corresp
BRANDON J. CAGE
Assistant Vice President
Counsel
Law Department
Phone: 949-219-3943
Fax: 949-219-6952
Brandon.Cage@pacificlife.com
December 7, 2009
Michael L. Kosoff
Senior Counsel
Office of Insurance Products
Division of Investment Management
U.S. Securities & Exchange Commission
100 F Street, NE
Washington, DC 20549-0506
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Re: |
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Response to comments regarding Post-Effective Amendment No. 16 of the Pacific Voyages
(333-136597) Individual Flexible Premium Deferred Variable Annuity, funded by Separate Account
A (811-08946) of Pacific Life Insurance Company; regarding a new optional benefit rider. |
Dear Mr. Kosoff:
On behalf of Pacific Life Insurance Company and Separate Account A of Pacific Life Insurance
Company (811-08946) (hereinafter collectively referred to as Registrants), set forth below are
responses to comments received from you via telephone on November 30, 2009, in connection with the
above referenced Post-Effective Amendment on Form N-4, filed with the SEC on October 16, 2009.
1. Staff Comment: General Comment.
a. Please confirm that comments given in response to the current filing, where applicable, will be
applied to the CoreProtect Advantage Rider when the registration statement is updated.
Response: We hereby confirm that any applicable comments will be applied to the CoreProtect
Advantage Rider disclosure when the registration statement is updated.
b. As there are a large number of living benefits offered under these contracts, please consider
adding a table that compares the salient features of the optional living benefits.
Response: Thank you, we will take this into consideration.
2. Staff Comment: An Overview of CoreProtect Advantage Rider.
a. End of 1st paragraph, please include a statement that there are limits on withdrawals
and restrictions on investments and violating these results in a reduction in benefits.
Mr. Kosoff
December 7, 2009
Page 2
Response: We respectfully decline to add repetitive disclosure in this instance. The paragraph
immediately before the paragraph referenced in this comment already covers the result of failing to
follow the investment allocation requirements. Also, given the proximity of the existing
disclosure, no additional disclosure covering the same topic is warranted. In fact, this disclosure
was recently added pursuant to Staff comments received. The disclosure we added previously is as
follows:
Failure to adhere to the Investment Allocation Requirements may cause your Rider to terminate.
In addition, there is existing disclosure in the paragraph referenced in this comment that already
covers the affect of withdrawals limits. The existing disclosure is as follows:
If your total withdrawals in a Contract Year exceed the annual withdrawal amount allowed under the
Rider, then the Protected Payment Base may decrease and the amount you may withdraw in the future
under the Rider may be reduced.
b. Last sentence of 3rd paragraph, please add Rider Effective Date, Annual Credit Value,
and Highest Anniversary Value to the list of terms.
Response: We modified the last sentence to include the additional terms.
3. Staff Comment: Rider Terms.
a. To the extent practicable, please revise the definition of Annual Credit Value for clarity. For
instance please revise the last sentence to make it clear that the Annual Credit Value increases
each year not just with respect to the initial value.
Response: We revised the last paragraph for clarity by removing the reference to initial and
adding each year. The disclosure was revised as follows [new disclosure is underlined for your
reference]:
The Annual Credit Value is increased each year by any Annual Credits, plus any subsequent
Purchase Payments...during the periods described above
b. Please revise the definition of Protected Payment Amount to include the parenthetical (except
an RMD withdrawal).
Response: We respectfully decline to add the requested disclosure. The requested revision, in
this context, can be construed to mean that the Protected Payment Amount is the maximum annual
withdrawal amount plus any RMD withdrawals which would result in an inflated and incorrect
Protected Payment Amount. Any withdrawal, including an RMD withdrawal is counted towards the
maximum annual amount that may be withdrawn each year. However, we do provide an exception when
the maximum annual amount is exceeded due to an RMD withdrawal (the main reason why we have the
parenthetical except an RMD withdrawal in other places).
c. For clarity, please explain in each applicable rider term, what the initial value is, rather
than leaving the explanation in another section that has to be referred to as is currently being
done.
Response: We modified the disclosure such that the initial value is included directly in each
applicable term.
Mr. Kosoff
December 7, 2009
Page 3
4. Staff Comment: Subsequent Purchase Payments.
a. In the sentence following the first two bullet points, please explain why the Protected Payment
Base and Remaining Protected Balance are not included.
Response: Subsequent Purchase Payments also increase the Protected Payment Base and the Remaining
Protected Balance by the Purchase Payment Amount. For clarity, we revised the sentence as follows
[new disclosure underlined for your reference]:
will result in an increase in the Annual Credit Value, Highest Anniversary Value, Protected
Payment Base, and Remaining Protected Balance equal to the Purchase Payment Amount.
b. In the sentence following second set of bullets, please remove the uppercase A since this is
not a defined term.
Response: Thank you for bringing this to our attention. We made the correction.
5. Staff Comment: How the Rider Works.
a. Please highlight the next to last sentence of the first paragraph in bold. In addition, note in
the following sentence that an investor, on his own, may not choose to terminate the rider.
Response: We made the next to last sentence bold. In addition, we added the following disclosure
as the new last sentence of the first paragraph:
Once the Rider is purchased, you cannot request a termination of the Rider (see the Termination
subsection of this Rider for more information).
b. In the last sentence of the 1st paragraph, you discuss the Annual Credit Value but
not the Highest Anniversary Value. For consistency, when you discuss one concept, please include
the other as they operate together to determine the Protected Payment Base.
Response: We modified the existing last sentence to mention the Highest Anniversary Value feature.
The existing last sentence was modified as follows:
This Rider also provides for a Highest Anniversary Value feature and for an amount (an Annual
Credit) to be added to the Annual Credit Value.
c. Please add language to the first paragraph of the How the Rider Works subsection, disclosing
the major conditions that may affect ones receipt of the benefit (i.e. investment restrictions,
taking of withdrawals before a given age and specify that age, and taking excess withdrawals) and
the consequences of violating these conditions.
Response: Disclosure pertaining to violations of the investment allocation requirements is already
disclosed in this supplement (see response to comment 2). In addition, in the Other Optional
Riders General Information section of the prospectus (an introduction to the optional riders), there is
ample
Mr. Kosoff
December 7, 2009
Page 4
disclosure that already covers, in detail, the investment restrictions for each rider and
that the rider will terminate if the requirements are not followed.
In the first paragraph of the How the Rider Works subsection of the supplement, we already disclose
the age requirements for lifetime withdrawals and what happens if withdrawals begin before that
disclosed age. Pursuant to comment 5(a) above, we made a sentence bold which will provide more
prominence to this subject matter. This disclosure was previously added pursuant to recent Staff
comments.
Finally, for consistency with recent Staff comments pertaining to excess withdrawals, we added the
following general paragraph that applies to all riders to cover the potential effects of taking
excess withdrawals where applicable:
The General Information subsection is amended to include the following:
Taking a withdrawal before a certain age or a withdrawal that is greater than the allowed annual
withdrawal amount under a particular Rider, may result in adverse consequences such as a reduction
in Rider benefits or the failure to receive lifetime withdrawals under a Rider.
6. Staff Comment: Withdrawals Exceeding the Protected Payment Amount.
a. Please briefly describe, in the narrative, what proportionate basis refers to.
Response: We added the following disclosure:
Proportionate basis refers to the reduction of the Protected Payment Base and Remaining Protected
Balance based, in part, on the ratio of the excess withdrawal amount divided by the Contract Value
less the Protected Payment Amount.
b. Explicitly state that when the Protected Payment Base/Remaining Protected Balance exceeds the
Contract Value, the proportionate reduction will reduce the Protected Payment Base/Remaining
Protected Balance by an amount greater than the amount withdrawn.
Response: We added the following disclosure to the last sentence of the Withdrawals Exceeding the
Protected Payment Amount paragraph (same disclosure that is currently in the How the Rider Works
subsection):
If a withdrawal is greater than the Protected Payment Amount and the Contract Value is less than
the Protected Payment Base, both the Protected Payment Base and Remaining Protected Balance will be
reduced by an amount that is greater than the excess amount withdrawn.
7. Staff Comment: Annual Credit.
a. Please clarify when the Annual Credit Value and Highest Anniversary Value are set equal to the
Protected Payment Base.
b. Please clarify whether the Annual Credit Value and Highest Anniversary Value also increases the
Remaining Protected Balance.
Mr. Kosoff
December 7, 2009
Page 5
c. Please include a section describing the Highest Anniversary Value immediately following the
Annual Credit Value section.
Response to a, b and c: The Annual Credit subsection only describes how the 5% Annual Credit is
calculated and when the 5% Annual Credit is credited to the Annual Credit Value. This section does
not describe the Annual Credit Value. The adjustment to the Protected Payment Base and Remaining
Protected Balance is disclosed in the Adjustment to Values subsection. That subsection describes
the time period and method used to determine when the Annual Credit Value and Highest Anniversary
Value are utilized to adjust the Protected Payment Base and Remaining Protected Balance. In
addition, the Annual Credit Value and Highest Anniversary Value are described in the Rider Terms
subsection which includes disclosure pertaining to how those values are increased.
To provide more clarity, we modified the heading for the Adjustment to Values subsection as
follows:
Adjustment to Protected Payment Base and Remaining Protected Balance Using the Annual Credit Value
or Highest Anniversary Value
8. Staff Comment: Reset of Protected Payment Base and Remaining Protected Balance. Please
clarify that the reset does not restart the right to receive the Annual Credit Value or Highest
Anniversary Value as a new Protected Payment Amount.
Response: We added additional disclosure regarding the relationship of resets to the Annual Credit
Value, the Highest Anniversary Value and the Annual Credit. To maintain consistency with our
approach to this concept in other optional living benefit riders, we added such disclosure to the
Adjustment to Protected Payment Base and Remaining Protected Balance Using... and Annual Credit
subsections.
We modified the last paragraph of the Adjustment to Protected Payment Base and Remaining Protected
Balance Using the Annual Credit Value or Highest Anniversary Value subsection as follows [new
disclosure is underlined or your reference]:
An increase to the Annual Credit Value or Highest Anniversary Value is not considered an Automatic
Reset or an Owner-Elected Reset and will not result in a change to the annual charge percentage.
In addition, once resets become available (after the first withdrawal or 10 Contract
Anniversaries as described above), eligibility for the Annual Credit Value or Highest Anniversary
Value adjustment cannot be reinstated by any Automatic or Owner-Elected Reset.
We also modified the Annual Credit subsection by adding the following paragraph:
Once a withdrawal (including an RMD Withdrawal) or 10 Contract Anniversaries has occurred, as
measured from the Rider Effective Date, no Annual Credit will be added to the Annual Credit Value.
In addition, Annual Credit eligibility cannot be reinstated by any Automatic or Owner-Elected
Reset.
9. Staff Comment: Continuation of Rider if Surviving Spouse Continues Contract. Please
confirm supplementally, that even if the surviving spouse is over age 65 he or she must reset the
rider to receive lifetime benefits.
Mr. Kosoff
December 7, 2009
Page 6
Response: We hereby confirm that even if the surviving spouse is over age 65 when the contract is
continued, a reset must occur to receive withdrawals for life.
10. Staff Comment: Example 4.
a. If appropriate, indent the 3 paragraphs following the paragraph that begins Fourth, determine
the new Remaining Protected Balance as these paragraphs explain the preceding paragraph.
Response: The 3 paragraphs do explain the preceding paragraph. We indented the paragraphs.
b. In the paragraph beginning To determine the proportionate reduction, please add the phrase
immediately before the withdrawal to the terms Remaining Protected Balance and Protected Payment
Amount, where appropriate, to avoid confusion.
Response: For clarity, we added additional disclosure by adding immediately before the
withdrawal or new where applicable.
11. Staff Comment: Tandy Representation. Notwithstanding our comments, please acknowledge
that: 1) the Commission Staff has not passed upon the accuracy or adequacy of the above-referenced
filing; 2) the review of the filing by the Commission Staff does not relieve the Registrants from
its full responsibility for the adequacy and accuracy of the disclosure in the filing nor does it
foreclose the Commission from taking any action with respect to the filing; and 3) the Registrants
may not assert, as a defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the United States, that the Commission Staff reviewed this filing and
provided comments to the Registrants or that the filing became automatically effective thereafter.
Response: The Registrants hereby acknowledge as follows: 1) the Commission Staff has not passed
upon the accuracy or adequacy of the above referenced filing; 2) the review of the filing by the
Commission Staff does not relieve the Registrants from its full responsibility for the adequacy and
accuracy of the disclosure in the filing nor does it foreclose the Commission from taking any
action with respect to the filing; and 3) the Registrants may not assert, as a defense in any
proceeding initiated by the Commission or any person under the federal securities laws of the
United States, that the Commission Staff reviewed this filing and provided comments to the
Registrants or that the filing became automatically effective thereafter.
I believe that the foregoing is responsive to the SEC Staffs comments. If you have any questions,
please call me at (949) 219-3943. Thank you.
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Sincerely,
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/s/ BRANDON J. CAGE
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Brandon J. Cage |
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