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As filed with the Securities and Exchange Commission on March 18, 1997
Registration Nos. 333-16501,811-07935
___________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-4
Registration Statement under
The Securities Act of 1933
Pre-Effective Amendment No. 1
Post Effective Amendment No. ___
and/or
Registration Statement under
The Investment Company Act of 1940
Amendment No. 1
SEPARATE ACCOUNT NY-B
(Exact Name of Registrant)
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY
OF NEW YORK
(Name of Depositor)
230 Park Avenue, Suite 966
New York, New York
(212) 973-9647
(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.
(302) 576-3516 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 Facts About the Company and the
Registrant Depositor Account
and Portfolio
Companies
6. Deductions and Expenses Charges and Fees
7. General Description of Facts About the Contracts
Variable Annuity
Contracts
8. Annuity Period Choosing an Income Plan
9. Death Benefit Facts About the Contracts
10. Purchases and Contract Facts About the Contracts,
Value Charges and Fees
11. Redemptions Facts About the Contracts
12. Taxes Federal Tax Considerations
Additional Considerations
13. Legal Proceedings 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 Part A -- 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").
Nineteen 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 nineteen 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 ___________, 1997, 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
230 Park Avenue, Suite 966
New York, NY 10169
1-800-963-9539
Prospectus Dated: ___________, 1997
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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
FINANCIAL STATEMENTS OF FIRST GOLDEN AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK 80
STATEMENT OF ADDITIONAL INFORMATION xx
TABLE OF CONTENTS xx
Appendix A xx
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 nineteen 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:
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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
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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, Hard Assets,
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).
Subject to approval by contractholders, the management fee
for the Emerging Markets Series will be increased to 1.75%
on May 1, 1997.
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
Expenses/10 Expenses
After Expense After Expense
Series Fees/6/9 Reimbursement Remibursement
------ -------- ------------- -------------
OTC Portfolio 0.80% 0.40% 1.20%
Research Portfolio 0.80% 0.40% 1.20%
Total Return Portfolio 0.80% 0.40% 1.20%
Growth & Income Portfolio 0.95% 0.40% 1.35%
Value + Growth Portfolio 0.95% 0.40% 1.35%
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 $85.01 $116.91
Fully Managed $85.01 $116.91
Capital Appreciation $85.01 $116.91
Rising Dividends $85.01 $116.91
All-Growth $85.01 $116.91
Real Estate $85.01 $116.91
Hard Assets $85.01 $116.91
Value Equity $85.01 $116.91
Strategic Equity $85.01 $116.91
Small Cap $85.01 $116.91
Emerging Markets $90.20 $132.41
Managed Global $87.51 $124.39
OTC $86.91 $122.60
Research $86.91 $122.60
Total Return $86.91 $122.60
Growth & Income $88.41 $127.07
Value + Growth $88.41 $127.07
Limited Maturity Bond $81.00 $104.81
Liquid Asset $81.00 $104.81
_____________________
9/ Prior to October 6, 1995, EISI waived its management
fee for each of the OTC, Research and Total Return Portfolios.
10/ Other expenses shown take into account the effect of
EISI's agreement to reimburse each portfolio for all
operating expenses, excluding management fees, that exceed
0.40% of its average daily net assets. This reimbursement is
voluntary and can be terminated at any time. Prior to February
3, 1997, EISI had an agreement to reimburse each portfolio
for all operating expenses, excluding management fees, that
exceeded 0.75% of its average daily net assets. For the year
ended December 31, 1996, no such reimbursement was necessary
for the OTC, Research, Total Return and Growth & Income
Portfolios. In the absence of such reimbursement agreement,
Total Expenses would have been 1.90% for the Value + Growth
Portfolio for the year ended December 31, 1996.
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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 $25.01 $76.91
Fully Managed $25.01 $76.91
Capital Appreciation $25.01 $76.91
Rising Dividends $25.01 $76.91
All-Growth $25.01 $76.91
Real Estate $25.01 $76.91
Hard Assets $25.01 $76.91
Value Equity $25.01 $76.91
Strategic Equity $25.01 $76.91
Small Cap $25.01 $76.91
Emerging Markets $30.20 $92.41
Managed Global $27.51 $84.39
OTC $26.91 $82.60
Research $26.91 $82.60
Total Return $26.91 $82.60
Growth & Income $28.41 $87.07
Value + Growth $28.41 $87.07
Limited Maturity Bond $21.00 $64.81
Liquid Asset $21.00 $64.81
________________________________________________________________________________
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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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 December 31, 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"). First Golden is authorized to do business only in the
State of New York. First Golden offers variable annuities.
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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 June 13, 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, Hard Assets, 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, Research and Total Return 0.80% of first $300 million;
Portfolios: 0.55% of amount in excess of
$300 million
Growth & Income and Value + Growth 0.95% of first $200 million;
Portfolios: 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
Pilgrim, Baxter & Associates, Ltd.
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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HARD ASSETS DIVISION
Hard Assets Series
Objective
Long-term capital appreciation.
Investments
Investment in equity and debt securities of companies
engaged in the exploration, development, production,
management, 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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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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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
Putnam Investment Management, Inc.
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
Putnam Investment Management, 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
RESEARCH DIVISION
Research Portfolio
Objective
Long term growth of capital and future income.
Investments
Investment primarily in common stocks or securities
convertible into common stocks of companies believed
to possess better than average prospects for long-term
growth.
Portfolio Manager
Massachusetts Financial Services Company
TOTAL RETURN DIVISION
Total Return Portfolio
Objective
Above-average income consistent with prudent employment of capital.
Investments
Investment primarily in equity securities.
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.
VALUE + GROWTH DIVISION
Value + Growth Portfolio
Objective
Capital appreciation.
Investments
Investment primarily in mid-cap growth companies with
favorable relationships between price/earnings ratios and
growth rates. Mid-cap companies are those with market
capitalizations ranging from $750 million to approximately
$2 billion.
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) restrict or eliminate any voting rights as to Account
NY-B; and
(4) 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. In
most cases, 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%
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. 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. The mortality risk
assumed is the risk that Annuitants as a group will live
for a longer time than our actuarial tables
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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.
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 greater of the premium paid or the
Accumulation Value plus any charges we deducted; and the
contract will be void as of the effective date of
cancellation. We may 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 this Prospectus
and Registration Statement have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon
appearing in this Prospectus and in the Registration Statement
and are included in reliance upon such report 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 wholly owned subsidiary of Golden American Life
Insurance Company ("Golden American" or the "Parent"), was
incorporated on May 24, 1996. Golden American is a wholly owned
indirect subsidiary of Equitable of Iowa Companies. Equitable of Iowa
Companies is a holding company for Equitable Life Insurance Company of
Iowa, USG Annuity & Life Company, Locust Street Securities, Inc., EIC
Variable, Inc. and Equitable of Iowa Securities Network, Inc. First
Golden's primary purpose will be to offer insurance products in the
State of New York. On January 2, 1997 First Golden became licensed as
a life insurance company in the State of New York. First Golden is
authorized to do business only in the State of New York.
First Golden's primary business purpose is to offer variable
insurance products (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.
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
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companies offer consumers many choices. However, overall demand for
variable annuity product remains strong for several reasons including:
a dynamic stock market performance over the last 3 years; relatively
low interest rates; an aging United States population that is
increasingly concerned about retirement and estate planning, as well
as maintaining their standard of living in retirement; potential
reductions in government and employer-provided benefits at retirement
as well as lower public confidence in the adequacy of those benefits.
Results of Operations for the period December 17, 1996 (commencement
of operations) through December 31, 1996
Net income for the period from December 17, 1996 through December
31, 1996 was $42,000. Net investment income of $65,000 was earned and
income taxes were $23,000.
Future revenues will be generated from the sale of variable
products resulting in product charge revenues as well as investment
income from the investments. Future benefits and expenses will
include policy benefits, operating expenses and commission expenses
associated with the sale and maintenance of the Contracts.
Liquidity and Capital Resources
Positive cash flow elements from operations included net income
and increases in liabilities. Negative cash flow elements from
operations were produced from two sources, the increase in accrued
investment income and the net amortization of discounts on short-term
investments.
Future cash flows will consist of product charges, investment
income and maturities of fixed maturity investments. Future cash flow
uses will include the payment of annuity and insurance benefits,
operating expenses and commissions and the purchase of new
investments.
On December 17, 1996, Golden American made capital contributions
to First Golden of $25,000,000. Of this amount, $2,000,000
represented 200,000 shares of common stock with a par value of $10.00
per share. The remaining $23,000,000 was contributed as additional
paid-in capital. 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 Golden American if necessary.
First Golden is required to maintain a minimum capital and
surplus of not less than $4,000,000 under the provisions of the
insurance laws of the State of New York in which it became licensed to
sell insurance products on January 2, 1997.
Under the provisions of the insurance laws of the State of New
York, First Golden cannot distribute any dividends to its
stockholders unless a notice of its intention to declare a dividend
and the amount of the dividend has been filed not less than thirty
days in advance of the proposed declaration. The superintendent may
disapprove the distribution by giving written notice to the Company
within thirty days after the filing should the superintendent find
that the financial condition of the Company does not warrant the
distribution.
The NAIC's risk-based capital requirements require insurance
companies to calculate and report information under a risk-based
capital formula. These requirements are intended to allow insurance
regulators to identify inadequately capitalized insurance companies
based upon the type and mixture of risks inherent in the Company's
operations. The formula includes components for asset risk, liability
risk, interest rate exposure and other factors. The Company intends to
comply with these requirements in 1997, as its insurance license was
approved on January 2, 1997, and expects its total adjusted capital to
exceed levels which require regulatory action.
Segment Information
First Golden's operations will consist of one business segment,
the sale of insurance products. First Golden anticipates that it will
not be dependent upon any single customer but anticipates three
broker/dealers will account for a significant portion of its revenue
in 1997. All premiums will be received from consumers in the State of
New York.
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FINANCIAL CONDITION
Investments
First Golden's assets are invested in accordance with applicable
New York 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.
First Golden makes investments in accordance with investment
guidelines that take into account investment quality, liquidity and
diversification, and invests primarily in investment grade securities.
All of First Golden's assets except for variable separate account
assets are available to meet its obligations under the Contracts. At
December 31, 1996, First Golden had invested assets of $24,570,000
consisting of $24,220,000 of bonds, and $350,000 of short-term
securities.
Based on amortized cost, at December 31, 1996, 91.6% of the
investment portfolio were invested in investment grade bonds and 8.4%
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.
Reserves
Future policy benefits for the fixed account will be established
utilizing the retrospective deposit accounting method. Policy
reserves represent the premiums received plus accrued interest less
mortality and administration charges.
Reinsurance
The Company intends to reinsure its mortality risk associated
with the Contract's guaranteed death benefit with one or more
appropriately licensed insurance companies.
Competition
In 1997, First Golden will be engaged in a business that is
highly competitive because of the number of competitors including
banks, mutual funds and life insurance companies which all compete for
retirement savings from consumers. There are approximately 142 stock,
mutual and other types of insurers in the life insurance business in
the State of New York, a substantial number of which offer similar
products and are significantly larger than First Golden.
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Certain Agreements
On November 8, 1996, First Golden and Golden American entered
into an administrative service agreement pursuant to which Golden
American agreed to provide certain accounting, actuarial, tax,
underwriting, sales, management and other services to Golden
American. Expenses incurred by Golden American in relation to this
service agreement will be reimbursed by First Golden on an allocated
cost basis. As of December 31, 1996, no such charges have been
billed to First Golden. First Golden expects to enter into a similar
agreement with another affiliate, Equitable Life Insurance Company
of Iowa, for additional services.
Also on November 8, 1996, First Golden and DSI entered into a
service agreement pursuant to which First Golden has agreed to
provide DSI certain of its personnel to perform management,
administrative and clerical services and the use of certain of its
facilities. First Golden expects to charge DSI for such expenses
and all other general and administrative costs, first on the basis
of direct charges when identifiable, and second allocated based on
the estimated amount of time spent by First Golden's employees on
behalf of DSI. As of December 31, 1996, no such charges have been
billed to DSI.
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
During 1996, Golden American provided the support necessary for
the incorporation and licensing of First Golden. During 1997, First
Golden will have a few direct employees due to its small size and will
continue to receive support pursuant to various management services
from DSI, Golden American and other affiliates 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 certain officers of First Golden are also
officers of Equitable of Iowa Companies, Equitable Life Insurance
Company of Iowa and/or of Equitable of Iowa Securities Network,
Inc. See "Directors and Executive Officers."
Properties
First Golden's principal office is located at 230 Park Avenue,
Suite 966, New York, New York 10169, where certain of the Company's
records are maintained. The 2,568 square feet of office space is
leased for a 5 year term.
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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 (47) Executive Vice President, Director
Edward C. Wilson (55) Executive Vice President
Carol V. Coleman (47) Director
Stephen J. Friedman (58) Director
Frederick S. Hubbell (45) Director
Bernard Levitt (71) Director
Roger R. Martin (65) Director
Andrew Kalinowski (52) Director
David L. Jacobson (47) Senior Vice President and Assistant Secretary
Stephen J. Preston (39) Senior Vice President and Chief Actuary
Mary B. Wilkinson (40) Senior Vice President and Treasurer
(Chief Financial Officer)
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 Chairman of the Board of the First Golden American Life
Insurance Company of New York. Since September, 1993, Mr.
Kendall has also served as President and Chief Executive
Officer of Golden American Life Insurance Company. From
September, 1993 through September, 1996, Mr. Kendall also served
as Chairman of the Board 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.
Ms. Carol V. Coleman is a Director of First Golden, having
been first appointed in December, 1997. She is a financial
recruiter with Vantage Staffing since 1994. From 1991 through
1993, she was a consultant with Executive Edge. She also served
as a Chair of the Board for Typa Youth Program Association from
1988 through 1990. Prior to that, she held various executive and
board positions with banking institutions.
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. Frederick S. Hubbell is a Director of First Golden,
having been first appointed in December, 1997. Mr. Hubbell
is Chairman, President and Chief Executive Officer of Equitable
of Iowa since 1991. He also has served as Chairman and President
of Equitable Life Insurance Company of Iowa since 1987. He
serves in a similar capacity for most Equitable of Iowa affilaite
companies.
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, 1997, Mr.
Wilson has also served as President of Directed Services, Inc.
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. Since September, 1996, Mr. Jacobson has
also served as Assistant Secretary of Equitable Life Insurance
Company of Iowa and as Vice President of Equitable of Iowa
Securities Network, Inc. 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 and Chief
Actuary 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. From
November, 1993 through 1996, Ms. Wilkinson 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.
Since September, 1996, Ms. Talman has also served as Assistant
Secretary of Equitable Life Insurance Company of Iowa and as
Vice President of Equitable of Iowa Securities Network, Inc.
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 under a Contract. 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 Contract is owned
by an individual (or is treated as owned by 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 asset 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) certain 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 Accumulation 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.
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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).
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.
If certain amounts become payable in a lump sum from a Contract,
such as the death benefit, it is possible that such amounts
might be viewed as constructively received and thus subject to
tax, even though not actually received. A lump sum will not be
constructively received if it is applied under an annuity option
within 60 days after the date on which it becomes payable. (Any
annuity option selected must comply with applicable mimimum
distribution requirements imposed by the Code.)
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 an individual 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 individual's earned income for the year. Also, with
respect to an individual who has less income than his or
her spouse, premium payments may be made by that individual
to an IRA to the extent of the lesser of (1) $2,000, or
(2) the sum of (i) the compensation includible in the gross
income of the individual's spouse for the taxable year and
(ii) the compensation includible in the gross income of the
individual's spouse for the taxable year
reduced by the amount allowed as a deduction for IRA
contributions to such spouse. 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.
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. It is possible that an enhanced death
benefit could be viewed as violating the prohibition on
investment in life insurance contracts, with the result
that the Contract would not be viewed as satisfying the
requirements of an IRA and would not be a permissible
investment for an individual retirement account.
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 generally
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.
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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. As discussed above
(see Individual Retirment Annuities), there is some
uncertainty regarding the treatment of the Contract's
enhanced death benefit for purposes of certain tax rules
governing IRAs (which would include SEP-IRAs). Employers
intending to use the contract in connection with such
plans should seek competent advice.
SIMPLE IRAs. Section 408(p) of the Code permits certain
small employers to establish "Simple retirement accounts,"
including SIMPLE IRAs, for their employees. Under SIMPLE
IRAs, certain deductible contributions are made by both
employees and employers. SIMPLE IRAs are subject to various
requirements, including limits on the amounts that may be
contributed, the persons who may be eligible, and the time
when distributions may commence. As discussed above (see
Individual Retirement Annuities), there is some uncertainty
regarding the proper characterization of the Contract's
enhanced death benefit for purposes of certain tax rules
governing IRAs (which would include SIMPLE IRAs). Employers
intending to use the Contract in connection with a SIMPLE
retirement account 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 contracts. 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 employees. 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 issuer 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.
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 not less
frequently than annually 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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Financial Statements
First Golden American Life
Insurance Company of New York
December 17, 1996 (Commencement of Operations)
through December 31, 1996
with Report of Independent Auditors
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First Golden American Life Insurance Company of New York
Financial Statements
December 17, 1996 (Commencement of Operations) through
December 31, 1996
CONTENTS
Report of Independent Auditors 1
Audited Financial Statements
Balance Sheet 2
Statement of Income 3
Statement of Changes in Stockholder's Equity 4
Statement of Cash Flows 5
Notes to Financial Statements 6
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Report of Independent Auditors
The Board of Directors and Stockholder
First Golden American Life Insurance Company of New York
We have audited the accompanying balance sheet of First Golden
American Life Insurance Company of New York (wholly owned by
Golden American Life Insurance Company) as of December 31, 1996
and the related statements of income, changes in stockholder's
equity, and cash flows for the period from December 17, 1996
(commencement of operations) through December 31, 1996. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of First Golden American Life Insurance Company of New York at
December 31, 1996, and the results of its operations and its cash
flows for the period from December 17, 1996 through December 31,
1996, in conformity with generally accepted accounting
principles.
/s/ Ernst & Young LLP
Des Moines, Iowa
January 24, 1997
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First Golden American Life Insurance Company of New York
Balance Sheet
December 31, 1996
(Dollars in thousands, except per share data)
ASSETS
Investments:
Fixed maturities available for sale,
at fair value (cost - $24,373) $ 24,220
Short-term investments 350
----------
Total investments 24,570
Cash and cash equivalents 5
Accrued investment income 338
Deferred income tax benefit 54
----------
Total assets $ 24,967
==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Other liabilities $ 1
Income taxes payable 23
----------
Total liabilities 24
Commitments and contingencies
STOCKHOLDER'S EQUITY
Preferred stock, par value $5,000 per share,
authorized 6,000 shares --
Common stock, par value $10 per share,
authorized, issued, and outstanding
200,000 shares 2,000
Additional paid-in capital 23,000
Unrealized depreciation of fixed maturities (99)
Retained earnings 42
----------
Total stockholder's equity 24,943
----------
Total liabilities and stockholder's equity $ 24,967
==========
See accompanying notes.
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First Golden American Life Insurance Company of New York
Statement of Income
Period from December 17, 1996* through December 31, 1996
(Dollars in thousands)
REVENUES
Net investment income (net of expenses of $1) $ 65
----------
Total revenues 65
Income taxes 23
----------
Net income $ 42
==========
*Commencement of operations
See accompanying notes.
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<TABLE>
<CAPTION>
First Golden American Life Insurance Company of New York
Statement of Changes in Stockholder's Equity
Period from December 17, 1996* through December 31, 1996
(Dollars in thousands)
UNREALIZED
ADDITIONAL DEPRECIATION TOTAL
COMMON PAID-IN OF FIXED RETAINED STOCKHOLDER'S
STOCK CAPITAL MATURITIES EARNINGS EQUITY
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Capitalization of Company by
issuance of common stock and
contribution of paid-in capital $ 2,000 $23,000 $25,000
Net income -- -- $ 42 42
Change in unrealized depreciation
of fixed maturities -- -- $ (99) -- (99)
--------------------------------------------------------------
Balance at December 31, 1996 $ 2,000 $23,000 $ (99) $ 42 $24,943
==============================================================
*Commencement of operations
See accompanying notes
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First Golden American Life Insurance Company of New York
Statement of Cash Flows
Period from December 17, 1996* through December 31, 1996
(Dollars in thousands)
OPERATING ACTIVITIES
Net income $ 42
Adjustments to reconcile net income to
net cash provided by operating activities:
Increase in accrued investment income (58)
Net amortization of discount on
short-term investments (7)
Increase in income taxes payable 23
Increase in other liabilities 1
----------
Net cash provided by operating activities 1
INVESTING ACTIVITIES
Purchases of fixed maturities including
accrued interest (24,653)
Purchases of short-term investments (25,598)
Sales of short-term investments 25,255
----------
Net cash used in investing activities (24,996)
FINANCING ACTIVITIES
Capitalization of Company by issuance of common
stock and contribution of paid-in capital 25,000
----------
Net cash provided by financing activities 25,000
----------
Net increase in cash and cash equivalents 5
Cash and cash equivalents at beginning of period --
----------
Cash and cash equivalents at end of period $ 5
==========
*Commencement of operations
See accompanying notes.
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First Golden American Life Insurance Company of New York
Notes to Financial Statements
December 31, 1996
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
First Golden American Life Insurance Company of New York ("First
Golden" or the "Company") a wholly-owned subsidiary of Golden
American Life Insurance Company ("Golden American" or the
"Parent"), was incorporated on May 24, 1996. Golden American is
a wholly-owned indirect subsidiary of Equitable of Iowa
Companies. On December 17, 1996, Golden American provided
capitalization in the amount of $25,000,000 to First Golden (see
note 5). First Golden commenced investment operations on
December 17, 1996. First Golden's primary purpose will be to
offer insurance products in the State of New York. On January 2,
1997, First Golden became licensed as a life insurance company in
the State of New York and is currently pursuing policy approvals.
USE OF ESTIMATES
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported
in the financial statements and accompanying notes. Actual
results could differ from those estimates.
INVESTMENTS
The Company accounts for its investments under the Statement of
Financial Accounting Standards ("SFAS") No. 115, "Accounting for
Certain Investments in Debt and Equity Securities". Pursuant to
SFAS No. 115, fixed maturity securities are designated as either
"available for sale", "held for investment" or "trading". Sales
of fixed maturities designated as "available for sale" are not
restricted by SFAS No. 115. Available for sale securities are
reported at fair value and unrealized gains and losses on these
securities are included directly in stockholder's equity after
adjustment for related changes in deferred income taxes.
At December 31, 1996, all of the Company's fixed maturity
securities are designated as available for sale although the
Company is not precluded from designating fixed maturity
securities as held for investment or trading at some future date.
Securities that the company has the positive intent and ability
to hold to maturity are designated as "held for investment".
Held for investment securities are reported at cost adjusted
for amortization of premiums and discounts.
87
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First Golden American Life Insurance Company of New York
Notes to Financial Statements
December 31, 1996
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVESTMENTS (CONTINUED)
Changes in the fair value of these securities, except for
declines that are other than temporary, are not reflected in the
Company's financial statements. Sales of securities designated
as held for investment are severely restricted by SFAS No. 115.
Securities that are bought and held principally for the purpose
of selling them in the near term are designated as trading
securities. Unrealized gains and losses on trading securities
are included in current earnings. Transfers of securities
between categories are restricted and are recorded at fair value
at the time of the transfer. Securities that are determined to
have a decline in value that is other than temporary are written
down to estimated fair value which becomes the security's new
cost basis by a charge to realized losses in the Company's
statement of income. Premiums and discounts are
amortized/accrued utilizing the scientific interest method which
results in a constant yield over the securities' expected life.
Amortization/accrual of premiums and discounts on mortgage-backed
securities incorporates a prepayment assumption to estimate the
securities' expected life.
Short-term investments are carried at cost, adjusted for
amortization of premiums and accrual of discounts.
Estimated fair values, as reported herein, of publicly-traded
fixed maturity securities are as reported by an independent
pricing service. Fair values of conventional mortgage-backed
securities not actively traded in a liquid market are estimated
using a third-party pricing system, which uses a matrix
calculation assuming a spread over U.S. Treasury bonds based upon
the expected average lives of the securities. Fair values of
private placement bonds are estimated using a matrix that assumes
a spread (based on interest rates and a risk assessment of the
bonds) over U.S. Treasury bonds. Realized gains and losses are
determined on the basis of specific identification and average
cost methods for manager initiated and issuer initiated
disposals, respectively.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company
considers all demand deposits and
88
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<PAGE>
First Golden American Life Insurance Company of New York
Notes to Financial Statements (continued)
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CASH AND CASH EQUIVALENTS (CONTINUED)
interest-bearing accounts not related to the investment function
to be cash equivalents. All interest-bearing accounts classified
as cash equivalents have original maturities of three months or
less.
DEFERRED INCOME TAXES
Deferred tax assets or liabilities are computed based on the
difference between the financial statement and income tax bases
of assets and liabilities using the enacted marginal tax rate.
Deferred tax assets or liabilities are adjusted to reflect the
pro-forma impact of unrealized gains and losses on fixed maturity
securities the Company has designated as available for sale under
SFAS No. 115. Changes in deferred tax assets or liabilities
resulting from this SFAS No. 115 adjustment are charged or
credited directly to stockholder's equity. Deferred income tax
expenses or credits reflected in the Company's Statement of
Income are based on the changes in the deferred tax asset or
liability from period to period (excluding the SFAS No. 115
adjustment).
FAIR VALUE OF FINANCIAL INSTRUMENTS
First Golden has evaluated its financial instruments, including
short-term investments, and determined that carrying amounts
reported in the balance sheet approximate fair value.
2. INVESTMENT OPERATIONS
The Company accounts for its investments under the Statement of
Financial Accounting Standards ("SFAS") No. 115, "Accounting for
Certain Investments in Debt and Equity Securities". SFAS No. 115
requires companies to classify their securities as either
"available for sale", "held to maturity" or "trading". At
December 31, 1996, all of First Golden's fixed maturities are
designated as available for sale.
SFAS No. 115 requires the carrying value of fixed maturity
securities classified as available for sale to be adjusted for
changes in fair value, primarily caused by interest rates. While
other related accounts are adjusted as discussed in Note 1, the
insurance liabilities supported by these securities are not
adjusted under SFAS No. 115, thereby creating volatility in
stockholder's equity as interest rates change. As a result,
the Company expects that its stockholder's equity
89
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First Golden American Life Insurance Company of New York
Notes to Financial Statements (continued)
2. INVESTMENT OPERATIONS (CONTINUED)
will be exposed to incremental volatility due to changes in
market interest rates and the accompanying changes in the
reported value of securities classified as available for sale,
with equity increasing as market interest rates decline and,
conversely, decreasing as market interest rates rise.
For the period December 17, 1996 through December 31, 1996, there
were no realized gains or losses on investments.
The major categories of investment income for the period December
17, 1996 through December 31, 1996 are summarized as follows
(dollars in thousands):
Fixed maturities $57
Short-term investments 9
--------
66
Less investment expenses (1)
--------
Net investment income $65
========
At December 31, 1996, amortized cost, gross unrealized gains and
losses and estimated fair value of the Company's fixed maturity
securities designated as available for sale are as follows:
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
----------------------------------------
(Dollars in thousands)
U.S. government and governmental
agencies and authorities:
Mortgage-backed securities $ 4,870 $ 1 $ (36) $ 4,835
Other 396 -- (2) 394
Public utilities 983 -- (5) 978
Investment grade corporates 16,046 -- (120) 15,926
Below investment grade corporates 2,078 15 (6) 2,087
----------------------------------------
$24,373 $ 16 $ (169) $24,220
========================================
90
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First Golden American Life Insurance Company of New York
Notes to Financial Statements (continued)
2. INVESTMENT OPERATIONS (CONTINUED)
The amortized cost and estimated fair value of fixed maturity
securities by contractual maturity at December 31, 1996, are
shown below. Expected maturities will differ from contractual
maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.
ESTIMATED FAIR
AMORTIZED COST VALUE
------------------------------------
(Dollars in thousands)
Due after one year through five years $ 919 $ 912
Due after five years through ten years 18,584 18,473
----------------------------
19,503 19,385
Mortgage-backed securities 4,870 4,835
----------------------------
$ 24,373 $ 24,220
============================
During periods of significant interest rate volatility, the
mortgages underlying mortgage-backed securities may prepay more
quickly or more slowly than anticipated. If the principal amount
of such mortgages are prepaid earlier than anticipated during
periods of declining interest rates, investment income may
decline due to reinvestment of these funds at lower current
market rates. If principal repayments are slower than
anticipated during periods of rising interest rates, increases in
investment yield may lag behind increases in interest rates
because funds will remain invested at lower historical rates
rather than reinvested at higher current rates. To mitigate this
prepayment volatility, the Company invests primarily in
intermediate tranche collateralized mortgage obligations
("CMOs"). CMOs are pools of mortgages that are segregated into
sections, or tranches, which provide sequential retirement of
bonds rather than a pro-rata share of principal return in the
pass-through structure. The Company owns no "interest only" or
"principal only" mortgage-backed securities. Further, the
Company has not purchased obligations at significant premiums,
thereby limiting exposure to loss during periods of accelerated
prepayments. At December 31, 1996, unamortized premiums on
mortgage-backed securities totaled $18,000 and unaccrued
discounts on mortgage-backed securities totaled $43,000.
The Company analyzes its investment portfolio at least quarterly
in order to determine if the carrying value of its investments
has been impaired. The carrying value of debt and equity
securities is written down to fair value by a charge to realized
losses when an impairment in value appears to be other than
temporary. During 1996, there were no investments having
91
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First Golden American Life Insurance Company of New York
Notes to Financial Statements (continued)
2. INVESTMENT OPERATIONS (CONTINUED)
impairments in value that were other than temporary.
At December 31, 1996, $400,000 in par value of fixed maturity
investments were on deposit with regulatory authorities pursuant
to certain statutory requirements.
No investment in any person or its affiliates (other than bonds
issued by agencies of the United States government) exceeded ten
percent of stockholder's equity at December 31, 1996.
3. INCOME TAXES
First Golden will file a separate federal income tax return.
Deferred income taxes have been established based upon temporary
differences, the reversal of which will result in taxable or
deductible amounts in future years when the related asset or
liability is recovered or settled. The only component of First
Golden's deferred taxes is an asset in the amount of $54,000
related to the unrealized depreciation of fixed maturities.
4. STOCKHOLDER'S EQUITY
First Golden is required to maintain a minimum total statutory-
basis capital and surplus of not less than $4,000,000 under the
provisions of the insurance laws of the State of New York in
which it became licensed to sell variable annuity products on
January 2, 1997.
Under the provisions of the insurance laws of the State of New
York, First Golden cannot distribute any dividends to its
stockholders unless a notice of its intention to declare a
dividend and the amount of the dividend has been filed not less
than thirty days in advance of the proposed declaration. The
superintendent may disapprove the distribution by giving written
notice to the Company within thirty days after the filing should
the superintendent find that the financial condition of the
Company does not warrant the distribution.
5. RELATED PARTY TRANSACTIONS
On December 17, 1996, Golden American contributed $25,000,000 to
First Golden, $2,000,000 in common stock (200,000 shares at $10
per share) and $23,000,000 of additional capital.
All expenses related to the incorporation and licensing of
First Golden were incurred by its
92
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<PAGE>
First Golden American Life Insurance Company of New York
Notes to Financial Statements (continued)
5. RELATED PARTY TRANSACTIONS (CONTINUED)
Parent.
The Company has a service agreement with Golden American in which
Golden American will provide administrative and financial related
services. As of December 31, 1996, no services had been
rendered.
6. COMMITMENTS AND CONTINGENCIES
LEASES
The Company leases its home office space which expires December
31, 2001. The office space is currently under construction with
an expected completion date of February, 1997. As a result, no
rent expense was incurred for the year ended December 31, 1996.
At December 31, 1996, minimum rental payments due under the
operating lease are:
1997 $ 47,348
1998 75,756
1999 75,756
2000 75,756
2001 75,756
----------
$ 350,372
==========
93
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First Golden Life Insurance Company of New York
___________, 1997
__________________________________________________________________
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
94
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<PAGE>
__________________________________________________________________
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: __________________________________________ |
| |
|------------------------------------------------------------------------|
95
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(This page has been intentionally left blank.)
96
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<PAGE>
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
A1
<PAGE>
<PAGE>
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
A2
<PAGE>
<PAGE>
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.
A3
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<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
___________________________________________________________________________
<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").
Thirteen 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"), Smith Barney Series
Fund Inc. (the "Smith Barney Series Fund") and Smith Barney
Concert Allocation Series Inc. (the "Smith Barney Concert
Allocation Series"). 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, Smith
Barney Series Fund and Smith Barney Concert Allocation Series
(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 thirteen 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
<PAGE>
<PAGE>
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 ___________, 1997, 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, SMITH BARNEY SERIES FUND
AND SMITH BARNEY CONCERT ALLOCATION SERIES.
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
230 Park Avenue, Suite 966
New York, NY 10169
1-800-963-9539
Prospectus Dated: ___________, 1997
2
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<PAGE>
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, Smith Barney Series
Fund and Smith Barney Concert Allocation Series
Separate Account NY-B
Account NY-B Divisions
The ESS Trust
Travelers Series Fund
Smith Barney Series Fund
Smith Barney Concert Allocation Series
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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<PAGE>
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 72
STATEMENT OF ADDITIONAL INFORMATION xx
Table of Contents
4
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<PAGE>
Appendix A xx
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
<PAGE>
<PAGE>
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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<PAGE>
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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<PAGE>
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.
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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.
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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.
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The Divisions
Each of the thirteen 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"), a
corresponding Series of the Smith Barney Series Fund, managed by
SBMFM or a corresponding Series of the Smith Barney Concert
Allocation Series, managed by Travelers Investment Adviser, Inc.
("TIA")(TIA, together with SBMFM and 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.
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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
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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.
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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
Expenses/7 Expenses
After Expense After Expense
Series Fees/6 Reimbursement Remibursement
------ ------ ------------- -------------
OTC Portfolio 0.80% 0.40% 1.20%
Research Portfolio 0.80% 0.40% 1.20%
Total Return Portfolio 0.80% 0.40% 1.20%
Travelers Series Fund Expenses:
- -------------------------------
Other Total
Series Fees Expenses Expenses
------ ---- -------- --------
Smith Barney Income and Growth 0.65% 0.08% 0.73%
Smith Barney International Equity 0.90% 0.20% 1.10%
Smith Barney High Income 0.60% 0.24% 0.84%
Smith Barney Money Market/8 0.60% 0.14% 0.74%
_______________________________
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). 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
0.40% of its average daily net assets. This reimbursement is
voluntary and can be terminated at any time. Prior to February
3, 1997, EISI had an agreement to reimburse each portfolio
for all operating expenses, excluding management fees, that
exceeded 0.75% of its average daily net assets. For the year
ended December 31, 1996, no such reimbursement was necessary.
8/ SBMFM, the fund's investment manager, waived all or part
of its management fees for the year ended October 31, 1996 for
the Money Market Portfolio such that the actual total annual
expenses charged in 1996 was .65%. 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% 0.10% 0.85%
Smith Barney Concert Allocation Series Annual Expenses:
- -------------------------------------------------------
Other Expenses Total Expenses
Management After Expense After Expense
Fees/10 Reimbursement/11 Reimbursement/11
---------- ---------------- ----------------
Select High Growth Portfolio .35% 0% .35%
Select Growth Portfolio .35% 0% .35%
Select Balanced Portfolio .35% 0% .35%
Select Conservative Portfolio .35% 0% .35%
Select Income Portfolio .35% 0% .35%
- ------------------
10/ Each Select Portfolio of Smith Barney Concert Allocation Series Inc., as
a shareholder of the underlying Smith Barney Funds (see "Smith Barney
Concert Series" following), also will indirectly bear its proportionate
share of any investment management fees and other expenses paid by the
underlying Smith Barney Funds.
11/ TIA, the manager of each Select Portfolio, has agreed to bear all
expenses of these Select Portfolios of Smith Barney Concert Allocation
Series other than the management fee and extraordinary expenses.
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 $86.91 $122.57
Research $86.91 $122.57
Total Return $86.91 $122.57
Smith Barney Income and Growth $82.21 $108.44
Smith Barney International Equity $85.91 $119.58
Smith Barney High Income $83.31 $111.76
Smith Barney Money Market $82.31 $108.74
Appreciation Portfolio $83.41 $112.06
Select High Growth Portfolio $78.38 $96.86
Select Growth Portfolio $78.38 $96.86
Select Balanced Portfolio $78.38 $96.86
Select Conservative Portfolio $78.38 $96.86
Select Income Portfolio $78.38 $96.86
__________________________________________________________________
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 $26.91 $82.57
Research $26.91 $82.57
Growth & Income $26.91 $82.57
Smith Barney Income and Growth $22.21 $68.44
Smith Barney International Equity $25.91 $119.58
Smith Barney High Income $23.31 $71.76
Smith Barney Money Market $22.31 $68.74
Appreciation Portfolio $23.41 $72.06
Select High Growth Portfolio $18.38 $56.86
Select Growth Portfolio $18.38 $56.86
Select Balanced Portfolio $18.38 $56.86
Select Conservative Portfolio $18.38 $56.86
Select Income Portfolio $18.38 $56.86
__________________________________________________________________
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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 December 31, 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.
("EISI"), EIC Variable, Inc., and Directed Services, Inc.
("DSI"). First Golden is authorized to do business only in the
State of New York. First Golden offers variable annuities.
The Travelers Series Fund, the Smith Barney Series Fund
and the Smith Barney Concert Allocation Series
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, the Smith Barney Series Fund
and the Smith Barney Concert Allocation Series
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, the Smith Barney Series Fund and the Smith
Barney Concert Allocation Series 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 June 13, 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, Smith Barney
Series Fund or the Smith Barney Concert Allocation Series. EISI
serves as the Manager to each Series of the ESS Trust, SBMFM
serves as Manager to each Series of the Travelers Series Fund and
the Smith Barney
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Series Fund and TIA serves as Manager to each Series of the Smith
Barney COncert Allocation Series. 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, SBMFM and TIA 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 not the Fund) pays 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, one 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.
Smith Barney Concert Allocation Series
Smith Barney Concert Allocation Series is an open-end, non-diversified
management investment company. TIA serves as investment manager to each
portfolio in the Smith Barney Concert Allocation Series (the "Select
Portfolios"). TIA is an indirect wholly owned subsidiary of Travelers Group
Inc. Each Select Portfolio of Concert Series seeks to achieve its investment
objective by investing in a diverse mix of "Underlying Smith Barney Funds"
("fund of funds" structure), which consist of open-end management investment
companies or series thereof for which Smith Barney Inc. ("Smith Barney") now
or in the future acts as principal underwriter or for which Smith Barney,
SBMFM or Smith Barney Strategy Advisers Inc. now or in the future acts as
investment adviser. See the Prospectus for the Select Portfolios of Smith
Barney Concert Allocation Series for more information concerning the fund of
funds structure. The fund of funds structure is different from the
investment structure of most investment options available for a variable
annuity contract. Such a structure involves additional income tax risks (see
"Federal Tax Considerations").
The investment objectives of the Select Portfolios are as follows:
Select High Growth Portfolio. The Select High Growth Portfolio's
investment objective is to seek capital appreciation.
Select Growth Portfolio. The Select Growth Portfolio's investment
objective is to seek long-term growth of capital.
Select Balanced Portfolio. The Select Balanced Portfolio's investment
objective is to seek a balance of growth of capital and income.
Select Conservative Portfolio. The Select Conservative Portfolio's
investment objective is to seek income and, secondarily, long-term growth of
capital.
Select Income Portfolio. The Select Income Portfolio's investment
objective is to seek high current income.
While a brief summary of the investment objectives of the Portfolios of
ESS Trust, Travelers Series Fund, Smith Barney Series Fund and Smith Barney
Concert Allocation Series are set forth above, more comprehensive
information, including a discussion of potential risks, is found in the
current Prospectuses for each of the Investment Options, which are included
with this Prospectus. Additional Prospectuses and the Statements of Additional
Information can be obtained by calling the Customer Service Center or writing.
Purchasers should read the Prospectuses carefully before investing.
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) restrict or eliminate any voting rights as to Account
NY-B; and
(4) 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. In
most cases, 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%
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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. 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. 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.
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 greater of the premium paid or the
Accumulation Value plus any charges we deducted; and the
contract will be void as of the effective date of
cancellation. We may 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 this Prospectus
and Registration Statement have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon
appearing in this Prospectus and in the Registration Statement
and are included in reliance upon such report 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 wholly owned subsidiary of Golden American Life
Insurance Company ("Golden American" or the "Parent"), was
incorporated on May 24, 1996. Golden American is a wholly owned
indirect subsidiary of Equitable of Iowa Companies. Equitable of Iowa
Companies is a holding company for Equitable Life Insurance Company of
Iowa, USG Annuity & Life Company, Locust Street Securities, Inc., EIC
Variable, Inc. and Equitable of Iowa Securities Network, Inc. First
Golden's primary purpose will be to offer insurance products in the
State of New York. On January 2, 1997 First Golden became licensed as
a life insurance company in the State of New York. First Golden is
authorized to do business only in the State of New York.
First Golden's primary business purpose is to offer variable
insurance products (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.
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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 offer consumers many choices. However, overall demand for
variable annuity product remains strong for several reasons including:
a dynamic stock market performance over the last 3 years; relatively
low interest rates; an aging United States population that is
increasingly concerned about retirement and estate planning, as well
as maintaining their standard of living in retirement; potential
reductions in government and employer-provided benefits at retirement
as well as lower public confidence in the adequacy of those benefits.
Results of Operations for the period December 17, 1996 (commencement
of operations) through December 31, 1996
Net income for the period from December 17, 1996 through December
31, 1996 was $42,000. Net investment income of $65,000 was earned and
income taxes were $23,000.
Future revenues will be generated from the sale of variable
products resulting in product charge revenues as well as investment
income from the investments. Future benefits and expenses will
include policy benefits, operating expenses and commission expenses
associated with the sale and maintenance of the Contracts.
Liquidity and Capital Resources
Positive cash flow elements from operations included net income
and increases in liabilities. Negative cash flow elements from
operations were produced from two sources, the increase in accrued
investment income and the net amortization of discounts on short-term
investments.
Future cash flows will consist of product charges, investment
income and maturities of fixed maturity investments. Future cash flow
uses will include the payment of annuity and insurance benefits,
operating expenses and commissions and the purchase of new
investments.
On December 17, 1996, Golden American made capital contributions
to First Golden of $25,000,000. Of this amount, $2,000,000
represented 200,000 shares of common stock with a par value of $10.00
per share. The remaining $23,000,000 was contributed as additional
paid-in capital. 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 Golden American if necessary.
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First Golden is required to maintain a minimum capital and
surplus of not less than $4,000,000 under the provisions of the
insurance laws of the State of New York in which it became licensed to
sell insurance products on January 2, 1997.
Under the provisions of the insurance laws of the State of New
York, First Golden cannot distribute any dividends to its
stockholders unless a notice of its intention to declare a dividend
and the amount of the dividend has been filed not less than thirty
days in advance of the proposed declaration. The superintendent may
disapprove the distribution by giving written notice to the Company
within thirty days after the filing should the superintendent find
that the financial condition of the Company does not warrant the
distribution.
The NAIC's risk-based capital requirements require insurance
companies to calculate and report information under a risk-based
capital formula. These requirements are intended to allow insurance
regulators to identify inadequately capitalized insurance companies
based upon the type and mixture of risks inherent in the Company's
operations. The formula includes components for asset risk, liability
risk, interest rate exposure and other factors. The Company intends to
comply with these requirements in 1997, as its insurance license was
approved on January 2, 1997, and expects its total adjusted capital to
exceed levels which require regulatory action.
Segment Information
First Golden's operations will consist of one business segment,
the sale of insurance products. First Golden anticipates that it will
not be dependent upon any single customer but anticipates three
broker/dealers will account for a significant portion of its revenue
in 1997. All premiums will be received from consumers in the State of
New York.
FINANCIAL CONDITION
Investments
First Golden's assets are invested in accordance with applicable
New York 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.
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First Golden makes investments in accordance with investment
guidelines that take into account investment quality, liquidity and
diversification, and invests primarily in investment grade securities.
All of First Golden's assets except for variable separate account
assets are available to meet its obligations under the Contracts. At
December 31, 1996, First Golden had invested assets of $24,570,000
consisting of $24,220,000 of bonds, and $350,000 of short-term
securities.
Based on amortized cost, at December 31, 1996, 91.6% of the
investment portfolio were invested in investment grade bonds and 8.4%
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.
Reserves
Future policy benefits for the fixed account will be established
utilizing the retrospective deposit accounting method. Policy
reserves represent the premiums received plus accrued interest less
mortality and administration charges.
Reinsurance
The Company intends to reinsure its mortality risk associated
with the Contract's guaranteed death benefit with one or more
appropriately licensed insurance companies.
Competition
In 1997, First Golden will be engaged in a business that is
highly competitive because of the number of competitors including
banks, mutual funds and life insurance companies which all compete for
retirement savings from consumers. There are approximately 142 stock,
mutual and other types of insurers in the life insurance business in
the State of New York, a substantial number of which offer similar
products and are significantly larger than First Golden.
Certain Agreements
On November 8, 1996, First Golden and Golden American entered
into an administrative service agreement pursuant to which Golden
American agreed to provide certain accounting, actuarial, tax,
underwriting, sales, management and other services to Golden
American. Expenses incurred by Golden American in relation to this
service agreement will be reimbursed by First Golden on an allocated
cost basis. As of December 31, 1996, no such charges have been
billed to First Golden. First Golden expects to enter into a similar
agreement with another affiliate, Equitable Life Insurance Company
of Iowa, for additional services.
Also on November 8, 1996, First Golden and DSI entered into a
service agreement pursuant to which First Golden has agreed to
provide DSI certain of its personnel to perform management,
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administrative and clerical services and the use of certain of its
facilities. First Golden expects to charge DSI for such expenses
and all other general and administrative costs, first on the basis
of direct charges when identifiable, and second allocated based on
the estimated amount of time spent by First Golden's employees on
behalf of DSI. As of December 31, 1996, no such charges have been
billed to DSI.
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
During 1996, Golden American provided the support necessary for
the incorporation and licensing of First Golden. During 1997, First
Golden will have a few direct employees due to its small size and will
continue to various management services from DSI, Golden American
and other affiliates 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 certain officers of First Golden are also
officers of Equitable of Iowa Companies, Equitable Life Insurance
Company of Iowa and/or of Equitable of Iowa Securities Network,
Inc. See "Directors and Executive Officers."
Properties
First Golden's principal office is located at 230 Park Avenue,
Suite 966, New York, New York 10169, where certain of the Company's
records are maintained. The 2,568 square feet of office space is
leased for a 5 year term.
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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 (47) Executive Vice President, Director
Edward C. Wilson (55) Executive Vice President
Carol V. Coleman (47) Director
Stephen J. Friedman (59) Director
Frederick S. Hubbell (45) Director
Bernard Levitt (71) Director
Roger R. Martin (65) Director
Andrew Kalinowski (52) Director
David L. Jacobson (47) Senior Vice President and Assistant Secretary
Stephen J. Preston (39) Senior Vice President and Chief Actuary
Mary B. Wilkinson (40) Senior Vice President and Treasurer
(Chief Financial Officer)
Marilyn Talman (50) 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 Chairman of the Board of the First Golden American Life
Insurance Company of New York. Since September, 1993, Mr.
Kendall has also served as President and Chief Executive
Officer of Golden American Life Insurance Company. From
September, 1993 through September, 1996, Mr. Kendall also served
as Chairman of the Board 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.
Ms. Carol V. Coleman is a Director of First Golden, having
been first appointed in December, 1996. She is a financial
recruiter with Vantage Staffing since 1994. From 1991 through
1993, she was a consultant with Executive Edge. She also served
as a Chair of the Board for Typa Youth Program Association from
1988 through 1990. Prior to that, she held various executive and
board positions with banking institutions.
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. Frederick S. Hubbell is a Director of First Golden,
having been first appointed in December, 1996. Mr. Hubbell
is Chairman, President and Chief Executive Officer of Equitable
of Iowa since 1991. He also has served as Chairman and President
of Equitable Life Insurance Company of Iowa since 1987. He
serves in a similar capacity for most Equitable of Iowa affilaite
companies.
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, 1997, Mr.
Wilson has also served as President of Directed Services, Inc.
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. Since September, 1996, Mr. Jacobson has
also served as Assistant Secretary of Equitable Life Insurance
Company of Iowa and as Vice President of Equitable of Iowa
Securities Network, Inc. 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 and Chief
Actuary 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. From
November, 1993 through 1996, Ms. Wilkinson 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.
Since September, 1996, Ms. Talman has also served as Assistant
Secretary of Equitable Life Insurance Company of Iowa and as
Vice President of Equitable of Iowa Securities Network, Inc.
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 under a Contract. 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 Contract is owned
by an individual (or is treated as owned by 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 increas 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 asset 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.
Furthermore, under the Contract, the Owner may choose to invest
in the Select Portfolios of Concert Series, which in turn invest
in regulated investment companies which are available for
investment to the general public ("fund of funds structure").
Section 817 of the Code and the Treasury Regulations thereunder
do not currently address variable contract diversification in the
context of such a fund of funds structure. Furthermore, in
consideration of this structure, it is unknown what level of
investment management must be exercised by the managers of the
Portfolios of the Investment Options and what amount of
investment diversification of these portfolios is required in
order to preclude the existence of an unacceptable level of owner
control. As discussed above, if the Owner is deemed to possess
too much control over the assets of the Separate Account, the
Contract would not be given tax-deferred treatment and therefore
the earnings allocable to the Contract would be subject to
federal income tax prior to receipt by the Owner.
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) certain 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 Accumulation 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.
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).
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.
If certain amounts become payable in a lump sum from a Contract,
such as the death benefit, it is possible that such amounts
might be viewed as constructively received and thus subject to
tax, even though not actually received. A lump sum will not be
constructively received if it is applied under an annuity option
within 60 days after the date on which it becomes payable. (Any
annuity option selected must comply with applicable mimimum
distribution requirements imposed by the Code.)
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 an individual 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 individual's earned income for the year. Also, with
respect to an individual who has less income than his or
her spouse, premium payments may be made by that individual
to an IRA to the extent of the lesser of (1) $2,000, or
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(2) the sum of (i) the compensation includible in the gross
income of the individual's spouse for the taxable year and
(ii) the compensation includible in the gross income of the
individual's spouse for the taxable year
reduced by the amount allowed as a deduction for IRA
contributions to such spouse. 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. 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. It is possible that an enhanced death
benefit could be viewed as violating the prohibition on
investment in life insurance contracts, with the result
that the Contract would not be viewed as satisfying the
requirements of an IRA and would not be a permissible
investment for an individual retirement account.
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 generally
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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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. As discussed above
(see Individual Retirement Annuities), there is some
uncertainty regarding the treatment of the Contract's
enhanced death benefit for purposes of certain tax rules
governing IRAs (which would include SEP-IRAs). Employers
intending to use the contract in connection with such
plans should seek competent advice.
SIMPLE IRAs. Section 408(p) of the Code permits certain
small employers to establish "SIMPLE retirement accounts,"
including SIMPLE IRAs, for their employees. Under SIMPLE
IRAs, certain deductible contributions are made by both
employees and employers. SIMPLE IRAs are subject to various
requirements, including limits on the amounts that may be
contributed, the persons who may be eligible, and the time
when distributions may commence. As discussed above (see
Individual Retirement Annuities), there is some uncertainty
regarding the proper characterization of the Contract's
enhanced death benefit for purposes of certain tax rules
governing IRAs (which would include SIMPLE IRAs). Employers
intending to use the contract in connection with a SIMPLE
retirement account 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.
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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 contracts. 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 employees. 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 issuer 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. 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 not less
frequently than annually 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%.
<PAGE>
<PAGE>
Financial Statements
First Golden American Life
Insurance Company of New York
December 17, 1996 (Commencement of Operations)
through December 31, 1996
with Report of Independent Auditors
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<PAGE>
First Golden American Life Insurance Company of New York
Financial Statements
December 17, 1996 (Commencement of Operations) through
December 31, 1996
CONTENTS
Report of Independent Auditors 1
Audited Financial Statements
Balance Sheet 2
Statement of Income 3
Statement of Changes in Stockholder's Equity 4
Statement of Cash Flows 5
Notes to Financial Statements 6
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Report of Independent Auditors
The Board of Directors and Stockholder
First Golden American Life Insurance Company of New York
We have audited the accompanying balance sheet of First Golden
American Life Insurance Company of New York (wholly owned by
Golden American Life Insurance Company) as of December 31, 1996
and the related statements of income, changes in stockholder's
equity, and cash flows for the period from December 17, 1996
(commencement of operations) through December 31, 1996. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of First Golden American Life Insurance Company of New York at
December 31, 1996, and the results of its operations and its cash
flows for the period from December 17, 1996 through December 31,
1996, in conformity with generally accepted accounting
principles.
/s/ Ernst & Young LLP
Des Moines, Iowa
January 24, 1997
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First Golden American Life Insurance Company of New York
Balance Sheet
December 31, 1996
(Dollars in thousands, except per share data)
ASSETS
Investments:
Fixed maturities available for sale,
at fair value (cost - $24,373) $ 24,220
Short-term investments 350
----------
Total investments 24,570
Cash and cash equivalents 5
Accrued investment income 338
Deferred income tax benefit 54
----------
Total assets $ 24,967
==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Other liabilities $ 1
Income taxes payable 23
----------
Total liabilities 24
Commitments and contingencies
STOCKHOLDER'S EQUITY
Preferred stock, par value $5,000 per share,
authorized 6,000 shares --
Common stock, par value $10 per share,
authorized, issued, and outstanding
200,000 shares 2,000
Additional paid-in capital 23,000
Unrealized depreciation of fixed maturities (99)
Retained earnings 42
----------
Total stockholder's equity 24,943
----------
Total liabilities and stockholder's equity $ 24,967
==========
See accompanying notes.
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First Golden American Life Insurance Company of New York
Statement of Income
Period from December 17, 1996* through December 31, 1996
(Dollars in thousands)
REVENUES
Net investment income (net of expenses of $1) $ 65
----------
Total revenues 65
Income taxes 23
----------
Net income $ 42
==========
*Commencement of operations
See accompanying notes.
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</TABLE>
<TABLE>
<CAPTION>
First Golden American Life Insurance Company of New York
Statement of Changes in Stockholder's Equity
Period from December 17, 1996* through December 31, 1996
(Dollars in thousands)
UNREALIZED
ADDITIONAL DEPRECIATION TOTAL
COMMON PAID-IN OF FIXED RETAINED STOCKHOLDER'S
STOCK CAPITAL MATURITIES EARNINGS EQUITY
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Capitalization of Company by
issuance of common stock and
contribution of paid-in capital $ 2,000 $23,000 $25,000
Net income -- -- $ 42 42
Change in unrealized depreciation
of fixed maturities -- -- $ (99) -- (99)
--------------------------------------------------------------
Balance at December 31, 1996 $ 2,000 $23,000 $ (99) $ 42 $24,943
==============================================================
*Commencement of operations
See accompanying notes
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First Golden American Life Insurance Company of New York
Statement of Cash Flows
Period from December 17, 1996* through December 31, 1996
(Dollars in thousands)
OPERATING ACTIVITIES
Net income $ 42
Adjustments to reconcile net income to
net cash provided by operating activities:
Increase in accrued investment income (58)
Net amortization of discount on
short-term investments (7)
Increase in income taxes payable 23
Increase in other liabilities 1
----------
Net cash provided by operating activities 1
INVESTING ACTIVITIES
Purchases of fixed maturities including
accrued interest (24,653)
Purchases of short-term investments (25,598)
Sales of short-term investments 25,255
----------
Net cash used in investing activities (24,996)
FINANCING ACTIVITIES
Capitalization of Company by issuance of common
stock and contribution of paid-in capital 25,000
----------
Net cash provided by financing activities 25,000
----------
Net increase in cash and cash equivalents 5
Cash and cash equivalents at beginning of period --
----------
Cash and cash equivalents at end of period $ 5
==========
*Commencement of operations
See accompanying notes.
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First Golden American Life Insurance Company of New York
Notes to Financial Statements
December 31, 1996
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
First Golden American Life Insurance Company of New York ("First
Golden" or the "Company") a wholly-owned subsidiary of Golden
American Life Insurance Company ("Golden American" or the
"Parent"), was incorporated on May 24, 1996. Golden American is
a wholly-owned indirect subsidiary of Equitable of Iowa
Companies. On December 17, 1996, Golden American provided
capitalization in the amount of $25,000,000 to First Golden (see
note 5). First Golden commenced investment operations on
December 17, 1996. First Golden's primary purpose will be to
offer insurance products in the State of New York. On January 2,
1997, First Golden became licensed as a life insurance company in
the State of New York and is currently pursuing policy approvals.
USE OF ESTIMATES
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported
in the financial statements and accompanying notes. Actual
results could differ from those estimates.
INVESTMENTS
The Company accounts for its investments under the Statement of
Financial Accounting Standards ("SFAS") No. 115, "Accounting for
Certain Investments in Debt and Equity Securities". Pursuant to
SFAS No. 115, fixed maturity securities are designated as either
"available for sale", "held for investment" or "trading". Sales
of fixed maturities designated as "available for sale" are not
restricted by SFAS No. 115. Available for sale securities are
reported at fair value and unrealized gains and losses on these
securities are included directly in stockholder's equity after
adjustment for related changes in deferred income taxes.
At December 31, 1996, all of the Company's fixed maturity
securities are designated as available for sale although the
Company is not precluded from designating fixed maturity
securities as held for investment or trading at some future date.
Securities that the company has the positive intent and ability
to hold to maturity are designated as "held for investment".
Held for investment securities are reported at cost adjusted
for amortization of premiums and discounts.
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First Golden American Life Insurance Company of New York
Notes to Financial Statements
December 31, 1996
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVESTMENTS (CONTINUED)
Changes in the fair value of these securities, except for
declines that are other than temporary, are not reflected in the
Company's financial statements. Sales of securities designated
as held for investment are severely restricted by SFAS No. 115.
Securities that are bought and held principally for the purpose
of selling them in the near term are designated as trading
securities. Unrealized gains and losses on trading securities
are included in current earnings. Transfers of securities
between categories are restricted and are recorded at fair value
at the time of the transfer. Securities that are determined to
have a decline in value that is other than temporary are written
down to estimated fair value which becomes the security's new
cost basis by a charge to realized losses in the Company's
statement of income. Premiums and discounts are
amortized/accrued utilizing the scientific interest method which
results in a constant yield over the securities' expected life.
Amortization/accrual of premiums and discounts on mortgage-backed
securities incorporates a prepayment assumption to estimate the
securities' expected life.
Short-term investments are carried at cost, adjusted for
amortization of premiums and accrual of discounts.
Estimated fair values, as reported herein, of publicly-traded
fixed maturity securities are as reported by an independent
pricing service. Fair values of conventional mortgage-backed
securities not actively traded in a liquid market are estimated
using a third-party pricing system, which uses a matrix
calculation assuming a spread over U.S. Treasury bonds based upon
the expected average lives of the securities. Fair values of
private placement bonds are estimated using a matrix that assumes
a spread (based on interest rates and a risk assessment of the
bonds) over U.S. Treasury bonds. Realized gains and losses are
determined on the basis of specific identification and average
cost methods for manager initiated and issuer initiated
disposals, respectively.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company
considers all demand deposits and
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First Golden American Life Insurance Company of New York
Notes to Financial Statements (continued)
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CASH AND CASH EQUIVALENTS (CONTINUED)
interest-bearing accounts not related to the investment function
to be cash equivalents. All interest-bearing accounts classified
as cash equivalents have original maturities of three months or
less.
DEFERRED INCOME TAXES
Deferred tax assets or liabilities are computed based on the
difference between the financial statement and income tax bases
of assets and liabilities using the enacted marginal tax rate.
Deferred tax assets or liabilities are adjusted to reflect the
pro-forma impact of unrealized gains and losses on fixed maturity
securities the Company has designated as available for sale under
SFAS No. 115. Changes in deferred tax assets or liabilities
resulting from this SFAS No. 115 adjustment are charged or
credited directly to stockholder's equity. Deferred income tax
expenses or credits reflected in the Company's Statement of
Income are based on the changes in the deferred tax asset or
liability from period to period (excluding the SFAS No. 115
adjustment).
FAIR VALUE OF FINANCIAL INSTRUMENTS
First Golden has evaluated its financial instruments, including
short-term investments, and determined that carrying amounts
reported in the balance sheet approximate fair value.
2. INVESTMENT OPERATIONS
The Company accounts for its investments under the Statement of
Financial Accounting Standards ("SFAS") No. 115, "Accounting for
Certain Investments in Debt and Equity Securities". SFAS No. 115
requires companies to classify their securities as either
"available for sale", "held to maturity" or "trading". At
December 31, 1996, all of First Golden's fixed maturities are
designated as available for sale.
SFAS No. 115 requires the carrying value of fixed maturity
securities classified as available for sale to be adjusted for
changes in fair value, primarily caused by interest rates. While
other related accounts are adjusted as discussed in Note 1, the
insurance liabilities supported by these securities are not
adjusted under SFAS No. 115, thereby creating volatility in
stockholder's equity as interest rates change. As a result,
the Company expects that its stockholder's equity
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First Golden American Life Insurance Company of New York
Notes to Financial Statements (continued)
2. INVESTMENT OPERATIONS (CONTINUED)
will be exposed to incremental volatility due to changes in
market interest rates and the accompanying changes in the
reported value of securities classified as available for sale,
with equity increasing as market interest rates decline and,
conversely, decreasing as market interest rates rise.
For the period December 17, 1996 through December 31, 1996, there
were no realized gains or losses on investments.
The major categories of investment income for the period December
17, 1996 through December 31, 1996 are summarized as follows
(dollars in thousands):
Fixed maturities $57
Short-term investments 9
--------
66
Less investment expenses (1)
--------
Net investment income $65
========
At December 31, 1996, amortized cost, gross unrealized gains and
losses and estimated fair value of the Company's fixed maturity
securities designated as available for sale are as follows:
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
----------------------------------------
(Dollars in thousands)
U.S. government and governmental
agencies and authorities:
Mortgage-backed securities $ 4,870 $ 1 $ (36) $ 4,835
Other 396 -- (2) 394
Public utilities 983 -- (5) 978
Investment grade corporates 16,046 -- (120) 15,926
Below investment grade corporates 2,078 15 (6) 2,087
----------------------------------------
$24,373 $ 16 $ (169) $24,220
========================================
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First Golden American Life Insurance Company of New York
Notes to Financial Statements (continued)
2. INVESTMENT OPERATIONS (CONTINUED)
The amortized cost and estimated fair value of fixed maturity
securities by contractual maturity at December 31, 1996, are
shown below. Expected maturities will differ from contractual
maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.
ESTIMATED FAIR
AMORTIZED COST VALUE
------------------------------------
(Dollars in thousands)
Due after one year through five years $ 919 $ 912
Due after five years through ten years 18,584 18,473
----------------------------
19,503 19,385
Mortgage-backed securities 4,870 4,835
----------------------------
$ 24,373 $ 24,220
============================
During periods of significant interest rate volatility, the
mortgages underlying mortgage-backed securities may prepay more
quickly or more slowly than anticipated. If the principal amount
of such mortgages are prepaid earlier than anticipated during
periods of declining interest rates, investment income may
decline due to reinvestment of these funds at lower current
market rates. If principal repayments are slower than
anticipated during periods of rising interest rates, increases in
investment yield may lag behind increases in interest rates
because funds will remain invested at lower historical rates
rather than reinvested at higher current rates. To mitigate this
prepayment volatility, the Company invests primarily in
intermediate tranche collateralized mortgage obligations
("CMOs"). CMOs are pools of mortgages that are segregated into
sections, or tranches, which provide sequential retirement of
bonds rather than a pro-rata share of principal return in the
pass-through structure. The Company owns no "interest only" or
"principal only" mortgage-backed securities. Further, the
Company has not purchased obligations at significant premiums,
thereby limiting exposure to loss during periods of accelerated
prepayments. At December 31, 1996, unamortized premiums on
mortgage-backed securities totaled $18,000 and unaccrued
discounts on mortgage-backed securities totaled $43,000.
The Company analyzes its investment portfolio at least quarterly
in order to determine if the carrying value of its investments
has been impaired. The carrying value of debt and equity
securities is written down to fair value by a charge to realized
losses when an impairment in value appears to be other than
temporary. During 1996, there were no investments having
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First Golden American Life Insurance Company of New York
Notes to Financial Statements (continued)
2. INVESTMENT OPERATIONS (CONTINUED)
impairments in value that were other than temporary.
At December 31, 1996, $400,000 in par value of fixed maturity
investments were on deposit with regulatory authorities pursuant
to certain statutory requirements.
No investment in any person or its affiliates (other than bonds
issued by agencies of the United States government) exceeded ten
percent of stockholder's equity at December 31, 1996.
3. INCOME TAXES
First Golden will file a separate federal income tax return.
Deferred income taxes have been established based upon temporary
differences, the reversal of which will result in taxable or
deductible amounts in future years when the related asset or
liability is recovered or settled. The only component of First
Golden's deferred taxes is an asset in the amount of $54,000
related to the unrealized depreciation of fixed maturities.
4. STOCKHOLDER'S EQUITY
First Golden is required to maintain a minimum total statutory-
basis capital and surplus of not less than $4,000,000 under the
provisions of the insurance laws of the State of New York in
which it became licensed to sell variable annuity products on
January 2, 1997.
Under the provisions of the insurance laws of the State of New
York, First Golden cannot distribute any dividends to its
stockholders unless a notice of its intention to declare a
dividend and the amount of the dividend has been filed not less
than thirty days in advance of the proposed declaration. The
superintendent may disapprove the distribution by giving written
notice to the Company within thirty days after the filing should
the superintendent find that the financial condition of the
Company does not warrant the distribution.
5. RELATED PARTY TRANSACTIONS
On December 17, 1996, Golden American contributed $25,000,000 to
First Golden, $2,000,000 in common stock (200,000 shares at $10
per share) and $23,000,000 of additional capital.
All expenses related to the incorporation and licensing of
First Golden were incurred by its
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First Golden American Life Insurance Company of New York
Notes to Financial Statements (continued)
5. RELATED PARTY TRANSACTIONS (CONTINUED)
Parent.
The Company has a service agreement with Golden American in which
Golden American will provide administrative and financial related
services. As of December 31, 1996, no services had been
rendered.
6. COMMITMENTS AND CONTINGENCIES
LEASES
The Company leases its home office space which expires December
31, 2001. The office space is currently under construction with
an expected completion date of February, 1997. As a result, no
rent expense was incurred for the year ended December 31, 1996.
At December 31, 1996, minimum rental payments due under the
operating lease are:
1997 $ 47,348
1998 75,756
1999 75,756
2000 75,756
2001 75,756
----------
$ 350,372
==========
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First Golden Life Insurance Company of New York
___________, 1997
__________________________________________________________________
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
A1
<PAGE>
<PAGE>
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
A2
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<PAGE>
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.
A3
<PAGE>
<PAGE>
PART B
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, 230 PARK AVENUE,
SUITE 966, NEW YORK, NEW YORK 10169 OR TELEPHONE 1-800-963-9539.
Date of Prospectus and
Statement of Additional Information:
___________, 1997
<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 December 31, 1996,
First Golden had approximately $24.9 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
On November 8, 1996, First Golden and Golden American entered
into an administrative service agreement pursuant to which Golden
American agreed to provide certain accounting, actuarial, tax,
underwriting, sales, management and other services to Golden
American. Expenses incurred by Golden American in relation to this
service agreement will be reimbursed by First Golden on an allocated
cost basis. As of December 31, 1996, no such charges have been
billed to First Golden. First Golden expects to enter into a similar
agreement with another affiliate, Equitable Life Insurance Company
of Iowa, for additional services.
Also on November 8, 1996, First Golden and DSI entered into a
service agreement pursuant to which First Golden has agreed to
provide DSI certain of its personnel to perform management,
administrative and clerical services and the use of certain of its
facilities. First Golden expects to charge DSI for such expenses
and all other general and administrative costs, first on the basis
of direct charges when identifiable, and second allocated based on
the estimated amount of time spent by First Golden's employees on
behalf of DSI. As of December 31, 1996, no such charges have been
billed to DSI.
INDEPENDENT AUDITORS
Ernst & Young LLP, independent auditors, 801 Grand Avenue, Suite 3400,
Des Moines, Iowa 50309, 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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<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 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%.
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
The current yield and effective yield of the Liquid Asset Division
will be given for a current the 7-day period in an updated Statement
of Additional Information.
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 (Securities 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.
Average Annualized Total Return for the Divisions presented on a
standardized basis will be given in an updated Statement of
Additional Information.
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
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<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.
Average Annualized Total Return for the Divisions presented on a
non-standardized basis will be given in an updated Statement of
Additional Information.
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 any 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, 230 PARK AVENUE,
SUITE 966, NEW YORK, NEW YORK 10169 OR TELEPHONE 1-800-963-9539.
Date of Prospectus and
Statement of Additional Information:
___________, 1997
<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 December 31, 1996,
First Golden had approximately $24.9 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
On November 8, 1996, First Golden and Golden American entered
into an administrative service agreement pursuant to which Golden
American agreed to provide certain accounting, actuarial, tax,
underwriting, sales, management and other services to Golden
American. Expenses incurred by Golden American in relation to this
service agreement will be reimbursed by First Golden on an allocated
cost basis. As of December 31, 1996, no such charges have been
billed to First Golden. First Golden expects to enter into a similar
agreement with another affiliate, Equitable Life Insurance Company
of Iowa, for additional services.
Also on November 8, 1996, First Golden and DSI entered into a
service agreement pursuant to which First Golden has agreed to
provide DSI certain of its personnel to perform management,
administrative and clerical services and the use of certain of its
facilities. First Golden expects to charge DSI for such expenses
and all other general and administrative costs, first on the basis
of direct charges when identifiable, and second allocated based on
the estimated amount of time spent by First Golden's employees on
behalf of DSI. As of December 31, 1996, no such charges have been
billed to DSI.
INDEPENDENT AUDITORS
Ernst & Young LLP, independent auditors, 801 Grand Avenue, Suite 3400,
Des Moines, Iowa 50309, 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%.
SEC Standard Money Market Division Yields
Current yield for the Money Market 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
The current yield and effective yield of the Money Market Division
will be given for a current the 7-day period in an updated Statement
of Additional Information.
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
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<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.
Average Annualized Total Return for the Divisions presented on a
standardized basis will be given in an updated Statement of
Additional Information.
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.
Average Annualized Total Return for the Divisions presented on a
non-standardized basis will be given in an updated Statement of
Additional Information.
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 any 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) (1) All financial statements are included in the
Prospectuses, as indicated therein.
(2) Schedule I follows:
SCHEDULE I
SUMMARY OF INVESTMENTS
OTHER THAN INVESTMENTS IN RELATED PARTIES
(Dollars in thousands)
Balance
Sheet
December 31, 1996 Cost/1 Value Amount
- -------------------------------------------------------------------------------
TYPE OF INVESTMENT
Fixed maturities, available for sale:
Bonds:
United States Government and governmental
agencies and authorities $ 5,266 $ 5,229 $ 5,229
Public utilities 983 978 978
Investment grade corporate 16,046 15,926 15,926
Below investment grade corporate 2,078 2,087 2,087
---------------------------------
Total fixed maturities, available for sale 24,373 24,220 24,220
Short-term investments 350 350
--------- ---------
Total investments $ 24,723 $ 24,570
========= =========
Note 1: Cost is defined as the amortized cost for bonds adjusted for
amortization of premiums and accrual of discounts.
EXHIBITS
(b) (1) Resolution of the board of directors of Depositor
authorizing the establishment of the Registrant.
(2) Form of Custodial Agreement.
(3) (a) Form of Distribution Agreement between the
Depositor and Directed Services, Inc.
(b) Form of Dealers Agreement.
(4) (a) Individual Deferred Combination Variable and Fixed
Annuity Contract.
(b) Individual Retirement Annuity Rider Page.
(5) (a) Individual Deferred Combination Variable and Fixed
Annuity Application -- DVA PLUS.
(5) (b) Individual Deferred Combination Variable and Fixed
Annuity Application -- PrimElite.
(6) (a) Articles of Incorporation of First Golden
American Life Insurance Company of New York.
(b) By-Laws of First Golden American Life Insurance
Company of New York.
(7) Not applicable
(8) Form of Participation Agreement between First Golden
American Life Insurance Company of New York and the
Travelers Series Fund Inc., the Smith Barney Series
Fund Inc., and the Smith Barney Concert Allocation
Series Inc.
(9) Opinion and Consent of Myles R. Tashman, Esq.
(10) (a) Consent of Sutherland, Asbill & Brennan, L.L.P.
(b) Consent of Ernst & Young LLP, Independent Auditors
(11) Not applicable
(12) Not applicable
(13) Schedule of Performance Data -- to be filed as part of a
subsequent amendment
(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 Debevoise and Plimpton Director
875 Third Avenue
New York, NY 10022
Bernard Levitt 2603 N.W. 13th Street Director
Delray Beach, FL 33445
Roger R. Martin Lawrence O'Donnell Marcus, Director
L.L.P.
61 Broadway, Suite 2324
New York, NY 10006
Andrew Kalinowski Upstate Special Risk/Life Director
Mark
8 Tobey Village Office Park
Pittsford, NY 14534
Carol V. Coleman 5 Flint Ave Director
Larchmont, NY 10538
Frederick S. Hubbell Equitable of Iowa Companies Director
604 Locust Street
Des Moines, IA 50309
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
Stephen J. Preston Golden American Life Ins. Co. Senior Vice President
1001 Jefferson Street and Chief Actuary
Wilmington, DE 19801
Mary Bea Wilkinson First Golden American Life Senior Vice President
Ins. Co. of New York and Treasurer
230 Park Avenue, Suite 966
New York, NY 10169
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 December 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, Inc.
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.
(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 Chief Executive Officer Chairman, President,
Directed Services, Inc. and Director Chief Executive Officer
1001 Jefferson Street and Director
Wilmington, DE 19801
Edward C. Wilson President Executive Vice President
Directed Services, Inc.
1001 Jefferson Street
Wilmington, DE 19801
Fred S. Hubbell Director Director
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
Jerome L. Sychowski Director None
Equitable of Iowa Companies
604 Locust Street
Des Moines, IA 50309
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. General Counsel and President, General
1001 Jefferson Street Secretary Counsel, Secretary and
Wilmington, DE 19801 Director
Stephen J. Preston Senior Vice President Senior Vice President
Directed Services, Inc. and Chief Actuary
1001 Jefferson Street
Wilmington, DE 19801
(c) Not applicable
Item 30: Location of Accounts and Records
- -------- --------------------------------
Accounts and records are maintained by First Golden American
Life Insurance Company of New York at 230 Park Avenue, New York,
NY, by Golden American Life Insurance Company and Directed
Services, Inc. at 1001 Jefferson St., Wilmington, DE and by
Equitable of Iowa Companies at 604 Locust Street, Des Moines, IA.
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.
Representation
- --------------
Registrant makes the following representation -- The account
meets definition of a "separate account" under federal
securities laws.
<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 18th
day of March, 1997.
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 March 18, 1997.
Signature Title
--------- -----
___________________________ Chairman, President, Chief
Terry L. Kendall* Executive Officer and Director
of Depositor
___________________________ Senior Vice President and
Mary Bea Wilkinson* Treasurer (Chief Financial Officer)
DIRECTORS OF DEPOSITOR
___________________________ ___________________________
Myles R. Tashman* Bernard Levitt*
___________________________ ___________________________
Barnett Chernow* Roger R. Martin*
___________________________ ___________________________
Stephen J. Friedman* Andrew Kalinowski*
___________________________ ___________________________
Carol V. Coleman Frederick S. Hubbell*
By: /s/ Marilyn Talman, Attorney-in-Fact
------------------
Marilyn Talman
_______________________
*Executed by Marilyn Talman on behalf of those indicated pursuant to
Power of Attorney.
<PAGE>
<PAGE>
EXHIBIT INDEX
ITEM EXHIBIT. . . . . . . . . . . . . . . . . . . . . . . . PAGE #
1 Resolution Authorizing Separate Account NY-B . . . . .
2 Form of Custodial Agreement . . . . . . . . . . . . .
3(a) Distribution . . . . . . . . . . . . . . . . . . . . .
3(b) Form of Dealers Agreement . . . . . . . . . . . . . .
4(a) Individual Deferred Combination Variable and
Fixed Annuity Contract . . . . . . . . . . . . .
4(b) Individual Retirement Annuity Rider Page . . . . . . .
5(a) Individual Deferred Combination Variable and
Fixed Annuity Application (DVA PLUS) . . . . . .
5(b) Individual Deferred Combination Variable and
Fixed Annuity Application (PrimElite) . . . . .
6(a) Articles of Incorporation . . . . . . . . . . . . . .
6(b ) By-laws . . . . . . . . . . . . . . . . . . . . . . .
8 Form of Participation Agreement . . . . . . . . . . .
9 Opinion and Consent of Myles R. Tashman, Esq. . . . .
10(a) Consent of Sutherland, Asbill & Brennan, L.L.P. . . .
10(b) Consent of Ernst & Young LLP, Independent Auditors . .
15 Powers of Attorney . . . . . . . . . . . . . . . . . .
<PAGE>
<PAGE>
</TABLE>
Excerpt from:
MINUTES OF THE ORGANIZATIONAL MEETING OF THE
BOARD OF DIRECTORS
OF
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
JUNE 13, 1996
RESOLVED that the Company shall establish and operate a separate
account, referred to herein as the Separate Account NY-B ("Separate
Account"), in accordance with the requirements of New York Insurance
Law Section 4240, as heretofore or hereafter amended; and it is
further
RESOLVED, that Separate Account is hereby empowered to:
(a) to the extent required by the Investment Company Act of
1940, register under such Act and make applications for such
exemptions or orders under such provisions thereof as may appear to be
necessary or desirable;
(b) to the extent required by the Securities Act of 1933, effect
one or more registrations thereunder and, in connection with such
registrations, file one or more registration statements thereunder, or
amendments thereto, including any documents or exhibits required as a
part thereof;
(c) provide for the sale of policies issued by the Company as
the officers of the Company may deem necessary and appropriate, to the
extent such policies provide for allocation of amounts to Separate
Account;
(d) provide for custodial or depository arrangements for assets
allocated to Separate Account as the officers of the Company may deem
necessary and appropriate including self custodianship or safekeeping
arrangements by the Company;
(e) select an independent public accountant to audit the books
and records of Separate Account;
(f) invest or reinvest the assets of Separate Account in
securities issued by the following investment companies registered
under the Investment Company Act of 1940 and portfolios thereof: The
GCG Trust;
(g) divide Separate Account into subaccounts with each
subaccount investing in shares of designated classes or series of
designated investment companies or other appropriate securities; and
(h) perform such additional functions and take such additional
action as may be necessary or desirable to carry out the foregoing and
the intent and purpose thereof; and it is further
RESOLVED, that the assets of Separate Account shall be derived
solely from (a) the sale of variable annuity products, (b) funds
corresponding to dividend accumulation with respect to investment of
such assets, and (c) advances made by the Company in connection with
the operation of Separate Account; and it is further
RESOLVED, that pursuant to New York Insurance Law Section 4240
the assets of Separate Account shall be legally segregated and, to the
extent so provided in the applicable agreements, shall not be
1
<PAGE>
<PAGE>
chargeable with liabilities arising out of any other business of the
Company; and it is further
RESOLVED, that the Company shall maintain in Separate Account
assets with a fair market value at least equal to the statutory
valuation reserves for the variable annuity policies; and it is
further
RESOLVED, that the Company shall maintain in Separate Account
assets with a fair market value at least equal to the statutory
valuation reserves for the variable annuity policies; and it is
further
RESOLVED, that assets allocated to Separate Account shall be
valued at their market value at the date as to which valued in
accordance with the terms of the variable annuity policies issued by
the Company providing for allocation to Separate Account; and it is
further
RESOLVED, that the officers of the Company be, and each of them
hereby is, authorized in their discretion as they may deem appropriate
from time to time in accordance with applicable laws and regulations
(a) to divide the Separate Account into subaccounts, (b) to modify or
eliminate any such subaccounts, (c) to change the designation of
Separate Account to another designation and (d) to designate further
any subaccount thereof, and (e) to deregister Separate Account under
the Investment Company Act of 1940 and to deregister the policies or
units of interest thereunder under the Securities Act of 1933; and it
is further
RESOLVED, that the officers of the Company be, and each of them
hereby is, authorized to invest cash from the Company's general
account in Separate Account or in any division thereof as may be
deemed necessary or appropriate to facilitate the commencement of
Separate Account's operations or to meet any minimum capital
requirements under the Investment Company Act of 1940, and to transfer
cash or securities from time to time between the Company's general
account and Separate Account as deemed necessary or appropriate so
long as such transfers are not prohibited by law and are consistent
with the terms of the variable annuity policies issued by the Company
providing for allocations to Separate Account; and it is further
RESOLVED, that pursuant to New York Insurance Law Section 4240
the income, gains and losses (whether or not realized) from assets
allocated to Separate Account shall, in accordance with any variable
annuity policies issued by the Company providing for allocations to
Separate Account, be credited to or charged against such Separate
Account without regard to other income, gains or losses of the
Company; and it is further
RESOLVED, that authority is hereby delegated to the Chairman or
the President of the Company to adopt procedures providing for, among
other things, criteria by which the Company shall institute procedures
to provide for a pass-through of voting rights to the owners of
variable annuity policies issued by the Company providing for
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allocation to Separate Account with respect to the shares of any
investment companies which are held in Separate Account; and it is
further
RESOLVED, that the officers of the Company are authorized and
directed, with the assistance of accountants, legal counsel, and other
consultants, to prepare and execute any necessary agreements to enable
Separate Account to invest and reinvest the assets of Separate Account
in securities issued by any investment companies registered under the
Investment Company Act of 1940, or other appropriate securities as the
officers of the Company may designate pursuant to the provisions of
the variable annuity policies issued by the Company providing for
allocations to Separate Account; and it is further
RESOLVED, that fiscal year of Separate Account shall end on the
31st day of December each year; and it is further
RESOLVED, that the officers of the Company, with the assistance
of accountants, legal counsel, and other consultants, are authorized
to prepare, execute, and file all periodic reports required under the
Investment Company Act of 1940 and the Securities Exchange Act of
1934; and it is further
RESOLVED, that the Company may register under the Securities Act
of 1933 variable annuity policies, or units of interest thereunder,
under which amounts will be allocated by the Company to Separate
Account to support reserves for such policies and, in connection
therewith, that the officers of the Company be, and each of them
hereby is, authorized, with the assistance of accountants, legal
counsel, and other consultants, to prepare, execute, and file with the
Securities and Exchange Commission, in the name and on behalf of the
Company, registration statements under the Securities Act of 1933,
including prospectuses, supplements, exhibits, and other documents
relating thereto, and amendments to the foregoing, in such form as the
officer executing the same may deem necessary or appropriate; and it
is further
RESOLVED, that the officers of the Company be, and each of them
hereby is, authorized, with the assistance of accountants, legal
counsel, and other consultants, to take all actions necessary to
register Separate Account as a unit investment trust under the
Investment Company Act of 1940 and to take such related actions as
they deem necessary and appropriate to carry out the foregoing; and it
is further
RESOLVED, that the Chief Administrative Officer or the President
of the Company, or in his or her absence, a Senior Vice President, be
and each of them hereby is, authorized, empowered and directed to sign
a form of Notification of Registration under the 1940 Act, and such
Registration Statement as may be required by the 19940 Act and the
1933 Act, in the name of Separate Account by the Company as sponsor
and depositor, and that the appropriate officers of the Company be,
and they hereby are, fully authorized, empowered and directed to
execute and cause to be filed for and on behalf of Separate Account
and the Company said Notification of Registration and said
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Registration Statement, and the appropriate officers are empowered to
execute and cause to be filed, for and on behalf of the Separate
Account and the Company, and the President and each Senior Vice
President of the Company hereby is, fully authorized and the Company
hereby is, fully authorized and the Company be, and hereby is fully
authorized and empowered to execute in the name of Separate Account
and the Company, such amendments to, and such instruments, exhibits
and documents in connection with, said Notification of Registration
and Registration Statement, as they, or any of them may upon advice of
counsel, deem necessary or advisable; and it is further
RESOLVED, that the officers of the Company be, and each of them
hereby is, authorized to prepare, execute, and file, with the
assistance of accountants, legal counsel, and other consultants, with
the Securities and Exchange Commission applications and amendments
thereto for such exemptions from or orders under the Investment
Company Act of 1940, and to request from the Securities Exchange
Commission no action and interpretative letters, as they may from time
to time deem necessary or desirable; and it is further
RESOLVED, that the General Counsel of the Company is hereby
appointed as agent for service under any such registration statement
and is duly authorized to receive communications and notices from the
Securities and Exchange Commission with respect thereto and to
exercise powers given to such agent by the Securities Act of 1933 and
the rules thereunder, and any other necessary acts; and it is further
RESOLVED, that the officers of the Company be, and each of them
hereby is, authorized, with the assistance of accountants, legal
counsel, and other consultants, to effect in the name of and on behalf
of the Company all such registrations, filings, and qualifications
under blue sky or other applicable securities laws and regulations and
under insurance securities laws and insurance laws and regulations of
such states and other jurisdictions, as they may deem necessary or
appropriate with respect to the Company and with respect to any
variable annuity policies under which amounts will be allocated by the
Company to Separate Account to support reserves for such policies;
such authorization shall include registration, filing, and
qualification of the Company and of said policies, as well as
registration, filing, and qualification of officers, employees, and
agents of the Company as brokers, dealers, agents, salespersons, or
otherwise; and such authorization shall also include, in connection
therewith, authority to prepare, execute, acknowledge, and file all
such applications, applications for exemptions, certificates,
affidavits, covenants, consents to service of process, and other
instruments and to take all such action as the officer executing the
same or taking such action may deem necessary or desirable; and it is
further
RESOLVED, that the officers of the Company be, and each of them
hereby is, authorized to execute and deliver all such documents and
papers and to do or cause to be done all such acts and things as they
may deem necessary or desirable to carry out the foregoing resolutions
and the intent and purpose thereof.
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CUSTODY AGREEMENT
(U.S. SECURITIES)
AGREEMENT, dated as of __________________ between First Golden
American Life Insurance Company of New York Separate Account NY-B
("Customer") and The Bank of New York ("Custodian").
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words shall have
the meanings set forth below:
1. "Authorized Person shall be any person, whether or not an
officer or employee of Customer, duly authorized by Customer to give
Oral and/or Written Instructions on behalf of Customer, such persons to
be designated in a Certificate of Authorized Persons which contains a
specimen signature of such person.
2. "BNY Affiliate" shall mean any office, branch or subsidiary
of The Bank of New York Company, Inc.
3. "Book-Entry System" shall mean the Federal Reserve/Treasury
book-entry system for receiving and delivering securities, its
successors and nominees.
4. "Business Day" shall mean any day on which Custodian, Book-
Entry System and relevant Depositories are open for business.
5. "Depository" shall include the Depository Trust Company, the
Participants Trust Company and any other securities depository or
clearing agency (and their respective successors and nominees)
registered with the Securities and Exchange Commission or otherwise
authorized to act as a securities depository or clearing agency.
6. "Oral Instructions" shall mean verbal instructions received
by Custodian from an Authorized Person or from a person reasonably
believed by Custodian to be an Authorized Person.
7. "U.S. Securities" shall include, without limitation,
securities held in the Book-Entry System or at a Depository, common
stock and other equity securities, bonds debentures and other debt
securities, notes mortgages or other obligations, and any instruments
representing rights to receive, purchase, or subscribe for the same, or
representing any other rights or interests therein.
8. "Written Instructions" shall mean any notices, instructions
or other instruments in writing received by Custodian from an
Authorized Person or from a person reasonably believed by Custodian to
be an Authorized Person by letter, telex, facsimile transmission,
Custodian's on-line communication system, or any other method whereby
Custodians able to verify with a reasonable degree of certainty the
identity of the sender of such communications or the sender is required
to provide a password or other identification code.
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ARTICLE II
APPOINTMENT OR CUSTODIAN; ACCOUNTS
REPRESENTATIONS AND WARRANTIES
1. Customer hereby appoints Custodian as custodian of all U.S.
Securities and cash at any time delivered to Custodian during the term
of this Agreement, and authorizes Custodian to hold U.S. Securities in
registered from in its name or the name of its nominees. Custodian
hereby accepts such appointment and agrees to establish and maintain
one or more securities accounts and cash accounts in the name of
Customer (collectively, the "Account") in which it will hold U.S.
Securities and cash as provided herein.
2. Customer hereby represents and warrants, which
representations and warranties shall be continuing and shall be deemed
to be reaffirmed upon each Oral or Written Instruction given by
Customer, that
(a) Customer is duly organized and existing under the laws
of the jurisdiction of its organization, with full power to ________ on
its business as now conducted, to enter into this Agreement and to
perform its obligations hereunder;
(b) This Agreement has been duly authorized, executed and
delivered by Customer, constitutes a valid and legally binding
obligation of Customer, enforceable in accordance with its terms, and
no statute, regulation, rule, order, judgment or contract binding on
Customer prohibits Customer's execution or performance of this
Agreement; and
(c) Either Customer owns the U.S. Securities in the Account
free and clear of all liens, claims, security interests and
encumbrances (except those granted herein) or, if the U.S. Securities
are owned beneficially by others, Customer has the right to pledge such
U.S. Securities to the extent necessary to secure Customer's
obligations hereunder, free of any right of redemption or prior claim
by the beneficial owner. Custodian's security interest pursuant to
Article V hereof shall be a first lien and security interest subject to
no setoffs, counterclaims or other liens prior to or on a parity with
it in favor of any other party other than specific liens granted
preferred status by statute), and Customer shall take any and all
additional steps which Custodian requires to assure itself of such
priority and status, including notifying third parties or obtaining
their consent to, Custodian's security interest.
ARTICLE III
CUSTODY AND RELATED SERVICES
1. Subject to the terms hereof, Customer hereby authorizes
Custodian to hold any Securities received by it from time to time for
Customer's account. Custodian shall be entitled to utilize the Book-
Entry System and Depositories to the extend possible in connection with
its performance hereunder. Securities and cash deposited by Custodian
the Book-Entry System or _________ Depository will be held subject to
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the rules, terms and conditions of the Book-Entry System or such
Depository. Custodian shall identify on its books and records the U.S.
Securities and cash belonging to Customer, whether held directly or
indirectly through the Book-Entry System or a Depository. U.S.
Securities and cash of Customer deposited in the Book-Entry System or a
Depository will be represented in accounts which include only assets
held by Custodian for its customers.
2. Custodian shall furnish Customer with an advice of daily
transactions and a monthly summary of all transfers to or from the
Account.
3. With respect to all U.S.> Securities held in the Account,
Custodian shall, unless otherwise instructed to the contrary:
(a) Receive all income and other payments and advise
Customer as promptly as practicable of any such amounts due but not
paid;
(b) Present for payment and receive the amount paid upon all
U.S. Securities which may mature and advise Customer as promptly as
practicable of any such amounts due but not paid;
(c) Forward to Customer copies of all information or
documents that it may receive from an issuer of U.S. Securities which,
in the opinion of Custodian, are intended for the beneficial owner of
U.S. Securities;
(d) Execute, as custodian, any certificates of ownership,
affidavits, declarations or other certificates under any tax laws now
or hereafter in effect in connection with the collection of bond and
note coupons;
(e) Hold directly, or through the Book-Entry System or a
Depository, all rights and similar U.S. Securities issued with respect
to any U.S. Securities credited to the Account hereunder; and
(f) Endorse for collection checks, drafts or other
negotiable instruments.
4. (a) Whenever U.S. Securities (including, but not limited to,
warrants, options, tenders, options to tender or non-mandatory puts or
calls) confer optional rights on Customer or provide for discretionary
action or alternative courses of action by Customer, Customer shall be
responsible for making any decisions relating thereto and for directing
Custodian to act. In order for Custodian to act, it must receive
Customer's Written Instructions at Custodian's offices, addressed as
Custodian may from time to time request, not later than noon (New York
time) at least two (2) Business Days prior to the last scheduled date
to act with respect to such U.S. Securities (or such earlier date or
time as Custodian may notify Customer). Absent Custodian's timely
receipt of such written instructions, Custodian shall not be liable for
failure to take any action relating to or to exercise any rights
conferred by such U.S. Securities.
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5. All voting rights with respect to U.S. Securities, however
registered, shall be exercised by Customer or its designee.
Custodian's only duty shall be to mail to Customer any documents
(including proxy statements, annual reports and signed proxies)
relating to the exercise of such voting rights.
6. Custodian shall promptly advise Customer upon its
notification of the partial redemption, partial payment or other action
affecting less than all U.S. Securities of the relevant class. If
Custodian or Depository holds any U.S. Securities in which Customer has
an interest as part of a fungible mass, Custodian or Depository may
select the U.S. Securities to participate in such partial redemption,
partial payment or other action in any non-discriminatory manner that
it customarily uses to make such selection.
7. Custodian shall not under any circumstances accept bearer
interest coupons which have been stripped from United States federal,
state or local government or agency securities unless explicitly agreed
to by Custodian in writing.
ARTICLE IV
PURCHASE AND SALE OF U.S. SECURITIES;
CREDITS TO ACCOUNT
1. Promptly after each purchase or sale of U.S. Securities by
Customer, Customer shall deliver to Custodian Written Instructions
specifying all information necessary for Custodian to settle such
purchase or sale. Custodian shall account for all purchases and sales
of U.S. Securities on the actual settlement date unless otherwise
agreed to Custodian.
2. Customer understands that when Custodians instructed to
deliver U.S. Securities against payment, delivery of such U.S.
Securities and receipt of payment therefor may not be completed
simultaneously. Customer assumes full responsibility for all credit
risks involved in connection with Custodian's delivery of U.S.
Securities pursuant to instructions of Customer.
3. Custodian may, as a matter of bookkeeping convenience or by
separate agreement with Customer, credit the Account with the proceeds
from the sale, redemption or other disposition of U.S. Securities or
interest, dividends or other distributions payable on U.S. Securities
prior to its actual receipt of final payment therefor. All such
credits shall be conditional until Custodian's actual receipt of final
payment and may be reversed by Custodian to the extent that final
payment is not received. Payment with respect to a transaction will
not be "final" until Custodian shall have received immediately
available funds which under applicable law or rule are irreversible and
not subject to any security interest, levy or other encumbrance, and
which are specifically applicable to such transaction.
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4. Custodian shall have no obligation, and shall not be liable,
for any loss or damage whatsoever resulting from its failure to settle
any Security transaction where the rules of a Depository prevent the
receipt or delivery of such Security (i.e., that the Security has been
"chilled"). Custodian may, but shall have no obligation to, attempt to
utilize alternative methods of delivering securities from time to time
offered by a Depository.
ARTICLE V
OVERDRAFTS OR INDEBTEDNESS
If Custodian in its sole discretion advances funds to Customer or
there shall arise for whatever reason an overdraft in the Account
(including, without limitation, overdrafts incurred in connection with
the settlement of securities transactions or funds transfers or if
Customer is for any other reason indebted to Custodian, Customer agrees
to repay Custodian on demand the amount of the advance, overdraft or
indebtedness plus accrued interest at a rate ordinarily charged by
Custodian to its institutional custody customers. In order to secure
repayment of Customer's obligations to Custodian hereunder, Customer
hereby agrees that Custodian shall have a continuing lien and security
interest in and to all U.S. Securities, money and other property now or
hereafter held in the Account (including proceeds thereof), and any
other property at any time held by it for the account of Customer. In
this regard, Custodian shall be entitled to all the rights and remedies
of a pledgee under common law and a secured party under the New York
Commercial Code and any other applicable laws, rules or regulations as
then in effect.
ARTICLE VI
CONCERNING CUSTODIAN
1. (a) Custodian shall exercise the due care expected of a
professional custodian for hire with respect to the Securities in its
possession or control. Except as otherwise expressly provided herein,
Custodian shall not be liable for any costs, expenses, damages,
liabilities or claims (including attorneys' and accounts' fees)
incurred by or asserted against Customer, except those costs, expenses,
damages, liabilities or claims arising out of the negligence, fraud or
wilful misconduct of Custodian. Custodian shall have no obligation
hereunder for costs, expenses, damages, liabilities or claims
(including attorneys' or accounts' fees) which are sustained or
incurred by reason of any action or inaction by the Book-Entry System
or any Depository, unless such action or inaction is caused by the
negligence, fraud or wilful misconduct of Custodian. In no event shall
Custodian be liable to Customer or any third party for special,
indirect or consequential damages, or lost profits or loss of business,
arising in connection with this Agreement.
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(b) Customer agrees to indemnify Custodian and hold
Custodian harmless from and against any and all costs, expenses,
damages, liabilities and claims (including reasonable attorneys' fees
and accounts' fees), sustained or incurred by or asserted against
Custodian by reason of or as a result of any action or inaction, or
arising out of Custodian's performance hereunder, including reasonable
fees and expenses of counsel incurred by Custodian in a successful
defense of claims by Customer; provided, that Customer shall not
indemnify Custodian for those costs, expenses, damages, liabilities or
claims arising out of Custodian's negligence, fraud or wilful
misconduct. This indemnity shall be a continuing obligation of
Customer, its successors and assigns, notwithstanding the termination
of this Agreement.
(c) If any loss of Securities arises out of the negligence,
fraud or wilful misconduct of Custodian, or if any loss of definitive
Securities arises out of the (I) negligence or dishonesty of
Custodian's officers and employees, or (ii) burglary, robbery, holdup,
theft or mysterious disappearance, including loss by damage or
destruction (while the definitive Securities are in Custodian's
physical possession), Custodian shall promptly replace such Securities
with like kind and quality, together with all rights and privileges
pertaining to such Securities or, if acceptable to Customer, deliver
the cash equivalent to the extent of the fair market value of the
Securities as of the date of discovery of such loss.
2. Without limiting the generality of the foregoing, Custodian
shall be under no obligation to inquire into, and shall not be liable
for, any losses incurred by Customer or any other person as a result of
the receipt or acceptance of fraudulent, forged or invalid U.S.
Securities, or U.S. Securities which are otherwise not freely
transferable or deliverable without encumbrance.
3. Custodian may, with respect to questions of law related to
this Agreement and Custodian's performance hereunder, obtain the advice
of counsel, at the expense of Customer if prior approval is received
from Customer. Custodian shall be fully protected with respect to
anything done or omitted by it in good faith in conformity with such
advice.
4. Custodian shall be under no obligation to take action to
collect any amount payable on U.S. Securities in default, or if payment
is refused after due demand and presentment.
5. Custodian shall have no duty or responsibility to inquire
into, make recommendations, supervise, or determine the suitability of
any transactions affecting any Account.
6. Customer shall pay to Custodian the fees set forth in
Schedule I attached hereto, such fees to remain in effect for a period
of two years from the date of this Agreement. Customer shall reimburse
Custodian for all costs associated with the conversion of Customer's
Securities hereunder and the transfer of Securities and records kept in
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connection with this Agreement. Custodian hereby waives all customary
fees for services performed in conjunction with the initial conversion
of Customer's Securities hereunder and the transfer of Securities and
records kept in connection with such Securities initially converted.
7. Custodian shall be entitled to rely upon any Written or Oral
Instruction actually received by Custodian and reasonably believed by
Custodian to be duly authorized and delivered. Customer agrees to
forward to Custodian Written Instructions confirming Oral Instructions
by the close of business of same day that such Oral Instructions are
given to Custodian. Customer agrees that the fact that such confirming
Written Instructions are not received or that contrary Written
Instructions are received by Custodian shall in no way affect the
validity or enforceability of transactions authorized by such Oral
Instruction and effected by Custodian. If Customer elects to transmit
Written Instructions through an on-line communication system offered by
Custodian, Customer's use thereof shall be subject to the Terms and
Conditions attached hereto as Appendix I.
8. (a) During Custodian's normal business hours upon receipt of
reasonable notice from Customer, any officer or employee of the
Customer, any independent account(s) selected by the Customer and any
person designated by any regulatory authority having jurisdiction over
Customer shall be entitled to examine on Custodian's premises.
Securities held by Custodian on its premises and the Custodian's
records regarding Securities held hereunder deposited with entities
authorized to hold Securities in accordance with Article III, Section I
hereof, but only upon Customer's furnishing Custodian with properly
authorized instructions to that effect, provided, such examination
shall be consistent with Custodian's obligations of confidentiality to
other parties. Custodian's costs and expenses in facilitating such
examinations shall be borne by Customer, provided that such costs and
expenses are not deemed to be Custodian's costs in providing Customer
with documents it is otherwise obligated to provide Customer hereunder.
(b) Custodian shall, subject to restrictions under
applicable law, provide for itself and seek to obtain from any entity
with which Custodian maintains the physical possession of any of the
Securities in the Account such records of such entity relating to the
Account as may be reasonably required by the Customer or its agents in
connection with an internal examination by the Customer of its own
affairs. Upon reasonable request from Customer, Custodian shall use its
best efforts to furnish to Customer such reports (or portions thereof)
of the external auditors of each such entity as related directly to
such entity's system of internal accounting controls applicable to its
duties under its agreement with Custodian.
9. It is understood that Custodian is authorized to supply any
information regarding the Account which is required by any law,
regulation or rule now or hereafter in effect.
10. Custodian shall not be responsible or liable for any failure
or delay in the performance its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances
beyond its reasonable control, including without limitation, acts of
God; earthquakes; fires; floods; wars; civil or military disturbances;
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sabotage; epidemics; riots; interruptions, loss or malfunctions of
utilities, computer (hardware or software) or communications service;
accidents; labor disputes; acts of civil or military authority or
governmental actions; it being understood that Custodian shall use its
best efforts to resume performance as soon as practicable under the
circumstances.
11. Custodian may enter into subcontracts, agreements and
understands with any BNY Affiliate, whenever and on such terms and
conditions as it deems necessary or appropriate to perform its services
hereunder. No such subcontract, agreement or understanding shall
discharge Custodian from its obligations hereunder.
12. Custodian shall notify Customer promptly of missing
Securities which could effect the sale, redemption or other payments to
Customer related to such missing Securities. Custodian shall notify
Customer of any position shortages older than 30 days in any Security
held by Customer.
13. Custodian shall have no duties or responsibilities whatsoever
except such duties and responsibilities as are specifically set forth
in this Agreement, and no covenant or obligation shall be implied
against Custodian in connection with this Agreement.
ARTICLE VII
TERMINATION
Each party may terminate this Agreement by giving to the other
party a notice in writing specifying the date of such termination,
which shall be not less than ninety (90) days after the date of such
notice. Upon termination hereof, Customer shall pay to Custodian such
compensation as may be due to Custodian, and shall likewise reimburse
Custodian for other amounts payable or reimbursable to Custodian
hereunder. Custodian shall follow such reasonable Oral or Written
Instructions concerning the transfer of custody of records, U.S.
Securities and other items as Customer shall give; provided, that (a)
Custodian shall have no liability for shipping and insurance costs
associated therewith, and (b) full payment shall have been made to
Custodian of its compensation, costs, expenses and other amounts to
which it is entitled hereunder. If any U.S. Securities or cash remain
in the Account, Custodian may deliver to Customer such U.S. Securities
and cash. Upon termination of this Agreement, except as otherwise
provided herein, all obligations of the parties to each other hereunder
shall cease.
ARTICLE VIII
MISCELLANEOUS
1. Customer agrees to furnish to Custodian a new Certificate of
Authorized Persons in the event of any change in the then present
Authorized Persons. Until such new Certificate is received, Custodian
shall be fully protected in acting upon Oral Instructions and Written
Instruction of such present Authorized Persons.
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2. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to Custodian, shall be
sufficiently given if addressed to Custodian and received by it at its
offices at One Wall Street - Financial Instructions Division, New York,
New York 10286, or at such other place as Custodian may from time to
time designate in writing.
3. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to Customer shall be
sufficiently given if addressed to Customer and received by it at its
offices at 604 Locust Street, P.O. Box 1635, Des Moines, Iowa 50306-
1635, or at such other place as Customer may from time to time
designate in writing.
4. Each and every right granted to either party hereunder or
under any other document delivered hereunder or in connection herewith,
or allowed it by law or equity, shall be cumulative and may be
exercised from time to time. No failure on the part of either party to
exercise, and no delay in exercising, any right will operate as a
waiver thereof, nor will any single or partial exercise by either party
of any right preclude any other or future exercise thereof or the
exercise of any other right.
5. In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions shall
not in any way be affected thereby. This Agreement may not be amended
or modified in any manner except by a written agreement executed by
both parties. This Agreement shall extend to and shall be binding upon
the parties hereto, and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable by
either party without the written consent of the other.
6. This Agreement shall be construed in accordance with the
substantive laws of the State of New York, without regard to conflicts
of laws principles thereof. Customer and Custodian hereby consent to
the jurisdiction of a state or federal court situated in New York City,
New York in connection with any dispute arising hereunder. To the
extent that in any jurisdiction Customer may now or hereafter be
entitled to claim, for itself or its assets, immunity from suit,
execution, attachment (before or after judgment) or other legal
process, Customer irrevocably agrees not to claim, and it hereby
waives, such immunity.
7. The parties hereto agree that in performing hereunder,
Custodian is acting solely on behalf of Customer and no contractual or
service relationship shall be deemed to be established hereby between
Custodian and any other person.
8. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
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IN WITNESS WHEREOF, Customer and Custodian have caused this
Agreement to be executed by their respective officers, thereunto duly
authorized, as of the day and year first above written.
FIRST GOLDEN AMERICAN LIFE
INSURANCE COMPANY OF NEW YORK
By: __________________________________
Title:
Tax Identification No.:
THE BANK OF NEW YORK
By: __________________________________
Title:
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APPENDIX I
THE BANK OF NEW YORK
ON-LINE COMMUNICATIONS SYSTEM (THE "SYSTEM")
TERMS AND CONDITIONS
1. License; Use. Upon delivery to Customer of software enabling
Customer to obtain access to the System (the :Software"), Custodian
grants to Customer a personal, nontransferable and nonexclusive license
to use the Software solely for the purpose of transmitting and
receiving communications to and from Custodian in connection with
Customer's Account(s). Customer shall not sell, lease or otherwise
provide, directly or indirectly, the Software or any portion thereof to
any other person or entity without the written consent of Custodian.
2. Equipment. Customer shall obtain and maintain at its own
cost and expense all equipment and services, including but not limited
to communications services, necessary for it to utilize the Software
and obtain access to the System, and Custodian shall not be responsible
for the reliability or availability of any such equipment or services.
3. Proprietary Information. Customer acknowledges that the
Software, all data bases made available to Customer through the System,
and any proprietary data, processes, information and documentation
(other than which are or become part of the public domain or are
legally required to be made available to the public) (collectively, the
"Information"), are the exclusive and confidential property of
Custodian. Customer shall keep the Information confidential by suing
the same care and discretion that Customer uses with respect to its own
confidential property and trade secrets and shall neither make nor
permit any disclosure without the prior written consent of Custodian.
Upon termination of the Agreement or the Software license granted
hereunder for any reason, Customer shall return all copies of the
Information to Custodian.
4. Modifications. Custodian reserves the right to modify the
Software from time to time and Customer shall install new releases of
the Software as Custodian may direct. Customer agrees not to modify or
attempt to modify the Software without Custodian's prior written
consent. Customer acknowledges that any modifications to the Software,
whether by Customer or Custodian and whether with or without
Custodian's consent, shall be come the property of Custodian.
5. No Representations or Warranties. Custodian makes no
warranties or representations of any kind with regard to the Software
or the System, including but not limited to any implied warranties of
merchantability or fitness for a particular purpose.
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6. Security; Reliance; Unauthorized Use. Customer will cause
all persons utilizing the Software and System to treat all applicable
user and authorization codes, passwords and authentication keys with
extreme care. Custodian is hereby irrevocably authorized to act in
accordance with and rely on Written Instructions received by it through
the System. Customer acknowledges that it is its sole responsibility
to assure that only Authorized Persons use the System and that
Custodian shall not be responsible nor liable for any unauthorized use
thereof.
7. System Acknowledgments. Custodian shall acknowledge through
the System its receipt of each Written Instruction communicated through
the System, and in the absence of such acknowledgment Custodian shall
not be liable for any failure to act in accordance with such Written
Instruction and Customer may not clam that such Written Instruction was
received by Custodian.
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DISTRIBUTION AGREEMENT
AGREEMENT dated November 8, 1996, by and between First Golden American
Life Insurance Company of New York ("First Golden"), a New York corporation,
on its own behalf and on behalf of Separate Account NY-B, the Fixed Account
and Separate Account NY-A (the "Accounts") and Directed Services, Inc.
("DSI"), a New York corporation.
WHEREAS, the Accounts are separate accounts established and maintained by
First Golden pursuant to the laws of the State of New York for variable life
and annuity contracts issued by First Golden under which income, gains, and
losses, whether or not realized, from assets allocated to such Accounts, are
credited to or charged against such Accounts without regard to other income,
gains or losses of First Golden; and
WHEREAS, First Golden proposes to issue and sell annuity contracts
through the Separate Account NY-B and the Fixed Account and life insurance
contracts through Separate Account NY-A to suitable purchasers; and
WHEREAS, DSI is duly registered as a broker-dealer under the Securities
Exchange Act of 1934 ("1934 Act") and is a member of the National Association
of Securities Dealers, Inc. ("NASD"); and
WHEREAS, First Golden and DSI desire to enter into an agreement pursuant
to which DSI will act as a principal underwriter for the sale of the contracts
and may distribute the contracts through one or more organizations as set
forth in Section 3. below.
NOW, THEREFORE, FIRST GOLDEN AND DSI HEREBY AGREE AS FOLLOWS:
1. TERM
This Agreement shall remain in force until it is terminated in accordance
with the provisions of paragraph 13.
2. PRINCIPAL UNDERWRITER
First Golden hereby appoints DSI and DSI accepts such appointment, during
the term of this Agreement, subject to any registration requirements of
The Securities Act of 1933 ("1933 Act"), The Investment Company Act of
1940 ("1940 Act"), and the provisions of the 1934 Act, to be a
distributor and principal underwriter of the contracts issued through the
Accounts. DSI shall offer the contracts for sale and distribution at
premium rates to be set by First Golden. Contracts may be sold only by
persons who are duly licensed insurance agents appointed by First Golden
and NASD registered representatives as set forth in Section 3 below.
First Golden hereby appoints DSI as its agent for the sale of contracts
in such jurisdictions as First Golden is properly licensed to sell
contracts.
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3. SALES AGREEMENTS
DSI is hereby authorized to enter into separate written agreements
("Sales Agreements"), on such terms and conditions as DSI may determine
not to be inconsistent with this Agreement, with broker/dealers which
agree to participate in the distribution of and to use their best efforts
to solicit applications for contracts. Such broker/dealers and their
agents or representatives soliciting applications for contracts shall be
duly and appropriately licensed, registered or otherwise qualified for
the sale of contracts under the insurance laws and any applicable
securities laws of each state or other jurisdiction in which the
contracts may be lawfully sold and in which First Golden is licensed to
sell contracts. Each such broker/dealer shall be both registered as a
broker-dealer under the 1934 Act and a member of the NASD, or if not so
registered or not such a member, then the agents and representatives of
such organization soliciting applications for contracts shall be agents
and registered representatives of a registered broker/dealer and NASD
member which is the parent or affiliate of such organization and which
maintains full responsibility for the training, supervision, and control
of the agents and representatives selling contracts.
DSI shall have the responsibility for the supervision of all such
broker/dealers to the extent required by law and shall assume any legal
responsibilities of First Golden for the acts, commissions or
defalcations of any such broker/dealers. Application materials for
contracts solicited by such broker/dealers through their agents or
representatives shall be forwarded to DSI. All payments for contracts
shall be remitted promptly by such broker/dealers directly to First
Golden.
If held at any time by DSI or a broker-dealer, such payments shall be
held in a fiduciary capacity as agent for First Golden and shall be
remitted promptly to First Golden. All such payments, whether by check,
money order, or wire order, shall be the property of First Golden.
Anything in this Distribution Agreement to the contrary notwithstanding,
First Golden shall retain the rights to control the sale of contracts and
to appoint and discharge agents for the sale of contracts. DSI shall be
held to the exercise of reasonable care in carrying out the provisions of
this Distribution Agreement.
4. AGENTS
DSI is authorized to appoint the broker/dealers described in paragraph 3
above as agents of First Golden for the sale of contracts. First Golden
will undertake to appoint such as agents authorized to represent First
Golden in the appropriate states or jurisdictions; provided that First
Golden reserves the right to refuse to appoint any proposed agent, or
once appointed to terminate the same without notice.
5. SUITABILITY
First Golden wishes to ensure that the contracts distributed by DSI will
be issued to purchasers for whom the contracts shall be suitable. DSI
shall take reasonable steps to ensure that the various agents appointed
by it to sell contracts shall not make recommendations to an applicant to
purchase contracts in the absence of reasonable grounds to believe that
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the purchase of contracts is suitable for such applicant. While not
limited to the following, a determination of suitability shall be based
on information furnished to an agent after reasonable inquiry concerning
the applicant's insurance and investment objectives and financial
situation and needs.
6. SALES MATERIALS
The responsibility of the parties hereto for consulting with respect to
the design and the drafting and legal review and filing of sales
materials, and for the preparation of sales proposals related to the sale
of contracts shall be as the parties hereto agree in writing. DSI shall
ensure, in its Sales Agreements, that organizations appointed by it, and
registered representatives of such organizations, shall not use, develop
or distribute any sales materials which have not been approved by First
Golden.
7. REPORTS
DSI shall have the responsibility for, with respect to agents appointed
by it, maintaining the records of agents licensed, registered and
otherwise qualified to sell contracts, and for furnished periodic reports
to First Golden as to the sale of contracts made pursuant to this
Agreement.
8. RECORDS
DSI shall maintain and preserve for the periods prescribed by law or
other agreement, such accounts, books, and other documents as are
required of it by applicable laws and regulations. The books, accounts
and records of First Golden, the Accounts and DSI as to all transactions
hereunder shall be maintained so as to clearly and accurately disclose
the nature and details of the transactions, including such accounting
information as necessary to support the reasonableness of the amounts to
be paid by First Golden hereunder.
9. COMPENSATION
First Golden shall pay DSI the compensation due it as set forth in the
attached Exhibit, as such Exhibit may from time to time be amended.
10. INDEPENDENT CONTRACTOR
DSI shall act as an independent contractor and nothing herein contained
shall constitute DSI or its agents or employees as employees of First
Golden in connection with the sale of contracts.
11. INVESTIGATION AND PROCEEDINGS
(a) DSI and First Golden agree to cooperate fully in insurance
regulatory investigations or proceedings or judicial proceedings
arising in connection with the offering, sale or distribution of
contracts distributed under this Agreement. DSI and First Golden
further agree to cooperate fully in any securities regulatory
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investigation or proceeding or judicial proceeding with respect to
First Golden, DSI, their affiliates and their agents or
representatives to the extent that such investigation or proceeding
is in connection with the contracts offered, sold or distributed
under this Agreement. Without limiting the foregoing:
(i) DSI will be notified promptly of any customer
complaint or notice of any regulatory investigation or
proceeding or judicial proceeding received by First Golden with
respect to DSI or any agent or representative which may affect
First Golden's issuance of contracts marketed under this
Agreement.
(ii) DSI will promptly notify First Golden of any customer
complaint or notice of any regulatory investigation or
proceeding received by DSI or its affiliates with respect to
DSI or any agent or representative in connection with any
contracts distributed under this Agreement or any activity in
connection with contracts.
(b) In the case of a substantive customer complaint, DSI and First
Golden will cooperate in investigating such complaint and any
response to such complaint will be sent to the other party to this
Agreement for approval not less than five business days prior to its
being sent to the customer or regulatory authority, except that if a
more prompt response is required, the proposed response shall be
communicated by telephone, telegraph or facsimile.
12. INDEMNIFICATION
(a) First Golden agrees to indemnify and hold harmless DSI and its
affiliates and each officer and director thereof against any losses,
claims, damages or liabilities, joint or several, to which DSI or
its affiliates or such officer or director may become subject, under
the 1933 Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a
material fact, required to be stated therein or necessary to make
the statements therein not misleading, contained:
(i) in any prospectus, or any amendment thereof, or
(ii) in any blue-sky application or other document
executed by First Golden specifically for the purpose of
qualifying contracts for sale under the securities laws of any
jurisdiction.
First Golden will reimburse DSI and each officer or director,
for any legal or other expenses reasonably incurred by DSI or such
officer or director in connection with investigating or defending
any such loss, claim, damage, liability or action; provided that
First Golden will not be liable in any such case to the extent that
such loss, claim, damage or liability arises out of, or is based
upon, an untrue statement or alleged untrue statement or omission or
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alleged omission made in reliance upon and in conformity with
information (including, without limitation, negative responses to
inquiries) furnished to First Golden by or on behalf of DSI
specifically for use in the preparation of any prospectus or any
amendment thereof or any such blue-sky application or any amendment
thereof or supplement thereto.
(b) DSI agrees to indemnify and hold harmless First Golden and its
directors, each of its officers who has signed the registration
statement and each person, if any, who controls First Golden within
the meaning of the 1933 Act or the 1934 Act, against any losses,
claims, damages or liabilities to which First Golden and any such
director or officer or controlling person may become subject, under
the 1933 Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are
based upon:
(i) Any untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state a
material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading,
contained (a) in any prospectus or any amendments thereof, or,
(b) in any blue-sky application, in each case to the extent,
but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in
reliance upon and in conformity with information (including
without limitation, negative responses to inquiries) furnished
to First Golden by DSI specifically for use in the preparation
of any prospectus or any amendments thereof or any such blue-
sky application or any such amendment thereof or supplement
thereto; or
(ii) Any unauthorized use of sales materials or
any verbal or written misrepresentations or any unlawful
sales practices concerning contracts by DSI; or
(iii) Claims by agents or representatives or
employees of DSI for commissions, service fees, expense
allowances or other compensation or remuneration of any
type.
DSI will reimburse First Golden and any director or officer or
controlling person for any legal or other expenses reasonably
incurred by First Golden, such director or controlling person in
connection with investigating or defending any such loss, claim,
damage, liability or action. This indemnity agreement will be in
addition to any liability which DSI may otherwise have.
(c) Promptly after receipt by a party entitled to indemnification
("indemnified party") under this paragraph 12 of notice of the
commencement of any action, if a claim in respect thereof is to be
made against any person obligated to provide indemnification under
this paragraph 12 ("indemnifying party"), such indemnified party
will notify the indemnifying party in writing of the commencement
thereof, but the omission so to notify the indemnifying party will
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not relieve it from any liability under this paragraph 12, except to
the extent that the omission results in a failure of actual notice
to the indemnifying party and such indemnifying party is damaged
solely as a result of the failure to give such notice. In case any
such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to
the extent that it may wish, to assume the defense thereof, with
separate counsel satisfactory to the indemnified party. Such
participation shall not relieve such indemnifying party of the
obligation to reimburse the indemnified party for reasonable legal
and other expenses incurred by such indemnified party in defending
himself, except for such expenses incurred after the indemnifying
party has deposited funds sufficient to effect the settlement, with
prejudice, of the claim in respect of which indemnity is sought.
Any such indemnifying party shall not be liable to any such
indemnified party on account of any settlement of any claim or
action effected without the consent of such indemnifying party.
The indemnity agreements contained in this paragraph 12 shall
remain operative and in full force and effect, regardless of:
(i) any investigation made by or on behalf of DSI or any
officer or director thereof or by or on behalf of First
Golden;
(ii) delivery of any contracts and payments therefore;
and
(iii) any termination of this Agreement.
A successor by law of DSI or of any of the parties to this
Agreement, as the case may be, shall be entitled to the benefits of
the indemnity agreements contained in this paragraph 12.
13. TERMINATION
a. This Agreement may be terminated at any time by mutual consent
of the parties.
b. Either party may terminate if the other materially breaches any
of the terms of this Agreement and fails to cure the breach within
sixty days of notification by the other party of such breach.
c. Upon termination of this Agreement all authorizations, rights
and obligations shall cease except;
(i) the obligation to settle accounts hereunder,
including commissions for contracts in effect at the time of
termination;
(ii) the agreements contained in paragraph 11 hereof; and
(iii) the indemnity set forth in paragraph 12 hereof.
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14. REGULATION
This Agreement shall be subject to the provisions of the 1940 Act and the
1934 Act and the rules, regulations, and rulings thereunder and of the
NASD, from time to time in effect, including such exemptions from the
1940 Act as the SEC may grant, and the terms hereof shall be interpreted
and construed in accordance therewith.
DSI shall submit to all regulatory and administrative bodies having
jurisdiction over the operations of First Golden or the Accounts, present
or future, any information, reports or other material which any such body
by reason of this Agreement may request or require pursuant to applicable
laws or regulations.
15. SEVERABILITY
If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
16. GENERAL
This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of New York.
A. Force Majeure
Either party may be excused for delay or failure to perform
under this Agreement if such delay or failure is due to the direct
or indirect result of acts of God or government, war or national
emergency, or for any cause beyond the reasonable control of either
party.
B. Entire Agreement
This Agreement and any attachments hereto and the material
incorporated herein by reference set forth the entire Agreement
between the parties, and supersede all prior representations,
agreements and understandings, written or oral. Changes in the
Agreement may be made only in a writing signed by both the parties
hereto.
C. Notices
All notices or other communications under this Agreement shall
be in writing and, unless otherwise specifically provided for
herein, shall be deemed given when addressed,
(a) if to First Golden:
Mary Bea Wilkinson
First Golden American Life Insurance
Company of New York
1001 Jefferson Street, Suite 400
Wilmington, Delaware 19801
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(b) if to DSI:
Myles R. Tashman
Directed Services, Inc.
1001 Jefferson Street, Suite 400
Wilmington, Delaware 19801
D. Successors, Assigns
This Agreement shall be binding upon and shall inure to the
benefit of the parties and their respective successors and assigns.
Neither this Agreement nor any right hereunder may be assigned
without the written consent of the other parties.
E. Governing Law
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
F. Severability
If any term or provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the
remainder of terms and provisions of this Agreement shall remain in
full force and effect and shall not be affected or impaired thereby.
G. Counterparts
This Agreement may be executed in one or more counterparts,
each of which shall constitute an original and all of which together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
/s/ Terry L. Kendall
Terry L. Kendall
President
Attest: /s/ Myles R. Tashman
Myles R. Tashman
Secretary
DIRECTED SERVICES, INC.
/s/ Mary Bea Wilkinson
Mary Bea Wilkinson
President
Attest: /s/ Myles R. Tashman
Myles R. Tashman
Secretary
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FIRST GOLDEN AMERICAN LIFE
INSURANCE COMPANY OF NEW YORK
GENERAL AGENT
SALES AGREEMENT
Agreement dated as of _________________, ______ by and between
Directed Services, Inc. ("Directed Services"), a New York
corporation; _____________________, an ____________________________
corporation ("General Agent"), and _____________________________, a
___________________ corporation ("Broker-Dealer").
WITNESSETH
WHEREAS, Directed Services is a broker-dealer registered with
the Securities and Exchange Commission ("SEC") under the Securities
Exchange Act of 1934, as amended, and a member of the National
Association of Securities Dealers, Inc. ("NASD"), and Broker-Dealer
is also a broker-dealer registered with the SEC under the Exchange
Act and is a member of the NASD, and General Agent is an insurance
agency duly licensed to sell variable life and/or variable annuities
in any state or jurisdiction in which General Agent intends to
perform hereunder;
WHEREAS, First Golden American Life Insurance Company of New
York ("First Golden") has appointed Directed Services as principal
underwriter for sales of Policies and it is intended that General
Agent shall be authorized to offer and sell Policies to the general
public subject to the terms and conditions as set forth more fully
herein;
WHEREAS, First Golden has authorized Directed Services to enter
into separate written agreements with broker-dealers registered under
the Exchange Act or with broker-dealers' general agents which agree
to participate in the distribution of the Policies and the parties
desire that Broker-Dealer and/or General Agent be authorized to
solicit applications for the sale of the Policies.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and promises herein contained, the parties agree as
follows:
A. Definitions
(1) POLICIES - The variable life insurance Policies and
variable annuity contracts that First Golden will issue
through Directed Services and which will be funded through
the Variable Accounts.
(2) THE VARIABLE ACCOUNT - Segregated asset account identified
in Exhibit A, each of which has been established and
maintained by First Golden pursuant to the laws of the
State of New York and through which First Golden will issue
the Policies. The Variable Accounts will be divided into
divisions that invest in shares of The GCG Trust (the
"Trust").
(3) POLICY REGISTRATION STATEMENT - The most recent effective
registration statement or most recent effective post-
effective amendment thereto relating to the Policies and
the Variable Accounts as required by the Securities Act of
1933 and the Investment Company Act of 1940, including
financial statements included therein and all exhibits
thereto.
230 PARK AVENUE, SUITE 966 NEW YORK, NY 10805
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A.(cont.)
(4) TRUST REGISTRATION STATEMENT - The most recent effective
registration statement or most recent effective post-
effective amendment thereto relating to the Trust as
required by the Securities Act of 1933 and the Investment
Company Act of 1940, including financial statements
included therein and all exhibits thereto.
(5) POLICY PROSPECTUS - The prospectus for the Policies
included within the Policy Registration Statement referred
to herein and including any policy prospectus filed
pursuant to Rule 424 or 497 under the Securities Act of
1933.
(6) TRUST PROSPECTUS - The prospectus for the Trust included
within the Trust Registration Statement referred to herein
and including any Trust prospectus filed pursuant to Rule
424 or 497 under the Securities Act of 1933.
(7) ICA - Investment Company Act of 1940, as amended.
(8) SECURITIES ACT - The Securities Act of 1933, as amended.
(9) EXCHANGE ACT - The Securities Exchange Act of 1934, as
amended.
(10) SEC - The Securities and Exchange Commission.
(11) AFFILIATED PERSON OR AFFILIATE - Affiliated person as
defined in Section 2(a)(3) of the ICA.
(12) TRUST - The GCG Trust and any other entity directly holding
portfolio securities and available through the Policies.
B. Agreements of Directed Services, Inc.
(1) Pursuant to the authority delegated to it by First Golden,
Directed Services hereby appoints General Agent as an
independent agent of First Golden to solicit applications
for the sale of the Policies during the term of this
Agreement.
(2) During the term of this Agreement, General Agent is hereby
authorized to solicit applications for the sale of the
Policies, provided there is an effective Registration
Statement relating to such Policies and, with respect to
each state in which applications are to be solicited, it is
further provided that General Agent has been notified by
Directed Services that the Policies are qualified for sale
under all applicable federal securities laws and the
insurance laws of the states or jurisdictions in which the
applications will be solicited. Directed Services agrees
that it will use its best efforts to have First Golden
secure and maintain all necessary qualifications of the
Policies for sale under applicable insurance laws in all
states and in any other territories or jurisdictions in
which the parties agree to sell the Policies.
(3) All initial premium payments made by policy owners will be
sent to General Agent, who in turn will promptly transmit
the payment to First Golden at Customer Service Center,
1001 Jefferson Street, Suite 400, Wilmington, Delaware
19801 or at such other address as First Golden or Directed
Services may subsequently specify in writing. Additional
payments and loan repayments will be sent by policy owners
to the Service Center for First Golden. In the event such
additional payments and loan repayments are sent to Broker-
Dealer or General Agent rather than the Service Center,
such payments received by Broker-Dealer or General Agent
shall be remitted promptly in full together with any
applicable application form(s) and any other required
documentation to First Golden at said Service Center.
Checks or money orders drawn from payments by policy owner
shall be drawn to the order of First Golden. General
Agent acknowledges that Directed Services, on behalf of
First Golden, shall have the unconditional right to reject,
in whole or in part, any application for a Policy. In the
event that a Policy is returned to First Golden, Directed
Services, or General Agent within the applicable "free-
look" period of a particular state, General Agent will be
notified before the return of any funds. Any amount
required to be refunded pursuant to such requirements will
be returned to the purchaser, and General Agent will be
promptly notified of such action.
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B.(3)(cont.)
In the event that the Policy is returned to First
Golden within (a) the free-look period, (b) six months of
issuance or (c) one year of issuance, then, in the event
General Agent has received compensation based on any such
returned payment, General Agent agrees to repay the full
amount of such compensation to First Golden or Directed
Services, as may be appropriate; except in the event of (c)
above, General Agent shall repay only 50% of the
compensation received by it on account of such a policy or
contract. Directed Services reserves the right to offset
future payments due against any compensation to be returned
by General Agent on account of such policy or contract
returns. General Agent shall not be required to repay any
compensation based on amounts withdrawn by purchaser for
any Policy after one year from the date of issuance.
If and to the extent that any policy loans or partial
withdrawals are made with respect to any Policy during the
first year after issuance, the compensation due to General
Agent shall be recomputed as though the amount of the
original policy loans or partial withdrawal had never been
paid as premium, and Directed Services shall have the right
to collect from General Agent or to withhold from future
payments due General Agent under this Agreement an amount
equal to the reduction in compensation effected by this
provision.
If and to the extent that a Policy is exchanged for another
Policy during the first policy or contract year, the
compensation due to General Agent shall be recomputed as
though the policy or contract had never been issued, and
Directed Services shall have the right to collect from
General Agent or to withhold from future payments due
General Agent under the Agreement an amount equal to the
reduction in compensation, if any, effected by this
provision.
(4) Directed Services, during the term of the Agreement, will
promptly notify General Agent:
(a) When the Policy Registration Statement or the Trust
Registration Statement has become effective or when
any post-effective amendment with respect to the
Policy Registration Statement or Trust Registration
Statement thereafter becomes effective;
(b) Of any request by the SEC for any amendments or
supplements to the Registration Statement or of any
request for additional information that must be
provided by General Agent or any company affiliated
with General Agent;
(c) Of the issuance by the SEC of any stop order with
respect to the Policy Registration Statement or the
Trust Registration Statement or of any amendments
thereto or the initiation of any proceedings for that
purpose or for any other purpose relating to the
registration and/or offering of the Policies or Trust
shares.
(d) In which states or jurisdictions approval of the
Policy forms is required under the applicable
insurance laws and regulations, and when such
approvals have been obtained;
(e) In which state or jurisdictions Policies may not be
lawfully sold;
(f) If any event occurs as a result of which the
prospectus or Registration Statement or any sales
literature for the Policies would include any untrue
statement of a material fact or omit to state a
material fact necessary to make the statements therein
not misleading.
Directed Services will provide General Agent with notification
of these matters immediately by telephone, with notification in
writing promptly thereafter.
(5) During the term of this Agreement, Directed Services
will provide General Agent, without charge, with as many
copies of the Prospectus for the Policies and the Trust (and
any amendment or supplement thereto) and application kits as
may be reasonably requested by General Agent. Directed
Services will pay the cost of the application kits for the
Policies. Upon termination of this Agreement, any
prospectuses, applications, and other materials or supplies
furnished by Directed Services or First Golden to General
Agent or Broker-Dealer or duly appointed agents of General
Agent shall be promptly returned to First Golden at the
Service Center.
Directed Services will be responsible for
approving and filing all sales material and promotional
material respecting the Policies or the Trust to be used by
General Agent or Broker-Dealer, with the NASD and with the
appropriate state authorities. No sales material respecting
the Policies or the Trust will be used by General Agent or
Broker-Dealer, without the written approval of Directed
Services.
3
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<PAGE>
B.(cont.)
(7) Directed Services will compile periodic marketing
reporting summarizing sales results to the extent reasonably
requested by General Agent.
C. Agreements of General Agent and Broker-Dealer
(1) General Agent must at all times, when performing its
functions under this Agreement, be duly licensed under
applicable insurance and securities laws to sell variable
life insurance and/or variable annuities, as appropriate, in
any state or jurisdiction where required in which it intends
to perform its functions hereunder.
(2) General Agent is authorized to select and recommend
individuals who are registered representatives of Broker-
Dealer as agents of General Agent for appointment by First
Golden. On behalf of First Golden, Directed Services will
undertake to apply for life insurance agent licenses in the
appropriate states or jurisdictions for such recommended
agents, provided that Directed Services reserves the right
to recommend to First Golden that First Golden refuse to
appoint any proposed agent or, once appointed, to terminate
the same. General Agent or Broker-Dealer shall pay all
expenses incurred in obtaining life insurance agent
licenses.
(3) General Agent and Broker-Dealer shall be responsible
for carrying out sales and administrative obligations under
this Agreement in continued compliance with applicable
federal and state laws. General Agent and Broker-Dealer are
not authorized to give any information or make any
representations concerning First Golden, the Trust, the
Variable Accounts, and the Policies other than those
contained in the Policy Prospectus, Policy Registration
Statement, Trust Prospectus, Trust Registration Statement,
or in such sales literature, advertisements or reports that
are both approved and, if required, filed with the NASD by
First Golden or Directed Services.
(4) General Agent agrees that it shall be fully responsible
for ensuring that no person shall offer the Policies on its
behalf until such person is duly licensed and appointed by
First Golden.
(5) General Agent agrees to train, supervise and be solely
responsible for the conduct of its agents appointed by First
Golden in their solicitation of Applications for the
Policies and for the supervision as to their strict
compliance with applicable rules and regulations of any
governmental or other agencies that have jurisdiction over
variable life insurance activities. In addition, General
Agent agrees to train, supervise, and be solely responsible
for the conduct of its agents as to their strict compliance
with First Golden's rules and procedures.
(6) General Agent and Broker-Dealer agree to (a) maintain
appropriate books and records concerning the activities of
duly appointed agents as may be required by the appropriate
state agencies that have jurisdiction and (b) to maintain
books and records as may reasonably be required by Directed
Services to adequately reflect the solicitation and sale of
Policies processed through General Agent. Such books and
records respecting the Policies are to be made available to
Directed Services during business hours upon reasonable
written request by Directed Services or First Golden.
(7) General Agent understands that the public offering of
the Policies will commence as soon as practicable after the
effective date of the Policy Registration Statement and the
Trust Registration Statement. Beginning at the time and
during the term of this Agreement, General Agent agrees that
it will use its best efforts to solicit applications for the
Policies. General Agent is under no obligation to sell or
solicit any specified number of Policies.
(8) Any marketing program for the Policies and other
activities related to this marketing program by General
Agent, shall be undertaken only in accordance with
applicable laws and regulations. General Agent and Broker-
Dealer shall ensure that any agents, representatives or
other employees fulfill any training requirements necessary
under law to engage in any marketing program for the
Policies. It is understood that First Golden reserves the
right to refuse to appoint any proposed agent or, once
appointed, to thereafter terminate the same. General Agent
also understands that its agents or representatives who
engage in direct personal solicitation for the Policies must
have variable contract licenses where required and that
certain states require that a special variable life
insurance examination be passed by an agent before he or she
can solicit applications for the Policies.
4
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<PAGE>
C.(cont.)
(9) General Agent shall not directly or by means of
its employees offer, or attempt to offer, or solicit
applications for the Policies, or deliver Policies in any
state or jurisdiction in which the Policies may not legally
be sold or offered for sale. For purposes of determining
where the Policies may be offered and applications
solicited, General Agent may rely on the notification it
receives from Directed Services pursuant to paragraph B(4)
regarding jurisdictions in which the Policies may be sold or
applications solicited.
(10) General Agent and Broker-Dealer shall not have
authority on behalf of Directed Services or First Golden to:
(a) make, alter, or discharge any Policy or other contract;
and (b) receive any monies or payments, except as set forth
in Section B(3) of this Agreement. General Agent and Broker-
Dealer shall not expend or contract for the expenditure of
the funds of Directed Services or First Golden, nor shall
General Agent or Broker-Dealer possess or exercise any
authority on behalf of Directed Services or First Golden
other than that expressly conferred on General Agent and
Broker-Dealer by this Agreement. Nothing herein contained
shall constitute General Agent or Broker-Dealer, or any
employees thereof, as employees of Directed Services or
First Golden in connection with the marketing program for
the Policies.
(11) General Agent will be obligated to pay the following
expenses related to its distribution of the Policies: (a)
expenses associated with the training of its agents and
employees including any written training material, (b) the
cost of designing and printing of any advertisements and/or
marketing material which may be developed by General Agent
for use by General Agent in connection with the marketing of
the Policies, and (c) any other expense incurred by General
Agent or its employees for the purpose of carrying out the
obligations of General Agent hereunder, unless Directed
Services and General Agent shall have agreed in advance in
writing to share the cost of any expenses incurred by
General Agent. General Agent will also be supplied by
Directed Services, at Directed Services' cost with
prospectuses for the Policies and the Trust and application
kits for the Policies. General Agent will be responsible
for distributing marketing materials (if any), prospectus,
and applications to prospective policy owners and for using
same in any marketing plan.
For purposes of paragraphs B(6), C(11), C(14), C(15) and E,
the phrase "sales literature and promotional material"
includes, but is not limited to , advertisements (such as
material published, or designed for use in, a newspaper,
magazine or other periodical, radio, television, telephone
or tape recording, videotape display, signs or billboards,
motion pictures, or other public media), sales literature
(i.e., any written communication distributed or made
generally available to customers or the public, including
brochures, circulars, research reports, market letters, form
letters, seminars texts, reprints or excerpts or any other
advertisements, sales literature or published article), and
educational or training materials or other communications
distributed or made generally available to some or all
agents or employees.
(12) With respect to the enumerated activities outlined in
this Agreement, it is understood that Broker-Dealer is also
a registered broker-dealer under the Exchange Act and a
member of the NASD. Broker-Dealer agrees (1) to assume
responsibility for the securities training and supervision
of the agents and registered representatives involved in the
marketing program for the Policies; and (2) to otherwise
comply with applicable federal and state securities law
requirements in connection with the marketing program by its
personnel.
(13) Broker-Dealer will also be responsible for having all
personnel who must be licensed pursuant to federal or state
securities laws in order to sell the policies, be duly
licensed. Broker-Dealer agrees to maintain appropriate
books and records concerning the activities of duly
appointed registered representatives as are required by the
SEC, NASD, or any other governmental or regulatory agencies
that have jurisdiction. Such books and records are to be
made available to Directed Services and First Golden during
business hours upon reasonable written request by Directed
Services or First Golden.
General and Broker-Dealer shall establish and
implement reasonable written procedures acceptable to
Directed Services for periodic inspection and supervision by
Broker-Dealer of the sales practices of its agent and
registered representatives and shall make available to
Directed Services periodic reports on the results of such
inspections and compliance with such procedures.
(14) General Agent is authorized for the term of this
Agreement to distribute the Policy Prospectus and the Trust
Prospectus and, upon request for an investor, the statement
of additional information for the Policies, if any, or the
Trust in connection with the solicitation of application for
sales of the Policies.
5
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<PAGE>
C.(cont.)
(15) General Agent agrees that neither it nor any of
its directors, partners, officers, employees, registered
representatives, agents, or affiliated persons will give any
information or make any representations or statements,
whether written or oral, on behalf of the Variable Accounts
or the Trust or concerning the Policies, the Trust or Trust
shares in connection with the offer or sale of the Policies
other than information, or representations contained in the
prospectus, statement of additional information, or
registration statement for the Policies and/or the Trust, as
they may be supplemented or amended from time to time, or in
reports or proxy statements for the Variable Accounts or the
Trust, or in sales literature and promotional material or
information supplied or approved by Directed Services.
(16) General Agent agrees that neither it nor any of its
directors, partners, officers, employees, registered
representatives, agents, or affiliated persons shall use any
sales literature and promotional material respecting the
Policies or the Trust unless such material has been approved
in advanced by Directed Services.
(17) Directed Services represents at Section 7 of the
Organizational Agreement among First Golden, the Variable
Accounts, the Trust and the Trust's Manager, which concerns
the investment in the Trust by the Variable Accounts,
provides, in pertinent part, that in the event of a
shareholder meeting, First Golden agrees to provide the
Trust and/or the Trust's Manager with a list of the names
and addresses of owners of the Policies within five (5) days
of receipt of the written request for such list and that
under the Organizational Agreement such information may only
be used for purposes relating to meetings of shareholders of
the Trust (including sending to owners of the Policies
notices of shareholder meetings and soliciting proxies from
policy owners in connection with shareholders meetings).
General Agent and Broker-Dealer agree that Directed Services
or First Golden may release the names and addresses of
owners of the Policies under the terms of the Organizational
Agreement and Agrees that the Trust and its Manager may
receive such information. Notwithstanding any provision of
Section H of the Agreement respecting the confidentiality of
such information, General Agent and Broker-Dealer will hold
harmless First Golden, Directed Services, the Trust and its
Manager for the release by First Golden of such information
for such purposes.
(18) For each application for a Policy solicited by General
Agent, General Agent agrees to complete an agent's report
addressing the suitability of the Policy for the applicant.
General Agent shall retain a copy of each such report, and
shall provide Directed Services with a copy of any such
report upon reasonable request for Directed Services.
D. Compensation
Directed Services shall pay to General Agent for each Policy issued
through a Variable Account compensation based on the provision set
forth in Schedule A hereto, as such Schedule A may be amended or
modified from time to time. Duly appointed agents of General Agent
shall have no interest hereunder.
E. Indemnification
(1) Directed Services shall (i) indemnify and hold
harmless General Agent and Broker-Dealer and its directors,
officers, employees, agent or affiliated persons and each
person, if any who controls General Agent or Broker-Dealer
within the meaning of the Securities Act (collectively, the
"Indemnified Person") against any losses, claims, damages,
litigation expenses or liabilities, joint or several, to
which the Indemnified Persons may become subject, under the
Securities Act or otherwise, insofar as such losses, claims,
damages, litigation expenses or liabilities (or actions,
proceedings, or investigations in respect thereto) are
related to the sale of the Policies and arise directly out
of or are based directly upon any untrue statement or
alleged untrue statement of any material fact contained in
any Policy Prospectus, Trust Prospectus, Registration
Statement for the Policies or the Trust, or sales literature
approved by Directed Services (collectively the "Offering
Materials") or any amendment or supplement thereto, or arise
out of or are based upon any statements, actions or
omissions by Directed Services or its officers, directors,
employees, agents or affiliated persons, or any person
controlling within the meaning of the Securities Act, in
connection with the offer and persons controlling within the
meaning of the Securities Act, in connection with the offer
and sale of any Policies and (ii) reimburse General Agent,
Broker-Dealer, and any director, officer, employee, agent or
affiliated person of General Agent or Broker-Dealer and such
controlling persons for any legal or other expenses
reasonably incurred by them in connection with investigating
of defending against any such loss, claims, action,
proceeding or investigation; provided, however, that
Directed Services shall not be liable in any such case to
the extent that any such claim,
6
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<PAGE>
E.(cont.)
damage or liability arises
out of or is based upon (i) an untrue statement or alleged
untrue statement or an omission or alleged omission made by
Offering Materials, or any amendment or supplement thereto,
in reliance upon and in conformity with information (including,
without limitation, negative responses to inquiries) furnished
to Directed Services by or on behalf of any Indemnified Person
specifically for use in the preparation thereof, or (ii)
willful misfeasance, bad faith or gross negligence of any
Indemnified Person in the performance of such Indemnified
Person of its obligation and duties under this Agreement.
This indemnity agreement will be in addition to any
liability which Directed Services may otherwise have.
(2) General Agent and Broker-Dealer shall indemnify and
hold harmless Directed Services, First Golden, the Trust,
the Trust's Manager, and each of their directors, trustees,
officers, employees, affiliated persons or agents, and each
person, if any, who controls Directed Services, the Trust,
or the Trust's Manager, within the meaning of Section 15 of
the Securities Act (collectively, the "Indemnified Persons")
against any losses, claims, damages, litigation expenses or
liabilities, including legal and other expenses, and amounts
paid in settlement, to which any Indemnified Person may
become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages, litigation
expenses, liabilities, or actions, proceedings, or
investigations in respect thereof are related to the offer
and/or sale of the Policies, which shall include the Trust
shares, arising out of or based upon any unauthorized use of
Offering Materials or any verbal or written
misrepresentations or any unlawful sales practices
concerning the Policies, including but not limited to,
failure to deliver the Policy Prospectus or the Trust
Prospectus by General Agent, and reimburse the Indemnified
Persons for any legal and other expenses reasonably incurred
by them in connection with investigating or defending
against such loss, claim, action, proceeding or
investigation; provided, however, that General Agent and
Broker-Dealer shall not be liable in any such case to the
extent that such claim, damage or liability arises out of or
is based upon an untrue statement or alleged untrue
statement or omission or alleged omission was made in
Offering Materials, or any amendment or supplement thereto,
in reliance upon and in conformity with information
(including, without limitation, negative responses upon and
in inquiries) furnished by or on behalf of Directed Services
or any affiliate thereof to General Agent, Broker-Dealer, or
its affiliates, specifically for use in the preparation
thereof, or willful misfeasance, bad faith or gross
negligence of Directed Services in the performance of its
obligations and duties under this Agreement. This indemnity
agreement will be in addition to any liability which General
Agent and Broker-Dealer may otherwise have.
In no case will an indemnifying party be liable
under the provision of this Section E with respect to any
claims made against an indemnified party unless the
indemnified party shall have notified the indemnifying party
in writing pursuant to Section O within a reasonable time
after the summons or other first legal process giving
information of the nature of the claim shall have served
upon the indemnifying party (or after such indemnified party
shall have received notice of such service on any designated
agent), but failure to notify the indemnifying party of any
claim shall not relieve it from any liability which it may
have to the person against whom such action is brought
otherwise than on account of this Agreement contained in
this Section E.
The indemnifying party will be entitled to
participate at its own expense in the defense or, if it so
elects, to assume the defense of any suit brought to enforce
any such liability, but if the indemnifying party elects to
assume the defense, such defense shall be conducted by
counsel chosen by it and satisfactory to each indemnified
party who is a defendant in the suit. In the event the
indemnifying party elects to assume the defense of any such
suit and retain such counsel, the indemnified parties who
are defendants in the suit shall bear the fees and expense
of any additional counsel retained by them, but, in case the
indemnifying party does not elect to assume the defense of
any such suit, it will reimburse such indemnified parties
who are defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. In any event,
General Agent, Broker-Dealer and Directed Services each
agree to promptly notify the other party in accordance with
Section O of this Agreement of the commencement of any
litigation proceedings against it or any Affiliated Person
thereof in connection with the issuance or sale of the
Policies.
F. Term and Exclusivity of Agreement
(1) This Agreement shall be effective as of the date
first written above. This Agreement relates solely to the
Policies identified in Schedule A hereto and will remain in
effect for the period commencing on the effective date of
this Agreement and ending one year from that date and unless
sooner terminated as provided below, shall automatically
continue for one-year periods thereafter. This Agreement
may be terminated by either party by giving sixty (60) days'
written notice to the other party.
7
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<PAGE>
F.(cont.)
(2) If any party shall default in any material respect
in the performance of its respective obligations under this
Agreement, the non-defaulting party may, at its option,
cancel and terminate this Agreement immediately without
notice.
(3) Upon termination of this Agreement, all
authorizations, rights and obligations hereunder shall cease
except (1) the commission recapture provisions of Section B;
(2) the indemnification provisions set forth in Section E;
(3) the record-keeping provisions set forth in Section C(6);
(4) the confidentiality provisions set forth in Section H;
(5) the complaints and investigations provisions set forth
in Section G; (6) the product name provision set forth in
Section I.
G. Complaints and Investigations
(1) General Agent, Broker-Dealer and Directed Services
jointly agree to cooperate fully in any insurance regulatory
investigation or proceeding or judicial proceeding arising
in connection with the Policies marketed under this
Agreement. General Agent, Broker-Dealer and Directed
Services further agree to cooperate fully in any securities
regulatory investigation or proceeding or judicial
proceeding arising in connection with the Policies marketed
under this Agreement. Without limiting the foregoing:
(a) Directed Services will promptly notify
General Agent of any customer complaint or notice of any
regulatory investigation or proceeding or judicial
proceeding received by Directed Services or First Golden
with respect to General Agent or any employee of General
Agent or which may affect First Golden's issuance of any
Policy marketed under this Agreement.
(b) General Agent or Broker-Dealer will
promptly notify Directed Services and/or First Golden, as
appropriate, of any written customer complaint or notice
of any regulatory investigation or proceeding received by
General Agent or Broker-Dealer with respect to General
Agent, Broker-Dealer or any of its employees in
connection with any Policy marketed under this Agreement
or any activity in connection with any such Policy.
(2) In the event of a customer complaint, Directed
Services, General Agent and Broker-Dealer will cooperate in
investigating such complaint and any response to such will
be agreed to among Directed Services, General Agent and
Broker-Dealer prior to its being sent to the customer or
interested regulatory authority by Directed Services,
General Agent or Broker-Dealer.
H. Confidentiality
General Agent and Broker-Dealer agree that Directed Services or
any company affiliated therewith shall have the right to contact any
client of General Agent or Broker-Dealer, for any reason, if such
client is or was a policyowner or contract owner, insured, annuitant,
or beneficiary of a First Golden policy or contract.
I. Product Name
General Agent and Broker-Dealer agree that Directed Services
and First Golden and their affiliates have the exclusive right to use
the names "Directed Services," "Golden American, and "First Golden"
and any names including the phrase "Directed Services," "Golden
American," and/or "First Golden." Directed Services, General Agent,
and Broker-Dealer acknowledge that all rights in the name
"GOLDENSELECT" are owned by an affiliate to the Manager of the Trust,
and General Agent and Broker-Dealer agree that under this Agreement,
General Agent and Broker-Dealer are not granted any right in or
license to the name "GOLDENSELECT."
J. Modification of Agreement
This Agreement supersedes all prior agreements, either oral or
written between the parties relating to the Policies, and except for
the amendment of Schedule A pursuant to the terms of paragraph D
hereof, may not be modified in any way unless by written agreement
signed by all of the parties.
K. Assignability
The Agreement shall be nonassignable by the parties hereto,
except that the parties may assign their rights to any subsidiary of
or any company under common control with the party, provided that the
assignee is duly licensed and otherwise competent to perform all
functions required of the party under this Agreement.
8
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<PAGE>
L. Governing Law
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
M. Headings
The headings in this Agreement are included for convenience of
reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
N. Severability
In any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
O. Miscellaneous
The Trust, the Trust's Manager, and affiliated persons thereof
shall be third party beneficiaries under this
Agreement.
Notice given pursuant to any of the provisions of this
Agreement, unless otherwise specified, shall be sufficiently given
when sent by Registered or Certified Mail to the parties at the
addresses of such parties as set forth below (or to such other
addresses as such parties may from time to time specify in writing or
the other parties):
To: To:
Directed Services, Inc. ______________________________
1001 Jefferson Street. ______________________________
Suite 400 ______________________________
Wilmington, Delaware 19801 ______________________________
Attn.: ________________________
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
DIRECTED SERVICES, INC. _________________________________
General Agent
By: __________________________ By: _____________________________
Name: Name:
Title: Title:
_________________________________
Broker-Dealer
By: ______________________________
Name:
Title:
9
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<PAGE>
SCHEDULE A
Schedule of gross compensation on GOLDENSELECT products issued
through First Golden American Life Insurance Company of New York.
I. Flexible Premium Deferred Combination Variable and Fixed Annuity
Form FG-IA-1000-12/95
A Alternative 1 - front end
compensation
Commission Expense
Allowance
Percentage of Initial and
Additional Premium
Owner Issue Ages 0 - 80 3.50% 2.50%
Owner Issue Ages 81 - 85 1.00% 2.50%
- ---------------------------------
* For sales of DVA PLUS, NY contracts to any of the following
described persons, no compensation shall be paid: (i) employees of
any company affiliated with Directed Services, Inc.; (ii) any
persons performing wholesaling functions on behalf of Directed
Services, Inc. regardless of whether such persons are employees
of some other entity, or are independent contractors engaged by
Directed Services, Inc.; and (iii) registered representatives and
employees (and members of their immediate families) of any
general agent and broker-dealer offering such Contracts pursuant
to a Sales Agreement with Directed Services, Inc.
- ---------------------------------
IN WITNESS HEREOF, I have executed this revision to Schedule A
effective the dates stated above.
DIRECTED SERVICES, INC.
____________________________
Name:
Title:
A-1
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN DEFERRED COMBINATION
LIFE INSURANCE COMPANY VARIABLE AND FIXED
OF NEW YORK ANNUITY CONTRACT
A stock company.
- ------------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Annuitant Owner
[THOMAS J. DOE] [JOHN Q. PUBLIC]
- ---------------------------------------------------------------------------
Initial Premium Annuity Option Annuity Commencement Date
[$10,000] [LIFE 10-YEAR CERTAIN] [JANUARY 1, 2030]
- ---------------------------------------------------------------------------
Separate Account(s) Contract Number
SEPARATE ACCOUNT NY-B AND THE FIXED ACCOUNT [123456]
- ---------------------------------------------------------------------------
This is a legal Contract between its Owner and us. Please read it
carefully. In this Contract you or your refers to the Owner shown above.
We, our or us refers to First Golden American Life Insurance Company of New
York. Our home office is in New York, New York. You may allocate this
Contract's Accumulation Value among the Separate Account Divisions and the
Fixed Account as shown in the Schedule.
If this Contract is in force, we will make income payments to you starting
on the Annuity Commencement Date. If the Owner dies prior to the Annuity
Commencement Date, we will pay a death benefit to the Beneficiary. The
amount of such benefits are subject to the terms of this Contract.
RIGHT TO EXAMINE THIS CONTRACT: You may return this Contract to us or the
agent through whom you purchased it within 10 days after you receive it.
Upon receipt we will promptly refund the greater of: 1) the premium paid,
or 2) the Accumulation Value plus any charges we have deducted as of the
effective date of cancellation.
ALL PAYMENTS AND VALUES, WHEN BASED ON THE INVESTMENT EXPERIENCE OF A
SEPARATE ACCOUNT DIVISION, MAY INCREASE OR DECREASE, DEPENDING ON THE
CONTRACT'S INVESTMENT RESULTS. ALL PAYMENTS AND VALUES BASED ON THE FIXED
ACCOUNT MAY BE SUBJECT TO A MARKET VALUE ADJUSTMENT, THE OPERATION OF WHICH
MAY CAUSE SUCH PAYMENTS AND VALUES TO INCREASE OR DECREASE.
Signed for First Golden American Life Insurance Company of New York on the
Contract Issue Date.
Variable Products Customer
Service Center Secretary:
1001 Jefferson Street, Suite 400
Wilmington, Delaware 19801 President: /s/ Terry L. Kendall
- -----------------------------------------------------------------------------
DEFERRED COMBINATION VARIABLE AND FIXED ANNUITY CONTRACT - NO DIVIDENDS
Variable Cash Surrender Values while the Owner is living and prior to the
Annuity Commencement Date. Death benefit subject to guaranteed minimum.
Additional Premium Payment Option. Partial Withdrawal Option. Non-
participating. Investment results reflected in values.
FG-IA-1000-12/95
<PAGE>
<PAGE>
TABLE OF CONTENTS
- ------------------------------------------------------------------------------
THE SCHEDULE ................................. 3
Premium Payment and Investment Information
The Variable Separate Accounts
Contract Facts
Charges
Income Plan Factors
INTRODUCTION TO THIS CONTRACT ................ 4
The Contract
The Owner
The Annuitant
The Beneficiary
Change of Owner or Beneficiary
PREMIUM PAYMENTS AND ALLOCATION CHANGES ...... 6
Initial Premium Payment
Additional Premium Payment Option
Your Right to Change Allocation of
Accumulation Value
What Happens if a Division is Not Available
HOW WE MEASURE THE CONTRACT'S
ACCUMULATION VALUE ....................... 7
The Variable Separate Accounts
Valuation Period
Accumulation Value
Accumulation Value in each Division and Fixed
Allocation
Fixed Account
Measurement of Investment Experience
Charges Deducted from Accumulation Value on
each Contract Processing Date
YOUR CONTRACT BENEFITS ....................... 12
Cash Value Benefit
Partial Withdrawal Option
Proceeds Payable to the Beneficiary
DEATH BENEFIT PROCEEDS ....................... 13
Proceeds Payable to the Beneficiary
CHOOSING AN INCOME PLAN ...................... 14
Annuity Benefits
Annuity Commencement Date Selection
Frequency Selection
The Income Plan
The Annuity Options
Payments When Named Person Dies
OTHER IMPORTANT INFORMATION .................. 16
Sending Notice to Us
Reports to Owner
Assignment - Using this Contract as
Collateral Security
Changing this Contract
Contract Changes - Applicable Tax Law
Misstatement of Age or Sex
Non-Participating
Payments We May Defer
Authority to Make Agreements
Required Note on Our Computations
Copies of any Riders and Endorsements are at the back of this Contract.
THS SCHEDULE
The Schedule gives specific facts about this contract and its coverage.
Please refer to the Schedule while reading this contract.
FG-IA-1000-12/95
2
<PAGE>
<PAGE>
The Schedule
Payment And Investment Information
- ------------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Annuitant Owner
[JOHN J. DOE] [JOHN Q. PUBLIC]
- ---------------------------------------------------------------------------
Annuitant's Issue Age Annuitant's Sex Owner's Issue Age
[35] [MALE] [55]
- ---------------------------------------------------------------------------
Initial Premium Annuity Option Annuity Commencement Date
[$10,000] [LIFE 10-YEAR CERTAIN] [JANUARY 1, 2030]
- ---------------------------------------------------------------------------
Contract Date Issue Date Residence State
[JANUARY 1, 1995] [JANUARY 1, 1995] [NEW YORK]
- ---------------------------------------------------------------------------
Separate Account(s) Contract Number
SEPARATE ACCOUNT NY-B AND THE FIXED ACCOUNT [123456]
- ---------------------------------------------------------------------------
PREMIUM PAYMENT AND INVESTMENT INFORMATION
Initial Premium Payment received: [$10,000]
Your initial Accumulation Value has been invested as follows:
Percentage of
Divisions Accumulation Value
[OTC 10%
Research 10%
Total Return 10%
Income and Growth 10%
International Equity 10%
High Income 10%
Money Market 10%
Appreciation 5%
High Growth 5%
Balanced 5%
Conservative 5%
1-Year Fixed Allocation at 4.5% 5%
Guaranteed Interest
10-Year Fixed Allocation at 5.2% 5%]
Guaranteed Interest
______________
Total 100%
Additional Premium Payment Information
We will accept additional premium payments until either the
Annuitant or the Owner reaches the Attained Age of 85. The
minimum additional payment which may be made is $500.00.
Accumulation Value Allocation Rules
The maximum number of Divisions in which you may be invested at
any one time is sixteen. You are currently allowed unlimited
allocation changes per Contract Year without charge. We reserve
the right to impose a charge as shown in the Charges section of
the Schedule for any allocation change in excess of twelve per
Contract Year. We also reserve the right to limit, upon notice,
the maximum number of allocation changes you may make within a
Contract Year.
FG-IA-1000-12/95 NQ DB
3A1
<PAGE>
<PAGE>
The Schedule
The Variable Separate Accounts
- ------------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Annuitant Owner
[THOMAS J. DOE] [JOHN Q. PUBLIC]
- ---------------------------------------------------------------------------
Initial Premium Annuity Option Annuity Commencement Date
[$10,000] [LIFE 10-YEAR CERTAIN] [JANUARY 1, 2030]
- ---------------------------------------------------------------------------
Separate Account(s) Contract Number
SEPARATE ACCOUNT NY-B AND THE FIXED ACCOUNT [123456]
- ---------------------------------------------------------------------------
DIVISIONS INVESTING IN SHARES OF A MUTUAL FUND
Separate Account NY-B (the "Account") is a unit investment trust
Separate Account, organized in and governed by the laws of the
State of New York, our state of domicile. The Account is divided
into Divisions.
Each Division listed below invests in shares of the mutual fund
portfolio (the "Series") designated. Each portfolio is a part of
The GCG Trust.
SERIES
MULTIPLE ALLOCATION EMERGING MARKETS
FULLY MANAGED LIMITED MATURITY BOND
CAPITAL APPRECIATION LIQUID ASSETS
RISING DIVIDENDS VALUE EQUITY
ALL-GROWTH STRATEGIC EQUITY
REAL ESTATE SMALL CAP
HARD ASSETS
Each Division listed below invests in shares of the mutual fund
portfolio (the "Portfolio") designated. Each portfolio is a part
of the Equip-Select Series Trust.
PORTFOLIO
OTC GROWTH & INCOME
RESEARCH VALUE + GROWTH
TOTAL RETURN
NOTE: PLEASE REFER TO THE PROSPECTUSES FOR THE CONTRACT ANDTHE
TRUSTS FOR MORE DETAILS.
FG-IA-1000-12/95 NQ DB
3B
<PAGE>
<PAGE>
The Schedule
Contract Facts
- ------------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Annuitant Owner
[THOMAS J. DOE] [JOHN Q. PUBLIC]
- ---------------------------------------------------------------------------
Initial Premium Annuity Option Annuity Commencement Date
[$10,000] [LIFE 10-YEAR CERTAIN] [JANUARY 1, 2030]
- ---------------------------------------------------------------------------
Separate Account(s) Contract Number
SEPARATE ACCOUNT NY-B AND THE FIXED ACCOUNT [123456]
- ---------------------------------------------------------------------------
CONTRACT FACTS
Contract Processing Date
The Contract Processing Date for your Contract is [January 1] of
each year.
Specially Designated Division
When a distribution is made from an investment portfolio
underlying a Separate Account Division in which reinvestment is
not available, we will allocate the amount of the distribution to
the Liquid Asset Division unless you specify otherwise.
PARTIAL WITHDRAWALS
The maximum amount that can be withdrawn in a Contract Year
without being considered an Excess Partial Withdrawal is 15% of
the Accumulation Value as of the date of the withdrawal. We will
collect a Surrender Charge for Excess Partial Withdrawals and a
charge for any unrecovered premium. In no event may a Partial
Withdrawal be greater than 90% of the Cash Surrender Value.
Conventional Partial Withdrawals
Minimum Withdrawal Amount: $1,000
Any Conventional Partial Withdrawal from a Fixed Allocation is
subject to a Market Value Adjustment unless taken from a Fixed
Allocation within the thirty days on or prior to the Maturity
Date of such Fixed Allocation.
Systematic Partial Withdrawals
Systematic Partial Withdrawals may be elected to commence after
28 days from the Contract Issue Date and may be taken on a
monthly or quarterly basis. You select the day withdrawals will
be made, but no later than the 28th day of the month. If you do
not elect a day, the Contract Date will be used.
Minimum Withdrawal Amount: $100.00
Maximum Withdrawal Amounts:
Separate Account
Divisions: 1.25% monthly or 3.75% quarterly of
Accumulation Value.
Fixed Allocations: Interest earned on Fixed Allocation in
prior month (for monthly withdrawals) or
prior quarter (for quarterly withdrawals).
A Systematic Partial Withdrawal from a Fixed Allocation is not subject to
Market Value Adjustment.
FG-IA-1000-12/95 NQ DB
3C1
<PAGE>
<PAGE>
The Schedule
Contract Facts (continued)
- ------------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Annuitant Owner
[THOMAS J. DOE] [JOHN Q. PUBLIC]
- ---------------------------------------------------------------------------
Initial Premium Annuity Option Annuity Commencement Date
[$10,000] [LIFE 10-YEAR CERTAIN] [JANUARY 1, 2030]
- ---------------------------------------------------------------------------
Separate Account(s) Contract Number
SEPARATE ACCOUNT NY-B AND THE FIXED ACCOUNT [123456]
- ---------------------------------------------------------------------------
Death Benefit
The Death Benefit is the greatest of (i) the Accumulation Value,
(ii) the Guaranteed Death Benefit, (iii) the Cash Surrender
Value, and (iv) the sum of premiums paid, less any partial
withdrawals.
Guaranteed Death Benefit
On the Contract Date, the Guaranteed Death Benefit is the Initial
Premium. On subsequent Valuation Dates, the Guaranteed Death
Benefit is calculated as follows:
Annual Ratchet:
(1) Start with the Guaranteed Death Benefit from the
prior Valuation Date;
(2) Add to (1) any additional premium paid since the
prior Valuation Date and subtract from (1) any
Partial Withdrawals taken since the prior Valuation
Date;
(3) On a Valuation Date which occurs through the
Contract Year in which the Owner's Attained Age is
80 and which is also a Contract Anniversary, if the
Owner is alive (the Annuitant if the Owner is not an
individual), we set the Guaranteed Death Benefit
equal to the greater of (2) or the Accumulation
Value as of such date. On all other Valuation
Dates, the Guaranteed Death Benefit is equal to (2).
Change of Owner
When the ownership changes, the new Owner's age at the time of
the change will be used as the basis for the death benefit. The
new Owner's death will determine when a death benefit is payable.
If the new Contractowner's age is less than or equal to 79, the
Guaranteed Death Benefit Option in effect prior to the change of
Contractowner will remain in effect. If the new Contractowner's
age is greater than 79, the Guaranteed Death Benefit will be zero
and the Death Benefit shall be the greatest of Cash Surrender
Value, the Accumulation Value, and the sum of premiums paid, less
any Partial Withdrawals.
FG-IA-1000-12/95 NQ DB
3C2
<PAGE>
<PAGE>
The Schedule
Contract Facts (continued)
- ------------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Annuitant Owner
[THOMAS J. DOE] [JOHN Q. PUBLIC]
- ---------------------------------------------------------------------------
Initial Premium Annuity Option Annuity Commencement Date
[$10,000] [LIFE 10-YEAR CERTAIN] [JANUARY 1, 2030]
- ---------------------------------------------------------------------------
Separate Account(s) Contract Number
SEPARATE ACCOUNT NY-B AND THE FIXED ACCOUNT [123456]
- ---------------------------------------------------------------------------
CHOOSING AN INCOME PLAN
Required Date of Annuity Commencement
Distributions from a Contract funding a qualified plan must
commence no later than April 1st of the calendar year following
the calendar year in which the Owner attains age 70 1/2.
The Annuity Commencement Date is required to be the same date as
the Contract Processing Date in the month following the
Annuitant's 90th birthday. If, on the Annuity Commencement Date,
a Surrender Charge remains, your elected Annuity Option must
include a period certain of at least five years duration. In
applying the Accumulation Value, we may first collect any Premium
Taxes due us.
Minimum Annuity Income Payment
The minimum monthly annuity income payment that we will make is
$20.
FIXED ACCOUNT
Minimum Fixed Allocation
The minimum allocation to the Fixed Account in any one Fixed
Allocation is $250.00.
Guaranteed Minimum Interest Rate - 3%
Guarantee Periods
We currently offer Guarantee Periods of 1, 3, 5, 7 and 10 years.
We reserve the right to offer Guarantee Periods of durations
other than those available on the Contract Date.
We also reserve the right to cease offering particular Guarantee
Periods.
Index Rate
The Index Rate is the average of the Ask Yields for the U.S.
Treasury Strips as reported by a national quoting service for the
applicable maturity. The average is based on the period from the
22nd day of the calendar month two months prior to the calendar
month of Index Rate determination to the 21st day of the calendar
month immediately prior to the month of determination. The
applicable maturity date for these U.S. Treasury Strips is on or
next following the last day of the Guarantee Period. If these
Ask Yields are no longer available, the Index Rate will be
determined using a suitable replacement method. Such substitute
Index Rate will have the prior approval of the New York Insurance
Department Superintendent.
We currently set the Index Rate once each calendar month.
However, we reserve the right to set the Index Rate more
frequently than monthly, but in no event will such Index Rate be
based on a period less than 28 days.
FG-IA-1000-12/95 NQ DB
3C3
<PAGE>
<PAGE>
The Schedule
Charges
- ------------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Annuitant Owner
[THOMAS J. DOE] [JOHN Q. PUBLIC]
- ---------------------------------------------------------------------------
Initial Premium Annuity Option Annuity Commencement Date
[$10,000] [LIFE 10-YEAR CERTAIN] [JANUARY 1, 2030]
- ---------------------------------------------------------------------------
Separate Account(s) Contract Number
SEPARATE ACCOUNT NY-B AND THE FIXED ACCOUNT [123456]
- ---------------------------------------------------------------------------
Charge Deduction Division
All charges against the Accumulation Value in this Contract will
be deducted from the Liquid Asset Division.
Deductions from Premiums - None.
Deductions from Accumulation Value
Administrative Charge - We charge to cover a portion of our
ongoing administrative expenses for each Contract Processing
Period. The charge is incurred at the beginning of the Contract
Processing Period and deducted on the Contract Processing Date at
the end of the period. At the time of deduction, this charge
will be waived if:
(1) The Accumulation Value is at least $100,000; or
(2) The sum of premiums paid to date is at least $100,000.
Excess Allocation Charge - Currently none, however, we reserve
the right to charge $25 for each allocation in excess of twelve
per Contract Year. Any charge will be deducted from the
Divisions and Fixed Allocations from which each such allocation
is made in proportion to the amount being transferred from each
such Division and Fixed Allocation.
Surrender Charge - A Surrender Charge is imposed as a percentage
of premium if the Contract is surrendered or an Excess Partial
Withdrawal is taken. The percentage imposed at time of surrender
or Excess Partial Withdrawal depends on the number of complete
years that have elapsed since a premium payment was made. The
Surrender Charge expressed as a percentage of each premium
payment is as follows:
Complete Years Elapsed Surrender
Since Premium Payment Charges
0 7%
1 6%
2 5%
3 4%
4 3%
5 2%
6 1%
7+ 0%
For the purpose of calculating the Surrender Charge for an Excess
Partial Withdrawal; a) we treat premiums as being withdrawn on a
first-in, first-out basis, and b) amounts withdrawn which are
not considered an Excess Partial Withdrawal are not considered a
withdrawal of any premium payments.
FG-IA-1000-12/95 NQ DB
3D1
<PAGE>
<PAGE>
The Schedule
Charges (continued)
- ------------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Annuitant Owner
[THOMAS J. DOE] [JOHN Q. PUBLIC]
- ---------------------------------------------------------------------------
Initial Premium Annuity Option Annuity Commencement Date
[$10,000] [LIFE 10-YEAR CERTAIN] [JANUARY 1, 2030]
- ---------------------------------------------------------------------------
Separate Account(s) Contract Number
SEPARATE ACCOUNT NY-B AND THE FIXED ACCOUNT [123456]
- ---------------------------------------------------------------------------
Premium Taxes - We deduct from the Accumulation Value the amount
of any premium or other state and local taxes levied by any state
or governmental entity when such taxes are incurred.
We reserve the right to defer collection of Premium Taxes until
surrender or until application of Accumulation Value to an
Annuity Option. An Excess Partial Withdrawal will result in the
deduction of any Premium Tax then due us on such amount. We
reserve the right to change the amount we charge for Premium Tax
charges on future premium payments to conform with changes in the
law or if the Owner changes state of residence.
Deductions from the Divisions
Mortality and Expense Risk Charge - We deduct 0.003446% of the
assets in the Separate Account Division on a daily basis
(equivalent to an annual rate of 1.25%) for mortality and expense
risks. This charge is not deducted from the Fixed Account.
Asset-Based Administrative Charge - We deduct 0.000411% of the
assets in each Separate Account Division on a daily basis
(equivalent to an annual rate of 0.15%) to compensate us for a
portion of our ongoing administrative expenses. This charge is
not deducted from the Fixed Account.
FG-IA-1000-12/95 NQ DB
3D2
<PAGE>
<PAGE>
The Schedule
Income Plan Factors
- ------------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Annuitant Owner
[THOMAS J. DOE] [JOHN Q. PUBLIC]
- ---------------------------------------------------------------------------
Initial Premium Annuity Option Annuity Commencement Date
[$10,000] [LIFE 10-YEAR CERTAIN] [JANUARY 1, 2030]
- ---------------------------------------------------------------------------
Separate Account(s) Contract Number
SEPARATE ACCOUNT NY-B AND THE FIXED ACCOUNT [123456]
- ---------------------------------------------------------------------------
Values for other payment periods, ages, or joint life
combinations are available on request. Monthly payments are
shown for each $1,000 applied.
TABLE FOR INCOME FOR A FIXED PERIOD
Fixed Fixed
Period Monthly Period Monthly Fixed Period Monthly
of Years Income of Years Income of Years Income
-------- ------ -------- ------ -------- ------
11 $8.88 21 $5.33
2 42.96 12 8.26 22 5.16
3 29.06 13 7.73 23 5.00
4 22.12 14 7.28 24 4.85
5 17.95 15 6.89 25 4.72
6 15.18 16 6.54 26 4.60
7 13.20 17 6.24 27 4.49
8 11.71 18 5.98 28 4.38
9 10.56 19 5.74 29 4.28
10 9.64 20 5.53 30 4.19
TABLE FOR INCOME FOR LIFE
Male/Female Male/Female Male/Female
Age 10 Years Certain 20 Years Certain Refund Certain
--- ---------------- ---------------- --------------
50 $4.53/4.19 $4.38/4.13 $4.40/4.12
55 4.93/4.52 4.68/4.40 4.74/4.42
60 5.45/4.96 4.99/4.72 5.16/4.79
65 6.11/5.52 5.30/5.07 4.75/5.29
70 6.91/6.26 5.54/5.40 6.52/5.97
75 7.79/7.18 5.68/5.62 7.33/6.74
80 8.61/8.18 5.75/5/73 8.61/7.90
85 & Over 9.24/9.01 5.77/5.76 10.43/9.50
FG-IA-1000-12/95 NQ DB
3E
<PAGE>
<PAGE>
Introduction to this Contract
- ------------------------------------------------------------------------------
THE CONTRACT
This is a legal Contract between you and us. We provide benefits
as stated in this Contract. In return, you supply us with the
Initial Premium Payment required to put this Contract in effect.
This Contract and the application, together with any Riders or
Endorsements, constitutes the entire Contract. Riders and
Endorsements add provisions or change the terms of the basic
Contract.
THE OWNER
You are the Owner of this Contract. You are also the Annuitant
unless another Annuitant has been named in the application and is
shown in the Schedule. You have the rights and options described
in this Contract, including but not limited to the right to
receive the Annuity Benefits on the Annuity Commencement Date.
One or more people may own this Contract. If there are multiple
Owners named, the age of the oldest Owner shall be used to
determine the applicable death benefit. In the case of a sole
Owner who dies prior to the Annuity Commencement Date, we will
pay the Beneficiary the death benefit then due. If the sole
Owner is not an individual, we will treat the Annuitant as Owner
for the purpose of determining when the Owner dies under the
death benefit provision (if there is no Contingent Annuitant),
and the Annuitant's age will determine the applicable death
benefit payable to the Beneficiary. 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, the surviving Owner(s) shall be deemed as the
Beneficiary(ies).
THE ANNUITANT
The Annuitant is the measuring life of the Annuity Benefits
provided under this Contract. You may name a Contingent
Annuitant. The Annuitant may not be changed during the
Annuitant's lifetime.
If the Annuitant dies before the Annuity Commencement Date, the
Contingent Annuitant becomes the Annuitant. You will be the
Contingent Annuitant unless you name someone else. The Annuitant
must be a natural person. If the Annuitant dies and no
Contingent Annuitant has been named, we will allow you sixty days
to designate someone other than yourself as Annuitant. If all
Owners are not individuals and, through the operation of this
provision, an Owner becomes Annuitant, we will pay the death
proceeds to the Beneficiary. If there are joint Owners, we will
treat the youngest of the Owners as the Contingent Annuitant
designated, unless you elect otherwise.
THE BENEFICIARY
The Beneficiary is the person to whom we pay death proceeds if
any Owner dies prior to the Annuity Commencement Date. See
Proceeds Payable to Beneficiary for more information. We pay
death proceeds to the primary Beneficiary (unless there are joint
Owners in which case death benefit proceeds are payable to the
surviving Owner). If the primary Beneficiary dies before the
Owner, the death proceeds are paid to the contingent Beneficiary,
if any. If there is no surviving Beneficiary, we pay the death
proceeds to the Owner's estate.
One or more persons may be named as primary Beneficiary or
contingent Beneficiary. In the case of more than one
Beneficiary, we will assume any death proceeds are to be paid in
equal shares to the surviving Beneficiaries. You can specify
other than equal shares.
You have the right to change Beneficiaries, unless you designate
the primary Beneficiary irrevocable. When an irrevocable
Beneficiary has been designated, you may need the consent of the
irrevocable Beneficiary to exercise the rights and options under
this Contract.
FG-IA-1000-12/95
4
<PAGE>
<PAGE>
Introduction to this Contract (continued)
- ------------------------------------------------------------------------------
CHANGE OF OWNER OR BENEFICIARY
During your lifetime and while this Contract is in effect you can
transfer ownership of this Contract or change the Beneficiary.
To make any 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 Variable Products Customer Service Center. A
Change of Owner may affect the amount of death benefit payable
under this Contract. See Proceeds Payable to Beneficiary.
FG-IA-1000-12/95
5
<PAGE>
<PAGE>
Premium Payments and Allocation Changes
- ------------------------------------------------------------------------------
INITIAL PREMIUM PAYMENT
The Initial Premium Payment is required to put this Contract in
effect. The amount and allocation of the Initial Premium Payment
is shown in the Schedule.
ADDITIONAL PREMIUM PAYMENT OPTION
You may make additional premium payments at any time before the
Annuity Commencement Date. Satisfactory notice to us must be
given for additional premium payments. Restrictions on
additional premium payments, such as the Attained Age of the
Annuitant or Owner and the timing and amount of each payment, are
shown in the Schedule. We reserve the right to defer acceptance
of or to return any additional premium payments.
As of the date we receive and accept your additional premium
payment:
(1) The Accumulation Value will increase by the amount of the
premium payment less any premium deductions as shown in
the Schedule.
(2) The increase in the Accumulation Value will be allocated
among the Divisions and the Fixed Allocations in
accordance with your instructions. If you do not provide
such instructions, allocation will be among the Divisions
in proportion to the amount of Accumulation Value in each
Division as of the date we receive and accept your
additional premium payment. Allocations to the Fixed
Account will be made only upon specific written request.
Where to Make Payments
Remit the premium payments to our Variable Products Customer
Service Center. On request we will give you a receipt signed by
one of our officers.
YOUR RIGHT TO CHANGE ALLOCATION OF ACCUMULATION VALUE
The Accumulation Value may be reallocated among the Divisions and
the Fixed Allocations prior to the Annuity Commencement Date.
The number of free allocation changes each Contract Year that we
will allow is shown in the Schedule. To make an allocation
change, you must provide us with satisfactory notice at our
Variable Products Customer Service Center. The change will take
effect when we receive the notice. Restrictions for reallocation
into and out of the Divisions are shown in the Schedule. An
allocation from the Fixed Allocation may be subject to a Market
Value Adjustment. See Market Value Adjustment.
WHAT HAPPENS IF A DIVISION IS NOT AVAILABLE
When a distribution is made from an investment portfolio
supporting a unit investment trust Division in which reinvestment
is not available, we will allocate the distribution to the
Specially Designated Division shown in the Schedule unless you
specify otherwise.
Such a distribution may occur when an investment portfolio or
Division matures, when distribution from a portfolio or Division
cannot be reinvested in the portfolio or Division due to the
unavailability of securities, or for other reasons. When this
occurs because of maturity, we will send written notice to you
thirty days in advance of such date. To elect an allocation to
other than the Specially Designated Division shown in the
Schedule, you must provide satisfactory notice to us at least
seven days prior to the date the investment matures. Such
allocations will not be counted as an allocation change of the
Accumulation Value for purposes of the number of free allocation
changes permitted.
FG-IA-1000-12/95
6
<PAGE>
<PAGE>
How We Measure the Contract's Accumulation Value
- ------------------------------------------------------------------------------
The variable Annuity Benefits under this Contract are provided
through investments which may be made in our Separate Accounts.
THE VARIABLE SEPARATE ACCOUNTS
These accounts, which are designated in the Schedule, are kept
separate from our General Account and any other Separate Accounts
we may have. They are used to support Variable Annuity Contracts
and may be used for other purposes permitted by applicable laws
and regulations. We own the assets in the Variable Separate
Accounts. Assets equal to the reserves and other liabilities of
the accounts will not be charged with liabilities that arise from
any other business we conduct. Income and realized and
unrealized gains or losses from assets in these Separate Accounts
are credited to or charged against the account without regard to
other income, gains or losses in our other investment accounts.
One type of Variable Separate Account will invest in mutual
funds, unit investment trusts and other investment portfolios
which we determine to be suitable for the group contract's
purposes. This Separate Account is treated as a unit investment
trust under Federal securities laws. It is registered with the
Securities and Exchange Commission ("SEC") under the Investment
Company Act of 1940. This Separate Account is also governed by
state laws as designated in the Schedule.
We may offer certain non-registered Series or Variable Separate
Accounts. Any such Series or Variable Separate Account is shown
in the Schedule.
Divisions of the Variable Separate Account
A Unit Investment Trust Variable Separate Account includes
Divisions, each investing in a designated investment portfolio.
The Divisions and the investment portfolios in which they invest,
if applicable, are specified in the Schedule. Some of the
portfolios designated may be managed by a separate investment
adviser. Such adviser may be registered under the Investment
Advisers Act of 1940.
Changes Within the Separate Accounts
We may, from time to time, make additional Separate Account
Divisions available to you. These Divisions will invest in
investment portfolios we find suitable for this Contract. We
also have the right to eliminate Divisions from a Separate
Account, 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 or Division no longer suits the purposes of this
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 or Division is no
longer available for investment, or for some other reason. We
will get prior approval from the insurance department of our
state of domicile before making such a substitution. This
approval process is on file with the insurance department of the
jurisdiction in which this Contract is delivered. We will also
get any required approval from the SEC and any other required
approvals before making such a substitution.
Subject to any required regulatory approvals, we reserve the
right to transfer assets of the Divisions of the Variable
Separate Account, which we determine to be associated with the
class of Contracts to which this Contract belongs, to another
Variable Separate Account or Division.
When permitted by law, we reserve the right to:
(1) Deregister a Separate Account under the Investment
Company Act of 1940;
(2) Operate a Separate Account as a management company
under the Investment Company Act of 1940, if it is
operating as a unit investment trust;
(3) Restrict or eliminate any voting rights of Owners,
or other persons who have voting rights as to a
Separate Account; and,
(4) Combine a Separate Account with other Separate
Accounts.
FG-IA-1000-12/95
7
<PAGE>
<PAGE>
How We Measure the Contract's Accumulation Value
(continued)
- ------------------------------------------------------------------------------
VALUATION PERIOD
Each Division will be valued at the end of each Valuation Period.
A Valuation Period is each Business Day together with any non-
Business Days before it. A Business Day is any day the New York
Stock Exchange (NYSE) is open for trading, and the SEC requires
mutual funds, unit investment trusts, or other investment
portfolios to value their securities.
ACCUMULATION VALUE
The Accumulation Value of this Contract is equal to the sum of
the amounts that you have in each Division and the Fixed
Allocations. You select how your Accumulation Value is
allocated. The maximum number of Divisions and Fixed Allocations
to which you may allocate Accumulation Value at any one time is
shown in the Schedule.
ACCUMULATION VALUE IN EACH DIVISION AND FIXED ALLOCATION
On the Contract Date
On the Contract Date, the Accumulation Value is allocated to each
Division and the Fixed Allocations as shown in the Schedule.
On each Valuation Date
At the end of each subsequent Valuation Period, the amount of
Accumulation Value in each Division and Fixed Allocation will be
calculated as follows:
(1) We take the Accumulation Value in the Division or
Fixed Allocation 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, or we calculate
the interest to be credited to a Fixed Allocation
for the current Valuation Period.
(3) We add (1) and (2).
(4) We add to (3) any additional premium payments (less
any premium deductions as shown in the Schedule)
allocated to the Division or Fixed Allocation during
the current Valuation Period.
(5) We add or subtract allocations to or from that
Division or Fixed Allocation during the current
Valuation Period.
(6) We subtract from (5) any Partial Withdrawals which
are allocated to the Division or Fixed Allocation
during the current Valuation Period.
(7) We subtract from (6) the amounts allocated to that
Division or Fixed Allocation for:
(a) any charges due for Optional Benefit Riders as
shown in the Schedule; and
(b) any Contract charges as shown in the Schedule;
All amounts in (7) are allocated to each Division or Fixed
Allocation as explained in Charges Deducted from Accumulation
Value.
FIXED ACCOUNT
The Fixed Account is a Separate Account under state insurance law
and is not required to be registered with the Securities and
Exchange Commission under the Investment Company Act of 1940.
The Fixed Account includes various Fixed Allocations which we
credit with fixed rates of interest for the Guarantee Period or
Periods you select. We reset the interest rates for new Fixed
Allocations periodically based on our sole discretion.
Guarantee Periods
Each Fixed Allocation is guaranteed an interest rate for a
period, a Guarantee Period. The Guaranteed Interest Rate for a
Fixed Allocation is effective for the entire period. The
Maturity Date of a Guarantee Period will be on the last day of
the calendar month in which the Guarantee Period ends.
Withdrawals and transfers made during a Guarantee Period may be
subject to a Market Value Adjustment unless made within thirty
days prior to the Maturity Date.
FG-IA-1000-12/95
8
<PAGE>
<PAGE>
How We Measure the Contract's Accumulation Value
(continued)
- ------------------------------------------------------------------------------
Upon the expiry of a Guarantee Period, we will transfer the
Accumulation Value of the expiring Fixed Allocation to a Fixed
Allocation with a Guarantee Period equal in length to the
expiring Guarantee Period, unless you select another period prior
to a Maturity Date. We will notify you at least thirty days
prior to a Maturity Date of your options for renewal. If the
period remaining from the expiry of the previous Guarantee Period
to the Annuity Commencement Date is less than the period you have
elected or the period expiring, the next shortest period then
available that will not extend beyond the Annuity Commencement
Date will be offered to you. If a period is not available, the
Accumulation Value will be transferred to the Specifically
Designated Division.
We will declare Guaranteed Interest Rates for the then available
Fixed Allocation Guarantee Periods. These interest rates are
based solely on our expectation as to our future earnings.
Declared Guaranteed Interest Rates are subject to change at any
time prior to application to specific Fixed Allocations, although
in no event will the rates be less than the Minimum Guaranteed
Interest Rate shown in the Schedule.
Market Value Adjustments
A Market Value Adjustment will be applied to a Fixed Allocation
upon withdrawal, transfer or application to an Income Plan if
made more than thirty days prior to such Fixed Allocation's
Maturity Date, except on Systematic Partial Withdrawals and IRA
Partial Withdrawals. The Market Value Adjustment is applied to
each Fixed Allocation separately.
The Market Value Adjustment is determined by multiplying the
amount of the Accumulation Value withdrawn, transferred or
applied to an Income Plan by the following factor:
/ 1 + I \ N/365
( ----------------- ) - 1
\ (1 + J + .0025) /
Where I is the Index Rate for a Fixed Allocation on 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 (fractional years rounded up to the next full year)
remaining in the Guarantee Period at the time of calculation; and
N is the remaining number of days in the Guarantee Period at the
time of calculation. (The Index Rate is described in the
Schedule.)
Market Value Adjustments will be applied as follows:
(1) The Market Value Adjustment will be applied to the
amount withdrawn before deduction of any applicable
Surrender Charge.
(2) For a partial withdrawal, partial transfer or in the
case where a portion of a Fixed Allocation is
applied to an Income Plan, the Market Value
Adjustment will be calculated on the total amount
that must be withdrawn, transferred or applied to an
Income Plan in order to provide the amount
requested.
(3) If the Market Value Adjustment is negative, it will
be assessed first against any remaining Accumulation
Value in the particular Fixed Allocation. Any
remaining Market Value Adjustment will be applied
against the amount withdrawn, transferred or applied
to an Income Plan.
(4) If the Market Value Adjustment is positive, it will
be credited to any remaining Accumulation Value in
the particular Fixed Allocation. If a cash
surrender, full transfer or full application to an
Income Plan has been requested, the Market Value
Adjustment is added to the amount withdrawn,
transferred or applied to an Income Plan.
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How We Measure the Contract's Accumulation Value
(continued)
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MEASUREMENT OF INVESTMENT EXPERIENCE
Index of Investment Experience
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.
How We Determine the Experience Factor
For Divisions of a Unit Investment Trust Separate Account, the
Experience Factor reflects the Investment Experience of the
portfolio in which the 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.
(4) We subtract the daily Mortality and Expense Risk
Charge for each Division shown in the Schedule for
each day in the Valuation Period.
(5) We subtract the daily Asset-Based Administrative
Charge shown in the Schedule for each day in the
Valuation Period.
Calculations for Divisions investing in unit investment trusts
are on a per unit basis.
Net Rate of Return for a Separate Account Division
The Net Rate of Return for a Division during a Valuation Period
is the Experience Factor for that Valuation Period minus one.
Interest Credited to a Fixed Allocation
A Fixed Allocation will be credited with the Guaranteed Interest
Rate for the Guarantee Period in effect on the date the premium
or reallocation is applied. Once applied, such rate will be
guaranteed until that Fixed Allocation's Maturity Date. Interest
will be credited daily at a rate to yield the declared annual
Guaranteed Interest Rate. We periodically declare Guaranteed
Interest Rates for then-available Guarantee Periods. No
Guaranteed Interest Rate will be less than the Minimum Guaranteed
Interest Rate shown in the Schedule.
CHARGES DEDUCTED FROM ACCUMULATION VALUE ON EACH CONTRACT
PROCESSING DATE
All charges and fees are shown in the Schedule.
Charge Deduction Division Option
We will deduct all charges against the Accumulation Value from
the Charge Deduction Division if you elected this option (see the
Schedule). If you did not elect this option or if the charges
are greater than the amount in the Charge Deduction Division, the
charges against the Accumulation Value will be deducted as
follows:
(1) If these charges are less than the Accumulation
Value in the Divisions, they will be deducted
proportionately from all Divisions.
(2) If these charges exceed the Accumulation Value in
the Divisions, any excess over such value will be
deducted from the Fixed Account.
Any charges deducted from the Fixed Account will be taken from
Fixed Allocations starting with the Guarantee Period nearest its
Maturity Date until such charges have been paid.
At any time while this Contract is in effect, you may change your
election of this option. To do this you must send a written
request to our Variable Products Customer Service Center. Any
change will take effect within seven days of the date we receive
your request.
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Your Contract Benefits
- ------------------------------------------------------------------------------
While this Contract is in effect, there are important rights and
benefits that are available to you. We discuss these rights and
benefits in this section.
CASH VALUE BENEFIT
Cash Surrender Value
The Cash Surrender Value before the Annuity Commencement Date, is
determined as follows:
(1) We take the Contract's Accumulation Value;
(2) We adjust for any applicable Market Value
Adjustment;
(3) We deduct any Surrender Charge;
(4) We deduct any charges shown in the Schedule that
have been incurred but not yet deducted, including:
(a) any quarterly administrative fee to be deducted
on the next Contract Processing Date;
(b) the pro rata part of any charges for Optional
Benefit Riders; and
(c) any applicable premium or similar tax.
Cancelling to Receive the Cash Surrender Value
At any time before the Annuity Commencement Date, you may
surrender this Contract to us. To do this, you must return this
Contract with a signed request for cancellation to our Variable
Products Customer Service Center.
The Cash Surrender Value will vary daily. We will determine the
Cash Surrender Value as of the date we receive the Contract and
your signed request in our Variable Products Customer Service
Center. All benefits under this Contract will then end.
We will usually pay the Cash Surrender Value within seven days;
but, we may delay payment as described in the Payments We May
Defer provision.
PARTIAL WITHDRAWAL OPTION
After the first Contract Anniversary, you may make a Partial
Withdrawal once in each Contract Year without incurring a Partial
Withdrawal Charge. Any additional Partial Withdrawals in a
Contract Year are subject to a Partial Withdrawal Charge. The
minimum amount that may be withdrawn is shown in the Schedule.
The maximum amount that may be withdrawn is shown in the
Schedule. Any withdrawal you make will not be treated as premium
only for the purposes of calculating the Surrender Charge. To
take a Partial Withdrawal, you must provide us with satisfactory
notice at our Variable Products Customer Service Center.
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Death Benefit Proceeds
- ------------------------------------------------------------------------------
PROCEEDS PAYABLE TO THE BENEFICIARY
Prior to the Annuity Commencement Date
If the sole Owner dies prior to the Annuity Commencement Date, we
will pay the Beneficiary the death benefit. If there are joint
Owners and any Owner dies, we will pay the surviving Owners the
death benefit. We will pay the amount on receipt of due proof of
the Owner's death at our Variable Products Customer Service
Center. Such amount may be received in a single lump sum or
applied to any of the Annuity Options (see Choosing an Income
Plan). When the Owner (or all Owners where there are joint
Owners) is not an individual, the death benefit will become
payable on the death of the Annuitant prior to the Annuity
Commencement Date (unless a Contingent Annuitant survived the
Annuitant). Only one death benefit is payable under this
Contract. In all events, distributions under the Contract must
be made as required by applicable law.
How to Claim Payments to Beneficiary
We must receive proof of the Owner's (or Annuitant's) death
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 Variable Products
Customer Service Center for instructions.
Guaranteed Death Benefit
On the Contract Date the Guaranteed Death Benefit is equal to the
premium paid. On subsequent Valuation Dates, the Guaranteed
Death Benefit is calculated as shown in the Schedule. A Change
of Owner will affect the Guaranteed Death Benefit, as shown in
the Schedule.
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Choosing an Income Plan
- ------------------------------------------------------------------------------
ANNUITY BENEFITS
If the Annuitant and Owner are living on the Annuity Commencement
Date, we will begin making payments to the Owner. We will make
these payments under the Annuity Option (or Options) as chosen in
the application or as subsequently selected. You may choose or
change an Option by making a written request at least 30 days
prior to the Annuity Commencement Date. Unless you have chosen
otherwise, Option 2 on a 10-year period certain basis will become
effective. The amount of the payments will be determined by
applying the Accumulation Value on the Annuity Commencement Date
in accordance with the Annuity Options section below (See
Payments We May Defer). See the Schedule for certain
restrictions which may apply. Before we pay any Annuity
Benefits, we require the return of this Contract. If this
Contract has been lost, we require the applicable lost Contract
form.
ANNUITY COMMENCEMENT DATE SELECTION
You select the Annuity Commencement Date. You may select any
date following the fifth Contract Anniversary but before the
required date of Annuity Commencement as shown in the Schedule.
If you do not select a date, the Annuity Commencement Date will
be in the month following the required date of Annuity
Commencement.
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.
THE INCOME PLAN
While this Contract is in effect and before the Annuity
Commencement Date, you may choose one or more Annuity Options to
which death benefit proceeds may be applied. If, at the time of
the Owner's death, no Option has been chosen for paying death
benefit proceeds, the Beneficiary may choose an Option within one
year. You may also elect an Annuity Option on surrender of the
Contract for its Cash Surrender Value. For each Option we will
issue a separate written agreement putting the Option into
effect.
Our approval is needed for any Option where:
(1) The person named to receive payment is other than
the Owner or Beneficiary; or
(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 shown in the Schedule.
THE ANNUITY OPTIONS
There are four Options to choose from. They are:
Option 1. Income for a Fixed Period
Payment is made in equal installments for a fixed number of
years. We guarantee each monthly payment will be at least the
Income For Fixed Period amount shown in the Schedule. Values for
annual, semiannual or quarterly payments are available on
request.
Option 2. Income for Life
Payment is made to the person named in equal monthly installments
and guaranteed for at least a period certain. The period certain
can be 10 or 20 years. Other periods certain are 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 each payment will be at least the amount shown in
the Schedule. By age, we mean the named person's age on his or
her last birthday before the Option's effective date. Amounts
for ages not shown are available on request.
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Choosing an Income Plan (continued)
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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 this Contract. Monthly
payments are guaranteed and are made as long as at least one of
the named persons is living. The monthly payment amounts are
available upon request. Such amounts are guaranteed and will be
calculated on the same basis as the Table for Income for Life,
however, the amounts will be based on two lives.
Option 4. Annuity Plan
An amount can be used to buy any single premium annuity we offer
on the Option's effective date.
The current annuity payment rates available when the value of the
Contract is applied to an income plan will be no less than single
premium immediate annuity rates of the same rating class we then
offer.
Guaranteed annuity rates for Option 2 and 3 are based on the 1983
Individual Mortality Table and an interest rate of three and one-
half percent per year. Payments were assumed to be made monthly.
The interest rate assumed for Option 1 is three percent.
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 for any remaining guaranteed
payments in 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 3.00% for Option 1 and
3.50% for Option 2. 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 this
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.
FG-IA-1000-12/95
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Other Important Information
- ------------------------------------------------------------------------------
SENDING NOTICE TO US
Whenever written notice is required, send it to our Variable
Products Customer Service Center. The address of our Variable
Products Customer Service Center is shown on the cover page.
Please include your Contract number in all correspondence.
REPORTS TO OWNER
We will send you a report, at least once in each Contract
quarter, within 31 days of each calendar quarter showing the
Accumulation Value, the Cash Surrender Value and the Death
Benefit of your Contract as of the end of the Contract Processing
Period. The report will also show the allocation of the
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 this Contract is delivered.
We will also send you copies of any shareholder reports of the
portfolios in which the Divisions of the Separate Accounts
invest, as well as any other reports, notices or documents
required by law to be furnished to Contractowners.
ASSIGNMENT - USING THIS CONTRACT AS COLLATERAL SECURITY
You can assign this Contract as collateral security for a loan or
other obligation. This does not change the ownership. Your
rights and any Beneficiary's rights are subject to the terms of
the assignment. To make or release an assignment, we must
receive written notice satisfactory to us at our Variable
Products Customer Service Center. We are not responsible for the
validity of any assignment.
CHANGING THIS CONTRACT
This Contract or any additional Benefit Riders may be changed to
another Annuity Plan according to our rules at the time of the
change.
CONTRACT CHANGES - APPLICABLE TAX LAW
We reserve the right to make changes in this Contract or its
Riders to the extent we deem it necessary to continue to qualify
this 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.
MISSTATEMENT OF AGE OR SEX
If an age or sex has been misstated, the amounts payable or
benefits provided by this Contract shall be those that the
premium payment made would have bought at the correct age or sex.
NON-PARTICIPATING
This Contract does not participate in the divisible surplus of
First Golden American Life Insurance Company of New York.
FG-IA-1000-12/95
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Other Important Information (continued)
- ------------------------------------------------------------------------------
PAYMENTS WE MAY DEFER
We may not be able to determine the value of the assets of the
Divisions because:
(1) The NYSE is closed for trading;
(2) The SEC determines that a state of emergency exists;
or
(3) An order or pronouncement of the SEC permits a delay
for the protection of Contractowners.
(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 the 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 of the Accumulation Value under an
income plan.
We reserve the right to delay payment of amounts allocated to the
Fixed Account for up to six months.
AUTHORITY TO MAKE AGREEMENTS
All agreements made by us must be signed by one of our officers.
No other person, including an insurance agent or broker, can:
(1) Change any of this Contract's terms;
(2) Extend the time for premium payments; or
(3) Make any agreement binding on us.
REQUIRED NOTE ON OUR COMPUTATIONS
We have filed a detailed statement of our computations with the
insurance supervisory official in the appropriate jurisdictions.
The values are not less than those required by the law of that
state or jurisdiction. Any benefit provided by an attached
Optional Benefit Rider will not increase these values unless
otherwise stated in that Rider.
FG-IA-1000-12/95
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DEFERRED COMBINATION VARIABLE AND FIXED ANNUITY CONTRACT - NO
DIVIDENDS
Variable Cash Surrender Values while the Owner is living and prior
to the Annuity Commencement Date. Death benefit subject to
guaranteed minimum. Additional Premium Payment Option. Partial
Withdrawal Option. Non-participating. Investment results
reflected in values.
FG-IA-1000-12/95 NQ DB2
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FIRST GOLDEN AMERICAN
LIFE INSURANCE COMPANY
OF NEW YORK SECTION 72 RIDER
A stock company
- ------------------------------------------------------------------------------
REQUIRED DISTRIBUTION OF PROCEEDS ON DEATH OF OWNER
This Rider is required to qualify the Contract to which it is
attached as an annuity contract under Section 72 of the Internal
Revenue Code of 1986, as amended (the "Code"). Where the terms
of this Rider are in conflict with the terms of the Contract, the
Rider will control. First Golden American Life Insurance Company
of New York, "First Golden American", reserves the right to amend
or administer the Contract and Rider as necessary to comply with
applicable tax requirements. This Rider and the Contract should
be construed so that they comply with applicable tax
requirements.
DEATH OF OWNER ON OR AFTER ANNUITY COMMENCEMENT DATE
IF ANY OWNER DIES ON OR AFTER the Annuity Commencement Date but
prior to the time the entire interest in the Contract has been
distributed, the remaining portion will be distributed at least
as rapidly as under the method of distribution being used as of
the date of the Owner's or Annuitant's death.
DEATH OF OWNER PRIOR TO ANNUITY COMMENCEMENT DATE
IF ANY OWNER DIES PRIOR TO the Annuity Commencement Date,
the entire interest in the Contract will be distributed within
five years of the Owner's death.
However, this distribution requirement will be considered
satisfied as to any portion of the Owner's interest in the
Contract which is payable to or for the benefit of a Designated
Beneficiary and which will be distributed over the life of such
Designated Beneficiary or over a period not extending beyond the
life expectancy of that Designated Beneficiary, provided such
distributions begin within one year of the Owner's death. If the
Designated Beneficiary is the surviving spouse of the decedent,
the Contract may be continued in the name of the spouse as Owner
and these distribution rules are applied by treating the spouse
as the Owner. However, on the death of the surviving spouse,
this provision regarding spouses may not be used again.
If any Owner is not an individual, the death or change
(where permitted) of the Annuitant will be treated as the death
of an Owner.
The Designated Beneficiary is the person entitled to
ownership rights under the Contract. Thus, where no death
benefit has become payable, the Designated Beneficiary, for the
purposes of applying this Rider, will be the Owner(s). Where a
death benefit has become payable, the Designated Beneficiary, for
the purposes of applying this Rider, is the person(s) entitled to
the death benefit, generally the Beneficiary or surviving Owners,
as appropriate. Upon the death of any Owner, the Designated
Beneficiary will become the Owner or, if an individual, will
become the Annuitant.
* * *
An Owner may notify First Golden American as to the manner of
payment under this Rider. If such Owner has not so notified
First Golden American prior to his or her death, the Designated
Beneficiary under the Contract may so notify First Golden
American.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
President Secretary
FG-IA-1000-12/95
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FIRST GOLDEN AMERICAN Individual Retirement
LIFE INSURANCE COMPANY Annuity Rider
OF NEW YORK
A stock company.
- ------------------------------------------------------------------------------
On the basis of the application for the Contract to which this Rider
is attached, this Contract is issued as an Individual Retirement
Annuity ("IRA") intended to qualify as such under Section 408(b) of
the Internal Revenue Code, as amended (the "Code"). This Contract is
established for the exclusive benefit of the Owner and the
beneficiaries named.
In the event of any conflict between the provisions of this Rider and
the Contract to which it is attached, the provisions of this Rider
will control. First Golden American Life Insurance Company of New
York, ("First Golden"), reserves the right to amend or administer the
Contract and Rider as necessary to comply with applicable tax
requirements. The Owner will be given advance written notice of such
changes. First Golden will assume that the Owner has accepted the
change if written notice of the objection to the change is not
received prior to its effective date. If written notice of the
objection to the change is received prior to the effective date, the
Owner will have two options: (1) to annuitize the Contract and select
an annuity option; or (2) to continue the Contract unchanged. Either
of these options may result in tax consequences for either the
annuitant or the Owner. The Owner should consult a tax advisor before
electing either of these options. If the election is not received by
First Golden within 30 days of the date of the Owner's notice to First
Golden, First Golden will assume the Owner has elected to continue the
Contract unchanged.
CONTRIBUTIONS
Except in the case of a rollover contribution or a contribution made
in accordance with the terms of a simplified employee pension ("SEP"),
no contributions will be accepted unless they are in cash, and the
total of such contributions will not exceed $2,000 for any taxable
year.
NONFORFEITABILITY AND NONTRANSFERABILITY
The Owner's IRA account will be 100% nonforfeitable at all times and
will be maintained for the exclusive benefit of the Owner and the
beneficiaries named. This IRA may not be attached or alienated except
where permitted by law.
The Owner may not transfer ownership of any part or all of this IRA at
any time, or pledge any part of it or use any part of it as
collateral.
ROLLOVERS
The Owner may make rollover premium purchase payments under the IRA as
permitted by Section 402(c), 403(a)(4), 403(b)(8), 408(p)(7) or
408(d)(3). The Insurer may require that the Owner furnish
documentation that a rollover premium purchase payment qualifies as a
rollover under the Code.
SIMPLIFIED EMPLOYEE PENSIONS
This IRA will accept premium purchase payments made on behalf of the
Owner by the Owner's employer pursuant to a simplified employee
pension plan ("SEP") under Code Section 408(k).
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MINIMUM DISTRIBUTION RULES
(a) IRA required minimum annual distributions must commence to the
Owner no later than April 1st of the calendar year following the
calendar year in which the Owner attains age 70 1/2. The method
of distribution elected must insure that the entire interest of
the Owner must be distributed by that date. Alternatively, the
distribution method elected must commence by that date and
provide that the Owner's entire interest be distributed over a
period not to exceed:
(i) the life expectancy of the Owner or the joint and last
survivor expectancy of the Owner and the designated
beneficiaries; or,
(ii) a period certain not in excess of the life expectancy of
the Owner or the joint and last survivor expectancy of the
Owner and the designated beneficiaries.
All distributions made hereunder will be made in accordance with
the requirements of section 401(a) (9) of the Code, including the
incidental death benefit requirements of section 401(a) (9) (G)
of the Code, and the regulations thereunder, including the
minimum distribution incidental benefit requirement of section
1.401(a) (9)-2 of the Proposed Income Tax Regulations.
In addition, payments must be either nonincreasing or they may
increase only as provided in Q&A F-3 of section 1.401(a) (9)-1 of
the Proposed Income Tax Regulations.
(b) All payments are to be made in equal annual installments,
except where a cashout accelerates payment. There is no account
balance, which would vary from year to year, as in a 408(a) IRA.
(c) Life expectancy is computed by use of the expected return
multiples in Tables V and VI of section 1.72-9 of the Income Tax
Regulations. Unless otherwise elected by the individual by the
time distributions are required to begin, life expectancies will
be recalculated annually. Such election will be irrevocable by
the individual and will apply to all subsequent years. The life
expectancy of non-spouse beneficiary may not be recalculated.
Instead, life expectancy will be calculated using the attained
age of such beneficiary during the calendar year in which the
beneficiary attains age 70 1/2, and payments for subsequent years
will be calculated based on such life expectancy reduced by one
for each calendar year which has elapsed since the calendar year
life expectancy was first calculated.
(d) In the event the Owner dies before distribution of his or her
interest commences under this IRA, 100% of the balance under the
IRA will be distributed to the beneficiaries named. Distribution
will be completed no later than the last day of the calendar year
in which the fifth anniversary of the Owner's death occurs. If
the individual's interest is payable to a designated beneficiary,
then the entire interest of the individual may be distributed
over the life or over a period certain not greater than the life
expectancy of the designated beneficiary commencing on or before
December 31 of the calendar year immediately following the
calendar year in which the individual died. The designated
beneficiary may elect at any time to receive greater payments.
(e) In the event the Owner dies after the commencement of benefits
to him under this IRA, distribution of the remaining benefits
under the IRA will be made to the beneficiaries named in a method
at least as rapid as that in effect as of the date of the Owner's
death. Commencement of distributions under this section to the
beneficiaries must be no later than the last day of the calendar
year in which occurs the first anniversary of the Owner's death.
(f) The provisions of (d) and (e) will not apply where the
beneficiary is the Owner's surviving spouse. The surviving
spouse may elect to delay commencement of required distributions
until the December 31st of the calendar year in which the
deceased Owner would have attained age 70 1/2. Alternatively,
the surviving spouse may elect to rollover the entire balance of
the deceased Owner's IRA to the surviving spouse's own IRA.
Life expectancy is computed by use of the expected return
multiples in Tables V and VI of section 1.72-9 of the Income Tax
Regulations. For purposes of distributions beginning after the
individual's death, unless otherwise elected by the surviving
spouse by the time distributions are required to begin, life
expectancies will be recalculated annually.
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MINIMUM DISTRIBUTION RULES (CONTINUED)
Such election will be irrevocable by the surviving
spouse and will apply to all subsequent years. In
the case of any other designated beneficiary, life
expectancies will be calculated using the attained
age of such beneficiary during the calendar year
in which distributions are required to begin
pursuant to this section, and payments for any
subsequent calendar year will be calculated based
on such life expectancy reduced by one for each
calendar year which has elapsed since the calendar
year life expectancy was first calculated.
Distributions under this section are considered to
have begun if distributions are made on account of
the individual reaching his or her required
beginning date or if prior to the required
beginning date distributions irrevocably commence
to an individual over a period permitted and in an
annuity form acceptable under section 1.401(a) (9)
of the Regulations.
(g) The designated beneficiary may elect to receive
greater payments than those required under this
section. If there is more than one beneficiary,
the designated beneficiary will be that person
with the shortest life expectancy for the purposes
of determining the distribution period.
(h) For purposes of this Section, any amounts paid
to a minor child of the Owner will be treated as
having been paid to the surviving spouse if the
remainder of the IRA is payable to the surviving
spouse when the child attains the age of majority.
REPORTS
The issuer of an individual retirement annuity
will furnish annual calendar year reports
concerning the status of the annuity.
FG-RA-1009-04/95 3
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN FLEXIBLE PREMIUM
LIFE INSURANCE COMPANY OF NEW YORK DEFERRED COMBINATION VARIABLE
AND FIXED ANNUITY APPLICATION
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK IS A STOCK
COMPANY DOMICILED IN NEW YORK, NEW YORK
- ---------------------------------------------------------------------------
1. OWNER(S)
- ---------------------------------------------------------------------------
Name Male Female Soc. Sec. # or Tax ID.#
/ / / /
- ---------------------------------------------------------------------------
Permanent Address Phone ( )
- ---------------------------------------------------------------------------
City State Zip Date of Birth
- ---------------------------------------------------------------------------
2. ANNUITANT (IF OTHER THAN OWNER)
- ---------------------------------------------------------------------------
Name Male Female Soc. Sec. # or Tax ID.#
/ / / /
- ---------------------------------------------------------------------------
Permanent Address Phone ( )
- ---------------------------------------------------------------------------
City State Zip Date of Birth Relation
to Owner
===========================================================================
CONTINGENT ANNUITANT (OPTIONAL)
- ---------------------------------------------------------------------------
Name Address Relation
to Owner
- ---------------------------------------------------------------------------
3. PRIMARY BENEFICIARY(IES) (IF MORE THAN ONE - INDICATE %)
- ---------------------------------------------------------------------------
Name(s) Relation
to Owner
- ---------------------------------------------------------------------------
CONTINGENT BENEFICIARY(IES) Name Relation
to Owner
- ---------------------------------------------------------------------------
4. PLAN
- ---------------------------------------------------------------------------
/ / DVA PLUS
- ---------------------------------------------------------------------------
5. DEATH BENEFIT OPTIONS
- ---------------------------------------------------------------------------
/ / Annual Ratchet / / Standard
- ---------------------------------------------------------------------------
6. INITIAL PREMIUM AND ALLOCATION INFORMATION
- ---------------------------------------------------------------------------
(A) INITIAL PREMIUM PAID $__________ MAKE CHECK PAYABLE TO FIRST
GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
Fill in percentages for premium allocation below (see INITIAL)
(B) CHARGE DEDUCTION DIVISION: Optional. Please check box to elect.
/ /
<TABLE>
<CAPTION>
ACCOUNT DIVISION INVESTMENT ADVISER (A) INITIAL
<S> <C> <C>
RESEARCH MASSACHUSETTS FINANCIAL SERVICES %
COMPANY (MFS)
OTC MASSACHUSETTS FINANCIAL SERVICES %
COMPANY (MFS)
TOTAL RETURN MASSACHUSETTS FINANCIAL SERVICES %
COMPANY (MFS)
SMALL CAP FRED ALGER MANAGEMENT, INC. %
GROWTH & INCOME ROBERTSON, STEPHENS & COMPANY %
INVESTMENT MGMT, L.P.
VALUE + GROWTH ROBERTSON, STEPHENS & COMPANY %
INVESTMENT MGMT, L.P.
ALL-GROWTH PILGRIM, BAXTER & ASSOCIATES, LTD. %
FULLY MANAGED T. ROWE PRICE ASSOCIATES INC. %
STRATEGIC EQUITY ZWEIG ADVISORS, INC. %
MULTIPLE ALLOCATION ZWEIG ADVISORS, INC. %
RISING DIVIDENDS KAYNE, ANDERSON INV. MGMT., L.P. %
CAPITAL APPRECIATION CHANCELLOR LGT ASSET MANAGEMENT, INC. %
VAlUE EQUITY EAGLE ASSET MANAGEMENT, INC. %
MANAGED GLOBAL PUTNAM INVESTMENT MANAGEMENT, INC. %
EMERGING MARKETS PUTNAM INVESTMENT MANAGEMENT, INC. %
HARD ASSETS VAN ECK ASSOCIATES CORP. %
REAL ESTATE EII REALTY SECURITIES, INC. %
LIMITED MATURITY BOND EQUITABLE INVESTMENT SERVICES, INC. %
LIQUID ASSET EQUITABLE INVESTMENT SERVICES, INC. %
FIXED ALLOCATION ELECTION 1-YEAR %
FIXED ALLOCATION ELECTION 3-YEAR %
FIXED ALLOCATION ELECTION 5-YEAR %
FIXED ALLOCATION ELECTION 7-YEAR %
FIXED ALLOCATION ELECTION 10-YEAR %
TOTAL 100%
</TABLE>
First Golden American Life Insurance Company of New York, Variable
Products Service Center, PO Box 8794, Wilmington, DE 19899-8794
FG-AA-1000-12/95
<PAGE>
<PAGE>
- ---------------------------------------------------------------------------
7. OPTIONAL SYSTEMATIC PARTIAL WITHDRAWALS
- ---------------------------------------------------------------------------
If you want to receive Systematic Partial Withdrawals, your request
must be received in writing. For the appropriate form, please call our
Customer Service Center: 1-800-366-0066.
- ---------------------------------------------------------------------------
8. TAX-QUALIFIED PLANS If you are funding a qualified plan, please
specify type.
- ---------------------------------------------------------------------------
/ / IRA / / IRA Rollover / / SEP/IRA
/ / Other ________________________
- ---------------------------------------------------------------------------
9. REPLACEMENT
- ---------------------------------------------------------------------------
Will the coverage applied for replace any existing annuity or life
insurance policies on the annuitant's life?
/ / Yes (If yes, please complete following) / / No
- ---------------------------------------------------------------------------
Company Name Policy Number Face Amount
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
10. READ THE FOLLOWING STATEMENTS CAREFULLY AND SIGN BELOW:
- BY SIGNING BELOW, I ACKNOWLEDGE RECEIPT OF THE PROSPECTUS. I
UNDERSTAND THAT THIS CONTRACT'S CASH SURRENDER VALUE, 1) WHEN BASED ON
THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT DIVISION, MAY INCREASE
OR DECREASE ON ANY DAY AND THAT NO MINIMUM VALUE IS GUARANTEED, AND 2)
WHEN, BASED ON THE FIXED ACCOUNT, MAY BE SUBJECT TO A MARKET VALUE
ADJUSTMENT, THE OPERATION OF WHICH MAY CAUSE THE VALUES TO INCREASE OR
DECREASE. THIS CONTRACT IS IN ACCORD WITH MY ANTICIPATED FINANCIAL
NEEDS.
- I AGREE THAT, TO THE BEST OF MY KNOWLEDGE AND BELIEF, ALL STATEMENTS
AND ANSWERS IN THIS APPLICATION ARE COMPLETE AND TRUE AND MAY BE RELIED
UPON IN DETERMINING WHETHER TO ISSUE THE CONTRACT. MY ANSWERS WILL FORM
A PART OF ANY CONTRACT TO BE ISSUED, AND ONLY THE OWNER AND FIRST
GOLDEN AMERICAN HAVE THE AUTHORITY TO MODIFY THIS APPLICATION.
- CONTRACTS AND POLICIES AND UNDERLYING SERIES SHARES OR SECURITIES
WHICH FUND CONTRACTS AND POLICIES 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. ALSO, THEY ARE SUBJECT TO MARKET
FLUCTUATION, INVESTMENT RISK AND POSSIBLE LOSS OF PRINCIPAL INVESTED.
______________________________________ _____________________________
Signature of Owner Signed at (City, State) Date
______________________________________ _____________________________
Signature of Joint Owner (if applicable) Signed at (City, State) Date
______________________________________ _____________________________
Signature of Annuitant (if other than Signed at (City, State) Date
owner)
Client Account No. (if applicable)_____________________
- ---------------------------------------------------------------------------
FOR AGENT USE ONLY
- ---------------------------------------------------------------------------
DO YOU HAVE REASON TO BELIEVE THAT THE COVERAGE APPLIED FOR WILL REPLACE
ANY EXISTING ANNUITY OR LIFE INSURANCE ON THE ANNUITANT'S LIFE?
/ / YES / / NO
__________________________ ________________________ ___________________
Agent Signature Print Agent Name & No. Social Security No.
__________________________________
Broker/Dealer/Branch
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Amendment to Application
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
First Golden American Life Insurance Company of New York, Variable
Products Service Center, PO Box 8794, Wilmington, DE 19899-8794
1-800-366-0066
FG-AA-1000-12/95
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN FLEXIBLE PREMIUM
LIFE INSURANCE COMPANY OF NEW YORK DEFERRED COMBINATION VARIABLE
AND FIXED ANNUITY APPLICATION
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK IS A STOCK
COMPANY DOMICILED IN NEW YORK, NEW YORK
- ---------------------------------------------------------------------------
1. OWNER(S)
- ---------------------------------------------------------------------------
Name Male Female Soc. Sec. # or Tax ID.#
/ / / /
- ---------------------------------------------------------------------------
Permanent Address Phone ( )
- ---------------------------------------------------------------------------
City State Zip Date of Birth
- ---------------------------------------------------------------------------
2. ANNUITANT (IF OTHER THAN OWNER)
- ---------------------------------------------------------------------------
Name Male Female Soc. Sec. # or Tax ID.#
/ / / /
- ---------------------------------------------------------------------------
Permanent Address Phone ( )
- ---------------------------------------------------------------------------
City State Zip Date of Birth Relation
to Owner
===========================================================================
CONTINGENT ANNUITANT (OPTIONAL)
- ---------------------------------------------------------------------------
Name Address Relation
to Owner
- ---------------------------------------------------------------------------
3. PRIMARY BENEFICIARY(IES) (IF MORE THAN ONE - INDICATE %)
- ---------------------------------------------------------------------------
Name(s) Relation
to Owner
- ---------------------------------------------------------------------------
CONTINGENT BENEFICIARY(IES) Name Relation
to Owner
- ---------------------------------------------------------------------------
4. PLAN
- ---------------------------------------------------------------------------
/ / DVA PLUS
- ---------------------------------------------------------------------------
5. DEATH BENEFIT OPTIONS
- ---------------------------------------------------------------------------
/ / Annual Ratchet / / Standard
- ---------------------------------------------------------------------------
6. INITIAL PREMIUM AND ALLOCATION INFORMATION
- ---------------------------------------------------------------------------
(A) INITIAL PREMIUM PAID $__________ MAKE CHECK PAYABLE TO FIRST
GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
Fill in percentages for premium allocation below (see INITIAL)
(B) CHARGE DEDUCTION DIVISION: Optional. Please check box to elect.
/ /
<TABLE>
<CAPTION>
ACCOUNT DIVISION INVESTMENT ADVISER (A) INITIAL
<S> <C> <C>
OTC MASSACHUSETTS FINANCIAL SERVICES %
COMPANY (MFS)
RESEARCH MASSACHUSETTS FINANCIAL SERVICES %
COMPANY (MFS)
TOTAL RETURN MASSACHUSETTS FINANCIAL SERVICES %
COMPANY (MFS)
INCOME AND GROWTH SMITH BARNEY MUTUAL FUND MANAGEMENT INC. %
INTERNATIONAL EQUITY SMITH BARNEY MUTUAL FUND MANAGEMENT INC. %
HIGH INCOME SMITH BARNEY MUTUAL FUND MANAGEMENT INC. %
MONEY MARKET SMITH BARNEY MUTUAL FUND MANAGEMENT INC. %
APPRECIATION SMITH BARNEY MUTUAL FUND MANAGEMENT INC. %
HIGH GROWTH TRAVELERS INVESTMENT ADVISOR, INC. %
GROWTH TRAVELERS INVESTMENT ADVISOR, INC. %
BALANCED TRAVELERS INVESTMENT ADVISOR, INC. %
CONSERVATIVE TRAVELERS INVESTMENT ADVISOR, INC. %
INCOME TRAVELERS INVESTMENT ADVISOR, INC. %
FIXED ALLOCATION ELECTION 1-YEAR %
FIXED ALLOCATION ELECTION 3-YEAR %
FIXED ALLOCATION ELECTION 5-YEAR %
FIXED ALLOCATION ELECTION 7-YEAR %
FIXED ALLOCATION ELECTION 10-YEAR %
TOTAL 100%
</TABLE>
First Golden American Life Insurance Company of New York, Variable
Products Service Center, PO Box 8794, Wilmington, DE 19899-8794
FG-AA-1000-12/95(PE)
<PAGE>
<PAGE>
- ---------------------------------------------------------------------------
7. OPTIONAL SYSTEMATIC PARTIAL WITHDRAWALS
- ---------------------------------------------------------------------------
If you want to receive Systematic Partial Withdrawals, your request
must be received in writing. For the appropriate form, please call our
Customer Service Center: 1-800-366-0066.
- ---------------------------------------------------------------------------
8. TAX-QUALIFIED PLANS If you are funding a qualified plan, please
specify type.
- ---------------------------------------------------------------------------
/ / IRA / / IRA Rollover / / SEP/IRA
/ / Other ________________________
- ---------------------------------------------------------------------------
9. REPLACEMENT
- ---------------------------------------------------------------------------
Will the coverage applied for replace any existing annuity or life
insurance policies on the annuitant's life?
/ / Yes (If yes, please complete following) / / No
- ---------------------------------------------------------------------------
Company Name Policy Number Face Amount
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
10. READ THE FOLLOWING STATEMENTS CAREFULLY AND SIGN BELOW:
- BY SIGNING BELOW, I ACKNOWLEDGE RECEIPT OF THE PROSPECTUS. I
UNDERSTAND THAT THIS CONTRACT'S CASH SURRENDER VALUE, 1) WHEN BASED ON
THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT DIVISION, MAY INCREASE
OR DECREASE ON ANY DAY AND THAT NO MINIMUM VALUE IS GUARANTEED, AND 2)
WHEN, BASED ON THE FIXED ACCOUNT, MAY BE SUBJECT TO A MARKET VALUE
ADJUSTMENT, THE OPERATION OF WHICH MAY CAUSE THE VALUES TO INCREASE OR
DECREASE. THIS CONTRACT IS IN ACCORD WITH MY ANTICIPATED FINANCIAL
NEEDS.
- I AGREE THAT, TO THE BEST OF MY KNOWLEDGE AND BELIEF, ALL STATEMENTS
AND ANSWERS IN THIS APPLICATION ARE COMPLETE AND TRUE AND MAY BE RELIED
UPON IN DETERMINING WHETHER TO ISSUE THE CONTRACT. MY ANSWERS WILL FORM
A PART OF ANY CONTRACT TO BE ISSUED, AND ONLY THE OWNER AND FIRST
GOLDEN AMERICAN HAVE THE AUTHORITY TO MODIFY THIS APPLICATION.
- CONTRACTS AND POLICIES AND UNDERLYING SERIES SHARES OR SECURITIES
WHICH FUND CONTRACTS AND POLICIES 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. ALSO, THEY ARE SUBJECT TO MARKET
FLUCTUATION, INVESTMENT RISK AND POSSIBLE LOSS OF PRINCIPAL INVESTED.
______________________________________ _____________________________
Signature of Owner Signed at (City, State) Date
______________________________________ _____________________________
Signature of Joint Owner (if applicable) Signed at (City, State) Date
______________________________________ _____________________________
Signature of Annuitant (if other than Signed at (City, State) Date
owner)
Client Account No. (if applicable)_____________________
- ---------------------------------------------------------------------------
FOR AGENT USE ONLY
- ---------------------------------------------------------------------------
DO YOU HAVE REASON TO BELIEVE THAT THE COVERAGE APPLIED FOR WILL REPLACE
ANY EXISTING ANNUITY OR LIFE INSURANCE ON THE ANNUITANT'S LIFE?
/ / YES / / NO
__________________________ ________________________ ___________________
Agent Signature Print Agent Name & No. Social Security No.
__________________________________
Broker/Dealer/Branch
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Amendment to Application
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
First Golden American Life Insurance Company of New York, Variable
Products Service Center, PO Box 8794, Wilmington, DE 19899-8794
1-800-366-0066
FG-AA-1000-12/95(PE)
<PAGE>
<PAGE>
DECLARATION AND CERTIFICATE OF INCORPORATION
AND CHARTER OF
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
UNDER SECTION 1201 OF THE INSURANCE LAW
OF THE STATE OF NEW YORK
We, the undersigned, being natural persons each of whom is at least
eighteen years of age and citizens of the United States and at least three of
whom are residents of the State of New York, hereby declare our intention to
form a corporation for the purposes of transacting the kinds of insurance
specified in paragraphs "1", "2", and "3" of Section 1113(a) of the Insurance
Law of the State of New York and the kinds of reinsurance authorized under
Section 1114 of the Insurance Law of the State of New York and we do hereby
certify that the following is the proposed Charter of the Corporation:
ARTICLE I.
The name of the Corporation is First Golden American Life Insurance Company of
New York.
ARTICLE II.
The principal office of the Corporation shall be located in the
County of Westchester, State of New York.
<PAGE>
ARTICLE III.
SECTION 1. The kinds of insurance business to be transacted by the
Corporation shall be as follows:
(1) "Life Insurance," meaning every insurance
upon the lives of human beings and every insurance
appertaining thereto, including, without limitation,
the granting of endowment benefits, additional benefits
in the event of death by accident, additional benefits
to safeguard the contract from lapse, accelerated
payments of part or all of the death benefit or a
special surrender value upon diagnosis (A) of terminal
illness defined as a life expectancy of twelve months
or less, or (B) of a medical condition requiring
extraordinary medical care or treatment regardless of
life expectancy, or provide a special surrender value,
upon total and permanent disability of the insured, and
optional modes of settlement of proceeds. "Life
insurance" also includes additional benefits to
safeguard the contract against lapse in the event of
unemployment of the insured. Amounts paid the insurer
for life insurance and proceeds applied under optional
modes of settlement or
-2-
<PAGE>
under dividend options may be
allocated by the insurer to one or more separate
accounts pursuant to Section four thousand two hundred
forty of the Insurance Law of the State of New York.
(2) "Annuities," meaning all agreements to make
periodical payments for a period certain or where the
making or continuance of all or some of a series of
such payments, or the amount of any such payment,
depends upon the continuance of human life, except
payments made under the authority of paragraph one
hereof. Amounts paid the insurer to provide annuities
and proceeds applied under optional modes of settlement
or under dividend options may be allocated by the
insurer to one or more separate accounts pursuant to
Section four thousand two hundred forty of the
Insurance Law of the State of New York.
(3) "Accident and Health Insurance," meaning
(i) insurance against death or personal injury by
accident or by any specified kind or kinds of accident
and insurance against sickness, ailment or bodily
-3-
<PAGE>
injury, including insurance providing disability
benefits pursuant to Article IX of the Workers'
Compensation Law of the State of New York, except as
specified in item (ii) hereof; and (ii) non-cancellable
disability insurance, meaning insurance against
disability resulting from sickness, ailment or bodily
injury (but excluding insurance solely against
accidental injury) under any contract which does not
give the insurer the option to cancel or otherwise
terminate the contract at or after one year from its
effective date or renewal date.
(4) "Reinsurance," meaning all kinds of
reinsurance of the kinds of insurance permitted in
paragraphs 1, 2, and 3 of Section 1113(a) of the
Insurance Law of the State of New York as authorized by
Section 1114 of the Insurance Law of the State of New
York
and such other insurance or other business as a stock life insurance company
now is or hereinafter may be permitted to transact under Section 1714 of the
Insurance Law of the State of New York and under any other section of the
Insurance Law of the State of New York and under any other applicable law and
for
-4-
<PAGE>
which the Corporation shall have the required capital and surplus.
SECTION 2. The foregoing enumeration of specific kinds of
insurance shall not be held to limit or restrict the powers of the Corporation
to carry on any other business to the extent necessarily or properly
incidental to such kinds of insurance.
SECTION 3. The Corporation shall have full power and authority to
cede reinsurance of any risks taken by it subject to the Insurance Law of the
State of New York and the rules and regulations of the Insurance Department of
the State of New York.
ARTICLE IV.
The Board of Directors of the Corporation (the "Board") shall
consist of not less than 9 nor more than 21 members, provided however that the
number of directors shall be increased to not less than 13 members within one
year following the end of the calendar year in which the Corporation's
admitted assets exceed $500,000,000. Each director shall be at least eighteen
years of age and at all times a majority shall be citizens and residents of
the United States and not less than three shall be residents of the State of
New York. At least one third of the directors, but not less than four (4),
shall not be officers or employees of the Corporation or of any company
controlling, controlled by, or under common control with the Corporation and
shall not be beneficial owners of a controlling interest in the voting stock
of the Corporation or of any such company.
-5-
<PAGE>
The directors shall not be
required to hold any shares of stock in the Corporation.
ARTICLE V.
The mode and manner in which the corporate powers of the Corporation
shall be exercised are through the Board and through such Committees of the
Board, officers and agents as the Board and the By-Laws of the Corporation
shall empower.
ARTICLE VI.
The following named persons shall be the first directors of the
Corporation who shall serve until the first Annual Meeting of the Corporation:
BOARD OF DIRECTORS
POST OFFICE
NAME RESIDENCE ADDRESS
Barnett Chernow 282 Hickory Drive
Kennett Square, PA 19348
Stephen J. Friedman 1185 Park Avenue
New York, NY 10128
Andrew Kalinowski 147 Cheese Factory Road
Honeoyo Falls, NY 14472
Mitchell Ray Katcher 119 Haviland Road,
Stamford, CT 06903
Terry Kendall 826 Oxford Crest
Villanova, PA 19085
Bernard Levitt 2603 N.W. 13th Street
Delray Beach, FL 33445
Richard Albert Marin 5 Tudor City Place
New York, NY 10017
Roger A. Martin 8 Honey Hill Lane
Old Lyme, CT 06371
-6-
<PAGE>
Myles R. Tashman 298 Pennington-Titusville Road
Pennington, NJ 08534
ARTICLE VII.
The Annual Meeting of the stockholders of the Corporation shall be
held on the First Wednesday in April of each year (or if a legal holiday on
the next business day), on such date and at such place and time as the Board
shall by resolution prescribe in accordance with the Corporation's By-Laws for
the purpose of electing directors and for the transaction of such other
business as may properly be brought before the meeting. At such Annual
Meeting the directors shall be elected for the ensuing year, the directors to
take office immediately upon election and to hold office until the next Annual
Meeting, and until their successors are elected and qualify. Whenever any
vacancy shall occur in the Board, by death, resignation or otherwise, the
remaining members of the Board, at a meeting called for that purpose or at any
regular meeting, shall elect a director or directors to fill the vacancy or
vacancies then existing and each director so elected shall hold office for the
unexpired term of the director whose place he has taken. Upon their election,
the directors shall elect a Chairman and such officers of the Corporation as
provided for in the By-Laws which the Board shall have the power to take and
amend.
-7-
<PAGE>
ARTICLE VIII.
The duration of the corporate existence of the Corporation shall be
perpetual.
ARTICLE IX.
The total number of shares of stock which the Corporation shall have
authority to issue is 206,000, consisting of 6,000 shares of preferred stock,
having a par value of $5,000 per share, and 200,000 shares of common stock,
having a par value of $10.00 per share. The issuance of any authorized but
unissued capital stock shall be subject to the approval of the Superintendent
of Insurance of the State of New York (the "Superintendent")
PART I
SERIES A REDEEMABLE PREFERRED STOCK
Section 1. Designation and Number of Shares.
This series of Preferred Stock shall be designated
the "Series A Redeemable Preferred Stock" (the "Series A
Preferred Stock"). The number of authorized shares of Series
A Preferred Stock shall be 6,000.
-8-
<PAGE>
Section 2. Rank.
The Series A Preferred Stock shall, as to the
distribution of assets upon the liquidation, dissolution or
winding up of the Corporation, rank (i) prior to the common
stock of the Corporation, par value $10.00 per share (the
"Common Stock"), and any other capital stock of the
Corporation (other than any other class or series of a class
of capital stock of the Corporation the terms of which
expressly provide that the shares thereof rank senior or on a
parity as to the payment of dividends and the distribution of
assets upon the liquidation, dissolution or winding up of the
Corporation with the shares of the Series A Preferred Stock)
(such securities, other than those described in the
immediately preceding parenthetical clause, collectively
referred to herein as the "Junior Securities") and (ii) on a
parity with any other class or series of a class of capital
stock of the Corporation the terms of which expressly provide
that the shares thereof rank on a parity as to the payment of
dividends and the distribution of assets upon the
liquidation, dissolution or winding up of the Corporation
-9-
<PAGE>
with the shares of the Series A Preferred Stock (the "Parity
Securities").
Section 3. Dividends.
(a) The holders of the Series A Preferred Stock shall
be entitled to receive, when, as and if declared by the
Board, out of funds legally available therefor, cash
dividends in an amount equal to the Applicable Dividend Rate
(as defined in Section 3(b) below) multiplied by the
Redemption Price (as defined in Section 4(a) below). Such
dividends shall be payable quarterly on the last Business Day
(as defined in Section 3(b) below) of March, June, September,
and December of each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date") commencing on
the last Business Day of the calendar quarter in which the
Series A Preferred Stock is issued. Each such dividend shall
be payable to holders of record of shares of Series A
Preferred Stock, as they appear on the stock record books of
the Corporation at the close of business on the record date
for such dividend, which record date shall be fixed by the
Board and shall be not more than 60 days nor less than 10
days prior to
-10-
<PAGE>
the Quarterly Dividend Payment Date for such
dividend. Such dividends shall begin to accrue and be
cumulative from the date on which the first shares of Series
A Preferred Stock are issued, whether or not there shall be
funds legally available for the payment thereof and whether
or not the Board shall have declared such dividends; provided
the maximum accumulated unpaid dividends upon the preferred
shares shall be limited to an amount equal to the unpaid
dividends upon the preferred shares for the preceding twelve
calendar quarters to the extent such accumulated dividends
remain unpaid for the preceding twelve calendar quarters.
(b) For purposes of this Section 3, the term
"Applicable Dividend Rate" shall mean a percentage not to
exceed the sum of (i) 1.5% and (ii) the highest "Prime Rate"
as published under the "Money Rates" subsection in The Wall
Street Journal on the Quarterly Dividend Payment Date for the
immediately preceding quarterly period (whether or not a
dividend was actually declared and paid for such period);
provided, however, the Applicable Dividend Rate shall not
exceed a rate equal to the maximum rate of interest provided
in section 5-501 of the New York
-11-
<PAGE>
General Obligations Law, in
effect at the time the shares of Series A Preferred Stock are
offered for sale. For purposes of this Section 3, the term
"Business Day" shall mean a day on which the New York Stock
Exchange is open for trading.
(c) When dividends are not paid in full upon the
Series A Preferred Stock, any dividends declared or paid upon
shares of Series A Preferred Stock and any Parity Securities
shall be declared or paid, as the case may be, pro rata so
that the amounts of dividends declared or paid, as the case
may be, per share on the Series A Preferred Stock and such
other Parity Securities in all cases bear to each other the
same ratio that accumulated and unpaid dividends per share on
the shares of Series A Preferred Stock and such other Parity
Securities bear to each other. No interest, or sum of money
in lieu of interest, shall be payable in respect of any
dividend payment or payments on the Series A Preferred Stock
or any Parity Securities which may be in arrears.
(d) Unless full cumulative dividends have been or
contemporaneously are declared by the
-12-
<PAGE>
Board and paid or
declared and a sum set apart sufficient for such payment by
the Corporation on the Series A Preferred Stock for all
quarterly periods ending on or prior to the date of payment
of dividends on any Junior Securities, subject to the maximum
accumulation of unpaid dividends provided above, no dividends
shall be declared or paid or sum set apart for such payment
or any other distribution made on or with respect to such
Junior Securities for any period, other than dividends
payable or distributions made in shares of Junior Securities.
(e) Unless full cumulative dividends have been or
contemporaneously are declared by the Board and paid or
declared and a sum set apart sufficient for payment by the
Corporation on the Series A Preferred Stock for all quarterly
periods ending on or prior to the date of any event described
in clause (i) or (ii) of this Section 3(e), subject to the
maximum accumulation of unpaid dividends provided above, the
Corporation shall not, and shall not permit any subsidiary
thereof to, (i) redeem, purchase, retire or otherwise acquire
for any consideration any shares of Series A Preferred
-13-
<PAGE>
Stock,
unless (A) all shares of Series A Preferred Stock outstanding
shall be redeemed, repurchased, retired or otherwise acquired
or (B) the shares of Series A Preferred Stock are redeemed,
purchased, retired or otherwise acquired pro rata from among
the holders of the shares then outstanding or (ii) redeem,
purchase, retire or otherwise acquire for any consideration,
or make any payment on account of a sinking fund or other
similar fund for redemption, purchase, retirement or
acquisition of, any Junior Securities or any Parity
Securities, or any warrant, right or option to purchase any
thereof, or make any distribution in respect thereof,
directly or indirectly, whether in cash, obligations or
securities of the Corporation or other property, except, (i)
in the case of Junior Securities, redemptions, purchases,
retirements, acquisitions or distributions made in shares of
Junior Securities or (ii) in the case of Parity Securities,
pro rata redemptions, purchases, retirements or acquisitions
so that the amounts redeemed, purchased, retired or otherwise
acquired or paid or distributed in respect thereof, as the
case may be, per share on the Series A Preferred Stock and
such other Parity
-14-
<PAGE>
Securities in all cases bear to each other
the same ratio that accumulated and unpaid dividends per
share on the shares of Series A Preferred Stock and such
other Parity Securities bear to each other.
Section 4. Redemption.
(a) Subject to the approval of the Superintendent,
upon prior application therefor by the Corporation, to the
extent the Corporation shall have funds legally available
therefor, the Corporation may redeem at its option the Series
A Preferred Stock in cash, at the option of the Corporation,
at any time or from time to time, in whole or in part, at a
redemption price in cash of $5,000 per share (the "Redemption
Price"), together with accrued and unpaid dividends thereon
(whether or not declared) through the date fixed by the
Corporation for redemption (the "Redemption Date"), subject
to the maximum accumulation of unpaid dividends provided
above, without interest.
(b) At least 30 days but not more than 60 days prior
to the Redemption Date, a written
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<PAGE>
notice of such redemption
(the "Redemption Notice") shall be given by first class mail,
postage prepaid, to each holder of record of shares of Series
A Preferred Stock. The Redemption Notice shall be sent to
such holder at such holder's address as shown on the records
of the Corporation and shall state: (i) the Redemption Date;
(ii) the number of shares of Series A Preferred Stock to be
redeemed and, if less than all the shares held by such holder
are to be redeemed, the number of shares to be redeemed from
such holder; (iii) the Redemption Price; and (iv) the place
or places where such holder is to surrender the certificate
or certificates for such holder's shares to the Corporation.
(c) On or after the Redemption Date, each holder of
shares of the Series A Preferred Stock which have been
redeemed shall present and surrender the certificate or
certificates for such holder's shares to the Corporation at
the place designated in the Redemption Notice and thereupon
the Redemption Price of such shares shall be paid to or on
the order of the person whose name appears on such
certificate or certificates as the owner thereof and each
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<PAGE>
surrendered certificate shall be canceled. In case fewer
than all of the shares represented by any such certificate
are redeemed, a new certificate shall be issued representing
the unredeemed shares without cost to the holder thereof.
(d) From and after the Redemption Date (unless
default shall be made by the Corporation in payment of the
Redemption Price), all rights of the holders of the Series A
Preferred Stock with respect to shares that have been
redeemed shall cease and terminate, except the right to
receive the Redemption Price thereof upon the surrender of
certificates representing the same, and such shares shall not
thereafter be transferred (except with the consent of the
Corporation) on the books of the Corporation and such shares
shall not be deemed to be outstanding for any purpose
whatsoever.
Section 5. Liquidation.
(a) The shares of Series A Preferred Stock shall rank
prior to the shares of Junior Securities upon liquidation,
dissolution or winding up of the Corporation, whether
voluntary
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<PAGE>
or involuntary (a "Liquidation Transaction"), so
that in the event of any Liquidation Transaction, the holders
of shares of Series A Preferred Stock then outstanding shall
be entitled to receive out of the assets or surplus funds of
the Corporation available for distribution to its
stockholders, or proceeds thereof, whether from capital,
surplus or earnings, before any distribution is made to
holders of any Junior Securities, a liquidation preference in
the amount per share of Series A Preferred Stock equal to
$5,000, plus an amount equal to all accrued and unpaid
dividends (whether or not declared) on the shares of Series A
Preferred Stock to the date of final distribution, subject to
the maximum accumulation of unpaid dividends provided above.
(b) If, upon any Liquidation Transaction, the assets
or surplus funds of the Corporation, or proceeds thereof,
whether from capital, surplus or earnings, distributable
among the holders of shares of Series A Preferred Stock and
any Parity Securities then outstanding are insufficient to
pay in full the preferential liquidation payments due to such
holders, such assets, surplus funds or proceeds shall be
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<PAGE>
distributable among such holders pro rata in accordance with
the amounts that would be payable on such shares of Series A
Preferred Stock and Parity Securities if all amounts payable
thereon were payable in full. In the event of a Liquidating
Transaction, the Corporation shall give written notice
thereof to the holders of shares of Series A Preferred Stock,
by first class mail, postage prepaid, to such holders'
respective addresses as shown on the stock books of the
Corporation.
(c) Neither the consolidation, merger or other
business combination of the Corporation with or into any
other person or persons nor the sale of all or substantially
all of the assets of the Corporation shall be deemed to be a
Liquidation Transaction.
Section 6. Voting Rights.
The holders of shares of Series A Preferred Stock
shall not be entitled to any voting rights except as required
by law.
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<PAGE>
ARTICLE X.
Any person made or threatened to be made a party to an action or
proceeding, whether civil or criminal, by reason of the fact that he, his
testator or intestate then is or was a director, officer or employee of the
Corporation or then serves or has served any other corporation in any capacity
at the request of the Corporation, shall be indemnified by the Corporation
against expenses, judgments, fines and amounts paid in settlement to the full
extent that officers and directors are permitted to be indemnified by the laws
of the State of New York. The provisions of this paragraph shall not adversely
affect any right to indemnification which any person may have under this
paragraph as in effect prior to its amendment or apart from the provisions of
this paragraph as now, hereafter or formerly in effect.
IN WITNESS WHEREOF, we the undersigned Incorporators, have made and subscribed
this Certificate on the date and at the place hereinafter attested.
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<PAGE>
/s/ Barnett Chernow STATE OF NY )
- ----------------------------- : ss.:
Barnett Chernow COUNTY OF NY )
On the day of , ,
before me personally came
Barnett Chernow to me known and known
to me to be the individual incorporator
specified in and who executed the foregoing
instrument and acknowledged to me that
(s)he executed the same.
/s/ Mitchell M. Cox
-----------------------------
NOTARY PUBLIC
<PAGE>
/s/ Stephen J. Friedman STATE OF New York )
- ----------------------------- : ss.:
Stephen J. Friedman COUNTY OF New York )
On the 2nd day of February, 1996,
before me personally came
Stephen J. Friedman to me known and known
to me to be the individual incorporator
specified in and who executed the foregoing
instrument and acknowledged to me that
(s)he executed the same.
/s/ D. Judith Ledwon
-----------------------------
NOTARY PUBLIC
<PAGE>
/s/ Andrewq J. Kalinowski STATE OF New York )
- ----------------------------- : ss.:
Andrewq J. Kalinowski COUNTY OF New York )
On the 14th day of February, 1996,
before me personally came
Andrewq J. Kalinowski to me known and known
to me to be the individual incorporator
specified in and who executed the foregoing
instrument and acknowledged to me that
(s)he executed the same.
/s/ Thomas Perleman
-----------------------------
NOTARY PUBLIC
<PAGE>
/s/ Mitchell R. Katcher STATE OF NY )
- ----------------------------- : ss.:
Mitchell R. Katcher COUNTY OF NY )
On the day of , ,
before me personally came
Mitchell R. Katcher to me known and known
to me to be the individual incorporator
specified in and who executed the foregoing
instrument and acknowledged to me that
(s)he executed the same.
/s/ Mitchell M. Cox
-----------------------------
NOTARY PUBLIC
<PAGE>
/s/ Stephen J. Friedman STATE OF New York )
- ----------------------------- : ss.:
Stephen J. Friedman COUNTY OF New York )
On the 2nd day of February, 1996,
before me personally came
Stephen J. Friedman to me known and known
to me to be the individual incorporator
specified in and who executed the foregoing
instrument and acknowledged to me that
(s)he executed the same.
/s/ D. Judith Ledwon
-----------------------------
NOTARY PUBLIC
<PAGE>
/s/ Terry L. Kendall STATE OF NY )
- ----------------------------- : ss.:
Terry L. Kendall COUNTY OF NY )
On the day of , ,
before me personally came
Terry L. Kendall to me known and known
to me to be the individual incorporator
specified in and who executed the foregoing
instrument and acknowledged to me that
(s)he executed the same.
/s/ Mitchell M. Cox
-----------------------------
NOTARY PUBLIC
<PAGE>
/s/ Bernard Levitt STATE OF Florida )
- ----------------------------- : ss.:
Bernard Levitt COUNTY OF Palm Beach)
On the 31st day of January, 1996,
before me personally came
Bernard Levitt to me known and known
to me to be the individual incorporator
specified in and who executed the foregoing
instrument and acknowledged to me that
(s)he executed the same.
/s/ Louann Reuther
-----------------------------
NOTARY PUBLIC
<PAGE>
/s/ Richard A. Marin STATE OF New York )
- ----------------------------- : ss.:
Richard A. Marin COUNTY OF New York )
On the 12th day of February, 1996,
before me personally came
Richard A. Marin to me known and known
to me to be the individual incorporator
specified in and who executed the foregoing
instrument and acknowledged to me that
(s)he executed the same.
/s/ Elena M. Surdo
-----------------------------
NOTARY PUBLIC
<PAGE>
/s/ Roger A. Martin STATE OF Connecticut)
- ----------------------------- : ss.: Essex
Roger A. Martin COUNTY OF Middlesex )
On the 3rd day of February, 1996,
before me personally came
Roger A. Martin to me known and known
to me to be the individual incorporator
specified in and who executed the foregoing
instrument and acknowledged to me that
(s)he executed the same.
/s/ A.D. Winslow
-----------------------------
NOTARY PUBLIC
<PAGE>
/s/ Myles R. Tashman STATE OF NY )
- ----------------------------- : ss.:
Myles R. Tashman COUNTY OF NY )
On the day of , ,
before me personally came
Myles R. Tashman to me known and known
to me to be the individual incorporator
specified in and who executed the foregoing
instrument and acknowledged to me that
(s)he executed the same.
/s/ Mitchell M. Cox
-----------------------------
NOTARY PUBLIC
<PAGE>
<PAGE>
BY-LAWS
OF
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
ARTICLE I
---------
NAME, LOCATION AND PURPOSE
--------------------------
SECTION 1. NAME. The name of this Corporation is First Golden
American Life Insurance Company of New York.
SECTION 2. LOCATION. The principal office of the Corporation shall
be in the County of Westchester, State of New York.
SECTION 3. PURPOSE. The purpose for which the Corporation is
formed is to make contracts of insurance of any and all kinds as set forth in
the Charter.
ARTICLE II
----------
SHAREHOLDERS
------------
SECTION 1. PLACE OF MEETINGS. Meetings of the shareholders may be
held at such place or places, within or without the State of New York, as
shall be fixed by the directors and stated in the notice of the meeting.
SECTION 2. ANNUAL MEETING. The annual meeting of shareholders for
the election of directors and the transaction of such other business as may
properly come before the meeting shall be held on the first Wednesday in April
or, if such day shall be a legal holiday, then on the next succeeding business
day.
SECTION 3. NOTICE OF ANNUAL MEETING. Notice of the annual meeting
shall be given to each shareholder entitled to vote at least ten days prior
to, but not more than fifty days before, the meeting.
SECTION 4. SPECIAL MEETINGS. Special meetings of the shareholders
for any purpose or purposes may be called at any
time and place as shall be stated in the notice of the special meeting, for
such purpose or purposes as may be stated in the notice of said meeting made
by the President or Secretary and mut be called upon receipt by either of
them of the written request of the holders of twenty-five percent of the
stock then outstanding and entitled to vote.
<PAGE>
<PAGE>
SECTION 5. NOTICE OF SPECIAL MEETING. Notice of a special meeting,
stating the time, place and purpose or purposes thereof, shall be given to
each shareholder entitled to vote, at least ten days prior to, but not more
than fifty days before, the meeting. The notice shall also set forth at whose
direction it is being issued.
SECTION 6. QUORUM. At any meeting of the shareholders, the holders
of a majority of the shares of stock then entitled to vote shall constitute a
quorum for all purposes, except as otherwise provided by law or the Charter.
SECTION 7. ADJOURNED MEETINGS. Any meeting of shareholders may be
adjourned to a designated time and place by a vote of a majority in interest
of the shareholders present in person or by proxy and entitled to vote, even
though less than a quorum is so present. No notice of such an adjourned
meeting need be given, other than by announcement at the meeting, and any
business may be transacted which might have been transacted at the meeting as
originally called.
SECTION 8. VOTING. At each meeting of the shareholders, every
holder of stock then entitled to vote may vote in person or by proxy, and
shall have one vote for each share of stock registered in his name.
SECTION 9. PROXIES. Every proxy must be dated and signed by the
shareholder or by his attorney-in-fact. No proxy shall be valid after the
expiration of eleven months from the date of its execution, unless otherwise
provided therein. Every proxy shall be revocable at the will of the
shareholder executing it, except where an irrevocable proxy is permitted by
statute.
SECTION 10. ACTION BY WRITTEN CONSENT OF SHAREHOLDERS. Whenever, by
any provision of statute or of the Charter or of these By-Laws, the vote of
shareholders at a meeting thereof is required or permitted to be taken in
connection with any corporate action, the meeting and vote of shareholders may
be dispensed with, if all the shareholders who would have been entitled to
vote upon the action if such meeting were held shall consent in writing to
such corporate action being taken.
ARTICLE III
-----------
BOARD OF DIRECTORS
------------------
SECTION 1. NUMBER AND QUALIFICATIONS. The affairs and business of
the Corporation shall be conducted and managed by a Board of Directors
consisting of not less than nine (9) or more than twenty-one (21) directors,
who shall hold office for the term of one year and until their successors are
elected and qualify. The number of directors shall be increased to not less
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<PAGE>
<PAGE>
than thirteen (13) within one year following the end of the calendar year in
which the Corporation's admitted assets exceed $500,000,000. At least one-
third of the directors, but not less than four (4), shall not be officers or
employees of the Corporation or of any such company controlling, controlled
by, or under common control with the Corporation, and shall not be beneficial
owners of a controlling interest in the voting stock of the Corporation or of
any such company (hereinafter referred to as "Non-Affiliated Directors"). The
number of directors shall be determined by a majority vote of the entire Board
of Directors and may be increased or decreased from time to time, within the
limits prescribed in this section, by vote of the shareholders at any special
meeting. At all times a majority of the directors shall be citizens and
residents of the United States and not less than three thereof shall be
residents of the State of New York. Directors shall be at least 18 years of
age but need not be shareholders.
SECTION 2. POWERS. The Board of Directors may adopt such rules and
regulations for the conduct of its meetings, the exercise of its powers and
the management of the affairs of the Corporation as it may deem proper,
consistent with the laws of the State of New York, the Charter and these By-
Laws.
In addition to the powers and authorities by these By-Laws expressly
conferred upon them, the directors may exercise all such powers of the
Corporation and do such lawful acts and things as are not by statute or by the
Charter or by these By-Laws directed or required to be exercised or done by
the shareholders.
SECTION 3. MEETING, QUORUM, ACTION WITHOUT MEETING. Meetings of the
Board may be held at any place, either within or outside the State of New
York, provided a quorum be in attendance. Except as may be otherwise provided
by the Charter or by the Business Corporation Law of the State of New York, a
majority of the directors in office shall constitute a quorum at any meeting
of the Board and the vote of a majority of a quorum of directors shall
constitute the act of the Board. At least one Non-Affiliated Director must be
included within any quorum for the transaction of business at any meeting of
the Board.
The Board of Directors shall hold an annual meeting, without notice,
immediately after the annual meeting of shareholders or within ten days
thereafter upon one day's notice in the manner provided herein. Meetings of
the Board of Directors shall take place on a quarterly basis and additional
meetings may be established by a resolution adopted by the Board. The Chairman
of the Board (if any) or the President or Secretary may call, and at the
request of any two directors must call, a special meeting of the Board of
Directors, five days' notice of which shall be given by mail, or two days'
notice personally or by telegraph or cable, to each director.
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<PAGE>
<PAGE>
Any one or more members of the Board or any Committee thereof may
participate in any meeting of such Board or Committee by means of a conference
telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time.
Participation by such means shall constitute presence in person at a meeting.
Any action required or permitted to be taken by the Board or any
Committee thereof may be taken without a meeting if time is of the essence and
all members of the Board or the Committee consent in writing to the adoption
of a resolution authorizing the action. The resolution and the written
consents thereto by the members of the Board or Committee shall be filed with
the minutes of the proceedings of the Board or Committee. Such action shall
not be taken in lieu of regular meetings of the Board of Directors established
as provided in this Section 3.
SECTION 4. VACANCIES, REMOVAL. Except as otherwise provided in the
Charter or in the following paragraph, vacancies occurring in the membership
of the Board of Directors, from whatever cause arising (including vacancies
occurring by reason of the removal of directors without cause and newly
created directorships resulting from any increase in the authorized number of
directors), may be filled by a majority vote of the remaining directors,
though less than a quorum, or such vacancies may be filled by the
shareholders.
Any one or more of the directors may be removed, (a) either for or
without cause, at any time, by vote of the shareholders holding a majority of
the outstanding stock of the Corporation entitled to vote, present in person
or by proxy, at any meeting of the shareholders or, (b) for cause, by action
of the Board of Directors at any regular or special meeting of the Board.
A vacancy or vacancies occurring from such removal may be filled at a regular
or special meeting of shareholders or at a regular or special meeting of the
Board of Directors.
SECTION 5. COMMITTEES. The Board of Directors, by resolution
adopted by a majority of the entire Board, may designate from its members an
Executive Committee of five (5) members, or other committee or committees,
each consisting of three (3) or more members, at least one-third of whom shall
be Non-Affiliated Directors, with such powers and authority (to the extent
permitted by law) as may be provided in said resolution; provided, however,
that the number of members of any major committee shall be increased to not
less than five (5) within one year following the end of the calendar year in
which the Corporation's admitted assets exceed $500,000,000. A quorum shall
be a majority of the members of the committee, provided that a quorum for a
committee consisting of three (3) members shall consist of all three (3)
members and provided further that any quorum shall include at least one (1)
Non-Affiliated Director. Action of a committee shall be by a majority vote of
the quorum.
SECTION 6. COMPENSATION. The Board of Directors may fix a
reasonable compensation to be paid to directors for attending meetings of the
Board of Directors, provided such
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<PAGE>
<PAGE>
directors are not salaried officers or employees of the Corporation.
ARTICLE IV
----------
OFFICERS
--------
SECTION 1. ELECTION OF EXECUTIVE OFFICERS. The executive officers
of the Corporation shall be the President, Vice-President (number to be
determined by the directors), Secretary and Treasurer, elected annually by the
directors, who shall hold office at the pleasure of the directors. In
addition, the Board of Directors may elect a Chairman of the Board of
Directors. Except for the offices of President and Secretary, any two offices
or more may be held by one person.
SECTION 2. OTHER OFFICERS. The Board of Directors may appoint such
other officers and agents with such powers and duties as it shall deem
necessary.
SECTION 3. THE CHAIRMAN OF THE BOARD. The Chairman of the Board of
Directors, if one be elected, shall, when present, preside at all meetings of
the Board of Directors, and of the shareholders, and he shall have and perform
such other duties as from time to time may be assigned to him by the Board of
Directors or the Executive Committee.
SECTION 4. THE PRESIDENT. The President, who may, but need not, be
a director, shall, in the absence or non-election of a Chairman of the Board,
preside at all meetings of the shareholders and directors. He shall be the
chief executive officer of the Corporation. While the directors are not in
session, he shall have general management and control of the business and
affairs of the Corporation. He shall from time to time report to the Board of
Directors any information and recommendations concerning the business or
affairs of the Corporation which may be proper or needed, and shall see that
all orders and resolutions of the Board of Directors are carried into effect,
and shall perform such other duties and services, not inconsistent with law or
these By-Laws, as pertain to this office or as are required by the Board of
Directors.
SECTION 5. THE VICE-PRESIDENT. The Vice-President, or if there be
more than one, the Senior or Executive Vice-President, as determined by the
Board of Directors, in the absence or disability of the President, shall
exercise the powers and perform the duties of the President and each Vice-
President shall exercise such other powers and perform such other duties as
shall be prescribed by the directors.
SECTION 6. THE TREASURER. The Treasurer shall have custody of all
funds, securities and evidences of indebtedness of
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<PAGE>
<PAGE>
the Corporation; he shall receive and give receipts and acquittances for moneys
paid in on account of the Corporation, and shall pay out of the funds on hand
all bills, payrolls, and other just debts of the Corporation, of whatever
nature, upon maturity; he shall enter regularly in books to be kept by him for
that purpose, full and accurate accounts of all moneys received and paid out by
him on account of the Corporation, and he shall perform all other duties
incident to the office of Treasurer and as may be prescribed by the directors.
SECTION 7. ASSISTANT TREASURERS. The Assistant Treasurers, in
order of their seniority, shall have all of the powers and shall perform the
duties of the Treasurer in case of the absence of the Treasurer or his
inability to act, and have such other powers and duties as they may be
assigned or directed to perform.
SECTION 8. THE SECRETARY. The Secretary shall keep the minutes of
all proceedings of the directors and of the shareholders; he shall attend to
the giving and serving of all notices to the shareholders and directors or
other notice required by law or by these By-Laws; he shall affix the seal of
the Corporation to deeds, contracts and other instruments in writing requiring
a seal, when duly signed or when so ordered by the directors; he shall have
charge of the certificate books and stock books and such other books and
papers as the Board may direct, and he shall perform all other duties incident
to the office of Secretary.
SECTION 9. ASSISTANT SECRETARIES. The Assistant Secretaries, in
order of their seniority, shall have all of the powers and shall perform the
duties of the Secretary in case of the absence of the Secretary or his
inability to act, and have such other powers and duties as they may be
assigned or directed to perform.
SECTION 10. SALARIES. The salaries of all principal officers shall
be fixed by the Board of Directors, and the fact that any officer is a
director shall not preclude him from receiving a salary as an officer, or from
voting upon the resolution providing the same.
SECTION 11. VACANCIES. All vacancies occurring among any of the
offices shall be filled by the Board of Directors. In the case of a temporary
disability or absence of any officer, the Board of Directors may designate an
incumbent for the time being, who during such incumbency shall have the powers
of such officer. Any officer may be removed at any time by the affirmative
vote of a majority of the directors present at a special meeting of directors
called for the purpose.
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<PAGE>
<PAGE>
ARTICLE V
---------
COMMITTEES
----------
SECTION 1. EXECUTIVE COMMITTEE. The Board of Directors may appoint
an executive committee consisting of the President, if the President is a
director, or, if the President is not a director, the Chairman of the Board,
and four (4) other directors of the Corporation. The executive committee
shall have such power and possess such authority as the Board of Directors
shall, by by-laws or resolution, vest in it subject to any limitations of
law. All vacancies in the membership of this committee shall be filled
by the Board of Directors. The Board of Directors may remove any member
of the executive committed for cause by a majority vote of all the
directors. The executive committee shall have and is hereby granted full
power and authority to conduct and control the business of the Corporation
between meetings of the Board of Directors except as otherwise limited by
the Board of Directors or any provisions of law. The President of the
Corporation, if he is a director, shall be the chairman of the committee.
Any three (3) members shall constitute a quorum. Action of the executive
committee shall be by majority vote of the quorum. The executive committee
shall meet as such time, date or place as it may at its discretion determine,
and shall keep minutes of its meetings.
SECTION 2. AUDIT COMMITTEE. The Board of Directors shall appoint
an audit committee consisting of three (3) or more directors, all of whom
shall be Non-Affiliated Directors. The duties of the committee will include
recommending the selection of independent certified public accountants,
reviewing the Company's financial condition, the scope and results of the
independent audit and any internal audit, nominating candidates for director
for election by shareholders, evaluating the performance of officers deemed by
such Committee to be principle officers of the Company, recommending to the
Board of Directors the selection and compensation of such principal officers
and recommending to the Board of Directors any plan to issue options to its
officers and employees for the purchase of shares of stock, pursuant to
section one thousand two hundred seven of the New York Insurance Law.
SECTION 3. OTHER COMMITTEES. The Board of Directors by resolution
or resolutions, may designate one or more other committees. Each such
committee shall consist of three (3) or more directors of the Corporation and
shall have and may exercise such powers as vested in the committee by the
Board of Directors. These committees shall have such name or names as the
Board of Directors shall determine. The existence of any such committee may
be terminated, or its powers and authority modified at any time by resolution
of the Board of Directors.
SECTION 4. COMPENSATION. The Board of Directors may fix a
reasonable compensation to be paid to directors for attending meetings of
committees, provided such directors are not salaried officers or employees of
the Corporation.
-7-
<PAGE>
<PAGE>
ARTICLE VI
----------
CAPITAL STOCK
-------------
SECTION 1. FORM AND EXECUTION OF CERTIFICATES. Certificates of
stock shall be in such form as required by the Business Corporation Law of the
State of New York and as shall be adopted by the Board of Directors. They
shall be numbered and registered in the order issued; shall be signed by the
Chairman or a Vice-Chairman of the Board (if any) or by the President or a
Vice-President and by the Secretary or an Assistant Secretary or the Treasurer
or an Assistant Treasurer and may be sealed with the corporate seal or a
facsimile thereof. When such a certificate is countersigned by a transfer
agent or registered by a registrar, the signatures of any such officers may be
facsimile.
SECTION 2. TRANSFER. Transfer of shares shall be made only upon the
books of the Corporation by the registered holder in person or by attorney,
duly authorized, and upon surrender of the certificate or certificates for
such shares properly assigned for transfer. Transfer of fractional shares
shall not be made upon the records or books of the Corporation, nor shall
certificates for fractional shares be issued by the Corporation.
SECTION 3. LOST OR DESTROYED CERTIFICATES. The holder of any
certificate representing shares of stock of the Corporation may notify the
Corporation of any loss, theft or destruction thereof, and the Board of
Directors may thereupon, in its discretion, cause a new certificate for the
same number of shares, to be issued to such holder upon satisfactory proof of
such loss, theft or destruction, and the deposit of indemnity by way of bond
or otherwise, in such form and amount and with such surety or sureties as the
Board of Directors may require, to indemnify the Corporation against loss or
liability by reason of the issuance of such new certificates.
SECTION 4. RECORD DATE. In lieu of closing the books of the
Corporation, the Board of Directors may fix, in advance, a date, not exceeding
fifty days, nor less than ten days, as the record date for the determination
of shareholders entitled to receive notice of, or to vote, at any meeting of
shareholders, or to consent to any proposal without a meeting, or for the
purpose of determining shareholders entitled to receive payment of any
dividends, or allotment of any rights, or for any other purpose.
ARTICLE VII
-----------
MISCELLANEOUS
-------------
SECTION 1. DIVIDENDS. In accordance with the laws of the State of
New York, the directors may declare dividends from
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<PAGE>
<PAGE>
time to time upon the capital stock of the Corporation, which shall be payable
in cash, property or shares of the Corporation.
SECTION 2. SEAL. The directors shall provide a suitable corporate
seal which shall read First Golden American Life Insurance Company of New York
and which words may be changed at any time by resolution of the Board of
Directors and shall be in the charge of the Secretary and shall be used as
authorized by the By-Laws.
SECTION 3. FISCAL YEAR. The fiscal year of the Corporation shall
begin the first day of January and terminate on the last day of December of
each year.
SECTION 4. CHECKS, NOTES, ETC. Checks, notes, drafts, bills of
exchange and orders for the payment of money shall be signed or endorsed in
such manner as shall be determined by directors.
The funds of the Corporation shall be deposited in such bank or
trust company, and checks drawn against such funds shall be signed in such
manner as may be determined from time to time by the directors.
SECTION 5. LOANS. No loans shall be contracted on behalf of the
Corporation and no evidences of indebtedness shall be issued in its name
unless authorized by or under the authority of a resolution of the Board of
Directors. Such authorization may be general or confined to specific
instances.
SECTION 6. NOTICE AND WAIVER OF NOTICE. Any notice required to be
given under these By-Laws may be waived by the person entitled thereto, in
writing, by telegram, cable, telex or radiogram, and the presence of any
person at a meeting shall constitute waiver of notice thereof as to such
person.
Whenever any notice is required by these By-Laws to be given,
personal notice is not meant unless expressly so stated; and any notice so
required shall be deemed to be sufficient if given by depositing it in a post
office or post box in a sealed postpaid wrapper, addressed to such
shareholder, officer or director, at such address as appears on the books of
the Corporation and such notice shall be deemed to have been given on the day
of such deposit.
SECTION 7. VOTING STOCK OF OTHER CORPORATIONS. The Chairman of the
Board, the President, any Vice-President or any other officer designated by
the Board of Directors of the Corporation or the Executive Committee may
execute in the name of the Corporation and affix the corporate seal to any
proxy or power of attorney authorizing the proxy or proxies or attorney or
attorneys named therein to vote the stock of any corporation held by this
Corporation on any matter on which such stock may be
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voted. If any stock owned by this Corporation is held in any name other than
the name of this Corporation, instructions as to the manner in which such
stock is to be voted on behalf of this Corporation may be given to the holder
of record by the Chairman of the Board, the President, any Vice-President, or
any other officer designated by the Board of Directors or Executive Committee.
ARTICLE VIII
------------
INDEMNIFICATION OF OFFICERS AND DIRECTORS
-----------------------------------------
SECTION 1. AUTHORIZATION FOR INDEMNIFICATION. (a) The Corporation
may indemnify any person, made, or threatened to be made, a party to an action
or proceeding other than one by or in the right of the Corporation to procure
a judgment in its favor, whether civil or criminal, including an action by or
in the right of any other Corporation of any type or kind, domestic or
foreign, or any partnership, joint venture, trust, employee benefit plan or
other enterprise, which any director or officer of the Corporation served in
any capacity at the request of the Corporation, by reason of the fact that he,
his testator or intestate, was a director or officer of the Corporation, or
served such other corporation, partnership, joint venture, trust, employee
benefit plan, or other enterprise in any capacity, against judgments, fines,
amounts paid in settlement and reasonable expenses, including attorneys' fees
actually and necessarily incurred as a result of such action or proceeding, or
any appeal therein, if such director or officer acted, in good faith, for a
purpose which he reasonably believed to be in, or, in the case of service for
any other corporation or any partnership, joint venture, trust, employee
benefit plan or other enterprise, not opposed to, the best interests of the
corporation and, in criminal actions or proceedings, in addition, had no
reasonable cause to believe that his conduct was unlawful.
(b) The termination of any such civil or criminal action or
proceeding by judgment, settlement, conviction or upon a plea of nolo
contendere, or its equivalent, shall not in itself create a presumption that
any such director or officer did not act, in good faith, for a purpose which
he reasonably believed to be in, or, in the case of service for any other
corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise, not opposed to, the best interests of the Corporation or
that he had reasonable cause to believe that his conduct was unlawful.
(c) The Corporation may indemnify any person made, or threatened to
be made, a party to an action by or in the right of the Corporation to procure
a judgment in its favor by reason of the fact that he, his testator or
intestate, is or was a director or officer of the Corporation, or is or was
serving at the
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request of the Corporation as a director or officer of any other corporation
of any type or kind, domestic or foreign, of any partnership, joint venture,
trust, employee benefit plan or other enterprise, against amounts paid in
settlement and reasonable expenses, including attorneys' fees, actually and
necessarily incurred by him in connection with the defense or settlement of
such action, or in connection with an appeal therein, if such director or
officer acted, in good faith, for a purpose which he reasonably believed to
be in or in the case of service for other corporation or any partnership,
joint venture, trust, employee benefit plan or other enterprise, not opposed
to the best interests of the corporation, except that no indemnification under
this paragraph shall be made in respect of (1) a threatened action, or a
pending action which is settled or otherwise disposed of, or (2) any claim,
issue or matter as to which such person shall have been adjudged to be liable
to the Corporation, unless and only to the extent that the court in which the
action was brought, or, if no action was brought, any court of competent
jurisdiction, determines upon application that, in view of all the
circumstances of the case, the person is fairly and reasonably entitled to
indemnity for such portion of the settlement and expenses as the court deems
proper.
(d) For the purpose of this section, the Corporation shall be
deemed to have requested a person to serve an employee benefit plan where the
performance by such person of his duties to the Corporation also imposes
duties on, or otherwise involves services by, such person to the plan or
participants or beneficiaries of the plan; excise taxes assessed on a person
with respect to an employee benefit plan pursuant to applicable law shall be
considered fines; and action taken or omitted by a person with respect to an
employee benefit plan in the performance of such person's duties for a purpose
reasonably believed by such person to be in the interest of the participants
and beneficiaries of the plan shall be deemed to be for a purpose which is not
opposed to the best interests of the Corporation.
SECTION 2. INDEMNIFICATION BY THE COURT. (a) Notwithstanding the
failure of the Corporation to provide indemnification, and despite any
contrary resolution of the board or of the shareholders in the specific case
under law, indemnification shall be awarded by a court to the extent
authorized under section 1 of this Article and the laws of the State of New
York. Application therefor may be made, in every case, either:
(1) In the civil action or proceeding in which the expenses were
incurred or other amounts were paid, or
(2) To the supreme court in a separate proceeding, in which case
the application shall set forth the disposition of any previous
application made to any court for the same or similar relief and also
reasonable cause for the failure
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to make application for such relief in the action or proceeding in which
the expenses were incurred or other amounts were paid.
(b) The application shall be made in such manner and form as may be
required by the applicable rules of court or, in the absence thereof, by
direction of a court to which it is made. Such application shall be upon
notice to the Corporation. The court may also direct that notice be given at
the expense of the Corporation to the shareholders and such other persons as
it may designate in such manner as it may require.
(c) Where indemnification is sought by judicial action, the court
may allow a person such reasonable expenses, including attorneys' fees, during
the pendency of the litigation as are necessary in connection with his defense
therein, if the court shall find that the defendant has by his pleadings or
during the course of the litigation raised genuine issues of fact or law.
SECTION 3. INDEMNIFICATION OTHER THAN BY COURT AWARD. (a) A person
who has been successful, on the merits or otherwise, in the defense of a civil
or criminal action or proceeding of the character described in section 1 of
this Article shall be entitled to indemnification as authorized in such
section.
(b) Except as provided in paragraph (a), any indemnification under
sections 1, 2 and 4 of this Article shall be made by the Corporation, only if
authorized in the specific case:
(1) By the Board acting by a quorum consisting of directors who are
not parties to such action or proceeding upon a finding that the director
or officer has met the standard of conduct set forth in section 1, or
established pursuant to section 3, of this Article as the case may be,
or,
(2) If a quorum under subparagraph (1) is not obtainable or, even
if obtainable, a quorum of disinterested directors so directs, due
diligence:
(A) By the Board upon the opinion in writing of independent
legal counsel that indemnification is proper in the circumstances
because the applicable standard of conduct set forth in such
sections has been met by such director or officer, or
(B) By the shareholders upon a finding that the director or
officer has met the applicable standard of conduct set forth in such
sections.
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(c) Expenses incurred in defending a civil or criminal action or
proceeding may be paid by the Corporation in advance of the final disposition
of such action or proceeding if upon receipt of an undertaking by or on behalf
of such director or officer to repay such amount as, and to the extent,
required by paragraph (a) of section 5 of this Article.
SECTION 4. OTHER RIGHTS. The indemnification and advancement of
expenses granted pursuant to, or provided by, this Article and the laws of the
State of New York shall not be deemed exclusive of any other rights to which a
director or officer seeking indemnification or advancement of expenses may be
entitled, whether contained in the Charter or the By-Laws, when authorized by
such Charter or By-Laws, (i) a resolution of shareholders, (ii) a resolution
of directors, or (iii) an agreement providing for such indemnification,
provided that no indemnification may be made to or on behalf of any director,
or officer if a judgment or other final adjudication adverse to the director
or officer establishes that his acts were committed in bad faith or were the
result of active and deliberate dishonesty and were material to the cause of
action so adjudicated, or that he personally gained in fact a financial profit
or other advantage to which he was not legally entitled. Nothing contained in
this Article shall affect any rights to indemnification to which corporate
personnel other than directors and officers may be entitled by contract or
otherwise under New York law.
SECTION 5. OTHER PROVISIONS AFFECTING INDEMNIFICATION. (a) All
expenses incurred in defending a civil or criminal action or proceeding which
are advanced by the Corporation under paragraph (c) of section 3 of this
Article or allowed by a court under paragraph (c) of section 2 of this Article
shall be repaid in case the person receiving such advancement or allowance is
ultimately found, under the procedure set forth in this Article, not to be
entitled to indemnification or, where indemnification is granted, to the
extent the expenses so advanced by the Corporation or allowed by the court
exceed the indemnification to which he is entitled.
(b) No indemnification, advancement or allowance shall be made
under this Article in any circumstance where it appears:
(1) That the indemnification would be inconsistent with the laws of
the State of New York;
(2) That the indemnification would be inconsistent with a provision
of the Charter, a By-Law, a resolution of the Board or of the
shareholders, an agreement or other proper corporate action, in effect at
the time of the accrual of the alleged cause of action asserted in the
threatened or pending action or proceeding in which
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the expenses were incurred or other amounts were paid, which prohibits
or otherwise limits indemnification; or
(3) If there has been a settlement approved by the court, that the
indemnification would be inconsistent with any condition with respect to
indemnification expressly imposed by the court in approving the
settlement.
(c) If, under this Article, any expenses or other amounts are paid
by way of indemnification, otherwise than by court order or action by the
shareholders, the Corporation shall, not later than the next annual meeting of
shareholders unless such meeting is held within three months from the date of
such payment, and, in any event, within fifteen months from the date of such
payment, mail to its shareholders of record at the time entitled to vote for
the election of directors a statement specifying the persons paid, the amounts
paid, and the nature and status at the time of such payment of the litigation
or threatened litigation.
(d) If any action with respect to indemnification of directors and
officers is taken by way of amendment of the By-Laws, resolution of directors,
or by agreement, then the Corporation shall, not later than the next annual
meeting of shareholders, unless such meeting is held within three months from
the date of such action, and, in any event, within fifteen months from the
date of such action, mail to its shareholders of record at the time entitled
to vote for the election of directors a statement specifying the action taken.
(e) No payment of indemnification, advancement or allowance under
sections seven hundred twenty-one to seven hundred twenty-seven inclusive of
the New York Business Corporation Law shall be made unless a notice has been
filed with the Superintendent of Insurance of the State of New York (the
"Superintendent") not less than thirty days prior to such payment, specifying
the payees, the amounts, the manner in which such payment is authorized and
the nature and status, at the time of such notice, of the litigation or
threatened litigation. If any action with respect to indemnification of
directors or officers shall be taken by amendment of the by-laws, such action
shall be in accordance with the approval requirements in sections one thousand
two hundred nine and one thousand two hundred ten of Article 12 of the New
York Insurance Law. If any action shall be taken by resolution of directors,
or by agreement or otherwise, a notice shall be filed with the Superintendent
not less than thirty days thereafter specifying the action taken.
SECTION 6. INSURANCE. (a) Subject to paragraph (b) of this
section, the Corporation shall have power to purchase and maintain insurance:
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(1) To indemnify the Corporation for any obligation which it incurs
as a result of the indemnification of directors and officers under the
provisions of this Article, and
(2) To indemnify directors and officers in instances in which they
may be indemnified by the Corporation under the provisions of this
Article, and
(3) To indemnify directors and officers in instances in which they
may not otherwise be indemnified by the Corporation under the provisions
of this Article provided the contract of insurance covering such
directors and officers provides, in a manner acceptable to the
superintendent of insurance, for a retention amount and for co-insurance.
(b) No insurance under paragraph (a) may provide for any payment,
other than cost of defense, to or on behalf of any director or officer:
(1) if a judgment or other final adjudication adverse to the
insured director or officer establishes that his acts of active and
deliberate dishonesty were material to the cause of action so
adjudicated, or that he personally gained in fact a financial profit or
other advantage to which he was not legally entitled, or
(2) in relation to any risk the insurance of which is prohibited
under the insurance law of this state.
(c) Insurance under any or all subparagraphs of paragraph (a) may
be included in a single contract or supplement thereto. Retrospective rated
contracts are prohibited.
(d) The Corporation shall, within the time and to the persons
provided in the laws of the State of New York, mail a statement in respect of
any insurance it has purchased or renewed under this section, specifying the
insurance carrier, date of the contract, cost of the insurance, corporate
positions insured, and a statement explaining all sums, not previously
reported in a statement to shareholders, paid under any indemnification
insurance contract.
(e) This section is meant to conform with the public policy of the
State of New York which is to spread the risk of corporate management,
notwithstanding any other general or special law of the state or of any other
jurisdiction including the Federal Government.
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ARTICLE IX
----------
INSURANCE
---------
SECTION 1. KINDS OF INSURANCE. The Board of Directors shall
determine the kinds of insurance and the nature of the risks to be covered
pursuant to the provisions of the Charter.
SECTION 2. CLASSIFICATION OF RISKS. Subject to statutory
requirements, the Board of Directors shall have authority to establish
reasonable classifications within the respective kinds of insurance.
SECTION 3. REINSURANCE. The Corporation may contract for
reinsurance on its own risks and may make or issue reinsurance contracts on
the risks of others, in accordance with the provisions of the Charter.
ARTICLE X
---------
AMENDMENTS
----------
SECTION 1. BY SHAREHOLDERS. These By-Laws may be amended at any
shareholders' meeting by vote of the shareholders holding a majority of the
outstanding stock having voting power, present either in person or by proxy,
provided notice of the amendment is included in the notice or waiver of notice
of such meeting.
SECTION 2. BY DIRECTORS. The Board of Directors may also amend
these By-Laws at any regular or special meeting of the Board by a majority
vote of the entire Board, but any By-Laws so made by the Board of Directors
may be altered or repealed by the shareholders.
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PARTICIPATION AGREEMENT
Among
(FUND)
(ADVISER)
and
GOLDEN AMERICAN LIFE INSURANCE COMPANY
THIS AGREEMENT, made as of the ____ day of _________ 1997, by
and among the FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY, a stock
insurance company domiciled in the State of New York (hereinafter
the "Company"), on its own behalf and on behalf of each
segregated asset account of the Company set forth on Schedule A
hereto as may be amended from time to time (each such account
hereinafter referred to as the "Account"), the
______________________ (hereinafter the "Fund")and
______________________________. (hereinafter the "Adviser"), a
__________________________.
WHEREAS, the Fund engages in business as an open-end
management investment company and is available to act as the
investment vehicle for separate accounts established for variable
annuity contracts and, subject to an order obtained from the
Securities and Exchange Commission (the "SEC"), available to act
as the investment vehicle for certain qualified pension and
retirement plans ("Qualified Plans") and for separate accounts
established for variable life insurance policies (such variable
life insurance policies and variable annuity contracts are
herein, collectively, the "'Variable Insurance Products") to be
offered by insurance companies which have entered into
participation agreements with the Fund and the Adviser
(hereinafter "Participating Insurance Companies"); and
WHEREAS, the beneficial interests in the Fund are divided
into several series of shares, each representing the interest in
a particular managed portfolio of securities and other assets;
and
WHEREAS, the Fund desires to make shares of such managed
portfolios as are listed on Schedule B attached hereto, as such
Schedule B may be amended from time to time hereafter by mutual
written agreement of all the parties hereto, available to the
Company for purchase (each such listed portfolio, a "Portfolio");
and
WHEREAS, the Fund is seeking and expects to obtain an order
from the SEC, granting Participating Insurance Companies and
variable annuity and variable insurance separate accounts
exemptions from the provisions of Sections 9(a), 13(a), 15(a),
and 15(b) of the Investment Company Act of 1940, as amended
(hereinafter the "1940 Act"), and Rules 6e-2(b)(15) and 6e-
3(T)(b)(15) thereunder, to the extent necessary to permit shares
of the Fund to be sold to and held by variable annuity and
variable life insurance separate accounts of both affiliated and
unaffiliated life insurance companies (hereinafter the "Mixed and
Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management
investment company under the 1940 Act and its shares are
registered under the Securities Act of 1933, as amended
(hereinafter the "1933 Act"); and
WHEREAS, the Adviser is duly registered as an Investment
Adviser under the Federal Investment Advisers Act of 1940 and any
applicable state securities law; and
WHEREAS, the Company has registered or will register certain
variable life and variable annuity contracts under the 1933 Act;
and
WHEREAS, each Account is a duly organized, validly existing
segregated asset account, established by resolution of the Board
of Directors of the Company, on the date shown for such Account
on Schedule A hereto, to set aside and invest assets attributable
to one or more variable life and annuity contracts; and
WHEREAS, the Company has registered or will register each
Account as a unit investment trust under the 1940 Act; and
WHEREAS, to the extent permitted by applicable insurance
laws and regulations, the Company intends to purchase shares in
the Portfolios on behalf of each Account to fund certain of the
aforesaid variable life and variable annuity contracts.
NOW, THEREFORE, in consideration of their mutual promises
the Company, the Fund and the Adviser agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Fund agrees to sell to the Company those shares of
the Fund which each Account orders, executing such orders on a
daily basis at the net asset value next computed after receipt by
the Fund or its designee of the order for the shares of the Fund.
For purposes of this Section 1.1, the Company shall be the
designee of the Fund for receipt of such orders from each Account
and receipt by such designee shall constitute receipt by the
Fund; provided that the Fund receives notice of such order by
10:00 a.m. Eastern time on the next following Business Day.
"Business Day" shall mean any day on which the New York Stock
Exchange is open for trading and on which the Fund calculates its
net asset value pursuant to the rules of the Securities and
Exchange Commission.
1.2. The Fund agrees to make its shares available
indefinitely for purchase at the applicable net asset value per
share by the Company and its Accounts on those days on which the
Fund calculates its net asset value pursuant to the rules of the
SEC and the Fund shall use reasonable efforts to calculate such
net asset value on each day which the New York Stock Exchange is
open for trading. Notwithstanding the foregoing, the Board of
Directors of the Fund (hereinafter the "Board") may refuse to
sell shares of any Portfolio to any person, or suspend or
terminate the offering of shares of any Portfolio if such action
is required by law or by regulatory authorities having
jurisdiction or is, in the sole discretion of the Board acting in
good faith and in light of their fiduciary duties under federal
and any applicable state laws, necessary in the best interest of
the shareholders of such Portfolio.
1.3. The Fund and the Adviser agree that shares of the Fund
will be sold only to Participating Insurance Companies and their
separate accounts and, in accordance with the terms of the Mixed
and Shared Funding Exemptive Order, certain Qualified Plans. No
shares of any Portfolio will be sold to the general public.
1.4. The Fund will not sell Fund shares to any insurance
company or separate account unless an agreement containing
provisions substantially the same as Articles I and VII, Section
2.5 of Article II and Sections 3.4 and 3.5 of Article III of
this Agreement is in effect to govern such sales.
1.5 The Fund agrees to redeem for cash, on the Company's
request, any full or fractional shares of the Fund held by the
Company, executing such requests on a daily basis at the net
asset value next computed after receipt by the Fund or its
designee of the request for redemption. For purposes of Sections
2.10 and 2.11, upon the payment by the Fund to the Company of the
proceeds of such redemptions, such proceeds shall cease to be the
responsibility of the Fund and shall become the responsibility of
the Company. For purposes of this Section 1.5, the Company shall
be the designee of the Fund for receipt of requests for
redemption from each Account and receipt of requests for
redemption from each Account and receipt by such designee shall
constitute receipt by the Fund; provided that the Fund received
notice of such request for redemption by 10:00 a.m. Eastern time
on the next following Business Day.
1.6. The Company agrees to purchase and redeem the shares of
each Portfolio offered by the then current prospectus of the Fund
in accordance with the provisions of such prospectus. The
Company agrees that all net amounts available under the variable
life and variable annuity contracts with the form number(s) which
are listed on Schedule C attached hereto and incorporated herein
by this reference, as such Schedule C may be amended from time to
time hereafter by mutual written agreement of all the parties
hereto and which such contracts have been sold pursuant to an
Annuity Selling Agreement dated February 10, 1995, by and between
the Company, PFS Investments Inc. and Primerica Financial
Services, Inc. (the "Contracts"), shall be invested in the
Portfolios, in such other funds advised by the Adviser as may be
mutually agreed to in writing by the parties hereto, or in the
Company's general account, provided that such amounts may also be
invested in an investment company other than the Fund if (a) such
other investment company, or series thereof, has investment
objectives or policies that are substantially different from the
investment objectives and policies of the Portfolios of the Fund;
or (b) the Company gives the Fund and the Adviser 60 days written
notice of its intention to make such other investment company
available as a funding vehicle for the Contracts; or (c) such
other investment company was available as a funding vehicle for
the Contracts prior to the date of this Agreement and the Company
so informs the Fund and Adviser prior to their signing this
Agreement; or (d) the Fund or Adviser consents to the use of such
other investment company.
1.7. The Company shall pay for Fund shares on the next
Business Day after an order to purchase Fund shares is made in
accordance with the provisions of Section 1.1 hereof. Payment
shall be in federal funds transmitted by wire. For purpose of
Section 2.9 and 2.10, upon receipt by the Fund of the federal
funds so wired, such funds shall cease to be the responsibility
of the Company and shall become the responsibility of the Fund.
1.8. Issuance and transfer of the Fund's shares will be by
book entry only. Stock certificates will not be issued to the
Company or any Account. Shares ordered from the Fund will be
recorded in an appropriate title for each Account or the
appropriate subaccount of each Account.
1.9 The Fund shall furnish notice (by wire or telephone,
followed by written confirmation) as soon as is reasonably
practicable to the Company of any income, dividends or capital
gain distributions payable on the Fund's shares. The Company
hereby elects to receive all such income dividends and capital
gain distributions as are payable on the Portfolio shares in
additional shares of that Portfolio. The Company reserves the
right to revoke this election and to receive all such income
dividends and capital gain distributions in cash. The Fund shall
notify the Company of the number of shares so issued as payment
of such dividends and distributions.
1.10. The Fund shall make the net asset value per share
for each Portfolio available to the Company on a daily basis as
soon as reasonably practical after the net asset value per share
is calculated (normally 6:30 p.m. Eastern time) and shall use its
best efforts to make such net asset value per share available by
7:00 p.m. Eastern time. If the Fund provides the Company with
the incorrect share net asset value information, the Company on
behalf of the Account shall be entitled to a prompt adjustment to
the number of shares purchased or redeemed to reflect the correct
share net asset value. Upon a final determination that there has
been an error in the calculation of net asset value, dividend or
capital gain, the Fund shall report such error to the Company.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that the Contracts
are or will be registered under the 1933 Act; that the Contracts
will be issued and sold in compliance in all material respects
with all applicable Federal and State laws and that the sale of
the Contracts shall comply in all material respects with state
insurance suitability requirements. The Company further
represents and warrants that it is an insurance company duly
organized and in good standing under applicable law and that it
has legally and validly established each Account prior to any
issuance or sale thereof as a segregated asset account under
Title 18 Section 3092 of the Delaware Insurance Law and has
registered or, prior to any issuance or sale of the Contracts,
will register each Account as a unit investment trust in
accordance with the provisions of the 1940 Act to serve as a
segregated investment account for the Contracts.
2.2. The Fund represents and warrants that Fund shares sold
pursuant to this Agreement shall be registered under the 1933
Act, shall be duly authorized for issuance and sold in compliance
with the laws of the State of ____________ and all applicable
federal and state securities laws and that the Fund is and shall
remain registered under the 1940 Act. The Fund shall amend the
Registration Statement for its shares under the 1933 Act and the
1940 Act from time to time as required in order to effect the
continuous offering of its shares. The Fund shall register and
qualify the shares for sale where necessary as determined by the
Fund or the Adviser in accordance with the laws of the various
states.
2.3. The Fund represents that it is currently qualified as a
Regulated Investment Company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), and that it will
make every effort to maintain such qualification (under
Subchapter M or any successor or similar provision) and that it
will notify the Company immediately upon having a reasonable
basis for believing that it has ceased to so qualify or that it
might no so qualify in the future.
2.4. The Company represents that the Contracts are currently
treated as endowment, annuity or life insurance contracts, under
applicable provisions of the Code and that it will make every
effort to maintain such treatment and that it will notify the
Fund and the Adviser immediately upon having a reasonable basis
for believing that the Contracts have ceased to be so treated or
that they might not be so treated in the future.
2.5. The Fund currently does not intend to make any payments
to finance distribution expenses pursuant to Rule 12b-1 under the
1940 Act or otherwise, although it may make such payments in the
future. To the extent that it decides to finance distribution
expenses pursuant to Rule 12b-1, the Fund undertakes to have a
board of directors, a majority of whom are not interested persons
of the Fund, formulate and approve any plan under Rule 12b-1 to
finance distribution expenses.
2.6. The Fund makes no representation as to whether any
aspect of its operations (including, but not limited to, fees and
expenses and investment policies) complies with the insurance
laws or regulations of the various states except that the Fund
and the Adviser represent that their respective operations are
and shall at all times remain in material compliance with the
laws of the State of _____________ to the extent required to
perform this Agreement.
2.7. The Fund represents that it is lawfully organized and
validly existing under the laws of the State of ____________ and
that it does and will comply in all material respects with the
1940 Act.
2.8. The Adviser represents and warrants that the Advisers
is and shall remain duly registered in all material respects
under all applicable federal and state laws and that the Adviser
shall perform its obligations for the Fund in compliance in all
material respects with the laws of the State of __________ and
any applicable state and federal securities laws.
2.9. The Fund and Adviser represent and warrant that all of
their directors, officers, employees, investment advisers, and
other individuals/entities dealing with the money and/or
securities of the Fund are and shall continue to be at all times
covered by a blanket fidelity bond or similar coverage for the
benefit of the Fund in an amount not less than the minimal
coverage as required currently by Rule 17g-1 of the 1940 Act or
related provisions as may be promulgated from time to time. The
aforesaid Bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding company.
2.10. The Company represents and warrants that all if
any of its directors, officers, employees, investment advisers,
and other individuals/entities deal with the money and/or
securities of the Fund they will at all such times be covered by
a blanket fidelity bond or similar coverage for the benefit of
the Fund, in an amount not less than the minimal coverage as
required by Rule 17g-1 of the 1940 Act or related provisions as
may be promulgated from time to time. The aforesaid Bond shall
include coverage for larceny and embezzlement and shall be issued
by a reputable bonding company.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. The Adviser and the Fund shall provide to the Company
such documentation (including a final copy of the Fund's most
current prospectus as set in type at the Fund's expense) and
other assistance as is reasonably necessary in order for the
Company once each year (or more frequently if the prospectus for
the Fund is amended) to have the prospectus for the Contracts
and the Portfolios' prospectus printed (such printing to be at
the Company's expense except as provided in Section 5.3 hereof).
3.2. The Fund's prospectus shall state that the Statement of
Additional Information ("SAI") for the Fund is available from the
Adviser (or in the Fund's discretion, the Prospectus shall state
that such SAI is available from the Fund), and the Adviser (or
the Fund), at its expense, shall print and provide one copy of
such SAI free of charge to the Company and to any owner of a
Contract or prospective owner who requests such Statement. The
Company may make additional copies of the SAI at its expense.
3.3. The Fund, at its expense, shall provide the Company
with copies of its proxy material, reports to shareholders, and
other communications to shareholders in such quantity as the
Company shall reasonably require for distributing to Contract
owners; provided, however, that the Company shall bear the
expenses for the costs of printing and distributing any proxy
material, reports to shareholders and other communications to
shareholders that are prepared at the request of the Company.
3.4. If and to the extent required by law the Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with
instructions received from
Contract owners; and
(iii) vote Fund shares for which no instructions
have been received in
the same proportion as Fund shares of such
Portfolio for which instructions have been
received;
so long as and to the extent that the SEC continues to interpret
the 1940 Act to require pass-through voting privileges for owners
of Variable Insurance Products. The Company reserves the right
to vote Fund shares held in any segregated asset account in its
own right, to the extent permitted by law. Participating
Insurance Companies shall be responsible for assuring that each
of their separate accounts participating in the Fund calculates
voting privileges in a manner consistent with this Section.
3.5. The Fund will comply with all provisions of the 1940
Act requiring voting by shareholders.
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be
furnished, to the Fund or its designee, each piece of sales
literature or other promotional material in which the Fund, the
Adviser, or the Fund's underwriter is named, at least ten
Business Days prior to its use. No such material shall be used
if the Fund or its designee object to such use within ten
Business Days after receipt of such material.
4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning
the Fund in connection with the sale of the Contracts other than
the information or representations contained in the registration
statement or prospectus for the Fund shares, as such registration
statement and prospectus may be amended or supplemented from time
to time, or in reports or proxy statements for the Fund, or in
sales literature or other promotional material approved by the
Fund or its designee or by the Adviser, except with the
permission of the Fund or the Adviser or the designee of either.
4.3. The Fund, and the Adviser, or its designee shall
furnish, or shall cause to be furnished, to the Company or its
designee, each piece of sales literature or other promotional
material in which the Company and/or its separate account(s), is
named at least ten Business Days prior to its use. No such
material shall be used if the Company or its designee object to
such use within ten Business Days after receipt of such material.
4.4. The Fund and the Adviser shall not give any information
or make any representations on behalf of the Company or
concerning the Company, each Account, or the Contracts other than
the information or representations contained in a registration
statement or prospectus for the Contracts, as such registration
statement and prospectus may be amended or supplemented from time
to time, or in published reports for each Account which are in
the public domain or approved by the Company for distribution to
Contract owners, or in sales literature or other promotional
material approved by the Company or its designee, except with the
permission of the Company.
4.5. The Fund will provide to the Company at least one
complete copy of all registration statements, prospectuses,
Statements of Additional Information, reports, proxy statements,
sales literature and other promotional materials, applications
for exemptions, requests for no-action letters, and all
amendments to any of the above, that relate to the Fund or its
shares, as soon as is reasonably practicable after the filing of
such document with the SEC or other regulatory authorities.
4.6. The Company will provide to the Fund at least one
complete copy of all registration statements, prospectuses,
Statements of Additional Information, annual and semi-annual
reports, solicitations for voting instructions, applications for
exemptions, requests for no action letters, and all amendments to
any of the above, that relate to the Contracts or each Account,
as soon as is reasonably practicable after the filing of such
document with the SEC or other regulatory authorities.
4.7. For purposes of this Article IV, the phrase "sales
literature or other promotional material" includes, but is not
limited to, advertisements (such as materials published, or
designed for use in a newspaper, magazine, or other periodical,
radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public
media), sales literature (i.e., any written communication
distributed or made generally available to customers or the
public, including brochures, circulars, research reports, market
letters, form letters, seminar texts, reprints or excerpts of any
other advertisement, sales literature, or published article),
educational or training materials or other communications
distributed or made generally available to some or all agents or
employees, and registration statements, prospectuses, Statements
of Additional Information, shareholder reports, and proxy
materials.
ARTICLE V. Fees and Expenses
5.1. The Fund and Adviser shall pay no fee or other
compensation to the Company under this Agreement, except that if
the Fund or any Portfolio adopts and implements a plan pursuant
to Rule 12b-1 to finance distribution expenses, then the
underwriter may make payments to the Company for the Contracts if
and in amounts agreed to by the Adviser in writing and such
payments will be made out of existing fees otherwise payable to
the Adviser, past profits of the Adviser or other resources
available to the Adviser, or by the Fund, to the extent
permitted. Currently, no such payments are contemplated.
5.2. All expenses incident to performance by the Fund under
this Agreement shall be paid by the Fund. Except as provided in
Sections 3.1, 3.2, 3.3., and 5.3 hereof, the Fund shall bear the
expenses for the cost of registration and qualification of the
Fund's shares, preparation and filing of the Fund's prospectus
and registration statement, proxy materials and reports, setting
the prospectus in type, setting in type and printing the proxy
materials and reports to shareholders (including, if so elected,
the costs of printing a prospectus that constitutes an annual
report), the preparation of all statements and notices required
by any federal or state law, all taxes on the issuance or
transfer of the Fund's shares.
5.3. The printing and distributing of the prospectus for the
Portfolios (or that portion of a prospectus relating to the
Portfolios should the Company determine to print a combined
prospectus) to existing owners of Contracts shall be at the
expense of the Fund.
ARTICLE VI. Diversification
6.1. Subject to the following sentence, the Fund will at all
times comply with Section 817(h) of the Code and Treasury
Regulation 1.817-5, relating to the diversification requirements
for variable annuity, endowment, or life insurance contracts and
any amendments or other modifications to such Section or
Regulation. In the event of any changes to such Section or
Regulation relating to the treatment of variable contracts, the
Company will advise the Fund of such changes.
ARTICLE VII. Potential Conflicts
7.1. The parties to this Agreement acknowledge that the Fund
has filed an application with the SEC to request an order (the
"Exemptive Order") granting relief from various provisions of the
1940 Act and the rules thereunder to the extent necessary to
permit Fund shares to be sold to and held by variable annuity and
variable life insurance separate accounts of both affiliated and
unaffiliated Participating Insurance Companies and Qualified
Plans. It is anticipated that the Exemptive Order, when and if
issued, shall require the Fund and each Participating Insurance
Company to comply with conditions and undertakings substantially
as provided in this Article VII. If the Exemptive Order imposes
conditions on the Company materially different from those
provided for in this Article VII, the conditions and undertakings
imposed by the Exemptive Order shall govern this Agreement. The
Fund will not enter into a participation agreement with any other
Participating Insurance Company unless it imposes the same
conditions and undertakings as are imposed on the Company hereby.
7.2. The Company will report any potential or existing
conflicts promptly to the Board, and in particular whenever
contract owner voting instructions are disregarded, and
recognizes that it shall be responsible for assisting the Board
in carrying out its responsibilities in connection with the
Exemptive Order. The Company agrees to carry out such
responsibilities with a view to the interests of contract owners.
7.3. If it is determined by a majority of the Board, or a
majority of its disinterested directors that a material
irreconcilable conflict exists, the Company and other
Participating Insurance Companies shall, at their expense and to
the extent reasonably practicable (as determined by a majority of
the disinterested trustees), take whatever steps are necessary to
remedy or eliminate the irreconcilable material conflict,
including but not limited to: (1) withdrawing the assets
allocable to some or all of the separate accounts from the Fund
or any Portfolio and reinvesting such assets in a different
investment medium, including (but not limited to) another
Portfolio of the Fund, or submitting the question whether such
segregation should be implemented, to a vote of all affected
Contract owners and, as appropriate, segregating the assets of
any group (i.e., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more Participating
Insurance Companies) that votes in favor of such segregation, or
offering to the affected contract owners the option of making
such a change; and (2) establishing a new registered management
investment company or managed separate account.
7.4. If a material irreconcilable conflict arises as a
result of a decision by the Company to disregard contract owner
voting instructions and said decision represents a minority
position or would preclude a majority vote by all contract owners
having an interest in the Fund, the Company may be required, at
the Board's election, to withdraw the Account's investment in the
Fund.
7.5. For purposes of this Article VII, a majority of the
disinterested directors shall determine whether or not any
proposed action adequately remedies any irreconcilable material
conflict, but in no event shall the Fund be required to bear the
expense of establishing a new funding medium for any Contract.
The Company shall not be required by this Article VII to
establish a new funding medium for any Contract if an offer to do
so has been declined by vote of a majority of the contract owners
materially adversely affected by the irreconcilable material
conflict. In the event that the Board determines that any
proposed action does not adequately remedy any irreconcilable
material conflict, then the Company will withdraw the Account's
investment in the Fund and terminate this Agreement within six
(6) months after the Board informs the Company in writing of the
foregoing determination, provided, however, that such withdrawal
and termination shall be limited to the extent required by any
such material irreconcilable conflict as determined by a majority
of the disinterested members of the Board.
7.6. If and to the extent that Rule 6e-2 and Rule 6e-3(T)
are amended, or Rule 6e-3 is adopted, to provide exemptive relief
from any provision of the Act or the rules promulgated thereunder
with respect to mixed or shared funding (as defined in the mixed
and Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Shared Funding
Exemptive Order, then (a) the Fund and/or the Participating
Insurance Companies, as appropriate, shall take such steps as may
be necessary to comply with Rules 6e-2 and 6e-3(T) as amended,
and Rule 6e-3, as adopted, to the extent such rules are
applicable; and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4, and
7.5 of this Agreement shall continue in effect only to the extent
that terms and conditions substantially identical to such
Sections are contained in such Rule(s) as so amended or adopted.
ARTICLE VIII. Indemnification
8.1. Indemnification by the Company
8.1(a). The Company agrees to indemnify and hold
harmless the Fund and each of its directors and
officers and each person, if any, who controls the Fund
within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes
of this Section 8.1) against any and all losses,
claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Company) or
litigation (including legal and other expenses), to
which the Indemnified Parties may become subject under
any statute, regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements
are related to the sale or acquisition of the Fund's
shares or the Contracts and:
(i) arise out of or are based upon any untrue
statements or alleged untrue statements of any
material fact contained in the Registration
Statement or prospectus for the Contract or
contained in the Contracts or sales literature for
the Contracts (or any amendment or supplement to
any of the foregoing), or arise out of or are
based upon the omission or the alleged omission to
state therein a material fact required to be
stated therein or necessary to make the statements
therein not misleading, provided that this
agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or
such alleged statement or omission was made in
reliance upon and in conformity with information
furnished to the Company by or on behalf of the
Fund for use in the Registration Statement or
prospectus for the Contracts or in the Contracts
or sales literature (or any amendment or
supplement) or otherwise for use in connection
with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or
representations contained in the Registration
Statement, prospectus or sales literature of the
Fund not supplied by the Company, or persons under
its control) or wrongful conduct of the Company or
persons under its control, with respect to the
sale or distribution of the Contracts or Fund
shares; or
(iii) arise out of any untrue statement or
alleged untrue statement of a material fact
contained in a Registration Statement, prospectus,
or sales literature of the Fund or any amendment
thereof or supplement thereto or the omission or
alleged omission to state therein a material fact
required to be stated therein or necessary to make
the statements therein not misleading if such a
statement or omission was made in reliance upon
information furnished to the Fund by or on behalf
of the Company; or
(iv) arise as a result of any failure by the
Company to provide the services and furnish the
materials under the terms of this Agreement; or
(v) arise out of or result from any material
breach of any representation and/or warranty made
by the Company in this Agreement or arise out of
or result from any other material breach of this
Agreement by the Company.
8.1(b). The Company shall not be liable under this
indemnification provision with respect to any losses,
claims, damages, liabilities or litigation incurred or
assessed against an Indemnified Party as such may arise
from such Indemnified Party's willful misfeasance, bad
faith, or gross negligence in the performance of such
Indemnified Party's duties or by reason of such
Indemnified Party's reckless disregard of obligations
or duties under this Agreement or to the Fund,
whichever is applicable.
8.1(c). The Company shall not be liable under this
indemnification provision with respect to any claim
made against an Indemnified Party unless such
Indemnified Party shall have notified the Company in
writing within a reasonable time after the summons or
other first legal process giving information of the
nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party
shall have received notice of such service on any
designated agent), but failure to notify the Company of
any such claim shall not relieve the Company from any
liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on
account of this indemnification provision. In case any
such action is brought against the Indemnified Parties,
the Company shall be entitled to participate, at its
own expense, in the defense of such action. The
Company also shall be entitled to assume the defense
thereof, with counsel satisfactory to the party named
in the action. After notice from the Company to such
party of the Company's election to assume the defense
thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and
the Company will not be liable to such party under this
Agreement for any legal or other expenses subsequently
incurred by such party independently in connection with
the defense thereof other than reasonable costs of
investigation.
8.1(d). The indemnification provided by this Section
8.1 shall survive the termination of this Agreement and
shall be in addition to any other liability the Company
may have.
8.2. Indemnification by the Adviser
8.2(a). The Adviser agrees to indemnify and hold
harmless the Company and each of its directors and
officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933
Act (collectively, the "Indemnified Parties" for
purposes of this Section 8.2) against any and all
losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the
Adviser) or litigation (including legal and other
expenses) to which the Indemnified Parties may become
subject under any statute, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or
settlements:
(i) arise out of or are based upon any untrue
statement or alleged untrue statement of any
material fact contained in the Registration
Statement or prospectus or sales literature of the
Fund (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein
a material fact required to be stated therein or
necessary to make the statements therein not
misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified
Party if such statement or omission or such
alleged statement or omission was made in reliance
upon and in conformity with information furnished
to the Adviser or Fund by or on behalf of the
Company for use in the Registration Statement or
prospectus for the fund or in sales literature (or
any amendment or supplement) or otherwise for use
in connection with the sale of the Contracts or
Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or
representations contained in the Registration
Statement, prospectus or sales literature for the
Contracts not supplied by the Adviser or persons
under its control) or wrongful conduct of the Fund
or Adviser or persons under their control; or
(iii) arise out of any untrue statement or
alleged untrue statement of a material fact
contained in a Registration Statement, prospectus
or sales literature covering the Contracts, or any
amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a
material fact required to be stated therein or
necessary to make the statement or statements
therein not misleading, if such statement or
omission was made in reliance upon information
furnished to the Company by or on behalf of the
Fund; or
(iv) arise as a result of (a) any failure by the
Fund to provide the services and furnish the
material under the terms of this Agreement; or (b)
a failure to comply with Article VI of this
Agreement with respect to diversification
requirements; or (c) failure to qualify as a
registered investment company under Subchapter M
of the Code; or
(v) arise out of or result from any material
breach of any representation and/or warranty made
by the Adviser or the Fund in this Agreement or
arise out of or result from any other material
breach of this Agreement by the Adviser or the
Fund.
8.2.(b). The Adviser shall not be liable under this
indemnification provision with respect to any losses,
claims, damages, liabilities or litigation to which an
Indemnified Party would otherwise be subject by reason
of such Indemnified Party's willful misfeasance, bad
faith, or gross negligence in the performance of such
Indemnified Party's duties or by reason of such
Indemnified Party's reckless disregard of obligations
and duties under this Agreement or to the Company or
Account, whichever is applicable.
8.2.(c). The Adviser shall not be liable under this
indemnification provision with respect to any claim
made against an Indemnified Party unless such
Indemnified Party shall have notified the Adviser in
writing within a reasonable time after the summons or
other first legal process giving information of the
nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party
shall have received notice of such service on any
designated again), but failure to notify the Adviser of
any such claim shall not relieve the Adviser from any
liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on
account of this indemnification provision. In case any
such action is brought against the Indemnified Parties,
the Adviser will be entitled to participate, at its own
expense, in the defense thereof. The Adviser also
shall be entitled to assume the defense thereof with
counsel satisfactory to the party named in the action.
After notice from the Adviser to such party of the
Adviser's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of
any additional counsel retained by it, and the Adviser
will not be liable to such party under this Agreement
for any legal or other expenses subsequently incurred
by such party independently in connection with the
defense thereof other than reasonable costs of
investigation.
8.2(d). The indemnification provided by this Section
8.2 shall survive the termination of this Agreement and
shall be in addition to any other liability the Fund or
Adviser may have.
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and the provisions
hereof interpreted under and in accordance with the laws of the
State of ___________.
9.2. This Agreement shall be subject to the provisions of
the 1933, 1934 and 1940 Acts, and the rules and regulations and
rulings thereunder, including such exemptions from those
statutes, rules and regulations as the SEC may grant (including,
but not limited to, the Shared Funding Exemptive Order) and the
terms hereof shall be interpreted and construed in accordance
therewith.
ARTICLE X. Term and Termination
10.1. This Agreement is effective as of the date hereof
and will remain in effect until terminated in accordance with the
provisions herein.
10.2. This Agreement shall terminate:
(a) at the option of any party upon 180 days advance
written notice to the other parties unless otherwise agreed in a
separate written agreement among the parties; or
(b) at the option of the Company if shares of the
Portfolios delineated in Schedule 2 are not reasonably available
to meet the requirements of the Contracts as determined by the
Company; provided, however, that such termination shall only
apply to the Portfolio(s) not reasonably available. Prompt
notice of the election to terminate for such cause shall be
furnished by the Company; or
(c) at the option of the Fund upon institution of
formal proceedings against the Company by the NASD, the SEC. the
insurance commission of any state or any other regulatory body
regarding the Company's duties under this Agreement or related to
the sale of the Contracts, the administration of the Contracts,
the operation of the Account, or the purchase of the Fund shares,
the expected or anticipated ruling, judgment or outcome of which
would, in the Fund's reasonable judgment, materially impair the
Company's ability to perform its obligation and duties hereunder;
or
(d) at the option of the Company upon institution of
formal proceedings against the Fund by the NASD, the SEC, or any
state securities or insurance department or any other regulatory
body, the expected or anticipated ruling, judgment or outcome of
which would, in the Company's reasonable judgment, materially
impair the Fund's ability to perform its obligations and duties
hereunder; or
(e) at the option of the Company or the Fund upon
receipt of any necessary regulatory approvals and/or the vote of
the contract owners having an interest in the Account (or any
subaccount) to substitute the shares of another investment
company for the corresponding Portfolio shares of the Fund in
accordance with the terms of the Contracts for which those
Portfolio shares had been selected to serve as the underlying
investment media. The Company will give 30 days' prior written
notice to the Fund of the date of any proposed vote or other
action taken to replace the Fund's shares; or
(f) at the option of the Company or the fund upon a
determination by a majority of the Fund Board, or a majority of
the disinterested Fund Board members, that an irreconcilable
material conflict exists among the interests of (i) all contract
owners of variable insurance products or all separate accounts or
(ii) the interests of the Participating Insurance Companies
investing in the Fund as delineated in Article VII of this
Agreement; or
(g) at the option of the Company if the Fund ceases to
qualify as a Regulated Investment Company under Subchapter M of
the Code, or under any successor or similar provision, or if the
Company reasonably believes that the Fund may fail to so qualify;
or
(h) at the option of the Company if the Fund fails to
meet the diversification requirements specified in Article VI
hereof; or
(i) at the option of any party to this Agreement, upon
another party's material breach of any provision of this
Agreement; or
(j) at the option of the Company, if the Company
determines in its sole judgment exercised in good faith, that
either the Fund or the Adviser has suffered a material adverse
change in its business, operations or financial condition since
the date of this Agreement or is the subject of material adverse
publicity and such material adverse change or material adverse
publicity is likely to have a material adverse impact upon the
business and operations of the Company; or
(k) at the option of the Fund or Adviser, if the Fund
or Adviser respectively, shall determine in its sole judgment
exercised in good faith, that the Company has suffered a material
adverse change in its business, operations or financial condition
since the date of this Agreement or is the subject of material
adverse publicity and such material adverse change or material
adverse publicity is likely to have a material adverse impact
upon the business and operations of the Fund or Adviser; or
(l) at the option of the fund in the event any of the
Contracts are not issued or sold in accordance with applicable
federal and/or state law. Termination shall be effective
immediately upon such occurrence without notice; or
(m) automatically upon its assignment by any party
without the other parties' prior written consent; or
(n) in the event the Fund's shares are not registered,
issued or sold in accordance with applicable state or federal
law, or such law precludes the use of such shares for the
underlying investment medium of variable contracts issued or to
be issued by the Company. Termination shall be effective
immediately upon such occurrence without notice.
10.3. Notice Requirement
(a) In the event that any termination of this
Agreement is based upon the provisions of Article VII such prior
written notice shall be given in advance of the effective date of
termination as required by such provisions.
(b) In the event that any termination of this
Agreement is based upon the provisions of Sections 10.2(b) - (d)
or 10.2(g) - (i), prior written notice of the election to
terminate this Agreement for cause shall be furnished by the
party terminating the Agreement to the non-terminating parties,
with said termination to be effective upon receipt of such notice
by the non-terminating parties.
(c) In the event that any termination of this
Agreement is based upon the provisions of Sections 10.2(j) or
10.2(k), prior written notice of the election to terminate this
Agreement for cause shall be furnished by the party terminating
this Agreement to the non-terminating parties. Such prior
written notice shall be given by the party terminating this
Agreement to the non-terminating parties at least 30 days before
the effective date of termination.
10.4. It is understood and agreed that the right to
terminate this Agreement pursuant to Section 10.2(a) may be
exercised for any reason or for no reason.
10.5. Effect of Termination
(a) Notwithstanding any termination of this Agreement
pursuant to Section 10.2 of this Agreement, the Fund may, at its
option, or in the event of termination of this Agreement by the
Fund or the Adviser pursuant to Section 10.2(a) of this
Agreement, the Company may require the Fund and the Adviser to,
continue to make available additional shares of the Fund for so
long after the termination of this Agreement as the Fund or the
Company, if the Company is so requiring, desires pursuant to the
terms and conditions of this Agreement as provided in paragraph
(b) below for all Contracts in effect on the effective date of
termination of this Agreement (hereinafter referred to as
"Existing Contracts"). Specifically, without limitation, if the
Fund or if the Company is so requiring, the owners of the
Existing Contracts shall be permitted to reallocate investments
in the Fund, redeem investments in the Fund and/or invest in the
fund upon the making of additional purchase payments under the
Existing Contracts. The parties agree that this Section 10.5
shall not apply to any terminations under Article VII and the
effect of such Article VII terminations shall be governed by
Article VII of this Agreement.
(b) In the event of a termination of this Agreement
pursuant to Section 10.2 of this Agreement, the Fund shall
promptly notify the Company whether the Fund will continue to
make available shares of the Fund after such termination, except
that, with respect to a termination by the Fund or the Adviser
pursuant to Section 10.2(a) of this Agreement, the Company shall
promptly notify the Fund whether it wishes the Fund to continue
to make available additional shares of the Fund. If shares of
the Fund continue to be made available after such termination,
the provisions of this Agreement shall remain in effect except
for Section 10.2(a) and thereafter the Fund or the Company may
terminate the Agreement, as so continued pursuant to this Section
10.5 upon written notice to the other party, such notice to be
for a period that is reasonable under the circumstances.
(c) In determining whether to make available
additional Fund shares, the Fund shall act in good faith, giving
due consideration to the interest of the existing shareholders,
including holders of the Existing Contracts.
10.6. Except (a) as necessary to implement contract
owner initiated or approved transactions, or (b) as required by
state insurance laws or regulations (a "Legally Required
Redemption"), the Company shall not redeem Fund shares
attributable to the Contracts (as opposed to Fund shares
attributable to the Company's assets held in the Account), and
the Company shall not prevent contract owners from allocating
payments to a Portfolio that was otherwise available under the
Contracts, until 90 days after the Company shall have notified
the Fund or Adviser of its intention to do so. Upon request, the
Company will promptly furnish to the Fund and Adviser the opinion
of counsel for the company (which counsel shall be reasonably
satisfactory to the Fund and the Adviser) to the effect that a
particular redemption is a Legally Required Redemption.
ARTICLE XI. Notices
Any notice shall be sufficiently given when sent by
registered or certified mail to the other party at the address of
such party set forth below or at such other address as such party
may from time to time specify in writing to the other party.
If to the Fund:
Firm
Address
City, State, Zip
Attn:__________________
If to the Company:
Golden American Life Insurance Company of New York
1001 Jefferson Street, Suite 400
Wilmington, DE 19801
Attn: Myles R. Tashman, Secretary
If to the Adviser:
Firm Name
Address
City, State, Zip
Attn:__________________
ARTICLE XII. Miscellaneous
12.1. All persons dealing with the Fund must look solely
to the property of the Fund for the enforcement of any claims
against the Fund as neither the Board, officers, agents or
shareholders assume any personal liability for obligations
entered into on behalf of the Fund.
12.2. Subject to the requirement of legal process and
regulatory authority, each party hereto shall treat as if
confidential the names and addresses of the owners of the
Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as
permitted by this Agreement, shall not disclose, disseminate or
utilize such names and addresses and other confidential
information until such time as it may come into the public domain
without the express written consent of the affected party.
12.3. The captions in this Agreement are included for
convenience of reference only and in no way define or delineate
any of the provisions hereof or otherwise affect their
construction or effect.
12.4. This Agreement may be executed simultaneously in
two or more counterparts, each of which taken together shall
constitute one and the same instrument.
12.5. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise,
the remainder of the Agreement shall not be affected thereby.
12.6. Each party hereto shall cooperate with each other
party and all appropriate governmental authorities (including
without limitation, the SEC, the NASD, and state insurance
regulators) and shall permit such authorities reasonable access
to its books and records in connection with any investigation or
inquiry relating to this Agreement or the transactions
contemplated hereby.
12.7. The rights, remedies and obligations contained in
this Agreement are cumulative and are in addition to any and all
rights, remedies and obligations, at law or in equity, which the
parties hereto are entitled to under state and federal laws.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be executed in its name and on its behalf by
its duly authorized representative and its seal to be hereunder
affixed hereto as of the date specified below.
GOLDEN AMERICAN LIFE FUND
INSURANCE COMPANY OF By its authorized officer
NEW YORK
By its authorized officer
By:______________________ By:__________________________
Title:____________________ Title:________________________
Date:____________________ Date:________________________
ADVISER
By its authorized officer officer
By:______________________
Title:____________________
Date:____________________
<PAGE>
SCHEDULE A
Golden American Life Insurance Company of New York
Separate Account B
SCHEDULE B
Fund:
Portfolios:
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
230 Park Avenue, Suite 966, New York, NY 10169
March 17, 1997
Board of Directors
First Golden American Life Insurance
Company of New York
230 Park Avenue, Suite 966
New York, NY 10169
Gentlemen:
In my capacity as Executive Vice President and Secretary of
First Golden American Life Insurance Company of New York
("First GOlden"), I have examined the form of Registration
Statement on Form N-4 to be filed by you with the Securities
and Exchange Commission in connection with the registration
under the Securities Act of 1933, as amended, of an indefinite
number of units of interest in Separate Account NY-B of
First Golden (the "Account"). I am familiar with the
proceedings taken and propesed to be taken in connection with
the authorization, issuance and sale of the units.
Based upon my examination and upon my knowledge of the corporate
activities relating to the Account, it is my opinion that:
(1) The Company was organized in accordance with the
laws of the State of New York and is a duly authorized
stock life insurance company under the laws of Ney York and
the laws of those states in which the Company is admitted
to do business;
(2) The Account is a validly established separate investment
account of the Company;
(3) The portion of the assets to be held in the Account equals
the reserve and other liabilities for variable benefits
under variable annuity contracts to be issued by the Account.
Such assets are not chargeale with liabilities arising out of
an other business First Golden conducts;
(4) The units and the variable annuity contracts will, when
issued and sold in the manner described in the Registration
Statement, be legal and binding obligations of First Golden
and will be legall and validly issued, fully paid, and
non assessable.
I hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and to the
reference to my name under the caption "Legal Matters" in the
prospectus contained in said registration statement. In
giving this consent I do not thereby admit that I come
within the category of persons whose consent is required
under section 7 of the Securities Act of 1933 or the Rules
and Regulations of the Securities and Exchange Commission
thereunder.
Sincerely,
/s/ Myles R. Tashman
Myles R. Tashman
Executive Vice President, General Counsel
and Secretary
<PAGE>
<PAGE>
SUTHERLAND, ASBILL & BRENNAN, L.L.P.
Atlanta o Austin o New York o Washington
1275 PENNSYLVANIA AVENUE, N.W. TEL: (202) 383-0100
WASHINGTON, D.C. 20004-2404 FAX: (202) 637-3593
STEPHEN E. ROTH
DIRECT LINE: (202) 383-0158
Internet: [email protected]
March 11, 1997
VIA EDGARLINK
- -------------
Board of Directors
First Golden American Life Insurance Company of New York
230 Park Avenue, Suite 966
New York, NY 10017
Ladies and Gentlemen:
We hereby consent to the reference to our name under the
caption "Legal Matters" in the Prospectus filed as part of the
Pre-Effective Amendment No. 1 to the registration statement on
Form N-4 for the Separate Account NY-B (File No. 333-16501). In
giving this consent, we do not admit that we are in the category
of persons whose consent is required under Section 7 of the
Securities Act of 1933.
Very truly yours,
SUTHERLAND, ASBILL & BRENNAN
By: /s/Stephen E. Roth
------------------
Stephen E. Roth
<PAGE>
<PAGE>
Exhibit 10(b) - Consent of Ernst & Young LLP, Independent Auditors
We consent to the reference to our firm under the captions
"Independent Auditors", "Experts", and "Financial Statements" and to
the use of our report dated January 24, 1997, with respect to the
financial statements of First Golden American Life Insurance Company
of New York included in the DVA Plus Deferred Combination Variable
and Fixed Annuity Prospectus and in the PrimElite Deferred
Combination Variable and Fixed Annuity Prospectus, in Pre-Effective
Amendment No. 1 to the Registration Statement (Form N-4 No.
333-16501) and related Prospectus of Separate Account NY-B.
Our audit also included the financial statement schedule of First
Golden American Life Insurance Company of New York included in Item
24(a)(2). This schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion based on our
audit. In our opinion, the financial statement schedule referred to
above, when considered in relation to the basic financial statements
taken as a whole, presents fairly in all material respects the
information set forth therein.
/s/ Ernst & Young LLP
Des Moines, Iowa
March 14, 1997
<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 and Treasurer
(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, her true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution for her in her 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 she
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: March 7, 1997
------------------
/s/ Mary Bea Wilkinson
----------------------
Mary Bea Wilkinson
Senior Vice President and
Treasurer (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
------------------
/s/ Roger R. Martin
----------------------
Roger R. Martin
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: November 18, 1996
------------------
/s/ Andrew Kalinowski
----------------------
Andrew Kalinowski
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: March 11, 1997
------------------
/s/ Frederick S. Hubbell
------------------------
Frederick S. Hubbell
Director
<PAGE>
<PAGE>
