IDA Portfolio

• The resulting portfolio is available only through the IDA.

• The Technology determines each investment’s allocation and dollar amount.

• The Contract Holder has no means to know the algorithm’s methodology.

• The Contract Holder has no legal, direct or indirect ownership in the IDA’s investments.

Individual Variable Insurance or Annuities

• Each Qualified

Contract Holder of an insurance policy or annuity.

• Premium dollars are paid to the Insurance Company in a four-pay structure.

Insurance Dedicated Account

• The Insurance

its separate account into sub-accounts.

• A sub-account is executed as an insurance dedicated account (“IDA”).

• There is one IDA per Contract Holder's policy or annuity.

• The Insurance Company is the owner of each IDA.

• The IDA is non-public and exclusively available through a Variable Contract.

Investment Management Agreement

• Advisor is bound

management agreement.

• Insurance Company can terminate the Advisor for contract breaches.

Investment Advisor

• Each IDA has an

approved and appointed Advisor

• Advisor has full and complete discretion over the IDA.

Investing Technology

• The IDA is managed with sophisticated investment technology (“Technology”).

• The Technology is non-public and available only through the Insurance Company.

• Only an approved Advisor can access the Technology and apply it to each IDA.

• The Technology enforces legal and regulatory diversification.

IDA Investing Process

• Each IDA has an exclusive and dedicated portfolio.

• Advisor uses any publicly available investment approved by the Advisor’s investment committee.

• Advisor determines the market-based advice inputs for portfolio structuring.

• The Technology uses an advanced algorithm to build and monitor the Portfolio.

• Advisor is required to trade the designed portfolio without deviation.

IDA

ADVISABLEW E A L T H E N G I N E S

© All Rights Reserved. This infographic is for informational purposes only. It is not legal advice. Consult with competent legal counsel for guidance concerning the principles applied and the positions taken herein.

Purchaser is a Company subdivides to an investment Insurance Company

AAVUL Advisor-as-Asset-AllocatorAdvisor Applied Variable Universal Life (AAVUL): Legal and Regulatory Foundation

Legal & Regulatory References1) Code of Federal Regulations: 26 CFR 1.817-5 (https://www.law.cornell.edu/cfr/text/26/1.817-5)

2) IRS Revenue Ruling: 2003-91 (https://www.irs.gov/irb/2003-33_IRB/ar08.html)

3) IRS Revenue Ruling: 119363-10 (https://www.irs.gov/pub/irs-wd/1105012.pdf)

4) Webber v. Commissioner of Internal Revenue (http://www.ustaxcourt.gov/InOpHistoric/WebberDivision.Lauber.TC.WPD.pdf)

Legal and Regulatory SummaryTwo issues define the validity of a Contract Holder’s tax benefits available through a Variable Contract: diversification and investor control. Diversification is formulaic and, for each Insurance Dedicated Account (IDA), the Technology ensures full compliance.

Investor control is always evaluated based on the relevant facts and circumstances. Here, the Technology creates repeatable, verifiable, and auditable facts and circumstances buttressed with documentary evidence proving the absence of investor control should the IRS pursue a challenge administratively or in Tax Court.

For investing premium, rebalancing the IDA's portfolio, and restructuring the IDA's portfolio, the Technology determines the percentage and dollar amount for each investment. Neither the Advisor nor the Contract Holder can adjust any investment allocation. The investment management agreement between the Insurance Company and the Advisor requires that the Advisor trade the portfolio as dictated by the Technology. The Technology compares the designed portfolio to the traded portfolio, and, if there is any deviation, the Advisor is required to correct the deviation or else the investment management agreement is breached.

This eliminates the possibility of "any arrangement, plan, contract, or agreement between the Contract Holder and the Advisor" that the IRS could pursue in an investor control challenge.

Private PlacementVariable Contract

Individual Contracts

3(c)(7) Qualified Purchasers Fully compliant

with all US laws

Filed and approvedin all states set for distribution

Legal and Regulatory FoundationAdvisor-as-Asset-Allocator

Insurance CompanyAAVUL (aka PPLI/PPVUL)