[Federal Register Volume 80, Number 30 (Friday, February 13, 2015)]
[Notices]
[Pages 8115-8119]
[FR Doc No: 2015-02992]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-31451; File No. 812-14359]

Pacific Life Insurance Company, et al; Notice of Application

February 9, 2015.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application for an order approving the substitution
of certain securities pursuant to Section 26(c) of the Investment
Company Act of 1940, as amended (the ``1940 Act'').

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    Applicants: Pacific Life Insurance Company (``Pacific Life''),
Pacific Life's Separate Account A (``Separate Account A''), Pacific
Life's Pacific Select Variable Annuity Separate Account (``Select VA
Account'' and, together with Separate Account A, the ``Pacific Life
Separate Accounts''), Pacific Life & Annuity Company (``PL&A''), and
PL&A's Separate Account A (``PL&A Separate Account A''). Pacific Life,
PL&A, and the Separate Accounts are referred to collectively as the
``Applicants.'' The Pacific Life Separate Accounts and PL&A Separate
Account A are referred to individually as a ``Separate Account'' and
collectively as the ``Separate Accounts.'' Pacific Life and PL&A are
referred to herein individually as an ``Insurer'' and collectively as
the ``Insurers.''
SUMMARY: Summary of Application: Each Insurer, on behalf of itself and
its Separate Account(s), seeks an order pursuant to Section 26(c) of
the 1940 Act, approving the substitution of Service Shares of the Janus
Aspen Balanced Portfolio, a series of Janus Aspen Series (the
``Replacement Portfolio''), for the Advisor Class shares of the PIMCO
Global Multi-Asset Managed Allocation Portfolio, a series of the PIMCO
Variable Insurance Trust (the ``Replaced Portfolio'') (the ``Proposed
Substitution''), under certain variable annuity contracts issued by the
Insurers (collectively, the ``Contracts'').

DATES: Filing Date: The application was filed on September 19, 2014,
and amended on February 5, 2015.
    Hearing or Notification of Hearing: An order granting the requested
relief will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving applicants with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on March 4, 2015, and should be accompanied by proof of
service on applicants, in the form of an affidavit or, for lawyers, a
certificate of service. Pursuant to Rule 0-5 under the Act, hearing
requests should state the nature of the writer's interest, any facts
bearing upon the desirability of a hearing on the matter, 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
Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
Street NE., Washington, DC 20549-1090; Applicants: Brandon J. Cage, CLU
Assistant Vice President, Counsel, Pacific Life Insurance Company, 700
Newport Center Drive, Newport Beach, CA 92660; Richard T. Choi, Esq.,
Carlton Fields Jorden Burt, P.A., 1025 Thomas Jefferson St. NW., Suite
400 East, Washington, DC 20007.

FOR FURTHER INFORMATION CONTACT: Laura L. Solomon, Senior Counsel, at
(202) 551-6915, or Nadya Roytblat, Assistant Chief Counsel, at (202)
551-6825 (Chief Counsel's Office, Division of Investment Management).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or an applicant
using the Company name box, at http://www.sec.gov/search/search.htm or
by calling<PHONE_NUMBER>.

Applicants' Representations

    1. The Insurers, on their own behalf and on behalf of their
respective Separate Accounts, propose to substitute Service Shares of
the Replacement Portfolio for Advisor Class shares of the Replaced
Portfolio held by the Separate Account to fund the Contracts. Each
Separate Account is divided into subaccounts (each a ``Subaccount,''
collectively, the ``Subaccounts''). Each Subaccount invests in the
securities of a single portfolio of an underlying mutual fund
(``Portfolio''). Contract owners (each a ``Contract Owner'' and
collectively, the ``Contract Owners'') may allocate some or all of
their Contract value to one or more Subaccounts that are available as
investment options under the Contracts.
    2. Pacific Life is the depositor and sponsor of the Pacific Life
Separate Accounts. PL&A is the depositor and sponsor of PL&A Separate
Account A.
    3. Each of the Separate Accounts is a ``separate account'' as
defined by Section 2(a)(37) of the 1940 Act and each is registered
under the 1940 Act as a unit investment trust for the purpose of
funding the Contracts. Security interests under the Contracts have been

registered under the Securities Act of 1933. The application sets forth
the registration statement file numbers for the Contracts and the
Separate Accounts.
    4. Each Insurer, on behalf of itself and its Separate Account(s),
proposes to replace the Advisor Class shares of the Replaced Portfolio
that are held in Subaccounts of its Separate Account(s) with Service
Shares of the Replacement Portfolio.
    5. The Applicants state that the Proposed Substitution involves
moving assets attributable to the Contracts from the Replaced Portfolio
managed by Pacific Investment Management Company, LLC (``PIMCO'') to a
Replacement Portfolio managed by Janus Capital Management LLC (``Janus
Capital'') (each of Janus Capital and PIMCO, an ``Investment Adviser''
and collectively, the ``Investment Advisers''). Each Investment Adviser
is responsible for the day-to-day management of the assets of the
Replaced or Replacement Portfolio, as the case may be. Neither the
Replaced nor Replacement Portfolio employs a sub-adviser and neither
Portfolio operates under a manager-of-managers arrangement that, among
other things, would permit the Investment Adviser to engage a new or
additional sub-adviser without the approval of the Portfolio's
shareholders. The Applicants state that the Investment Advisers are not
affiliates of the Insurers.
    6. Applicants state that under the Contracts, the Insurers reserve
the right to substitute, for the shares of a Portfolio held in any
Subaccount, the shares of another Portfolio, shares of another
investment company or series of another investment company, or another
investment vehicle. The prospectuses for the Contracts include
appropriate disclosure of this reservation of right.
    7. The Applicants represent that the investment objectives of the
Replaced and Replacement Portfolio are similar. The investment
objective of the Replaced Portfolio is total return which exceeds that
of a blend of 60% MSCI World Index/40% Barclays U.S. Aggregate Index,
whereas that of the Replacement Portfolio is long-term capital growth,
consistent with preservation of capital and balanced by current income.
The investment objectives of both Portfolios include a growth component
as well as an income component. Additionally, the Applicants state that
the principal investment strategies of the Replaced and Replacement
Portfolios are similar. The principal investment strategies of both
Portfolios include investment in a combination of equity and debt
securities. The Replaced Portfolio will typically invest 50 to 70% (20%
minimum under normal circumstances) of its total assets in equity-
related investment securities and may invest up to 30% of its total
assets in fixed income securities denominated in foreign securities (or
beyond this limit in U.S. dollar-denominated securities of foreign
issuers), 15% of its total assets in fixed income securities that are
economically tied to emerging market countries, and up to 10% of its
total assets in fixed income securities in high yield securities (i.e.,
``junk'' bonds). The Replacement Portfolio normally invests 35-65% of
its assets in equity securities and the remaining assets in debt
securities and cash equivalents, with normally 25% of its assets
invested in fixed-income senior securities. In addition, both
Portfolios may invest in securities of non-U.S. issuers. Investment in
``junk'' bonds is not a principal investment strategy of the
Replacement Portfolio though it may invest in such bonds. The principal
investment strategies of the Replaced Portfolio include investments of
up to 5% of its total assets in real estate investment trusts or REITS,
whereas the same is not true for the Replacement Portfolio though it
may invest in REITs. The principal investment strategies of the
Replaced Portfolio include entering into forward commitments, the
making of short sales of securities or maintaining a short position,
none of which is a principal investment strategy of the Replacement
Portfolio, though it may engage in short sales and invest in securities
on a forward commitment basis. The principal investment strategies of
the Replacement Portfolio include investments in mortgage-backed and
mortgage-related securities. Similarly, mortgage-backed securities are
included among the types of fixed-income securities that constitute a
principal investment strategy of the Replaced Portfolio. A comparison
of the investing strategies, risks, and performance of the Replaced and
Replacement Portfolios is included in the application.
    8. The following table compares the fees and expenses of the
Replaced Portfolio (Advisor Class shares) and the Replacement Portfolio
(Service Shares) as of the year ended December 31, 2013. As shown
below, the management fee of the Replacement Portfolio is lower than
that of the Replaced Portfolio. The management fees of the Replaced
Portfolio and the Replacement Portfolio are not subject to breakpoints.
In addition, as shown in the table below, the 12b-1 fee of the Service
Shares of the Replacement Portfolio is the same as the 12b-1 fee of the
Advisor Class shares of the Replaced Portfolio. In both cases, the 12b-
1 fee is the current maximum permitted under the relevant plan.
Furthermore, as shown in the table below, the annual operating expenses
of the Replacement Portfolio are lower than those of the Replaced
Portfolio.\1\
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    \1\ As of the date of filing of the amended application,
Applicants are aware of no material change to the fee and expense
information provided in the following table.

                                              Proposed Substitution
----------------------------------------------------------------------------------------------------------------
                                                                   Replaced portfolio     Replacement portfolio
                                                               -------------------------------------------------
                                                                  PIMCO global multi-
                                                                     asset managed         Janus Aspen balanced
                                                                  allocation portfolio          portfolio
----------------------------------------------------------------------------------------------------------------
Advisor Class/Service Shares:
    Management Fee............................................                    0.95%                    0.55%
    12b-1 Fee.................................................                    0.25%                    0.25%
    Other Expenses............................................                    0.01%                    0.04%
    Acquired Fund Fees........................................                    0.52%                      N/A
    Total Gross Expenses......................................                    1.73%                    0.84%
    Expense Waiver/Reimbursement..............................                     0.46                     0.00
                                                               -------------------------------------------------

        Total Net Expenses....................................                    1.27%                    0.84%
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    9. The Applicants state that the performance for the Replacement
Portfolio is substantially better than that of the Replaced Portfolio
for all periods shown.
    10. The Applicants state that the Proposed Substitution is part of
an ongoing effort by the Insurers to make their Contracts more
attractive to existing and prospective Contract Owners. The Applicants
assert the Proposed Substitution will help to accomplish these goals
for the following reasons: (1) The total annual operating expenses for
the Replacement Portfolio (which does not include any expense waivers
or reimbursements) are significantly lower than those of the Replaced
Portfolio (even after taking into account fee waivers or expense
reimbursements); (2) the historical performance of the Replacement
Portfolio is generally much better than that of the Replaced Portfolio;
(3) the Subaccounts that invest in the Replacement Portfolio are
included among the currently allowable investment options under the
optional living benefit riders offered under the Contracts; (4)
Contract Owners will find the stable management of the Replacement
Portfolio, whose co-portfolio managers have managed the Portfolio since
2005, attractive, relative to the Replaced Portfolio; and (5) the
Proposed Substitution will simplify the Subaccount offerings under the
Contracts.
    11. The Applicants represent that the Proposed Substitution will be
described in supplements to the applicable prospectuses for the
Contracts filed with the Commission or in other supplemental disclosure
documents, (collectively, ``Supplements'') and delivered to all
affected Contract Owners at least 30 days before the date the Proposed
Substitution is effected (the ``Substitution Date''). Each Supplement
will give the relevant Contract Owners notice of the applicable
Insurer's intent to take the necessary actions, including seeking the
order requested by the application, to substitute shares of the
Replaced Portfolio as described in the application on the Substitution
Date. Each Supplement also will advise Contract Owners that from the
date of the Supplement until the Substitution Date, Contract Owners are
permitted to transfer all of or a portion of their Contract value out
of any Subaccount investing in the Replaced Portfolio (``Replaced
Portfolio Subaccount'') to any other available Subaccounts offered
under their Contracts without the transfer being counted as a transfer
for purposes of transfer limitations and fees that would otherwise be
applicable under the terms of the Contracts. In addition, each
Supplement will (a) instruct Contract Owners how to submit transfer
requests in light of the Proposed Substitution; (b) advise Contract
Owners that any Contract value remaining in the Replaced Portfolio
Subaccount on the Substitution Date will be transferred to a Subaccount
investing in the Replacement Portfolio (``Replacement Portfolio
Subaccount''), and that the Proposed Substitution will take place at
relative net asset value; (c) inform Contract Owners that for at least
thirty (30) days following the Substitution Date, the applicable
Insurer will permit Contract Owners to make transfers of Contract value
out of the Replacement Portfolio Subaccount to any other available
Subaccounts offered under their Contracts without the transfer being
counted as a transfer for purposes of transfer limitations that would
otherwise be applicable under the terms of the Contracts; and (d)
inform Contract Owners that, except as described in the market timing
limitations section of the relevant prospectus, the applicable Insurer
will not exercise any rights reserved by it under the Contracts to
impose additional restrictions on transfers out of the Replacement
Portfolio Subaccount for at least thirty (30) days after the
Substitution Date.
    12. The Proposed Substitution will be effected at the relative net
asset values of the respective shares in conformity with Section 22(c)
of the 1940 Act and Rule 22c-1 thereunder without the imposition of any
transfer or similar charges by Applicants. The Proposed Substitution
will be effected without change in the amount or value of any Contracts
held by affected Contract Owners. Accordingly, the Applicants submit
that the Proposed Substitution will have no negative financial impact
on any Contract Owner.
    13. The Proposed Substitution will be effected by having the
Replaced Portfolio Subaccount redeem its Replaced Portfolio shares in
cash on the Substitution Date at net asset value per share and purchase
shares of the Replacement Portfolio at net asset value per share
calculated on the same date.
    14. The Insurers or an affiliate thereof will pay all expenses and
transaction costs reasonably related to the Proposed Substitution,
including all legal, accounting, and brokerage expenses relating to the
Proposed Substitution, the above described disclosure documents, and
the application. No costs of the Proposed Substitution will be borne
directly or indirectly by Contract Owners. Affected Contract Owners
will not incur any fees or charges as a result of the Proposed
Substitution, nor will their rights or the obligations of the Insurers
under the Contracts be altered in any way. The Proposed Substitution
will not cause the fees and charges under the Contracts currently being
paid by Contract Owners to be greater after the Proposed Substitution
than before the Proposed Substitution. In addition, no transfer charges
will apply in connection with the Proposed Substitution.
    15. The Applicants represent that they will not receive, for three
years from the date of the Proposed Substitution, any direct or
indirect benefits from the Replacement Portfolio, its adviser or
underwriter (or their affiliates), in connection with assets
attributable to contracts affected by the Proposed Substitution, at a
higher rate than they had received from the Replaced Portfolio, its
adviser or underwriter (or their affiliates), including without
limitation 12b-1 fees, shareholder service, administrative, or other
service fees, revenue sharing, or other arrangements; and the Proposed
Substitution and the selection of the Replacement Portfolio were not
motivated by any financial consideration paid or to be paid to the
Insurer or its affiliates by the

Replacement Portfolio, its adviser or underwriter, or their affiliates.

Legal Analysis

    1. Applicants request that the Commission issue an order pursuant
to Section 26(c) of the 1940 Act approving the Proposed Substitution.
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. Section 26(c) requires the
Commission to issue such an order approving the substitution if the
evidence establishes that the substitution is consistent with the
protection of investors and the purposes fairly intended by the policy
and provisions of the 1940 Act.
    2. The Applicants submit that the terms and conditions of the
Proposed Substitution meet the standards set forth in Section 26(c) and
assert that the substitution of the Replaced Portfolio with the
Replacement Portfolio is consistent with the protection of investors
and the purposes fairly intended by the policy and provisions of the
l940 Act. As described in the application, the total annual operating
expenses for the Replacement Portfolio are lower than those of the
Replaced Portfolio. Applicants assert that the Replacement Portfolio
has similar investment objectives and investment strategies as the
Replaced Portfolio, and the principal risks of the Replaced Portfolio
and the Replacement Portfolio are similar.
    3. Applicants also maintain that the Proposed Substitution is part
of an ongoing effort by the Insurers to make their contracts more
attractive to existing and prospective Contract Owners. The rights of
affected Contract Owners and the obligations of the Insurers under the
Contracts will not be altered by the Proposed Substitution. Affected
Contract Owners will not incur any additional tax liability or any
additional fees and expenses as a result of the Proposed Substitution.
    4. The prospectuses for the Contracts disclose that the Insurers
reserve the right, subject to Commission approval and compliance with
applicable law, to substitute, for the shares of a Portfolio held in
any Subaccount, the shares of another Portfolio, shares of another
investment company or series of another investment company, or another
investment vehicle.
    5. Applicants also assert that the Proposed Substitution does not
entail any of the abuses that Section 26(c) was designed to prevent.
Applicants note that the purpose of Section 26(c) is to protect the
expectation of investors in a unit investment trust that the trust will
accumulate shares of a particular issuer by preventing unscrutinized
substitutions that might, in effect, force shareholders dissatisfied
with the substituted security to redeem their shares, possibly
incurring either a loss of the sales load deducted from initial premium
payments, an additional sales load upon reinvestment of the redemption
proceeds, or both. The Proposed Substitution will offer Contract Owners
the opportunity to transfer amounts out of the affected subaccounts
into any of the remaining subaccounts without cost or other
disadvantage. The Proposed Substitution, therefore, will not result in
the type of costly forced redemptions that Section 26(c) was designed
to prevent.

Applicants' Conditions

    Applicants agree that any order granting the requested relief will
be subject to the following conditions:
    1. The Proposed Substitution will not be effected unless the
Insurers determine that: (a) The Contracts allow the substitution of
shares of registered open-end investment companies in the manner
contemplated by the application; (b) the Proposed Substitution can be
consummated as described in the application under applicable insurance
laws; and (c) any regulatory requirements in each jurisdiction where
the Contracts are qualified for sale have been complied with to the
extent necessary to complete the Proposed Substitution.
    2. The Insurers or their affiliates will pay all expenses and
transaction costs of the Proposed Substitution, including legal and
accounting expenses, any applicable brokerage expenses and other fees
and expenses. No fees or charges will be assessed to the Contract
Owners to effect the Proposed Substitution.
    3. The Proposed Substitution will be effected at the relative net
asset values of the respective shares in conformity with Section 22(c)
of the 1940 Act and Rule 22c-1 thereunder without the imposition of any
transfer or similar charges by Applicants. The Proposed Substitution
will be effected without change in the amount or value of any Contracts
held by affected Contract Owners.
    4. The Proposed Substitution will in no way alter the tax treatment
of affected Contract Owners in connection with their Contracts, and no
tax liability will arise for affected Contract Owners as a result of
the Proposed Substitution.
    5. The rights or obligations of the Insurers under the Contracts of
affected Contract Owners will not be altered in any way. The Proposed
Substitution will not adversely affect any riders under the Contracts
since the Replacement Portfolio is an allowable investment option for
use with such riders.
    6. Affected Contract Owners will be permitted to make at least one
transfer of Contract value from the subaccount investing in the
Replaced Portfolio (before the Substitution Date) or the Replacement
Portfolio (after the Substitution Date) to any other available
investment option under the Contract without charge for a period
beginning at least 30 days before the Substitution Date through at
least 30 days following the Substitution Date. Except as described in
any market timing/short-term trading provisions of the relevant
prospectus, the Insurer will not exercise any right it may have under
the Contract to impose restrictions on transfers between the
subaccounts under the Contracts, including limitations on the future
number of transfers, for a period beginning at least 30 days before the
Substitution Date through at least 30 days following the Substitution
Date.
    7. All affected Contract Owners will be notified, at least 30 days
before the Substitution Date about: (a) The intended substitution of
the Replaced Portfolio with the Replacement Portfolio; (b) the intended
Substitution Date; and (c) information with respect to transfers as set
forth in Condition 6 above. In addition, Insurers will deliver to all
affected Contract Owners, at least 30 days before the Substitution
Date, a prospectus for the Replacement Portfolio.
    8. Insurers will deliver to each affected Contract Owner within
five (5) business days of the Substitution Date a written confirmation
which will include: (a) A confirmation that the Proposed Substitution
was carried out as previously notified; (b) a restatement of the
information set forth in the Supplements; and (c) before and after
account values.
    9. Applicants will not receive, for three years from the date of
the Proposed Substitution, any direct or indirect benefits from the
Replacement Portfolio, its adviser or underwriter (or their
affiliates), in connection with assets attributable to Contracts
affected by the Proposed Substitution, at a higher rate than they had
received from the Replaced Portfolio, its adviser or underwriter (or
their affiliates), including without limitation 12b-1 fees, shareholder
service, administrative or

other service fees, revenue sharing, or other arrangements.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Brent J. Fields,
Secretary.
[FR Doc. 2015-02992 Filed 2-12-15; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 81, Number 110 (Wednesday, June 8, 2016)]
[Notices]
[Page 36978]
[FR Doc No: 2016-13464]

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SECURITIES AND EXCHANGE COMMISSION

Proposed Collection; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of FOIA Services, 100 F Street NE., Washington, DC
20549-2736.

Extension:
    Form D, OMB Control No. 3235-0076, SEC File No. 270-072.

    Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange
Commission (``Commission'') is soliciting comments on the collection of
information summarized below. The Commission plans to submit this
existing collection of information to the Office of Management and
Budget for extension and approval.
    Form D (17 CFR 239.500) is a notice of sales filed by issuers
making an offering of securities in reliance on an exemption under
Regulation D (17 CFR 230.501 et seq.) or Section 4(a)(5) of the
Securities Act of 1933 (15 U.S.C. 77d(a)(5)). Regulation D sets forth
rules governing the limited offer and sale of securities without
Securities Act registration. The purpose of Form D is to collect
empirical data, which provides a continuing basis for action by the
Commission either in terms of amending existing rules and regulations
or proposing new ones. In addition, the Form D allows the Commission to
elicit information necessary in assessing the effectiveness of
Regulation D (17 CFR 230.501 et seq.) and Section 4(6) of the
Securities Act of 1933 (15 U.S.C. 77d(6)) as capital-raising devices
for all businesses. Approximately 21,686 issuers file Form D and it
takes approximately 4 hours per response. We estimate that 25% of 4
hours per response (1 hour per response) is prepared by the issuer for
an annual reporting burden 21,686 hours (1 hour per response x 21,686
responses).
    Written comments are invited on: (a) Whether this collection of
information is necessary for the proper performance of the functions of
the agency, including whether the information will have practical
utility; (b) the accuracy of the agency's estimate of the burden
imposed by the collection of information; (c) ways to enhance the
quality, utility, and clarity of the information collected; and (d)
ways to minimize the burden of the collection of information on
respondents, including through the use of automated collection
techniques or other forms of information technology. Consideration will
be given to comments and suggestions submitted in writing within 60
days of this publication.
    Please direct your written comments to Pamela Dyson, Director/Chief
Information Officer, Securities and Exchange Commission, c/o Remi
Pavlik-Simon, 100 F Street NE., Washington, DC 20549 or send an email
to<EMAIL_ADDRESS>
    Dated: June 2, 2016.
Brent J. Fields,
Secretary.
[FR Doc. 2016-13464 Filed 6-7-16; 8:45 am]
 BILLING CODE 8011-01-P