[Federal Register Volume 67, Number 229 (Wednesday, November 27, 2002)]
[Notices]
[Pages 70983-70985]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-30037]


=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Rel. No. IC-25828; File No. 812-12899]


AIG Life Insurance Company, et al.

November 20, 2002.
AGENCY: Securities and Exchange Commission (``SEC'' or ``Commission'').

ACTION: Notice of an application for an order pursuant to Section 6(c) 
of the Investment Company Act of 1940 (the ``Act'') granting exemptions 
from the provisions of Sections 2(a)(32), 22(c) and 27(i)(2)(A) of the 
Act and Rule 22c-1 thereunder.

-----------------------------------------------------------------------

APPLICANTS: AIG Life Insurance Company (``AIG Life'') and its Variable 
Account I (the ``Variable Account''), American International Life 
Insurance Company of New York (``AIL''), AIG SunAmerica Life Assurance 
Company (``AIG SunAmerica'') and its separate account Variable Annuity 
Account Nine (``Variable Account Nine''), First SunAmerica Life 
Insurance Company (``FSLIC'') and its separate account FS Variable 
Separate Account (``FS Separate Account''), The Variable Annuity Life 
Insurance Company (``VALIC'') and its separate account VALIC Separate 
Account (``VALIC Separate Account''), and AIG Equity Sales Corp. 
(``AIGESC'') (collectively, the ``Applicants'').

SUMMARY OF APPLICATION: Applicants seek an order under Section 6(c) of 
the Act to amend an existing order (Investment Company Act Release No. 
24748, dated November 22, 2000, File No. 812-11982) (``Existing 
Order'') to:
    a. Extend the Existing Order to AIG SunAmerica, Variable Account 
Nine, FSLIC, FS Separate Account, VALIC and VALIC Separate Account 
(collectively ``Additional Applicants'') (AIG SunAmerica, FSLIC and 
VALIC are collectively referred to herein as ``Additional Life Company 
Applicants'') (Variable Account Nine, FS Separate Account and VALIC 
Separate Account are collectively referred to herein as ``Accounts'');
    b. Permit, under specific circumstances, the recapture of certain 
credits applied to premium payments made under the flexible premium 
deferred variable annuity contracts (``Contracts'') to be issued by 
Additional Applicants;
    c. Extend the relief granted by the Existing Order to any National 
Association of Securities Dealers, Inc. (``NASD'') member broker-dealer 
controlling or controlled by, or under common control with, any 
Additional Life Company Applicant, whether existing or created in the 
future, that serves as a distributor or principal underwriter of the 
Contracts offered by Additional Applicants (collectively ``Affiliated 
Broker-Dealers'');
    d. Expand the definition of ``Future Contracts'' to include 
contracts to be issued by any Additional Life Company Applicants that 
are substantially similar in all material respects to the deferred 
variable annuity contracts covered by the Existing Order; and
    e. Expand the definition of ``Other Accounts'' to include any 
existing or future separate accounts of Additional Life Company 
Applicants.

FILING DATE: The application was filed on October 28, 2002.

HEARING OR NOTIFICATION OF HEARING: An order granting the application 
will be issued unless the SEC orders a hearing. Interested persons may 
request a hearing by writing to the SEC's Secretary and serving 
Applicants with a copy of the request, personally or by mail. Hearing 
requests should be received by the SEC by 5:30 p.m. on December 16, 
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 who wish to 
be notified of a hearing may request notification by writing to the 
SEC's Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth Street, NW., Washington DC 20549-
0609. Applicants: Christine A. Nixon, Esq., AIG SunAmerica Life 
Assurance Company, 1 SunAmerica Center, Los Angeles, California 90067-
6002.

FOR FURTHER INFORMATION CONTACT: Kenneth C. Fang, Attorney, or Zandra 
Y. Bailes, Branch Chief, Office of Insurance

[[Page 70984]]

Products, Division 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 
SEC's Public Reference Branch, 450 Fifth Street, NW., Washington DC 
20549-0102 (tel. (202) 942-8090).

Applicants' Representations

    1. On November 22, 2000, the Commission issued the Existing Order 
exempting certain transactions of AIG Life, AIL, Variable Account, 
AIGESC (``Original Applicants'') and certain future accounts of AIG 
Life and AIL from the provisions of Section 2(a)(32), 22(c) and 
27(i)(2)(A) of the Act and Rule 22c-1 thereunder to the extent 
necessary to permit AIG Life and AIL to recapture under specified 
circumstances, certain credits (``Credits'') applied to premium 
payments made under a flexible deferred variable annuity contract that 
AIG Life issues through the Variable Account (the ``AIG Contract'') as 
well as other contracts that AIG Life or AIL may issue in the future 
through their existing or future separate accounts that are 
substantially similar in all material respects to the AIG Contract 
described in the application for the Existing Order (``Initial 
Application'').
    2. AIG SunAmerica was formerly known as Anchor National Life 
Insurance Company and is in the process of changing its name to AIG 
SunAmerica Life Assurance Company. Like AIG Life and AIL, AIG 
SunAmerica is an indirect, wholly owned subsidiary of American 
International Group, Inc. (``AIG''), a Delaware corporation. AIG 
SunAmerica is the depositor for Variable Account Nine, which was 
established pursuant to Arizona law on February 4, 2002. AIG SunAmerica 
may establish one or more additional Other Accounts for which it will 
serve as depositor.
    3. Variable Account Nine is a segregated asset account of AIG 
SunAmerica. Variable Account Nine is registered with the Commission 
under the Act as a unit investment trust. Variable Account Nine will 
fund the variable benefits available under the AIG SunAmerica 
contracts. Units of interest of Variable Account Nine under the AIG 
SunAmerica Contracts will be registered under the Securities Act of 
1933 (``1933 Act''). AIG SunAmerica may issue Future Contracts through 
Variable Account Nine.
    4. FSLIC is a stock life insurance company organized under the laws 
of the state of New York on December 5, 1928. FSLIC conducts a life 
insurance and annuity business in the state of New York. It is an 
indirect, wholly owned subsidiary of AIG. FSLIC may establish one or 
more additional Other Accounts for which it will serve as depositor.
    5. FS Variable Separate Account is a segregated asset account of 
FSLIC. FS Variable Separate Account is registered with the Commission 
under the Act as a unit investment trust. FS Variable Separate Account 
will fund the variable benefits available under the AIG SunAmerica 
contract. Units of interest of Variable Account Nine under the AIG 
SunAmerica Contracts will be registered under the 1933 Act. FSLIC may 
issue Future Contracts through FS Variable Separate Account.
    6. VALIC is a stock life insurance company originally organized as 
The Variable Annuity Life Insurance Company of America, located in 
Washington, DC, and reorganized under the laws of the state of Texas on 
August 20, 1968. It is also an indirect, wholly owned subsidiary of 
AIG. VALIC may establish one or more additional Other Accounts for 
which it will serve as depositor.
    7. VALIC Separate Account is a segregated asset account of VALIC. 
VALIC Separate Account will fund the variable benefits available under 
the VALIC contracts. Units of interest of VALIC Separate Account under 
the VALIC contracts will be registered under the 1933 Act. VALIC may 
issue Future Contracts through VALIC Separate Account.
    8. That portion of the assets of Variable Account Nine, FS Variable 
Separate Account and VALIC Separate Account (``Additional Separate 
Account Applicants'') that are equal to the reserves and other contract 
liabilities with respect to the respective separate accounts are not 
chargeable with liabilities arising out of any other business of the 
respective life insurance company. Any income, gains or losses, 
realized or unrealized, from assets allocated to the respective 
separate accounts are, in accordance with the contract, credited to or 
charged against the separate account without regard to other income, 
gains or losses of the life insurance company. The same will be true 
for any other Future Account of any Additional Life Company Applicant.
    9. Each of the Additional Separate Account Applicants and any Other 
Accounts established by the Additional Life Company Applicants will be 
registered with the Commission under the Act as a unit investment 
trust. Units of interest in the separate accounts they fund will be 
registered under the 1933 Act. That portion of the assets of each of 
the respective Accounts that is equal to the reserves and other 
contract liabilities with respect to the Account is not chargeable with 
liabilities arising out of any other business of the life insurance 
company. Any income, gains or losses, realized or unrealized, from 
assets allocated to the Account are, in accordance with the contract, 
credited to or charged against the Account, without regard to other 
income, gains or losses of the life company. The same will be true for 
any Other Account.
    10. But for the depositor and issuing separate account, the 
Contracts to be issued by Additional Life Company Applicants are 
substantially similar in all material respects to the AIG Contract 
described in the Initial Application. Future Contracts will be 
substantially similar in all material respects to the contracts covered 
in the Existing Order.
    11. Additional Applicants will recapture Credits under the 
Contracts under the same circumstances covered by the Existing Order. 
The Existing Order grants exemptions from Sections 2(a)(32), 22(c) and 
27(i)(2)(A) of the Act and Rule 22c-1 thereunder to the extent 
necessary to permit the recapture of Credits in the following 
instances:
    (i) When an owner exercises the contract's free look provision;
    (ii) when a death benefit is payable within twenty-four months 
after receipt of a Credit; and
    (iii) when a surrender is requested within twenty-four months after 
receipt of a Credit. If the surrender is a partial surrender during the 
twenty-four month period following receipt of a Credit, except as part 
of the contract's systematic withdrawal program, Additional Life 
Company Applicants will reduce the Credit in the same proportion as the 
partial surrender bears to the value of the contract, less the Credit, 
and deduct it from the value of the contract.
    Regardless of whether or not the Credit is vested, all gains or 
losses attributable to such Credit are part of the owner's contract 
value and are vested immediately. Applicants represent that the Credit 
and the applicable provisions relating to the Credit are substantially 
similar in all material respects as for Original Applicants.

Applicants' Legal Analysis

    1. Section 6(c) of the Act authorizes the Commission to exempt any 
person, security or transaction, or any class or classes of persons, 
securities or transactions from the provision of the 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

[[Page 70985]]

investors and the purposes fairly intended by the policy and provisions 
of the Act. Applicants request that the Commission, pursuant to Section 
6(c) of the Act, grant exemptions summarized above with respect to 
Additional Applicants and any Other Accounts that the Additional Life 
Company Applicants have established or may establish in the future, in 
connection with the issuance of contracts that are substantially 
similar in all material respects to the AIG Contract described in the 
Initial Application. Applicants believe that the requested exemptions 
are appropriate in the public interest and consistent with the 
protection of investors and the purposes fairly intended by the policy 
and provisions of the Act.
    2. Applicants submit that the recapture of the Credits by 
Additional Applicants will not raise concerns under Section 2(a)(32), 
22(c) and 27(i)(2)(A) of the Act and Rule 22c-1 thereunder for the same 
reasons given in support of the Existing Order. The Credits will be 
recapturable under the same circumstances and on the same basis as 
described in the Initial Application.
    Based on the grounds summarized above, Applicants submit that their 
exemptive request meets the standards set out in Section 6(c) of the 
Act, namely, that the exemptions requested are 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 
Act, and that, therefore, the Commission should grant the requested 
order.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-30037 Filed 11-26-02; 8:45 am]
BILLING CODE 8010-01-P