Members of the Fund Substitution Working Group will focus on possible avenues for streamlining the process by which insurers replace underlying mutual funds that are offered through their variable annuity (and life) separate accounts and move the assets to a different fund.  These transactions are typically subject to review and advance approval by the SEC.  The Working Group was formed in response to unprecedented activity in this area in 2016 and 2017, which saw a fund manager, selling broker-dealer and contract owners objecting to an insurer’s right to substitute funds and cause significant disruption and delay to the process.  The Working Group will consider SEC staff education and advocacy efforts in response to the ensuing increased regulatory scrutiny.  In addition, the Working Group will analyze the feasibility of broad no-action relief, a rulemaking petition or other vehicle aimed at the creation of a safe harbor which would obviate the need for SEC review and approval of all or most substitution transactions.