Allstate Assurance Company, et al.; Notice of Application
Applicants:
Summary of Application: The Applicants seek an order pursuant to Section 6(c) of the 1940 Act, exempting the Separate Account from all provisions of the 1940 Act, subject to certain conditions.
DATES: Filing Date: The application was filed on
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
ADDRESSES: Secretary,
FOR FURTHER INFORMATION CONTACT:
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.
I. Applicants' Representations
1. The Separate Account was established as a managed separate account of the Company on
2. The Separate Account has retained
3. The Separate Account is one of two investment options available under the Contracts. The other investment option under the Contracts is the Company's general account, which pays a fixed rate of interest ("Fixed Account"). As of
4. Redemptions have significantly reduced the Separate Account's assets over the past decade and are likely to continue notwithstanding any positive investment performance that may result in a net increase in the Separate Account's assets. As of
5. The public offering of the Contracts under the Securities Act of 1933 ("Securities Act") was initially registered in 1967 (File No. 2-27135). The Company discontinued the sale of new Contracts in 1984. Although the Contracts allow Contract owners to make additional contributions, the Company has not received an additional contribution under the Contracts since
II. Applicants' Legal Analysis
1. Applicants respectfully request that the Commission, pursuant to Section 6(c) of the Act, issue an Order granting an exemption from all provisions of the Act, subject to the conditions set out in Section III, below. Applicants believe, based on the grounds set out in the application, that the requested exemption meets the standards of Section 6(c) of the Act.
2. Section 6(c) of the Act authorizes the Commission to "conditionally or unconditionally exempt any person, security, or transaction, or any class or classes of persons, securities, or transactions, from the provisions of [the Act] or of any rule or regulation thereunder, if and to the extent that such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of [the Act.]"
3. Applicants believe that the requested exemption is appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Section 3(c)(1) of the Act makes clear that
FOOTNOTE 1 H.R. Rep. No. 96-1341 at 35 (1980); S. Rep. No. 96-958 at 20 (1980). ("Section 3(c)(1) was intended to exclude from the Act private companies in which there is no significant public interest and which are therefore not appropriate subjects of federal regulation.") END FOOTNOTE
4. In addition, Applicants state that Contract owners do not need the protections afforded by the Act. Applicants assert that Contract owners are adequately protected by the fact that their longstanding relationship with the Company of over 30 years is established by the terms and conditions of the Contracts, which may not be changed without Contract owner approval except where permitted or required by applicable law. The Contracts, among other things, fix the fees and charges (including management fees) associated with the Separate Account, thus distinguishing the Separate Account from mutual funds whose expenses can change periodically. The Contracts also confer upon owners the right to receive at least annually a statement (a) reflecting the investment results for the prior year, (b) listing the investments of the Separate Account as of the date of the statement, and (c) reflecting the value of the accumulation units credited to the Contracts. Moreover, after the date of the Order requested by the application, Applicants will provide Contract owners with annual audited financial statements of the Company and the Separate Account pursuant to proposed condition 5 described below. In addition, the Contracts are governed by and administered according to state insurance law, which requires that the Company maintain in the Separate Account assets with a value at least equal to the reserves and other contract liabilities with respect to the Separate Account; that the income, gains and losses, realized or unrealized, from assets allocated to the Separate Account be credited to or charged against the Separate Account, without regard to other income, gains or losses of the Company; and that assets of the Separate Account equal to the reserves and other contract liabilities with respect to the Separate Account not be charged with liabilities arising out of any other business the Company may conduct. Furthermore, the requested relief would be subject to the other conditions described in Section III, below.
5. Applicants state that there is very little Contract owner interest in the Separate Account. The last time a premium was received under a Contract was in
6. Applicants maintain that granting the requested relief would enable Applicants to avoid the difficulties of trying to efficiently manage the Separate Account in compliance with the diversification and other requirements of the Act as assets dwindle down to zero. Further, Applicants assert that granting the requested relief would enable Applicants to avoid the significant ongoing legal, accounting, and other costs of maintaining a registered investment company, which costs currently exceed the amount of revenues generated by the fees under the Contracts.
7. Applicants submit that the relief is consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the 1940 Act.
III. Conditions
--This is a summary of a
Notice of Application for an order pursuant to Section 6(c) of the Investment Company Act of 1940, as amended (the "1940 Act" or "Act"), exempting Allstate Assurance Company Separate Account B from all provisions of the Act, subject to certain conditions.
Citation: "82 FR 9083"
Document Number: "Release No. IC-32457; File No. 812-14149"
Federal Register Page Number: "9083"
"Notices"


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