[Federal Register Volume 69, Number 227 (Friday, November 26, 2004)]
[Notices]
[Pages 68983-68986]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-3334]


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SECURITIES AND EXCHANGE COMMISSION

[Rel. No. IC-26659; File No. 812-13131]


Allstate Life Insurance Company, et al.; Notice of Application

November 19, 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: Allstate Life Insurance Company (``Allstate''), Allstate 
Financial Advisors Separate Account I (``Allstate Separate Account 
I''), Allstate Life Variable Life Separate Account A (``Allstate VL 
Account''), Glenbrook Life and Annuity Company (``Glenbrook''), 
Glenbrook Life Multi-Manager Variable Account (``Glenbrook Multi-
Manager''), Glenbrook Life and Annuity Company Separate Account A 
(``Glenbrook Separate Account A''), and Glenbrook Life Variable Life 
Separate Account A (``Glenbrook VL'').

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) Glenbrook Multi-Manager and Glenbrook Separate 
Account A by Allstate Separate Account I; and (2) Glenbrook VL Account 
by Allstate VL Account.

FILING DATE: The application was filed on October 14, 2004 and amended 
and restated on November 15, 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 December 14, 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

[[Page 68984]]

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, Allstate Life Insurance 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. Allstate is a stock life insurance company organized under the 
laws of the State of Illinois in 1957. Allstate's home office is 
located at 3100 Sanders Road, Northbrook, Illinois, 60062. Allstate is 
licensed to operate in the District of Columbia, Puerto Rico, and all 
states except New York. Allstate 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. Allstate established Allstate Separate Account I and Allstate VL 
Account (``Allstate Separate Accounts'') as separate accounts 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 and variable life insurance contracts 
sponsored by Allstate and issued through Allstate Separate Accounts 
(``Allstate contracts'') are registered with the Commission pursuant to 
the Securities Act of 1933 (the ``Securities Act'').
    4. Allstate Separate Account I is divided into 146 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''). Allstate VL is divided into 
19 sub-accounts, each of which invests exclusively in shares of a 
corresponding portfolio of the Funds.
    5. 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.
    6. Glenbrook established Glenbrook Multi-Manager, Glenbrook 
Separate Account A, and Glenbrook VL Account (collectively, the 
``Glenbrook Separate Accounts'') as separate accounts pursuant to 
Illinois law, and the Separate Accounts are currently subject to 
Arizona law following Glenbrook's redomestication to Arizona in 1998. 
Each is a ``separate account,'' as defined by Section 2(a)(37) of the 
Act, and each is registered with the Commission pursuant to the Act as 
a unit investment trust.
    7. Certain variable annuity and variable life insurance contracts 
sponsored by Glenbrook and issued through the Glenbrook Separate 
Accounts are registered with the Commission pursuant to the Securities 
Act.
    8. Glenbrook Multi-Manager is divided into 97 sub-accounts, each of 
which invests exclusively in shares of a corresponding portfolio the 
Funds. Glenbrook Separate Account A is divided into 36 sub-accounts, 
each of which invests exclusively in shares of a corresponding 
portfolio of the Funds. Glenbrook VL Account is divided into 63 sub-
accounts, each of which invests exclusively in shares of a 
corresponding portfolio of the Funds.
    9. Allstate and Glenbrook have determined to engage in transactions 
whereby Glenbrook will be reorganized with and merged into Allstate, 
with Allstate as the surviving corporation (such transactions, 
collectively, the ``Merger''). By resolutions dated August 3, 2004 and 
August 4, 2004, a Merger Agreement and Articles of Merger (collectively 
``Agreement'') were approved and adopted by the respective boards of 
directors of Allstate and Glenbrook. Prior approval of the Merger and 
the Agreement also will be obtained from the insurance departments of 
Illinois and Arizona, the states of domicile for Allstate and 
Glenbrook, respectively.
    10. On the effective date of the Merger: (a) Allstate will assume 
ownership of all the assets of Glenbrook, including all the assets held 
in the Glenbrook Separate Accounts; (b) Allstate will conduct the 
business presently conducted by Glenbrook, and will be responsible for 
satisfaction of all of the liabilities and obligations of Glenbrook; 
and (c) Glenbrook will cease to exist as a separate corporate entity. 
Allstate will then control the merged separate accounts supporting the 
Contracts.
    11. After considering the nature and purpose of each separate 
account, the Boards of Directors of Allstate and Glenbrook have 
determined that the efficiency of the operations of the separate 
accounts could be improved, and the overall administration enhanced, by 
merging: (a) Glenbrook Multi-Manager and Glenbrook Separate Account A 
into Allstate Separate Account I; and (b) Glenbrook VL Account into 
Allstate VL Account. 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. Moreover, the 
Merger will not dilute or otherwise adversely affect the economic 
interests of the owners of the Contracts, nor will the Merger affect 
the values determined under the Contracts. Allstate will be responsible 
for the expenses incurred in connection with the Merger.
    12. 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.
    13. The Merger provides for the transfer of Glenbrook Multi-Manager 
and Glenbrook Separate Account A assets to Allstate Separate Account I 
and the assumption of the liabilities and contractual obligations of 
each of Glenbrook Multi-Manager and Glenbrook Separate Account A by 
Allstate Separate Account I in return for the crediting of accumulation 
units of Allstate Separate Account I to Glenbrook Multi-Manager and

[[Page 68985]]

Glenbrook Separate Account A contract owners. Once this process has 
been completed, the units of Glenbrook Multi-Manager and Glenbrook 
Separate Account A would be cancelled, Glenbrook Multi-Manager and 
Glenbrook Separate Account A 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 
Allstate Separate Account I would continue to exist.
    14. Immediately following the Merger, each Glenbrook Multi-Manager 
and Glenbrook Separate Account A contract owner will possess a number 
of Allstate Separate Account I units (both full and fractional) that, 
when multiplied by the unit value of Allstate Separate Account I 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.
    15. The Merger also provides for the transfer of Glenbrook VL 
Account assets to Allstate VL Account and the assumption of the 
liabilities and contractual obligations of Glenbrook VL Account by 
Allstate VL Account in return for the crediting of accumulation units 
of Allstate VL Account to Glenbrook VL Account contract owners. Once 
this process has been completed, the units of Glenbrook VL Account 
would be cancelled, Glenbrook 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 
Allstate VL Account would continue to exist.
    16. Immediately following the Merger, each Glenbrook VL Account 
contract owner will possess a number of Allstate VL Account units (both 
full and fractional) that, when multiplied by the unit value of 
Allstate VL Account 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.
    17. Upon the effective date of the Merger, Allstate will succeed to 
all of the business and operations of Glenbrook, including the 
obligations pursuant to the Glenbrook contracts. Allstate will 
distribute to each existing Glenbrook contract owner: (a) A contract 
rider indicating that such contracts are thereafter funded by the 
surviving separate account; (b) a letter informing such contract owners 
of the Merger; and (c) prospectus disclosure that reflects Allstate's 
sponsorship of the surviving separate account as a result of the 
merger.
    18. Allstate and Glenbrook assert 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 
(Glenbrook Multi-Manager, Glenbrook Separate Account A, Glenbrook VL 
Account) selling its assets to another investment company (Allstate 
Separate Account I, Allstate VL Account) 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 Glenbrook Multi-Manager, 
Glenbrook Separate Account A and Glenbrook VL Account respectively, 
will be made at the relative net asset values of the sub-accounts. 
Consequently, the interests of Allstate Separate Account I and Allstate 
VL Account owners will not be diluted by the Merger. Each Glenbrook 
Multi-Manager and Glenbrook Separate Account A contract will be 
credited, immediately after the Merger, with units of Allstate Separate 
Account I having the same aggregate value as the aggregate value of the 
units of Glenbrook Multi-Manager and Glenbrook Separate Account A 
credited to such contract immediately prior to the Merger. Likewise, 
each Glenbrook VL Account contract will be credited, immediately after 
the Merger, with units of the Allstate VL Account having the same 
aggregate value as the aggregate value of the units of Glenbrook 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 does not involve overreaching 
on the part of any party involved and is consistent with the general 
purposes of the Act. 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. Allstate will pay all 
expenses incurred in connection with the merger.

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    8. Applicants represent that the Merger is 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. E4-3334 Filed 11-24-04; 8:45 am]
BILLING CODE 8010-01-P