[Federal Register Volume 60, Number 222 (Friday, November 17, 1995)]
[Notices]
[Pages 57730-57734]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-28401]



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SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IC-21487; No. 812-9642]


AIM Variable Insurance funds, Inc., et al.

November 9, 1995.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of Application for an exemption pursuant to the 
Investment Company Act of 1940 (the ``1940 Act'').

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applicants: AIM Variable Insurance Funds, Inc. (``Company''), AIM 
Advisors, Inc. (``AIM''), and certain life insurance companies 
(``Participating Insurance Companies'') and their separate accounts 
(``Separate Accounts'') that currently or in the future will invest in 
the Company.

relevant 1940 act sections: Order requested pursuant to Section 6(c) 
granting exemptions from the provisions of Sections 9(a), 13(a), 15(a), 
and 15(b) of the 1940 Act and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) 
thereunder.

summary of application: Applicants seek an order to permit shares of 
the Company and shares of any other investment company that is offered 
as a vehicle to fund insurance products and for which AIM, or any of 
its affiliates, may serve as manager, investment adviser, 
administrator, principal underwriter or sponsor (such other investment 
companies, including any series thereof, together with the Company and 
each of its series, are the ``Funds'') to be sold to and held by: (a) 
Separate Accounts funding variable annuity and variable life insurance 
contracts issued by both affiliated and unaffiliated Participating 
Insurance Companies, and (b) qualified pension and retirement plans 
outside of the context of Separate Accounts (``Qualified Plans'' or 
``Plans'').

filing date: The application was filed on June 22, 1995 and amended on 
October 23, 1995.

hearing or notification of hearing: An order granting the application 
will be issued unless the Commission orders a hearing. Interested 
persons may request a hearing 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 December 4, 1995, and must be accompanied by 
proof of service on Applicants in the form of an affidavit or, for 
lawyers, a certificate of service. Hearing requests should state the 
nature of the writer's interest, the reason for the request, and the 
issues contested. Persons may request notification of a hearing by 
writing to the Secretary of the Commission.

ADDRESSES: Secretary, Securities and Exchange Commission, 450 5th 
Street, NW., Washington, D.C. 20549. Applicants, c/o Nancy L. Martin, 
Esq., AIM Advisors, Inc., 11 Greenway Plaza, Suite 1919, Houston, Texas 
97046-1173.

FOR FURTHER INFORMATION CONTACT:
Kevin M. Kirchoff, Senior Counsel, or Wendy Friedlander, Deputy Chief, 
Office of Insurance Products (Division 

[[Page 57731]]
of Investment Management), at (202) 942-0670.

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application; the complete application is available for a fee from the 
Public Reference Branch of the Commission.

Applicants; Representations

    1. The Company is a Maryland corporation registered pursuant to the 
1940 Act as an open-end management investment company. Currently, the 
Company's common stock is divided into nine separate series, each 
representing an interest in a separate investment portfolio with its 
own investment objectives, program, policies and restrictions.
    2. AIM, a Delaware corporation organized in 1976, is registered 
with the Commission pursuant to the Investment Advisers Act of 1940 and 
serves as the investment adviser to each Fund. AIM is a wholly-owned 
subsidiary of AIM Management Group Inc.
    3. Shares of the funds are currently offered and sold to Separate 
Accounts of Connecticut General Life Insurance Company (``CG''), 
Citicorp Life Insurance Company (``Citicorp Life'') and First Citicorp 
Life Insurance Company (``First Citicorp,'' together with CG and 
Citicorp Life, the ``Current Insurance Companies''), to fund benefits 
under variable annuity contracts (``VA Contracts'') issued by these 
insurance companies, and to AIM and CG in connection with the initial 
capitalization of each Fund. Each of these Separate Accounts is 
registered as a unit investment trust pursuant to the 1940 Act.
    4. Prior to obtaining the exemptive relief sought in the 
application, the Funds intend to offer and sell their shares to 
Separate Accounts of the Current Insurance Companies as well as other 
Participating Insurance Companies, affiliated or unaffiliated with the 
Current Insurance Companies, to fund benefits under VA Contracts issued 
by these insurance companies. After obtaining exemptive relief, the 
Funds intend to offer and sell their shares to Separate Accounts of 
Participating Insurance Companies, including the Current Insurance 
Companies and insurance companies that are affiliated or unaffiliated 
therewith, to fund benefits under VA Contracts as well as single 
premium, scheduled premium and flexible premium variable life insurance 
contracts (``VLI Contracts,'' together with VA Contracts, the 
``Contracts'') issued by these insurance companies.
    5. The Participating Insurance Companies, either directly or 
through affiliated persons (``affiliates''), may serve, or be deemed to 
serve, as investment advisers, principal underwriters and/or depositors 
of, as appropriate, their respective Separate Accounts and/or the 
Funds.
    6. The Funds also intend to offer and sell their shares to a 
variety of Qualified Plans as permitted by applicable tax law. 
Depending on the type of Qualified Plan, shares of the Funds may be 
held in trust by one or more trustees pursuant to Section 403(a) of the 
Employee Retirement Income Security Act of 1974. In addition, depending 
on the terms of a Qualified Plan, one or more of the Funds may serve as 
the sole investment vehicle under the Plan or as one of several 
interest alternatives. Also, Plan participants may be given an 
investment choice depending on the terms of the Plan. AIM will not act 
as investment adviser to any of the Qualified Plans that purchase 
shares of any of the Funds, except to the extent permitted by 
applicable law. Fund shares held by any Qualified Plan will be voted in 
accordance with the terms of the Plan pursuant to applicable law.

Applicants' Legal Analysis

    1. The use of a common management investment company as the 
underlying investment medium for both variable annuity and variable 
life insurance separate accounts of a single insurance company (or of 
two or more affiliated insurance companies) is referred to as ``mixed 
funding.'' The use of a common management investment company as the 
underlying investment medium for variable annuity and variable life 
insurance separate accounts of unaffiliated insurance companies is 
referred to as ``shared funding.'' ``Mixed and shared funding'' denotes 
the use of a common management investment company to fund the variable 
annuity and variable life insurance separate accounts of affiliated and 
unaffiliated insurance companies.
    2. Rules 6e-2(b)(15) and 6e-3(T)(b)(15) under the 1940 Act 
(collectively, the ``Rules'') provide separate accounts organized as 
unit investment trusts with partial exemptions from Sections 9(a), 
13(a), 15(a) and 15(b) of the 1940 Act in connection with scheduled 
premium and flexible premium VLI Contracts, respectively.
    3. The exemptions provided by the Rules, however, are subject to 
certain exclusivity requirements that prohibit mixed and shared funding 
in the case of Rule 6e-2, prohibit shared funding in the case of Rule 
6e-3(T), and prohibit the offering of underlying fund shares to 
Qualified Plans under both Rules.
    4. Applicants state that, because the relief under the Rules is 
available only where shares of the Funds are offered exclusively to 
Separate Accounts, additional exemptive relief is necessary if the 
shares of the Funds also are to be sold to Plans.
    5. Applicants state that the promulgation of the Rules preceded the 
issuance of the Treasury Department Regulations that made it possible 
for shares of an investment company to be held by the trustee of a 
Qualified Plan without adversely affecting the ability of shares in the 
same investment company also to be held by the separate accounts of 
insurance companies in connection with their variable contracts. Thus, 
the sale of shares of the same investment company to separate accounts 
and Qualified Plans could not have been envisioned at the time of the 
adoption of the Rules.
    6. Section 6(c) of the 1940 Act authorizes the Commission to exempt 
any person, security, or transaction, or any class or classes of 
persons, securities, or transactions, from the provisions of the 1940 
Act and the rules promulgated thereunder if and to the extent that such 
exemption is necessary or appropriate in the public interest and 
consistent with the protection of investors and the purposes fairly 
intended by the policy and provisions of the 1940 Act.
    7. Accordingly, Applicants request that the Commission, pursuant to 
Section 6(c) of the 1940 Act, issue an order granting exemptions to 
Participating Insurance Companies and their Separate Accounts (and any 
investment adviser, principal underwriter and depositor of such a 
Separate Account and/or a Fund) from the provisions of Sections 9(a), 
13(a), 15(a), and 15(b) of the 1940 Act and rules 6e-2(b)(15) and 6e-
3(T)(b)(15) thereunder to the extent necessary to permit shares of the 
Funds to be sold to and held by (a) Separate Accounts funding VA 
Contracts and VLI Contracts issued by both affiliated and unaffiliated 
Participating Insurance Companies and (b) Qualified Plans, under the 
circumstances described in the application.
    8. Section 9(a)(3) of the 1940 Act provides that it is unlawful for 
any company to serve as investment adviser or principal underwriter of 
any registered open-end investment company if an affiliated person of 
that company is subject to a disqualification enumerated in Section 
9(a) (1) or (2). Subject to certain exclusivity requirements, the Rules 
provide partial exemptions from Section 9(a) by limiting the 
disqualification to affiliated 

[[Page 57732]]
individuals or companies that directly participate in the management or 
administration of the underlying investment company. The partial relief 
granted by Rules 6e-2(b)(15) and 6e-3(T)(b)(15) from the requirements 
of Section 9(a) of the 1940 Act, in effect, limits the amount of 
monitoring necessary to ensure compliance with Section 9(a) to that 
which is appropriate in light of the policy and purposes of the 
section. Applicants argue that the Rules reflect the Commission's 
recognition that it is unnecessary to apply Section 9(a) to the many 
individuals who may be involved in an insurance company complex, but 
have no connection with the investment company funding the separate 
accounts. Applicants further argue that Rule 6e-3(T) reflects the 
Commission's recognition that it is unnecessary to apply Section 9(a) 
to such individuals in the context of mixed funding.
    9. Applicants are aware of no reason the exemptions from Section 
9(a) provided by Rule 6e-2 should not be coextensive with that provided 
by Rule 6e-3(T) with regard to mixed funding. In addition, Applicants 
are aware of no reason to limit the availability of the exemptions 
provided by the Rules in the context of shared funding and are not 
aware of any instance where the Commission or its staff has applied the 
requirements of Section 9(a) fully in the context of a shared funding 
arrangement.
    10. Applicants do not expect Participating Insurance Companies to 
play any role in the management or administration of the Funds. 
Therefore, it is unlikely that they will need to rely on the partial 
exemptions provided by the Rules. However, in the event Participating 
Insurance Companies find such relief necessary, no regulatory purpose 
would be served by applying the full monitoring requirements of Section 
9(a). Indeed, applying these requirements would increase the monitoring 
costs incurred by the Participating Insurance Companies and, therefore, 
the level of administrative charges borne by Contract owners, which 
would reduce the net rates of return realized by Contract owners.
    11. Applicants also submit that the proposed sale of shares of the 
Funds to Qualified Plans would not affect the relief requested. 
Applicants state that the Participating Insurance Companies would 
engage in the same level of monitoring regardless of whether shares of 
the Funds were sold to Qualified Plans. Qualified Plans are not subject 
to Section 9(a), because they are not investment companies.
    12. Applicants request relief comparable to that provided by 
paragraphs (b)(4) and (b)(15) of Rules 6e-2 and 6e-3(T) to the extent 
necessary to provide exemptions from Section 9(a), in the context of 
mixed and shared funding, with respect to variable annuity Separate 
Accounts of Participating Insurance Companies.
    13. Section 9(a)(3) of the 1940 Act provides that it is unlawful 
for any company to serve as principal underwriter or depositor for any 
registered unit investment trust, such as the Separate Accounts, if an 
affiliated person of that trust is subject to a disqualification 
enumerated in Section 9(a) (1) or (2). Paragraph (b)(4) of Rules 6e-2 
and 6e-3(T) provides partial exemptions from Section 9(a) by limiting 
the disqualification to affiliated individuals or companies that 
directly participate in the management or administration of a 
registered unit investment trust separate account or in the sale of 
variable life insurance contracts funded by such separate account. 
Applicants argue that the partial relief provided by Rules 6e-2(b)(4) 
and 6e-3(T)(b)(4) parallels that provided by Rules 6e-2(b)(15) and 6e-
3(T)(b)(15), discussed above. Applicants assert that, like the relief 
provided by Rules 6e-2(b)(15) and 6e-3(T)(b)(15), the partial relief 
granted by Rules 6e-2(b)(4) and 6e-3(T)(b)(4), from the requirements of 
Section 9(a) of the 1940 Act, in effect, limits the amount of 
monitoring necessary to ensure compliance with Section 9(a) to that 
which is appropriate in light of the policy and purposes of such 
Section.
    14. The effect of the requested relief would be to exempt, from the 
automatic disqualification provisions of Section 9(a), the officers, 
directors and employees of Participating Insurance Companies, and their 
affiliates, who do not participate directly in the management or 
administration of variable annuity Separate Accounts or the Funds 
underlying Separate Accounts funding VA Contracts, or in the sale of VA 
Contracts funded by such Separate Accounts. Such relief would be the 
same as the relief available under Rules 6e-2(b)(4) and (b)(15) and 6e-
3(T)(b)(4) and (b)(15) with respect to variable life insurance Separate 
Accounts.
    15. Applicants are aware of no reason the exemptions from Section 
9(a) provided by Rules 6e-2(b)(4) and (b)(15) and Rules 6e-3(T)(b)(4) 
and (b)(15) with respect to variable life insurance contracts should 
not apply also with respect to variable annuity contracts.
    16. Applicants request exemptive relief to limit the scope of 
Section 9(a) to those officers, directors, and employees of 
Participating Insurance Companies, and their affiliates, who 
participate directly in the management or administration of variable 
annuity Separate Accounts or the Funds underlying such Separate 
Accounts or in the sale of VA Contracts funded by the Separate 
Accounts.
    17. Section 13(a) of the 1940 Act provides that it is unlawful for 
any registered investment company to, unless authorized by the vote of 
a majority of its outstanding voting securities, change its 
subclassification as open-end or closed-end investment company; engage 
in certain transactions and investment practices unless they are in 
accordance with the recitals of policy contained in its registration 
statement; deviate from certain investment policies of other 
fundamental policies; or cease to be an investment company.
    Section 15(a) of the 1940 Act provides certain requirements 
regarding any contract between a fund and its investment advisor, 
including the provision that such contract may be terminated at any 
time by vote of a majority of the outstanding voting securities of such 
fund.
    18. Rules 6e-2(b)(15) (iii) and 6e-3(T)(b)(15)(iii) under the 1940 
Act provide exemptions from the pass-through voting requirement with 
respect to several significant matters, assuming observance of the 
limitations on mixed and shared funding imposed by the 1940 Act and the 
rules thereunder.
    Rules 6e-2(b)(15)(iii)(A) and 6e-3(T)(b)(iii)(A) provide that the 
insurance company may disregard voting instructions of its contract 
owners with respect to the investments of an underlying fund, or any 
contract between a fund and its investment advisor, when required to do 
so by an insurance regulatory authority.
    Rules 6e-2(b)(15)(iii)(B) and 6e-3(T)(b)(15)(iii)(B) provide that 
the insurance company may disregard voting instructions of its contract 
owners if the contract owners initiate any change in the company's 
investment policies, principal underwriter, or any investment advisor, 
provided that disregarding such voting instructions is reasonable and 
subject to the other provisions of paragraphs (b)(15)(ii) and 
(b)(7)(ii) ((B) and (C) of each rule.
    19. Applicants submit that neither mixed nor shared funding 
compromises the goals of the state insurance regulatory authorities or 
of the Commission. Indeed, by permitting such arrangements, the 
Commission eliminates needless duplication of start-up and 
administrative expenses and 

[[Page 57733]]
potentially increases an investment company's assets, thereby making 
effective portfolio management strategies easier to implement and 
promoting other economies of scale. Applicants do not perceive that the 
sale of shares of the Funds to Qualified Plans would have any impact on 
the relief requested in this regard.
    20. Applicants submit that no increased conflicts of interest would 
be present if the Commission grants the exemptive relief requested in 
the application.
    21. Applicants further submit that granting the requested relief 
would enable Participating Insurance Companies investing in the Funds 
to: (a) avoid the costs of organizing and operating a funding medium, 
particularly the costs of obtaining expertise with respect to 
investment management; (b) expand the variety of funding options 
available under existing or future Contracts; and (c) benefit not only 
from the investment advisory and administrative expertise of the Funds' 
investment adviser, but also from the costs efficiencies and investment 
flexibility afforded by a large pool of funds. Moreover, sales of 
shares of the Funds to Qualified Plans in addition to Separate Accounts 
should result in an increased amount of assets available for investment 
by such Funds. Such an increase in assets should inure to the benefit 
of Contract owners by promoting economies of scale, by permitting 
greater safety through greater diversification, and by making the 
addition of new Funds more feasible. Applicants believe there is no 
significant legal impediment to permitting mixed and shared funding.

Applicants' Conditions

    1. A majority of the Board of Directors (``Board'') of each Fund 
will consist of persons who are not ``interested persons'' thereof, as 
defined by Section 2(a)(19) of the 1940 Act and the rules thereunder 
and as modified by any applicable orders of the Commission, except that 
if this condition is not met by reason of the death, disqualification, 
or bona fide resignation of any director, then the operation of this 
condition shall be suspended: (a) for a period of 45 days if the 
vacancy or vacancies may be filled by the Board; (b) for a period of 60 
days if a vote of shareholders is required to fill the vacancy or 
vacancies; or (c) for such longer period as the Commission may 
prescribe by order upon application.
    2. Each Board will monitor its Fund for the existence of any 
material irreconcilable conflict among the interests of the Contract 
owners of all Separate Accounts and all Plan participants investing in 
the Fund. A material irreconcilable conflict may arise for a variety of 
reasons, including: (a) an action by any state insurance or other 
regulatory authority; (b) a change in applicable federal or state 
insurance, tax or securities law or regulations, or a public ruling, 
private letter ruling, no-action or interpretative letter, or any 
similar action by insurance, tax, or securities regulatory authorities; 
(c) an administrative or judicial decision in any relevant proceeding; 
(d) the manner in which the investments of the Funds are being managed; 
(e) a difference in voting instructions given by VA Contract owners and 
VLI Contract owners; (f) a decision by a Participating Insurance 
Company to disregard the voting instruction of Contract owners; or (g) 
a decision by a Plan to disregard the voting instructions of Plan 
participants.
    3. Participating Insurance Companies, AIM (or any other investment 
adviser of a Fund), and any Plan that executes a fund participation 
agreement upon becoming an owner of 10% or more of the assets of a Fund 
(such a Plan being referred to hereafter as a ``Participating Plan''), 
will report any potential or existing conflicts to the Board of the 
relevant Fund. Participating Insurance Companies, AIM (or any other 
investment adviser of a Fund), and Participating Plans will be 
responsible for assisting the Board in carrying out its 
responsibilities under these conditions by providing the Board with all 
information reasonably necessary for the Board to consider any issues 
raised. This responsibility includes, but is not limited to, an 
obligation of Participating Insurance Company or a Participating Plan 
to inform the Board whenever it has determined to disregard Contract 
owner, a Plan participant, voting instructions, respectively. The 
responsibility to report such information and conflicts and to assist 
the Board will be contractual obligations of all Participating 
Insurance Companies and Participating Plans investing in the Funds 
under their agreements governing participation in the Funds, and such 
agreements shall provide that these responsibilities will be carried 
out with a view only to the interests of Contract owners and Plan 
participants.
    4. If it is determined by a majority of the Board of a Fund, or by 
a majority of its disinterested directors, that a material 
irreconcilable conflict exists, the relevant Participating Insurance 
Companies and Participating Plans will, at their expense and to the 
extent reasonably practicable (as determined by a majority of the 
disinterested directors), take whatever steps are necessary to remedy 
or eliminate the material irreconcilable conflict, which steps could 
include: (a) withdrawing the assets allocable to some or all of the 
Separate Accounts and Participating Plans from the Funds and 
reinvesting such assets in a different investment medium, which may 
include another Fund, or submitting the question of whether such 
segregation should be implemented to a vote of all affected Contract 
owners and Plan participants and, as appropriate, segregating the 
assets of any appropriate group (i.e., VA Contract owners and/or VLI 
Contract owners of one or more Participating Insurance Companies, and/
or participants of one or more Participating Plans) that votes in favor 
of such segregation, or offering to the affected Contract owners and 
Plan participants the option of making such a change; and (b) 
establishing a new registered management investment company or managed 
Separate Account. If a material irreconcilable conflict arises because 
of a decision by a Participating Insurance Company or Participating 
Plan to disregard Contract owner or Plan participant voting 
instructions, respectively, and that decision represents a minority 
position or would preclude a majority vote, the Participating Insurance 
Company or Participating Plan may be required, at the election of the 
relevant Fund, to withdraw its Separate Account's investment or, in the 
case of a Participating Plan, its participants' investments, in such 
Fund, and no charge or penalty will be imposed as a result of such 
withdrawal.
    The responsibility to take remedial action in the event of a Board 
determination of a material irreconcilable conflict and to bear the 
cost of such remedial action will be a contractual obligation of all 
Participating Insurance Companies and Participating Plans under their 
agreements governing participation in the Funds and such agreements 
shall provide that these responsibilities will be carried out with a 
view only to the interests of Contract owners and Plan participants. 
For purposes of this Condition Four, a majority of the disinterested 
directors of the Board will determine whether any proposed action 
adequately remedies any material irreconcilable conflict, but in no 
event will the relevant Fund or AIM (or any other investment adviser of 
the Funds) be required to establish a new funding medium for any 
Contract. No Participating Insurance Company shall be required by this 
Condition Four to establish a new funding medium for any 

[[Page 57734]]
Contract if an offer to do so has been declined by vote of a majority 
of Contract owners materially and adversely affected by the material 
irreconcilable conflict. No Participating Plan shall be required by 
this Condition Four to establish a new funding medium for any Plan 
participant if (a) a majority of Plan participants materially and 
adversely affected by the material irreconcilable conflict vote to 
decline such offer or (b) pursuant to governing Plan documents and 
applicable law, the Participating Plan makes such decision without a 
Plan participant vote.
    5. The Board's determination of the existence of a material 
irreconcilable conflict and its implications will be made known 
promptly and in writing to all Participating Insurance Companies and 
Participating Plans.
    6. Participating Insurance Companies will provide pass-through 
voting privileges to Contract owners who invest in registered Separate 
Accounts so long as the Commission interprets the 1940 Act to require 
pass-through voting privileges for Contract owners. Accordingly, the 
Participating Insurance Companies will vote shares of a Fund held in 
their registered Separate Accounts in a manner consistent with voting 
instructions timely received from Contract owners. Each Participating 
Insurance Company will vote shares for which it has not received timely 
voting instructions, as well as shares attributable to it (and to any 
unregistered Separate Accounts supporting Contracts for which no voting 
privileges have been granted to the owners thereof), in the same 
proportion as it votes shares for which it has received timely 
instructions. Participating Insurance Companies will be responsible for 
assuring that each of their registered Separate Accounts calculates 
voting privileges in a manner consistent with other Participating 
Insurance Companies. The obligation to calculate voting privileges in a 
manner consistent with all other registered Separate Accounts investing 
in the Fund will be a contractual obligation of all Participating 
Insurance Companies under the agreements governing participation in the 
Fund. Each Participating Plan will vote as required by applicable law 
and governing Plan documents.
    7. All reports of potential or existing conflicts received by the 
Board, and all Board action with regard to: (a) determining the 
existence of a conflict; (b) notifying Participating Insurance 
Companies and Participating Plans of a conflict; and (c) determining 
whether any proposed action adequately remedies a conflict, will be 
properly recorded in the minutes of the appropriate Board or other 
appropriate records, and such minutes or other records shall be made 
available to the Commission upon request.
    8. Each Fund will notify all Participating Insurance Companies that 
Separate Account prospectus disclosure regarding potential risks of 
mixed and shared funding may be appropriate. Each Fund will disclose in 
its prospectus that: (a) shares of the Fund are offered in connection 
with mixed and shared funding, and are offered to Plans; (b) mixed and 
shared funding may present certain conflicts of interest; (c) due to 
differences in tax treatment and other considerations, the interests of 
various Contract owners investing in Separate Accounts investing in the 
Funds, and the interests of Plan participants investing in the Funds, 
may conflict; and (d) the Board of the Fund will monitor for the 
existence of any material conflicts and determine what action, if any, 
should be taken.
    9. Each Fund will comply with all provisions of the 1940 Act 
requiring voting by shareholders (which, for these purposes, shall be 
the person having a voting interest in shares of the Fund), and, in 
particular, each Fund will either provide for annual meetings (except 
insofar as the Commission may interpret Section 16 of the 1940 Act not 
to require such meetings) or comply with Section 16(c) of the 1940 Act 
(although the Funds are not one of the trusts described in Section 
16(c) of the 1940 Act), as well as with Section 16(a), and, if 
applicable, Section 16(b) of the 1940 Act. Further, each Fund will act 
in accordance with the Commission's interpretation of the requirements 
of Section 16(a) with respect to periodic elections of directors and 
with whatever rules the Commission may promulgate with respect thereto.
    10. If, and to the extent that, Rules 6e-2 and 6e-3(T) are amended 
(or if Rule 6e-3 under the 1940 Act is adopted) to provide exemptive 
relief from any provision of the 1940 Act or the rules thereunder with 
respect to mixed or shared funding on terms and conditions materially 
different from any exemptions granted in the order requested by 
Applicants, then the Funds and/or the Participating Insurance 
Companies, as appropriate, shall take such steps as necessary to comply 
with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to 
the extent applicable.
    11. No less than annually, the Participating Insurance Companies, 
the Participating Plans, and/or AIM (or any other investment adviser of 
a Fund) shall submit to the Board such reports, materials, or data as 
the Board may reasonably request so that the Board may carry out fully 
the obligations imposed upon it by the conditions contained in any 
Commission order. The responsibility to submit such reports, materials, 
and data to the Board shall be a contractual obligation of all 
Participating Insurance Companies and Participating Plans under the 
agreements governing their participation in the Funds.
    12. A Participating Insurance Company, or any affiliate, will 
maintain at its home office, available to the Commission, (i) a list of 
its officers, directors and employees who participate directly in the 
management or administration of any VA Separate Account organized as a 
unit investment trust or of the Funds and/or (ii) a list of its agents 
who, as registered representatives, offer and sell VA Contracts. These 
individuals will continue to be subject to the automatic 
disqualification provisions of Section 9(a).
    13. If a Qualified Plan should ever become an owner of 10% or more 
of the assets of a Fund, such Qualified Plan will execute a fund 
participation agreement with such Fund. A Qualified Plan will execute 
an application containing an acknowledgment of this condition at the 
time of its initial purchase of shares of any Fund.

Conclusion

    For the reasons summarized above, Applicants represent that the 
exemptions requested are necessary and appropriate in the public 
interest and consistent with the protection of investors and the 
purposes fairly intended by the policy and provisions of the 1940 Act.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-28401 Filed 11-16-95; 8:45 am]
BILLING CODE 8010-01-M