As filed with the
Securities and
Exchange Commission
on August ___, 1996
Registration Nos.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OF 1933 Pre-Effective Amendment
No.
Post-Effective Amendment No.
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No.
SEPARATE ACCOUNT VA-6
(Exact Name of Registrant)
TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY
(Name of Depositor)
101 North Tryon Street, Charlotte, North Carolina 28202
(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number, including Area Code: (704) 344-2700
Name and Address of Agent for Service: Copy to:
JAMES W. DEDERER, Esq. FREDERICK R. BELLAMY, Esq.
Executive Vice President, General Counsel and Sutherland, Asbill & Brennan
and Corporate Secretary 1275 Pennsylvania Avenue, N.W.
Transamerica Occidental Life Insurance Company Washington, D.C. 20004-2404
1150 South Olive Street
Los Angeles, California 90015-2211
Approximate date of proposed public offering: As soon as
practicable after effectiveness of the Registration Statement.
Title of securities being registered:
Interests in a separate account under flexible premium deferred
variable annuity contracts.
DECLARATION PURSUANT TO RULE 24f-2
An indefinite amount of securities is being registered under the Securities Act
of 1933 pursuant to
Rule 24f-2 under the Investment Company Act of 1940. A filing fee of $500 is
being paid with this filing of the initial registration statement.
-------------------
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
shall determine.
<PAGE>
CROSS REFERENCE SHEET
Pursuant to Rule 495
Showing Location in Part A (Prospectus),
Part B (Statement of Additional Information) and Part C
of Registration Statement Information Required by Form N-4
PART A
Item of Form N-4 Prospectus Caption
1. Cover Page. . . . . . . . . . . Cover Page
2. Definitions . . . . . . . . . . Terms Used in this Prospectus
3. Synopsis. . . . . . . . . . . . Synopsis of this Prospectus; Variable
Annuity Fee Table
4. Condensed Financial Information Condensed Financial Information
5. General
(a) Depositor Transamerica and the Separate Account
(b) Registrant. . . Transamerica and the Separate Account
(c) Portfolio Company . The Funds
(d) Fund Prospectus . . The Funds
(e) Voting Rights . Voting Rights
(f) Administrator. Charges under the Contracts
6. Deductions and Expenses
(a) General . Charges under the Contracts
(b) Sales Load %. . Charges under the Contracts
(c) Special Purchase Plan . . Not Applicable
(d) Commissions . . Underwriter
(e) Fund Expenses . Charges under the Contracts
(f) Operating Expenses. Fee Table
7. Contracts
(a) Persons with Rights Description of the Contracts; Surrender of a
Contract; Death Benefits; Voting Rights
(b) (i) Allocation of Purchase Payments
Payments. . . . . . . . Description of the Contracts
(ii) Transfers . . . . . . . Not Applicable
(iii) Exchanges . . . . . . . Federal Tax Status
(c) Changes . The Funds; Voting Rights
(d) Inquiries Voting Rights
8. Annuity Period. . . . . . . . . Annuity Period
9. Death Benefit . . . . . . . . . Death Benefits
10. Purchase and Contract Value
(a) Purchases Description of the Contracts
(b) Valuation Description of the Contracts
(c) Daily Calculation . Description of the Contracts
(d) Underwriter . . Underwriter
11. Redemptions
(a) By Contract Owners. Surrender of a Contract
By Annuitant. . . . . . . . . Not Applicable
(b) Texas ORP Not Applicable
(c) Check Delay . . Surrender of a Contract
(d) Lapse . . Not Applicable
(e) Free Look Not Applicable
12. Taxes . . . . . . . . . . . . Federal Tax Status
13. Legal Proceedings . . . . . . Legal Proceedings
14. Table of Contents for the
Statement of
Additional Information. . .Table of Contents of the Statement of Additional
Information
PART B
Item of Form N-4 Statement of Additional Information Caption
15. Cover Page. . . . . . . . . . Cover Page
16. Table of Contents . . . . . . Table of Contents
17. General Information
and History . . . . . . . . . . General Information and History
18. Services
(a) Fees and Expenses
of Registrant . . . . . . (Prospectus) Fee Table; (Prospectus) The Funds
(b) Management Contracts. . . Not Applicable
(c) Custodian Safekeeping of Separate Account Assets;
Records and Reports
Independent Auditors . . . . Accountants
(d) Assets of Registrant. . . Not Applicable
(e) Affiliated Person . Not Applicable
(f) Principal Underwriter . . The Underwriter
19. Purchase of Securities
Being Offered . . . . . . . . . (Prospectus) Description of the Contracts
Offering Sales Load . . . . . . Charges under the Contracts
20. Underwriters. . . . . . . . . The Underwriter
21. Calculation of Performance
Data. . . . . . . . . . . . . . Calculation of Yields and Total Returns
22. Annuity Payments. . . . . . . (Prospectus) Annuity Period
23. Financial Statements. . . . . Financial Statements
PART C -- OTHER INFORMATION
Item of Form N-4 Part C Caption
24. Financial Statements
and Exhibits
(a) Financial Statements. .Financial Statements
(b) Exhibits. Exhibits
25. Directors and Officers of
the Depositor . . . . . . . . . Directors and Officers of the Depositor
26. Persons Controlled By or Under Common Control
with the Depositor or Registrant Persons Controlled By or Under Common
Control with the Depositor or Registrant
27. Number of Contract Owners . . Number of Contract Owners
28. Indemnification . . . . . . . Indemnification
29. Principal Underwriters. . . . Principal Underwriter
30. Location of Accounts
and Records . . . . . . . . . . Location of Accounts and Records
31. Management Services . . . . . Management Services
32. Undertakings. . . . . . . . . Undertakings
Signature Page. . . . . . . . . Signature Page
<PAGE>
PART A
PROSPECTUS
<PAGE>
PROSPECTUS FOR
TRANSAMERICA XYZ ANNUITY
A Variable Annuity Issued by
Transamerica Life Insurance
and Annuity Company
Including Fund Prospectuses for
[Underlying Mutual Funds]
October 1, 1996
<PAGE>
XYZ VARIABLE ANNUITY
Issued by
TRANSAMERICA LIFE INSURANCE AND ANNUITY
COMPANY 101 North Tryon Street, Charlotte, North
Carolina 28202
This Prospectus describes XYZ Variable Annuity, a variable annuity
contract (the "Contract") issued by Transamerica Life Insurance and Annuity
Company ("Transamerica"). The Contract is designed to aid individuals in
long-term financial planning and for retirement or other long-term purposes.
The Owner may allocate Purchase Payments to one or more Sub-Accounts of
Separate Account VA-6 (the "Variable Account"), or to the General Account
Options, or to both.
The Account Value, except for amounts in the General Account Options,
will vary in accordance with the investment performance of the Funds in which
the selected Sub-Accounts are invested. The Contract Owner bears the entire
investment risk under the Contract for all amounts allocated to the Variable
Account. There is no guaranteed or minimum withdrawal value for amounts in the
Variable Account; the Cash Surrender Value or Annuity Purchase Amount could be
less than the Purchase Payments invested in the Contract.
This Prospectus sets forth the basic information that a prospective
investor should know before investing. A "Statement of Additional Information"
containing more detailed information about the Contract is available free by
writing Transamerica Life Insurance and Annuity Company, Annuity Service Center,
P.O. Box XXXXX, Charlotte, North Carolina 28231-1848 or by calling (800)
258-4260. The Statement of Additional Information, which has the same date as
this Prospectus, has been filed with the Securities and Exchange Commission and
is incorporated herein by reference. The table of contents of the Statement of
Additional Information is included at the end of this Prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
Please read this Prospectus carefully and retain it
for future reference. The date of this
Prospectus is October 1, 1996.
The Variable Account is divided into Sub-Accounts. Each Sub-Account
is invested in
shares of a specific mutual fund portfolio ("Fund"). The Funds that are
currently available for
investment under the Contract are: [The Funds will be identified in the
Pre-Effective
Amendment.]
The Account Value and the amount of any variable Annuity Payments will
vary to reflect the investment performance of the Sub-Account(s) selected by the
Owner and the deduction of the Contract charges.
<PAGE>
Currently two General Account Options are available. One, the
Seven-Year Guaranteed Equity Index Option, provides a return linked to the S&P
500(R) Index over a seven year term, but with a guaranteed return of no less
than 110% of your allocation at the end of the term. The other General Account
Option, the Fixed Rate Option, provides a fixed rate of interest for a specified
term, subject to a market value adjustment on early withdrawals which, if
applicable, could reduce the interest credited to the 3% minimum rate.
The Contract provides for monthly Annuity Payments to be made by
Transamerica on a fixed or a variable or combination of a fixed and variable
basis for the life of the Annuitant or for some other period, beginning on the
first day of the month following the Annuity Date selected by the Owner.
Before the Annuity Date, the Owner can transfer amounts between and
among the Sub-Accounts of the Variable Account. After the Annuity Date, some
transfers are permitted among the Sub-Accounts if the Owner selects a Variable
Annuity Payment Option. Before the Annuity Date, the Owner can also elect to
withdraw all or a portion of the Cash Surrender Value in the Variable Account in
exchange for a cash payment from Transamerica. Withdrawals and transfers out of
the General Account Options may be permitted only at certain limited time
periods or may be subject to a market value adjustment. All withdrawals may be
subject to a Contingent Deferred Sales Load, premium taxes, federal tax and/or a
tax penalty.
The Transamerica XYZ Variable Annuity will be issued as a certificate
under a group annuity contract in some states and as an individual annuity
contract in other states. The term "Contract" as used herein refers to both the
individual contract and the certificates issued under the group contract.
This Prospectus must be accompanied by current prospectuses
for the Funds.
- -------------------------------------------------------------------------
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO DEALER, SALESMAN, OR OTHER PERSON IS
AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.
- ---------------------------------------------------------------------------
An investment in the Contract is not a deposit or obligation of, or
guaranteed or endorsed by, any bank, nor is the Contract federally
insured by the Federal Deposit Insurance Corporation,
the Federal Reserve Board or any other government agency.
Investing in the Contract involves certain investment
risks, including possible loss of principal.
This Prospectus generally describes only the Variable
Account portion of the Contract, except when the
General Account Options are specifically mentioned.
2
<PAGE>
TABLE OF CONTENTS
Page
DEFINITIONS....................................................
SUMMARY........................................................
CONDENSED FINANCIAL INFORMATION................................
PERFORMANCE DATA...............................................
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY AND THE
VARIABLE ACCOUNT..............................................
Transamerica Occidental Life Insurance Company........
Published Ratings.....................................
The Variable Account..................................
THE FUNDS......................................................
THE CONTRACT...................................................
Qualified Contracts...................................
APPLICATION AND PURCHASE PAYMENTS..............................
Purchase Payments.....................................
Allocation of Purchase Payments.......................
ACCOUNT VALUE..................................................
TRANSFERS......................................................
Before the Annuity Date...............................
Telephone Transfers...................................
Possible Restrictions.................................
Dollar Cost Averaging.................................
After the Annuity Date................................
CASH WITHDRAWALS...............................................
Withdrawals...........................................
Systematic Withdrawal Option..........................
Automatic Payout Option (APO).........................
Restrictions under Section 403(b) Programs............
DEATH BENEFIT..................................................
Payment of Death Benefit..............................
Designation of Beneficiaries..........................
Death of Annuitant Prior to the Annuity Date..........
Death of Owner Prior to the Annuity Date..............
Death of Annuitant or Owner After the Annuity Date....
CHARGES AND DEDUCTIONS.........................................
Contingent Deferred Sales Load........................
Administrative Charges................................
Mortality and Expense Risk Charge.....................
Enhanced Death Benefit Charge
Premium Taxes.........................................
Transfer Fee..........................................
Systematic Withdrawal Option..........................
Taxes.................................................
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Fund Expenses..............................................
Market Value Adjustment....................................
ANNUITY PAYMENTS....................................................
Annuity Date...............................................
Annuity Payment............................................
Election of Annuity Forms and Payment Options..............
Annuity Payment Options....................................
Fixed Annuity Payment Option...............................
Variable Annuity Payment Option............................
Annuity Forms..............................................
Alternate Fixed Annuity Rates..............................
FEDERAL TAX MATTERS.................................................
Introduction...............................................
Taxation of Annuities......................................
Qualified Contract.........................................
Possible Changes in Taxation...............................
Other Tax Consequences.....................................
General....................................................
DISTRIBUTION OF THE CONTRACT........................................
LEGAL PROCEEDINGS...................................................
LEGAL MATTERS.......................................................
ACCOUNTANTS.........................................................
VOTING RIGHTS.......................................................
AVAILABLE INFORMATION...............................................
STATEMENT OF ADDITIONAL
INFORMATION - TABLE OF CONTENTS.........................................
APPENDIX A - THE GENERAL ACCOUNT OPTIONS.............................A-1
Equity Index Option.........................................A-1
Fixed Rate Option...........................................A-1
APPENDIX B...........................................................B-1
Example of Variable Accumulation Unit Value Calculations....B-1
Example of Variable Annuity Unit Value Calculations.........B-1
Example of Variable Annuity Payment Calculations............B-1
The Contract is not available in all states.
4
<PAGE>
DEFINITIONS
Account: The account established and maintained under the Contract to which
the Owner's Net Purchase Payments are credited.
Account Value: The Account Value is equal to the sum of: (a) the General
Account Value, plus (b) the Variable Account Value.
Active Sub-Account: A Sub-Account of the Variable Account in which the
Contract has current value.
Annuitant: The person whose life is used to determine the amount of monthly
Annuity Payments on the Annuity Date.
Annuitant's Beneficiary: The person or persons named by the Owner who may
receive the death benefits under the Contract if: (a) there is no named
Contingent Annuitant and the Annuitant dies before the Annuity Date; or (b) the
Annuitant dies after the Annuity Date under an Annuity Form containing a period
certain option.
Annuity Date: The date on which the Annuity Purchase Amount will be applied to
provide an Annuity under the Annuity Form and Payment Option selected by the
Owner. Unless a different Annuity Date is elected under the annuity provisions,
the Annuity Date will be as shown in the Contract.
Annuity Payment: An amount paid by Transamerica at regular intervals to the
Annuitant and/or any other Payee. It may be on a variable or fixed basis.
Annuity Purchase Amount: The Annuity Purchase Amount is the amount applied as a
single premium to provide an annuity under the Annuity Form and Payment Option
elected by the Owner. The Annuity Purchase Amount is equal to: (a) the Account
Value; less (b) any market value adjustment; less (c) any applicable Contingent
Deferred Sales Load; less (d) the pro rata portion of the Enhanced Death Benefit
Charge, if applicable; and less (e) any applicable premium taxes. In determining
the Annuity Purchase Amount, Transamerica will waive the Contingent Deferred
Sales Load if the Annuity Form elected involves life contingencies and the
Annuity Date occurs on or after the third Contract Anniversary.
Annuity Year: A one-year period starting on the Annuity Date and, after that,
each succeeding one-year period.
Cash Surrender Value: The amount payable to the Owner if the Contract is
surrendered on or before the Annuity Date. The Cash Surrender Value is equal
to: (a) the Account Value; less (b) the annual Account Fee, if any; less
(c) any applicable market value adjustment; less (d) any
5
<PAGE>
applicable Contingent Deferred Sales Load; less (e) any applicable pro rata
portion of the Enhanced Death Benefit Charge; less (f) any applicable premium
taxes; and less (g) any amounts in the Seven-Year Guaranteed Equity Index Option
if the Option's term has not ended.
Code: The U.S. Internal Revenue Code of 1986, as amended, and the rules and
regulations issued thereunder.
Contingent Annuitant: The person who: (a) becomes the Annuitant if the Annuitant
dies before the Annuity Date; or (b) may receive benefits under the Contract if
the Annuitant dies after the Annuity Date under an Annuity Form containing a
contingent annuity option.
Contract: An individual annuity contract issued to an individual by
Transamerica, or a certificate issued to an individual which evidences his or
her coverage under a group annuity contract.
Contract Anniversary: The same month and day as the Contract Date in each
calendar year after the calendar year in which the Contract Date occurs.
Contract Date: The effective date of the Contract as shown on the Contract.
Contract Year: The 12-month period from the Contract Date and ending with the
day before the Contract Anniversary and each twelve month period thereafter. The
first Contract Year for any particular Net Purchase Payment is the Contract Year
in which the Purchase Payment is received by the Service Center.
Fixed Annuity: An annuity with predetermined payment amounts.
Funds: [ID mutual funds]
General Account: The General Account consists of the general assets of
Transamerica, excluding those allocated to a separate account of Transamerica.
General Account Option: Either of the two General Account options to which Net
Purchase Payments and Account Value may be allocated: the Seven-Year
Guaranteed Equity Index Option and the Fixed Rate Option.
Inactive Sub-Account: A Sub-Account of the Variable Account in which the
Contract has a zero balance.
Joint Owners: Must be husband and wife as of the Contract Date (except in
Pennsylvania).
Net Investment Factor: An index that measures the investment performance of
a Sub-Account from one Valuation Period to the next.
6
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Net Purchase Payment: A Purchase Payment reduced by any applicable premium tax
(including retaliatory premium taxes).
Non-Qualified Contract: A Contract other than a Qualified Contract.
Owner: The person or persons who, while living, control(s) all rights and
benefits under an individual annuity contract, or under a certificate issued
under a group annuity contract.
Owner's Beneficiary: The person who becomes the Owner if the Owner dies. If
the Contract has Joint Owners, the surviving Joint Owner will be the Owner's
Beneficiary.
Payee: The person who receives the annuity payments after the Annuity Date.
The Payee will Be the Annuitant, unless otherwise changed by the Owner.
Proof of Death: May be: (a) a copy of a certified death certificate; (b) a copy
of a certified decree of a court of competent jurisdiction as to the finding of
death; (c) a written statement by a medical doctor who attended the deceased; or
(d) any other proof satisfactory to Transamerica.
Qualified Contract: A Contract used in connection with an individual retirement
annuity which receives favorable federal income tax treatment under Sections
403(b) or 408 of the Code or with various types of pension and profit sharing
plans which receive favorable tax treatment under Section 401 of the Code.
Contracts qualified under Sections 401 and 403(b) may not be available in all
states.
Receipt: Receipt and acceptance by Transamerica at its Service Center.
Service Center: Transamerica's Annuity Service Center, at P.O. Box XXXXX,
Charlotte, North Carolina 28231-1848, and at telephone (800) 258-4260.
Sub-Account: A subdivision of the Variable Account investing solely in shares
of one of the Funds.
Valuation Day: Any day the New York Stock Exchange is open for trading.
Valuation occurs currently as of 4:00 p.m. ET each Valuation Day.
Valuation Period: The time interval between the closing of the New York Stock
Exchange on consecutive Valuation Days.
Variable Account: Separate Account VA-6, a separate account established and
maintained by Transamerica for the investment of a portion of its assets
pursuant to Section 58-7-95 of the North Carolina Insurance Code. The Variable
Account contains several Sub-Accounts to which all or portions of Net Purchase
Payments and transfers may be allocated.
7
<PAGE>
Variable Account Value: The total dollar amount of all Variable Accumulation
Units under each Sub-Account of the Variable Account held prior to the Annuity
Date. The Variable Account Value prior to the Annuity Date is equal to: (a) Net
Purchase Payments allocated to the SubAccounts; plus or minus (b) any increase
or decrease in the value of the assets of the SubAccounts due to investment
results; less (c) the daily Mortality and Expense Risk Charge; less (d) the
Enhanced Death Benefit Charge, if applicable; less (e) the daily Administrative
Expense Charge; less (f) the annual Account Fee, if applicable; plus or minus
(g) amounts transferred from or to the General Account Options; less (h) any
applicable Transfer Fees; and less (i) withdrawals from the Sub-Accounts.
Variable Accumulation Unit: A unit of measure used to determine the Variable
Account Value prior to the Annuity Date. The value of a Variable Accumulation
Unit varies with each Sub-Account.
Variable Annuity: An annuity with payments which vary as to dollar amount in
relation to the
investment performance of specified Sub-Accounts of the Variable Account.
Variable Annuity Unit: A unit of measure used to determine the amount of the
second and each subsequent payment under a Variable Annuity Payment Option. The
value of a Variable Annuity Unit varies with each Sub-Account.
Withdrawals: Refers to partial withdrawals, full surrenders, and systematic
withdrawals that are paid in cash to the Owner.
8
<PAGE>
SUMMARY
The Contract
The Flexible Purchase Payment Multi-Funded Deferred Annuity Contract
described in this Prospectus is designed to aid individuals in long-term
financial planning and for retirement or other long-term purposes. The Contract
may be used in connection with a retirement plan which qualifies as a retirement
program under Sections 403(b) or 408 of the Code, with various types of
qualified pension and profit sharing plans under Section 401 of the Code, or
with non-qualified plans. Contracts qualified under Sections 401 and 403(b) may
not be available in all states. The Contract is issued by Transamerica Life
Insurance and Annuity Company ("Transamerica"), a wholly-owned subsidiary of
Transamerica Occidental Life Insurance Company, which is a wholly-owned
subsidiary of Transamerica Insurance Corporation of California, which in turn is
a direct subsidiary of Transamerica Corporation. Its principal office is at 101
North Tryon Street, Charlotte, North Carolina 28202, telephone 704-344-2700.
The term "Contract" as used herein refers to either the individual
annuity contract or to a certificate issued under a group annuity contract. The
term "Owner" refers to the owner of the individual contract or the owner of the
certificate, as appropriate.
Transamerica will establish and maintain an Account for each individual
annuity contract and for each certificate issued under a group contract. Each
Owner will receive either an individual annuity contract, or a certificate
evidencing the Owner's coverage under a group annuity contract. The Contract
provides that the Account Value, after certain adjustments, will be applied to
an Annuity Form and Payment Option on a selected future date ("Annuity Date").
The Owner may allocate all or portions of Net Purchase Payments to one
or more SubAccounts of the Variable Account, to the General Account Options, or
to both.
The Account Value prior to the Annuity Date, except for amounts in the
General Account Options, will vary depending on the investment experience of
each Sub-Account of the Variable Account selected by the Owner. All payments and
values provided under the Contract, when based on the investment experience of
the Variable Account, are variable and are not guaranteed as to dollar amount.
Therefore, prior to the Annuity Date the Owner bears the entire investment risk
under the Contract for amounts allocated to the Variable Account.
There is no guaranteed or minimum Cash Surrender Value, so the proceeds
of a surrender could be less than the total Purchase Payments.
The initial Purchase Payment for each Contract must be at least $5,000
($2,000 for IRAs). Generally each additional Purchase Payment must be at least
$500, unless an automatic payment plan is selected. In no event, however, may
the total of all Purchase Payments under a Contract exceed $1,000,000 without
the prior approval of Transamerica. (See "Application and Purchase Payments"
page __.)
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The Variable Account
The Variable Account is a separate account (designated Separate Account
VA-6) that is subdivided into Sub-Accounts. (See "The Variable Account" page
__.) Assets of each Sub-Account are invested in a specified mutual fund
portfolio ("Fund"). Each Sub-Account uses its assets to purchase, at their net
asset value, shares of a specific Fund. The Funds currently available for
investment are: [To be listed in Pre-Effective Amendment.] Each Fund has
distinct investment objectives and policies which are described in the
accompanying prospectuses for the Funds.
The Funds pay their investment advisers and administrators certain fees
charged against the assets of each Fund. The Variable Account Value, if any, of
a Contract and the amount of any Variable Annuity Payments will vary to reflect
the investment performance of all of the Sub-Accounts selected by the Owner and
the deduction of the charges described under "Charges and Deductions" page __.
For more information about the Funds, see "The Funds" page __ and the
accompanying Funds' prospectuses.
General Account Options
There are currently two General Account Options available. One, the
Seven-Year Guaranteed Equity Index Option, provides a return linked to the S&P
500(R) Index over a seven year term, but with a guaranteed return of no less
than 110% of your investment at the end of the seven year term. Each Seven-Year
Guaranteed Equity Index Option is illiquid for the entire seven-year term. This
means that no transfers or withdrawals are permitted from a Seven-Year
Guaranteed Equity Index Option during such seven-year term.
The other General Account Option, the Fixed Rate Option, provides a
fixed rate of interest for a specified term, subject to a market value
adjustment on early withdrawals which, if applicable, could reduce the interest
credited to the 3% minimum rate. (See "The General Account Options" in Appendix
A.)
Transfers Before the Annuity Date
Prior to the Annuity Date, the Owner may transfer values between and
among the Sub-Accounts of the Variable Account. (For Transfers after the Annuity
Date, see "After the Annuity Date" page __.)
Transfers out of any Seven-Year Guaranteed Equity Index Option are
permitted only during the 30-day renewal window at the end of the applicable
seven-year term. Transfers out of the Fixed Rate Option prior to the end of its
term will be subject to a market value adjustment which may reduce interest
credited to no less than the 3% minimum rate. (See "General Account Options" in
Appendix A.)
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Total transfers are limited to eighteen during a Contract Year. See
"Transfers" on page __ for additional limitations regarding transfers.
Transamerica currently does not impose a Transfer Fee, but it reserves the right
to charge a Transfer Fee for each transfer in excess of six made during the same
Contract Year. (See "Transfer Fee" page __.)
Withdrawals
All or part of the Cash Surrender Value in the Variable Account may be
withdrawn by the Owner on or before the Annuity Date. No partial withdrawals
will be permitted while the Systematic Withdrawal Option is in effect. However,
amounts withdrawn may be subject to a Contingent Deferred Sales Load depending
upon how long the withdrawn Purchase Payments have been held under the Contract.
TRANSAMERICA GUARANTEES THAT THE AGGREGATE CONTINGENT DEFERRED SALES LOAD WILL
NEVER EXCEED 6% OF THE PURCHASE PAYMENTS. (See "Contingent Deferred Sales Load"
page __.) Amounts withdrawn also may be subject to a premium tax or similar tax,
depending upon the state in which the Owner lives. Withdrawals may further be
subject to any federal, state or local income tax, and subject to a penalty tax.
Withdrawals from Section 403(b) annuities may be subject to severe restrictions.
(See "Federal Tax Matters" page __.) The annual Account Fee and the Enhanced
Death Benefit Charge, if applicable, generally will be deducted pro rata on a
full surrender of a Contract. (See "Withdrawals" page __ for additional
limitations regarding withdrawals.)
Amounts withdrawn from the Fixed Rate Option prior to the end of its
term will also be subject to a market value adjustment which, if applicable, may
reduce the interest credited to 3% per year. (See "Fixed Rate Option" in
Appendix A.) Withdrawals from any Seven-Year Guaranteed Equity Index Option can
only be made at the end of the applicable seven-year term. (See "General Account
Options" in Appendix A.) Transamerica may delay payment of any withdrawal from
the General Account Options for up to six months. (See "Cash Withdrawals" page
__.)
Contingent Deferred Sales Load
Transamerica does not deduct a sales charge from Purchase Payments
(although premium taxes may be deducted). However, if any part of the Account
Value is withdrawn, a Contingent Deferred Sales Load of up to 6% of Purchase
Payments may be charged by Transamerica to cover certain expenses relating to
the sale of the Contracts, including commissions to registered representatives
and other promotional expenses. After a Purchase Payment has been held by
Transamerica for seven Contract Years, it may be withdrawn without charge. In
certain states the Contingent Deferred Sales Load is waived on a withdrawal if
the Owner is confined to a hospital or nursing care facility for 45 days out of
a continuous 60 day period. No Contingent Deferred Sales Load is assessed on
death, on transfers, or on certain annuitizations. (See "Contingent Deferred
Sales Load" page __ and "Withdrawals" page __.)
11
<PAGE>
In addition, any portion of a free withdrawal amount may be withdrawn
once each year after the first Contract Year without imposition of any
Contingent Deferred Sales Load. The free withdrawal amount available for the
first withdrawal in each Contract Year is equal to the greater of (a)
accumulated earnings not previously withdrawn, or (b) 10% of Purchase Payments
held at least one but less than seven Contract Years prior to the day of
withdrawal, not adjusted for any prior withdrawals deemed to be made from such
Purchase Payments. Withdrawals will be made first from earnings and then from
Purchase Payments on a first in/first out basis. After the first withdrawal in a
Contract Year, free withdrawals can be made only from available earnings.
Other Charges and Deductions
Transamerica deducts a daily charge (the "Mortality and Expense Risk
Charge") equal to 1.25% of the value of the net assets in the Variable Account
for the mortality and expense risks assumed.
Transamerica also deducts a daily charge (the "Administrative Expense
Charge") equal to a percentage of the value of the net assets in the Variable
Account corresponding to an effective annual rate of 0.15% to help cover some of
the costs of administering the Contracts and the Variable Account. This charge
may change, but it is guaranteed not to exceed a maximum effective annual rate
of 0.25% (See "Administrative Charges" page __.)
An administrative charge (the "Account Fee") is deducted each year for
Contract maintenance. This fee currently is $30 (or 2% of the Account Value, if
less) deducted at the end of each Contract Year. This fee may change but it is
guaranteed not to exceed $60 (or 2% of the Account Value, if less) per Contract
Year. In certain states, if the Account Value is over $50,000 on the last
business day of a Contract Year, or if earlier, as of the date the Contract is
surrendered, the Account Fee will be waived for that year. The Account Fee is
deducted pro rata from each Sub-Account of the Variable Account in which the
Owner is invested at the time the fee is deducted.
After the Annuity Date, the annual Annuity Fee of $30 will be deducted
in equal installments from each periodic annuity payment under the Variable
Annuity Payout Options.
(See "Administrative Charges" page __.)
Currently, no Transfer Fees are imposed. However, for each transfer
in excess of six during a Contract Year, a Transfer Fee may be imposed equal
to no more than $10. (See "Transfer Fee" page __.)
Charges for state premium taxes (including retaliatory premium taxes)
will be imposed in some states. Depending on the applicability of such state
taxes, the charges could be deducted from premiums, from amounts withdrawn,
and/or from the Annuity Purchase Amount upon annuitization. (See "Premium Taxes"
page __.)
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In addition, amounts withdrawn or transferred out of a Fixed Rate
Option (including withdrawals for the purpose of paying the death benefit) prior
to the end of its term will be subject to a market value adjustment. (See "Fixed
Rate Option" in Appendix A.)
On Contracts for which the Owner has elected the optional rider
providing for an Enhanced Death Benefit, an annual Enhanced Death Benefit Charge
of up to 0.30% of the Average Death Benefit Amount will be deducted on each
Contract Anniversary or pro rata upon full surrender or annuitization for
expenses related to the Enhanced Death Benefit Charge. The Average Death Benefit
Amount is the mean of the death benefit amount on the most recent Contract
Anniversary and the death benefit amount on the immediately preceding Contract
Anniversary. The Enhanced Death Benefit Charge is deducted from each Sub-Account
on a pro rata basis through the cancellation of Variable Accumulation Units.
(See "Enhanced Death Benefit Charge" page __.) TRANSAMERICA GUARANTEES THAT THE
MORTALITY AND EXPENSE RISK CHARGE WILL NOT BE INCREASED.
Variable Account Fee Table
The purpose of this table is to assist in understanding the various
costs and expenses that the Owner will bear directly and indirectly. The table
reflects expenses of the Variable Account as well as of the Funds. The table
assumes that the entire Account Value is in the Variable Account. The
information set forth should be considered together with the narrative provided
under the heading "Charges and Deductions" on page __ of this Prospectus, and
with the Funds' prospectuses. In addition to the expenses listed below, premium
taxes may be applicable.
Sales Load(1)
=========================================================================
Sales Load Imposed on Purchase Payments 0
Maximum Contingent Deferred Sales Load(2) 6%
- ---------------------------------------------------------------------------
Range of Contingent Deferred Sales Load Over Time
- ------------------------------------------------------------------------
Contingent Deferred
Contract Years Since Sales Load
Purchase Payments Receipt Percentage
- ------------------------------------------------------------------------------
Less than 2 years 6%
- ------------------------------------------------------------------------------
2 years but less than 4 years 5%
- -----------------------------------------------------------------------------
4 years but less than 6 years 4%
- -----------------------------------------------------------------------------
6 years but less than 7 years 2%
- -----------------------------------------------------------------------------
7 or more 0%
===========================================================================
Variable Account Annual Expenses(1)
===========================================================================
- -----------------------------------------------------------------------------
Morality and Expense Risk Charge 1.25%
Administrative Expense Charge(3) 0.15%
Total Variable Account Annual Expenses 1.40%
=========================================================================
Other Contract Expenses
====================================================================
Transfer Fee (4) 0
- --------------------------------------------------------------------
Systematic Withdrawal Fee (5) 0
- --------------------------------------------------------------------
Account Fee (6) $30
- --------------------------------------------------------------------
Optional Enhanced Death Benefit Charge (as a percentage of Average
Death Benefit 0.30%
Amount)(7)
===========================================================================
Fund Expenses
=============================================================================
Fund Expenses (8) Total
(as a percentage of Fund average Fund
net assets after fee waiver and/or Management Other Annual
expense reimbursement) Fees Expenses Expenses
- ---------------------------------------------------------------------------
ABC Equity Fund
- ---------------------------------------------------------------------------
DEF Bond Fund
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
===========================================================================
Expense information regarding the Funds has been provided by the Funds.
Transamerica has no reason to doubt the accuracy of that information, but
Transamerica has not verified those figures. In preparing the table above and
the examples that follow, Transamerica has relied on the figures provided by the
Funds. Actual expenses in future years may be higher or lower than the figures
above.
Notes to Fee Table:
(1) The Contingent Deferred Sales Load applies to each Contract, regardless
of how Account Value is allocated
between the Variable Account and the General Account.
The Variable Account Annual Expenses do not
apply to the General Account.
(2) A portion of the Purchase Payment may be withdrawn each year after the
first Contract Year without imposition of any Contingent Deferred Sales
Load, and after a Purchase Payment has been held by Transamerica for
seven Contract Years, the remaining Purchase Payment may be withdrawn
free of any Contingent Deferred Sales Load. (See "Charges and
Deductions" page __.)
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<PAGE>
(3) The current annual Administrative Expense Charge is 0.15%; it may be
increased to 0.25%. (See "Charges
and Deductions" page __.)
(4) Transamerica currently does not impose a Transfer Fee. However, a
Transfer Fee of $10 may be imposed
for each transfer in excess of six in a Contract Year. Transamerica
may also impose a fee (of up to $25 per
year) if the systematic withdrawal option is elected. (See "Charges
and Deductions" page __.)
(5) Transamerica currently does not impose a Systematic Withdrawal Fee.
However, Transamerica reserves the right to impose an annual fee of up
to $25 for administrative expenses associated with processing
systematic withdrawals.
(6) The current annual Account Fee is $30 (or 2% of the Account Value,
if less) per Contract Year. The fee
may be changed annually, but it may not exceed $60 (or 2% of the
Account Value, if less). (See "Charges
and Deductions" page __.)
(7) If the Owner elects the Enhanced Death Benefit rider, the Enhanced
Death Benefit Charge will be deducted from the Sub-Accounts on each
Contract Anniversary and pro rata upon full surrender or annuitization.
(8) [Add disclosure regarding Fund Expenses.]
14
<PAGE>
Examples1/
The following tables show the total expenses an Owner would incur in
various situations.2/ The tabular information assumes that the entire Account
Value is allocated to the Variable Account.
Examples 1 through 3 show expenses for Contracts without the optional
Enhanced Death Benefit based on fee waivers and reimbursements for 1995. There
is no guarantee that any fee waivers or expense reimbursements will continue in
the future.
======================================================================
Examples
An Owner would pay the following
expenses on a $1,000 investment, 1. If the Owner surrenders
assuming a 5% annual return on the Contract at the end of the
assets: applicable time period:
- ---------------------------------------------------------------------
1 Year 3 Years
- ---------------------------------------------------------------------
3. If the Owner elects to
annuitize at the end of the
2. If the Owner does not applicable period under an
surrender and does not Annuity Form with life
annuitize the Contract: contingencies:3/
- -----------------------------------------------------------------
1 Year 3 Years 1 Year 3 Years
- -----------------------------------------------------------------
ABC Equity
DEF Bond Fund
===========================================================================
1/ In preparing the examples above, Transamerica has relied on the data provided
by the Funds. Transamerica has no reason to doubt the accuracy of that
information, but Transamerica has not verified those figures.
2/ These examples reflect the $30 Account Fee as an annual charge of ___% of
assets based on an approximate average Account Value of $40,000. These examples
all assume no Transfer Fees, systematic withdrawal fee or premium taxes have
been assessed. Premium taxes may be applicable. (See "Premium Taxes" page __.)
3/ For annuitizations before the third Contract Anniversary, or for
annuitization under a form that does not include life contingencies, a
Contingent Deferred Sales Load may apply.
15
<PAGE>
Examples 4-6 show examples for Contracts with the optional Enhanced Death
Benefit based on fee waivers and reimbursement for 1995. There is no guarantee
that fee waiver or expense reimbursements will continue in future.
======================================================================
Examples
An Owner would pay the
following expenses on a $1,000 4. If the Owner surrenders
investment, assuming a 5% annual the Contract at the end of
return on assets: the applicable time period:
- ------------------------------------------------------------------
1 Year 3 Years
- ------------------------------------------------------------------
6. If the Owner elects to
annuitize at the end of the
5. If the Owner does not applicable period under an
surrender and does not Annuity Form with life
annuitize the Contract: contingencies:1/
- ---------------------------------------------------------------
1 Year 3 Years 1 Year 3 Years
- ---------------------------------------------------------------
ABC Equity
DEF Bond Fund
================================================================
1/ For annuitizations before the third Contract Anniversary, or for
annuitization under a form that does not include life contingencies, a
Contingent Deferred Sales Load may apply.
THESE EXAMPLES SHOULD NOT BE CONSIDERED REPRESENTATIONS OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES PAID MAY BE GREATER OR LESS THAN THOSE SHOWN, SUBJECT
TO THE GUARANTEES IN THE CONTRACT. THE ASSUMED 5% ANNUAL RATE OF RETURN IS
HYPOTHETICAL AND SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
ANNUAL RETURNS, WHICH MAY BE GREATER OR LESS THAN THIS ASSUMED RATE.
16
<PAGE>
Annuity Payments
Annuity Payments will be made either on a fixed basis or a variable basis
or a combination of a fixed and variable basis as the Owner selects. The Owner
has flexibility in choosing the Annuity Date for his or her Contract. In no
event may the Annuity Date be a date later than the first day of the month
immediately preceding the month of the Annuitant's 85th birthday or the first
day of the month coinciding with or next following the tenth Contract
Anniversary, whichever occurs last. This extension of the Annuity Date to the
tenth Contract Anniversary may not be available in all states. The Annuity Date
may not be earlier than the first day of the month coinciding with or
immediately following the third Contract Anniversary except for Qualified
Contracts. An Annuity Date cannot occur during the term of a Seven-Year
Guaranteed Equity Index Option. Annuity Payments will begin on the first day of
the calendar month following the Annuity Date. (See "Annuity Payments" page
___.)
Four Annuity Forms are available under the Contract: (1) Life Annuity; (2)
Life and Contingent Annuity; (3) Life Annuity with Period Certain; and (4) Joint
and Survivor Annuity.
(See "Annuity Forms" page __.)
Payments on Death Before the Annuity Date
The death benefit for a Contract without the optional Enhanced Death
Benefit will be no less than the greater of (a) the Account Value or (b) the sum
of all Purchase Payments made to the Contract, less all withdrawals and any
applicable premium taxes.
The death benefit for a Contract for which the Owner has chosen the
optional rider providing for an Enhanced Death Benefit will be the greatest of
(a) or (b) above or (c) the greatest Account Value on any Contract Anniversary
prior to the Owner's or Annuitant's 75th birthday, increased by all Purchase
Payments paid, less all withdrawals since that Contract Anniversary and less any
applicable premium taxes. If the deceased Owner or Annuitant, as applicable, has
attained age 85, the death benefit will be equal to the Account Value.
The death benefit will generally be paid within seven days of receipt of
the required Proof of Death of the Owner or the Annuitant and election of the
method of settlement or as soon thereafter as Transamerica has sufficient
information about the Beneficiary to make the payment, but if no settlement
method is elected the death benefit will be paid no later than one year from the
date of death. No Contingent Deferred Sales Load is imposed. The death benefit
may be paid as either a lump sum or as an annuity. (See "Death Benefit" page
__.) Amounts in a Fixed Rate Option will be subject to a Market Value Adjustment
in calculating the Death Benefit. See Appendix A for a discussion of the
calculation of the Death Benefit for Account Value, if any, held in any
Seven-Year Guaranteed Equity Index Option at the time of death.
17
<PAGE>
Federal Income Tax Consequences
An Owner who is a natural person generally should not be taxed on increases
in the Account Value until a distribution under the Contract occurs (e.g., a
withdrawal or Annuity Payment) or is deemed to occur (e.g., a pledge, loan, or
assignment of a Contract). Generally, a portion (up to 100%) of any distribution
or deemed distribution is taxable as ordinary income. The taxable portion of
distributions is generally subject to income tax withholding unless the
recipient elects otherwise (although withholding is mandatory for certain
qualified Contracts). In addition, a federal penalty tax may apply to certain
distributions. (See "Federal Tax Matters" page __.)
Right to Cancel
The Owner has the right to examine the Contract for a limited period, known
as a "Free Look Period." The Owner can cancel the Contract by delivering or
mailing a written notice of cancellation, or sending a telegram to the Service
Center and by returning the Contract before midnight of the tenth day (or longer
if required by state law) after receipt of the Contract. Notice given by mail
and the return of the Contract by mail will be effective on the date received by
Transamerica. The amount of the refund may depend on the state of issuance. In
some states (and in all states for IRAs), Transamerica will refund the greater
of the Purchase Payment(s) or the Account Value as of the date the written
notice and the Contract are received by Transamerica. In these situations, the
Purchase Payment(s) received before or during the Free Look Period which are to
be allocated to the Sub-Accounts of the Variable Accounts will be held in the
Money Market Sub-Account until the estimated end of the Free Look Period
(allowing 5 days for delivery of the Contract by mail). In other states,
Transamerica will refund the Account Value as of the date the written notice and
the Contract are received by Transamerica. In these cases, on the Contract Date
the initial Purchase Payment will be allocated among the Sub-Accounts of the
Variable Account and the General Account Options in accordance with the Owner's
instructions. Owners should consult their registered representative or
investment adviser (or see their Contract) for the applicable provision. (See
"Application and Purchase Payments" page __ and "Account Value" page __.)
Questions
Any questions about procedures or the Contract can be answered by the
Transamerica Annuity Service Center ("Service Center"), at P.O. Box XXXXX,
Charlotte, North Carolina 28231-1848, (800)258-4260. All inquiries should
include the Contract Number and the Owner's and Annuitant's names.
NOTE: The foregoing summary is qualified in its entirety by the detailed
information in the remainder of this Prospectus and in the prospectuses for the
Funds which should be referred to for more detailed information. With respect to
Qualified Contracts, it should be noted that the requirements of a particular
retirement plan, an endorsement to the Contract, or limitations or penalties
imposed by the Code or the Employee Retirement Income Security Act of 1974, as
amended, may impose additional limits or restrictions on Purchase Payments,
Withdrawals, distributions, or benefits, or on other provisions of the Contract.
This Prospectus does not describe such limitations or restrictions. (See
"Federal Tax Matters" page __.)
18
<PAGE>
CONDENSED FINANCIAL INFORMATION
Because the Variable Account has not yet commenced operations, there are no
financial statements available.
PERFORMANCE DATA
From time to time, Transamerica may advertise yields and average annual
total returns for the Sub-Accounts of the Variable Account. In addition,
Transamerica may advertise the effective yield of the Money Market Sub-Account.
These figures will be based on historical information and are not intended to
indicate future performance.
The yield of the Money Market Sub-Account refers to the annualized income
generated by an investment in that Sub-Account over a specified seven-day
period. The yield is calculated by assuming that the income generated for that
seven-day period is generated each seven-day period over a 52-week period and is
shown as a percentage of the investment. The effective yield is calculated
similarly but, when annualized, the income earned by an investment in that
Sub-Account is assumed to be reinvested. The effective yield will be slightly
higher than the yield because of the compounding effect of this assumed
reinvestment.
The yield of a Sub-Account (other than the Money Market Sub-Account) refers
to the annualized income generated by an investment in the Sub-Account over a
specified thirty-day period. The yield is calculated by assuming that the income
generated by the investment during that thirty-day period is generated each
thirty-day period over a twelve-month period and is shown as a percentage of the
investment.
The yield calculations do not reflect the effect of any Contingent Deferred
Sales Load or premium taxes that may be applicable to a particular Contract. To
the extent that the Contingent Deferred Sales Load is applicable to a particular
Contract, the yield of that Contract will be reduced. For additional information
regarding yields and total returns, please refer to the Statement of Additional
Information.
The average annual total return of a Sub-Account refers to return
quotations assuming an investment has been held in the Sub-Account for various
periods of time including, but not limited to, a period measured from the date
the Sub-Account commenced operations. When a Sub-Account has been in operation
for 1, 5, and 10 years, respectively, the average annual total return for these
periods will be provided. The average annual total return quotations will
represent the average annual compounded rates of return that would equate an
initial investment of $1,000 to the redemption value of that investment
(including the deduction of any applicable Contingent Deferred Sales Load but
excluding deduction of any premium taxes) as of the last day of each of the
periods for which total return quotations are provided.
19
<PAGE>
Performance information for any Sub-Account reflects only the performance
of a hypothetical Contract under which Account Value is allocated to a
Sub-Account during a particular time period on which the calculations are based.
Performance information should be considered in light of the investment
objectives and policies and characteristics of the Funds in which the
Sub-Account invests, and the market conditions during the given time period, and
should not be considered as a representation of what may be achieved in the
future. For a description of the methods used to determine yield and total
returns, see the Statement of Additional Information.
Reports and promotional literature may also contain other information
including (1) the ranking of any Sub-Account derived from rankings of variable
annuity separate accounts or their investment products tracked by Lipper
Analytical Services, Inc., VARDS, IBC/Donoghue's Money Fund Report, Financial
Planning Magazine, Money Magazine, Bank Rate Monitor, Standard and Poor's
Indices, Dow Jones Industrial Average, and other rating services, companies,
publications, or other persons who rank separate accounts or other investment
products on overall performance or other criteria, and (2) the effect of tax
deferred compounding on Sub-Account investment returns, or returns in general,
which may be illustrated by graphs, charts, or otherwise, and which may include
a comparison, at various points in time, of the return from an investment in a
Contract (or returns in general) on a tax-deferred basis (assuming one or more
tax rates) with the return on a currently taxable basis. Other ranking services
and indices may be used.
In its advertisements and sales literature, Transamerica may discuss, and
may illustrate by graphs, charts, or otherwise, the implications of longer life
expectancy for retirement planning, the tax and other consequences of long-term
investment in the Contract, the effects of the Contract's lifetime payout
option, and the operation of certain special investment features of the Contract
- -- such as the Dollar Cost Averaging option. Transamerica may explain and depict
in charts, or other graphics, the effects of certain investment strategies, such
as allocating purchase payments between the General Account Options and an
equity Sub-Account. Transamerica may also discuss the Social Security system and
its projected payout levels and retirement plans generally, using graphs, charts
and other illustrations.
Transamerica may from time to time also disclose average annual total
return in non-standard formats and cumulative (non-annualized) total return for
the Sub-Accounts. The non-standard average annual total return and cumulative
total return will assume that no Contingent Deferred Sales Load is applicable.
Transamerica may from time to time also disclose yield, standard total returns,
and non-standard total returns for any or all Sub-Accounts.
All non-standard performance data will only be disclosed if the standard
performance data is also disclosed. For additional information regarding the
calculation of other performance data, please refer to the Statement of
Additional Information.
Transamerica may also advertise performance figures for the Sub-Accounts
based on the performance of a Fund prior to the time the Variable Account
commenced operations.
TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY AND THE
20
<PAGE>
VARIABLE ACCOUNT
Transamerica Life Insurance and Annuity Company
Transamerica Life Insurance and Annuity Company ("Transamerica") is a stock
life insurance company incorporated under the laws of the State of California in
1966 and redomesticated to North Carolina in 1994. It is principally engaged in
the sale of life insurance and annuity policies. Transamerica is a wholly-owned
subsidiary of Transamerica Occidental Life Insurance Company, a wholly owned
subsidiary of Transamerica Insurance Corporation of California, which in turn is
a direct subsidiary of Transamerica Corporation. The address of Transamerica is
101 North Tryon Street, Charlotte, North Carolina 28202.
Published Ratings
Transamerica may from time to time publish in advertisements, sales
literature and reports to Owners, the ratings and other information assigned to
it by one or more independent rating organizations such as A.M. Best Company,
Standard & Poor's, Moody's, and Duff & Phelps. The purpose of the ratings is to
reflect the financial strength and/or claims-paying ability of Transamerica and
should not be considered as bearing on the investment performance of assets held
in the Variable Account. Each year the A.M. Best Company reviews the financial
status of thousands of insurers, culminating in the assignment of Best's
Ratings. These ratings reflect their current opinion of the relative financial
strength and operating performance of an insurance company in comparison to the
norms of the life/health insurance industry. In addition, the claims-paying
ability of Transamerica as measured by Standard & Poor's Insurance Ratings
Services, Moody's, or Duff & Phelps may be referred to in advertisements or
sales literature or in reports to Owners. These ratings are opinions of an
operating insurance company's financial capacity to meet the obligations of its
insurance and annuity policies in accordance with their terms, including its
obligations under the General Account provisions of this Contract. Such ratings
do not reflect the investment performance of the Variable Account or the degree
of risk associated with an investment in the Variable Account.
The Variable Account
Separate Account VA-6 of Transamerica (the "Variable Account") was
established by Transamerica as a separate account under the laws of the State of
North Carolina on June 11, 1996, pursuant to resolutions of Transamerica's Board
of Directors. The Variable Account is registered with the Securities and
Exchange Commission ("Commission") under the Investment Company Act of 1940 (the
"1940 Act") as a unit investment trust. It meets the definition of a separate
account under the federal securities laws. However, the Commission does not
supervise the management or the investment practices or policies of the Variable
Account.
The assets of the Variable Account are owned by Transamerica but they are
held separately from the other assets of Transamerica. Section 58-7-95 of the
North Carolina Insurance Law provides that the assets of a separate account are
not chargeable with liabilities incurred in any
21
<PAGE>
other business operation of the insurance company (except to the extent that
assets in the separate account exceed the reserves and other liabilities of the
separate account). Income, gains and losses incurred on the assets in the
Variable Account, whether or not realized, are credited to or charged against
the Variable Account without regard to other income, gains or losses of
Transamerica. Therefore, the investment performance of the Variable Account is
entirely independent of the investment performance of Transamerica's general
account assets or any other separate account maintained by Transamerica.
The Variable Account has ten Sub-Accounts, each of which invests solely
in a specific
corresponding Fund. (See "The Funds" page __.) Changes to the Sub-Accounts
may be made
at the discretion of Transamerica. (See "Addition, Deletion, or Substitution"
page __.)
THE FUNDS
The Variable Account invests exclusively in the Funds. [Information
regarding the Funds
to be filed by Pre-Effective Amendment.]
Meeting objectives depends on various factors, including, but not limited
to, how well the
Fund managers anticipate changing economic and market conditions. THERE IS NO
ASSURANCE THAT ANY OF THESE FUNDS WILL ACHIEVE THEIR STATED
OBJECTIVES.
An investment in the Contract is not a deposit or obligation of, or
guaranteed or endorsed, by any bank, nor is the Contract federally insured by
the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any
other government agency. Investing in the Contract involves certain investment
risks, including possible loss of principal.
Since all of the Funds are available to registered separate accounts
offering variable annuity and variable life products of Transamerica as well as
other insurance companies, there is a possibility that a material conflict may
arise between the interests of the Variable Account and one or more other
separate accounts investing in the Funds. In the event of a material conflict,
the affected insurance companies will take any necessary steps to resolve the
matter, including stopping their separate accounts from investing in the Funds.
See the Funds' prospectuses for greater details.
Additional information concerning the investment objectives and policies of
all of the Funds, the investment advisory services and administrative services
and charges can be found in the current prospectuses for the Funds which
accompany this Prospectus. The Funds' prospectuses should be read carefully
before any decision is made concerning the allocation of Purchase Payments to,
or transfers among, the Sub-Accounts.
22
<PAGE>
Addition, Deletion, or Substitution
Transamerica does not control the Funds and cannot guarantee that any of
the Sub-Accounts of the Variable Account or any of the Funds will always be
available for allocation of Purchase Payments or transfers. Transamerica retains
the right to make changes in the Variable Account and in its investments.
Transamerica reserves the right to eliminate the shares of any Fund held by
a Sub-Account and to substitute shares of another Fund or of another investment
company for the shares of any Fund, if the shares of the Fund are no longer
available for investment or if, in Transamerica's judgment, investment in any
Fund would be inappropriate in view of the purposes of the Variable Account. To
the extent required by the 1940 Act, a substitution of shares attributable to
the Owner's interest in a Sub-Account will not be made without prior notice to
the Owner and the prior approval of the Commission. Nothing contained herein
shall prevent the Variable Account from purchasing other securities for other
series or classes of variable annuity policies, or from effecting an exchange
between series or classes of variable policies on the basis of requests made by
Owners.
New Sub-Accounts may be established when, in the sole discretion of
Transamerica, marketing, tax, investment or other conditions so warrant. Any new
Sub-Accounts will be made available to existing Owners on a basis to be
determined by Transamerica. Each additional Sub-Account will purchase shares in
a Fund or in another mutual fund or investment vehicle. Transamerica may also
eliminate one or more Sub-Accounts if, in its sole discretion, marketing, tax,
investment or other conditions so warrant. In the event any Sub-Account is
eliminated, Transamerica will notify Owners and request a re-allocation of the
amounts invested in the eliminated Sub-Account.
In the event of any substitution or change, Transamerica may make such
changes in the Contract as may be necessary or appropriate to reflect such
substitution or change. Furthermore, if deemed to be in the best interests of
persons having voting rights under the Contracts, the Variable Account may be
operated as a management company under the 1940 Act or any other form permitted
by law, may be de-registered under such Act in the event such registration is no
longer required, or may be combined with one or more other separate accounts.
THE CONTRACT
The Contract is a Flexible Purchase Payment Multi-Funded Deferred Annuity
Contract. The rights and benefits are described below and in the individual
contract or in the certificate and group contract; however, Transamerica
reserves the right to make any modification to conform the individual contract
and the group contract and certificates thereunder to, or give the Owner the
benefit of, any federal or state statute or rule or regulation. The obligations
under the Contract are obligations of Transamerica. The Contracts are available
on a non-qualified basis and as individual retirement annuities (IRAs) that
qualify for special federal income tax treatment, as Section 403(b) annuities,
and for use in qualified pension and profit sharing plans established
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by corporate employers. Contracts for use with such qualified plans may not be
available in all states. Generally, Qualified Contracts contain certain
restrictive provisions limiting the timing and amount of payments and
distributions from the Qualified Contract.
The Owner designates the Annuitant. The Annuitant can be the same person as
the Owner and must be the same person in the case of a Qualified Contract.
Annuity Payments will be made to the Annuitant after the Annuity Date
unless, in the case of a Non-Qualified Contract, the Owner changes the Payee
after the Annuity Date.
For each Contract, a different Account will be established and values,
benefits and charges will be calculated separately. The various administrative
rules described below will apply separately to each Contract, unless otherwise
noted.
Qualified Contracts
The Contracts may be used to fund IRA rollovers for use in connection with
Section 408(b) of the Code. An IRA rollover is a rollover of certain kinds of
distributions from qualified plans, Section 403(b) tax sheltered annuities and
individual retirement plans, following the rules set out in the Code to maintain
favorable tax treatment to an Individual Retirement Annuity.
The Contracts may also be used (a) for various types of qualified pension
and profit sharing plans under Section 401 of the Code, which permits corporate
employers to establish various types of retirement plans for employees, and (b)
as Section 403(b) annuities. Purchasers of the contracts for use in qualified
plans should seek competent advice regarding the suitability of the proposed
plan documents and the Contract to their specific needs. Transamerica reserves
the right to decline to sell the Contract to certain qualified plans or
terminate the contract if in Transamerica's judgment the Contract is not
appropriate for the plan. The Contracts issued for use in connection with
Sections 401 and 403(b) qualified plans may not be available in all states.
If a Contract is purchased to fund an IRA, the Annuitant must also be the
Owner. In addition, under current tax law, if a Contract is purchased to fund an
IRA, minimum distributions must commence not later than April 1st of the
calendar year following the calendar year in which the Owner attains age 70 1/2.
The Owner should consult his/her tax adviser concerning these matters.
APPLICATION AND PURCHASE PAYMENTS
Purchase Payments
All Purchase Payments must be paid to the Service Center. A confirmation
will be issued to the Owner upon the acceptance of each Purchase Payment.
The initial Purchase Payment must be at least $5,000 ($2,000 for IRAs).
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The Contract will be issued and the Net Purchase Payment derived from the
initial Purchase Payment generally will be accepted and credited within two
business days after the later of receipt of sufficient information to issue a
Contract or receipt of the initial Purchase Payment at the Service Center. (A
Net Purchase Payment is the Purchase Payment less any applicable premium taxes,
including retaliatory premium taxes.) Acceptance is subject to sufficient
information being provided in a form acceptable to Transamerica, and
Transamerica reserves the right to reject any application or Purchase Payment.
Contracts normally will not be issued with respect to annuitants more than 80
years old, although Transamerica in its discretion may waive this restriction in
appropriate cases.
If the initial Purchase Payment allocated to the Variable Account cannot be
credited within two days of receipt of the Purchase Payment and information
requesting issuance of a Contract because the information is incomplete or for
any other reason, then Transamerica will contact the Owner, explain the reason
for the delay and will refund the initial Purchase Payment within five business
days, unless the Owner consents to Transamerica retaining the initial Purchase
Payment and crediting it as soon as the requirements are fulfilled. Amounts
allocated to the Seven-Year Guaranteed Equity Index Option are held in
Transamerica's General Account until sometime after the end of the Free Look
Period.
Each Contract provides for a Free Look Period of 10 days (or longer if
required by state law) after receipt of the Contract during which the Owner may
cancel the Contract. To cancel, the Contract must be returned to Transamerica
with a written notice of cancellation. In some states (and in all states for
IRAs), Transamerica will refund the sum of: (i) the Purchase Payment(s)
allocated to the Fixed Rate Options, and (ii) the greater of the Purchase
Payment(s) allocated to the Variable Account or the Variable Account Value as of
the date the written notice and the Contract are received by Transamerica. In
all other states, the Account Value will be returned with any adjustments
required by applicable law or regulation (and without imposition of any
Contingent Deferred Sales Load) as of the date the notice and Contract are
received. Owners should consult their registered representative or investment
adviser (or see their Contract) for the applicable provision.
Additional Purchase Payments may be made at any time prior to the Annuity
Date, as long as the Annuitant or Contingent Annuitant is living. Additional
Purchase Payments must be at least $500, or at least $100 if made pursuant to an
automatic payment plan under which the Additional Purchase Payment is
automatically deducted from a bank account. In addition, minimum allocation
amounts apply (see "Allocation of Purchase Payments" on page __). Additional Net
Purchase Payments are credited to the Contract as of the date the payment is
received.
Total Purchase Payments for any Contract may not exceed $1,000,000 without
prior approval of Transamerica.
In no event may the sum of all Purchase Payments for a Contract during any
taxable year exceed the limits imposed by any applicable federal or state law,
rules, or regulations.
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Allocation of Purchase Payments
The Owner specifies in the application how Purchase Payments will be
allocated under the Contract. The Owner may allocate the Net Purchase Payment
between and among one or more of the Sub-Accounts of the Variable Account and
the General Account Options as long as the portions are whole number percentages
and any allocation percentage for a Sub-Account is at least 10%. In addition,
the initial Purchase Payment is subject to a minimum allocation of $1,000 to any
selected Sub-Account or Term. The Owner may choose to allocate nothing to a
particular Sub-Account or Term.
On the Contract Date, in states where the greater of Purchase Payments or
Account Value will be refunded on exercise of the Free Look right (and in all
states for IRAs), the Net Purchase Payment derived from the portion of the
initial Purchase Payment allocated to the Variable Account will first be
allocated to the Money Market Sub-Account and will remain in that Sub-Account
until the estimated end of the Free Look Period (allowing 5 days for delivery of
the Contract by mail). The dollar value of the Variable Accumulation Units held
in the Money Market Sub-Account attributable to such Net Purchase Payment will
then be allocated among the Sub-Accounts of the Variable Account in accordance
with the allocation percentages selected by the Owner. In all other states, on
the Contract Date the Net Purchase Payment(s) derived from the initial Purchase
Payment(s) will be allocated among the Sub-Accounts of the Variable Account and
the Fixed Rate Options in accordance with the allocation percentages selected by
the Owner. Amounts allocated to the Seven-Year Guaranteed Equity Index Option
will be held in Transamerica's General Account until some time after the end of
the Free Look Period.
Each Net Purchase Payment will be subject to the allocation percentages in
effect at the time of receipt of such Purchase Payment. The allocation
percentages for new Purchase Payments between and among the Sub-Accounts of the
Variable Account and the General Account Options may be changed by the Owner at
any time by submitting a request for such change, in a form and manner
acceptable to Transamerica, to the Service Center. Any changes to the allocation
percentages are subject to the limitation above. Any change will take effect
with the first Purchase Payment received with or after receipt by the Service
Center of the request for such change, in a form and manner acceptable to
Transamerica and will continue in effect until subsequently changed.
If the allocation of additional Net Purchase Payments is directed to an
Inactive Sub-Account of the Variable Account or a General Account Option, the
amount allocated must be at least $1,000.
ACCOUNT VALUE
Before the Annuity Date, the Account Value is equal to: (a) the
General Account Value plus
(b) the Variable Account Value. The General Account Value is the total
dollar amount of all
Account Value held under the Fixed Rate Option and the Guaranteed Surrender
Value of the
Seven-Year Guaranteed Equity Index Option. Prior to the Annuity Date the
Variable Account
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Value is the total dollar amount of all Variable Accumulation Units under each
Sub-Account of the Variable Account. The Variable Account Value is equal to: (a)
Net Purchase Payments allocated to the Sub-Accounts; plus or minus (b) any
increase or decrease in the value of the assets of the Sub-Accounts due to
investment results; less (c) the daily Mortality and Expense Risk Charge; less
(d) the Enhanced Death Benefit Charge, if applicable; less (e) the daily
Administrative Expense Charge; less (f) the annual Account Fee, if applicable;
plus or minus (g) amounts transferred from or to the General Account Options;
less (h) any applicable Transfer Fees; and less (i) any withdrawals from the
Sub-Accounts.
The value of the Variable Account assets is determined at the end of each
Valuation Day. To determine the value of an asset on a day that is not a
Valuation Day, the value of that asset as of the end of the next Valuation Day
will be used. The Variable Account Value is expected to change from Valuation
Period to Valuation Period, reflecting the investment experience of all of the
selected Funds as well as the deductions for charges. A Valuation Period is the
period between successive Valuation Days. It begins at the close of the New York
Stock Exchange (generally 4:00 p.m. ET) on each Valuation Day and ends at the
close of the New York Stock Exchange on the next succeeding Valuation Day. A
Valuation Day is each day that the New York Stock Exchange is open for regular
business.
Net Purchase Payments which the Owner allocates to a Sub-Account of the
Variable Account are used to purchase Variable Accumulation Units in that
Sub-Account. The number of Variable Accumulation Units to be credited for each
Sub-Account will be determined by dividing the portion of each Net Purchase
Payment allocated to the Sub-Account by the Variable Accumulation Unit Value
determined at the end of the Valuation Period during which the Net Purchase
Payment was received. In the case of the Initial Net Purchase Payment, Variable
Accumulation Units for that payment will be credited to the Account Value within
two Valuation Days of the later of: (a) the date an acceptable and properly
completed application is received at our Service Center; or (b) the date our
Service Center receives the initial Purchase Payment. In the case of any
subsequent Purchase Payment, Variable Accumulation Units for that payment will
be credited at the end of the Valuation Period during which Transamerica
receives the payment. The value of a Variable Accumulation Unit for each
Sub-Account for a Valuation Period is established at the end of each Valuation
Period and is calculated by multiplying the value of that unit at the end of the
prior Valuation Period by the Sub-Account's Net Investment Factor for the
Valuation Period. The value of a Variable Accumulation Unit may go up or down.
The Net Investment Factor is used to determine the value of Accumulation
and Annuity Unit Values for the end of a Valuation Period. The applicable
formula can be found in the Statement of Additional Information.
Transfers involving Sub-Accounts will result in the purchase and/or
cancellation of Variable Accumulation Units having a total value equal to the
dollar amount being transferred to or from a particular Sub-Account. The
purchase and cancellation of such units generally are made using the Variable
Accumulation Unit value of the applicable Sub-Account as of the end of the
Valuation Day in which the transfer is effective.
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TRANSFERS
Before the Annuity Date
Before the Annuity Date, the Owner may transfer all or any portion of the
Account Value among and between the Sub-Accounts of the Variable Account and the
Fixed Rate Options.
Transfers among and between the Sub-Accounts and the Fixed Rate Options may
be made by submitting a request, in a form and manner acceptable to
Transamerica, to the Service Center. The transfer request must specify: (a) the
Sub-Account(s) and/or the Fixed Rate Option(s) from which the transfer is to be
made; (b) the amount of the transfer, subject to the minimum transfer amount
described in the Contract; and (c) the Sub-Account(s) and/or Fixed Rate
Option(s) to receive the transferred amount. The transfer request is subject to
the following conditions: (1) not more than 18 transfers between and among the
Fixed Rate Options and the Sub-Accounts may be made in any Contract Year; (2)
the minimum amount which may be transferred is $500; (3) the minimum transfer to
an Inactive Sub-Account is $1,000; and (4) the minimum transfer required to
establish a new Fixed Rate Option is $1,000. Transfers among the Sub-Accounts
are also subject to such terms and conditions as may be imposed by the Funds.
Transfers out of a Seven-Year Guaranteed Equity Index Option are permitted
only during the 30-day renewal window at the end of the applicable seven-year
term.
When a transfer is made from a Fixed Rate Option before the end of its
term, the amount transferred will be subject to a market value adjustment. (See
"The General Account Options -Fixed Rate Option" in Appendix A.) A transfer from
a Fixed Rate Option made 30 days before the last day of the term will not be
subject to any market value adjustment, nor will it be counted toward the
eighteen allowable transfers per Contract Year.
Currently, there is no charge for transfers. However, Transamerica reserves
the right to impose a charge of the lesser of 2% of the amount transferred or
$10 for each transfer after six in any Contract Year. All requests received
during a single Valuation Period will be treated as a single transfer. A
transfer generally will be effective on the date the request for transfer is
received by the Service Center. Transfers involving the General Account Options
may be counted as transfers for purposes of assessing the Transfer Fee charge
for more than six (6) transfers in a Contract Year.
If a transfer reduces the value in a Sub-Account to less than $1,000, then
Transamerica reserves the right to transfer the remaining amount along with the
amount requested to be transferred in accordance with the transfer instructions
provided by the Owner. Under current law, there will not be any tax liability to
the Owner if the Owner makes a transfer.
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Telephone Transfers
Transamerica will allow telephone transfers if the Owner has provided
proper authorization for such transfers in a form and manner acceptable to
Transamerica. Limitations and rules for these transfers will be provided to the
Owner by Transamerica. Transamerica reserves the right to suspend telephone
transfer privileges at any time, for some or all Contracts, for any reason.
Withdrawals are not permitted by telephone.
Transamerica will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine and if it follows such procedures it will
not be liable for any losses due to unauthorized or fraudulent instructions.
Transamerica, however, may be liable for such losses if it does not follow those
reasonable procedures. The procedures Transamerica will follow for telephone
transfers may include requiring some form of personal identification prior to
acting on instructions received by telephone, providing written confirmation of
the transaction, and/or tape recording the instructions given by telephone.
Possible Restrictions
Transamerica reserves the right without prior notice to modify, restrict,
suspend or eliminate the transfer privileges (including telephone transfers) at
any time and for any reason. For example, restrictions may be necessary to
protect Owners from adverse impacts on Fund management of large and/or numerous
transfers by market timers or others. Transamerica has determined that the
movement of significant Sub-Account values from one Sub-Account to another may
prevent the underlying Fund from taking advantage of investment opportunities
because the Fund must maintain a significant cash position in order to handle
redemptions. Such movement may also cause a substantial increase in Fund
transaction costs which must be indirectly borne by Contract Owners. Therefore,
Transamerica reserves the right to require that all transfer requests be made by
the Contract Owner and not by a third party holding a power of attorney and to
require that each transfer request be made by a separate communication to
Transamerica. Transamerica also reserves the right to request that each transfer
request be submitted in writing and be manually signed by the Contract Owner or
Owners; facsimile transfer requests may not be allowed.
Dollar Cost Averaging
Prior to the Annuity Date, the Owner may automatically transfer amounts
from either (but not both) of the Money Market or Bond Sub-Accounts to any of
the other Sub-Accounts on a monthly basis by submitting a request to the Service
Center in a form and manner acceptable to Transamerica. Dollar Cost Averaging is
not available with respect to the General Account Options. The transfers will
begin on the tenth day, or if not a Valuation Day, the Valuation Day following
the tenth day of the next month following receipt of such request, provided that
Dollar Cost Averaging transfers will not commence until the later of (a) 30 days
after the Contract Date, or (b) after the estimated end of the Free Look Period
(allowing 5 days for delivery of the Contract by mail). Transamerica may, upon
written notice to the Owner, change the day of the
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month on which transfers are made. Transfers will continue for twelve
consecutive months unless terminated by the Owner, or automatically terminated
by Transamerica because there are insufficient funds in the applicable
Sub-Account, or for other reasons as set forth in the Contract. The Owner may
request that monthly transfers be continued for an additional twelve months by
giving notice to the Service Center in a form and manner acceptable to
Transamerica within 30 days prior to the last monthly transfer. If no request to
continue the monthly transfers is made by the Owner, this option will terminate
automatically with the twelfth transfer.
In order to be eligible for Dollar Cost Averaging, the Owner must meet the
following conditions: (1) the value of the selected Sub-Account (from which the
transfers are made) must be at least $5,000; (2) the minimum amount that can be
transferred out of the selected Sub-Account is $250 per month; and (3) the
minimum amount transferred into any other Sub-Account is the greater of $250 or
10% of the amount being transferred. Dollar Cost Averaging transfers can not be
made from a Sub-Account from which Systematic Withdrawals or Automatic Payouts
are being made.
There is no charge for the Dollar Cost Averaging service and transfers due
to Dollar Cost Averaging will not count toward the number of transfers without
charge nor the limit of 18 transfers per Contract Year.
After the Annuity Date
If a Variable Annuity Payout Option is elected, the Owner may make
transfers among SubAccounts after the Annuity Date by giving a written request
to the Service Center, subject to the following provisions: (1) transfers after
the Annuity Date may be made no more than four times during any Annuity Year;
and (2) the minimum amount transferred from one Sub-Account to another is the
amount supporting a current $75 monthly payment.
Transfers among Sub-Accounts during the Annuity Period will be processed
based on the formula outlined in the Statement of Additional Information.
CASH WITHDRAWALS
Withdrawals
The Owner may withdraw all or part of the Cash Surrender Value at any time
prior to the Annuity Date by giving a written request to the Service Center. The
amount payable to the Owner if the Contract is surrendered on or before the
Annuity Date is the Cash Surrender Value which is equal to the Account Value,
less the Account Fee, if any, less any market value adjustment, less any
applicable Contingent Deferred Sales Load, less any applicable pro rata portion
of the Enhanced Death Benefit Charge; less applicable premium taxes and less any
amounts in the Seven-Year Guaranteed Equity Index Option. If the Account Value
exceeds $50,000 on the date the Contract is surrendered, and where permitted by
state law, the Account Fee will be waived.
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No withdrawals may be made after the Annuity Date. Partial withdrawals must
be at least $500. No partial withdrawals will be permitted while the Systematic
Withdrawal Option is in effect.
A full surrender will result in a cash withdrawal payment equal to the Cash
Surrender Value at the end of the Valuation Period during which the election is
received along with all completed forms. Any applicable Contingent Deferred
Sales Load will be deducted from the amount paid.
In the case of a partial withdrawal, the Owner may direct the Service
Center to withdraw amounts from specific Sub-Account(s) and/or from the Fixed
Rate Option. If the Owner does not specify the Sub-Account(s) from which the
withdrawal is to be made, the withdrawal will be taken pro rata from all
Sub-Accounts of the Variable Account with current values. If the requested
withdrawal reduces the value of a Sub-Account from which the withdrawal was made
to less than $1,000, Transamerica reserves the right to transfer the remaining
value of that Sub-Account pro rata among the other Active Sub-Accounts with
values equal to or greater than $1,000. If no such Sub-Accounts exist, such
transfer will be made to the Money Market Sub-Account. The Owner will be
notified in writing of any such transfer.
A partial withdrawal request will not be processed if it would reduce the
Account Value to less than $2,000. In that case, the Owner will be notified that
he or she will have 10 days from the date notice is mailed to: (a) withdraw a
lesser amount (subject to the $500 minimum), leaving an Account Value of at
least $2,000; or (b) surrender the Contract for its Cash Surrender Value.
(Amounts payable will be determined as of the end of the Valuation Period during
which the subsequent instructions are received.) If, after the expiration of the
10-day period, no written election is received from the Owner, the withdrawal
request will be considered null and void, and no withdrawal will be processed.
The Account Fee, unless waived, will be deducted from a full surrender
before the application of any Contingent Deferred Sales Load (see "Charges and
Deductions" page __).
Withdrawals may be taxable transactions. The Code requires Transamerica to
withhold federal income tax from withdrawals. However, except for certain
Qualified Plans, generally an Owner will be entitled to elect, in writing, not
to have tax withholding apply. Withholding applies to the portion of the
withdrawal which is includible in income and subject to federal income tax. The
federal income tax withholding rate is 10%, or 20% in the case of certain
qualified plans, of the taxable amount of the withdrawal. Withholding applies
only if the taxable amount of the withdrawal is at least $200. Some states also
require withholding for state income taxes. Moreover, the Code provides that a
10% penalty tax may be imposed on the taxable portions of distributions for
certain early withdrawals. (See "Federal Tax Matters" page __.)
Withdrawal (including surrender) requests generally will be processed as of
the end of the Valuation Period during which the request, including all
completed forms, is received. Payment of any cash withdrawal or lump sum death
benefit due from the Variable Account will occur within seven days from the date
the election is received, except that Transamerica may postpone
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such payment if: (1) the New York Stock Exchange is closed for other than usual
weekends or holidays, or trading on the Exchange is otherwise restricted; or (2)
an emergency exists as defined by the Commission, or the Commission requires
that trading be restricted; or (3) the Commission permits a delay for the
protection of Owners. The withdrawal request will be effective when all
appropriate withdrawal request forms are received. Payments of any amounts
derived from a Purchase Payment paid by check may be delayed until the check has
cleared the Owner's bank.
When a withdrawal is made from a Fixed Rate Option before the end of its
Term, the amount withdrawn will be subject to a market value adjustment. (See
"The General Account Options -The Fixed Rate Option" in Appendix A.) No
withdrawals are permitted from a Seven-Year Guaranteed Equity Index Option
before the end of the applicable seven year term.
Transamerica may delay payment of any withdrawal from the General Account
Options for up to six months after Transamerica receives the request for such
withdrawal. If Transamerica delays payment for more than 30 days, Transamerica
will pay interest on the withdrawal amount up to the date of payment. (See "The
General Account Options" in Appendix A.)
SINCE THE OWNER ASSUMES THE INVESTMENT RISK FOR ALL AMOUNTS IN THE VARIABLE
ACCOUNT AND BECAUSE CERTAIN WITHDRAWALS ARE SUBJECT TO A CONTINGENT DEFERRED
SALES LOAD AND A MARKET VALUE ADJUSTMENT, THE TOTAL AMOUNT PAID UPON SURRENDER
OF THE CONTRACT MAY BE MORE OR LESS THAN THE TOTAL PURCHASE PAYMENTS PAID.
Since the Qualified Contracts offered by the Prospectus will be issued in
connection with retirement plans which meet the requirements of Sections 401,
403(b), or 408(b) of the Code, reference should be made to the terms of the
particular retirement or profit-sharing plans for any additional limitations or
restrictions on cash withdrawals.
An Owner may elect, under the Systematic Withdrawal Option or Automatic
Payout Option (but not both), to withdraw certain amounts on a periodic basis
from the Sub-Accounts prior to the Annuity Date.
Systematic Withdrawal Option
Prior to the Annuity Date, the Owner, by giving written notice to the
Service Center, may elect to have withdrawals automatically made from one or
more Sub-Account(s) of the Variable Account on a monthly basis. (Other
distribution modes may be permitted.) The withdrawals will commence on the
fourth day of the month following receipt of Written Notice, except that they
will not commence sooner than the later of (a) 30 days after the Contract Date
or (b) the end of the Free Look Period. Upon written notice to the Owners,
Transamerica may change the day of the month on which withdrawals are made under
this option. Withdrawals will be from the SubAccount(s) and in the percentage
allocations specified by the Owner. If no specifications are made, withdrawals
will be pro-rata from all Sub-Account(s) with value. Systematic Withdrawals can
not be made from a Sub-Account from which Dollar Cost Averaging transfers are
being
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made. The Systematic Withdrawal option is not available with respect to the
General Account
Options.
To be eligible for the Systematic Withdrawal Option, the Contract Value
must be at least $15,000 at the time of election. The minimum monthly amount
that can be withdrawn is $125. The maximum monthly amount that can be withdrawn
on an annual basis is equal to the sum, as of the date of the first withdrawal,
of (a) 10% of Purchase Payments that are less than seven Contract Years old and
(b) 10% of remaining Purchase Payments that are at least seven Contract Years
old.
Systematic withdrawals are not subject to the Contingent Deferred Sales
Load but can be reduced by any applicable premium tax. Systematic withdrawals
may be taxable, subject to withholding, and subject to the 10% penalty tax. (See
"Federal Tax Matters" page __.)
The withdrawals will continue unless terminated by the Owner or
automatically terminated by Transamerica as set forth in the Contract. If this
option is terminated it may not be elected again until the next Contract
Anniversary. Partial withdrawals can not be made while the Systematic Withdrawal
Option is in effect. A partial withdrawal while this option is in effect will
automatically terminate the Systematic Withdrawal Option and the full amount may
be subject to a Contingent Deferred Sales Load.
Transamerica reserves the right to impose an annual fee of an amount not to
exceed $25 for administrative expenses associated with processing the systematic
withdrawals. This fee, which is currently waived, will be deducted from each
systematic withdrawal in equal installments during a Contract Year.
Automatic Payout Option ("APO")
Prior to the Annuity Date, for Qualified Contracts, the Owner, by giving
written notice to the Service Center, may elect the Automatic Payout Option
(APO) to satisfy minimum distribution requirements under Sections 401(a)(9),
403(b), and 408(b)(3) of the Code for the Qualified Contract. This may be
elected no earlier than six months prior to the calendar year in which the Owner
attains age 701/2, but payments may not begin earlier than January of such
calendar year. Additionally, APO withdrawals may not begin before the later of
(a) 30 days after the Contract Date or (b) the end of the Free Look Period. APO
may be elected in any calendar month, but no later than the month in which the
Owner attains age 84.
Withdrawals will be from the Variable Account Sub-Account(s) and in the
percentage allocations specified by the Owner. If no specifications are made,
withdrawals will be pro-rata from all Sub-Account(s) with value. Withdrawals can
not be made from a Sub-Account from which Dollar Cost Averaging transfers are
being made. The APO is not available with respect to the General Account
Options.
Payments will be made on the seventh day of the month, and will continue
unless terminated
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by the Owner or automatically terminated by Transamerica as set forth in the
Contract. Once
terminate, APO may not be elected again.
To be eligible for this option, the following conditions must be met: (1)
the Account Value must be at least $15,000 at the time of election; (2) the
annual withdrawal amount is the larger of the required minimum distribution
under Code Sections 401(a)(9) or 408(b)(3) or $500; and (3) the minimum amount
per payment (if not annual) must be at least $150.
If only APO withdrawals are made, no Contingent Deferred Sales Load will
apply, regardless of the free withdrawal amount. However, if a partial
withdrawal is taken, any applicable Contingent Deferred Sales Load will be
applied to both the APO and partial withdrawals. (See "Contingent Deferred Sales
Load" page __.)
APO allows the required minimum distribution to be paid in equal
installments, either monthly, quarterly, from the Variable Account. If there are
insufficient funds in the Variable Account to make a withdrawal, or for other
reasons as set forth in the Contract, this option will terminate.
Restrictions Under Section 403(b) Programs
Certain restrictions apply to annuity contracts used in connection with
Internal Revenue Code 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. In accordance
with the requirements of the Code, Section 403(b) annuities generally may not
permit distribution of (i) elective contributions made in years beginning after
December 31, 1988, and (ii) earnings on those contributions and (iii) earnings
on amounts attributable to elective contributions held as of the end of the last
year beginning before January 1, 1989. Distributions of such amounts will be
allowed only upon death of the employee, on or after attainment of age 591/2,
separation from service, disability, or financial hardship, except that income
attributable to elective contributions may not be distributed in the case of
hardship.
DEATH BENEFIT
If the Owner or Annuitant dies before the Annuity Date, a death benefit is
payable. For a Contract for which the Owner has not elected the optional
Enhanced Death Benefit, the death benefit with respect to the Variable Account
will be equal to the greater of (a) the Account Value or (b) the sum of all
Purchase Payments made to the Contract, less withdrawals and any applicable
premium taxes. For a Contract for which the Owner has elected the optional rider
providing for an Enhanced Death Benefit, the death benefit with respect to the
Variable Account will be equal to the greatest of (a) or (b) above or (c), the
greatest Account Value on any Contract Anniversary prior to the Owner's or
Annuitant's 75th birthday (which ever may occur earlier) increased by all
Purchase Payments less all withdrawals since that Contract Anniversary and less
any applicable premium taxes. If the deceased Owner or Annuitant, as applicable,
has
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attained age 85 the death benefit with respect to the Variable Account will be
equal to the Account Value.
Amounts in the Fixed Rate Option will be subject to a Market Value
Adjustment for the purpose of calculating the death benefit. See Appendix A for
a discussion of the calculation of the death benefit for Account Value, if any,
held in any Seven-Year Guaranteed Equity Index Option at the time of death.
Owners should consult their registered representative or investment adviser
(or see their Contract) for the applicable death benefit provision.
The death benefit will be determined as of the end of the Valuation Period
during which the later of (a) Proof of Death of the Owner or Annuitant is
received by the Service Center and (b) a written notice of the method of
settlement elected by the Beneficiary is received at the Service Center. If no
settlement method is elected, the death benefit will be paid no later than one
year after the date of death. No Contingent Deferred Sales Load will apply.
Until the death benefit is paid, the Account Value allocated to the Variable
Account remains in the Variable Account, and fluctuates with investment
performance of the applicable Fund(s). Accordingly, the amount of the death
benefit depends on the Account Value at the time the death benefit is paid.
There is no extra charge for the unenhanced death benefit, and it applies
automatically (i.e., no election by the Owner is necessary). In order for the
Enhanced Death Benefit to apply to a Contract, the Owner must elect the optional
Enhanced Death Benefit rider and pay the Enhanced Death Benefit Charge.
Payment of Death Benefit
The death benefit is generally payable upon receipt of Proof of Death of
the Annuitant or Owner. Upon receipt of this proof and an election of a method
of settlement, the death benefit generally will be paid within seven days, or as
soon thereafter as Transamerica has sufficient information about the Beneficiary
to make the payment. The Beneficiary may receive the amount payable in a lump
sum cash benefit or, subject to any limitations under any state or federal law,
rule, or regulation, under one of the Annuity Forms unless a settlement
agreement is effective under the Contract preventing such election. If no
settlement method is elected within one year of the date of death, the death
benefit will be paid in a lump sum. The payment of the death benefit may be
subject to certain distribution requirements under the federal income tax laws.
(See "Federal Tax Matters" page __.)
Designation of Beneficiaries
The Owner may select one or more Beneficiaries and name them in a form and
manner acceptable to Transamerica. If the Owner selects more than one
Beneficiary, unless otherwise indicated by the Owner they will share equally in
any death benefits payable in the event of the Annuitant's death before the
Annuity Date if there is no Contingent Annuitant, or the Owner's
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death if there is no Joint Owner. Different Beneficiaries may be named with
respect to the Annuitant's death (Annuitant's Beneficiary) and the Owner's death
(Owner's Beneficiary). Before the Annuitant's death, the Owner may change the
Beneficiary by notice to the Service Center. The Owner may also make the
designation of Beneficiary irrevocable by sending notice to and obtaining
approval from the Service Center. Irrevocable Beneficiaries may be changed only
with the written consent of the designated Irrevocable Beneficiaries, except to
the extent required by law.
The interest of any Beneficiary who dies before the Owner or Annuitant will
terminate at the death of the Beneficiary. The interest of any Beneficiary who
dies at the time of, or within 30 days after, the death of the Owner or
Annuitant will also terminate if no benefits have been paid unless the Contract
has been endorsed to provide otherwise. The benefits will then be paid as though
the Beneficiary had died before the Owner or Annuitant. If the interest of all
designated Beneficiaries has terminated, any benefits payable will be paid to
the Owner's estate.
Transamerica may rely on an affidavit by any responsible person in
determining the identity or non-existence of any Beneficiary not identified by
name.
Death of Annuitant Prior to the Annuity Date
If the Annuitant dies prior to the Annuity Date and the Annuitant is not an
Owner and there is no Contingent Annuitant, a death benefit under the Contract
relating to that Annuitant will be paid to the Annuitant's Beneficiary. If there
is a Contingent Annuitant, then the Contingent Annuitant will become the
Annuitant.
Death of Owner Prior to the Annuity Date
If an Owner dies before the Annuity Date, a death benefit will be paid to
that Owner's Beneficiary. If the Owner's Beneficiary is the deceased Owner's
spouse, then the spouse may elect to treat the Contract as his or her own. The
payment of the death benefit may be subject to certain distribution requirements
under the federal income tax laws. (See "Federal Tax Matters," page __.)
Death of Annuitant or Owner After the Annuity Date
If an Annuitant or Owner dies after the annuity starts, the remaining
undistributed portion, if any, of the Contract will be distributed at least as
rapidly as under the method of distribution being used as of the date of such
death. Under some Annuity Forms, there will be no death benefit.
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CHARGES AND DEDUCTIONS
No deductions are made from Purchase Payments except for any applicable
premium taxes. Therefore, the full amount of the Purchase Payments, less any
premium taxes, are invested in one or more of the Sub-Accounts of the Variable
Account and/or in the General Account Options.
Contingent Deferred Sales Load
No deduction for sales charges is made from Purchase Payments (although
premium tax may be deducted). However, a Contingent Deferred Sales Load of up to
6% of Purchase Payments made may be imposed on certain withdrawals or surrenders
to partially cover certain expenses incurred by Transamerica relating to the
sale of the Contract, including commissions paid to salespersons, the costs of
preparation of sales literature and other promotional costs and acquisition
expenses.
The Contingent Deferred Sales Load percentage varies according to the
number of Contract Years between the Contract Year in which a Net Purchase
Payment was credited to the Contract and the Contract Year in which the
withdrawal is made. The amount of the Contingent Deferred Sales Load is
determined by multiplying the amount withdrawn subject to the Contingent
Deferred Sales Load by the Contingent Deferred Sales Load percentage in
accordance with the following table. In no event shall the aggregate Contingent
Deferred Sales Load assessed against the Contract exceed 6% of the aggregate
Purchase Payments.
Number of
Contract Years
Since Receipt of Contingent Deferred Sales Load
Purchase Payment As a Percentage of Purchase Payment
Less than one year 6%
1 year but less than 2 years 6%
2 years but less than 3 years 5%
3 years but less than 4 years 5%
4 years but less than 5 years 4%
5 years but less than 6 years 4%
6 years but less than 7 years 2%
7 or more years 0%
Any Premiums that have been held by Transamerica for at least seven
Policy Years and not previously withdrawn may be withdrawn free of any
Contingent Deferred Sales Load. In addition, after the first Contract Year any
portion of a "Free Withdrawal Amount" may be withdrawn once each year free of
any Contingent Deferred Sales Load. The Free Withdrawal Amount available for the
first withdrawal in each Contract Year is equal to the greater of (a) 10% of
Purchase Payments held at least one but less than seven Contract Years prior to
the day of withdrawal, not adjusted for any prior withdrawals deemed to be made
from such Premium Payments, or (b) accumulated earnings not previously
withdrawn. Withdrawals will be made first from earnings and then from Purchase
Payments on a first in/first out basis. After the first withdrawal in a Contract
Year, free withdrawals can be made only from available earnings. The
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Free Withdrawal Amount may vary depending on the state of issuance. If the 10%
Free Withdrawal Amount is not withdrawn or paid out during a Contract Year, it
does not carry over to the next Contract Year.
In addition, no Contingent Deferred Sales Load is assessed upon
annuitization after the first three Contract Years to an option involving life
contingencies; upon payment of the death benefit; upon transfers of Account
Value; under the Systematic Withdrawal Option; or, in some circumstances, under
the Automatic Payout Option. Any applicable Contingent Deferred Sales Load will
be deducted from the amount requested for both partial withdrawals and full
surrenders. The Contingent Deferred Sales Load and any premium tax applicable to
a withdrawal from the Fixed Rate Option will be deducted from the amount
withdrawn after the market value adjustment, if any, is applied and before
payment is made.
In certain states, the Contingent Deferred Sales Load arising from a
withdrawal or surrender of the Contract will be waived if the Owner receives
extended medical care in a licensed hospital or nursing care facility for a
least 45 days during any continuous 60 day period beginning on or after the
first Contract Anniversary and the request for the withdrawal or surrender,
together with proof of such extended care, is received at the Service Center
during the term of such care or within 90 days after the last day upon which the
Owner received such extended care. This waiver of the Contingent Deferred Sales
Load may not be available in all states and does not apply if the Owner is
receiving extended medical care in a licensed hospital or nursing care facility
at the time the Contract is purchased.
Administrative Charges
At the end of each Contract Year before the Annuity Date, Transamerica
deducts an annual Account Fee as partial compensation for expenses relating to
the issue and maintenance of the Contract, and the Variable Account. The annual
Account Fee is equal to the lesser of $30 or 2% of the Account Value. The
Account Fee may be increased upon 30 days advance written notice, but in no
event may it exceed $60 (or 2% of the Account Value, if less) per Contract Year.
If the Contract is surrendered, the Account Fee will be deducted in full at the
time of such surrender. The Account Fee will be deducted on a pro rata basis
from each Sub-Account. If the entire Account is in the Fixed Account, then the
annual Account Fee will be deducted on a pro rata basis from the Fixed Rate
Options, and then from the Seven-Year Guaranteed Equity Index Option. The
Account Fee for a Contract Year may be waived if the Account Value exceeds
$50,000 on the last business day of that Contract Year or as of the date the
Contract is surrendered. This waiver of the Account Fee may not be available in
all states.
After the Annuity Date, an annual Annuity Fee of $30 will be deducted
in equal amounts from each Variable Annuity Payment made during the year ($2.50
each month if monthly payments). This fee will not be changed. No Annuity Fee
will be deducted from Fixed Annuity Payments.
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Transamerica also makes a deduction (the Administrative Expense Charge)
from the Variable Account at the end of each Valuation Period (both before and
after the Annuity Date) at an effective current annual rate of 0.15% of assets
held in each Sub-Account to reimburse Transamerica for administrative expenses.
Transamerica has the ability to increase or decrease this charge, but the charge
is guaranteed not to exceed 0.25%. Transamerica will provide 30 days written
notice of any change in fees. Transamerica believes that the Administrative
Expense Charge and Account Fee have been initially set (and will continue to be
set) at a level that will recover no more than the anticipated and estimated
costs associated with administering the Contract and Variable Account. The
administrative charges do not bear any relationship to the actual administrative
costs of a particular Contract. Transamerica does not expect to make a profit
from the Account Fee or the Administrative Expense Charge. The Administrative
Expense Charge is reflected in the Variable Accumulation or Variable Annuity
Unit Values for each Sub-Account.
Mortality and Expense Risk Charge
Transamerica imposes a Mortality and Expense Risk Charge to compensate
it for bearing certain mortality and expense risks under the Contracts. For
assuming these risks, Transamerica makes a daily charge equal to .003403%
(corresponding to an effective annual rate of 1.25%) of the value of the net
assets in the Variable Account. This charge is imposed both before and after the
Annuity Date. The approximate portion of this charge estimated to be
attributable to mortality risks is 0.65%; the approximate portion of this charge
attributable to expense risks is 0.60%. Transamerica guarantees that this charge
of 1.25% will never increase. The Mortality and Expense Risk Charge is reflected
in the Variable Accumulation and Variable Annuity Unit Values for each
Sub-Account.
Variable Account Values and Variable Annuity Payments are not affected
by changes in actual mortality experience incurred by Transamerica. The
mortality risks assumed by Transamerica arise from its contractual obligations
to make Annuity Payments determined in accordance with the annuity tables and
other provisions contained in the Contract and to pay death benefits prior to
the Annuity Date.
The expense risk assumed by Transamerica is the risk that
Transamerica's actual expenses in administering the Contracts and the Variable
Account will exceed the amount recovered through the Administrative Expense
Charge, Account Fees, Transfer Fees and any fees imposed for Systematic
Withdrawals.
If the Mortality and Expense Risk Charge is insufficient to cover
actual costs and risks assumed, the loss will fall on Transamerica. Conversely,
if this charge is more than sufficient, any excess will be profit to
Transamerica. Currently, Transamerica expects a profit from this charge.
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Transamerica anticipates that the Contingent Deferred Sales Load will
not generate sufficient funds to pay the cost of distributing the Contracts. To
the extent that the Contingent Deferred Sales Load is insufficient to cover the
actual cost of Contract distribution, the deficiency will be met from
Transamerica's general corporate assets which may include amounts, if any,
derived from the Mortality and Expense Risk Charge.
Enhanced Death Benefit Charge
If the Contract Owner has elected the Enhanced Death Benefit rider, an
Enhanced Death Benefit charge of 0.30% of the Average Death Benefit Amount will
be deducted on each Contract Anniversary or pro rata upon full surrender or
annuitization for expenses related to the Enhanced Death Benefit Charge. The
Average Death Benefit Amount is the mean of the death benefit amount on the most
recent Contract Anniversary and the death benefit amount on the immediately
preceding Contract Anniversary. The Enhanced Death Benefit Charge is deducted
from each Sub-Account on a pro rata basis through the cancellation of Variable
Accumulation Units.
Transamerica guarantees this charge of 0.30% will never increase.
Premium Taxes
Transamerica may be required to pay premium or retaliatory taxes
currently ranging from 0% to 3.5%. Depending upon applicable state law,
Transamerica may deduct a charge for these premium taxes from premium payments,
from amounts withdrawn, or from amounts applied on the Annuity Date. In some
states, charges for both direct premium taxes and retaliatory premium taxes may
be imposed at the same or different times with respect to the same Purchase
Payment, depending upon applicable state law.
In certain limited circumstances, a broker-dealer or other entity
distributing the Contracts may elect to pay to Transamerica an amount equal to
the premium taxes that would otherwise be attributable to that entity's
customers. In such cases, Transamerica will not impose a premium tax charge on
those contracts.
Transfer Fee
Transamerica currently does not charge for transfers. However,
Transamerica may impose a fee for each transfer in excess of the first six in a
single Contract Year. Transamerica will deduct the charge from the amount
transferred. This fee would be no more than $10 and would be used to help cover
Transamerica's costs of processing transfers.
Systematic Withdrawal Option
Transamerica reserves the right to impose an annual fee of an amount
not to exceed $25 for administrative expenses associated with processing
systematic withdrawals. This fee would be deducted from each systematic
withdrawal in equal installments during a Contract Year.
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Taxes
No charges are currently made for taxes other than state premium taxes.
However, Transamerica reserves the right to deduct charges in the future for
federal, state, and local taxes or the economic burden resulting from the
application of any tax laws that Transamerica determines to be attributable to
the Contracts.
Fund Expenses
The value of the assets in the Variable Account reflects the value of
Fund shares and therefore the fees and expenses paid by each Fund. A complete
description of the fees, expenses, and deductions from the Funds are found in
the Funds' prospectuses. (See "The Funds" page __.)
Market Value Adjustment
For a description of the market value adjustment applicable to early
withdrawals and transfers from the Fixed Rate Options, see "The General Account
Options -- the Fixed Rate Option" in Appendix A.
ANNUITY PAYMENTS
Annuity Date
The Annuity Date is the date that the Annuity Payments begin.
Initially, the Annuity Date is selected by the Owner. Thereafter, the Annuity
Date may be changed from time to time by the Owner by giving notice, in a form
and manner acceptable to Transamerica, to the Service Center, provided that
notice of each change is received by the Service Center at least thirty (30)
days prior to the then-current Annuity Date. The Annuity Date cannot be earlier
than the third Contract Anniversary, except for certain Qualified Contracts. The
latest Annuity Date which may be elected is the later of (a) the first day of
the calendar month immediately preceding the month of the Annuitant's 85th
birthday, or (b) the first day of the month coinciding with or next following
the tenth Contract Anniversary. This Annuity Date extension to the tenth
Contract Anniversary may not be available in all states.
The Annuity Date must be the first day of a calendar month. The first
Annuity Payment will be on the first day of the month immediately following the
Annuity Date.
Annuity Payments
The Annuity Purchase Amount is the Account Value, less any market value
adjustment, less any applicable Contingent Deferred Sales Load, less a pro rata
Enhanced Death Benefit Charge, if applicable, and less any applicable premium
taxes. Any Contingent Deferred Sales Load will be waived if the annuity payments
involve life contingencies and begin on or after the third Contract Anniversary.
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If the amount of the monthly Annuity Payment from any of the Payment
Options selected by the Owner would result in a monthly annuity payment of less
than $150, or if the Annuity Purchase Amount is less than $5,000, Transamerica
reserves the right to offer a less frequent mode of payment or pay the Cash
Surrender Value in a cash payment. Monthly Annuity Payments from the Variable
Annuity Payment Option will further be subject to a minimum monthly annuity of
$75 from each Sub-Account of the Variable Account from which such payments are
made.
The Owner may choose from the Annuity Forms below. Transamerica may
consent to other plans of payment before the Annuity Date. For Annuity Forms
involving life income, the actual age and/or sex of the Annuitant, or a Joint or
Contingent Annuitant will affect the amount of each payment. Sex-distinct rates
generally are not allowed under certain Qualified Contracts. Transamerica
reserves the right to ask for satisfactory proof of the Annuitant's (or Joint or
Contingent Annuitant's) age. Transamerica may delay Annuity Payments until
satisfactory proof is received. Since payments to older Annuitants are expected
to be fewer in number, the amount of each Annuity Payment shall be greater for
older Annuitants than for younger Annuitants.
The Owner may choose from the two Annuity Payment Options described
below. The Annuity Date and Annuity Forms available for Qualified Contracts may
also be controlled by endorsements, the plan or applicable law.
A portion or the entire amount of the Annuity Payments may be taxable
as ordinary income. If, at the time the Annuity Payments begin, Transamerica has
not received a proper written election not to have federal income taxes
withheld, Transamerica must by law withhold such taxes from the taxable portion
of such annuity payments and remit that amount to the federal government.
Federal income tax withholding is mandatory for certain distributions from
Section 401 retirement plans and 403(b) annuities. State income tax withholding
may also apply.
(See "Federal Tax Matters" page __.)
Election of Annuity Forms and Payment Options
Before the Annuity Date, and while the Annuitant is living, the Owner
may, by Written Request, change the Annuity Form or Annuity Payment Option. The
request for change of the Annuity Payment Option must be received by the Service
Center at least 30 days prior to the Annuity Date.
In the event that an Annuity Form and Payment Option is not selected at
least 30 days before the Annuity Date, Transamerica will make Variable Annuity
Payments in accordance with the 120 month period certain and life Annuity Form
and the applicable provisions of the Contract.
Annuity Payment Options
Owners may elect a Fixed Annuity, a Variable Annuity, or a combination
of both (in 25% increments of the Annuity Purchase Amount).
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Unless specified otherwise, the Annuity Purchase Amount in the Variable
Account will be used to provide a Variable Annuity and the General Account Value
will be used to provide a Fixed Annuity. In this event, the initial allocation
of Variable Annuity Units for the Variable Sub-Accounts will be in proportion to
the Contract's value in the Sub-Accounts on the Annuity Date.
Fixed Annuity Payment Option
A Fixed Annuity provides for Annuity Payments which will remain
constant pursuant to the terms of the Annuity Form elected. If a Fixed Annuity
is selected, the portion of the Annuity Purchase Amount used to provide the
Fixed Annuity will be transferred to the general account assets of Transamerica,
and the amount of Annuity Payments will be established by the fixed annuity
provisions selected and the age and sex (if sex-distinct rates are allowed by
law) of the Annuitant and will not reflect investment experience after the
Annuity Date. The Fixed Annuity Payment amounts are determined by applying the
Annuity Purchase Rate specified in the Contract to the portion of the Annuity
Purchase Amount applied to the Fixed Annuity Option. Payments may vary after the
death of the Annuitant under some Annuity Options; the amounts of these
variances are fixed on the Annuity Date.
Variable Annuity Payment Option
A Variable Annuity provides for payments that vary in dollar amount,
based on the investment performance of the selected Sub-Account(s) of the
Variable Account. The Variable Annuity Purchase Rate Tables in the Contract
reflect an assumed annual interest rate of 4%, so if the actual net investment
performance of the Sub-Account(s) is less than 4%, then the dollar amount of the
actual Annuity Payments will decrease. If the actual net investment performance
of the Sub-Account(s) is higher than 4%. then the dollar amount of the actual
Annuity Payments will increase. If the net investment performance exactly equals
the 4% rate, then the dollar amount of the actual Annuity Payments will remain
constant.
Variable Annuity Payments will be based on the Sub-Accounts selected by
the Owner, and on the allocations among the Sub-Accounts.
For further details as to the determination of Variable Annuity
Payments, see the Statement of Additional Information.
Annuity Forms
The Owner may choose any of the Annuity Forms described below. Subject
to approval by Transamerica, the Owner may select any other Annuity Forms then
being offered by Transamerica.
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(1) Life Annuity. Payments start on the first day of the month
immediately following the Annuity Date, if the Annuitant is living. Payments end
with the payment due just before the Annuitant's death. There is no death
benefit. It is possible that only one payment will be made 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.
(2) Life and Contingent Annuity. Payments start on the first day of the
month immediately following the Annuity Date, if the Annuitant is living.
Payments will continue for as long as the Annuitant lives. After the Annuitant
dies, payments will be made to the Contingent Annuitant, for as long as the
Contingent Annuitant lives. The continued payments can be in the same amount as
the original payments, or in an amount equal to one-half or two-thirds thereof.
Payments will end with the payment due just before the death of the Contingent
Annuitant. There is no death benefit after both die. If the Contingent Annuitant
does not survive the Annuitant, payments will end with the payment due just
before the death of the Annuitant. It is possible that only one payment or very
few payments will be made, if the Annuitant and Contingent Annuitant die shortly
after payments begin.
The written request for this form must: (a) name the Contingent
Annuitant; and (b) state the percentage of payments for the Contingent
Annuitant. Once Annuity Payments start under this Annuity Form, the person named
as Contingent Annuitant for purposes of being the measuring life, may not be
changed. Transamerica will require proof of age for the Annuitant and for the
Contingent Annuitant before payments start.
(3) Life Annuity With Period Certain. Payments start on the first day
of the month
immediately following the Annuity Date, if the Annuitant is living. Payments
will be made for
the longer of: (a) the Annuitant's life; or (b) the period certain. The
period certain may be 120
or 180 or 240 months, but in no event may it exceed the life expectancy of the
Annuitant.
If the Annuitant dies after all payments have been made for the period
certain, payments will cease with the payment due just before the Annuitant's
death. No benefit will then be payable to the Annuitant's Beneficiary.
If the Annuitant dies during the period certain, the rest of the period
certain payments will be made to the Annuitant's Beneficiary, unless the Owner
provides otherwise. The Owner may elect to have the commuted value of these
payments paid in a single sum. Transamerica will determine the commuted value by
discounting the rest of the payments at the then current rate of interest used
for commuted values.
If the Owner does not elect to have the commuted value paid in a single
sum after the Annuitant's death, the Owner may designate a Payee to receive any
remaining payments payable if the Annuitant's Beneficiary dies before all of the
payments under the period certain have been made. If the Annuitant's Beneficiary
dies before receiving all of the remaining period certain payments and a
designated Payee does not survive the Annuitant's Beneficiary for at least 30
days, then the remaining payments will be paid to the Owner, if living,
otherwise in a single
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sum to the Owner's estate.
The written request for this form must: (a) state the length of the
period certain; and
(b) name the Annuitant's Beneficiary.
(4) Joint and Survivor Annuity. Payments will be made to the Annuitant,
starting on the first day of the month immediately following the Annuity Date,
if and for as long as the Annuitant and Joint Annuitant are living. After the
Annuitant or Joint Annuitant dies, payments will continue for so long as the
survivor lives. Payments will be made to the survivor for his or her life.
Payments end with the payment due just before the death of the survivor. The
continued payments can be in the same amount as the original payments, or in an
amount equal to one-half or two-thirds thereof. It is possible that only one
payment or very few payments will be made under this form if the Annuitant and
Joint Annuitant both die shortly after payments begin.
The written request for this form must: (a) name the Joint Annuitant;
and (b) state the percentage of continued payments for the survivor. Once
payments start under this Annuity Form, the person named as Joint Annuitant, for
the purpose of being the measuring life, may not be changed. Transamerica will
need proof of age for the Joint Annuitant before payments start.
(5) Other Forms of Payment. Benefits can be provided under any other
Annuity Form not described in this section subject to Transamerica's agreement
and any applicable state or federal law or regulation. Requests for any other
Annuity Form must be made in writing to the Service Center at least 30 days
before the Annuity Date.
Once payments start under the Annuity Form and Payment Option selected
by the Owner: (a) no changes can be made in the Annuity Form and Payment Option;
(b) no additional Purchase Payment will be accepted under the Contract; and (c)
no further withdrawals will be allowed.
The Owner may, at any time after the Annuity Date by written notice to
us at our Service Center, change the Payee of annuity benefits being provided
under the Contract. The effective date of change in Payee will be the later of:
(a) the date we receive the Written Request for such change; or (b) the date
specified by the Owner. If the Contract is issued as an IRA, the Owner may not
change the Payee on or after the Annuity Date.
Alternate Fixed Annuity Rates
The amount of any Fixed Annuity Payments will be determined on the
Annuity Date by using either the guaranteed fixed annuity rates or
Transamerica's current single premium fixed annuity rates at the time, whichever
would result in a higher amount of monthly Fixed Annuity Payments.
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FEDERAL TAX MATTERS
Introduction
The following discussion is a general description of federal tax
considerations relating to the Contract and is not intended as tax advice. This
discussion is not intended to address the tax consequences resulting from all of
the situations in which a person may be entitled to or may receive a
distribution under the Contract. Any person concerned about these tax
implications should consult a competent tax adviser before initiating any
transaction. This discussion is based upon Transamerica's understanding of the
present federal income tax laws as they are currently interpreted by the
Internal Revenue Service. No representation is made as to the likelihood of the
continuation of the present federal income tax laws or of the current
interpretation by the Internal Revenue Service. Moreover, no attempt has been
made to consider any applicable state or other tax laws.
The Contract may be purchased on a non-tax qualified basis
("Non-Qualified Contract") or purchased and used in connection with plans
qualifying for favorable tax treatment ("Qualified Contract"). Qualified
Contracts are designed for use in connection with plans entitled to special
income tax treatment under Sections 401, 403(b), and 408 of the Code. The
ultimate effect of federal income taxes on the amounts held under a Contract, on
Annuity Payments, and on the economic benefit to the Owner, the Annuitant, or
the Beneficiary may depend on the type of retirement plan, and on the tax status
of the individual concerned. In addition, certain requirements must be satisfied
in purchasing a Qualified Contract with proceeds from a tax qualified retirement
plan and receiving distributions from a Qualified Contract in order to continue
receiving favorable tax treatment. Therefore, purchasers of Qualified Contracts
should seek competent legal and tax advice regarding the suitability of the
Contract for their situation, the applicable requirements, and the tax treatment
of the rights and benefits of the Contract. The following discussion assumes
that a Qualified Contract is purchased with proceeds from and/or contributions
under retirement plans that qualify for the intended special federal income tax
treatment.
The following discussion is based on the assumption that the Contract
qualifies as an
annuity contract for federal income tax purposes. The Statement of Additional
Information
discusses the requirements for qualifying as an annuity.
Taxation of Annuities
In General
Section 72 of the Code governs taxation of annuities in general.
Transamerica believes that an Owner who is a natural person generally is not
taxed on increases in the value of an Account until distribution occurs by
withdrawing all or part of the Account Value (e.g., withdrawals or Annuity
Payments under the Annuity Option elected). For this purpose, the assignment,
pledge, or agreement to assign or pledge any portion of the Account Value (and
in
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<PAGE>
the case of a Qualified Contract, any portion of an interest in the plan)
generally will be treated as a distribution. The taxable portion of a
distribution (in the form of a single sum payment or an annuity) is taxable as
ordinary income.
The Owner of any annuity contract who is not a natural person generally
must include in income any increase in the excess of the Account Value over the
"investment in the contract" (discussed below) during the taxable year. There
are some exceptions to this rule and a prospective Owner that is not a natural
person should discuss these with a competent tax adviser.
The following discussion generally applies to a Contract owned by a
natural person.
Withdrawals
In the case of a withdrawal under a Qualified Contract, including
withdrawals under the Systematic Withdrawal Option or the Automatic Payout
Option, a ratable portion of the amount received is taxable, generally based on
the ratio of the "investment in the contract" to the individual's total accrued
benefit under the retirement plan. The "investment in the contract" generally
equals the amount of any non-deductible Purchase Payments paid by or on behalf
of any individual. For a Qualified Contract , the "investment in the contract"
can be zero. Special tax rules may be available for certain distributions from a
Qualified Contract.
With respect to Non-Qualified Contracts, partial withdrawals, including
withdrawals under the Systematic Withdrawal Option, are generally treated as
taxable income to the extent that the Account Value immediately before the
withdrawal exceeds the "investment in the contract" at that time. If a partial
withdrawal from the Fixed Rate Option is subject to a market value adjustment,
the Account Value immediately before the withdrawal will not be altered to take
into account the market value adjustment. As a result, for purposes of
determining the taxable portion of the partial withdrawal, the Account Value
will be treated as including the amount deducted from the Fixed Rate Option due
to the market value adjustment. Full surrenders are treated as taxable income to
the extent that the amount received exceeds the "investment in the contract."
Annuity Payments
Although the tax consequences may vary depending on the Annuity Payment
elected under the Contract, in general, only the portion of the Annuity Payment
that represents the amount by which the Account Value exceeds the "investment in
the contract" will be taxed; after the "investment in the contract" is
recovered, the full amount of any additional Annuity Payments is taxable. For
Variable Annuity Payments, the taxable portion is generally determined by an
equation that establishes a specific dollar amount of each payment that is not
taxed. The dollar amount is determined by dividing the "investment in the
contract" by the total number of expected periodic payments. However, the entire
distribution will be taxable once the recipient has recovered the dollar amount
of his or her "investment in the contract." For Fixed Annuity Payments, in
general there is no tax on the portion of each payment which represents the same
ratio that the "investment in the contract" bears to the total expected value of
the Annuity
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Payments for the term of the payments; however, the remainder of each Annuity
Payment is taxable. Once the "investment in the contract" has been fully
recovered, the full amount of any additional Annuity Payments is taxable. If
Annuity Payments cease as a result of an Annuitant's death before full recovery
of the "investment in the contract," consult a competent tax advisor regarding
deductibility of the unrecovered amount.
Penalty Tax
In the case of a distribution pursuant to a Non-Qualified Contract,
there may be imposed a federal income tax penalty equal to 10% of the amount
treated as taxable income. In general, however, there is no penalty tax on
distributions: (1) made on or after the date on which the Owner attains age
591/2; (2) made as a result of death or disability of the Owner; or (3) received
in substantially equal periodic payments as a life annuity or a joint and
survivor annuity for the lives or life expectancies of the Owner and a
"designated beneficiary." Other tax penalties may apply to certain distributions
pursuant to a Qualified Contract.
Taxation of Death Benefit Proceeds
Amounts may be distributed from the Account because of the death of an
Owner or the Annuitant. Generally such amounts are includible in the income of
the recipient as follows: (1) if distributed in a lump sum, they are taxed in
the same manner as a full surrender as described above, or (2) if distributed
under an Annuity Option, they are taxed in the same manner as Annuity Payments,
as described above. For these purposes, the investment in the Contract is not
affected by the Owner's or Annuitant's death. That is, the investment in the
Contract remains the amount of any Purchase Payments paid which are not excluded
from gross income.
Transfers, Assignments, or Exchanges of the Contract
A transfer of ownership of a Contract, the designation of an Annuitant,
Payee, or other Beneficiary who is not also the Owner, or the exchange of a
Contract may result in certain tax consequences to the Owner that are not
discussed herein. An Owner contemplating any such designation, transfer,
assignment, or exchange should contact a competent tax adviser with respect to
the potential tax effects of such a transaction.
Multiple Contracts
All deferred non-qualified annuity contracts that are issued by
Transamerica (or its affiliates) to the same Owner during any calendar year are
treated as one annuity contract for purposes of determining the amount
includible in gross income under Section 72(e) of the Code. In addition, the
Treasury Department has specific authority to issue regulations that prevent the
avoidance of Section 72(e) through the serial purchase of annuity contracts or
otherwise. Congress has also indicated that the Treasury Department may have
authority to treat the combination purchase of an immediate annuity contract and
separate deferred annuity contracts as a single annuity contract under its
general authority to prescribe rules as may be necessary to
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<PAGE>
enforce the income tax laws.
Qualified Contracts
In General
The Qualified Contract is designed for use with several types of
retirement plans. The tax rules applicable to participants and beneficiaries in
retirement plans vary according to the type of plan and the terms and conditions
of the plan. Special favorable tax treatment may be available for certain types
of contributions and distributions. Adverse tax consequences may result from
contributions in excess of specified limits; distributions prior to age 591/2
(subject to certain exceptions); distributions that do not conform to specified
commencement and minimum distribution rules; aggregate distributions in excess
of a specified annual amount; and in other specified circumstances. We make no
attempt to provide more than general information about use of the Contracts with
the various types of retirement plans. Owners and participants under retirement
plans as well as annuitants and beneficiaries are cautioned that the rights of
any person to any benefits under Qualified Contracts may be subject to the terms
and conditions of the plans themselves, regardless of the terms and conditions
of the Contract issued in connection with such a plan. Some retirement plans are
subject to distribution and other requirements that are not incorporated in the
administration of the Contracts. Owners are responsible for determining that
contributions, distributions and other transactions with respect to the
Contracts satisfy applicable law. Purchasers of Contracts for use with any
retirement plan should consult their legal counsel and tax adviser regarding the
suitability of the Contract.
Qualified Pension and Profit Sharing Plans
Section 401(a) of the Code permits corporate employers to establish
various types of retirement plans for employees. Such retirement plans may
permit the purchase of the Contract in order to provide retirement savings under
the plans. The Self-Employed Individuals' Tax Retirement Act of 1962, as
amended, commonly referred to as "H.R. 10," also permits self-employed
individuals to establish qualified plans for themselves and their employees.
Adverse tax consequences to the plan, to the participant or to both may result
if this Contract is assigned or transferred to any individual as a means to
provide benefits payments. Purchasers of a Contract for use with such plans
should seek competent advice regarding the suitability of the proposed plan
documents and the Contract to their specific needs. The Contract is designed to
invest retirement savings and not to distribute retirement benefits.
Individual Retirement Annuities
The Contract is designed for use with IRA rollovers. Section 408 of the
Code permits eligible individuals to contribute to an individual retirement
program known as an Individual Retirement Annuity or Individual Retirement
Account (each hereinafter referred to as an "IRA"). Also, distributions from
certain other types of qualified plans may be "rolled over" on a tax-deferred
basis into an IRA. The sale of a Contract for use with an IRA may be subject to
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<PAGE>
special disclosure requirements of the Internal Revenue Service. Purchasers of a
Contract for use with IRAs will be provided with supplemental information
required by the Internal Revenue Service or other appropriate agency. Such
purchasers will have the right to revoke their purchase within 7 days of the
earlier of the establishment of the IRA or their purchase. Various tax penalties
may apply to contributions in excess of specified limits, aggregate
distributions in excess of $150,000 annually, distributions that do not satisfy
specified requirements, and certain other transactions. A Qualified Contract
will be amended as necessary to conform to the requirements of the Code.
Purchasers should seek competent advice as to the suitability of the Contract
for use with IRAs.
Section 403(b) Plans
Under Code Section 403(b), payments made by public school systems and
certain tax exempt organizations to purchase annuity contracts for their
employees are excludable from the gross income of the employee, subject to
certain limitations. However, these payments may be subject to FICA (Social
Security) taxes.
Code Section 403(b)(11) restricts the distribution under Code Section
403(b) annuity contracts of: (1) elective contributions made in years beginning
after December 31, 1988; (2) earnings on those contributions; and (3) earnings
in such years on amounts held as of the last year beginning before January 1,
1989. Distribution of those amounts may only occur upon death of the employee,
attainment of age 59 1/2, separation from service, disability, or financial
hardship. In addition, income attributable to elective contributions may not be
distributed in the case of hardship.
Withholding
Pension and annuity distributions generally are subject to withholding
for the recipient's federal income tax liability at rates that vary according to
the type of distribution and the recipient's tax status. Recipients, however,
generally are provided the opportunity to elect not to have tax withheld from
distributions. Federal income tax withholding is mandatory for certain
distributions from Section 401 or Section 403(b) retirement plans.
Restrictions under Qualified Contracts
Other restrictions with respect to the election, commencement, or
distribution of benefits may apply under Qualified Contracts or under the terms
of the plans in respect of which Qualified Contracts are issued.
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Possible Changes in Taxation
In past years, legislation has been proposed that would have adversely
modified the federal taxation of certain annuities. For example, one such
proposal would have changed the tax treatment of non-qualified annuities that
did not have "substantial life contingencies" by taxing income as it is credited
to the annuity. Although as of the date of this prospectus Congress is not
actively considering any legislation regarding the taxation of annuities, there
is always the possibility that the tax treatment of annuities could change by
legislation or other means (such as IRS regulations, revenue rulings, judicial
decisions, etc.). Moreover, it is also possible that any change could be
retroactive (that is, effective prior to the date of the change).
Other Tax Consequences
As noted above, the foregoing discussion of the federal income tax
consequences is not exhaustive and special rules are provided with respect to
other tax situations not discussed in this Prospectus. Further, the federal
income tax consequences discussed herein reflect Transamerica's understanding of
current law and the law may change. Federal estate and gift tax consequences and
state and local estate, inheritance, and other tax consequences of ownership or
receipt of distributions under the Contract depend on the individual
circumstances of each Owner or recipient of the distribution. A competent tax
adviser should be consulted for further information.
General
At the time the initial Purchase Payment is paid, a prospective
purchaser must specify whether he or she is purchasing a Non-Qualified Contract
or a Qualified Contract. If the Initial Premium is derived from an exchange or
surrender of another annuity contract, Transamerica may require that the
prospective purchaser provide information with regard to the federal income tax
status of the previous annuity contract. Transamerica will require that persons
purchase separate Contracts if they desire to invest monies qualifying for
different annuity tax treatment under the Code. Each such separate Contract
would require the minimum initial Purchase Payment stated above. Additional
Purchase Payments under a Contract must qualify for the same federal income tax
treatment as the initial Purchase Payment under the Contract; Transamerica will
not accept an additional Purchase Payment under a Contract if the federal income
tax treatment of such Purchase Payment would be different from that of the
initial Purchase Payment.
DISTRIBUTION OF THE CONTRACT
Transamerica Securities Sales Corporation ("TSSC") is the principal
underwriter of the Contracts. TSSC may also serve as an underwriter and
distributor of other contracts issued through the Variable Account and certain
other separate accounts of Transamerica and affiliates of Transamerica. TSSC is
a wholly-owned subsidiary of Transamerica Insurance Corporation of California,
which is a subsidiary of the Transamerica Corporation. TSSC is registered with
the Commission as a broker/dealer and is a member of the National Association of
Securities
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Dealers, Inc. ("NASD"). Its principal offices are located at 1150 South Olive
Street, Los Angeles, California 90015. Transamerica pays TSSC for acting as the
principal underwriter under a Distribution Agreement. TSSC may enter into sales
agreements with broker/dealers to solicit applications for the Contracts through
registered representatives who are licensed to sell securities and variable
insurance products.
Under the agreements, broker/dealers may receive compensation of up to
6.5% of any Purchase Payments made. Additional amounts may be paid in certain
circumstances (such as upon certain annuitizations, when an additional
commission of 2.5% of the Account Value annuitized may be paid). Asset based
trailer commissions may be paid in some situations.
LEGAL PROCEEDINGS
There is no pending material legal proceeding affecting the Variable
Account. Transamerica is involved in various kinds of routine litigation which,
in management's judgment, are not of material importance to Transamerica's
assets or to the Variable Account.
LEGAL MATTERS
Advice regarding certain legal matters concerning the federal
securities laws applicable to the issue and sale of the Contract has been
provided by Sutherland, Asbill & Brennan. The organization of Transamerica, its
authority to issue the Contract and the validity of the form of the Contract
have been passed upon by James W. Dederer, General Counsel and Secretary of
Transamerica.
ACCOUNTANTS
The consolidated financial statements of Transamerica for each of the
three years in the period ended December 31, 1995, have been audited by Ernst &
Young LLP, Independent Auditors, as set forth in their reports appearing in the
Statement of Additional Information, and are included in reliance upon such
reports given upon the authority of such firm as experts in accounting and
auditing. There are no audited financial statements for the Variable Account
since it had not commenced operations as of the date of this prospectus.
VOTING RIGHTS
To the extent required by applicable law, all Fund shares held in the
Variable Account will be voted by Transamerica at regular and special
shareholder meetings of the respective Funds in accordance with instructions
received from persons having voting interests in the corresponding Sub-Account.
If, however, the 1940 Act or any regulation thereunder should be amended, or if
the present interpretation thereof should change, or if Transamerica determines
that it is allowed to vote all Fund shares in its own right, Transamerica may
elect to do so.
The person with the voting interest is the Owner. The number of votes
which are
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available to an Owner will be calculated separately for each Sub-Account of the
Variable Account. Before the Annuity Date, that number will be determined by
applying his or her percentage interest, if any, in a particular Sub-Account to
the total number of votes attributable to that Sub-Account. The Owner holds a
voting interest in each Sub-Account to which the Account Value is allocated.
After the Annuity Date, the number of votes decreases as Annuity Payments are
made and as the reserves for the Contract decrease.
The number of votes of a Fund will be determined as of the date
coincident with the date established by that Fund for determining shareholders
eligible to vote at the meeting of the Funds. Voting instructions will be
solicited by written communication prior to such meeting in accordance with
procedures established by the respective Funds.
Shares as to which no timely instructions are received and shares held
by Transamerica as to which Owners have no beneficial interest will be voted in
proportion to the voting instructions which are received with respect to all
Contracts participating in the Sub-Account. 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 or entity having a voting interest in a Sub-Account will
receive proxy material, reports and other material relating to the appropriate
Fund.
It should be noted that the Funds are not required, and do not intend,
to hold annual or other regular meetings of shareholders.
AVAILABLE INFORMATION
Transamerica has filed a registration statement (the "Registration
Statement") with the Securities and Exchange Commission under the 1933 Act
relating to the Contract offered by this Prospectus. This Prospectus has been
filed as a part of the Registration Statement and does not contain all of the
information set forth in the Registration Statement and exhibits thereto, and
reference is hereby made to such Registration Statement and exhibits for further
information relating to Transamerica and the Contract. Statements contained in
this Prospectus, as to the content of the Contract and other legal instruments,
are summaries. For a complete statement of the terms thereof, reference is made
to the instruments filed as exhibits to the Registration Statement. The
Registration Statement and the exhibits thereto may be inspected and copied at
the office of the Commission, located at 450 Fifth Street, N.W., Washington,
D.C.
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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 that Statement:
TABLE OF CONTENTS Page
THE CONTRACT.............................................................
DOLLAR COST AVERAGING....................................................
NET INVESTMENT FACTOR....................................................
ANNUITY PERIOD...........................................................
Variable Annuity Units and Payments.............................
Variable Annuity Unit Value.....................................
Transfers After the Annuity Date................................
GENERAL PROVISIONS.......................................................
IRS Required Distributions......................................
Non-Participating...............................................
Misstatement of Age or Sex......................................
Proof of Existence and Age......................................
Assignment......................................................
Annuity Data....................................................
Annual Report...................................................
Incontestability................................................
Ownership.......................................................
Entire Contract.................................................
Changes in the Contract.........................................
Protection of Benefits..........................................
Delay of Payments...............................................
Notices and Directions..........................................
CALCULATION OF YIELDS AND TOTAL RETURNS..................................
Money Market Sub-Account Yield Calculation......................
Other Sub-Account Yield Calculations............................
Standard Total Return Calculations..............................
Hypothetical Performance Data...................................
Other Performance Data..........................................
HISTORIC PERFORMANCE DATA................................................
General Limitations.............................................
Fund Performance Data...........................................
FEDERAL TAX MATTERS......................................................
Taxation of Transamerica........................................
Tax Status of the Contract......................................
SAFEKEEPING OF VARIABLE ACCOUNT ASSETS...................................
STATE REGULATION.........................................................
RECORDS AND REPORTS......................................................
FINANCIAL STATEMENTS.....................................................
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Appendix A
THE GENERAL ACCOUNT OPTIONS
This Prospectus is generally intended to serve as a disclosure document
only for the Contract and the Variable Account. For complete details regarding
the General Account Options, see the Contract itself.
Account Value allocated to the General Account Options become part of
the general account of Transamerica, which supports insurance and annuity
obligations. Because of exemptive and exclusionary provisions, interests in the
general account have not been registered under the Securities Act of 1933 (the
"1933 Act"), nor is the general account registered as an investment company
under the 1940 Act. Accordingly, neither the general account nor any interests
therein are generally subject to the provisions of the 1933 Act or the 1940 Act,
and Transamerica has been advised that the staff of the Securities and Exchange
Commission has not reviewed the disclosures in this Prospectus which relate to
the General Account Options.
The General Account Options are part of the general account of
Transamerica. The general account of Transamerica consists of all the general
assets of Transamerica, other than those in the Variable Account, or in any
other segregated account. Transamerica has sole discretion to invest the assets
of its general account subject to applicable law.
The allocation or transfer of funds to the General Account Options does
not entitle the Owner to share in the investment experience of Transamerica's
general account.
There are two options available under the General Account:
the Seven-Year Guaranteed
Equity Index Option and the Fixed Rate Option, as described below.
THE SEVEN-YEAR GUARANTEED EQUITY INDEX OPTION
The Owner may allocate a minimum of $1,000 to the Seven-Year Guaranteed
Equity Index Option as of the last business day of each week (the "Initial
Option Value"). During the seven-year term, we (Transamerica) guarantee that we
will credit interest daily at a annual effective rate of 3%, compounded annually
(the "guaranteed minimum interest rate") to 90% of the Initial Option Value (the
"Guaranteed Surrender Value"), for a guaranteed return after seven years of 110%
of the Initial Option Value. At the end of the seven-year term, current interest
linked to the results of the S&P 500 Index will be credited to the Option Value
if the resulting amount is greater than the Guaranteed Surrender Value.
We set the initial index value for the Seven-Year Guaranteed Equity
Index Option as of the day the Initial Option Value is allocated (after the end
of the Free Look Period). The initial index value is equal to the level of the
S&P 500 Index at the close of trading the previous day, and is used to calculate
the current interest at the end of each term.
At the end of each term, we determine the current interest linked to
the results of the S&P
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500 Index by comparing the initial index value to the end-of-term average index
value. The endof-term average index value is derived using a feature known as
"smoothing".
Smoothing levels out the impact of fluctuations in the S&P 500 Index
during the final months of a term, since the current interest rate credited at
the end of a term is calculated by using the average of the S&P 500 Index values
on the last day of each month over a specified time period, the smoothing
period. The current "smoothing period" is the last 12 months of the current
seven-year term. Smoothing can protect contract owners against steep drops in
the S&P 500 Index near the end of the term but can potentially average out a
significant increase in the Index toward the end of a term.
The smoothing period is guaranteed for the duration of a term, but we
may change it subsequently. The "month-end" date used for setting the index
value during the smoothing period is not necessarily the last day of the month.
It is the same day each month as the date the option was allocated. For example,
if an option was allocated on the 15th of any month, the month-end date for that
option would always of the 15th of the month.
The specific details of the S&P 500 Index are described in an
endorsement attached to the Contract. In order to participate in the S&P 500
Index, the Contract must be in effect at the end of the seven-year term. The
participation rate shown on the data page of the Contract determines what
percentage of the index's increase will be used in calculating the Account Value
at the end of the term. The higher the participation rate, the greater the
percentage. The Seven-Year Guaranteed Equity Option currently credits current
interest at the end of the term based on a formula that reflects 100%
participation in the increase, if any, in the S&P 500 Index from the beginning
of the term to the smoothed end of the term.
Before the End of an initial term or continuous roll-over term, the
Guaranteed Surrender Value of the option will be calculated as follows:
(a) 100% of the Initial Option Value; less
(b) 10% of the Initial Option Value; plus
(c) any excess interest credits at the end of prior continuous
terms under the Seven Year Guaranteed Equity Index Option; plus
(d) interest on the above items at a rate of 3% per year, credited
daily. Three percent is the effective annual interest rate
that will be credited when daily interest credits have
compounded for a full year under the option.
On the Last Day of a Term, the Option Value will be determined as the
greater of the following values:
o The Guaranteed Surrender Value on the last day of that term; or
o The Initial Option Value; or
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o The Accumulated Option Value, calculated as follows:
(a) 100% of the Initial Option Value; plus
(b) any current interest credited at the end of prior continuous
terms under the Seven-
Year Guaranteed Equity Index Option; plus
(c) any end of term adjustments; plus
(d) current interest for the term.
Current interest for each term is calculated at the end of each term as:
IOV x PR x [the
average of the
index values on
the last day of
each month during
smoothing period -
Initial Index
Value] Initial
Index Value
where:
IOV = the Initial Option Value at the
beginning of the term.
PR = the participation rate during the term.
Initial Index Value = the value of the index established
at the end of the day
preceding the first day of the term.
The Initial Option Value at the beginning of any term is equal to the Option
Value on the last day of the preceding continuous term, or on the first day of
the first term under the option, as applicable.
For purposes of the preceding calculations, the following definitions apply:
"Average" means the sum of the ending values for the number of months in the
smoothing period divided by the number of months in the period;
"Excess interest" is determined as the result of the comparison of the Option
Value and the Guaranteed Surrender Value at the end of each term. If the Option
Value exceeds the Guaranteed Surrender Value, the difference in interest
credited to the Option Value and the interest credited to the Guaranteed
Surrender Value, reduced by any previous excess interest from prior continuous
terms, will be added as of the beginning of a roll-over term to the Guaranteed
Surrender Value as excess interest. If Option Value is withdrawn from the
Seven-Year Guaranteed Equity Index Option at the end of any term, the Guaranteed
Surrender Value will no longer be continuously calculated for that Option Value
and excess interest will no longer accumulate to that Option Value.
"End of term adjustments" means if, at the beginning of any roll-over term, the
Accumulated Option Value is less than the Guaranteed Surrender Value, the Option
Value will be increased to equal the Guaranteed Surrender Value.
"Smoothing period" is the number of months over which the index value will be
averaged at the end of the term.
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THIS OPTION IS ILLIQUID FOR THE ENTIRE SEVEN-YEAR TERM AND,
ACCORDINGLY, DOES NOT PERMIT ANY TRANSFERS OF ACCOUNT VALUE TO THE
SUB-ACCOUNTS OR OTHER GENERAL ACCOUNT OPTIONS OR FULL OR PARTIAL
WITHDRAWALS DURING SUCH SEVEN-YEAR TERM.
At the end of each seven-year term, the Owner may, without loss of
earnings, elect to transfer all or part of the Account Value held under this
option to any Sub-Account or another General Account Option, or renew
participation in this option. Such election must be received by the Company
during the renewal window -- the 30 day-period after the end of the seven-year
term. If no election is received during the renewal window, Account Value in the
Seven-Year Guaranteed Equity Index Option will automatically be transferred to a
Fixed Rate Option. This option may not be available at all times.
The Owner may not renew participation in the Seven-Year Guaranteed
Equity Index Option if the seven-year term would extend beyond the Annuity Date.
A transfer made during the renewal window the end of a seven-year term will not
be counted for purposes of determining the eighteen allowable transfers per
Contract Year.
At the end of each seven-year term, we will determine the available
terms and other conditions applicable to the next term, including, but not
limited to, the participation rate and smoothing period.
The Death Benefit under the Seven-Year Guaranteed Equity Index Option
is the greatest of: (a) the Initial Option Value; or (b) the Guaranteed
Surrender Value determined as of the date of death; or (c) the Accumulated
Option Value calculated as if the Contract Anniversary immediately before the
date of death was the end of the term.
[("S&P 500 (R)" is a trademark of The McGraw-Hill Companies, Inc. and has been
licensed for use by Transamerica Corporation.)]
DISCLAIMER REGARDING STANDARD & POOR'S 500 INDEX
The Seven-Year Guaranteed Equity Index Option (the "GEIO") is not
sponsored, endorsed, sold or promoted by Standard & Poor's Corporation ("S&P").
S&P makes no representation or warranty, express or implied, to investors in the
GEIO or any member of the public regarding the advisability of investing in
securities generally or in the GEIO particularly or the ability of the S&P 500
Index to track general stock market performance. S&P's only relationship to
Transamerica Life Insurance and Annuity Company is the licensing of certain
trademarks and trade names of S&P and of the S&P 500 Index which is determined,
composed and calculated by S&P without regard to Transamerica Life Insurance and
Annuity Company or the GEIO. S&P has no obligation to take the needs of
Transamerica Life Insurance and Annuity Company or the investors in the GEIO
into consideration in determining, composing or calculating the S&P 500 Index.
S&P is not responsible for and has not participated in the determination of the
timing of, prices at, or quantities of the GEIO to be issued or in the
determination or calculation of the equation by which the GEIO is to be
converted into cash. S&P has no obligation or liability in
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connection with the administration, marketing or trading of the GEIO.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P
500 INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR
IMPLIED, AS TO RESULTS TO BE OBTAINED BY TRANSAMERICA LIFE INSURANCE AND ANNUITY
COMPANY, INVESTORS IN THE GEIO, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF
THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS
LICENSED BY TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY OR FOR ANY OTHER
USE. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND HEREBY EXPRESSLY DISCLAIMS
ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE
WITH RESPECT TO THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING
ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY SPECIAL,
PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
THE FIXED RATE OPTION
The Fixed Rate Option provides a guaranteed fixed rate of interest
compounded annually for a specific Term. Amounts allocated to the Fixed Rate
Option will be credited with interest of no less than 3% per year. Amounts
withdrawn from a Fixed Rate Option prior to the end of its Term will be subject
to a Market Value Adjustments, as explained below.
The Owner bears the risk that, after the initial Term, Transamerica will not
credit interest in excess of 3% per year to amounts allocated to the Fixed Rate
Option.
Account Value allocated to the Fixed Rate Option will establish a new
Term of a duration selected by the Owner from among those then being offered by
Transamerica. Every Term offered by Transamerica will have a duration of at
least one year. The minimum amount that may be allocated or transferred to a
Term is $1,000. Net Purchase Payments allocated to the Fixed Rate Options will
be credited on the date the payment is received at the Service Center. Any
amount transferred from another Fixed Rate Option or from a Sub-Account of the
Variable Account to the Fixed Rate Option will establish a new Fixed Rate Option
as of the effective date of the transfer.
Terms
Each Term will have its own Guaranteed Interest Rate and Expiration
Date. The
A - 5
<PAGE>
Guaranteed Interest Rate applicable to a Term will depend on the date the Term
is established and the duration chosen by the Owner. A Term chosen may not
extend beyond the Annuity Date.
Transamerica reserves the right to change the maximum number of Terms
that may be in effect at any one time.
Transamerica will establish effective annual rates of interest for each
Term. The effective annual rate of interest established by Transamerica for a
Term will remain in effect for the duration of the Term.
Interest will be credited to a Term based on its daily balance at a
daily rate which is equivalent to the Guaranteed Interest Rate applicable to
that Term for amounts held during the entire Term. Amounts withdrawn or
transferred from a Term prior to its Expiration Date will be subject to an
Market Value Adjustment as described below. In no event will the effective
annual rate of interest applicable to a Term be less than 3% per year.
Market Value Adjustment
If Account Value is withdrawn or transferred from a Fixed Rate Option
prior to the expiration of its Term (including withdrawals for the purpose of
paying the Death Benefit), the amounts withdrawn or transferred will be subject
to a Market Value Adjustment ("MVA"). The MVA reflects the impact that changing
interest rates have on the value of money invested at a fixed interest rate. The
MVA is computed by multiplying the amount withdrawn or transferred by the
following factor:
[(1 + I) divided by (1 + J + 0.005)]N/12-1
where:
I is the Guaranteed Interest Rate in effect;
J is the Current Interest Rate available for a period equal to
the number of years remaining in the term at the time of
withdrawal or transfer (fractional years are rounded up to the
next full year); and
N is the number of full months remaining in the term at the time
the withdrawal or transfer request is processed.
In general the MVA will operate to [increase or] decrease the Contract
Value upon withdrawal or transfer when comparing the Guaranteed Interest Rate in
effect for that allocation to the Current Interest Rate (as of the date of the
transaction) that would apply for a Term equal to the number of full or
fractional years remaining in the Term as of that date. (For purposes of
determining the MVA, if the Company does not offer a Term of that duration, the
applicable Current Interest Rate will be determined by linear interpolation
between Current Interest Rates for two periods that are available). If the
Current Interest Rate thus determined plus 1/2 of one
A - 6
<PAGE>
percent is greater than the Guaranteed Interest Rate, the MVA will be negative
and Contract Value will be decreased. If the Current Interest Rate is exactly
1/2 of one percent less than the Guaranteed Interest Rate, the MVA will be zero
and Contract Value will not be affected by the MVA.
The impact of the MVA is more significant the greater is the time
remaining in the Term at the time of withdrawal or transfer.
Expiration of a Term
At least 45 days, but not more than 60 days, prior to the Expiration
Date of a Term,
Transamerica will notify the Owner as to the options available when a Term
expires. The Owner
may elect one of the following options:
(a) transfer the Account Value of that Term to a new Term from
among those being offered by Transamerica at such time. The
new Term will be established on the later of (i) the date
selected by the Owner, or (ii) the date the notice, in a form
and manner acceptable to Transamerica, is received by
Transamerica at the Service Center, but in no event later than
the day immediately following the Expiration Date of the
previous Term; or
(b) transfer the Account Value of that Term to one or more
Sub-Accounts of the Variable Account or to another General
Account Option then available.
Transamerica must receive the Owner's notice electing one of these
options at the Service Center by the expiration date of the Term. If such
election has not been received by Transamerica at the Service Center, the
Account Value of that Term will remain in the Fixed Rate Option and a new Term
of the same duration as the expiring Term, if offered, will automatically be
established by Transamerica with a new Guaranteed Interest Rate declared by
Transamerica for that Term. The new Term will start on the day following the
expiration date of the previous Term.
If Transamerica is not currently offering Terms having the same
duration as the expiring Term, the new Term will be the next longer duration, or
if Transamerica is not offering Terms longer than the duration of the expiring
Term, the next shorter duration.
If the Account Value of an expiring Term is less than $1,000,
Transamerica reserves the right to transfer such amount to the Money Market
Sub-Account of the Variable Account.
A transfer from a Term made within the 30-day period ending on its
Expiration Date will not be counted for the purpose of determining the eighteen
allowable transfers per Contract Year, nor will such transfer be subject to any
market value adjustment.
A - 7
<PAGE>
Appendix B
Example of Variable Accumulation Unit Value Calculations
Suppose the net asset value per share of a Fund at the end of the
current Valuation Period is $20.15; at the end of the immediately preceding
Valuation Period it was $20.10; the Valuation Period is one day; and no
dividends or distributions caused the Fund to go "ex-dividend" during the
current Valuation Period. $20.15 divided by $20.10 is 1.002488. Subtracting the
one day risk factor for Mortality and Expense Risk Charge and the Administrative
Expense Charge of .003814% (the daily equivalent of the current charge of 1.40%
on an annual basis) gives a Net Investment Factor of 1.002449. If the value of
the Variable Accumulation Unit for the immediately preceding Valuation Period
had been 15.500000, the value for the current Valuation Period would be
15.537966 (15.5 x 1.002449). Example of Variable Annuity Unit Value Calculations
Suppose the circumstances of the first example exist, and the value of
a Variable Annuity Unit for the immediately preceding Valuation Period had been
13.500000. If the first Variable Annuity Payment is determined by using an
annuity payment based on an assumed interest rate of 4% per year, the value of
the Variable Annuity Unit for the current Valuation Period would be 13.531613
(13.5 x 1.002449 (the Net Investment Factor) x 0.999893). 0.999893 is the
factor, for a one day Valuation Period, that neutralizes the assumed rate of
four percent (4%) per year used to establish the Variable Annuity Rates found in
the Contract.
Example of Variable Annuity Payment Calculations
Suppose that the Account is currently credited with 3,200.000000
Variable Accumulation Units of a particular Sub-Account.
Also suppose that the Variable Accumulation Unit Value and the Variable
Annuity Unit Value for the particular Sub-Account for the Valuation Period which
ends immediately preceding the first day of the month is 15.500000 and 13.500000
respectively, and that the Variable Annuity Rate for the age and option elected
is $5.73 per $1,000. Then the first Variable Annuity Payment would be:
3.200 x 15.5 x 5.73 divided by 1,000 = $284.21,
and the number of Variable Annuity Units credited for future payments
would be:
284.21 divided by 13.5 = 21.052444.
For the second monthly payment, suppose that the Variable Annuity Unit
Value on the 10th day of the second month is 13.565712. Then the second Variable
Annuity Payment would be $285.59 (21.052444 x 13.565712).
B - 1
<PAGE>
PART B
STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION FOR
XYZ VARIABLE ANNUITY
Issued By
Transamerica Life Insurance and Annuity Company
This Statement of Additional Information expands upon subjects discussed in
the current Prospectus for the XYZ Variable Annuity ("Contract") issued by
Transamerica Life Insurance and Annuity Company ("Transamerica") through
Transamerica Separate Account VA-6. The Owner may obtain a free copy of the
Prospectus by writing to: Transamerica Life Insurance and Annuity Company,
Annuity Service Center, P.O. Box XXXXXX, Charlotte, NC 28202 or calling (800)
XXX-XXXX. Terms used in the current Prospectus for the Contract are incorporated
into this Statement.
The Contract will be issued as a certificate under a group annuity contract
in some states and as an individual annuity contract in other states. The term
"Contract" as used herein refers to both the individual contract and the
certificates issued under the group contract.
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND
SHOULD BE READ ONLY IN CONJUNCTION WITH THE PROSPECTUS FOR THE
CONTRACT AND THE FUNDS.
Dated October 1, 1996
<PAGE>
TABLE OF CONTENTS
Page
THE CONTRACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DOLLAR COST AVERAGING . . . . . . . . . . . . . . . . . . . . . . . . . .
NET INVESTMENT FACTOR . . . . . . . . . . . . . . . . . . . . . . . . . .
ANNUITY PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Variable Annuity Units and Payments . . . . . . . . . . . . . . . . .
Variable Annuity Unit Value . . . . . . . . . . . . . . . . . . . . .
Transfers After the Annuity Date. . . . . . . . . . . . . . . . . . .
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IRS Required Distributions. . . . . . . . . . . . . . . . . . . . . .
Non-Participating . . . . . . . . . . . . . . . . . . . . . . . . . .
Misstatement of Age or Sex. . . . . . . . . . . . . . . . . . . . . .
Proof of Existence and Age. . . . . . . . . . . . . . . . . . . . . .
Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Annuity Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Annual Report . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Incontestability. . . . . . . . . . . . . . . . . . . . . . . . . . .
Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Entire Contract . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in the Contract . . . . . . . . . . . . . . . . . . . . . . .
Protection of Benefits. . . . . . . . . . . . . . . . . . . . . . . .
Delay of Payments . . . . . . . . . . . . . . . . . . . . . . . . . .
Notices and Directions. . . . . . . . . . . . . . . . . . . . . . . .
CALCULATION OF YIELDS AND TOTAL RETURNS . . . . . . . . . . . . . . . . .
Money Market Sub-Account Yield Calculation. . . . . . . . . . . . . .
Other Sub-Account Yield Calculations. . . . . . . . . . . . . . . . .
Standard Total Return Calculations. . . . . . . . . . . . . . . . . .
Hypothetical Performance Data . . . . . . . . . . . . . . . . . . . .
Other Performance Data. . . . . . . . . . . . . . . . . . . . . . . .
HISTORIC PERFORMANCE DATA. . . . . . . . . . . . . . . . . . . . . . . . .
General Limitations . . . . . . . . . . . . . . . . . . . . . . . . .
Fund Performance Data . . . . . . . . . . . . . . . . . . . . . . . .
FEDERAL TAX MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxation of Transamerica. . . . . . . . . . . . . . . . . . . . . . .
Tax Status of the Contract. . . . . . . . . . . . . . . . . . . . . .
SAFEKEEPING OF VARIABLE ACCOUNT ASSETS . . . . . . . . . . . . . . . . . .
STATE REGULATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
RECORDS AND REPORTS. . . . . . . . . . . . . . . . . . . . . . . . . . . .
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
THE CONTRACT
The following pages provides additional information about the Contract
which may be of interest to some Owners.
DOLLAR COST AVERAGING
We reserve the right to send written notification to the Owner as to the
options available if termination of Dollar Cost Averaging, either by the Owner
or by Transamerica, results in the value in the receiving Sub-Account(s) to
which monthly transfers were made to be less than $1,000. The Owner will have 10
days from the date our notice is mailed to:
(a) transfer the value of the Sub-Account(s) to another Sub-Account with
a value
equal to or greater than $1,000; or
(b) transfer funds from another Sub-Account into the receiving
Sub-Account(s) to bring the value of that Sub-Account to at least
$1,000; or
(c) submit an additional Purchase Payment (subject to the $500 minimum) to
make the value of the Sub-Account equal to or greater than $1,000; or
(d) transfer the entire value of the receiving Sub-Account(s) back into
the Sub-Account from which the automatic transfers were made.
If no election, in a form and manner acceptable to Transamerica, is made by
the Owner prior to the end of the 10 day period, we reserve the right to
transfer the value of the receiving Sub-Account(s) back into the Sub-Account
from which the automatic transfers were made. Transfers made as a result of (a),
(b), or (d) above will not be counted for purposes of the eighteen allowable
transfers per Contract Year limitation.
NET INVESTMENT FACTOR
For any Sub-Account of the Variable Account, the Net Investment Factor for a
Valuation Period, before the Annuity Date, is (a) divided by (b), minus (c)
minus (d):
Where (a) is:
The net asset value per share held in the Sub-Account, as of the end of the
Valuation Period; plus the per-share amount of any dividend or capital gain
distributions if the "exdividend" date occurs in the Valuation Period; plus or
minus a per-share charge or credit as Transamerica may determine, as of the end
of the Valuation Period, for taxes.
Where (b) is:
The net asset value per share held in the Sub-Account as of the end of the last
prior Valuation Period.
Where (c) is:
The daily charge of 0.003403% (1.25% annually) for the Mortality and Expense
Risk Charge times the number of calendar days in the current Valuation Period.
Where (d) is:
The daily Administrative Expense Charge, currently 0.000411% (0.15% annually)
times the number of calendar days in the current Valuation Period. This charge
may be increased, but will not exceed 0.000684% (0.25% annually).
A Valuation Day is defined as any day that both the New York Stock Exchange
and our Service Office are open. We currently expect that there are no days in
which the Exchange is open and our Service Office is closed.
ANNUITY PERIOD
The Variable Annuity Options provide for payments that fluctuate in dollar
amount, based on the investment performance of the elected Variable Account
Sub-Account(s).
Variable Annuity Units and Payments
For the first monthly payment, the number of Variable Annuity Units credited in
each Sub-Account will be determined by dividing: (a) the product of the portion
of the value to be applied to the Sub-Account and the Variable Annuity Purchase
Rate specified in the Contract; by (b) the value of one Variable Annuity Unit in
that Sub-Account on the Annuity Date.
The amount of each subsequent Variable Annuity Payment equals the product of
the number of Variable Annuity Units in each Sub-Account and the Sub-Account's
Variable Annuity Unit Value as of the tenth day of the month before the payment
due date. The amount of each payment may vary.
Variable Annuity Unit Value
The value of a Variable Annuity Unit in a Sub-Account on any Valuation Day is
determined as described below.
The Net Investment Factor for the Valuation Period (for the appropriate Annuity
Payment frequency) just ended is multiplied by the value of the Variable Annuity
Unit for the Sub-Account on the preceding Valuation Day. The Net Investment
Factor after the Annuity Date is calculated in the same manner as before the
Annuity Date and then multiplied by an interest factor. The interest factor
equals (.999893)n where n is the number of days since the preceding Valuation
Day. This compensates for the 4% interest assumption built into the Variable
Annuity Purchase Rates.
Transfers After the Annuity Date
After the Annuity Date, the Owner may transfer Variable Annuity Units from one
Sub-Account to another, subject to certain limitations. (See "Transfers" page
___ of the Prospectus.) The dollar amount of each subsequent monthly Variable
Annuity Payment after the transfer must be determined using the new number of
Variable Annuity Units multiplied by the Sub-Account's Variable Annuity Unit
Value on the tenth day of the month preceding payment.
The formula used to determine a transfer after the Annuity Date can be found in
the Appendix to this Statement of Additional Information.
GENERAL PROVISIONS
IRS Required Distributions
If any Owner under a Non-Qualified Contract dies before the entire interest in
the Contract is distributed, the value generally must be distributed to the
designated Beneficiary so that the Contract qualifies as an annuity under the
Code. (See "Federal Tax Matters" page ___).
Non-Participating
The Contract is non-participating. No dividends are payable and the Contract
will not share in the profits or surplus earnings of Transamerica.
Misstatement of Age or Sex
If the age or sex of the Annuitant or any other measuring life has been
misstated in the application, the Annuity Payments under the Contract will be
whatever the Annuity Purchase Amount applied on the Annuity Date would purchase
on the basis of the correct age or sex of the Annuitant and/or other measuring
life. Any overpayments or underpayments by Transamerica as a result of any such
misstatement may be respectively charged against or credited to the Annuity
Payment or Annuity Payments to be made after the correction so as to adjust for
such overpayment or underpayment.
Proof of Existence and Age
Before making any payment under the Contract, Transamerica may require proof of
the existence and/or proof of the age of the Annuitant or any other measuring
life, or any other information deemed necessary in order to provide benefits
under the Contract.
Assignment
No assignment of a Contract will be binding on Transamerica unless made in
writing and given to Transamerica at its Service Office. Transamerica is not
responsible for the adequacy of any assignment. The Owner's rights and the
interest of any Annuitant or non-irrevocable Beneficiary will be subject to the
rights of any assignee of record.
Annuity Data
Transamerica will not be liable for obligations which depend on receiving
information from a Payee or measuring life until such information is received in
a satisfactory form.
Annual Report
At least once each Contract Year prior to the Annuity Date, the Owner will be
given a report of the current Account Value allocated to each Sub-Account of the
Variable Account and each General Account Option. This report will also include
any other information required by law or regulation, including all transactions
which have occurred during the accounting period shown in the report. After the
Annuity Date, a confirmation will be provided with every Variable Annuity
Payment.
Incontestability
Each Contract is incontestable from the Contract Date.
Ownership
Only the Owner will be entitled to the rights granted by the Contract, or
allowed by Transamerica under the Contract. If the Owner dies, the rights of the
Owner belong to the estate of the Owner unless the Owner has previously named an
Owner's Beneficiary.
Entire Contract
Transamerica has issued the Contract in consideration and acceptance of the
payment of the Initial Purchase Payment and, where state law requires, the
application. In those states that require a written application, a copy of the
application is attached to and is part of the Contract and along with the
Contract constitutes the entire contract. All statements made by the Owner are
considered representations and not warranties. Transamerica will not use any
statement in defense of a claim unless it is made in the application and a copy
of the application is attached to the Contract when issued.
The group annuity contract has been issued to a trust organized under Missouri
law. However, the sole purpose of the trust is to hold the group annuity
contract. The Owner has all rights and benefits under the individual certificate
issued under the group contract.
Changes in the Contract
Only two authorized officers of Transamerica, acting together, have the
authority to bind Transamerica or to make any change in the individual contract
or the group contract or individual certificates thereunder and then only in
writing. Transamerica will not be bound by any promise or representation made by
any other persons.
Transamerica may change or amend the individual contract or the group contract
or individual certificates thereunder if such change or amendment is necessary
for the individual contract or the group contract or individual certificates
thereunder to comply with any state or federal law, rule or regulation.
Protection of Benefits
To the extent permitted by law, no benefit (including death benefits) under the
Contract will be subject to any claim or process of law by any creditor.
Delay of Payments
Payment of any cash withdrawal or lump sum death benefit due from the Variable
Account will occur within seven days from the date the election becomes
effective, except that Transamerica may be permitted to postpone such payment
if: (1) the New York Stock Exchange is closed for other than usual weekends or
holidays, or trading on the Exchange is otherwise restricted; or (2) an
emergency exists as defined by the Securities and Exchange Commission
(Commission), or the Commission requires that trading be restricted; or (3) the
Commission permits a delay for the protection of Owners.
In addition, while it is our intention to process all transfers from the
Sub-Accounts immediately upon receipt of a transfer request, the Contract gives
us the right to delay effecting a transfer from a Sub-Account for up to seven
days. We may delay effecting such a transfer if there is a delay of payment from
an affected Fund. If this happens, then we will calculate the dollar value or
number of units involved in the transfer from a Sub-Account on or as of the date
we receive a written transfer request, but will not process the transfer to the
transferee Sub-Account until a later date during the seven-day delay period when
the Fund underlying the transferring Sub-Account obtains liquidity to fund the
transfer request through sales of portfolio securities, new Purchase Payments,
transfers by investors or otherwise. During this period, the amount transferred
would not be invested in a Sub-Account.
Transamerica may delay payment of any withdrawal from the Fixed Account for a
period of not more than six months after Transamerica receives the request for
such withdrawal. If Transamerica delays payment for more than 30 days,
Transamerica will pay interest on the withdrawal amount up to the date of
payment. (See "Cash Withdrawals" page __ of the Prospectus.)
Notices and Directions
Transamerica will not be bound by any authorization, direction, election or
notice which is not in writing, in a form and manner acceptable to Transamerica,
and received at our Service Office.
Any written notice requirement by Transamerica to the Owner will be satisfied
by our mailing of any such required written notice, by first-class mail, to the
Owner's last known address as shown on our records.
CALCULATION OF YIELDS AND TOTAL RETURNS
Money Market Sub-Account Yield Calculation
In accordance with regulations adopted by the Commission, Transamerica is
required to compute the Money Market Sub-Account's current annualized yield for
a seven-day period in a manner which does not take into consideration any
realized or unrealized gains or losses on shares of the Money Market Series or
on its portfolio securities. This 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
hypothetical account having a balance of one unit of the Money Market
Sub-Account at the beginning of such seven-day period, dividing such 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 deductions for the annual
Account Fee, the Mortality and Expense Risk Charge and Administrative Expense
Charges and income and expenses accrued during the period. Because of these
deductions, the yield for the Money Market Sub-Account of the Variable Account
will be lower than the yield for the Money Market Series or any comparable
substitute funding vehicle.
The Commission also permits Transamerica to disclose the effective yield of the
Money Market Sub-Account for the same seven-day period, determined on a
compounded basis. The effective yield is calculated by compounding the
unannualized 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.
The yield on amounts held in the Money Market Sub-Account normally will
fluctuate on a daily basis. Therefore, the disclosed yield for any given past
period is not an indication or representation of future yields or rates of
return. The Money Market Sub-Account's actual yield is affected by changes in
interest rates on money market securities, average portfolio maturity of the
Money Market Series or substitute funding vehicle, the types and quality of
portfolio securities held by the Money Market Series or substitute funding
vehicle, and operating expenses. In addition, the yield figures do not reflect
the effect of any Contingent Deferred Sales Load (of up to 6% of Purchase
Payments) that may be applicable to a Contract.
Other Sub-Account Yield Calculations
Transamerica may from time to time disclose the current annualized yield of one
or more of the Sub-Accounts (except the Money Market Sub-Account) for 30-day
periods. The annualized yield of a Sub-Account refers to the income generated by
the Sub-Account over a specified 30-day period. Because this yield is
annualized, the yield generated by a Sub-Account during the 30-day period is
assumed to be generated each 30-day period. The yield is computed by dividing
the net investment income per Variable Accumulation Unit earned during the
period by the price per unit on the last day of the period, according to the
following formula:
YIELD = 2[{a-b + 1}6 1]
cd
Where:
a = net investment income earned during the period by the Fund
attributable to the shares owned by the Sub-Account.
b = expenses for the Sub-Account accrued for the period (net of
reimbursements).
c = the average daily number of Variable Accumulation Units
outstanding during the
period.
d = the maximum offering price per Variable Accumulation Unit on
the last day of the
period.
Net investment income will be determined in accordance with rules
established by the Commission. Accrued expenses will include all recurring fees
that are charged to all Contracts. The yield calculations do not reflect the
effect of any Contingent Deferred Sales Load that may be applicable to a
particular Contract. Contingent Deferred Sales Load range from 6% to 0% of the
amount of Account Value withdrawn depending on the elapsed time since the
receipt of each Purchase Payment attributable to the portion of the Account
Value withdrawn.
Because of the charges and deductions imposed by the Variable Account, the
yield for the Sub-Account will be lower than the yield for the corresponding
Fund. The yield on amounts held in the Sub-Accounts normally will fluctuate over
time. Therefore, the disclosed yield for any given period is not an indication
or representation of future yields or rates of return. The Sub-Account's actual
yield will be affected by the types and quality of portfolio securities held by
the Fund, and its operating expenses.
Standard Total Return Calculations
Transamerica may from time to time also disclose average annual total
returns for one or more of the Sub-Accounts for various periods of time. Average
annual total return quotations are computed by finding the average annual
compounded rates of return over one, five and ten year periods 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
ERV = ending redeemable value of a hypothetical $1,000 payment made
at the beginning of the one, five or ten-year period at the end
of the one, five, or ten-year period (or fractional portion
thereof).
All recurring fees are recognized in the ending redeemable value. The
standard average annual total return calculations will reflect the effect of any
Contingent Deferred Sales Loads that may be applicable to a particular period.
Hypothetical Performance Data
Transamerica may also disclose "hypothetical" performance data for a
Subaccount, for periods before the Subaccount commenced operations. Such
performance information for the Subaccount will be calculated based on the
performance of the corresponding Fund and the assumption that the Subaccount was
in existence for the same periods as those indicated for the Fund, with a level
of Contract charges currently in effect. The Fund used for these calculations
will be the actual Fund that the Subaccount will invest in.
This type of hypothetical performance data may be disclosed on both an
average annual total return and a cumulative total return basis. Moreover, it
may be disclosed assuming that the Contract is not surrendered (i.e., with no
deduction for the Contingent Deferred Sales Load) and assuming that the Contract
is surrendered at the end of the applicable period (i.e., reflecting a deduction
for any applicable Contingent Deferred Sales Load).
Other Performance Data
Transamerica may from time to time also disclose average annual total
returns in a non-standard format in conjunction with the standard described
above. The non-standard format will be identical to the standard format except
that the Contingent Deferred Sales Load percentage will be assumed to be 0%.
Transamerica may from time to time also disclose cumulative total returns
in conjunction with the standard format described above. The cumulative returns
will be calculated using the following formula assuming that the Contingent
Deferred Sales Load percentage will be 0%.
CTR = {ERV/P} 1
Where:
CTR = the cumulative total return net of Sub-Account recurring
charges for the period.
ERV = ending redeemable value of a hypothetical $1,000 payment at the
beginning of the one, five, or ten-year period at the end of the
one, five, or ten-year period (or fractional portion thereof).
P = a hypothetical initial payment of $1,000.
All non-standard performance data will be advertised only if the standard
performance data is also disclosed.
HISTORIC PERFORMANCE DATA
General Limitations
The figures below represent the past performance of the Funds and are not
indicative of future performance.
The Funds have provided the performance data given below. None of the Funds
is an affiliate of Transamerica. In preparing the tables below, Transamerica has
relied on the data provided by the Funds. While Transamerica has no reason to
doubt the accuracy of the data provided by the Funds, Transamerica has not
verified those figures.
Fund Performance Data
Transamerica may disclose performance data for the Funds of the Funds. This
performance data will include disclosure for periods prior to the dates the
Sub-Accounts commenced operations. It does not include separate account charges
which, if included, would reduce the performance figures.
The charts below show the historical performance data for the Funds since
each Fund's commencement of operations.
The average annual total return for each Fund is as follows:
For the period
from commencement
FUND For the 1-yearFor the 5-year of Fund
(date of commencement ofperiod endingperiod endingoperations to
operation of Fund) 12/31/95 12/31/95 12/31/95
The cumulative total return for each Fund for the period from the Fund's
commencement of operations to 12/31/95 is as follows:
For the period from
FUND For the 5-year commencement of
(date of commencement ofperiod ending Fund operations to
operation of Fund) 12/31/95 12/31/95
FEDERAL TAX MATTERS
The XYZ Variable Annuity may be purchased on a non-tax qualified basis
("Non-Qualified Contract") or purchased and used in connection with plans
qualifying for favorable tax treatment ("Qualified Contract"). Qualified
Contracts are designed for use by individuals in retirement plans which may or
may not be plans qualified for special tax treatment under Sections 401, 403(b)
or 408 of the Internal Revenue Code of 1986, as amended (the "Code"). The
ultimate effect of federal income taxes on the Account Value, on Annuity
Payments, and on the economic benefit to the Owner, the Annuitant or the
Beneficiary may depend on the type of retirement plan for which the Contract is
purchased, on the tax and employment status of the individual concerned and on
Transamerica's tax status. THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT
INTENDED AS TAX ADVICE. Any person concerned about these tax implications should
consult a competent tax adviser. This discussion is based upon Transamerica's
understanding of the present federal income tax laws as they are currently
interpreted by the Internal Revenue Service ("IRS"). No representation is made
as to the likelihood of continuation of these present federal income tax laws or
of the current interpretations by the Internal Revenue Service. Moreover, no
attempt has been made to consider any applicable state or other tax laws.
Taxation of Transamerica
Transamerica is taxed as a life insurance company under Part I of
Subchapter L of the Code. Since the Variable Account is not an entity separate
from Transamerica, and its operations form a part of Transamerica, it will not
be taxed separately as a "regulated investment company" under Subchapter M of
the Code. Investment income and realized capital gains are automatically applied
to increase reserves under the Contracts. Under existing federal income tax law,
Transamerica believes that the Variable Account investment income and realized
net capital gains will not be taxed to the extent that such income and gains are
applied to increase the reserves under the Contracts.
Accordingly, Transamerica does not anticipate that it will incur any
federal income tax liability attributable to the Variable Account and,
therefore, Transamerica does not intend to make provisions for any such taxes.
However, if changes in the federal tax laws or interpretations thereof result in
Transamerica being taxed on income or gains attributable to the Variable
Account, then Transamerica may impose a charge against the Variable Account
(with respect to some or all Contracts) in order to set aside provisions to pay
such taxes.
Tax Status of the Contract
Section 817(h) of the Code requires that with respect to Non-Qualified
Contracts, the investments of the Funds be "adequately diversified" in
accordance with Treasury regulations in order for the Contracts to qualify as
annuity contracts under federal tax law. The Variable Account, through the
Funds, intends to comply with the diversification requirements prescribed by the
Treasury in Reg. Sec. 1.817-5, which affect how the Funds' assets may be
invested.
In certain circumstances, owners of variable annuity contracts may be
considered the owners, for federal income tax purposes, of the assets of the
separate accounts used to support their contracts. In those circumstances,
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 has 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 for the investments of a
segregated asset account may cause the investor (i.e., the Owner), 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 Sub-Accounts without being treated as owners of the
underlying assets."
The ownership rights under the Contract are similar to, but different in
certain respects from, those described by the IRS in rulings in which it was
determined that Contract owners were not owners of separate account assets. For
example, the Owner has additional flexibility in allocating premium payments and
Account values. These differences could result in an Owner being treated as the
owner of a pro rata portion of the assets of the Variable Account. In addition,
Transamerica 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. Transamerica therefore reserves the right to modify the Contract as
necessary to attempt to prevent an Owner from being considered the owner of a
pro rata share of the assets of the Variable Account.
In order to be treated as an annuity contract for federal income tax
purposes, section 72(s) of the Code requires any Non-Qualified Contract to
provide that (a) if any Owner dies on or after the Annuity Date but prior to the
time the entire interest in the Contract 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 Date, the entire interest in the Contract
will be distributed within five years after the date of the Owner's death. These
requirements will be considered satisfied as to any portion of the Owner's
interest which is payable to or for the benefit of a "designated beneficiary"
and which is distributed over the life of such "designated beneficiary" or over
a period not extending beyond the life expectancy of that Beneficiary, provided
that such distributions begin within one year of the Owner's death. The Owner's
"designated beneficiary" refers to a natural person designated by such Owner as
a Beneficiary and to whom ownership of the Contract passes by reason of death.
However, if the Owner's "designated beneficiary" is the surviving spouse of the
Owner, the Contract may be continued with the surviving spouse as the new owner.
The Non-Qualified Contracts contain provisions which are intended to comply
with the requirements of section 72(s) of the Code, although no regulations
interpreting these requirements have yet been issued. Transamerica intends to
review such provisions and modify them if necessary to assure that they comply
with the requirements of Code section 72(s) when clarified by regulation or
otherwise. Other rules may apply to Qualified Contract.
SAFEKEEPING OF VARIABLE ACCOUNT ASSETS
Title to assets of the Variable Account is held by Transamerica. The assets
of the Variable Account are kept separate and apart from Transamerica general
account assets. Records are maintained of all purchases and redemptions of Fund
shares held by each of the Sub-Accounts.
STATE REGULATION
Transamerica is subject to the insurance laws and regulations of all the
states where it is licensed to operate. The availability of certain Contract
rights and provisions depends on state approval and/or filing and review
processes. Where required by state law or regulation, the Contract will be
modified accordingly.
RECORDS AND REPORTS
All records and accounts relating to the Variable Account will be
maintained by Transamerica or by its Service Office. As presently required by
the provisions of the 1940 Act and regulations promulgated thereunder which
pertain to the Variable Account, reports containing such information as may be
required under the 1940 Act or by other applicable law or regulation will be
sent to Owners semi-annually at their last known address of record.
<PAGE>
FINANCIAL STATEMENTS
[To be filed by pre-effective amendment.]
<PAGE>
PART C
OTHER INFORMATION
<PAGE>
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
All required financial statements are included in Parts A and B of this
Registration Statement.
(b) Exhibits:
(1) Resolutions of Board of Directors of Transamerica Life Insurance
and Annuity Company (the
"Company") authorizing the creation of Separate Account VA-6 (the
"Separate Account"). 1/
(2) Not Applicable.
(3) Form of Underwriting Agreement between the Company, the Separate
Account and Transamerica
Securities Sales Corporation.2/
(4) Form of Flexible Premium Deferred Variable Annuity Contract. 1/
(5) Form of Application for Flexible Premium Variable Annuity. 2/
(6) (a) Articles of Incorporation of Transamerica Life Insurance and
Annuity Company.1/
(b) By-Laws of Transamerica Life Insurance and Annuity Company.1/
(7) Not Applicable.
(8) Form of Participation Agreement between the Company and the Funds.2/
(9) Opinion and Consent of Counsel.2/
(10) (a) Consent of Counsel.2/
(b) Consent of Independent Auditors.2/
(11) No financial statements are omitted from Item 23.
(12) Not Applicable.
(13) Performance Data Calculations.2/
(14) Not Applicable.
(15) Powers of Attorney.1/
- ----------------------------
1/ Filed herewith.
2/ To be filed by subsequent Pre-Effective Amendment.
<PAGE>
Items 25. Directors and Officers of the Depositor.
The names of Directors and Executive Officers of the Company, their
positions and offices with the Company, and their other affiliations are as
follows. The address of Directors and Executive Officers is 1150 South Olive
Street, Los Angeles, California 90015-2211, unless indicated by asterisk.
List of Directors of Transamerica Life Insurance and Annuity Company
Robert Abeles Richard N. Latzer
Thomas J. Cusack Charels E. LeDoyen
James W. Dederer Karen MacDonald
John A. Fibiger Gary U. Rolle'
Richard H. Finn James B. Roszak
David E. Gooding William E. Simms
Edgar H. Grubb Nooruddin Veerjee
Frank C. Herringer Robert A. Watson
List of Officers for Transamerica Life Insurance and Annuity Company
John A. Fibiger FSA Chairman
Nooruddin S. Veerjee FSA President
Charles E. LeDoyen Executive Vice President
William E. Simms Executive Vice President
James W. Dederer CLU General Counsel and Secretary
Nicki Bair FSA Senior Vice President
John O. Meyers Senior Vice President
Richard N. Latzer Chief Investment Officer
Gary U. Rolle' CFA Chief Investment Officer
Glen. E. Bickerstaff Investment Officer
John M. Casparian Investment Officer
Kent L. Colwell Investment Officer
Heather E. Creeden Investment Officer
Colin Funai Investment Officer
Sharon K. Kilmer Investment Officer
Lyman Lokken Investment Officer
Michael G. Luongo Investment Officer
Matthew A. Palmer Investment Officer
Thomas C. Pokorski Investment Officer
Susan A. Silbert Investment Officer
John H. Strain Investment Officer
Jeffrey S. Van Harte Investment Officer
Paul Wintermute Investment Officer
John Abbott Vice President
Lawrence M. Agin FSA Vice President & Associate Actuary
Frank Beardsley Vice President
Marsha Blackman Vice President
David Chernow Vice President
Roy Chong-Kit Vice President & Chief Actuary-Group Pension
Matt Coben Vice President
John Cook Vice President-Administration
Paul Hankowitz MD Vice President & Chief Medical Director
Thomas Hauptli Vice President
Ahmad Kamil Vice President & Associate Acutary
James D. Lamb FSA Vice President & Acutary
Katharine Lomeli Vice President & Assistant Secretary
Vic Modugno Vice President & Associate Actuary
Mischelle Mullin Vice President
Paul L. Norris FSA Vice President & Actuary
Thomas P. O'Neill Vice President
Alison B. Pettingall Vice President
Donald P. Radisich Vice President
William N. Scott FLMI Vice President
Sandra Smith Vice President
Karen Stout Vice President
James O. Strand Vice President
Alice Su Vice President
Monica Weekes Vice President
Richard L. Weinstein FSA Vice President & Associate Actuary
Tony P. Wilkey Vice President
Sally S. Yamada CPA, FLMI Vice President & Treasurer
Reid A. Evers Second Vice President & Assistant General Counsel
David Fairhall FSA Second Vice President & Associate Actuary
Sharon Haley Second Vice President
Zahid Hussain Second Vice President & Associate Actuary
Karin Kemenes Second Vice President
Kenneth R. Kiefer Second Vice President
Ken Kilbane Second Vice President
Richard Levine Second Vice President
Christina Stiver Second Vice President
Emily Urbano Second Vice President
Aldo Davanzo Assitant Secretary
Wilbur L. Fulmer Tax Officer
Wayne Nakano CPA Controller
Kim A. Tursky Assistant Secretary
James Wolfenden Statement Officer
Item 26. Persons Controlled by or Under Common Control with the Depositor or
Registrant
Registrant is a separate account of Transamerica Life Insurance and Annuity
Company, is controlled by the Contract Owners, and is not controlled by or under
common control with any other person. The Depositor, Transamerica Life Insurance
and Annuity Company, is wholly owned by Transamerica Occidental Life Insurance
Company, which is wholly owned by Transamerica Insurance Corporation of
California (Transamerica-California). Transamerica-California may be deemed to
be controlled by its parent, Transamerica Corporation.
The following chart indicates the persons controlled by or under common
control with Transamerica.
TRANSAMERICA CORPORATION AND SUBSIDIARIES
WITH STATE OR COUNTRY OF INCORPORATION
Transamerica Corporation
ARC Reinsurance Corporation - Hawaii
*Coast Service Company - California
*Inter-America Corporation - California
*LMS Co. - California
*Mortgage Corporation of America - California
Pyramid Insurance Company, Ltd. - Hawaii
Pacific Cable Ltd. - Bermuda
TC Cable, Inc. (25% ownership) - Delaware
River Thames Insurance Company Ltd. (51% ownership) - United Kingdom
*RTI Holdings, Inc. - Delaware
*TCS Inc. - Delaware
*Trans International Entities Inc. - Delaware
Transamerica Airlines, Inc. - Delaware
Transamerica Asset Management Group, Inc. - Delaware
Criterion Investment Management Company - Texas
*Transamerica Corporation (Oregon) - Oregon
Transamerica Delaware, L.P. - Delaware
Transamerica Finance Group, Inc. - Delaware
Transamerica Financial Services Finance Company - Delaware
(TFG owns 100% of common stock; TFC owns 100% of preferred stock)
Transamerica HomeFirst, Inc. - California
Transamerica Finance Corporation - Delaware
BWAC Twelve, Inc. - Delaware
Transamerica Insurance Finance Corporation - Maryland
Transamerica Insurance Finance Corporation, California -
California
Transamerica Insurance Finance Corporation, Canada -
Canada
Transamerica Insurance Finance Company (U.K.) - Maryland
Arcadia General Insurance Company - Arizona
Arcadia National Life Insurance Company - Arizona
First Credit Corporation - Delaware
*Pacific Agency, Inc. - Indiana
Pacific Finance Loans - California
Pacific Service Escrow Inc. - Delaware
Transamerica Acceptance Corporation - Delaware
Transamerica Credit Corporation - Nevada
Transamerica Credit Corporation - Washington
Transamerica Financial Consumer Discount Company - Pennsylvania
Transamerica Financial Corporation - Nevada
Transamerica Financial Professional Services, Inc. - California
Transamerica Financial Services, Inc. - British Columbia
Transamerica Financial Services - California
NAB Services, Inc. - California
Transamerica Financial Services - Wyoming
Transamerica Financial Services Company - Ohio
Transamerica Financial Services, Inc. - Alabama
Transamerica Financial Services, Inc. - Arizona
Transamerica Financial Services, Inc. - Hawaii
Transamerica Financial Services, Inc. - Kansas
Transamerica Financial Services Inc. - Minnesota
Transamerica Financial Services, Inc. - New Jersey
Transamerica Financial Services, Inc. - Texas
Transamerica Financial Services (Inc.) - Oklahoma
Transamerica Financial Services of Dover, Inc. - Delaware
Transamerica Insurance Administrators, Inc. - Delaware
TELCO Holding Co., Inc. - Delaware
Transamerica Commercial Finance Corporation, I - Delaware
BWAC Credit Corporation - Delaware
BWAC International Corporation - Delaware
Transamerica Business Credit Corporation - Delaware
Transamerica Inventory Finance Corporation - Delaware
Transamerica Commercial Finance Corporation - Delaware
TCF Asset Management Corporation - Colorado
Transamerica Joint Ventures, Inc. - Delaware
BWAC Seventeen, Inc. - Delaware
*Transamerica Commercial Finance Canada, Limited - Ontario
Transamerica Commercial Finance Corporation, Canada -
Canada
*TCF Commercial Leasing Corporation, Canada - Ontario
Transamerica Commercial Finance France S.A. - France
BWAC Twenty-One, Inc. - Delaware
Transamerica Commercial Holdings Limited - United Kingdom
Transamerica Commercial Finance Limited - United Kingdom
Transamerica Trailer Leasing Limited -
United Kingdom (51%)
Transamerica GmbH Inc. - Delaware
Transamerica Financieringsmattschappij B.V. - Netherlands
*Transamerica Finanzierungs GmbH - Germany
(BWAC Twenty-One, Inc./Transamerica GmbH Inc.)
Transamerica Finanzierungs GmbH - Germany
TA Leasing Holding Co., Inc. - Delaware
Transamerica Leasing Inc. - Delaware
Transamerica Leasing Holdings, Inc. - Delaware
Greybox Services Ltd. - United Kingdom
Greybox L.L.C. - Delaware
Intermodal Equipment, Inc. - Delaware
Transamerica Leasing N.V. - Belgium
Transamerica Leasing Srl. - Italy
Transamerica Container Acquisition Corporation - Delaware
Transamerica Distribution Services Inc. - Delaware
Transamerica Leasing Coordination Center - Belgium
Transamerica Leasing do Brasil S/C Ltda. - Brazil
Transamerica Leasing GmbH - Germany
Transamerica Leasing (HK) Ltd. - Hong Kong
Transamerica Leasing Limited - United Kingdom
ICS Terminals (U.K.) Limited - United Kingdom
Transamerica Leasing Proprietary Limited - South Africa
Transamerica Leasing Pty. Ltd. - Australia
Transamerica Leasing (Canada) Inc. - Canada
Transamerica Tank Container Leasing Pty. Limited - Australia
Transamerica Trailer Holdings I Inc. - Delaware
Transamerica Trailer Holdings II Inc. - Delaware
Transamerica Trailer Holdings III - Delaware
Transamerica Trailer Leasing AB - Sweden
Transamerica Trailer Leasing (Belgium) N.V. -
Belgium
Transamerica Trailer Leasing (Netherlands) B.V. - Netherlands
Transamerica Trailer Leasing A/S - Denmark
Transamerica Trailer Leasing GmbH - Germany
Transamerica Trailer Leasing S.A. - France
Transamerica Trailer Leasing S.p.A. - Italy
Transamerica Trailer Spain, S.A. - Spain
Transamerica Transport Inc. - New Jersey
*Transamerica Homes, Inc. - Delaware
Transamerica Information Management Services, Inc. - Delaware
Transamerica Insurance Corporation of California - California
Arbor Life Insurance Company - Arizona
Plaza Insurance Sales, Inc. - California
*Transamerica Advisors, Inc. - California
Transamerica Annuity Service Corporation - New Mexico
Transamerica Financial Resources, Inc. - Delaware
Financial Resources Insurance Agency of Texas, Inc. - Texas
TBK Insurance Agency of Ohio - Ohio
Transamerica Financial Resources Insurance Agency of Alabama, Inc. -
Alabama
Transamerica Financial Resources Insurance Agency of Massachusetts,
Inc. - Massachusetts
Transamerica Securities Sales Corporation - Maryland
Transamerica International Insurance Services, Inc. - Delaware
Bulkrich Trading Limited (50%) - Hong Kong
Home Loans & Finance Limited - United Kingdom
Transamerica Occidental Life Insurance Company - California Bulkrich
Trading Limited (50%) - Hong Kong First Transamerica Life Insurance
Company - New York *NEF Investment Company - Delaware Transamerica
Life Insurance and Annuity Company - North Carolina
Transamerica Assurance Company - Missouri
Transamerica Life Insurance Company of Canada - Canada
Transamerica Variable Insurance Fund, Inc. - Maryland
USA Administration Services, Inc. - Kansas
Transamerica Products, Inc. - California
Transamerica Leasing Ventures, Inc. - California
Transamerica Products I, Inc. - California
Transamerica Products II, Inc. - California
Transamerica Products IV, Inc. - California
Transamerica Service Company - Delaware
Transamerica International Holdings, Inc. - Delaware
TC Cable, Inc. (75% ownership)
*Transamerica International Limited - Canada
Transamerica Investment Services, Inc. - Delaware
*Transamerica Land Capital, Inc. - California
*Bankers Mortgage Company of California - California
Transamerica LP Holdings Corp. - Delaware
Transamerica Real Estate Tax Service
Transamerica Flood Hazard Certification - New Jersey
Transamerica Realty Services, Inc. - Delaware
*The Gilwell Company - California
Pyramid Investment Corporation - Delaware
Transamerica Minerals Company - California
Transamerica Oakmont Corporation - California
Transamerica Properties, Inc. - Delaware
Transamerica Real Estate Management Co. - California
Transamerica Retirement Management Corporation - Delaware
Ventana Inn, Inc. - California
*Transamerica Systems Corporation - Delaware
Transamerica Telecommunications Corporation - Delaware
*Designates INACTIVE COMPANIES
A Division of Transamerica Corporation
Limited Partner; Transamerica Corporation is General Partner
*Designates INACTIVE COMPANIES
A Division of Transamerica Corporation
Limited Partner; Transamerica Corporation is General Partner
Item 27. Number of Contractowners
None.
Item 28. Indemnification
Item 29. Principal Underwriter
(a) Transamerica Securities Sales Corporation, the principal underwriter,
is also the underwriter and
distributor for shares of Transamerica Investors, Inc. The Underwriter is
wholly-owned by Transamerica Insurance
Corporation of California.
(b) The following table furnishes information with respect to each director
and officer of the principal Underwriter currently distributing securities of
the registrant:
Barbara Kelley Director & President
Regina Fink Director & Secretary
James Roszak Director
Nooruddin Veerjee Director
Dan Trivers Senior Vice President
Nicki Bair Vice President
Chris Shaw Second Vice President
Ben Tang Treasurer
Item 30. Location of Accounts and Records
Physical possession of each account, book, or other document required to be
maintained is kept at the Company's offices at 101 North Tryon Street,
Charlotte, North Carolina 28202.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) The registrant undertakes that it will file a post-effective amendment
to this registration statement as frequently as is necessary to ensure that the
audited financial statements in the registration statement are never more than
16 months old for as long as purchase payments under the contracts offered
herein are being accepted.
(b) Registrant hereby undertakes to 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 hereby undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available under
Form N-4 promptly upon written or oral request.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, Transamerica Life Insurance and Annuity Company certifies that it has
caused this registration statement to be signed on its behalf in the City of Los
Angeles, State of California, on the day of August, 1996.
SEPARATE ACCOUNT VA-6 OF
TRANSAMERICA LIFE INSURANCE
AND ANNUITY COMPANY
(REGISTRANT)
TRANSAMERICA LIFE INSURANCE
AND ANNUITY COMPANY
(DEPOSITOR)
----------------------------
Aldo Davanzo
Assistant Secretary
As required by the Securities Act of 1933, this Registration Statement has
been signed below on ________ ___, 1996 by the following persons or by their
duly appointed attorney-in-fact in the capacities specified:
Signatures Titles Date
______________________* President, Chief Executive _________, 1996
Nooruddin S. Veerjee
______________________* Chairman and Director _________, 1996
John A. Fibiger
______________________* Director _________, 1996
Robert Abeles
______________________* Director _________, 1996
Thomas J. Cusack
______________________* Director _________, 1996
James W. Dederer
______________________* Director _________, 1996
Richard H. Finn
______________________* Director _________, 1996
David E. Gooding
______________________* Director _________, 1996
Edgar H. Grubb
______________________* Director _________, 1996
Frank C. Herrringer
______________________* Director _________, 1996
Richard N. Latzer
______________________* Director _________, 1996
Charles E. LeDoyen
______________________* Director _________, 1996
Karen MacDonald
______________________* Director _________, 1996
Gary U. Rolle'
______________________* Director _________, 1996
James B. Roszak
______________________* Director _________, 1996
William E. Simms
______________________* Director _________, 1996
Robert A. Watson
_________________________ On ________ ____, 1996 as Attorney-in-Fact
pursuant to
*By: Aldo Davanzo powers of attorney filed herewith,
<PAGE>
EXHIBIT INDEX
Exhibit Description Page
No. of Exhibit No.*
(1)(a) Resolutions of Board of Directors of Transamerica Life
Insurance and Annuity Company creating Separate Account
VA-6
(4) Form of Flexible Premium Deferred Variable Annuity Contract
(6) (a) Articles of Incorporation of Transamerica Life Insurance and
Annuity Company.1/
(b) By-Laws of Transamerica Life Insurance and Annuity
Company.1/
(15) Powers of Attorney.1/
<PAGE>
EXHIBIT 1(A)
<PAGE>
SEPARATE ACCOUNTS
TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY
WHEREAS, this Corporation, as a domestic California insurance company,
adopted resolutions authorizing its proper officers to enter into, make, perform
and carry out contracts and to establish any number of separate accounts,
without further action or approval by this Board of Directors, pursuant to
Section 10506 of the California Insurance Code;
WHEREAS, this Corporation was redomesticated in North Carolina on November
6, 1994, and pursuant to that redomestication, has continued to conduct its
business pursuant to North Carolina laws; and
WHEREAS, this Corporation desires reaffirm its intention to continue
entering into variable contracts and establishing separate accounts, including
those for which registration with the SEC may be appropriate, without further
action or approval by the Board, pursuant to Section 58-7-95 of the North
Carolina Insurance Code;
THEREFORE IT IS RESOLVED, that this Corporation reaffirms that its proper
officers, be and hereby are authorized (1) to enter into, make, perform and
carry out contracts of every sort and kind which may be necessary, suitable or
convenient to the conduct of business pursuant to Section 58-7-95 of the North
Carolina Insurance Code, which permits a life insurance company to establish one
or more separate accounts and to allocate these separate accounts amounts that
are received or retained in connections with variable contracts; and (2) to do
all and everything necessary, suitable or convenient to the conduct of such
business, including any act or thing incidental to, or growing out of, or
connected with the conduct of such business and further including, but not
limited to, the power to establish new separate accounts, both pooled and
non-pooled, without further action or approval by this Board of Directors; and
FURTHER RESOLVED, that 1) the income, if any, and gains and losses,
realized and unrealized, from assets allocated to each such separate account
shall be credited to or charged against the account without regard to other
income, gains or losses of the Company; and 2) if and to the extent so provided
under the applicable contract, that portion of the assets of any such separate
account equal to the reserves and other contract liabilities with respect to
such account shall not be chargeable with liabilities rising out of any other
business that Company may conduct.
FURTHER RESOLVED, that the proper officers are authorized to take all
necessary and appropriate actions in order to effectuate the offering and sales
of variable contracts, including preparing, executing and/or filing all
necessary papers and documents including, but not limited to, registration
statements and applications for exemption, and amendments thereto, with the
Securities and Exchange Commission and/or other appropriate regulators and
government agencies.
<PAGE>
EXHIBIT 4
(4) Form of Flexible Premium Deferred Variable Annuity Contract
<PAGE>
=============================================
TRANSAMERICA Home Office:
LIFE COMPANIES 101 N. Tryon Street
One Independence Center
Charlotte, NC 28246
A Stock Company
(888) 704-1614
Transamerica Life
Insurance and
Annuity Company
ANNUITANT [John Doe] [Specimen] POLICY NUMBER
ANNUITY DATE [January 1, 2044] [October 1, 1996] POLICY DATE
==========================================================================
READ THIS POLICY CAREFULLY
This policy is a legal contract between the Owner and Transamerica Life
Insurance and Annuity Company (hereinafter referred to as "we", "us", "our" and
the "Company").
The Company will provide annuities and other benefits as set out in this Policy,
subject to its provisions. This policy is delivered in, and is governed by, the
laws of the State of Non Carolina.
RIGHT TO CANCEL - The Owner may cancel this Certificate by delivering or mailing
written notice or sending a telegram to: (a) the agent through whom the
Certificate was purchased; or (b) Transamerica Occidental Life Insurance
Company, Annuity Service Center, P.O. Box 60708, Los Angeles, California
90060-0708, before midnight of the tenth day after receipt of the Certificate.
Notice given by mail and the return of the Certificate by mail will be effective
as of the date the notice is received. We will refund an amount equal to the sum
of: (i) the difference between the Premiums paid including any fees or other
charges and the amounts, if any, allocated to the Variable Amount; and (ii) the
Account Value of the Certificate, within seven days after we receive such notice
to cancel and the returned Certificate.
PAYMENTS AND VALUES PROVIDED UNDER THIS CERTIFICATE WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE VARIABLE ACCOUNT ARE VARIABLE AND ARE NOT GUARANTEED AS TO
DOLLAR AMOUNT. REFER TO PAGE FOR ADDITIONAL INFORMATION ON THE VARIABLE ACCOUNT.
Signed for the Company at Los Angeles, California, to be effective as of the
Certificate Date.
TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY
EXECUTIVE VICE PRESIDENT GENERAL COUNSEL AND SECRETARY
FLEXIBLE PREMIUM MULTI-FUNDED DEFERRED ANNUITY POLICY
Variable and Fixed Dollar Annuity Options
Separate Account Investments
Non-Participating - No Annual Dividends
- -------------------------------------------------------------------------
3-501 VA96 Page 1
<PAGE>
POLICY DATA
- ------------------------------------------------------------------------------
POLICY INFORMATION
- ---------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Policy Number: [Specimen] Policy Status: [Non-Qualified]
Policy Date: [January 1, 1996] Initial Premium: [$20,000.00]
Annuity Date: [January 1, 2046]
- --------- -------------------------------------------------------------------
- -- -------------------------------------------------------------------
OWNER INFORMATION ANNUITANT INFORMATION
- --- -------------------------------------------------------------------
Owner: [John Doe] Annuitant: [John Doe]
Annuitant: [John Doe] Date of Birth: [January 1, 1959]
Date of Birth: [January 1, 1959] Tax ID Number: [999-99-9999]
Date of Birth: (January 1, 19591
Tax ID Number: [999-99-9999]
- -------------------------------------------------------------------
- -------------------------------------------------------------------
JOINT OWNER INFORMATION CONTINGENT ANNUITANT INFORMATION
- ------------------------------------------------------------------- ---
Joint Owner: [Jane Doe] Contingent Annuitant: [NIA]
[NIA] Date of Birth: [NIA]
Date of Birth: [January 1, 1959] Tax ID Number: [999-99-9999]
[NIA]
Tax ID Number: [999-99-9999]
- -------------------------------------------------------------------
- ------------------------------------------------------------------------
ALLOCATION OF INITIAL PREMIUM
- -----------------------------------------------------------------------
- -------------------------------------------------------------------
Money Market Portfolio: 10% International Equity Portfolio: 20%
Managed Assets Portfolio 20% Stock Index Fund 10%
Quality Bond Portfolio, 20%
Growth & Income Portfolio: 20% Total Allocations: 100%
- ------------------------------------------------------------------- -
This policy reflects the information with which your annuity has been set up. f
you wish to change/correct any information on this page, please call us
immediately at 1-(800) XXX-XXXX.
ADDITIONAL PREMIUM INFORMATION
MINIMUM INITIAL PREMIUM: $5,000.00
PREPAYMENT MINIMUM: $500.00
MAXIMUM TOTAL PREMIUM: $1,000,000.00
ANNUITY INFORMATION
ANNUITY FORM: LIFE ANNUITY WITH PERIOD CERTAIN OF 120 MONTHS
PAYMENT OPTION: 100% FROM VARIABLE ANNUITY PAYMENT OPTION
SERVICE OFFICE: Transamerica Life Insurance and Annuity Company
One Independence Center
101 N. Tryon Street
Charlotte, NC 28246
1-(800) XXX-XXYX
3-601 VA96 CONTINUED ON THE FOLLOWING PAGE Page 2
<PAGE>
POLICY DATA (Continued)
CHARGES AND FEES - Current charges and fees at the time we issued this Policy
are shown below.
MORTALITY AND EXPENSE RISK CHARGE: A daily charge equal to 0.003403%,
corresponding to an annual charge of 1.25%, of the assets in each
Sub-account of the Variable Account held for this Policy.
ADMINISTRATIVE EXPENSE CHARGE: A daily charge equal to 0.000411%,
corresponding to an annual charge of 0. 15%, of the
assets in each Sub-account of the Variable Account held for this Policy.
TRANSFER FEE: Currently, there is no Transfer Fee. However, prior to
the Annuity Date, we reserve the right to impose a Transfer Fee equal
to the lesser of 2% of the amount of the transfer, or $10.00, for each
transfer in excess of twelve made during a Policy Year.
CONTINGENT DEFERRED SALES LOAD: Unless waived as provided in this
Policy, a Contingent Deferred Sales Load may apply when a withdrawal
from, or surrender of, the Policy occurs. The Contingent Deferred Sales
Load is calculated as a percentage of the portion of the Premium
withdrawn. The Contingent Deferred Sales Load percentage varies
according to the number of complete Policy Years between the Policy
Year of receipt of the Premium and the Policy Year of withdrawal of all
or a portion of that Premium. The table of Contingent Deferred Sales
Load percentages are shown below.
Number of Contingent Deferred Sales Load
Complete Policy Years as a Percentage of Premium
Less than 1 year.............................6%
1 year but less than 2 years.................6%
2 years but less than 3 years................5%
3 years but less than 4 years................5%
4 years but less than 5 years................4%
5 years but less than 6 years................4%
6 years but less than 7 years................2%
7 or more years..............................0%
POLICY FEE: Prior to the Annuity Date, an annual fee equal to the
lesser of 2% of the Policy Value; or $30, will be deducted from the
Policy Value on the last business day of each Policy Year. There
will be no Policy Fee deducted for a Policy Year if the Policy
Value exceeds $50,000 on the last business day of that Policy Year,
or if earlier, as of the date the Policy is surrendered.
ANNUITY FEE: After the Annuity Date, an annual Annuity Fee equal
to $30 will be deducted in equal amounts ($2.50 per month) from
each annuity payment made under the Variable Annuity Payment
Option.
3-501 VA96 END OF POLICY DATA Page 2A
<PAGE>
SCHEDULE A
The following is a list of the
Sub-accounts of the
Variable Account available
under this Policy at the
time of issue.
Money Market Portfolio
Managed Assets Portfolio
Quality Bond Portfolio
Growth and Income Portfolio
International Equity Portfolio
Stock Index Fund
3-501 VA96 Page 2B
<PAGE>
TABLE OF CONTENTS
PAGE
POLICY DATA........................................2 & 2A
SCHEDULE A.........................................2B
DEFINITION OF TERMS................................5 - 6
PREMIUM PAYMENTS PROVISIONS
Payment and Acceptance of Premiums...............8
Allocation of Net Premiums.......................8
Initial Premium.... ... .........................8
Flexibility of Premium Payments..................8
Change in Premium Allocation.....................8
Premium Payment Limitations......................8
THE VARIABLE ACCOUNT
The Variable Account.............................9
Sub-accounts.....................................9
Variable Accumulation Units......................10
Net Investment Factor............................10
THE FIXED ACCOUNT
TRANSFER PROVISIONS
Transfers Between Sub-accounts......................11
Transfer Allocation ... ............................11
Minimum Transfer Amount.............................11
Transfer Limitations................................11
Effect on Variable Accumulation Units...............11
WITHDRAWAL PROVISIONS
Partial Withdrawals.................................12
Withdrawal Allocation...............................12
Minimum Withdrawal Amount...........................12
Withdrawal Limitations..............................12
Partial Withdrawal of Funds Without Charges.........12 & 13
Effect on Variable Accumulation Units....................13
SURRENDER PROVISIONS.......................................14
CONTINGENT DEFERRED SALES LOAD
Contingent Deferred Sales Load...........................14
Waiver of Contingent Deferred Sales Load.................14
PREMIUM TAXES, CHARGES, FEES AND SERVICES
Premium Taxes............................................15
Mortality and Expense Risk Charge........................15
Administrative Expense Charge............................15
Transfer Fee............................................ 15
Policy Fee...............................................15
Annuity Fee..............................................15
Limitation on Charges and Fees...........................15
Statements of Account....................................15
PAGE
ANNUITY PROVISIONS
Date Annuity Payments Start..............................16
Change of Annuity Date...................................16
Election to Change Annuity Form and Payment Option.......16
Minimum Amount of Monthly Annuity........................16
Immediate Annuity Certificates...........................16
Change of Payee..........................................16
ANNUITY FORMS....................................................17
FIXED ANNUITY PAYMENT OPTION.....................................17
VARIABLE ANNUITY PAYMENT OPTION
Variable Annuity Payment Option .... .........................1 B
Amount of First Variable Annuity Payment.......................18
Amount of Subsequent Variable Annuity Payments.................18
Annuity Unit Value.............................................18
Transfers of Variable Annuity Units......................1 8 & 19
DEATH BENEFIT PROVISIONS
If Annuitant Dies Before Annuity Starts........................20
If Owner Dies Before Annuity Starts............................20
If Annuitant Dies After Annuity Starts ........................21
If Owner Dies After Annuity Starts.............................21
Joint Ownership................................................21
Proof of Death. ... ...........................................21
BENEFICIARY PROVISIONS
Designation of Beneficiary.....................................21
Change of Beneficiary..........................................21
Death of Beneficiary..........................................21
Successive Beneficiaries......................................21
GENERAL PROVISIONS
Entire Contract.. ... ........................................22
Misstatement of Age and Sex...................................22
Proof of Existence and Age....................................22
Changes in the Policy.........................................22
Incontestability..............................................22
Assignment of the Policy......................................22
Payments by the Company.......................................22
Delay of Payment or Transfer..................................22
Facility of Payment...........................................22
Minimum Benefits..............................................22
Protection of benefits Proceeds.............................. 23
Notices and Directions........................................23
Non-Participating.............................................23
Voting Rights................................................ 23
APPENDIX - ANNUITY RATE TABLES.............................24 - 28
3-501
VA96
Page 4
<PAGE>
DEFINITION OF TERMS
Age - The age nearest birthday. The Ages of the Owner, Joint Owner (if any), and
of the Annuitant at the time we issued this Policy are shown on the Policy Data
page.
Allowed Amount - The amount that may be withdrawn each Policy Year without
incurring a Contingent Deferred Sales Load, as described under the Partial
Withdrawal of Funds without Charges provision of the Policy.
Annuitant - The person named on the Policy Data page. The Annuitant is the
person: (a) whose life is used to determine the amount of monthly annuity
payments on the Annuity Date; and (b) who is the payee designated to receive
monthly annuity payments, unless such payee is changed by the Owner. The
Annuitant cannot be changed after this Policy has been issued, except upon the
Annuitant's death prior to the Annuity Date if a Contingent Annuitant has
previously been named.
Annuitant's Beneficiary - The person or persons named by the Owner who may
receive the Death Benefit under the Policy, if: (a) the Annuitant is not the
Owner, there is no named Contingent Annuitant and the Annuitant dies before the
Annuity Date and before the death of the Owner; or (b) the Annuitant dies after
the Annuity Date under an Annuity Form containing a period certain option.
Annuity Date - The date shown on the Policy Data page. The Annuity Date is the
date on which the Annuity Purchase Amount is applied to determine the amount of
monthly annuity payments under the Annuity Form and Payment Option chosen by the
Owner. Monthly annuity payments will start on the first day of the month
immediately following the Annuity Date. The Annuity Date may be changed by the
Owner as provided under the Annuity Provisions.
Annuity Purchase Amount - The Annuity Purchase Amount is the amount applied as a
single premium to provide an annuity under the Annuity Form and Payment Option
elected by the Owner. The Annuity Purchase Amount is equal to the Policy Value,
less any applicable Contingent Deferred Sales Load and less any interest
adjustment less any applicable premium taxes. In determining the Annuity
Purchase Amount, we will waive the Contingent Deferred Sales Load if the Annuity
Form elected involves life contingencies and the Annuity Date occurs on or after
the third Policy Anniversary,
Annuity Year - A one-year period starting on the Annuity Date and, after that,
each succeeding one-year period.
Calendar Year - A one-year period beginning January 1 and ending December 31.
Cash Surrender Value - The amount payable to the Owner if the Policy is
surrendered on or before the Annuity Date. The Cash Surrender Value is equal to
the Policy Value, less the Policy Fee, if any, less any interest adjustment and
less any applicable Contingent Deferred Sales Load and applicable premium taxes.
Code - The U.S. Internal Revenue Code of 1986, as amended, and the rules and
regulations issued thereunder.
Contingent Annuitant - The person, if any, named on the Policy Data page. The
Contingent Annuitant is the person who: (a) becomes the Annuitant if the
Annuitant dies before the Annuity Date; or (b) may receive benefits under the
Policy if the Annuitant dies after the Annuity Date under an Annuity Form
containing a contingent annuity option. The Contingent Annuitant may be changed
by the Owner at any time while the Annuitant is living and be fore the Annuity
Date. In no event may a Contingent Annuitant be elected if the Owner and the
Annuitant are the same person.
Death Benefit - The benefit that may be payable by us to the Owner's or
Annuitants Beneficiary, as applicable, if the Owner or Annuitant dies before the
Annuity Date. The Death Benefit will be equal to the greater of. (a) the Policy
Value; or (b) the sum of all Premiums paid by the Owner, less the sum of all
withdrawals and any applicable premium taxes. The Death Benefit will be
determined as of the end of the Valuation Period during which the last of the
following items is received by us at our Service Office: (I) proof of death of
the Owner or Annuitant; and (it) the written notice of the method of settlement
elected by the Beneficiary.
3-501
VA96
Page 5
<PAGE>
Free Look Period - The period described in the Right To Cancel provision during
which the Policy may be canceled and treated as void from the Policy Date.
Net Investment Factor - A formula that measures the investment performance of a
Sub-account from one Valuation Period to the next.
Net Premium - A Premium reduced by any applicable premium tax.
Owner - The person or persons who, while living, controls all rights and
benefits under the Policy.
Owner (Joint Owners) - The person or persons named on the Policy Data page. The
Owner is the person who, while living, controls all rights and benefits under
the Policy. Joint Owners own the Policy equally with the right of survivorship.
The right of survivorship means that if a Joint Owner dies, his or her interest
in the Policy will pass to the surviving Joint Owner in accordance with the
Death Benefit Provisions on page 20. This policy may not have Joint Owners if
the Status shown on the Policy Data page is Qualified.
Owner's Beneficiary - If the Owner is an individual, the person who becomes the
Owner of the Policy if the Owner dies. If the Policy has Joint Owners, the
surviving Joint Owner will be deemed the Owner's Beneficiary.
Policy Anniversary-The same month and day as the Policy Date in each Calendar
Year after the Calendar Year in which the Policy Date occurs.
Policy Date - The date the Policy becomes effective. The Policy Date is shown on
the Policy Data page. Policy Value - The sum of the Variable Accumulated Value
and the Fixed Account Value.
Policy Year - The 12-month period starting on the Policy Date and ending with
the day before the Policy Anniversary, and each 12-month period thereafter. The
first Policy Year for any Net Premium is the Policy Year in which the Premium is
received by us at our Service Office.
Portfolio - An investment portfolio underlying one of the Sub-accounts of the
Variable Account. Premium - An amount paid to us as consideration for the
benefits provided under the Policy,
Status (Qualified and Non-Qualified) - The Status shown on the Policy Data page.
This policy has a Qualified status [i.e., Qualified IRA or Qualified 401 (a)l if
it is issued in connection with a retirement plan or program which receives
favorable federal income tax treatment under the Code. Any policy not qualified
to receive such favorable federal income tax treatment under the Code has a
Non-Qualified status.
Sub-account - A subdivision of the Variable Account investing solely in shares
of one of the Portfolios. The investment performance of each Sub-account is
linked directly to the investment performance of the underlying Portfolio.
Valuation Day - Any day the New York Stock Exchange is open for trading and that
is a regular business day of our Service Office.
Valuation Period - The time interval between the closing (generally 4:00 p.m.
Eastern Time) of the New York Stock Exchange on consecutive Valuation Days.
Variable Account - The Variable Account (Separate Account VA-2LNY) is a separate
account established and maintained by us for the investment of a portion of our
assets pursuant to Section 4240 of the New York Insurance Law and Regulation 47
(Part 50). The Variable Account contains several Sub-accounts to which Net
Premiums may be allocated.
Variable Accumulation Unit - A unit of measure used to determine the Policy
Value prior to the Annuity Date. The value of a Variable Accumulation Unit
varies with each Sub-account.
3-501
VA96
Page 6
<PAGE>
Variable Annuity Unit - A unit of measure used to determine the amount of the
second and each subsequent monthly variable annuity payment from the Variable
Account. The value of a Variable Annuity Unit varies with each Sub-account.
Variable Accumulation Value - The total dollar amount of all Variable
Accumulation Units under each Subaccount of the Variable Account held for this
Policy prior to the Annuity Date. The Variable Accumulated Value prior to the
Annuity Date is equal to:
(a) Net Premiums allocated to the Sub-accounts; plus or minus
(b) any increase or decrease in the value of the assets of the
Sub-accounts due to investment results; less (c) the daily Mortality and
Expense Risk Charge; less (d) the daily Administrative Expense Charge;
less (e) reductions for the annual Policy Fee deducted on the last
business day of each Policy Year; less (f) any applicable Transfer Fees;
and less (g) withdrawals from the Sub-accounts.
We, us, our and Company - First Transamerica Life Insurance Company, a stock
insurance company, with its Home Office in New York, New York.
3-501 VA96
Page 7
PREMIUM PAYMENT PROVISIONS
Payment and Acceptance of Premiums - All Premiums must be paid to us at our
Business Office or to an agent or person authorized by us to receive such
payments, A confirmation will be issued to the Owner upon acceptance of each
Premium.
Allocation of Net Premiums - Net Premiums may be allocated to one or more
Sub-accounts of the Variable Account, as directed by the Owner. The Variable
Account is described in detail starting on Page 9.
Initial Premium - The Initial Premium will be credited within two business days
of the later of: (a) the date we receive sufficient information, in a form and
manner acceptable to us, to issue this Policy; or (b) the date our Service
Office receives the Initial Premium, 1.
The allocation of the Initial Premium must be in whole number percentages and
must provide a minimum allocation of at least 10% of the Initial Premium to each
Sub-account of the Variable Account selected by the Owner. The allocation
percentages will be further subject to a minimum dollar amount of $1,000 to each
Sub-Subaccount chosen.
Flexibility of Premium Payments - Additional Premiums to this Policy may be paid
by the Owner at any time after the Initial Premium and before the Annuity Date.
Each Net Premium (derived from additional Premiums) will be credited on the date
such payment is received by us at our Service Office, provided that: (a) such
additional Premium is not less than the Per Payment Minimum shown on the Policy
Data page; and (b) any portion of the Net Premium allocated to a Sub-account of
the Variable Account with a zero balance, may not be less than $1,000. Each Net
Premium will be subject to the allocation percentages in effect at the time of
receipt of such Premium. We reserve the right to return to the Owner any
additional Premium which does not meet the conditions described in (a) and (b)
of this paragraph.
Change in Premium Allocation - The Owner may, at any time before the Annuity
Date, change the allocation percentages in effect for future Premium payments.
The allocation percentages must be in whole number percentages and must provide
a minimum allocation of at least 10% of future Premiums to each Sub-account of
the Variable Account selected by the Owner.
The change in allocation will be processed as of the date the request for such
change, in a form and manner acceptable to us, is received at our Service
Office. The change in allocation will take effect with the first Premium
received with or after receipt of the notice of change and will continue in
effect for future Premiums until subsequently changed.
Premium Payment Limitations - In no event may the sum of all Premiums paid
during any taxable year exceed the limits imposed by any applicable federal or
state law, rules or regulations. In no event may the total of all Premiums paid
during the life of the Policy exceed the Maximum Total Premium amount, shown on
the Policy Data page, without our approval.
We reserve the right to return to the Owner any portion of a Premium which would
cause the total of all Premiums paid to the Policy to exceed the Maximum Total
Premium amount shown on the Policy Data page.
3-501 VA96
Page 8
<PAGE>
PREMIUM PAYMENT PROVISIONS
Payment and Acceptance of Premiums-All Premiums must be paid to us at our
Service Office or to an agent or person authorized by us to receive such
payments. A confirmation will be issued to the Owner upon acceptance of each
Premium.
Allocation of Net Premiums - Net Premiums may be allocated to one or more
Sub-accounts of the Variable Account, as directed by the Owner. The Variable
Account is described in detail starting on Page 9.
Initial Premium - The Initial Premium will be credited within two business days
of the later of. (a) the date we receive sufficient information, in a form and
manner acceptable to us, to issue this Policy; or (b) the date our Service
Office receives the Initial Premium.
The allocation of the Initial Premium must be in whole number percentages and
must provide a minimum allocation of at least 10% of the Initial Premium to each
Sub-account of the Variable Account selected by the Owner. The allocation
percentages will be further subject to a minimum dollar amount of $1,000 to each
Sub-account chosen.
The Net Premium (derived from the Initial Premium) will first be allocated to
the Money Market Sub-account and will remain in that Sub-account until the end
of the Free Look Period. After the end of the Free Look Period, the total dollar
value of the Variable Accumulation Units held in the Money Market Sub-account
attributable to such Net Premium will be allocated to the Sub-accounts selected
by the Owner,
Flexibility of Premium Payments - Additional Premiums to this Policy may be paid
by the Owner at any time after the Initial Premium and before the Annuity Date.
Each Net Premium (derived from additional Premiums) will be credited on the date
such payment is received by us at our Service Office, provided that: (a) such
additional Premium is not less than the Per Payment Minimum shown on the Policy
Data page; and (b) any portion of the Net Premium allocated to a Sub-account of
the Variable Account with a zero balance, may not be less than $1,000. Each Net
Premium will be subject to the allocation percentages in effect at the time of
receipt of such Premium. We reserve the right to return to the Owner any
additional Premium which does not meet the conditions described in (a) and (b)
of this paragraph.
Change in Premium Allocation - The Owner may, at any time before the Annuity
Date, change the allocation percentages in effect for future Premium payments.
The allocation percentages must be in whole number percentages and must provide
a minimum allocation of at least 10% of future Premiums to each Sub-account of
the Variable Account selected by the Owner.
The change in allocation will be processed as of the date the request for such
change, in a form and manner acceptable to us, is received at our Service
Office. The change in allocation will take effect with the first Premium
received with or after receipt of the notice of change and will continue in
effect for future Premiums until subsequently changed.
Premium Payment Limitations - In no event may the sum of all Premiums paid
during any taxable year exceed the limits imposed by any applicable federal or
state law, rules or regulations. In no event may the total of all Premiums paid
during the life of the Policy exceed the Maximum Total Premium amount, shown on
the Policy Data page, without our approval.
We reserve the right to return to the Owner any portion of a Premium which would
cause the total of all Premiums paid to the Policy to exceed the Maximum Total
Premium amount shown on the Policy Data page.
3-501 VA96 (IRA)
Page 8
<PAGE>
THE VARIABLE ACCOUNT
The Variable Account - The Variable Account (Separate Account VA-6) is a
separate account established and maintained by us for the investment of a
portion of our assets pursuant to Section 58-7-95 of the North Carolina
Insurance Law. We will use the assets of the Variable Account to buy shares in
the various Portfolios. Net Premiums allocated to one or more Sub-accounts of
the Variable Account will become a part of Separate Account VA-6,
We are not, and do not claim to be, a trustee with respect to the Variable
Account, the assets of which are owned absolutely and exclusively by us. The
assets in the Variable Account shall not be chargeable with liabilities arising
out of any other business of the Company, except to the extent that they exceed
the reserves and other liabilities of the Variable Account. The assets of the
Variable Account maintained under this Policy and under all other policies of
this type will be kept separate from the assets held in our general account and
are not subject to the claims of the general creditors of the Company, Income,
gains and losses, whether or not realized, from assets in the Variable Account
are credited to, or charged against, the Variable Account without regard to
other income, gains or losses of the Company.
We will hold assets in the Variable Account with a value at least equal to the
total liability for the Variable Account under this and all other policies of
this type. To the extent those assets do not exceed this total, we will use them
to support only those policies and will not use those assets to support any
other business. We may use any excess over this amount at our sole discretion.
For all purposes under the Policy, we will determine the value of the assets in
the Variable Account at the end of each Valuation Day. To determine the value of
an asset on a day that is not a Valuation Day, we will use the value of that
asset as of the end of the next Valuation Day.
Sub-accounts - The Variable Account contains several Sub-accounts, each of which
invests solely in the shares of a specified Portfolio. Income, gains and losses,
whether or not realized, from assets in the Sub-accounts are credited to, or
charged against, the Sub-accounts without regard to other income, gains or
losses of the Company. The Sub-accounts available under this Policy are shown in
Schedule A.
We cannot and do not guarantee that any of the Sub-accounts of the Variable
Account will always be available for investment. We reserve the right, subject
to compliance with applicable federal or state law, rules or regulations to make
additions to, deletions from, or substitutions for, the Sub-accounts, or the
Portfolio shares held by a Subaccount of the Variable Account if such Portfolio
shares are no longer available for investment, or if we determine that continued
investment in such Portfolio would be inappropriate or inconsistent with the
purposes of the Variable Account. We will not substitute any shares attributable
to the Owner's interest in a Sub-account without advance written notice to the
Owner and prior approval of the Securities and Exchange Commission, to the
extent required by the Investment Company Act of 1940 (the "1940 Act"). Nothing
contained herein shall prevent the Variable Account from purchasing other
securities for other series or classes of variable policies, or from effecting
an exchange between series or classes of variable policies on the basis of
requests made by the Owner.
We reserve the right to establish additional Sub-accounts, each of which would
invest solely in shares of other Portfolios. If we decide to make those
Sub-accounts available under this Policy, we will send written notification to
the Owner. The Owner may instruct us to allocate future Premiums to those
Sub-accounts, or transfer all or a portion of the Policy Value to those
Sub-accounts, subject to the terms and conditions described under the Transfer
Provisions and by the Portfolio.
In the event of any addition, deletion or substitution of any Sub-account of the
Variable Account, we may, by appropriate endorsement make such changes to the
Policy as may be necessary to reflect such addition, deletion or substitution.
If we deem it to be in the best interest of Owners who have voting rights, the
Variable Account may be: (a) operated as a management company under the 1940 Act
or any other form permitted by law; (b) deregistered under the 1940 Act in the
event such registration is no longer required; or (e) combined with one or more
other separate accounts.
3-501 VA96
Page 9
<PAGE>
Variable Accumulation Units - Net Premiums and transfer allocated to a
Sub-amount are used to purchase Variable Accumulation Units in that Sub-account.
The number of Variable Accumulation Units to be credited to each Sub-account
will be determined by dividing the portion of each Net Premium or transfer
allocated to the Subaccount by that Sub-account's Variable Accumulation Unit
value for the Valuation Day on which the Premium was received at the Service
Office or for the Valuation Day on which the transfer was made.
The Net Premium (derived from the Initial Premium) will be credited with
Variable Accumulation Units within two business days of the later of., (a) the
date we receive sufficient information, in a form and manner acceptable to us,
to issue this Policy; or (b) the date our Service Office receives the Initial
Premium, In the case of any subsequent Premium, we will credit Variable
Accumulation Units for that Premium as of the date such payment is received by
us at our business Office, subject to the conditions described under the
Flexibility of Premium Payments provision.
The value of a Variable Accumulation Unit for each Sub-account at the end of any
Valuation Period is calculated by multiplying the value of that unit at the end
of the prior Valuation Period by the Sub-accounts Net Investment Factor for the
Valuation Period. The value of a Variable Accumulation Unit may go up or down.
Net Investment Factor - For any Sub-account, the Net Investment Factor for a
Valuation Period is determined by dividing (a) by (b), then subtracting (c).
Where (a) is
The net asset value per share hold in the Sub-account, as of the
end of the Valuation Period;
plus or minus
The per-share amount of any dividend or capital gain
distributions if the "exdividend" date occurs in the Valuation
Period; plus or minus
A per-share charge or credit as of the end of the Valuation
Period for tax reserves for realized and unrealized capital
gains, if any.
Where (b) is
The net asset value per share held in the Sub-account as of the
end of the last prior Valuation Period.
Where (e) is
The daily Mortality and Expense Risk Charge times the number of
calendar days in the current Valuation Period; plus
The daily Administrative Expense Charge times the number of
calendar days in the current Valuation Period.
3-501 VA96
Page 10
<PAGE>
Variable Accumulation Units - Net Premiums and transfers allocated to a
Sub-account are used to purchase Variable Accumulation Units in that
Sub-account. The number of Variable Accumulation Units to be credited to each
Sub-account will be determined by dividing the portion of each Net Premium or
transfer allocated to the Subaccount by that Sub-account's Variable Accumulation
Unit value for the Valuation Day on which the Premium was received at the
Service Office or for the Valuation Day on which the transfer was made.
The Net Premium delivered from the Initial Premium) allocated to the Money
Market Sub-account during the Free Look Period, will be credited with Variable
Accumulation Units within two business days of the later of. (a) the date we
receive sufficient information, in a form and manner acceptable to us, to issue
this Policy; or (b) the date our business Office receives the Initial Premium.
In the case of any subsequent Premium, we will credit Variable Accumulation
Units for that Premium as of the date such payment is received by us at our
Service Office, subject to the conditions described under the Flexibility of
Premium Payments provision.
The value of a Variable Accumulation Unit for each Sub-account at the end of any
Valuation Period is calculated by multiplying the value of that unit at the end
of the prior Valuation Period by the Sub-account's Net Investment Factor for the
Valuation Period. The value of a Variable Accumulation Unit may go up or down.
Net Investment Factor - For any Sub-account, the Net Investment Factor for a
Valuation Period is determined by dividing (a) by (b), then subtracting (c).
Where (a) is
The net asset value per share held in the Sub-account, as of the
end of the Valuation Period;
plus or minus
The per-share amount of any dividend or capital gain
distributions if the "exdividend" date occur in the Valuation
Period; plus or minus
A per-share charge or credit as of the end of the Valuation
Period for tax reserves for realized and unrealized capital
gains, if any.
Where (b) is
The net asset value per share held in the Sub-account as of the
end of the last prior Valuation Period.
Where (e) is
The daily Mortality and Expense Risk Charge times the number of
calendar days in the current Valuation Period; plus
The daily Administrative Expense Charge times the number of
calendar days in the current Valuation Period.
3-501 VA96 (IRA)
Page 10
<PAGE>
TRANSFER PROVISIONS
Transfers Between Sub-accounts - Before the Annuity Date, the Owner may transfer
all or any portion of the Policy Value to one or more Sub-accounts of the
Variable Account, subject to the provisions described below.
Transfer Allocation - Transfers will generally be effective as of the date the
request for the transfer, in a form and manner acceptable to us, is received at
our Service Office. The transfer request must specify: (a) the Subaccount(s)
from which the transfer is to be made; (b) the amount of the transfer, subject
to the minimum transfer amount described below; and (e) the Sub-account(s) to
receive the transferred amount.
Minimum Transfer Amount - Except as provided in the following sentence, the
minimum amount that may be transferred is the lesser of $500, or the entire
value of the Sub-account(s) from which the transfer is being made. Any transfer
amount allocated to a Sub-account of the Variable Account with a zero balance
may not be less than $1,000.
Transfer Limitations - Transfers among the Sub-accounts are limited to eighteen
during any Policy Year. If a transfer amount reduces the value of the
Sub-account from which the transfer was made to less than $1,000, we reserve the
right to transfer the remaining value in that Sub-account in accordance with the
transfer instructions provided by the Owner.
We also reserve the right to impose a Transfer Fee for each transfer in excess
of twelve made during a single Policy Year. If imposed, the amount of the
Transfer Fee will be as described under the Premium Taxes, Charges, Fees and
Service provision of the Policy.
Effect on Variable Accumulation Units - Transfers within the Variable Account
will result in the purchase and/or cancellation of Variable Accumulation Units
having a total value equal to the dollar amount being transferred to or from a
particular Sub-account. The purchase and/or cancellation of such units generally
shall be made using the Variable Accumulation Unit value of the applicable
Sub-account on the Valuation Day on which the transfer is effective.
3-501 VA96
Page 1 1
<PAGE>
WITHDRAWAL PROVISIONS
Partial Withdrawals - Before the Annuity Date, the Owner may withdraw a portion
of the Policy Value for cash, subject to any withdrawal limitations imposed
under any applicable federal or state law, rules or regulations, and further
subject to the provisions described below.
Withdrawal Allocation - Withdrawals will generally be processed as of the date
the request for the withdrawal, in a form and manner acceptable to us, is
received at our Service Office. The withdrawal request must specify the amount
of the withdrawal or the percentage of value to be withdrawn from each
Sub-account, subject to the minimum withdrawal amount described below. The Owner
may direct a withdrawal to be made from a specific Subaccount or taken pro rate
from all Sub-accounts. If the Owner does not specify the Sub-amount(s) from
which the withdrawal is to be made, the withdrawal Will be taken pro rate from
all Sub-accounts with current values.
Minimum Withdrawal Amount - The minimum amount that may be withdrawn is the
lesser of $500, or the entire value of the Sub-account from which the withdrawal
is being made.
Withdrawal Limitations - Withdrawals will be subject to any applicable
Contingent Deferred Sales Load (unless otherwise waived as described below and
on Page 14) and any applicable premium taxes. The Contingent Deferred Sales Load
and any premium tax applicable to a withdrawal will be deducted from the amount
withdrawn before payment is made to the Owner.
If a requested withdrawal reduces the value of the Sub-account from which the
withdrawal was made to less than $1,000, we reserve the right to transfer the
remaining value in that Sub-account pro rate among the other Sub-accounts of the
Variable Account with current values. The Owner will be notified in writing of
any such transfer made by us,
We will further notify the Owner if the requested withdrawal would reduce the
Policy Value to less than $2,000. The Owner will have 10 days from the date our
notice is given or mailed to: (a) withdraw a lesser amount (subject to a minimum
withdrawal amount of $500), leaving a Policy Value of at least $2,000; or (b)
surrender the Policy for its Cash Surrender Value. If, after the expiration of
the 10 day period, no election is received by us from the Owner, the withdrawal
request will be considered null and void, and no withdrawal will be processed.
Partial Withdrawal of Funds Without Charges - After the first Policy Year and
before the Annuity Date, the Owner may withdraw an amount up to the Allowed
Amount without incurring a Contingent Deferred Sales Load, as described on Page
13.
The Allowed Amount will be determined as of the date of withdrawal. If it the
first withdrawal in a policy year, the Allowed Amount is equal to the sum of (a)
plus (b), where (a) and (b) are as follows:
(a) 100% of Premiums, not previously deemed withdrawn, that were
received at least seven complete Policy Years prior to the date of
withdrawal; plus
(b) the greater of the accumulated earnings not previously deemed
withdrawn; or 10% of Premiums received at least one but less than seven
complete Policy Years prior to the date of withdrawal, not adjusted for
any withdrawals deemed to be made from such Premiums.
If it is not the first withdrawal in a year, the allowed amount is:
(a) 100% of Premiums, not previously deemed withdrawn, that were
received at least seven complete Policy Years prior to the date of
withdrawal; plus
(b) accumulated earning not previous withdrawn.
If the Owner requests a withdrawal of an amount which is greater than the
Allowed Amount during a Policy Year, that portion of the amount withdrawn in
excess of the Allowed Amount will be subject to a Contingent Deferred Sales
Load.
3-501 VA96
Page 12
Effect on Variable Accumulation Units - Withdrawals from the Variable Account
will result in the cancellation of Variable Accumulation Units having a total
value equal to the dollar amount being withdrawn from a particular Subaccount.
The cancellation of such units generally shall[l be made using the Variable
Accumulation Unit value of the applicable Sub-account as of the end of the
Valuation Day on which the withdrawal is processed.
3-501 VA96
Page 13
<PAGE>
WITHDRAWAL PROVISIONS
Partial Withdrawals - Before the Annuity Date, the Owner may withdraw a portion
of the Policy Value for cash, subject to any withdrawal limitations imposed
under any applicable federal or state law, rules or regulations, and further
subject to the provisions described below.
Withdrawal Allocation - Withdrawals will generally be processed as of the date
the request for the withdrawal, in a form and manner acceptable to us, is
received at our Service Office. The withdrawal request must specify the amount
of the withdrawal or the percentage of value to be withdrawn from each
Sub-account, subject to the minimum withdrawal amount described below. The Owner
may direct a withdrawal to be made from a specific Subaccount or taken pro rate
from all Sub-accounts. If the Owner does not specify the Sub-account(s) from
which the withdrawal is to be made, the withdrawal will be taken pro rate from
all Sub-accounts with current values.
Minimum Withdrawal Amount - The minimum amount that may be withdrawn is the
lesser of $500, or the entire value of the Sub-account from which the withdrawal
is being made.
Withdrawal Limitations - Withdrawals will be subject to any applicable
Contingent Deferred Sales Load (unless otherwise waived as described below and
on Page 14) and any applicable premium taxes. The Contingent Deferred Sales Load
and any premium tax applicable to a withdrawal will be deducted from the amount
withdrawn before payment is made to the Owner.
If a requested withdrawal reduces the value of the Sub-account from which the
withdrawal was made to less than $1,000, we reserve the right to transfer the
remaining value in that Sub-account pro rate among the other Sub-accounts of the
Variable Account with current values. The Owner will be notified in writing of
any such transfer made by us.
We will further notify the Owner if the requested withdrawal would reduce the
Policy Value to less than $2,000. The Owner will have 1 0 days from the date our
notice is given or mailed to: (a) withdraw a lesser amount (subject to a minimum
withdrawal amount of $500), leaving a Policy Value of at least $2,000; or (b)
surrender the Policy for its Cash Surrender Value. If, after the expiration of
the 10 day period, no election is received by us from the Owner, the withdrawal
request will be considered null and void, and no withdrawal will be processed.
Partial Withdrawal of Funds Without Charges - After the first Policy Year and
before the Annuity Date, the Owner may withdraw an amount up to the Allowed
Amount without incurring a Contingent Deferred Sales Load, as described on Page
13,
The Allowed Amount will be determined as of the date of withdrawal. If it not
the first withdrawal in a policy year, the Allowed Amount is equal to the sum of
(a) plus (b), where (a) and (b) are as follows:
(a) 100% of Premiums, not previously deemed withdrawn, that were
received at least seven complete Policy Years prior to the date of
withdrawal; plus
(b) the accumulated earnings not previously deemed withdrawn.
If it is not the first withdrawal in a year, the allowed amount is:
(a) 100% of Premiums, not previously deemed withdrawn, that were
received at least seven complete Policy Years prior to the date of
withdrawal; plus
(b) accumulated earning not previous withdrawn.
If the Owner requests a withdrawal of an amount which is greater than the
Allowed Amount during a Policy Year, that portion of the amount withdrawn in
excess of the Allowed Amount will be subject to a Contingent Deferred Sales
Load.
3-501 VA96
Page 12
<PAGE>
Effect on Variable Accumulation Units - Withdrawals from the Variable Account
will result in the cancellation of Variable Accumulation Units having a total
value equal to the dollar amount being withdrawn from a particular Subaccount.
The cancellation of such units generally shall be made using the Variable
Accumulation Unit value of the applicable Sub-account as of the end of the
Valuation Day on which the withdrawal is processed.
3-501 VA96
Page 13
<PAGE>
SURRENDER PROVISIONS
Surrender of Policy - on or before the Annuity Date, the Owner may surrender the
Policy to us for its Cash Surrender Value, Surrender of the Policy will be
subject to any withdrawal limitations imposed under applicable federal or state
law, rules or regulations.
The Owner's request for surrender will generally be processed as of the date the
request for surrender, in a form and manner acceptable to us, is received at our
Service Office. Payment of the Cash Surrender Value to the Owner will be in full
settlement of our liability under the Policy.
CONTINGENT DEFERRED SALES LOAD
Contingent Deferred Sales Load - Unless waived as provided under the Partial
Withdrawal of Funds Without Charges provision or as otherwise provided on Page
14, a Contingent Deferred Sales Load may apply when a withdrawal from, or
surrender of, the Policy occurs. For purposes of determining the Contingent
Deferred Sales Load, all withdrawals will be deemed to be made first from
accumulated earnings (which may generally be withdrawn without charge) and then
from Premiums on a first-in, first-out basis.
The Contingent Deferred Sales Load is calculated separately for each Policy Year
for Premiums received by us during such Policy Year, The Contingent Deferred
Sales Load is calculated as a percentage of the portion of the Premium
withdrawn. The applicable Contingent Deferred Sales Load percentages, as shown
below, are based on the number of complete Policy Years between the Policy Year
of receipt of the Premium and the Policy Year of withdrawal of all or a portion
of that Premium.
Number of Contingent Deferred Sales Load
Complete Policy Years as a Percentage of Premium
Less than 1 year...................................................6%
1 year but less than 2 years.......................................6%
2 years but less than 3 years......................................5%
3 years but less than 4 years......................................5%
4 years but less than 5 years......................................4%
5 years but less than 6 years......................................4%
6 years but less than 7 years......................................2%
7 or more years....................................................0%
Waiver of Contingent Deferred Sales Load - The Contingent Deferred Sales Load
will be waived:
(a) on the Allowed Amount, if. (i) surrender of the Policy occurs in
the second or subsequent Policy Year; and (if) the Owner was
eligible for a partial withdrawal of funds without charges but had
not made such a withdrawal during the Policy Year in which the date
of surrender occurs; or
(b) if the Policy Value is applied to provide an immediate annuity from
us under an Annuity Form involving life contingencies on or after the
third Policy Anniversary; or
(c) on distributions resulting from the death of the Owner or Annuitant
before the Annuity Date.
3-501
VA96
Page 14
<PAGE>
PREMIUM TAXES, CHARGES, FEES AND SERVICES
Premium Taxes - The amount of any applicable premium tax imposed on amounts
relating to this Policy may be withdrawn from the Policy. For purposes of this
Policy, premium taxes include retaliatory taxes or other similar taxes.
Mortality and Expense Risk Charge - The Company imposes a charge as compensation
for bearing certain mortality and expense risks under the Variable Account. The
Mortality portion of the charge compensates us for the mortality risk inherent
in the Death Benefit and for the mortality risk inherent with an annuity. The
Expense portion of the charge compensates us for the possibility that charges
and fees for administrative expenses which are guaranteed for the life of the
Policy may be insufficient to cover actual costs of issuing and administering
the Policy.
The amount of the daily Mortality and Expense Risk Charge is equal to 0.003403%,
corresponding to an annual charge of 1 .25%, of the assets in each Sub-account
held for this Policy. The Mortality and Expense Risk Charge will be deducted on
a daily basis from the assets in each such Sub-account and will remain constant
for the life of the Policy.
Administrative Expense Charge - The Administrative Expense Charge compensates us
for some of the costs incurred in administering the Policy and the Variable
Account, The amount of the daily Administrative Expense Charge is shown on the
Policy Data page. The Administrative Expense Charge will be deducted on a daily
basis from the assets in each Sub-account of the Variable Account held for this
Policy.
During the life of the Policy, including the annualization period, the daily
Administrative Expense Charge shown on the Policy Data page may be changed by us
upon 30 days advance written notice to the Owner. Any increase in the
Administrative Expense Charge will apply prospectively to Administrative Expense
Charges deducted after the effective date of change. Any increase will not
result in the Administrative Expense Charge exceeding a maximum annual
Administrative Expense Charge of 0.25%.
Transfer Fee - Prior to the Annuity Date, we reserve the right to impose a
Transfer Fee for each transfer in excess of twelve made during a single Policy
Year. If imposed, the amount of the Transfer Fee will be equal to the lesser of.
(a) 2% of the amount of the transfer; or (b) $10. The Transfer Fee will be
deducted from the amount of the transfer prior to its reallocation. If two or
more transfers are made on the same day, the Transfer Fee will be withdrawn pro
rate from the amount of the transfers.
Policy Fee - Prior to the Annuity Date, an annual Policy Fee will be deducted
from the Policy Value on the last business day of each Policy Year, or if
earlier, as of the date the Policy is surrendered. The amount of the annual
Policy Fee is shown on the Policy Data page. The annual Policy Fee will be
deducted from the Policy Value on a pro rate basis,
There will be no Policy Fee deducted for a Policy Year if the Policy Value
exceeds $50,000 on the last business day of that Policy Year, or if earlier, as
of the date the Policy is Surrendered.
The annual Policy Fee shown on the Policy Data page may be changed by us upon 30
days advance written notice to the Owner. Any increase in the Policy Fee will
apply prospectively to Policy Fees deducted after the effective date of change.
Any increase will not result in the Policy Fee exceeding a maximum annual Policy
Fee equal to the lesser of 2% of the Policy Value or $60.
Annuity Fee - After the Annuity Date, an annual Annuity Fee equal to $30 will be
deducted in equal amounts ($2.50 per month) from each annuity payment made under
the Variable Annuity Payment Option.
Limitation on Charges and Fees - In no event will the Administrative Expense
Charge, together with the Transfer Fee and the Policy Fee, exceed the costs
anticipated for administering the Policy and the Variable Account.
Statements of Account - At least once during each Policy Year, we will send the
Owner a Statement of Account reflecting the value of the Policy. Statements of
Account will cease to be provided to the Owner after the Annuity Date. 3-501
VA96 Page 15
<PAGE>
ANNUITY PROVISIONS
Date Annuity Payments Start - Annuity payments will be made on a monthly basis
starting on the first day of the month immediately following the Annuity Date,
if the Annuitant is living and the Policy has not been surrendered for cash.
Unless otherwise changed as provided below, the Annuity Form and Payment Option
under which the annuity will be paid is shown on the Policy Data page.
Once payments start, no changes can be made to either the Annuity Form or
Payment Option, no additional Premiums will be accepted under the Policy, and no
further withdrawals will be allowed.
Change of Annuity Date - The Annuity Date may be changed by the Owner upon 30
days advance written notice to our Service Office. The revised Annuity Date may
not be earlier than the first day of the calendar month coinciding with or next
following the third Policy Anniversary.
Election to Change Annuity Form and Payment Option - At least 60 days before the
Annuity Date, we will send written notification to the Owner confirming the
Annuity Form and Payment Option for the commencement of annuity benefits. The
Owner may change the Annuity Form and/or Payment Option currently in effect to
any other Annuity Form and Payment Option described on Pages 17 through 19.
Notice by the Owner of any changes must be made in a form and manner acceptable
to us, and such notice of change must be received at our Service Office at least
30 days prior to the currently elected Annuity Date.
The selection of the Annuity Form will be subject to any applicable federal or
state law, rules or regulations. The election must include: (a) the newly
elected Annuity Form; and/or (b) the portion of the Annuity Purchase Amount
allocated to each Payment Option, expressed as a percentage. The allocation
percentages must be in increments of 25% and the sum of the allocations must
total 100% (e.g., 75% from the Fixed Annuity Payment Option and 25% from the
Variable Annuity Payment Option).
Minimum Amount of Monthly Annuity - If the amount of the first monthly annuity
payment would result in a monthly annuity of loss than $100, or if the Annuity
Purchase Amount is less than $2,000, we reserve the right to offer a less
frequent mode of payment or make a cash payment to the Owner equal to the Policy
Value. Such cash payment will be in full settlement of our liability under the
Policy.
Monthly annuity payments from the Variable Annuity Payment Option will be
further subject to a minimum monthly annuity amount of $75 from each Sub-account
from which such payments are to be made.
Immediate Annuity Certificates - We will issue to the Owner an immediate annuity
certificate describing the Annuity Form for annuity payments made under the
Fixed Annuity Payment Option and/or an immediate annuity certificate for annuity
payments made under the Variable Annuity Payment Option.
Change of Payee - Except as provided in the following paragraph, upon written
notice to us at our Service Office, the Owner may, at any time during the
annualization period, change the payee of annuity benefits being provided under
the Policy. The effective date of the change in payee will be the later of. (a)
the date we receive the written request for such change; or (b) the date
specified by the Owner,
If the Status shown on the Policy Data page is Qualified, the Owner may not
change the payee of annuity benefits to be provided under the Policy before or
after the Annuity Date.
3-501 VA96
Page 16
<PAGE>
ANNUITY FORMS
Benefits can be provided under any Annuity Form described below, subject to any
applicable federal or state law, rules or regulations.
Life Annuity - Payments start on the first day of the month immediately
following the Annuity Date, if the Annuitant is living. Payments end with the
payment due just before the Annuitant's death. There is no death benefit under
this form.
Life and Contingent Annuity - Payments start on the first day of the month
immediately following the Annuity Date, if the Annuitant is living. Payments
will continue for as long as the Annuitant lives. If the named Contingent
Annuitant is living after the Annuitant dies, payments will continue for as long
as the Contingent Annuitant lives. The continued payments can be in the same
amount as the original payments, or in an amount equal to 50% or 66 2/3%
thereof. Payments will end with the payment due just before the death of the
Contingent Annuitant. If the Contingent Annuitant does not survive the
Annuitant, payments will end with the payment due just before the death of the
Annuitant. Once payments start under this Annuity Form, the person named as
Contingent Annuitant, for the purpose of being the measuring life, may not be
changed.
Life Annuity with Period Certain - Payments start on the first day of the month
immediately following the Annuity Date, if the Annuitant is living. Payments
will be made for the longer of. (a) the Annuitants life; or (b) the period
certain. The period certain may be 120, 180 or 240 months, but in no event may
such period exceed the life expectancy of the Annuitant. If the Annuitant dies
during the period certain, the remaining period certain payments will generally
be made to the Annuitant's Beneficiary.
After the Annuitants death, the Owner may designate a payee to receive any
remaining payments payable if the Annuitant's Beneficiary dies before all of the
payments under the period certain have been made. If the Annuitant's Beneficiary
dies before receiving all of the remaining period certain payments and a
designated payee does not survive the Annuitant's Beneficiary for at least 30
days, then the remaining payments will be paid to the Owner, if living,
otherwise in a single sum to the Owner's estate. If the Annuitant dies after all
payments have been made for the period certain, payments will cease with the
payment due just before the Annuitant's death.
Joint and Survivor Annuity - Payments start on the first day of the month
immediately following the Annuity Date, if the Annuitant and Joint Annuitant are
both living. After either the Annuitant or Joint Annuitant dies, payments will
continue for as long as the survivor lives. The continued payments can be in the
same amount as the original payments, or in an amount equal to 50% or 66 2/3%
thereof. Payments end with the payment due just before the death of the
survivor. Once payments start under this Annuity Form, the person named as Joint
Annuitant, for the purpose of being the measuring life, may not be changed.
Other Forms of Payment - Benefits can be provided under any other Annuity Form
not described in this section, subject to our agreement and any applicable
federal or state law, rules or regulations.
FIXED ANNUITY PAYMENT OPTION
Fixed Annuity Payment Option - A fixed annuity provides for monthly annuity
payments that will remain constant in accordance with the terms of the Annuity
Form selected by the Owner. Such payments will not be affected by the investment
performance of the Sub-accounts of the Variable Account.
The dollar amount of each monthly annuity payable under the Fixed Annuity
Payment Option will be determined by applying the portion of the Annuity
Purchase Amount allocated to the Fixed Annuity Payment Option on the Annuity
Date, as a single premium based on the Annuity Form and the Ages of the
Annuitant and any other measuring life, under the appropriate guaranteed annuity
rate tables contained in the Appendix, or under our then current single premium
immediate annuity rates, if such current rates provide a higher amount of
monthly annuity payments than those provided under the guaranteed annuity rates.
3-501 VA96
Page 17
<PAGE>
VARIABLE ANNUITY PAYMENT OPTION
Variable Annuity Payment Option - A variable annuity provides for monthly
annuity payments that will vary based on the investment performance of the
Sub-account(s) selected by the Owner from which such payments are made.
Therefore, the dollar amount of each monthly annuity payable under the Variable
Annuity Payment Option may increase, decrease or remain the same.
Amount of First Variable Annuity Payment -The dollar amount of the first monthly
variable annuity payment will be determined by applying the portion of the
Annuity Purchase Amount allocated to the Variable Annuity Payment Option on the
Annuity Date, as a single premium based on the Annuity Form and the Ages of the
Annuitant and any other measuring life, under the appropriate annuity rate
tables contained in the Appendix.
The first monthly variable annuity payment will be made on the first day of the
month immediately following the Annuity Date, The second and subsequent monthly
variable annuity payment will be due on the first day of each month thereafter.
The dollar amount of the second and subsequent variable annuity payment will be
determined in accordance with the provision below.
Amount of Subsequent Variable Annuity Payments - The dollar amount of the second
and subsequent monthly variable annuity payment will be determined by means of
Variable Annuity Units. The number of Variable Annuity Units is determined by
dividing the first monthly variable annuity payment by the selected
Sub-account's Annuity Unit Value on the Annuity Date. The number of Variable
Annuity Units will then remain the same for the second and all subsequent
variable annuity payments, unless a transfer of Variable Annuity Units is made,
as described in the Transfers of Variable Annuity Units provision on Page 19.
The dollar amount of the second and subsequent monthly variable( annuity payment
will be determined by multiplying the number of Variable Annuity Units by the
Sub-account(s)' Annuity Unit Value on the tenth day of the month before the
payment due date. The dollar amount of each monthly variable annuity payment
after the first, may increase, decrease or remain the same,
When annuity payments begin, neither expenses actually incurred other than
applicable premium taxes on the investment return, nor mortality actually
experienced, shall adversely affect the dollar amount of variable annuity
payments.
Annuity Unit Value - The value of a Variable Annuity Unit for each Sub-account
for any Valuation Day is equal to (a) times (b) times (c), where:
(a) is the Annuity Unit Value on the immediately preceding Valuation
Day;
(b) is the Net Investment Factor (determined in accordance with the
Net Investment Factor provision on
Page 1 0), for the Valuation Period just ended: and
(e) is the Investment Result Adjustment Factor (.99989255)n, which
recognizes the assumed interest rate of 4% per annum. The "n" in
the Investment Result Adjustment Factor is the number of days
since the preceding Valuation Day.
Transfers of Variable Annuity Units - After the Annuity Date, the Owner may
transfer the value of a designated number of Variable Annuity Units from one
Sub-account to Variable Annuity Units in another Sub-account, the value of which
would be such that the dollar amount of a variable annuity payment made on the
date of transfer would be unaffected by the transfer.
Transfers of Variable Annuity Units will generally be processed as of the date
the request for the transfer, in a form and manner acceptable to us, is received
at our business Office. Transfers of Variable Annuity Units will be limited to
no more than four during any Annuity Year, The minimum amount that may be
transferred from one Sub-account to another Sub-account may not be less than the
number of Variable Annuity Units which would provide a current monthly annuity
payment of $75.
3-501 VA96
Page 18
<PAGE>
The dollar amount of each subsequent monthly variable annuity payment after the
transfer will be determined using the new number of Variable Annuity Units
multiplied by the Sub-account(s)' Annuity Unit Value on the tenth day of the
month before the payment due date.
If the transfer amount reduces the current monthly variable annuity payment
payable from the Sub-account from which such transfer was made to less than $75,
we reserve the right to transfer the entire amount in that Sub-account in
accordance with the transfer instructions provided by the Owner.
3-501 VA96
Page 19
<PAGE>
DEATH BENEFIT PROVISIONS
In General - Notwithstanding any provision of this Policy to the contrary, no
payment of benefits provided under the Policy will be allowed that does not
satisfy the requirements of Code Section 72(s), as amended from time to time,
for policies issued with a non-qualified status.
Death Benefit - The benefit that may be payable by us to the Owners or
Annuitants Beneficiary, as applicable, if the Owner or Annuitant dies before the
Annuity Date. The Death Benefit will be equal to the greater of: (a) the Policy
Value; or (b) the sum of all Premiums paid by the Owner, less the sum of all
withdrawals and any applicable premium taxes. The Death Benefit will be
determined as of the end of the Valuation Period during which the last of the
following items is received by us at our Service Office: (i) proof of death of
the Owner or Annuitant; and (ii) the written notice of the method of settlement
elected by the Beneficiary.
If Annuitant Dies Before Annuity Starts - Upon receipt of proof of death of the
Annuitant while the Owner is living, this Policy is in force and before the
Annuity Date, and subject to any applicable federal or state law, rules or
regulations, we will pay the Death Benefit provided under the Policy to the
Annuitants Beneficiary in a cash payment, unless there is a surviving Contingent
Annuitant.
In lieu of receiving a cash payment, the Annuitant's Beneficiary may receive the
Death Benefit in the form of an annuity from us, under any of the Annuity Forms
and Payment Options offered in this Policy, unless a settlement agreement to the
contrary is in effect.
If a Contingent Annuitant has been named by the Owner, then upon the death of
the Annuitant before the Annuity Date while the Owner is living, the Contingent
Annuitant, if alive, will become the Annuitant, Any Death Benefit normally paid
to the Annuitant's Beneficiary will not be payable if the named Contingent
Annuitant is alive at the time of the Annuitant's death.
If the Owner is a corporation or other non-individual, or if the deceased
Annuitant is the Owner, the death of the Annuitant will be treated as the death
of the Owner and the Policy will be subject to the provisions described below.
If Owner Dies Before Annuity Starts - Notwithstanding any other provision of
this Policy, if the Owner dies before the Annuity Date, the Death Benefit
payable to the Owners Beneficiary will be distributed as follows'
(a) the Death Benefit must be completely distributed within five years
of the Owner's date of death; or
(b) the Owner's Beneficiary may elect, within the one year period after
the Owner's date of death, to receive the Death Benefit in the form
of an annuity from us, provided that; (1) such annuity is
distributed in substantially equal installments over the life of
such Owner's Beneficiary or over a period not extending beyond the
life expectancy of such Owner's Beneficiary; and (2) such
distributions begin not later than one year after the Owners date
of death.
Notwithstanding (a) and (b) above, if the sole Owners Beneficiary is the
deceased owners surviving spouse, then such spouse may elect, within the one
year period after the Owner's date of death, to continue the Policy under the
same terms as before the Owner's death. Upon receipt of such election from the
spouse, in a form and manner acceptable to us, at our Service Office: (1) all
rights of the spouse as Owners Beneficiary under the Policy in effect prior to
such election will cease; (2) the spouse will become the Owner of the Policy and
will also be treated as the Contingent Annuitant, if none has been named and
only if the deceased Owner was the Annuitant; and (3) all rights and privileges
granted by the Policy or allowed by us will belong to the spouse as Owner of the
Policy. This election will be deemed to have been made by the spouse if such
spouse makes a Premium payment to the Policy or fails to make a timely election
as described in this paragraph.
If the owners Beneficiary is a nonspouse, the distribution provisions described
in subparagraphs (a) and (b) above, will apply even if the Annuitant and/or
Contingent Annuitant are alive at the time of the Owners death. If the nonspouse
Owners Beneficiary is not an individual, then only a cash payment will be paid.
3-501 VA96 Page 20
<PAGE>
If no election is received by us from a nonspouse Owners Beneficiary within the
one year period after the Owner's date of death, then we will pay the Death
Benefit to the Owners Beneficiary in a cash payment. The Death Benefit will be
determined as of the date we make the cash payment. Such cash payment will be in
full settlement of all our liability under the Policy.
If Annuitant Dies After Annuity Starts - If the Annuitant dies after the annuity
starts, any benefit payable will be distributed at least as rapidly as under the
Annuity Form and Payment Option then in effect.
If Owner Dies After Annuity Starts - If the Owner dies after the annuity starts,
any benefit payable will continue to be distributed at least as rapidly as under
the Annuity Form and Payment Option then in effect. All of the Owners rights
granted by the Policy or allowed by us will pass to the Owner's Beneficiary.
Joint Ownership - For purposes of this section, if the Policy has Joint Owners
we will consider the date of death of the first Joint Owner as the death of the
Owner and the surviving Joint Owner will become the Owner of the Policy.
Proof of Death - Proof of death must be submitted to us at our Service Office
before any benefits due under the Policy are paid. Appropriate forms will be
made available upon request.
For purposes of this Policy, proof of death means: (a) a copy of a certified
death certificate; (b) a copy of a certified decree of a court of competent
jurisdiction as to a finding of death; (e) a written statement by a medical
doctor who attended the deceased; or (it) any other proof satisfactory to us.
BENEFICIARY PROVISIONS
Designation of Beneficiary - Unless changed as provided below or as otherwise
required by law, the Owner's and Annuitant's Beneficiary will be as designated
by the Owner in a form and manner acceptable to us. Unless otherwise indicated,
if more than one Owner's or Annuitant's Beneficiary is designated, then each
such Beneficiary so designated will share equally in any benefits and/or rights
granted by the Policy to such Beneficiary or allowed by us. If either the
Owner's or annuitants Beneficiary is a partnership, any benefits will be paid to
the partnership as it existed at the time of the Owner's or annuitants death. We
may rely on an affidavit by any responsible person to identify a Beneficiary or
verify the non-existence of a Beneficiary not identified by name.
Change of Beneficiary - The Owner may change the Beneficiaries by giving written
notice to us at our Service Office. We will not be bound by any change of
Beneficiary unless it is made in writing and recorded by us at our Service
Office. A Beneficiary designated irrevocably may not be changed without the
written consent of that Beneficiary, except to the extent required by law.
Death of Beneficiary - The interest of any Beneficiary who dies before the Owner
or Annuitant will terminate at the death of such Beneficiary. The interest of
any Beneficiary who dies at the time of, or within 30 days after, the death of
the Owner or Annuitant will also terminate if no benefits have been paid to such
Beneficiary, unless the Owner has given us written notice of some other
arrangement. The benefits will then be paid as though the Beneficiary had died
before the Owner or Annuitant.
Successive Beneficiaries - If there is no named Owner's Beneficiary alive at the
time of the Owner's death, then the Owners Beneficiary will be the Annuitant, if
living, or the Annuitants Beneficiary if the Annuitant is not living, If there
is no surviving Annuitant or Annuitants Beneficiary, any benefits payable will
be paid to the Owners estate.
3-501 VA96
Page 21
<PAGE>
GENERAL PROVISIONS
Entire Contract - A copy of the application is attached and is a part of this
Policy. This policy and the application make the entire contract.
Misstatement of Age and Sex - If the age or Sex of the Annuitant and/or of any
other measuring life has been misstated, the monthly annuity payments payable
under this Policy will be whatever the Annuity Purchase Amount would provide on
the basis of the correct Age or sex of the Annuitant and/or of any other
measuring life, if any, on the Annuity Date.
Proof of Existence and Age - Before making any payment under this Policy, we may
require proof of the existence and proof of age of the Annuitant and/or any
other payee, or any other information as we may deem necessary in order to
provide benefits under the Policy.
Changes in the Policy - Only two authorized officers of the Company, acting
together, have the authority to bind us or to make any changes in this Policy
and then only in writing. We will not be bound by any promise or representation
made by any other person or persons.
We may change or amend the Policy at any time without the consent of the Owner
if such change or amendment is necessary for the Policy to comply with any
changes in the Code so as to continue treatment of this Policy as an annuity, or
as required by any other applicable federal or state law, rules or regulations.
Incontestability - This policy will be incontestable from the Policy Date.
Assignment of the Policy - Except as permitted by law, no person has the right
to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge any
benefit under the Policy. Any assignment will be subject to the limitations
described in the following paragraph.
No assignment of any benefits to which the Owner is entitled under this Policy
will be binding on the Company, unless made in writing and given to us at our
Business Office. We are not responsible for the adequacy of any assignment.
However, when a written assignment, permitted by law, is filed with us and
recorded by us at our Service Office, the Annuitant, the Contingent Annuitant,
the Owners Beneficiary and/or the Annuitant's Beneficiary, will be subject to
the assignment.
Payments by the Company - All sums payable by us under this Policy are payable
at our Service Office.
Delay of Payment or Transfer - We will generally pay amounts due from the Policy
within seven days of the date the request for such amount, in a form and manner
acceptable to us, is received at our Service Office.
We also reserve the right to delay the payment of any amount withdrawn or
transfer request from the Variable Account due to: (a) the closure of the New
York Stock Exchange for reasons other than usual weekends, holidays or if
trading on such Exchange is restricted; (b) the existence of an emergency as
defined by the Securities and Exchange Commission or the Commission requires
that trading be restricted; or (e) the Securities and Exchange Commission
permits delay for the protection of security holders.
Payments of amounts derived from Premiums paid by check may also be delayed
until the check has cleared the Owner's bank,
Facility of Payment - If a payee is a minor, or if we have reason to believe
that a valid receipt cannot be given for any payment due to the payee, we will
make the payment to the legal guardian or conservator of the payee.
Minimum Benefits - Any annuity, cash surrender or death benefits that may be
available under this Policy are not less than the minimum benefits required by
any statute of the insurance laws of the State of New York.
Protection of Benefits/Proceeds. - To the extent permitted by law, no payment of
benefits or interest will be subject to the claim(s) of any creditor of any
Owner, Annuitant or Beneficiary or to any claim or process of law against any
Owner, Annuitant or Beneficiary.
3-501 VA96
Page 22
<PAGE>
Notices and Directions - We will not be bound by any authorization, direction,
election or notice which is not in a form and manner acceptable to us and
received at our Service Office.
Any written notice requirement by us to the Owner will be satisfied by our
mailing of any such required written notice, by first-class mail, to the Owners
last known address as shown on our records.
Non-Participating - This policy is classified as a non-participating policy.
It does not participate in our
profits or surplus, and therefore no dividends are payable,
Voting Rights - As long as this Policy is in force, the Owner will have all
applicable voting rights under the Portfolios.
<PAGE>
APPENDIX
ANNUITY RATE TABLES
Applicability of Rates - The guaranteed annuity rates contained in Tables I and
II will be used to provide a minimum guaranteed monthly annuity under the Fixed
Annuity Payment Option. The annuity rates contained in Tables III and IV will be
used to determine the first monthly annuity payment under the Variable Annuity
Payment Option.
The rates contained in this Policy are for each $1,000 applied under the
applicable Annuity Form and do not include any applicable premium tax. Any
applicable premium tax will be withdrawn as described in the Premium Taxes
provision of the Policy.
Rates Not Shown - Any rates not shown in the Tables contained in this Policy
will be provided by the Company upon
request,
3-501 VA96
Page 24
<PAGE>
<TABLE>
<CAPTION>
APPENDIX (continued)
TABLES OF GUARANTEED ANNUITY RATES UNDER
FIXED ANNUITY PAYMENT OPTION
TABLE I - MALE RATES
LIFE LIFE ANNUITY WITH PERIOD CERTAIN
Age ANNUITY 120 Months 180 Months 240 Months
<S> <C> <C> <C> <C>
40 3.76 3.76 3.75 3.73
41 3.80 3.79 3.78 3.76
42 3.84 3.83 3.82 3.80
43 3.88 3.87 3.86 3.83
44 3.93 3.92 3.90 3.87
45 3.97 3.96 3.94 3.91
46 4.02 4.01 3.98 3.95
47 4.07 4.06 4.03 3.99
48 4.13 4.11 4.08 4.03
49 4.18 4.16 4.13 4.08
50 4.24 4.21 4.18 4.13
51 4.30 4.27 4.23 4.17
52 4.37 4.33 4.29 4.22
53 4.43 4.40 4.34 4.28
54 4.51 4.46 4.41 4.33
56 4.58 4.53 4.47 4.38
56 4.66 4.60 4.54 4.44
57 4.74 4.68 4.60 4.50
58 4.83 4.76 4.67 4.56
59 4.92 4.84 4.75 4.61
60 5.02 4.93 4.83 4.68
64 5.12 5.02 4.90 4.74
62 5.23 5.12 4.99 4.80
63 5.34 5.22 5.07 4.67
64 5.47 5.33 5.16 4.93
65 5.60 5.45 5.25 5.00
66 5.74 5.67 5.35 5.06
67 5.90 5.69 5.45 5.12
68 6.06 5.83 5.55 6.18
69 6.24 5.97 5.64 5.24
70 6.43 6.11 5.74 5.30
71 6.63 6.26 5.84 5.35
72 6.84 6.42 5.95 5.41
73 7.07 6.58 6.05 5.46
74 7.32 6.74 6.14 5.50
75 7.58 6.91 6.24 5.54
76 7.86 7.08 6.33 5.57
77 8.16 7.26 6.42 5.61
78 8.48 7.43 6.50 5.63
79 8.83 7.61 6.58 5.66
80 9.20 7.79 6.65 5.68
</TABLE>
Basis of Computation - The actuarial basis for the annuity rates contained in
this Table 1, is the 1983a Annuity Mortality Table for males, without
projection, set back 5 years, with an interest rate of 3.5% per annum.
3-501
VA96
Page 25
<PAGE>
<TABLE>
<CAPTION>
APPENDIX (continued)
TABLES OF GUARANTEED ANNUITY RATES UNDER
FIXED ANNUITY PAYMENT OPTION
TABLE 11 - FEMALE RATES
LIFE LIFE ANNUITY WITH PERIOD CERTAIN
Age, ANNUITY 120 Months 180 Months 240 Months
<S> <C> <C> <C> <C>
40 3.55 3.58 3.57 3.56
41 3.61 3.60 3.60 3.59
42 3.64 364 3.63 3.62
43 3.67 3.67 3.66 3.65
44 3.71 3.70 3.69 3.68
45 3.74 3.74 3.73 3.71
46 3.78 3.77 3.76 3.76
47 3.82 3.81 3.80 3.78
48 3.86 3.85 3.84 3.82
49 3.90 3.89 3.88 3.86
50 3.95 3.94 3.92 3.90
51 4.00 3.98 3.97 3.94
62 4.05 4.03 4.01 3.98
53 4.10 4.08 4.06 4.03
54 4.15 4.14 4.11 4.08
65 4.21 4.19 4.17 4.13
56 4.28 4.25 4.22 4.18
57 4.34 4.32 4.28 4.23
58 4.41 4.3B 4.34 4.28
59 4.48 4.45 4.41 4.34
60 4.56 4.52 4.47 4.40
61 4.64 4.60 4.55 4.46
62, 4.73 4.68 4.62 4.52
63 4.82 4.77 4.70 4.59
64 4.92 4.86 4.78 4.66
65 5.03 4.96 4.86 4.72
66 5.14 5.06 4.95 4.79
67 5.26 5.17 5.04 4.86
68 5.39 5.28 5.14 4.93
69 5.52 5.40 5.24 5.01
70 5.67 5.52 5.34 5.07
71 5.82 5.66 5.44 5.14
72 5.99 5.80 5.55 6.21
73 6.17 6.95 5.66 5.27
74 6.36 6.10 5.77 5.34
75 6.57 6.27 5.88 6.40
76 6.80 6.44 6.00 5.45
77 7.04 6.61 6.11 5.50
78 7.34 6.80 6.21 5.54
79 7.60 6.99 6.32 5.58
80 7.91 7.18 6.42 5.62
</TABLE>
Basis of Computation - The actuarial basis for the annuity rates contained in
this Table 11, is the 1983a Annuity Mortality Table for females, without
projection, set back 5 years, with an interest rate of 3.5% per annum.
3-501
VA96
Page 26
<PAGE>
<TABLE>
<CAPTION>
APPENDIX (continued)
TABLES OF ANNUITY RATES UNDER
VARIABLE ANNUITY PAYMENT OPTION
TABLE III - MALE RATES
LIFE LIFE ANNUITY WITH PERIOD CERTAIN
Age ANNUITY 120 Months 180 Months 240 Months
<C> <C> <C> <C> <C>
40 4.08 4.07 4.06 4.04
41 4.12 4.11 4.09 4.07
42 4.16 4.15 4.13 4.11
43 4.20 4.18 4.17 4.14
44 4.24 4.23 4.21 4.18
45 4.29 4.27 4.25 4.21
46 4.33 4.32 4.29 4.25
47 4.38 4.36 4.33 4.29
48 4.44 4.41 4.38 4.33
49 4.49 4.46 4.43 4.38
50 4.55 4.52 4.48 4.42
51 4.61 4.57 4.53 4.47
52 4.67 4.63 4.59 4.52
53 4.74 4.69 4.64 4.57
54 4.81 4.76 4.70 4.62
55 4.88 4.83 4.76 4.67
56 4.96 4.90 4.83 4.73
57 5.04 4.97 4.69 4.78
58 5.13 5.05 4.96 4.84
59 5.22 5.13 5.04 4.90
60 5.31 5.22 5.11 4.96
51 5.42 5.31 5.19 5.02
62, 5.52 5.41 5.27 5.08
63 5.64 5.51 5.36 5.14
64 5.76 5.62 5.44 5.20
65 5.90 5.73 5.53 5.27
66 6.04 5.85 5.62 5.33
67 6.19 5.98 5.72 5.39
68 6.35 6.11 5.82 5.45
69 6.53 6.25 5.91 5.51
70 6.72 6.39 6.01 5.56
71 6.92 6.54 6.11 5.61
72 7.14 6.69 6.21 5.67
73 7.37 6.85 6.31 5.71
74 7.62 7.01 6.40 5.75
75 7.88 7.18 6.49 5.79
76 8.16 7.35 6.58 5.83
77 8.46 7.52 6.67 5.86
78 8.79 7.70 6.75 5.89
79 9.13 7.87 6.83 5.91
80 9.51 8.05 6.90 5.93
</TABLE>
Basis of Computation - The actuarial basis for the annuity rates contained in
this Table III, is the 1983a Annuity Mortality Table for males, without
projection, set back 5 years, with an assumed interest rate of 4% per annum.
3-501
VA96
Page 27
<PAGE>
<TABLE>
<CAPTION>
APPENDIX (continued)
TABLES OF ANNUITY RATES UNDER
VARIABLE ANNUITY PAYMENT OPTION
TABLE IV - FEMALE RATES
LIFE LIFE ANNUITY WITH PERIOD
CERTAIN
Age ANNUITY 120 Months 180 Months 240 Months
<S> <C> <C> <C> <C>
40 3.90 3.90 3.89 3.88
41 3.93 3.92 3.92 3.91
42 3.96 3.95 3.95 3.94
43 3.99 3.98 3.97 3.96
44 4.02 4.01 4.01 3.99
45 4.06 4.05 4.04 4.02
46 4.09 4.08 4.07 4.06
47 4.13 4.12 4.11 4.09
48 4.17 4.16 4.15 4.13
49 4.21 4.20 4.19 4.16
50 4.26 4.24 4.23 4.20
51 4.30 4.29 4.27 4.24
52 4.35 4.34 4.32 4.28
53 4.40 4.39 4.36 4.33
54 4.46 4.44 4.41 4.37
55 4.52 4.49 4.46 4.42
56 4.58 4.55 4.52 4.47
57 4.64 4.61 4.58 4.52
58 4.71 4.68 4.64 4.57
69 4.78 4.75 4.70 4.63
60 4.86 4.82 4.77 4.69
61 4.94 4.89 4.84 4.75
62, 5.03 4.98 4.91 4.81
63 5.12 5.06 4.98 4.87
64 5.22 5.15 5.05 4.94
65 5.32 5.24 5.14 5.00
66 5.43 5.34 5.23 5.07
67 5.55 5.45 5.32 6.14
68 5.68 5.56 5.41 5.21
69 5.81 5.68 5.51 5.27
70 5.96 5.80 5.61 5.34
71 6.11 5.93 5.71 5.41
72 6.28 6.08 5.82 5.48
73 6.46 6.22 5.93 5.54
74 6.65 6.37 6.04 5.60
75 6.66 6.54 6.15 5.66
76 7.09 6.71 6.25 5.71
77 7.33 6.88 6.37 5.76
78 7.60 7.07 6.47 5.80
79 7.89 7.25 6.57 5.84
80 8.20 7.45 6.67 5.88
</TABLE>
Basis of Computation - The actuarial basis for the annuity rates contained in
this Table IV, is the 1983a Annuity Mortality Table for females, without
projection, set back 5 years, with an assumed interest rate of 4% per annum.
3-501 VA06
Page 28
<PAGE>
FLEXIBLE PREMIUM MULTI-FUNDED DEFERRED ANNUITY POLICY
Variable and Fixed Dollar Annuity Options
Separate Account Investments
Non-Participating - No Annual Dividends
TRANSAMERICA Home Office
LIFE COMPANIES One Indendence Center
101 N. Tryon Street
Charlotte, NC 28246
A Stock Company
======================================================================
<PAGE>
GUARANTEED MINIMUM DEATH BENEFIT
RIDER
Transamerica Life insurance and Annuity Company has issued this Endorsement as a
part of the policy to which it is attached in consideration for the Owners
agreement to pay the charge for this benefit. There will be a charge each year
for the extra death coverage under this rider. Transamerica will deduct this
charge through cancellation of accumulation units at each Policy Anniversary. A
pro-rate portions of the annual charge will be deducted from the values upon
surrender on annualization. The current charge for this benefit equals an annual
rate of 30% of the Average Death Benefit Amount. Transamerica guarantees may
change this charge for future Policy years but the charge will never exceed the
annual rate of .30% of the Average Death Benefit Amount. The Average Death
Benefit Amount is the mean of the death benefit amount on the most recent Policy
Anniversary and the death benefit amount or the immediately preceding Policy
Anniversary.
The terms defined in the policy and in any other Endorsement attached to the
policy will have the same meaning when used in this Endorsement.
GUARANTEED MINIMUM DEATH BENEFIT
Guaranteed Minimum Death Benefit - Subject to the provisions of the policy
and in lieu of the Death Benefit amount payable under the terms of the
policy, the Death Benefit will be a Guaranteed Minimum Death Benefit.
If upon death prior to the Annuity Date, the Annuitant or Owner, as
applicable, had not attained his or her 85th birthday, the beneficiary
will receive the Guaranteed Minimum Death Benefit. The Guaranteed Minimum
Death Benefit is equal to the greatest of (a), (b) or (c) below, where
(a), (b) and (e) are as follows
(a) is the Policy Value; or
(b) is 100% of all Premiums paid by the Owner, less the sum of
all withdrawals and any applicable
premium taxes; or
(e) is the Maximum Policy Anniversary Value.
The Maximum Policy Anniversary Value is equal to the greatest Policy
Anniversary Value prior to the earliest of the Annuitant's or owners 75th
birthday, where the Policy Anniversary Value is equal to the Policy Value
on a Policy Anniversary, increased by the sum of all Premiums paid by the
Owner since that Policy Anniversary, less the sum of all withdrawals and
any applicable premium taxes since that Policy Anniversary.
If deceased, the Annuitant or Owner, as applicable, had attained age 85,
then the Death Benefit will equal the Policy Value,
The Guaranteed Minimum Death Benefit will be determined as of the end of
the Valuation Period during which the later of the following items is
received by us at our Service Office: (1) proof of death of the Owner or
Annuitant; and (if) the written notice of the method of settlement elected
by the Beneficiary.
Signed for the Company to be effective as of the Policy Date.
TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY
3-007 14
<PAGE>
EXHIBIT
(6) (a) Articles of Incorporation of Transamerica Life Insurance and
Annuity Company.1/
(b) By-Laws of Transamerica Life Insurance and Annuity
Company.1/
<PAGE>
REVISED
BYLAWS
Bylaws for the regulation, except as
otherwise provided by statute or its
Articles of Incorporation, of
TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY,
a North Carolina corporation
ARTICLE I
ANNUAL SHAREHOLDERS' MEETING
The annual meeting of the shareholders of Transamerica Life Insurance
and Annuity Company (the "Company") shall be held on the first Tuesday in March
of each year, if not a legal holiday, in which case the annual meeting shall be
on the next business day following, at 10:00 a.m., for the purpose of electing
directors and for the transaction of such other business as may be brought
before the meeting.
ARTICLE II
BOARD OF DIRECTORS
The number of directors of the Company shall be not less than nine (9)
nor more than seventeen (17). The exact number of directors shall be fixed,
within the limits specified, by a resolution adopted by the Board of Directors
or by the shareholders.
ARTICLE III
CHIEF EXECUTIVE OFFICER
The Board of Directors shall from time to time designate one of the
officers of the Company to be the Chief Executive Officer.
ARTICLE IV
GENERAL
Except as is expressly set forth herein, this Company shall be
governed by the applicable statutes of the North Carolina Business Corporation
Act, together with any amendments to said Act as enacted from time to time, as
though said statutes had been fully set forth herein.
<PAGE>
ARTICLES OF REDOMESTICATION AND RESTATEMENT
OF
TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY
The undersigned, TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY (the
"Corporation"), hereby submits these Articles of Redomestication and Restatement
for the purposes of changing the domicile of the Corporation from the State of
California to the State of North Carolina, integrating into one document its
original articles of incorporation and all amendments thereto and also for the
purpose of amending its articles of incorporation.
1. The name of the Corporation is TRANSAMERICA LIFE INSURANCE AND
ANNUITY COMPANY. The location of the home office of the Corporation is
NationsBank Corporate Center, 100 N. Tryon Street, Suite 2500, Charlotte,
Mecklenburg County, North Carolina, 28202-4004.
2. Attached hereto as an exhibit are the amended and restated articles
of incorporation which contain amendments to the articles of incorporation
requiring shareholder approval.
3. The amended and restated articles of incorporation of the
Corporation were adopted by its sole shareholder on the 11th day of August,
1994, in the manner prescribed by law.
4. The number of shares of the Corporation outstanding at the time of
such adoption was 15,000; the number of shares entitled to be cast thereon was
15,000; and the number of votes indisputably represented at the meeting of
shareholder was 15,000.
5. The number of votes cast for the amended and restated articles of
incorporation was 15,000. No votes were cast against the amended and restated
articles.
6. These articles are effective on November 7, 1994.
Executed on this the 1st day of November, 1994.
TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY
By:__________________________________
Nooruddin Veerjee, President
<PAGE>
RESTATED ARTICLES OF INCORPORATION
OF
TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY
I
The name of this Corporation is TRANSAMERICA LIFE INSURANCE AND
ANNUITY COMPANY. The location of the home office of the Corporation is
NationsBank Corporate Center, 100 N. Tryon Street, Suite 2500, Charlotte,
Mecklenburg County, North Carolina, 28202-4004.
II
The period of duration of the Corporation shall be perpetual.
III
The address of the registered office of the Corporation is NationsBank
Corporate Center, 100 N. Tryon Street, Suite 2500, Charlotte, Mecklenburg
County, North Carolina, 28202-4004, and the name of the registered agent of the
Corporation at such address is William E. Simms. The Corporation may have one or
more branch offices and places of business either in the State of North Carolina
or in any other state.
IV
The purposes for which this Corporation is organized are:
1. To write and issue as a stock company insurance upon the lives of
human beings and every insurance appertaining thereto, including, but not
limited to, the granting of endowment benefits; additional benefits in the event
of death by accident or accidental means; additional benefits operating to
safeguard the contract from lapse, or to provide a special surrender value, in
the event of total and permanent disability of the insured, including industrial
sick benefit; and the optional modes of settlement of proceeds;
2. To write and issue all agreements to make periodical payments,
whether in fixed or variable dollar amounts, or both, at specified intervals;
3. To writer and issue insurance against death or personal injury by
accident or by any specified kinds of accident and insurance against sickness,
ailment or bodily injury;
4. To write and issue insurance against disability resulting from
sickness, ailment or bodily injury (but not including insurance solely against
accidental injury), under any contract that does not give the insurer the option
to cancel or otherwise terminate the contract at or after one year from its
effective date or renewal date;
5. To engage in such other kind or kinds of business to the extent
necessarily or properly incidental to the kind of insurance business which it is
authorized to do in the State of North Carolina and in any other state of the
United States of America and other lawful act or activity for which a
corporation may be organized under the North Carolina Business Corporation Act.
V
The Corporation is authorized to issue only one class of stock; and
the total number of shares this Corporation is authorized to issue is Fifty
Thousand (50,000) share with a par value of $100.00 per share.
VI
The Corporation shall be authorized to write and issue all such
policies of insurance authorized and described in Article IV of the Articles of
Incorporation when it shall have obtained a certificate authorizing the issuance
of such policies from, and shall have been duly licensed to do business by, the
Commissioner of Insurance of the State of North Carolina.
VII
No holders of stock of the Corporation of any class shall have any
preemptive or other right to subscribe for or purchase any part of any new or
additional issue of stock of any class of or securities convertible into stock
of the Corporation of any class, even though hereafter authorized or whether
issued for money, for consideration other than money or by way of a dividend.
VIII
To the full extent from time to time permitted by law, no person who
is serving or who has served as a director of the Corporation shall be
personally liable in any action for monetary damages for breach of his or her
duty as a director, whether such action is brought by or in the right of the
Corporation or otherwise. Neither the amendment or repeal of this Article, nor
the adoption of any provision of these Articles of Incorporation inconsistent
with this Article, shall eliminate or reduce the protection afforded by this
Article to a director of the Corporation with respect to any matter which
occurred, or any cause of action, suit or claim which but for this Article would
have accrued or arising prior to such amendment, repeal or adoption.
IX
The foregoing Restated Articles of Incorporation were approved by the
sole shareholder of the Corporation on August 11, 1994.
<PAGE>
EXHIBIT (15) Powers of Attorney.
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and
Annuity Company, a North Carolina corporation (the "Company"),
hereby constitutes and appoints Aldo Davanzo, James W. Dederer,
David E. Gooding, Charles E. LeDoyen, and James B. Roszak and
each of them (with full power to each of them to act alone), her
true and lawful attorney-in-fact and agent, with full power of
substitution to each, for her and on her behalf and in her name,
place and stead, to execute and file any of the documents
referred to below relating to registrations under the Securities
Act of 1933 and under the Investment Company Act of 1940 with
respect to any life insurance or annuity policies: registration
statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all
amendments and supplements thereto, with all exhibits and all
instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and her or their
substitutes being empowered to act with or without the others or
other, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every
act and thing requisite and necessary or appropriate with respect
thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of
them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
her hand, this 30th day of July, 1996.
Karen MacDonald
POWER OF ATTORNEY
The undersigned director of Transamerica Occidental Life
Insurance Company, a California corporation (the "Company"),
hereby constitutes and appoints Aldo Davanzo, James W. Dederer,
Charles E. LeDoyen and David E. Gooding and each of them (with
full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution to
each, for his and on his behalf and in his name, place and stead,
to execute and file any of the documents referred to below
relating to registrations under the Securities Act of 1933 and
under the Investment Company Act of 1940 with respect to any
variable life insurance or annuity policies: registration
statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all
amendments and supplements thereto, with all exhibits and all
instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his or their
substitutes being empowered to act with or without the others or
other, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every
act and thing requisite and necessary or appropriate with respect
thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of
them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 30th day of January, 1996.
Robert A. Watson
POWER OF ATTORNEY
The undersigned director of Transamerica Occidental Life
Insurance Company, a California corporation (the "Company"),
hereby constitutes and appoints Aldo Davanzo, James W. Dederer,
Charles E. LeDoyen and David E. Gooding and each of them (with
full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution to
each, for his and on his behalf and in his name, place and stead,
to execute and file any of the documents referred to below
relating to registrations under the Securities Act of 1933 and
under the Investment Company Act of 1940 with respect to any
variable life insurance or annuity policies: registration
statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all
amendments and supplements thereto, with all exhibits and all
instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his or their
substitutes being empowered to act with or without the others or
other, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every
act and thing requisite and necessary or appropriate with respect
thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of
them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 30th day of July, 1996.
Robert Abeles
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and
Annuity Company, a North Carolina corporation (the "Company"),
hereby constitutes and appoints Aldo Davanzo, James W. Dederer,
David E. Gooding and Charles E. LeDoyen and each of them (with
full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution to
each, for his and on his behalf and in his name, place and stead,
to execute and file any of the documents referred to below
relating to registrations under the Securities Act of 1933 and
under the Investment Company Act of 1940 with respect to any life
insurance or annuity policies: registration statements on any
form or forms under the Securities Act of 1933 and under the
Investment Company Act of 1940, and any and all amendments and
supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said
attorneys-in-fact and agents and his or their substitutes being
empowered to act with or without the others or other, and to have
full power and authority to do or cause to be done in the name
and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be
done in and about the premises in order to effectuate the same,
as fully to all intents and purposes as the undersigned might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 30th day of July, 1996.
James B. Roszak
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and
Annuity Company, a North Carolina corporation (the "Company"),
hereby constitutes and appoints Aldo Davanzo, James W. Dederer,
David E. Gooding, Charles E. LeDoyen and James B. Roszak and each
of them (with full power to each of them to act alone), his true
and lawful attorney-in-fact and agent, with full power of
substitution to each, for his and on his behalf and in his name,
place and stead, to execute and file any of the documents
referred to below relating to registrations under the Securities
Act of 1933 and under the Investment Company Act of 1940 with
respect to any life insurance or annuity policies: registration
statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all
amendments and supplements thereto, with all exhibits and all
instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his or their
substitutes being empowered to act with or without the others or
other, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every
act and thing requisite and necessary or appropriate with respect
thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of
them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 30th day of July, 1996.
Thomas J. Cusack
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and
Annuity Company, a North Carolina corporation (the "Company"),
hereby constitutes and appoints Aldo Davanzo, James W. Dederer,
David E. Gooding, Charles E. LeDoyen and James B. Roszak and each
of them (with full power to each of them to act alone), his true
and lawful attorney-in-fact and agent, with full power of
substitution to each, for his and on his behalf and in his name,
place and stead, to execute and file any of the documents
referred to below relating to registrations under the Securities
Act of 1933 and under the Investment Company Act of 1940 with
respect to any life insurance or annuity policies: registration
statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all
amendments and supplements thereto, with all exhibits and all
instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his or their
substitutes being empowered to act with or without the others or
other, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every
act and thing requisite and necessary or appropriate with respect
thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of
them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 30th day of July, 1996.
John A. Fibiger
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and
Annuity Company, a North Carolina corporation (the "Company"),
hereby constitutes and appoints Aldo Davanzo, James W. Dederer,
David E. Gooding, Charles E. LeDoyen and James B. Roszak and each
of them (with full power to each of them to act alone), his true
and lawful attorney-in-fact and agent, with full power of
substitution to each, for his and on his behalf and in his name,
place and stead, to execute and file any of the documents
referred to below relating to registrations under the Securities
Act of 1933 and under the Investment Company Act of 1940 with
respect to any life insurance or annuity policies: registration
statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all
amendments and supplements thereto, with all exhibits and all
instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his or their
substitutes being empowered to act with or without the others or
other, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every
act and thing requisite and necessary or appropriate with respect
thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of
them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 30th day of July, 1996.
Richard H. Finn
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and
Annuity Company, a North Carolina corporation (the "Company"),
hereby constitutes and appoints Aldo Davanzo, James W. Dederer,
David E. Gooding, Charles E. LeDoyen and James B. Roszak and each
of them (with full power to each of them to act alone), his true
and lawful attorney-in-fact and agent, with full power of
substitution to each, for his and on his behalf and in his name,
place and stead, to execute and file any of the documents
referred to below relating to registrations under the Securities
Act of 1933 and under the Investment Company Act of 1940 with
respect to any life insurance or annuity policies: registration
statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all
amendments and supplements thereto, with all exhibits and all
instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his or their
substitutes being empowered to act with or without the others or
other, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every
act and thing requisite and necessary or appropriate with respect
thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of
them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 30th day of July, 1996.
Edgar H. Grubb
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and
Annuity Company, a North Carolina corporation (the "Company"),
hereby constitutes and appoints Aldo Davanzo, James W. Dederer,
David E. Gooding, Charles E. LeDoyen and James B. Roszak and each
of them (with full power to each of them to act alone), his true
and lawful attorney-in-fact and agent, with full power of
substitution to each, for his and on his behalf and in his name,
place and stead, to execute and file any of the documents
referred to below relating to registrations under the Securities
Act of 1933 and under the Investment Company Act of 1940 with
respect to any life insurance or annuity policies: registration
statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all
amendments and supplements thereto, with all exhibits and all
instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his or their
substitutes being empowered to act with or without the others or
other, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every
act and thing requisite and necessary or appropriate with respect
thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of
them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 30th day of July, 1996.
Frank C. Herringer
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and
Annuity Company, a North Carolina corporation (the "Company"),
hereby constitutes and appoints Aldo Davanzo, James W. Dederer,
David E. Gooding, Charles E. LeDoyen and James B. Roszak and each
of them (with full power to each of them to act alone), his true
and lawful attorney-in-fact and agent, with full power of
substitution to each, for his and on his behalf and in his name,
place and stead, to execute and file any of the documents
referred to below relating to registrations under the Securities
Act of 1933 and under the Investment Company Act of 1940 with
respect to any life insurance or annuity policies: registration
statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all
amendments and supplements thereto, with all exhibits and all
instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his or their
substitutes being empowered to act with or without the others or
other, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every
act and thing requisite and necessary or appropriate with respect
thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of
them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 30th day of July, 1996.
Richard N. Latzer
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and
Annuity Company, a North Carolina corporation (the "Company"),
hereby constitutes and appoints Aldo Davanzo, James W. Dederer,
David E. Gooding, Charles E. LeDoyen and James B. Roszak and each
of them (with full power to each of them to act alone), his true
and lawful attorney-in-fact and agent, with full power of
substitution to each, for his and on his behalf and in his name,
place and stead, to execute and file any of the documents
referred to below relating to registrations under the Securities
Act of 1933 and under the Investment Company Act of 1940 with
respect to any life insurance or annuity policies: registration
statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all
amendments and supplements thereto, with all exhibits and all
instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his or their
substitutes being empowered to act with or without the others or
other, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every
act and thing requisite and necessary or appropriate with respect
thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of
them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 30th day of July, 1996.
Gary U. Rolle
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and
Annuity Company, a North Carolina corporation (the "Company"),
hereby constitutes and appoints Aldo Davanzo, James W. Dederer,
David E. Gooding, Charles E. LeDoyen and James B. Roszak and each
of them (with full power to each of them to act alone), his true
and lawful attorney-in-fact and agent, with full power of
substitution to each, for his and on his behalf and in his name,
place and stead, to execute and file any of the documents
referred to below relating to registrations under the Securities
Act of 1933 and under the Investment Company Act of 1940 with
respect to any life insurance or annuity policies: registration
statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all
amendments and supplements thereto, with all exhibits and all
instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his or their
substitutes being empowered to act with or without the others or
other, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every
act and thing requisite and necessary or appropriate with respect
thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of
them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 30th day of July, 1996.
William E. Simms
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and
Annuity Company, a North Carolina corporation (the "Company"),
hereby constitutes and appoints Aldo Davanzo, James W. Dederer,
David E. Gooding, Charles E. LeDoyen and James B. Roszak and each
of them (with full power to each of them to act alone), his true
and lawful attorney-in-fact and agent, with full power of
substitution to each, for his and on his behalf and in his name,
place and stead, to execute and file any of the documents
referred to below relating to registrations under the Securities
Act of 1933 and under the Investment Company Act of 1940 with
respect to any life insurance or annuity policies: registration
statements on any form or forms under the Securities Act of 1933
and under the Investment Company Act of 1940, and any and all
amendments and supplements thereto, with all exhibits and all
instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his or their
substitutes being empowered to act with or without the others or
other, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every
act and thing requisite and necessary or appropriate with respect
thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of
them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 30th day of July, 1996.
Nooruddin Veerjee
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and
Annuity Company, a North Carolina corporation (the "Company"),
hereby constitutes and appoints Aldo Davanzo, David E. Gooding,
Charles E. LeDoyen and James B. Roszak and each of them (with
full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution to
each, for his and on his behalf and in his name, place and stead,
to execute and file any of the documents referred to below
relating to registrations under the Securities Act of 1933 and
under the Investment Company Act of 1940 with respect to any life
insurance or annuity policies: registration statements on any
form or forms under the Securities Act of 1933 and under the
Investment Company Act of 1940, and any and all amendments and
supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said
attorneys-in-fact and agents and his or their substitutes being
empowered to act with or without the others or other, and to have
full power and authority to do or cause to be done in the name
and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be
done in and about the premises in order to effectuate the same,
as fully to all intents and purposes as the undersigned might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 30th day of July, 1996.
James W. Dederer
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and
Annuity Company, a North Carolina corporation (the "Company"),
hereby constitutes and appoints Aldo Davanzo, James W. Dederer,
Charles E. LeDoyen and James B. Roszak and each of them (with
full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution to
each, for his and on his behalf and in his name, place and stead,
to execute and file any of the documents referred to below
relating to registrations under the Securities Act of 1933 and
under the Investment Company Act of 1940 with respect to any life
insurance or annuity policies: registration statements on any
form or forms under the Securities Act of 1933 and under the
Investment Company Act of 1940, and any and all amendments and
supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said
attorneys-in-fact and agents and his or their substitutes being
empowered to act with or without the others or other, and to have
full power and authority to do or cause to be done in the name
and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be
done in and about the premises in order to effectuate the same,
as fully to all intents and purposes as the undersigned might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 30th day of July, 1996.
David E. Gooding
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and
Annuity Company, a North Carolina corporation (the "Company"),
hereby constitutes and appoints Aldo Davanzo, James W. Dederer,
David E. Gooding and James B. Roszak and each of them (with full
power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution to
each, for his and on his behalf and in his name, place and stead,
to execute and file any of the documents referred to below
relating to registrations under the Securities Act of 1933 and
under the Investment Company Act of 1940 with respect to any life
insurance or annuity policies: registration statements on any
form or forms under the Securities Act of 1933 and under the
Investment Company Act of 1940, and any and all amendments and
supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said
attorneys-in-fact and agents and his or their substitutes being
empowered to act with or without the others or other, and to have
full power and authority to do or cause to be done in the name
and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be
done in and about the premises in order to effectuate the same,
as fully to all intents and purposes as the undersigned might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 30th day of July, 1996.
Charles E. LeDoyen
