On November 1st, Norm Champ, SEC Director, Division of Investment Management discussed life insurance company products. Champ highlighted a letter issued by the Office of Insurance Products that provided no-action assurance to an issuer of variable annuities used to fund 403(b) retirement plans that are subject to ERISA. In that letter, the staff stated that it would not recommend enforcement action if the sponsor of a 403(b) retirement plan makes a default allocation of investor assets into an annuity that carries the restrictions on withdrawals required by tax law, notwithstanding the requirement in the 1940 Act that variable annuities be fully redeemable. The letter relaxes the tax withdrawal acknowledgement requirement in two limited circumstances: first, where investor assets are allocated to a new 403(b) annuity offered in replacement of an existing 403(b) annuity or custodial account and, second, where allocations are made in connection with a participant's automatic enrollment as permitted by the Pension Protection Act. Champ also urged sellers of insurance products to convey to their contract owners as clearly as possible the contract risks they face. Imbedded assumptions in new product designs about interest rates, market volatility, or the robustness of hedging operations need to be carefully examined. The failure of these assumptions, Champ believes, is neither good for the long-term success of a business nor for its customers. Champ Remarks.