[Federal Register Volume 84, Number 139 (Friday, July 19, 2019)]
[Notices]
[Pages 34984-34987]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-15335]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 33554; File No. 812-14856]


Voya Retirement Insurance and Annuity Company et al; Notice of 
Application

July 15, 2019.
AGENCY: Securities and Exchange Commission (``SEC'' or ``Commission'').

ACTION: Notice. 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 (the ``1940 Act'').

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Applicants: ReliaStar Life Insurance Company of New York (``ReliaStar 
NY''), Voya Insurance and Annuity Company (``Voya Insurance''), and 
Voya Retirement Insurance and Annuity Company (``Voya Retirement'') 
(each a ``Company'' and together, the ``Companies''), ReliaStar NY 
Separate Account NY-B (``ReliaStar NY NY-B''), Separate Account B of 
Voya Insurance (``Voya Insurance B''), Separate Account EQ of Voya 
Insurance (``Voya Insurance EQ''), Separate Account U of Voya Insurance 
(``Voya Insurance U''), Voya Retirement Variable Annuity Account B 
(``Voya Retirement B''), and Voya Retirement Variable Annuity Account I 
(``Voya Retirement I'') (each, an ``Account'' and together, the 
``Accounts''). The Companies and the Accounts are collectively referred 
to herein as the ``Applicants.''

Summary of Application: Applicants seek an order pursuant to section 
26(c) of the 1940 Act, approving the

[[Page 34985]]

substitution of shares issued by certain series of Voya Investors Trust 
and Voya Variable Portfolios, Inc. (the ``Replacement Funds'') for 
shares of certain series of Voya Investors Trust and Voya Partners, 
Inc., registered investment companies currently held by subaccounts of 
the Accounts (the ``Existing Funds''), to support certain variable 
annuity contracts (collectively, the ``Contracts'') issued by the 
Companies (the ``Substitutions'').

Filing Date: The application was filed on December 21, 2017, and was 
amended and restated on October 31, 2018, and March 15, 2019.

Hearing or Notification of Hearing: An order granting the application 
will be issued unless the Commission orders a hearing. Interested 
persons may request a hearing by writing to the Secretary of the 
Commission and serving the Applicants with a copy of the request, 
personally or by mail. Hearing requests should be received by the 
Commission by 5:30 p.m. on August 9, 2019 and should be accompanied by 
proof of service on the 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: J. Neil McMurdie, 
Esquire, Senior Counsel, Voya Insurance and Annuity Company, 1475 
Dunwoody Drive, West Chester, PA 19380 or Peter Scavongelli, Senior 
Counsel, Voya Financial Legal Services, One Orange Way, C2N, Windsor, 
CT 06095.

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

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained via the 
Commission's website 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. ReliaStar NY is a stock life insurance company which is 
incorporated under the laws of New York. Voya Insurance is an Iowa 
stock life insurance company. Voya Retirement is a stock life insurance 
company organized under the laws of Connecticut. ReliaStar NY is the 
depositor of ReliaStar NY NY-B. Voya Insurance is the depositor of Voya 
Insurance B, Voya Insurance EQ, and Separate Account U. Voya Retirement 
is the depositor of Variable Annuity Account B and Variable Annuity 
Account I. ReliaStar NY and Voya Retirement are indirect, wholly-owned 
subsidiaries of Voya Financial, Inc. (``Voya''). Voya Insurance is an 
indirect wholly-owned subsidiary of VA Capital Company LLC, (``VA 
Capital'') and a direct wholly-owned subsidiary of Venerable Holdings, 
Inc., which effective June 1, 2018, acquired Voya Insurance from Voya. 
VA Capital is an insurance holding company formed by affiliates of 
Apollo Global Management LLC and Athene Holding Ltd. Reverence Capital 
Partners, L.P., Crestview Advisors, L.L.C. and Voya are also investors 
in VA Capital.
    2. Each Account is a ``separate account'' as defined by rule 0-1(e) 
under the 1940 Act and each is registered under the 1940 Act as a unit 
investment trust. Each of the respective Accounts is used by the 
Company of which it is a part to support the Contracts that it issues. 
Each Account is divided into subaccounts, each of which invests 
exclusively in shares of an Existing Fund or another registered open-
end management investment company. The application sets forth the 
registration statement file numbers for the Contracts and the Accounts.
    3. The Contracts are issued as individual variable annuity 
contracts. Each of the prospectuses for the Contracts discloses that 
the issuing Company reserves the right, subject to Commission approval 
and compliance with applicable law, to substitute shares of another 
registered open-end management investment company for shares of a 
registered open-end management investment company held by a subaccount 
of an Account whenever the Company, in its judgment, determines that 
the investment in the registered open-end management investment company 
no longer suits the purpose of the Contract.
    4. The Replacement Funds are series of Voya Variable Portfolios, 
Inc. or Voya Investors Trust. Voya Variable Portfolios, Inc. is 
registered with the Commission under the 1940 Act as an open-end 
management investment company (File No. 811-05173). Shares of the 
series are registered under the Securities Act of 1933 (File No. 333-
05173). Voya Investors Trust is registered with the Commission under 
the 1940 Act as an open-end management investment company (File No. 
811-05629). Shares of the series are registered under the Securities 
Act of 1933 (File No. 033-23512).
    5. Voya Investments, LLC (``Voya Investments''), an Arizona limited 
liability company and registered investment adviser, has overall 
responsibility for the management of each series of the Voya Variable 
Portfolios, Inc. and Voya Investors Trust that is a Replacement Fund. 
Voya Investments delegates to a sub-adviser, Voya Investment Management 
Co. LLC, an affiliate, the responsibility for day-to-day management of 
the investments of each series that is a Replacement Fund, subject to 
Voya Investment's oversight.
    6. Applicants propose, as set forth below, to substitute shares of 
the Replacement Funds for shares of the Existing Funds:

------------------------------------------------------------------------
             Existing fund                       Replacement fund
------------------------------------------------------------------------
1. VY Baron Growth Portfolio--Class I,   Voya Russell Mid Cap Growth
 S.                                       Index Portfolio--Class I, S.
2. VY Columbia Contrarian Core           Voya U.S. Stock Index
 Portfolio--Class S.                      Portfolio--Class S.
3. VY Invesco Comstock Portfolio--Class  Voya Russell Large Cap Value
 I, S.                                    Index Portfolio--Class I, S.
4. VY T. Rowe Price Equity Income        Voya Russell Large Cap Value
 Portfolio--Class S, S2.                  Index Portfolio--Class I, S.
5. VY JPMorgan Small Cap Core Equity     Voya Russell Small Cap Index
 Portfolio--Class I, S, S2.               Portfolio--Class I, S.
6. VY T. Rowe Price Growth Equity        Voya Russell Large Cap Growth
 Portfolio--Class I, S.                   Index Portfolio--Class I, S.
------------------------------------------------------------------------

    7. Applicants state that by substituting unaffiliated funds with 
funds that are advised by affiliates of the Companies, the principal 
purposes of the Substitutions would, among other things: (1) Help 
implement the Companies' overall business plan to make the Contracts 
more efficient to administer and oversee; (2) allow the

[[Page 34986]]

Companies to reduce costs by consolidating the administration of the 
Replacement Funds with its other funds; and (3) allow the Companies to 
respond to expense, performance and management matters that they have 
identified in their due diligence review of the funds available through 
the Contracts.
    8. Applicants state that the investment objectives and investment 
strategies of each Replacement Fund are similar to those of the 
corresponding Existing Fund, or each Replacement Fund's underlying 
portfolio construction and investment results are similar to those of 
the Existing Fund, and therefore the fundamental investment objectives 
of those Contract Owners with interests in subaccounts of the Existing 
Funds will continue to be met after the Substitutions. Information for 
each Existing Fund and Replacement Fund, including investment 
objective, principal investment strategies, principal risks and 
comparative performance history, can be found in the application.
    9. Applicants state that at the time of the Substitutions the 
overall fees and expenses of each Replacement Fund will be less than 
those assessed by the corresponding Existing Fund and that for two 
years following the effective date of the Substitutions (``Effective 
Date''), the net annual expenses of each Replacement Fund will not 
exceed the net annual expenses of the corresponding Existing Fund as of 
that Fund's most recent fiscal year. The application sets forth the 
fees and expenses of each Existing Fund and its corresponding 
Replacement Fund in greater detail.
    11. Applicants represent that as of the Effective Date, shares of 
the Existing Funds will be redeemed for cash. The Companies, on behalf 
of each Existing Fund subaccount of each relevant Account, will 
simultaneously place a redemption request with each Existing Fund and a 
purchase order with the corresponding Replacement Fund so that the 
purchase of Replacement 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 Replacement 
Fund.
    12. 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 (as defined in the 
application) contract value, cash value, accumulation value, account 
value or death benefit or in dollar value of his or her investment in 
the applicable Accounts. No brokerage commissions, fees or other 
remuneration will be paid by either the Existing Funds or the 
Replacement Funds or by Affected Contract Owners in connection with the 
Substitutions.
    13. The 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. 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. Moreover, the 
Substitutions will not impose any tax liability on Affected Contract 
Owners.
    14. As described in the application, after notification of the 
Substitutions and for 30 days after the Effective Date, Affected 
Contract Owners may reallocate the subaccount value of an Existing Fund 
to any other investment option available under their Contract without 
incurring any administrative costs or allocation (transfer) charges.
    15. All Affected Contract Owners were notified of this application 
by means of supplements to the Contract prospectuses sent after the 
date the application was first filed with the Commission. Among other 
information regarding the Substitutions, the supplements informed 
Affected Contract Owners that beginning on the date of the supplements, 
the Companies will not exercise any rights reserved by them under the 
Contracts to impose restrictions or fees on transfers from an Existing 
Fund (other than restrictions related to frequent or disruptive 
transfers) during the period beginning at least 30 days before the 
Effective Date until at least 30 days after the Effective Date.
    16. Following the date the order requested by this application is 
issued, but at least 30 days before the Effective Date, Affected 
Contract Owners will be sent a ``Pre-Substitution Notice,'' consisting 
of a second supplement to the Contract prospectuses setting forth the 
intended Substitution of Existing Funds with Replacement Funds, the 
intended Effective Date and advising Affected Contract Owners of their 
right, if they so choose, at any time during the period beginning at 
least 30 days before the Effective Date through at least 30 days 
following the Effective Date, to reallocate or withdraw accumulated 
value in the Existing Fund or Replacement Fund subaccounts under their 
Contracts or otherwise terminate their interest therein in accordance 
with the terms and conditions of their Contracts. Beginning at least 30 
days before the Effective Date through at least 30 days after the 
Effective Date, the Companies will not exercise any right they may have 
under the Contracts to impose restrictions or fees on transfers from 
any Existing Fund or Replacement Fund under the Contracts (other than 
restrictions related to frequent or disruptive transfers). 
Additionally, all Affected Contract Owners will be sent prospectuses of 
the applicable Replacement Funds at least 30 days before the Effective 
Date.
    17. 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 each applicable 
Existing Fund have been redeemed and that the shares of the 
corresponding Replacement Fund have been substituted. In addition, the 
Post-Substitution Confirmation will show how the allocation of the 
Contract Owner's account value before and immediately following the 
Substitution has changed as a result of the Substitutions.

Legal Analysis

    1. Applicants request that the Commission issue an order pursuant 
to section 26(c) of the 1940 Act approving the Substitutions. Section 
26(c) of the 1940 Act prohibits any depositor or trustee of a unit 
investment trust that invests exclusively in the securities of a single 
issuer from substituting the securities 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 1940 Act.
    2. Applicants assert that the terms and conditions of the 
Substitutions meet the standards set forth in section 26(c) and assert 
that the replacement of an Existing Fund with the corresponding 
Replacement Fund is consistent with the protection of investors and the 
purposes fairly intended by the policy and provisions of the 1940 Act. 
As described in the application, at the time of the Substitutions, the 
overall fees and expenses of each Replacement Fund will be less than 
those of the corresponding Existing Fund and for two years following 
the Effective Date,

[[Page 34987]]

the net annual expenses of each Replacement Fund will not exceed the 
net annual expenses of the corresponding Existing Fund. Applicants 
further assert that each Replacement Fund has investment objectives and 
strategies that are similar to those of the corresponding Existing 
Fund. Accordingly, Applicants believe that the fundamental investment 
objectives of Affected Contract Owners will continue to be met after 
the Substitutions.
    3. Applicants also maintain that Affected Contract Owners will be 
better served by the Substitutions. Applicants anticipate that the 
substitution of an Existing Fund with the corresponding Replacement 
Fund will result in a Contract that is administered and managed more 
efficiently, and one that is more competitive with other variable 
products. The rights of Affected Contract Owners and the obligations of 
the Companies under the Contracts will not be altered by the 
Substitutions. Affected Contract Owners will not incur any additional 
tax liability or any additional fees and expenses as a result of the 
Substitutions.
    4. Each of the prospectuses for the Contracts discloses that the 
Companies reserve the right, subject to Commission approval and 
compliance with applicable law, to substitute shares of another 
registered open-end management investment company for shares of a 
registered open-end management investment company held by a subaccount 
of an Account.
    5. Applicants also assert that the Substitutions do not entail any 
of the abuses that section 26(c) was designed to prevent. Unlike a 
traditional unit investment trust 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 account values into other subaccounts. Moreover, the Contracts 
will offer Affected Contract Owners the opportunity to transfer amounts 
out of the affected subaccounts into any of the remaining subaccounts 
without cost or other disadvantage. The Substitution, therefore, will 
not result in the type of costly forced redemptions that section 26(c) 
was designed to prevent. Applicants also maintain that the 
Substitutions are unlike the type of substitutions which section 26(c) 
was designed to prevent in that by purchasing a Contract, Contract 
Owners select much more than a particular registered management open-
end investment company in which to invest their account values. They 
also select the specific type of death benefit and other optional 
benefits as well as other rights and privileges set forth in the 
Contracts.

Applicants' Conditions

    Applicants agree that any order of the Commission granting the 
requested relief will be subject to the following conditions:
    1. The Substitutions will not be effected unless the Companies 
determine that: (a) The Contracts allow the substitution of shares of 
registered open-end investment companies in the manner contemplated by 
the application; (b) the Substitutions can be consummated as described 
in the application under applicable insurance laws; and (c) 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 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 Contract Owners to 
effect the Substitutions.
    3. The Substitutions will be effected at the relative net asset 
values 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 charges by Applicants. The Substitutions will be 
effected without change in the amount or value of any Contracts held by 
Affected Contract Owners.
    4. 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 Affected Contract Owners as a result of the 
Substitutions.
    5. The rights or obligations of the Companies under the Contracts 
of Affected Contract Owners will not be altered in any way. The 
Substitutions will not adversely affect any riders under the Contracts.
    6. Affected Contract Owners will be permitted to make at least one 
transfer of Contract value from the subaccount investing in the 
Existing Fund (before the Effective Date) or the Replacement Fund 
(after the Effective Date) to any other available investment option 
under the Contract without charge for a period beginning at least 30 
days before the Effective Date through at least 30 days following the 
Effective Date. Except as described in any market timing/short-term 
trading provisions of the relevant prospectus, the Company will not 
exercise any right it may have under the Contract 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 Effective Date through at least 
30 days following the Effective Date.
    7. All Affected Contract Owners will be notified, at least 30 days 
before the Effective Date about: (a) The intended substitution of 
Existing Funds with the Replacement Funds; (b) the intended Effective 
Date; and (c) information with respect to transfers as set forth in 
Condition 6 above. In addition, the Companies will also deliver, at 
least 30 days before the Effective Date, a prospectus for each 
applicable Replacement Fund.
    8. Companies will deliver to each Affected Contract Owner within 
five (5) business days of the Effective 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-Substitution Notice; and (c) value of 
the Contract Owner's positions in each Existing Fund before the 
Substitution and the corresponding Replacement Fund after the 
Substitution.
    9. For two years following the Effective Date the net annual 
expenses of each Replacement Fund will not exceed the net annual 
expenses of the corresponding Existing Fund as of the Fund's most 
recent fiscal year. To achieve this limitation, the Replacement Fund's 
investment adviser will waive fees or reimburse the Replacement Fund in 
certain amounts to maintain expenses at or below the limit. Any 
adjustments 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 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 
Effective Date.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-15335 Filed 7-18-19; 8:45 am]
 BILLING CODE 8011-01-P


