The Mutual Life Insurance Company of New York, et al.

Following is a summary of the Application. The complete Application is available for a fee from the Public Reference Branch of the Commission.

Applicants' Representations

1. MONY is a mutual life insurance company organized in the state of New York in 1842. MONY America is a stock insurance company organized in the state of Arizona. MONY America is the corporate successor of VICO Credit Life Insurance Company, incorporated in Arizona on March 6, 1969. MONY America is a wholly owned subsidiary of MONY. MONY and MONY America serve as sponsor and depositor of the MONY Account and MONY America Account, respectively. 2. MONY and MONY America established the MONY Account and MONY America Account on November 28, 1990 and March 27, 1987, respectively. The Accounts are segregated asset accounts registered with the Commission as unit investment trusts pursuant to the provisions of the 1940 Act and are used to fund certain individual and group flexible payment variable annuity contracts issued by the Companies and sold under the name ``ValueMaster'' (``ValueMaster Contracts''). 3. The Accounts are currently divided into various sub-accounts (``Sub-Accounts''), five of which are available to owners of ValueMaster Contracts (``ValueMaster Contractowners'') and which reflect the investment performance of the Bond, Equity, Managed, Money Market and Small Cap Series of the Trust, a registered investment company. ValueMaster Contractowners may transfer account values among the Sub-Accounts without any charge up to four times a year. For any additional transfers, a transfer charge is not currently imposed, however the Companies reserve the right to impose a charge, which will not exceed $25 per transfer. The ValueMaster Contracts are offered exclusively by agents of Oppenheimer Life Agency, Ltd., (``Oppenheimer Life''), which is not an affiliate of OpCap Advisors, a registered investment adviser and the Trust's investment manager. Neither Oppenheimer Life nor OpCap Advisors are affiliates of the Applicants. As of December 31, 1997, there were under 800 ValueMaster Contractowners with allocations totaling $2,166,258 to the OCC Money Market Portfolio, representing only 3% of the total assets invested in the Accounts by ValueMaster Contractowners. Oppenheimer Life is no longer actively selling the ValueMaster Contracts. 4. The Trust was established on May 12, 1994 and is a registered open-end management investment company consisting of seven separate series (``Portfolios'') with differing investment objectives, policies and restrictions. The Trust currently also offers shares of its Portfolios to accounts of other unaffiliated life insurance companies, to serve as the investment vehicle for their respective variable annuity and life insurance contracts. 5. The OCC Money Market Portfolio seeks maximum current income consistent with stability of principal and liquidity through investment in a portfolio of high quality money market instruments. Shares of the OCC Money Market Portfolio are purchased, without sales charge, by the Money Market Sub-Accounts of the respective Accounts at the net asset value per share next determined following receipt of a purchase payment by the Sub-Accounts. Any dividend or capital gain distributions received from the Portfolio is reinvested in additional shares of the Portfolio and retained as assets of the Sub-Accounts. Shares are redeemed without any charge or fee to the Accounts to the extent necessary for the Companies to make annuity or other payments under the ValueMaster Contracts. As of December 31, 1997, the OCC Money Market Portfolio had assets of $2,166,067 all of which were attributable to ValueMaster Contractowners. For the calendar year 1997, net redemptions by the Accounts of shares of the OCC Money Market Portfolio, not including dividend or capital gain reinvestments, totaled $3,312,805. 6. Like the OCC Money Market Portfolio, the MONY Money Market Portfolio seeks maximum current income consistent with stability of principal and liquidity through investment in a portfolio of high quality money market instruments. Shares of the MONY Money Market Portfolio are currently offered by the Companies as a funding vehicle for their variable products and, as such, are held by a segregated account of each insurance

company. As of December 31, 1997, the MONY Money Market Portfolio had assets of $158,286,237. For the calendar year 1997, net sales of shares of the MONY Money Market Portfolio, not including dividend or capital gain reinvestments, totaled $5,418,168. 7. Under the Investment Advisory Agreement (``Advisory Agreement'') between the Trust and OpCap Advisors, OpCap Advisors provide management and investment advisory services to the Trust and its Portfolios and is compensated by the Trust for services rendered to the OCC Money Market Portfolio on a monthly basis at the annual rate of .40 percent of the average daily net assets of the OCC Money Market Portfolio. Under the Advisory Agreement, OpCap Advisors has contractually agreed to limit the total expenses of the Portfolio to 1.00 percent of its average daily net assets. Pursuant to an Investment Advisory Agreement between the MONY Series Fund, Inc. and MONY America, MONY America provides management and investment advisory services to the MONY Money Market Portfolio of the MONY Series Fund, Inc. for an annual fee at the rate of .40% of the first $400 million of the aggregate average daily net assets of the portfolio; .35% of the next $400 million of the aggregate average daily net assets of the portfolio and .30% of the aggregate average daily net assets of the portfolio in excess of $800 million. For the year ended December 31, 1997, the ratio of net operating expenses to average net assets for the OCC Money Market Portfolio was .98% as compared to .46% for the MONY Money Market Portfolio for the year ended December 31, 1997. 8. The ValueMaster Contracts reserve to the Companies the right to replace the shares of the Portfolios held by the Accounts with shares of another portfolio, such as the MONY Money Market Portfolio, if (i) shares of the Portfolio should no longer be available for investment by the Accounts; or (ii) in the judgment of the Companies, further investment in the Portfolio should become inappropriate in view of the purpose of the ValueMaster Contracts, provided any such substitution is approved by the Commission and is in compliance with applicable rules and regulations. The Companies believe that further investment in shares of the OCC Money Market Portfolio is no longer appropriate in view of the purposes of the ValueMaster Contracts. 9. The decreasing asset base of the OCC Money Market Portfolio, based upon lack of interest by ValueMaster Contractowners in the Portfolio as evidenced by net redemption of Portfolio shares, has made it difficult for the Portfolio to retain current investors and attract new investors. Moreover, Oppenheimer Life Agency's limited effort in actively selling the ValueMaster Contract, coupled with a constant amount of fixed costs incurred by the Portfolio, can reasonably be expected to lead to an increase in the actual expenses of the OCC Money Market Portfolio in the future. 10. The relative small asset size of the OCC Money Market Portfolio hampers the ability to maintain optimal diversification. The MONY Money Market Portfolio can be expected to achieve greater diversification and more readily react to changes in market conditions. ValueMaster Contractowners will benefit through the more effective management of a larger portfolio such as the MONY Money Market Portfolio. 11. The Companies on their own behalf and on behalf of the Accounts respectively, propose to substitute shares of the MONY Money Market Portfolio for all shares of the OCC Money Market Portfolio attributable to the ValueMaster Contracts (``Substitution''). The Substitution will occur as soon as practicable after receipt of the Order. As of the effective date of the Substitution, the Companies will redeem shares of the OCC Money Market Portfolio. Simultaneously, the Companies will use the proceeds to purchase the appropriate number of shares of the MONY Money Market Portfolio. The Substitution will take place at relative net asset values of the Portfolios, with no change in the amount of any ValueMaster Contractowner's account value. 12. To alleviate the impact of brokerage fees and expenses upon the OCC Money Market Portfolio and ultimately OpCap Advisors, the Trust and OpCap Advisors propose that the redemption of the OCC Money Market Portfolio shares be accomplished, in part, by ``in kind'' transactions. Under the proposal, the Trust would transfer to the Companies their proportionate interest in cash and/or securities held by the OCC Money Market Portfolio on the date of the Substitution, and the Companies will then use such cash and/or securities to purchase shares of the MONY Money Market Portfolio. The valuation of any ``in kind'' transfers will be on a basis consistent with the valuation procedures of the OCC Money Market and MONY Money Market Portfolios.

Terms and Conditions

Applicants agree to the following terms and conditions: 1. The OCC Money Market and MONY Money Market Portfolios have substantially similar investment objectives, policies and restrictions. 2. The Substitution will take place at the net asset value of the respective shares, which both portfolios seek to maintain at $1.00 per share, with no change in the amount of any ValueMaster Contractowner's account value and without the imposition of any transfer or similar charge. 3. The valuation of any ``in kind'' transfer will be on a basis consistent with the valuation procedures of the OCC Money Market and MONY Money Market Portfolios. 4. ValueMaster Contractowners will not incur any fees or charges as a result of the proposed substitution. OpCap Advisors will assume any expenses and transaction costs, including legal and accounting fees and any brokerage commissions, relating to the Substitution. To the extent the OCC Money Market Portfolio incurs brokerage fees and expenses in connection with the redemption by the Companies of its shares, these expenses would be charged to the applicable Portfolio but borne by OpCap Advisors. 5. The proposed substitution will not cause the contract fees and charges currently being paid by existing contractowners to be greater after proposed substitution than before the substitution. 6. Before the Substitution occurs, the prospectuses for the Accounts will be supplemented to reflect the proposed Substitution (the ``Application Supplements'') and distributed to all ValueMaster Contractowners. 7. Within five days after the Substitution, the Companies will send to ValueMaster Contractowners written notice of the Substitution (the ``Notice'') stating that shares of the OCC Money Market Portfolio have been eliminated and that the shares of the MONY Money Market Portfolio have been substituted. The Companies will include in such mailing a second supplement to the prospectuses of the Accounts which discloses that the Substitution has occurred. The Notice will also advise ValueMaster Contractowners that for a period of thirty days from the mailing of the Notice, they may transfer all assets, as substituted, to any other available Sub-Account, without limitation and without the transfer being deemed a transfer for purposes of determining any transfer charge (the period from the date of the Application Supplements to

thirty days from the mailing of the Notice is the ``Free Transfer Period''). 8. The Substitution will not in any way alter the insurance benefits or contractual obligations of the Companies to ValueMaster Contractowners or tax benefits and consequences to ValueMaster Contractowners. Following the Substitution, ValueMaster Contractowners will be afforded the same surrender and other transfer rights as they currently have. Any applicable surrender (contingent deferred sales) charges will continue to be imposed but will not be affected in any way by the Substitution.

Applicants' Legal Analysis

1. Section 26(b) of the 1940 Act provides, in pertinent part, that ``[i]t shall be unlawful for any depositor or trustee of a registered unit investment trust holding the security of a single issuer to substitute another security for such security unless the Commission shall have approved such substitution.'' Section 26(b) of the 1940 Act further provides that the Commission shall issue an order approving such substitution if the evidence establishes that the substitution is consistent with the protection of investors and the purposes fairly intended by the policies and provisions of the 1940 Act. 2. The purpose of Section 26(b) is to protect the expectation of investors in a unit investment trust that the unit investment trust will accumulate the share of a particular issuer and to prevent unscrutinized substitutions which might, in effect, force shareholders dissatisfied with the substituted security to redeem their shares, thereby possibly incurring either a loss of the sales load deducted from initial purchase payments, an additional sales load upon reinvestment of the redemption proceeds, or both. Section 26(b) affords this protection to investors by preventing a depositor or trustee of a unit investment trust holding the shares of one issuer from substituting for those shares the shares of another issuer, unless the Commission approves that substitution. 3. Applicants assert that the purposes, terms and conditions of the proposed Substitution are consistent with the principles and purposes of Section 26(b) and do not entail any of the abuses that Section 26(b) is designed to prevent. Applicants further assert that the Substitution will not result in the type of costly forced redemption that Section 26(b) was intended to guard against and is consistent with the protection of investors and the purposes fairly intended by the 1940Act. 4. Section 17(a)(1) of the 1940 Act prohibits an affiliated person of a registered investment company or an 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 1940 Act prohibits any of such affiliated persons, acting as principal, from purchasing any security or other property from such registered investment company. The transfer or proceeds emanating out of the redemption of share in-kind of the OCC Money Market Portfolio to the Money Market Sub-Account and the purchase by the Money Market Sub- Account of shares of the MONY Money Market Portfolio could be deemed to involve a sale between the OCC Money Market Portfolio and the Money Market Sub-Account (which may be considered to be affiliates of each other because all the shares of the OCC Money Market Portfolio are held by the Money Market Sub-Account), and a purchase between the Money Market Sub-Account and the MONY Money Market Portfolio, each of which is affiliated person of the other. 5. Section 17(b) provides that the Commission may grant an order exemption a proposed transaction provided: (a) the terms of the proposed transaction, including the consideration to be paid or received, are reasonable and fair and do not involve overreaching on the part of any person; (b) the proposed transaction is consistent with the policy of each registered investment company concerned, as recited in its registration statement and reports filed under the 1940 Act; and (c) the proposed transaction is consistent with the general purposes of the 1940 Act. 6. Applicants assert that the terms of the proposed transaction are reasonable and fair and do not involve overreaching; the transaction is consistent with the policy of each investment company concerned and with the purposes of the 1940 Act; and the exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the 1940 Act. 7. Applicants assert that the Substitution is an appropriate solution to the limited ValueMaster Contractowner interest or investment in the OCC Money Market Portfolio, which is currently and in the future may be expected to be, of insufficient size to promote consistent investment performance or to reduce operating expenses.

Conclusion

Applicants assert that, for the reasons summarized above, the requested order approving the substitution and related transactions involving in-kind redemptions and purchases should be granted.

For the Commission, by the Division of Investment Management, pursuant to delegated authority. Margaret H. McFarland, Deputy Secretary. [FR Doc. 98-30949 Filed 11-18-98; 8:45 am] BILLING CODE 8010-01-M