25954 Federal Register / Vol. 65, No. 87 / Thursday, May 4, 2000 / Notices

at (202) 219–8883. (This is not a toll-free

number.)

General Information

The attention of interested persons is

directed to the following:

(1) The fact that a transaction is the

subject of an exemption under section

408(a) of the Act and/or section

4975(c)(2) of the Code does not relieve

a fiduciary or other party in interest or

disqualified person from certain other

provisions to which the exemptions

does not apply and the general fiduciary

responsibility provisions of section 404

of the Act, which among other things

require a fiduciary to discharge his

duties respecting the plan solely in the

interest of the participants and

beneficiaries of the plan and in a

prudent fashion in accordance with

section 404(a)(1)(B) of the Act; nor does

it affect the requirement of section

401(a) of the Code that the plan must

operate for the exclusive benefit of the

employees of the employer maintaining

the plan and their beneficiaries;

(2) These exemptions are

supplemental to and not in derogation

of, any other provisions of the Act and/

or the Code, including statutory or

administrative exemptions and

transactional rules. Furthermore, the

fact that a transaction is subject to an

administrative or statutory exemption is

not dispositive of whether the

transaction is in fact a prohibited

transaction; and

(3) The availability of these

exemptions is subject to the express

condition that the material facts and

representations contained in each

application accurately describes all

material terms of the transaction which

is the subject of the exemption.

Signed at Washington, D.C., this 1st day of

May, 2000.

Ivan Strasfeld,

Director of Exemption Determination,

Pension and Welfare Benefits Administration,

U.S. Department of Labor.

[FR Doc. 00–11128 Filed 5–3–00; 8:45 am]

BILLING CODE 4510–29–P

DEPARTMENT OF LABOR

Pension and Welfare Benefits

Administration

[Application No. D–10789, et al.]

Proposed Exemptions; Fortis, Inc.

Employees’ Uniform Profit Sharing

Plan (the Fortis Plan)

AGENCY: Pension and Welfare Benefits

Administration, Labor.

ACTION: Notice of Proposed Exemptions.

SUMMARY: This document contains

notices of pendency before the

Department of Labor (the Department) of

proposed exemptions from certain of the

prohibited transaction restrictions of the

Employee Retirement Income Security

Act of 1974 (the Act) and/or the Internal

Revenue Code of 1986 (the Code).

Written Comments and Hearing

Requests

All interested persons are invited to

submit written comments or request for

a hearing on the pending exemptions,

unless otherwise stated in the Notice of

Proposed Exemption, within 45 days

from the date of publication of this

Federal Register Notice. Comments and

requests for a hearing should state: (1)

the name, address, and telephone

number of the person making the

comment or request, and (2) the nature

of the person’s interest in the exemption

and the manner in which the person

would be adversely affected by the

exemption. A request for a hearing must

also state the issues to be addressed and

include a general description of the

evidence to be presented at the hearing.

ADDRESSES: All written comments and

request for a hearing (at least three

copies) should be sent to the Pension

and Welfare Benefits Administration,

Office of Exemption Determinations,

Room N–5649, U.S. Department of

Labor, 200 Constitution Avenue, N.W.,

Washington, D.C. 20210. Attention:

Application No.l, stated in each Notice

of Proposed Exemption. The

applications for exemption and the

comments received will be available for

public inspection in the Public

Documents Room of the Pension and

Welfare Benefits Administration, U.S.

Department of Labor, Room N–5638,

200 Constitution Avenue, N.W.,

Washington, D.C. 20210.

Notice to Interested Persons

Notice of the proposed exemptions

will be provided to all interested

persons in the manner agreed upon by

the applicant and the Department

within 15 days of the date of publication

in the Federal Register. Such notice

shall include a copy of the notice of

proposed exemption as published in the

Federal Register and shall inform

interested persons of their right to

comment and to request a hearing

(where appropriate).

SUPPLEMENTARY INFORMATION: The

proposed exemptions were requested in

applications filed pursuant to section

408(a) of the Act and/or section

4975(c)(2) of the Code, and in

accordance with procedures set forth in

29 CFR Part 2570, Subpart B (55 FR

32836, 32847, August 10, 1990).

Effective December 31, 1978, section

102 of Reorganization Plan No. 4 of

1978, 5 U.S.C. App. 1 (1996), transferred

the authority of the Secretary of the

Treasury to issue exemptions of the type

requested to the Secretary of Labor.

Therefore, these notices of proposed

exemption are issued solely by the

Department.

The applications contain

representations with regard to the

proposed exemptions which are

summarized below. Interested persons

are referred to the applications on file

with the Department for a complete

statement of the facts and

representations.

Fortis, Inc. Employees’ Uniform Profit

Sharing Plan (the Fortis Plan) Located

in New York, New York

[Application Number D–10789]

Proposed Exemption

The Department is considering

granting an exemption under the

authority of section 408(a) of the Act

and section 4975 (c)(2) of the Code and

in accordance with the procedures set

forth in 29 CFR Part 2570, Subpart B (55

FR 32826, 32847, August 10, 1990). If

the exemption is granted, the

restrictions of sections 406(a), 406(b)(1)

and (2) of the Act and the sanctions

resulting from the application of section

4975 of the Code, by reason of section

4975(c)(1)(A) through (E) of the Code,

shall not apply to: (1) The restoration

payment (the Restoration Payment) by

Fortis, a party in interest with respect to

the Fortis Plan to the Fortis Plan with

respect to a certain counterfeit

certificate of deposit (the Plan CD); and

(2) the potential future payment to

Fortis of recapture payments (the

Recapture Payments) made to the Fortis

Plan pursuant to proceedings involving

the issuer of the counterfeit CD.

This exemption is subject to the

following conditions:

(A) The Restoration Payment consists

of:

(i) $501,125, an amount equal to the

Plan CD’s full face value at the time of

the Plan CD’s maturity; and

(ii) An amount in cash which is equal

to:

(a) A 5.5% annual rate of return on

the Plan CD’s maturity value of

$501,125 for the period beginning

October 30, 1997 and ending on

December 31, 1998; and

(b) A rate of return on the amount

described in (A)(ii)(a) above which is

equal to the average annual rate of

return of the Fortis Money Market Fund

from January 1, 1999 until the date of

Federal Register / Vol. 65, No. 87 / Thursday, May 4, 2000 / Notices 25955

1The applicant represents that the 5.5% annual

rate is derived from the following: (1) The average

rate of return on the John Alden Money Market

Fund for 1998 was 5.483%; and (2) the average rate

of return on the short-term funds within the John

Alden Money Market Fund for 1998 was 5.46%.

2 In this regard, the applicant states that when the

Alden Plan merged into the Fortis Plan as of the

end of December 31, 1998, the John Alden Money

Market Fund (other than the Plan CD) was

liquidated. Accordingly, the money market fund

under the Fortis Plan became available.

the Restoration Payment (i.e., the

Interest Payment);

(B) The Restoration Payment is a onetime transaction for cash;

(C) The Fortis Plan pays no expenses

with respect to the Restoration Payment;

(D) The Fortis Plan retains any

amount in excess of the Restoration

Payment that it collects in its attempts

to recover monies due under the Plan

CD; and

(E) Any Recapture Payments paid by

the Fortis Plan to Fortis are limited to

the amount of the Restoration Payment

and are restricted solely to the amounts,

if any recovered, by the Fortis Plan with

respect to the counterfeit CD in

litigation or otherwise.

Summary of Facts and Representations

1. Fortis, a diversified financial

services company providing insurance

and investment products, is a Nevada

corporation, with its principal office

located in New York, New York. Fortis

is the sponsor of the Plan which is a

profit sharing plan having

approximately 12,000 participants and

approximately $366 million in assets as

of May 11, 1999.

2. Interfinancial, Inc. (Interfinancial),

a Georgia Corporation whose function is

merely to hold the stock of subsidiary

operating companies, is a subsidiary of

Fortis. On August 31, 1998,

Interfinancial acquired the John Alden

Life Insurance Company (John Alden),

the sponsor of the John Alden Employee

Savings Incentive Plan (the Alden Plan),

a defined contribution plan.

Under the Alden Plan, participants

could direct the investment of their

accounts among various investment

options selected by the John Alden

Asset Management Company

(JAAMCO), a subisidiary of John Alden.

JAAMCO managed the investment of

the Alden Plan assets. According to the

Alden Plan’s ‘‘Policy and Procedures,’’

the Money Market Fund was to consist

of money market instruments such as

bank certificates of deposits,

commercial paper, and bonds. Portfolio

managers were permitted to purchase

CDs issued by pre-approved entities,

which included Deutsche Bank.

The Plan CD was a certificate of

deposit offered to the Alden Plan by

Charles Bradley McCoskey, a securities

broker with Tri-Star Financial, a

securities firm located in Houston,

Texas. The Plan CD was represented as

an obligation of the Deutsche Bank

Argentina, S.A. to ‘‘Robert W. Hallock/

Himmel & Grund LLC.’’ Annexed to the

Plan CD was an ‘‘Irrevocable Stock/

Bond Power bearing the signature of

‘‘Robert W. Hallock/Himmel & Grund

LLC.’’ The Plan CD had a 5.5% coupon

and a maturity date of October 30, 1997.

JAAMCO purchased, on behalf of the

John Alden Money Market Fund, the

Plan CD on January 10, 1997 for

$475,403.75 and anticipated the receipt

of $501,125 on October 30, 1997, the

Plan CD’s maturity date. At the time of

the purchase, the Plan CD comprised

approximately 0.61% percent of the

Alden Plan’s assets.

3. On May 5, 1997, the Securities

Exchange Commission (SEC) issued a

subpoena which demanded the

production of the Plan CD.

Subsequently, the SEC informed the

Alden Plan that the Plan CD was

counterfeit. The applicant represents

that John Alden, on behalf of the Alden

Plan, conducted an investigation and

retained counsel to recoup the value of

the Plan CD from the culpable parties.

The applicant further represents that

John Alden subsequently obtained a

settlement judgment (the Settlement

Judgment) against Robert W. Hallock for

the recovery of monies due the Alden

Plan under the Plan CD. The applicant

represents that, despite the Settlement

Judgment, the Alden Plan did not

recover any of the monies due the Alden

Plan under the Plan CD.

The Alden Plan and the Fortis Plan

merged on December 31, 1998. As a

result, the Plan CD was transferred from

the Alden Plan to the Fortis Plan and

the portion of each Alden Plan

participant’s account allocated to the

Plan CD was frozen. The applicant

represents that Fortis, on behalf of the

Fortis Plan, endeavored to recover the

monies due the Fortis Plan. In this

regard, the applicant represents that

currently the Fortis Plan has not been

successful in recovering any of the

monies due the Fortis Plan as a result

of the Fortis Plan’s ownership of the

Plan CD. The applicant represents,

however, that in the event that the

Fortis Plan recovers monies on the Plan

CD which are in excess of the Plan CD’s

maturity value, the Fortis Plan will

retain that excess amount. Accordingly,

Fortis and the Fortis Plan have signed

an agreement to this effect.

4. The applicant proposes the

Restoration Payment by Fortis to the

Fortis Plan with respect to the Plan CD.

The applicant proposes that the

Restoration Payment include both a

payment of the Plan CD’s maturity value

(the Maturity Value Payment) and a

payment of interest (the Interest

Payment). In this regard, the applicant

states that the Plan CD had a face value

of $501,125 as of its October 30, 1997

maturity date. As a result, the applicant

proposes that the Maturity Value

Payment equal $501,125.

The applicant proposes that the

Interest Payment consist of two

components. First, the Interest Payment

equals a 5.5% annual rate of return on

the maturity value amount for the

period beginning October 30, 1997 and

ending on December 31, 1998. 1

Thereafter, from January 1, 1999 until

the date of the Restoration Payment, the

Interest Payment will equal the rate of

return on the Fortis Money Market

Fund.2

5. In addition, the Recapture Payment

shall consist of any monies recovered

due on the Plan CD up to the

Restoration Payment amount, of which

the Fortis Plan will be required to

refund these monies to Fortis.

Specifically, the Recapture Payment

would include any amount recovered

up to the $501,125 plus the Interest

Payment.

6. The applicant represents that, in

connection with Fortis’ acquisition of

John Alden, Fortis has discontinued

John Alden’s asset management

operations. The applicant further notes

that the portfolio manager responsible

for the purchase of the Plan CD, his

supervisor, and most John Alden

employees, who might have knowledge

about the Plan CD purchase, are no

longer employed by any Fortis

company.

7. The applicant represents that the

proposed transaction is feasible since it

involves a one-time transaction for cash.

Furthermore, the applicant represents

that the proposed transaction is

protective of the rights of participants

and beneficiaries since the Restoration

Payment would ensure that the Fortis

Plan recovers the Plan CD’s full

maturity value despite the uncertainty

of any recovery from the Settlement

Judgment. Finally, the applicant

represents that the proposed transaction

is in the best interests of the Plan and

its participants and beneficiaries since

the Interest Payment enables the Fortis

Plan to receive a rate of return on the

Plan CD which is comparable to that

which it would have received if the Plan

CD had not been a counterfeit and the

rate of return the money market funds

(John Alden, 5.5% and the average

annual return on Fortis) earned during

the applicable time frames.

25956 Federal Register / Vol. 65, No. 87 / Thursday, May 4, 2000 / Notices

3For purposes of this proposed exemption,

reference to provisions of Title I of the Act, unless

otherwise specified refer also to the corresponding

provisions of the Code.

8. The applicant represents that once

the proposed transaction is

consummated, the cash proceeds from

the transaction will be allocated to the

accounts of the affected participants, in

accordance with their direction. The

applicant further represents that the

proposed transaction does not violate

the requirements set forth in section 415

of the Code.

9. In summary, the applicant

represents that the proposed transaction

satisfies the statutory criteria for an

exemption under section 408(a) and

section 4975(c)(2) of the Code because:

(A) The Restoration Payment consists

of:

(i) $501,125, an amount equal to the

Plan CD’s full face value at the time of

the Plan CD’s maturity; and

(ii) An amount in cash which is equal

to:

(a) A 5.5% annual rate of return on

the Plan CD’s maturity value of

$501,125 for the period beginning

October 30, 1997 an ending on

December 31, 1998; and

(b) A rate of return on the amount

described in (A)(ii)(a) above which is

equal to the average annual rate of

return of the Fortis Money Market Fund

from January 1, 1999 until the date of

the Restoration Payment (i.e., the

Interest Payment);

(B) The Restoration Payment is a onetime transaction for cash;

(C) The Fortis Plan pays no expenses

with respect to the Restoration Payment;

(D) The Fortis Plan retains any

amount in excess of the Restoration

Payment that it collects in its attempts

to recover monies due under the Plan

CD; and

(E) Any Recapture Payments paid by

the Fortis Plan to Fortis are limited to

the amount of the Restoration Payment

and are restricted solely to the amounts,

if any recovered, by the Fortis Plan with

respect to the counterfeit CD in

litigation or otherwise.

FOR FURTHER INFORMATION CONTACT: Mr.

J. Martin Jara, telephone (202) 219–

8881. (This is not a toll-free number).

Canada Life Assurance Company

(Canada Life) Located in Toronto,

Ontario, Canada

[Application No. D–10790]

Proposed Exemption

Based on the facts and representations

set forth in the application, the

Department is considering granting an

exemption under the authority of

section 408(a) of the Act and in

accordance with the procedures set

forth in 29 CFR Part 2570, Subpart B (55

FR 32836, 32847, August 10, 1990).3

Section I. Covered Transactions

If the exemption is granted, the

restrictions of section 406(a) of the Act

and the sanctions resulting from the

application of section 4975 of the Code,

by reason of section 4975(c)(1)(A)

through (D) of the Code, shall not apply,

effective November 4, 1999, to the (1)

receipt of common shares (the Common

Shares) of Canada Life Financial

Corporation, the holding company for

Canada Life (the Holding Company), or

(2) the receipt of cash (the Cash) or

policy credits (the Policy Credits), by or

on behalf of any eligible policyholder

(the Eligible Policyholder) of Canada

Life which is an employee benefit plan

(the Plan), subject to applicable

provisions of the Act and/or the Code,

other than a Plan established by Canada

Life or an affiliate for its own employees

(the Canada Life Plan), in exchange for

such Eligible Policyholder’s

membership interest in Canada Life, in

accordance with the terms of a

conversion proposal (the Conversion

Proposal) adopted by Canada Life and

implemented under the insurance laws

of Canada and the State of Michigan.

This proposed exemption is subject to

the conditions set forth below in Section

II.

Section II. General Conditions

(a) The Conversion Proposal was

implemented in accordance with

procedural and substantive safeguards

that were imposed under the insurance

laws of Canada and the State of

Michigan and was subject to review

and/or approval in Canada by the Office

of the Superintendent of Financial

Institutions (OSFI) and the Minister of

Finance (the Canadian Minister of

Finance) and, in the State of Michigan,

by the Commissioner of Insurance (the

Michigan Insurance Commissioner).

(b) OSFI, the Canadian Finance

Minister and the Michigan Insurance

Commissioner reviewed the terms of the

options that were provided to Eligible

Policyholders of Canada Life as part of

their separate reviews of the Conversion

Proposal. In this regard, (1) OFSI (i)

authorized the release of the Conversion

Proposal and all information to be sent

to Eligible Policyholders; (ii) oversaw

each step of the conversion process (the

Conversion); and (iii) made a final

recommendation to the Canadian

Finance Minister on the Conversion

Proposal.

(2) The Canadian Finance Minister, in

his sole discretion, could consider such

factors as (i) whether the Conversion

Proposal was fair and equitable to

Eligible Policyholders; (ii) whether the

Conversion Proposal was in the best

interests of the financial system in

Canada; and (iii) if sufficient steps had

been taken to inform Eligible

Policyholders of the Conversion

Proposal and of the special meeting on

Conversion.

(3) The Michigan Insurance

Commissioner made a determination

that the Conversion Proposal was (i) fair

and equitable to all Eligible

Policyholders and (ii) consistent with

the requirements of Michigan law.

(4) Both the Canadian Finance

Minister and the Michigan Insurance

Commissioner concurred on the terms

of the Conversion Proposal.

(c) Each Eligible Policyholder had an

opportunity to vote to approve the

Conversion Proposal after full written

disclosure was given to the Eligible

Policyholder by Canada Life.

(d) One or more independent

fiduciaries of a Plan that was an Eligible

Policyholder received Common Shares,

Cash or Policy Credits pursuant to the

terms of the Conversion Proposal and

neither Canada Life nor any of its

affiliates exercised any discretion or

provided ‘‘investment advice,’’ as that

term is defined in 29 CFR 2510.3–21(c),

with respect to such acquisition.

(e) After each Eligible Policyholder

was allocated 100 Common Shares,

additional consideration was allocated

to such Eligible Policyholder who

owned an eligible policy based on an

actuarial formula that took into account

such factors as the total cash value, the

basic annual premium and the duration

of such eligible policy. The actuarial

formula was reviewed by the Canadian

Finance Minister and the Michigan

Insurance Commissioner.

(f) All Eligible Policyholders that were

Plans participated in the transactions on

the same basis within their class

groupings as other Eligible

Policyholders that were not Plans.

(g) No Eligible Policyholder paid or

will pay any brokerage commissions or

fees to Canada Life or its affiliates in

connection with their receipt of

Common Shares, in connection with the

implementation of the secondary

offering (the Share Sale Service) or the

assisted sales program (the Assisted

Sales Program).

(h) All of Canada Life’s policyholder

obligations will remain in force and will

not be affected by the Conversion

Proposal.

Federal Register / Vol. 65, No. 87 / Thursday, May 4, 2000 / Notices 25957

4 Voting rights included the right to vote on such

matters as the review and approval of Canada Life’s

annual financial statements, the election of

directors, the appointment of Canada Life’s auditors

and the approval of certain fundamental changes,

including the Conversion.

Section III. Definitions

For purposes of this proposed

exemption:

(a) The term ‘‘Canada Life’’ means

The Canada Life Assurance Company

and any affiliate of Canada Life as

defined in paragraph (b) of this Section

III.

(b) An ‘‘affiliate’’ of Canada Life

includes —

(1) Any person directly or indirectly

through one or more intermediaries,

controlling, controlled by, or under

common control with Canada Life; (For

purposes of this paragraph, the term

‘‘control’’ means the power to exercise

a controlling influence over the

management or policies of a person

other than an individual.) or

(2) Any officer, director or partner in

such person.

(c) The term ‘‘Eligible Policyholder’’

means a policyholder who—

(i) Was the owner of a voting policy

at any time on April 2, 1998 (the

Eligibility Day);

(ii) Became the owner of a voting

policy, if the voting policy was applied

for by that person before the Eligibility

Day, and the application was received

by Canada Life on or before the close of

business on June 30, 1998; or

(iii) Was the owner of a voting policy

that lapsed before June 2, 1998 and,

where the policy terms provided that, as

of June 2, 1998, the owner was entitled

to request that the policy be reinstated,

the policy was reinstated by the person

who was the owner at the time the

policy lapsed in accordance with its

terms (without regard to when the right

to reinstate expired) during the period

which began on April 2, 1998 and

ended 90 days before the special

meeting.

(d) The term ‘‘Policy Credit’’ means —

(1) For an individual life insurance

policy with respect to which dividends

may be paid, dividend deposits when

the dividend deposit option has been

selected under the policy and, in all

other cases, dividend additions;

(2) For in individual life insurance

policy other than a policy with respect

to which dividends may be paid, an

increase in the fund value (to which no

sales or surrender or similar charges

will be applied);

(3) For an individual deferred annuity

policy with respect to which dividends

may be paid, dividend additions;

(4) For an individual deferred annuity

policy other than a policy with respect

to which dividends may be paid, an

increase in accumulation value (to

which no sales or surrender or similar

charges will be applied); and

(5) For a supplementary contract,

settlement option or annuity in

annuitization status, an increase in the

periodic annuity payment amount. If the

periodic annuity payment is on a life

basis, the increase will be on a life

annuity with cash refund basis.

EFFECTIVE DATE: If granted, this proposed

exemption will be effective as of

November 4, 1999.

Summary of Facts and Representations

1. Canada Life, Canada’s oldest

domestic life insurer, was established in

1847 and incorporated in 1849 by a

Special Act of the Canadian Parliament.

In 1962, Canada Life became a mutual

life insurance company and it remained

that way until November 4, 1999, which

is the effective date (the Effective Date)

of the Conversion transaction described

herein. Canada Life is currently

headquartered at 330 University

Avenue, Toronto, Ontario, Canada. It is

subject to the Insurance Companies Act

of Canada (ICA) as well as the regulatory

authority of OSFI. Currently, Canada

Life is rated by national ratings firms as

follows: Duff & Phelps, AA+; Moody’s

Investors Service, Aa3; Standard &

Poor’s, AA; and A.M. Best Company,

AA+. During 1998, Canada Life had

total assets under administration of

$47.4 billion and $2.7 billion in

policyholders’ equity.

Although Canada Life’s principal

place of business in the United States is

6201 Powers Ferry Road, N.W., Atlanta,

Georgia, it uses the State of Michigan as

its port of entry for its operations in the

United States. Therefore, Canada Life is

also subject to the insurance laws of the

State of Michigan and to regulation

within the United States, by the

Michigan Department of Insurance (the

Michigan Insurance Bureau).

2. Canada Life carries on its insurance

business in Canada and internationally

through branch operations in the United

States, the United Kingdom and Ireland.

In addition, Canada Life serves over 8

million people under individual and

group contracts in these areas.

Moreover, Canada Life provides life

insurance, health insurance, property

and automobile insurance, investment

management and related services

through various subsidiaries located in

Canada and worldwide. The insurance

business that Canada Life carries on

directly in Canada and through its

international branch operations

includes the sale of individual and

group life, disability, health and dental

insurance, annuities and pension

products.

3. As a mutual life insurance

company, Canada Life had no issued or

outstanding capital stock. Instead,

Canada Life’s ‘‘products’’ included

policies entitling holders to participate

in its profits (the Participating Policies)

as well as other policies that did not

generally so entitle the holders (the

Non-Participating Policies). Aside from

the contractual right to receive policy

benefits (i.e., payment under the terms

of the policy), the holders of

Participating Policies (the Participating

Policyholders) possessed certain other

rights with respect to, and interests in,

Canada Life as a mutual company,

including the right to vote at Canada

Life meetings.4 In addition,

Participating Policyholders had the right

to receive bonuses or policyholder

dividends when declared by Canada

Life’s Board of Directors and an

inchoate right to participate in

Conversion benefits (the Conversion

Benefits). Further, if Canada Life was

liquidated, the Participating

Policyholders would be entitled to share

in the insurer’s residual assets after all

claims assessed against the insurer had

been satisfied in full.

4. Canada Life’s Participating Policies

included, without limitation, policies

that qualified for tax-favored status in

the United States, such as policies

issued as tax-deferred annuities under

section 403(b) of the Code and

individual retirement annuities under

section 408(b) of the Code. In addition,

the Participating Policies covered,

without limitation, certain tax-exempt

entities in the United States such as taxqualified retirement plans within the

meaning of section 401(a) of the Code.

Participating Policyholders included

individuals, corporations, trusts and

other persons who were residents for tax

purposes in Canada, the United States,

the United Kingdom, Ireland and

elsewhere.

The Decision To Demutualize

5. On April 2, 1998, Canada Life

issued a press release stating that its

Board of Directors had requested the

insurer’s management to develop a plan

to convert Canada Life from a mutual

life insurance company to a publiclytraded stock company, whose Common

Shares are listed on the Toronto Stock

Exchange and the Montreal Stock

Exchange, through a process known as

‘‘demutualization.’’ Canada Life

believed that as a result of the flexibility

offered by the stock company structure

and the access to capital markets, it

would be in a position to enhance its

market leadership, financial strength

and strategic position. Moreover, the

25958 Federal Register / Vol. 65, No. 87 / Thursday, May 4, 2000 / Notices

5Canada Life determined that the Canada Life

Plans were not Eligible Policyholders. Therefore,

these Plans did not receive any consideration as a

result of Canada Life’s Conversion.

6Under the ICA, the Conversion Proposal must be

approved by the Eligible Policyholders, each of

whom is entitled to one vote irrespective of the

number or size of Policies held.

insurer could aggressively pursue

opportunities for growth, thereby

providing greater protection to

policyholders.

In November 1998, a bill was

introduced in the Canadian Parliament

to amend the ICA to set forth the

statutory rules allowing the

demutualization of Canadian mutual life

insurance companies with assets in

Canada of CDN $7.5 billion or more.

When the bill was introduced, the

Canadian Department of Finance

reported that each of Canada’s four large

mutual life insurance companies had

already announced its intention to

develop demutualization plans in order

to improve the efficiency and

competitiveness of their companies

through increased flexibility to access

capital, to gain greater market scrutiny

and to achieve a better understood

corporate structure. Therefore, on March

13, 1999, the Canadian Government

enacted the ICA amendments permitting

the demutualization of large Canadian

mutual life insurance companies. The

Canadian Department of Finance

subsequently released ‘‘Mutual

Company (Life Insurance) Conversion

Regulations’’ (the Conversion

Regulations) which became effective on

March 12, 1999 and implemented the

new legislation.

On November 4, 1999, Canada Life

demutualized. As a result of the

Conversion, Canada Life became a stock

insurer and a subsidiary of Canada Life

Financial Corporation, a newly-formed

holding company. The reorganization

provided economic value to Eligible

Policyholders in the form of shares of

stock of the Holding Company (i.e., the

Common Shares), Cash or Policy

Credits, in exchange for their respective

ownership rights (the Ownership

Rights) in Canada Life.

6. Therefore, Canada Life requests an

administrative exemption from the

Department that would cover the receipt

of Common Shares, Policy Credits or

Cash by Eligible Policyholders which

are trusteed and non-trusteed Plans,

other than Canada Life Plans,5 in

exchange for their mutual membership

interests in Canada Life. If granted, the

proposed exemption would be effective

as of November 4, 1999, the Effective

Date of the Conversion.

Canada Life represents that it is not a

party in interest with respect to a Plan

policyholder merely because it has

issued an insurance policy to such Plan.

However, Canada Life represents that

both it and its affiliates have provided

a variety of fiduciary and other services

to Plans which are also Canada Life

policyholders. Canada Life further

represents that the provision of such

services to Plan policyholders causes it

to be a party in interest with respect to

such Plans under section 3(14)(A) and

(B) of the Act or the related ‘‘derivative’’

provisions of this section.

The proposed exemption includes a

requirement that all Eligible

Policyholders that were Plans

participated in the transactions on the

same basis within their class groupings

as other Eligible Policyholders that were

not Plans. Thus, Canada Life did not

treat Plan policyholders any differently

from non-Plan policyholders within

their respective class groupings.

Regulatory Supervision

7. The various steps of the Conversion

were subject to the approval of Canada

Life’s Board of Directors, the OSFI, the

Canadian Finance Minister, the

Michigan Insurance Commissioner, and

other regulatory authorities in the

United Kingdom and Ireland. In

pertinent part, the Conversion

Regulations required that the conversion

of a mutual life insurance company be

implemented in accordance with a

detailed proposal that sets forth the

terms and means of effecting the

demutualization. In accordance with

this requirement, on July 8, 1999,

Canada Life’s Board of Directors

formally adopted the Conversion

Proposal which permitted Canada Life

to demutualize and convert into a stock

life insurance company pursuant to

section 237 et seq. of the ICA, the

Conversion Regulations and the terms of

such Proposal.

Also, on July 8, 1999, Canada Life

provided to OSFI, which had oversight

responsibility for the entire

demutualization process, a draft of the

Conversion Proposal for review. OSFI

reviewed and commented on the

Conversion Proposal and, on July 16,

1999, authorized the Board to vote on

the Conversion Proposal and to send

Eligible Policyholders notice of a special

meeting to consider such Proposal.

On September 16, 1999, the special

meeting of Eligible Policyholders was

held in Toronto, Ontario, Canada.

Approximately 388,000 Eligible

Policyholders were entitled to vote on

the Conversion Proposal. Of this total,

approximately 40,000 Eligible

Policyholders resided in the United

States and less than one percent of the

Eligible Policyholders were Plans. When

the vote was tallied, more than 99.1

percent of the Eligible Policyholders

who voted on the Conversion Proposal

voted to approve such Proposal.6

Following the special meeting, the

Directors of Canada Life applied to the

Canadian Finance Minister for approval

of the Conversion Proposal and issuance

of Letters Patent to effect the

Conversion.

Canadian law did not require that the

Canadian Finance Minister make any

particular findings in deciding whether

to approve the Conversion Proposal.

Therefore, approval was entirely within

the discretion of such Minister.

However, the Canadian Finance

Minister, in deciding to approve the

Conversion Proposal, could consider

such factors as (a) whether the

Conversion Proposal was fair and

equitable to policyholders; (b) whether

the Conversion Proposal was in the best

interest of the financial system in

Canada; and (c) whether sufficient steps

had been taken to inform policyholders

of the Conversion Proposal and of the

special meeting on the Conversion.

8. Because Canada Life operates in the

United States through its U.S. branch

under the Michigan State of Entry

Statute, the laws of Michigan regarding

demutualization (the Michigan

Demutualization Law) were also

applicable to Canada Life’s

demutualization. The requirements of

Michigan Demutualization Law are

similar to those of the ICA and the

Conversion Regulations. Among other

things, the Statute provides that the

Conversion Proposal be submitted to the

Michigan Insurance Commissioner prior

to a vote by Canada’s Eligible

Policyholders. In addition, the Michigan

Demutualization Law states that the

Conversion Proposal cannot become

effective without the approval of the

Michigan Insurance Commissioner

following a public hearing and it cannot

be amended without the prior approval

of such Commissioner.

The Michigan Insurance

Commissioner was authorized to retain,

and did retain, independent legal and

actuarial advisers to assist in reviewing

the Conversion Proposal. Under the

Michigan Demutualization Law, the

Michigan Insurance Commissioner

could approve or disapprove the

Conversion Proposal within 90 days

after its submission, and could not

approve it unless he found the

Conversion Proposal did not prejudice

the interests of its members, was fair

and equitable, and was not inconsistent

with the purpose and intent of the

Michigan Demutualization Law. If

Federal Register / Vol. 65, No. 87 / Thursday, May 4, 2000 / Notices 25959

7However, as noted herein, Eligible Policyholders

residing outside Canada could elect to sell their

Common Shares in an initial public offering (the

IPO) under the Share Sale Service Program which

was offered contemporaneously with the

Conversion.

8Consistent with sections 1 and 4(1)(e)(i) of the

Conversion Regulations, the Conversion Proposal

generally provides that the policyholder eligible to

participate in the distribution of Common Shares,

Cash or Policy Credits resulting from the

Conversion Proposal is the ‘‘owner’’ of any policy

shall generally be determined on the basis of the

records of Canada Life. Canada Life further

represents that an insurance or annuity policy that

provides benefits under an employee benefit plan,

typically designates the employer that sponsors the

plan, or a trustee acting on behalf of the plan, as

the owner of the policy. In regard to insurance or

annuity policies that designate the employer or

trustee as owner of the policy, Canada Life

represents that it was required under the foregoing

provisions of Canadian Law and the Conversion

Proposal to make distributions resulting from such

Plan to the employer or trustee as owner of the

policy.

In general, it is the Department’s view that, if an

insurance policy (including an annuity contract) is

purchased with assets of an employee benefit plan,

including participant contributions, and if there

exist any participants covered under the plan (as

defined at 29 CFR 2510.3–3) at the time when

Canada Life incurred the obligation to distribute

Common Shares, Cash or Policy Credits, then such

consideration would constitute an asset of such

plan. Under these circumstances, the appropriate

plan fiduciaries must take all necessary steps to

safeguard the assets of the plan in order to avoid

engaging in a violation of the fiduciary

responsibility provisions of the Act.

approved, the Conversion would take

effect as of the Effective Date specified

in the Conversion Proposal.

In accordance with Michigan law, on

or about July 26, 1999, Canada Life

mailed notice of the public hearing to

all U.S. resident Eligible Policyholders.

The Michigan Insurance Bureau also

published notice of the hearing in the

Wall Street Journal on August 5, 1999 as

well as in three newspapers that are

published in different areas of the State

of Michigan on August 7, 1999. Then,

on August 23, 1999, the Michigan

Insurance Bureau conducted a public

hearing with respect to the Conversion

Proposal. Finally, on September 3, 1999,

the Michigan Insurance Commissioner

approved the Conversion Proposal.

The Transaction

9. As noted above, the Conversion

Proposal provided for Canada Life to

demutualize and convert to a stock life

insurance company under section 237 et

seq. of the ICA, the Conversion

Regulations and the terms of the

Conversion Proposal. To this end, in

advance of the Conversion, Canada Life

incorporated the Holding Company in

Canada under the ICA as a new stock

holding company. Thus, in accordance

with section 5.03 of the Conversion

Proposal, the following transactions,

among others, occurred on November 4,

1999, the Effective Date of the

Conversion:

• Change in Business Structure. Canada

Life ceased to be a mutual life insurance

company and became a life insurance

company with Common Shares under the

ICA. The policyholders of Canada Life ceased

to have any rights with respect to or any

interest in Canada Life as a mutual life

insurance company and the Eligible

Policyholders were entitled to receive

Conversion Benefits.

• Issuance of Common Shares to the

Holding Company. Canada Life issued 160

million Common Shares to the Holding

Company.

• Issuance of Consideration to Eligible

Policyholders. The Holding Company issued

Common Shares to Eligible Policyholders

and made Cash payments to other Eligible

Policyholders. In addition, Canada Life

issued Policy Credits to Eligible

Policyholders in accordance with the

allocation and distribution rules set forth in

the Conversion Proposal.

• Sale and Cancellation of Common Share

and Preferred Share (the Preferred Share) by

the Holding Company. At the time the

Holding Company was initially capitalized, it

issued one Preferred Share and one Common

Share to Canada Life in exchange for CDN$10

million and CDN$1, respectively. However at

the time of the Conversion, the amount of

capital was repaid to Canada Life by the

Holding Company and the Preferred Share

and the Common Share were canceled.

Under Canada law, Canada Life was required

to capitalize the Holding Company with at

least CDN$10 million. Therefore, Canada Life

received the Preferred Share in exchange for

the CDN$10 million capital contribution to

help ensure that the repayment of the capital

to Canada Life at the time of the

demutualization would not be a taxable event

in Canada.

10. Following the Conversion, all

policies generally remained in force as

policies of Canada Life, and all policy

premiums, benefits, values, guarantees,

or other policy obligations remained

unchanged, except that policies credited

with Policy Credits were enhanced by

such Credits. Dividends would continue

to be declared with respect to the

Participating Policies at the discretion of

Canada Life’s Board of Directors.

Accordingly, the Conversion would not

adversely affect the contractual rights of

any Participating Policyholder whose

former ownership rights in the mutual

insurer were extinguished.

11. Most Eligible Policyholders,

including Eligible Policyholders that

were Plans covered under the

provisions of the Act, initially received

Conversion Benefits in the form of

Common Shares issued by the Holding

Company.7 Fewer than 10 percent of the

Eligible Policyholders received

Conversion Benefits in the form of Cash

or Policy Credits.

Section 8.02(a) of the Conversion

Proposal provides that Eligible

Policyholders which are not residents of

the United States, the United Kingdom,

Canada or Ireland, as well as

governments or agents thereof, would be

entitled to receive Cash distributions

from Canada Life as a result of its

Conversion. In addition, under section

8.02(b) of the Conversion Proposal,

certain individuals which are Eligible

Policyholders in the United States with

certain tax-qualified retirement

contracts would be credited with Policy

Credits. Specifically, Policy Credits

would be posted to each Eligible

Policyholder in the United States whose

Participating Policy was—

• An individual retirement annuity policy

within the meaning of section 408(b) of the

Code or a tax sheltered annuity policy within

the meaning of section 403(b) of the Code;

• An individual retirement annuity policy

that had been issued directly to the Plan

participant pursuant to a plan qualified

under section 401(a) of the Code or pursuant

to a Plan described in section 403(a) of the

Code;

• An individual life insurance policy that

had been issued directly to the plan qualified

under section 401(a) of the Code; or

Also, included within the category

entitled to receive Policy Credits were

custodial accounts under section

403(b)(7) of the Code and retirement

accounts under section 403(b)(9) of the

Code.

Further, Policy Credits were posted to

each Eligible Policyholder with respect

to whom Canada Life’s Board of

Directors determined that the receipt of

Conversion Benefits in the form of Cash

or Common Shares would be

disadvantageous for such Eligible

Policyholder, provided that such

Eligible Policyholder received

notification of such determination.

Eligible Policyholders holding certain

tax-qualified retirement contracts

ending after April 2, 1998 and before the

Conversion, received Common Shares

and could elect to sell those shares in

the IPO.8

12. The aggregate amount of

Conversion Benefits provided to Eligible

Policyholders in the Conversion and the

allocation of such Benefits among

Eligible Policyholders was determined

by an actuary employed by Canada Life.

The total amount of Conversion Benefits

received by each Eligible Policyholder

varied and took into account such

factors as the basic annual premium, the

duration and the total cash value of the

relevant Participating Policy, but

included a fixed component equal to the

value of 100 Common Shares.

Pursuant to the ICA, the Conversion

Proposal was accompanied by an

25960 Federal Register / Vol. 65, No. 87 / Thursday, May 4, 2000 / Notices

9The differences between the relative numbers of

Eligible Policyholders residing in each country and

the estimated percentages of total Conversion

Benefits to be distributed to Eligible Policyholders

who resided in each covered country were

attributed by Canada Life to the fact that Conversion

Benefits were allocated in part based on such

factors as the type, duration, face amount and cash

surrender value of an eligible policy, and not

simply on a per capita basis.

10Conversely, Canadian Eligible Policyholders

electing to receive cash could sell their Common

Shares to the Holding Company. 11Canada Life concluded that no portion of the

fees it paid to the Underwriters should be treated

for Canadian tax purposes as a dividend to

policyholders who elected to sell their Common

Shares in the IPO. As a result, Canada Life did not

believe there would be any Canadian withholding

tax due in connection with its payment of the

Underwriter fees. Canada Life also represented that

it would not seek reimbursement from U.S. Eligible

Policyholders for any Canadian withholding tax

that ultimately might be imposed with respect to its

payment of the Underwriter fees.

opinion prepared by the actuary for

Canada Life and an opinion prepared by

an independent actuary to the effect that

the allocation of benefits to Eligible

Policyholders in the Conversion was fair

and equitable to Eligible Policyholders.

The Common Shares, Cash or Policy

Credits distributed in the Conversion

had a fair market value equal to the fair

market value of the Ownership Rights

that ceased in connection with the

Conversion.

13. Approximately 57 percent of

Canada Life’s Eligible Policyholders

were Canadian residents, 9 percent were

United States residents, 20 percent were

residents of the United Kingdom and 14

percent were residents of Ireland. While

United States residents constituted

roughly 9 percent of the total number of

Eligible Policyholders, Canada Life

projected that United States citizens

would receive roughly 18 percent of the

total Common Shares and other

Conversion Benefits that were

distributed by Canada Life.9

14. In connection with the

Conversion, the Holding Company held

an IPO of Common Shares to Canadian

investors and a private placement of

Common Shares to large institutional

investors located in the United States

and elsewhere. The Common Shares

were offered at an initial share price of

CDN$17.50 per share.

The private placement involved the

sale by certain underwriters (the

Underwriters), which were unrelated to

Canada Life and its affiliates, to the

investors (the Investors) of Common

Shares the Underwriters had purchased

previously from Eligible Policyholders

who resided outside of Canada and who

had elected to sell their Common Shares

for Cash. Such purchases occurred at

the initial share price of CDN$17.50 per

share. In addition, the private placement

involved the sale by the Underwriters to

the Investors of newly-issued Common

Shares (the Primary Shares) the

Underwriters had purchased from the

Holding Company in a primary offering

(the Primary Offering).

The proceeds of the IPO were (a)

initially paid to Eligible Policyholders

who were eligible to receive a cash

payment pursuant to section 8.03(b) of

the Conversion Proposal and

contributed by the Holding Company to

Canada Life in an amount sufficient to

enable Canada Life to credit Policy

Credits; (b) then retained by the Holding

Company in an amount sufficient to

recoup the costs incurred by the

Holding Company in purchasing

Common Shares from Canadian Eligible

Policyholders who elected to sell their

Common Shares; and (c) finally retained

by the Holding Company or contributed

by the Holding Company to Canada Life

to help defray the costs of conversion or

to provide additional working capital.

The Primary Offering enabled the

Holding Company to ensure that a

proper market and price for the trading

of Common Shares would develop and

create an active trading profile for those

shares. As soon as practicable after the

IPO, the Holding Company paid cash

and Canada Life posted Policy Credits to

Eligible Policyholders who were

entitled to receive Cash or Policy

Credits in accordance with the

Conversion Proposal.

15. As stated in Representation 14,

Eligible Policyholders residing outside

Canada who were issued Common

Shares in the Conversion could elect,

prior to the demutualization, to sell all

of their Common Shares for cash to the

Underwriters immediately upon

issuance through the Share Sale Service

which was established by Canada Life

and run concurrently with the IPO.10

The Share Sale Service ended shortly

after the closing date of the

demutualization and the IPO. Such

Eligible Policyholders were referred to

as ‘‘Electing Policyholders,’’ and the

Common Shares they elected to sell

were referred to as ‘‘Electing Shares.’’

Electing Policyholders residing outside

Canada had their Electing Shares (the

Resale Shares) sold for cash to the

Underwriters who, in turn, sold them to

the Investors through the IPO procedure

described above. The Holding Company

paid all of the Underwriters’ fees

associated with the Underwriters’

purchase of the Common Shares from

Eligible Policyholders through the Share

Sales Service Program or the sale of

such Common Shares to the Investors in

the Primary Offering.11

16. As noted above, the Common

Shares that were sold in the IPO

consisted of both the Resale Shares and

the Primary Shares. For this purpose,

the Holding Company determined the

maximum number of Common Shares to

be sold to the Underwriters and in the

IPO (the IPO Shares). In the event that

the number of Electing Shares exceeded

the number of IPO shares, the shares of

Electing Policyholders were to be

repurchased by the Holding Company

(in the case of Canadian Electing

Policyholders) and sold to Underwriters

(in the case of non-Canadian Electing

Policyholders) in ascending order, from

those Common Shares held by Electing

Policyholders holding the smallest

number of Common Shares to those

holding the greatest number of Common

Shares until the total number of IPO

Shares is reached. Any Electing Shares

not sold in connection with the

Conversion and IPO were retained by

the Electing Policyholders and

confirmation of Common Share

ownership was sent to those Electing

Policyholders.

17. Canada Life represents that in

addition to the Share Sale Service, it

currently is offering the Assisted Sales

Program to Eligible Policyholders who

received Common Shares in the

demutualization and who do not have

pre-existing brokerage accounts to

which such Common Shares can be

transferred. The Assisted Sales Program

commenced on December 6, 1999 for

Canadian Eligible Policyholders and

was implemented in the United States

on January 4, 2000 for United States

Eligible Policyholders. Canada Life

anticipates that the Assisted Sales

Program will continue for up to two

years from the Effective Date although it

may be discontinued at any time.

The Assisted Sales Program is

designed to provide an Eligible

Policyholder, who has received

Common Shares in book entry or

certificated form, an opportunity to sell

such Common Shares after the

demutualization so that the

policyholder will not have to find a

stock broker. Under the Assisted Sales

Program, sales will take place in Canada

through Montreal Trust Company of

Canada (Montreal Trust), the Holding

Company’s transfer agent, and in the

United States, through EquiServe Trust

Company, N.A. of Jersey City, New

Jersey (Equi-Serve Trust), an agent of

Montreal Trust. Both Montreal Trust

and Equi-Serve Trust are not related to

Canada Life or its affiliates.

For United States Eligible

Policyholders, Equi-Serve Trust will

collect all required shareholder request

forms and provide the information to

Montreal Trust on a daily basis. A bulk

order will be placed each day by a

Federal Register / Vol. 65, No. 87 / Thursday, May 4, 2000 / Notices 25961

12Because a United States Eligible Policyholder

will receive the average price paid for the Common

Shares on the date of the sale, Canada Life

represents that the price may not correspond

exactly to the price quoted in the newspaper or

elsewhere. Therefore, within 7 business days of the

receipt of an Eligible Policyholder’s properly

completed documents (i.e., the sales request form,

taxpayer identification number and certification

form, and the share ownership statement or share

certificate), Equi-Serve Trust will mail the United

States Eligible Policyholder a check in U.S. dollars,

made out in the names of all owners. In addition,

the Eligible Policyholder will receive a statement

showing the amount of the check, the average price

paid for the Common Shares in Canadian dollars

converted to U.S. dollars, the administration charge

deducted and any applicable withholding tax. The

amount of Canadian dollars will be converted to

U.S. dollars at the wholesale Interbank rate in effect

at the time of the sale.

Canadian broker, as per Montreal

Trust’s instructions, to sell the Common

Shares on The Toronto Stock Exchange.

The Common Shares will be sold at the

average price paid for such shares on

the date of the sale.12 Although the

United States Eligible Policyholder will

be required to pay a one-time

administration fee of $25 to Equi-Serve

Trust, such Eligible Policyholder will

not be charged any brokerage

commissions or other fees.

18. Under the ICA, Canada Life is

required to maintain two separate

accounts—a Participating Policyholder

Account and a Shareholder Account.

The Participating Policyholder Account

must have sufficient capital to provide

reasonable assurance that the

contractual obligations and the

reasonable expectations of the

Participating Policyholders will be

satisfied and to provide capital for

ongoing sales of Participating Policies.

The Shareholder Account entitles

Canada Life’s shareholders to receive

dividends. The ICA also limits the

transfer of funds to the Shareholder

Account from the Participating

Policyholder Account.

For individual Participating Policies

that pay experience-based policy

dividends, Canada Life has established

a Closed Block, as defined in the

Conversion Proposal, for the purpose of

giving reasonable assurances to the

holders of such Participating Policies

that, after the Effective Date, assets will

be available to meet contractual

obligations with respect to such

Participating Policies and to meet the

reasonable expectations of the holders

of such Participating Policies regarding

future dividends, as experience justifies.

The establishment of the Closed Block

will not alter, diminish, reduce or in

any way modify or amend the terms or

provisions of the Participating Policies

included therein.

For policyholder dividend purposes

only, Canada Life is operating the

Closed Block as a closed block of

participating business for the benefit of

Participating Policies included therein.

A block of assets in Canada Life’s

Participating Account has been

allocated to the Closed Block subaccount. Assets allocated to the Closed

Block will continue to be assets owned

by Canada Life in its general account,

subject to the same liabilities (in the

same priority) to which other assets in

its general account are subject.

As of the Effective Date, Canada Life

cannot make any transfers from the

Closed Block, except as is necessary to

pay the guaranteed benefits and

experience dividends in respect of the

Participating Policies for which the

Closed Block is being maintained.

Although under certain circumstances,

the Closed Block may be terminated,

Canada Life must ensure that assets that

are allocated to the Closed Block be

used to provide for guaranteed benefits,

policyholders’ reasonable dividend

expectations, and expenses and taxes

relating to Participating Policies for

which such account is being

maintained.

Under the ICA, Participating

Policyholders have rights upon

completion of the Conversion that are

accorded to participating policyholders

of a stock life insurance company in

Canada. Such rights include the right to

elect at least one-third of the directors

of Canada and the right to receive policy

dividends that are declared.

18. In summary, it is represented that

the transactions satisfied or will satisfy

the statutory criteria for an exemption

under section 408(a) of the Act because:

(a) The Conversion Proposal was

implemented pursuant to stringent

procedural and substantive safeguards

imposed under Canadian and Michigan

law, will not require any ongoing

supervision by the Department.

(b) One or more independent Plan

fiduciaries had an opportunity to

determine whether to vote to approve

the Conversion Proposal and will be

responsible for all such decisions that

were permitted under the Conversion

regarding the form of consideration to

be received in return for Ownership

Rights.

(c) Eligible Policyholders that were

Plans were permitted to acquire

Common Shares, Cash, or Policy Credits

in exchange for, and in extinguishment

of, their Ownership Rights in Canada

Life and no Eligible Policyholder has

paid or will pay any brokerage

commissions or fees to Canada Life or

its affiliates in connection with the

receipt of Common Shares, the

implementation of the Share Sale

Service or the Assisted Sales Program.

(d) Neither Canada Life nor its

affiliates exercised discretion with

respect to voting on the Conversion

Proposal or with respect to any election

to be made by any Eligible Policyholder

which was a Plan, nor did they provide

‘‘investment advice’’ as that term is

defined in 29 CFR 2510.3–21(c) with

respect to any election made by such

Plan policyholder.

(e) The Conversion Proposal will not

change premiums or reduce policy

benefits, values, guarantees or other

policy obligations of Canada Life to its

policyholders.

FOR FURTHER INFORMATION CONTACT: Ms.

Jan D. Broady of the Department,

telephone (202) 219–8881. (This is not

a toll-free number.)

General Information

The attention of interested persons is

directed to the following:

(1) The fact that a transaction is the

subject of an exemption under section

408(a) of the Act and/or section

4975(c)(2) of the Code does not relieve

a fiduciary or other party in interest or

disqualified person from certain other

provisions of the Act and/or the Code,

including any prohibited transaction

provisions to which the exemption does

not apply and the general fiduciary

responsibility provisions of section 404

of the Act, which, among other things,

require a fiduciary to discharge his

duties respecting the plan solely in the

interest of the participants and

beneficiaries of the plan and in a

prudent fashion in accordance with

section 404(a)(1)(b) of the Act; nor does

it affect the requirement of section

401(a) of the Code that the plan must

operate for the exclusive benefit of the

employees of the employer maintaining

the plan and their beneficiaries;

(2) Before an exemption may be

granted under section 408(a) of the Act

and/or section 4975(c)(2) of the Code,

the Department must find that the

exemption is administratively feasible,

in the interests of the plan and of its

participants and beneficiaries, and

protective of the rights of participants

and beneficiaries of the plan;

(3) The proposed exemptions, if

granted, will be supplemental to, and

not in derogation of, any other

provisions of the Act and/or the Code,

including statutory or administrative

exemptions and transitional rules.

Furthermore, the fact that a transaction

is subject to an administrative or

statutory exemption is not dispositive of

whether the transaction is in fact a

prohibited transaction; and

(4) The proposed exemptions, if

granted, will be subject to the express

condition that the material facts and

25962 Federal Register / Vol. 65, No. 87 / Thursday, May 4, 2000 / Notices

representations contained in each

application are true and complete, and

that each application accurately

describes all material terms of the

transaction which is the subject of the

exemption.

Signed at Washington, DC, this 1st day of

May, 2000.

Ivan Strasfeld,

Director of Exemption Determinations,

Pension and Welfare Benefits Administration,

Department of Labor.

[FR Doc. 00–11127 Filed 5–3–00; 8:45 am]

BILLING CODE 4510–29–P

FEDERAL MINE SAFETY AND HEALTH

REVIEW COMMISSION

Sunshine Act Meeting

TIME AND DATE: 10: a.m., Thursday, May

4, 2000.

PLACE: Room 6005, 6th Floor, 1730 K

Street, NW., Washington, DC.

STATUS: Open.

MATTERS TO BE CONSIDERED: The

Commission will consider and act upon

the following:

1. Local 2232, UMWA v. Island Creek

Coal Co., Docket No. VA 99–79–C

(Issues include whether miners were

idled by MSHA’s section 107

withdrawal order, thereby qualifying

them for compensation under section

111 of the Mine Act).

Any person attending an open

meeting who requires special

accessibility features and/or auxiliary

aids, such as sign language interpreters,

must inform the Commission in advance

of those needs. Subject to 29 CFR

§§ 2706.150(a)(3) and 2706.160(d).

CONTACT PERSON FOR MORE INFO: Jean

Ellen, (202) 653–5629/(202) 708–9300

for TDD Relay/1–800–877–8339 for toll

free.

Jean H. Ellen,

Chief Docket Clerk.

[FR Doc. 00–11185 Filed 5–01–00; 4:32 pm]

BILLING CODE 3695–01–M

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

[Notice 00–044]

NASA Advisory Council, Life and

Microgravity Sciences and

Applications Advisory Committee

Commercial Advisory Subcommittee;

Meeting

AGENCY: National Aeronautics and

Space Administration.

ACTION: Notice of meeting.

SUMMARY: In accordance with the

Federal Advisory Committee Act, Pub.

L. 92–463, as amended, the National

Aeronautics and Space Administration

announces a meeting of the NASA

Advisory Council, Life and Microgravity

Sciences and Applications Advisory

Committee, Commercial Advisory

Subcommittee.

DATES: Thursday, May 11, 2000, 9 a.m.

to 12 noon.

ADDRESSES: National Aeronautics and

Space Administration, Room MIC–5,

300 E Street SW, Washington, DC

20546.

FOR FURTHER INFORMATION CONTACT: Ms.

Candace Livingston, Code UM, National

Aeronautics and Space Administration,

Washington, DC 20546; 202–358–0697.

SUPPLEMENTARY INFORMATION: The

meeting will be closed to the public on

Thursday, May 11, 2000, from 12 noon

to 4 p.m. in accordance with 5 U.S.C.

552b(c)(4), for a briefing on Commercial

Space Center activities which will

contain proprietary information. The

meeting will be open to the public on

Thursday, May 11, 2000, from 9 a.m. to

12 noon. The agenda for the meeting is

as follows:

Report on LMSAAC Activities

Report on SSUAS Activities

Status of Current Commercial Program

Activities

Organizational Status

Discussion of Commercial Strategy

Briefing on Commercial Space Center

Activities

Recommendations and Wrap-Up

It is imperative that the meeting be

held on this date to accommodate the

scheduling priorities of the key

participants. Visitors will be requested

to sign a visitors’ register.

Dated: April 27, 2000.

Matthew M. Crouch,

Advisory Committee Management Officer,

National Aeronautics and Space

Administration.

[FR Doc. 00–11130 Filed 5–3–00; 8:45 am]

BILLING CODE 7510–01–P

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

[Notice 00–045]

Notice of Prospective Patent License

AGENCY: National Aeronautics and

Space Administration.

ACTION: Notice of prospective patent

license.

SUMMARY: NASA hereby gives notice

that USA Video Interactive, Corp., of

Mystic, CT, has applied for an exclusive

license to practice the invention

disclosed in U.S. Patent No. 5,426,512

entitled ‘‘Image Data Compression

Having Minimum Perceptual Error

(DCTUNE)’’ and U.S. Patent No.

5,629,780 entitled ‘‘Image-Adapted

Visually Weighted Quantization

Matrices For Digital Image

Compression’’ which is assigned to the

United States of America as represented

by the Administrator of the National

Aeronautics and Space Administration.

Written objections to the prospective

grant of a license should be sent to

Ames Research Center.

DATES: Responses to this notice must be

received by July 3, 2000.

FOR FURTHER INFORMATION CONTACT:

Robert Padilla, Patent Counsel, NASA

Ames Research Center, M/S 202A–3,

Moffett Field, CA 94035–1000, (650)

604–5104.

Dated: April 26, 2000.

Edward A. Frankle,

General Counsel.

[FR Doc. 00–11132 Filed 5–3–00; 8:45 am]

BILLING CODE 7510–01–P

NATIONAL CREDIT UNION

ADMINISTRATION

Notice of Meetings

TIME AND DATE: 10 a.m., Monday, May 8,

2000.

PLACE: Board Room, 7th Floor, Room

7047, 1775 Duke Street, Alexandria, VA

22314–3428.

STATUS: Open.

MATTER TO BE CONSIDERED:

1. Final Rule: Amendments to Parts 716

and 741, NCUA’s Rules and

Regulations, Privacy of Consumer

Financial Information;

Requirements for Insurance.

RECESS: 10:45 a.m.

TIME AND DATE: 11 a.m., Monday, May 8,

2000.

PLACE: Board Room, 7th Floor, Room

7047, 1775 Duke Street, Alexandria, VA

22314–3428.

STATUS: Closed.

MATTER TO BE CONSIDERED:

1. One (1) Personnel Matter. Closed

pursuant to exemptions (2) and (6).

FOR FURTHER INFORMATION CONTACT:

Becky Baker, Secretary of the Board,

Telephone (703) 518–6304.

Becky Baker,

Secretary of the Board.

[FR Doc. 00–11245 Filed 5–2–00; 11:11 am]

BILLING CODE 7535–01–M