SEC Company Response from ALLSTATE FINANCIAL ADVISORS SEPARATE ACCOUNT I (CIK 0001085612) — Apr 16, 2021
ALLSTATE FINANCIAL ADVISORS SEPARATE ACCOUNT I (CIK 0001085612)
Date: April 16, 2021 · CIK: 0001085612 · Accession: 0001628280-21-007085
AI Filing Summary & Sentiment
File numbers found in text: 333-102295, 811-09327
Letter
VIA EDGAR Division of Investment Management Securities and Exchange Commission Registration Statement on Form N-4 SEC File Nos. 333-102295 and 811-09327 Allstate Financial Advisors Separate Account I (Registrant) Allstate Life Insurance Company (Depositor)
Dear Mr. Oh:
On behalf of the above-referenced Registrant, below are responses to Staff comments received orally on Monday, April 12, 2021 on the registration statement noted above for the Morgan Stanley Asset Manager. Included in this submission are a revised prospectus and Statement of Additional Information which are marked to show the changes described below. Also included is a revised Part C.
The Staff’s comments and our responses are as follows:
1)Comment: In the Glossary, in the Portfolios definition, delete “or Variable Account” in the first line.
Response: We have made this change.
2)Comment: In the key information table in the introduction paragraph to the ongoing fees and expenses, add ‘options’ in the third line after the word Contract.
Response: This change has been made.
3)Comment: In the key information table in the ongoing fees and expenses section, why do the minimum and maximum vary?
Response: The minimum reflects that the contract maintenance charge may be waived in certain cases.
Sonny Oh, Esq.
April 16, 2021
Page 2
4)Comment: Confirm the expenses shown for the Investment Options in the Ongoing Fees and Expenses information in the key information table are gross, before fee waivers.
Response: We have confirmed that the numbers shown are gross before fee waivers.
5)Comment: In the key information table, Ongoing Fees and Expenses section, in the smaller table in the “Optional benefits” row, put ‘for a single optional benefit, if elected’ in parentheses.
Response: We have added the parentheses.
6)Comment: In the key information table, in the Risks section, in the row for Risks Associated with Investment Options, third line, change “including any fixed account investment option” to “including any investment alternative”
Response: This change has been made.
7)Comment: In the key information table in the Restrictions section, for the Optional Benefits row, add in the disclosure about how withdrawals may reduce benefits.
Response: We have added: Withdrawals that exceed limits specified by the terms of an optional benefit may affect the availability of the benefit by reducing the benefit by an amount greater than the value withdrawn, and/or could terminate the benefit.
8)Comment: In the Conflicts of Interest section of the table, change the section for “Investment Professional Compensation” to follow the correct language regarding financial incentives.
Response: We have changed the language to conform to what it should be by amending the first sentence and deleting the second sentence and replacing it as follows:
Some investment professionals may receive compensation for selling the Contracts to you in the form of commissions and other non-cash compensation (e.g., marketing allowances). Thus, these investment professionals may have a financial incentive to offer or recommend the Contracts over another investment.
9)Comment: In the Overview of the Contract chart, in the “Purpose” section, add the following disclosure: “The Contract is not intended for people who may need to make early or frequent withdrawals.”
Response: We have added this to the end of the first paragraph in that section.
10)Comment: In the Transaction Expenses section of the Expense Table, delete the two asterisks that appear after the $10 transfer fee.
Response: This deletion has been made.
11)Comment: In the introduction paragraph to the Annual Contract Expenses in the Expense Table section, delete “Company” in the second line.
Sonny Oh, Esq.
April 16, 2021
Page 3
Response: We have made the deletion.
12)Comment: In the Annual Contract Expenses table, in the line “Base Contract Expenses” replace ‘separate account’ with ‘variable account’
Response: We have made this change.
13)Comment: Confirm the Base Contract Expense is correct.
Response: We have confirmed the numbers are correct.
14)Comment: In the introduction paragraph to the Annual Portfolio Company Expenses, reference Appendix A as is required in the form.
Response: What we have as the introduction to the Annual Portfolio Company Expenses is taken from the new Form N-4. Here is what the Form states:
The next item shows the minimum and maximum total operating expenses charged by the Portfolio Companies that you may pay periodically during the time that you own the Contract. [These amounts also include applicable Platform Charges if you choose to invest in certain Portfolio Companies.] A complete list of Portfolio Companies available under the Contract, including their annual expenses, may be found at the back of this document.
This is what we have in the prospectus, except the parenthetical from the form is deleted as it is N/A. This is what we have:
The next item shows the minimum and maximum total operating expenses charged by the Portfolio Companies that you may pay periodically during the time that you own the Contract. A complete list of Portfolio Companies available under the Contract, including their annual expenses, may be found at the back of this document.
I checked and all of our other N-4’s have this same language.
15)Comment: In the Annual Contract Expenses section of the Fee Tables, add the footnote “Only one optional ‘combination’ benefit is allowed at any time” to each of the benefits listed that it applies to, rather than footnoting the “Optional Benefits” title. Reformat footnotes into numbers rather than asterisks for easier reading. Please confirm this is the only limitation.
Response: We have made this change and can confirm this is the only limitation.
16)Comment: in the Example at the end of the Expense Table section, you can combine the second and third rows into one since they are all the same numbers.
Response: We have combined these into one row and amended the row heading to incorporate both scenarios.
Sonny Oh, Esq.
April 16, 2021
Page 4
17)Comment: In the principal risks section, in the “Not a Short-Term Investment” subsection, add “penalty” at the very end.
Response: We have made this addition.
18)Comment: You may delete the Trial Exam Period section on page 14 since this contract is no longer sold.
Response: We have deleted that section.
19)Comment: Confirm hyperlinks are working and they take the reader where they are supposed to go and contain the correct documents / information (ie: see page 16, end of third paragraph of the Investment Alternatives: The Variable Sub-Accounts section.
Response: For the SEC filing, we cannot use an external hyperlink or the filing will be suspended. (When hyperlink is typed out or copy/pasted into browser it will take you to the correct page.) We have confirmed that the hyperlinks are correct and working in the pdf version that will be available online to investors.
20)Comment: Page 22; Expenses section – Explain the Mortality and Expense Risk Charge in relation to the base contract charge and also add in language to explain that the charges described in that section are current charges.
Response: We added the following sentence to that section: The mortality and expense risk charge is included in the base contract expense as shown in the "Expense Table" section. To reflect that the charges shown in the listing in this section are current (versus maximum), we added “current” to the introduction sentence to the list to read: “We deduct a mortality and expense risk charge daily at the following current annual rates (as a percentage of daily net assets):”
21)Comment: Page 22; Expenses section – Explain the Administrative Expense Charge in relation to the base contract charge.
Response: We added the following sentence to the paragraph: “The administrative expense charge is included in the base contract expense as shown in the "Expense Table" section.”
22)Comment: In the “Portfolio Expenses” section, please add the information for the Portfolio annual expenses.
Response: We have added the following second sentence: “Charges are deducted from and expenses paid out of the assets of the Portfolio Companies that are described in the prospectuses for those companies.” And also, just before the Appendix A reference in that paragraph, we have added in the following sentence: “For a summary of Portfolio annual expenses, see the “Expense Table” section of this prospectus.”
Sonny Oh, Esq.
April 16, 2021
Page 5
23)Comment: For the optional benefits, make sure all of the disclosure in the table has been incorporated into the narrative for the benefits as well.
Response: We added “Withdrawals will reduce the benefit, and such reductions could be significant.” to the applicable benefit narratives. It appears all of the other disclosures are in the narratives.
24)Comment: Remove ‘current’ from the fee column in the benefits table. For the two performance benefit options, move these two rows to the end of the table. Better summarize the restrictions and limitations for the Performance Income Benefit Option.
Response: we have removed “current” from the fee table column. The two performance options have been moved to the end of the table. We have removed bullets 4 through7 in the Performance Income Benefit Option and this information is in the narrative for this benefit.
25)Comment: In the “Income Plans” sub-section of the “Income Payments” section, add any transfer limitations after the payout start date.
Response: We have moved the information regarding transfers after the payout start date down one line to its own paragraph and added an italicized caption “Transfers:” All transfer limitations are noted in this section.
26)Comment: In the Income Plan 1 and Income Plan 3 sections, add disclosure as to who is paid after the annuitant dies.
Response: We have added the following to these sections: “If the sole surviving Contract Owner dies prior to the payment of all of the guaranteed income payments, the Primary Beneficiary will receive any guaranteed income payments scheduled to continue.”
27)Comment: Please confirm the accuracy of this statement, which is in the second paragraph after Income Plan 3 [emphasis added]:
For example, if you choose an Income Plan with payments that depend on the life of the Annuitant but with no minimum specified period for guaranteed payments, the income payments generally will be greater than the income payments made under the same Income Plan with a minimum specified period for guaranteed payments.
Response: We have deleted this paragraph and replaced it with an easier-to-understand description of the impact of frequency and duration on income payments. The new paragraph is:
Some of the factors that may affect the amount of the income payments include: your age, your Contract Value, the Income Plan selected (including the frequency and duration of payments under the Income Plan selected), number of guaranteed payments (if any) selected, and whether you select variable or fixed income payments. As a general rule, more frequent income payments will result in smaller individual income payments. Likewise, income payments that are anticipated over a longer period of time will also result in smaller individual income phase payments.
Sonny Oh, Esq.
April 16, 2021
Page 6
28)Comment: In the second paragraph above the “Variable Income Payments” Section the sentence containing the Performance Income Benefit Option, etc. appears in need of editing, as some of these referenced benefits do not appear in this product.
Response: We have edited this sentence to include only the Performance Income Benefit Option and the Performance Benefit Combination Option.
29)Comment: In the Death Benefits section, in the second paragraph in the Death Benefit Options sub-section, amend this to correct the optional benefits that are no longer available.
Response: We have corrected this sentence by deleting the Performance Income and Death Benefit option, and adding the Performance Benefit Combination option and Performance Death Benefit option.
30)Comment: In the Death Benefits section, under the Death Benefit Options sub-section, amend the first sentence in the Enhanced Death Benefit Option section to identify the states where the option is still available.
Response: We have deleted “in most states” and changed to “except in MN, ND, OR and PR.”
31)Comment: In the “More Information” section under “The Variable Account” delete ‘Depositor’.
Response: We have deleted this.
32)Comment: Verify that the Tax section been updated
Response: Yes, the Tax section has been updated.
33)Comment: In the SAI, reconcile the commissions paid for the Variable Account to Morgan Stanley. Under the Service Agreements section the last paragraph lays out amounts paid, but in the Underwriter section, it is stated that Morgan Stanley does not receive a commission as principal underwriter, and the last paragraph lists the amounts as $0.
Response: We have deleted the sentence that Morgan Stanley does not receive commissions and the paragraph which showed $0 in commissions. We have confirmed the paragraph showing the commission amounts is correct.
34)Comment: In the SAI, add in the section from the prospectus about the Net Investment Factor above the Calculation of Annuity Unit Values.
Response: We have added in that section.
35)Comment: In the Calculation of Annuity Unit Values, in the last paragraph, “accumulation” should be “annuity”
Response: We have made the change
Sonny Oh, Esq.
April 16, 2021
Page 7
36)Comment: Financial Statement section: this needs to be updated to reflect what is actually being done with the financials, since a 10-k is no longer filed.
Response: We have updated this section to delete the last paragraph that is N/A now.
37)Comment: Part C: Make sure to include (o) and state “Not applicable”
Response: This correction has been made
38)Comment: Part C: Make sure “filed herewith” documents are hyperlinked
Response: The final 485B filing will include all hyperlinks for those documents.
39)Comment: Part C: May omit Item 32 if this is in the N-CEN report
Response: We prefer to keep item 32 as it is.
40)Comment: Part C: Table of Exhibits: don’t include an item in the list if it is not included in the file.
Response: We have reviewed the items and believe all are required per the filing rules.
If you have any questions, please call me at (402) 304-7695.
Very truly yours,
_/s/ Jan Fischer-Wade______
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filename1.htm
assetmanagercombo
[ALLSTATE LOGO]
MORGAN STANLEYAssetManager letter
April 16, 2021
VIA EDGAR
Sonny Oh, Esq.
Disclosure Review and Accounting Office
Division of Investment Management
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
Re: Response to SEC Staff Comments on Post-Effective Amendment No. 23 to the
Registration Statement on Form N-4
SEC File Nos. 333-102295 and 811-09327
Allstate Financial Advisors Separate Account I (Registrant)
Allstate Life Insurance Company (Depositor)
Dear Mr. Oh:
On behalf of the above-referenced Registrant, below are responses to Staff comments received orally on Monday, April 12, 2021 on the registration statement noted above for the Morgan Stanley Asset Manager. Included in this submission are a revised prospectus and Statement of Additional Information which are marked to show the changes described below. Also included is a revised Part C.
The Staff’s comments and our responses are as follows:
1)Comment: In the Glossary, in the Portfolios definition, delete “or Variable Account” in the first line.
Response: We have made this change.
2)Comment: In the key information table in the introduction paragraph to the ongoing fees and expenses, add ‘options’ in the third line after the word Contract.
Response: This change has been made.
3)Comment: In the key information table in the ongoing fees and expenses section, why do the minimum and maximum vary?
Response: The minimum reflects that the contract maintenance charge may be waived in certain cases.
Sonny Oh, Esq.
April 16, 2021
Page 2
4)Comment: Confirm the expenses shown for the Investment Options in the Ongoing Fees and Expenses information in the key information table are gross, before fee waivers.
Response: We have confirmed that the numbers shown are gross before fee waivers.
5)Comment: In the key information table, Ongoing Fees and Expenses section, in the smaller table in the “Optional benefits” row, put ‘for a single optional benefit, if elected’ in parentheses.
Response: We have added the parentheses.
6)Comment: In the key information table, in the Risks section, in the row for Risks Associated with Investment Options, third line, change “including any fixed account investment option” to “including any investment alternative”
Response: This change has been made.
7)Comment: In the key information table in the Restrictions section, for the Optional Benefits row, add in the disclosure about how withdrawals may reduce benefits.
Response: We have added: Withdrawals that exceed limits specified by the terms of an optional benefit may affect the availability of the benefit by reducing the benefit by an amount greater than the value withdrawn, and/or could terminate the benefit.
8)Comment: In the Conflicts of Interest section of the table, change the section for “Investment Professional Compensation” to follow the correct language regarding financial incentives.
Response: We have changed the language to conform to what it should be by amending the first sentence and deleting the second sentence and replacing it as follows:
Some investment professionals may receive compensation for selling the Contracts to you in the form of commissions and other non-cash compensation (e.g., marketing allowances). Thus, these investment professionals may have a financial incentive to offer or recommend the Contracts over another investment.
9)Comment: In the Overview of the Contract chart, in the “Purpose” section, add the following disclosure: “The Contract is not intended for people who may need to make early or frequent withdrawals.”
Response: We have added this to the end of the first paragraph in that section.
10)Comment: In the Transaction Expenses section of the Expense Table, delete the two asterisks that appear after the $10 transfer fee.
Response: This deletion has been made.
11)Comment: In the introduction paragraph to the Annual Contract Expenses in the Expense Table section, delete “Company” in the second line.
2
Sonny Oh, Esq.
April 16, 2021
Page 3
Response: We have made the deletion.
12)Comment: In the Annual Contract Expenses table, in the line “Base Contract Expenses” replace ‘separate account’ with ‘variable account’
Response: We have made this change.
13)Comment: Confirm the Base Contract Expense is correct.
Response: We have confirmed the numbers are correct.
14)Comment: In the introduction paragraph to the Annual Portfolio Company Expenses, reference Appendix A as is required in the form.
Response: What we have as the introduction to the Annual Portfolio Company Expenses is taken from the new Form N-4. Here is what the Form states:
The next item shows the minimum and maximum total operating expenses charged by the Portfolio Companies that you may pay periodically during the time that you own the Contract. [These amounts also include applicable Platform Charges if you choose to invest in certain Portfolio Companies.] A complete list of Portfolio Companies available under the Contract, including their annual expenses, may be found at the back of this document.
This is what we have in the prospectus, except the parenthetical from the form is deleted as it is N/A. This is what we have:
The next item shows the minimum and maximum total operating expenses charged by the Portfolio Companies that you may pay periodically during the time that you own the Contract. A complete list of Portfolio Companies available under the Contract, including their annual expenses, may be found at the back of this document.
I checked and all of our other N-4’s have this same language.
15)Comment: In the Annual Contract Expenses section of the Fee Tables, add the footnote “Only one optional ‘combination’ benefit is allowed at any time” to each of the benefits listed that it applies to, rather than footnoting the “Optional Benefits” title. Reformat footnotes into numbers rather than asterisks for easier reading. Please confirm this is the only limitation.
Response: We have made this change and can confirm this is the only limitation.
16)Comment: in the Example at the end of the Expense Table section, you can combine the second and third rows into one since they are all the same numbers.
Response: We have combined these into one row and amended the row heading to incorporate both scenarios.
3
Sonny Oh, Esq.
April 16, 2021
Page 4
17)Comment: In the principal risks section, in the “Not a Short-Term Investment” subsection, add “penalty” at the very end.
Response: We have made this addition.
18)Comment: You may delete the Trial Exam Period section on page 14 since this contract is no longer sold.
Response: We have deleted that section.
19)Comment: Confirm hyperlinks are working and they take the reader where they are supposed to go and contain the correct documents / information (ie: see page 16, end of third paragraph of the Investment Alternatives: The Variable Sub-Accounts section.
Response: For the SEC filing, we cannot use an external hyperlink or the filing will be suspended. (When hyperlink is typed out or copy/pasted into browser it will take you to the correct page.) We have confirmed that the hyperlinks are correct and working in the pdf version that will be available online to investors.
20)Comment: Page 22; Expenses section – Explain the Mortality and Expense Risk Charge in relation to the base contract charge and also add in language to explain that the charges described in that section are current charges.
Response: We added the following sentence to that section: The mortality and expense risk charge is included in the base contract expense as shown in the "Expense Table" section. To reflect that the charges shown in the listing in this section are current (versus maximum), we added “current” to the introduction sentence to the list to read: “We deduct a mortality and expense risk charge daily at the following current annual rates (as a percentage of daily net assets):”
21)Comment: Page 22; Expenses section – Explain the Administrative Expense Charge in relation to the base contract charge.
Response: We added the following sentence to the paragraph: “The administrative expense charge is included in the base contract expense as shown in the "Expense Table" section.”
22)Comment: In the “Portfolio Expenses” section, please add the information for the Portfolio annual expenses.
Response: We have added the following second sentence: “Charges are deducted from and expenses paid out of the assets of the Portfolio Companies that are described in the prospectuses for those companies.” And also, just before the Appendix A reference in that paragraph, we have added in the following sentence: “For a summary of Portfolio annual expenses, see the “Expense Table” section of this prospectus.”
4
Sonny Oh, Esq.
April 16, 2021
Page 5
23)Comment: For the optional benefits, make sure all of the disclosure in the table has been incorporated into the narrative for the benefits as well.
Response: We added “Withdrawals will reduce the benefit, and such reductions could be significant.” to the applicable benefit narratives. It appears all of the other disclosures are in the narratives.
24)Comment: Remove ‘current’ from the fee column in the benefits table. For the two performance benefit options, move these two rows to the end of the table. Better summarize the restrictions and limitations for the Performance Income Benefit Option.
Response: we have removed “current” from the fee table column. The two performance options have been moved to the end of the table. We have removed bullets 4 through7 in the Performance Income Benefit Option and this information is in the narrative for this benefit.
25)Comment: In the “Income Plans” sub-section of the “Income Payments” section, add any transfer limitations after the payout start date.
Response: We have moved the information regarding transfers after the payout start date down one line to its own paragraph and added an italicized caption “Transfers:” All transfer limitations are noted in this section.
26)Comment: In the Income Plan 1 and Income Plan 3 sections, add disclosure as to who is paid after the annuitant dies.
Response: We have added the following to these sections: “If the sole surviving Contract Owner dies prior to the payment of all of the guaranteed income payments, the Primary Beneficiary will receive any guaranteed income payments scheduled to continue.”
27)Comment: Please confirm the accuracy of this statement, which is in the second paragraph after Income Plan 3 [emphasis added]:
For example, if you choose an Income Plan with payments that depend on the life of the Annuitant but with no minimum specified period for guaranteed payments, the income payments generally will be greater than the income payments made under the same Income Plan with a minimum specified period for guaranteed payments.
Response: We have deleted this paragraph and replaced it with an easier-to-understand description of the impact of frequency and duration on income payments. The new paragraph is:
Some of the factors that may affect the amount of the income payments include: your age, your Contract Value, the Income Plan selected (including the frequency and duration of payments under the Income Plan selected), number of guaranteed payments (if any) selected, and whether you select variable or fixed income payments. As a general rule, more frequent income payments will result in smaller individual income payments. Likewise, income payments that are anticipated over a longer period of time will also result in smaller individual income phase payments.
5
Sonny Oh, Esq.
April 16, 2021
Page 6
28)Comment: In the second paragraph above the “Variable Income Payments” Section the sentence containing the Performance Income Benefit Option, etc. appears in need of editing, as some of these referenced benefits do not appear in this product.
Response: We have edited this sentence to include only the Performance Income Benefit Option and the Performance Benefit Combination Option.
29)Comment: In the Death Benefits section, in the second paragraph in the Death Benefit Options sub-section, amend this to correct the optional benefits that are no longer available.
Response: We have corrected this sentence by deleting the Performance Income and Death Benefit option, and adding the Performance Benefit Combination option and Performance Death Benefit option.
30)Comment: In the Death Benefits section, under the Death Benefit Options sub-section, amend the first sentence in the Enhanced Death Benefit Option section to identify the states where the option is still available.
Response: We have deleted “in most states” and changed to “except in MN, ND, OR and PR.”
31)Comment: In the “More Information” section under “The Variable Account” delete ‘Depositor’.
Response: We have deleted this.
32)Comment: Verify that the Tax section been updated
Response: Yes, the Tax section has been updated.
33)Comment: In the SAI, reconcile the commissions paid for the Variable Account to Morgan Stanley. Under the Service Agreements section the last paragraph lays out amounts paid, but in the Underwriter section, it is stated that Morgan Stanley does not receive a commission as principal underwriter, and the last paragraph lists the amounts as $0.
Response: We have deleted the sentence that Morgan Stanley does not receive commissions and the paragraph which showed $0 in commissions. We have confirmed the paragraph showing the commission amounts is correct.
34)Comment: In the SAI, add in the section from the prospectus about the Net Investment Factor above the Calculation of Annuity Unit Values.
Response: We have added in that section.
35)Comment: In the Calculation of Annuity Unit Values, in the last paragraph, “accumulation” should be “annuity”
Response: We have made the change
6
Sonny Oh, Esq.
April 16, 2021
Page 7
36)Comment: Financial Statement section: this needs to be updated to reflect what is actually being done with the financials, since a 10-k is no longer filed.
Response: We have updated this section to delete the last paragraph that is N/A now.
37)Comment: Part C: Make sure to include (o) and state “Not applicable”
Response: This correction has been made
38)Comment: Part C: Make sure “filed herewith” documents are hyperlinked
Response: The final 485B filing will include all hyperlinks for those documents.
39)Comment: Part C: May omit Item 32 if this is in the N-CEN report
Response: We prefer to keep item 32 as it is.
40)Comment: Part C: Table of Exhibits: don’t include an item in the list if it is not included in the file.
Response: We have reviewed the items and believe all are required per the filing rules.
If you have any questions, please call me at (402) 304-7695.
Very truly yours,
_/s/ Jan Fischer-Wade______
Jan Fischer-Wade
Senior Counsel
7
Morgan Stanley Variable Annuity II Asset Manager
An individual and group flexible premium deferred variable annuity contract
Registrant: ALLSTATE FINANCIAL ADVISORS SEPARATE ACCOUNT I
Issued by: Allstate Life Insurance Company (“Allstate Life”)
Allstate Life Insurance Company
Street Address: 5801 SW 6th Ave., Topeka, KS 66606-0001
Mailing Address: P.O. Box 758543, Topeka, KS 66675-8566
Telephone Number: 1-800-457-7617
Fax: 1-785-228-4584
Prospectus dated April 30, 2021
Allstate Life Insurance Company (“Allstate Life”) offered the Morgan Stanley Variable Annuity II AssetManager, an individual and group flexible premium deferred variable annuity contract (“Contract”). Please keep it for future reference. The Contract is no longer offered for new sales effective July 1, 2003. If you have already purchased the Contract you may continue to make purchase payments according to the Contract.
Additional information about certain investment products, including variable annuities, has been prepared by the Securi