Federal Register / Vol. 62, No. 200 / Friday, October 17, 1997 / Notices 54139

administrators to assess compliance

with those requirements. This notice

informs the public of the PBGC’s request

and solicits public comment on the

collection of information.

DATES: Comments should be submitted

by November 17, 1997.

ADDRESSES: Comments should be

mailed to the Office of Information and

Regulatory Affairs of the Office of

Management and Budget, Attention:

Desk Officer for Pension Benefit

Guaranty Corporation, Washington, DC

20503. The request for extension will be

available for public inspection at the

Communications and Public Affairs

Department of the Pension Benefit

Guaranty Corporation, suite 240, 1200 K

Street, NW., Washington, DC, 20005–

4026, between 9 a.m. and 4 p.m. on

business days.

Copies of the collection of

information may be obtained without

charge by writing to the PBGC’s

Communications and Public Affairs

Department at the address given above

or calling 202–326–4040. (For TTY and

TDD, call 800–877–8339 and request

connection to 202–326–4040). The

premium payment regulation can be

accessed on the PBGC’s home page at

http://www.pbgc.gov.

FOR FURTHER INFORMATION CONTACT:

Deborah C. Murphy, Attorney, or Harold

J. Ashner, Assistant General Counsel,

Office of the General Counsel, Pension

Benefit Guaranty Corporation, 1200 K

Street, NW., Washington, DC 20005–

4026, 202–326–4024. (For TTY and

TDD, call 800–877–8339 and request

connection to 202–326–4024).

SUPPLEMENTARY INFORMATION: Section

4007 of Title IV of the Employee

Retirement Income Security Act of 1974

(‘‘ERISA’’) requires the Pension Benefit

Guaranty Corporation (‘‘PBGC’’) to

collect premiums from pension plans

covered under Title IV pension

insurance programs. Pursuant to ERISA

section 4007, the PBGC has issued its

regulation on Payment of Premiums (29

CFR Part 4007). Section 4007.3 of the

premium payment regulation requires

plans, in connection with the payment

of premiums, to file certain forms

prescribed by the PBGC, and § 4007.10

requires plans to retain and make

available to the PBGC records

supporting or validating the

computation of premiums paid.

The forms prescribed are PBGC Form

1–ES and Form 1 and (for singleemployer plans only) Schedule A to

Form 1. Form 1–ES is issued, with

instructions, in the PBGC’s Estimated

Premium Payment Package. Form 1 and

Schedule A are issued, with

instructions, in the PBGC’s Annual

Premium Payment Package.

The premium forms are needed to

determine the amount and record the

payment of PBGC premiums, and the

submission of forms and retention and

submission of records are needed to

enable the PBGC to perform premium

audits. The plan administrator of each

pension plan covered by Title IV of

ERISA is required to file one or more of

the premium payment forms each year.

The PBGC uses the information on the

premium payment forms to identify the

plans paying premiums and to verify

whether plans are paying the correct

amounts. That information and the

retained records are used for audit

purposes.

In addition, section 4011 of ERISA

and the PBGC’s regulation on Disclosure

to Participants (29 CFR Part 4011)

require plan administrators of certain

underfunded single-employer pension

plans to provide an annual notice to

plan participants and beneficiaries of

the plans’ funding status and the limits

on the Pension Benefit Guaranty

Corporation’s guarantee of plan benefits.

The participant notice requirement only

applies (subject to certain exemptions)

to plans that must pay a variable rate

premium. In order to monitor

compliance with Part 4011, plan

administrators must indicate on

Schedule A to Form 1 that the

participant notice requirements have

been complied with. The PBGC has also

conducted surveys of plan

administrators to assess compliance.

The collection of information under

the regulation on Payment of Premiums,

including Form 1–ES, Form 1, and

Schedule A to Form 1, and related

instructions has been approved by OMB

under control number 1212–0009

through February 28, 1998. This

collection of information also includes

the certification and surveys of

compliance with the participant notice

requirements (but not the participant

notices themselves). The PBGC is

requesting that OMB extend its approval

of this collection of information for

another three years. (The participant

notices constitute a different collection

of information that has been separately

approved by OMB.)

Under the Retirement Protection Act

of 1994, certain special premium rules

for regulated public utility company

plans cease to apply for plan years

beginning after 1997. The premium

forms and instructions are being revised

for 1998 to reflect this change. The

revised forms and instructions will also

include provisions regarding the use of

electronic funds transfers as an optional

form of payment for premiums and for

PBGC payment of premium refunds, and

will permit plan administrators whose

filings are prepared by consultants to

request that the PBGC no longer send

them unneeded forms packages. In

addition, reporting of plan-to-plan

transfers will now be required only

where the transferor plan ceases to exist,

rather than in all cases.

The 1998 forms and instructions will

eliminate multiple repetition of the

rules regarding the date as of which the

premium is calculated by using a new

defined term, ‘‘premium snapshot date,’’

for this purpose. Instructions and line

items for variable-rate premium

exemptions (which are relatively brief)

are being placed before those for nonexempt filing methods to save exempt

filers from having to read through the

relatively lengthy filing method

descriptions.

The 1998 Form 1 will also give plans

a way to notify the PBGC of their

participation in the PBGC’s new

premium ‘‘self-audit’’ program. Under

this program, plans could elect to

engage independent auditors to review

their premium filings as part of the

regular plan audit cycle. The PBGC

expects to announce details about the

‘‘self-audit’’ program within the next

few months.

Other appropriate revisions (e.g.,

clarifying and editorial changes) are also

being made.

The PBGC estimates that it receives

responses annually from about 49,500

plan administrators and that the total

annual burden of the collection of

information is about 4,042.5 hours and

$11,236,125.

Issued in Washington, DC, this 15th day of

October, 1997.

David M. Strauss,

Executive Director, Pension Benefit Guaranty

Corporation.

[FR Doc. 97–27705 Filed 10–16–97; 8:45 am]

BILLING CODE 7708–01–P

SECURITIES AND EXCHANGE

COMMISSION

[Release No. IC–22848; File No. 812–10732]

Alexander Hamilton Life Insurance

Company of America, et al.

October 9, 1997.

AGENCY: Securities and Exchange

Commission (the ‘‘SEC’’ or the

‘‘Commission’’).

ACTION: Notice of application for

exemption pursuant to Section 26(b) of

the Investment Company Act of 1940

(the ‘‘1940 Act’’) approving a proposed

substitution of securities and pursuant

to Section 17(b) of the 1940 Act granting
54140 Federal Register / Vol. 62, No. 200 / Friday, October 17, 1997 / Notices

exemptions from the provisions of

Section 17(a)(1) and 17(a)(2) of the 1940

Act.

SUMMARY OF APPLICATION: Applicants

seek an order pursuant to Section 26(b)

of the 1940 Act approving the

substitution of shares of certain

registered management investment

companies (‘‘Substituted Funds’’) for

shares of certain other registered

management investment companies

currently serving as underlying

investment options for variable annuity

contracts and variable life insurance

policies (‘‘Replaced Funds’’). Applicants

also seek an order, pursuant to Sections

6(c) and 17(b) of the 1940 Act, granting

exemptions from Section 17(a) to permit

Applicants to carry out certain of the

substitutions wholly or partly in-kind.

Applicants: Alexander Hamilton Life

Insurance Company of America (‘‘AH

Life’’), Alexander Hamilton Variable

Annuity Separate Account (‘‘AH

Separate Account’’) (together, the ‘‘AH

Applicants’’), Chubb Life Insurance

Company of America (‘‘Chubb Life’’),

Chubb Separate Account A (‘‘Chubb

Separate Account’’) (together, the

‘‘Chubb Applicants’’), Jefferson-Pilot

Life Insurance Company (‘‘JP Life’’) and

Jefferson-Pilot Separate Account A (‘‘JP

Separate Account’’) (together, the ‘‘JP

Applicants’’) (hereinafter referred to

collectively as the ‘‘Applicants,’’ ‘‘Life

Company Applicants,’’ and ‘‘Separate

Account Applicants’’ as appropriate).

Filing Date: The application was filed

on July 22, 1997, and amended on

October 1, 1997.

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 on this application by writing

to the Secretary of the SEC and serving

Applicants with a copy of the request,

in person or by mail. Hearing requests

must be received by the Commission by

5:30 p.m. on November 3, 1997, and

accompanied by proof of service on the

Applicants in the form of an affidavit or,

for lawyers, a certificate of service.

Hearing requests should state the nature

of the interest, the reason for the request

and issues contested. Persons may

request notification of the date of a

hearing by writing to the Secretary of

the SEC.

ADDRESSES: Secretary, SEC, 450 Fifth

Street, NW., Washington, DC 20549.

Applicants, Shari J. Lease, Esq., Chubb

Life Insurance Company of America,

One Granite Place, Concord, New

Hampshire 03301.

FOR FURTHER INFORMATION CONTACT:

Zandra Y. Bailes, Senior Counsel, or

Mark C. Amorosi, Branch Chief, Office

of Insurance Products, Division of

Investment Management, at (202) 942–

0670.

SUPPLEMENTARY INFORMATION: Following

is a summary of the application. The

complete application is available for a

fee from the Public Reference of the

SEC, 450 Fifth Street, NW., Washington,

DC 20549 (tel. (202) 942–8090).

Applicants’ Representations

1. The Life Company Applicants are

affiliated stock life insurance companies

wholly owned by Jefferson Pilot

Corporation. Jefferson-Pilot Corporation

acquired AH Life on October 6, 1995,

with an effective date of September 30,

1995. The purchase of Chubb Life was

closed on May 13, 1997, with an

effective date of April 30, 1997.

2. AH Life, a stock life insurance

company organized under the insurance

laws of Michigan, is engaged primarily

in the sale of annuity contracts and life

insurance policies. AH Life is the

sponsor and depositor of the AH

Separate Account.

3. Chubb Life, a stock life insurance

company chartered under the laws of

Tennessee and redomesticated to New

Hampshire on July 1, 1991, is

authorized to write life insurance

business in Puerto Rico, the U.S. Virgin

Islands, Guam, the Commonwealth of

the Northern Mariana Islands, the

District of Columbia, and all states of

the United States except New York.

Chubb Life is the sponsor and depositor

of the Chubb Separate Account.

4. JP Life, a stock life insurance

company organized under the insurance

laws of North Carolina, is primarily

engaged in the writing of whole life,

term, endowment, and annuity policies

on an individual ordinary basis, plus

industrial and group insurance. JP Life

is the sponsor and depositor of the JP

Separate Account.

5. The Separate Account Applicants

are segregated asset accounts registered

under the 1940 Act as unit investment

trusts. The AH Separate Account is used

to fund certain variable annuity

contracts issued by AH Life and is

divided into eight sub-accounts, seven

of which invest in corresponding series

(each a ‘‘Fund’’) of the Alexander

Hamilton Variable Insurance Trust (the

‘‘Trust’’) with the remaining subaccount investing in the Federated

Prime Money Fund II of the Federated

Insurance Series (‘‘Federated Prime

Money Fund II’’). Chubb Separate

Account is used to fund certain variable

life insurance policies issued by Chubb

Life and is divided into 13 subaccounts, nine of which invest in

corresponding series (each a

‘‘Portfolio’’) of the Chubb America

Fund, Inc. (‘‘CAF’’) with the remaining

sub-accounts investing in the

Templeton International Fund of

Templeton Variable Products Series

Fund, the High Income Portfolio of

Variable Insurance Products Fund

(‘‘Fidelity VIP’’), the Contrafund

Portfolio and the Index 500 Portfolio of

Variable Insurance Products Fund II

(‘‘Fidelity VIPII’’). JP Separate Account

is used to fund certain variable annuity

contracts issued by JP Life, and is

divided into 16 sub-accounts, two of

which invest in shares of the Trust, two

of which invest in shares of

Oppenheimer Variable Account Funds,

eight of which invest in shares of

Fidelity VIP and Fidelity VIPII, two of

which invest in shares of The Alger

American Fund, and two of which

invest in shares of the MFS Variable

Insurance Trust.

6. The Trust is an open-end

management investment company,

organized as a Massachusetts business

trust. The Trust consists of seven Funds,

each of which operates as a separate

investment fund, that have differing

investment objectives, policies, and subadvisers. Shares of the Funds are

currently available to the public only

through the purchase of certain variable

annuity contracts issued by AH Life and

JP Life and to retirement plans qualified

under the Internal Revenue Code of

1986, as amended (‘‘qualified retirement

plans’’). Alexander Hamilton Capital

Management, Inc. acts as the Trust’s

investment adviser and has retained

other unaffiliated investment advisers to

act as sub-advisers who provide the dayto-day portfolio management for each

Fund.

7. CAF is an open-end, diversified

management investment company

incorporated in Maryland. Shares of

CAF’s Portfolios are available for

purchase only by the divisions of Chubb

Life’s separate accounts and qualified

retirement plans. Chubb Investment

Advisory Corporation (‘‘CIAC’’) acts as

CAF’s investment manager and has

retained other investment advisers to act

as sub-advisers in providing the day-today portfolio management of each

portfolio of CAF. CAF consists of nine

Portfolios, each of which is a separate

investment portfolio, that have differing

investment objectives.

8. The Oppenheimer Bond Fund is

one series of Oppenheimer Variable

Account Funds which is organized as a

Massachusetts business trust.

Oppenheimer Variable Account Funds

is a diversified open-end investment

company consisting of nine separate

funds. Shares of Oppenheimer Variable

Account Funds are offered for purchase

by insurance company separate
Federal Register / Vol. 62, No. 200 / Friday, October 17, 1997 / Notices 54141

accounts as the investment medium for

variable life insurance policies and

variable annuity contracts.

Oppenheimer Funds, Inc. acts as

investment adviser for the Oppenheimer

Bond Fund.

9. The Federated Prime Money Fund

II is an investment portfolio of

Federated Insurance Series, an open-end

management investment company,

which is organized as a Massachusetts

business trust. Federated Advisers acts

as investment adviser for Federated

Prime Money Fund II.

10. Jefferson-Pilot Corporation, the

parent company of the Life Company

Applicants, and the Life Company

Applicants have determined to maintain

only one proprietary mutual fund as an

underlying investment option for the

variable annuity contracts (‘‘Contracts’’)

and variable life insurance policies

(‘‘Policies’’) issued by the Applicants as

well as other variable life insurance

policies and variable annuity contracts

which the Applicants may offer in the

future. Applicants state that it has been

determined that CAF should be the

surviving proprietary investment

option. Applicants, therefore, are

proposing the substitutions described in

the application and summarized below

(the ‘‘Substitutions’’). After the

Substitutions have been effected, the

Trust will be de-registered and will

cease operations. Applicants will

continue to offer certain unaffiliated

funds as investment options.

11. Applicants state that CAF has

been in existence since 1984 and as of

March 31, 1997 had total net assets of

$362.7 million. CIAC does not waive or

assume any of the expenses of CAF. In

contrast, the Trust has been in existence

since 1994 and did not commence

operations until February 1996. As of

March 31, 1997, the Trust had net assets

of $37.3 million. As a result of the

Trust’s small size, the Trust’s

investment adviser has voluntarily

waived or assumed expenses for all of

the Trust’s Funds. Moreover, the Trust’s

Funds have not generated substantial

interest among purchasers of the

Contracts. The Life Company

Applicants believe that the CAF

Portfolios are generally more responsive

to the preferences of purchasers of the

Contracts, while offering a larger fund

with similar investment objectives,

providing a potential for economies of

scale.

12. Applicants note that the one

exception to substituting the CAF

Portfolios relates to the CAF Bond

Portfolio. Given the sale of Chubb Life

to Jefferson-Pilot Corporation, the

former owner of Chubb Life and

Jefferson-Pilot Corporation have

determined that Chubb Asset Managers,

Inc. will no longer be available to act as

sub-adviser for the CAF Bond Portfolio.

It has been determined that the

Oppenheimer Bond Fund provides a

better investment alternative than

continuation of the CAF Bond Portfolio

with a new adviser.

13. In addition, the substitution

involving the unaffiliated mutual fund,

Federated Prime Money Fund II, is

being proposed. The actual expense

ratio of the CAF Money Market Portfolio

is lower than that of the Federated

Prime Money Fund II, and its

performance is slightly better since

inception.

The Proposed Transactions

1. The AH Applicants propose that

AH Life substitute: (1) Shares of the

Money Market Portfolio of CAF for

shares of the Federated Prime Money

Fund II; (2) shares of the Balanced

Portfolio of CAF for shares of the

Balanced Fund of the Trust; (3) shares

of the Growth and Income Portfolio of

CAF for shares of the Growth & Income

Fund of the Trust; (4) shares of the

Capital Growth Portfolio of CAF for

shares of the Growth Fund of the Trust;

(5) shares of the Emerging Growth

Portfolio of CAF for shares of the

Emerging Growth Fund for the Trust; (6)

shares of the World Growth Stock

Portfolio of CAF for shares of the

International Equity Fund of the Trust;

(7) shares of the Oppenheimer Bond

Fund for shares of the Investment Grade

Bond Fund of the Trust; and (8) shares

of the Oppenheimer Bond Fund for

shares of the High Yield Bond Fund of

the Trust.

2. The Chubb Applicants propose that

Chubb Life substitute shares of the

Oppenheimer Bond Fund for shares of

the Bond Portfolio of CAF.

3. The JP Applicants propose that JP

Life substitute: (1) Shares of the Capital

Growth Portfolio of CAF for shares of

the Growth Fund of the Trust; and (2)

shares of the Emerging Growth Portfolio

of CAF for shares of the Emerging

Growth Fund of the Trust.

4. Applicants state that each of the

Life Company Applicants will redeem

for cash or kind of the shares of each

Replaced Fund that it currently holds

on behalf of its applicable Separate

Account Applicant at the close of

business on the date selected for the

Substitutions. It is anticipated that the

redemptions of the Federated Prime

Money Fund II, the Trust Investment

Grade Bond Fund, the Trust High Yield

Bond Fund and the CAF Bond Fund

will be redeemed all for cash. The Trust

Investment Grade Bond Fund, the Trust

High Yield Fund, and the CAF Bond

Fund will be replaced by the

Oppenheimer Bond Fund. With regard

to all other Replaced Funds, it is

anticipated that redemptions will be

partly or wholly in-kind, and thus

purchases of the applicable Substituted

Funds will be paid for partly or wholly

with portfolio securities. Thus, the

Replaced Funds whose shares will be

redeemed wholly or partly in-kind are

the Trust’s Balanced, Growth and

Income, Growth, Emerging Growth and

International Equity Funds.

5. The Life Company Applicants, each

on behalf of its applicable Separate

Account Applicant, will simultaneously

place a redemption request with each

applicable Replaced Fund and a

purchase order with each applicable

Substituted Fund so that each purchase

will be for the exact amount of the

redemption proceeds. As a result, at all

times, monies attributable to contract

owners and policy owners (‘‘Owners’’)

then invested in the Replaced Funds

will remain fully invested and will

result in no change in the amount of any

Owner’s contract or policy value, death

benefit or investment in the applicable

Separate Account Applicant.

6. The Trust will effect the

redemptions-in-kind and the transfers of

portfolio securities in a manner that is

consistent with the investment

objectives, policies and restrictions, and

federal tax law and 1940 Act

diversification requirements applicable

to the Substituted Fund. AH Life and JP

Life each will take appropriate steps to

assure that the portfolio securities

selected for redemptions-in-kind are

suitable investments for the Substituted

Funds.

7. Applicants state that the Life

Company Applicants have undertaken

to assume all transaction costs and

expenses relating to the Substitutions,

including any direct or indirect costs of

liquidating the assets of the Replaced

Funds so that the full net asset value of

redeemed shares of the Replaced funds

held by the each Separate Account

Applicant will be reflected in the

Owners’ Policy values’ accumulation

unit or annuity unit values following

the Substitutions.

8. As part of the Substitutions, AH

Life will combine the sub-accounts

invested in the Trust’s Investment Grade

Bond Fund and the Trust’s High Yield

Bond Fund and designate the

continuing sub-account as the

Oppenheimer Bond Fund Sub-account.

9. Each of the Life Company

Applicants will supplement the

prospectus for the applicable Separate

Account Applicant to reflect the

proposed Substitutions. Within five

days after the Substitutions, the
54142 Federal Register / Vol. 62, No. 200 / Friday, October 17, 1997 / Notices

Applicants will send to their respective

Owners written notice of the

Substitutions (the ‘‘Notice’’) identifying

the shares of the Replaced Funds which

have been eliminated and the shares of

the Substituted Funds which have been

substituted. Applicants will include in

such mailing the prospectuses for the

Substituted Funds and the applicable

revised prospectus or supplement for

the Contracts and Policies of the

Separate Account Applicants describing

the Substitutions. Owners will be

advised in the Notice that for a period

of 31 days from the date of the Notice,

Owners may transfer all assets, as

substituted, to any other available subaccount, without limitation, without

charge and without any such transfer

counting as one of the limited number

of transfers permitted in a contract or

policy year free of charge (‘‘Free

Transfer Period’’).

10. Following the Substitution,

Owners will be afforded the same

contract rights, including surrender and

other transfer rights with regard to

amounts invested under the Contracts

and Policies, as they currently have.

Applicants’ Legal Analysis and

Conditions

1. Section 26(b) of the 1940 Act

provides, in pertinent part, that ‘‘[i]t

shall be unlawful for any depositor or

trustee of a registered unit investment

trust holding the security of a single

issuer to substitute another security

unless the Commission shall have

approved such substitution.’’ The

purpose of Section 26(b) is to protect the

expectation of investors in a unit

investment trust that the unit

investment trust will accumulate the

shares of a particular issuer, and to

prevent scrutinized substitutions which

might, in effect, force shareholders

dissatisfied with the substituted security

to redeem their shares, thereby possibly

incurring either a loss of the sales load

deducted from initial purchase

payments, an additional sales load upon

reinvestment of the redemption

proceeds, or both.

2. Applicants represent that the

purposes, terms and conditions of the

Substitutions are consistent with the

principles and purposes of Section 26(b)

and do not entail any of the abuses

Section 26(b) was designed to prevent.

Applicants submit that the Substitutions

involving the Trust are appropriate

solutions to the insufficient size of the

Trust which makes it difficult to achieve

consistent investment performance and

reduce operating expenses. Given the

longer operating history of CAF and

attendant investment performance, as

well as its much larger asset size and

resultant lack of fee waivers or

assumption of expenses, Applicants

maintain that it is in the best interest of

the Owners to have CAF act as an

underlying investment option for the

variable products as opposed to the

Trust. With regard to the CAF Bond

Portfolio, the Chubb Applicants

represent that the unavailability of the

current sub-adviser as a result of the

sale of Chubb Life to Jefferson-Pilot

Corporation supports the selection of

the Oppenheimer Bond Fund as an

alternative investment.

3. Applicants represent that the

Substitution will not result in the type

of costly forced redemption that Section

26(b) was designed to guard against and

is consistent with the protection of

investors and the purposes fairly

intended by the 1940 Act for the

following reasons: (a) The Replaced

Funds have objectives, policies and

restrictions sufficiently similar to the

objectives of the Substituted Funds so as

to continue to fulfill the Owners’

objectives and risk expectations; (b)

after receipt of the Notice informing an

Owner of the Substitutions, an Owner

may request that assets be reallocated to

another sub-account or division selected

by the Owner, and the Free Transfer

Period provides sufficient time for

Owners to consider their reinvestment

options; (c) the Substitutions, in all

cases, will take place at the net asset

value of the respective shares, without

the imposition of any transfer or similar

charge; (d) the Life Company Applicants

have undertaken to assume the expenses

and transaction costs, including, but not

limited to, legal and accounting fees and

any brokerage commissions relating to

the Substitution and are effecting the

redemption of shares in a manner that

attributes all transaction costs to the Life

Company Applicants; (e) the

Substitutions in no way will alter the

insurance benefits to Owners or the

contractual obligations of the Life

Company Applicants; (f) the

Substitutions in no way will alter the

tax benefits to Owners; and (g) the

Substitutions are expected to confer

certain economic benefits on Owners by

virtue of the enhanced asset size and

lower expenses of the Substituted

Funds, as described in the application.

4. Section 17(a)(1) of the 1940 Act

prohibits any affiliated person of a

registered investment company. Section

17(a)(2) of the 1940 Act prohibits any

affiliated person of a registered

investment company, or an affiliated

person of such affiliated person, from

selling any security or other property to

such registered investment company, or

an affiliated person of an affiliated

person, from purchasing any security or

other property from such registered

investment company.

5. Applicants state that certain of the

Substitutions will be effected, partly or

wholly, through redemptions and

purchases in-kind and may be deemed

to entail the indirect purchase of shares

of the related Substituted Funds with

portfolio securities of the Replaced

Funds, and the indirect sale of securities

of the Replaced Funds for shares of the

Substituted Funds, and thus may entail

each such Fund in the purchase and

sale of such securities, acting as

principal, to the other Fund in

contravention of Section 17(a).

6. Moreover, immediately following

the Substitutions, AH Life will combine

the sub-accounts invested in the Trust’s

Investment Grade Bond and High Yield

Bond Funds and designate the

continuing sub-account as the

Oppenheimer Bond Fund Sub-Account.

AH Life could be said to be transferring

unit values between its sub-accounts.

The transfer of unit values could be said

to involve purchase and sale

transactions between sub-accounts that

are affiliated persons. The sale and

purchase transactions between subaccounts could be said to come within

the scope of Sections 17(a)(1) and

17(a)(2) of the 1940 Act, respectively.

7. Section 17(b) of the 1940 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 reports filed under the

1940 Act; and (c) the proposed

transaction is consistent with the

general purposes of the 1940 Act.

8. Applicants represent that the terms

of the proposed transactions: (a) Are

reasonable and fair, including the

consideration to be paid and received,

and do not involve overreaching; (b) are

consistent with the investment policies

of the Replaced Funds of the Trust; and

(c) are consistent with the general

purposes of the 1940 Act. Applicants

state that the transactions effecting the

Substitutions will be effected in

conformity with Section 22(c) of the

1940 Act and Rule 22c–1 thereunder.

Moreover, Applicants state that, in

effecting the redemptions in-kind and

transfers, the Trust will comply with the

requirements of Rule 17a–7 under the

1940 Act to the extent possible and the
Federal Register / Vol. 62, No. 200 / Friday, October 17, 1997 / Notices 54143

1WRI has entered into an Agreement and Plan of

Merger dated February 17, 1997 with Kansas City

Power & Light Company (‘‘KCPL’’), a public utility

company which operates as an electric utility

company in Kansas and Missouri (‘‘KCPL Merger

Agreement’’). The KCPL Merger Agreement calls for

KCPL to be acquired by WRI, after which, WRI

would claim, or seek an order from the Commission

granting, an exemption under Section 3(a).

2 KGE has obtained no-action assurance from the

Commission regarding its ownership interest in

Wolf Creek. SEC No-Action Letter (June 26, 1995).

3Westar Capital’s subsidiaries and affiliates are:

(i) Hanover Compressor Company (offers

compression services to the natural gas industry),

(ii) Westar Financial Services, Inc. (funds activities

of other WRI subsidiaries), (iii) Wing Columbia,

L.L.C. (invests in power generation projects in

Columbia, South America), (iv) WestSec, Inc.

Continued

procedures established thereunder by

the Board of Trustees of the Trust.

Applicants submit that Owner interests

after the Substitution, in practical

economic terms, will not differ in any

measurable way from such interests

immediately prior to the Substitution. In

each case, Applicants assert that the

consideration to be received and paid is,

therefore, reasonable and fair.

9. Applicants assert that the

investment objectives of each of the

Substituted Funds are sufficiently

similar to the investment objectives of

the Replaced Funds. In this regard, the

Substitutions are consistent with

Commission precedent pursuant to

Section 17 of the 1940 Act. Applicants

also assert that the Substitutions are

consistent with the general purposes of

the 1940 Act, as enunciated in the

Findings and Declaration of Policy in

Section 1 of the 1940 Act. The proposed

transactions do not present any of the

issues or abuses that the 1940 Act is

designed to prevent.

10. Section 6(c) of the 1940 Act

provides that the Commission may grant

an order exempting persons and

transactions from any provision or

provisions of the 1940 Act as may be

necessary or appropriate in the public

interest and consistent with the

protection of investors and the purposes

fairly intended by the policies and

provisions of the 1940 Act. Applicants

submit that the proposed transactions

will be effected in a manner consistent

with the public interest and the

protection of investors, as required by

Section 6(c) of the 1940 Act. Owners

will be fully informed of the terms of

Substitutions through the prospectus

supplements and the Notice, and will

have an opportunity to reallocate

investments prior to and following the

Substitutions.

Conclusion

Applicants assert that, for the reasons

summarized above, the requested order

approving the Substitutions and related

transactions involving in-kind

redemptions and the combination of

certain separate account sub-accounts

should be granted.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–27545 Filed 10–16–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 35–26764]

Filings Under the Public Utility Holding

Company Act of 1935, as Amended

(‘‘Act’’)

October 10, 1997.

Notice is hereby given that the

following filing(s) has/have been made

with the Commission pursuant to

provisions of the Act and rules

promulgated thereunder. All interested

persons are referred to the application(s)

and/or declaration(s) for complete

statements of the proposed

transaction(s) summarized below. The

application(s) and/or declaration(s) and

any amendments thereto is/are available

for public inspection through the

Commission’s Office of Public

Reference.

Interested persons wishing to

comment or request a hearing on the

application(s) and/or declaration(s)

should submit their views in writing by

October 31, 1997, to the Secretary,

Securities and Exchange Commission,

Washington, D.C. 20549, and serve a

copy on the relevant applicant(s) and/or

declarant(s) at the address(es) specified

below. Proof of service (by affidavit or,

in case of an attorney at law, by

certificate) should be filed with the

request. Any request for hearing shall

identify specifically the issues of fact or

law that are disputed. A person who so

requests will be notified of any hearing,

if ordered, and will receive a copy of

any notice or order issued in the matter.

After said date, the application(s) and/

or declaration(s), as filed or as amended,

may be granted and/or permitted to

become effective.

Western Resources, Inc. (70–9097)

Western Resources, Inc. (‘‘WRI’’),

located at 818 Kansas Avenue, Topeka,

Kansas 66612, a Kansas public utility

holding company exempt under section

3(a) pursuant to rule 2 from all

provisions of the Act except section

9(a)(2), has filed an application under

sections 9(a)(2) and 10 of the Act in

connection with a proposed sale of its

gas utility operations.

WRI, itself a public utility company,

is engaged through its Kansas Power &

Light Company division in the

generation, purchase, transmission,

distribution and sale of electric energy

in Kansas and the transportation and

sale of natural gas predominantly in

Kansas, with some small operations in

Oklahoma. WRI provides retail electric

service to approximately 329,000

customers in Kansas and northeastern

Oklahoma. WRI also provides wholesale

electric generation and transmission

services to numerous municipal

customers in Kansas, and, through

interchange agreements, to surrounding

integrated systems. WRI provides

natural gas service to approximately

648,000 retail customers in Kansas and

northeastern Oklahoma. WRI is

regulated as a public utility with respect

to retail electric and gas rates and other

matters by the Kansas Corporation

Commission (‘‘KCC’’) and with respect

to retail gas rates and other matters by

the Oklahoma Corporation Commission

(‘‘OCC’’). WRI is also subject to the

jurisdiction of the Federal Energy

Regulatory Commission, including

jurisdiction with respect to rates for

sales of electricity for resale.

WRI has one utility subsidiary,

Kansas Gas and Electric Company

(‘‘KGE’’).1 KGE provides retail electric

service to approximately 277,000

residential, commercial and industrial

customers in Kansas and wholesale

electric generation and transmission

services to numerous municipal

customers in Kansas and, through

interchange agreements, to surrounding

integrated systems. KGE does not own

or operate any gas properties. KGE has

one active subsidiary, Wolf Creek

Nuclear Operating Corporation (‘‘Wolf

Creek’’), a Delaware Corporation which

is 47% owned by KGE and operates the

Wolf Creek Generating Station on behalf

of the plant’s owners, including KGE.2

KGE is regulated as a public utility

company with respect to retail electric

rates and other matters by the KCC. It is

also regulated by the Nuclear Regulatory

Commission under the Atomic Energy

Act of 1954, as amended, in connection

with its ownership interest in Wolf

Creek.

WRI also has numerous direct and

indirect non-utility subsidiaries,

including (1) Westar Capital, Inc.

(‘‘Westar Capital’’), a Kansas corporation

that is holding company for certain of

WRI’s non-regulated activities,3 (2)