Notices. Notice of application for an order pursuant to Section 26(c) of the Investment Company Act of 1940, as amended (the “1940 Act”), approving certain substitutions of securities
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BILLING CODE 7555-01-M NUCLEAR REGULATORY COMMISSION [Docket Nos. 50-373 and 50-374] Exelon Generation Company, LLC; Notice of Denial of Amendment to Facility Operating License and Opportunity for Hearing The U.S. Nuclear Regulatory Commission (NRC or the Commission) has denied a request by Exelon Generation Company, LLC (the licensee) for an amendment to Facility Operating Licenses NPF-11 and NPF-12, issued to the licensee for operation of the Lasalle County Station, Unit Nos. 1 and 2, located in LaSalle County, Illinois.
Notice of Consideration of Issuance of this amendment was published in the **Federal Register** on March 28, 2006 (71 FR 15483). The purpose of the licensee's amendment request was to revise the technical specifications
(TS)to change Surveillance Requirement
(SR)3.7.3.1 which verifies the cooling water temperature supplied to the plant from the core standby cooling system
(CSCS)pond ( *i.e.* , ultimate heat sink (UHS)) is ≤ 100 °F. Currently, if the temperature of the cooling water supplied to the plant from the CSCS pond is > 100 °F, the UHS must be declared inoperable in accordance with TS 3.7.3. The license amendment request proposed to increase the temperature limit of the cooling water supplied to the plant from the CSCS pond to ≤ 101.5 °F by reducing the temperature measurement uncertainty by replacing the existing thermocouples with higher precision temperature measuring equipment. Should the UHS indicated temperature exceed 101.5 °F, Required Action B.1 would be entered and both units would be placed in Mode 3 within 12 hours and Mode 4 within 36 hours. The NRC staff has concluded that the licensee's request cannot be granted. The licensee was notified of the Commission's denial of the proposed change by telephone on November 2, 2006. By 30 days from the date of publication of this notice in the **Federal Register** , the licensee may demand a hearing with respect to the denial described above. Any person whose interest may be affected by this proceeding may file a written petition for leave to intervene pursuant to the requirements of 10 CFR 2.309. A request for a hearing or a petition for leave to intervene must be filed by:
(1)First class mail addressed to the Office of the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemaking and Adjudications Staff;
(2)courier, express mail, and expedited delivery services: Office of the Secretary, Sixteenth Floor, One White Flint North, 11555 Rockville Pike, Rockville, MD 20852, Attention: Rulemaking and Adjudications Staff;
(3)E-mail addressed to the Office of the Secretary, U.S. Nuclear Regulatory Commission, *HEARINGDOCKET@NRC.GOV;* or
(4)facsimile transmission addressed to the Office of the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemakings and Adjudications Staff at
(301)415-1101, verification number is
(301)415-1966. A copy of the request for hearing and petition for leave to intervene should also be sent to the Office of the General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, and it is requested that copies be transmitted either by means of facsimile transmission to
(301)415-3725 or by e-mail to *OGCMailCenter@nrc.gov* . A copy of the request for hearing and petition for leave to intervene should also be sent to Mr. Bradley J. Fewell, Assistant General Counsel, Exelon Generation Company, LLC, 200 Exelon Way, Kennett Square, PA 19348, attorney for the licensee. For further details with respect to this action, see
(1)the application for amendment dated March 13, 2006, as supplemented by letters dated July 13 and August 4, 2006, and
(2)the Commission's letter to the licensee dated November 3, 2006. Documents may be examined, and/or copied for a fee, at the NRC's Public Document Room (PDR), located at One White Flint North, Public File Area O1 F21, 11555 Rockville Pike (first floor), Rockville, Maryland, and will be accessible electronically through the Agencywide Documents Access and Management System's (ADAMS) Public Electronic Reading Room link at the NRC Web site *http://www.nrc.gov/reading-rm/adams.html.* Persons who do not have access to ADAMS or who encounter problems in accessing documents located in ADAMS should contact the NRC PDR Reference staff by telephone at 1-800-397-4209,
(301)415-4737, or by e-mail to *pdr@nrc.gov.* Dated at Rockville, Maryland, this 3rd day of November 2006. For the Nuclear Regulatory Commission. Catherine Haney, Director, Division of Operating Reactor Licensing, Office of Nuclear Reactor Regulation. [FR Doc. E6-19097 Filed 11-9-06; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION [Docket No. 030-29319; License No. 42-26838-01; EA-06-021] In the Matter of H&G Inspection Company, Inc., Houston, TX; Confirmatory Order (Effective Immediately) I H&G Inspection Company, Inc. (H&G), is the holder of Materials License No. 42-26838-01 issued by the Nuclear Regulatory Commission (NRC or Commission) on July 30, 1986, last amended on June 3, 2003, and is due to expire on June 30, 2013. The license authorizes H&G to possess sealed radioactive sources for use in conducting industrial radiography activities in accordance with the conditions specified therein. II An NRC inspection was conducted at a temporary job site in Rock Springs, Wyoming, and at the H&G field office located in Evanston, Wyoming, on December 15, 2004. Following that inspection, an investigation was initiated on January 31, 2005, by the NRC Office of Investigations
(OI)in order to determine whether two radiographers employed by H&G willfully violated NRC regulations. Based on the results of the NRC inspection and OI investigation, the NRC determined that three violations of NRC requirements occurred. The violations involved failures to:
(A)Secure from unauthorized removal or access and control and maintain constant surveillance of licensed material in an unrestricted area (10 CFR 20.1801 and 10 CFR 20.1802);
(B)have a second qualified individual observe radiographic operations (10 CFR 34.41(a)),
(C)and block and brace a radiographic exposure device during transport (10 CFR 71.5(a) and 49 CFR 177.842(d)). The NRC also determined that Violation C resulted from willful actions on the part of the two radiographers involved. III In a letter dated May 1, 2006, the NRC issued a Notice of Violation and proposed Civil Penalty for the three violations identified as a result of the December 15, 2004, inspection and subsequent OI investigation. In the May 1, 2006, letter, the NRC offered H&G the opportunity to request Alternative Dispute Resolution
(ADR)with the NRC in an attempt to resolve issues associated with these violations. In response to the May 1, 2006, letter, H&G requested ADR to resolve the matter with the NRC. ADR is a process in which a neutral mediator, with no decision-making authority, assists the NRC and H&G to resolve any differences regarding the matter. An ADR session was held between H&G and the NRC in Arlington, Texas, on August 24, 2006. During that ADR session, an agreement was reached. The elements of the agreement consisted of the following: 1. The NRC and H&G agree that a Severity Level-III violation of 10 CFR 20.1801 and 10 CFR 20.1802 did occur on December 15, 2004, as noted in the Notice of Violation dated May 1, 2006, in that the licensee stored its radiography camera in the mobile darkroom of its truck parked at the licensee's facility in Evanston, Wyoming, and the door to the darkroom was left unsecured and the licensee did not otherwise control and maintain constant surveillance of the licensed material. 2. The NRC and H&G agree that a Severity Level-III violation of 10 CFR 34.41(a) did occur on December 15, 2004, as noted in the Notice of Violation dated May 1, 2006, in that, although the licensee had two qualified individuals present at a temporary jobsite in Rock Springs, Wyoming, where radiographic operations were being performed, the second qualified individual (radiographer's assistant) was physically located in the licensee's mobile darkroom during radiographic operations, and was therefore not able to observe the operations or provide immediate assistance to prevent unauthorized entry. 3. The NRC and H&G agree that a violation of 49 CFR 177.842(d) did occur on December 15, 2004, as noted in the Notice of Violation dated May 1, 2006, in that the licensee transported a radiographic exposure device containing licensed material to and from a temporary job site without the required blocking and bracing. 4. The NRC and H&G agree that the violation of 49 CFR 177.842(d), as noted in the Notice of Violation dated May 1, 2006, was a willful act on the part of the radiographers involved. 5. The NRC recognizes that H&G took the following immediate and effective corrective actions:
(1)Replacing the area supervisor in the associated field office;
(2)replacing other personnel in that field office, including those involved in the willful violation;
(3)holding company-wide safety meetings about the deficiencies that NRC found;
(4)completing implementation of a new locking system (using two physical systems: a lock box installed in each dark room and utilization of the lock on the dark room door);
(5)conducting additional field audits;
(6)conducting retraining for affected individuals; and
(7)clarifying Operation and Emergency procedures regarding the requirements for the 2-person rule. 6. The NRC and H&G agree that the actions in this paragraph are sufficient to address the NRC's concerns. H&G agrees to issuance of this letter and Confirmatory Order confirming this agreement, and also agrees to waive any request for a hearing regarding this Confirmatory Order. The NRC and H&G further agree that this Confirmatory Order should include the following elements: A. H&G will continue to implement the following corrective actions:
(1)A new locking system (using two physical systems: a lock box installed in each dark room and utilization of the lock on the dark room door);
(2)conducting additional field audits; and
(3)annual training on Operation and Emergency procedures regarding the requirements for the 2-person rule. B. Not later than 1-year from the date of this Confirmatory Order, H&G will write and submit an article (for publication by both the American Society of Non-Destructive Testing
(ASNT)and the Non-Destructive Testing Managers Association (NDTMA)) that is mutually agreeable. The article will address the new H&G management oversight program (detailed below) and the value it adds to overall safe and effective operations. Not later than 11 months from the date of this Confirmatory Order, a draft of the proposed article will be submitted to the NRC Region IV office for review, comment, and concurrence. C. H&G agrees to implement a management review and oversight program with the following elements: a. Training of the three area supervisors and three office managers to the Radiation Safety Officer level. b. Requiring each of the six individuals in 6.C.a to conduct unannounced audits of one of the other field offices on a rotating basis (quarterly for the first 2 years, and annually thereafter). c. Requiring one of the three senior corporate managers (Radiation Safety Officer, Chief Operations Officer, and President) to conduct unannounced performance observations at each of the field offices on a rotating basis twice a year. Meaning each field office will receive a visit from a senior corporate manager twice each year. D. H&G understands that the NRC, as part of its normal process, will issue a press release with this Confirmatory Order. The NRC will provide H&G a copy of the press release prior to its release. E. In recognition of H&G's extensive corrective actions, the NRC agrees to reduce the Civil Penalty originally proposed to $500. On October 10, 2006, H&G consented to issuing this Confirmatory Order with the commitments, as described in Section IV below. H&G further agreed in the October 10, 2006, letter that this Confirmatory Order is to be effective upon issuance and that they have waived their right to a hearing. Implementation of these commitments will resolve the NRC's concerns and will satisfy the response requirements listed in the May 1, 2006, Notice of Violation such that no additional written response to that letter is necessary. I find that H&G's commitments as set forth in Section IV are acceptable and necessary and conclude that with these commitments the public health and safety are reasonably assured. In view of the foregoing, I have determined that the public health and safety require that H&G's commitments be confirmed by this Order. Based on the above and H&G's consent, this Confirmatory Order is immediately effective upon issuance. IV Accordingly, pursuant to Sections 161b, 161i, 161o, 182 and 186 of the Atomic Energy Act of 1954, as amended, the Commission's regulations in 10 CFR 2.202, 2.205, 10 CFR Parts 20, 34, and in Part 71 that references 49 CFR 177, *it is hereby ordered, effective immediately, that:* 1. The NRC reduces the civil penalty proposed by letter dated May 1, 2006 in the amount of $6,500 to $500. 2. H&G will continue to implement the following corrective actions:
(1)A new locking system (using two physical systems: a lock box installed in each dark room and utilization of the lock on the dark room door);
(2)conducting additional field audits;
(3)annual training on Operation and Emergency procedures regarding the requirements for the 2-person rule. 3. Not later than 1 year from the date of this Confirmatory Order, H&G will write and submit an article (for publication by both the American Society of Non-Destructive Testing
(ASNT)and the Non-Destructive Testing Managers Association (NDTMA)) that is mutually agreeable. The article will address the new H&G management oversight program (detailed below) and the value it adds to overall safe and effective operations. Not later than 11 months from the date of this Confirmatory Order, a draft of the proposed article will be submitted to the NRC Region IV office for review, comment, and concurrence. 4. H&G agrees to implement a management review and oversight program with the following elements:
(a)Training of the three area supervisors and three office managers to the Radiation Safety Officer level.
(b)Requiring each of the six individuals in 4(a) above to conduct unannounced audits of one of the other field offices on a rotating basis (quarterly for the first 2 years, and annually thereafter).
(c)Requiring one of the three senior corporate managers (Radiation Safety Officer, Chief Operations Officer, and President) to conduct unannounced performance observations at each of the field offices on a rotating basis twice a year, meaning each field office will receive a visit from a senior corporate manager twice each year. The Regional Administrator, NRC Region IV, may relax or rescind, in writing, any of the above conditions upon a showing by H&G of good cause. V Any person adversely affected by this Confirmatory Order, other than H&G, may request a hearing within 20 days of its issuance. Where good cause is shown, consideration will be given to extending the time to request a hearing. A request for extension of time must be made in writing to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC 20555, and include a statement of good cause for the extension. Any request for a hearing shall be submitted to the Secretary, U.S. Nuclear Regulatory Commission, ATTN: Rulemakings and Adjudications Staff, Washington, DC 20555. Copies also shall be sent to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC 20555, to the Assistant General Counsel for Materials Litigation and Enforcement at the same address, to the Regional Administrator, NRC Region IV, 611 Ryan Plaza Drive, Suite 400, Arlington, Texas 76011, and to H&G Inspection. Because of the possible disruptions in delivery of mail to United States Government offices, it is requested that answers and requests for hearing be transmitted to the Secretary of the Commission either by means of facsimile transmission to 301-415-1101 or by e-mail to *hearingdocket@nrc.gov* and also to the Office of the General Counsel either by means of facsimile transmission to 301-415-3725 or by e-mail to *OGCMailCenter@nrc.gov.* If such a person requests a hearing, that person shall set forth with particularity the manner in which his interest is adversely affected by this Order and shall address the criteria set forth in 10 CFR 2.309
(d)and (f). If a hearing is requested by a person whose interest is adversely affected, the Commission will issue an Order designating the time and place of any hearing. If a hearing is held, the issue to be considered at such hearing shall be whether this Confirmatory Order should be sustained. In the absence of any request for hearing, or written approval of an extension of time in which to request a hearing, the provisions specified in Section IV above shall be final 20 days from the date of this Order without further order or proceedings. If an extension of time for requesting a hearing has been approved, the provisions specified in Section IV shall be final when the extension expires if a hearing request has not been received. An answer or a request for hearing shall not stay the immediate effectiveness of this Order. Dated this 24th day of October, 2006. For the Nuclear Regulatory Commission. Bruce S. Mallett, Regional Administrator. [FR Doc. E6-19098 Filed 11-9-06; 8:45 am] BILLING CODE 7590-01-P RAILROAD RETIREMENT BOARD Agency Forms Submitted for OMB Review, Request for Comments SUMMARY: In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the Railroad Retirement Board
(RRB)will be sending an Information Collection Request
(ICR)to the Office of Information and Regulatory Affairs (OIRA), Office of Management and Budget
(OMB)to request a revision to the following collection of information: 3220-0002, Application for Employee Annuity Under the Railroad Retirement Act, consisting of RRB Form(s) AA-1, Application for Employee Annuity, AA-1cert, Application Summary and Certification, AA-1d, Application for Determination of Employee's Disability, and G-204, Verification of Worker's Compensation/Public Disability Benefit Information. Our ICR describes the information we seek to collect from the public. Review and approval by OIRA ensures that we impose appropriate paperwork burdens. The RRB invites comments on the proposed collection of information to determine
(1)the practical utility of the collection;
(2)the accuracy of the estimated burden of the collection;
(3)ways to enhance the quality, utility and clarity of the information that is the subject of collection; and
(4)ways to minimize the burden of collections on respondents, including the including the use of automated collection techniques or other forms of information technology. Comments to RRB or OIRA must contain the OMB control number of the ICR. For proper consideration of your comments, it is best if RRB and OIRA receive them within 30 days of publication date. *Previous Requests for Comments:* The RRB has already published the initial 60-day notice (71 FR 42887 on July 28, 2006) required by 44 U.S.C. 3506(c)(2). That request elicited no comments. Information Collection Request
(ICR)*Title:* Application for Employee Annuity Under the Railroad Retirement Act. *OMB Control Number:* 3220-0002. *Form(s) submitted:* AA-1, Application for Employee Annuity; AA-1cert, Application Summary and Certification; AA-1d, Application for Determination of Employee's Disability; and G-204, Verification of Worker's Compensation/Public Disability Benefit Information. *Type of request:* Revision of a currently approved collection. *Affected public:* Individuals or households, State or local government. *Obligation to Respond:* Required to obtain or retain benefits. *Abstract:* The Railroad Retirement Act provides for payment of age, disability, and supplemental annuities to qualified employees. The application and related forms obtain information about the applicant's family work history, military service, disability benefits from other government agencies and public or private pensions. The information is used to determine entitlement to and the amount of the annuity applied for. *Changes Proposed:* The RRB proposes changes to the certification statements of Form(s) AA-1 and AA-1(cert) that are intended to provide additional specificity regarding post-application events that require an applicant to contact the RRB. Other non-burden impacting editorial and formatting changes to Form AA-1cert and Form AA-1 are also proposed. The RRB also proposes the addition of an item to Form AA-1d to ask a disability applicant if any additional medical procedures are scheduled after the filing of the form, and if so, what those procedures are, as well as minor non-burden impacting, editorial and formatting changes. The RRB proposes no changes to Form G-204. *The burden estimate for this ICR is unchanged as follows:* *Estimated annual number of respondents:* 13,105. *Total annual responses:* 18,110. *Total annual reporting hours:* 9,498. FOR FURTHER INFORMATION CONTACT: Copies of the form and supporting documents can be obtained from Charles Mierzwa, the agency clearance officer at (312-751-3363) or *Charles.Mierzwa@rrb.gov* . *Comments:* Comments regarding the information collection should be addressed to Ronald J. Hodapp, Railroad Retirement Board, 844 North Rush Street, Chicago, Illinois 60611-2092 or *Ronald.Hodapp@rrb.gov* and to the OMB Desk Officer for the RRB, Karen Matsuoka at *kmatsuoka@omb.eop.gov* , FAX
(202)395-6974. Charles Mierzwa, RRB Clearance Officer. [FR Doc. E6-19067 Filed 11-9-06; 8:45 am] BILLING CODE 7905-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. IC-27546; File No. 812-13155] Annuity Investors Life Insurance Company, et al. November 6, 2006. AGENCY: Securities and Exchange Commission (“Commission”). ACTION: Notice of application for an order pursuant to Section 26(c) of the Investment Company Act of 1940, as amended (the “1940 Act”), approving certain substitutions of securities. APPLICANTS: Annuity Investors Life Insurance Company (“Annuity Investors”), Annuity Investors Variable Account A (“Variable Account A”), Annuity Investors Variable Account B (“Variable Account B”) and Annuity Investors Variable Account C (“Variable Account C,” together with Variable Account A and Variable Account B, the “Separate Accounts”) (collectively, the “Applicants”). SUMMARY: Applicants seek an order pursuant to Section 26(c) of the 1940 Act approving the proposed substitution of shares issued by Old Mutual Insurance Series Fund, DWS Investments VIT Fund, Wells Fargo Variable Trust, and Van Kampen-The Universal Institutional Funds, Inc. (the “Replaced Portfolios”) and held by Variable Account A, Variable Account B and Variable Account C (the “Substitutions”). FILING DATE: The Application was filed on January 18, 2005 and an amended and restated application was filed on October 30, 2006. HEARING OR NOTIFICATION OF HEARING: An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Secretary of the Commission and serving Applicants with a copy of the request, personally or by mail. Hearing requests must be received by the Commission by 5:30 p.m. on December 1, 2006, and should be accompanied by proof of service on Applicants in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the requester's interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Secretary of the Commission. ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. Applicants, Mark F. Muething, Esq., Executive Vice President and Secretary, Annuity Investors Life Insurance Company, P.O. Box 5423, Cincinnati, Ohio 45201-5423. FOR FURTHER INFORMATION CONTACT: Alison T. White, Senior Counsel, or Joyce M. Pickholz, Branch Chief, Office of Insurance Products, Division of Investment Management, at
(202)551-6795. SUPPLEMENTARY INFORMATION: The following is a summary of the Application. The complete Application is available for a fee from the Public Reference Branch of the Commission. Applicants' Representations 1. Annuity Investors is a stock life insurance company incorporated under the laws of Ohio. Annuity Investors is a subsidiary of Great American Life Insurance Company, which is a wholly-owned subsidiary of Great American Financial Resources, Inc. (“GAFRI”), a publicly traded insurance holding company. GAFRI is in turn indirectly controlled by American Financial Group, Inc., a publicly traded holding company. 2. Variable Account A was established in 1995. Variable Account A is registered under the Act as a unit investment trust (File No. 811-7299) and is used to fund variable annuity contracts issued by Annuity Investors. Two variable annuity contracts funded by Variable Account A are affected by this Application (the “Variable Account A Contracts”). 3. Variable Account B was established in 1996. Variable Account B is registered under the Act as a unit investment trust (File No. 811-8017) and is used to fund variable annuity contracts issued by Annuity Investors. Three variable annuity contracts funded by Variable Account B are affected by this Application (the “Variable Account B Contracts”). 4. Variable Account C was established in 2001. Variable Account C is registered under the Act as a unit investment trust (File No. 811-21095) and is used to fund variable annuity contracts issued by Annuity Investors. Two variable annuity contracts funded by Variable Account C are affected by this Application (the “Variable Account C Contracts,” together with the Variable Account A Contracts and the Variable Account B Contracts, the “Contracts”). 5. Purchase payments under the Contracts may be allocated to one or more subaccounts of the Separate Accounts. Income, gains and losses, whether or not realized, from assets allocated to the Separate Accounts are, as provided in the Contracts, credited to or charged against the Separate Accounts without regard to other income, gains or losses of Annuity Investors. The assets maintained in the Separate Accounts will not be charged with any liabilities arising out of any other business conducted by Annuity Investors. Nevertheless, all obligations arising under the Contracts, including the commitment to make annuity payments or death benefit payments, are general corporate obligations of Annuity Investors. Accordingly, all of the assets of Annuity Investors are available to meet its obligations under its Contracts. 6. Each of the Contracts permits allocations of accumulation value to available subaccounts that invest in specific investment portfolios of underlying mutual funds. As of May 1, 2006, each Variable Account A Contract offered 30 portfolios, each Variable Account B Contract offered 33 portfolios, and each Variable Account C Contract offered 38 portfolios. 7. All of the portfolios in Variable Account B Contracts and Variable Account C Contracts that are the subject of this Application were closed to new investors on or before November 30, 2004. All of the portfolios in Variable Account A Contracts that are the subject of these Substitutions were closed to new investors on or before May 1, 2005. 8. Each of the Contracts permits transfers of accumulation value from one subaccount to another subaccount at any time prior to annuitization, subject to certain restrictions and charges described below. A transfer fee of $25 is charged for each transfer in excess of 12 in any contract year to offset cost incurred in administering the Contracts. A variety of automatically scheduled transfers is permitted without charge and is not counted against the 12 free transfers in a contract year. Transfers from the Variable Account A Contracts and the Variable Account B Contracts must be at least $500, or, if less, the entire amount in the subaccount from which value is to be transferred. Transfers from the subaccounts of the Variable Account C Contracts may be of any amount. 9. Each of the Contracts reserves the right, upon notice to Contract owners and compliance with applicable law, to add or delete subaccounts or to substitute portfolios. This reservation of right is described in each Contract prospectus. 10. The Substitutions are being proposed by Annuity Investors to:
(a)Remove those fund families where the authorities have identified improper mutual fund trading and the Applicant is uncertain of the impact on the fund and its performance;
(b)substitute stable, established fund families with solid reputations and longevity; and
(c)replace those funds that are closed to new investors. None of the Applicants are affiliated with any of the Replaced Portfolios, the Replacement Portfolios or their respective investment advisers. 11. Specifically, Applicants propose the following substitutions: Substitution Replaced portfolio Replacement portfolio 1 Liberty Ridge Growth II Portfolio (now known as Old Mutual Growth II Portfolio) American Century VP Vista Fund—Class I. 2 Liberty Ridge Mid-Cap Portfolio (now known as Old Mutual Mid-Cap Portfolio) American Century VP Mid Cap Value—Class I. 3 Liberty Ridge Select Value Portfolio (now known as Old Mutual Select Value Portfolio) American Century VP Large Company Value—Class I. 4 Liberty Ridge Large Cap Growth Portfolio (now known as Old Mutual Large Cap Growth Portfolio) American Century VP Ultra Fund—Class I. 5 Liberty Ridge Technology & Communications Portfolio (now known as Old Mutual Columbus Circle Technology & Communications Portfolio) Dreyfus IP Technology Growth Portfolio—Initial Shares. 6 Scudder VIT Equity 500 Index Fund (now known as DWS Equity 500 Index VIP) Dreyfus Stock Index Fund, Inc.—Initial Shares. 7 Wells Fargo Advantage VT Discovery Fund American Century VP Vista Fund—Class I. 8 Wells Fargo Advantage VT Opportunity Fund AIM V.I. Capital Development Fund—Series I Shares. 9 Wells Fargo Advantage VT Opportunity Fund AIM V.I. Capital Development Fund—Series II Shares. 10 Van Kampen UIF Emerging Markets Equity Portfolio—Class I Janus Aspen Series International Growth Portfolio—Institutional Shares. Comparisons of Fees, Performance and Investment Objectives The investment objectives and expense and performance information for the year ended December 31, 2005, for each Replacement and Replaced Fund are as follows: 12. The American Century VP Vista Fund—Class I for the Liberty Ridge Growth II Portfolio (now known as Old Mutual Growth II Portfolio): Comparison of 2005 Fees [In percent] Portfolio Mgmt. fee 12b-1 fee Other expenses Total annual operating expenses Fee reduction Net total annual expenses Liberty Ridge Growth II Portfolio 0.825 None 0.365 1.19 0.15 1.04 American Century VP Vista Fund—Class I 1.00 None 0.01 1.01 N/A 1.01 Comparison of Performance as of December 31, 2005 Portfolio 1 year (percent) 3 year (percent) 5 year (percent) 10 year (percent) Inception Liberty Ridge Growth II Portfolio 11.35 14.28 (9.17) N/A 2.00% 4/30/97 American Century VP Vista Fund—Class I 8.13 21.12 N/A N/A 9.14% 10/5/01 The Liberty Ridge Growth II Portfolio is a capital appreciation fund that normally invests at least 65% of its net assets in equity securities of small- and mid-cap companies with favorable growth prospects. The American Century VP Vista Fund seeks long-term growth. The fund's managers look for stocks of medium-sized and smaller companies they believe will increase in value over time, using investment strategies developed by American Century. 13. American Century VP Mid Cap Value—Class I for the Liberty Ridge Mid-Cap Portfolio (now known as Old Mutual Mid-Cap Portfolio) Comparison of 2005 Fees [In percent] Portfolio Mgmt. fee 12b-1 fee Other expenses Total annual operating expenses Fee reduction Net total annual expenses Liberty Ridge Mid-Cap Portfolio 0.95 None 0.22 1.17 0.18 0.99 American Century VP Mid Cap Value—Class I 1.00 None 0.00 1.00 N/A 1.00 Comparison of Performance as of December 31, 2005 Portfolio 1 year (percent) 3 year (percent) 5 year (percent) 10 year (percent) Inception Liberty Ridge Mid-Cap Portfolio 5.71 9.06 8.18 N/A 14.78% 11/30/98 American Century VP Mid-Cap Value—Class I 9.56 N/A N/A N/A 12.89% 12//01/04 The Liberty Ridge Mid-Cap Portfolio seeks to provide investors with above-average total return over a 3 to 5 year market cycle, consistent with reasonable risk. The American Century VP Mid-Cap Value Fund seeks long-term capital growth. 14. American Century VP Large Company Value—Class I for Liberty Ridge Select Value Portfolio (now known as Old Mutual Select Value Portfolio) Comparison of 2005 Fees [In percent] Portfolio Mgmt. fee 12b-1 fee Other expenses Total annual operating expenses Fee reduction Net total annual expenses Liberty Ridge Select Value Portfolio 0.75 None 0.21 0.96 0.02 0.94 American Century VP Large Company Value—Class I 0.90 None 0.01 0.91 N/A 0.91 Comparison of Performance as of December 31, 2005 Portfolio 1 year (percent) 3 year (percent) 5 year (percent) 10 year Inception Liberty Ridge Select Value Portfolio 4.51 8.34 (0.62) N/A 7.38 10/28/97 American Century VP Large Company Value—Class I 4.83 N/A N/A N/A 6.66 12/01/04 The Liberty Ridge Select Value Portfolio seeks to provide investors long-term growth of capital and income. Current income is a secondary objective. The American Century VP Large Company Value Fund seeks long-term capital growth. Income is a secondary objective. 15. American Century VP Ultra Fund Value-Class I for Liberty Ridge Large Cap Growth Portfolio (now known as Old Mutual Large Cap Growth Portfolio) Comparison of 2005 Fees [In percent] Portfolio Mgmt. fee 12b-1 fee Other expenses Total annual operating expenses Fee reduction Net total annual expenses Liberty Ridge Large Cap Growth Portfolio 0.85 None 0.30 1.15 0.19 0.96 American Century VP Ultra(r) Fund—Class I 1.00 None 0.01 1.01 N/A 1.01 Comparison of Performance as of December 31, 2005 Portfolio 1 year (percent) 3 year (percent) 5 year (percent) 10 year Inception Liberty Ridge Large Cap Growth Portfolio 4.56 14.33 (5.40) N/A 7.71 4/30/97 American Century VP Ultra® Fund—Class I 2.17 12.18 N/A N/A 0.85 5/01/01 The Liberty Ridge Large Cap Growth Portfolio seeks to provide investors with long-term growth of capital. The American Century VP Ultra Fund seeks long-term capital growth. 16. Dreyfus IP Technology Growth Portfolio-Initial Series for Liberty Ridge Technology & Communications Portfolio (now known as Old Mutual Columbus Circle Technology & Communications Portfolio) Comparison of 2005 Fees [In percent] Portfolio Mgmt. fee 12b-1 fee Other expenses Total annual operating expenses Fee reduction Net total annual expenses Liberty Ridge Technology & Communications Portfolio 0.95 None 0.19 1.14 0.29 0.85 Dreyfus IP Technology Growth Portfolio—Initial Shares 0.75 None 0.06 0.81 N/A 0.81 Comparison of Performance as of December 31, 2005 Portfolio 1 year (percent) 3 year (percent) 5 year (percent) 10 year Inception Liberty Ridge Technology & Communications Portfolio 9.91 19.35 (17.90) N/A (0.08) 4/30/97 Dreyfus IP Technology Growth Portfolio—Initial Series 3.78 16.32 (8.60) N/A (4.96) 8/31/99 The Liberty Ridge Technology & Communications Portfolio, a non-diversified fund, seeks to provide investors with long-term growth of capital. Current income is incidental to the portfolio's goal. To pursue this goal, the portfolio normally invests at least 80% of its net assets in equity securities of companies in the technology and communications sectors of the stock market. The Dreyfus IP Technology Growth Portfolio seeks capital appreciation. To pursue this goal, the portfolio normally invests at least 80% of its assets in the stocks of growth companies of any size that the fund manager believes to be leading procedures or beneficiaries of technological innovation. 17. Dreyfus Stock Index Fund, Inc.—Initial Series for the Scudder VIT Equity 500 Index Fund (now known as DWS Equity 500 Index VIP) Comparison of 2005 Fees [In percent] Portfolio Mgmt. fee 12b-1 fee Other expenses Total annual operating expenses Fee reduction Net total annual expenses Scudder VIT Equity 500 Index Fund 0.19 None 0.15 0.34 0.06 0.28 Dreyfus Stock Index Fund, Inc.—Initial Shares 0.25 None 0.02 0.27 N/A 0.27 Comparison of Performance as of December 31, 2005 Portfolio 1 year (percent) 3 year (percent) 5 year (percent) 10 year Inception Scudder VIT Equity 500 Index Fund 4.68 14.05 0.24 N/A 4.61 10/01/97 Dreyfus Stock Index Fund, Inc.—Initial Series 4.69 14.14 0.27 8.77 N/A The Scudder VIT Equity 500 Index Fund seeks to replicate, as closely as possible, before the deduction of expenses, the performance of the Standard & Poor's 500 Composite Stock Price Index. The Dreyfus Stock Index Fund, Inc. seeks to march the total return of the Standard & Poor's 500 Composite Stock Price Index. 18. American Century VP Vista Fund—Class I for Wells Fargo Advantage VT Discovery Fund Comparison of 2005 Fees [In percent] Portfolio Mgmt. fee 12b-1 fee Other expenses Total annual operating expenses Fee reduction Net total annual expenses Wells Fargo Advantage Discovery Fund SM 0.75 0.25 0.23 1.23 0.08 1.15 American Century VP Vista SM Fund—Class I 1.00 None 0.01 1.01 N/A 1.01 Comparison of Performance as of December 31, 2005 Portfolio 1 year (percent) 3 year (percent) 5 year (percent) 10 year Inception Wells Fargo Advantage Discovery Fund SM 8.27 20.44 9.85 7.77 N/A American Century VP Vista SM Fund—Class I 8.13 21.12 N/A N/A 9.14 10/05/01 The Wells Fargo Advantage VT Discovery Fund seeks capital appreciation by investing in securities of small- and medium-capitalization companies that the fund manager believes offer attractive opportunities for growth. The American Century VP Vista Fund seeks long-term capital growth. The fund's managers look for stocks of medium-sized and smaller companies they believes will increase in value over time, using investment strategies developed by American Century. 19. AIM V.I. Capital Development Fund—Series I Shares for the Wells Fargo Advantage VT Opportunity Fund Comparison of 2005 Fees [In percent] Portfolio Mgmt. fee 12b-1 fee Other expenses Total annual operating expenses Fee reduction Net total annual expenses Wells Fargo Advantage Opportunity Fund 0.72 0.25 0.21 1.18 0.11 1.07 AIM V.I. Capital Development Fund—Series I Shares 0.75 None 0.34 1.09 N/A 1.09 Comparison of Performance as of December 31, 2005 Portfolio 1 year (percent 3 year (percent) 5 year (percent) 10 year (percent) Inception Wells Fargo Advantage Opportunity Fund 7.88 20.45 4.25 11.54 N/A AIM V.I. Capital Development Fund—Series I Shares 9.61 19.66 4.37 N/A 6.46 5/01/98 The Wells Fargo Advantage VT Opportunity Fund seeks long-term capital appreciation. The fund manager invests in equity securities of medium-capitalization companies that it believes are under-priced yet, have attractive growth prospects. The AIM V.I. Capital Development Fund's investment objective is long-term growth of capital. The fund seeks to meet its objective by investing primarily in securities of small- and medium-sized companies. 20. AIM V.I. Capital Development Fund—Series II Shares for the Wells Fargo Advantage VT Opportunity Fund Comparison of 2005 Fees [In percent] Portfolio Mgmt. fee 12b-1 fee Other expenses Total annual operating expenses Fee reduction Net total annual expenses Wells Fargo Advantage Opportunity Fund SM 0.72 0.25 0.21 1.18 0.11 1.07 AIM V.I. Capital Development Fund—Series II Shares 0.75 0.25 0.34 1.34 N/A 1.34 Comparison of Performance as of December 31, 2005 Portfolio 1 year (percent) 3 year (percent) 5 year (percent) 10 year (percent) Inception Wells Fargo Advantage Opportunity Fund SM 7.88 20.45 4.25 11.54 N/A AIM V.I. Capital Development Fund—Series II Shares 9.27 19.37 4.12 N/A 6.20 8/21/01 The Wells Fargo Advantage VT Opportunity Fund seeks long-term capital appreciation. The AIM V.I. Capital Development Fund's investment objective is long-term growth of capital. 21. Janus Aspen Series International Growth Portfolio—Institutional Shares for Van Kampen UIF Emerging Markets Equity Portfolio—Class I Comparison of 2005 Fees [In percent] Portfolio Mgmt. fee 12b-1 fee Other expenses Total annual operating expenses Fee reduction Net total annual expenses Van Kampen UIF Emerging Markets Equity Portfolio—Class I 1.25 None 0.41 1.66 0.01 1.65 Janus Aspen Series International Growth Portfolio—Institutional Shares 0.64 None 0.06 0.70 N/A 0.70 Comparison of Performance as of December 31, 2005 Portfolio 1 year (percent) 3 year (percent) 5 year (percent) 10 year (percent) Inception Van Kampen UIF Emerging Markets Portfolio—Class I 33.85 16.01 16.01 N/A 6.95 10/01/96 Janus Aspen Series International Growth Portfolio—Institutional Shares 32.28 28.52 3.93 13.27 13.00 5/02/94 The Van Kampen UIF Emerging Markets Equity Portfolio seeks long-term capital appreciation by investing primarily in growth-oriented equity securities of issuers in emerging market countries. The Janus Aspen Series International Growth Portfolio is a portfolio that seeks long-term growth of capital by investing, under normal circumstances, at least 80% of its net assets (plus the amount of any borrowings for investment purposes) in securities of issuers from several different countries, excluding the United States. 22. The Substitutions will take place at the portfolios' relative net asset values determined on the date of the Substitutions in accordance with Section 22 of the Act and Rule 22c-l thereunder with no change in the amount of any contract owner's cash value or death benefit or in the dollar value of his or her investment in any of the subaccounts. Accordingly, there will be no financial impact on any contract owner. The Substitutions will be effected by having each of the subaccounts that invests in the Replaced Portfolios redeem its shares for cash at the net asset value calculated on the date of the Substitutions and with such cash purchase shares of the respective Replacement Portfolios at the net asset value calculated on the same date. 23. New contract owners are not permitted to allocate funds to the subaccounts that invest in the Replaced Portfolios (“Closed Subaccounts”). As a result, the prospectuses dated May 1, 2006 for the contracts do not include any information about Closed Subaccounts. Information about the applicable proposed substitutions is included in the supplemental prospectuses dated May 1, 2006 for the Contracts (“2006 Supplemental Prospectuses”), which provide information about Closed Subaccounts to the current contract owners who are permitted to allocate funds to the Closed Subaccounts. 24. The Substitutions will be described in a supplement to the 2006 Supplemental Prospectuses (“Stickers”), which will be filed with the Commission and mailed to contract owners. The Stickers will give contract owners notice of the Substitutions and will describe the reasons for engaging in the Substitutions. The Stickers will also inform contract owners with assets allocated to Closed Subaccounts that no additional amount may be allocated to Closed Subaccounts on or after the date of the Substitutions. In addition, the Stickers will inform affected contract owners that they will have the opportunity to reallocate accumulation value without the imposition of any transfer charge or limitation and without diminishing the number of free transfers that may be made in a given contract year, both
(a)prior to the Substitutions from the Closed Subaccounts; and
(b)for 30 days after the Substitutions, from the Replacement Portfolios to subaccounts investing in other portfolios available under the respective Contracts. 25. The prospectuses for the Contracts, as supplemented by the Stickers, will reflect the Substitutions. Each contract owner will be provided with a prospectus for the Replacement Portfolios before the Substitutions. Within five days after the Substitutions, Annuity Investors will send affected contract owners written confirmation that the Substitutions have occurred. 26. Affected contract owners will not incur any fees or charges as a result of the Substitutions, nor will their rights or the obligations of the applicants under the Contracts be altered in any way. The Substitutions will not cause the fees and charges under the Contracts currently being paid by contract owners to be greater after the Substitutions than before the Substitutions. The Substitutions will have no adverse tax consequences to contract owners and will in no way alter the tax benefits to contract owners. Applicants' Legal Analysis 1. Section 26(c) of the Act makes it unlawful for any depositor or trustee of a registered unit investment trust holding the security of a single issuer to substitute another security for such security unless the Commission approves the substitution. The Commission will approve such a substitution if the evidence establishes that it is consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. 2. Applicants represent that the purposes, terms and conditions of the Substitutions are consistent with the principles and purposes of Section 26(c) and do not entail any of the abuses that Section 26(c) is designed to prevent. The Substitutions will not result in the type of costly forced redemption that Section 26(c) was intended to guard against and, for the following reasons, is consistent with the protection of investors and the purposes fairly intended by the Act:
(a)The investment objectives and policies of the Replacement Portfolios are sufficiently similar to those of the corresponding Replaced Portfolios (or its predecessor) that contract owners will have reasonable continuity in investment expectations.
(b)The net total annual expense ratio for the year ended December 31, 2005 of the Replacement Portfolio was the same as or lower than that of the Replaced Portfolio or, if the net total annual expense ratio of the Replacement Portfolio was higher than that of the Replaced Portfolio, Annuity Investors proposes to eliminate this difference for a period of time through an expense reduction at the Separate Account level. 3. In connection with the Substitutions, the Applicants make the following representations:
(a)The investment objectives and policies of each Replacement Portfolios are sufficiently similar to those of the corresponding Replaced Portfolio (or its predecessor) that contract owners will have reasonable continuity in investment expectations.
(b)The costs of the Substitutions, including any legal, accounting and brokerage costs, will be borne by Annuity Investors and will not be borne by contract owners. No charges will be assessed to effect the Substitutions.
(c)The Substitutions will be at the net asset values of the respective shares without the imposition of any transfer or similar charge and there will be no change in the amount of any contract owner's accumulation value, in the amount of his or her cash value or death benefit, or in the dollar value of his or her investment in any of the subaccounts in the applicable Separate Account as a result of the Substitutions.
(d)The Substitutions will not cause the fees and charges under the Contracts currently being paid by contract owners to be greater after the Substitutions than before the Substitutions and will result in contract owners' Contract values being moved to a Replacement Portfolio(s) with a net total annual expense ratio for the most recent fiscal year that is the same or lower than that of the corresponding Replaced Portfolio, except in the case of the four Replacement Portfolios in Substitutions 2, 4, 8 and 9 where, as discussed below in paragraph (i), Annuity Investors proposes to eliminate the difference in expenses (provided that the amount of such expenses is greater than $1.00 for such Contract) through an expense reduction at the Separate Account level.
(e)All Contract owners will be given notice of the Substitutions and the effective date of the Substitutions prior to the Substitutions and will have an opportunity, prior to the effective date of the Substitutions and for 30 days after the Substitutions, to reallocate accumulation value among other available subaccounts without the imposition of any transfer charge or limitation and without the reallocation counting as one of the contract owner's free transfers in a contract year.
(f)Within five days after the Substitutions, Annuity Investors will send to affected Contract owners written confirmation that the Substitutions have occurred and the written confirmation will reiterate that all Contract owners may, during the 30 day period after the effective date of the Substitutions, reallocate accumulation value among other available subaccounts without the imposition of any transfer charge or limitation and without the reallocation counting as one of the Contract owner's free transfers in a contract year.
(g)The Substitutions will in no way alter the insurance benefits to Contract owners or the contractual obligations of Annuity Investors.
(h)The Substitutions will have no adverse tax consequences to Contract owners and will in no way alter the tax benefits to Contract owners.
(i)If, on the last day of each fiscal quarter in the 12 month period following the Substitutions, the net total expense ratio of a Replacement Portfolio exceeds on an annualized basis the net total annual expense ratio of the corresponding Replaced Portfolio for the fiscal year ended December 31, 2005, Annuity Investors will, for each Contract outstanding on the date of the Substitutions, reimburse (provided that the amount of such reimbursement is greater than $1.00 for such Contract) the Separate Account as of the last day of such fiscal quarter so that the amount of the Replacement Portfolio's net expenses for such period, together with the applicable expenses of the corresponding Separate Account will, on an annualized basis, be no greater than the sum of the net expenses of the corresponding Replaced Portfolio and the applicable expenses of the Separate Account for the 2005 fiscal year. In addition, for 12 months following the Substitutions, Annuity Investors will not increase asset-based fees or charges for Contracts outstanding on the day of the Substitutions.
(j)In connection with assets held under Contracts affected by the Substitutions, Annuity Investors will not receive, for three years from the date of the Substitutions, any direct or indirect benefits from the Replacement Portfolios, their advisers or underwriters (or their affiliates) at a rate higher than that which they had received from the Replaced Portfolios, their advisers or underwriters (or their affiliates), including without limitation 12b-l, shareholder service, administration or other service fees, revenue sharing or other arrangements in connection with such assets. Annuity Investors represents that the Substitutions and the selection of the Replacement Portfolios were not motivated by any financial consideration paid or to be paid by the Replacement Portfolios, their advisers or underwriters, or their respective affiliates. Conclusion For the reasons and upon the facts set forth above, Applicants submit that the requested order meets the standards set forth in Section 26(c). Applicants request an order of the Commission, pursuant to Section 26(c) of the Act, approving the Substitutions. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Nancy M. Morris, Secretary. [FR Doc. E6-19075 Filed 11-9-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [File No. 500-1] In the Matter of FuelNation, Inc. and Sytron, Inc.; Order of Suspension of Trading November 8, 2006. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of FuelNation, Inc. because it has not filed any periodic reports since it filed a Form 10-QSB for the period ended March 31, 2004. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Sytron, Inc. because it has not filed any periodic reports since it filed a Form 10-SB on February 1, 2000. The Commission is of the opinion that the public interest and the protection of investors require a suspension of trading in the securities of the above-listed companies. Therefore, it is ordered, pursuant to Section 12(k) of the Securities Exchange Act of 1934, that trading in the above-listed companies is suspended for the period from 9:30 a.m. EST on November 8, 2006, through 11:59 p.m. EST on November 21, 2006. By the Commission. Nancy M. Morris, Secretary. [FR Doc. 06-9189 Filed 11-8-06; 11:55 am]
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- 49 CFR 177.842(d)
- 49 CFR 177
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Notice of application for an order pursuant to Section 26(c) of the Investment Company Act of 1940, as amended (the “1940 Act”), approving certain substitutions of securities
Cite49 CFR 177.842(d)
Cite49 CFR 177
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