• SEC Grants No-Action Relief for Insurance Company Special Accounts
  • May 4, 2007
  • Law Firm: Pepper Hamilton LLP - Philadelphia Office
  • In a fairly routine transaction (corporate-wise), Ameritas Variable Life Insurance Company (AVLIC), a subsidiary of Ameritas Life Insurance Corp. (ALIC), transferred certain separate accounts to ALIC by operation of law as a result of AVLIC merging into ALIC. On April 5, the Staff of the SEC’s Division of Investment Management (Staff) granted no-action relief to ALIC under Section 5 of the Securities Act of 1933, as amended (1933 Act) and Sections 8 and 11 of the Investment Company Act of 1940, as amended (1940 Act), regarding this transaction. The Staff said that it would not recommend that the SEC bring an enforcement action if: (1) the change in depositor of the separate accounts as a result of the merger is effected through the filing of amendments to the registration statements for the separate accounts under the 1940 Act; and (2) new registration statements under the 1933 Act are filed by ALIC and the separate accounts to cover any securities issued after the merger in connection with the variable life insurance contracts and variable annuity contracts funded by the separate accounts.

    Pepper Points

    This no-action relief could result in an easing of the regulatory burden borne by insurance companies as a result of any mergers or corporate reorganizations. The relief provided by the SEC allows insurance companies to avoid extra filings when certain separate accounts are transferred to another company by operation of law. Additional filings are required only if the surviving company and the separate accounts issue new securities. No filings are required to cover securities issued prior to the merger.