SELECT LIFE VARIABLE ACCOUNT OF RELIASTAR Life insurance CO is reorganizing two pairs of Investment portfolios, with changes expected on or about July 10 and July 17. Policy owners’ investments will automatically move at equal total net asset value without tax liability, while the supplement describes a similar fund transaction at lower cost.

Key Highlights

  • Policy owners may transfer allocations before each reorganization without charge or counting against transfer limits.
  • Allocations directed to the merging portfolios will move automatically to the corresponding surviving portfolios afterward.
  • Surviving portfolios will close to new investors and new investments by existing investors on each applicable reorganization date.

Reassignment Across Two Dates

Four portfolios are reassigned across two dates under the described reorganization process, with each affected subaccount linked to a corresponding surviving portfolio. The process addresses what happens to investments in a subaccount investing in a merging portfolio and explains both the choices available to policy owners before the applicable date and the automatic reallocation that occurs on each reorganization date.

Choices Before the Applicable Date

Before the applicable date, policy owners could move money from a subaccount investing in a merging portfolio to another available subaccount or to a fixed interest option. These transfers carry no charge, so the policy owner does not incur a transfer fee for making that change before the applicable date.

Transfer Restrictions and Limits

The transfers described for the period before the applicable date do not count toward applicable transfer restrictions or limits. This means the specified movement from a subaccount investing in a merging portfolio to another available subaccount or fixed interest option is treated separately from those restrictions or limits.

Automatic Reallocation

On each reorganization date, investments held in the affected subaccount automatically shift into the corresponding surviving portfolio. The reallocation occurs at equal total net asset value, preserving the policy value immediately before and immediately after the transaction rather than changing that value through the movement between the merging and surviving portfolios.

Policy Value and Tax Liability

The policy value immediately before the automatic reallocation remains equal to the policy value immediately after the reallocation. The transaction also does not create tax Liability for policy owners, so the automatic shift itself does not impose tax liability under the terms described in the article.

Future Investments and Instructions

The surviving portfolios are closed to new investors and to new investments by existing investors on the applicable reorganization date. After that date, allocations directed to a merging portfolio automatically go to its corresponding surviving portfolio unless alternative instructions are provided, allowing the described automatic destination to apply when no different instruction is given.

Source(s)

  • https://www.sec.gov/Archives/edgar/data/897899/000091767726000312/vad0726_497.htm