The Variable Annuity Life Insurance Company

Allegations: AUGUST 6, 2015: IN TWENTY-FOUR SEPARATE SUMMARY ORDERS (THE "SUMMARY ORDERS"), THE WEST VIRGINIA STATE AUDITOR AND COMMISSIONER OF SECURITIES (THE "STATE AUDITOR") HAS ALLEGED THAT BETWEEN 1990 TO 1994: (1) VALIC ACTED AS AN INVESTMENT ADVISER BY CONDUCTING INVESTMENT ADVISORY SERVICES IN THE STATE OF WEST VIRGINIA ("WV") WITHOUT THE BENEFIT OF REGISTRATION IN VIOLATION OF WV CODE §32-2-201(C); (2) A VALIC ADVERTISEMENT HAD NOT BEEN FILED WITH THE COMMISSION BEFORE IT WAS DISTRIBUTED IN VIOLATION OF WV CODE §32-4-403; (3) VALIC AND ITS AGENT DEFRAUDED INVESTORS BY MISLEADING THEM TO SWITCH FROM WV'S DEFINED BENEFIT PLAN TO THE DEFINED CONTRIBUTION PLAN, BY MISREPRESENTING MATERIAL FACTS AND IMPLYING THEY WERE REPRESENTATIVES OF THE SCHOOL BOARD OR THE STATE IN VIOLATION OF WV CODES §32-1-101 AND §32-1-1 02(A); (5) STATEMENTS AND/OR OMISSIONS MADE A VALIC AGENT IN CONNECTION WITH THE OFFER, SALE, OR PURCHASE OF ANY SECURITY DIRECTLY OR INDIRECTLY WERE MISLEADING AND CONSTITUTED A SCHEME TO DEFRAUD WV RESIDENTS IN VIOLATION OF WV CODE §32-1-101 ET SEQ.; AND (5) THE FAILURE OF VALIC'S AGENT TO DISCLOSE TO HIS CLIENT THAT HE WAS EMPLOYED AND CONTROLLED BY VALIC WHILE ASSISTING IN HIS CLIENT'S RETIREMENT PLAN CONSTITUTES A DISHONEST OR UNETHICAL PRACTICE IN THE SECURITIES BUSINESS IN ACCORDANCE WITH WV CODE §32-2-204(B)(23). Status: Final Sanction Detail: CEASE AND DESIST ORDER WAS VACATED ON MAY 3, 2019 Summary: ON SEPTEMBER 24, 2015, VALIC SENT WRITTEN RESPONSES TO THE WV STATE AUDITOR, WHICH RESPONSE SETS FORTH VALIC'S OBJECTIONS TO THE SUMMARY ORDERS. BASED ON THOSE OBJECTIONS, VALIC HAS REQUESTED THAT THE SUMMARY ORDERS BE WITHDRAWN OR, ALTERNATIVELY, THAT AN ADMINISTRATIVE HEARING BE SCHEDULED AS SOON AS POSSIBLE SO THAT VALIC MAY PRESENT ITS COMPLETE RESPONSE TO THE ALLEGATIONS IN THE SUMMARY ORDERS. VALIC'S OBJECTIONS TO THE SUMMARY ORDERS ARE AS FOLLOWS: (1) VALIC IS CONCERNED WITH THE CIRCUMSTANCES IN WHICH THE SUMMARY ORDERS WERE TRANSMITTED TO VALIC. THE SUMMARY ORDERS WERE TRANSMITTED TO VALIC BY OUTSIDE COUNSEL ("WV COUNSEL"), WHICH HAD BEEN REPRESENTING THE WV INVESTMENT MANAGEMENT BOARD (IMB) AND THE CONSOLIDATED PUBLIC RETIREMENT BOARD (CPRB) IN CIVIL LITIGATION AGAINST VALIC. ADDITIONALLY, SHORTLY BEFORE A COURT-ORDERED MEDIATION IN THAT ACTION IN MAY 2015, WV COUNSEL HAD THREATENED VALIC WITH SERVICE OF THE SUMMARY ORDERS, NOTWITHSTANDING THAT THE RELEVANT INQUIRY, WHICH DATED BACK TO 2008, HAD LONG BEEN ENTIRELY DORMANT. VALIC FURTHER ASSERTS THAT THE SUMMARY ORDERS WERE POLITICALLY MOTIVATED AND NOT BASED ON ANY LEGITIMATE CONCERNS ABOUT THE LEGALITY OF VALIC'S CONDUCT. THUS, IT IS VALIC'S BELIEF THAT THE SUMMARY ORDERS REPRESENTED AN IMPROPER ATTEMPT BY WV COUNSEL TO USE AUTHORITY VESTED IN HIM BY THE STATE TO EXERT LEVERAGE IN CIVIL LITIGATION (IN WHICH VALIC HAS NOW ENTIRELY PREVAILED). (2) VALIC ALSO ASSERTS THAT THE ALLEGATIONS IN THE SUMMARY ORDERS ARE COMPLETELY LACKING OF MERIT AND THAT THE DEFICIENCIES IN THE SUMMARY ORDERS ARE AS FOLLOWS: (I) THE COMMISSION LACKS JURISDICTION OVER VALIC'S PRODUCTS AND PRACTICES; (II) VALIC DID NOT OFFER INVESTMENT ADVICE, MUCH LESS DO SO AS AN UNREGISTERED INVESTMENT ADVISER RECEIVING SPECIAL COMPENSATION; (III) THE CONDUCT ALLEGED OCCURRED IN THE 1990S AND, EVEN IF ACCURATELY DESCRIBED, (WHICH IT IS NOT), ANY CLAIMS BASED ON THAT CONDUCT WOULD BE TIME-BARRED BY APPLICABLE STATUTES OF LIMITATIONS; AND (IV) SEVERAL OF THE STATUTORY PROVISIONS CITED IN THE SUMMARY ORDERS WERE NOT PASSED INTO LAW UNTIL AFTER THE ALLEGED CONDUCT BY VALIC'S REPRESENTATIVES AND THEREFORE CANNOT APPLY TO THAT CONDUCT. THE WEST VIRGINIA IMB AND CPRB CIVIL LITIGATION REFERENCED ABOVE WAS DECIDED ENTIRELY IN VALIC'S FAVOR IN AN APRIL 28, 2017 ARBITRAL DECISION, WHICH WAS AFFIRMED ON APPEAL BY THE WEST VIRGINIA SUPREME COURT ON JUNE 5, 2018 (WITH A MOTION FOR REARGUMENT HAVING BEEN DENIED ON NOVEMBER 14, 2018 AND NO FURTHER APPEAL HAVING BEEN TAKEN). THE CEASE AND DESIST ORDER WAS VACATED ON MAY 3, 2019.

Allegations: WITHOUT ADMITTING OR DENYING THE FINANCIAL REGULATORY AUTHORITY'S (FINRA) FINDINGS, VALIC FINANCIAL ADVISORS, INC. ("FIRM") SUBMITTED TO A LETTER OF ACCEPTANCE, WAIVER AND CONSENT ("AWC") FOR THE PURPOSE OF PROPOSING A SETTLEMENT OF THE ALLEGED RULE VIOLATIONS DESCRIBED BELOW. FINRA ALLEGED VIOLATIONS OF NASD RULE 3010(A)/(B) AND FINRA RULES 2010, 2330(C), (D) AND (E), 3110(A)/(B) RELATING TO ALLEGED FAILURES TO (1) HAVE A REASONABLE SYSTEM OR PROCESS/PROCEDURES DESIGNED TO ADDRESS, ANALYZE OR REVIEW THE CONFLICTS OF INTEREST IN ITS COMPENSATION PROGRAM OR TO ENSURE THAT BALANCED DISCLOSURES WAS PROVIDED TO THE INVESTORS REGARDING SUCH COMPENSATION PROGRAM, (2) TO MAINTAIN ADEQUATE SYSTEMS AND PROCEDURES TO SUPERVISE THE SALE OF VARIABLE ANNUITIES TO RETAIL BROKERAGE CUSTOMERS, (3) MAINTAIN SUPERVISORY PROCEDURES AND TRAINING MATERIALS THAT PROVIDE REGISTERED REPRESENTATIVES AND PRINCIPALS GUIDANCE OR SUITABILITY CONSIDERATIONS FOR SALES OF DIFFERENT VARIABLE ANNUITY SHARE CLASSES, INCLUDING L-SHARE VARIABLE ANNUITIES, (4) ENFORCE SUPERVISORY PROCEDURES REQUIRING THE THAT CERTAIN EMAILS FLAGGED BY ITS EMAIL SURVEILLANCE SYSTEM BE REVIEWED BY DESIGNATED FIRM SUPERVISORS, (5) ESTABLISH A REASONABLE SYSTEM AND PROCEDURES TO SUPERVISE ITS COMPLAINT REPORTING RESPONSIBILITIES (ALLEGED VIOLATION OF FINRA RULES 4530, 1122 AND 2010 AND FINRA BY-LAWS ARTICLE V, SECTION 2 AND 3), AND (6) FAILED TO ISSUE ACCOUNT NOTICES AT ACCOUNT OPENING AND THEN ON 36-MONTH INTERVALS FOR CERTAIN BROKERAGE CUSTOMERS (ALLEGED VIOLATIONS OF SECTION 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 17A-3(A)(17)(I)(B)(1) THEREUNDER, NASD RULES 3110 AND 2110, AND FINRA RULES 4511 AND 2010). Status: Final Sanction Detail: WITHOUT ADMITTING OR DENYING THE FINDINGS, VALIC FINANCIAL ADVISORS, INC. ("VFA") CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS. THEREFORE, VFA WAS CENSURED AND FINED $1,750,000. Summary: WITHOUT ADMITTING OR DENYING THE FINANCIAL REGULATORY AUTHORITY'S (FINRA) FINDINGS, VALIC FINANCIAL ADVISORS, INC. ("FIRM") SUBMITTED TO A LETTER OF ACCEPTANCE, WAIVER AND CONSENT ("AWC") FOR THE PURPOSE OF PROPOSING A SETTLEMENT OF THE ALLEGED RULE VIOLATIONS DESCRIBED BELOW. FINRA ALLEGED VIOLATIONS OF NASD RULE 3010(A)/(B) AND FINRA RULES 2010, 2330(C), (D) AND (E), 3110(A)/(B) RELATING TO ALLEGED FAILURES TO (1) HAVE A REASONABLE SYSTEM OR PROCESS/PROCEDURES DESIGNED TO ADDRESS, ANALYZE OR REVIEW THE CONFLICTS OF INTEREST IN ITS COMPENSATION PROGRAM OR TO ENSURE THAT BALANCED DISCLOSURES WAS PROVIDED TO THE INVESTORS REGARDING SUCH COMPENSATION PROGRAM, (2) TO MAINTAIN ADEQUATE SYSTEMS AND PROCEDURES TO SUPERVISE THE SALE OF VARIABLE ANNUITIES TO RETAIL BROKERAGE CUSTOMERS, (3) MAINTAIN SUPERVISORY PROCEDURES AND TRAINING MATERIALS THAT PROVIDE REGISTERED REPRESENTATIVES AND PRINCIPALS GUIDANCE OR SUITABILITY CONSIDERATIONS FOR SALES OF DIFFERENT VARIABLE ANNUITY SHARE CLASSES, INCLUDING L-SHARE VARIABLE ANNUITIES, (4) ENFORCE SUPERVISORY PROCEDURES REQUIRING THE THAT CERTAIN EMAILS FLAGGED BY ITS EMAIL SURVEILLANCE SYSTEM BE REVIEWED BY DESIGNATED FIRM SUPERVISORS, (5) ESTABLISH A REASONABLE SYSTEM AND PROCEDURES TO SUPERVISE ITS COMPLAINT REPORTING RESPONSIBILITIES (ALLEGED VIOLATION OF FINRA RULES 4530, 1122 AND 2010 AND FINRA BY-LAWS ARTICLE V, SECTION 2 AND 3), AND (6) FAILED TO ISSUE ACCOUNT NOTICES AT ACCOUNT OPENING AND THEN ON 36-MONTH INTERVALS FOR CERTAIN BROKERAGE CUSTOMERS (ALLEGED VIOLATIONS OF SECTION 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 17A-3(A)(17)(I)(B)(1) THEREUNDER, NASD RULES 3110 AND 2110, AND FINRA RULES 4511 AND 2010).

Allegations: ON JUNE 3, 2019, WITHOUT ADMITTING OR DENYING ANY FINDINGS OF FACT OR CONCLUSIONS OF LAW, THE FIRM SETTLED A MATTER WITH THE SECURITIES ENFORCEMENT BRANCH ("SEB") OF THE HAWAII DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS. AS PART OF THE SETTLEMENT, THE FIRM ENTERED INTO A CONSENT ORDER WITH THE SEB (THE "CONSENT ORDER"), WHICH STATES THAT THE FIRM FAILED TO SUPERVISE A REGISTERED REPRESENTATIVE WHO HAD SUBMITTED A TRANSACTION WITHOUT PROPER CUSTOMER AUTHORIZATION. PURSUANT TO THE CONSENT ORDER, THE FIRM PAID A FINE OF $10,000. Status: Final Sanction Detail: ON JUNE 3, 2019, WITHOUT ADMITTING OR DENYING ANY FINDINGS OF FACT OR CONCLUSIONS OF LAW, THE FIRM SETTLED A MATTER WITH THE SECURITIES ENFORCEMENT BRANCH ("SEB") OF THE HAWAII DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS. AS PART OF THE SETTLEMENT, THE FIRM ENTERED INTO A CONSENT ORDER WITH THE SEB (THE "CONSENT ORDER"), WHICH STATES THAT THE FIRM FAILED TO SUPERVISE A REGISTERED REPRESENTATIVE WHO HAD SUBMITTED A TRANSACTION WITHOUT PROPER CUSTOMER AUTHORIZATION. PURSUANT TO THE CONSENT ORDER, THE FIRM PAID A FINE OF $10,000. Summary: ON JUNE 3, 2019, WITHOUT ADMITTING OR DENYING ANY FINDINGS OF FACT OR CONCLUSIONS OF LAW, THE FIRM SETTLED A MATTER WITH THE SECURITIES ENFORCEMENT BRANCH ("SEB") OF THE HAWAII DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS. AS PART OF THE SETTLEMENT, THE FIRM ENTERED INTO A CONSENT ORDER WITH THE SEB (THE "CONSENT ORDER"), WHICH STATES THAT THE FIRM FAILED TO SUPERVISE A REGISTERED REPRESENTATIVE WHO HAD SUBMITTED A TRANSACTION WITHOUT PROPER CUSTOMER AUTHORIZATION. PURSUANT TO THE CONSENT ORDER, THE FIRM PAID A FINE OF $10,000.

Allegations: IN SEPTEMBER 2021, THE VARIABLE ANNUITY LIFE INSURANCE COMPANY ("VALIC") PAID A $230,820.00 ADMINISTRATIVE FINE TO THE NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES TO RESOLVE ALLEGED VIOLATIONS ARISING OUT OF THE STATE'S ROUTINE MARKET CONDUCT EXAMINATION OF THE COMPANY'S INDIVIDUAL AND GROUP ANNUITY BUSINESSES, COVERING THE TIME PERIOD OF JANUARY 1, 2012 TO DECEMBER 31, 2016. Status: Final Sanction Detail: TOTAL AMOUNT PAID: $230,820.00 PAID ON 09/17/2021. THE FULL FINE AMOUNT WAS LEVIED AGAINST THE VARIABLE ANNUITY LIFE INSURANCE COMPANY ("VALIC") WITH NO PORTION OF THE FINE WAIVED. Summary: IN SEPTEMBER 2021, THE VARIABLE ANNUITY LIFE INSURANCE COMPANY ("VALIC") PAID A $230,820.00 ADMINISTRATIVE FINE TO THE NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES TO RESOLVE ALLEGED VIOLATIONS ARISING OUT OF THE STATE'S ROUTINE MARKET CONDUCT EXAMINATION OF THE COMPANY'S INDIVIDUAL AND GROUP ANNUITY BUSINESSES, COVERING THE TIME PERIOD OF JANUARY 1, 2012 TO DECEMBER 31, 2016.

Allegations: ON APRIL 6, 2016, VALIC FINANCIAL ADVISORS, INC. ("VFA") FILED AN INSURANCE AGENCY APPLICATION ON BEHALF OF VFA IN THE STATE OF OKLAHOMA. DUE TO AN ADMINISTRATIVE ERROR, THE APPLICATION OMITTED CERTAIN FINRA REGULATORY ACTIONS. VFA AMENDED ITS APPLICATION ON JUNE 3. ON JUNE 14, THE STATE ISSUED AN ADMINISTRATIVE FINE AGAINST VFA IN THE AMOUNT OF $300 FOR OMITTING THE REGULATORY EVENT IN ITS APPLICATION. Status: Final Sanction Detail: $300 ADMINISTRATIVE FINE. Summary: ON APRIL 6, 2016, VALIC FINANCIAL ADVISORS, INC. ("VFA") FILED AN INSURANCE AGENCY APPLICATION ON BEHALF OF VFA IN THE STATE OF OKLAHOMA. DUE TO AN ADMINISTRATIVE ERROR, THE APPLICATION OMITTED CERTAIN FINRA REGULATORY ACTIONS. VFA AMENDED ITS APPLICATION ON JUNE 3. ON JUNE 14, THE STATE ISSUED AN ADMINISTRATIVE FINE AGAINST VFA IN THE AMOUNT OF $300 FOR OMITTING THE REGULATORY EVENT IN ITS APPLICATION.

Allegations: ON SEPTEMBER 5, 2024, THE VARIABLE ANNUITY LIFE INSURANCE COMPANY PAID A $16,000 VOLUNTARY FORFEITURE TO THE STATE OF VERMONT DEPARTMENT OF FINANCIAL REGULATION TO RESOLVE THE DEPARTMENT'S FINDING OF A VIOLATION OF V.S.A. § 2435(B)(3) FOR FAILURE TO NOTIFY THE DEPARTMENT OF A DATA BREACH FOR A VERMONT CONSUMER WITHIN 14 DAYS OF THE DATE THE NOTICE TO CONSUMERS, WHICHEVER IS EARLIER. Status: Final Sanction Detail: TOTAL AMOUNT PAID: $16,000 PAID ON SEPTEMBER 5, 2024. THE FULL AMOUNT WAS LEVIED AGAINST THE VARIABLE ANNUITY LIFE INSURANCE COMPANY WITH NO PORTION OF THE FINE WAIVED. Summary: ON SEPTEMBER 5, 2024, THE VARIABLE ANNUITY LIFE INSURANCE COMPANY PAID A $16,000 VOLUNTARY FORFEITURE TO THE STATE OF VERMONT DEPARTMENT OF FINANCIAL REGULATION TO RESOLVE THE DEPARTMENT'S FINDING OF A VIOLATION OF V.S.A. § 2435(B)(3) FOR FAILURE TO NOTIFY THE DEPARTMENT OF A DATA BREACH FOR A VERMONT CONSUMER WITHIN 14 DAYS OF THE DATE THE NOTICE TO CONSUMERS, WHICHEVER IS EARLIER.