Securities Act of 1933
Section 2(a)(1)

August 31, 2015

Response of the Office of Chief Counsel
Division of Corporation Finance

Based on the facts presented, the Division will not recommend enforcement action to the Commission if, in reliance on your opinion of counsel that membership interests in Mutual Holding Company are not securities within the meaning of the Securities Act or the Exchange Act, the Company causes its current and future policyholders to become members of Mutual Holding Company in connection with and after the Reorganization without registration under the Securities Act or the Exchange Act. Capitalized terms have the same meanings as defined in your letter.

In reaching this position, we particularly note that:

• the Reorganization will be effected under Illinois law permitting the formation of mutual insurance holding companies by mutual insurance companies;
• with the Reorganization, the Company's policyholders will automatically become members of Mutual Holding Company;
• membership interests in Mutual Holding Company will be substantially the same as membership interests in the Company, will not be transferable and will be extinguished once a member is no longer a policyholder;
• Mutual Holding Company will not pay dividends or make other distributions or payments of income or profits to members, except in the event of a dissolution or liquidation or as otherwise approved by the Illinois Director;
• the Reorganization is subject to approval by the Illinois Director after notice to policyholders and a public hearing where policyholders are entitled to appear;
• the Illinois Director must approve the Reorganization after finding that it is fair and equitable to the Company's policyholders; and
• Mutual Holding Company will be subject to regulation by the Illinois Director at a level substantially equivalent to that applicable to the Company before the Reorganization.

This position is based on the representations made to the Division in your letter. Any different facts or conditions might require the Division to reach a different conclusion. Further, this response expresses the Division's position on enforcement action only and does not express any legal conclusion on the question presented.

Incoming Letter:

The Incoming Letter is in Acrobat format.

http://www.sec.gov/divisions/corpfin/cf-noaction/2015/federal-life-insurance-company-083115-2a1.htm