Rule 6e -2 Supporting Statement

OMB CONTROL NUMBER: 3235-0177
SUPPORTING STATEMENT
For the Paperwork Reduction Act Information Collection Submission for
Rule 6e-2 and Form N-6EI-1
A.

JUSTIFICATION
1.

Necessity for the Information Collection

Rule 6e-2 (17 CFR 270.6e-2) under the Investment Company Act of 1940 (“Act”)
provides exemptions from certain provisions of the Act to separate accounts formed by life
insurance companies to fund certain variable life insurance products, subject to conditions set
forth in the rule.
Rule 6e-2 provides a separate account with an exemption from the registration provisions
of section 8 of the Act if the account files with the Securities and Exchange Commission
(“Commission” or “SEC”) Form N-6EI-1 (17 CFR 274.301), a notification of claim of
exemption.
The rule also exempts a separate account from a number of other sections of the Act
provided that the separate account makes certain disclosure in its registration statements (in the
case of those separate accounts that elect to register), reports to contractholders, or proxy
solicitations, as prescribed by the rule, and/or makes certain disclosure to state regulatory
authorities. The requirements for registration statements, reports to contractholders, and proxy
solicitations are separately approved under the Paperwork Reduction Act.
2.

Purpose and Use of the Information Collection

Without this rule, management separate accounts and sponsoring life insurers would bear
the expense of filing individual exemptive applications, in addition to registration statements, in
order to obtain the relief needed to administer the separate accounts. Accordingly, the

Commission staff would be required to process such applications. Because the exemptive
applications would seek relief from a number of sections of the Act, such applications would be
quite lengthy and burdensome on both the life insurers and the staff. In addition, information
gathered under rule 6e-2, including information collected on Form N-6EI-1, is aimed at
minimizing the possibility that the rule will be abused.
3.

Consideration Given to Information Technology

The Commission’s electronic filing system, the Electronic Data Gathering, Analysis and
Retrieval system (“EDGAR”), is designed to automate the filing, processing and dissemination of
all disclosure filings. All registrants must file their disclosure documents via EDGAR, which has
increased the speed, ease, accuracy and availability of information. At present, none of the
information collections required by rule 6e-2 are filed on EDGAR, but they may be considered for
electronic filing in the future.
4.

Duplication

The rule does not call for duplicative information. The information requirement conforms
to other rules under the Act to which separate accounts are subject, so as to coordinate them with
existing information collection and reporting procedures.
5.

Effect on Small Entities

The insurance companies affected by the rule are not considered “small entities.”
6.

Consequences of Not Conducting Collection

The assets of a separate account held in custody by the insurer must be continuously
monitored and periodically audited to assure their safety. Other information collections are
required by the rule only when certain events occur.

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7.

Inconsistencies with Guidelines in 5 CFR 1320.5(d)(2)

Not applicable.
8.

Consultation Outside the Agency

The Commission requested public comment on the collection of information requirements
in rule 6e-2 before it submitted this request for extension and approval to the Office of
Management and Budget. The Commission received one public comment in response to its
request. The comment did not address rule 6e-2 or Form N-6EI-1; the comment proposed
treating separate account stable value products similar to general account stable value products.
The Commission and the staff of the Division of Investment Management also participate
in an ongoing dialogue with representatives of the investment company industry through public
conferences, meetings and informal exchanges. These various forums provide the Commission
and the staff with a means of ascertaining and acting upon paperwork burdens confronting the
industry.
9.

Payment or Gift

Not applicable.
10.

Confidentiality

Not applicable.
11.

Sensitive Questions

No information of a sensitive nature, including social security numbers, will be required
under this collection of information. The information collection collects basic Personally
Identifiable Information (PII) that may include names, job titles and work addresses. However,
the agency has determined that the information collection does not constitute a system of record
for purposes of the Privacy Act. Information is not retrieved by a personal identifier.

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12.

Burden of Information Collection

Since 2008, there have been no filings of Form N-6EI-1 by separate accounts. Therefore,
there has been no cost or burden to the industry since that time.
The staff of the Division of Investment Management estimates that the completion and
submission of the form takes one hour. However, it is expected that most, if not all, separate
accounts will not elect the exemption from registration that triggers the form requirement under
the rule. Therefore, the form is not expected to present any additional burden. With respect to
information required in registration statements, reports to contractholders, proxy solicitations, and
submissions to state agencies, issuers would be filing with the Commission and those state
agencies as a matter of course to fulfill other requirements. Consequently, rule 6e-2 does not
result in any additional cost or burden to the industry. The Commission requests authorization to
maintain an inventory of one burden hour for administrative purposes.
IC

IC Title
Rule 6e-2 and Form N-6EI-1

IC1 Recordkeeping
Total for all ICs

13.

Annual No. of Responses
Previously
Requested
Change
approved
0
0
0
0
0
0

Annual Time Burden (Hrs.)
Burden Cost Burden ($)
Previously
Previously
Requested
Change
Requested
Change
approved
approved
1
0
0
0
0
1
1
0
0
0
0
1

Cost to Respondents

Not applicable.
14.

Cost to the Federal Government

It is expected that most, if not all, separate accounts will not elect the exemption from
registration that triggers the requirement to file Form N-6EI-1 under the rule. Therefore, the
form is not expected to present any additional burden. The information collection requirements of
rule 6e-2 relating to custodianship impose no burden on the government because no information is
reviewed by the government. With respect to information required in registration statements,
reports to contractholders, proxy solicitations, and submissions to state agencies, issuers would be
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filing with the Commission and those state agencies as a matter of course to fulfill other
requirements. Consequently, it is expected that rule 6e-2 and Form N-6EI-1 will not result in any
additional cost to the government.
15.

Change in Burden

Not applicable.
16.

Information Collection Planned for Statistical Purposes

Not applicable.
17.

Approval to Omit OMB Expiration Date

Not applicable.
18.
Submission

Exceptions to Certification Statement for Paperwork Reduction Act

Not applicable.
B.

COLLECTION OF INFORMATION EMPLOYING STATISTICAL METHODS
Not applicable

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