[Federal Register Volume 61, Number 134 (Thursday, July 11, 1996)]
[Notices]
[Pages 36588-36589]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17664]


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SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IC-22054; No. 811-1501]


Lincoln National Variable Annuity
Fund B

July 5, 1996.
AGENCY: Securities and Exchange Commission (``SEC'' or ``Commission'').

ACTION: Notice of Application for an Order under the Investment Company 
Act of 1940 (``1940 Act'').

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applicant: Lincoln National Variable Annuity Fund B.

relevant 1940 act section: Order requested under Section 8(f) of the 
1940 Act.

SUMMARY of application: Applicant seeks an order declaring that it has 
ceased to be an investment company as defined by the 1940 Act.

filing DATE: The application was filed on March 25, 1996.

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 SEC 
and serving Applicant with a copy of the request, personally or by 
mail. Hearing requests should be received by the SEC by 5:30 p.m. on 
July 30, 1996, and should be accompanied by proof of service on 
Applicant in the form of an affidavit or, for lawyers, a certificate of 
service. Hearing requests should state the nature of the requestor'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 SEC.

ADDRESSES: Secretary, SEC, 450 5th Street, N.W., Washington, D.C. 
20549. Applicant, Jack D. Hunter, Esq., The Lincoln National Life 
Insurance Company, 1300 South Clinton Street, P.O. Box 1110, Fort 
Wayne, Indiana 46802.

FOR FURTHER INFORMATION CONTACT:
Patrice M. Pitts, Special Counsel, or Peter R. Marcin, Law Clerk, 
Office of Insurance Products (Division of Investment Management), at 
(202) 942-0670.

SUPPLEMENTARY INFORMATION: Following is a summary of the application; 
the complete application is available for a fee from the Public 
Reference Branch of the SEC.

Applicant's Representation

    1. Fund B was established as a segregated investment account of the 
Lincoln National Life Insurance Company on December 1, 1966, in 
accordance with provisions of Indiana insurance law.
    2. On May 15, 1967, Fund B filed with the Commission a notification 
of registration as an investment Company on Form N-8A under Section 
8(a) of the 1940 Act.
    3. On October 10, 1967, Fund B filed with the Commission: a 
registration statement (File No. 811-1501) under Section 8(a) of the 
1940 Act registering Fund B as an open-end, diversified management 
investment company; and a registration statement on Form S-5 (File No. 
2-27460) to register under the Securities Act of 1933 (the ``1933 
Act'') the securities issued by Fund B--variable annuity contracts 
issued in a single class. Fund B also commenced the initial public 
offering of this variable annuity contracts on October 10, 1967, and, 
pursuant to Rule 24e-2 under the 1940 Act, computed and paid a fee in 
connection with that offering.
    4. Fund B continuously offered its securities from October 10, 
1967, to December 31, 1979. Fund B has not sold any new variable 
annuity contracts since December 31, 1979. Fund B has applied to the 
Commission pursuant to Rule 477 under the 1933 Act for withdrawal of 
its registration statement.
    5. On May 4, 1995, the Board of Directors of Lincoln Life 
unanimously

[[Page 36589]]

approved an agreement and plan of reorganization between Fund B and 
Lincoln National Variable Annuity Fund A (``Fund A'').\1\ The Board of 
Directors of Lincoln Life and the Boards of Managers of Fund A and Fund 
B recommended the reorganization on the basis that the consolidation of 
Fund A and Fund B would lead to economies of scale and administrative 
efficiencies. Each board further believed that the reorganization was 
in the best interests of Fund B contract owners in that Fund A, having 
substantially greater assets than Fund B, had greater flexibility in 
making investments than did Fund B. In addition, the passage of the Tax 
Reform Act of 1984 effectively eliminated any justification for the 
maintenance of both Fund A and Fund B.
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    \1\ Fund A is registered with the Commission under the 1940 Act 
(File No. 811-1434). A copy of the agreement was filed with the 
Commission on May 25, 1995, as Exhibit A to a registration statement 
on Form N-14 (File No. 33-59587).
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    6. In connection with the reorganization, on May 5, 1995, Lincoln 
Life, Fund A, and Fund B together filed an application with the 
Commission for an order of exemption pursuant to Section 17(b) of the 
1940 Act from the provisions of Section 17(a) of the 1940 Act (File No. 
812-9590). The application was noticed on August 3, 1995, and an order 
granting the exemption was issued August 30, 1995.
    7. Also, in connection with the reorganization, a registration 
statement on form N-14 under the 1933 Act (File No. 33-59587) was filed 
with the Commission on May 25, 1995. The registration statement 
contained a prospectus/proxy statement that was furnished by the 
respective Boards of Managers of Fund A and Fund B to all Fund A and 
Fund B contract owners to solicit voting instructions from such 
contract owners as to the reorganization and other matters.
    8. On August 1, 1995, the contract owners of Fund B met and 
approved an Agreement and Plan of Reorganization (``Agreement'') to 
merge Fund B into Fund A. Pursuant to the terms of the Agreement, on 
October 4, 1995, Fund B transferred all of its assets to Fund A and had 
all of its liabilities and contractual obligations assumed by Fund A, 
in return for accumulation and annuity units of Fund A. The units of 
Fund A held by Fund B were then credited to the contract owners of Fund 
B as follows: each Fund B contract owner was credited with the number 
of Fund A accumulation or annuity units (both full and fractional) that 
equals the total accumulation or annuity value under the contract 
owner's Fund B contract.
    9. Lincoln Life paid all of the expenses in connection with the 
reorganization, including costs associated with printing and 
distributing proxy materials, counting contract owner instructions, 
legal and auditing fees, and expenses of holding the meeting of 
contract owners.
    10. As of October 3, 1995, the nearest date practicable preceding 
the reorganization, there were 611 variable annuity contracts 
outstanding supported by Fund B. The net asset value as of that date 
was $7.98 per share, $7,931,344 in aggregate.
    11. The last variable annuity contract was surrendered on October 
4, 1995, and the proceeds paid from Fund B upon surrender of those 
contracts were based upon the accumulation unit values as of that date. 
As of October 4, 1995, therefore, Fund B had no contract owners and, 
accordingly, had no contractual liability for the surrender value of 
any outstanding variable annuity contracts.
    12. Fund B has not, within the last 18 months, transferred any of 
its assets to a separate trust, the beneficiaries of which were or are 
security holders of Fund B.
    13. Fund B has retained no assets and has no security holders. Fund 
B does not have any debts or other liabilities which remain outstanding 
and is not a party to any litigation or administrative proceeding.
    14 Fund B is not now engaged, nor does it propose to engage, in any 
business activities other than those necessary for the winding-up of 
its affairs. Fund B intends to file, after receipt of the relief 
requested, a certificate of dissolution or similar documents in 
accordance with state law.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 96-17664 Filed 7-10-96; 8:45 am]
BILLING CODE 8010-01-M