Filed with the Securities and Exchange Commission on February 15, 2024.
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
EQUITABLE FINANCIAL LIFE INSURANCE
COMPANY OF AMERICA
(Exact name of registrant as specified in its charter)EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
ARIZONA
(State or other jurisdiction of incorporation or organization)STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)
86-0222062
(I.R.S. Employer Identification No.)I. R. S. EMPLOYER IDENTIFICATION NUMBER)
8501 IBM Drive, SuiteDRIVE, SUITE 150, Charlotte,
CHARLOTTE, NC 28262-4333
(212) 554-1234
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRAT’S PRINCIPAL EXECUTIVE OFFICES)
Alfred Ayensu-GharteyALFRED AYENSU-GHARTEY
Vice President and Associate General CounselVICE PRESIDENT AND ASSOCIATE GENERAL COUNSEL
Equitable Financial Life Insurance Company of AmericaEQUITABLE FINANCIAL LIFE INSURANCE COMPANY OF AMERICA
8501 IBM Drive, SuiteDRIVE, SUITE 150, Charlotte,
CHARLOTTE, NC 28262-4333
(212) 554-1234
(Name, address, including zip code, and telephone number, including area code, of agent for service)NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
Approximate date of commencement of proposed sale to the public: As soon after the effective date of this Registration Statement as is practicable.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☐
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box: ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b)462 (b) under the Securities Act, please check the following box and list the Securities Act Registrationregistration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c)462 (c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Pursuant to Rule 429 under the Securities Act of 1933, the prospectus contained herein also relates to Registration Statement No. 333-265009. Upon effectiveness, this Registration Statement, which is a new Registration Statement, will also act as a post-effective amendment to such earlier Registration Statement.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”,“smaller reporting company” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | [ ] | Accelerated filer | ||||||
| Non-accelerated filer | ☒ | Smaller reporting company | ||||||
| Emerging growth company | ☐ | |||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.Act . ☐
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
Equitable Financial Life Insurance Company of America
Supplement dated May 1, 2024 to the current variable annuity prospectuses listed below
This Supplement provides important information regarding an assumption reinsurance transaction (the “Program”) between Equitable Financial Life Insurance Company of America (“EFLOA”, the “Company” or “we”) and Equitable Financial Life Insurance Company (“EFLIC”). Pursuant to the Program, certain EFLIC variable annuity contracts (each an “EFLIC Contract” and collectively, the “EFLIC Contracts”) will be exchanged for identical EFLOA variable annuity contracts (each an “EFLOA Contract” and collectively, the “EFLOA Contracts”). The exchanges are subject to contract owner consent in applicable states. Please read this Supplement carefully and retain it for future reference.
Under the Program, EFLIC and EFLOA have entered into an assumption reinsurance transaction where EFLIC will transfer its insurance obligations and risks under its contracts to EFLOA by exchanging each EFLIC Contract with an identical EFLOA Contract. EFLOA and EFLIC have received all necessary regulatory approvals for this Program. As explained in more detail below, depending on which state the EFLIC Contract was issued in, contract owners may have the option to exchange (either through an opt-in or opt-out process) the EFLIC Contract for an EFLOA Contract. The exchanges will be accomplished by issuing a Certificate of Assumption which will state that EFLOA has assumed liability for your EFLIC Contract and that all references to EFLIC in the EFLIC Contract are changed to EFLOA. The Certificate of Assumption will further state that EFLOA has assumed all rights and duties under the express terms of your EFLIC Contract and that EFLIC no longer has any obligations to you. Except for the substitution of EFLOA for EFLIC as your insurer and moving from an EFLIC separate account to an EFLOA separate account, the terms of your contract will not change because of the Program. This means, the new EFLOA Contract will be identical to your EFLIC Contract except that EFLOA will be the issuer and administrator of your EFLOA Contract. There will be no charges assessed against you if your EFLIC Contract is exchanged for an EFLOA Contract including sales charges and the exchange will be made at relative net asset value. If your EFLIC Contract is exchanged for an EFLOA Contract, it will be for the same contract class and with the same optional benefits, if any. Partial exchanges are not permitted. If your EFLIC Contract is not exchanged for an EFLOA Contract, your EFLIC Contract will continue unchanged and there will be no penalty for not exchanging.
Depending on which state your EFLIC Contract was issued in, you may have to affirmatively consent to or have the right to opt-out of the exchange. Specifically:
Please note, in a majority of states, you will not be required to take any additional steps or provide affirmative consent before your EFLIC Contract is exchanged for an EFLOA Contract.
In connection with the Program, in addition to this Supplement you are also receiving:
The letter with instructions advising what “process” applies (i.e., whether you are in an opt-in process state, opt-out process state or automatic process state), will also contain any timelines or deadlines that are applicable. Please note, exchanges under the Program may continue to occur for several years. We reserve the right to extend or terminate the Program without notice.
Important Considerations
If your EFLIC Contract is exchanged for an EFLOA Contract:
Tax Matters
There should be no adverse tax consequences to contract owners because of the Program between EFLIC and EFLOA or the exchange of an EFLIC Contract for an EFLOA Contract. Notwithstanding, we recommend that you consult your tax advisor.
More Information
If you have any questions regarding the Program, please contact your financial representative or call the customer service center at 855-433-4015. Written inquiries may be mailed to:
Equitable Financial Life Insurance Company
8501 IBM Drive, Suite 150
Charlotte, NC 28262-4333
Variable Annuity List
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Structured Investment Option
Available Under EQUI-VEST® (Series 201), EQUI-VEST® Strategies (Series 900), EQUI-VEST® Strategies (Series 901), EQUI-VEST® VantageSM (NJACTS only), EQUI-VEST® Employer-Sponsored Retirement Plans ((Series 100) (TSA and EDC contracts only)) and EQUI-VEST® Employer-Sponsored Retirement Plans ((Series 200) (TSA and EDC contracts only)) Variable Annuity ContractsII Issued by Equitable Financial Life Insurance Company of America and Equitable Financial Life Insurance Company of America
Prospectus dated May 1, 2024
Please read and keep this Prospectus for future reference. It contains important information that you should know before purchasing or taking any other action under your EQUI-VEST® variable annuity contract.policy. Also, this Prospectus must be read along with the appropriate EQUI-VEST®variable annuity contractlife insurance policy prospectus. This Prospectus is in addition to the appropriate EQUI-VEST®variable annuity contractlife insurance policy prospectus and all information in the appropriate EQUI-VEST®variable annuity contractlife insurance policy prospectus continues to apply unless addressed by this Prospectus.
What is the Structured Investment Option?Market Stabilizer Option® II?
The Structured InvestmentMarket Stabilizer Option® II (“MSO”) is an index-linked investment option available as a rider under EQUI-VEST® (Series 201), EQUI-VEST® Strategies (Series 900), EQUI-VEST® Strategies (Series 901), EQUI-VEST® VantageSM, EQUI-VEST® Employer-Sponsored Retirement Plans ((Series 100) (TSA and EDC contracts only)) and EQUI-VEST® Employer-Sponsored Retirement Plans ((Series 200) (TSA and EDC contracts only))certain variable deferred annuity contractsflexible premium universal life policies issued by Equitable Financial Life Insurance Companyof America and Equitable Financial Life Insurance Company of America (the “Company”, “we”, “our” and “us”). See “Definition of key terms” later in this Prospectus for a more detailed explanation of terms associated with the Structured Investment Option. When we use the word “contract” it also includes certificates that are issued under group contracts in some states for EQUI-VEST® Series 201 and EQUI-VEST® Employer-Sponsored Retirement Plans ((Series 100 and Series 200) (TSA and EDC contracts only)), and certificates issued to participants under EQUI-VEST® Strategies Series 900 and 901 contracts. Unless otherwise indicated, when we use EQUI-VEST®, it also includes EQUI-VEST® Strategies Series 900 and 901 and EQUI-VEST® Employer-Sponsored Retirement Plans ((Series 100 and Series 200) (TSA and EDC contracts only)). The Structured Investment Option may not currently be available in all contracts or states. Not all Segment Types are available in all contracts.
The Structured Investment OptionMSO permits you to invest in one or more Segments, each of which provides performance tied to the performance of an Index for a set period (one year).
Terms of the MSO
On the Segment Maturity Date, we will apply the Index-Linked Rate of Return to the Segment Account Value based on the Segment Buffer applicable to that Segment. All guarantees are subject toperformance of the Company’s claims paying ability. There is a risk of a substantial loss of your principalbecause you agree to absorb all losses to the extentthey exceed the protection provided by theStructuredInvestment Option at maturity. If you would like a guarantee of principal, we offer other investment options that provide such guarantees.
Index. The total amount earned on an investment in a Segment of the Structured Investment OptionMSO is only applied at Segment maturity. On
We reserve the right to discontinue the acceptance of, and/or place additional limitations on, contributions and/or transfers into any or all of the Segments comprising the Structured Investment Option. If we exercise this right, your ability to invest in your EQUI-VESTan Early Distribution.® contract, increase your account value and, consequently, increase your death benefit will be limited. However, subject to any limitations under your EQUI-VEST® contract, you could continue to invest in your contract through the other available investment options.
The terms on this page are only some of the terms associated with the Structured Investment Option. Please read this Prospectus for more details about the Structured Investment Option. Also, this Prospectus must be read along with your EQUI-VEST® contract prospectus, as well as your contract and contract rider for this option. Please refer to Definitions of key terms section of this prospectus that discusses these and other terms associated with the Structured Investment Option. Please refer to page 10 of this Prospectus for a discussion of risk factors.
The SEC has not approved or disapproved these securities or determined if this Prospectus is accurate or complete. Any representation to the contrary is a criminal offense. The contractspolicies are not insured by the FDIC or any other agency. They are not deposits or other obligations of any bank and are not bank guaranteed. They are subject to investment risks and possible loss of principal.principal and previously credited interest.
| EVM-63-22 (5/24) | Cat # 164382 (5/24) | |
| NB/IF - COIL IS (Series 162) (EFLIC only); Equitable Advantage, VUL Legacy, VUL Optimizer (EFLIC/EFLOA) | #511745 |
Please note that amounts that are removed from a Segment prior to the Segment Maturity Date will not be credited with the full extent of any positive Index performance. Even when the Index performance has been positive, any Early Distributions may cause you to lose some principal and previously credited interest. Please see “Early Distribution Adjustment” in this Prospectus.
These are only some of the terms associated with the Market Stabilizer Option® II. Please read this Prospectus for more details about the Market Stabilizer Option® II. Also, this Prospectus must be read along with the variable life insurance policy prospectus and policy rider for this option. Please refer to page 6 of this Prospectus for a Definitions section that discusses these and other terms associated with the Market Stabilizer Option® II. Please refer to page 13 of this Prospectus for a discussion of risk factors.
The Market Stabilizer Option® II is available only under certain variable life insurance policies that we offer and may not be available through your financial professional.
Other policies. We offer a variety of fixed and variable life insurance policies which offer policy features, including investment options, that are different from those offered by this Prospectus. Not every policy or feature is offered through your financial professional. You can contact us to find out more about any other insurance policy.
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Impact of MSO Election on Other Policy Riders and/or Services | 27 | |||
When we address the reader of this Prospectus with words such as “you” and “your,” we mean the person who has the right or responsibility that the Prospectus is discussing at that point. This is usually the contract owner or participant.
policy owner.
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| 6. Distribution of the policy | 29 | |
| 7. Incorporation of certain documents by reference | 30 | |
| Appendices | 31 | |
Examples of Segment Interim Values and Early Distribution Adjustments | 31 | |||||
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Equitable Financial Life Insurance Company of America is an Arizona stock life insurance corporation organized in 1969 with an administrative office located at 8501 IBM Drive, Suite 150-GR,150 - Life Operations, Charlotte, NC 28262-4333. Equitable Financial Life Insurance Company is a New York stock life insurance corporation doing business since 1859 with its home office located at 1345 Avenue of the Americas, New York, NY 10105. We are indirect wholly owned subsidiaries of Equitable Holdings, Inc.
We are licensed to sell life insurance and annuities in all 50fifty states (except Equitable Financial Life Insurance Company of America is not licensed in the state of New York), the District of Columbia, Puerto Rico and the U.S. Virgin Islands. No other company has any legal responsibility to pay amounts that the Company owes under the contracts.policies. The Company is solely responsible for paying all amounts owed to you under the contract.policy.
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Please refer to the “How to reach us” section of the appropriate variable annuity contractlife insurance policy prospectus for more information regarding contacting us and communicating your instructions. We also have specific forms that we recommend you use for electing the Structured Investment OptionMSO and any Structured Investment OptionMSO transactions.
Reports we provide:
Telephone operated program support (“TOPS”) and Equitable Client portal systems:
Equitable Client portal is designed to provide you with information through the Internet. TOPS is designed to provide you with up-to-date information via touch-tone telephone.
On Equitable Client portal you can obtain information on:
You can also:
TOPS is designed to provide you with up-to-date information via touch-tone telephone.
On TOPS you will be able to:
We reserve the right to discontinue offering TOPS at any time in the future.
We generally require that the following types of communications be on specific forms we provide for that purpose:
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We also have specific forms that we recommend you use for the following types of requests:
To cancel or change any of the following, we recommend that you provide the required written notification at least seven calendar days before the next scheduled transaction:
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Some requests may be completed online; you can use our Equitable Client portal system to contact us and to complete such requests through the Internet. In the future, we may require that certain requests be completed online.
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Account Value Business Day— Your “account value” Generally, a business day is the total of: (i) the values of your investment options under your applicable EQUI-VEST® contract outside of the Structured Investment Option, (ii) the values you have in the Segment Holding Account and (iii) your Segment Interim Values. Please refer to your EQUI-VEST® prospectus for additional information.
Business Day — Our “business day” is generally any day the New York Stock Exchange (“NYSE”) is open for regulartrading. If the New York Stock Exchange is not open for trading and generally ends at 4:00 p.m. Eastern Time (oror if the Index value is, for any other reason, not published on the Segment Start Date or a Segment Maturity Date, the value of the Index will be determined as of an earlier closethe end of regular trading). If the Securitiesmost recent preceding business day for which the Index value is published.
Cash Surrender Value— The cash surrender value is equal to your Policy Account Value minus any surrender charges that are in effect under your variable life insurance policy subject to any Early Distribution Adjustment.
Charge Reserve Amount — A minimum amount of Policy Account Value in the Guaranteed Interest Option (“GIO”) that is required to begin a new Segment on the Segment Start Date in order to approximately cover all of the estimated monthly charges for the policy including, but not limited to, the policy’s monthly cost of insurance charge, the policy’s monthly administrative charge, the policy’s monthly mortality and Exchange Commission determinesexpense charge, the existence of emergency conditions onMSO’s monthly Variable Index Segment Account Charge and any day, and consequently,monthly optional rider charges, (please see “Charges” in this Prospectus for more information) during the NYSE does not open, then that day is not a business day.Segment Term.
Company — Refers to Equitable Financial Life Insurance Company of America (“Equitable America”) or Equitable Financial Life Insurance Company.Company (“Equitable Financial”). The terms “we”, “us”, and “our” are also used to identify the issuing Company. Equitable America does not do business or issue contractspolicies in the state of New York. Generally, Equitable Financial Life Insurance Company of America will issue contractspolicies in all states except New York and Puerto Rico and Equitable Financial Life Insurance Company will issue contractspolicies in New York.York and Puerto Rico. However, if any selling agent is an Equitable Advisors financial professional who has awhose business address is in the state of New York, the issuing Company will be Equitable Financial, Life Insurance Company, even if the contractpolicy is issued in a state other than New York.
Index Dual Direction Segment— An Any Segment belonging to an Indexed Option whose name includes “Dual Direction.” If the Index used to determinePerformance Rate multiplied by the SegmentParticipation Rate exceeds the Segment’s Growth Cap Rate, then the Segment’s Index-Linked Rate of Return for a Segment. We currently offerwill be equal to the Growth Cap Rate. If the Index Performance Rate multiplied by the Participation Rate is between the Growth Cap Rate and the Segment Types based onBuffer inclusive of both, then the performanceIndex-Linked Rate of Return will be equal to the absolute value of the S&P 500 PriceIndex Performance Rate multiplied by the Participation Rate. If the Index Performance Rate multiplied by the Participation Rate is negative and below the Segment Buffer, then the Index-Linked Rate of Return will be equal to the Index Performance Rate multiplied by the Russell 2000® Price Return Index andParticipation Rate, less the MSCI EAFE Price Return Index. In the future, we may offer Segment Types based on other indices.Buffer.
Index Performance RateEarly Distribution — For A requested partial withdrawal, loan payment, surrender, deduction for monthly charges (if
amounts are not available from the variable investment options or GIO) or other distribution from a Segment, the percentage change in the value of the related Index from the Segment Start Datemade prior to the Segment Maturity Date. The Index Performance RateSuch other distributions would include any distributions from the policy that we deem necessary to continue to qualify the policy as life insurance under applicable tax law, any unpaid loan interest, or any distribution in connection with the exercise of a rider available under your policy. Payment of death benefit proceeds is not an Early Distribution.
Early Distribution Adjustment (“EDA”) (also referredto in your policy as “Segment Market Value Adjustment”) — An adjustment that we make to your Segment Account Value, in the event of an Early Distribution, through the Segment Interim Value calculation.An EDA may be positive, negative or negative.zero. An EDA that is made may cause you to lose principal and previously credited interest through the application of a fair value factor, which estimates the market value, at the time of an Early Distribution, of the financial instruments representing our obligation to provide your Segment Maturity Value on the Segment Maturity Date, and any potential loss could be substantial. The EDA may result in a reduction in your Segment Account Value and your other policy values. Therefore, you should give careful consideration before taking any early loan, partial withdrawal or surrender,or allowing the value in your other investment options to fall so low that we must make any monthly deduction from a Segment. Please see “Early Distribution Adjustment” in this Prospectus for more information.
PerformanceGrowth Cap Rate— Generally, the maximum rate of return that will be applied to a Segment Account Value. The Growth Cap Rate is set for each Segment on the Segment Start Date. While the Growth Cap Rate is set at the Company’s sole discretion, the Growth Cap Rate will not change during a Segment Term. For Standard Segments the Growth Cap Rate is the highest SegmentIndex-Linked Rate of Return that can be credited on a Segment Maturity Date. For Step Up Segments the Growth Cap Rate is the highest Index-Linked Rate of Return that can be credited on a Segment Maturity Date and the Index-Linked Rate of Return will equal the Growth Cap Rate for a Segment if the Index Performance Rate multiplied by the Participation Rate is greater than or equal to zero for that Segment. For Dual Direction Segments the Growth Cap Rate is the highest Index-Linked Rate of Return for positive Index performance. The Growth Cap Rate is not an annual rate of return.
Index— The S&P 500 Price Return Index, which is the S&P 500 Index excluding dividends. The S&P 500 Price Return Index includes 500 leading companies in leading industries in the U.S. economy.
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Index Performance Rate (also referred to in your policy as “Segment Index Performance Rate”)— The Index Performance Rate measures the percentage change in the Index during a Segment Term for each Segment. If the current index is discontinued or if the calculation of the current index is substantially changed, we reserve the right to substitute an alternative index. We also reserve the right to choose an alternative index at our discretion. Please see “Change in Index” for more information.
The Index Performance Rate is calculated by ((b) divided by (a)) minus one, where:
| (a) | is the value of the Index at the close of business on the Segment Start Date, and |
| (b) | is the value of the Index at the close of business on the Segment Maturity Date. |
We determine the value of the Index at the close of business, which is the end of a business day.
Indexed Option— Comprises all Segments subject to the same index, Index-Linked Rate of Return calculation methodology, number of years in a Segment Term, Segment Buffer, and Participation Rate. Each Indexed Option has its own corresponding MSO Holding Account.
Index-Linked Rate of Return (also referred to in your policy as ”Segment Index-Linked Rate of Return”) — The rate of return earned by a Segment as calculated on the Segment Maturity Date. The Index-Linked Rate of Return is calculated differently for different Indexed Options. Please see the chart under “Index-Linked Return” for more information.
Index-Linked Return (also referred to in your policy as “Segment Index-Linked Return”) —The amount that is applied to the Segment Account Value on the Segment Maturity Date that is equal to that Segment’s Index-Linked Rate of Return multiplied by the Segment Account Value on the Segment Maturity Date. The Index-Linked Return may be positive, negative or zero.
Initial Segment Account—The amount initially transferred to a Segment from an MSO Holding Account on its Segment Start Date.
Performance Cap Threshold Lockout Period— A minimum rate12-month period where you will not be permitted to allocate premiums, transfers (including automatic transfers), and loan repayments to the MSO. We may specifyestablish a Lockout Period on your policy if we become aware of partial withdrawal or policy loan behavior that we believe would be disruptive to our investment strategy for providing Indexed Option benefits or result in significantly increased transaction or administrative costs. In addition, we may establish a Lockout Period if we become aware of behavior that involves the subsequent allocation of those amounts as net premiums or loan repayments into other Segments within a participation requirement12-month period or other behavior that the Performance Cap Rate for a new Segment must equal or exceed in order for amountsappears to be transferred fromevading our transfer restrictions. This could occur, for example, if we see a Segmentpattern of withdrawals and subsequent reallocation to the MSO.
Any such Lockout Period would be imposed in a uniform manner on all policies meeting specific criteria which we would establish in advance.
MSO Holding Account (also referred to in your policy as “VIO Holding Account”) —An account that holds all premium and transfers, loan repayments and matured Segments allocated to an Indexed Option pending investment in a Segment. There is an MSO Holding Account into a new Segment.for each Indexed Option. The MSO Holding Accounts are part of the EQ/Money Market variable investment option.
SECNet Cash Surrender Value — Securities The net cash surrender value equals your cash surrender value, minus any outstanding loan and Exchange Commission.unpaid loan interest, minus any amount of your Policy Account Value that is “restricted” as a result of previously distributed terminal illness living benefits, and further reduced for any monthly benefit payments under the Long-Term Care ServicesSM Rider (if applicable).
Segment Participation Rate— An The Participation Rate is the percentage of the Index Performance Rate that we will use to determine the Index-Linked Rate of Return. The Participation Rate is currently 100%. The Company reserves the right to change the Participation Rate on new Indexed Options. We will always offer a Participation Rate that is at least 50%.
Policy Account Value — Your “Policy Account Value” is the total of (i) your amounts in our variable investment optionoptions, (ii) your amounts in our Guaranteed Interest Option (which excludes amounts included in (iii)), (iii) any amounts that we establish withare holding to secure policy loans that you have taken (including any interest on those amounts which has not yet been allocated to the investment options) and (iv) amounts in the MSO.
Segment—A specific Indexed Option, and for which we also specify a specific Index, Segment Duration, Segment Buffer, Segment Maturity Date and PerformanceGrowth Cap Rate.
Segment Account Value (also referred to in your policy as “Segment Account”) — The amount of an Initial Segment Account Value adjusted by any Early Distribution. The Segment Account Value is used in determining Policy Account Value, death benefits, and the net amount at risk for monthly cost of insurance calculations of the policy and the new policy face amount associated with a requested change in death benefit option, if permitted by your policy.
Segment Buffer (also referred to in your policy as “Segment Loss Absorption Threshold Rate”) — The portion of any negative Index Performance Rate that we absorbwill be absorbed and not result in a reduction in the Segment Account Value on a Segment Maturity Date
for a particular Segment. Any percentage decline in a Segment’s Index Performance Rate in excess of the Segment Buffer reduces your Segment Maturity Value. We currently offer Segment Buffers of -10% and -20%.
Segment Business Day — A business day that all indices underlying Segments available for similar investment options available under all our variable annuity contracts are scheduled to be open and to publish prices. A scheduled holiday for any one index disqualifies that day from being scheduled as a Segment Business Day for all Segments. We use Segment Business Days in this manner so that, based on published holiday schedules, we mature all Segments on the same day and start all new Segments on a subsequent day.
To obtain currently scheduled Segment Start Dates and Segment Maturity Dates, please see the following websites:
This design, among other things, facilitates the roll over of maturing Segment Investments into new Segments. It is possible that due to emergency conditions, an Index cannot provide a price on a day that was scheduled to be a Segment Business Day. If the NYSE experiences an emergency close and cannot publish any prices, we cannot mature or start any Segments.
Segment Duration — The period from the Segment Start Date to the Segment Maturity Date. We currently offer Segment Durations of one year, three years or five years.
Segment Holding Account — An account that holds all contributions and transfers allocated to the Segment Type pending investment in a Segment. The Segment Holding Account is part of the EQ/Money Market variable investment option. If we were to offer different Segment Types in the future, there would be a Segment Holding Account for each Segment Type.
Segment Interim Value (also referred to in your policy as “Segment Value”) — The value of your investment in a Segment Account Value adjusted by the Early Distribution Adjustment. We only apply the Segment Interim Value if an Early Distribution is made, which may cause you to lose principal and previously credited interest, and that loss could be substantial. We determine the Segment Interim Value prior to the Segment Maturity Date.
Date, based on the estimated current value of financial instruments representing our obligation to provide your Segment Investment — The amount transferred to a Segment on its Segment Start Date, as adjusted for any withdrawals and charges from that Segment.Maturity
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Value on the Segment Maturity Date. Our Segment Interim Value calculation methodology is on file with the insurance supervisory official of the jurisdiction in which this policy is delivered. Segment Interim Values may be greater than, less than, or equal to the corresponding Segment Account Values.
Segment Maturity Date — — The Segment Business Daydate on which a Segment ends. ThisTerm is generallycompleted and the firstIndex-Linked Return for that Segment Business Day occurring after the 13th of the same month asis applied to the Segment Start Date in the calendar year in which the Segment Duration ends.Account Value.
Segment Maturity Date RequirementValue — — You will not be invested in aThis is the Segment ifAccount Value adjusted by the Index-Linked Return for that Segment on the Segment Maturity Date. If there were one or more Early Distributions before the Segment Maturity Date, this is later than your EQUI-VEST® contract maturity date.
Segment Maturity Value — Thethe value of the remainder of your investment in a Segmentadjusted by the the Index-Linked Return on the Segment Maturity Date.
Segment Participation RequirementsStart Date — — The requirements that must be met before we transfer amounts fromSegment Start Date is the day on which a Segment Holding Account tois created.
Segment Term — The duration of a newSegment. The Segment Term for each Segment begins on aits Segment Start Date.Date and ends on its Segment Maturity Date one year later. We are currently only offering Segment Terms of approximately one year. We may offer different durations in the future.
Standard Segment— Any Segment belonging to an Indexed Option whose name includes “Standard.” For Standard Segments the Index-Linked Rate of Return — If the Index Performance Rate is positive, then the Segment Rate of Return is a rate equal to the Index Performance Rate but not more thanmultiplied by the Participation Rate, subject to the Growth Cap Rate and Segment Buffer. If the Index Performance Rate multiplied by the Participation Rate exceeds the Segment’s Growth Cap Rate, then the Segment’s Index-Linked Rate of Return will be equal to the Growth Cap Rate. If the Index Performance Rate multiplied by the Participation Rate is between zero and the Growth Cap Rate, inclusive of both, then the Segment’s Index-Linked Rate of Return will be equal to the Index Performance Rate multiplied by the Participation Rate. If the Index Performance Rate multiplied by the Participation Rate is between zero and the Segment Buffer, inclusive of both, then the Segment’s Index-Linked Rate of Return will be zero. If the Index Performance Rate multiplied by the Participation Rate is negative but declines by a percentage less than or equal toand below the Segment Buffer, then the Index-Linked Rate of Return will be equal to the Index Performance Rate multiplied by the Participation Rate, less the Segment Buffer.
Step Up Segment — Any Segment belonging to an Indexed Option whose name includes “Step Up.” For Step Up Segments the Index-Linked Rate of Return is 0%.equal to the Growth Cap Rate if the Index Performance Rate multiplied by the Participation Rate for that Segment is greater than or equal to zero on the Segment Maturity Date. If the Index Performance Rate multiplied by the Participation Rate is negative,between zero and declines by more than the Segment Buffer, then the SegmentSegment’s Index-Linked Rate of Return will be zero. If the Index Performance Rate multiplied by the Participation Rate is negative but will not reflect the first -10% or -20% of downside performance, depending onand below the Segment Buffer, applicablethen the Index-Linked Rate of Return will be equal to that Segment.
Segment Return Amount — Equals the Segment InvestmentIndex Performance Rate multiplied by the SegmentParticipation Rate, of Return.
Segment Start Date — The Segment Business Day on which a new Segment is established. This is generallyless the second Segment Business Day occurring after the 13th of each month.
Segment Type — Comprises all Segments having the same Index, Segment Duration, and Segment Buffer. Each Segment Type has a corresponding Segment Holding Account.
Structured Investment Option — An investment option that permits you to invest in various Segments, each tied to the performance of an Index, and participate in the performance of the Index.
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Structured Investment Option at a glance — key features
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The table above summarizes only certain current key features of the Structured Investment Option. The table also summarizes certain current limitations, restrictions and exceptions to those features that we have the right to impose under the Structured Investment Option and that are subject to change in the future. In some cases, other limitations, restrictions and exceptions may apply. The Structured Investment Option may not currently be available in all contracts or states.
For more detailed information, we urge you to read the contents of this Prospectus in conjunction with your EQUI-VEST® variable annuity prospectus, as well as your contract. This Prospectus is a disclosure document and describes all of the Structured Investment Option material features, benefits, rights and obligations, as well as other information. The Prospectus should be read carefully before investing. Please feel free to speak with your financial professional, or call us, if you have any questions.
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The following table describes2. Key Features of the fees and expenses that you will pay when electing and making surrenders and other distributions (including loans and charges) from the Structured Investment Option.
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Notes:
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This fee table applies specifically to the Structured Investment Option and should be read in conjunction with the fee table in your EQUI-VEST® contract prospectus.
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This section discusses risks associated with some featuresThe MSO permits you to invest in one or more Segments, each of which provides performance tied to the performance of an Index for a set period (one year). The Segments provide for participation in the performance of the Structured Investment Option. See “Definition of key terms” earlier in this Prospectus and “Description of the Structured Investment Option” later in this Prospectus for more detailed explanations of terms associated with the Structured Investment Option.
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We would attempt to choose a broad-based market index with these characteristics as a substitute index:
Depending on future circumstances, it might not be feasible to select a substitute index meeting all of the above criteria, and the Company may also use alternative or additional reasonable selection criteria in the future.
If the Index were to be discontinued or substantially changed, prior to Segment Maturity, we may mature the Segments early based on the most recently available closing value of the Index before it is discontinued or changed. We will provide notice about maturing the Segment as soon as feasible. If we do not mature the Segments early, the most recently available closing value of the Index before it is discontinued or changed would be used to calculate performance from the Segment Start Date to the Index closing date and a comparable substitute Index will be used to calculate performance from the Index closing date to the Segment Maturity Date.
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| Standard Segment | ||||
Segment Buffer | Guaranteed Minimum Growth Cap Rate | Participation Rate | ||
-10% | 5% | 100% | ||
-15% | 4.5% | 100% | ||
-20% | 4.25% | 100% | ||
| Step Up Segment | ||||
Segment Buffer | Guaranteed Minimum Growth Cap Rate | Participation Rate | ||
-10% | 4.5% | 100% | ||
| Dual Direction Segment | ||||
Segment Buffer | Guaranteed Minimum Growth Cap Rate | Participation Rate | ||
-10% | 4.5% | 100% | ||
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| MSO Charges | Guaranteed Maximum | |||||
| Variable Index Segment Account Charge | At the | 1.65% annually (0.13750% monthly)(1) | ||||
Mortality and Expense (Risk) Charge(2) | Monthly | Policy Year 1-10 11+ | Annual % of your value in the 1.00% 0.85% | |||
| Other | Charge is Deducted | Maximum Spread Percentage that May be Deducted | ||||
| Loan Interest Spread(3) for Amounts of Policy Loans Allocated to MSO Segment | On each policy anniversary (or on loan termination, if earlier) | 1% (varies by base policy) | ||||
| Other | When Charge is Deducted | Maximum Amount that May be Deducted(4) | ||||
| Early Distribution Adjustment | On Early Distribution | 90% of Segment Account Value for -10% Segment Buffer | ||||
| 85% of Segment Account Value for -15% Segment Buffer | ||||||
| 80% of Segment Account Value for -20% Segment Buffer | ||||||
| (1) | The current non-guaranteed rate is 0.40% annually (0.03333% monthly). |
| (2) | The variable life insurance policy’s mortality and expense charge will also apply to a Segment Account Value or any amounts held in an MSO Holding Account. Amounts in the MSO Holding Accounts reflect fees and expenses of the EQ/Money Market Portfolio. This is also referred to as the mortality and expense risk charge. Please see “Charges” in this Prospectus for more information. Please refer to the variable life insurance policy prospectus for more information. |
| (3) | We charge interest on policy loans but credit you with interest on the amount of the Policy Account Value we hold as collateral for the loan. The “spread” is the difference between the interest rate we charge you on a policy loan and the interest rate we credit to you on the amount of your Policy Account Value that we hold as collateral for the loan. |
| (4) | These percentage adjustment amounts represent the loss of Segment Account Value that would be produced by a hypothetical 100% decline in the Index at the time of a total distribution. The actual amount of an Early Distribution Adjustment is determined by a formula that depends on, among other things, how the Index has performed since the Segment Start Date, as discussed in the Appendix: “Examples of Segment Interim Values and Early Distribution Adjustments” in this Prospectus. |
This fee table applies specifically to the MSO and should be read in conjunction with the fee table in the variable life insurance policy prospectus.
Changes in charges
Any changes that we make in our current charges or charge rates will be on deatha basis that is equitable to all policies belonging to a given class, and will be determined based on reasonable assumptions as to expenses, mortality, investment income, lapses and policy claims associated with morbidity. For the sake of clarity, the assumptions referenced above include taxes, the cost of hedging, longevity, volatility, other market conditions, surrenders, persistency, conversions, disability, accident, illness, inability to perform activities of daily living, and cognitive impairment, if applicable. Any changes in charges may apply to then in force policies, as well as to new policies. You will be notified in writing of any changes in charges under your policy.
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There are risks associated with some features of the Market Stabilizer Option® II:
that exposes you to a risk of potentially substantial loss of principal and previously credited interest. This exposure is designed to be consistent with the treatment of losses on amounts held to the Segment Maturity Date. Even when the Index performance has been positive, the EDA may cause you to lose up to 90% of principal and previously credited interest on an early removal due to market volatility and the possibility of negative Index performance between the date of the distribution and the Segment Maturity Date. Surrender charges and tax consequences could also apply. |
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WeSubject to the approval of the insurance supervisory official of the jurisdiction in which this policy is delivered, we have the right to substitute an alternative index prior to Segment Maturity if the publication of the Index is discontinued, if the calculation of the Index is substantially changed, or at our sole discretion, if we determine that
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may earn a return that is less than the return you might have earned on those amounts in another investment option had you not invested in a Segment. |
| • | If you exercise the Long-Term Care ServicesSM Rider, when a period of coverage ends, any Segments will be terminated with an Early Distribution Adjustment and may forfeit positive Index-Linked Return that might otherwise have been credited on the Segment Maturity Date. Any remaining amounts will be allocated to the variable investment options and the GIO based on your premium allocation percentages then in effect. |
The COVID-19 pandemic has negatively impacted the U.S. and global economies. A wide variety of factors continue to impact financial and economic conditions, including, among others, volatility in the financial markets, rising inflation rates, supply chain disruptions, continued low interest rates and changes in fiscal or monetary policy. Efforts to prevent the spread of COVID-19 have affected our business directly in a number of ways, including through the temporary closures of many businesses and schools and the institution of social distancing requirements in many states and local communities. Businesses or schools that have reopened have restricted or limited access for the foreseeable future and may do so on a permanent or episodic basis. As a result, our ability to sell products through our regular channels and the demand for our products and services has been significantly impacted.
While we have implemented risk management and contingency plans with respect to the COVID-19 pandemic, such measures may not adequately protect our business from the full impacts of the pandemic. Currently, most of our employees and advisors are continuing to work remotely. Extended periods of remote work arrangements could introduce additional
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operational risk including, but not limited to, cybersecurity risks, and impair our ability to effectively manage our business. We also outsource a variety of functions to third parties whose business continuity strategies are largely outside our control.
Economic uncertainty resulting from the COVID-19 pandemic may have an adverse effect on product sales and result in existing policyholders withdrawing at greater rates. COVID-19 could have an adverse effect on our insurance business due to increased mortality and morbidity rates. The cost of reinsurance to us for these policies could increase,
and we may encounter decreased availability of such reinsurance. If policyholder lapse and surrender rates or premium waivers significantly exceed our expectations, we may need to change our assumptions, models or reserves.
Our investment portfolio has been, and may continue to be, adversely affected by the COVID-19 pandemic. Our investments in mortgages and commercial mortgage-backed securities have been, and could continue to be, negatively affected by delays or failures of borrowers to make payments of principal and interest when due. In some jurisdictions, local governments have imposed delays or moratoriums on many forms of enforcement actions. Furthermore, declines in equity markets and interest rates, reduced liquidity or a continued slowdown in the U.S. or in global economic conditions may also adversely affect the values and cash flows of investments. Market volatility also caused significant increases in credit spreads, and any continued volatility may increase our borrowing costs and decrease product fee income. Further, severe market volatility may leave us unable to react to market events in a prudent manner consistent with our historical investment practices.
The extent of the COVID-19 pandemic’s impact on us will depend on future developments that are still highly uncertain, including the severity and duration of the pandemic, actions taken by governments and other third parties in response to the pandemic and the availability and efficacy of vaccines against COVID-19 and its variants.
Cybersecurity risks and catastrophic events
We rely heavily on interconnected computer systems and digital data to conduct our variable life insurance product business. Because our variable life insurance product business is highly dependent upon the effective operation of our computer systems and those of our business partners, our business is vulnerable to disruptions from utility outages, and susceptible to operational and information security risks resulting from information systems failure (e.g., hardware and software malfunctions), and cyberattacks. These risks include, among other things, the theft, misuse, corruption and destruction of data maintained online or digitally, interference with or denial of service, attacks on websites and other operational disruption and unauthorized use or abuse of confidential customer information. Systems failures and cyberattacks, as well as, any other catastrophic event, including natural and manmade disasters, public health emergencies, pandemic diseases, terrorist attacks, floods or severe storms affecting us, any third-party administrator, the underlyingunder-
lying funds, intermediaries and other affiliated or third-party service providers may adversely affect us, our business operations and your account value. Systems failures and cyberattacks may also interfere with our processing of contractpolicy transactions, including the processing of orders from our website or with the underlying funds, impact our ability to calculate account values, cause the release and possible destruction of confidential customer or business information,
impede order processing, subject us and/or our service providers and intermediaries to regulatory fines and financial
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losses and/or cause reputational damage. In addition, the occurrence of any pandemic disease (like COVID-19), natural disaster, terrorist attack or any other event that results in our workforce, and/or employees of service providers and/or third-party administrators, being compromised and unable or unwilling to fully perform their responsibilities, could likewise result in interruptions in our service, including our ability to issue contractspolicies and process contractpolicy transactions. Even when our workforce and employees of our service providers and/or third-party administrators can work remotely, those remote work arrangements could result in our business operations being less efficient than under normal circumstances and lead to delays in our issuing contractspolicies and processing of other contract-relatedpolicy-related transactions, as well as possibly being more susceptible to cyberattacks. Cybersecurity risks and catastrophic events may also impact the issuers of securities in which the underlying funds invest, which may cause the funds underlying your contractpolicy to lose value. While there can be no assurance that we or the underlying funds or our service providers will avoid losses affecting your contractpolicy due to cyberattacks, information security breaches or other catastrophic events in the future, we take reasonable steps to mitigate these risks and secure our systems and business operations from such failures, attacks and events.
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2.5. Description of the Structured Investment OptionMSO
The Structured Investment OptionMSO consists of Segment Typesa number of Indexed Options, each of which provideprovides a rate of return tied to the performance of ana specified Index. Each month, youYou generally have the opportunity to invest in a Segment,any of the Indexed Options described below, subject to the requirements, limitations and procedures disclosed in this section. We reserve the right to add new Indexed Options. You participate in the performance of an Index by investing in the corresponding Segment. Investments in Segments are not investments in underlying mutual funds; Segments are not “index funds.” The Structured Investment Option is not available in all states. Please contact the customer service group referenced in the Prospectus or your financial professional for information on state availability. Also, see “Appendix: State contract availability and/or variations of certain features and benefits” for more information.
Segment Holding Account — an account that holds all contributions and transfers allocated to a Segment Type pending investment in a Segment. The Segment Holding Account is part of the EQ/Money Market variable investment option.
Segment Start Date — the Segment Business Day on which a new Segment is established. This is generally the second Segment Business Day occurring after the 13th of each month.
Segment Investment — the amount transferred to a Segment on its Segment Start Date, as adjusted for any withdrawals and charges from that Segment.
We currently offer seven Segment Types. We intend to offer a Segment each month, on the Segment Start Date.You can generally invest in any available Indexed Option. We are not obligated to offer any one particular Segment Type.Indexed Option. Also, we are not obligated to offer any Indexed Options. Each investment in an Indexed Option that starts on a particular Segment Type. A Segment TypeStart Date is referred to as a Segment.
An Indexed Option refers to Segmentsa Segment option that havehas the same Index, Index-Linked Rate of Return calculation methodology, Segment Duration,Term, Segment Buffer and Segment Buffer. A Segment TypeParticipation Rate. Each Indexed Option has a corresponding SegmentMSO Holding Account. Please refer to the “Definitions of key terms” section earlier in this Prospectus“Definitions” for a discussion of these terms. Not all Segment Durations are available in all states. Please see “Appendix: State contract availability and/or variations of certain features and benefits” for more information.
Segment Business Day — a business day that all indices underlying Segments available for similar investment options available under all our variable annuity contracts are scheduled to be open and to publish prices. A scheduled holiday for any one index disqualifies that day from being scheduled as a Segment Business Day for all Segments. We use Segment Business Days in this manner so that, based on published holiday schedules, we mature all Segments on the same day and start all new Segments on a subsequent day.
To obtain currently scheduled Segment Start Dates and Segment Maturity Dates, please see the following websites:
This design, among other things, facilitates the roll over of maturing Segment Investments into new Segments. It is possible that due to emergency conditions, an Index cannot provide a price on a day that was scheduled to be a Segment Business Day. If the NYSE experiences an emergency close and cannot publish any prices, we cannot mature or start any Segments.
Segment Duration — the period from the Segment Start Date to the Segment Maturity Date. We currently offer Segment Durations of one year, three years and five years.
Segment Buffer — the portion of any negative Index Performance Rate that we absorb on a Segment Maturity Date for a particular Segment. Any percentage decline in a Segment’s Index Performance Rate in excess of the Segment Buffer reduces your Segment Maturity Value. We currently offer Segment Buffers of -10% and -20%.
The following Segment Types are currently available:chart lists the current Standard Indexed Options with 100% Participation Rate:
Index | Segment | Segment | Minimum Growth Cap Rate | |||
| S&P 500 Price | 1 year | -10% | 5% | |||
| Return Index | 1 year | -15% | 4.5% | |||
| 1 year | -20% | 4.25% |
The following chart lists the current Step Up Indexed Options with 100% Participation Rate:
| Index | Segment Term | Segment Buffer | Minimum Growth Cap Rate | |||
S&P 500 Price Return Index | 1 year | -10% | 4.5% |
The following chart lists the current Dual Direction Indexed Options with 100% Participation Rate:
| Index | Segment Term | Segment Buffer | Minimum Growth Cap Rate | |||
S&P 500 Price Return Index | 1 year | -10% | 4.5% |
At maturity, the highest level of protection is the -20% Segment Buffer and the lowest level of protection is the -10% Segment Buffer.MSO Holding Accounts
The Indices are describedamount of each transfer or loan repayment you make to the MSO, and the balance of each premium payment you make to the MSO after any premium charge under your base policy has been deducted, will first be placed in more detail below, underan MSO Holding Account. Each MSO Holding Account is a portion of the heading “Indices.”regular EQ/Money Market variable investment
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Each Segment has a Performance Cap Rateoption that we set onwill hold amounts allocated to the MSO until the next available Segment Start Date. See “Performance Cap Rate” below.
For example, a Segment could be S&P 500 Price Return Index/ 1 year/-10%/September 2024 with a 20% Performance Cap Rate declared onEach MSO Holding Account has the Segment Start Date. This means that you will participate in the performance of the S&P 500 Price Return Index for one year starting from the September 2024 Segment Start Date. If the Index performs positively during this period, yoursame rate of return at maturity could be as much as 20% for that Segment Duration. If the Index performs negatively during this period, at maturity you will be protected from the first 10% of the Index’s decline. If the Index performanceand is between -10% and 0%, your Segment Return Amount at maturity will equal your Segment Investment.
Performance Cap Rate — the highest Segment Rate of Return that can be credited on a Segment Maturity Date.
Index Performance Rate — for a Segment, the percentage change in the value of the Index from the Segment Start Datesubject to the Segment Maturity Date. The Index Performance Rate may be positive or negative.
Performance Cap Threshold — the minimum rate you may specifysame underlying portfolio operating expenses and same mortality and expense risk charges as a participation requirement that the Performance Cap Rate for a new Segment must equal or exceed in order for amounts to be transferred from the Segment Holding Account into a new Segment.
Both the Performance Cap Rate and the Segment Buffer are rates of return from the Segment Start Date to the Segment Maturity Date. The performance of the Index, the Performance Cap Rate and the Segment Buffer are all measured from the Segment Start Date to the Segment Maturity Date, and the Performance Cap Rate and Segment Buffer apply if you hold the Segment until the Segment Maturity Date. If you surrender or cancel your EQUI-VEST® contract, die or make a withdrawal from a Segment before the Segment Maturity Date, the Segment Buffer will not necessarily apply to the extent it would on the Segment Maturity Date, and any upside performance will be limited to a percentage lower than the Performance Cap Rate. Please see “Your account value in the Structured Investment Option” later in this section. A partial withdrawal from a Segment does not affect the Performance Cap Rate and Segment Buffer that apply to any remaining amounts that are held in the Segment through the Segment Maturity Date.
We reserve the right to offer any or all Segment Types less frequently than monthly or to stop offering any or all of them or to suspend offering any or all of them temporarily. Please see “Suspension, termination and changes to the Segment Type and Index” later in this section. We may also add different Segment Types in the future.
You may not have more than 12 active Segments in addition to the Segment Holding Account.
Indices
Each Segment Type references an Index that determines the performance of its associated Segments. We currently offer Segment Types based on the performance of the S&P 500 Price Return Index, the Russell 2000® Price Return Index and
the MSCI EAFE Price Return Index. Throughout this Prospectus, we refer to these indices using the term “Index” or, collectively, “Indices.”
Please note that each Index is a price return index, which means that changes in the value of the Index are determined solely by changes in the price of each security included in the Index. By contrast, a total return index also includes the value of all dividends, interest, rights offerings or other distributions associated with each security included in the index. For example, the value of the S&P 500 Total Return Index incorporates dividends and other distributions by assuming that they are reinvested in the entire index.
S&P 500 Price Return Index. The S&P 500 Price Return Index was established by Standard & Poor’s. The S&P 500 Price Return Index includes 500 leading companies in leading industries of the U.S. economy, capturing 75% coverage of U.S. equities. The S&P 500 Price Return Index does not include dividends declared by any of the companies included in this Index.
Russell 2000® Price Return Index. The Russell 2000® Price Return Index was established by Russell Investments. The Russell 2000® Price Return Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000® Price Return Index is a subset of the Russell 3000® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2,000 of the smallest securities based on a combination of their market cap and current index membership. The Russell 2000® Price Return Index does not include dividends declared by any of the companies included in this Index.
MSCI EAFE Price Return Index. The MSCI EAFE Price Return Index was established by MSCI. The MSCI EAFE Price Return Index is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US and Canada. As of the date of this Prospectus the MSCI EAFE Price Return Index consisted of the following 22 developed market country indices: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom. The MSCI EAFE Price Return Index does not include dividends declared by any of the companies included in this Index.
Segment Holding Account
Any contribution or transfer designated for a Segment Type will be allocated to the Segment Holding Account until the Segment Start Date. The Segment Holding Account is part of the EQ/Money Market variable investment option. Please see “Separate Account Annual Expenses” laterrefer to “Fee Table” and “Payment of premiums and determining your policy’s value” in this Prospectusthe applicable variable life insurance policy prospectus for more information regarding non-guaranteed charge waivers insuch expenses. We currently plan on offering new Segments of each Indexed Option on a monthly basis but reserve the Segment Holding Account. You must transferright to offer them less frequently or contribute to the Segment Holding Account for the corresponding Segment Type if you wantstop offering them or to invest in a Segment; you cannot transfer or contribute directly to a Segment.suspend offering them temporarily.
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YouBefore any account value is transferred into a Segment, you can transfer amounts from the Segmentapplicable MSO Holding Account into other investment options available under your policy at any time subject to any transfer restrictions described in this Prospectus and your variable life insurance policy prospectus. You can transfer into and out of the investment options, or another SegmentMSO Holding AccountAccounts at any time up to the close of business on the last business day beforeand including the Segment Start Date provided your transfer request is received at our administrative office by such date. For example, you can transfer Policy Account Value into an MSO Holding Account on the 3rd Friday of June which is the Segment Start Date.
That Policy Account Value would transfer into the Segment starting on that date, subject to the conditions mentioned earlier. You can also transfer Policy Account Value out of an MSO Holding Account before the end of the business day on the Segment Start Date and that account value would not be swept into the Segment starting on that date. Please refer to the “How to reach us” section in your EQUI-VEST®of the variable annuity contractlife insurance policy prospectus for more information regarding contacting us and communicating your instructions. We also have specific forms that we recommend you use for electing the Structured Investment OptionMSO and any Structured Investment OptionMSO transactions.
On the Segment Start Date, account value in an MSO Holding Account, excluding any account value transferred to cover the Charge Reserve Amount, will be transferred into a Segment if all requirements and limitations are met that are discussed under “Segments” immediately below.
Each Segment will have a Segment Start Date which is generally the second Segment Business Day occurring after the 13th of the month. However,3rd Friday of each calendar month and will have a Segment Maturity Date on the 3rd Friday of the same calendar month in the succeeding calendar year.
In order for any amount to be transferred from an MSO Holding Account into a new Segment on a Segment Start Date, all of the following conditions must be met on that date:
| (1) | The Growth Cap Rate for that Segment of the applicable Indexed Option must be equal to or greater than your minimum Growth Cap Rate for that particular Indexed Option (Please see “Growth Cap Rate” in this Prospectus). |
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| (2) | There must be sufficient account value available within the GIO and the variable investment options including the MSO Holding Accounts to cover the Charge Reserve Amount as determined by us on such date (Please see “Charge Reserve Amount” in this Prospectus). |
| (3) | The Growth Cap Rate must be greater than the sum of the annual interest rate we are currently crediting on the GIO (“A”), the annualized monthly Variable Index Segment Account Charge rate (“B”) and the current annualized monthly mortality and expense risk charge rate (“C”). The Growth Cap Rate must be greater than (A+B+C). This is to ensure that the highest possible rate of return that could be received in a Segment after these charges (B+C) have been considered exceeds the interest crediting rate currently being offered in the GIO. |
| (4) | It must not be necessary, as determined by us on that date, for us to make a distribution from the policy during the Segment Term in order for the policy to continue to qualify as life insurance under applicable tax law. |
| (5) | The total amount allocated to your Segments for the applicable Indexed Option under your policy on that date must be less than any limit we may have established. At this time there is no limit. |
If there is sufficient Policy Account Value in the GIO to cover the Charge Reserve Amount, then no transfers from other investment options to the GIO will need to be made. If there is insufficient value in the GIO to cover the Charge Reserve Amount and we do not receive instructions (if permitted by your underlying policy) from you specifying the investment options from which we should transfer the account value to the GIO to meet Charge Reserve Amount requirements at the Segment Start Date, may sometimesor the transfer instructions are not possible due to insufficient funds, then the required amount will be transferred proportionately from your variable investment options including the MSO Holding Accounts.
If after any transfers there would be an insufficient amount in the GIO to cover the Charge Reserve Amount or the Growth Cap Rate for the next available Segment does not qualify per your minimum Growth Cap Rate instructions and the conditions listed above, then your amount in the applicable MSO Holding Account will remain there until we receive further instruction from you. We will mail you a later date under certain circumstances. Please see “Settingnotice informing you that your account value did or did not transfer from the Segment Maturity Date andapplicable MSO Holding Account into a Segment. These notices are mailed on or about the next business day after the applicable Segment Start Date” below.Date.
SegmentParticipation Rate of Return
IfThe Participation Rate is the percentage of the Index Performance Rate is positive, thenthat we will use to determine the Segment Index-Linked Rate of Return. The Participation Rate for each Indexed Option is currently 100%. If we offer a Participation Rate of less than 100%, then your Index-Linked Rate of Return is a rate equal to the Index Performance Rate, but not more than the Performance Cap Rate. If the Index Performance Rate is negative, but declines by a percentage less than or equal to the Segment Buffer, then the Segment Rate of Return is 0%. If the Index Performance Rate is negative, and declines by more than the Segment Buffer, then the Segment Rate of Return is negative, but will not reflect the first -10% or -20% of downside performance, depending on the Segment Buffer applicable to that Segment.be lower.
The PerformanceGrowth Cap Rate is generally the maximum Segment Raterate of Return that each Segment will be credited withreturn earned on the Segment Maturity Date. We will declare a PerformanceAccount Value. By allocating your account value to the Segments offered under the MSO, you can participate in the performance of the Index, as limited by the Participation Rate, generally up to the applicable Growth Cap Rate for each Segmentthat we declare on the Segment Start Date. The Growth Cap Rate may limit your participation in any increases in the underlying Index.
Because we declare the Performance Cap Rate for a Segment on its Segment Start Date,Please note that you will not know the PerformanceGrowth Cap Rate for a new Segment until yourafter the account value has been transferred from the corresponding Segmentapplicable MSO Holding Account into the Segment. You maySegment and you are not allowed to transfer the account value out of a Segment before the Segment Maturity Date. Please see “Transfers” below. For this reason, we permit you to specify a Performance Cap Threshold, which we describe below under “Segment Participation Requirements.” For more information regarding transfer restrictions, please see “Transfers” later on in this Prospectus and your EQUI-VEST® contract prospectus.
The PerformanceOur minimum Growth Cap Rate may limit your participation in any increase in the underlying Index associatedfor 1 year Standard Segment with a Segment.-10% buffer is 5%. Our minimum PerformanceGrowth Cap RatesRate for 1 3,year Standard Segment with a -15% buffer is 4.5%. Our minimum Growth Cap Rate for 1 year Standard Segment with a -20% buffer is 4.25%. Our minimum Growth Cap Rate for a 1 year Step Up Segment and 5-year Segments are 4%, 12%, and 20%, respectively. For more information about thea 1 year Dual Direction Segment suspension, see “Suspension, Termination and Changes to Segment Types and Indices” later in this section.is 4.5%. We guarantee that for the life of your contactpolicy we will not open a Segment with a PerformanceGrowth Cap Rate below the applicable minimum
Performance Growth Cap Rate. In some cases, we may decide not to declare a PerformanceAny increases in the Growth Cap Rate for a Segment, in which case there is no maximum Segment Rate of Return for that Segment and you will receiveabove the Index Performance Rate for that Segment subject to the Segment Buffer.
Please note that the Performance Cap Rate and Segment Rate of Returnminimum are rates of return from the Segment Start Date to the Segment Maturity Date. The Performance Cap Rate is set at ourthe Company’s sole discretion.
As part of your instructions when you’ve selected the MSO, you may specify what your minimum acceptable Growth Cap Rate is for a Segment Participation Requirements
All amounts inof each Indexed Option. If the Segment Holding Account as of the close of business on the business day preceding the Segment Start Date, plus any earnings on those amounts, will be transferred into the SegmentGrowth Cap Rate we set, on the Segment Start Date, provided that all participation requirements are met.
Amounts transferred intois below the Segment Holding Account on a Segment Start Dateminimum you specified then the account value will not be included in any new Segment created that day. These amounts will remain intransferred from the Segmentapplicable MSO Holding Account until theyinto that Segment. If you do not specify a minimum Growth Cap Rate then your minimum Growth Cap Rate will be set at the guaranteed minimum Growth Cap Rate for that Indexed Option. Therefore, if you do not specify a minimum acceptable Growth Cap Rate (permitted range of 5-10%) for one or more Indexed Options, account value could transfer into a Segment with a Growth Cap Rate that may be lower than what you would have chosen. In addition, for account value to transfer into a Segment from an MSO Holding Account, the Growth Cap Rate must be greater than the sum of the annual interest rate we are transferred out orcurrently crediting on the nextGIO (“A”), the current annualized monthly Variable Index Segment Start DateAccount Charge rate (“B”) and the current annualized monthly mortality and expense risk charge rate (“C”). The Growth Cap Rate must be greater than (A+B+C).
For example, assume that the annual interest rate we are currently crediting on which the participation requirements are met forGIO is 4.00%, the current annualized monthly Variable Index Segment Account charge rate is 0.40%, and the annualized monthly mortality and expense risk charge rate is 0.85%. Because these numbers total 5.25%, no amounts towould be transferred into any Segment unless we declare a new Segment.Growth Cap Rate that is higher than 5.25%.
If youYou may also subsequently change your Performanceminimum Growth Cap Threshold on a Segment Start Date, that Performance Cap Threshold will not affect the participation requirements for any Segment created that day. For example if you have a Performance Cap Threshold on file of 6.0%, but change it to 9.0% on a Segment Start Date, any amounts in the Segment Holding Account will be transferred into a new Segment of the Segment Type that we create that day with a Participation Cap Rate equal to or higher than 6.00%, if the other participation requirements are met. For example, a Performance Cap Rate of 7.0% would meet your Performance Cap Threshold on that Segment Start Date.
The following participation requirements must be met on a Segment Start Date in order for any amount designated for a Segment Type to be transferred from a Segment Holding Account into the designated new Segment: (1) A minimum amount of $1,000 (variations may apply) must be in the Segment Holding Account; (2) Segment is available; (3) Segment Maturity Date Requirement is met; and (4) Performance Cap Threshold is met. If these requirements are met, your account value in the Segment Holding Account will be transferred into a new Segment. This amount is your initial Segment Investment.
The following participation requirements must be met on a Segment Start Date in order for any amount designated for a Segment Type to be transferred from a Segment Holding Account into the designated new Segment: (1) minimum sweep amount is met; (2) Segment is available; (3) Segment Maturity Date Requirement is met; and (4) Performance Cap Threshold is met. If these requirements are met, your account value in the Segment Holding Account will be transferred into a new Segment. This amount is your initial Segment Investment.Rates by contacting us at our Administrative Office.
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(1) Minimum sweepSegment Buffer
The Segment Buffer is currently -10% or -15% or -20% as applicable. The Segment Buffer may vary by Indexed Option. The Segment Buffer will not change during a Segment Term.
The Segment Buffer protects you from negative Index performance up to the amount of the Segment Buffer. For example, if hypothetically the Segment Buffer is met. For Segments with a duration of greater than 1 year, the minimum amount that must-10%, then you would be protected from any decline in the Index that is equal to or less than -10%. However, you will bear the entire risk of loss of principal and previously credited interest for the portion of negative performance that exceeds 10%, which means that in this example you could lose up to 90% of principal and previously credited interest. This could happen, for example, if there was a 100% decline in the S&P 500 Price Return Index. The Segment Buffer may vary by Indexed Option. We will always offer a Segment Buffer of at least -10%.
Segment Interim Values, which reflect any Early Distribution Adjustments, will be used in determining policy value available to cover monthly deductions, any applicable proportionate surrender charges for requested face amount reductions, and other distributions; cash surrender values, maximum partial withdrawal values, and maximum loan values subject to any applicable base policy surrender charge. They will also be used in determining whether any outstanding policy loan and accrued loan interest exceeds the Policy Account Value. If the insured person dies during a Segment Term and any Segment Interim Value exceeds its corresponding Segment Account Value, the Segment Interim Value will be used in determining the death benefit, if applicable.
Near the end of the Segment Term, we will notify you between 15 and 45 days before the Segment Maturity Date that a Segment is about to mature. At that time, you may choose to have all or a part of:
(a) the Segment Maturity Value rolled over into the MSO Holding Account before it will befor the same Indexed Option; or
(b) the Segment Maturity Value transferred into a new Segment is $1,000. For 1-year Segments, the minimum amount that must be accumulated inMSO Holding Account for one or more other Indexed Options; or
(c) the Segment Holding Account before it will be swept into a 1-year Segment varies as follows:
(2) Segment is available. We may suspend or terminate any Segment Type, at our sole discretion, at any time. If we terminate a Segment Type, no new Segments of that Segment Type will be created, and the amount that would have beenMaturity Value transferred to the variable investment options available under your policy; or
(d) the Segment Maturity Value transferred to the GIO.
If we do not receive your transfer instructions before the Segment Maturity Date, your Segment Maturity Value will automatically be transferredrolled over into the MSO Holding Account of the same Indexed Option for investment in the next available Segment, subject to the conditions listed under “Segments” above.
However, if we are not offering the same Indexed Option under the MSO at that time, we will transfer the Segment
Maturity Value to the investment options available under your policy per your instructions or to the EQ/Money Market variable investment option instead. Ifif no instructions are received. Although under the variable life insurance policy we suspendreserve the right to apply a Segment Type, no new Segments of that Segment Typetransfer charge up to $25 for each transfer among your investment options, there will be created until the suspension ends, and the amount that would have been transferred to the Segment will remain in the Segment Holding Account.
(3) Segment Maturity Date Requirement is met. The Segment Maturity Date must occur on or before the contract maturity date. If the Segment Maturity Date is after the EQUI-VEST® contract maturity date, your account value in the Segment Holding Account will be transferred to the EQ/Money Market variable investment option.
(4) Performance Cap Threshold is met. When you allocate a contribution orno transfer to a Segment Type, you may specify a Performance Cap Threshold in a whole percentage rate of 6%, 7%, 8% or 9%. Your value in the Segment Holding Account will not be transferred into the corresponding Segment unless the Performance Cap Rate we declare on the Segment Start Date is equal to or higher than your Performance Cap Threshold, and the other participation requirements are met.
For example, you may specify a Performance Cap Threshold of 8.0%. If we set a Performance Cap Rate of 8.0% or highercharges for the next available Segment of that Segment Type, then we will transfer the applicable account value to the new
Segment, provided all other requirements and conditions are met. However, if we set the Performance Cap Rate at 7.9% for that Segment, the applicable account value would not be transferred to the new Segment and your account value will remain in the Segment Holding Account, until the next available Segment for which your threshold is met.
If you specify a Performance Cap Threshold, it will remain in effect until you change it.
If you do not specify a Performance Cap Threshold, then we will transfer your account value from the Segment Holding Account into a Segment, regardless of how low the Performance Cap Rate may be if the other participation requirements are met.
Once your account value has been swept from a Segment Holding Account into a Segment, transfers into or out of that Segment before its Segment Maturity Date are not permitted.
We permit you, but do not require you, to specify a Performance Cap Threshold so that you have additional flexibility in managing your contract. We do not require that you select a Performance Cap Threshold because you may wish to invest in a Segment regardlessany of the particular Performance Cap Rate. If you do not specify a threshold, you risk the possibility that the Performance Cap Rate established will have a lower cap on returns than you would otherwise find acceptable. You may wish to discuss with your financial professional whether to specify a Performance Cap Threshold and, if so, at what percentage.
You will receive confirmation of any Performance Cap Threshold you set that indicates the date on which the Performance Cap Threshold expires. You can also monitor your Performance Cap Thresholds, including their expiry dates, using Equitable Client portal.transfers discussed in this section.
Segment Maturity Date
Your Segment Maturity Date is generally the first Segment Business Day occurring after the 13th day of the same month as the Segment Start Date in the calendar year in which the Segment Duration ends. However, the Segment Maturity Date in a particular month may be a later date under certain circumstances. Please see “Setting the Segment Maturity Date and Segment Start Date” below.
You may tell us how to allocate the Segment Maturity Value among the investment options. You may tell us either to follow your allocation instructions on file for new contributions, to withdraw all or a portion of your Segment Maturity Value, or to transfer your Segment Maturity Value to the next available Segment, provided the participation requirements are met.
Segment Maturity Value — the value of your investment in a Segment on the Segment Maturity Date.
As stated above, you may elect to have maturing Segments invested according to your allocations on file. You may also elect to transfer all or a portion of your Segment Maturity Value to the next available Segment. The designated portion
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of your Segment Maturity Value will be transferred to the Segment Holding Account, as of the close of business on the Segment Maturity Date. Assuming that all participation requirements are met, the designated amounts will be treated like any other amounts in a Segment Holding Account. On the next Segment Start Date, the designated amounts in the Segment Holding Account will be transferred into the Segment. Typically, this means the designated amounts would be held in a Segment Holding Account for one business day.
If you have not provided us with maturity instructions, the Segment Maturity Value will be transferred to the Segment Holding Account. Your Segment Maturity Value would then be transferred from that Segment Holding Account into the next Segment on the Segment Start Date. If the next Segment to be created would not meet the Segment Maturity Date Requirement or the Segment Type has been terminated, we will instead transfer your Segment Maturity Value to the EQ/Money Market variable investment option. Alternatively, if you designate a Performance Cap Threshold that is not met on the next Segment Start Date or if the Segment Type has been suspended, your Segment Maturity Value will remain in the Segment Holding Account. If you are impacted by these delays, you may transfer your Segment Maturity Value out of the Segment Holding Account into any other investment options available under your EQUI-VEST® contract at any time before the next month’s Segment Start Date.
On the Segment Maturity Date, weWe calculate your Segment Maturity Value on the Segment
Maturity Date using your Segment InvestmentAccount Value and the Segment
Index-Linked Rate of Return. The Segment Rate of Return is equal to the Index Performance Rate (the percentage change in the value of the related Index from the Segment Start Date to the Segment Maturity Date), subject to the Performance Cap Rate and Segment Buffer, as follows:
Your Segment Maturity Value for all Segments is calculated as follows:
We multiply your Segment InvestmentAccount Value by your SegmentIndex-Linked Rate of Return to get your Segment Return Amount.Index-Linked Return. Your Segment Maturity Value is equal to your Segment InvestmentAccount Value plus your SegmentIndex-Linked Return. Your Index-Linked Return Amount. Your Segment Return Amount may be negative, in which case your Segment Maturity Value will be less than your Segment Account Value.
Investment. All
For Standard Segments, the Index-Linked Rate of theseReturn is equal to the Index Performance Rate, subject to the Growth Cap Rate, Participation Rate and Segment Buffer, as follows:
| Indexed Options – Standard | ||
| If the Index Performance Rate multiplied by the Participation Rate: | Then the Index-Linked Rate of Return will be: | |
| Is greater than the Growth Cap Rate for the Segment Term | Equal to the Growth Cap Rate | |
| Is greater than 0% but less than or equal to the Growth Cap Rate for the Segment Term** | Equal to the Index Performance Rate multiplied by the Participation Rate | |
| Is less than or equal to 0% but greater than or equal to the Segment Buffer for the Segment Term | Equal to 0% | |
| Is less than the Segment Buffer for the Segment Term | Equal to the Index Performance Rate multiplied by the Participation Rate, less the Segment Buffer | |
| ** | If the Index Performance Rate is zero, the Segment Index-Linked Rate of Return is zero. |
These values are based on the value of the relevant Index on the Segment Start Date and the Segment Maturity Date. Any fluctuations in the value of the Index between those dates is ignored in calculating the Segment Maturity Value.Index-Linked Rate of Return.
For Step Up Segments, the Index-Linked Rate of Return is equal to:
the Growth Cap Rate if the Index Performance Rate (the percentage change in the value of the related Index from the Segment Start Date to the Segment Maturity
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Date) multiplied by the Participation Rate is greater than or equal to zero or |
| Indexed Option – Step Up | ||
| If the Index Performance Rate multiplied by the Participation Rate: | Then the Index-Linked Rate of Return will be: | |
| Is greater than the Growth Cap Rate for the Segment Term | Equal to the Growth Cap Rate | |
| Is greater than or equal to 0% but less than or equal to the Growth Cap Rate for the Segment Term | Equal to the Growth Cap Rate | |
| Is less than 0% but greater than or equal to the Segment Buffer for the Segment Term | Equal to 0% | |
| Is less than the Segment Buffer for the Segment Term | Equal to the Index Performance Rate multiplied by the Participation Rate, less the Segment Buffer | |
These values are based on the value of the relevant Index on the Segment Start Date and the Segment Maturity Date. Any fluctuations in the value of the Index between those dates is ignored in calculating the Index-Linked Rate of Return.
Please note: Because of the way the Index-Linked Rate of Return is calculated for Step Up Segments, when the Index Performance Rate is near zero, a very small difference in the Index Performance Rate on the Segment Maturity Date can result in a very different Index-Linked Rate of Return. For example, assumeif the Growth Cap Rate is 8.00%, the Participation Rate is 100%, and the Index Performance Rate is 0.00% on the Segment Maturity Date, the Index-Linked Rate of Return would be 8.00% whereas, if the Index Performance Rate is -0.01% on the Segment Maturity Date the Index-Linked Rate of Return is 0.00%.
For Dual Direction Segments, the Index-Linked Rate of Return is equal to the Index Performance Rate multiplied by the Participation Rate subject to the Growth Cap Rate for positive and flat Index Performance Rates and the absolute value of negative Index Performance Rates multiplied by the Participation Rate unless the Index Performance Rate multiplied by the Participation Rate is less than the Segment Buffer in which case it is equal to the Index Performance Rate multiplied by the Participation Rate subject to the Segment Buffer as follows:
| Indexed Option – Dual Direction | ||
| If the Index Performance Rate multiplied by the Participation Rate: | Then the Index-Linked Rate of Return will be: | |
| Is greater than the Growth Cap Rate for the Segment Term | Equal to the Growth Cap Rate | |
| Indexed Option – Dual Direction | ||
| Is greater than or equal to 0% but less than or equal to the Growth Cap Rate for the Segment Term** | Equal to the Index Performance Rate multiplied by the Participation Rate | |
| Is less than 0% but greater than or equal to the Segment Buffer for the Segment Term | Equal to the absolute value* of the Index Performance Rate multiplied by Participation Rate | |
| Is less than the Segment Buffer for the Segment Term | Equal to the Index Performance Rate multiplied by the Participation Rate, less the Segment Buffer | |
| * | The absolute value of a number is simply that number without regard to it being positive or negative (e.g., without regard to its mathematical sign). For example, the absolute value of -3 is 3. |
| ** | If the Index Performance Rate is zero, the Segment Index-Linked Rate of Return is zero. |
Please note:
Standard Segment Examples
Assume that you have a variable life insurance policy with a Policy Account Value of $100,000 and invest $1,000 in the an
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S&P 500 Price Return Index, one year1-year Standard Segment with a -10% Segment Buffer and a Participation Rate of 95%, we set the PerformanceGrowth Cap Rate for that Segment at 7%10%, and you make no withdrawalEarly Distributions from the Segment.
If the S&P 500 Price Return Index performance rate is 10%20% higher on the Segment Maturity Date than on the Segment Start Date, you will receive a 7% Segment10% Index-Linked Rate of Return, and your Segment Maturity Value would be $1,070.$1,100.00. We reach that amount as follows:
If the S&P 500 Price Return Index is only 5% higher on the Segment Maturity Date than on the Segment Start Date, then you will receive a 5% Segment4.75% Index-Linked Rate of Return, and your Segment Maturity Value would be $1,050.$1,047.50. We reach that amount as follows:
If the S&P 500 Price Return Index is -10%5% lower on the Segment Maturity Date than on the Segment Start Date, then you will receive a 0% SegmentIndex-Linked Rate of Return, and your Segment Maturity Value would be $1,000.$1,000.00. We reach that amount as follows:
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If the S&P 500 Price Return Index is 15% lower on the Segment Maturity Date than on the Segment Start Date,
then you will receive a -20%-4.25% Index-Linked Rate of Return, and your Segment Maturity Value would be $957.50. We reach that amount as follows:
Step Up Segment Examples
Assume that you have a variable life insurance policy with a Policy Account Value of $100,000 and invest $1,000 in an S&P 500 Price Return Index 1-year Step up Segment with a -10% Segment Buffer, and a Participation Rate of 95%, we set the Growth Cap Rate for that Segment at 8%, and you make no Early Distributions from the Segment.
If the S&P 500 Price Return Index is 10% higher on the Segment Maturity Date than on the Segment Start Date, you will receive an 8% Index-Linked Rate of Return, and your Segment Maturity Value would be $1,080.00. We reach that amount as follows:
If the S&P 500 Price Return Index is flat (0% return) on the Segment Maturity Date, you will receive an 8% Index-Linked Rate of Return, and your Segment Maturity Value would be $1,080.00. We reach that amount as follows:
If the S&P 500 Price Return Index is 15% lower on the Segment Maturity Date than on the Segment Start Date, then you
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will receive a -10%-4.25% SegmentIndex-Linked Rate of Return, and your Segment Maturity Value would be $900.$957.50. We reach that amount as follows:
Setting theDual Direction Segment Maturity Date and Segment Start DateExamples
There will be a Segment Maturity Date and Segment Start Date each month. The Segment Maturity Date for Segments maturing in a given month and the Segment Start Date for new Segments starting inAssume that same month will always be scheduled to occur on the first two consecutive business days that are also Segment Business Days occurring after the 13th of a month.
Please see Appendix III later in this prospectus for a demonstration of the effects weekends and scheduled holidays can have on the Segment Maturity Date and the Segment Start Date.
Effect of an emergency close. It is possible that an exchange could experience an emergency close on a Segment Business Date, thereby affecting the Index’s ability to publish a price and our ability to mature or start a Segment based on the Index. If the New York Stock Exchange (“NYSE”), experiences an emergency close and cannot publish any prices, we will delay the maturity or start of all Segments.
An emergency closure of the NYSE canyou have a different effect if it occurs onvariable life insurance policy with a Segment Maturity Date rather than a Segment Start Date.
|
|
If the conditions that cause an emergency close persist, we will use reasonable efforts to calculate the Segment Maturity Value of $100,000 and invest $1,000 in an affectedS&P 500 Price Return Index 1-year Dual Direction Segment with a -10% Segment Buffer, and a Participation Rate of 95%, we set the Growth Cap Rate for that Segment at 9%, and you make no Early Distributions from the Segment. If the Index cannot be priced within eight days, we will contact a calculating agency, normally a bank we have a contractual relationship with, which will determine a price to reflect a reasonable estimate of the Index level.
Suspension, Termination and Changes to the Segment Type and Index
We may decide at any time until the close of business on each Segment Start Date whether to offer the Segment Type described in this Prospectus on a Segment Start Date for a particular Segment. We may suspend the Segment Type for a month or a period of several months, or we may terminate the Segment Type entirely.
If the Segment Type is suspended, your account value will remain in the Segment Holding Account until a Segment of the Segment Type is offered or you transfer out of the Segment Holding Account.
If the Segment Type is terminated, your account value in the Segment Holding Account will be defaulted into the EQ/Money Market variable investment option on the date that would have been the Segment Start Date.
We have the right to substitute an alternative index prior to the Segment Maturity Date if the publication of the Index is discontinued or at our sole discretion we determine that our use of such Index should be discontinued or if the calculation of the Index is substantially changed. In addition, we reserve the right to use any or all reasonable methods to end any outstanding Segments that use the Index. We also have the right to add additional indices at any time. We would provide notice about the use of additional or alternative indices, as soon as practicable, in a supplement to this Prospectus. If an alternative index is used, its performance could impact the Index Performance Rate, Segment Rate of Return, Segment Maturity Value and Segment Interim Value.
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An alternative index would not change the Segment Buffer or Performance Cap Rate for an existing Segment. If a similar index cannot be found, we will end the affected Segments prematurely by applying the Performance Cap Rate and Segment Buffer that were established on the applicable Segment Start Date to the actual gains or losses on the original Index as of the date of termination. We would attempt to choose a substitute index that has a similar investment objective and risk profile to the replaced index. For example, if the S&P 500 Price Return Index was not available, we might use the NASDAQ or the Russell 2000® Price Return Index.
We reserve the right to offer the Segment Type less frequently than monthly or to stop offering it or to suspend offering it temporarily. If we stop offering or suspend the Segment Type, each existing Segment of the Segment Type will remain invested until its respective Segment Maturity Date.
Your account value in the Structured Investment Option
Your value in each Segmentis 20% higher on the Segment Maturity Date is calculated as described under “Segmentthan on the Segment Start Date, you will receive a 9% Index-Linked Rate of Return” earlierReturn, and your Segment Maturity Value would be $1,090.00. We reach that amount as follows:
If the S&P 500 Price Return Index is 5% higher on the Segment Maturity Date than on the Segment Start Date, you will receive a 4.75% Index-Linked Rate of Return, and your Segment Maturity Value would be $1047.50. We reach that amount as follows:
If the S&P 500 Price Return Index is 5% lower on the Segment Maturity Date than on the Segment Start Date, then
you will receive a 4.75% Index-Linked Rate of Return, and your Segment Maturity Value would be $1047.50. We reach that amount as follows:
If the S&P 500 Price Return Index is 15% lower on the Segment Maturity Date than on the Segment Start Date,
then you will receive a -4.25% Index-Linked Rate of Return, and your Segment Maturity Value would be $957.50. We reach that amount as follows:
We calculate the Index-Linked Return for a Segment by taking the Index-Linked Rate of Return and multiplying it by the Segment Account Value on the Segment Maturity Date. The Segment Account Value is the Initial Segment Account Value net of any Early Distributions and any corresponding Early Distribution Adjustments. The Segment Account Value does not include the Charge Reserve Amount described in this Prospectus.
In setting the Performance Cap RateThe Index-Linked Return is only applied to amounts that we useremain in calculating the Segment Maturity Value, we assume that you are going to hold a Segment until the Segment Maturity Date. However,For example, a surrender of your policy before Segment maturity will eliminate any Index-Linked Return and will forfeit any positive Index-Linked Return that might otherwise have been credited on the Segment Maturity Date.
Before the Segment Maturity Date, if you surrender your policy, take a partial withdrawal or loan from a Segment or have another Early Distribution, we will apply an Early Distribution Adjustment and calculate the rightSegment Interim Value. We apply an EDA to access amounts in the Segmentsprotect ourselves from significant market losses if an owner withdraws from a Segment before the Segment Maturity Date under certain circumstances. Therefore, we calculate a Segment Interim Value on each business day, which is also a Segment Business Day, between the Segment Start Date and the Segment Maturity Date. The method we use to calculate the Segment Interim Value is different than the method we use to calculate the value of the Segment on the Segment Maturity Date. Prior to the Segment Maturity Date, we use the Segment Interim Value to calculate (1) your account value; (2) the amount your beneficiary would receive as a death benefit; (3) the amount you would receive if you make a withdrawal or a loan from a Segment; (4) the amount you would receive if you surrender your EQUI-VEST® contract; or (5) the amount you would receive if you cancel your EQUI-VEST® contract; and return it to us for a refund within your state’s “free look” period (unless your state requires that we refund the full amount of your contribution upon cancellation).
Segment Interim Value — the value of your investment in a Segment prior to the Segment Maturity Date.
The Segment Interim Value is calculated based on a formula that provides a treatment for an early distribution that is designedthe estimated current value of financial instruments representing our
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obligation to be consistent with how distributions atprovide your Segment Maturity Value on the endSegment Maturity Date. Appendix: “Examples of a Segment are treated. Appendix I later in this ProspectusInterim Values and Early Distribution Adjustments” sets forth in detail the specific calculation formula as well as numerous hypothetical examples. The formula is calculated by adding the fair value of threetwo components. These components provide us with a market value estimate of the
risk of loss and the possibility of gain at the end of a Segment. As detailed in Appendix I, theseThese components are used to calculate the Segment Interim Value. The threetwo components are:
| (1) | Fair value of hypothetical fixed |
PLUS
| (2) | Fair value of |
PLUS
|
For all contracts with issue dates before June 24, 2024 and certain other contracts subject to state and other necessary approvals (see “Appendix: Segment Interim Value — Performance Cap Rate limiting factor” for a table showing which contracts still use a Performance Cap Rate limiting factor), we then compareAn EDA may be positive, negative or zero. In the sumevent of the three components above with a limitation based on the Performance Cap Rate referred to as the Performance Cap Rate limiting factor. For these contracts, the Segment Interim Value is never greater than the Segment Investment multiplied by the portion of the Performance Cap Rate corresponding to the portion of the Segment Duration that has elapsed. This limitation is imposed to discourage owners from withdrawing from a Segment before the Segment Maturity Date where there may have been significant increases in the relevant Index early in the Segment Duration. For more information, please see Appendix I.
Evenan Early Distribution even if the Index has experienced positive investment performance since the Segment Start Date, the EDA may cause you to lose principal and previously credited interest and that loss may be substantial. That is because there is always some risk that the Index would have declined by the Segment Maturity Date such that you would suffer a loss if the Segment were continued (without taking any Early Distribution) until that time. The overall impact of the factors we take into account in the calculation above,EDA may be to reduce your Segment InterimAccount Value may be lower thanand your Segment Investment.other policy values.
Structured Investment Option’s charges and expensesImportant Considerations
Adjustments with respect to earlyWhen any partial withdrawal, surrender, loan, charge deduction or other distribution from Segments
We use the Segment Interim Value when a surrender or other distribution (including loans and charges) is taken,made from a
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Segment prior to the Segment Maturity Date. The Segment Interim Value is calculated based on a formula that provides a treatment for an early distribution that is designed to be consistent with how distributions at the end of a Segment are treated. For more information on the calculation of the Segment Interim Value, please see Appendix I.
How we deduct EQUI-VEST® contract charges from the Structured Investment Option
Electing the Structured Investment Option changes how certain charges under your EQUI-VEST® contract are allocated and administered.
Separate account annual expenses
Under the provisions of your EQUI-VEST® contract, we deduct a daily charge(s) from the net assets in each variable investment option and Segment Holding Account to compensate us for mortality and expense risks and other expenses. The Segment Holding Account is part of the EQ/Money Market variable investment option available under your EQUI-VEST® contract.
For amounts held in the Segment Holding Account, we may waive this charge(s) under certain conditions on a non-guaranteed basis. If the return on the EQ/Money Market variable investment option on any day is positive, but lower than the amount of this charge(s), then we will waive the difference between the two, so that you do not receive a negative return. If the return on the EQ/Money Market variable investment option on any day is negative, we will waive this charge(s) entirely for that day, although your account value would be reduced by the negative performance of the EQ/Money Market variable investment option itself. This waiver applies only to amounts held in the Segment Holding Account portion of the EQ/Money Market variable investment option and is not a fee waiver or performance guarantee for the underlying EQ/Money Market Portfolio. We reserve the right to change or cancel this provision at any time. For more information, please see “Charges and Expenses” in your EQUI-VEST® variable annuity prospectus.
Annual administrative charge
The annual administrative charge, if any, will be deducted pro rata from the account value in the investment options on the last business day of each contract year as described in your EQUI-VEST® contract prospectus. If there is insufficient value or no value in those options, the charge will then be deducted from the Segment Holding Account, and then pro rata from the Segments.
Enhanced death benefit charge
(for EQUI-VEST® Strategies Series 900 and 901 contracts)
The charge is deducted pro rata from the investment options as described in your EQUI-VEST® contract prospectus. If those amounts are insufficient, we will make up the required amounts from the Segment Holding Account and then pro rata from the Segments.
If your account value is insufficient to pay this charge, your certificate issued under the EQUI-VEST® Strategies contract will terminate without value and you will lose any applicable guaranteed benefits.
Under your EQUI-VEST® contract, you may at any time before the date annuity payments are to begin, transfer some or all of your account value among the investment options, subject to the following current limitations:
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Upon advance notice to you, via a client communication mailing, we may change or establish additional restrictions on transfers among the investment options, including limitations on the number, frequency, or dollar amount of transfers. We currently do not impose any transfer restrictions among the investment options. A transfer request does not change your allocation instructions on file. Please see our current transfer restrictions as discussed under “Disruptive transfer activity” section in the applicable variable annuity contract prospectus.
Please see “Allocating your contributions” in “Contract features and benefits” in your EQUI-VEST® variable annuity prospectus for more information about your role in managing your allocations.
Loans
If your employer’s plan permits loans, in addition to the loan provisions stated in your contract, should you need to fund your loan from a Segment(s), please note the following:
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How distributions, including withdrawals and loans, are taken from your account value under the Structured Investment Option
When you elect the Structured Investment Option, unless you specify otherwise, we will subtract your withdrawals and loans as follows:
You can specify a withdrawal or loan be taken from any investment option at any time. However, you can only request a withdrawal or loan be taken specifically from a Segment when there is zero value (meaning no money) in all other investment options and the Segment Holding Account.
If you have amounts in a Segment Holding Account and you make a withdrawal on a Segment Start Date, that withdrawal will occur before any transfer into the Segment and that withdrawal amount will not be transferred into the Segment created on that date.
Withdrawals or loans from a Segment prior to your Segment Maturity Date reduce the Segment Investment on a pro rata basis by the same proportion that the Segment Interim Value is reduced on the date of the withdrawal. We use the Segment Investment to determine your Segment Maturity Value.
You can request, in advance of your Segment Maturity Date, a withdrawal of your Segment Maturity Value on the Segment Maturity Date.Instead, any of these pre-Segment Maturity Date distributions will cause an EDA to be applied that could result in a reduction in your values. Surrender charges and tax consequences also could apply to Early Distributions. Therefore, you should give careful consideration before taking any such early loan, partial withdrawal or surrender, exercising a rider or allowing the value in your other investment options to fall so low that we must make any monthly deduction from a Segment.
For the reasons discussed above, the Early Distribution Adjustment to the Segment Account Value could reduce the amount you would receive when you surrender your policy prior to a Segment Maturity Date. For loans, partial withdrawals and charge deductions, the Early Distribution Adjustment may further reduce the account value remaining in the Segment Account Value and therefore decrease the Segment Maturity Value. The amount of any decrease in value could be greater than the amount of the loan, withdrawal, or charge.
Appendix: “Examples of Segment Interim Values and Early Distribution Adjustments” at the end of this Prospectus provides examples of how the Early Distribution Adjustment is calculated.
There is a current annualized percentage charge of 0.40% of any Policy Account Value allocated to each Segment and
deducted monthly. We reserve the right to changeincrease or canceldecrease the charge although it will never exceed 1.65%.
Please see “Loan Interest Spread” in the “Fee Table” in this provisionProspectus for information regarding the loan interest spread for amounts allocated to the MSO you would pay on any policy loan.
The variable life insurance policy’s mortality and expense risk charge will also be applicable to a Segment Account Value or any amounts held in the MSO Holding Accounts.
For COIL IS, we currently deduct a monthly charge at any time.an annual rate of 0.35% during the first 10 policy years, 0.15% in policy years 11 and in all policy years thereafter for mortality and expense risks. We reserve the right to increase or decrease these charges in the future, although they will never exceed 0.50% and 0.35%, respectively.
For Equitable Advantage, this charge is currently 0.40% during policy years 1-8 and 0.05% during policy years 9 and later. We reserve the right to increase or decrease this charge in the future, although it will never exceed 1.00% during policy years 1-10 and 0.50% during policy years 11 and later.
For VUL Legacy, we currently deduct a monthly charge at an annual rate of 0.50% during the first fifteen policy years, with no charge in policy year 16 and thereafter. We reserve the right to increase or decrease these charges in the future, although they will never exceed 0.85%, and to impose the charge in all policy years.
For VUL Optimizer, we currently deduct a monthly charge at an annual rate of 0.60% during the first 8 policy years, with no charge in policy year 9 and thereafter. We reserve the right to increase or decrease this charge in the future, although it will never exceed 1.00% during policy years 1–10 and 0.50% during policy years 11 and later.
Amounts in the MSO Holding Accounts reflect fees and expenses of the EQ/Money Market Portfolio, which are described in the prospectuses for the variable life insurance policy and the EQ/Money Market Portfolio. Please refer to the variable life insurance policy prospectus for more information.
An Early Distribution Adjustment will apply to your Segment Account Value, in the event of an Early Distribution, through the Segment Interim Value calculation. An EDA may be positive, negative or zero. The maximum EDA is 90% of Segment Account Value for -10% Segment Buffer, 85% of Segment Account Value for -15% Segment Buffer and 80% of Segment Account Value for -20% Segment Buffer These percentage adjustment amounts represent the loss of Segment Account Value that would be produced by a hypothetical 100% decline in the Index at the time of a total distribution. The actual amount of an Early Distribution Adjustment is determined by a formula that depends on, among other things, how the Index has performed since the Segment Start Date, as discussed in the Appendix: “Examples of Segment Interim Values and Early Distribution Adjustments” in this Prospectus.
Effect of your death on the Structured Investment OptionCharge Reserve Amount
In general, ifIf you die while your EQUI-VESTelect the Market Stabilizer Option® contract isII, you are required to have a minimum amount of Policy Account Value in force, it terminates and the applicable death benefit is paid.
Once we have received notice of your death and until the death benefit is processed, we will not make any transfers from the Segment Holding Account to a Segment. Amounts in the Segment Holding Account will be defaulted into the EQ/Money Market variable investment option on the next scheduled Segment Maturity Date. If Segments mature, the Segment Maturity Value will be transferred to the EQ/Money Market variable investment option.
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ThereGIO on the Segment Start Date to approximately cover the estimated monthly charges for the policy, (including, but not limited to, the MSO and any optional riders) for the Segment Term. This is the Charge Reserve Amount.
The Charge Reserve Amount will be determined on each Segment Start Date as an amount projected to be sufficient to cover all of the policy’s monthly deductions during the Segment Term, assuming at the time such calculation is made that no interest or investment performance is credited to or charged against the policy account and that no policy changes or additional premium payments are various circumstances, however,made. The Charge Reserve Amount on other than a Segment Start Date will be the Charge Reserve Amount determined as of the latest Segment Start Date reduced by each subsequent monthly deduction during the longest remaining Segment Term, although it will never be less than zero. This means, for example, that if you are in a Segment (Segment A) and then enter another Segment (Segment B) 6 months later, the Charge Reserve Amount would be re-calculated on the start date of Segment B. The Charge Reserve Amount would be re-calculated to cover all of the policy’s monthly deductions during the Segment Terms for both Segments A and B.
When you select the MSO, as part of your initial instructions, you will be asked to specify the investment options from which we should transfer the account value to the GIO to meet Charge Reserve Amount requirements, if necessary. No transfer restrictions apply to amounts that you wish to transfer into the GIO to meet the Charge Reserve Amount requirement. If your EQUI-VEST® contract canvalues in the variable investment options including the MSO Holding Accounts and in the GIO are insufficient to cover the Charge Reserve Amount, no new Segment will be continued under a Beneficiary continuation option (“BCO”). Forestablished. Please see “Segments” above for more information please seeregarding the “Beneficiary continuation option”Charge Reserve Amount and how amounts may be transferred to meet this requirement.
Please note that the Charge Reserve Amount may not be sufficient to cover actual monthly deductions during the Segment Term. Although the Charge Reserve Amount will be re-calculated on each Segment Start Date, and the amount already present in the GIO will be supplemented through transfers from your value in the variable investment options including the MSO Holding Accounts, if necessary to meet this requirement, actual monthly deductions could vary up or down during the Segment Term due to various factors including but not limited to requested policy changes, additional premium payments, investment performance, loans, policy partial withdrawals, and any changes we might make to current policy charges.
Please also refer to the variable life insurance policy prospectus and “How the Structured Investment Option affects the Beneficiary continuation option” below.for more information.
How the Structured Investment Option affects the Beneficiary continuation optionwe deduct policy monthly charges during a Segment Term
This feature permitsUnder your base variable life insurance policy, monthly deductions are allocated to the variable investment options and the GIO according to deduction allocation percentages specified by you or based on a designatedproportionate allocation if any of the individual investment option values are insufficient
or if your base policy does not allow you to specify deduction allocation percentages.
However, if the Market Stabilizer Option® II is elected, on the Segment Start Date, deduction allocation percentages will be changed so that 100% of monthly deductions will be taken from the Charge Reserve Amount and then any remaining value in the GIO, if the Charge Reserve Amount is depleted, during the Segment Term. In addition, if the value in the GIO is ever insufficient to cover monthly deductions during the Segment Term, the remaining deductions will be taken as follows:
| 1. | The first step will be to take the remaining portion of the deductions proportionately from the values in the variable investment options, including any value in the MSO Holding Accounts but excluding any Segment Account Values. |
| 2. | If the GIO and variable investment options, including any value in the MSO Holding Accounts, are insufficient to cover deductions in their entirety, the remaining amount will be allocated to the individual Segments proportionately, based on the current Segment Interim Values. |
| 3. | Any portion of a monthly deduction allocated to an individual Segment will generate a corresponding Early Distribution Adjustment of the Segment Account Value. |
The effect of those procedures is that account value will be taken out of a Segment to pay a monthly deduction (and an EDA therefore applied) only if there is no remaining account value in any other investment options, as listed in 1. and 2. above.
In addition, your death,variable life insurance policy will lapse if your net Policy Account Value or net cash surrender value (please refer to your variable life insurance policy prospectus for a further explanation of these terms) is not enough to pay your policy’s monthly charges when due (unless one of the available guarantees against termination is applicable). If you have amounts allocated to MSO Segments, the Segment Interim Value will be used in place of the Segment Account Value in calculating the net Policy Account Value and net cash surrender value.
These modifications will apply during any period in which a Segment exists and has not yet reached its Segment Maturity Date.
Subject to the approval of the insurance supervisory official of the jurisdiction in which this policy is delivered, we have the right to use a substitute index if the publication of the Index is discontinued, if the calculation of the Index is substantially changed, or at our sole discretion, if we determine that our use of the Index should be discontinued because hedging instruments become difficult to acquire, the cost of hedging becomes excessive, the cost of the Index license becomes excessive, and/or the Index’s characteristics have changed substantially. A change in the Index may cause lower Growth Cap Rates to be
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offered for future Segments. We would attempt to choose a broad-based market index with the characteristics described in “Key Features” above as a substitute index.
If the Index were to be discontinued or substantially changed prior to Segment Maturity, we may mature the Segments early based on the most recently available closing value of the Index before it is discontinued or changed. If we were to mature the Segment early, we would apply the full Index performance to that date subject to the full Participation Rate, Growth Cap Rate and Segment Buffer. For example, if the Index was up 12% at the time we matured the Segment and the Segment Buffer was -10%, the Participation Rate was 100% and the Growth Cap Rate was 8%, we would credit an 8% return to your Segment Account Value. If the Index was down 30% at the time we matured the Segment, we would credit a 20% negative return to your Segment Account Value.
We will provide notice about maturing the Segment early, approximately 30 days before hand if possible, otherwise as soon as feasible, and ask for instructions on where to invest your Segment Maturity Value. If we do not mature the Segments early, the original Index would be used to calculate performance from the Segment Start Date to the Index closing date and a comparable substitute Index will be used to calculate performance from the Index closing date to the Segment Maturity Date. We will notify you approximately 30 days before such substitution if possible, otherwise as soon as feasible, and ask for instructions on where to invest your Segment Maturity Value.
If we are still offering Segments of that Indexed Option at that time, you can request that the Segment Maturity Value be invested in a new Segment of the same Indexed Option with the substitute Index, in which case we will hold the Segment Maturity Value in the applicable MSO Holding Account for investment in the next available Segment subject to the same terms and conditions discussed above under “MSO Holding Accounts” and “Segments.”
In the case of any of the types of early maturities discussed above, there would be no transfer charges or EDA applied and you can allocate the Segment Maturity Value to the investment options available under your policy. Please see “Segment Maturity” in this Prospectus for more information. If we continued offering new Segments, then such a change in the Index may cause lower Growth Cap Rates to be offered. Please see “Right to Discontinue and Limit Amounts Allocated to the MSO” in this Prospectus.
You can make a transfer at any time to or from the investment options available under your policy subject to any transfer restrictions described in this prospectus and in the prospectus for your variable life policy. The Company does not impose the policy’s $25 transfer charge to transfer into and out of the MSO Holding Accounts. Any restrictions applicable to transfers between any MSO Holding Accounts and such investment options would be the same transfer
restrictions applicable to transfers between the investment options available under your policy. However, once Policy Account Value has been swept from any MSO Holding Accounts into a Segment, transfers into or out of that Segment before its Segment Maturity Date will not be permitted. In order to transfer account value to the MSO, there must be sufficient funds remaining in the Guaranteed Interest Option following the transfer to cover the Charge Reserve Amount. Please note that while a Segment is in effect, before the Segment Maturity Date, the amount available for transfers from the GIO will be limited to avoid reducing the GIO below the remaining Charge Reserve Amount.
Thus the amount available for transfers from the GIO will not be greater than any excess of the GIO over the remaining Charge Reserve Amount.
Please also refer to the variable life insurance policy prospectus for more information.
Please see the variable life insurance policy prospectus for information regarding partial withdrawal provisions.
If permitted by your variable life insurance policy, you may specify how your partial withdrawal is to be allocated among the MSO, the variable investment options, and the GIO. Any portion of a requested partial withdrawal allocated to the MSO will be redeemed from the individual Segments and the MSO Holding Accounts proportionately, based on the value of each MSO Holding Account and the current Segment Interim Values of each Segment.
If a Segment is in effect, and if you do not specify or if we cannot allocate the partial withdrawal among the MSO, the GIO (excluding the remaining amount of the Charge Reserve Amount) and the variable investment options according to your specifications, we will allocate the partial withdrawal proportionately from your values in the GIO (excluding the remaining amount of the Charge Reserve Amount) and your values in the variable investment options including the MSO Holding Accounts.
If the GIO (excluding the remaining amount of the Charge Reserve Amount), together with the variable investment options including any value in the MSO Holding Accounts, are insufficient to cover the partial withdrawal in its entirety, the remaining amount of the partial withdrawal will be allocated to the individual Segments proportionately, based on current Segment Interim Values.
Any portion of a partial withdrawal allocated to an individual Segment will generate a corresponding Early Distribution Adjustment of the Segment Account Value. Taking an Early Distribution may cause you to lose principal and previously credited interest, even if theIndex has experienced positive performance, and this loss may be substantial. The remaining Segment Account Value could be reduced by an amount greater than the amount of the withdrawal, and surrender
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charges and taxes could also apply. You should give careful consideration before taking any withdrawals.
If the GIO (excluding the remaining amount of the Charge Reserve Amount), together with the variable investment options including any value in the MSO Holding Accounts and the Segment Interim Values, are still insufficient to cover the partial withdrawal in its entirety, the remaining amount of the partial withdrawal will be allocated to the GIO and will reduce or eliminate the remaining Charge Reserve Amount.
If a partial withdrawal results in a deduction from one or more Segments, we reserve the right to establish a Lockout Period, where you will not be permitted to allocate premiums, transfers (including automatic transfers), and loan repayments to the MSO for a 12-month period. If premiums or loan repayments are made during a Lockout Period, these amounts will be allocated consistent with your investment instructions on file excluding the MSO. If this occurs, we will notify you of the date the Lockout Period begins and when it will end. See “Impact of Imposition of Lockout Period” below for more information.
Cash Surrender Value, Net Cash Surrender Value and Loan Value
If you have amounts allocated to MSO Segments, the Segment Interim Values will be used in place of the Segment Account Values in calculating the amount of any cash surrender value, net cash surrender value and maximum amount available for loans. The EDA could reduce these values, perhaps significantly. Please see Appendix: “Examples of Segment Interim Values and Early Distribution Adjustments” for more information.
For policies that use the Guideline Premium Test, a new Segment will not be established or created if we determine, when we process your election, that a distribution from the policy will be required to maintain its qualification as life insurance under federal tax law at any time during the Segment Term.
However, during a contractSegment Term if a distribution becomes necessary under the force-out rules of Section 7702 of the Internal Revenue Code, it will be deducted proportionately from the values in the GIO (excluding the Charge Reserve Amount) and in any variable investment option, including any value in the MSO Holding Accounts but excluding any Segment Account Values.
If the GIO (excluding the Charge Reserve Amount) and variable investment options, including any value in the MSO Holding Accounts, are insufficient to cover the force-out in its entirety, any remaining amount required to be forced out will be taken from the individual Segments proportionately, based on the current Segment Interim Values.
Any portion of a force-out distribution taken from an individual Segment will generate a corresponding Early Distribution Adjustment of the Segment Account Value.
If the GIO (excluding the remaining Charge Reserve Amount), together with the variable investment options including any value in the MSO Holding Accounts, and the Segment Interim Values, is still insufficient to cover the force-out in its entirety, the remaining amount of the force-out will be allocated to the GIO and reduce or eliminate any remaining Charge Reserve Amount under the GIO.
Please see the variable life insurance policy prospectus for information regarding policy loan provisions. The maximum loan interest rate that will be charged to the amounts you borrow for a policy year shall be the greater of (1) the “Published Monthly Average,” as defined below, for the calendar month that ends two months before the date of determination and (2) the guaranteed minimum interest crediting rate for the Guaranteed Interest Option plus 1% per year. “Published Monthly Average” means the Moody’s Corporate Bond Yield Average - Monthly Average Corporates published by Moody’s Investors Service, Inc., or any successor to it.
You may specify how your loan is to be allocated among the MSO, the variable investment options and the GIO, if permitted by your policy. Any portion of a requested loan allocated to the MSO will be redeemed from the individual Segments and the MSO Holding Accounts proportionately, based on the value of the MSO Holding Accounts and the current Segment Interim Values of each Segment. The loan interest spread is the difference between the interest rate we charge on the amounts borrowed and the interest rate credited on amounts held as collateral. This difference will not exceed 1%. Please see your variable insurance policy for the applicable guaranteed minimum interest rate credited on loan collateral.
If a Segment is in effect, and if you do not specify or if we cannot allocate the loan among the MSO, the GIO (excluding the remaining amount of the Charge Reserve Amount) and the variable investment options according to your specifications, we will allocate the loan proportionately from your values in the GIO (excluding the remaining amount of the Charge Reserve Amount) and your values in the variable investment options including the MSO Holding Accounts.
If the GIO (excluding the remaining amount of the Charge Reserve Amount), together with the variable investment options including any value in the MSO Holding Accounts, are insufficient to cover the loan in its entirety, the remaining amount of the loan will be allocated to the individual Segments proportionately, based on current Segment Interim Values.
Any portion of a loan or unpaid loan interest allocated to an individual Segment will generate a corresponding Early Distribution Adjustment of the Segment Account Value. The Early Distribution Amount may cause you to lose principal and previously credited interest, even if the Index has experienced positive performance, and this loss may be substantial. The remaining Segment Account Value may reflect a deduction greater than the
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amount of the loan, and taxes could also apply. You should give careful consideration before taking a loan.
If the GIO (excluding the remaining amount of the Charge Reserve Amount), together with the variable investment options including any value in the MSO Holding Accounts and the Segment Interim Values, are still insufficient to cover the loan in its entirety, the remaining amount of the loan will be allocated to the GIO and will reduce or eliminate the remaining Charge Reserve Amount.
Loan interest is due on each policy anniversary. If the interest is not paid when due, it will be added to your outstanding loan and allocated on the same basis as monthly deductions. See “How we deduct policy monthly charges during a Segment Term.”
On each policy anniversary, and at any time you repay all of the policy loan, we will allocate the interest that has been credited to the amount we are holding to secure the policy loan to the variable investment options, the MSO Holding Accounts, and the GIO in accordance with your name on itpremium allocation percentages.
Loan repayments will first be used to restore any amounts that, before being designated as loan collateral, had been in the GIO. Any portion of an additional loan repayment allocated to the MSO at the policy owner’s direction (if permitted by your policy) or according to premium allocation percentages will be transferred to the applicable MSO Holding Account to await the next available Segment Start Date and receive distributions underwill be subject to the contract, instead of receiving the death benefitsame conditions described in this Prospectus.
If a policy loan results in a single sum.deduction from one or more Segments, we reserve the right to establish a Lockout Period which is a 12-month period where you will not be permitted to allocate premiums, transfers (including automatic transfers), and loan repayments to the MSO. If you are subject to a Lockout Period, any loan repayment will be allocated consistent with your instructions on file (excluding the MSO). If this occurs, we will notify you of the date the Lockout Period begins and when it ends. See “Impact of Imposition of Lockout Period” below for more information.
Impact of Imposition of a Lockout Period
Under certain circumstances, we may establish a Lockout Period for 12 months on your policy which is a 12-month period where you will not be permitted to allocate premiums, transfers (including automatic transfers), and loan repayments to the Beneficiary continuationMSO. This could occur if we become aware of partial withdrawal or policy loan behavior that we believe would be disruptive to our investment strategy for providing Indexed Option benefits or result in significantly increased transaction or administrative costs. In addition, we could impose a Lockout Period if we become aware of behavior that involves the subsequent allocation of those amounts as net premiums or loan repayments into other Segments within a 12-month period or other behavior that appears to be evading our transfer restrictions. This could occur, for example, if we see a pattern of withdrawals and subsequent reallocation to the MSO.
If a partial withdrawal or policy loan is deducted from the MSO, we reserve the right to establish a 12-month period where allocations to the MSO will be restricted. We will only establish a Lockout Period if we believe that the partial withdrawal or policy loan is disruptive to our investment strategy for providing Indexed Option benefits or result in significantly increased transaction or administrative costs. If a Lockout Period is established (1) no portion of any net premium or loan repayment may be allocated to the MSO, (2) no amount may be transferred to the MSO at your request from your values in our GIO or any variable investment options, and (3) any automatic transfers to the MSO that you have requested will be cancelled. Any premiums or loan repayments made during a Lockout Period will be allocated consistent with your investment instructions on file excluding the MSO. The Lockout Period will begin on the date of any deduction from one or more Segments as a result of a requested policy loan or partial withdrawal (not including any deduction for unpaid accrued loan interest). When the Lockout Period ends, you will again be permitted to allocate loan repayments and net premiums to the MSO, transfer amounts to the MSO and provide new automatic transfer instructions. We will provide reasonable notice in advance if we establish a Lockout period.
If you are invested in MSO, you may also elect the Asset Rebalancing Service. However, any amounts allocated to the MSO will not be included in the rebalance transactions. The investment options available to your Asset Rebalancing Service do not include the MSO Holding Accounts or Segments. Please see the variable life insurance policy prospectus for more information.
Your right to cancel within a certain number of days
Please refer to the variable insurance policy prospectus for more information regarding your right to cancel your policy within a certain number of days and the Investment Start Date, which is the business day your investment first begins to earn a return for you. However, the policy prospectus provisions that address when amounts will be allocated to the investment options do not apply to amounts allocated to the MSO.
In those states that require us to return your premium without adjustment for investment performance within a certain number of days, we will initially put all amounts which you have allocated to the MSO into our EQ/Money Market investment option. If we have received all necessary requirements for your policy as of the day your policy is issued, on the first business day following the later of the twentieth day after your policy is issued or the Investment Start Date (30th day in most states if your policy is issued as the result of a replacement), we will reallocate those amounts to the applicable MSO Holding Account where they will remain until the next available Segment Start Date, at which time such amounts will be transferred to a new Segment of the MSO subject to meeting the conditions described in this Prospectus. However, if we have not received all necessary requirements for your policy as of the day your policy is issued, we will
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re-allocate those amounts to the MSO Holding Account for the applicable Indexed Option on the 20th day (longer if your policy is issued as the result of a replacement) following the date we receive all necessary requirements to put your policy in force at our Administrative Office. Your financial professional can provide further information on what requirements may apply to your policy.
In all other states, any amounts allocated to the MSO will first be allocated to the applicable MSO Holding Account where they will remain for 20 days (unless the policy is issued as the result of a replacement, in which case amounts in the applicable MSO Holding Account will remain there for 30 days (45 days in Pennsylvania)). Thereafter, such amounts will be transferred to a new Segment of the MSO on the next available Segment Start Date, subject to meeting the conditions described in this Prospectus.
Right to Discontinue and Limit Amounts Allocated to the MSO
We reserve the right to restrict or terminate future allocations to the Indexed Options of the MSO at any time. If this right were ever to be exercised by us, all Segments outstanding as of the effective date of the restriction would be guaranteed to continue uninterrupted until the Segment Maturity Date. As each such Segment matured, the balance would be reallocated to the GIO and/or variable investment options per your instructions, or to the EQ/Money Market investment option if you haveno instructions are received or if we cannot complete the transfer according to your instructions. We may also temporarily suspend offering Segments at any account value intime and for any reason including emergency conditions as determined by the Securities and Exchange Commission. We also reserve the right to establish a maximum amount for any single policy that can be allocated to any Indexed Option of the MSO.
Impact of MSO Election on Other Policy Riders and/or Services
Any withdrawal under a policy rider from a Segment or Segment Holding Account:
to you so there will be no amounts in the variable investment options or the MSO. In addition, MSO will no longer be available once you go on Policy Continuation or Loan Extension. |
| • | If you exercise the Long-Term Care ServicesSM Rider, when a period of coverage ends any MSO Segments will be terminated with corresponding Early Distribution Adjustments and you may forfeit positive Index-Linked Return that might otherwise have been credited on the Segment Maturity Date. Any remaining amounts will be allocated to the variable investment options and the GIO based on your premium allocation percentages then in effect. |
You may tell us how much of the accelerated payment is to be transferred from your value in each variable investment option and your value in the MSO. Units will be redeemed from each variable investment option sufficient to cover the amount of the accelerated payment that is allocated to it and transferred to the GIO.
Any portion of the payment allocated to the MSO based on your instructions will be deducted from any value in the applicable MSO Holding Accounts and the individual Segments on a pro-rata basis, based on any value in the MSO Holding Accounts and the current Segment Interim Value of each Segment, and transferred to the GIO.
Any portion of the payment allocated to an individual Segment will cause a corresponding Early Distribution Adjustment of the Segment Account Value and you may forfeit positive Index-Linked Return that might otherwise have been credited on the Segment Maturity Date. If you do not tell us how to allocate the payment, or if we cannot allocate it based on your directions, we will allocated it based on our rules then in effect. Allocation rules will be provided upon request. Such transfers will occur as of the date we receive satisfactory proof ofapprove an accelerated death any required instructions, information and forms necessary to effect the beneficiary continuation option featurebenefit payment. There will be no charge for the first beneficiary, all Segments will continue for each beneficiary.
such transfers.
Effect of your death on the MSO
If you die prior to the Segment Maturity Date, your death benefit will be paid as of your date of death. If the Segment Interim Value exceeds the Segment Account Value, your death benefit will not be subject to an Early Distribution Adjustment, unless the Early Distribution Adjustment would result in an increase in the amount of the death benefit.
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About Separate Account No. 6967
We hold assetsAmounts allocated to the Equitable Financial Life Insurance Company MSO are held in a “non-unitized” separate account we have established under the New York Insurance Law to support our obligations under the Structured Investment Option.Law. We own the assets of the separate account, as well as any favorable investment performance on those assets.
You do not participate in the performance of the assets held in this separate account. We may, subject to state law that applies, transfer all assets allocated to the separate account to our general account. These assets are also available to the insurer’s general creditors and an owner should look to the financial strength of the Company for its claims-paying ability. We guarantee all benefits relating to your value in the Structured Investment Option,MSO, regardless of whether assets supporting the Structured Investment OptionMSO are held in a separate account or our general account.
Our current plans are to invest separate account assets in fixed income obligations, including corporate bonds, mortgage backed and asset-backed securities, and government and agency issues. Futures, options and interest rate swaps may be used for hedging purposes.
Although the above generally describes our plans for investing the assets supporting our obligations under MSO, we are not obligated to invest those assets according to any particular plan except as we may be required to by state insurance laws.
Amounts allocated to the Equitable Financial Life Insurance Company of America MSO are held in a “non-unitized” separate account we have established under the Commissioner of Insurance in the State of Arizona. We own the assets of the separate account, as well as any favorable investment performance on those assets.
You do not participate in the performance of the assets held in this separate account. We may, subject to state law that applies, transfer all assets allocated to the separate account to our general account. These assets are also available to the insurer’s general creditors and an owner should look to the financial strength of the Company for its claims-paying ability. We guarantee all benefits relating to your value in the MSO, regardless of whether assets supporting the MSO are held in a separate account or our general account.
Our current plans are to invest separate account assets in fixed-income obligations, including corporate bonds, mortgage-backed and asset-backed securities, and government and agency issues. We may also invest inFutures, options and interest rate swaps. swaps may be used for hedging purposes.
Although the above generally describes our plans for investing the assets supporting our obligations under the Structured Investment Option,MSO, we are not obligated to invest those assets according to any particular plan except as we may be required to by state insurance laws.
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3.6. Distribution of the Contractspolicy
The Structured Investment OptionMSO is distributed by both Equitable Advisors and Equitable Distributors. The Distributors serve as principal underwriters of Separate Account No. FP through which the underlying variable life insurance policies are offered. The offering of the policies is intended to be continuous.
The MSO is available only available under certain annuity contract(s)the policy issued by the Company. Extensive information about the arrangements for distributing the annuity contracts,variable life insurance policy, including sales compensation, is included under “Distribution of the policy” in the appropriate annuity contractvariable life insurance policy prospectus and in the statement of additional information that relates to that prospectus under “Distribution of the contracts”, respectively.information. All of that information applies regardless of whether you choose to use the Structured Investment Option,MSO, and there is no additional plan of distribution or sales compensation with respect to the Structured Investment Option.MSO. There is also no change to the information regarding the fact that the principal underwriter(s) is an affiliate of the Company or an indirect wholly owned subsidiary of the Company.
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4.7. Incorporation of certain documents by reference
Equitable Financial Life Insurance Company’s Annual Report on Form 10-K for the period ended December 31, 2023, is considered to be part of this Prospectus because it is incorporated by reference.
and Equitable Financial Life Insurance Company of America’s Annual Report on Form 10-K for the period ended December 31, 2023 (the “Annual Report”) is considered to be part of this Prospectus because it is incorporated by reference.
The Company files reports and other information with the SEC, as required by law. You may read and copy this information at the SEC’s public reference facilities at Room 1580, 100 F Street, NE, Washington, DC 20549, or by accessing the SEC’s website at www.sec.gov. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Under the Securities Act of 1933, the Company has filed with the SEC a registration statement relating to the Structured InvestmentMarket Stabilizer Option® II (the “Registration Statement”). This Prospectus has been filed as part of the Registration Statement and does not contain all of the information set forth in the Registration Statement.
After the date of this Prospectus and before we terminate the offering of the securities under the Registration Statement, all documents or reports we file with the SEC under the Securities Exchange Act of 1934 (“Exchange Act”), will be considered to become part of this Prospectus because they are incorporated by reference.
Any statement contained in a document that is or becomes part of this Prospectus, will be considered changed or replaced for purposes of this Prospectus if a statement contained in this Prospectus changes or is replaced. Any statement that is considered to be a part of this Prospectus because of its incorporation will be considered changed or replaced for the purpose of this Prospectus if a statement contained in any other subsequently filed document that is considered to be part of this Prospectus changes or replaces that statement. After that, only the statement that is changed or replaced will be considered to be part of this Prospectus.
We file the Registration Statement and our Exchange Act documents and reports, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, electronically according to EDGAR. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding registrants that file electronically with the SEC. The address of the site is www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each person to whom this Prospectus is delivered, a copy of any or all of the documents considered to be part of this Prospectus because they are incorporated herein. In accordance with SEC rules, we will provide copies of any
exhibits specifically incorporated by reference into the text of
the Exchange Act reports (but not any other exhibits). Requests for documents should be directed to:
Equitable Financial Life Insurance Company
1345 Avenue of the Americas
New York, NY 10105
Equitable Financial Life Insurance Company of America
Life Operations
8501 IBM Drive, Suite 150
Charlotte, NC 28262-4333
Attention: Corporate Secretary
(telephone: (212) 554-1234)
Equitable Financial Life Insurance Company
1345 Avenue of the Americas
New York, New York 10105
Attention: Corporate Secretary
(telephone: (telephone: (212) 554-1234)
You can access our website at www.equitable.com.
Independent Registered Public Accounting Firm
The financial statements and financial statement schedules of Equitable Financial Life Insurance Company of America incorporated in this Prospectus by reference to the Annual Report on Form 10-K for the year ended December 31, 2023 and the consolidated financial statements and financial statement schedules of Equitable Financial Life Insurance Company incorporated in this Prospectus by reference to the Annual Report on Form 10-K for the year ended December 31, 2023 have been so incorporated in reliance on the report of ,PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
PricewaterhouseCoopers LLP provides independent audit services and certain other non-audit services to Equitable Financial Life Insurance Company as permitted by the applicable SEC independence rules, and as disclosed in Equitable Financial Life Insurance Company’s Form 10-K. PricewaterhouseCoopers LLP’s address is 300 Madison Avenue, New York, New York 10017.
The financial statements and financial statement schedules of Equitable Financial Life Insurance Company of America incorporated in this Prospectus by reference to the Annual Report on Form 10-K for the year ended December 31, 2023 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
PricewaterhouseCoopers LLP provides independent audit services and certain other non-audit services to Equitable Financial Life Insurance Company of America as permitted by the applicable SEC independence rules, and as disclosed in Equitable Financial Life Insurance Company of America’s Form 10-K. PricewaterhouseCoopers LLP’s address is 300 Madison Avenue, New York, New York 10017.
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Appendix I:Appendix: Examples of Segment Interim ValueValues and Early Distribution Adjustments
We calculate the Segment Interim Value for each Segment on each business day, which is also a Segment Business Day that falls between the Segment Start Date and Segment Maturity Date. The Segment Interim Value reflects any Early Distribution Adjustments. We only apply the Segment Interim Value if an Early Distribution is made, which may cause you to lose principal and previously credited interest, and that loss could be substantial. The calculation is based on a formula designed to measure the fair value of your Segment InvestmentAccount Value on the particular interim date, and is based on the downside protection provided by the Segment Buffer, the limit on participation in investment gain provided by the PerformanceGrowth Cap Rate and anthe Participation Rate, and any adjustment for the effect of a withdrawal or loanan Early Distribution prior to the Segment Maturity Date. The formula we use in part, derives the fairestimated current value of hypothetical investments in fixed instruments and derivatives (put and call options).derivatives. These values provide us with protection from the risk that we will have to pay out account value related to a Segment prior to the Segment Maturity Date. The hypothetical put option provides us with a market value of the potential loss at Segment Maturity, and the hypothetical call options provide us with a market value of the potential gain at Segment Maturity. This formula provides a treatment for an early distribution that is designed to be consistent with how distributions at the end of a Segment are treated. We mayare not required to hold such investments in relation to Segments but areand may or may not requiredchoose to do so. You have no interest inare not affected by the performance of any of our investments (or lack thereof) relating to Segments. The formula also includes an adjustment relating to the Cap Calculation Factor. This is a positive adjustment of the percentage of the estimated expenses corresponding to the portion of the Segment Duration that has not elapsed. Appendix I sets forth the actual calculation formula, an overview of the purposes and impacts of the calculation, and detailed descriptions of the specific inputs into the calculation.calculation for the Indexed Options we currently offer, as well as examples of calculations of Segment Interim Values under various hypothetical situations. You should note that even if a correspondingthe Index has experienced positive growth, the calculation of your Segment Interim Value may result in an amount lower than your Segment Investment because of other market conditions, such as the volatility of index prices and interest rates. Finally, Appendix I includes examples of calculations of Segment Interim Values under various hypothetical situations.Account Value.
Calculation Formula
For contracts issued on or after June 24, 2024, subject to state and other necessary approvals (see “Performance Cap Rate limiting factor” in this Appendix for a table showing which contracts still use a Performance Cap Rate limiting factor), theYour Segment Interim Value calculation will no longer use a Performance Cap Rate limiting factor and, therefore, the Segment Interim Value is equal toequals the sum of the following threetwo components: (1) Fair Value of Hypothetical Fixed Instruments; plus (2) Fair Value of Hypothetical Derivatives; plus (3) Cap Calculation Factor. For all other contracts, the Segment Interim Value is equal to the lesser of (A) or (B).
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| (1) | Fair Value of |
| (2) | Fair Value of |
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Overview of the Purposes and Impacts of the Calculation
Fair Value ofHypothetical Fixed Instruments.The Segment Interim Value formula includes an element designed to compensate us for the fact that when we have to pay out account value related to a Segment before the Segment Maturity Date, we forgo the opportunity to earn interest on the Segment InvestmentAccount Value from the date of withdrawal or surrenderany Early Distribution until the Segment Maturity Date. We accomplish this estimate by calculating the present value of the Segment Investment using a risk-free swap interest rate widely usedAccount Value as described in derivative markets.
Fairthe “Fair Value of Hypothetical Fixed Instruments” in “Detailed Descriptions of Specific Inputs to the Calculation” below.
Fair Valueof Hypothetical Derivatives.We For Standard Segments we use hypothetical put and call options that are designated for each Segment to estimate the market value, at the time the Segment Interim Value is calculated, of the risk of loss and the possibility of gain at the end of the Segment. This calculation reflectsFor Step Up Segments, we similarly use a hypothetical put and binary call option to estimate the market value, at the time the Segment Interim Value is calculated, of the risk of loss and the possibility of gain at the end of the Segment. For Dual Direction Segments, we similarly use hypothetical put, call and binary put options to estimate the market value, at the time the Segment Interim Value is calculated, of the risk of loss and the possibility of gain at the end of the Segment. These calculations reflect the downside protection that would be provided at maturity by the Segment Buffer as well as the upper limit that would be placed on gainspotential upside payout at maturity due tolimited by the PerformanceGrowth Cap Rate and Participation Rate.
When valuing the hypothetical Derivatives as part of the Segment Interim Value calculation, we use inputs that are consistent with market prices that reflect ourthe estimated cost of exiting the Hypothetical Derivativeshypothetical derivatives before Segment Maturity.maturity. See the “Fair Value of Hypothetical Derivatives” in “Detailed Descriptions of Specific Inputs to the Calculation”. Different inputs that reflect a higher estimated cost of exiting the hypothetical derivatives may be used for Segments in contracts that do not use a Performance Cap Rate limiting factor and, if they are, the fair value of hypothetical derivatives will be lower than if lower estimated costs of exiting were used. This means that the Segment Interim Value will also be lower.Calculation.” Our fair market value methodology, including the market standard model we use to calculate the fair value of the Hypothetical Derivativeshypothetical derivatives for each particular Segment, may result in a fair value that is higher or lower than the fair value other methodologies and models would produce. Our fair value
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may also be higher or lower than the actual market price of the identical derivatives. As a result, the Segment Interim Value you receive may be higher or lower than what other methodologies and models would produce. Please note that based on market conditions and other factors, including Segment Duration, the estimated cost of exiting hypothetical derivatives will likely vary between Segment Options, as well as, between individual
Standard Segments both with the same Segment Start Date and with different Segment Start Dates. We periodically reevaluate our estimated exit costs and our underlying estimated exit costs methodology based on a number of factors, including past experience, and may prospectively adjust the estimated cost of exiting hypothetical derivatives up or down.
At the time the Segment Interim Value is determined, the Fair Value of Hypothetical Derivatives for Standard Segments is calculated using the three different hypothetical options. These hypothetical options are designated for each Standard Segment and are described in more detail later in this Appendix.
At-the-Money Call Option (strike price equals the index value at Segment inception). TheFor Standard Segments, the potential for gain is estimated using the value of this hypothetical option.
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Out-of-the-Money Call Option (strike price equals the index value at Segment inception increased by the PerformanceGrowth Cap Rate established at Segment inception)divided by the Participation Rate). The potential for gain in excess of the PerformanceGrowth Cap Rate is estimated using the value of this hypothetical option.
Out-of-the-Money Put Option (strike price equals the index value at Segment inception decreased by the Segment Buffer)Buffer divided by the Participation Rate). The risk of loss is estimated using the value of this hypothetical option.
Cap Calculation Factor. In setting the Performance Cap Rate, we take into account that we incur expenses in connection with a contract, including insurance and administrative expenses. The Segment Interim Value formula includes item (3) above, the Cap Calculation Factor, which is designed to reflect the fact that we will not incur those expenses for the entire duration of the Segment if you withdraw your investment prior to the Segment Maturity Date. Therefore, the Cap Calculation Factor is always positive and declines during the course of the Segment.Step Up Segments
Performance Cap Rate limiting factor. For contracts issued on or after June 24, 2024, subject to state and other necessary approvals (see “Appendix: State contract availability and/or variations of certain features and benefits” showing which contracts still use a Performance Cap Rate limiting factor),At the Segment Interim Value calculation will no longer use a Performance Cap Rate limiting factor. For contracts that do use a Performance Cap Rate limiting factor,time the Segment Interim Value is never greater thandetermined, the estimated current value of Hypothetical Derivatives for Step Up Segments is calculated using two different hypothetical options. These hypothetical options are designated for each Step Up Segment and are described in more detail in this Appendix.
At-the-Money Binary Call Option (strike price equals the index value at Segment inception). For Step Up Segments, the potential gain is estimated using the value of this hypothetical option.
Out-of-the-Money Put Option (strike price equals the index value at Segment inception decreased by the Segment Investment multipliedBuffer divided by (1 + the PerformanceParticipation Rate). The risk of loss is estimated using the value of this hypothetical option.
Dual Direction Segments
At the time the Segment Interim Value is determined, the Fair Value of Hypothetical Derivatives for Dual Direction Segments is calculated using several different hypothetical options. These hypothetical options are designated for each Dual Direction Segment and are described in more detail below.
At-the-Money Put Option (strike price equals the index value at Segment inception): For Dual Direction Segments, the potential for gain in a down market is estimated using the value of this hypothetical option.
At-the-Money Call Option (strike price equals the index value at Segment inception). For Dual Direction Segments, the potential for gain in an up market is estimated using the value of this hypothetical option.
Out-of-the-Money Call Option (strike price equals the index value at Segment inception increased by the Growth Cap Rate limiting factor)divided by the Participation Rate). Generally,The risk of loss is estimated using the Performance Cap Rate limiting factor is based onvalue of this hypothetical option.
Out-of-the-Money Binary Put Option (strike price equals the index value at Segment before the Segment Maturity Date where there may have been significant increases in the relevant Index early in the Segment Duration. Although the Performance Cap Rate limiting factor pro-rates the upside potential on amounts withdrawn early, there is no similar adjustment to pro-rate the downside protection. This means, if you surrender or cancel your contract, die or make a withdrawal or take a loan from a Segment before the Segment Maturity Date,inception decreased by the Segment Buffer will not necessarily apply todivided by the extent it would onParticipation Rate). The risk of loss in a down market in excess of the Segment Maturity Date, and any upside performance will be limited to a percentage lower thanBuffer is estimated using the Performance Cap Rate, which may resultvalue of this hypothetical option.
Out-of-the-Money Put Option (strike price equals the index value at Segment inception decreased by the Segment Buffer divided by the Participation Rate). Dual Direction Segments use two of these options. For Dual Direction Segments, the risk of loss is estimated using the value of this hypothetical option.
It is important to note that the Out-of-the-Money put option value and binary put option value will almost always reduce the Segment Interim Value.Value, even where the Index is higher at the time of the Early Distribution
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Detailed Descriptions of Specific Inputs to the Calculation
(A)(1) Fair Valueof Hypothetical Fixed Instruments.The Fair Value of Hypothetical Fixed Instruments in a Segment is based on the swap rate associated with the Segment’s remaining time to maturity. Swap rates are the risk-free interest rates widely used
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in derivative markets. There is no standard quote for swap rates. However, because of their high liquidity and popularity, swap rate quotes from different dealers generally fall within a close range, the differences among which are not meaningful. Swap rates can be obtained from inter-dealer systems or financial data vendors who have feeds from swap dealers. For example, “Bloomberg Composite” swap rates are the weighted average of swap rates provided by a number of dealers to Bloomberg. Individual dealers and brokers also publish swap rates of their own on Bloomberg or Reuters. We may, in the future, utilize exchange traded swaps that become available. These exchange traded swaps would have a standard quote associated with them. The Fair Value of Hypothetical Fixed Instruments is defined as its present value, as expressed in the following formula:
(Segment Investment) (Segment Account Value)/(1 + swap rate)(time to maturity)
The time to maturity is expressed as a fraction, in which the numerator is the number of days remaining in the Segment DurationTerm and the denominator is the average number of days in each year of the Segment DurationTerm for that Segment.
(A)(2) The investment rate, denoted “rate” in the formula above, will seek to approximate the bond yields considered appropriate for this product.
The Fair Value of Hypothetical Derivatives.Fixed Instruments will be updated for changes in this investment rate on a daily basis throughout the Segment Term.
To illustrate this, consider the hypothetical examples of Segment Interim Values shown later in this Appendix. The Fair Value of Hypothetical Fixed Instruments per $1,000 of Initial Segment Account Value three months after the Segment Start Date is shown in these examples as $991.44. This hypothetical value is calculated based on the above formula and a hypothetical investment rate on that day of 1.1524% per annum, as follows:
time to maturity = (number of days remaining in the Segment Term)/(number of days in the Segment Term)=(360 – 90)/360=0.75, where for simplicity we are assuming a 360-day year for this example Fair Value of Hypothetical Fixed Instruments = $1,000/1.011524.75 = $991.44.
One day later, if the investment rate were still equal to 1.1524% per annum, the Fair Value of Hypothetical Fixed Instruments per $1,000 of Initial Segment Account Value would be recalculated as follows:
time to maturity = (number of days remaining in the Segment Term)/(number of days in the Segment Term)=(360 – 91)/360=0.74722.
Fair Value of Hypothetical Fixed Instruments = $1,000/1.011524.74722 = $991.47.
However, if rather than remaining constant at 1.1524% one day later, the investment rate increased by 0.25% to 1.1524% + 0.25% = 1.4024%, the Fair Value of Hypothetical Fixed Instruments per $1,000 of Initial Segment Account Value would be recalculated as follows:
Fair Value of Hypothetical Fixed Instruments = $1,000/1.014024.74722 = $989.65.
On the other hand, if rather than remaining constant at 1.1524% one day later, the investment rate decreased by 0.25% to 0.9024%%, the Fair Value of Hypothetical Fixed Instruments per $1,000 of Initial Segment Account Value would be recalculated as follows:
Fair Value of Hypothetical Fixed Instruments = $1,000/1.009024.74722 = $993.31.
(2) Fair Valueof Hypothetical Derivatives. We utilize a fair market value methodology to determine the Fair Value of Hypothetical Derivatives.
For each Standard Segment, we designate and value three hypothetical options, each of which is tied to the performance of the Index underlying the Segment in which you are invested:invested. For Standard Segments, these are: (1) the At-the-Money Call Option, (2) the Out-of-the-Money Call Option and (3) the Out-of-the-Money Put Option. At Segment Maturity,maturity, the Put Option is designed to value the loss below the buffer,Segment Buffer, while the call options are designed to provide gains up to the PerformanceGrowth Cap Rate. These options are described in more detail below.
InFor each Dual Direction Segment, we designate and value several hypothetical options, each of which is tied to the performance of the Index underlying the Segment in which you are invested. For Dual Direction Segments, these are: (1) the At-the-Money Call Option, (2) Out-of-the-Money Call Option, (3) At-the-Money Put Option, (4) two Out-of-the-Money Put Options and (5) Out-of-the-Money Binary Put Option. At Segment maturity, these hypothetical options are designated to value gains up to the Growth Cap Rate in an up market and down to the Segment Buffer in a down market, as well as, value losses below the Segment Buffer.
For each Step Up Segment, we designate and value two hypothetical options, each of which is tied to the performance of the Index underlying the Segment in which you are invested. For Step Up Segments, these are: (1) the At-the-Money Binary Call Option and (2) the Out-of-the-Money Put Option. At Segment maturity, the binary call option is designed to provide gains equal to the Growth Cap Rate while the put option on an index,is designed to value the seller will pay the buyer, at the maturity of the option, the difference between the strike price — which was set at issue — and the underlying index closing price, in the event that the closing price isloss below the strike price. In a call option on an index, the seller will pay the buyer, at the maturity of the option, the difference between the underlying index closing price and the strike price, in the event that the closing price is above the strike price. Generally, a put option has an inverse relationship with its underlying Index, while a call option has a direct relationship. Segment Buffer.
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In addition to the inputs discussed above, the Fair Value of Hypothetical Derivatives is also affected by the time remaining until the Segment Maturity Date. More information about the three designated hypothetical options is set forth below:
For Standard Segments, the estimated current value of Derivatives is equal to (1) minus (2) minus (4), as defined below.
For Dual Direction Segments, the estimated current value of Derivatives is equal to (1) minus (2) plus (3) minus (4) minus (5), as defined below.
| (1) | At-the-Money Call Option: This is an option to buy a position in the relevant Index equal to the Segment |
| (2) | Out-of-the-Money Call Option: This is an option to buy a position in the relevant Index equal to the Segment |
| (3) |
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| (4) | Out-of-the-Money Put Option (Dual Direction Segments use two of these options): This is an option to sell a position in the relevant Index equal to the Segment Account Value on the scheduled Segment Maturity Date, at the price of the Index on the Segment Start Date decreased by a percentage equal to the Segment Buffer. At any time during the Segment |
| (5) | Out-of-the-Money Binary Put Option: This is a requirement to pay the absolute value of the Segment Buffer multiplied by the Segment Account Value on the scheduled Segment Maturity Date, if the index price is lower than the index price on the Segment Start Date decreased by a percentage equal to the Segment Buffer. At any time during the Segment Term, the fair value of the Out-of-the-Money Binary Put Option represents the market value of the potential to receive the absolute value of the Segment Buffer multiplied by the Segment Account Value on the Segment Maturity Date. |
For Step Up Segments, the estimated current value of Derivatives is equal to (1) minus (2), as defined below.
| (1) | At-the-Money Binary Call Option: This is an option to receive the Growth Cap Rate on the scheduled Segment Maturity Date, if the index price is at or higher than the index price on the Segment Start Date. At any time during the Segment Term, the fair value of the At-the-Money Binary Call Option represents the market value of the potential to receive the Growth Cap Rate on the Segment Maturity Date, multiplied by the Segment Account Value. |
| (2) | Out-of-the-Money Put Option: This is an option to sell a position in the relevant Index equal to the Segment Account Value on the scheduled Segment Maturity Date, at the price of the Index on the Segment Start Date decreased by a percentage equal to the Segment Buffer. At any time during the Segment Term, the fair value of the Out-of-the-Money Put Option represents the market value of the potential to receive an amount equal to the excess of the negative return of the Index between the Segment Start Date and the Segment Maturity Date beyond the Segment Buffer, multiplied by the Segment Account Value. The value of this option reduces the Segment Interim |
The Fair Value of Hypothetical Derivatives is equal to (1) minus (2) minus (3), as defined above.
We determine the fair value of each of the threeapplicable designated hypothetical options for a Standard Segment, Step Up Segment or Dual Direction Segment using a market standard model for valuing a European option on the Index, assuming a continuous dividend yield or net convenience value, with inputs that are consistent with market prices that reflect the estimated cost of exiting the Hypotheticalhypothetical Derivatives prior to Segment Maturity.maturity (e.g., the estimated ask price). If we did not take into account ourthe estimated exit price, your Segment Interim Value would be greater. For Segments in contracts without a Performance Cap Rate limiting factor, we may use different inputs that reflect a higher estimated cost of exiting Hypothetical Derivatives and, the fair value of Hypothetical Derivatives will be lower for those Segments than if we didn’t use a higher estimated cost of exiting. In addition, the estimated fair value price used in the Segment Interim Value calculation may vary higher
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or lower from other estimated prices and from what the actual selling price of identical derivatives would be at any time during each Segment. If our estimated fair value price is lower than the price under
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other fair market estimates or for actual transactions, then your Segment Interim Value will be less than if we used those other prices when calculating your Segment Interim Value. Any variance between our estimated fair value price and other estimated or actual prices may be different from Segment TypeIndexed Option to Segment TypeIndexed Option and may also change from day to day. Each hypothetical option has a notional value on the Segment Start Date equal to the Segment InvestmentAccount Value on that date. The notional value is the price of the underlying Index at the inception of the contract.Segment. In the event that a number of options, or a fractional number of options, was purchased,are being valued, the notional value would be the number of hypothetical options multiplied by the price of the Index at inception.
For Securities Indices, weWe use the following model inputs:
| (1) | Implied Volatility of the Index — This input varies with (i) how much time remains until the Segment Maturity Date of the Segment, which is determined by using an expiration date for the designated option that corresponds to that time remaining and (ii) the relationship between the strike price of that option and the level of the Index at the time of the calculation. |
This relationship is referred to as the “moneyness” of the option described above, and is calculated as the ratio of current price to the strike price. Direct market data for these inputs for any given early distribution This relationship is referred to as the “moneyness” of the option described above, and is calculated as the ratio of current price to the strike price. Direct market data for these inputs for any given Early Distribution are generally not available, because options on the Index that actually trade in the market have specific maturity dates and moneyness values that are unlikely to correspond precisely to the Segment Maturity Date and moneyness of the designated option that we use for purposes of the calculation.
Accordingly, we use the following method to estimate the implied volatility of the Index. We use daily quotes of implied volatility from independent third-party financial institutionsthird-parties using the same Black Scholes model described above and based on the market prices for certain options. Specifically, implied volatility quotes are obtained for options with the closest maturities above and below the actual time remaining in the Segment at the time of the calculation and, for each maturity, for those options having the closest moneyness value above and below the actual moneyness of the designated option, given the level of the Index at the time of the calculation. In calculating the Segment Interim Value, we will derive a volatility input for your Segment’s time to maturity and strike price by linearly interpolating between the implied volatility quotes that are based on the actual adjacent maturities and moneyness values described above, as follows:
| (a) | We first determine the implied volatility of an option that has the same moneyness as the designated option but with the closest available time to maturity shorter than your Segment’s remaining time to maturity. This volatility is derived by linearly interpolating between the implied volatilities of options having the times to the applicable maturity that are above and below the moneyness value of the hypothetical option. |
| (b) | We then determine the implied volatility of an option that has the same moneyness as the designated option but with the closest available time to maturity longer than your Segment’s remaining time to the applicable maturity. This volatility is derived by linearly interpolating between the implied volatilities of options having the times to maturity that are above and below the moneyness value of the designated option. |
| (c) | The volatility input for your Segment’s time to maturity will then be determined by linearly interpolating between the volatilities derived in steps (a) and (b). |
| (2) | Swap Rate — We use key derivative swap rates obtained from information provided by independent |
| (3) | Index Dividend Yield — On a daily basis, we use the projected annual dividend yield across the entire Index obtained from information provided by independent third-party financial institutions. This value is a widely used assumption and is readily available from recognized financial reporting vendors. |
For Commodities Indices, we use the first two inputs listed above (Implied Volatility of the Index and Swap Rate), but for the third input, instead of using the Index Dividend Yield, we use the Net Convenience Value. This approach is based on standard option pricing methodology, which recognizes that commodities do not pay dividends. Instead, Net Convenience Value represents the market’s valuation of the yield of two offsetting factors: (1) the fact that the option does not give the holder the benefit of the ability to use the commodity itself (much like a security option does not give the holder the right to receive dividends); and (2) the fact that the holder is not burdened with the obligation to store the commodity.
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Generally, a put option has an inverse relationship with its underlying Index, while a call option has a direct relationship. In addition to the inputs discussed above, the Fair Value of Derivatives is also affected by the time to the Segment Maturity Date.
(A)(3) Cap Calculation Factor. 35In setting
The following hypothetical examples show the Performance Cap Rate, we take into account that we incur expenses in connection with a contract, including insurance and administrative expenses. In particular, if there were no such expenses, the Performance Cap Rate might have been greater. In setting the Performance Rate Cap, we currently estimate annual expenses at approximately 1.80%impact of the Segment Investment. This calculation includes not only expenses, but an element of profit as well. We may use a lower estimate, which would provide a higher Performance Cap Rate, all other factors being equal. We reserve the right to use a higher estimate in the future, but we would do so only after revising this Appendix to provide notice of the higher estimate. If you withdraw your investment prior to the Segment Maturity Date, we will not incur expenses for the entire duration of the Segment. Therefore, if you withdraw your investment prior to the Segment Maturity Date, we provide a positive adjustment as part of the calculation of Segment Interim Value, which we call the Cap Calculation Factor. The Cap Calculation Factor represents a return of estimated expenses for the portion of the Segment Duration that has not elapsed. For example, if the estimated expenses for a one year Segment are calculated by us to be $10, then at the end of 146 days (with 219 days remaining in the Segment), the Cap Calculation Factor would be $6, because $10 x 219/365 (60%) = $6. The Cap Calculation Factor is not used at the time we calculate your Segment Maturity Value. Instead, for any Segment held to its Segment Maturity Date, the values are provided by the contractual guarantees based on Index performance as adjusted by the Performance Cap Rate and the Segment Buffer. A Segment is not a variable investment option with an underlying portfolio, and therefore the percentages we use in setting the performance caps do not reflect a daily charge against assets held on your behalf in a separate account.
(B) Performance Cap Ratelimiting factor. As discussed above, not all contracts use a Performance Cap Rate limiting factor. For those that do, the Performance Cap Rate limiting factor is generally equal to the pro rata portion of the Performance Cap Rate as described herein. In setting the Performance Cap Rate, we assume that you are going to hold the Segment for the entire Segment Duration. If you hold a Segment until its Segment Maturity Date, the Segment Return will be calculated subject to the Performance Cap Rate. Prior to the Segment Maturity Date, your Segment Interim Value will be limited by the portion of the Performance Cap Rate corresponding to the portion of the Segment Duration that has elapsed. For example, if the Performance Cap Rate for a one-year Segment is 10%, then at the end of 146 days, the Pro Rata Share of the Performance Cap Rate would be 4%, because 10% x 146/365 = 4%; as a result, the Segment Interim Value at the end of the 146 days could not exceed 104% of the Segment Investment.calculation.
Examples
On the following pages are hypothetical examples of how the Segment Interim Value would be calculated for three different Segments. On the first page,– Standard Segments 1, 2 and 3 all have the same Index and Segment Start Date, but have different Segment Durations. The Segments are each shown on the same date, approximately 81⁄2 months after the Segment Start Date. On the second page, Segments 2 and 3 are valued again, but this time on later dates, with approximately 31⁄2 months remaining until their respective Segment Maturity Dates. On the third page, Segments 1, 2 and 3 all have the same Index and Segment Start Date, but have different Segment Durations. The Segments are each shown making a partial withdrawal on the same date, approximately 81⁄2 months after the Segment Start Date.
I-5
Example of Segment Interim Value
| Item | 1-Year Segment | 3-Year Segment | 5-Year Segment | |||
Segment Duration (in months) | 12 | 36 | 60 | |||
Valuation Date (Months since Segment Start Date) | 8.5 | 8.5 | 8.5 | |||
Segment Investment | $1,000 | $1,000 | $1,000 | |||
Segment Buffer | -10% | -20% | -20% | |||
Performance Cap Rate | 11% | 19% | 45% | |||
Time to Maturity | ||||||
(in months) | 3.5 | 27.5 | 51.5 | |||
(in years) | 0.288 | 2.290 | 4.290 | |||
| Assumptions | 1-Year Segment | 1-Year Segment | ||
Segment Term (in months) | 12 | 12 | ||
Valuation Date (months since Segment Start Date) | 3 | 9 | ||
Initial Segment Account Value | $1,000 | $1,000 | ||
Segment Buffer | -10% | -10% | ||
Participation Rate | 100% | 100% | ||
Growth Cap Rate | 15% | 15% | ||
Time to Maturity (in months) | 9 | 3 |
Assuming the change in the Index Value is -40% (for example from 100.00 to 60.00)
Fair Value of Hypothetical Fixed Instrument | 999.24 | 971.31 | 905.58 | |||
Fair Value of Hypothetical Derivatives | (303.20) | (224.50) | (207.39) | |||
Cap Calculation Factor | 5.19 | 41.22 | 77.23 | |||
Sum of Above | 701.23 | 788.03 | 775.41 | |||
Segment Investment Multiplied by prorated Performance Cap Rate | 1,078.27 | 1,044.98 | 1,063.86 | |||
Segment Interim Value | 701.23 | 788.03 | 775.41 |
Fair Value of Hypothetical Fixed Instrument | $991.44 | $997.14 | ||
Fair Value of Hypothetical Derivatives | ($302.21) | ($300.44) | ||
Segment Interim Value (sum of above) | $689.23 | $969.70 |
Assuming the change in the Index Value is -10% (for example from 100.00 to 90.00)
Fair Value of Hypothetical Fixed Instrument | 999.24 | 971.31 | 905.58 | |||
Fair Value of Hypothetical Derivatives | (37.47) | (38.30) | (19.42) | |||
Cap Calculation Factor | 5.19 | 41.22 | 77.23 | |||
Sum of Above | 966.97 | 974.22 | 963.38 | |||
Segment Investment Multiplied by prorated Performance Cap Rate | 1,078.27 | 1,044.98 | 1,063.86 | |||
Segment Interim Value | 966.97 | 974.22 | 963.38 |
Fair Value of Hypothetical Fixed Instrument | $991.44 | $997.14 | ||
Fair Value of Hypothetical Derivatives | ($48.98) | ($34.79) | ||
Segment Interim Value (sum of above) | $942.46 | $962.35 |
Assuming the change in the Index Value is 0%10% (for example from 100.00 to 100.00)110.00)
Fair Value of Hypothetical Fixed Instrument | 999.24 | 971.31 | 905.58 | |||
Fair Value of Hypothetical Derivatives | 18.79 | 5.30 | 31.79 | |||
Cap Calculation Factor | 5.19 | 41.22 | 77.23 | |||
Sum of Above | 1,023.22 | 1,017.83 | 1,014.60 | |||
Segment Investment Multiplied by prorated Performance Cap Rate | 1,078.27 | 1,044.98 | 1,063.86 | |||
Segment Interim Value | 1,023.22 | 1,017.83 | 1,014.60 |
Fair Value of Hypothetical Fixed Instrument | $991.44 | $997.14 | ||
Fair Value of Hypothetical Derivatives | $73.17 | $89.73 | ||
Segment Interim Value (sum of above) | $1,064.62 | $1,086.87 |
Assuming the change in the Index Value is +10% (for example from 100.00 to 110.00)
Fair Value of Hypothetical Fixed Instrument | 999.24 | 971.31 | 905.58 | |||
Fair Value of Hypothetical Derivatives | 61.19 | 41.44 | 77.81 | |||
Cap Calculation Factor | 5.19 | 41.22 | 77.23 | |||
Sum of Above | 1,065.63 | 1,053.96 | 1,060.62 | |||
Segment Investment Multiplied by prorated Performance Cap Rate | 1,078.27 | 1,044.98 | 1,063.86 | |||
Segment Interim Value | 1,065.63 | 1,044.98 | 1,060.62 |
Assuming the change in the Index Value is +40%40% (for example from 100.00 to 140.00)
Fair Value of Hypothetical Fixed Instrument | 999.24 | 971.31 | 905.58 | |||
Fair Value of Hypothetical Derivatives | 107.43 | 114.66 | 187.87 | |||
Cap Calculation Factor | 5.19 | 41.22 | 77.23 | |||
Sum of Above | 1,111.87 | 1,127.19 | 1,170.68 | |||
Segment Investment Multiplied by prorated Performance Cap Rate | 1,078.27 | 1,044.98 | 1,063.86 | |||
Segment Interim Value | 1,078.27 | 1,044.98 | 1,063.86 |
Fair Value of Hypothetical Fixed Instrument | $991.44 | $997.14 | ||
Fair Value of Hypothetical Derivatives | $144.11 | $149.73 | ||
Segment Interim Value (sum of above) | $1,135.55 | $1,146.87 |
The input values to the Black Scholesmarket standard model that have been utilized to generate the hypothetical examples above are as follows:
Implied |
| 2. | Annualized swap rate is assumed to be 0.09% for |
|
Index dividend |
|
I-6
Example of Segment Interim Value – Step Up Segments
| Item | 3-Year Segment | 5-Year Segment | ||
Segment Duration (in months) | 36 | 60 | ||
Valuation Date (Months since Segment Start Date) | 32.5 | 56.5 | ||
Segment Investment | $1,000 | $1,000 | ||
Segment Buffer | -20% | -20% | ||
Performance Cap Rate | 19% | 45% | ||
Time to Maturity | ||||
(in months) | 3.5 | 3.5 | ||
(in years) | 0.288 | 0.288 | ||
| Assumptions | 1-Year Segment | 1-Year Segment | ||
Segment Term (in months) | 12 | 12 | ||
Valuation Date (months since Segment Start Date) | 3 | 9 | ||
Initial Segment Account Value | $1,000 | $1,000 | ||
Segment Buffer | -10% | -10% | ||
Participation Rate | 100% | 100% | ||
Growth Cap Rate | 12.5% | 12.5% | ||
Time to Maturity (in months) | 9 | 3 |
Assuming the change in the Index Value is -40%-10% (for example from 100.00 to 60.00)90.00)
Fair Value of Hypothetical Fixed Instrument | 999.25 | 999.25 | ||
Fair Value of Hypothetical Derivatives | (203.82) | (204.55) | ||
Cap Calculation Factor | 5.18 | 5.18 | ||
Sum of Above | 800.61 | 799.88 | ||
Segment Investment Multiplied by prorated | ||||
Performance Cap Rate | 1,171.76 | 1,424.11 | ||
Segment Interim Value | 800.61 | 799.88 |
Fair Value of Hypothetical Fixed Instrument | $991.44 | $997.14 | ||
Fair Value of Hypothetical Derivatives | ($41.52) | ($24.78) | ||
Segment Interim Value (sum of above) | $949.92 | $972.36 |
36
Assuming the change in the Index Value is 10% (for example from 100.00 to 110.00)
Fair Value of Hypothetical Fixed Instrument | $991.44 | $997.14 | ||
Fair Value of Hypothetical Derivatives | $69.27 | $100.94 | ||
Segment Interim Value (sum of above) | $1,060.71 | $1,098.08 |
The input values to the market standard model that have been utilized to generate the hypothetical examples above are as follows:
| 1. | Implied volatilities are assumed to be 22.5% for out-of-the-money put options and 19.5% for at-the-money binary call options. |
| 2. | Annualized swap rate is assumed to be 0.09% for all options. |
| 3. | Skewness is assumed to be 0% for binary options. |
| 4. | Index dividend yield is assumed to be 0.42% for all options. |
Segment Interim Value – Dual Direction Segments
| Assumptions | 1-Year Segment | 1 Year Segment | ||
Segment Term (in months) | 12 | 12 | ||
Value Date (months since Segment Start Date) | 3 | 9 | ||
Initial Segment Account Value | $1,000 | $1,000 | ||
Segment Buffer | -10% | -10% | ||
Participation Rate | 100% | 100% | ||
Growth Cap Rate | 8.00% | 8.00% | ||
Time to Maturity (in months) | 9 | 3 |
Assuming the change in the Index Value is -10%-15% (for example from 100.00 to 90.00)85.00)
Fair Value of Hypothetical Fixed Instrument | 999.25 | 999.25 | ||
Fair Value of Hypothetical Derivatives | 0.46 | 0.23 | ||
Cap Calculation Factor | 5.18 | 5.18 | ||
Sum of Above | 1,004.89 | 1,004.66 | ||
Segment Investment Multiplied by prorated | ||||
Performance Cap Rate | 1,171.76 | 1,424.11 | ||
Segment Interim Value | 1,004.89 | 1,004.66 |
Fair Value of Hypothetical Fixed Instrument | $991.44 | $997.14 | ||
Fair Value of Hypothetical Derivatives | ($74.21) | ($54.72) | ||
Segment Interim Value (sum of above) | $917.24 | $942.42 |
Assuming the change in the Index Value is +10%-5% (for example from 100.00 to 110.00)95.00)
Fair Value of Hypothetical Fixed Instrument | 999.25 | 999.25 | ||
Fair Value of Hypothetical Derivatives | 89.97 | 110.25 | ||
Cap Calculation Factor | 5.18 | 5.18 | ||
Sum of Above | 1,094.40 | 1,114.68 | ||
Segment Investment Multiplied by prorated | ||||
Performance Cap Rate | 1,171.76 | 1,424.11 | ||
Segment Interim Value | 1,094.40 | 1,114.68 |
Fair Value of Hypothetical Fixed Instrument | $991.44 | $997.14 | ||
Fair Value of Hypothetical Derivatives | ($6.25) | $15.22 | ||
Segment Interim Value (sum of above) | $985.19 | $1,012.36 |
Assuming the change in the Index Value is +40%10% (for example from 100.00 to 140.00)110.00)
Fair Value of Hypothetical Fixed Instrument | 999.25 | 999.25 | ||
Fair Value of Hypothetical Derivatives | 181.03 | 345.32 | ||
Cap Calculation Factor | 5.18 | 5.18 | ||
Sum of Above | 1,185.46 | 1,349.75 | ||
Segment Investment Multiplied by prorated | ||||
Performance Cap Rate | 1,171.76 | 1,424.11 | ||
Segment Interim Value | 1,171.76 | 1,349.75 |
Fair Value of Hypothetical Fixed Instrument | $991.44 | $997.14 | ||
Fair Value of Hypothetical Derivatives | $57.09 | $70.47 | ||
Segment Interim Value (sum of above) | $1,048.53 | $1,067.61 |
The input values to the market standard model that have been utilized to generate the hypothetical examples above are as follows:
| 1. | Implied volatilities are assumed to be 22.5% for out-of-the-money put options, 19% for at-the-money call options, and 16% for out-of-the-money call options, 24% for at-the-money put options, and 22% for out-of-the-money put options. |
| 2. | Annualized swap rate is assumed to be 0.09% for all options. |
| 3. | Skewness is assumed to be 0% for binary options. |
| 4. | Index dividend yield is assumed to be 0.42% for all options. |
I-737
ExampleThe following examples show the impact of Partial Withdrawala partial withdrawal.
| Item | 1-Year Segment | 3-Year Segment | 5-Year Segment | |||
Segment Duration (in months) | 12 | 36 | 60 | |||
Valuation Date (Months since Segment Start Date | 8.5 | 8.5 | 8.5 | |||
Segment Investment | $1,000 | $1,000 | $1,000 | |||
Segment Buffer | -10% | -20% | -20% | |||
Performance Cap Rate | 11% | 19% | 45% | |||
Time to Maturity | ||||||
(in month) | 3.5 | 27.5 | 51.5 | |||
(in year) | 0.288 | 2.290 | 4.290 | |||
Amount Withdrawn | $100 | $100 | $100 | |||
Effect of Early Distributions on Segment Interim Value – Standard Segments
| Assumptions | 1-Year Segment | |||
Segment Term (in months) | 12 | |||
Valuation Date (months since Segment Start Date) | 9 | |||
Initial Segment Account Value | $1,000 | |||
Segment Buffer | -10% | |||
Participation Rate | 100% | |||
Growth Cap Rate | 15% | |||
Time to Maturity (in months) | 3 | |||
Amount Withdrawn | $100 |
Assuming the change in the Index Value is -40% (for example from 100.00 to 60.00)
Segment Interim Value | 701.23 | 788.03 | 775.41 | |||||||||
Percent Withdrawn | 14.26% | 12.69% | 12.90% | |||||||||
New Segment Investment | $857.39 | $873.10 | $871.04 | |||||||||
New Segment Interim Value | $601.23 | $688.03 | $675.41 |
Segment Interim Value(1) | $696.70 | |||
Percent Withdrawn(2) | 14.35% | |||
New Segment Account Value(3) | $856.47 | |||
New Segment Interim Value(4) | $596.70 | |||
Early Distribution Adjustment(5) | $43.53 |
Assuming the change in the Index Value is -10% (for example from 100.00 to 90.00)
Segment Interim Value | 966.97 | 974.22 | 963.38 | |||
Percent Withdrawn | 10.34% | 10.26% | 9.43% | |||
New Segment Investment | $896.58 | $897.35 | $905.72 | |||
New Segment Interim Value | $866.97 | $874.22 | $960.62 |
Segment Interim Value(1) | $962.35 | |||
Percent Withdrawn(2) | 10.39% | |||
New Segment Account Value(3) | $896.09 | |||
New Segment Interim Value(4) | $862.35 | |||
Early Distribution Adjustment(5) | $3.91 |
Assuming the change in the Index Value is +10%10% (for example from 100.00 to 110.00)
Segment Interim Value | 1,065.63 | 1,044.98 | 1,060.62 | |||
Percent Withdrawn | 9.38% | 9.57% | 9.43% | |||
New Segment Investment | $906.16 | $904.30 | $905.72 | |||
New Segment Interim Value | $965.63 | $944.98 | $960.62 |
Segment Interim Value(1) | $1,086.87 | |||
Percent Withdrawn(2) | 9.20% | |||
New Segment Account Value(3) | $907.99 | |||
New Segment Interim Value(4) | $986.87 | |||
Early Distribution Adjustment(5) | ($7.99) |
Assuming the change in the Index Value is +40%40% (for example from 100.00 to 140.00)
Segment Interim Value | 1,078.27 | 1,044.98 | 1,063.86 | |||
Percent Withdrawn | 9.27% | 9.57% | 9.40% | |||
New Segment Investment | $907.26 | $904.30 | $906.00 | |||
New Segment Interim Value | $978.27 | $944.98 | $963.86 |
Segment Interim Value(1) | $1,146.87 | |||
Percent Withdrawn(2) | 8.72% | |||
New Segment Account Value(3) | $912.81 | |||
New Segment Interim Value(4) | $1,046.87 | |||
Early Distribution Adjustment(5) | ($12.81) |
Definitions:Effect of Early Distributions on Segment Interim Value – Step Up Segments
| Assumptions | 1-Year Segment | |||
Segment Term (in months) | 12 | |||
Valuation Date (months since Segment Start Date) | 9 | |||
Initial Segment Account Value | $1,000 | |||
Segment Buffer | -10% | |||
Participation Rate | 100% | |||
Growth Cap Rate | 12.5% | |||
Time to Maturity (in months) | 3 | |||
Amount Withdrawn | $100 |
Assuming the change in the Index Value is -10% (for example from 100.00 to 90.00)
Segment Interim Value(1) | $972.36 | |||
Percent Withdrawn(2) | 10.28% | |||
New Segment Account Value(3) | $897.16 | |||
New Segment Interim Value(4) | $872.36 | |||
Early Distribution Adjustment(5) | $2.84 |
38
Assuming the change in the Index Value is 10% (for example from 100.00 to 110.00)
Segment Interim Value(1) | $1,098.08 | |||
Percent Withdrawn(2) | 9.11% | |||
New Segment Account Value(3) | $908.93 | |||
New Segment Interim Value(4) | $998.08 | |||
Early Distribution Adjustment(5) | ($8.93) |
Effect of Early Distributions on Segment Interim Value – Dual Direction Segments
| Assumptions | 1-Year Segment | 1 Year Segment | ||
Segment Term (in months) | 12 | 12 | ||
Valuation Date (months since Segment Start Date) | 3 | 9 | ||
Initial Segment Account Value | $1,000 | $1,000 | ||
Segment Buffer | -10% | -10% | ||
Participation Rate | 100% | 100% | ||
Growth Cap Rate | 8.00% | 8.00% | ||
Time to Maturity (in months) | 9 | 3 | ||
Amount Withdrawn | $100 | $100 |
Assuming the change in the Index Value is -15% (for example from 100.00 to 85.00)
Segment Interim Value(1) | $917.24 | $942.42 | ||
Percent Withdrawn(2) | 10.90% | 10.61% | ||
New Segment Account Value(3) | $890.98 | $893.89 | ||
New Segment Interim Value(4) | $817.24 | $842.42 | ||
Early Distribution Adjustment(5) | $9.02 | $6.11 |
Assuming the change in the Index Value is -5% (for example from 100.00 to 95.00)
Segment Interim Value(1) | $985.19 | $1,012.36 | ||
Percent Withdrawn(2) | 10.15% | 9.88% | ||
New Segment Account Value(3) | $898.50 | $901.22 | ||
New Segment Interim Value(4) | $885.19 | $912.36 | ||
Early Distribution Adjustment(5) | $1.50 | ($1.22) |
Assuming the change in the Index Value is 10% (for example from 100.00 to 110.00)
Segment Interim Value(1) | $1,048.53 | $1,067.61 | ||
Percent Withdrawn(2) | 9.54% | 9.37% | ||
New Segment Account Value(3) | $904.63 | $906.33 | ||
New Segment Interim Value(4) | $948.53 | $967.61 | ||
Early Distribution Adjustment(5) | ($4.63) | ($6.33) |
| (1) |
|
| (2) | Percent Withdrawn is equal to Amount Withdrawn divided by Segment Interim |
| (3) | New Segment |
| (4) | New Segment Interim Value is equal to the calculated Segment Interim Value based on the new Segment |
| (5) | The EDA is the reduction in the Segment Account minus the reduction in the Segment Interim Value. The EDA may be positive or negative or zero. |
39
The following hypothetical examples show the impact of the Segment Interim Value calculation.
95% Participation Rate
Segment Interim Value – Standard Segments
| Assumptions | 1-Year Segment | 1-Year Segment | ||
Segment Term (in months) | 12 | 12 | ||
Valuation Date (months since Segment Start Date) | 3 | 9 | ||
Initial Segment Account Value | $1,000 | $1,000 | ||
Segment Buffer | -10% | -10% | ||
Growth Cap Rate | 15% | 15% | ||
Participation Rate | 95% | 95% | ||
Time to Maturity (in months) | 9 | 3 |
Assuming the change in the Index Value is -40% (for example from 100.00 to 60.00)
Fair Value of Hypothetical Fixed Instrument | $991.44 | $997.14 | ||
Fair Value of Hypothetical Derivatives | ($282.18) | ($280.42) | ||
Segment Interim Value (sum of above) | $709.27 | $716.72 |
Assuming the change in the Index Value is -10% (for example from 100.00 to 90.00)
Fair Value of Hypothetical Fixed Instrument | $991.44 | $997.14 | ||
Fair Value of Hypothetical Derivatives | ($43.62) | ($30.47) | ||
Segment Interim Value (sum of above) | $947.82 | $966.67 |
Assuming the change in the Index Value is 10% (for example from 100.00 to 110.00)
Fair Value of Hypothetical Fixed Instrument | $991.44 | $997.14 | ||
Fair Value of Hypothetical Derivatives | $72.88 | $87.38 | ||
Segment Interim Value (sum of above) | $1,064.33 | $1,084.52 |
Assuming the change in the Index Value is 40% (for example from 100.00 to 140.00)
Fair Value of Hypothetical Fixed Instrument | $991.44 | $997.14 | ||
Fair Value of Hypothetical Derivatives | $143.76 | $149.68 | ||
Segment Interim Value (sum of above) | $1,135.20 | $1,146.82 |
The input values to the market standard model that have been utilized to generate the hypothetical examples above are as follows:
| 1. | Implied volatilities are assumed to be 22.5% for out-of-the-money put options, 19% for at-the-money call options, and 16% for out-of-the-money call options. |
| 2. | Annualized swap rate is assumed to be 0.09% for all options. |
| 3. | Index dividend yield is assumed to be 0.42% for all options. |
| 4. | Investment Rate is assumed to be 1.1524% for all options. |
Segment Interim Value – Step Up Segments
| Assumptions | 1-Year Segment | 1-Year Segment | ||
Segment Term (in months) | 12 | 12 | ||
Valuation Date (months since Segment Start Date) | 3 | 9 | ||
Initial Segment Account Value | $1,000 | $1,000 | ||
Segment Buffer | -10% | -10% | ||
Growth Cap Rate | 12.5% | 12.5% | ||
Participation Rate | 95.0% | 95.0% | ||
Time to Maturity (in months) | 9 | 3 |
I-8Assuming the change in the Index Value is -10% (for example from 100.00 to 90.00)
Fair Value of Hypothetical Fixed Instrument | $991.44 | $997.14 | ||
Fair Value of Hypothetical Derivatives | ($35.29) | ($20.17) | ||
Segment Interim Value (sum of above) | $956.15 | $976.97 |
40
Assuming the change in the Index Value is 10% (for example from 100.00 to 110.00)
Fair Value of Hypothetical Fixed Instrument | $991.44 | $997.14 | ||
Fair Value of Hypothetical Derivatives | $70.92 | $101.23 | ||
Segment Interim Value (sum of above) | $1,062.36 | $1,098.37 |
The input values to the market standard model that have been utilized to generate the hypothetical examples above are as follows:
| 1. | Implied volatilities are assumed to be 22.5% for out-of-the-money put options and 19.5% for at-the-money binary call options. |
| 2. | Annualized swap rate is assumed to be 0.09% for all options. |
| 3. | Skewness is assumed to be 0% for binary options. |
| 4. | Index dividend yield is assumed to be 0.42% for all options. |
| 5. | Investment Rate is assumed to be 1.1524% for all options. |
Segment Interim Value – Dual Direction Segments
| Assumptions | 1-Year Segment | 1 Year Segment | ||
Segment Term (in months) | 12 | 12 | ||
Value Date (months since Segment Start Date) | 3 | 9 | ||
Initial Segment Account Value | $1,000 | $1,000 | ||
Segment Buffer | -10% | -10% | ||
Growth Cap Rate | 8.00% | 8.00% | ||
Participation Rate | 95% | 95% | ||
Time to Maturity (in months) | 9 | 3 |
Assuming the change in the Index Value is -15% (for example from 100.00 to 85.00)
Fair Value of Hypothetical Fixed Instrument | $991.44 | $997.14 | ||
Fair Value of Hypothetical Derivatives | ($66.01) | ($46.68) | ||
Segment Interim Value (sum of above) | $925.44 | $950.46 |
Assuming the change in the Index Value is -5% (for example from 100.00 to 95.00)
Fair Value of Hypothetical Fixed Instrument | $991.44 | $997.14 | ||
Fair Value of Hypothetical Derivatives | ($2.00) | $18.18 | ||
Segment Interim Value (sum of above) | $989.44 | $1,015.32 |
Assuming the change in the Index Value is 10% (for example from 100.00 to 110.00)
Fair Value of Hypothetical Fixed Instrument | $991.44 | $997.14 | ||
Fair Value of Hypothetical Derivatives | $57.94 | $69.83 | ||
Segment Interim Value (sum of above) | $1,049.38 | $1,066.97 |
The input values to the market standard model that have been utilized to generate the hypothetical examples above are as follows:
| 1. | Implied volatilities are assumed to be 22.5% for out-of-the-money put options, 19% for at-the-money call options, and 16% for out-of-the-money call options, 24% for at-the-money put options, and 22% for out-of-the-money put options. |
| 2. | Annualized swap rate is assumed to be 0.09% for all options. |
| 3. | Skewness is assumed to be 0% for binary options. |
| 4. | Index dividend yield is assumed to be 0.42% for all options. |
| 5. | Investment Rate is assumed to be 1.1524% for all options. |
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The following examples show the impact of a partial withdrawal.
Effect of Early Distributions on Segment Interim Value – Standard Segments
| Assumptions | 1-Year Segment | |||
Segment Term (in months) | 12 | |||
Valuation Date (Months since Segment Start Date) | 9 | |||
Initial Segment Account Value | $1,000 | |||
Segment Buffer | -10% | |||
Growth Cap Rate | 15% | |||
Participation Rate | 95% | |||
Time to Maturity (in months) | 3 | |||
Amount Withdrawn | $100 |
Assuming the change in the Index Value is -40% (for example from 100.00 to 60.00)
Segment Interim Value(1) | $716.72 | |||
Percent Withdrawn(2) | 13.95% | |||
New Segment Account Value(3) | $860.48 | |||
New Segment Interim Value(4) | $616.72 | |||
Early Distribution Adjustment(5) | $39.52 |
Assuming the change in the Index Value is -10% (for example from 100.00 to 90.00)
Segment Interim Value(1) | $966.67 | |||
Percent Withdrawn(2) | 10.34% | |||
New Segment Account Value(3) | $896.55 | |||
New Segment Interim Value(4) | $866.67 | |||
Early Distribution Adjustment(5) | $3.45 |
Assuming the change in the Index Value is 10% (for example from 100.00 to 110.00)
Segment Interim Value(1) | $1,084.52 | |||
Percent Withdrawn(2) | 9.22% | |||
New Segment Account Value(3) | $907.79 | |||
New Segment Interim Value(4) | $984.52 | |||
Early Distribution Adjustment(5) | ($7.79) |
Assuming the change in the Index Value is 40% (for example from 100.00 to 140.00)
Segment Interim Value(1) | $1,146.82 | |||
Percent Withdrawn(2) | 8.72% | |||
New Segment Account Value(3) | $912.80 | |||
New Segment Interim Value(4) | $1,046.82 | |||
Early Distribution Adjustment(5) | ($12.80) |
Effect of Early Distributions on Segment Interim Value – Step Up Segments
| Assumptions | 1-Year Segment | |||
Segment Term (in months) | 12 | |||
Valuation Date (Months since Segment Start Date) | 9 | |||
Initial Segment Account Value | $1,000 | |||
Segment Buffer | -10% | |||
Growth Cap Rate | 12.5% | |||
Participation Rate | 95% | |||
Time to Maturity (in months) | 3 | |||
Amount Withdrawn | $100 |
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Assuming the change in the Index Value is -10% (for example from 100.00 to 90.00)
Segment Interim Value(1) | $976.97 | |||
Percent Withdrawn(2) | 10.24% | |||
New Segment Account Value(3) | $897.64 | |||
New Segment Interim Value(4) | $876.97 | |||
Early Distribution Adjustment(5) | $2.36 |
Assuming the change in the Index Value is 10% (for example from 100.00 to 110.00)
Segment Interim Value(1) | $1,098.37 | |||
Percent Withdrawn(2) | 9.10% | |||
New Segment Account Value(3) | $908.96 | |||
New Segment Interim Value(4) | $998.37 | |||
Early Distribution Adjustment(5) | ($8.96) |
Effect of Early Distributions on Segment Interim Value – Dual Direction Segments
| Assumption | 1-Year Segment | 1 Year Segment | ||
Segment Term (in months) | 12 | 12 | ||
Value Date (months since Segment Start Date) | 3 | 9 | ||
Initial Segment Account Value | $1,000 | $1,000 | ||
Segment Buffer | -10% | -10% | ||
Growth Cap Rate | 8.00% | 8.00% | ||
Participation Rate | 95% | 95% | ||
Time to Maturity (in months) | 9 | 3 | ||
Amount Withdrawn | $100 | $100 |
Assuming the change in the Index Value is -15% (for example from 100.00 to 85.00)
Segment Interim Value(1) | $925.44 | $950.46 | ||
Percent Withdrawn(2) | 10.81% | 10.52% | ||
New Segment Account Value(3) | $891.94 | $894.79 | ||
New Segment Interim Value(4) | $825.44 | $850.46 | ||
Early Distribution Adjustment(5) | $8.06 | $5.21 |
Assuming the change in the Index Value is -5% (for example from 100.00 to 95.00)
Segment Interim Value(1) | $989.44 | $1,015.32 | ||
Percent Withdrawn(2) | 10.11% | 9.85% | ||
New Segment Account Value(3) | $898.93 | $901.51 | ||
New Segment Interim Value(4) | $889.44 | $915.32 | ||
Early Distribution Adjustment(5) | $1.07 | ($1.51) |
Assuming the change in the Index Value is 10% (for example from 100.00 to 110.00)
Segment Interim Value(1) | $1,049.38 | $1,066.97 | ||
Percent Withdrawn(2) | 9.53% | 9.37% | ||
New Segment Account Value(3) | $904.71 | $906.28 | ||
New Segment Interim Value(4) | $949.38 | $966.97 | ||
Early Distribution Adjustment(5) | ($4.71) | ($6.28) |
| (1) | Segment Interim Value immediately before withdrawal. |
| (2) | Percent Withdrawn is equal to Amount Withdrawn divided by Segment Interim Value. |
| (3) | New Segment Account Value is equal to the Initial Segment Account Value ($1,000) multiplied by (1 – Percent Withdrawn). |
| (4) | New Segment Interim Value is equal to the calculated Segment Interim Value based on the new Segment Account Value. It will also be equal to the Segment Interim Value multiplied by (1 – Percent Withdrawn). |
| (5) | The EDA is the reduction in the Segment Account minus the reduction in the Segment Interim Value. The EDA may be positive or negative or zero. |
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Appendix II:Appendix: Index Publishers
The Structured InvestmentMarket Stabilizer Option II (“MSO”) tracks a certain Securities Indices and Index Funds that isare published by a third party.parties. The Company uses thisthese Securities Indices and Index Funds under license from the Index’sIndices’ and Index Funds respective publisher.publishers. The following information about the Indices and Index Funds is included in this Prospectus in accordance with the Company’s license agreements with the publisherpublishers of the Index:Indices and Index Funds:
Standard & Poor’sS&P Dow Jones Indices LLC requires that the following disclaimer be included in thisthe Prospectus:
The Structured Investment Option,S&P 500 Price Return Index (the “Index”) is a product of S&P Dow Jones Indices LLC (“SPDJI”), and has been licensed for use by the Company. Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by the Company. The MSO contract is not sponsored, endorsed, sold or promoted by Standard & Poor’s (“SPDJI, Dow Jones, S&P”)&P or its third party licensors. Neitherany of their respective affiliates (collectively, “S&P Dow Jones Indices”). S&P nor its third party licensorsDow Jones Indices makes anyno representation or warranty, express or implied, to the owners of the Structured Investment OptionMSO or any member of the public regarding the advisability of investing in securities generally or in the Structured Investment Option,MSO particularly or the ability of the S&P 500 Price Return Index (the “Index”)Indexes to track general stock market performance. S&P’s and its third party licensor’s&P Dow Jones Indices’ only relationship to the Company with respect to the Index is the licensing of the Index and certain trademarks, andservice marks and/or trade names of S&P and the third party licensors and of the Index which isDow Jones Indices and/or its licensors. The Indexes are determined, composed and calculated by S&P or its third party licensorsDow Jones Indices without regard to the Company or the Structured Investment Option.MSO. S&P and its third party licensorsDow Jones Indices have no obligation to take the needs of the Company or the owners of the Structured Investment OptionMSO into consideration in determining, composing or calculating the Index. Neither S&P nor its third party licensors isDow Jones Indices are not responsible for and hashave not participated in the determination of the prices, and amount of the Structured Investment OptionMSO or the timing of the issuance or sale of the Structured Investment Optionsuch contract or in the determination or calculation of the equation by which the Structured Investment Optionsuch contract is to be converted into cash.cash, surrendered or redeemed, as the case may be. S&P hasDow Jones Indices have no obligation or liability in connection with the administration, marketing or trading of the Structured Investment Option.Company’s products. There is no assurance that investment products based on the Indexes will accurately track index performance or provide positive investment returns. S&P Dow Jones Indices LLC is not an investment advisor. Inclusion of a security within an index is not a recommendation by S&P Dow Jones Indices to buy, sell, or hold such security, nor is it considered to be investment advice.
NEITHER S&P ITS AFFILIATES NOR THEIR THIRD PARTY LICENSORSDOW JONES INDICES DOES NOT GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OF THE INDEX OR ANY DATA INCLUDED THEREINRELATED THERETO OR ANY COMMUNICATIONS,COMMUNICATION, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATIONSCOMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&P ITS AFFILIATES AND THEIR THIRD PARTY LICENSORSDOW JONES INDICES SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. S&P MAKESDOW JONES INDICES MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY THE COMPANY, OWNERS OF THE MSO, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDEX OR WITH RESPECT TO THE MARKS, THE INDEX OR ANY DATA INCLUDED THEREIN.RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&P ITS AFFILIATES OR THEIR THIRD PARTY LICENSORSDOW JONES INDICES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE. THERE ARE NO THIRD-PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN S&P DOW JONES INDICES AND THE COMPANY, OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES.
The name “S&P 500 Price Return Index” is a trademark of Standard & Poor’s and has been licensed for use by the Company.
Frank Russell Company requires that the following disclosure be included in this Prospectus:
The Structured Investment Option is not sponsored, endorsed, sold or promoted by Frank Russell Company (“Russell”). Russell makes no representation or warranty, express or implied, to the owners of the Structured Investment Option or any member of the public regarding the advisability of investing in securities generally or in the Product(s) particularly or the ability of the Russell 2000® Price Return Index to track general stock market performance or a segment of the same. Russell’s publication of the Russell 2000® Price Return Index in no way suggests or implies an opinion by Russell as to the advisability of investment in any or all of the securities upon which the Russell 2000® Price Return Index is based. Russell’s only relationship to the Company is the licensing of certain trademarks and trade names of Russell and of the Russell 2000® Price Return Index which is determined, composed and calculated by Russell without regard to the Company or the Structured Investment Option. Russell is not responsible for and has not reviewed the Structured Investment Option nor any associated literature or publications and Russell makes no representation or warranty express or implied as to their accuracy or completeness, or otherwise. Russell reserves the right, at any time and without notice, to alter, amend, terminate or in any way change the Structured Investment Option. Russell has no obligation or liability in connection with the administration, marketing or trading of the Structured Investment Option.
RUSSELL DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE RUSSELL 2000® PRICE RETURN INDEX OR ANY DATA INCLUDED THEREIN AND RUSSELL SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. RUSSELL MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY, INVESTORS, OWNERS OF THE PRODUCT(S), OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE RUSSELL 2000® PRICE RETURN INDEX OR ANY DATA INCLUDED THEREIN. RUSSELL MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE RUSSELL 2000® PRICE RETURN INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING
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ANY OF THE FOREGOING, IN NO EVENT SHALL RUSSELL HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
MSCI Inc. requires that the following disclosure be included in this Prospectus:
THIS PRODUCT IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI INC. (“MSCI”), ANY OF ITS AFFILIATES, ANY OF ITS INFORMATION PROVIDERS OR ANY OTHER THIRD PARTY INVOLVED IN, OR RELATED TO, COMPILING, COMPUTING OR CREATING ANY MSCI INDEX (COLLECTIVELY, THE “MSCI PARTIES”). THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES ARE SERVICE MARK(S) OF MSCI OR ITS AFFILIATES AND HAVE BEEN LICENSED FOR USE FOR CERTAIN PURPOSES BY THE COMPANY. NONE OF THE MSCI PARTIES MAKES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE ISSUER OR OWNERS OF THIS PRODUCT OR ANY OTHER PERSON OR ENTITY REGARDING THE ADVISABILITY OF INVESTING IN PRODUCTS GENERALLY OR IN THIS PRODUCT PARTICULARLY OR THE ABILITY OF ANY MSCI INDEX TO TRACK CORRESPONDING STOCK MARKET PERFORMANCE. MSCI OR ITS AFFILIATES ARE THE LICENSORS OF CERTAIN TRADEMARKS, SERVICE MARKS AND TRADE NAMES AND OF THE MSCI INDEXES WHICH ARE DETERMINED, COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THIS PRODUCT OR THE ISSUER OR OWNERS OF THIS PRODUCT OR ANY OTHER PERSON OR ENTITY. NONE OF THE MSCI PARTIES HAS ANY OBLIGATION TO TAKE THE NEEDS OF THE ISSUER OR OWNERS OF THIS PRODUCT OR ANY OTHER PERSON OR ENTITY INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE MSCI INDEXES. NONE OF THE MSCI PARTIES IS RESPONSIBLE FOR OR HAS PARTICIPATED IN THE DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THIS PRODUCT TO BE ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY OR THE CONSIDERATION INTO WHICH THIS PRODUCT IS REDEEMABLE. FURTHER, NONE OF THE MSCI PARTIES HAS ANY OBLIGATION OR LIABILITY TO THE ISSUER OR OWNERS OF THIS PRODUCT OR ANY OTHER PERSON OR ENTITY IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR OFFERING OF THIS PRODUCT. ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE CALCULATION OF THE MSCI INDEXES FROM SOURCES THAT MSCI CONSIDERS RELIABLE, NONE OF THE MSCI PARTIES WARRANTS OR GUARANTEES THE ORIGINALITY, ACCURACY AND/OR THE COMPLETENESS OF ANY MSCI INDEX OR ANY DATA INCLUDED THEREIN. NONE OF THE MSCI PARTIES MAKES ANY WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE ISSUER OF THE PRODUCT, OWNERS OF THE PRODUCT, OR ANY OTHER PERSON OR ENTITY, FROM THE USE OF ANY MSCI INDEX OR ANY DATA INCLUDED THEREIN. NONE OF THE MSCI PARTIES SHALL HAVE ANY LIABILITY FOR ANY ERRORS, OMISSIONS OR INTERRUPTIONS OF OR IN CONNECTION WITH ANY MSCI INDEX OR ANY DATA INCLUDED THEREIN. FURTHER, NONE OF THE MSCI PARTIES MAKES ANY EXPRESS OR IMPLIED WARRANTIES OF ANY KIND, AND THE MSCI PARTIES HEREBY EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO EACH MSCI INDEX AND ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL ANY OF THE MSCI PARTIES HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES. No purchaser, seller or holder of this product, or any other person or entity, should use or refer to any MSCI trade name, trademark or service mark to sponsor, endorse, market or promote this security without first contacting MSCI to determine whether MSCI’s permission is required. Under no circumstances may any person or entity claim any affiliation with MSCI without the prior written permission of MSCI.
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Appendix III: Segment Maturity Date and Segment Start Date examples
The Segment Maturity Date for Segments maturing in a given month and the Segment Start Date for new Segments starting in that same month will always be scheduled to occur on the first two consecutive business days that are also Segment Business Days occurring after the 13th of a month. However, as described earlier in this Prospectus, the Segment Maturity Date and Segment Start Date may sometimes occur on later dates.
Set forth below are representative examples of how the Segment Maturity Date and Segment Start Date may be moved to a later date in a given month due to weekends and holidays, which are not Segment Business Days.
The first table below assumes that the 14th and/or 15th of the month falls on a weekend, and the following Monday and Tuesday are both Segment Business Days:
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The second table below assumes that the 14th or 15th of the month falls on a scheduled holiday and therefore, is not a Segment Business Day:
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Appendix: State contract availability and/or variations of certain features and benefits
States where certain EQUI-VEST® features and/or benefits are not available or vary:
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
| ITEM 14. |
|
ITEM OF EXPENSE | ESTIMATED EXPENSE | ESTIMATED EXPENSE | ||||||
Registration fees | $ | $ | ||||||
Federal taxes | N/A | N/A | ||||||
State taxes and fees (based on 50 state average) | N/A | N/A | ||||||
Trustees’ fees | N/A | N/A | ||||||
Transfer agents’ fees | N/A | N/A | ||||||
Printing and filing fees | $ | 50,000 | * | $ | 50,000 | * | ||
Legal fees | N/A | N/A | ||||||
Accounting fees | N/A | N/A | ||||||
Audit fees | $ | 20,000 | * | $ | 20,000 | * | ||
Engineering fees | N/A | N/A | ||||||
Directors’ and officers’ insurance premium paid by Registrant | N/A | |||||||
Directors and officers insurance premium paid by Registrant | N/A | |||||||
| * | Estimated expense. |
| ITEM 15. |
|
The By-Laws of Equitable Financial Life Insurance Company of America (the “Corporation”) provide, in Article VI as follows:
ARTICLE VI
INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS
SECTION 1. NATURE OF INDEMNITY. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that he or she is or was or has agreed to become a director or officer of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity, and may indemnify any person who was or is a party or is threatened to be made a party to such an action, suit or proceeding by reason of the fact that he or she is or was or has agreed to become an employee or agent of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her or on his or her behalf in connection with such action, suit or proceeding and any appeal therefrom, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding had no reasonable cause to believe his or her conduct was unlawful; except that in the case of an action or suit by or in the right of the Corporation to procure a judgment in its favor (1) such indemnification shall be limited to expenses (including attorneys’ fees) actually and reasonably incurred by such person in the defense or settlement of such action or suit, and (2) no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the court in which such action or suit was brought or other court of competent jurisdiction shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity.
1
The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of no contest or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.
SECTION 6. SURVIVAL; PRESERVATION OF OTHER RIGHTS. The foregoing indemnification provisions shall be deemed to be a contract between the Corporation and each director, officer, employee and agent who serves in any such capacity at any time while these provisions as well as the relevant provisions of Title 10, Arizona Revised Statutes are in effect and any repeal or modification thereof shall not affect any right or obligation then existing with respect to any state of facts then or previously existing or any action, suit or proceeding previously or thereafter brought or threatened based in whole or in part upon any such state of facts. Such a “contract right” may not be modified retroactively without the consent of such director, officer, employee or agent.
The indemnification provided by this Article shall not be deemed exclusive of any other right to which those indemnified may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
SECTION 7. INSURANCE. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this By-Law.
The directors and officers of Equitable Financial Life Insurance Company of America are insured under policies issued by X.L. Insurance Company, Arch Insurance Company, Sombo (Endurance Specialty Insurance Company), U.S. Specialty Insurance, ACE (Chubb), Chubb Insurance Company, AXIS Insurance Company, Zurich Insurance Company, AWAC (Allied World Assurance Company, Ltd.), Aspen Bermuda XS, CAN, AIG, One Beacon, Nationwide, Berkley, Berkshire, SOMPO, Chubb, Markel and ARGO ReRE Ltd. The annual limit on such policies is $300 million, and the policies insure the officers and directors against certain liabilities arising out of their conduct in such capacities.
ITEM 16. EXHIBITS
Underwriting Agreement.
(2) Not Applicable. (4) Form of policy. |
2 |
(5) Opinion and consent of counsel, filed herewith.
(8) Not Applicable.
(12) Not Applicable.
(15) Not Applicable.
(23) Consent of independent registered public accounting firm, to be filed by Amendment.
(24) Powers of Attorney, filed herewith.
(25) Not Applicable.
(26) Not Applicable.
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(Ex-107)(EX-107) Filing Fees Table, filed herewith.
ITEM 17.
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| ITEM 17. | UNDERTAKINGS |
| (a) | The undersigned registrant hereby undertakes: |
| (1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
| (i) | to include any prospectus required by section 10 (a) (3) of the Securities Act of 1933; |
| (ii) | to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424 (b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; |
| (iii) | to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
provided, however, that paragraphs (a) (1) (i), (a) (1) (ii) and (a) (1) (iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15 (d) of the Securities Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424 (b) that is part of this Registration Statement.
| (2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
| (4) | That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule |
4
| (5) | That, for the purpose of determining liability of the Registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: (i) Any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424; (ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the undersigned Registrant; (iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and (iv) Any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser. |
| (b) | The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (c) | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the |
| registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. |
5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Citycity and State of New York on the 15ththis 15th day of February, 2024.
| Equitable Financial Life Insurance Company of America | ||
| (Registrant) | ||
/s/ Alfred Ayensu-Ghartey | ||
| Alfred Ayensu-Ghartey | ||
Vice President and Associate General Counsel Equitable Financial Life Insurance Company of America | ||
As required by the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the date indicated:
PRINCIPAL EXECUTIVE OFFICER:
| PRINCIPAL EXECUTIVE OFFICER: | ||
| *Mark Pearson | Chief Executive Officer and Director | |
| PRINCIPAL FINANCIAL OFFICER: | ||
| *Robin Raju | Chief Financial Officer | |
| PRINCIPAL ACCOUNTING OFFICER: | ||
| *William Eckert | Chief Accounting Officer | |
| *DIRECTORS: | ||||||
Craig MacKay Charles G.T. Stonehill Bertram Scott | Daniel G. Kaye Francis Hondal Arlene Isaacs-Lowe | Joan Lamm-Tennant |
| |||
| George Stansfield | |||||
Mark Pearson | ||||||
| *By: | /s/ Alfred Ayensu-Ghartey | |
| Alfred Ayensu-Ghartey | ||
| Attorney-in-Fact | ||
February 15, 2024