Drinker Biddle’s Investment Management Practice Group has wide-ranging experience with the registered and exempt variable products operations of insurance companies and their separate accounts and with the regulation of underlying variable products mutual funds, their investment advisers and their principal underwriters, as well as with investment management products and entities not necessarily affiliated with an insurance product.
Registered Variable Products. We have advised on and assisted with the establishment and registration of separate accounts, the compliance of separate account operations with the federal securities laws, reorganizations and intact transfers of separate accounts, the development of variable annuity and variable life insurance products, including living benefit riders, the Securities and Exchange Commission registration of variable contracts and issues relating to insurance company sponsored asset allocation programs. The firm’s investment management lawyers have also advised on contract distribution and marketing issues arising under the federal securities laws, Financial Industry Regulatory Authority regulations and state laws, as well as insurance agency/broker-dealer registration issues.
Exempt Variable Products. In addition to advising insurance companies with respect to registered variable products, our investment management lawyers have advised on matters dealing with exempt group annuity contracts. This advice has extended to arrangements for underlying investment options for exempt separate accounts, including investments in unrelated retail funds and in sponsored variable products and retail funds, transfers of investments among underlying funds and conversions of “managed” separate accounts into unit investment trusts investing in underlying registered funds. We have also given advice regarding disclosure issues in connection with the offering of group contracts, arrangements with third party administrators, distribution and marketing compliance issues and related compensation matters and performance presentation issues at the exempt separate account level, including those arising in connection with “multi-unit” separate accounts.
Exemptive, No-Action and Interpretive Relief. We have obtained SEC orders authorizing, among other matters, separate account substitutions of underlying funds, transactions involving affiliates subject to Section 17, exchange offers subject to Section 11, variable contract bonus recapture features, mixed and shared funding, manager-of-managers operations and funds of funds structures and operations. We have also submitted no-action and interpretive requests to the SEC staff on a wide-range of matters, including Section 12(d)(1) relief for certain foreign “investment companies” investing in U.S. funds, procedures for reorganizing and consolidating affiliated insurance companies and their separate accounts, and use of predecessor fund performance by the successor fund after a fund combination.
Related Products and Activities. The firm’s lawyers have also advised insurance companies in connection with the registration of fixed products, including related periodic reporting requirements, the development of life insurance contracts designed for use in the bank owned life insurance (BOLI) market and the use of “non-unitized” separate accounts. We have also given advice regarding the Section 3(a)(8) exception and have issued Rule 151 and Section 3(a)(8) opinions, including with respect to fixed annuity contracts with market value adjustment features. Our lawyers are familiar with private placement principles and procedures, have worked regularly with Section 3(c)(1) and Section 3(c)(7) entities and have assisted and advised insurance companies in connection with the private placement of variable life insurance products.
We also counsel life insurance companies on a wide range of other matters, including developments in the marketplace for variable insurance products and mutual funds, responses to rule proposals and other regulatory initiatives, issues arising in connection with SEC examinations and investigations, best practices, structuring investment advisory and broker-dealer operations, defined contribution investment only programs, business method patents, commodity pool issues, reinsurance arrangements, financing transactions and compliance with reporting and other requirements under the federal securities laws.