Correspondence 0001193125-23-266328 from RIVERSOURCE LIFE INSURANCE CO (CIK 0000727892)
RIVERSOURCE LIFE INSURANCE CO (CIK 0000727892)
Date: Oct. 30, 2023 · CIK: 0000727892 · Accession: 0001193125-23-266328
AI Filing Summary & Sentiment
File numbers found in text: 333-273966
Referenced dates: October 12, 2023
Letter
Division of Investment Management Securities and Exchange Commission Washington, D.C. 20549 RE: RiverSource Life Insurance Company Initial Registration Statement on Form S-3 File No. 333-273966
Dear Mr. Cowan:
On behalf of RiverSource Life Insurance Company (the “Company”), we are responding to the comments of the Staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) provided to us in a letter dated October 12, 2023, with regard to the Registration Statement on Form S-3 filed under the Securities Act of 1933, as amended (the “Securities Act”) with the Commission on August 14, 2023, which relates to the RiverSource® Structured Solutions 2 annuity, a Single Purchase Payment Deferred Indexed Linked Annuity Contract (the “Contract”) to be issued by RiverSource Life Insurance Company. Along with this letter, we are filing a revised prospectus, which reflects conforming edits.
Comments and responses are outlined below.
General
1. We note that material information relating to how the Contract operates, including as to the Indexed Accounts to be offered, is missing from the prospectus and registration statement. Please provide all missing information and exhibits in the next pre-effective amendment to the registration statement. We may have further comments when you supply the omitted information.
Response: The Company has added Indexed Accounts to be offered and updated other missing information. Exhibits will be updated in the next pre-effective amendment.
2. Please clarify supplementally whether there are any types of guarantees or support agreements with third parties to support any Contract features or benefits, or whether the Company will be solely responsible for any benefits or features associated with the Contract.
Response: The Company confirms that there are no types of guarantees or support agreements with third parties to support any Contract features or benefits. The Company is solely responsible for any benefits or features associated with the Contract.
3. Where a comment is made regarding disclosure in one location of the registration statement, it is applicable to all similar disclosure appearing elsewhere in the registration statement. Further, where disclosure is requested to be added in one place, please add similar disclosure to all other sections of the prospectus where such disclosure would be relevant. For example, disclosure requested in the cover should also be reflected in the summary, risk factors and elsewhere as appropriate.
Response: Noted.
Cover Page
4. Overall, we note that the Cover page is missing disclosure concerning key features and risks of the Contract that should be highlighted on the cover page. The comments noted below covers these additional points. In making your revisions, please strive to limit the disclosure to one page. See item 501 of Regulation S-K.
Response: Revisions have been made to the Cover page to address comments 4 through 18. Please see revised prospectus.
5. Please add a prominent statement that the Company does not allow additional purchase payments.
Response: Revised as requested.
6. Please state that the Contract is an insurance contract. It is not an index fund or an investment in any underlying mutual fund or ETF that tracks an index. Please also disclose that Index(es) used by an Indexed Account are price return indices and the performance of the Indexes does not reflect any dividends or distributions paid by the component companies included in the Index. Similarly, please state that the performance of the ETF does not include dividends paid by the ETF, if true.
Response: Revised as requested.
7. Please delete the term “initial” from the first sentence of the fourth paragraph as only one purchase payment may be made. Also, the disclosure notes that only certain Segments may have a declared maximum rate of return. Please be more specific as to which Segments. It may be helpful in this discussion to describe the upside rates offered.
Response: Revised as requested.
8. Please revise the fifth paragraph to better explain how Segment Value is determined during the term and at the end of the term. In that regard, please describe how Segment Value is calculated during a Segment term (i.e., by explaining that the Segment Value calculation is determined using a formula that does not directly reflect the actual performance of the applicable Index, but rather uses the value of a hypothetical portfolio of instruments (including derivatives and fixed assets) that provides the Segment Value at maturity (referred to as the proxy value). In addition, please more clearly describe how Segment Value is determined at the Segment Maturity Date, including the maximum percentage of loss that could be sustained under each protection option.
Response: See response to Comment # 4.
9. Also, in the fifth paragraph, clarify in the first sentence that the Interim Account is available for transfers “under Monthly Income” after the MVA Period. Please also revise the disclosure regarding the optional automated transfer program. Later disclosure on pages 12 and 22 suggests that the program may be offered in the future. If the optional automated program is not currently offered, please delete the references to the automated transfer program here. Finally, please revise the fifth sentence to clarify that the protection option that can prevent a loss is the 100% Buffer protection option.
Response: See response to Comment # 4.
10. Please disclose what happens at the end of a Segment (e.g., We will allocate Your investment to Indexed Accounts in accordance with Your instructions. If You do not provide instructions, We will allocate [describe default allocation]. The Indexed Accounts available for new Segments could have different terms).
Response: See response to Comment # 4.
11. Please disclose that the Company reserves the right to add or remove Indexed Accounts and change the upside return features (subject to contractual minimum guarantees) at the end of Segment terms. Please also note that the Company reserves the right to substitute an Index during and at end of a Segment term and the consequences of such reservation. Please supplementally explain whether the reservation to remove Indexed Accounts could result in investors having no or only one Indexed Account available. We may have more comments based on your response.
Response: See response to Comment # 4. We have added disclosure stating we will always have at least 10 Indexed Account options.
12. The seventh paragraph should be revised to include the following points:
a. Specify all transactions (including partial and full surrenders, Monthly Income and required minimum distributions and free withdrawal amounts) that are subject to the interim Segment Value calculation. Please disclose that this calculation may be negative, and could significantly reduce Contract Value, the death benefit, annuitization and other payments, and the amount of earnings credited at the end of the Segment, perhaps by an amount greater than the amount withdrawn. Please clearly identify which transactions are also subject to Surrender Charges and MVA. Specify the maximum percentage loss that could be incurred with each protection option as a result of the interim Segment Value calculation in the event such transactions are made during the term. Clarify that amounts withdrawn from the Contract may also be subject to taxes and a 10% federal penalty if taken before age 591⁄2.
b. Disclose that Segment Value may also be affected by adjustments to the Investment Base, which is adjusted proportionally for partial surrenders and any other transactions (please specify which transactions) based on the percentage of Segment Value that is surrendered/deducted (i.e., the Investment Base is reduced by more or less than the dollar amount surrendered/deducted depending on whether the Segment Value is less than or greater than the Investment Base).
Response: See response to Comment # 4.
13. Please delete the sixth paragraph. The Interim Account does not need to be described on the cover page as it is only a holding account.
Response: Revised as requested.
14. Please delete the phrase “including any automatic transfers for the automated transfer program” from the first sentence of the ninth paragraph as latter disclosure suggests it is not yet offered. Please also delete the penultimate sentence as it is confusing.
Response: The optional automatic transfer program is currently offered, and the latter disclosure is revised to reflect this.
15. With respect to the elective or automatic lock feature discussed in paragraph twelve, if a lock is exercised, please disclose that surrenders after the lock are subject to Surrender Charges and an MVA if applicable, and that income taxes and tax penalties could apply.
Response: Revised as requested.
16. Please disclose the right to examine and cancel the Contract, including that a refund will be issued if returned during the free look period and state law will determine the length of this period and the amount of the refund received.
Response: Revised as requested.
17. Delete, or substantially streamline the last paragraph of the cover as it contains non-material information, which obscures material information about the Contract.
Response: Revised as requested.
18. Please disclose that the Contract does not provide tax deferral benefits, beyond those already provided under the Internal Revenue Code, for Contracts purchased as a Tax Qualified Contract.
Response: Revised as requested.
Table of Contents
19. Please include a topical heading and related section describing the Interim Account.
Response: We have revised the heading for the “Indexed Account(s) Value” to read “Segment Value Calculation for Indexed Account(s)” as our equivalent Interim Account disclosure is found under the subheading “Segment Value after the Segment start date and before the Segment Maturity Date”.
Defined Terms
20. We note that certain defined terms are not always capitalized (e.g., “Market Value Adjustment” and “Surrender Charge”). Conversely, we also note terms that are capitalized, but are not defined (e.g., “Automatic Lock Target” and “Annual Lock Segments”). Please revise disclosure as necessary to address these inconsistencies.
Response: Revised as requested.
21. Please revise the definition of “Interim Account” as necessary, based on how this account will be used with this Contract (e.g., including that the Interim Account can be used to hold transfers of Monthly Income and only referencing the optional automated transfer program if operational).
Response: Revised to state:
Also, used to hold amounts for the optional automated transfer program and transfers of the Monthly Income amount if elected by You. Amounts applied to the Interim Account earn a declared rate of interest.
22. The defined term “Segment” states that a Segment starts on the Contract Date or on a Contract Anniversary. Please state if these are the only dates a Segment can begin.
Response: Revised to state:
A Segment can only start on the Contract Date or on a Contract Anniversary.
Summary
Purpose
23. Please revise the second sentence of the first paragraph for clarity to state, “Until you decide to annuitize the Contract, You can take partial or full surrenders ................”
Response: Revised as requested.
24. In the last sentence of the second paragraph, please replace the phrase “or prior to the end of the” with “and” as the MVA and applicable Surrender Charge periods are the same.
Response: Revised as requested.
The Contract
25. Please delete the term “flexible” from the description of the Contract given that this is a single premium Contract.
Response: Revised as requested.
Buying the Contract
26. The last sentence of the second paragraph in the subsection entitled “Purchase Payment” states, “We reserve the right to limit in Our sole discretion how the purchase payment can be allocated among the available Indexed Accounts.” Please add that no such limitations are currently in place.
Response: Revised as requested.
27. In the subsection entitled “Right to Examine and Cancel,” please disclose that when purchase payments are required to be returned, the amount returned will be for the entire purchase payment and will not be based on the interim Segment Value calculation. Please make corresponding changes to later disclosure regarding the “Right to Examine and Cancel” on page 27.
Response: Revised as requested.
Investment Options
28. For Clarity, please consider revising the last sentence of the paragraph following the list of Indexed Accounts to clarify that “lesser” means the Index that has the lowest return to determine the Segment rate of return.
Response: Revised as requested.
29. Please clarify the first sentence of the next paragraph to state, “Over the course of Your Contract, We may add, discontinue or substitute an Index either at the end or in the middle of a Segment.” Please specify the minimum Buffer and Trigger percentages that would be applicable to any new Indexed Account option that may be offered in the future and add that the minimum value for any Caps, Contingent Returns, Upside Participation Rates, Annualized Income Rates and Annual Fee and other upside rates specified in this prospectus will be applicable to any new Indexed Account option that may be offered in the future.
Response: Revised as shown above. We have added the full list of available Indexed Accounts that will be offered, including minimum Buffers and Triggers, along with applicable minimum values for Caps, Contingent Returns, Upside Participation Rates, Annualized Income Rates and Annual Fee. Future Indexed Account options and their minimum Buffers and Triggers, along with applicable minimum values for Caps, Contingent Returns, Upside Participation Rates, Annualized Income Rates and Annual Fee are unknown at this time and would be filed with the SEC before offering, as applicable.
Initial Rates and Rate Lock
30. As there is no Fixed Account option, please delete “interest rates” from the first and third sentences. Similarly, other references to interest rates should be removed from the prospectus, except with respect to the Interim Account.
Response: Revised as requested.
31. Please also preface the third sentence to state, “If your Contract is not issued within the Rate Lock Period,.............”
Response: Revised as requested.
Renewal Rates
32. It is unclear what is intended by the last sentence of the second paragraph. Please revise for clarity.
Response: The last sentence is replaced with the following:
Renewal rates vary for in force contracts based on the Contract Date and the Segment start date.
Crediting Methods for the Indexed Accounts
33. The sentence following the second set of bullet points states that except for the Annual Lock with a Buffer crediting method, “the Segment rate of return is based on a single point in time.” Please explain what single point in time means here (e.g., the Segment rate of return is based on the difference between the Index Value on the Segment start date and Segment Maturity Date).
Response: Revised as shown below:
Except for the Annual Lock with a Buffer crediting method, the Segment rate of return is based on a single point in time (i.e., the Segment rate of return is based on the difference between the Index Value on the Segment start date and the Segment Maturity date).
Segment Value
34. Please preface the second sentence of the first paragraph by stating, “On each day before the Segment Maturity Date,.............”
Response: Revised as requested.
35. With respect to the fi
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CORRESP 1 filename1.htm CORRESP October 30, 2023 Mark Cowan Senior Counsel Disclosure Review and Accounting Office Division of Investment Management Securities and Exchange Commission 100 F Street, N.E. (Mail Stop 5-6) Washington, D.C. 20549 RE: RiverSource Life Insurance Company Initial Registration Statement on Form S-3 File No. 333-273966 Dear Mr. Cowan: On behalf of RiverSource Life Insurance Company (the “Company”), we are responding to the comments of the Staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) provided to us in a letter dated October 12, 2023, with regard to the Registration Statement on Form S-3 filed under the Securities Act of 1933, as amended (the “Securities Act”) with the Commission on August 14, 2023, which relates to the RiverSource® Structured Solutions 2 annuity, a Single Purchase Payment Deferred Indexed Linked Annuity Contract (the “Contract”) to be issued by RiverSource Life Insurance Company. Along with this letter, we are filing a revised prospectus, which reflects conforming edits. Comments and responses are outlined below. General 1. We note that material information relating to how the Contract operates, including as to the Indexed Accounts to be offered, is missing from the prospectus and registration statement. Please provide all missing information and exhibits in the next pre-effective amendment to the registration statement. We may have further comments when you supply the omitted information. Response: The Company has added Indexed Accounts to be offered and updated other missing information. Exhibits will be updated in the next pre-effective amendment. 2. Please clarify supplementally whether there are any types of guarantees or support agreements with third parties to support any Contract features or benefits, or whether the Company will be solely responsible for any benefits or features associated with the Contract. Response: The Company confirms that there are no types of guarantees or support agreements with third parties to support any Contract features or benefits. The Company is solely responsible for any benefits or features associated with the Contract. 1 3. Where a comment is made regarding disclosure in one location of the registration statement, it is applicable to all similar disclosure appearing elsewhere in the registration statement. Further, where disclosure is requested to be added in one place, please add similar disclosure to all other sections of the prospectus where such disclosure would be relevant. For example, disclosure requested in the cover should also be reflected in the summary, risk factors and elsewhere as appropriate. Response: Noted. Cover Page 4. Overall, we note that the Cover page is missing disclosure concerning key features and risks of the Contract that should be highlighted on the cover page. The comments noted below covers these additional points. In making your revisions, please strive to limit the disclosure to one page. See item 501 of Regulation S-K. Response: Revisions have been made to the Cover page to address comments 4 through 18. Please see revised prospectus. 5. Please add a prominent statement that the Company does not allow additional purchase payments. Response: Revised as requested. 6. Please state that the Contract is an insurance contract. It is not an index fund or an investment in any underlying mutual fund or ETF that tracks an index. Please also disclose that Index(es) used by an Indexed Account are price return indices and the performance of the Indexes does not reflect any dividends or distributions paid by the component companies included in the Index. Similarly, please state that the performance of the ETF does not include dividends paid by the ETF, if true. Response: Revised as requested. 7. Please delete the term “initial” from the first sentence of the fourth paragraph as only one purchase payment may be made. Also, the disclosure notes that only certain Segments may have a declared maximum rate of return. Please be more specific as to which Segments. It may be helpful in this discussion to describe the upside rates offered. Response: Revised as requested. 8. Please revise the fifth paragraph to better explain how Segment Value is determined during the term and at the end of the term. In that regard, please describe how Segment Value is calculated during a Segment term (i.e., by explaining that the Segment Value calculation is determined using a formula that does not directly reflect the actual performance of the applicable Index, but rather uses the value of a hypothetical portfolio of instruments (including derivatives and fixed assets) that provides the Segment Value at maturity (referred to as the proxy value). In addition, please more clearly describe how Segment Value is determined at the Segment Maturity Date, including the maximum percentage of loss that could be sustained under each protection option. 2 Response: See response to Comment # 4. 9. Also, in the fifth paragraph, clarify in the first sentence that the Interim Account is available for transfers “under Monthly Income” after the MVA Period. Please also revise the disclosure regarding the optional automated transfer program. Later disclosure on pages 12 and 22 suggests that the program may be offered in the future. If the optional automated program is not currently offered, please delete the references to the automated transfer program here. Finally, please revise the fifth sentence to clarify that the protection option that can prevent a loss is the 100% Buffer protection option. Response: See response to Comment # 4. 10. Please disclose what happens at the end of a Segment (e.g., We will allocate Your investment to Indexed Accounts in accordance with Your instructions. If You do not provide instructions, We will allocate [describe default allocation]. The Indexed Accounts available for new Segments could have different terms). Response: See response to Comment # 4. 11. Please disclose that the Company reserves the right to add or remove Indexed Accounts and change the upside return features (subject to contractual minimum guarantees) at the end of Segment terms. Please also note that the Company reserves the right to substitute an Index during and at end of a Segment term and the consequences of such reservation. Please supplementally explain whether the reservation to remove Indexed Accounts could result in investors having no or only one Indexed Account available. We may have more comments based on your response. Response: See response to Comment # 4. We have added disclosure stating we will always have at least 10 Indexed Account options. 12. The seventh paragraph should be revised to include the following points: a. Specify all transactions (including partial and full surrenders, Monthly Income and required minimum distributions and free withdrawal amounts) that are subject to the interim Segment Value calculation. Please disclose that this calculation may be negative, and could significantly reduce Contract Value, the death benefit, annuitization and other payments, and the amount of earnings credited at the end of the Segment, perhaps by an amount greater than the amount withdrawn. Please clearly identify which transactions are also subject to Surrender Charges and MVA. Specify the maximum percentage loss that could be incurred with each protection option as a result of the interim Segment Value calculation in the event such transactions are made during the term. Clarify that amounts withdrawn from the Contract may also be subject to taxes and a 10% federal penalty if taken before age 591⁄2. 3 b. Disclose that Segment Value may also be affected by adjustments to the Investment Base, which is adjusted proportionally for partial surrenders and any other transactions (please specify which transactions) based on the percentage of Segment Value that is surrendered/deducted (i.e., the Investment Base is reduced by more or less than the dollar amount surrendered/deducted depending on whether the Segment Value is less than or greater than the Investment Base). Response: See response to Comment # 4. 13. Please delete the sixth paragraph. The Interim Account does not need to be described on the cover page as it is only a holding account. Response: Revised as requested. 14. Please delete the phrase “including any automatic transfers for the automated transfer program” from the first sentence of the ninth paragraph as latter disclosure suggests it is not yet offered. Please also delete the penultimate sentence as it is confusing. Response: The optional automatic transfer program is currently offered, and the latter disclosure is revised to reflect this. 15. With respect to the elective or automatic lock feature discussed in paragraph twelve, if a lock is exercised, please disclose that surrenders after the lock are subject to Surrender Charges and an MVA if applicable, and that income taxes and tax penalties could apply. Response: Revised as requested. 16. Please disclose the right to examine and cancel the Contract, including that a refund will be issued if returned during the free look period and state law will determine the length of this period and the amount of the refund received. Response: Revised as requested. 17. Delete, or substantially streamline the last paragraph of the cover as it contains non-material information, which obscures material information about the Contract. Response: Revised as requested. 18. Please disclose that the Contract does not provide tax deferral benefits, beyond those already provided under the Internal Revenue Code, for Contracts purchased as a Tax Qualified Contract. Response: Revised as requested. 4 Table of Contents 19. Please include a topical heading and related section describing the Interim Account. Response: We have revised the heading for the “Indexed Account(s) Value” to read “Segment Value Calculation for Indexed Account(s)” as our equivalent Interim Account disclosure is found under the subheading “Segment Value after the Segment start date and before the Segment Maturity Date”. Defined Terms 20. We note that certain defined terms are not always capitalized (e.g., “Market Value Adjustment” and “Surrender Charge”). Conversely, we also note terms that are capitalized, but are not defined (e.g., “Automatic Lock Target” and “Annual Lock Segments”). Please revise disclosure as necessary to address these inconsistencies. Response: Revised as requested. 21. Please revise the definition of “Interim Account” as necessary, based on how this account will be used with this Contract (e.g., including that the Interim Account can be used to hold transfers of Monthly Income and only referencing the optional automated transfer program if operational). Response: Revised to state: Also, used to hold amounts for the optional automated transfer program and transfers of the Monthly Income amount if elected by You. Amounts applied to the Interim Account earn a declared rate of interest. 22. The defined term “Segment” states that a Segment starts on the Contract Date or on a Contract Anniversary. Please state if these are the only dates a Segment can begin. Response: Revised to state: A Segment can only start on the Contract Date or on a Contract Anniversary. Summary Purpose 23. Please revise the second sentence of the first paragraph for clarity to state, “Until you decide to annuitize the Contract, You can take partial or full surrenders ................” Response: Revised as requested. 24. In the last sentence of the second paragraph, please replace the phrase “or prior to the end of the” with “and” as the MVA and applicable Surrender Charge periods are the same. Response: Revised as requested. 5 The Contract 25. Please delete the term “flexible” from the description of the Contract given that this is a single premium Contract. Response: Revised as requested. Buying the Contract 26. The last sentence of the second paragraph in the subsection entitled “Purchase Payment” states, “We reserve the right to limit in Our sole discretion how the purchase payment can be allocated among the available Indexed Accounts.” Please add that no such limitations are currently in place. Response: Revised as requested. 27. In the subsection entitled “Right to Examine and Cancel,” please disclose that when purchase payments are required to be returned, the amount returned will be for the entire purchase payment and will not be based on the interim Segment Value calculation. Please make corresponding changes to later disclosure regarding the “Right to Examine and Cancel” on page 27. Response: Revised as requested. Investment Options 28. For Clarity, please consider revising the last sentence of the paragraph following the list of Indexed Accounts to clarify that “lesser” means the Index that has the lowest return to determine the Segment rate of return. Response: Revised as requested. 29. Please clarify the first sentence of the next paragraph to state, “Over the course of Your Contract, We may add, discontinue or substitute an Index either at the end or in the middle of a Segment.” Please specify the minimum Buffer and Trigger percentages that would be applicable to any new Indexed Account option that may be offered in the future and add that the minimum value for any Caps, Contingent Returns, Upside Participation Rates, Annualized Income Rates and Annual Fee and other upside rates specified in this prospectus will be applicable to any new Indexed Account option that may be offered in the future. Response: Revised as shown above. We have added the full list of available Indexed Accounts that will be offered, including minimum Buffers and Triggers, along with applicable minimum values for Caps, Contingent Returns, Upside Participation Rates, Annualized Income Rates and Annual Fee. Future Indexed Account options and their minimum Buffers and Triggers, along with applicable minimum values for Caps, Contingent Returns, Upside Participation Rates, Annualized Income Rates and Annual Fee are unknown at this time and would be filed with the SEC before offering, as applicable. 6 Initial Rates and Rate Lock 30. As there is no Fixed Account option, please delete “interest rates” from the first and third sentences. Similarly, other references to interest rates should be removed from the prospectus, except with respect to the Interim Account. Response: Revised as requested. 31. Please also preface the third sentence to state, “If your Contract is not issued within the Rate Lock Period,.............” Response: Revised as requested. Renewal Rates 32. It is unclear what is intended by the last sentence of the second paragraph. Please revise for clarity. Response: The last sentence is replaced with the following: Renewal rates vary for in force contracts based on the Contract Date and the Segment start date. Crediting Methods for the Indexed Accounts 33. The sentence following the second set of bullet points states that except for the Annual Lock with a Buffer crediting method, “the Segment rate of return is based on a single point in time.” Please explain what single point in time means here (e.g., the Segment rate of return is based on the difference between the Index Value on the Segment start date and Segment Maturity Date). Response: Revised as shown below: Except for the Annual Lock with a Buffer crediting method, the Segment rate of return is based on a single point in time (i.e., the Segment rate of return is based on the difference between the Index Value on the Segment start date and the Segment Maturity date). Segment Value 34. Please preface the second sentence of the first paragraph by stating, “On each day before the Segment Maturity Date,.............” Response: Revised as requested. 35. With respect to the fi