[Federal Register Volume 70, Number 152 (Tuesday, August 9, 2005)]
[Notices]
[Pages 46196-46224]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-15574]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-27024; File No. 812-13148]


ING USA Annuity & Life Insurance Company, et al.

August 1, 2005.
AGENCY: The Securities and Exchange Commission.

ACTION: Notice of application for an order pursuant to Section 26(c) of 
the Investment Company Act of 1940, as amended (the ``1940 Act''), 
approving certain substitutions of securities and for an order of 
exemption pursuant to Section 17(b) of the Act.

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

    Applicants: ING Insurance Company of America, ING Life Insurance 
and Annuity Company, ING USA Annuity and Life Insurance Company, 
ReliaStar Life Insurance Company, ReliaStar Life Insurance Company of 
New York, and Security Life of Denver Insurance Company (each a 
``Company'' and together, the ``Companies''), Variable Annuity Account 
I of ING Insurance Company of America, Variable Annuity Account B of 
ING Life Insurance and Annuity Company, Separate Account B of ING USA 
Annuity and Life Insurance Company, Separate Account EQ of ING USA 
Annuity and Life Insurance Company, Separate Account U of ING USA 
Annuity and Life Insurance Company, MFS ReliaStar Variable Account of 
ReliaStar Life Insurance Company, ReliaStar Select Variable Account of 
ReliaStar Life Insurance Company, Select*Life Variable Account of 
ReliaStar Life Insurance Company, Separate Account N of ReliaStar Life 
Insurance Company, ReliaStar Life Insurance Company of New York 
Separate Account NY-B, ReliaStar Life Insurance Company of New York 
Variable Annuity Funds M, P & Q, ReliaStar Life Insurance Company of 
New York Variable Life Separate Account I, Security Life Separate 
Account A1, Security Life Separate Account L1, Security Life Separate 
Account S-A1, and Security Life Separate Account S-L1 (each, an 
``Account'' and together, the ``Accounts''), ING Investors Trust, ING 
Partners, Inc. and ING Variable Products Trust. The Companies, the 
Accounts, ING Investors Trust, ING Partners, Inc. and ING Variable 
Products Trust are collectively referred to herein as the 
``Applicants.''

SUMMARY: The Applicants have submitted an application (the 
``Application'') for an order of the Securities and Exchange Commission 
(the ``Commission''), pursuant to Section 26(c), formerly Section (b), 
of the 1940 Act, permitting the substitutions of securities issued by 
certain registered investment companies held by the Accounts to support 
certain in force variable life insurance policies and variable annuity 
contracts (collectively, the ``Contracts'') issued by the Companies. 
More particularly, the Applicants propose to substitute shares of 
certain series of ING Investors Trust, ING Partners, Inc. and ING 
Variable Products Trust (the ``Substitute Funds'') for shares of 
certain registered investment companies currently held by subaccounts 
of the various Accounts (the ``Replaced Funds'') as follows:

------------------------------------------------------------------------
             Replaced funds                      Substitute funds
------------------------------------------------------------------------
AIM V.I. Health Sciences Fund--Series I  ING Evergreen Health Sciences
                                          Portfolio--Class S

[[Page 46197]]

 
ING Evergreen Health Sciences
 Portfolio--Class A.
AIM V.I. Capital Appreciation Fund--     ING Evergreen Omega Portfolio--
 Series I.                                Class I
Alger American Leveraged AllCap
 Portfolio--Class O.
Putnam VT New Opportunities Fund--Class
 IA.
Putnam VT New Opportunities Fund--Class
 IB.
Putnam VT Voyager Fund--Class IA.......
Putnam VT Voyager Fund--Class IB.......
AIM V.I. Capital Appreciation Fund--     ING Evergreen Omega Portfolio--
 Series II.                               Class S
Putnam VT Discovery Growth Fund--Class
 IB.
AIM V.I. Growth Fund--Series I.........  ING FMR Earnings Growth
                                          Portfolio--Class I
Alger American Growth Portfolio--Class
 O.
Alger American Income & Growth
 Portfolio--Class O.
AllianceBernstein VPSF Large Cap Growth
 Portfolio--Class A.
AIM V.I. Growth Fund--Series II........  ING FMR Earnings Growth
                                          Portfolio--Class S
AllianceBernstein VPSF Large Cap Growth
 Portfolio--Class B.
AIM V.I. Small Company Growth Fund--     ING JP Morgan Small Cap Equity
 Series I.                                Portfolio--Class I
Alger American Small Capitalization
 Portfolio--Class O.
AllianceBernstein VPSF Small Cap Growth
 Portfolio--Class A.
Premier VIT OpCap Small Cap Portfolio..
AllianceBernstein VPSF Growth and        ING JP Morgan Value
 Income Portfolio--Class A.               Opportunities Portfolio--Class
                                          I
Putnam VT Growth and Income Fund--Class
 IA.
AllianceBernstein VPSF Growth and        ING JP Morgan Value
 Income Portfolio--Class B.               Opportunities Portfolio--Class
                                          S
AllianceBernstein VPSF Value Portfolio--
 Class B.
Federated American Leaders Fund II--P
 Shares.
Putnam VT Growth and Income Fund--Class
 IB.
AIM V.I. Premier Equity Fund--Series I.  ING Legg Mason Value Portfolio--
                                          Class I
AIM V.I. Premier Equity Fund--Series II  ING Legg Mason Value Portfolio--
                                          Class S
Federated Prime Money Fund II--P Shares  ING Liquid Assets Portfolio--
                                          Class S
Janus Aspen International Growth         ING Marsico International
 Portfolio--Institutional Shares.         Opportunities Portfolio--Class
                                          I
Putnam VT International Equity Fund--
 Class IA.
AIM V.I. International Growth Fund--     ING Marsico International
 Series I.                                Opportunities Portfolio--Class
                                          S
Janus Aspen International Growth
 Portfolio--Service Shares.
Prudential SP William Blair
 International Growth Portfolio Class
 II.
AIM V.I. Dent Demographic Trends Fund--  ING Mercury Large Cap Growth
 Series II.                               Portfolio--Class S
ING Mercury Large Cap Growth Portfolio--
 Class A.
Prudential Jennison Portfolio--Class II
 Shares.
MFS VIT Total Return Series--Initial     ING MFS Total Return Portfolio--
 Class.                                   Class I
MFS VIT Utilities Series--Initial Class  ING MFS Utilities Portfolio--
                                          Class I
Putnam VT Utilities Growth and Income
 Fund--Class IA.
AIM V.I. Utilities Fund--Series I......  ING MFS Utilities Portfolio--
                                          Class S
Premier VIT OpCap Global Equity          ING Oppenheimer Global
 Portfolio.                               Portfolio--I Class
AIM V.I. Diversified Income Fund--       ING Oppenheimer Strategic
 Series I.                                Income Portfolio--S Class
Van Eck Worldwide Bond Fund--Initial
 Class.
Federated High Income Bond Fund II--P    ING PIMCO High Yield Portfolio--
 Shares.                                  Class S
Pioneer Mid Cap Value VCT Portfolio--    ING Pioneer Mid Cap Value
 Class I.                                 Portfolio--Class I
Pioneer Mid Cap Value VCT Portfolio--    ING Pioneer Mid Cap Value
 Class II.                                Portfolio--Class S
AIM V.I. Core Equity Fund--Series I....  ING Pioneer Fund Portfolio--
                                          Class I
AIM V.I. Core Equity Fund--Series II...  ING Pioneer Fund Portfolio--
                                          Class S
Pioneer Fund VCT Portfolio--Class II...
Alger American MidCap Growth Portfolio-- ING T. Rowe Price Diversified
 Class O.                                 Mid Cap Growth Portfolio--I
                                          Class
UBS Series Trust U.S. Allocation         ING UBS U.S. Allocation
 Portfolio--Class I.                      Portfolio--Class S
Premier VIT OpCap Equity Portfolio.....  ING UBS U.S. Large Cap Equity
                                          Portfolio--I Class
Alger American Balanced Portfolio--      ING Van Kampen Equity and
 Class O.                                 Income Portfolio--I Class
Federated Capital Income Fund II--P
 Shares.
AIM V.I. Financial Services Fund--       ING VP Financial Services
 Series I.                                Portfolio--Class S
AIM V.I. High Yield Fund--Series I.....  ING VP High Yield Bond
                                          Portfolio--Class I
Van Eck Worldwide Real Estate Fund--     ING VP Real Estate Portfolio--
 Initial Class.                           Class S
------------------------------------------------------------------------

    Applicants also seek an order of exemption pursuant to Section 
17(b) of the 1940 Act to permit certain in-kind redemptions and 
purchases in connection with the substitutions.
    Filing Date: The Application was filed on December 27, 2004. The 
Application was amended and restated on July 19, 2005 and on July 29, 
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 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 August 26, 2005, and should be accompanied 
by proof of service on Applicants, in the form of an affidavit or, for 
lawyers, a certificate of service. Hearing requests should state the 
nature of the writer's interest, the reason for the request, and the 
issues contested. Persons who wish to be notified of a hearing may 
request notification by writing to the Secretary of the Commission.

ADDRESSES: For the Commission: Secretary, Securities and Exchange 
Commission, 100 F Street NE., Washington, DC 20549-9303. For 
Applicants, J. Neil McMurdie, Esquire, ING Americas U.S. Legal 
Services, 151

[[Page 46198]]

Farmington Avenue, TS31, Hartford, CT 06156-8975.

FOR FURTHER INFORMATION CONTACT: Alison White, Senior Counsel, Office 
of Insurance Products, Division of Investment Management, at (202) 551-
6795.

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.

I. The Application

    The Applicants have requested that the Commission issue an order to 
permit the substitution (``Substitution'') of certain shares of certain 
investment management companies currently held by sub-accounts of the 
various Accounts for shares of certain series of the Substitute Funds.

II. The Applicants, Funds and Contracts

    A. The Companies. Each of the Companies is an indirect wholly owned 
subsidiary of ING Groep, N.V. (``ING''). ING is a global financial 
services holding company based in The Netherlands which is active in 
the field of insurance, banking and asset management. As a result, each 
Company likely would be deemed to be an affiliate the others.
    1. ING Insurance Company of America (``ING America''). ING America 
is a stock life insurance company organized under the laws of the State 
of Connecticut in 1990 and redomesticated under the insurance laws of 
the State of Florida in 2000. Prior to May 1, 2002, ING America was 
known as Aetna Insurance Company of America (``Aetna America''). ING 
America is principally engaged in the business of issuing life 
insurance and annuities.
    ING America is the depositor of Variable Annuity Account I, a 
separate account which is registered with the Commission as a unit 
investment trust.
    2. ING Life Insurance and Annuity Company (``ING Life''). ING Life 
is a stock life insurance company organized under the laws of the State 
of Connecticut in 1976 as Forward Life Insurance Company. Through a 
December 31, 1976 merger ING Life's operations include the business of 
Aetna Variable Annuity Life Insurance Company (formerly known as 
Participating Annuity Life Insurance Company). Prior to May 1, 2002, 
ING Life was known as Aetna Life Insurance and Annuity Company 
(``Aetna''). ING Life is principally engaged in the business of issuing 
life insurance and annuities.
    ING Life also is registered as an investment adviser under the 
Investment Advisers Act of 1940, as amended (the ``Advisers Act''), and 
is the investment adviser for ING Partners, Inc. ING Life is the 
depositor of Variable Annuity Account B, a separate account which is 
registered with the Commission as a unit investment trust.
    3. ING USA Annuity and Life Insurance Company (``ING USA''). ING 
USA is an Iowa stock life insurance company which was originally 
organized in 1973 under the insurance laws of Minnesota. Through a 
January 1, 2004 merger ING USA's operations include the business of the 
former companies, Equitable Life Insurance Company of Iowa (``Equitable 
Life''), United Life and Annuity Insurance Company (``United Life and 
Annuity''), and USG Annuity and Life Company. Prior to January 1, 2004, 
ING USA was known as Golden American Life Insurance Company 
(``Golden''). ING USA is principally engaged in the business of issuing 
life insurance and annuities.
    ING USA is the depositor of Separate Account B, Separate Account EQ 
and Separate Account U, separate accounts which are registered with the 
Commission as unit investment trusts.
    4. ReliaStar Life Insurance Company (``ReliaStar''). ReliaStar is a 
stock life insurance company organized in 1885 and incorporated under 
the laws of the State of Minnesota. Through an October 1, 2002 merger 
ReliaStar's operations include the business of Northern Life Insurance 
Company (``Northern''). ReliaStar is principally engaged in the 
business of issuing life insurance, annuities, employee benefits and 
retirement contracts.
    ReliaStar is the depositor of MFS ReliaStar Variable Account, 
ReliaStar Select Variable Account, Select*Life Variable Account and 
Separate Account N, separate accounts which are registered with the 
Commission as unit investment trusts.
    5. ReliaStar Life Insurance Company of New York (``ReliaStar NY''). 
ReliaStar NY is a stock life insurance company which was incorporated 
under the laws of the State of New York in 1917. Through an April 1, 
2002 merger ReliaStar NY's operations include the business of First 
Golden American Life Insurance Company of New York (``First Golden''). 
ReliaStar NY is principally engaged in the business of issuing life 
insurance and annuities.
    ReliaStar NY is the depositor of Separate Account NY-B, Variable 
Annuity Funds M, P & Q and Variable Life Separate Account I, separate 
accounts which are registered with the Commission as unit investment 
trusts.
    6. Security Life of Denver Insurance Company (``Security Life''). 
Security Life is a stock life insurance company organized under the 
laws of the State of Colorado in 1929. Through an October 1, 2004, 
merger Security Life's operations include the business of Southland 
Life Insurance Company (``Southland''). Security Life is principally 
engaged in the business of issuing life insurance and annuities.
    Security Life is the depositor of Security Life Separate Account 
A1, Security Life Separate Account L1, Security Life Separate Account 
S-A1, and Security Life Separate Account S-L1, separate accounts which 
are registered with the Commission as unit investment trusts.
    B. The Accounts. Each of the Accounts is a segregated asset account 
of the applicable Company, and is registered under the 1940 Act as a 
unit investment trust. Each of the respective Accounts is used by the 
Company of which it is a part to support the Contracts that it issues.
    Each Account is administered and accounted for as part of the 
general business of the Company of which it is a part. The assets of 
each Account attributable to the Contracts issued through it are owned 
by each Company but are held separately from all other assets of that 
Company for the benefit of the owners of, and persons entitled to 
benefits under such Contracts. Pursuant to applicable state insurance 
law and to the extent provided in the Contracts, such assets are not 
chargeable with liabilities arising out of any other business that each 
Company may conduct. Income, if any, gains and losses, realized or 
unrealized, from each Account are credited to or charged against the 
assets of that Account, without regard to other income, gains or losses 
of its Company or any of its other segregated asset accounts. Each 
Account is a ``separate account'' as defined by Rule 0-1(e) under the 
1940 Act.
    Each Account is divided into subaccounts, each of which invests 
exclusively in shares of one investment company portfolio of ING 
Investors Trust, ING Partners, Inc., ING Variable Products Trust, a 
Replaced Fund or another mutual fund. Each investment company portfolio 
has its own distinct investment objective(s) and policies. Income, 
gains and losses, realized or unrealized, of a portfolio are credited 
to or charged against the corresponding subaccount of each Account 
without regard to any other income, gains or losses of the applicable 
Company. To the extent provided in the Contracts,

[[Page 46199]]

assets equal to the reserves and other contract liabilities with 
respect to an Account are not chargeable with liabilities arising out 
of any other business of the Company that is the depositor of the 
Account.
    Each of the prospectuses for the Contracts discloses that the 
Companies reserve the right, subject to Commission approval and 
compliance with applicable law, to substitute shares of another open-
end management investment company for shares of an open-end management 
investment company held by a subaccount of an Account whenever the 
Company, in its judgment, determines that a portfolio no longer suits 
the purpose of the Contract.
    C. The Substitute Funds. Each of the Substitute Funds is a series 
of ING Investors Trust, ING Partners, Inc., or ING Variable Products 
Trust.
    1. ING Investors Trust. ING Investors Trust, formerly known as the 
GCG Trust, was organized as a Massachusetts business trust on August 3, 
1988. ING Investors Trust is registered under the 1940 Act as an open-
end management investment company (File No. 811-5629). It is a series 
investment company as defined by Rule 18f-2 under the 1940 Act, and a 
separate series of shares of beneficial interest is issued in 
connection with each series. Each series is currently offered by 
prospectus dated April 29, 2005. ING Investors Trust has registered 
these shares under the Securities Act of 1933 on Form N-1A (File No. 
033-23512) which was last updated in an amendment to the registration 
statement filed on January 27, 2005.
    Overall management services are provided to ING Investors Trust and 
to each of its individual portfolios by Directed Services, Inc. 
(``DSI''). DSI is an investment adviser registered under the Advisers 
Act, and a broker-dealer registered under the Exchange Act. DSI, an 
indirect wholly owned subsidiary of ING, maintains its offices at 1475 
Dunwoody Drive, West Chester, PA, 19380. Under the terms of an 
investment advisory agreement between ING Investors Trust and DSI (the 
``Trust Management Agreement''), which agreement first became effective 
on October 24, 1997, DSI manages the business and affairs of each of 
the several series of the ING Investors Trust, subject to the control 
and oversight of the ING Investors Trust Board of Trustees (the 
``Board''). Under the Trust Management Agreement, DSI is authorized to 
exercise full investment discretion and make all determinations with 
respect to the investment of the assets of the respective series, but 
may, at its own cost and expense, retain portfolio managers for the 
purpose of making investment decisions and research information 
available to the ING Investors Trust.
    DSI delegates to subadvisers the responsibility for day-to-day 
management of the investments of each portfolio, subject to DSI's 
oversight. DSI also recommends the appointment of additional or 
replacement subadvisers to the Board. The ING Investors Trust and DSI 
have received exemptive relief from the Commission that permits the ING 
Investors Trust and DSI to add or terminate a subadviser without 
shareholder approval.
    2. ING Partners, Inc (``ING Partners''). ING Partners, formerly 
known as Portfolio Partners, Inc., was organized as a Maryland 
corporation in 1997 and commenced operations on November 28, 1997. ING 
Partners is registered under the 1940 Act as an open-end management 
investment company (File No. 811-08319). It is a series investment 
company as defined by Rule 18f-2 under the 1940 Act, and a separate 
series of shares of beneficial interest is issued in connection with 
each series. Each series is currently offered by prospectuses dated 
April 29, 2005. ING Partners has registered these shares under the 
Securities Act of 1933 on Form N-1A (File No. 333-32575) which was last 
updated in an amendment to the registration statement filed on April 1, 
2005.
    ING Life serves as the investment adviser for each ING Partners 
portfolio. ING Life is an investment adviser registered under the 
Advisers Act. ING Life maintains its offices at 151 Farmington Avenue, 
Hartford, Connecticut 06156.
    ING Life delegates to sub-advisers the responsibility for day-to-
day management of the investments of each portfolio, subject to the ING 
Life's oversight. ING Life also recommends the appointment of 
additional or replacement sub-advisers to the Board. ING Partners and 
ING Life have received exemptive relief from the Commission that 
permits ING Life and ING Partners to add or terminate a portfolio's 
sub-adviser without shareholder approval.
    3. ING Variable Products Trust. ING Variable Products Trust, 
formerly known as the Northstar Variable Trust, was organized as a 
Massachusetts business trust in 1993. ING Variable Product Trust is 
registered under the 1940 Act as an open-end management investment 
company (File No. 811-08220). It is a series investment company as 
defined by Rule 18f-2 under the 1940 Act, and a separate series of 
shares of beneficial interest is issued in connection with each series. 
Each series is currently offered by prospectuses dated April 29, 2005. 
ING Variable Products Trust has registered these shares under the 
Securities Act of 1933 on Form N-1A (File No. 033-73140) which was last 
updated in an amendment to the registration statement filed on April 4, 
2005.
    ING Investments, LLC (``ING Investments''), an Arizona limited 
liability company and an SEC registered investment adviser, serves as 
the investment adviser to portfolio of the ING Variable Products Trust. 
ING Investments, subject to the direction of ING Variable Products 
Trust Board of Trustees (the ``Board''), has overall responsibility for 
the management of the portfolios. ING Investments provides or oversees 
all investment advisory and portfolio management services for each 
portfolio and assists in managing and supervising all aspects of the 
general day-to-day business activities and operations of the 
portfolios, including custodial, transfer agency, dividend disbursing, 
accounting, auditing, compliance and related services.
    ING Investments acts as a ``manager-of-managers'' for certain of 
the Substitute Funds. ING Investments delegates to the subadvisers of 
these Substitute Funds the responsibility for investment management, 
subject to ING Investment's oversight. From time to time ING 
Investments may recommend the appointment of additional or replacement 
subadvisers for these Substitute Funds to the portfolios' Board, and in 
reliance on and in accordance with the conditions of Commission relief 
granted to affiliates, with the approval of the Board, ING Investments 
may replace a non-affiliated subadviser as well as change the terms of 
a contract with a non-affiliated subadviser, without submitting the 
contract to a vote of the portfolios' shareholders.
    D. The Replaced Funds. Each fund to be replaced with a Substitute 
Fund is a portfolio of the AIM Variable Insurance Funds, Alger American 
Fund, AllianceBernstein Variable Products Series Fund, Inc., Federated 
Insurance Series, ING Investors Trust, Janus Aspen Series, MFS Variable 
Insurance Trust, Premier VIT (prior to May 1, 2005 known as PIMCO 
Advisors VIT), Pioneer Variable Contracts Trust, The Prudential Series 
Fund, Inc., Putnam Variable Trust, UBS Series Trust, and Van Eck 
Worldwide Insurance Trust.
    E. The Contracts. The Contracts are flexible premium variable 
annuity and variable life insurance contracts. The variable annuity 
Contracts provide for the accumulation of values on a variable basis, 
fixed basis, or both, during the

[[Page 46200]]

accumulation period, and provide settlement or annuity payment options 
on a variable or fixed basis. The variable life insurance Contracts 
provide for the accumulation of values on a variable basis, fixed 
basis, or both throughout the insured's life and for a death benefit, 
upon the death of the insured. Under each of the prospectuses for the 
Contracts, each Company reserves the right to substitute shares of one 
fund or portfolio for shares of another.
    A Contract owner may transfer all or any part of the Contract value 
from one subaccount to any other subaccount or a fixed account as long 
as the Contract remains in effect and at any time up to 30 days before 
the due date of the first annuity payment for variable annuity 
contracts. For many of the Contracts, the Company issuing the Contract 
reserves the right to limit the number of transfers during a specified 
period.

III. The Substitutions

    A. The Funds and the Accounts. Subject to the approval of the 
Commission under Section 26(c) of the 1940 Act, Applicants propose, as 
set forth below, to substitute shares of each Substitute Fund for those 
of the applicable Replaced Fund and transfer cash or securities held by 
each Replaced Fund to the applicable Substitute Fund.

------------------------------------------------------------------------
                                                      Accounts holding
       Replaced funds           Substitute funds    replaced fund assets
------------------------------------------------------------------------
AIM V.I. Health Sciences      ING Evergreen Health  ING USA B; ReliaStar
 Fund--Series I.               Sciences Portfolio--  NY B; Security Life
                               Class S.              L1
ING Evergreen Health          ....................  ING USA B
 Sciences Portfolio--Class A.
AIM V.I. Capital              ING Evergreen Omega   ING LIfe B; ING USA
 Appreciation Fund--Series I.  Portfolio--Class I.   U; Security Life L1
Alger American Leveraged      ....................  ING America 1; ING
 AllCap Portfolio--Class O.                          Life B; ReliaStar
                                                     SL; ReliaStar
                                                     Select VA ReliaStar
                                                     Separate Account N;
                                                     ReliaStar NY I;
                                                     Security Life A1;
                                                     Security Life L1;
                                                     Security Life S-A1;
                                                     Security Life S-L1
Putnam VT New Opportunities   ....................  ReliaStar SL;
 Fund--Class IA.                                     ReliaStar Select
                                                     VA; ReliaStar NY I
Putnam VT New Opportunities   ....................  Security Life L1;
 Fund--Class IB.                                     Security Life S-L1
Putnam VT Voyager Fund--      ....................  ReliaStar SL;
 Class IA.                                           ReliaStar Select
                                                     VA; ReliaStar NY I
Putnam VT Voyager Fund--      ....................  Security Life L1;
 Class IB.                                           Security Life S-L1
AIM V.I. Capital              ING Evergreen Omega   ING USA B
 Appreciation Fund--Series     Portfolio--Class S.
 II.
Putnam VT Discovery Growth    ....................  ING USA B; ReliaStar
 Fund--Class IB.                                     NY B
AIM V.I. Growth Fund--Series  ING FMR Earnings      ING Life B; ING USA
 I.                            Growth Portfolio--    U
                               Class I.
Alger American Growth         ....................  ING USA U; ReliaStar
 Portfolio--Class O.                                 SL; ReliaStar
                                                     Select VA;
                                                     ReliaStar Separate
                                                     Account N;
                                                     ReliaStar NY I;
                                                     Security Life A1;
                                                     Security Life L1;
                                                     Security Life S-A1;
                                                     Security Life S-L1
Alger American Income &       ....................  ING America I; ING
 Growth Portfolio--Class O.                          Life B
AllianceBernstein VPSF Large  ....................  ING Life B
 Cap Growth Portfolio--Class
 A.
AIM V.I. Growth Fund--Series  ING FMR Earnings      ING USA B; ReliaStar
 II.                           Growth Portfolio--    NY B
                               Class S.
AllianceBernstein VPSF Large  ....................  ING USA B; ReliaStar
 Cap Growth Portfolio--Class                         NY B
 B.
AIM V.I. Small Company        ING JP Morgan Small   Security Life L1
 Growth Fund--Series I.        Cap Equity
                               Portfolio--Class I.
Alger American Small          ....................  ReliaStar SL;
 Capitalization Portfolio--                          ReliaStar Select
 Class O.                                            VA; ReliaStar
                                                     Separate Account N;
                                                     ReliaStar NY I;
                                                     Security Life A1;
                                                     Security Life S-A1;
                                                     Security Life S-L1
AllianceBernstein VPSF Small  ....................  ING Life B
 Cap Growth Portfolio--Class
 A.
Premier VIT OpCap Small Cap   ....................  ReliaStar SL;
 Portfolio.                                          ReliaStar Select
                                                     VA; ReliaStar
                                                     Separate Account N;
                                                     ReliaStar NY I
AllianceBernstein VPSF        ING JP Morgan Value   ING Life B;
 Growth and Income             Opportunities         ReliaStar MP&Q
 Portfolio--Class A.           Portfolio--Class I.
Putnam VT Growth and Income   ....................  ReliaStar SL;
 Fund--Class IA.                                     ReliaStar Select
                                                     VA; ReliaStar NY I
AllianceBernstein VPSF        ING JP Morgan Value   ING USA B; ReliaStar
 Growth and Income             Opportunities         NY B
 Portfolio--Class B.           Portfolio--Class S.
AllianceBernsteain VPSF       ....................  ING USA B; ReliaStar
 Value Portfolio--Class B.                           NY B
Federated American Leaders    ....................  ING America I; ING
 Fund II--P Shares.                                  Life B; ING USA U
Putnam VT Growth and Income   ....................  ReliaStar NY B; ING
 Fund--Class IB.                                     USA B; Security
                                                     Life L1; Security
                                                     Life S-L1
AIM V.I. Premier Equity       ING Legg Mason Value  ING Life B
 Fund--Series I.               Portfolio--Class I.
AIM V.I. Premier Equity       ING Legg Mason Value  ING USA B
 Fund--Series II.              Portfolio--Class S.
Federated Prime Money Fund    ING Liquid Assets     ING America I; ING
 II--P Shares.                 Portfolio--Class S.   Life B; ING USA U
Janus Aspen International     ING Marsico           ReliaStar SL;
 Growth Portfolio--            International         ReliaStar Select
 Institutional Shares.         Opportunities         VA; ReliaStar
                               Portfolio--Class I.   Separate Account N;
                                                     ReliaStar NY I;
                                                     Security Life S-A1;
                                                     Security Life S-L1
Putnam VT International       ....................  ReliaStar SL;
 Equity Fund--Class IA.                              ReliaStar Select
                                                     VA;

[[Page 46201]]

 
AIM V.I. International        ING Marsico           ING USA U
 Growth Fund--Series I.        International
                               Opportunities
                               Portfolio--Class S.
Janus Aspen International     ....................  Security Life L1;
 Growth Portfolio--Service                           Security Life S-L1
 Shares.
Prudential SP William Blair   ....................  ING Life B; ING USA
 International Growth                                B; ReliaStar NY B
 Portfolio--Class II.
AIM V.I. Dent Demographic     ING Mercury Large     ING USA B; ReliaStar
 Trends Fund--Series II.       Cap Growth            NY B
                               Portfolio--Class S.
ING Mercury Large Cap Growth  ....................  ING USA B
 Portfolio--Class A.
Prudential Jennison           ....................  ING Life B; ING USA
 Portfolio--Class II Shares.                         B; ING USA EQ;
                                                     ReliaStar NY B
MFS VIT Total Return Series-- ING MFS Total Return  ING America I; ING
 Initial Class.                Portfolio--Class I.   Life B; ING USA U
MFS VIT Utilities Series--    ING MFS Utilities     ING USA U
 Initial Class.                Portfolio--Class I.
Putnam VT Utilities Growth    ....................  ReliaStar SL;
 and Income Fund--Class IA.                          ReliaStar Select VA
AIM V.I. Utilities Fund--     ING MFS Utilities     ING USA B; ReliaStar
 Series I.                     Portfolio--Class S.   NY B; Security Life
                                                     A1; Security Life
                                                     L1; Security Life S-
                                                     A1; Security Life S-
                                                     L1
Premier VIT OpCap Global      ING Oppenheimer       ReliaStar SL;
 Equity Portfolio.             Global Portfolio--I   ReliaStar Select
                               Class.                VA; ReliaStar
                                                     Separate Account N;
                                                     ReliaStar NY I
AIM V.I. Diversified Income   ING Oppenheimer       ING USA U
 Fund--Series I.               Strategic Income
                               Portfolio--S Class.
Van Eck Worldwide Bond Fund-- ....................  Security Life L1
 Initial Class.
Federated High Income Bond    ING PIMCO High Yield  ING America I; ING
 Fund II--P Shares.            Portfolio--Class S.   Life B; ING USA U
Pioneer Mid Cap Value VCT     ING Pioneer Mid Cap   ReliaStar SL;
 Portfolio--Class I.           Value Portfolio--     ReliaStar NY I;
                               Class I.              Security Life L1;
                                                     Security Life S-L1
Pioneer Mid Cap Value VCT     ING Pioneer Mid Cap   ING USA B
 Portfolio--Class II.          Value Portfolio--
                               Class S.
AIM V.I. Core Equity Fund--   ING Pioneer Fund      ING Life B; ING USA
 Series I.                     Portfolio--Class I.   U
AIM V.I. Core Equity Fund--   ING Pioneer Fund      ING USA B
 Series II.                    Portfolio--Class S.
Pioneer Fund VCT Portfolio--  ....................  ING USA B; ReliaStar
 Class II.                                           NY B
Alger American MidCap Growth  ING T. Rowe Price     ReliaStar SL;
 Portfolio--Class O.           Diversified Mid Cap   ReliaStar Select
                               Growth Portfolio--I   VA; ReliaStar
                               Class.                Separate Account N;
                                                     ReliaStar NY I;
                                                     Security Life A1;
                                                     Security Life L1;
                                                     Security Life S-A1;
                                                     Security Life S-L1
UBS Series Trust U.S.         ING UBS U.S.          ING USA B; ReliaStar
 Allocation Portfolio--Class   Allocation            NY B
 I.                            Portfolio--Class S.
Premier VIT OpCap Equity      ING UBS U.S. Large    ReliaStar SL;
 Portfolio.                    Cap Equity            ReliaStar Select
                               Portfolio--I Class.   VA; ReliaStar
                                                     Separate Account N;
                                                     ReliaStar NY I
Alger American Balanced       ING Van Kampen        ING America I; ING
 Portfolio--Class O.           Equity and Income     Life B
                               Portfolio--I Class.
Federated Capital Income      ....................  ING America I; ING
 Fund II--P Shares.                                  Life B; ING USA U
AIM V.I. Financial Services   ING VP Financial      ING USA B; ReliaStar
 Fund--Series I.               Services Portfolio--  NY B
                               Class S.
AIM V.I. High Yield Fund--    ING VP High Yield     Security Life A1;
 Series I.                     Bond Portfolio--      Security Life L1
                               Class I.
Van Eck Worldwide Real        ING VP Real Estate    Security Life L1
 Estate Fund--Initial Class.   Portfolio--Class S.
------------------------------------------------------------------------

    Each Substitute Fund and Replaced Fund is registered as an open-end 
management investment company under the 1940 Act. Further, each is a 
series investment company as defined by Rule 18f-2 under the 1940 Act 
and issues separate series of shares of stock (for corporations) or of 
beneficial interest (for business trusts) in connection with each 
portfolio. The shares of each fund are registered under the 1933 Act on 
Form N-1A
    B. Investment Objectives and Policies. With respect to each 
Replaced Fund, the Applicants have determined that the investment 
objective and the investment policies of the corresponding Substitute 
Fund are the same as, similar to or consistent with those of the 
Replaced Fund and therefore the essential objectives and risk 
expectations of those Contract owners with interests in subaccounts of 
each Replaced Fund will continue to be met after the Substitutions.
    1. The ING Evergreen Health Sciences Portfolio for the AIM V.I. 
Health Sciences Fund. The primary investment objective of both the ING 
Evergreen Health Sciences Portfolio and the AIM V.I. Health Sciences 
Fund is capital growth. Each seeks to achieve this objective through 
substantially similar investment strategies focused on the healthcare 
sector.
    Each fund normally invests at least 80% of its assets in equity 
securities of healthcare companies. Healthcare companies are similarly 
defined for each fund as companies deriving at least 50% of sales 
revenue from healthcare products and services, or comparable measures 
indicating that the primary business of the company is within the 
health sciences sector. Additionally, each of these funds is included 
in the same fund category by Morningstar, namely, Specialty--Health. 
Furthermore, each fund uses a similar index consistent with its primary 
investment objective as a benchmark.
    2. The ING Evergreen Health Sciences Portfolio--Class S for the ING 
Evergreen Health Sciences Portfolio--A Class. This Substitute Fund is 
the same as the corresponding Replaced Fund with the exact same 
investment objective and policies and managed by the exact same 
investment adviser/sub-adviser, but with lower overall fees. This 
substitution is necessary to prevent

[[Page 46202]]

Contracts from offering two classes of shares of the same Substitute 
Fund and to ensure that no affected Contract Owner will have Contract 
values allocated to two different classes of shares of the same 
Substitute Fund after the effective date of the Substitutions 
(``Effective Date'').
    3. The ING Evergreen Omega Portfolio for the AIM V.I. Capital 
Appreciation Fund. The investment objective for the ING Evergreen Omega 
Portfolio is long-term capital growth. The investment objective for the 
AIM V.I. Capital Appreciation Fund is growth of capital. These 
investment objectives are essentially the same.
    Additionally, the investment policies of these funds are the same 
as, similar to or consistent with each other. Each fund employs a 
growth style of equity management and looks for stocks with above-
average, long-term growth in earnings and excellent growth prospects. 
Each fund has the same limit with respect to investments in foreign 
securities (25% of its assets at the time of purchase). Additionally, 
each fund may invest up to 100% of its assets in quality money market 
instruments in order to protect the fund from adverse economic, 
political or market conditions. Furthermore, each of these funds is 
included in the same fund category by Morningstar, namely, Large Cap 
Growth.
    4. The ING Evergreen Omega Portfolio for the Alger American 
Leveraged AllCap Portfolio. The investment objective for the ING 
Evergreen Omega Portfolio is long-term capital growth. The investment 
objective for the Alger American Leveraged AllCap Portfolio is long-
term capital appreciation. Although not articulated in exactly the same 
way, these investment objectives are essentially the same.
    Additionally, the investment policies of the funds are the same as, 
similar to or consistent with each other. Both funds employ a growth 
style of equity management and look for stocks with excellent growth 
prospects and can invest in securities across all market 
capitalizations. Each fund has a similar limit on its investment in 
foreign securities (20% of its assets at the time of purchase for the 
Alger American Leveraged AllCap Portfolio and 25% for the ING Evergreen 
Omega Portfolio). Furthermore, each of these funds is included in the 
same fund category by Morningstar, namely, Large Cap Growth.
    5. The ING Evergreen Omega Portfolio for the Putnam VT Discovery 
Growth Fund. The investment objective of the ING Evergreen Omega 
Portfolio is long-term capital growth. The investment objective of the 
Putnam VT Discovery Growth Fund is to seek long-term growth of capital. 
The investment objectives of the ING Evergreen Omega Portfolio and 
Putnam Discovery Growth Portfolio are essentially the same.
    The investment policies of each of these funds are consistent with 
each other. Each fund invests primarily in stocks of U.S companies 
across all market capitalizations with a focus on a ``growth'' style of 
equity management. While each fund may invest in foreign securities 
(the ING Evergreen Omega Portfolio limits such investments to 25% of 
its assets at the time of purchase and the Putnam VT Discovery Growth 
Fund has no such limit), the amount of each fund's actual investment in 
foreign securities has been quite small. As of September 30, 2004, the 
ING Evergreen Omega Portfolio had 4% of its assets invested in foreign 
securities and the Putnam VT Discovery Growth Fund had 1% it assets 
invested in foreign securities. Furthermore, for both funds all 
investments in foreign securities as of September 30, 2004, were in 
securities listed on U.S. exchanges. Each of these funds is included in 
the same fund category by Morningstar, namely, Large Cap Growth.
    6. The ING Evergreen Omega Portfolio for the Putnam VT New 
Opportunities Fund. The investment objective of the ING Evergreen Omega 
Portfolio is long-term capital growth. The investment objective of the 
Putnam VT New Opportunities Fund is long-term capital appreciation. 
Although not articulated in exactly the same way, these investment 
objectives are essentially the same.
    Additionally the investment policies of each of these funds are the 
same as, similar to or consistent with each other. Each fund invests 
primarily in common stocks of U.S. companies across all market 
capitalizations. Each fund focuses on growth stocks in sectors of the 
economy that are believed to have high growth potential. While each 
fund may invest in foreign securities (the ING Evergreen Omega 
Portfolio limits such investments to 25% of its assets at the time of 
purchase and the Putnam VT New Opportunities Fund has no such limit), 
the amount of each fund's actual investment in foreign securities has 
been quite small. As of September 30, 2004, the ING Evergreen Omega 
Portfolio had 4% of its assets invested in foreign securities and the 
Putnam VT New Opportunities Fund had 2% of its assets invested in 
foreign securities. Furthermore, for both funds all investments in 
foreign securities as of September 30, 2004, were in securities listed 
on U.S. exchanges. Each fund is diversified and is included in the same 
fund category by Morningstar, namely, Large Cap Growth.
    7. The ING Evergreen Omega Portfolio for the Putnam VT Voyager 
Fund. The investment objective of the ING Evergreen Omega Portfolio is 
long-term capital growth. The investment objective of the Putnam VT 
Voyager Fund is capital appreciation. Although not articulated in 
exactly the same way, these investment objectives are essentially the 
same.
    Additionally the investment policies of each of these funds are the 
same as, similar to or consistent with each other. Each fund invests 
primarily in common stocks of U.S. companies across all market 
capitalizations. Each fund focuses on growth stocks. While each fund 
may invest in foreign securities (the ING Evergreen Omega Portfolio 
limits such investments to 25% of its assets at the time of purchase 
and the Putnam VT Voyager Fund has no such limit), the amount of each 
fund's actual investment in foreign securities has been quite small. As 
of September 30, 2004, the ING Evergreen Omega Portfolio had 4% of its 
assets invested in foreign securities and the Putnam VT Voyager Fund 
had 0% of its assets invested in foreign securities. Furthermore, each 
fund is diversified and is included in the same fund category by 
Morningstar, namely, Large Cap Growth.
    8. The ING FMR Earnings Growth Portfolio for the AIM V.I. Growth 
Fund. The ING FMR Earnings Growth Portfolio is a large-cap stock fund 
with a growth emphasis that has as its investment objective to seek 
long-term capital appreciation. The investment objective of the AIM 
V.I. Growth Fund-Series I is to seek growth of capital. The investment 
objectives of the ING FMR Earnings Growth Portfolio and AIM V.I. Growth 
Fund are essentially the same.
    Each of these funds is included in the same fund category by 
Morningstar, namely, Large Cap Growth. Additionally, the investment 
policies of each of these funds are consistent with each other. Each 
fund invests primarily in stocks of U.S companies who have a 
combination of growth, earnings momentum and attractive stock price.
    9. The ING FMR Earnings Growth Portfolio for the Alger American 
Growth Portfolio. The ING FMR Earnings Growth Portfolio is a large-cap 
stock fund with a growth emphasis that has as its investment objective 
to seek long-term capital appreciation. The investment objective of the 
Alger American Growth Portfolio is to seek long-term capital 
appreciation. The investment objectives of the ING FMR Earnings Growth 
Portfolio and Alger

[[Page 46203]]

American Growth Portfolio are the same.
    Each of these funds is included in the same fund category by 
Morningstar, namely, Large Cap Growth. Additionally, the investment 
policies of each of these funds are similar to each other. Each fund 
invests in large-cap stocks using a growth approach to investing.
    10. The ING FMR Earnings Growth Portfolio for the Alger American 
Income & Growth Portfolio. The ING FMR Earnings Growth Portfolio has as 
its investment objective to seek long-term capital appreciation. The 
investment objective of the Alger American Income & Growth Portfolio is 
to seek to provide a high level of dividend income; its secondary goal 
is to provide capital appreciation. Although not articulated in exactly 
the same way, the investment objectives and practices of the ING FMR 
Earnings Growth Portfolio and Alger American Income & Growth Portfolio 
are similar to and consistent with each other.
    Notwithstanding the fact that the Alger American Income & Growth 
Fund's name and investment objective allude to a significant income 
component of the fund, the way in which the fund has been managed is 
more oriented towards growth and is consistent with the way the ING FMR 
Earnings Growth Portfolio is managed. Both funds invest in large 
capitalization stocks, and both funds use a growth approach to 
investing stocks. Additionally, both funds use the Russell 1000 Growth 
Index as their performance benchmark. Consequently, both of these funds 
are included in the Large Cap Growth fund category by Morningstar.
    Finally, the ING FMR Earnings Growth Portfolio has a significant 
income component to it. As of December 31, 2004, the FMR Earnings 
Growth composite (after which the ING FMR Earnings Growth Portfolio is 
patterned) held 72% of income producing assets. As of the same date, 
83% of the Alger American Income & Growth Portfolio's assets were 
invested in income producing assets.
    11. The ING FMR Earnings Growth Portfolio for the AllianceBernstein 
VPSF Large Cap Growth Portfolio. The ING FMR Earnings Growth Portfolio 
is a large-cap stock fund with a growth emphasis that has as its 
investment objective to seek long-term capital appreciation. The 
investment objective of the Alliance Bernstein Premier Growth Portfolio 
is to seek growth of capital by pursuing aggressive investment 
policies.
    Each of these funds is included in the same fund category by 
Morningstar, namely, Large Cap Growth. Additionally, the investment 
policies of each of these funds are consistent with each other. Each 
fund invests primarily in stocks of U.S companies who have a 
combination of growth, earnings momentum and attractive stock price.
    12. The ING JP Morgan Small Cap Equity Portfolio for the AIM V.I. 
Small Company Growth Fund. The ING JP Morgan Small Cap Equity Portfolio 
and the AIM V.I. Small Company Growth Fund seek long-term capital 
growth.
    Each fund invests, under normal market conditions, at least 80% of 
its assets in small-cap companies. Each fund may also invest in 
securities of non-U.S. issuers (with a limit of 20% for the ING JP 
Morgan Small Cap Equity Portfolio and a limit of 25% for the AIM V.I. 
Small Company Growth Fund). The ING JP Morgan Small Cap Equity 
Portfolio combines growth and value investing styles by focusing on 
identifying attractively valued companies with positive business 
fundamentals. The AIM V.I. Small Company Growth Fund focuses on growth 
stocks, seeking investments in companies that have strong prospects for 
future earnings growth.
    Each of these funds is included in the same fund category by 
Morningstar, namely, Small Cap Growth.
    13. The ING JP Morgan Small Cap Equity Portfolio for the Alger 
American Small Capitalization Portfolio. The investment objective of 
the ING JP Morgan Small Cap Equity Portfolio is capital growth over the 
long term. The investment objective of the Alger American Small 
Capitalization Portfolio is long-term capital appreciation. Although 
not articulated in exactly the same way, both funds seek to achieve 
capital growth over the long term.
    Furthermore, each fund pursues a primary investment strategy of 
investing in equity securities of small-cap companies. For each fund 
small-cap companies include those companies with market capitalizations 
equal to those within the universe of the S&P SmallCap 600 Index. The 
ING JP Morgan Small Cap Equity Portfolio combines growth and value 
investing styles by focusing on identifying attractively valued 
companies with positive business fundamentals. The Alger American Small 
Capitalization Portfolio focuses on growth stocks, seeking investments 
in companies that have strong prospects for future earnings growth.
    14. The ING JP Morgan Small Cap Equity Portfolio for the 
AllianceBernstein VPSF Small Cap Growth Portfolio. Growth of capital is 
the common investment objective of each of these funds. The ING JP 
Morgan Small Cap Equity Portfolio seeks capital growth over the long 
term. The AllianceBernstein VPSF Small Cap Growth Portfolio seeks 
growth of capital by pursuing aggressive investment policies.
    Each fund pursues a primary investment strategy of investing in 
equity securities of small-cap companies. For the ING JP Morgan Small 
Cap Equity Portfolio, small-cap companies include those companies with 
market capitalizations equal to those within the universe of the S&P 
SmallCap 600 Index. For the AllianceBernstein VPSF Small Cap Growth 
Portfolio small-cap companies are those at the time of investment fall 
within the lowest 20% of the total U.S. equity market capitalization 
(excluding companies with market capitalizations less than $410 
million). The ING JP Morgan Small Cap Equity Portfolio combines growth 
and value investing styles by focusing on identifying attractively 
valued companies with positive business fundamentals. The 
AllianceBernstein VPSF Small Cap Growth Portfolio focuses on growth 
stocks, seeking investments in companies that have strong prospects for 
future earnings growth.
    Both the ING JP Morgan Small Cap Equity Portfolio and the 
AllianceBernstein VPSF Small Cap Growth Portfolio may invest in foreign 
securities. Each fund is included in the same fund category by 
Morningstar, namely, Small Cap Growth.
    15. The ING JP Morgan Small Cap Equity Portfolio for the Premier 
VIT OpCap Small Cap Portfolio. The ING JP Morgan Small Cap Equity 
Portfolio seeks capital growth over the long term. The PIMCO Advisers 
VIT Op Cap Small Cap Portfolio seeks capital appreciation. Although not 
articulated in exactly the same way, the objectives of these funds are 
essentially the same.
    Each fund pursues a primary investment strategy of investing in 
equity securities of small-cap companies. The ING JP Morgan Small Cap 
Equity Portfolio combines growth and value investing styles by focusing 
on identifying attractively valued companies with positive business 
fundamentals. The PIMCO Advisers VIT OpCap Small Cap Portfolio applies 
the principles of value investing, employing an emphasis on companies 
that generate high returns on assets and free cash flow.
    The funds may invest in foreign securities. The ING JP Morgan Small 
Cap Equity Portfolio may invest up to 20% of its total assets in 
foreign securities in the form of depositary

[[Page 46204]]

receipts. The PIMCO Advisers VIT Op Cap Small Cap Portfolio may also 
invest in foreign securities.
    16. The ING JP Morgan Value Opportunities Portfolio for the 
AllianceBernstein VPSF Growth and Income Fund. The investment objective 
of the ING JP Morgan Value Opportunities Portfolio is to provide long-
term capital appreciation. The investment objective of the 
AllianceBernstein VPSF Growth and Income Portfolio is to seek 
reasonable current income and reasonable opportunity for appreciation 
through investments primarily in dividend-paying common stocks of good 
quality companies. Although not articulated in exactly the same way, 
the investment objectives and practices of the ING JP Morgan Value 
Opportunities Portfolio and AllianceBernstein VPSF Growth and Income 
Portfolio are consistent with and similar to each other.
    Notwithstanding the fact that the AllianceBernstein VPFS Growth and 
Income Fund's name and investment objective allude to a significant 
income component of the fund, the way in which the fund has been 
managed is more oriented towards growth and is consistent with the way 
the ING JP Morgan Value Opportunities Portfolio is managed. Both funds 
invest primarily in equity securities of mid- to large-sized U.S. 
companies which are judged to be undervalued or otherwise have the 
potential for capital growth. Both funds may also invest in foreign 
securities, debt securities and derivatives including options and 
futures. Furthermore, both funds use a similar value index consistent 
with their primary investment objective as a benchmark, and both funds 
are diversified and are included in the same fund category by 
Morningstar, namely, Large Cap Value.
    Finally, the ING JP Morgan Value Opportunities Portfolio has a 
significant income component to it. As of December 31, 2004, the JP 
Morgan Value Opportunities Fund, the retail fund equivalent of the ING 
JP Morgan Value Opportunities Portfolio, held 95% of income producing 
assets. As of the same date, 85% of the AllianceBernstein VPFS Growth 
and Income Fund's assets were invested in income producing assets.
    17. The ING JP Morgan Value Opportunities Portfolio for the 
AllianceBernstein VPSF Value Portfolio. The investment objective of the 
ING JP Morgan Value Opportunities Portfolio and the AllianceBernstein 
VPSF Value Portfolio are essentially the same. Specifically, the 
investment objective of the ING JP Morgan Value Opportunities Portfolio 
is to provide long-term capital appreciation and the investment 
objective of AllianceBernstein VPSF Value Portfolio is long-term growth 
of capital.
    In addition, the investment policies of each of these funds are the 
same as, similar to or consistent with each other. The ING JP Morgan 
Value Opportunities Portfolio invests primarily in mid- to large-sized 
U.S. companies with potential for capital growth, but may also invest 
in foreign securities, debt securities and derivatives including 
options and futures. The AllianceBernstein VPSF Value Portfolio invests 
primarily in a diversified portfolio of equity securities of companies 
with relatively large market capitalizations that Alliance believes are 
undervalued. The AllianceBernstein VPSF Value Portfolio may invest up 
to 15% of its total assets in foreign securities. This is similar to 
the ING JP Morgan Value Opportunities Portfolio which limits the total 
investment in foreign securities to 20% of its assets. Both funds may 
use derivatives to achieve their investment objectives. Both funds may 
invest in the four principal types of derivatives: options; futures; 
forwards; and swaps. Furthermore, each of these funds is diversified, 
and both are included in the same fund category by Morningstar, namely 
Large Cap Value.
    18. The ING JP Morgan Value Opportunities Portfolio for the 
Federated American Leaders Fund II. The investment objective of the ING 
JP Morgan Value Opportunities Portfolio is to provide long-term capital 
appreciation. The investment objective of the Federated American 
Leaders Fund is to seek long-term growth of capital. Although not 
articulated in the same way, each of these funds seeks to achieve long-
term growth by investing primarily in equity securities of mid- and 
large-sized U.S. companies that are judged to be undervalued or 
otherwise have potential for capital growth.
    Each fund invests primarily in mid- to large-sized U.S. companies 
with potential for capital growth, but may also invest in foreign 
securities, debt securities and derivatives including options and 
futures. Furthermore, each of these funds is diversified, and both are 
included in the same fund category by Morningstar, namely Large Cap 
Value.
    19. The ING JP Morgan Value Opportunities Portfolio for the Putnam 
VT Growth and Income Fund. The investment objective of the ING JP 
Morgan Value Opportunities Portfolio is to provide long-term capital 
appreciation. The investment objective for Putnam VT Growth and Income 
Fund is to seek capital growth and current income. Although not 
articulated in exactly the same way, the investment objectives and 
practices of the ING JP Morgan Value Opportunities Portfolio and Putnam 
VT Growth and Income Fund are consistent with and similar to each 
other.
    Notwithstanding the fact that the Putnam VT Growth and Income 
Fund's name and investment objective allude to an income component of 
the fund, the way in which the fund has been managed is more oriented 
towards growth and is consistent with the way the ING JP Morgan Value 
Opportunities Portfolio is managed. Each fund seeks to achieve long-
term growth by investing primarily in equity securities of mid- to 
large-sized U.S. companies that are judged to be undervalued or 
otherwise have potential for capital growth. Each fund may also invest 
in foreign securities, debt securities and derivatives including 
options and futures. Each fund uses a similar value index consistent 
with its primary investment objective as a benchmark. Furthermore, each 
of these funds is diversified, and both are included in the same fund 
category by Morningstar, namely Large Cap Value.
    Finally, the ING JP Morgan Value Opportunities Portfolio has a 
significant income component to it. As of December 31, 2004, the JP 
Morgan Value Opportunities Fund, the retail fund equivalent of the ING 
JP Morgan Value Opportunities Portfolio, held 95% of income producing 
assets. As of the same date, 96% of the Putnam VT Growth and Income 
Portfolio's assets were invested in income producing assets.
    20. The ING Legg Mason Value Portfolio for the AIM V.I. Premier 
Equity Fund. The investment objectives of the ING Legg Mason Value 
Portfolio and the AIM V.I. Premier Equity Fund are essentially the 
same. Specifically, the investment objective of the ING Legg Mason 
Value Portfolio is long-term growth of capital. The investment 
objective of the AIM V.I. Premier Equity Fund is long-term growth of 
capital with income as a secondary objective.
    Additionally, the investment policies of each of these funds are 
the same as, similar to or consistent with each other. Each fund seeks 
to meets it investment objective by investing primarily in equity 
securities. The ING Legg Mason Value Portfolio follows a value 
discipline in selecting securities, and therefore seeks to purchase 
securities at large discounts to the portfolio manager's assessment of 
their intrinsic value. The AIM V.I. Premier Equity Fund investment 
policies also focus on

[[Page 46205]]

undervalued equity securities. Furthermore, each of these funds is 
included in the same fund category by Morningstar, namely, Large Cap 
Blend.
    21. The ING Liquid Assets Portfolio for the Federated Prime Money 
Fund II. The investment objective of the ING Liquid Assets Portfolio is 
a high level of current income consistent with preservation of capital 
and liquidity. The investment objective of the Federated Prime Money 
Fund II is to provide current income consistent with stability of 
principal and liquidity. Each of these money market funds strives to 
maintain a stable net asset value of $1.00 per share by investing in 
high quality fixed income securities issued by banks, corporations and 
the U.S. government.
    22. The ING Marsico International Opportunities Portfolio for the 
AIM V.I. International Growth Fund. Long-term growth of capital is the 
common investment objective of each of these funds.
    Additionally, each fund pursues its investment objective by 
following a strategy of investing in equity securities of foreign 
companies. Each fund seeks to invest in more than one foreign country. 
The AIM V.I. International Growth Fund may invest up to 20% of its 
total assets in securities of issuers located in developing (emerging) 
countries. The ING Marsico International Growth Portfolio does not have 
a stated limit on emerging market investments, but states in the 
prospectus that ``[f]rom time to time the fund may invest in common 
stocks of companies operating in emerging markets.'' As of September 
30, 2004 the AIM V.I. Fund and the Marsico International Opportunities 
(the retail fund after which this Substitute Fund is patterned) had 11% 
and 9%, respectively invested in emerging market countries. Each of the 
funds is diversified. Furthermore, each fund is included in the same 
fund category by Morningstar, namely, Foreign Large Cap Growth.
    23. The ING Marsico International Opportunities Portfolio for the 
Janus Aspen International Growth Portfolio. The investment objectives 
of these two funds are the same; each fund seeks long-term growth of 
capital.
    Additionally, each fund has the principal investment strategy of 
investing the majority of its assets (at least 80% for the Janus Aspen 
International Growth Portfolio and at least 65% for the ING Marsico 
International Opportunities Portfolio) in common stocks of foreign 
companies. Each fund may invest in common stocks of companies operating 
in emerging markets.
    The funds are included in similar fund categories by Morningstar 
(Foreign Large Cap Growth category for the ING Marsico International 
Opportunities Portfolio and the Foreign Stock category for the Janus 
Aspen Series International Growth Portfolio). Each of the funds is 
diversified.
    24. The ING Marsico International Opportunities Portfolio for the 
Prudential SP William Blair International Growth Portfolio. Long-term 
growth of capital is the common investment objective of each of these 
funds.
    Each fund pursues its investment objective by following a strategy 
of investing in equity securities of foreign companies. Each fund 
requires a minimum level of foreign investment (at least 65%). Each 
fund seeks to invest in more than one foreign country (generally at 
least five in the case of the Prudential SP William Blair International 
Growth Portfolio and at least three in the case of the ING Marsico 
International Opportunities Portfolio). Neither fund restricts the 
amount of its assets that may be invested in emerging market countries. 
However, as of September 30, 2004, the Prudential SP William Blair 
International Growth Portfolio and the Marsico International 
Opportunities Fund (the retail fund after which this Substitute Fund is 
patterned) had 8% and 9%, respectively invested in emerging market 
countries.
    Additionally, each of the funds is diversified. Furthermore, each 
of these funds is included in the same fund category by Morningstar, 
namely, Foreign Large Cap Growth category.
    25. The ING Marsico International Opportunities Portfolio for the 
Putnam VT International Equity Fund. The investment objectives of these 
funds are substantially similar, with the ING Marsico International 
Opportunities Portfolio seeking long-term growth of capital and the 
Putnam VT International Equity Fund seeking capital appreciation.
    Each fund has the principal investment strategy of investing the 
majority of its assets (at least 80% for the Putnam VT International 
Equity Fund, and at least 65% for the ING Marsico International 
Opportunities Portfolio) in common stocks of foreign companies. Each 
fund may invest in common stocks of companies operating in emerging 
markets. Each of these funds is diversified and each is included in the 
same fund category by Morningstar, namely, Foreign Large Cap Growth.
    26. The ING Mercury Large Cap Growth Portfolio for the AIM V.I. 
Dent Demographic Trends Fund. The investment objective of each of these 
funds is identical. Specifically, the investment objective of the ING 
Mercury Large Cap Growth Portfolio and the AIM V.I. Dent Demographics 
Fund is long-term growth of capital.
    Additionally, the investment policies of each of these funds are 
the same as, similar to or consistent with each other. Each fund 
employs a growth style of equity management and looks for stocks of 
companies that it believes have the potential for above-average, long-
term growth in earnings. Each fund can also invest in foreign 
securities. Furthermore, each of these funds is included in the same 
fund category by Morningstar, namely, Large Cap Growth.
    27. The ING Mercury Large Cap Growth Portfolio--Class S for the ING 
Mercury Large Cap Growth Portfolio--A Class. This Substitute Fund is 
the same as the corresponding Replaced Fund with the exact same 
investment objective and policies and managed by the exact same 
investment adviser/sub-adviser, but with lower overall fees. This 
substitution is necessary to prevent Contracts from offering two 
classes of shares of the same Substitute Fund, and to ensure that no 
affected Contract Owner will have Contract values allocated to two 
different classes of shares of the same Substitute Fund after the 
Effective Date.
    28. The ING Mercury Large Cap Growth Portfolio for the Prudential 
Jennison Portfolio. The investment objective of each of these funds is 
identical. Specifically, the investment objective of the ING Mercury 
Large Cap Growth Portfolio and the Prudential Jennison Portfolio is 
long-term growth of capital.
    Additionally, the investment policies of each of these funds are 
the same as, similar to or consistent with each other. Each fund 
employs a growth style of equity management and looks for stocks of 
companies that it believes have the potential for above-average, long-
term growth. Each fund can also invest in foreign securities. 
Furthermore, each of these funds is included in the same fund category 
by Morningstar, namely, Large Cap Growth.
    29. The ING MFS Total Return Portfolio for the MFS VIT Total Return 
Series. The ING MFS Total Return Portfolio is patterned after the MFS 
Total Return Fund which in turn is patterned after the MFS VIT Total 
Return Fund. Each of these funds has the same investment objective, 
namely, above-average income (compared to a portfolio entirely invested 
in equity securities) consistent with the prudent employment of 
capital. The secondary

[[Page 46206]]

investment objective of each fund is the reasonable opportunity for 
growth of capital and income. Additionally, the investment adviser for 
the MFS VIT Total Return Fund is the sub-adviser to the ING MFS Total 
Return Portfolio and will manage each fund similarly.
    Additionally, both funds are ``balanced funds,'' and each invests 
in a combination of equity and fixed income securities. Under normal 
market conditions, each fund invests at least 40%, but not more than 
75%, of its net assets in equity securities and at least 25% but no 
more than 60% in the case of the ING MFS VIT Total Return Series, of 
their respective assets in non-convertible fixed income securities. 
Furthermore, each of these funds is diversified and each is included in 
the same fund category by Morningstar, namely, Moderate Allocation.
    30. The ING MFS Utilities Portfolio for the AIM V.I. Utilities 
Fund. The investment objectives of each of these funds are essentially 
the same. Specifically, the investment objective of the ING MFS 
Utilities Portfolio is capital growth and current income above that 
available from a portfolio invested entirely in equity securities. The 
investment objective of the AIM V.I. Utilities Fund is to seek capital 
growth and current income.
    Under normal conditions, each fund invests at least 80% of its 
assets in stocks and bonds of companies in the utilities industry. The 
ING MFS Utilities Portfolio considers a company to be in the utilities 
industry if a substantial portion of the company's assets or revenues 
is derived from one or more utilities. The AIM V.I. Utilities Fund 
considers a company to be in the utilities industry if it meets one of 
the following tests: (a) At least 50% of the company's gross income or 
its net sales come from activities in the utilities sector; (b) at 
least 50% of its assets are devoted to producing revenues from the 
utilities sector; or (c) based on other information, the adviser 
determines that the company's primary business is within the utilities 
sector. Both funds use a ``bottom-up'' approach to investment, and both 
funds may depart from their principal investment strategy by 
temporarily investing for defensive purposes when necessary.
    Each of these funds is non-diversified and each is included in the 
same fund category by Morningstar, namely, Specialty-Utilities. 
Furthermore, each fund uses the S&P 500 Utilities Index as one of its 
benchmark indices.
    31. The ING MFS Utilities Portfolio for the MFS VIT Utilities 
Series. The ING MFS Utilities Portfolio is patterned after the MFS VIT 
Utilities Portfolio and these two funds have the same investment 
objective and policies. Specifically, the investment objective for each 
of these funds is capital growth and current income above that 
available from a portfolio invested entirely in equity securities. 
Additionally, the investment adviser for the MFS VIT Utilities Series 
is the sub-adviser to the ING MFS Utilities Portfolio and will manage 
the two funds in the same way.
    32. The ING MFS Utilities Portfolio for the Putnam VT Utilities 
Growth and Income Fund. The investment objective of each of these funds 
is essentially the same. Specifically, the investment objective of the 
ING MFS Utilities Portfolio is capital growth and current income above 
that available from a portfolio invested entirely in equity securities. 
The investment objective of the Putnam VT Utilities Growth and Income 
Fund is capital growth and current income.
    Under normal conditions, each fund invests at least 80% of its 
assets in stocks and bonds of companies in the utilities industry. The 
ING MFS Utilities Portfolio considers a company to be in the utilities 
industry if a substantial portion of the company's assets or revenues 
are derived from one or more utilities. The Putnam VT Utilities Growth 
and Income Fund considers a company to be in the utilities industry if 
it derives at least 50% of its assets, revenues or profits from 
producing or distributing utilities.
    Additionally, each of these funds is non-diversified and each is 
included in the same fund category by Morningstar, namely, Specialty-
Utilities. Furthermore, each fund uses the S&P 500 Utilities Index as 
one of its benchmark indices.
    33. The ING Oppenheimer Global Portfolio for the Premier VIT OpCap 
Global Equity Portfolio. The investment objective of the ING 
Oppenheimer Global Portfolio and the Premier VIT OpCap Global Equity 
Portfolio is essentially the same. Specifically, the investment 
objective of the ING Oppenheimer Global Portfolio is capital 
appreciation. The investment objective of the Premier VIT OpCap Global 
Equity Portfolio is long-term capital appreciation through the pursuit 
of a global investment strategy primarily involving equity securities.
    The investment policies of the ING Oppenheimer Global Portfolio and 
the Premier VIT OpCap Global Equity Portfolio are the same as, similar 
to or consistent with each other. The ING Oppenheimer Global Portfolio 
invests primarily in common stocks and related equity securities such 
as preferred stock, convertible securities and depositary receipts. It 
seeks to achieve its investment objectives by investing in securities 
of companies worldwide growing at rates expected to be well above the 
growth rate of the overall U.S. economy. Normally, the ING Oppenheimer 
Global Portfolio invests in equity securities derived from three 
distinct market sectors: (a) U.S. emerging growth companies; (b) 
foreign growth companies; and (c) emerging market securities. The 
Premier VIT OpCap Global Equity Portfolio invests primarily in equity 
securities of companies located throughout the world which it believes 
are undervalued in the marketplace. The Premier VIT OpCap Global Equity 
Portfolio applies principles of value investing, although the 
individual portfolio managers may implement these principles 
differently. Neither fund has any restrictions on the amount of its 
assets that can be invested in emerging market securities. As of 
September 30, 2004, the Premier VIT OpCap Global Equity Portfolio held 
approximately 2% of its assets in emerging market securities. The ING 
Oppenheimer Global Portfolio began operations in November 2004, so no 
similar figures are available for this fund. Likewise, neither fund has 
a restriction on the amount of investment in emerging growth companies. 
Furthermore, each of these funds is diversified, and each is included 
in the same fund category by Morningstar, namely, World Stock.
    34. The ING Oppenheimer Strategic Income Portfolio for the AIM V.I. 
Diversified Income Fund. The investment objective of the ING 
Oppenheimer Strategic Income Portfolio is to seek a high level of 
current income principally from interest on debt securities. The 
investment objective of the AIM V.I. Diversified Income Fund is to seek 
a high a level of current income. These objectives are substantially 
identical, in that both funds seek primarily to achieve a high level of 
current income, and each fund's investment strategy focuses on 
investing in income-producing debt securities.
    The ING Oppenheimer Strategic Income Portfolio seeks to meet its 
objective by investing primarily in: (a) Domestic and foreign corporate 
debt securities; (b) U.S. Government securities, including U.S. 
Government agency mortgage-backed securities; (c) securities issued by 
foreign governments, their agencies or instrumentalities, and (d) low-
quality debt securities (``junk bonds'') of U.S. and foreign companies. 
The AIM V.I. Diversified Income fund seeks to meet its objective by 
investing primarily in debt securities of issuers in three market

[[Page 46207]]

sectors: (a) Foreign governments and companies; (b) U.S. Government 
securities; and (c) lower grade high-yield securities of U.S. and 
foreign companies. Neither fund has any restrictions on the amount of 
assets that can be invested in one sector (i.e. ``junk bonds''). 
Accordingly, each fund may invest up to 100% of its assets in ``junk 
bonds,'' but as stated in both prospectuses ``under normal market 
conditions'' the funds will invest in three or four fixed income 
sectors. Although not identical, there is significant overlap between 
the types of securities invested in by each fund.
    Both funds are also diversified, and both funds use the Lehman 
Brothers U.S. Aggregate Bond Index as one of their benchmark indices.
    35. The ING Oppenheimer Strategic Income Portfolio for the Van Eck 
Worldwide Bond Fund. The investment objective of the ING Oppenheimer 
Strategic Income Portfolio is to seek a high level of current income 
principally from interest on debt securities. The investment objective 
of the Van Eck Worldwide Bond Fund is to seek high total return--income 
plus capital appreciation--by investing globally, primarily in a 
variety of debt securities.
    The ING Oppenheimer Strategic Income Portfolio seeks to meet its 
objective by investing primarily in: (a) Domestic and foreign corporate 
debt securities; (b) U.S. Government securities, including U.S. 
Government agency mortgage-backed securities; (c) securities issued by 
foreign governments, their agencies or instrumentalities, and (d) low-
quality debt securities (``junk bonds'') of U.S. and foreign companies. 
The Van Eck Worldwide Bond Fund seeks to meet its objective by 
investing at least 80% of its assets in debt securities rated B or 
better by Standard & Poor's or Moody's Investors Service, or unrated 
securities that are of comparable quality in the adviser's opinion. The 
fund intends to invest no more than 20% of assets in lower-rated ``junk 
bonds'', and then only in lower-rated debt issued by governments or 
government agencies.
    Both the ING Oppenheimer Strategic Income Portfolio and the Van Eck 
Worldwide Bond Fund invest in similar fixed income sectors: (a) Foreign 
government and companies; (b) U.S. Government securities; and (c) lower 
grade high-yield securities. The primary difference in the investment 
strategies of the funds is that the Van Eck Worldwide Bond Fund intends 
to invest no more than 20% of assets in lower rated debt (``junk 
bonds'') while the ING Oppenheimer Strategic Income Portfolio may 
invest all of its assets in ``junk bonds'', but intends to reduce risk 
by diversifying the portfolio's investments in three or four fixed 
income sectors.
    Both funds use the Citigroup World Government Bond Index as one of 
their benchmark indices.
    36. The ING PIMCO High Yield Portfolio for the Federated High 
Income Bond Fund II. The primary investment objective of the ING PIMCO 
High Yield Portfolio is to obtain maximum total return consistent with 
preservation of capital and prudent investment management. The 
investment objective of the Federated High Income Bond Fund II is to 
achieve a high level of current income. While not articulated in 
exactly the same way, each of these funds seeks to achieve high returns 
by investing in a diversified portfolio of high yield debt securities.
    The investment policies of each of these funds are substantially 
the same. Each invests the substantial majority of its assets in non-
investment grade debt securities, i.e., ``junk bonds.'' Each of the 
funds may also invest in derivative instruments. Each fund uses a 
similar index consistent with its primary investment objective as a 
benchmark. Each of these funds is diversified and is included in the 
same fund category by Morningstar, namely, High Yield Bond.
    37. The ING Pioneer Mid Cap Value Portfolio for the Pioneer Mid Cap 
Value VCT Portfolio. The ING Pioneer MidCap Value Portfolio is 
patterned after the Pioneer Mid Cap Value VCT Portfolio and these two 
funds have the same investment objectives and policies. The investment 
objective of both funds is capital appreciation by investing in a 
diversified portfolio of securities consisting primarily of common 
stocks. Additionally, the investment adviser for the Pioneer Mid Cap 
Value VCT Portfolio will be the sub-adviser to the ING Pioneer MidCap 
Value Portfolio and will manage the two funds in the same way.
    38. The ING Pioneer Fund Portfolio for the AIM V.I. Core Equity 
Fund. The investment objective for the ING Pioneer Fund Portfolio is 
reasonable income and capital growth. The investment objective for the 
AIM V.I. Core Equity Fund is growth of capital.
    Each fund seeks to achieve its goals through substantially similar 
policies. Each fund seeks to meet its objectives by investing the major 
portion of its assets in equity securities, including convertible 
securities, of U.S. issuers that are undervalued by the market or 
otherwise have potential for growth in value. Each fund uses a similar 
index consistent with its primary investment objective as a benchmark, 
namely the S&P 500 index. Each fund is diversified, and each is 
included in the same fund category by Morningstar, namely, Large Cap 
Blend.
    39. The ING Pioneer Fund Portfolio for the Pioneer Fund VCT 
Portfolio. The ING Pioneer Fund Portfolio is patterned after the 
Pioneer Fund VCT Portfolio, and these two funds have the same 
investment objectives and policies. The investment objective of both 
funds is reasonable income and capital growth. Additionally, the 
investment adviser for the Pioneer Fund VCT Portfolio is the sub-
adviser to the ING Pioneer Fund Portfolio and will manage the two funds 
in the same way.
    40. The ING T. Rowe Price Diversified Mid Cap Growth Portfolio for 
the Alger American MidCap Growth Portfolio. The investment objectives 
of the ING T. Rowe Price Diversified Mid Cap Growth Portfolio and the 
Alger American Mid Cap Growth Portfolio are identical. Long-term 
capital appreciation is the objective of each fund. Both funds pursue 
their objectives through a primary investment strategy focused on 
investing in U.S. equity securities.
    Each of these funds invests primarily in the equity securities of 
companies having a market capitalization within the range of companies 
in the Russell Mid Cap Growth Index or the S&P Small Cap 600 Index. 
Each of the funds is diversified, and each is included in the same fund 
category by Morningstar, namely, Mid Cap Growth.
    41. The ING UBS U.S. Allocation Portfolio for the UBS Series Trust 
U.S. Allocation Portfolio. The investment objective of the ING UBS U.S. 
Allocation Portfolio is to maximize total return over the long term by 
allocating its assets among stocks, bonds, short-term instruments and 
other investments. The investment objective of the UBS Series Trust 
U.S. Allocation Portfolio is to seek total return, consisting of long-
term capital appreciation and current income. Although not articulated 
in exactly the same way, the investment objectives of each of these two 
funds are essentially the same.
    Furthermore, the investment policies of each of these funds are 
similar. Both funds invest in a combination of high quality bonds, 
short-term fixed income securities and stocks of any capitalization 
class. Each of these funds is included in the same fund category by 
Morningstar, namely, Large Cap Blend.
    42. The ING UBS U.S. Large Cap Equity Portfolio for the Premier VIT 
OpCap Equity Portfolio. The investment objectives of the ING UBS U.S. 
Large Cap Equity Portfolio and the Premier VIT OpCap Equity Portfolio 
are essentially the same. Specifically, the investment objective of the 
ING UBS

[[Page 46208]]

U.S. Large Cap Equity Portfolio is long-term growth of capital and 
future income. The investment objective of the Premier VIT OpCap Equity 
Portfolio is long-term capital appreciation through investment in a 
diversified portfolio of equity securities selected on the basis of a 
value approach to investing.
    Both funds invest at least 80% of their net assets (plus the amount 
of any borrowings for investment purposes) in equity securities. The 
ING UBS U.S. Large Cap Equity Portfolio invests the majority of its 
assets in equity securities of U.S. large-cap companies and investments 
may include dividend-paying securities, common stock and preferred 
stock. It may also hold small- and intermediate-cap stocks and may use 
options, futures and other derivatives as part of its investment 
strategy or to help manage portfolio risks. The Premier VIT OpCap 
Equity Portfolio invests the majority of it assets in equity securities 
of companies it believes are undervalued in the marketplace. Normally, 
the Premier VIT OpCap Equity Portfolio invests in equity securities 
listed on the New York Stock Exchange and on other U.S. or foreign 
securities exchanges or traded in the U.S. or foreign over-the-counter 
markets. The Premier VIT OpCap Equity Portfolio applies principles of 
value investing, although the individual portfolio managers may 
implement these principles differently. OpCap Advisors uses fundamental 
analysis to select securities. The Premier VIT OpCap Equity Portfolio 
may also use derivatives including futures contracts, options on 
futures, forward foreign currency contracts, covered calls, uncovered 
calls and puts, option on stock indices, and swaps as part of its 
investment strategy.
    Each of these funds is diversified. The ING UBS U.S. Large Cap 
Equity Portfolio is categorized as a Large Cap Blend fund by 
Morningstar. The Premier VIT OpCap Equity Portfolio is categorized by 
Morningstar as a Large Cap Value fund. Even though these funds 
currently fall in different Morningstar categories, their investment 
styles are similar.
    43. The ING Van Kampen Equity and Income Portfolio for the Alger 
American Balanced Portfolio. The investment objective of the ING Van 
Kampen Equity and Income Portfolio is total return consisting of long-
term capital appreciation and current income. The investment objective 
of the Alger American Balanced Portfolio is to seek current income and 
long-term capital appreciation. Although not stated in the same way, 
both funds seek to achieve a balance of income and long-term growth.
    The ING Van Kampen Equity and Income Portfolio invests at least 80% 
of its net assets (plus any borrowings for investment purposes) in 
equity and income securities at the time of investment. It seeks to 
achieve its investment objective by investing primarily in income-
producing equity instruments (including common stocks, preferred stocks 
and convertible securities) and investment grade quality debt 
instruments. Under normal market conditions, the ING Van Kampen Equity 
and Income Portfolio invests at least 65% of its total assets in 
income-producing equity securities. It may also invest up to 25% of its 
total assets in securities of foreign issuers.
    The Alger American Balanced Portfolio also invests primarily in 
equity securities, such as common or preferred stock. It focuses on 
securities of companies with growth potential and on fixed income 
securities, especially those with the potential for capital 
appreciation. Ordinarily, at least 25% of its assets are invested in 
fixed income securities.
    The investment strategies of the ING Van Kampen Equity and Income 
Portfolio and the Alger American Balanced Portfolio are the same as, 
similar to or consistent with each other. Furthermore, each fund is 
included in the same fund category by Morningstar, namely, Moderate 
Allocation.
    44. The ING Van Kampen Equity and Income Portfolio for the 
Federated Capital Income Fund II. The investment objective of the ING 
Van Kampen Equity and Income Portfolio is total return consisting of 
long-term capital appreciation and current income. The investment 
objective of the Federated Capital Income Fund II is to achieve high 
current income and moderate capital appreciation. Although not 
articulated in exactly the same way, each fund seeks to achieve current 
income and capital appreciation.
    The ING Van Kampen Equity and Income Portfolio invests at least 80% 
of its net ssets (plus any borrowings for investment purposes) in 
equity and income securities at the time of investment. It seeks to 
achieve its investment objective by investing primarily in income-
producing equity instruments (including common stocks, preferred stocks 
and convertible securities) and investment grade quality debt 
instruments. Under normal market conditions, the ING Van Kampen Equity 
and Income Portfolio invests at least 65% of its total assets in 
income-producing equity securities. It may also invest up to 25% of its 
total assets in securities of foreign issuers.
    The Federated Capital Income Fund II invests in both equity and 
fixed income securities that have high relative income potential. The 
Federated Capital Income Fund II investment adviser pursues the Fund's 
investment objectives by attempting to identify mature, high-quality 
mid- to large-cap companies with high relative dividend yields that are 
likely to maintain or increase their dividends. The investment adviser 
elects fixed income investments that offer high current yields.
    Each of these funds is diversified. Morningstar categorizes the ING 
Van Kampen Equity and Income Portfolio as Moderate Allocation and the 
Federated Capital Income Fund II as Conservative Allocation. 
Notwithstanding the differences in Morningstar's categorization of the 
two funds, the investment policies of each of these funds are the same 
as, similar to or consistent with each other. In categorizing mutual 
funds Morningstar looks back to see how a fund has been managed over an 
extended period of time, and Morningstar can change a categorization at 
any time. Currently the ING Van Kampen Equity and Income Portfolio is 
more conservative due to the credit quality of the fund's bond 
holdings. The Van Kampen Equity and Income Portfolio generally invests 
in only investment grade bonds, although it may invest up to 5% of its 
assets in medium quality bonds or unrated bonds determined by Van 
Kampen to be of comparable quality. As of December 31, 2003 and June 
30, 2004, the Van Kampen Equity and Income Portfolio held only 
investment grade bonds. If the ING Van Kampen Equity and Income 
Portfolio's manager continues to hold a more conservative allocation of 
bonds, it can be expected that Morningstar will change the 
categorization of this funds to ``conservative.''
    45. The ING VP Financial Services Portfolio for the AIM V.I. 
Financial Services Fund. The investment objectives of these funds are 
substantially similar, with the ING VP Financial Services Portfolio 
seeking long-term capital appreciation and the AIM V.I. Financial 
Services Fund seeking capital growth.
    Additionally, the investment strategies of each of these funds is 
the same in as much as each fund invests, under normal market 
conditions, at least 80% of its net assets in equity securities and 
equity related instruments of companies engaged in the financial 
services industry. Furthermore, each fund is included in the same fund

[[Page 46209]]

category by Morningstar, namely, Specialized Financial Services.
    46. The ING VP High Yield Bond Portfolio for the AIM V.I. High 
Yield Fund. The investment objective of the ING VP High Yield Bond 
Portfolio is to provide investors with a high level of current income 
and total return. The investment objective of the AIM VI High Yield 
Fund is to achieve a high level of current income. While not 
articulated in exactly the same way, each of these funds seeks to 
achieve high returns by investing in a diversified portfolio of high 
yield debt securities.
    Each of these funds seeks to achieve its investment objective by 
investing, under normal market conditions, at least 80% of its net 
assets in non-investment grade debt securities, i.e., ``junk bonds.'' 
Each of the funds may also invest in derivative instruments. Each also 
uses the Lehman Brothers High Yield Bond Index as one of its 
performance benchmarks. Furthermore, each fund is included in the same 
fund category by Morningstar, namely, High Yield Bond.
    47. The ING VP Real Estate Portfolio for the Van Eck Worldwide Real 
Estate Fund. The investment objectives of each of these two funds are 
essentially the same. The ING VP Real Estate Portfolio seeks total 
return by investing, under normal market conditions, at least 80% of 
its assets in common and preferred stocks of U.S. real estate 
investment trusts (REITs) and real estate companies. The Van Eck 
Worldwide Real Estate Fund seeks to maximize return by investing, under 
normal market conditions, at least 80% of its assets in equity 
securities of domestic and foreign companies that own significant real 
estate assets or that are principally engaged in the real estate 
industry.
    The investment policies of each of these funds are the same as, 
similar to or consistent with each other. Additionally, each of these 
funds is non-diversified and each is included in the same fund category 
by Morningstar, namely, Specialized--Real Estate.
    The primary difference between the funds is that the Van Eck 
Worldwide Real Estate Portfolio will normally invest in companies from 
at least three countries, including the United States, while the ING VP 
Real Estate Portfolio will normally invest only in United States 
companies. The ING VP Real Estate Portfolio may hold foreign 
investments if the fund's advisor deems them to be attractive for the 
fund. As of December 31, 2004, the Van Eck Portfolio was about 55% 
invested in United States companies and 37% in companies located 
outside the United States. The ING VP Portfolio was 96% invested in 
companies in the United States and 0% in foreign investments.
    C. Fees and Expenses. As is detailed below, the overall expenses of 
the Substitute Funds are lower than or equal to those of the Replaced 
Funds. Applicants believe that, because each Substitute Fund will be 
offered over a substantially larger asset base than the applicable 
Replaced Fund, there is a potential that Contract owners will, over 
time, realize the benefits from additional economies of scale with 
respect to the advisory fees. The fees and expenses for each Substitute 
Fund are those which will be in effect before the Effective Date of the 
Substitutions. The fees and expenses of the Replaced Funds are as of 
December 31, 2004, but have been updated to reflect any subsequent fee 
reductions and/or expense waiver or reimbursement arrangements.
BILLING CODE 8010-01-P

[[Page 46210]]

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[[Page 46211]]


[GRAPHIC] [TIFF OMITTED] TN09AU05.013


[[Page 46212]]


[GRAPHIC] [TIFF OMITTED] TN09AU05.014


[[Page 46213]]


[GRAPHIC] [TIFF OMITTED] TN09AU05.015


[[Page 46214]]


[GRAPHIC] [TIFF OMITTED] TN09AU05.016

BILLING CODE 8010-01-C
    No brokerage commissions, fees or other remuneration will be paid 
by any Replaced Fund or any Substitute Fund or Contract owner in 
connection with the Substitutions.
    D. Expense Ratios and Total Returns. The following chart shows the 
expense ratio (ratio of operating expenses as a percentage of average 
net assets) for each Substitute Fund and Corresponding Replaced Fund. 
It also shows the total return figures for each Substitute Fund, the 
corresponding Replaced Fund and a Comparable Fund as of December 31, 
2004. The expense ratios for the Substitute Funds in the table are 
based on the fees and expenses which will be in place before the 
Effective Date of the Substitutions. For the Replaced Funds the expense 
ratios are based on net assets as of December 31, 2004. Expense ratios 
reflect all applicable contractual expense limitations. Expenses since 
inception are only shown if the inception date is more recent than the 
applicable 3, 5 or 10 year period.

BILLING CODE 8010-01-P

[[Page 46215]]

[GRAPHIC] [TIFF OMITTED] TN09AU05.017


[[Page 46216]]


[GRAPHIC] [TIFF OMITTED] TN09AU05.018


[[Page 46217]]


[GRAPHIC] [TIFF OMITTED] TN09AU05.019


[[Page 46218]]


[GRAPHIC] [TIFF OMITTED] TN09AU05.020


[[Page 46219]]


[GRAPHIC] [TIFF OMITTED] TN09AU05.021

    E. Estimated Net Assets after the Substitutions. The following 
chart shows the estimated size (in net assets) for each Substitute Fund 
immediately following the Effective Date.

[[Page 46220]]

[GRAPHIC] [TIFF OMITTED] TN09AU05.022

BILLING CODE 8010-01-C

IV. Implementation

    A. Applicants will effect the Substitutions as soon as practicable 
following the issuance of the requested order. As of the Effective Date 
of the Substitutions, shares of each Replaced Fund will be redeemed for 
cash or in-kind. The Companies, on behalf of each Replaced Fund 
subaccount of each relevant Account, will simultaneously place a 
redemption request with the Replaced Fund and a purchase order with the 
corresponding Substitute Fund so that the purchase of Substitute Fund 
shares will be for the exact amount of the redemption proceeds. Thus, 
Contract values will remain fully invested at all times. The proceeds 
of such redemptions will then be used to purchase the appropriate 
number of shares of the applicable Substitute Fund.
    B. The Substitutions will take place at relative net asset value 
(in accordance with Rule 22c-1 under the 1940 Act) with no change in 
the amount of any affected Contract owner's account value or death 
benefit, or in the dollar value of his or her investment in the 
applicable Account. Any in-kind redemption of shares of a Replaced Fund 
or in-kind purchase of shares of the corresponding Substitute Fund 
will, except as noted below, take place in substantial compliance with 
the conditions of Rule 17a-7 under the 1940 Act. No brokerage 
commissions, fees or other remuneration will be paid by either the 
Replaced Fund or the corresponding Substitute Fund or by affected 
Contract owners in connection with the Substitutions. The transactions 
comprising the Substitutions will be consistent with the policies of 
each investment company involved and with the general purposes of the 
1940 Act.
    C. Affected Contract owners will not incur any fees or charges as a 
result of the Substitutions nor will their rights or the Companies' 
obligations under the

[[Page 46221]]

Contracts be altered in any way. The Companies or their affiliates will 
pay all expenses and transaction costs of the Substitutions, including 
legal and accounting expenses, any applicable brokerage expenses, and 
other fees and expenses. In addition, the Substitutions will not impose 
any tax liability on affected Contract owners. The Substitutions will 
not cause the Contract fees and charges currently being paid by 
affected Contract owners to be greater after the Substitutions than 
before the Substitutions. Also, as described more fully below, after 
notification of the Substitutions and for 30 days after the 
Substitutions, affected Contract owners may reallocate to any other 
investment options available under their Contract the subaccount value 
of the Replaced Fund without incurring any administrative costs or 
allocation (transfer) charges.
    D. Before the Effective Date of the Substitutions, all affected 
Contract owners will be notified of the Substitutions by means of 
supplements to the Contract prospectuses. Among other information 
regarding the Substitutions, the supplements will inform affected 
Contract owners that beginning on the date of the first supplement the 
Companies will not exercise any rights reserved by them under the 
Contracts to impose restrictions or fees on transfers from the Replaced 
Funds (other than restrictions related to frequent or disruptive 
transfers) until at least 30 days after the Effective Date of the 
Substitutions. Following the date the order requested by the 
Application is issued, but before the Effective Date, affected Contract 
owners will receive a second supplement to the Contract prospectus or 
prospectus summary, as applicable, setting forth the Effective Date and 
advising affected Contract owners of their right, if they so choose, at 
any time prior to the Effective Date, to reallocate or withdraw 
accumulated value in the relevant Replaced Fund subaccounts under their 
Contracts or otherwise terminate their interest therein in accordance 
with the terms and conditions of their Contracts. If affected Contract 
Owners reallocate account value prior to the Effective Date or within 
30 days after the Effective Date, there will be no charge for the 
reallocation of accumulated value from each Replaced Fund subaccount 
and the reallocation will not count as a transfer when imposing any 
applicable restriction or limit under the Contract on transfers. The 
Companies will not exercise any right they may have under the Contracts 
to impose additional restrictions or fees on transfers from the 
Replaced Funds under the Contracts (other than restrictions related to 
frequent or disruptive transfers) for a period of at least 30 days 
following the Effective Date of the Substitutions. Additionally, all 
current Contract Owners will be sent prospectuses of the Substitute 
Funds before the Effective Date. Alternatively, ING America and ING 
Life may determine to send to Participants summaries of the 
prospectuses of the Substitute Funds.
    E. Within five (5) business days after the Effective Date, affected 
Contract Owners will be sent a written confirmation (``Post-
Substitution Confirmation'') indicating that shares of the Replaced 
Funds have been redeemed and that the shares of Substitute Funds have 
been substituted. The Post-Substitution Confirmation will show how the 
allocation of the Contract Owner's account value before and immediately 
following the Substitutions have changed as a result of the 
Substitutions and detail the transactions effected on behalf of the 
respective affected Contract Owner because of the Substitutions.

V. Applicant's Legal Analysis

    A. Section 26(c) of the 1940 Act requires the depositor of a 
registered unit investment trust holding the securities of a single 
issuer to receive Commission approval before substituting the 
securities held by the trust. Prior to the enactment of this provision 
in 1970, a depositor of a unit investment trust could substitute new 
securities for those held by the trust by notifying the trust's 
security holders of the substitution within five days of the 
substitution. In 1966, the Commission, concerned with the high sales 
charges then common to most unit investment trusts and the 
disadvantageous position in which such charges placed investors who did 
not want to remain invested in the substituted fund, recommended that 
the 1940 Act be amended to require that a proposed substitution of the 
underlying investments of a trust receive prior Commission approval.
    B. Each of the prospectuses for the Contracts expressly disclose 
the reservation of the Companies the right, subject to compliance with 
applicable law, to substitute shares of another open-end management 
investment company for shares of an open-end management investment 
company held by a subaccount of an Account.
    C. The Companies reserved this right of substitution both to 
protect themselves and their Contract owners in situations where either 
might be harmed or disadvantaged by circumstances surrounding the 
issuer of the shares held by one or more of its separate accounts and 
to afford the opportunity to replace such shares where to do so could 
benefit the Contract owners and Companies.
    D. Applicants maintain that Contract owners will be better served 
by the proposed Substitutions. Applicants anticipate that the 
replacement of certain Replaced Funds will result in a Contract that is 
administered and managed more efficiently, and one that is more 
competitive with other variable products in both wholesale and retail 
markets. For all of the proposed substitutions, each Substitute Fund 
(or sub-adviser managing a similar fund for those Substitute Funds 
without a performance history) generally has had comparable or more 
consistent investment performance than the corresponding Replaced Fund 
that it would replace. Moreover, each Substitute Fund has fees that are 
the same as or less than the corresponding Replaced Fund. Applicants 
state that for all of the proposed substitutions, the investment 
objective and policies of each Substitute Fund are the same as, similar 
to, or consistent with the investment objective and policies of the 
corresponding Replaced Fund.
    E. In addition to the foregoing, Applicants generally submit that 
the proposed Substitutions meet the standards that the Commission and 
its staff have applied to similar substitutions that have been approved 
in the past.
    F. Applicants anticipate that Contract owners will be at least as 
well off with the proposed array of subaccounts to be offered after the 
proposed substitutions as they have been with the array of subaccounts 
offered before the substitutions. The proposed substitutions retain for 
Contract owners the investment flexibility which is a central feature 
of the Contracts. If the proposed substitutions are carried out, all 
Contract owners will be permitted to allocate purchase payments and 
transfer accumulated values and contract values between and among the 
remaining subaccounts as they could before the proposed substitutions.
    G. Applicants assert that each of the proposed substitutions is not 
the type of substitution which Section 26(c) was designed to prevent. 
Unlike traditional unit investment trusts where a depositor could only 
substitute an investment security in a manner which permanently 
affected all the investors in the trust, the Contracts provide each 
Contract owner with the right to exercise his or her own judgment and 
transfer contract values into other

[[Page 46222]]

subaccounts. Moreover, the Contracts will offer Contract owners the 
opportunity to transfer amounts out of the subaccounts which invest in 
the Replaced Funds into any of the remaining subaccounts without cost 
or other disadvantage. The proposed substitutions, therefore, will not 
result in the type of costly forced redemption which Section 26(c) was 
designed to prevent.
    H. Applicants maintain that the proposed substitutions also are 
unlike the type of substitution which Section 26(c) was designed to 
prevent in that by purchasing a Contract, Contract owners select much 
more than a particular investment company in which to invest their 
account values. They also select the specific types of insurance 
coverages offered by the various Companies under the Contracts as well 
as numerous other rights and privileges set forth in each Contract. 
Contract owners may also have considered the size, financial condition, 
type, and reputation of ING and the various Companies. These factors 
will not change because of the proposed substitutions.
    I. Applicants submit that, for all the reasons stated above, the 
proposed substitutions are consistent with the protection of investors 
and the purposes fairly intended by the policy and provisions of the 
1940 Act.
    J. Section 17(a)(1) of the 1940 Act, in relevant part, prohibits 
any affiliated person of a registered investment company, or any 
affiliated person of such person, acting as principal, from knowingly 
selling any security or other property to that company. Section 
17(a)(2) of the 1940 Act generally prohibits the persons described 
above, acting as principals, from knowingly purchasing any security or 
other property from the registered investment company. Section 17(b) of 
the 1940 Act provides that the Commission may, upon application, grant 
an order exempting any transaction from the prohibitions of Section 
17(a) if the evidence establishes that: (1) 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; (2) the proposed transaction is consistent with the 
policy of each registered investment company concerned, as recited in 
its registration statement and records filed under the 1940 Act; and 
(3) the proposed transaction is consistent with the general purposes of 
the 1940 Act.
    K. Applicants maintain that the terms of the Substitutions, 
including the consideration to be paid and received by each Replaced 
Fund or Substitute Fund, are reasonable, fair and do not involve 
overreaching principally because the transactions do not cause owners' 
interests under a Contract to be diluted, and because the transactions 
will conform with the principal conditions enumerated in Rule 17a-7. 
The proposed transactions will take place at relative net asset value 
with no change in the amount of any Contract owner's Contract or cash 
value, accumulation value or death benefit or in the dollar value of 
his or her investment in any of the Accounts.
    L. Applicants submit that the Substitutions by the Companies are 
consistent with the policies of each Substitute Fund and each Replaced 
Fund, as recited in the current registration statements and reports 
filed by each under the 1940 Act. Applicants also submit that the 
proposed substitutions are consistent with the general purposes of the 
Act.
    M. Applicants submit that, to the extent that the Substitutions are 
deemed to involve principal transactions between affiliates, the 
procedures and terms and descriptions described in the Application 
demonstrate that neither the Replaced Funds, the Substitute Funds, the 
Accounts nor any other Applicant will be participating in the 
Substitutions on a basis less advantageous than that of any other 
participant. Even though the Applicants may not rely on Rule 17a-7, 
Applicants believe that the Rule's conditions outline the type of 
safeguards that result in transactions that are fair and reasonable to 
registered investment company participants and preclude overreaching in 
connection with an investment company by its affiliated persons.
    N. The boards of trustees or directors, as applicable of each 
Replaced Fund and ING Investors Trust, ING Partners, Inc. and ING 
Variable Products Trust have adopted procedures, as required by 
paragraph (e)(1) of Rule 17a-7, pursuant to which the portfolios or 
funds of each may purchase and sell securities to and from their 
affiliates. The Companies and the investment advisers will carry out 
the Substitutions in conformity with the principal conditions of Rule 
l7a-7 and each Replaced Fund's and the Substitute Fund's procedures 
thereunder. Nevertheless, the circumstances surrounding the 
Substitutions will be such as to offer the same degree of protection to 
each Substitute Fund and each Replaced Fund from overreaching that Rule 
17a-7 provides to them generally in connection with their purchase and 
sale of securities under that Rule in the ordinary course of their 
business. In particular, because of the circumstances surrounding the 
Substitutions, no investment manager to a replaced Portfolio could 
``dump'' undesirable securities on the corresponding Substitute Fund or 
retain its desirable securities for other portfolios or have them 
transferred to its other advisory clients. Nor can the Companies (or 
any of the affiliates of each) effect the proposed transactions at a 
price that is disadvantageous to any Substitute Fund or Replaced Fund. 
Although the transaction may not be entirely for cash, it will be 
effected based upon: (1) The independent market price of the portfolio 
securities valued as specified in paragraph (b) of Rule 17a-7; and (2) 
the net asset value per share of each Substitute Fund and the 
corresponding Replaced Fund valued in accordance with the procedures 
disclosed in the registration statements for each Substitute Fund and 
as required by Rule 22c-1 under the 1940 Act. No brokerage commission, 
fee, or other remuneration will be paid to any party in connection with 
the proposed transactions. In addition, the applicable ING Investors 
Trust, ING Partners, Inc. and ING Variable Products Trust Board will 
subsequently review the Substitutions and make the determinations 
required by paragraph (e)(3) of Rule 17a-7.
    O. Except as noted below, applicants state that the Substitutions 
will take place in accordance with the requirements enumerated in Rule 
17a-7 under the 1940 Act and with the approval of the applicable Board 
of ING Investors Trust, ING Partners, Inc. and ING Variable Products 
Trust, except that the Substitutions may be effected in cash or in-
kind. Among other things, Rule 17a-7 requires, in relevant part, that:

    (a) The transaction is a purchase or sale, for no consideration 
other than cash payment against prompt delivery of a security for 
which market quotations are readily available;
    (b) The transaction is effected at the independent current 
market price of the security. For purposes of this paragraph the 
``current market price'' shall be: * * * (4) * * * the average of 
the highest current independent bid and lowest current independent 
offer determined on the basis of reasonable inquiry;
    (c) The transaction is consistent with the policy of each 
registered investment company and separate series of a registered 
investment company participating in the transaction, as recited in 
its registration statement and reports filed under the [1940] Act;
    (d) No brokerage commission, fee (except for customary transfer 
fees), or other remuneration is paid in connection with the 
transaction;

[[Page 46223]]

    (e) The board of directors of the investment company, including 
a majority of the directors who are not interested persons of such 
investment company, (1) adopts procedures pursuant to which such 
purchase or sales transactions may be effected for the company, 
which are reasonably designed to provide that all of the conditions 
of this section in paragraphs (a) through (d) have been complied 
with, (2) makes and approves such changes as the board deems 
necessary, and (3) determines no less frequently than quarterly that 
all such purchases or sales made during the preceding quarter were 
effected in compliance with such procedures;
    (f) The board of directors of the investment company satisfies 
the fund governance standards defined in Section 270.0-1(a)(7); 
[and]
    (g) The investment company (1) maintains and preserves 
permanently in an easily accessible place a written copy of the 
procedures (and modifications thereto) described in paragraph (e) of 
this section, and (2) maintains and preserves for a period of not 
less than six years from the end of the fiscal year in which any 
transaction occurred, the first two years in a readily accessible 
place, a written record of each such transaction setting forth a 
description of the security purchased or sold, the identity of the 
person on the other side of the transaction, the terms of the 
purchase or sale transaction, and the information or materials upon 
which the determination described in paragraph (e)(3) of this 
section were made.

    In addition, Applicants further submit that the Substitutions are 
consistent with the investment policy of each Replaced Fund and each 
Substitute Fund, as recited in the current prospectuses relating to 
each.
    P. With regard to the Substitutions involving in-kind transfers, 
the investment adviser of each Substitute Fund and the investment 
adviser to the corresponding Replaced Fund intend to value securities 
selected for transfer between the two funds in a manner that is 
consistent with the current methodology used to calculate the daily net 
asset value of the Replaced Fund. Where a Replaced Fund's investment 
adviser employs certain third party, independent pricing services to 
value securities held by the Replaced Fund (``Vendor Pricing''), the 
investment adviser of each Substitute Fund and the corresponding 
Replaced Fund's investment adviser intend to employ Vendor Pricing to 
value securities held by the Replaced Fund that are selected for 
transfer to the Substitute Fund. Vendor Pricing may be used in each of 
the Substitutions. Generally, the redemption of securities from the 
Replaced Fund and subsequent transfer to the Substitute Fund will be 
done on a pro-rata basis. In the event that a Replaced Fund holds 
illiquid or restricted securities or assets that are not otherwise 
readily distributable or if a pro-rata transfer of securities would 
result in the parties holding odd lots, the investment advisers may 
agree to have a Replaced Fund transfer to the Substitute Fund an 
equivalent amount of cash instead of securities.
    Q. After the assets have been contributed to the Substitute Fund, 
responsibility for valuation of the securities held by the Substitute 
Fund will shift to the valuation committee of the applicable Board of 
ING Investors Trust, ING Partners, Inc., or ING Variable Products 
Trust. At the end of the first trading following the transfer, the 
applicable valuation agent and custodian for ING Investors Trust, ING 
Partners, Inc., or ING Variable Products Trust will value the 
securities held by the Substitute Fund. The foregoing notwithstanding, 
the applicable Board of ING Investors Trust, ING Partners, Inc., and 
ING Variable Products Trust will retain ultimate responsibility for 
valuation decisions.
    R. The Applicants believe that the use of neutral, third party 
vendor prices will ensure that both portfolios utilize unbiased 
evaluations in determining respective security and, ultimately, 
portfolio market values. In the event that independent pricing services 
do not provide valuations for a specific security selected for 
transfer, the Substitute Fund's investment adviser and the 
corresponding Replaced Fund's investment adviser, in accordance with 
paragraph (b)(4) of Rule 17a-7 under the 1940 Act, will rely on the 
``average of the highest current independent bid and lowest current 
independent offer determined on the basis of reasonable inquiry * * *'' 
in valuing any such security.
    S. The Substitutions are consistent with the general purposes of 
the 1940 Act, as enunciated in the Findings and Declaration of Policy 
in Section 1 of the 1940 Act. The proposed transactions do not present 
any of the issues or abuses that the 1940 Act is designed to prevent. 
Moreover, the proposed transactions will be effected in a manner 
consistent with the public interest and the protection of investors, as 
required by Section 6(c) of the 1940 Act. Contract owners will be fully 
informed of the terms of the Substitutions through the supplements and 
the Post-Substitution Confirmation and will have an opportunity to 
withdraw from the Replaced Fund through reallocation to another 
subaccount or otherwise terminate their interest thereof in accordance 
with the terms and conditions of their Contract prior to the Effective 
Date.

VI. Applicant's Conditions

    For purposes of the approval sought pursuant to Section 26(c) of 
the 1940 Act, the substitutions described in the application will not 
be completed unless all of the following conditions are met:
    A. The Commission shall have issued an order: (1) Approving the 
Substitutions under Section 26(c) of the 1940 Act; and (2) exempting 
the in-kind redemptions from the provisions of Section 17(a) of the 
1940 Act as necessary to carry out the transactions described in this 
Application.
    B. A registration statement for each Substitute Fund is effective 
and the investment objectives and policies and fees and expenses for 
each of the Substitute Funds as described herein have been implemented.
    C. The permanent 0.25% cap on the Shareholder Services Fee that is 
included in the ``Other Expenses'' of the Class S shares of certain ING 
Investors Trust Substitute Funds as described herein has been 
implemented.
    D. Each Affected Contract Owner will have been sent a copy of: (1) 
A supplement to the Contract prospectus informing shareholders of this 
Application; (2) a prospectus for the appropriate Substitute Fund; and 
(3) a second supplement to the Contract prospectus setting forth the 
Effective Date and advising Affected Contract Owners of their right to 
reconsider the Substitutions and, if they so choose, any time prior to 
the Effective Date, and to reallocate or withdraw amounts under their 
affected Contract or otherwise terminate their interest therein in 
accordance with the terms and conditions of their Contract.
    E. The Companies shall have satisfied themselves, that: (1) The 
Contracts allow the substitution of investment company shares in the 
manner contemplated by the Substitutions and related transactions 
described herein; (2) the transactions can be consummated as described 
in this Application under applicable insurance laws; and (3) that any 
regulatory requirements in each jurisdiction where the Contracts are 
qualified for sale, have been complied with to the extent necessary to 
complete the transactions.
    F. Within five business days of the Effective Date of the 
Substitutions, the Applicants will send to Affected Contract Owners a 
Post-Substitution Confirmation.

VII. Conclusion

    Applicants assert that for the reasons summarized above the 
proposed substitutions and related transactions

[[Page 46224]]

meet the standards of Section 26(c) of the 1940 Act and are consistent 
with the standards of Section 17(b) of the 1940 Act and that the 
requested orders should be granted.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 05-15574 Filed 8-8-05; 8:45 am]
BILLING CODE 8010-01-P