[Federal Register Volume 69, Number 56 (Tuesday, March 23, 2004)]
[Notices]
[Pages 13602-13604]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-6451]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-26389; File No. 812-13048]


Glenbrook Life and Annuity Company, et al.; Notice of Application

March 17, 2004.
AGENCY: Securities and Exchange Commission (``SEC'' or ``Commission'').

ACTION: Notice of an application for an order of exemption pursuant to 
section 17(b) of the Investment Company Act of 1940 (the ``Act'') from 
section 17(a) of the Act.

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    Applicants: Glenbrook Life and Annuity Company (``Glenbrook'') and 
Glenbrook Life Multi-Manager Variable Account (``Glenbrook Multi-
Manager''), Glenbrook Life Variable Life Separate Account A 
(``Glenbrook VL''), Glenbrook Life and Annuity Company Variable Annuity 
Account (``Variable Annuity Account''), Glenbrook Life Scudder Variable 
Account A (``Scudder Account''), and Glenbrook Life AIM Variable Life 
Separate Account A (``AIM VL Account'') (collectively, the ``Separate 
Accounts'').
    Summary of Application: Applicants seek an order of exemption to 
the extent necessary to permit a transfer of assets and assumption of 
liabilities of (1) Variable Annuity Account and Scudder Account by 
Glenbrook Multi-Manager; and (2) AIM VL Account by Glenbrook VL.
    Filing Date: The application was filed on November 25, 2003, and 
amended and restated on March 10, 2004.
    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 April 12, 2004, 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, DC 20549. Applicants, Charles Smith, Esq., 
Assistant Counsel, Glenbrook Life and Annuity Company, 3100 Sanders 
Road, Northbrook, Illinois 60062.

FOR FURTHER INFORMATION CONTACT: Alison White, Senior Counsel, or Lorna 
MacLeod, 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 is available for a fee from the 
Public Reference Branch of the Commission.

Applicants' Representations

    1. Glenbrook is a stock life insurance company organized under the 
laws of the State of Arizona in 1998. Previously, Glenbrook Life was 
organized under the laws of the State of Illinois in 1992. Glenbrook 
Life was originally organized under the laws of the State of Indiana in 
1965. From 1965 to 1983 Glenbrook Life was known as ``United Standard 
Life Assurance Company'' and from 1983 to 1992 as ``William Penn Life 
Assurance Company of America.'' Glenbrook's home office is located at 
3100 Sanders Road, Northbrook, Illinois, 60062. Glenbrook is currently 
licensed to operate in the District of Columbia, Puerto Rico, and all 
states except New York. Glenbrook is a direct, wholly owned subsidiary 
of Allstate Life Insurance Company. Allstate Life Insurance Company is 
a wholly owned subsidiary of Allstate Insurance Company, a stock 
property-liability insurance company incorporated under the laws of 
Illinois. All of the outstanding capital stock of Allstate Insurance 
Company is owned by The Allstate Corporation.
    2. Glenbrook established Glenbrook Multi-Manager, Glenbrook VL, 
Variable Annuity Account, Scudder Account, and AIM VL Account as 
separate account pursuant to Illinois law. Each is a ``separate 
account,'' as defined by section 2(a)(37) of the Act, and is registered 
with the Commission pursuant to the Act as a unit investment trust.
    3. Certain variable annuity contracts sponsored by Glenbrook and 
issued through Glenbrook Multi-Manager, Variable Annuity Account and 
Scudder Account are registered with the Commission pursuant to the 
Securities Act of 1933 (the ``Securities Act'').
    4. Certain variable life insurance contracts sponsored by Glenbrook 
and issued through Glenbrook VL and AIM VL Account are registered with 
the Commission pursuant to the Securities Act.
    5. Glenbrook Multi-Manager is divided into 88 sub-accounts, each of 
which invests exclusively in shares of a corresponding portfolio of an 
open-end, diversified management investment company registered under 
the Act (the ``Funds''). Variable Annuity Account is divided into 39 
sub-accounts, each of which invests exclusively in shares of a 
corresponding portfolio of the Funds. Scudder Account is divided into 
10 sub-accounts, each of which invests exclusively in shares of a 
corresponding portfolio of the Funds.
    6. Glenbrook VL is divided into 57 sub-accounts, each of which 
invests exclusively in shares of a corresponding portfolio of the 
Funds. AIM VL Account is divided into 18 sub-accounts, each of which 
invests exclusively in shares of a corresponding portfolio of the 
Funds.
    7. After considering the nature and purpose of each separate 
account, the Boards of Directors of Glenbrook has determined that the 
efficiency of the operations of the separate accounts could be 
improved, and the overall administration enhanced, by merging: (a) 
Variable Annuity Account and Scudder Account into Glenbrook Multi-
Manager; and (b) AIM VL Account into Glenbrook VL (together, the 
``Merger'').

[[Page 13603]]

The Merger will be structured so there will be no change in the rights 
and benefits of persons having an interest in any of the Contracts 
issued by those Separate Accounts.
    8. The Merger provides for the transfer of Variable Annuity Account 
and Scudder Account assets to Glenbrook Multi-Manager and the 
assumption of the liabilities and contractual obligations of each of 
Variable Annuity Account and Scudder Account by Glenbrook Multi-Manager 
in return for the crediting of accumulation units of Glenbrook Multi-
Manager to Variable Annuity Account and Scudder Account contract 
owners. Once this process has been completed, the units of Variable 
Annuity Account and Scudder Account would be cancelled, Variable 
Annuity Account and Scudder Account would each submit an application to 
the Commission pursuant to section 8(f) of the Act to effect its 
deregistration as an investment company and would cease to exist, and 
Glenbrook Multi-Manager would continue to exist.
    9. Immediately following the Merger, each Variable Annuity Account 
and Scudder Account contract owner will possess a number of Glenbrook 
Multi-Manager units (both full and fractional) that, when multiplied by 
the unit value of Glenbrook Multi-Manager units, would result in an 
aggregate unit value equal to the aggregate unit value of the units the 
contract owner had in the respective Separate Account immediately 
before the consummation of the Merger.
    10. Glenbrook will distribute to each existing Variable Annuity 
Account and Scudder Account contract owner: (a) A contract rider 
indicating that such contracts are thereafter funded by Glenbrook 
Multi-Manager; (b) a letter informing such contract owners of the 
Merger; and (c) a prospectus supplement that reflects Glenbrook Multi-
Manager as the separate account funding the contracts.
    11. The Merger also provides for the transfer of AIM VL Account 
assets to Glenbrook VL and the assumption of the liabilities and 
contractual obligations of AIM VL Account by Glenbrook VL in return for 
the crediting of accumulation units of Glenbrook VL to AIM VL Account 
contract owners. Once this process has been completed, the units of AIM 
VL Account would be cancelled, AIM VL Account would submit an 
application to the Commission pursuant to section 8(f) of the Act to 
effect its deregistration as an investment company and would cease to 
exist, and Glenbrook VL would continue to exist.
    12. Immediately following the Merger, each AIM VL Account contract 
owner will possess a number of Glenbrook VL units (both full and 
fractional) that, when multiplied by the unit value of Glenbrook VL 
units, would result in an aggregate unit value equal to the aggregate 
unit value of the units the contract owner had in the respective 
Separate Account immediately before the consummation of the Merger.
    13. Glenbrook will distribute to each existing AIM VL Account 
contract owner: (a) A contract rider indicating that such contracts are 
thereafter funded by Glenbrook VL; (b) a letter informing such contract 
owners of the Merger; and (c) a prospectus supplement that reflects 
Glenbrook VL as the separate account funding the contracts.
    14. Except for the change in the separate account funding the 
variable annuity contracts and variable life contracts, all the rights 
and benefits of the contract owners will remain unchanged after the 
Merger. Further, the fees and charges under the contracts will not 
change as a result of the Merger.
    15. Glenbrook asserts that the Merger will have no tax consequences 
for Glenbrook contract owners. In addition, no payments will be 
required or charges imposed under the Glenbrook contracts in connection 
with, or by virtue of, the Merger that would not otherwise be required 
or imposed.

Applicants' Legal Analysis

    1. Section 17(a) of the Act provides generally that it is unlawful 
for any affiliated person of a registered investment company, or any 
affiliated person of such a person, acting as principal to knowingly 
purchase or to sell any security or other property from or to such 
registered company.
    2. Section 17(b) of the Act provides generally that the Commission 
may grant an order exempting a transaction otherwise prohibited by 
section 17(a) of the Act if evidence establishes that: (a) The terms of 
the proposed transaction, including the consideration to be paid or 
received, are reasonable and fair and do not involve overreaching on 
the part of any person concerned; (b) the proposed transaction is 
consistent with the policy of each registered investment company 
concerned; and (c) the proposed transaction is consistent with the 
general purposes of the Act.
    3. The Merger may be subject to the provisions of section 17(a) of 
the Act because it could be viewed as involving an investment company 
(VA Account, Scudder Account, AIM VL Account) selling its assets to 
another investment company (Glenbrook Multi-Manager, Glenbrook VL) that 
is affiliated by reason of having sponsoring insurance companies that 
are under common control, or by reason of having common directors.
    4. Applicants request an order of the Commission pursuant to 
section 17(b) of the Act to the extent necessary to exempt the Merger 
from the provisions of section 17(a) of the Act.
    5. Applicants assert that the terms of the Merger are fair and 
reasonable. The transfer of assets held by Variable Annuity Account, 
Scudder Account and AIM VL Account respectively, will be made at the 
relative net asset values of the sub-accounts. Consequently, the 
interests of Glenbrook Multi-Manager and Glenbrook VL owners will not 
be diluted by the Merger. Each Variable Annuity Account and Scudder 
Account contract will be credited, immediately after the Merger, with 
units of Glenbrook Multi-Manager having the same aggregate value as the 
aggregate value of the units of Variable Annuity Account and Scudder 
Account credited to such contract immediately prior to the Merger. 
Likewise, each AIM VL Account contract will be credited, immediately 
after the Merger, with units of the Glenbrook VL having the same 
aggregate value as the aggregate value of the units of AIM VL Account 
credited to such contract immediately prior to the Merger. The Merger 
will not result in any change in charges, costs, fees or expenses borne 
by any Contract owner. No direct or indirect costs will be incurred by 
any Separate Account concerned as a result of the Merger. Therefore, 
the proposed transactions will not result in dilution of the economic 
interests of any Contract owners. In addition, the Merger will result 
in no change in the investment options available to Glenbrook contract 
owners. Each sub-account of the Separate Accounts will continue to 
invest in the same Fund as that sub-account invested in prior to the 
Merger.
    6. The consolidation of any overlapping sub-accounts will take 
place at their respective net asset values and each Glenbrook Contract 
owner holding units of interest in one of the merging sub-accounts will 
have those units exchanged for units of equal value in the 
corresponding surviving sub-account. The values of the exchanged 
interests under the Contracts will thus be equivalent. The accumulation 
unit values for these sub-accounts will not change, and the Contract 
value of any affected Contract owner immediately after the sub-account 
consolidation will be the same as the value immediately before the sub-
account consolidation.
    7. Applicants assert that the Merger do not involve overreaching on 
the part of any party involved and is consistent with the general 
purposes of the Act.

[[Page 13604]]

The purposes of the Merger are to consolidate three variable annuity 
separate accounts, each of which issue variable annuity contracts, into 
a single separate account and to consolidate two variable life separate 
accounts, each of which issue variable life contracts, into a single 
separate account. The Merger will allow for administrative efficiencies 
and cost savings by Glenbrook because it can consolidate its separate 
account operations. The Merger will not dilute or otherwise adversely 
affect the economic interests of the owners of the Glenbrook contracts, 
nor will the Merger affect the values determined under the Glenbrook 
contracts.
    8. Applicants represent that the Merger are consistent with the 
policy of each Separate Account as set forth in its registration 
statement. The policy of each Separate Account is to invest in the 
Funds. As noted above, the Merger will result in no change to any Fund 
underlying the Glenbrook Separate Accounts. Each sub-account of the 
Separate Accounts will continue to invest in the same Fund as that sub-
account invested in prior to the Merger. Accordingly, the assets 
underlying the Contracts will continue to be invested in accordance 
with the policies recited in the Separate Accounts' respective 
registration statements.

Conclusion

    For the reasons summarized above, Applicants assert that the terms 
of the Merger, including the consideration to be paid or received, are 
reasonable and fair and do not involve overreaching on the part of any 
person concerned, are consistent with the policies of the Glenbrook 
Separate Accounts as recited in their registration statements, are 
consistent with the general purposes of the Act, and therefore meet the 
conditions for exemptive relief established by section 17(b).

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-6451 Filed 3-22-04; 8:45 am]
BILLING CODE 8010-01-P