[Federal Register Volume 67, Number 221 (Friday, November 15, 2002)]
[Notices]
[Pages 69266-69271]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-29040]


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SECURITIES AND EXCHANGE COMMISSION

[Rel. No. IC-25800; File No. 812-12618]


Fortis Benefits Insurance Company, et al.; Notice of Application

November 8, 2002.
AGENCY: Securities and Exchange Commission. (``Commission'').

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

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Applicants: Fortis Benefits Insurance Company (``Fortis Benefits''), 
First Fortis Life Insurance Company (``First Fortis''), Variable 
Account D of Fortis Benefits Insurance Company (``Account D''), and 
Separate Account A of First Fortis Life Insurance Company (``Account 
A'') (together, the ``Applicants'').

Summary of Application: Applicants request an order to permit Fortis 
Benefits and First Fortis to substitute shares of the Mid Cap Growth 
Fund II of Strong Variable Insurance Funds, Inc. (``Strong'') for 
shares of the Discovery Fund II of Strong, and shares of the 
International Portfolio of Alliance Variable Products Series Funds, 
Inc. (``Alliance'') for shares of the International Stock Fund II of 
Strong held by Account D and Account A to support variable annuity 
contracts (``Contracts'').

[[Page 69267]]


Filing Date: The application was filed on August 29, 2001 and amended 
and restated on November 1, 2002.

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 should be received by the 
Commission by 5:30 p.m. on December 3, 2002, and should 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 Fifth 
Street, NW., Washington, DC 20549-0609. Applicants, c/o Thomas S. 
Clark, Esq., Assistant Counsel, Hartford Life Insurance Company, 200 
Hopmeadow Street, Simsbury, CT 06089. Copy to David S. Goldstein, Esq., 
Sutherland Asbill & Brennan LLP, 1275 Pennsylvania Avenue, NW., 
Washington, DC 20004-2415.

FOR FURTHER INFORMATION CONTACT: Kenneth C. Fang, Attorney, or Zandra 
Y. Bailes, Branch Chief, Office of Insurance Products, Division of 
Investment Management at (202) 942-0670.

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, 450 Fifth Street, NW., 
Washington, DC 20549-0102 (tel. (202) 942-8090).

Applicants' Representations

    1. Fortis Benefits is a stock life insurance company incorporated 
under the laws of Minnesota. Fortis Benefits is engaged in the 
underwriting and sale of life insurance and annuity products in the 
District of Columbia and all states but New York. Fortis Benefits is a 
wholly-owned indirect subsidiary of Fortis, Inc. As of December 31, 
2001, Fortis Benefits had assets of approximately $10 billion. For 
purposes of the Act, Fortis Benefits is the depositor and sponsor of 
Account D as interpreted by the Commission with respect to variable 
annuity separate accounts.
    2. First Fortis is a stock life insurance company incorporated 
under the laws of New York. First Fortis is engaged in the business of 
writing individual and group life insurance and annuity contracts in 
New York. First Fortis is a wholly-owned subsidiary of Fortis, Inc. As 
of December 31, 2001, First Fortis had assets of approximately $374 
million. For purposes of the Act, First Fortis is the depositor and 
sponsor of Account A as interpreted by the Commission with respect to 
variable annuity separate accounts.
    3. Fortis Benefits established Account D on October 14, 1987 as a 
segregated investment account under Minnesota law. Under Minnesota law, 
the assets of Account D attributable to the Contracts through which 
interests are issued are owned by Fortis Benefits but are held 
separately from all other assets of Fortis Benefits for the benefit of 
the owners of, and the persons entitled to payment under, those 
Contracts. Consequently, such assets in Account D are not chargeable 
with liabilities arising out of any other business that Fortis Benefits 
may conduct. Income, gains, and losses, realized and unrealized, from 
the assets of Account D are credited to or charged against Account D 
without regard to the income, gains, or losses arising out of any other 
business that Fortis Benefits may conduct. Account D is a ``separate 
account'' as defined by Rule 0-1(e) under the Act and is registered 
with the Commission as a unit investment trust (File No. 811-05439), 
and interests in Account D offered through such Contracts have been 
registered under the Securities Act of 1933, as amended (the ``1933 
Act'') on Form N-4 (File No. 33-63935).
    4. First Fortis established Account A on October 1, 1993 as a 
segregated investment account under New York law. Under New York law, 
the assets of Account A attributable to the Contracts through which 
interests are issued are owned by First Fortis but are held separately 
from all other assets of First Fortis for the benefit of the owners of, 
and the persons entitled to payment under, those Contracts. 
Consequently, such assets in Account A are not chargeable with 
liabilities arising out of any other business that First Fortis may 
conduct. Income, gains, and losses, realized and unrealized, from the 
assets of Account A are credited to or charged against Account A 
without regard to the income, gains, or losses arising out of any other 
business that First Fortis may conduct. Account A is a ``separate 
account'' as defined by Rule 0-1(e) under the Act and is registered 
with the Commission as a unit investment trust (File No. 811-08154), 
and interests in Account A offered through such Contracts have been 
registered under the 1933 Act on Form N-4 (File No. 333-20343).
    5. On April 2, 2001, Fortis Benefits and First Fortis consummated 
agreements with Hartford Life and Annuity Insurance Company (``Hartford 
L&A'') and Hartford Life Insurance Company (``Hartford Life''), 
respectively, pursuant to which Hartford L&A and Hartford Life would 
reinsure all of the individual life insurance and annuity business of 
Fortis Benefits and First Fortis, respectively. Additionally, Fortis 
Benefits and First Fortis have contracted the administrative servicing 
obligations for the Contracts to Hartford L&A and Hartford Life, 
respectively. Although Fortis Benefits or First Fortis remains 
responsible for all Contract terms and conditions, Hartford L&A and 
Hartford Life are responsible for administering the Contracts, 
including processing premium payments, paying benefits, providing other 
Contract owner services, oversight of investment management of general 
account assets supporting the fixed account portion of the Contracts, 
and administration of the Accounts. With regard to administration of 
the Accounts, Hartford L&A and Hartford Life are responsible for making 
filings with the Commission, including the preparation and filing of 
applications for orders under section 26(c) of the Act if such becomes 
necessary for Fortis Benefits, First Fortis or the Accounts to respond 
to various contingencies involving underlying funds.
    6. Strong was incorporated in Wisconsin on December 28, 1990. 
Strong is a series investment company as defined by Rule 18f-2 under 
the Act and is registered under the Act as an open-end management 
investment company (File No. 811-6553). Strong issues a separate series 
of shares of stock in connection with each fund and has registered 
these shares under the 1933 Act on Form N-1A (File No. 33-45321). 
Strong Capital Management, Inc. serves as investment adviser to the 
Strong Discovery Fund II (``Discovery''), the Strong International 
Stock Fund II (``Strong International''), and the Strong Mid Cap Growth 
Fund II (``Mid Cap Growth'').
    7. Discovery seeks capital growth. This fund primarily invests in a 
diversified portfolio of common stocks from small-, medium-, and large-
capitalization companies that offer attractive opportunities for 
growth. If market conditions favor fixed-income investments, Discovery 
may invest a significant portion of its assets in intermediate- and 
long-term investment grade bonds as well as in foreign investments to a 
limited extent.

[[Page 69268]]

    8. Strong International seeks capital growth. This fund primarily 
invests in stocks of foreign issuers that appear to have strong growth 
potential relative to their risk.
    9. Mid Cap Growth seeks capital growth. This fund invests at least 
80% of its assets in stocks of medium-capitalization companies that 
have favorable prospects for growth of earnings and capital 
appreciation. Other Mid Cap Growth investments include futures and 
options transactions as well as writing put and call options and 
foreign securities. Except to the extent that Fortis Benefits or First 
Fortis may, from time to time, hold 5% or more of the shares of Mid Cap 
Growth, Mid Cap Growth is not an affiliated person of Fortis Benefits 
or First Fortis.
    10. Alliance was incorporated in Maryland on November 17, 1987. 
Alliance is a series investment company as defined by Rule 18f-2 under 
the Act and is registered under the Act as an open-end management 
investment company (File No. 811-5398). Alliance issues a separate 
series of shares of common stock in connection with each portfolio and 
has registered these shares under the 1933 Act on Form N-1A (File No. 
33-18647). Alliance Capital Management, L.P. serves as investment 
adviser to the International Portfolio (``Alliance International'').
    11. Alliance International seeks a total return on its assets from 
long-term growth of capital. This fund normally invests 80% of its 
assets in a broad portfolio of marketable securities of established 
international companies, companies participating in foreign economies 
with prospects for growth, and foreign government securities, including 
U.S. companies that have their principal activities and interests 
outside the U.S. Except to the extent that Fortis Benefits or First 
Fortis may, from time to time, hold 5% or more of the shares of 
Alliance International, Alliance International is not an affiliated 
person of Fortis Benefits or First Fortis.
    12. The Contracts are individual and group flexible premium 
deferred combination variable and fixed annuity contracts. The 
Contracts provide for the accumulation of values on a variable basis, 
fixed basis, or both, during the accumulation period, and provide 
settlement or annuity payment options on a variable basis, fixed basis, 
or both. Under the Contracts, Fortis Benefits and First Fortis reserve 
the right to substitute shares of one fund for shares of another.
    13. Under the Contracts, a Contract owner may make unlimited 
transfers of all or part of the Contract value from one subaccount to 
another during the accumulation period and four times per year during 
the annuity period. Fortis Benefits and First Fortis currently do not 
assess a charge on transfers; however, Fortis Benefits and First Fortis 
reserve the right to restrict the frequency of, or otherwise condition, 
terminate, or impose charges upon transfers from a subaccount in the 
future.
    14. Fortis Benefits and First Fortis, on their behalf and on behalf 
of the Accounts, propose to substitute: (1) shares of Mid Cap Growth 
for shares of Discovery; and (2) shares of Alliance International for 
shares of Strong International. Applicants believe that by making the 
proposed substitutions, they can better serve the interests of the 
Contract owners.
    15. On April 5, 2001, the board of directors of Discovery and 
Strong International (the ``Board'') voted to close these Funds (the 
``Old Funds'') to new life insurance separate account investors 
effective April 6, 2001. Subsequently, on June 1, 2001, Strong 
Investments, Inc., Strong's distributor, notified Fortis Benefits and 
First Fortis of Strong's intention to terminate its participation 
agreements with them--to the extent that such agreements apply to the 
Old Funds--effective December 2001 and cease the Old Funds' operations 
soon thereafter. Strong Investments, Inc. indicated that the Board 
decided to close the Old Funds because of the Old Funds' small asset 
base, lack of expected asset growth, and lack of economies of scale. 
The Board also requested that all of the insurance companies currently 
having separate accounts invested in the Old Funds, including Fortis 
Benefits and First Fortis, seek an order from the Commission approving 
the substitutions of other securities for shares of Discovery and 
Strong International held currently by these separate accounts. Strong 
Investments, Inc. therefore suggested that closing the Old Funds would 
be best for the Applicants and the Contract owners.
    16. Applicants represent that they had no control over the Board's 
decision to terminate the Old Funds. Further Applicants believe that 
some or all of these other insurance companies will seek an order from 
the Commission to substitute shares of certain securities for shares of 
the Old Funds. Accordingly, Applicants believe that the resulting 
decrease in assets of the Old Funds would likely result in higher 
expenses and less favorable performance, to the detriment of the 
Contract owners.
    17. Mid Cap Growth and Discovery have an identical investment 
objective of capital growth. The investment strategies of both funds 
are somewhat similar; however, they differ in that Discovery invests in 
stocks having a wide range of capitalizations whereas Mid Cap Growth 
invests at least 80% of its assets in medium-capitalization stocks. If 
the market dictates, both funds will place their assets in other types 
of investments: Discovery may invest in intermediate- and long-term 
investment grade bonds, and Mid Cap Growth may invest in futures and 
options transactions and in foreign securities, as well as write put 
and call options. Overall, Applicants believe that both funds have 
substantially similar investment risk profiles; although Mid Cap Growth 
is permitted to invest in more types of investments, some of which 
could entail greater risks than most of the securities in Discovery's 
investment portfolio, Mid Cap Growth's actual portfolio, taken as a 
whole, is quite comparable to that of Discovery. After the proposed 
substitution, Contract owners will still have the ability to invest in 
a fund seeking capital growth through medium-capitalization stocks. 
Applicants believe that Contract owners will be better off with the 
proposed substitution because Mid Cap Growth has more assets and has 
had better performance than Discovery in recent periods.
    18. Discovery has proven unpopular with investors. Over the last 
four years, Discovery has lost 43% of its assets, declining from $214 
million at the end of 1997 to only $121 million as of December 31, 
2001. Although Mid Cap Growth's assets experienced a decline in 2001, 
overall the fund's assets have grown by approximately $321 million over 
the last four years. The large growth in Mid Cap Growth's assets has 
created greater economies of scale than it had when its asset base was 
smaller. Mid Cap Growth currently maintains an expense ratio comparable 
to that of Discovery.
    19. Mid Cap Growth has cumulative four-year returns that surpass or 
are comparable to its benchmark indices, the S&P Mid Cap 400, the 
Russell Midcap Index, and the Lipper Multi-Cap Index, even though Mid 
Cap Growth averaged returns below its benchmark indices last year.
    20. The investment objectives and strategies of Alliance 
International and Strong International are substantially the same as 
they both seek capital growth through foreign investments. Alliance 
International, however, also invests in U.S. companies that have their 
principal activities and interests outside of the U.S. Overall, 
Applicants believe that both Funds have substantially similar 
investment risk

[[Page 69269]]

profiles. In fact, Applicants believe that an investment in Alliance 
International would generally entail less risk than would an investment 
in Strong International in that Alliance International may invest in a 
broader spectrum of investments leading to greater diversification and 
correspondingly less risk. After the proposed substitution, Contract 
owners will still have the ability to invest in a fund that invests in 
the stocks of issuers located or doing business in foreign countries. 
Applicants believe that Contract owners will be better off with the 
proposed substitution because Alliance International has more assets, 
lower expenses, and better performance than Strong International.
    21. Alliance International's expense ratio has consistently been 
lower than Strong International's expense ratio over the last four 
years. Alliance International has an expense ratio of 1.44% as of 
December 31, 2001. However, because of expense caps, Contract owners 
only paid 0.95%.
    22. Alliance International has performed on par with its benchmark 
index, the MSCI EAFE Index. Whereas Alliance International has a five-
year cumulative return of 0.38%, its benchmark index returned 0.90% 
over the same period. Last year, Alliance International and its 
benchmark posted somewhat comparable losses of -22.35% and -21.21% 
respectively.
    23. The following charts show the approximate year-end size (in net 
assets), expense ratio (ratio of operating expenses as a percentage of 
average net assets), and annual total returns for each of the past five 
years for each of the funds.

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                                                                                  In percent
                                                             ---------------------------------------------------
                                                                Expense
                                                  Net assets     ratio
                                                 at year-end    (before       Actual     Management     Total
                                                  (millions)   imposition    expense        fee         return
                                                               of expense     ratio
                                                                 caps)
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Strong Discovery Fund II:
    1997.......................................         $214          1.2          1.2         1.00         11.4
    1998.......................................          196          1.2          1.2         1.00          7.3
    1999.......................................          152          1.2          1.1         1.00          5.1
    2000.......................................          136          1.3          1.2         1.00          4.4
    2001.......................................          121          1.2          1.2         1.00          4.1
Strong Mid Cap Growth Fund II:
    1997.......................................            2          2.0          1.2         1.00         29.8
    1998.......................................           18          1.6          1.2         1.00         28.7
    1999.......................................          324          1.2          1.1         1.00         89.9
    2000.......................................          531          1.2          1.2         1.00        -14.8
    2001.......................................          323          1.4          1.2         0.75        -30.8
Strong International Stock Fund II:
    1997.......................................           60          1.5          1.5         1.00       -13.50
    1998.......................................           47          1.6          1.6         1.00        -4.80
    1999.......................................          125          1.3          1.2         1.00        87.20
    2000.......................................           55          1.6          1.2         1.00       -39.50
    2001.......................................           33          1.5          1.0         1.00       -22.10
Alliance International Portfolio:
    1997.......................................           61         1.42         0.95         0.53         3.33
    1998.......................................           65         1.37         0.95         0.67        13.02
    1999.......................................           81         1.36         0.95         0.69        40.23
    2000.......................................           79         1.34         0.95         0.69       -19.86
    2001.......................................           64         1.44         0.95         0.61       -22.35
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    24. Prior to the date the substitution is effected, Fortis Benefits 
and First Fortis will send Contract owners a current prospectus for 
Alliance International and Mid Cap Growth (the ``New Funds''). In 
addition, by supplements to the various prospectuses for the Contracts 
and the Accounts, Fortis Benefits and First Fortis will notify all 
owners of the Contracts of their intention to take the necessary 
actions, including seeking the orders requested by the Application, to 
substitute shares of the Funds as described herein. The supplements 
will inform Contract owners that until the date of the proposed 
substitutions, owners are permitted to make one transfer of all amounts 
under a Contract invested in any one of the affected subaccounts on the 
date of the supplement to another subaccount under a Contract (other 
than the other affected subaccount) without that transfer being treated 
as a transfer for the purpose of assessing transfer charges or for 
determining the number of remaining permissible transfers in a Contract 
year. The supplements also will inform Contract owners that Fortis 
Benefits and First Fortis will not exercise any rights reserved under 
any Contract to impose additional restrictions on transfers until at 
least 30 days after the proposed substitutions.
    25. Fortis Benefits and First Fortis will redeem the shares: (1) Of 
Discovery for cash and use the redemption proceeds to purchase shares 
of Mid Cap Growth; and (2) of Strong International for cash and use the 
redemption proceeds to purchase shares of Alliance International. The 
proposed substitutions will take place at relative net asset value with 
no change in the amount of any Contract owner's Contract value or in 
the dollar value of his or her investment in either of the Accounts. As 
a result, Contract owners will remain fully invested. Contract owners 
will not incur any fees or charges as a result of the proposed 
substitutions, nor will their rights or Fortis Benefits' and First 
Fortis' obligations under the Contracts be altered in any way. All 
expenses incurred in connection with the proposed substitutions, 
including legal, accounting, brokerage, and other fees and expenses, 
will be the responsibility of Fortis Benefits and/or First Fortis. In 
addition, the proposed substitutions will not impose any tax liability 
on Contract owners. The proposed substitutions will not cause the 
Contract fees and charges currently being paid by

[[Page 69270]]

existing Contract owners to be greater after the proposed substitutions 
than before the proposed substitutions. The proposed substitution will 
not, of course, be treated as a transfer for the purpose of assessing 
transfer charges or for determining the number of remaining permissible 
transfers in a Contract year. Fortis Benefits and First Fortis will not 
exercise any right they may have under the Contracts to impose 
additional restrictions on transfers under any of the Contracts for a 
period of at least 30 days following the substitutions. Contract owners 
having Contract value transferred to a New Fund by the proposed 
substitutions, may transfer out of the subaccount investing in that 
Fund during the 30 days following the date of the proposed 
substitutions without that transfer being treated as a transfer for the 
purpose of assessing transfer charges or for determining the number of 
remaining permissible transfers in a Contract year.
    26. In addition to the supplements described above, Fortis Benefits 
and First Fortis will, if necessary, by supplements to the various 
prospectuses for the Contracts and the Accounts, notify all owners of 
the Contracts of the substitutions immediately after they occur.
    27. In addition to the prospectus supplements distributed to 
Contract owners, within five days after the proposed substitution, any 
Contract owners who were affected by the substitutions will be sent a 
written notice informing them that the substitution was carried out and 
that they may transfer to another subaccount. Contract value invested 
in one of the affected subaccounts may be transferred free of charge 
for 30 days following the date of the substitutions without that 
transfer counting as one of a limited number of transfers permitted in 
a Contract year or as one of a limited number of transfers permitted in 
a Contract year. The notice will also reiterate the fact that Fortis 
Benefits and First Fortis will not exercise any rights reserved by them 
under the Contracts to impose additional restrictions on transfers 
until at least 30 days after the proposed substitutions. The notice 
will be preceded or accompanied by current prospectuses for the 
Alliance International and Mid Cap Growth.

Applicants' Legal Analysis

    1. Section 26(c) was added to the Act by the Investment Company 
Amendments of 1970. Prior to the enactment of the 1970 amendments, a 
depositor of a unit investment trust could substitute new securities 
for those held by the trust by notifying the trust's security holders 
of the substitution within five days of the substitution. In 1966, the 
Commission, concerned with the high sales charges then common to most 
unit investment trusts and the disadvantageous position in which such 
charges placed investors who did not want to remain invested in the 
substituted fund, recommended that section 26 be amended to require 
that a proposed substitution of the underlying investments of a trust 
receive prior Commission approval.
    2. Congress responded to the Commission's concerns by enacting 
section 26(c) to require that the Commission approve all substitutions 
by the depositor of investments held by unit investment trusts.
    3. The proposed substitutions appear to involve the substitution of 
securities within the meaning of section 26(c) of the Act. Applicants 
therefore request an order from the Commission pursuant to section 
26(c) approving the proposed substitutions.
    4. Applicants state that the Contracts expressly reserve for Fortis 
Benefits and First Fortis the right, subject to compliance with 
applicable law, to substitute shares of another management company for 
shares of a management company held by a subaccount of the Accounts. 
Applicants state that Fortis Benefits and First Fortis reserved this 
right of substitution both to protect themselves and their Contract 
owners in situations where either might be harmed or disadvantaged by 
circumstances surrounding the issuer of the shares held by one or more 
of their separate accounts and to afford the opportunity to replace 
such shares where to do so could benefit themselves and Contract 
owners.
    5. In addition to the foregoing, Applicants generally submit that 
the proposed substitutions meet the standards that the Commission and 
its staff have applied to similar substitutions that have been approved 
in the past.
    6. Applicants further assert that the proposed substitutions are 
not the type of substitutions that section 26(c) was designed to 
prevent. Unlike traditional unit investment trusts where a depositor 
could only substitute an investment security in a manner which 
permanently affected all the investors in the trust, the Contracts 
provide each Contract owner with the right to exercise his or her own 
judgment and transfer Contract or cash values into other subaccounts. 
Moreover, the Contracts 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. Applicants 
believe the proposed substitutions, therefore, will not result in the 
types of costly forced redemption that section 26(c) was designed to 
prevent.
    7. Applicants also believe that the proposed substitutions are 
unlike the type of substitutions that section 26(c) was designed to 
prevent in that by purchasing a Contract, Contract owners select much 
more than a particular investment company in which to invest their 
account values. They also select the specific type of insurance 
coverage offered by Fortis Benefits and First Fortis under their 
Contract as well as numerous other rights and privileges set forth in 
the Contract. Contract owners may also have considered Fortis Benefits' 
and First Fortis' size, financial condition, type, and reputation for 
service in selecting their Contract. Applicants state that these 
factors will not change as a result of the proposed substitutions.
    8. Fortis Benefits and First Fortis will not receive, for three 
years from the date of the substitutions, any direct or indirect 
benefits from the New Funds, their advisers or underwriters, or from 
affiliates of the New Funds, their advisers or underwriters, in 
connection with assets attributable to the Contracts affected by the 
substitutions, at a higher rate than each received from the Old Funds, 
their advisers or underwriters, or from affiliates of the Old Funds, 
their advisers or underwriters, including without limitation Rule 12b-1 
fees, shareholder service or administrative or other service fees, 
revenue sharing or other arrangements. Fortis Benefits and First Fortis 
each represent that the substitutions it carries out and its selection 
of New Funds was not motivated by any financial consideration paid or 
to be paid to it or to any of its affiliates by any of the New Funds, 
their advisers or underwriters, or by affiliates of the New Funds, 
their advisers or underwriters.
    9. Applicants request an order of the Commission pursuant to 
section 26(c) of the Act approving the proposed substitutions by Fortis 
Benefits and First Fortis. Applicants submit that, for all the reasons 
stated above, the proposed substitutions are consistent with the 
protection of investors and the purposes fairly intended by the policy 
and provisions of the Act.
    For the reasons summarized above, Applicants assert that the 
proposed substitutions are consistent with the protection of investors 
and the purposes fairly intended by the policy and provisions of the 
Act and therefore request that the substitutions be granted.


[[Page 69271]]


    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-29040 Filed 11-14-02; 8:45 am]
BILLING CODE 8010-01-P