Document ID: SEC-2008-1207-0001
Agency: sec
Document Type: Notice
Title: Allianz Life Insurance Company of North America, et al.
Posted Date: 2008-09-03T04:00Z

[Federal Register: September 3, 2008 (Volume 73, Number 171)]
[Notices]               
[Page 51536-51545]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03se08-137]                         

=======================================================================
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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-28369; File No. 812-13451]

 
Allianz Life Insurance Company of North America, et al.

August 28, 2008.
AGENCY: Securities and Exchange Commission (the ``Commission'').

ACTION: Notice of application for an order of approval pursuant to 
Section 26(c) of the Investment Company Act of 1940, as amended (the 
``1940 Act''), and an order of exemption pursuant to Section 17(b) of 
the Act from Section 17(a) of the Act.

-----------------------------------------------------------------------

Applicants: Allianz Life Insurance Company of North America (``Allianz 
Life''), Allianz Life Variable Account A (``Allianz Account A''), 
Allianz Life Variable Account B (``Allianz Account B''), Allianz Life 
Insurance Company of New York (``Allianz NY'' and together with Allianz 
Life, ``Insurance Company Applicants''), and Allianz Life of NY 
Variable Account C (``Allianz Account C'', and together with Allianz 
Account A and Allianz Account B, ``Separate Accounts'' and, 
collectively with Insurance Company Applicants, ``Applicants''), and 
Allianz Variable Insurance Products Trust (``VIP Trust'' and 
collectively with Applicants, ``Section 17 Applicants'').

Summary of Application: Applicants seek an order pursuant to Section 
26(c) of the 1940 Act, approving the substitutions of certain 
securities (the ``Substitutions'') issued by certain management 
investment companies and held by Separate Accounts to support certain 
variable annuity contracts and variable life insurance contracts (the 
``Contracts'') issued by Insurance Company Applicants. Section 17 
Applicants seek an order pursuant to Section 17(b) of the 1940 Act 
exempting them to the extent necessary to permit Insurance Company 
Applicants to carry out the Substitutions.

Filing Date: The application was originally filed on November 19, 2007, 
and amended on August 27, 2008.

Hearing or Notification of Hearing: An order granting the application 
will be issued unless the Commission orders a hearing. Interested 
persons may request a hearing by writing to the Secretary of the 
Commission and serving Applicants with a copy of the request, 
personally or by mail. Hearing requests must be received by the 
Commission by 5:30 p.m. on September 18, 2008, and should be 
accompanied by proof of service on Applicants and VIP Trust in the form 
of an affidavit or, for lawyers, a certificate of service. Hearing 
requests should state the nature of the requester's interest, the 
reason for the request, and the issues contested. Persons who wish to 
be notified of a hearing may request notification by writing to the 
Secretary of the Commission. ADDRESSES: Secretary, Securities and 
Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. 
Applicants and VIP Trust, Allianz Life Insurance Company of North 
America, 5701 Golden Hills Dr., Minneapolis, MN 55416-1297; Allianz 
Life Insurance Company of New York, One Chase Manhattan Plaza, 37th 
Floor, New York, NY 10005-1423; Allianz Variable Insurance Products 
Trust, 5701 Golden Hills Dr., Minneapolis, MN 55416-1297.

FOR FURTHER INFORMATION CONTACT: Craig Ruckman, Law Clerk, at (202) 
551-6753 or Harry Eisenstein, Branch Chief, Office of Insurance 
Products, Division of Investment Management, at (202) 551-6795.

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained for a fee from 
the Public Reference Branch of the Commission, 100 F Street, NE., 
Washington, DC 20549 (202-551-8090).

[[Page 51537]]

Applicants' Representations

    1. Allianz Life is a stock life insurance company organized under 
the laws of the state of Minnesota. Allianz NY is a stock life 
insurance company organized under the laws of the state of New York.
    2. Allianz Account A is registered as a unit investment trust under 
the 1940 Act (File No. 811-04965) and is used to fund certain variable 
life insurance policies issued by Allianz Life. Allianz Account A is 
divided into a number of subaccounts, each of which invests in and 
reflects the investment performance of a specific underlying registered 
investment company or portfolio thereof (each an ``Investment 
Option''). Three variable life insurance contracts funded by Allianz 
Account A are affected by this application.
    Allianz Account B is registered as a unit investment trust under 
the 1940 Act (File No. 811-05618) and is used to fund certain variable 
annuity contracts issued by Allianz Life. Allianz Account B is divided 
into a number of subaccounts, each of which invests in and reflects the 
investment performance of a specific Investment Option. Fourteen 
variable annuity contracts funded by Allianz Account B are affected by 
this application.
    Allianz Account C is registered as a unit investment trust under 
the 1940 Act (File No. 811-05716) and is used to fund certain variable 
annuity contracts issued by Allianz NY. Allianz Account C is divided 
into a number of subaccounts, each of which invests in and reflects the 
investment performance of a specific Investment Option. Six variable 
annuity contracts funded by Allianz Account C are affected by this 
application.
    3. For purposes of the 1940 Act, Allianz Life is the depositor and 
sponsor of Allianz Account A and Allianz Account B, and Allianz NY is 
the depositor and sponsor of Allianz Account C, as those terms have 
been interpreted by the Commission with respect to variable annuity and 
variable life insurance separate accounts. Each Separate Account meets 
the definition of a ``separate account'' in Rule 0-1(e) under the 1940 
Act.
    4. The Contracts allow contractowners to allocate premium payments 
and transfer Contract value among the various subaccounts of the 
Separate Accounts. Of the 12 Contracts with effective and updated 
registration statements, eight offer all 78 Investment Options that are 
available under the Separate Accounts, two offer 74 Investment Options, 
one offers 73 Investment Options, and one offers 64 Investment Options. 
Two of these Contracts (known as Allianz Alterity and Allianz Rewards) 
have restrictions on the allocations that contractowners may make to 
the Investment Options if they select the optional Prime Plus Benefit. 
Under these Contracts, when certain risk or volatility limits are 
exceeded, allocations and transfers to certain Investment Options, 
including each of the Replaced Funds (as defined below), are limited or 
prohibited. The limits on allocations and transfers to the Replacement 
Funds (as defined below) under the Prime Plus Benefits are, and will 
be, no more restrictive than on the associated Replaced Funds.
    In most instances, up to 12 transfers may be made during each year 
free of charge (the year is measured by the date of issuance of the 
Contract). Under these Contracts, Insurance Company Applicants have 
reserved the right to charge a $25 fee (or the lesser of $25 or 2% of 
the amount transferred for certain Contracts) for each transfer in 
excess of 12 per Contract year. Since the Contracts are not designed 
for professional market timing organizations, or other persons using 
programmed, large, or frequent transfers, Insurance Company Applicants 
have reserved the right to restrict transfer activity that they 
determine to be excessive or inappropriate.
    5. Under the Contracts, Insurance Company Applicants reserve the 
right, subject to regulatory approval, to substitute one of the 
Investment Options with another Investment Option after appropriate 
notice. Moreover, the Contracts permit Insurance Company Applicants to 
limit allocation of purchase payments to one or more subaccounts that 
invest in an Investment Option. The prospectuses or statements of 
additional information for the Contracts also contain appropriate 
disclosure of these rights. Thus, subject to regulatory approval, the 
Contracts permit Insurance Company Applicants to stop accepting 
purchase payments into one or more Investment Options and/or to 
substitute the shares representing an Investment Option held in a 
subaccount for the shares representing another Investment Option.
    6. The Contracts are variable annuity contracts and variable life 
insurance policies. Allianz Life currently issues individual deferred 
variable annuity contracts and has previously issued immediate variable 
annuity contracts and variable life insurance policies. Allianz NY 
issues individual deferred variable annuity contracts offered for sale 
in New York.
    7. Currently, Allianz Life has the following registration 
statements which are effective and updated with the Commission for 
Contracts sponsored by Allianz Account B that offer the Replaced Funds 
as Investment Options:

----------------------------------------------------------------------------------------------------------------
        Separate account           Registration No.      Contract name               Type of contract
----------------------------------------------------------------------------------------------------------------
Allianz Account B...............           333-82329  Allianz Alterity..  Variable Deferred Annuity.
Allianz Account B...............           333-90260  Allianz High Five.  Variable Deferred Annuity.
Allianz Account B...............          333-111049  Allianz High Five   Variable Deferred Annuity.
                                                       Bonus.
Allianz Account B...............          333-120181  Allianz High Five   Variable Deferred Annuity.
                                                       L.
Allianz Account B...............           333-95729  Allianz Rewards...  Variable Deferred Annuity.
Allianz Account B...............            33-23035  Valuemark II......  Variable Deferred Annuity.
Allianz Account B...............            33-72046  Valuemark III.....  Variable Deferred Annuity.
Allianz Account B...............           333-06709  Valuemark IV......  Variable Deferred Annuity.
----------------------------------------------------------------------------------------------------------------

    8. In addition, Allianz Life has the following registration 
statements that are effective, but no longer updated, for older 
Contracts sponsored by Allianz Account A and Allianz Account B that are 
no longer offered for sale and offer the Replaced Funds as Investment 
Options:

----------------------------------------------------------------------------------------------------------------
       Separate account          Registration No.     Contract name                 Type of contract
----------------------------------------------------------------------------------------------------------------
Allianz Account B.............          333-126217  Allianz Custom     Variable Deferred Annuity.
                                                     Income.
Allianz Account B.............          333-134267  Allianz Elite....  Variable Deferred Annuity.

[[Page 51538]]

Allianz Account A.............            33-11158  Allianz ValueLife  Flexible Premium Variable Universal Life.
Allianz Account B.............           333-63719  USAllianz Charter  Variable Deferred Annuity.
Allianz Account B.............          333-101812  USAllianz Charter  Variable Deferred Annuity.
                                                     II.
Allianz Account B.............           333-47886  USAllianz          Variable Deferred Annuity.
                                                     Dimensions.
Allianz Account A.............           333-60206  USAllianz          Flexible Premium Variable Universal Life.
                                                     LifeFund.
Allianz Account B.............            33-76190  Valuemark Income   Variable Immediate Annuity.
                                                     Plus.
Allianz Account A.............            33-15464  Valuemark Life...  Single Premium Variable Life.
----------------------------------------------------------------------------------------------------------------

    9. Currently Allianz NY has the following registration statements 
which are effective and updated with the Commission for Contracts 
sponsored by Allianz Account C that offer the Replaced Funds as 
Investment Options:

----------------------------------------------------------------------------------------------------------------
        Separate account           Registration No.      Contract name               Type of contract
----------------------------------------------------------------------------------------------------------------
Allianz Account C...............           333-19699  Allianz Advantage   Variable Deferred Annuity.
                                                       NY.
Allianz Account C...............          333-105274  Allianz Charter II  Variable Deferred Annuity.
                                                       NY.
Allianz Account C...............          333-124767  Allianz High Five   Variable Deferred Annuity.
                                                       NY.
Allianz Account C...............           333-75718  Allianz             Variable Deferred Annuity.
                                                       Opportunity NY.
----------------------------------------------------------------------------------------------------------------

    10. In addition, Allianz NY has the following registration 
statements that are effective, but no longer updated, for older 
Contracts sponsored by Allianz Account C that are no longer offered for 
sale and offer the Replaced Funds as Investment Options:

----------------------------------------------------------------------------------------------------------------
        Separate account           Registration No.      Contract name               Type of contract
----------------------------------------------------------------------------------------------------------------
Allianz Account C...............            33-26646  Valuemark II NY...  Variable Deferred Annuity.
Allianz Account C...............           333-19699  Valuemark IV NY...  Variable Deferred Annuity.
----------------------------------------------------------------------------------------------------------------

    11. Applicants propose to substitute certain classes of shares of 
the AZL Jennison 20/20 Focus Fund, AZL S&P 500 Index Fund, and AZL 
Small Cap Stock Index Fund (each a ``Replacement Fund'' and 
collectively the ``Replacement Funds'') for certain classes of shares 
of the corresponding funds listed in the table below (each a ``Replaced 
Fund'' and collectively the ``Replaced Funds'') currently held by the 
Separate Accounts.

----------------------------------------------------------------------------------------------------------------
                                                              Replaced fund (adviser/
  Replacement fund (subadviser)        Share class(es)              subadviser)             Share class(es)
----------------------------------------------------------------------------------------------------------------
AZL Jennison 20/20 Focus Fund     Class 2..................  Jennison 20/20 Focus      Class 2.
 (Jennison Associates LLC).                                   Portfolio (Prudential
                                                              Investments LLC/
                                                              Jennison Associates
                                                              LLC).
AZL S&P 500 Index Fund (The       Class 1..................  Dreyfus Stock Index       Initial Service.
 Dreyfus Corporation).            Class 2..................   Fund, Inc. (The Dreyfus
                                                              Corporation).
AZL Small Cap Stock Index Fund    Class 2..................  Dreyfus Investment        Service.
 (The Dreyfus Corporation).                                   Portfolios Small Cap
                                                              Stock Index Portfolio
                                                              (The Dreyfus
                                                              Corporation).
----------------------------------------------------------------------------------------------------------------

    12. Each Replacement Fund is a series of the VIP Trust, a Delaware 
business trust. The VIP Trust is registered as an open-end management 
investment company under the 1940 Act (File No. 811-9491) and its 
shares are registered as securities under the Securities Act of 1933, 
as amended (the ``1933 Act'') (File No. 333-83423).
    13. Each of the Replacement Funds, as well as all other funds 
offered by the VIP Trust, is managed by Allianz Investment Management 
LLC (``AZIM''), a wholly owned subsidiary of Allianz Life. AZIM is 
registered as an investment adviser with the Commission pursuant to the 
Investment Advisers Act of 1940 (File No. 801-60167).
    14. The AZL Jennison 20/20 Focus Fund is assessed a 12b-1 fee at an 
annual rate of 0.25% of average daily net assets, which is the maximum 
12b-1 fee permitted under its distribution plan. Class 1 shares of the 
AZL S&P 500 Index Fund are not assessed a 12b-1 fee, while Class 2 
shares of the AZL S&P 500 Index Fund are assessed a 12b-1 fee at an 
annual rate of 0.25% of average daily net assets attributable to Class 
2 shares, which is the maximum 12b-1 fee permitted under its 
distribution plan. The AZL Small Cap Stock Index Fund is assessed a 
12b-1 fee at an annual rate of 0.25% of average daily net assets, which 
is the maximum 12b-1 fee permitted under its distribution plan.
    15. Under the terms of a ``manager of managers'' exemptive order 
issued by the Commission pursuant to Section 6(c) of the 1940 Act, 
Investment Company Act Release No. 25734 (September 17, 2002), AZIM 
selects and manages subadvisers for the various series of the VIP 
Trust, subject to the oversight of the Board of Trustees of the VIP 
Trust, without obtaining shareholder approval (the ``Manager of 
Managers Order''). The relief granted in the Manager of Managers Order 
extends to all of the Replacement Funds. The Replacement Funds are 
offered to contractowners via prospectuses containing disclosure (1) 
describing the existence, substance, and effect of the Manager of 
Managers Order; (2) holding the Replacement Funds out to the public as 
employing the management structure described in the application for the 
Manager of Managers Order; and (3) explaining that AZIM has the 
ultimate responsibility (subject to oversight by the Board of Trustees 
of the

[[Page 51539]]

VIP Trust) to oversee the subadvisers and recommend their hiring, 
termination, and replacement. The Replacement Funds' prospectuses will 
be provided to each affected contractowner prior to the Substitutions.
    16. The Dreyfus Investment Portfolios Small Cap Stock Index 
Portfolio (``Dreyfus IP Small Cap Stock Index Portfolio'') is a series 
of Dreyfus Investment Portfolios (``Dreyfus IP''). Service shares of 
the Dreyfus IP Small Cap Stock Index Portfolio are assessed a 12b-1 fee 
at an annual rate of 0.25% of average daily net assets, which is the 
maximum 12b-1 fee permitted under its distribution plan.
    Initial shares of the Dreyfus Stock Index Fund, Inc. are not 
assessed a 12b-1 fee, while Service shares of the Dreyfus Stock Index 
Fund, Inc. are assessed a 12b-1 fee at an annual rate of 0.25% of 
average daily net assets attributable to Service shares, which is the 
maximum 12b-1 fee permitted under its distribution plan. The Jennison 
20/20 Focus Portfolio is a series of the Prudential Series Fund (the 
``Prudential Series''). Class 2 shares are assessed a 12b-1 fee at an 
annual rate of 0.25% of average daily net assets, which is the maximum 
12b-1 fee permitted under its distribution plan.
    17. The following chart summarizes the advisers, investment 
objective, principal investment strategies, principal investment risks, 
and asset size of the Jennison 20/20 Focus Portfolio and the AZL 
Jennison 20/20 Focus Fund, as stated in their respective prospectuses 
and statements of additional information.

------------------------------------------------------------------------
                                  Replaced fund       Replacement fund
------------------------------------------------------------------------
Fund Name...................  Jennison 20/20 Focus  AZL Jennison 20/20
                               Portfolio.            Focus Fund.
------------------------------------------------------------------------
Adviser/Subadviser..........  Prudential            AZIM/Jennison
                               Investments LLC/      Associates LLC.
                               Jennison Associates
                               LLC.
------------------------------------------------------------------------
Investment Objective........  Long-term growth of   The investment
                               capital.              objective of the
                                                     AZL Jennison 20/20
                                                     Focus Fund is long-
                                                     term growth of
                                                     capital. This means
                                                     that the Subadviser
                                                     seeks investments
                                                     whose prices will
                                                     increase over
                                                     several years.
------------------------------------------------------------------------
Principal Investment          Invest in up to 40    The Fund normally
 Strategies.                   equity and equity-    invests at least
                               related securities    80% of its total
                               of U.S. companies     assets in
                               that are selected     approximately 40
                               by the Portfolio's    (which may range up
                               two portfolio         to 45) equity and
                               managers (up to 20    equity-related
                               by the value and 20   securities of
                               by the growth         companies that the
                               portfolio manager)    Subadviser believes
                               as having strong      have strong capital
                               capital               appreciation
                               appreciation          potential. The
                               potential.            Fund's strategy is
                                                     to combine the
                                                     efforts of two
                                                     portfolio managers
                                                     with different
                                                     styles (value and
                                                     growth).
------------------------------------------------------------------------
Principal Risks.............   Company       Market
                               risk.                 Risk.
                               Derivatives   Selection
                               risk.                 Risk.
                               Foreign       Focused
                               investment risk.      Investment Risk.
                               [cir] Currency        Value
                               risk.                 Stocks Risk.
                               [cir] Emerging        Growth
                               market risk.          Stocks Risk.
                               [cir] Foreign         Initial
                               market risk.          Public Offerings
                                                     Risk.
                               [cir] Information     Frequent
                               risk.                 Trading.
                               [cir] Liquidity       Foreign
                               risk.                 Risk.
                               [cir] Political       Convertible
                               developments.         Securities Risk.
                               [cir] Political       Derivatives
                               risk.                 Risk.
                               [cir] Regulatory      Real Estate
                               risk.                 Investments Risk.
                               Leveraging    Credit
                               risk.                 Risk.
                               Management    Interest
                               risk.                 Rate Risk.
                               Market        Liquidity
                               risk.                 Risk.
------------------------------------------------------------------------
Fund Asset Level as of 12/31/ $379.9 million \1\..  $383.2 million.
 07.
------------------------------------------------------------------------
\1\ Assets held in the Separate Accounts on December 31, 2007, were
  $112.7 million.

    18. The following chart compares the management fees and the total 
operating expenses (before and after any waivers and reimbursements) 
for the year ended December 31, 2007, expressed as an annual percentage 
of average daily net assets, of the Jennison 20/20 Focus Portfolio and 
the AZL Jennison 20/20 Focus Fund. As noted below, the Net Total 
Operating Expenses are less for the AZL Jennison 20/20 Focus Fund than 
for the Jennison 20/20 Focus Portfolio.

                                                  [In percent]
----------------------------------------------------------------------------------------------------------------
                                            Replaced fund                           Replacement fund
----------------------------------------------------------------------------------------------------------------
Fund Name...................  Jennison 20/20 Focus Portfolio            AZL Jennison 20/20 Focus Fund
Management Fee..............  0.75                                      0.77
12b-1 Fees..................  0.25                                      0.25
Other Expenses..............  0.22                                      0.10
Acquired Fund Fees &          0.00                                      0.00
 Expenses.
Total Annual Fund Operating   1.22                                      1.12
 Expenses.

[[Page 51540]]

Fee Waiver..................  0.00                                      0.00
Net Annual Fund Operating     1.22                                      1.12
 Expenses.
----------------------------------------------------------------------------------------------------------------

    19. The following chart summarizes the advisers, investment 
objective, principal investment strategies, principal investment risks, 
and asset size of the Dreyfus Stock Index Fund, Inc., and the AZL S&P 
500 Index Fund, as stated in their respective prospectuses and 
statements of additional information.

------------------------------------------------------------------------
                                  Replaced fund       Replacement fund
------------------------------------------------------------------------
Fund Name...................  Dreyfus Stock Index   AZL S&P 500 Index
                               Fund, Inc.            Fund.
------------------------------------------------------------------------
Adviser/Subadviser..........  The Dreyfus           AZIM/The Dreyfus
                               Corporation.          Corporation.
------------------------------------------------------------------------
Investment Objective........  The fund seeks to     The AZL S&P 500
                               match the total       Index Fund seeks to
                               return of the         match the total
                               Standard & Poor's     return of the
                               500 Composite Stock   Standard & Poor's
                               Price Index.          500 Composite Stock
                                                     Price Index (S&P
                                                     500 [supreg]).
------------------------------------------------------------------------
Principal Investment          To pursue this goal,  To pursue its goal
 Strategies.                   the fund generally    the Fund's
                               invests in all 500    subadviser, The
                               stocks in the S&P     Dreyfus Corporation
                               500[supreg] in        (``Dreyfus''),
                               proportion to their   normally invests in
                               weighting in the      all 500 stocks in
                               index.                the S&P 500[supreg]
                                                     in proportion to
                                                     their weighting in
                                                     the index.
------------------------------------------------------------------------
Principal Risks.............   Market        Market
                               Risk.                 Risk.
                               Issuer        Indexing
                               Risk.                 Strategy Risk.
                               Indexing      Insurer
                               Strategy Risk.        Risk.
                               Derivatives   Derivatives
                               Risk.                 Risk.
                                                     License
                                                     Termination Risk.
------------------------------------------------------------------------
Fund Asset Level as of 12/31/ $3.2 billion \2\....  $28.0 million.\3\
 07.
------------------------------------------------------------------------

    20. The following chart compares the management fees and the total 
operating expenses (before and after any waivers and reimbursements) 
for the year ended December 31, 2007, expressed as an annual percentage 
of average daily net assets, of the Dreyfus Stock Index Fund, Inc. and 
the AZL S&P 500 Index Fund. As noted below, an expense cap will be in 
place for the AZL S&P 500 Index Fund for two years from the date of the 
Substitution so that the Net Total Operating Expenses for the AZL S&P 
500 Index Fund are expected to be no greater than for the Dreyfus Stock 
Index Fund, Inc.

                                                  [In percent]
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
                                               Replaced fund
                                             Replacement fund
                                 -------------------------------------------------------------------------------
Fund Name.......................      Dreyfus Stock Index Fund, Inc.
                                          AZL S&P 500 Index Fund
                                 -------------------------------------------------------------------------------
                                  Initial Class       Service Class       Class 1             Class 2
----------------------------------------------------------------------------------------------------------------
Management Fee..................  0.25                0.25                0.17                0.17
12b-1 Fees......................  0.00                0.25                0.00                0.25
Other Expenses..................  0.02                0.02                0.31                0.31
Acquired Fund Fees & Expenses...  0.00                0.00                0.00                0.00
                                 -------------------------------------------------------------------------------
    Total Annual Fund Operating   0.27                0.52                0.48                0.73
     Expenses.
Fee Waiver......................  0.00                0.00                0.24                0.24
                                 -------------------------------------------------------------------------------
    Net Annual Fund Operating     0.27                0.52                *0.24               * 0.49
     Expenses.
----------------------------------------------------------------------------------------------------------------
* Net Annual Fund Operating Expenses will be capped by the Fund's manager at 0.24% and 0.49%, net of Acquired
  Fund Fees and Expenses, for Class 1 and Class 2 shares respectively for two years from the date of the
  Substitution.

[[Page 51541]]

    21. The following chart summarizes the advisers, investment 
objective, principal investment strategies, principal investment risks, 
and asset size of the Dreyfus IP Small Cap Stock Index Portfolio and 
the AZL Small Cap Stock Index Fund, as stated in their respective 
prospectuses and statements of additional information.
---------------------------------------------------------------------------

    \2\ Includes $2.7 billion for initial shares and $532.7 million 
for Service shares. Assets held in the Separate Accounts on December 
31, 2007 were $20.1 million for Initial shares, $315.0 million for 
Service shares.
    \3\ Class 1 and Class 2 combined.

------------------------------------------------------------------------
                                  Replaced fund       Replacement fund
------------------------------------------------------------------------
Fund Name...................  Dreyfus IP Small Cap  AZL Small Cap Stock
                               Stock Index           Index Fund.
                               Portfolio.
------------------------------------------------------------------------
Adviser/Subadviser..........  The Dreyfus           AZIM/The Dreyfus
                               Corporation.          Corporation.
------------------------------------------------------------------------
Investment Objective........  The portfolio seeks   The AZL Small Cap
                               to match the          Stock Index Fund
                               performance of the    seeks to match the
                               Standard & Poor's     performance of the
                               (S&P) SmallCap 600    Standard & Poor's
                               Index[supreg].        (S&P) Small Cap 600
                                                     Index[supreg].
------------------------------------------------------------------------
Principal Investment          To pursue this goal,  To pursue this goal
 Strategies.                   the portfolio         the Fund's
                               invests in a          subadviser, The
                               representative        Dreyfus Corporation
                               sample of stocks      (``Dreyfus''),
                               included in the S&P   invests in a
                               SmallCap 600 Index,   representative
                               and in futures        sample of stocks
                               whose performance     included in the S&P
                               is related to the     SmallCap 600
                               index, rather than    Index[supreg] and
                               attempt to            in futures whose
                               replicate the index.  performance is
                                                     related to the
                                                     index, rather than
                                                     attempting to
                                                     replicate the
                                                     index.
------------------------------------------------------------------------
Principal Risks.............   Market        Market
                               Risk.                 Risk.
                               Issuer        Indexing
                               Risk.                 Strategy Risk.
                               Small and    
                               midsize company       Capitalization
                               Risk.                 Risk.
                               Indexing      Issuer
                               Strategy Risk.        Risk.
                               Derivatives   Derivatives
                               Risk.                 Risk.
                                                     License
                                                     Termination Risk.
------------------------------------------------------------------------
Fund Asset Level as of 12/31/ $373.4 million \4\..  $22.1 million. \5\
 07.
------------------------------------------------------------------------

    22. The following chart compares the management fees and the total 
operating expenses (before and after any waivers and reimbursements) 
for the year ended December 31, 2007, expressed as an annual percentage 
of average daily net assets, of the Dreyfus IP Small Cap Stock Index 
Portfolio and the AZL Small Cap Stock Index Fund. As noted below, an 
expense cap will be in place for the AZL Small Cap Stock Index for two 
years from the date of the Substitution so that the Net Total Operating 
Expenses for the AZL Small Cap Stock Index Fund are expected to be no 
greater than for the Dreyfus IP Small Cap Stock Index Portfolio.
---------------------------------------------------------------------------

    \4\ Assets held in Separate Accounts on December 31, 2007 were 
$227.1 million.
    \5\ The fund commenced operations on May 1, 2007.

                              [In percent]
------------------------------------------------------------------------
                                  Replaced fund       Replacement fund
------------------------------------------------------------------------
Fund Name...................  Dreyfus IP Small Cap  AZL Small Cap Stock
                               Stock Index           Index Fund
                               Portfolio
Management Fee..............  0.35                  0.26
12b-1 Fees..................  0.25                  0.25
Other Expenses..............  0.01                  0.36
Acquired Fund Fees &          0.00                  0.00
 Expenses.
Total Annual Fund Operating   0.61                  0.87
 Expenses.
Fee Waiver..................  0.00                  0.29
Net Annual Fund Operating     0.61                  0.58
 Expenses.
------------------------------------------------------------------------

    23. As a result of the Substitutions, the number of Investment 
Options under each Contract will either not be decreased, or, in those 
cases where the number of Investment Options is being reduced, continue 
to offer a significant number of alternative Investment Options. 
Specifically, the number of Investment Options is currently expected to 
range in number from 29 to 75 after the Substitutions versus 29 to 78 
before the Substitutions.
    24. At the close of business on the day of the Substitution (the 
``Substitution Date''), Insurance Company Applicants will each redeem 
shares of the Replaced Funds held by their Separate Accounts in kind 
and apply the proceeds of such redemptions to the purchase shares of 
the corresponding Replacement Funds. Thus, after the Substitutions, 
each subaccount of the Separate Accounts previously holding shares of a 
Replaced Fund will hold shares of the corresponding Replacement Fund.
    25. Redemption requests and purchase orders will be placed 
simultaneously so that redemption of Replaced Fund shares and purchase 
of Replacement Fund shares will both occur at the price for such shares 
computed as of the close of business on the Substitution Date in a 
manner consistent with Rule 22c-1 under the 1940 Act. As a result, the 
full net asset value of the Replaced Fund shares held by the Separate 
Accounts will be reflected in the contractowners' Contract values 
following the Substitutions, without reduction for brokerage or other 
such fees or charges. All expenses incurred in connection with the 
Substitutions, including legal, accounting, transactional, and other 
fees and expenses, including brokerage

[[Page 51542]]

commissions, will be paid by Insurance Company Applicants, or the 
manager of the Replacement Funds. Accordingly, Contract value 
attributable to contractowners then invested in the Replaced Funds will 
remain fully invested at all times, and the Substitutions will take 
place at relative net asset value with no change in the amount of any 
contractowner's Contract value, death benefit, or in the dollar value 
of his or her investments in the applicable Separate Account.
    26. Affected contractowners will not incur any fees or charges in 
connection with the Substitutions so that the net asset value of 
redeemed shares of the Replaced Funds held by the Separate Accounts 
will be reflected in the contractowners' Contract values following the 
Substitutions. Moreover, neither the obligations of the respective 
Insurance Company Applicants under the Contracts nor the rights of 
contractowners will be altered in any way by the Substitutions. The 
Substitutions will not impose any tax liability or have any adverse tax 
consequences on contractowners. The Substitutions will not cause 
Contract fees and charges currently being paid by existing owners of 
Contracts to be greater after the Substitutions than they were before 
the Substitutions. For a period of at least 30 days following the 
Substitutions, Insurance Company Applicants will not exercise any right 
it may have under the Contracts to impose restrictions on transfers 
except pursuant to any Investment Option allocation restrictions under 
the Contracts.6
    27. From the date that notice of the Substitutions was provided to 
affected contractowners by means of a prospectus supplement (the ``Pre-
Substitution Supplement'') through the date 30 days after the 
Substitution (the ``Free Transfer Period''), the respective Insurance 
Company Applicants will allow the affected contractowners to make one 
transfer of Contract value held in each subaccount investing in the 
Replaced Funds (before the Substitutions) or Replacement Fund (after 
the Substitutions) to one or more Investment Options available pursuant 
to the Contracts without charge and without assessing transfer fees. 
Such a transfer also will not be counted as a transfer request under 
any contractual provisions of the Contracts that limit the number of 
transfers that may be made without charge.
    28. Under the Manager of Managers Order, subject to the approval of 
the Board of Trustees of the VIP Trust, AZIM may retain one or more 
subadvisers for any fund of the VIP Trust without the approval of 
shareholders of the fund. However, after the Substitution Date, 
Insurance Company Applicants represent that AZIM will not retain any 
new subadviser for the AZL S&P 500 Index Fund and the AZL Small Cap 
Stock Index Fund, or otherwise rely on the Manager of Managers Order in 
connection with AZL S&P 500 Index Fund and the AZL Small Cap Stock 
Index Fund, without first obtaining shareholder approval of either: (1) 
the new subadviser, or (2) the fund's ability to rely on the Manager of 
Managers Order.
    29. Notice of the Substitutions and Free Transfer Period has been 
given to all affected contractowners by means of the Pre-Substitution 
Supplement for each of the Contracts stating that Applicants have filed 
the application and seek approval of the Substitutions. The Pre-
Substitution Supplement sets forth the anticipated Substitution Date 
and advises affected contractowners that Contract values allocated to 
subaccounts investing in shares of the Replaced Funds will be 
transferred to subaccounts investing in shares of the Replacement 
Funds, without charge (including sales charges or surrender charges) 
and without counting toward the number of transfers that may be 
permitted without charge, on the Substitution Date. The Pre-
Substitution Supplement states that, during the Free Transfer Period, 
affected contractowners may make one transfer of Contract value from 
each subaccount investing in a Replaced Fund (before the Substitutions) 
or a Replacement Fund (after the Substitutions) to one or more other 
subaccount(s), subject to any Investment Option allocation restrictions 
under their Contract, without charge and without the transfer counting 
against any limitations on transfers. Further, prior to the 
Substitutions, all affected contractowners will receive a copy of the 
most recent prospectus for the Replacement Funds.
    30. Within five days following the Substitutions, Insurance Company 
Applicants will send a written notice to affected contractowners 
stating that the Substitutions were carried out and reiterating the 
information set forth in the Pre-Substitution Supplement.
    31. For those who were contractowners on the date of the proposed 
Substitutions, Insurance Company Applicants will reimburse, on the last 
business day of each fiscal period (not to exceed a fiscal quarter) 
during the 24 months following the Substitution Date, those 
contractowners whose subaccount invests in any Replacement Fund such 
that the sum of such Replacement Fund's (a) operating expenses (taking 
into account fee waivers and expense reimbursements), net of any 
acquired fund fees and expenses, and (b) asset-based fees and charges 
for the Contracts for such period will not exceed, on an annualized 
basis, the sum of the corresponding Replaced Fund's operating expenses 
(taking into account any fee waiver or expense reimbursement) and 
subaccount expenses for the fiscal year ended December 31, 2007. 
Thereafter, expenses for the Replacement Funds will vary from year to 
year and may exceed those of the corresponding Replaced Funds.

Applicants' Legal Analysis

    1. Applicants represent that Section 26(c) of the 1940 Act makes it 
unlawful for any depositor or trustee of a registered unit investment 
trust holding the security of a single issuer to substitute another 
security for such security unless the Commission approves the 
substitution. Applicants note that the Commission will approve such a 
substitution if the evidence establishes that it is consistent with the 
protection of investors and the purposes fairly intended by the policy 
and provisions of the 1940 Act.
    2. Applicants note the legislative history makes clear that 
Congress intended Section 26(c) of the 1940 Act to provide the 
Commission scrutiny of proposed substitutions that could otherwise, 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 proceeds of redemption, or both.
    3. Applicants assert that Section 26(c) of the 1940 Act would not 
appear to have been designed to prohibit transactions like the 
Substitutions, in which a number of customer protections are provided, 
including the fact that the applicable unit investment trusts (the 
Separate Accounts) offer in excess of 63 different Investment Options.
    4. Applicants claim that the purposes, terms, and conditions of the 
Substitutions are consistent with the principles and purposes of 
Section 26(c) of the 1940 Act and do not entail any of the abuses that 
Section 26(c) of the 1940 Act is designed to prevent. Contractowners 
will not be assessed charges in connection with the Substitutions and 
their annual fund net total operating expenses are expected to remain 
the same or decrease. In addition, to the extent a contractowner does 
not wish to participate in the

[[Page 51543]]

Substitutions, he or she is free to make one transfer to any other 
option available under the relevant Contract at any time prior to the 
date of the Substitutions or during the 30-day period following the 
date of the Substitutions without any transfer fee and without that 
transfer counting as a transfer request under any contractual 
provisions of the Contracts that limit the number of transfers that may 
be made without charge. Moreover, the Contracts have features that 
Applicants believe provide adequate protection to contractowners. These 
features include:
    (1) A significant number of different Investment Options;
    (2) Investment Options that are reasonably diversified;
    (3) Investment Options that are reasonably seasoned;
    (4) Reasonable transferability between Investment Options;
    (5) Investment choices that include an option that is intended to 
reduce or eliminate fluctuation of principal; and
    (6) Reasonable liquidity in the form of free partial withdrawal 
rights.
    5. In addition, contractowners will be substituted into Replacement 
Funds whose investment objectives, principal investment policies, and 
risks Applicants believe will be substantially similar or virtually 
identical to those of the corresponding Replaced Funds, with net total 
operating expenses that are anticipated to be equal to or less than 
those of their corresponding Replaced Funds. Like the Replaced Funds 
which are not assessed a 12b-1 fee, their corresponding Replacement 
Funds will not be assessed a 12b-1 fee.
    6. In addition to substantially similar or virtually identical 
investment objectives, principal investment policies, and risks, as 
well as anticipated equal or lower net total operating expenses, 
Applicants maintain that the types of investment advisory and 
administrative services that will be provided to the Replacement Funds 
by their subadvisers will be comparable to the types of investment 
advisory and administrative services currently provided to the Replaced 
Funds by their respective investment advisers. Contractowners who 
become beneficial owners of the Replacement Funds as a result of the 
proposed Substitutions will enjoy continuity of their asset manager. 
These Replacement Funds will be managed by AZIM, but the asset 
management activity will be handled by the subadviser that currently 
manages the corresponding Replaced Fund.
    7. Moreover, because the Replacement Funds operate pursuant to the 
Manager of Managers Order, Applicants believe that the proposed 
Substitutions will provide protection to contractowners by giving AZIM 
the flexibility to change the subadvisers of the Replacement Funds 
should such a change become warranted or advisable. Thus, Applicants 
will provide contractowners with investment vehicles following the 
Substitutions that will be substantially similar to those offered prior 
to the Substitutions.
    8. In further support of their contention that the Substitutions do 
not present the type of costly forced redemption or other harms that 
Section 26(c) of the 1940 Act was intended to guard against and are 
consistent with the protection of investors and the purposes fairly 
intended by the 1940 Act, Applicants note that the Substitutions will 
be subject to the following terms and conditions:
    (1) A contractowner may request that his or her Contract value be 
reallocated to another Investment Option, subject to any Investment 
Option allocation restrictions under their Contract, at any time during 
the Free Transfer Period without charge. The Free Transfer Period 
provides sufficient time for contractowners to reconsider their 
Investment Options;
    (2) The Substitutions will be at net asset value of the respective 
shares, without the imposition of any transfer, brokerage or similar 
charge;
    (3) Neither the contractowners, the Replaced Funds, nor the 
Replacement Funds will bear any costs of the Substitutions, and all 
legal, accounting, and transactional costs and any brokerage or other 
costs incurred in the Substitutions will be paid by Insurance Company 
Applicants or the managers to the Replacement Funds, and accordingly, 
the Substitutions will have no impact on the contractowners' Contract 
values;
    (4) The Substitutions will in no way alter the contractual 
obligations of Insurance Company Applicants or the rights and 
privileges of contractowners under the Contracts; and
    (5) The Substitutions will in no way alter the tax benefits to 
contractowners.
    9. Applicants request an order of the Commission pursuant to 
Section 26(c) of the 1940 Act approving the Substitutions on the terms 
set forth in this Application. Applicants believe, for all of the 
reasons stated above, that each Substitution is consistent with the 
protection of investors and the purposes fairly intended by the policy 
and provisions of the 1940 Act.
    10. Section 17 Applicants also request that the Commission issue an 
order pursuant to Section 17(b) of the 1940 Act exempting them from 
Section 17(a) of the 1940 Act to the extent necessary to permit 
Insurance Company Applicants to carry out the Substitutions by 
redeeming shares of the Replaced Funds in kind and using the proceeds 
to purchase shares of the Replacement Funds.
    11. Section 17(a)(1) of the 1940 Act prohibits any affiliated 
person of a registered investment company, or an affiliated person of 
an affiliated person, acting as principal, from selling any security or 
other property to such registered investment company. Section 17(a)(2) 
of the 1940 Act prohibits any of the persons described above, acting as 
principal, from purchasing any security or other property from such 
registered investment company. Section 2(a)(3) of the 1940 Act defines 
the term ``affiliated person'' of another person in relevant part as:

    (A) Any person directly or indirectly owning, controlling, or 
holding with power to vote, five per centum or more of the 
outstanding voting securities of such other person; (B) any person 
five per centum or more of whose outstanding voting securities are 
directly or indirectly owned, controlled, or held with power to 
vote, by such other person; (C) any person directly or indirectly 
controlling, controlled by, or under common control with, such other 
person; (D) any officer, director, partner, copartner, or employee 
of such other person; (E) if such other person is an investment 
company, any investment adviser thereof or any member of an advisory 
board thereof; and (F) if such other person is an unincorporated 
investment company not having a board of directors, the depositor 
thereof.

    12. Applicants may be considered affiliates of each of the 
Replacement Funds based upon the definition of ``affiliated person'' in 
Section 2(a)(3) of the 1940 Act. Shares of the funds of the VIP Trust 
are held solely by Separate Accounts. Because shares held by a separate 
account of an insurance company are legally owned by the insurance 
company, Insurance Company Applicants, and their affiliates 
collectively, own of record all of the shares of the funds of the VIP 
Trust, including the Replacement Funds. Further, AZIM, an affiliated 
person of the VIP Trust by virtue of Section 2(a)(3) (E) of the 1940 
Act, is a wholly owned subsidiary of Allianz Life. For these reasons, 
the VIP Trust and the Replacement Funds are arguably under the control 
of Insurance Company Applicants notwithstanding the fact that 
contractowners may be considered the beneficial owners of those shares 
held in the Separate Accounts. If the VIP Trust and the Replacement 
Funds are under the control of Insurance Company Applicants, then 
Insurance Company Applicants, or any person controlling

[[Page 51544]]

Insurance Company Applicants, or any person under common control with 
Insurance Company Applicants, is an affiliated person of the VIP Trust 
and the Replacement Funds. Similarly, if the VIP Trust and the 
Replacement Funds are under the control of Insurance Company 
Applicants, then the VIP Trust and the Replacement Funds are affiliated 
persons of Insurance Company Applicants, and of any persons that 
control Insurance Company Applicants or are under common control with 
Insurance Company Applicants.
    At the close of business on the Substitution Date, Insurance 
Company Applicants will redeem shares of the Replaced Funds either in 
kind or in cash and use the proceeds of such redemptions to purchase 
shares of the corresponding Replacement Funds, with each subaccount of 
the applicable Separate Account investing the proceeds of its 
redemption from the Replaced Funds in the applicable Replacement Funds. 
Thus, the proposed transactions may involve a transfer of portfolio 
securities by the Replaced Funds to Insurance Company Applicants; 
immediately thereafter, Insurance Company Applicants would purchase 
shares of the Replacement Funds with the portfolio securities received 
from the Replaced Funds. This aspect of the Substitutions may be deemed 
to involve one or more sales by Insurance Company Applicants of 
securities or other property to the Replacement Funds. Accordingly, 
this aspect of the Substitutions could be viewed as being prohibited by 
Section 17(a) of the 1940 Act. Accordingly, Section 17 Applicants seek 
relief from Section 17(a) of the 1940 Act for the in-kind purchases and 
sales of the Replacement Fund shares.
    13. Section 17 Applicants assert that any in-kind redemptions and 
purchases for purposes of the Substitutions will be effected in a 
manner consistent with the investment objectives and policies of the 
Replacement Funds. Subject to the oversight of AZIM, the subadvisers of 
each of the Replacement Funds will review the securities holdings of 
their corresponding Replaced Fund and determine which of the Replaced 
Fund holdings would be suitable investments for the corresponding 
Replacement Fund in the overall context of that Replacement Fund's 
investment objective and policies and consistent with their management 
of the Replacement Fund, and will accept only those securities as 
consideration for shares that it would have acquired for each such fund 
in a cash transaction. Section 17 Applicants submit that these 
portfolio securities will be of the type and quality that the 
Replacement Funds would each have acquired with the proceeds from share 
sales had the shares been sold for cash.
    14. Section 17 Applicants state that any securities to be paid out 
as redemption proceeds and subsequently contributed to the Replacement 
Funds to effect the contemplated in-kind purchases of shares will be 
valued in accordance with the normal valuation procedures of the 
redeeming and purchasing portfolios. The redeeming and purchasing 
values will be the same. Consistent with Rule 17a-7(d) under the 1940 
Act, no brokerage commissions, fees, or other remuneration will be paid 
by the Replaced Funds or the Replacement Funds in connection with the 
in-kind transactions. If AZIM declines to accept particular portfolio 
securities of any of the Replaced Funds for purchase of in-kind shares 
of any of the Replacement Funds, those positions will be liquidated by 
the applicable Replaced Fund, and shares of the corresponding 
Replacement Fund will be purchased with cash.
    15. 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) of the 1940 Act if the evidence 
establishes that: (1) 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; (2) 
the proposed transaction is consistent with the policy of each 
registered investment company concerned, as recited in its registration 
statement and records found under the 1940 Act; and (3) the proposed 
transaction is consistent with the general purposes of the 1940 Act.
    16. Section 17 Applicants submit that the terms of the 
Substitutions, including the consideration to be paid and received, are 
reasonable and fair and do not involve overreaching on the part of any 
person concerned principally because the transactions will conform with 
all but one of the conditions enumerated in Rule 17a-7 under the 1940 
Act. The use of in-kind transactions will not cause contractowner 
interests to be diluted. The proposed transactions will take place at 
relative net asset value in conformity with the requirements of Section 
22(c) of the 1940 Act and Rule 22c-1 thereunder with no change in the 
amount of any contractowner's Contract value or death benefit or in the 
dollar value of his or her investment in any of the Separate Accounts. 
Contractowners will not suffer any adverse tax consequences as a result 
of the Substitutions. Fees and charges under the Contracts will not 
increase because of the Substitutions. Even though they may not rely on 
Rule 17a-7 under the 1940 Act, Section 17 Applicants submit that the 
Rule's conditions outline the type of safeguards that result in 
transactions that are fair and reasonable to registered investment 
company participants and preclude overreaching in connection with an 
investment company by its affiliated persons.
    17. The board of the VIP Trust has adopted procedures, as required 
by paragraph (e)(1) of Rule 17a-7 under the 1940 Act (the ``17a-7 
Procedures''), pursuant to which the Replacement Funds may purchase and 
sell securities to and from their affiliates. Section 17 Applicants 
will carry out the proposed in-kind purchases in conformity with all of 
the conditions of Rule 17a-7 and the 17a-7 Procedures, except that the 
consideration paid for the securities being purchased or sold may not 
be entirely cash. Nevertheless, the circumstances surrounding the 
proposed Substitutions will be such as to offer to each Replacement 
Fund the same degree of protection from overreaching that Rule 17a-7 
provides to them generally in connection with their purchase and sale 
of securities under that Rule in the ordinary course of their business. 
In particular, Insurance Company Applicants (or any of their 
affiliates) cannot effect the proposed transactions at a price that is 
disadvantageous to any of the Replacement Funds. Although the 
transactions may not be entirely for cash, each will be effected based 
upon (1) the independent market price of the portfolio securities 
valued as specified in paragraph (b) of Rule 17a-7, and (2) the net 
asset value per share of each fund involved, valued in accordance with 
the procedures disclosed in its respective registration statement and 
as required by Rule 22c-1 under the 1940 Act. No brokerage commission, 
fee, or other remuneration will be paid to any party in connection with 
the proposed transactions. The transactions will be reviewed by the 
Chief Compliance Officer of the VIP Trust, or his agents, and will be 
reported to the VIP Trust's Board of Trustees in the same manner as any 
other 17a-7 transaction by any of the Replacement Funds would be 
reported.
    18. Section 17 Applicants also submit that the in-kind portfolio 
security transactions are consistent with the policies of the 
Replacement Funds and the VIP Trust as recited in the current 
registration statements and reports filed by each under the 1940 Act.

[[Page 51545]]

    19. In addition, Section 17 Applicants submit that the proposed in-
kind portfolio security transactions are consistent with the general 
purposes of the 1940 Act as stated in the Findings and Declaration of 
Policy in Section 1 of the 1940 Act. The proposed transactions do not 
present any of the conditions or abuses that the 1940 Act was designed 
to prevent. Further, Section 17 Applicants note that securities to be 
paid out as redemption proceeds and subsequently contributed to the 
Replacement Funds to effect the contemplated in-kind purchases of 
shares will be valued based on the normal valuation procedures of the 
redeeming Replaced Funds and purchasing Replacement Funds. Therefore, 
there will be no change in value to any contractowner as a result of 
the Substitutions.

Conclusion

    Applicants assert that for the reasons summarized above that the 
proposed Substitutions and related transactions meet the standards of 
Section 26(c) of the Act and are consistent with the standards of 
Section 17(b) of the Act and that the requested orders should be 
granted.

    For the Commission, by the Division of Investment Management 
pursuant to delegated authority.
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-20398 Filed 9-2-08; 8:45 am]

BILLING CODE 8010-01-P