

[Federal Register: July 27, 2006 (Volume 71, Number 144)]
[Notices]               
[Page 42677-42686]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27jy06-82]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-27423; File No. 812-13260]

 
ING Life Insurance and Annuity Company, et al., Notice of 
Application

July 20, 2006.
AGENCY: The Securities and Exchange Commission (``Commission'').

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

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

Applicants: ING Life Insurance and Annuity Company, ING USA Annuity and 
Life Insurance Company, ReliaStar Life Insurance Company, (each a 
``Company'' and together, the ``Companies''), Variable Annuity Account 
B of ING Life Insurance and Annuity Company, Variable Annuity Account C 
of ING Life Insurance and Annuity Company, Variable Annuity Account I 
of ING Life Insurance and Annuity Company, Separate Account B of ING 
USA Annuity and Life Insurance Company, Separate Account N of Reliastar 
Life Insurance Company (each, an ``Account'' and together, the 
``Accounts''), ING Investors Trust, ING Partners, Inc., and ING VP 
Balanced

[[Page 42678]]

Portfolio, Inc., collectively referred to herein as (the 
``Applicants'').

Summary of Application: The Applicants request an order, pursuant to 
Section 26(c) 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 and ING Partners, Inc., and certain shares of the ING 
VP Balanced Portfolio, Inc. (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
------------------------------------------------------------------------
Baron Asset Fund.......................  ING Baron Asset Portfolio--
                                          Class S.
Baron Growth Fund......................  ING Baron Small Cap Growth
                                          Portfolio--Class S.
Fidelity Advisor Mid Cap Fund--Class T.  ING FMR Diversified Mid Cap
                                          Portfolio--Class S.
Fidelity VIP Growth Portfolio--Initial   ING FMR Earnings Growth
 Class.                                   Portfolio--Class I.
AIM V.I. Capital Appreciation Fund--
 Series I
Fidelity VIP Equity-Income Portfolio--   ING FMR Equity Income
 Initial Class.                           Portfolio--Class I.
Fidelity VIP Equity-Income Portfolio--   ING FMR Equity Income
 Service Class 2.                         Portfolio--Class S.
AllianceBernstein Growth and Income      ING JPMorgan Value
 Portfolio--Class A.                      Opportunities Portfolio--Class
                                          I.
Alliance Bernstein Growth and Income     ING JPMorgan Value
 Fund--Class A.                           Opportunities Portfolio--Class
                                          S.
Legg Mason Value Trust, Inc.--Primary    ING Legg Mason Value Portfolio
 Class.                                   Class S.
Lord Abbett Series Fund--Growth and      ING Lord Abbett Affiliated
 Income Portfolio--Class VC.              Portfolio--Class I.
Lord Abbett Affiliated Fund--Class A
MFS Total Return Series--Initial Class.  ING MFS Total Return Portfolio--
                                          Class I.
Oppenheimer Global Fund--Class A.......  ING Oppenheimer Global
                                          Portfolio--Class S.
Oppenheimer Main Street Fund--Class A..  ING Oppenheimer Main Street
                                          Portfolio--Class S.
Fidelity VIP High Income Portfolio--     ING PIMCO High Yield Portfolio--
 Initial Class.                           Class I.
Pioneer Equity Income VCT Portfolio--    ING Pioneer Equity Income
 Class I.                                 Portfolio--Class I.
AIM V.I. Core Equity Fund--Series I....  ING Pioneer Fund Portfolio--
                                          Class I.
Pioneer Fund VCT Portfolio--Class I....  ING Pioneer Fund Portfolio--
                                          Class I.
Pioneer Fund--Class A..................  ING Pioneer Fund Portfolio--
                                          Class S.
Pioneer High Yield VCT Portfolio--Class  ING Pioneer High Yield
 I.                                       Portfolio-Class I.
Pioneer High Yield Fund--Class A.......  ING Pioneer High Yield
                                          Portfolio--Class S.
Pioneer Mid Cap Value VCT Portfolio--    ING Pioneer Mid Cap Value
 Class I.                                 Portfolio--Class I.
Templeton Growth Fund, Inc.--Class A...  ING Templeton Global Growth
                                          Portfolio--Class I.
UBS U.S. Small Cap Growth Fund--Class A  ING UBS U.S. Small Cap Growth
                                          Portfolio--Class S.
Fidelity VIP Asset Manager Portfolio--   ING VP Balanced Portfolio,
 Initial Class.                           Inc.--Class I.
Fidelity VIP Overseas Portfolio--        ING VP Index Plus International
 Initial Class.                           Equity Portfolio--Class S.
Lord Abbett Small-Cap Value Fund--Class  ING Wells Fargo Small Cap
 A.                                       Disciplined Portfolio--Class
                                          S.
Evergreen Special Values Fund--Class A
------------------------------------------------------------------------

    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 February 9, 2006. The 
Application was amended and restated on June 30, 2006, and July 18, 
2006.

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 14, 2006, 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: Secretary, Securities and Exchange Commission, 100 F Street, 
NE., Washington, DC 20549-1090. Applicants, J. Neil McMurdie, Esquire, 
ING Americas U.S. Legal Services, 151 Farmington Avenue, TS31, 
Hartford, CT 06156-8975.

FOR FURTHER INFORMATION CONTACT: Alison White, Senior Counsel, or Joyce 
M. Pickholz, Branch Chief, 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, 100 F Street, NE., Room 
1580, Washington, DC 20549.

Applicants' Representations

    1. 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 of the others.
    2. ING Life Insurance and Annuity Company (``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). Through a December 31, 
2005 merger, ING Life's operations include the business of ING 
Insurance Company of America (``ING America''). 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.
    3. ING USA Annuity and Life Insurance Company (``ING USA'') is an 
Iowa stock life insurance company which was originally organized in 
1973 under the insurance laws of Minnesota. Through January 1, 2004 
mergers, ING USA's operations include the business of Equitable Life 
Insurance Company of Iowa, United Life and Annuity

[[Page 42679]]

Insurance Company, 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.
    4. ReliaStar Life Insurance Company (``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.
    5. Each of the Accounts is a segregated asset account of the 
Company that is the depositor of such Account, 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.
    6. Variable Annuity Account B of ING Life Insurance and Annuity 
Company (``ING Life B'') (File No. 811-2512) was established by Aetna 
in 1976 as a continuation of the separate account established in 1974 
under the laws of the State of Arkansas by Aetna Variable Annuity Life 
Insurance Company to support certain Contracts.
    7. Variable Annuity Account C of ING Life Insurance and Annuity 
Company (``ING Life C''). ING Life C (formerly Variable Annuity Account 
C of Aetna Life Insurance and Annuity Co) (File No. 811-2513) was 
established by Aetna in 1976 as a continuation of the separate account 
established in 1974 in accordance with the laws of the State of 
Arkansas by Aetna Variable Annuity Life Insurance Company to support 
certain Contracts.
    8. Variable Annuity Account I of ING Life Insurance and Annuity 
Company (``ING Life I''), (formerly ING Variable Annuity Account I of 
ING Insurance Company of America) (File No. 811-8582), was established 
by ING America (then known as Aetna Insurance Company of America) in 
1994 under the laws of the State of Connecticut.
    9. Separate Account B of ING USA Annuity and Life Insurance Company 
(``ING USA B'') (File No. 811-5626) was established by Golden in 1988 
under the laws of the State of Minnesota.
    10. Separate Account N of ReliaStar Life Insurance Company 
(``ReliaStar Separate Account N''), formerly Separate Account One of 
Northern Life Insurance Company (File No. 811-9002), was established by 
Northern in 1994 under the laws of the State of Washington.
    11. Most of the Substitute Funds are series of ING Investors Trust 
and ING Partners, Inc. ING VP Balanced Portfolio is also a Substitute 
Fund.
    12. 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).
    13. ING Partners, Inc. (``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).
    14. ING VP Balanced Portfolio, Inc., formerly known as Aetna 
Investment Advisers Fund, Inc., was organized as a Maryland Corporation 
in 1988. ING VP Balanced Portfolio is registered under the 1940 Act as 
an open-end management investment company (File No. 811-05773).
    15. Directed Services, Inc., ING Investments, LLC, and ING Life are 
registered as investment advisers under the Investment Adviser Act of 
1940. Directed Services, Inc. provides or will provide overall 
management services for each series of the ING Investors Trust except 
for the ING VP Index Plus International Equity Portfolio. The ING VP 
Index Plus International Equity Portfolio and ING VP Balanced 
Portfolio, Inc. are advised by ING Investments, LLC. ING Life is the 
investment adviser for each ING Partners portfolio.
    16. The terms and conditions, including charges and expenses, 
applicable to each Contract are described in the registration 
statements filed with the Commission for each. The Contracts may be 
issued as individual contracts or as group contracts where the owner is 
the employer, sponsor or trustee of a group retirement plan. In the 
case of group contracts, members of the group (``Participants'') 
acquire an interest in the contract and have certain rights as 
determined by the group contract and/or, if applicable, the retirement 
plan covering the Participants' interests. As each Contract is 
structured, owners of the Contract, or in the case of certain group 
contracts, the Participant (each a ``Contract Owner'') may select one 
or more of the investment options available under the Contract by 
allocating premiums and transferring account value to that subaccount 
of the relevant Account that corresponds to the investment option 
desired. Thereafter, the account value of the Contract Owner will vary 
based on the investment experience of the selected subaccount(s). 
Generally, a Contract Owner may, during the life of each Contract, make 
unlimited transfers of account values among the subaccounts available 
under the Contract, subject to any administrative and/or transfer fees 
applicable under the Contracts and any limits related to frequent or 
disruptive transfers.

Comparison of Fees and Expenses

    17. The comparative fees and expenses for each fund in the proposed 
substitutions are as follows:

                                                                      [In percent]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Management     Distribution                    Total annual       Expense       Net annual
                                                               fees        (12b-1) fees   Other expenses     expenses         waivers        expenses
--------------------------------------------------------------------------------------------------------------------------------------------------------
Substitute Fund:
     ING Baron Asset Portfolio--S Class.........           0.95   ..............        \1\ 0.46           1.41             0.11           1.30
Replaced Fund:
     Baron Asset Fund...........................           1.00             0.25            0.09           1.34   ..............           1.34
Substitute Fund:
     ING Baron Small Cap Growth Portfolio--S               0.85   ..............        \2\ 0.48           1.33             0.02           1.31
     Class..............................................
Replaced Fund:
     Baron Growth Fund..........................           1.00             0.25            0.06           1.31   ..............           1.31
Substitute Fund:

[[Page 42680]]


     ING FMR Diversified Mid Cap Portfolio--               0.65   ..............        \4\ 0.26           0.91   ..............           0.91
     Class S \3\........................................
Replaced Fund:
     Fidelity Advisor Mid Cap Fund--Class T.....           0.57             0.50            0.24           1.31   ..............           1.31
Substitute Fund:
     ING FMR Earnings Growth Portfolio--Class I.           0.57   ..............            0.15           0.72             0.05           0.67
Replaced Fund:
     Fidelity VIP Growth Portfolio--Initial                0.57   ..............            0.10           0.67   ..............           0.67
     Class..............................................
Replaced Fund:
     AIM V.I. Capital Appreciation Fund--Series            0.61   ..............            0.29           0.90   ..............           0.90
     I..................................................
Substitute Fund:
     ING FMR Equity Income Portfolio--Class I...           0.47   ..............            0.13           0.60             0.04           0.56
Replaced Fund:
     Fidelity VIP Equity-Income Portfolio--                0.47   ..............            0.09           0.56   ..............           0.56
     Initial Class......................................
Substitute Fund:
     ING FMR Equity Income Portfolio--Class S...           0.47   ..............        \5\ 0.38           0.85             0.04           0.81
Replaced Fund:
     Fidelity VIP Equity-Income Portfolio--                0.47             0.25            0.09           0.81   ..............           0.81
     Service Class 2....................................
Substitute Fund:
     ING JPMorgan Value Opportunities Portfolio--          0.40   ..............            0.13           0.53   ..............           0.53
     Class I............................................
Replaced Fund:
     AllianceBernstein Growth and Income                   0.55   ..............            0.04           0.59   ..............           0.59
     Portfolio--Class A.................................
Substitute Fund:
     ING JPMorgan Value Opportunities Portfolio--          0.40   ..............        \6\ 0.38           0.78   ..............           0.78
     Class S............................................
Replaced Fund:
     AllianceBernstein Growth and Income Fund--            0.48             0.28            0.26           1.02   ..............           1.02
     Class A............................................
Substitute Fund:
     ING Legg Mason Value Portfolio--Class S \7\           0.79   ..............        \8\ 0.25           1.04   ..............           1.04
Replaced Fund:
     Legg Mason Value Trust, Inc.--Primary Class           0.66             0.95            0.07           1.68   ..............           1.68
Substitute Fund:
     ING Lord Abbett Affiliated Portfolio--Class           0.75   ..............  ..............           0.75   ..............           0.75
     I \9\..............................................
Replaced Fund:
     Lord Abbett Series Fund--Growth and Income            0.48   ..............            0.41           0.89   ..............           0.89
     Portfolio--Class VC................................
Replaced Fund:
     Lord Abbett Affiliated Fund--Class A.......           0.30             0.35            0.17           0.82   ..............           0.82
Substitute Fund:
     ING MFS Total Return Portfolio--Class I               0.64   ..............  ..............           0.64   ..............           0.64
     \10\...............................................
Replaced Fund:
     MFS Total Return Series--Initial Class.....           0.75   ..............            0.09           0.84   ..............           0.84
Substitute Fund:
     ING Oppenheimer Global Portfolio--Class S..           0.60   ..............       \11\ 0.31           0.91   ..............           0.91
Replaced Fund:
     Oppenheimer Global Fund--Class A...........           0.64             0.24            0.24           1.12   ..............           1.12
Substitute Fund:
     ING Oppenheimer Main Street Portfolio--               0.63   ..............       \13\ 0.26           0.89   ..............           0.89
     Class S \12\.......................................
Replaced Fund:

[[Page 42681]]


     Oppenheimer Main Street Fund--Class A......           0.46             0.24            0.22           0.92   ..............           0.92
Substitute Fund:
     ING PIMCO High Yield Portfolio--Class I               0.49   ..............            0.01           0.50   ..............           0.50
     \14\...............................................
Replaced Fund:
     Fidelity VIP High Income Portfolio--Initial           0.57   ..............            0.13           0.70   ..............           0.70
     Class..............................................
Substitute Fund:
     ING Pioneer Equity Income Portfolio--Class            0.65   ..............            0.20           0.85             0.15           0.70
     I \15\.............................................
Replaced Fund:
     Pioneer Equity Income VCT Portfolio--Class            0.65   ..............            0.06           0.71   ..............           0.71
     I..................................................
Substitute Fund:
     ING Pioneer Fund Portfolio--Class I \16\...           0.725  ..............            0.01           0.735       \17\ 0.05           0.685
Replaced Fund:
     Pioneer Fund VCT Portfolio--Class I........           0.65   ..............            0.05           0.70   ..............           0.70
Substitute Fund:
     ING Pioneer Fund Portfolio--Class S \18\...           0.725  ..............       \19\ 0.26           0.985            0.05           0.935
Replaced Fund:
     Pioneer Fund--Class A......................           0.53             0.25            0.28           1.06   ..............           1.06
Substitute Fund:
     ING Pioneer High Yield Portfolio--Class I..           0.60   ..............            0.21           0.81             0.06           0.75
Replaced Fund:
     Pioneer High Yield VCT Portfolio--Class I..           0.65   ..............            0.12           0.77   ..............           0.77
Substitute Fund:
     ING Pioneer High Yield Portfolio--Class S..           0.60   ..............       \20\ 0.46           1.06             0.06           1.00
Replaced Fund:
     Pioneer High Yield Fund--Class A...........           0.61             0.25            0.20           1.06   ..............           1.06
Substitute Fund:
     ING Pioneer Mid Cap Value Portfolio--Class            0.64   ..............            0.01           0.65   ..............           0.65
     I \21\.............................................
Replaced Fund:
     Pioneer Mid Cap Value VCT Portfolio--Class            0.65   ..............            0.06           0.71   ..............           0.71
     I..................................................
Substitute Fund:
     ING Templeton Global Growth Portfolio--               0.93   ..............            0.01           0.94   ..............           0.94
     Class I \22\.......................................
Replaced Fund:
     Templeton Growth Fund, Inc.--Class A.......           0.58             0.25            0.23           1.06   ..............           1.06
Substitute Fund:
     ING Pioneer Fund Portfolio--I Class \23\...           0.725  ..............            0.01           0.735            0.05           0.685
Replaced Fund:
     AIM V.I. Core Equity Fund--Series I........           0.60   ..............            0.27           0.87   ..............           0.87
Substitute Fund:
     ING UBS U.S. Small Cap Growth Portfolio--             0.85   ..............       \24\ 0.46           1.31             0.06           1.25
     Class S............................................
Replaced Fund:
     UBS U.S. Small Cap Growth Fund--Class A....           0.85             0.25            0.49           1.59             0.31           1.28
Substitute Fund:
     ING VP Balanced Portfolio--Class I.........           0.50   ..............            0.10           0.60   ..............           0.60
Replaced Fund:
     Fidelity VIP Asset Manager Portfolio--                0.52   ..............            0.12           0.64   ..............           0.64
     Initial Class......................................
Substitute Fund:
     ING VP Index Plus International Equity                0.45   ..............       \25\ 0.59           1.04             0.24           0.80
     Portfolio--Class S.................................

[[Page 42682]]


Replaced Fund:
     Fidelity VIP Overseas Portfolio--Initial              0.72   ..............            0.17           0.89   ..............           0.89
     Class..............................................
Substitute Fund:
     ING Wells Fargo Small Cap Disciplined                 0.72   ..............       \26\ 0.46           1.18             0.06           1.12
     Portfolio--Class S.................................
Replaced Fund:
     Lord Abbett Small-Cap Value Fund--Class A..           0.72             0.30            0.21           1.23   ..............           1.23
Replaced Fund:
     Evergreen Special Values Fund--Class A.....           0.78             0.25            0.34           1.37   ..............           1.37
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.
\2\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.
\3\ This Substitute Fund is subject to a unified fee arrangement.
\4\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.
\5\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.
\6\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.
\7\ This Substitute Fund is subject to a unified fee arrangement.
\8\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.
\9\ This Substitute Fund is subject to a unified fee arrangement.
\10\ This Substitute Fund is subject to a unified fee arrangement.
\11\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.
\12\ This Substitute Fund is subject to a unified fee arrangement.
\13\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.
\14\ This Substitute Fund is subject to a unified fee arrangement.
\15\ This portfolio is not yet operational but will be before the effective date of the substitutions. Fees and expenses on the Effective Date will be
  as shown.
\16\ This Substitute Fund is subject to a unified fee arrangement.
\17\ Directed Services, Inc. has agreed to a permanent expense cap on Management Fees and Other Expenses so that beginning on the Effective Date of the
  Substitutions the Total Net Annual Expenses for the Class I shares will never exceed 0.70%.
\18\ This Substitute Fund is subject to a unified fee arrangement.
\19\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.
\20\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.
\21\ This Substitute Fund is subject to a unified fee arrangement.
\22\ This Substitute Fund is subject to a unified fee arrangement.
\23\ This Substitute Fund is subject to a unified fee arrangement.
\24\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.
\25\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.
\26\ The ``Other Expenses'' of this portfolio includes a Shareholder Services Fee of 0.25%.

Investment Objectives and Policies

    The investment objectives of each Replaced and Substitute Fund 
follow:
    18. ING Baron Asset Portfolio for the Baron Asset Fund. The ING 
Baron Asset Portfolio is patterned after the Baron Asset Fund and these 
two portfolios have the same investment objectives and policies. The 
investment objective of both portfolios is to seek capital 
appreciation.
    19. ING Baron Small Cap Growth Portfolio for the Baron Growth Fund. 
The ING Baron Small Cap Growth Portfolio is patterned after the Baron 
Growth Fund and these two portfolios have the same investment 
objectives and policies. The investment objective of both portfolios is 
to seek capital appreciation.
    20. ING FMR Diversified Mid Cap Portfolio for the Fidelity Advisor 
Mid Cap Fund. The ING FMR Diversified Mid Cap Portfolio and the 
Fidelity Advisor Mid Cap Fund have the same investment objective, to 
seek long-term growth of capital. Each fund intends to meet its 
objective by normally investing at least 80% of its assets in 
securities of companies with medium market capitalizations.
    21. ING FMR Earnings Growth Portfolio for the Fidelity VIP Growth 
Portfolio. The investment objective of the ING FMR Earnings Growth 
Portfolio is to seek growth of capital over the long term. The 
investment objective of Fidelity VIP Growth Portfolio is to seek to 
achieve capital appreciation.
    22. ING FMR Earnings Growth Portfolio for the AIM V.I. Capital 
Appreciation Fund. The investment objective of the ING FMR Earnings 
Growth Portfolio and the AIM V.I. Capital Appreciation Fund is to seek 
growth of capital over the long term.
    23. ING FMR Equity Income Portfolio for the Fidelity VIP Equity-
Income Portfolio. The ING FMR Equity Income Portfolio is patterned 
after the Fidelity VIP Equity-Income Portfolio and these two portfolios 
have the same investment objectives and policies. The investment 
objective of both portfolios is to seek capital appreciation and 
reasonable income.
    24. ING JPMorgan Value Opportunities Portfolio for the 
AllianceBernstein Growth and Income Portfolio. The investment objective 
of the ING JPMorgan Value Opportunities Portfolio is to provide long-
term capital appreciation. The investment objective of the 
AllianceBernstein Growth and Income Portfolio is to seek long-term 
growth of capital.
    25. ING JPMorgan Value Opportunities Portfolio for the 
AllianceBernstein Growth and Income Fund. The investment objective of 
the ING JPMorgan Value Opportunities Portfolio is to provide long-term 
capital appreciation. The investment objective of the AllianceBernstein 
Growth and Income Fund is to seek long-term growth of capital.
    26. ING Legg Mason Value Portfolio for the Legg Mason Value Trust, 
Inc. The ING Legg Mason Value Portfolio is patterned after the Legg 
Mason Value Trust, Inc., and these two portfolios have the same 
investment objectives and policies. The investment objective

[[Page 42683]]

of both portfolios is to seek long-term growth of capital.
    27. ING Lord Abbett Affiliated Portfolio for the Lord Abbett Series 
Fund--Growth and Income Portfolio. The investment objective of the ING 
Lord Abbett Affiliated Portfolio is long-term growth of capital with 
current income a secondary objective. The Lord Abbett Series Fund--
Growth and Income Portfolio has an investment objective that seeks 
long-term growth of capital and income.
    28. ING Lord Abbett Affiliated Portfolio for the Lord Abbett 
Affiliated Fund. The ING Lord Abbett Affiliated Portfolio is patterned 
after the Lord Abbett Affiliated Fund and these two portfolios have the 
same investment objectives and policies. The investment objective of 
both portfolios is to seek long-term growth of capital and income.
    29. ING MFS Total Return Portfolio for the MFS Total Return Series. 
The ING MFS Total Return Portfolio is patterned after the MFS Total 
Return Series and these two portfolios have the same investment 
objectives and policies. The investment objective of both portfolios is 
to seek above average income (compared to a portfolio entirely invested 
in equity securities) consistent with the prudent employment of 
capital.
    30. ING Oppenheimer Global Portfolio for the Oppenheimer Global 
Portfolio. The investment objectives of the ING Oppenheimer Global 
Portfolio and the Oppenheimer Global Fund are the same. Each fund seeks 
capital appreciation.
    31. ING Oppenheimer Main Street Portfolio for the Oppenheimer Main 
Street Fund. The investment objective of the ING Oppenheimer Main 
Street Portfolio is long-term growth of capital and future income. The 
investment objective of the Oppenheimer Main Street Fund is high total 
return (which includes growth in the value of its shares as well as 
current income) from equity and debt securities.
    32. ING PIMCO High Yield Portfolio for the Fidelity VIP High Income 
Portfolio. The investment objective of the ING PIMCO High Yield 
Portfolio is to seek maximum total return, consistent with the 
preservation of capital and prudent investment management. The 
investment objective of Fidelity VIP High Income Portfolio is to seek a 
high level of current income, while also considering growth of capital.
    33. ING Pioneer Equity Income Portfolio for the Pioneer Equity 
Income VCT Portfolio. The ING Pioneer Equity Income Portfolio is 
patterned after the Pioneer Equity Income VCT Portfolio and these two 
portfolios have the same investment objectives and policies. The 
investment objective of both portfolios is to seek current income and 
long-term growth of capital from a portfolio consisting primarily of 
income producing equity securities of U.S. corporations.
    34. 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 portfolios is to seek 
reasonable income and capital growth.
    35. ING Pioneer Fund Portfolio for the Pioneer Fund. The ING 
Pioneer Fund Portfolio is patterned after the Pioneer Fund and these 
two funds have the same investment objectives and policies. The 
investment objective of both portfolios is to seek reasonable income 
and capital growth.
    36. ING Pioneer High Yield Portfolio for the Pioneer High Yield VCT 
Portfolio. The ING Pioneer High Yield Portfolio is patterned after the 
Pioneer High Yield VCT Portfolio and these two portfolios have the same 
investment objectives and policies. The investment objective of both 
portfolios is to seek maximum total return through a combination of 
income and capital appreciation.
    37. ING Pioneer High Yield Portfolio for the Pioneer High Yield 
Fund. The ING Pioneer High Yield Portfolio is patterned after the 
Pioneer High Yield Fund and these two funds have the same investment 
objectives and policies. The investment objective of both portfolios is 
to seek maximum total return through a combination of income and 
capital appreciation.
    38. ING Pioneer Mid Cap Value Portfolio for the Pioneer Mid Cap 
Value VCT Portfolio. The ING Pioneer Mid Cap 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 portfolios is to seek capital appreciation.
    39. ING Templeton Global Growth Portfolio for the Templeton Growth 
Fund, Inc. The ING Templeton Global Growth Portfolio is patterned after 
the Templeton Growth Fund, Inc. and these two funds have similar 
investment objectives and policies. The investment objective of the ING 
Templeton Global Growth Portfolio is to seek capital appreciation. The 
Templeton Growth Fund, Inc. seeks long-term capital growth.
    40. ING Pioneer Fund Portfolio for the AIM V.I. Core Equity Fund. 
The investment objective of the ING Pioneer Fund Portfolio is 
reasonable income and capital growth. The investment objective of the 
AIM V.I. Core Equity Series is growth of capital.
    41. ING UBS U.S. Small Cap Growth Portfolio for the UBS U.S. Small 
Cap Growth Fund. The ING UBS U.S. Small Cap Growth Portfolio is 
patterned after the UBS Small Cap Growth Fund and these two funds have 
the same investment objectives and policies. The investment objective 
of both portfolios is to seek to provide long-term capital 
appreciation.
    42. ING VP Balanced Portfolio, Inc. for the Fidelity VIP Asset 
Manager Portfolio. The investment objective of the ING VP Balanced 
Portfolio is to seek to maximize investment return, consistent with 
reasonable safety of principal, by investing in a diversified portfolio 
of one or more of the following asset classes: stocks, bonds and cash 
equivalents, based on the judgment of the portfolio's management, of 
which of those sectors or mix thereof offers the best investment 
prospects. The investment objective of Fidelity VIP II Asset Manager 
Portfolio is to seek to obtain high total return with reduced risk over 
the long-term by allocating its assets among stocks, bonds and short-
term instruments.
    43. ING VP Index Plus International Equity Portfolio for the 
Fidelity VIP Overseas Portfolio. The ING VP IndexPlus International 
Equity Portfolio seeks to outperform the total return performance of 
the Morgan Stanley Capital International EAFE Index (MSCI EAFE). The 
investment objective of the Fidelity VIP Overseas Portfolio is long-
term growth of capital.
    44. ING Wells Fargo Small Cap Disciplined Portfolio for the Lord 
Abbett Small-Cap Value Fund. The investment objective of both the ING 
Wells Fargo Small Cap Disciplined Portfolio and Lord Abbett Small-Cap 
Value Fund is long-term capital appreciation.
    45. ING Wells Fargo Small Cap Disciplined Portfolio for the 
Evergreen Special Values Fund. The investment objective of the ING 
Wells Fargo Small Cap Disciplined Portfolio is long-term capital 
appreciation. The objective of the Evergreen Special Values Fund is to 
seek growth of capital.

Implementation of the Substitutions

    46. 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

[[Page 42684]]

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.
    47. 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 (defined below) 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.
    48. Contract owners with interests in the subaccounts of each 
Replaced Fund (individually, an ``Affected Contract Owner'' and, 
collectively, ``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 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.
    49. All Affected Contract Owners were notified of this Application 
by means of supplements to the Contract prospectuses, shortly after the 
date of this Application. Among other information regarding the 
Substitutions, the supplements informed 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 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.
    50. 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 Affected 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.

Applicant's Legal Analysis

    1. Applicants represent that each of the prospectuses for the 
Contracts expressly discloses the reservation of the Companies 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.
    2. Registrants state that 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.
    3. 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.
    4. 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. 
The number of available subaccounts varies from

[[Page 42685]]

Contract to Contract, but the average number of available subaccounts 
in all Contracts is approximately 67 and the smallest number of 
available subaccounts in any one Contract after the Substitutions is 
22, the same number of available subaccounts as before the 
Substitutions.
    5. 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 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.
    6. Applicants maintain 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.
    7. 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 value, 
cash value, accumulation value, account value or death benefit or in 
the dollar value of his or her investment in any of the Accounts.
    8. 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.
    9. 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.
    10. The boards of trustees or directors, as applicable, of each 
Replaced Fund and ING Investors Trust, ING Partners, Inc., and ING VP 
Balanced Portfolio, Inc. 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 
17a-7 and each Replaced Fund's and the Substitute Fund's procedures 
thereunder. Also no brokerage commission, fee, or other remuneration 
will be paid to any party in connection with the proposed transactions.
    11. 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, and ING VP Balanced Portfolio, 
Inc., except that the Substitutions may be effected in cash or in-kind.
    12. 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.
    13. Applicants submit that the Substitutions are consistent with 
the general purposes 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.

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:
    1. Each Substitute Fund has an investment objective and investment 
policies that are the same as, similar to or consistent with the 
investment objective and policies of the corresponding Replaced Fund, 
so that the objective of the Affected Contract Owners can continue to 
be met.
    2. For two years following the implementation of the Substitutions 
described herein, the net annual expenses of each Substitute Fund will 
not exceed the net annual expenses of the corresponding Replaced Fund 
immediately preceding the Substitutions except for the ING Pioneer Fund 
Portfolio where Directed Services, Inc. has agreed to a permanent 
expense cap on management fees and other expenses so that beginning on 
the

[[Page 42686]]

effective date of the Substitutions total net annual expenses for the 
Class I shares will never exceed 0.70%. To achieve these limitations, 
Directed Services, Inc., ING Investments, LLC and ING Life, as 
applicable, will waive fees or reimburse the appropriate Substitute 
Fund in certain amounts to maintain expenses at or below the limit. Any 
adjustments or reimbursements will be made at least on a quarterly 
basis. In addition, the Companies will not increase the Contract fees 
and charges, including asset based charges such as mortality and 
expense risk charges deducted from the subaccounts that would otherwise 
be assessed under the terms of the Contracts for a period of at least 
two years following the Substitutions.
    3. Affected Contract Owners may reallocate amounts from any of the 
Replaced Funds without incurring a reallocation charge or limiting 
their number of future reallocations, or withdraw amounts under any 
affected Contract or otherwise terminate their interest therein at any 
time prior to the Effective Date and for a period of at least 30 days 
following the Effective Date in accordance with the terms and 
conditions of such Contract. Any such reallocation will not count as a 
transfer when imposing any applicable restriction or limit under the 
Contract on transfers.
    4. The Substitutions will be effected at the net asset value of the 
respective shares in conformity with Section 22(c) of the 1940 Act and 
Rule 22c-1 thereunder, without the imposition of any transfer or 
similar charge by Applicants.
    5. The Substitutions will take place at relative net asset value 
without change in the amount or value of any Contract held by Affected 
Contract Owners. Affected Contract Owners will not incur any fees or 
charges as a result of the Substitutions, nor will their rights or the 
obligations of the Companies under such Contracts be altered in any 
way. In addition, the Companies will not increase the Contract fees and 
charges currently being assessed under the Contracts for a period of at 
least two years following the Substitutions.
    6. The Substitutions will be effected so that the investment of 
securities will be consistent with the investment objectives, policies 
and diversification requirements of the relevant Substitute Fund. No 
brokerage commissions, fees or other remuneration will be paid by any 
Replaced Fund or the corresponding Substitute Fund or Affected Contract 
Owners in connection with the Substitutions.
    7. The Substitutions will not alter in any way the annuity, life or 
tax benefits afforded under the Contracts held by any Affected Contract 
Owner.
    8. The Companies will send to their Affected Contract Owners within 
five (5) business days of the Substitutions a written Post-Substitution 
Confirmation which will include the before and after account values 
(which will not have changed as a result of the Substitutions) and 
detail the transactions effected on behalf of the respective Affected 
Contract Owner with regard to the Substitutions. With the Post-
Substitution Confirmations the Companies will remind Affected Contract 
Owners that they may reallocate amounts from any of the Replaced Funds 
without incurring a reallocation charge or limiting their number of 
future reallocations for a period of at least 30 days following the 
Effective Date in accordance with the terms and conditions of their 
Contract.
    9. Under the manager-of-managers relief granted to the ING 
Investors Trust, ING Partners and relied upon by certain of the other 
ING funds, a vote of the shareholders is not necessary to change a sub-
adviser, except for changes involving an affiliated sub-adviser. 
Notwithstanding this, after the Effective Date of the Substitutions the 
Applicants agree not to change a Substitute Fund's sub-adviser without 
first obtaining shareholder approval of either: (a) The sub-adviser 
change or (b) the Applicants' continued ability to rely on their 
manager-of-managers relief.
    10. 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.
    11. The Commission shall have issued an order: (a) Approving the 
Substitutions under Section 26(c) of the 1940 Act; and (b) 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.
    12. 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.
    13. Each Affected Contract Owner will have been sent a copy of: (a) 
A Contract prospectus supplement informing shareholders of this 
Application; (b) a prospectus for the appropriate Substitute Fund; and 
(c) 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 for 30 days thereafter, 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.
    14. The Companies shall have satisfied themselves, that: (a) The 
Contracts allow the substitution of investment company shares in the 
manner contemplated by the Substitutions and related transactions 
described herein; (b) the transactions can be consummated as described 
in this Application under applicable insurance laws; and (c) any 
regulatory requirements in each jurisdiction where the Contracts are 
qualified for sales have been complied with to the extent necessary to 
complete the transactions.
    15. The Shareholder Services Fee of the Class S shares of the ING 
FMR Diversified Mid Cap Portfolio, the ING Legg Mason Value Portfolio, 
the ING Oppenheimer Main Street Portfolio and the ING Pioneer Fund 
Portfolio will be permanently capped at .25%.

Conclusion

    Applicants assert that for the reasons summarized above the 
proposed substitutions and related transactions 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.
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6-11978 Filed 7-26-06; 8:45 am]

BILLING CODE 8010-01-P
