Federal Register / Vol. 76, No. 2 / Tuesday, January 4, 2011 / Notices 401 

Deposit Security for the Fund through a 

transaction in which the Fund could not 

engage directly. 

6. The requested order will expire on 

the effective date of any Commission 

rule under the Act that provides relief 

permitting the operation of actively 

managed exchange-traded funds. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–33116 Filed 1–3–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. IC–29544; File No. 812–13816] 

MetLife Insurance Company of 

Connecticut, et al. 

December 28, 2010. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of application for an 

order pursuant to Section 26(c) of the 

Investment Company Act of 1940 (the 

‘‘Act’’) approving certain substitutions of 

securities and an order of exemption 

pursuant to Section 17(b) of the Act 

from Section 17(a) of the Act. 

APPLICANTS: MetLife Insurance 

Company of Connecticut (‘‘MetLife of 

CT’’), MetLife of CT Separate Account 

Eleven for Variable Annuities (‘‘Separate 

Account Eleven’’), MetLife of CT 

Separate Account QPN for Variable 

Annuities (‘‘Separate Account QPN’’), 

MetLife of CT Fund UL for Variable Life 

Insurance (‘‘Fund UL’’), MetLife of CT 

Fund UL III for Variable Life Insurance 

(‘‘Fund UL III’’), MetLife of CT Separate 

Account CPPVUL I (‘‘Separate Account 

CPPVUL 1’’), MetLife Investors 

Insurance Company (‘‘MetLife 

Investors’’), MetLife Investors Variable 

Annuity Account One (‘‘VA Account 

One’’), MetLife Investors Variable Life 

Account One (‘‘VL Account One’’), First 

MetLife Investors Insurance Company 

(‘‘First MetLife Investors’’), First MetLife 

Investors Variable Annuity Account 

One (‘‘First VA Account One’’), MetLife 

Investors USA Insurance Company 

(‘‘MetLife Investors USA’’), MetLife 

Investors USA Separate Account A 

(‘‘Separate Account A’’), Metropolitan 

Life Insurance Company (‘‘MetLife’’), 

Metropolitan Life Separate Account 

DCVL (‘‘Separate Account DCVL’’), 

Metropolitan Life Separate Account UL 

(‘‘Separate Account UL’’), Metropolitan 

Life Variable Annuity Separate Account 

II (‘‘Separate Account II’’), Security 

Equity Separate Account No. 13S (‘‘SE 

Separate Account 13S’’), Security Equity 

Separate Account No. 485 (‘‘SE Separate 

Account 485’’), General American Life 

Insurance Company (‘‘General 

American’’), General American Separate 

Account Seven (‘‘GA Separate Account 

Seven’’), General American Separate 

Account Eleven (‘‘GA Separate Account 

Eleven’’), General American Separate 

Account Thirty-Three (‘‘GA Separate 

Account Thirty-Three’’), (together with 

Separate Account Eleven, Separate 

Account QPN, Fund UL, Fund UL III, 

Separate Account CPPVUL 1, VA 

Account One, VL Account One, First 

VA Account One, Separate Account A, 

Separate Account DCVL, Separate 

Account UL, Separate Account II, SE 

Separate Account 13S, SE Separate 

Account 485, GA Separate Account 

Seven, GA Separate Account Eleven, GA 

Separate Account Thirty-Three, the 

‘‘Separate Accounts’’), Met Investors 

Series Trust (‘‘MIST’’) and Metropolitan 

Series Fund, Inc. (‘‘Met Series Fund’’) 

(together with MIST, the ‘‘Investment 

Companies’’). The Insurance Companies 

and the Separate Accounts are referred 

to as the ‘‘Substitution Applicants.’’ The 

Insurance Companies, the Separate 

Accounts and the Investment 

Companies are referred to as the 

‘‘Section 17 Applicants.’’ 

SUMMARY OF APPLICATION: Applicants 

seek an order approving the substitution 

of certain series of the Investment 

Companies for shares of series of other 

unaffiliated registered investment 

companies held by the Separate 

Accounts to fund certain group and 

individual variable annuity contracts 

and variable life insurance policies 

issued by the Insurance Companies 

(collectively, the ‘‘Contracts’’). The 

Section 17 Applicants seek an order 

pursuant to Section 17(b) of the Act to 

permit certain in-kind transactions in 

connection with certain of the 

Substitutions. 

FILING DATE: The application was filed 

on August 26, 2010, and an amended 

and restated application was filed on 

December 9, 2010 and December 27, 

2010. 

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 January 21, 

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 issue 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 Paul G. Cellupica, Chief 

Counsel—Securities Regulation and 

Corporate Services, MetLife Group, 1095 

Avenue of the Americas, 40th Floor, 

New York, NY 10036 and David C. 

Mahaffey, Esq., Sullivan & Worcester 

LLP, 1666 K Street, NW., Washington, 

DC 20006. 

FOR FURTHER INFORMATION CONTACT: 

Alison T. White, Senior Counsel, or 

Joyce M. Pickholz, Branch Chief, Office 

of Insurance Products, 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. MetLife of CT is a stock life 

insurance company organized in 1863 

under the laws of Connecticut. MetLife 

Investors is a stock life insurance 

company organized on August 17, 1981 

under the laws of Missouri. First 

MetLife Investors is a stock life 

insurance company organized on 

December 31, 1992 under the laws of 

New York. MetLife Investors USA is a 

stock life insurance company organized 

on September 13, 1960 under the laws 

of Delaware. MetLife is a stock life 

insurance company organized in 1868 

under the laws of New York. General 

American is a stock life insurance 

company organized in 1933 under the 

laws of Missouri. 

2. Separate Account Eleven, Fund UL, 

Fund UL III, VA Account One, VL 

Account One, First VA Account One, 

Separate Account A, Separate Account 

UL, Separate Account II, SE Separate 

Account 13S and GA Separate Account 

Eleven are registered under the Act as 

unit investment trusts for the purpose of 

funding the Contracts. Security interests 

under the Contracts have been 

registered under the Securities Act of 

1933. 

3. Separate Account QPN is exempt 

from registration under the Act. Security 

interests under the Contracts have been 


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registered under the Securities Act of 

1933. 

4. Separate Account CPPVUL1, 

Separate Account DCVL, Separate 

Account 485, GA Separate Account 

Seven and GA Separate Account ThirtyThree serve as separate account funding 

vehicles for certain Contracts that are 

exempt from registration under Section 

4(2) of the Securities Act of 1933 and 

Regulation D thereunder. 

5. Although Separate Account QPN, 

Separate Account CPPVUL1, Separate 

Account DCVL, Separate Account 485, 

GA Separate Account Seven and GA 

Separate Account Thirty-Three are 

exempt from registration under the Act, 

they would be subject to the investment 

limitations of Section 12 but for the 

exclusion contained in Section 

12(d)(1)(E) of the Act. To rely on such 

exclusion, an investment company that 

is not a registered investment company 

must, among other things, agree to 

refrain from substituting a security 

unless the Commission approves the 

substitution in the manner provided in 

Section 26 of the Act. 

6. MIST and Met Series Fund are each 

registered under the Act as open-end 

management investment companies of 

the series type, and their securities are 

registered under the Securities Act of 

1933. Metlife Advisers, LLC serves as 

investment adviser to MIST and Met 

Series Fund. 

7. The Contracts permit the applicable 

Insurance Company, subject to 

compliance with applicable law, to 

substitute shares of another investment 

company for shares of an investment 

company held by a sub-account of the 

Separate Accounts. The prospectuses for 

the Contracts and the Separate Accounts 

contain appropriate disclosures of this 

right. File numbers for the Contracts, the 

Separate Accounts and the Investment 

Companies are set forth in the 

application. 

8. Each Insurance Company, on its 

behalf and on behalf of the Separate 

Accounts proposes to make certain 

substitutions of shares of 11 funds (the 

‘‘Existing Funds’’) held in sub-accounts 

of its respective Separate Accounts for 

certain series (the ‘‘Replacement Funds’’) 

of MIST and Met Series Fund. 

9. The proposed substitutions are as 

follows: (a) Third Avenue Small Cap 

Value Portfolio for Delaware VIP Small 

Cap Value Series; (b) RCM Technology 

Portfolio for Janus Aspen Global 

Technology Portfolio; (c) Davis Venture 

Value Portfolio for Legg Mason 

ClearBridge Variable Capital Portfolio; 

(d) MFS Research International Portfolio 

for Legg Mason Global Currents Variable 

International All Cap Opportunity 

Portfolio; (e) Western Asset 

Management Strategic Bond 

Opportunities Portfolio for Legg Mason 

Western Asset Variable Diversified 

Strategic Income Portfolio; (f) Western 

Asset Management Strategic Bond 

Opportunities Portfolio for Legg Mason 

Western Asset Variable Strategic Bond 

Portfolio; (g) PIMCO Total Return 

Portfolio for Pioneer Bond VCT 

Portfolio; (h) Pioneer Fund Portfolio for 

Pioneer Fund VCT Portfolio; (i) Met/ 

Templeton Growth Portfolio for 

Templeton Growth Securities Fund; (j) 

Met/Templeton Growth Portfolio for 

Templeton Growth Fund, Inc.; (k) Van 

Eck Global Natural Resources Portfolio 

for Van Eck VIP Global Hard Assets 

Fund. 

10. The following is a summary of the 

investment objectives and policies of 

each Existing Fund and its 

corresponding Replacement Fund. 

Additional information including asset 

sizes, risk factors and comparative 

performance history for each Existing 

Fund and Replacement Fund can be 

found in the Application. 

Existing fund Replacement fund 

Delaware VIP Small Cap Value Series—seeks capital appreciation. 

The Series invests at least 80% of its assets in investments of small 

companies whose stock prices appear low relative to their underlying 

value or future potential. 

Third Avenue Small Cap Value Portfolio—seeks long-term capital appreciation. The Portfolio invests at least 80% of its assets in equity 

securities of well-financed small companies (meaning companies 

with high quality assets and a relative absence of liabilities) at a discount to what the subadviser believes is the intrinsic value. 

Janus Aspen Global Technology Portfolio—seeks long-term growth of 

capital. The Portfolio invests, under normal circumstances, at least 

80% of its net assets in securities of companies that the adviser believes will benefit significantly from advances or improvements in 

technology. 

RCM Technology Portfolio—seeks capital appreciation; no consideration is given to income. The Portfolio invests, under normal circumstances, at least 80% of its assets in common stocks of companies which utilize new, creative or different, or ‘‘innovative’’ technologies. 

Legg Mason ClearBridge Variable Capital Portfolio—seeks capital appreciation through investment in securities which the portfolio manager believes have above-average capital appreciation potential. Davis Venture Value Portfolio—seeks growth of capital. The Portfolio 

invests, under normal circumstances, the majority of its assets in equity securities of companies with market capitalizations of at least 

$10 billion. 

Legg Mason Global Currents Variable International All Cap Opportunity 

Portfolio—seeks total return on its assets from growth of capital and 

income. Normally, the Portfolio invests 80% of its net assets in a diversified portfolio of equity securities of foreign companies and invests substantially all of its assets outside of the United States. 

MFS Research International Portfolio—seeks capital appreciation. The 

Portfolio invests, under normal circumstances, primarily in foreign equity securities, including emerging market equity securities. 

Legg Mason Western Asset Variable Diversified Strategic Income Portfolio—seeks high current income. The Portfolio normally invests in 

fixed income securities, including related securities and instruments. 

Western Asset Management Strategic Bond Opportunities Portfolio— 

seeks to maximize total return consistent with preservation of capital. 

The Portfolio invests, under normal circumstances, at least 80% of 

its assets in three classes of bonds and other fixed-income securities. 

Legg Mason Western Asset Variable Strategic Bond Portfolio—seeks 

to maximize current income consistent with preservation of capital. 

Under normal circumstances, the Portfolio invests at least 80% of its 

assets in fixed income securities and related instruments. 

Western Asset Management Strategic Bond Opportunities Portfolio— 

seeks to maximize total return consistent with preservation of capital. 

The Portfolio invests, under normal circumstances, at least 80% of 

its assets in three classes of bonds and other fixed-income securities. 

Pioneer Bond VCT Portfolio—seeks to provide current income from an 

investment grade portfolio with due regard to preservation of capital 

and prudent investment risk. 

PIMCO Total Return Portfolio—seeks maximum total return, consistent 

with the preservation of capital and prudent investment management. 

Pioneer Fund VCT Portfolio—seeks reasonable income and capital 

growth. The Portfolio primarily invests in securities of U.S. issuers. 

Pioneer Fund Portfolio—seeks reasonable income and capital growth. 

The Portfolio normally invests substantially in equity securities, primarily of U.S. issuers. 


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Existing fund Replacement fund 

Templeton Growth Securities Fund—seeks long-term capital growth. 

The Fund normally invests in the equity securities of companies located anywhere in the world, including emerging markets. 

Met/Templeton Growth Portfolio—seeks long-term capital growth. The 

Portfolio, under normal circumstances, primarily invests in the equity 

securities of companies of various market capitalizations located 

anywhere in the world, including emerging markets. 

Templeton Growth Fund, Inc.—seeks long-term capital growth. The 

Fund, under normal circumstances, primarily invests in the equity securities and companies of various market capitalizations located anywhere in the world, including emerging markets. 

Met/Templeton Growth Portfolio—seeks long-term capital growth. The 

Portfolio, under normal circumstances, primarily invests in the equity 

securities of companies of various market capitalizations located 

anywhere in the world, including emerging markets. 

Van Eck VIP Global Hard Assets Fund—seeks long-term capital appreciation by investing primarily in hard-asset securities. Income is a 

secondary consideration. 

Van Eck Global Natural Resources Portfolio—seeks long-term capital 

appreciation with income as a secondary consideration. Under normal market conditions, the Portfolio invests at least 80% of its net 

assets in securities of natural resource companies and in instruments that derive their value from natural resources. 

11. The management fees, 12b–1 fees 

(if applicable), other expenses and total 

operating expenses for each Existing 

(‘‘Old Fund’’) and Replacement Fund 

(‘‘New Fund’’) are as follows: 

Management 

fees 

(%) 

12b–1 fees 

(%) 

Other 

expenses 

(%) 

Waiver/ 

Reimbursemt 

(%) 

Total 

expenses 

(%) 

New Fund: Third Avenue Small Cap Portfolio—Class A .... .74 ........................ .04 ........................ .78 

Old Fund: Delaware VIP Small Cap Value Series—Standard Class .......................................................................... .74 ........................ .11 ........................ .85 

New Fund: Third Avenue Small Cap Portfolio—Class B .... .74 .25 .04 ........................ 1.03 

Old Fund: Delaware VIP Small Cap Value Series—Service 

Class ................................................................................. .74 .30 .11 .05 1.10 

New Fund: RCM Technology Portfolio—Class B ................ .88 .25 .08 ........................ 1.21 

Old Fund: Janus Aspen Global Technology Portfolio— 

Service Class ................................................................... .64 .25 .33 ........................ 1.22 

New Fund: Davis Venture Value Portfolio—Class B ........... .71 .25 (.50) .03 .05 .94 

Old Fund: Legg Mason ClearBridge Variable Capital Portfolio ................................................................................... .75 .25 .14 .14 1.00 

New Fund: MFS Research International Portfolio—Class B .71 .25 (.50) .10 ........................ 1.06 

Old Fund: Legg Mason Global Currents Variable International All Cap Opportunity Portfolio .............................. .85 ........................ .25 ........................ 1.10 

New Fund: Western Asset Management Strategic Bond 

Opportunities Portfolio—Class B ...................................... .62 .25 (.50) .07 .04 .90 

Old Fund: Legg Mason Western Asset Variable Diversified 

Strategic Income Portfolio ................................................ .65 ........................ .30 ........................ .95 

New Fund: Western Asset Management Strategic Bond 

Opportunities Portfolio—Class B ...................................... .62 .25 (.50) .07 .04 .90 

Old Fund: Legg Mason Western Asset Variable Strategic 

Bond Portfolio—Class I .................................................... 65 ........................ .31 ........................ .96 

New Fund: PIMCO Total Return Portfolio—Class B ........... .48 .25 (.50) .04 ........................ .77 

Old Fund: Pioneer Bond VCT Portfolio—Class II ............... .50 .25 .26 .14 .87 

New Fund: Pioneer Fund Portfolio—Class B ...................... .66 .25 (.50) .08 ........................ .99 

Old Fund: Pioneer Fund VCT Portfolio—Class II ................ .65 .25 .09 ........................ .99 

New Fund: Met/Templeton Growth Portfolio—Class A ....... .69 ........................ .18 .07 .80 

Old Fund: Templeton Growth Securities Fund—Class 1 .... .75 ........................ .04 ........................ .79 

New Fund: Met/Templeton Growth Portfolio—Class B ....... .69 .25 (.50) .18 .07 1.05 

Old Fund: Templeton Growth Securities Fund—Class 2 .... .75 .25 .04 ........................ 1.04 

New Fund: Met/Templeton Growth Portfolio—Class E ....... .69 .15 (.25) .18 .07 .95 

Old Fund: Templeton Growth Fund—Class A ..................... .59 .25 .28 ........................ 1.12 

New Fund: Van Eck Global Natural Resources Portfolio— 

Class A ............................................................................. .79 ........................ .08 ........................ .87 

Old Fund: Van Eck VIP Global Hard Assets Fund—Initial 

Class ................................................................................. .96 ........................ .15 ........................ 1.11 

12. MetLife Advisers, LLC is the 

adviser of each of the Replacement 

Funds. Each Replacement Fund 

currently offers up to four classes of 

shares, three of which, Class A, Class B 

and Class E are involved in the 

substitutions. 

13. The Applicants believe the 

substitutions will provide significant 

benefits to Contract owners, including 

improved selection of sub-advisers and 

simplification of fund offerings through 

the elimination of overlapping offerings. 

14. As a result of the substitutions, the 

number of investment options offered 

under substantially all of the Contracts 

will not change (currently ranges in 

number from 12 to 121). For the limited 

number of Contracts that will 

experience a reduction in the number of 

available investment options, no 

contract will ever be reduced by more 

than 2 investment options after the 

substitutions. 

15. Those substitutions which replace 

investment options advised by 

investment advisers that are not 


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affiliated with the Substitution 

Applicants with funds for which 

MetLife Advisers, LLC acts as 

investment adviser will permit each 

adviser, under the Multi-Manager Order, 

[IC–22824 (1997) and IC–23859 (1999)], 

to hire, monitor and replace subadvisers as necessary to achieve optimal 

performance. 

16. Contract owners with sub-account 

balances invested (through the separate 

account) in shares of the Replacement 

Funds, except for the Templeton 

Growth Securities Fund/Met/Templeton 

Growth Portfolio substitution, will have 

the same or lower total expense ratios 

taking into account fund expenses and 

current fee waivers. 

17. In the following substitutions, the 

management fee and/or applicable Rule 

12b-1 fee of the Replacement Fund are 

either currently higher, or, at certain 

management fee breakpoints, may be 

higher than those of the respective 

Existing Fund: Delaware VIP Small Cap 

Value Series/Third Avenue Small Cap 

Value Portfolio; Janus Aspen Global 

Technology Portfolio/RCM Technology 

Portfolio; Legg Mason Global Currents 

Variable International All Cap 

Opportunity Portfolio/MFS Research 

International Portfolio; Legg Mason 

Western Asset Variable Diversified 

Strategic Income Portfolio/Western 

Asset Management Strategic Bond 

Opportunities Portfolio; Legg Mason 

Western Asset Variable Strategic Bond 

Portfolio/Western Asset Management 

Strategic Bond Opportunities Portfolio; 

Pioneer Fund VCT Portfolio/Pioneer 

Fund Portfolio; Templeton Growth 

Fund, Inc./Met/Templeton Growth 

Portfolio; and Templeton Growth 

Securities Fund/Met/Templeton Growth 

Portfolio. 

18. The Substitution Applicants 

propose to limit Contract charges 

attributable to Contract value invested 

in the Replacement Funds following the 

proposed substitutions to a rate that 

would offset the difference in the 

expense ratio between each Existing 

Fund’s net expense ratio and the net 

expense ratio for the respective 

Replacement Fund. 

19. Except for the Templeton Growth 

Securities Fund/Met/Templeton Growth 

Portfolio substitution where there is an 

increase in net expenses after waivers of 

0.01% and the Pioneer Fund VCT 

Portfolio/Pioneer Fund Portfolio where 

there is no increase or decrease in net 

expense ratios, after waivers, the 

substitutions will result in decreased 

net expense ratios, after waivers, 

ranging from 1 basis point to 24 basis 

points. Moreover, there will be no 

increase in Contract fees and expenses, 

including mortality and expense risk 

fees and administration and distribution 

fees charged to the Separate Accounts as 

a result of the substitutions. 

20. The Substitution Applicants 

believe that the Replacement Funds 

have investment objectives, policies and 

risk profiles, as described in their 

prospectuses, that are substantially the 

same as, or sufficiently similar to, the 

corresponding Existing Funds to make 

those Replacement Funds appropriate 

candidates as substitutes. 

21. In addition, after the substitutions, 

neither MetLife Advisers, LLC nor any 

of their affiliates will receive 

compensation from the charges to the 

Separate Accounts related to the 

Contracts or from Rule 12b-1 fees or 

revenue sharing from the Replacement 

Funds in excess of the compensation 

currently received from the investment 

advisers or distributors of the Existing 

Funds. 

22. The share classes of the 

Replacement Funds are either identical 

to or less than the share classes of the 

Existing Funds with respect to the 

imposition of Rule 12b-1 fees currently 

imposed, except with respect to the 

substitution of MFS Research 

International Portfolio (Class B shares— 

0.25%) for Legg Mason Global Currents 

Variable International All Cap 

Opportunity Portfolio (single share 

class—0%); Western Asset Management 

Strategic Bond Opportunities Portfolio 

(Class B shares—0.25%) for Legg Mason 

Western Asset Variable Diversified 

Strategic Income Portfolio (single share 

class—0%); Western Asset Management 

Strategic Bond Opportunities Portfolio 

(Class B shares—0.25%) for Legg Mason 

Western Asset Variable Strategic Bond 

Portfolio (Class I—0%). 

23. Each MIST and Met Series Fund 

Replacement Fund’s Class B shares Rule 

12b-1 fees can be raised to 0.50%, each 

MIST Replacement Fund’s Class E 

shares Rule 12b-1 fees can be raised to 

0.25% and each Met Series Fund 

Replacement Fund’s Class E shares Rule 

12b-1 fees can be raised to 0.50% of net 

assets by the Replacement Fund’s Board 

of Directors/Trustees without 

shareholder approval. However, Met 

Series Fund and MIST represent that 

Rule 12b-1 fees of the Class B and Class 

E shares of the Replacement Funds 

issued in connection with the proposed 

substitutions will not be raised above 

the current rate without approval of a 

majority in interest of the respective 

Replacement Funds’ shareholders after 

the substitutions. 

24. The distributors of the Existing 

Funds pay to the Insurance Companies, 

or their affiliates, any 12b-1 fees 

associated with the class of shares sold 

to the Separate Accounts. Similarly, the 

distributors for MIST and Met Series 

Fund will receive from the applicable 

class of shares held by the Separate 

Accounts Rule 12b-1 fees in the same 

amount or a lesser amount than the 

amount paid by the Existing Funds, 

except as described above. 

25. Further, in addition to any Rule 

12b-1 fees, the investment advisers or 

distributors of the Existing Funds pay 

the Insurance Companies or one of their 

affiliates from 0 to 50 basis points for 

the Existing Funds’ classes of shares 

involved in the substitutions. Following 

the substitutions, these payments will 

not be made on behalf of the 

Replacement Funds. Rather, the 

Insurance Companies or their affiliates 

will have available both the 25 and 15 

basis points in Rule 12b-1 fees from the 

Replacement Funds (with respect to 

Class B and Class E shares, respectively) 

and, as owners of the Replacement 

Funds’ adviser, profit distributions from 

the adviser. These profits from 

investment advisory fees may be more 

or less than the fees being paid by the 

Existing Funds. 

Applicants’ Legal Analysis and 

Conditions 

1. The Substitution Applicants 

request that the Commission issue an 

order pursuant to Section 26(c) of the 

Act approving the proposed 

substitutions. 

2. Applicants represent that the 

Contracts permit the applicable 

Insurance Company, subject to 

compliance with applicable law, to 

substitute shares of another investment 

company for shares of an investment 

company held by a sub-account of the 

Separate Accounts. The prospectuses for 

the Contracts and the Separate Accounts 

contain appropriate disclosure of this 

right. 

3. By a supplement to the 

prospectuses for the Contracts and the 

Separate Accounts, each Insurance 

Company has notified all owners of the 

Contracts of its intention to take the 

necessary actions, including seeking the 

order requested by this Application, to 

substitute shares of the funds as 

described herein. The supplement has 

advised Contract owners that from the 

date of the supplement until the date of 

the proposed substitution, owners are 

permitted to make one transfer of 

Contract value (or annuity unit 

exchange) out of the Existing Fund subaccount to one or more other subaccounts without the transfer (or 

exchange) being treated as one of a 

limited number of permitted transfers 

(or exchanges) or a limited number of 

transfers (or exchanges) permitted 

without a transfer charge. The 


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supplement also has informed Contract 

owners that the Insurance Company will 

not exercise any rights reserved under 

any Contract to impose additional 

restrictions on transfers until at least 30 

days after the proposed substitutions. 

The supplement has also advised 

Contract owners that for at least 30 days 

following the proposed substitutions, 

the Insurance Companies will permit 

Contract owners affected by the 

substitutions to make one transfer of 

Contract value (or annuity unit 

exchange) out of the Replacement Fund 

sub-account to one or more other subaccounts without the transfer (or 

exchange) being treated as one of a 

limited number of permitted transfers 

(or exchanges) or a limited number of 

transfers (or exchanges) permitted 

without a transfer charge. 

4. The proposed substitutions will 

take place at relative net asset value 

with no change in the amount of any 

Contract owner’s Contract value, cash 

value, or death benefit or in the dollar 

value of his or her investment in the 

Separate Accounts. 

5. The process for accomplishing the 

transfer of assets from each Existing 

Fund to its corresponding Replacement 

Fund will be determined on a case-bycase basis. In most cases, it is expected 

that the substitutions will be effected by 

redeeming shares of an Existing Fund 

for cash and using the cash to purchase 

shares of the Replacement Fund. In 

certain other cases, it is expected that 

the substitutions will be effected by 

redeeming the shares of an Existing 

Fund in-kind; those assets will then be 

contributed in-kind to the 

corresponding Replacement Fund to 

purchase shares of that Fund. All inkind redemptions from an Existing 

Fund of which any of the Substitution 

Applicants is an affiliated person will 

be effected in accordance with the 

conditions set forth in the Commission’s 

no-action letter issued to Signature 

Financial Group, Inc. (available 

December 28, 1999). 

6. Contract owners will not incur any 

fees or charges as a result of the 

proposed substitutions, nor will their 

rights or an Insurance Company’s 

obligations under the Contracts be 

altered in any way. All expenses 

incurred in connection with the 

proposed substitutions, including 

brokerage, legal, accounting, and other 

fees and expenses, will be paid by the 

Insurance Companies. In addition, the 

proposed substitutions will not impose 

any tax liability on Contract owners. 

The proposed substitutions will not 

cause the Contract fees and charges 

currently being paid by existing 

Contract owners to be greater after the 

proposed substitutions than before the 

proposed substitutions. No fees will be 

charged on the transfers made at the 

time of the proposed substitutions, 

because the proposed substitutions will 

not be treated as a transfer for the 

purpose of assessing transfer charges or 

for determining the number of 

remaining permissible transfers in a 

Contract year. 

7. In addition to the prospectus 

supplements distributed to owners of 

Contracts, within five business days 

after the proposed substitutions are 

completed, Contract owners will be sent 

a written notice informing them that the 

substitutions were carried out and that 

they may make one transfer of all 

Contract value or cash value under a 

Contract invested in any one of the subaccounts on the date of the notice to one 

or more other sub-accounts available 

under their Contract at no cost and 

without regard to the usual limit on the 

frequency of transfers among subaccounts or from the variable account 

options to the fixed account options. 

The notice will also reiterate that (other 

than with respect to ‘‘market timing’’ 

activity) the Insurance Company will 

not exercise any rights reserved by it 

under the Contracts to impose 

additional restrictions on transfers or to 

impose any charges on transfers until at 

least 30 days after the proposed 

substitutions. The Insurance Companies 

will also send each Contract owner 

current prospectuses for the 

Replacement Funds involved to the 

extent that they have not previously 

received a copy. 

8. Each Insurance Company also is 

seeking approval of the proposed 

substitutions from any State insurance 

regulators whose approval may be 

necessary or appropriate. 

9. The Substitution Applicants agree 

that for those who were Contract owners 

on the date of the proposed 

substitutions, the Insurance Companies 

will reimburse, on the last business day 

of each fiscal period (not to exceed a 

fiscal quarter) during the twenty-four 

months following the date of the 

proposed substitutions, those Contract 

owners whose sub-account invests in 

the Replacement Fund such that the 

sum of the Replacement Fund’s net 

operating expenses (taking into account 

fee waivers and expense 

reimbursements) and sub-account 

expenses (asset-based fees and charges 

deducted on a daily basis from subaccount assets and reflected in the 

calculation of sub-account unit values) 

for such period will not exceed, on an 

annualized basis, the sum of the 

Existing Fund’s net operating expenses 

taking into account fee waivers and 

expense reimbursements and subaccount expenses for fiscal year 2009, 

except with respect to the Delaware VIP 

Small Cap Value Series/Third Avenue 

Small Cap Value Portfolio, Janus Aspen 

Global Technology Portfolio/RCM 

Technology Portfolio, Legg Mason 

Global Currents Variable International 

All Cap Opportunity Portfolio/MFS 

Research International Portfolio, Legg 

Mason Western Asset Variable 

Diversified Strategic Income Portfolio/ 

Western Asset Management Strategic 

Bond Opportunities Portfolio, Legg 

Mason Western Asset Variable Strategic 

Bond Portfolio/Western Asset 

Management Strategic Bond 

Opportunities Portfolio, Pioneer Fund 

VCT Portfolio/Pioneer Fund Portfolio, 

Templeton Growth Fund, Inc./Met/ 

Templeton Growth Portfolio, and 

Templeton Growth Securities Fund/ 

Met/Templeton Growth Portfolio 

substitutions. 

10. With respect to the Delaware VIP 

Small Cap Value Series/Third Avenue 

Small Cap Value Portfolio, Janus Aspen 

Global Technology Portfolio/RCM 

Technology Portfolio, Legg Mason 

Global Currents Variable International 

All Cap Opportunity Portfolio/MFS 

Research International Portfolio, Legg 

Mason Western Asset Variable 

Diversified Strategic Income Portfolio/ 

Western Asset Management Strategic 

Bond Opportunities Portfolio, Legg 

Mason Western Asset Variable Strategic 

Bond Portfolio/Western Asset 

Management Strategic Bond 

Opportunities Portfolio, Pioneer Fund 

VCT Portfolio/Pioneer Fund Portfolio 

substitutions, Templeton Growth Fund, 

Inc./Met/Templeton Growth Portfolio, 

and Templeton Growth Securities Fund/ 

Met/Templeton Growth Portfolio 

substitutions, the reimbursement 

agreement with respect to the 

Replacement Fund’s operating expenses 

and sub-account expenses, will extend 

for the life of each Contract outstanding 

on the date of the proposed 

substitutions. 

11. The Substitution Applicants 

further agree that, except with respect to 

the Delaware VIP Small Cap Value 

Series/Third Avenue Small Cap Value 

Portfolio, Janus Aspen Global 

Technology Portfolio/RCM Technology 

Portfolio, Legg Mason Global Currents 

Variable International All Cap 

Opportunity Portfolio/MFS Research 

International Portfolio, Legg Mason 

Western Asset Variable Diversified 

Strategic Income Portfolio/Western 

Asset Management Strategic Bond 

Opportunities Portfolio, Legg Mason 

Western Asset Variable Strategic Bond 

Portfolio/Western Asset Management 

Strategic Bond Opportunities Portfolio, 


jlentini on DSKJ8SOYB1PROD with NOTICES
406 Federal Register / Vol. 76, No. 2 / Tuesday, January 4, 2011 / Notices 

Pioneer Fund VCT Portfolio/Pioneer 

Fund Portfolio, Templeton Growth 

Fund, Inc./Met/Templeton Growth 

Portfolio and Templeton Growth 

Securities Fund/Met/Templeton Growth 

Portfolio substitutions, the Insurance 

Companies will not increase total 

separate account charges (net of any 

reimbursements or waivers) for any 

existing owner of the Contracts on the 

date of the substitutions for a period of 

two years from the date of the 

substitutions. 

12. With respect to the Delaware VIP 

Small Cap Value Series/Third Avenue 

Small Cap Value Portfolio, Janus Aspen 

Global Technology Portfolio/RCM 

Technology Portfolio, Legg Mason 

Global Currents Variable International 

All Cap Opportunity Portfolio/MFS 

Research International Portfolio, Legg 

Mason Western Asset Variable 

Diversified Strategic Income Portfolio/ 

Western Asset Management Strategic 

Bond Opportunities Portfolio, Legg 

Mason Western Asset Variable Strategic 

Bond Portfolio/Western Asset 

Management Strategic Bond 

Opportunities Portfolio, Pioneer Fund 

VCT Portfolio/Pioneer Fund Portfolio, 

Templeton Growth Fund, Inc./Met/ 

Templeton Growth Portfolio, and 

Templeton Growth Securities Fund/ 

Met/Templeton Growth Portfolio 

substitutions, the agreement not to 

increase the separate account charges 

will extend for the life of each Contract 

outstanding on the date of the proposed 

substitutions. 

13. In each case, the applicable 

Insurance Companies believe that it is 

in the best interests of the Contract 

owners to substitute the Replacement 

Fund for the Existing Fund. The 

Insurance Companies believe that in 

cases where the Replacement Fund has 

a new sub-adviser, the new sub-adviser 

will, over the long term, be positioned 

to provide at least comparable 

performance to that of the Existing 

Fund’s sub-adviser. 

14. The Substitution Applicants 

anticipate that Contract owners will be 

better off with the array of sub-accounts 

offered after the proposed substitutions 

than they have been with the array of 

sub-accounts offered prior to the 

substitutions. 

15. The Substitution Applicants 

submit that none of the proposed 

substitutions is of the type that Section 

26(c) was designed to prevent. 

16. The Substitution Applicants 

request an order of the Commission 

pursuant to Section 26(c) of the Act 

approving the proposed substitutions by 

the Insurance Companies. 

17. The Section 17 Applicants request 

an order under Section 17(b) exempting 

them from the provisions of Section 

17(a) to the extent necessary to permit 

the Insurance Companies to carry out 

each of the proposed substitutions. 

18. Section 17(a)(1) of the Act, in 

relevant part, prohibits any affiliated 

person of a registered investment 

company, or any affiliated person of 

such person, acting as principal, from 

knowingly selling any security or other 

property to that company. Section 

17(a)(2) of the Act generally prohibits 

the persons described above, acting as 

principals, from knowingly purchasing 

any security or other property from the 

registered company. 

19. Because shares held by a separate 

account of an insurance company are 

legally owned by the insurance 

company, the Insurance Companies and 

their affiliates collectively own of record 

substantially all of the shares of MIST 

and Met Series Fund. Therefore, MIST 

and Met Series Fund and their 

respective funds are arguably under the 

control of the Insurance Companies 

notwithstanding the fact that Contract 

owners may be considered the 

beneficial owners of those shares held 

in the Separate Accounts. If MIST and 

Met Series Fund and their respective 

funds are under the control of the 

Insurance Companies, then each 

Insurance Company is an affiliated 

person or an affiliated person of an 

affiliated person of MIST and Met Series 

Fund and their respective funds. If 

MIST and Met Series Fund and their 

respective funds are under the control of 

the Insurance Companies, then MIST 

and Met Series Fund and their 

respective funds are affiliated persons of 

the Insurance Companies. 

20. Regardless of whether or not the 

Insurance Companies can be considered 

to control MIST and Met Series Fund 

and their respective funds, because the 

Insurance Companies own of record 

more than 5% of the shares of each of 

them and are under common control 

with each Replacement Fund’s 

investment adviser, the Insurance 

Companies are affiliated persons of both 

MIST and Met Series Fund and their 

respective funds. Likewise, their 

respective funds are each an affiliated 

person of the Insurance Companies. 

21. The Insurance Companies, 

through their separate accounts in the 

aggregate own more than 5% of the 

outstanding shares of the following 

Existing Funds: Janus Aspen Global 

Technology Portfolio, Legg Mason 

Clearbridge Variable Capital Portfolio, 

Legg Mason Global Currents Variable 

International All Cap Opportunity 

Portfolio, Legg Mason Western Asset 

Variable Diversified Strategic Income 

Portfolio, Legg Mason Western Asset 

Variable Strategic Bond Portfolio, 

Pioneer Bond VCT Portfolio and Pioneer 

Fund VCT Portfolio. Therefore, each 

Insurance Company is an affiliated 

person of those funds. 

22. Because the substitutions may be 

effected, in whole or in part, by means 

of in-kind redemptions and purchases, 

the substitutions may be deemed to 

involve one or more purchases or sales 

of securities or property between 

affiliated persons. The proposed 

transactions may involve a transfer of 

portfolio securities by the Existing 

Funds to the Insurance Companies; 

immediately thereafter, the Insurance 

Companies would purchase shares of 

the Replacement Funds with the 

portfolio securities received from the 

Existing Funds. Accordingly, as the 

Insurance Companies and certain of the 

Existing Funds listed above, and the 

Insurance Companies and the 

Replacement Funds, could be viewed as 

affiliated persons of one another under 

Section 2(a)(3) of the Act, it is 

conceivable that this aspect of the 

substitutions could be viewed as being 

prohibited by Section 17(a). 

23. Section 17(b) of the Act provides 

that the Commission may, upon 

application, grant an order exempting 

any transaction from the prohibitions of 

Section 17(a) if the evidence establishes 

that: (a) The terms of the proposed 

transaction, including the consideration 

to be paid or received, are reasonable 

and fair and do not involve 

overreaching on the part of any person 

concerned; (b) the proposed transaction 

is consistent with the policy of each 

registered investment company 

concerned, as recited in its registration 

statement and records filed under the 

Act; and (c) the proposed transaction is 

consistent with the general purposes of 

the Act. 

24. The Section 17 Applicants submit 

that for all the reasons stated above the 

terms of the proposed in-kind purchases 

of shares of the Replacement Funds by 

the Insurance Companies, including the 

consideration to be paid and received, 

as described in this Application, are 

reasonable and fair and do not involve 

overreaching on the part of any person 

concerned. The Section 17 Applicants 

also submit that the proposed in-kind 

purchases by the Insurance Companies 

are consistent with the policies of: (a) 

MIST and of its Third Avenue Small 

Cap Value, RCM Technology, Met/ 

Templeton Growth, MFS Research 

International, PIMCO Total Return, and 

Pioneer Fund Portfolios; and (b) Met 

Series Fund and of its Davis Venture 

Value, Western Asset Management 

Strategic Bond Opportunities and Van 

Eck Global Natural Resources Portfolios, 


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 76, No. 2 / Tuesday, January 4, 2011 / Notices 407 

as recited in the current registration 

statements and reports filed by each 

under the Act. Finally, the Section 17 

Applicants submit that the proposed 

substitutions are consistent with the 

general purposes of the Act. 

25. To the extent that the in-kind 

purchases by the Insurance Company of 

the Replacement Funds’ shares are 

deemed to involve principal 

transactions among affiliated persons, 

the procedures described below should 

be sufficient to assure that the terms of 

the proposed transactions are reasonable 

and fair to all participants. The Section 

17 Applicants maintain that the terms of 

the proposed in-kind purchase 

transactions, including the 

consideration to be paid and received by 

each fund involved, are reasonable, fair 

and do not involve overreaching 

principally because the transactions will 

conform with all but one of the 

conditions enumerated in Rule 17a–7. 

The proposed transactions will take 

place at relative net asset value in 

conformity with the requirements of 

Section 22(c) of the Act and Rule 22c– 

1 thereunder with no change in the 

amount of any Contract owner’s contract 

value or death benefit or in the dollar 

value of his or her investment in any of 

the Separate Accounts. Contract owners 

will not suffer any adverse tax 

consequences as a result of the 

substitutions. The fees and charges 

under the Contracts will not increase 

because of the substitutions. Even 

though the Separate Accounts, the 

Insurance Companies, MIST and Met 

Series Fund may not rely on Rule 17a– 

7, the Section 17 Applicants believe that 

the Rule’s conditions outline the type of 

safeguards that result in transactions 

that are fair and reasonable to registered 

investment company participants and 

preclude overreaching in connection 

with an investment company by its 

affiliated persons. In addition, as stated 

above, the in-kind redemptions will 

only be made in accordance with the 

conditions set out in the Signature 

Financial Group no-action letter 

(December 29, 1999). 

26. The boards of MIST and Met 

Series Fund have adopted procedures, 

as required by paragraph (e)(1) of Rule 

17a–7, pursuant to which the series of 

each may purchase and sell securities to 

and from their affiliates. The Section 17 

Applicants will carry out the proposed 

Insurance Company in-kind purchases 

in conformity with all of the conditions 

of Rule 17a–7 and each series’ 

procedures thereunder, except that the 

consideration paid for the securities 

being purchased or sold may not be 

entirely cash. Nevertheless, the 

circumstances surrounding the 

proposed substitutions will be such as 

to offer the same degree of protection to 

each Replacement Fund from 

overreaching that Rule 17a–7 provides 

to them generally in connection with 

their purchase and sale of securities 

under that Rule in the ordinary course 

of their business. In particular, the 

Insurance Companies (or any of their 

affiliates) cannot effect the proposed 

transactions at a price that is 

disadvantageous to any of the 

Replacement Funds. Although the 

transactions may not be entirely for 

cash, each will be effected based upon 

(1) the independent market price of the 

portfolio securities valued as specified 

in paragraph (b) of Rule 17a–7, and (2) 

the net asset value per share of each 

fund involved valued in accordance 

with the procedures disclosed in its 

respective investment company 

registration statement and as required 

by Rule 22c–1 under the Act. No 

brokerage commission, fee, or other 

remuneration will be paid to any party 

in connection with the proposed in kind 

purchase transactions. 

27. The sale of shares of Replacement 

Funds for investment securities, as 

contemplated by the proposed 

Insurance Company in-kind purchases, 

is consistent with the investment 

policies and restrictions of the 

Investment Companies and the 

Replacement Funds because (a) the 

shares are sold at their net asset value, 

and (b) the portfolio securities are of the 

type and quality that the Replacement 

Funds would each have acquired with 

the proceeds from share sales had the 

shares been sold for cash. To assure that 

the second of these conditions is met, 

MetLife Advisers, LLC and the subadviser, as applicable, will examine the 

portfolio securities being offered to each 

Replacement Fund and accept only 

those securities as consideration for 

shares that it would have acquired for 

each such fund in a cash transaction. 

28. The Section 17 Applicants submit 

that the proposed Insurance Company 

in-kind purchases are consistent with 

the general purposes of the Act as stated 

in the Findings and Declaration of 

Policy in Section 1 of the Act and that 

the proposed transactions do not 

present any of the conditions or abuses 

that the Act was designed to prevent. 

29. The Section 17 Applicants request 

that the Commission issue an order 

pursuant to Section 17(b) of the Act 

exempting the Separate Accounts, the 

Insurance Companies, MIST, Met Series 

Fund and each Replacement Fund from 

the provisions of Section 17(a) of the 

Act to the extent necessary to permit the 

Insurance Companies on behalf of the 

Separate Accounts to carry out, as part 

of the substitutions, the in-kind 

purchase of shares of the Replacement 

Funds which may be deemed to be 

prohibited by Section 17(a) of the Act. 

Conclusion 

Applicants assert that for the reasons 

summarized above that the proposed 

substitutions and related transactions 

meet the standards of Section 26(c) of 

the Act and are consistent with the 

standards of Section 17(b) of the Act 

and that the requested orders should be 

granted. 

For the Commission, by the Division of 

Investment Management pursuant to 

delegated authority. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–33117 Filed 1–3–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

Notice is hereby given, pursuant to 

the provisions of the Government in the 

Sunshine Act, Public Law 94–409, that 

the Securities and Exchange 

Commission will hold a Closed Meeting 

on Thursday, January 6, 2011 at 2:00 

p.m. 

Commissioners, Counsel to the 

Commissioners, the Secretary to the 

Commission, and recording secretaries 

will attend the Closed Meeting. Certain 

staff members who have an interest in 

the matters also may be present. 

The General Counsel of the 

Commission, or his designee, has 

certified that, in his opinion, one or 

more of the exemptions set forth in 5 

U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) 

and 17 CFR 200.402(a)(3), (5), (7), 9(ii) 

and (10), permit consideration of the 

scheduled matters at the Closed 

Meeting. 

Commissioner Aguilar, as duty 

officer, voted to consider the items 

listed for the Closed Meeting in a closed 

session. 

The subject matter of the Closed 

Meeting scheduled for Thursday, 

January 6, 2011 will be: 

Formal order of investigation; 

Institution and settlement of 

injunctive actions; 

Institution and settlement of 

administrative proceedings; 

An adjudicatory matter; and 

Other matters relating to enforcement 

proceedings. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting items. 

For further information and to 

ascertain what, if any, matters have been 


jlentini on DSKJ8SOYB1PROD with NOTICES