Correspondence 0001193125-24-117363 from BRIGHTHOUSE LIFE INSURANCE Co (CIK 0000733076)
BRIGHTHOUSE LIFE INSURANCE Co (CIK 0000733076)
Date: April 26, 2024 · CIK: 0000733076 · Accession: 0001193125-24-117363
AI Filing Summary & Sentiment
File numbers found in text: 333-276599
Letter
Division of Investment Management Washington, DC 20549 Re: Brighthouse Life Insurance Company Brighthouse Shield Level II 6-Year Annuity Contract Registration Statement on Form S-3 (File No. 333-276599)
Dear Mr. Oh:
On behalf of Brighthouse Life Insurance Company (the “Registrant”), we are responding to the comments of the staff (the “Staff”) of the U.S. Securities and Exchange Commission (the “Commission”) provided to us via telephone on March 25, 2024, with regard to the above-referenced registration statement on Form S-3 (the “Registration Statement”) filed under the Securities Act of 1933, as amended (the “Securities Act”) with the Commission on January 19, 2024, relating to the above-referenced contracts (the “Contracts”).
For ease of reference, each of the comments of the Staff is set forth below, followed by the Registrant’s response. Page numbers referenced in the comments relate to the blacklined courtesy copy of the prospectus in the Registration Statement provided supplementally to the Staff. Defined terms used herein have the same meaning as in the prospectus in the Registration Statement.
1.
Cover Page
Comment:
On the front cover page and in the sections of the prospectus that discuss required minimum distributions disclose that:
The Contract may not be appropriate for you if you plan to take withdrawals from an Index Account Option prior to the end of the Index Account Option Term, especially if you plan to take ongoing withdrawals such as required minimum distributions. We apply an Interim Value adjustment to amounts removed from an Index Account Option during the Index Account Option Term, and if this adjustment
is negative, you could lose up to XX% of your investment. Withdrawals could also result in significant reductions to your contract value and the death benefit (perhaps by more than the amount withdrawn), as well as to the Index Adjustment credited at the end of the Index Account Option Term. Withdrawals may also be subject to surrender charges, income taxes, and income tax penalties if taken before age 59 1/2. If you do intend to take ongoing withdrawals under the Contract, particularly from an Index Account Option during the Index Account Option Term, you should consult with a financial professional.
On the front cover, disclose that the company could limit positive index gains.
Also prominently disclose on the cover that the currently offered options have buffers of A, B and C% and investors could lose up to X, Y and Z% in an index option due to poor index performance. Also prominently state with this disclosure that index options and downside limits could change in the future, but they will always offer an index option with a buffer of at least X%.
Response:
In line with Staff Comment 2, the Registrant will add certain of the requested disclosure regarding required minimum distributions to the Cover Page.
In addition, the Registrant will also add disclosure regarding the risks associated with Interim Value calculations and withdrawals, which is similar to the risk disclosure in the SmartGuard Plus “Risk Factors” section of the prospectus, but has been tailored to reflect the characteristics of the Contracts. The Registrant will add the following disclosure to the “Risk Factor—Risks of loss” section on page 15, but it does not believe it is necessary or appropriate to add the disclosure to the cover page of the prospectus:
“To determine the Interim Value, we apply a formula which does not reflect the actual performance of the applicable Index, but rather a determination of the value of hypothetical underlying investments at the time of the Interim Value calculation. This amount could be more or less than the Investment Amount on the Term End Date. It also means that you could have negative performance, even if the Index Value has increased at the time of the calculation. Unless you have exercised Performance Lock, all withdrawals from a Shield Option, including death benefit payments, transfers, annuitization, Performance Lock, and withdrawals before the Term End Date will be based on the Interim Value.
Withdrawals before a Term End Date could have adverse impacts even if the Index Value has increased at the time of the calculation because an early withdrawal will not allow you to participate in the Index Performance for the Term with your entire Investment Amount. If you withdraw Account Value allocated to a Shield Option, the withdrawal will reduce the Investment Amount for that Shield Option by the percentage reduction in the Interim Value of that Shield Option. A proportional reduction may be larger than the dollar amount of your withdrawal even if the Index Value has increased. If you have exercised the Performance Lock, a withdrawal will reduce your Performance Lock Value by the dollar amount of the withdrawal.”
We note that in the initial Registration Statement this disclosure was in the prospectus under the caption “Effects of Withdrawals, Surrender, Annuitization or Death”. To avoid unnecessary repetition and redundancy, we have moved portions of this disclosure to the “Risk of loss” and added a cross-reference to that section in the “Effects of Withdrawals, Surrender, Annuitization or Death.”
The Registrant respectfully declines to add requested disclosure such as an investor “could lose up to XX%” of his or her investment or that “the currently offered options have buffers of A, B and C% and investors could lose up to X, Y and Z.” This type of disclosure has been proposed but not yet adopted by the Commission in connection with the RILA/Form N-4 amendments, it believes that it would be most appropriate to wait for standardized rules in this respect. While the Registrant declines to add this specific disclosure, it notes that it will add disclosure stating that the investor could lose money, up to all or a significant amount of the principal, as well as earnings from prior Allocation Options.
The Registrant notes further that the last sentence of the last paragraph in the comment above is not supported by the Contract or Contract schedule – the Contract does not provide that it will always offer a Shield Option with a specified buffer. Moreover, this feature was not approved by any state insurance department, was not considered in pricing the Contract, and is not provided for in the current operational systems supporting the Contract. While the Registrant declines to add that a specific buffer rate will always be offered, the prospectus includes disclosure stating that one Shield Option available and also provides the minimum guaranteed rates for each rate crediting type.
2.
Cover Page
Comment:
Add risk of loss disclosure consistent with the Registrant’s “SmartGuard Plus” registered index-linked life insurance policy.
Response:
See the Registrant’s response to Comment 1.
3.
Cover Page
Comment:
Add free look disclosure.
Response:
The Registrant will add the requested disclosure.
4.
Special Terms—Account Value (Page 4)
Comment:
After “the value of the Shield Option(s),” add a parenthetical to the effect of “(i.e., the Investment Amount).”
Response:
The Registrant respectfully declines to add this additional disclosure because the value of the Shield Option depends on the day of calculation – it could be Investment Amount (if the calculation is on a Term Start Date or Term End Date), Interim Value (if any other Business Day other than a Term Start Date or Term End Date and the Performance Lock has not been exercised), or the Performance Lock Value. The Registrant posits that each of these terms is thoroughly defined and a
potential investor or contract owner will know what value applies to a particular Shield Option.
5.
Special Terms—Holding Account (Page 5)
Comment:
Would the statement in the second sentence of the definition of Fixed Account apply to the Holding Account, and if so, add the statement to the definition of Holding Account.
Response
The statement would apply and the Registrant will add the requested disclosure.
6.
Special Term—Fixed Account Term (Page 5)
Comment:
The Staff notes that with respect to the definition of “Fixed Account Term,” the Registrant substituted this term for “Interest Rate Term” used in previous Shield prospectuses, but used the terms “Interest Rate Term End Date” and “Interest Rate Term Start Date” on the next page.
Response:
The Registrant will revise the terms on the next page consistent with the Staff’s comments.
7.
Special Terms—Interim Value (Page 6)
Comment:
The Staff notes that the prospectus section referenced in the parenthetical “(as described in the “Calculation of Interim Value” section)” does not exist.
Response:
The Registrant will correct the reference.
8.
Special Terms—Investment Amount (Page 6)
Comment:
In the last sentence add “daily” before “Interim Value Calculation”.
Response:
The Registrant respectfully notes that the referenced sentence was recently drafted in close coordination with the Staff. Moreover, the definition of “Interim Value” states clearly that Interim Value is calculated on each Business Day, which term is clearer than “daily.” Accordingly, the Registrant respectfully declines to make the requested revision.
9.
Special Terms—Shield Rate (Page 8)
Comment:
Revise from “[a] buffer that limits the amount of any negative Index Performance that is absorbed by us at the Term End Date” to “[a] limited buffer that absorbs part of any negative Index Performance at the Term End Date”.
Response:
The Registrant notes that a “buffer” by its nature is limited, so using the term “a limited buffer” could be confusing to potential investors and contract owners. Accordingly, the Registrant respectfully declines to make the requested revision.
10.
Summary (Page 9)
Comment:
At the beginning of the fourth sentence in the third paragraph, add “based on” or “for example,” or delete “with a 1-Year Term.” Also, please add “when applicable” to the end of the sentence.
Response:
The Registrant will revise the disclosure for clarity.
11.
Summary (Page 9)
Comment:
In the third sentence of the fifth paragraph, disclose in what form contract owners will receive notification.
Response:
The Registrant will revise the disclosure as requested.
12.
Summary (Page 9)
Comment:
In connection with the struck-through sentence that begins with “[t]he Performance Lock rider ...”, supplementally confirm to the Staff that the Performance Lock Rider is available in all states or add disclosure stating that it is available in all states.
Response:
The Performance Lock feature is part of the Shield Option riders, and the Shield Option riders are approved in all states where the Contract is approved.
13.
Key Features of the Contract—Performance Lock (Page 11)
Comment:
The Staff notes that it finds the last sentence of the first paragraph confusing and suggests that the Registrant consider disclosure along the lines of “[t]he Performance Lock Value will be used as the Interim Value for the remainder of the term.”
Response:
The Registrant respectfully declines to add the suggested disclosure, because the suggested disclosure would be inconsistent with the way the Performance Lock feature works –once a contract owner exercises the Performance Lock for a Shield Option, the value of that Shield Option is the Performance Lock Value until the Term End Date or until the contract owner transfers out of that Shield Option on a Contract Anniversary. As such, that Shield Option no longer has an Interim Value or Investment Amount.
14.
Key Features of the Contract—Transfers (Page 12)
Comment:
Reconcile the last paragraph in the “Transfers” section with the last sentence on page 16 – “Partial transfers of Interim Value are not permitted.”
Response:
The Registrant will revise the disclosure for clarity.
15.
Risk Factors—Effect of Withdrawals, Surrender, Annuitization or Death (Page 15)
Comment:
Delete “make a withdrawal” in the first sentence of the second bullet.
Response:
The Registrant will delete the referenced disclosure.
16.
Risk Factors—Effect of Withdrawals, Surrender, Annuitization or Death (Page 16)
Comment:
Revise “have negative performance” in the third sentence in the first paragraph of the first full bullet on page 16 along the lines of “have a negative Interim Value....”
Response:
The Registrant will revise the disclosure for clarity. The Registrant also notes that it has moved this disclosure to the “Risk of loss” section.
17.
Risk Factors—Effect of Withdrawals, Surrender, Annuitization or Death (Page 16)
Comment:
Revise the last sentence in the first paragraph of the first full bullet on page 16 along the following lines: “If you exercise Performance Lock, [here’s what happens]. If you do not exercise Performance Lock, [here is what happens]”. Delete “transfers” in the same sentence.
Response:
The Registrant will revise the disclosure as requested.
18.
Risk Factors—Limitations on Transfers (Page 16)
Comment:
Please confirm the accuracy of the last sentence (in bold) on page 16.
Response:
The Registrant will revise the disclosure for clarity.
19.
Risk Factors—Availability of Shield Options (Page 17)
Comment:
Add the following to the end of the third sentence of the first paragraph on page 17: “although it may not be substantially similar to one of the currently available Shield Options.”
Response:
The Registrant will add the requested disclosure.
20.
Risk Factors—Shield Rate Risks (Page 17)
Comment:
Add the “Shield Options with Higher Shield Rates” risk factor from the Registrant’s supplement that described Step Rate Edge.
Response:
The Registrant will add the requested risk factor.
21.
The Annuity Contract (Page 20)
Comment:
With respect to the sentence in the second full paragraph on page 20 that begins “Your financial representative...,” the Staff notes that there was similar disclosure earlier in the prospectus and requests that the Registrant match that earlier disclosure here, which stated that “current and MINIMUM interest rates...”
Response:
The Registrant will revise the disclosure as requested.
22.
Term—Term End Date (Page 24)
Comment:
In the third sentence of the first full paragraph on page 24, replace “current” with “maturing.”
Response:
The Registrant will make the requested revision.
23.
Indices—Discontinuation or Substantial Change to an Index (Page 24)
Comment:
Beginning with the second sentence of the carry-over paragraph beginning at the bottom of page 24, generally match the disclosure in the remainder of this paragraph with the “An Index may be Substituted” disclosure on page 17. Before “Upon substitution...” add “The substituted Index may not be acceptable to you.” Then, for the remainder of this paragraph, add disclosure to the effect that “the performance of the new Index may not be as good as the one that is substituted and as a result your Index Performance may have been better if there had been no substitution.”
Response:
The Registrant will make the requested revisions.
24.
Indices—Index Value (Page 25)
Comment:
Revise the paragraph to be consistent with the newly revised definitio
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CORRESP 1 filename1.htm SEC Response 333-276599 ATTORNEYS AT LAW 1025 Thomas Jefferson Street, NW | Suite 400 West Washington, DC 20007-5208 202.965.8100 | fax 202.965.8104 www.carltonfields.com W. THOMAS CONNER Shareholder 202.965.8139 Direct Dial TConner@carltonfields.com April 24, 2024 Atlanta Florham Park Hartford Los Angeles Miami New York Orlando Tallahassee Tampa Washington, DC West Palm Beach Via Electronic Mail and Edgar Transmission Mr. Sonny Oh Senior Counsel Division of Investment Management Disclosure Review and Accounting Office U.S. Securities and Exchange Commission 100 F Street, N.E. Washington, DC 20549 Re: Brighthouse Life Insurance Company Brighthouse Shield Level II 6-Year Annuity Contract Registration Statement on Form S-3 (File No. 333-276599) Dear Mr. Oh: On behalf of Brighthouse Life Insurance Company (the “Registrant”), we are responding to the comments of the staff (the “Staff”) of the U.S. Securities and Exchange Commission (the “Commission”) provided to us via telephone on March 25, 2024, with regard to the above-referenced registration statement on Form S-3 (the “Registration Statement”) filed under the Securities Act of 1933, as amended (the “Securities Act”) with the Commission on January 19, 2024, relating to the above-referenced contracts (the “Contracts”). For ease of reference, each of the comments of the Staff is set forth below, followed by the Registrant’s response. Page numbers referenced in the comments relate to the blacklined courtesy copy of the prospectus in the Registration Statement provided supplementally to the Staff. Defined terms used herein have the same meaning as in the prospectus in the Registration Statement. 1. Cover Page Comment: On the front cover page and in the sections of the prospectus that discuss required minimum distributions disclose that: The Contract may not be appropriate for you if you plan to take withdrawals from an Index Account Option prior to the end of the Index Account Option Term, especially if you plan to take ongoing withdrawals such as required minimum distributions. We apply an Interim Value adjustment to amounts removed from an Index Account Option during the Index Account Option Term, and if this adjustment 1 is negative, you could lose up to XX% of your investment. Withdrawals could also result in significant reductions to your contract value and the death benefit (perhaps by more than the amount withdrawn), as well as to the Index Adjustment credited at the end of the Index Account Option Term. Withdrawals may also be subject to surrender charges, income taxes, and income tax penalties if taken before age 59 1/2. If you do intend to take ongoing withdrawals under the Contract, particularly from an Index Account Option during the Index Account Option Term, you should consult with a financial professional. On the front cover, disclose that the company could limit positive index gains. Also prominently disclose on the cover that the currently offered options have buffers of A, B and C% and investors could lose up to X, Y and Z% in an index option due to poor index performance. Also prominently state with this disclosure that index options and downside limits could change in the future, but they will always offer an index option with a buffer of at least X%. Response: In line with Staff Comment 2, the Registrant will add certain of the requested disclosure regarding required minimum distributions to the Cover Page. In addition, the Registrant will also add disclosure regarding the risks associated with Interim Value calculations and withdrawals, which is similar to the risk disclosure in the SmartGuard Plus “Risk Factors” section of the prospectus, but has been tailored to reflect the characteristics of the Contracts. The Registrant will add the following disclosure to the “Risk Factor—Risks of loss” section on page 15, but it does not believe it is necessary or appropriate to add the disclosure to the cover page of the prospectus: “To determine the Interim Value, we apply a formula which does not reflect the actual performance of the applicable Index, but rather a determination of the value of hypothetical underlying investments at the time of the Interim Value calculation. This amount could be more or less than the Investment Amount on the Term End Date. It also means that you could have negative performance, even if the Index Value has increased at the time of the calculation. Unless you have exercised Performance Lock, all withdrawals from a Shield Option, including death benefit payments, transfers, annuitization, Performance Lock, and withdrawals before the Term End Date will be based on the Interim Value. Withdrawals before a Term End Date could have adverse impacts even if the Index Value has increased at the time of the calculation because an early withdrawal will not allow you to participate in the Index Performance for the Term with your entire Investment Amount. If you withdraw Account Value allocated to a Shield Option, the withdrawal will reduce the Investment Amount for that Shield Option by the percentage reduction in the Interim Value of that Shield Option. A proportional reduction may be larger than the dollar amount of your withdrawal even if the Index Value has increased. If you have exercised the Performance Lock, a withdrawal will reduce your Performance Lock Value by the dollar amount of the withdrawal.” 2 We note that in the initial Registration Statement this disclosure was in the prospectus under the caption “Effects of Withdrawals, Surrender, Annuitization or Death”. To avoid unnecessary repetition and redundancy, we have moved portions of this disclosure to the “Risk of loss” and added a cross-reference to that section in the “Effects of Withdrawals, Surrender, Annuitization or Death.” The Registrant respectfully declines to add requested disclosure such as an investor “could lose up to XX%” of his or her investment or that “the currently offered options have buffers of A, B and C% and investors could lose up to X, Y and Z.” This type of disclosure has been proposed but not yet adopted by the Commission in connection with the RILA/Form N-4 amendments, it believes that it would be most appropriate to wait for standardized rules in this respect. While the Registrant declines to add this specific disclosure, it notes that it will add disclosure stating that the investor could lose money, up to all or a significant amount of the principal, as well as earnings from prior Allocation Options. The Registrant notes further that the last sentence of the last paragraph in the comment above is not supported by the Contract or Contract schedule – the Contract does not provide that it will always offer a Shield Option with a specified buffer. Moreover, this feature was not approved by any state insurance department, was not considered in pricing the Contract, and is not provided for in the current operational systems supporting the Contract. While the Registrant declines to add that a specific buffer rate will always be offered, the prospectus includes disclosure stating that one Shield Option available and also provides the minimum guaranteed rates for each rate crediting type. 2. Cover Page Comment: Add risk of loss disclosure consistent with the Registrant’s “SmartGuard Plus” registered index-linked life insurance policy. Response: See the Registrant’s response to Comment 1. 3. Cover Page Comment: Add free look disclosure. Response: The Registrant will add the requested disclosure. 4. Special Terms—Account Value (Page 4) Comment: After “the value of the Shield Option(s),” add a parenthetical to the effect of “(i.e., the Investment Amount).” Response: The Registrant respectfully declines to add this additional disclosure because the value of the Shield Option depends on the day of calculation – it could be Investment Amount (if the calculation is on a Term Start Date or Term End Date), Interim Value (if any other Business Day other than a Term Start Date or Term End Date and the Performance Lock has not been exercised), or the Performance Lock Value. The Registrant posits that each of these terms is thoroughly defined and a 3 potential investor or contract owner will know what value applies to a particular Shield Option. 5. Special Terms—Holding Account (Page 5) Comment: Would the statement in the second sentence of the definition of Fixed Account apply to the Holding Account, and if so, add the statement to the definition of Holding Account. Response The statement would apply and the Registrant will add the requested disclosure. 6. Special Term—Fixed Account Term (Page 5) Comment: The Staff notes that with respect to the definition of “Fixed Account Term,” the Registrant substituted this term for “Interest Rate Term” used in previous Shield prospectuses, but used the terms “Interest Rate Term End Date” and “Interest Rate Term Start Date” on the next page. Response: The Registrant will revise the terms on the next page consistent with the Staff’s comments. 7. Special Terms—Interim Value (Page 6) Comment: The Staff notes that the prospectus section referenced in the parenthetical “(as described in the “Calculation of Interim Value” section)” does not exist. Response: The Registrant will correct the reference. 8. Special Terms—Investment Amount (Page 6) Comment: In the last sentence add “daily” before “Interim Value Calculation”. Response: The Registrant respectfully notes that the referenced sentence was recently drafted in close coordination with the Staff. Moreover, the definition of “Interim Value” states clearly that Interim Value is calculated on each Business Day, which term is clearer than “daily.” Accordingly, the Registrant respectfully declines to make the requested revision. 9. Special Terms—Shield Rate (Page 8) Comment: Revise from “[a] buffer that limits the amount of any negative Index Performance that is absorbed by us at the Term End Date” to “[a] limited buffer that absorbs part of any negative Index Performance at the Term End Date”. Response: The Registrant notes that a “buffer” by its nature is limited, so using the term “a limited buffer” could be confusing to potential investors and contract owners. Accordingly, the Registrant respectfully declines to make the requested revision. 4 10. Summary (Page 9) Comment: At the beginning of the fourth sentence in the third paragraph, add “based on” or “for example,” or delete “with a 1-Year Term.” Also, please add “when applicable” to the end of the sentence. Response: The Registrant will revise the disclosure for clarity. 11. Summary (Page 9) Comment: In the third sentence of the fifth paragraph, disclose in what form contract owners will receive notification. Response: The Registrant will revise the disclosure as requested. 12. Summary (Page 9) Comment: In connection with the struck-through sentence that begins with “[t]he Performance Lock rider ...”, supplementally confirm to the Staff that the Performance Lock Rider is available in all states or add disclosure stating that it is available in all states. Response: The Performance Lock feature is part of the Shield Option riders, and the Shield Option riders are approved in all states where the Contract is approved. 13. Key Features of the Contract—Performance Lock (Page 11) Comment: The Staff notes that it finds the last sentence of the first paragraph confusing and suggests that the Registrant consider disclosure along the lines of “[t]he Performance Lock Value will be used as the Interim Value for the remainder of the term.” Response: The Registrant respectfully declines to add the suggested disclosure, because the suggested disclosure would be inconsistent with the way the Performance Lock feature works –once a contract owner exercises the Performance Lock for a Shield Option, the value of that Shield Option is the Performance Lock Value until the Term End Date or until the contract owner transfers out of that Shield Option on a Contract Anniversary. As such, that Shield Option no longer has an Interim Value or Investment Amount. 14. Key Features of the Contract—Transfers (Page 12) Comment: Reconcile the last paragraph in the “Transfers” section with the last sentence on page 16 – “Partial transfers of Interim Value are not permitted.” Response: The Registrant will revise the disclosure for clarity. 15. Risk Factors—Effect of Withdrawals, Surrender, Annuitization or Death (Page 15) Comment: Delete “make a withdrawal” in the first sentence of the second bullet. Response: The Registrant will delete the referenced disclosure. 5 16. Risk Factors—Effect of Withdrawals, Surrender, Annuitization or Death (Page 16) Comment: Revise “have negative performance” in the third sentence in the first paragraph of the first full bullet on page 16 along the lines of “have a negative Interim Value....” Response: The Registrant will revise the disclosure for clarity. The Registrant also notes that it has moved this disclosure to the “Risk of loss” section. 17. Risk Factors—Effect of Withdrawals, Surrender, Annuitization or Death (Page 16) Comment: Revise the last sentence in the first paragraph of the first full bullet on page 16 along the following lines: “If you exercise Performance Lock, [here’s what happens]. If you do not exercise Performance Lock, [here is what happens]”. Delete “transfers” in the same sentence. Response: The Registrant will revise the disclosure as requested. 18. Risk Factors—Limitations on Transfers (Page 16) Comment: Please confirm the accuracy of the last sentence (in bold) on page 16. Response: The Registrant will revise the disclosure for clarity. 19. Risk Factors—Availability of Shield Options (Page 17) Comment: Add the following to the end of the third sentence of the first paragraph on page 17: “although it may not be substantially similar to one of the currently available Shield Options.” Response: The Registrant will add the requested disclosure. 20. Risk Factors—Shield Rate Risks (Page 17) Comment: Add the “Shield Options with Higher Shield Rates” risk factor from the Registrant’s supplement that described Step Rate Edge. Response: The Registrant will add the requested risk factor. 21. The Annuity Contract (Page 20) Comment: With respect to the sentence in the second full paragraph on page 20 that begins “Your financial representative...,” the Staff notes that there was similar disclosure earlier in the prospectus and requests that the Registrant match that earlier disclosure here, which stated that “current and MINIMUM interest rates...” Response: The Registrant will revise the disclosure as requested. 22. Term—Term End Date (Page 24) Comment: In the third sentence of the first full paragraph on page 24, replace “current” with “maturing.” 6 Response: The Registrant will make the requested revision. 23. Indices—Discontinuation or Substantial Change to an Index (Page 24) Comment: Beginning with the second sentence of the carry-over paragraph beginning at the bottom of page 24, generally match the disclosure in the remainder of this paragraph with the “An Index may be Substituted” disclosure on page 17. Before “Upon substitution...” add “The substituted Index may not be acceptable to you.” Then, for the remainder of this paragraph, add disclosure to the effect that “the performance of the new Index may not be as good as the one that is substituted and as a result your Index Performance may have been better if there had been no substitution.” Response: The Registrant will make the requested revisions. 24. Indices—Index Value (Page 25) Comment: Revise the paragraph to be consistent with the newly revised definitio