Holly H. Smith
SUTHERLAND ASBILL & BRENNAN LLP
1275 Pennsylvania Ave, NW
Washington DC 20004-2415

Re: No-Action Request by Lincoln National Life Insurance Company, et al. in Connection with Recordkeeping Services for Variable Annuity and Variable Life Insurance Contracts

Dear Ms. Smith:

In your letter dated August 22, 2003, as supplemented by telephone conversations with the staff, you request assurances that the staff will not recommend enforcement action to the Commission if The Lincoln National Life Insurance Company ("Lincoln Life") and Lincoln Life & Annuity Company of New York ("LNY") (collectively referred to as "Lincoln") conducts the recordkeeping activities described in your letter for variable annuity and variable life insurance contracts subsequently acquired by, but not originally issued by, Lincoln and relies on the insurance company exclusion from the definition of transfer agent in Section 3(a)(25) of the Securities Exchange Act of 1934 (Exchange Act). A photocopy of your letter is attached to this response so that we may avoid having to recite or summarize the facts set forth in your letter.

Response:

Pursuant to Section 3(a)(25) of the Exchange Act the term "transfer agent" does not include any insurance company or separate account which performs such functions solely with respect to variable annuity contracts or variable life policies which it issues. Based on the representations and the facts presented, the Division of Market Regulation will not recommend enforcement action to the Commission if Lincoln engages in the recordkeeping activities described in your August 22, 2003, letter for variable annuity contracts or variable life policies not issued but subsequently acquired by Lincoln and relies on the insurance company exclusion from the definition of transfer agent in Section 3(a)(25) of the Exchange Act.

We note in particular your representation that Lincoln is acquiring securities businesses from issuers that were themselves entitled to rely on the insurance company exclusion from the transfer agent definition. We also note your representation that Lincoln performs all administrative services in connection with the acquired policies and business lines and that the parties to the acquisitions intend to transfer all economic risks to Lincoln. Lastly, we note your representation that even in acquisitions structured as "assumption" transactions, where state law permits contract holders to "opt out" of the assumption reinsurance, Lincoln takes full responsibility for the administration of the contracts and bears (through indemnity reinsurance) all of the general account risk even for the contract holders who opt out of the assumption.

Because this position is based on the facts and representations set forth in your August 22, 2003, letter and in conversations with the staff, any different fact or condition might require a different response. The relief granted herein is subject to modification or revocation if at any time the Commission determines that such action is necessary or appropriate in furtherance of the purposes of the Exchange Act. Furthermore, this response expresses the Division's position on enforcement action only and does not purport to express any legal conclusions on the question presented.

Incoming Letter:

The Incoming Letter is attached in PDF format.

http://www.sec.gov/divisions/marketreg/mr-noaction/lincoln082203.htm