Helena Lee Assistant General Counsel Direct Line: (310) 772-6259 Fax: (310) 772-6569 E-mail: hlee@sunamerica.com |
Via EDGAR and Electronic Mail
November 10, 2016
Kathryn M. Hinke
Attorney-Adviser
Disclosure Review and Accounting Office
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re: | Variable Separate Account (Registrant) |
American General Life Insurance Company (AGL or Depositor) |
Polaris Advisory Variable Annuity |
Initial Registration Statements on Form N-4 |
File Nos. 333-213338 and 811-03859 (Version A) |
FS Variable Separate Account (Registrant) |
The United States Life Insurance Company in the City of New York (USL or Depositor) |
Polaris Advisory Variable Annuity |
Initial Registration Statements on Form N-4 |
File Nos. 333-213339 and 811-08810 (Version A) |
Dear Ms. Hinke:
Thank you for your comments provided on October 25, 2016, regarding the initial Registration Statements on Form N-4 filed pursuant to Rule 485(a) on August 26, 2016, as referenced above. We have withdrawn Polaris Advisory Variable Annuity File Nos. 333-213341 and 811-03859 and File Nos. 333-213342 and 811-08810 (Version B) and the withdrawal will be accepted on EDGAR on Monday, November 14, 2016 due to the federal holiday tomorrow. We have considered your comments to Version A and are providing our responses below.
General
1. | Comment Please confirm that the date of the prospectus will be the same as or about the date of effectiveness. |
Response We confirm that the date of the prospectus will be the same as or about the date of effectiveness.
2. | Comment Please advise supplementally whether there are any types of guarantees or support agreements with third parties to support any of the Companys guarantees under the Contract or whether the Company will be solely responsible for payment of Contract benefits. |
Response We have no guarantee or support agreements with third parties to support any of the
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November 10, 2016
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Depositors guarantees under the Contracts. The Depositors will be solely responsible for the payment of Contract benefits.
3. | Comment Capitalized Terms: Please confirm that: (1) all capitalized terms are included in the glossary, (2) capitalized terms are defined when each term is introduced, or (3) the location of the terms definition is cross-referenced as the term is first introduced. See, e.g., Income Base, introduced on page 6, but is first defined on page 24. |
Response We have revised the prospectus to ensure that all capitalized terms are either included in the glossary, defined when each term is introduced, or the location of the terms definition is cross-referenced as the term is first introduced.
Prospectus
4. | Highlights (Page 4, Free Look) |
a. | Comment At the end of the first sentence, following the parenthetical, please consider specifying that a withdrawal charge will not be charged. |
Response Per our conversation, this product does not have withdrawal charge except for the Partial/Full Benefit Termination Charge. The Benefit Termination Charge will not be assessed for a free look.
5. | Highlights (Page 4, Free Look) |
a. | Comment The second sentence states, You will receive whatever your contract is worth on the day that we receive your request. Please specify whether this is true if the request is received after the close of the NYSE. See also, Free Look, p. 11. |
Response The contract owner will receive whatever their contract is worth on the day that we receive the request, even if received after the close of the NYSE.
6. | Maximum and Minimum Expense Examples (Page 8) |
a. | Comment The Example does not appear to be accurate based on the numbers in the fee table. Please confirm that the fee table and Example are complete and accurate. |
Response The fee table and expense examples will be complete and accurate on the pre-effective amendment.
7. | Maximum and Minimum Expense Examples (Page 8) |
a. | Comment In the first paragraph, please delete contract maintenance fee, as the fee is inapplicable here. |
Response We have deleted contract maintenance fee as requested.
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November 10, 2016
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8. | Maximum and Minimum Expense Examples (Page 8) |
a. | Comment Maximum Expense Examples: In the introductory paragraph on page 8, please add or Polaris Income Plus Daily after the optional Polaris Income Plus. as, according to the Fee Table (p. 6), the optional features initial annual fee rate and maximum annual fee rate for two covered persons is 1.35% and 2.70%, respectively. |
Response We have added or Polaris Income Plus Daily as requested.
9. | Transfers During the Accumulation Phase (Page 18) |
a. | Comment In the first paragraph, please change Internet to lower-case. It appears as lower-case in the second paragraph and is not a defined term. |
Response We have changed Internet to lower-case as requested.
10. | Transfers During the Accumulation Phase (Page 18) |
a. | Comment The second sentences states: We reserve the right to modify, suspend or terminate telephone, fax and/or internet transfer privileges at any time. If applicable, please disclose that notice will be provided prior to suspending the privilege(s). |
Response We have revised the disclosure to provide that the contract owner will be notified if we exercise that right as follows:
We reserve the right to modify, suspend or terminate telephone, fax and/or internet transfer privileges at any time and we will notify you prior to exercising the right of suspension.
11. | Transfers During the Accumulation Phase (Page 18) |
a. | Comment The first sentence of the subsections last paragraph states: There is no charge for your first 15 transfers. Please add in any contract year to the end of the sentence. |
Response We have added in any contract year to the end of the sentence as requested.
12. | Underlying Funds Short-Term Trading Policies (Page 20) |
a. | Comment Please capitalize trading in the fourth line of the third paragraph. Short-Term Trading is defined on page 18. |
Response We have capitalized trading as requested.
13. | Automatic Asset Rebalancing Program (Page 20) |
a. | Comment The third paragraph discusses procedures for non-compliant instructions. Please explain, supplementally, whether an Owner will receive notice of their non-compliance. If so, please add appropriate disclosure. |
Kathryn M. Hinke
November 10, 2016
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Response If we receive non-compliant instructions, we notify the Owner of such non-compliance. We have added disclosure to the third paragraph of this section as follows:
If at any point, for any reason, your rebalancing instructions would result in allocations inconsistent with the investment requirements, we will revert to the last compliant instructions on file and we will notify you of such reversion.
14. | Automatic Asset Rebalancing Program (Page 20) |
a. | Comment In the last paragraph you reserve the right to modify, suspend or terminate the program. Please specify how much notice will be provided. |
Response We have revised the disclosure to specify that we will notify you 30 days prior to exercising that right if we modify, suspend, or terminate the Automatic Asset Rebalancing Program.
15. | How Does Polaris Income Plus Daily Work? (Page 24) |
a. | Comment The first paragraph states: If no withdrawals have been taken, the Income Base is increased to the Step-up Value immediately. Please indicate the timeframe that withdrawals cannot have been taken for the Income Base to be increased to the Step-up Value. |
Response We clarified the disclosure to indicate that the Step-up Value is increased immediately until a withdrawal has been taken. The language has been amended as follows:
Until a withdrawal has been taken, the Income Base is increased to the Step-up Value immediately.
16. | Polaris Income Plus and Polaris Income Plus Daily Are there investment requirements if I elect a Living Benefit? (Page 27) |
a. | Comment Please consider removing and your financial advisor from the first sentence or add the phrase throughout the prospectus. The prospectus uses you without indicating the financial advisor. See, e.g., Investment Requirements for Polaris Income Plus Income Option 1, 2 or 3 (p. 27): If you elect . . . you must allocate your assets . . . . |
Response We have removed and your financial advisor as requested.
17. | Beneficiary Continuation Programs Extended Legacy Program (Page 37) |
a. | Comment Please explain the disclosure: with the flexibility to withdraw more than the IRS required minimum distribution. |
Response We included the language with the flexibility to withdraw more than the IRS required minimum distribution to clarify that a Beneficiary who takes the death benefit in the form of withdrawals is not limited to the required minimum distribution amount.
18. | Beneficiary Continuation Programs Extended Legacy Program (Page 37) |
a. | Comment The third paragraph references all required paperwork. If applicable, please indicate that the paperwork must be received in Good Order. |
Kathryn M. Hinke
November 10, 2016
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Response We have indicated that all required paperwork must be received in Good Order.
19. | Beneficiary Continuation Programs Inherited Account Program (Page 37) |
a. | Comment Please specify whether the Inherited Account Program is available with the Contracts. |
Response Inherited Account Program is available with the Contracts and we removed if available to clarify that it is available.
20. | Standard Death Benefit (Page 38) |
a. | Comment Please define the standard death benefit and explain how it is different than the later described: (1) death benefit without election of a living benefit and (2) death benefit with the election of a living benefit. |
Response Per our discussion, the standard death benefit is defined as a return of contract value. The difference between the standard death benefit and (1) death benefit without elect of a living benefit and (2) death benefit with the election of a living benefit is: under (1) the death benefit is the greater of contract value or net purchase payments, and under (2) the death benefit is the greater of contract value or purchase payments adjusted by a Withdrawal Adjustment as indicated on page 38.
21. | Optional Living Benefit Fees (Page 40) |
a. | Comment For each of the fees charged for optional benefits, please disclose who receives the amount deducted and what is provided in consideration for the deduction. |
Response For the fees charged for optional living benefits, the Company receives the amount deducted for the consideration of the lifetime income guarantee. We have added disclosure to Optional Living Benefit Fees as follows:
The Living Benefit fee is charged and received by the Company in consideration of the living benefit guarantees provided to you.
22. | Annuity Income Options (Pages 43 44) |
a. | Comment As applicable, please disclose any commutation rights with regard to the various annuitization options. |
Response There are commutation rights with regards to the period certain annuitization options 3, 4 and 5 only if the guaranteed period certain annuitization options are elected and upon the Owners request. We have revised disclosure on page 44 to clarify those commutation rights:
Upon your request, the contract may be commuted if a period certain annuitization income option has been elected. The amount available upon such redemption would be the discounted present value of any remaining guaranteed annuity income payments.
Kathryn M. Hinke
November 10, 2016
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23. | Annuity Income Option 1 Life Income Annuity; Annuity Income Option 2 Joint and Survivor Life Income Annuity (Page 44) |
a. | Comment Please disclose the possibility of receiving only one payment. |
Response Per your request, we have added disclosure regarding the possibility of receiving only one payment as follows:
If you elect a lifetime based annuity income option without a guaranteed period, your annuity income payments depend on longevity only. That means that you may potentially only live long enough to receive one annuity income payment.
24. | Annuity Income Payments (Page 44) |
a. | Comment The disclosure states that [w]e make annuity income payments on a monthly, quarterly, semi-annual or annual basis. Please clarify whether the contract owner may choose the frequency of annuity income payments. |
Response We clarified that the contract owner may elect the frequency of annuity income payments as requested. The language is amended as follows:
We make annuity income payments on a monthly, quarterly, semi-annual or annual basis as elected by you.
25. | U.S. Department of Labor Fiduciary Regulation (Page 45) |
a. | Comment Please consider amending the third sentence by removing while or however for clarity (underlined below): |
While the new requirements generally will not impact your rights under the Contract, they may, however, affect recommendations made by your financial representative and your financial representatives ability to make those recommendations.
Response We amended the sentence by removing while as requested.
26. | Legal Proceedings (Page 52) |
a. | Comment Please provide an updated assessment of the effect contingent liabilities may have on the Companys financial condition. |
Response We provided an updated assessment of the effect contingent liabilities may have on the Companys financial condition as requested.
Statement of Additional Information (SAI)
27. | Variable Annuity Income Payments Illustrative Example (Page 14) |
a. | Comment Please explain what the Annuity 2000 table is referencing. |
Response The Annuity 2000 table references the actuarial basis of computation for the annuity
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November 10, 2016
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income option factors used to calculate the annuity income payments. The correct name of the table should be the Annuity 2000 Mortality Table and we will amend the name of the table in the Statement of Additional Information.
28. | Broker-Dealer Firms Receiving Revenue Sharing Payments (Page 27) |
a. | Comment Please confirm the list of those that received a revenue sharing payment of more than $5,000. The current disclosure states that the list includes those that we believe received a revenue sharing payment of more than $5,000. |
Response We confirmed the list of Broker-Dealer Firms received a revenue sharing payment of more than $5,000. We also removed the word believe.
29. | Polaris Advisory Variable Annuity (Version A) Separate Account and The Company (Page 4) |
a. | Comment Please consider changing managements to management. |
Response We have changed managements to management as requested.
30. | Comment Please review the SAIs for language consistency. For example, when referring to payments, please use annuity income payments as appropriate. See, e.g., Polaris Advisory Variable Annuity (Version A), Subsequent Monthly Annuity Income (p. 11). The first paragraph uses monthly payments. |
Response We will review the SAI for language consistency and we have replaced monthly payments with annuity income payments as requested.
We will file any revisions and all relevant exhibits and financial statements in a pre-effective amendment to the Registration Statement on December 14, 2016.
Should you have any questions or need any additional information concerning the Registration Statements, please do not hesitate to contact me at (310) 772-6259.
Very truly yours,
/s/ Helena Lee
Helena Lee
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