[Federal Register Volume 70, Number 80 (Wednesday, April 27, 2005)]
[Notices]
[Pages 21822-21829]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-1990]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-26836; File No. 812-13054]


New England Life Insurance Co., et al., Notice of Application

April 21, 2005.
AGENCY: Securities and Exchange Commission (the ``Commission'').

ACTION: Notice of application for an order pursuant to Sections 11(a) 
of the Investment Company Act of 1940 (the ``Act'').

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    Applicants: New England Life Insurance Company (``NELICO''), New 
England Variable Life Separate Account (the ``Variable Account''), and 
New England Securities Corporation (``NES'')
    Summary of the Application: Applicants request an order pursuant to 
Section 11(a) of the Act approving the terms of the following proposed 
offer of exchange of variable life insurance contracts offered by 
NELICO and made available through the Variable Account: outstanding 
scheduled premium variable life insurance contracts (``Zenith Life 
Contract,'' ``Zenith Life Plus Contract,'' ``Zenith Life Plus II 
Contract,'' ``Zenith Life Executive 65 Contract,'' and ``Zenith 
Variable Whole Life Contract'' and, collectively, the ``Scheduled 
Premium Contracts'') for the Zenith Flexible Life 2001 contract (the 
``Zenith 2001 Contract'').
    Filing Date: The application was filed on December 22, 2003 and 
amended and restated on April 21, 2005.
    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 the 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 May 12, 2005, and should be accompanied by 
proof of service on the 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 Marie C. Swift, 
Esq., New England Life Insurance Company, 501 Boylston Street, Boston, 
MA 02116. Copies to: Stephen E. Roth, Esq. and Mary E. Thornton, Esq., 
Sutherland Asbill & Brennan LLP, 1275 Pennsylvania Avenue, NW., 
Washington, DC 20004-2415.

FOR FURTHER INFORMATION CONTACT: Harry Eisenstein, Senior Counsel, or 
Zandra Y. Bailes, Branch Chief, Office of Insurance Products, Division 
of Investment Management, at (202) 551-6795.

SUPPLEMENTARY INFORMATION: Following is a summary of the application. 
The application is available for a fee from the Commission's Public 
Reference Branch, 450 5th Street, NW., Washington, DC 20549-0102 
(telephone (202) 551-8090).

Applicants' Representations

    1. NELICO is a stock life insurance company organized under the 
laws of Delaware in 1980 as New England Variable Life Insurance 
Company. New England Variable Life Insurance Company was a wholly owned 
subsidiary of New England Mutual Life Insurance Company. On August 30, 
1996, New England Mutual Life Insurance Company merged into 
Metropolitan Life Insurance Company (``MetLife''), a life insurance 
company with principal offices in New York. MetLife is a wholly owned 
subsidiary of MetLife, Inc., a publicly traded company. Thereafter, 
MetLife became the parent of New England Variable Life Insurance 
Company, and the latter changed its name to New England Life Insurance 
Company and changed its domicile from the State of Delaware to the 
Commonwealth of Massachusetts. NELICO is authorized to operate in all 
states and the District of Columbia.
    2. NELICO established the Variable Account on January 31, 1983, 
under Delaware law. When NELICO changed its domicile to Massachusetts 
on August 30, 1996, the Variable Account became subject to 
Massachusetts law. The Variable Account is registered under the Act as 
a unit investment trust, and is a ``separate account'' as that term is 
defined in Section 2(a)(37) of the Act. NELICO is the legal owner of 
the assets in the Variable Account. The obligations to contract owners 
and beneficiaries arising under the contracts are general corporate 
obligations of NELICO, and the general assets of NELICO support the 
contracts. The assets of the Variable Account equal to its reserves and 
other contract liabilities are not available to meet the claims of 
NELICO's general creditors, but are held and applied exclusively to the 
benefit of holders of those variable life insurance contracts funded 
through the Variable Account. The investment performance of the 
Variable Account is independent of both the investment performance of 
the general account of NELICO and of any other separate account that 
NELICO has established or may establish in the future.
    3. NES is registered with the Commission as a broker-dealer, and is 
a member of the National Association of Securities Dealers, Inc. NES 
serves as principal underwriter for the Scheduled Premium Contracts and 
the Zenith 2001 Contracts. NES is an indirect, wholly owned subsidiary 
of NELICO.

General Description of Zenith Life 2001 Contracts

    4. The Zenith 2001 Contracts are flexible premium variable life 
insurance contracts offered pursuant to a registration statement under 
the Securities Act of 1933 (``1933 Act'') (File No. 333-103193). The 
Zenith 2001 Contracts are available for sale to

[[Page 21823]]

individuals, trusts, and business entities (``non-pension contracts'') 
as well as for sale to qualified pension plans (``pension contracts'').
    5. With certain restrictions, a Zenith 2001 Contract owner may make 
premium payments in an amount and based on a plan or schedule that he 
or she determines. Such planned premiums may be paid on an annual, 
semi-annual, quarterly, or monthly schedule. A Zenith 2001 Contract 
owner may skip planned premium payments or make additional payments. 
Additional payments may be subject to underwriting. No payment may be 
less than $25 ($10 for premium payments made under certain monthly 
payment arrangements).
    6. The Variable Account consists of several subaccounts, each of 
which invests exclusively in a designated portfolio of one of the 
following underlying funds: Metropolitan Series Fund, Inc.; Met 
Investors Series Trust; Fidelity Variable Insurance Products Fund; 
Fidelity Variable Insurance Products Fund II; and American Funds 
Insurance Series (collectively, the ``Underlying Funds'').
    7. Subject to certain restrictions, including restrictions on 
``market timing'' transfers, a Zenith 2001 Contract owner may transfer 
cash value between subaccounts and between subaccounts and the fixed 
account, although special limits apply to transfers from the fixed 
account. NELICO reserves the right to limit transfers to 4 per contract 
year (12 per contract year in New York), and to impose a processing 
charge of $25 for each transfer in excess of 12 per contract year.
    8. A contract owner may surrender the Zenith 2001 Contract at any 
time while the insured is living for the contract's net cash value, 
i.e., cash value minus any contract loan and accrued interest thereon 
and any applicable surrender charge. A partial surrender reduces the 
death benefit and may necessitate a reduction of the face amount to the 
extent necessary to prevent the amount at risk under the contract from 
increasing. A partial surrender also may reduce rider benefits.
    9. A contract owner may borrow from the cash value in the contract. 
The maximum amount a contract owner may borrow from cash value is an 
amount equal to: (i) 90% (more if required by state law) of the 
``projected cash value'' of the contract minus (ii) the surrender 
charge on the next planned premium due date or, if greater, on the date 
the loan is made, minus (iii) loan interest to the next loan interest 
date. (The ``projected cash value'' is the cash value projected to the 
next contract anniversary or, if earlier, to the next planned premium 
due date, at a 4% rate and using current contract charges.) The loan 
value available is reduced by any outstanding loan plus interest 
charged on contract loans. A contract loan reduces the contract's cash 
value in the subaccounts by the amount of the loan. Unless a contract 
owner requests otherwise, NELICO attributes contract loans to the 
subaccounts of the Variable Account and to the fixed account in 
proportion to the cash value in each.
    10. Two death benefit options are available under the Zenith 2001 
Contract:
     Option 1 (Face Amount)--a level death benefit that equals 
the face amount of the contract; or
     Option 2 (Face Amount plus Cash Value)--a variable death 
benefit that equals the face amount of the contract plus the cash value 
of the contract.
    11. NELICO deducts a sales charge, a premium tax charge, and a 
federal tax charge from premium payments before allocating the 
remaining amount to the investment options available under the Zenith 
2001 Contract according to instructions from the contract owner. The 
maximum sales charge is four percent (three percent for certain 
pension-owned or business-owned Zenith 2001 Contracts) of premium. 
NELICO deducts a flat two and a half percent premium tax charge from 
each premium paid. NELICO also deducts one percent from each premium 
payment to cover its Federal income tax liability related to the 
premium payments it receives.
    12. NELICO will deduct a surrender charge from cash value if, 
during the first eleven contract years or during the first eleven years 
following an increase in face amount, a contract owner surrenders his 
or her contract, reduces the face amount, makes a partial surrender 
that reduces the face amount, or the contract lapses. The surrender 
charge is comprised of a deferred sales charge and a deferred 
administrative charge. The deferred sales charge is a percentage of 
target premium that increases from 55% in the first contract year to 
72% in contract years two through five, and then declines ratably on a 
monthly basis to 0% in the last month of the eleventh policy year (or 
the eleventh year following an increase in face amount). The deferred 
administrative charge is $2.50 per $1,000 of base contract face amount 
in the first contract year and then declines ratably on a monthly basis 
to $0 in the last month of the eleventh policy year (or the eleventh 
year following an increase in face amount). In the event of a face 
amount reduction or a partial surrender that results in a face amount 
reduction, NELICO will deduct the surrender charge applicable to the 
remaining cash value in an amount proportional to the amount of the 
face amount surrendered.
    13. Each month, NELICO deducts: a policy charge ($15 per month 
during the first contract year and no more than $7 per month 
thereafter); an administrative charge of $.08 per $1,000 of base 
contract face amount in the first contract year and no more than $.04 
per $1,000 of base contract face amount (not to exceed $60 per month) 
thereafter; monthly cost of insurance charges (the amount at risk under 
the contract--i.e., the amount by which the death benefit, discounted 
monthly, exceeds the cash value--multiplied by the cost of insurance 
rate for the contract for that month); and charges for additional 
benefits and services (e.g., for riders).
    14. NELICO assesses a charge to cover the mortality and expense 
risks it assumes in issuing the Zenith 2001 Contracts. The charge is 
imposed daily, at an annual rate not to exceed 0.50% of the assets in 
the subaccounts of the Variable Account.
    15. In addition, there are daily charges against the Underlying 
Fund assets for investment advisory services and operating expenses. 
These charges are reflected in the net asset values of the Underlying 
Fund shares purchased by the Variable Account subaccounts. For the 
fiscal year ended December 31, 2004, those Underlying Fund operating 
expenses ranged from 0.30% to 1.15% (before contractual fee waivers and 
expense reimbursements).
    16. The death benefit or cash value proceeds of a Zenith 2001 
Contract can be paid in a lump sum or under one of the payment options 
available under the contract. A contract owner may select a combination 
of payment options. The available payment options are fixed benefit 
options only, and are not affected by the investment experience of the 
Variable Account. NELICO must consent to, and may change the payment 
interval to increase each payment, if installments would be less than 
$20.
    17. Several benefits may be added to the Zenith 2001 Contract by 
rider. These additional benefits usually require an additional charge 
as part of the monthly deduction from cash value. Not all riders are 
available to all Zenith 2001 Contract owners, and restrictions on rider 
coverage may apply in some states. NELICO may make other riders 
available in the future. These additional benefits include: Level Term 
Insurance

[[Page 21824]]

Rider (providing term insurance terminating at age 100); Temporary Term 
Insurance Rider (providing coverage from the date coverage is approved 
until the contract date); Children's Insurance Rider (providing term 
insurance on the lives of children of the insured); Waiver of Monthly 
Deduction Rider (waiving monthly deductions on the disability of the 
insured); Change to a New Insured Rider (allowing for the substitution 
of the insured); and Exchange to Term Insurance Endorsement (allows for 
the conversion of the policy to term insurance). NELICO does not intend 
to make the Exchange to Term Endorsement available under Zenith 2001 
Contracts issued pursuant to the exchange offer, hereinafter 
``Exchanged Zenith 2001 Contracts'').

General Descriptions of the Scheduled Premium Contracts

    18. Each of the Scheduled Premium Contracts is a scheduled premium 
variable life insurance policy offered pursuant to a registration 
statement under the 1933 Act:
     Zenith Life Contract--File No. 2-82838.
     Zenith Life Plus Contract--File No. 33-19540.
     Zenith Life Plus II Contract--File No. 33-52050.
     Zenith Life Executive 65 Contract--File No. 33-64170.
     Zenith Variable Whole Life Contract--File No. 333-21767.

NELICO no longer sells new Scheduled Premium Contracts.

    19. A Scheduled Premium Contract owner may make premium payments on 
due dates he or she selects during the lifetime of the insured for the 
period specified in the contract. The contract owner selects the 
frequency of premium payments--quarterly, semi-annually, annually, or 
according to another schedule agreed upon with NELICO. A contract owner 
may change the premium payment schedule. Failure to pay a required 
scheduled premium under any of these contracts may cause the contract 
to lapse.
     Zenith Life Contract: If the insured is under age 25 when 
the Zenith Life Contract is issued, premiums are payable for 40 years. 
If the insured is between the ages of 25 and 40 when the Zenith Life 
Contract is issued, premiums are payable until the insured reaches age 
65. If the insured is above age 40 when the Zenith Life Contract is 
issued, premiums are payable for 25 years.
     Zenith Life Plus Contract, Zenith Life Plus II Contract, 
Zenith Variable Whole Life Contract: These contracts require that 
scheduled premium payments be made until the insured reaches age 100. 
The amount of the scheduled premium depends on: (i) The face amount of 
the contract; (ii) the age, gender (unless unisex rates apply), and 
underwriting class of the insured; (iii) the premium schedule the 
contract owner selects; and (iv) the charges for any rider benefits the 
contract owner elects.
     Zenith Life Executive 65 Contract: This contract requires 
scheduled premium payments from inception of the contract until the 
contract anniversary when the insured reaches age 65, or until 10 years 
after the contract is issued, whichever is later. The amount of the 
scheduled premium depends on: (i) The face amount of the contract; (ii) 
the age, gender (unless unisex rates apply), and underwriting class of 
the insured; (iii) the premium payment schedule selected by the 
contract owner; and (iv) any rider benefits.
    20. The cash value of a Scheduled Premium Contract equals the sum 
of the cash value in the Variable Account, any cash value in the fixed 
account, and amounts held in NELICO's general account to support a 
contract loan. The cash value reflects: Scheduled premium payments and 
the payment schedule chosen by the contract owner; unscheduled premium 
payments; net investment experience of the Variable Account 
subaccounts; interest credited to cash value in the fixed account; 
interest credited to amounts held in NELICO's general account to 
support contract loans; the death benefit option chosen by the contract 
owner; contract fees and charges; partial surrenders and partial 
withdrawals; and transfers among the subaccounts and the fixed account.
    21. Subject to certain restrictions, including restrictions on 
``market timing'' transfers, Scheduled Premium Contract owners may 
transfer cash value between subaccounts and between the subaccounts and 
the fixed account. Limits may apply to transfers to and from the fixed 
account. NELICO reserves the right to limit transfers among subaccounts 
to 4 per contract year. NELICO limits transfers from the fixed account 
to the Variable Account to one per contract year.
    22. While the insured is living, a contract owner may submit a 
written request to NELICO to surrender a Zenith Life Contract in whole 
or in part for its net cash value. A partial surrender involves 
splitting a contract into two contracts--one is surrendered for its net 
cash value, the other is continued in-force. The continued contract 
continues at the original contract's premium rates and generally must 
have a face amount of at least $25,000.
    23. As to holders of Zenith Life Plus, Zenith Life Plus II, Zenith 
Life Executive 65, and Zenith Variable Whole Life Contracts, a contract 
owner may request to surrender his or her contract at any time, in 
whole or in part, for its net cash value. A partial surrender causes a 
proportionate reduction in the face amount, tabular cash value, death 
benefit, and basic scheduled premium. NELICO reserves the right to 
decline a partial surrender request that would reduce the face amount 
below the minimum face amount required under the contract. Any 
surrender charge applied reduces any remaining surrender charge under a 
contract.
    24. Owners of each variety of Scheduled Premium Contract, except 
the Zenith Life Contract, may borrow all or part of their respective 
contract ``loan value'' (i.e., (i) 90% (or more if required by state 
law) of ``projected cash value'' minus (ii) the surrender charge on the 
next loan interest due date or, if greater, on the date the loan is 
made, discounted at (iii) the loan interest rate). (The ``projected 
cash value'' is the cash value projected to the next contract 
anniversary or, if earlier, the next premium due date, at a set rate of 
interest.) Zenith Life Contract owners may borrow all or part of their 
respective contract ``loan value'' (i.e., (i) ``projected cash value'' 
(ii) discounted at the loan interest rate and (iii) multiplied by 90%).
    25. Subject to certain adjustments, the death benefit available 
under the Zenith Life Contract will equal the greater of the ``variable 
death benefit'' and the ``guaranteed minimum death benefit.'' The 
``guaranteed minimum death benefit'' equals the initial face amount 
specified in the policy form for the contract, assuming that premiums 
have been paid when due and there is no outstanding contract loan. The 
``variable death benefit'' initially equals the initial face amount of 
the contract, and may increase or decrease, after the first contract 
month, depending on the net investment experience of the Variable 
Account subaccounts. Whether a contract's ``variable death benefit'' 
exceeds the ``guaranteed minimum death benefit'' depends on the net 
investment experience of the Variable Account subaccounts.
    26. Owners of the Zenith Life Plus Contract, the Zenith Life Plus 
II Contract, Zenith Life Executive 65 Contract, and the Zenith Variable 
Whole Life Contract must choose between two

[[Page 21825]]

death benefit options at the time they apply for a contract. Once 
selected, the death benefit option under a contract may not be changed.
     Option 1-The death benefit equals the face amount of the 
contract. The death benefit is fixed.
     Option 2-The death benefit equals the face amount of the 
contract plus the amount by which the cash value exceeds the ``tabular 
cash value'' of the contract. The ``tabular cash value'' is the value 
the contract would have if: (i) A contract owner paid all scheduled 
premiums when due; (ii) a contract owner made no unscheduled payments, 
partial surrenders, partial withdrawals, loans or reductions in face 
amount; (iii) the Variable Account subaccounts earned a specified 
constant annual net rate of return of 5% for the Zenith Life Plus 
Contract and 4.5% for the Zenith Life Plus II Contract, the Zenith Life 
Executive 65 Contract, and the Zenith Variable Whole Life Contract; and 
(iv) NELICO deducted cost of insurance charges using the maximum 
guaranteed cost of insurance rates or, for the Zenith Life Plus II 
Contract, the Zenith Life Executive 65 Contract, and the Zenith 
Variable Whole Life Contract, the maximum contract charges.

Under these Scheduled Premium Contracts, the minimum death benefit will 
equal the face amount of the contract as long as the contract owner 
pays the required scheduled premium and there is no ``excess policy 
loan'' (i.e., the difference between (i) the amount of the policy loans 
plus accrued interest and (ii) the amount of the contract value less 
any applicable surrender charge, on the next date that interest is due 
under the policy loan).

    27. NELICO deducts the following charges from scheduled premiums 
paid to arrive at a basic premium payment for a Scheduled Premium 
Contract.
     Zenith Life Contract--NELICO deducts charges for any 
optional insurance benefits the contract owner selects by rider, any 
additional amounts paid for a Zenith Life Contract for an insured in a 
substandard risk classification, and an annual administrative charge. 
NELICO assesses an additional one-time administrative charge during the 
first contract year. NELICO also assesses a sales charge that varies 
depending upon the contract year and grades down over time (the maximum 
sales charge is 20% of the basic premium payments in the first contract 
year, 12% of the basic premium payments made for the second through 
fourth contract years, and 7.75% of the basic premium payments in the 
subsequent contract years); a state premium tax charge (2% of the basic 
premium) to cover the average cost of state premium taxes; and a 
minimum death benefit risk charge (1.2% of the basic premium) to 
protect against the prospect that the variable death benefit under the 
Zenith Life Contract will be less than the guaranteed minimum death 
benefit under the contract.
     Zenith Life Plus Contract, Zenith Life Plus II Contract, 
Zenith Life Executive 65 Contract, Zenith Variable Whole Life 
Contract--NELICO deducts charges for: any rider benefits the contract 
owner selects; additional amounts payable for substandard risk or 
automatic issue risk classes; the portion of the annual administrative 
charge that is due with the scheduled premium payment (ranging from 
$57.75 to $58.41 of every $1,000 of face amount on an annual basis); a 
sales charge (discussed below); a state premium tax charge (ranging 
from two to two and a half percent of premiums paid); and (for the 
Zenith Life Plus II Contract, the Zenith Life Executive 65 Contract, 
and the Zenith Variable Whole Life Contract only) a Federal premium tax 
charge (one percent of premiums paid).

The sales charge for the Zenith Life Plus Contract is 6% of each 
scheduled premium for the first 15 contract years and 6% of each 
unscheduled premium. For the Zenith Life Plus II Contract, the Zenith 
Life Executive 65 Contract, and the Zenith Variable Whole Life 
Contract, the sales charge is 5.5% of each scheduled premium for at 
least the first 15 contract years--thereafter, NELICO may waive this 
charge under certain conditions--and 5.5% of each unscheduled premium 
for all contract years.
    28. NELICO deducts the following surrender charges from the 
Scheduled Premium Contracts.
     Zenith Life Contract: No surrender charge applies under 
the Zenith Life Contract.
     Zenith Variable Whole Life Contract: NELICO will deduct a 
surrender charge from cash value if a contract owner totally or 
partially surrenders his or her Zenith Variable Whole Life Contract, 
allows his or her contract to lapse, or reduces the face amount of his 
or her contract, during the first 11 contract years. The surrender 
charge is a percentage of basic scheduled premiums. The maximum 
surrender charge rate is 55% in the first contract year, and reduces to 
0% in the eleventh contract year. NELICO limits the dollar amount of 
the surrender charge to an amount per $1,000 of face amount; the 
maximum surrender charge per $1,000 of face amount is $47 in the first 
contract year, and grades down to $25 per $1,000 of face amount in the 
eleventh contract year. In the event of a partial surrender or 
reduction in face amount, NELICO will deduct from cash value any 
surrender charge that applies in an amount that is proportional to the 
amount of the face amount surrendered.
     Zenith Life Plus Contract, Zenith Life Plus II Contract, 
Zenith Life Executive 65 Contract: NELICO will deduct a surrender 
charge from cash value if, during the first 15 contract years, a 
contract owner totally or partially surrenders his or her contract, 
allows his or her contract to lapse, or, for the Zenith Life Plus II 
and Zenith Life Executive 65 Contracts, reduces the face amount of his 
or her contract. The surrender charge includes a deferred 
administrative charge and a deferred sales charge. The deferred 
administrative charge is $5 per $1,000 of face amount in the first 10 
contract years for the Zenith Life Plus Contract, reducing monthly 
thereafter until it reaches $0 at the end of the 15th contract year; 
$2.50 per $1,000 of face amount in the first contract year for the 
Zenith Life Plus II Contract, reducing monthly thereafter until it 
reaches $0 in the 11th contract year; $2.70 per $1,000 of face amount 
in the first contract year for the Zenith Life Executive 65 Contract, 
reducing monthly thereafter until it reaches $0 at the end of the 10th 
contract year.
    For the Zenith Life Plus Contracts, the maximum deferred sales 
charge for an insured with an issue age of 53 or younger applies if the 
contract owner surrenders the contract or allows the contract to lapse 
in the 10th contract year. The maximum charge in that year is an amount 
equal to 24% of the basic scheduled premium for the first contract year 
plus 4% of the basic scheduled premiums for the second through the 
tenth contract years. The charge may be less if the issue age of the 
insured is above 53. For the Zenith Life Plus II Contracts, the maximum 
charge for an insured with an issue age of 53 or younger applies if the 
contract owner surrenders the contract or allows the contract to lapse 
or reduces the contract face amount in contract years 4 through 8. The 
maximum charge in that year is an amount equal to 43.5% of the basic 
scheduled premium for the first contract year plus 23.5% of the basic 
scheduled premiums in the second and third contract years, and 14.5% of 
the basic scheduled premium in the fourth contract year. Different 
maximum charges apply if the contract owner surrenders the contract, 
allows the contract to lapse, or reduces the face amount of the 
contract in the first 2

[[Page 21826]]

contract years. The charge may be less if the issue age of the insured 
is above 53. For the Zenith Life Executive 65 Contract, the maximum 
charge for an insured with an issue age of 50 or younger applies if the 
contract owner surrenders the contract or allows the contract to lapse 
or reduces the contract face amount in contract years 3 through 10. The 
maximum charge in those years is 43.5% of the first year basic 
scheduled premium, plus 16.5% of the basic scheduled premium for the 
second contract year. The charge may be less if the issue age of the 
insured is above 50.
    The deferred sales charge applies to the lesser of (i) the total 
payments (both scheduled premiums and unscheduled payments) made and 
(ii) the contract's total basic scheduled premiums up to the date of 
surrender, lapse, or, for the Zenith Life Plus II Contract and the 
Zenith Life Executive 65 Contract, face amount reduction (even if the 
contract owner has not paid each of those premiums). In the event of a 
partial surrender or, for the Zenith Life Plus II Contract and the 
Zenith Life Executive 65 Contract, reduction in face amount, NELICO 
will deduct any deferred sales charge from cash value in an amount that 
is proportional to the amount of the cash value surrendered or the face 
amount reduction.
    29. NELICO makes the following deductions from cash value. NELICO 
deducts these charges from the Variable Account subaccounts in 
proportion to the contract owner's cash value in each subaccount (these 
do not include deductions for certain transactions, such as reissuing 
or redating a contract).
    NELICO deducts a cost of insurance charge each contract month.
     For the Zenith Life Plus, Zenith Life Plus II, Zenith Life 
Executive 65, and Zenith Variable Whole Life Contracts, beginning on 
the contract date and on the first day of each contract month 
thereafter, NELICO will assess a monthly deduction consisting of an 
administrative charge, a minimum death benefit guarantee charge ($0.01 
per $1,000 of face amount), and (in the first contract year for the 
Zenith Life Plus Contract only) an additional administrative fee of 
$0.035 per $1,000 of face amount. If there is an outstanding contract 
loan and the net cash value is not large enough to pay the monthly 
deduction, the difference is treated as an excess contract loan and the 
contract may terminate. For the Zenith Life Executive 65 Contract, the 
monthly deduction will only apply until the contract anniversary when 
the insured reaches age 65, or 10 years after the contract is issued, 
whichever is later.
     NELICO assesses a charge to cover the mortality and 
expense risks it assumes in issuing the Scheduled Premium Contracts 
(0.35% annually for the Zenith Life Contracts, and from 0.60% to a 
maximum of 0.90% annually for the Zenith Life Plus Contracts, the 
Zenith Life Plus II Contracts, Zenith Life Executive 65 Contracts, and 
the Zenith Variable Whole Life Contracts).
    30. The death benefit or cash value proceeds of a Scheduled Premium 
Contract can be paid in a lump sum or under one of the payment options 
available under the contract. A contract owner may select a combination 
of payment options. The available payment options are fixed benefit 
options only, and are not affected by the investment experience of the 
Variable Account. NELICO must consent to, and may change the payment 
interval to increase each payment, if installments would be less than 
$20.
    31. Each of the Scheduled Premium Contracts and the Zenith 2001 
Contract offer the same line-up of Underlying Funds. The charges 
against the Underlying Fund assets for investment advisory services and 
operating expenses are reflected in the net asset value of the 
Underlying Fund shares purchased by the Variable Account subaccounts. 
During the fiscal year ended December 31, 2004, these charges ranged 
from 0.31% to 1.32% (before contractual fee waivers and expense 
reimbursements).
    32. Several benefits may be added to the Scheduled Premium 
Contracts by rider. These additional benefits usually require an 
additional charge against premium payments. Not all riders are 
available to all Scheduled Premium Contract owners, and restrictions on 
rider coverage may apply in some states. NELICO may make other riders 
available in the future. These additional benefits include: Level Term 
Insurance; Accidental Death Benefit; Option to Purchase Additional Life 
Insurance; Waiver of Premiums--Disability of Insured; Waiver of 
Premiums--Disability of Applicant; Waiver of Premiums--Death of 
Applicant; Waiver of Premiums--Death or Disability of Applicant; 
Temporary Term Insurance; Children's Insurance--provides insurance on 
the lives of the insured's children; and Guaranteed Income Benefit (not 
available under the Zenith Life Contract or the Zenith Life Plus 
Contract).

Exchange Offer

    33. Applicants propose to offer owners of the Scheduled Premium 
Contracts the opportunity to exchange their contracts for Zenith 2001 
Contracts (``Exchanged Zenith 2001 Contracts''). For reasons set forth 
below, Applicants believe that the proposed exchanges will benefit 
current Scheduled Premium Contract owners.
     The Exchanged Zenith 2001 Contracts offer greater 
investment flexibility than is available under the Scheduled Premium 
Contracts because the Exchanged Zenith 2001 Contract gives the contract 
owner the flexibility to make premium payments as he or she determines. 
The Scheduled Premium Contracts, by contrast, require that premium 
payments be made on a schedule prescribed by NELICO; failure to pay a 
scheduled premium may result in lapse of the Scheduled Premium 
Contract.
     The ability to change the death benefit option under the 
Exchanged Zenith 2001 Contract after the first contract year enables 
contract owners to alter their coverage by, for example, building cash 
values more quickly or increasing total death benefit amounts available 
under their contracts.
     The ability to increase contract face amount by acquiring 
an ``increase contract,'' which has no policy charge and is available 
at a lower face amount than would otherwise be available under a Zenith 
2001 Contract, enables contract owners to adjust their contract 
benefits to account for changes (i.e., increases) in their need for 
coverage. This ``increase contract,'' used to effect the increase in 
face amount increase, would be a new Zenith 2001 Contract that is 
separate from the Exchanged Zenith 2001 Contract.
     The maximum surrender charge period under the Exchanged 
Zenith 2001 Contract is 10 years, one year shorter than the maximum 
surrender charge period that would be applicable if the Zenith 2001 
Contract were purchased independently of the proposed exchange. 
Surrender charges will be waived entirely for Zenith 2001 Contracts 
exchanged for Zenith Life Contracts. Each of the other Scheduled 
Premium Contracts has a longer surrender charge period than the 
Exchanged Zenith 2001 Contract--11 years for the Zenith Variable Whole 
Life Contract, and 15 years for the Zenith Life Plus Contract, the 
Zenith Life Plus II Contract, and the Zenith Life Executive 65 
Contract.
     Contract owners will receive credit for the amount of time 
they held the Scheduled Premium Contract in determining any surrender 
charge applicable to the Exchanged Zenith 2001 Contract. Although 
NELICO will make adjustments to the otherwise applicable surrender 
charges under the Exchanged Zenith 2001 Contracts, as

[[Page 21827]]

described in more detail below, the applicable surrender charges under 
the Exchanged Zenith 2001 Contract will be the same as or lower than 
those that would apply under the Scheduled Premium Contracts that are 
exchanged for Zenith 2001 Contracts.
    34. The exchange offer will only be made to owners of Scheduled 
Premium Contracts that satisfy the new business criteria of the Zenith 
2001 Contract. To be eligible for the exchange, the face amount of the 
Scheduled Premium Contract must be at least $25,000 ($50,000 in New 
Jersey), the insured generally must be age 85 or younger, and an 
insured in a substandard risk class must meet certain other eligibility 
criteria. NELICO will notify eligible Scheduled Premium Contract owners 
of the exchange offer.
    35. By supplements to the Scheduled Premium Contracts dated May 1, 
2004, NELICO notified contract owners that it had applied to the 
Commission for approval of the proposed exchange offer and instructed 
the Scheduled Premium Contract owner to contact his or her registered 
representative to learn more about the availability of the proposed 
exchange program.
    36. Contract owners who express an interest in the exchange offer 
will be provided, at no charge, with: (i) A prospectus for the Zenith 
2001 Contract; (ii) personalized illustrations for the Exchanged Zenith 
2001 Contract, showing one or more gross rates of return (including 0%) 
and reflecting (with equal prominence) both current and guaranteed 
charges under the Contract; (iii) personalized in-force illustrations 
of the relevant Scheduled Premium Contract (where available) \1\ or a 
comparison of values and/or a comparison of relative costs and benefits 
of the relevant Scheduled Premium Contract, showing one or more gross 
rates of return (including 0%) and reflecting (with equal prominence) 
both current and guaranteed charges under the Contract; and (iv) non-
personalized materials explaining, concisely and in ``Plain English,'' 
the terms of the exchange offer, the material differences between the 
contracts, and the material respects in which aspects of the Exchanged 
Zenith 2001 Contract are less favorable than aspects of the Scheduled 
Premium Contract that is being exchanged, including a general 
discussion of charges that are higher under the Exchanged Zenith 2001 
Contract. Applicants believe the disclosure and illustration(s) given 
to Scheduled Premium Contract owners will provide sufficient 
information for them to determine which contract is better for them.
---------------------------------------------------------------------------

    \1\ NELICO plans to have system capabilities to generate 
personalized in-force illustrations for most Scheduled Premium 
Contracts. However, NELICO may only be able to provide owners of the 
Zenith Life Contract and owners of certain classes of the other 
Scheduled Premium Contracts with a comparison of premiums, cash 
values and death benefits.
---------------------------------------------------------------------------

    37. Under the exchange, a Zenith 2001 Contract will be issued by 
NELICO at the insured's attained age at the time of the exchange with 
the date of exchange as the issue date. The exchange offer will provide 
that, upon acceptance of the offer, a Zenith 2001 Contract will 
generally be issued with the same face amount as the Scheduled Premium 
Contract surrendered in the exchange.
    38. If a contract owner interested in exchanging a Scheduled 
Premium Contract for a Zenith 2001 Contract wishes to increase the face 
amount of the Exchanged Zenith 2001 Contract, NELICO may, with 
underwriting, issue an increase contract that, together with the 
Exchanged Zenith 2001 Contract, will provide the increased face amount 
requested.
    39. Owners of multiple Scheduled Premium Contracts who accept the 
proposed exchange offer may exchange each such Scheduled Premium 
Contract for a separate Exchanged Zenith 2001 Contract. Such contract 
owners also may exchange two or more of their Scheduled Premium 
Contracts for a single Exchanged Zenith 2001 Contract, provided that 
the issue dates for the Scheduled Premium Contracts to be exchanged are 
no more than two years apart. The surrender charge, if any, applicable 
to the single Exchanged Zenith 2001 Contract immediately upon the 
exchange will be determined based on the years remaining in the 
Scheduled Premium Contract with the shortest remaining surrender charge 
period.
    40. An Exchanged Zenith 2001 Contract will generally be issued with 
the same death benefit as the respective Scheduled Premium Contract 
surrendered. For Scheduled Premium Contracts other than the Zenith Life 
Contract, the Option 1 or Option 2 death benefit selected for the 
Scheduled Premium Contract will carry over to the Exchanged Zenith 2001 
Contract. (Applicants note that the difference in computation of the 
Option 2 death benefit under the Zenith 2001 Contract and the Scheduled 
Premium Contracts may result in a slightly higher death benefit under 
Option 2 of an Exchanged Zenith 2001 Contract than under Option 2 of 
the Scheduled Premium Contracts.) A Zenith 2001 Contract issued in 
exchange for a Zenith Life Contract will be issued with an Option 2 
death benefit, as that death benefit option most closely corresponds to 
the only death benefit option available under the Zenith Life Contract. 
(A contract owner who elects to exchange his/her Scheduled Premium 
Contract for an Exchanged Zenith 2001 Contract would, in doing so, gain 
the right to change the death benefit option after the first contract 
year.)
    41. NELICO will apply the cash value of the Scheduled Premium 
Contract being exchanged to a Zenith 2001 Contract at the time of 
exchange. The risk class for an Exchanged Zenith 2001 Contract will be 
the one most similar to the risk class for the Scheduled Premium 
Contract being exchanged. NELICO will not require new evidence of 
insurability as a condition of the exchange.
    42. If the surrender charge period for an existing Scheduled 
Premium Contract has not expired at the time of the exchange, any 
surrender charges on that existing Scheduled Premium Contract will not 
be assessed when converting over to the Zenith 2001 Contract. NELICO 
will not apply the front-end sales load applicable to Zenith 2001 
Contracts to the cash value of the Scheduled Premium Contract 
exchanged, but will deduct that front-end sales load from any new 
premiums paid into the Exchanged Zenith 2001 Contracts at the time of, 
or subsequent to, the exchange.
    43. Surrender charges will be waived entirely on Zenith 2001 
Contracts issued in exchange for Zenith Life Contracts. For Zenith 2001 
Contracts issued in exchange for any other Scheduled Premium Contract, 
a surrender charge consisting of a deferred sales charge and a deferred 
administrative charge will apply. Contract owners will receive credit 
for the amount of time they held the Scheduled Premium Contract in 
determining any surrender charge applicable to the Exchanged Zenith 
2001 Contract. Furthermore, Exchanged Zenith 2001 Contracts will impose 
a maximum surrender charge period of 10 years, as opposed to the 11-
year maximum surrender charge period applicable to Zenith 2001 
Contracts. The remaining surrender charge period under the Exchanged 
Zenith 2001 Contract immediately upon exchange is the difference 
between the Exchanged Zenith 2001 Contract's surrender charge period 
(10 years) and the number of years the contract owner held the 
Scheduled Premium Contract, rounded up to the next contract 
anniversary.
    44. Each of the Scheduled Premium Contracts (other than the Zenith 
Life Contract) has a longer surrender charge period than the Exchanged 
Zenith 2001

[[Page 21828]]

Contract; the Zenith Variable Whole Life Contract has a maximum 11-year 
surrender charge period and the other Scheduled Premium Contracts 
(other than the Zenith Life Contract) have a 15-year surrender charge 
period. Accordingly, NELICO has modified the surrender charge schedule 
applicable to the Exchanged Zenith 2001 Contract to discourage 
Scheduled Premium Contract owners from exchanging their contracts 
solely to avoid or significantly reduce the applicable surrender 
charges. These adjustments are as follows:
     The deferred sales charge applicable to an Exchanged 
Zenith 2001 Contract will be based on the ratio of (A) to (B), 
multiplied by (C), where:
    [cir] (A) is the deferred sales charge percentage under the Zenith 
2001 Contract corresponding to the number of years the contract owner 
held the Scheduled Premium Contract (rounded up as described above);
    [cir] (B) is the maximum deferred sales charge percentage assessed 
under the Zenith 2001 Contract for the applicable age (up to 72%); and
    [cir] (C) is the applicable deferred sales charge percentage for 
the contract year of the Exchanged Zenith 2001 Contract that would 
apply to a Zenith 2001 Contract purchased at the time of the exchange.
     Similarly, the deferred administration charge assessed 
under the Exchanged Zenith 2001 Contract will be based on the ratio of 
(A) to (B), multiplied by (C), where:
    [cir] (A) is the deferred administrative charge amount under the 
Zenith 2001 Contract corresponding to the number of years the contract 
owner held the Scheduled Premium Contract (adjusted as described 
above);
    [cir] (B) is the maximum deferred administrative charge amount 
assessed under the Zenith 2001 Contract for the applicable age (up to 
$2.50 per $1,000 of face amount); and
    [cir] (C) is the applicable deferred administrative charge amount 
for the contract year of the Exchanged Zenith 2001 Contract that would 
apply to a Zenith 2001 contract purchased at the time of the exchange.
    45. Applicants propose to make further adjustments to the surrender 
charges applicable to the Exchanged Zenith 2001 Contracts to minimize 
the possibility that the surrender charge under the Exchanged Zenith 
2001 Contract will exceed the corresponding surrender charge on the 
existing Scheduled Premium Contract. In addition, the Company will 
monitor each individual Exchanged Zenith 2001 Contract on an ongoing 
basis and will make any further adjustments as may be needed to ensure 
that the surrender charge under that Exchanged Zenith 2001 Contract 
will be the same or lower than under the exchanged Scheduled Premium 
Contract. With these adjustments and the ongoing monitoring of the 
imposition of any surrender charges on Exchanged Zenith 2001 
Contracts), the Applicants represent that the surrender charge under 
the Exchanged Zenith 2001 Contract will be the same or lower for all 
Scheduled Premium Contract owners who exchange their contracts for 
Zenith 2001 Contracts.
    46. Additional benefits attached to a Scheduled Premium Contract 
surrendered in an exchange will carry over to the Zenith 2001 Contract 
acquired in the exchange only if that additional benefit (or a 
substantially equivalent additional benefit) is available under the 
Zenith 2001 Contract. Additional benefits available under the Zenith 
2001 Contract--but not the Scheduled Premium Contracts--may be acquired 
at the time of the exchange, but may occasion the need for new evidence 
of insurability. Additional benefits available under the Scheduled 
Premium Contracts--but not the Zenith 2001 Contract--and their related 
charges, if any, will not be carried over to the Exchanged Zenith 2001 
Contracts.
    47. Loans under a Scheduled Premium Contract must be repaid prior 
to, or at the time of, the exchange. Loans may be repaid prior to the 
exchange in cash or by means of a partial surrender or a partial 
withdrawal (in the amount of the unpaid loan and interest thereon). 
Loans not repaid prior to the exchange will be repaid at the time of 
the exchange by applying a portion of the surrender proceeds to the 
amount of the loan and loan interest. In the event a loan is repaid by 
taking a partial surrender or a partial withdrawal before the exchange 
or by applying a portion of the surrender proceeds at the time of the 
exchange, the death benefit of the Scheduled Premium Contract will be 
reduced (and the face amount of the Scheduled Premium Contract may be 
reduced). Any communications with Scheduled Premium Contract owners 
describing the exchange offer will include the fact that loans must be 
repaid before or at the time of the exchange, as well as disclosure 
regarding the effects of repaying loans by means other than in cash, 
including potential adverse tax consequences.
    48. To accept an exchange offer, a Scheduled Premium Contract owner 
must return his or her contract (or submit a lost policy statement) and 
submit a supplemental application for an Exchanged Zenith 2001 
Contract. NELICO will treat any premiums submitted with the 
supplemental application requesting the exchange as payments under the 
Exchanged Zenith 2001 Contract as of the date of issue of the Exchanged 
Zenith 2001 Contract. All costs associated with the administration of 
the exchange offer will be borne by NELICO.

Applicants' Legal Analysis

    1. Section 11(a) of the Act makes it unlawful for any registered 
open-end investment company, or any principal underwriter for such an 
investment company, to make an offer to the holder of a security of 
such investment company, or of any other open-end investment company, 
to exchange his or her security for a security in the same or another 
such company on any basis other than the relative net asset values of 
the respective securities, unless the terms of the offer have first 
been submitted to and approved by the Commission or are in accordance 
with Commission rules adopted under section 11.
    2. Section 11(c) of the Act provides, as relevant here, that any 
offer of exchange of the securities of a registered unit investment 
trust for the securities of any other investment company must be 
approved by the Commission or satisfy applicable rules adopted under 
section 11, regardless of the basis of the exchange.
    3. The Variable Account is registered under the Act as a unit 
investment trust. Accordingly, the proposed exchange offer constitutes 
an offer of exchange of securities of a registered unit investment 
trust for other securities of that registered unit investment trust. 
Thus, unless the terms of the proposed exchange offer are consistent 
with those permitted by Commission rule, Applicants may make the 
proposed exchange offer only after the Commission has approved the 
terms of the offer by an order pursuant to section 11(a) of the Act.
    4. Section 11(c) of the Act requires Commission approval (by order 
or by rule) of any exchange, regardless of its basis, involving 
securities issued by a unit investment trust, because investors in unit 
investment trusts were found by Congress to be particularly vulnerable 
to switching operations.
    5. Applicants contend that the purpose of section 11 of the Act is 
to prevent ``switching''--the practice of inducing security holders of 
one investment company to exchange their securities for those of a 
different investment company solely for the purpose of exacting 
additional selling charges. Congress found evidence of

[[Page 21829]]

widespread ``switching'' operations in the 1930s prior to adoption of 
the Act. Applicants assert that the legislative history of Section 11 
makes it clear that the potential for harm to investors perceived in 
switching was its use to extract additional sales charges from those 
investors. Accordingly, according to Applicants, applications under 
section 11(a) and orders granting those applications appropriately have 
focused on sales loads or sales load differentials and administrative 
fees to be imposed for effecting a proposed exchange and have ignored 
other fees and charges, such as relative advisory fee charges of the 
exchanged and acquired securities.
    6. Rule 11a-2, adopted in 1983 under Section 11 of the Act, by its 
express terms, provides blanket Commission approval of certain offers 
of exchange of one variable annuity contract for another or of one 
variable life insurance contract for another. Rule 11a-2 permits 
variable annuity exchanges as long as the only variance from a relative 
net asset value exchange is an administrative fee disclosed in the 
registration statement of the offering separate account, and a sales 
load or sales load differential calculated according to methods 
prescribed in the rule. Variable life insurance exchanges may vary from 
relative net asset exchanges only by reason of disclosed administrative 
fees; no sales loads or sales load differentials are permitted under 
the rule for such exchanges. Applicants note, however, that there is 
language in the adopting release for Rule 11a-2 that suggests that the 
rule may have been intended to permit exchanges for funding options 
within a single variable life insurance contract, but not the exchange 
of one such contract for another.
    7. Given the terms of the exchange offer, Applicants do not meet 
the specific requirements of Rule 11a-2. Applicants note, however, that 
the surrender charge schedule under the existing Scheduled Premium 
Contracts was designed to cover the costs associated with the original 
sales of those contracts. If the sales charge structure under the 
Exchanged Zenith 2001 Contract is applied to the cash value transferred 
under the exchange, then some contract owners may exchange their 
Scheduled Premium Contracts with the intent to then surrender the 
Exchanged Zenith 2001 Contract and incur no or a lower surrender 
charge. Accordingly, NELICO has modified the surrender charge schedule 
applicable to the Exchanged Zenith 2001 Contracts to discourage owners 
of Scheduled Premium Contracts being exchanged from exchanging their 
contracts solely to avoid or significantly reduce the applicable 
surrender charges.
    8. Adoption of Rule 11a-3 under the Act, permitting certain 
exchange offers by open-end investment companies other than separate 
accounts, represents the most recent Commission action under section 11 
of the Act. Rule 11a-3 permits an offering company (that is an open-end 
management company) to charge exchanging security holders a sales load 
on the acquired security, a redemption fee, an administration fee, or 
any combination of the foregoing, provided that certain conditions are 
met. As with Rule 11a-2, Rule 11a-3 focuses primarily on sales or 
administrative charges that would be incurred by investors for 
effecting exchanges. Because the investment company involved in the 
proposed exchange is a separate account, and because the investment 
company is organized as a unit investment trust rather than as a 
management investment company, Applicants may not rely on Rule 11a-3.
    9. Applicants submit that the terms of the exchange offer are, 
nevertheless, consistent with the legislative intent of section 11, and 
that the exchange has not been proposed solely for the purpose of 
exacting additional selling charges and profits from investors by 
switching them from one security to another. In support of this 
contention, Applicants note the following:
     No additional sales load or administrative charge will be 
imposed at the time of exchange. The contract value and face amount of 
a contract acquired in the proposed exchange (i.e., the Exchanged 
Zenith 2001 Contract) will be no lower immediately after the exchange 
than that of the contract exchanged (i.e., a Scheduled Premium 
Contract) immediately prior to the exchange (unless a loan is repaid by 
applying a portion of the surrender proceeds at the time of the 
exchange).
     Although the surrender charges applicable under the 
Exchanged Zenith 2001 Contract will differ from the surrender charges 
imposed under Zenith 2001 Contracts, NELICO will ``tack'' the time the 
contract owner owned the Scheduled Premium Contract for purposes of 
calculating the surrender charge period under the Exchanged Zenith 2001 
Contract, in accordance with the requirements of Rule 11a-2 and Rule 
11a-3 under the Act. Surrender charges will be waived entirely on 
Exchanged Zenith 2001 Contracts issued in exchange for Zenith Life 
Contracts. In addition, the shorter (11-year) surrender charge period 
applicable under the Exchanged Zenith 2001 Contract will relieve many 
Scheduled Premium Contract owners of several remaining years of 
surrender charges as a result of the exchange. Moreover, the surrender 
charges under the Exchanged Zenith 2001 Contracts will be the same as 
or lower than those that would apply under the Scheduled Premium 
Contracts that are exchanged for Zenith 2001 Contracts.
     Contract owners will receive sufficient information to 
determine which contract best suits their needs.
    10. Applicants assert that permitting contract owners to evaluate 
the relative merits of the exchange offers and to select the contract 
that best suits their circumstances and preferences fosters competition 
and is consistent with the public interest and the protection of 
investors. Accordingly, according to applicants, not only is the 
exchange offer consistent with the protections afforded by section 11 
of the Act and the rules promulgated thereunder, but approval of the 
terms of the exchange offer is necessary or appropriate in the public 
interest and consistent with the protection of investors and the 
purposes fairly intended by the policies and provisions of the Act.

Conclusion

    For the reasons summarized above, Applicants represent that: (i) 
The proposed exchange offer is consistent with the intent and purpose 
of Section 11 of the Act and the protection of investors and the 
purposes fairly intended by the policy and provisions of the Act; and 
(ii) the terms of the proposed exchange are ones that may properly be 
approved by an order issued by the Division of Investment Management 
pursuant to delegated authority.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-1990 Filed 4-26-05; 8:45 am]
BILLING CODE 8010-01-P