American Family Life Insurance Company, et al.

June 20, 2013.

Applicants: American Family Life Insurance Company (the "Company"), American Family Variable Account I (the "Life Account"), and American Family Variable Account II (the "Annuity Account") (together, the "Applicants").

Summary of Application: The Applicants seek an order pursuant to Section 26(c) of the 1940 Act, approving the substitution of shares of the Vanguard Money Market Portfolio ("Replacement Portfolio") of the Vanguard Variable Insurance Fund ("Vanguard Fund") for Initial Class Shares of the Fidelity Variable Insurance Products Money Market Portfolio ("Replaced Portfolio") of the Fidelity Variable Insurance Products Fund ("Fidelity Fund"), currently held by the Life Account and the Annuity Account (each an "Account," together, the "Accounts") to support variable life insurance and annuity contracts issued by the Company (collectively, the "Contracts").

DATES: Filing Date: The application was filed on January 8, 2013, and the amended and restated application was filed on May 16, 2013.

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 the 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 July 15, 2013, and should be accompanied by proof of service on the Applicants in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the requester's interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Secretary of the Commission.

ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

Applicants: David C. Holman, Esq., American Family Life Insurance Company, 6000 American Parkway, Madison, Wisconsin 53783-0001; Thomas E. Bisset, Esq., Sutherland Asbill & Brennan LLP, 700 Sixth Street NW., Suite 700, Washington, DC 20001-3980.

FOR FURTHER INFORMATION CONTACT: Patrick Scott, Senior Counsel, or Michael Kosoff, Branch Chief, Insured Investments Office, Division of Investment Management, at (202) 551-6795.

SUPPLEMENTARY INFORMATION: The following is a summary of the Application. The complete Application may be obtained via the Commission's Web site by searching for the file number, or for an Applicant using the Company name box, at http://www.sec.gov/search/search.htm, or by calling (202) 551-8090.

Applicants' Representations:

1. American Family Life Insurance Company conducts a conventional life insurance business and is authorized to transact the business of life insurance, including annuities, in twenty-seven states. For purposes of the 1940 Act, the Company is the depositor and sponsor of each of the Accounts as those terms have been interpreted by the Commission with respect to variable life insurance and variable annuity separate accounts.

2. The Annuity Account and the Life Account issue Contracts and the Company owns the assets of each Account attributable to a Contract. Such assets are held separately from the other assets of the Company for the benefit of the owners of, and the persons entitled to payment under, those Contracts. Each Account is a "separate account" as defined by Rule 0-1(e) under the 1940 Act and is registered with the Commission as a unit investment trust. /1/ Each Account is comprised of a number of subaccounts and each subaccount invests exclusively in one of the insurance dedicated mutual fund portfolios made available as investment vehicles underlying the Contracts. Currently, the Replaced Portfolio is available as an investment option under the Company's variable life insurance and variable annuity Contracts.

FOOTNOTE 1 File No. 811-10097 (the Life Account); File No. 811-10121 (the Annuity Account). END FOOTNOTE

3. The Fidelity Fund is registered /2/ as an open-end management investment company under the 1940 Act and currently offers five (5) investment portfolios, each with multiple share classes. The Fidelity Fund issues a series of shares of beneficial interest in connection with each portfolio and has registered such shares under the Securities Act of 1933 ("1933 Act") on Form N-1A. /3/

FOOTNOTE 2 File No. 811-05361. END FOOTNOTE

FOOTNOTE 3 File No. 33-17704. END FOOTNOTE

4. Each portfolio of the Fidelity Fund has entered into an advisory agreement with Fidelity Management & Research Company ("FMR") under which FMR acts as investment adviser for the portfolio.

5. Neither the Fidelity Fund, any of its portfolios, nor subadvisers are affiliated with the Applicants. The Fidelity Fund does not have manager-of-managers relief for the Replaced Portfolio.

6. The Vanguard Fund is registered as an open-end management investment company under the 1940 Act /4/ and currently offers seventeen (17) portfolios, including the Replacement Portfolio. The Vanguard Fund issues a series of shares of beneficial interest in connection with each portfolio and has registered such shares under the 1933 Act on Form N-1A. /5/

FOOTNOTE 4 File No. 811-05962. END FOOTNOTE

FOOTNOTE 5 File No. 33-32216. END FOOTNOTE

7. Pursuant to an investment advisory agreement between the Replacement Portfolio and The Vanguard Group, Inc. ("Vanguard"), Vanguard provides investment advisory services to the Replacement Portfolio. Vanguard manages the Replacement Portfolio subject to the supervision and oversight of the Replacement Portfolio's board of directors.

8. Neither the Vanguard Fund, any of its portfolios, nor Vanguard are affiliated with the Applicants. The Vanguard Fund and Vanguard have received an order from the Commission that allows the Vanguard Fund and Vanguard to utilize a multi-manager structure to manage the assets of the Replacement Portfolio. Pursuant to the order, Vanguard is permitted to select sub-advisers that are not affiliates of Vanguard (other than by virtue of serving as investment advisers to one or more Vanguard funds) and revise selected advisory agreements without obtaining shareholder approval, subject to the approval of the Vanguard Fund board of trustees and certain other conditions.

9. The Contracts are flexible premium variable annuity and variable life insurance contracts. The variable annuity contracts (file no. 333-45592) provide for the accumulation of values on a variable basis, fixed basis, or both, during the accumulation period, and provide settlement or annuity payment options on a fixed basis. The variable life insurance contracts (file nos. 333-44956 and 333-147408) provide for the accumulation of values on a variable basis, fixed basis, or both, throughout the insured's life, and for a substantial death benefit upon the death of the insured. Under each of the Contracts, the Company reserves the right to substitute shares of one fund for shares of another, or of another investment portfolio, including a portfolio of a different management company. Applicant state that the prospectus for the Contracts and the Accounts contain appropriate disclosure of this right.

10. For as long as a variable life insurance Contract remains in force or a variable annuity Contract has not yet been annuitized, a Contract owner may transfer all or any part of the Contract value from one subaccount to another subaccount or to a fixed account.

11. The Company proposes to substitute shares of the Replacement Portfolio for Initial Class shares of the Replaced Portfolio currently held in the Accounts (the "proposed substitution").

12. The application states that, the proposed substitution is part of an effort by the Company to provide a portfolio selection within the Contracts that: (1) Provides competitive long-term returns relative to other funds in the asset class peer group with lower investment risk; (2) provides a more competitive fee structure relative to other funds in the asset class peer group; and (3) maintains the goal of offering a mix of investment options covering basic categories in the risk/return spectrum.

13. The application states that, replacing the Replaced Portfolio with the Replacement Portfolio is appropriate and in the best interests of Contract owners because the stated investment objective, principal investment strategies, and principal investment risks of the Replacement Portfolio are substantially similar to those of the Replaced Portfolio, so that Contract owners will have continuity in investment expectations with somewhat lower risk. A comparison of the investing objectives, strategies, and risks of the Replaced Portfolio and the Replacement Portfolio is included in the application.

14. The following charts compare advisory fees, other expenses, and total operating expenses for the year ended December 31, 2012, expressed as an annual percentage of average daily net assets, of the Replaced Portfolio and the Replacement Portfolio. Neither the Replaced Portfolio nor the Replacement Portfolio impose a redemption fee.

FOOTNOTE 6 FMR has voluntarily agreed to reimburse the Initial Class of the Replaced Portfolio to the extent total operating expenses (excluding interest, taxes, brokerage commissions, and extraordinary expenses) as a percentage of average net assets exceed 0.40%. END FOOTNOTE

--This is a summary of a Federal Register article originally published on the page number listed below--

Notice of application for an order approving the substitution of certain securities pursuant to Section 26(c) of the Investment Company Act of 1940, as amended (the "1940 Act").

Citation: "78 FR 38412"

Document Number: "Investment Company Act Release No. 30564; File No. 812-14109"

Federal Register Page Number: "38412"

"Notices"