19150 Federal Register / Vol. 76, No. 66 / Wednesday, April 6, 2011 / Notices 

been developed to accommodate this 

statutory deadline. In the interest of 

expedition, in light of the 120-day 

decision schedule, the Commission may 

request the Postal Service or other 

participants to submit information or 

memoranda of law on any appropriate 

issue. As required by the Commission 

rules, if any motions are filed, responses 

are due 7 days after any such motion is 

filed. See 39 CFR 3001.21. 

It is ordered: 

1. The Postal Service shall file the 

administrative record regarding this 

appeal no later than April 12, 2011. 

2. Any responsive pleading by the 

Postal Service to this Notice is due no 

later than April 12, 2011. 

3. The procedural schedule listed 

below is hereby adopted. 

4. Pursuant to 39 U.S.C. 505, 

Cassandra L. Hicks is designated officer 

of the Commission (Public 

Representative) to represent the 

interests of the general public. 

5. The Secretary shall arrange for 

publication of this Notice and Order in 

the Federal Register. 

PROCEDURAL SCHEDULE

March 28, 2011 ................................................... Filing of Appeal. 

April 12, 2011 ...................................................... Deadline for the Postal Service to file the administrative record in this appeal. 

April 12, 2011 ...................................................... Deadline for the Postal Service to file any responsive pleading. 

April 25, 2011 ...................................................... Deadline for notices to intervene (see 39 CFR 3001.111(b)). 

May 2, 2011 ........................................................ Deadline for Petitioner’s Form 61 or initial brief in support of petition (see 39 CFR 3001.115(a) 

and (b)). 

May 23, 2011 ...................................................... Deadline for answering brief in support of Postal Service (see 39 CFR 3001.115(c)). 

June 7, 2011 ....................................................... Deadline for reply briefs in response to answering briefs (see 39 CFR 3001.115(d)). 

June 14, 2011 ..................................................... Deadline for motions by any party requesting oral argument; the Commission will schedule 

oral argument only when it is a necessary addition to the written filings (see 39 CFR 

3001.116). 

July 26, 2011 ....................................................... Expiration of the Commission’s 120-day decisional schedule (see 39 U.S.C. 404(d)(5)). 

By the Commission. 

Shoshana M. Grove, 

Secretary. 

[FR Doc. 2011–8102 Filed 4–5–11; 8:45 am] 

BILLING CODE 7710–FW–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. IC–29621; File No. 812–13841] 

Jackson National Life Insurance 

Company, et al. 

March 31, 2011. 

AGENCY: The Securities and Exchange 

Commission (‘‘Commission’’) 

ACTION: Notice of application for an 

order under Section 6(c) of the 

Investment Company Act of 1940 (the 

‘‘Act’’) granting exemptions from the 

provisions of Sections 2(a)(32), 22(c) 

and 27(i)(2)(A) of the Act and Rule 22c– 

1 thereunder to permit the recapture of 

contract enhancement endorsement 

credits applied to purchase payments 

made under certain deferred variable 

annuity contracts. 

APPLICANTS: Jackson National Life 

Insurance Company (‘‘Jackson’’), Jackson 

National Separate Account—I (the ‘‘JNL 

Separate Account’’), Jackson National 

Life Insurance Company of New York 

(‘‘JNLNY’’) and collectively with 

Jackson, the ‘‘Insurance Companies,’’ 

and individually as made appropriate 

by the context, an ‘‘Insurance 

Company’’), JNLNY Separate Account I 

(the ‘‘JNLNY Separate Account,’’ 

collectively with the JNL Separate 

Account, the ‘‘Separate Accounts,’’ and 

individually as made appropriate by the 

context, a ‘‘Separate Account’’) and 

Jackson National Life Distributors LLC 

(‘‘Distributor,’’ and collectively with the 

Insurance Companies and the Separate 

Accounts, ‘‘Applicants’’). 

SUMMARY OF APPLICATION: Applicants 

seek an order under Section 6(c) of the 

Act to exempt certain transactions from 

the provisions of Sections 2(a)(32), 

22(c), and 27(i)(2)(A) of the Act and 

Rule 22c–1 thereunder, to the extent 

necessary to permit the recapture, under 

specified circumstances, of certain 

credits under the 6% Contract 

Enhancements Endorsement (the ‘‘6% 

Contract Enhancement’’) when those 

credits have been applied to purchase 

payments made (a) Under the deferred 

variable annuity contracts more 

particularly described in this notice that 

Jackson has issued through the JNL 

Separate Account (the ‘‘Perspective 

Contracts’’); (b) under other contracts 

that Jackson has issued through the JNL 

Separate Account (the ‘‘JNL Contracts’’); 

(c) under the contracts that JNLNY has 

issued through the JNLNY Separate 

Account (the ‘‘JNLNY Contracts’’); (d) 

under the Perspective Contracts as they 

may be subsequently updated; and (e) 

under other contracts that the Insurance 

Companies may issue in the future with 

the 6% Contract Enhancement (‘‘Future 

Contracts,’’ and together with the other 

contracts referred to in this paragraph, 

the ‘‘Contracts’’), either through their 

existing separate accounts or future 

separate accounts (‘‘Other Accounts’’). 

Applicants also request that the order 

being sought extend to any other 

Financial Industry Regulatory Authority 

(‘‘FINRA’’) member broker-dealer 

controlling or controlled by, or under 

common control with, Jackson, whether 

existing or created in the future, that 

serves as distributor or principal 

underwriter for the Contracts 

(‘‘Affiliated Broker-Dealers’’) and any 

successors in interest to the Applicants. 

FILING DATE: The application was filed 

on November 8, 2010, and amended on 

March 29, 2011. 

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 22, 2011, 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 issues 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 Jackson National Life 

Insurance Company, 1 Corporate Way, 

Lansing, Michigan 48951, Attn: Frank J. 

Julian, Esq. 

FOR FURTHER INFORMATION CONTACT: 

Ellen J. Sazzman, Senior Counsel, at 

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Federal Register / Vol. 76, No. 66 / Wednesday, April 6, 2011 / Notices 19151 

(202) 551–6762, or Harry Eisenstein, 

Senior Special Counsel, at (202) 551– 

6795, Office of Insurance Products, 

Division of Investment Management. 

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 an applicant using the 

Company name box at http:// 

www.sec.gov/search/search.htm or by 

calling (202) 551–8090. 

Applicants’ Representations 

1. Jackson is a stock life insurance 

company organized under the laws of 

the state of Michigan. Jackson is 

admitted to conduct life insurance and 

annuity business in the District of 

Columbia and all states except New 

York. Jackson is ultimately a wholly 

owned subsidiary of Prudential plc 

(London, England). 

2. JNLNY is a stock life insurance 

company organized under the laws of 

the state of New York. JNLNY is 

admitted to conduct life insurance and 

annuity business in Delaware, 

Michigan, and New York. JNLNY is 

ultimately a wholly-owned subsidiary of 

Prudential plc (London, England). 

3. The JNL Separate Account was 

established by Jackson pursuant to the 

provisions of Michigan law and the 

authority granted under a resolution of 

Jackson’s Board of Directors. The JNLNY 

Separate Account was established by 

JNLNY pursuant to the provisions of 

New York law and the authority granted 

under a resolution of JNLNY’s Board of 

Directors. Jackson and JNLNY are the 

depositors of their respective Separate 

Accounts. Each of the Separate 

Accounts meets the definition of a 

‘‘separate account’’ under the federal 

securities laws and each is registered 

with the Commission as a unit 

investment trust under the Act (File 

Nos. 811–8664 and 811–8401, 

respectively). JNL Separate Account and 

JNLNY Separate Account will fund, 

respectively, the variable benefits 

available under the JNL Contracts and 

the JNLNY Contracts. 

4. The assets of each Separate 

Account legally belong to the Insurance 

Company of which it is a segregated 

asset account and the obligations under 

the Contracts are obligations of that 

Insurance Company. However the 

Contract assets in the Separate Accounts 

are not chargeable with liabilities 

arising out of any other business the 

Insurance Companies may conduct. All 

of the income, gains, and losses 

resulting from these assets are credited 

to or charged against the Contracts and 

not against any other contracts the 

Insurance Companies may issue. The 

registration statements relating to the 

offering of the Perspective Contracts 

were filed under the Securities Act of 

1933 (the ‘‘1933 Act’’) (File No. 333– 

70472 (‘‘Perspective II Contracts’’) and 

File No. 333–119656 (‘‘Perspective L 

Contracts’’)). 

5. The Distributor is a wholly owned 

subsidiary of Jackson and serves as the 

distributor of the Contracts. The 

Distributor is registered with the 

Commission as a broker-dealer under 

the Securities Exchange Act of 1934 (the 

‘‘1934 Act’’) and is a member of FINRA. 

The Distributor enters into selling group 

agreements with affiliated and 

unaffiliated broker-dealers. The 

Contracts are sold by licensed insurance 

agents, where the Contracts may be 

lawfully sold, who are registered 

representatives of broker-dealers that are 

registered under the 1934 Act and are 

members of FINRA. 

6. The Perspective Contracts 

(Perspective II Contracts and 

Perspective L Contracts) are the only 

Contracts that will rely immediately on 

the relief requested. However, 

Applicants represent that the JNL 

Contracts, the JNLNY Contracts, the 

Perspective Contracts as they may be 

subsequently updated, and the Future 

Contracts (the ‘‘Contracts’’) are or will be 

substantially similar in all material 

respects to the Perspective Contracts. 

7. The Perspective Contracts require a 

minimum initial premium payment of 

$5,000 or $10,000 under most 

circumstances depending on the 

contract ($2,000 for a qualified plan 

contract). Subsequent payments may be 

made at any time during the 

accumulation phase. Each subsequent 

payment must be at least $500 ($50 

under an automatic payment plan). 

Prior approval of the Insurance 

Company is required for aggregate 

premium payments of over $1,000,000. 

8. The Perspective Contracts permit 

owners to accumulate contract values 

on a fixed basis through allocations to 

one of six fixed accounts (the ‘‘Fixed 

Accounts’’). Fixed Account allocation 

and transfer restrictions initially will be 

imposed in connection with the subject 

6% Contract Enhancement during the 

first seven contract years. In addition, if 

the optional Jackson Select Guaranteed 

Minimum Withdrawal Benefit 

(‘‘GMWB’’) or the optional Jackson 

Select with Joint Option Guaranteed 

Minimum Withdrawal Benefit 

(‘‘GMWB’’) is elected in the JNL 

Contracts, automatic transfers of an 

owner’s contract value may be allocated 

to a fixed account designated for these 

guaranteed minimum withdrawal 

benefits (‘‘GMWB Fixed Account’’). 

9. The Perspective Contracts also 

permit owners to accumulate contract 

values on a variable basis, through 

allocations to one or more of the subaccounts, also referred to as investment 

divisions, of the Separate Accounts (the 

‘‘Investment Divisions,’’ collectively 

with the Fixed Account and the GMWB 

Fixed Account, the ‘‘Allocation 

Options’’). Under the Perspective 

Contracts, ninety-nine Investment 

Divisions currently are expected to be 

offered but additional Investment 

Divisions may be offered in the future 

and some could be eliminated or 

combined with other Investment 

Divisions in the future. Similarly, future 

Perspective Contracts may offer 

additional or different Investment 

Divisions. Each Investment Division 

will invest in shares of a corresponding 

series (‘‘Series’’) of JNL Series Trust 

(‘‘Trust’’) or JNL Variable Fund LLC 

(‘‘Fund’’) (collectively the ‘‘Trust and 

Fund’’). The Trust and Fund are openend management investment companies 

registered under the Act and their 

shares are registered under the 1933 

Act. 

10. Transfers among the Investment 

Divisions are permitted. Certain 

transfers to, from and among the Fixed 

Account Options are also permitted 

during the Perspective Contracts’ 

accumulation phase, but are subject to 

certain adjustments and limitations. 

11. If the owner dies during the 

accumulation phase of the Perspective 

Contracts, the beneficiary named by the 

owner is paid a death benefit by the 

Insurance Company. The Perspective 

Contracts’ base death benefit, which 

applies unless an optional death benefit 

has been elected, is a payment to the 

beneficiary of the greater of: (i) Contract 

value on the date the Insurance 

Company receives proof of death and 

completed claim forms from the 

beneficiary or (ii) the total premiums 

paid under the Perspective Contract 

minus any prior withdrawals (including 

any withdrawal charges, recapture 

charges or other charges or adjustments 

applicable to such withdrawals). 

12. The owner may be offered 

optional death benefit endorsements 

that can change the death benefit paid 

to the beneficiary. The optional death 

benefit endorsements, in general, 

provide that withdrawals (including any 

withdrawal charges, recapture charges 

and other charges or adjustments to 

such withdrawal) will reduce the 

benefit base that determines the amount 

of the death benefit. The Perspective 

Contracts may also offer various GMWB 

optional endorsements. 

13. The Perspective Contracts offer 

fixed and variable versions of the 

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19152 Federal Register / Vol. 76, No. 66 / Wednesday, April 6, 2011 / Notices 

following four types of annuity payment 

or ‘‘income payment’’: life income, joint 

and survivor, life annuity with at least 

120 or 240 monthly payments 

guaranteed to be paid (although not 

guaranteed as to amount if variable), 

and income for a specified period of 5 

to 30 years. The Insurance Companies 

may also offer other income payment 

options. 

14. Perspective Contracts currently 

offer contract enhancement 

endorsements (‘‘Contract 

Enhancement(s)’’), all of which are 

optional although Future Contracts may 

have Contract Enhancements which are 

not optional. The Contract 

Enhancements provide for Jackson to 

add from its general account assets an 

additional amount to the owner’s 

contract value upon receipt of the initial 

premium payment, and for each 

subsequent premium payment received 

within the first seven contract years 

(five for the 2% Contract Enhancement). 

The Contract Enhancements that may be 

elected at issue currently vary in 

amount between 2% and 5%. The 

Contract Enhancement percentages that 

are credited in each case also vary, 

depending upon the applicable 

percentage and contract year in which 

the premium payment is received. The 

Contract Enhancements offered under 

the Perspective Contracts may vary 

depending upon the design of the 

contract, the date of issue of a contract 

or the distribution channel. The 6% 

Contract Enhancement would not be 

available if the 20% Additional Free 

Withdrawal endorsement is elected and 

vice versa. Also if a Contract 

Enhancement is elected, allocations and 

transfers to the Fixed Account Options 

currently will be restricted, as fully 

described in the prospectus. The 

restrictions apply during the first seven 

contract years (five contract years for the 

2% Contract Enhancement). These 

restrictions will also apply to the 6% 

Contract Enhancement. 

15. Following is the table for the 

existing 5% Contract Enhancement that 

shows the variation in the percentages 

based upon the year of receipt of the 

applicable premium payment. This table 

shows how existing 5% Contract 

Enhancements are structured and how 

the 6% Contract Enhancement will be 

structured. 

5% CONTRACT ENHANCEMENT

[In percent] 

Contract year premium is received 

0–1 1–2 2–3 3–4 4–5 5–6 6–7 7+ 

Contract Enhancement Percentage of the Premium 

Payment ....................................................................... 5.00 4.50 3.75 3.00 2.25 1.75 1.00 0 

16. Applicants are proposing to add a 

6% Contract Enhancement to the 

Perspective Contracts that is modeled 

on the above 5% structure, as follows: 

6% CONTRACT ENHANCEMENT

[In percent] 

Contract year premium is received 

0–1 1–2 2–3 3–4 4–5 5–6 6–7 7+ 

Contract Enhancement Percentage of the Premium 

Payment ....................................................................... 6.00 5.50 4.75 4.00 3.25 2.50 1.25 0 

17. Jackson will allocate the 6% 

Contract Enhancement to the Fixed 

Accounts and/or Investment Divisions 

in the same proportion as the premium 

payment allocation. The 6% Contract 

Enhancement is available only to 

owners 87 years old and younger. There 

is an asset-based charge for the 6% 

Contract Enhancement. The asset-based 

charges for the 6% Contract 

Enhancement applies only for the first 

seven contract years, as opposed to 

seven years from the date of the 

premium payment, and is 0.832%, 

based on the average daily net asset 

value of the allocations to the 

Investment Divisions. A charge equal to 

the asset-based charge will also be 

assessed against any amounts contract 

owners have allocated to the Fixed 

Accounts, through a reduction in the 

annual credited rate of interest resulting 

in a lower annual credited interest rate 

that would apply to the Fixed Account 

if the Contract Enhancement had not 

been elected. 

18. Jackson will recapture all or a 

declining portion of the 6% Contract 

Enhancement by imposing a recapture 

charge whenever an owner: (i) Makes a 

total withdrawal within the recapture 

charge period up to seven years after a 

premium payment, or a partial 

withdrawal of corresponding premiums 

within the recapture charge period in 

excess of those permitted under the 

Perspective Contracts’ free withdrawal 

provisions, unless the withdrawal is 

made for certain health-related 

emergencies specified in the Perspective 

Contracts; (ii) elects to receive payments 

under an income payment option within 

the recapture charge period; or (iii) 

returns the Perspective Contract during 

the free-look period. 

19. The amount of the 6% Contract 

Enhancement recapture charge varies 

depending on the corresponding 

declining amount of the Contract 

Enhancement based on the contract year 

when the premium payment being 

withdrawn was received and when the 

charge is imposed based on the 

Completed Years since the receipt of the 

related premium, as follows: 

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Federal Register / Vol. 76, No. 66 / Wednesday, April 6, 2011 / Notices 19153 

6% CONTRACT ENHANCEMENT RECAPTURE CHARGE

[In percent] 

Completed years since 

receipt of premium 

Contract year premium is received 

0–1 1–2 2–3 3–4 4–5 5–6 6–7 7+ 

0–1 ................................... 5.00 4.75 4.00 3.75 2.50 2.00 0.75 0.00 

1–2 ................................... 4.75 4.25 3.60 3.00 2.25 1.25 0.00 0.00 

2–3 ................................... 4.00 3.75 3.00 2.25 1.25 0.00 0.00 0.00 

3–4 ................................... 3.75 3.00 2.25 1.25 0.00 0.00 0.00 0.00 

4–5 ................................... 3.00 2.00 1.25 0.00 0.00 0.00 0.00 0.00 

5–6 ................................... 2.25 1.25 0.00 0.00 0.00 0.00 0.00 0.00 

6–7 ................................... 1.25 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

7+ ..................................... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

20. A ‘‘Completed Year’’ is the 

succeeding twelve months from the date 

on which the Insurance Companies 

receive a premium payment. Completed 

Years specifies the years from the date 

of receipt of the premium and does not 

refer to contract years. If the premium 

receipt date is on the issue date of the 

Contract, then Completed Year 0–1 does 

not include the first contract 

anniversary. The first contract 

anniversary begins Completed Year 1–2 

and each successive Completed Year 

begins with the contract anniversary of 

the preceding contract year and ends the 

day before the next contract 

anniversary. If the premium receipt date 

is other than the issue date or a 

subsequent contract anniversary, there 

is no correlation of the contract 

anniversary date and Completed Years. 

For example, if the issue date is January 

15, 2010 and a premium payment is 

received on February 28, 2010 then, 

although the first contract anniversary is 

January 15, 2011, the end of Completed 

Year 0–1 for that premium payment 

would be February 27, 2011, and 

February 28, 2011 begins Completed 

Year 1–2. The first contract year 

(contract year 0–1) starts on the issue 

date and extends to, but does not 

include, the first contract anniversary. 

Subsequent contract years start on an 

anniversary date and extend to, but do 

not include, the next anniversary date. 

21. The recapture charge percentage 

will be applied to the corresponding 

premium reflected in the amount 

withdrawn or the amount applied to 

income payments that remain subject to 

a recapture charge. Earnings are 

withdrawn first without charge and the 

oldest purchase payments are 

withdrawn first. The amount recaptured 

will be taken from the Investment 

Divisions and the Fixed Account in the 

proportion their respective values bear 

to the contract value. The dollar amount 

recaptured will never exceed the dollar 

amount of the 6% Contract 

Enhancement added to the Perspective 

Contract. Recapture charges will be 

applied upon electing to commence 

income payments, even in a situation 

where the withdrawal charge is waived. 

22. Jackson does not assess the 

recapture charge on any payments paid 

out as: Death benefits; withdrawals of 

earnings; withdrawals taken under the 

free withdrawal provision, which allows 

for free withdrawals (where a 

withdrawal is taken that exceeds the 

free withdrawal amount, the recapture 

charge is imposed only on the excess 

amount above the free withdrawal 

amount); withdrawals necessary to 

satisfy the required minimum 

distribution of the Internal Revenue 

Code (if the withdrawal requested 

exceeds the required minimum 

distribution, the recapture charge will 

not be waived on the required minimum 

distribution); if permitted by the 

owner’s state, withdrawals of up to 

$250,000 from the JNL Separate 

Account, the Fixed Account or the 

GMWB Fixed Account in connection 

with the owner’s terminal illness or if 

the owner needs extended hospital or 

nursing home care as provided in the 

Perspective Contract; or if permitted by 

the owner’s state, withdrawals of up to 

25% (12.5% for each of two joint 

owners) of contract value from the JNL 

Separate Account, the Fixed Account or 

the GMWB Fixed Account in 

connection with certain serious medical 

conditions specified in the Perspective 

Contract. 

23. The contract value will reflect any 

gains or losses attributable to the 6% 

Contract Enhancement described above. 

The 6% Contract Enhancement and any 

gains or losses attributable to the 6% 

Contract Enhancement will be 

considered earnings under the 

Perspective Contracts for tax purposes 

and for purposes of calculating the free 

withdrawal amounts and the Earnings 

Protection Benefit. 

24. The Perspective Contracts have a 

‘‘free-look’’ period of ten days after the 

owner receives the Perspective Contract 

(or any longer period required by state 

law). Contract value (or premiums paid, 

as may be required by state law), less 

the full amount of any Contract 

Enhancement(s) is returned upon 

exercise of free look rights by an owner. 

Therefore, 100% of the 6% Contract 

Enhancement will be recaptured under 

all circumstances if an owner returns 

the Perspective Contract during the freelook period, but any gain or loss on 

investments of the 6% Contract 

Enhancement would be retained by the 

owner. The dollar amount recaptured 

will never exceed the dollar amount of 

the 6% Contract Enhancement added to 

the Perspective Contract. A withdrawal 

charge will not be assessed upon 

exercise of free look rights. 

25. In addition to the 6% Contract 

Enhancement charge and 6% Contract 

Enhancement recapture charge, the 

Perspective Contracts may have a 

mortality and expense risk charge, an 

administration charge, a contract 

maintenance charge, a charge for the 

Earnings Protection Benefit, an optional 

GMWB charge, a fee for the five-year 

withdrawal charge period, an optional 

death benefit charge, a transfer fee for 

transfers in excess of 15 in a contract 

year, a commutation fee that applies 

only upon withdrawals from income 

payments for a fixed period, and a 

withdrawal charge that applies to total 

withdrawals, partial withdrawals in 

excess of amounts permitted to be 

withdrawn under the Perspective 

Contract’s free withdrawal provision 

and on the income date (the date 

income payments commence) if the 

income date is within a year of the date 

the Perspective Contract was issued. 

26. The withdrawal charges shown in 

the table below apply to Perspective II 

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19154 Federal Register / Vol. 76, No. 66 / Wednesday, April 6, 2011 / Notices 

Contracts with and without the five-year 

withdrawal charge option and the 

Perspective L Contracts. The amount of 

the withdrawal charge depends upon 

when the charge is imposed based on 

the Completed Years since the receipt of 

the related premium, as follows: 

Withdrawal Charge (as a percentage of premium payments).

Completed Years Since Receipt of Premium ........................................................... 0–1 1–2 2–3 3–4 4–5 5–6 6–7 7+ 

Withdrawal Charge (Base Withdrawal Charge Schedule for Offerings Under File No. 

333–70472) (Perspective II) ......................................................................................... 8.5% 7.5% 6.5% 5.5% 5% 4% 2% 0% 

Withdrawal Charge if Five-Year Period is elected (Optional Five-Year Withdrawal 

Charge Schedule for Offerings Under File No. 333–70472) (Perspective II) .............. 8% 7% 6% 4% 2% 0% 0% 0% 

Withdrawal Charge (Base Withdrawal Charge Schedule for Offerings Under File No. 

333–119656) (Perspective L Series) ........................................................................... 8% 7.5% 6.5% 5.5% 0% 0% 0% 0% 

27. Jackson does not assess the 

withdrawal charge on any payments 

paid out as: Death benefits; election to 

begin income payments after the first 

contract year under JNL Contracts; 

cancellation of the Contract upon 

exercise of free look rights by an owner; 

withdrawals of earnings; withdrawals 

taken under the free withdrawal 

provision, which allows for free 

withdrawals up to 10% of remaining 

premium, less earnings (where a 

withdrawal is taken that exceeds the 

free withdrawal amount, the withdrawal 

charge is imposed only on the excess 

amount above the free withdrawal 

amount); withdrawals necessary to 

satisfy the required minimum 

distribution of the Internal Revenue 

Code (if the withdrawal requested 

exceeds the required minimum 

distribution, the withdrawal charge will 

not be waived on the required minimum 

distribution); if permitted by the 

owner’s state, withdrawals of up to 

$250,000 from the Investment Divisions, 

Fixed Account or GMWB Fixed Account 

available under the Perspective 

Contracts in connection with the 

terminal illness of the owner of a 

Contract, or in connection with 

extended hospital or nursing home care 

for the owner (this withdrawal charge 

waiver is not available under JNLNY 

Contracts); and if permitted by the 

owner’s state, withdrawals of up to 25% 

(12.5% each for two joint owners) of 

contract value from the Investment 

Divisions, Fixed Account or GMWB 

Fixed Account available under the 

Perspective Contracts in connection 

with certain serious medical conditions 

specified in the Contract. 

Applicants’ Legal Analysis 

1. Applicants state that Section 6(c) of 

the Act authorizes the Commission to 

exempt any person, security or 

transaction, or any class or classes of 

persons, securities or transactions from 

the provisions of the Act and the rules 

promulgated 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. Applicants request that the 

Commission, pursuant to Section 6(c) of 

the Act, grant the exemptions requested 

below with respect to the Contracts and 

any Future Contracts funded by the 

Separate Accounts or Other Accounts 

that are issued by the Insurance 

Companies and underwritten or 

distributed by the Distributor or 

Affiliated Broker-Dealers. Applicants 

undertake that the Contracts will be 

substantially similar in all material 

respects to the Perspective Contracts 

described in the Application. 

Applicants believe that the requested 

exemptions are 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. 

2. Applicants state that Section 27 of 

the Act regulates and imposes certain 

restrictions on the sales of periodic 

payment plan certificates issued by any 

registered investment company. 

Subsection (i) of Section 27 of the Act 

provides that Section 27 does not apply 

to any registered separate account 

funding variable insurance contracts, or 

to the sponsoring insurance company 

and principal underwriter of such 

account, except as provided in 

paragraph (2) of the subsection. 

Paragraph (2) provides that it shall be 

unlawful for such a separate account or 

sponsoring insurance company to sell a 

contract funded by the registered 

separate account unless such contract is 

a redeemable security. Section 2(a)(32) 

defines ‘‘redeemable security’’ as any 

security, other than short-term paper, 

under the terms of which the holder, 

upon presentation to the issuer, is 

entitled to receive approximately his 

proportionate share of the issuer’s 

current net assets, or the cash equivalent 

thereof. 

3. Applicants submit that the 

recapture of the 6% Contract 

Enhancement in the circumstances set 

forth in the Application would not 

deprive an owner of his or her 

proportionate share of the issuer’s 

current net assets. A Contract owner’s 

interest in the amount of the 6% 

Contract Enhancement allocated to his 

or her contract value upon the Insurance 

Companies’ receipt of a premium 

payment is not fully vested until seven 

complete years following a premium 

payment. Until or unless the amount of 

any 6% Contract Enhancement is 

vested, the Insurance Companies retain 

the right and interest in the 6% Contract 

Enhancement amount, although not in 

the earnings attributable to that amount. 

Applicants urge that when one of the 

Insurance Companies recaptures the 6% 

Contract Enhancement, it is simply 

retrieving its own assets, and because a 

Contract owner’s interest in the Contract 

Enhancement is not vested, the Contract 

owner has not been deprived of a 

proportionate share of the Separate 

Account’s assets, i.e., a share of the 

Separate Account’s assets proportionate 

to the Contract owner’s contract value. 

4. In addition, Applicants represent 

that it would be particularly unfair to 

allow a Contract owner exercising the 

free-look privilege to retain the 6% 

Contract Enhancement amount under a 

Contract that has been returned for a 

refund after a period of only a few days. 

If the Insurance Companies could not 

recapture the Contract Enhancement, 

individuals could purchase a Contract 

with no intention of retaining it and 

simply return it for a quick profit. 

Furthermore, Applicants state that the 

recapture of the 6% Contract 

Enhancement relating to withdrawals 

and to income payments within the first 

seven contract years is designed to 

protect the Insurance Companies against 

Contract owners not holding the 

Contract for a sufficient time period. 

This recapture of the Contract 

Enhancement within the first seven 

contract years provides the Insurance 

Companies with sufficient time to 

recover the cost of the Contract 

Enhancement and to avoid the financial 

detriment that would result from a 

shorter recapture period. 

5. Applicants represent that it is not 

administratively feasible to track the 

Contract Enhancement amount in the 

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Federal Register / Vol. 76, No. 66 / Wednesday, April 6, 2011 / Notices 19155 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Exchange Act Release No. 62584 (July 28, 

2010), 75 FR 45685 (August 3, 2010). 

Separate Accounts after the 6% Contract 

Enhancement is applied. Accordingly, 

the asset-based charges applicable to the 

Separate Accounts will be assessed 

against the entire amounts held in the 

Separate Accounts, including any 6% 

Contract Enhancement amounts. As a 

result, the aggregate asset-based charges 

assessed will be higher than those that 

would be charged if the Contract 

owner’s contract value did not include 

any Contract Enhancement. 

6. Applicants submit that the 

provisions for recapture of any Contract 

Enhancement under the Contracts do 

not violate Sections 2(a)(32) and 

27(i)(2)(A) of the Act. Sections 26(e) and 

27(i) were added to the Act to 

implement the purposes of the National 

Securities Markets Improvement Act of 

1996 and Congressional intent. The 

application of a 6% Contract 

Enhancement to premium payments 

made under the Contracts should not 

raise any questions as to compliance by 

the Insurance Companies with the 

provisions of Section 27(i). However, to 

avoid any uncertainty as to full 

compliance with the Act, Applicants 

request an order granting an exemption 

from Sections 2(a)(32) and 27(i)(2)(A), to 

the extent deemed necessary, to permit 

the recapture of the 6% Contract 

Enhancement under the circumstances 

described in the Application, without 

the loss of relief from Section 27 

provided by Section 27(i). 

7. Applicants state that Section 22(c) 

of the Act authorizes the Commission to 

make rules and regulations applicable to 

registered investment companies and to 

principal underwriters of, and dealers 

in, the redeemable securities of any 

registered investment company to 

accomplish the same purposes as 

contemplated by Section 22(a). Rule 

22c–1 under the Act prohibits a 

registered investment company issuing 

any redeemable security, a person 

designated in such issuer’s prospectus 

as authorized to consummate 

transactions in any such security, and a 

principal underwriter of, or dealer in, 

such security, from selling, redeeming, 

or repurchasing any such security 

except at a price based on the current 

net asset value of such security which 

is next computed after receipt of a 

tender of such security for redemption 

or of an order to purchase or sell such 

security. 

8. Applicants state that it is possible 

that someone might view the Insurance 

Companies’ recapture of the 6% 

Contract Enhancement as resulting in 

the redemption of redeemable securities 

for a price other than one based on the 

current net asset value of the Separate 

Accounts. Applicants contend, 

however, that the recapture of the 6% 

Contract Enhancement does not violate 

Rule 22c–1. The recapture of some or all 

of the 6% Contract Enhancement does 

not involve either of the evils that 

Section 22(c) and Rule 22c–1 were 

intended to eliminate or reduce as far as 

reasonably practicable, namely: (i) The 

dilution of the value of outstanding 

redeemable securities of registered 

investment companies through their 

sale at a price below net asset value or 

repurchase at a price above it, and (ii) 

other unfair results, including 

speculative trading practices. To effect a 

recapture of a 6% Contract 

Enhancement, the Insurance Companies 

will redeem interests in a Contract 

owner’s contract value at a price 

determined on the basis of the current 

net asset value of the Separate 

Accounts. The amount recaptured will 

be less than or equal to the amount of 

the Contract Enhancement that the 

Insurance Companies paid out of their 

general account assets. Although 

Contract owners will be entitled to 

retain any investment gains attributable 

to the 6% Contract Enhancement and to 

bear any investment losses attributable 

to the 6% Contract Enhancement, the 

amount of such gains or losses will be 

determined on the basis of the current 

net asset values of the Separate 

Accounts. Thus, no dilution will occur 

upon the recapture of the Contract 

Enhancement. Applicants also submit 

that the second harm that Rule 22c–1 

was designed to address, namely, 

speculative trading practices calculated 

to take advantage of backward pricing, 

will not occur as a result of the 

recapture of the 6% Contract 

Enhancement. Because neither of the 

harms that Rule 22c–1 was meant to 

address is found in the recapture of the 

Contract Enhancement, Applicants 

assert that Rule 22c–1 should not apply 

to the 6% Contract Enhancement. 

However, to avoid any uncertainty as to 

full compliance with Rule 22c–1, 

Applicants request an order granting an 

exemption from the provisions of Rule 

22c–1 to the extent deemed necessary to 

permit them to recapture the Contract 

Enhancement under the Contracts. 

9. Applicants also submit that 

extending the requested relief to 

encompass Future Contracts and Other 

Accounts is appropriate in the public 

interest because it promotes 

competitiveness in the variable annuity 

market by eliminating the need to file 

redundant exemptive applications prior 

to introducing new variable annuity 

contracts. Applicants assert that 

investors would receive no benefit or 

additional protection by requiring 

Applicants to repeatedly seek exemptive 

relief that would present no issues 

under the Act not already addressed in 

the Application. 

10. Applicants submit, for the reasons 

stated herein, that their exemptive 

request meets the standards set out in 

Section 6(c) of the Act, namely, that the 

exemptions requested are 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 and that, 

therefore, the Commission should grant 

the requested order. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–8081 Filed 4–5–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64166; File No. SR–FINRA– 

2010–035] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Amendment No. 1 and Order Granting 

Accelerated Approval of a Proposed 

Rule Change, as Modified by 

Amendment No. 1, Relating to 

Amendments to the Discovery Guide 

and Rules 12506 and 12508 of the 

Code of Arbitration Procedure for 

Customer Disputes 

April 1, 2011. 

I. Introduction 

On July 12, 2010, the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) filed with the Securities and 

Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Exchange Act’’ or ‘‘Act’’) 1 and 

Rule 19b–4 thereunder,2 a proposed rule 

change to amend the Discovery Guide, 

which includes Document Production 

Lists, and to make conforming changes 

to Rules 12506 and 12508 of the Code 

of Arbitration Procedure for Customer 

Disputes (‘‘Customer Code’’). The 

proposed rule change was published for 

comment in the Federal Register on 

August 3, 2010.3 The Commission 

received 55 comment letters on the 

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