currently received
from the investment advisers or
distributors of the Existing Funds.
20. The share classes of the Existing
Funds and the Replacement Funds are
identical with respect to the imposition
of Rule 12b–1 fees currently imposed,
except with respect to the substitution
of T. Rowe Price Small Cap Growth
Portfolio for Dreyfus Developing
Leaders Portfolio where MetLife and its
affiliates will receive 25 basis points in
12b–1 fees after the substitution.
21. Each Replacement Fund’s Class B
Rule 12b–1 fees can be raised to 0.50%
of net assets by the Replacement Fund’s
Board of Trustees/Directors without
shareholder approval. However, as
stated above, Met Series Fund and MIST
represent that Rule 12b–1 fees of the
Class B shares of the Replacement
Funds issued in connection with the
proposed substitutions will not be
raised above the current rate without
approval of a majority in interest of the
respective Replacement Funds’
shareholders after the substitution.
22. The distributors of the Existing
Funds pay to the Insurance Companies,
or their affiliates, any 12b–1 fees
associated with the class of shares sold
to the Separate Accounts. Similarly, the
distributors for MIST and Met Series
Fund will receive from the applicable
class of shares held by the Separate
Accounts Rule 12b–1 fees in the same
amount or a lesser amount than the
amount paid by the Existing Funds,
except with respect to the substitution
of T. Rowe Price Small Cap Growth
VerDate Aug<31>2005
19:17 Mar 13, 2008
Jkt 214001
Portfolio for Dreyfus Developing
Leaders Portfolio.
23. In addition to any Rule 12b–1 fees,
the investment advisers or distributors
of the Existing Funds pay the Insurance
Companies or one of their affiliates from
10 to 38 basis points for Class A or Class
B shares (or their equivalent). Following
the substitutions, these payments will
not be made on behalf of the Existing
Funds. Rather, 25 basis points in Rule
12b–1 fees from the Replacement Funds
(with respect to Class B shares) and
profit distributions to members from the
Replacement Funds’ advisers, will be
available to the Insurance Companies.
These profits from investment advisory
fees may be more or less than the fees
being paid by the Existing Funds.
Applicants’ Legal Analysis and
Conditions
1. The Substitution Applicants
request that the Commission issue an
order pursuant to Section 26(c) of the
Act approving the proposed
substitutions.
2. Applicants represent that the
Contracts permit the applicable
Insurance Company, subject to
compliance with applicable law, to
substitute shares of another investment
company for shares of an investment
company held by a sub-account of the
Separate Accounts. The prospectuses for
the Contracts and the Separate Accounts
contain appropriate disclosure of this
right.
3. By a supplement to the
prospectuses for the Contracts and the
Separate Accounts, each Insurance
Company notified all owners of the
Contracts of its intention to take the
necessary actions, including seeking the
order requested by this Application, to
substitute shares of the funds as
described herein. The supplement
advised Contract owners that from the
date of the supplement until the date of
the proposed substitution, owners
would be permitted to make one transfer
of Contract value (or annuity unit
exchange) out of the Existing Fund subaccount to one or more other subaccounts without the transfer (or
exchange) being treated as one of a
limited number of permitted transfers
(or exchanges) or a limited number of
transfers (or exchanges) permitted
without a transfer charge. The
supplement also informed Contract
owners that the Insurance Company
would not exercise any rights reserved
under any Contract to impose additional
restrictions on transfers until at least 30
days after the proposed substitutions.
The supplement also advised Contract
owners that for at least 30 days
following the proposed substitutions,
PO 00000
Frm 00110
Fmt 4703
Sfmt 4703
the Insurance Companies would permit
Contract owners affected by the
substitutions to make one transfer of
Contract value (or annuity unit
exchange) out of the Replacement Fund
sub-account to one or more other subaccounts without the transfer (or
exchange) being treated as one of a
limited number of permitted transfers
(or exchanges) or a limited number of
transfers (or exchanges) permitted
without a transfer charge.
4. The proposed substitutions will
take place at relative net asset value
with no change in the amount of any
Contract owner’s Contract value, cash
value, or death benefit or in the dollar
value of his or her investment in the
Separate Accounts.
5. The process for accomplishing the
transfer of assets from each Existing
Fund to its corresponding Replacement
Fund will be determined on a case-bycase basis. In most cases, it is expected
that the substitutions will be effected by
redeeming shares of an Existing Fund
for cash and using the cash to purchase
shares of the Replacement Fund. In
certain other cases, it is expected that
the substitutions will be effected by
redeeming the shares of an Existing
Fund in-kind; those assets will then be
contributed in-kind to the
corresponding Replacement Fund to
purchase shares of that Fund. All inkind redemptions from an Existing
Fund of which any of the Substitution
Applicants is an affiliated person will
be effected in accordance with the
conditions set forth in the Commission’s
no-action letter issued to Signature
Financial Group, Inc. (available
December 28, 1999).
6. Contract owners will not incur any
fees or charges as a result of the
proposed substitutions, nor will their
rights or an Insurance Company’s
obligations under the Contracts be
altered in any way. All expenses
incurred in connection with the
proposed substitutions, including
brokerage, legal, accounting, and other
fees and expenses, will be paid by the
Insurance Companies. In addition, the
proposed substitutions will not impose
any tax liability on Contract owners.
The proposed substitutions will not
cause the Contract fees and charges
currently being paid by existing
Contract owners to be greater after the
proposed substitutions than before the
proposed substitutions. No fees will be
charged on the transfers made at the
time of the proposed substitutions
because the proposed substitutions will
not be treated as a transfer for the
purpose of assessing transfer charges or
for determining the number of
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remaining permissible transfers in a
Contract year.
7. In addition to the prospectus
supplements distributed to owners of
Contracts, within five business days
after the proposed substitutions are
completed, Contract owners will be sent
a written notice informing them that the
substitutions were carried out and that
they may make one transfer of all
Contract value or cash value under a
Contract invested in any one of the subaccounts on the date of the notice to one
or more other sub-accounts available
under their Contract at no cost and
without regard to the usual limit on the
frequency of transfers from the variable
account options to the fixed account
options. The notice will also reiterate
that (other than with respect to ‘‘market
timing’’ activity) the Insurance
Company will not exercise any rights
reserved by it under the Contracts to
impose additional restrictions on
transfers or to impose any charges on
transfers until at least 30 days after the
proposed substitutions. The Insurance
Companies will also send each Contract
owner current prospectuses for the
Replacement Funds involved to the
extent that they have not previously
received a copy.
8. Each Insurance Company also is
seeking approval of the proposed
substitutions from any state insurance
regulators whose approval may be
necessary or appropriate.
9. The Substitution Applicants agree
that for those who were Contract owners
on the date of the proposed
substitutions, the Insurance Companies
will reimburse, on the last business day
of each fiscal period (not to exceed a
fiscal quarter) during the twenty-four
months following the date of the
proposed substitutions, those Contract
owners whose sub-account invests in
the Replacement Fund such that the
sum of the Replacement Fund’s
operating expenses (taking into account
fee waivers and expense
reimbursements) and sub-account
expenses (asset-based fees and charges
deducted on a daily basis from subaccount assets and reflected in the
calculation of sub-account unit values)
for such period will not exceed, on an
annualized basis, the sum of the
Existing Fund’s operating expenses
(taking into account fee waivers and
expense reimbursements) and subaccount expenses for fiscal year 2006,
except with respect to the Dreyfus
Developing Leaders Portfolio/T. Rowe
Price Small Cap Growth Portfolio, AIM
V.I. Government Securities Fund/
Western Asset Management U.S.
Government Portfolio, Fidelity VIP
Overseas Portfolio/MFS Research
VerDate Aug<31>2005
19:17 Mar 13, 2008
Jkt 214001
International Portfolio, Fidelity VIP
Growth Portfolio/Oppenheimer Capital
Appreciation Portfolio, Janus
Worldwide Growth Portfolio/
Oppenheimer Global Equity Portfolio,
Putnam VT Discovery Growth Fund/
Van Kampen Mid Cap Growth Portfolio
and Legg Mason Partners Variable
Government Portfolio/Western Asset
Management U.S. Government Portfolio
substitutions.
10. With respect to the Dreyfus
Developing Leaders Portfolio/T. Rowe
Price Small Cap Growth Portfolio, AIM
V.I. Government Securities Fund/
Western Asset Management U.S.
Government Portfolio, Fidelity VIP
Overseas Portfolio/MFS Research
International Portfolio, Fidelity VIP
Growth Portfolio/Oppenheimer Capital
Appreciation Portfolio, Janus
Worldwide Growth Portfolio/
Oppenheimer Global Equity Portfolio,
Putnam VT Discovery Growth Fund/
Van Kampen Mid Cap Growth Portfolio
and Legg Mason Partners Variable
Government Portfolio/Western Asset
Management U.S. Government Portfolio
substitutions, the reimbursement
agreement with respect to the
Replacement Fund’s operating expenses
and sub-account expenses, will extend
for the life of each Contract outstanding
on the date of the proposed
substitutions.
11. The Substitution Applicants
further agree that, except with respect to
Dreyfus Developing Leaders Portfolio/T.
Rowe Price Small Cap Growth Portfolio,
AIM V.I. Government Securities Fund/
Western Asset Management U.S.
Government Portfolio, Fidelity VIP
Overseas Portfolio/MFS Research
International Portfolio, Fidelity VIP
Growth Portfolio/Oppenheimer Capital
Appreciation Portfolio, Janus
Worldwide Growth Portfolio/
Oppenheimer Global Equity Portfolio,
Putnam VT Discovery Growth Fund/
Van Kampen Mid Cap Growth Portfolio
and Legg Mason Partners Variable
Government Portfolio/Western Asset
Management U.S. Government Portfolio
substitutions, the Insurance Companies
will not increase total separate account
charges (net of any reimbursements or
waivers) for any existing owner of the
Contracts on the date of the
substitutions for a period of two years
from the date of the substitutions.
12. With respect to the Dreyfus
Developing Leaders Portfolio/T. Rowe
Price Small Cap Growth Portfolio, AIM
V.I. Government Securities Fund/
Western Asset Management U.S.
Government Portfolio, Fidelity VIP
Overseas Portfolio/MFS Research
International Portfolio, Fidelity VIP
Growth Portfolio/Oppenheimer Capital
PO 00000
Frm 00111
Fmt 4703
Sfmt 4703
13937
Appreciation Portfolio, Janus
Worldwide Growth Portfolio/
Oppenheimer Global Equity Portfolio,
Putnam VT Discovery Growth Fund/
Van Kampen Mid Cap Growth Portfolio
and Legg Mason Partners Variable
Government Portfolio/Western Asset
Management U.S. Government Portfolio
substitutions, the agreement not to
increase the separate account charges
will extend for the life of each Contract
outstanding on the date of the proposed
substitutions.
13. The Substitution Applicants
submit there is little likelihood that
significant additional assets, if any, will
be allocated to the Existing Funds and,
therefore, because of the cost of
maintaining such Funds as investment
options under the Contracts, it is in the
interest of shareholders to substitute the
applicable Replacement Funds which
are currently being offered as
investment options by the Insurance
Companies.
14. In each case, the applicable
Insurance Companies believe that it is
in the best interests of the Contract
owners to substitute the Replacement
Fund for the Existing Fund. The
Insurance Companies believe that the
new sub-adviser will, over the long
term, be positioned to provide at least
comparable performance to that of the
Existing Fund’s sub-adviser.
15. The Substitution Applicants
believe that most of the assets of the
Existing Funds belong to owners of
variable annuity and variable life
insurance contracts issued by insurance
companies unaffiliated with MetLife. As
such, Contract owners and future
owners of contracts issued by affiliated
insurance companies of MetLife cannot
expect to command a majority voting
position in any of the Existing Funds in
the event that they, as a group, desire
that an Existing Fund move in a
direction different from that generally
desired by owners of non-MetLife
affiliated contracts.
16. The Substitution Applicants
anticipate that Contract owners will be
better off with the array of sub-accounts
offered after the proposed substitutions
than they have been with the array of
sub-accounts offered prior to the
substitutions.
17. The Substitution Applicants
submit that none of the proposed
substitutions is of the type that Section
26(c) was designed to prevent.
18. The Substitution Applicants
request an order of the Commission
pursuant to Section 26(c) of the Act
approving the proposed substitutions by
the Insurance Companies.
19. The Section 17 Applicants request
an order under Section 17(b) exempting
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them from the provisions of Section
17(a) to the extent necessary to permit
the Insurance Companies to carry out
each of the proposed substitutions.
20. Section 17(a)(1) of the Act, in
relevant part, prohibits any affiliated
person of a registered investment
company, or any affiliated person of
such person, acting as principal, from
knowingly selling any security or other
property to that company. Section
17(a)(2) of the Act generally prohibits
the persons acting as principals, from
knowingly purchasing any security or
other property from the registered
company.
21. Because shares held by a separate
account of an insurance company are
legally owned by the insurance
company, the Insurance Companies and
their affiliates collectively own of record
substantially all of the shares of MIST
and Met Series Fund. Therefore, MIST
and Met Series Fund and their
respective funds are arguably under the
control of the Insurance Companies
notwithstanding the fact that Contract
owners may be considered the
beneficial owners of those shares held
in the Separate Accounts. If MIST and
Met Series Fund and their respective
funds are under the control of the
Insurance Companies, then each
Insurance Company is an affiliated
person or an affiliated person of an
affiliated person of MIST and Met Series
Fund and their respective funds. If
MIST and Met Series Fund and their
respective funds are under the control of
the Insurance Companies, then MIST
and Met Series Fund and their
respective funds are affiliated persons of
the Insurance Companies.
22. Regardless of whether or not the
Insurance Companies can be considered
to control MIST and Met Series Fund
and their respective funds, because the
Insurance Companies own of record
more than 5% of the shares of each of
them and are under common control
with each Replacement Fund’s
investment adviser, the Insurance
Companies are affiliated persons of both
MIST and Met Series Fund and their
respective funds. Likewise, their
respective funds are each an affiliated
person of the Insurance Companies.
23. The Insurance Companies,
through their separate accounts in the
aggregate own more than 5% of the
outstanding shares of the following
Existing Funds: Dreyfus Appreciation
Portfolio, Dreyfus Developing Leaders
Portfolio, Fidelity VIP Growth Portfolio,
Templeton Developing Markets
Securities Fund, Van Kampen Strategic
Growth Portfolio, Van Kampen UIF Mid
Cap Growth Portfolio, Fidelity VIP
Overseas Portfolio, Putnam VT
VerDate Aug<31>2005
19:17 Mar 13, 2008
Jkt 214001
Discovery Growth Fund, Legg Mason
Partners Variable Government Portfolio.
Therefore, each Insurance Company is
an affiliated person of those funds.
24. Because the substitutions may be
effected, in whole or in part, by means
of in-kind redemptions and purchases,
the substitutions may be deemed to
involve one or more purchases or sales
of securities or property between
affiliated persons. The proposed
transactions may involve a transfer of
portfolio securities by the Existing
Funds to the Insurance Companies;
immediately thereafter, the Insurance
Companies would purchase shares of
the Replacement Funds with the
portfolio securities received from the
Existing Funds. Accordingly, as the
Insurance Companies and certain of the
Existing Funds listed above, and the
Insurance Companies and the
Replacement Funds, could be viewed as
affiliated persons of one another under
Section 2(a)(3) of the Act, it is
conceivable that this aspect of the
substitutions could be viewed as being
prohibited by Section 17(a).
25. Section 17(b) of the Act provides
that the Commission may, upon
application, grant an order exempting
any transaction from the prohibitions of
Section 17(a) if the evidence establishes
that: (a) The terms of the proposed
transaction, including the consideration
to be paid or received, are reasonable
and fair and do not involve
overreaching on the part of any person
concerned; (b) the proposed transaction
is consistent with the policy of each
registered investment company
concerned, as recited in its registration
statement and records filed under the
Act; and (c) the proposed transaction is
consistent with the general purposes of
the Act.
26. The Section 17 Applicants submit
that for all the reasons stated above the
terms of the proposed in-kind purchases
of shares of the Replacement Funds by
the Insurance Companies, including the
consideration to be paid and received
are reasonable and fair and do not
involve overreaching on the part of any
person concerned. The Section 17
Applicants also submit that the
proposed in-kind purchases by the
Insurance Companies are consistent
with the policies of: MIST and of its
Lazard Mid-Cap, Oppenheimer Capital
Appreciation, MFS Emerging Markets
Equity, Van Kampen Mid-Cap Growth,
MFS Research International and
BlackRock Large-Cap Core Portfolios;
and Met Series Fund and of its Davis
Venture Value, T. Rowe Price Small Cap
Growth, Jennison Growth, Western
Asset Management U. S. Government, T.
Rowe Price Large Cap Growth and
PO 00000
Frm 00112
Fmt 4703
Sfmt 4703
Oppenheimer Global Equity Portfolios,
as recited in the current registration
statements and reports filed by each
under the Act. Finally, the Section 17
Applicants submit that the proposed
substitutions are consistent with the
general purposes of the Act.
27. To the extent that the in-kind
purchases by the Insurance Company of
the Replacement Funds’ shares are
deemed to involve principal
transactions among affiliated persons,
the procedures described below should
be sufficient to assure that the terms of
the proposed transactions are reasonable
and fair to all participants. The Section
17 Applicants maintain that the terms of
the proposed in-kind purchase
transactions, including the
consideration to be paid and received by
each fund involved, are reasonable, fair
and do not involve overreaching
principally because the transactions will
conform with all but one of the
conditions enumerated in Rule 17a–7.
The proposed transactions will take
place at relative net asset value in
conformity with the requirements of
Section 22(c) of the Act and Rule 22c–
1 thereunder with no change in the
amount of any Contract owner’s contract
value or death benefit or in the dollar
value of his or her investment in any of
the Separate Accounts. Contract owners
will not suffer any adverse tax
consequences as a result of the
substitutions. The fees and charges
under the Contracts will not increase
because of the substitutions. Even
though the Separate Accounts, the
Insurance Companies, MIST and Met
Series Fund may not rely on Rule 17a–
7, the Section 17 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. In addition, as stated
above, the in-kind redemptions will
only be made in accordance with the
conditions set out in the Signature
Financial Group no-action letter
(December 29, 1999).
28. The boards of MIST and Met
Series Fund have adopted procedures,
as required by paragraph (e)(1) of Rule
17a–7, pursuant to which the series of
each may purchase and sell securities to
and from their affiliates. The Section 17
Applicants will carry out the proposed
Insurance Company in-kind purchases
in conformity with all of the conditions
of Rule 17a–7 and each series’
procedures thereunder, except that the
consideration paid for the securities
being purchased or sold may not be
entirely cash. Nevertheless, the
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14MRN1
rwilkins on PROD1PC63 with NOTICES
Federal Register / Vol. 73, No. 51 / Friday, March 14, 2008 / Notices
circumstances surrounding the
proposed substitutions will be such as
to offer the same degree of protection to
each Replacement Fund from
overreaching that Rule 17a–7 provides
to them generally in connection with
their purchase and sale of securities
under that Rule in the ordinary course
of their business. In particular, the
Insurance Companies (or any of their
affiliates) cannot effect the proposed
transactions at a price that is
disadvantageous to any of the
Replacement Funds. Although the
transactions may not be entirely for
cash, each will be effected based upon
(1) the independent market price of the
portfolio securities valued as specified
in paragraph (b) of Rule 17a–7, and (2)
the net asset value per share of each
fund involved valued in accordance
with the procedures disclosed in its
respective Investment Company’s
registration statement and as required
by Rule 22c–1 under the Act. No
brokerage commission, fee, or other
remuneration will be paid to any party
in connection with the proposed in kind
purchase transactions.
29. The sale of shares of Replacement
Funds for investment securities, as
contemplated by the proposed
Insurance Company in-kind purchases,
is consistent with the investment policy
and restrictions of the Investment
Companies and the Replacement Funds
because (1) the shares are sold at their
net asset value, and (2) the portfolio
securities are of the type and quality
that the Replacement Funds would each
have acquired with the proceeds from
share sales had the shares been sold for
cash. To assure that the second of these
conditions is met, Met Investors
Advisory, LLC, MetLife Advisers, LLC
and the sub-adviser, as applicable, will
examine the portfolio securities being
offered to each Replacement Fund and
accept only those securities as
consideration for shares that it would
have acquired for each such fund in a
cash transaction.
30. The Section 17 Applicants submit
that the proposed Insurance Company
in-kind purchases are consistent with
the general purposes of the Act as stated
in the Findings and Declaration of
Policy in Section 1 of the Act and that
the proposed transactions do not
present any of the conditions or abuses
that the Act was designed to prevent.
31. The Section 17 Applicants
represent that the proposed in-kind
purchases meet all of the requirements
of Section 17(b) of the Act and request
that the Commission issue an order
pursuant to Section 17(b) of the Act
exempting the Separate Accounts, the
Insurance Companies, MIST, Met Series
VerDate Aug<31>2005
19:17 Mar 13, 2008
Jkt 214001
Fund and each Replacement Fund from
the provisions of Section 17(a) of the
Act to the extent necessary to permit the
Insurance Companies on behalf of the
Separate Accounts to carry out, as part
of the substitutions, the in-kind
purchase of shares of the Replacement
Funds which may be deemed to be
prohibited by Section 17(a) of the Act.
Conclusion
Applicants assert that for the reasons
summarized above that the proposed
substitutions and related transactions
meet the standards of Section 26(c) of
the Act and are consistent with the
standards of Section 17(b) of the Act
and that the requested orders should be
granted.
For the Commission, by the Division of
Investment Management pursuant to
delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–5101 Filed 3–13–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57459; File No. SR–BSE–
2008–13]
Self-Regulatory Organizations; Boston
Stock Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change Relating to the
Fee Schedule of the Boston Options
Exchange
March 10, 2008.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on March 7,
2008, the Boston Stock Exchange, Inc.
(‘‘BSE’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
substantially prepared by the BSE. The
BSE has designated the proposed rule
change as constituting a stated policy,
practice, or interpretation with respect
to the meaning, administration, or
enforcement of an existing rule of the
self-regulatory organization pursuant to
Section 19(b)(3)(A)(i) of the Act 3 and
Rule 19b–4(f)(1) thereunder,4 which
renders the proposal effective upon
filing with the Commission. The
Commission is publishing this notice to
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(i).
4 17 CFR 240.19b–4(f)(1).
2 17
PO 00000
Frm 00113
Fmt 4703
Sfmt 4703
13939
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
the Fee Schedule of the Boston Options
Exchange (‘‘BOX’’). The proposed rule
change will more clearly set forth the
fees that are presently already charged
for trading options contracts on BOX.
The text of the proposed rule change is
available on BSE’s Web site at https://
www.bostonoptions.com, at BSE’s
principal office, and at the
Commission’s Public Reference Room.
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
BSE 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 BSE 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
The Exchange proposes to amend the
BOX Fee Schedule. The proposed
change will more clearly set forth the
fees that are applicable to Public
Customer and Broker Dealer account
types. The proposed change will not
modify the level of fees that are charged
for the trading of options contracts on
BOX, nor will it change to whom the
fees are charged.
The Exchange currently applies an
alternative pricing structure for certain
classes of options contracts traded on
BOX, the Liquidity Make or Take
pricing structure (‘‘Make or Take’’).
Make or Take fees and credits apply to
transactions for all account types (e.g.,
Public Customer, Broker Dealer or
Market Maker) as set forth in Section 7
of the BOX Fee Schedule. Specific
references to the Liquidity Make or Take
pricing structure and the fees and
credits associated therewith are not
currently included within the sections
of fees applicable to Public Customer
accounts as well as Broker Dealer
proprietary accounts. However,
particular reference to Make or Take is
made within the section of fees
E:\FR\FM\14MRN1.SGM
14MRN1
]]>Agencies
[Federal Register Volume 73, Number 51 (Friday, March 14, 2008)]
[Notices]
[Pages 13931-13939]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-5101]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. IC-28190; File No. 812-13439]
MetLife Insurance Company of Connecticut, et al.
March 10, 2008.
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 (the ``Act'') approving certain
substitutions of securities and an order of exemption pursuant to
Section 17(b) of the Act from Section 17(a) of the Act.
-----------------------------------------------------------------------
Applicants: MetLife Insurance Company of Connecticut (``MetLife of
CT''), MetLife of CT Separate Account Five for Variable Annuities
(``Separate Account Five''), MetLife of CT Separate Account Seven for
Variable Annuities (``Separate Account Seven''), MetLife of CT Separate
Account Nine for Variable Annuities (``Separate Account Nine''),
MetLife of CT Separate Account Eleven for Variable Annuities
(``Separate Account Eleven''), MetLife of CT Separate Account Thirteen
for Variable Annuities (``Separate Account Thirteen''), MetLife of CT
Fund U for Variable Annuities (``Fund U''), MetLife of CT Separate
Account PF for Variable Annuities (``Separate Account PF''), MetLife of
CT Separate Account TM for Variable Annuities (``Separate Account
TM''), MetLife of CT Fund ABD for Variable Annuities (``Fund ABD''),
MetLife of CT Fund BD for Variable Annuities (``Fund BD''), MetLife of
CT Separate Account QP for Variable Annuities (``Separate Account
QP''), MetLife of CT Separate Account QPN for Variable Annuities
(``Separate Account QPN''), MetLife of CT Fund BD III for Variable
Annuities (``Fund BD III''), MetLife Insurance Company of CT Variable
Annuity Separate Account 2002 (``Separate Account 2002''), MetLife of
CT Separate Account CPPVUL I (``Separate Account CPPVUL I''), MetLife
of CT Fund UL III for Variable Life Insurance (``Fund UL III''),
MetLife of CT Fund UL for Variable Life Insurance (``Fund UL''),
MetLife of CT Separate Account Six for Variable Annuities (``Separate
Account Six''), MetLife of CT Separate Account Eight for Variable
Annuities (``Separate Account Eight''), MetLife of CT Separate Account
Ten for Variable Annuities (``Separate Account Ten''), MetLife of CT
Separate Account Twelve for Variable Annuities (``Separate Account
Twelve''), MetLife of CT Separate Account Fourteen for Variable
Annuities (``Separate Account Fourteen''), MetLife of CT Separate
Account PF II for Variable Annuities (``Separate Account PF II''),
MetLife of CT Separate Account TM II for Variable Annuities (``Separate
Account TM II''), MetLife of CT Fund ABD II for Variable Annuities
(``Fund ABD II''), MetLife of CT Fund BD II for Variable Annuities
(``Fund BD II''), MetLife of CT Fund BD IV for Variable Annuities
(``Fund BD IV''), MetLife Life and Annuity Company of CT Variable
Annuity Separate Account 2002 (``MetLife LAN Separate Account 2002''),
MetLife of CT Fund UL II for Variable Life Insurance (``Fund UL II''),
MetLife Investors Insurance Company (``MetLife Investors''), MetLife
Investors Variable Annuity Account One (``VA Account One''), MetLife
Investors Variable Annuity Account Five (``VA Account Five''), MetLife
Investors Variable Life Account One (``VL Account One''), MetLife
Investors Variable Life Account Five (``VL Account Five''), MetLife
Investors Variable Life Account Eight (``VL Account Eight''), First
MetLife Investors Insurance Company (``First MetLife Investors''),
First MetLife Investors Variable Annuity Account One (``First VA
Account One''), MetLife Investors USA Insurance Company (``MetLife
Investors USA''), MetLife Investors USA Separate Account A (``Separate
Account A''), Metropolitan Life Insurance Company (``MetLife''),
Metropolitan Life Separate Account E (``Separate Account E''),
Metropolitan Life Separate Account F (``Separate Account F''),
Metropolitan Life Separate Account DCVL (``Separate Account DCVL''),
Metropolitan Life Separate Account UL (``Separate Account UL''),
Metropolitan Life Variable Annuity Separate Account I (formerly First
Citicorp Life Variable Annuity Separate Account) (``Separate Account
I''), Metropolitan Life Variable Annuity Separate Account II (formerly
Citicorp Life Variable Annuity Separate Account) (``Separate Account
II''), Metropolitan Life Separate Account 18S (formerly Security Equity
Separate Account 18) (``Separate Account 18S''), Metropolitan Life
Separate Account 13S (formerly Security Equity Separate Account 13)
(``Separate Account 13S''), Metropolitan Life Separate Account 37S
(formerly Security Equity Separate Account 37) (``Separate Account
37S''), Security Equity Separate Account Twenty Six (``SE Separate
Account Twenty Six''), The New England Variable Account (``NEVA''), New
England Life Insurance Company (``New England''), New England Variable
Life Separate Account (``NEVL Separate Account''), New England Variable
Life Separate Account Four (``NEVL Separate Account Four''), New
England Variable Life Separate Account Five (``NEVL Separate Account
Five''), General American Life Insurance Company (``General American'')
(together with MetLife of CT, MetLife Investors, First MetLife
Investors, MetLife Investors USA, MetLife, New England and General
American, the ``Insurance Companies''), General American Separate
Account Two (``GA Separate Account Two''), General American Separate
Account Seven (``GA Separate Account Seven''), General American
Separate Account Eleven (``GA Separate Account Eleven''), General
American Separate Account Twenty Eight (``GA Separate Account Twenty
Eight''), General American Separate Account Thirty-Three (``Separate
Account Thirty-Three''), General American Separate Account Fifty-Eight
(``GA Separate
[[Page 13932]]
Account Fifty-Eight''), General American Separate Account Fifty-Nine
(``GA Separate Account Fifty-Nine'') (together with Separate Account
Six, Separate Account Seven, Separate Account Eight, Separate Account
Nine, Separate Account Ten, Separate Account Eleven, Separate Account
Twelve, Separate Account Thirteen, Separate Account Fourteen, Fund U,
Separate Account PF, Separate Account TM, Fund ABD, Fund BD, Separate
Account QP, Separate Account QPN, Fund BD III, Separate Account 2002,
Separate Account CPPVUL I, Separate Account Five, Fund UL III, Fund UL,
Separate Account PF II, Separate Account TM II, Fund ABD II, Fund BD
II, Fund BD IV, MetLife LAN Separate Account 2002, Fund UL II, VA
Account One, VA Account Five, VL Account Eight, First VA Account One,
VL Account One, VL Account Five, Separate Account A, Separate Account
E, Separate Account F, Separate Account DCVL, Separate Account UL,
Separate Account I, Separate Account II, Separate Account 18S, Separate
Account 13S, Separate Account 37S, SE Separate Account Twenty Six,
NEVA, NEVL Separate Account, NEVL Separate Account Four, NEVL Separate
Account Five, GA Separate Account Two, GA Separate Account Seven, GA
Separate Account Eleven, GA Separate Account Twenty Eight, GA Separate
Account Thirty-Three, GA Separate Account Fifty-Eight and GA Separate
Account Fifty-Nine, the ``Separate Accounts''), Met Investors Series
Trust (``MIST'') and Metropolitan Series Fund, Inc. (``Met Series
Fund'' together with MIST, the ``Investment Companies''). The Insurance
Companies and the Separate Accounts are referred to as the
``Substitution Applicants'' or ``Applicants.'' The Insurance Companies,
the Separate Accounts and the Investment Companies are referred to as
the ``Section 17 Applicants.''
Summary of Application: Applicants seek an order approving the
substitution of certain series of the Investment Companies for shares
of series of other registered investment companies held by the Separate
Accounts to fund certain group and individual variable annuity
contracts and variable life insurance policies issued by the Insurance
Companies (collectively, the ``Contracts''). The Section 17 Applicants
seek an order pursuant to Section 17(b) of the Act to permit certain
in-kind transactions in connection with the Substitutions.
Filing Date: The application was filed on October 10, 2007, and an
amended and restated application was filed on March 7, 2008.
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 April 14, 2008, 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 issued contested.
Persons may request notification of a hearing by writing to the
Secretary of the Commission.
ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street,
NE., Washington, DC 20549-1090. Applicants c/o Paul G. Cellupica, Chief
Counsel, MetLife Group, One MetLife Plaza, 27-01 Queens Plaza North,
Long Island City, NY 11101.
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 may be obtained for a fee from
the Public Reference Branch of the Commission, 100 F Street, NE.,
Washington, DC 20549, (202-551-8090).
Applicants' Representations
1. MetLife of CT (formerly, The Travelers Insurance Company) is a
stock life insurance company organized in 1863 under the laws of
Connecticut. MetLife Investors is a stock life insurance company
organized on August 17, 1981, under the laws of Missouri. First MetLife
Investors is a stock life insurance company organized on December 31,
1992, under the laws of New York. MetLife Investors USA is a stock life
insurance company organized on September 13, 1960, under the laws of
Delaware. MetLife is a stock life insurance company organized in 1868
under the laws of New York. New England is a stock life insurance
company organized in 1980 under the laws of Delaware. General American
is a stock life insurance company organized in 1933 under the laws of
Missouri.
2. Separate Account Five, Separate Account Seven, Separate Account
Nine, Separate Account Eleven, Separate Account Thirteen, Fund U,
Separate Account PF, Separate Account TM, Fund ABD, Fund BD, Separate
Account QP, Fund BD III, Separate Account 2002, Fund UL III, Fund UL,
Separate Account Six, Separate Account Eight, Separate Account Ten,
Separate Account Twelve, Separate Account Fourteen, Separate Account PF
II, Separate Account TM II, Fund ABD II, Fund BD II, Fund BD IV,
MetLife LAN Separate Account 2002, Fund UL II, VA Account One, VA
Account Five, VL Account One, VL Account Five, First VA Account One,
Separate Account A, Separate Account E, Separate Account UL, Separate
Account I, Separate Account II, Separate Account 13S, SE Separate
Account Twenty Six, NEVA, NEVL Separate Account, GA Separate Account
Two, GA Separate Account Eleven, and GA Separate Account Twenty Eight
are registered under the Act as unit investment trusts for the purpose
of funding the Contracts. Security interests under the Contracts have
been registered under the Securities Act of 1933.
3. Separate Account QPN is exempt from registration under the Act.
Security interests under the Contracts have been registered under the
Securities Act of 1933.
4. Separate Account CCPVUL 1, VL Account Eight, Separate Account
DCVL, Separate Account 18S, Separate Account 37S, NEVL Separate Account
Four, Separate Account F, NEVL Separate Account Five, GA Separate
Account Seven, GA Separate Account Thirty-Three, GA Separate Account
Fifty-Eight, and GA Separate Account Fifty-Nine serve as separate
account funding vehicles for certain Contracts that are exempt from
registration under Section 4(2) of the Securities Act of 1933 and
Regulation D thereunder.
5. MIST and Met Series Fund are each registered under the Act as
open-end management investment companies of the series type, and their
securities are registered under the Securities Act of 1933. Met
Investors Advisory, LLC and MetLife Advisers, LLC serve as investment
adviser to MIST and Met Series Fund, respectively.
6. The annuity contracts permit the Insurance Companies to
substitute shares of one fund with shares of another, including a fund
of a different registered investment company.
7. Each Insurance Company, on its behalf and on behalf of the
Separate Accounts, proposes to make certain substitutions of shares of
sixteen funds (the ``Existing Funds'') held in sub-accounts of its
respective Separate Accounts for certain series (the
[[Page 13933]]
``Replacement Funds'') of MIST and Met Series Fund.
8. The proposed substitutions are as follows: shares of MIST's
Lazard Mid-Cap Portfolio for shares of AIM V.I. Mid-Cap Core Equity
Portfolio and Dreyfus MidCap Stock Portfolio; shares of Met Series
Fund's Davis Venture Value Portfolio for shares of Dreyfus Appreciation
Portfolio; shares of Met Series Fund's T. Rowe Price Small Cap Growth
Portfolio for shares of Dreyfus Developing Leaders Portfolio; shares of
MIST's Oppenheimer Capital Appreciation Portfolio for shares of
Fidelity VIP Growth Portfolio; shares of MIST's MFS Emerging Markets
Equity Portfolio for shares of Templeton Developing Markets Securities
Fund; shares of Met Series Fund's Jennison Growth Portfolio for shares
of Van Kampen Strategic Growth Portfolio; shares of MIST's Van Kampen
Mid-Cap Growth Portfolio for shares of Van Kampen UIF Mid Cap Growth
Portfolio and Putnam VT Discovery Growth Fund; shares of Met Series
Fund's Western Asset Management U.S. Government Portfolio for shares of
AIM V.I. Government Securities Fund and Legg Mason Partners Variable
Government Portfolio; shares of Met Series Fund's T. Rowe Price Large
Cap Growth Portfolio for shares of AllianceBernstein VPS Large Cap
Growth Portfolio and MFS Emerging Growth Series; shares of MIST's MFS
Research International Portfolio for shares of Fidelity VIP Overseas
Portfolio; shares of Met Series Fund's Oppenheimer Global Equity
Portfolio for shares of Janus Worldwide Growth Portfolio; and shares of
MIST's BlackRock Large-Cap Core Portfolio for shares of MFS Research
Series.
9. Following is a summary of the investment objectives and polices
of the Existing Funds and their respective Replacement Funds.
Additional information including asset sizes, risk factors and
comparative performance history for each Existing Fund and each
Replacement Fund can be found in the Application.
------------------------------------------------------------------------
Existing fund Replacement fund
------------------------------------------------------------------------
AIM V.I. Mid-Cap Core Equity Fund-- Lazard Mid-Cap Portfolio--seeks
seeks long-term capital growth. The long-term growth of capital.
Fund normally invests at least 80% of The Portfolio normally invests
its assets in equity securities, at least 80% of its net assets
including convertible securities, of in equity securities including
mid-capitalization companies. convertible securities of
undervalued mid-cap companies.
Dreyfus MidCap Stock Portfolio--seeks ...............................
investment results that are greater
than the total return performance of
publicly traded common stocks of mid-
sized domestic companies in the
aggregate as represented by the
Standard & Poor's MidCap 400 Index.
The Portfolio normally invests at
least 80% of its assets in stocks of
mid-sized companies.
Dreyfus Appreciation Portfolio--seeks Davis Venture Value Portfolio--
long-term capital growth consistent seeks growth of capital. Under
with the preservation of capital. normal circumstances, the
Current income is a secondary goal. majority of the Portfolio's
Under normal circumstances, the assets are primarily invested
Portfolio invests at least 80% of its in equity securities of
assets in common stocks. undervalued companies with
market capitalizations of at
least $10 billion.
Dreyfus Developing Leaders Portfolio-- T. Rowe Price Small Cap Growth
seeks capital growth. The Portfolio Portfolio--seeks long-term
normally invests at least 80% of its capital growth. Under normal
assets in the stocks of companies market conditions, invests at
believed to be developing leaders, least 80% of the Portfolio's
companies characterized by new or net assets in a diversified
innovative products, services or group of small capitalization
processes having the potential to companies, within the range of
enhance earnings or revenue growth. market capitalization of
companies in the MSCI U.S.
Small Cap Growth Index.
Fidelity VIP Growth Portfolio--seeks Oppenheimer Capital
capital appreciation. Normally, the Appreciation Portfolio--seeks
Portfolio invests at least 80% of its capital appreciation. The
assets in stocks, primarily common Portfolio invests mainly in
stocks. common stocks of growth
companies.
Templeton Developing Markets Securities MFS Emerging Markets Equity
Fund--seeks long-term capital Portfolio--seeks capital
appreciation. Normally, the Fund appreciation. The Portfolio
invests at least 80% of its net assets normally invests at least 80%
in emerging market investments. of its net assets in equity
investments of issuers that
are tied economically to
emerging market economies.
Van Kampen Strategic Growth Portfolio-- Jennison Growth Portfolio--
seeks capital appreciation. Under seeks long-term growth of
normal market conditions, the capital. The Portfolio
Portfolio invests primarily in common normally invests at least 65%
stocks of domestic or foreign of its assets in equity and
companies considered to have higher equity-related securities of
potential growth rates than may be U.S. growth companies that
currently expected in the market. exceed $1 billion in market
capitalization and are
believed to have strong
capital appreciation
potential.
Van Kampen UIF Mid Cap Growth Van Kampen Mid-Cap Growth
Portfolio--seeks long-term capital Portfolio--seeks capital
growth by investing primarily in appreciation. Under normal
common stocks and other equity market conditions, the
securities. Portfolio invests at least 80%
of its assets in securities of
medium-sized companies.
Putnam VT Discovery Growth Fund--seeks ...............................
long-term growth of capital. The Fund
invests mainly in the common stocks of
U.S. companies with a focus on growth
stocks.
AIM V.I. Government Securities Fund-- Western Asset Management U.S.
seeks a high level of current income Government Portfolio--seeks to
consistent with reasonable concern for maximize total return
safety of principal. Normally, at consistent with preservation
least 80% of the Fund's assets will be of capital and maintenance of
invested, issued, guaranteed or liquidity. The Portfolio
otherwise backed by the U.S. generally invests at least 80%
Government or its agencies and of its assets in fixed income
instrumentalities. securities issued or
guaranteed by the U.S.
Government or its agencies,
authorities or
instrumentalities.
Legg Mason Partners Variable Government ...............................
Portfolio--seeks high current return
consistent with preservation of
capital. Under normal circumstances,
the Portfolio invests at least 80% of
its net assets in debt securities
issued or guaranteed by the U.S.
government, its agencies or
instrumentalities and related
investments.
AllianceBernstein VPS Large Cap Growth T. Rowe Price Large Cap Growth
Portfolio--seeks long term growth of Portfolio--seeks long-term
capital. Under normal circumstances, growth of capital and,
the Portfolio will invest at least 80% secondarily, dividend income.
of its net assets in common stocks of Normally, the Portfolio
a limited number of large invests at least 80% of its
capitalization growth U.S. companies. assets in the equity
securities of a diversified
group of large capitalization
companies.
[[Page 13934]]
MFS Emerging Growth Series--seeks ...............................
capital appreciation. The Series
invests primarily in equity securities
of companies believed to have above
average earnings growth potential.
Fidelity VIP Overseas Portfolio--seeks MFS Research International
long-term growth of capital. Normally, Portfolio--seeks capital
the Portfolio invests at least 80% of appreciation. The Portfolio
its assets in non-U.S. securities, invests primarily in foreign
primarily common stocks. equity securities, including
emerging market equity
securities.
Janus Worldwide Growth Portfolio--seeks Oppenheimer Global Equity
long-term growth of capital in a Portfolio--seeks capital
manner consistent with the appreciation. Under normal
preservation of capital. The Portfolio circumstances the Portfolio
invests primarily in the common stocks invests in primarily common
of companies of any size located stocks of U.S. and foreign
throughout the world. growth companies.
MFS Research Series--seeks capital BlackRock Large-Cap Core
appreciation. The investment adviser Portfolio--seeks long-term
normally invests the Series' assets capital growth. Normally, the
primarily in equity securities. Portfolio invests at least 80%
of its assets in U.S. large-
cap companies.
------------------------------------------------------------------------
10. The management fees, 12b-1 fees (if applicable) other expenses
and total operating expenses for each Existing and Replacement Fund are
as follows:
----------------------------------------------------------------------------------------------------------------
Total Net
Management Distribution Other annual Expense annual
fees (12b-1) fees expenses expenses waivers expenses
----------------------------------------------------------------------------------------------------------------
Replacement Fund: Lazard Mid-Cap 0.70 *0.25 0.06 1.01 N/A 1.01
Portfolio, Class B.................
Existing Fund: AIM V.I. Mid-Cap Core 0.72 0.25 0.34 1.31 N/A 1.31
Equity Fund, Series II.............
Replacement Fund: Lazard Mid-Cap 0.70 N/A 0.06 0.76 N/A 0.76
Portfolio, Class A.................
Existing Fund: Dreyfus MidCap Stock 0.75 N/A 0.06 0.81 N/A 0.81
Portfolio, Initial Class...........
Replacement Fund: Lazard Mid-Cap 0.70 *0.25 0.06 1.01 N/A 1.01
Portfolio, Class B.................
Existing Fund: Dreyfus MidCap Stock 0.75 0.25 0.06 1.06 N/A 1.06
Portfolio, Service Class...........
Replacement Fund: Davis Venture 0.71 N/A 0.04 0.75 N/A 0.75
Value Portfolio, Class A...........
Existing Fund: Dreyfus Appreciation 0.75 N/A 0.07 0.82 N/A 0.82
Portfolio, Initial Class...........
Replacement Fund: T. Rowe Price 0.51 *0.25 0.07 0.83 N/A 0.83
Small Cap Growth Portfolio, Class B
Existing Fund: Dreyfus Developing 0.75 N/A 0.09 0.84 N/A 0.84
Leaders Portfolio, Initial Class...
Replacement Fund: Oppenheimer 0.57 N/A 0.05 0.62 N/A 0.62
Capital Appreciation Portfolio,
Class A............................
Existing Fund: Fidelity VIP Growth 0.57 N/A 0.11 0.68 N/A 0.68
Portfolio, Initial Class...........
Replacement Fund: MFS Emerging 1.04 N/A 0.29 1.33 **0.03 1.30
Markets Equity Portfolio, Class A..
Existing Fund: Templeton Developing 1.23 N/A 0.24 1.47 N/A 1.47
Markets Securities Fund, Class 1...
Replacement Fund: MFS Emerging 1.04 *0.25 0.47 1.76 **0.21 1.55
Markets Equity Portfolio, Class B..
Existing Fund:Templeton Developing 1.23 0.25 0.24 1.72 N/A 1.72
Markets Securities Fund, Class 2...
Replacement Fund: Jennison Growth 0.63 N/A 0.05 0.68 N/A 0.68
Portfolio, Class A.................
Existing Fund: Van Kampen Strategic 0.70 N/A 0.08 0.78 N/A 0.78
Growth Portfolio, Class I..........
Replacement Fund: Jennison Growth 0.63 *0.25 0.05 0.93 N/A 0.93
Portfolio, Class B.................
Existing Fund: Van Kampen Strategic 0.70 0.25 0.08 1.03 N/A 1.03
Growth Portfolio, Class II.........
Replacement Fund: Van Kampen Mid-Cap 0.70 N/A 0.26 0.96 **0.05 0.91
Growth Portfolio, Class A..........
Existing Fund: Van Kampen UIF Mid 0.75 N/A 0.31 1.06 N/A 1.06
Cap Growth Portfolio, Class I......
Replacement Fund: Western Asset 0.50 N/A 0.07 0.57 N/A 0.57
Management U.S. Government
Portfolio, Class A.................
Existing Fund: AIM V.I. Government 0.46 N/A 0.33 0.79 **0.04 0.75
Securities Fund, Series I..........
Replacement Fund: Western Asset 0.50 *0.25 0.07 0.82 N/A 0.82
Management U.S. Government
Portfolio, Class B.................
Existing Fund: AIM V.I. Government 0.46 0.25 0.33 1.04 **0.04 1.00
Securities Fund, Series II.........
Replacement Fund: T. Rowe Price 0.60 *0.25 0.08 0.93 N/A 0.93
Large Cap Growth Portfolio, Class B
Existing Fund: AllianceBernstein 0.75 0.25 0.08 1.08 N/A 1.08
Large Cap Growth Portfolio, Class B
Replacement Fund: MFS Research 0.72 N/A 0.14 0.86 N/A 0.86
International Portfolio, Class A...
Existing Fund: Fidelity VIP Overseas 0.72 N/A 0.16 0.88 N/A 0.88
Portfolio, Initial Class...........
Replacement Fund: MFS Research 0.72 *0.25 0.14 1.11 N/A 1.11
International Portfolio, Class B...
[[Page 13935]]
Existing Fund: Fidelity VIP Overseas 0.72 0.25 0.16 1.13 N/A 1.13
Portfolio, Service Class 2.........
Replacement Fund: Oppenheimer Global 0.53 N/A 0.09 0.62 N/A 0.62
Equity Portfolio, Class A..........
Existing Fund: Janus Worldwide 0.60 N/A 0.04 0.64 N/A 0.64
Growth Portfolio, Institutional
Class..............................
Replacement Fund: Oppenheimer Global 0.53 *0.25 0.09 0.87 N/A 0.87
Equity Portfolio, Class B..........
Existing Fund: Janus Worldwide 0.60 0.25 0.05 0.90 N/A 0.90
Growth Portfolio, Service Class....
Replacement Fund: T. Rowe Price 0.60 N/A 0.08 0.68 N/A 0.68
Large Cap Growth Portfolio, Class A
Existing Fund: MFS Emerging Growth 0.75 N/A 0.12 0.87 N/A 0.87
Series, Initial Class..............
Replacement Fund: BlackRock Large- 0.63 N/A 0.22 0.85 N/A 0.85
Cap Core Portfolio, Class A........
Existing Fund: MFS Research Series, 0.75 N/A 0.14 0.89 N/A 0.89
Initial Class......................
Replacement Fund: Van Kampen Mid-Cap 0.70 *0.25 0.27 1.22 **0.06 1.16
Growth Portfolio, Class B..........
Existing Fund: Putnam VT Discovery 0.70 0.25 0.55 1.50 N/A 1.50
Growth Fund, Class B...............
Replacement Fund: Western Asset 0.50 N/A 0.07 0.57 N/A 0.57
Management U.S. Government
Portfolio, Class A.................
Existing Fund: Legg Mason Partners 0.55 N/A 0.13 0.68 N/A 0.68
Variable Government Portfolio,
Class I............................
----------------------------------------------------------------------------------------------------------------
* Trustees/directors can increase 12b-1 fee to .50% without stockholder approval.
** Contractual waivers expiring 4/30/09.
11. MetLife Advisers, LLC or Met Investors Advisory, LLC is the
adviser of each of the Replacement Funds. Each Replacement Fund
currently offers up to five classes of shares, two of which, Class A
and Class B are involved in the substitutions. No Rule 12b-1 Plan has
been adopted for any Replacement Fund's Class A shares. Each
Replacement Fund's Class B shares have adopted a Rule 12b-1
distribution plan whereby up to 0.50% of a Fund's assets attributable
to its Class B shares, may be used to finance the distribution of the
Fund's shares. Currently, payments under the plan are limited to 0.25%
for Class B shares. The boards of trustees/directors of each MIST and
Met Series Fund may increase payments under its plans to the full
amount without shareholder approval. However, Met Series Fund and MIST
represent that Rule 12b-1 fees of the Class B shares of the Replacement
Funds issued in connection with the proposed substitutions will not be
raised above the current rate without approval after the substitution
of a majority in interest of the respective Replacement Funds'
shareholders.
12. Met Investors Advisory, LLC has entered into an agreement with
MIST whereby, for the period ending April 30, 2009 and any subsequent
year in which the agreement is in effect, the total annual operating
expenses of the following Replacement Funds (excluding interest, taxes,
brokerage commissions and Rule 12b-1 fees) will not exceed the amounts
stated. These expense caps may be extended by the investment adviser
from year to year:
------------------------------------------------------------------------
Percent
------------------------------------------------------------------------
Lazard Mid-Cap Portfolio..................................... 0.80
Oppenheimer Capital Appreciation Portfolio................... 0.75
MFS Emerging Markets Equity Portfolio........................ 1.30
Van Kampen Mid-Cap Growth Portfolio.......................... 0.90
MFS Research International Portfolio......................... 1.00
BlackRock Large-Cap Core Portfolio........................... 1.00
------------------------------------------------------------------------
13. The Applicants believe the substitutions will provide
significant benefits to Contract owners, including improved selection
of sub-advisers and simplification of fund offerings through the
elimination of overlapping offerings.
14. As a result of the substitutions, the number of investment
options under each Contract will either not be decreased, or, in those
cases where the number of investment options is being reduced, continue
to offer a significant number of alternative investment options
(currently expected to range in number from 3 to 110 after the
substitutions versus 3 to 110 before the substitutions).
15. Those substitutions which replace outside funds with funds for
which either Met Investors Advisory, LLC or MetLife Advisers, LLC acts
as investment adviser will permit each adviser, under the respective
Multi-Manager Order [IC-22824 (1997) and IC-23859 (1999)], to hire,
monitor and replace sub-advisers as necessary to achieve optimal
performance.
16. Contract owners with sub-account balances invested (through the
separate account) in shares of the Replacement Funds will have lower
total expense ratios taking into account fund expenses (including Rule
12b-1 fees, if any) and current fee waivers.
17. In the following substitutions, the management fee and
applicable Rule 12b-1 fee of the Replacement Fund are either currently
higher, or, at certain management fee breakpoints, may be higher than
those of the respective Existing Fund: AIM V.I. Government Securities
Fund/Western Asset Management U.S. Government Portfolio; Dreyfus
Developing Leaders Portfolio/T. Rowe Price Small Cap Growth Portfolio;
Fidelity VIP Growth Portfolio/Oppenheimer Capital Appreciation
Portfolio; Fidelity VIP Overseas Portfolio/MFS Research International
Portfolio; Janus Worldwide Growth Portfolio/Oppenheimer Global Equity
Portfolio; Putnam VT Discovery Growth Fund/Van Kampen Mid-Cap Growth
Portfolio; and Legg Mason Partners Variable Government Portfolio/
Western Asset Management U.S. Government Portfolio.
18. The Substitution Applicants propose to limit Contract charges
attributable to Contract value invested in the Replacement Funds
identified above following the proposed substitutions to a rate that
would offset the difference in the expense ratio
[[Page 13936]]
between each Existing Fund's net expense ratio and the net expense
ratio for the respective Replacement Fund. The other substitutions will
result in decreased net expense ratios (ranging from 2 basis points to
34 basis points), except as listed above. Moreover, there will be no
increase in Contract fees and expenses, including mortality and expense
risk fees and administration and distribution fees charged to the
Separate Accounts as a result of the substitutions. The Substitution
Applicants believe that the Replacement Funds have investment
objectives, policies and risk profiles that are either substantially
the same as, or sufficiently similar to, the corresponding Existing
Funds to make those Replacement Funds appropriate candidates as
substitutes.
19. In addition, after the substitutions, neither Met Investors
Advisory, LLC, MetLife Advisers, LLC nor any of their affiliates will
receive compensation from the charges to the Separate Accounts related
to the Contracts or from Rule 12b-1 fees or revenue sharing from the
Replacement Funds in excess of the compensation currently received from
the investment advisers or distributors of the Existing Funds.
20. The share classes of the Existing Funds and the Replacement
Funds are identical with respect to the imposition of Rule 12b-1 fees
currently imposed, except with respect to the substitution of T. Rowe
Price Small Cap Growth Portfolio for Dreyfus Developing Leaders
Portfolio where MetLife and its affiliates will receive 25 basis points
in 12b-1 fees after the substitution.
21. Each Replacement Fund's Class B Rule 12b-1 fees can be raised
to 0.50% of net assets by the Replacement Fund's Board of Trustees/
Directors without shareholder approval. However, as stated above, Met
Series Fund and MIST represent that Rule 12b-1 fees of the Class B
shares of the Replacement Funds issued in connection with the proposed
substitutions will not be raised above the current rate without
approval of a majority in interest of the respective Replacement Funds'
shareholders after the substitution.
22. The distributors of the Existing Funds pay to the Insurance
Companies, or their affiliates, any 12b-1 fees associated with the
class of shares sold to the Separate Accounts. Similarly, the
distributors for MIST and Met Series Fund will receive from the
applicable class of shares held by the Separate Accounts Rule 12b-1
fees in the same amount or a lesser amount than the amount paid by the
Existing Funds, except with respect to the substitution of T. Rowe
Price Small Cap Growth Portfolio for Dreyfus Developing Leaders
Portfolio.
23. In addition to any Rule 12b-1 fees, the investment advisers or
distributors of the Existing Funds pay the Insurance Companies or one
of their affiliates from 10 to 38 basis points for Class A or Class B
shares (or their equivalent). Following the substitutions, these
payments will not be made on behalf of the Existing Funds. Rather, 25
basis points in Rule 12b-1 fees from the Replacement Funds (with
respect to Class B shares) and profit distributions to members from the
Replacement Funds' advisers, will be available to the Insurance
Companies. These profits from investment advisory fees may be more or
less than the fees being paid by the Existing Funds.
Applicants' Legal Analysis and Conditions
1. The Substitution Applicants request that the Commission issue an
order pursuant to Section 26(c) of the Act approving the proposed
substitutions.
2. Applicants represent that the Contracts permit the applicable
Insurance Company, subject to compliance with applicable law, to
substitute shares of another investment company for shares of an
investment company held by a sub-account of the Separate Accounts. The
prospectuses for the Contracts and the Separate Accounts contain
appropriate disclosure of this right.
3. By a supplement to the prospectuses for the Contracts and the
Separate Accounts, each Insurance Company notified all owners of the
Contracts of its intention to take the necessary actions, including
seeking the order requested by this Application, to substitute shares
of the funds as described herein. The supplement advised Contract
owners that from the date of the supplement until the date of the
proposed substitution, owners would be permitted to make one transfer
of Contract value (or annuity unit exchange) out of the Existing Fund
sub-account to one or more other sub-accounts without the transfer (or
exchange) being treated as one of a limited number of permitted
transfers (or exchanges) or a limited number of transfers (or
exchanges) permitted without a transfer charge. The supplement also
informed Contract owners that the Insurance Company would not exercise
any rights reserved under any Contract to impose additional
restrictions on transfers until at least 30 days after the proposed
substitutions. The supplement also advised Contract owners that for at
least 30 days following the proposed substitutions, the Insurance
Companies would permit Contract owners affected by the substitutions to
make one transfer of Contract value (or annuity unit exchange) out of
the Replacement Fund sub-account to one or more other sub-accounts
without the transfer (or exchange) being treated as one of a limited
number of permitted transfers (or exchanges) or a limited number of
transfers (or exchanges) permitted without a transfer charge.
4. The proposed substitutions will take place at relative net asset
value with no change in the amount of any Contract owner's Contract
value, cash value, or death benefit or in the dollar value of his or
her investment in the Separate Accounts.
5. The process for accomplishing the transfer of assets from each
Existing Fund to its corresponding Replacement Fund will be determined
on a case-by-case basis. In most cases, it is expected that the
substitutions will be effected by redeeming shares of an Existing Fund
for cash and using the cash to purchase shares of the Replacement Fund.
In certain other cases, it is expected that the substitutions will be
effected by redeeming the shares of an Existing Fund in-kind; those
assets will then be contributed in-kind to the corresponding
Replacement Fund to purchase shares of that Fund. All in-kind
redemptions from an Existing Fund of which any of the Substitution
Applicants is an affiliated person will be effected in accordance with
the conditions set forth in the Commission's no-action letter issued to
Signature Financial Group, Inc. (available December 28, 1999).
6. Contract owners will not incur any fees or charges as a result
of the proposed substitutions, nor will their rights or an Insurance
Company's obligations under the Contracts be altered in any way. All
expenses incurred in connection with the proposed substitutions,
including brokerage, legal, accounting, and other fees and expenses,
will be paid by the Insurance Companies. In addition, the proposed
substitutions will not impose any tax liability on Contract owners. The
proposed substitutions will not cause the Contract fees and charges
currently being paid by existing Contract owners to be greater after
the proposed substitutions than before the proposed substitutions. No
fees will be charged on the transfers made at the time of the proposed
substitutions because the proposed substitutions will not be treated as
a transfer for the purpose of assessing transfer charges or for
determining the number of
[[Page 13937]]
remaining permissible transfers in a Contract year.
7. In addition to the prospectus supplements distributed to owners
of Contracts, within five business days after the proposed
substitutions are completed, Contract owners will be sent a written
notice informing them that the substitutions were carried out and that
they may make one transfer of all Contract value or cash value under a
Contract invested in any one of the sub-accounts on the date of the
notice to one or more other sub-accounts available under their Contract
at no cost and without regard to the usual limit on the frequency of
transfers from the variable account options to the fixed account
options. The notice will also reiterate that (other than with respect
to ``market timing'' activity) the Insurance Company will not exercise
any rights reserved by it under the Contracts to impose additional
restrictions on transfers or to impose any charges on transfers until
at least 30 days after the proposed substitutions. The Insurance
Companies will also send each Contract owner current prospectuses for
the Replacement Funds involved to the extent that they have not
previously received a copy.
8. Each Insurance Company also is seeking approval of the proposed
substitutions from any state insurance regulators whose approval may be
necessary or appropriate.
9. The Substitution Applicants agree that for those who were
Contract owners on the date of the proposed substitutions, the
Insurance Companies will reimburse, on the last business day of each
fiscal period (not to exceed a fiscal quarter) during the twenty-four
months following the date of the proposed substitutions, those Contract
owners whose sub-account invests in the Replacement Fund such that the
sum of the Replacement Fund's operating expenses (taking into account
fee waivers and expense reimbursements) and sub-account expenses
(asset-based fees and charges deducted on a daily basis from sub-
account assets and reflected in the calculation of sub-account unit
values) for such period will not exceed, on an annualized basis, the
sum of the Existing Fund's operating expenses (taking into account fee
waivers and expense reimbursements) and sub-account expenses for fiscal
year 2006, except with respect to the Dreyfus Developing Leaders
Portfolio/T. Rowe Price Small Cap Growth Portfolio, AIM V.I. Government
Securities Fund/Western Asset Management U.S. Government Portfolio,
Fidelity VIP Overseas Portfolio/MFS Research International Portfolio,
Fidelity VIP Growth Portfolio/Oppenheimer Capital Appreciation
Portfolio, Janus Worldwide Growth Portfolio/Oppenheimer Global Equity
Portfolio, Putnam VT Discovery Growth Fund/Van Kampen Mid Cap Growth
Portfolio and Legg Mason Partners Variable Government Portfolio/Western
Asset Management U.S. Government Portfolio substitutions.
10. With respect to the Dreyfus Developing Leaders Portfolio/T.
Rowe Price Small Cap Growth Portfolio, AIM V.I. Government Securities
Fund/Western Asset Management U.S. Government Portfolio, Fidelity VIP
Overseas Portfolio/MFS Research International Portfolio, Fidelity VIP
Growth Portfolio/Oppenheimer Capital Appreciation Portfolio, Janus
Worldwide Growth Portfolio/Oppenheimer Global Equity Portfolio, Putnam
VT Discovery Growth Fund/Van Kampen Mid Cap Growth Portfolio and Legg
Mason Partners Variable Government Portfolio/Western Asset Management
U.S. Government Portfolio substitutions, the reimbursement agreement
with respect to the Replacement Fund's operating expenses and sub-
account expenses, will extend for the life of each Contract outstanding
on the date of the proposed substitutions.
11. The Substitution Applicants further agree that, except with
respect to Dreyfus Developing Leaders Portfolio/T. Rowe Price Small Cap
Growth Portfolio, AIM V.I. Government Securities Fund/Western Asset
Management U.S. Government Portfolio, Fidelity VIP Overseas Portfolio/
MFS Research International Portfolio, Fidelity VIP Growth Portfolio/
Oppenheimer Capital Appreciation Portfolio, Janus Worldwide Growth
Portfolio/Oppenheimer Global Equity Portfolio, Putnam VT Discovery
Growth Fund/Van Kampen Mid Cap Growth Portfolio and Legg Mason Partners
Variable Government Portfolio/Western Asset Management U.S. Government
Portfolio substitutions, the Insurance Companies will not increase
total separate account charges (net of any reimbursements or waivers)
for any existing owner of the Contracts on the date of the
substitutions for a period of two years from the date of the
substitutions.
12. With respect to the Dreyfus Developing Leaders Portfolio/T.
Rowe Price Small Cap Growth Portfolio, AIM V.I. Government Securities
Fund/Western Asset Management U.S. Government Portfolio, Fidelity VIP
Overseas Portfolio/MFS Research International Portfolio, Fidelity VIP
Growth Portfolio/Oppenheimer Capital Appreciation Portfolio, Janus
Worldwide Growth Portfolio/Oppenheimer Global Equity Portfolio, Putnam
VT Discovery Growth Fund/Van Kampen Mid Cap Growth Portfolio and Legg
Mason Partners Variable Government Portfolio/Western Asset Management
U.S. Government Portfolio substitutions, the agreement not to increase
the separate account charges will extend for the life of each Contract
outstanding on the date of the proposed substitutions.
13. The Substitution Applicants submit there is little likelihood
that significant additional assets, if any, will be allocated to the
Existing Funds and, therefore, because of the cost of maintaining such
Funds as investment options under the Contracts, it is in the interest
of shareholders to substitute the applicable Replacement Funds which
are currently being offered as investment options by the Insurance
Companies.
14. In each case, the applicable Insurance Companies believe that
it is in the best interests of the Contract owners to substitute the
Replacement Fund for the Existing Fund. The Insurance Companies believe
that the new sub-adviser will, over the long term, be positioned to
provide at least comparable performance to that of the Existing Fund's
sub-adviser.
15. The Substitution Applicants believe that most of the assets of
the Existing Funds belong to owners of variable annuity and variable
life insurance contracts issued by insurance companies unaffiliated
with MetLife. As such, Contract owners and future owners of contracts
issued by affiliated insurance companies of MetLife cannot expect to
command a majority voting position in any of the Existing Funds in the
event that they, as a group, desire that an Existing Fund move in a
direction different from that generally desired by owners of non-
MetLife affiliated contracts.
16. The Substitution Applicants anticipate that Contract owners
will be better off with the array of sub-accounts offered after the
proposed substitutions than they have been with the array of sub-
accounts offered prior to the substitutions.
17. The Substitution Applicants submit that none of the proposed
substitutions is of the type that Section 26(c) was designed to
prevent.
18. The Substitution Applicants request an order of the Commission
pursuant to Section 26(c) of the Act approving the proposed
substitutions by the Insurance Companies.
19. The Section 17 Applicants request an order under Section 17(b)
exempting
[[Page 13938]]
them from the provisions of Section 17(a) to the extent necessary to
permit the Insurance Companies to carry out each of the proposed
substitutions.
20. Section 17(a)(1) of the Act, in relevant part, prohibits any
affiliated person of a registered investment company, or any affiliated
person of such person, acting as principal, from knowingly selling any
security or other property to that company. Section 17(a)(2) of the Act
generally prohibits the persons acting as principals, from knowingly
purchasing any security or other property from the registered company.
21. Because shares held by a separate account of an insurance
company are legally owned by the insurance company, the Insurance
Companies and their affiliates collectively own of record substantially
all of the shares of MIST and Met Series Fund. Therefore, MIST and Met
Series Fund and their respective funds are arguably under the control
of the Insurance Companies notwithstanding the fact that Contract
owners may be considered the beneficial owners of those shares held in
the Separate Accounts. If MIST and Met Series Fund and their respective
funds are under the control of the Insurance Companies, then each
Insurance Company is an affiliated person or an affiliated person of an
affiliated person of MIST and Met Series Fund and their respective
funds. If MIST and Met Series Fund and their respective funds are under
the control of the Insurance Companies, then MIST and Met Series Fund
and their respective funds are affiliated persons of the Insurance
Companies.
22. Regardless of whether or not the Insurance Companies can be
considered to control MIST and Met Series Fund and their respective
funds, because the Insurance Companies own of record more than 5% of
the shares of each of them and are under common control with each
Replacement Fund's investment adviser, the Insurance Companies are
affiliated persons of both MIST and Met Series Fund and their
respective funds. Likewise, their respective funds are each an
affiliated person of the Insurance Companies.
23. The Insurance Companies, through their separate accounts in the
aggregate own more than 5% of the outstanding shares of the following
Existing Funds: Dreyfus Appreciation Portfolio, Dreyfus Developing
Leaders Portfolio, Fidelity VIP Growth Portfolio, Templeton Developing
Markets Securities Fund, Van Kampen Strategic Growth Portfolio, Van
Kampen UIF Mid Cap Growth Portfolio, Fidelity VIP Overseas Portfolio,
Putnam VT Discovery Growth Fund, Legg Mason Partners Variable
Government Portfolio. Therefore, each Insurance Company is an
affiliated person of those funds.
24. Because the substitutions may be effected, in whole or in part,
by means of in-kind redemptions and purchases, the substitutions may be
deemed to involve one or more purchases or sales of securities or
property between affiliated persons. The proposed transactions may
involve a transfer of portfolio securities by the Existing Funds to the
Insurance Companies; immediately thereafter, the Insurance Companies
would purchase shares of the Replacement Funds with the portfolio
securities received from the Existing Funds. Accordingly, as the
Insurance Companies and certain of the Existing Funds listed above, and
the Insurance Companies and the Replacement Funds, could be viewed as
affiliated persons of one another under Section 2(a)(3) of the Act, it
is conceivable that this aspect of the substitutions could be viewed as
being prohibited by Section 17(a).
25. Section 17(b) of the Act provides that the Commission may, upon
application, grant an order exempting any transaction from the
prohibitions of Section 17(a) if the evidence establishes that: (a) The
terms of the proposed transaction, including the consideration to be
paid or received, are reasonable and fair and do not involve
overreaching on the part of any person concerned; (b) the proposed
transaction is consistent with the policy of each registered investment
company concerned, as recited in its registration statement and records
filed under the Act; and (c) the proposed transaction is consistent
with the general purposes of the Act.
26. The Section 17 Applicants submit that for all the reasons
stated above the terms of the proposed in-kind purchases of shares of
the Replacement Funds by the Insurance Companies, including the
consideration to be paid and received are reasonable and fair and do
not involve overreaching on the part of any person concerned. The
Section 17 Applicants also submit that the proposed in-kind purchases
by the Insurance Companies are consistent with the policies of: MIST
and of its Lazard Mid-Cap, Oppenheimer Capital Appreciation, MFS
Emerging Markets Equity, Van Kampen Mid-Cap Growth, MFS Research
International and BlackRock Large-Cap Core Portfolios; and Met Series
Fund and of its Davis Venture Value, T. Rowe Price Small Cap Growth,
Jennison Growth, Western Asset Management U. S. Government, T. Rowe
Price Large Cap Growth and Oppenheimer Global Equity Portfolios, as
recited in the current registration statements and reports filed by
each under the Act. Finally, the Section 17 Applicants submit that the
proposed substitutions are consistent with the general purposes of the
Act.
27. To the extent that the in-kind purchases by the Insurance
Company of the Replacement Funds' shares are deemed to involve
principal transactions among affiliated persons, the procedures
described below should be sufficient to assure that the terms of the
proposed transactions are reasonable and fair to all participants. The
Section 17 Applicants maintain that the terms of the proposed in-kind
purchase transactions, including the consideration to be paid and
received by each fund involved, are reasonable, fair and do not involve
overreaching principally because the transactions will conform with all
but one of the conditions enumerated in Rule 17a-7. The proposed
transactions will take place at relative net asset value in conformity
with the requirements of Section 22(c) of the Act and Rule 22c-1
thereunder with no change in the amount of any Contract owner's
contract value or death benefit or in the dollar value of his or her
investment in any of the Separate Accounts. Contract owners will not
suffer any adverse tax consequences as a result of the substitutions.
The fees and charges under the Contracts will not increase because of
the substitutions. Even though the Separate Accounts, the Insurance
Companies, MIST and Met Series Fund may not rely on Rule 17a-7, the
Section 17 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. In addition, as stated above, the in-kind redemptions will
only be made in accordance with the conditions set out in the Signature
Financial Group no-action letter (December 29, 1999).
28. The boards of MIST and Met Series Fund have adopted procedures,
as required by paragraph (e)(1) of Rule 17a-7, pursuant to which the
series of each may purchase and sell securities to and from their
affiliates. The Section 17 Applicants will carry out the proposed
Insurance Company in-kind purchases in conformity with all of the
conditions of Rule 17a-7 and each series' procedures thereunder, except
that the consideration paid for the securities being purchased or sold
may not be entirely cash. Nevertheless, the
[[Page 13939]]
circumstances surrounding the proposed substitutions will be such as to
offer the same degree of protection to each Replacement Fund from
overreaching that Rule 17a-7 provides to them generally in connection
with their purchase and sale of securities under that Rule in the
ordinary course of their business. In particular, the Insurance
Companies (or any of their affiliates) cannot effect the proposed
transactions at a price that is disadvantageous to any of the
Replacement Funds. Although the transactions may not be entirely for
cash, each will be effected based upon (1) the independent market price
of the portfolio securities valued as specified in paragraph (b) of
Rule 17a-7, and (2) the net asset value per share of each fund involved
valued in accordance with the procedures disclosed in its respective
Investment Company's registration statement and as required by Rule
22c-1 under the Act. No brokerage commission, fee, or other
remuneration will be paid to any party in connection with the proposed
in kind purchase transactions.
29. The sale of shares of Replacement Funds for investment
securities, as contemplated by the proposed Insurance Company in-kind
purchases, is consistent with the investment policy and restrictions of
the Investment Companies and the Replacement Funds because (1) the
shares are sold at their net asset value, and (2) the portfolio
securities are of the type and quality that the Replacement Funds would
each have acquired with the proceeds from share sales had the shares
been sold for cash. To assure that the second of these conditions is
met, Met Investors Advisory, LLC, MetLife Advisers, LLC and the sub-
adviser, as applicable, will examine the portfolio securities being
offered to each Replacement Fund and accept only those securities as
consideration for shares that it would have acquired for each such fund
in a cash transaction.
30. The Section 17 Applicants submit that the proposed Insurance
Company in-kind purchases are consistent with the general purposes of
the Act as stated in the Findings and Declaration of Policy in Section
1 of the Act and that the proposed transactions do not present any of
the conditions or abuses that the Act was designed to prevent.
31. The Section 17 Applicants represent that the proposed in-kind
purchases meet all of the requirements of Section 17(b) of the Act and
request that the Commission issue an order pursuant to Section 17(b) of
the Act exempting the Separate Accounts, the Insurance Companies, MIST,
Met Series Fund and each Replacement Fund from the provisions of
Section 17(a) of the Act to the extent necessary to permit the
Insurance Companies on behalf of the Separate Accounts to carry out, as
part of the substitutions, the in-kind purchase of shares of the
Replacement Funds which may be deemed to be prohibited by Section 17(a)
of the Act.
Conclusion
Applicants assert that for the reasons summarized above that the
proposed substitutions and related transactions meet the standards of
Section 26(c) of the Act and are consistent with the standards of
Section 17(b) of the Act and that the requested orders should be
granted.
For the Commission, by the Division of Investment Management
pursuant to delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-5101 Filed 3-13-08; 8:45 am]
BILLING CODE 8011-01-P
