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Electronic mail: [email protected]
By letter dated
You state that ELIC is a inventory life insurance coverage firm, domiciled within the
You state that ELIC prepares SAP monetary statements which are audited by an impartial auditor and filed with the
You state that ELIC depends upon the exemption, supplied by rule 12h-7 underneath the Securities Change Act of 1934 (“Change Act”), from submitting periodic studies required by the Change Act and can depend on this exemption and adjust to the situations of the rule as long as ELIC depends on the requested permission./3 On this regard, you be aware that: (1) ELIC is topic to supervision by the
You state that the Contracts are deferred annuity contracts with market worth adjustment options (“MVA Contracts”) or deferred annuity contracts with index linked crediting options (“RILA Contracts”):
MVA Contracts. You state that the MVA Contracts are both standalone single or versatile premium annuity contracts that supply fastened price funding choices with market worth adjustment options, or are mixture contracts that supply fastened price funding choices with MVA options in addition to variable funding choices. You additional state that the fastened price funding choices within the Contracts, which ELIC has registered on Type S-1, assure an curiosity fee at a specified fastened price larger than or equal to 0% for a specified time period interval. You additionally state that withdrawals from or transfers out of a hard and fast price funding possibility earlier than the top of the desired time period are topic to a optimistic or damaging market worth adjustment that’s calculated based on a system prescribed by the Contracts.
RILA Contracts. You state that the RILA Contracts, which ELIC additionally has registered on Type S-1, are single premium deferred listed linked annuity contracts. You additional state that throughout the accumulation part of the RILA Contracts, Contract homeowners choose an funding possibility interval for his or her Contract and will choose amongst a set of curiosity crediting methods which are every linked to a market index or benchmark. You additionally state that the Contract makes use of the motion of the index as the premise to calculate the efficiency of every funding possibility, however efficiency is topic to specified minimal efficiency charges and most efficiency charges outlined within the Contract that rely upon the funding possibility(s) chosen.
You state that ELIC doesn’t supply the Contracts on the market, however current Contract homeowners could proceed to allocate subsequent premiums or further contract worth to out there fastened price funding choices within the MVA Contracts and likewise could proceed to rollover their present allocations to new time period intervals in each the MVA and RILA Contracts. You additionally state that: (1) the Contracts don’t and won’t represent an fairness curiosity in ELIC and are, and might be, topic to regulation underneath
You be aware that Rule 3-13 gives that the Fee could, upon the casual written request of the registrant, and the place in step with the safety of traders, allow the omission of a number of of the monetary statements required by Regulation S-X or the submitting in substitution therefor of acceptable statements of comparable character. You say that, for the Type S-1 registration assertion of the Contracts, SAP monetary statements audited by an impartial auditor/8 are acceptable statements of a comparable character to GAAP monetary statements and could be in step with investor safety.
In help of this declare, you are saying that traders within the Contracts might be most all for info related to assessing the issuing Firm’s capacity to meet its contractual obligations./9 You say that SAP monetary statements would offer traders within the Contracts with ample info to evaluate ELIC’s solvency and its capacity to fulfill its contractual obligations./10
On this regard, you declare that SAP monetary statements include detailed details about ELIC’s belongings and liabilities, together with its regulatory capital and surplus, which function monetary cushions for paying contract proprietor claims. As well as, you declare that SAP monetary statements allow state regulators to find out ELIC’s capacity to fulfill contract proprietor obligations based mostly on the supply of readily marketable belongings when obligations are due.
Based mostly on the info and representations set forth in your letter as summarized above, in addition to the situations outlined above, and with out essentially agreeing with your entire evaluation, your request for permission underneath Rule 3-13 for ELIC to file SAP monetary statements, audited by an impartial auditor, in lieu of GAAP monetary statements in registration statements filed for the Contracts on Type S-1, because it pertains to the accounting foundation of these monetary statements solely and as described above, is granted./11
If in case you have any questions concerning this letter, please name the Chief Accountant’s Workplace of the
For the Fee, by the
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1/ You be aware that these ideas are these which are prescribed or permitted by the Firm’s domiciliary state regulator.
2/ On this regard, you state that whereas sure of both ELIC’s guardian firms, or the overall accomplice of
3/ Rule 12h-7 exempts insurance coverage firms from submitting Change Act studies with respect to sure specified varieties of securities which are topic to state insurance coverage regulation and are registered underneath the Securities Act of 1933 if sure different situations are happy. 17 CFR 240.12h-7.
4/ Rule 12h-7(a) and (c) specify that an issuer qualifying underneath the rule is an organization topic to the supervision of the insurance coverage commissioner, financial institution commissioner, or any company or officer performing like capabilities, of any State (as outlined within the Change Act); and recordsdata an annual assertion of its monetary situation with, and is supervised and its monetary situation examined periodically by, the insurance coverage commissioner, financial institution commissioner, or any company or officer performing like capabilities, of the issuer’s domiciliary State.
5/ Rule 12h-7(b) specifies that the securities that will in any other case set off Change Act reporting obligations should not represent an fairness curiosity within the issuer, and should both be securities topic to regulation underneath the insurance coverage legal guidelines of the domiciliary State of the issuer or ensures of securities which are topic to regulation underneath the insurance coverage legal guidelines of that jurisdiction.
6/ Rule 12h-7(d) requires that these securities should not be listed, traded, or quoted on an alternate, different buying and selling system, inter-dealer citation system, digital communications community, or another comparable system, community, or publication for buying and selling or quoting. Rule 12h-7(e) requires that an issuer take steps moderately designed to make sure that a buying and selling marketplace for the securities doesn’t develop.
7/ Rule 12h-7(f) gives that the prospectus for the securities should include an announcement indicating that the issuer is counting on the exemption supplied by the rule.
8/ You state that the impartial auditor engaged to audit the SAP monetary statements will fulfill the independence requirements of Article 2 of Regulation S-X and might be registered with and topic to inspection by the
9/ You be aware the Fee acknowledged, in proposing variable annuity registration kinds, that contract homeowners, individuals, and annuitants could not need or want disclosure concerning the monetary efficiency of the insurance coverage firm, however as a substitute could also be solely within the insurer’s solvency. Registration Type for Insurance coverage Firm Separate Accounts that Supply Variable Annuity Contracts, Securities Act Launch No. 6502 and Funding Firm Act Launch No. 13689 (
10/ You additionally be aware that, whereas GAAP monetary statements help traders in understanding ELIC’s going concern worth, traders within the Contracts don’t want info concerning ELIC’s going concern worth since there is no such thing as a secondary market within the Contracts.
11/ Our evaluation underlying this assurance has been developed in session with the employees of the
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Authentic textual content right here: https://www.sec.gov/recordsdata/everlake-life-insurance-company-102122.pdf