Correspondence 0000947703-22-000531 from PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT (CIK 0000947703)
PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT (CIK 0000947703)
Date: Dec. 5, 2022 · CIK: 0000947703 · Accession: 0000947703-22-000531
AI Filing Summary & Sentiment
File numbers found in text: 333-267462, 333-267463, 811-07325
Referenced dates: November 15, 2022
Letter
VIA EDGAR Division of Investment Management Securities and Exchange Commission File No. 333-267462 Registration Statement on Form N-4 Pruco Life Insurance Company File Nos. 333-267463, 811-07325
Dear Mr. Zapata:
On behalf of the above-referenced Registrant, below are responses to Staff comments received by email dated November 15, 2022 to the registration statement filings noted above. Included in this submission are revised Form N-4 statutory and initial summary prospectuses, and Form S-3 prospectus, for FlexGuard Income Select contracts issued by Pruco Life Insurance Company (Pruco Life) which include the changes described below. The Staff’s comments and our responses are as follows.
Prudential FlexGuard Income Select on Form N-4
1. General Comments
a.Please confirm that all missing information, including all exhibits, will be filed in pre- effective amendments to the registration statements. We may have further comments when you supply the omitted information.
Alberto H. Zapata, Esq.
December 5, 2022
Page 2
Response:
We confirm that all missing information, including all exhibits, will be filed in pre-effective amendments to the registration statements.
b.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 Registrant will be solely responsible for any benefits or features associated with the Contract.
Response:
There are no types of guarantees or support agreements with third parties to support any Contract features or benefits. The Registrant is solely responsible for any benefits or features associated with the Contract.
2. Index Linked Variable Income Benefit Supplement
a. Please explain, supplementally, whether the Indexed Linked Variable Income Benefit Supplement will be used to amend both the prospectuses for the Contract filed under forms N-4 and S-3. If so, explain why both prospectuses are affected by changes in the Indexed Linked Variable Income Benefit Supplement.
Response:
The Indexed Linked Variable Income Benefit Supplement will be used to amend only the prospectus filed under Form N-4. It is Registrant’s understanding that Form S-3 does not permit such a Supplement to amend the prospectus filed under Form S-3.
b.The Index Linked Variable Income Benefit Supplement states that it provides the Income Percentages, Income Deferral Rates, Waiting Period, and Benefit Charge. Please confirm, supplementally, whether the registrant intends to be able to change all four of these parameters via this Supplement.
Response:
Registrant confirms that it intends to be able to change all four parameters – Income Percentage, Income Deferral Rates, Waiting Period and Benefit Charge -- via the Index Linked Variable Income Benefit Supplement.
3. Cover Pages
a.The registrant uses the defined term “Contract” beginning on the cover page of the prospectus, but that term is not defined. Please define Contract prior to first use.
Alberto H. Zapata, Esq.
December 5, 2022
Page 3
Response:
We have added “Contract” as a defined term in the second paragraph on the cover page of the prospectus.
b.Instead of referencing the sec.gov, please provide the registrant’s website and/or by email address for requesting the Statement of Additional Information. See Item 1(b)(1) of Form N-4.
Response:
We have removed reference to sec.gov and added reference to Registrant’s website (www.prudential.com/PLAZ-FlexGuard-Inc) for requesting the Statement of Additional Information.
c.As part of the back cover disclosure, the registrant states that the prospectus is being provided for informational and educational purposes and not intended to be investment advice. Please remove this bolded paragraph as it is not required or permitted by Form N-4. (see p. 57)
Response:
We have deleted the paragraph as requested.
4. Key Information Table
a.There are two different fees contained in the Base Contact Fees row. The second, according to the related footnote, is the Index Linked Variable Income Benefit charge which is a higher charge that can be cancelled after three years. Given that this Index Linked Variable Income Benefit charge is a built-in part of the initial Contract purchase, it should be included in a single Base Contract charge.
Response:
Registrant has not made the change to include the Index Linked Variable Income Benefit charge in a single Base Contract charge, for the following reasons. The two different fees shown on the Base Contract Fees row – (i) the mortality and expense risk charge and (ii) the Index Linked Variable Income Benefit Charge – are subject to different calculations. The mortality and expense risk charge is assessed only on a contract owner’s account value allocated to the single Variable Subaccount. The Index Linked Variable Income Benefit Charge is assessed on a contract owner’s full account value. In other words, there is no mortality and expense risk charge on account value allocated to the index strategies. It is likely that most account owner’s account value will be allocated to the index strategies offered and thus will not be subject to the mortality and expense risk charge. Registrant believes that maintaining disclosure of the two different fees separately will allow contract owners to make more informed investment allocation decisions.
Alberto H. Zapata, Esq.
December 5, 2022
Page 4
b.Please add a footnote to the Ongoing Fees and Expenses table explaining that investors should consult the Index Linked Variable Income Benefit Supplement for the latest current charges.
Response:
As requested, Registrant has added a footnote to the Ongoing Fee and Expenses table explaining that investors should consult the Index Linked Variable Income Benefit Supplement for the latest current charges.
5. Overview of the Annuity
Add disclosure explaining that withdrawals may be subject to ordinary income tax and related tax information for withdrawals taken prior to 59 ½.
Response:
As requested, Registrant has added the following disclosure to the “Overview of the Annuity” section:
“Withdrawals may be subject to ordinary income tax and a 10% additional tax for distributions taken prior to age 591/2.”
6. Fee Table
a.With reference to comment 4.a. above, combine the two charges listed into one Base Contract charge.
Response:
In accordance with Registrant’s response to comment 4.a. above, Registrant has not combined the two charges listed into one Base Contract charge, but rather maintained the two charges separately.
b.Redraft the Example section of the fee table such that the most expensive combination of features shown first, alone. Additional expense presentations can be shown below the most expensive presentation, as long as it is no more prominent than the maximum fee examples.
Response:
As requested, Registrant has redrafted the “Example” tables so that Maximum Fees are shown first and are most prominent.
Alberto H. Zapata, Esq.
December 5, 2022
Page 5
7. Rate Determination (p. 29)
This subsection contains references to “rate sheets” provided by the investor’s advisor. Is this disclosure referring to the Index Linked Variable Income Benefit Supplement or different supplements? Please clarify and, if the latter, please supplementally explain these different rate sheet supplements.
Response:
The “rate sheets” referenced in this subsection are not referring to the Index Linked Variable Income Benefit Supplement. Rather, these “rate sheets” refer to the Registrant’s marketing material containing the current Cap Rates, Participation Rates and Step Rates applicable to the Index Strategies currently offered. This rate sheet document is not a prospectus supplement. It is Registrant’s marketing material and is posted on our website.
8. Initial Summary Prospectus (exhibit)
a.Please make corresponding changes to the ISP in response to the above comments on the statutory prospectus.
Response:
As requested, Registrant has made corresponding changes to the ISP in response to the above comments on the statutory prospectus.
b.Given that the Index Linked Variable Income Benefit Supplement of the statutory prospectus affects terms contained in the ISP, please explain how the registrant will amend the ISP.
Response:
Registrant will amend the ISP by filing each new Index Linked Variable Income Benefit Supplement under 497VPI. The Supplement will be on top of the ISP and be delivered to new contract owners with the ISP.
c.There is no reference to the Index Linked Variable Income Benefit Supplement in the ISP. Add disclosure to the ISP concerning how the Index Linked Variable Income Benefit Supplement will affect terms in the ISP. Please add a defined term to the glossary for the Index Linked Variable Income Benefit Supplement if the supplement will be addressed in the ISP.
Response:
As requested, Registrant has added disclosure to the ISP concerning how the Index Linked Variable Income Benefit Supplement will impact terms in the ISP. In addition, Registrant has added a defined term to the “Special Terms” section of the ISP for the Index Linked Variable Income Benefit Supplement.
Alberto H. Zapata, Esq.
December 5, 2022
Page 6
d.Add disclosure to the ISP explaining which charges can be changed by the Index Linked Variable Income Benefit Supplement.
Response:
As requested, Registrant has added disclosure to the ISP explaining that the Income Percentages, Income Deferral Rates, Waiting Period and Benefit Charge may be changed by the Index Linked Variable Income Benefit Supplement.
Prudential FlexGuard Income Select on Form S-3
9. General Comments
a.Please add disclosure stating specific minimums rates for Buffers, Caps, Participation Rates, and Step Rates that investors are guaranteed for the life of the Contract, regardless of what Index Strategy is introduced or substituted.
Response:
As requested, Registrant has added disclosure stating specific minimum rates for Buffers, Cap Rates, Participation Rates and Step Rates that are Guaranteed Minimum Rates and minimum Buffer levels regardless of what Index Strategy is introduced or substituted.
b.The registrant includes Appendix D with this registration statement that covers certain state variations of the Contract. There does not appear to be a reference to Appendix D in the body of the prospectus. The registrant must disclose all material variations to the Contract. Please include in the prospectus disclosure summarizing all material state variations to the Contract and provide a cross-reference to Appendix D.
Response:
As requested, Registrant has added references to Appendix D in the body of the prospectus. In addition, Registrant has added disclosure summarizing all material state variations to the Contract in the prospectus and included cross-references to Appendix D.
10. Risk Factors
a. (p. 11) Risk of Change to the Index Linked Variable Income Benefit Supplement. The
registrant states that it cannot change the Benefit Terms for an Annuity once they are established. However, the registrant next states that it publishes any changes to the Benefit Terms in an amended Index Linked Variable Income Benefit Supplement (Supplement) at least seven calendar days before they take effect. This is confusing disclosure. Clarify whether the Supplement will change Benefit Terms only for new purchasers.
Response:
The Supplement reflects Benefit Terms only for new purchasers. Registrant has added clarifying disclosure in the Risk of Change to the Index Linked Variable Income Benefit Supplement subsection to that effect.
Alberto H. Zapata, Esq.
December 5, 2022
Page 7
11. Index Strategies (p. 13)
Consider adding charts and graphics to more clearly explain the Buffers, Caps,
Participation Rates, and Step Rates features of the Index Strategies.
Response:
Registrant will consider adding charts and graphics in future filings but will not add them in this filing.
If you have any questions, please call me at (203) 925-3707.
Very truly yours,
/s/Richard H. Kirk
Show Raw Text
CORRESP
1
filename1.htm
Combo FlexGuard Inc Sel N-4 Correspondence
Richard H. Kirk
Vice President, Corporate Counsel
The Prudential Insurance Company of America
213 Washington Street, Newark, NJ 07102-2917
Tel 203-925-3707
richard.kirk@prudential.com
December 5, 2022
VIA EDGAR
Alberto H. Zapata, Esq.
Senior Counsel
Disclosure Review and Accounting Office
Division of Investment Management
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
Re: Responses to SEC Staff Comments on Registration Statements
Registration Statement on Form S-3
Pruco Life Insurance Company
File No. 333-267462
Registration Statement on Form N-4
Pruco Life Insurance Company
File Nos. 333-267463, 811-07325
Dear Mr. Zapata:
On behalf of the above-referenced Registrant, below are responses to Staff comments received by email dated November 15, 2022 to the registration statement filings noted above. Included in this submission are revised Form N-4 statutory and initial summary prospectuses, and Form S-3 prospectus, for FlexGuard Income Select contracts issued by Pruco Life Insurance Company (Pruco Life) which include the changes described below. The Staff’s comments and our responses are as follows.
Prudential FlexGuard Income Select on Form N-4
1. General Comments
a.Please confirm that all missing information, including all exhibits, will be filed in pre- effective amendments to the registration statements. We may have further comments when you supply the omitted information.
Alberto H. Zapata, Esq.
December 5, 2022
Page 2
Response:
We confirm that all missing information, including all exhibits, will be filed in pre-effective amendments to the registration statements.
b.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 Registrant will be solely responsible for any benefits or features associated with the Contract.
Response:
There are no types of guarantees or support agreements with third parties to support any Contract features or benefits. The Registrant is solely responsible for any benefits or features associated with the Contract.
2. Index Linked Variable Income Benefit Supplement
a. Please explain, supplementally, whether the Indexed Linked Variable Income Benefit Supplement will be used to amend both the prospectuses for the Contract filed under forms N-4 and S-3. If so, explain why both prospectuses are affected by changes in the Indexed Linked Variable Income Benefit Supplement.
Response:
The Indexed Linked Variable Income Benefit Supplement will be used to amend only the prospectus filed under Form N-4. It is Registrant’s understanding that Form S-3 does not permit such a Supplement to amend the prospectus filed under Form S-3.
b.The Index Linked Variable Income Benefit Supplement states that it provides the Income Percentages, Income Deferral Rates, Waiting Period, and Benefit Charge. Please confirm, supplementally, whether the registrant intends to be able to change all four of these parameters via this Supplement.
Response:
Registrant confirms that it intends to be able to change all four parameters – Income Percentage, Income Deferral Rates, Waiting Period and Benefit Charge -- via the Index Linked Variable Income Benefit Supplement.
3. Cover Pages
a.The registrant uses the defined term “Contract” beginning on the cover page of the prospectus, but that term is not defined. Please define Contract prior to first use.
Alberto H. Zapata, Esq.
December 5, 2022
Page 3
Response:
We have added “Contract” as a defined term in the second paragraph on the cover page of the prospectus.
b.Instead of referencing the sec.gov, please provide the registrant’s website and/or by email address for requesting the Statement of Additional Information. See Item 1(b)(1) of Form N-4.
Response:
We have removed reference to sec.gov and added reference to Registrant’s website (www.prudential.com/PLAZ-FlexGuard-Inc) for requesting the Statement of Additional Information.
c.As part of the back cover disclosure, the registrant states that the prospectus is being provided for informational and educational purposes and not intended to be investment advice. Please remove this bolded paragraph as it is not required or permitted by Form N-4. (see p. 57)
Response:
We have deleted the paragraph as requested.
4. Key Information Table
a.There are two different fees contained in the Base Contact Fees row. The second, according to the related footnote, is the Index Linked Variable Income Benefit charge which is a higher charge that can be cancelled after three years. Given that this Index Linked Variable Income Benefit charge is a built-in part of the initial Contract purchase, it should be included in a single Base Contract charge.
Response:
Registrant has not made the change to include the Index Linked Variable Income Benefit charge in a single Base Contract charge, for the following reasons. The two different fees shown on the Base Contract Fees row – (i) the mortality and expense risk charge and (ii) the Index Linked Variable Income Benefit Charge – are subject to different calculations. The mortality and expense risk charge is assessed only on a contract owner’s account value allocated to the single Variable Subaccount. The Index Linked Variable Income Benefit Charge is assessed on a contract owner’s full account value. In other words, there is no mortality and expense risk charge on account value allocated to the index strategies. It is likely that most account owner’s account value will be allocated to the index strategies offered and thus will not be subject to the mortality and expense risk charge. Registrant believes that maintaining disclosure of the two different fees separately will allow contract owners to make more informed investment allocation decisions.
Alberto H. Zapata, Esq.
December 5, 2022
Page 4
b.Please add a footnote to the Ongoing Fees and Expenses table explaining that investors should consult the Index Linked Variable Income Benefit Supplement for the latest current charges.
Response:
As requested, Registrant has added a footnote to the Ongoing Fee and Expenses table explaining that investors should consult the Index Linked Variable Income Benefit Supplement for the latest current charges.
5. Overview of the Annuity
Add disclosure explaining that withdrawals may be subject to ordinary income tax and related tax information for withdrawals taken prior to 59 ½.
Response:
As requested, Registrant has added the following disclosure to the “Overview of the Annuity” section:
“Withdrawals may be subject to ordinary income tax and a 10% additional tax for distributions taken prior to age 591/2.”
6. Fee Table
a.With reference to comment 4.a. above, combine the two charges listed into one Base Contract charge.
Response:
In accordance with Registrant’s response to comment 4.a. above, Registrant has not combined the two charges listed into one Base Contract charge, but rather maintained the two charges separately.
b.Redraft the Example section of the fee table such that the most expensive combination of features shown first, alone. Additional expense presentations can be shown below the most expensive presentation, as long as it is no more prominent than the maximum fee examples.
Response:
As requested, Registrant has redrafted the “Example” tables so that Maximum Fees are shown first and are most prominent.
Alberto H. Zapata, Esq.
December 5, 2022
Page 5
7. Rate Determination (p. 29)
This subsection contains references to “rate sheets” provided by the investor’s advisor. Is this disclosure referring to the Index Linked Variable Income Benefit Supplement or different supplements? Please clarify and, if the latter, please supplementally explain these different rate sheet supplements.
Response:
The “rate sheets” referenced in this subsection are not referring to the Index Linked Variable Income Benefit Supplement. Rather, these “rate sheets” refer to the Registrant’s marketing material containing the current Cap Rates, Participation Rates and Step Rates applicable to the Index Strategies currently offered. This rate sheet document is not a prospectus supplement. It is Registrant’s marketing material and is posted on our website.
8. Initial Summary Prospectus (exhibit)
a.Please make corresponding changes to the ISP in response to the above comments on the statutory prospectus.
Response:
As requested, Registrant has made corresponding changes to the ISP in response to the above comments on the statutory prospectus.
b.Given that the Index Linked Variable Income Benefit Supplement of the statutory prospectus affects terms contained in the ISP, please explain how the registrant will amend the ISP.
Response:
Registrant will amend the ISP by filing each new Index Linked Variable Income Benefit Supplement under 497VPI. The Supplement will be on top of the ISP and be delivered to new contract owners with the ISP.
c.There is no reference to the Index Linked Variable Income Benefit Supplement in the ISP. Add disclosure to the ISP concerning how the Index Linked Variable Income Benefit Supplement will affect terms in the ISP. Please add a defined term to the glossary for the Index Linked Variable Income Benefit Supplement if the supplement will be addressed in the ISP.
Response:
As requested, Registrant has added disclosure to the ISP concerning how the Index Linked Variable Income Benefit Supplement will impact terms in the ISP. In addition, Registrant has added a defined term to the “Special Terms” section of the ISP for the Index Linked Variable Income Benefit Supplement.
Alberto H. Zapata, Esq.
December 5, 2022
Page 6
d.Add disclosure to the ISP explaining which charges can be changed by the Index Linked Variable Income Benefit Supplement.
Response:
As requested, Registrant has added disclosure to the ISP explaining that the Income Percentages, Income Deferral Rates, Waiting Period and Benefit Charge may be changed by the Index Linked Variable Income Benefit Supplement.
Prudential FlexGuard Income Select on Form S-3
9. General Comments
a.Please add disclosure stating specific minimums rates for Buffers, Caps, Participation Rates, and Step Rates that investors are guaranteed for the life of the Contract, regardless of what Index Strategy is introduced or substituted.
Response:
As requested, Registrant has added disclosure stating specific minimum rates for Buffers, Cap Rates, Participation Rates and Step Rates that are Guaranteed Minimum Rates and minimum Buffer levels regardless of what Index Strategy is introduced or substituted.
b.The registrant includes Appendix D with this registration statement that covers certain state variations of the Contract. There does not appear to be a reference to Appendix D in the body of the prospectus. The registrant must disclose all material variations to the Contract. Please include in the prospectus disclosure summarizing all material state variations to the Contract and provide a cross-reference to Appendix D.
Response:
As requested, Registrant has added references to Appendix D in the body of the prospectus. In addition, Registrant has added disclosure summarizing all material state variations to the Contract in the prospectus and included cross-references to Appendix D.
10. Risk Factors
a. (p. 11) Risk of Change to the Index Linked Variable Income Benefit Supplement. The
registrant states that it cannot change the Benefit Terms for an Annuity once they are established. However, the registrant next states that it publishes any changes to the Benefit Terms in an amended Index Linked Variable Income Benefit Supplement (Supplement) at least seven calendar days before they take effect. This is confusing disclosure. Clarify whether the Supplement will change Benefit Terms only for new purchasers.
Response:
The Supplement reflects Benefit Terms only for new purchasers. Registrant has added clarifying disclosure in the Risk of Change to the Index Linked Variable Income Benefit Supplement subsection to that effect.
Alberto H. Zapata, Esq.
December 5, 2022
Page 7
11. Index Strategies (p. 13)
Consider adding charts and graphics to more clearly explain the Buffers, Caps,
Participation Rates, and Step Rates features of the Index Strategies.
Response:
Registrant will consider adding charts and graphics in future filings but will not add them in this filing.
If you have any questions, please call me at (203) 925-3707.
Very truly yours,
/s/Richard H. Kirk
Richard H. Kirk
Vice President, Corporate Counsel
THE INFORMATION IN THE PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PRUCO LIFE INSURANCE COMPANY
Pruco Life Flexible Premium Variable Annuity Account
A Prudential Financial Company
751 Broad Street, Newark, NJ 07102-3777
PRUDENTIAL FLEXGUARD® INCOME SELECT
Single Premium Deferred Index-Linked and Variable Annuity (“B SERIES”)
PROSPECTUS:
This prospectus describes the Variable Investment Subaccounts available with Prudential FlexGuard Income Select B Series, a single premium deferred index-linked and variable annuity (“Annuity”) offered by Pruco Life Insurance Company (“Pruco Life”, “we”, “our”, or “us”). The Annuity provides for the potential accumulation of retirement savings through investment in certain Index Strategies and Variable Investment Subaccount during the Savings Stage and opportunity for lifetime income through a built-in living benefit rider during the Income Stage and Insured Income Stage, as well as Annuitization options. The Annuity is intended for retirement or other long-term investment purposes. The Index Strategy crediting options available with this Annuity are described in a separate prospectus, Prudential FlexGuard Income Select, Single Premium Deferred Index-Linked and Variable Annuity (B Series), File Number [______] (the “Index Strategies Prospectus”) which can be found online at [www.prudential.com/s3-Pruco-FlexGuard-income-indexed-va].
Clients seeking information regarding their particular investment needs should contact a Financial Professional. The Annuity is offered as an individual annuity contract (the "Contract") and has features and benefits that may be appropriate for you based on your financial situation, your age and how you intend to use the Annuity. The Annuity or certain of its Index Strategies, Variable Investment Subaccount and/or benefits and features may not be available in all states. For more information, see Appendix C, “Special Contract Provisions for Annuities Issued in Certain States.”
If you are a new investor in the Contract, you may cancel your Contract within 10 days of receiving it without paying fees or penalties. In some states, this cancellation period may be longer. Upon cancellation, you will receive either a full refund of the amount you paid with your application or your total Contract value. You should review this prospectus, or consult with your investment professional, for additional information about the specific cancellation terms that apply.
Financial Professionals may be compensated for the sale of the B Series. Selling broker-dealer firms may not make available or may not recommend the B Series of the Annuity and/or benefits described in this prospectus. Please speak to your Financial Professional for further details.
A selling broker-dealer firm may elect to make available only certain strategies, features or benefits to its clients. For example, a firm may choose to not make one of the index strategies, such as the Step Rate Plus