<PAGE>
File Nos. 333-12507 and 811-7827
As filed with the Securities and Exchange Commission on February 24, 1999
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
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Registration Statement Under the Securities Act of 1933 [ ]
Pre-Effective Amendment No. [ ]
---
Post-Effective Amendment No. 2 [x]
---
and/or
Registration Statement Under the Investment Company Act of 1940 [ ]
Amendment No. 4___ [x]
(Check appropriate box or boxes.)
RetireMAP Variable Account
(Exact Name of Registrant)
United Investors Life Insurance Company
(Name of Depositor)
2001 Third Avenue South
Birmingham, Alabama 35233
(Address of Depositor's Principal Executive Office)
Depositor's Telephone Number: (205) 325-4300
Name and Address of Agent for Service: Copy to:
John H. Livingston, Esquire Frederick R. Bellamy, Esquire
United Investors Life Insurance Company Sutherland Asbill & Brennan LLP
2001 Third Avenue South 1275 Pennsylvania Avenue, N.W.
Birmingham, Alabama 35233 Washington, D.C. 20004-2415
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It is proposed that this filing will become effective (check appropriate box):
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[ ] on ________ pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a) (1) of Rule 485
[x] on April 30, 1999 pursuant to paragraph (a) (1) of Rule 485
If appropriate, check the following box:
[ ] this Post-Effective Amendment designates a new effective date for
a previously filed Post-Effective Amendment.
Title of Securities Being Registered: Variable Annuity Contracts
<PAGE>
Prospectus
May 1, 1999
Please read this prospectus carefully before investing, and keep it for
future reference. It contains important information about the RetireMAPSM
variable annuity policy.
To learn more about the policy, you may want to look at the Statement of
Additional Information dated May 1, 1999 (known as the "SAI"). For a free copy
of the SAI, contact us at:
United Investors Life Insurance Co.
Administrative Office
P. O. Box 219065
Dallas, Texas 75221-9065
Telephone: (800) 453-1271
United Investors has filed the SAI with the U.S. Securities and Exchange
Commission (the "SEC") and has incorporated it by reference into this
prospectus. The SAI's table of contents appears on page 34 of this prospectus.
The SEC maintains an Internet website (http://www.sec.gov) that contains the
SAI, material incorporated by reference, and other information.
Variable annuity policies involve certain risks, and you may lose some or
all of your investment.
. We do not guarantee how any of the investment divisions will perform.
. The policy is not a deposit or obligation of any bank, and no bank endorses
or guarantees the policy.
. Neither the U.S. Government nor any federal agency insures your investment in
the policy.
RetireMAPSM
VARIABLE ANNUITY
DEFERRED VARIABLE ANNUITY POLICY
issued by
United Investors Life Insurance Company
through
RetireMAP Variable Account
The policy has 23 funding choices--one fixed account (paying a guaranteed
minimum fixed rate of interest) and 22 variable investment divisions which
invest in the following mutual fund portfolios:
AIM Variable Insurance Funds, Inc.
. Growth Fund
. Value Fund
Dreyfus Variable Investment Fund
. Capital Appreciation Portfolio
. Growth and Income Portfolio
. Quality Bond Portfolio
. Small Cap Portfolio
Federated Insurance Series
. American Leaders Fund II
. Equity Income Fund II
. Fund for U.S. Government Securities II
. Prime Money Fund II
INVESCO Variable Investment Funds, Inc.
. Dynamics Portfolio
. High Yield Portfolio
. Industrial Income Portfolio
MFS(R) Variable Insurance Trust
. Emerging Growth Series
. Growth with Income Series
. Research Series
. Utilities Series
Scudder Variable Life Investment Fund
. Global Discovery Portfolio
. International Portfolio
Warburg Pincus Trust
. International Equity Portfolio
Warburg Pincus Trust II
. Fixed Income Portfolio
. Global Fixed Income Portfolio
Neither the SEC nor any state securities commission has approved or disapproved
these securities or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
<PAGE>
Table of Contents
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<TABLE>
<S> <C>
Summary..................................................................... 1
The Policy................................................................ 1
Annuity Payments.......................................................... 1
Purchasing the Policy..................................................... 1
Funding Choices........................................................... 1
Charges and Deductions.................................................... 2
Taxes..................................................................... 6
Surrender and Partial Withdrawals......................................... 6
Death Benefit............................................................. 6
Other Information......................................................... 6
Inquiries................................................................. 7
United Investors Life Insurance Company..................................... 8
Preparing for Year 2000................................................... 8
Published Ratings......................................................... 8
RetireMAP Variable Account.................................................. 8
The Portfolios............................................................ 9
Fund Management and Fees.................................................. 12
Fixed Account............................................................... 14
The Policy.................................................................. 14
Issuance of a Policy...................................................... 14
Purchase Payments......................................................... 15
Allocation of Purchase Payments........................................... 15
Policy Value.............................................................. 15
Variable Account Value.................................................. 15
Fixed Account Value..................................................... 16
Surrender and Partial Withdrawals......................................... 16
Withdrawals............................................................. 16
Automatic Partial Withdrawals........................................... 17
Surrender............................................................... 17
Restrictions Under the Texas ORP and Section 403(b) Plans............... 17
Restrictions Under Other Qualified Policies............................. 18
Transfers................................................................. 18
Before the Retirement Date.............................................. 18
After the Retirement Date............................................... 18
Transfer Procedures..................................................... 18
Dollar Cost Averaging..................................................... 19
Death Benefit............................................................. 19
Basic Death Benefit..................................................... 19
Optional Death Benefit Rider............................................ 19
Payment Procedures...................................................... 20
Required Distributions.................................................... 20
"Free Look" Period........................................................ 21
Charges and Deductions...................................................... 21
Withdrawal Charge......................................................... 21
Waiver of Withdrawal Charges Rider........................................ 22
Annual Contract Maintenance Charge........................................ 23
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
Administration Fee........................................................ 23
Mortality and Expense Risk Charge......................................... 23
Optional Death Benefit Rider Charge....................................... 23
Transaction Charge........................................................ 24
Premium Taxes............................................................. 24
Federal Taxes............................................................. 24
Fund Expenses............................................................. 24
Reduction in Charges for Certain Groups................................... 24
Annuity Payments............................................................ 24
Election of Annuity Payment Method........................................ 24
Retirement Date........................................................... 25
Annuity Payment Methods................................................... 25
Distribution of the Policies................................................ 26
Federal Tax Matters......................................................... 27
Historical Performance Data................................................. 30
Voting Rights............................................................... 31
Legal Proceedings........................................................... 31
Financial Statements........................................................ 31
Condensed Financial Information............................................. 32
Glossary.................................................................... 33
Statement of Additional Information......................................... 34
</TABLE>
iii
<PAGE>
Summary
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This is a summary of some of the more important points that you should know
and consider before purchasing the RetireMAP variable annuity policy.
The Policy
The RetireMAP variable annuity policy lets you invest on a tax-deferred
basis for your retirement or other long-term purposes. Tax deferral allows the
entire amount you have invested to remain in the policy where it can continue
to produce an investment return. Therefore, your money could grow faster than
in a comparable taxable investment where current income taxes would be due each
year.
You may divide your RetireMAP policy value among the fixed account and up to
17 of the 22 variable investment divisions which invest in specified portfolios
of underlying mutual funds. We guarantee the principal and a minimum interest
rate you will receive from the fixed account. However, the value of what you
allocate to the variable investment divisions is not guaranteed. Instead, your
investment in the variable investment divisions will go up or down with the
performance of the particular mutual fund portfolios you select. You may lose
money on investments in the variable investment divisions.
Like most annuity policies, different rules apply to the RetireMAP policy
before and after the retirement date you select for your policy. Before the
retirement date, you may invest more money in your policy. After the retirement
date, you will receive one or more annuity payments. The amount of money you
accumulate in your policy before the retirement date has a major effect on the
size of the payments you receive after the retirement date.
Annuity Payments
On the retirement date, you may apply your policy value to receive fixed
annuity payments, variable annuity payments or a combination. We guarantee that
fixed annuity payments will remain constant throughout the payment period.
However, the amount of each variable annuity payment will go up or down with
the performance of the particular investment divisions you select.
You may choose among the following ways of receiving your annuity payments:
1. Payments for the lifetime of an individual you select (the annuitant).
2. Payments for the lifetime of the survivor of two individuals you select (the
annuitant and joint annuitant).
3. Payments for the lifetime of an individual (the annuitant), but guaranteed
to continue for at least 10 or 20 years.
Other annuity payment methods are available with our written consent.
Purchasing the Policy
You can purchase a "qualified" policy (one that qualifies for favorable
Federal income tax treatment), or you can purchase a policy on a non-qualified
tax basis. For a non-qualified policy, the minimum initial investment is
$2,000. For a qualified policy, the initial investment must be at least $1,200,
although we will accept installments of at least $100 per month through a bank
draft authorization or a pre-approved group payment method. You can make more
investments of at least $100 each before the retirement date.
Funding Choices
You may allocate each new investment (and your existing policy value) among
variable investment divisions which invest in the following 22 mutual fund
portfolios:
AIM Variable Insurance Funds, Inc.
. Growth Fund
. Value Fund
Dreyfus Variable Investment Fund
. Capital Appreciation Portfolio
. Growth and Income Portfolio
. Quality Bond Portfolio
. Small Cap Portfolio
1
<PAGE>
Federated Insurance Series
. American Leaders Fund II
. Equity Income Fund II
. Fund for U.S. Government Securities II
. Prime Money Fund II
INVESCO Variable Investment Funds, Inc.
. Dynamics Portfolio
. High Yield Portfolio
. Industrial Income Portfolio
MFS(R) Variable Insurance Trust
. Emerging Growth Series
. Growth with Income Series
. Research Series
. Utilities Series
Scudder Variable Life Investment Fund
. Global Discovery Portfolio
. International Portfolio
Warburg Pincus Trust
. International Equity Portfolio
Warburg Pincus Trust II
. Fixed Income Portfolio
. Global Fixed Income Portfolio
In most states, you may also allocate purchase payments and your policy
value to the fixed account. We guarantee your fixed account allocation will
earn at least 4% interest per year.
Charges and Deductions
We do not deduct any charges from your purchase payments when received,
except for any premium taxes charged in your location.
We make two types of deductions from your policy value for certain
administrative expenses. First, we deduct a flat charge of $35 a year from each
policy that does not hold cumulative purchase payments (less any withdrawals)
of at least $30,000. Second, we deduct a daily charge at an effective annual
rate of 0.15% of the assets of each variable investment division.
If you surrender your policy or make a cash withdrawal, we may deduct a
withdrawal charge. This withdrawal charge is 7% of purchase payments withdrawn
that are less than two years old. It decreases to 3% on purchase payments that
are five years old. There is no withdrawal charge on purchase payments six or
more years old. We also do not deduct a withdrawal charge on the first 10% of
policy value withdrawn each policy year. This 10% portion is the free
withdrawal amount.
For each withdrawal in excess of twelve in any one policy year, we deduct a
transaction charge of no more than $20.
We also deduct a daily charge from the variable investment divisions to
compensate us for certain mortality and expense risks. This charge is at an
effective annual rate of 1.25% of assets. In addition, investment management
fees, operating expenses, and in some cases 12b-1 fees are deducted from each
portfolio of the underlying mutual funds.
There is an annual charge of 0.17% of the average death benefit amount for
the optional death benefit.
The following tables summarize these charges. (We may also deduct premium
tax charges.)
Policy Owner Transaction Expenses:
<TABLE>
<S> <C>
Maximum Transaction Charge (for each withdrawal in excess of 12 per
policy year).......................................................... $20.00
</TABLE>
Withdrawal Charge (% of purchase payment being withdrawn):
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Years <1 1 2 3 4 5 6+
- ------------------------------------------------------------------------------------------------------
% 7 7 6 6 4 3 0
</TABLE>
<TABLE>
<S> <C>
Annual Contract Maintenance Charge....................................... $35.00
</TABLE>
Variable Account Annual Expenses:
<TABLE>
<S> <C>
Administration Fee........................................................ 0.15%
Mortality and Expense Risk Charge......................................... 1.25%
-----
Total Variable Account Annual Expenses.................................... 1.40%
</TABLE>
Optional Death Benefit Rider Charge
<TABLE>
<S> <C>
(% of average death benefit amount)....................................... 0.17%
</TABLE>
2
<PAGE>
Portfolio Annual Expenses(/1/)
(% of net assets of the portfolio)
<TABLE>
<CAPTION>
Management 12b-1 Other Total Portfolio
Fee(/2/) Fees Expenses(/2/)(/3/) Expenses(/2/)
(after any (after any (after waiver or
Portfolio waiver) reimbursement) reimbursement)
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<S> <C> <C> <C> <C>
AIM Variable Insurance
Funds, Inc.(/4/)
. AIM V.I. Growth Fund 0.65% None 0.08% 0.73%
. AIM V.I. Value Fund 0.62% None 0.08% 0.70%
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Dreyfus Variable
Investment Fund
. Dreyfus Capital
Appreciation Portfolio 0.75% None 0.05% 0.80%
. Dreyfus Growth and
Income Portfolio 0.75% None 0.05% 0.80%
. Dreyfus Quality Bond
Portfolio 0.65% None 0.10% 0.75%
. Dreyfus Small Cap
Portfolio 0.75% None 0.03% 0.78%
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Federated Insurance
Series
. Federated American
Leaders Fund II 0.66% None 0.19% 0.85%
. Federated Equity
Income Fund II 0.00% None 0.85% 0.85%
. Federated Fund for
U.S. Government
Securities II 0.15% None 0.65% 0.80%
. Federated Prime Money
Fund II 0.30% None 0.50% 0.80%
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INVESCO Variable
Investment Funds, Inc.
. INVESCO VIF--Dynamics
Portfolio 0.60% None 0.30% 0.90%
. INVESCO VIF--High
Yield Portfolio 0.60% None 0.23% 0.83%
. INVESCO VIF--
Industrial Income
Portfolio 0.75% None 0.16% 0.91%
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MFS(R) Variable
Insurance Trust
. MFS Emerging Growth
Series 0.75% None 0.12% 0.87%
. MFS Growth with Income
Series 0.75% None 0.25% 1.00%
. MFS Research Series 0.75% None 0.13% 0.88%
. MFS Utilities Series 0.75% None 0.25% 1.00%
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Scudder Variable Life
Investment Fund
. Scudder Global
Discovery Portfolio 0.92% 0.25% 0.65% 1.82%
. Scudder International
Portfolio 0.86% 0.25% 0.18% 1.29%
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Warburg Pincus Trust
. Warburg Pincus
International Equity
Portfolio 1.00% None 0.35% 1.35%
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Warburg Pincus Trust II
. Warburg Pincus Fixed
Income Portfolio 0.32% None 0.67% 0.99%
. Warburg Pincus Global
Fixed Income Portfolio 0.29% None 0.70% 0.99%
</TABLE>
(/1/) These expenses are deducted directly from the assets of the underlying
mutual fund portfolios and therefore reduce their net asset value. The
investment adviser of each underlying mutual fund supplied the above
information, and we have not independently verified it. See the underlying
mutual funds' prospectuses for more complete information.
(/2/) [Footnote table disclosing fees and expenses before waiver or
reimbursement: 1998 data to be provided when available]
(/3/) Other Expenses are those incurred for the year ended December 31, 1998.
[1998 data to be provided when available]
(/4/) The portfolios of AIM Variable Insurance Funds, Inc. reimburse their
investment adviser for providing, or assuring that participating insurance
companies provide, certain administrative services. The reimbursement is in an
amount up to 0.25% of the average daily net assets of each AIM V.I. portfolio
in excess of its net assets on April 30, 1998.
3
<PAGE>
Examples. The following tables give examples of expenses you might pay, on a
$1,000 investment, assuming 5% annual return on assets.
Example 1 (assuming basic death benefit)
^If you surrender your policy at the end of the applicable time period, you
would pay the following expenses:
<TABLE>
<CAPTION>
Investment Division 1 year 3 years
------------------- ------- -------
<S> <C> <C>
AIM V.I. Growth Fund $ 91.30 $128.38
AIM V.I. Value Fund $ 91.00 $127.47
Dreyfus Capital Appreciation Portfolio $ 92.00 $130.48
Dreyfus Growth and Income Portfolio $ 92.00 $130.48
Dreyfus Quality Bond Portfolio $ 91.50 $128.98
Dreyfus Small Cap Portfolio $ 91.80 $129.88
Federated American Leaders Fund II $ 92.50 $131.99
Federated Equity Income Fund II $ 92.50 $131.99
Federated Fund for U.S. Government Securities II $ 92.00 $130.48
Federated Prime Money Fund II $ 92.00 $130.48
INVESCO VIF--Dynamics Portfolio $ 93.00 $133.49
INVESCO VIF--High Yield Portfolio $ 92.30 $131.39
INVESCO VIF--Industrial Income Portfolio $ 93.10 $133.79
MFS Emerging Growth Series $ 92.70 $132.59
MFS Growth with Income Series $ 94.00 $136.49
MFS Research Series $ 92.80 $132.89
MFS Utilities Series $ 94.00 $136.49
Scudder Global Discovery Portfolio $102.20 $160.87
Scudder International Portfolio $ 96.90 $145.16
Warburg Pincus International Equity Portfolio $ 97.50 $146.95
Warburg Pincus Fixed Income Portfolio $ 93.90 $136.19
Warburg Pincus Global Fixed Income Portfolio $ 93.90 $136.19
</TABLE>
^If you annuitize or do not surrender your policy at the end of the applicable
time period, you would pay the following expenses:
<TABLE>
<CAPTION>
Investment Division 1 year 3 years
------------------- ------- -------
<S> <C> <C>
AIM V.I. Growth Fund $ 21.30 $ 68.38
AIM V.I. Value Fund $ 21.00 $ 67.48
Dreyfus Capital Appreciation Portfolio $ 22.00 $ 70.48
Dreyfus Growth and Income Portfolio $ 22.00 $ 70.48
Dreyfus Quality Bond Portfolio $ 21.50 $ 68.98
Dreyfus Small Cap Portfolio $ 21.80 $ 69.88
Federated American Leaders Fund II $ 22.50 $ 71.99
Federated Equity Income Fund II $ 22.50 $ 71.99
Federated Fund for U.S. Government Securities II $ 22.00 $ 70.48
Federated Prime Money Fund II $ 22.00 $ 70.48
INVESCO VIF--Dynamics Portfolio $ 23.00 $ 73.49
INVESCO VIF--High Yield Portfolio $ 22.30 $ 71.39
INVESCO VIF--Industrial Income Portfolio $ 23.10 $ 73.79
MFS Emerging Growth Series $ 22.70 $ 72.59
MFS Growth with Income Series $ 24.00 $ 76.49
MFS Research Series $ 22.80 $ 72.89
MFS Utilities Series $ 24.00 $ 76.49
Scudder Global Discovery Portfolio $ 32.20 $100.87
Scudder International Portfolio $ 26.90 $ 85.16
Warburg Pincus International Equity Portfolio $ 27.50 $ 86.95
Warburg Pincus Fixed Income Portfolio $ 23.90 $ 76.19
Warburg Pincus Global Fixed Income Portfolio $ 23.90 $ 76.19
</TABLE>
4
<PAGE>
Example 2 (assuming optional death benefit)
^If you surrender your policy at the end of the applicable time period, you
would pay the following expenses:
<TABLE>
<CAPTION>
Investment Division 1 year 3 years
------------------- ------- -------
<S> <C> <C>
AIM V.I. Growth Fund $ 91.30 $131.83
AIM V.I. Value Fund $ 91.00 $130.93
Dreyfus Capital Appreciation Portfolio $ 92.00 $133.94
Dreyfus Growth and Income Portfolio $ 92.00 $133.94
Dreyfus Quality Bond Portfolio $ 91.50 $132.43
Dreyfus Small Cap Portfolio $ 91.80 $133.33
Federated American Leaders Fund II $ 92.50 $135.44
Federated Equity Income Fund II $ 92.50 $135.44
Federated Fund for U.S. Government Securities II $ 92.00 $133.94
Federated Prime Money Fund II $ 92.00 $133.94
INVESCO VIF--Dynamics Portfolio $ 93.00 $136.94
INVESCO VIF--High Yield Portfolio $ 92.30 $134.84
INVESCO VIF--Industrial Income Portfolio $ 93.10 $137.24
MFS Emerging Growth Series $ 92.70 $136.04
MFS Growth with Income Series $ 94.00 $139.93
MFS Research Series $ 92.80 $136.34
MFS Utilities Series $ 94.00 $139.93
Scudder Global Discovery Portfolio $102.20 $164.27
Scudder International Portfolio $ 96.90 $148.58
Warburg Pincus International Equity Portfolio $ 97.50 $150.37
Warburg Pincus Fixed Income Portfolio $ 93.90 $139.63
Warburg Pincus Global Fixed Income Portfolio $ 93.90 $139.63
</TABLE>
^If you annuitize or do not surrender your policy at the end of the applicable
time period, you would pay the following expenses:
<TABLE>
<CAPTION>
Investment Division 1 year 3 years
------------------- ------- -------
<S> <C> <C>
AIM V.I. Growth Fund $ 21.30 $ 71.83
AIM V.I. Value Fund $ 21.00 $ 70.93
Dreyfus Capital Appreciation Portfolio $ 22.00 $ 73.94
Dreyfus Growth and Income Portfolio $ 22.00 $ 73.94
Dreyfus Quality Bond Portfolio $ 21.50 $ 72.43
Dreyfus Small Cap Portfolio $ 21.80 $ 73.33
Federated American Leaders Fund II $ 22.50 $ 75.44
Federated Equity Income Fund II $ 22.50 $ 75.44
Federated Fund for U.S. Government Securities II $ 22.00 $ 73.94
Federated Prime Money Fund II $ 22.00 $ 73.94
INVESCO VIF--Dynamics Portfolio $ 23.00 $ 76.94
INVESCO VIF--High Yield Portfolio $ 22.30 $ 74.84
INVESCO VIF--Industrial Income Portfolio $ 23.10 $ 77.24
MFS Emerging Growth Series $ 22.70 $ 76.04
MFS Growth with Income Series $ 24.00 $ 79.93
MFS Research Series $ 22.80 $ 76.34
MFS Utilities Series $ 24.00 $ 79.93
Scudder Global Discovery Portfolio $ 32.20 $104.27
Scudder International Portfolio $ 26.90 $ 88.58
Warburg Pincus International Equity Portfolio $ 27.50 $ 90.37
Warburg Pincus Fixed Income Portfolio $ 23.90 $ 79.63
Warburg Pincus Global Fixed Income Portfolio $ 23.90 $ 79.63
</TABLE>
These examples reflect the $35 annual contract maintenance charge as a
deduction of 0.13% of assets in the variable investment divisions. These
examples do not reflect any premium tax charges.
These examples are not intended to represent past or future expenses. Actual
expenses may be greater or less than those shown. The assumed 5% return is
purely hypothetical. Actual returns (investment performance) will vary, and may
be more or less than 5%.
5
<PAGE>
Taxes
You are generally required to pay taxes on amounts earned in a non-qualified
policy only when they are withdrawn. When you take distributions or withdrawals
from your policy, taxable earnings are considered to be paid out first,
followed by your investment in the policy.
You are generally required to pay taxes on all amounts withdrawn from a
qualified policy because purchase payments were made with before-tax dollars.
Distributions from the policy are taxed as ordinary income. You may owe a
10% Federal tax penalty for distributions or withdrawals taken before age 59
1/2.
Surrender and Partial Withdrawals
You may surrender the policy before the retirement date for the surrender
value, which is the policy value less any withdrawal charge, the annual
contract maintenance charge, the optional death benefit rider charge, and any
premium tax charge.
You may make a partial withdrawal of cash from your policy value. The
withdrawal must be at least $100, and the policy value remaining after the
withdrawal must be at least $1,000.
You cannot surrender the policy or make a withdrawal after the retirement
date.
Death Benefit
The policy provides a death benefit if a policy owner dies before the
retirement date. We will pay the death benefit in a lump sum or as a series of
annuity payments. The policy always provides at least a basic death benefit,
and you may purchase the optional death benefit rider.
Basic Death Benefit: The basic death benefit is the greatest of:
(a) your policy value at the time the death benefit is paid;
(b) the total purchase payments you have invested in the policy (less any
withdrawals you have made and withdrawal charges); or
(c) the highest policy value on the sixth policy anniversary and every second
policy anniversary thereafter prior to the policy owner's 76th birthday (or
the annuitant's 76th birthday if the policy owner is not a natural person),
plus any purchase payments you have invested since then, less any
withdrawals you have made and withdrawal charges you have incurred since
then.
Optional Death Benefit Rider: If you purchase the optional death benefit
rider, we will enhance the death benefit to be the greatest of (a), (b), or (c)
above, or:
(d) the total purchase payments you have invested in the policy (less any
withdrawals you have made and withdrawal charges), increasing daily at the
rate of 5% per year until the first anniversary date following the policy
owner's 76th birthday (or the annuitant's 76th birthday if the policy owner
is not a natural person). This is subject to a maximum of 200% of purchase
payments.
There is an extra charge for this rider.
Other Information
Free Look: You may cancel the policy by returning it within 10 days after
you receive it. When we receive the returned policy, we will cancel it and
generally will refund your policy value plus any charges deducted. In some
states, we will refund the full amount of your purchase payments instead. (The
"free look" period may be longer in some states.)
Automatic Partial Withdrawals: You may arrange for automatic partial
withdrawals of the same dollar amount to be made every month, three months, six
months, or twelve months. This dollar amount must be at least $100, but in any
one policy year automatic partial withdrawals cannot exceed 10% of your policy
value. These withdrawals may be taxable, and you may also incur a 10% Federal
tax penalty before age 59 1/2.
Waiver of Withdrawal Charges Rider: If your policy includes the waiver of
withdrawal charges rider, we will waive withdrawal charges
6
<PAGE>
under certain conditions if the policy owner or the owner's spouse becomes
confined in a qualified nursing home, qualified hospital, or qualified hospice
care program.
Transfers: Before the retirement date, you may transfer all or part of your
policy value among the 23 funding choices up to twelve times per policy year.
However, you may transfer out of the fixed account only once each policy year
(except dollar cost averaging transfers). Other restrictions apply, especially
to fixed account transfers.
After the retirement date, the annuitant may reallocate his or her annuity
interest among the variable investment divisions or from the variable
investment divisions to the fixed account once each policy year. However, after
the retirement date, transfers from the fixed account to the variable
investment divisions are not permitted.
Dollar Cost Averaging: Before the retirement date, you may have automatic
monthly transfers made from the fixed account or the money market investment
division to as many as 17 of the other variable investment divisions. Certain
minimums and other restrictions apply.
Financial Information: Condensed financial information for the variable
investment divisions begins at page 32 of this prospectus. Our financial
statements, and full financial statements for the variable investment
divisions, are in the Statement of Additional Information.
Inquiries
If you have questions about your policy or need to make changes, contact
your financial representative who sold you the policy, or contact us at:
United Investors Life Insurance Company
Administrative Office
P. O. Box 219065
Dallas, Texas 75221-9065
Telephone: (800) 453-1271
- --------------------------------------------------------------------------------
The policy is not available in all states. This prospectus does not offer to
sell securities in any jurisdiction where they cannot be lawfully sold. You
should rely only on the information contained in this prospectus or that we
have referred you to. We have not authorized anyone to provide you with
information that is different.
NOTE: Because this is a summary, it does not contain all the information
that may be important to you. You should read this entire prospectus and the
underlying mutual funds' prospectuses carefully before investing. For qualified
policies, the requirements of a particular retirement plan, an endorsement to
the policy, or limitations or penalties imposed by the Internal Revenue Code
may impose limits or restrictions on purchase payments, surrenders,
distributions or benefits, or on other provisions of the policy. This
prospectus does not describe these limitations or restrictions. (See "Federal
Tax Matters".)
7
<PAGE>
United Investors Life Insurance Company
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
We were incorporated in the State of Missouri on August 17, 1981, as the
successor to a company of the same name established in Missouri on September
27, 1961. We are a stock life insurance company, indirectly owned by Torchmark
Corporation. Our principal business is selling life insurance and annuity
contracts. We are admitted to do business in the District of Columbia and all
states except New York.
Preparing for Year 2000
Existing computer programs of many businesses were developed with a two-
digit identification of the year of a transaction without consideration of the
upcoming change in century or millennium in the year 2000. This means that "00"
is used to identify the year, and computers may interpret this incorrectly as
the year 1900 instead of 2000. If this fact were ignored, many computer
programs could fail or produce erroneous results, creating considerable
uncertainty and potentially adversely affecting operations or business.
We have been in the process of modifying our computer system and
applications for the year 2000. We substantially completed this project during
1998, and will conduct final testing in 1999. We have primarily used internal
staff for this conversion but are also using outside consultants where
necessary. The cost of this project, which is immaterial to our financial
position, is expensed as incurred.
As a part of our activities, we rely on and communicate electronically with
other financial institutions and various other organizations which have
computer systems that may not be year 2000 compliant. Where possible, we are
verifying that these other business systems are now year 2000 compliant or are
in the process of becoming compliant. If these systems are not compliant, the
potential interruptions to our operations and cost to our business may be
significant.
Published Ratings
We may publish (in advertisements, sales literature, and reports to policy
owners) the ratings and other information assigned to us by one or more
independent insurance industry analysts or rating organizations such as A. M.
Best Company, Standard & Poor's Corporation, and Weiss Research, Inc. These
ratings reflect the organization's current opinion of an insurance company's
financial strength and operating performance in comparison to the norms for the
insurance industry; they do not reflect the strength, performance, risk, or
safety (or lack thereof) of the variable investment options. The claims-paying
ability rating as measured by Standard & Poor's is an opinion of an operating
insurance company's financial capacity to meet its obligations under its
outstanding insurance and annuity policies.
RetireMAP Variable Account
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- --------------------------------------------------------------------------------
The variable investment divisions are "sub-accounts" or divisions of the
RetireMAP Variable Account (the "Variable Account"). We established the
Variable Account as a segregated asset account on September 20, 1996. The
Variable Account will receive and invest the purchase payments allocated to the
variable investment divisions. Our Variable Account is currently divided into
22 investment divisions. Each division invests exclusively in shares of a
single mutual fund portfolio. Income, gains and losses arising from the assets
of each investment division are credited to or charged against that division
without regard to income, gains or losses from any other investment division of
the Variable Account or arising out of any other business we may conduct.
The assets in the Variable Account are our property. However, the assets
allocated to the variable investment divisions under the policy are not
chargeable with liabilities arising out of any other business that we may
conduct.
8
<PAGE>
The Variable Account is registered with the SEC as a unit investment trust
under the Investment Company Act of 1940. It meets the definition of a
"separate account" under the Federal securities law. However, the SEC does not
supervise the management or investment practices or policies of the Variable
Account or us.
The Portfolios
Each investment division of the Variable Account invests exclusively in
shares of a particular mutual fund portfolio. The assets of each portfolio are
separate from the assets of the other portfolios. Thus, each portfolio operates
separately, and the income, gains, or losses of one portfolio have no effect on
the investment performance of any other portfolio.
The investment objectives and policies of each mutual fund portfolio are
summarized below. There is no assurance that any of the portfolios will achieve
their stated objectives. More detailed information, including a description of
risks, is in the prospectuses of the portfolios.
The following 22 mutual fund portfolios are currently offered to policy
owners through the investment divisions of the Variable Account:
<TABLE>
<CAPTION>
Portfolio Investment Objective and Certain Policies
- ---------------------------------------------------------------------------------------------
<S> <C>
AIM V.I. AIM V.I. Growth Fund seeks growth of capital principally through
Growth Fund investment in common stocks of seasoned and better capitalized
companies considered by AIM to have strong earnings momentum.
Current income will not be an important criterion of investment
selection, and any such income should be considered incidental. It
is anticipated that common stocks will be the principal form of
investment by the portfolio.
- ---------------------------------------------------------------------------------------------
AIM V.I. AIM V.I. Value Fund seeks long-term growth of capital by investing
Value Fund primarily in equity securities judged by AIM to be undervalued
relative to the current or projected earnings of the companies
issuing the securities, or relative to current market values of
assets owned by the companies issuing the securities or relative to
the equity market generally. Income is a secondary objective and
would be satisfied principally from the income (interest and
dividends) generated by the common stocks, convertible bonds and
convertible preferred stocks that make up the portfolio.
- ---------------------------------------------------------------------------------------------
Dreyfus Capital Dreyfus Capital Appreciation Portfolio seeks long-term capital
Appreciation Portfolio growth consistent with the preservation of capital; current income
is a secondary investment objective. This portfolio invests
primarily in common stocks of domestic and foreign issuers.
- ---------------------------------------------------------------------------------------------
Dreyfus Growth and Dreyfus Growth and Income Portfolio seeks long-term capital growth,
Income Portfolio current income and growth of income, consistent with reasonable
investment risk. This portfolio invests primarily in equity
securities, debt securities and money market instruments of
domestic and foreign issuers.
- ---------------------------------------------------------------------------------------------
Dreyfus Quality Bond Dreyfus Quality Bond Portfolio seeks the maximum amount of current
Portfolio income to the extent consistent with the preservation of capital
and the maintenance of liquidity. This portfolio invests
principally in debt obligations of corporations, the U.S.
Government and its agencies and instrumentalities, and U.S. major
banking institutions.
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Portfolio Investment Objective and Certain Policies
- -----------------------------------------------------------------------------------------------
<S> <C>
Dreyfus Small Cap Dreyfus Small Cap Portfolio seeks to maximize capital appreciation.
Portfolio This portfolio invests primarily in common stocks of domestic and
foreign issuers. This portfolio will be particularly alert to
emerging smaller-sized companies which are believed to be
characterized by new or innovative products, services or processes
which should enhance prospects for growth in future earnings.
- -----------------------------------------------------------------------------------------------
Federated American Federated American Leaders Fund II seeks long-term growth of
Leaders Fund II capital. Its secondary objective is to provide income. The
portfolio pursues its investment objectives by investing, under
normal circumstances, at least 65% of its total assets in common
stock of "blue chip" companies.
- -----------------------------------------------------------------------------------------------
Federated Equity Income Federated Equity Income Fund II seeks above average income and
Fund II capital appreciation. It attempts to achieve its objectives by
investing at least 65% of its assets in income-producing equity
securities.
- -----------------------------------------------------------------------------------------------
Federated Fund for U.S. Federated Fund for U.S. Government Securities II seeks current
Government Securities II income by investing in a professionally managed, diversified
portfolio limited to U.S. government securities (i.e., securities
issued or guaranteed as to payment of principal and interest by the
U.S. government, its agencies or instrumentalities).
- -----------------------------------------------------------------------------------------------
Federated Prime Money Federated Prime Money Fund II seeks current income consistent with
Fund II stability of principal and liquidity. The portfolio pursues its
investment objective by investing exclusively in money market
instruments maturing in 397 days or less.
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INVESCO VIF--Dynamics INVESCO VIF--Dynamics Portfolio seeks appreciation of capital
Portfolio through aggressive investment policies. The portfolio invests
primarily in common stocks of U.S. companies traded on national
securities exchanges and over the counter. See "Risk Factors" in
the INVESCO VIF--Dynamics Portfolio prospectus for the various
types of risks that are involved with the portfolio.
- -----------------------------------------------------------------------------------------------
INVESCO VIF--High Yield INVESCO VIF--High Yield Portfolio seeks a high level of current
Portfolio income by investing substantially all of its assets in lower rated
bonds and other debt securities and in preferred stock. See "Risk
Factors" in the INVESCO VIF--High Yield Portfolio prospectus for a
description of the risks involved in investing in lower-rated
bonds. The portfolio pursues its investment objective through
investment in a variety of long-term, intermediate-term and short-
term bonds. Potential capital appreciation is a factor in the
selection of investments, but is secondary to the portfolio's
primary objective.
- -----------------------------------------------------------------------------------------------
INVESCO VIF--Industrial INVESCO VIF--Industrial Income Portfolio seeks the best possible
Income Portfolio current income while following sound investment practices. Capital
growth potential is a secondary consideration in the selection of
portfolio securities. The portfolio normally invests at least 65%
of its total assets in dividend-paying common stocks. Up to 10% of
the portfolio's total assets may be invested in equity securities
that do not pay regular dividends.
- -----------------------------------------------------------------------------------------------
MFS Emerging Growth MFS Emerging Growth Series seeks long-term growth of capital.
Series Dividend and interest income from portfolio securities, if any, is
incidental to the portfolio's investment objective of long-term
growth of capital. The portfolio's policy is to invest primarily in
common stocks of companies that are early in their life cycles but
which are believed to have the potential to become major
enterprises (emerging growth companies). The portfolio may also
invest in more-established companies whose earnings growth is
expected to accelerate due to unique opportunities.
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Portfolio Investment Objective and Certain Policies
- -----------------------------------------------------------------------------------------------
<S> <C>
MFS Growth with Income MFS Growth with Income Series seeks reasonable current income and
Series long-term growth of capital and income. Under normal market
conditions, the portfolio will invest at least 65% of its assets in
equity securities of companies that are believed to have long-term
prospects for growth and income. Consistent with its investment
objective and policies described above, the portfolio may also
invest up to 75% (and generally expects to invest not more than
15%) of its net assets in foreign securities (including emerging
market securities and Brady Bonds) which are not traded on a U.S.
exchange.
- -----------------------------------------------------------------------------------------------
MFS Research Series MFS Research Series seeks long-term growth of capital and future
income. The portfolio is an equity portfolio combining U.S. and
foreign stocks of all sizes and many industries. The portfolio is
managed by a committee of investment research analysts, rather than
by an individual manager. Each analyst presents his or her "best
idea." Industry and sector weightings are then reviewed by the
committee as a whole.
- -----------------------------------------------------------------------------------------------
MFS Utilities Series MFS Utilities Series seeks capital growth and current income
(income above that available from a portfolio invested entirely in
equity securities). This portfolio takes a balanced approach to
investing. The portfolio, under normal circumstances, will have at
least 65% of its assets (but up to 100% at the discretion of the
manager) allocated between equity and debt securities of both
domestic and foreign companies, primarily in the utilities
industry. The manager has the flexibility to invest up to 35% of
the portfolio's net assets in foreign securities.
- -----------------------------------------------------------------------------------------------
Scudder Global Discovery Scudder Global Discovery Portfolio seeks above-average capital
Portfolio appreciation over the long term by investing primarily in the
equity securities of small companies located throughout the world.
It generally invests in small, rapidly growing companies that offer
the potential for above-average returns relative to larger
companies, yet are frequently overlooked and thus undervalued by
the market.
- -----------------------------------------------------------------------------------------------
Scudder International Scudder International Portfolio seeks long-term growth of capital
Portfolio principally from a diversified portfolio of foreign equity
securities. It invests in companies, wherever organized, which do
business primarily outside the United States. It invests primarily
in equity securities of established companies, which are listed on
foreign exchanges.
- -----------------------------------------------------------------------------------------------
Warburg Pincus Warburg Pincus International Equity Portfolio seeks long-term
International Equity capital appreciation. It pursues its investment objective by
Portfolio investing primarily in a broadly diversified portfolio of equity
securities of companies, wherever organized, that have their
principal business activities and interests outside the United
States.
- -----------------------------------------------------------------------------------------------
Warburg Pincus Fixed Warburg Pincus Fixed Income Portfolio seeks total return consistent
Income Portfolio with prudent investment management. It pursues its investment
objective by investing, under normal market conditions, at least
65% of its total assets in fixed income securities.
- -----------------------------------------------------------------------------------------------
Warburg Pincus Global Warburg Pincus Global Fixed Income Portfolio seeks total return
Fixed Income Portfolio consistent with prudent investment management, consisting of a
combination of interest income, currency gains and capital
appreciation. It pursues its objective by investing, under normal
market conditions, at least 65% of its total assets in fixed income
obligations of governmental and corporate issuers denominated in
various currencies.
</TABLE>
11
<PAGE>
Each mutual fund portfolio is designed to provide an investment vehicle for
variable annuity and variable life insurance contracts issued by various
insurance companies. For more information about the risks associated with the
use of the same funding vehicle for both variable annuity and variable life
insurance contracts of various insurance companies, see the prospectuses of the
portfolios which accompany this prospectus.
These mutual fund portfolios are not available for purchase directly by the
general public, and are not the same as other mutual fund portfolios with very
similar or nearly identical names that are sold directly to the public.
However, the investment objectives and policies of certain portfolios available
under the policy are very similar to the investment objectives and policies of
other portfolios that are or may be managed by the same investment adviser or
manager. Nevertheless, the investment performance and results of the portfolios
available under the policy may be lower, or higher, than the investment results
of such other (publicly available) portfolios. There can be no assurance, and
no representation is made, that the investment results of any of the portfolios
available under the policy will be comparable to the investment results of any
other mutual fund portfolio, even if the other portfolio has the same
investment adviser or manager and the same investment objectives and policies,
and a very similar name.
We may receive payments or revenues from some or all of the mutual fund
portfolios or their investment advisers.
Fund Management and Fees
AIM Variable Insurance Funds, Inc. AIM Advisors, Inc. ("AIM") is the
investment adviser of AIM Variable Insurance Funds, Inc. and provides
investment advisory services to its portfolios. AIM is a wholly owned
subsidiary of AIM Management Group Inc. which is an indirect wholly owned
subsidiary of AMVESCAP PLC. Each portfolio pays AIM a fee for managing its
investments at the following annual rates:
<TABLE>
<CAPTION>
Advisory Fee
Portfolio Annual Rate
--------- -----------------
(% of net assets)
<S> <C>
AIM V.I. Growth Fund:
--first $250 million of net assets......................... 0.65%
--net assets over $250 million............................. 0.60%
AIM V.I. Value Fund:
--first $250 million of net assets......................... 0.65%
--net assets over $250 million............................. 0.60%
</TABLE>
Dreyfus Variable Investment Fund. The Dreyfus Corporation ("Dreyfus") is the
investment adviser of Dreyfus Variable Investment Fund and provides investment
advisory services to its portfolios. Dreyfus is a wholly-owned subsidiary of
Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon Bank
Corporation. Fayez Sarofim & Co. is the sub-investment adviser of the Capital
Appreciation Portfolio, for which it provides investment advisory assistance
and day-to-day management. Each portfolio pays investment management fees at
the following annual rates:
<TABLE>
<CAPTION>
Advisory Fee
Portfolio Annual Rate
--------- -----------------
(% of net assets)
<S> <C>
Dreyfus Capital Appreciation Portfolio..................... 0.75%
Dreyfus Growth and Income Portfolio........................ 0.75%
Dreyfus Quality Bond Portfolio............................. 0.65%
Dreyfus Small Cap Portfolio................................ 0.75%
</TABLE>
Federated Insurance Series. Federated Advisers, Inc. is the investment
adviser of Federated Insurance Series and provides investment advisory services
to its portfolios. Federated Advisers is a subsidiary of Federated Investors,
Inc., whose voting shares are owned by a trust whose trustees are the Chairman
of
12
<PAGE>
Federated Investors, his wife, and his son. Each portfolio pays Federated
Advisers a fee for managing its investments at the following annual rates:
<TABLE>
<CAPTION>
Advisory Fee
Portfolio Annual Rate
--------- -----------------
(% of net assets)
<S> <C>
Federated American Leaders Fund II......................... 0.75%
Federated Equity Income Fund II............................ 0.75%
Federated Fund for U.S. Government Securities II........... 0.60%
Federated Prime Money Fund II.............................. 0.50%
</TABLE>
INVESCO Variable Investment Funds, Inc. INVESCO Funds Group, Inc. ("IFG") is
the investment adviser of the INVESCO Variable Investment Funds, Inc. and
provides investment advisory services to its portfolios. IFG is an indirect
wholly-owned subsidiary of AMVESCAP PLC. Each portfolio pays IFG a fee for
managing its investments at the following annual rates:
<TABLE>
<CAPTION>
Advisory Fee
Portfolio Annual Rate
--------- -----------------
(% of net assets)
<S> <C>
INVESCO VIF--Dynamics Portfolio............................ 0.60%
INVESCO VIF--High Yield Portfolio.......................... 0.60%
INVESCO VIF--Industrial Income Portfolio................... 0.75%
</TABLE>
MFS(R) Variable Insurance Trust. Massachusetts Financial Services Company
("MFS") is the investment adviser of MFS(R) Variable Insurance Trust and
provides investment advisory services to its portfolios. MFS is a subsidiary of
Sun Life of Canada (U.S.), which in turn is a wholly-owned subsidiary of Sun
Life Assurance Company of Canada. Each portfolio pays MFS a fee for managing
its investments at the following annual rates:
<TABLE>
<CAPTION>
Advisory Fee
Portfolio Annual Rate
--------- -----------------
(% of net assets)
<S> <C>
MFS Emerging Growth Series................................. 0.75%
MFS Growth with Income Series.............................. 0.75%
MFS Research Series........................................ 0.75%
MFS Utilities Series....................................... 0.75%
</TABLE>
Scudder Variable Life Investment Fund. Scudder Kemper Investments, Inc.
("Scudder"), is the investment adviser of Scudder Variable Life Investment Fund
and provides investment advisory services to its portfolios. Zurich Insurance
Company owns approximately 70% of Scudder, with the balance owned by Scudder's
officers and employees. Each portfolio pays Scudder a fee for managing its
investments at the following annual rates:
<TABLE>
<CAPTION>
Advisory Fee
Portfolio Annual Rate
--------- -----------------
(% of net assets)
<S> <C>
Scudder Global Discovery Portfolio......................... 0.975%
Scudder International Portfolio:
--first $500 million of net assets......................... 0.875%
--net assets over $500 million............................. 0.775%
</TABLE>
Warburg Pincus Trust and Warburg Pincus Trust II. Warburg Pincus Asset
Management, Inc. ("Warburg"), is the investment adviser of Warburg Pincus Trust
and Warburg Pincus Trust II and provides investment advisory services to their
portfolios. Warburg is indirectly controlled by Warburg Pincus & Co. ("WP &
Co."), which has no business other than being a holding company for Warburg and
its affiliates.
13
<PAGE>
Lionel I. Pincus, the managing partner of WP & Co., may be deemed to control
both WP & Co. and Warburg. Each portfolio pays Warburg a fee for managing its
investments at the following annual rates:
<TABLE>
<CAPTION>
Advisory Fee
Portfolio Annual Rate
--------- -----------------
(% of net assets)
<S> <C>
Warburg Pincus International Equity Portfolio.............. 1.00%
Warburg Pincus Fixed Income Portfolio...................... 0.50%
Warburg Pincus Global Fixed Income Portfolio............... 1.00%
</TABLE>
Fixed Account
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The funding choice guaranteeing your principal and a minimum fixed rate of
interest is called the "fixed account." It is not registered under the
Securities Act of 1933, and it is not registered as an investment company under
the Investment Company Act of 1940. Accordingly, neither the fixed account nor
any interests therein are subject to the provisions or restrictions of these
Federal securities laws, and the disclosure regarding the fixed account has not
been reviewed by the staff of the SEC.
The fixed account is a part of our general account, which includes all of
our assets other than those in any separate account. We guarantee that we will
credit interest at a rate of not less than 4% per year to policy value
allocated to the fixed account. We may credit interest at a rate in excess of
4% per year, but any excess interest credited will be determined in our sole
discretion. The policy owner assumes the risk that interest credited to the
fixed account may not exceed 4% per year. The fixed account may not be
available in all states.
As the policy owner, you determine the allocation of policy value to the
fixed account. Before the retirement date, you may transfer all or part of the
policy value in the fixed account to one or more of the variable investment
divisions once per policy year. After the retirement date, transfers out of the
fixed account are not allowed. After the retirement date, values in the
variable investment divisions may be transferred to the fixed account only once
per policy year. (See "Transfers".)
The Policy
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The policy is a deferred variable annuity. Your rights and benefits as owner
of the policy are described below and in the policy. However, we reserve the
right to modify the policy to comply with any law or regulation, or to give you
the benefit of any law or regulation, where permitted by state law.
Issuance of a Policy
If you wish to purchase a policy, you must complete an application and send
it to our administrative office. We will generally accept your application if
it conforms to our requirements, but we reserve the right to reject any
application or purchase payment. If the application can be accepted in the form
received, the initial purchase payments will be applied within two business
days after the latter of receipt of the application or receipt of the initial
purchase payment. If the initial purchase payment cannot be applied within five
business days after receipt because the application is incomplete, we will
contact you with an explanation for the delay. Your initial purchase payment
will be returned at that time unless you consent to our retaining and applying
it as soon as the remaining application requirements are met. Both you (the
policy owner) and the annuitant (if different) must be less than 85 years old
when you purchase a policy. The policy will only become effective when we
accept your application.
14
<PAGE>
Purchase Payments
The initial purchase payment for non-qualified policies must be at least
$2,000. For qualified policies, the initial purchase payment must be at least
$1,200. Additional purchase payments may be in amounts of $100 or more. As an
exception for qualified policies, if purchase payments will be made by means of
a bank draft authorization or a group payment method approved in advance by us,
we will accept installments of $100 per month for the first year.
Allocation of Purchase Payments
You determine in the application how the initial purchase payment will be
allocated among the variable investment divisions and the fixed account. You
may use any whole percentage to allocate your purchase payments, from 0% to
100%.
Between the date that we receive the initial purchase payment and your
policy's effective date, we will credit interest on the purchase payment equal
to the interest paid by the money market investment division.
If we receive an additional purchase payment, we will allocate the purchase
payment among the funding choices according to your instructions. These will be
the allocations you specify in the application, or new instructions you
provide.
Your policy value will vary with the investment performance of the variable
investment divisions you select. You bear the entire risk for amounts allocated
to the variable investment divisions. You should periodically review your
allocations of policy value in light of all relevant factors, including market
conditions and your overall financial planning requirements.
Policy Value
Your policy value prior to the retirement date is equal to:
(a) your variable account value; plus
(b) your fixed account value.
Variable Account Value. Your variable account value is not guaranteed. It
equals the sum of the values of the variable investment divisions under the
policy. The value of each variable investment division is calculated on each
business day. Business days generally are Monday through Friday, except
holidays when the New York Stock Exchange is closed.
On your policy's effective date, your variable account value is equal to the
portion of the initial purchase payment allocated to the variable investment
divisions (plus any accrued interest from the date we received the initial
purchase payment to the policy's effective date). On any business day
thereafter, the value of each variable investment division under your policy
equals:
(a) the value of the investment division on the previous business day,
increased or decreased by its investment experience and daily charge;
plus
(b) the amount of any purchase payments allocated to the investment
division since the previous business day; plus
(c) the amount of any transfers into the investment division since the
previous business day; minus
(d) the amount of any withdrawals (including any withdrawal charge or
transaction charge) from the investment division since the previous
business day; minus
15
<PAGE>
(e) the amount of any transfers out of the investment division since the
previous business day; minus
(f) the portion of the annual contract maintenance charge (and optional
death benefit rider charge, if applicable) allocated to the investment
division since the previous business day; minus
(g) the portion of any deduction for premium taxes allocated to the
investment division since the previous business day.
Deductions (f) and (g) will be made from each investment division in the
same proportion that the value of the investment division bears to your entire
policy value.
Fixed Account Value. On any business day, your fixed account value is equal
to:
(a) the value of the fixed account on the previous business day; plus
(b) the sum of all purchase payments allocated to the fixed account since
the previous business day; plus
(c) any amounts transferred into the fixed account since the previous
business day; plus
(d) total interest credited since the previous business day; less
(e) any amounts transferred out of the fixed account since the previous
business day; less
(f) the portion of any withdrawals, withdrawal charges, and transaction
charges allocated to the fixed account since the previous business day;
less
(g) the portion of the optional death benefit rider charge (if applicable)
allocated to the fixed account since the previous business day; less
(h) the portion of any deduction for premium taxes allocated to the fixed
account since the previous business day.
Surrender and Partial Withdrawals
Withdrawals. You may make a partial withdrawal from your policy value prior
to the retirement date. You must send a written request to our administrative
office in a form acceptable to us. A partial withdrawal must be for at least
$100, and your remaining policy value must be at least $1,000 after a partial
withdrawal. If your policy value would be less than $1,000, we will treat the
request for a partial withdrawal as a request for complete surrender of your
policy. We will ordinarily pay a withdrawal within seven days of receipt of
your written request (unless the check for your purchase payment has not yet
cleared your bank). We may defer payment of any amounts from the fixed account
for up to six months. If we defer payment for more than 30 days, we will pay
interest on the amount deferred at a rate not less than 4% per year.
You can specify that the partial withdrawal should be made from a particular
funding choice (or choices). If you do not specify this, then the partial
withdrawal will be made from the funding choices in the same proportions that
their values bear to your total policy value.
You may request up to 12 withdrawals per policy year without a transaction
charge. If you request more than these 12 withdrawals, there will be a $20
transaction charge (or 2% of the amount withdrawn, if less) for each additional
withdrawal during that policy year. Also, withdrawal charges of up to 7% may
apply to withdrawal amounts in a policy year that exceed the free withdrawal
amount. (See "Withdrawal Charge" and "Transaction Charge".) Any transaction
charge or withdrawal charge will be deducted from your remaining policy value,
or from the amount paid if your remaining policy value is insufficient. No
withdrawals may be made after the retirement date.
16
<PAGE>
Partial withdrawals may be subject to a 10% Federal tax penalty and to
income tax. (See "Federal Tax Matters".)
Automatic Partial Withdrawals. You may also establish automatic partial
withdrawals by submitting a one-time written request. These automatic partial
withdrawals of a fixed dollar amount may be requested on a monthly, quarterly,
semi-annual or annual basis. The minimum amount you can withdraw is $100. The
maximum amount of automatic partial withdrawals in any one policy year is the
free withdrawal amount. Automatic partial withdrawals are only available before
the retirement date.
Automatic partial withdrawals are subject to all the other policy provisions
and terms. If an additional withdrawal is made from a policy participating in
automatic partial withdrawals, the automatic partial withdrawals will terminate
automatically and may be resumed only on or after the next policy anniversary.
Automatic partial withdrawals may be subject to a 10% Federal tax penalty
and to income tax. (See "Federal Tax Matters".)
Surrender. You may surrender your policy for its policy value--less any
withdrawal charge, the annual contract maintenance charge, the optional death
benefit rider charge (if applicable), and any deductions for premium taxes--by
sending a written request to our administrative office. (The withdrawal charge,
described below, is only applicable if a surrender occurs in the first six
policy years following receipt of a purchase payment.) A surrender will
ordinarily be paid within seven days of receipt of your written request (unless
the check for a purchase payment has not yet cleared your bank). Your policy
will terminate as of the date we receive your written request for surrender.
Surrenders are generally taxable transactions, and may be subject to a 10%
Federal tax penalty. (See "Federal Tax Matters".) The policy may not be
surrendered after the retirement date.
Restrictions Under the Texas ORP and Section 403(b) Plans. The Texas
Educational Code does not permit participants in the Texas Optional Retirement
Program ("ORP") to withdraw or surrender their interest in a variable annuity
contract issued under the ORP except upon:
(a) termination of employment in the Texas public institutions of higher
education;
(b) retirement; or
(c) death.
Accordingly, a participant in the ORP (or the participant's estate if the
participant has died) will be required to obtain a certificate of termination
from the employer or a certificate of death before the account can be redeemed.
Similar restrictions apply to variable annuity contracts used as funding
vehicles for Section 403(b) retirement plans. Section 403(b) of the Internal
Revenue Code provides for tax-deferred retirement savings plans for employees
of certain non-profit and educational organizations. As required by Section
403(b), any policy used for a Section 403(b) plan will prohibit distributions
of:
(a) elective contributions made in years beginning after December 31, 1988;
(b) earnings on those contributions; and
(c) earnings on amounts attributable to elective contributions held as of
the end of the last year beginning before January 1, 1989.
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However, distributions of such amounts will be allowed upon:
(a) death of the employee;
(b) reaching age 59 1/2;
(c) separation from service;
(d) disability; or
(e) financial hardship (except that income attributable to elective
contributions may not be distributed in the case of hardship).
Restrictions Under Other Qualified Policies. Other restrictions on
surrenders or with respect to the election, commencement, or distributions of
benefits may apply under qualified policies or under the terms of the plans for
which qualified policies are issued.
Transfers
Before the Retirement Date. You may transfer all or a part of your fixed
account value to one or more of the variable investment divisions once per
policy year before the retirement date. However, this restriction does not
apply to automatic monthly transfers of a preselected dollar amount from the
fixed account to a variable investment division. (See "Dollar Cost Averaging".)
The amount transferred from the fixed account to a variable investment division
may not exceed the greater of:
(a) 25% of the prior policy anniversary's fixed account value; or
(b) the amount of the prior policy year's transfer.
You may transfer all or part of your variable account value out of a
variable investment division (to one or more of the other variable investment
divisions or to the fixed account) up to 12 times per policy year. However, if
a transfer has been made out of the fixed account, then no transfer into the
fixed account may be made for six months from the transfer date.
The value remaining in the fixed account or each variable investment
division from which a transfer is requested must be at least $250. If the value
remaining would be less than $250, we will transfer the total value in the
fixed account or variable investment division from which you have requested the
transfer.
After the Retirement Date. Transfers from the fixed account to the variable
investment divisions are not allowed after the retirement date.
After the retirement date, the annuitant may transfer values among the
variable investment divisions once per policy year and may transfer values from
the variable investment divisions to the fixed account once per policy year.
Transfer Procedures. Transfers may be made by a written request to our
administrative office or by calling us if a written authorization for telephone
transfers is on file. We have the authority to honor any telephone transfer
request believed to be authentic. We employ reasonable procedures to confirm
that instructions communicated by telephone are genuine. For example, you may
be required to use a personal identification number to initiate a telephone
transfer. We will not be liable for the consequences of a fraudulent telephone
transfer request we believe to be authentic when we have followed those
procedures. As a result, you bear the risk of loss arising from such a
fraudulent request if you give us authorization for telephone transfers.
We will make each transfer, without the imposition of any fee or charge, at
the end of the business day during which we receive a valid, complete transfer
request. We may suspend or modify this transfer privilege at any time.
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Dollar Cost Averaging
Before the retirement date, you may authorize automatic transfers of a fixed
dollar amount from the fixed account or the money market investment division to
as many as 17 of the other variable investment divisions. Automatic transfers
will be made monthly on the day of the month you select. (If that day of the
month does not fall on a business day, then transfers will be made on the next
following business day.) Transfers will be made at the unit values determined
on the date of each transfer.
The minimum automatic transfer amount is $100. If the transfer is to be made
into more than one variable investment division, a minimum of $25 must be
transferred into each variable investment division selected.
Participation in the automatic transfer program does not guarantee a greater
profit, nor does it protect against loss in declining markets. You should
consider your ability to continue the program through all market conditions.
Automatic dollar cost averaging transfers will not be counted as transfers for
purposes of the 12-transfer limit specified in "Transfers" above.
Death Benefit
The policy pays a death benefit to the beneficiary named in the policy if a
policy owner dies before the retirement date while the policy is in force. (If
no owner of a policy is a natural person, the death benefit is payable if an
annuitant dies before the retirement date.) The policy provides a basic death
benefit, and an optional death benefit rider is available for an extra charge.
Basic Death Benefit. Under the policy without the optional death benefit
rider, the death benefit is the greatest of:
(a) the policy value;
(b) the total purchase payments made, adjusted for any amounts withdrawn
and any withdrawal charges; or
(c) the highest of the policy values on the sixth policy anniversary and
every second policy anniversary thereafter prior to the policy
anniversary following the policy owner's 76th birthday (or the
annuitant's 76th birthday if the policy owner is not a natural person),
plus any purchase payments made since then, adjusted for any amounts
withdrawn and any withdrawal charges since then.
Adjustment for amounts withdrawn and withdrawal charges will reduce the death
benefit under (b) and (c) above in the same proportion that they reduced the
policy value on the date of the withdrawal. The death benefit under (c) above
will not increase on or after the policy anniversary following the policy
owner's 76th birthday (or the annuitant's 76th birthday if the policy owner is
not a natural person).
Optional Death Benefit Rider. This rider is optional, and is available for
an additional annual charge of 0.17% of the average death benefit. However,
this rider is not available if the policy owner is over age 70. If you have
purchased this rider for your policy, then the death benefit is the greatest of
(a), (b), or (c) above, or:
(d) the total purchase payments made, less any withdrawals and withdrawal
charges, accumulated daily at a rate equivalent to 5% per year, from
the date such amount is allocated or withdrawn, to the policy
anniversary following the policy owner's 76th birthday (or the
annuitant's 76th birthday if the policy owner is not a natural person),
subject to a maximum of 200% of purchase payments.
The death benefit under (d) above will not increase on or after the policy
anniversary following the policy owner's 76th birthday (or the annuitant's 76th
birthday if the policy owner is not a natural person).
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The optional death benefit rider will terminate on the earliest of:
(a) the date the policy is surrendered, terminated or exchanged;
(b) the retirement date; or
(c) the date your written request to terminate this rider is received at
our administrative office.
Payment Procedures. Upon receiving due proof of death, we will pay the death
benefit proceeds to the beneficiary in a lump sum or under one of the annuity
payment methods. (See "Annuity Payments".) However, we will not compute the
amount of the death benefit until the date it is paid, and we cannot pay the
death benefit until we receive both due proof of death and instructions on how
to pay it (that is, as a lump sum or applied under one of the annuity payment
methods). If an annuitant or an owner dies after the retirement date, the
amount payable, if any, will be as provided in the annuity payment method then
in effect.
If an annuitant dies before the retirement date and if that annuitant is
also the owner or a joint owner of the policy (or any owner is not a natural
person), then special rules (governing distribution of death benefit proceeds
in the event of the death of an owner) shall apply. (See "Required
Distributions" below.) If (i) an annuitant dies before the retirement date,
(ii) that annuitant was not an owner, and (iii) all owners are natural persons,
then the owner may name a new annuitant (subject to our age limitations) and
the death benefit will not be payable. If the owner does not name a new
annuitant, the owner will automatically become the annuitant and the death
benefit will not be payable.
If an owner dies before the retirement date, the entire death benefit
proceeds must be distributed within five years after the date of death. If the
beneficiary chooses to receive any of these proceeds as an annuity,
distributions must commence within one year after the date of death and must be
distributed over the beneficiary's lifetime or over a period not extending
beyond the beneficiary's life expectancy.
If the beneficiary is the deceased owner's spouse, then the spouse may elect
to continue the policy in force (and be treated as the original policy owner)
instead of receiving the death benefit proceeds. If the beneficiary elects to
continue the policy in this manner, then although the beneficiary does not have
a right to receive the death benefit proceeds, we will increase the policy
value so that it equals the amount of the death benefit (if greater).
As far as permitted by law, the death benefit proceeds under the policy will
not be subject to any claim of the beneficiary's creditors.
Required Distributions
In order to be treated as an annuity contract for Federal income tax
purposes, the Internal Revenue Code requires any non-qualified policy to
provide that:
(a) if any owner dies before the retirement date, then the entire interest
in the policy will be distributed within five years after the date of
that owner's death; and
(b) if any owner dies on or after the retirement date but before the time
the entire interest in the policy has been distributed, then the
remaining portion of such interest will be distributed at least as
rapidly as under the method of distribution being used as of the date
of that owner's death.
These requirements will be considered satisfied as to any portion of the
owner's interest that is payable as annuity payments, beginning within one year
of that owner's death, that will be made over the life of the owner's
designated beneficiary or over a period not extending beyond his life
expectancy.
If any owner dies before the retirement date, then ownership of the policy
passes to the owner's designated beneficiary, who then has the right to the
death benefit. If the policy has joint owners and one owner
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dies, then the owner's designated beneficiary is the joint owner. If there is
no joint owner and the owner dies, then the owner's designated beneficiary is
the beneficiary named in the policy.
If the owner's designated beneficiary is the surviving spouse of the owner,
then the policy may be continued with the surviving spouse as the new owner and
no distributions will be required.
If an annuitant is an owner or joint owner and that annuitant dies before
the retirement date, and if the owner's designated beneficiary does not elect
to receive the death benefit in a lump sum at that time, then we will increase
the policy value so that it equals the death benefit amount, if that is higher
than the policy value. This would occur if the owner's designated beneficiary:
(a) elects to delay receipt of the proceeds for up to five years;
(b) is the deceased owner's spouse and elects to continue the policy; or
(c) elects to receive the proceeds as annuity payments, as described above.
Any such increase in the policy value would be paid by us. We will allocate it
to the variable investment divisions and the fixed account in proportion to the
pre-existing policy value, unless instructed otherwise.
The non-qualified policies contain provisions which are intended to comply
with the requirements of the Internal Revenue Code. However, no regulations
interpreting these requirements have been issued. We intend to review such
provisions and modify them if necessary to assure that they comply with the
applicable requirements when clarified by regulation or otherwise.
Other rules may apply to qualified policies.
"Free Look" Period
If for any reason you are not satisfied with the policy, you may return it
to us within 10 days after you receive it. If you cancel the policy within this
10-day "free look" period, we will generally refund the policy value (plus any
charges for premium taxes deducted before purchase payments were allocated to
funding choices) and the policy will be void from its effective date. (In some
states, we will instead refund the full amount of purchase payment received.)
To cancel the policy, you must mail or deliver it either to our administrative
office or to the registered agent who sold it within 10 days after you receive
it. (See "Allocation of Purchase Payments".) The "free look" period may be
longer than 10 days where required by state law.
Charges and Deductions
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We do not deduct any charges from a purchase payment (except for any premium
taxes charged in your location). However, certain other charges are deducted to
compensate us for providing the insurance benefits set forth in the policy, for
administering and distributing the policy, for any applicable taxes, and for
assuming certain risks in connection with the policy. These charges are
described below.
Withdrawal Charge
We may deduct a withdrawal charge if you:
(a) make partial withdrawals under the policy; or
(b) surrender the policy.
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The withdrawal charge is a percent of the purchase payments deemed to be
included in the withdrawal (in the case of a partial withdrawal) or the total
purchase payments (in the case of a surrender), as specified in the following
table of withdrawal charge rates:
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Number of Policy
Anniversaries since 0 1 2 3 4 5 6 or
receipt of Purchase more
Payment:
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Withdrawal Charge 7% 7% 6% 6% 4% 3% none
(% of Purchase Payment):
</TABLE>
There is a "free withdrawal amount" that can be withdrawn without a
withdrawal charge. The free withdrawal amount is 10% of policy value. We
calculate the free withdrawal amount at the time you make the first withdrawal
in a policy year. Amounts withdrawn in excess of the free withdrawal amount may
be subject to the withdrawal charge.
The withdrawal charge is determined by multiplying each purchase payment
deemed included in the withdrawal by the applicable withdrawal charge rate
specified in the table above.
For purposes of calculating the withdrawal charge:
(a) the oldest purchase payments will be treated as the first withdrawn,
newer purchase payments next, and appreciation last;
(b) amounts withdrawn up to the free withdrawal amount will not be
considered a withdrawal of purchase payments; and
(c) if the policy is surrendered, the withdrawal charge will apply to all
purchase payments not previously assessed with a withdrawal charge.
As shown above, the withdrawal charge percentage varies, depending on the
"age" of the purchase payments included in the withdrawal--that is, the number
of policy years since the purchase payment was paid. A withdrawal charge of 7%
applies to purchase payments withdrawn that are less than two years old.
Thereafter the withdrawal charge rate decreases to 3% on purchase payments that
are five years old. Amounts representing purchase payments that are at least
six years old may be withdrawn without charge.
We will deduct the withdrawal charge from the remaining policy value, or
from the amount paid if there is not enough value remaining. The withdrawal
charge partially compensates us for sales expenses, including agent sales
commissions, the cost of printing prospectuses and sales literature,
advertising, and other marketing and sales promotional activities.
The amounts we receive from the withdrawal charge, along with the sales
charge, may not be sufficient to cover distribution expenses. We expect to
recover any deficiency from our general assets (which include amounts derived
from the mortality and expense risk charge, as described below).
Waiver of Withdrawal Charges Rider
We waive the withdrawal charges described above if the owner or the owner's
spouse becomes confined to a nursing home, hospital, or hospice care program,
provided that certain conditions are met. These conditions include:
(a) the waiver of withdrawal charges rider is attached to your policy;
(b) the owner or the owner's spouse is continuously confined to a "Nursing
Home," "Hospital," or "Hospice Care Program" for a combined stay of at
least 30 days within a 35-day period;
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(c) the confinement must have totally occurred after the policy's effective
date; and
(d) written notice and satisfactory proof of confinement are received no
later than 60 days after confinement ends.
Waiver of withdrawal charges is subject to all of the conditions and
provisions of the rider. (See your policy.) There is no charge for this rider.
Also, it is not available in all states.
Annual Contract Maintenance Charge
We deduct an annual policy fee of $35 from each policy, for administering
the policy. This deduction is made from the variable investment divisions in
the same proportion that their values bear to the policy's variable account
value. These expenses include costs of maintaining records, processing death
benefit claims, surrenders, transfers and policy changes, providing reports to
policy owners, and overhead costs. We guarantee not to increase this charge
during the life of the policy. Before the retirement date, this charge is
deducted on each policy anniversary and upon a full surrender of your policy.
We waive this charge on any policy anniversary when at least $30,000 of
cumulative purchase payments (less any withdrawals) have been made under your
policy. After the retirement date, this charge is not deducted.
Administration Fee
We also deduct a daily charge from the investment divisions of the Variable
Account, at an annual rate of 0.15% of the average daily net assets of each
variable investment division, for administering the Variable Account and the
policy. These expenses include costs of maintaining records, processing death
benefit claims, surrenders, transfers and policy changes, providing reports to
policy owners, and overhead costs. We guarantee not to increase this charge
during the life of the policy.
Mortality and Expense Risk Charge
We deduct a daily charge from the variable investment divisions at an
effective annual rate of 1.25% of their average daily net assets. This charge
compensates us for assuming certain mortality and expense risks. No mortality
and expense risk charge is deducted from the fixed account. We may realize a
profit from this charge. However, the level of this charge is guaranteed for
the life of the policy and may not be increased. We will continue to deduct
this charge after the retirement date.
The mortality risk we bear arises in part from our obligation to make
monthly annuity payments regardless of how long all annuitants or any
individual may live. These payments are guaranteed in accordance with the
annuity tables and other provisions contained in the policy. This assures you
that neither the longevity of the annuitant, nor an unanticipated improvement
in general life expectancy, will have any adverse effect on the monthly annuity
payments the annuitant will receive under the policy. Our obligation therefore
relieves the annuitant from the risk that he or she will outlive the funds
accumulated for retirement. The mortality risk also arises in part because of
the risk that the death benefit may be greater than the policy value. We also
assume the risk that other expense charges may be insufficient to cover the
actual expenses we incur.
Optional Death Benefit Rider Charge
If you purchase the optional death benefit rider, we will deduct an annual
charge from the policy for the additional mortality risk. This charge is 0.17%
of the average death benefit amount and is deducted from the variable
investment divisions in the same proportion that their values bear to the
policy's variable account value. We deduct it in full on each policy
anniversary and pro rata on full surrender of the policy or voluntary
termination of the rider. It is not deducted after the retirement date. The
average death benefit amount is the simple average of the death benefit amount
on the current policy anniversary (or the date of surrender) and the preceding
policy anniversary.
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Transaction Charge
You may make up to 12 withdrawals per policy year without a transaction
charge. After the 12th withdrawal in a policy year, a transaction charge will
apply to each additional withdrawal. The transaction charge is $20 or 2% of the
amount withdrawn, whichever is less. We will deduct this charge from the
remaining policy value, or from the amount paid if there is not enough value
remaining.
Premium Taxes
We will deduct a charge for any premium taxes we incur. Depending on state
and local law, premium taxes can be incurred when you make a purchase payment,
when policy value is withdrawn or surrendered, or when annuity payments start.
(The state premium tax rates currently range from 0% to 3.50%. Some local
governments charge additional premium taxes.)
Federal Taxes
Currently no charge is made for Federal income taxes that may be
attributable to the Variable Account. We may, however, make such a charge in
the future. Charges for other taxes, if any, attributable to the Variable
Account may also be made. (See "Federal Tax Matters".)
Fund Expenses
The value of the assets of the variable investment divisions will reflect
the investment management fee and other expenses incurred by the corresponding
mutual fund portfolios in which they invest. (See "Summary--Charges and
Deductions".)
Reduction in Charges for Certain Groups
We may reduce or eliminate the administration fee, annual contract
maintenance charge, or withdrawal charges on policies that have been sold to:
(a) our employees and sales representatives, or those of our affiliates or
distributors of the policy;
(b) our customers or distributors of the policies who are transferring
existing policy values to a policy;
(c) individuals or groups when sales of the policy result in savings of
sales or administrative expenses; or
(d) individuals or groups where purchase payments are paid through an
approved group payment method and where the size and type of the group
results in savings of administrative expenses.
We will not reduce or eliminate the administration fee, annual contract
maintenance charge, or withdrawal charges where such reduction or elimination
will unfairly discriminate against any person.
Annuity Payments
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Election of Annuity Payment Method
As the policy owner, you have the sole right to elect an annuity payment
method in the application. You can also change that election, during your
lifetime and before the retirement date, by written request any time at least
30 days before the retirement date. We may require the exchange of the policy
for a contract covering the method selected.
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Retirement Date
The first annuity payment will be made as of the retirement date. You may
select the retirement date in the application for the policy. If no selection
is made at that time, the retirement date will be the later of the annuitant's
age 85 or 10 years after the policy's effective date, or the date required by
state law. You may change the retirement date by giving us written notice at
least 30 days before the old retirement date (and at least 30 days before the
new retirement date).
A retirement date must be the first day of any calendar month. It must also
be at least one year and one month after the policy's effective date.
Annuity Payment Methods
The policy value as of 14 days before the retirement date (less any premium
taxes) may be applied to annuity payments. They can be fixed annuity payments,
variable annuity payments, or a combination of both.
Fixed annuity payments provide guaranteed annuity payments which remain
fixed in amount throughout the payment period. Variable annuity payments vary
with the investment experience of the variable investment divisions. The dollar
amount of variable annuity payments after the first is not fixed.
Annuity payment methods currently available include:
<TABLE>
<S> <C>
Life Annuity with No This method provides monthly annuity payments during the
Guaranteed Period lifetime of the annuitant. No payment will be made after the
death of the annuitant. Only one payment will be made under
this method if the annuitant dies before the second payment is
due; only two payments will be made if the annuitant dies
before the third payment is due; and so forth.
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Joint Life Annuity This method provides monthly annuity payments during the
Continuing to lifetime of the annuitant and a joint annuitant. Payments will
the Survivor continue to the survivor for the survivor's remaining
lifetime. Only one payment or very few payments will be made
under this method if the annuitant and joint annuitant both
die before or shortly after payments begin.
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Life Annuity with 120 or This method provides monthly annuity payments during the
240 Monthly Payments lifetime of the annuitant. A guaranteed period of 120 or 240
Guaranteed months (10 or 20 years) may be chosen. If the annuitant dies
prior to the end of this guaranteed period, monthly annuity
payments will be made to the beneficiary until the end of the
guaranteed period.
</TABLE>
Other annuity payment methods are currently available with our written consent.
If you have not selected an annuity payment method on the retirement date,
we will make monthly annuity payments during the lifetime of the annuitant with
120 monthly payments guaranteed.
The amount of each annuity payment under the methods described above will
depend on the sex and age of the annuitant (or annuitants) at the time the
first payment is due. The annuity payments may be more or less than the total
purchase payments, and more or less than the policy value, because:
(a) variable annuity payments vary with the investment experience of the
underlying mutual fund portfolios and you therefore bear the investment
risk under variable annuity payments; and
(b) annuitants may die before the actuarially predicted date of death.
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<PAGE>
Therefore, the dollar amount of annuity payments cannot be predicted. The
method of computing the annuity payments is described in more detail in the
Statement of Additional Information.
The duration of the annuity payment guarantee will affect the dollar amount
of each payment. For example, payments guaranteed for 20 years will be less
than payments guaranteed for 10 years.
Whether variable annuity payments decrease, increase, or remain level
depends on whether the net investment performance is worse than the "assumed
investment rate," better than that rate, or equal to that rate. The assumed
investment rate is 4.0% per year. The dollar amount of the variable annuity
payments will decrease if the actual net investment experience of the variable
investment division(s) you select is less than the assumed investment rate. The
dollar amount of the variable annuity payments will increase if the actual net
investment experience exceeds the assumed investment rate. The dollar amount of
the variable annuity payments will stay the same if the actual net investment
experience equals the assumed investment rate.
Fixed annuity payment amounts will be based on our fixed annuity payment
rates in effect on the retirement date. These rates are guaranteed not to be
less than payments based on the 1983 Individual Annuity Mortality Table (set
back one year) with interest at 4.0%. The one-year setback results in lower
annuity payments than if no setback is used.
If the net amount to be applied to an annuity payment method is less than
$2,000, we have the right to pay such amount in one sum. Also, if any payment
would be less than $50, we have the right to reduce the frequency of payment to
an interval that will result in payments of at least $50.
After the retirement date, the policy value may not be withdrawn, nor may
the policy be surrendered. The annuitant will be entitled to exercise any
voting rights and to reallocate the value of his or her interest in the
variable investment divisions. (See "Voting Rights" and "Transfers".)
The policies offered by this prospectus contain life annuity tables that
provide for different benefit payments to men and women of the same age,
although they provide for unisex tables where requested and required by law.
Nevertheless, in accordance with the U.S. Supreme Court's decision in Arizona
Governing Committee v. Norris, in certain employment-related situations,
annuity tables that do not vary on the basis of sex must be used. Accordingly,
if the policy will be used in connection with an employment-related retirement
or benefit plan, you should give consideration, in consultation with your legal
counsel, to the impact of Norris on any such plan before making any
contributions under these policies.
Distribution of the Policies
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MAP Investments Incorporated ("MAP") of 9020 North May Avenue, Suite 290,
Oklahoma City, Oklahoma 73120-4498, is the principal underwriter and the
distributor of the policies. MAP may enter into written sales agreements with
various broker-dealers to aid in the distribution of the policies. A commission
plus bonus compensation may be paid to broker-dealers or agents in connection
with sales of the policies. Bonus compensation will be based on the amount of
purchase payments received.
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Federal Tax Matters
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The following discussion is general and is not intended as tax advice.
We do not intend to address the tax consequences resulting from all
situations in which a person may be entitled to or may receive a distribution
under a policy. Any person concerned about these tax implications should
consult a competent tax advisor before initiating any transaction. This
discussion is based upon our understanding of the present Federal income tax
laws as they are currently interpreted by the Internal Revenue Service. We have
not assessed the likelihood of the continuation of the present Federal income
tax laws or of their current interpretation by the Internal Revenue Service.
Moreover, we have not attempted to consider any applicable state or other tax
laws.
The policy may be purchased on a non-tax-qualified basis ("non-qualified
policy") or as a qualified policy. Qualified policies are designed for use with
retirement plans entitled to special income tax treatment under the Internal
Revenue Code of 1986, as amended (the "Code").
Possible Changes in Taxation. Although the likelihood of legislative change
is uncertain, there is always the possibility that the tax treatment of the
policy could change by legislation or other means (such as U.S. Treasury
Department regulations, Internal Revenue Service revenue rulings, and judicial
decisions). It is possible that any change could be retroactive (that is,
effective prior to the date of the change). You should consult a tax advisor
regarding such developments and their effect on the policy.
Taxation of Annuities in General. The following discussion assumes that the
policy will qualify as an annuity contract for Federal income tax purposes. The
Statement of Additional Information and "Required Distributions" (at page 20 of
this prospectus) describe the requirements necessary to qualify.
Section 72 of the Code governs taxation of annuities in general.
An annuity owner who is a natural person generally is not taxed on increases
in the value of a policy until distribution occurs. Distribution could be
either in the form of a lump sum received by withdrawing all or part of the
cash value (i.e., surrender or partial withdrawal) or in the form of annuity
payments under the annuity payment method elected. For this purpose, the
assignment, pledge, or agreement to assign or pledge any portion of the policy
value generally will be treated as a distribution. The taxable portion of a
distribution (in the form of a lump sum payment or annuity payments) is taxed
as ordinary income.
An owner of any deferred annuity contract who is not a natural person
generally must include in income any increase in the excess of the policy value
over the owner's "investment in the contract" during the taxable year. However,
there are some exceptions to this rule, and you may wish to discuss these with
your tax advisor.
The following discussion applies to policies owned by natural persons.
Withdrawals. In the case of a withdrawal under a qualified policy, a ratable
portion of the amount received is taxable, generally based on the ratio of the
"investment in the contract" to the total policy value. The "investment in the
contract" generally equals the portion, if any, of purchase payments paid with
after-tax dollars (that is, purchase payments that were not excluded from the
individual's gross income). For qualified policies, the "investment in the
contract" can be zero. Special rules may apply to a withdrawal from a qualified
policy.
Generally, in the case of a partial withdrawal under a non-qualified policy
before the retirement date, amounts received are first treated as taxable
income to the extent that the policy value immediately before the withdrawal
exceeds the "investment in the contract" at that time. Any additional amount
withdrawn is not taxable.
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In the case of a full surrender under a non-qualified policy, the amount
received generally will be taxable to the extent it exceeds the "investment in
the contract".
Annuity Payments. Although the tax consequences may vary depending on the
annuity payment method elected under the policy, generally only the portion of
the annuity payment that represents the amount by which the policy value
exceeds the "investment in the contract" will be taxed.
. For variable annuity payments, in general the taxable portion of each
annuity payment (prior to recovery of the "investment in the contract")
is determined by a formula which establishes a specific non-taxable
dollar amount of each annuity payment. This dollar amount is determined
by dividing the "investment in the contract" by the total number of
expected annuity payments.
. For fixed annuity payments, in general there is no tax on the portion of
each annuity payment which reflects the ratio that the "investment in
the contract" bears to the total expected value of annuity payments for
the term of the payments; however, the remainder of each annuity payment
is taxable.
In all cases, after the "investment in the contract" is recovered, the full
amount of any additional annuity payments is taxable.
Penalty Tax. In the case of a distribution from a non-qualified policy,
there may be imposed a Federal penalty tax equal to 10% of the amount treated
as taxable income. In general, however, there is no penalty tax on
distributions:
(a) made on or after the taxpayer attains age 59 1/2;
(b) made as a result of an owner's death or attributable to the taxpayer's
disability; or
(c) received in substantially equal periodic payments as a life annuity.
Other tax penalties may apply to distributions from a qualified policy.
Aggregation of Contracts. All non-qualified deferred annuities entered into
after October 21, 1988 that we (or our affiliates) issued to the same owner
during any calendar year are treated as one annuity contract for purposes of
determining the amount includable in gross income under Section 72(e) of the
Code. In addition, there may be other situations in which the U.S. Treasury
Department may (under its authority to issue regulations or otherwise) conclude
that it would be appropriate to aggregate two or more annuity contracts
purchased by the same owner. Accordingly, you should consult a competent tax
advisor before purchasing more than one annuity contract.
Transfers and Assignments. A transfer or assignment of ownership of a
policy, or designation of an annuitant or other beneficiary who is not also the
owner, may result in certain tax consequences to the policy owner that are not
discussed herein. If you are contemplating any such transfer, assignment or
designation, you should contact a competent tax advisor with respect to the
potential tax effects of such transaction.
Death Benefits. Amounts may be distributed from a policy because of the
death of a policy owner or an annuitant. Generally, such amounts are includable
in the income of the recipient as follows:
(a) if distributed in a lump sum, they are taxed in the same manner as a
full surrender of the policy, as described above; or
(b) if distributed under an annuity payment method, they are taxed in the
same manner as annuity payments, as described above.
28
<PAGE>
Qualified Policies. The tax rules applicable to a qualified policy vary
according to the type of plan and the terms and conditions of the plan. The
following events may cause adverse tax consequences:
(a) contributions in excess of specified limits;
(b) distributions prior to age 59 1/2 (subject to certain exceptions);
(c) distributions that do not conform to specified commencement and minimum
distribution rules; and
(d) other circumstances specified in the Code.
We make no attempt to provide more than general information about the use of
the policy with the various types of retirement plans. The terms and conditions
of the retirement plans may limit the rights otherwise available to you under a
qualified policy. You are responsible for determining that contributions,
distributions and other transactions with respect to the qualified policy
comply with applicable law. If you are purchasing an annuity contract for use
with any qualified retirement plan, you should consult your legal counsel and
tax advisor regarding the suitability of the annuity contract.
Required Distributions. For qualified plans under Sections 401(a), 403(a),
403(b), and 457, the Code requires that distributions generally must begin by
the later of April 1 of the calendar year following the calendar year in which
the policy owner (or plan participant): (a) reaches age 70 1/2; or (b) retires.
Distributions must be made in a specified form and manner. If the participant
is a "5 percent owner" (as defined in the Code), distributions generally must
begin no later than April 1 of the calendar year following the calendar year in
which the policy owner (or plan participant) reaches age 70 1/2. For Individual
Retirement Annuities (IRAs) described in Section 408 of the Code, distributions
generally must begin no later than April 1 of the calendar year following the
calendar year in which the policy owner (or plan participant) reaches age 70
1/2.
Corporate Pension and Profit-Sharing Plans. Section 401(a) of the Code
permits employers to establish retirement plans for employees, and permits
self-employed individuals to establish retirement plans for themselves and
their employees. Adverse tax or other legal consequences to the plan, to the
participant or to both may result if this policy is purchased by a Section
401(a) plan and later assigned or transferred to any individual. The policy
includes a death benefit that in some cases may exceed the greater of purchase
payments or policy value. The death benefit could be characterized as an
incidental benefit, the amount of which is limited in any pension or profit-
sharing plan. Because the death benefit may exceed this limitation, employers
using the policy in connection with such plans should consult their tax
advisor.
Section 403(b) Plans. Under Code Section 403(b), public school systems and
certain tax-exempt organizations may purchase annuity contracts for their
employees. Generally, payments to Section 403(b) annuity contracts will be
excluded from the gross income of the employee, subject to certain limitations.
However, these payments may be subject to FICA (Social Security) taxes. The
policy includes a death benefit that in some cases may exceed the greater of
purchase payments or policy value. The death benefit could be characterized as
an incidental benefit, the amount of which is limited in any tax-sheltered
annuity under Section 403(b). Because the death benefit may exceed this
limitation, employers using the policy in connection with such plans should
consult their tax advisor. Under Section 403(b) annuity contracts, the
following amounts may only be distributed upon death of the employee,
attainment of age 59 1/2, separation from service, disability, or financial
hardship:
(a) elective contributions made in years beginning after December 31, 1988;
(b) earnings on those contributions; and
(c) earnings in such years on amounts held as of the last year beginning
before January 1, 1989.
In addition, income attributable to elective contributions may not be
distributed in the case of hardship.
29
<PAGE>
Individual Retirement Annuities. Section 408 of the Code limits the amount
which may be contributed to an IRA each year to the lesser of $2,000 or 100% of
the policy owner's adjusted gross income. These contributions may be deductible
in whole or in part depending on the individual's income. The limit on the
amount contributed to an IRA does not apply to distributions from certain other
types of qualified plans that are "rolled over" on a tax-deferred basis into an
IRA. Amounts in the IRA (other than non-deductible contributions) are taxed
when distributed from the IRA. Distributions prior to age 59 1/2 (unless
certain exceptions apply) are subject to a 10% penalty tax. The Internal
Revenue Service has not addressed in a ruling of general applicability whether
a death benefit provision such as the provision in the policy meets IRA
qualification requirements.
Deferred Compensation Plans. Section 457 of the Code provides for certain
deferred compensation plans available with respect to service for state
governments, local governments, political subdivisions, agencies,
instrumentalities and certain affiliates of such entities, and tax-exempt
organizations. These plans are subject to various restrictions on contributions
and distributions. Under non-governmental plans, all amounts are subject to the
claims of general creditors of the employer and depending on the terms of the
particular plan, the employer may be entitled to draw on deferred amounts for
purposes unrelated to its Section 457 plan obligations.
All Policies. As noted above, the foregoing comments about the Federal tax
consequences under the policy are not exhaustive, and special rules apply to
other tax situations not discussed in this prospectus. Further, the Federal tax
consequences discussed herein reflect our understanding of current law, and the
law may change. Federal estate tax and state and local estate, inheritance and
other tax consequences of ownership or receipt of distributions under a policy
depend on the individual circumstances of each policy owner or recipient of a
distribution. A competent tax advisor should be consulted for further
information.
Historical Performance Data
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
We may advertise yields and total returns for the investment divisions of
the Variable Account. In addition, we may advertise the effective yield of the
money market investment division. These figures are historical and are not
intended to indicate future performance.
The yield of the money market investment division is the annualized income
generated by an amount invested in that option over a specified seven-day
period. We assume that the income generated for that seven-day period is
generated each seven-day period over a 52-week period. We show the result as a
percentage of the amount invested. We calculate the effective yield similarly
but assume that the income earned is reinvested every seven days. The
compounding effect of this assumed reinvestment causes the effective yield to
be slightly higher than the yield.
We calculate the total return of investment divisions for portfolios other
than the money market portfolio for various periods of time, including:
(a) one year;
(b) five years;
(c) ten years; and
(d) the period starting when the investment division commenced operations.
The average annual total return is the annual compounded rate of return at
which an initial investment of $1,000 would have grown to reach the redeemable
value of that investment at the end of each of the various measurement periods.
We may also disclose cumulative total returns and returns for various time
periods. We
30
<PAGE>
may disclose performance figures that reflect the withdrawal charge, and also
figures that assume the policy is not surrendered and therefore do not reflect
any withdrawal charge.
We may also disclose performance for periods beginning before the investment
divisions of the Variable Account commenced operations, based upon the actual
performance of the underlying mutual fund portfolios adjusted to reflect the
policy's and the Variable Account's charges and deductions.
The Statement of Additional Information has more information about
performance data calculations.
Voting Rights
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
To the extent required by law, we will vote shares of the mutual fund
portfolios held by the Variable Account according to instructions received from
persons having voting interests in those variable investment divisions. If,
however, the 1940 Act or any regulation thereunder should be amended or if the
present interpretation thereof should change, or if we determine that we are
allowed to vote the mutual fund portfolios' shares in our own right, we may
elect to do so. The mutual funds generally do not hold regular annual
shareholder meetings.
The number of votes that you may direct to us to cast will be calculated
separately for each variable investment division. We will determine that number
by applying your percentage interest, if any, in a particular variable
investment division to the total number of votes attributable to that variable
investment division. Before the retirement date, you hold a voting interest in
each variable investment division to which policy value is allocated. After the
retirement date, the person receiving variable annuity payments has the voting
interest. After the retirement date, the votes attributable to a policy
decrease as the value of the variable investment divisions under your policy
decrease with each variable annuity payment. In determining the number of
votes, fractional shares will be recognized.
The number of votes for a portfolio which are available will be determined
as of the record date established by each mutual fund. Voting instructions will
be solicited by written communication prior to such meeting in accordance with
procedures established by the mutual funds.
Portfolio shares attributable to the policies for which no timely
instructions are received will be voted in proportion to the voting
instructions which are received with respect to all RetireMAP policies
participating in the variable investment division. Voting instructions to
abstain on any item to be voted upon will be applied on a pro rata basis to
reduce the votes eligible to be cast.
Each person having a voting interest in a variable investment division will
receive proxy material, reports and other materials relating to the appropriate
portfolio of the mutual funds.
Legal Proceedings
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
There are no legal proceedings to which the Variable Account is a party or
to which the assets of the Variable Account are subject. We are not involved in
any litigation that is of material importance in relation to our total assets
or that relates to the Variable Account.
Financial Statements
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Our financial statements and those for the Variable Account (as well as the
Auditors' Reports thereon) are in the Statement of Additional Information.
31
<PAGE>
Condensed Financial Information
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The following table gives "per unit" information about the financial history
of each variable investment division since its inception. This information
should be read in conjunction with the Variable Account's financial statements
(including the notes thereto) included in the Statement of Additional
Information.
<TABLE>
<CAPTION>
Accumulation Accumulation Accumulation Units
Unit Value on Unit Value on Outstanding on
Investment Division July 15, 1998 Dec. 31, 1998 December 31, 1998
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
AIM V.I. Growth Fund 1.000 1.069
- -------------------------------------------------------------------------------
AIM V.I. Value Fund 1.000 1.051
- -------------------------------------------------------------------------------
Dreyfus Capital Appreciation
Portfolio 1.000 1.030
- -------------------------------------------------------------------------------
Dreyfus Growth and Income
Portfolio 1.000 1.007
- -------------------------------------------------------------------------------
Dreyfus Quality Bond
Portfolio 1.000 0.971
- -------------------------------------------------------------------------------
Dreyfus Small Cap Portfolio 1.000 0.909
- -------------------------------------------------------------------------------
Federated American Leaders
Fund II 1.000 1.004
- -------------------------------------------------------------------------------
Federated Equity Income Fund
II 1.000 1.027
- -------------------------------------------------------------------------------
Federated Fund for U.S.
Government Securities II 1.000 1.032
- -------------------------------------------------------------------------------
Federated Prime Money Fund II 1.000 1.016
- -------------------------------------------------------------------------------
INVESCO VIF--Dynamics
Portfolio 1.000 0.964
- -------------------------------------------------------------------------------
INVESCO VIF--High Yield
Portfolio 1.000 0.943
- -------------------------------------------------------------------------------
INVESCO VIF--Industrial
Income Portfolio 1.000 1.016
- -------------------------------------------------------------------------------
MFS Emerging Growth Series 1.000 1.063
- -------------------------------------------------------------------------------
MFS Growth with Income Series 1.000 1.012
- -------------------------------------------------------------------------------
MFS Research Series 1.000 0.994
- -------------------------------------------------------------------------------
MFS Utilities Series 1.000 1.031
- -------------------------------------------------------------------------------
Scudder Global Discovery
Portfolio 1.000 0.960
- -------------------------------------------------------------------------------
Scudder International
Portfolio 1.000 0.932
- -------------------------------------------------------------------------------
Warburg Pincus International
Equity Portfolio 1.000 0.879
- -------------------------------------------------------------------------------
Warburg Pincus Fixed Income
Portfolio 1.000 1.037
- -------------------------------------------------------------------------------
Warburg Pincus Global Fixed
Income Portfolio 1.000 1.071
</TABLE>
32
<PAGE>
Glossary
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Annuitant The annuitant is the individual whose life expectancy
determines the size of annuity payments and whose actual
lifetime may determine the duration of annuity payments.
- ------------------------------------------------------------------------------------
Beneficiary The beneficiary is the individual or individuals to whom the
death benefit is paid if the annuitant dies before the
retirement date.
- ------------------------------------------------------------------------------------
Business Day A business day is Monday through Friday, except for any
customary U.S. business holiday when the New York Stock
Exchange is not open for trading. Those holidays currently are
New Year's Day, Martin Luther King, Jr. Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day.
- ------------------------------------------------------------------------------------
Joint Annuitant The joint annuitant, if any, is a second individual whose
joint life expectancy with the annuitant determines the size
of annuity payments and whose actual lifetime with the
annuitant may determine the duration of annuity payments.
- ------------------------------------------------------------------------------------
Owner's Designated The owner's designated beneficiary (a joint owner, if any, or
Beneficiary the beneficiary named in the policy) is the individual who
becomes owner of the policy upon the death of an owner.
- ------------------------------------------------------------------------------------
Policy Year A policy year is a year that starts on the policy's effective
date or on a policy anniversary.
- ------------------------------------------------------------------------------------
Retirement Date The retirement date is the date on which annuity payments are
to start.
- ------------------------------------------------------------------------------------
We, Us, Our We are United Investors Life Insurance Company.
- ------------------------------------------------------------------------------------
You, Your You are the policy owner.
</TABLE>
33
<PAGE>
Statement of Additional Information
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A Statement of Additional Information is available which contains more
details concerning the subjects discussed in this prospectus. The following is
the table of contents for the Statement of Additional Information:
Table of Contents
<TABLE>
<S> <C>
The Policy.................................................................. 3
Accumulation Units........................................................ 3
Annuity Units............................................................. 3
Net Investment Factor..................................................... 3
Determination of Annuity Payments......................................... 4
Fixed Annuity Payments.................................................. 4
Variable Annuity Payments............................................... 4
The Contract.............................................................. 5
Misstatement of Age or Sex................................................ 5
Annual Report............................................................. 5
Non-Participation......................................................... 6
Delay or Suspension of Payments........................................... 6
Ownership................................................................. 6
Beneficiary............................................................... 6
Change of Owner or Beneficiary............................................ 7
Assignment................................................................ 7
Incontestability.......................................................... 7
Evidence of Survival...................................................... 7
Performance Data Calculations............................................... 7
Money Market Investment Division Yield Calculation........................ 7
Average Annual Total Return Calculations.................................. 8
Actual Performance Data................................................. 8
Adjusted Historical Performance Data.................................... 10
Federal Tax Matters......................................................... 12
Taxation of United Investors.............................................. 12
Tax Status of the Policies................................................ 12
Required Distributions.................................................... 13
Withholding............................................................... 14
Addition, Deletion or Substitution of Investments........................... 14
Distribution of the Policy.................................................. 15
Safekeeping of Variable Account Assets...................................... 15
State Regulation............................................................ 15
Records and Reports......................................................... 16
Legal Matters............................................................... 16
Experts..................................................................... 16
Other Information........................................................... 17
Financial Statements........................................................ 17
</TABLE>
34
<PAGE>
This Prospectus sets forth information about the RetireMAP Variable Annuity
Policy that a prospective investor should know before investing. The Statement
of Additional Information contains more detailed information about the Policy
and the Variable Account. This Statement of Additional Information is available
upon request at no charge. To obtain such information, return this request form
to the address shown below.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
TO: United Investors Life Insurance Company
Administrative Office
P. O. Box 219065
Dallas, TX 75221-9065
Please send me a Statement of Additional Information for the RetireMAP
Variable Annuity.
Name ________________________________
Address _____________________________
_______________________________
_______________________________
_______________________________
_______________________________
Telephone ( ) -
_________________________
<PAGE>
RetireMAP Variable Account
Statement of Additional Information
-----------------------------------
for the
RetireMAP(SM)
VARIABLE ANNUITY
Offered by
United Investors Life Insurance Company
This Statement of Additional Information expands upon subjects discussed in the
current Prospectus for the RetireMAP(SM) Deferred Variable Annuity Policy (the
"Policy") offered by United Investors Life Insurance Company. You may obtain a
copy of the Prospectus dated May 1, 1999, by writing to United Investors Life
Insurance Company, Administrative Office, P.O. Box 219065, Dallas, Texas
75221-9065. Terms used in the current Prospectus for the Policy are incorporated
in this Statement.
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD BE READ
ONLY IN CONJUNCTION WITH THE PROSPECTUS FOR THE POLICY.
Dated: May 1, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Corresponding
Page in
Page Prospectus
---- ----------
<S> <C> <C>
THE POLICY........................................................................... 3 14
Accumulation Units.............................................................. 3
Annuity Units................................................................... 3
Net Investment Factor........................................................... 3
Determination of Annuity Payments............................................... 4
Fixed Annuity Payments...................................................... 4
Variable Annuity Payments................................................... 4
The Contract.................................................................... 5
Misstatement of Age or Sex...................................................... 5
Annual Report................................................................... 5
Non-Participation............................................................... 6
Delay or Suspension of Payments................................................. 6
Ownership....................................................................... 6
Beneficiary..................................................................... 6
Change of Ownership or Beneficiary.............................................. 7
Assignment...................................................................... 7
Incontestability................................................................ 7
Evidence of Survival............................................................ 7
PERFORMANCE DATA CALCULATIONS........................................................ 7 30
Money Market Investment Division Yield Calculation.............................. 7
Average Annual Total Return Calculations........................................ 8
Actual Performance Data..................................................... 8
Adjusted Historical Performance Data........................................ 10
FEDERAL TAX MATTERS.................................................................. 12 27
Taxation of United Investors.................................................... 12
Tax Status of the Policies...................................................... 12
Required Distributions.......................................................... 13
Withholding..................................................................... 14
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS.................................... 14
DISTRIBUTION OF THE POLICY........................................................... 15 26
SAFEKEEPING OF VARIABLE ACCOUNT ASSETS............................................... 15
STATE REGULATION..................................................................... 15
RECORDS AND REPORTS.................................................................. 16
LEGAL MATTERS........................................................................ 16 31
EXPERTS.............................................................................. 16
OTHER INFORMATION.................................................................... 17
FINANCIAL STATEMENTS................................................................. 17 31
</TABLE>
- 2 -
<PAGE>
THE POLICY
----------
As a supplement to the description in the Prospectus, the following
provides additional information about the Policy.
Accumulation Units
- ------------------
An Accumulation Unit is an accounting unit used prior to the Retirement
Date to calculate the Variable Account Value. The portion of a Net Purchase
Payment that you allocate to an Investment Division of the Variable Account is
credited as Accumulation Units in that Investment Division. Similarly, the value
that you transfer to an Investment Division of the Variable Account is credited
as Accumulation Units in that Investment Division. The number of Accumulation
Units to credit is determined by dividing (1) the dollar amount allocated to the
Investment Division by (2) the Investment Division's appropriate Accumulation
Unit Value for the Valuation Period in which we received the Purchase Payment or
transfer request (in the case of the initial Purchase Payment, we will credit
Accumulation Units for that Purchase Payment based on the Accumulation Unit
value for the Policy Date).
The value of an Accumulation Unit for each Investment Division was
initially arbitrarily set at $1. The value for any later Valuation Period is
found by multiplying the Accumulation Unit Value for an Investment Division for
the last prior Valuation Period by such Investment Division's Net Investment
Factor (described below) for the following Valuation Period. Like the Policy
Value, the value of an Accumulation Unit may increase or decrease from one
Valuation Period to the next.
Annuity Units
- -------------
An Annuity Unit is an accounting unit used after the Retirement Date to
calculate the value of Variable Annuity Payments. The value of an Annuity Unit
in each Investment Division was initially set at $1. The value for any later
Valuation Period is determined by (a) multiplying the Annuity Unit Value for an
Investment Division for the last prior Valuation Period for such Investment
Division's Net Investment Factor for the following Valuation Period, and then
(b) adjusting the result to compensate for the interest rate assumed in the
annuity tables used to determine the amount of the first Variable Annuity
Payment. The value of an Annuity Unit for each Investment Division changes to
reflect the investment performance of the Portfolio underlying that Investment
Division.
Net Investment Factor
- ---------------------
The Net Investment Factor is an index applied to measure the investment
performance of an Investment Division of the Variable Account from one Valuation
Period to the next. The Net Investment Factor may be greater or less than one,
so the value of an Investment Division may increase or decrease.
- 3 -
<PAGE>
The Net Investment Factor of an Investment Division for any Valuation
Period is determined by dividing (1) by (2) and subtracting (3) from the result,
where:
(1) is the result of:
(a) the net asset value per share of the Portfolio shares held
in the Investment Division determined at the end of the
current Valuation Period; plus
(b) the per share amount of any dividend or capital gain
distributions on the Portfolio shares held in the Investment
Division, if the "ex-dividend" date occurs during the
current Valuation Period; plus or minus
(c) a charge or credit for any taxes reserved for the current
Valuation Period which we determine to have resulted from
the investment operations of the Investment Division;
(2) is the result of:
(a) the net asset value per share of the Portfolio shares held
in the Investment Division, determined at the end of the
previous Valuation Period; plus or minus
(b) the charge or credit for any taxes reserved for the previous
Valuation Period; and
(3) is a deduction for the 1.25% Mortality and Expense Risk Charge and
the 0.15% Administration Fee.
Determination of Annuity Payments
- ---------------------------------
At the Retirement Date, the Policy Value as of 14 days prior to the
Retirement Date, less any applicable premium taxes, may be applied to make Fixed
Annuity Payments, Variable Annuity Payments, or a combination thereof.
Fixed Annuity Payments. Fixed Annuity Payments provide guaranteed
----------------------
annuity payments which remain fixed in amount throughout the payment period.
Fixed Annuity Payments do not vary with the investment experience of the
Investment Divisions. The payment amount will be based on our Fixed Annuity
Payment rates in effect on the settlement date. These rates are guaranteed not
to be less than payments based on the 1983 Individual Annuity Mortality Table
(set back one year) with interest at 4.0%. The one year setback results in lower
Annuity Payments than if no setback is used. Where requested and required by law
unisex tables will be used.
Variable Annuity Payments. The dollar amount of the first Variable
-------------------------
Annuity Payment is determined by multiplying the net value applied by purchase
rates based on the 1983 Individual Annuity Mortality Table (set back one year)
with interest at 4.0%. The one year setback results in lower Annuity Payments
than if no setback is used. Where requested and required by law unisex tables
will be used.
- 4 -
<PAGE>
The portion of the first Variable Annuity Payment attributed to each
Investment Division is divided by the Annuity Unit Value for the Investment
Division (as of the same date that the amount of the first Variable Annuity
Payment is determined) to determine the number of Annuity Units upon which later
Variable Annuity Payments will be made. This number of Annuity Units will not
change unless subsequently changed by reallocation. The dollar amount of each
monthly Variable Annuity Payment after the first Annuity Payment will equal the
sum of the number of Annuity Units credited to each Investment Division
multiplied by the Annuity Unit Value for each respective Investment Division for
the Valuation Period as of 14 days prior to the Variable Annuity Payment.
After the Retirement Date, the Annuitant may reallocate the value of
the Annuitant's interest in the Investment Divisions, no more than once each
Policy Year, by sending a Written Request to United Investors. A reallocation
will be effected during the Valuation Period as of 14 days prior to the next
Variable Annuity Payment, by converting Annuity Units for the value transferred
from an Investment Division into Annuity Units in the Investment Division to
which the value is transferred. Reallocations may cause the number of Annuity
Units to change, but will not change the dollar amount of the Variable Annuity
Payment as of the date of reallocation.
United Investors guarantees that the dollar amount of monthly Variable
Annuity Payments after the first payment will not be affected by variations in
expenses or mortality experience.
The Contract
- ------------
The entire contract is made up of the Policy, any riders, and the
written application. All statements made in the application, in the absence of
fraud, are considered representations and not warranties. Only the statements
made in the written application can be used by us to defend a claim or void the
Policy.
Changes to the Policy are not valid unless we make them in writing.
They must be signed by one of our executive officers. No agent has authority to
change the Policy or to waive any of its provisions.
Misstatement of Age or Sex
- --------------------------
If the Annuitant's age or sex is misstated, we will adjust each benefit
and any amount to be paid to reflect the correct age and sex.
Annual Report
- -------------
At least once each Policy Year prior to the Retirement Date we will
send you a report on your Policy. It will show the current Policy Value, the
current Fixed Account Value, the current value of the Investment Divisions of
the Variable Account, the Purchase Payments paid, all charges and partial
withdrawals since the last report, the current Surrender Value and the current
- 5 -
<PAGE>
Death Benefit. We will also include in the report any other information required
by state law or regulation. Further, we will send you the reports required by
the Investment Company Act of 1940. You may request additional reports during
the year but we may charge a fee for any additional reports.
Non-Participation
- -----------------
The Policy is non-participating. This means that no dividends will be
paid on your Policy. It will not share in our profits or surplus earnings.
Delay or Suspension of Payments
- -------------------------------
We will normally pay a surrender or any withdrawal within seven days
after we receive your Written Request at our Administrative Office. However,
payment of any amount from the Investment Divisions of the Variable Account may
be delayed or suspended whenever:
a) the New York Stock Exchange is closed other than customary
weekend and holiday closing, or trading on the New York Exchange
is restricted as determined by the U.S. Securities and Exchange
Commission;
b) the U.S. Securities and Exchange Commission by order permits
postponement for the protection of Policyowners; or
c) an emergency exists, as determined by the Commission, as a result
of which disposal of the securities held in the Investment
Divisions is not reasonably practicable or it is not reasonably
practicable to determine the value of the Variable Account's net
assets.
Payment of any amounts from the Fixed Account may be deferred for up to
six months from the date of the request to surrender. If payment is deferred for
more than 30 days, we will pay interest on the amount deferred at a rate not
less the Guaranteed Minimum Interest Rate.
Payments under the Policy of any amounts derived from Purchase Payments
paid by check may be delayed until such time as the check has cleared your bank.
Ownership
- ---------
The Policy belongs to you, the Policyowner. Unless you provide
otherwise, you may receive all benefits and exercise all rights of the Policy
prior to the Retirement Date. These rights and the rights of any Beneficiary are
subject to the rights of any assignee. If there is more than one Owner at a
given time, all must exercise the rights of ownership by joint action.
Beneficiary
- -----------
The Beneficiary means the person, persons or entity entitled to Death
Benefit proceeds under this Policy upon death of the Owner (or Annuitant if the
Owner is not a natural person) before the Retirement Date. If the Policy has
joint Owners and one Owner dies, the surviving Joint Owner will be deemed
- 6 -
<PAGE>
the Beneficiary. The rights of any Beneficiary who dies before the Owner (or
Annuitant if the Owner is not a natural person) will pass to the surviving
Beneficiary or Beneficiaries unless you provide otherwise. If no Beneficiary is
living at the Owner's (or Annuitant's if the Owner is not a natural person)
death, we will pay the Death Benefit, if any, to the Owner, if living;
otherwise, it will be paid to the deceased's estate.
Change of Ownership or Beneficiary
- ----------------------------------
Unless you provide otherwise in writing to us, you may change the Owner
or the Beneficiary during your lifetime. Any changes must be made by Written
Request filed with us. The change takes effect on the date the request was
signed, but it will not apply to payments made by us before we accept your
Written Request. We may require you to submit the Policy to us before making a
change. A change of ownership may be a taxable event.
Assignment
- ----------
You may assign the Policy, but we will not be responsible for the
validity of any assignment and no assignment will bind us until it is filed in
writing at our Administrative Office. When it is filed, your rights and the
rights of any Beneficiary will be subject to it. An assignment of the Policy may
be a taxable event. Your ability to assign a Qualified Policy may be restricted.
Incontestability
- ----------------
United Investors will not contest the Policy.
Evidence of Survival
- --------------------
Where any payments under the Policy depend on the payee being alive, we
may require proof of survival prior to making the payments.
PERFORMANCE DATA CALCULATIONS
-----------------------------
We may advertise the yield and effective yield of the Money Market
Investment Division. In addition, we may advertise the total returns for other
Investment Divisions of the Variable Account. All performance data calculations
for the Variable Account will be in accordance with uniformly imposed SEC
regulations.
Money Market Investment Division Yield Calculation
- --------------------------------------------------
In accordance with regulations adopted by the SEC, if we disclose the
current annualized yield of the Money Market Investment Division for a seven-day
period, it is required to be in a manner which does not take into consideration
(1) any realized or unrealized gains or losses of the Federated Prime Money Fund
II or on its portfolio securities, or (2) any income other than investment
income. The current annualized yield is computed by determining the net change
(exclusive of realized gains and losses on the sale of securities and unrealized
appreciation and depreciation) in the value of a
- 7 -
<PAGE>
hypothetical account having a balance of one unit of the Money Market Investment
Division at the beginning of the seven-day period, dividing the net change in
account value by the value of the account at the beginning of the period to
determine the base period return, and annualizing this quotient on a 365-day
basis. The net change in account value reflects the deduction for the Mortality
and Expense Risk Charge and the Administration Fee as well as reflecting income
and expenses accrued during the period. Because of these deductions, the yield
for the Money Market Investment Division will be lower than the yield for the
Federated Prime Money Fund II.
The SEC also permits us to disclose the effective yield of the Money
Market Investment Division for the same seven-day period, determined on a
compounded basis. The effective yield is calculated by compounding the
annualized base period return by adding one to the base period return, raising
the sum to a power equal to 365 divided by 7, and subtracting one from the
result according to the following formula:
Effective Yield = [(Base period return +1)*365/7]-1
For the seven-day period ending December 31, 1998, the Money Market
Investment Division annualized yield was 2.99%. For the same period, the
effective yield was 3.03%.
The actual yield of the Money Market Investment Division is affected
by: (l) changes in interest rates on money market securities; (2) the average
portfolio maturity of the Federated Prime Money Fund II; (3) the types and
quality of securities held by the Federated Prime Money Fund II; and (4) its
operating expenses. The yield on amounts held in the Money Market Investment
Division normally will fluctuate on a daily basis. Therefore, the disclosed
yields for any given past period is not an indication or representation of
future yields or rates of return.
Average Annual Total Return Calculations
- ----------------------------------------
Actual Performance Data. For each Investment Division of the Variable
-----------------------
Account other than the Money Market Investment Division an average annual total
return may be calculated for a given period. It is computed by finding the
average annual compounded rate of return over one, five and ten year periods
(or, where an Investment Division has been in existence for a period less than
one, five or ten years, for such lesser period) that would equate the initial
amount invested to the ending redeemable value, according to the following
formula:
P(1 + T)*n = ERV
Where
P = a hypothetical initial payment of $1,000
T = average annual total return
N = number of years in the period
-8-
<PAGE>
ERV = ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the one, five or ten year periods (or fractional portion
thereof) at the end of such period.
All recurring fees that are charged to all Policy Owner accounts are
recognized in the ending redeemable value. The average annual total return
calculation will also reflect the effect of Withdrawal Charges that may be
applicable due to surrender of the Policy at the end of a particular period.
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN
7/15/98* to
Investment Division 12/31/98
- ------------------- --------
AIM V.I. Growth Fund -0.17%
AIM V.I. Value Fund -1.95%
Dreyfus Capital Appreciation Portfolio -4.08%
Dreyfus Growth and Income Portfolio -6.36%
Dreyfus Quality Bond Portfolio -9.92%
Dreyfus Small Cap Portfolio -16.15%
Federated American Leaders Fund II -6.69%
Federated Equity Income Fund II -4.37%
Federated Fund for U.S. Government Securities II -3.82%
INVESCO VIF-Dynamics Portfolio -10.67%
INVESCO VIF-High Yield Portfolio -12.73%
INVESCO VIF-Industrial Income Portfolio -5.45%
MFS Emerging Growth Series -0.78%
MFS Growth with Income Series -5.89%
MFS Research Series -7.65%
MFS Utilities Series -3.96%
Scudder Global Discovery Portfolio -11.06%
Scudder International Portfolio -13.87%
Warburg Pincus International Equity Portfolio -19.15%
Warburg Pincus Fixed Income Portfolio -3.32%
Warburg Pincus Global Fixed Income Portfolio 0.01%
- ------------
* The Variable Account commenced operations on July 15, 1998. These returns
are not annualized figures.
From time to time we may also disclose average annual total returns in
a non-standard format in conjunction with the standard format described above.
The only difference between the two methods is that the non-standard format
assumes a Withdrawal Charge of 0%.
-9-
<PAGE>
NON-STANDARD AVERAGE ANNUAL TOTAL RETURN
7/15/98* to
Investment Division 12/31/98
- ------------------- --------
AIM V.I. Growth Fund 6.83%
AIM V.I. Value Fund 5.05%
Dreyfus Capital Appreciation Portfolio 2.92%
Dreyfus Growth and Income Portfolio 0.64%
Dreyfus Quality Bond Portfolio -2.92%
Dreyfus Small Cap Portfolio -9.15%
Federated American Leaders Fund II 0.31%
Federated Equity Income Fund II 2.63%
Federated Fund for U.S. Government Securities II 3.18%
INVESCO VIF-Dynamics Portfolio -3.67%
INVESCO VIF-High Yield Portfolio -5.73%
INVESCO VIF-Industrial Income Portfolio 1.55%
MFS Emerging Growth Series 6.22%
MFS Growth with Income Series 1.11%
MFS Research Series -0.65%
MFS Utilities Series 3.04%
Scudder Global Discovery Portfolio -4.06%
Scudder International Portfolio -6.87%
Warburg Pincus International Equity Portfolio -12.15%
Warburg Pincus Fixed Income Portfolio 3.68%
Warburg Pincus Global Fixed Income Portfolio 7.01%
- --------------------------
* The Variable Account commenced operations on July 15, 1998. These
returns are not annualized figures.
The performance information provided above reflects only the
performance of a hypothetical $1,000 payment which is allocated to the stated
Investment Division during the time period on which the calculations are based.
Performance information provided for any given past period is not an indication
or representation of future yields or rates of return.
Adjusted Historical Performance Data. We may also disclose performance
------------------------------------
for periods beginning before the investment divisions of the Variable Account
commenced operations, based upon the actual performance of the underlying mutual
fund portfolios adjusted to reflect the policy's and the Variable Account's
charges and deductions.
-10-
<PAGE>
AVERAGE ANNUAL RETURN USING ADJUSTED HISTORICAL DATA FOR PERIOD ENDED 12/31/98
(Including Maximum Withdrawal Charges)
<TABLE>
<CAPTION>
Since Inception
1 5 10 Portfolio Date of
Investment Division Year Years Years Inception Portfolio
- ------------------- ---- ----- ----- --------- ---------
<S> <C> <C> <C> <C> <C>
AIM V.I. Growth Fund 25.06% 18.30% NA 17.91% 05/05/93
AIM V.I. Value Fund 23.35% 19.52% NA 19.77% 05/05/93
Dreyfus Capital Appreciation Portfolio 21.28% 21.38% NA 19.51% 04/05/93
Dreyfus Growth and Income Portfolio 3.03% NA NA 19.46% 05/02/94
Dreyfus Quality Bond Portfolio -6.79% 3.48% NA 6.91% 08/31/90
Dreyfus Small Cap Portfolio -12.52% 10.53% NA 34.99% 08/31/90
Federated American Leaders Fund II 8.73% NA NA 18.34% 02/01/94
Federated Equity Income Fund II 6.65% NA NA 15.24% 01/02/97
Federated Fund for US Govt Securities II -1.02% NA NA 4.27% 03/28/94
INVESCO VIF-Dynamics Portfolio 10.55% NA NA 10.12% 08/25/97
INVESCO VIF-High Yield Portfolio -7.24% NA NA 9.45% 05/27/94
INVESCO VIF-Industrial Income Portfolio 6.52% NA NA 19.26% 08/10/94
MFS Emerging Growth Series 23.88% NA NA 23.22% 07/24/95
MFS Growth with Income Series 13.46% NA NA 22.86% 10/09/95
MFS Research Series 13.93% NA NA 19.34% 07/26/95
MFS Utilities Series 8.70% NA NA 22.51% 01/03/95
Scudder Global Discovery Portfolio 6.73% NA NA 12.34% 05/02/97
Scudder International Portfolio 8.51% NA NA 5.96% 05/08/97
Warburg Pincus International Equity Ptflo -4.60% NA NA 4.29% 06/30/95
Warburg Pincus Fixed Income Portfolio -0.56% NA NA 3.14% 03/31/97
Warburg Pincus Global Fixed Income Ptflo 3.97% NA NA 2.11% 03/31/97
</TABLE>
AVERAGE ANNUAL RETURN USING ADJUSTED HISTORICAL DATA FOR PERIOD ENDED 12/31/98
(Excluding Withdrawal Charges)
<TABLE>
<CAPTION>
Since Inception
1 5 10 Portfolio Date of
Investment Division Year Years Years Inception Portfolio
- ------------------- ---- ----- ----- --------- ---------
<S> <C> <C> <C> <C> <C>
AIM V.I. Growth Fund 32.06% 18.60% NA 18.16% 05/05/93
AIM V.I. Value Fund 30.35% 19.81% NA 20.00% 05/05/93
Dreyfus Capital Appreciation Portfolio 28.28% 21.66% NA 19.73% 04/05/93
Dreyfus Growth and Income Portfolio 10.03% NA NA 19.90% 05/02/94
Dreyfus Quality Bond Portfolio 0.21% 4.00% NA 6.91% 08/31/90
Dreyfus Small Cap Portfolio -5.52% 10.93% NA 34.99% 08/31/90
Federated American Leaders Fund II 15.73% NA NA 18.76% 02/01/94
Federated Equity Income Fund II 13.65% NA NA 18.25% 01/02/97
Federated Fund for US Govt Securities II 5.98% NA NA 4.98% 03/28/94
INVESCO VIF-Dynamics Portfolio 17.55% NA NA 15.09% 08/25/97
INVESCO VIF-High Yield Portfolio -0.24% NA NA 10.07% 05/27/94
INVESCO VIF-Industrial Income Portfolio 13.52% NA NA 19.75% 08/10/94
MFS Emerging Growth Series 30.88% NA NA 24.26% 07/24/95
MFS Growth with Income Series 20.46% NA NA 24.02% 10/09/95
MFS Research Series 20.93% NA NA 20.46% 07/26/95
MFS Utilities Series 15.70% NA NA 23.32% 01/03/95
Scudder Global Discovery Portfolio 13.73% NA NA 16.18% 05/02/97
Scudder International Portfolio 15.51% NA NA 10.00% 05/08/97
Warburg Pincus International Equity Ptflo 2.40% NA NA 3.71% 06/30/95
Warburg Pincus Fixed Income Portfolio 6.44% NA NA 8.10% 03/31/97
Warburg Pincus Global Fixed Income Ptflo 10.97% NA NA 6.98% 03/31/97
</TABLE>
-11-
<PAGE>
The Inception Dates shown above are the Inception Dates for the
underlying portfolios. Data presented herein is described as standardized if it
takes into account the maximum withdrawal charge and all other fees and charges.
However, the staff of the U.S. Securities and Exchange Commission does not
consider such data to be standard or standardized, in accordance with Form N-4,
if it includes any time period before the Investment Division's inception
(reflecting the underlying Portfolio's historical performance, adjusted for the
Policy and Variable Account fees and expenses). Accordingly, the Prospectus
and/or the Statement of Additional Information refers to any performance data
that includes periods prior to the Investment Division's inception as adjusted
historical data, not standard data, even if it takes into account the maximum
Withdrawal Charge.
FEDERAL TAX MATTERS
-------------------
Taxation of United Investors
- ----------------------------
United Investors is taxed as a life insurance company under Part 1 of
Subchapter L of the Internal Revenue Code of 1986 (the "Code"). Since the
Variable Account is not an entity separate from United Investors and its
operations form a part of United Investors, it will not be taxed separately as a
"regulated investment company" under Subchapter M of the Code. Investment income
and realized net capital gains on the assets of the Variable Account are
reinvested and taken into account in determining the Policy Value. As a result,
such investment income and realized net capital gains are automatically retained
as part of the reserves under the Policy. Under existing Federal income tax law,
United Investors believes that Variable Account investment income and realized
net capital gains should not be taxed to the extent that such income and gains
are retained as part of the reserves under the Policy.
Tax Status of the Policies
- --------------------------
Section 817(h) of the Code provides that the investments of the
Variable Account must be "adequately diversified" in accordance with Treasury
regulations in order for the Policies to qualify as annuity contracts under
Section 72 of the Code. The Variable Account, through each Portfolio of the
Funds, intends to comply with the diversification requirements prescribed by the
Treasury in Treas. Reg. Section 1.817-5, which affect how the Portfolios' assets
may be invested. United Investors does not control any of the Funds or their
Portfolios' investments. However, it has entered into an agreement regarding
participation in each Fund, which requires each participating Portfolio of the
Funds to be operated in compliance with the diversification requirements
prescribed by the Treasury.
In certain circumstances, owners of variable annuity contracts may be
considered the owners, for Federal income tax purposes, of the assets of the
separate account used to support their contracts. In those circumstances,
-12-
<PAGE>
income and gains from the separate account assets would be includible in the
variable contract owner's gross income. The IRS has stated in published rulings
that a variable contract owner will be considered the owner of separate account
assets if the contract owner possesses incidents of ownership in those assets,
such as the ability to exercise investment control over the assets. The Treasury
Department also announced, in connection with the issuance of regulations
concerning diversification, that those regulations "do not provide guidance
concerning the circumstances in which investor control of the investments of a
segregated asset account may cause the investor (i.e., the Policyowner), rather
than the insurance company, to be treated as the owner of the assets in the
account." This announcement also stated that guidance would be issued by way of
regulations or rulings on the "extent to which policyholders may direct their
investments to particular subaccounts without being treated as owners of the
underlying assets."
The ownership rights under the Policy are similar to, but different in
certain respects from, those described by the IRS in rulings in which it was
determined that policy owners were not owners of separate account assets. For
example, the Policyowner has additional flexibility in allocating premium
payments and Policy Values. These differences could result in a Policyowner
being treated as the owner of a pro rata portion of the assets of the Variable
Account. In addition, United Investors does not know what standards will be set
forth, if any, in the regulations or rulings which the Treasury Department has
stated it expects to issue. United Investors therefore reserves the right to
modify the Policy as necessary to attempt to prevent a Policyowner from being
considered the owner of a pro rata share of the assets of the Variable Account
Required Distributions
- ----------------------
In order to be treated as an annuity contract for Federal income tax
purposes, Section 72(s) of the Code requires any nonqualified Policy to provide
that (a) if any Owner dies on or after the annuity starting date but prior to
the time the entire interest in the Policy has been distributed, the remaining
portion of such interest will be distributed at least as rapidly as under the
method of distribution being used as of the date of that Owner's death; and (b)
if any Owner dies prior to the annuity starting date, the entire interest in the
Policy will be distributed within five years after the date of that Owner's
death.
These requirements will be considered satisfied as to any portion of
the Owner's interest that is payable as annuity payments which will begin within
one year of that Owner's death and which will be made over the life of the
Owner's designated Beneficiary or over a period not extending beyond his life
- 13 -
<PAGE>
expectancy.
If the Owner's designated Beneficiary is the surviving spouse of the
Owner, the Policy may be continued with the surviving spouse as the new Owner
and no distributions will be required.
Withholding
- -----------
Distributions from the Policy generally are subject to withholding for
the Owner's Federal income tax liability. The withholding rate varies according
to the type of distribution and the Owner's tax status. The Owner will be
provided the opportunity to elect not to have tax withheld from distributions.
"Eligible rollover distributions" from section 401(a) plans and section
403(b) tax-sheltered annuities are subject to a mandatory Federal income tax
withholding of 20%. An eligible rollover distribution is the taxable portion of
any distribution from such a plan, except certain distributions such as
distribution required by the Code or distributions in a specified annuity form.
The 20% withholding does not apply, however, if the Owner chooses a "direct
rollover" from the plan to another tax-qualified plan or IRA.
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS
-------------------------------------------------
United Investors reserves the right, subject to compliance with
applicable law, to make additions to, deletions from, or substitutions for, the
shares of the Funds that are held by the Variable Account (or any Investment
Division) or that the Variable Account (or any Investment Division) may
purchase. United Investors reserves the right to eliminate the shares of any of
the Portfolios of the Funds and to substitute shares of another Portfolio of the
Funds or any other investment vehicle or of another open-end, registered
investment company if laws or regulations are changed, if the shares of any of
the Funds or a Portfolio are no longer available for investment, or if in our
judgment further investment in any Portfolio should become inappropriate in view
of the purposes of the Investment Division. United Investors will not substitute
any shares attributable to a Policyowner's interest in an Investment Division of
the Variable Account without notice and prior approval of the U.S. Securities
and Exchange Commission and the insurance regulator of the state where the
Policy was delivered, where required. Nothing contained herein shall prevent the
Variable Account from purchasing other securities for other series or classes of
policies, or from permitting a conversion between series or classes of policies
on the basis of requests made by Policyowners.
United Investors also reserves the right to establish additional
Investment Divisions of the Variable Account, each of which would invest in a
new Portfolio of one of the Funds, or in shares of another investment company
- 14 -
<PAGE>
or suitable investment, with a specified investment objective. New Investment
Divisions may be established when, in the sole discretion of United Investors,
marketing needs or investment conditions warrant, and any new Investment
Divisions will be made available to existing Policyowners on a basis to be
determined by United Investors. United Investors may also eliminate one or more
Investment Divisions if, in its sole discretion, marketing, tax, or investment
conditions warrant.
In the event of any such substitution or change, United Investors may,
by appropriate endorsement, make such changes in the Policies as may be
necessary or appropriate to reflect such substitution or change. If deemed by
United Investors to be in the best interests of persons having voting rights
under the Policies, the Variable Account may be operated as a management company
under the Investment Company Act of 1940, it may be deregistered under that Act
in the event such registration is no longer required, or it may be combined with
other United Investors separate accounts.
DISTRIBUTION OF THE POLICY
--------------------------
The Policies will be sold by individuals who, in addition to being
licensed as life insurance agents for United Investors, are also registered
representatives of MAP Investments Incorporated ("MAP"), the principal
underwriter of the Policies, or of broker-dealers or banks who have entered into
written sales agreements with MAP. MAP is registered with the U.S. Securities
and Exchange Commission under the Securities Exchange Act of 1934 as a
broker-dealer and is a member of the National Association of Securities Dealers,
Inc. The total commissions paid by United Investors for the sale of the Policy
were $_____ during 1998. The Policies are offered to the public through brokers
licensed under the Federal securities laws and state insurance laws that have
entered into agreements with MAP. The offering of the Policies is continuous,
and MAP does not anticipate discontinuing the offering of the Policies. However,
MAP reserves the right to discontinue the offering of the Policies.
SAFEKEEPING OF VARIABLE ACCOUNT ASSETS
--------------------------------------
United Investors holds the assets of the Variable Account. The assets
are kept physically segregated and held separate and apart from United
Investors' general account. United Investors maintains records of all purchases
and redemptions of Fund shares by each of the Investment Divisions.
STATE REGULATION
----------------
United Investors is subject to regulation by the Missouri Department of
Insurance. An annual statement is filed with the Missouri Department of
- 15 -
<PAGE>
Insurance on or before March 1 of each year covering the operations and
reporting on the financial condition of United Investors as of December 31 of
the preceding year. Periodically, the Missouri Department of Insurance or other
authorities examine the liabilities and reserves of United Investors and the
Variable Account, and a full examination of United Investors' operations is
conducted periodically by the National Association of Insurance Commissioners.
In addition, United Investors is subject to the insurance laws and
regulations of other states within which it is licensed or may become licensed
to operate. Generally, the insurance department of any other state applies the
laws of the state of domicile in determining permissible investments. A Policy
is governed by the law of the state in which it is delivered. The values and
benefits of each Policy are at least equal to those required by such state.
RECORDS AND REPORTS
-------------------
All records and accounts relating to the Variable Account will be
maintained by United Investors. As presently required by the Investment Company
Act of 1940 and regulations promulgated thereunder, reports containing such
information as may be required under that Act or by any other applicable law or
regulation will be sent to Owners at their last known address of record.
LEGAL MATTERS
-------------
Legal advice regarding certain matters relating to Federal securities
laws applicable to the issuance of the Policy described in the Prospectus has
been provided by Sutherland Asbill & Brennan LLP of Washington, D.C.
EXPERTS
-------
The balance sheets of United Investors Life Insurance Company as of
December 31, 1998 and 1997, and the related statements of operations,
shareholder's equity, and cash flows for each of the years in the three-year
period ended December 31, 1998 and the balance sheet of RetireMAP Variable
Account as of December 31, 1998 and the related statements of operations and
change in net assets for the period from July 15, 1998 (commencement of
operations) through December 31, 1998 have been included herein in reliance upon
the report of ________________, independent certified public accountants,
appearing elsewhere herein, and upon the authority of said firm as experts in
accounting and auditing.
- 16 -
<PAGE>
OTHER INFORMATION
-----------------
A Registration Statement has been filed with the U.S. Securities and
Exchange Commission under the Securities Act of 1933, as amended, with respect
to the Policies discussed in this Statement of Additional Information. Not all
of the information set forth in the Registration Statement, amendments and
exhibits thereto has been included in this Statement of Additional Information.
Statements contained in this Statement of Additional Information concerning the
content of the Policies and other legal instruments are intended to be
summaries. For a complete statement of the terms of these documents, reference
should be made to the instruments filed with the U.S. Securities and Exchange
Commission.
FINANCIAL STATEMENTS
--------------------
The financial statements of United Investors, which are included in
this Statement of Additional Information, should be considered only as bearing
on the ability of United Investors to meet its obligations under the Policies.
They should not be considered as bearing on the investment performance of the
assets held in the Variable Account.
- 17 -
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements
--------------------
All required financial statements to be filed by amendment.
The following financial statements of the Registrant, RetireMAP
Variable Account (the "Variable Account"), are included in Part B (Statement of
Additional Information) of the Registration Statement:
Independent Auditor's Report
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Notes to Financial Statements
The following financial statements of the Depositor, United Investors
Life Insurance Company ("United Investors"), are included in Part B (Statement
of Additional Information) of the Registration Statement:
Independent Auditors' Report
Balance Sheets--at December 31, 1998 and 1997
Statements of Operations--for the years ended December 31, 1998, 1997 and 1996
Statements of Shareholder's Equity--for the years ended December 31, 1998, 1997
and 1996
Statements of Cash Flow--for the years ended December 31, 1998, 1997
and 1996
Notes to Financial Statements
(b) Exhibits
--------
(1) Resolution of the Board of Directors of United Investors
authorizing establishment of the Variable Account./2/
(2) Custody agreements: Not applicable.
(3) (A) Principal Underwriting Agreement./5/
(B) Form of Broker-Dealer Sales Agreement./5/
(C) Master Distribution Agreement./5/
(4) (A) Form of Annuity Policy./2/
(B) Optional Death Benefit Rider./5/
(C) Waiver of Withdrawal Charges Rider./2/
(D) Death Benefit Endorsement./5/
(5) Form of Application./2/
(6) (A) Certificate of Incorporation of United Investors./1/
(B) By-Laws of United Investors./1/
(7) Reinsurance contracts: Not applicable.
(8) (A) Participation Agreement for:
(i) AIM Variable Insurance Funds, Inc./5/
(ii) Federated Insurance Series./4/
(iii) Scudder Variable Life Investment Fund./4/
(iv) Dreyfus Variable Investment Fund./4/
(v) MFS Variable Insurance Trust./4/
(vi) Warburg Pincus Trust./4/
(vii) Warburg Pincus Trust II./4/
(viii) INVESCO Variable Investment Funds, Inc./5/
(B) Form of Administration Agreement./3/
C-1
<PAGE>
(9) Opinion and consent of Counsel/6/
(10) (A) Consent of Sutherland Asbill & Brennan LLP/6/
(B) Consent of Independent Auditors./6/
(11) Certain additional financial statements: Not applicable.
(12) Agreements/understandings for providing initial capital: Not
applicable.
(13) Performance Data Calculations./6/
(14) Financial Data Schedules: Not applicable.
(15) Power of Attorney./3/
- ---------------------------------
/1/ Incorporated herein by reference to the Exhibit filed electronically
with Post-Effective Amendment No. 12 to the Registration Statement on
Form S-6 (File No. 33-11465) filed on April 30, 1998 (previously filed
on January 22, 1987 as an Exhibit to the Form S-6 Registration
Statement, File No. 33-11465).
/2/ Incorporated herein by reference to the initial Registration Statement on
Form N-4 (File No. 333-12507) filed on September 23, 1996.
/3/ Incorporated herein by reference to Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-4 (File No. 333-12507) filed on March 7,
1997.
/4/ Incorporated herein by reference to Pre-Effective Amendment No. 2 to the
Registration Statement on Form N-4 (File No. 333-12507) filed on July 2,
1997.
/5/ Incorporated herein by reference to Post-Effective Amendment No. 1 to the
Registration Statement on Form N-4 (File No. 333-12507) filed on June 29,
1998.
/6/ To be filed by amendment.
Item 25. Directors and Officers of the Depositor
---------------------------------------
Name and Principal Position and Offices
Business Address* with Depositor
----------------- --------------
C. B. Hudson** Chairman of the Board of Directors
and Chief Executive Officer
Anthony L. McWhorter Director and President
W. Thomas Aycock Director, Vice President and
Chief Actuary
Tony G. Brill** Director and Executive
Vice President - Administration
Mark S. McAndrew** Senior Vice President - Marketing
Larry M. Hutchison** Director
Michael J. Klyce Vice President and Treasurer
John H. Livingston Director, Secretary and Counsel
James L. Mayton, Jr. Vice President and Controller
Carol A. McCoy Director and Assistant Secretary
C-2
<PAGE>
Name and Principal Position and Offices
Business Address* with Depositor
----------------- --------------
Ross W. Stagner Director and Vice President
Terry W. Davis Director
- --------------------
* Unless otherwise noted, the principal business address of each person
listed is United Investors Life Insurance Company, P. O. Box 10207,
Birmingham, Alabama 35202-0207.
** Principal business address: Torchmark Corporation, 3700 South Stonebridge,
McKinney, Texas 75070.
Item 26. Persons Controlled by or Under Common Control With the Depositor or
-------------------------------------------------------------------
Registrant.
- ----------
The Depositor, United Investors Life Insurance Company, Inc. ("United
Investors"), is indirectly owned by Torchmark Corporation. The following table
shows the persons controlled by or under common control with United Investors,
their Parent Company, and the State or Jurisdiction of Incorporation. All
companies are 100% owned by their Parent Company, unless otherwise indicated,
which is indirectly owned by Torchmark Corporation. The Registrant is a
segregated asset account of United Investors.
Parent State/Jurisdiction
Company Co. Code of Incorporation
- ------- -------- -------------------
American Income Life Insurance Co. A Indiana
American Life and Accident Insurance Co. A Texas
Brown-Service Funeral Homes Co., Inc. B Alabama
(Services burial insurance policies)
First United American Life Insurance Co. D New York
Globe Insurance Agency, Inc. A Arkansas
Globe Life And Accident Insurance Co. C Delaware
Globe Marketing Services Inc. A Oklahoma
Liberty National Auto Club, Inc. B Alabama
Liberty National GroupCare, Inc. B Alabama
Liberty National Life Insurance Co. C Alabama
Maxwell's Energy Company, Inc. C Alabama
Stonegate Management Company E Alabama
Stonegate Realty Company E Delaware
C-3
<PAGE>
Parent State/Jurisdiction
Company Co. Code of Incorporation
- ------- -------- -------------------
Torch Royalty Company B Delaware
Torchmark Corporation Delaware
(Holding company)
Torchmark Development Corporation C Alabama
United American Insurance Co. C Delaware
United Investors Life Insurance Co. B** Missouri
Waddell & Reed Asset Management Co. C Missouri
**Parent company owns 81%; remaining 19% owned by Torchmark Corporation.
Parent Company Codes
- --------------------
A Globe Life And Accident Insurance Co.
B Liberty National Life Insurance Co.
C Torchmark Corporation
D United American Insurance Co.
E Torchmark Development Corporation
Item 27. Number of Policy Owners
-----------------------
As of December 31, 1998, there were 2 owners of the policies.
Item 28. Indemnification
---------------
Article XII of United Investors' By-Laws provides as follows:
"Each Director or officer, or former Director or officer, of this
Corporation, and his legal representatives, shall be indemnified by the
Corporation against liabilities, expenses, counsel fees and costs,
reasonably incurred by him or his estate in connection with, or arising out
of, any action, suit, proceeding or claim in which he is made a party by
reason of his being, or having been, such Director or officer; and any
person who, at the request of this Corporation, serves as Director or
officer of another corporation in which this Corporation
C-4
<PAGE>
owns corporate stock, and his legal representatives, shall in like manner
be indemnified by this Corporation; provided that, in either case shall the
Corporation indemnify such Director or officer with respect to any matters
as to which he shall be finally adjudged in any such action, suit or
proceeding to have been liable for misconduct in the performance of his
duties as such Director or officer. The indemnification herein provided for
shall apply also in respect of any amount paid in compromise of any such
action, suit, proceeding or claim asserted against such Director or officer
(including expenses, counsel fees, and costs reasonably incurred in
connection therewith), provided that the Board of Directors shall have
first approved such proposed compromise settlement and determined that the
officer or Director involved is not guilty of misconduct, but in taking
such action any Director involved shall not be qualified to vote thereof,
and if for this reason a quorum of the Board cannot be obtained to vote on
such matters, it shall be determined by a committee of three (3) persons
appointed by the shareholders at a duly called special meeting or at a
regular meeting. In determining whether or not a Director or officer is
guilty of misconduct in relation to any such matter, the Board of Directors
or committee appointed by the shareholders, as the case shall be, may rely
conclusively upon an opinion of independent legal counsel selected by such
Board or committee. The rights to indemnification herein provided shall not
be exclusive of any other rights to which such Director or officer may be
lawfully entitled."
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to Directors, officers and controlling
provisions, or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a Director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such Director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
Item 29. Principal Underwriters
----------------------
(a) MAP Investments Incorporated ("MAP") is the principal underwriter of the
Policies as defined in the Investment Company Act of 1940. It is not the
principal underwriter, depositor, sponsor, or investment adviser for any other
investment company.
(b) The following table provides certain information with respect to each
director, officer, or partner of MAP.
C-5
<PAGE>
Name and Principal Positions and Offices
Business Address* With Underwriter
- ----------------- ----------------
D. Mark Davenport Director, President, Treasurer
Terry L. Johnson Vice President, Secretary
*The principal business address for the officers and Directors listed is 9020 N.
May Avenue, Suite 290, Oklahoma City, OK 73120.
(c) Commissions Received by Each Principal Underwriter
from the Registrant During the One Year Period Ending December 31, 1998
------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net
Underwriting
Name of Principal Discounts and Compensation Brokerage
Underwriter Commissions on Redemption Commissions Compensation
- ----------- ----------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
MAP Investments (to be provided) (to be provided) (to be provided) (to be provided)
Incorporated
</TABLE>
Item 30. Location of Accounts and Records
--------------------------------
All accounts and records required to be maintained by Section 31(a)
of the 1940 Act and the rules under it are maintained by United Investors at its
home office.
Item 31. Management Services
-------------------
All management contracts are discussed in Part A or Part B.
Item 32. Undertakings
------------
(a) Registrant undertakes that it will file a Post-Effective Amendment to
this Registration Statement as frequently as necessary to ensure that the
audited financial statements in the Registration Statement are never more than
16 months old for so long as payments under the variable annuity contracts may
be accepted.
(b) Registrant undertakes that it will include either (1) as part of any
application to purchase a contract offered by the Prospectus, a space that an
applicant can check to request a Statement of Additional Information, or (2) a
post card or similar written communication affixed to or included in the
Prospectus that the applicant can remove to send for a Statement of Additional
Information.
(c) Registrant undertakes to deliver any Statement of Additional Information
and any financial statements required to be made available under this Form
promptly upon written or oral request to United Investors at the address or
phone number listed in the Prospectus.
C-6
<PAGE>
(d) United Investors represents that the fees and charges deducted under the
Policy, in the aggregate, are reasonable in relation to the services rendered,
the expenses expected to be incurred, and the risks assumed by United Investors.
STATEMENT PURSUANT TO RULE 6c-7
-------------------------------
United Investors and the Variable Account rely on 17 C.F.R. Section
270.6c-7 and represent that the provisions of that Rule have been or will be
complied with. Accordingly, United Investors and the Variable Account are exempt
from the provisions of Sections 22(e), 27(c)(1) and 27(d) of the Investment
Company Act of 1940 with respect to any variable annuity contract participating
in such account to the extent necessary to permit compliance with the Texas
Optional Retirement Program.
SECTION 403(b) REPRESENTATIONS
------------------------------
United Investors represents that it is relying on a no-action letter
dated November 28, 1988, to the American Council of Life Insurance (Ref. No. IP-
6-88) regarding Sections 22(e), 27(c)(1), and 27(d) of the Investment Company
Act of 1940, in connection with redeemability restrictions on Section 403(b)
policies, and that paragraphs numbered (1) through (4) of that letter will be
complied with.
C-7
<PAGE>
SIGNATURES
----------
As required by the Securities Act of 1933 and the Investment Company
Act of 1940, the Registrant, RetireMap Variable Account, has duly caused this
Amendment to the Registration Statement to be signed on its behalf in the City
of Birmingham and the State of Alabama on the 23rd day of February, 1999.
UNITED INVESTORS RETIREMAP VARIABLE ACCOUNT
(REGISTRANT)
UNITED INVESTORS LIFE INSURANCE COMPANY
(DEPOSITOR)
By: /s/ Anthony L. McWhorter
--------------------------------------
Anthony L. McWhorter, President
As required by the Securities Act of 1933, this Amendment to the
Registration Statement for the RetireMAP Variable Account has been signed by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ C. B. Hudson Chairman of the Board of Directors 2-23-99
- ---------------------------- and Chief Executive Officer ------------------
C. B. Hudson
/s/ Anthony L. McWhorter Director and President 2-23-99
- ---------------------------- ------------------
Anthony L. McWhorter
/s/ W. Thomas Aycock Director, Vice President and 2-23-99
- ---------------------------- Chief Actuary ------------------
W. Thomas Aycock
/s/ Tony G. Brill Director and Executive Vice 2-23-99
- ---------------------------- President - Administration ------------------
Tony G. Brill
Senior Vice President - Marketing
- ---------------------------- ------------------
Mark S. McAndrew
Director
- ---------------------------- ------------------
Larry M. Hutchison
/s/ Michael J. Klyce Vice President and Treasurer 2-23-99
- ---------------------------- ------------------
Michael J. Klyce
/s/ James L. Mayton, Jr. Vice President and Controller 2-23-99
- ---------------------------- ------------------
James L. Mayton, Jr.
/s/ John H. Livingston Director, Secretary and Counsel 2-23-99
- ---------------------------- ------------------
John H. Livingston
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Carol A. McCoy Director and Assistant Secretary 2-23-99
- --------------------------- ------------------
Carol A. McCoy
/s/ Ross W. Stagner Director and Vice President 2-23-99
- --------------------------- ------------------
Ross W. Stagner
/s/ Terry W. Davis Director 2-23-99
- --------------------------- ------------------
Terry W. Davis
</TABLE>
