81_FR_90634 81 FR 90394 - Hartford Life Insurance Company, et al; Notice of Application

81 FR 90394 - Hartford Life Insurance Company, et al; Notice of Application

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 240 (December 14, 2016)

Page Range90394-90398
FR Document2016-29934

Federal Register, Volume 81 Issue 240 (Wednesday, December 14, 2016) 
[Federal Register Volume 81, Number 240 (Wednesday, December 14, 2016)]
[Notices]
[Pages 90394-90398]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-29934]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-32386; File No. 812-14447]


Hartford Life Insurance Company, et al; Notice of Application

December 8, 2016.
AGENCY: Securities and Exchange Commission (``Commission'').

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

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Applicants: Hartford Life Insurance Company (``Hartford Life''), 
Hartford Life and Annuity Insurance Company (``Hartford Life and 
Annuity,'' and together with Hartford Life, the ``Hartford Life 
Insurance Companies''); their respective separate accounts, Hartford 
Life Insurance Company Separate Account Three (``HL Separate Account 
3''), Hartford Life and Annuity Insurance Company Separate Account 
Three (``HLA Separate Account 3''), Hartford Life Insurance Company 
Separate Account Seven (``HL Separate Account 7''), Hartford Life and 
Annuity Insurance Company Separate Account Seven (``HLA Separate 
Account 7'') (collectively, the ``Separate Accounts,'' and together 
with the Hartford Insurance Companies, the ``Section 26 Applicants''); 
HIMCO Variable Insurance Trust (the ``Trust''), Hartford Investment 
Management Company (``HIMCO,'' and collectively with the Section 26 
Applicants and the Trust, the ``Section 17 Applicants'').

Summary of Application: The Applicants seek an order pursuant to 
section 26(c) of the Act, approving the substitution of shares of 
twenty-seven (27) investment portfolios of registered investment 
companies (the ``Existing Portfolios'') with shares of six (6) 
investment portfolios of the Trust (the ``Replacement Portfolios''), 
under certain variable annuity contracts (the ``Contracts''), each 
funded through the Separate Accounts (the ``Substitutions''). In 
addition, the Section 17 Applicants also seek an order pursuant to 
section 17(b) of the Act exempting them from section 17(a) of the Act 
to the extent necessary to permit them to engage in certain in-kind 
transactions (the ``In-Kind Transactions'') in connection with the 
Substitutions.

DATES: Filing Date: The application was filed on April 21, 2015, and 
amended on May 25, 2016 and August 31, 2016.

Hearing or Notification of Hearing: An order granting the requested 
relief will be issued unless the Commission orders a hearing. 
Interested persons may request a hearing by writing to the Commission's 
Secretary 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 January 3, 2017, and should be accompanied by proof of 
service on applicants, in the form of an affidavit, or for lawyers, a 
certificate of service. Pursuant to rule 0-5 under the Act, hearing 
requests should state the nature of the writer's interest, any facts 
bearing upon the desirability of a hearing on the matter, 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 
Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F 
Street NE., Washington, DC 20549-1090. Applicants: Hartford Life 
Insurance Company, Attn: Lisa Proch, Vice President, Assistant General 
Counsel, P.O. Box 2999, Hartford, CT 06104-2999.

FOR FURTHER INFORMATION CONTACT: Jessica Shin, Attorney-Adviser at 
(202) 551-5921 or David J. Marcinkus, Branch Chief, at (202) 551-6821 
(Chief Counsel's Office, Division of Investment Management).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained via the 
Commission's Web site by searching for the file number, or for an 
applicant using the Company name box, at http://www.sec.gov/search/search.htm, or by calling (202) 551-8090.
Applicants' Representations
    1. Hartford Life is a stock life insurance company incorporated 
under the laws of the state of Connecticut. Hartford Life was engaged 
in the business of writing individual and group life insurance and 
annuity contracts until April 30, 2013, and remains authorized to do 
business in every state and the District of Columbia. Hartford Life is 
an indirect, wholly-owned subsidiary of The Hartford Financial Services 
Group, Inc. (``The Hartford''), a Delaware corporation whose stock is 
traded on the New York Stock Exchange.
    2. Hartford Life and Annuity is a stock life insurance company 
incorporated under the laws of the state of Connecticut. Hartford Life 
and Annuity was engaged in the business of writing individual and group 
life insurance and annuity contracts until April 30, 2013, and remains 
authorized to do business in every state (except New York), the 
District of Columbia and Puerto Rico. Hartford Life and Annuity is an 
indirect wholly-owned subsidiary of The Hartford.
    3. Hartford Life established HL Separate Account 3 and HL Separate 
Account 7 as segregated asset accounts under Connecticut law on June 
22, 1994 and December 8, 1986, respectively. Hartford Life and Annuity 
established HLA Separate Account 3 and HLA Separate Account 7 as 
segregated asset accounts under Connecticut law on June 22, 1994 and 
April 1, 1999, respectively. Each of the Separate Accounts meets the 
definition of ``separate account,'' as defined in Section 2(a)(37) of 
the Act. The Separate Accounts are registered with the Commission under 
the Act as unit investment trusts. The assets of the Separate Accounts 
support the Contracts and interests in the Separate Accounts offered 
through such Contracts. The Separate Accounts are segmented into 
subaccounts, and certain of these subaccounts invest in the Existing 
Portfolios. The Contracts are individual and group deferred variable 
annuity contracts, with group participants acquiring certain ownership 
rights as described in the group contract or plan documents. Contract 
owners and participants in group contracts (each, a ``Contract owner,'' 
and collectively, ``Contract owners'') may allocate some or all of 
their Contract value to one or more subaccounts available as investment 
options under their respective Contracts and any rider(s).
    4. By the terms of each Contract (and as set forth in the 
prospectuses for the Contracts), the Hartford Insurance Companies 
reserve the right to substitute shares of another registered investment 
company for the shares of any registered investment company already 
purchased or to be purchased in the future by the Separate Accounts.
    5. The Trust is a Delaware statutory trust that was established on 
January 13, 2012. The Trust is registered with the

[[Page 90395]]

Commission as an open-end management investment company under the Act 
and its shares are registered under the Securities Act of 1933. The 
Trust is a series investment company and currently has twenty-four (24) 
separate portfolios (each a ``HIMCO VIT Fund,'' and collectively, the 
``HIMCO VIT Funds''). Six (6) HIMCO VIT Funds comprise the Replacement 
Portfolios.
    6. HIMCO, a Delaware corporation and a registered investment 
adviser, serves as investment adviser to each of the HIMCO VIT Funds 
pursuant to an investment advisory agreement between the Trust, on 
behalf of each HIMCO VIT Fund, and HIMCO. In addition, the Trust has 
obtained an exemptive order from the Commission (File No. 812-11684) 
(the ``Manager of Managers Order''). The Replacement Portfolios may 
rely on the the Manager of Managers Order, and the Trust's registration 
statement discloses and explains the existence, substance and effect of 
the Manager of Managers Order.\1\
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    \1\ HIMCO has agreed, as a condition of the application, that it 
will not change a sub-adviser, add a new sub-adviser, or otherwise 
rely on the Manager of Managers Order or any replacement order from 
the Commission with respect to any Replacement Portfolio without 
first obtaining shareholder approval of the change in sub-adviser, 
the new sub-adviser, or the Replacement Portfolio's ability to add 
or to replace a sub-adviser in reliance on the Manager of Managers 
Order or any replacement order from the Commission at a shareholder 
meeting, the record date for which shall be after the proposed 
Substitution has been effected.
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    7. The Section 26 Applicants propose to substitute shares of the 
Existing Portfolios with shares of the corresponding Replacement 
Portfolios, as shown in the table below. As discussed in greater detail 
in the application, the Section 26 Applicants believe that each 
Existing Portfolio has substantially similar investment objectives, 
principal investment strategies, and principal investment risks, and 
has substantially similar risk and return characteristics, as its 
corresponding Replacement Portfolio.

------------------------------------------------------------------------
                                                         Replacement
      Substitution           Existing portfolio       portfolio (Share
                              (Share class(es))            class)
------------------------------------------------------------------------
1.......................  American Funds Growth-    HIMCO VIT Large Cap
                           Income Fund (Class 2).    Core Fund (Class
                                                     IB).
2.......................  Franklin Rising
                           Dividends VIP Fund
                           (Class 2) (Class 4).
3.......................  Invesco V.I. Core Equity
                           Fund (Series I) (Series
                           II).
4.......................  Lord Abbett Calibrated
                           Dividend Growth
                           Portfolio (Class VC).
5.......................  Lord Abbett Fundamental
                           Equity Portfolio (Class
                           VC).
6.......................  Lord Abbett Growth &
                           Income Portfolio (Class
                           VC).
7.......................  MFS Investors Trust
                           Series (Initial Class)
                           (Service Class).
8.......................  Oppenheimer Main Street
                           Fund/VA (Service
                           Shares).
9.......................  Pioneer Fund VCT
                           Portfolio (Class II).
10......................  AB VPS Value Portfolio    HIMCO VIT Large Cap
                           (Class B).                Value Fund (Class
                                                     IB).
11......................  American Century VP
                           Value Fund (Class II).
12......................  American Funds Blue Chip
                           Income and Growth Fund
                           (Class 2).
13......................  Fidelity VIP Equity-
                           Income Portfolio
                           (Service Class 2).
14......................  Franklin Mutual Shares
                           VIP Fund (Class 2)
                           (Class 4).
15......................  Invesco V.I. Comstock
                           Fund (Series II).
16......................  Invesco V.I. Diversified
                           Dividend Fund (Series
                           II).
17......................  Invesco V.I. Growth and
                           Income Fund (Series II).
18......................  Invesco V.I. Value
                           Opportunities Fund
                           (Series I).
19......................  MFS Value Series
                           (Initial Class)
                           (Service Class).
20......................  American Funds            HIMCO VIT
                           International Fund        International Core
                           (Class 2).                Equity Fund (Class
                                                     IB).
21......................  MFS Research
                           International Portfolio
                           (Initial Class).
22......................  AB VPS International      HIMCO VIT
                           Value Portfolio (Class    International Value
                           B).                       Equity Fund (Class
                                                     IB).
23......................  Templeton Foreign VIP
                           Fund (Class 2) (Class
                           4).
24......................  American Funds Bond Fund  HIMCO VIT Total
                           (Class 2).                Return Bond Fund
                                                     (Class IB).
25......................  MFS Total Return Bond
                           Series (Initial Class)
                           (Service Class).
26......................  Fidelity VIP Strategic    HIMCO VIT Strategic
                           Income Portfolio          Income Bond Fund
                           (Service Class 2).        (Class IB).
27......................  Franklin Strategic
                           Income VIP Fund (Class
                           1) (Class 2) (Class 4).
------------------------------------------------------------------------

    8. The Hartford Insurance Companies state that the proposed 
Substitutions are intended to improve the administrative efficiency and 
cost-effectiveness of the Contracts, as well as to make the Contracts 
more attractive to existing Contract owners. Applicants state that by 
eliminating overlapping investment options that duplicate one another 
by having substantially similar investment objectives, strategies and 
risks, the Hartford Insurance Companies can present a more streamlined 
menu of investment options under the Contracts. Applicants further 
state that since the proposed Substitutions were designed to reduce 
investment-option redundancy, the diversity of available investment 
styles under the Contracts will not be adversely impacted. Additional 
information for each Existing Portfolio and the corresponding 
Replacement Portfolio, including investment objectives, principal 
investment strategies, principal risks, and fees can be found in the 
application.
    9. Applicants state that through the proposed Substitutions, the 
Hartford Insurance Companies seek to replace certain investment options 
in the Contracts' current fund lineups with investment options that 
will provide Contract owners with lower expenses, while maintaining a 
high-quality menu of investment options. In this regard, the Section 26 
Applicants believe that Contract owners with Contract value allocated 
to the subaccounts of the Existing Portfolios will have lower total and 
net annual operating expenses immediately after the proposed 
Substitutions than before the proposed Substitutions. Applicants also 
state that, for each Substitution, the combined management fee and Rule 
12b-1 fee of each Replacement Portfolio is lower than that of the 
corresponding Existing Portfolio. The application sets forth the fees 
and expenses of each Existing Portfolio and its corresponding 
Replacement Portfolio in greater detail.
    10. The Section 26 Applicants also agree that, during a period of 
two (2)

[[Page 90396]]

years following the implementation of the proposed Substitution (the 
``Substitution Date''), and for those Contracts with assets allocated 
to an Existing Portfolio on the Substitution Date, the Hartford 
Insurance Companies will reimburse, on the last business day of each 
fiscal quarter, the owners of those Contracts invested in the 
applicable Replacement Portfolio to the extent that the Replacement 
Portfolio's total net annual operating expenses (taking into account 
fee waivers and expense reimbursements) for such period exceeds, on an 
annualized basis, the total net annual operating expenses of the 
Existing Portfolio for fiscal year 2015. In addition, the Hartford 
Insurance Companies will not increase the Contract fees and charges 
that would otherwise be assessed under the terms of those Contracts for 
a period of at least two (2) years following the Substitution Date.
    11. Applicants state that the Hartford Insurance Companies or their 
affiliates will pay all expenses and transaction costs of the proposed 
Substitutions, including legal and accounting expenses, any applicable 
brokerage expenses and other fees and expenses. Applicants state that 
no fees or charges will be assessed to the affected Contract owners to 
effect the proposed Substitutions. Applicants state that the proposed 
Substitutions will not cause the Contract fees and charges currently 
being paid by existing Contract owners to be greater after the 
Substitutions than before the Substitutions.
    12. Applicants state that the Contract value of each Contract owner 
affected by the proposed Substitutions will not change as a result of 
the proposed Substitutions. Applicants state that, because the 
Substitutions will occur at relative net asset value, and the fees and 
charges under the Contracts will not change as a result of the 
Substitutions, the benefits offered by the guarantees under the 
Contracts will be the same immediately before and after the 
Substitutions. Applicants further state that what effect the 
Substitutions may have on the value of the benefits offered by the 
Contract guarantees would depend, among other things, on the relative 
future performance of each Existing Portfolio and Replacement 
Portfolio, which the Section 26 Applicants cannot predict. 
Nevertheless, the Section 26 Applicants note that at the time of the 
Substitutions, the Contracts will offer a comparable variety of 
investment options with as broad a range of risk/return 
characteristics.
    13. At least 30 days prior to the Substitution Date, Contract 
owners will be notified via prospectus supplements, which will be filed 
with the Commission pursuant to Rule 497 under the Securities Act of 
1933, that the Section 26 Applicants received or expect to receive 
Commission approval of the applicable proposed Substitutions and of the 
anticipated Substitution Date (the ``Pre-Substitution Notice''). The 
Pre-Substitution Notice will advise Contract owners that Contract 
values attributable to investments in the Existing Portfolios will be 
transferred to the Replacement Portfolios, without any charge that 
would otherwise apply and without being subject to any limitations on 
transfers, on the Substitution Date. The Pre-Substitution Notice also 
will state that, from the date of the Pre-Substitution Notice through 
the date thirty (30) days after the Substitutions, Contract owners may 
transfer Contract value from the subaccounts investing in the Existing 
Portfolios (before the Substitutions) or the Replacement Portfolios 
(after the Substitutions) to any other available investment option 
without charge and without imposing any transfer limitations.
    14. The Section 26 Applicants will also deliver to affected 
Contract owners, at least thirty (30) days before the Substitution 
Date, a prospectus for each applicable Replacement Portfolio. In 
addition, within five (5) business days after the Substitution Date, 
Contract owners whose assets are allocated to a Replacement Portfolio 
as part of the proposed Substitutions will be sent a written notice 
(each, a ``Confirmation'') informing them that the Substitutions were 
carried out as previously notified. The Confirmation will also restate 
the information set forth in the Pre-Substitution Notice. The 
Confirmation will also reflect the Contract owners Contract values 
before and after the Substitution(s).
    15. Each Substitution will be effected at the relative net asset 
values of the respective shares of the Replacement Portfolios in 
conformity with Section 22(c) of the 1940 Act and Rule 22c-1 thereunder 
without the imposition of any transfer or similar charges by the 
Section 26 Applicants. The Substitutions will be effected without 
change in the amount or value of any Contracts held by affected 
Contract owners. As such, the Section 26 Applicants believe that the 
procedures to be implemented are sufficient to assure that each 
Contract owner's cash values immediately after the Substitution will be 
equal to the cash value immediately before the Substitution. As of the 
Substitution Date, the Separate Accounts will redeem shares of the 
Existing Portfolios for cash or in- kind. The proceeds of such 
redemptions will then be used to purchase shares of the corresponding 
Replacement Portfolio, as each subaccount of the Separate Accounts will 
invest the proceeds of its redemption from the Existing Portfolios in 
the applicable Replacement Portfolios.
Legal Analysis
    1. The Section 26 Applicants request that the Commission issue an 
order pursuant to section 26(c) of the Act approving the proposed 
Substitutions. Section 26(c) of the Act prohibits any depositor or 
trustee of a unit investment trust holding the security of a single 
issuer from substituting another security of another issuer without the 
approval of the Commission. Section 26(c) provides that such approval 
shall be granted by order of the Commission ``if the evidence 
establishes that [the substitution] is consistent with the protection 
of investors and the purposes fairly intended by the policy and 
provisions of [the Act].''
    2. The Section 26 Applicants submit that each of the Substitutions 
meet the standards set forth in section 26(c) and that, if implemented, 
the Substitutions would not raise any of the concerns underlying this 
provision. The Section 26 Applicants believe that each Replacement 
Portfolio and its corresponding Existing Portfolio(s) have 
substantially similar investment objectives, principal investment 
strategies and principal risks. Applicants state that, accordingly, no 
Contract owner will involuntarily lose his or her rider(s) as a result 
of any proposed Substitution. Contract owners will not incur any fees 
or charges as a result of the proposed Substitutions.
    3. The Section 17 Applicants request that the Commission issue an 
order pursuant to section 17(b) of the Act exempting them from section 
17(a) of the Act to the extent necessary to permit them to carry out, 
as part of the Substitutions, the In-Kind Transactions. Section 
17(a)(1) of the Act prohibits any affiliated person of a registered 
investment company, or any affiliated person of such person, acting as 
principal, from selling any security or other property to such 
registered investment company. Section 17(a)(2) of the Act prohibits 
any of the persons described above, acting as principals, from 
purchasing any security or other property from such registered 
investment company.
    4. Because the proposed Substitutions may be effected, in whole or 
in part, by means of in-kind redemptions and purchases, the proposed 
Substitutions

[[Page 90397]]

may be deemed to involve one or more purchases or sales of securities 
or property between affiliated persons. The proposed transactions may 
involve a transfer of portfolio securities by the Existing Portfolios 
to the Separate Accounts. Immediately thereafter, the Separate Accounts 
would purchase shares of the Replacement Portfolios with the portfolio 
securities received from the Existing Portfolios. Accordingly, to the 
extent the Separate Accounts and the Existing Portfolios, and the 
Separate Accounts and the Replacement Portfolios, are deemed to be 
affiliated persons of one another under Section 2(a)(3) of the Act, it 
is conceivable that this aspect of the proposed Substitutions could be 
viewed as being prohibited by Section 17(a). As such, the Section 17 
Applicants have determined that it is prudent to seek relief from 
Section 17(a) in the context of this application.
    5. The Section 17 Applicants maintain that the terms of the 
proposed In-Kind Transactions, including the consideration to be paid 
by each Existing Portfolio and received by each Replacement Portfolio 
involved, are reasonable, fair and do not involve overreaching, 
principally because the transactions will conform with all but one of 
the conditions enumerated in Rule 17a-7. The In-Kind Transactions will 
take place at relative net asset value in conformity with the 
requirements of Section 22(c) of the Act and Rule 22c-1 thereunder 
without the imposition of any transfer or similar charges by the 
Section 26 Applicants. The Substitutions will be effected without 
change in the amount or value of any Contract held by the affected 
Contract owners. The Substitutions will in no way alter the tax 
treatment of affected Contract owners in connection with their 
Contracts, and no tax liability will arise for Contract owners as a 
result of the Substitutions. The fees and charges under the Contracts 
will not increase because of the Substitutions. Even though the 
Separate Accounts, the Hartford Insurance Companies and the Trust may 
not rely on Rule 17a-7, the Section 17 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.
    6. The Section 17 Applicants submit that the proposed in-kind 
purchases by the Separate Accounts are consistent with the policies of 
the Trust and the Replacement Portfolios, as recited in the Trust's 
current registration statement and reports filed under the Act. 
Finally, the Section 17 Applicants submit that the proposed 
Substitutions are consistent with the general purposes of the Act.
Applicants' Conditions
    The Section 26 Applicants, and HIMCO as applicable, agree that any 
order granting the requested relief will be subject to the following 
conditions.
    1. The Substitutions will not be effected unless the Section 26 
Applicants determine that: (i) The Contracts allow the substitution of 
shares of registered open-end investment companies in the manner 
contemplated by this application; (ii) the Substitutions can be 
consummated as described in this application under applicable insurance 
laws; and (iii) any regulatory requirements in each jurisdiction where 
the Contracts are qualified for sale have been complied with to the 
extent necessary to complete the Substitutions.
    2. The Hartford Insurance Companies will seek approval of the 
proposed Substitutions from any state insurance regulators whose 
approval may be necessary or appropriate.
    3. HIMCO will not change a sub-adviser, add a new sub-adviser, or 
otherwise rely on the Manager of Managers Order or any replacement 
order from the Commission with respect to any Replacement Portfolio 
without first obtaining shareholder approval of the change in sub-
adviser, the new sub-adviser, or the Replacement Portfolio's ability to 
add or to replace a sub-adviser at a shareholder meeting, the record 
date for which shall be after the proposed Substitution has been 
effected.
    4. The Hartford Insurance 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. No fees or charges will be assessed to the 
affected Contract owners to effect the Substitutions. The proposed 
Substitutions will not cause the Contract fees and charges currently 
being paid by Contract owners to be greater after the proposed 
Substitution than before the proposed Substitution.
    5. The Substitutions will be effected at the relative net asset 
values of the respective shares of the Replacement Portfolios in 
conformity with Section 22(c) of the 1940 Act and Rule 22c-1 thereunder 
without the imposition of any transfer or similar charges by the 
Section 26 Applicants. The Substitutions will be effected without 
change in the amount or value of any Contracts held by affected 
Contract owners.
    6. The Substitutions will in no way alter the tax treatment of 
affected Contract owners in connection with their Contracts, and no tax 
liability will arise for Contract owners as a result of the 
Substitutions.
    7. The obligations of the Section 26 Applicants, and the rights of 
the affected Contract owners, under the Contracts of affected Contract 
owners will not be altered in any way.
    8. Affected Contract owners will be permitted to transfer Contract 
value from the subaccount investing in the Existing Portfolio (before 
Substitution Date) or the Replacement Portfolio (after the Substitution 
Date) to any other available investment option under the Contract 
without charge for a period beginning at least 30 days before the 
Substitution Date through at least 30 days following the Substitution 
Date. Contract owners with guaranteed living and/or death benefit 
riders, as applicable, may transfer Contract value from the subaccounts 
investing in the Existing Portfolios (before the Substitutions) or the 
Replacement Portfolios (after the Substitutions) to any other available 
investment option available under their respective riders without 
charge and without imposing any transfer limitations. Except as 
described in any market timing/short-term trading provisions of the 
relevant prospectus, the Section 26 Applicants will not exercise any 
rights reserved under the Contracts to impose restrictions on transfers 
between the subaccounts under the Contracts, including limitations on 
the future number of transfers, for a period beginning at least 30 days 
before the Substitution Date through at least 30 days following the 
Substitution Date.
    9. All affected Contract owners will be notified, at least 30 days 
before the Substitution Date about: (a) The intended Substitution of 
Existing Portfolios with the Replacement Portfolios; (b) the intended 
Substitution Date; and (c) information with respect to transfers as set 
forth in Condition 8 above. In addition, the Section 26 Applicants will 
also deliver to affected Contract owners, at least thirty (30) days 
before the Substitution Date, a prospectus for each applicable 
Replacement Portfolio.
    10. The Section 26 Applicants will deliver to each affected 
Contract owner within five (5) business days of the Substitution Date a 
written confirmation which will include: (a) A confirmation that the 
Substitutions were carried out as previously notified; (b) a 
restatement of the information set forth in the Pre-

[[Page 90398]]

Substitution Notice; and (c) values of the Contract owner's positions 
in the Existing Portfolio before the Substitution and the Replacement 
Portfolio after the Substitution.
    11. For a period of two years following the Substitution Date, for 
those Contracts with assets allocated to the Existing Portfolio on the 
Substitution Date, the Hartford Insurance Companies will reimburse, on 
the last business day of each fiscal quarter, the Contract owners whose 
subaccounts invest in the applicable Replacement Portfolio to the 
extent that the Replacement Portfolio's net annual operating expenses 
(taking into account fee waivers and expense reimbursements) for such 
period exceeds, on an annualized basis, the net annual operating 
expenses of the Existing Portfolio for fiscal year 2015. In addition, 
the Section 26 Applicants will not increase the Contract fees and 
charges that would otherwise be assessed under the terms of the 
Contracts for a period of at least two years following the Substitution 
Date.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
 Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-29934 Filed 12-13-16; 8:45 am]
BILLING CODE 8011-01-P

90394 Federal Register / Vol. 81, No. 240 / Wednesday, December 14, 2016 / Notices NYSEArca–2016–158 and should be Separate Accounts (the remains authorized to do business in submitted on or before January 4, 2017. ‘‘Substitutions’’). In addition, the every state and the District of Columbia. For the Commission, by the Division of Section 17 Applicants also seek an order Hartford Life is an indirect, wholly- Trading and Markets, pursuant to delegated pursuant to section 17(b) of the Act owned subsidiary of The Hartford authority.13 exempting them from section 17(a) of Financial Services Group, Inc. (‘‘The Eduardo A. Aleman, the Act to the extent necessary to permit Hartford’’), a Delaware corporation Assistant Secretary. them to engage in certain in-kind whose stock is traded on the New York [FR Doc. 2016–29938 Filed 12–13–16; 8:45 am] transactions (the ‘‘In-Kind Stock Exchange. Transactions’’) in connection with the 2. Hartford Life and Annuity is a stock BILLING CODE 8011–01–P Substitutions. life insurance company incorporated under the laws of the state of DATES: Filing Date: The application was Connecticut. Hartford Life and Annuity SECURITIES AND EXCHANGE filed on April 21, 2015, and amended on was engaged in the business of writing COMMISSION May 25, 2016 and August 31, 2016. individual and group life insurance and [Release No. IC–32386; File No. 812–14447] HEARING OR NOTIFICATION OF HEARING: An annuity contracts until April 30, 2013, order granting the requested relief will and remains authorized to do business Hartford Life Insurance Company, et be issued unless the Commission orders in every state (except New York), the al; Notice of Application a hearing. Interested persons may District of Columbia and Puerto Rico. request a hearing by writing to the Hartford Life and Annuity is an indirect December 8, 2016. Commission’s Secretary and serving wholly-owned subsidiary of The AGENCY: Securities and Exchange applicants with a copy of the request, Commission (‘‘Commission’’). Hartford. personally or by mail. Hearing requests 3. Hartford Life established HL ACTION: Notice of application for an should be received by the Commission Separate Account 3 and HL Separate order approving the substitution of by 5:30 p.m. on January 3, 2017, and Account 7 as segregated asset accounts certain securities pursuant to section should be accompanied by proof of under Connecticut law on June 22, 1994 26(c) of the Investment Company Act of service on applicants, in the form of an and December 8, 1986, respectively. 1940, as amended (‘‘Act’’) and an order affidavit, or for lawyers, a certificate of Hartford Life and Annuity established of exemption pursuant to section 17(b) service. Pursuant to rule 0–5 under the HLA Separate Account 3 and HLA of the Act from section 17(a) of the Act. Act, hearing requests should state the Separate Account 7 as segregated asset nature of the writer’s interest, any facts accounts under Connecticut law on June APPLICANTS: Hartford Life Insurance bearing upon the desirability of a 22, 1994 and April 1, 1999, respectively. Company (‘‘Hartford Life’’), Hartford hearing on the matter, the reason for the Each of the Separate Accounts meets the Life and Annuity Insurance Company request, and the issues contested. definition of ‘‘separate account,’’ as (‘‘Hartford Life and Annuity,’’ and Persons who wish to be notified of a defined in Section 2(a)(37) of the Act. together with Hartford Life, the hearing may request notification by The Separate Accounts are registered ‘‘Hartford Life Insurance Companies’’); writing to the Commission’s Secretary. with the Commission under the Act as their respective separate accounts, unit investment trusts. The assets of the ADDRESSES: Secretary, U.S. Securities Hartford Life Insurance Company Separate Accounts support the Separate Account Three (‘‘HL Separate and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. Contracts and interests in the Separate Account 3’’), Hartford Life and Annuity Accounts offered through such Insurance Company Separate Account Applicants: Hartford Life Insurance Company, Attn: Lisa Proch, Vice Contracts. The Separate Accounts are Three (‘‘HLA Separate Account 3’’), segmented into subaccounts, and certain Hartford Life Insurance Company President, Assistant General Counsel, P.O. Box 2999, Hartford, CT 06104– of these subaccounts invest in the Separate Account Seven (‘‘HL Separate Existing Portfolios. The Contracts are Account 7’’), Hartford Life and Annuity 2999. individual and group deferred variable Insurance Company Separate Account FOR FURTHER INFORMATION CONTACT: annuity contracts, with group Seven (‘‘HLA Separate Account 7’’) Jessica Shin, Attorney-Adviser at (202) participants acquiring certain (collectively, the ‘‘Separate Accounts,’’ 551–5921 or David J. Marcinkus, Branch ownership rights as described in the and together with the Hartford Chief, at (202) 551–6821 (Chief group contract or plan documents. Insurance Companies, the ‘‘Section 26 Counsel’s Office, Division of Investment Contract owners and participants in Applicants’’); HIMCO Variable Management). group contracts (each, a ‘‘Contract Insurance Trust (the ‘‘Trust’’), Hartford SUPPLEMENTARY INFORMATION: The owner,’’ and collectively, ‘‘Contract Investment Management Company following is a summary of the owners’’) may allocate some or all of (‘‘HIMCO,’’ and collectively with the application. The complete application their Contract value to one or more Section 26 Applicants and the Trust, the may be obtained via the Commission’s subaccounts available as investment ‘‘Section 17 Applicants’’). Web site by searching for the file options under their respective Contracts SUMMARY OF APPLICATION: The number, or for an applicant using the and any rider(s). Applicants seek an order pursuant to Company name box, at http:// 4. By the terms of each Contract (and section 26(c) of the Act, approving the www.sec.gov/search/search.htm, or by as set forth in the prospectuses for the substitution of shares of twenty-seven calling (202) 551–8090. Contracts), the Hartford Insurance (27) investment portfolios of registered Companies reserve the right to Applicants’ Representations sradovich on DSK3GMQ082PROD with NOTICES investment companies (the ‘‘Existing substitute shares of another registered Portfolios’’) with shares of six (6) 1. Hartford Life is a stock life investment company for the shares of investment portfolios of the Trust (the insurance company incorporated under any registered investment company ‘‘Replacement Portfolios’’), under the laws of the state of Connecticut. already purchased or to be purchased in certain variable annuity contracts (the Hartford Life was engaged in the the future by the Separate Accounts. ‘‘Contracts’’), each funded through the business of writing individual and 5. The Trust is a Delaware statutory group life insurance and annuity trust that was established on January 13, 13 17 CFR 200.30–3(a)(12). contracts until April 30, 2013, and 2012. The Trust is registered with the VerDate Sep<11>2014 18:45 Dec 13, 2016 Jkt 241001 PO 00000 Frm 00077 Fmt 4703 Sfmt 4703 E:\FR\FM\14DEN1.SGM 14DEN1

Federal Register / Vol. 81, No. 240 / Wednesday, December 14, 2016 / Notices 90395 Commission as an open-end the HIMCO VIT Funds pursuant to an 7. The Section 26 Applicants propose management investment company investment advisory agreement between to substitute shares of the Existing under the Act and its shares are the Trust, on behalf of each HIMCO VIT Portfolios with shares of the registered under the Securities Act of Fund, and HIMCO. In addition, the corresponding Replacement Portfolios, 1933. The Trust is a series investment Trust has obtained an exemptive order as shown in the table below. As company and currently has twenty-four from the Commission (File No. 812– discussed in greater detail in the (24) separate portfolios (each a ‘‘HIMCO 11684) (the ‘‘Manager of Managers application, the Section 26 Applicants VIT Fund,’’ and collectively, the Order’’). The Replacement Portfolios believe that each Existing Portfolio has ‘‘HIMCO VIT Funds’’). Six (6) HIMCO may rely on the the Manager of substantially similar investment VIT Funds comprise the Replacement Managers Order, and the Trust’s objectives, principal investment Portfolios. registration statement discloses and strategies, and principal investment 6. HIMCO, a Delaware corporation explains the existence, substance and risks, and has substantially similar risk and a registered investment adviser, effect of the Manager of Managers and return characteristics, as its serves as investment adviser to each of Order.1 corresponding Replacement Portfolio. Existing portfolio Replacement portfolio Substitution (Share class(es)) (Share class) 1 ........................ American Funds Growth-Income Fund (Class 2) ................................ HIMCO VIT Large Cap Core Fund (Class IB). 2 ........................ Franklin Rising Dividends VIP Fund (Class 2) (Class 4). 3 ........................ Invesco V.I. Core Equity Fund (Series I) (Series II). 4 ........................ Lord Abbett Calibrated Dividend Growth Portfolio (Class VC). 5 ........................ Lord Abbett Fundamental Equity Portfolio (Class VC). 6 ........................ Lord Abbett Growth & Income Portfolio (Class VC). 7 ........................ MFS Investors Trust Series (Initial Class) (Service Class). 8 ........................ Oppenheimer Main Street Fund/VA (Service Shares). 9 ........................ Pioneer Fund VCT Portfolio (Class II). 10 ...................... AB VPS Value Portfolio (Class B) ....................................................... HIMCO VIT Large Cap Value Fund (Class IB). 11 ...................... American Century VP Value Fund (Class II). 12 ...................... American Funds Blue Chip Income and Growth Fund (Class 2). 13 ...................... Fidelity VIP Equity-Income Portfolio (Service Class 2). 14 ...................... Franklin Mutual Shares VIP Fund (Class 2) (Class 4). 15 ...................... Invesco V.I. Comstock Fund (Series II). 16 ...................... Invesco V.I. Diversified Dividend Fund (Series II). 17 ...................... Invesco V.I. Growth and Income Fund (Series II). 18 ...................... Invesco V.I. Value Opportunities Fund (Series I). 19 ...................... MFS Value Series (Initial Class) (Service Class). 20 ...................... American Funds International Fund (Class 2) ..................................... HIMCO VIT International Core Equity Fund (Class IB). 21 ...................... MFS Research International Portfolio (Initial Class). 22 ...................... AB VPS International Value Portfolio (Class B) .................................. HIMCO VIT International Value Equity Fund (Class IB). 23 ...................... Templeton Foreign VIP Fund (Class 2) (Class 4). 24 ...................... American Funds Bond Fund (Class 2) ................................................ HIMCO VIT Total Return Bond Fund (Class IB). 25 ...................... MFS Total Return Bond Series (Initial Class) (Service Class). 26 ...................... Fidelity VIP Strategic Income Portfolio (Service Class 2) ................... HIMCO VIT Strategic Income Bond Fund (Class IB). 27 ...................... Franklin Strategic Income VIP Fund (Class 1) (Class 2) (Class 4). 8. The Hartford Insurance Companies investment styles under the Contracts Section 26 Applicants believe that state that the proposed Substitutions are will not be adversely impacted. Contract owners with Contract value intended to improve the administrative Additional information for each Existing allocated to the subaccounts of the efficiency and cost-effectiveness of the Portfolio and the corresponding Existing Portfolios will have lower total Contracts, as well as to make the Replacement Portfolio, including and net annual operating expenses Contracts more attractive to existing investment objectives, principal immediately after the proposed Contract owners. Applicants state that investment strategies, principal risks, Substitutions than before the proposed by eliminating overlapping investment and fees can be found in the Substitutions. Applicants also state that, options that duplicate one another by application. for each Substitution, the combined having substantially similar investment 9. Applicants state that through the management fee and Rule 12b–1 fee of objectives, strategies and risks, the proposed Substitutions, the Hartford each Replacement Portfolio is lower Hartford Insurance Companies can Insurance Companies seek to replace than that of the corresponding Existing present a more streamlined menu of certain investment options in the Portfolio. The application sets forth the investment options under the Contracts. Contracts’ current fund lineups with fees and expenses of each Existing Applicants further state that since the investment options that will provide Portfolio and its corresponding proposed Substitutions were designed Contract owners with lower expenses, Replacement Portfolio in greater detail. sradovich on DSK3GMQ082PROD with NOTICES to reduce investment-option while maintaining a high-quality menu 10. The Section 26 Applicants also redundancy, the diversity of available of investment options. In this regard, the agree that, during a period of two (2) 1 HIMCO has agreed, as a condition of the Replacement Portfolio without first obtaining replacement order from the Commission at a application, that it will not change a sub-adviser, shareholder approval of the change in sub-adviser, shareholder meeting, the record date for which add a new sub-adviser, or otherwise rely on the the new sub-adviser, or the Replacement Portfolio’s shall be after the proposed Substitution has been Manager of Managers Order or any replacement ability to add or to replace a sub-adviser in reliance effected. order from the Commission with respect to any on the Manager of Managers Order or any VerDate Sep<11>2014 18:45 Dec 13, 2016 Jkt 241001 PO 00000 Frm 00078 Fmt 4703 Sfmt 4703 E:\FR\FM\14DEN1.SGM 14DEN1

90396 Federal Register / Vol. 81, No. 240 / Wednesday, December 14, 2016 / Notices years following the implementation of be notified via prospectus supplements, or in- kind. The proceeds of such the proposed Substitution (the which will be filed with the redemptions will then be used to ‘‘Substitution Date’’), and for those Commission pursuant to Rule 497 under purchase shares of the corresponding Contracts with assets allocated to an the Securities Act of 1933, that the Replacement Portfolio, as each Existing Portfolio on the Substitution Section 26 Applicants received or subaccount of the Separate Accounts Date, the Hartford Insurance Companies expect to receive Commission approval will invest the proceeds of its will reimburse, on the last business day of the applicable proposed Substitutions redemption from the Existing Portfolios of each fiscal quarter, the owners of and of the anticipated Substitution Date in the applicable Replacement those Contracts invested in the (the ‘‘Pre-Substitution Notice’’). The Portfolios. applicable Replacement Portfolio to the Pre-Substitution Notice will advise Legal Analysis extent that the Replacement Portfolio’s Contract owners that Contract values total net annual operating expenses attributable to investments in the 1. The Section 26 Applicants request (taking into account fee waivers and Existing Portfolios will be transferred to that the Commission issue an order expense reimbursements) for such the Replacement Portfolios, without any pursuant to section 26(c) of the Act period exceeds, on an annualized basis, charge that would otherwise apply and approving the proposed Substitutions. the total net annual operating expenses without being subject to any limitations Section 26(c) of the Act prohibits any of the Existing Portfolio for fiscal year on transfers, on the Substitution Date. depositor or trustee of a unit investment 2015. In addition, the Hartford The Pre-Substitution Notice also will trust holding the security of a single Insurance Companies will not increase state that, from the date of the Pre- issuer from substituting another security the Contract fees and charges that would Substitution Notice through the date of another issuer without the approval otherwise be assessed under the terms thirty (30) days after the Substitutions, of the Commission. Section 26(c) of those Contracts for a period of at least Contract owners may transfer Contract provides that such approval shall be two (2) years following the Substitution value from the subaccounts investing in granted by order of the Commission ‘‘if Date. the Existing Portfolios (before the the evidence establishes that [the 11. Applicants state that the Hartford Substitutions) or the Replacement substitution] is consistent with the Insurance Companies or their affiliates Portfolios (after the Substitutions) to any protection of investors and the purposes will pay all expenses and transaction other available investment option fairly intended by the policy and costs of the proposed Substitutions, without charge and without imposing provisions of [the Act].’’ including legal and accounting any transfer limitations. 2. The Section 26 Applicants submit expenses, any applicable brokerage 14. The Section 26 Applicants will that each of the Substitutions meet the expenses and other fees and expenses. also deliver to affected Contract owners, standards set forth in section 26(c) and Applicants state that no fees or charges at least thirty (30) days before the that, if implemented, the Substitutions will be assessed to the affected Contract Substitution Date, a prospectus for each would not raise any of the concerns owners to effect the proposed applicable Replacement Portfolio. In underlying this provision. The Section Substitutions. Applicants state that the addition, within five (5) business days 26 Applicants believe that each proposed Substitutions will not cause after the Substitution Date, Contract Replacement Portfolio and its the Contract fees and charges currently owners whose assets are allocated to a corresponding Existing Portfolio(s) have being paid by existing Contract owners Replacement Portfolio as part of the substantially similar investment to be greater after the Substitutions than proposed Substitutions will be sent a objectives, principal investment before the Substitutions. written notice (each, a ‘‘Confirmation’’) strategies and principal risks. 12. Applicants state that the Contract informing them that the Substitutions Applicants state that, accordingly, no value of each Contract owner affected by were carried out as previously notified. Contract owner will involuntarily lose the proposed Substitutions will not The Confirmation will also restate the his or her rider(s) as a result of any change as a result of the proposed information set forth in the Pre- proposed Substitution. Contract owners Substitutions. Applicants state that, Substitution Notice. The Confirmation will not incur any fees or charges as a because the Substitutions will occur at will also reflect the Contract owners result of the proposed Substitutions. relative net asset value, and the fees and Contract values before and after the 3. The Section 17 Applicants request charges under the Contracts will not Substitution(s). that the Commission issue an order change as a result of the Substitutions, 15. Each Substitution will be effected pursuant to section 17(b) of the Act the benefits offered by the guarantees at the relative net asset values of the exempting them from section 17(a) of under the Contracts will be the same respective shares of the Replacement the Act to the extent necessary to permit immediately before and after the Portfolios in conformity with Section them to carry out, as part of the Substitutions. Applicants further state 22(c) of the 1940 Act and Rule 22c–1 Substitutions, the In-Kind Transactions. that what effect the Substitutions may thereunder without the imposition of Section 17(a)(1) of the Act prohibits any have on the value of the benefits offered any transfer or similar charges by the affiliated person of a registered by the Contract guarantees would Section 26 Applicants. The investment company, or any affiliated depend, among other things, on the Substitutions will be effected without person of such person, acting as relative future performance of each change in the amount or value of any principal, from selling any security or Existing Portfolio and Replacement Contracts held by affected Contract other property to such registered Portfolio, which the Section 26 owners. As such, the Section 26 investment company. Section 17(a)(2) of Applicants cannot predict. Applicants believe that the procedures the Act prohibits any of the persons sradovich on DSK3GMQ082PROD with NOTICES Nevertheless, the Section 26 Applicants to be implemented are sufficient to described above, acting as principals, note that at the time of the assure that each Contract owner’s cash from purchasing any security or other Substitutions, the Contracts will offer a values immediately after the property from such registered comparable variety of investment Substitution will be equal to the cash investment company. options with as broad a range of risk/ value immediately before the 4. Because the proposed Substitutions return characteristics. Substitution. As of the Substitution may be effected, in whole or in part, by 13. At least 30 days prior to the Date, the Separate Accounts will redeem means of in-kind redemptions and Substitution Date, Contract owners will shares of the Existing Portfolios for cash purchases, the proposed Substitutions VerDate Sep<11>2014 18:45 Dec 13, 2016 Jkt 241001 PO 00000 Frm 00079 Fmt 4703 Sfmt 4703 E:\FR\FM\14DEN1.SGM 14DEN1

Federal Register / Vol. 81, No. 240 / Wednesday, December 14, 2016 / Notices 90397 may be deemed to involve one or more and reports filed under the Act. Finally, Contracts held by affected Contract purchases or sales of securities or the Section 17 Applicants submit that owners. property between affiliated persons. The the proposed Substitutions are 6. The Substitutions will in no way proposed transactions may involve a consistent with the general purposes of alter the tax treatment of affected transfer of portfolio securities by the the Act. Contract owners in connection with Existing Portfolios to the Separate their Contracts, and no tax liability will Accounts. Immediately thereafter, the Applicants’ Conditions arise for Contract owners as a result of Separate Accounts would purchase The Section 26 Applicants, and the Substitutions. shares of the Replacement Portfolios HIMCO as applicable, agree that any 7. The obligations of the Section 26 with the portfolio securities received order granting the requested relief will Applicants, and the rights of the from the Existing Portfolios. be subject to the following conditions. affected Contract owners, under the Accordingly, to the extent the Separate 1. The Substitutions will not be Contracts of affected Contract owners Accounts and the Existing Portfolios, effected unless the Section 26 will not be altered in any way. and the Separate Accounts and the Applicants determine that: (i) The 8. Affected Contract owners will be Replacement Portfolios, are deemed to Contracts allow the substitution of permitted to transfer Contract value be affiliated persons of one another shares of registered open-end from the subaccount investing in the under Section 2(a)(3) of the Act, it is investment companies in the manner Existing Portfolio (before Substitution conceivable that this aspect of the contemplated by this application; (ii) Date) or the Replacement Portfolio (after proposed Substitutions could be viewed the Substitutions can be consummated the Substitution Date) to any other as being prohibited by Section 17(a). As as described in this application under available investment option under the such, the Section 17 Applicants have applicable insurance laws; and (iii) any Contract without charge for a period determined that it is prudent to seek regulatory requirements in each beginning at least 30 days before the relief from Section 17(a) in the context jurisdiction where the Contracts are Substitution Date through at least 30 of this application. qualified for sale have been complied days following the Substitution Date. 5. The Section 17 Applicants Contract owners with guaranteed living with to the extent necessary to complete maintain that the terms of the proposed and/or death benefit riders, as the Substitutions. In-Kind Transactions, including the applicable, may transfer Contract value 2. The Hartford Insurance Companies consideration to be paid by each from the subaccounts investing in the will seek approval of the proposed Existing Portfolio and received by each Existing Portfolios (before the Substitutions from any state insurance Substitutions) or the Replacement Replacement Portfolio involved, are regulators whose approval may be reasonable, fair and do not involve Portfolios (after the Substitutions) to any necessary or appropriate. other available investment option overreaching, principally because the 3. HIMCO will not change a sub- available under their respective riders transactions will conform with all but adviser, add a new sub-adviser, or without charge and without imposing one of the conditions enumerated in otherwise rely on the Manager of any transfer limitations. Except as Rule 17a–7. The In-Kind Transactions Managers Order or any replacement described in any market timing/short- will take place at relative net asset value order from the Commission with respect term trading provisions of the relevant in conformity with the requirements of to any Replacement Portfolio without prospectus, the Section 26 Applicants Section 22(c) of the Act and Rule 22c– first obtaining shareholder approval of will not exercise any rights reserved 1 thereunder without the imposition of any transfer or similar charges by the the change in sub-adviser, the new sub- under the Contracts to impose Section 26 Applicants. The adviser, or the Replacement Portfolio’s restrictions on transfers between the Substitutions will be effected without ability to add or to replace a sub-adviser subaccounts under the Contracts, change in the amount or value of any at a shareholder meeting, the record including limitations on the future Contract held by the affected Contract date for which shall be after the number of transfers, for a period owners. The Substitutions will in no proposed Substitution has been effected. beginning at least 30 days before the way alter the tax treatment of affected 4. The Hartford Insurance Companies Substitution Date through at least 30 Contract owners in connection with or their affiliates will pay all expenses days following the Substitution Date. their Contracts, and no tax liability will and transaction costs of the 9. All affected Contract owners will be arise for Contract owners as a result of Substitutions, including legal and notified, at least 30 days before the the Substitutions. The fees and charges accounting expenses, any applicable Substitution Date about: (a) The under the Contracts will not increase brokerage expenses and other fees and intended Substitution of Existing because of the Substitutions. Even expenses. No fees or charges will be Portfolios with the Replacement though the Separate Accounts, the assessed to the affected Contract owners Portfolios; (b) the intended Substitution Hartford Insurance Companies and the to effect the Substitutions. The proposed Date; and (c) information with respect to Trust may not rely on Rule 17a–7, the Substitutions will not cause the transfers as set forth in Condition 8 Section 17 Applicants believe that the Contract fees and charges currently above. In addition, the Section 26 Rule’s conditions outline the type of being paid by Contract owners to be Applicants will also deliver to affected safeguards that result in transactions greater after the proposed Substitution Contract owners, at least thirty (30) days that are fair and reasonable to registered than before the proposed Substitution. before the Substitution Date, a investment company participants and 5. The Substitutions will be effected prospectus for each applicable preclude overreaching in connection at the relative net asset values of the Replacement Portfolio. respective shares of the Replacement 10. The Section 26 Applicants will sradovich on DSK3GMQ082PROD with NOTICES with an investment company by its affiliated persons. Portfolios in conformity with Section deliver to each affected Contract owner 6. The Section 17 Applicants submit 22(c) of the 1940 Act and Rule 22c–1 within five (5) business days of the that the proposed in-kind purchases by thereunder without the imposition of Substitution Date a written confirmation the Separate Accounts are consistent any transfer or similar charges by the which will include: (a) A confirmation with the policies of the Trust and the Section 26 Applicants. The that the Substitutions were carried out Replacement Portfolios, as recited in the Substitutions will be effected without as previously notified; (b) a restatement Trust’s current registration statement change in the amount or value of any of the information set forth in the Pre- VerDate Sep<11>2014 18:45 Dec 13, 2016 Jkt 241001 PO 00000 Frm 00080 Fmt 4703 Sfmt 4703 E:\FR\FM\14DEN1.SGM 14DEN1

90398 Federal Register / Vol. 81, No. 240 / Wednesday, December 14, 2016 / Notices Substitution Notice; and (c) values of Separate Account Seven (‘‘HL Separate FOR FURTHER INFORMATION CONTACT: the Contract owner’s positions in the Account 7’’), Hartford Life and Annuity Jessica Shin, Attorney-Adviser at (202) Existing Portfolio before the Insurance Company Separate Account 551–5921 or David J. Marcinkus, Branch Substitution and the Replacement Seven (‘‘HLA Separate Account 7) Chief, at (202) 551–6821 (Chief Portfolio after the Substitution. (collectively, the ‘‘Separate Accounts,’’ Counsel’s Office, Division of Investment 11. For a period of two years and together with the Hartford Management). following the Substitution Date, for Insurance Companies, the ‘‘Section 26 SUPPLEMENTARY INFORMATION: The those Contracts with assets allocated to Applicants’’); HIMCO Variable following is a summary of the the Existing Portfolio on the Insurance Trust (the ‘‘Trust’’), Hartford application. The complete application Substitution Date, the Hartford Investment Management Company may be obtained via the Commission’s Insurance Companies will reimburse, on (‘‘HIMCO,’’ and collectively with the Web site by searching for the file the last business day of each fiscal Section 26 Applicants and the Trust, the number, or for an applicant using the quarter, the Contract owners whose ‘‘Section 17 Applicants’’). Company name box, at http:// subaccounts invest in the applicable SUMMARY OF APPLICATION: The www.sec.gov/search/search.htm, or by Replacement Portfolio to the extent that Applicants seek an order pursuant to calling (202) 551–8090. the Replacement Portfolio’s net annual section 26(c) of the Act, approving the Applicants’ Representations operating expenses (taking into account substitution of shares of thirty-five (35) fee waivers and expense investment portfolios of registered 1. Hartford Life is a stock life reimbursements) for such period investment companies (the ‘‘Existing insurance company incorporated under exceeds, on an annualized basis, the net Portfolios’’) with shares of five (5) the laws of the state of Connecticut. annual operating expenses of the investment portfolios of the Trust (the Hartford Life was engaged in the Existing Portfolio for fiscal year 2015. In ‘‘Replacement Portfolios’’), under business of writing individual and addition, the Section 26 Applicants will certain variable annuity contracts (the group life insurance and annuity not increase the Contract fees and ‘‘Contracts’’), each funded through the contracts until April 30, 2013, and charges that would otherwise be Separate Accounts (the remains authorized to do business in assessed under the terms of the ‘‘Substitutions’’). In addition, the every state and the District of Columbia. Contracts for a period of at least two Section 17 Applicants also seek an order Hartford Life is an indirect, wholly- years following the Substitution Date. pursuant to section 17(b) of the Act owned subsidiary of The Hartford exempting them from section 17(a) of Financial Services Group, Inc. (‘‘The For the Commission, by the Division of the Act to the extent necessary to permit Hartford’’), a Delaware corporation Investment Management, under delegated authority. them to engage in certain in-kind whose stock is traded on the New York transactions (the ‘‘In-Kind Stock Exchange. Robert W. Errett, Transactions’’) in connection with the 2. Hartford Life and Annuity is a stock Deputy Secretary. life insurance company incorporated [FR Doc. 2016–29934 Filed 12–13–16; 8:45 am] Substitutions. under the laws of the state of DATES: Filing Date: BILLING CODE 8011–01–P The application was filed on April 21, Connecticut. Hartford Life and Annuity 2015, and amended on May 25, 2016 was engaged in the business of writing and August 31, 2016. individual and group life insurance and SECURITIES AND EXCHANGE annuity contracts until April 30, 2013, COMMISSION HEARING OR NOTIFICATION OF HEARING: An and remains authorized to do business order granting the requested relief will in every state (except New York), the [Release No. IC–32385; File No. 812–14446] be issued unless the Commission orders District of Columbia and Puerto Rico. Hartford Life Insurance Company, et a hearing. Interested persons may Hartford Life and Annuity is an indirect al; Notice of Application request a hearing by writing to the wholly-owned subsidiary of The Commission’s Secretary and serving Hartford. December 8, 2016. applicants with a copy of the request, 3. Hartford Life established HL AGENCY: Securities and Exchange personally or by mail. Hearing requests Separate Account 3 and HL Separate Commission (‘‘Commission’’). should be received by the Commission Account 7 as segregated asset accounts ACTION: Notice of application for an by 5:30 p.m. on January 3, 2017, and under Connecticut law on June 22, 1994 order approving the substitution of should be accompanied by proof of and December 8, 1986, respectively. certain securities pursuant to section service on applicants, in the form of an Hartford Life and Annuity established 26(c) of the Investment Company Act of affidavit, or for lawyers, a certificate of HLA Separate Account 3 and HLA 1940, as amended (‘‘Act’’) and an order service. Pursuant to rule 0–5 under the Separate Account 7 as segregated asset of exemption pursuant to section 17(b) Act, hearing requests should state the accounts under Connecticut law on June of the Act from section 17(a) of the Act. nature of the writer’s interest, any facts 22, 1994 and April 1, 1999, respectively. bearing upon the desirability of a Each of the Separate Accounts meets the APPLICANTS: Hartford Life Insurance hearing on the matter, the reason for the definition of ‘‘separate account,’’ as Company (‘‘Hartford Life’’), Hartford request, and the issues contested. defined in Section 2(a)(37) of the Act. Life and Annuity Insurance Company Persons who wish to be notified of a The Separate Accounts are registered (‘‘Hartford Life and Annuity,’’ and hearing may request notification by with the Commission under the Act as together with Hartford Life, the writing to the Commission’s Secretary. unit investment trusts. The assets of the ‘‘Hartford Life Insurance Companies’’); ADDRESSES: Secretary, U.S. Securities Separate Accounts support the sradovich on DSK3GMQ082PROD with NOTICES their respective separate accounts, and Exchange Commission, 100 F Street Contracts and interests in the Separate Hartford Life Insurance Company NE., Washington, DC 20549–1090. Accounts offered through such Separate Account Three (‘‘HL Separate Applicants: Hartford Life Insurance Contracts. The Separate Accounts are Account 3’’), Hartford Life and Annuity Company, Attn: Lisa Proch, Vice segmented into subaccounts, and certain Insurance Company Separate Account President, Assistant General Counsel, of these subaccounts invest in the Three (‘‘HLA Separate Account 3’’), P.O. Box 2999, Hartford, CT 06104– Existing Portfolios. The Contracts are Hartford Life Insurance Company 2999. individual and group deferred variable VerDate Sep<11>2014 18:45 Dec 13, 2016 Jkt 241001 PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 E:\FR\FM\14DEN1.SGM 14DEN1


Document Created: 2016-12-14 00:48:53
Document Modified: 2016-12-14 00:48:53
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
ActionNotice of application for an order approving the substitution of certain securities pursuant to section 26(c) of the Investment Company Act of 1940, as amended (``Act'') and an order of exemption pursuant to section 17(b) of the Act from section 17(a) of the Act.
ContactJessica Shin, Attorney-Adviser at (202) 551-5921 or David J. Marcinkus, Branch Chief, at (202) 551-6821 (Chief Counsel's Office, Division of Investment Management).
FR Citation81 FR 90394 
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