The Northwestern Mutual Life Insurance Company, et al.; Notice of Application Agency: Securities and Exchange Commission ("SEC" or "Commission") - Insurance News | InsuranceNewsNet

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August 28, 2013 Newswires
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The Northwestern Mutual Life Insurance Company, et al.; Notice of Application Agency: Securities and Exchange Commission (“SEC” or “Commission”)

Federal Information & News Dispatch, Inc.

August 22, 2013.

Applicants: The Northwestern Mutual Life Insurance Company (the "Company"), NML Variable Annuity Account A ("VA Account A"), NML Variable Annuity Account B ("VA Account B") and NML Variable Annuity Account C ("VA Account C," and together with VA Account A and VA Account B, the "Annuity Accounts") and Northwestern Mutual Variable Life Account ("VL Account") and Northwestern Mutual Variable Life Account II ("VL Account II," together with VL Account, the "Life Accounts," and together with the Annuity Accounts, the "Separate Accounts"). The Company and the Separate Accounts are collectively referred to herein as the "Substitution Applicants." The Substitution Applicants and Credit Suisse Trust are also collectively referred to as the "Section 17 Applicants."

Summary of the Application: The Substitution Applicants seek an order pursuant to Section 26(c) of the 1940 Act, approving the substitution of shares of the Commodity Return Strategy Portfolio (the "Replacement Fund"), a series of Credit Suisse Trust, for shares of the Commodities Return Strategy Portfolio (the "Replaced Fund"), a series of the Northwestern Mutual Series Fund, Inc. (the "Series Fund"), under each of the variable annuity contracts and variable life insurance policies issued by the Separate Accounts (collectively, the "Contracts"). The Section 17 Applicants seek an order pursuant to Section 17(b) of the 1940 Act exempting them from 17(a) of the Act to the extent necessary to permit them to engage in certain in-kind transactions in connection with the substitution ("In-Kind Transactions").

DATES: Filing Date:

The application was filed on March 6, 2013, and the amended and restated application was filed on July 12, 2013.Hearing or Notification of a Hearing: An order granting the application will be issued unless the Commission orders 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 September 17, 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, SEC, 100 F Street NE., Washington, DC 20549-1090. Applicants: Chad E. Fickett, Assistant General Counsel, The Northwestern Mutual Life Insurance Company, 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202; Thomas E. Bisset, Esq., Sutherland Asbill & Brennan LLP, 700 Sixth Street NW., Suite 700, Washington, DC 20001-3980; Joanne Doldo, Credit Suisee Asset Management, LLC, One Madison Avenue, New York, New York 10010.

FOR FURTHER INFORMATION CONTACT: Mark Cowan, Senior Counsel, or Michael L. 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. The Company, on its own behalf and on behalf of their respective separate accounts, proposes to substitute shares of the Replacement Fund for shares of the Replaced Fund held by the Separate Accounts to fund the Contracts.

2. The Company is the depositor and sponsor of the Separate Accounts.

3. Each of VA Account A, VA Account B, VA Account C, VL Account and VL Account II is a "separate account" as defined by Rule 0-1(e) under the Act and each is registered under the Act as a unit investment trust for the purpose of funding the Contracts. Security interests under the Contracts have been registered under the Securities Act of 1933. The application sets forth the registration statement file numbers for the Contracts and the Separate Accounts.

4. The variable annuity Contracts are either flexible premium variable annuity contracts or unallocated group combination variable annuity contracts. The variable life insurance Contracts are either variable whole life forms of insurance contracts or variable universal life insurance contracts. Under each of the Contracts (the proper form of which is provided to every Contract owner) as well as the prospectus for each Contract, the Company has the right to substitute shares of one fund for shares of another fund managed by either the same investment adviser or by a different investment adviser.

5. The Replaced Fund is registered as an open-end management investment company and is a series of the Series Fund (File Number 811-03990). It offers its shares only to the Company and the Accounts for purposes of funding the Contracts.

6. The Replaced Fund has entered into an investment advisory agreement with Mason Street Advisors, LLC ("MSA"), a wholly-owned subsidiary of the Company.

7. The Series Fund has received an exemptive order from the Commission ("Multi-Manager Order") that permits the Manager, or any entity controlling, controlled by, or under common control (within the meaning of Section 2(a)(9) of the 1940 Act) with the Manager, subject to certain conditions, to hire and replace unaffiliated subadvisors and to enter into and amend sub-advisory agreements without shareholder approval.

8. MSA has entered into a sub-advisory agreement with Credit Suisse Asset Management, LLC ("CSAM"). CSAM is part of the asset management business of Credit Suisse Group AG, a worldwide bank and financial services provider.

9. The Replacement Fund is registered as an open-end management investment company and is a series of the Series Fund (File Number 811-07261). It offers its shares only to variable annuity and variable life insurance contracts offered by the separate accounts of certain insurance companies, to certain tax-qualified pension and retirement plans and other investment companies.

10. The Replacement Fund has entered into an investment advisory agreement with CSAM under which CSAM acts as investment adviser for the Replaced Fund's portfolio of investments. CSAM does not have the authority to retain sub-advisers to manage all or a portion of the Replacement Fund's assets without obtaining shareholder approval. CSAM voluntarily waives fees and reimburse expenses so that the Replacement Fund's annual operating expenses will not exceed 1.05% of average daily net assets.

11. The Replacement Fund is neither an affiliate nor a second-tier affiliate of the Company or the Accounts. However, for purposes of Section 2(a)(3) of the 1940 Act, after the substitution the Replacement Fund may be deemed an affiliate of the Company and the Accounts, if the Accounts own 5% or more of the shares of the Replacement Fund. CSAM is currently a second-tier affiliate of the Accounts by virtue of its role as investment sub-adviser to the Replaced Fund.

12. The Substitution Applicants state that the Funds' investment objectives, principal investment strategies and risks are substantially the same. A comparison of the investing objectives, strategies and risks of the Replaced Fund and the Replacement Fund is included in the application.

13. The following table compares the fees and expenses of the Replaced Fund and the Replacement Fund as of the year ended December 31, 2012:

FOOTNOTE 2 Includes fees and expenses incurred indirectly by the Replaced Fund as a result of its investments in investment companies and other pooled investment vehicles as well as the expenses of investing in the NMSF Subsidiary (referred to as "Acquired Fund Fees and Expenses"). END FOOTNOTE

..........................The replaced fund........ The replacement fund

..........................(percent)................ (percent)

Management Fee............0.80......................0.50

Distribution and Service..None......................0.25

(12b-1) Fee

Other Expenses............0.16......................0.59

Acquired Fund Fees and....0.07......................N/A

Expenses

Total Annual Operating....(1M)(2M) 1.03............ (1M)(3M) 1.34

Expenses

Expense Reimbursement and (0.08)....................N/A

Fee Waiver

Total Annual Operating....(1M)(4M) 0.95............ (1M) 1.34

Expenses After Expense

Reimbursement and Waiver

14. The Substitution Applicants state that the reason for the proposed substitution is in response to a recent rule amendment adopted by the CFTC that eliminated the Replaced Fund's ability to rely on the exclusion provided by CFTC Rule 4.5 to avoid regulation as a commodity pool unless it were to substantially curtail its use of futures, options, swaps and other financial instruments now regulated by the CFTC, which would prevent it from pursuing its principal investment strategies. MSA has informed the Replaced Fund's Board of Directors that in light of the consequences of these new regulatory requirements, it has determined to discontinue its services as investment adviser to the Replaced Fund and that the Replaced Fund be terminated. Given these circumstances, the Replaced Fund's Board of Directors, at a meeting of the Board held on February 21, 2013, decided to terminate the Replaced Fund and liquidate its assets as soon as is reasonably practicable.

--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" or "Act") and an order of exemption pursuant to Section 17(b) of the Act from Section 17(a) of the Act.

Citation: "78 FR 53175"

Document Number: "Investment Company Act Release No. 30671; File No. 812-14128"

Federal Register Page Number: "53175"

"Notices"

Copyright:  (c) 2013 Federal Information & News Dispatch, Inc.
Wordcount:  1511

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