Correspondence 0001104659-24-029895 from PACIFIC SELECT EXEC SEPARATE ACCT PACIFIC LIFE INS (CIK 0000832908)
PACIFIC SELECT EXEC SEPARATE ACCT PACIFIC LIFE INS (CIK 0000832908)
Date: March 1, 2024 · CIK: 0000832908 · Accession: 0001104659-24-029895
AI Filing Summary & Sentiment
File numbers found in text: 333-275837
Letter
Office of Insurance Products Division of Investment Management Washington, DC 20549-0506 Re: Pacific Life Insurance Company Response to SEC comments for Initial Registration Statement on Form N-6 File No. 333-275837
Dear Ms. Choo
On behalf of Pacific Life Insurance Company (“Pacific Life” or the “Company”), we have set forth below responses to the Staff comments received on January 30, 2024, in connection with the above-referenced initial registration statement on Form N-4, file no. 333-275837 (the “Registration Statement”), filed by the Company on December 1, 2023, under the Securities Act of 1933, as amended.
We have restated each of those comments below, and followed each comment with the Company's response to the comment. All agreed upon changes mentioned herein will appear in a pre-effective amendment to the Registration Statement at a later date. The Company will file correspondence with the Staff and will provide the Staff with a courtesy copy of the redlined prospectus reflecting those changes.
GENERAL
1. We note that material information relating to the Policy, including the terms of certain Investment Options, is missing from the Registration Statement. Please provide the missing information and exhibits in the next pre-effective amendment to the Registration Statement. We may have additional comments on such portions when you complete them in the pre-effective amendment, on disclosures made in response to this letter, on information supplied supplementally, or on exhibits filed in the pre-effective amendment.
Response: We hereby confirm that any missing information, including missing examples, and any additional exhibits will be included and filed in a subsequent pre-effective amendment to the initial Registration Statement.
2. Where a comment is made regarding disclosure in one location, it is applicable to all similar disclosure appearing elsewhere in the Prospectus. 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.
Response: We have made relevant updates throughout the registration statement.
3. Please clarify supplementally whether there are any types of guarantees or support agreements with third parties to support any Policy features or benefits, or whether the Company will be solely responsible for any benefits or features associated with the Policy.
Response: Other than reinsurance contracts, we hereby confirm that there are no third-party support agreements; the Company is primarily responsible for paying out any guarantees associated with the Policies.
PROSPECTUS
Cover Page
4. For clarity, please consider revising the first sentence to state that the Policy is issued by the Company, and that the Policy offers variable options, indexed fixed options and fixed options.
Response: Revisions have been made to address the Staff’s comments.
5. In an appropriate location on the cover page, please add the following:
a. In a prominent manner, that withdrawals are not allowed in the first Policy year;
Response: Revisions have been made to address the Staff’s comments.
b. Variable and indexed-linked life insurance policies are complex investment vehicles, and an investor should speak with their financial professional about Policy features, Investment Options, benefits, risks, and fees and whether the Policy is appropriate for them based on their financial situation and objectives; and
Response: Revisions have been made to address the Staff’s comments.
c. The Fixed Options and Indexed Fixed Options are not registered with the SEC. Please also add this statement in an appropriate location under Important Information You Should Consider About The Policy and/or Overview of The Policy.
Response: Revisions have been made to address the Staff’s comments.
Special Terms
6. The defined term Account Additions is used only once, in the definition of Allocation Instructions. For brevity, please consider deleting Account Additions as a defined term and explaining its meaning in the definition of Allocation Instructions.
Response: Revisions have been made to address the Staff’s comments.
7. Please address the following comments to the definition of Basic Life Coverage Layer:
a. The definition states that “[t]here may be one or more Basic Life Coverage Layers created at issue.” Please explain in an appropriate location in the Prospectus, how this could occur and any material considerations of having more than one Basic Life Coverage Layer at issue; and
Response: Revisions have been made to address the Staff’s comments.
8. The last sentence of the definition states that “[t]he Face Amount of a Basic Life Coverage Layer that is added after issue may be decreased to zero, but it cannot be terminated.” The sentence may be read to mean that the Face Amount of a Basic Life Coverage Layer added
at the time that the Policy is issued may be terminated. If this is the Company’s intention, add a specific statement to this effect. If the Face Amount of any Basic Life Coverage Layer may never be terminated, please remove “that is added after issue” from the sentence. The definition of Class states that Class is used to in determining “interest credited” and the “features of the Indexed Accounts.” Please explain in an appropriate location in the Prospectus how Class is used for this purpose.
Response: Revisions have been made to address the Staff’s comments.
9. The term Closing Value used in the definition of Index Growth Rate is not defined. Given the importance of the calculation of the Index Growth Rate, please add a definition for Closing Value.
Response: Revisions have been made to address the Staff’s comments.
10. Given the point-to-point nature of the Index return calculation, in the definition of Index Growth Rate please replace “over a certain period” with disclosure that the rate is determined by comparing the Closing Value of the Index as of the day before the beginning of the Segment Term to the Closing Value of the Index as of the day before the end of the Segment Term.
Response: Revisions have been made to address the Staff’s comments.
11. The term Indexed Fixed Option Value is not used in the Prospectus. Please remove the defined term.
Response: Revisions have been made to address the Staff’s comments.
12. The definitions for Indexed Account and Indexed Fixed Options are almost identical. Please revise so that the difference between the terms is readily understandable.
Response: Revisions have been made to address the Staff’s comments.
13. The definition of Segment Guaranteed Interest states that interest is credited “at an annual rate equal to [0]% for the Indexed Fixed Options.” The discussion under Your Investment Options—Indexed Fixed Options indicates that the Minimum Segment Guaranteed Interest Rate is 0% which suggests that the Segment Guaranteed Interest Rate could be higher. Please delete “equal to [0]%” from the definition of Segment Guaranteed Interest or explain to us why it would not be appropriate to do so.
Response: Revisions have been made to address the Staff’s comments.
14. “Segment Guaranteed Interest” is defined as “the interest we credit daily to each Segment in the 1-Year Indexed Account, and 1-Year High Par Volatility Control Indexed Account from the Segment Start Date to the Segment Maturity.” Please reconcile with disclosure elsewhere that “Minimum Segment Guaranteed Interest rate is the minimum annual rate that is added to each Index Segment at Segment Maturity.”
Response: Revisions have been made to address the Staff’s comments.
15. The definition of Segment Indexed Interest Rate refers to the Minimum Segment Guaranteed Interest Rate in describing the calculation of the Segment Indexed Interest Rate for the 1-Year Indexed Account and the Cumulative Segment Guaranteed Interest Rate in describing the calculation of the Segment Indexed Interest Rate for the 1 Year High Par Volatility Control Indexed Account. Please reconcile or explain in the disclosure how these terms differ.
Response: Revisions have been made to address the Staff’s comments.
16. Please consider whether the terms Segment Value and Indexed Account Value are duplicative and could be consolidated.
Response: The Company respectfully declines to consolidate the terms.
17. The term Total Face Amount is used throughout the Prospectus but is not defined. If the term has been replaced, please revise the Prospectus accordingly.
Response: Revisions have been made to address the Staff’s comments.
Important Information You Should Consider About the Contract
Risks
18. Under ─Not a Short-Term Investment, please add “for each Basic Life Coverage Layer added to the Policy” immediately following “Surrender charges apply for up to 14 years” in the first sentence of the second paragraph.
Response: Revisions have been made to address the Staff’s comments.
19. Under ─Contract Lapse, please disclose that there is no guarantee that a reinstatement will be approved.
Response: Revisions have been made to address the Staff’s comments.
Restrictions
20. Please address the following comments to ─Investments:
a. Add that once a Segment is created, an investor cannot transfer Accumulated Value out of that Segment until the end of the Segment Term. Money may be transferred out for withdrawals and Policy Loans; however, a Lockout Period will apply if the withdrawal or Loan is not part of a systematic distribution program;
Response: Revisions have been made to address the Staff’s comments.
b. Add a reference to Indexed Fixed Options in the statement that additional Fund and Fixed Option transfer restrictions apply;
Response: Revisions have been made to address the Staff’s comments.
c. Reconcile the restriction disclosed in the first sentence of the second paragraph with the discussion of transfer restrictions under Your Investment Options;
Response: Revisions have been made to address the Staff’s comments.
d. The disclosure states that “[t]here are amount and/or percentage limits on the amount that may be transferred from the Fixed Options” and, as a result, “it may take several Policy Years to transfer your Accumulated Value out of either of the Fixed Options.” The prior paragraph states that transfers from the Fixed Account to an Indexed Fixed Option are not counted for purposes of the yearly limit on transfers. Consider whether the quoted disclosure should be qualified; and
Response: The Company respectfully declines to make the revisions as both points are valuable to the investor and should remain as stated in the prospectus.
e. In the last paragraph, disclose the right the Company reserves to add, remove, or change Fixed Options and Indexed Fixed Options.
Response: Revisions have been made to address the Staff’s comments.
Overview of the Policy
21. Under Policy Features—Withdrawals, the disclosure states that no withdrawals may be made during the first year of the Policy. For the avoidance of doubt, please add that the Policy may be surrendered during the first year, or supplementally explain how prohibiting surrender during the first year is consistent with Sections 22(e) and 27(i)(2)(A) of the 1940 Act.
Response: Revisions have been made to address the Staff’s comments.
Fee Tables
22. Please add the following disclosure (which appears on page 74 of the Prospectus) to ─Periodic Charges Other Than Fund Operating Expenses:
We offer different underwriting methods such as guaranteed issue, simplified issue, or regular issue. The cost of insurance rates are generally higher if guaranteed issue or simplified issue are used, than if the Policy is issued through regular underwriting. As a result, a healthy individual who uses regular issue for the Policy may pay lower cost of insurance rates than if the individ
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CORRESP
1
filename1.htm
ALISON
RYAN
AVP &
Managing Assistant General Counsel II
Phone:
949-219-3268
March 1, 2024
Yoon Choo
Senior Counsel
Office of Insurance Products
Division of Investment Management
U.S. Securities & Exchange Commission
100 F Street, NE
Washington, DC 20549-0506
Re: Pacific
Life Insurance Company
Response to SEC comments
for Initial Registration Statement on Form N-6
File No. 333-275837
Dear Ms. Choo
On behalf of Pacific Life Insurance
Company (“Pacific Life” or the “Company”), we have set forth below responses to the Staff comments received on
January 30, 2024, in connection with the above-referenced initial registration statement on Form N-4, file no. 333-275837 (the “Registration
Statement”), filed by the Company on December 1, 2023, under the Securities Act of 1933, as amended.
We have restated each of those comments
below, and followed each comment with the Company's response to the comment. All agreed upon changes mentioned herein will appear in
a pre-effective amendment to the Registration Statement at a later date. The Company will file correspondence with the Staff and will
provide the Staff with a courtesy copy of the redlined prospectus reflecting those changes.
GENERAL
1. We note that material information
relating to the Policy, including the terms of certain Investment Options, is missing from
the Registration Statement. Please provide the missing information and exhibits in the next
pre-effective amendment to the Registration Statement. We may have additional comments on
such portions when you complete them in the pre-effective amendment, on disclosures made
in response to this letter, on information supplied supplementally, or on exhibits filed
in the pre-effective amendment.
Response:
We hereby confirm that any missing information, including missing examples, and any additional exhibits will be included and filed
in a subsequent pre-effective amendment to the initial Registration Statement.
2. Where a comment is made regarding
disclosure in one location, it is applicable to all similar disclosure appearing elsewhere
in the Prospectus. 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.
Response:
We have made relevant updates throughout the registration statement.
3. Please clarify supplementally whether
there are any types of guarantees or support agreements with third parties to support any
Policy features or benefits, or whether the Company will be solely responsible for any benefits
or features associated with the Policy.
Response:
Other than reinsurance contracts, we hereby confirm that there are no third-party support agreements; the Company is primarily responsible
for paying out any guarantees associated with the Policies.
PROSPECTUS
Cover Page
4. For clarity, please consider revising
the first sentence to state that the Policy is issued by the Company, and that the Policy
offers variable options, indexed fixed options and fixed options.
Response:
Revisions have been made to address the Staff’s comments.
5. In an appropriate location on the cover
page, please add the following:
a. In a prominent manner, that withdrawals
are not allowed in the first Policy year;
Response:
Revisions have been made to address the Staff’s comments.
b. Variable and indexed-linked life insurance
policies are complex investment vehicles, and an investor should speak with their financial
professional about Policy features, Investment Options, benefits, risks, and fees and whether
the Policy is appropriate for them based on their financial situation and objectives; and
Response:
Revisions have been made to address the Staff’s comments.
c. The Fixed Options and Indexed Fixed Options
are not registered with the SEC. Please also add this statement in an appropriate location
under Important Information You Should Consider About The Policy and/or Overview
of The Policy.
Response:
Revisions have been made to address the Staff’s comments.
Special
Terms
6. The defined term Account Additions
is used only once, in the definition of Allocation Instructions. For brevity, please consider
deleting Account Additions as a defined term and explaining its meaning in the definition
of Allocation Instructions.
Response:
Revisions have been made to address the Staff’s comments.
7. Please address the following comments
to the definition of Basic Life Coverage Layer:
a. The definition states that “[t]here
may be one or more Basic Life Coverage Layers created at issue.” Please explain in
an appropriate location in the Prospectus, how this could occur and any material considerations
of having more than one Basic Life Coverage Layer at issue; and
Response:
Revisions have been made to address the Staff’s comments.
8. The last
sentence of the definition states that “[t]he Face Amount of a Basic Life Coverage
Layer that is added after issue may be decreased to zero, but it cannot be terminated.”
The sentence may be read to mean that the Face Amount of a Basic Life Coverage Layer added
at
the time that the Policy is issued may be terminated. If this is the Company’s intention, add a specific statement to this effect.
If the Face Amount of any Basic Life Coverage Layer may never be terminated, please remove “that is added after issue” from
the sentence. The definition of Class states that Class is used to in determining “interest credited” and the “features
of the Indexed Accounts.” Please explain in an appropriate location in the Prospectus how Class is used for this purpose.
Response:
Revisions have been made to address the Staff’s comments.
9. The term Closing Value used in the
definition of Index Growth Rate is not defined. Given the importance of the calculation of
the Index Growth Rate, please add a definition for Closing Value.
Response:
Revisions have been made to address the Staff’s comments.
10. Given the point-to-point nature of
the Index return calculation, in the definition of Index Growth Rate please replace “over
a certain period” with disclosure that the rate is determined by comparing the Closing
Value of the Index as of the day before the beginning of the Segment Term to the Closing
Value of the Index as of the day before the end of the Segment Term.
Response:
Revisions have been made to address the Staff’s comments.
11. The term Indexed Fixed Option Value
is not used in the Prospectus. Please remove the defined term.
Response:
Revisions have been made to address the Staff’s comments.
12. The definitions for Indexed Account
and Indexed Fixed Options are almost identical. Please revise so that the difference between
the terms is readily understandable.
Response:
Revisions have been made to address the Staff’s comments.
13. The definition of Segment Guaranteed
Interest states that interest is credited “at an annual rate equal to [0]% for the
Indexed Fixed Options.” The discussion under Your Investment Options—Indexed
Fixed Options indicates that the Minimum Segment Guaranteed Interest Rate is 0% which suggests
that the Segment Guaranteed Interest Rate could be higher. Please delete “equal to
[0]%” from the definition of Segment Guaranteed Interest or explain to us why it would
not be appropriate to do so.
Response:
Revisions have been made to address the Staff’s comments.
14. “Segment Guaranteed Interest”
is defined as “the interest we credit daily to each Segment in the 1-Year Indexed Account,
and 1-Year High Par Volatility Control Indexed Account from the Segment Start Date to the
Segment Maturity.” Please reconcile with disclosure elsewhere that “Minimum Segment
Guaranteed Interest rate is the minimum annual rate that is added to each Index Segment at
Segment Maturity.”
Response:
Revisions have been made to address the Staff’s comments.
15. The definition of Segment Indexed
Interest Rate refers to the Minimum Segment Guaranteed Interest Rate in describing the calculation
of the Segment Indexed Interest Rate for the 1-Year Indexed Account and the Cumulative Segment
Guaranteed Interest Rate in describing the calculation of the Segment Indexed Interest Rate
for the 1 Year High Par Volatility Control Indexed Account. Please reconcile or explain in
the disclosure how these terms differ.
Response:
Revisions have been made to address the Staff’s comments.
16. Please consider whether the terms
Segment Value and Indexed Account Value are duplicative and could be consolidated.
Response:
The Company respectfully declines to consolidate the terms.
17. The term Total Face Amount is used
throughout the Prospectus but is not defined. If the term has been replaced, please revise
the Prospectus accordingly.
Response:
Revisions have been made to address the Staff’s comments.
Important Information
You Should Consider About the Contract
Risks
18. Under ─Not a Short-Term Investment,
please add “for each Basic Life Coverage Layer added to the Policy” immediately
following “Surrender charges apply for up to 14 years” in the first sentence
of the second paragraph.
Response:
Revisions have been made to address the Staff’s comments.
19. Under ─Contract Lapse,
please disclose that there is no guarantee that a reinstatement will be approved.
Response:
Revisions have been made to address the Staff’s comments.
Restrictions
20. Please address the following comments
to ─Investments:
a. Add that once a Segment is created, an
investor cannot transfer Accumulated Value out of that Segment until the end of the Segment
Term. Money may be transferred out for withdrawals and Policy Loans; however, a Lockout Period
will apply if the withdrawal or Loan is not part of a systematic distribution program;
Response:
Revisions have been made to address the Staff’s comments.
b. Add a reference
to Indexed Fixed Options in the statement that additional Fund and Fixed Option transfer
restrictions apply;
Response:
Revisions have been made to address the Staff’s comments.
c. Reconcile
the restriction disclosed in the first sentence of the second paragraph with the discussion
of transfer restrictions under Your Investment Options;
Response:
Revisions have been made to address the Staff’s comments.
d. The disclosure
states that “[t]here are amount and/or percentage limits on the amount that may be
transferred from the Fixed Options” and, as a result, “it may take several Policy
Years to transfer your Accumulated Value out of either of the Fixed Options.” The prior
paragraph states that transfers from the Fixed Account to an Indexed Fixed Option are not
counted for purposes of the yearly limit on transfers. Consider whether the quoted disclosure
should be qualified; and
Response: The
Company respectfully declines to make the revisions as both points are valuable to the investor and should remain as stated in the prospectus.
e. In the last
paragraph, disclose the right the Company reserves to add, remove, or change Fixed Options
and Indexed Fixed Options.
Response:
Revisions have been made to address the Staff’s comments.
Overview of the Policy
21. Under
Policy Features—Withdrawals, the disclosure states that no withdrawals may be
made during the first year of the Policy. For the avoidance of doubt, please add that the
Policy may be surrendered during the first year, or supplementally explain how prohibiting
surrender during the first year is consistent with Sections 22(e) and 27(i)(2)(A) of the
1940 Act.
Response:
Revisions have been made to address the Staff’s comments.
Fee Tables
22. Please add the following disclosure
(which appears on page 74 of the Prospectus) to ─Periodic Charges Other Than Fund
Operating Expenses:
We offer different underwriting
methods such as guaranteed issue, simplified issue, or regular issue. The cost of insurance rates are generally higher if guaranteed
issue or simplified issue are used, than if the Policy is issued through regular underwriting. As a result, a healthy individual who
uses regular issue for the Policy may pay lower cost of insurance rates than if the individ