Federal Register / Vol. 60, No. 12 / Thursday, January 19, 1995 / Notices 3897

1Orders granting exemptive relief were issued as

follows:

(a) Hartford Life and Accident Insurance

Company, Investment Company Act Release Nos.

18738 (notice) (May 29, 1992) and 18812 (order)

(June 25, 1992); and

(b) Hartford Life and Accident Insurance

Company, Investment Company Act Release Nos.

18737 (notice) (May 29, 1992) and 18811 (order)

(June 25, 1992).

Conclusion

Applicants assert that for the reasons

and upon the facts set forth above, the

requested exemptions from Sections

26(a)(2)(C) and 27(c)(2) of the 1940 Act

are appropriate in the public interest

and consistent with the protection of

investors and the purposes fairly

intended by the policy and provisions of

the 1940 Act.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–1287 Filed 1–18–95; 8:45 am]

BILLING CODE 8010–01–M′

[Rel. No. IC–20837; File No. 812–9284]

Hartford Life and Accident Insurance

Company, et al.

January 12, 1995.

AGENCY: Securities and Exchange

Commission (‘‘the Commission’’).

ACTION: Notice of application for

exemption under the Investment

Company Act of 1940 (‘‘1940 Act’’).

APPLICANTS: Hartford Life and Accident

Insurance Company (‘‘Hartford Life and

Accident’’), Hartford Life and Accident

Insurance Company Separate Account

One (‘‘HLA Separate Account One’’) and

Hartford Life and Accident Insurance

Company/Putnam Capital Management

Separate Account One (‘‘HLA/PCM

Separate Account One’’) (HLA Separate

Account One and HLA/PCM Separate

Account One referred to collectively as

the ‘‘Separate Accounts’’), and Hartford

Securities Distributors, Inc. (‘‘HSD’’).

RELEVANT 1940 ACT SECTIONS: Order

requested under Section 6(c) exempting

Applicants from Sections 26(a)(2)(C)

and 27(c)(2) of the 1940 Act.

SUMMARY OF APPLICATION: Applicants

seek an order permitting payment to

Hartford Life and Accident of a

mortality and expense risk charge from

the assets of the Separate Accounts

funding individual and group variable

annuity contracts issued by Hartford

Life and Accident and underwritten by

HSD (the ‘‘Contracts’’). The order would

apply to future separate accounts of

Hartford Life and Accident issuing

contracts that are materially similar to

the Contracts, and would permit

applicants to substitute HSD for

Hartford Equity Sales Company

(‘‘HESCO’’) as the principal underwriter

of the Contracts.

FILING DATE: The application was filed

on October 12, 1994, an amended on

November 14, 1994, December 22, 1994,

and January 5, 1995.

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 the application by writing

to the Secretary of the Commission and

serving the Applicants with a copy of

the request, either personally or by mail.

Hearing requests must be received by

the Commission by 5:30 p.m. on

February 6, 1995, and should be

accompanied by proof of service on the

Applicants in the form of an affidavit or,

for lawyers, by certificate of service.

Hearing requests should state the nature

of the interest, the reason for the

request, and the issues contested.

Persons may request notification of the

date of a hearing by writing to the

Secretary of the Commission.

ADDRESSES: Secretary, Securities and

Exchange Commission, 450 5th Street,

N.W., Washington, D.C. 20549.

Applicants, c/o Rodney J. Vessels,

Counsel, Hartford Life and Accident

Insurance Company, 200 Hopmeadow

Street, Simsbury, CT 06089.

FOR FURTHER INFORMATION CONTACT:

Joseph G. Mari, Senior Special Counsel,

or Wendy F. Friedlander, Deputy Chief,

at (202) 942–0670, Office of Insurance

Products (Division of Investment

Management).

SUPPLEMENTARY INFORMATION: The

following is a summary of the

application. The complete application is

available for a fee from the

Commission’s Public Reference Branch.

Applicants’ Representations

1. Hartford Life and Accident is a

stock life insurance company licensed

to do business in all states except New

York and the District of Columbia.

2. HSD will register as a broker-dealer

under the Securities Exchange Act of

1934 and will apply to become a

member of the National Association of

Securities Dealers, Inc. (‘‘NASD’’).

3. Hartford Life and Accident and

each of the Separate Accounts filed

applications previously, and orders

were issued granting the requested

exemptions from Sections 26(a)(2)(C)

and 27(c)(2) of the 1940 Act.1 HESCO,

the designated principal underwriter for

the Contracts, was an applicant in the

previous applications for exemptive

relief from Sections 26(a)(2)(C) and

27(c)(2). This application seeks relief to

permit Applicants to substitute HSD for

HESCO as the designated principal

underwriter for the Contracts, which

would allow HESCO to continue as

broker-dealer engaged in distribution

functions with respect to HESCO’s own

registered representatives, and would

permit HSD to serve as principal

underwriter and distributor with respect

to entering into sales agreements with

independent broker-dealers.

4. Applicants reaffirm all facts,

representations and undertakings

contained in the applications for

exemptive relief referenced in footnote

1 above, and incorporate those

applications herein by reference. To the

extent that there have been any material

changes in those facts, representations

or undertakings, the changes have been

disclosed herein. Except for the

replacement of the principal

underwriter, there are no material

changes in the Separate Accounts or the

Contracts as described in the previous

applications.

5. The contingent deferred sales

charge, annual maintenance fee and

annual asset charge for providing

mortality and expense risk guarantees

are fully described in the applications

for exemptive relief which were

previously granted.

6. Hartford Life and Accident will

make a daily charge at the rate of 1.25%

annually from each Contract held in the

Separate Accounts for providing

mortality and expense guarantees with

respect to the Contracts, of which .90%

of the charge is attributable to mortality

risks and .35% of the charge is

attributable to expense risks.

7. The mortality and expense risk

charge will not be increased. If the

charge is insufficient to cover the actual

costs, Hartford Life and Accident will

bear the loss. Conversely, if the charge

proves more than sufficient to meet

actual expenses, the excess will be

surplus to Hartford Life and Accident

and will be available for any proper

corporate purpose. Hartford Life and

Accident expects a reasonable profit

from the mortality and expense risk

charge.

Applicants’ Legal Analysis and

Representations

1. Applicants request an exemption

from Sections 26(a)(2)(C) and 27(c)(2) of

the 1940 Act to the extent necessary to

permit the deduction of a mortality and

expense risk charge from the Separate

Accounts.

2. Sections 26(a)(2)(C) and 27(c)(2), in

pertinent part, prohibit a registered unit

investment trust and any depositor

thereof or underwriter therefor from
3898 Federal Register / Vol. 60, No. 12 / Thursday, January 19, 1995 / Notices

selling periodic payment plan

certificates unless the proceeds of all

payments (other than sales loads) are

deposited with a qualified bank as

trustee or custodian and held under

arrangements which prohibit any

payment to the depositor or principal

underwriter except a fee, not exceeding

such reasonable amount as the

Commission may prescribe, for

performing bookkeeping and other

administrative services of a character

normally performed by the bank itself.

3. Applicants request that the

Commission enter an Order that applies

to the Separate Accounts and to future

separate accounts issuing contracts that

are materially similar to the Contracts

exempting them from the provisions of

Sections 26(a)(2)(C) and 27(c)(2) to the

extent necessary to permit the

deduction by Hartford Life and

Accident, and the payment to Hartford

Life and Accident, of the fee for

providing the mortality and expense

undertakings (deducted on a daily

basis).

4. Applicants represent that:

(a) The mortality and expense risk

charge is reasonable in relation to the

risks assumed by Hartford Life and

Accident under the Contracts;

(b) The mortality and expense risk

charge is within the range of industry

practice for comparable annuity

contracts as determined by a survey of

comparable contracts issued by a large

number of other insurance companies.

Hartford Life and Accident will

undertake to maintain and make

available to the Commission upon

request a memorandum outlining the

methodology and the contracts of other

insurance companies underlying this

representation;

(c) There is the likelihood that the

proceeds from explicit sales loads will

be insufficient to cover the expected

costs of distributing the Contracts. Any

shortfall will be covered from the assets

of the general account, which may

include profit from the mortality and

expense risk charge. Hartford Life and

Accident has concluded that there is a

reasonable likelihood that the Separate

Accounts’ distribution financing

arrangement will benefit the Separate

Accounts and Contract owners. Hartford

Life and Accident will maintain and

make available to the Commission upon

request a memorandum setting forth the

basis for this representation;

(d) The Separate Accounts will invest

only in open-end management

companies which have undertaken to

have a board of directors, a majority of

whom are not interested persons of the

open-end management company,

formulate and approve any plan under

Rule 12b–1 to finance distribution

expenses; and

(e) Future variable annuity contracts

for which class relief is sought will be

materially similar to the existing

Contracts covered by this application.

Conclusion

Applicants assert that for the reasons

and upon the facts set forth above, the

requested exemptions from Sections

26(a)(2)(C) and 27(c)(2) of the 1940 Act

are appropriate in the public interest

and consistent with the protection of

investors and the purposes fairly

intended by the policy and provisions of

the 1940 Act.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–1286 Filed 1–18–95; 8:45 am]

BILLING CODE 8010–01–M

[Rel. No. IC–20836; File No. 812–9282]

ITT Hartford Life and Annuity

Insurance Company, et al.

January 12, 1995.

AGENCY: Securities and Exchange

Commission (‘‘the Commission’’).

ACTION: Notice of Application for

Exemption under the Investment

Company Act of 1940 (‘‘1940 Act’’).

APPLICANTS: ITT Hartford Life and

Annuity Insurance Company (‘‘ITT

Hartford’’), ITT Hartford Life and

Annuity Insurance Company Separate

Account Three (‘‘ILA Separate Account

Three’’), ITT Hartford Life and Annuity

Insurance Company Separate Account

Two (‘‘ILA Separate Account Two’’),

ITT Hartford Life and Annuity

Insurance Company/Putnam Capital

Management Trust Separate Account

Two (‘‘ILA/PCM Separate Account

Two’’), ITT Hartford Life and Annuity

Insurance Company Separate Account

One (‘‘ILA Separate Account One’’) (ILA

Separate Account Three, ILA Separate

Account Two, ILA/PCM Separate

Account Two and ILA Separate Account

one referred to collectively as the

‘‘Separate Accounts’’) and Hartford

Securities Distributors, Inc. (‘‘HSD’’).

RELEVANT 1940 ACT SECTIONS: Order

requested under Section 6(c) exempting

Applicants from Sections 26(a)(2)(C)

and 27(c)(2) of the 1940 Act.

SUMMARY OF APPLICATION: Applicants

seek an order permitting payment to ITT

Hartford of a mortality and expense risk

charge from the assets of the Separate

Accounts funding individual and group

variable annuity contracts issued by ITT

Hartford and underwritten by HSD (the

‘‘Contracts’’). The order would apply to

future separate accounts of ITT Hartford

issuing contracts that are materially

similar to the Contracts, and would

permit applicants to substitute HSD for

Hartford Equity Sales Company

(‘‘HESCO’’) as the principal underwriter

of the Contracts.

FILING DATE: The application was filed

on October 12, 1994, and amended on

November 14, 1994, December 22, 1994,

and January 5, 1994.

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 the application by writing

to the Secretary of the Commission and

serving the Applicants with a copy of

the request, either personally or by mail.

Housing requests must be received by

the Commission by 5:30 p.m. on

February 6, 1995, and should be

accompanied by proof of service on the

Applicants in the form of an affidavit or,

for lawyers, by certificate of service.

Hearing requests should state the nature

of the interest, the reason for the

request, and the issues contested.

Persons may request notification of the

date of a hearing by writing to the

Secretary of the Commission.

ADDRESSES: Secretary, Securities and

Exchange Commission, 450 5th Street,

NW., Washington, DC 20549.

Applicants, c/o Rodney J. Vessels,

Counsel, ITT Hartford Life and Annuity

Insurance Company, 200 Hopmeadow

Street, Simsbury, CT 06089.

FOR FURTHER INFORMATION CONTACT:

Joseph G. Mari, Senior Special Counsel,

or Wendy F. Friedlander, Deputy Chief,

at (202) 942–0670, Office of Insurance

Products (Division of Investment

Management).

SUPPLEMENTARY INFORMATION: The

following is a summary of the

application. The complete application is

available for a fee from the

Commission’s Public Reference Branch.

Applicants’ Representations

1. ITT Hartford is a stock life

insurance company domiciled in

Wisconsin.

2. HSD will register as a broker-dealer

under the Securities Exchange Act of

1934 and will apply to become a

member of the National Association of

Securities Dealers, Inc. (‘‘NASD’’).

3. ITT Hartford and each of the

Separate Accounts filed applications

previously, and orders were issued

granting the requested exemptions from

Sections 26(a)(2)(C) and 27(c)(2) of the