Filed with the Securities and Exchange Commission on May 17, 2022.
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
ARIZONA
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)
6311
(PRIMARY STANDARD INDUSTRIAL
CLASSIFICATION CODE NUMBER)
86-0222062
(I. R. S. EMPLOYER IDENTIFICATION NUMBER)
525 WASHINGTON BOULEVARD
JERSEY CITY, NJ 07310
(212) 554-1234
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRATS PRINCIPAL EXECUTIVE OFFICES)
SHANE DALY
VICE PRESIDENT AND ASSOCIATE GENERAL COUNSEL
EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA
1290 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10104
(212) 554-1234
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
Approximate date of commencement of proposed sale to the public: As soon after the effective date of this Registration Statement as is practicable.
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Large accelerated filer | [ ] | Accelerated filer | [ ] | |||
Non-accelerated filer | ☒ |
Smaller reporting company | [ ] | |||
Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act . ☐
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
Market Stabilizer Option® II Issued by Equitable Financial Life Insurance Company and Equitable Financial Life Insurance Company of America
Prospectus dated [ ]
Please read and keep this Prospectus for future reference. It contains important information that you should know before purchasing or taking any other action under your policy. Also, this Prospectus must be read along with the variable life insurance policy prospectus. This Prospectus is in addition to the variable life insurance policy prospectus and all information in the variable life insurance policy prospectus continues to apply unless addressed by this Prospectus.
Equitable Financial Life Insurance Company and Equitable Financial Life Insurance Company of America issue the Market Stabilizer Option® II described in this Prospectus. The Market Stabilizer Option® II is available only under certain variable life insurance policies that we offer and may not be available through your financial professional.
What is the Market Stabilizer Option® II?
The Market Stabilizer Option® II (MSO) permits you to invest in one or more Segments, each of which provides performance tied to the performance of an Index for a set period (one year). The Segments provide for participation in the performance of the S&P 500 Price Return Index, which excludes dividends (the Index) generally up to the applicable Growth Cap Rate that we set on the Segment Start Date. The Growth Cap Rate for each Indexed Option is set at the Companys sole discretion and the Growth Cap Rate will not change during a Segment Term. Our minimum Growth Cap Rate for 1 year Standard Segments ranges from 4.25% to 5% depending on the Indexed Option. Our minimum Growth Cap Rate for Step Up Segments is 4.5%. Our minimum Growth Cap Rate for Dual Direction Segments is 4.5%. The extent of the downside protection at Segment maturity, also referred to as the Segment Buffer, varies by Segment, ranging from the first 10% to 20% of loss. On the Segment Maturity Date, we will apply the Index-Linked Rate of Return to the Segment Account Value based on the performance of the Index. The total amount earned on an investment in a Segment of the MSO is only applied at Segment maturity. If you take an Early Distribution from a Segment on any date prior to Segment maturity, we calculate the value of the Segment as described in Appendix Segment Value Calculation. This amount may be less than the amount invested and may be less than the amount you would receive had you held the investment until Segment Maturity. The Segment Value will generally be negatively affected by increases in the expected volatility of index prices, interest rate increases, and by poor market performance. All other factors being equal, the Segment Value would generally be lower the earlier a withdrawal or surrender is made during a Segment. Also, participation in upside performance for early withdrawals is pro-rated based on the period those amounts were invested in a Segment. This means you participate to a lesser extent in upside performance the earlier you take an Early Distribution. Please see Index-Linked Return in Description of the Market Stabilizer Option® II in this Prospectus.
Please note that amounts that are removed from a Segment prior to the Segment Maturity Date will not be credited with the full extent of any positive Index performance. Even when the Index performance has been positive, such Early Distributions may cause you to lose some principal and previously credited interest. Please see Early Distribution Adjustment in this Prospectus.
Although under the variable life insurance policy, we reserve the right to apply a transfer charge up to $25 for each transfer among your investment options, there are no transfer charges for transfers into or out of an MSO Holding Account. Please note that once policy account value has been swept from an MSO Holding Account into a Segment, transfers into or out of that Segment before its Segment Maturity Date will not be permitted.
Among the many terms associated with the Market Stabilizer Option® II are:
| Index-Linked Return for approximately a one year period tied to the performance of the S&P 500 Price Return Index, which excludes dividends as described below. |
| Index-Linked Return will be applied at the end of the period (your Segment Term) on the Segment Maturity Date and only to amounts remaining within the Segment until the Segment Maturity Date. The Index-Linked Return will not be applied before the Segment Maturity Date. |
| The Index-Linked Return could be positive, zero or in certain circumstances negative as described below. A hypothetical 100% decline in the S&P 500 Price Return Index could produce an 80-90% loss of principal and previously credited interest, depending on the Indexed Option selected. Therefore, there is the possibility of a negative return on this investment at the end of your Segment Term, which may result in a significant loss of principal and previously credited interest. |
The SEC has not approved or disapproved these securities or determined if this Prospectus is accurate or complete. Any representation to the contrary is a criminal offense. The contracts are not insured by the FDIC or any other agency. They are not deposits or other obligations of any bank and are not bank guaranteed. They are subject to investment risks and possible loss of principal and previously credited interest.
EVM-63-22 (5/22) | Cat # 164382 (5/22) | |
EFLIC/EFLOA | #323737 |
| An Early Distribution Adjustment on Early Distributions (including a requested partial withdrawal, loan payment, surrender, payment of charges, or exercise of certain riders) will be made from the Segment Account Value before the Segment Maturity Date. |
| Any Early Distribution Adjustment that is made may cause you to lose principal and previously credited interest through the Segment Value Calculation, as explained in this Prospectus, and that loss could potentially be substantial. Therefore you should carefully consider whether to make such distributions and/or maintain enough value in your Guaranteed Interest Option (GIO) and/or variable investment options to cover your monthly deductions. As described in this Prospectus, we will attempt to maintain a reserve (Charge Reserve Amount) to cover your monthly deductions, but it is possible that the Charge Reserve Amount will be insufficient to cover your monthly deductions. |
| The Companys obligations under the MSO are subject to its creditworthiness and claims paying ability. |
| Index-linked investment options such as those available under MSO are complex insurance and investment options, and you should speak with a financial professional about the MSOs features, benefits, risks, and fees, and whether the MSO is appropriate for you based upon your financial situation and objectives. |
These are only some of the terms associated with the Market Stabilizer Option® II. Please read this Prospectus for more details about the Market Stabilizer Option® II. Also, this Prospectus must be read along with the variable life insurance policy prospectus and policy rider for this option. Please refer to page 6 of this Prospectus for a Definitions section that discusses these and other terms associated with the Market Stabilizer Option® II. Please refer to page 12 of this Prospectus for a discussion of risk factors.
Other policies. We offer a variety of fixed and variable life insurance policies which offer policy features, including investment options, that are different from those offered by this Prospectus. Not every policy or feature is offered through your financial professional. You can contact us to find out more about any other insurance policy.
The MSO is not sponsored, endorsed, sold or promoted by Standard & Poors (S&P) or its third party licensors. Neither S&P nor its third party licensors makes any representation or warranty, express or implied, to the owners of the MSO or any member of the public regarding the advisability of investing in securities generally or in the MSO particularly or the ability of the S&P 500 Price Return Index (the Index) to track general stock market performance. S&Ps and its third party licensors only relationship to the Company is the licensing of certain trademarks and trade names of S&P and
the third party licensors and of the Index which is determined, composed and calculated by S&P or its third party licensors without regard to the Company or the MSO. S&P and its third party licensors have no obligation to take the needs of the Company or the owners of the MSO into consideration in determining, composing or calculating the Index. S&P nor its third party licensors are not responsible for and have not participated in the determination of the prices and amount of the MSO or the timing of the issuance or sale of the MSO or in the determination or calculation of the equation by which the MSO is to be converted into cash. S&P has no obligation or liability in connection with the administration, marketing or trading of the MSO.
Market Stabilizer Option® II |
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1. Definitions |
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2. Key Features of the Market Stabilizer Option® II |
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3. Fee Table Summary |
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4. Risk Factors |
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5. Description of the Market Stabilizer Option® II |
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Indexed Options |
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Cash Surrender Value, Net Cash Surrender Value and Loan Value |
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Impact of MSO Election on Other Policy Riders and/or Services |
24 |
When we address the reader of this Prospectus with words such as you and your, we mean the person who has the right or responsibility that the Prospectus is discussing at that point. This is usually the policy owner.
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6. Distribution of the policy |
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7. Incorporation of certain documents by reference |
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Appendix | 28 |
Segment Value Calculation |
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Equitable Financial Life Insurance Company of America is an Arizona stock life insurance corporation organized in 1969. Equitable Financial Life Insurance Company is a New York stock life insurance corporation doing business since 1859. We are indirect wholly owned subsidiaries of Equitable Holdings, Inc.
We are licensed to sell life insurance and annuities in all fifty states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office is located at 1290 Avenue of the Americas, New York, NY 10104.
No other company has any legal responsibility to pay amounts that we owe under the policies. We are solely responsible for paying all amounts owed to you under the policy.
How to reach us
Please refer to the How to reach us section of the variable life insurance policy prospectus for more information regarding contacting us and communicating your instructions. We also have specific forms that we recommend you use for electing the MSO and any MSO transactions.
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Business Day Generally, a business day is any day the New York Stock Exchange is open for trading. If the New York Stock Exchange is not open for trading or if the Index value is, for any other reason, not published on the Segment Start Date or a Segment Maturity Date, the value of the Index will be determined as of the end of the most recent preceding business day for which the Index value is published.
Cash Surrender Value The cash surrender value is equal to the difference between your policy account value and any surrender charges that are in effect under your policy. The Segment Value is used to determine the policy account value for this purpose.
Charge Reserve Amount A minimum amount of policy account value in the Guaranteed Interest Option (GIO) that you are required to maintain in order to approximately cover all of the estimated monthly charges for the policy (including, but not limited to, the policys monthly cost of insurance charge, the policys monthly administrative charge, the policys monthly mortality and expense risk charge (also referred to as the mortality and expense charge), the MSOs monthly Variable Index Segment Account Charge (the monthly charge deducted from the policy account) and any monthly optional rider charges, (please see Charges in this Prospectus for more information) during the Segment Term. The Charge Reserve Amount will be determined on each Segment Start Date as an amount projected to be sufficient to cover all of the policys monthly deductions during the Segment Term, assuming at the time such calculation is made that no interest or investment performance is credited to or charged against the policy account and that no policy changes or additional premium payments are made. The Charge Reserve Amount will be reduced by each subsequent monthly deduction (but not to less than zero). There is no requirement to maintain a Charge Reserve Amount, which would cover approximately all estimated monthly policy charges, if you are not in a Segment. Please see Segments in this Prospectus for more information about the investment options from which account value could be transferred to the GIO on a Segment Start Date in order to meet this requirement.
Company Refers to Equitable Financial Life Insurance Company of America (Equitable America) or Equitable Financial Life Insurance Company (Equitable Financial). The terms we, us, and our are also used to identify the issuing Company. Equitable America does not do business or issue contracts in the state of New York. Generally, Equitable America will issue contracts in all states except New York and Equitable Financial will issue contracts in New York. However, if the primary selling agent is an Equitable Advisors financial professional whose business address is in the state of
New York, the issuing Company will be Equitable Financial, even if the contract is issued in a state other than New York.
Dual Direction Segment Any Segment belonging to an Indexed Option whose name includes Dual Direction. If the Index Performance Rate exceeds the Segments Growth Cap Rate, then the Segments Index-Linked Rate of Return will be equal to the Growth Cap Rate. .If the Index Performance Rate is between the Growth Cap Rate and the Segment Buffer inclusive of both, then the Index Linked Rate of Return will be equal to the absolute value of the Index Performance Rate. If the Index Performance Rate is negative and below the Segment Buffer, then the Index-Linked Rate of Return will be equal to the amount of negative performance below the Segment Buffer.
Early Distribution A requested partial withdrawal, loan payment, surrender, deduction for monthly charges (if amounts are not available from the variable investment options or GIO) or other distribution from a Segment, made prior to the Segment Maturity Date. Such other distributions would include any distributions from the policy that we deem necessary to continue to qualify the policy as life insurance under applicable tax law, any unpaid loan interest, or any distribution in connection with the exercise of a rider available under your policy. Payment of death benefit proceeds is not an Early Distribution.
Early Distribution Adjustment (EDA) (also referred to in your policy as Segment Market Value Adjustment) An adjustment that we make to your Segment Account Value, in the event of an Early Distribution. An EDA that is made may cause you to lose principal and previously credited interest through the application of a fair value factor, which estimates the market value, at the time of an Early Distribution, of the financial instruments representing our obligation to provide your Segment Maturity Value on the Segment Maturity Date and any potential loss could be substantial. The EDA may result in a reduction in your Segment Account Value and your other policy values. Therefore, you should give careful consideration before taking any early loan, partial withdrawal or surrender, or allowing the value in your other investment options to fall so low that we must make any monthly deduction from a Segment. Please see Early Distribution Adjustment in this Prospectus for more information.
Growth Cap Rate Generally, the maximum rate of return that will be applied to a Segment Account Value. The Growth Cap Rate is set for each Segment on the Segment Start Date. While the Growth Cap Rate is set at the Companys sole discretion, the Growth Cap Rate will not change during a Segment Term. For Standard Segments the Growth
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Cap Rate is the highest Index-Linked Rate of Return that can be credited on a Segment Maturity Date. For Dual Direction Segments the Growth Cap Rate is the highest Index-Linked Rate of Return for positive Index performance. For Step Up Segments the Growth Cap Rate is the Index-Linked Rate of Return if the Index Performance Rate for that Segment is greater than or equal to zero. The Growth Cap Rate is not an annual rate of return.
Guaranteed Participation Rate The Guaranteed Participation Rate is the percentage of the Index Performance Rate that we will use to determine the Index-Linked Rate of Return.
Index The S&P 500 Price Return Index, which is the S&P 500 index excluding dividends. This index includes 500 leading companies in leading industries in the U.S. economy.
Index Performance Rate (also referred to in your policy as Segment Index Performance Rate) The Index Performance Rate measures the percentage change in the Index during a Segment Term for each Segment. If the current index is discontinued or if the calculation of the current index is substantially changed, we reserve the right to substitute an alternative index. We also reserve the right to choose an alternative index at our discretion. Please see Change in Index for more information.
The Index Performance Rate is calculated by ((b) divided by (a)) minus one, where:
(a) | is the value of the Index at the close of business on the Segment Start Date, and |
(b) | is the value of the Index at the close of business on the Segment Maturity Date. |
We determine the value of the Index at the close of business, which is the end of a business day.
Indexed Option Comprises all Segments subject to the same index, Index-Linked Rate of Return calculation methodology, number of years in a Segment Term, Segment Buffer, and Guaranteed Participation Rate. Each Indexed Option has its own corresponding MSO Holding Account.
Index-Linked Rate of Return (also referred to in your policy as Segment Index-Linked Rate of Return) The rate of return earned by a Segment as calculated on the Segment Maturity Date. The Index-Linked Rate of Return is calculated differently for different Indexed Options. Please see the chart under Index-Linked Return for more information.
Index-Linked Return (also referred to in your policy as Segment Index-Linked Return) The amount that is applied to the Segment Account Value on the Segment Maturity Date that is equal to that Segments Index-Linked Rate of Return multiplied by the Segment Account Value on the Segment Maturity Date. The Index-Linked Return may be positive, negative or zero. The Indexed-Linked Return is only applied to amounts that remain in a Segment Account Value until the Segment Maturity Date. For example, a surrender of
your policy before Segment maturity will eliminate any Index-Linked Return and be subject to an Early Distribution Adjustment.
Initial Segment Account The amount initially transferred to a Segment from an MSO Holding Account on its Segment Start Date, net of the amount that may have been transferred from the applicable MSO Holding Account to the GIO to cover the Charge Reserve Amount (see Charge Reserve Amount in this Prospectus). Such a transfer would be made from an MSO Holding Account to cover the Charge Reserve Amount only (1) if you have given us instructions to make such a transfer (if permitted under your policy) or (2) in the other limited circumstances described under Segments in this Prospectus.
MSO Holding Account (also referred to in your policy as VIO Holding Account) An account that holds all contributions and transfers allocated to an Indexed Option pending investment in a Segment. There is an MSO Holding Account for each Indexed Option. The MSO Holding Accounts are part of the EQ/Money Market variable investment option.
Net Cash Surrender Value The net cash surrender value equals your policy account value, minus any outstanding loan and unpaid loan interest, minus any amount of your policy account value that is restricted as a result of previously distributed terminal illness living benefits, and further reduced for any monthly benefit payments under the Long-Term Care ServicesSM Rider (if applicable), and minus any surrender charge that then remains applicable. For this purpose, the Segment Value is used to calculate the policy account value.
Policy Account Value Your policy account value is the total of (i) your amounts in our variable investment options, (ii) your amounts in our guaranteed interest option (other than amounts included in (iii)) and (iii) any amounts that we are holding to secure policy loans that you have taken (including any interest on those amounts which has not yet been allocated to the investment options). The account value of any policy amounts transferred to the MSO is also included in your policy account value.
Segment An investment option we establish with an Index, Segment Term, Index-Linked Rate of Return calculation methodology and Segment Buffer of a specific Indexed Option, and for which we also specify a Segment Maturity Date and Growth Cap Rate.
Segment Account Value (also referred to in your policy as Segment Account) The amount of an Initial Segment Account Value subsequently reduced by any Early Distribution. Any such reduction in the Segment Account Value prior to its Segment Maturity Date will result in a corresponding Early Distribution Adjustment, which may cause you to lose principal and previously credited interest, and that loss could be substantial. The Segment Account Value is used in determining policy account values, death benefits, and the net amount at risk for monthly cost of insurance calculations of the policy and the new base policy face amount associated with a requested change in death benefit option, if permitted by your base policy.
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Segment Buffer (also referred to in your policy as Segment Loss Absorption Threshold Rate) The portion of any negative Index Performance Rate that will be absorbed and not result in a reduction in the Segment Account Value on a Segment Maturity Date for a particular Segment. Any percentage decline in a Segments Index Performance Rate that is below the Segment Buffer divided by the Guaranteed Participation Rate as defined in your policy reduces your Segment Maturity Value. We currently offer Segment Buffers of -10%, -15% and -20% for Standard Segments. The Dual Direction and Step Up Indexed Options both have a Segment Buffer of -10%.
Segment Maturity Date The date on which a Segment Term is completed and the Index-Linked Return for that Segment is applied to a Segment Account Value.
Segment Maturity Value This is the Segment Account Value adjusted by the Index-Linked Return for that Segment.
Segment Start Date The Segment Start Date is the day on which a Segment is created.
Segment Term The duration of a Segment. The Segment Term for each Segment begins on its Segment Start Date and ends on its Segment Maturity Date one year later. We are currently only offering Segment Terms of approximately one year. We may offer different durations in the future.
Segment Value This is the Segment Account Value minus the Early Distribution Adjustment that would apply on a full surrender of that Segment at any time prior to the Segment Maturity Date. We determine the Segment Value prior to the Segment Maturity Date, based on the estimated current value of financial instruments representing our obligation to provide your Segment Maturity Value on the Segment Maturity Date. However, your Segment Value will not exceed the sum of (1) your Segment Account Value plus (2) your Segment Account Value multiplied by the pro-rated Growth Cap Rate. The pro-rated Growth Cap Rate is equal to the Growth Cap Rate multiplied by the number of days since the Segment Start Date divided by the number of days in the Segment Term. Segment Values will be used in determining policy value available to cover monthly deductions, any applicable proportionate surrender charges for requested face amount reductions, and other distributions; cash surrender values, maximum partial withdrawal values, and maximum loan values subject to any applicable base policy surrender charge. They will also be used in determining whether any outstanding policy loan and accrued loan interest exceeds the policy account value. If the insured person dies during a Segment Term and any Segment Value exceeds its corresponding Segment Account Value, the Segment Value will be used in determining the death benefit, as applicable.
Standard Segment Any Segment belonging to a Indexed Option whose name includes Standard. For Standard Segments the Index-Linked Rate of Return is equal to the Index Performance Rate, subject to the Growth Cap Rate and Segment Buffer. If the Index Performance Rate exceeds
the Segments Growth Cap Rate, then the Segments Index-Linked Rate of Return will be equal to the Growth Cap Rate. If the Index Performance Rate is between zero and the Growth Cap Rate, inclusive of both, then the Segments Index-Linked Rate of Return will be equal to the Index Performance Rate. If the Index Performance Rate is between zero and the Segment Buffer, inclusive of both, then the Segments Index-Linked Rate of Return will be zero. If the Index Performance Rate is negative and below the Segment Buffer, then the Index-Linked Rate of Return will be equal to the amount of negative performance below the Segment Buffer.
Step Up Segment Any Segment belonging to an Indexed Option whose name includes Step Up. For Step Up Segments the Index-Linked Rate of Return is equal to the Growth Cap Rate if the Index Performance Rate for that Segment is greater than or equal to zero on the Segment Maturity Date. If the Index Performance Rate is between zero and the Segment Buffer, then the Segments Index-Linked Rate of Return will be zero. If the Index Performance Rate is negative and below the Segment Buffer, then the Index-Linked Rate of Return will be equal to the amount of negative performance below the Segment Buffer.
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2. Key Features of the Market Stabilizer Option® II
| The MSO permits you to invest in one or more Segments, each of which provides performance tied to the performance of an Index for a set period (one year). The Segments provide for participation in the performance of the S&P 500 Price Return Index, which excludes dividends (the Index). |
| We currently only offer Segment Terms of approximately one year. We may offer different durations in the future. |
| The Growth Cap Rate for each Indexed Option is set at the Companys sole discretion on the Segment Start Date. The Growth Cap Rate will not change during a Segment Term. |
| For the Standard Indexed Option with -10% Segment Buffer, the Growth Cap Rate will always be at least 5%. For the Standard Indexed Option with -15% Segment Buffer, the Growth Cap Rate will always be at least 4.5%. For the Standard Indexed Option with -20% Segment Buffer, the Growth Cap Rate will always be at least 4.25%. For the Step Up and Dual Direction Indexed Options, the Growth Cap Rate will always be at least 4.5%. In addition, for each Indexed Option, you may set a minimum Growth Cap Rate that is acceptable to you. |
| Each Segments Index-Linked Rate of Return is generally limited by its Growth Cap Rate, which could cause your Segments Index-Linked Rate of Return to be lower than it would otherwise be if you invested in a mutual fund designed to track the performance of the applicable Index. |
| On the Segment Maturity Date, we will apply the Index-Linked Rate of Return to the Segment Account Value based on the performance of the Index. |
| An Early Distribution Adjustment on Early Distributions will be made from the Segment Account Value before the Segment Maturity Date. You may also forfeit any positive Index performance and could be subject to surrender charges and tax consequences may apply. |
| On any date prior to the Segment Maturity Date, we calculate the Segment Value for each Segment as described in Appendix Segment Value Calculation. This amount may be less than the amount invested and may be less than the amount you would receive had you held the investment until the Segment Maturity Date and, as a result, the amount paid upon death, surrender or partial withdrawal prior to the Segment Maturity Date may also be less. The Segment Value will generally be negatively affected by increases in the expected volatility of index prices, interest rate increases, and by poor market performance. All other factors being equal, the Segment Value would generally be lower the earlier a withdrawal or surrender is made during a Segment. Also, participation in upside performance for early withdrawals is pro-rated based on the period those amounts were invested in a Segment. This means you participate to a lesser extent in upside performance the earlier you take a withdrawal or surrender. A partial withdrawal out of a Segment will reduce the Segment Account Value and such reduction may be greater than the dollar amount of the withdrawal. |
| Once policy account value is in a Segment, you cannot transfer out of a Segment prior to the Segment Maturity Date. |
| We reserve the right to substitute an alternative index for the S&P 500 Price Return Index, which could reduce the Growth Cap Rates we can offer. If we were to substitute an alternative index at our discretion, we would provide notice 45 days before making that change. The new index would only apply to new Segments. Any outstanding Segments would mature on their original Segment Maturity Dates. |
| We reserve the right to suspend or terminate contributions and/or transfers into the MSO. |
| We reserve the right to change the Segment Start Date and/or Segment Maturity Date, to change the frequency with which we offer new Segments, to stop offering new Segments, or to temporarily suspend offering new Segments for any Indexed Option. We also reserve the right to add new Indexed Options. We will notify you of any of the above actions we take. |
| Your Segment Maturity Value is not affected by the price of the Index on any date between the Segment Start Date and the Segment Maturity Date. |
| If the S&P 500 Price Return Index were to be discontinued or substantially changed, thereby affecting the Index-Linked Return of existing Segments, we will mature the Segments based on the most recently available closing value of the Index before it is discontinued or changed. |
| Because of the way the Index-Linked Rate of Return is calculated for Step Up Segments, when the Index Performance Rate is near zero, a very small difference in the Index Performance Rate on the Segment Maturity Date can result in a very different Index-Linked Rate of Return. For example, if the Growth Cap Rate is 8.00% and the Index Performance Rate is |
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0.00% on the Segment Maturity Date, the Index-Linked Rate of Return would be 8.00%. However, if the Index Performance Rate had instead been -0.01% on the Segment Maturity Date the Index-Linked Rate of Return would be 0.00%. |
| The following chart provides a comparison of certain differences between Indexed Options. |
Standard Segment | ||
Segment Buffer |
Guaranteed Minimum Growth Cap Rate | |
-10% |
5% | |
-15% |
4.5% | |
-20% |
4.25% |
Step Up Segment | ||
Segment Buffer |
Guaranteed Minimum Growth Cap Rate | |
-10% |
4.5% |
Dual Direction Segment | ||
Segment Buffer |
Guaranteed Minimum Growth Cap Rate | |
-10% |
4.5% |
| Both the Growth Cap Rate and the Segment Buffer are calculated from the Segment Start Date to the Segment Maturity Date, not annual rates of return. |
| Step Up Segments will generally have lower Growth Cap Rates than Standard Segments with the same Index, Segment Term and Segment Buffer. |
| Please see Fee Table for complete detail on fees and charges. |
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MSO Charges | When Charge is Deducted | Guaranteed Maximum | ||||
Variable Index Segment Account Charge | At the beginning of each policy month during the Segment Term | 1.65% annually (0.13750% monthly)(1) |
Other |
Charge is Deducted | Maximum Spread Percentage that May be Deducted | ||||
Loan Interest Spread(2) for Amounts of Policy Loans Allocated to MSO Segment | On each policy anniversary (or on loan termination, if earlier) | 1% |
Other | When Charge is Deducted | Maximum Amount that May be Deducted(3) | ||||
Early Distribution Adjustment | On Early Distribution | 90% of Segment Account Value for -10% Segment Buffer | ||||
85% of Segment Account Value for -15% Segment Buffer | ||||||
80% of Segment Account Value for -20% Segment Buffer |
(1) | The current non-guaranteed rate is 0.40% annually (0.03333% monthly). |
(2) | We charge interest on policy loans but credit you with interest on the amount of the policy account value we hold as collateral for the loan. The spread is the difference between the interest rate we charge you on a policy loan and the interest rate we credit to you on the amount of your policy account value that we hold as collateral for the loan. |
(3) | These percentage adjustment amounts represent the loss of Segment Account Value that would be produced by a hypothetical 100% decline in the Index at the time of a total distribution. The actual amount of an Early Distribution Adjustment is determined by a formula that depends on, among other things, how the Index has performed since the Segment Start Date, as discussed in the Appendix Segment Value Calculation in this Prospectus. |
The base variable life insurance policys mortality and expense risk charge will also apply to a Segment Account Value or any amounts held in an MSO Holding Account. Amounts in the MSO Holding Accounts reflect fees and expenses of the EQ/Money Market Portfolio. This is also referred to as the mortality and expense charge. Please see Charges in this Prospectus for more information. Please refer to the variable life insurance policy prospectus for more information.
This fee table applies specifically to the MSO and should be read in conjunction with the fee table in the variable life insurance policy prospectus.
Changes in charges
Any changes that we make in our current charges or charge rates will be on a basis that is equitable to all policies belonging to a given class, and will be determined based on reasonable assumptions as to expenses, mortality, investment income, lapses and policy and contract claims associated with morbidity. For the sake of clarity, the assumptions referenced above include taxes, the cost of hedging, longevity, volatility, other market conditions, surrenders, persistency, conversions, disability, accident, illness, inability to perform activities of daily living, and cognitive impairment, if applicable. Any changes in charges may apply to then in force policies, as well as to new policies. You will be notified in writing of any changes in charges under your policy.
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There are risks associated with some features of the Market Stabilizer Option® II:
| Because the Company relies on a single point in time to calculate the Index return, you may experience a negative return on the Segment Maturity Date even if the Index has experienced gains through some, or most, of the Segment Term. |
| There is a risk of a substantial loss of your principal and previously credited interest because you agree to absorb all losses from the portion of any negative Index performance that exceeds the applicable Segment Buffer. You could lose 90% of principal where there is a -10% Segment Buffer, 85% of principal where there is a -15% Segment Buffer and 80% of principal where there is a -20% Segment Buffer and any previously credited interest. |
| Your Index-Linked Return is also limited by the Growth Cap Rate, which could cause your Index-Linked Return to be lower than it would otherwise be if you participated in the full performance of the S&P 500 Price Return Index. |
| You will not know what the Growth Cap Rate is before the Segment starts. Therefore, you will not know in advance the upper limit on the return that may be credited to your investment in a Segment. |
| Negative consequences apply if, for any reason, amounts you have invested in a Segment are removed before the Segment Maturity Date. Specifically, with respect to the amounts removed early, you would (1) forfeit any positive Index performance and (2) be subject to an Early Distribution Adjustment that exposes you to a risk of potentially substantial loss of principal and previously credited interest. This exposure is designed to be consistent with the treatment of losses on amounts held to the Segment Maturity Date. Even when the Index performance has been positive, the EDA may cause you to lose some principal and previously credited interest on an early removal. Surrender charges and tax consequences could also apply. |
| The following types of removals (also referred to as Early Distributions) of account value from a Segment will result in the above-mentioned penalties to you, if the removals occur prior to the Segment Maturity Date: (a) a surrender of your policy; (b) a partial withdrawal, (c) a loan from your policy; (d) a distribution in order to enable your policy to continue to qualify as life insurance under the federal tax laws; (e) certain distributions in connection with the exercise of a rider available under your policy; and (f) a charge or unpaid policy loan interest that we deduct from your Segment Account Value because the Charge Reserve Amount and other funds are insufficient to cover them in their entirety. The Charge Reserve Amount may become insufficient because of policy changes that you |
request, additional premium payments, investment performance, policy loans, policy partial withdrawals, and any increases we make in current charges for the policy (including for the MSO and optional riders). |
| Certain of the above types of early removals can occur (and thus result in penalties to you) without any action on your part. Examples include (i) certain distributions we might make from your Segment Account Value to enable your policy to continue to qualify as life insurance and (ii) deductions we might make from your Segment Account Value to pay charges if the Charge Reserve Amount becomes insufficient. |
| Any applicable EDA will generally be affected by changes in both the volatility and level of the S&P 500 Price Return Index. Any EDA applied to any Segment Account Value is linked to the estimated value of a options on the S&P 500 Price Return Index as described in this Prospectus. The estimated value of the options and, consequently, the amount of the EDA will generally be higher after increases in market volatility or after the Index experiences a negative return following the Segment Start Date. |
| Once policy account value is in a Segment, you cannot transfer out of a Segment. This would result in the imposition of any applicable surrender charges and EDA. |
| We may not offer new Segments of a given Indexed Option so there is also the possibility that a Segment may not be available for a Segment renewal at the end of your Segment Term(s). |
| We also reserve the right to substitute an alternative index for the S&P 500 Price Return Index, which could reduce the Growth Cap Rates we can offer. |
| No company other than us has any legal responsibility to pay amounts that the Company owes under the policy. An owner should look to the financial strength of the Company for its claims-paying ability. |
| You do not have any rights in the securities underlying the index, including, but not limited to, (i) interest payments, (ii) dividend payments or (iii) voting rights. |
| Your Segment Maturity Value is dependent on the performance of the index on the Segment Maturity Date. |
| Past performance of the index is no indication of future performance. |
| The amounts required to be maintained in the GIO for the Charge Reserve Amount during the Segment Term may earn a return that is less than the return you might have earned on those amounts in another investment option had you not invested in a Segment. |
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| If you die prior to the Segment Maturity Date, your death benefit will be paid as of your date of death and if the Segment Value exceeds the Segment Account Value, your death benefit will not be subject to an Early Distribution Adjustment, unless the Early Distribution Adjustment would result in an increase in the amount of the death benefit. |
| Upon the exercise of the Policy Continuation Rider, the MSO is no longer available and any Segments will be terminated with an Early Distribution Adjustment and you will forfeit any positive Index performance. If there is any amount remaining in the net policy account value after the Policy Continuation Rider charge has been deducted, such amounts are treated as an additional loan and refunded to you so there will be no amounts in the variable investment options or the MSO. |
| If you exercise the Long-Term Care ServicesSM Rider, when a period of coverage ends, any Segments will be terminated with an Early Distribution Adjustment and you will forfeit any positive Index performance. Any remaining amounts will be allocated to the variable investment options and the GIO based on your premium allocation percentages then in effect. |
| If you exercise a Living Benefit Rider or an accelerated death benefit rider, any portion of the accelerated payment allocated to an individual Segment will cause a corresponding Early Distribution Adjustment of the Segment Account Value and you will forfeit any positive Index performance. |
The COVID-19 pandemic has negatively impacted the U.S. and global economies. A wide variety of factors continue to impact financial and economic conditions, including, among others, volatility in the financial markets, rising inflation rates, supply chain disruptions, continued low interest rates and changes in fiscal or monetary policy. Efforts to prevent the spread of COVID-19 have affected our business directly in a number of ways, including through the temporary closures of many businesses and schools and the institution of social distancing requirements in many states and local communities. Businesses or schools that have reopened have restricted or limited access for the foreseeable future and may do so on a permanent or episodic basis. As a result, our ability to sell products through our regular channels and the demand for our products and services has been significantly impacted.
While we have implemented risk management and contingency plans with respect to the COVID-19 pandemic, such measures may not adequately protect our business from the full impacts of the pandemic. Currently, most of our employees and advisors are continuing to work remotely. Extended periods of remote work arrangements could introduce additional operational risk including, but not limited to, cybersecurity risks, and impair our ability to effectively manage our business. We also outsource a variety of functions to third parties whose business continuity strategies are largely outside our control.
Economic uncertainty resulting from the COVID-19 pandemic may have an adverse effect on product sales and result in existing policyholders withdrawing at greater rates. COVID-19 could have an adverse effect on our insurance business due to increased mortality and morbidity rates. The cost of reinsurance to us for these policies could increase, and we may encounter decreased availability of such reinsurance. If policyholder lapse and surrender rates or premium waivers significantly exceed our expectations, we may need to change our assumptions, models or reserves.
Our investment portfolio has been, and may continue to be, adversely affected by the COVID-19 pandemic. Our investments in mortgages and commercial mortgage-backed securities have been, and could continue to be, negatively affected by delays or failures of borrowers to make payments of principal and interest when due. In some jurisdictions, local governments have imposed delays or moratoriums on many forms of enforcement actions. Furthermore, declines in equity markets and interest rates, reduced liquidity or a continued slowdown in the U.S. or in global economic conditions may also adversely affect the values and cash flows of investments. Market volatility also caused significant increases in credit spreads, and any continued volatility may increase our borrowing costs and decrease product fee income. Further, severe market volatility may leave us unable to react to market events in a prudent manner consistent with our historical investment practices.
The extent of the COVID-19 pandemics impact on us will depend on future developments that are still highly uncertain, including the severity and duration of the pandemic, actions taken by governments and other third parties in response to the pandemic and the availability and efficacy of vaccines against COVID-19 and its variants.
Cybersecurity risks and catastrophic events
We rely heavily on interconnected computer systems and digital data to conduct our variable life insurance product business. Because our variable life insurance product business is highly dependent upon the effective operation of our computer systems and those of our business partners, our business is vulnerable to disruptions from utility outages, and susceptible to operational and information security risks resulting from information systems failure (e.g., hardware and software malfunctions), and cyberattacks. These risks include, among other things, the theft, misuse, corruption and destruction of data maintained online or digitally, interference with or denial of service, attacks on websites and other operational disruption and unauthorized use or abuse of confidential customer information. Systems failures and cyberattacks, as well as, any other catastrophic event, including natural and manmade disasters, public health emergencies, pandemic diseases, terrorist attacks, floods or severe storms affecting us, any third-party administrator, the underlying funds, intermediaries and other affiliated or third-party service providers may adversely affect us, our business operations and your account value. Systems failures and cyberattacks may also interfere with our processing of policy
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transactions, including the processing of orders from our website or with the underlying funds, impact our ability to calculate account values, cause the release and possible destruction of confidential customer or business information, impede order processing, subject us and/or our service providers and intermediaries to regulatory fines and financial losses and/or cause reputational damage. In addition, the occurrence of any pandemic disease (like COVID-19), natural disaster, terrorist attack or any other event that results in our workforce, and/or employees of service providers and/or third-party administrators, being compromised and unable or unwilling to fully perform their responsibilities, could likewise result in interruptions in our service, including our ability to issue policies and process policy transactions. Even when our workforce and employees of our service providers and/or third-party administrators can work remotely, those remote work arrangements could result in our business operations being less efficient than under normal circumstances and lead to delays in our issuing policies and processing of other policy-related transactions, as well as possibly being more susceptible to cyberattacks. Cybersecurity risks and catastrophic events may also impact the issuers of securities in which the underlying funds invest, which may cause the funds underlying your policy to lose value. While there can be no assurance that we or the underlying funds or our service providers will avoid losses affecting your policy due to cyberattacks, information security breaches or other catastrophic events in the future, we take reasonable steps to mitigate these risks and secure our systems and business operations from such failures, attacks and events.
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The MSO consists of a number of Indexed Options, each of which provides a rate of return tied to the performance of a specified Index. You generally have the opportunity to invest in any of the Indexed Options described below, subject to the requirements, limitations and procedures disclosed in this section. We reserve the right to add new Indexed Options. You participate in the performance of an Index by investing in the corresponding Segment. Investments in Segments are not investments in underlying mutual funds; Segments are not index funds.
You can generally invest in any available Indexed Option. We are not obligated to offer any one particular Indexed Option. Also, we are not obligated to offer any Indexed Options. Each investment in an Indexed Option that starts on a particular Segment Start Date is referred to as a Segment.
An Indexed Option refers to a Segment option that has the same Index, Index-Linked Rate of Return calculation methodology, Segment Term, Segment Buffer and Guaranteed Participation Rate. Each Indexed Option has a corresponding MSO Holding Account. Please refer to the Definitions for a discussion of these terms.
The following chart lists the current Standard Indexed Options:
Index |
Segment |
Segment |
Minimum Growth Cap Rate | |||
S&P 500 Price | 1 year | -10% | 5% | |||
Return Index | 1 year | -15% | 4.5% | |||
1 year | -20% | 4.25% |
The following chart lists the current Step Up Indexed Options:
Index | Segment Term |
Segment Buffer |
Minimum Growth Cap Rate | |||
S&P 500 Price Return Index |
1 year |
-10% |
4.5% |
The following chart lists the current Dual Direction Indexed Options:
Index | Segment Term |
Segment Buffer |
Minimum Growth Cap Rate | |||
S&P 500 Price Return Index |
1 year | -10% | 4.5% |
The amount of each transfer or loan repayment you make to the MSO, and the balance of each premium payment you make to the MSO after any premium charge under your base policy has been deducted, will first be placed in an
MSO Holding Account. Each MSO Holding Account is a portion of the regular EQ/Money Market variable investment option that will hold amounts allocated to the MSO until the next available Segment Start Date. Each MSO Holding Account has the same rate of return and is subject to the same underlying portfolio operating expenses and same mortality and expense risk charges as the EQ/Money Market variable investment option. Please refer to Risk/benefit summary: charges and expenses you will pay of the variable life insurance policy prospectus for more information regarding such expenses. We currently plan on offering new Segments of each Indexed Option on a monthly basis but reserve the right to offer them less frequently or to stop offering them or to suspend offering them temporarily.
Before any account value is transferred into a Segment, you can transfer amounts from the applicable MSO Holding Account into other investment options available under your policy at any time subject to any transfer restrictions within your policy. You can transfer into and out of the MSO Holding Accounts at any time up to and including the Segment Start Date provided your transfer request is received at our administrative office by such date. For example, you can transfer policy account value into an MSO Holding Account on the 3rd Friday of June which is the Segment Start Date. That policy account value would transfer into the Segment starting on that date, subject to the conditions mentioned earlier. You can also transfer policy account value out of an MSO Holding Account before the end of the business day on the Segment Start Date and that account value would not be swept into the Segment starting on that date. Please refer to the How to reach us section of the variable life insurance policy prospectus for more information regarding contacting us and communicating your instructions. We also have specific forms that we recommend you use for electing the MSO and any MSO transactions.
On the Segment Start Date, account value in an MSO Holding Account, excluding charges and any account value transferred to cover the Charge Reserve Amount, will be transferred into a Segment if all requirements and limitations are met that are discussed under Segments immediately below.
Each Segment will have a Segment Start Date of the 3rd Friday of each calendar month and will have a Segment Maturity Date on the 3rd Friday of the same calendar month in the succeeding calendar year.
In order for any amount to be transferred from an MSO Holding Account into a new Segment on a Segment Start Date, all of the following conditions must be met on that date:
(1) | The Growth Cap Rate for that Segment of the applicable Indexed Option must be equal to or greater than your minimum Growth Cap Rate for that particular Indexed Option (Please see Growth Cap Rate in this Prospectus). |
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(2) | There must be sufficient account value available within the GIO and the variable investment options including the applicable MSO Holding Accounts to cover the Charge Reserve Amount as determined by us on such date (Please see Charge Reserve Amount in this Prospectus). |
(3) | The Growth Cap Rate must be greater than the sum of the annual interest rate we are currently crediting on the GIO (A), the annualized monthly Variable Index Segment Account Charge rate (B) and the current annualized monthly mortality and expense risk charge rate (C). The Growth Cap Rate must be greater than (A+B+C). This is to ensure that the highest possible rate of return that could be received in a Segment after these charges (B+C) have been considered exceeds the interest crediting rate currently being offered in the GIO. |
(4) | It must not be necessary, as determined by us on that date, for us to make a distribution from the policy during the Segment Term in order for the policy to continue to qualify as life insurance under applicable tax law. |
(5) | The total amount allocated to your Segments under your policy on that date must be less than any limit we may have established. At this time there is no limit. |
If there is sufficient policy account value in the GIO to cover the Charge Reserve Amount, then no transfers from other investment options to the GIO will need to be made. If there is insufficient value in the GIO to cover the Charge Reserve Amount and we do not receive instructions (if permitted by your underlying policy) from you specifying the investment options from which we should transfer the account value to the GIO to meet Charge Reserve Amount requirements at the Segment Start Date, or the transfer instructions are not possible due to insufficient funds, then the required amount will be transferred proportionately from your variable investment options including the MSO Holding Accounts.
If after any transfers there would be an insufficient amount in the GIO to cover the Charge Reserve Amount or the Growth Cap Rate for the next available Segment does not qualify per your minimum Growth Cap Rate instructions and the conditions listed above, then your amount in the applicable MSO Holding Account will remain there until we receive further instruction from you. We will mail you a notice informing you that your account value did or did not transfer from the applicable MSO Holding Account into a Segment. These notices are mailed on or about the next business day after the applicable Segment Start Date.
By allocating your account value to the Segments offered under the MSO, you can participate in the performance of the Index generally up to the applicable Growth Cap Rate that we declare on the Segment Start Date.
Please note that this means you will not know the Growth Cap Rate for a new Segment until after the account value
has been transferred from the applicable MSO Holding Account into the Segment and you are not allowed to transfer the account value out of a Segment before the Segment Maturity Date. Please see Transfers below.
Each Segment of each Indexed Option is likely to have a different Growth Cap Rate. The Growth Cap Rate for the Standard Indexed Option with -10% Segment Buffer will never be less than 5%. The Growth Cap Rate for the Standard Indexed Option with -15% Segment Buffer will never be less than 4.5%. The Growth Cap Rate for the Standard Indexed Option with -20% Segment Buffer will never be less than 4.25%. The Growth Cap Rate for the Dual Direction and Step Up Indexed Options will never be less than 4.5%. Any increases in the Growth Cap Rate above the minimum are set at the Companys sole discretion.
As part of your instructions when youve selected the MSO, you may specify what your minimum acceptable Growth Cap Rate is for a Segment of each Indexed Option. If the Growth Cap Rate we set, on the Segment Start Date, is below the minimum you specified then the account value will not be transferred from the applicable MSO Holding Account into that Segment. If you do not specify a minimum Growth Cap Rate then your minimum Growth Cap Rate will be set at the guaranteed minimum Growth Cap Rate for that Indexed Option. Therefore, if you do not specify a minimum acceptable Growth Cap Rate for one or more Indexed Options, account value could transfer into a Segment with a Growth Cap Rate that may be lower than what you would have chosen. In addition, for account value to transfer into a Segment from an MSO Holding Account, the Growth Cap Rate must be greater than the sum of the annual interest rate we are currently crediting on the GIO (A), the current annualized monthly Variable Index Segment Account Charge rate (B) and the current annualized monthly mortality and expense risk charge rate (C). The Growth Cap Rate must be greater than (A+B+C).
You may also subsequently change your minimum Growth Cap Rates by contacting us at our Administrative Office.
Your protection against negative performance for a Segment held until its Segment Maturity Date is currently -10% or -15% or -20% as applicable.
Near the end of the Segment Term, we will notify you between 15 and 45 days before the Segment Maturity Date that a Segment is about to mature. At that time, you may choose to have all or a part of:
(a) the Segment Maturity Value rolled over into the MSO Holding Account for the same Indexed Option; or
(b) the Segment Maturity Value transferred into the MSO Holding Account for one or more other Indexed Options; or
(c) the Segment Maturity Value transferred to the variable investment options available under your policy
(d) the Segment Maturity Value transferred to the GIO.
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If we do not receive your transfer instructions before the Segment Maturity Date, your Segment Maturity Value will automatically be rolled over into the MSO Holding Account of the same Indexed Option for investment in the next available Segment, subject to the conditions listed under Segments above.
However, if we are not offering the same Indexed Option under the MSO at that time, we will transfer the Segment Maturity Value to the investment options available under your policy per your instructions or to the EQ/Money Market investment option if no instructions are received. Although under the variable life insurance policy we reserve the right to apply a transfer charge up to $25 for each transfer among your investment options, there will be no transfer charges for any of the transfers discussed in this section.
We calculate your Segment Maturity Value on the Segment
Maturity Date using your Segment Account Value and the
Index-Linked Rate of Return.
Your Segment Maturity Value for all Segments is calculated as follows:
We multiply your Segment Account Value by your Index-Linked Rate of Return to get your Index-Linked Return. Your Segment Maturity Value is equal to your Segment Account Value plus your Index-Linked Return. Your Index-Linked Return may be negative, in which case your Segment Maturity Value will be less than your Segment Account Value.
For Standard Segments, the Index-Linked Rate of Return is equal to the Index Performance Rate, subject to the Growth Cap Rate, Guaranteed Participation Rate and Segment Buffer, as follows:
Indexed Options Standard | ||
If the Index Performance Rate multiplied by the Guaranteed Participation Rate: | Then the Index-Linked Rate of Return will be: | |
Is greater than the Growth Cap Rate for the Segment Term | Equal to the Growth Cap Rate | |
Is greater than or equal to 0% but less than or equal to the Growth Cap Rate for the Segment Term | Equal to the Index Performance Rate multiplied by Guaranteed Participation Rate | |
Is less than 0% but greater than or equal to the Segment Buffer for the Segment Term | Equal to 0% | |
Is less than the Segment Buffer for the Segment Term | Equal to the Index Performance Rate multiplied by the Guaranteed Participation Rate, less the Segment Buffer |
These values are based on the value of the relevant Index on the Segment Start Date and the Segment Maturity Date. Any fluctuations in the value of the Index between those dates is ignored in calculating the Index-Linked Rate of Return.
For Step Up Segments, the Index-Linked Rate of Return is equal to:
| the Growth Cap Rate if the Index Performance Rate (the percentage change in the value of the related Index from the Segment Start Date to the Segment Maturity Date) is greater than or equal to zero or |
| the Index Performance Rate if the Index Performance Rate is negative, subject to the Segment Buffer, as follows: |
Indexed Option Step Up | ||
If the Index Performance Rate multiplied by the Guaranteed Participation Rate: | Then the Index-Linked Rate of Return will be: | |
Is greater than the Growth Cap Rate for the Segment Term | Equal to the Growth Cap Rate | |
Is greater than or equal to 0% but less than or equal to the Growth Cap Rate for the Segment Term | Equal to the Growth Cap Rate | |
Is less than 0% but greater than or equal to the Segment Buffer for the Segment Term | Equal to 0% | |
Is less than the Segment Buffer for the Segment Term | Equal to the Index Performance Rate multiplied by the Guaranteed Participation Rate, less the Segment Buffer |
These values are based on the value of the relevant Index on the Segment Start Date and the Segment Maturity Date. Any fluctuations in the value of the Index between those dates is ignored in calculating the Index-Linked Rate of Return.
Please note: Because of the way Index-Linked Rate of Return is calculated for Step Up Segments, when the Index Performance Rate is near zero, a very small difference in the Index Performance Rate on the Segment Maturity Date can result in a very different Index-Linked Rate of Return. For example, if the Growth Cap Rate is 8.00% and the Index Performance Rate is 0.00% on the Segment Maturity Date, the Index-Linked Rate of Return would be 8.00% whereas, if the Index Performance Rate is -0.01% on the Segment Maturity Date the Index-Linked Rate of Return is 0.00%.
For Dual Direction Segments, the Index-Linked Rate of Return is equal to the Index Performance Rate subject to the Growth Cap Rate for positive and flat Index Performance Rates and the absolute value of negative Index Performance Rates unless the Index Performance Rate is less than the
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Segment Buffer in which case it is equal to the Index Performance Rate subject to the Segment Buffer as follows:
Indexed Option Dual Direction | ||
If the Index Performance Rate multiplied by the Guaranteed Participation Rate: | Then the Index-Linked Rate of Return will be: | |
Is greater than the Growth Cap Rate for the Segment Term | Equal to the Growth Cap Rate | |
Is greater than or equal to 0% but less than or equal to the Growth Cap Rate for the Segment Term | Equal to the Index Performance Rate multiplied by the Guaranteed Participation Rate | |
Is less than 0% but greater than or equal to the Segment Buffer for the Segment Term | Equal to the absolute value* of the Index Performance Rate multiplied by Guaranteed Participation Rate | |
Is less than the Segment Buffer for the Segment Term | Equal to the Index Performance Rate multiplied by the Guaranteed Participation Rate, less the Segment Buffer |
* | For purposes of the MSO, the absolute value of any amount is the non-negative value of that amount without regard to its mathematical sign (positive or negative). If the Index Performance Rate is negative and if the absolute value of the Index Performance Rate is greater than the Growth Cap Rate and less than the absolute value of the Segment Buffer, then the resulting Index-Linked Rate of Return may be greater than the Growth Cap Rate. |
Please note:
| Because of the way the Index-Linked Rate of Return is calculated for Dual Direction Segments, when the Index Performance Rate is near the Segment Buffer, a very small difference in the Index Performance Rate on the Segment Maturity Date can result in a very different Index-Linked Rate of Return. For example, for a 1-year Dual Direction Segment with a -10% Segment Buffer, if the Index Performance Rate is -10.00% on the Segment Maturity Date the Index-Linked Rate of Return is 10.00% whereas, if the Index Performance Rate is -10.01% on the Segment Maturity Date the Index-Linked Rate of Return is -0.01%. |
| Because of the way the Index-Linked Rate of Return is calculated for Dual Direction Segments, in certain situations the Index-Linked Rate of Return may be greater for negative Index Performance Rates than for the corresponding positive Index Performance Rates. For example, for a 1-year Dual Direction Segment with a Growth Cap Rate of 7% and a -10% Segment Buffer, if the Index Performance Rate is -9% on the Segment Maturity Date the Index-Linked Rate of Return is 9% whereas, if the Index Performance Rate is 9% on the Segment Maturity Date the Index-Linked Rate of Return is 7%. |
Standard Segment Examples
Assume that you have a variable life insurance policy with a policy account value of $100,000 and invest $1,000 in an S&P 500 Price Return Index, 1-year Standard Segment with a -10% Segment Buffer, we set the Growth Cap Rate for that Segment at 10%, and you make no Early Distributions from the Segment.
If the S&P 500 Price Return Index is 20% higher on the Segment Maturity Date than on the Segment Start Date, you will receive a 10% Index-Linked Rate of Return, and your Segment Maturity Value would be $1,100.00. We reach that amount as follows:
| The Index Performance Rate (20%) is greater than the Growth Cap Rate (10%), so the Index-Linked Rate of Return (10%) is equal to the Growth Cap Rate. |
| The Index-Linked Return ($100.00) is equal to the Segment Account Value ($1,000) multiplied by the Index-Linked Rate of Return (10.00%). |
| The Segment Maturity Value ($1,100.00) is equal to the Segment Account Value ($1,000) plus the Index-Linked Return ($100.00). |
If the S&P 500 Price Return Index is only 5% higher on the Segment Maturity Date than on the Segment Start Date, then you will receive a 5% Index-Linked Rate of Return, and your Segment Maturity Value would be $1,050.00. We reach that amount as follows:
| The Index Performance Rate (5%) is less than the Growth Cap Rate (10%), so the Index-Linked Rate of Return (5%) is equal to the Index Performance Rate. |
| The Index-Linked Return ($50.00) is equal to the Segment Account Value ($1,000) multiplied by the Index-Linked Rate of Return (5%). |
| The Segment Maturity Value ($1,050.00) is equal to the Segment Account Value ($1,000) plus the Index-Linked Return ($50.00). |
If the S&P 500 Price Return Index is 5% lower on the Segment Maturity Date than on the Segment Start Date, then you will receive a 0% Indexed-Linked Rate of Return, and your Segment Maturity Value would be $1,000.00. We reach that amount as follows:
| The Index Performance Rate is -5% and the Segment Buffer absorbs the first 10% of negative performance, so the Index-Linked Rate of Return is 0%. |
| The Index-Linked Return ($0) is equal to the Segment Account Value ($1,000) multiplied by the Index-Linked Rate of Return (0%). |
| The Segment Maturity Value ($1,000.00) is equal to the Segment Account Value ($1,000) plus the Index-Linked Return ($0). |
If the S&P 500 Price Return Index is 15% lower on the Segment Maturity Date than on the Segment Start Date,
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then you will receive a -5% Index-Linked Rate of Return, and your Segment Maturity Value would be $950.00. We reach that amount as follows:
| The Index Performance Rate is -15% and the Segment Buffer absorbs the first 10% of negative performance, so the Index-Linked Rate of Return is -5%. |
| The Index-Linked Return (-$50.00) is equal to the Segment Account Value ($1,000) multiplied by the Index-Linked Rate of Return (-5%). |
| The Segment Maturity Value ($950.00) is equal to the Segment Account Value ($1,000) plus the Index-Linked Return (-$50.00). |
Step Up Segment Examples
Assume that you have a variable life insurance policy with a policy account value of $100,000 and invest $1,000 in an S&P 500 Price Return Index Step Up, 1-year Segment with a -10% Segment Buffer, we set the Growth Cap Rate for that Segment at 8%, and you make no Early Distributions from the Segment.
If the S&P 500 Price Return Index is 10% higher on the Segment Maturity Date than on the Segment Start Date, you will receive an 8% Segment Indexed-Linked Rate of Return, and your Segment Maturity Value would be $1,080.00. We reach that amount as follows:
| The Index Performance Rate (10%) is greater than or equal to zero, so the Indexed-Linked Rate of Return (8%) is equal to the Growth Cap Rate. |
| The Index-Linked Return ($80.00) is equal to the Segment Account Value ($1,000) multiplied by the Indexed-Linked Rate of Return (8%). |
| The Segment Maturity Value ($1,080.00) is equal to the Segment Account Value ($1,000) plus the Index-Linked Return ($80.00). |
If the S&P 500 Price Return Index is flat (0% return) on the Segment Maturity Date, you will receive an 8% Index-Linked Rate of Return, and your Segment Maturity Value would be $1,080.00. We reach that amount as follows:
| The Index Performance Rate (0%) is greater than or equal to zero, so the Indexed-Linked Rate of Return (8%) is equal to the Growth Cap Rate. |
| The Indexed-Linked Return ($80.00) is equal to the Segment Account Value ($1,000) multiplied by the Index-Linked Rate of Return (8%). |
| The Segment Maturity Value ($1,080.00) is equal to the Segment Account Value ($1,000) plus the Index-Linked Return ($80.00). |
If the S&P 500 Price Return Index is 15% lower on the Segment Maturity Date than on the Segment Start Date, then you will receive a -5% Indexed-Linked Rate of Return, and your Segment Maturity Value would be $950.00. We reach that amount as follows:
| The Index Performance Rate is -15% and the Segment Buffer absorbs the first 10% of negative performance, so the Indexed-Linked Rate of Return is -5%. |
| The Segment Indexed-Linked Return (-$50.00) is equal to the Segment Account Value ($1,000) multiplied by the Index-Linked Rate of Return (-5%). |
| The Segment Maturity Value ($950.00) is equal to the Segment Account Value ($1,000) plus the Index-Linked Return (-$50.00). |
Dual Direction Segment Examples
Assume that you have a variable life insurance policy with a policy account value of $100,000 and invest $1,000 in an S&P 500 Price Return Index Dual Direction, 1-year Segment with a -10% Segment Buffer, we set the Growth Cap Rate for that Segment at 9%, and you make no Early Distributions from the Segment.
If the S&P 500 Price Return Index is 20% higher on the Segment Maturity Date than on the Segment Start Date, you will receive a 9% Segment Indexed-Linked Rate of Return, and your Segment Maturity Value would be $1,090.00. We reach that amount as follows:
| The Index Performance Rate (20%) is greater than the Growth Cap Rate (9%), so the Index-Linked Rate of Return (9%) is equal to the Growth Cap Rate. |
| The Indexed-Linked Return ($90.00) is equal to the Segment Account Value ($1,000) multiplied by the Index-Linked Rate of Return (9%). |
| The Segment Maturity Value ($1090.00) is equal to the Segment Account Value ($1,000) plus the Index-Linked Return ($90.00). |
If the S&P 500 Price Return Index is 5% higher on the Segment Maturity Date than on the Segment Start Date, you will receive a 5% Indexed-Linked Rate of Return, and your Segment Maturity Value would be $1,050.00. We reach that amount as follows:
| The Index Performance Rate (5%) is less than the Growth Cap Rate (9%), so the Segment Indexed-Linked Rate of Return (5%) is equal to the Index Performance Rate. |
| The Segment Indexed-Linked Return ($50.00) is equal to the Segment Account Value ($1,000) multiplied by the Segment Rate of Return (5%). |
| The Segment Maturity Value ($1,050.00) is equal to the Segment Account Value ($1,000) plus the Index-Linked Return ($50.00). |
If the S&P 500 Price Return Index is 5% lower on the Segment Maturity Date than on the Segment Start Date, then you will receive a 5% Segment Indexed-Linked Rate of Return, and your Segment Maturity Value would be $1,050.00. We reach that amount as follows:
| The Index Performance Rate is -5% which is not more negative than the Segment Buffer (-10%), so the Segment Rate of Return (5%) is the absolute value of the Index Performance Rate (|-5%|). |
| The Segment Indexed-Linked Return ($50.00) is equal to the Segment Account Value ($1,000) multiplied by the Segment Rate of Return (5%). |
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| The Segment Maturity Value ($1,050.00) is equal to the Segment Account Value ($1,000) plus the Index-Linked Return ($50.00). |
If the S&P 500 Price Return Index is 15% lower on the Segment Maturity Date than on the Segment Start Date,
then you will receive a -5% Segment Indexed-Linked Rate of Return, and your Segment Maturity Value would be $950.00. We reach that amount as follows:
| The Index Performance Rate is -15% and the Segment Buffer absorbs the first 10% of negative performance, so the Indexed-Linked Rate of Return is -5% which is equal to the % exceeding the Segment Buffer (5%). |
| The Indexed-Linked Return (-$50.00) is equal to the Segment Account Value ($1,000) multiplied by the Index-Linked Rate of Return (-5%). |
| The Segment Maturity Value ($950.00) is equal to the Segment Account Value ($1,000) plus the Segment Index-Linked Return (-$50.00). |
We calculate the Index-Linked Return for a Segment by taking the Index-Linked Rate of Return and multiplying it by the Segment Account Value on the Segment Maturity Date. The Segment Account Value is net of any Early Distributions and any corresponding Early Distribution Adjustments. The Segment Account Value does not include the Charge Reserve Amount described in this Prospectus.
The Index-Linked Return is only applied to amounts that remain in a Segment until the Segment Maturity Date. For example, a surrender of your policy before Segment maturity will eliminate any Index-Linked Return and forfeit any positive Index performance.
Before the Segment Maturity Date, if you surrender your policy, take a partial withdrawal or loan from a Segment or have another Early Distribution, we will apply an Early Distribution Adjustment and calculate the Segment Value.
The Segment Value is calculated based on a formula that provides a treatment for an Early Distribution that is designed to be consistent with how distributions at the end of a Segment are treated. Appendix Segment Value Calculation sets forth the calculation formula as well as numerous hypothetical examples. The formula is calculated by adding the fair value of two components. These components provide us with a market value estimate of the risk of loss and the possibility of gain at the end of a Segment. These components are used to calculate the Segment Value. The two components are:
(1) | Fair value of hypothetical fixed instruments; and |
(2) | Fair value of hypothetical derivatives. |
We then compare the sum of the two components above with a limitation based on the Growth Cap Rate. In particular, the Segment Value is never greater than the Segment Account Value multiplied by the portion of the Growth Cap Rate corresponding to the portion of the Segment Term that
has elapsed. This limitation is imposed to discourage owners from withdrawing from a Segment before the Segment Maturity Date where there may have been significant increases in the relevant Index early in the Segment Term. For more information, please see Appendix Segment Value Calculation. Even if the corresponding Index has experienced positive investment performance since the Segment Start Date, because of the factors we take into account in the calculation above, your Segment Value may be lower than your Segment Account Value.
In the event of an Early Distribution even if the Index has experienced positive performance since the Segment Start Date, the EDA may cause you to lose principal and previously credited interest through the calculation of the Segment Value and that loss may be substantial. That is because there is always some risk that the Index would have declined by the Segment Maturity Date such that you would suffer a loss if the Segment were continued (without taking any Early Distribution) until that time. The overall impact of the EDA is to reduce your Segment Account Value and your other policy values.
Important Considerations
When any partial withdrawal, surrender, loan, charge deduction or other distribution is made from a Segment before its Segment Maturity Date, you will forfeit any positive Index performance with respect to these amounts. Instead, any of these pre-Segment Maturity Date distributions will cause an EDA to be applied that will usually result in a reduction in your values. Surrender charges and tax consequences also could apply to Early Distributions. Therefore, you should give careful consideration before taking any such early loan, partial withdrawal or surrender, exercising a rider or allowing the value in your other investment options to fall so low that we must make any monthly deduction from a Segment.
For the reasons discussed above, the Early Distribution Adjustment to the Segment Account Value will usually reduce the amount you would receive when you surrender your policy prior to a Segment Maturity Date. For loans, partial withdrawals and charge deductions, the Early Distribution Adjustment would usually further reduce the account value remaining in the Segment Account Value and therefore decrease the Segment Maturity Value.
Surrender charges and tax consequences can also apply to Early Distributions.
Appendix Segment Value Calculation at the end of this Prospectus provides examples of how the Early Distribution Adjustment is calculated.
There is a current percentage charge of 0.40% of any policy account value allocated to each Segment. We reserve the right to increase or decrease the charge although it will never exceed 1.65%.
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Please see Loans in the Fee Table in this Prospectus for information regarding the loan interest spread for amounts allocated to the MSO you would pay on any policy loan.
The base variable life insurance policys mortality and expense risk charge will also be applicable to a Segment Account Value or any amounts held in the MSO Holding Accounts. Amounts in the MSO Holding Accounts reflect fees and expenses of the EQ/Money Market Portfolio, which are described in the prospectuses for the variable life insurance policy and the EQ/Money Market Portfolio. Please refer to the variable life insurance policy prospectus for more information.
If you elect the Market Stabilizer Option® II, you are required to maintain a minimum amount of policy account value in the GIO to approximately cover the estimated monthly charges for the policy, (including, but not limited to, the MSO and any optional riders) for the Segment Term. This is the Charge Reserve Amount.
The Charge Reserve Amount will be determined on each Segment Start Date as an amount projected to be sufficient to cover all of the policys monthly deductions during the Segment Term, assuming at the time such calculation is made that no interest or investment performance is credited to or charged against the policy account and that no policy changes or additional premium payments are made. The Charge Reserve Amount on other than a Segment Start Date will be the Charge Reserve Amount determined as of the latest Segment Start Date reduced by each subsequent monthly deduction during the longest remaining Segment Term, although it will never be less than zero. This means, for example, that if you are in a Segment (Segment A) and then enter another Segment (Segment B) 6 months later, the Charge Reserve Amount would be re-calculated on the start date of Segment B. The Charge Reserve Amount would be re-calculated to cover all of the policys monthly deductions during the Segment Terms for both Segments A and B.
When you select the MSO, as part of your initial instructions, you will be asked to specify the investment options from which we should transfer the account value to the GIO to meet Charge Reserve Amount requirements, if necessary. No transfer restrictions apply to amounts that you wish to transfer into the GIO to meet the Charge Reserve Amount requirement. If your values in the variable investment options including the MSO Holding Accounts and the unloaned portion of our GIO are insufficient to cover the Charge Reserve Amount, no new Segment will be established. Please see Segments above for more information regarding the Charge Reserve Amount and how amounts may be transferred to meet this requirement.
Please note that the Charge Reserve Amount may not be sufficient to cover actual monthly deductions during the Segment Term. Although the Charge Reserve Amount will be re-calculated on each Segment Start Date, and the amount already present in the GIO will be supplemented
through transfers from your value in the variable investment options including the MSO Holding Accounts, if necessary to meet this requirement, actual monthly deductions could vary up or down during the Segment Term due to various factors including but not limited to requested policy changes, additional premium payments, investment performance, loans, policy partial withdrawals, and any changes we might make to current policy charges.
Please also refer to the variable life insurance policy prospectus for more information.
How we deduct policy monthly charges during a Segment Term
Under your base variable life insurance policy, monthly deductions are allocated to the variable investment options and the GIO according to deduction allocation percentages specified by you or based on a proportionate allocation if any of the individual investment option values are insufficient or if your base policy does not allow you to specify deduction allocation percentages.
However, if the Market Stabilizer Option® II is elected, on the Segment Start Date, deduction allocation percentages will be changed so that 100% of monthly deductions will be taken from the Charge Reserve Amount and then any remaining value in the GIO, if the Charge Reserve Amount is depleted, during the Segment Term. In addition, if the value in the GIO is ever insufficient to cover monthly deductions during the Segment Term, the base policys proportionate allocation procedure will be modified as follows:
1. | The first step will be to take the remaining portion of the deductions proportionately from the values in the variable investment options, including any value in the MSO Holding Accounts but excluding any Segment Account Values. |
2. | If the GIO and variable investment options, including any value in the MSO Holding Accounts, are insufficient to cover deductions in their entirety, the remaining amount will be allocated to the individual Segments proportionately, based on the current Segment Values. |
3. | Any portion of a monthly deduction allocated to an individual Segment will generate a corresponding Early Distribution Adjustment of the Segment Account Value. |
The effect of those procedures is that account value will be taken out of a Segment to pay a monthly deduction (and an EDA therefore applied) only if there is no remaining account value in any other investment options, as listed in 1. and 2. above.
In addition, your base variable life insurance policy will lapse if your net policy account value or net cash surrender value (please refer to your base variable life insurance policy prospectus for a further explanation of these terms) is not enough to pay your policys monthly charges when due (unless one of the available guarantees against termination
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is applicable). If you have amounts allocated to MSO Segments, the Segment Value will be used in place of the Segment Account Value in calculating the net policy account value and net cash surrender value.
These modifications will apply during any period in which a Segment exists and has not yet reached its Segment Maturity Date.
If the Index is discontinued or if the calculation of the Index is substantially changed, we reserve the right to substitute an alternative index. We also reserve the right to choose an alternative index at our discretion.
If we were to substitute an alternative index at our discretion, we would provide notice 45 days before making that change. The new index would only apply to new Segments. Any outstanding Segments would mature on their original Segment Maturity Dates.
With an alternative index, the Segment Buffer could be more or less than the Segment Buffer of other Indexed Options. However, an alternative index may reduce the Growth Cap Rates we can offer. We would attempt to choose a substitute index that has a similar investment objective and risk profile to the S&P 500 Price Return Index.
If the S&P 500 Price Return Index were to be discontinued or substantially changed, thereby affecting the Index-Linked Return of existing Segments, we will mature the Segments based on the most recently available closing value of the Index before it is discontinued or changed. Such maturity will be as of the date of such most recently available closing value of the Index and we will use that closing value to calculate the Index-Linked Return through that date. We would apply the full Index performance to that date subject to the full Growth Cap Rate and downside protection. For example, if the Index was up 12% at the time we matured the Segment and the Segment Buffer was -10% and the Growth Cap Rate was 8%, we would credit an 8% return to your Segment Account Value. If the Index was down 30% at the time we matured the Segment, we would credit a 20% negative return to your Segment Account Value. We would provide notice about maturing the Segment, as soon as practicable and ask for instructions on where to transfer your Segment Maturity Value.
If we are still offering Segments of that Indexed Option at that time, you can request that the Segment Maturity Value be invested in a new Segment of the same Indexed Option, in which case we will hold the Segment Maturity Value in the applicable MSO Holding Account for investment in the next available Segment subject to the same terms and conditions discussed above under MSO Holding Accounts and Segments.
In the case of any of the types of early maturities discussed above, there would be no transfer charges or EDA applied and you can allocate the Segment Maturity Value to the investment options available under your policy. Please see
Segment Maturity in this Prospectus for more information. If we continued offering new Segments, then such a change in the Index may cause lower Growth Cap Rates to be offered. Any new Indexed Option offered as a result of the change in Index would have its own minimum Growth Cap Rate and minimum downside protection, and these new minimums may be more or less than the corresponding minimums for the other Indexed Options. Please see Right to Discontinue and Limit Amounts Allocated to the MSO in this Prospectus.
You can make a transfer at any time to or from the investment options available under your policy subject to any transfer restrictions within your policy. The Company does not impose the policys $25 transfer charge to transfer into and out of the MSO Holding Accounts. Any restrictions applicable to transfers between any MSO Holding Accounts and such investment options would be the same transfer restrictions applicable to transfers between the investment options available under your policy. However, once policy account value has been swept from any MSO Holding Accounts into a Segment, transfers into or out of that Segment before its Segment Maturity Date will not be permitted. In order to transfer account value to the MSO, there must be sufficient funds remaining in the guaranteed interest option following the transfer to cover the Charge Reserve Amount. Please note that while a Segment is in effect, before the Segment Maturity Date, the amount available for transfers from the GIO will be limited to avoid reducing the GIO below the remaining Charge Reserve Amount.
Thus the amount available for transfers from the GIO will not be greater than any excess of the GIO over the remaining Charge Reserve Amount.
Please also refer to the variable life insurance policy prospectus for more information.
Please see the variable life insurance policy prospectus for information regarding partial withdrawal provisions.
If permitted by your base policy, you may specify how your partial withdrawal is to be allocated among the MSO, the variable investment options, and the GIO. Any portion of a requested partial withdrawal allocated to the MSO will be redeemed from the individual Segments and the MSO Holding Accounts proportionately, based on the value of each MSO Holding Account and the current Segment Values of each Segment.
If a Segment is in effect, and if you do not specify or if we cannot allocate the partial withdrawal according to your specifications, we will allocate the partial withdrawal proportionately from your values in the GIO (excluding the Charge Reserve Amount) and your values in the variable investment options including the MSO Holding Accounts.
If the GIO (excluding the remaining amount of the Charge Reserve Amount), together with the variable investment options including any value in the MSO Holding
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Accounts, are insufficient to cover the partial withdrawal in its entirety, the remaining amount of the partial withdrawal will be allocated to the individual Segments proportionately, based on current Segment Values.
Any portion of a partial withdrawal allocated to an individual Segment will generate a corresponding Early Distribution Adjustment of the Segment Account Value.
If the GIO (excluding the remaining amount of the Charge Reserve Amount), together with the variable investment options including any value in the MSO Holding Accounts and the Segment Values, are still insufficient to cover the partial withdrawal in its entirety, the remaining amount of the partial withdrawal will be allocated to the GIO and will reduce or eliminate the remaining Charge Reserve Amount.
Cash Surrender Value, Net Cash Surrender Value and Loan Value
If you have amounts allocated to MSO Segments, the Segment Values will be used in place of the Segment Account Values in calculating the amount of any cash surrender value, net cash surrender value and maximum amount available for loans. This means an EDA would apply to those amounts. Please see Appendix Segment Value Calculation for more information.
For policies that use the Guideline Premium Test, a new Segment will not be established or created if we determine, when we process your election, that a distribution from the policy will be required to maintain its qualification as life insurance under federal tax law at any time during the Segment Term.
However, during a Segment Term if a distribution becomes necessary under the force-out rules of Section 7702 of the Internal Revenue Code, it will be deducted proportionately from the values in the GIO (excluding the Charge Reserve Amount) and in any variable investment option, including any value in the MSO Holding Accounts but excluding any Segment Account Values.
If the GIO (excluding the Charge Reserve Amount) and variable investment options, including any value in the MSO Holding Accounts, are insufficient to cover the force-out in its entirety, any remaining amount required to be forced out will be taken from the individual Segments proportionately, based on the current Segment Values.
Any portion of a force-out distribution taken from an individual Segment will generate a corresponding Early Distribution Adjustment of the Segment Account Value.
If the GIO (excluding the remaining Charge Reserve Amount), together with the variable investment options including any value in the MSO Holding Accounts, and the Segment Values, is still insufficient to cover the force-out in its entirety, the remaining amount of the force-out will be allocated to the GIO and reduce or eliminate any remaining Charge Reserve Amount under the GIO.
Please see the variable life insurance policy prospectus for information regarding policy loan provisions. The maximum loan interest rate that will be charged to the amounts you borrow for a policy year shall be the greater of (1) the Published Monthly Average, as defined below, for the calendar month that ends two months before the date of determination and (2) the guaranteed minimum interest crediting rate for the Guaranteed Interest Option plus 1% per year. Published Monthly Average means the Moodys Corporate Bond Yield Average - Monthly Average Corporates published by Moodys Investors Service, Inc., or any successor to it.
You may specify how your loan is to be allocated among the MSO, the variable investment options and the GIO. Any portion of a requested loan allocated to the applicable MSO will be redeemed from the individual Segments and the applicable MSO Holding Accounts proportionately, based on the value of the applicable MSO Holding Accounts and the current Segment Values of each Segment. The loan interest spread is the difference between the interest rate we charge on the amounts borrowed and the interest rate credited on amounts held as collateral. Please see your variable insurance policy for the applicable guaranteed minimum interest rate credited on loan collateral.
If a Segment is in effect, and if you do not specify or if we cannot allocate the loan according to your specifications, we will allocate the loan proportionately from your values in the GIO (excluding the Charge Reserve Amount) and your values in the variable investment options including the MSO Holding Accounts.
If the GIO (excluding the remaining amount of the Charge Reserve Amount), together with the variable investment options including any value in the MSO Holding Accounts, are insufficient to cover the loan in its entirety, the remaining amount of the loan will be allocated to the individual Segments proportionately, based on current Segment Values.
Any portion of a loan allocated to an individual Segment will generate a corresponding Early Distribution Adjustment of the Segment Account Value.
If the GIO (excluding the remaining amount of the Charge Reserve Amount), together with the variable investment options including any value in the MSO Holding Accounts and the Segment Values, are still insufficient to cover the loan in its entirety, the remaining amount of the loan will be allocated to the GIO and will reduce or eliminate the remaining Charge Reserve Amount.
Loan interest is due on each policy anniversary. If the interest is not paid when due, it will be added to your outstanding loan and allocated on the same basis as monthly deductions. See How we deduct policy monthly charges during a Segment Term.
Loan repayments will first be used to restore any amounts that, before being designated as loan collateral, had been in
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the GIO. Any portion of an additional loan repayment allocated to the MSO at the policy owners direction (or according to premium allocation percentages) will be transferred to the applicable MSO Holding Account to await the next available Segment Start Date and will be subject to the same conditions described in this Prospectus.
If you are invested in MSO, you may also elect the Asset Rebalancing Service. However, any amounts allocated to the MSO will not be included in the rebalance transactions. The investment options available to your Asset Rebalancing Service do not include the MSO Holding Accounts or Segments. Please see the variable life insurance policy prospectus for more information.
Your right to cancel within a certain number of days
Please refer to the variable insurance policy prospectus for more information regarding your right to cancel your policy within a certain number of days and the Investment Start Date, which is the business day your investment first begins to earn a return for you. However, the policy prospectus provisions that address when amounts will be allocated to the investment options do not apply to amounts allocated to the MSO.
In those states that require us to return your premium without adjustment for investment performance within a certain number of days, we will initially put all amounts which you have allocated to the MSO into our EQ/Money Market investment option. If we have received all necessary requirements for your policy as of the day your policy is issued, on the first business day following the later of the twentieth day after your policy is issued or the Investment Start Date (30th day in most states if your policy is issued as the result of a replacement), we will reallocate those amounts to the applicable MSO Holding Account where they will remain until the next available Segment Start Date, at which time such amounts will be transferred to a new Segment of the MSO subject to meeting the conditions described in this Prospectus. However, if we have not received all necessary requirements for your policy as of the day your policy is issued, we will re-allocate those amounts to the MSO Holding Account for the applicable Indexed Option on the 20th day (longer if your policy is issued as the result of a replacement) following the date we receive all necessary requirements to put your policy in force at our Administrative Office. Your financial professional can provide further information on what requirements may apply to your policy.
In all other states, any amounts allocated to the MSO will first be allocated to the applicable MSO Holding Account where they will remain for 20 days (unless the policy is issued as the result of a replacement, in which case amounts in the applicable MSO Holding Account will remain there for 30 days (45 days in Pennsylvania)). Thereafter, such amounts will be transferred to a new Segment of the MSO on the next available Segment Start Date, subject to meeting the conditions described in this Prospectus.
Right to Discontinue and Limit Amounts Allocated to the MSO
We reserve the right to restrict or terminate future allocations to the Indexed Options of the MSO at any time. If this right were ever to be exercised by us, all Segments outstanding as of the effective date of the restriction would be guaranteed to continue uninterrupted until the Segment Maturity Date. As each such Segment matured, the balance would be reallocated to the GIO and/or variable investment options per your instructions, or to the EQ/Money Market investment option if no instructions are received. We may also temporarily suspend offering Segments at any time and for any reason including emergency conditions as determined by the Securities and Exchange Commission. We also reserve the right to establish a maximum amount for any single policy that can be allocated to the Indexed Options of the MSO.
Impact of MSO Election on Other Policy Riders and/or Services
| If your policy has the Policy Continuation Rider, and your policy goes on Policy Continuation while you have amounts invested in the Indexed Options of the MSO, you will forfeit any positive Index performance and be subject to an Early Distribution Adjustment with respect to these amounts. If there is any amount remaining in the net policy account value after the Policy Continuation Rider charge has been deducted, such amounts are treated as an additional loan and refunded to you so there will be no amounts in the variable investment options or the MSO. In addition, MSO will no longer be available once you go on Policy Continuation. |
| If you exercise the Long-Term Care ServicesSM Rider, after a period of coverage ends any MSO Segments will be terminated with corresponding Early Distribution Adjustments and you will forfeit any positive Index performance. Any remaining amounts will be allocated to the variable investment options and the GIO based on your premium allocation percentages then in effect. |
| If a Living Benefits Rider or an accelerated death benefit rider (which may be referred to as a total and permanent disability accelerated death benefit rider or a limited life expectancy accelerated death benefit rider) is exercised, the portion of the cash surrender value that is on lien and is allocated to your values in the variable investment options under your policy and investment in the MSO will be transferred to and maintained as part of the GIO. |
You may tell us how much of the accelerated payment is to be transferred from your value in each variable investment option and your value in the MSO. Units will be redeemed from each variable investment option sufficient to cover the amount of the accelerated payment that is allocated to it and transferred to the GIO.
Any portion of the payment allocated to the MSO based on your instructions will be deducted from any value in the applicable MSO Holding Accounts and the
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individual Segments on a pro-rata basis, based on any value in the MSO Holding Accounts and the current Segment Value of each Segment, and transferred to the GIO.
Any portion of the payment allocated to an individual Segment will cause a corresponding Early Distribution Adjustment of the Segment Account Value and a forfeit of some Index performance. If you do not tell us how to allocate the payment, or if we cannot allocate it based on your directions, we will allocated it based on our rules then in effect. Allocation rules will be provided upon request. Such transfers will occur as of the date we approve an accelerated death benefit payment. There will be no charge for such transfers.
Amounts allocated to the Equitable Financial Life Insurance Company MSO are held in a non-unitized separate account we have established under the New York Insurance Law. We own the assets of the separate account, as well as any favorable investment performance on those assets.
You do not participate in the performance of the assets held in this separate account. We may, subject to state law that applies, transfer all assets allocated to the separate account to our general account. These assets are also available to the insurers general creditors and an owner should look to the financial strength of the Company for its claims-paying ability. We guarantee all benefits relating to your value in the MSO, regardless of whether assets supporting the MSO are held in a separate account or our general account.
Our current plans are to invest separate account assets in fixed income obligations, including corporate bonds, mortgage backed and asset-backed securities, and government and agency issues. Futures, options and interest rate swaps may be used for hedging purposes.
Although the above generally describes our plans for investing the assets supporting our obligations under MSO, we are not obligated to invest those assets according to any particular plan except as we may be required to by state insurance laws.
Amounts allocated to the Equitable Financial Life Insurance Company of America MSO are held in a non-unitized separate account we have established under the Commissioner of Insurance in the State of Arizona. We own the assets of the separate account, as well as any favorable investment performance on those assets.
You do not participate in the performance of the assets held in this separate account. We may, subject to state law that applies, transfer all assets allocated to the separate account to our general account. These assets are also available to the insurers general creditors and an owner should look to the financial strength of the Company for its claims-paying ability. We guarantee all benefits relating to your value in the MSO, regardless of whether assets supporting the MSO are held in a separate account or our general account.
Our current plans are to invest separate account assets in fixed-income obligations, including corporate bonds, mortgage-backed and asset-backed securities, and government and agency issues. Futures, options and interest rate swaps may be used for hedging purposes.
Although the above generally describes our plans for investing the assets supporting our obligations under MSO, we are not obligated to invest those assets according to any particular plan except as we may be required to by state insurance laws.
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The policy is distributed by both Equitable Advisors and Equitable Distributors. The Distributors serve as principal underwriters of Separate Account FP and Variable Account K. The offering of the policy is intended to be continuous.
The MSO is available only under the policy issued by the Company. Extensive information about the arrangements for distributing the variable life insurance policy, including sales compensation, is included under Distribution of the policy in the variable life insurance policy prospectus and in the statement of additional information. All of that information applies regardless of whether you choose to use the MSO, and there is no additional plan of distribution or sales compensation with respect to the MSO. There is also no change to the information regarding the fact that the principal underwriter(s) is an affiliate of the Company or an indirect wholly owned subsidiary of the Company.
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7. Incorporation of certain documents by reference
Equitable Financial Life Insurance Companys Annual Report on Form 10-K and Equitable Financial Life Insurance Company of Americas Annual Report on Form 10-K for the period ended December 31, 2021 (the Annual Report) is considered to be part of this Prospectus because it is incorporated by reference.
The Company files reports and other information with the SEC, as required by law. You may read and copy this information at the SECs public reference facilities at Room 1580, 100 F Street, NE, Washington, DC 20549, or by accessing the SECs website at www.sec.gov. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Under the Securities Act of 1933, the Company has filed with the SEC a registration statement relating to the Market Stabilizer Option® II (the Registration Statement). This Prospectus has been filed as part of the Registration Statement and does not contain all of the information set forth in the Registration Statement.
After the date of this Prospectus and before we terminate the offering of the securities under the Registration Statement, all documents or reports we file with the SEC under the Securities Exchange Act of 1934 (Exchange Act), will be considered to become part of this Prospectus because they are incorporated by reference.
Any statement contained in a document that is or becomes part of this Prospectus, will be considered changed or replaced for purposes of this Prospectus if a statement contained in this Prospectus changes or is replaced. Any statement that is considered to be a part of this Prospectus because of its incorporation will be considered changed or replaced for the purpose of this Prospectus if a statement contained in any other subsequently filed document that is considered to be part of this Prospectus changes or replaces that statement. After that, only the statement that is changed or replaced will be considered to be part of this Prospectus.
We file the Registration Statement and our Exchange Act documents and reports, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, electronically according to EDGAR. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding registrants that file electronically with the SEC. The address of the site is www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each person to whom this Prospectus is delivered, a copy of any or all of the documents considered to be part of this Prospectus because they are incorporated herein. In accordance with SEC rules, we will provide copies of any exhibits specifically incorporated by reference into the text of
the Exchange Act reports (but not any other exhibits). Requests for documents should be directed to:
Equitable Financial Life Insurance Company
1290 Avenue of the Americas
New York, NY 10104
Equitable Financial Life Insurance Company of America
525 Washington Boulevard
Jersey City, NJ 07310
Attention: Corporate Secretary (telephone: (212) 554-1234) You can access our website at www.equitable.com.
Independent Registered Public Accounting Firm
The consolidated financial statements and financial statement schedules of Equitable Financial Life Insurance Company incorporated in this Prospectus by reference to the Annual Report on Form 10-K for the year ended December 31, 2021 have been so incorporated in reliance on the report of an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
provides independent audit services and certain other non-audit services to Equitable Financial Life Insurance Company as permitted by the applicable SEC independence rules, and as disclosed in Equitable Financial Life Insurance Companys Form 10-K. .
The consolidated financial statements and financial statement schedules of Equitable Financial Life Insurance Company of America incorporated in this Prospectus by reference to the Annual Report on Form 10-K for the year ended December 31, 2021 have been so incorporated in reliance on the report of , an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
provides independent audit services and certain other non-audit services to Equitable Financial Life Insurance Company of America as permitted by the applicable SEC independence rules, and as disclosed in Equitable Financial Life Insurance Company of Americas Form 10-K. .
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Appendix: Segment Value Calculation
We calculate the Segment Value for each Segment on each Segment Business Day that falls between the Segment Start Date and Segment Maturity Date. The calculation is a formula designed to measure the fair value of your Segment Account Value on the particular interim date, and is based on the downside protection provided by the Segment Buffer, the limit on participation in investment gain provided by the Growth Cap Rate and the Guaranteed Participation Rate, an adjustment for the effect of a withdrawal (which also includes a surrender, loan payment or deduction for monthly charges) prior to the Segment Maturity Date. The formula we use, in part, derives the estimated current value of hypothetical investments in fixed instruments and derivatives. These values provide us with protection from the risk that we will have to pay out account value related to a Segment prior to the Segment Maturity Date. The hypothetical put option provides us with a market value of the potential loss at Segment maturity, and the hypothetical call options provide us with a market value of the potential gain at Segment maturity. This formula provides a treatment for an early distribution that is designed to be consistent with how distributions at the end of a Segment are treated. We are not required to hold such investments in relation to Segments and may or may not choose to do so. You are not affected by the performance of any of our investments (or lack thereof) relating to Segments. This Appendix sets forth the actual calculation formula, an overview of the purposes and impacts of the calculation, and detailed descriptions of the specific inputs into the calculation. You should note that even if a corresponding Index has experienced positive growth, the calculation of your Segment Value may result in an amount lower than your Segment Account Value. We have included examples of calculations of Segment Values under various hypothetical situations at the end of this Appendix.
Calculation Formula
Your Segment Value is equal to the lesser of (A) or (B) where:
(A) | equals the sum of the following two components: |
(1) | Fair Value of hypothetical Fixed Instruments; plus |
(2) | Fair Value of hypothetical Derivatives |
(B) | equals the Segment Account Value multiplied by (1 + the Growth Cap Rate limiting factor). |
Overview of the Purposes and Impacts of the Calculation
Fair Value of Hypothetical Fixed Instruments. The Segment Value formula includes an element designed to compensate us for the fact that when we have to pay out account value related to a Segment before the Segment Maturity Date, we forgo the opportunity to earn interest on the Segment Account Value from the date of withdrawal (which also includes a surrender, loan payment or deduction for monthly charges) until the Segment Maturity Date. We accomplish this estimate by calculating the present value of the Segment Account Value using an investment rate widely used in financial markets.
Fair Value of Hypothetical Derivatives. For Standard Segments we use hypothetical put and call options that are designated for each Segment to estimate the market value, at the time the Segment Value is calculated, of the risk of loss and the possibility of gain at the end of the Segment. This calculation reflects the value of the downside protection that would be provided at maturity by the Segment Buffer as well as the upper limit that would be placed on gains at maturity due to the Growth Cap Rate. For Step Up Segments, we use a hypothetical put and binary call option to estimate the market value, at the time the Segment Value is calculated, of the risk of loss and the possibility of gain at the end of the Segment. This calculation reflects the downside protection that would be provided at maturity by the Segment Buffer as well as the potential upside payout at maturity equal to the Growth Cap Rate. For Dual Direction Segments, we use hypothetical put, call and binary put options to estimate the market value, at the time the Segment Value is calculated, of the risk of loss and the possibility of gain at the end of the Segment.
When valuing the hypothetical Derivatives as part of the Segment Value Calculation, we use inputs that are consistent with market prices that reflect the estimated cost of exiting the hypothetical Derivatives before Segment maturity. See the Fair Value of Hypothetical Derivatives in Detailed Descriptions of Specific Inputs to the Calculation. Our fair market value methodology, including the market standard model we use to calculate the fair value of the hypothetical Derivatives for each particular Segment, may result in a fair value that is higher or lower than the fair value other methodologies and models would produce. Our fair value may also be higher or lower than the actual market price of the identical derivatives. As a result, the Segment Value you receive may be higher or lower than what other methodologies and models would produce.
At the time the Segment Value is determined, the Fair Value of Hypothetical Derivatives for Standard Segments is calculated using three different hypothetical options. These hypothetical options are designated for each Standard Segment and are described in more detail in this Appendix.
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At-the-Money Segment Call Option (strike price equals the index value at Segment inception). For Standard Segments, the potential for gain is estimated using the value of this hypothetical option.
Out-of-the-Money Call Option (strike price equals the index increased by the Growth Cap Rate). The potential for gain in excess of the Growth Cap Rate is estimated using the value of this hypothetical option.
| For Standard Segments, the net amount of the At-the-Money Segment Call Option less the value of the Out-of-the-Money Call Option is an estimate of the market value of the possibility of gain at the end of the Segment as limited by the Growth Cap Rate. |
Out-of-the-Money Put Option (strike price equals the index decreased by the Segment Buffer). The risk of loss is estimated using the value of this hypothetical option.
| It is important to note that this put option value will almost always reduce the principal you receive, even where the Index is higher at the time of the withdrawal than at the time of the original investment. This is because the risk that the Index could have been lower at the end of a Segment is present to some extent whether or not the Index has increased at the earlier point in time that the Segment Value is calculated. |
At the time the Segment Value is determined, the estimated current value of Hypothetical Derivatives for Step Up Segments is calculated using two different hypothetical options. These hypothetical options are designated for each Step Up Segment and are described in more detail in this Appendix.
At-the-Money Binary Call Option (strike price equals the index value at Segment inception). For Step Up Segments, the potential gain is estimated using the value of this hypothetical option.
Out-of-the-Money Put Option (strike price equals the index decreased by the Segment Buffer). The risk of loss is estimated using the value of this hypothetical option.
| It is important to note that this put option value will almost always reduce the principal you receive, even where the Index is higher at the time of the withdrawal than at the time of the original investment. This is because the risk that the Index could have been lower at the end of a Segment is present to some extent whether or not the Index has increased at the earlier point in time that the Segment Value is calculated. |
At the time the Segment Value is determined, the Fair Value of Hypothetical Derivatives for Dual Direction Segments is calculated using several different hypothetical options. These hypothetical options are designated for each Dual Direction Segment and are described in more detail below.
At-the-Money Call Option (strike price equals the index value at Segment inception). For Dual Direction Segments, the potential for gain in an up market is estimated using the value of this hypothetical option.
Out-of-the-Money Call Option (strike price equals the index increased by the Growth Cap Rate). The risk of loss is estimated using the value of this hypothetical option.
| For Dual Direction Segments, the net amount of the At-the-Money Call Option less the value of the Out-of-the Money Call Option is an estimate of the market value of the possibility of gain at the end of the Segment in an up market as limited by the Growth Cap Rate. |
Out-of-the-Money Binary Put Option (strike price equals index value at Segment inception minus Segment Buffer). The risk of loss in a down market in excess of the Segment Buffer is estimated using the value of this hypothetical option.
| For Dual Direction Segments, the other Out-of-the-Money Put Option combined with the Out-of-the-Money Binary Put Option is an estimate of the market value of the possibility of loss at the end of the Segment in a down market in excess of the Segment Buffer. |
| It is important to note that the Out-of-the-Money put option value and binary put option value will almost always reduce the Segment Value, even where the Index is higher at the time of the withdrawal than at the time of the original investment. This is because the risk that the Index could have been lower at the end of a Segment is present to some extent whether or not the Index has increased at the earlier point in time that the Segment Value is calculated. |
Growth Cap Rate limiting factor. The formula provides that the Segment Value is never greater than (B) above, which is the portion of the Growth Cap Rate corresponding to the portion of the Segment Term that has elapsed. The application of the Growth Cap Rate is an adjustment which may limit the Segment Value where there may have been significant increases in the relevant Index early in the Segment Term. Although the Growth Cap Rate limiting factor prorates the upside potential on amounts withdrawn early, there is no similar adjustment to pro-rate the down-side protection. This means, if you surrender or cancel your contract, or make withdrawal from a Segment before the Segment Maturity Date, the Segment Buffer will not
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necessarily apply to the extent it would on the Segment Maturity Date, and any upside performance will be limited to a percentage lower than the Growth Cap Rate.
Detailed Descriptions of Specific Inputs to the Calculation
(A)(1) Fair Value of Hypothetical Fixed Instruments. The Fair Value of Hypothetical Fixed Instruments is defined as its present value, as expressed in the following formula: (Segment Account Value)/(1 + rate)(time to maturity)
The time to maturity is expressed as a fraction, in which the numerator is the number of days remaining in the Segment Term and the denominator is the average number of days in each year of the Segment Term for that Segment.
The investment rate, denoted rate in the formula above, will seek to approximate the bond yields used to fund the option budget for this product.
(A)(2) Fair Value of Hypothetical Derivatives. We utilize a fair market value methodology to determine the Fair Value of Hypothetical Derivatives.
For each Standard Segment, we designate and value three hypothetical options, each of which is tied to the performance of the Index underlying the Segment in which you are invested. For Standard Segments, these are: (1) the At-the-Money Call Option, (2) the Out-of-the-Money Call Option and (3) the Out-of-the-Money Put Option. At Segment maturity, the Put Option is designed to value the loss below the Segment Buffer, while the call options are designed to provide gains up to the Growth Cap Rate. These options are described in more detail below.
For each Dual Direction Segment, we designate and value several hypothetical options, each of which is tied to the performance of the Index underlying the Segment in which you are invested. For Dual Direction Segments, these are: (1) the At-the-Money Call Option, (2) Out-of-the-Money Call Option, (3) At-the-Money Put Option, (4) two Out-of-the-Money Put Options and (5) Out-of-the-Money Binary Put Option. At Segment maturity, these hypothetical options are designated to value gains up to the Growth Cap Rate in an up market and down to the Segment Buffer in a down market, as well as, value losses below the Segment Buffer.
For each Step Up Segment, we designate and value two hypothetical options, each of which is tied to the performance of the Index underlying the Segment in which you are invested. For Step Up Segments, these are: (1) the At-the-Money Binary Call Option and (2) the Out-of-the-Money Put Option. At Segment maturity, the binary call option is designed to provide gains equal to the Growth Cap Rate while the put option is designed to value the loss below the Segment Buffer.
In addition to the inputs discussed above, the Fair Value of Hypothetical Derivatives is also affected by the time remaining until the Segment Maturity Date. More information about the designated hypothetical options is set forth below:
For Standard Segments, the estimated current value of Derivatives is equal to (1) minus (2) minus (4), as defined below.
For Dual Direction Segments, the estimated current value of Derivatives is equal to (1) minus (2) plus (3) minus (4) minus (5), as defined below.
(1) | At-the-Money Call Option: This is an option to buy a position in the relevant Index equal to the Segment Account Value on the scheduled Segment Maturity Date, at the price of the Index on the Segment Start Date. At any time during the Segment Term, the fair value of the At-the-Money Call Option represents the market value of the potential to receive an amount in excess of the Segment Account Value on the Segment Maturity Date equal to the percentage growth in the Index between the Segment Start Date and the Segment Maturity Date, multiplied by the Segment Account Value. |
(2) |
Out-of-the-Money Call Option: This is an option to buy a position in the relevant Index equal to the Segment Account Value on the scheduled Segment Maturity Date, at the price of the Index on the Segment Start Date increased by a percentage equal to the Growth Cap Rate. At any time during the Segment Term, the fair value of the Out-of-the-Money Call Option represents the market value of the potential to receive an amount in excess of the Segment Account Value equal to the percentage growth in the Index between the Segment Start Date and the Segment Maturity Date in excess of the Growth Cap Rate, multiplied by the Segment Account Value. The value of this option is used to offset the value of the At-the-Money Call Option, thus recognizing in the interim Segment Value a ceiling on gains at Segment maturity imposed by the Growth Cap Rate. |
(3) | At-the-Money Put Option: This is an option to sell a position in the relevant Index equal to the Segment Account Value on the scheduled Segment Maturity Date, at the price of the Index on the Segment Start Date. At any time during the Segment Term, the fair value of the At-the-Money Put Option represents the market value of the potential to receive an amount equal to the negative return of the Index between the Segment Start Date and the Segment Maturity Date, multiplied by the Segment Account Value. |
(4) |
Out-of-the-Money Put Option (Dual Direction Segments use two of these options): This is an option to sell a position in the relevant Index equal to the Segment Account Value on the scheduled Segment Maturity Date, at the price of the Index on |
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the Segment Start Date decreased by a percentage equal to the Segment Buffer. At any time during the Segment Term, the fair value of the Out-of-the-Money Put Option represents the market value of the potential to receive an amount equal to the excess of the negative return of the Index between the Segment Start Date and the Segment Maturity Date beyond the Segment Buffer, multiplied by the Segment Account Value. The value of one Out-of-the-Money Put option is used to off-set the value of the At-the-Money Put Option, and the value of the other Out-of-the-Money Put Option is used to value the potential losses that may be incurred in excess of the Segment Buffer at Segment maturity. |
(5) |
Out-of-the-Money Binary Put Option: This is a requirement to pay the absolute value of the Segment Buffer multiplied by the Segment Account Value on the scheduled Segment Maturity Date, if the index price is lower than the index price on the Segment Start Date decreased by a percentage equal to the Segment Buffer. At any time during the Segment Term, the fair value of the Out-of-the-Money Binary Put Option represents the market value of the potential to receive the absolute value of the Segment Buffer multiplied by the Segment Account Value on the Segment Maturity Date. |
For Step Up Segments, the estimated current value of Derivatives is equal to (1) minus (2), as defined below.
(1) | At-the-Money Binary Call Option: This is an option to receive the Growth Cap Rate on the scheduled Segment Maturity Date, if the index price is at or higher than the index price on the Segment Start Date. At any time during the Segment Term, the fair value of the At-the-Money Binary Call Option represents the market value of the potential to receive the Growth Cap Rate on the Segment Maturity Date, multiplied by the Segment Account Value. |
(2) |
Out-of-the-Money Put Option: This is an option to sell a position in the relevant Index equal to the Segment Account Value on the scheduled Segment Maturity Date, at the price of the Index on the Segment Start Date decreased by a percentage equal to the Segment Buffer. At any time during the Segment Term, the fair value of the Out-of-the-Money Put Option represents the market value of the potential to receive an amount equal to the excess of the negative return of the Index between the Segment Start Date and the Segment Maturity Date beyond the Segment Buffer, multiplied by the Segment Account Value. The value of this option reduces the interim Segment Value, as it reflects losses that may be incurred in excess of the Segment Buffer at Segment maturity. |
We determine the fair value of each of the applicable designated hypothetical options for a Standard Segment, Step Up Segment or Dual Direction Segment using a market standard model for valuing a European option on the Index, assuming a continuous dividend yield or net convenience value, with inputs that are consistent with market prices that reflect the estimated cost of exiting the hypothetical Derivatives prior to Segment maturity (e.g., the estimated ask price). If we did not take into account the estimated exit price, your Segment Value would be greater. In addition, the estimated fair value price used in the Segment Value Calculation may vary higher or lower from other estimated prices and from what the actual selling price of identical derivatives would be at any time during each Segment. If our estimated price is lower than the price under other fair market estimates or for actual transactions, then your Segment Value will be less than if we used those other prices when calculating your Segment Value. Any variance between our estimated price and other estimated or actual prices may be different from Indexed Option to Indexed Option and may also change from day to day. Each hypothetical option has a notional value on the Segment Start Date equal to the Segment Account Value on that date. The notional value is the price of the underlying Index at the inception of the contract. In the event that a number of options, or a fractional number of options, are being valued, the notional value would be the number of hypothetical options multiplied by the price of the Index at inception.
We use the following model inputs:
(1) | Implied Volatility of the Index This input varies with (i) how much time remains until the Segment Maturity Date of the Segment, which is determined by using an expiration date for the designated option that corresponds to that time remaining and (ii) the relationship between the strike price of that option and the level of the Index at the time of the calculation. This relationship is referred to as the moneyness of the option described above, and is calculated as the ratio of current price to the strike price. Direct market data for these inputs for any given early distribution are generally not available, because options on the Index that actually trade in the market have specific maturity dates and moneyness values that are unlikely to correspond precisely to the Segment Maturity Date and moneyness of the designated option that we use for purposes of the calculation. |
Accordingly, we use the following method to estimate the implied volatility of the Index. We use daily quotes of implied volatility from independent third-parties using the model described above and based on the market prices for certain options. Specifically, implied volatility quotes are obtained for options with the closest maturities above and below the actual time remaining in the Segment at the time of the calculation and, for each maturity, for those options having the closest moneyness value above and below the actual moneyness of the designated option, given the level of the Index at the time of the calculation. In calculating the Segment Value, we will derive a volatility input for your Segments time to maturity and strike price by linearly interpolating between the implied volatility quotes that are based on the actual adjacent maturities and moneyness values described above, as follows:
(a) | We first determine the implied volatility of an option that has the same moneyness as the designated option but with the closest available time to maturity shorter than your Segments remaining time to maturity. This volatility is derived |
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by linearly interpolating between the implied volatilities of options having the times to the applicable maturity that are above and below the moneyness value of the hypothetical option. |
(b) | We then determine the implied volatility of an option that has the same moneyness as the designated option but with the closest available time to maturity longer than your Segments remaining time to the applicable maturity. This volatility is derived by linearly interpolating between the implied volatilities of options having the times to maturity that are above and below the moneyness value of the designated option. |
(c) | The volatility input for your Segments time to maturity will then be determined by linearly interpolating between the volatilities derived in steps (a) and (b). |
(2) | Swap Rate We use key derivative swap rates obtained from information provided by independent third-parties which are recognized financial reporting vendors. Swap rates are obtained for maturities adjacent to the actual time remaining in the Segment at the time of the early distribution. We use linear interpolation to derive the exact remaining duration rate needed as the input. |
(3) | Index Dividend Yield On a daily basis, we use the projected annual dividend yield across the entire Index obtained from information provided by independent third-party financial institutions. This value is a widely used assumption and is readily available from recognized financial reporting vendors. |
Generally, a put option has an inverse relationship with its underlying Index, while a call option has a direct relationship. In addition to the inputs discussed above, the Fair Value of Derivatives is also affected by the time to the Segment Maturity Date.
(B) Pro Rata Share of Growth Cap Rate. In setting the Growth Cap Rate, we assume that you are going to hold the Segment for the entire Segment Term. If you hold a Segment until its Segment Maturity Date, the Index-Linked Rate of Return will be calculated subject to the Growth Cap Rate. Prior to the Segment Maturity Date, your Segment Value will be limited by the portion of the Growth Cap Rate corresponding to the portion of the Segment Term that has elapsed. For example, if the Growth Cap Rate for a one-year Standard Segment is 10% and the Segment Term is 365 days, then at the end of 146 days, the Pro Rata Share of the Growth Cap Rate would be 4%, because 10% x 146/365 = 4%; as a result, the Segment Value at the end of the 146 days could not exceed 104% of the Segment Account Value.
Examples: Segment Value Standard Segments
Item | 1-Year Segment | 1-Year Segment | ||
Segment Term (in months) |
12 | 12 | ||
Valuation Date (Months since Segment Start Date) |
3 | 9 | ||
Segment Account Value |
$1,000 | $1,000 | ||
Segment Buffer |
-10% | -10% | ||
Growth Cap Rate |
12% | 12% | ||
Time to Maturity (in months) |
9 | 3 |
Assuming the change in the Index Value is -40% (for example from 100.00 to 60.00)
Fair Value of Hypothetical Fixed Instrument |
$991.14 | $998.10 | ||
Fair Value of Hypothetical Derivatives |
-$302.77 | -$302.18 | ||
Sum of above |
$688.37 | $695.92 | ||
Segment Account Value multiplied by prorated Growth Cap Rate |
$1,030.00 | $1,090.00 | ||
Segment Value |
$688.37 | $695.92 |
Assuming the change in the Index Value is -10% (for example from 100.00 to 90.00)
Fair Value of Hypothetical Fixed Instrument |
$991.14 | $998.10 | ||
Fair Value of Hypothetical Derivatives |
-$44.33 | -$29.88 | ||
Sum of above |
$946.81 | $968.22 | ||
Segment Account Value multiplied by prorated Growth Cap Rate |
$1,030.00 | $1,090.00 | ||
Segment Value |
$946.81 | $968.22 |
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Assuming the change in the Index Value is 10% (for example from 100.00 to 110.00)
Item | 1-Year Segment | 1-Year Segment | ||
Fair Value of Hypothetical Fixed Instrument |
$991.14 | $998.10 | ||
Fair Value of Hypothetical Derivatives |
$56.34 | $73.59 | ||
Sum of above |
$1,047.48 | $1,071.69 | ||
Segment Account Value multiplied by prorated Growth Cap Rate |
$1,030.00 | $1,090.00 | ||
Segment Value |
$1,030.00 | $1,071.69 |
Assuming the change in the Index Value is 40% (for example from 100.00 to 140.00)
Fair Value of Hypothetical Fixed Instrument |
$991.14 | $998.10 | ||
Fair Value of Hypothetical Derivatives |
$112.19 | $119.03 | ||
Sum of above |
$1,103.33 | $1,117.13 | ||
Segment Account Value multiplied by prorated Growth Cap Rate |
$1,030.00 | $1,090.00 | ||
Segment Value |
$1,030.00 | $1,090.00 |
Examples: Effect of Withdrawals on Segment Value Standard Segments
Item | 1-Year Segment | |||
Segment Term (in months) |
12 | |||
Valuation Date (Months since Segment Start Date) |
9 | |||
Initial Segment Account Value |
$1,000 | |||
Segment Buffer |
-10% | |||
Growth Cap Rate |
12% | |||
Time to Maturity (in months) |
3 | |||
Amount Withdrawn |
$100 |
Item | 1-Year Segment | |||
Assuming the change in the Index Value is -40% (for example from 100.00 to 60.00) | ||||
Segment Value(1) |
$697.42 | |||
Percent Withdrawn(2) |
14.34% | |||
New Segment Account Value(3) |
$856.61 | |||
New Segment Value(4) |
$597.42 |
Assuming the change in the Index Value is -10% (for example from 100.00 to 90.00)
Segment Value(1) |
$969.72 | |||
Percent Withdrawn(2) |
10.31% | |||
New Segment Account Value(3) |
$896.88 | |||
New Segment Value(4) |
$869.72 |
Item | 1-Year Segment | |||
Assuming the change in the Index Value is 10% (for example from 100.00 to 110.00) | ||||
Segment Value(1) |
$1,073.19 | |||
Percent Withdrawn(2) |
9.32% | |||
New Segment Account Value(3) |
$906.82 | |||
New Segment Value(4) |
$973.19 |
Assuming the change in the Index Value is 40% (for example from 100.00 to 140.00) |
Segment Value(1) |
$1,090.00 | |||
Percent Withdrawn(2) |
9.17% | |||
New Segment Account Value(3) |
$908.26 | |||
New Segment Value(4) |
$990.00 |
(1) | Segment Value immediately before withdrawal. |
(2) | Percent Withdrawn is equal to Amount Withdrawn divided by Segment Value. |
(3) | New Segment Account Value is equal to the Initial Segment Account Value ($1,000) multiplied by (1 Percent Withdrawn). |
(4) | New Segment Value is equal to the calculated Segment Value based on the new Segment Account Value. It will also be equal to the Segment Value multiplied by (1 Percent Withdrawn). |
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Example: Segment Value Step Up Segments
Item | 1-Year Segment | 1-Year Segment | ||
Segment Term (in months) |
12 | 12 | ||
Valuation Date (months since Segment Start Date) |
3 | 9 | ||
Initial Segment Account Value |
$1,000 | $1,000 | ||
Segment Buffer |
-10% | -10% | ||
Growth Cap Rate |
9% | 9% | ||
Time to Maturity (in months) |
9 | 3 |
Assuming the change in the Index Value is 10% (for example from 100.00 to 110.00)
Fair Value of Hypothetical Fixed Instrument |
$991.13 | $998.10 | ||
Fair Value of Hypothetical Derivatives |
$48.30 | $70.97 | ||
Sum of above |
$1,039.43 | $1,069.07 | ||
Initial Segment Account Value multiplied by prorated Growth Cap Rate |
$1,022.50 | $1,067.50 | ||
Segment Value |
$1,022.50 | $1,067.50 |
Assuming the change in the Index Value is -10% (for example from 100.00 to 90.00)
Fair Value of Hypothetical Fixed Instrument |
$991.13 | $998.10 | ||
Fair Value of Hypothetical Derivatives |
-$43.81 | -$27.12 | ||
Sum of above |
$947.32 | $970.98 | ||
Initial Segment Account Value multiplied by prorated Growth Cap Rate |
$1,022.50 | $1,067.50 | ||
Segment Value |
$947.32 | $970.98 |
Examples: Effect of Withdrawals on Segment Value Step Up Segments
Item | 1-Year Segment | |||
Segment Term (in months) |
12 | |||
Valuation Date (Months since Segment Start Date) |
9 | |||
Initial Segment Account Value |
$1,000 | |||
Segment Buffer |
-10% | |||
Growth Cap Rate |
9% | |||
Time to Maturity (in months) |
3 | |||
Amount Withdrawn |
$100 |
Assuming the change in the Index Value is 10% (for example from 100.00 to 110.00)
Segment Value(1) |
$1,022.50 | |||
Percent Withdrawn(2) |
9.78% | |||
New Segment Account Value(3) |
$902.20 | |||
New Segment Value(4) |
$922.50 |
Assuming the change in the Index Value is -10% (for example from 100.00 to 90.00)
Segment Value(1) |
$951.83 | |||
Percent Withdrawn(2) |
10.51% | |||
New Segment Account Value(3) |
$894.94 | |||
New Segment Value(4) |
$851.83 |
(1) | Segment Value immediately before withdrawal. |
(2) | Percent Withdrawn is equal to Amount Withdrawn divided by Segment Value. |
(3) | New Segment Account Value is equal to the Initial Segment Account Value ($1,000) multiplied by (1 Percent Withdrawn). |
(4) | New Segment Value is equal to the calculated Segment Value based on the new Segment Account Value It will also be equal to the Segment Value multiplied by (1 Percent Withdrawn). |
34
Example: Segment Value Dual Direction Segments
Item | 1-Year Segment | 1 Year Segment | ||
Segment Term (in months) |
12 | 12 | ||
Value Date (months since Segment Start Date) |
3 | 9 | ||
Initial Segment Account Value |
$1,000 | $1,000 | ||
Segment Buffer |
-10% | -10% | ||
Growth Cap Rate |
9.0% | 9.0% | ||
Time to Maturity (in months) |
9 | 3 |
Assuming the change in the Index Value is 10% (for example from 100.00 to 110.00)
Fair Value of Hypothetical Fixed Instrument |
$989.53 | $996.56 | ||
Fair Value of Hypothetical Derivatives |
$35.11 | $57.70 | ||
Sum of above |
$1,024.64 | $1,054.26 | ||
Initial Segment Account Value multiplied by prorated Growth Cap Rate |
$1,022.50 | $1,067.50 | ||
Segment Value |
$1,022.50 | $1,054.26 |
Assuming the change in the Index Value is -5% (for example from 100.00 to 95.00)
Fair Value of Hypothetical Fixed Instrument |
$989.53 | $996.56 | ||
Fair Value of Hypothetical Derivatives |
-$21.88 | $8.12 | ||
Sum of above |
$967.65 | $1,004.68 | ||
Initial Segment Account Value multiplied by prorated Growth Cap Rate |
$1,022.50 | $1,067.50 | ||
Segment Value |
$967.65 | $1,004.68 |
Assuming the change in the Index Value is -15% (for example from 100.00 to 85.00)
Fair Value of Hypothetical Fixed Instrument |
$989.53 | $996.56 | ||
Fair Value of Hypothetical Derivatives |
-$83.15 | -$59.42 | ||
Sum of above |
$906.38 | $937.14 | ||
Initial Segment Account Value multiplied by prorated Growth Cap Rate |
$1,022.50 | $1,067.50 | ||
Segment Value |
$906.38 | $937.14 |
Example: Effect of Withdrawals on Segment Value Dual Direction Segments
Item | 1-Year Segment | 1 Year Segment | ||
Segment Term (in months) |
12 | 12 | ||
Value Date (months since Segment Start Date) |
9 | 3 | ||
Initial Segment Account Value |
$1,000 | $1,000 | ||
Segment Buffer |
-10% | -10% | ||
Growth Cap Rate |
9.0% | 9.0% | ||
Time to Maturity (in months) |
3 | 9 | ||
Amount Withdrawn |
$100 | $100 |
Assuming the change in the Index Value is 10% (for example from 100.00 to 110.00)
Segment Value(1) |
$1,022.50 | $1,059.27 | ||
Percentage Withdrawn(2) |
9.78% | 9.44% | ||
New Segment Account Value(3) |
$902.20 | $905.60 | ||
New Segment Value(4) |
$922.50 | $959.27 |
Assuming the change in the Index Value is -5% (for example from 100.00 to 95.00)
Segment Value(1) |
$982.65 | $1,009.69 | ||
Percentage Withdrawn(2) |
10.18% | 9.90% | ||
New Segment Account Value(3) |
$898.23 | $900.96 | ||
New Segment Value(4) |
$882.65 | $909.69 |
35
Assuming the change in the Index Value is -15% (for example from 100.00 to 85.00)
Segment Value(1) |
$921.38 | $942.14 | ||
Percentage Withdrawn(2) |
10.85% | 10.61% | ||
New Segment Account Value(3) |
$891.47 | $893.86 | ||
New Segment Value(4) |
$821.38 | $842.14 |
(1) | Segment Value immediately before withdrawal. |
(2) | Percent Withdrawn is equal to Amount Withdrawn divided by Segment Value. |
(3) | New Segment Account Value is equal to the Initial Segment Account Value ($1,000) multiplied by (1 Percent Withdrawn). |
(4) | New Segment Value is equal to the calculated Segment Value based on the new Segment Account Value. It will also be equal to the Segment Value multiplied by (1 Percent Withdrawn). |
36
PART II
ITEM 14. | OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION |
ITEM OF EXPENSE |
ESTIMATED EXPENSE |
|||
Registration fees |
$ | 0.00 | ||
Federal taxes |
N/A | |||
State taxes and fees (based on 50 state average) |
N/A | |||
Trustees fees |
N/A | |||
Transfer agents fees |
N/A | |||
Printing and filing fees |
$ | 50,000 | * | |
Legal fees |
N/A | |||
Accounting fees |
N/A | |||
Audit fees |
$ | 20,000 | * | |
Engineering fees |
N/A | |||
Directors and officers insurance premium paid by Registrant |
N/A |
* | Estimated expense. |
ITEM 15. | INDEMNIFICATION OF DIRECTORS AND OFFICERS |
The By-Laws of Equitable Financial Life Insurance Company of America provide, in Article VI as follows:
ARTICLE VI
INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS
SECTION 1. NATURE OF INDEMNITY. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that he or she is or was or has agreed to become a director or officer of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity, and may indemnify any person who was or is a party or is threatened to be made a party to such an action, suit or proceeding by reason of the fact that he or she is or was or has agreed to become an employee or agent of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her or on his or her behalf in connection with such action, suit or proceeding and any appeal therefrom, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding had no reasonable cause to believe his or her conduct was unlawful; except that in the case of an action or suit by or in the right of the Corporation to procure a judgment in its favor (1) such indemnification shall be limited to expenses (including attorneys fees) actually and reasonably incurred by such person in the defense or settlement of such action or suit, and (2) no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the court in which such action or suit was brought or other court of competent jurisdiction shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity.
1
The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of no contest or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.
SECTION 6. SURVIVAL; PRESERVATION OF OTHER RIGHTS. The foregoing indemnification provisions shall be deemed to be a contract between the Corporation and each director, officer, employee and agent who serves in any such capacity at any time while these provisions as well as the relevant provisions of Title 10, Arizona Revised Statutes are in effect and any repeal or modification thereof shall not affect any right or obligation then existing with respect to any state of facts then or previously existing or any action, suit or proceeding previously or thereafter brought or threatened based in whole or in part upon any such state of facts. Such a contract right may not be modified retroactively without the consent of such director, officer, employee or agent.
The indemnification provided by this Article shall not be deemed exclusive of any other right to which those indemnified may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
SECTION 7. INSURANCE. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this By-Law.
The directors and officers of Equitable Financial Life Insurance Company of America are insured under policies issued by X.L. Insurance Company, Arch Insurance Company, Sombo (Endurance Specialty Insurance Company), U.S. Specialty Insurance, ACE (Chubb), Chubb Insurance Company, AXIS Insurance Company, Zurich Insurance Company, AWAC (Allied World Assurance Company, Ltd.), Aspen Bermuda XS, CAN, AIG, One Beacon, Nationwide, Berkley, Berkshire, SOMPO, Chubb, Markel and ARGO RE Ltd. The annual limit on such policies is $300 million, and the policies insure the officers and directors against certain liabilities arising out of their conduct in such capacities.
ITEM 16. EXHIBITS
(1) Underwriting Agreement.
(2) Not Applicable.
(4) Form of policy.
(a) Form of Policy Rider (ICC22-22-VIOS-3), filed herewith.
(b) Variable Indexed Options Rider (ICC22-R22-VIOS), filed herewith.
2
(5) Opinion and consent of counsel regarding legality
(a) Opinion and consent of Counsel, filed herewith.
(8) Not Applicable.
(12) Not Applicable.
(15) Not Applicable.
(23) Consents of Experts and Counsel.
(a) Consent of independent registered public accounting firm, to be filed by Amendment.
(24) Powers of Attorney.
(a) Powers of Attorney, filed herewith.
(25) Not Applicable.
(26) Not Applicable.
(EX-107) Filing Fees Table, filed herewith.
3
ITEM 17. | UNDERTAKINGS |
(a) | The undersigned registrant hereby undertakes: |
(1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | to include any prospectus required by section 10 (a) (3) of the Securities Act of 1933; |
(ii) | to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424 (b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the Calculation of Registration Fee table in the effective registration statement; |
(iii) | to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that paragraphs (a) (1) (i), (a) (1) (ii) and (a) (1) (iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15 (d) of the Securities Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424 (b) that is part of this Registration Statement. |
(2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
(4) | That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424 (b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
4
(5) | That, for the purpose of determining liability of the Registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: (i) Any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424; (ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the undersigned Registrant; (iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and (iv) Any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser. |
(b) | The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrants annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(c) | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. |
5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city and State of New York on this 17th day of May, 2022.
Equitable Financial Life Insurance Company of America | ||
(Registrant) | ||
By: | /s/ Shane Daly | |
Shane Daly | ||
Vice President and Associate General Counsel Equitable Financial Life Insurance Company of America |
As required by the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the date indicated:
PRINCIPAL EXECUTIVE OFFICER: | ||
*Mark Pearson | Chief Executive Officer and Director | |
PRINCIPAL FINANCIAL OFFICER: | ||
*Robin Raju | Chief Financial Officer | |
PRINCIPAL ACCOUNTING OFFICER: | ||
*William Eckert | Chief Accounting Officer |
*DIRECTORS: | ||||
Kristi Matus Charles G.T. Stonehill Bertram Scott |
Daniel G. Kaye Francis Hondal |
Joan Lamm-Tennant George Stansfield Mark Pearson |
*By: | /s/ Shane Daly | |
Shane Daly | ||
Attorney-in-Fact |
May 17, 2022
Exhibit 4(a)
1[POLICY INFORMATION CONTINUED POLICY NUMBER [XX XXX XXX]
ADDITIONAL BENEFIT RIDERS 1a[EFFECTIVE DATE]
1b[THIS TABLE REPLACES ANY PREVIOUS TABLE OF ADDITIONAL BENEFIT RIDERS]
The Additional Riders listed below are included in the policy.
2[Integrated Term Insurance Rider: | Expiry Date: 2a[September 7, 2087] | |
Policy Continuation Rider: | Policy Continuation Trigger Percentage: 3[95%]] | |
Variable Indexed Options Rider | 4[Separate Account 67] | |
Segment Start Date: | 5[The 3rd Friday of each calendar month] | |
Segment Maturity Date: | 6[The 3rd Friday of the same calendar month as the calendar month of the Segment Start Date, in the calendar year next following the calendar year of the Segment Start Date] |
7[Indexed Option: |
Index (The value of
the |
Segment Loss Absorption Threshold Rate |
Guaranteed Minimum Growth Cap Rate* |
Guaranteed Participation Rate: |
||||||||||
Standard |
8[S&P 500 Price Return index | -10 | % | 9[5 | % | 10[100 | % | |||||||
Standard |
S&P 500 Price Return index | -15 | % | 4.5 | % | 100 | % | |||||||
Standard |
S&P 500 Price Return index | -20 | % | 4.25 | % | 100 | % | |||||||
Dual Direction |
S&P 500 Price Return index | -10 | % | 4.5 | % | 100 | % | |||||||
Step Up |
S&P 500 Price Return index ] | -10 | % | 4.5 | %] | 100 | %]] |
Investment fund for VIO Holding Accounts: | 11[EQ/Money Market Variable Investment Fund Separate Account FP] | |
Investment fund if (1) we restrict future allocations to one or more Indexed Options, or (2) the offering of an Indexed Option is terminated: | 12[EQ/Money Market Variable Investment Fund Separate Account FP] | |
13[*For each Indexed Option, you can specify a minimum Growth Cap Rate below which you do not wish to participate in a Segment. In the event that a Growth Cap Rate is set for a new Segment and that rate is less than the rate you specified, if any, any amount in the VIO Holding Account for the applicable Indexed Option will not be transferred into that new Segment. For any Indexed Option, if you do not specify a minimum Growth Cap Rate, any amount in the VIO Holding Account for the applicable Indexed Option will be transferred into that new Segment, subject to the requirements, conditions, and limitations described in this rider. Upon request, we will provide instruction as to how you may specify a minimum Growth Cap Rate for any Indexed Option.]] |
ICC22-22-VIOS-3 | 1c[Page 3.3] |
1[POLICY INFORMATION CONTINUED POLICY NUMBER [XX XXX XXX]
ADDITIONAL BENEFIT RIDERS 1a[EFFECTIVE DATE]
1b[THIS TABLE REPLACES ANY PREVIOUS TABLE OF ADDITIONAL BENEFIT RIDERS]
14[Indexed Options - Standard | ||
If the Segment Index Performance Rate multiplied by the Guaranteed Participation Rate: | Then the Segment Index-Linked Rate of Return will be: | |
Is greater than the Growth Cap Rate for the Segment Term | Equal to the Growth Cap Rate | |
Is greater than or equal to 0% but less than or equal to the Growth Cap Rate for the Segment Term | Equal to the Segment Index Performance Rate multiplied by Guaranteed Participation Rate | |
Is less than 0% but greater than or equal to the Segment Loss Absorption Threshold Rate for the Segment Term | Equal to 0% | |
Is less than the Segment Loss Absorption Threshold Rate for the Segment Term | Equal to the Segment Index Performance Rate multiplied by the Guaranteed Participation Rate, less the Segment Loss Absorption Threshold Rate | |
Indexed Option - Step Up | ||
If the Segment Index Performance Rate multiplied by the Guaranteed Participation Rate: | Then the Segment Index-Linked Rate of Return will be: | |
Is greater than the Growth Cap Rate for the Segment Term | Equal to the Growth Cap Rate | |
Is greater than or equal to 0% but less than or equal to the Growth Cap Rate for the Segment Term | Equal to the Growth Cap Rate | |
Is less than 0% but greater than or equal to the Segment Loss Absorption Threshold Rate for the Segment Term | Equal to 0% | |
Is less than the Segment Loss Absorption Threshold Rate for the Segment Term | Equal to the Segment Index Performance Rate multiplied by the Guaranteed Participation Rate, less the Segment Loss Absorption Threshold Rate | |
Indexed Option - Dual Direction | ||
If the Segment Index Performance Rate multiplied by the Guaranteed Participation Rate: | Then the Segment Index-Linked Rate of Return will be: | |
Is greater than the Growth Cap Rate for the Segment Term | Equal to the Growth Cap Rate | |
Is greater than or equal to 0% but less than or equal to the Growth Cap Rate for the Segment Term | Equal to the Segment Index Performance Rate multiplied by the Guaranteed Participation Rate | |
Is less than 0% but greater than or equal to the Segment Loss Absorption Threshold Rate for the Segment Term | Equal to the absolute value* of the Segment Index Performance Rate multiplied by Guaranteed Participation Rate | |
Is less than the Segment Loss Absorption Threshold Rate for the Segment Term | Equal to the Segment Index Performance Rate multiplied by the Guaranteed Participation Rate, less the Segment Loss Absorption Threshold Rate | |
* For purposes of this rider, the absolute value of any amount is the non-negative value of that amount without regard to its mathematical sign (positive or negative). If the Segment Index Performance Rate is negative and if the absolute value of the Segment Index Performance Rate is greater than the Growth Cap Rate and less than the absolute value of the Segment Loss Absorption Threshold Rate, then the resulting Segment Index-Linked Rate of Return may be greater than the Growth Cap Rate.]] |
ICC22-22-VIOS-3 | 1c[Page 3.3] CONTINUED |
Exhibit 4(b)
Variable Indexed |
In this rider we, our and us mean Equitable Financial Life Insurance |
Options Rider |
Company of America. You and your mean the owner of the policy. |
Effective Date of this Rider. This rider is effective on the Register Date of your policy. The provisions of this rider will apply in lieu of any policy provisions to the contrary.
This Riders Benefit. This rider allows you to allocate your net premiums or transfer amounts of the policy to our Variable Indexed Options (VIO), which are investment options that provide rates of return that are tied to the performance of the index specified in the Policy Information section of your policy (the Index) for each Indexed Option subject to the conditions and limitations described in this rider. Additionally, this rider provides various specified levels of protection against declines in the Index. When this rider is in effect, the amount in your Policy Account at any time is equal to the sum of the amounts you then have in our Guaranteed Interest Account (GIA), the investment funds of our Separate Account (SA) under the base policy including the VIO Holding Accounts, and Segment Accounts.
Rider Definitions
In this section, we define certain terms that are used throughout this rider. Additional terms are defined in other provisions of this rider.
Initial Segment Account. This is the initial amount of the Segment Account for a new Segment on the Segment Start Date. It will be determined based on the amount in your VIO Holding Account for the applicable Indexed Option on that date, subject to the conditions in the Segment provision of this rider, as follows: (1) We will first make any transfer from your value in the applicable VIO Holding Account to the unloaned portion of our GIA, as described in the Charge Reserve Amount provision of this rider. (2) Your remaining value in the applicable VIO Holding Account will then be transferred into the new Segment, subject to any limit we have established on the total amount you can allocate to your Segment for the applicable Indexed Option. The excess, if any, will not be transferred into the new Segment. We reserve the right to establish or change such a limit at any time. However, we will send you advance written notice if we do this. Your Initial Segment Account on the Segment Start Date will then be equal to the amount transferred from the applicable VIO Holding Account into the new Segment.
Segment. A new Segment is established when an amount is transferred from the applicable VIO Holding Account into a new Segment Account within your policy. In order for any amount to be transferred from the applicable VIO Holding Account into a new Segment Account on a Segment Start Date, all of the following conditions must be met on such date:
(1) | the Growth Cap Rate set by us for that Segment must be equal to or greater than the minimum Growth Cap Rate for the applicable Indexed Option, if any, last specified by you; |
(2) | there must be sufficient funds available within the unloaned portion of our GIA and the investment funds of our SA under the base policy including the VIO Holding Accounts to cover the Charge Reserve Amount as determined by us on such date; |
(3) | the annual interest rate currently being credited on the unloaned portion of our GIA on such date must be less than the Growth Cap Rate we have set for the Segment, reduced by the sum on such date of the current annualized monthly Variable Index Segment Account Charge rate and the current annualized monthly mortality and expense charge rate; |
(4) | it must not be necessary, as determined by us on such date, for us to make a distribution from your policy during the Segment Term in order for your policy to continue to qualify as life insurance under applicable tax law. For more information, see the Policy Distributions Applicable Tax Law provision of this rider; and |
(5) | the total amount allocated to your Segments for the applicable Indexed Option on such date must be less than any limit we may have established. |
If any of the above conditions are not met, no transfer will occur.
ICC22-R22-VIOS | PAGE 1 |
Segment Account. The amount of the Initial Segment Account reduced by any subsequent monthly deductions, partial withdrawals, policy loans, or policy distributions we deem necessary that are allocated to the Segment. Any such reduction in a Segment Account prior to its Segment Maturity Date will result in a corresponding Segment Market Value Adjustment (Segment MVA) to the Segment Account. This Segment MVA may be positive, negative, or zero, corresponding to a decrease, increase, or no change to the Segment Account and to your Policy Account. Segment Accounts are used in calculating policy account values in the determination of death benefits and the net amount at risk for monthly cost of insurance calculations of your policy, and the new base policy face amount associated with a requested change in death benefit option if applicable.
Segment Index-Linked Return. An amount that is added to the Segment Account on the Segment Maturity Date; this amount is equal to the Segment Index Linked Rate of Return, as described in this rider, multiplied by the Segment Account on the Segment Maturity Date. The Segment Index-Linked Return may be positive, negative, or zero, corresponding to an increase, decrease, or no change to your Policy Account.
Segment Start Date. The date on which a Segment is established. The Segment Start Date is shown in the Policy Information section of your policy.
Segment Term. The term for each Segment begins on its Segment Start Date and ends on its Segment Maturity Date.
Segment Market Value Adjustment (Segment MVA). When any portion of a monthly deduction, partial withdrawal, policy loan, or policy distribution is allocated to a Segment, the reduction in the Segment Value, the reduction in the Segment Account, and the Segment MVA will be determined as specified below:
(1) | The Segment Value will be reduced by the allocated portion of the monthly deduction, partial withdrawal, policy loan, or policy distribution on a dollar-for-dollar basis. |
(2) | The Segment Account will be reduced by the same percentage that the Segment Value was reduced. |
(3) | The Segment MVA will be equal to the reduction in the Segment Account minus the reduction in the Segment Value. |
The Segment MVA may be positive, negative, or zero, corresponding to a decrease, increase, or no change to the Segment Account and to your Policy Account.
Segment Maturity Date. The date on which a Segment Term is completed and the Segment Index-Linked Return is added to a Segment Account. The Segment Maturity Date is shown in the Policy Information section of your policy.
Segment Maturity Value. This is the Segment Account on the Segment Maturity Date plus the Segment Index-Linked Return for that Segment.
Segment Value. We determine the Segment Value prior to the Segment Maturity Date, based on the estimated current value of financial instruments representing our obligation to provide your Segment Maturity Value on the Segment Maturity Date. However, your Segment Value will not exceed the sum of (1) your Segment Account plus (2) your Segment Account multiplied by the pro-rated Growth Cap Rate. The pro-rated Growth Cap Rate is equal to the Growth Cap Rate multiplied by the number of days since the Segment Start Date divided by the number of days in the Segment Term. Our Segment Value calculation methodology is on file with the Interstate Insurance Product Regulation Commission. Segment Values may be greater than, less than, or equal to the corresponding Segment Accounts.
We determine the Segment Value at the end of each business day. The Segment Value that applies on a business day will be the Segment Value determined on that day. The Segment Value that applies on a non-business day will be the Segment Value determined on the next business day.
While Segments are in effect, the Segment Values will be used in place of the Segment Accounts in calculating the amount of the Policy Account value and Net Policy Account Value available for monthly deductions, proportionate surrender charges, if applicable, associated with requested face amount reductions, and other distributions; Cash
ICC22-R22-VIOS | PAGE 2 |
Surrender Value, subject to any applicable base policy surrender charge; Net Cash Surrender Value; maximum loan value, as referred to in the base policy; and in determining whether any outstanding policy loan and accrued loan interest exceeds the Policy Account value.
If any portion of a monthly deduction, partial withdrawal, policy loan, or policy distribution is allocated to a Segment prior to its Segment Maturity Date, the Segment Value will be reduced by the allocated portion of the monthly deduction, partial withdrawal, policy loan, or policy distribution, on a dollar-for-dollar basis.
If the insured person dies during a Segment Term and the Segment Value exceeds the Segment Account, the Segment Value will be used in the place of the Segment Account in the determination of the death benefit under death benefit Option B, if applicable, or if the death benefit is calculated as a percentage of the amount in your Policy Account.
Indexed Option. Indexed Option refers to all Segments subject to the same index, Segment Index-Linked Rate of Return calculation methodology, number of years in a Segment Term, Segment Loss Absorption Threshold Rate, and Guaranteed Participation Rate. The Indexed Options currently available are shown in the Policy Information section of your policy.
VIO Holding Account. This is a portion of your Policy Account that holds units of the investment fund of our SA under the base policy that is specified in the Policy Information section of your policy. We will establish a separate VIO Holding Account for each Indexed Option that we offer. Net premiums and other amounts allocated or transferred to any Indexed Option will be used to purchase units of this fund, prior to any transfer into a new Segment of such Indexed Option. Such units within each applicable VIO Holding Account will be accounted for separately from any other units of this fund that have been purchased under your policy. Such units of this fund will be redeemed when any amounts are deducted, loaned, transferred, or withdrawn from the applicable VIO Holding Account. Amounts within each VIO Holding Account will be transferred to a Segment of the applicable Indexed Option when the conditions for a new Segment under the Segment provision of this rider are met. The amount of your Policy Account in any VIO Holding Account at any time will be equal to the number of units this policy then has in that account multiplied by this funds unit value at that time.
Rider Cost
Cost of this Rider. There is a monthly Variable Index Segment Account Charge that is part of the monthly deductions from your Policy Account (see the Monthly Deductions provision of your policy). The amount of this charge will be based on the total amount of all Segment Accounts while any Segment is in effect. We may change the Variable Index Segment Account Charge from time to time. Any change in such charge will be in accordance with the Changes in Policy Cost Factors provision of your policy. The maximum monthly Variable Index Segment Account Charge is shown in the Table of Maximum Monthly Deductions from Your Policy Account in your policy. The cost of this rider will apply in any policy year during which a Segment is in effect. Your policys monthly mortality and expense charge will also be applicable to the amount of your Policy Account in the VIO Holding Accounts and in any Segment Accounts.
Variable Indexed Options
Your Policy Account in Our VIO. Prior to a Segment Maturity Date, the Policy Account you have in our VIO at any time is equal to the sum of Segment Accounts and any amounts held in each of the VIO Holding Accounts. Amounts may be transferred from any VIO Holding Account to one or more other VIO Holding Accounts, to one or more of the other investment funds of our SA under the base policy, or to the unloaned portion of our GIA, or may be withdrawn from any VIO Holding Account at any time prior to the next Segment Start Date, subject to our normal rules as stated in the provisions of your policy pertaining to these policy transactions. However, once we transfer an amount from a VIO Holding Account into a new Segment on a Segment Start Date, such amount will not be available for requested transfers until the Segment Maturity Date; see the Transfers provision of this rider.
On a Segment Maturity Date, we will add a Segment Index-Linked Return to the Segment Account, which will result in the Segment Maturity Value. The Segment Index-Linked Return is equal to the Segment Index-Linked Rate of Return described in this rider, multiplied by the Segment Account on the Segment Maturity Date.
ICC22-R22-VIOS | PAGE 3 |
Segment Index Performance Rate. The Segment Index Performance Rate measures the performance of the Index during each Segment Term. The Segment Index Performance Rate is (b) divided by (a) minus one, where:
(a) | is the value of the Index at the close of business on the Segment Start Date; and |
(b) | is the value of the Index at the close of business on the Segment Maturity Date. |
We determine the value of the Index at the close of business, which is the end of a business day. Generally, a business day is any day the New York Stock Exchange is open for trading. If the New York Stock Exchange is not open for trading or if the Index Value is not published on the Segment Start Date or the Segment Maturity Date, the value of the Index will be determined as of the end of the most recent preceding business day for which the Index Value is published.
Changes to Segments and Indexed Options. We reserve the right to change the Segment Start Date and/or Segment Maturity Date, to change the frequency with which we offer new Segments, to stop offering new Segments, or to temporarily suspend offering new Segments for any Indexed Option. We also reserve the right to add new Indexed Options. We will notify you of any of the above actions we take.
If we suspend the offering of new Segments for an Indexed Option, amounts invested in the applicable VIO Holding Account will remain in that applicable VIO Holding Account until the next Segment Start Date that conditions under the Segment provision of this rider are met on or after the date we lift the suspension or until you instruct us to transfer the amounts to one or more other VIO Holding Accounts, to one or more of the other investment funds of our SA under the base policy, or to the unloaned portion of our GIA.
If the offering of an Indexed Option is terminated, amounts in the applicable VIO Holding Account will be transferred to the investment fund of our SA under the base policy that is specified in the Policy Information section of your policy. If the terminated Indexed Option is included in your allocation instructions on file, it will be replaced with the investment fund of our SA under the base policy that is specified in the Policy Information section of your policy.
Discontinuation of or Substantial Change to the Index for an Indexed Option. Subject to the approval by the Interstate Insurance Product Regulation Commission (IIPRC), we reserve the right to substitute an alternative index if the publication of the Index is discontinued or at our sole discretion, we determine that our use of the Index should be discontinued, or if the calculation of the Index is substantially changed. If the Index were to be discontinued or substantially changed, we may mature the Segments early.
We would calculate the Segment Index-Linked Return by multiplying the Segment Index-Linked Rates of Return (the calculation of which would use adjusted Segment Index Performance Rates that reflect the most recently available closing value of the Index before it was discontinued or changed) by each Segment Account on that date. We will provide notice about maturing the Segment early as soon as feasible.
We will notify you or any assignee on our records of any such substitution, prior to our use of any alternative index.
Segment Index-Linked Rate of Return. The Segment Index-Linked Rate of Return, which may vary by Indexed Option, is described in the Policy Information section of your policy. The Guaranteed Participation Rate, the Growth Cap Rate and the Segment Loss Absorption Threshold Rate are components of the Segment Index-Linked Rate of Return and are described below. The Segment Index-Linked Rate of Return is applied only to amounts that remain in a Segment Account until the Segment Maturity Date.
| The Guaranteed Participation Rate is the percentage of the Segment Index Performance Rate that we will use to determine the Segment Index-Linked Rate of Return. The Guaranteed Participation Rate for each Indexed Option is shown in the Policy Information section of your policy. |
| The Growth Cap Rate is generally the maximum rate of return that a Segment Account can earn. Any exceptions are described in the Policy Information section of your policy. |
ICC22-R22-VIOS | PAGE 4 |
We will set the Growth Cap Rate for each Segment on or before the Segment Start Date; such rate will not change during a Segment Term. The Growth Cap Rate for each Indexed Option may vary for each Segment; any change in such rate will be in accordance with the Changes in Policy Cost Factors provision of your policy. However, such rate will never be less than the Guaranteed Minimum Growth Cap Rate for the applicable Indexed Option shown in the Policy Information section of your policy.
In the event that a Growth Cap Rate is set for a new Segment and that rate, reduced by the sum of the current annualized monthly Variable Index Segment Account Charge rate and the current annualized monthly mortality and expense charge rate, is less than or equal to the annual rate of interest currently being credited to the unloaned portion of our GIA on the Segment Start Date, any amount in the VIO Holding Account for the applicable Indexed Option will not be transferred into that new Segment.
| The Segment Loss Absorption Threshold Rate divided by the Guaranteed Participation Rate is the maximum percentage decline in the Index over the Segment Term that will not result in a reduction in your Policy Account at segment maturity due to such decline of the Index. Any percentage decline in the Index in excess of the Segment Loss Absorption Threshold Rate divided by the Guaranteed Participation Rate will result in a reduction in your Policy Account. The Segment Loss Absorption Threshold Rate may vary by Indexed Option. |
The Segment Loss Absorption Threshold Rate and how it affects the calculation of the Segment Index-Linked Rate of Return for each Indexed Option are shown in the Policy Information section of your policy. The Segment Loss Absorption Threshold Rate for a Segment will not change during a Segment Term.
Reallocation of the Segment Maturity Value. We will transfer all or a portion of any Segment Maturity Value to any VIO Holding Account, any other investment funds of our SA under the base policy, or the unloaned portion of our GIA in accordance with your direction. Any amount for which you do not provide direction will be transferred to the VIO Holding Account applicable to the Indexed Option of the maturing Segment. Any amount in the applicable VIO Holding Account, excluding any amount transferred to the unloaned portion of our GIA in order to meet the Charge Reserve Amount requirement described in the Charge Reserve Amount provision of this rider, will be transferred to a new Segment on the next available Segment Start Date, subject to other requirements, conditions, and limitations described in this rider.
We have the right to restrict future allocations to one or more Indexed Options. If this occurs, all Segments for the restricted Indexed Options which are outstanding as of the effective date of the restriction will continue until their respective Segment Maturity Dates in accordance with the terms of this rider. As each Segment matures, the applicable Segment Maturity Value will be transferred to the unloaned portion of our GIA and/or to one or more investment funds in our SA under the base policy, including any available VIO Holding Accounts, at your direction. If no directions are received or if we cannot complete the transfer according to your direction, we will transfer the applicable Segment Maturity Value to the investment fund shown in the Policy Information section of your policy.
Effect of this Rider on Policy Provisions
Monthly Deductions. While a Segment is in effect, monthly deductions (including any proportionate surrender charge, if applicable, associated with a requested face amount reduction effective at the beginning of a policy month) will not be allocated as specified in the Allocations provision of your policy. Instead, the monthly deductions will be made as follows:
The monthly deduction allocations will be changed so that the entire amount of each deduction will be taken from the unloaned portion of our GIA while any Segment is in effect. In the event that your value in the unloaned portion of our GIA is insufficient to fully cover monthly deductions while a Segment remains in effect during a Segment Term, then the remaining deductions will be made as specified below.
(a) | We will take as much of the remaining portion of the monthly deductions as possible pro-rata from your values in the VIO Holding Accounts and your values in the other investment funds of our SA under the base policy. |
ICC22-R22-VIOS | PAGE 5 |
(b) | If your values in the unloaned portion of our GIA and the investment funds of our SA under the base policy including the VIO Holding Accounts are insufficient to cover the total monthly deductions, the remaining amount of the deductions will then be allocated to any Segments then in effect on a pro-rata basis, based on the current Segment Values of such Segments. Such deduction of the amount allocated to any Segment will cause a corresponding Segment MVA to the Segment Account. |
These modifications to the deduction allocation rules specified in the Allocations provision of your policy will only apply while at least one Segment is in effect.
Charge Reserve Amount. We will require that a minimum amount of your Policy Account, called the Charge Reserve Amount, be available in the unloaned portion of our GIA on the Segment Start Date. The Charge Reserve Amount will be determined as an amount projected to be sufficient to cover all monthly deductions for your policy during the Segment Term, assuming at the time such calculation is made that no interest or investment performance is credited to or charged against your Policy Account and that no policy changes or additional premium payments are made. The Charge Reserve Amount will be determined on each applicable Segment Start Date, and any necessary transfers to supplement the amount in the unloaned portion of our GIA in order to meet this requirement will take effect on that date. There will be no charge for this transfer. Any such transfer from your values in the investment funds in our SA under the base policy including any value in the VIO Holding Accounts to meet this requirement will be made in accordance with your direction if your base policy permits you to specify deduction allocation percentages. If we do not receive such direction, if we cannot transfer such amount on the basis of your directions, or if your base policy does not permit you to specify deduction allocation percentages we will make such transfer pro-rata from your values in the VIO Holding Accounts and your values in the other investment funds of our SA under the base policy. If your values in the investment funds of our SA under the base policy including the VIO Holding Accounts, and the unloaned portion of our GIA are insufficient to cover the Charge Reserve Amount on the Segment Start Date, the amount in the VIO Holding Account will not be transferred into a new Segment.
The Charge Reserve Amount will be reduced by each subsequent monthly deduction during the Segment Term, although it will never be less than zero. The Charge Reserve Amount is a reference value only, which is utilized as described in this rider. It is not used to determine actual monthly deductions, policy account values, or cash surrender values during a Segment Term.
The Charge Reserve Amount may not be sufficient to cover actual monthly deductions during a Segment Term. Actual monthly deductions may vary during a Segment Term due to requested policy changes, additional premium payments, the investment performance of the funds in our SA under the base policy, policy loans, partial withdrawals, and any changes we might make to current policy charges.
Policy Loans. When this rider is in effect, and if your base policy permits you to tell us how policy loans are allocated, then you may tell us how much of a requested loan is to be allocated to your values in our VIO, your unloaned value in our GIA, and your value in each investment fund of our SA under the base policy. Unless otherwise specified in this rider, the loan provisions of your base policy will apply.
Any portion of a requested policy loan allocated to the VIO based on your instructions will be deducted from the values in the VIO Holding Accounts and the individual Segments on a pro-rata basis, based on the values in the VIO Holding Accounts and the current Segment Value of each Segment.
If a Segment is in effect and (1) your base policy does not permit you to tell us how policy loans are allocated; (2) you do not tell us how a requested loan is to be allocated to the values in your policy; or (3) we cannot deduct the loan from your values in our VIO, your unloaned value in our GIA excluding any remaining Charge Reserve Amount, and your values in the investment funds of our SA under the base policy based on your directions, the loan will be allocated as follows:
(a) | We will first deduct as much of the loan as possible pro-rata from the values in your VIO Holding Accounts, your values in the other investment funds of our SA under the base policy, and the unloaned portion of our GIA, excluding any remaining Charge Reserve Amount. |
ICC22-R22-VIOS | PAGE 6 |
(b) | If your values in the investment funds of our SA under the base policy including the VIO Holding Accounts, and your value in the unloaned portion of our GIA excluding any remaining Charge Reserve Amount, are insufficient to cover the entire loan, we will then deduct as much of the remaining amount of the loan as possible from the individual Segments then in effect on a pro-rata basis, based on the current Segment Value of each Segment. The amount of any loan that we deduct from a Segment will be transferred to the loaned portion of our GIA. |
(c) | If your values in the investment funds of our SA under the base policy including the VIO Holding Accounts, your value in the unloaned portion of our GIA excluding any remaining Charge Reserve Amount, and the Segment Values are still insufficient to cover the entire loan, the remaining amount of the loan will be deducted from the unloaned portion of our GIA, including any Charge Reserve Amount. |
Loan interest is due on each policy anniversary. If the interest is not paid when due, it will be added to your outstanding loan and allocated on the basis of the deduction allocation rules described in the Monthly Deductions provision of this rider.
Any portion of a loan or unpaid loan interest deducted from an individual Segment will cause a corresponding Segment MVA to the Segment Account.
On each policy anniversary, and at any time you repay all of the policy loan, we will allocate the interest that has been credited to the loaned portion of our GIA to the investment funds of our Separate Account under the base policy including the VIO Holding Accounts, and the unloaned portion of our GIA in accordance with your premium allocation percentages.
Loan Repayments. Unless otherwise specified in this rider, the loan repayment provisions of your policy will apply. Loan repayments will first be allocated to our GIA until you have repaid any loaned amounts that were allocated to our GIA. Any portion of an additional loan repayment allocated to our VIO at your request if your policy permits requested allocations of loan repayments, or on the basis of the premium allocation percentages then in effect will be transferred from your value in the loaned portion of our GIA to the applicable VIO Holding Accounts.
Policy DistributionsApplicable Tax Law. As stated in your policy, we reserve the right to make distributions, which, in our opinion, we deem necessary to continue to qualify your policy as life insurance under applicable tax law. If on any Segment Start Date we determine that a distribution will become necessary to maintain the policys qualification as life insurance during a Segment Term, a new Segment will not be established. If a distribution subsequently becomes necessary while a Segment is in effect, we will make such distribution as follows:
(a) | We will first deduct as much of the distribution as possible pro-rata from any values in the VIO Holding Accounts, your values in the other investment funds of our SA under the base policy, and the unloaned portion of our GIA, excluding any remaining Charge Reserve Amount. |
(b) | If your values in the investment funds of our SA under the base policy including the VIO Holding Accounts, and the unloaned portion of our GIA excluding any remaining Charge Reserve Amount, are insufficient to cover the entire distribution, we will then deduct as much of the remaining amount of the distribution as possible from the individual Segments then in effect on a pro-rata basis, based on the current Segment Values of the Segments. Such deductions will cause a corresponding Segment MVA of each Segment Account. |
(c) | If your values in the investment funds of our SA under the base policy including the VIO Holding Accounts, the unloaned portion of our GIA excluding any remaining Charge Reserve Amount, and the Segment Values are still insufficient to cover the entire distribution, the remaining amount of the distribution will be allocated to the unloaned portion of our GIA, including any remaining Charge Reserve Amount. |
ICC22-R22-VIOS | PAGE 7 |
Transfers. Unless otherwise specified in this rider, we will transfer amounts to and from your values in our unloaned GIA, the VIO Holding Accounts, and any other investment funds of our SA under the base policy in accordance with your direction and the rules specified in the Transfers provision of your policy.
At your written request to our Administrative Office, we will transfer amounts from your values in any investment funds of our SA under the base policy including the VIO Holding Accounts to one or more other investment funds available under the base policy including the VIO Holding Accounts. Any such transfer will take effect on the business day we receive your written request at our Administrative Office.
Once during each policy year you may ask us, by written request to our Administrative Office, to transfer an amount you specify from your unloaned value in our GIA, excluding any remaining Charge Reserve Amount if any Segment is in effect on the transfer effective date, to any investment funds of our SA under the base policy including the VIO Holding Accounts. We must receive your request within a period beginning 30 days prior to the policy anniversary and ending 60 days after the policy anniversary. A transfer request that is received up to 30 days prior to the policy anniversary will be effective on the anniversary. A transfer request received on or within 60 days after the policy anniversary will be effective on the date the request is received at our Administrative Office. The maximum amount that you may transfer in any policy year is the greatest of (a) $500, (b) 25% of the unloaned value in the GIA on the transfer effective date and (c) the amount transferred from your unloaned value in our GIA in the immediately preceding policy year, if any. In no event will we transfer more than your unloaned value in our GIA, excluding any remaining Charge Reserve Amount.
A requested transfer out of an existing Segment in our VIO will not be permitted prior to the Segment Maturity Date.
Partial Withdrawal. When this rider is in effect, and if your policy permits you to tell us how partial withdrawals are allocated, then you may tell us how much of a requested partial withdrawal is to be allocated to your values in our VIO, your unloaned value in our GIA, and your value in each investment fund of our SA under the base policy. Unless otherwise specified in this rider, the provisions for partial withdrawals of Net Cash Surrender Value or Net Policy Account Value of your base policy will apply.
Any portion of a requested partial withdrawal allocated to the VIO based on your instructions will be deducted from the values in the VIO Holding Accounts and the individual Segments on a pro-rata basis, based on the values in the VIO Holding Accounts and the current Segment Value of each Segment.
If a Segment is in effect and (1) your policy does not permit you to tell us how partial withdrawals are allocated; (2) you do not tell us how a requested partial withdrawal is to be allocated to the values in your policy; or (3) we cannot deduct the partial withdrawal from your values in our VIO, your unloaned value in our GIA excluding any remaining Charge Reserve Amount, and your values in the investment funds of our SA under the base policy based on your directions, the partial withdrawal will be allocated as follows:
(a) | We will first deduct as much of the partial withdrawal as possible pro-rata from the values in your VIO Holding Accounts, your values in the other investment funds of our SA under the base policy, and the unloaned portion of our GIA, excluding any remaining Charge Reserve Amount. |
(b) | If your values in the investment funds of our SA under the base policy including the VIO Holding Accounts, and your value in the unloaned portion of our GIA excluding any remaining Charge Reserve Amount, are insufficient to cover the entire partial withdrawal, we will then deduct as much of the remaining amount of the partial withdrawal as possible from the individual Segments then in effect on a pro-rata basis, based on the current Segment Value of each Segment. |
(c) | If your values in the investment funds of our SA under the base policy including the VIO Holding Accounts, your value in the unloaned portion of our GIA excluding any remaining Charge Reserve Amount, and the Segment Values are still insufficient to cover the entire partial withdrawal, the remaining amount of the partial withdrawal will be deducted from the unloaned portion of our GIA, including any Charge Reserve Amount. |
Any portion of a partial withdrawal deducted from an individual Segment will cause a corresponding Segment MVA to the Segment Account.
ICC22-R22-VIOS | PAGE 8 |
Face Amount Increases. If your policy or any applicable rider allows face amount increases and you request a face amount increase during a Segment Term, the rules of the policy or applicable rider for such increase will apply. However, when a face amount increase is requested during a Segment Term, we will recalculate the Charge Reserve Amount and require that such amount be available in the unloaned portion of our GIA on the effective date of the increase. For such increase, the Charge Reserve Amount will be determined as an amount projected to be sufficient to cover all monthly deductions for your policy and any applicable rider during the longest remaining Segment Term on the effective date of the increase, assuming at the time such calculation is made that no interest or investment performance is credited to or charged against your Policy Account and that no further policy changes or additional premium payments are made. Any necessary transfers to supplement the amount in the unloaned portion of our GIA in order to meet the requirement of such Charge Reserve Amount will take effect on the effective date of the face amount increase. There will be no charge for this transfer. Any such transfer from your values in the investment funds in our SA under the base policy including any value in the VIO Holding Accounts to meet this requirement will be made in accordance with your direction if your base policy permits you to specify deduction allocation percentages. If we do not receive such direction, if we cannot transfer such amount on the basis of your directions, or if your base policy does not permit you to specify deduction allocation percentages, we will make such transfer pro-rata from your values in the VIO Holding Accounts and your values in the other investment funds of our SA under the base policy. If your values in the investment funds of our SA under the base policy including the VIO Holding Accounts, and the unloaned portion of our GIA are insufficient to cover the Charge Reserve Amount, we will decline your request to increase the face amount.
How, When and What We May Defer. We may not be able to obtain the value of the assets in the VIO Holding Accounts or Segment Accounts if (1) the New York Stock Exchange is closed for trading; (2) the Securities and Exchange Commission has determined that a state of emergency exists that may make determination and payment impractical; or (3) the Index Value is not published. During such times, we may defer:
(1) | Determination and payment of partial withdrawals (except when used to pay premiums to us); |
(2) | Determination and payment of any death benefit in excess of the face amount and the face amount of the Integrated Term Insurance Rider, if applicable; |
(3) | Payment of policy loans (except when used to pay premiums to us); |
(4) | Determination and payment of Net Cash Surrender Value pursuant to cancellation or surrender of the base policy; |
(5) | Determination of the unit values of the investment funds of our SA under the base policy and values associated with the VIO; and |
(6) | Any requested transfer. |
ICC22-R22-VIOS | PAGE 9 |
General Provisions
Our Separate Account Under This Rider. Amounts allocated to our VIO are held in our Separate Account for the Variable Indexed Options Rider shown in the Table of Additional Benefit Riders in your policy. We have established this Separate Account and maintain it in accordance with the laws of Arizona. Income, and realized and unrealized gains and losses from the assets of this Separate Account are credited to or charged against it without regard to our other income, gains or losses. Assets are placed in this Separate Account to support your policy and other life insurance policies. The assets of this Separate Account are our property. We may transfer assets of this Separate Account in excess of reserves and other liabilities with respect to such account to another separate account or to our General Account.
We have the right, subject to compliance with applicable law, to: (1) add new separate accounts to be used for the same purpose as this Separate Account; (2) to divide this Separate Account into two or more separate accounts to be used for the same purpose; and (3) to combine this Separate Account with any other separate account that is used for the same purpose.
We have the right to invest the assets of this Separate Account in any legal investments. We will rely upon our own or outside counsel for advice in this regard.
Other Additional Benefit Riders or Endorsements. If other additional benefit riders or endorsements are attached to your policy, refer to the Policy Information section of your policy for any applicable information regarding the effect of this rider on such additional benefit riders or endorsements, or the effect of such additional benefit riders or endorsements on this rider.
When This Rider Will Terminate. This rider will terminate on the earliest of the following dates:
(1) | on the date of the insured persons death; |
(2) | on the date your policy ends without value at the end of a Grace Period, is given up for its Net Cash Surrender Value, or otherwise terminates; |
(3) | on the effective date of the election of any Paid-Up No Lapse Guarantee and |
(4) | on the date your policy goes on Loan Extension or Policy Continuation. |
Our Annual Report to You. In this provision of your policy, the reference to the value you have in our GIA and in each investment fund of any SA available under this policy is deemed to mean the value you have in our VIO, in our GIA, and in any investment fund of our SA.
General. This rider is part of your policy. Its benefit is subject to all the terms of this rider and your policy. All provisions of your policy will continue to apply except as specifically modified by this rider.
EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA
1[ | ||
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Mark Pearson, Chairman of the Board | Jose R. Gonzalez, Chief Legal Officer | |
and Chief Executive Officer | and Secretary] |
ICC22-R22-VIOS | PAGE 10 |
Exhibit 5(a)
SHANE DALY | ||||
EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA |
Vice President and Associate General Counsel | |||
(212) 314-3912 | ||||
shane.daly@equitable.com | ||||
May 17, 2022 |
Equitable Financial Life Insurance Company of America
1290 Avenue of the Americas
New York, NY 10104
Dear Sirs:
This opinion is furnished in connection with the filing by Equitable Financial Life Insurance Company of America (Equitable America) of a Form S-3 Registration Statement for the purpose of registering Interests in the Market Stabilizer Option® II (MSO Interests) under the Securities Act of 1933.
I have examined such corporate records of Equitable America and provisions of the Arizona Insurance Law as are relevant to authorization and issuance of the Contracts and such other documents and laws as I consider appropriate. On the basis of such examination, it is my opinion that:
1. Equitable America is a corporation duly organized and validly existing under the laws of the State of Arizona.
2. The Interests are duly authorized and, when issued in accordance with applicable regulatory approvals, represent validly issued and binding obligations of Equitable America.
I hereby consent to the use of this opinion as an exhibit to the Registration Statement.
Very truly yours, |
/s/ Shane Daly |
Shane Daly |
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or Director of Equitable Financial Life Insurance Company of America (the Company), a stock life insurance company, hereby constitutes and appoints José Ramón González, Kurt Meyers, Ralph A. Petruzzo, Shane Daly and Robert Negron, each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any and all registration statements (and amendments thereto) by the Company or its separate accounts relating to annuity contracts and life insurance policies under the Securities Act of 1933 and/or the Investment Company Act of 1940, including but not limited to the Registration Statements, as defined below, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents being empowered to act with or without the others, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof.
The Registration Statements covered by the Power of Attorney are defined to include the registration statements listed below:
Equitable America Variable Account A (811-05166)
033-14362
033-20453
033-20696
333-59717
333-72632
333-91776
333-92066
Form N-4 registration statements to be filed as necessary.
Equitable America Variable Account 70A (811-23609)
333-248907
Form N-4 registration statements to be filed as necessary.
Equitable America Variable Account K (811-22886)
333-191149
333-191150
333-207014
333-229237
333-229238
333-256256
Form N-6 registration statements to be filed as necessary.
Equitable America Variable Account L (811-04234)
002-95990
033-82570
333-56969
333-64417
333-72578
333-72596
333-104162
333-134304
Form N-6 registration statements to be filed as necessary.
EFLOA
Equitable America Variable Account S (811-05100)
033-13183
Form N-6 registration statements to be filed as necessary.
Equitable Financial Life Insurance Company of America
333-210276
333-223704
333-229747
333-236437
333-251416
333-263529
333-263742
Form S-1 or S-3 registration statements to be filed, as necessary, for Market Value Adjustment interests under MONY Variable Annuity and MONY Custom Master contracts issued by Equitable Life Insurance Company of America.
Form S-1 or S-3 registration statements to be filed, as necessary, for index-linked investment options to be offered with certain flexible premium variable life insurance policies. This includes, but is not limited to each Market Stabilizer Option®.
Form S-1, S-3, N-4 or N-6 registration statements to be filed as necessary, including but not limited to any registration statements filed to continue the offering of, and/or register more securities for, any securities offered by the registration statements identified above.
The undersigned has hereunto set his or her hand this 29th day of March, 2022.
Signature |
Title | |
/s/ Daniel G. Kaye Daniel G. Kaye |
Director | |
/s/ Francis Hondal Francis Hondal |
Director | |
/s/ Joan Lamm-Tennant Joan Lamm-Tennant |
Director | |
/s/ Kristi Matus Kristi Matus |
Director | |
/s/ Mark Pearson Mark Pearson |
Chief Executive Officer and Director | |
/s/ Bertram Scott Bertram Scott |
Director |
EFLOA
Signature |
Title | |
/s/ George Stansfield George Stansfield |
Director | |
/s/ Robin Raju Robin Raju |
Chief Financial Officer | |
/s/ William Eckert William Eckert |
Chief Accounting Officer |
EFLOA
Calculation of Filing Fee Tables
S-3
(Form Type)
EQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA
(Exact Name of Registrant as Specified in its Charter)
Table 1: Newly Registered and Carry Forward Securities
Security
|
Security Class Title |
Fee
|
Amount
|
Proposed
|
Maximum
|
Fee
|
Amount
of
|
Carry
|
Carry
|
Carry Forward Initial effective date |
Filing Fee | |||||||||||||
Newly Registered Securities | ||||||||||||||||||||||||
Fees to Be Paid
|
||||||||||||||||||||||||
Fees Previously Paid
|
||||||||||||||||||||||||
Newly Registered Securities | ||||||||||||||||||||||||
Carry Forward Securities
|
||||||||||||||||||||||||
Total Offering Amounts
|
||||||||||||||||||||||||
Total Fees Previously Paid
|
||||||||||||||||||||||||
Total Fee Offsets
|
||||||||||||||||||||||||
Net Fee Due
|
(1) | An indeterminate number or amount of interests in the Market Stabilizer Option® II of Equitable Financial Life Insurance Company of America that may from time to time be issued at indeterminate prices in U.S. dollars. Units of interest are only sold in U.S. dollar amounts. The maximum aggregate offering price is estimated solely for the purposes of determining the registration fee. |
Table 2: Fee Offset Claims and Sources
Registrant or Filer
|
Form
|
File Number
|
Initial Filing Date
|
Filing Date
|
Fee
|
Security
|
Security
|
Unsold
|
Unsold with Fee Offset
|
Fee
| ||||||||||||
Rules 457(b) and 0-11(a)(2)
| ||||||||||||||||||||||
Fees Offset Claims
|
||||||||||||||||||||||
Fees Offset Sources | ||||||||||||||||||||||
Rule 457(p) | ||||||||||||||||||||||
Fees Offset Claims
|
Equitable Financial Life Insurance Company of America
|
|||||||||||||||||||||
Fees Offset Sources | Equitable Financial Life Insurance Company of America |
(1) | The unsold securities are deemed deregistered upon effectiveness of this registration statement. |
Table 3: Combined Prospectuses
Security Type
|
Security
|
Amount of Securities
|
Maximum Aggregate
|
Form
|
File
|
Initial
| ||||||