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As filed with the Securities and Exchange Commission on November 20, 1996
Registration Nos. 333-____,811-07935
___________________________________________________________________________
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/or
Registration Statement under
The Investment Company Act of 1940
Amendment No. __
SEPARATE ACCOUNT NY-B
(Exact Name of Registrant)
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY
OF NEW YORK
(Name of Depositor)
_______________________
_______________________
New York, New York
(Address and Telephone Number of Depositor's Principal Offices)
Marilyn Talman, Esq. COPY TO:
First Golden American Life Insurance Stephen Roth, Esq.
Company of New York Sutherland, Asbill &
1001 Jefferson Street, Suite 400 Brennan, L.L.P.
Wilmington, DE 19801 1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2404
(Name and Address of Agent for Service of Process)
Approximate date of commencement of proposed sale to the public:
As soon as practical after the effective date of the Registration Statement
DECLARATION PURSUANT TO RULE 24f-2
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the
Registrant hereby elects to register an indefinite amount of securities
being offered.
___________________________________________________________________________
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 this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
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CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
PART A
N-4 Item Prospectus Heading
- -------------------------- ----------------------------------
1 Cover Page Cover Page
2. Definitions Definition of Terms
3. Synopsis Summary of the Contracts
4. Condensed Financial Condensed Financial Information
Information
5. General Description of Part I, Facts About the Company
Registrant Depositor and the Account
and Portfolio
Companies
6. Deductions and Expenses Part I, Charges and Fees
7. General Description of Part I, Facts About the Contracts
Variable Annuity
Contracts
8. Annuity Period Part I, Choosing an Income Plan
9. Death Benefit Part I, Facts About the Contracts
10. Purchases and Contract Part I, Facts About the Contracts,
Value Charges and Fees
11. Redemptions Part I, Facts About the Contracts
12. Taxes Part I, Federal Tax Considerations
Additional Considerations
13. Legal Proceedings Part I, Regulatory Information
14. Table of Contents of the Statement of Additional Information
Statement of
Additional Information
PART B
Statement of Additional
N-4 Item Information Heading
- -------------------------- ----------------------------------
15. Cover Page Cover Page
16. Table of Contents Table of Contents
17. General Information and Description of First Golden American
History Life Insurance Company of New York
18. Services Safekeeping of Assets, Independent
Auditors
19. Purchase of Securities Distribution of Contracts
Being Offered
20. Underwriters Distribution of Contracts
21. Calculation of Performance Information
Performance Data
22. Annuity Payments Part A
23. Financial Statements Financial Statements of First Golden
American Life Insurance Company
of New York
PART C
Items required in Part C are located therein.
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PART A
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First Golden American Life Insurance Company of New York
First Golden American Life Insurance Company of New York is a
stock company domiciled in New York, New York.
Deferred Combination Variable and
Fixed Annuity Prospectus
DVA PLUS
___________________________________________________________________________
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First Golden American Life Insurance Company of New York
First Golden American Life Insurance Company of New York is a stock
company domiciled in New York, New York.
Deferred Combination Variable and
Fixed Annuity Prospectus
DVA PLUS
- --------------------------------------------------------------------
This prospectus describes individual deferred variable annuity
Contracts (the "Contract") offered by First Golden American Life
Insurance Company of New York ("First Golden," "we," "our" or
"us"). The Owner ("you" or "your") purchases the Contract with an
Initial Premium and is permitted to make additional premium
payments.
The Contract is funded by two accounts, Separate Account NY-B
("Account NY-B") and the Fixed Account (collectively, the
"Accounts").
Sixteen Divisions of Account NY-B are currently available under the
Contract. The investments available through the Divisions of
Account NY-B include mutual fund portfolios (the "Series") of The
GCG Trust (the "GCG Trust") and the Equi-Select Series Trust (the
"ESS Trust"). The investments available through the Fixed Account
include various Fixed Allocations which we credit with fixed rates
of interest for the Guarantee Periods you select. We currently
offer Guarantee Periods with durations of 1, 3, 5, 7 and 10 years.
We reserve the right at any time to increase or decrease the number
of Guarantee Periods offered. Not all Guarantee Periods may be
available for new allocations.
This prospectus describes the Contract and provides background
information regarding Account NY-B and the Fixed Account. The
prospectuses for the GCG Trust and the ESS Trust (individually, "a
Trust," and collectively, "the Trusts"), which must accompany this
prospectus, provide information regarding investment activities and
policies of the Trusts.
You may allocate your premiums among the seventeen Divisions and
the Fixed Allocations available under the Contract in any way you
choose, subject to certain restrictions. You may change the
allocation of your Accumulation Value during a Contract Year free
of charge. We reserve the right, however, to assess a charge for
each allocation change after the twelfth allocation change in a
Contract Year.
Your Accumulation Value in Account NY-B will vary in accordance
with the investment performance of the Divisions selected by you.
Therefore, you bear the entire investment risk for all amounts
allocated to Account NY-B. You also bear the investment risk with
respect to surrenders, partial withdrawals, transfers and
annuitization from a Fixed Allocation prior to the end of the
applicable Guarantee Period. Such surrender, partial withdrawal,
transfer or annuitization may be subject to a Market Value
Adjustment, which could have the effect of either increasing or
decreasing your Accumulation Value.
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We will pay a death benefit to the Beneficiary if the Owner dies
prior to the Annuity Commencement Date or the Annuitant dies prior
to the Annuity Commencement Date when the Owner is other than an
individual.
This prospectus describes your principal rights and limitations and
sets forth the information concerning the Accounts that investors
should know before investing. A Statement of Additional
Information, dated ___________, 1996, about Account NY-B has been
filed with the Securities and Exchange Commission ("SEC") and is
available without charge upon request. To obtain a copy of this
document call or write our Customer Service Center. The Table of
Contents of the Statement of Additional Information may be found on
the last page of this prospectus. The Statement of Additional
Information is incorporated herein by reference.
___________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
Contracts and underlying Series shares which fund the Contracts are
not insured by the FDIC or any other agency. They are not deposits
or other obligations of any bank and are not bank guaranteed. They
are subject to market fluctuation, reinvestment risk and possible
loss of principal invested.
PLEASE READ THIS PROSPECTUS AND KEEP IT FOR FUTURE REFERENCE. IT
IS NOT VALID UNLESS ACCOMPANIED BY THE CURRENT PROSPECTUSES FOR THE
GCG TRUST AND THE ESS TRUST.
Distributed by:
Directed Services, Inc.
Wilmington, Delaware 19801
Issued by: First Golden American Life Insurance Company of
New York
Home Office: New York, New York
Administered at:
Customer Service Center
Mailing Address: P.O. Box ______
New York, NY _____
1-800-___-____
Prospectus Dated: ___________, 1996
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TABLE OF CONTENTS
Page
DEFINITION OF TERMS 6
SUMMARY OF CONTRACT 10
FEE TABLE 14
CONDENSED FINANCIAL AND OTHER INFORMATION 18
Financial Statements
Performance Related Information
INTRODUCTION 19
First Golden
The GCG Trust and the ESS Trust
Separate Account NY-B
Account NY-B Divisions
Changes Within Account NY-B
The Fixed Account
FACTS ABOUT THE CONTRACT 35
The Owner
The Annuitant
The Beneficiary
Change of Owner or Beneficiary
Availability of the Contract
Types of Contracts
Your Right to Select or Change Contract Options
Premiums
Making Additional Premium Payments
Crediting Premium Payments
Restrictions on Allocation of Premium Payments
Your Right to Reallocate
Dollar Cost Averaging
What Happens if a Division is Not Available
Accumulation Value in Each Division
Measurement of Investment Experience
Cash Surrender Value
Surrendering to Receive the Cash Surrender Value
Partial Withdrawals
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Automatic Rebalancing
Proceeds Payable to the Beneficiary
Death Benefit Options
Reports to Owners
When We Make Payments
CHARGES AND FEES 50
Charge Deduction Division
Charges Deducted from the Accumulation Value
Charges Deducted from the Divisions
Trust Expenses
CHOOSING YOUR ANNUITIZATION OPTIONS 54
Annuitization of Your Contract
Annuity Commencement Date Selection
Frequency Selection
The Annuitization Options
Payment When Named Person Dies
OTHER CONTRACT PROVISIONS 57
In Case of Errors in Application Information
Contract Changes - Applicable Tax Law
Your Right to Cancel or Exchange Your Contract
Other Contract Changes
Group or Sponsored Arrangements
Selling the Contract
REGULATORY INFORMATION 60
Voting Rights
State Regulation
Legal Proceedings
Legal Matters
Experts
MORE INFORMATION ABOUT FIRST GOLDEN AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK 61
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Directors and Executive Officers
FEDERAL TAX CONSIDERATIONS 67
Introduction
Tax Status of First Golden
Taxation of Non-Qualified Annuities
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IRA Contracts and Other Qualified Retirement Plans
Federal Income Tax Withholding
STATEMENT OF ADDITIONAL INFORMATION 80
TABLE OF CONTENTS
Appendix A 83
Market Value Adjustment Examples
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY
JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO
PERSON IS AUTHORIZED TO MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS.
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DEFINITION OF TERMS
Accounts
Separate Account NY-B and the Fixed Account.
Accumulation Value
The total amount invested under the Contract. Initially, this
amount is equal to the premium paid. Thereafter, the
Accumulation Value will reflect the premiums paid, investment
experience of the Divisions and interest credited to your Fixed
Allocations, charges deducted and any partial withdrawals.
Annual Ratchet Enhanced Death Benefit Option
An enhanced death benefit option that may be elected only at
issue and only if the Owner or Annuitant (when the Owner is other
than an individual) is age 79 or younger. The enhanced death
benefit provided by this option is the highest Accumulation Value
on any Contract Anniversary on or prior to the Owner turning age
80, as adjusted for additional premiums and partial withdrawals.
Annuitant
The person designated by the Owner to be the measuring life in
determining Annuity Payments.
Annuity Commencement Date
The date on which Annuity Payments begin.
Annuity Options
Options the Owner selects that determine the form and amount of
Annuity Payments.
Annuity Payment
The periodic payment an Owner receives. It may be either a fixed
or a variable amount based on the Annuity Option chosen.
Attained Age
The Issue Age of the Owner or Annuitant plus the number of full
years elapsed since the Contract Date.
Beneficiary
The person designated to receive benefits in the case of the
death of the Owner or the Annuitant (when the Owner is other than
an individual).
Business Day
Any day the New York Stock Exchange ("NYSE") is open for trading,
exclusive of Federal holidays, or any day on which the SEC
requires that mutual funds, unit investment trusts or other
investment portfolios be valued.
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Cash Surrender Value
The amount the Owner receives upon surrender of the Contract,
including any Market Value Adjustment.
Charge Deduction Division
The Division from which all charges are deducted if so designated
by you. The Charge Deduction Division currently is the Liquid
Asset Division.
Contingent Annuitant
The person designated by the Owner who, upon the Annuitant's
death prior to the Annuity Commencement Date, becomes the
Annuitant.
Contract
The entire Contract consisting of the basic Contract and any
riders or endorsements.
Contract Anniversary
The anniversary of the Contract Date.
Contract Date
The date on which we have received the Initial Premium and upon
which we begin determining the Contract values. It may or may
not be the same as the Issue Date. This date is used to
determine Contract months, processing dates, years and
anniversaries.
Contract Processing Dates
The days when we deduct certain charges from the Accumulation
Value. If the Contract Processing Date is not a Valuation Date,
it will be on the next succeeding Valuation Date. The Contract
Processing Dates will be once each year on the Contract
Anniversary.
Contract Processing Period
The first Contract processing period begins with the Contract
Date and ends at the close of business on the first Contract
Processing Date. All subsequent Contract processing periods
begin at the close of business on the most recent Contract
Processing Date and extend to the close of business on the next
Contract Processing Date. There is one Contract processing
period each year.
Contract Year
The period between Contract anniversaries.
Customer Service Center
Where service is provided to you. The mailing address and
telephone number of the Customer Service Center are shown on the
cover.
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Divisions
The investment options available under Account NY-B.
Endorsements
An endorsement changes or adds provisions to the Contract.
Experience Factor
The factor which reflects the investment experience of the
portfolio in which a Division invests and also reflects the
charges assessed against the Division for a Valuation Period.
Fixed Account
An Account which contains all of our assets that support Owner
Fixed Allocations and any interest credited thereto.
Fixed Allocation
An amount allocated to the Fixed Account that is credited with a
Guaranteed Interest Rate for a specified Guarantee Period.
Free Look Period
The period of time within which the Owner may examine the
Contract and return it for a refund.
Guaranteed Interest Rate
The effective annual interest rate which we will credit for a
specified Guarantee Period. The Guaranteed Interest Rate will
never be less than 3%.
Guarantee Period
The period of time for which a rate of interest is guaranteed to
be credited to a Fixed Allocation. We currently offer Guarantee
Periods with durations of 1, 3, 5, 7 and 10 years.
Index of Investment Experience
The index that measures the performance of a Division.
Initial Premium
The payment required to put a Contract into effect.
Issue Age
The Owner's or Annuitant's age on his or her last birthday on or
before the Contract Date.
Issue Date
The date the Contract is issued at our Customer Service Center.
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Market Value Adjustment
A positive or negative adjustment made to a Fixed Allocation. It
may apply to certain withdrawals and transfers, whether in whole
or in part, and annuitizations of all or part of a Fixed
Allocation prior to the end of a Guarantee Period.
Maturity Date
The date on which a Guarantee Period matures.
Owner
The person who owns the Contract and is entitled to exercise all
rights under the Contract. This person's death also initiates
payment of the death benefit.
Rider
A rider amends the Contract, in certain instances adding
benefits.
Specially Designated Division
The Division to which distributions from a portfolio underlying a
Division in which reinvestment is not available will be allocated
unless you specify otherwise. The Specially Designated Division
currently is the Liquid Asset Division.
Standard Death Benefit Option
The death benefit option that you will receive under the Contract
unless the Annual Ratchet Death Benefit Option is elected. The
death benefit provided by this option is equal to the greatest of
(i) Accumulation Value; (ii) total premium payments less any
partial withdrawals; and (iii) Cash Surrender Value.
Valuation Date
The day at the end of a Valuation Period when each Division is
valued.
Valuation Period
Each business day together with any non-business days before it.
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SUMMARY OF CONTRACT
This prospectus has been designed to provide you with information
regarding the Contract and the Accounts which fund the Contract.
Information concerning the Series underlying the Divisions of
Account NY-B and the Fixed Account is set forth in the Trusts'
prospectuses.
This summary is intended to provide only a very brief overview of
the more significant aspects of the Contract. Further detail is
provided in this prospectus and in the Contract. The Contract,
together with any riders or endorsements, constitutes the entire
agreement between you and us and should be retained as part of
your permanent records.
This prospectus has been designed to provide you with the
necessary information to make a decision on purchasing the
Contract. You have a choice of investments. We do not promise
that your Accumulation Value will increase. Depending on the
investment experience of the Divisions and interest credited to
the Fixed Allocations in which you are invested, your
Accumulation Value, Cash Surrender Value and death benefit may
increase or decrease on any day. You bear the investment risk.
Description of the Contract
The Contract is designed to establish retirement benefits for two
types of purchasers. The first type of purchaser is one who is
eligible to participate in, and purchases a Contract for use
with, an individual retirement annuity ("IRA") meeting the
requirements of section 408(b) of the Internal Revenue Code of
1986 ("qualified plan"). For a Contract funding a qualified
plan, distributions may be made to you to satisfy requirements
imposed by Federal tax law. The second type of purchaser is one
who purchases a Contract outside of a qualified plan
("non-qualified plan").
The Contract also offers a choice of Annuity Options to which you
may apply all or a portion of the Accumulation Value on the
annuity commencement date or the Cash Surrender Value upon
surrender of the Contract. See Choosing Your Annuity Options.
Availability
We can issue a Contract if both the Annuitant and the Owner are
not older than age 85 and accept additional premium payments
until either the Annuitant or Owner reaches the Attained Age of
85 for non-qualified plans (age 70 for qualified plans, except
for rollover contributions). The minimum Initial Premium is
$10,000 for a non-qualified plan and $1,500 for a qualified plan.
We may change the minimum initial or additional premium
requirements for certain group or sponsored arrangements. See
Other Contract Provisions, Group or Sponsored Arrangements.
The minimum additional premium payment we will accept is $500 for
a non-qualified plan and $250 for a qualified plan. You must
receive our prior approval before making a premium payment that
causes the Accumulation Value of all annuities that you maintain
with us to exceed $1,000,000.
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The Divisions
Each of the sixteen Divisions of Account NY-B offered under this
prospectus invests in a mutual fund portfolio with its own
distinct investment objectives and policies. Each Division of
Account NY-B invests in a corresponding Series of the GCG Trust,
managed by Directed Services, Inc. ("DSI"), or a corresponding
Series of the ESS Trust, managed by Equitable Investment
Services, Inc. ("EISI," and together with DSI, the "Managers").
The Trusts and the Managers have retained several portfolio
managers to manage the assets of each Series. See Facts About
the Company and the Accounts, Account NY-B Divisions.
How the Accumulation Value Varies
The Accumulation Value in the Divisions varies each day based on
investment results. You bear the risk of poor investment
performance and you receive the benefits from favorable
investment performance. The Accumulation Value also reflects
premium payments, charges deducted and partial withdrawals. See
Facts About the Contract, Accumulation Value in Each Division.
The Fixed Account
The investments available through the Fixed Account include
various Fixed Allocations which we credit with fixed rates of
interest for the Guarantee Periods you select. We reset the
interest rates for new Guarantee Periods periodically based on
our sole discretion. We may offer Guarantee Periods from one to
ten years. We currently offer Guarantee Periods with durations
of 1, 3, 5, 7 and 10 years.
You bear the investment risk with respect to surrenders, partial
withdrawals, transfers and annuitization from your Fixed
Allocations. A surrender, partial withdrawal, transfer or
annuitization made prior to the end of a Guarantee Period may be
subject to a Market Value Adjustment, which could have the effect
of either increasing or decreasing your Accumulation Value. We
will not apply a Market Value Adjustment on a surrender, partial
withdrawal, transfer or annuitization made within 30 days prior
to the Maturity Date of the applicable Guarantee Period or
certain transfers made in connection with the dollar cost
averaging program. Systematic withdrawals from a Fixed
Allocation also are not subject to a Market Value Adjustment.
Market Value Adjustment
We will apply a Market Value Adjustment, subject to certain
exceptions, to a surrender, partial withdrawal, transfer or
annuitization from a Fixed Allocation made prior to the end of a
Guarantee Period. The Market Value Adjustment does not apply to
amounts invested in Account NY-B.
Surrendering Your Contract
You may surrender the Contract and receive its Cash Surrender
Value at any time while both the Annuitant and Owner are living
and before the Annuity Commencement Date. See Facts About the
Contract, Cash Surrender Value and Surrendering to Receive the
Cash Surrender Value.
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Taking Partial Withdrawals
After the Free Look Period, prior to the annuity commencement
date and while the Contract is in effect, you may take partial
withdrawals from the Accumulation Value of your Contract. You
may elect in advance to take systematic partial withdrawals on a
monthly or quarterly basis. If you have an IRA Contract, you may
elect IRA partial withdrawals on a monthly, quarterly or annual
basis.
Partial withdrawals are subject to certain restrictions as
defined in this prospectus, including a surrender charge and a
Market Value Adjustment. Partial withdrawals above a specified
percentage of your Accumulation Value may be subject to a
surrender charge. See Facts About the Contract, Partial
Withdrawals.
Dollar Cost Averaging
Under this program, you may choose to have a specified dollar
amount transferred from either the Limited Maturity Bond
Division, Liquid Asset Division or a Fixed Allocation with a one
year Guarantee Period to the other Divisions of Account NY-B on a
monthly basis with the objective of shielding your investment
from short-term price fluctuations. See Facts About the
Contract, Dollar Cost Averaging.
Your Right to Cancel the Contract
You may cancel your Contract within the Free Look Period which is
a ten day period of time beginning once you receive the Contract.
For purposes of administering our allocation and certain other
administrative rules, we deem this period to end 15 days after
the Contract is mailed from our Customer Service Center. Some
states may require that we provide a longer free look period. In
some states we restrict the Initial Premium allocation during the
Free Look Period. See Other Contract Provisions, Your Right to
Cancel or Exchange Your Contract.
Your Right to Change the Contract
The Contract may be changed to another annuity plan subject to
our rules at the time of the change. See Other Contract
Provisions, Other Contract Changes.
Death Benefit Options
The Contract provides a death benefit to the beneficiary if the
Owner dies prior to the Annuity Commencement Date. Subject to
our rules, there are two death benefit options that may be
available to you under the Contract: the Standard Death Benefit
Option and the Annual Ratchet Enhanced Death Benefit Option. See
Facts About the Contract, Death Benefit Options. We may offer a
reduced death benefit under certain group and sponsored
arrangements. See Other Contract Provisions, Group or Sponsored
Arrangements.
Deductions for Charges and Fees
We invest the entire amount of the initial and any additional
premium payments in the Divisions and the Fixed Allocations you
select, subject to certain restrictions we impose. See Facts
About the Contract, Restrictions on Allocation of Premium
Payments. We then may deduct an annual
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Contract fee from your Accumulation Value; other charges,
including the mortality and expense risk charge and asset based
administrative charge, are deducted from the Account NY-B
Divisions. See Fee Table, Other Contract Provisions, Charges and
Fees. We may reduce certain charges under group or sponsored
arrangements. See Other Contract Provisions, Group or Sponsored
Arrangements. Unless you have elected the Charge Deduction
Division, charges are deducted proportionately from all Account
NY-B Divisions in which you are invested. If there is no
Accumulation Value in these Divisions, charges will be deducted
from your Fixed Allocations starting with Guarantee Periods
nearest their Maturity Dates until such charges have been deducted.
Federal Income Taxes
The ultimate effect of Federal income taxes on the amounts held
under an annuity Contract, on Annuity Payments and on the
economic benefits to the Owner, Annuitant or Beneficiary depends
on First Golden's tax status and upon the tax status of the
individuals concerned. In general, an Owner is not taxed on
increases in value under an annuity Contract until some form of
distribution is made under it. There may be tax penalties if you
make a withdrawal or surrender the Contract before reaching age
59 1/2. See Federal Tax Considerations.
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FEE TABLE
Transaction Expenses/1
- --------------------
Contingent Deferred Sales Charge/2
(imposed as a percentage of premium payments withdrawn upon
excess partial withdrawal or surrender):/3
Complete Years Elapsed
Since Premium Payment Surrender Charge
0 7%
1 6%
2 5%
3 4%
4 3%
5 2%
6 1%
7+ 0%
Excess Allocation Charge $0/4
Annual Contract Fees:
- --------------------
Administrative Charge $30
(Waived if the Accumulation Value equals or exceeds $100,000
at the end of the Contract Year, or once the sum of premiums
paid equals or exceeds $100,000.)
_____________________
1/ A Market Value Adjustment, which may increase or
decrease your Accumulation Value, may apply to certain
transactions. See Market Value Adjustment.
2/ We also deduct a charge for premium taxes (which can
range from 0% to 3.5% of premium) from your Accumulation
Value upon surrender, excess partial withdrawals or on the
Annuity Commencement Date. See Premium Taxes.
3/ For purposes of calculating the surrender charge for
the excess partial withdrawal, (i) we treat premium payments
as being withdrawn on a first-in first-out basis, and (ii)
amounts withdrawn which are not considered an excess partial
withdrawal are not treated as a withdrawal of any premium
payments. See Charges Deducted from the Accumulation Value,
Surrender Charge for Excess Partial Withdrawals.
4/ We reserve the right to impose a charge in the future
at a maximum of $25 or each allocation change in excess of
twelve per Contract Year. See Excess Allocation Charge.
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Separate Account Annual Expenses (percentage of assets in each Division):/5
- ---------------------------------------------------------------------------
Standard Enhanced Death Benefit
-------- ----------------------
Annual
Ratchet
Mortality and Expense Risk Charge... 1.10% 1.25%
Asset Based Administrative Charge... 0.15% 0.15%
----- -----
Total Separate Account Expenses..... 1.25% 1.40%
The GCG Trust Annual Expenses (based on combined net assets of
the indicated groups of Series):
Other Total
Series Fees/6 Expenses/7 Expenses
------ ------ ---------- --------
Multiple Allocation, Fully Managed,
Capital Appreciation,
Rising Dividends, All-Growth,
Real Estate, Natural
Resources, Value Equity, Strategic
Equity, and Small Cap Series: 1.00% 0.01% 1.01%
Emerging Markets Series: 1.50% 0.03% 1.53%
Managed Global Series:/8 1.25% 0.01% 1.26%
Limited Maturity Bond and
Liquid Asset Series: 0.60% 0.01% 0.61%
_____________________
5/ See Facts About the Contract, Death Benefit Options,
for a description of the Contract's Standard and Annual
Ratchet Death Benefit Options.
6/ Fees decline as combined assets increase (see Account
NY-B Divisions and the Trust prospectuses for details).
7/ Other Expenses generally consist of independent
trustees fees and expenses.
8/ The estimated expenses for the Managed Global Series
are based on the actual experience of its predecessor for
accounting purposes, the Managed Global Account of Separate
Account D.
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The ESS Trust Annual Expenses:
- -----------------------------
Other Total
Series Fees/6/9 Expenses/10 Expenses
------ -------- ----------- --------
OTC and Research Portfolios: 0.80% [0.75%] [1.55%]
Growth & Income Portfolio: 0.95% [0.75%] [1.70%]
Examples:
The examples do not take into account any deduction for
premium taxes. Premium taxes currently range from 0% to 3.5% of
premium payments. There may be surrender charges if you choose
to annuitize within the first three Contract Years.
If at issue you elect the Annual Ratchet Enhanced Death
Benefit Option and you surrender your Contract at the end of the
applicable time period, you would pay the following expenses for
each $1,000 of Initial Premium assuming a 5% annual return on
assets:
________________________________________________________________________________
Division One Year Three Years
- ------------ -------- -----------
Multiple Allocation $ $
Fully Managed $ $
Capital Appreciation $ $
Rising Dividends $ $
All-Growth $ $
Real Estate $ $
Natural Resources $ $
Value Equity $ $
Strategic Equity $ $
Small Cap $ $
Emerging Markets $ $
Managed Global $ $
OTC $ $
Growth and Income $ $
Research $ $
Limited Maturity Bond $ $
Liquid Asset $ $
_____________________
9/ Prior to October 6, 1995, EISI waived its management
fee for the OTC Portfolio.
10/ Other expenses shown take into account the effect of
EISI's agreement to reimburse the portfolios for all
operating expenses, excluding management fees, that exceed
0.75% of its average daily net assets. This reimbursement
agreement commenced October 6, 1995 for the OTC and Research
Portfolios and April 1, 1996 for the Growth & Income
Portfolio. This reimbursement is voluntary and can be
terminated at any time. In the absence of such
reimbursement agreement, Other Expenses would have been
1.72% for the OTC Portfolio and 1.68% for the Research
Portfolio for the year ended December 31, 1995. The Growth
& Income Portfolio commenced operations on April 1, 1996 and
has no prior operating history.
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<PAGE>
If at issue you elect the Annual Ratchet Enhanced Death
Benefit Option and you do not surrender your Contract or if you
annuitize on the Annuity Commencement Date, you would pay the
following expenses for each $1,000 of initial premium assuming a
5% annual return on assets:
________________________________________________________________________________
Division One Year Three Years
- ------------ -------- -----------
Multiple Allocation $ $
Fully Managed $ $
Capital Appreciation $ $
Rising Dividends $ $
All-Growth $ $
Real Estate $ $
Natural Resources $ $
Value Equity $ $
Strategic Equity $ $
Small Cap $ $
Emerging Markets $ $
Managed Global $ $
OTC $ $
Research $ $
Growth and Income $ $
Limited Maturity Bond $ $
Liquid Asset $ $
________________________________________________________________________________
The purpose of the Fee Table is to assist you in
understanding the various costs and expenses that you will bear
directly or indirectly. For purposes of computing the annual per
Contract administrative charge, the dollar amounts shown in the
examples are based on an Initial Premium of $50,000.
The examples reflect the election at issue of the Annual
Ratchet Enhanced Death Benefit Option. If the Standard Death
Benefit Option is elected, the actual expenses incurred will be
less than those represented in the Examples.
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN
THOSE SHOWN, SUBJECT TO THE GUARANTEES UNDER THE CONTRACT.
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<PAGE>
CONDENSED FINANCIAL AND OTHER INFORMATION
No condensed financial information for Account NY-B is
presented because, as of the date of this prospectus, Account NY-
B had not yet commenced operations.
Financial Statements
The audited financial statements of First Golden prepared in
accordance with generally accepted accounting principles for the
period ended ___________, 1996 (as well as the auditors' report
thereon) are contained in the Prospectus.
Performance Related Information
Performance information for the Divisions of Account NY-B,
including the yield and effective yield of the Liquid Asset
Division, the yield of the remaining Divisions, and the total
return of all Divisions may appear in reports and promotional
literature to current or prospective Owners.
Current yield for the Liquid Asset Division will be based on
income received by a hypothetical investment over a given 7-day
period (less expenses accrued during the period), and then
"annualized" (i.e., assuming that the 7-day yield would be
received for 52 weeks, stated in terms of an annual percentage
return on the investment). "Effective yield" for the Liquid
Asset Division is calculated in a manner similar to that used to
calculate yield, but when annualized, the income earned by the
investment is assumed to be reinvested. The "effective yield"
will be slightly higher than the "yield" because of the
compounding effect of earnings.
For the remaining Divisions, quotations of yield will be
based on all investment income per unit (Accumulation Value
divided by the index of investment experience, see Facts About
the Contract, Measurement of Investment Experience, Index of
Investment Experience and Unit Value) earned during a given
30-day period, less expenses accrued during the period ("net
investment income"). Quotations of average annual total return
for any Division will be expressed in terms of the average annual
compounded rate of return on a hypothetical investment in a
Contract over a period of one, five, and ten years (or, if less,
up to the life of the Division), and will reflect the deduction
of the applicable surrender charge, the administrative charge and
the applicable mortality and expense risk charge. See Charges
and Fees. Quotations of total return may simultaneously be shown
for other periods that do not take into account certain
contractual charges, such as the surrender charge.
Performance information for a Division may be compared, in
reports and promotional literature, to: (i) the Standard & Poor's
500 Stock Index ("S&P 500"), Dow Jones Industrial Average
("DJIA"), Donoghue Money Market Institutional Averages, or other
indices measuring performance of a pertinent group of securities
so that investors may compare a Division's results with those of
a group of securities widely regarded by investors as
representative of the securities markets in general; (ii) other
variable annuity separate accounts or other investment products
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tracked by Lipper Analytical Services, a widely used independent
research firm which ranks mutual funds and other investment
companies by overall performance, investment objectives, and
assets, or tracked by other ratings services, including VARDS,
companies, publications, or persons who rank separate accounts or
other investment products on overall performance or other
criteria; and (iii) the Consumer Price Index (measure for
inflation) to assess the real rate of return from an investment
in the Contract. Unmanaged indices may assume the reinvestment
of dividends but generally do not reflect deductions for
administrative and management costs and expenses.
Performance information for any Division reflects only the
performance of a hypothetical Contract under which the
Accumulation Value is allocated to a Division during a particular
time period on which the calculations are based. Performance
information should be considered in light of the investment
objectives and policies, characteristics and quality of the
portfolio of the Series of the respective Trust in which the
Division 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 return for the Divisions, see
the Statement of Additional Information.
Reports and promotional literature may also contain other
information including the ranking of any Division derived from
rankings of variable annuity separate accounts or other
investment products tracked by Lipper Analytical Services or by
rating services, companies, publications, or other persons who
rank separate accounts or other investment products on overall
performance or other criteria.
INTRODUCTION
The following information describes the Contract and the
Accounts which fund the Contract, Account NY-B and the Fixed
Account. Account NY-B invests in mutual fund portfolios of the
Trusts. The Fixed Account contains all of the assets that
support Owner Fixed Allocations which we credit with Guaranteed
Interest Rates for the Guarantee Periods you select.
First Golden
First Golden American Life Insurance Company of New York
("First Golden" or the "Company") is a stock life insurance
company organized under the laws of the State of New York. First
Golden is a wholly owned subsidiary of Golden American Life
Insurance Company. Golden American Life Insurance Company, in
turn, is an indirect wholly owned subsidiary of the Equitable of
Iowa Companies, a holding company for Equitable Life Insurance
Company of Iowa, USG Annuity & Life Company, Locust Street
Securities, Inc. And Equitable Investment Services, Inc.
("EISI"), EIC Variable, Inc., and Directed Services, Inc.
("DSI"). As of September 30, 1996, Equitable of Iowa had over
$[10.x] billion in assets. As of ___________, 1996, First Golden
had approximately __ million in total assets. First Golden is
authorized to do business only in the State of New York. First
Golden offers variable annuities.
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<PAGE>
The GCG Trust and the ESS Trust
The GCG Trust is an open-end management investment company,
more commonly called a mutual fund. The GCG Trust's shares may
also be available to other separate accounts funding variable
insurance products offered by First Golden. This is called
"mixed funding."
The GCG Trust may also sell its shares to separate accounts
of other insurance companies, both affiliated and not affiliated
with First Golden. This is called "shared funding." Although we
do not anticipate any inherent difficulties arising from either
mixed or shared funding, it is theoretically possible that, due
to differences in tax treatment or other considerations, the
interest of Owners of various Contracts participating in the GCG
Trust might at sometime be in conflict. After the GCG Trust
receives the requisite order from the SEC, shares of the GCG
Trust may also be sold to certain qualified pension and
retirement plans. The Board of Trustees of the GCG Trust, the
GCG Trust's Manager, and we and any other insurance companies
participating in the GCG Trust are required to monitor events to
identify any material conflicts that arise from the use of the
GCG Trust for mixed and/or shared funding or between various
policy Owners and pension and retirement plans. For more
information about the risks of mixed and shared funding, please
refer to the GCG Trust prospectus.
The ESS Trust is also an open-end management investment
company. Currently, the ESS Trust's shares are not available to
separate accounts of other insurance companies except affiliated
insurance companies such as First Golden. It is anticipated that
in the future the ESS Trust will become available to separate
accounts of unaffiliated companies.
You will find complete information about both the GCG Trust
and the ESS Trust, including the risks associated with each
Series, in the accompanying Trusts' prospectuses. You should
read them carefully in conjunction with this prospectus before
investing. Additional copies of the Trusts' prospectuses may be
obtained by contacting our Customer Service Center.
Separate Account NY-B
All obligations under the Contract are general obligations
of First Golden. Account NY-B is a separate investment account
used to support our variable annuity Contracts and for other
purposes as permitted by applicable laws and regulations. The
assets of Account NY-B are kept separate from our general account
and any other separate accounts we may have. We may offer other
variable annuity Contracts investing in Account NY-B which are
not discussed in this prospectus. Account NY-B may also invest
in other series which are not available to the Contract described
in this prospectus.
We own all the assets in Account NY-B. Income and realized
and unrealized gains or losses from assets in the account are
credited to or charged against that account without regard to
other income, gains or losses in our other investment accounts.
As required, the assets in Account NY-B are at least equal to the
reserves and other liabilities of that account. These assets may
not be charged with liabilities from any other business we
conduct.
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They may, however, be subject to liabilities arising from
Divisions whose assets are attributable to other variable annuity
Contracts supported by Account NY-B. If the assets exceed the
required reserves and other liabilities, we may transfer the
excess to our general account.
Account NY-B was established on _____________, 1996 to
invest in mutual funds, unit investment trusts or other
investment portfolios which we determine to be suitable for the
Contract's purposes. Account NY-B is treated as a unit
investment trust under Federal securities laws. It is registered
with the SEC under the Investment Company Act of 1940 (the "1940
Act") as an investment company and meets the definition of a
separate account under the Federal securities laws. It is
governed by the laws of the state of New York, our state of
domicile. Registration with the SEC does not involve any
supervision by the SEC of the management or investment policies
or practices of Account NY-B.
Account NY-B Divisions
Account NY-B is divided into Divisions. Currently, each
Division of Account NY-B offered under this prospectus invests in
a portfolio of the GCG Trust or the ESS Trust. DSI serves as the
Manager to each Series of the GCG Trust, and EISI serves as the
Manager to each Series of the ESS Trust. See the Trusts'
prospectuses for details. The Trusts, DSI and EISI have retained
several portfolio managers to manage the assets of each Series as
indicated below. There may be restrictions on the amount of the
allocation to certain Divisions based on state laws and
regulations. The investment objectives of the various Series in
the Trusts are described below. There is no guarantee that any
portfolio or Series will meet its investment objectives. Meeting
objectives depends on various factors, including, in certain
cases, how well the portfolio managers anticipate changing
economic and market conditions. Account NY-B also has other
Divisions investing in other series which are not available to
the Contract described in this prospectus.
DSI and EISI provide the overall business management and
administrative services necessary for the Series' operation and
provide or procure the services and information necessary to the
proper conduct of the business of the Series. See the Trusts'
prospectuses for details.
DSI is responsible for providing or procuring, at DSI's
expense, the services reasonably necessary for the ordinary
operation of the Series of the GCG Trust. DSI does not bear the
expense of brokerage fees and other transactional expenses for
securities or other assets (which are generally considered part
of the cost for assets), taxes (if any) paid by a Series of the
GCG Trust, interest on borrowing, fees and expenses of the
independent trustees, and extraordinary expenses, such as
litigation or indemnification expenses. See the GCG Trust
prospectus for details.
EISI is also responsible for providing or procuring the
services reasonably necessary for the ordinary operation of the
ESS Trust. The expenses associated with providing such services,
however, in the absence of any expense reimbursement by EISI, are
expenses of the ESS Trust. See the ESS Trust prospectus for
details.
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Each Trust pays its respective Manager for its services a
fee, payable monthly, based on the annual rates of the average
daily net assets of the Series shown in the tables below. DSI
and EISI (and not the Trusts) pay each portfolio manager a
monthly fee for managing the assets of the Series.
The GCG Trust
- -------------
<TABLE>
<CAPTION>
Fees (based on combined assets of
Series the indicated groups of Series)
- ------ ---------------------------------
<S> <C>
Multiple Allocation, Fully Managed, Capital 1.00% of first $750 million;
Appreciation, Rising Dividends, All-Growth, 0.95% of next $1.250 billion;
Real Estate, Natural Resources, Value Equity, 0.90% of next $1.5 billion; and
Strategic Equity, and Small Cap Series: 0.85% of amount in excess of
$3.5 billion
Emerging Markets Series: 1.50% of average daily net assets
Managed Global Series: 1.25% of first $500 million;
1.05% of amount in excess
of $500 million
Limited Maturity Bond and 0.60% of first $200 million;
Liquid Asset Series: 0.55% of next $300 million; and
0.50% of amount in excess
of $500 million
</TABLE>
________________________________________________________________________________
The ESS Trust
- -------------
<TABLE>
<CAPTION>
Series Fees
- ------ ----
<S> <C>
OTC and Research Portfolios: 0.80% of first $300 million;
0.55% of amount in excess of
$300 million
Growth & Income Portfolio: 0.95% of first $200 million;
0.75% of amount in excess of
$200 million
</TABLE>
________________________________________________________________________________
The following Divisions invest in designated Series of the GCG
Trust.
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MULTIPLE ALLOCATION DIVISION
Multiple Allocation Series
Objective
The highest total return, consisting of capital appreciation
and current income, consistent with the preservation of
capital and elimination of unnecessary risk.
Investments
Investment in equity and debt securities and the use of
certain sophisticated investment strategies and techniques.
Portfolio Manager
Zweig Advisors Inc.
FULLY MANAGED DIVISION
Fully Managed Series
Objective
High total investment return over the long term, consistent
with the preservation of capital and prudent investment
risk.
Investments
Pursues an active asset allocation strategy whereby
investments are allocated, based upon an evaluation of
economic and market trends and the anticipated relative
total return available, among three asset classes - debt
securities, equity securities and money market instruments.
Portfolio Manager
T. Rowe Price Associates, Inc.
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CAPITAL APPRECIATION DIVISION
Capital Appreciation Series
Objective
Long-term capital growth.
Investments
Invests in common stocks and preferred stock that will be
allocated among various categories of stocks referred to as
"components" which consist of the following: (i) The Growth
Component - Securities that the portfolio manager believes
have the following characteristics: stability and quality of
earnings and positive earnings momentum; dominant
competitive positions; and demonstrate above-average growth
rates as compared to published S&P 500 earnings projections;
and (ii) The Value Component-Securities that the portfolio
manager regards as fundamentally undervalued, i.e.,
securities selling at a discount to asset value and
securities with a relatively low price/earnings ratio. The
securities eligible for this component may include real
estate stocks, such as securities of publicly-owned
companies that, in the portfolio manager's judgement, offer
an optimum combination of current dividend yield, expected
dividend growth, and discount to current real estate value.
Portfolio Manager
Chancellor LGT Asset Management, Inc.
RISING DIVIDENDS DIVISION
Rising Dividends Series
Objective
Capital appreciation, with dividend income as a secondary
objective.
Investments
Investment in equity securities of high quality companies
that meet the following four criteria: consistent dividend
increases; substantial dividend increases; reinvested
profits; and an under-leveraged balance sheet.
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Portfolio Manager
Kayne, Anderson Investment Management, L.P.
ALL-GROWTH DIVIDENDS
All-Growth Series
Objective
Capital appreciation.
Investments
Investment in securities selected for their long- term
growth prospects.
Portfolio Manager
Warburg, Pincus Counsellors, Inc.
REAL ESTATE DIVISION
Real Estate Series
Objective
Capital appreciation, with current income as a secondary
objective.
Investments
Investment in publicly traded equity securities of companies
in the real estate industry listed on national exchanges or
on the National Association of Securities Dealers Automated
Quotation System.
Portfolio Manager
E.I.I. Realty Securities, Inc.
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NATURAL RESOURCES DIVISION
Natural Resources Series
Objective
Long-term capital appreciation.
Investments
Investment in equity and debt securities of companies
engaged in the exploration, development, production, and
distribution of natural resources.
Portfolio Manager
Van Eck Associates Corporation
VALUE EQUITY DIVISION
Value Equity Series
Objective
Capital appreciation with a secondary objective of dividend
income.
Investments
Investment primarily in equity securities of U.S. and
foreign issuers which, when purchased, meet quantitative
standards believed by the Portfolio Manager to indicate
above average financial soundness and high intrinsic value
relative to price.
Portfolio Manager
Eagle Asset Management, Inc.
STRATEGIC EQUITY DIVISION
Strategic Equity Series
Objective
Long-term capital appreciation.
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<PAGE>
Investments
Investment primarily in equity securities based on various
equity market timing techniques. The amount of the Series'
assets allocated to equities shall vary from time to time to
seek positive investment performance from advancing equity
markets and to reduce exposure to equities when risk/reward
characteristics are believed to be less attractive.
Portfolio Manager
Zweig Advisors Inc.
SMALL CAP DIVISION
Small Cap Series
Objective
Long-term capital appreciation.
Investments
Investment primarily in equity securities of companies that,
at the time of purchase, have a total market capitalization
- present market value per share multiplied by the total
number of shares outstanding - within the range of companies
included in the Russell 2000 Growth Index.
Portfolio Manager
Fred Alger Management, Inc.
EMERGING MARKETS DIVISION
Emerging Markets Series
Objective
Long-term growth of capital.
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<PAGE>
Investments
Investment primarily in equity securities of companies that
are considered to be in emerging market countries in the
Pacific Basin and Latin America. Income is not an
objective, and any production of current income is
considered incidental to the objective of growth of capital.
Portfolio Manager
Bankers Trust Company
MANAGED GLOBAL DIVISION
Managed Global Series
Objective
High total investment return, consistent with a prudent
regard for capital preservation.
Investments
Investment in a wide range of equity and debt securities and
money market instruments of both domestic and foreign
issuers.
Portfolio Manager
Warburg, Pincus Counsellors, Inc.
LIMITED MATURITY BOND DIVISION
Limited Maturity Bond Series
Objective
Highest current income consistent with low risk to principal
and liquidity. Also seeks to enhance its total return
through capital appreciation when market factors indicate
that capital appreciation may be available without
significant risk to principal.
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Investments
Investment primarily in a diversified portfolio of limited
maturity debt securities. No individual security will at
the time of purchase have a remaining maturity longer than
seven years and the dollar-weighted average maturity of the
Series will not exceed five years.
Portfolio Manager
Equitable Investment Services, Inc.
LIQUID ASSET DIVISION
Liquid Asset Series
Objective
High level of current income consistent with the
preservation of capital and liquidity.
Investments
Obligations of the U.S. Government and its agencies and
instrumentalities; bank obligations; commercial paper and
short-term corporate debt securities.
Term
All issues maturing in less than one year.
Portfolio Manager
Equitable Investment Services, Inc.
The following Divisions invest in designated Series of the ESS
Trust.
OTC DIVISION
OTC Portfolio
Objective
Long-term growth of capital.
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Investments
Investment primarily in securities of companies that are
traded principally on the over-the-counter (OTC) market.
Portfolio Manager
Massachusetts Financial Services Company
GROWTH & INCOME DIVISION
Growth & Income Portfolio
Objective
Long-term total return.
Investments
Investment primarily in equity and debt securities, focusing
on small- and mid-cap companies that offer potential
appreciation, current income, or both.
Portfolio Manager
Robertson, Stephens & Company Investment Management, L.P.
Changes Within Account NY-B
We may from time to time make additional Divisions
available. These Divisions will invest in investment portfolios
we find suitable for the Contract. We also have the right to
eliminate investment Divisions from Account NY-B, to combine two
or more Divisions, or to substitute a new portfolio for the
portfolio in which a Division invests. A substitution may become
necessary if, in our judgment, a portfolio no longer suits the
purposes of the Contract. This may happen due to a change in
laws or regulations, or a change in a portfolio's investment
objectives or restrictions, or because the portfolio is no longer
available for investment, or for some other reason. In addition,
we reserve the right to transfer assets of Account NY-B, which we
determine to be associated with the class of Contracts to which
your Contract belongs, to another account. If necessary, we will
get prior approval from the insurance department of our state of
domicile before making such a substitution or transfer. We will
also get any required approval from the SEC and any other
required approvals before making such a substitution or transfer.
We will notify you as soon as practicable of any proposed
changes.
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When permitted by law, We reserve the right to:
(1) deregister Account NY-B under the 1940 Act;
(2) operate Account NY-B as a management company under the
1940 Act if it is operating as a unit investment trust;
(3) operate Account NY-B as a unit investment trust under
the 1940 Act if it is operating as a managed separate
account;
(4) restrict or eliminate any voting rights as to Account
B; and
(5) combine Account NY-B with other accounts.
The Fixed Account
Premium payments may be allocated to the Fixed Account at
the time of the Initial Premium payment or as subsequently made.
In addition, all or part of your Accumulation Value may be
transferred to the Fixed Account. Assets supporting amounts
allocated to the Fixed Account are available to fund the claims
of all classes of our customers, Owners and other creditors.
Interests under your Contract relating to the Fixed Account are
registered under the Securities Act of 1933, but the Fixed
Account is not registered under the 1940 Act.
Selecting a Guarantee Period
You may select one or more Fixed Allocations with specified
Guarantee Periods for investment. We currently offer
Guarantee Periods with durations of 1, 3, 5, 7 and 10 years.
We reserve the right at any time to decrease or increase the
number of Guarantee Periods offered. Not all Guarantee
Periods may be available for new allocations. Each Fixed
Allocation will have a Maturity Date corresponding to the
last day of the calendar month of the applicable Guarantee
Period.
Your Accumulation Value in the Fixed Account equals the sum
of your Fixed Allocations plus the interest credited
thereto, as adjusted for any partial withdrawals,
reallocations or other charges we may impose. Your Fixed
Allocation will be credited with the Guaranteed Interest
Rate in effect on the date we receive and accept your
premium or reallocation of Accumulation Value. The
Guaranteed Interest Rate will be credited daily to yield the
quoted Guaranteed Interest Rate.
Guaranteed Interest Rates
Each Guarantee Period will have an interest rate that is
guaranteed. We do not have a specific formula for
establishing the Guaranteed Interest Rates for the different
Guarantee Periods. The determination made will be
influenced by, but not necessarily correspond to, interest
rates available on fixed income investments which we may
acquire with the amounts we receive as premium payments or
reallocations of Accumulation Value under the Contracts.
These amounts will be invested primarily in investment-grade
fixed income securities including: securities issued by the
United States Government or its
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agencies or
instrumentalities, which issues may or may not be guaranteed
by the United States Government; debt securities that have
an investment grade rating, at the time of purchase, within
the four highest grades assigned by Moody's Investor
Services, Inc. (Aaa, Aa, A or Baa), Standard & Poor's
Ratings Group (AAA, AA, A or BBB) or any other nationally
recognized rating service; mortgage-backed securities
collateralized by the Federal Home Loan Mortgage
Association, the Federal National Mortgage Association or
the Government National Mortgage Association, or that have
an investment grade rating at the time of purchase within
the four highest grades described above; other debt
investments; commercial paper; and cash or cash equivalents.
You will have no direct or indirect interest in these
investments. We will also consider other factors in
determining the Guaranteed Interest Rates, including
regulatory and tax requirements, sales commissions and
administrative expenses borne by us, general economic trends
and competitive factors. We cannot predict or guarantee the
level of future interest rates. However, no Fixed
Allocation will ever have a Guaranteed Interest Rate of less
than 3% per year.
While the foregoing generally describes our investment
strategy with respect to the Fixed Account, we are not
obligated to invest according to any particular strategy,
except as may be required by New York and other state
insurance laws.
Transfers From a Fixed Allocation
You may transfer your Accumulation Value from a Fixed
Allocation to one or more new Fixed Allocations with new
Guarantee Periods of any length offered by us or to the
Divisions of Account NY-B. Unless you specify in writing
the Fixed Allocations from which such transfers will be
made, we will transfer amounts from the Fixed Allocations
starting with the Guarantee Period nearest its Maturity
Date, until we have honored your transfer request.
Transfers from a Fixed Allocation made within 30 days prior
to the Maturity Date of the applicable Guarantee Period or
pursuant to the dollar cost averaging program will not be
subject to a Market Value Adjustment. All other transfers
from your Fixed Allocations will be subject to a Market
Value Adjustment. The minimum amount that can be
transferred to or from any Fixed Allocation is $250. If a
transfer request would reduce the Accumulation Value
remaining in your Fixed Allocation to less than $250, we
will treat such transfer request as a request to transfer
the entire Accumulation Value in such Fixed Allocation.
At the end of a Fixed Allocation's Guarantee Period, you may
transfer amounts in that Fixed Allocation to the Divisions
and one or more new Fixed Allocations with Guarantee Periods
of any length then offered by us. You may not, however,
transfer amounts to any Fixed Allocation with a Guarantee
Period that extends beyond your Annuity Commencement Date.
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At least 30 calendar days prior to a Maturity Date of any of
your Fixed Allocations, or earlier if required by state law,
we will send you a notice of the Guarantee Periods then
available. Prior to the Maturity Date of your Fixed
Allocations you must notify us as to which Division or new
Guarantee Period you have selected. If timely instructions
are not received, we will transfer your Accumulation Value
in the maturing Fixed Allocation to a Fixed Allocation with
a Guarantee Period equal in length to the expiring Guarantee
Period. If such Guarantee Period is not available or
extends beyond your annuity commencement date, we will
transfer your Accumulation Value in the maturing Fixed
Allocation to the next shortest Guarantee Period which does
not extend beyond the Annuity Commencement Date. If no such
Guarantee Period is available, we will transfer your
Accumulation Value to the Specially Designated Division.
Partial Withdrawals from a Fixed Allocation
Prior to the Annuity Commencement Date and while your
Contract is in effect, you may take partial withdrawals from
the Accumulation Value in a Fixed Allocation by sending
satisfactory notice to our Customer Service Center. You may
make systematic withdrawals of interest earnings only from a
Fixed Allocation under our Systematic Partial Withdrawal
Option. (See, Partial Withdrawals, Systematic Partial
Withdrawal Option.) Systematic withdrawals from a Fixed
Allocation are not permitted if such Fixed Allocation
participates in the dollar cost averaging program.
Withdrawals from a Fixed Allocation taken within 30 days
prior to the Maturity Date and systematic withdrawals are
not subject to a Market Value Adjustment; however, a
surrender charge may be imposed. Withdrawals may have
federal income tax consequences, including a 10% penalty
tax. See Surrender Charge, Surrender Charge for Excess
Partial Withdrawals and Federal Tax Considerations.
If you specify a Fixed Allocation from which your partial
withdrawal will be made, we will assess the partial
withdrawal against that Fixed Allocation. If you do not
specify the investment option from which the partial
withdrawal will be taken, we will not assess your partial
withdrawal against any Fixed Allocations unless the partial
withdrawal exceeds the Accumulation Value in the Divisions
of Account NY-B. If there is no Accumulation Value in those
Divisions, partial withdrawals will be deducted from your
Fixed Allocations starting with the Guarantee Periods
nearest their Maturity Dates until we have honored your
request.
Market Value Adjustment
We will apply a Market Value Adjustment, determined by
application of the formula described below, in the following
circumstances: (i) whenever you make a withdrawal or
transfer from a Fixed Allocation, other than withdrawals or
transfers made within 30 days prior to the Maturity Date of
the applicable Guarantee Period, systematic partial
withdrawals, or pursuant to the dollar cost averaging
program; and (ii) on the Annuity
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Commencement Date with
respect to any Fixed Allocation having a Guarantee Period
that does not end on or within 30 days after the annuity
commencement date.
The Market Value Adjustment is determined by multiplying the
amount withdrawn, transferred or annuitized by the following
factor:
((1+i)/(1+j+.0025)^(N/365)-1
Where "I" is the Index Rate for a Fixed Allocation as of the
first day of the applicable Guarantee Period; "J" is the
Index Rate for new Fixed Allocations with Guarantee Periods
equal to the number of years remaining in the Guarantee
Period at the time of the withdrawal, transfer or
annuitization; and "N" is the remaining number of days in
the Guarantee Period at the time of the withdrawal, transfer
or annuitization.
The Index Rate is the average of the Ask Yields for U.S.
Treasury Strips as reported by a national quoting service
for the applicable maturity. The average currently is based
on the period from the 22nd day of the calendar month two
months prior to the calendar month of the Index Rate
determination to the 21st day of the calendar month
immediately prior to the month of determination. The
applicable maturity is the maturity date for these U.S.
Treasury Strips on or next following the last day of the
Guarantee Period. If the Ask Yields are no longer
available, the Index Rate will be determined using a
suitable replacement method approved where required.
We currently calculate the Index Rate once each calendar
month. However, we reserve the right to calculate the Index
Rate more frequently than monthly, but in no event will such
Index Rate be based upon a period of less than 28 days.
The Market Value Adjustment may result in either an increase
or decrease in the Accumulation Value of your Fixed
Allocation. If a full surrender, transfer or annuitization
from the Fixed Allocation has been requested, the balance of
the Market Value Adjustment will be added to or subtracted
from the amount surrendered, transferred or annuitized. If
a partial withdrawal, transfer or annuitization has been
requested, the Market Value Adjustment will be calculated on
the total amount that must be withdrawn, transferred or
annuitized in order to provide the amount requested. If a
negative Market Value Adjustment exceeds the Accumulation
Value in the Fixed Allocation, such transaction will be
considered a full surrender, transfer or annuitization. The
Appendix contains several examples which illustrate the
application of the Market Value Adjustment.
Because of the Market Value Adjustment provision of the
Contract, you bear the investment risk that the Guaranteed
Interest Rates offered by us at the time you make a
withdrawal or transfer from a Fixed Allocation or start
receiving annuity payments may be higher or lower than the
Guaranteed Interest Rate of the Fixed Allocation to which the
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Market Value Adjustment is applied, with the result that
the Accumulation Value of your Fixed Allocation may be
substantially reduced or increased. This will depend on the
relationship of (1) the initial Index Rate, applicable at
the time the allocation is made, on the Fixed Allocation
from which the withdrawal, transfer or annuitization is made
to (2) the current Index Rate offered by us for the
Guarantee Period equal to the number of years remaining in
the Guarantee Period as of such date. If the initial Index
Rate of (1) is higher than the then current Index Rate of
(2) plus .0025, application of the Market Value Adjustment
will result in an increase in your Accumulation Value. If
the Index Rate of (1) is lower than the then current Index
Rate of (2) plus .0025, application of the Market Value
Adjustment will result in a decrease in your Accumulation
Value.
FACTS ABOUT THE CONTRACT
The Owner
You are the Owner. You are also the Annuitant unless
another Annuitant is named in the application. You have the
rights and options described in the Contract. One or more
persons may own the Contract. If there are multiple Owners
named, the age of the oldest Owner shall determine the applicable
death benefit.
Death of an Owner activates the death benefit provision. In
the case of a sole Owner who dies prior to the annuity
commencement date, we will pay the Beneficiary the death benefit
when due. The sole Owner's estate will be the Beneficiary if no
Beneficiary designation is in effect, or if the designated
Beneficiary has predeceased the Owner. In the case of a joint
Owner of the Contract dying prior to the annuity commencement
date, we will designate the surviving Owner(s) as the
Beneficiary(ies). This supersedes any previous Beneficiary
designation.
In the case where the Owner is a trust and a beneficial
Owner of the trust has been designated, the beneficial Owner will
be treated as the Owner of the Contract solely for the purpose of
determining the death benefit provisions. If a beneficial Owner
is changed or added after the Contract Date, this will be treated
as a change of Owner for purposes of determining the death
benefit. See Change of Owner or Beneficiary. If no beneficial
Owner of the Trust has been designated, the availability of
enhanced death benefits will be determined by the age of the
Annuitant at issue.
The Annuitant
The Annuitant is the person designated by the Owner to be
the measuring life in determining Annuity Payments. The Owner
will receive the annuity benefits of the Contract if the
Annuitant is living on the Annuity Commencement Date. If the
Annuitant dies before the Annuity Commencement Date, and a
contingent Annuitant has been named, the contingent Annuitant
becomes the Annuitant (unless the Owner is not an individual, in
which case the death benefit becomes payable). Once named, the
Annuitant may not be changed at any time.
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If there is no contingent Annuitant when the Annuitant dies
prior to the Annuity Commencement Date, the Owner will become the
Annuitant. The Owner may designate a new Annuitant within 60
days of the death of the Annuitant.
If there is no contingent Annuitant when the Annuitant dies
prior to the Annuity Commencement Date and the Owner is not an
individual, we will pay the Beneficiary the death benefit then
due. The Beneficiary will be as provided in the Beneficiary
designation then in effect. If no Beneficiary designation is in
effect, or if there is no designated Beneficiary living, the
Owner will be the Beneficiary. If the Annuitant was the sole
Owner and there is no Beneficiary designation, the Annuitant's
estate will be the Beneficiary.
Regardless of whether a death benefit is payable, if the
Annuitant dies and any Owner is not an individual, such death
will trigger application of the distribution rules imposed by
Federal tax law.
The Beneficiary
The Beneficiary is the person to whom we pay death benefit
proceeds and who becomes the successor Owner if the Owner dies
prior to the annuity commencement date. We pay death benefit
proceeds to the primary Beneficiary (unless there are joint
Owners, in which case death proceeds are payable to the surviving
Owner(s)). See Proceeds Payable to the Beneficiary.
If the Beneficiary dies before the Annuitant or Owner, the
death benefit proceeds are paid to the contingent Beneficiary, if
any. If there is no surviving Beneficiary, we pay the death
benefit proceeds to the Owner's estate.
One or more persons may be named as Beneficiary or
contingent Beneficiary. In the case of more than one
Beneficiary, unless otherwise specified, we will assume any death
benefit proceeds are to be paid in equal shares to the surviving
beneficiaries.
You have the right to change beneficiaries during the
Annuitant's lifetime unless you have designated an irrevocable
Beneficiary. When an irrevocable Beneficiary has been
designated, you and the irrevocable Beneficiary may have to act
together to exercise certain rights and options under the
Contract.
Change of Owner or Beneficiary
During the Annuitant's lifetime and while your Contract is
in effect, you may transfer ownership of the Contract (if
purchased in connection with a non-qualified plan) subject to our
published rules at the time of the change. A change in Ownership
may affect the amount of the death benefit and the guaranteed
death benefit. You may also change the Beneficiary. To make
either of these changes, you must send us written notice of the
change in a form satisfactory to us. The change will take effect
as of the day the notice is signed. The change will not affect any
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payment made or action taken by us before recording the
change at our Customer Service Center. See Federal Tax
Considerations, Transfer of Annuity Contracts, and Assignments.
Availability of the Contract
We can issue a Contract if both the Annuitant and the Owner
are not older than age 85.
Types of Contracts
Qualified Contracts
The Contract may be issued as an Individual Retirement
Annuity or in connection with an individual retirement
account. In the latter case, the Contract will be issued
without an Individual Retirement Annuity endorsement, and
the rights of the participant under the Contract will be
affected by the terms and conditions of the particular
individual retirement trust or custodial account, and by
provisions of the Code and the regulations thereunder. For
example, the individual retirement trust or custodial
account will impose minimum distribution rules, which may
require distributions to commence not later than April 1st
of the calendar year following the calendar year in which
you attain age 70 1/2. For both Individual Retirement
Annuities and individual retirement accounts, the minimum
Initial Premium is $1,500.
IF THE CONTRACT IS PURCHASED TO FUND A QUALIFIED PLAN,
DISTRIBUTION MUST COMMENCE NOT LATER THAN APRIL 1ST OF THE
CALENDAR YEAR FOLLOWING THE CALENDAR YEAR IN WHICH YOU ATTAIN AGE
70 1/2. IF YOU OWN MORE THAN ONE QUALIFIED PLAN, YOU SHOULD CONSULT
YOUR TAX ADVISOR.
Non-qualified Contracts
The Contract may fund any non-qualified plan. Non-qualified
Contracts do not qualify for any tax-favored treatment other
than the benefits provided for by annuities.
Your Right to Select or Change Contract Options
Before the Annuity Commencement Date, you may change the
Annuity Commencement Date, frequency of Annuity Payments or the
Annuity Option by sending a written request to our Customer
Service Center. The Annuitant may not be changed at any time.
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Premiums
You purchase the Contract with an Initial Premium. After
the end of the Free Look Period, you may make additional premium
payments. See Making Additional Premium Payments. The minimum
Initial Premium is $10,000 for a non-qualified Contract and
$1,500 for a qualified Contract.
You must receive our prior approval before making a premium
payment that causes the Accumulation Value of all annuities that
you maintain with us to exceed $1,000,000. We may change the
minimum initial or additional premium requirements for certain
group or sponsored arrangements. See Group or Sponsored
Arrangements.
Qualified Plans
For IRA Contracts, the annual premium on behalf of any
individual Contract may not exceed $2,000. Provided your
spouse does not make a contribution to an IRA, you may set
up a spousal IRA even if your spouse has earned some
compensation during the year. The maximum deductible amount
for a spousal IRA program is the lesser of $2,250 or 100% of
your compensation reduced by the contribution (if any) made
by you for the taxable year to your own IRA. However, no
more than $2,000 can go to either your or your spouse's IRA
in any one year. For example, $1,750 may go to your IRA and
$500 to your spouse's IRA. These maximums are not
applicable if the premium is the result of a rollover from
another qualified plan.
Where to Make Payments
Remit premium payments to our Customer Service Center. The
address is shown on the cover. We will send you a
confirmation notice.
Making Additional Premium Payments
You may make additional premium payments after the end of
the Free Look Period. We can accept additional premium payments
until either the Annuitant or Owner reaches the Attained Age of
85 under non-qualified plans. For qualified plans, no
contributions may be made to an IRA Contract for the taxable year
in which you attain age 70 1/2 and thereafter (except for rollover
contributions). The minimum additional premium payment we will
accept is $500 for a non-qualified plan and $250 for a qualified
plan.
Crediting Premium Payments
The Initial Premium will be accepted or rejected within two
business days of receipt by us if accompanied by information
sufficient to permit us to determine if we are able to issue a
Contract. We may retain an Initial Premium for up to five
business days while attempting to obtain information sufficient
to enable us to issue the Contract. If we are unable to do so
within
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five business days, the applicant will be informed of the
reasons for the delay and the Initial Premium will be returned
immediately unless the applicant consents to our retaining the
Initial Premium until we have received the information we
require. Thereafter, all additional premiums will be accepted on
the day received.
We will also accept, by agreement with broker-dealers and
when permissible in a state, transmittal of initial and
additional premium payments by wire order from the broker-dealer
to our Customer Service Center. Such transmittals must be
accompanied by a simultaneous facsimile transmission of an
application. Contact our Customer Service Center to find out
about state availability and broker-dealer requirements.
Upon our acceptance of premium payments received via wire
order and accompanied by a facsimile of an application, we will
issue the Contract, allocate the premium payment according to
your instructions, and invest the payment at the value next
determined following receipt. See Restrictions on Allocation of
Premium Payments. Wire orders not accompanied by an application
may be retained for up to five business days while we attempt to
obtain information sufficient to enable us to issue the Contract.
If we are unable to do so, our Customer Service Center will
inform the broker-dealer, on behalf of the applicant, of the
reasons for the delay and return the premium payment immediately
to the broker-dealer for return to the applicant, unless the
applicant specifically consents to allow us to retain the premium
payment until our Customer Service Center receives the
application.
On the date we receive and accept your initial or additional
premium payment:
(1) We allocate the Initial Premium among the Divisions and
Fixed Allocations according to your instructions,
subject to any restrictions. See Restrictions on
Allocation of Premium Payments. For additional premium
payments, the Accumulation Value will increase by the
amount of the premium. If we do not receive
instructions from you, the increase in the Accumulation
Value will be allocated among the Divisions in
proportion to the amount of Accumulation Value in each
Division as of the date we receive and accept the
additional premium payment. If there is no
Accumulation Value in the Divisions, the increase in
the Accumulation Value will be allocated to a Fixed
Allocation with the shortest Guarantee Period then
available.
(2) For an Initial Premium, we calculate your applicable
death benefit. When an additional premium payment is
made, we increase your applicable death benefit in
accordance with the death benefit option in effect for
your Contract.
Following receipt and acceptance of the application, and
investment of the premium payment, we will issue the Contract.
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Restrictions on Allocation of Premium Payments
We may require that an Initial Premium designated for a
Division of Account NY-B be allocated to the Specially Designated
Division during the Free Look Period for Initial Premiums
received. After the free look period, if your Initial Premium
was allocated to the Specially Designated Division, we will
transfer the Accumulation Value to the Divisions you previously
selected based on the index of investment experience next
computed for each Division. See Facts About the Contract,
Measurement of Investment Experience, Index of Investment
Experience and Unit Value. Initial premiums designated for the
Fixed Account will be allocated to a Fixed Allocation with the
Guarantee Period you have chosen.
Your Right to Reallocate
You may reallocate your Accumulation Value among the
Divisions and Fixed Allocations at the end of the free look
period. We currently do not assess a charge for allocation
changes made during a Contract Year. We reserve the right,
however, to assess a $25 charge for each allocation change after
the twelfth allocation change in a Contract Year. We require
that each reallocation of your Accumulation Value equal at least
$250 or, if less, your entire Accumulation Value within a
Division or Fixed Allocation. We reserve the right to limit,
upon notice, the maximum number of reallocations you may make
within a Contract Year. In addition, we reserve the right to
defer the reallocation privilege at any time we are unable to
purchase or redeem shares of the GCG Trust or the ESS Trust. We
also reserve the right to modify or terminate your right to
reallocate your Accumulation Value at any time in accordance with
applicable law. Reallocations from the Fixed Account are subject
to the Market Value Adjustment unless taken as part of the dollar
cost averaging program or within 30 days prior to the Maturity
Date of the applicable Guarantee Period. To make a reallocation
change, you must provide us with satisfactory notice at our
Customer Service Center.
We reserve the right to limit the number of reallocations of
your Accumulation Value among the Divisions and Fixed Allocations
or refuse any reallocation request if we believe that: (a)
excessive trading by you or a specific reallocation request may
have a detrimental effect on unit values or the share prices of
the underlying Series; or (b) we are informed by the GCG Trust or
the ESS Trust that the purchase or redemption of shares is to be
restricted because of excessive trading or a specific
reallocation or group of reallocations is deemed to have a
detrimental effect on share prices of the GCG Trust or the ESS
Trust.
Where permitted by law, we may accept your authorization of
third party reallocation on your behalf, subject to our rules.
We may suspend or cancel such acceptance at any time. We will
notify you of any such suspension or cancellation. We may
restrict the Divisions and Fixed Allocations that will be
available to you for reallocations of premiums during any period
in which you authorize such third party to act on your behalf.
We will give you prior notification of any such restrictions.
However, we will not enforce such restrictions if we are provided
evidence satisfactory to us that: (a) such third party has been
appointed by a court of competent
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jurisdiction to act on your
behalf; or (b) such third party has been appointed by you to act
on your behalf for all your financial affairs.
Some restrictions may apply based on the free look
provisions of the state where the Contract is issued. See Your
Right to Cancel or Exchange Your Contract.
Dollar Cost Averaging
If you have at least $10,000 of Accumulation Value in the
Limited Maturity Bond Division, the Liquid Asset Division or a
Fixed Allocation with a one year Guarantee Period, you may elect
the dollar cost averaging program and have a specified dollar
amount transferred from those Divisions or such Fixed Allocation
on a monthly basis.
The main objective of dollar cost averaging is to attempt to
shield your investment from short-term price fluctuations. Since
the same dollar amount is transferred to other Divisions each
month, more units are purchased in a Division if the value per
unit is low and less units are purchased if the value per unit is
high.
Therefore, a lower than average value per unit may be
achieved over the long term. This plan of investing allows
investors to take advantage of market fluctuations but does not
assure a profit or protect against a loss in declining markets.
Dollar cost averaging may be elected at issue or at a later
date. The minimum amount that may be transferred each month is
$250. The maximum amount which may be transferred is equal to
your Accumulation Value in the Limited Maturity Bond Division,
the Liquid Asset Division or a Fixed Allocation with a one year
Guarantee Period when you elect the dollar cost averaging
program, divided by 12.
The transfer date will be the same calendar day each month
as the Contract Date. The dollar amount will be allocated to the
Divisions in which you are invested in proportion to your
Accumulation Value in each Division unless you specify otherwise.
If, on any transfer date, your Accumulation Value is equal to or
less than the amount you have elected to have transferred, the
entire amount will be transferred and the program will end. You
may change the transfer amount once each Contract Year, or cancel
this program by sending satisfactory notice to our Customer
Service Center at least seven days before the next transfer date.
Any allocation under this program will not be included in
determining if the excess allocation charge will apply. We
currently do not permit transfers under the dollar cost averaging
program from Fixed Allocations with other than one year Guarantee
Periods. Transfers from a Fixed Allocation under the dollar cost
averaging program will not be subject to a Market Value
Adjustment. See, Market Value Adjustment. A Fixed Allocation
may not participate simultaneously in both the dollar cost
averaging program and the Systematic Partial Withdrawal Option.
What Happens if a Division is Not Available
When a distribution is made from an investment portfolio
supporting a Division of Account NY-B in which reinvestment is
not available, we will allocate the distribution, unless you
specify otherwise, to the Specially Designated Division.
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Such a distribution can occur when (a) an investment
portfolio matures, or (b) a distribution from a portfolio or
Division cannot be reinvested in the portfolio or Division due to
the unavailability of securities for acquisition. When an
investment portfolio matures, we will notify you in writing 30
days in advance of that date. To elect an allocation of the
distribution to other than the Specially Designated Division, you
must provide satisfactory notice to us at least seven days prior
to the date the portfolio matures. Such allocations are not
counted for purposes of the number of free allocation changes
permitted. When a distribution from a portfolio or Division
cannot be reinvested in the portfolio due to the unavailability
of securities for acquisition, we will notify you promptly after
the allocation has occurred. If, within 30 days, you allocate
the Accumulation Value from the Specially Designated Division to
other Divisions or Fixed Allocations of your choice, such
allocations will not be included in determining if the excess
allocation charge will apply.
Your Accumulation Value
Your Accumulation Value is the sum of the amounts in each of
the Divisions and the Fixed Allocations in which you are
invested, and is the amount available for investment at any time.
You select the Divisions and Fixed Allocations to which to
allocate your Accumulation Value. We adjust your Accumulation
Value on each Valuation Date to reflect the Divisions' investment
performance and interest credited to your Fixed Allocations, any
additional premium payments or partial withdrawals since the
previous Valuation Date, and on each Contract processing date to
reflect any deduction of the annual Contract fee. Your
Accumulation Value is applied to your choice of an Annuity Option
on the Annuity Commencement Date subject to our published rules
at such time. See Choosing an Income Plan.
Accumulation Value in Each Division
On the Contract Date
On the Contract Date, your Accumulation Value is allocated
to each Division as you have specified, unless the Contract
is issued in a state that requires the return of premium
payments during the Free Look Period, in which case, the
portion of your Initial Premium not allocated to a Fixed
Allocation will be allocated to the Specially Designated
Division during the Free Look Period. See Your Right to
Cancel or Exchange Your Contract.
On Each Valuation Date
At the end of each subsequent Valuation Period, the amount
of Accumulation Value in each Division will be calculated as
follows:
(1) We take the Accumulation Value in the Division at the
end of the preceding Valuation Period.
(2) We multiply (1) by the Division's net rate of return
for the current Valuation Period.
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(3) We add (1) and (2).
(4) We add to (3) any additional premium payments allocated
to the Division during the current Valuation Period.
(5) We add or subtract allocations to or from that Division
during the current Valuation Period.
(6) We subtract from (5) any partial withdrawals and any
associated charges allocated to that Division during
the current Valuation Period.
(7) We subtract from (6) the amounts allocated to that
Division for:
(a) any Contract fees; and
(b) any charge for premium taxes.
All amounts in (7) are allocated to each Division in the
proportion that (6) bears to the Accumulation Value in
Account NY-B, unless the Charge Deduction Division has been
specified. See Charges Deducted from the Accumulation
Value.
Measurement of Investment Experience
Index of Investment Experience and Unit Value
The investment experience of a Division is determined on
each Valuation Date. We use an index to measure changes in
each Division's experience during a Valuation Period. We
set the index at $10 when the first investments in a
Division are made. The index for a current Valuation Period
equals the index for the preceding Valuation Period
multiplied by the experience factor for the current
Valuation Period.
We may express the value of amounts allocated to the
Divisions in terms of units. We determine the number of
units for a given amount on a Valuation Date by dividing the
dollar value of that amount by the index of investment
experience for that date. The index of investment
experience is equal to the value of a unit.
How We Determine the Experience Factor
For Divisions of Account NY-B the experience factor reflects
the investment experience of the Series of the Trust in
which a Division invests as well as the charges assessed
against the Division for a Valuation Period. The factor is
calculated as follows:
(1) We take the net asset value of the portfolio in which
the Division invests at the end of the current
Valuation Period.
(2) We add to (1) the amount of any dividend or capital
gains distribution declared for the investment
portfolio and reinvested in such portfolio during the
current Valuation Period. We subtract from that amount
a charge for our taxes, if any.
(3) We divide (2) by the net asset value of the portfolio
at the end of the preceding Valuation Period.
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(4) We subtract the applicable daily mortality and expense
risk charge from each Division for each day in the
valuation period.
(5) We subtract the daily asset based administrative charge
from each Division for each day in the valuation
period.
Calculations for Divisions investing in a Series are made on
a per share basis.
Net Rate of Return for a Division
The net rate of return for a Division during a valuation
period is the experience factor for that Valuation Period
minus one.
Cash Surrender Value
Your Contract's Cash Surrender Value fluctuates daily with
the investment results of the Divisions, interest credited to
Fixed Allocations and any Market Value Adjustment. We do not
guarantee any minimum Cash Surrender Value. On any date before
the Annuity Commencement Date while the Contract is in effect,
the cash surrender value is calculated as follows:
(1) We take the Contract's Accumulation Value;
(2) We deduct from (1) any surrender charge and any charge
for premium taxes;
(3) We deduct from (2) any charges incurred but not yet
deducted; and
(4) We adjust (3) for any Market Value Adjustment.
Surrendering to Receive the Cash Surrender Value
The Contract may be surrendered by the Owner at any time
while the Annuitant is living and before the Annuity Commencement
Date.
A surrender will be effective on the date your written
request and the Contract are received at our Customer Service
Center. The Cash Surrender Value is determined and all benefits
under the Contract will then be terminated, as of that date. You
may receive the Cash Surrender Value in a single sum payment or
apply it under one or more Annuity Options. See The Annuity
Options. We will usually pay the Cash Surrender Value within
seven days but we may delay payment. See When We Make Payments.
Partial Withdrawals
Prior to the Annuity Commencement Date, while the Annuitant
is living and the Contract is in effect, you may take partial
withdrawals from the Accumulation Value by sending satisfactory
notice to our Customer Service Center. Unless you specify
otherwise, the amount of the withdrawal, including any surrender
charge and Market Value Adjustment, will be taken in proportion
to the amount of Accumulation Value in each Division in which you
are invested. If there is no Accumulation Value in those
Divisions, partial withdrawals will be deducted from
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your Fixed
Allocations starting with the Guarantee Periods nearest their
Maturity Dates until we have honored your request.
There are three options available for selecting partial
withdrawals, the Conventional Partial Withdrawal Option, the
Systematic Partial Withdrawal Option and the IRA Partial
Withdrawal Option. All three options are described below. The
maximum amount you may withdraw each Contract Year without
incurring a surrender charge is 15% of your Accumulation Value.
See Surrender Charge for Excess Partial Withdrawals. Partial
withdrawals may not be repaid. A partial withdrawal request for
an amount in excess of 90% of the Cash Surrender Value will be
treated as a request to surrender the Contract.
Conventional Partial Withdrawal Option
After the Free Look Period, you may take conventional
partial withdrawals. The minimum amount you may withdraw
under this option is $1,000. A conventional partial
withdrawal from a Fixed Allocation may be subject to a
Market Value Adjustment.
Systematic Partial Withdrawal Option
This option may be elected at the time you apply for a
Contract, or at a later date. This option may be elected to
commence in a Contract Year where a conventional partial
withdrawal has been taken. However, it may not be elected
while the IRA Partial Withdrawal Option is in effect.
You may choose to receive systematic partial withdrawals on
a monthly or quarterly basis from your Accumulation Value in
the Divisions or the Fixed Allocations. The commencement of
payments under this option may not be elected to start
sooner than 28 days after the Contract Issue Date. You
select the date of the quarter or month when the withdrawals
will be made but no later than the 28th day of the month.
If no date is selected, the withdrawals will be made on the
same calendar day of each month as the Contract Date.
You may select a dollar amount or a percentage of the
Accumulation Value from the Divisions in which you are
invested as the amount of your withdrawal subject to the
following maximums, but in no event can a payment be less
than $100:
Frequency Maximum Percentage
----------------------------
Monthly 1.25%
Quarterly 3.75%
If a dollar amount is selected and the amount to be
systematically withdrawn would exceed the applicable maximum
percentage of your Accumulation Value on the withdrawal
date, the amount withdrawn will be reduced so that it equals
such percentage.
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For example, if a $500 monthly withdrawal
was elected and on the withdrawal date 1.25% of the
Accumulation Value equaled $300, the withdrawal amount would
be reduced to $300. If a percentage is selected and the
amount to be systematically withdrawn based on that
percentage would be less than the minimum of $100, we would
increase the amount to $100 provided it does not exceed the
maximum percentage. If it is below the maximum percentage
we will send the minimum. If it is above the maximum
percentage we will send the amount and then cancel the
option. For example, if you selected 1.0% to be
systematically withdrawn on a monthly basis and that amount
equaled $90, and since $100 is less than 1.25% of the
Accumulation Value, we would send $100. If 1.0% equaled
$75, and since $100 is more than 1.25% of the Accumulation
Value we would send $75 and then cancel the option. In such
a case, in order to receive systematic partial withdrawals
in the future, you would be required to submit a new notice
to our Customer Service Center.
Systematic Partial Withdrawals from Fixed Allocations are
limited to interest earnings during the prior month or
quarter, depending on whether you have chosen a monthly or
quarterly frequency, respectively. Systematic Partial
Withdrawals are not subject to a Market Value Adjustment. A
Fixed Allocation, however, may not participate
simultaneously in both the dollar cost averaging program and
the Systematic Partial Withdrawal Option.
You may change the amount or percentage of your withdrawal
once each Contract Year or cancel this option at any time by
sending satisfactory notice to our Customer Service Center
at least seven days prior to the next scheduled withdrawal
date. However, you may not change the amount or percentage
of your withdrawals in any Contract Year during which you
have previously taken a conventional partial withdrawal.
IRA Partial Withdrawal Option
If you have an IRA Contract and will attain age 70 1/2 in the
current calendar year, distributions may be made to you to
satisfy requirements imposed by Federal tax law. IRA
partial withdrawals provide payout of amounts required to be
distributed by the Internal Revenue Service rules governing
mandatory distributions under qualified plans. See Federal
Tax Considerations. We will send you a notice before your
distributions commence, and you may elect this option at
that time, or at a later date. You may not elect IRA
partial withdrawals while the Systematic Partial Withdrawal
Option is in effect. If you do not elect the IRA Partial
Withdrawal Option, and distributions are required by Federal
tax law, distributions adequate to satisfy the requirements
imposed by Federal tax law may be made. Thus, if the
Systematic Partial Withdrawal Option is in effect,
distributions under that option must be adequate to satisfy
the mandatory distribution rules imposed by Federal tax law.
You may choose to receive IRA partial withdrawals on a
monthly, quarterly or annual frequency. You select the day
of the month when the withdrawals will be made, but it
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cannot be later than the 28th day of the month. If no date
is selected, the withdrawals will be made on the same
calendar day of the month as the Contract Date.
At your request, we will determine the amount that is
required to be withdrawn from your Contract each year based
on the information you give us and various choices you make.
For information regarding the calculation and choices you
have to make, see the Statement of Additional Information.
The minimum dollar amount you can withdraw is $100. At the
time we determine the required partial withdrawal amount for
a taxable year based on the frequency you select, if that
amount is less than $100, we will pay $100. At any time
where the partial withdrawal amount is greater than the
Accumulation Value, we will cancel the Contract and send you
the amount of the Cash Surrender Value.
You may change the payment frequency of your withdrawals
once each Contract Year or cancel this option at any time by
sending us satisfactory notice to our Customer Service
Center at least seven days prior to the next scheduled
withdrawal date.
An IRA partial withdrawal in excess of the amount allowed
under the Systematic Partial Withdrawal Option may be
subject to a Market Value Adjustment.
Partial Withdrawals in General
CONSULT YOUR TAX ADVISOR REGARDING THE TAX CONSEQUENCES
ASSOCIATED WITH TAKING PARTIAL WITHDRAWALS. A partial
withdrawal made before the taxpayer reaches age 59 1/2 may
result in imposition of a tax penalty of 10% of the taxable
portion withdrawn. See Federal Tax Considerations for more
details.
Automatic Rebalancing
If you have at least $10,000 of Accumulation Value invested
in the Divisions, you may elect to participate in our automatic
rebalancing program. Automatic rebalancing provides you with an
easy way to maintain the particular asset allocation that you and
your financial advisor have determined are most suitable for your
individual long-term investment goals. We do not charge a fee
for participating in our automatic rebalancing program.
Under the program you may elect to have all your allocations
among the Divisions rebalanced on a quarterly, semi-annual, or
annual calendar basis. The minimum size of an allocation to a
Division must be in full percentage points. Rebalancing does not
affect any amounts that you have allocated to the Fixed Account.
The program may be used in conjunction with the systematic
partial withdrawal option only where such withdrawals are taken
pro rata. Automatic rebalancing is not available if you
participate in dollar cost averaging. Automatic rebalancing will
not take place during the free look period.
To participate in automatic rebalancing you must submit to
our Customer Service Center written notice in a form satisfactory
to us. We will begin the program on the last Valuation Date
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of the applicable calendar period in which we receive the notice.
You may cancel the program at any time. The program will
automatically terminate if you choose to reallocate your
Accumulation Value among the Divisions or if you make an
additional premium payment or partial withdrawal on other than a
pro rata basis. Additional premium payments and partial
withdrawals effected on a pro rata basis will not cause the
automatic rebalancing program to terminate.
Proceeds Payable to the Beneficiary
If the Owner or the Annuitant (when the Owner is other than
an individual) dies prior to the annuity commencement date, we
will pay the Beneficiary the death benefit proceeds under the
Contract. Such amount may be received in a single sum or applied
to any of the Annuity Options. See The Annuity Options. If we
do not receive a request to apply the death benefit proceeds to
an Annuity Option, a single sum distribution will be made. Any
distributions from non-qualified Contracts must comply with
applicable Federal tax law distribution requirements.
Death Benefit Options
Subject to our rules, there are two death benefit options
that may be elected by you at issue under the Contract: the
Standard Death Benefit Option and the Annual Ratchet Enhanced
Death Benefit Option.
The Annual Ratchet Enhanced Death Benefit Option may only be
elected at issue and only if the Owner or Annuitant (when the
Owner is other than an individual) is age 79 or younger at issue.
We may offer a reduced death benefit under certain group and
sponsored arrangements. See Other Contract Provisions, Group or
Sponsored Arrangements.
Standard Death Benefit Option
You will automatically receive the Standard Death Benefit
Option unless you elect the Annual Ratchet Enhanced Death
Benefit. The Standard Death Benefit Option for the Contract
is equal to the greatest of: (i) your Accumulation Value;
(ii) total premiums less any partial withdrawals; and (iii)
the Cash Surrender Value.
Annual Ratchet Enhanced Death Benefit Option
The Annual Ratchet Enhanced Death Benefit under the
Contract, if elected, is equal to the greatest of: (i) the
Accumulation Value; (ii) total premium payments less any
partial withdrawals; (iii) the Cash Surrender Value; or (iv)
the following valuation:
(1) We take the enhanced death benefit from the prior
Valuation Date. On the Contract Date, the enhanced
death benefit is equal to the Initial Premium.
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(2) We add to (1) any additional premiums paid since the
prior Valuation Date and subtract from (1) any partial
withdrawals (including any Market Value Adjustments and
surrender charges incurred) taken since the prior
Valuation Date.
(3) On a Valuation Date that occurs on or prior to the
Owner's Attained Age 80 which is also a Contract
Anniversary, we set the enhanced death benefit equal to
the greater of (2) or the Accumulation Value as of such
date.
On all other Valuation Dates, the enhanced death benefit is
equal to (2).
How to Claim Payments to Beneficiary
We must receive due proof of the death of the Owner or the
Annuitant (if the Owner is other than an individual) (such
as an official death certificate) at our Customer Service
Center before we will make any payments to the Beneficiary.
We will calculate the death benefit as of the date we
receive due proof of death. The Beneficiary should contact
our Customer Service Center for instructions.
Reports to Owners
We will send you a report once each calendar quarter within
31 days after the end of each calendar quarter. The report will
show the Accumulation Value, the Cash Surrender Value, and the
death benefit as of the end of the calendar quarter. The report
will also show the allocation of your Accumulation Value as of
such date and the amounts deducted from or added to the
Accumulation Value since the last report. The report will also
include any other information that may be currently required by
the insurance supervisory official of the jurisdiction in which
the Contract is delivered.
We will also send you copies of any shareholder reports of
the portfolios or securities in which Account NY-B invests, as
well as any other reports, notices or documents required by law
to be furnished to Owners.
When We Make Payments
We will generally pay death benefit proceeds and the cash
surrender value within seven days after our Customer Service
Center receives all the information needed to process the
payment.
However, we may delay payment of amounts derived from the
Divisions if it is not practical for us to value or dispose of
shares of Account NY-B because:
(1) The NYSE is closed for trading;
(2) The SEC determines that a state of emergency exists;
(3) An order or pronouncement of the SEC permits a delay
for the protection of Owners; or,
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(4) The check used to pay the premium has not cleared
through the banking system. This may take up to 15
days.
During such times, as to amounts allocated to the Divisions,
we may delay:
(1) Determination and payment of any Cash Surrender Value;
(2) Determination and payment of any death benefit if death
occurs before the Annuity Commencement Date;
(3) Allocation changes of the Accumulation Value; or,
(4) Application under an Annuity Option of the Accumulation
Value.
We reserve the right to delay payment of amounts from the
Fixed Account for up to six months.
CHARGES AND FEES
Charge Deduction Division
You may specify at issue if you wish to have all charges
against the Accumulation Value deducted from the Liquid Asset
Division. We call this the Charge Deduction Division Option, and
within this context refer to the Liquid Asset Division as the
Charge Deduction Division. If you do not elect this option, or
if the amount of the charges is greater than the amount in the
Division, the charges will be deducted as discussed below. You
may also choose to elect or cancel this option while the Contract
is in force by sending satisfactory notice to our Customer
Service Center.
Charges Deducted from the Accumulation Value
We invest the entire amount of the initial and any
additional premium payments in the Divisions and the Fixed
Allocations you select, subject to certain restrictions. See
Restrictions on Allocation of Premium Payments. We then may
deduct certain amounts from your Accumulation Value. We may
reduce certain fees and charges, including any surrender,
administration, and mortality and expense risk charges, under
group or sponsored arrangements. See Group or Sponsored
Arrangements. Unless you have elected the Charge Deduction
Division, charges are deducted proportionately from all affected
Divisions in which you are invested. If there is no Accumulation
Value in those Divisions, we will deduct charges from your Fixed
Allocations starting with the Guarantee Periods nearest their
Maturity Dates until such charges have been paid. The charges we
deduct are:
Surrender Charge
A contingent deferred sales charge ("Surrender Charge") is
imposed as a percentage of each premium payment if the
Contract is surrendered or an excess partial withdrawal is
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taken during the seven year period from the date we receive
and accept such premium payment. The percentage of premium
payments deducted at the time of surrender or excess partial
withdrawal depends upon the number of complete years that
have elapsed since that premium payment was made. We
determine the surrender charge as a percentage of each
premium payment as follows:
Complete Years Elapsed
Since Premium Payment Surrender Charge
---------------------- ----------------
0 7%
1 6%
2 5%
3 4%
4 3%
5 2%
6 1%
7+ 0%
Subject to our rules and as described in the Contract, the
surrender charge arising from a surrender or excess partial
withdrawal will be waived in the following events:
(1) you begin receiving qualified extended medical
care on or after the first Contract Anniversary
for at least 45 days during any continuous
sixty-day period, and your request for the
surrender or withdrawal, together with all
required proof of such qualified extended medical
care, must be received at our Customer Service
Center during the term of such care or within
ninety days after the last day upon which you
received such care.
(2) you are first diagnosed by a qualifying medical
professional, on or after the first Certificate
Anniversary, as having a Qualifying Terminal
Illness. Written proof of terminal illness,
satisfactory to us, must be received at our
Customer Service Center. We reserve the right to
require an examination by a physician of our
choice.
See your Contract for more information. The waiver of
surrender charge may not be available in all states.
Surrender Charge for Excess Partial Withdrawals
There is considered to be an excess partial withdrawal in
any Contract Year in which the amount withdrawn exceeds 15%
of your Accumulation Value on the date of the withdrawal
minus any amount withdrawn during that Contract Year. Where
you are receiving systematic partial withdrawals, any
combination of conventional partial withdrawals taken and
any systematic partial withdrawals expected to be received
in a Contract Year will be considered in determining the
amount of the excess partial withdrawal. Such a withdrawal
will be considered a partial surrender of the Contract and
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we will impose a surrender charge and any associated premium
tax. See Facts About the Contract, The Fixed Account,
Market Value Adjustment. Such charges will be deducted from
the Accumulation Value in proportion to the Accumulation
Value in each Division or Fixed Allocation from which the
excess partial withdrawal was taken. In instances where the
excess partial withdrawal equals the entire Accumulation
Value in each such Division or Fixed Allocation, charges
will be deducted proportionately from all other Divisions
and Fixed Allocations in which you are invested.
For purposes of calculating the surrender charge for the
excess partial withdrawal, (i) we treat premium payments as
being withdrawn on a first-in first-out basis, and (ii)
amounts withdrawn which are not considered an excess partial
withdrawal are not treated as a withdrawal of any premium
payments. Although we treat premium payments as being
withdrawn before earnings for purposes of calculating the
surrender charge for excess partial withdrawals, the Federal
income tax law treats earnings as withdrawn first. See
Federal Tax Considerations, Taxation of Non-Qualified
Annuities.
For example, the following assumes an Initial Premium
payment of $10,000 and additional premium payments of
$10,000 in each of the second and third Contract Years, for
total premium payments under the Contract of $30,000. It
also assumes a partial withdrawal at the beginning of the
fourth Contract Year of 20% of the Accumulation Value of
$35,000.
In this example, $5,250 ($35,000 x .15) is the maximum
partial withdrawal that may be withdrawn during the Contract
Year without the imposition of a surrender charge. The
total partial withdrawal would be $7,000 ($35,000 x .2).
Therefore, $1,750 ($7,000-$5,250) is considered an excess
partial withdrawal of a part of the Initial Premium payment
of $10,000 and would be subject to a 4% surrender charge of
$70.00 ($1,750 x .04). This example does not take into
account any Market Value Adjustment or deduction of any
premium taxes.
Premium Taxes
We make a charge for state and local premium taxes in
certain states which can range from 0% to 3.5% of premium.
The charge depends on the Owner's state of residence. We
reserve the right to change this amount to conform with
changes in the law or if the Owner changes state of
residence.
Premium taxes are generally incurred on the annuity
commencement date and a charge for such premium taxes is
then deducted from your Accumulation Value on such date.
However, some jurisdictions impose a premium tax at the time
that initial and additional premiums are paid, regardless of
the Annuity Commencement Date. In those states we may
initially defer collection of the amount of the charge for
premium taxes from your Accumulation Value and deduct it
against Accumulation Value on surrender of the Contract,
excess partial withdrawals or on the Annuity Commencement
Date.
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Administrative Charge
The administrative charge is incurred at the beginning of
the Contract processing period and deducted at the end of
each Contract processing period. We deduct this charge when
determining the Cash Surrender Value payable if you
surrender the Contract prior to the end of a Contract
processing period. If the Accumulation Value at the end of
the Contract processing period equals or exceeds $100,000 or
the sum of the premiums paid equals or exceeds $100,000, the
charge is zero. Otherwise, the amount deducted is $30 per
Contract Year. This charge is to cover a portion of our
administrative expenses. See Asset Based Administrative
Charge, below.
Excess Allocation Charge
We currently do not assess a charge for allocation changes
made during a Contract Year. We reserve the right, however,
to assess a $25 charge for each allocation change after the
twelfth allocation change in a Contract Year. This amount
represents the maximum we will charge. The charge would be
deducted from the Divisions and the Fixed Allocations from
which each such reallocation is made in proportion to the
amount being transferred from each such Division and Fixed
Allocation unless you have chosen to use the Charge
Deduction Division. The excess allocation charge is set at
a level that is not designed to produce profit for First
Golden or any affiliate. Any allocations or transfers due
to the election of dollar cost averaging and reallocation
under the provision What Happens if a Division is Not
Available will not be included in determining if the excess
allocation charge should apply.
Charges Deducted from the Divisions
Mortality and Expense Risk Charge
The amount of the mortality and expense risk charge depends
on the death benefit option that has been elected. If the
Standard Death Benefit Option is elected, the charge is
equivalent, on an annual basis, to 1.10% of the assets in
each Division. The charge is deducted on each Valuation
Date at the rate of .003030% for each day in the Valuation
Period. Approximately .75% is allocated to the mortality
risk and .35% is allocated to the expense risk. If the
Annual Ratchet Enhanced Death Benefit is elected, the charge
is equivalent, on an annual basis, to 1.25% of the assets in
each Division. The charge is deducted on each Valuation
Date at the rate of .003446% for each day in the Valuation
Period. Approximately .90%, is allocated to the mortality
risk.
This charge will compensate us for mortality and expense
risks we assume under the Contract. We will realize a gain
from this charge to the extent it is not needed to provide
for benefits and expenses under the Contract. We will use
any gain for any lawful purpose including any shortfalls on
paying distribution expenses.
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The mortality risk assumed is the risk that Annuitants as a
group will live for a longer time than our actuarial tables
predict. As a result, we would be paying more in annuity
income than we planned. First Golden also assumes a risk
under the Contract for paying a guaranteed death benefit.
The expense risk assumed is the risk that it will cost us
more to issue and administer the Contract than we expect.
Asset Based Administrative Charge
We will deduct a daily charge from the assets in each
Division, to compensate us for a portion of the
administrative expenses under the Contract. The daily
charge is at a rate of 0.000411% (equivalent to an annual
rate of 0.15%) on the assets in each Division.
This asset based administrative charge plus the
administrative charge above will not exceed the cost of the
services to be provided over the life of the Contract.
Trust Expenses
There are fees and charges deducted from each Series of the
GCG Trust and the ESS Trust. Please read the respective Trust
prospectus for details.
CHOOSING YOUR ANNUITIZATION OPTIONS
Annuitization of Your Contract
If the Annuitant and Owner are living on the Annuity
Commencement Date, we will begin making payments to the Owner
under an income plan. We will make these payments under the
Annuity Option chosen. You may change an Annuity Option by
making a written request to us at least 30 days prior to the
Annuity Commencement Date of the Contract. The amount of the
payments will be determined by applying your Accumulation Value
adjusted for any applicable Market Value Adjustment on the
Annuity Commencement Date in accordance with The Annuity Options
section below, subject to our published rules at such time. See
When We Make Payments.
You may also elect an Annuity Option on surrender of the
Contract for its Cash Surrender Value or you may choose one or
more Annuity Options for the payment of death benefit proceeds
while it is in effect and before the Annuity Commencement Date.
If, at the time of the Owner's death or the Annuitant's death (if
the Owner is not an individual), no option has been chosen for
paying death benefit proceeds, the Beneficiary may choose an
option within 60 days. In all events, payments of death benefit
proceeds must comply with the distribution requirements of
applicable Federal tax law.
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The minimum monthly annuity income payment that we will make
is $20. We may require that a single sum payment be made if the
Accumulation Value is less than $2,000 or if the calculated
monthly annuity income payment is less than $20.
For each option we will issue a separate written agreement
putting the option into effect. Before we pay any annuity
benefits, we require the return of the Contract. If your
Contract has been lost, we will require that you complete and
return the applicable Contract form. Various factors will affect
the level of annuity benefits including the Annuity Option
chosen, the applicable payment rate used and the investment
results of the Divisions and interest credited to the Fixed
Allocations in which the Accumulation Value has been invested.
Some annuity options may provide only for fixed payments.
Fixed Annuity Payments are regular payments, the amount of which
is fixed and guaranteed by us. The amount of the payments will
depend only on the form and duration of payments chosen, the age
of the Annuitant or Beneficiary (and sex, where appropriate), the
total Accumulation Value applied to purchase the fixed option,
and the applicable payment rate.
Our approval is needed for any option where:
(1) The person named to receive payment is other than the
Owner or Beneficiary;
(2) The person named is not a natural person, such as a
corporation; or
(3) Any income payment would be less than the minimum
annuity income payment allowed.
Annuity Commencement Date Selection
You select the Annuity Commencement Date. You may select
any date following the fifth Contract Anniversary but before the
Contract Processing Date in the month following the Annuitant's
90th birthday. If, on the Annuity Commencement Date, a Surrender
Charge remains, the elected Annuity Option must include a life
annuity or a period certain of at least five years duration. If
you do not select a date, the annuity commencement date will be
in the month following the Annuitant's 90th birthday. If the
Annuity Commencement Date occurs when the Annuitant is at an
advanced age, such as over age 85, it is possible that the
Contract will not be considered an annuity for Federal tax
purposes. See Federal Tax Considerations. For a Contract
purchased in connection with a qualified plan, distribution must
commence not later than April 1st of the calendar year following
the calendar year in which you attain age 70 1/2. Consult your tax
advisor.
Frequency Selection
You choose the frequency of the Annuity Payments. They may
be monthly, quarterly, semi-annually or annually. If we do not
receive written notice from you, the payments will be made
monthly. There may be certain restrictions on minimum payments
that we will allow.
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The Annuitization Options
There are four options to choose from as shown below.
Options 1 through 3 are fixed and option 4 may be fixed or
variable. For a fixed option, the Accumulation Value in the
Divisions is transferred to the general account.
Option 1. Income for a Fixed Period
Payment is made in equal installments for a fixed
number of years based on the Accumulation Value as of
the annuity commencement date. We guarantee that each
monthly payment will be at least the amount set forth
in the Contract. Guaranteed amounts for annual,
semi-annual and quarterly payments are available upon
request. Illustrations are available upon request. If
the Cash Surrender Value or Accumulation Value is
applied under this option, a 10% penalty tax may apply
to the taxable portion of each income payment until the
Owner reaches age 59 1/2.
Option 2. Income for Life
Payment is made in equal monthly installments and
guaranteed for at least a period certain. The period
certain can be 10 or 20 years. Other periods certain
may be available on request. A refund certain may be
chosen instead. Under this arrangement, income is
guaranteed until payments equal the amount applied. If
the person named lives beyond the guaranteed period,
payments continue until his or her death. We guarantee
that each payment will be at least the amount set forth
in the Contract corresponding to the person's age on
his or her last birthday before the option's effective
date. Amounts for ages not shown in the Contract are
available upon request.
Option 3. Joint Life Income
This option is available if there are two persons named
to receive payments. At least one of the persons named
must be either the Owner or Beneficiary of the
Contract. Monthly payments are guaranteed and are made
as long as at least one of the named persons is living.
There is no minimum number of payments. Monthly
payment amounts are available upon request.
Option 4. Annuity Plan
An amount can be used to buy any single premium annuity
we offer on the option's effective date.
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Payment When Named Person Dies
When the person named to receive payment dies, we will pay
any amounts still due as provided by the option agreement. The
amounts still due are determined as follows:
(1) For option 1, or any remaining guaranteed payments
under option 2, payments will be continued. Under
options 1 and 2, the discounted values of the remaining
guaranteed payments may be paid in a single sum. This
means we deduct the amount of the interest each
remaining guaranteed payment would have earned had it
not been paid out early. The discount interest rate is
never less than 3% for option 1 and 3.50% for option 2
per year. We will, however, base the discount interest
rate on the interest rate used to calculate the
payments for options 1 and 2 if such payments were not
based on the tables in the Contract.
(2) For option 3, no amounts are payable after both named
persons have died.
(3) For option 4, the annuity agreement will state the
amount due, if any.
OTHER CONTRACT PROVISIONS
In Case of Errors in Application Information
If an age or sex given in the application or enrollment form
is misstated, the amounts payable or benefits provided by the
Contract shall be those that the premium payment would have
bought at the correct age or sex.
Sending Notice to Us
Any written notices, inquiries or requests should be sent to
our Customer Service Center. Please include your name, your
Contract number and, if you are not the Annuitant, the name
of the Annuitant.
Assigning the Contract as Collateral
You may assign a non-qualified Contract as collateral
security for a loan or other obligation. This does not
change the Ownership. However, your rights and any
Beneficiary's rights are subject to the terms of the
assignment. See Transfer of Annuity Contracts, and
Assignments. An assignment may have Federal tax
consequences. See Federal Tax Considerations.
You must give us satisfactory written notice at our Customer
Service Center in order to make or release an assignment.
We are not responsible for the validity of any assignment.
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Non-Participating
The Contract does not participate in the divisible surplus
of First Golden.
Authority to Make Agreements
All agreements made by us must be signed by our president or
a vice president and by our secretary or an assistant
secretary. No other person, including an insurance agent or
broker, can change any of the Contract's terms, make any can
change any of the Contract's terms, make any agreements
binding on us or extend the time for premium payments.
Contract Changes - Applicable Tax Law
We reserve the right to make changes in the Contract to the
extent we deem it necessary to continue to qualify the Contract
as an annuity. Any such changes will apply uniformly to all
Contracts that are affected. You will be given advance written
notice of such changes.
Your Right to Cancel or Exchange Your Contract
Canceling Your Contract
You may cancel your Contract within your Free Look Period,
which is ten days after you receive your Contract. For
purposes of administering our allocation and administrative
rules, we deem this period to expire 15 days after the
Contract is mailed to you. Some states may require a longer
Free Look Period. If you decide to cancel, you may mail or
deliver the Contract to our Customer Service Center. We
will refund the Accumulation Value plus any charges we
deducted, and the Contract will be voided as of the date we
receive the Contract and your request. Some states require
that we return the premium paid. In these states, we
require your premiums designated for investment in the
Divisions of Account NY-B be allocated to the Specially
Designated Division during the Free Look Period. Premiums
designated for the Fixed Account will be allocated to a
Fixed Allocation with the Guarantee Period you have chosen.
If you do not choose to exercise your right to cancel during
the Free Look Period, then at the end of the Free Look
Period your money will be invested in the Divisions chosen
by you, based on the index of investment experience next
computed for each Division. See Facts About the Contract,
Measurement of Investment Experience, Index of Experience
and Unit Value.
Exchanging Your Contract
For information regarding Section 1035 Exchanges, see
Federal Tax Considerations.
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Other Contract Changes
You may change the Contract to another annuity plan subject
to our rules at the time of the change.
Group or Sponsored Arrangements
For certain group or sponsored arrangements, we may reduce
any surrender, administration, and mortality and expense risk
charges. We may also change the minimum initial and additional
premium requirements, or offer a reduced death benefit. Group
arrangements include those in which a trustee or an employer, for
example, purchases Contracts covering a group of individuals on a
group basis. Sponsored arrangements include those in which an
employer allows us to sell Contracts to its employees on an
individual basis.
Our costs for sales, administration, and mortality generally
vary with the size and stability of the group among other
factors. We take all these factors into account when reducing
charges. To qualify for reduced charges, a group or sponsored
arrangement must meet certain requirements, including our
requirements for size and number of years in existence. Group or
sponsored arrangements that have been set up solely to buy
Contracts or that have been in existence less than six months
will not qualify for reduced charges.
We will make these and any similar reductions according to
our rules in effect when an application or enrollment form for a
Contract is approved. We may change these rules from time to
time. Any variation in the administrative charge will reflect
differences in costs or services and will not be unfairly
discriminatory.
Selling the Contract
DSI is also principal underwriter and distributor of the
Contract as well as for any other Contracts issued through
Account NY-B and any other separate accounts of First Golden and
Golden American. We pay DSI for acting as principal underwriter
under a distribution agreement. The offering of the Contract
will be continuous.
DSI has entered into and will continue to enter into sales
agreements with broker-dealers to solicit for the sale of the
Contract through registered representatives who are licensed to
sell securities and variable insurance products including
variable annuities. These agreements provide that applications
for Contracts may be solicited by registered representatives of
the broker-dealers appointed by First Golden to sell its variable
life insurance and variable annuities. These broker-dealers are
registered with the SEC and are members of the National
Association of Securities Dealers, Inc. ("NASD"). The registered
representatives are authorized under applicable state regulations
to sell variable life insurance and variable annuities. The
writing agent will receive commissions and expense allowances
totaling up to 6.0% of any initial or additional premium payments
made.
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REGULATORY INFORMATION
Voting Rights
Account NY-B
We will vote the shares of a Trust owned by Account NY-B
according to your instructions. However, if the Investment
Company Act of 1940 or any related regulations should change, or
if interpretations of it or related regulations should change,
and we decide that we are permitted to vote the shares of a Trust
in our own right, we may decide to do so.
We determine the number of shares that you have in a
Division by dividing the Contract's Accumulation Value in that
Division by the net asset value of one share of the portfolio in
which a Division invests. Fractional votes will be counted. We
will determine the number of shares you can instruct us to vote
180 days or less before a Trust's meeting. We will ask you for
voting instructions by mail at least 10 days before the meeting.
If we do not get your instructions in time, we will vote the
shares in the same proportion as the instructions received from
all Contracts in that Division. We will also vote shares we hold
in Account NY-B which are not attributable to Owners in the same
proportion.
State Regulation
We are regulated and supervised by the Insurance Department
of the State of New York, which periodically examines our
financial condition and operations. We are also subject to the
insurance laws and regulations of all jurisdictions where we do
business. The variable Contract offered by this prospectus has
been approved by the Insurance Department of the State of New
York. We are required to submit annual statements of our
operations, including financial statements, to the Insurance
Departments of the various jurisdictions in which we do business
to determine solvency and compliance with state insurance laws
and regulations.
Legal Proceedings
First Golden, as an insurance company, is ordinarily
involved in litigation. We do not believe that any current
litigation is material and we do not expect to incur significant
losses from such actions.
Legal Matters
The legal validity of the Contract described in this
prospectus has been passed on by Myles R. Tashman, Esquire,
Executive Vice President, General Counsel and Secretary of First
Golden. Sutherland, Asbill & Brennan, L.L.P. of Washington, D.C.
has provided advice on certain matters relating to Federal
securities laws.
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Experts
The audited financial statements of First Golden American
Life Insurance Company of New York, appearing in the Statement of
Additional Information and Registration Statement have been
audited by Ernst & Young LLP, independent auditors, as set forth
in their report thereon appearing in the Statement of Additional
Information and in the Registration Statement and are included in
reliance upon such reports given upon the authority of such firm
as experts in accounting and auditing.
MORE INFORMATION ABOUT FIRST GOLDEN AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK
Management's Discussion and Analysis of Financial Condition and
Results of Operations
This Management's Discussion and Analysis of Financial
Condition and Results of Operations should be read in conjunction
with the GAAP Basis Financial Statements and Notes to Financial
Statements included herein.
First Golden, a newly established insurance company under
the laws of the state of New York, commenced operations on
__________, 1996. First Golden is a wholly owned subsidiary of
Golden American Life Insurance Company. Golden American Life
Insurance Company, in turn, is an indirect wholly owned
subsidiary of the Equitable of Iowa Companies, a holding company
for Equitable Life Insurance Company of Iowa, USG Annuity & Life
Company, Locust Street Securities, Inc. and Equitable Investment
Services, Inc. First Golden is authorized to do business only in
the State of New York.
First Golden's primary business purpose is to offer
individual deferred variable annuity contracts (the "Contracts").
The First Golden Contracts are funded by Separate Account NY-B
and are being offered to the public for the first time through
this prospectus. As of the date of this prospectus, Separate
Account NY-B had not received any premium payments under the
Contracts. The Company's operations and initial investments were
funded with capital contributed by Equitable of Iowa Companies.
The Company's initial investments have consisted almost
exclusively of U.S. Treasury Bills and certain other short term
instruments with superior credit ratings. These investments have
been chosen to minimize credit risk and to minimize fluctuations
as a result of interest rate changes. As of the date of this
prospectus, the Company has not acquired any equity securities or
any interest in real estate. However, a number of such
investments meeting the Company's investment criteria have been
identified.
Business Environment
The current business and regulatory environment remains
challenging for the insurance industry. Increasing competition
from traditional insurance carriers as well as banks and mutual
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fund companies means that investors have many more choices.
However, overall demand for variable annuity product remains
strong for several reasons: (1) dynamic stock market performance
over the last 3 years; (2) relatively low interest rates; and (3)
baby boomers reaching ages where they are beginning to put aside
large amounts for retirement. Management anticipates that the
demand for variable annuity products will continue to remain
strong through 1997, and, correspondingly, expects that sales of
the Contracts through 1997 will be robust.
Results of Operations
For the period from when the Company commenced operations to
___________, 1996, the Company's net investment income was
$________. Interest income on short-term investments for the
period was $________. For the same period, realized losses were
________ and were attributable to ___________. The Company
incurred operating and administrative expenses equal to $______
for investment services of ___________ and administrative
services of ________.
First Golden's future earnings will be principally derived
from the charges imposed under the Contracts. The primary
revenues from the Contracts should consist of charges for
mortality and expense risk and Contract administration charges
that have been assessed against account balances during a period.
In addition, a sales load of up to 7% of premium payments
withdrawn upon partial withdrawals or surrenders may be collected
under the Contracts. First Golden will defer at issue the cost
associated with acquiring new business and amortize such cost
over the lives of the Contracts in relation to the present value
of estimated future gross profits. First Golden will also incur
expenses associated with the maintenance of in-force Contracts.
Liquidity and Capital Resources
First Golden's liquidity requirements include the payment of
sales commissions, and other acquisition and underwriting
expenses on the annuity business that it writes. Positive cash
flow elements from operations are produced primarily from two
sources. Fees are collected from the in-force book of business.
In addition, premium amounts directed to the fixed account option
produce positive cash flow from operations as amounts are
retained within the general account of the Company and are used
to fund an investment portfolio that finances future benefit
payments. Investments are made in fixed-rate investments such as
bonds, and short-term investments in order to provide a
sufficient return as well as to match the duration of the
obligation for future benefit payments. First Golden products
also contain surrender charge features which reward persistency
and penalize the early withdrawal of funds.
First Golden has developed and utilizes a projection system
which forecasts cash flow. Cash flow from operations will vary
depending on the amount of premium written and the product mix.
The Company will also periodically perform asset/liability
matching in the management of its asset and liability portfolios.
Those matching practices involve the monitoring of asset and
liability durations for various product lines, cash flow testing
under
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various interest rate scenarios, and the continuous
rebalancing of assets and liabilities with respect to yield,
risk, and cash flow characteristics.
In order to continue to market annuity products, First
Golden must meet or exceed the statutory capital and surplus
requirements of the insurance department of the state of New
York. Statutory accounting practices differ from generally
accepted accounting principles in two major respects; under
statutory accounting practices, the acquisition costs of new
business are charged to expense and the required additions to
statutory reserves for new business in some cases may initially
exceed the statutory revenues attributable to such business.
These practices result in a reduction of statutory income and
surplus at the time of recording new business.
The NAIC utilizes a Risk Based Capital "RBC" adequacy
monitoring system. The RBC calculates the amount of adjusted
capital which a life insurance company should have based upon
that company's risk profile. The NAIC has established four
different levels of regulatory action with respect to the RBC
adequacy monitoring system. Each of these levels may be
triggered if an insurer's total adjusted capital is less than a
corresponding level of RBC. Under currently effective funding
agreements, expected RBC levels will remain well in excess of
levels required to avoid regulatory actions. There is no
assurance, however, that First Golden will continue to maintain
its current RBC level.
First Golden believes that it will be able to fund the
capital and surplus required for projected new business from
existing statutory capital and surplus as well as future surplus
contributions from its parent. First Golden expects to continue
to receive capital contributions from its parent if necessary.
First Golden's future marketing efforts could be hampered should
its parent and/or affiliates be unable to provide additional
funding.
Segment Information
First Golden's operations currently consist of one business
segment, the sale of annuity products. First Golden anticipates
that it will not be dependent upon any single customer, and that
no single customer will account for its revenues in 1997.
Reinsurance
First Golden currently reinsures its mortality risk
associated with the Contract's guaranteed death benefit with one
or more appropriately licensed insurance companies.
Reserves
In accordance with the life insurance laws and regulations
under which First Golden operates, it is obligated to carry
on its books, as liabilities, actuarially determined
reserves to meet its obligations on outstanding Contracts.
Reserves, based on valuation mortality tables in general use
in the United States, where applicable, are computed to
equal amounts which, together with interest on such reserves
computed annually at certain
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assumed rates, make adequate
provision according to presently accepted actuarial
standards of practice, for the anticipated cash flows
required by the contractual obligations and related expenses
of First Golden.
Investments
First Golden's assets are invested in accordance with
applicable state laws. These laws govern the nature and the
quality of investments that may be made by life insurance
companies and the percentage of their assets that may be
committed to any particular type of investment. In general,
these laws permit investments, within specified limits
subject to certain qualifications, in federal, state, and
municipal obligations, corporate bonds, preferred or common
stocks, real estate mortgages, real estate and certain other
investments. All of First Golden's assets, except for
assets held in escrow and variable separate account assets
supporting variable products, are available to meet its
obligations under the Contracts.
First Golden makes investments in accordance with investment
guidelines that take into account investment quality,
liquidity and diversification, and invests assets supporting
the Contract guarantees primarily in [fixed income assets
issued or guaranteed by the U.S. government or its agencies
and instrumentalities.]
At ___________, 1996, 100% of the total invested assets were
invested in investment grade bonds and 0% were invested in
non-investment grade securities. First Golden defines
non-investment grade as unsecured corporate debt obligations
which do not have a rating equivalent to Standard & Poor's
(or similar rating agency) BBB or higher and are not
guaranteed by an agency of the federal government.
Competition
First Golden is engaged in a business that is highly
competitive because of the large number of stock and mutual
life insurance companies and other entities marketing
insurance products comparable to those of First Golden.
There are approximately 2,350 stock, mutual and other types
of insurers in the life insurance business in the United
States, a substantial number of which are significantly
larger than First Golden.
Certain Agreements
[Information to be provided by pre-effective amendment.]
Distribution Agreement
First Golden has entered into agreements with DSI to perform
services related to the distribution of its products. DSI
will act as the principal underwriter (as defined in the
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Securities Act of 1933 and the Investment Company Act of
1940, as amended) of the variable insurance products issued
by First Golden.
Employees
First Golden, as a result of its Service Agreements with
each of Equitable of Iowa and Golden American has very few
direct employees. Instead, various management services are
provided by Equitable of Iowa, and Golden American as
described above under "Certain Agreements." The cost of
these services are allocated to First Golden.
Certain officers of First Golden are also officers of Golden
American and DSI, and their salaries are allocated among the
three companies. Certain officers of First Golden are also
officers of Equitable of Iowa. See "Directors and Executive
Officers."
Properties
First Golden's principal office is located at
____________________________, New York, New York, where all
of First Golden's records are maintained. This office space
is leased under a separate agreement.
Directors and Executive Officers
Name (Age) Positions(s) with the Company
---------- -----------------------------
Terry L. Kendall (50) Chairman, President, Chief Executive Officer
and Director
Myles R. Tashman (54) Executive Vice President, General Counsel,
Secretary and Director
Barnett Chernow (46) Executive Vice President, Director
Edward C. Wilson (51) Executive Vice President
Stephen J. Friedman (58) Director
Bernard Levitt (70) Director
Roger R. Martin (65) Director
Andrew Kalinowski (51) Director
David L. Jacobson (47) Senior Vice President and Assistant Secretary
Stephen J. Preston (38) Senior Vice President, Chief Actuary and
Controller
Mary B. Wilkinson (40) Senior Vice President and
Secretary and Treasurer
Marilyn Talman (49) Vice President, Associate Counsel
and Assistant Secretary
Each director is elected to serve for one year or until the
next annual meeting of shareholders or until his or her successor
is elected. Some directors are directors of insurance company
subsidiaries of First Golden's ultimate parent, Equitable of Iowa
Companies.
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The principal positions of First Golden's directors and
senior executive officers for the past five years are listed
below:
Mr. Terry L. Kendall is President, Chief Executive Officer
and Director of the First Golden American Life Insurance Company
of New York. Since September, 1993, Mr. Kendall has also served
as Chairman of the Board, President and Chief Executive Officer
of Golden American Life Insurance Company. From 1982 through
June 1993, he was President and Chief Executive Officer of United
Pacific Life Insurance Company. He was elected to serve as
director of First Golden in June, 1996.
Mr. Myles R. Tashman is Executive Vice President, General
Counsel, Secretary and Director of First Golden American Life
Insurance Company of New York. Since December, 1995, Mr. Tashman
has also served as Executive Vice President of Golden American
Life Insurance Company. From 1986 through 1993, he was Senior
Vice President and General Counsel of United Pacific Life
Insurance Company. He was elected to serve as a director of
First Golden in June, 1996.
Mr. Barnett Chernow is Executive Vice President and
Director of First Golden American Life Insurance Company of New
York. Since 1996, Mr. Chernow has also served as Executive Vice
President of Golden American Life Insurance Company. From 1977
through 1993, he held various positions with Reliance Insurance
Companies and was Senior Vice President and Chief Financial
Officer of United Pacific Life Insurance Company from 1984
through 1993. He was elected to serve as a director of First
Golden in June, 1996.
Mr. Stephen J. Friedman is a Director of First Golden,
having been first appointed in June, 1996. Mr. Friedman is a
partner of the law firm of Debevoise & Plimpton in New York, NY
since 1993. From 1988 through 1993, he was Executive Vice
President and General Counsel to Equitable Life Assurance
Society of the United States.
Mr. Bernard Levitt is a Director of First Golden, having
been first appointed in June, 1996. Until his retirement in
1990, Mr. Levitt was a life insurance consultant with American
Life Insurance Company or New York, since 1989.
Mr. Roger R. Martin is a Director of First Golden, having
been first appointed in June, 1996. Until his retirement in July,
1995, Mr. Martin was a VIce President with Bear Sterns since 1984.
Mr. Andrew Kalinowski is a Director of First Golden, having
been first appointed in June, 1996. Mr. Kalinowski is a Principal
and the President of Upstate Special Risk Services, Incorporated
since 1974. He is also a Principal, the Chief Marketing Officer
and Vice President of LifeMark Securities Corporation since 1983,
a Principal, Vice President and Secretary of LifeMark
Associates, Incorporated since 1993, and a Principal and Director
of LIFE Incorporated.
Mr. Edward C. Wilson is Executive Vice President of First
Golden American Life Insurance Company. Since January, 1996, Mr.
Wilson has also served as Executive Vice President of Golden
American Life Insurance Company. From August, 1994 to December,
1995, he was Senior Managing Director at Van Eck Global
Investors. From July, 1990 to August, 1994, he was Vice
President and National Sales Manager at Keyport Life Insurance
Company.
Mr. David L. Jacobson is Senior Vice President and
Assistant Secretary of First Golden American Life Insurance
Company. Since November, 1993, Mr. Jacobson has also served as
Senior Vice President and Assistant Secretary of Golden American
Life Insurance Company. From April, 1974 through November, 1993,
he held various positions with United Pacific Life Insurance
Company and was Vice President upon leaving.
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Mr. Stephen J. Preston is Senior Vice President, Chief
Actuary and Controller of First Golden American Life Insurance
Company. Since December, 1993, Mr. Preston has served in an
identical capacity with Golden American Life Insurance Company.
From September, 1993 through November, 1993, he was Senior Vice
President and Actuary for Mutual of America Insurance Company.
From July, 1987 through August, 1993, he held various positions
with United Pacific Life Insurance Company and was Vice President
and Actuary upon leaving.
Ms. Mary Bea Wilkinson is Senior Vice President and
Treasurer of First Golden American Life Insurance Company. Since
November, 1993, Ms. Wilkinson has also served as Senior Vice
President, Assistant Secretary and Treasurer of Golden American
Life Insurance Company. From August, 1993 through October, 1993,
she was an Assistant Vice President with CIGNA Insurance
Companies. From January, 1987 through July, 1993, she held
various positions with United Pacific Life Insurance Company and
was Vice President and Controller upon leaving.
Ms. Marilyn Talman is Vice President, Associate General
Counsel and Assistant Secretary of First Golden American Life
Insurance Company of New York. Since April, 1996, Ms. Talman has
also served as Vice President, Associate General Counsel and
Assistant Secretary for Golden American Life Insurance Company.
From March, 1992 through March, 1994, she held various positions
with Rodney Square Management Corp. and was Vice President and
General Counsel upon leaving. From June, 1989 through February,
1992, she was an Associate with the law firm of Ballard, Spahr,
Andrews & Ingersoll.
FEDERAL TAX CONSIDERATIONS
Introduction
The following discussion of the federal income tax treatment
of the Contract is not exhaustive, does not purport to cover all
situations, and is not intended as tax advice. The federal
income tax treatment of the Contract is unclear in certain
circumstances, and a qualified tax adviser should always be
consulted with regard to the application of the tax law to
individual circumstances. This discussion is based on the
Internal Revenue Code of 1986, as amended (the "Code"). Treasury
Department regulations, and interpretations existing on the date
of this prospectus. These authorities, however, are subject to
change by Congress, the Treasury Department, and judicial
decisions.
This discussion does not address state or local tax
consequences associated with the purchase of the contract. In
addition, FIRST GOLDEN MAKES NO GUARANTEE REGARDING ANY TAX
TREATMENT - FEDERAL, STATE OR LOCAL - OF ANY CONTRACT OR OF ANY
TRANSACTION INVOLVING A CONTRACT.
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Tax Status of First Golden
First Golden is taxed as a life insurance company under the
Code. Since the operations of Account NY-B are a part of, and
are taxed with, the operations of First Golden, Account NY-B is
not separately taxed as a "regulated investment company" under
the Code. Under existing federal income tax laws, investment
income and capital gains of Account NY-B are not taxed to First
Golden to the extent they are applied to increase reserves under
a contract. Since, under the contracts, investment income and
realized capital gains of Account NY-B attributable to contract
obligations are automatically applied to increase reserves, First
Golden does not anticipate that it will incur any federal income
tax liability in Account NY-B attributable to contract
obligations, and therefore First Golden does not intend to make
provision for any such taxes. If First Golden is taxed on
investment income or capital gains of Account NY-B, then First
Golden may impose a charge against Account NY-B, as appropriate,
in order to make provision for such taxes.
Taxation of Non-Qualified Annuities
Tax Deferral During Accumulation Period
Under existing provisions of the Code, except as described
below, any increase in an owner's Accumulation Value is
generally not taxable to the owner until amounts are
received from the Contract, either in the form of annuity
payments as contemplated by the Contract, or in some other
form of distribution. However, this rule allowing deferral
applies only if (1) the investments of Account NY-B are
"adequately diversified" in accordance with Treasury
Department regulations, (2) First Golden, rather than the
owner, is considered the owner of the assets of Account NY-B
for federal income tax purposes, and (3) the owner is an
individual. In addition to the foregoing, if the Contract's
annuity commencement date occurs at a time when the
annuitant is at an advanced age, such as over age 85, it is
possible that the owner will be taxable currently on the
annual increase in the Accumulation Value.
Diversification Requirements. The Code and Treasury
Department regulations prescribe the manner in which the
investments of a segregated asset account, such as the
Divisions of Account NY-B, are to be "adequately
diversified." If a Division of Account NY-B failed to
comply with these diversification standards, contracts based
on that segregated asset account would not be treated as an
annuity contract for federal income tax purposes and the
owner would generally be taxable currently on the income on
the contract (as defined in the tax law) beginning with the
period of non-diversification. First Golden expects that
the Divisions of Account NY-B will comply with the
diversification requirements prescribed by the Code and
Treasury Department regulations.
Ownership Treatment. In certain circumstances, variable
annuity contract owners may be considered the owners, for
federal income tax purposes, of the assets of a segregated
asset account, such as the Divisions of Account NY-B, used
to support their contracts. In those circumstances, income
and gains from the segregated as set account would be
includible
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in the contract owners' gross income. The
Internal Revenue Service (the "IRS") has stated in published
rulings that a variable contract owner will be considered
the owner of the assets of a segregated asset account if the
owner possesses incidents of ownership in those assets, such
as the ability to exercise investment control over the
assets. In addition, the Treasury Department announced, in
connection with the issuance of regulations concerning
investment diversification, that those regulations "do not
provide guidance concerning the circumstances in which
investor control of the investments of a segregated asset
account may cause the investor, rather than the insurance
company, to be treated as the owner of the assets in the
account." This announcement also stated that guidance would
be issued by way of regulations or rulings on the "extent to
which policyholders may direct their investments to
particular subaccounts (of a segregated asset account)
without being treated as owners of the underlying assets."
As of the date of this prospectus, no such guidance has been
issued.
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 the assets of a segregated asset
account. For example, the owner of this Contract has the
choice of more investment options to which to allocate
purchase payments and the Accumulation Value, and may be
able to transfer among investment options more frequently,
than in such rulings. These differences could result in the
owner being treated as the owner of all or a portion of the
assets of Account NY-B. In addition, First Golden does not
know what standards will be set forth in the regulations or
rulings which the Treasury Department has stated it expects
to issue. First Golden therefore reserves the right to
modify the Contract as necessary to attempt to prevent
Contract owners from being considered the owners of the
assets of Account NY-B. However, there is no assurance that
such efforts would be successful.
Frequently, if the IRS or the Treasury Department sets forth
a new position which is adverse to taxpayers, the position
is applied on a prospective basis only. Thus, if the IRS or
the Treasury Department were to issue regulations or a
ruling which treated an owner of this Contract as the owner
of Account NY-B, that treatment might apply on a prospective
basis. However, if the regulations or ruling were not
considered to set forth a new position, an owner might
retroactively be determined to be the owner of the assets of
Account NY-B.
Non-Natural Owner. As a general rule, contracts held by
"non-natural persons" such as a corporation, trust or other
similar entity, as opposed to a natural person, are not
treated as annuity contracts for federal tax purposes. The
income on such contracts (as defined in the tax law) is
taxed as ordinary income that is received or accrued by the
owner of the contract during the taxable year. There are
several exceptions to this general rule for non-natural
owners. First, contracts will generally be treated as held
by a natural person if the nominal owner is a trust or other
entity which holds the contract as an agent for a natural
person. However, this special exception will not apply in
the case of any
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employer who is the nominal owner of a
contract under a non-qualified deferred compensation
arrangement for its employees.
In addition, exceptions to the general rule for non-natural
owners will apply with respect to (1) contracts acquired by
an estate of a decedent by reason of the death of the
decedent, (2) certain contracts issued in connection with
qualified retirement plans, (3) contracts purchased by
employers upon the termination of certain qualified
retirement plans, (4) certain contracts used in connection
with structured settlement agreements, and (5) contracts
purchased with a single purchase payment when the annuity
starting date (as defined in the tax law) is no later than a
year from purchase of the contract and substantially equal
periodic payments are made, not less frequently than
annually, during the annuity period.
The remainder of this discussion assumes that the Contract
will be treated as an annuity contract for federal income
tax purposes.
Taxation of Partial Withdrawals and Surrenders
In the case of a partial withdrawal prior to the annuity
commencement date, amounts received generally are includible
in income to the extent the owner's cash value (determined
without regard to any surrender charge, within the meaning
of the tax law) before the surrender exceeds his or her
"investment in the contract." In the case of a surrender of
the Contract for the cash surrender value, amounts received
are includible in income to the extent they exceed the
"investment in the contract." For these purposes, the
investment in the Contract at any time equals the total of
the premium payments made under the Contract to that time
(to the extent such payments were neither deductible when
made nor excludable from income as, for example, in the case
of certain contributions to IRAs and other qualified
retirement plans) less any amounts previously received from
the Contract which were not includible in income.
In the case of systematic partial withdrawals, the amount of
each withdrawal will generally be taxed in the same manner
as a partial withdrawal made prior to the annuity
commencement date, as described above. However, there is
some uncertainty regarding the tax treatment of systematic
partial withdrawals, and it is possible that additional
amounts may be includible in income.
The Contract provides a death benefit that in certain
circumstances may exceed the greater of the premium payments
and the Accumulation Value. As described elsewhere in this
prospectus, First Golden imposes certain charges with
respect to the death benefit. It is possible that some
portion of those charges could be treated for federal tax
purposes as a partial withdrawal from the Contract.
In certain circumstances, surrender charges may be waived
because of the owner's need for extended medical care or
because of the owner's terminal illness. Distributions made
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in respect of which surrender charges are waived are treated
as partial withdrawals or surrenders, as the case may be,
for income tax purposes.
Taxation of Annuity Payments
Normally, the portion of each annuity payment taxable as
ordinary income is equal to the excess of the payment over
the exclusion amount. In the case of fixed annuity
payments, the exclusion amount is the amount determined by
multiplying (1) the fixed annuity payment by (2) the ratio
of the "investment in the contract" (defined above),
adjusted for any period certain or refund feature, allocated
to the fixed annuity option to the total expected amount of
fixed annuity payments for the period of the Contract
(determined under Treasury Department regulations). In the
case of variable annuity payments, the exclusion amount for
each variable annuity payment is a specified dollar amount
equal to the investment in the Contract allocated to the
variable annuity option when payments begin divided by the
number of variable payments expected to be made (determined
by Treasury Department regulations).
Once the total amount of the investment in the Contract is
excluded using these formulas, annuity payments will be
fully taxable. If annuity payments cease because of the
death of the annuitant and before the total amount of the
investment in the Contract is recovered, the unrecovered
amount generally will be allowed as a deduction to the
annuitant or beneficiary (depending upon the circumstances).
If any amount is constructively received, within the meaning
of the tax law, from a contract (which may occur when a
death benefit becomes payable), such amount will be treated
as a partial withdrawal or surrender for federal income tax
purposes unless it is applied under an annuity option within
60 days after the time when such amount was constructively
received. In any event, however, payments must comply with
applicable Federal tax law distribution requirements.
Taxation of Death Benefit Proceeds
Prior to the annuity commencement date, amounts may be
distributed from a contract because of the death of an owner
or, in certain circumstances, the death of the annuitant.
Such death benefit proceeds are includible in income as
follows: (1) if distributed in a lump sum, they are taxed in
the same manner as a 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.
After the annuity commencement date, where a guaranteed
period exists under an annuity option and the annuitant dies
before the end of that period, payments made to the
beneficiary for the remainder of that period are includible
in income as follows: (1) if received in a lump sum, they
are includible in income to the extent that they exceed the
unrecovered investment in the contract at that time, or (2)
if distributed in accordance with the existing annuity
option selected, they are
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fully excludable from income until
the remaining investment in the contract is deemed to be
recovered, and all annuity payments thereafter are fully
includible in income.
Assignments, Pledges, and Gratuitous Transfers
Other than in the case of contracts issued as IRAs or in
connection with certain other qualified retirement plans
(which generally cannot be assigned or pledged), any
assignment or pledge (or agreement to assign or pledge) of
any portion of the value of the contract is treated for
federal income tax purposes as a partial withdrawal of such
amount or portion. The investment in the Contract is
increased by the amount includible as income with respect to
such assignment or pledge, though it is not affected by any
other aspect of the assignment or pledge (including its
release). If an owner transfers a contract without adequate
consideration to a person other than the owner's spouse (or
to a former spouse incident to divorce), the owner will be
taxed on the difference between the cash surrender value
(within the meaning of the tax law) and the investment in
the contract at the time of transfer. In such case, the
transferee's investment in the contract will be increased to
reflect the increase in the transferor's income.
Section 1035 Exchanges
Code section 1035 provides that no gain or loss is
recognized when an annuity contract is received in exchange
for a life, endowment, or annuity contract, provided that no
cash or other property is received in the exchange
transaction. Special rules and procedures apply in order
for an exchange to meet the requirements of section 1035.
Also, there are additional tax considerations involved when
the contracts are issued in connection with qualified
retirement plans. Prospective owners of this Contract
should consult a tax advisor before entering into a section
1035 exchange (with respect to non-qualified annuity
contracts) or a trustee-to-trustee transfer or rollover
(with respect to qualified annuity contracts).
Penalty Tax on Premature Distributions
Where a contract has not been issued as an IRA or in
connection with another qualified retirement plan, there
generally is a 10% penalty tax on the taxable amount of any
payment from the contract unless the payment is: (a)
received on or after the owner reaches age 59 1/2;
(b) attributable to the owner's becoming disabled (as
defined in the tax law); (c) made on or after the death of
the owner or, if the owner is not an individual, on or after
the death of the primary annuitant (as defined in the tax
law); (d) made as a series of substantially equal periodic
payments (not less frequently than annually) for the life
(or life expectancy) of the owner or the joint lives (or
joint life expectancies) of the owner and a designated
beneficiary (as defined in the tax law), or (e) made under a
contract purchased with a single purchase payment when the
annuity starting date (as defined in the tax law) is no
later than a year from purchase of the contract and
substantially equal periodic payments are made, not less
frequently than annually, during the annuity period.
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In the case of systematic partial withdrawals, it is unclear
whether such withdrawals will qualify for exception (d)
above. (For reporting purposes, we currently treat such
withdrawals as if they do not qualify for this exception).
In addition, if withdrawals are of interest amounts only, as
is the case with systematic partial withdrawals from a Fixed
Allocation, exception (d) will not apply.
Aggregation of Contracts
In certain circumstances, the amount of an annuity payment,
withdrawal or surrender from a contract that is includible
in income is determined by combining some or all of the
annuity contracts owned by an individual not issued in
connection with qualified retirement plans. For example, if
a person purchases two or more deferred annuity contracts
from the same insurance company (or its affiliates) during
any calendar year, all such contracts will be treated as one
contract for purposes of determining whether any payment not
received as an annuity (including withdrawals and surrenders
prior to the annuity commencement date) is includible in
income. In addition, if a person purchases a Contract
offered by this prospectus and also purchases at
approximately the same time an immediate annuity, the IRS
may treat the two contracts as one contract. The effects of
such aggregation are not clear, however, it could affect the
time when income is taxable and the amount which might be
subject to the 10% penalty tax described above.
IRA Contracts and Other Qualified Retirement Plans
In General
In addition to issuing the Contracts as non-qualified
annuities, First Golden also currently issues the Contracts
as IRAs. (As indicated above, in this prospectus, IRAs are
referred to as "qualified plans.") First Golden may also
issue the Contracts in connection with certain other types
of qualified retirement plans which receive favorable
treatment under the Code. Numerous special tax rules apply
to the owners under IRAs and other qualified retirement
plans and to the contracts used in connection with such
plans. These tax rules vary according to the type of plan
and the terms and conditions of the plan itself. For
example, for both surrenders and annuity payments under
certain contracts issued in connection with qualified
retirement plans, there may be no "investment in the
contract" and the total amount received may be taxable.
Also, special rules apply to the time at which distributions
must commence and the form in which the distributions must
be paid. Therefore, no attempt is made to provide more than
general information about the use of contracts with the
various types of qualified retirement plans. A qualified
tax advisor should be consulted before purchase of a
Contract in connection with a qualified retirement plan.
When issued in connection with a qualified retirement plan,
a Contract will be amended as necessary to conform to the
requirements of the plan. However, owners, annuitants, and
beneficiaries are cautioned that the rights of any person to
any benefits under
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qualified retirement plans may be subject
to the terms and conditions of the plans themselves,
regardless of the terms and conditions of the Contract. In
addition, First Golden is not bound by terms and conditions
of qualified retirement plans to the extent such terms and
conditions contradict the Contract, unless First Golden
consents.
Individual Retirement Annuities
As indicated above, First Golden currently issues the
Contract as an IRA. If the Contract is used for this
purpose, the owner must be the annuitant.
Premium Payments. Both the premium payments that may be
paid, and the tax deduction that the owner may claim for
such premium payments, are limited under an IRA. In
general, the premium payments that may be made for an IRA
for any year are limited to the lesser of $2,000 or 100% of
the owner's earned income for the year. Also, in the case
of an individual who has a noncompensated spouse, premium
payments may be made into an IRA for the benefit of the
spouse. In such a case, however, the premium payments that
may be made for the spouse's IRA for any year are limited to
the lesser of $2,000 or the excess of (1) $2,250 (or, if
less, 100% of the individual's earned income) over (2) the
individual's premium payments for his or her own IRA. An
excise tax is imposed on IRA contributions that exceed the
law's limits.
The deductible amount of the premium payments made for an
IRA for any taxable year (including a contract for a
noncompensated spouse) is limited to the amount of premium
payments that may be paid for the contract for that year, or
a lesser amount where the individual or his or her spouse is
an active participant in certain qualified retirement plans.
For a single person who is an active participant in a
qualified retirement plan (including a qualified pension,
profit-sharing, or annuity plan, a simplified employee
pension plan, or a "section 403(b)" annuity plan, as
discussed below) and who has adjusted gross income in excess
of $35,000 may not deduct premium payments, and such a
person with adjusted gross income between $25,000 and
$35,000 may deduct only a portion of such payments. Also,
married persons who file a joint return, one of whom is an
active participant in a qualified retirement plan, and who
have adjusted gross income in excess of $50,000 may not
deduct premium payments, and those with adjusted gross
income between $40,000 and $50,000 may deduct only a portion
of such payments. Married persons filing separately may not
deduct premium payments if either the taxpayer or the
taxpayer's spouse is an active participant in a qualified
retirement plan.
In applying these and other rules applicable to an IRA, all
individual retirement accounts and IRAs owned by an
individual are treated as one contract, and all amounts
distributed during any taxable year are treated as one
distribution.
Tax Deferral During Accumulation Period. Until
distributions are made from an IRA, increases in the
Accumulation Value of the contract are not taxed.
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IRAs and individual retirement accounts (that may
invest in this contract) generally may not invest in
life insurance contracts, but an annuity contract that
is issued as an IRA (or that is purchased by an
individual retirement account) may provide a death
benefit that equals the greater of the premiums paid
and the contract's cash value. The Contract provides a
death benefit that in certain circumstances may exceed
the greater of the premium payments and the
Accumulation Value. The IRS has approved the use of
the Contract, as to form, as an IRA.
Taxation of Distributions and Rollovers. If all
premium payments made to an IRA were deductible, all
amounts distributed from the Contract are included in
the recipient's income when distributed. However, if
nondeductible premium payments were made to an IRA
(within the limits allowed by the tax laws), a portion
of each distribution from the Contract typically is
includible in income when it is distributed. In such a
case, any amount distributed as an annuity payment or
in a lump sum upon death or surrender is taxed as
described above in connection with such a distribution
from a non-qualified contract, treating as the
investment in the contract the sum of the nondeductible
premium payments at the end of the taxable year in
which the distribution commences or is made (less any
amounts previously distributed that were excluded from
income). Also, in such a case, any amount distributed
upon a partial withdrawal is partially includible in
income. The includible amount is the excess of the
distribution over the exclusion amount, which in turn
equals the distribution multiplied by the ratio of the
investment in the Contract to the Accumulation Value.
In any event, subject to the direct rollover and
mandatory withholding requirements (discussed below),
amounts may be "rolled over" from certain qualified
retirement plans to an IRA (or from one IRA or
individual retirement account to an IRA) without
incurring current income tax if certain conditions are
met. Only certain types of distributions to eligible
individuals from qualified retirement plans, individual
retirement accounts, and IRAs may be rolled over.
Penalty Taxes. Subject to certain exceptions, a
penalty tax is imposed on distributions from an IRA
equal to 10% of the amount of the distribution
includible in income. (Amounts rolled over from an IRA
generally are excludable from income.) The exceptions
provide, however, that this penalty tax does not apply
to distributions made to the owner (1) on or after age
59 1/2, (2) on or after death or because of disability (as
defined in the tax law), or (3) as part of a series of
substantially equal periodic payments over the life (or
life expectancy) of the owner or the joint lives (or
joint life expectancies) of the owner and his or her
beneficiary (as defined in the tax law). In addition
to the foregoing, failure to comply with a minimum
distribution requirement will result in the imposition
of a penalty tax of 50% of the amount by which a
minimum required distribution exceeds the actual
distribution from an IRA. Under this requirement,
distributions
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of minimum amounts from an IRA as
specified in the tax law must generally commence by
April 1 of the calendar year following the calendar
year in which the owner attains age 70 1/2.
Other Types of Qualified Retirement Plans
The following sections describe tax considerations of
contracts used in connection with various types of
qualified retirement plans other than IRAs. First
Golden does not currently offer all of the types of
qualified retirement plans described and may not offer
them in the future. Prospective purchasers of
contracts for use in connection with such qualified
retirement plans should therefore contact First
Golden's Customer Service Center to ascertain the
availability of the Contract for qualified retirement
plans at any given time.
Simple Incentive Match Plans for Employees of Small
Employers (Simple). Section 408(p) of the Code allows
employers to establish Simple retirement account plans
for its employees. The Code permits establishment of a
plan under which employees may make contributions
pursuant to salary reduction agreements, subject to
limits as to amount. These plans may be adopted by
employers with no more than 100 employees, if the
employer has no other pension plan. Contributions to
the plan by the employer on behalf of the employees
match a percentage of the employees' contributions,
subject to certain prescribed limits. Accounts
established for the employees are IRAs with certain
added restrictions on premature distributions and
contributions. Employers intending to use the contract
in connection with such plans should seek competent
advise.
Simple Savings Plans
Contracts funding Simple plans are subject to the same
general rules as IRAs, however, there are several
unique differences relating to contribution limits,
employers contributions and premature distributions.
In addition, because this is an employer sponsored
plan, certain Simple plan requirements are applicable
to the employer and not the individual tax payer.
Plan Requirements. Only employers with no more than
100 eligible employees may adopt a Simple plan.
Eligible employees are those who have had at least
$5000 of compensation in the preceding year. The
employer may not be a plan sponsor of any other
qualified plan.
Employer Contributions. The employer may elect to make
non-elective 2% contributions for each employee or may
elect a matching contribution from 1 to 3% varying each
year, subject to certain restrictions. All employer
contributions are immediately fully vested to the
employee when made.
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Employee Contributions. Employee contributions of up
to $6,000 of compensation may be made by eligible
employees. All employee contributions must be made by
a salary reduction arrangement with their employer.
Employee contributions may be for any percent of
compensation.
Distributions. Distributions from a Simple retirement
account by an employee are subject to the same rules as
IRAs and the following additional rule. Any amount
received from a Simple retirement account during the
two year period and employee first participated in any
qualified salary reduction arrangement si subject to a
penalty equal to 25% of the amount of the distribution
in addition to being fully taxable.
Simplified Employee Pensions (SEP-IRAs). Section
408(k) of the Code allows employers to establish
simplified employee pension plans for their employees,
using the employees' IRAs for such purposes, if certain
criteria are met. Under these plans the employer may,
within specified limits, make deductible contributions
on behalf of the employees to IRAs. Employers
intending to use the contract in connection with such
plans should seek competent advice.
Corporate and Self-Employed ("H.R. 10" or "Keogh")
Pension and Profit-Sharing Plans. Sections 401(a) and
403(a) of the Code permit corporate employers to
establish various types of tax-favored retirement plans
for employees. The Self-Employed Individuals' Tax
Retirement Act of 1962, as amended, commonly referred
to as "H.R. 10" or "Keogh," permits self-employed
individuals also to establish such tax-favored
retirement plans for themselves and their employees.
Such retirement plans may permit the purchase of the
Contract in order to provide benefits under the plans.
The Contract provides a death benefit that in certain
circumstances may exceed the greater of the premium
payments and the Accumulation Value. It is possible
that such death benefit could be characterized as an
incidental death benefit. There are limitations on the
amount of incidental benefits that may be provided
under pension and profit sharing plans. In addition,
the provision of such benefits may result in currently
taxable income to participants. Employers intending to
use the contract in connection with such plans should
seek competent advice.
Section 403(b) Annuity Contracts. Section 403(b) of
the Code permits public school employees, employees of
certain types of charitable, educational and scientific
organizations exempt from tax under section 501(c)(3)
of the Code, and employees of certain types of State
educational organizations specified in section
170(b)(l)(A)(ii), to have their employers purchase
annuity contracts for them and, subject to certain
limitations, to exclude the amount of premium payments
from gross income for federal income tax purposes.
Purchasers of the contracts for use as a "Section
403(b) Annuity Contract" should seek competent advice
as to eligibility, limitations on permissible amounts
of premium payments and other tax
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consequences
associated with such contacts. In particular,
purchasers and their advisors should consider that this
contract provides a death benefit that in certain
circumstances may exceed the greater of the premium
payments and the Accumulation Value. It is possible
that such death benefit could be characterized as an
incidental death benefit. If the death benefit were so
characterized, this could result in currently taxable
income to purchasers. In addition, there are
limitations on the amount of incidental death benefits
that may be provided under a Section 403(b) Annuity
Contract. Even if the death benefit under the contract
were characterized as an incidental death benefit, it
is unlikely to violate those limits unless the
purchaser also purchases a life insurance contract as
part of his or her Section 403(b) Annuity Contract.
Section 403(b) Annuity Contracts contain restrictions
on withdrawals of (i) contributions made pursuant to a
salary reduction agreement in years beginning after
December 31, 1988, (ii) earnings on those
contributions, and (iii) earnings after 1988 on amounts
attributable to salary reduction contributions (and
earnings on those contributions) held as of the last
year beginning before January 1, 1989. These amounts
can be paid only if the employee has reached age 59 1/2,
separated from service, died, become disabled (within
the meaning of the tax law), or in the case of
hardship. Amounts permitted to be distributed in the
event of hardship are limited to actual contributions;
earnings thereon cannot be distributed on account of
hardship. (These limitations on withdrawals do not
apply to the extent First Golden is directed to
transfer some or all of the Accumulation Value as a
tax-free direct transfer to the issue of another
Section 403(b) Annuity Contract or into a section
403(b)(7) custodial account subject to withdrawal
restrictions which are at least as stringent.)
Eligible Deferred Compensation Plans of State and Local
Governments and Tax-Exempt Organizations. Section 457
of the Code permits employees of state and local
governments and tax-exempt organizations to defer a
portion of their compensation without paying current
federal income taxes. The employees must be
participants in an eligible deferred compensation plan.
To the extent the contract is used in connection with
an eligible plan, the employer as owner of the contract
has the sole right to the proceeds of the contract,
until paid or made available to the participant or
other recipient, subject only to the claims of the
employer's general creditors. Generally, a contract
purchased by a state or local government or a
tax-exempt organization will not be treated as an
annuity contract for federal income tax purposes.
Those who intend to use the contracts in connection
with such plans should seek competent advice.
Direct Rollovers and Federal Income Tax Withholding for
"Eligible Rollover Distributions."
In the case of an annuity contract used in connection
with a pension, profit-sharing, or annuity plan
qualified under sections 401(a) or 403(a) of the
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Code,
or that is a Section 403(b) Annuity Contract, any
"eligible rollover distribution" from the contract will
be subject to direct rollover and mandatory withholding
requirements. An eligible rollover distribution
generally is the taxable portion of any distribution
from a qualified pension plan under section 401(a) of
the Code, qualified annuity plan under Section 403(a)
of the Code, or Section 403(b) Annuity or custodial
account, excluding certain amounts (such as minimum
distributions required under section 401(a)(9) of the
Code and distributions which are part of a "series of
substantially equal periodic payments" made for the
life (or life expectancy) of the employee, or for the
joint lives (or joint life expectancies) of the
employee and the employee's designated beneficiary
(within the meaning of the tax law), or for a specified
period of 10 years or more).
Under these new requirements, federal income tax equal
to 20% of the eligible rollover distribution will be
withheld from the amount of the distribution. Unlike
withholding on certain other amounts distributed from
the contract, discussed below, the taxpayer cannot
elect out of withholding with respect to an eligible
rollover distribution. However, this 20% withholding
will not apply to that portion of the eligible rollover
distribution which, instead of receiving, the taxpayer
elects to have directly transferred to certain eligible
retirement plans (such as to this contract when issued
as an IRA).
If this contract is issued in connection with a
pension, profit-sharing, or annuity plan qualified
under sections 401(a) or 403(a) of the Code, or is a
Section 403(b) Annuity Contract, then, prior to
receiving an eligible rollover distribution, the owner
will receive a notice (from the plan administrator or
First Golden) explaining generally the direct rollover
and mandatory withholding requirements and how to avoid
the 20% withholding by electing a direct transfer.
Federal Income Tax Withholding
First Golden will withhold and remit to the federal
government a part of the taxable portion of each distribution
made under the Contract unless the distributee notifies First
Golden at or before the time of the distribution that he or she
elects not to have any amounts withheld. In certain
circumstances, First Golden may be required to withhold tax, as
explained above. The withholding rates applicable to the taxable
portion of periodic annuity payments (other than eligible
rollover distributions) are the same as the withholding rates
generally applicable to payments of wages. In addition, the
withholding rate applicable to the taxable portion of
non-periodic payments (including surrenders prior to the annuity
commencement date) is 10%. Regardless of whether you elect to
have federal income tax withheld, you are still liable for
payment of federal income tax on the taxable portion of the
payment. As discussed above, the withholding rate applicable to
eligible rollover distributions is 20%.
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First Golden Life Insurance Company of New York
___________, 1996
__________________________________________________________________
STATEMENT OF ADDITIONAL INFORMATION
__________________________________________________________________
TABLE OF CONTENTS
ITEM PAGE
INTRODUCTION
Description of First Golden American Life Insurance
Company of New York
Safekeeping of Assets
The Administrator
Independent Auditors
Reinsurance
Distribution of Contracts
Performance Information
IRA Partial Withdrawal Option
Other Information
Financial Statements of Separate Account NY-B
Appendix - Description of Bond Ratings
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__________________________________________________________________
STATEMENT OF ADDITIONAL INFORMATION (continued)
__________________________________________________________________
Please tear off, complete and return the form below to order a
free Statement of Additional Information for the Contracts
offered under the prospectus. Address the form to our Customer
Service Center, the address is shown on the cover.
PLEASE SEND ME A FREE COPY OF THE STATEMENT OF ADDITIONAL
INFORMATION FOR SEPARATE ACCOUNT NY-B
Please Print or Type
|------------------------------------------------------------------------|
| |
| Name: __________________________________________ |
| |
| __________________________________________ |
| |
| Social Security Number: __________________________________________ |
| |
| Street Address: __________________________________________ |
| |
| __________________________________________ |
| |
| City, State, Zip: __________________________________________ |
| |
|------------------------------------------------------------------------|
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Appendix A
Market Value Adjustment Examples
Example #1: Full Surrender - Example of a Negative Market Value
Adjustment
Assume $100,000 was allocated to a Fixed Allocation with a
Guarantee Period of ten years, a Guaranteed Interest Rate of
7.50%, an initial Index Rate ("I") of 7.00%; that a full
surrender is requested three years into the Guarantee Period;
that the then Index Rate for a seven year Guarantee Period ("J")
is 8.0%; and that no prior transfers or partial withdrawals
affecting this Fixed Allocation have been made.
Calculate the Market Value Adjustment
1. The Accumulation Value of the Fixed Allocation on the
date of surrender is $124,230 ($100,000 x 1.0753)
2. N = 2,555 (365 x 7)
3. Market Value Adjustment =
$124,230 X ((1.07/1.0825)^(2,555/265)-1)= $9,700
Therefore, the amount paid to you on full surrender ignoring any
surrender charge is $114,530 ($124,230 - $9,700).
Example #2: Full Surrender - Example of a Positive Market Value
Adjustment
Assume $100,000 was allocated to a Fixed Allocation with a
Guarantee Period of ten years, a Guaranteed Interest Rate of
7.5%, an initial Index Rate ("I") of 7.00%; that a full
surrender is requested three years into the Guarantee
Period; that the then Index Rate for a seven year Guarantee
Period ("J") is 6.0%; and that no prior transfers or partial
withdrawals affecting this Fixed Allocation have been made.
Calculate the Market Value Adjustment
1. The Accumulation Value of the Fixed Allocation on the
date of surrender is $124,230 ($100,000 x 1.0753)
2. N = 2,555 (365 x 7)
3. Market Value Adjustment =
$124,230 X ((1.07/1.0625)^(2,555/265)-1)= $6,270
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Therefore, the amount paid to you on full surrender ignoring
any surrender charge is $130,500 ($124,230 + $6,270).
Example #3: Partial Withdrawal - Example of a Negative Market
Value Adjustment
Assume $200,000 was allocated to a Fixed Allocation with a
Guarantee Period of ten years, a Guaranteed Interest Rate of
7.5%, an initial Index Rate ("I") of 7.00%; that a partial
withdrawal of $114,530 is requested three years into the
Guarantee period; that the then Index Rate ("J") for a seven year
Guarantee Period is 8.0%; and that no prior transfers or partial
withdrawals affecting this Fixed Allocation have been made.
First calculate the amount that must be withdrawn from the
Fixed Allocation to provide the amount requested.
1. The Accumulation Value of the Fixed Allocation on the
date of withdrawal is $248,459 ($200,000 x 1.0753)
2. N = 2,555 (365 x 7)
3. Amount that must be withdrawn =
($114,530 / ((1.07/1.0825)^(2,555/265))= $124,230
Then calculate the Market Value Adjustment on that amount
4. Market Value Adjustment =
$124,230 X ((1.07/1.0825)^(2,555/265)-1)= $9,700
Therefore, the amount of the partial withdrawal paid to you
is $114,530, as requested. The Fixed Allocation will be reduced
by the amount of the partial withdrawal, $114,530, and also
reduced by the Market Value Adjustment of $9,700, for a total
reduction in the Fixed Allocation of $124,230.
Example #4: Partial Withdrawal - Example of a Positive Market
Value Adjustment
Assume $200,000 was allocated to a Fixed Allocation with a
Guarantee Period of ten years, a Guaranteed Interest Rate of
7.5%, an initial Index Rate of 7.0%; that a partial withdrawal of
$130,500 requested three years into the Guarantee Period; that
the then Index Rate ("J") for a
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seven year Guarantee Period is
6.0%; and that no prior transfers or partial withdrawals
affecting this Fixed Allocation have been made.
First calculate the amount that must be withdrawn from the
Fixed Allocation to provide the amount requested.
1. The Accumulation Value of Fixed Allocation on the date
of surrender is $248,459 ($200,000 x 1.0753)
2. N = 2,555 (365 x 7)
3. Amount that must be withdrawn =
($130,500 / ((1.07/1.0625)^(2,555/265))= $124.300
Then calculate the Market Value Adjustment on that amount
4. Market Value Adjustment =
$124,230 X ((1.07/1.0625)^(2,555/265)-1)= $6,270
Therefore, the amount of the partial withdrawal paid to you
is $130,500, as requested. The Fixed Allocation will be reduced
by the amount of the partial withdrawal, $130,500, but increased
by the Market Value Adjustment of $6,270, for a total reduction
in the Fixed Allocation of $124,230.
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First Golden American Life Insurance Company of New York
First Golden American Life Insurance Company of New York is a
stock company domiciled in New York, New York.
Deferred Combination Variable and
Fixed Annuity Prospectus
PRIMELITE
___________________________________________________________________________
<PAGE>
<PAGE>
First Golden American Life Insurance Company of New York
First Golden American Life Insurance Company of New York is a
stock company domiciled in New York, New York.
Deferred Combination Variable and
Fixed Annuity Prospectus
PrimElite
__________________________________________________________________
This prospectus describes individual deferred variable annuity
Contracts (the "Contract") offered by First Golden American Life
Insurance Company of New York ("First Golden," "we," "our" or
"us"). The Owner ("you" or "your") purchases the Contract with
an Initial Premium and is permitted to make additional premium
payments.
The Contract is funded by two accounts, Separate Account NY-B
("Account NY-B") and the Fixed Account (collectively, the
"Accounts").
[Nine] Divisions of Account NY-B are currently available under
the Contract. The investments available through the Divisions of
Account NY-B include mutual fund portfolios (the "Series") of
the Equi-Select Series Trust (the "ESS Trust"), Travelers Series
Fund Inc. (the "Travelers Series Fund") and Smith Barney Series
Fund Inc. (the "Smith Barney Series Fund"). The investments
available through the Fixed Account include various Fixed
Allocations which we credit with fixed rates of interest for the
Guarantee Periods you select. We currently offer Guarantee
Periods with durations of 1, 3, 5, 7 and 10 years. We reserve
the right at any time to increase or decrease the number of
Guarantee Periods offered. Not all Guarantee Periods may be
available for new allocations.
This prospectus describes the Contract and provides background
information regarding Account NY-B and the Fixed Account. The
prospectuses for the ESS Trust, Travelers Series Fund and Smith
Barney Series Fund (individually, "a Fund," and collectively,
"the Funds"), which must accompany this prospectus, provide
information regarding investment activities and policies of the
Funds.
You may allocate your premiums among the [nine] Divisions and
the Fixed Allocations available under the Contract in any way you
choose, subject to certain restrictions. You may change the
allocation of your Accumulation Value during a Contract Year free
of charge. We reserve the right, however, to assess a charge for
each allocation change after the twelfth allocation change in a
Contract Year.
Your Accumulation Value in Account NY-B will vary in accordance
with the investment performance of the Divisions selected by you.
Therefore, you bear the entire investment risk for all amounts
allocated to Account NY-B. You also bear the investment risk
with respect to surrenders, partial withdrawals, transfers and
annuitization from a Fixed Allocation prior to the end of the
applicable Guarantee Period. Such surrender, partial withdrawal,
transfer or
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annuitization may be subject to a Market Value
Adjustment, which could have the effect of either increasing or
decreasing your Accumulation Value.
We will pay a death benefit to the Beneficiary if the Owner dies
prior to the Annuity Commencement Date or the Annuitant dies
prior to the Annuity Commencement Date when the Owner is other
than an individual.
This prospectus describes your principal rights and limitations
and sets forth the information concerning the Accounts that
investors should know before investing. A Statement of
Additional Information, dated ___________, 1996, about Account NY-
B has been filed with the Securities and Exchange Commission
("SEC") and is available without charge upon request. To obtain
a copy of this document call or write our Customer Service
Center. The Table of Contents of the Statement of Additional
Information may be found on the last page of this prospectus.
The Statement of Additional Information is incorporated herein by
reference.
__________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Contracts and underlying Series shares which fund the Contracts
are not insured by the FDIC or any other agency. They are not
deposits or other obligations of any bank and are not bank
guaranteed. They are subject to market fluctuation, reinvestment
risk and possible loss of principal invested.
PLEASE READ THIS PROSPECTUS AND KEEP IT FOR FUTURE REFERENCE. IT
IS NOT VALID UNLESS ACCOMPANIED BY THE CURRENT PROSPECTUSES FOR
THE ESS TRUST, TRAVELERS SERIES FUND AND SMITH BARNEY SERIES
FUND.
Distributed by:
Directed Services, Inc.
Wilmington, Delaware 19801
Issued by: First Golden American Life Insurance
Company of New York
Home Office: New York, New York
Administered at:
Customer Service Center
Mailing Address: P.O. Box _____
New York, New York _____
1-800-___-____
Prospectus Dated: ___________, 1996
2
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TABLE OF CONTENTS
Page
DEFINITION OF TERMS 7
SUMMARY OF THE CONTRACT 11
FEE TABLE 15
CONDENSED FINANCIAL AND OTHER INFORMATION 18
Financial Statements
Performance Related Information
INTRODUCTION 19
FACTS ABOUT THE COMPANY AND THE ACCOUNTS 20
First Golden
The ESS Trust, Travelers Series Fund and Smith Barney Series
Fund
Separate Account NY-B
Account NY-B Divisions
The ESS Trust
Travelers Series Fund
Smith Barney Series Fund
Changes Within Account NY-B
The Fixed Account
FACTS ABOUT THE CONTRACT 29
The Owner
The Annuitant
The Beneficiary
Change of Owner or Beneficiary
Availability of the Contract
Types of Contracts
Your Right to Select or Change Contract Options
Premiums
Making Additional Premium Payments
Crediting Premium Payments
Restrictions on Allocation of Premium Payments
Your Right to Reallocate
Dollar Cost Averaging
What Happens if a Division is Not Available
Your Accumulation Value
Accumulation Value in Each Division
Measurement of Investment Experience
Cash Surrender Value
Surrendering to Receive the Cash Surrender Value
Partial Withdrawals
Automatic Rebalancing
Proceeds Payable to the Beneficiary
3
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Death Benefit Options
Reports to Owners
When We Make Payments
CHARGES AND FEES 43
Charge Deduction Division
Charges Deducted from the Accumulation
Value
Charges Deducted from the Divisions
Trust Expenses
CHOOSING YOUR ANNUITIZATION OPTIONS 47
Annuitization of Your Contract
Annuity Commencement Date Selection
Frequency Selection
The Annuitization Options
Payment When Named Person Dies
OTHER CONTRACT PROVISIONS 50
In Case of Errors in Application Information
Contract Changes - Applicable Tax Law
Your Right to Cancel or Exchange Your Contract
Other Contract Changes
Group or Sponsored Arrangements
Selling the Contract
REGULATORY INFORMATION 52
Voting Rights
State Regulation
Legal Proceedings
Legal Matters
Experts
MORE INFORMATION ABOUT FIRST GOLDEN
AMERICAN LIFE INSURANCE COMPANY OF NEW YORK 53
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Directors and Executive Officers
FEDERAL TAX CONSIDERATIONS 60
Introduction
Tax Status of First Golden
Taxation on Non-Qualified Annuities
IRA Contracts and Other Qualified Retirement Plans
Federal Income Tax Withholding
FINANCIAL STATEMENTS OF FIRST GOLDEN AMERICAN LIFE
INSURANCE COMPANY OF NEW YORK
STATEMENT OF ADDITIONAL INFORMATION 72
Table of Contents
4
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Appendix A 79
Market Value Adjustment Examples
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY
JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO
PERSON IS AUTHORIZED TO MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS.
5
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DEFINITION OF TERMS
Accounts
Separate Account NY-B and the Fixed Account.
Accumulation Value
The total amount invested under the Contract. Initially, this
amount is equal to the premium paid. Thereafter, the
Accumulation Value will reflect the premiums paid, investment
experience of the Divisions and interest credited to your Fixed
Allocations, charges deducted and any partial withdrawals.
Annual Ratchet Enhanced Death Benefit Option
An enhanced death benefit option that may be elected only at
issue and only if the Owner or Annuitant (when the Owner is other
than an individual) is age 79 or younger. The enhanced death
benefit provided by this option is the highest Accumulation Value
on any Contract Anniversary on or prior to the Owner turning age
80, as adjusted for additional premiums and partial withdrawals.
Annuitant
The person designated by the Owner to be the measuring life in
determining Annuity Payments.
Annuity Commencement Date
The date on which Annuity Payments begin.
Annuity Options
Options the Owner selects that determine the form and amount of
Annuity Payments.
Annuity Payment
The periodic payment an Owner receives. It may be either a fixed
or a variable amount based on the Annuity Option chosen.
Attained Age
The Issue Age of the Owner or Annuitant plus the number of full
years elapsed since the Contract Date.
Beneficiary
The person designated to receive benefits in the case of the
death of the Owner or the Annuitant (when the Owner is other than
an individual).
Business Day
Any day the New York Stock Exchange ("NYSE") is open for trading,
exclusive of Federal holidays, or any day on which the SEC
requires that mutual funds, unit investment trusts or other
investment portfolios be valued.
6
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Cash Surrender Value
The amount the Owner receives upon surrender of the Contract,
including any Market Value Adjustment.
Charge Deduction Division
The Division from which all charges are deducted if so designated
by you. The Charge Deduction Division currently is the Money
Market Division.
Contingent Annuitant
The person designated by the Owner who, upon the Annuitant's
death prior to the Annuity Commencement Date, becomes the
Annuitant.
Contract
The entire Contract consisting of the basic Contract and any
riders or endorsements.
Contract Anniversary
The anniversary of the Contract Date.
Contract Date
The date on which we have received the Initial Premium and upon
which we begin determining the Contract values. It may or may
not be the same as the Issue Date. This date is used to
determine Contract months, processing dates, years and
anniversaries.
Contract Processing Dates
The days when we deduct certain charges from the Accumulation
Value. If the Contract Processing Date is not a Valuation Date,
it will be on the next succeeding Valuation Date. The Contract
Processing Dates will be once each year on the Contract
Anniversary.
Contract Processing Period
The first Contract processing period begins with the Contract
Date and ends at the close of business on the first Contract
Processing Date. All subsequent Contract processing periods
begin at the close of business on the most recent Contract
Processing Date and extend to the close of business on the next
Contract Processing Date. There is one Contract processing
period each year.
Contract Year
The period between Contract anniversaries.
Customer Service Center
Where service is provided to you. The mailing address and
telephone number of the Customer Service Center are shown on the
cover.
Divisions
The investment options available under Account NY-B.
Endorsements
An endorsement changes or adds provisions to the Contract.
7
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Experience Factor
The factor which reflects the investment experience of the
portfolio in which a Division invests and also reflects the
charges assessed against the Division for a Valuation Period.
Fixed Account
An Account which contains all of our assets that support Owner
Fixed Allocations and any interest credited thereto.
Fixed Allocation
An amount allocated to the Fixed Account that is credited with a
Guaranteed Interest Rate for a specified Guarantee Period.
Free Look Period
The period of time within which the Owner may examine the
Contract and return it for a refund.
Guaranteed Interest Rate
The effective annual interest rate which we will credit for a
specified Guarantee Period. The Guaranteed Interest Rate will
never be less than 3%.
Guarantee Period
The period of time for which a rate of interest is guaranteed to
be credited to a Fixed Allocation. We currently offer Guarantee
Periods with durations of 1, 3, 5, 7 and 10 years.
Index of Investment Experience
The index that measures the performance of a Division.
Initial Premium
The payment required to put a Contract into effect.
Issue Age
The Owner's or Annuitant's age on his or her last birthday on or
before the Contract Date.
Issue Date
The date the Contract is issued at our Customer Service Center.
Market Value Adjustment
A positive or negative adjustment made to a Fixed Allocation. It
may apply to certain withdrawals and transfers, whether in whole
or in part, and annuitizations of all or part of a Fixed
Allocation prior to the end of a Guarantee Period.
8
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Maturity Date
The date on which a Guarantee Period matures.
Owner
The person who owns the Contract and is entitled to exercise all
rights under the Contract. This person's death also initiates
payment of the death benefit.
Rider
A rider amends the Contract, in certain instances adding
benefits.
Specially Designated Division
The Division to which distributions from a portfolio underlying a
Division in which reinvestment is not available will be allocated
unless you specify otherwise. The Specially Designated Division
currently is the Money Market Division.
Standard Death Benefit Option
The death benefit option that you will receive under the Contract
unless one of the Annual Ratchet Death Benefit Option is elected.
The death benefit provided by this option is equal to the
greatest of (i) Accumulation Value; (ii) total premium payments
less any partial withdrawals; and (iii) Cash Surrender Value.
Valuation Date
The day at the end of a Valuation Period when each Division is
valued.
Valuation Period
Each business day together with any non-business days before it.
9
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SUMMARY OF CONTRACT
This prospectus has been designed to provide you with information
regarding the Contract and the Accounts which fund the Contract.
Information concerning the Series underlying the Divisions of
Account NY-B and the Fixed Account is set forth in the Funds'
prospectuses.
This summary is intended to provide only a very brief overview of
the more significant aspects of the Contract. Further detail is
provided in this prospectus and in the Contract. The Contract,
together with any riders or endorsements, constitutes the entire
agreement between you and us and should be retained as part of
your permanent records.
This prospectus has been designed to provide you with the
necessary information to make a decision on purchasing the
Contract. You have a choice of investments. We do not promise
that your Accumulation Value will increase. Depending on the
investment experience of the Divisions and interest credited to
the Fixed Allocations in which you are invested, your
Accumulation Value, Cash Surrender Value and death benefit may
increase or decrease on any day. You bear the investment risk.
Description of the Contract
The Contract is designed to establish retirement benefits for two
types of purchasers. The first type of purchaser is one who is
eligible to participate in, and purchases a Contract for use
with, an individual retirement annuity ("IRA") meeting the
requirements of section 408(b) of the Internal Revenue Code of
1986 ("qualified plan"). For a Contract funding a qualified
plan, distributions may be made to you to satisfy requirements
imposed by Federal tax law. The second type of purchaser is one
who purchases a Contract outside of a qualified plan
("non-qualified plan").
The Contract also offers a choice of Annuity Options to which you
may apply all or a portion of the Accumulation Value on the
annuity commencement date or the Cash Surrender Value upon
surrender of the Contract. See Choosing Your Annuity Options.
Availability
We can issue a Contract if both the Annuitant and the Owner are
not older than age 85 and accept additional premium payments
until either the Annuitant or Owner reaches the Attained Age of
85 for non-qualified plans (age 70 for qualified plans, except
for rollover contributions). The minimum Initial Premium is
$10,000 for a non-qualified plan and $1,500 for a qualified plan.
We may change the minimum initial or additional premium
requirements for certain group or sponsored arrangements. See
Other Contract Provisions, Group or Sponsored Arrangements.
The minimum additional premium payment we will accept is $500 for
a non-qualified plan and $250 for a qualified plan. You must
receive our prior approval before making a premium payment that
causes the Accumulation Value of all annuities that you maintain
with us to exceed $1,000,000.
10
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The Divisions
Each of the [nine] Divisions of Account NY-B offered under this
prospectus invests in a mutual fund portfolio with its own
distinct investment objectives and policies. Each Division of
Account NY-B invests in a corresponding Series of the ESS Trust,
managed by Equitable Investment Services, Inc. ("EISI") a
corresponding Series of the Travelers Series Fund, managed by
Smith Barney Mutual Funds Management Inc. ("SBMFM") or a
corresponding Series of the Smith Barney Series Fund, managed by
SBMFM (SBMFM, together with EISI, the "Managers"). The Trusts
and the Managers have retained several portfolio managers to
manage the assets of each Series. See Facts About the Company
and the Accounts, Account NY-B Divisions.
How the Accumulation Value Varies
The Accumulation Value in the Divisions varies each day based on
investment results. You bear the risk of poor investment
performance and you receive the benefits from favorable
investment performance. The Accumulation Value also reflects
premium payments, charges deducted and partial withdrawals. See
Facts About the Contract, Accumulation Value in Each Division.
The Fixed Account
The investments available through the Fixed Account include
various Fixed Allocations which we credit with fixed rates of
interest for the Guarantee Periods you select. We reset the
interest rates for new Guarantee Periods periodically based on
our sole discretion. We may offer Guarantee Periods from one to
ten years. We currently offer Guarantee Periods with durations
of 1, 3, 5, 7 and 10 years.
You bear the investment risk with respect to surrenders, partial
withdrawals, transfers and annuitization from your Fixed
Allocations. A surrender, partial withdrawal, transfer or
annuitization made prior to the end of a Guarantee Period may be
subject to a Market Value Adjustment, which could have the effect
of either increasing or decreasing your Accumulation Value. We
will not apply a Market Value Adjustment on a surrender, partial
withdrawal, transfer or annuitization made within 30 days prior
to the Maturity Date of the applicable Guarantee Period or
certain transfers made in connection with the dollar cost
averaging program. Systematic withdrawals from a Fixed
Allocation also are not subject to a Market Value Adjustment.
Market Value Adjustment
We will apply a Market Value Adjustment, subject to certain
exceptions, to a surrender, partial withdrawal, transfer or
annuitization from a Fixed Allocation made prior to the end of a
Guarantee Period. The Market Value Adjustment does not apply to
amounts invested in Account NY-B.
Surrendering Your Contract
You may surrender the Contract and receive its Cash Surrender
Value at any time while both the Annuitant and Owner are living
and before the Annuity Commencement Date. See Facts About the
Contract, Cash Surrender Value and Surrendering to Receive the
Cash Surrender Value.
11
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Taking Partial Withdrawals
After the Free Look Period, prior to the annuity commencement
date and while the Contract is in effect, you may take partial
withdrawals from the Accumulation Value of your Contract. You
may elect in advance to take systematic partial withdrawals on a
monthly or quarterly basis. If you have an IRA Contract, you may
elect IRA partial withdrawals on a monthly, quarterly or annual
basis.
Partial withdrawals are subject to certain restrictions as
defined in this prospectus, including a surrender charge and a
Market Value Adjustment. Partial withdrawals above a specified
percentage of your Accumulation Value may be subject to a
surrender charge. See Facts About the Contract, Partial
Withdrawals.
Dollar Cost Averaging
Under this program, you may choose to have a specified dollar
amount transferred from either the Money Market Division or a
Fixed Allocation with a one year Guarantee Period to the other
Divisions of Account NY-B on a monthly basis with the objective
of shielding your investment from short-term price fluctuations.
See Facts About the Contract, Dollar Cost Averaging.
Your Right to Cancel the Contract
You may cancel your Contract within the Free Look Period which is
a ten day period of time beginning once you receive the Contract.
For purposes of administering our allocation and certain other
administrative rules, we deem this period to end 15 days after
the Contract is mailed from our Customer Service Center. Some
states may require that we provide a longer free look period. In
some states we restrict the Initial Premium allocation during the
Free Look Period. See Other Contract Provisions, Your Right to
Cancel or Exchange Your Contract.
Your Right to Change the Contract
The Contract may be changed to another annuity plan subject to
our rules at the time of the change. See Other Contract
Provisions, Other Contract Changes.
Death Benefit Options
The Contract provides a death benefit to the beneficiary if the
Owner dies prior to the Annuity Commencement Date. Subject to
our rules, there are two death benefit options that may be
available to you under the Contract: the Standard Death Benefit
Option and the Annual Ratchet Enhanced Death Benefit Option. See
Facts About the Contract, Death Benefit Options. We may offer a
reduced death benefit under certain group and sponsored
arrangements. See Other Contract Provisions, Group or Sponsored
Arrangements.
Deductions for Charges and Fees
We invest the entire amount of the initial and any additional
premium payments in the Divisions and the Fixed Allocations you
select, subject to certain restrictions we impose. See Facts
About the Contract, Restrictions on Allocation of Premium
Payments. We then may deduct an annual Contract fee from your
Accumulation Value; other charges, including the mortality and
expense risk charge and asset based administrative charge, are
deducted from the Account NY-B
12
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Divisions. See Fee Table, Other
Contract Provisions, Charges and Fees. We may reduce certain
charges under group or sponsored arrangements. See Other
Contract Provisions, Group or Sponsored Arrangements. Unless you
have elected the Charge Deduction Division, charges are deducted
proportionately from all Account NY-B Divisions in which you are
invested. If there is no Accumulation Value in these Divisions,
charges will be deducted from your Fixed Allocations starting
with Guarantee Periods nearest their Maturity Dates until such
charges have been deducted.
Federal Income Taxes
The ultimate effect of Federal income taxes on the amounts held
under an annuity Contract, on Annuity Payments and on the
economic benefits to the Owner, Annuitant or Beneficiary depends
on First Golden's tax status and upon the tax status of the
individuals concerned. In general, an Owner is not taxed on
increases in value under an annuity Contract until some form of
distribution is made under it. There may be tax penalties if you
make a withdrawal or surrender the Contract before reaching age
59 1/2. See Federal Tax Considerations.
13
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FEE TABLE
Transaction Expenses/1
Contingent Deferred Sales Charge/2
(imposed as a percentage of premium payments withdrawn upon
excess partial withdrawal or surrender):/3
Complete Years Elapsed
Since Premium Payment Surrender Charge
0 7%
1 6%
2 5%
3 4%
4 3%
5 2%
6 1%
7+ 0%
Excess Allocation Charge $0/4
Annual Contract Fees:
Administrative Charge $30
(Waived if the Accumulation Value equals or exceeds $100,000
at the end of the Contract Year, or once the sum of premiums
paid equals or exceeds $100,000.)
_______________________________
1/ A Market Value Adjustment, which may increase or decrease
your Accumulation Value, may apply to certain transactions. See
Market Value Adjustment.
2/ We also deduct a charge for premium taxes (which can range
from 0% to 3.5% of premium) from your Accumulation Value upon
surrender, excess partial withdrawals or on the Annuity
Commencement Date. See Premium Taxes.
3/ For purposes of calculating the surrender charge for the
excess partial withdrawal, (i) we treat premium payments as being
withdrawn on a first-in first-out basis, and (ii) amounts
withdrawn which are not considered an excess partial withdrawal
are not treated as a withdrawal of any premium payments. See
Charges Deducted from the Accumulation Value, Surrender Charge
for Excess Partial Withdrawals.
4/ We reserve the right to impose a charge in the future at a
maximum of $25 or each allocation change in excess of twelve per
Contract Year. See Excess Allocation Charge.
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Separate Account Annual Expenses (percentage of assets in each
Division):/5
Standard Enhanced Death Benefit
-------- ----------------------
Annual
Ratchet
Mortality and Expense Risk Charge... 1.10% 1.25%
Asset Based Administrative Charge... 0.15% 0.15%
----- -----
Total Separate Account Expenses..... 1.25% 1.40%
The ESS Trust Annual Expenses:
- ------------------------------
Other Total
Series Fees/6/9 Expenses/10 Expenses
------ -------- ----------- --------
OTC and Research Portfolios: 0.80% [0.75%] [1.55%]
Growth & Income Portfolio: 0.95% [0.75%] [1.70%]
Travelers Series Fund Expenses:
- -------------------------------
Other Total
Series Fees Expenses Expenses
------ ---- -------- --------
Income and Growth/8 0.65% 0.29% 0.94%
International Equity 0.90% 0.54% 1.44%
High Income 0.60% 0.47% 1.07%
Money Market 0.60% 0.34% 0.94%
_______________________________
5/ See Facts About the Contract, Death Benefit Options, for a
description of the Contract's Standard and Annual Ratchet Death
Benefit Options.
6/ Prior to October 6, 1995, EISI waived its management fee
for the each of the Portfolios.
7/ Other expenses shown take into account the effect of
EISI's agreement to reimburse the portfolios for all operating
expenses, excluding management fees, that exceed 0.75% of its
average daily net assets. This reimbursement agreement commenced
October 6, 1995 for each Portfolio. This reimbursement is
voluntary and can be terminated at any time. In the absence of
such reimbursement agreement, Other Expenses would have been
1.72% for the OTC, 1.68% for the Research Portfolio and 1.56% for
the Total Return Portfolio for the year ended December 31, 1995.
8/ SBMFM, the fund's investment manager, waived all or part
of its management fees for the year ended October 31, 1995 for
the Income and Growth Portfolio, High Income Portfolio and Money
Market Portfolio such that the actual total annual expenses
charged to each Portfolio in 1995 were .73%, .70% and .65%,
respectively. This voluntary fee waiver can be terminated at any
time.
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Smith Barney Series Fund Expenses:
- ----------------------------------
Other Total
Series Fees Expenses Expenses
------ ---- -------- --------
Appreciation Portfolio: 0.75% 0.22% 0.97%
Equity Income Portfolio 0.65% 0.19% 0.84%
Equity Index Portfolio 0.60% 0.40% 1.00%
Intermediate High Grade Portfolio 0.60% 0.25% 0.85%
Examples:
The examples do not take into account any deduction for
premium taxes. Premium taxes currently range from 0% to 3.5% of
premium payments. There may be surrender charges if you choose
to annuitize within the first three Contract Years.
__________________________________________________________________
If at issue you elect the Annual Ratchet Enhanced Death
Benefit Option and you surrender your Contract at the end of the
applicable time period, you would pay the following expenses for
each $1,000 of Initial Premium assuming a 5% annual return on
assets:
Division One Year Three Years
- ------------ -------- -----------
OTC $ $
Research $ $
Total Return $ $
Income and Growth $ $
International Equity $ $
High Income $ $
Money Market $ $
Appreciation $ $
Equity Income $ $
Equity Index $ $
Intermediate High Grade $ $
__________________________________________________________________
If at issue you elect the Annual Ratchet Enhanced
Death Benefit Option and you do not surrender your Contract or if
you annuitize on the Annuity Commencement Date, you would pay the
following expenses for each $1,000 of initial premium assuming a
5% annual return on assets:
Division One Year Three Years
- ------------ -------- -----------
OTC $ $
Research $ $
Total Return $ $
Income and Growth $ $
International Equity $ $
High Income $ $
Money Market $ $
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Appreciation $ $
Equity Income $ $
Equity Index $ $
Intermediate High Grade $ $
__________________________________________________________________
The purpose of the Fee Table is to assist you in
understanding the various costs and expenses that you will bear
directly or indirectly. For purposes of computing the annual per
Contract administrative charge, the dollar amounts shown in the
examples are based on an Initial Premium of $50,000.
The examples reflect the election at issue of the Annual
Ratchet Enhanced Death Benefit Option. If the Standard Death
Benefit Option is elected, the actual expenses incurred will be
less than those represented in the Examples.
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN
THOSE SHOWN, SUBJECT TO THE GUARANTEES UNDER THE CONTRACT.
CONDENSED FINANCIAL AND OTHER INFORMATION
No condensed financial information for Account NY-B is
presented because, as of the date of this prospectus, Account NY-
B had not yet commenced operations.
Financial Statements
The audited financial statements of First Golden prepared in
accordance with generally accepted accounting principles for the
period ended ___________, 1996 (as well as the auditors' report
thereon) are contained in the Prospectus.
Performance Related Information
Performance information for the Divisions of Account NY-B,
including the yield and effective yield of the Money Market
Division, the yield of the remaining Divisions, and the total
return of all Divisions may appear in reports and promotional
literature to current or prospective Owners.
Current yield for the Money Market Division will be based on
income received by a hypothetical investment over a given 7-day
period (less expenses accrued during the period), and then
"annualized" (i.e., assuming that the 7-day yield would be
received for 52 weeks, stated in terms of an annual percentage
return on the investment). "Effective yield" for the Money
Market Division is calculated in a manner similar to that used to
calculate yield, but when annualized, the income earned by the
investment is assumed to be reinvested. The "effective yield"
will be slightly higher than the "yield" because of the
compounding effect of earnings.
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For the remaining Divisions, quotations of yield will be
based on all investment income per unit (Accumulation Value
divided by the index of investment experience, see Facts About
the Contract, Measurement of Investment Experience, Index of
Investment Experience and Unit Value) earned during a given
30-day period, less expenses accrued during the period ("net
investment income"). Quotations of average annual total return
for any Division will be expressed in terms of the average annual
compounded rate of return on a hypothetical investment in a
Contract over a period of one, five, and ten years (or, if less,
up to the life of the Division), and will reflect the deduction
of the applicable surrender charge, the administrative charge and
the applicable mortality and expense risk charge. See Charges
and Fees. Quotations of total return may simultaneously be shown
for other periods that do not take into account certain
contractual charges, such as the surrender charge.
Performance information for a Division may be compared, in
reports and promotional literature, to: (i) the Standard & Poor's
500 Stock Index ("S&P 500"), Dow Jones Industrial Average
("DJIA"), Donoghue Money Market Institutional Averages, or other
indices measuring performance of a pertinent group of securities
so that investors may compare a Division's results with those of
a group of securities widely regarded by investors as
representative of the securities markets in general; (ii) other
variable annuity separate accounts or other investment products
tracked by Lipper Analytical Services, a widely used independent
research firm which ranks mutual funds and other investment
companies by overall performance, investment objectives, and
assets, or tracked by other ratings services, including VARDS,
companies, publications, or persons who rank separate accounts or
other investment products on overall performance or other
criteria; and (iii) the Consumer Price Index (measure for
inflation) to assess the real rate of return from an investment
in the Contract. Unmanaged indices may assume the reinvestment
of dividends but generally do not reflect deductions for
administrative and management costs and expenses.
Performance information for any Division reflects only the
performance of a hypothetical Contract under which the
Accumulation Value is allocated to a Division during a particular
time period on which the calculations are based. Performance
information should be considered in light of the investment
objectives and policies, characteristics and quality of the
portfolio of the Series of the respective Fund in which the
Division 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 return for the Divisions, see
the Statement of Additional Information.
Reports and promotional literature may also contain other
information including the ranking of any Division derived from
rankings of variable annuity separate accounts or other
investment products tracked by Lipper Analytical Services or by
rating services, companies, publications, or other persons who
rank separate accounts or other investment products on overall
performance or other criteria.
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INTRODUCTION
The following information describes the Contract and the
Accounts which fund the Contract, Account NY-B and the Fixed
Account. Account NY-B invests in mutual fund portfolios of the
Funds. The Fixed Account contains all of the assets that support
Owner Fixed Allocations which we credit with Guaranteed Interest
Rates for the Guarantee Periods you select.
First Golden
First Golden American Life Insurance Company of New York
("First Golden" or the "Company") is a stock life insurance
company organized under the laws of the State of New York. First
Golden is a wholly owned subsidiary of Golden American Life
Insurance Company. Golden American Life Insurance Company, in
turn, is an indirect wholly owned subsidiary of the Equitable of
Iowa Companies, a holding company for Equitable Life Insurance
Company of Iowa, USG Annuity & Life Company, Locust Street
Securities, Inc. And Equitable Investment Services, Inc.
(AEISI@), EIC Variable, Inc., and Directed Services, Inc.
("DSI"). As of September 30, 1996, Equitable of Iowa had over
$[10.x] billion in assets. As of ___________, 1996, First Golden
had approximately __ million in total assets. First Golden is
authorized to do business only in the State of New York. First
Golden offers variable annuities.
The ESS Trust, the Travelers Series Fund and the Smith Barney
Series Fund
The Travelers Series Fund and the Smith Barney Series Fund
are open-end management investment companies, more commonly
called mutual funds. The Travelers Series Fund and the Smith
Barney Series Fund shares may also be available to other separate
accounts funding variable insurance products offered by First
Golden. This is called "mixed funding."
The Travelers Series Fund and the Smith Barney Series Fund
may also sell their shares to separate accounts of other
insurance companies, both affiliated and not affiliated with
First Golden. This is called "shared funding." Although we do
not anticipate any inherent difficulties arising from either
mixed or shared funding, it is theoretically possible that, due
to differences in tax treatment or other considerations, the
interest of Owners of various Contracts participating in the
Travelers Series Fund or the Smith Barney Series Fund might at
sometime be in conflict. The Board of the Travelers Series Fund
and the Smith Barney Series Fund and we and any other insurance
companies participating in the Travelers Series Fund or the Smith
Barney Series Fund are required to monitor events to identify any
material conflicts that arise from the use of the Travelers
Series Fund or the Smith Barney Series Fund for mixed and/or
shared funding or between various policy Owners and pension and
retirement plans. For more information about the risks of mixed
and shared funding, please refer to the Travelers Series Fund and
the Smith Barney Series Fund prospectuses.
The ESS Trust is also an open-end management investment
company. Currently, the ESS Trust's shares are not available to
separate accounts of other insurance companies except
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affiliated
insurance companies such as First Golden. It is anticipated that
in the future the ESS Trust will become available to separate
accounts of unaffiliated companies
You will find complete information about the ESS Trust, the
Travelers Series Fund, and the Smith Barney Series Fund including
the risks associated with each Series, in the accompanying Funds'
prospectuses. You should read them carefully in conjunction with
this prospectus before investing. Additional copies of the
Funds' prospectuses may be obtained by contacting our Customer
Service Center.
Separate Account NY-B
All obligations under the Contract are general obligations
of First Golden. Account NY-B is a separate investment account
used to support our variable annuity Contracts and for other
purposes as permitted by applicable laws and regulations. The
assets of Account NY-B are kept separate from our general account
and any other separate accounts we may have. We may offer other
variable annuity Contracts investing in Account NY-B which are
not discussed in this prospectus. Account NY-B may also invest
in other series which are not available to the Contract described
in this prospectus.
We own all the assets in Account NY-B. Income and realized
and unrealized gains or losses from assets in the account are
credited to or charged against that account without regard to
other income, gains or losses in our other investment accounts.
As required, the assets in Account NY-B are at least equal to the
reserves and other liabilities of that account. These assets may
not be charged with liabilities from any other business we
conduct.
They may, however, be subject to liabilities arising from
Divisions whose assets are attributable to other variable annuity
Contracts supported by Account NY-B. If the assets exceed the
required reserves and other liabilities, we may transfer the
excess to our general account.
Account NY-B was established on _____________, 1996 to
invest in mutual funds, unit investment trusts or other
investment portfolios which we determine to be suitable for the
Contract's purposes. Account NY-B is treated as a unit
investment trust under Federal securities laws. It is registered
with the SEC under the Investment Company Act of 1940 (the "1940
Act") as an investment company and meets the definition of a
separate account under the Federal securities laws. It is
governed by the laws of the state of New York, our state of
domicile. Registration with the SEC does not involve any
supervision by the SEC of the management or investment policies
or practices of Account NY-B.
Account NY-B Divisions
Account NY-B is divided into Divisions. Currently, each
Division of Account NY-B offered under this prospectus invests in
a portfolio of the ESS Trust, Travelers Series Fund or the Smith
Barney Series Fund. EISI serves as the Manager to each Series of
the ESS Trust, and SBMFM serves as Manager to each Series of the
Travelers Series Fund and the Smith Barney
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Series Fund. See the
Funds' prospectuses for details. The ESS Trust, and EISI have
retained several portfolio managers to manage the assets of each
Series of the Trust. There may be restrictions on the amount of
the allocation to certain Divisions based on state laws and
regulations. The investment objectives of the various Series in
the Funds are described below. There is no guarantee that any
portfolio or Series will meet its investment objectives. Meeting
objectives depends on various factors, including, in certain
cases, how well the portfolio managers anticipate changing
economic and market conditions.
EISI and SBMFM provide the overall business management and
administrative services necessary for the Series' operation and
provide or procure the services and information necessary to the
proper conduct of the business of the Series. See the Funds'
prospectuses for details.
Each Fund pays its respective Manager for its services a
fee, payable monthly, based on the annual rates of the average
daily net assets of the Series shown in the fee tables. EISI and
SBMFM (and not the Funds) pay each portfolio manager a monthly
fee for managing the assets of the Series.
ESS Trust
The ESS Trust is one of the funding vehicles for the
Contracts. The Trust is managed by EISI which is a wholly-owned
subsidiary of the Equitable of Iowa Companies. EISI has retained
a Sub-Adviser for the OTC, Research and Total Return Portfolios
to make investment decisions and place orders. The Sub-Adviser
for the Portfolios is Massachusetts Financial Services Company.
See "Management of the Trust" in the ESS Trust Prospectus, which
accompanies this Prospectus, for additional information
concerning EISI and the Sub-Adviser, including a description of
advisory and sub-advisory fees. Purchasers should read this
Prospectus and the Prospectus for the Trust carefully before
investing.
The Trust is an open-end management investment company.
While a brief summary of the investment objectives of the
available Portfolios is set forth below, more comprehensive
information, including a discussion of potential risks, is found
in the current Prospectus for the ESS Trust which is included
with this Prospectus. Additional Prospectuses and the Statement
of Additional Information can be obtained by calling or writing
the Company's Administrative Office.
The investment objectives of the Portfolios are as follows:
OTC Portfolio. The investment objective of the OTC
Portfolio is to seek to obtain long-term growth of capital. The
Portfolio seeks to achieve its objective by investing at least
65% of its total assets, under normal circumstances, in
securities principally traded on the over-the-counter (OTC)
securities market.
Research Portfolio. The Research Portfolio seeks to provide
long-term growth of capital and future income by investing a
substantial portion of its assets in the common stocks or
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securities convertible into common stocks of companies believed
to possess better than average prospects for long-term growth. A
smaller proportion of the assets may be invested in bonds, short-
term obligations, preferred stocks or common stocks whose
principal characteristic is income production rather than growth.
The portfolio securities of the Research Portfolio are selected
by the investment research analysts in the Equity Research Group
of the Sub-Adviser. The Portfolio's assets are allocated to
industry groups (e.g. within the health care sector, the managed
care, drug and medical supply industries). The allocation by
sector and industry is determined by the analysts acting together
as a group.
Total Return Portfolio. The Total Return Portfolio
primarily seeks to obtain above-average income (compared to a
portfolio entirely invested in equity securities) consistent with
the prudent employment of capital. While current income is the
primary objective, the Portfolio believes that there should also
be a reasonable opportunity for growth of capital and income
since many securities offering a better than average yield may
also possess growth potential. Generally, at least 40% of the
Portfolio's assets will be invested in equity securities.
Travelers Series Fund
The Travelers Series Fund is an investment company
underlying certain variable annuity and variable life insurance
contracts. The Fund is managed by SBMFM. SBMFM is a wholly-
owned subsidiary of Smith Barney Holdings Inc. Smith Barney
Holdings Inc. is a wholly-owned subsidiary of Travelers Group
Inc. which is a financial services holding company engaged,
through its subsidiaries, principally in four business segments:
investment services, consumer finance services, life insurance
services and property & casualty insurance services.
While a brief summary of the investment objectives is set
forth below, more comprehensive information, including a
discussion of potential risks, is found in the current Prospectus
for the Fund, which is included with this Prospectus. Additional
Prospectuses and the Statement of Additional Information can be
obtained by calling or writing the Company's Administrative
Office.
The Fund is intended to meet differing investment objectives
with its currently available separate Portfolios.
The investment objectives of the Portfolios are as follows:
Income and Growth Portfolio. The Income and Growth
Portfolio seeks current income and long-term growth of income and
capital by investing primarily, but not exclusively, in common
stocks. The Portfolio invests primarily in common stocks
offering a current return from dividends and in interest-paying
debt obligations (such as U.S. Government Securities, investment
grade bonds and debentures) and high quality short-term debt
obligations (such as commercial paper and repurchase agreements
collateralized by U.S. Government Securities with broker/dealers
or other financial institutions.)
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International Equity Portfolio. The International Equity
Portfolio seeks total return on its assets from growth of capital
and income. The Portfolio seeks to achieve its objective by
investing at least 65% of its assets in a diversified portfolio
of equity securities of established non-U.S. issuers. Investing
in foreign securities generally involves risks not ordinarily
associated with investing in securities of domestic issuers.
Purchasers are cautioned to read "Special Investment Techniques
and Risk Considerations -- Foreign Securities" in the Fund
Prospectus.
High Income Portfolio. The High Income Portfolio seeks high
current income. Capital appreciation is a secondary objective.
The Portfolio seeks to achieve its investment objectives by
investing, under normal circumstances, at least 65% of its assets
in high-yielding corporate debt obligations and preferred stock.
The Portfolio invests significantly in lower grade corporate debt
securities, which are commonly known as "junk bonds" and involve
a significant degree of risk. (See "The Fund's Investment Program
- -- Smith Barney High Income Portfolio" in the Fund Prospectus.)
Prior to investing in this Portfolio, Contact owners are
cautioned to read the section entitled "Special Investment
Techniques and Risk Considerations -- Lower-Quality and Non-Rated
Securities" in the Fund Prospectus. The Portfolio may invest up
to 20% of its assets in the securities of foreign issuers that
are denominated in currencies other than the U.S. dollar and may
invest without limitation in securities of foreign issuers that
are denominated in U.S. dollars. Investing in foreign securities
generally involves risks not ordinarily associated with investing
in securities of domestic issuers. Contract owners are cautioned
to read "Special Investment Techniques and Risk Considerations --
Foreign Securities" in the Fund Prospectus.
Money Market Portfolio. The Money Market Portfolio seeks
maximum current income and preservation of capital. The
Portfolio seeks to achieve its objectives by investing in bank
obligations and high quality commercial paper, corporate
obligations and municipal obligations, in addition to U.S.
Government Securities and related repurchase agreements. An
investment in this Portfolio is neither insured nor guaranteed by
the U.S. Government. In addition, there is no assurance that the
Portfolio will be able to maintain a stable net asset value of
$1.00 per share.
Smith Barney Series Fund
The Smith Barney Series Fund is a diversified, open-end
management investment company. SBMFM is the investment adviser
to the Appreciation Portfolio (see "Travelers Series Fund" above
information pertaining to SBMFM).
The Smith Barney Series Fund has ten Portfolios, [four] of
which are currently available in connection with the Contracts.
While a brief summary of the investment objective is set forth
below, more comprehensive information, including a discussion of
potential risks, is found in the current Prospectus for Smith
Barney Series Fund, which is included with this Prospectus.
Additional Prospectuses and the Statement of Additional
Information can be obtained by calling or writing the Company's
Administrative Office.
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The investment objective of the Portfolios are as follows:
Appreciation Portfolio. The Appreciation Portfolio's goal
is long-term appreciation of capital. The Portfolio will attempt
to achieve its goal by investing primarily in equity and equity-
related securities that are believed to afford attractive
opportunities for appreciation. Under normal market conditions,
substantially all -- but not less than 65% -- of the Portfolio's
assets will consist of common stocks, but the Portfolio also may
hold securities convertible into common stocks and warrants.
Equity Income Portfolio. The Equity Income Portfolio's
primary goal is current income. Long-term capital appreciation
is a secondary goal. The Portfolio will seek to achieve its
goals principally through investment in dividend-paying common
stocks of companies whose prospects for dividend growth and
capital appreciation are considered favorable by SBMFM. The
Portfolio will normally invest at least 65% of its assets in
equity securities. Under normal circumstances, the Portfolio
will concentrate at lest 25% of its assets in equity and debt
securities of companies in the utilities industry.
Equity Index Portfolio. The Equity Index Portfolio's goal
is to provide investment results that, before deduction of
operating expenses, match the price and yield performance of U.S.
publicly traded common stocks, as measured by the Standard &
Poor's 500 Composite Stock Price Index (AS&P 500"). Once the
Portfolio reaches a sufficient asset size, it will seek to
achieve its goal by owning all 500 stocks in the S&P 500 in
proportion to their actual market capitalization weightings. The
Portfolio will be reviewed daily and will be adjusted, when
necessary, to maintain security weightings as close to those of
the S&P 500 as possible, given the amount of assets in the
Portfolio at that time.
Intermediate High Grade Portfolio. The Intermediate High
Grade Portfolio's goal is to provide as high a level of current
income as is consistent with the protection of capital. The
Portfolio will seek to achieve its goal by investing, under
normal circumstances, substantially all
- -but not less than 65% - of its assets in U.S. government
securities and high-grade corporate bonds of U.S. issuers.
Changes Within Account NY-B
We may from time to time make additional Divisions
available. These Divisions will invest in investment portfolios
we find suitable for the Contract. We also have the right to
eliminate investment Divisions from Account NY-B, to combine two
or more Divisions, or to substitute a new portfolio for the
portfolio in which a Division invests. A substitution may become
necessary if, in our judgment, a portfolio no longer suits the
purposes of the Contract. This may happen due to a change in
laws or regulations, or a change in a portfolio's investment
objectives or restrictions, or because the portfolio is no longer
available for investment, or for some other reason. In addition,
we reserve the right to transfer assets of Account NY-B, which we
determine to be associated with the class of Contracts to which
your Contract belongs, to another account. If necessary, we will
get prior approval from the insurance department of our
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state of
domicile before making such a substitution or transfer. We will
also get any required approval from the SEC and any other
required approvals before making such a substitution or transfer.
We will notify you as soon as practicable of any proposed
changes.
When permitted by law, We reserve the right to:
(1) deregister Account NY-B under the 1940 Act;
(2) operate Account NY-B as a management company under the
1940 Act if it is operating as a unit investment trust;
(3) operate Account NY-B as a unit investment trust under
the 1940 Act if it is operating as a managed separate
account;
(4) restrict or eliminate any voting rights as to Account
B; and
(5) combine Account NY-B with other accounts.
The Fixed Account
Premium payments may be allocated to the Fixed Account at
the time of the Initial Premium payment or as subsequently made.
In addition, all or part of your Accumulation Value may be
transferred to the Fixed Account. Assets supporting amounts
allocated to the Fixed Account are available to fund the claims
of all classes of our customers, Owners and other creditors.
Interests under your Contract relating to the Fixed Account are
registered under the Securities Act of 1933, but the Fixed
Account is not registered under the 1940 Act.
Selecting a Guarantee Period
You may select one or more Fixed Allocations with specified
Guarantee Periods for investment. We currently offer
Guarantee Periods with durations of 1, 3, 5, 7 and 10 years.
We reserve the right at any time to decrease or increase the
number of Guarantee Periods offered. Not all Guarantee
Periods may be available for new allocations. Each Fixed
Allocation will have a Maturity Date corresponding to the
last day of the calendar month of the applicable Guarantee
Period.
Your Accumulation Value in the Fixed Account equals the sum
of your Fixed Allocations plus the interest credited
thereto, as adjusted for any partial withdrawals,
reallocations or other charges we may impose. Your Fixed
Allocation will be credited with the Guaranteed Interest
Rate in effect on the date we receive and accept your
premium or reallocation of Accumulation Value. The
Guaranteed Interest Rate will be credited daily to yield the
quoted Guaranteed Interest Rate.
Guaranteed Interest Rates
Each Guarantee Period will have an interest rate that is
guaranteed. We do not have a specific formula for
establishing the Guaranteed Interest Rates for the different
Guarantee Periods. The determination made will be
influenced by, but not necessarily correspond
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to, interest
rates available on fixed income investments which we may
acquire with the amounts we receive as premium payments or
reallocations of Accumulation Value under the Contracts.
These amounts will be invested primarily in investment-grade
fixed income securities including: securities issued by the
United States Government or its agencies or
instrumentalities, which issues may or may not be guaranteed
by the United States Government; debt securities that have
an investment grade rating, at the time of purchase, within
the four highest grades assigned by Moody's Investor
Services, Inc. (Aaa, Aa, A or Baa), Standard & Poor's
Ratings Group (AAA, AA, A or BBB) or any other nationally
recognized rating service; mortgage-backed securities
collateralized by the Federal Home Loan Mortgage
Association, the Federal National Mortgage Association or
the Government National Mortgage Association, or that have
an investment grade rating at the time of purchase within
the four highest grades described above; other debt
investments; commercial paper; and cash or cash equivalents.
You will have no direct or indirect interest in these
investments. We will also consider other factors in
determining the Guaranteed Interest Rates, including
regulatory and tax requirements, sales commissions and
administrative expenses borne by us, general economic trends
and competitive factors. We cannot predict or guarantee the
level of future interest rates. However, no Fixed
Allocation will ever have a Guaranteed Interest Rate of less
than 3% per year.
While the foregoing generally describes our investment
strategy with respect to the Fixed Account, we are not
obligated to invest according to any particular strategy,
except as may be required by New York and other state
insurance laws.
Transfers From a Fixed Allocation
You may transfer your Accumulation Value from a Fixed
Allocation to one or more new Fixed Allocations with new
Guarantee Periods of any length offered by us or to the
Divisions of Account NY-B. Unless you specify in writing
the Fixed Allocations from which such transfers will be
made, we will transfer amounts from the Fixed Allocations
starting with the Guarantee Period nearest its Maturity
Date, until we have honored your transfer request.
Transfers from a Fixed Allocation made within 30 days prior
to the Maturity Date of the applicable Guarantee Period or
pursuant to the dollar cost averaging program will not be
subject to a Market Value Adjustment. All other transfers
from your Fixed Allocations will be subject to a Market
Value Adjustment. The minimum amount that can be
transferred to or from any Fixed Allocation is $250. If a
transfer request would reduce the Accumulation Value
remaining in your Fixed Allocation to less than $250, we
will treat such transfer request as a request to transfer
the entire Accumulation Value in such Fixed Allocation.
At the end of a Fixed Allocation's Guarantee Period, you may
transfer amounts in that Fixed Allocation to the Divisions
and one or more new Fixed Allocations with Guarantee
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Periods
of any length then offered by us. You may not, however,
transfer amounts to any Fixed Allocation with a Guarantee
Period that extends beyond your Annuity Commencement Date.
At least 30 calendar days prior to a Maturity Date of any of
your Fixed Allocations, or earlier if required by state law,
we will send you a notice of the Guarantee Periods then
available. Prior to the Maturity Date of your Fixed
Allocations you must notify us as to which Division or new
Guarantee Period you have selected. If timely instructions
are not received, we will transfer your Accumulation Value
in the maturing Fixed Allocation to a Fixed Allocation with
a Guarantee Period equal in length to the expiring Guarantee
Period. If such Guarantee Period is not available or
extends beyond your annuity commencement date, we will
transfer your Accumulation Value in the maturing Fixed
Allocation to the next shortest Guarantee Period which does
not extend beyond the Annuity Commencement Date. If no such
Guarantee Period is available, we will transfer your
Accumulation Value to the Specially Designated Division.
Partial Withdrawals from a Fixed Allocation
Prior to the Annuity Commencement Date and while your
Contract is in effect, you may take partial withdrawals from
the Accumulation Value in a Fixed Allocation by sending
satisfactory notice to our Customer Service Center. You may
make systematic withdrawals of interest earnings only from a
Fixed Allocation under our Systematic Partial Withdrawal
Option. (See, Partial Withdrawals, Systematic Partial
Withdrawal Option.) Systematic withdrawals from a Fixed
Allocation are not permitted if such Fixed Allocation
participates in the dollar cost averaging program.
Withdrawals from a Fixed Allocation taken within 30 days
prior to the Maturity Date and systematic withdrawals are
not subject to a Market Value Adjustment; however, a
surrender charge may be imposed. Withdrawals may have
federal income tax consequences, including a 10% penalty
tax. See Surrender Charge, Surrender Charge for Excess
Partial Withdrawals and Federal Tax Considerations.
If you specify a Fixed Allocation from which your partial
withdrawal will be made, we will assess the partial
withdrawal against that Fixed Allocation. If you do not
specify the investment option from which the partial
withdrawal will be taken, we will not assess your partial
withdrawal against any Fixed Allocations unless the partial
withdrawal exceeds the Accumulation Value in the Divisions
of Account NY-B. If there is no Accumulation Value in those
Divisions, partial withdrawals will be deducted from your
Fixed Allocations starting with the Guarantee Periods
nearest their Maturity Dates until we have honored your
request.
Market Value Adjustment
We will apply a Market Value Adjustment, determined by
application of the formula described below, in the following
circumstances: (i) whenever you make a withdrawal or
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transfer from a Fixed Allocation, other than withdrawals or
transfers made within 30 days prior to the Maturity Date of
the applicable Guarantee Period, systematic partial
withdrawals, or pursuant to the dollar cost averaging
program; and (ii) on the Annuity Commencement Date with
respect to any Fixed Allocation having a Guarantee Period
that does not end on or within 30 days after the annuity
commencement date.
The Market Value Adjustment is determined by multiplying the
amount withdrawn, transferred or annuitized by the following
factor:
((1+i)/(1+j+.0025)^(N/365)-1
Where "I" is the Index Rate for a Fixed Allocation as of the
first day of the applicable Guarantee Period; "J" is the
Index Rate for new Fixed Allocations with Guarantee Periods
equal to the number of years remaining in the Guarantee
Period at the time of the withdrawal, transfer or
annuitization; and "N" is the remaining number of days in
the Guarantee Period at the time of the withdrawal, transfer
or annuitization.
The Index Rate is the average of the Ask Yields for U.S.
Treasury Strips as reported by a national quoting service
for the applicable maturity. The average currently is based
on the period from the 22nd day of the calendar month two
months prior to the calendar month of the Index Rate
determination to the 21st day of the calendar month
immediately prior to the month of determination. The
applicable maturity is the maturity date for these U.S.
Treasury Strips on or next following the last day of the
Guarantee Period. If the Ask Yields are no longer
available, the Index Rate will be determined using a
suitable replacement method approved where required.
We currently calculate the Index Rate once each calendar
month. However, we reserve the right to calculate the Index
Rate more frequently than monthly, but in no event will such
Index Rate be based upon a period of less than 28 days.
The Market Value Adjustment may result in either an increase
or decrease in the Accumulation Value of your Fixed
Allocation. If a full surrender, transfer or annuitization
from the Fixed Allocation has been requested, the balance of
the Market Value Adjustment will be added to or subtracted
from the amount surrendered, transferred or annuitized. If
a partial withdrawal, transfer or annuitization has been
requested, the Market Value Adjustment will be calculated on
the total amount that must be withdrawn, transferred or
annuitized in order to provide the amount requested. If a
negative Market Value Adjustment exceeds the Accumulation
Value in the Fixed Allocation, such transaction will be
considered a full surrender, transfer or annuitization. The
Appendix contains several examples which illustrate the
application of the Market Value Adjustment.
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Because of the Market Value Adjustment provision of the
Contract, you bear the investment risk that the Guaranteed
Interest Rates offered by us at the time you make a
withdrawal or transfer from a Fixed Allocation or start
receiving annuity payments may be higher or lower than the
Guaranteed Interest Rate of the Fixed Allocation to which
the Market Value Adjustment is applied, with the result that
the Accumulation Value of your Fixed Allocation may be
substantially reduced or increased. This will depend on the
relationship of (1) the initial Index Rate, applicable at
the time the allocation is made, on the Fixed Allocation
from which the withdrawal, transfer or annuitization is made
to (2) the current Index Rate offered by us for the
Guarantee Period equal to the number of years remaining in
the Guarantee Period as of such date. If the initial Index
Rate of (1) is higher than the then current Index Rate of
(2) plus .0025, application of the Market Value Adjustment
will result in an increase in your Accumulation Value. If
the Index Rate of (1) is lower than the then current Index
Rate of (2) plus .0025, application of the Market Value
Adjustment will result in a decrease in your Accumulation
Value.
FACTS ABOUT THE CONTRACT
The Owner
You are the Owner. You are also the Annuitant unless
another Annuitant is named in the application. You have the
rights and options described in the Contract. One or more
persons may own the Contract. If there are multiple Owners
named, the age of the oldest Owner shall determine the applicable
death benefit.
Death of an Owner activates the death benefit provision. In
the case of a sole Owner who dies prior to the annuity
commencement date, we will pay the Beneficiary the death benefit
when due. The sole Owner's estate will be the Beneficiary if no
Beneficiary designation is in effect, or if the designated
Beneficiary has predeceased the Owner. In the case of a joint
Owner of the Contract dying prior to the annuity commencement
date, we will designate the surviving Owner(s) as the
Beneficiary(ies). This supersedes any previous Beneficiary
designation.
In the case where the Owner is a trust and a beneficial
Owner of the trust has been designated, the beneficial Owner will
be treated as the Owner of the Contract solely for the purpose of
determining the death benefit provisions. If a beneficial Owner
is changed or added after the Contract Date, this will be treated
as a change of Owner for purposes of determining the death
benefit. See Change of Owner or Beneficiary. If no beneficial
Owner of the Trust has been designated, the availability of
enhanced death benefits will be determined by the age of the
Annuitant at issue.
The Annuitant
The Annuitant is the person designated by the Owner to be
the measuring life in determining Annuity Payments. The Owner
will receive the annuity benefits of the Contract if
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the
Annuitant is living on the Annuity Commencement Date. If the
Annuitant dies before the Annuity Commencement Date, and a
contingent Annuitant has been named, the contingent Annuitant
becomes the Annuitant (unless the Owner is not an individual, in
which case the death benefit becomes payable). Once named, the
Annuitant may not be changed at any time.
If there is no contingent Annuitant when the Annuitant dies
prior to the Annuity Commencement Date, the Owner will become the
Annuitant. The Owner may designate a new Annuitant within 60
days of the death of the Annuitant.
If there is no contingent Annuitant when the Annuitant dies
prior to the Annuity Commencement Date and the Owner is not an
individual, we will pay the Beneficiary the death benefit then
due. The Beneficiary will be as provided in the Beneficiary
designation then in effect. If no Beneficiary designation is in
effect, or if there is no designated Beneficiary living, the
Owner will be the Beneficiary. If the Annuitant was the sole
Owner and there is no Beneficiary designation, the Annuitant's
estate will be the Beneficiary.
Regardless of whether a death benefit is payable, if the
Annuitant dies and any Owner is not an individual, such death
will trigger application of the distribution rules imposed by
Federal tax law.
The Beneficiary
The Beneficiary is the person to whom we pay death benefit
proceeds and who becomes the successor Owner if the Owner dies
prior to the annuity commencement date. We pay death benefit
proceeds to the primary Beneficiary (unless there are joint
Owners, in which case death proceeds are payable to the surviving
Owner(s)). See Proceeds Payable to the Beneficiary.
If the Beneficiary dies before the Annuitant or Owner, the
death benefit proceeds are paid to the contingent Beneficiary, if
any. If there is no surviving Beneficiary, we pay the death
benefit proceeds to the Owner's estate.
One or more persons may be named as Beneficiary or
contingent Beneficiary. In the case of more than one
Beneficiary, unless otherwise specified, we will assume any death
benefit proceeds are to be paid in equal shares to the surviving
beneficiaries.
You have the right to change beneficiaries during the
Annuitant's lifetime unless you have designated an irrevocable
Beneficiary. When an irrevocable Beneficiary has been
designated, you and the irrevocable Beneficiary may have to act
together to exercise certain rights and options under the
Contract.
Change of Owner or Beneficiary
During the Annuitant's lifetime and while your Contract is
in effect, you may transfer ownership of the Contract (if
purchased in connection with a non-qualified plan) subject to our
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published rules at the time of the change. A change in Ownership
may affect the amount of the death benefit and the guaranteed
death benefit. You may also change the Beneficiary. To make
either of these changes, you must send us written notice of the
change in a form satisfactory to us. The change will take effect
as of the day the notice is signed. The change will not affect
any payment made or action taken by us before recording the
change at our Customer Service Center. See Federal Tax
Considerations, Transfer of Annuity Contracts, and Assignments.
Availability of the Contract
We can issue a Contract if both the Annuitant and the Owner
are not older than age 85.
Types of Contracts
Qualified Contracts
The Contract may be issued as an Individual Retirement
Annuity or in connection with an individual retirement
account. In the latter case, the Contract will be issued
without an Individual Retirement Annuity endorsement, and
the rights of the participant under the Contract will be
affected by the terms and conditions of the particular
individual retirement trust or custodial account, and by
provisions of the Code and the regulations thereunder. For
example, the individual retirement trust or custodial
account will impose minimum distribution rules, which may
require distributions to commence not later than April 1st
of the calendar year following the calendar year in which
you attain age 70 1/2. For both Individual Retirement
Annuities and individual retirement accounts, the minimum
Initial Premium is $1,500.
IF THE CONTRACT IS PURCHASED TO FUND A QUALIFIED PLAN,
DISTRIBUTION MUST COMMENCE NOT LATER THAN APRIL 1ST OF THE
CALENDAR YEAR FOLLOWING THE CALENDAR YEAR IN WHICH YOU ATTAIN AGE
70 1/2. IF YOU OWN MORE THAN ONE QUALIFIED PLAN, YOU SHOULD CONSULT
YOUR TAX ADVISOR.
Non-qualified Contracts
The Contract may fund any non-qualified plan. Non-qualified
Contracts do not qualify for any tax-favored treatment other
than the benefits provided for by annuities.
Your Right to Select or Change Contract Options
Before the Annuity Commencement Date, you may change the
Annuity Commencement Date, frequency of Annuity Payments or the
Annuity Option by sending a written request to our Customer
Service Center. The Annuitant may not be changed at any time.
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Premiums
You purchase the Contract with an Initial Premium. After
the end of the Free Look Period, you may make additional premium
payments. See Making Additional Premium Payments. The minimum
Initial Premium is $10,000 for a non-qualified Contract and
$1,500 for a qualified Contract.
You must receive our prior approval before making a premium
payment that causes the Accumulation Value of all annuities that
you maintain with us to exceed $1,000,000. We may change the
minimum initial or additional premium requirements for certain
group or sponsored arrangements. See Group or Sponsored
Arrangements.
Qualified Plans
For IRA Contracts, the annual premium on behalf of any
individual Contract may not exceed $2,000. Provided your
spouse does not make a contribution to an IRA, you may set
up a spousal IRA even if your spouse has earned some
compensation during the year. The maximum deductible amount
for a spousal IRA program is the lesser of $2,250 or 100% of
your compensation reduced by the contribution (if any) made
by you for the taxable year to your own IRA. However, no
more than $2,000 can go to either your or your spouse's IRA
in any one year. For example, $1,750 may go to your IRA and
$500 to your spouse's IRA. These maximums are not
applicable if the premium is the result of a rollover from
another qualified plan.
Where to Make Payments
Remit premium payments to our Customer Service Center. The
address is shown on the cover. We will send you a
confirmation notice.
Making Additional Premium Payments
You may make additional premium payments after the end of
the Free Look Period. We can accept additional premium payments
until either the Annuitant or Owner reaches the Attained Age of
85 under non-qualified plans. For qualified plans, no
contributions may be made to an IRA Contract for the taxable year
in which you attain age 70 1/2 and thereafter (except for rollover
contributions). The minimum additional premium payment we will
accept is $500 for a non-qualified plan and $250 for a qualified
plan.
Crediting Premium Payments
The Initial Premium will be accepted or rejected within two
business days of receipt by us if accompanied by information
sufficient to permit us to determine if we are able to issue a
Contract. We may retain an Initial Premium for up to five
business days while attempting to obtain information sufficient
to enable us to issue the Contract. If we are unable to do so
within
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five business days, the applicant will be informed of the
reasons for the delay and the Initial Premium will be returned
immediately unless the applicant consents to our retaining the
Initial Premium until we have received the information we
require. Thereafter, all additional premiums will be accepted on
the day received.
We will also accept, by agreement with broker-dealers and
when permissible in a state, transmittal of initial and
additional premium payments by wire order from the broker-dealer
to our Customer Service Center. Such transmittals must be
accompanied by a simultaneous facsimile transmission of an
application. Contact our Customer Service Center to find out
about state availability and broker-dealer requirements.
Upon our acceptance of premium payments received via wire
order and accompanied by a facsimile of an application, we will
issue the Contract, allocate the premium payment according to
your instructions, and invest the payment at the value next
determined following receipt. See Restrictions on Allocation of
Premium Payments. Wire orders not accompanied by an application
may be retained for up to five business days while we attempt to
obtain information sufficient to enable us to issue the Contract.
If we are unable to do so, our Customer Service Center will
inform the broker-dealer, on behalf of the applicant, of the
reasons for the delay and return the premium payment immediately
to the broker-dealer for return to the applicant, unless the
applicant specifically consents to allow us to retain the premium
payment until our Customer Service Center receives the
application.
On the date we receive and accept your initial or additional
premium payment:
(1) We allocate the Initial Premium among the Divisions and
Fixed Allocations according to your instructions,
subject to any restrictions. See Restrictions on
Allocation of Premium Payments. For additional premium
payments, the Accumulation Value will increase by the
amount of the premium. If we do not receive
instructions from you, the increase in the Accumulation
Value will be allocated among the Divisions in
proportion to the amount of Accumulation Value in each
Division as of the date we receive and accept the
additional premium payment. If there is no
Accumulation Value in the Divisions, the increase in
the Accumulation Value will be allocated to a Fixed
Allocation with the shortest Guarantee Period then
available.
(2) For an Initial Premium, we calculate your applicable
death benefit. When an additional premium payment is
made, we increase your applicable death benefit in
accordance with the death benefit option in effect for
your Contract.
Following receipt and acceptance of the application, and
investment of the premium payment, we will issue the Contract.
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Restrictions on Allocation of Premium Payments
We may require that an Initial Premium designated for a
Division of Account NY-B be allocated to the Specially Designated
Division during the Free Look Period for Initial Premiums
received. After the free look period, if your Initial Premium
was allocated to the Specially Designated Division, we will
transfer the Accumulation Value to the Divisions you previously
selected based on the index of investment experience next
computed for each Division. See Facts About the Contract,
Measurement of Investment Experience, Index of Investment
Experience and Unit Value. Initial premiums designated for the
Fixed Account will be allocated to a Fixed Allocation with the
Guarantee Period you have chosen.
Your Right to Reallocate
You may reallocate your Accumulation Value among the
Divisions and Fixed Allocations at the end of the free look
period. We currently do not assess a charge for allocation
changes made during a Contract Year. We reserve the right,
however, to assess a $25 charge for each allocation change after
the twelfth allocation change in a Contract Year. We require
that each reallocation of your Accumulation Value equal at least
$250 or, if less, your entire Accumulation Value within a
Division or Fixed Allocation. We reserve the right to limit,
upon notice, the maximum number of reallocations you may make
within a Contract Year. In addition, we reserve the right to
defer the reallocation privilege at any time we are unable to
purchase or redeem shares of the ESS Trust, the Travelers Series
Fund or the Smith Barney Series Fund. We also reserve the right
to modify or terminate your right to reallocate your Accumulation
Value at any time in accordance with applicable law.
Reallocations from the Fixed Account are subject to the Market
Value Adjustment unless taken as part of the dollar cost
averaging program or within 30 days prior to the Maturity Date of
the applicable Guarantee Period. To make a reallocation change,
you must provide us with satisfactory notice at our Customer
Service Center.
We reserve the right to limit the number of reallocations of
your Accumulation Value among the Divisions and Fixed Allocations
or refuse any reallocation request if we believe that: (a)
excessive trading by you or a specific reallocation request may
have a detrimental effect on unit values or the share prices of
the underlying Series; or (b) we are informed by the ESS Trust,
the Travelers Series Fund or the Smith Barney Series Fund that
the purchase or redemption of shares is to be restricted because
of excessive trading or a specific reallocation or group of
reallocations is deemed to have a detrimental effect on share
prices of the ESS Trust, the Travelers Series Fund or the Smith
Barney Series Fund.
Where permitted by law, we may accept your authorization of
third party reallocation on your behalf, subject to our rules.
We may suspend or cancel such acceptance at any time. We will
notify you of any such suspension or cancellation. We may
restrict the Divisions and Fixed Allocations that will be
available to you for reallocations of premiums during any period
in which you authorize such third party to act on your behalf.
We will give you prior notification of any such restrictions.
However, we will not enforce such restrictions if we are provided
evidence
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satisfactory to us that: (a) such third party has been
appointed by a court of competent jurisdiction to act on your
behalf; or (b) such third party has been appointed by you to act
on your behalf for all your financial affairs.
Some restrictions may apply based on the free look
provisions of the state where the Contract is issued. See Your
Right to Cancel or Exchange Your Contract.
Dollar Cost Averaging
If you have at least $10,000 of Accumulation Value in the
Liquid Asset Division or a Fixed Allocation with a one year
Guarantee Period, you may elect the dollar cost averaging program
and have a specified dollar amount transferred from the Division
or such Fixed Allocation on a monthly basis.
The main objective of dollar cost averaging is to attempt to
shield your investment from short-term price fluctuations. Since
the same dollar amount is transferred to other Divisions each
month, more units are purchased in a Division if the value per
unit is low and less units are purchased if the value per unit is
high.
Therefore, a lower than average value per unit may be
achieved over the long term. This plan of investing allows
investors to take advantage of market fluctuations but does not
assure a profit or protect against a loss in declining markets.
Dollar cost averaging may be elected at issue or at a later
date. The minimum amount that may be transferred each month is
$250. The maximum amount which may be transferred is equal to
your Accumulation Value in Liquid Asset Division or a Fixed
Allocation with a one year Guarantee Period when you elect the
dollar cost averaging program, divided by 12.
The transfer date will be the same calendar day each month
as the Contract Date. The dollar amount will be allocated to the
Divisions in which you are invested in proportion to your
Accumulation Value in each Division unless you specify otherwise.
If, on any transfer date, your Accumulation Value is equal to or
less than the amount you have elected to have transferred, the
entire amount will be transferred and the program will end. You
may change the transfer amount once each Contract Year, or cancel
this program by sending satisfactory notice to our Customer
Service Center at least seven days before the next transfer date.
Any allocation under this program will not be included in
determining if the excess allocation charge will apply. We
currently do not permit transfers under the dollar cost averaging
program from Fixed Allocations with other than one year Guarantee
Periods. Transfers from a Fixed Allocation under the dollar cost
averaging program will not be subject to a Market Value
Adjustment. See, Market Value Adjustment. A Fixed Allocation
may not participate simultaneously in both the dollar cost
averaging program and the Systematic Partial Withdrawal Option.
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What Happens if a Division is Not Available
When a distribution is made from an investment portfolio
supporting a Division of Account NY-B in which reinvestment is
not available, we will allocate the distribution, unless you
specify otherwise, to the Specially Designated Division.
Such a distribution can occur when (a) an investment
portfolio matures, or (b) a distribution from a portfolio or
Division cannot be reinvested in the portfolio or Division due to
the unavailability of securities for acquisition. When an
investment portfolio matures, we will notify you in writing 30
days in advance of that date. To elect an allocation of the
distribution to other than the Specially Designated Division, you
must provide satisfactory notice to us at least seven days prior
to the date the portfolio matures. Such allocations are not
counted for purposes of the number of free allocation changes
permitted. When a distribution from a portfolio or Division
cannot be reinvested in the portfolio due to the unavailability
of securities for acquisition, we will notify you promptly after
the allocation has occurred. If, within 30 days, you allocate
the Accumulation Value from the Specially Designated Division to
other Divisions or Fixed Allocations of your choice, such
allocations will not be included in determining if the excess
allocation charge will apply.
Your Accumulation Value
Your Accumulation Value is the sum of the amounts in each of
the Divisions and the Fixed Allocations in which you are
invested, and is the amount available for investment at any time.
You select the Divisions and Fixed Allocations to which to
allocate your Accumulation Value. We adjust your Accumulation
Value on each Valuation Date to reflect the Divisions' investment
performance and interest credited to your Fixed Allocations, any
additional premium payments or partial withdrawals since the
previous Valuation Date, and on each Contract processing date to
reflect any deduction of the annual Contract fee. Your
Accumulation Value is applied to your choice of an Annuity Option
on the Annuity Commencement Date subject to our published rules
at such time. See Choosing an Income Plan.
Accumulation Value in Each Division
On the Contract Date
On the Contract Date, your Accumulation Value is allocated
to each Division as you have specified, unless the Contract
is issued in a state that requires the return of premium
payments during the Free Look Period, in which case, the
portion of your Initial Premium not allocated to a Fixed
Allocation will be allocated to the Specially Designated
Division during the Free Look Period. See Your Right to
Cancel or Exchange Your Contract.
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On Each Valuation Date
At the end of each subsequent Valuation Period, the amount
of Accumulation Value in each Division will be calculated as
follows:
(1) We take the Accumulation Value in the Division at the
end of the preceding Valuation Period.
(2) We multiply (1) by the Division's net rate of return
for the current Valuation Period.
(3) We add (1) and (2).
(4) We add to (3) any additional premium payments allocated
to the Division during the current Valuation Period.
(5) We add or subtract allocations to or from that Division
during the current Valuation Period.
(6) We subtract from (5) any partial withdrawals and any
associated charges allocated to that Division during
the current Valuation Period.
(7) We subtract from (6) the amounts allocated to that
Division for:
(a) any Contract fees; and
(b) any charge for premium taxes.
All amounts in (7) are allocated to each Division in the
proportion that (6) bears to the Accumulation Value in Account NY-
B, unless the Charge Deduction Division has been specified. See
Charges Deducted from the Accumulation Value.
Measurement of Investment Experience
Index of Investment Experience and Unit Value
The investment experience of a Division is determined on
each Valuation Date. We use an index to measure changes in
each Division's experience during a Valuation Period. We
set the index at $10 when the first investments in a
Division are made. The index for a current Valuation Period
equals the index for the preceding Valuation Period
multiplied by the experience factor for the current
Valuation Period.
We may express the value of amounts allocated to the
Divisions in terms of units. We determine the number of
units for a given amount on a Valuation Date by dividing the
dollar value of that amount by the index of investment
experience for that date. The index of investment
experience is equal to the value of a unit.
How We Determine the Experience Factor
For Divisions of Account NY-B the experience factor reflects
the investment experience of the Series of the Fund in which
a Division invests as well as the charges assessed against
the Division for a Valuation Period. The factor is
calculated as follows:
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(1) We take the net asset value of the portfolio in which
the Division invests at the end of the current Valuation
Period.
(2) We add to (1) the amount of any dividend or capital
gains distribution declared for the investment
portfolio and reinvested in such portfolio during the
current Valuation Period. We subtract from that amount
a charge for our taxes, if any.
(3) We divide (2) by the net asset value of the portfolio
at the end of the preceding Valuation Period.
(4) We subtract the applicable daily mortality and expense
risk charge from each Division for each day in the
valuation period.
(5) We subtract the daily asset based administrative charge
from each Division for each day in the valuation
period.
Calculations for Divisions investing in a Series are made on
a per share basis.
Net Rate of Return for a Division
The net rate of return for a Division during a valuation
period is the experience factor for that Valuation Period
minus one.
Cash Surrender Value
Your Contract's Cash Surrender Value fluctuates daily with
the investment results of the Divisions, interest credited to
Fixed Allocations and any Market Value Adjustment. We do not
guarantee any minimum Cash Surrender Value. On any date before
the Annuity Commencement Date while the Contract is in effect,
the cash surrender value is calculated as follows:
(1) We take the Contract's Accumulation Value;
(2) We deduct from (1) any surrender charge and any charge
for premium taxes;
(3) We deduct from (2) any charges incurred but not yet
deducted; and
(4) We adjust (3) for any Market Value Adjustment.
Surrendering to Receive the Cash Surrender Value
The Contract may be surrendered by the Owner at any time
while the Annuitant is living and before the Annuity Commencement
Date.
A surrender will be effective on the date your written
request and the Contract are received at our Customer Service
Center. The Cash Surrender Value is determined and all benefits
under the Contract will then be terminated, as of that date. You
may receive the Cash Surrender Value in a single sum payment or
apply it under one or more Annuity Options. See The Annuity
Options. We will usually pay the Cash Surrender Value within
seven days but we may delay payment. See When We Make Payments.
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Partial Withdrawals
Prior to the Annuity Commencement Date, while the Annuitant
is living and the Contract is in effect, you may take partial
withdrawals from the Accumulation Value by sending satisfactory
notice to our Customer Service Center. Unless you specify
otherwise, the amount of the withdrawal, including any surrender
charge and Market Value Adjustment, will be taken in proportion
to the amount of Accumulation Value in each Division in which you
are invested. If there is no Accumulation Value in those
Divisions, partial withdrawals will be deducted from your Fixed
Allocations starting with the Guarantee Periods nearest their
Maturity Dates until we have honored your request.
There are three options available for selecting partial
withdrawals, the Conventional Partial Withdrawal Option, the
Systematic Partial Withdrawal Option and the IRA Partial
Withdrawal Option. All three options are described below. The
maximum amount you may withdraw each Contract Year without
incurring a surrender charge is 15% of your Accumulation Value.
See Surrender Charge for Excess Partial Withdrawals. Partial
withdrawals may not be repaid. A partial withdrawal request for
an amount in excess of 90% of the Cash Surrender Value will be
treated as a request to surrender the Contract.
Conventional Partial Withdrawal Option
After the Free Look Period, you may take conventional
partial withdrawals. The minimum amount you may withdraw
under this option is $1,000. A conventional partial
withdrawal from a Fixed Allocation may be subject to a
Market Value Adjustment.
Systematic Partial Withdrawal Option
This option may be elected at the time you apply for a
Contract, or at a later date. This option may be elected to
commence in a Contract Year where a conventional partial
withdrawal has been taken. However, it may not be elected
while the IRA Partial Withdrawal Option is in effect.
You may choose to receive systematic partial withdrawals on
a monthly or quarterly basis from your Accumulation Value in the
Divisions or the Fixed Allocations. The commencement of payments
under this option may not be elected to start sooner than 28 days
after the Contract Issue Date. You select the date of the
quarter or month when the withdrawals will be made but no later
than the 28th day of the month. If no date is selected, the
withdrawals will be made on the same calendar day of each month
as the Contract Date.
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You may select a dollar amount or a percentage of the
Accumulation Value from the Divisions in which you are invested
as the amount of your withdrawal subject to the following
maximums, but in no event can a payment be less than $100:
Frequency Maximum Percentage
----------------------------
Monthly 1.25%
Quarterly 3.75%
If a dollar amount is selected and the amount to be
systematically withdrawn would exceed the applicable maximum
percentage of your Accumulation Value on the withdrawal date, the
amount withdrawn will be reduced so that it equals such
percentage. For example, if a $500 monthly withdrawal was
elected and on the withdrawal date 1.25% of the Accumulation
Value equaled $300, the withdrawal amount would be reduced to
$300. If a percentage is selected and the amount to be
systematically withdrawn based on that percentage would be less
than the minimum of $100, we would increase the amount to $100
provided it does not exceed the maximum percentage. If it is
below the maximum percentage we will send the minimum. If it is
above the maximum percentage we will send the amount and then
cancel the option. For example, if you selected 1.0% to be
systematically withdrawn on a monthly basis and that amount
equaled $90, and since $100 is less than 1.25% of the
Accumulation Value, we would send $100. If 1.0% equaled $75, and
since $100 is more than 1.25% of the Accumulation Value we would
send $75 and then cancel the option. In such a case, in order to
receive systematic partial withdrawals in the future, you would
be required to submit a new notice to our Customer Service
Center.
Systematic Partial Withdrawals from Fixed Allocations are
limited to interest earnings during the prior month or quarter,
depending on whether you have chosen a monthly or quarterly
frequency, respectively. Systematic Partial Withdrawals are not
subject to a Market Value Adjustment. A Fixed Allocation,
however, may not participate simultaneously in both the dollar
cost averaging program and the Systematic Partial Withdrawal
Option.
You may change the amount or percentage of your withdrawal
once each Contract Year or cancel this option at any time by
sending satisfactory notice to our Customer Service Center at
least seven days prior to the next scheduled withdrawal date.
However, you may not change the amount or percentage of your
withdrawals in any Contract Year during which you have previously
taken a conventional partial withdrawal.
IRA Partial Withdrawal Option
If you have an IRA Contract and will attain age 70 1/2 in the
current calendar year, distributions may be made to you to
satisfy requirements imposed by Federal tax law. IRA partial
withdrawals provide payout of amounts required to be distributed
by the Internal Revenue Service rules governing mandatory
distributions under qualified plans. See Federal Tax
Considerations. We will send you a notice before your
distributions commence, and you may
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elect this option at that
time, or at a later date. You may not elect IRA partial
withdrawals while the Systematic Partial Withdrawal Option is in
effect. If you do not elect the IRA Partial Withdrawal Option,
and distributions are required by Federal tax law, distributions
adequate to satisfy the requirements imposed by Federal tax law
may be made. Thus, if the Systematic Partial Withdrawal Option
is in effect, distributions under that option must be adequate to
satisfy the mandatory distribution rules imposed by Federal tax
law.
You may choose to receive IRA partial withdrawals on a
monthly, quarterly or annual frequency. You select the day of
the month when the withdrawals will be made, but it cannot be
later than the 28th day of the month. If no date is selected,
the withdrawals will be made on the same calendar day of the
month as the Contract Date.
At your request, we will determine the amount that is
required to be withdrawn from your Contract each year based on
the information you give us and various choices you make. For
information regarding the calculation and choices you have to
make, see the Statement of Additional Information. The minimum
dollar amount you can withdraw is $100. At the time we determine
the required partial withdrawal amount for a taxable year based
on the frequency you select, if that amount is less than $100, we
will pay $100. At any time where the partial withdrawal amount
is greater than the Accumulation Value, we will cancel the
Contract and send you the amount of the Cash Surrender Value.
You may change the payment frequency of your withdrawals
once each Contract Year or cancel this option at any time by
sending us satisfactory notice to our Customer Service Center at
least seven days prior to the next scheduled withdrawal date.
An IRA partial withdrawal in excess of the amount allowed
under the Systematic Partial Withdrawal Option may be subject to
a Market Value Adjustment.
Partial Withdrawals in General
CONSULT YOUR TAX ADVISOR REGARDING THE TAX CONSEQUENCES
ASSOCIATED WITH TAKING PARTIAL WITHDRAWALS. A partial
withdrawal made before the taxpayer reaches age 59 1/2 may
result in imposition of a tax penalty of 10% of the taxable
portion withdrawn. See Federal Tax Considerations for more
details.
Automatic Rebalancing
If you have at least $10,000 of Accumulation Value invested
in the Divisions, you may elect to participate in our automatic
rebalancing program. Automatic rebalancing provides you with an
easy way to maintain the particular asset allocation that you and
your financial advisor have determined are most suitable for your
individual long-term investment goals. We do not charge a fee
for participating in our automatic rebalancing program.
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Under the program you may elect to have all your allocations
among the Divisions rebalanced on a quarterly, semi-annual, or
annual calendar basis. The minimum size of an allocation to a
Division must be in full percentage points. Rebalancing does not
affect any amounts that you have allocated to the Fixed Account.
The program may be used in conjunction with the systematic
partial withdrawal option only where such withdrawals are taken
pro rata. Automatic rebalancing is not available if you
participate in dollar cost averaging. Automatic rebalancing will
not take place during the free look period.
To participate in automatic rebalancing you must submit to
our Customer Service Center written notice in a form satisfactory
to us. We will begin the program on the last Valuation Date of
the applicable calendar period in which we receive the notice.
You may cancel the program at any time. The program will
automatically terminate if you choose to reallocate your
Accumulation Value among the Divisions or if you make an
additional premium payment or partial withdrawal on other than a
pro rata basis. Additional premium payments and partial
withdrawals effected on a pro rata basis will not cause the
automatic rebalancing program to terminate.
Proceeds Payable to the Beneficiary
If the Owner or the Annuitant (when the Owner is other than
an individual) dies prior to the annuity commencement date, we
will pay the Beneficiary the death benefit proceeds under the
Contract. Such amount may be received in a single sum or applied
to any of the Annuity Options. See The Annuity Options. If we
do not receive a request to apply the death benefit proceeds to
an Annuity Option, a single sum distribution will be made. Any
distributions from non-qualified Contracts must comply with
applicable Federal tax law distribution requirements.
Death Benefit Options
Subject to our rules, there are two death benefit options
that may be elected by you at issue under the Contract: the
Standard Death Benefit Option and the Annual Ratchet Enhanced
Death Benefit Option.
The Annual Ratchet Enhanced Death Benefit Option may only be
elected at issue and only if the Owner or Annuitant (when the
Owner is other than an individual) is age 79 or younger at issue.
We may offer a reduced death benefit under certain group and
sponsored arrangements. See Other Contract Provisions, Group or
Sponsored Arrangements.
Standard Death Benefit Option
You will automatically receive the Standard Death Benefit
Option unless you elect the Annual Ratchet Enhanced Death
Benefit. The Standard Death Benefit Option for the
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Contract
is equal to the greatest of: (i) your Accumulation Value;
(ii) total premiums less any partial withdrawals; and (iii)
the Cash Surrender Value.
Annual Ratchet Enhanced Death Benefit Option
The Annual Ratchet Enhanced Death Benefit under the
Contract, if elected, is equal to the greatest of: (i) the
Accumulation Value; (ii) total premium payments less any
partial withdrawals; (iii) the Cash Surrender Value; or (iv)
the following valuation:
(1) We take the enhanced death benefit from the prior
Valuation Date. On the Contract Date, the enhanced
death benefit is equal to the Initial Premium.
(2) We add to (1) any additional premiums paid since the
prior Valuation Date and subtract from (1) any partial
withdrawals (including any Market Value Adjustments and
surrender charges incurred) taken since the prior
Valuation Date.
(3) On a Valuation Date that occurs on or prior to the
Owner's Attained Age 80 which is also a Contract
Anniversary, we set the enhanced death benefit equal to
the greater of (2) or the Accumulation Value as of such
date.
On all other Valuation Dates, the enhanced death benefit is
equal to (2).
How to Claim Payments to Beneficiary
We must receive due proof of the death of the Owner or the
Annuitant (if the Owner is other than an individual) (such
as an official death certificate) at our Customer Service
Center before we will make any payments to the Beneficiary.
We will calculate the death benefit as of the date we
receive due proof of death. The Beneficiary should contact
our Customer Service Center for instructions.
Reports to Owners
We will send you a report once each calendar quarter within
31 days after the end of each calendar quarter. The report will
show the Accumulation Value, the Cash Surrender Value, and the
death benefit as of the end of the calendar quarter. The report
will also show the allocation of your Accumulation Value as of
such date and the amounts deducted from or added to the
Accumulation Value since the last report. The report will also
include any other information that may be currently required by
the insurance supervisory official of the jurisdiction in which
the Contract is delivered.
We will also send you copies of any shareholder reports of
the portfolios or securities in which Account NY-B invests, as
well as any other reports, notices or documents required by law
to be furnished to Owners.
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When We Make Payments
We will generally pay death benefit proceeds and the cash
surrender value within seven days after our Customer Service
Center receives all the information needed to process the
payment.
However, we may delay payment of amounts derived from the
Divisions if it is not practical for us to value or dispose of
shares of Account NY-B because:
(1) The NYSE is closed for trading;
(2) The SEC determines that a state of emergency exists;
(3) An order or pronouncement of the SEC permits a delay
for the protection of Owners; or,
(4) The check used to pay the premium has not cleared
through the banking system. This may take up to 15
days.
During such times, as to amounts allocated to the Divisions,
we may delay:
(1) Determination and payment of any Cash Surrender Value;
(2) Determination and payment of any death benefit if death
occurs before the Annuity Commencement Date;
(3) Allocation changes of the Accumulation Value; or,
(4) Application under an Annuity Option of the Accumulation
Value.
We reserve the right to delay payment of amounts from the
Fixed Account for up to six months.
CHARGES AND FEES
Charge Deduction Division
You may specify at issue if you wish to have all charges
against the Accumulation Value deducted from the Money Market
Division. We call this the Charge Deduction Division Option, and
within this context refer to the Money Market as the Charge
Deduction Division. If you do not elect this option, or if the
amount of the charges is greater than the amount in the Division,
the charges will be deducted as discussed below. You may also
choose to elect or cancel this option while the Contract is in
force by sending satisfactory notice to our Customer Service
Center.
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Charges Deducted from the Accumulation Value
We invest the entire amount of the initial and any
additional premium payments in the Divisions and the Fixed
Allocations you select, subject to certain restrictions. See
Restrictions on Allocation of Premium Payments. We then may
deduct certain amounts from your Accumulation Value. We may
reduce certain fees and charges, including any surrender,
administration, and mortality and expense risk charges, under
group or sponsored arrangements. See Group or Sponsored
Arrangements. Unless you have elected the Charge Deduction
Division, charges are deducted proportionately from all affected
Divisions in which you are invested. If there is no Accumulation
Value in those Divisions, we will deduct charges from your Fixed
Allocations starting with the Guarantee Periods nearest their
Maturity Dates until such charges have been paid. The charges we
deduct are:
Surrender Charge
A contingent deferred sales charge ("Surrender Charge") is
imposed as a percentage of each premium payment if the
Contract is surrendered or an excess partial withdrawal is
taken during the seven year period from the date we receive
and accept such premium payment. The percentage of premium
payments deducted at the time of surrender or excess partial
withdrawal depends upon the number of complete years that
have elapsed since that premium payment was made. We
determine the surrender charge as a percentage of each
premium payment as follows:
Complete Years Elapsed
Since Premium Payment Surrender Charge
---------------------- ----------------
0 7%
1 6%
2 5%
3 4%
4 3%
5 2%
6 1%
7+ 0%
Subject to our rules and as described in the Contract, the
surrender charge arising from a surrender or excess partial
withdrawal will be waived in the following events:
(1) you begin receiving qualified extended medical care on
or after the first Contract Anniversary for at least 45
days during any continuous sixty-day period, and your
request for the surrender or withdrawal, together with
all required proof of such qualified extended medical
care, must be received at our Customer Service Center
during the term of such care or within ninety days
after the last day upon which you received such care.
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(2) you are first diagnosed by a qualifying medical
professional, on or after the first Certificate
Anniversary, as having a Qualifying Terminal Illness.
Written proof of terminal illness, satisfactory to us,
must be received at our Customer Service Center. We
reserve the right to require an examination by a
physician of our choice.
See your Contract for more information. The waiver of
surrender charge may not be available in all states.
Surrender Charge for Excess Partial Withdrawals
There is considered to be an excess partial withdrawal in
any Contract Year in which the amount withdrawn exceeds 15%
of your Accumulation Value on the date of the withdrawal
minus any amount withdrawn during that Contract Year. Where
you are receiving systematic partial withdrawals, any
combination of conventional partial withdrawals taken and
any systematic partial withdrawals expected to be received
in a Contract Year will be considered in determining the
amount of the excess partial withdrawal. Such a withdrawal
will be considered a partial surrender of the Contract and
we will impose a surrender charge and any associated premium
tax. See Facts About the Contract, The Fixed Account,
Market Value Adjustment. Such charges will be deducted from
the Accumulation Value in proportion to the Accumulation
Value in each Division or Fixed Allocation from which the
excess partial withdrawal was taken. In instances where the
excess partial withdrawal equals the entire Accumulation
Value in each such Division or Fixed Allocation, charges
will be deducted proportionately from all other Divisions
and Fixed Allocations in which you are invested.
For purposes of calculating the surrender charge for the
excess partial withdrawal, (i) we treat premium payments as
being withdrawn on a first-in first-out basis, and (ii)
amounts withdrawn which are not considered an excess partial
withdrawal are not treated as a withdrawal of any premium
payments. Although we treat premium payments as being
withdrawn before earnings for purposes of calculating the
surrender charge for excess partial withdrawals, the Federal
income tax law treats earnings as withdrawn first. See
Federal Tax Considerations, Taxation of Non-Qualified
Annuities.
For example, the following assumes an Initial Premium
payment of $10,000 and additional premium payments of
$10,000 in each of the second and third Contract Years, for
total premium payments under the Contract of $30,000. It
also assumes a partial withdrawal at the beginning of the
fourth Contract Year of 20% of the Accumulation Value of
$35,000.
In this example, $5,250 ($35,000 x .15) is the maximum
partial withdrawal that may be withdrawn during the Contract
Year without the imposition of a surrender charge. The
total partial withdrawal would be $7,000 ($35,000 x .2).
Therefore, $1,750 ($7,000-$5,250) is considered an excess
partial withdrawal of a part of the Initial
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Premium payment
of $10,000 and would be subject to a 4% surrender charge of
$70.00 ($1,750 x .04). This example does not take into
account any Market Value Adjustment or deduction of any
premium taxes.
Premium Taxes
We make a charge for state and local premium taxes in
certain states which can range from 0% to 3.5% of premium.
The charge depends on the Owner's state of residence. We
reserve the right to change this amount to conform with
changes in the law or if the Owner changes state of
residence.
Premium taxes are generally incurred on the annuity
commencement date and a charge for such premium taxes is
then deducted from your Accumulation Value on such date.
However, some jurisdictions impose a premium tax at the time
that initial and additional premiums are paid, regardless of
the Annuity Commencement Date. In those states we may
initially defer collection of the amount of the charge for
premium taxes from your Accumulation Value and deduct it
against Accumulation Value on surrender of the Contract,
excess partial withdrawals or on the Annuity Commencement
Date.
Administrative Charge
The administrative charge is incurred at the beginning of
the Contract processing period and deducted at the end of
each Contract processing period. We deduct this charge when
determining the Cash Surrender Value payable if you
surrender the Contract prior to the end of a Contract
processing period. If the Accumulation Value at the end of
the Contract processing period equals or exceeds $100,000 or
the sum of the premiums paid equals or exceeds $100,000, the
charge is zero. Otherwise, the amount deducted is $30 per
Contract Year. This charge is to cover a portion of our
administrative expenses. See Asset Based Administrative
Charge, below.
Excess Allocation Charge
We currently do not assess a charge for allocation changes
made during a Contract Year. We reserve the right, however,
to assess a $25 charge for each allocation change after the
twelfth allocation change in a Contract Year. This amount
represents the maximum we will charge. The charge would be
deducted from the Divisions and the Fixed Allocations from
which each such reallocation is made in proportion to the
amount being transferred from each such Division and Fixed
Allocation unless you have chosen to use the Charge
Deduction Division. The excess allocation charge is set at
a level that is not designed to produce profit for First
Golden or any affiliate. Any allocations or transfers due
to the election of dollar cost averaging and reallocation
under the provision What Happens if a Division is Not
Available will not be included in determining if the excess
allocation charge should apply.
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Charges Deducted from the Divisions
Mortality and Expense Risk Charge
The amount of the mortality and expense risk charge depends
on the death benefit option that has been elected. If the
Standard Death Benefit Option is elected, the charge is
equivalent, on an annual basis, to 1.10% of the assets in
each Division. The charge is deducted on each Valuation
Date at the rate of .003030% for each day in the Valuation
Period. Approximately .75% is allocated to the mortality
risk and .35% is allocated to the expense risk. If the
Annual Ratchet Enhanced Death Benefit is elected, the charge
is equivalent, on an annual basis, to 1.25% of the assets in
each Division. The charge is deducted on each Valuation
Date at the rate of .003446% for each day in the Valuation
Period. Approximately .90%, is allocated to the mortality
risk.
This charge will compensate us for mortality and expense
risks we assume under the Contract. We will realize a gain
from this charge to the extent it is not needed to provide
for benefits and expenses under the Contract. We will use
any gain for any lawful purpose including any shortfalls on
paying distribution expenses.
The mortality risk assumed is the risk that Annuitants as a
group will live for a longer time than our actuarial tables
predict. As a result, we would be paying more in annuity
income than we planned. First Golden also assumes a risk
under the Contract for paying a guaranteed death benefit.
The expense risk assumed is the risk that it will cost us
more to issue and administer the Contract than we expect.
Asset Based Administrative Charge
We will deduct a daily charge from the assets in each
Division, to compensate us for a portion of the
administrative expenses under the Contract. The daily
charge is at a rate of 0.000411% (equivalent to an annual
rate of 0.15%) on the assets in each Division.
This asset based administrative charge plus the
administrative charge above will not exceed the cost of the
services to be provided over the life of the Contract.
Fund Expenses
There are fees and charges deducted from each Series of the
ESS Trust, the Travelers Series Fund and the Smith Barney Series
Fund. Please read the respective Trust prospectus for details.
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CHOOSING YOUR ANNUITIZATION OPTIONS
Annuitization of Your Contract
If the Annuitant and Owner are living on the Annuity
Commencement Date, we will begin making payments to the Owner
under an income plan. We will make these payments under the
Annuity Option chosen. You may change an Annuity Option by
making a written request to us at least 30 days prior to the
Annuity Commencement Date of the Contract. The amount of the
payments will be determined by applying your Accumulation Value
adjusted for any applicable Market Value Adjustment on the
Annuity Commencement Date in accordance with The Annuity Options
section below, subject to our published rules at such time. See
When We Make Payments.
You may also elect an Annuity Option on surrender of the
Contract for its Cash Surrender Value or you may choose one or
more Annuity Options for the payment of death benefit proceeds
while it is in effect and before the Annuity Commencement Date.
If, at the time of the Owner's death or the Annuitant's death (if
the Owner is not an individual), no option has been chosen for
paying death benefit proceeds, the Beneficiary may choose an
option within 60 days. In all events, payments of death benefit
proceeds must comply with the distribution requirements of
applicable Federal tax law.
The minimum monthly annuity income payment that we will make
is $20. We may require that a single sum payment be made if the
Accumulation Value is less than $2,000 or if the calculated
monthly annuity income payment is less than $20.
For each option we will issue a separate written agreement
putting the option into effect. Before we pay any annuity
benefits, we require the return of the Contract. If your
Contract has been lost, we will require that you complete and
return the applicable Contract form. Various factors will affect
the level of annuity benefits including the Annuity Option
chosen, the applicable payment rate used and the investment
results of the Divisions and interest credited to the Fixed
Allocations in which the Accumulation Value has been invested.
Some annuity options may provide only for fixed payments.
Fixed Annuity Payments are regular payments, the amount of which
is fixed and guaranteed by us. The amount of the payments will
depend only on the form and duration of payments chosen, the age
of the Annuitant or Beneficiary (and sex, where appropriate), the
total Accumulation Value applied to purchase the fixed option,
and the applicable payment rate.
Our approval is needed for any option where:
(1) The person named to receive payment is other than the
Owner or Beneficiary;
(2) The person named is not a natural person, such as a
corporation; or
(3) Any income payment would be less than the minimum
annuity income payment allowed.
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Annuity Commencement Date Selection
You select the Annuity Commencement Date. You may select
any date following the fifth Contract Anniversary but before the
Contract Processing Date in the month following the Annuitant's
90th birthday. If, on the Annuity Commencement Date, a Surrender
Charge remains, the elected Annuity Option must include a life
annuity or a period certain of at least five years duration. If
you do not select a date, the annuity commencement date will be
in the month following the Annuitant's 90th birthday. If the
Annuity Commencement Date occurs when the Annuitant is at an
advanced age, such as over age 85, it is possible that the
Contract will not be considered an annuity for Federal tax
purposes. See Federal Tax Considerations. For a Contract
purchased in connection with a qualified plan, distribution must
commence not later than April 1st of the calendar year following
the calendar year in which you attain age 70 1/2. Consult your tax
advisor.
Frequency Selection
You choose the frequency of the Annuity Payments. They may
be monthly, quarterly, semi-annually or annually. If we do not
receive written notice from you, the payments will be made
monthly. There may be certain restrictions on minimum payments
that we will allow.
The Annuitization Options
There are four options to choose from as shown below.
Options 1 through 3 are fixed and option 4 may be fixed or
variable. For a fixed option, the Accumulation Value in the
Divisions is transferred to the general account.
Option 1. Income for a Fixed Period
Payment is made in equal installments for a fixed
number of years based on the Accumulation Value as of
the annuity commencement date. We guarantee that each
monthly payment will be at least the amount set forth
in the Contract. Guaranteed amounts for annual,
semi-annual and quarterly payments are available upon
request. Illustrations are available upon request. If
the Cash Surrender Value or Accumulation Value is
applied under this option, a 10% penalty tax may apply
to the taxable portion of each income payment until the
Owner reaches age 59 1/2.
Option 2. Income for Life
Payment is made in equal monthly installments and
guaranteed for at least a period certain. The period
certain can be 10 or 20 years. Other periods certain
may be available on request. A refund certain may be
chosen instead. Under this arrangement, income is
guaranteed until payments equal the amount applied. If
the person named lives beyond the guaranteed period,
payments continue until his
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or her death. We guarantee
that each payment will be at least the amount set forth
in the Contract corresponding to the person's age on
his or her last birthday before the option's effective
date. Amounts for ages not shown in the Contract are
available upon request.
Option 3. Joint Life Income
This option is available if there are two persons named
to receive payments. At least one of the persons named
must be either the Owner or Beneficiary of the
Contract. Monthly payments are guaranteed and are made
as long as at least one of the named persons is living.
There is no minimum number of payments. Monthly
payment amounts are available upon request.
Option 4. Annuity Plan
An amount can be used to buy any single premium annuity
we offer on the option's effective date.
Payment When Named Person Dies
When the person named to receive payment dies, we will pay
any amounts still due as provided by the option agreement. The
amounts still due are determined as follows:
(1) For option 1, or any remaining guaranteed payments
under option 2, payments will be continued. Under
options 1 and 2, the discounted values of the remaining
guaranteed payments may be paid in a single sum. This
means we deduct the amount of the interest each
remaining guaranteed payment would have earned had it
not been paid out early. The discount interest rate is
never less than 3% for option 1 and 3.50% for option 2
per year. We will, however, base the discount interest
rate on the interest rate used to calculate the
payments for options 1 and 2 if such payments were not
based on the tables in the Contract.
(2) For option 3, no amounts are payable after both named
persons have died.
(3) For option 4, the annuity agreement will state the
amount due, if any.
OTHER CONTRACT PROVISIONS
In Case of Errors in Application Information
If an age or sex given in the application or enrollment form
is misstated, the amounts payable or benefits provided by the
Contract shall be those that the premium payment would have
bought at the correct age or sex.
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Sending Notice to Us
Any written notices, inquiries or requests should be sent to
our Customer Service Center. Please include your name, your
Contract number and, if you are not the Annuitant, the name
of the Annuitant.
Assigning the Contract as Collateral
You may assign a non-qualified Contract as collateral
security for a loan or other obligation. This does not
change the Ownership. However, your rights and any
Beneficiary's rights are subject to the terms of the
assignment. See Transfer of Annuity Contracts, and
Assignments. An assignment may have Federal tax
consequences. See Federal Tax Considerations.
You must give us satisfactory written notice at our Customer
Service Center in order to make or release an assignment.
We are not responsible for the validity of any assignment.
Non-Participating
The Contract does not participate in the divisible surplus
of First Golden.
Authority to Make Agreements
All agreements made by us must be signed by our president or
a vice president and by our secretary or an assistant
secretary. No other person, including an insurance agent or
broker, can change any of the Contract's terms, make any can
change any of the Contract's terms, make any agreements
binding on us or extend the time for premium payments.
Contract Changes - Applicable Tax Law
We reserve the right to make changes in the Contract to the
extent we deem it necessary to continue to qualify the Contract
as an annuity. Any such changes will apply uniformly to all
Contracts that are affected. You will be given advance written
notice of such changes.
Your Right to Cancel or Exchange Your Contract
Canceling Your Contract
You may cancel your Contract within your Free Look Period,
which is ten days after you receive your Contract. For
purposes of administering our allocation and administrative
rules, we deem this period to expire 15 days after the
Contract is mailed to you. Some states may require a longer
Free Look Period. If you decide to cancel, you may mail
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or deliver the Contract to our Customer Service Center. We
will refund the Accumulation Value plus any charges we
deducted, and the Contract will be voided as of the date we
receive the Contract and your request. Some states require
that we return the premium paid. In these states, we
require your premiums designated for investment in the
Divisions of Account NY-B be allocated to the Specially
Designated Division during the Free Look Period. Premiums
designated for the Fixed Account will be allocated to a
Fixed Allocation with the Guarantee Period you have chosen.
If you do not choose to exercise your right to cancel during
the Free Look Period, then at the end of the Free Look
Period your money will be invested in the Divisions chosen
by you, based on the index of investment experience next
computed for each Division. See Facts About the Contract,
Measurement of Investment Experience, Index of Experience
and Unit Value.
Exchanging Your Contract
For information regarding Section 1035 Exchanges, see
Federal Tax Considerations.
Other Contract Changes
You may change the Contract to another annuity plan subject
to our rules at the time of the change.
Group or Sponsored Arrangements
For certain group or sponsored arrangements, we may reduce
any surrender, administration, and mortality and expense risk
charges. We may also change the minimum initial and additional
premium requirements, or offer a reduced death benefit. Group
arrangements include those in which a trustee or an employer, for
example, purchases Contracts covering a group of individuals on a
group basis. Sponsored arrangements include those in which an
employer allows us to sell Contracts to its employees on an
individual basis.
Our costs for sales, administration, and mortality generally
vary with the size and stability of the group among other
factors. We take all these factors into account when reducing
charges. To qualify for reduced charges, a group or sponsored
arrangement must meet certain requirements, including our
requirements for size and number of years in existence. Group or
sponsored arrangements that have been set up solely to buy
Contracts or that have been in existence less than six months
will not qualify for reduced charges.
We will make these and any similar reductions according to
our rules in effect when an application or enrollment form for a
Contract is approved. We may change these rules from time to
time. Any variation in the administrative charge will reflect
differences in costs or services and will not be unfairly
discriminatory.
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Selling the Contract
DSI is also principal underwriter and distributor of the
Contract as well as for any other Contracts issued through
Account NY-B and any other separate accounts of First Golden and
Golden American. We pay DSI for acting as principal underwriter
under a distribution agreement. The offering of the Contract
will be continuous.
DSI has entered into and will continue to enter into sales
agreements with broker-dealers to solicit for the sale of the
Contract through registered representatives who are licensed to
sell securities and variable insurance products including
variable annuities. These agreements provide that applications
for Contracts may be solicited by registered representatives of
the broker-dealers appointed by First Golden to sell its variable
life insurance and variable annuities. These broker-dealers are
registered with the SEC and are members of the National
Association of Securities Dealers, Inc. ("NASD"). The registered
representatives are authorized under applicable state regulations
to sell variable life insurance and variable annuities. The
writing agent will receive commissions and expense allowances
totaling up to 6.0% of any initial or additional premium payments
made.
REGULATORY INFORMATION
Voting Rights
Account NY-B
We will vote the shares of a Trust owned by Account NY-B
according to your instructions. However, if the Investment
Company Act of 1940 or any related regulations should change, or
if interpretations of it or related regulations should change,
and we decide that we are permitted to vote the shares of a trust
in our own right, we may decide to do so.
We determine the number of shares that you have in a
Division by dividing the Contract's Accumulation Value in that
Division by the net asset value of one share of the portfolio in
which a Division invests. Fractional votes will be counted. We
will determine the number of shares you can instruct us to vote
180 days or less before a Trust's meeting. We will ask you for
voting instructions by mail at least 10 days before the meeting.
If we do not get your instructions in time, we will vote the
shares in the same proportion as the instructions received from
all Contracts in that Division. We will also vote shares we hold
in Account NY-B which are not attributable to Owners in the same
proportion.
State Regulation
We are regulated and supervised by the Insurance Department
of the State of New York, which periodically examines our
financial condition and operations. We are also subject to the
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insurance laws and regulations of all jurisdictions where we do
business. The variable Contract offered by this prospectus has
been approved by the Insurance Department of the State of New
York. We are required to submit annual statements of our
operations, including financial statements, to the Insurance
Departments of the various jurisdictions in which we do business
to determine solvency and compliance with state insurance laws
and regulations.
Legal Proceedings
First Golden, as an insurance company, is ordinarily
involved in litigation. We do not believe that any current
litigation is material and we do not expect to incur significant
losses from such actions.
Legal Matters
The legal validity of the Contract described in this
prospectus has been passed on by Myles R. Tashman, Esquire,
Executive Vice President, General Counsel and Secretary of First
Golden. Sutherland, Asbill & Brennan, L.L.P. of Washington, D.C.
has provided advice on certain matters relating to Federal
securities laws.
Experts
The audited financial statements of First Golden American
Life Insurance Company of New York, appearing in the Statement of
Additional Information and Registration Statement have been
audited by Ernst & Young LLP, independent auditors, as set forth
in their report thereon appearing in the Statement of Additional
Information and in the Registration Statement and are included in
reliance upon such reports given upon the authority of such firm
as experts in accounting and auditing.
MORE INFORMATION ABOUT FIRST GOLDEN AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK
Management's Discussion and Analysis of Financial Condition and
Results of Operations
This Management's Discussion and Analysis of Financial
Condition and Results of Operations should be read in conjunction
with the GAAP Basis Financial Statements and Notes to Financial
Statements included herein.
First Golden, a newly established insurance company under
the laws of the state of New York, commenced operations on
__________, 1996. First Golden is a wholly owned subsidiary of
Golden American Life Insurance Company. Golden American Life
Insurance Company, in turn, is an indirect wholly owned
subsidiary of the Equitable of Iowa Companies, a holding company
for Equitable Life Insurance Company of Iowa, USG Annuity & Life
Company, Locust Street Securities, Inc. and Equitable Investment
Services, Inc. First Golden is authorized to do business only in
the State of New York.
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First Golden's primary business purpose is to offer
individual deferred variable annuity contracts (the "Contracts").
The First Golden Contracts are funded by Separate Account NY-B
and are being offered to the public for the first time through
this prospectus. As of the date of this prospectus, Separate
Account NY-B had not received any premium payments under the
Contracts. The Company's operations and initial investments were
funded with capital contributed by Equitable of Iowa Companies.
The Company's initial investments have consisted almost
exclusively of U.S. Treasury Bills and certain other short term
instruments with superior credit ratings. These investments have
been chosen to minimize credit risk and to minimize fluctuations
as a result of interest rate changes. As of the date of this
prospectus, the Company has not acquired any equity securities or
any interest in real estate. However, a number of such
investments meeting the Company's investment criteria have been
identified.
Business Environment
The current business and regulatory environment remains
challenging for the insurance industry. Increasing competition
from traditional insurance carriers as well as banks and mutual
fund companies means that investors have many more choices.
However, overall demand for variable annuity product remains
strong for several reasons: (1) dynamic stock market performance
over the last 3 years; (2) relatively low interest rates; and (3)
baby boomers reaching ages where they are beginning to put aside
large amounts for retirement. Management anticipates that the
demand for variable annuity products will continue to remain
strong through 1997, and, correspondingly, expects that sales of
the Contracts through 1997 will be robust.
Results of Operations
For the period from when the Company commenced operations to
___________, 1996, the Company's net investment income was
$________. Interest income on short-term investments for the
period was $________. For the same period, realized losses were
________ and were attributable to ___________. The Company
incurred operating and administrative expenses equal to $______
for investment services of ___________ and administrative
services of ________.
First Golden's future earnings will be principally derived
from the charges imposed under the Contracts. The primary
revenues from the Contracts should consist of charges for
mortality and expense risk and Contract administration charges
that have been assessed against account balances during a period.
In addition, a sales load of up to 7% of premium payments
withdrawn upon partial withdrawals or surrenders may be collected
under the Contracts. First Golden will defer at issue the cost
associated with acquiring new business and amortize such cost
over the lives of the Contracts in relation to the present value
of estimated future gross profits. First Golden will also incur
expenses associated with the maintenance of in-force Contracts.
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Liquidity and Capital Resources
First Golden's liquidity requirements include the payment of
sales commissions, and other acquisition and underwriting
expenses on the annuity business that it writes. Positive cash
flow elements from operations are produced primarily from two
sources. Fees are collected from the in-force book of business.
In addition, premium amounts directed to the fixed account option
produce positive cash flow from operations as amounts are
retained within the general account of the Company and are used
to fund an investment portfolio that finances future benefit
payments. Investments are made in fixed-rate investments such as
bonds, and short-term investments in order to provide a
sufficient return as well as to match the duration of the
obligation for future benefit payments. First Golden products
also contain surrender charge features which reward persistency
and penalize the early withdrawal of funds.
First Golden has developed and utilizes a projection system
which forecasts cash flow. Cash flow from operations will vary
depending on the amount of premium written and the product mix.
The Company will also periodically perform asset/liability
matching in the management of its asset and liability portfolios.
Those matching practices involve the monitoring of asset and
liability durations for various product lines, cash flow testing
under various interest rate scenarios, and the continuous
rebalancing of assets and liabilities with respect to yield,
risk, and cash flow characteristics.
In order to continue to market annuity products, First
Golden must meet or exceed the statutory capital and surplus
requirements of the insurance department of the state of New
York. Statutory accounting practices differ from generally
accepted accounting principles in two major respects; under
statutory accounting practices, the acquisition costs of new
business are charged to expense and the required additions to
statutory reserves for new business in some cases may initially
exceed the statutory revenues attributable to such business.
These practices result in a reduction of statutory income and
surplus at the time of recording new business.
The NAIC utilizes a Risk Based Capital "RBC" adequacy
monitoring system. The RBC calculates the amount of adjusted
capital which a life insurance company should have based upon
that company's risk profile. The NAIC has established four
different levels of regulatory action with respect to the RBC
adequacy monitoring system. Each of these levels may be
triggered if an insurer's total adjusted capital is less than a
corresponding level of RBC. Under currently effective funding
agreements, expected RBC levels will remain well in excess of
levels required to avoid regulatory actions. There is no
assurance, however, that First Golden will continue to maintain
its current RBC level.
First Golden believes that it will be able to fund the
capital and surplus required for projected new business from
existing statutory capital and surplus as well as future surplus
contributions from its parent. First Golden expects to continue
to receive capital contributions from its parent if necessary.
First Golden's future marketing efforts could be hampered should
its parent and/or affiliates be unable to provide additional
funding.
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Segment Information
First Golden's operations currently consist of one business
segment, the sale of annuity products. First Golden anticipates
that it will not be dependent upon any single customer, and that
no single customer will account for its revenues in 1997.
Reinsurance
First Golden currently reinsures its mortality risk
associated with the Contract's guaranteed death benefit with one
or more appropriately licensed insurance companies.
Reserves
In accordance with the life insurance laws and regulations
under which First Golden operates, it is obligated to carry
on its books, as liabilities, actuarially determined
reserves to meet its obligations on outstanding Contracts.
Reserves, based on valuation mortality tables in general use
in the United States, where applicable, are computed to
equal amounts which, together with interest on such reserves
computed annually at certain assumed rates, make adequate
provision according to presently accepted actuarial
standards of practice, for the anticipated cash flows
required by the contractual obligations and related expenses
of First Golden.
Investments
First Golden's assets are invested in accordance with
applicable state laws. These laws govern the nature and the
quality of investments that may be made by life insurance
companies and the percentage of their assets that may be
committed to any particular type of investment. In general,
these laws permit investments, within specified limits
subject to certain qualifications, in federal, state, and
municipal obligations, corporate bonds, preferred or common
stocks, real estate mortgages, real estate and certain other
investments. All of First Golden's assets, except for
assets held in escrow and variable separate account assets
supporting variable products, are available to meet its
obligations under the Contracts.
First Golden makes investments in accordance with investment
guidelines that take into account investment quality,
liquidity and diversification, and invests assets supporting
the Contract guarantees primarily in fixed income assets
issued or guaranteed by the U.S. government or its agencies
and instrumentalities.
At ___________, 1996, 100% of the total invested assets were
invested in investment grade bonds and 0% were invested in
non-investment grade securities. First Golden defines
non-investment grade as unsecured corporate debt obligations
which do not have a rating equivalent to Standard & Poor's
(or similar rating agency) BBB or higher and are not
guaranteed by an agency of the federal government.
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Competition
First Golden is engaged in a business that is highly
competitive because of the large number of stock and mutual
life insurance companies and other entities marketing
insurance products comparable to those of First Golden.
There are approximately 2,350 stock, mutual and other types
of insurers in the life insurance business in the United
States, a substantial number of which are significantly
larger than First Golden.
Certain Agreements
[Information to be provided by pre-effective amendment.]
Distribution Agreement
First Golden has entered into agreements with DSI to perform
services related to the distribution of its products. DSI
will act as the principal underwriter (as defined in the
Securities Act of 1933 and the Investment Company Act of
1940, as amended) of the variable insurance products issued
by First Golden.
Employees
First Golden, as a result of its Service Agreements with
each of Equitable of Iowa and Golden American has very few
direct employees. Instead, various management services are
provided by Equitable of Iowa, and Golden American, as
described above under "Certain Agreements." The cost of
these services are allocated to First Golden.
Certain officers of First Golden are also officers of Golden
American and DSI, and their salaries are allocated among the
three companies. Certain officers of First Golden are also
officers of Equitable of Iowa. See "Directors and Executive
Officers."
Properties
First Golden's principal office is located at
____________________________, New York, New York, where all
of First Golden's records are maintained. This office space
is leased under a separate agreement.
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Directors and Executive Officers
Name (Age) Positions(s) with the Company
---------- -----------------------------
Terry L. Kendall (50) Chairman, President, Chief Executive Officer
and Director
Myles R. Tashman (54) Executive Vice President, General Counsel,
Secretary and Director
Barnett Chernow (46) Executive Vice President, Director
Edward C. Wilson (51) Executive Vice President
Stephen J. Friedman (58) Director
Bernard Levitt (70) Director
Roger R. Martin (65) Director
Andrew Kalinowski (51) Director
David L. Jacobson (47) Senior Vice President and Assistant Secretary
Stephen J. Preston (38) Senior Vice President, Chief Actuary and
Controller
Mary B. Wilkinson (40) Senior Vice President and
Secretary and Treasurer
Marilyn Talman (49) Vice President, Associate Counsel
and Assistant Secretary
Each director is elected to serve for one year or until the
next annual meeting of shareholders or until his or her successor
is elected. Some directors are directors of insurance company
subsidiaries of First Golden's ultimate parent, Equitable of Iowa
Companies.
The principal positions of First Golden's directors and
senior executive officers for the past five years are listed
below:
Mr. Terry L. Kendall is President, Chief Executive Officer
and Director of the First Golden American Life Insurance Company
of New York. Since September, 1993, Mr. Kendall has also served
as Chairman of the Board, President and Chief Executive Officer
of Golden American Life Insurance Company. From 1982 through
June 1993, he was President and Chief Executive Officer of United
Pacific Life Insurance Company. He was elected to serve as
director of First Golden in June, 1996.
Mr. Myles R. Tashman is Executive Vice President, General
Counsel, Secretary and Director of First Golden American Life
Insurance Company of New York. Since December, 1995, Mr. Tashman
has also served as Executive Vice President of Golden American
Life Insurance Company. From 1986 through 1993, he was Senior
Vice President and General Counsel of United Pacific Life
Insurance Company. He was elected to serve as a director of
First Golden in June, 1996.
Mr. Barnett Chernow is Executive Vice President and
Director of First Golden American Life Insurance Company of New
York. Since 1996, Mr. Chernow has also served as
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Executive Vice
President of Golden American Life Insurance Company. From 1977
through 1993, he held various positions with Reliance Insurance
Companies and was Senior Vice President and Chief Financial
Officer of United Pacific Life Insurance Company from 1984
through 1993. He was elected to serve as a director of First
Golden in June, 1996.
Mr. Stephen J. Friedman is a Director of First Golden,
having been first appointed in June, 1996. Mr. Friedman is a
partner of the law firm of Debevoise & Plimpton in New York, NY
since 1993. From 1988 through 1993, he was Executive Vice
President and General Counsel to Equitable Life Assurance
Society of the United States.
Mr. Bernard Levitt is a Director of First Golden, having
been first appointed in June, 1996. Until his retirement in
1990, Mr. Levitt was a life insurance consultant with American
Life Insurance Company or New York, since 1989.
Mr. Roger R. Martin is a Director of First Golden, having
been first appointed in June, 1996. Until his retirement in July,
1995, Mr. Martin was a VIce President with Bear Sterns since 1984.
Mr. Andrew Kalinowski is a Director of First Golden, having
been first appointed in June, 1996. Mr. Kalinowski is a Principal
and the President of Upstate Special Risk Services, Incorporated
since 1974. He is also a Principal, the Chief Marketing Officer
and Vice President of LifeMark Securities Corporation since 1983,
a Principal, Vice President and Secretary of LifeMark
Associates, Incorporated since 1993, and a Principal and Director
of LIFE Incorporated.
Mr. Edward C. Wilson is Executive Vice President of First
Golden American Life Insurance Company. Since January, 1996, Mr.
Wilson has also served as Executive Vice President of Golden
American Life Insurance Company. From August, 1994 to December,
1995, he was Senior Managing Director at Van Eck Global
Investors. From July, 1990 to August, 1994, he was Vice
President and National Sales Manager at Keyport Life Insurance
Company.
Mr. David L. Jacobson is Senior Vice President and
Assistant Secretary of First Golden American Life Insurance
Company. Since November, 1993, Mr. Jacobson has also served as
Senior Vice President and Assistant Secretary of Golden American
Life Insurance Company. From April, 1974 through November, 1993,
he held various positions with United Pacific Life Insurance
Company and was Vice President upon leaving.
Mr. Stephen J. Preston is Senior Vice President, Chief
Actuary and Controller of First Golden American Life Insurance
Company. Since December, 1993, Mr. Preston has served in an
identical capacity with Golden American Life Insurance Company.
From September, 1993 through November, 1993, he was Senior Vice
President and Actuary for Mutual of America Insurance Company.
From July, 1987 through August, 1993, he held various positions
with United Pacific Life Insurance Company and was Vice President
and Actuary upon leaving.
Ms. Mary Bea Wilkinson is Senior Vice President and
Treasurer of First Golden American Life Insurance Company. Since
November, 1993, Ms. Wilkinson has also served as Senior Vice
President, Assistant Secretary and Treasurer of Golden American
Life Insurance Company. From August, 1993 through October, 1993,
she was an Assistant Vice President with CIGNA Insurance
Companies. From January, 1987 through July, 1993, she held
various positions with United Pacific Life Insurance Company and
was Vice President and Controller upon leaving.
Ms. Marilyn Talman is Vice President, Associate General
Counsel and Assistant Secretary of First Golden American Life
Insurance Company of New York. Since April, 1996, Ms. Talman has
also served as Vice President, Associate General Counsel and
Assistant Secretary for Golden American Life Insurance Company.
From March, 1992 through March, 1994, she held various positions
with Rodney Square Management Corp. and was Vice President and
General Counsel upon leaving. From June, 1989 through February,
1992, she was an Associate with the law firm of Ballard, Spahr,
Andrews & Ingersoll.
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for Golden American Life Insurance Company.
From March, 1992 through March, 1994, she held various positions
with Rodney Square Management Corp. and was Vice President and
General Counsel upon leaving. From June, 1989 through February,
1992, she was an Associate with the law firm of Ballard, Spahr,
Andrews & Ingersoll.
FEDERAL TAX CONSIDERATIONS
Introduction
The following discussion of the federal income tax treatment
of the Contract is not exhaustive, does not purport to cover all
situations, and is not intended as tax advice. The federal
income tax treatment of the Contract is unclear in certain
circumstances, and a qualified tax adviser should always be
consulted with regard to the application of the tax law to
individual circumstances. This discussion is based on the
Internal Revenue Code of 1986, as amended (the "Code"). Treasury
Department regulations, and interpretations existing on the date
of this prospectus. These authorities, however, are subject to
change by Congress, the Treasury Department, and judicial
decisions.
This discussion does not address state or local tax
consequences associated with the purchase of the contract. In
addition, FIRST GOLDEN MAKES NO GUARANTEE REGARDING ANY TAX
TREATMENT - FEDERAL, STATE OR LOCAL - OF ANY CONTRACT OR OF ANY
TRANSACTION INVOLVING A CONTRACT.
Tax Status of First Golden
First Golden is taxed as a life insurance company under the
Code. Since the operations of Account NY-B are a part of, and
are taxed with, the operations of First Golden, Account NY-B is
not separately taxed as a "regulated investment company" under
the Code. Under existing federal income tax laws, investment
income and capital gains of Account NY-B are not taxed to First
Golden to the extent they are applied to increase reserves under
a contract. Since, under the contracts, investment income and
realized capital gains of Account NY-B attributable to contract
obligations are automatically applied to increase reserves, First
Golden does not anticipate that it will incur any federal income
tax liability in Account NY-B attributable to contract
obligations, and therefore First Golden does not intend to make
provision for any such taxes. If First Golden is taxed on
investment income or capital gains of Account NY-B, then First
Golden may impose a charge against Account NY-B, as appropriate,
in order to make provision for such taxes.
Taxation of Non-Qualified Annuities
Tax Deferral During Accumulation Period
Under existing provisions of the Code, except as described
below, any increase in an owner's Accumulation Value is
generally not taxable to the owner until amounts
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are received from the Contract, either in the form of annuity
payments as contemplated by the Contract, or in some other
form of distribution. However, this rule allowing deferral
applies only if (1) the investments of Account NY-B are
"adequately diversified" in accordance with Treasury
Department regulations, (2) First Golden, rather than the
owner, is considered the owner of the assets of Account NY-B
for federal income tax purposes, and (3) the owner is an
individual. In addition to the foregoing, if the Contract's
annuity commencement date occurs at a time when the
annuitant is at an advanced age, such as over age 85, it is
possible that the owner will be taxable currently on the
annual increase in the Accumulation Value.
Diversification Requirements. The Code and Treasury
Department regulations prescribe the manner in which
the investments of a segregated asset account, such as
the Divisions of Account NY-B, are to be "adequately
diversified." If a Division of Account NY-B failed to
comply with these diversification standards, contracts
based on that segregated asset account would not be
treated as an annuity contract for federal income tax
purposes and the owner would generally be taxable
currently on the income on the contract (as defined in
the tax law) beginning with the period of
non-diversification. First Golden expects that the
Divisions of Account NY-B will comply with the
diversification requirements prescribed by the Code and
Treasury Department regulations.
Ownership Treatment. In certain circumstances,
variable annuity contract owners may be considered the
owners, for federal income tax purposes, of the assets
of a segregated asset account, such as the Divisions of
Account NY-B, used to support their contracts. In
those circumstances, income and gains from the
segregated as set account would be includible in the
contract owners' gross income. The Internal Revenue
Service (the "IRS") has stated in published rulings
that a variable contract owner will be considered the
owner of the assets of a segregated asset account if
the owner possesses incidents of ownership in those
assets, such as the ability to exercise investment
control over the assets. In addition, the Treasury
Department announced, in connection with the issuance
of regulations concerning investment diversification,
that those regulations "do not provide guidance
concerning the circumstances in which investor control
of the investments of a segregated asset account may
cause the investor, rather than the insurance company,
to be treated as the owner of the assets in the
account." This announcement also stated that guidance
would be issued by way of regulations or rulings on the
"extent to which policyholders may direct their
investments to particular subaccounts (of a segregated
asset account) without being treated as owners of the
underlying assets." As of the date of this prospectus,
no such guidance has been issued.
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 the assets of a
segregated asset account.
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For example, the owner of
this Contract has the choice of more investment options
to which to allocate purchase payments and the
Accumulation Value, and may be able to transfer among
investment options more frequently, than in such
rulings. These differences could result in the owner
being treated as the owner of all or a portion of the
assets of Account NY-B. In addition, First Golden does
not know what standards will be set forth in the
regulations or rulings which the Treasury Department
has stated it expects to issue. First Golden therefore
reserves the right to modify the Contract as necessary
to attempt to prevent Contract owners from being
considered the owners of the assets of Account NY-B.
However, there is no assurance that such efforts would
be successful.
Frequently, if the IRS or the Treasury Department sets
forth a new position which is adverse to taxpayers, the
position is applied on a prospective basis only. Thus,
if the IRS or the Treasury Department were to issue
regulations or a ruling which treated an owner of this
Contract as the owner of Account NY-B, that treatment
might apply on a prospective basis. However, if the
regulations or ruling were not considered to set forth
a new position, an owner might retroactively be
determined to be the owner of the assets of Account NY-
B.
Non-Natural Owner. As a general rule, contracts held
by "non-natural persons" such as a corporation, trust
or other similar entity, as opposed to a natural
person, are not treated as annuity contracts for
federal tax purposes. The income on such contracts (as
defined in the tax law) is taxed as ordinary income
that is received or accrued by the owner of the
contract during the taxable year. There are several
exceptions to this general rule for non-natural owners.
First, contracts will generally be treated as held by a
natural person if the nominal owner is a trust or other
entity which holds the contract as an agent for a
natural person. However, this special exception will
not apply in the case of any employer who is the
nominal owner of a contract under a non-qualified
deferred compensation arrangement for its employees.
In addition, exceptions to the general rule for
non-natural owners will apply with respect to (1)
contracts acquired by an estate of a decedent by reason
of the death of the decedent, (2) certain contracts
issued in connection with qualified retirement plans,
(3) contracts purchased by employers upon the
termination of certain qualified retirement plans, (4)
certain contracts used in connection with structured
settlement agreements, and (5) contracts purchased with
a single purchase payment when the annuity starting
date (as defined in the tax law) is no later than a
year from purchase of the contract and substantially
equal periodic payments are made, not less frequently
than annually, during the annuity period.
The remainder of this discussion assumes that the
Contract will be treated as an annuity contract for
federal income tax purposes.
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Taxation of Partial Withdrawals and Surrenders
In the case of a partial withdrawal prior to the annuity
commencement date, amounts received generally are includible
in income to the extent the owner's cash value (determined
without regard to any surrender charge, within the meaning
of the tax law) before the surrender exceeds his or her
"investment in the contract." In the case of a surrender of
the Contract for the cash surrender value, amounts received
are includible in income to the extent they exceed the
"investment in the contract." For these purposes, the
investment in the Contract at any time equals the total of
the premium payments made under the Contract to that time
(to the extent such payments were neither deductible when
made nor excludable from income as, for example, in the case
of certain contributions to IRAs and other qualified
retirement plans) less any amounts previously received from
the Contract which were not includible in income.
In the case of systematic partial withdrawals, the amount of
each withdrawal will generally be taxed in the same manner
as a partial withdrawal made prior to the annuity
commencement date, as described above. However, there is
some uncertainty regarding the tax treatment of systematic
partial withdrawals, and it is possible that additional
amounts may be includible in income.
The Contract provides a death benefit that in certain
circumstances may exceed the greater of the premium payments
and the Accumulation Value. As described elsewhere in this
prospectus, First Golden imposes certain charges with
respect to the death benefit. It is possible that some
portion of those charges could be treated for federal tax
purposes as a partial withdrawal from the Contract.
In certain circumstances, surrender charges may be waived
because of the owner's need for extended medical care or
because of the owner's terminal illness. Distributions made
in respect of which surrender charges are waived are treated
as partial withdrawals or surrenders, as the case may be,
for income tax purposes.
Taxation of Annuity Payments
Normally, the portion of each annuity payment taxable as
ordinary income is equal to the excess of the payment over
the exclusion amount. In the case of fixed annuity
payments, the exclusion amount is the amount determined by
multiplying (1) the fixed annuity payment by (2) the ratio
of the "investment in the contract" (defined above),
adjusted for any period certain or refund feature, allocated
to the fixed annuity option to the total expected amount of
fixed annuity payments for the period of the Contract
(determined under Treasury Department regulations). In the
case of variable annuity payments, the exclusion amount for
each variable annuity payment is a specified dollar amount
equal to the investment in the Contract allocated to the
variable annuity option when payments begin divided by the
number of variable payments expected to be made (determined
by Treasury Department regulations).
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Once the total amount of the investment in the Contract is
excluded using these formulas, annuity payments will be
fully taxable. If annuity payments cease because of the
death of the annuitant and before the total amount of the
investment in the Contract is recovered, the unrecovered
amount generally will be allowed as a deduction to the
annuitant or beneficiary (depending upon the circumstances).
If any amount is constructively received, within the meaning
of the tax law, from a contract (which may occur when a
death benefit becomes payable), such amount will be treated
as a partial withdrawal or surrender for federal income tax
purposes unless it is applied under an annuity option within
60 days after the time when such amount was constructively
received. In any event, however, payments must comply with
applicable Federal tax law distribution requirements.
Taxation of Death Benefit Proceeds
Prior to the annuity commencement date, amounts may be
distributed from a contract because of the death of an owner
or, in certain circumstances, the death of the annuitant.
Such death benefit proceeds are includible in income as
follows: (1) if distributed in a lump sum, they are taxed in
the same manner as a 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.
After the annuity commencement date, where a guaranteed
period exists under an annuity option and the annuitant dies
before the end of that period, payments made to the
beneficiary for the remainder of that period are includible
in income as follows: (1) if received in a lump sum, they
are includible in income to the extent that they exceed the
unrecovered investment in the contract at that time, or (2)
if distributed in accordance with the existing annuity
option selected, they are fully excludable from income until
the remaining investment in the contract is deemed to be
recovered, and all annuity payments thereafter are fully
includible in income.
Assignments, Pledges, and Gratuitous Transfers
Other than in the case of contracts issued as IRAs or in
connection with certain other qualified retirement plans
(which generally cannot be assigned or pledged), any
assignment or pledge (or agreement to assign or pledge) of
any portion of the value of the contract is treated for
federal income tax purposes as a partial withdrawal of such
amount or portion. The investment in the Contract is
increased by the amount includible as income with respect to
such assignment or pledge, though it is not affected by any
other aspect of the assignment or pledge (including its
release). If an owner transfers a contract without adequate
consideration to a person other than the owner's spouse (or
to a former spouse incident to divorce), the owner will be
taxed on the difference between the cash surrender value
(within the meaning of the tax law) and the investment in
the contract at the time of transfer. In such case, the
transferee's investment in the contract will be increased to
reflect the increase in the transferor's income.
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Section 1035 Exchanges
Code section 1035 provides that no gain or loss is
recognized when an annuity contract is received in exchange
for a life, endowment, or annuity contract, provided that no
cash or other property is received in the exchange
transaction. Special rules and procedures apply in order
for an exchange to meet the requirements of section 1035.
Also, there are additional tax considerations involved when
the contracts are issued in connection with qualified
retirement plans. Prospective owners of this Contract
should consult a tax advisor before entering into a section
1035 exchange (with respect to non-qualified annuity
contracts) or a trustee-to-trustee transfer or rollover
(with respect to qualified annuity contracts).
Penalty Tax on Premature Distributions
Where a contract has not been issued as an IRA or in
connection with another qualified retirement plan, there
generally is a 10% penalty tax on the taxable amount of any
payment from the contract unless the payment is: (a)
received on or after the owner reaches age 59 1/2;
(b) attributable to the owner's becoming disabled (as
defined in the tax law); (c) made on or after the death of
the owner or, if the owner is not an individual, on or after
the death of the primary annuitant (as defined in the tax
law); (d) made as a series of substantially equal periodic
payments (not less frequently than annually) for the life
(or life expectancy) of the owner or the joint lives (or
joint life expectancies) of the owner and a designated
beneficiary (as defined in the tax law), or (e) made under a
contract purchased with a single purchase payment when the
annuity starting date (as defined in the tax law) is no
later than a year from purchase of the contract and
substantially equal periodic payments are made, not less
frequently than annually, during the annuity period.
In the case of systematic partial withdrawals, it is unclear
whether such withdrawals will qualify for exception (d)
above. (For reporting purposes, we currently treat such
withdrawals as if they do not qualify for this exception).
In addition, if withdrawals are of interest amounts only, as
is the case with systematic partial withdrawals from a Fixed
Allocation, exception (d) will not apply.
Aggregation of Contracts
In certain circumstances, the amount of an annuity payment,
withdrawal or surrender from a contract that is includible
in income is determined by combining some or all of the
annuity contracts owned by an individual not issued in
connection with qualified retirement plans. For example, if
a person purchases two or more deferred annuity contracts
from the same insurance company (or its affiliates) during
any calendar year, all such contracts will be treated as one
contract for purposes of determining whether any payment not
received as an annuity (including withdrawals and surrenders
prior to the annuity commencement date) is includible in
income. In addition, if a person purchases a Contract
offered by this prospectus and also purchases at
approximately the same time an
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immediate annuity, the IRS
may treat the two contracts as one contract. The effects of
such aggregation are not clear, however, it could affect the
time when income is taxable and the amount which might be
subject to the 10% penalty tax described above.
IRA Contracts and Other Qualified Retirement Plans
In General
In addition to issuing the Contracts as non-qualified
annuities, First Golden also currently issues the Contracts
as IRAs. (As indicated above, in this prospectus, IRAs are
referred to as "qualified plans.") First Golden may also
issue the Contracts in connection with certain other types
of qualified retirement plans which receive favorable
treatment under the Code. Numerous special tax rules apply
to the owners under IRAs and other qualified retirement
plans and to the contracts used in connection with such
plans. These tax rules vary according to the type of plan
and the terms and conditions of the plan itself. For
example, for both surrenders and annuity payments under
certain contracts issued in connection with qualified
retirement plans, there may be no "investment in the
contract" and the total amount received may be taxable.
Also, special rules apply to the time at which distributions
must commence and the form in which the distributions must
be paid. Therefore, no attempt is made to provide more than
general information about the use of contracts with the
various types of qualified retirement plans. A qualified
tax advisor should be consulted before purchase of a
Contract in connection with a qualified retirement plan.
When issued in connection with a qualified retirement plan,
a Contract will be amended as necessary to conform to the
requirements of the plan. However, owners, annuitants, and
beneficiaries are cautioned that the rights of any person to
any benefits under qualified retirement plans may be subject
to the terms and conditions of the plans themselves,
regardless of the terms and conditions of the Contract. In
addition, First Golden is not bound by terms and conditions
of qualified retirement plans to the extent such terms and
conditions contradict the Contract, unless First Golden
consents.
Individual Retirement Annuities
As indicated above, First Golden currently issues the
Contract as an IRA. If the Contract is used for this
purpose, the owner must be the annuitant.
Premium Payments. Both the premium payments that may
be paid, and the tax deduction that the owner may claim
for such premium payments, are limited under an IRA.
In general, the premium payments that may be made for
an IRA for any year are limited to the lesser of $2,000
or 100% of the owner's earned income for the year.
Also, in the case of an individual who has a
noncompensated spouse, premium payments may be made
into an IRA for the benefit of the spouse. In such a
case, however, the premium payments that may be made for the
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spouse's IRA for any year are limited to the
lesser of $2,000 or the excess of (1) $2,250 (or, if
less, 100% of the individual's earned income) over (2)
the individual's premium payments for his or her own
IRA. An excise tax is imposed on IRA contributions
that exceed the law's limits.
The deductible amount of the premium payments made for
an IRA for any taxable year (including a contract for a
noncompensated spouse) is limited to the amount of
premium payments that may be paid for the contract for
that year, or a lesser amount where the individual or
his or her spouse is an active participant in certain
qualified retirement plans. For a single person who is
an active participant in a qualified retirement plan
(including a qualified pension, profit-sharing, or
annuity plan, a simplified employee pension plan, or a
"section 403(b)" annuity plan, as discussed below) and
who has adjusted gross income in excess of $35,000 may
not deduct premium payments, and such a person with
adjusted gross income between $25,000 and $35,000 may
deduct only a portion of such payments. Also, married
persons who file a joint return, one of whom is an
active participant in a qualified retirement plan, and
who have adjusted gross income in excess of $50,000 may
not deduct premium payments, and those with adjusted
gross income between $40,000 and $50,000 may deduct
only a portion of such payments. Married persons
filing separately may not deduct premium payments if
either the taxpayer or the taxpayer's spouse is an
active participant in a qualified retirement plan.
In applying these and other rules applicable to an IRA,
all individual retirement accounts and IRAs owned by an
individual are treated as one contract, and all amounts
distributed during any taxable year are treated as one
distribution.
Tax Deferral During Accumulation Period. Until
distributions are made from an IRA, increases in the
Accumulation Value of the contract are not taxed.
IRAs and individual retirement accounts (that may
invest in this contract) generally may not invest in
life insurance contracts, but an annuity contract that
is issued as an IRA (or that is purchased by an
individual retirement account) may provide a death
benefit that equals the greater of the premiums paid
and the contract's cash value. The Contract provides a
death benefit that in certain circumstances may exceed
the greater of the premium payments and the
Accumulation Value. The IRS has approved the use of
the Contract, as to form, as an IRA.
Taxation of Distributions and Rollovers. If all
premium payments made to an IRA were deductible, all
amounts distributed from the Contract are included in
the recipient's income when distributed. However, if
nondeductible premium payments were made to an IRA
(within the limits allowed by the tax laws), a portion
of each distribution from the Contract typically is
includible in income
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when it is distributed. In such a
case, any amount distributed as an annuity payment or
in a lump sum upon death or surrender is taxed as
described above in connection with such a distribution
from a non-qualified contract, treating as the
investment in the contract the sum of the nondeductible
premium payments at the end of the taxable year in
which the distribution commences or is made (less any
amounts previously distributed that were excluded from
income). Also, in such a case, any amount distributed
upon a partial withdrawal is partially includible in
income. The includible amount is the excess of the
distribution over the exclusion amount, which in turn
equals the distribution multiplied by the ratio of the
investment in the Contract to the Accumulation Value.
In any event, subject to the direct rollover and
mandatory withholding requirements (discussed below),
amounts may be "rolled over" from certain qualified
retirement plans to an IRA (or from one IRA or
individual retirement account to an IRA) without
incurring current income tax if certain conditions are
met. Only certain types of distributions to eligible
individuals from qualified retirement plans, individual
retirement accounts, and IRAs may be rolled over.
Penalty Taxes. Subject to certain exceptions, a
penalty tax is imposed on distributions from an IRA
equal to 10% of the amount of the distribution
includible in income. (Amounts rolled over from an IRA
generally are excludable from income.) The exceptions
provide, however, that this penalty tax does not apply
to distributions made to the owner (1) on or after age
59 1/2, (2) on or after death or because of disability (as
defined in the tax law), or (3) as part of a series of
substantially equal periodic payments over the life (or
life expectancy) of the owner or the joint lives (or
joint life expectancies) of the owner and his or her
beneficiary (as defined in the tax law). In addition
to the foregoing, failure to comply with a minimum
distribution requirement will result in the imposition
of a penalty tax of 50% of the amount by which a
minimum required distribution exceeds the actual
distribution from an IRA. Under this requirement,
distributions of minimum amounts from an IRA as
specified in the tax law must generally commence by
April 1 of the calendar year following the calendar
year in which the owner attains age 70 1/2.
Other Types of Qualified Retirement Plans
The following sections describe tax considerations of
contracts used in connection with various types of qualified
retirement plans other than IRAs. First Golden does not
currently offer all of the types of qualified retirement
plans described and may not offer them in the future.
Prospective purchasers of contracts for use in connection
with such qualified retirement plans should therefore
contact First Golden's Customer Service Center to ascertain
the availability of the Contract for qualified retirement
plans at any given time.
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Simple Incentive Match Plans for Employees of Small
Employers (Simple). Section 408(p) of the Code allows
employers to establish Simple retirement account plans for
its employees. The Code permits establishment of a plan
under which employees may make contributions pursuant to
salary reduction agreements, subject to limits as to amount.
These plans may be adopted by employers with no more than
100 employees, if the employer has no other pension plan.
Contributions to the plan by the employer on behalf of the
employees match a percentage of the employees'
contributions, subject to certain prescribed limits.
Accounts established for the employees are IRAs with certain
added restrictions on premature distributions and
contributions. Employers intending to use the contract in
connection with such plans should seek competent advise.
Simple Savings Plans
Contracts funding Simple plans are subject to the same
general rules as IRAs, however, there are several unique
differences relating to contribution limits, employers
contributions and premature distributions. In addition,
because this is an employer sponsored plan, certain Simple
plan requirements are applicable to the employer and not the
individual tax payer.
Plan Requirements. Only employers with no more than 100
eligible employees may adopt a Simple plan. Eligible
employees are those who have had at least $5000 of
compensation in the preceding year. The employer may not be
a plan sponsor of any other qualified plan.
Employer Contributions. The employer may elect to make non-
elective 2% contributions for each employee or may elect a
matching contribution from 1 to 3% varying each year,
subject to certain restrictions. All employer contributions
are immediately fully vested to the employee when made.
Employee Contributions. Employee contributions of up to
$6000 of compensation may be made by eligible employees.
All employee contributions must be made by a salary
reduction arrangement with their employer. Employee
contributions may be for any percent of compensation.
Distributions. Distributions from a Simple retirement
account by an employee are subject to the same rules as IRAs
and the following additional rule. Any amount received from
a Simple retirement account during the two year period and
employee first participated in any qualified salary
reduction arrangement is subject to a penalty equal to 25%
of the amount of the distribution in addition to being fully
taxable.
Simplified Employee Pensions (SEP-IRAs). Section 408(k) of
the Code allows employers to establish simplified employee
pension plans for their employees, using the employees' IRAs
for such purposes, if certain criteria are met. Under these
plans the employer may, within specified limits, make
deductible contributions on behalf of the employees to
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IRAs. Employers intending to use the contract in connection with
such plans should seek competent advice.
Corporate and Self-Employed ("H.R. 10" or "Keogh") Pension
and Profit-Sharing Plans. Sections 401(a) and 403(a) of the
Code permit corporate employers to establish various types
of tax-favored retirement plans for employees. The
Self-Employed Individuals' Tax Retirement Act of 1962, as
amended, commonly referred to as "H.R. 10" or "Keogh,"
permits self-employed individuals also to establish such
tax-favored retirement plans for themselves and their
employees. Such retirement plans may permit the purchase of
the Contract in order to provide benefits under the plans.
The Contract provides a death benefit that in certain
circumstances may exceed the greater of the premium payments
and the Accumulation Value. It is possible that such death
benefit could be characterized as an incidental death
benefit. There are limitations on the amount of incidental
benefits that may be provided under pension and profit
sharing plans. In addition, the provision of such benefits
may result in currently taxable income to participants.
Employers intending to use the contract in connection with
such plans should seek competent advice.
Section 403(b) Annuity Contracts. Section 403(b) of the
Code permits public school employees, employees of certain
types of charitable, educational and scientific
organizations exempt from tax under section 501(c)(3) of the
Code, and employees of certain types of State educational
organizations specified in section 170(b)(l)(A)(ii), to have
their employers purchase annuity contracts for them and,
subject to certain limitations, to exclude the amount of
premium payments from gross income for federal income tax
purposes. Purchasers of the contracts for use as a "Section
403(b) Annuity Contract" should seek competent advice as to
eligibility, limitations on permissible amounts of premium
payments and other tax consequences associated with such
contacts. In particular, purchasers and their advisors
should consider that this contract provides a death benefit
that in certain circumstances may exceed the greater of the
premium payments and the Accumulation Value. It is possible
that such death benefit could be characterized as an
incidental death benefit. If the death benefit were so
characterized, this could result in currently taxable income
to purchasers. In addition, there are limitations on the
amount of incidental death benefits that may be provided
under a Section 403(b) Annuity Contract. Even if the death
benefit under the contract were characterized as an
incidental death benefit, it is unlikely to violate those
limits unless the purchaser also purchases a life insurance
contract as part of his or her Section 403(b) Annuity
Contract.
Section 403(b) Annuity Contracts contain restrictions on
withdrawals of (i) contributions made pursuant to a salary
reduction agreement in years beginning after December 31,
1988, (ii) earnings on those contributions, and (iii)
earnings after 1988 on amounts attributable to salary
reduction contributions (and earnings on those
contributions) held as of the last year beginning before
January 1, 1989. These amounts can be paid only if the
employee has reached age 59 1/2, separated from service, died,
become disabled (within the meaning of the tax law), or in
the case of hardship. Amounts permitted to be distributed
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in the event of hardship are limited to actual
contributions; earnings thereon cannot be distributed on
account of hardship. (These limitations on withdrawals do
not apply to the extent First Golden is directed to transfer
some or all of the Accumulation Value as a tax-free direct
transfer to the issue of another Section 403(b) Annuity
Contract or into a section 403(b)(7) custodial account
subject to withdrawal restrictions which are at least as
stringent.)
Eligible Deferred Compensation Plans of State and Local
Governments and Tax-Exempt Organizations. Section 457 of
the Code permits employees of state and local governments
and tax-exempt organizations to defer a portion of their
compensation without paying current federal income taxes.
The employees must be participants in an eligible deferred
compensation plan. To the extent the contract is used in
connection with an eligible plan, the employer as owner of
the contract has the sole right to the proceeds of the
contract, until paid or made available to the participant or
other recipient, subject only to the claims of the
employer's general creditors. Generally, a contract
purchased by a state or local government or a tax-exempt
organization will not be treated as an annuity contract for
federal income tax purposes. Those who intend to use the
contracts in connection with such plans should seek
competent advice.
Direct Rollovers and Federal Income Tax Withholding for
"Eligible Rollover Distributions."
In the case of an annuity contract used in connection with a
pension, profit-sharing, or annuity plan qualified under
sections 401(a) or 403(a) of the Code, or that is a Section
403(b) Annuity Contract, any "eligible rollover
distribution" from the contract will be subject to direct
rollover and mandatory withholding requirements. An
eligible rollover distribution generally is the taxable
portion of any distribution from a qualified pension plan
under section 401(a) of the Code, qualified annuity plan
under Section 403(a) of the Code, or Section 403(b) Annuity
or custodial account, excluding certain amounts (such as
minimum distributions required under section 401(a)(9) of
the Code and distributions which are part of a "series of
substantially equal periodic payments" made for the life (or
life expectancy) of the employee, or for the joint lives (or
joint life expectancies) of the employee and the employee's
designated beneficiary (within the meaning of the tax law),
or for a specified period of 10 years or more).
Under these new requirements, federal income tax equal to
20% of the eligible rollover distribution will be withheld
from the amount of the distribution. Unlike withholding on
certain other amounts distributed from the contract,
discussed below, the taxpayer cannot elect out of
withholding with respect to an eligible rollover
distribution. However, this 20% withholding will not apply
to that portion of the eligible rollover distribution which,
instead of receiving, the taxpayer elects to have directly
transferred to certain eligible retirement plans (such as to
this contract when issued as an IRA).
If this contract is issued in connection with a pension,
profit-sharing, or annuity plan qualified under sections
401(a) or 403(a) of the Code, or is a Section 403(b) Annuity
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Contract, then, prior to receiving an eligible rollover
distribution, the owner will receive a notice (from the plan
administrator or First Golden) explaining generally the
direct rollover and mandatory withholding requirements and
how to avoid the 20% withholding by electing a direct
transfer.
Federal Income Tax Withholding
First Golden will withhold and remit to the federal
government a part of the taxable portion of each distribution
made under the Contract unless the distributee notifies First
Golden at or before the time of the distribution that he or she
elects not to have any amounts withheld. In certain
circumstances, First Golden may be required to withhold tax, as
explained above. The withholding rates applicable to the taxable
portion of periodic annuity payments (other than eligible
rollover distributions) are the same as the withholding rates
generally applicable to payments of wages. In addition, the
withholding rate applicable to the taxable portion of
non-periodic payments (including surrenders prior to the annuity
commencement date) is 10%. Regardless of whether you elect to
have federal income tax withheld, you are still liable for
payment of federal income tax on the taxable portion of the
payment. As discussed above, the withholding rate applicable to
eligible rollover distributions is 20%.
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First Golden Life Insurance Company of New York
___________, 1996
__________________________________________________________________
STATEMENT OF ADDITIONAL INFORMATION
__________________________________________________________________
TABLE OF CONTENTS
ITEM PAGE
INTRODUCTION
Description of First Golden American Life Insurance Company
of New York
Safekeeping of Assets
The Administrator
Independent Auditors
Reinsurance
Distribution of Contracts
Performance Information
IRA Partial Withdrawal Option
Other Information
Financial Statements of Separate Account NY-B
Appendix - Description of Bond Ratings
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(This page has been intentionally left blank.)
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__________________________________________________________________
STATEMENT OF ADDITIONAL INFORMATION (continued)
__________________________________________________________________
Please tear off, complete and return the form below to order a
free Statement of Additional Information for the Contracts
offered under the prospectus. Address the form to our Customer
Service Center, the address is shown on the cover.
PLEASE SEND ME A FREE COPY OF THE STATEMENT OF ADDITIONAL
INFORMATION FOR SEPARATE ACCOUNT NY-B
Please Print or Type
|------------------------------------------------------------------------|
| |
| Name: __________________________________________ |
| |
| __________________________________________ |
| |
| Social Security Number: __________________________________________ |
| |
| Street Address: __________________________________________ |
| |
| __________________________________________ |
| |
| City, State, Zip: __________________________________________ |
| |
|------------------------------------------------------------------------|
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Appendix A
Market Value Adjustment Examples
Example #1: Full Surrender - Example of a Negative Market Value
Adjustment
Assume $100,000 was allocated to a Fixed Allocation with a
Guarantee Period of ten years, a Guaranteed Interest Rate of
7.50%, an initial Index Rate ("I") of 7.00%; that a full
surrender is requested three years into the Guarantee Period;
that the then Index Rate for a seven year Guarantee Period ("J")
is 8.0%; and that no prior transfers or partial withdrawals
affecting this Fixed Allocation have been made.
Calculate the Market Value Adjustment
1. The Accumulation Value of the Fixed Allocation on the
date of surrender is $124,230 ($100,000 x 1.0753)
2. N = 2,555 (365 x 7)
3. Market Value Adjustment =
$124,230 X ((1.07/1.0825)^(2,555/265)-1)= $9,700
Therefore, the amount paid to you on full surrender ignoring any
surrender charge is $114,530 ($124,230 - $9,700).
Example #2: Full Surrender - Example of a Positive Market Value
Adjustment
Assume $100,000 was allocated to a Fixed Allocation with a
Guarantee Period of ten years, a Guaranteed Interest Rate of
7.5%, an initial Index Rate ("I") of 7.00%; that a full
surrender is requested three years into the Guarantee
Period; that the then Index Rate for a seven year Guarantee
Period ("J") is 6.0%; and that no prior transfers or partial
withdrawals affecting this Fixed Allocation have been made.
Calculate the Market Value Adjustment
1. The Accumulation Value of the Fixed Allocation on the
date of surrender is $124,230 ($100,000 x 1.0753)
2. N = 2,555 (365 x 7)
3. Market Value Adjustment =
$124,230 X ((1.07/1.0625)^(2,555/265)-1)= $6,270
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Therefore, the amount paid to you on full surrender ignoring
any surrender charge is $130,500 ($124,230 + $6,270).
Example #3: Partial Withdrawal - Example of a Negative Market
Value Adjustment
Assume $200,000 was allocated to a Fixed Allocation with a
Guarantee Period of ten years, a Guaranteed Interest Rate of
7.5%, an initial Index Rate ("I") of 7.00%; that a partial
withdrawal of $114,530 is requested three years into the
Guarantee period; that the then Index Rate ("J") for a seven year
Guarantee Period is 8.0%; and that no prior transfers or partial
withdrawals affecting this Fixed Allocation have been made.
First calculate the amount that must be withdrawn from the
Fixed Allocation to provide the amount requested.
1. The Accumulation Value of the Fixed Allocation on the
date of withdrawal is $248,459 ($200,000 x 1.0753)
2. N = 2,555 (365 x 7)
3. Amount that must be withdrawn =
($114,530 / ((1.07/1.0825)^(2,555/265))= $124,230
Then calculate the Market Value Adjustment on that amount
4. Market Value Adjustment =
$124,230 X ((1.07/1.0825)^(2,555/265)-1)= $9,700
Therefore, the amount of the partial withdrawal paid to you
is $114,530, as requested. The Fixed Allocation will be reduced
by the amount of the partial withdrawal, $114,530, and also
reduced by the Market Value Adjustment of $9,700, for a total
reduction in the Fixed Allocation of $124,230.
Example #4: Partial Withdrawal - Example of a Positive Market
Value Adjustment
Assume $200,000 was allocated to a Fixed Allocation with a
Guarantee Period of ten years, a Guaranteed Interest Rate of
7.5%, an initial Index Rate of 7.0%; that a partial withdrawal of
$130,500 requested three years into the Guarantee Period; that
the then Index Rate ("J") for a
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seven year Guarantee Period is
6.0%; and that no prior transfers or partial withdrawals
affecting this Fixed Allocation have been made.
First calculate the amount that must be withdrawn from the
Fixed Allocation to provide the amount requested.
1. The Accumulation Value of Fixed Allocation on the date
of surrender is $248,459 ($200,000 x 1.0753)
2. N = 2,555 (365 x 7)
3. Amount that must be withdrawn =
($130,500 / ((1.07/1.0625)^(2,555/265))= $124.300
Then calculate the Market Value Adjustment on that amount
4. Market Value Adjustment =
$124,230 X ((1.07/1.0625)^(2,555/265)-1)= $6,270
Therefore, the amount of the partial withdrawal paid to you
is $130,500, as requested. The Fixed Allocation will be reduced
by the amount of the partial withdrawal, $130,500, but increased
by the Market Value Adjustment of $6,270, for a total reduction
in the Fixed Allocation of $124,230.
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PART B
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<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
DVA PLUS
DEFERRED COMBINATION VARIABLE
AND FIXED ANNUITY CONTRACT
issued by
SEPARATE ACCOUNT NY-B
("Account NY-B" or the "Account")
of
FIRST GOLDEN AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A
PROSPECTUS. THE INFORMATION CONTAINED HEREIN SHOULD BE READ IN
CONJUNCTION WITH THE PROSPECTUS FOR THE FIRST GOLDEN AMERICAN
LIFE INSURANCE COMPANY OF NEW YORK DEFERRED COMBINATION VARIABLE
AND FIXED ANNUITY CONTRACT WHICH IS REFERRED TO HEREIN.
THE PROSPECTUS SETS FORTH INFORMATION THAT A PROSPECTIVE
INVESTOR OUGHT TO KNOW BEFORE INVESTING. FOR A COPY OF THE
PROSPECTUS, SEND A WRITTEN REQUEST TO FIRST GOLDEN AMERICAN LIFE
INSURANCE COMPANY OF NEW YORK, CUSTOMER SERVICE CENTER, P.O. BOX
8794, WILMINGTON, DE 19899-8794 OR TELEPHONE 1-800-366-0066.
Date of Prospectus and
Statement of Additional Information:
___________, 1996
<PAGE>
<PAGE>
TABLE OF CONTENTS
ITEM PAGE
INTRODUCTION 1
Description of First Golden American Life Insurance
Company of New York 1
Safekeeping of Assets 1
The Administrator 1
Independent Auditors 1
Distribution of Contracts 1
Performance Information 2
IRA Partial Withdrawal Option 7
Other Information 8
Financial Statements of Separate Account NY-B 8
Appendix - Description of Bond Ratings
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INTRODUCTION
This Statement of Additional Information provides background
information regarding Account NY-B.
DESCRIPTION OF FIRST GOLDEN AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK
First Golden American Life Insurance Company of New York ("First
Golden") is a stock life insurance company organized under the
laws of the State of New York. First Golden is a wholly owned
subsidiary of Golden American Life Insurance Company. Golden
American Life Insurance Company, in turn, is an indirect wholly
owned subsidiary of the Equitable of Iowa Companies, a holding
company for Equitable Life Insurance Company of Iowa, USG
Annuity & Life Company, Locust Street Securities, Inc., EIC
Variable, Inc., Equitable of Iowa Securities Network, Inc. and
Equitable Investment Services, Inc. As of September 30, 1996,
First Golden had approximately __ million in total assets. First
Golden is authorized to do business only in the State of New
York. First Golden offers variable annuities.
SAFEKEEPING OF ASSETS
First Golden American acts as its own custodian for Account NY-B.
THE ADMINISTRATOR
[INFORMATION TO BE PROVIDED]
INDEPENDENT AUDITORS
Ernst & Young LLP, Chicago, IL, independent auditors, will
perform annual audits of First Golden and the Account.
DISTRIBUTION OF CONTRACTS
First Golden has entered into agreements with Directed Services,
Inc. ("DSI") to perform services related to the distribution of
its products. DSI acts as the principal underwriter (as defined
in the Securities Act of 1933 and the Investment Company Act of
1940, as amended) of the variable insurance products issued by
First Golden.
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[First Golden provides to DSI certain of its personnel to perform
management, administrative and clerical services and the use of
certain facilities. First Golden charges DSI for such expenses
and all other general and administrative costs, first on the
basis of direct charges when identifiable, and the remainder
allocated based on the estimated amount of time spent by First
Golden's employees on behalf of DSI. In the opinion of
management, this method of cost allocation is reasonable.]
PERFORMANCE INFORMATION
Performance information for the divisions of Account NY-B,
including the yield and effective yield of the Liquid Asset
Division, the yield of the remaining divisions, and the total
return of all divisions, may appear in reports or promotional
literature to current or prospective owners. Negative values are
denoted by parentheses. Performance information for measures
other than total return do not reflect sales load which can have
a maximum level of 6% of premium, and any applicable premium tax
that can range from 0% to 3.5%. As described in the prospectus,
two death benefit options are available. The following
performance values reflect the election at issue of the Annual
Ratchet Death Benefit Option providing the most conservative
perspective. If the Standard Death Benefit Option had been
elected, the historical performance values would be higher than
those represented in the examples.
Set forth below is the performance information for each Division
for specified periods ending ____________, 1996. For the periods
prior to the date the Divisions commenced operations performance
information for the individual deferred variable annuity
contracts (the "Contracts") is calculated based on the
performance of the assumption that the Divisions were in
existence for the same periods as those indicated for the
underlying Series, with the level of Contract Charges that were
in effect at the inception of the Divisions (this is referred to
as "hypothetical performance date"). This information does not
indicate or represent future performance.
SEC Standard Money Market Division Yields
Current yield for the Liquid Asset Division will be based on the
change in the value of a hypothetical investment (exclusive of
capital changes) over a particular 7-day period, less a pro-rata
share of division expenses accrued over that period (the "base
period"), and stated as a percentage of the investment at the
start of the base period (the "base period return"). The base
period return is then annualized by multiplying by 365/7, with
the resulting yield figure carried to at least the nearest
hundredth of one percent. Calculation of "effective yield"
begins with the same "base period return" used in the calculation
of yield, which is then annualized to reflect weekly compounding
pursuant to the following formula:
Effective Yield = [(Base Period Return) +1) ^ 365/7] - 1
SEC Standard 30-Day Yield for Non-Money Market Divisions
Quotations of yield for the remaining divisions will be based on
all investment income per Unit (accumulation value divided by the
index of investment experience) earned during a particular 30-
2
<PAGE>
<PAGE>
day
period, less expenses accrued during the period ("net investment
income"), and will be computed by dividing net investment income
by the value of an accumulation unit on the last day of the
period, according to the following formula:
YIELD = 2 [ ( a - b + 1) ^ 6 - 1]
-----
cd
Where:
[a] equals the net investment income earned
during the period by the Series attributable
to shares owned by a division
[b] equals the expenses accrued for the period
(net of reimbursements)
[c] equals the average daily number of Units
outstanding during the period based on the
index of investment experience
[d] equals the value maximum offering price per
index of investment experience on the last
day of the period
Yield on divisions of Account NY-B is earned from the increase in
net asset value of shares of the Series in which the Division
invests and from dividends declared and paid by the Series, which
are automatically reinvested in shares of the Series.
SEC (ASecurities and Exchange Commission@) Standard Average
Annual Total Return for Non-Money Market Divisions
Quotations of average annual total return for any Division will
be expressed in terms of the average annual compounded rate of
return of a hypothetical investment in a contract over a period
of one, five and 10 years (or, if less, up to the life of the
series), calculated pursuant to the formula:
P(1+T) ^ n = ERV
Where:
(1) [P] equals a hypothetical initial premium
payment of $1,000
(2) [T] equals an average annual total return
(3) [n] equals the number of years
(4) [ERV] equals the ending redeemable value of a
hypothetical $1,000 initial premium payment
made at the beginning of the period (or
fractional portion thereof)
3
<PAGE>
<PAGE>
All total return figures reflect the deduction of the maximum
sales load, the administrative charges, and the mortality and
expense risk charges. The SEC requires that an assumption be
made that the contract owner surrenders the entire contract at
the end of the one, five and 10 year periods (or, if less, up to
the life of the security) for which performance is required to be
calculated. This assumption may not be consistent with the
typical contract owner's intentions in purchasing a contract and
may adversely affect returns. Quotations of total return may
simultaneously be shown for other periods, as well as quotations
of total return that do not take into account certain contractual
charges such as sales load.
Hypothetical Average Annualized Total Return for the Divisions
presented on a standardized basis for the period ending
___________, 1996 were as follows:
Hypothetical Average Annualized Total Return for Periods Ending
__/__/96 -- Standardized
<TABLE>
<CAPTION>
One Year Period Five Year Period Inception to Series
Division Ending _/__/96 Ending _/__/96 _/__/96 Inception Date
- -------- --------------- ---------------- ------------ --------------
<S> <C> <C> <C> <C>
Multiple Allocation [____]% [____]%* [____]%* 1/24/89
Fully Managed [____]% [____]%* [____]%* 1/24/89
Capital Appreciation [____]% [____]% [____]%* 5/ 4/92
Rising Dividends [____]% [____]% [____]% 10/ 4/93
All-Growth [____]% [____]%* [____]%* 1/24/89
Real Estate [____]% [____]%* [____]%* 1/24/89
Natural Resources [____]% [____]%* [____]%* 1/24/89
Value Equity [____]% [____]% [____]% 1/ 1/95
Strategic Equity [____]% [____]% [____]%* 10/ 2/95
Small Cap [____]% [____]% [____]% 1/ 2/96
Emerging Markets [____]% [____]% [____]% 10/ 4/93
Managed Global [____]%* [____]% [____]% 10/21/92
OTC [____]%* N/A [____]%* 10/ 4/94
Growth & Income N/A N/A [____]%* 4/ 1/96
Research [____]%* N/A [____]%* 10/ 4/94
Limited Maturity Bond [____]% [____]% [____]%* 1/24/89
Liquid Asset [____]% [____]% [____]% 1/24/89
</TABLE>
_____________________________________________________________________________
* Total return calculation reflects partial waiver of fees and expenses.
Non-Standard Average Annual Total Return for Non-Money Market
Divisions
Quotations of non-standard average annual total return for any
division will be expressed in terms of the average annual
compounded rate of return of a hypothetical investment in a
contract over a
4
<PAGE>
<PAGE>
period of one, five and 10 years (or, if less, up
to the life of the Series), calculated pursuant to the formula:
[P(1+T)^n] = ERV
Where:
(1) [P] equals a hypothetical initial premium
payment of $1,000
(2) [T] equals an average annual total return
(3) [n] equals the number of years
(4) [ERV] equals the ending redeemable value of a
hypothetical $1,000 initial premium payment
made at the beginning of the period (or
fractional portion thereof) assuming certain
loading and charges are zero.
All total return figures reflect the deduction of the mortality
and expense risk charge and the administrative charges, but not
the deduction of the maximum sales load and the annual contract
fee.
Hypothetical Average Annualized Total Return for the Divisions
presented on a non-standardized basis for the period ending
___________, 1996 were as follows:
Hypothetical Average Annualized Total Return for Periods Ending
__/__/96__ -- Non-Standardized
<TABLE>
<CAPTION>
One Year Period Five Year Period Inception to Series
Division Ending _/__/96 Ending _/__/96 _/__/96 Inception Date
- -------- --------------- ---------------- ------------ --------------
<S> <C> <C> <C> <C>
Multiple Allocation [____]% [____]%* [____]%* 1/24/89
Fully Managed [____]% [____]%* [____]%* 1/24/89
Capital Appreciation [____]% [____]% [____]%* 5/ 4/92
Rising Dividends [____]% [____]% [____]% 10/ 4/93
All-Growth [____]% [____]%* [____]%* 1/24/89
Real Estate [____]% [____]%* [____]%* 1/24/89
Natural Resources [____]% [____]%* [____]%* 1/24/89
Value Equity [____]% [____]% [____]% 1/ 1/95
Strategic Equity [____]% [____]% [____]%* 10/ 2/95
Small Cap [____]% [____]% [____]% 1/ 2/96
Emerging Markets [____]% [____]% [____]% 10/ 4/93
Managed Global [____]%* [____]% [____]% 10/21/92
OTC [____]%* N/A [____]%* 10/ 4/94
Growth & Income N/A N/A [____]%* 4/ 1/96
Research [____]%* N/A [____]%* 10/ 4/94
Limited Maturity Bond [____]% [____]% [____]%* 1/24/89
Liquid Asset [____]% [____]% [____]% 1/24/89
</TABLE>
_____________________________________________________________________________
* Total return calculation reflects partial waiver of fees and expenses.
5
<PAGE>
<PAGE>
Performance information for a Division may be compared, in
reports and promotional literature, to: (i) the Standard & Poor's
500 Stock Index ("S&P 500"), Dow Jones Industrial Average
("DJIA"), Donoghue Money Market Institutional Averages, or other
indices that measure performance of a pertinent group of
securities so that investors may compare a Division's results
with those of a group of securities widely regarded by investors
as representative of the securities markets in general; (ii)
other groups of variable annuity separate accounts or other
investment products tracked by Lipper Analytical Services, a
widely used independent research firm which ranks mutual funds
and other investment companies by overall performance, investment
objectives, and assets, or tracked by other services, companies,
publications, or persons who rank such investment companies on
overall performance or other criteria; and (iii) the Consumer
Price Index (measure for inflation) to assess the real rate of
return from an investment in the Contract. Unmanaged indices may
assume the reinvestment of dividends but generally do not reflect
deductions for administrative and management costs and expenses.
Performance information for any Division reflects only the
performance of a hypothetical contract under which accumulation
value is allocated to a Division during a particular time period
on which the calculations are based. Performance information
should be considered in light of the investment objectives and
policies, characteristics and quality of the portfolio of the
Series of the trust in which the Account NY-B Divisions invest,
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.
Reports and promotional literature may also contain other
information including the ranking of any Division derived from
rankings of variable annuity separate accounts or other
investment products tracked by Lipper Analytical Services or by
other rating services, companies, publications, or other persons
who rank separate accounts or other investment products on
overall performance or other criteria.
Published Ratings
From time to time, the rating of First Golden as an insurance
company by A.M. Best Company may be referred to in advertisements
or in reports to contract owners. Each year 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. Best's
ratings range from A++ to F.
6
<PAGE>
<PAGE>
Index of Investment Experience
The calculation of the Index of Investment Experience ("IIE") is
discussed in the prospectus for the Contracts under Measurement
of Investment Experience. The following illustrations show a
calculation of a new IIE and the purchase of Units (using
hypothetical examples). Note that the examples below are
calculated for a Contract issued with the Annual Ratchet Death
Benefit Option, the death benefit option with the highest
mortality and expense risk charge. The mortality and expense
risk charge associated with the Standard Death Benefit Option is
lower than that used in the examples and would result in higher
IIE's or Accumulation Values.
Illustration of Calculation of IIE
Example 1.
1. IIE, beginning of period $ 10.00
2. Value of securities, beginning of period $ 10.00
3. Change in value of securities $ 0.10
4. Gross investment return (3) divided by (2) 0.01
5. Less daily mortality and expense charge
6. Less asset based administrative charge
7. Net investment return (4) minus (5) minus (6)
8. Net investment factor (1.000000) plus (7)
9. IIE, end of period (1) multiplied by (8)
Illustration of Purchase of Units (Assuming No State Premium Tax)
Example 2.
1. Initial Premium Payment $ 1,000
2. IIE on effective date of purchase (see Example 1) $ 10.00
3. Number of Units purchased [(1) divided by (2)] 100
4. IIE for valuation date following purchase (see
Example 1)
5. Accumulation Value in account for valuation date
following purchase [(3) multiplied by (4)]
IRA PARTIAL WITHDRAWAL OPTION
If the contract owner has an IRA contract and will attain age 70
2 in the current calendar year, distributions will be made in
accordance with the requirements of Federal tax law. This option
is available to assure that the required minimum distributions
from qualified plans under the Internal Revenue Code (the "Code")
are made. Under the Code, distributions must begin no later than
April 1st of the calendar year following the calendar year in
which the contract owner attains age 70 2. If the required
minimum distribution is not withdrawn, there may be a penalty tax
in an amount equal to 50% of the difference between the amount
required to be withdrawn and
7
<PAGE>
<PAGE>
the amount actually withdrawn. Even
if the IRA Partial Withdrawal Option is not elected,
distributions must nonetheless be made in accordance with the
requirements of Federal tax law.
First Golden notifies the contract owner of these regulations
with a letter mailed on January 1st of the calendar year in which
the contract owner reaches age 70 2 which explains the IRA
Partial Withdrawal Option and supplies an election form. If
electing this option, the owner specifies whether the withdrawal
amount will be based on a life expectancy calculated on a single
life basis (contract owner's life only) or, if the contract owner
is married, on a joint life basis (contract owner's and spouse's
lives combined). The contract owner selects the payment mode on
a monthly, quarterly or annual basis. If the payment mode
selected on the election form is more frequent than annually, the
payments in the first calendar year in which the option is in
effect will be based on the amount of payment modes remaining
when First Golden receives the completed election form.
First Golden calculates the IRA Partial Withdrawal amount each
year based on the minimum distribution rules. We do this by
dividing the accumulation value by the life expectancy. In the
first year withdrawals begin, we use the accumulation value as of
the date of the first payment. Thereafter, we use the
accumulation value on December 31st of each year. The life
expectancy is recalculated each year. Certain minimum
distribution rules govern payouts if the designated beneficiary
is other than the contract owner's spouse and the beneficiary is
more than ten years younger than the contract owner.
OTHER INFORMATION
Registration statements have been filed with the SEC under the
Securities Act of 1933 as amended, with respect to the Contracts
discussed in this Statement of Additional Information. Not all
of the information set forth in the registration statements,
amendments and exhibits thereto has been included in this
Statement of Additional Information. Statements contained in
this Statement of Additional Information concerning the content
of the Contracts and other legal instruments are intended to be
summaries. For a complete statement of the terms of these
documents, reference should be made to the instruments filed with
the Securities and Exchange Commission.
FINANCIAL STATEMENTS OF SEPARATE ACCOUNT NY-B
As of the date of this Statement of Additional Information,
Separate Account NY-B had not yet commenced operations, had no
assets or liabilities and no income. Accordingly, it has no
financial statements for prior periods.
8
<PAGE>
<PAGE>
APPENDIX: DESCRIPTION OF BOND RATINGS
Excerpts from Moody's Investors Service, Inc. ("Moody's) description of its bond
ratings:
Aaa: Judged to be the best quality; they carry the smallest degree of
investment risk.
Aa: Judged to be of high quality by all standards; together with the Aaa
group, they comprise what are generally known as high grade bonds.
A: Possess many favorable investment attributes and are to be considered
as "upper medium grade obligations."
Baa: Considered as medium grade obligations, i.e., they are neither highly
protected nor poorly secured; interest payments and principal security
appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of
time.
Ba: Judged to have speculative elements; their future cannot be considered
as well assured.
B: Generally lack characteristics of the desirable investment.
Caa: Are of poor standing; such issues may be in default or there may be
present elements of danger with respect to principal or interest.
Ca: Speculative in a high degree; often in default.
C: Lowest rate class of bonds; regarded as having extremely poor
prospects.
Moody's also applies numerical indicators 1, 2 and 3 to rating categories. The
modifier 1 indicates that the security is in the higher end of its rating
category; 2 indicates a mid-range ranking; and 3 indicates a ranking toward the
lower end of the category.
Excerpts from Standard & Poor's Rating Group ("Standard & Poor's") description
of its bond ratings:
AAA: Highest grade obligations; capacity to pay interest and repay
principal is extremely strong.
AA: Also qualify as high grade obligations; a very strong capacity to pay
interest and repay principal and differs from AAA issues only in small
degree.
A: Regarded as upper medium grade; they have a strong capacity to pay
interest and repay principal although it is somewhat more susceptible to
the adverse effects of changes in circumstances and economic conditions
than debt in higher rated categories.
BBB: Regarded as having an adequate capacity to pay interest and repay
principal; whereas it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to
lead to a weakened capacity than in higher rated categories -- this group
is the lowest which qualifies for commercial bank investment.
BB, B,
CCC,
CC: Predominantly speculative with respect to capacity to pay interest and
repay principal in accordance with terms of the obligation: BB indicates
the lowest degree of speculation and CC the highest.
Standard & Poor's applies indicators "+," no character, and "-" to its rating
categories. The indicators show relative standing within the major rating
categories.
<PAGE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PRIMELITE
DEFERRED COMBINATION VARIABLE
AND FIXED ANNUITY CONTRACT
issued by
SEPARATE ACCOUNT NY-B
("Account NY-B" or the "Account")
of
FIRST GOLDEN AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A
PROSPECTUS. THE INFORMATION CONTAINED HEREIN SHOULD BE READ IN
CONJUNCTION WITH THE PROSPECTUS FOR THE FIRST GOLDEN AMERICAN
LIFE INSURANCE COMPANY OF NEW YORK DEFERRED COMBINATION VARIABLE
AND FIXED ANNUITY CONTRACT WHICH IS REFERRED TO HEREIN.
THE PROSPECTUS SETS FORTH INFORMATION THAT A PROSPECTIVE
INVESTOR OUGHT TO KNOW BEFORE INVESTING. FOR A COPY OF THE
PROSPECTUS, SEND A WRITTEN REQUEST TO FIRST GOLDEN AMERICAN LIFE
INSURANCE COMPANY OF NEW YORK, CUSTOMER SERVICE CENTER, P.O. BOX
8794, WILMINGTON, DE 19899-8794 OR TELEPHONE 1-800-366-0066.
Date of Prospectus and
Statement of Additional Information:
___________, 1996
<PAGE>
<PAGE>
TABLE OF CONTENTS
ITEM PAGE
INTRODUCTION 1
Description of First Golden American Life Insurance
Company of New York 1
Safekeeping of Assets 1
The Administrator 1
Independent Auditors 1
Distribution of Contracts 1
Performance Information 2
IRA Partial Withdrawal Option 7
Other Information 8
Financial Statements of Separate Account NY-B 8
Appendix - Description of Bond Ratings
<PAGE>
<PAGE>
INTRODUCTION
This Statement of Additional Information provides background
information regarding Account NY-B.
DESCRIPTION OF FIRST GOLDEN AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK
First Golden American Life Insurance Company of New York ("First
Golden") is a stock life insurance company organized under the
laws of the State of New York. First Golden is a wholly owned
subsidiary of Golden American Life Insurance Company. Golden
American Life Insurance Company, in turn, is an indirect wholly
owned subsidiary of the Equitable of Iowa Companies, a holding
company for Equitable Life Insurance Company of Iowa, USG
Annuity & Life Company, Locust Street Securities, Inc., EIC
Variable, Inc., Equitable of Iowa Securities Network, Inc. and
Equitable Investment Services, Inc. As of September 30, 1996,
First Golden had approximately __ million in total assets. First
Golden is authorized to do business only in the State of New
York. First Golden offers variable annuities.
SAFEKEEPING OF ASSETS
First Golden American acts as its own custodian for Account NY-B.
THE ADMINISTRATOR
[INFORMATION TO BE PROVIDED]
INDEPENDENT AUDITORS
Ernst & Young LLP, Chicago, IL, independent auditors, will
perform annual audits of First Golden and the Account.
DISTRIBUTION OF CONTRACTS
First Golden has entered into agreements with Directed Services,
Inc. ("DSI") to perform services related to the distribution of
its products. DSI acts as the principal underwriter (as defined
in the Securities Act of 1933 and the Investment Company Act of
1940, as amended) of the variable insurance products issued by
First Golden.
<PAGE>
<PAGE>
[First Golden provides to DSI certain of its personnel to perform
management, administrative and clerical services and the use of
certain facilities. First Golden charges DSI for such expenses
and all other general and administrative costs, first on the
basis of direct charges when identifiable, and the remainder
allocated based on the estimated amount of time spent by First
Golden's employees on behalf of DSI. In the opinion of
management, this method of cost allocation is reasonable.]
PERFORMANCE INFORMATION
Performance information for the divisions of Account NY-B,
including the yield and effective yield of the Money Market
Portfolio, the yield of the remaining divisions, and the total
return of all divisions, may appear in reports or promotional
literature to current or prospective owners. Negative values are
denoted by parentheses. Performance information for measures
other than total return do not reflect sales load which can have
a maximum level of 6% of premium, and any applicable premium tax
that can range from 0% to 3.5%. As described in the prospectus,
two death benefit options are available. The following
performance values reflect the election at issue of the Annual
Ratchet Death Benefit Option providing the most conservative
perspective. If the Standard Death Benefit Option had been
elected, the historical performance values would be higher than
those represented in the examples.
Set forth below is the performance information for each Division
for specified periods ending ____________, 1996. For the periods
prior to the date the Divisions commenced operations performance
information for the individual deferred variable annuity
contracts (the "Contracts") is calculated based on the
performance of the assumption that the Divisions were in
existence for the same periods as those indicated for the
underlying Series, with the level of Contract Charges that were
in effect at the inception of the Divisions (this is referred to
as "hypothetical performance date"). This information does not
indicate or represent future performance.
SEC Standard Money Market Division Yields
Current yield for the Liquid Asset Division will be based on the
change in the value of a hypothetical investment (exclusive of
capital changes) over a particular 7-day period, less a pro-rata
share of division expenses accrued over that period (the "base
period"), and stated as a percentage of the investment at the
start of the base period (the "base period return"). The base
period return is then annualized by multiplying by 365/7, with
the resulting yield figure carried to at least the nearest
hundredth of one percent. Calculation of "effective yield"
begins with the same "base period return" used in the calculation
of yield, which is then annualized to reflect weekly compounding
pursuant to the following formula:
Effective Yield = [(Base Period Return) +1) ^ 365/7] - 1
SEC Standard 30-Day Yield for Non-Money Market Divisions
Quotations of yield for the remaining divisions will be based on
all investment income per Unit (accumulation value divided by the
index of investment experience) earned during a particular 30-
2
<PAGE>
<PAGE>
day
period, less expenses accrued during the period ("net investment
income"), and will be computed by dividing net investment income
by the value of an accumulation unit on the last day of the
period, according to the following formula:
YIELD = 2 [ ( a - b + 1) ^ 6 - 1]
-----
cd
Where:
[a] equals the net investment income earned
during the period by the Series attributable
to shares owned by a division
[b] equals the expenses accrued for the period
(net of reimbursements)
[c] equals the average daily number of Units
outstanding during the period based on the
index of investment experience
[d] equals the value maximum offering price per
index of investment experience on the last
day of the period
Yield on divisions of Account NY-B is earned from the increase in
net asset value of shares of the Series in which the Division
invests and from dividends declared and paid by the Series, which
are automatically reinvested in shares of the Series.
SEC (ASecurities and Exchange Commission@) Standard Average
Annual Total Return for Non-Money Market Divisions
Quotations of average annual total return for any Division will
be expressed in terms of the average annual compounded rate of
return of a hypothetical investment in a contract over a period
of one, five and 10 years (or, if less, up to the life of the
series), calculated pursuant to the formula:
P(1+T) ^ n = ERV
Where:
(1) [P] equals a hypothetical initial premium
payment of $1,000
(2) [T] equals an average annual total return
(3) [n] equals the number of years
(4) [ERV] equals the ending redeemable value of a
hypothetical $1,000 initial premium payment
made at the beginning of the period (or
fractional portion thereof)
3
<PAGE>
<PAGE>
All total return figures reflect the deduction of the maximum
sales load, the administrative charges, and the mortality and
expense risk charges. The SEC requires that an assumption be
made that the contract owner surrenders the entire contract at
the end of the one, five and 10 year periods (or, if less, up to
the life of the security) for which performance is required to be
calculated. This assumption may not be consistent with the
typical contract owner's intentions in purchasing a contract and
may adversely affect returns. Quotations of total return may
simultaneously be shown for other periods, as well as quotations
of total return that do not take into account certain contractual
charges such as sales load.
Hypothetical Average Annualized Total Return for the Divisions
presented on a standardized basis for the period ending
___________, 1996 were as follows:
Hypothetical Average Annualized Total Return for Periods Ending
__/__/96 -- Standardized
<TABLE>
<CAPTION>
One Year Period Five Year Period Inception to Series
Division Ending _/__/96 Ending _/__/96 _/__/96 Inception Date
- -------- --------------- ---------------- ------------ --------------
<S> <C> <C> <C> <C>
OTC [____]%* N/A [____]%* 10/ 4/94
Research [____]%* N/A [____]%* 10/ 4/94
Total Return N/A N/A [____]% 10/ 4/96
Income and Growth [____]% N/A [____]% 6/16/94
International Equity [____]% N/A [____]%* 6/16/94
High Income [____]% N/A [____]%* 6/16/94
Money Market [____]% N/A [____]%* 6/16/94
Appreciation [____]% [____] [____]% 10/16/94
</TABLE>
_____________________________________________________________________________
* Total return calculation reflects partial waiver of fees and expenses.
Non-Standard Average Annual Total Return for Non-Money Market
Divisions
Quotations of non-standard average annual total return for any
division will be expressed in terms of the average annual
compounded rate of return of a hypothetical investment in a
contract over a
4
<PAGE>
<PAGE>
period of one, five and 10 years (or, if less, up
to the life of the Series), calculated pursuant to the formula:
[P(1+T)^n] = ERV
Where:
(1) [P] equals a hypothetical initial premium
payment of $1,000
(2) [T] equals an average annual total return
(3) [n] equals the number of years
(4) [ERV] equals the ending redeemable value of a
hypothetical $1,000 initial premium payment
made at the beginning of the period (or
fractional portion thereof) assuming certain
loading and charges are zero.
All total return figures reflect the deduction of the mortality
and expense risk charge and the administrative charges, but not
the deduction of the maximum sales load and the annual contract
fee.
Hypothetical Average Annualized Total Return for the Divisions
presented on a non-standardized basis for the period ending
___________, 1996 were as follows:
Hypothetical Average Annualized Total Return for Periods Ending
__/__/96__ -- Non-Standardized
<TABLE>
<CAPTION>
One Year Period Five Year Period Inception to Series
Division Ending _/__/96 Ending _/__/96 _/__/96 Inception Date
- -------- --------------- ---------------- ------------ --------------
<S> <C> <C> <C> <C>
OTC [____]%* N/A [____]%* 10/ 4/94
Research [____]%* N/A [____]%* 10/ 4/94
Total Return N/A N/A [____]% 10/ 4/96
Income and Growth [____]% N/A [____]% 6/16/94
International Equity [____]% N/A [____]%* 6/16/94
High Income [____]% N/A [____]%* 6/16/94
Money Market [____]% N/A [____]%* 6/16/94
Appreciation [____]% [____] [____]% 10/16/94
</TABLE>
_____________________________________________________________________________
* Total return calculation reflects partial waiver of fees and expenses.
5
<PAGE>
<PAGE>
Performance information for a Division may be compared, in
reports and promotional literature, to: (i) the Standard & Poor's
500 Stock Index ("S&P 500"), Dow Jones Industrial Average
("DJIA"), Donoghue Money Market Institutional Averages, or other
indices that measure performance of a pertinent group of
securities so that investors may compare a Division's results
with those of a group of securities widely regarded by investors
as representative of the securities markets in general; (ii)
other groups of variable annuity separate accounts or other
investment products tracked by Lipper Analytical Services, a
widely used independent research firm which ranks mutual funds
and other investment companies by overall performance, investment
objectives, and assets, or tracked by other services, companies,
publications, or persons who rank such investment companies on
overall performance or other criteria; and (iii) the Consumer
Price Index (measure for inflation) to assess the real rate of
return from an investment in the Contract. Unmanaged indices may
assume the reinvestment of dividends but generally do not reflect
deductions for administrative and management costs and expenses.
Performance information for any Division reflects only the
performance of a hypothetical contract under which accumulation
value is allocated to a Division during a particular time period
on which the calculations are based. Performance information
should be considered in light of the investment objectives and
policies, characteristics and quality of the portfolio of the
Series of the trust in which the Account NY-B Divisions invest,
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.
Reports and promotional literature may also contain other
information including the ranking of any Division derived from
rankings of variable annuity separate accounts or other
investment products tracked by Lipper Analytical Services or by
other rating services, companies, publications, or other persons
who rank separate accounts or other investment products on
overall performance or other criteria.
Published Ratings
From time to time, the rating of First Golden as an insurance
company by A.M. Best Company may be referred to in advertisements
or in reports to contract owners. Each year 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. Best's
ratings range from A++ to F.
6
<PAGE>
<PAGE>
Index of Investment Experience
The calculation of the Index of Investment Experience ("IIE") is
discussed in the prospectus for the Contracts under Measurement
of Investment Experience. The following illustrations show a
calculation of a new IIE and the purchase of Units (using
hypothetical examples). Note that the examples below are
calculated for a Contract issued with the Annual Ratchet Death
Benefit Option, the death benefit option with the highest
mortality and expense risk charge. The mortality and expense
risk charge associated with the Standard Death Benefit Option is
lower than that used in the examples and would result in higher
IIE's or Accumulation Values.
Illustration of Calculation of IIE
Example 1.
1. IIE, beginning of period $ 10.00
2. Value of securities, beginning of period $ 10.00
3. Change in value of securities $ 0.10
4. Gross investment return (3) divided by (2) 0.01
5. Less daily mortality and expense charge
6. Less asset based administrative charge 0.00000411
7. Net investment return (4) minus (5) minus (6)
8. Net investment factor (1.000000) plus (7)
9. IIE, end of period (1) multiplied by (8)
Illustration of Purchase of Units (Assuming No State Premium Tax)
Example 2.
1. Initial Premium Payment $ 1,000
2. IIE on effective date of purchase (see Example 1) $ 10.00
3. Number of Units purchased [(1) divided by (2)] 100
4. IIE for valuation date following purchase (see
Example 1)
5. Accumulation Value in account for valuation date
following purchase [(3) multiplied by (4)]
IRA PARTIAL WITHDRAWAL OPTION
If the contract owner has an IRA contract and will attain age 70
2 in the current calendar year, distributions will be made in
accordance with the requirements of Federal tax law. This option
is available to assure that the required minimum distributions
from qualified plans under the Internal Revenue Code (the "Code")
are made. Under the Code, distributions must begin no later than
April 1st of the calendar year following the calendar year in
which the contract owner attains age 70 2. If the required
minimum distribution is not withdrawn, there may be a penalty tax
in an amount equal to 50% of the difference between the amount
required to be withdrawn and
7
<PAGE>
<PAGE>
the amount actually withdrawn. Even
if the IRA Partial Withdrawal Option is not elected,
distributions must nonetheless be made in accordance with the
requirements of Federal tax law.
First Golden notifies the contract owner of these regulations
with a letter mailed on January 1st of the calendar year in which
the contract owner reaches age 70 2 which explains the IRA
Partial Withdrawal Option and supplies an election form. If
electing this option, the owner specifies whether the withdrawal
amount will be based on a life expectancy calculated on a single
life basis (contract owner's life only) or, if the contract owner
is married, on a joint life basis (contract owner's and spouse's
lives combined). The contract owner selects the payment mode on
a monthly, quarterly or annual basis. If the payment mode
selected on the election form is more frequent than annually, the
payments in the first calendar year in which the option is in
effect will be based on the amount of payment modes remaining
when First Golden receives the completed election form.
First Golden calculates the IRA Partial Withdrawal amount each
year based on the minimum distribution rules. We do this by
dividing the accumulation value by the life expectancy. In the
first year withdrawals begin, we use the accumulation value as of
the date of the first payment. Thereafter, we use the
accumulation value on December 31st of each year. The life
expectancy is recalculated each year. Certain minimum
distribution rules govern payouts if the designated beneficiary
is other than the contract owner's spouse and the beneficiary is
more than ten years younger than the contract owner.
OTHER INFORMATION
Registration statements have been filed with the SEC under the
Securities Act of 1933 as amended, with respect to the Contracts
discussed in this Statement of Additional Information. Not all
of the information set forth in the registration statements,
amendments and exhibits thereto has been included in this
Statement of Additional Information. Statements contained in
this Statement of Additional Information concerning the content
of the Contracts and other legal instruments are intended to be
summaries. For a complete statement of the terms of these
documents, reference should be made to the instruments filed with
the Securities and Exchange Commission.
FINANCIAL STATEMENTS OF SEPARATE ACCOUNT NY-B
As of the date of this Statement of Additional Information,
Separate Account NY-B had not yet commenced operations, had no
assets or liabilities and no income. Accordingly, it has no
financial statements for prior periods.
8
<PAGE>
<PAGE>
APPENDIX: DESCRIPTION OF BOND RATINGS
Excerpts from Moody's Investors Service, Inc. ("Moody's) description of its bond
ratings:
Aaa: Judged to be the best quality; they carry the smallest degree of
investment risk.
Aa: Judged to be of high quality by all standards; together with the Aaa
group, they comprise what are generally known as high grade bonds.
A: Possess many favorable investment attributes and are to be considered
as "upper medium grade obligations."
Baa: Considered as medium grade obligations, i.e., they are neither highly
protected nor poorly secured; interest payments and principal security
appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of
time.
Ba: Judged to have speculative elements; their future cannot be considered
as well assured.
B: Generally lack characteristics of the desirable investment.
Caa: Are of poor standing; such issues may be in default or there may be
present elements of danger with respect to principal or interest.
Ca: Speculative in a high degree; often in default.
C: Lowest rate class of bonds; regarded as having extremely poor
prospects.
Moody's also applies numerical indicators 1, 2 and 3 to rating categories. The
modifier 1 indicates that the security is in the higher end of its rating
category; 2 indicates a mid-range ranking; and 3 indicates a ranking toward the
lower end of the category.
Excerpts from Standard & Poor's Rating Group ("Standard & Poor's") description
of its bond ratings:
AAA: Highest grade obligations; capacity to pay interest and repay
principal is extremely strong.
AA: Also qualify as high grade obligations; a very strong capacity to pay
interest and repay principal and differs from AAA issues only in small
degree.
A: Regarded as upper medium grade; they have a strong capacity to pay
interest and repay principal although it is somewhat more susceptible to
the adverse effects of changes in circumstances and economic conditions
than debt in higher rated categories.
BBB: Regarded as having an adequate capacity to pay interest and repay
principal; whereas it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to
lead to a weakened capacity than in higher rated categories -- this group
is the lowest which qualifies for commercial bank investment.
BB, B,
CCC,
CC: Predominantly speculative with respect to capacity to pay interest and
repay principal in accordance with terms of the obligation: BB indicates
the lowest degree of speculation and CC the highest.
Standard & Poor's applies indicators "+," no character, and "-" to its rating
categories. The indicators show relative standing within the major rating
categories.
<PAGE>
<PAGE>
PART C -- OTHER INFORMATION
Item 24: Financial Statements and Exhibits
- -------- ---------------------------------
FINANCIAL STATEMENTS
(a) All financial statements are included in either the
Prospectuses or the Statements of Additional Information, as
indicated therein.
EXHIBITS
(b) (1) Resolution of the board of directors of Depositor
authorizing the establishment of the Registrant.
(2) Form of Custodial Agreement.1/
(3) (a) Form of Distribution Agreement between the
Depositor and Directed Services, Inc.1/
(b) Form of Dealers Agreement.1/
(4) (a) Individual Deferred Combination Variable and Fixed
Annuity Contract.1/
(b) Group Deferred Combination Variable and Fixed Annuity
Contract.1/
(c) DVA Plus Update Program Schedule Page.1/
(d) Individual Retirement Annuity Rider Page.1/
(5) (a) Individual Deferred Combination Variable
and Fixed Annuity Application.1/
(b) Group Deferred Combination Variable and Fixed
Annuity Enrollment Form.1/
(6) (a) Articles of Incorporation of First Golden
American Life Insurance Company of New York.1/
(b) By-Laws of First Golden American Life Insurance
Company of New York.1/
(7) Not applicable
(8) (a) Participation Agreement between First Golden
American Life Insurance Company of New York and The
GCG Trust.1/
(b) Participation Agreement between First Golden
American Life Insurance Company of New York and the
Equi-Select Series Trust.1/
(c) Participation Agreement between First Golden
American Life Insurance Company of New York and the
Travelers Series Fund Inc.1/
(d) Participation Agreement between First Golden
American Life Insurance Company of New York and the
Smith Barney Series Fund Inc.1/
(9) Opinion and Consent of Myles R. Tashman.1/
(10) (a) Consent of Sutherland, Asbill & Brennan, L.L.P.1/
(b) Consent of Ernst & Young LLP.1/
_______________________________
1/ To be provided by Pre-Effective Amendment.
<PAGE>
<PAGE>
(11) Not applicable
(12) Not applicable
(13) Schedule of Performance Data.1/
(14) Not applicable
(15) Powers of Attorney
Item 25: Directors and Officers of the Depositor
- -------- ---------------------------------------
Principal Position(s)
Name Business Address with Depositor
Terry L. Kendall Golden American Life Ins. Co. Chairman, President,
1001 Jefferson Street Chief Executive Officer
Wilmington, DE 19801 and Director
Myles R. Tashman Golden American Life Ins. Co. Executive Vice President,
1001 Jefferson Street General Counsel, Secretary
Wilmington, DE 19801 and Director
Barnett Chernow Golden American Life Ins. Co. Executive Vice President
1001 Jefferson Street and Director
Wilmington, DE 19801
Stephen J. Friedman Director
Bernard Levitt Director
Roger R. Martin Director
Andrew Kalinowski Director
Edward C. Wilson Golden American Life Ins. Co. Executive Vice President
1001 Jefferson Street
Wilmington, DE 19801
David L. Jacobson Golden American Life Ins. Co. Senior Vice President
1001 Jefferson Street and Assistant Secretary
Wilmington, DE 19801
_______________________________
1/ To be provided by Pre-Effective Amendment.
C-2
<PAGE>
<PAGE>
Stephen J. Preston Golden American Life Ins. Co. Senior Vice President,
1001 Jefferson Street Chief Actuary and
Wilmington, DE 19801 Controller
Mary Bea Wilkinson Golden American Life Ins. Co. Senior Vice President
1001 Jefferson Street and Treasurer
Wilmington, DE 19801
Marilyn Talman Golden American Life Ins. Co. Vice President,
1001 Jefferson Street Associate General Counsel
Wilmington, DE 19801 and Assistant Secretary
Item 26: Persons Controlled by or Under Common Control with the Depositor
- --------- ----------------------------------------------------------------
or Registrant
-------------
The Depositor does not directly or indirectly control any person.
The following persons control or are under common control with the
Depositor:
EIC VARIABLE, INC. ("EICV") - This corporation is a
general business corporation organized under the laws
of the State of New York. The primary purpose of
EICV is to serve in an advisory, managerial and
consultative capacity to the Depositor and to engage
generally in the business of providing, promoting and
establishing systems, methods and controls for
managerial efficiency and operation for such company,
as well as others. EICV is a wholly owned subsidiary
of Equitable of Iowa Companies.
DIRECTED SERVICES, INC. ("DSI") - This corporation is
a general business corporation organized under the
laws of the State of New York, and is wholly owned by
EICV. The primary purposes of DSI are to act as an
investment adviser and a broker-dealer in securities.
It acts as the principal underwriter and distributor
of variable annuities as required by the Securities
and Exchange Commission (the "SEC"). The contracts
are issued by the Depositor. DSI is also registered
with the SEC as an investment adviser. DSI also has
the power to carry on a general financial,
securities, distribution, advisory or investment
advisory business; to act as a general agent or
broker for insurance companies and to render
advisory, managerial, research and consulting
services for maintaining and improving managerial
efficiency and operation.
Golden American Life Insurance Company ("Golden
American") - This corporation is a stock life
insurance company organized under the laws of the
State of Delaware. The primary purpose of Golden
American is to offer variable annuity and variable
life insurance contracts. Golden American is a
wholly owned subsidiary of EICV and is authorized to
do business in all jurisdictions except New York.
As of October 31, 1996, the subsidiaries of Equitable of Iowa
Companies are as follows:
Equitable Life Insurance Company of Iowa
USG Annuity & Life Company
Equitable of Iowa Securities Network, Inc.
Equitable Investment Services, Inc.
Locust Street Securities
C-3
<PAGE>
<PAGE>
EIC Variable, Inc.
Golden American Life Insurance Company
First Golden American Life Insurance Company of New York
Directed Services, Inc.
Item 27: Number of Contract Owners
- -------- -------------------------
Not applicable
Item 28: Indemnification
- -------- ---------------
[First Golden shall indemnify (including therein the
prepayment of expenses) any person who is or was a director,
officer or employee, or who is or was serving at the request
of First Golden as a director, officer or employee of another
corporation, partnership, joint venture, trust or other
enterprise for expenses (including attorney's fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by him with respect to any threatened,
pending or completed action, suit or proceedings against him
by reason of the fact that he is or was such a director,
officer or employee to the extent and in the manner permitted
by law.]
[First Golden may also, to the extent permitted by law,
indemnify any other person who is or was serving First
American in any capacity. The Board of Directors shall have
the power and authority to determine who may be indemnified
under this paragraph and to what extent (not to exceed the
extent provided in the above paragraph) any such person may
be indemnified.]
[First Golden may purchase and maintain insurance on behalf
of any such person or persons to be indemnified under the
provision in the above paragraphs, against any such liability
to the extent permitted by law.]
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to
directors, officers and controlling persons of the
Registrant, as provided above or otherwise, the Registrant
has been advised that in the opinion of the SEC such
indemnification by the Depositor is against public policy, as
expressed in the Securities Act of 1933, and therefore may be
unenforceable. In the event that a claim of such
indemnification (except insofar as it provides for the
payment by the Depositor of expenses incurred or paid by a
director, officer or controlling person in the successful
defense of any action, suit or proceeding) is asserted
against the Depositor by such director, officer or
controlling person and the SEC is still of the same opinion,
the Depositor or Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by the Depositor is
against public policy as expressed by the Securities Act of
1933 and will be governed by the final adjudication of such
issue.
Item 29: Principal Underwriter
- -------- ---------------------
(a) At present, Directed Services, Inc., the Registrant's
Distributor, also serves as principal underwriter for
all contracts issued by Golden American. DSI is the
principal underwriter for Separate Account A, Separate
Account B and Alger Separate Account A of Golden
American.
C-4
<PAGE>
<PAGE>
(b) The following information is furnished with respect to
the principal officers and directors of Directed
Services, Inc., the Registrant's Distributor:
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
- ------------------ --------------------- ---------------------
Terry L. Kendall Chairman and Chief Chairman, President,
Directed Services, Inc. Executive Officer Chief Executive Officer
1001 Jefferson Street and Director
Wilmington, DE 19801
Mary Bea Wilkinson President and Senior Vice President
Directed Services, Inc. Treasurer and Treasurer
1001 Jefferson Street
Wilmington, DE 19801
Fred S. Hubell Director None
Equitable of Iowa Companies
604 Locust Street
Des Moines, IA 50309
Lawrence V. Durland Director None
Equitable of Iowa Companies
604 Locust Street
Des Moines, IA 50309
Paul E. Larson Director None
Equitable of Iowa Companies
604 Locust Street
Des Moines, IA 50309
Thomas L. May Director None
Equitable of Iowa Companies
604 Locust Street
Des Moines, IA 50309
John A. Merriman Director None
Equitable of Iowa Companies
604 Locust Street
Des Moines, IA 50309
Beth B. Neppl Director None
Equitable of Iowa Companies
604 Locust Street
Des Moines, IA 50309
Paul R. Schlaack Director None
Equitable of Iowa Companies
604 Locust Street
Des Moines, IA 50309
C-5
<PAGE>
<PAGE>
Barnett Chernow Executive Vice President Executive Vice
Directed Services, Inc. President and Director
1001 Jefferson Street
Wilmington, DE 19801
Myles R. Tashman Executive Vice President Executive Vice
Directed Services, Inc. and Secretary President, General
1001 Jefferson Street Counsel, Secretary and
Wilmington, DE 19801 Director
Stephen J. Preston Senior Vice President Chief Financial Officer
Directed Services, Inc.
1001 Jefferson Street
Wilmington, DE 19801
(c) Not applicable
Item 30: Location of Accounts and Records
- -------- --------------------------------
[Accounts and records are maintained by EIC Variable, Inc.
and First Golden American Life Insurance Company of New York
at ____________, New York, NY _______ and at 1001 Jefferson
Street, Suite 400, Wilmington, DE 19801.]
Item 31: Management Services
- -------- -------------------
None.
Item 32: Undertakings
- -------- ------------
(a) Registrant hereby undertakes to 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 so long as payments under the Contracts may be 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; and,
(c) Registrant hereby undertakes to deliver any Statement of
Additional Information and any financial statements required
to be made available under this Form promptly upon written or
oral request.
(d) First Golden American Life Insurance Company of New York
hereby represents that the fees and charges deducted under
the Contract, in the aggregate, are reasonable in relation to
the services rendered, the expenses expected to be incurred,
and the risks assumed by First Golden American Life Insurance
Company of New York.
C-6
<PAGE>
<PAGE>
Representation
- --------------
Registrant makes the following representation -- The account
meets definition of a "separate account" under federal
securities laws.
C-7
<PAGE>
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act
of 1940, the Registrant has caused this Registration Statement to be
signed on its behalf in the City of Wilmington and Delaware, on the 14th
day of November, 1996.
SEPARATE ACCOUNT NY-B
(Registrant)
By: FIRST GOLDEN AMERICAN LIFE
INSURANCE COMPANY OF NEW YORK
(Depositor)
By: ____________________________________
Terry L. Kendall*
Chairman, President, Chief Executive
Officer and Director
Attest: /s/ Marilyn Talman
---------------------------
Marilyn Talman
Vice President, Associate General Counsel
and Assistant Secretary of Depositor
As required by the Securities Act of 1933, this Registration Statement
has been signed below by the following persons in the capacities
indicated on November 14, 1996.
Signature Title
--------- -----
___________________________ Chairman, President, Chief
Terry L. Kendall* Executive Officer and Director
of Depositor
___________________________ Senior Vice President,
Stephen J. Preston* Chief Actuary and Controller
C-8
<PAGE>
<PAGE>
DIRECTORS OF DEPOSITOR
___________________________ ___________________________
Myles R. Tashman* Bernard Levitt*
___________________________ ___________________________
Barnett Chernow* Roger R. Martin*
___________________________ ___________________________
Stephen J. Friedman* Andrew Kalinowski
By: /s/ Marilyn Talman, Attorney-in-Fact
------------------
Marilyn Talman
_______________________
*Executed by Marilyn Talman on behalf of those indicated pursuant to
Power of Attorney.
C-9
<PAGE>
<PAGE>
EXHIBIT INDEX
ITEM EXHIBIT. . . . . . . . . . . . . . . . . . . . . . . . . PAGE #
15 Powers of Attorney . . . . . . . . . . . . . . . . . . .
C-10
<PAGE>
<PAGE>
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned,
being the duly elected President, Chief Executive Officer and
Director of First Golden American Life Insurance Company of New
York ("First Golden"), constitutes and appoints Myles R. Tashman,
and Marilyn Talman, and each of them, his true and lawful
attorneys-in-fact and agents with full power of substitution and
resubstitution for him in his name, place and stead, in any and
all capacities, to sign First Golden's registration statements
and applications for exemptive relief, and any and all amendments
thereto, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every
act and thing requisite and necessary to be done, as fully to all
intents and purposes as he might or could do in person, hereby
ratifying and affirming all that said attorneys-in-fact and
agents, or any of them, or his or her substitute or substitutes,
may lawfully do or cause to be done by virtue thereof.
Date: October 16, 1996
------------------
/s/ Terry L. Kendall
----------------------
Terry L. Kendall
President, Chief Executive Officer
and Director
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned,
being a duly elected Senior Vice President, Chief Actuary and
Controller (Chief Financial Officer) of First Golden American
Life Insurance Company of New York ("First Golden"), constitutes
and appoints Myles R. Tashman, and Marilyn Talman, and each of
them, his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution for him in his name,
place and stead, in any and all capacities, to sign First
Golden's registration statements and applications for exemptive
relief, and any and all amendments thereto, and to file the same,
with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents full power and authority
to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and affirming all
that said attorneys-in-fact and agents, or any of them, or his or
her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
Date: October 15, 1996
------------------
/s/ Stephen J. Preston
----------------------
Stephen J. Preston
Senior Vice President, Chief
Actuary and Controller
(Chief Financial Officer)
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned,
being a duly elected Executive Vice President and Director of
First Golden American Life Insurance Company of New York ("First
Golden"), constitutes and appoints Myles R. Tashman, and Marilyn
Talman, and each of them, his true and lawful attorneys-in-fact
and agents with full power of substitution and resubstitution for
him in his name, place and stead, in any and all capacities, to
sign First Golden's registration statements and applications for
exemptive relief, and any and all amendments thereto, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying
and affirming all that said attorneys-in-fact and agents, or any
of them, or his or her substitute or substitutes, may lawfully do
or cause to be done by virtue thereof.
Date: November 14, 1996
------------------
Barnett Chernow
----------------------
Barnett Chernow
Executive Vice President
and Director
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned,
being a duly elected Executive Vice President, General Counsel,
Secretary and Director of First Golden American Life Insurance
Company of New York ("First Golden"), constitutes and appoints
Marilyn Talman, his true and lawful attorney-in-fact and agent
with full power of substitution and resubstitution for him in his
name, place and stead, in any and all capacities, to sign First
Golden's registration statements and applications for exemptive
relief, and any and all amendments thereto, and to file the same,
with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent full power and authority to
do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and affirming all
that said attorney-in-fact and agent, or her substitute or
substitutes, may lawfully do or cause to be done by virtue
thereof.
Date: October 12, 1996
------------------
/s/ Myles R. Tashman
----------------------
Myles R. Tashman
Executive Vice President
General Counsel, Secretary
and Director
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned,
being a duly elected Director of First Golden American Life
Insurance Company of New York ("First Golden"), constitutes and
appoints Myles R. Tashman, and Marilyn Talman, and each of them,
his true and lawful attorneys-in-fact and agents with full power
of substitution and resubstitution for him in his name, place and
stead, in any and all capacities, to sign First Golden's
registration statements and applications for exemptive relief,
and any and all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents full power and authority
to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and affirming all
that said attorneys-in-fact and agents, or any of them, or his or
her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
Date: October 18, 1996
------------------
/s/ Stephen J. Friedman
----------------------
Stephen J. Friedman
Director
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned,
being a duly elected Director of First Golden American Life
Insurance Company of New York ("First Golden"), constitutes and
appoints Myles R. Tashman, and Marilyn Talman, and each of them,
his true and lawful attorneys-in-fact and agents with full power
of substitution and resubstitution for him in his name, place and
stead, in any and all capacities, to sign First Golden's
registration statements and applications for exemptive relief,
and any and all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents full power and authority
to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and affirming all
that said attorneys-in-fact and agents, or any of them, or his or
her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
Date: October 15, 1996
------------------
/s/ Bernard Levitt
----------------------
Bernard Levitt
Director
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned,
being a duly elected Director of First Golden American Life
Insurance Company of New York ("First Golden"), constitutes and
appoints Myles R. Tashman, and Marilyn Talman, and each of them,
his true and lawful attorneys-in-fact and agents with full power
of substitution and resubstitution for him in his name, place and
stead, in any and all capacities, to sign First Golden's
registration statements and applications for exemptive relief,
and any and all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents full power and authority
to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and affirming all
that said attorneys-in-fact and agents, or any of them, or his or
her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
Date: October 15, 1996
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/s/ Roger R. Martin
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Roger R. Martin
Director
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