[Federal Register Volume 84, Number 194 (Monday, October 7, 2019)]
[Notices]
[Pages 53482-53487]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-21811]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 33654; File No. 812-15033]


Mutual of America Life Insurance Company, et al.

October 2, 2019.
Agency: Securities and Exchange Commission (``Commission'').

Action: Notice.

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    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 ``Act'') and an order of exemption 
pursuant to section 17(b) of the Act from section 17(a) of the Act.

Applicants: Mutual of America Life Insurance Company (``Mutual of 
America''), Wilton Reassurance Life Company of New York (``Wilton,'' 
and together with Mutual of America, the ``Companies''), Mutual of 
America Separate Account No. 2, Mutual of America Separate Account No. 
3, American Separate Account No. 2, and American Separate Account No. 3 
(the ``Separate Accounts,'' and together with the Companies, the 
``Section 26 Applicants''); and Mutual of America Variable Insurance 
Portfolios, Inc. (``Investment Corporation II'') and Mutual of America 
Capital Management LLC (the ``Adviser,'' and collectively with 
Investment Corporation II and the Section 26 Applicants, the ``Section 
17 Applicants'').

Summary of Application The Section 26 Applicants seek an order pursuant 
to section 26(c) of the Act, approving the substitution of shares 
issued by certain investment portfolios (the ``Existing Portfolios'') 
of Mutual of America Investment Corporation (``Investment Corporation 
I'') for shares of certain investment portfolios of the Investment 
Corporation II (the ``Replacement Portfolios''), held by the Separate 
Accounts to support certain variable annuity insurance contracts 
(``Non-Qualified Annuity Contracts'') and variable life insurance 
contracts (the ``Life Insurance Contracts'').\1\ The Section 17 
Applicants seek an order pursuant to section 17(b) of the Act exempting 
them from section 17(a) of the Act to the extent necessary to permit 
them to engage in certain in-kind transactions.
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    \1\ The variable annuity contracts that are issued in connection 
with retirement plans or individual retirement annuities under the 
Code (other than the individual retirement annuities issued by 
American Separate Account No. 2) are referred to herein as the 
``Qualified Annuity Contracts.'' The Non-Qualified Annuity 
Contracts, the Life Insurance Contracts, and the Qualified Annuity 
Contracts are collectively referred to herein as the ``Contracts.''

Filing Dates: The application was filed on May 15, 2019 and amended on 
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August 20, 2019 and September 27, 2019.

Hearing or Notification of Hearing: An order granting the requested 
relief will be issued unless the Commission orders a hearing. 
Interested persons may request a hearing by writing to the 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 October 28, 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, Securities and Exchange Commission, 100 F Street 
NE, Washington, DC 20549-1090. Applicants: Mutual of America Life 
Insurance Company, 320 Park Avenue, New York, New York 10022.

FOR FURTHER INFORMATION CONTACT: Hae-Sung Lee, Senior Counsel, at (202) 
551-7345, or Trace W. Rakestraw, Branch Chief at (202) 551-6825 
(Division of

[[Page 53483]]

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. Mutual of America is a mutual life insurance company organized 
under the laws of the state of New York and is authorized to transact 
its business in 50 states and the District of Columbia.
    2. Wilton is a life insurance company organized under New York law 
and is authorized to transact the business of life insurance, including 
annuities, in all 50 states, the Virgin Islands, and the District of 
Columbia. Wilton was a wholly-owned subsidiary of a holding company 
that was, in turn, 100% owned by Mutual of America. Mutual of America 
sold the holding company that owned Wilton but retained full authority 
and responsibility to take all actions in regard to American Separate 
Account No. 2 and American Separate Account No. 3, under an agreement 
with the holding company, and assumptively reinsured the variable 
contracts offered through those accounts.
    3. Each Separate Account meets the definition of ``separate 
account,'' as defined in section 2(a)(37) of the Act and rule 0-1(e) 
thereunder. The Separate Accounts are registered with the Commission 
under the Act as unit investment trusts. The assets of the Separate 
Accounts support the Contracts and interests in the Separate Accounts 
offered through such Contracts. The Companies are the legal owners of 
the assets in their respective Separate Accounts. The Separate Accounts 
are segmented into subaccounts, and each subaccount invests in an 
underlying registered open-end management investment company or series 
thereof.
    4. The Contracts are individual and group flexible premium variable 
annuity and variable life insurance contracts. Each Contract is 
registered under the Securities Act of 1933, as amended (the ``1933 
Act'') on Form N-4 or Form N-6 (or, in the case of the variable life 
insurance contract supported by American Separate Account No. 3, on 
Form S-6). Each Contract has particular fees, charges, and investment 
options, as described in the Contracts' respective prospectuses.
    5. As set forth under each Contract, as well as in the prospectus 
for each Contract, the Companies reserve the right to substitute shares 
of the underlying fund for shares of another underlying fund. The 
substitutions will be performed only for the Non-Qualified Annuity 
Contracts and the Life Insurance Contracts. The substitutions will not 
affect the Qualified Annuity Contracts.
    6. The Companies, on their own behalf and on behalf of their 
Separate Accounts, propose to exercise their contractual rights to 
substitute underlying funds currently available under the Contracts for 
different underlying funds (``Substitutions'' or each, a 
``Substitution''), as shown in the table below:

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        Substitution No.             Existing portfolio                     Replacement portfolio
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1...............................  Equity Index Fund.......  Equity Index Portfolio.
2...............................  All America Fund........  All America Portfolio.
3...............................  Small Cap Value Fund....  Small Cap Value Portfolio.
4...............................  Small Cap Growth Fund...  Small Cap Growth Portfolio.
5...............................  Small Cap Equity Index    Small Cap Equity Index Portfolio.
                                   Fund.
6...............................  Mid Cap Value Fund......  Mid Cap Value Portfolio.
7...............................  Mid-Cap Equity Index      Mid-Cap Equity Index Portfolio.
                                   Fund.
8...............................  Composite Fund..........  Moderate Allocation Portfolio.
9...............................  International Fund......  International Portfolio.
10..............................  Money Market Fund.......  Money Market Portfolio.
11..............................  Mid-Term Bond Fund......  Mid-Term Bond Portfolio.
12..............................  Bond Fund...............  Bond Portfolio.
13..............................  Retirement Income Fund..  Retirement Income Portfolio.
14..............................  2010 Retirement Fund....  2010 Retirement Portfolio.
15..............................  2015 Retirement Fund....  2015 Retirement Portfolio.
16..............................  2020 Retirement Fund....  2020 Retirement Portfolio.
17..............................  2025 Retirement Fund....  2025 Retirement Portfolio.
18..............................  2030 Retirement Fund....  2030 Retirement Portfolio.
19..............................  2035 Retirement Fund....  2035 Retirement Portfolio.
20..............................  2040 Retirement Fund....  2040 Retirement Portfolio.
21..............................  2045 Retirement Fund....  2045 Retirement Portfolio.
22..............................  2050 Retirement Fund....  2050 Retirement Portfolio.
23..............................  2055 Retirement Fund....  2055 Retirement Portfolio.
24..............................  2060 Retirement Fund....  2060 Retirement Portfolio.
25..............................  Conservative Allocation   Conservative Allocation Portfolio.
                                   Fund.
26..............................  Moderate Allocation Fund  Moderate Allocation Portfolio.
27..............................  Aggressive Allocation     Aggressive Allocation Portfolio.
                                   Fund.
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    7. The Existing Portfolios are series of Investment Corporation I, 
a Maryland corporation registered as an open-end management investment 
company under the Act (File No. 811-05084) and whose shares are 
registered under the 1933 Act (File No. 033-06486). Investment 
Corporation I issues separate classes (or series) of shares, each of 
which represents a separate portfolio of investments. There are 
currently 27 series of Investment Corporation I; they are the Existing 
Portfolios. Investment Corporation I intends to begin offering shares 
of its series directly to the general public through the retail market.
    8. The Replacement Portfolios are series of Investment Corporation 
II, a Maryland corporation. On June 13, 2019, Investment Corporation II 
filed a new registration statement on Form N-1A to register as an open-
end management investment company under the Act (File No. 811-23449) 
and to register shares of the Replacement Portfolios under the 1933 Act 
(File No. 333-232095). There will be 26 series of

[[Page 53484]]

Investment Corporation II; they are the Replacement Portfolios. 
Investment Corporation II was formed for the purpose of performing the 
Substitutions. However, new series of Investment Corporation II may be 
established in the future, and the series of Investment Corporation II 
may be made available as investment allocation options under variable 
insurance contracts of the Companies other than the Non-Qualified 
Annuity Contracts and the Life Insurance Contracts.
    9. The Adviser serves as the investment adviser for the Existing 
Portfolios and the Replacement Portfolios. The Adviser is a Delaware 
limited liability company that is registered as an investment adviser 
under the Investment Advisers Act of 1940. A sub-adviser has not been 
engaged to manage any of the Portfolios.
    10. Applicants state that the primary purpose of the Substitutions 
is to preserve the favorable tax treatment of the Non-Qualified Annuity 
Contracts and the Life Insurance Contracts that are currently supported 
by the Existing Portfolios. With exception of Substitution No. 8, each 
Existing Portfolio and its corresponding Replacement Portfolio have 
identical investment objectives, strategies, and risks and 
substantially identical fee structures (with different expense ratios 
due to differences in net assets). With respect to Substitution No. 8, 
the Existing Portfolio and its corresponding Replacement Portfolio have 
substantially similar objectives, strategies, and risks, and the 
Replacement Portfolio has a lower expense ratio. The Portfolios are 
advised by the same Adviser and share a common board of directors. As 
such, the Substitutions will permit owners of the Non-Qualified Annuity 
Contracts (``Non-Qualified Annuity Contract Owners'') and owners of the 
Life Insurance Contracts (``Life Insurance Contract Owners'') to 
maintain the favorable tax treatment of their Non-Qualified Annuity and 
Life Insurance Contracts and continue their investments in 
substantially identical underlying funds (or a substantially similar 
underlying fund with respect to Substitution No. 8).
    11. In order to preserve that favorable tax treatment, Section 26 
Applicants propose to reallocate contract values attributable to the 
Non-Qualified Annuity and Life Insurance Contracts from the Existing 
Portfolios to the Replacement Portfolios. Applicants represent that the 
Substitutions will preserve the favorable tax treatment of the Non-
Qualified Annuity and Life Insurance Contracts because the Replacement 
Portfolios will be offered only under variable annuity and life 
insurance contracts. The Replacement Portfolios will not be sold 
directly to the general public through the retail market.
    12. Mutual of America will cause the Adviser to enter into a 
written contract with Investment Corporation II whereby, for a period 
of two years following the date of substitution for each Substitution 
(the ``Substitution Date''), the Adviser will, at least as frequently 
as the last business day of each fiscal quarter, reimburse the expenses 
of the Replacement Portfolio to the extent that the net annual 
operating expenses of the Replacement Portfolio (after taking into 
account any other fee waivers or expense reimbursements) for such 
period exceed, on an annualized basis, the net annual operating 
expenses of the Existing Portfolio for the most recent fiscal year 
preceding the date of the application (the ``Expense Caps''). Any 
amounts waived or reimbursed by the Adviser will not be subject to 
recoupment rights. Any Expense Cap that applies to a Replacement 
Portfolio as a condition of this application is separate and apart from 
any other contractual expense reimbursement agreement between 
Investment Corporation II and the Adviser. To the extent that an 
Expense Cap caps a Replacement Portfolio's net annual operating 
expenses at a lower percentage of net assets than any other contractual 
expense reimbursement agreement between Investment Corporation II and 
the Adviser, such other contractual expense reimbursement agreement 
will have no practical impact on the Replacement Portfolio's net annual 
operating expenses due to the operation of the Expense Cap. In 
addition, for each Substitution, the Section 26 Applicants will not 
increase the Contract fees and charges that would otherwise be assessed 
under the terms of the Contracts for the Non-Qualified Annuity and Life 
Insurance Contract Owners for a period of at least two years following 
the Substitution Date.
    13. Applicants represent that as of the Substitution Date, the 
Separate Accounts will redeem shares of the applicable Existing 
Portfolios for cash and/or in-kind. Redemption requests and purchase 
orders will be placed simultaneously so that the Non-Qualified Annuity 
and Life Insurance Contract values will remain fully invested at all 
times.
    14. Each Substitution will be effected at the relative net asset 
values of the respective shares of the Replacement Portfolios in 
conformity with section 22(c) of the Act and rule 22c-1 thereunder 
without the imposition of any transfer or similar charges by the 
Section 26 Applicants. The Substitutions will be effected without 
change in the amount or value of any Non-Qualified Annuity and Life 
Insurance Contracts.\2\
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    \2\ The Section 26 Applicants note that, because the 
Substitutions will occur at relative net asset value, and the fees 
and charges under the Non-Qualified Annuity and Life Insurance 
Contracts will not change as a result of the Substitutions, the 
benefits offered by the guarantees under the Contracts will be the 
same immediately before and after the Substitutions. What effect the 
Substitutions may have on the value of the benefits offered by the 
Contract guarantees would depend, among other things, on the 
relative future performance of each Existing Portfolio and 
Replacement Portfolio, which the Section 26 Applicants cannot 
predict. Nevertheless, the Section 26 Applicants note that at the 
time of the Substitutions, the Contracts will offer a comparable 
variety of investment options with as broad a range of risk/return 
characteristics.
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    15. Non-Qualified Annuity and Life Insurance Contract Owners will 
not incur any fees or charges as a result of the Substitutions. The 
obligations of the Section 26 Applicants, and the rights of the Non-
Qualified Annuity and Life Insurance Contract Owners, under the 
Contracts will not be altered in any way. The Companies and/or their 
affiliates (other than Investment Corporation II) 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 paid by the Non-Qualified 
Annuity and Life Insurance Contract Owners to effect the Substitutions. 
The Substitutions will not cause the Contract fees and charges 
currently being paid by Non-Qualified Annuity and Life Insurance 
Contract Owners to be greater after any Substitution than before the 
Substitution. In addition, the Substitutions will in no way alter the 
tax treatment of affected Contract owners in connection with their 
Contracts, and no tax liability will arise for Contract owners as a 
result of the Substitutions.
    16. From the date of the Pre-Substitution Notice (defined below) 
through 30 days following the Substitution Date, Non-Qualified Annuity 
and Life Insurance Contract Owners may make at least one transfer of 
Contract value from the subaccount investing in an Existing Portfolio 
(before the Substitution) or the Replacement Portfolio (after the 
Substitution) to any other available subaccount under the Contract 
without charge and without imposing any transfer limitations. Further, 
on a Substitution Date, values

[[Page 53485]]

under Non-Qualified Annuity and Life Insurance Contracts attributable 
to investments in the applicable Existing Portfolio will be transferred 
to the corresponding Replacement Portfolio without charge and without 
being subject to any transfer limitations. Moreover, for each 
Substitution, except with respect to frequent trading restrictions 
described in the Contracts' prospectuses, the Companies will not 
exercise any rights reserved under their policies to impose 
restrictions on transfers between the subaccounts for a period 
beginning at least 30 days before the Substitution Date through at 
least 30 days following the Substitution Date.
    17. For each Substitution, at least 30 days prior to the 
Substitution Date, Non-Qualified Annuity and Life Insurance Contract 
Owners will be notified via prospectus supplements (i) that the Section 
26 Applicants received or expect to receive Commission approval of the 
Substitution and (ii) of the anticipated Substitution Date (the ``Pre-
Substitution Notice''). Pre-Substitution Notices sent to Non-Qualified 
Annuity and Life Insurance Contract Owners (including a subset of 
contract owners that own inactive contracts (``Inactive Contract 
Owners'')) will be filed with the Commission pursuant to rule 497(e) 
under the 1933 Act. The Pre-Substitution Notice will also advise Non-
Qualified Annuity and Life Insurance Contract Owners of their pre- and 
post-Substitution rights. For each Substitution, the Section 26 
Applicants will also deliver to affected Non-Qualified Annuity and Life 
Insurance Contract Owners (including Inactive Contract Owners), at 
least 30 days before the Substitution Date, a prospectus for the 
Replacement Portfolio.
    18. In addition, within five business days after the Substitution 
Date, Non-Qualified Annuity and Life Insurance Contract Owners 
(including Inactive Contract Owners) whose assets were allocated to the 
Replacement Portfolio as part of the Substitution will be sent a 
written notice (a ``Confirmation'') informing them that the 
Substitution was carried out as previously notified. The Confirmation 
will also restate the information set forth in the Pre-Substitution 
Notice. The Confirmation will also reflect the values of the Non-
Qualified Annuity or Life Insurance Contract Owner's positions in the 
Existing Portfolio before the Substitution and the Replacement 
Portfolio after the Substitution.

Legal Analysis

    1. The Section 26 Applicants request that the Commission issue an 
order pursuant to section 26(c) of the Act approving the Substitutions. 
Section 26(c) 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 from the Commission if the evidence establishes that 
the substitution is consistent with the protection of investors and the 
purposes of the Act.
    2. The Section 26 Applicants submit that the Substitutions meet the 
standards set forth in section 26(c) and that, if implemented, the 
Substitutions would not raise any of the concerns that Congress 
intended to address when the Act was amended to include this provision. 
Applicants state that they are seeking the Substitutions to preserve 
the favorable tax treatment of the Non-Qualified Annuity Contracts and 
the Life Insurance Contracts. A key feature of annuity and life 
insurance contracts is the deferral of federal income taxes on the 
accumulated earnings within such contracts if fund shares supporting 
such contracts are not offered directly to the general public. The 
Existing Portfolios are presently sold in a manner that facilitates the 
deferral of federal income taxes on the accumulated earnings under the 
Non-Qualified Annuity and Life Insurance Contracts. However, in an 
effort to expand the markets to which the Existing Portfolios are 
offered, Investment Corporation I intends to begin offering shares of 
the Existing Portfolios directly to the general public through the 
retail market. While this initiative will generally benefit the 
Existing Portfolios, and will not affect the tax treatment of the 
Qualified Annuity Contracts, it would result in the Non-Qualified 
Annuity and Life Insurance Contracts no longer receiving tax deferral 
unless the Substitutions are performed.
    3. Companies have reserved the right under the Contracts to 
substitute shares of another underlying fund for one of the current 
funds offered as an investment option under the Contracts. The 
Contracts and the Contracts' prospectuses disclose this right.
    4. The Section 26 Applicants submit that the Substitutions are not 
of the type that section 26 was designed to prevent because they will 
not result in costly forced redemptions, nor will they affect any other 
aspects of the Contracts. In the current situation, Contract owners are 
contractually provided investment discretion during the accumulation 
phase of the Contracts to allocate and reallocate their Contract values 
among the investment options available under the Contracts. 
Accordingly, after the Substitutions, each Non-Qualified Annuity and 
Life Insurance Contract Owner may exercise his or her own judgment as 
to the most appropriate investment alternative available under the 
Contract. Moreover, for each Substitution, the Section 26 Applicants 
will offer Non-Qualified Annuity and Life Insurance Contract Owners the 
opportunity to transfer amounts out of the affected subaccounts which, 
as with all transfers under the Contracts, will be without any cost or 
other penalty (other than those necessary to implement policies and 
procedures designed to detect and deter disruptive transfers) for a 
period beginning on the date of the Pre-Substitution Notice (which 
supplement will be delivered to the Non-Qualified Annuity and Life 
Insurance Contract Owners at least 30 days before the Substitution 
Date) and ending no earlier than 30 days after the Substitution Date. 
The Substitutions, therefore, will not result in the type of forced 
redemption that section 26(c) was designed to prevent.
    5. The Substitutions are also unlike the type of substitution that 
section 26(c) was designed to prevent in that the Substitutions have no 
impact on other aspects of the Contracts. Specifically, the 
Substitutions will not affect the type of benefits offered by the 
Companies under the Contracts, or numerous other rights and privileges 
associated with the Contracts.
    6. The Section 17 Applicants request an order under section 17(b) 
exempting them from the provisions of section 17(a) to the extent 
necessary to permit the Section 17 Applicants to carry out some or all 
of the Substitutions. The Section 17 Applicants state that because the 
Substitutions may be effected, in whole or in part, by means of in-kind 
redemptions and purchases, the Substitutions may be deemed to involve 
one or more purchases or sales of securities or property between 
affiliated persons.
    7. Section 17(a)(1) of the Act, in relevant part, prohibits any 
affiliated person of a registered investment company, or any affiliated 
person of such person, acting as principal, from knowingly selling any 
security or other property to that company. Section 17(a)(2) of the Act 
generally prohibits the persons described above, acting as principals, 
from knowingly purchasing any security or other property from the 
registered investment company.
    8. The Section 17 Applicants state that the proposed transactions 
may involve a transfer of portfolio securities by the Existing 
Portfolios to the Separate

[[Page 53486]]

Accounts. Immediately thereafter, the Separate Accounts would purchase 
shares of the Replacement Portfolios with the portfolio securities 
received from the Existing Portfolios. Accordingly, the Section 17 
Applicants provide that to the extent that the Companies, the Separate 
Accounts, the Adviser, Investment Corporation II, or the Replacement 
Portfolios are deemed to be affiliated persons of one another under 
section 2(a)(3) or section 2(a)(9) of the Act, it is conceivable that 
this aspect of the Substitutions could be viewed as being prohibited by 
section 17(a). Accordingly, the Section 17 Applicants have determined 
to seek relief from section 17(a).
    9. The Section 17 Applicants submit that the terms of the proposed 
in-kind purchases of shares of the Replacement Portfolios by the 
Separate Accounts, including the consideration to be paid and received, 
as described in the application, are reasonable and fair and do not 
involve overreaching on the part of any person concerned. The Section 
17 Applicants also submit that the terms of the proposed in-kind 
transactions, including the consideration to be paid by each Existing 
Portfolio and received by each Replacement Portfolio involved, are 
reasonable, fair, and do not involve overreaching principally because 
the transactions will conform with all but one of the conditions 
enumerated in rule 17a-7 under the Act.
    10. The proposed transactions will take place at relative net asset 
value in conformity with the requirements of section 22(c) of the Act 
and rule 22c-1 thereunder without the imposition of any transfer or 
similar charges by the Section 26 Applicants. The Substitutions will be 
effected without change in the amount or value of any Non-Qualified 
Annuity Contract or any Life Insurance Contract. The Substitutions will 
in no way alter the tax treatment of Non-Qualified Annuity and Life 
Insurance Contract Owners in connection with their Contracts, and no 
tax liability will arise for Non-Qualified Annuity and Life Insurance 
Contract Owners as a result of the Substitutions. The fees and charges 
under the Non-Qualified Annuity and Life Insurance Contracts will not 
increase because of the Substitutions. Even though the Company, the 
Separate Accounts, the Adviser, Investment Corporation II, and the 
Replacement Portfolios may not rely on rule 17a-7, the Section 17 
Applicants believe that the rule's conditions outline the type of 
safeguards that result in transactions that are fair and reasonable to 
registered investment company participants and preclude overreaching in 
connection with an investment company by its affiliated persons.
    11. The Section 17 Applicants also submit that the proposed in-kind 
purchases by the Separate Accounts are consistent with the investment 
policies and restrictions of the Section 17 Applicants and the 
Replacement Portfolio. Finally, the Section 17 Applicants submit that 
the Substitutions are consistent with the general purposes of the Act.

Applicants' Conditions

    Applicants agree that any order granting the requested relief will 
be subject to the following conditions:
    1. The Substitutions will not be effected unless the Companies 
determine that: (i) The Contracts allow the substitution of shares of 
registered open-end investment companies in the manner contemplated by 
the application; (ii) the Substitutions can be consummated as described 
in the application under applicable insurance laws; and (iii) any 
regulatory requirements in each jurisdiction where the Contracts are 
qualified for sale have been complied with to the extent necessary to 
complete the Substitutions.
    2. The Companies or an affiliate thereof (other than Investment 
Corporation II) 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 paid by Non-Qualified Annuity and Life Insurance Contract Owners to 
effect the Substitutions. The Substitutions will not cause the Contract 
fees and charges currently being paid by Non-Qualified Annuity and Life 
Insurance Contract Owners to be greater after the Substitution than 
before the Substitution.
    3. The Substitutions will be effected at the relative net asset 
values of the respective shares of the Replacement Portfolios in 
conformity with section 22(c) of the Act and rule 22c-1 thereunder 
without the imposition of any transfer or similar charges by the 
Applicants. The Substitutions will be effected without change in the 
amount or value of any Non-Qualified Annuity Contract or Life Insurance 
Contract.
    4. The Substitutions will in no way alter the tax treatment of Non-
Qualified Annuity and Life Insurance Contract Owners in connection with 
their Contracts, and no tax liability will arise for Non-Qualified 
Annuity and Life Insurance Contract Owners as a result of the 
Substitutions.
    5. The obligations of the Section 26 Applicants, and the rights of 
the Non-Qualified Annuity and Life Insurance Contract Owners, under the 
Non-Qualified Annuity and Life Insurance Contracts will not be altered 
in any way.
    6. For each Substitution, Non-Qualified Annuity and Life Insurance 
Contract Owners will be permitted to transfer Contract value from the 
subaccount investing in the Existing Portfolio (before the Substitution 
Date) or the Replacement Portfolio (after the Substitution Date) to any 
other available subaccount without charge for a period beginning at 
least 30 days before the Substitution Date through at least 30 days 
following the Substitution Date. Except with respect to any frequent 
trading restrictions described in the relevant prospectus, the 
Applicants will not exercise any rights reserved under the Contracts to 
impose restrictions on transfers between the subaccounts, including 
limitations on the future number of transfers, for a period beginning 
at least 30 days before the Substitution Date through at least 30 days 
following the Substitution Date.
    7. For each Substitution, all Non-Qualified Annuity and Life 
Insurance Contract Owners will be notified via the Pre-Substitution 
Notice, at least 30 days before the Substitution Date, about: (i) The 
intended Substitution of the Existing Portfolio with the Replacement 
Portfolio; (ii) the intended Substitution Date; and (iii) information 
with respect to transfers as set forth in Condition 6 above. In 
addition, for each Substitution, the Section 26 Applicants will also 
deliver to Non-Qualified Annuity and Life Insurance Contract Owners, at 
least 30 days before the Substitution Date, a prospectus for the 
applicable Replacement Portfolio.
    8. For each Substitution, the Section 26 Applicants will deliver to 
each Non-Qualified Annuity and Life Insurance Contract Owner within 
five business days after the Substitution Date, a written confirmation 
which will include: (i) A confirmation that the Substitution was 
carried out as previously notified; (ii) a restatement of the 
information set forth in the Pre-Substitution Notice; and (iii) values 
of the Non-Qualified Annuity and Life Insurance Contract Owner's 
positions in the Existing Portfolio before the Substitution and the 
Replacement Portfolio after the Substitution.
    9. Mutual of America will cause the Adviser, as the investment 
adviser of the Replacement Portfolios, to enter into a written contract 
with Investment Corporation II whereby, for a period of two years 
following the Substitution Date for each Substitution, the Adviser 
will, at least as frequently as the last business day of each fiscal 
quarter,

[[Page 53487]]

reimburse the expenses of the Replacement Portfolio to the extent that 
the net annual operating expenses of the Replacement Portfolio (i.e., 
after taking into account any other fee waivers or expense 
reimbursements) for such period exceed, on an annualized basis, the net 
annual operating expenses of the Existing Portfolio for the most recent 
fiscal year preceding the date of the application. Any amounts waived 
or reimbursed by the Adviser will not be subject to recoupment rights. 
In addition, for each Substitution, the Section 26 Applicants will not 
increase the Contract fees and charges that would otherwise be assessed 
under the terms of the Contracts for the Non-Qualified Annuity and Life 
Insurance Contract Owners for a period of at least two years following 
the Substitution Date.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-21811 Filed 10-4-19; 8:45 am]
BILLING CODE 8011-01-P


