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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
The Rydex Advisor Variable Annuity Account
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(Name of Registrant as Specified In Its Charter)
same
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(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11(1).
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
6116 EXECUTIVE BOULEVARD, SUITE 400
ROCKVILLE, MARYLAND 20852
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NOTICE TO PRECIOUS METALS SUBACCOUNT CONTRACT OWNERS
DEAR CONTRACT OWNERS:
The enclosed proxy statement solicits your written consent to rescind the
following fundamental investment policy applicable to the Precious Metals
Subaccount:
A Subaccount shall not:
Purchase the securities of any issuer if the purchase would cause more than
5% of the value of the Subaccount's total assets to be invested in the
securities of any one issuer (excluding U.S. Government Securities) or
cause more than 10% of the voting securities of the issuer to be held by
the Subaccount, except that up to 25% of the value of each Subaccount's
total assets may be invested without regard to these restrictions.
The purpose of the proposal is to permit the Precious Metals Subaccount to
invest assets in the securities of a smaller number of issuers. The Board of
Managers believe that this additional investment flexibility would help the
Subaccount meet its investment objective. Nonetheless, to the extent that the
Subaccount would invest a significant portion of its assets in a limited number
of issuers, the Subaccount would be more susceptible to a single adverse
economic event.
If the above proposal does not receive the unanimous written consent of each
Contract Owner, as of June 24, 1998 (the record date), the proposal will not be
approved. If the proposal is not approved, the Board of Managers of the Rydex
Advisor Variable Annuity Account may consider calling a meeting of Contract
Owners to reconsider the proposal.
By order of the Board of Managers
Robert Steele
Secretary
Dated: July 1, 1998
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RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
WRITTEN CONSENT
The undersigned, being all Contract Owners of the Precious Metals
Subaccount of the Rydex Advisor Variable Annuity Account (the "Account"), a
separate account of Great American Reserve Insurance Company authorized under
the laws of the State of Texas, and acting pursuant to Article II, Section 10 of
the Account's Rules and Regulations, hereby unanimously consent to and adopt the
following votes:
VOTED: That the following fundamental policy of the Rydex Advisor Variable
Annuity Account (the "Account"), as it applies to the Precious Metals
Subaccount, be, and hereby is, rescinded:
1. Purchase the securities of any issuer if the purchase would cause
more than 5% of the value of the Subaccount's total assets to be
invested in the securities of any one issuer (excluding U.S.
Government Securities) or cause more than 10% of the voting
securities of the issuer to be held by the Subaccount, except
that up to 25% of the value of each Subaccount's total assets may
be invested without regard to these restrictions.
This consent, which may be executed in a number of counterparts, shall have
the same effect as a vote adopted at a meeting of the Contract Owners of the
Account.
IN WITNESS WHEREOF, the undersigned have executed this Written Consent as of
the ____ day of July, 1998.
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Albert P. Viragh, Jr.
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Richard A. Livellara
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Elhert Carlson
IF YOU DO NOT CONSENT
TO THE ABOVE VOTE,
PLEASE RETURN THIS
CONSENT UNSIGNED.
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RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
6116 EXECUTIVE BOULEVARD, SUITE 400
ROCKVILLE, MARYLAND 20852
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PROXY STATEMENT
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This Proxy Statement is furnished by the Board of Managers (the "Board") of
the Rydex Advisor Variable Annuity Account (the "Separate Account") on behalf of
the Precious Metals Subaccount (the "Subaccount"), in connection with the
solicitation of the unanimous written consent of Contract Owners, in lieu of a
special meeting of Contract Owners of the Subaccount. It is expected that the
Notice, the Proxy Statement and Written Consent will be mailed to Contract
Owners on or about June 30, 1998.
The primary purpose of the Written Consent is to approve a proposal to
rescind a fundamental investment policy currently applicable to the Subaccount.
The expense of seeking the written consent of Contract Owners will be borne
by PADCO Advisors II and its affiliates ("PADCO"). The solicitation of the
unanimous written consent of Contract Owners will be largely by mail, but may
include telephonic, telegraphic or oral communication by employees and officers
of PADCO. The close of business on June 24, 1998, has been fixed as the record
date (the "Record Date") for the determination of Contract Owners entitled to
respond to the enclosed Written Consent.
THE SUBACCOUNT WILL FURNISH TO CONTRACT OWNERS, WITHOUT CHARGE, A COPY OF
THE ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997, UPON REQUEST.
THE ANNUAL REPORT OF RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT MAY BE OBTAINED BY
WRITTEN REQUEST TO RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT, 6116 EXECUTIVE
BOULEVARD, SUITE 400, ROCKVILLE, MARYLAND 20852 OR BY CALLING (888) 667-4936.
The Separate Account is registered as an open-end management investment
company under the Investment Company Act of 1940 (the "1940 Act").
PROPOSAL 1: TO CONSENT TO RESCIND A FUNDAMENTAL INVESTMENT POLICY.
The Board of Managers of the Separate Account, including all of the Managers who
are not "interested persons" of the Separate Account (as defined in the 1940
Act) recommends that Contract Owners of the Subaccount consent to the
elimination of the following fundamental investment policy:
The Subaccount shall not:
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Purchase the securities of any issuer if the purchase would cause more than
5% of the value of the Subaccount's total assets to be invested in the
securities of any one issuer (excluding U.S. Government Securities) or
cause more than 10% of the voting securities of the issuer to be held by
the Subaccount, except that up to 25% of the value of each Subaccount's
total assets may be invested without regard to these restrictions.
It is proposed that this investment restriction be eliminated so that the
Subaccount may invest in a smaller number of issuers. Although the elimination
of this investment restriction could make the Subaccount more susceptible to a
single adverse economic event, the Board of Managers believes that elimination
of the restriction would allow the Subaccount more flexibility to achieve the
performance of its benchmark, currently the Philadelphia Stock Exchange
Gold/Silver Index-TM-. In fact, PADCO has informed the Board of Managers that
it would be unable to continue to achieve the performance of the current
benchmark if the current restriction is not rescinded.
Because the Subaccount is currently subject to the above restriction, the
Subaccount is considered a "diversified" subaccount, as that term is defined in
the 1940 Act. If Contract Owners consent to rescind the restriction, the
Subaccount would be considered a "non-diversified" subaccount. Nonetheless,
even if the restriction is eliminated, the Subaccount would remain subject to
certain diversification requirements of the Internal Revenue Code of 1986.
CONTRACT OWNER APPROVAL
To rescind the fundamental investment policy that restricts the
Subaccount's ability to invest in a limited number of issuer, you must sign,
date and return the enclosed written consent. Once you have returned the
Written Consent, you may not revoke your consent. If the Proposal is not
approved by Contract Owners of the Subaccount, the Board will consider calling a
special meeting of Contract Owners to reconsider the Proposal.
THE BOARD OF MANAGERS RECOMMENDS THAT THE CONTRACT OWNERS OF THE SUBACCOUNT
CONSENT TO THE PROPOSAL.
ADDITIONAL INFORMATION
INVESTMENT ADVISER
PADCO Advisors II, located at 6116 Executive Boulevard, Suite 400, Rockville,
Maryland 20852, is the investment adviser for the Subaccount.
PRINCIPAL UNDERWRITER
PADCO Financial Services, Inc., located at 6116 Executive Boulevard, Suite 400,
Rockville, Maryland 20852, is the underwriter for the Separate Account.
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ADMINISTRATOR
PADCO Service Company, Inc., located at 6116 Executive Boulevard, Suite 400,
Rockville, Maryland 20852, is the administrator for the Separate Account.
BENEFICIAL OWNERS
To the Separate Account's knowledge, as of the Record Date, the following were
the beneficial owners of the outstanding units of the Subaccount.
<TABLE>
<CAPTION>
Amount of Beneficial Percent of Total Units
Name and Address Ownership Outstanding
<S> <C> <C>
Richard A. Livellara 1,738.629 17.2%
P.O. Box 165 Mill Brook Road
Danby, VT 05739
Elhert Carlson 283.655 2.8%
4710 Charles Street
Rockford, IL 61108
Skip Viragh Trust* 8,070.542 80.0%
6116 Executive Boulevard, Suite 400
Rockville, Maryland 20852
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* Albert P. Viragh, Jr., President of the Adviser and a member of the Board
of Managers, may be deemed to be the beneficial owner.
</TABLE>
SUBMISSION OF SHAREHOLDER PROPOSALS
The Subaccount is not required to hold annual Contract Owner meetings.
Contract Owners wishing to submit proposals for inclusion in a proxy statement
for a subsequent meeting should send their written proposals to Rydex Advisor
Variable Annuity Account, 6116 Executive Boulevard, Suite 400, Rockville,
Maryland 20852, c/o secretary, Rydex Advisor Variable Annuity Account.
CONTRACT OWNERS ARE REQUESTED TO SIGN, DATE AND RETURN THE ENCLOSED
WRITTEN CONSENT PROMPTLY. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
By Order of the Managers,
Robert Steele
Secretary
Dated: July 1, 1998
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