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As filed with the Securities and Exchange Commission on April 29, 1999
Registration Nos. 333-16501, 811-7935
___________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-4
Registration Statement under
The Securities Act of 1933
Pre-Effective Amendment No. ___
Post Effective Amendment No. 3
and/or
Registration Statement under
The Investment Company Act of 1940
Amendment No. 4
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 10169-0999
(212) 973-9647
(Address and Telephone Number of Depositor's Principal Offices)
Marilyn Talman, Esq. COPY TO:
First Golden American Life Insurance Stephen E. Roth, Esq.
Company of New York Sutherland Asbill &
1475 Dunwoody Drive Brennan LLP
West Chester, PA 19380 1275 Pennsylvania Avenue, N.W.
(610) 425-3516 Washington, D.C. 20004-2404
(Name and Address of Agent for Service of Process)
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
A soon as practical after the effective date of the Registration Statement
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE:
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[x] on April 30, 1999 pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
[ ] on _________ pursuant to paragraph (a)(1) of Rule 485
IF APPROPRIATE, CHECK THE FOLLOWING BOX:
[ ] this Post-Effective Amendment designates a new effective date for
a previously filed Post-Effective Amendment.
TITLE OF SECURITIES BEING REGISTERED:
Deferred Combination Variable and Fixed Annuity Contracts
___________________________________________________________________________
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PART A
EXPLANATORY NOTE
The Contracts covered by this Registration Statement are
being offered through two different distribution systems.
Therefore, there are two Prospectuses and corresponding
Statements of Additional Information ("Version 1" and
"Version 2") for the Contracts covered by this
registration statement, one pertaining to each
distribution system. Version 2 differs from Version 1 in
the following respects: (a) Version 2 offers different
variable funding options; and (b) Version 2, which is no
longer being offered, was used by a different retail
distribution system, receiving different compensation,
than is the case for Version 1. Both versions contain
the same features and options other than the variable
funding options. In particular, Version 1 and Version 2
include the market value adjusted fixed account option
and covered by an effective registration statement on
Form S-1 (File No. 333-16279).
This Post-Effective Amendment includes the text of both
Version 1 and Version 2 of the Prospectus.
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FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B OF FIRST GOLDEN AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK
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PROFILE OF
GOLDENSELECT DVA PLUS
FIXED AND VARIABLE ANNUITY CONTRACT
MAY 1, 1999
[inset within shaded block]
This Profile is a summary of some of the more important points
that you should know and consider before purchasing the Contract.
The Contract is more fully described in the full prospectus which
accompanies this Profile. Please read the prospectus carefully.
[end inset within shaded block]
[end shaded block]
1.THE ANNUITY CONTRACT
The Contract offered in this prospectus is a deferred combination
variable and fixed annuity contract between you and First Golden
American Life Insurance Company of New York. The Contract provides a
means for you to invest on a tax-deferred basis in (i) one or more of
22 mutual fund investment portfolios through our Separate Account NY-
B listed on the next page and/or (ii) in a fixed account of First
Golden with guaranteed interest periods. We set the interest rates
in the fixed account (which will never be less than 3%) periodically.
We currently offer guaranteed interest periods of 1, 3, 5, 7 and 10
years. We may credit a different interest rate for each interest
period. The interest you earn in the fixed account as well as your
principal is guaranteed by First Golden as long as you do not take
your money out before the maturity date for the interest period. We
will apply a market value adjustment if you withdraw your money from
the fixed account more than 30 days before the applicable maturity
date. The investment portfolios are designed to offer a better
return than the fixed account. However, this is NOT guaranteed. You
may not make any money, and you can even lose the money you invest.
The Contract, like all deferred variable annuity contracts, has two
phases: the accumulation phase and the income phase. The
accumulation phase is the period between the contract date and the
date on which you start receiving the annuity payments under your
Contract. The amounts you accumulate during the accumulation phase
will determine the amount of annuity payments you will receive. The
income phase begins when you start receiving regular annuity payments
from your Contract on the annuity start date.
You determine (1) the amount and frequency of premium payments, (2)
the investments, (3) transfers between investments, (4) the type of
annuity to be paid after the accumulation phase, (5) the beneficiary
who will receive the death benefits, (6) the type of death benefit,
and (7) the amount and frequency of withdrawals.
2.YOUR ANNUITY PAYMENTS (THE INCOME PHASE)
Annuity payments are the periodic payments you will begin receiving
on the annuity start date. You may choose one of the following
annuity payment options:
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[Table with Shaded Heading]
Annuity Options
|------------------------------------------------------------------------|
| Option 1 Income for a Payments are made for a specified |
| fixed period number of years to you |
| or your beneficiary. |
|------------------------------------------------------------------------|
| Option 2 Income for Payments are made for the rest of |
| life with a your life or longer for a specified |
| period certain period such as 10 or 20 years or |
| until the total amount used to buy |
| this option has been repaid. This |
| option comes with an added guarantee|
| that payments will continue to your |
| beneficiary for the remainder of |
| period if you should die during the |
| period. |
|------------------------------------------------------------------------|
| Option 3 Joint life income Payments are made for your life |
| and the life of another person |
| (usually your spouse). |
|------------------------------------------------------------------------|
| Option 4 Annuity plan Any other annuitization plan that we|
| choose to offer on the annuity |
| start date. |
|------------------------------------------------------------------------|
Annuity payments under Options 1, 2 and 3 are fixed. Annuity
payments under Option 4 may be fixed or variable. Once you elect an
annuity option and begin to receive payments, it cannot be changed.
3.PURCHASE (BEGINNING OF THE ACCUMULATION PHASE)
You may purchase the Contract with an initial payment of $10,000 or
more ($1,500 for a qualified Contract) up to and including age 85.
You may make additional payments of $500 or more ($250 for a
qualified Contract) at any time before you turn 85. Under certain
circumstances, we may waive the minimum initial and additional
premium payment requirement. Any initial or additional premium
payment that would cause the contract value of all annuities that you
maintain with us to exceed $1,000,000 requires our prior approval.
Who may purchase this Contract? The Contract may be purchased by
individuals as part of a personal retirement plan (a "non-qualified
Contract"), or as a Contract that qualifies for special tax treatment
when purchased as either an Individual Retirement Annuity (IRA) or in
connection with a qualified retirement plan (each a "qualified
Contract").
The Contract is designed for people seeking long-term tax-deferred
accumulation of assets, generally for retirement or other long-term
purposes. The tax-deferred feature is more attractive to people in
high federal and state tax brackets. You should not buy this
Contract if you are looking for a short-term investment or if you
cannot risk getting back less money than you put in.
4.THE INVESTMENT PORTFOLIOS
You can direct your money into: (1) the fixed account with guaranteed
interest periods of 1, 3, 5, 7 and 10 years, and/or (2) into any one
or more of the following 22 mutual fund investment portfolios through
our Separate Account NY-B. The investment portfolios are described
in the prospectuses for the GCG Trust and the PIMCO Variable
Insurance Trust. Keep in mind that any amount you direct into the
fixed account earns a fixed interest rate. But if you invest in any
of the following investment portfolios, depending on market
conditions, you may make or lose money:
<TABLE>
<S> <C> <C>
THE GCG TRUST
Liquid Asset Series Growth & Income Series Small Cap Series
Limited Maturity Bond Series Growth Series Real Estate Series
Global Fixed Income Series Value Equity Series Hard Assets Series
Total Return Series Research Series Managed Global Series
Equity Income Series Strategic Equity Series Developing World Series
Fully Managed Series Capital Appreciation Series Emerging Markets Series
Rising Dividends Series Mid-Cap Growth Series
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THE PIMCO TRUST
PIMCO High Yield Bond Portfolio
PIMCO StocksPLUS Growth and Income Portfolio
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5.EXPENSES
The Contract has insurance features and investment features, and
there are costs related to each. The Company deducts an annual
contract administrative charge of $30. We also collect a mortality
and expense risk charge and an asset-based administrative charge.
These 2 charges are deducted daily directly from the amounts in the
investment portfolios. The asset-based administrative charge is
0.15% annually. The annual rate of the mortality and expense risk
charge depends on the death benefit you choose:
STANDARD ANNUAL RATCHET ENHANCED
DEATH BENEFIT DEATH BENEFIT
Mortality & Expense Risk Charge.... 1.10% 1.25%
Asset-Based Administrative Charge.. 0.15% 0.15%
----- -----
Total.......................... 1.25% 1.40%
Each investment portfolio has charges for investment management fees
and other expenses. These charges, which vary by investment
portfolio, currently range from 0.59% to 1.83% annually (see
following table) of the portfolio's average daily net asset balance.
If you withdraw money from your Contract, or if you begin receiving
annuity payments, we may deduct a premium tax of 0%-3.5% to pay to
your state.
We deduct a surrender charge if you surrender your Contract or
withdraw an amount exceeding the free withdrawal amount. The free
withdrawal amount in any year is 15% of your contract value on the
date of the withdrawal less any prior withdrawals during that
contract year. The following table shows the schedule of the
surrender charge that will apply. The surrender charge is a percent
of each premium payment.
COMPLETE YEARS ELAPSED 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7+
SINCE PREMIUM PAYMENT | | | | | | |
SURRENDER CHARGE 7% | 6% | 5% | 4% | 3% | 2% | 1% | 0%
The following table is designed to help you understand the Contract
charges. The "Total Annual Insurance Charges" column includes the
maximum mortality and expense risk charge, the asset-based
administrative charge, and reflects the annual contract
administrative charge as 0.04% (based on an average contract value of
$70,000). The "Total Annual Investment Portfolio Charges" column
reflects the portfolio charges for each portfolio and are based on
actual expenses as of December 31, 1998, except for portfolios that
commenced operations during 1998 where the charges have been
annualized. The column "Total Annual Charges" reflects the sum of
the previous two columns. The columns under the heading "Examples"
show you how much you would pay under the Contract for a 1-year
period and for a 10-year period.
As required by the Securities and Exchange Commission, the examples
assume that you invested $1,000 in a Contract that earns 5% annually
and that you withdraw your money at the end of Year 1 or at the end
of Year 10. For Years 1 and 10, the examples show the total annual
charges assessed during that time and assume that you have elected
the Annual Ratchet Enhanced Death Benefit. For these examples, the
premium tax is assumed to be 0%.
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[Table with shaded heading and shaded lines for readability]
TOTAL ANNUAL EXAMPLES:
TOTAL ANNUALINVESTMENT TOTAL TOTAL CHARGES AT THE END OF:
INSURANCE PORTFOLIO ANNUAL
INVESTMENT PORTFOLIOCHARGES CHARGES CHARGES 1 YEAR 10 YEARS
THE GCG TRUST
Liquid Asset 1.44% 0.59% 2.03% $90.63 $235.53
Limited Maturity 1.44% 0.60% 2.04% $90.73 $236.58
Bond
Global Fixed Income 1.44% 1.60% 3.04% $100.73 $335.45
Total Return 1.44% 0.97% 2.41% $94.44 $274.41
Equity Income 1.44% 0.98% 2.42% $94.54 $275.41
Fully Managed 1.44% 0.98% 2.42% $94.54 $275.41
Rising Dividends 1.44% 0.98% 2.42% $94.54 $275.41
Growth & Income 1.44% 1.08% 2.52% $95.54 $185.37
Growth 1.44% 1.09% 2.53% $95.64 $286.36
Value Equity 1.44% 0.98% 2.42% $94.54 $275.41
Research 1.44% 0.94% 2.38% $94.14 $271.40
Strategic Equity 1.44% 0.99% 2.43% $94.64 $276.41
CapitalAppreciation 1.44% 0.98% 2.42% $94.54 $275.41
Mid-Cap Growth 1.44% 0.95% 2.39% $94.52 $272.40
Small Cap 1.44% 0.99% 2.43% $94.64 $276.41
Real Estate 1.44% 0.99% 2.43% $94.64 $276.41
Hard Assets 1.44% 1.00% 2.44% $94.74 $277.41
Managed Global 1.44% 1.26% 2.70% $97.34 $303.03
Developing World 1.44% 1.83% 3.27% $103.01 $356.70
Emerging Markets 1.44% 1.83% 3.27% $103.01 $356.70
THE PIMCO TRUST
PIMCO High Yield 1.44% 0.75% 2.19% $92.23 $252.10
Bond
PIMCO StocksPLUS
Growth and Income 1.44% 0.65% 2.09% $91.23 $241.78
The "Total Annual Investment Portfolio Charges" reflect current
expense reimbursements for the Total Return and Global Fixed Income
portfolio. The Year 1 examples above include a 7% surrender charge.
For more detailed information, see the fee table in the prospectus
for the Contract.
6.TAXES
Under a qualified Contract, your premiums are generally pre-tax
contributions and accumulate on a tax-deferred basis. Premiums and
earnings are generally taxed as income when you make a withdrawal or
begin receiving annuity payments, presumably when you are in a lower
tax bracket.
Under a non-qualified Contract, premiums are paid with after-tax
dollars, and any earnings will accumulate tax-deferred. You will be
taxed on these earnings, but not on premiums, when you withdraw them
from the Contract.
For owners of most qualified Contracts, when you reach age 70 1/2
(or, in some cases, retire), you will be required by federal tax laws
to begin receiving payments from your annuity or risk paying a
penalty tax. In those cases, we can calculate and pay you the
minimum required distribution amounts. If you are younger than 59
1/2 when you take money out, in most cases, you will be charged a 10%
federal penalty tax on the amount withdrawn.
7.WITHDRAWALS
You can withdraw your money at any time during the accumulation
phase. You may elect in advance to take systematic withdrawals which
are described on page 7. Withdrawals above the free withdrawal
amount may be subject to a surrender charge. We will apply a market
value adjustment if you withdraw your money from
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the fixed account more than 30 days before the applicable maturity date.
Income taxes and a penalty tax may apply to amounts withdrawn.
8.PERFORMANCE
The value of your Contract will fluctuate depending on the investment
performance of the portfolio(s) you choose. The following chart
shows average annual total return for each portfolio that was in
operation for the entire year for 1998. These numbers reflect the
deduction of the mortality and expense risk charge (based on the
Annual Ratchet Enhanced Death Benefit), the asset-based
administrative charge and the annual contract fee, but do not reflect
deductions for any withdrawal charges. If withdrawal charges were
reflected, they would have the effect of reducing performance.
Please keep in mind that past performance is not a guarantee of
future results.
CALENDAR YEAR
INVESTMENT PORTFOLIO 1998
Managed by A I M Capital Management, Inc.
Capital Appreciation(1) 11.06
Strategic Equity(2 (0.61)
Managed by T. Rowe Price Associates, Inc.
Fully Managed 4.37
Equity Income(2) 6.70
Managed by Kayne Anderson Investment Management, LLC
Rising Dividends 12.50
Managed by EII Realty Securities, Inc.
Real Estate (14.70)
Managed by Eagle Asset Management, Inc.
Value Equity 0.09
Managed by Fred Alger Management, Inc.
Small Cap 19.25
Managed by Putnam Investment Management, Inc.
Emerging Markets (25.20)
Managed Global 27.46
Managed by ING Investment Management, LLC
Limited Maturity Bond 5.33
Liquid Asset 3.54
Managed by Pacific Investment Management Company
PIMCO High Yield Bond --
PIMCO StocksPLUS Growth and Income --
Managed by Alliance Capital Management L.P.
Growth & Income(2) 10.36
Managed by Janus Capital Corporation
Growth(2) 25.01
Managed by Massachusetts Financial Services Company
Mid-Cap Growth 21.05
Total Return 9.99
Research 21.29
Managed by Baring International Investment Limited
Global Fixed Income 10.25
Hard Assets(2) (30.61)
Developing World(2) --
_________________________
(1)Prior to April 1, 1999, a different firm managed the
Portfolio.
(2)Prior to March 1, 1999, a different firm managed the
Portfolio.
9.DEATH BENEFIT
You may choose (i) the Standard Death Benefit, or (ii) the Annual
Ratchet Enhanced Death Benefit. The Annual Ratchet Enhanced Death
Benefit is available only if the contract owner or the annuitant (if
the contract owner is not an individual) is not more than 79 years
old at the time of purchase. The Annual Ratchet Enhanced Death
Benefit may not be available where a Contract is held by joint owners.
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The death benefit is payable when the first of the following persons
dies: the contract owner, joint owner, or annuitant (if a contract
owner is not an individual). Assuming you are the contract owner, if
you die during the accumulation phase, your beneficiary will receive
a death benefit unless the beneficiary is your surviving spouse and
elects to continue the Contract. The death benefit paid depends on
the death benefit you have chosen. The death benefit value is
calculated at the close of the business day on which we receive due
proof of death at our Customer Service Center. If your beneficiary
elects to delay receipt of the death benefit until a date after the
time of your death, the amount of the benefit payable in the future
may be affected. If you die after the annuity start date and you
are the annuitant, your beneficiary will receive the death benefit
you chose under the annuity option then in effect.
The death benefit may be subject to certain mandatory distribution
rules required by federal tax law.
Under the STANDARD DEATH BENEFIT, if you die before the annuity start
date, your beneficiary will receive the greatest of:
1)the contract value;
2)the total premium payments made under the Contract after
subtracting any withdrawals; or
3)the cash surrender value.
Under the ANNUAL RATCHET ENHANCED DEATH BENEFIT, if you die before
the annuity start date, your beneficiary will receive the greatest
of:
1)the contract value;
2)the total premium payments made under the Contract after
subtracting any withdrawals;
3)the cash surrender value; or
4)the enhanced death benefit, which is determined as follows: On
each contract anniversary that occurs on or before the
contract owner turns age 80, we compare the prior enhanced
death benefit to the contract value and select the larger
amount as the new enhanced death benefit. On all other days,
the enhanced death benefit is the following amount: On a daily
basis we first take the enhanced death benefit from the
preceding day (which would be the initial premium if the
preceding day is the contract date), then we add additional
premiums paid since the preceding day, and then we subtract
any withdrawals made since the preceding day (including any
market value adjustment applied to such withdrawal), and then
we subtract for any associated surrender charges. That amount
becomes the new enhanced death benefit.
Note:In all cases described above, amounts could be reduced by
premium taxes owed and withdrawals not previously deducted.
10.OTHER INFORMATION
FREE LOOK. If you cancel the Contract within 10 days after you
receive it, you will receive a full refund of your contract value.
For purposes of the refund during the free look period, your contract
value includes a refund of any charges deducted from your contract
value. Because of the market risks associated with investing in the
portfolios, the contract value returned may be greater or less than
the premium payment you paid. We determine your contract value at
the close of business on the day we receive your written refund
request.
TRANSFERS AMONG INVESTMENT PORTFOLIOS AND THE FIXED ACCOUNT. You
can make transfers among your investment portfolios and your
investment in the fixed account as frequently as you wish without any
current tax implications. The minimum amount for a transfer is $100.
Currently there is no charge for transfers, and we do not limit the
number of transfers allowed. The Company may, in the future, charge
a $25 fee for any transfer after the twelfth transfer in a contract
year or limit the number of transfers allowed. Keep in mind that if
you transfer or otherwise withdraw your money from the fixed account
more than 30
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days before the applicable maturity date, we will apply
a market value adjustment. A market value adjustment could increase
or decrease your contract value and/or the amount you transfer or
withdraw.
NO PROBATE. In most cases, when you die, the person you choose as
your beneficiary will receive the death benefit without going through
probate.
ADDITIONAL FEATURES. This Contract has other features you may be
interested in. These include:
Dollar Cost Averaging. This is a program that allows you to
invest a fixed amount of money in the investment portfolios each
month, which may give you a lower average cost per unit over
time than a single one-time purchase. Dollar cost averaging
requires regular investments regardless of fluctuating price
levels, and does not guarantee profits or prevent losses in a
declining market. This option is currently available only if
you have $1,200 or more in the Limited Maturity Bond or the
Liquid Asset investment portfolios or in the fixed account with
a 1-year guaranteed interest period. Transfers from the fixed
account under this program will not be subject to a market value
adjustment.
Systematic Withdrawals. During the accumulation phase, you
can arrange to have money sent to you at regular intervals
throughout the year. Within limits these withdrawals will not
result in any withdrawal charge. Withdrawals from your money in
the fixed account under this program are not subject to a market
value adjustment. Of course, any applicable income and penalty
taxes will apply on amounts withdrawn.
Automatic Rebalancing. If your contract value is $10,000 or
more, you may elect to have the Company automatically readjust
the money between your investment portfolios periodically to
keep the blend you select. Investments in the fixed account are
not eligible for automatic rebalancing.
11.INQUIRIES
If you need more information after reading this prospectus, please
contact us at:
CUSTOMER SERVICE CENTER
230 PARK AVENUE, SUITE 966
NEW YORK, NEW YORK 10169
(800) 963-9539
or your registered representative.
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[begin shaded block]
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B OF FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY
OF NEW YORK
MAY 1, 1999
DEFERRED COMBINATION VARIABLE AND FIXED ANNUITY PROSPECTUS
GOLDENSELECT DVA PLUS
[end shaded block]
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This prospectus describes GoldenSelect DVA Plus, an individual
deferred variable annuity contract (the "Contract") offered by First
Golden American Life Insurance Company of New York (the "Company,"
"we" or "our"). The Contract is available in connection with certain
retirement plans that qualify for special federal income tax
treatment ("qualified Contracts") as well as those that do not
qualify for such treatment ("non-qualified Contracts").
The Contract provides a means for you to invest your premium payments
in one or more of 22 mutual fund investment portfolios. You may also
allocate premium payments to our Fixed Account with guaranteed
interest periods. Your contract value will vary daily to reflect the
investment performance of the investment portfolio(s) you select and
any interest credited to your allocations in the Fixed Account. The
investment portfolios available under your Contract and the portfolio
managers are:
T. ROWE PRICE ASSOCIATES, INC. ALLIANCE CAPITAL MANAGEMENT L.P.
Fully Managed Series Growth & Income Series
Equity Income Series JANUS CAPITAL CORPORATION
A I M CAPITAL MANAGEMENT, INC. Growth Series
Capital Appreciation Series MASSACHUSETTS FINANCIAL SERVICES COMPANY
Strategic Equity Series Mid-Cap Growth Series
KAYNE ANDERSON INVESTMENT Total Return Series
MANAGEMENT, LLC Research Series
Rising Dividends Series ING INVESTMENT MANAGEMENT, LLC
EII REALTY SECURITIES, INC. (AN AFFILIATE)
Real Estate Series Limited Maturity Bond Series
BARING INTERNATIONAL INVESTMENT Liquid Asset Series
LIMITED(AN AFFILIATE) PACIFIC INVESTMENT MANAGEMENT COMPANY
Hard Assets Series PIMCO High Yield Bond Portfolio
Developing World Series PIMCO StocksPLUS Growth and
Global Fixed Income Series Income Portfolio
EAGLE ASSET MANAGEMENT, INC. PUTNAM INVESTMENT MANAGEMENT, INC.
Value Equity Series Emerging Market Series
FRED ALGER MANAGEMENT, INC. Managed Global Series
Small Cap Series
The above mutual fund investment portfolios are purchased and held by
corresponding divisions of our Separate Account NY-B. We refer to
the divisions as "subaccounts" and the money you place in the Fixed
Account's guaranteed interest periods as "Fixed Interest Allocations"
in this prospectus.
We will credit your Fixed Interest Allocation(s) with a fixed rate of
interest. We set the interest rates periodically. We will not set
the interest rate to be less than a minimum annual rate of 3%. You
may choose guaranteed interest periods of 1, 3, 5, 7 and 10 years.
The interest earned on your money as well as your principal is
guaranteed as long as you hold them until the maturity date. If you
take your money out from a Fixed Interest Allocation more than 30
days before the applicable maturity date, we will apply a market
value adjustment ("Market Value Adjustment"). A Market Value
Adjustment could increase or decrease your contract value and/or the
amount you take out. You bear the risk that you may receive less
than your principal if we take a Market Value Adjustment. You have a
right to return a Contract within 10 days after you receive it for a
full refund of the contract value (which may be more or less than the
premium payments you paid).
This prospectus provides information that you should know before
investing and should be kept for future reference. A Statement of
Additional Information, dated May 1, 1999, has been filed with the
Securities and Exchange Commission. It is available without charge
upon request. To obtain a copy of this document, write to our
Customer Service Center at 230 Park Avenue, Suite 966, New York, New
York 10169 or call (800) 963-9539, or access the SEC's website
(http://www.sec.gov). The table of contents of the Statement of
Additional Information ("SAI") is on the last page of this prospectus
and the SAI is made part of this prospectus by reference.
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THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR
DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
AN INVESTMENT IN THE GCG TRUST OR THE PIMCO TRUST IS NOT A BANK
DEPOSIT AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
THIS PROSPECTUS MUST BE ACCOMPANIED BY A CURRENT PROSPECTUS FOR THE
GCG TRUST AND THE PIMCO TRUST.
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[Shaded Section Header]
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TABLE OF CONTENTS
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PAGE
Index of Special Terms 1
Fees and Expenses 2
Performance Information 5
Accumulation Unit 5
Net Investment Factor 5
Condensed Financial Information 5
Financial Statements 5
Performance Information 5
First Golden American Life Insurance Company 7
The Trusts 7
First Golden Separate Account NY-B 8
The Investment Portfolios 8
Investment Objectives 8
Investment Portfolio Management Fees 10
The Fixed Interest Allocation 11
Selecting a Guaranteed Interest Period 11
Guaranteed Interest Rates 11
Transfers from a Fixed Interest Allocation 12
Withdrawals from a Fixed Interest Allocation 12
Market Value Adjustment 13
The Annuity Contract 13
Contract Date and Contract Year 14
Annuity Start Date 14
Contract Owner 14
Annuitant 14
Beneficiary 15
Purchase and Availability of the Contract 15
Crediting of Premium Payments 15
Contract Value 16
Cash Surrender Value 16
Surrendering to Receive the Cash Surrender Value 17
Addition, Deletion or Substitution
of Subaccounts and Other
Changes 17
The Fixed Account 17
Other Important Provisions 17
Withdrawals 18
Regular Withdrawals 18
Systematic Withdrawals 18
IRA Withdrawals 19
Transfers Among Your Investments 20
Dollar Cost Averaging 20
Automatic Rebalancing 21
Death Benefit Choices 21
Death Benefit During the Accumulation Phase 21
Standard Death Benefit 21
Annual Ratchet Enhanced Death Benefits 22
Death Benefit During the Income Phase 22
Charges and Fees 22
Charge Deduction Subaccount 22
Charges Deducted from the Contract Value 22
i
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[Shaded Section Header]
- ----------------------------------------------------------------------
TABLE OF CONTENTS (CONTINUED)
- ----------------------------------------------------------------------
PAGE
Charges and Fees (continued)
Surrender Charge 22
Free Withdrawal Amount 23
Surrender Charge for Excess Withdrawals 23
Premium Taxes 23
Administrative Charge 23
Transfer Charge 23
Charges Deducted from the Subaccounts 24
Mortality and Expense Risk Charge 24
Asset-Based Administrative Charge 24
Trust Expenses 24
The Annuity Options 24
Annuitization of Your Contract 24
Selecting the Annuity Start Date 25
Frequency of Annuity Payments 25
The Annuity Options 25
Income for a Fixed Period 25
Income for Life with a Period Certain 25
Joint Life Income 25
Annuity Plan 26
Payment When Named Person Dies 26
Other Contract Provisions 26
Reports to Contract Owners 26
Suspension of Payments 26
In Case of Errors in Your Application 26
Assigning the Contract as Collateral 26
Contract Changes-Applicable Tax Law 27
Free Look 27
Group or Sponsored Arrangements 27
Selling the Contract 27
Other Information 28
Voting Rights 28
Year 2000 Problem 28
State Regulation 28
Legal Proceedings 28
Legal Matters 28
Experts 28
Federal Tax Considerations 29
More Information About First Golden American
Life Insurance Company 34
Financial Statements of First Golden
American Life Insurance Company 56
Statement of Additional Information
Table of Contents 91
Appendix A
Condensed Financial Information A1
Appendix B
Market Value Adjustment Examples B1
Appendix C
Surrender Charge for Excess Withdrawals Example C1
ii
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- ----------------------------------------------------------------------
INDEX OF SPECIAL TERMS
- ----------------------------------------------------------------------
The following special terms are used throughout this prospectus.
Refer to the page(s) listed for an explanation of each term:
SPECIAL TERM PAGE
Accumulation Unit 5
Annual Ratchet Enhanced Death Benefit 22
Annuitant 14
Annuity Start Date 14
Cash Surrender Value 16
Contract Date 14
Contract Owner 14
Contract Value 16
Contract Year 14
Fixed Interest Allocation 11
Free Withdrawal Amount 23
Market Value Adjustment 13
Net Investment Factor 6
Standard Death Benefit 21
The following terms as used in this prospectus have the same or
substituted meanings as the corresponding terms currently used in the
Contract:
TERM USED IN THIS PROSPECTUS CORRESPONDING TERM USED IN THE CONTRACT
Accumulation Unit Value Index of Investment Experience
Annuity Start Date Annuity Commencement Date
Contract Owner Owner or Certificate Owner
Contract Value Accumulation Value
Transfer Charge Excess Allocation Charge
Fixed Interest Allocation Fixed Allocation
Free Look Period Right to Examine Period
Guaranteed Interest Period Guarantee Period
Subaccount(s) Division(s)
Net Investment Factor Experience Factor
Regular Withdrawals Conventional Partial Withdrawals
Withdrawals Partial Withdrawals
1
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- ----------------------------------------------------------------------
FEES AND EXPENSES
- ----------------------------------------------------------------------
CONTRACT OWNER TRANSACTION EXPENSES*
Surrender Charge:
COMPLETE YEARS ELAPSED 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7+
SINCE PREMIUM PAYMENT | | | | | | |
| | | | | | |
SURRENDER CHARGE 7% | 6% | 5% | 4% | 3% | 2% | 1% | 0%
Transfer Charge None**
*If you invested in a Fixed Interest Allocation, a Market Value
Adjustment may apply to certain transactions. This may increase
or decrease your contract value and/or your transfer or
surrender amount.
**We may in the future charge $25 per transfer if you make more
than 12 transfers in a contract year.
ANNUAL CONTRACT ADMINISTRATIVE CHARGE
Administrative Charge.......................................$30
(We waive this charge if your premium payments or current contract
value is $100,000 or more.)
SEPARATE ACCOUNT NY-B ANNUAL CHARGES***
STANDARD ENHANCED DEATH BENEFIT
DEATH BENEFIT ANNUAL RATCHET
Mortality and Expense Risk Charge 1.10% 1.25%
Asset-Based Administrative Charge 0.15% 0.15%
----- -----
Total Separate Account Charges 1.25% 1.40%
***As a percentage of average assets in each subaccount.
2
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THE GCG TRUST ANNUAL EXPENSES (as a percentage of the average daily
net assets of an investment portfolio or on the combined average
daily net assets of the indicated groups of portfolios):
[Table with Shaded Heading and Shaded lines for readability]
|---------------------------------------------------------------------------|
| OTHER TOTAL |
| EXPENSES(2) EXPENSES |
| MANAGEMENT AFTER EXPENSE AFTER EXPENSE |
| PORTFOLIO FEES(1) REIMBURSEMENT REIMBURSEMENT(3) |
|---------------------------------------------------------------------------|
| Liquid Asset 0.59% 0.00% 0.59% |
| Limited Maturity Bond 0.60% 0.00% 0.60% |
| Global Fixed Income 1.60% 0.00% 1.60%(3) |
| Total Return 0.94% 0.03% 0.97%(3) |
| Equity Income 0.98% 0.00% 0.98% |
| Fully Managed 0.98% 0.00% 0.98% |
| Rising Dividends 0.98% 0.00% 0.98% |
| Growth & Income 1.08% 0.00% 1.08% |
| Growth 1.08% 0.01% 1.09% |
| Value Equity 0.98% 0.00% 0.98% |
| Research 0.94% 0.00% 0.94% |
| Strategic Equity 0.98% 0.01% 0.99% |
| Capital Appreciation 0.98% 0.00% 0.98% |
| Mid-Cap Growth 0.94% 0.01% 0.95% |
| Small Cap 0.98% 0.01% 0.99% |
| Real Estate 0.98% 0.01% 0.99% |
| Hard Assets 0.98% 0.02% 1.00% |
| Managed Global 1.25% 0.01% 1.26% |
| Developing World 1.75% 0.08% 1.83% |
| Emerging Markets 1.75% 0.08% 1.83% |
| All-Growth(4) 0.98% 0.01% 0.99% |
| Growth Opportunities(4) 1.10% 0.05% 1.15% |
|---------------------------------------------------------------------------|
(1)Fees decline as combined assets increase. See the prospectus for
the GCG Trust for more information.
(2)Other expenses generally consist of independent trustees fees and
certain expenses associated with investing in international
markets. Other expenses are based on actual expenses for the year
ended December 31, 1998, except for portfolios that commenced
operations in 1998 where the charges have been annualized.
(3)Directed Services, Inc. is currently reimbursing expenses to
maintain total expenses at 0.97% for the Total Return portfolio and
1.60% for the Global Fixed Income portfolio as shown. Without this
reimbursement, and based on current estimates, total expenses would
be 0.98% for the Research portfolio and 1.74% for the Global Fixed
Income portfolio. This reimbursement agreement will remain in place
through December 31, 1999.
(4)As of May 1, 1999, we no longer offer the All-Growth and Growth
Opportunities portfolios.
THE PIMCO TRUST ANNUAL EXPENSES (as a percentage of the average daily
net assets of a portfolio):
[Table with Shaded Heading]
|---------------------------------------------------------------------------|
| OTHER TOTAL |
| EXPENSES EXPENSES |
| MANAGEMENT AFTER EXPENSE AFTER EXPENSE |
| PORTFOLIO FEES(1) REIMBURSEMENT(1) REIMBURSEMENT(1) |
|---------------------------------------------------------------------------|
| PIMCO High Yield Bond 0.50% 0.25%(2) 0.75% |
| PIMCO StocksPLUS Growth |
| and Income 0.40% 0.25% 0.65% |
|---------------------------------------------------------------------------|
(1)PIMCO has agreed to waive some or all of its other expenses,
subject to potential future reimbursement, to the extent that
total expenses for the PIMCO High Yield Bond portfolio and PIMCO
StocksPLUS Growth and Income portfolio would exceed 0.75% and
0.65%, respectively, due to payment by the portfolios of their
pro rata portion of Trustees' fees. Without this agreement, and
based on current estimates, total expenses would be 0.81% for
PIMCO High Yield Bond portfolio and 0.72% for the PIMCO StockPLUS
Growth and Income portfolio.
(2)Since the PIMCO High Yield Bond portfolio commenced operations on
April 30, 1998, other expenses as shown has been annualized for
the year ended December 31, 1998.
3
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The purpose of the foregoing tables is to help you understand the
various costs and expenses that you will bear directly and
indirectly. See the prospectuses of the GCG Trust and the PIMCO
Trust for additional information on portfolio expenses.
Premium taxes (which currently range from 0% to 3.5% of premium
payments) may apply, but are not reflected in the tables above or in
the examples below.
EXAMPLES:
In the following examples, surrender charges may apply if you choose
to annuitize within the first 7 contract years. The examples also
assume election of the Annual Ratchet Enhanced Death Benefit and are
based on an assumed 5% annual return.
If you surrender your Contract at the end of the applicable time
period, you would pay the following expenses for each $1,000 invested:
______________________________________________________________________
THE GCG TRUST 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Liquid Asset $90.63 $113.70 $139.32 $235.53
Limited Maturity Bond $90.73 $114.00 $139.83 $236.58
Global Fixed Income $100.73 $143.98 $189.69 $335.45
Total Return $94.44 $125.20 $158.58 $274.41
Equity Income $94.54 $125.50 $159.08 $275.41
Fully Managed $94.54 $125.50 $159.08 $275.41
Rising Dividends $94.54 $125.50 $159.08 $275.41
Growth & Income $95.54 $128.51 $164.08 $185.37
Growth $95.64 $125.80 $164.58 $286.36
Value Equity $94.54 $125.50 $159.08 $275.41
Research $94.14 $124.30 $157.07 $271.40
Strategic Equity $94.64 $125.80 $159.58 $276.41
Capital Appreciation $94.54 $125.50 $159.08 $275.41
Mid-Cap Growth $94.24 $124.60 $157.57 $272.40
Small Cap $94.64 $125.80 $159.58 $276.41
Real Estate $94.64 $125.80 $159.58 $276.41
Hard Assets $94.74 $126.10 $160.08 $277.41
Managed Global $97.34 $133.89 $173.03 $303.03
Developing World $103.01 $150.74 $200.80 $356.70
Emerging Markets $103.01 $150.74 $200.80 $356.70
All-Growth(1) $94.64 $125.80 $159.58 $276.41
Growth Opportunities(1) $96.24 $130.60 $167.57 $292.28
THE PIMCO TRUST
PIMCO High Yield Bond $92.23 $118.56 $147.47 $252.10
PIMCO StocksPLUS Growth
and Income $91.23 $115.52 $142.38 $241.78
__________________________________
(1)As of May 1, 1999, we no longer offer the All-Growth and
Growth Opportunities portfolios.
4
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If you do not surrender your Contract or if you annuitize on the
annuity start date, you would pay the following expenses for each
$1,000 invested:
______________________________________________________________________
THE GCG TRUST 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Liquid Asset $20.63 $63.70 $109.32 $235.53
Limited Maturity Bond $20.73 $64.00 $109.83 $236.58
Global Fixed Income $30.73 $93.98 $159.69 $335.45
Total Return $24.44 $75.20 $128.58 $274.41
Equity Income $24.54 $75.50 $129.08 $275.41
Fully Managed $24.54 $75.50 $129.08 $275.41
Rising Dividends $24.54 $75.50 $129.08 $275.41
Growth & Income $25.54 $78.51 $134.08 $185.37
Growth $25.64 $78.80 $134.58 $286.66
Value Equity $24.54 $75.50 $129.08 $275.41
Research $24.14 $74.30 $127.07 $271.40
Strategic Equity $24.64 $75.80 $129.58 $276.41
Capital Appreciation $24.54 $75.50 $129.08 $275.41
Mid-Cap Growth $24.24 $74.60 $127.57 $272.40
Small Cap $24.64 $75.80 $129.58 $276.41
Real Estate $24.64 $75.80 $129.58 $276.41
Hard Assets $24.74 $76.10 $130.08 $277.41
Managed Global $27.34 $83.89 $143.03 $303.03
Developing World $33.01 $100.74 $170.80 $356.70
Emerging Markets $33.01 $100.74 $170.80 $356.70
All-Growth(1) $24.64 $75.80 $129.58 $276.41
Growth Opportunities(1) $26.24 $80.60 $137.57 $292.28
THE PIMCO TRUST
PIMCO High Yield Bond $22.23 $68.56 $117.47 $252.10
PIMCO StocksPLUS Growth
and Income $21.23 $65.52 $112.38 $241.78
__________________________________
(1)As of May 1, 1999, we no longer offer the All-Growth and
Growth Opportunities portfolios.
The examples above reflect the annual administrative charge as an
annual charge of 0.04% of assets (based on an average contract value
of $70,000). If the Standard Death Benefit is elected instead of
the Annual Ratchet Enhanced Death Benefit used in the examples, the
actual expenses will be less than those represented in the examples.
THESE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN SUBJECT TO THE TERMS OF YOUR CONTRACT.
[Shaded Section Header]
- ----------------------------------------------------------------------
PERFORMANCE INFORMATION
- ----------------------------------------------------------------------
ACCUMULATION UNIT
We use accumulation units to calculate the value of a Contract. Each
subaccount of Separate Account NY-B has its own accumulation unit
value. The accumulation units are valued each business day that the
New York Stock Exchange is open for trading. Their values may
increase or decrease from day to day according to a Net Investment
Factor, which is primarily based on the investment performance of the
applicable investment portfolio. Shares in the investment portfolios
are valued at their net asset value.
5
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THE NET INVESTMENT FACTOR
The Net Investment Factor is an index number which reflects charges
under the Contract and the investment performance of the subaccount.
The Net Investment Factor is calculated as follows:
(1)We take the net asset value of the subaccount at the end of
each business day.
(2)We add to (1) the amount of any dividend or capital gains
distribution declared for the subaccount and reinvested in
such subaccount. We subtract from that amount a charge for
our taxes, if any.
(3)We divide (2) by the net asset value of the subaccount at the
end of the preceding business day.
(4)We then subtract the applicable daily mortality and expense
risk charge and the daily asset-based administrative charge
from each subaccount.
Calculations for the subaccounts are made on a per share basis.
CONDENSED FINANCIAL INFORMATION
Tables containing (i) the accumulation unit value history of each
subaccount of First Golden Separate Account NY-B offered this
prospectus and (ii) the total investment value history of each such
subaccount are presented in Appendix A - Condensed Financial
Information.
FINANCIAL STATEMENTS
The audited financial statements of Separate Account NY-B for the
years ended December 31, 1998 and 1997 are included in the Statement
of Additional Information. The audited financial statements of First
Golden for the years ended December 31, 1998, 1997 and the period
December 17, 1996 (commencement of operations) through December 31,
1996 are included in this prospectus.
PERFORMANCE INFORMATION
From time to time, we may advertise or include in reports to contract
owners performance information for the subaccounts of Separate
Account NY-B, including the average annual total return performance,
yields and other nonstandard measures of performance. Such
performance data will be computed, or accompanied by performance data
computed, in accordance with standards defined by the SEC.
Except for the Liquid Asset subaccount, quotations of yield for the
subaccounts will be based on all investment income per unit (contract
value divided by the accumulation unit) earned during a given 30-day
period, less expenses accrued during such period. Information on
standard total average annual return performance will include average
annual rates of total return for 1, 5 and 10 year periods, or lesser
periods depending on how long the subaccount of Separate Account NY-B
has been in existence. We may show other total returns for periods
less than one year. Total return figures will be based on the actual
historic performance of the subaccounts of Separate Account NY-B,
assuming an investment at the beginning of the period, withdrawal of
the investment at the end of the period, and the deduction of all
applicable portfolio and contract charges. We may also show rates of
total return on amounts invested at the beginning of the period with
no withdrawal at the end of the period. Total return figures which
assume no withdrawals at the end of the period will reflect all
recurring charges, but will not reflect the surrender charge. In
addition, we may present historic performance data for the mutual
fund investment portfolios since their inception reduced by some or
all of the fees and charges under the Contract. Such adjusted
historic performance includes data that precedes the inception dates
of the subaccounts of Separate Account NY-B. This data is designed
to show the performance that would have resulted if the Contract had
been in existence during that time.
Current yield for the Liquid Asset subaccount is based on income
received by a hypothetical investment over a given 7-day period, less
expenses accrued, and then "annualized" (i.e., assuming that the 7-
day yield would be received for 52 weeks). We calculate "effective
yield" for the Liquid Asset subaccount 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 thus be slightly higher than the "yield" because of the
compounding
6
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<PAGE>
effect of earnings. We calculate quotations of yield for
the remaining subaccounts on all investment income per accumulation
unit earned during a given 30-day period, after subtracting fees and
expenses accrued during the period.
We may compare performance information for a subaccount to: (i) the
Standard & Poor's 500 Stock Index, Dow Jones Industrial Average,
Donoghue Money Market Institutional Averages, or any other applicable
market indices, (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), or any other rating service, and (iii)
the Consumer Price Index (measure for inflation) to assess the real
rate of return from an investment in the Contract. Our reports and
promotional literature may also contain other information including
the ranking of any subaccount based on rankings of variable annuity
separate accounts or other investment products tracked by Lipper
Analytical Services or by similar rating services.
Performance information reflects only the performance of a
hypothetical contract and should be considered in light of other
factors, including the investment objective of the investment
portfolio and market conditions. Please keep in mind that past
performance is not a guarantee of future results.
[Shaded Section Header]
- ----------------------------------------------------------------------
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
- ----------------------------------------------------------------------
First Golden American Life Insurance Company of New York is a New
York stock life insurance company. First Golden is a wholly owned
subsidiary of Golden American Life Insurance Company ("Golden
American"). Golden American is a wholly owned subsidiary of
Equitable of Iowa Companies, Inc. ("Equitable of Iowa"). Equitable
of Iowa is a wholly owned subsidiary of ING Groep N.V. ("ING"), a
global financial services holding company with approximately $461.8
billion in assets as of December 31, 1998. First Golden's financial
statements appear in this prospectus. First Golden is authorized to
do business in Delaware and New York.
Equitable of Iowa is the holding company for Golden American,
Directed Services, Inc., the investment manager of the GCG Trust and
the distribution of the Contracts, and other interests. Equitable of
Iowa and another ING affiliate own ING Investment Management, LLC, a
portfolio manager of the GCG Trust. ING also owns Baring
International Investment Limited, another portfolio manager of the
GCG Trust.
Our principal office is located at 230 Park Avenue, Suite 966, New
York, New York 10169.
[Shaded Section Header]
- ----------------------------------------------------------------------
THE TRUSTS
- ----------------------------------------------------------------------
The GCG Trust is a mutual fund whose shares are available to separate
accounts funding variable annuity and variable life insurance
policies offered by First Golden. The GCG Trust also sells its
shares to separate accounts of other insurance companies, both
affiliated and not affiliated with First Golden. Pending SEC
approval, shares of the GCG Trust may also be sold to certain
qualified pension and retirement plans.
The PIMCO Trust is also a mutual fund whose shares are available to
separate accounts of insurance companies, including First Golden, for
both variable annuity contracts and variable life insurance policies
and by qualified pension and retirement plans. The principal address
of the PIMCO Trust is 840 Newport Center Drive, Suite 300, Newport
Beach, CA 92660.
In the event that, due to differences in tax treatment or other
considerations, the interests of contract owners of various contracts
participating in the Trusts conflict, we, the Boards of Trustees of
the GCG Trust and the PIMCO Trust, Directed Services, Inc., Pacific
Investment Management Company and any other insurance companies
participating in the Trusts will monitor events to identify and
resolve any material conflicts that may arise.
7
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YOU WILL FIND COMPLETE INFORMATION ABOUT THE GCG TRUST AND THE PIMCO
TRUST IN THE ACCOMPANYING TRUSTS' PROSPECTUSES. YOU SHOULD READ THEM
CAREFULLY BEFORE INVESTING.
[Shaded Section Header]
- ----------------------------------------------------------------------
FIRST GOLDEN SEPARATE ACCOUNT NY-B
- ----------------------------------------------------------------------
First Golden Separate Account NY-B ("Account NY-B") was established
as a separate account of First Golden on June 13, 1996. It is
registered with the Securities and Exchange Commission as a unit
investment trust under the Investment Company Act of 1940. Account
NY-B is a separate investment account used for our variable annuity
contracts. We own all the assets in Account NY-B but such assets are
kept separate from our other accounts.
Account NY-B is divided in subaccounts. Each subaccount invests
exclusively in shares of one investment portfolio of the GCG Trust
and the PIMCO Trust. Each investment portfolio has its own distinct
investment objectives and policies. Income, gains and losses,
realized or unrealized, of a portfolio are credited to or charged
against the corresponding subaccount of Account NY-B without regard
to any other income, gains or losses of the Company. Assets equal to
the reserves and other contract liabilities with respect to each are
not chargeable with liabilities arising out of any other business of
the Company. They may, however, be subject to liabilities arising
from subaccounts whose assets we attribute to other variable annuity
contracts supported by Account NY-B. If the assets in Account NY-B
exceed the required reserves and other liabilities, we may transfer
the excess to our general account. We are obligated to pay all
benefits and make all payments provided under the Contracts.
We currently offer other variable annuity contracts that invest in
Account NY-B but are not discussed in this prospectus. Account NY-B
may also invest in other investment portfolios which are not
available under your Contract.
[Shaded Section Header]
- ----------------------------------------------------------------------
THE INVESTMENT PORTFOLIOS
- ----------------------------------------------------------------------
During the accumulation phase, you may allocate your premium payments
and contract value to any of the investment portfolios listed below.
YOU BEAR THE ENTIRE INVESTMENT RISK FOR AMOUNTS YOU ALLOCATE TO THE
INVESTMENT PORTFOLIOS AND MAY LOSE YOUR PRINCIPAL.
INVESTMENT OBJECTIVES
The investment objective of each investment portfolio is set forth
below. You should understand that there is no guarantee that any
portfolio 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. MORE DETAILED INFORMATION ABOUT THE INVESTMENT
PORTFOLIOS CAN BE FOUND IN THE PROSPECTUSES FOR THE GCG TRUST AND THE
PIMCO TRUST. YOU SHOULD READ THESE PROSPECTUSES BEFORE INVESTING.
[Shaded Table Header]
INVESTMENT PORTFOLIO INVESTMENT OBJECTIVE
- ------------------------------------------------------------------------
Liquid Asset Seeks high level of current income consistent with
the preservation of capital and liquidity.
Invests primarily in obligations of the U.S.
Government and its agencies and
instrumentalities, bank obligations,
commercial paper and short-term corporate debt
securities. All securities will mature in
less than one year.
----------------------------------------------------
8
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Limited Maturity Seeks highest current income consistent with
Bond low risk to principal and liquidity.
Also seeks to enhance its total return through capital
appreciation when market factors, such as
falling interest rates and rising bond prices,
indicate that capital appreciation may be
available without significant risk to principal.
Invests primarily in diversified limited maturity debt
securities with average maturity dates of five
years or shorter and in no cases more than
seven years.
----------------------------------------------------
Global Fixed Seeks high total return.
Income Invests primarily in high-grade fixed income
securities, both foreign and domestic.
----------------------------------------------------
Total Return Seeks above-average income (compared to a portfolio
entirely invested in equity securities)
consistent with the prudent employment of capital.
Invests primarily in a combination of equity
and fixed income securities.
----------------------------------------------------
Equity Income Seeks substantial dividend income as well as long-
term growth of capital.
Invests primarily in common stocks of well-
established companies paying above-average
dividends.
----------------------------------------------------
Fully Managed Seeks, over the long term, a high total investment
return consistent with the preservation of
capital and with prudent investment risk.
Invests primarily in the common stocks of
established companies believed by the
portfolio manager to have above-average
potential for capital growth.
----------------------------------------------------
Rising Dividends Seeks capital appreciation. A secondary
objective is dividend income.
Invests in equity securities that meet the
following quality criteria: regular dividend
increases; 35% of earnings reinvested
annually; and a credit rating of "A" to "AAA".
----------------------------------------------------
Growth & Income Seeks long-term total return.
Invests primarily in common stocks of
companies where the potential for change
(earnings acceleration) is significant.
----------------------------------------------------
Growth Seeks capital appreciation.
Invests primarily in common stocks of growth companies
that have favorable relationships between price/earnings
ratios and growth rates in sectors offering the
potential for above-average returns.
----------------------------------------------------
Value Equity Seeks capital appreciation. Dividend income
is a secondary objective.
Invests primarily in common stocks of domestic
and foreign issuers which meet quantitative
standards relating to financial soundness and
high intrinsic value relative to price.
----------------------------------------------------
Research Seeks long-term growth of capital and future income.
Invests primarily in common stocks or
securities convertible into common stocks of
companies believed to have better than average
prospects for long-term growth.
----------------------------------------------------
Strategic Equity Seeks capital appreciation.
Invests primarily in common stocks of medium-
and small-sized companies.
----------------------------------------------------
Capital Seeks long-term capital growth.
Appreciation Invests primarily in equity securities
believed by the portfolio manager to be
undervalued.
----------------------------------------------------
Mid-Cap Growth Seeks long-term growth of capital.
Invests primarily in equity securities of
companies with medium market capitalization
which the portfolio manager believes have
above-average growth potential.
----------------------------------------------------
Small Cap Seeks long-term capital appreciation.
Invests primarily in equity securities of
companies that have a total market
capitalization within the range of companies
in the Russell 2000 Growth Index or the
Standard & Poor's Small-Cap 600 Index.
----------------------------------------------------
9
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Real Estate Seeks capital appreciation. Current income is a
secondary objective.
Invests primarily in publicly traded real
estate equity securities.
----------------------------------------------------
Hard Assets Seeks long-term capital appreciation.
Invests primarily in hard asset securities.
Hard asset companies produce a commodity which
the portfolio manager is able to price on a
daily or weekly basis.
----------------------------------------------------
Managed Global Seeks capital appreciation. Current income is
only an incidental consideration.
Invests primarily in common stocks traded in
securities markets throughout the world.
----------------------------------------------------
Developing World Seeks capital appreciation.
Invests primarily in equity securities of
companies in developing or emerging countries.
----------------------------------------------------
Emerging Markets Seeks long-term capital appreciation.
Invests primarily in equity securities of
companies in at least six different emerging
market countries.
----------------------------------------------------
PIMCO High Yield Seeks to maximize total return, consistent with
Bond preservation of capital and
prudent investment management.
Invests in at least 65% of its assets in a diversified
portfolio of junk bonds rated at least B by
Moody's Investor Services, Inc. or Standard &
Poor's or, if unrated, determined by the
portfolio manager to be of comparable quality.
----------------------------------------------------
PIMCO StocksPLUS Seeks to achieve a total return which exceeds
Growth and Income the total return performance of the S&P 500.
Invests primarily in common stocks, options, futures,
options on futures and swaps.
----------------------------------------------------
As of May 1, 1999, we no longer offer the following two portfolios:
All-Growth Seeks capital appreciation.
Invests primarily in growth securities of
middle-range capitalization companies.
----------------------------------------------------
Growth Seeks capital appreciation.
Opportunities Invests primarily in equity securities of
domestic companies emphasizing companies with
market capitalizations of $1 billion or more.
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INVESTMENT PORTFOLIO MANAGEMENT FEES
Directed Services, Inc. serves as the overall manager of the GCG
Trust and Pacific Investment Management Company ("PIMCO") serves as
the overall adviser of the PIMCO Trust. Directed Services, Inc. and
PIMCO provide or procure, at their own expense, the services
necessary for the operation of the portfolios. See the cover page of
this prospectus for the names of the corresponding portfolio
managers. Directed Services, Inc. and PIMCO do not bear the expense
of brokerage fees and other transactional expenses for securities,
taxes (if any) paid by a portfolio, interest on borrowing, fees and
expenses of the independent trustees, and extraordinary expenses,
such as litigation or indemnification expenses.
The GCG Trust pays Directed Services for its services a monthly fee
based on the annual rates of the average daily net assets of the
investment portfolios. Directed Services (and not the GCG Trust) in
turn pays each portfolio manager a monthly fee for managing the
assets of the portfolios.
The PIMCO Trust pays PIMCO a monthly advisory fee and a monthly
administrative fee of 0.25% based on the average daily net assets of
each of the investment portfolios for managing the assets of the
portfolios and for administering the PIMCO Trust.
More detailed information about each portfolio's management fees can
be found in the prospectuses each Trust. You should read these
prospectuses before investing.
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THE FIXED INTEREST ALLOCATION
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You may allocate premium payments and transfer your contract value to
the guaranteed interest periods of our Fixed Account at any time
during the accumulation period. Every time you allocate money to the
Fixed Account, we set up a Fixed Interest Allocation for the
guaranteed interest period you select. We currently offer guaranteed
interest periods of 1, 3, 5, 7 and 10 years, although we may not
offer all these periods in the future. You may select one or more
guaranteed interest periods at any one time. We will credit your
Fixed Interest Allocation with a guaranteed interest rate for the
interest period you select, so long as you do not withdraw money from
that Fixed Interest Allocation before the end of the guaranteed
interest period. Each guaranteed interest period ends on its
maturity date which is the last day of the month in which the
interest period is scheduled to expire.
If you surrender, withdraw, transfer or annuitize your investment in
a Fixed Interest Allocation more than 30 days before the end of the
guaranteed interest period, we will apply a Market Value Adjustment
to the transaction. A market value adjustment could increase or
decrease the amount you surrender, withdraw, transfer or annuitize,
depending on current interest rates at the time of the transaction.
YOU BEAR THE RISK THAT YOU MAY RECEIVE LESS THAN YOUR PRINCIPAL IF WE
APPLY A MARKET VALUE ADJUSTMENT.
Assets supporting amounts allocated to the Fixed Account are
available to fund the claims of all classes of our customer, contract
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 GUARANTEED INTEREST PERIOD
You may select one or more Fixed Interest Allocations with specified
guaranteed interest periods. A guaranteed interest period is the
period that a rate of interest is guaranteed to be credited to your
Fixed Interest Allocation. We may at any time decrease or increase
the number of guaranteed interest periods offered.
Your contract value in the Fixed Account is the sum of your Fixed
Interest Allocations and the interest credited as adjusted for any
withdrawals (including any Market Value Adjustment applied to such
withdrawals), transfers or other charges we may impose. Your Fixed
Interest Allocation will be credited with the guaranteed interest
rate in effect for the guaranteed interest period you selected when
we receive and accept your premium or reallocation of contract value.
We will credit interest daily at a rate, which yields the quoted
guaranteed interest rate.
GUARANTEED INTEREST RATES
Each Fixed Interest Allocation will have an interest rate that is
guaranteed as long as you hold it until its maturity date. We do not
have a specific formula for establishing the guaranteed interest
rates for the different guaranteed interest periods. We determine
guaranteed interest rates at our sole discretion. The determination
may be influenced by the interest rates on fixed income investments
in which we may invest with the amounts we receive under the
Contracts. We will invest these amounts primarily in investment-
grade fixed income securities (i.e., rated by Standard & Poor's
rating system to be suitable for prudent investors) although we are
not obligated to invest according to any particular strategy, except
as may be required by applicable law. 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 the level of future interest rates but no
Fixed Interest Allocation will ever have a guaranteed interest rate
of less than 3% per year.
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We may from time to time at our discretion offer interest rate
specials for new premiums that are higher than the current base
interest rate then offered. Renewal rates for such rate specials
will be based on the base interest rate and not on the special rates
initially declared.
TRANSFERS FROM A FIXED INTEREST ALLOCATION
You may transfer your contract value in a Fixed Interest Allocation
to one or more new Fixed Interest Allocations with new guaranteed
interest periods, or to any of the subaccounts of Account NY-B.
Unless you tell us the Fixed Interest Allocations from which such
transfers will be made, we will transfer amounts from your Fixed
Interest Allocations starting with the guaranteed interest period
nearest its maturity date, until we have honored your transfer request.
The minimum amount that you can transfer to or from any Fixed
Interest Allocation is $250. If a transfer request would reduce the
contract value remaining in a Fixed Interest Allocation to less than
$100, we will treat such transfer request as a request to transfer
the entire contract value in such Fixed Interest Allocation.
Transfers from a Fixed Interest Allocation may be subject to a Market
Value Adjustment. If you have a special Fixed Interest Allocation
offered only with dollar cost averaging, cancelling dollar cost
averaging will cause a transfer of the entire contract value in such
Fixed Interest Allocation to the Liquid Asset subaccount, and such a
transfer is subject to a Market Value Adjustment.
On the maturity date of a guaranteed interest period, you may
transfer amounts from the applicable Fixed Interest Allocation to the
subaccount(s) and/or to new Fixed Interest Allocations with
guaranteed interest periods of any length we are offering at that
time. You may not, however, transfer amounts to any Fixed Interest
Allocation with a guaranteed interest period that extends beyond the
annuity start date.
At least 30 calendar days before a maturity date of any of your Fixed
Interest Allocations, or earlier if required by state law, we will
send you a notice of the guaranteed interest periods that are
available. You must notify us which subaccounts or new guaranteed
interest periods you have selected before the maturity date of your
Fixed Interest Allocations. If we do not receive timely instructions
from you, we will transfer the contract value in the maturing Fixed
Interest Allocation to a new Fixed Interest Allocation with a
guaranteed interest period that is the same as the expiring
guaranteed interest period. If such guaranteed interest period is
not available or would go beyond the annuity start date, we will
transfer your contract value in the maturing Fixed Interest
Allocation to the next shortest guaranteed interest period which does
not go beyond the annuity start date. If no such guaranteed interest
period is available, we will transfer the contract value to a
subaccount specially designated by the Company for such purpose.
Currently we use the Liquid Asset subaccount for such purpose.
WITHDRAWALS FROM A FIXED INTEREST ALLOCATION
During the accumulation phase, you may withdraw a portion of your
contract value in any Fixed Interest Allocation. You may make
systematic withdrawals of only the interest earned during the prior
month, quarter or year, depending on the frequency chosen, from a
Fixed Interest Allocation under our systematic withdrawal option.
Systematic withdrawals from a Fixed Interest Allocation are not
permitted if such Fixed Interest Allocation is currently
participating in the dollar cost averaging program. A withdrawal
from a Fixed Interest Allocation may be subject to a Market Value
Adjustment and, in some cases, a surrender charge. Be aware that
withdrawals may have federal income tax consequences, including a 10%
penalty tax.
If you tell us the Fixed Interest Allocation from which your
withdrawal will be made, we will assess the withdrawal against that
Fixed Interest Allocation. If you do not, we will assess your
withdrawal against the subaccounts in which you invested, unless the
withdrawal exceeds the contract value in the subaccounts. If there
is no contract value in those subaccounts, we will deduct your
withdrawal from your Fixed Interest Allocations starting with the
guaranteed interest periods nearest their maturity dates until we
have honored your request.
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MARKET VALUE ADJUSTMENT
We will apply a Market Value Adjustment (i) whenever you withdraw or
transfer money from a Fixed Interest Allocation (unless made within
30 days before the maturity date of the applicable guaranteed
interest period, or under the systematic withdrawal or dollar cost
averaging program) and (ii) if on the annuity start date a guaranteed
interest period for any Fixed Interest Allocation does not end on or
within 30 days of the annuity start date. A Market Value Adjustment
may decrease, increase or have no effect on your contract value.
We determine the Market Value Adjustment by multiplying the amount
you withdraw, transfer or apply to an income plan by the following
factor:
( 1+I )N/365
(---------) -1
(1+J+.0025)
Where,
o "I" is the Index Rate for a Fixed Interest Allocation on the
first day of the guaranteed interest period;
o "J" is the Index Rate for a new Fixed Interest Allocation with
a guaranteed interest period equal to the time remaining in
the guaranteed interest period, at the time of calculation; and
o "N" is the remaining number of days in the guaranteed interest
period at the time of calculation.
The Index Rate is the average of the Ask Yields for U.S. Treasury
Strips as quoted by a national quoting service for a period equal to
the applicable guaranteed interest period. The average currently is
based on the period starting from the 22nd day of the calendar month
two months prior to the month of the Index Rate determination and
ending the 21st day of the calendar month immediately before the
month of determination. We currently calculate the Index Rate once
each calendar month but have the right to calculate it more
frequently. The Index Rate will always be based on a period of at
least 28 days. If the Ask Yields are no longer available, we will
determine the Index Rate by using a suitable and approved, if
required, replacement method.
A Market Value Adjustment may be positive, negative or result in no
change. In general, if interest rates are rising, you bear the risk
that any Market Value Adjustment will likely be negative and reduce
your contract value. On the other hand, if interest rates are
falling, it is more likely that you will receive a positive Market
Value Adjustment that increases your contract value. In the event of
a full surrender, transfer or annuitization from a Fixed Interest
Allocation, we will add or subtract any Market Value Adjustment from
the amount surrendered, transferred or annuitized. In the event of a
partial withdrawal, transfer or annuitization, we will add or
subtract any Market Value Adjustment from the total amount withdrawn,
transferred or annuitized in order to provide the amount requested.
If a negative Market Value Adjustment exceeds your contract value in
the Fixed Interest Allocation, we will consider your request to be a
full surrender, transfer or annuitization of the Fixed Interest
Allocation.
Several examples which illustrate how the Market Value Adjustment
works are included in Appendix B.
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THE ANNUITY CONTRACT
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The Contract described in this prospectus is a deferred combination
variable and fixed annuity contract. The Contract provides a means
for you to invest in one or more of the available mutual fund
portfolios of the GCG Trust and the PIMCO Trust funded by Account NY-
B. It also provides a means for you to invest in a Fixed Interest
Allocation through the Fixed Account.
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CONTRACT DATE AND CONTRACT YEAR
The date the Contract became effective is the contract date.
Each 12-month period following the contract date is a contract year.
ANNUITY START DATE
The annuity start date is the date you start receiving annuity
payments under your Contract. The Contract, like all deferred
variable annuity contracts, has two phases: the accumulation phase
and the income phase. The accumulation phase is the period between
the contract date and the annuity start date. The income phase
begins when you start receiving regular annuity payments from your
Contract on the annuity start date.
CONTRACT OWNER
You are the contract 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 will determine the applicable death benefit if such
death benefit is available for multiple owners.
The death benefit becomes payable when you die. In the case of a
sole contract owner who dies before the income phase begins, we will
pay the beneficiary the death benefit then due. The sole contract
owner's estate will be the beneficiary if no beneficiary has been
designated or the beneficiary has predeceased the contract owner. In
the case of a joint owner of the Contract dying before the income
phase begins, we will designate the surviving contract owner as the
beneficiary. This will override any previous beneficiary
designation.
If the contract owner is a trust and a beneficial owner of the trust
has been designated, the beneficial owner will be treated as the
contract owner for determining the death benefit. If a beneficial
owner is changed or added after the contract date, this will be
treated as a change of contract owner for determining the death
benefit. If no beneficial owner of the Trust has been designated,
the availability of enhanced death benefits will be based on the age
of the annuitant at the time you purchase the Contract.
JOINT OWNER. For non-qualified Contracts only, joint owners may
be named in a written request before the Contract is in effect.
Joint owners may independently exercise transfers and other
transactions allowed under the Contract. All other rights of
ownership must be exercised by both owners. Joint owners own equal
shares of any benefits accruing or payments made to them. All rights
of a joint owner end at death of that owner if the other joint owner
survives. The entire interest of the deceased joint owner in the
Contract will pass to the surviving joint owner. The age of the
older owner will determine the applicable death benefit if Enhanced
Death Benefits are available for multiple owners.
ANNUITANT
The annuitant is the person designated by you to be the measuring
life in determining annuity payments. The annuitant's age determines
when the income phase must begin and the amount of the annuity
payments to be paid. You are the annuitant unless you choose to name
another person. The annuitant may not be changed after the Contract
is in effect.
The contract owner will receive the annuity benefits of the Contract
if the annuitant is living on the annuity start date. If the
annuitant dies before the annuity start date, and a contingent
annuitant has been named, the contingent annuitant becomes the
annuitant (unless the contract owner is not an individual, in which
case the death benefit becomes payable).
If there is no contingent annuitant when the annuitant dies before
the annuity start date, the contract owner will become the annuitant.
The contract 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 before
the annuity start date and the contract owner is not an individual,
we will pay the designated beneficiary the death benefit then due. If a
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beneficiary has not been designated, or if there is no
designated beneficiary living, the contract owner will be the
beneficiary. If the annuitant was the sole contract 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 contract owner is not an individual, distribution rules
under federal tax law will apply. You should consult your tax
advisor for more information if you are not an individual.
BENEFICIARY
The beneficiary is named by you in a written request. The
beneficiary is the person who receives any death benefit proceeds and
who becomes the successor contract owner if the contract owner (or
the annuitant if the contract owner is other than an individual) dies
before the annuity start date. We pay death benefits to the primary
beneficiary (unless there are joint owners, in which case death
proceeds are payable to the surviving owner(s)).
If the beneficiary dies before the annuitant or the contract 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 contract owner's estate.
One or more persons may be a beneficiary or contingent beneficiary.
In the case of more than one beneficiary, 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 some of
the rights and options under the Contract.
CHANGE OF CONTRACT OWNER OR BENEFICIARY. During the annuitant's
lifetime, you may transfer ownership of a non-qualified Contract. A
change in ownership may affect the amount of the death benefit and
the guaranteed death benefit. You may also change the beneficiary.
All requests for changes must be in writing and submitted to our
Customer Service Center in good order. The change will be effective
as of the day you sign the request. The change will not affect any
payment made or action taken by us before recording the change.
PURCHASE AND AVAILABILITY OF THE CONTRACT
We will issue a Contract only if both the annuitant and the contract
owner are not older than age 85.
The initial premium payment must be $10,000 or more ($1,500 for
qualified Contracts). You may make additional payments of $500 or
more ($250 for qualified Contracts) at any time after the free look
period before you turn age 85. Under certain circumstances, we may
waive the minimum premium payment requirement. We may also change
the minimum initial or additional premium requirements for certain
group or sponsored arrangements. Any initial or additional premium
payment that would cause the contract value of all annuities that you
maintain with us to exceed $1,000,000 requires our prior approval.
CREDITING OF PREMIUM PAYMENTS
We will allocate your initial premium within 2 business days after
receipt, if the application and all information necessary for
processing the Contract are complete. Subsequent premium payments
will be credited to a Contract within 1 business day if they are
received in good order. In certain states we also accept initial and
additional premium payments by wire order. Wire transmittals must be
accompanied by sufficient electronically transmitted data. We may
retain premium payments for up to 5 business days while attempting to
complete an incomplete application. If the application cannot be
completed within this period, we will inform you of the reasons for
the delay. We will also return the premium payment immediately
unless you direct us to hold the premium payment until the
application is completed. Once the completed application is
received, we will allocate the payment to the subaccounts and/or
Fixed Interest Allocations specified by you within 2 business days.
We will make inquiry to discover any missing information related to
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subsequent payments. For any subsequent premium payments, the
payment will be credited at the accumulation unit value next
determined after receipt of your premium payment.
Once we allocate your premium payment to the subaccounts selected by
you, we convert the premium payment into accumulation units. We
divide the amount of the premium payment allocated to a particular
subaccount by the value of an accumulation unit for the subaccount to
determine the number of accumulation units of the subaccount to be
held in Account NY-B with respect to your Contract. The net
investment results of each subaccount vary with its investment
performance.
We may require that an initial premium designated for a subaccount of
Account NY-B or the Fixed Account be allocated to a subaccount
specially designated by the Company (currently, the Liquid Asset
subaccount) during the free look period. After the free look period,
we will convert your contract value (your initial premium plus any
earnings less any expenses) into accumulation units of the
subaccounts you previously selected. The accumulation units will be
allocated based on the accumulation unit value next computed for each
subaccount. Initial premiums designated for Fixed Interest
Allocations will be allocated to a Fixed Interest Allocation with the
guaranteed interest period you have chosen; however, in the future we
may allocate the premiums to the specially designated subaccount
during the free look period.
CONTRACT VALUE
We determine your contract value on a daily basis beginning on the
contract date. Your contract value is the sum of (a) the contract
value in the Fixed Interest Allocations, and (b) the contract value
in each subaccount in which you are invested.
CONTRACT VALUE IN FIXED INTEREST ALLOCATIONS. The contract value
in your Fixed Interest Allocations is the sum of premium payments
allocated to the Fixed Interest Allocations under the Contract, plus
contract value transferred to the Fixed Interest Allocations, plus
credited interest, minus any transfers and withdrawals from the Fixed
Interest Allocation (including any Market Value Adjustment applied to
such withdrawals), contract fees, and premium taxes.
CONTRACT VALUE IN THE SUBACCOUNTS. On the contract date, the
contract value in the subaccount in which you are invested is equal
to the initial premium paid and designated to be allocated to the
subaccount. On the contract date, we allocate your contract value to
each subaccount and/or a Fixed Interest Allocation specified by you,
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 Interest
Allocation will be allocated to a subaccount specially designated by
the Company during the free look period for this purpose (currently,
the Liquid Asset subaccount).
On each business day after the contract date, we calculate the amount
of contract value in each subaccount as follows:
(1)We take the contract value in the subaccount at the end of the
preceding business day.
(2)We multiply (1) by the subaccount's Net Investment Factor
since the preceding business day.
(3)We add (1) and (2).
(4)We add to (3) any additional premium payments, and then add or
subtract any transfers to or from that subaccount.
(5)We subtract from (4) any withdrawals and any related charges,
and then subtract any contract fees and premium taxes.
CASH SURRENDER VALUE
The cash surrender value is the amount you receive when you surrender
the Contract. The cash surrender value will fluctuate daily based on
the investment results of the subaccounts in which you are invested
and interest credited to Fixed Interest Allocations and any Market
Value Adjustment. We do not guarantee any minimum cash surrender
value. On any date during the accumulation phase, we calculate the cash
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surrender value as follows: we start with your contract value,
then we adjust for any Market Value Adjustment, then we deduct any
surrender charge, any charge for premium taxes, and any other charges
incurred but not yet deducted.
SURRENDERING TO RECEIVE THE CASH SURRENDER VALUE
You may surrender the Contract at any time while the annuitant is
living and before the annuity start date. A surrender will be
effective on the date your written request and the Contract are
received at our Customer Service Center. We will determine and pay
the cash surrender value at the price determined after receipt of
your request. Once paid, all benefits under the Contract will be
terminated. For administrative purposes, we will transfer your money
to a specially designated subaccount (currently the Liquid Asset
subaccount) prior to processing the surrender. This transfer will
have no effect on your cash surrender value. You may receive the
cash surrender value in a single sum payment or apply it under one or
more annuity options. We will usually pay the cash surrender value
within 7 days.
Consult your tax advisor regarding the tax consequences associated
with surrendering your Contract. A surrender made before you reach
age 59 1/2 may result in a 10% tax penalty. See "Federal Tax
Considerations" for more details.
ADDITION, DELETION OR SUBSTITUTION OF SUBACCOUNTS AND OTHER CHANGES
We may make additional subaccounts available to you under the
Contract. These subaccounts will invest in investment portfolios we
find suitable for your Contract.
We may amend the Contract to conform to applicable laws or
governmental regulations. If we feel that investment in any of the
investment portfolios has become inappropriate to the purposes of the
Contract, we may, with approval of the SEC (and any other regulatory
agency, if required) substitute another portfolio for existing and
future investments.
We also reserve the right to: (i) deregister Account NY-B under the
1940 Act; (ii) operate Account NY-B as a management company under the
1940 Act if it is operating as a unit investment trust; (iii) operate
Account NY-B as a unit investment trust under the 1940 Act if it is
operating as a managed separate account; (iv) restrict or eliminate
any voting rights as to Account NY-B; and (v) combine Account NY-B
with other accounts.
We will, of course, provide you with written notice before any of
these changes are effected.
THE FIXED ACCOUNT
The Fixed Account is a segregated asset account which contains the
assets that support a contract owner's Fixed Interest Allocations.
See "The Fixed Interest Allocations" for more information.
OTHER CONTRACTS
We offer other variable annuity contracts that also invest in the
same portfolios of the Trusts. These contracts have different
charges that could effect their performance, and many offer different
benefits more suitable to your needs. To obtain more information
about these other contracts, contact our Customer Service Center or
your registered representative.
OTHER IMPORTANT PROVISIONS
See "Withdrawals," "Transfers Among Your Investments," "Death Benefit
Choices," "Charges and Fees," "The Annuity Options" and "Other
Contract Provisions" in this prospectus for information on other
important provisions in your Contract.
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WITHDRAWALS
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Any time during the accumulation phase and before the death of the
annuitant, you may withdraw all or part of your money. Keep in mind
that if you request a withdrawal for more than 90% of the cash
surrender value, we will treat it as a request to surrender the
Contract. If any single withdrawal or the sum of withdrawals exceeds
the Free Withdrawal Amount, you will incur a surrender charge. The
Free Withdrawal Amount in any contract year is 15% of your contract
value on the date of withdrawal less any withdrawals during that
contract year.
You need to submit to us a written request specifying the Fixed
Interest Allocations or subaccounts from which amounts are to be
withdrawn, otherwise the withdrawal will be made on a pro rata basis
from all of the subaccounts in which you are invested. If there is
not enough contract value in the subaccounts, we will deduct the
balance of the withdrawal from your Fixed Interest Allocations
starting with the guaranteed interest periods nearest their maturity
dates until we have honored your request. We will apply a Market
Value Adjustment to any withdrawal from your Fixed Interest
Allocation taken more than 30 days before its maturity date. We will
determine the contract value as of the close of business on the day
we receive your withdrawal request at our Customer Service Center.
The contract value may be more or less than the premium payments
made.
For administrative purposes, we will transfer your money to a
specially designated subaccount (currently, the Liquid Asset
subaccount) prior to processing the withdrawal. This transfer will
not effect the withdrawal amount you receive.
We offer the following three withdrawal options:
REGULAR WITHDRAWALS
After the free look period, you may make regular withdrawals. Each
withdrawal must be a minimum of $1,000. We will apply a Market Value
Adjustment to any regular withdrawal from a Fixed Interest Allocation
that is taken more than 30 days before its maturity date.
SYSTEMATIC WITHDRAWALS
You may choose to receive automatic systematic withdrawals on a
monthly, quarterly, or annual basis from the contract value in the
subaccounts in which you are invested or from your Fixed Interest
Allocations. You may elect payments to start as early as 28 days
after the contract date. You choose the date on which the
withdrawals will be made but this date cannot be later than the 28th
day of the month. If you do not choose a date, we will make the
withdrawals on the same calendar day of each month as the contract
date. Each withdrawal payment must be at least $100.
The amount of your withdrawal can either be a (i) fixed dollar
amount, or (ii) an amount based on a percentage of the contract value
from the subaccounts in which you are invested. Both options are
subject to the following maximums:
FREQUENCY MAXIMUM PERCENTAGE
Monthly 1.25%
Quarterly 3.75%
Annually 15.00%
If you select a fixed dollar amount and the amount to be
systematically withdrawn would exceed the applicable maximum
percentage of your contract value on the withdrawal date, we will
reduce the amount withdrawn so that it equals such percentage. If
you select a percentage and the amount to be systematically withdrawn
based on that percentage would be less than the minimum of $100, we
will increase the amount to $100 provided it does not exceed the
maximum percentage. If it is below the maximum percentage we will
send the $100. If it is above the maximum percentage we will send
the amount and then cancel the option.
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Systematic withdrawals from Fixed Interest Allocations are limited to
interest earnings during the prior month, quarter, or year, depending
on the frequency you choose. Systematic withdrawals are not subject
to a Market Value Adjustment unless you choose the fixed payment
option discussed below and the payments exceed your interest
earnings. A Fixed Interest Allocation may not participate in both
the systematic withdrawal option and the dollar cost averaging
program at the same time.
You may choose an option available under our systematic withdrawal
program that will allow you to receive systematic payments in fixed
amounts. Under this option, you choose the amount of the fixed
systematic withdrawal which may total up to 15% of your cumulative
premium payments, or in amounts calculated to satisfy Section 72(q)
or 72(t) of the Tax Code. Since the amount of the systematic fixed
payment under this option may exceed the Free Withdrawal Amount, (i)
a surrender charge would apply to the extent the systematic payment
exceeds the Free Withdrawal Amount, and (ii) a Market Value
Adjustment would apply to the extent the systematic payment exceeds
interest earnings on your Fixed Interest Allocations. Under this
option, we apply the surrender charge and any Market Value Adjustment
directly to your contract value (rather than the systematic payment)
so that the amount of your systematic withdrawals remain the amount
you requested.
Subject to the above, you may change the amount or percentage of your
systematic withdrawal once each contract year or cancel this option
at any time by sending satisfactory notice to our Customer Service
Center at least 7 days before the next scheduled withdrawal date.
You may elect to have this option commence in a contract year where a
regular withdrawal has been taken but you may not change the amount
or percentage of your withdrawals in any contract year during which
you have previously taken a regular withdrawal. You may not elect
this if you are taking IRA withdrawals. Regular IRA distributions in
excess of maximum systematic withdrawals may be subject to a
surrender charge.
IRA WITHDRAWALS
If you have a non-Roth IRA Contract and will be at least age 70 1/2
during the current calendar year, you may elect to have distributions
made to you to satisfy requirements imposed by Federal tax law. IRA
withdrawals provide payout of amounts required to be distributed by
the Internal Revenue Service rules governing mandatory distributions
under qualified plans. We will send you a notice before your
distributions commence. You may elect to take IRA withdrawals at
that time, or at a later date. You may not elect IRA withdrawals and
participate in systematic withdrawals at the same time. If you do
not elect to take IRA withdrawals, and distributions are required by
Federal tax law, distributions adequate to satisfy the requirements
imposed by Federal tax law may be made. Thus, if you are
participating in systematic withdrawals, distributions under that
option must be adequate to satisfy the mandatory distribution rules
imposed by federal tax law.
You may choose to receive IRA withdrawals on a monthly, quarterly or
annual basis. Under this option, you may elect payments to start as
early as 28 days after the contract date. 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, we will make the
withdrawals on the same calendar day of the month as the contract
date.
You may request that we calculate for you 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. When we determine the required IRA 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 IRA
withdrawal amount is greater than the contract value, we will cancel
the Contract and send you the amount of the cash surrender value.
You may change the payment frequency of your IRA withdrawals once
each contract year or cancel this option at any time by sending us
satisfactory notice to our Customer Service Center at least 7 days
before the next scheduled withdrawal date.
An IRA withdrawal in excess of the amount allowed under systematic
withdrawals will be subject to a Market Value Adjustment.
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CONSULT YOUR TAX ADVISOR REGARDING THE TAX CONSEQUENCES ASSOCIATED
WITH TAKING WITHDRAWALS. You are responsible for determining that
withdrawals comply with applicable law. A withdrawal made before the
taxpayer reaches age 59 1/2 may result in a 10% penalty tax. See
"Federal Tax Considerations" for more details.
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TRANSFERS AMONG YOUR INVESTMENTS
- ----------------------------------------------------------------------
You may transfer your contract value among the subaccounts in which
you are invested and your Fixed Interest Allocations at the end of
the free look period until the annuity start date. We currently do
not charge you for transfers made during a contract year, but reserve
the right to charge $25 for each transfer after the twelfth transfer
in a contract year. We also reserve the right to limit the number of
transfers you may make and may otherwise modify or terminate transfer
privileges if required by our business judgement or in accordance
with applicable law. We will apply a Market Value Adjustment to
transfers from a Fixed Interest Allocation taken more than 30 days
before its maturity date unless the transfer is made under the dollar
cost averaging program.
Transfers will be based on values at the end of the business day in
which the transfer request is received at our Customer Service Center.
The minimum amount that you may transfer is $100 or, if less, your
entire contract value held in a subaccount or a Fixed Interest Allocation.
To make a transfer, you must notify our Customer Service Center and
all other administrative requirements must be met. Any transfer
request received after 4:00 p.m. eastern time or the close of the New
York Stock Exchange will be effected on the next business day.
Account NY-B and the Company will not be liable for following
instructions communicated by telephone that we reasonably believe to
be genuine. We require personal identifying information to process a
request for transfer made over the telephone.
DOLLAR COST AVERAGING
You may elect to participate in our dollar cost averaging program if
you have at least $1,200 of contract value in the (i) Limited
Maturity Bond subaccount or the Liquid Asset subaccount, or (ii) a
Fixed Interest Allocation with a 1-year guaranteed interest period.
These subaccounts or Fixed Interest Allocation serve as the source
accounts from which we will, on a monthly basis, automatically
transfer a set dollar amount of money to other subaccounts selected
by you.
The dollar cost averaging program is designed to lessen the impact of
market fluctuation on your investment. Since we transfer the same
dollar amount to other subaccounts each month, more units of a
subaccount are purchased if the value of its unit is low and less
units are purchased if the value of its unit is high. Therefore, a
lower than average value per unit may be achieved over the long term.
However, we cannot guarantee this. When you elect the dollar cost
averaging program, you are continuously investing in securities
regardless of fluctuating price levels. You should consider your
tolerance for investing through periods of fluctuating price levels.
You elect the dollar amount you want transferred under this program.
Each monthly transfer must be at least $100. If your source account
is the Limited Maturity Bond subaccount, the Liquid Asset subaccount
or a 1-year Fixed Interest Allocation, the maximum amount that can be
transferred each month is your contract value in such source account
divided by 12. You may change the transfer amount once each contract
year.
Transfers from a Fixed Interest Allocation under the dollar cost
averaging program are not subject to a Market Value Adjustment.
If you do not specify the subaccounts to which the dollar amount of
the source account is to be transferred, we will transfer the money
to the subaccounts in which you are invested on a proportional basis.
The transfer date is the same day each month as your contract date.
If, on any transfer date, your contract value
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in a source account is equal or less than the amount you have elected
to have transferred, the entire amount will be transferred and the
program will end. You may terminate the dollar cost averaging program
at any time by sending satisfactory notice to our Customer Service
Center at least 7 days before the next transfer date. A Fixed Interest
Allocation may not participate in the dollar cost averaging program
and in systematic withdrawals at the same time.
We may in the future offer additional subaccounts or withdraw any
subaccount or Fixed Interest Allocation to or from the dollar cost
averaging program, or otherwise modify, suspend or terminate this
program. Of course, such change will not affect any dollar cost
averaging programs in operation at the time.
AUTOMATIC REBALANCING
If you have at least $10,000 of contract value invested in the
subaccounts of Account NY-B, you may elect to have your investments
in the subaccounts automatically rebalanced. We will transfer funds
under your Contract on a quarterly, semi-annual, or annual calendar
basis among the subaccounts to maintain the investment blend of your
selected subaccounts. The minimum size of any allocation 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 withdrawal option only if 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, send satisfactory notice to
our Customer Service Center. We will begin the program on the last
business day of the 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 contract value among the
subaccounts 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.
[Shaded Section Header]
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DEATH BENEFIT CHOICES
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DEATH BENEFIT DURING THE ACCUMULATION PHASE
During the accumulation phase, a death benefit is payable when either
the annuitant (when contract owner is not an individual), the
contract owner or the first of joint owners dies. Assuming you are
the contract owner, your beneficiary will receive a death benefit
unless the beneficiary is your surviving spouse and elects to
continue the Contract. The death benefit value is calculated at the
close of the business day on which we receive proof of death at our
Customer Service Center. If your beneficiary elects to delay receipt
of the death benefit until a date after the time of death, the amount
of the benefit payable in the future may be affected. The proceeds
may be received in a single sum or applied to any of the annuity
options. If we do not receive a request to apply the death benefit
proceeds to an annuity option, we will make a single sum
distribution. We will generally pay death benefit proceeds within 7
days after our Customer Service Center has received sufficient
information to make the payment.
You may choose from the following 2 death benefit choices: (1) the
Standard Death Benefit Option; and (2) the Annual Ratchet Enhanced
Death Benefit Option. Once you choose a death benefit, it cannot be
changed. We may in the future stop or suspend offering any of the
enhanced death benefit options to new Contracts. A change in
ownership of the Contract may affect the amount of the death benefit
and the guaranteed death benefit.
STANDARD DEATH BENEFIT. You will automatically receive the
Standard Death Benefit unless you choose the Annual Ratchet Enhanced
Death Benefit. The Standard Death Benefit under the Contract is the
greatest of (i) your contract value; (ii) total premium payments less
any withdrawals; and (iii) the cash surrender value.
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ANNUAL RATCHET ENHANCED DEATH BENEFIT. The Annual Ratchet Enhanced
Death Benefit under the Contract is the greatest of (i) the contract
value; (ii) total premium payments less any withdrawals; (iii) the
cash surrender value; and (iv) the enhanced death benefit as
calculated below.
|--------------------------------------------------------------------|
| |
| HOW THE ENHANCED DEATH BENEFIT IS CALCULATED |
| FOR THE ANNUAL RATCHET ENHANCED DEATH BENEFIT |
| |
|--------------------------------------------------------------------|
| On each contract anniversary that occurs on or before the |
| contract owner turns age 80, we compare the prior enhanced |
| death benefit to the contract value and select the larger |
| amount as the new enhanced death benefit. |
| On all other days, the enhanced death benefit is the amount |
| determined below. We first take the enhanced death benefit |
| from the preceding day (which would be the initial premium if |
| the valuation date is the contract date) and then we add |
| additional premiums paid since the preceding day, then we |
| subtract any withdrawals (including any Market Value |
| Adjustment applied to such withdrawals) since the preceding |
| day, then we subtract any associated surrender charges. That |
| amount becomes the new enhanced death benefit. |
|--------------------------------------------------------------------|
The Annual Ratchet Enhanced Death Benefit is available only at the
time you purchase your Contract and only if the contract owner or
annuitant (when the contract owner is other than an individual) is
not more than 79 years old at the time of purchase. The Annual
Ratchet Enhanced Death Benefit may not be available where a Contract
is held by joint owners.
DEATH BENEFIT DURING THE INCOME PHASE
If any contract owner or the annuitant dies after the annuity start
date, the Company will pay the beneficiary any certain benefit
remaining under the annuity in effect at the time.
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CHARGES AND FEES
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We deduct the charges described below to cover our cost and expenses,
services provided and risks assumed under the Contracts. We incur
certain costs and expenses for distributing and administrating the
Contracts, for paying the benefits payable under the Contracts and
for bearing various risks associated with the Contracts. The amount
of a charge will not always correspond to the actual costs
associated. For example, the surrender charge collected may not
fully cover all of the distribution expenses incurred by us with the
service or benefits provided. In the event there are any profits
from fees and charges deducted under the Contract, we may use such
profits to finance the distribution of contracts.
CHARGE DEDUCTION SUBACCOUNT
You may elect to have all charges against your contract value
deducted directly from a single subaccount designated by the Company.
Currently we use the Liquid Asset subaccount for this purpose. If
you do not elect this option, or if the amount of the charges is
greater than the amount in the designated subaccount, the charges
will be deducted as discussed below. You may cancel this option at
any time by sending satisfactory notice to our Customer Service
Center.
CHARGES DEDUCTED FROM THE CONTRACT VALUE
We deduct the following charges from your contract value:
SURRENDER CHARGE. We will deduct a contingent deferred sales
charge (a "surrender charge") if you surrender your Contract or if
you take a withdrawal in excess of the Free Withdrawal Amount during
the 7-year period from the date we receive and accept a premium
payment. The surrender charge is based on a percentage of each
premium payment. This charge is intended to cover sales expenses
that we have incurred. We may in the future reduce or waive the
surrender charge in certain situations and will never
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charge more than the maximum surrender charges. The percentage of
premium payments deducted at the time of surrender or excess withdrawal
depends on 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 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7+
SINCE PREMIUM PAYMENT | | | | | | |
SURRENDER CHARGE 7% | 6% | 5% | 4% | 3% | 2% | 1% | 0%
FREE WITHDRAWAL AMOUNT. The Free Withdrawal Amount in any
contract year is 15% of your contract value on the date of withdrawal
less any withdrawals during that contract year.
SURRENDER CHARGE FOR EXCESS WITHDRAWALS. We will deduct a
surrender charge for excess withdrawals. We consider a withdrawal to
be an "excess withdrawal" when the amount you withdraw in any
contract year exceeds the Free Withdrawal Amount. Where you are
receiving systematic withdrawals, any combination of regular
withdrawals taken and any systematic withdrawals expected to be
received in a contract year will be included in determining the
amount of the excess 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. We will deduct such
charges from the contract value in proportion to the contract value
in each subaccount or Fixed Interest Allocation from which the excess
withdrawal was taken. In instances where the excess withdrawal
equals the entire contract value in such subaccounts or Fixed
Interest Allocations, we will deduct charges proportionately from all
other subaccounts and Fixed Interest Allocations in which you are
invested. ANY WITHDRAWAL FROM A FIXED INTEREST ALLOCATION MORE THAN
30 DAYS BEFORE ITS MATURITY DATE WILL TRIGGER A MARKET VALUE ADJUSTMENT.
For the purpose of calculating the surrender charge for an excess
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 withdrawal are not considered a withdrawal of any premium
payments. We have included an example of how this works in Appendix
C. Although we treat premium payments as being withdrawn before
earnings for purpose of calculating the surrender charge for excess
withdrawals, the federal tax law treats earnings as withdrawn first.
PREMIUM TAXES. We may make a charge for state and local premium
taxes depending on the contract owner's state of residence. The tax
can range from 0% to 3.5% of the premium. We have the right to change
this amount to conform with changes in the law or if the contract
owner changes state of residence.
We deduct the premium tax from your contract value on the annuity
start date. However, some jurisdictions impose a premium tax at the
time that initial and additional premiums are paid, regardless of
when the annuity payments begin. In those states we may defer
collection of the premium taxes from your contract value and deduct
it on surrender of the Contract, on excess withdrawals or on the
annuity start date.
ADMINISTRATIVE CHARGE. We deduct an annual administrative charge
on each Contract anniversary, or if you surrender your Contract prior
to a Contract anniversary, at the time we determine the cash
surrender value payable to you. The amount deducted is $30 per
Contract. This charge is waived if you have a contract value
exceeding $100,000 at the end of a contract year or the sum of the
premiums paid equals or exceeds $100,000. We deduct the charge
proportionately from all subaccounts in which you are invested. If
there is no contract value in those subaccounts, we will deduct the
charge from your Fixed Interest Allocations starting with the
guaranteed interest periods nearest their maturity dates until the
charge has been paid.
TRANSFER CHARGE. We currently do not deduct any charges for
transfers made during a contract year. We have the right, however,
to assess up to $25 for each transfer after the twelfth transfer in a
contract year. If such a charge is assessed, we would deduct the
charge from the subaccounts and the Fixed Interest Allocations from
which each such transfer is made in proportion to the amount being
transferred from each such subaccount and Fixed Interest Allocation
unless you have chosen to have all charges deducted from a single
subaccount. The charge will not apply to any transfers due to the
election of dollar cost averaging,
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automatic rebalancing and transfers we make to and from any subaccount
specially designated by the Company for such purpose.
CHARGES DEDUCTED FROM THE SUBACCOUNTS
MORTALITY AND EXPENSE RISK CHARGE. The amount of the mortality
and expense risk charge depends on the death benefit you have
elected. If you have elected the Standard Death Benefit, the charge,
on an annual basis, is equal to 1.10% of the assets you have in each
subaccount. The charge is deducted on each business day at the rate
of .003030% for each day since the previous business day. If you
have elected the Annual Ratchet Enhanced Death Benefit, the charge,
on an annual basis, is equal to 1.25% of the assets you have in each
subaccount. The charge is deducted each business day at the rate of
.003446% for each day since the previous business day.
ASSET-BASED ADMINISTRATIVE CHARGE. We will deduct a daily charge
from the assets in each subaccount to compensate us for a portion of
the administrative expenses under the Contract. The daily charge is
at a rate of .000411% (equivalent to an annual rate of 0.15%) on the
assets in each subaccount.
TRUST EXPENSES
There are fees and charges deducted from each investment portfolio of
the Trusts. Please read the respective Trust prospectus for details.
[Shaded Section Header]
- ----------------------------------------------------------------------
THE ANNUITY OPTIONS
- ----------------------------------------------------------------------
ANNUITIZATION OF YOUR CONTRACT
If the annuitant and contract owner are living on the annuity start
date, we will begin making payments to the contract owner under an
income plan. We will make these payments under the annuity option
chosen. You may change annuity option by making a written request to
us at least 30 days before the annuity start date. The amount of the
payments will be determined by applying your contract value adjusted
for any applicable Market Value Adjustment on the annuity start date
in accordance with the annuity option you chose.
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 start date. If, at the time of the
contract owner's death or the annuitant's death (if the contract
owner is not an individual), no option has been chosen for paying
death benefit proceeds, the beneficiary may choose an annuity 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 contract
value is less than $2,000 or if the calculated monthly annuity income
payment is less than $20.
For each annuity option we will issue a separate written agreement
putting the annuity option into effect. Before we pay any annuity
benefits, we require the return of your Contract. If your Contract
has been lost, we will require that you complete and return the
applicable lost Contract form. Various factors will affect the level
of annuity benefits, such as the annuity option chosen, the
applicable payment rate used and the investment performance of the
portfolios and interest credited to the Fixed Interest Allocations.
Our current annuity options provide only for fixed payments. Fixed
annuity payments are regular payments, the amount of which is fixed
and guaranteed by us. Some fixed annuity options provide fixed
payments either for a specified period of time or for the life of the
annuitant. The amount of life income payments will depend on the
form and duration of payments you chose, the age of the annuitant or
beneficiary (and gender, where appropriate), the total contract value
applied to purchase a Fixed Interest Allocation, and the applicable
payment rate.
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Our approval is needed for any option where:
(1)The person named to receive payment is other than the contract
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.
SELECTING THE ANNUITY START DATE
You select the date on which the annuity payments commence. The
annuity start date must be at least 5 years from the contract date
but before the month immediately following the annuitant's 90th
birthday. If, on the annuity start date, a surrender charge remains,
the elected annuity option must include a period certain of at least
5 years.
If you do not select an annuity start date, it will automatically
begin in the month following the annuitant's 90th birthday.
If the annuity start 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" and the Statement of Additional Information. For a
Contract purchased in connection with a qualified plan, other than a
Roth IRA, distributions must commence not later than April 1st of the
calendar year following the calendar year in which you attain age 70
1/2 or, in some cases, retire. Distributions may be made through
annuitization or withdrawals. Consult your tax advisor.
FREQUENCY OF ANNUITY PAYMENTS
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, we will make the payments monthly. There
may be certain restrictions on minimum payments that we will allow.
THE ANNUITY OPTIONS
We offer the 4 annuity options shown below. Payments under Options
1, 2 and 3 are fixed. Payments under Option 4 may be fixed or
variable. For a fixed annuity option, the contract value in the
subaccounts is transferred to the Company's general account.
OPTION 1. INCOME FOR A FIXED PERIOD. Under this option, we make
monthly payments in equal installments for a fixed number of years
based on the contract value on the annuity start date. We guarantee
that each monthly payment will be at least the amount stated in your
Contract. If you prefer, you may request that payments be made in
annual, semi-annual or quarterly installments. We will provide you
with illustrations if you ask for them. If the cash surrender value
or contract value is applied under this option, a 10% penalty tax may
apply to the taxable portion of each income payment until the
contract owner reaches age 59 1/2.
OPTION 2. INCOME FOR LIFE WITH A PERIOD CERTAIN. Payment is made
for the life of the annuitant in equal monthly installments and
guaranteed for at least a period certain such as 10 or 20 years.
Other periods certain may be available to you on request. You may
choose a refund period 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 specified in the Contract corresponding to the person's age on
his or her last birthday before the annuity start date. Amounts for
ages not shown in the Contract are available if you ask for them.
OPTION 3. JOINT LIFE INCOME. This option is available when there
are 2 persons named to determine annuity payments. At least one of
the persons named must be either the contract owner or beneficiary of
the Contract. We guarantee monthly payments will be 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 if you ask
for them.
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OPTION 4. ANNUITY PLAN. The contract value can be applied to any
other annuitization plan that we choose to offer on the annuity start
date.
PAYMENT WHEN NAMED PERSON DIES
When the person named to receive payment dies, we will pay any
amounts still due as provided in the annuity agreement between you
and First Golden. The amounts we will pay are determined as follows:
(1)For Option 1, or any remaining guaranteed payments under
Option 2, we will continue payments. 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 option agreement will state the
amount we will pay, if any.
[Shaded Section Header]
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OTHER CONTRACT PROVISIONS
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REPORTS TO CONTRACT OWNERS
We will send you a quarterly report within 31 days after the end of
each calendar quarter. The report will show the contract value, cash
surrender value, and the death benefit as of the end of the calendar
quarter. The report will also show the allocation of your contract
value and reflects the amounts deducted from or added to the contract
value since the last report. We will also send you copies of any
shareholder reports of the investment portfolios in which Account NY-
B invests, as well as any other reports, notices or documents we are
required by law to furnish to you.
SUSPENSION OF PAYMENTS
The Company reserves the right to suspend or postpone the date of any
payment or determination of values on any business day (1) when the
New York Stock Exchange is closed; (2) when trading on the New York
Stock Exchange is restricted; (3) when an emergency exists as
determined by the Securities and Exchange Commission so that the sale
of securities held in Account NY-B may not reasonably occur or so
that the Company may not reasonably determine the value of Account NY-
B's net assets; or (4) during any other period when the Securities
and Exchange Commission so permits for the protection of security
holders. We have the right to delay payment of amounts from a Fixed
Interest Allocation for up to 6 months.
IN CASE OF ERRORS IN YOUR APPLICATION
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.
ASSIGNING THE CONTRACT AS COLLATERAL
You may assign a non-qualified Contract as collateral security for a
loan but understand that your rights and any beneficiary's rights may
be subject to the terms of the assignment. An assignment may have
federal tax consequences. 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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CONTRACT CHANGES APPLICABLE TAX LAW
We have the right to make changes in the Contract to continue to
qualify the Contract as an annuity. You will be given advance notice
of such changes.
FREE LOOK
You may cancel your Contract within your 10-day free look period. We
deem the free look period to expire 15 days after we mail the
Contract to you. To cancel, you need to send your Contract to our
Customer Service Center or to the agent from whom you purchased it.
We will refund the contract value. For purposes of the refund during
the free look period, your contract value includes a refund of any
charges deducted from your contract value. Because of the market
risks associated with investing in the portfolios, the contract value
returned may be greater or less than the premium payment you paid.
We may, in our discretion, require that premiums designated for
investment in the subaccounts as well as premiums designated for a
Fixed Interest Allocation be allocated to the specially designated
subaccount during the free look period. Your Contract is void as of
the day we receive your Contract and your request. We determine your
contract value at the close of business on the day we receive your
written refund request. If you keep your Contract after the free
look period, we will put your money in the subaccount(s) chosen by
you, based on the accumulation unit value next computed for each
subaccount, and/or in the Fixed Interest Allocation chosen by you.
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 an alternative or reduced death benefit.
SELLING THE CONTRACT
Directed Services, Inc. is principal underwriter and distributor of
the Contract as well as for other contracts issued through Account NY-
B and other separate accounts of First Golden and Golden American
Life Insurance Company. We pay Directed Services Inc. for acting as
principal underwriter under a distribution agreement, which in turn
pays the writing agent. The principal address of Directed Services
is 1475 Dunwoody Drive, West Chester, Pennsylvania 19380.
Directed Services enters into sales agreements with broker-dealers to
sell the Contracts through registered representatives who are
licensed to sell securities and variable insurance products. These
broker-dealers are registered with the SEC and are members of the
National Association of Securities Dealers, Inc. Directed Services
receives a maximum of 6.5% commission, and passes through 100% of the
commission to the broker-dealer whose registered representative sold
the contract.
[Shaded Table Header]
Underwriter Compensation
|----------------------------------------------------------------------------|
| NAME OF PRINCIPAL | AMOUNT OF | OTHER |
| UNDERWRITER | COMMISSION TO BE PAID | COMPENSATION |
| | | |
| Directed Services, Inc. | Maximum of 6.5% | Reimbursement of any |
| | of any initial | covered expenses incurred|
| | or additional | by registered |
| | premium payments | representatives in |
| | except when combined | connection with |
| | with some annual | the distribution |
| | trail commissions. | of the Contracts. |
|----------------------------------------------------------------------------|
Certain sales agreements may provide for a combination of a certain
percentage of commission at the time of sale and an annual trail
commission (which when combined could exceed 6.5% of total premium
payments).
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[Shaded Section Header]
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OTHER INFORMATION
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VOTING RIGHTS
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 subaccount by
dividing the Contract's contract value in that subaccount by the net
asset value of one share of the portfolio in which a subaccount
invests. We count fractional votes. 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 receive your instructions in
time, we will vote the shares in the same proportion as the
instructions received from all Contracts in that subaccount. We will
also vote shares we hold in Account NY-B which are not attributable
to contract owners in the same proportion.
YEAR 2000 PROBLEM
Like other business organizations and individuals around the world,
First Golden and Account NY-B could be adversely affected if the
computer systems doing the accounts processing or on which First
Golden and/or Account NY-B relies do not properly process and
calculate date-related information related to the end of the year
1999. This is commonly known as the Year 2000 (or Y2K) Problem. The
management of First Golden is taking steps that it believes are
reasonably designed to address the Year 2000 Problem with respect to
the computer systems that it uses and to obtain satisfactory
assurances that comparable steps are being taken by its and Account
NY-B's major service providers. At this time, however, we cannot
guarantee that these steps will be sufficient to avoid any adverse
impact on First Golden and Account NY-B.
STATE REGULATION
We are regulated by the Insurance Department of the State of New
York. 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 where required by those
jurisdictions. 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
The Company and its parent, like other insurance companies, may be
involved in lawsuits, including class action lawsuits. In some class
action and other lawsuits involving insurers, substantial damages
have been sought and/or material settlement payments have been made.
We believe that currently there are no pending or threatened lawsuits
that are reasonably likely to have a material adverse impact on the
Company or Account NY-B.
LEGAL MATTERS
The legal validity of the Contracts was passed on by Myles R.
Tashman, Esquire, Executive Vice President, General Counsel and
Secretary of First Golden. Sutherland Asbill & Brennan LLP 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 and Account NY-B appearing or
incorporated by reference in the Statement of Additional Information
and Registration Statement have been audited by Ernst & Young LLP,
independent auditors, as set forth in their reports thereon appearing
or incorporated by reference in the Statement of Additional
Information and in
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the Registration Statement and are included or incorporated by reference
in reliance upon such reports given upon the authority of such firm as
experts in accounting and auditing.
[Shaded Section Header]
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FEDERAL TAX CONSIDERATIONS
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The following summary provides a general description of the federal
income tax considerations associated with this Contract and does not
purport to be complete or to cover all tax situations. This
discussion is not intended as tax advice. You should consult your
counsel or other competent tax advisers for more complete
information. This discussion is based upon our understanding of the
present federal income tax laws. We do not make any representations
as to the likelihood of continuation of the present federal income
tax laws or as to how they may be interpreted by the IRS.
TYPES OF CONTRACTS: NON-QUALIFIED OR QUALIFIED
The Contract may be purchased on a non-tax-qualified basis or
purchased on a tax-qualified basis. Qualified Contracts are designed
for use by individuals whom premium payments are comprised solely of
proceeds from and/or contributions under retirement plans that are
intended to qualify as plans entitled to special income tax treatment
under Sections 401(a), 403(b), 408, or 408A of the Code. The
ultimate effect of federal income taxes on the amounts held under a
Contract, or annuity payments, depends on the type of retirement
plan, on the tax and employment status of the individual concerned,
and on our tax status. In addition, certain requirements must be
satisfied in purchasing a qualified Contract with proceeds from a tax-
qualified plan and receiving distributions from a qualified Contract
in order to continue receiving favorable tax treatment. Some
retirement plans are subject to distribution and other requirements
that are not incorporated into our Contract administration
procedures. Contract owners, participants and beneficiaries are
responsible for determining that contributions, distributions and
other transactions with respect to the Contract comply with
applicable law. Therefore, you should seek competent legal and tax
advice regarding the suitability of a Contract for your particular
situation. The following discussion assumes that qualified Contracts
are purchased with proceeds from and/or contributions under
retirement plans that qualify for the intended special federal income
tax treatment.
TAX STATUS OF THE CONTRACTS
DIVERSIFICATION REQUIREMENTS. The Code requires that the
investments of a variable account be "adequately diversified" in
order for the Contracts to be treated as annuity contracts for
federal income tax purposes. It is intended that Account NY-B,
through the subaccounts, will satisfy these diversification
requirements.
In certain circumstances, owners of variable annuity contracts have
been considered for federal income tax purposes to be the owners of
the assets of the separate account supporting their contracts due to
their ability to exercise investment control over those assets. When
this is the case, the contract owners have been currently taxed on
income and gains attributable to the separate account assets. There
is little guidance in this area, and some features of the Contracts,
such as the flexibility of a contract owner to allocate premium
payments and transfer contract values, have not been explicitly
addressed in published rulings. While we believe that the Contracts
do not give contract owners investment control over Account NY-B
assets, we reserve the right to modify the Contracts as necessary to
prevent a contract owner from being treated as the owner of the
Account NY-B assets supporting the Contract.
REQUIRED DISTRIBUTIONS. In order to be treated as an annuity
contract for federal income tax purposes, the Code requires any non-
qualified Contract to contain certain provisions specifying how your
interest in the Contract will be distributed in the event of your
death. The non-qualified Contracts contain provisions that are
intended to comply with these Code requirements, although no
regulations interpreting these requirements have yet been issued. We
intend to review such provisions and modify them if necessary to
assure that they comply with the applicable requirements when such
requirements are clarified by regulation or otherwise.
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OTHER RULES MAY APPLY TO QUALIFIED CONTRACTS.
The following discussion assumes that the Contracts will qualify as
annuity contracts for federal income tax purposes.
TAX TREATMENT OF ANNUITIES
IN GENERAL. We believe that if you are a natural person you will
generally not be taxed on increases in the value of a Contract until
a distribution occurs or until annuity payments begin. (For these
purposes, the agreement to assign or pledge any portion of the
contract value, and, in the case of a qualified Contract, any portion
of an interest in the qualified plan, generally will be treated as a
distribution.)
TAXATION OF NON-QUALIFIED CONTRACTS
NON-NATURAL PERSON. The owner of any annuity contract who is not
a natural person generally must include in income any increase in the
excess of the contract value over the "investment in the contract"
(generally, the premiums or other consideration paid for the
contract) during the taxable year. There are some exceptions to this
rule and a prospective contract owner that is not a natural person
may wish to discuss these with a tax adviser. The following
discussion generally applies to Contracts owned by natural persons.
WITHDRAWALS. When a withdrawal from a non-qualified Contract
occurs, the amount received will be treated as ordinary income
subject to tax up to an amount equal to the excess (if any) of the
contract value (unreduced by the amount of any surrender charge)
immediately before the distribution over the contract owner's
investment in the Contract at that time. The tax treatment of market
value adjustments is uncertain. You should consult a tax adviser if
you are considering taking a withdrawal from your Contract in
circumstances where a market value adjustment would apply.
In the case of a surrender under a non-qualified Contract, the amount
received generally will be taxable only to the extent it exceeds the
contract owner's investment in the Contract.
PENALTY TAX ON CERTAIN WITHDRAWALS. In the case of a distribution
from a non-qualified Contract, there may be imposed a federal tax
penalty equal to 10% of the amount treated as income. In general,
however, there is no penalty on distributions:
o made on or after the taxpayer reaches age 59 1/2;
o made on or after the death of a contract owner;
o attributable to the taxpayer's becoming disabled; or
o made as part of a series of substantially equal periodic
payments for the life (or life expectancy) of the taxpayer.
Other exceptions may be applicable under certain circumstances and
special rules may be applicable in connection with the exceptions
enumerated above. A tax adviser should be consulted with regard to
exceptions from the penalty tax.
ANNUITY PAYMENTS. Although tax consequences may vary depending on
the payment option elected under an annuity contract, a portion of
each annuity payment is generally not taxed and the remainder is
taxed as ordinary income. The non-taxable portion of an annuity
payment is generally determined in a manner that is designed to allow
you to recover your investment in the Contract ratably on a tax-free
basis over the expected stream of annuity payments, as determined
when annuity payments start. Once your investment in the Contract
has been fully recovered, however, the full amount of each annuity
payment is subject to tax as ordinary income.
TAXATION OF DEATH BENEFIT PROCEEDS. Amounts may be distributed
from a Contract because of your death or the death of the annuitant.
Generally, such amounts are includible in the income of recipient as
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follows: (i) if distributed in a lump sum, they are taxed in the
same manner as a surrender of the Contract, or (ii) if distributed
under a payment option, they are taxed in the same way as annuity
payments.
TRANSFERS, ASSIGNMENTS, EXCHANGES AND ANNUITY DATES OF A CONTRACT.
A transfer or assignment of ownership of a Contract, the designation
of an annuitant, the selection of certain dates for commencement of
the annuity phase, or the exchange of a Contract may result in
certain tax consequences to you that are not discussed herein. A
contract owner contemplating any such transfer, assignment or
exchange, should consult a tax advisor as to the tax consequences.
WITHHOLDING. Annuity distributions are generally subject to
withholding for the recipient's federal income tax liability.
Recipients can generally elect, however, not to have tax withheld
from distributions.
MULTIPLE CONTRACTS. All non-qualified deferred annuity contracts
that are issued by us (or our affiliates) to the same contract owner
during any calendar year are treated as one non-qualified deferred
annuity contract for purposes of determining the amount includible in
such contract owner's income when a taxable distribution occurs.
TAXATION OF QUALIFIED CONTRACTS
The Contracts are designed for use with several types of qualified
plans. The tax rules applicable to participants in these qualified
plans vary according to the type of plan and the terms and
contributions of the plan itself. Special favorable tax treatment
may be available for certain types of contributions and
distributions. Adverse tax consequences may result from:
contributions in excess of specified limits; distributions before age
59 1/2 (subject to certain exceptions); distributions that do not
conform to specified commencement and minimum distribution rules; and
in other specified circumstances. Therefore, no attempt is made to
provide more than general information about the use of the Contracts
with the various types of qualified retirement plans. Contract
owners, annuitants, and beneficiaries are cautioned that the rights
of any person to any benefits under these qualified retirement plans
may be subject to the terms and conditions of the plans themselves,
regardless of the terms and conditions of the Contract, but we shall
not be bound by the terms and conditions of such plans to the extent
such terms contradict the Contract, unless the Company consents.
DISTRIBUTIONS. Annuity payments are generally taxed in the same
manner as under a non-qualified Contract. When a withdrawal from a
qualified Contract occurs, a pro rata portion of the amount received
is taxable, generally based on the ratio of the contract owner's
investment in the Contract (generally, the premiums or other
consideration paid for the Contract) to the participant's total
accrued benefit balance under the retirement plan. For Qualified
Contracts, the investment in the Contract can be zero. For Roth
IRAs, distributions are generally not taxed, except as described
below.
For qualified plans under Section 401(a) and 403(b), the Code
requires that distributions generally must commence no later than the
later of April 1 of the calendar year following the calendar year in
which the contract owner (or plan participant) (i) reaches age 70 1/2
or (ii) retires, and must be made in a specified form or manner. If
the plan participant is a "5 percent owner" (as defined in the Code),
distributions generally must begin no later than April 1 of the
calendar year following the calendar year in which the contract owner
(or plan participant) reaches age 70 1/2. For IRAs described in
Section 408, distributions generally must commence no later than the
later of April 1 of the calendar year following the calendar year in
which the contract owner (or plan participant) reaches age 70 1/2.
Roth IRAs under Section 408A do not require distributions at any time
before the contract owner's death.
WITHHOLDING. Distributions from certain qualified plans generally
are subject to withholding for the contract owner's federal income
tax liability. The withholding rates vary according to the type of
distribution and the contract owner's tax status. The contract owner
may be provided the opportunity to elect not to have tax withheld
from distributions. "Eligible rollover distributions" from section
401(a) plans and section 403(b) tax-sheltered annuities are subject
to a mandatory federal income tax withholding of 20%. An eligible
rollover distribution is the taxable portion of any distribution from
such a plan, except certain distributions that are required by the
Code or distributions in a specified annuity form. The 20% withholding
does not
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apply, however, if the contract owner chooses a "direct rollover" from
the plan to another tax-qualified plan or IRA.
Brief descriptions of the various types of qualified retirement plans
in connection with a Contract follow. We will endorse the Contract as
necessary to conform it to the requirements of such plan.
REQUIRED DISTRIBUTIONS UPON CONTRACT OWNER'S DEATH
We will not allow any payment of benefits provided under the Contract
which do not satisfy the requirements of Section 72(s) of the Code.
If any owner of a non-qualified Contract dies before the annuity
start date, the death benefit payable to the beneficiary will be
distributed as follows: (a) the death benefit must be completely
distributed within 5 years of the contract owner's date of death; or
(b) the beneficiary may elect, within the 1-year period after the
contract owner's date of death, to receive the death benefit in the
form of an annuity from us, provided that (i) such annuity is
distributed in substantially equal installments over the life of such
beneficiary or over a period not extending beyond the life expectancy
of such beneficiary; and (ii) such distributions begin not later than
1 year after the contract owner's date of death.
Notwithstanding (a) and (b) above, if the sole contract owner's
beneficiary is the deceased owner's surviving spouse, then such
spouse may elect to continue the Contract under the same terms as
before the contract owner's death. Upon receipt of such election
from the spouse at our Customer Service Center: (1) all rights of
the spouse as contract owner's beneficiary under the Contract in
effect prior to such election will cease; (2) the spouse will become
the owner of the Contract and will also be treated as the contingent
annuitant, if none has been named and only if the deceased owner was
the annuitant; and (3) all rights and privileges granted by the
Contract or allowed by First Golden will belong to the spouse as
contract owner of the Contract. This election will be deemed to have
been made by the spouse if such spouse makes a premium payment to the
Contract or fails to make a timely election as described in this
paragraph. If the owner's beneficiary is a nonspouse, the
distribution provisions described in subparagraphs (a) and (b) above,
will apply even if the annuitant and/or contingent annuitant are
alive at the time of the contract owner's death.
If we do not receive an election from a nonspouse owner's beneficiary
within the 1-year period after the contract owner's date of death,
then we will pay the death benefit to the owner's beneficiary in a
cash payment within five years from date of death. We will determine
the death benefit as of the date we receive proof of death. We will
make payment of the proceeds on or before the end of the 5-year
period starting on the owner's date of death. Such cash payment will
be in full settlement of all our liability under the Contract.
If the contract owner dies after the annuity start date, we will
continue to distribute any benefit payable at least as rapidly as
under the annuity option then in effect. All of the contract owner's
rights granted under the Contract or allowed by us will pass to the
contract owner's beneficiary.
If the Contract has joint owners we will consider the date of death
of the first joint owner as the death of the contract owner and the
surviving joint owner will become the contract owner of the Contract.
CORPORATE AND SELF-EMPLOYED PENSION AND PROFIT SHARING PLANS
Section 401(a) of the Code permits corporate employers to establish
various types of retirement plans for employees, and permits self-
employed individuals to establish these plans for themselves and
their employees. These retirement plans may permit the purchase of
the Contracts to accumulate retirement savings under the plans.
Adverse tax or other legal consequences to the plan, to the
participant, or to both may result if this Contract is assigned or
transferred to any individual as a means to provide benefit payments,
unless the plan complies with all legal requirements applicable to
such benefits before transfer of the Contract. Employers intending
to use the Contract with such plans should seek competent advice.
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INDIVIDUAL RETIREMENT ANNUITIES
Section 408 of the Code permits eligible individuals to contribute to
an individual retirement program known as an "Individual Retirement
Annuity" or "IRA." These IRAs are subject to limits on the amount
that can be contributed, the deductible amount of the contribution,
the persons who may be eligible, and the time when distributions
commence. Also, distributions from certain other types of qualified
retirement plans may be "rolled over" or transferred on a tax-
deferred basis into an IRA. There are significant restrictions on
rollover or transfer contributions from Savings Incentive Match Plans
(SIMPLE), under which certain employers may provide contributions to
IRAs on behalf of their employees, subject to special restrictions.
Employers may establish Simplified Employee Pension (SEP) Plans to
provide IRA contributions on behalf of their employees. Sales of the
Contract for use with IRAs may be subject to special requirements of
the IRS.
ROTH IRAS
Section 408A of the Code permits certain eligible individuals to
contribute to a Roth IRA. Contributions to a Roth IRA, which are
subject to certain limitations, are not deductible, and must be made
in cash or as a rollover or transfer from another Roth IRA or other
IRA. A rollover from or conversion of an IRA to a Roth IRA may be
subject to tax, and other special rules may apply. Distributions
from a Roth IRA generally are not taxed, except that, once aggregate
distributions exceed contributions to the Roth IRA, income tax and a
10% penalty tax may apply to distributions made (1) before age 59 1/2
(subject to certain exceptions) or (2) during the five taxable years
starting with the year in which the first contribution is made to the
Roth IRA.
TAX SHELTERED ANNUITIES
Section 403(b) of the Code allows employees of certain Section
501(c)(3) organizations and public schools to exclude from their
gross income the premium payments made, within certain limits, on a
Contract that will provide an annuity for the employee's retirement.
These premium payments may be subject to FICA (social security) tax.
Distributions of (1) salary reduction contributions made in years
beginning after December 31, 1988; (2) earnings on those
contributions; and (3) earnings on amounts held as of the last year
beginning before January 1, 1989, are not allowed prior to age 59
1/2, separation from service, death or disability. Salary reduction
contributions may also be distributed upon hardship, but would
generally be subject to penalties.
ENHANCED DEATH BENEFIT
The Contract includes an Enhanced Death Benefit that in some cases
may exceed the greater of the premium payments or the contract value.
The Internal Revenue Service has not ruled whether an Enhanced Death
Benefit could be characterized as an incidental benefit, the amount
of which is limited in any Code section 401(a) pension or profit-
sharing plan or Code section 403(b) tax-sheltered annuity. Employers
using the Contract may want to consult their tax adviser regarding
such information. Further, the Internal Revenue Service has not
addressed in a ruling of general applicability whether a death
benefit provision such as the Enhanced Death Benefit provision in the
Contract comports with IRA qualification requirements.
OTHER TAX CONSEQUENCES
As noted above, the foregoing comments about the federal tax
consequences under the Contracts are not exhaustive, and special
rules are provided with respect to other tax situations not discussed
in this prospectus. Further, the federal income tax consequences
discussed herein reflect our understanding of current law, and the
law may change. Federal estate and state and local estate,
inheritance and other tax consequences of ownership or receipt of
distributions under a Contract depend on the individual circumstances
of each contract owner or recipient of the distribution. A competent
tax adviser should be consulted for further information.
POSSIBLE CHANGES IN TAXATION
Although the likelihood of legislative change is uncertain, there is
always the possibility that the tax treatment of the Contracts could
change by legislation or other means. It is also possible that any
change could be retroactive (that is, effective before the date of
the change). A tax adviser should be consulted with respect to
legislative developments and their effect on the Contract.
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MORE INFORMATION ABOUT FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW
YORK
SELECTED FINANCIAL DATA
The following selected financial data prepared in accordance with generally
accepted accounting principles ("GAAP") for First Golden should be read in
conjunction with the financial statements and notes thereto included in this
Prospectus.
On October 24, 1997, PFHI Holdings, Inc. ("PFHI"), a wholly owned subsidiary
of ING Groep N.V. ("ING") and a Delaware corporation, acquired all of the
outstanding capital stock of First Golden's ultimate parent, Equitable of Iowa
Companies, pursuant to a merger agreement. For financial statement purposes,
the change in control of First Golden was accounted for as a purchase effective
October 25, 1997. This merger resulted in a new basis of accounting reflecting
estimated fair values of assets and liabilities at the merger date. As a result,
the GAAP financial data presented below for the period after October 24, 1997,
is presented on the Post-Merger new basis of accounting, while the financial
statements for October 24, 1997 and prior periods are presented on the
Pre-Merger historical cost basis of accounting.
<TABLE>
<CAPTION>
SELECTED GAAP BASIS
FINANCIAL DATA
(IN THOUSANDS)
--------------------------------------------------
POST-MERGER | PRE-MERGER
-------------------------|------------------------
| FOR THE
FOR THE | PERIOD FOR THE
FOR THE PERIOD |JANUARY 1, PERIOD
YEAR OCTOBER 25, | 1997 DECEMBER 17,
ENDED 1997 THROUGH| THROUGH 1996 THROUGH
DECEMBER 31, DECEMBER 31,|OCTOBER 24, DECEMBER 31,
1998 1997 | 1997 1996
------------ ------------|----------- ------------
<S> <C> <C> |<C> <C>
Annuity Product Charges.................. $ 239 $ 8 | $ 4 --
Net Income before Federal Income Tax..... $ 1,277 $ 97 | $ 953 $ 65
Net Income............................... $ 775 $ 63 | $ 666 $ 42
Total Assets............................. $66,034 $33,927 | N/A $24,967
Total Liabilities........................ $38,924 $ 7,832 | N/A $ 24
Total Stockholder's Equity............... $27,110 $26,095 | N/A $24,943
</TABLE>
The following selected financial data was prepared on the basis of statutory
accounting practices ("SAP"), which have been prescribed by the Department of
Insurance of the State of New York and the National Association of Insurance
Commissioners. These practices differ in certain respects from GAAP. The
selected financial data should be read in conjunction with the financial
statements and notes thereto included in this Prospectus, which describe
the differences between SAP and GAAP. See First Golden's Annual Report for
more detail.
<TABLE>
<CAPTION>
SELECTED STATUTORY
FINANCIAL DATA
(IN THOUSANDS)
---------------------------
FOR THE YEARS ENDED
---------------------------
DECEMBER 31, DECEMBER 31,
1998 1997
------------ ------------
<S> <C> <C>
Premiums and Annuity Considerations.................. $ 9,005 $ 2,514
Net Income (Loss) before Federal Income Tax.......... $ (938) $ 635
Net Income (Loss).................................... $ (966) $ 439
Total Assets......................................... $62,469 $32,965
Total Liabilities.................................... $38,092 $ 7,541
Total Capital and Surplus............................ $24,377 $25,424
</TABLE>
BUSINESS ENVIRONMENT
The current business and regulatory environment remains challenging for
the insurance industry. The variable annuity competitive environment is
intense and is dominated by a number of large variable product companies
with strong distribution, name recognition and wholesaling capabilities.
Increasing competition from traditional insurance carriers as well as banks
and mutual fund companies offer consumers many choices. However, overall
demand for variable products remains strong for several reasons including:
strong stock market performance over the last five years; relatively low
interest rates; an aging U. S. population that is increasingly concerned
about retirement and estate planning, as well as maintaining their standard
of living in retirement; and potential reductions in government and
employer-provided benefits at retirement as well as lower public confidence
in the adequacy of those benefits.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS.
The purpose of this section is to discuss and analyze First Golden American
Life Insurance Company of New York's ("First Golden" or "Company") results
of operations. In addition, some analysis and information regarding financial
condition and liquidity and capital resources has also been provided. This
analysis should be read jointly with the Company's financial statements,
related notes and the Cautionary Statement Regarding Forward-Looking
Statements, which appear elsewhere in this Prospectus.
RESULTS OF OPERATIONS
MERGER. On October 23, 1997, Equitable of Iowa Companies ("Equitable")
shareholders approved an Agreement and Plan of Merger ("Merger Agreement")
dated July 7, 1997 among Equitable, PFHI Holdings, Inc. ("PFHI") and ING
Groep N.V. ("ING"). On October 24, 1997, PFHI, a Delaware corporation,
acquired all of the outstanding capital stock of Equitable according to
the Merger Agreement. PFHI is a wholly owned subsidiary of ING, a global
financial services holding company based in The Netherlands. Equitable,
an Iowa corporation, in turn, owned all the outstanding capital stock of
Equitable Life Insurance Company of Iowa and Golden American Life Insurance
Company ("Golden American" or "Parent") and their wholly owned subsidiaries.
In addition, Equitable owned all the outstanding capital stock of Locust
Street Securities, Inc., Equitable Investment Services, Inc. (subsequently
dissolved), Directed Services, Inc., Equitable of Iowa Companies Capital
Trust, Equitable of Iowa Companies Capital Trust II and Equitable of Iowa
Securities Network, Inc. (subsequently renamed ING Funds Distributor, Inc.).
In exchange for the outstanding capital stock of Equitable, ING paid total
consideration of approximately $2.1 billion in cash and stock and assumed
approximately $400 million in debt. As a result of this transaction,
Equitable was merged into PFHI, which was simultaneously renamed Equitable
of Iowa Companies, Inc. ("EIC"), a Delaware corporation.
For financial statement purposes, the change in control of the Company
through the ING merger was accounted for as a purchase effective October 25,
1997. This merger resulted in a new basis of accounting reflecting estimated
fair values of assets and liabilities at the merger date. As a result, the
Company's financial statements for the periods after October 24, 1997 are
presented on the Post-Merger new basis of accounting. The financial
statements for October 24, 1997 and prior periods are presented on the Pre-
Merger historical cost basis of accounting.
The purchase price was allocated to EIC and its subsidiaries with $25.9
million allocated to the Company. Goodwill of $1.4 billion was established
for the excess of the merger cost over the fair value of the assets and
liabilities of EIC with $96,000 attributed to the Company. Goodwill resulting
from the merger is being amortized over 40 years on a straight-line basis.
The carrying value will be reviewed periodically for any indication of
impairment in value.
The following analysis combines the Post-Merger and Pre-Merger activity for
1997 in order to compare to the results of 1998.
PREMIUMS. First Golden received policy approvals in New York on March 25,
1997 and in Delaware on December 23, 1997. The Company reported variable
annuity premiums of $29.2 million for the year ended December 31, 1998 and
$7.3 million for the year ended December 31, 1997.
For the Company's variable contracts, premiums collected are not reported as
revenues, but are reported as deposits to insurance liabilities. Revenues for
these products are recognized over time in the form of investment income and
product charges.
Premiums, net of reinsurance, for variable products from three significant
broker/dealers for the year ended December 31, 1998 totaled $27.5 million, or
94.4% of premiums ($6.9 million, or 94.5% from two significant broker/dealers
for the year ended December 31, 1997). One of these distributors sold 62.1%
of the Company's products in 1998 and 59.4% in 1997. This distributor has
discontinued the sales relationship by the end of 1998. The sales made by
this distributor are anticipated to be absorbed by other distribution
channels during 1999. Based on this assumption, the discontinuance of this
relationship is not anticipated to significantly impact the Company's sales
in 1999.
REVENUES. Product charges from variable annuities totaled $239,000 in
1998 and $12,000 in 1997 due to a full year's worth of sales in 1998,
compared to a partial year in 1997. Net investment income was $1.8
million for the year ended December 31, 1998. This was an increase of
6.3% compared to net investment income of $1.7 million for the year
ended December 31, 1997. The Company recognized a realized gain of
$24,000 from the sale of investments during the year ended December
31, 1998.
EXPENSES. The Company reported total insurance benefits and expenses
of $830,000 for the year ended December 31, 1998 and $698,000 for the
year ended December 31, 1997. Insurance benefits and expenses consisted
of interest credited to account balances, commissions, general expenses,
insurance taxes, amortization of deferred policy acquisition expenses,
goodwill and value of purchased insurance in force, net of deferred
policy acquisition costs. Interest credited to account balances was
$376,000 and $74,000 for the years ended December 31, 1998 and December
31, 1997, respectively. Commissions, general expenses and insurance
taxes were $1.8 million, $834,000 and $44,000, respectively, for the
year ended December 31, 1998. For the year ended December 31, 1997,
commissions, general expenses and insurance taxes were $408,000,
$585,000 and $109,000, respectively. Expenses have increased in 1998
due to higher sales. Most costs incurred as the result of new sales have
been deferred, thus having very little impact on earnings.
At the merger date, the Company's deferred policy acquisition costs ("DPAC")
was eliminated and an asset of $132,000 representing value of purchased
insurance in force ("VPIF") was established for policies in force at the
merger date. The Company deferred $2.3 million of expenses associated with
the sale of variable annuity contracts for the year ended December 31, 1998.
Expenses of $502,000 were deferred for the year ended December 31, 1997.
These acquisition costs are amortized in proportion to the expected gross
profits. Amortization of DPAC was $76,000 for the year ended December 31,
1998 and $20,000 for the year ended December 31, 1997. The amortization of
VPIF was $8,000 for the year ended December 31, 1998 and $3,000 for the
period October 25, 1997 through December 31, 1997. In 1998, VPIF was adjusted
to reduce amortization by $6,000 during 1998 to reflect changes in the
assumptions related to the timing of future gross profits. Based on current
conditions and assumptions as to the impact of future events on acquired
policies in force, the expected approximate net amortization relating to VPIF
as of December 31, 1998 is $10,000 in 1999, $12,000 in 2000, $13,000 in 2001,
$13,000 in 2002 and $12,000 in 2003. Actual amortization may vary based upon
changes in assumptions and experience.
Amortization of goodwill for the year ended December 31, 1998 was $2,000 and
during the period from the merger date to December 31, 1997 totaled
approximately $1,000. Goodwill is being amortized on a straight-line basis
over 40 years.
INCOME. Net income for the year ended December 31, 1998 was $775,000. This
was an increase of $46,000 from net income for the year ended December 31,
1997.
Comprehensive income for 1998 was $1,015,000, an increase of $320,000 from
$695,000 for 1997.
1997 COMPARED TO 1996
The following analysis combines the Post-Merger and Pre-Merger activity for
1997 in order to compare to the results of 1996. Such a comparison does not
recognize the impact of the purchase accounting and goodwill amortization
except for the period after October 24, 1997.
PREMIUMS. On March 25, 1997 and December 23, 1997, First Golden received
policy approvals in New York and Delaware, respectively. The Company reported
$7.3 million in variable annuity premiums during the year ending December 31,
1997.
Premiums, net of reinsurance, for variable products from two significant
broker/dealers for the year ended December 31, 1997, totaled $6.9 million, or
94.5% of premiums. One of these distributors sold 59.4% of the Company's
products in 1997 but indicated its intention to discontinue the sales
relationship by the end of 1998.
REVENUES. Product charges from variable annuities totaled $12,000 in 1997. Net
investment income was $1,735,000 and $65,000 for the year ending December 31,
1997 and for the period December 17, 1996 through December 31, 1996,
respectively.
EXPENSES. The Company reported total insurance benefits and expenses of
$698,000 for the year ending December 31, 1997. Insurance benefits and
expenses consisted of interest credited to account balances, commissions,
general expenses, insurance taxes, amortization of deferred policy acquisition
expenses, goodwill and present value of in force acquired, net of deferred
policy acquisition costs. Interest credited to account values was $74,000 for
the year ending December 31, 1997. For the year ending December 31, 1997,
commissions, general expenses and insurance taxes were $408,000, $585,000 and
$109,000, respectively.
The Company's deferred policy acquisition costs ("DPAC") was eliminated as of
the merger date and an asset of $132,000 representing present value of in
force acquired ("PVIF") was established for policies in force at the merger
date. First Golden deferred $502,000 of expenses associated with the sale of
variable annuity contracts for the year ending December 31, 1997. These
acquisition costs are amortized in proportion to the expected gross profits.
Amortization of deferred policy acquisition costs was $20,000 for the year
ending December 31, 1997. The amortization of PVIF for the period October 25,
1997 through December 31, 1997 was $3,000. Based on current conditions and
assumptions as to the impact of future events on acquired policies in force,
the expected approximate net amortization for the next five years, relating
to the PVIF as of December 31, 1997 is $19,000 in 1998, $18,000 in 1999,
$17,000 in 2000, $15,000 in 2001 and $13,000 in 2002.
Amortization of goodwill during the period from the merger date to December
31, 1997 totaled approximately $1,000.
NET INCOME. Net income was $729,000 and $42,000 for the year ending December
31, 1997 and the period December 17, 1996 through December 31, 1997,
respectively.
FINANCIAL CONDITION
RATINGS. Currently, the Company's ratings are at A+ by A.M. Best Company,
AAA by Duff & Phelps Credit Rating Company, AA+ by Standard & Poor's Rating
Services and Aa2 by Moody's Investors Service.
INVESTMENTS. First Golden's assets are invested in accordance with
applicable 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 purchases 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.
All of the Company's investments are carried at fair value in the Company's
financial statements. The increase in the carrying value of the Company's
investment portfolio included changes in unrealized appreciation and
depreciation of fixed maturities as well as a growth in the cost basis of
these securities. Growth in the cost basis of the Company's investment
portfolio resulted from the investment of premiums from the sale of the fixed
account option of the Company's variable insurance products. The Company
manages the growth of its insurance operations in order to maintain adequate
capital ratios.
FIXED MATURITIES: At December 31, 1998, the Company had fixed maturities with
an amortized cost of $30.4 million and an estimated fair value of $31.0
million. The individual securities in the Company's fixed maturities
portfolio (at amortized cost) include investment grade securities which
include securities issued by the U. S. government, agencies and corporations
that are rated at least A- by Standard & Poor's Rating Services ("Standard &
Poor's") ($18.1 million or 59.6%), that are rated BBB+ to BBB- by Standard &
Poor's ($9.2 million or 30.1%) and below investment grade securities which
are securities issued by corporations that are rated BB+ to BB- by Standard &
Poor's ($1.0 million or 3.4%). Securities not rated by Standard & Poor's had
a National Association of Insurance Commissioners ("NAIC") rating of 1 ($2.1
million or 6.9%).
The Company classifies 100% of its securities as available for sale. Net
unrealized appreciation on fixed maturities of $563,000 was comprised of
gross appreciation of $624,000 and gross depreciation of $61,000. Net
unrealized holding gains on these securities, net of adjustments to VPIF,
DPAC, and deferred income taxes of $336,000 was included in stockholder's
equity at December 31, 1998.
At December 31, 1998, the amortized cost value of the Company's total
investment in below investment grade securities was $1.0 million, or 3.4%, of
the Company's investment portfolio. The Company intends to purchase
additional below investment grade securities, but does not expect the
percentage of its portfolio invested in such securities to exceed 10% of its
investment portfolio. At December 31, 1998, the yield at amortized cost on
the Company's below investment grade portfolio was 8.11% compared to 6.28%
for the Company's investment grade corporate bond portfolio. The Company
estimates the fair value of its below investment grade portfolio was $1.0
million, or 100% of amortized cost value, at December 31, 1998.
Below investment grade securities have different characteristics than
investment grade corporate debt securities. Risk of loss upon default by the
borrower is significantly greater with respect to below investment grade
securities than with other corporate debt securities. Below investment grade
securities are generally unsecured and are often subordinated to other
creditors of the issuer. Also, issuers of below investment grade securities
usually have higher levels of debt and are more sensitive to adverse economic
conditions, such as a recession or increasing interest rates, than are
investment grade issuers. The Company attempts to reduce the overall risk in
its below investment grade portfolio, as in all of its investments, through
careful credit analysis, strict investment policy guidelines and
diversification by company and by industry.
The Company analyzes its investment portfolio, including below investment
grade securities, at least quarterly in order to determine if its ability to
realize its carrying value on any investment has been impaired. For debt
securities, if impairment in value is determined to be other than temporary
(i.e., if it is probable the Company will be unable to collect all amounts
due according to the contractual terms of the security), the cost basis of
the impaired security is written down to fair value, which becomes the new
cost basis. The amount of the write-down is included in earnings as a
realized loss. Future events may occur, or additional or updated information
may be received, which may necessitate future write-downs of securities in
the Company's portfolio. Significant write-downs in the carrying value of
investments could materially adversely affect the Company's net income in
future periods.
During the year ended December 31, 1998, the amortized cost basis of the
Company's fixed maturities portfolio was reduced by $1.1 million as a result
of scheduled principal repayments. In total, net pre-tax gains from sales,
calls and repayments of fixed maturity investments amounted to $24,000 in
1998.
At December 31, 1998, no fixed maturities were deemed to have impairments in
value that are other than temporary. At December 31, 1998, the Company had no
investment in default. The Company's fixed maturities portfolio had a
combined yield at amortized cost of 6.37% at December 31, 1998.
OTHER ASSETS. DPAC represents certain deferred costs of acquiring insurance
business, principally commissions and other expenses related to the
production of new business after the merger. The Company's DPAC was
eliminated as of the merger date and an asset of $132,000 representing
VPIF was established for all policies in force at the merger date. VPIF is
amortized into income in proportion to the expected gross profits of in
force acquired business in a manner similar to DPAC amortization. Any
expenses which vary directly with the sales of the Company's products are
deferred and amortized. At December 31, 1998, the Company had VPIF and DPAC
balances of $117,000 and $2.3 million, respectively.
Goodwill totaling $96,000, representing the excess of the acquisition cost
over the fair value of net assets acquired, was established at the merger
date. Accumulated amortization of goodwill as of December 31, 1998 was
approximately $3,000.
At December 31, 1998, the Company had $26.7 million of separate account
assets compared to $4.9 million at December 31, 1997. The increase in
separate account assets resulted from market appreciation and growth in sales
of the Company's variable products, net of redemptions.
At December 31, 1998, the Company had total assets of $66.0 million, an
increase of 94.6% over total assets at December 31, 1997.
LIABILITIES. Future policy benefits increased $8.3 million during 1998
to $10.8 million due to premium growth in the Company's fixed account
option of its variable products. Policy reserves represent the premiums
received plus accumulated interest less mortality and administration
charges. At December 31, 1998, the Company had $26.7 million of separate
account liabilities. This is an increase of 447.7% over separate account
liabilities as of December 31, 1997, and is primarily related to market
appreciation and increased sales of the Company's variable products, net
of redemptions.
Other liabilities increased $370,000 during 1998. The increase results
primarily due to an increase in outstanding checks and accounts payable.
The Company's total liabilities increased $31.1 million, or 397.0%, during
1998 and totaled $38.9 million at December 31, 1998. The increase is
primarily the result of an increase in future policy benefits and separate
account liabilities.
The effects of inflation and changing prices on the Company's financial
position are not material since insurance assets and liabilities are both
primarily monetary and remain in balance. An effect of inflation, which has
been low in recent years, is a decline in purchasing power when monetary
assets exceed monetary liabilities.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity is the ability of the Company to generate sufficient cash flows to
meet the cash requirements of its operating, investing and financing
activities. The Company's principal sources of cash are variable annuity
premiums and product charges, investment income and maturing investments.
Primary uses of these funds are payments of commissions and operating
expenses, interest, investment purchases, as well as withdrawals and
surrenders.
Net cash used in operating activities was $307,000 in 1998 compared to net
cash provided by operations of $551,000 in 1997. The negative operating cash
flows result primarily from the funding of commissions and other deferrable
expenses related to the growth in the variable annuity products of the
Company.
Net cash used in investing activities was $6.3 million during 1998 as
compared to $2.4 million in 1997. This increase is primarily due to greater
net purchases of fixed maturities resulting from an increase in funds
available from net fixed account deposits. Net purchases of fixed maturities
reached $3.9 million in 1998 versus $1.9 million in 1997.
Net cash provided by financing activities was $8.0 million during 1998 as
compared to $2.4 million during the prior year. In 1998, net cash provided by
financing activities was positively impacted by net fixed account deposits of
$8.8 million compared to $2.5 million in 1997. This increase was partially
offset by net reallocations to the Company's separate account, which
increased to $872,000 from $58,000 during the prior year.
The Company's liquidity position is managed by maintaining adequate levels of
liquid assets, such as cash or cash equivalents and short-term investments.
Additional sources of liquidity include borrowing facilities to meet short-
term cash requirements. The Company has established a $10.0 million revolving
note facility with SunTrust Bank. Management believes that these sources of
liquidity are adequate to meet the Company's short-term cash obligations.
On December 17, 1996, Golden American made capital contributions to First
Golden of $25 million. Of this amount, $2 million represented 200,000 shares
of common stock with a par value of $10.00 per share. The remaining $23
million was contributed as additional paid-in capital. First Golden believes
it will be able to fund the capital required for projected new business
primarily with existing capital and future capital contributions from its
Parent. First Golden expects to continue to receive capital contributions
from Golden American if necessary. It is ING's policy to ensure adequate
capital and surplus is provided for the Company and, if necessary, additional
funds will be contributed.
First Golden's principal office is located in New York, New York, where
certain of the Company's records are maintained. The 2,568 square feet of
office space is leased through 2001.
The Golden American Board of Directors has agreed by resolution to provide
funds as needed for the Company to maintain policyholders' surplus that meets
or exceeds the greater of: (1) the minimum capital adequacy standards to
maintain a level of capitalization necessary to meet A.M. Best Company's
guidelines for a rating one level less than the one originally given to First
Golden or (2) the New York State Insurance Department risk-based capital
minimum requirements as determined in accordance with New York statutory
accounting principles. No funds were transferred from Golden American in 1997
or 1998.
First Golden is required to maintain a minimum capital and surplus of not
less than $4 million 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 stockholder unless a notice of
its intent to declare a dividend and the amount of the dividend has been
filed at least thirty days in advance of the proposed declaration. If the
Superintendent finds the financial condition of First Golden does not warrant
the distribution, the Superintendent may disapprove the distribution by
giving written notice to the Company within thirty days after the filing.
The management of First Golden does not anticipate paying any dividends to
its Parent during 1999.
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 monitor the
capitalization of 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 has complied with the NAIC's risk-based capital reporting
requirements. Amounts reported indicate the Company has total adjusted
capital which is significantly above all required capital levels.
First Golden's operations consist of one business segment, the sale of
insurance products. First Golden is not dependent upon any single customer,
however, three broker/dealers accounted for a significant portion of its
sales volume in 1998. One of these distributors sold 62.1% of the Company's
products in 1998. This distributor has discontinued the sales relationship as
of December 31, 1998. The Company is licensed to sell products in the states
of New York and Delaware.
REINSURANCE: At December 31, 1998, First Golden had a reinsurance treaty with
an unaffiliated reinsurer covering a significant portion of the mortality
risks under its variable contracts. First Golden remains liable to the extent
its reinsurer does not meet its obligation under the reinsurance agreement.
YEAR 2000 READINESS DISCLOSURE: Based on and in conjunction with a 1997 study
and an ongoing analysis of computer software and hardware, Golden American
has assessed the Company's exposure to the Year 2000 change of the century
date issue. Some of the Company's computer programs were originally written
using two digits rather than four to define a particular year. As a result,
these computer programs contain "time sensitive" software that may recognize
"00" as the year 1900 rather than the year 2000, which could cause system
failure or miscalculations resulting in disruptions to operations. These
disruptions could include, but are not limited to, a temporary inability to
process transactions. To a lesser extent, the Company depends on various non-
information technology systems, which could also fail or malfunction as a
result of the Year 2000.
Golden American has developed a plan for the Company to address the Year 2000
issue in a timely manner. The following schedule details the plan's phases,
progress towards completion and estimated completion dates:
% Complete Actual/
as of Estimated
March 15, Completion
PHASES 1999 Dates
- -------------------------------------------------------------------------------
ASSESSMENT AND DEVELOPMENT of the steps to be taken to
address Year 2000 systems issues 100% 12/31/1997
REMEDIATION of business critical systems to address
Year 2000 issues 100% 2/28/1999
REMEDIATION of non-critical systems to address Year
2000 issues 76-99% 6/01/1999
TESTING of business critical systems 100% 3/05/1999
TESTING of non-critical systems and integrated testing
of hardware and infrastructure 25-50% 6/15/1999
POINT-TO-POINT TESTING of external interfaces with third
party computer systems that communicate with Company
systems 50-75% 4/30/1999
IMPLEMENTATION of tested business critical software
addressing Year 2000 systems issues 100% 3/05/1999
IMPLEMENTATION of tested non-critical software
addressing Year 2000 systems issues 25-50% 6/30/1999
CONTINGENCY PLAN 76-99% 6/01/1999
The Company's operations could be adversely affected if significant
customers, suppliers and other third parties, including underlying mutual
funds, would be unable to transact business in the Year 2000 and thereafter
as a result of the Year 2000 issue. To mitigate the effect of outside
influences and other dependencies relative to the Year 2000, Golden American
has identified and contacted these third parties on behalf of the Company to
obtain assurances that necessary steps are being taken to prepare for the
Year 2000. Golden American will continue these communications and establish
compliance checkpoints through the Year 2000 transition.
Management believes the Company's systems are or will be substantially
compliant by Year 2000. Golden American will bear all systems upgrade costs
to make the Company's system Year 2000 compliant. Management expects some of
Golden American's resources to be utilized in early 1999 to complete system
upgrades and finalize the contingency plan.
Despite Golden American's efforts on behalf of the Company to modify or
replace "time sensitive" computer and information systems, the Company could
experience a disruption to its operations as a result of the Year 2000.
Golden American is currently developing a contingency plan for the Company to
address any systems that may malfunction despite the testing being performed.
The contingency plan is anticipated to be completed by June 1, 1999.
The Year 2000 project's progress is based on management's best estimates.
These estimates were derived using numerous assumptions of future events,
including the continued availability of resources, third party Year 2000
compliance and other factors. There is no guarantee these estimates will be
achieved and actual results could materially differ from those anticipated.
Specific factors that might cause such material differences include, but are
not limited to, the availability and cost of trained personnel, the ability
to locate and correct all relevant computer codes and other uncertainties.
It is the Company's intention to make every reasonable effort to achieve
business continuity through appropriate planning, testing and establishing
contingency scenarios; however, the Company does not make any representations
because of many unknown factors beyond the control of the Company.
MARKET RISK AND RISK MANAGEMENT
Asset/liability management is integrated into many aspects of the Company's
operations, including investment decisions, product development and crediting
rates determination. As part of its risk management process, different
economic scenarios are modeled, including cash flow testing required for
insurance regulatory purposes, to determine that existing assets are adequate
to meet projected liability cash flows. Key variables include contractowner
behavior and the variable separate account's performance.
Contractowners bear the majority of the investment risks related to the
variable products. Therefore, the risks associated with the investments
supporting the variable separate account are assumed by contractowners, not
by the Company (subject to, among other things, certain minimum guarantees).
The Company's products also provide certain minimum death benefits that
depend on the performance of the variable separate account. Currently the
majority of death benefit risks are reinsured, which protects the Company
from adverse mortality experience and prolonged capital market decline.
A surrender, partial withdrawal, transfer or annuitization made prior to the
end of a guarantee period from the fixed account may be subject to a market
value adjustment. As the liabilities in the fixed account are subject to
market value adjustment, the Company does not face a material amount of
market risk volatility. The fixed account liabilities are supported by a
portfolio principally composed of fixed rate investments that can generate
predictable, steady rates of return. The portfolio management strategy for
the fixed account considers the assets available for sale. This enables the
Company to respond to changes in market interest rates, changes in prepayment
risk, changes in relative values of asset sectors and individual securities
and loans, changes in credit quality outlook and other relevant factors. The
objective of portfolio management is to maximize returns, taking into account
interest rate and credit risks as well as other risks. The Company's
asset/liability management discipline includes strategies to minimize
exposure to loss as interest rates and economic and market conditions change.
On the basis of these analyses, management believes there is no material
solvency risk to the Company. With respect to a 10% drop in equity values
from year-end 1998 levels, variable separate account funds, which represent
71% of the in force, pass the risk in underlying fund performance to the
contractowner (except for certain minimum guarantees that are mostly
reinsured). With respect to interest rate movements up or down 100 basis
points from year-end 1998 levels, the remaining 29% of the in force are fixed
account funds and almost all of these have market value adjustments which
provide significant protection against changes in interest rates.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Any forward-looking statements contained herein or in any other oral or
written statement by the Company or any of its officers, directors or
employees is qualified by the fact that actual results of the Company may
differ materially from such statement, among other risks and uncertainties
inherent in the Company's business, due to the following important factors:
1. Prevailing interest rate levels and stock market performance, which may
affect the ability of the Company to sell its products, the market value
and liquidity of the Company's investments and the lapse rate of the
Company's policies, notwithstanding product design features intended to
enhance persistency of the Company's products.
2. Changes in the federal income tax laws and regulations which may affect
the relative tax advantages of the Company's products.
3. Changes in the regulation of financial services, including bank sales and
underwriting of insurance products, which may affect the competitive
environment for the Company's products.
4. Increasing competition in the sale of the Company's products.
5. Other factors that could affect the performance of the Company,
including, but not limited to, market conduct claims, litigation,
insurance industry insolvencies, availability of competitive reinsurance
on new business, investment performance of the underlying portfolios of
the variable products, variable product design and sales volume by
significant sellers of the Company's variable products.
6. To the extent third parties are unable to transact business in the Year
2000 and thereafter, the Company's operations could be adversely
affected.
OTHER INFORMATION
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 First Golden. Expenses incurred by
Golden American in relation to this service agreement will be reimbursed by
First Golden on an allocated cost basis. First Golden entered into a similar
agreement with another affiliate, Equitable Life Insurance Company of Iowa
("Equitable Life"), for additional services. For the years ended December 31,
1998 and 1997, First Golden incurred expenses of $248,000 and $24,000,
respectively, under the agreement with Golden American and $165,000 and
$29,000, respectively, under the agreement with Equitable Life.
Effective January 1, 1998, the Company entered into an asset management
agreement with ING Investment Management LLC ("ING IM"), an affiliate,
under which ING IM provides asset management and accounting services.
For the year ended December 31, 1998, the Company incurred expenses of
$56,000.
Priot to 1998, First Golden had an agreement with Equitable Investment
Services Inc., under which Equitable Investment Services, Inc. performed
investment advisory services. For the year ended December 31, 1997, First
Golden incurred expenses of $62,000 under this agreement which was
terminated as of December 31, 1997.
First Golden has an agreement with Golden American and DSI pursuant to which
First Golden has agreed to provide Golden American and DSI certain of its
personnel to perform management, administrative and clerical services and the
use of certain of its facilities. First Golden charges Golden American and 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 Golden
American and DSI. For the year ended December 31, 1998, charges to Golden
American and DSI for these services were $210,000 and $75,000, respectively.
DISTRIBUTION AGREEMENT. First Golden has entered into agreements with 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. For the years ended December 31, 1998 and 1997,
commissions paid by First Golden to DSI were $1,754,000 and $408,000,
respectively.
EMPLOYEES. During 1996, Golden American provided the support necessary for the
incorporation and licensing of First Golden. During 1998 and 1997, First
Golden had 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 EIC, and/or Equitable
Life Insurance Company of Iowa. 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.
DIRECTORS AND EXECUTIVE OFFICERS
NAME (AGE) POSITIONS(S) WITH THE COMPANY
---------- -----------------------------
[S] [C]
Barnett Chernow (49) Director and President
Myles R. Tashman (56) Director, Executive Vice President, General
Counsel and Secretary
James R. McInnis (51) Executive Vice President
R. Brock Armstrong (52) Director and Chairman
Carol V. Coleman (49) Director
Michael W. Cunningham (50) Director
Stephen J. Friedman (61) Director
Bernard Levitt (73) Director
Roger A. Martin (67) Director
Andrew Kalinowski (54) Director
David L. Jacobson (49) Senior Vice President and Assistant Secretary
Stephen J. Preston (41) Senior Vice President and Chief Actuary
Mary B. Wilkinson (42) Senior Vice President and Treasurer (Chief
Financial Officer)
Marilyn Talman (52) 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 and/or officers are directors and/or officers of First Golden's
insurance company affiliates. The principal positions of First Golden's
directors and senior executive officers for the past five years are listed
below:
Mr. Barnett Chernow became President of First Golden and Golden American in
April, 1998. From 1996 to 1998, Mr. Chernow served as Executive Vice President
of First Golden. From 1993 to 1998, Mr. Chernow also served as Executive Vice
President of Golden American. He was elected to serve as a director of First
Golden in June, 1996 and Golden American in April, 1998.
Mr. Myles R. Tashman is Executive Vice President, General Counsel, Secretary
and Director of First Golden. Since December, 1995, Mr. Tashman has also
served as Executive Vice President of Golden American, and since January,
1998, he has served as a director of Golden American. He was elected to
serve as a director of First Golden in June, 1996.
Mr. James R. McInnis became Executive Vice President of First Golden in
December, 1997. From 1982 through November, 1997, he was with the Endeavor
Group and held various offices, including President at the time of his
departure.
Mr. R. Brock Armstrong is a Director and Chairman of the Board of Directors of
First Golden, having been elected a Director in December, 1998 and as Chairman
in April, 1999. Mr. Armstrong was also elected to serve as a Director of Golden
American in April 1999. He was appointed to serve as President and Chairman
of The GCG Trust in February 1999 and President of Equitable Life Insurance
Company of Iowa in April 1999. He has also served as Group Executive of
ING Group since October 1998. Mr. Armstrong was Senior Vice President,
The Prudential Insurance Company of America, April 1997 to October 1998;
Executive Vice President, London Insurance Group, August 1994 to April 1997;
President and Chief Financial Officer of Security First Group, August 1991
to August 1994.
Ms. Carol V. Coleman is a Director of First Golden, having been first
appointed in December, 1997. She has been a financial recruiter with Vantage
Staffing since 1994.
Mr. Michael W. Cunningham became a Director of First Golden and Golden
American in April 1999. Also, he has served as a Director of Life
of Georgia and Security Life of Denver since 1995. Currently, he
serves as Executive Vice President and Chief Financial Officer of ING
North America Insurance Corporation, and has worked for them since
1991.
Mr. Stephen J. Friedman is a Director of First Golden, having been first
elected in June, 1996. Mr. Friedman is a partner of the law firm of
Debevoise & Plimpton in New York, NY since 1993.
Mr. Bernard Levitt is a Director of First Golden, having been first elected
in June, 1996. Until his retirement in 1990, Mr. Levitt was a life insurance
consultant with American Life Insurance Company of New York, since 1989.
Mr. Roger A. Martin is a Director of First Golden, having been first appointed
in June, 1996. From 1984 until his retirement in July, 1995, Mr. Martin was a
Vice President with Bear Sterns.
Mr. Andrew Kalinowski is a Director of First Golden, having been first
elected in June, 1996. Mr. Kalinowski has been a Principal and the President
of Upstate Special Risk Services, Incorporated since 1974. He also has been 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 is a Principal and Director
of LIFE Incorporated.
Mr. David L. Jacobson is Senior Vice President and Assistant Secretary of
First Golden. Since November, 1993, Mr. Jacobson has also served as Senior
Vice President and Assistant Secretary of Golden American. Since September,
1996, Mr. Jacobson has also served as Assistant Secretary of Equitable Life
Insurance Company of Iowa.
Mr. Stephen J. Preston is Senior Vice President and Chief Actuary of First
Golden. He also serves as Executive Vice President and Chief Actuary of
GOlden American, where he has served in several capacitites since 1993.
Ms. Mary Bea Wilkinson is Senior Vice President and Treasurer of First Golden.
From November, 1993 through 1996, Ms. Wilkinson served as Senior Vice
President, Assistant Secretary and Treasurer of Golden American.
Ms. Marilyn Talman is Vice President, Associate General Counsel and Assistant
Secretary of First Golden. Since April, 1996, Ms. Talman has also served as
Vice President, Associate General Counsel and Assistant Secretary for Golden
American. Since September, 1996, Ms. Talman has also served as Assistant
Secretary of Equitable Life Insurance Company of Iowa. From March, 1992
through March, 1994, she held various positions with Rodney Square
Management Corp. and was Vice President and General Counsel upon leaving.
COMPENSATION TABLES AND OTHER INFORMATION
The following sets forth information with respect to the Chief
Executive Officer of First Golden as well as the annual salary and
bonus for the next five highly compensated executive officers for the
fiscal years ended December 31, 1998 and 1997. Certain executive officers
of First Golden are also officers of Golden American and DSI. The salaries
of such individuals are allocated among First Golden, Golden American
and DS pursuant to an arrangement among these companies.
EXECUTIVE COMPENSATION TABLE
The following table sets forth information with respect to the annual
salary and bonus for Golden American's Chief Executive Officers and the
five other most highly compensated executive officers for the fiscal
years ended December 31, 1998 and 1997.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------- ------------------------
RESTRICTED SECURITIES
NAME AND STOCK AWARDS UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS (/1/) /2/) OPTIONS COMPENSATION
- ------------------ ---- -------- ----------- ------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Barnett Chernow,....... 1998 $284,171 $105,375 8,000
President 1997 $234,167 $ 31,859 $ 277,576 4,000
James R. McInnis,...... 1998 $250,004 $626,245 2,000
Executive Vice
President
Keith Glover,.......... 1998 $250,000 $145,120 3,900
Executive Vice
President
Myles R. Tashman,...... 1998 $189,337 $ 54,425 3,500
Executive Vice 1997 $181,417 $ 25,000 $ 165,512 5,000
President, General
Counsel and Secretary
Stephen J. Preston,.... 1998 $173.870 $ 32,152 3,500
Executive Vice 1997 $160,758 $ 16,470
President and Chief
Actuary
Terry L. Kendall,...... 1998 $145,237 $181,417
Former President and 1997 $362,833 $ 80,365 $ 644,844 16,000
CEO
</TABLE>
________________
(1) The amount shown relates to bonuses paid in 1998, 1997 and 1996.
(2) Restricted stock awards granted to executive officers vested on October
24, 1997 with the change in control of Equitable of Iowa. As of
December 31, 1998, no officer held any restricted stock.
Option Grants in Last Fiscal Year (1998)
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL
% OF TOTAL RATES OF STOCK
NUMBER OF OPTIONS PRICE APPRECIATION
SECURITIES GRANTED TO FOR OPTION
UNDERLYING EMPLOYEES EXERCISE TERM (/3/)
OPTIONS IN FISCAL OR BASE EXPIRATION -------------------
NAME GRANTED (/1/) YEAR PRICE (/2/) DATE 5% 10%
- ---- ------------- ---------- ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Barnett Chernow......... 8,000 11.99 $60.518 5/26/2003 $164,016 $ 362,433
James R. McInnis........ 2,000 3.00 $60.518 5/26/2003 $ 41,004 $ 90,608
Keith Glover............ 3,900 5.85 $60.518 5/26/2003 $ 79,958 $ 176,686
Myles Tashman........... 3,500 5.25 $60.518 5/26/2003 $ 71,758 $ 158,564
Stephen J. Preston...... 3,500 5.25 $60.518 5/26/2003 $ 71,758 $ 158,564
</TABLE>
________________
(1) Stock appreciation rights granted on May 26, 1998 to the officers of
First Golden have a three-year vesting period and an expiration
date as shown.
(2) The base price was equal to the fair market value of ING's stock on
on the date of grant.
(3) Total dollar gains based on indicated rates of appreciation of share
price over a the five year term of the rights.
<PAGE>
<PAGE>
FINANCIAL STATEMENTS OF FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY
OF NEW YORK
For the years ended December 31, 1998 and 1997
[FS] 1
<PAGE>
<PAGE>
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 sheets of First Golden American Life
Insurance Company of New York as of December 31, 1998 and 1997, and the
related statements of operations, changes in stockholder's equity, and cash
flows for the year ended December 31, 1998 and for periods from October 25,
1997 through December 31, 1997, January 1, 1997 through October 24, 1997, and
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 audits 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, 1998 and 1997, and the results
of its operations and its cash flows for the year ended December 31, 1998 and
for the periods from October 25, 1997 through December 31, 1997, January 1,
1997 through October 24, 1997, and December 17, 1996 through December 31,
1996, in conformity with generally accepted accounting principles.
s/Ernst & Young LLP
Des Moines, Iowa
February 12, 1999
[FS] 2
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
BALANCE SHEETS
(Dollars in thousands, except per share data)
POST-MERGER
--------------------------------------
December 31, 1998 December 31, 1997
----------------- -----------------
ASSETS
Investments:
Fixed maturities, available for sale,
at fair value (cost: 1998 - $30,431;
1997 - $26,570) $30,994 $26,721
Short-term investments 3,231 799
------- -------
Total investments 34,225 27,520
Cash and cash equivalents 1,932 621
Due from affiliates 37 --
Accrued investment income 414 376
Deferred policy acquisition costs 2,347 189
Value of purchased insurance in force 117 126
Current income taxes recoverable 89 63
Property and equipment, less allowances
for depreciation of $16 in 1998 and
$3 in 1997 48 57
Goodwill, less accumulated amortization
of $3 in 1998 and $1 in 1997 93 95
Other assets 15 2
Separate account assets 26,717 4,878
------- -------
Total assets $66,034 $33,927
======= =======
LIABILITIES AND STOCKHOLDER'S
EQUITY
Policy liabilities and accruals:
Future policy benefits:
Annuity products $10,830 $ 2,506
Deferred income tax liability 850 247
Due to affiliates 17 61
Other liabilities 510 140
Separate account liabilities 26,717 4,878
------- -------
38,924 7,832
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 2,000
Additional paid-in capital 23,936 23,936
Accumulated other comprehensive income 336 96
Retained earnings 838 63
------- -------
Total stockholder's equity 27,110 26,095
------- -------
Total liabilities and stockholder's
equity $66,034 $33,927
======= =======
See accompanying notes.
[FS] 3
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF OPERATIONS
(Dollars in thousands)
<TABLE>
<CAPTION>
POST-MERGER PRE-MERGER
---------------------------| -----------------------------
For the period| For the period For the period
October 25,| January 1, December 17,
For the year 1997 | 1997 1996*
ended through | through through
December 31, December 31,| October 24, December 31,
1998 1997 | 1997 1996
------------ --------------| -------------- --------------
|
<S> <C> <C> <C> <C>
Revenues: |
Annuity product charges $ 239 $ 8 | $ 4 --
Net investment income 1,844 286 | 1,449 $ 65
Realized gains on investments 24 1 | -- --
-------- -------- | -------- --------
2,107 295 | 1,453 65
|
Insurance benefits and expenses: |
Annuity benefits: |
Interest credited to |
account balances 376 26 | 48 --
Underwriting, acquisition and |
insurance expenses: |
Commissions 1,754 141 | 267 --
General expenses 834 124 | 461 --
Insurance taxes 44 94 | 15 --
Policy acquisition costs |
deferred (2,264) (204)| (298) --
Amortization: |
Deferred policy acquisition |
costs 76 13 | 7 --
Value of purchased insurance |
in force 8 3 | -- --
Goodwill 2 1 | -- --
-------- -------- | -------- --------
830 198 | 500 --
-------- -------- | -------- --------
|
Income before income taxes 1,277 97 | 953 65
|
Income taxes 502 34 | 287 23
-------- -------- | -------- --------
|
Net income $ 775 $ 63 | $ 666 $ 42
======== ======== | ======== ========
</TABLE>
* Commencement of operations on December 17, 1996.
See accompanying notes.
[FS] 4
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
(Dollars in thousands)
<TABLE>
<CAPTION>
PRE-MERGER
--------------------------------------------------------------------------
Accumulated
Other
Additional Comprehensive Total
Common Paid-in Income Retained Stockholder's
Stock Capital (Loss) 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
Comprehensive loss:
Net income -- -- -- $42 42
Change in net unrealized
investment gains (losses) -- -- ($99) -- (99)
-------
Comprehensive loss (57)
------ ------- ----- ---- -------
Balance at December 31, 1996 2,000 23,000 (99) 42 24,943
Comprehensive income:
Net income -- -- -- 666 666
Change in net unrealized
investment gains (losses) -- -- (130) -- (130)
-------
Comprehensive income 536
------ ------- ----- ---- -------
Balance at October 24, 1997 $2,000 $23,000 ($229) $708 $25,479
====== ======= ===== ==== =======
<CAPTION>
POST-MERGER
--------------------------------------------------------------------------
Accumulated
Other
Additional Comprehensive Total
Common Paid-in Income Retained Stockholder's
Stock Capital (Loss) Earnings Equity
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Balance at October 25, 1997 $2,000 $23,936 -- -- $25,936
Comprehensive income:
Net income -- -- -- $63 63
Change in net unrealized
investment gains (losses) -- -- $96 -- 96
-------
Comprehensive income 159
------ ------- ----- ---- -------
Balance at December 31, 1997 2,000 23,936 96 63 26,095
Comprehensive income:
Net income -- -- -- 775 775
Change in net unrealized
investment gains (losses) -- -- 240 -- 240
-------
Comprehensive income 1,015
------ ------- ----- ---- -------
Balance at December 31, 1998 $2,000 $23,936 $336 $838 $27,110
====== ======= ===== ==== =======
</TABLE>
* Commencement of operations on December 17, 1996.
See accompanying notes.
[FS] 5
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
POST-MERGER PRE-MERGER
------------ ------------ | ------------ ------------
For the | For the For the
period | period period
October 25, | January 1, December 17,
For the year 1997 | 1997 1996*
ended through | through through
December 31, December 31, | October 24, December 31,
1998 1997 | 1997 1996
------------ ------------ | ------------ ------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES |
Net income $ 775 $ 63 | $ 666 $ 42
Adjustments to reconcile net income to net |
cash provided by (used in) operations: |
Adjustments related to annuity products: |
Interest credited to account balances 376 26 | 48 --
Charges for mortality and |
administration (11) -- | (1) --
Decrease (increase) in accrued |
investment income (38) 35 | (73) (58)
Policy acquisition costs deferred (2,264) (204) | (298) --
Amortization of deferred policy |
acquisition costs 76 13 | 7 --
Amortization of value of purchased |
insurance in force 8 3 | -- --
Net amortization of discount on |
short-term investments -- -- | -- (7)
Change in other assets, other liabilities |
and accrued income taxes 248 (625) | 739 24
Provision for depreciation |
and amortization 82 12 | 17 --
Provision for deferred income taxes 465 98 | 26 --
Realized gains on investments (24) (1) | -- --
-------- -------- | ------------ ------------
Net cash provided by (used in) |
operating activities (307) (580) | 1,131 1
|
INVESTING ACTIVITIES |
Sale, maturity or repayment of |
investments: |
Fixed maturities - available for sale 1,644 556 | 226 --
Short-term investments - net -- -- | -- 25,255
------------ ------------ | ------------ ------------
1,644 556 | 226 25,255
Acquisition of investments: |
Fixed maturities - available for sale (5,549) (2,635) | -- (24,653)
Short-term investments - net (2,432) (59) | (390) (25,598)
------------ ------------ | ------------ ------------
(7,981) (2,694) | (390) (50,251)
Purchase of property and equipment (4) (2) | (64) --
------------ ------------ | ------------ ------------
Net cash used in investing activities (6,341) (2,140) | (228) (24,996)
|
FINANCING ACTIVITIES |
Capitalization of Company by issuance |
of common stock and contribution |
of paid-in capital -- -- | -- 25,000
Receipts from investment contracts |
credited to account balances 9,009 354 | 2,160 --
Return of account balances |
on investment contracts (178) (8) | (15) --
Net reallocations to Separate Account (872) (20) | (38) --
-------- -------- | -------- --------
Net cash provided by financing |
activities 7,959 326 | 2,107 25,000
-------- -------- | -------- --------
Increase (decrease) in cash and |
cash equivalents 1,311 (2,394) | 3,010 5
|
Cash and cash equivalents at |
beginning of period 621 3,015 | 5 --
-------- -------- | -------- --------
Cash and cash equivalents at end |
of period $ 1,932 $ 621 | $ 3,015 $ 5
======== ======== | ======== ========
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW |
INFORMATION |
Cash paid during the period for |
income taxes $99 -- | $283 --
</TABLE>
* Commencement of operations on December 17, 1996.
See accompanying notes.
[FS] 6
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES
- ------------------------------------------------------------------------------
ORGANIZATION
First Golden American Life Insurance Company of New York ("First Golden" or
"Company"), a wholly owned subsidiary of Golden American Life Insurance
Company ("Golden American" or "Parent"), was incorporated on May 24, 1996.
Golden American is a wholly owned subsidiary of Equitable of Iowa Companies,
Inc. On December 17, 1996, Golden American provided capitalization in the
amount of $25,000,000 to First Golden. First Golden commenced investment
operations on December 17, 1996. On January 2, 1997 and December 23, 1997,
First Golden became licensed as a life insurance company under the laws of
the states of New York and Delaware, respectively. First Golden received
policy approvals on March 25, 1997 and December 23, 1997 in New York and
Delaware, respectively. The Company's products are marketed by
broker/dealers, financial institutions and insurance agents. The Company's
primary customers are consumers and corporations. See Note 8 for further
information regarding related party transactions.
On October 24, 1997, PFHI Holdings, Inc. ("PFHI"), a Delaware corporation,
acquired all of the outstanding capital stock of Equitable of Iowa Companies
("Equitable") according to the terms of an Agreement and Plan of Merger
("Merger Agreement") dated July 7, 1997 among Equitable, PFHI and ING Groep
N.V. ("ING"). PFHI is a wholly owned subsidiary of ING, a global financial
services holding company based in The Netherlands. As a result of this
transaction, Equitable was merged into PFHI, which was simultaneously renamed
Equitable of Iowa Companies, Inc. ("EIC"), a Delaware corporation. See
Note 6 for additional information regarding the merger.
For financial statement purposes, the ING merger was accounted for as a
purchase effective October 25, 1997. The merger resulted in a new basis of
accounting reflecting estimated fair values of assets and liabilities. As a
result, the Company's financial statements for the periods after October 24,
1997 are presented on the Post-Merger new basis of accounting and financial
statements for October 24, 1997 and prior periods are presented on the Pre-
Merger historical cost basis of accounting.
INVESTMENTS
FIXED MATURITIES: 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," which requires fixed
maturities to be 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 value of purchased insurance in force ("VPIF"), deferred
policy acquisition costs ("DPAC") and deferred income taxes. At December 31,
1998 and 1997, all of the Company's fixed maturities are designated as
available for sale, although the Company is not precluded from designating
fixed maturities as held for investment or trading at some future date.
Securities determined to have a decline in value that is other than temporary
are written down to estimated fair value, which becomes the new cost basis by
a charge to realized losses in the Company's Statements of Operations.
Premiums and discounts are amortized/accrued utilizing a method which results
in a constant yield over the securities' expected lives. Amortization/accrual
of premiums and discounts on mortgage-backed securities incorporates a
prepayment assumption to estimate the securities' expected lives.
OTHER INVESTMENTS: Short-term investments are reported at cost, adjusted for
amortization of premiums and accrual of discounts.
REALIZED GAINS AND LOSSES: Realized gains and losses are determined on the
basis of specific identification and average cost methods for manager
initiated and issuer initiated disposals, respectively.
FAIR VALUES: Estimated fair values, as reported herein, of conventional
mortgage-backed securities not actively traded in a liquid market and
publicly traded fixed maturities are estimated using a third party pricing
system. This pricing system 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.
CASH AND CASH EQUIVALENTS
For purposes of the Statements of Cash Flows, the Company considers all
demand deposits and 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 POLICY ACQUISITION COSTS
Certain costs of acquiring new insurance business, principally first year
commissions and other expenses related to the production of new business,
have been deferred. Acquisition costs for variable annuity products are being
amortized generally in proportion to the present value (using the assumed
crediting rate) of expected future gross profits. This amortization is
adjusted retrospectively when the Company revises its estimate of current or
future gross profits to be realized from a group of products. DPAC is
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.
VALUE OF PURCHASED INSURANCE IN FORCE
As the result of the merger, a portion of the purchase price was allocated to
the right to receive future cash flows from the existing insurance contracts.
This allocated cost represents VPIF which reflects the value of those
purchased policies calculated by discounting actuarially determined expected
future cash flows at the discount rate determined by the purchaser.
Amortization of VPIF is charged to expense in proportion to expected gross
profits of the underlying business. This amortization is adjusted
retrospectively when the Company revises its estimate of current or future
gross profits to be realized from the insurance contracts acquired. VPIF is
adjusted to reflect the pro forma impact of unrealized gains and losses on
available for sale fixed maturities. See Note 6 for additional information on
VPIF resulting from the merger.
PROPERTY AND EQUIPMENT
Property and equipment primarily represent leasehold improvements and office
furniture and equipment and are not considered to be significant to the
Company's overall operations. Property and equipment are reported at cost
less allowances for depreciation. Depreciation expense is computed primarily
on the basis of the straight-line method over the estimated useful lives of
the assets.
GOODWILL
Goodwill was established as a result of the merger and is being amortized
over 40 years on a straight-line basis. See Note 6 for additional information
on the merger.
FUTURE POLICY BENEFITS
Future policy benefits for the fixed interest division of the variable
products are established utilizing the retrospective deposit accounting
method. Policy reserves represent the premiums received plus accumulated
interest, less mortality and administration charges. Interest credited to
these policies ranged from 3.95% to 7.10% during 1998 and 5.60% to 7.50%
during 1997.
SEPARATE ACCOUNT
Assets and liabilities of the separate account reported in the accompanying
Balance Sheets represent funds that are separately administered principally
for variable annuity contracts. Contractowners, rather than the Company, bear
the investment risk for the variable products. At the direction of the
contractowners, the separate account invests the premiums from the sale of
variable annuity products in shares of specified mutual funds. The assets and
liabilities of the separate account are clearly identified and segregated
from other assets and liabilities of the Company. The portion of the separate
account assets equal to the reserves and other liabilities of variable
annuity contracts cannot be charged with liabilities arising out of any other
business the Company may conduct.
Variable separate account assets are carried at fair value of the underlying
investments and generally represent contractowner investment values
maintained in the accounts. Variable separate account liabilities represent
account balances for the variable annuity contracts invested in the separate
account; the fair value of these liabilities is equal to their carrying
amount. Net investment income and realized and unrealized capital gains and
losses related to separate account assets are not reflected in the
accompanying Statements of Operations.
Product charges recorded by the Company from variable annuity products
consist of charges applicable to each contract for mortality and expense
risk, contract administration and surrender charges.
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 maturities 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 Statements of Operations are based on the changes in the
deferred tax asset or liability from period to period (excluding the SFAS No.
115 adjustment).
DIVIDEND RESTRICTIONS
Under the provisions of the insurance laws of the State of New York, First
Golden cannot distribute any dividends to its stockholder unless a notice of
its intention to declare a dividend and the amount of the dividend has been
filed at least thirty days in advance of the proposed declaration. If the
Superintendent finds the financial condition of the Company does not warrant
the distribution, the Superintendent may disapprove the distribution by
giving written notice to the Company within thirty days after the filing.
SEGMENT REPORTING
As of December 31, 1998, the Company adopted SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information." SFAS No. 131 superseded
SFAS No. 14, "Financial Reporting for Segments of a Business Enterprise."
SFAS No. 131 establishes standards for the way public business enterprises
report information about operating segments in annual financial statements
and requires enterprises to report selected information about operating
segments in interim financial reports. SFAS No. 131 also establishes
standards for related disclosures about products and services, geographic
areas and major customers.
The Company manages its business as one segment, the sale of variable
products designed to meet customer needs for tax-advantaged methods of saving
for retirement and protection from unexpected death. Variable products are
sold to consumers and corporations throughout New York. The adoption of SFAS
No. 131 did not affect the results of operations or financial position of the
Company.
USE OF ESTIMATES
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions affecting the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Management is required to utilize historical experience and assumptions about
future events and circumstances in order to develop estimates of material
reported amounts and disclosures. Included among the material (or potentially
material) reported amounts and disclosures that require extensive use of
estimates and assumptions are (1) estimates of fair values of investments in
securities and other financial instruments, as well as fair values of
policyholder liabilities, (2) policyholder liabilities, (3) deferred policy
acquisition costs and value of purchased insurance in force, (4) fair values
of assets and liabilities recorded as a result of the merger transaction, (5)
asset valuation allowances, (6) deferred tax benefits (liabilities) and (7)
estimates for commitments and contingencies including legal matters, if a
liability is anticipated and can be reasonably estimated. Estimates and
assumptions regarding all of the preceding are inherently subject to change
and are reassessed periodically. Changes in estimates and assumptions could
materially impact the financial statements.
RECLASSIFICATIONS
Certain amounts in the financial statements for the periods ended within the
years ended December 31, 1997 and 1996 have been reclassified to conform to
the December 31, 1998 financial statement presentation.
2. BASIS OF FINANCIAL REPORTING
- ------------------------------------------------------------------------------
The financial statements of the Company differ from related statutory-basis
financial statements principally as follows: (1) acquisition costs of
acquiring new business are deferred and amortized over the life of the
policies rather than charged to operations as incurred; (2) an asset
representing the present value of future cash flows from insurance contracts
acquired was established as a result of the merger and is amortized and
charged to expense; (3) future policy benefit reserves for the fixed interest
division of the variable products are based on full account values, rather
than the greater of cash surrender value or amounts derived from discounting
methodologies utilizing statutory interest rates; (4) reserves are reported
before reduction for reserve credits related to reinsurance ceded and a
receivable is established, net of an allowance for uncollectible amounts, for
these credits rather than presented net of these credits; (5) fixed maturity
investments are designated as "available for sale" and valued at fair value
with unrealized appreciation/depreciation, net of adjustments to value of
purchased insurance in force, deferred policy acquisition costs and deferred
income taxes (if applicable), credited/charged directly to stockholder's
equity rather than valued at amortized cost; (6) the carrying value of fixed
maturities is reduced to fair value by a charge to realized losses in the
Statements of Operations when declines in carrying value are judged to be
other than temporary, rather than through the establishment of a formula-
determined statutory investment reserve (carried as a liability), changes in
which are charged directly to surplus; (7) deferred income taxes are provided
for the difference between the financial statement and income tax bases of
assets and liabilities; (8) net realized gains or losses attributed to
changes in the level of interest rates in the market are recognized when the
sale is completed rather than deferred and amortized over the remaining life
of the fixed maturity security; (9) revenues for variable annuity products
consist of policy administration charges and surrender charges assessed
rather than premiums received; and (10) assets and liabilities are restated
to fair values when a change in ownership occurs, with provisions for
goodwill and other intangible assets, rather than continuing to be presented
at historical cost.
A reconciliation of net income and stockholder's equity as reported to
regulatory authorities under statutory accounting principles to equivalent
amounts reported under generally accepted accounting principles is as
follows:
POST-MERGER | PRE-MERGER
-------------------------- |-------------
|
Net Income | Net Income
-------------------------- |-------------
For the | For the
period | period
October 25, | January 1,
For the year 1997 | 1997
ended through | through
December 31, December 31, | October 24,
1998 1997 | 1997
------------ ------------ | ------------
(Dollars in thousands)
As reported under statutory |
accounting principles ($966) ($142) | $581
Interest maintenance reserve 14 1 | --
Asset valuation reserve -- -- | --
Future policy benefits 45 115 | (179)
Nonadmitted assets -- -- | --
Net unrealized appreciation of fixed |
maturities at fair value -- -- | --
Change in investment basis |
as result of merger (39) (1) | --
Deferred policy acquisition costs 2,188 191 | 291
Value of purchased insurance in force (8) (3) | --
Goodwill (2) (1) | --
Deferred income taxes (465) (98) | (26)
Other 8 1 | (1)
------- ------ | -------
As reported herein $775 $63 | $666
======= ====== =======
POST-MERGER
---------------------------
Stockholder's Equity
---------------------------
December 31, December 31,
1998 1997
------------- ------------
(Dollars in thousands)
As reported under statutory
accounting principles $24,377 $25,424
Interest maintenance reserve 15 1
Asset valuation reserve 96 54
Future policy benefits (16) (61)
Nonadmitted assets 43 2
Net unrealized appreciation of fixed
maturities at fair value 563 151
Change in investment basis
as result of merger 318 357
Deferred policy acquisition costs 2,347 189
Value of purchased insurance in force 117 126
Goodwill 93 95
Deferred income taxes (850) (247)
Other 7 4
-------- --------
As reported herein $27,110 $26,095
========= =========
3. INVESTMENT OPERATIONS
- ------------------------------------------------------------------------------
INVESTMENT RESULTS
Major categories of net investment income are summarized below:
POST-MERGER | PRE-MERGER
---------------------------|---------------------------
For the | For the For the
period | period period
October 25,| January 1, December 17,
For the year 1997 | 1997 1996
ended through | through through
December 31, December 31,| October 24, December 31,
1998 1997 | 1997 1996
------------- ------------|------------- ------------
(Dollars in thousands)
[S] [C] [C] | [C] [C]
Fixed maturities $1,726 $294 | $1,449 $57
Short-term investments 157 13 | 30 9
Other, net -- -- | 2 --
------ ------ | ------ ------
Gross investment income 1,883 307 | 1,481 66
Less investment expenses (39) (21)| (32) (1)
------ ------ | ------ ------
Net investment income $1,844 $286 | $1,449 $65
====== ====== ====== ======
The change in unrealized appreciation (depreciation) on fixed maturities
designated as available for sale at fair value for the year ended
December 31, 1998, the period October 25, 1997 through December 31, 1997, the
period January 1, 1997 through October 24, 1997 and the period December 17,
1996 through December 31, 1996 were $412,000, $(212,000), $516,000 and
$(153,000), respectively.
At December 31, 1998 and December 31, 1997, amortized cost, gross unrealized
gains and losses and estimated fair values of fixed maturities, all of which
are designated as available for sale, are as follows:
POST-MERGER
-----------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
-----------------------------------------------
(Dollars in thousands)
December 31, 1998
- ----------------------------
U.S. government and
governmental agencies
and authorities $3,997 $118 ($3) $4,112
Public utilities 2,543 63 (4) 2,602
Corporate securities 20,351 426 (53) 20,724
Mortgage-backed securities 3,540 17 (1) 3,556
-------- -------- -------- --------
Total $30,431 $624 ($61) $30,994
======== ======== ======== ========
December 31, 1997
- ----------------------------
U.S. government and
governmental agencies
and authorities $3,033 $4 -- $3,037
Public utilities 1,000 10 -- 1,010
Corporate securities 17,921 160 ($32) 18,049
Mortgage-backed securities 4,616 9 -- 4,625
-------- -------- -------- --------
Total $26,570 $183 ($32) $26,721
======== ======== ======== ========
At December 31, 1998, net unrealized investment gains on fixed maturities
designated as available for sale totaled $563,000. Appreciation of $336,000
was included in stockholder's equity at December 31, 1998 (net of an
adjustment of $5,000 to VPIF, an adjustment of $32,000 to DPAC and deferred
income taxes of $190,000). Short-term investments with maturities of 30 days
or less have been excluded from the above schedules. Amortized cost
approximates fair values for these securities.
Amortized cost and estimated fair value of fixed maturities designated as
available for sale, by contractual maturity, at December 31, 1998 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.
POST-MERGER
-----------------------------
Estimated
Amortized Fair
December 31, 1998 Cost Value
- -----------------------------------------------------------------------------
(Dollars in thousands)
Due after one year through five years $11,659 $11,800
Due after five years through ten years 15,232 15,638
--------- ---------
26,891 27,438
Mortgage-backed securities 3,540 3,556
--------- ---------
Total $30,431 $30,994
========== ==========
An analysis of sales, maturities and principal repayments of the Company's
fixed maturities portfolio is as follows:
Gross Gross Proceeds
Amortized Realized Realized from
Cost Gains Losses Sale
- -----------------------------------------------------------------------------
(Dollars in thousands)
POST-MERGER:
For the year ended December 31, 1998:
Scheduled principal repayments,
calls and tenders $1,080 -- -- $1,080
Sales 540 $24 -- 564
-------- -------- -------- -------
Total $1,620 $24 -- $1,644
======== ======== ======== =======
For the period October 25, 1997
through December 31, 1997:
Scheduled principal repayments,
calls and tenders $555 $1 -- $556
======== ======== ======== =======
PRE-MERGER:
For the period January 1, 1997
through October 24, 1997:
Scheduled principal repayments,
calls and tenders $226 -- -- $226
======== ======== ======== =======
For the period December 17, 1996 through December 31, 1996, the Company did
not have any sales, maturities or repayments of its fixed maturities
portfolio.
For the periods October 25, 1997 through December 31, 1997 and January 1,
1997 and October 24, 1997, the amortized cost basis of the Company's fixed
maturities portfolio was reduced by $43,000 and $226,000, respectively, as a
result of scheduled principal repayments.
INVESTMENT VALUATION ANALYSIS: The Company analyzes its investment portfolio
at least quarterly in order to determine if the carrying value of any
investment has been impaired. The carrying value of fixed maturities is
written down to fair value by a charge to realized losses when an impairment
in value appears to be other than temporary. During 1998, 1997 and 1996, no
investments were identified as having an impairment other than temporary.
INVESTMENTS ON DEPOSIT: At December 31, 1998 and 1997, affidavits of deposits
covering bonds with a par value of $400,000 were on deposit with regulatory
authorities pursuant to certain statutory requirements.
INVESTMENT DIVERSIFICATIONS: The Company's investment policies related to its
investment portfolio require diversification by asset type, company and
industry and set limits on the amount which can be invested in an individual
issuer. Such policies are at least as restrictive as those set forth by
regulatory authorities. The following percentages relate to holdings at
December 31, 1998 and December 31, 1997. Fixed maturities included
investments in basic industrials (40% in 1998, 31% in 1997), financial
companies (24% in 1998, 23% in 1997), various government bonds and government
or agency mortgage-backed securities (13% in 1998, 29% in 1997), conventional
mortgage-backed securities (11% in 1998) and consumer products (3% in 1998,
10% in 1997).
No investment in any person or its affiliates (other than bonds issued by
agencies of the United States government) exceed ten percent of stockholder's
equity at December 31, 1998.
4. COMPREHENSIVE INCOME
- ------------------------------------------------------------------------------
As of January 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income." SFAS No. 130 establishes new rules for the reporting
and display of comprehensive income and its components; however, the adoption
of this statement had no impact on the Company's net income or stockholder's
equity. SFAS No. 130 requires unrealized gains or losses on the Company's
available for sale securities (net of VPIF, DPAC and deferred income taxes)
to be included in other comprehensive income. Prior to the adoption of SFAS
No. 130 unrealized gains or losses were reported separately in stockholder's
equity. Prior year financial statements have been reclassified to conform to
the requirements of SFAS No. 130.
Other comprehensive income excludes net investment gains (losses) included in
net income which merely represent transfers from unrealized to realized gains
and losses. These amounts totaled $16,000 in 1998. Such amounts, which have
been measured through the date of sale, are net of income taxes and
adjustments to VPIF and DPAC totaling $8,000 in 1998.
5. FAIR VALUES OF FINANCIAL INSTRUMENTS
- ------------------------------------------------------------------------------
SFAS No. 107, "Disclosures about Fair Value of Financial Instruments,"
requires disclosure of estimated fair value of all financial instruments,
including both assets and liabilities recognized and not recognized in a
company's balance sheet, unless specifically exempted. SFAS No. 119,
"Disclosure about Derivative Financial Instruments and Fair Value of
Financial Instruments," requires additional disclosures about derivative
financial instruments. Most of the Company's investments, investment
contracts and debt fall within the standards' definition of a financial
instrument. In cases where quoted market prices are not available, estimated
fair values are based on estimates using present value or other valuation
techniques. Those techniques are significantly affected by the assumptions
used, including the discount rate and estimates of future cash flows.
Accounting, actuarial and regulatory bodies are continuing to study the
methodologies to be used in developing fair value information, particularly
as it relates to such things as liabilities for insurance contracts.
Accordingly, care should be exercised in deriving conclusions about the
Company's business or financial condition based on the information presented
herein.
The Company closely monitors the composition and yield of its invested
assets, the duration and interest credited on insurance liabilities and
resulting interest spreads and timing of cash flows. These amounts are taken
into consideration in the Company's overall management of interest rate risk,
which attempts to minimize exposure to changing interest rates through the
matching of investment cash flows with amounts expected to be due under
insurance contracts. These assumptions may not result in values consistent
with those obtained through an actuarial appraisal of the Company's business
or values that might arise in a negotiated transaction.
The following compares carrying values as shown for financial reporting
purposes with estimated fair values:
POST-MERGER
------------------------------------------------
December 31 1998 1997
- -------------------------------------------------------------------------------
Estimated Estimated
Carrying Fair Carrying Fair
Value Value Value Value
----------------------- -----------------------
(Dollars in thousands)
ASSETS
Fixed maturities, available
for sale $30,994 $30,994 $26,721 $26,721
Short-term investments 3,231 3,231 799 799
Cash and cash equivalents 1,932 1,932 621 621
Separate account assets 26,717 26,717 4,878 4,878
LIABILITIES
Annuity products 10,830 10,166 2,506 2,377
Separate account liabilities 26,717 26,717 4,878 4,878
The following methods and assumptions were used by the Company in estimating
fair values.
FIXED MATURITIES: Estimated fair values of conventional mortgage-backed
securities not actively traded in a liquid market and publicly traded fixed
maturities are estimated using a third party pricing system. This pricing
system uses a matrix calculation assuming a spread over U. S. Treasury bonds
based upon the expected average lives of the securities.
SHORT-TERM INVESTMENTS AND CASH AND CASH EQUIVALENTS: Carrying values
reported in the Company's historical cost basis balance sheet approximate
estimated fair value for these instruments due to their short-term nature.
SEPARATE ACCOUNT ASSETS: Separate account assets are reported at the quoted
fair values of the individual securities in the separate account.
ANNUITY PRODUCTS: Estimated fair values of the Company's liabilities for
future policy benefits for the fixed interest division of the variable
products are stated at cash surrender value, the cost the Company would incur
to extinguish the liability.
SEPARATE ACCOUNT LIABILITIES: Separate account liabilities are reported at
full account value in the Company's historical cost balance sheet. Estimated
fair values of separate account liabilities are equal to their carrying
amount.
6. MERGER
- ------------------------------------------------------------------------------
TRANSACTION: On October 23, 1997, Equitable's shareholders approved the
Merger Agreement dated July 7, 1997 among Equitable, PFHI and ING. On October
24, 1997, PFHI, a Delaware corporation, acquired all of the outstanding
capital stock of Equitable according to the Merger Agreement. PFHI is a
wholly owned subsidiary of ING, a global financial services holding company
based in The Netherlands. Equitable, an Iowa corporation, in turn, owned all
the outstanding capital stock of Equitable Life Insurance Company of Iowa and
Golden American and their wholly owned subsidiaries. In addition, Equitable
also owned all the outstanding capital stock of Locust Street Securities,
Inc., Equitable Investment Services, Inc. (subsequently dissolved), Directed
Services, Inc., Equitable of Iowa Companies Capital Trust, Equitable of Iowa
Companies Capital Trust II and Equitable of Iowa Securities Network, Inc.
(subsequently renamed ING Funds Distributor, Inc.). In exchange for the
outstanding capital stock of Equitable, ING paid total consideration of
approximately $2.1 billion in cash and stock plus the assumption of
approximately $400 million in debt. As a result of this transaction,
Equitable was merged into PFHI, which was simultaneously renamed Equitable of
Iowa Companies, Inc. ("EIC"), a Delaware corporation. All costs of the
merger, including expenses to terminate certain benefit plans, were paid by
EIC.
ACCOUNTING TREATMENT: The merger has been accounted for as a purchase
resulting in a new basis of accounting, reflecting estimated fair values for
assets and liabilities at October 24, 1997. The purchase price was allocated
to EIC and its subsidiaries with $25,936,000 allocated to the Company.
Goodwill was established for the excess of the merger cost over the fair
value of the net assets and attributed to EIC and its subsidiaries including
Golden American and First Golden. The amount of goodwill allocated to the
Company relating to the merger was $96,000 at the merger date and is being
amortized over 40 years on a straight-line basis. The carrying value of
goodwill will be reviewed periodically for any indication of impairment in
value.
VALUE OF PURCHASED INSURANCE IN FORCE: As part of the merger, a portion of
the acquisition cost was allocated to the right to receive future cash flows
from the insurance contracts existing with the Company at the merger date.
This allocated cost represents VPIF reflecting the value of those purchased
policies calculated by discounting the actuarially determined expected future
cash flows at the discount rate determined by ING.
An analysis of the VPIF asset is as follows:
POST-MERGER
--------------------------------------
For the period
October 25, 1997
For the year ended through
December 31, 1998 December 31, 1997
------------------ -----------------
(Dollars in thousands)
Beginning balance $126 $132
------ -------
Imputed interest 9 3
Amortization (23) (6)
Changes in assumptions of timing
of gross profits 6 --
------ -------
Net amortization (8) (3)
Adjustment for unrealized gains
on available for sale securities (1) (3)
------ -------
Ending balance $117 $126
====== =======
Interest is imputed on the unamortized balance of VPIF at a rate of 7.06% for
the year ended December 31, 1998 and 7.03% for the period October 25, 1997
through December 31, 1997. The amortization of VPIF, net of imputed interest,
is charged to expense. VPIF is adjusted for the unrealized gains (losses) on
available for sale securities; such changes are included directly in
stockholder's equity. Based on current conditions and assumptions as to the
impact of future events on acquired policies in force, the expected
approximate net amortization relating to VPIF as of December 31, 1998 is
$10,000 in 1999, $12,000 in 2000, $13,000 in 2001, $13,000 in 2002, and
$12,000 in 2003. Actual amortization may vary based upon changes in
assumptions and experience.
7. INCOME TAXES
- ------------------------------------------------------------------------------
The Company files a consolidated federal income tax return with Golden
American, also a life insurance company.
At December 31, 1998, the Company has a net operating loss ("NOL")
carryforward for federal income tax purposes of approximately $935,000 which
is available to offset future taxable income of the Company through the year
2018.
INCOME TAX EXPENSE
Income tax expense included in the financial statements is as follows:
POST-MERGER | PRE-MERGER
--------------------------- | ---------------------------
For the | For the For the
period | period period
October 25, | January 1, December 17,
For the year 1997 | 1997 1996
ended through | through through
December 31, December 31, | October 24, December 31,
1998 1997 | 1997 1996
------------ ------------ | ------------ -----------
(Dollars in thousands)
Current $37 ($64) | $261 $23
Deferred 465 98 | 26 --
------ ------ | ------ ------
$502 $34 | $287 $23
====== ====== ====== ======
The effective tax rate on income before income taxes is different from the
prevailing federal income tax rate. A reconciliation of this difference is as
follows:
POST-MERGER | PRE-MERGER
---------------------------|---------------------------
For the | For the For the
period | period period
October 25,| January 1, December 17,
For the year 1997 | 1997 1996
ended through | through through
December 31, December 31,| October 24, December 31,
1998 1997 | 1997 1996
------------- ----------- | ------------ ------------
(Dollars in thousands)
Income before income tax $1,277 $97 | $953 $65
======== ======== | ======== ========
Income tax at federal |
statutory rate $447 $34 | $334 $23
Tax effect (decrease) of: |
Compensatory stock option |
and restricted stock |
expense -- -- | (35) --
Other items 55 -- | (12) --
-------- -------- | -------- --------
Income tax expense $502 $34 | $287 $23
======== ======== ======== ========
DEFERRED INCOME TAXES
The tax effect of temporary differences giving rise to the Company's deferred
income tax assets and liabilities at December 31, 1998 and 1997 is as
follows:
POST-MERGER
-----------------------------------
December 31 1998 1997
- ------------------------------------------------------------ ----------------
(Dollars in thousands)
[S] [C] [C]
Deferred tax assets:
Future policy benefits $11 $22
Net operating loss carryforwards 327 --
--------- ---------
338 22
Deferred tax liabilities:
Net unrealized appreciation of available for
sale fixed maturities (184) (51)
Fixed maturities (222) (134)
Deferred policy acquisition costs (714) (39)
Value of purchased insurance in force (41) (45)
Other (27) --
--------- ---------
(1,188) (269)
--------- ---------
Deferred income tax liability ($850) ($247)
========= =========
8. RELATED PARTY TRANSACTIONS
- ------------------------------------------------------------------------------
Directed Services, Inc. ("DSI") acts as the principal underwriter (as defined
in the Securities Act of 1933 and the Investment Company Act of 1940, as
amended) and distributor of the variable insurance products issued by the
Company. DSI is authorized to enter into agreements with broker/dealers to
distribute the Company's variable insurance products and appoint
representatives of the broker/dealers as agents. As of December 31, 1998, the
Company's variable insurance products were sold primarily through three
broker/dealer institutions. The Company paid commissions and expenses to DSI
totaling $1,754,000 for the year ended December 31, 1998. For the period
October 25, 1997 through December 31, 1997 and January 1, 1997 through
October 24, 1997, the commissions and expenses were $141,000 and $267,000,
respectively.
The Company has service agreements with Golden American and Equitable Life
Insurance Company of Iowa ("Equitable Life"), an affiliate, in which Golden
American and Equitable Life provide administrative and financial related
services. For the year ended December 31, 1998, the Company incurred expenses
of $248,000 and $165,000, respectively, from Golden American and Equitable
Life under these agreements. For the periods October 25, 1997 through
December 31, 1997, expenses incurred were $8,000 and $13,000, respectively,
from Golden American and Equitable Life. For the period January 1, 1997
through October 24, 1997, expenses incurred were $16,000 and $16,000,
respectively, from Golden American and Equitable Life.
The Company provides resources and services to Golden American and DSI.
Revenues for these services, which reduce general expenses incurred by the
Company, totaled $210,000 and $75,000 from Golden American and DSI,
respectively, for the year ended December 31, 1998.
Effective January 1, 1998, the Company has an asset management agreement with
ING Investment Management LLC ("ING IM"), an affiliate, in which ING IM
provides asset management and accounting services. Under the agreement, the
Company records a fee based on the value of the assets under management. The
fee is payable quarterly. For the year ended December 31, 1998, the Company
incurred fees of $56,000 under this agreement.
Prior to 1998, the Company had a service agreement with Equitable Investment
Services, Inc. ("EISI"), an affiliate, in which EISI provided investment
management services. Payments for these services totaled $11,000 and $51,000
for the periods October 25, 1997 through December 31, 1997 and January 1,
1997 through October 24, 1997, respectively.
The Company had premiums, net of reinsurance, for variable products for the
year ended December 31, 1998, that totaled $94,000 from Locust Street
Securities, Inc. ("LSSI"), an affiliate. For the year ended December 31,
1997, the premiums, net of reinsurance, for variable products from LSSI
totaled $13,000.
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 paid-in capital. All expenses related to the
incorporation and licensing of First Golden were incurred by Golden American.
The Golden American Board of Directors has agreed by resolution to provide
funds as needed for the Company to maintain policyholders' surplus that meets
or exceeds the greater of: (1) the minimum capital adequacy standards to
maintain a level of capitalization necessary to meet A.M. Best Company's
guidelines or one level less than the one originally given to First Golden,
or (2) the New York State Insurance Department risk-based capital minimum
requirements as determined in accordance with New York statutory accounting
principles. No funds were transferred from Golden American in 1998 or 1997.
9. COMMITMENTS AND CONTINGENCIES
- ------------------------------------------------------------------------------
REINSURANCE: At December 31, 1998, First Golden had a reinsurance treaty with
an unaffiliated reinsurer covering a significant portion of the mortality
risks under its variable contracts. First Golden remains liable to the extent
its reinsurer does not meet its obligation under the reinsurance agreement.
At December 31, 1998 and December 31, 1997, the Company has a payable of
$1,000 for reinsurance premiums. Included in the accompanying financial
statements are net considerations to the reinsurer of $9,000 and $1,000 for
the year ended December 31, 1998 and for the period October 25, 1997 through
December 31, 1997, respectively.
LITIGATION: The Company, like other insurance companies, may be named or
otherwise involved in lawsuits, including class action lawsuits. In some
class action and other lawsuits involving insurers, substantial damages have
been sought and/or material settlement payments have been made. The Company
currently believes no pending or threatened lawsuits exist that are
reasonably likely to have a material adverse impact on the Company.
VULNERABILITY FROM CONCENTRATIONS: The Company has various concentrations in
its investment portfolio (see Note 3 for further information). The Company's
asset growth, net investment income and cash flow are primarily generated
from the sale of variable products and associated future policy benefits.
Substantial changes in tax laws would make these products less attractive to
consumers and extreme fluctuations in interest rates or stock market returns
which may result in higher lapse experience than assumed could cause a severe
impact to the Company's financial condition. A significant portion of the
Company's sales is generated by three broker/dealers. One of these
distributors sold 62.1% of the Company's products in 1998. This distributor
has discontinued the sales relationship as of December 31, 1998.
LEASES: The Company has a lease for its home office space which expires
December 31, 2001. The Company also leases certain other equipment under
operating leases which expire in 2000. Rent expense for the year ended
December 31, 1998 and the periods October 25, 1997 through December 31, 1997
and January 1, 1997 through October 24, 1997 was $95,000, $25,000 and
$34,000, respectively. At December 31, 1998, minimum rental payments due
under the operating leases are $83,000 in 1999, $82,000 in 2000 and $76,000
in 2001.
REVOLVING NOTE PAYABLE: To enhance short-term liquidity, the Company has
established a revolving note payable effective July 27, 1998 and expiring
July 31, 1999 with SunTrust Bank, Atlanta (the "Bank"). The note was approved
by the Company's Board of Directors on September 29, 1998. The total amount
the Company may have outstanding is $10,000,000. The note accrues interest at
an annual rate equal to: (1) the cost of funds for the Bank for the period
applicable for the advance plus 0.25% or (2) a rate quoted by the Bank to the
Company for the advance. The terms of the agreement require the Company to
maintain the minimum level of Company Action Level Risk Based Capital as
established by applicable state law or regulation. At December 31, 1998, the
Company did not have any borrowings under this agreement.
<PAGE>
<PAGE>
[Shaded Section Header]
- ----------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
- ----------------------------------------------------------------------
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 2
Distribution of Contracts 2
Performance Information 3
IRA Withdrawal Option 9
Other Information 9
Financial Statements of Separate Account NY-B 10
Appendix Description of Bond Ratings A-1
- ---------------------------------------------------------------------
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 PROSPECTUS 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
(FG-3120 NY DVA PLUS 5/99)
91
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92
<PAGE>
<PAGE>
APPENDIX A
CONDENSED FINANCIAL INFORMATION
The following tables give (1) the accumulation unit value ("AUV"),
(2) the total number of accumulation units, and (3) the total
accumulation unit value, for each subaccount of First Golden Separate
Account NY-B available under the Contract for the indicated periods.
The date on which the subaccount became available to investors and
the starting accumulation unit value are indicated on the last row of
each table. The Managed Global subaccount commenced operations
initially as a subaccount of another separate account, the Managed
Global Account of Separate Account D of First Golden; however, at the
time of conversion the value of an accumulation unit did not change.
As of May 1, 1999, we no longer accept new allocations into the All-
Growth or Growth Opportunities subaccounts.
LIQUID ASSET
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $14.54 2,755 $ 40 |
| 1997 14.02 -- -- |
| 5/6/97 13.67 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $14.33 5,975 $ 85 |
| 1997 13.83 -- -- |
| 5/6/97 13.51 -- -- |
|-------------------------------------------------------------|
LIMITED MATURITY BOND
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $17.02 -- $ -- |
| 1997 16.13 -- -- |
| 5/6/97 15.43 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $16.77 1,507 $ 25 |
| 1997 15.91 632 10 |
| 5/6/97 15.24 -- -- |
|-------------------------------------------------------------|
GLOBAL FIXED INCOME
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $13.17 -- $ -- |
| 5/1/98 12.17 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $13.09 -- $ -- |
| 5/1/98 12.11 -- -- |
|-------------------------------------------------------------|
A1
<PAGE>
<PAGE>
TOTAL RETURN
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $17.83 4,266 $ 76 |
| 1997 16.18 -- -- |
| 5/6/97 14.36 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $17.72 24,995 $ 443 |
| 1997 16.10 1,139 18 |
| 5/6/97 14.31 -- -- |
|-------------------------------------------------------------|
EQUITY INCOME
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $22.27 9,623 $ 214 |
| 1997 20.83 -- -- |
| 5/6/97 18.54 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $21.94 6,014 $ 132 |
| 1997 20.55 1,243 26 |
| 5/6/97 18.32 -- -- |
|-------------------------------------------------------------|
FULLY MANAGED
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $20.84 2,619 $ 55 |
| 1997 19.93 -- -- |
| 5/6/97 17.95 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $20.53 4,511 $ 93 |
| 1997 19.66 1,701 33 |
| 5/6/97 17.73 -- -- |
|-------------------------------------------------------------|
RISING DIVIDENDS
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $22.79 1,734 $ 40 |
| 1997 20.22 90 2 |
| 5/6/97 17.27 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $22.61 34,310 $ 777 |
| 1997 20.09 8,223 165 |
| 5/6/97 17.18 -- -- |
|-------------------------------------------------------------|
A2
<PAGE>
<PAGE>
GROWTH & INCOME
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $17.08 6,031 $ 103 |
| 1997 15.45 -- -- |
| 5/6/97 12.46 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $17.01 20,311 $ 346 |
| 1997 15.41 334 5 |
| 5/6/97 12.44 -- -- |
|-------------------------------------------------------------|
GROWTH
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $16.36 8,287 $ 136 |
| 1997 13.06 -- -- |
| 5/6/97 12.47 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $16.29 17,550 $ 286 |
| 1997 13.03 3,093 40 |
| 5/6/97 12.45 -- -- |
|-------------------------------------------------------------|
VALUE EQUITY
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $18.41 1,677 $ 31 |
| 1997 18.36 1,048 19 |
| 5/6/97 15.72 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $18.31 4,464 $ 82 |
| 1997 18.28 1,056 19 |
| 5/6/97 15.66 -- -- |
|-------------------------------------------------------------|
RESEARCH
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $23.03 784 $ 18 |
| 1997 18.95 107 2 |
| 5/6/97 16.72 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $22.89 11,228 $ 257 |
| 1997 18.87 403 8 |
| 5/6/97 16.66 -- -- |
|-------------------------------------------------------------|
A3
<PAGE>
<PAGE>
STRATEGIC EQUITY
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $14.30 2,037 $ 29 |
| 1997 14.36 -- -- |
| 5/6/97 11.96 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $14.23 1,867 $ 27 |
| 1997 14.31 1,265 18 |
| 5/6/97 11.93 -- -- |
|-------------------------------------------------------------|
CAPITAL APPRECIATION
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $24.75 578 $ 14 |
| 1997 22.24 -- -- |
| 5/6/97 18.45 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $24.50 4,903 $ 120 |
| 1997 22.05 734 16 |
| 5/6/97 18.31 -- -- |
|-------------------------------------------------------------|
MID-CAP GROWTH
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $22.60 2,041 $ 46 |
| 1997 18.64 -- -- |
| 5/6/97 15.76 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $22.43 5,304 $ 119 |
| 1997 18.52 544 10 |
| 5/6/97 15.68 -- -- |
|-------------------------------------------------------------|
SMALL CAP
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $15.44 3,611 $ 56 |
| 1997 12.92 -- -- |
| 5/6/97 10.72 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $15.37 9,917 $ 152 |
| 1997 12.88 3,434 44 |
| 5/6/97 10.70 -- -- |
|-------------------------------------------------------------|
A4
<PAGE>
<PAGE>
REAL ESTATE
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $22.07 356 $ 8 |
| 1997 25.82 -- -- |
| 5/6/97 21.31 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $21.74 1,474 $ 32 |
| 1997 25.48 478 12 |
| 5/6/97 21.05 -- -- |
|-------------------------------------------------------------|
HARD ASSETS
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $14.50 -- $ -- |
| 1997 20.85 -- -- |
| 5/6/97 19.34 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $14.28 1,007 $ 14 |
| 1997 20.57 238 5 |
| 5/6/97 19.11 -- -- |
|-------------------------------------------------------------|
MANAGED GLOBAL
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $15.02 2,440 $ 37 |
| 1997 11.76 -- -- |
| 5/6/97 11.24 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $14.88 9,573 $ 142 |
| 1997 11.67 2,969 35 |
| 5/6/97 11.16 -- -- |
|-------------------------------------------------------------|
DEVELOPING WORLD
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $ 7.29 -- $ -- |
| 2/19/98 10.00 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $ 7.28 -- $ -- |
| 5/1/98 10.00 -- -- |
|-------------------------------------------------------------|
A5
<PAGE>
<PAGE>
EMERGING MARKETS
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $6.56 -- $ -- |
| 1997 8.75 -- -- |
| 5/6/97 10.38 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $6.51 2,918 $ 19 |
| 1997 8.70 1,812 16 |
| 5/6/97 10.33 -- -- |
|-------------------------------------------------------------|
PIMCO HIGH YIELD BOND
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $10.09 -- $ -- |
| 5/1/98 10.00 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $10.08 -- $ -- |
| 5/1/98 10.00 -- -- |
|-------------------------------------------------------------|
PIMCO STOCKSPLUS GROWTH AND INCOME
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $11.12 -- $ -- |
| 5/1/98 10.00 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $11.11 -- $ -- |
| 5/1/98 10.00 -- -- |
|-------------------------------------------------------------|
GROWTH OPPORTUNITIES
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $ 9.67 -- $ -- |
| 2/19/98 10.78 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $ 9.65 -- $ -- |
| 2/19/98 10.00 -- -- |
|-------------------------------------------------------------|
A6
<PAGE>
<PAGE>
ALL-GROWTH
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $15.66 98 $ 2 |
| 1997 14.48 -- -- |
| 5/6/97 13.10 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $15.43 5,204 $ 80 |
| 1997 14.28 582 8 |
| 5/6/97 12.94 -- -- |
|-------------------------------------------------------------|
A7
<PAGE>
<PAGE>
APPENDIX B
MARKET VALUE ADJUSTMENT EXAMPLES
EXAMPLE #1: FULL SURRENDER EXAMPLE OF A NEGATIVE MARKET VALUE ADJUSTMENT
Assume $100,000 was allocated to a Fixed Interest Allocation with
a guaranteed interest period of 10 years, a guaranteed interest rate
of 7.5%, an initial Index Rate ("I") of 7%; that a full surrender is
requested 3 years into the guaranteed interest period; that the then
Index Rate for a 7 year guaranteed interest period ("J") is 8%; and
that no prior transfers or withdrawals affecting this Fixed Interest
Allocation have been made.
CALCULATE THE MARKET VALUE ADJUSTMENT
1. The contract value of the Fixed Interest Allocation on the date
of surrender is $124,230 ($100,000 x 1.075^3)
2. N = 2,555 ( 365 x 7 )
3. Market Value Adjustment = $124,230 X
(( 1.07 / 1.0825 ) ^ 2,555 / 365 - 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 Interest Allocation with
a guaranteed interest period of 10 years, a guaranteed interest rate
of 7.5%, an initial Index Rate ("I") of 7%; that a full surrender is
requested 3 years into the guaranteed interest period; that the then
Index Rate for a 7 year guaranteed interest period ("J") is 6%; and
that no prior transfers or withdrawals affecting this Fixed Interest
Allocation have been made.
CALCULATE THE MARKET VALUE ADJUSTMENT
1. The contract value of the Fixed Interest Allocation on the date
of surrender is $124,230 ($100,000 x 1.075^3)
2. N = 2,555 ( 365 x 7 )
3. Market Value Adjustment = $124,230 X
(( 1.07 / 1.0625 ) ^ 2,555 / 365 - 1 ) = $6,270
Therefore, the amount paid to you on full surrender ignoring any
surrender charge is $130,500 ($124,230 + $6,270 ).
EXAMPLE #3: WITHDRAWAL EXAMPLE OF A NEGATIVE MARKET VALUE ADJUSTMENT
Assume $200,000 was allocated to a Fixed Interest Allocation with
a guaranteed interest period of 10 years, a guaranteed interest rate
of 7.5%, an initial Index Rate ("I") of 7%; that a withdrawal of
$114,530 is requested 3 years into the guaranteed interest period;
that the then Index Rate ("J") for a 7 year guaranteed interest
period is 8%; and that no prior transfers or withdrawals affecting
this Fixed Interest Allocation have been made.
B1
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<PAGE>
First calculate the amount that must be withdrawn from the Fixed
Interest Allocation to provide the amount requested.
1. The contract value of the Fixed Interest Allocation on the date
of withdrawal is $248,459 ( $200,000 x 1.075 ^3 )
2. N = 2,555 ( 365 x 7 )
3. Amount that must be withdrawn =
( $114,530 / ( 1.07 / 1.0825 ) ^ 2,555 / 365 - 1 ) = $124,230
Then calculate the Market Value Adjustment on that amount
4. Market Value Adjustment = $124,230 X
(( 1.07 / 1.0825 ) ^ 2,555 / 365 - 1 ) = $9,700
Therefore, the amount of the withdrawal paid to you ignoring any
surrender charge is $114,530, as requested. The Fixed Interest
Allocation will be reduced by the amount of the withdrawal, $114,530,
and also reduced by the Market Value Adjustment of $9,700, for a
total reduction in the Fixed Interest Allocation of $124,230.
EXAMPLE #4: WITHDRAWAL EXAMPLE OF A POSITIVE MARKET VALUE ADJUSTMENT
Assume $200,000 was allocated to a Fixed Interest Allocation with
a guaranteed interest period of 10 years, a guaranteed interest rate
of 7.5%, an initial Index Rate of 7%; that a withdrawal of $130,500
requested 3 years into the guaranteed interest period; that the then
Index Rate ("J") for a 7 year guaranteed interest period is 6%; and
that no prior transfers or withdrawals affecting this Fixed Interest
Allocation have been made.
First calculate the amount that must be withdrawn from the Fixed
Interest Allocation to provide the amount requested.
1. The contract value of Fixed Interest Allocation on the date of
surrender is $248,459 ( $200,000 x 1.075^3)
2. N = 2,555 ( 365 x 7 )
3. Amount that must be withdrawn =
( $130,500 / ( 1.07 / 1.0625 ) ^ 2,555 / 365 ) = $124,230
Then calculate the Market Value Adjustment on that amount
4. Market Value Adjustment = $124,230 X
(( 1.07 / 1.0625 ) ^ 2,555 / 365 - 1 ) = $6,270
Therefore, the amount of the withdrawal paid to you ignoring any
surrender charge is $130,500, as requested. The Fixed Interest
Allocation will be reduced by the amount of the withdrawal, $130,500,
but increased by the Market Value Adjustment of $6,270, for a total
reduction in the Fixed Interest Allocation of $124,230.
B2
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APPENDIX C
SURRENDER CHARGE FOR EXCESS WITHDRAWALS EXAMPLE
The following assumes you made 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 withdrawal at the beginning of the
fourth contract year of 20% of the contract value of $35,000.
In this example, $5,250 ($35,000 x .15) is the maximum free
withdrawal amount that you may withdraw during the contract year
without a surrender charge. The total withdrawal would be $7,000
($35,000 x .20). Therefore, $1,750 ($7,000 - $5,250) is considered
an excess withdrawal of a part of the initial premium payment of
$10,000 and would be subject to a 4% surrender charge of $70 ($1,750
x .04). This example does not take into account any Market Value
Adjustment or deduction of any premium taxes.
C1
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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
FG-3120 NY DVA PLUS 5/99
<PAGE>
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FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B OF FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY
OF NEW YORK
[begin shaded block]
PROFILE OF
EMPIRE PRIMELITE
FIXED AND VARIABLE ANNUITY CONTRACT
MAY 1, 1999
[inset within shaded block]
This Profile is a summary of some of the more important points
that you should know and consider before purchasing the Contract.
The Contract is more fully described in the full prospectus which
accompanies this Profile. Please read the prospectus carefully.
[end inset within shaded block]
[end shaded block]
1.THE ANNUITY CONTRACT
The Contract offered in this prospectus is a deferred combination
variable and fixed annuity contract between you and First Golden
American Life Insurance Company of New York. The Contract provides a
means for you to invest on a tax-deferred basis in (i) one or more of
13 mutual fund investment portfolios through our Separate Account NY-
B listed on pages 2 and 3 and/or (ii) in a fixed account of First
Golden American with guaranteed interest periods. We set the
interest rates in the fixed account (which will never be less than
3%) periodically. We currently offer guaranteed interest periods of
1, 3, 5, 7 and 10 years. We may credit a different interest rate for
each interest period. The interest you earn in the fixed account as
well as your principal is guaranteed by First Golden American as long
as you do not take your money out before the maturity date for the
interest period. We will apply a market value adjustment if you
withdraw your money from the fixed account more than 30 days before
the applicable maturity date. The investment portfolios are designed
to offer a better return than the fixed account. However, this is
NOT guaranteed. You may not make any money, and you can even lose the
money you invest.
The Contract, like all deferred variable annuity contracts, has two
phases: the accumulation phase and the income phase. The
accumulation phase is the period between the contract date and the
date on which you start receiving the annuity payments under your
Contract. The amounts you accumulate during the accumulation phase
will determine the amount of annuity payments you will receive. The
income phase begins when you start receiving regular annuity payments
from your Contract on the annuity start date.
You determine (1) the amount and frequency of premium payments, (2)
the investments, (3) transfers between investments, (4) the type of
annuity to be paid after the accumulation phase, (5) the beneficiary
who will receive the death benefits, (6) the type of death benefit,
and (7) the amount and frequency of withdrawals.
<PAGE>
<PAGE>
2.YOUR ANNUITY PAYMENTS (THE INCOME PHASE)
Annuity payments are the periodic payments you will begin receiving
on the annuity start date. You may choose one of the following
annuity payment options:
[Table with Shaded Heading]
Annuity Options
|------------------------------------------------------------------------|
| Option 1 Income for a Payments are made for a specified |
| fixed period number of years to you |
| or your beneficiary. |
|------------------------------------------------------------------------|
| Option 2 Income for Payments are made for the rest of |
| life with a your life or longer for a specified |
| period certain period such as 10 or 20 years or |
| until the total amount used to buy |
| this option has been repaid. This |
| option comes with an added guarantee|
| that payments will continue to your |
| beneficiary for the remainder of |
| such period if you should die during|
| the period. |
|------------------------------------------------------------------------|
| Option 3 Joint life income Payments are made for your life |
| and the life of another person |
| (usually your spouse). |
|------------------------------------------------------------------------|
| Option 4 Annuity plan Any other annuitization plan that we|
| choose to offer on the annuity |
| start date. |
|------------------------------------------------------------------------|
Annuity payments under Options 1, 2 and 3 are fixed. Annuity
payments under Option 4 may be fixed or variable. Once you elect an
annuity option and begin to receive payments, it cannot be changed.
3.PURCHASE (BEGINNING OF THE ACCUMULATION PHASE)
You may purchase the Contract with an initial payment of $10,000 or
more ($1,500 for a qualified Contract) up to and including age 85.
You may make additional payments of $500 or more ($250 for a
qualified Contract) at any time before you turn 85 during the
accumulation phase. Under certain circumstances, we may waive the
minimum initial and additional premium payment requirement. Any
initial or additional premium payment that would cause the contract
value of all annuities that you maintain with us to exceed $1,000,000
requires our prior approval.
Who may purchase this Contract? The Contract may be purchased by
individuals as part of a personal retirement plan (a "non-qualified
Contract"), or as a Contract that qualifies for special tax treatment
when purchased as either an Individual Retirement Annuity (IRA) in
connection with a qualified retirement plan (each a "qualified
Contract").
The Contract is designed for people seeking long-term tax-deferred
accumulation of assets, generally for retirement or other long-term
purposes. The tax-deferred feature is more attractive to people in
high federal and state tax brackets. You should not buy this
Contract if you are looking for a short-term investment or if you
cannot risk getting back less money than you put in.
4.THE INVESTMENT PORTFOLIOS
You can direct your money into: (1) the fixed account with guaranteed
interest periods of 1, 3, 5, 7 and 10 years, and/or (2) into any one
or more of the following 13 mutual fund investment portfolios through
our Separate Account NY-B. The investment portfolios are described
in the prospectuses for the GCG Trust, Travelers Series Fund Inc.,
Greenwich Street Series Fund Inc. and Smith Barney Concert Allocation
Series Inc. Keep in mind that any amount you direct into the fixed
account earns a fixed interest rate. But if you invest in any of the
following investment portfolios, depending on market conditions, you
may make or lose money:
THE GCG TRUST
Total Return Series
Research Series
Mid-Cap Growth Series
2
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<PAGE>
TRAVELERS SERIES FUND INC.
Smith Barney Large Cap Value Portfolio
Smith Barney International Equity Portfolio
Smith Barney High Income Portfolio
Smith Barney Money Market Portfolio
GREENWICH STREET SERIES FUND
Appreciation Portfolio
SMITH BARNEY CONCERT ALLOCATION SERIES INC.
Select High Growth Portfolio
Select Growth Portfolio
Select Balanced Portfolio
Select Conservative Portfolio
Select Income Portfolio
5.EXPENSES
The Contract has insurance features and investment features, and
there are costs related to each. The Company deducts an annual
contract administrative charge of $30. We also collect a mortality
and expense risk charge and an asset-based administrative charge.
These 2 charges are deducted daily directly from the amounts in the
investment portfolios. The asset-based administrative charge is
0.15% annually. The annual rate of the mortality and expense risk
charge depends on the death benefit you choose:
STANDARD ANNUAL RATCHET
DEATH BENEFIT ENHANCED DEATH BENEFIT
Mortality & Expense
Risk Charge 1.10% 1.25%
Asset-Based
Administrative Charge 0.15% 0.15%
----- -----
Total 1.25% 1.40%
Each investment portfolio has charges for investment management fees
and other expenses. These charges, which vary by investment
portfolio, currently range from 1.49 to [ ]% annually (see
following table) of the portfolio's average daily net asset balance.
If you withdraw money from your Contract, or if you begin receiving
annuity payments, we may deduct a premium tax of 0%-3.5% to pay to
your state.
We deduct a surrender charge if you surrender your Contract or
withdraw an amount exceeding the free withdrawal amount. The free
withdrawal amount in any year is 15% of your contract value on the
date of the withdrawal less any prior withdrawals during that
contract year. The following table shows the schedule of the
surrender charge that will apply. The surrender charge is a percent
of each premium payment.
COMPLETE YEARS ELAPSED 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7+
SINCE PREMIUM PAYMENT | | | | | | |
SURRENDER CHARGE 7%| 6%| 5%| 4%| 3%| 2%| 1%| 0%
The following table is designed to help you understand the Contract
charges. The "Total Annual Insurance Charges" column includes the
maximum mortality and expense risk charge, the asset-based
administrative charge, and reflects the annual contract
administrative charge as 0.09% (based on an average contract value of
$33,000). The "Total Annual Investment Portfolio Charges" column
reflects the portfolio charges for each portfolio and are based on
actual expenses as of December 31, 1998, for the Greenwich Street
Series Fund; and as of January 31, 1999 for the Concert Allocation
Series Inc.; and as of October 31, 1998 for the Travelers Series Fund
Inc. The GCG Trust portfolios commenced operations during 1998 and
therefore charges have been annualized. The column "Total Annual
Charges" reflects the sum of the previous two columns. The columns
under the heading "Examples" show you how much you would pay under
the Contract for a 1-year period and for a 10-year period.
As required by the Securities and Exchange Commission, the examples
assume that you invested $1,000 in a Contract that earns 5% annually
and that you withdraw your money at the end of Year 1 or at the end
of
3
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<PAGE>
Year 10. For Years 1 and 10, the examples show the total annual
charges assessed during that time and assume that you have elected
the Annual Ratchet Enhanced Death Benefit. For these examples, the
premium tax is assumed to be 0%.
[Table with shaded heading adn shaded lines for readability]
- --------------------------------------------------------------------------------
TOTAL ANNUAL EXAMPLES:
TOTAL ANNUAL INVESTMENT TOTAL TOTAL CHARGES AT THE END OF:
INSURANCE PORTFOLIO ANNUAL
INVESTMENT PORTFOLIO CHARGES CHARGES CHARGES 1 YEAR 10 YEARS
- --------------------------------------------------------------------------------
THE GCG TRUST
Total Return 1.49% 0.97% 2.46% $94.92 $278.66
Research 1.49% 0.94% 2.43% $94.62 $275.65
Mid-Cap Growth 1.49% 0.95% 2.44% $94.72 $276.66
TRAVELERS SERIES
FUND INC.
Smith Barney Large Cap
Value 1.49% 0.68% 2.17% $92.01 $249.20
Smith Barney International
Equity 1.49% 1.00% 2.49% $95.22 $281.65
Smith Barney High Income 1.49% 0.67% 2.16% $91.91 $248.16
Smith Barney Money Market 1.49% 0.64% 2.13% $91.61 $245.06
GREENWICH STREET SERIES
FUND INC.
Appreciation 1.49% 0.80% 2.29% $93.22 $261.50
SMITH BARNEY CONCERT
ALLOCATION SERIES INC.
Select High Growth 1.49% 1.25% 2.74% $99.72 $306.24
Select Growth 1.49% 1.16% 2.65% $96.82 $297.47
Select Balanced 1.49% 1.25% 2.54% $95.72 $286.62
Select Conservative 1.49% 1.27% 2.56% $95.92 $288.61
Select Income 1.49% 1.02% 2.51% $95.42 $283.65
- --------------------------------------------------------------------------------
The "Total Annual Investment Portfolio Charges" reflect current
expense reimbursements for the Total Return portfolio. The Year 1
examples above include a 7% surrender charge. For more detailed
information, see the fee table in the prospectus for the Contract.
6.TAXES
Under a qualified Contract, your premiums are generally pre-tax
contributions and accumulate on a tax-deferred basis. Premiums and
earnings are generally taxed as income when you make a withdrawal or
begin receiving annuity payments, presumably when you are in a lower
tax bracket.
Under a non-qualified Contract, premiums are paid with after-tax
dollars, and any earnings will accumulate tax-deferred. You will be
taxed on these earnings, but not on premiums, when you withdraw them
from the Contract.
For owners of most qualified Contracts, when you reach age 70 1/2 (or,
in some cases, retire), you will be required by federal tax laws to
begin receiving payments from your annuity or risk paying a penalty
tax. In those cases, we can calculate and pay you the minimum
required distribution amounts. If you are younger than 59 1/2 when you
take money out, in most cases, you will be charged a 10% federal
penalty tax on the amount withdrawn.
4
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<PAGE>
7.WITHDRAWALS
You can withdraw your money at any time during the accumulation
phase. You may elect in advance to take systematic withdrawals which
are described on page 6. Withdrawals above the free withdrawal
amount may be subject to a surrender charge. We will apply a market
value adjustment if you withdraw your money from the fixed account
more than 30 days before the applicable maturity date. Income taxes
and a penalty tax may apply to amounts withdrawn.
8.PERFORMANCE
The value of your Contract will fluctuate depending on the investment
performance of the portfolio(s) you choose. The following chart
shows average annual total return for each portfolio that was in
operation for the entire year for 1998. These numbers reflect the
deduction of the mortality and expense risk charge (based on the
Annual Ratchet Enhanced Death Benefit), the asset-based
administrative charge and the annual contract fee, but do not reflect
deductions for any withdrawal charges. If withdrawal charges were
reflected, they would have the effect of reducing performance.
Please keep in mind that past performance is not a guarantee of
future results.
YEAR
INVESTMENT PORTFOLIO 1998
***Managed by Massachusetts Financial Services Company
Total Return 9.94%
Research 21.24%
Mid-Cap Growth 21.00%
**Managed by SSBC Fund Management Inc.
Smith Barney Large Cap Value 8.20%
Smith Barney International Equity 4.93%
Smith Barney High Income (1.06%)
Smith Barney Money Market 3.51%
Appreciation 17.40%
*Managed by Travelers Investment Adviser, Inc.
Select High Growth 13.68%
Select Growth 12.28%
Select Balanced 7.91%
Select Conservative 4.60%
Select Income 4.02%
-------------------
* Year Ended January 31, 1999
** Year Ended October 31, 1998
*** Year Ended December 31, 1998
9.DEATH BENEFIT
You may choose (i) the Standard Death Benefit, or (ii) the Annual
Ratchet Enhanced Death Benefit. The Annual Ratchet Enhanced Death
Benefit is available only if the contract owner or the annuitant (if
the contract owner is not an individual) is not more than 79 years
old at the time of purchase. In addition, the Annual Ratchet
Enhanced Death Benefit may not be available where a Contract is held
by joint owners.
The death benefit is payable when the first of the following persons
die: the contract owner, joint owner, or annuitant (if a contract
owner is not an individual). Assuming you are the contract owner, if
you die during the accumulation phase, your beneficiary will receive
a death benefit unless the beneficiary is your surviving spouse and
elects to continue the Contract. The death benefit paid depends on
the death benefit you have chosen. The death benefit value is
calculated at the close of the business day on which we receive due
proof of death at our Customer Service Center. If your beneficiary
elects to delay receipt of the death benefit until a date after the
time of your death, the amount of the benefit payable in the future
may be affected. If you die after the annuity start date and you
are the annuitant, your beneficiary will receive the death benefit
you chose under the annuity option then in effect.
The death benefit may be subject to certain mandatory distribution
rules required by federal tax law.
Under the STANDARD DEATH BENEFIT, if you die before the annuity start
date, your beneficiary will receive the greatest of:
5
<PAGE>
<PAGE>
1)the contract value;
2)the total premium payments made under the Contract after
subtracting any withdrawals; or
3)the cash surrender value.
Under the ANNUAL RATCHET ENHANCED DEATH BENEFIT, if you die before
the annuity start date, your beneficiary will receive the greatest
of:
1)the contract value;
2)the total premium payments made under the Contract after
subtracting any withdrawals;
3)the cash surrender value; or
4)the enhanced death benefit, which is determined as follows: On
each contract anniversary that occurs on or before the
contract owner turns age 80, we compare the prior enhanced
death benefit to the contract value and select the larger
amount as the new enhanced death benefit. On all other days,
the enhanced death benefit is the following amount: On a daily
basis we first take the enhanced death benefit from the
preceding day (which would be the initial premium if the
preceding day is the contract date), then we add additional
premiums paid since the preceding day, and then we subtract
any withdrawals (including any market value adjustment applied
to such withdrawals) made since the preceding day, and then we
subtract for any associated surrender charges. That amount
becomes the new enhanced death benefit.
Note:In all cases described above, amounts could be reduced by
premium taxes owed and withdrawals not previously deducted.
10.OTHER INFORMATION
FREE LOOK. If you cancel the Contract within 10 days after you
receive it, you will receive a full refund of your contract value.
For purposes of the refund during the free look period, your contract
value includes a refund of any charges deducted from your contract
value. Because of the market risks associated with investing in the
portfolios, the contract value returned may be greater or less than
the premium payment you paid. We determine your contract value at
the close of business on the day we receive your written refund
request.
TRANSFERS AMONG INVESTMENT PORTFOLIOS AND THE FIXED ACCOUNT. You
can make transfers among your investment portfolios and your
investment in the fixed account as frequently as you wish without any
current tax implications. The minimum amount for a transfer is $100.
Currently there is no charge for transfers, and we do not limit the
number of transfers allowed. The Company may, in the future, charge
a $25 fee for any transfer after the twelfth transfer in a contract
year or limit the number of transfers allowed. Keep in mind that if
you transfer or otherwise withdraw your money from the fixed account
more than 30 days before the applicable maturity date, we will apply
a market value adjustment. A market value adjustment could increase
or decrease your contract value and/or the amount you transfer or
withdraw.
NO PROBATE. In most cases, when you die, the person you choose as
your beneficiary will receive the death benefit without going through
probate.
ADDITIONAL FEATURES. This Contract has other features you may be
interested in. These include:
Dollar Cost Averaging. This is a program that allows you to
invest a fixed amount of money in the investment portfolios each
month, which may give you a lower average cost per unit over
time than a single one-time purchase. Dollar cost averaging
requires regular investments regardless of fluctuating price
levels, and does not guarantee profits or prevent losses in a
declining market. This option is currently available only if
you have $1,200 or more in the Smith Barney Money Market
portfolio or in the fixed account with a 1-year guaranteed
interest period. Transfers from the fixed account under this
program will not be subject to a market value adjustment.
6
<PAGE>
<PAGE>
Systematic Withdrawals. During the accumulation phase, you
can arrange to have money sent to you at regular intervals
throughout the year. Within limits these withdrawals will not
result in any withdrawal charge. Withdrawals from your money in
the fixed account under this program are not subject to a market
value adjustment. Of course, any applicable income and penalty
taxes will apply on amounts withdrawn.
Automatic Rebalancing. If your contract value is $10,000 or
more, you may elect to have the Company automatically readjust
the money between your investment portfolios periodically to
keep the blend you select. Investments in the fixed account are
not eligible for automatic rebalancing.
11.INQUIRIES
If you need more information after reading this prospectus, please
contact us at:
CUSTOMER SERVICE CENTER
230 PARK AVENUE
SUITE 966
NEW YORK, NEW YORK 10169
(800) 963-9539
or your registered representative.
7
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[begin shaded block]
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B OF GOLDEN AMERICAN LIFE INSURANCE COMPANY OF
NEW YORK
MAY 1, 1999
DEFERRED COMBINATION VARIABLE AND FIXED ANNUITY PROSPECTUS
EMPIRE PRIMELITE
[end shaded block]
- --------------------------------------------------------------------------
This prospectus describes Empire PrimElite, an individual deferred
variable annuity contract (the "Contract") offered by First Golden
American Life Insurance Company of New York (the "Company," "we" or
"our"). The Contract is available in connection with certain
retirement plans that qualify for special federal income tax
treatment ("qualified Contracts") as well as those that do not
qualify for such treatment ("non-qualified Contracts").
The Contract provides a means for you to invest your premium payments
in one or more of 13 mutual fund investment portfolios. You may also
allocate premium payments to our Fixed Account with guaranteed
interest periods. Your contract value will vary daily to reflect the
investment performance of the investment portfolio(s) you select and
any interest credited to your allocations in the Fixed Account. The
investment portfolios available under your Contract and the portfolio
managers are:
MASSACHUSETTS FINANCIAL SERVICES TRAVELERS INVESTMENT ADVISER, INC.
COMPANY Select High Growth Portfolio
Total Return Series Select Growth Portfolio
Research Series Select Balanced Portfolio
Mid-Cap Growth Series Select Conservative Portfolio
SSBC FUND MANAGEMENT INC. Select Income Portfolio
Smith Barney Large Cap Value Portfolio
Smith Barney International Equity Portfolio
Smith Barney High Income Portfolio
Smith Barney Money Market Portfolio
Appreciation Portfolio
The above mutual fund investment portfolios are purchased and held by
corresponding divisions of our Separate Account NY-B. We refer to
the divisions as "subaccounts" and the money you place in the Fixed
Account's guaranteed interest periods as "Fixed Interest Allocations"
in this prospectus.
We will credit your Fixed Interest Allocation(s) with a fixed rate of
interest. We set the interest rates periodically. We will not set
the interest rate to be less than a minimum annual rate of 3%. You
may choose guaranteed interest periods of 1, 3, 5, 7 and 10 years.
The interest earned on your money as well as your principal is
guaranteed as long as you hold them until the maturity date. If you
take your money out from a Fixed Interest Allocation more than 30
days before the applicable maturity date, we will apply a market
value adjustment ("Market Value Adjustment"). A Market Value
Adjustment could increase or decrease your contract value and/or the
amount you take out. You bear the risk that you may receive less
than your principal if we take a Market Value Adjustment. You have a
right to return a Contract within 10 days after you receive it for a
full refund of the contract value (which may be more or less than the
premium payments you paid), or if required by your state, the
original amount of your premium payment. Longer free look periods
apply in some states.
This prospectus provides information that you should know before
investing and should be kept for future reference. A Statement of
Additional Information, dated May 1, 1999, has been filed with the
Securities and Exchange Commission. It is available without charge
upon request. To obtain a copy of this document, write to our
Customer Service Center at 230 Park Avenue, Suite 966, New York, New
York 10169 or call (800) 963-9539, or access the SEC's website
(http://www.sec.gov). The table of contents of the Statement of
Additional Information ("SAI") is on the last page of this prospectus
and the SAI is made part of this prospectus by reference.
- --------------------------------------------------------------------------
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR
DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
AN INVESTMENT IN THE GCG TRUST, TRAVELERS SERIES FUND INC., GREENWICH
STREET SERIES FUND AND SMITH BARNEY CONCERT ALLOCATION SERIES INC. IS
NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
THIS PROSPECTUS MUST BE ACCOMPANIED BY A CURRENT PROSPECTUS FOR THE
GCG TRUST, TRAVELERS SERIES FUND INC., GREENWICH STREET SERIES FUND
AND SMITH BARNEY CONCERT ALLOCATION SERIES INC.
<PAGE>
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TABLE OF CONTENTS
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PAGE
Index of Special Terms ................................... 1
Fees and Expenses ........................................ 2
Performance Information................................... 5
Accumulation Unit...................................... 5
Net Investment Factor.................................. 5
Condensed Financial Information........................ 5
Financial Statements................................... 5
Performance Information................................ 5
First Golden American Life Insurance Company of New York.. 6
The Trusts................................................ 6
First Golden Separate Account NY-B........................ 6
The Investment Portfolios................................. 8
Investment Objectives.................................. 8
Investment Portfolio Management Fees................... 9
The Fixed Interest Allocation.............................10
Selecting a Guaranteed Interest Period.................10
Guaranteed Interest Rates..............................10
Transfers from a Fixed Interest Allocation.............11
Withdrawals from a Fixed Interest Allocation...........11
Market Value Adjustment................................11
The Annuity Contract......................................12
Contract Date and Contract Year........................12
Annuity Start Date.....................................13
Contract Owner.........................................13
Annuitant..............................................13
Beneficiary............................................14
Purchase and Availability of the Contract..............14
Crediting of Premium Payments..........................14
Contract Value.........................................15
Cash Surrender Value...................................15
Surrendering to Receive the Cash Surrender Value.......16
Addition, Deletion or Substitution of Subaccounts
and Other Changes......................................16
The Fixed Account......................................16
Other Important Provisions.............................16
Withdrawals...............................................17
Regular Withdrawals....................................17
Systematic Withdrawals.................................17
IRA Withdrawals........................................18
Transfers Among Your Investments..........................19
Dollar Cost Averaging..................................19
Automatic Rebalancing..................................20
Death Benefit Choices.....................................20
Death Benefit During the Accumulation Phase............20
Standard Death Benefit...............................20
Annual Ratchet Enhanced Death Benefit................21
Death Benefit During the Income Phase..................21
Charges and Fees .........................................21
Charge Deduction Subaccount............................21
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TABLE OF CONTENTS (CONTINUED)
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PAGE
Charges and Fees (continued)
Charges Deducted from the Contract Value...............22
Surrender Charge.....................................22
Free Withdrawal Amount...............................22
Surrender Charge for Excess Withdrawals..............22
Premium Taxes........................................22
Administrative Charge................................22
Transfer Charge......................................23
Charges Deducted from the Subaccounts..................23
Mortality and Expense Risk Charge....................23
Asset-Based Administrative Charge....................23
Trust Expenses.........................................23
The Annuity Options.......................................23
Annuitization of Your Contract.........................23
Selecting the Annuity Start Date.......................24
Frequency of Annuity Payments..........................24
The Annuity Options....................................24
Income for a Fixed Period............................24
Income for Life with a Period Certain................25
Joint Life Income....................................25
Annuity Plan.........................................25
Payment When Named Person Dies.........................25
Other Contract Provisions.................................25
Reports to Contract Owners.............................25
Suspension of Payments.................................25
In Case of Errors in Your Application..................26
Assigning the Contract as Collateral...................26
Contract Changes-Applicable Tax Law....................26
Free Look..............................................20
Group or Sponsored Arrangements........................20
Selling the Contract...................................20
Other Information.........................................27
Voting Rights..........................................27
Year 2000 Problem......................................27
State Regulation.......................................27
Legal Proceedings......................................28
Legal Matters..........................................28
Experts................................................28
Federal Tax Considerations................................28
More Information about First Golden American..............34
Financial Statements of First Golden American.............56
Statement of Additional Information
Table of Contents......................................91
Appendix A
Condensed Financial Information........................A1
Appendix B
Market Value Adjustment Examples.......................B1
Appendix C
Surrender Charge for Excess Withdrawals Example........C1
ii
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INDEX OF SPECIAL TERMS
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The following special terms are used throughout this prospectus.
Refer to the page(s) listed for an explanation of each term:
SPECIAL TERM PAGE
Accumulation Unit 5
Annual Ratchet Enhanced Death Benefit 21
Annuitant 13
Annuity Start Date 13
Cash Surrender Value 15
Contract Date 13
Contract Owner 13
Contract Value 15
Contract Year 13
Fixed Interest Allocation 10
Free Withdrawal Amount 22
Market Value Adjustment 11
Net Investment Factor 5
Standard Death Benefit 20
The following terms as used in this prospectus have the same or
substituted meanings as the corresponding terms currently used in the
Contract:
TERM USED IN THIS PROSPECTUS CORRESPONDING TERM USED IN THE CONTRACT
Accumulation Unit Value Index of Investment Experience
Annuity Start Date Annuity Commencement Date
Contract Owner Owner or Certificate Owner
Contract Value Accumulation Value
Transfer Charge Excess Allocation Charge
Fixed Interest Allocation Fixed Allocation
Free Look Period Right to Examine Period
Guaranteed Interest Period Guarantee Period
Subaccount(s) Division(s)
Net Investment Factor Experience Factor
Regular Withdrawals Conventional Partial Withdrawals
Withdrawals Partial Withdrawals
1
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FEES AND EXPENSES
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CONTRACT OWNER TRANSACTION EXPENSES*
Surrender Charge:
COMPLETE YEARS ELAPSED 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7+|
SINCE PREMIUM PAYMENT | | | | | | | |
SURRENDER CHARGE 7%| 6%| 5%| 4%| 3%| 2%| 1%| 0%|
Transfer Charge............................................ None**
* If you invested in a Fixed Interest Allocation, a Market Value
Adjustment may apply to certain transactions. This may increase
or decrease your contract value and/or your transfer or
surrender amount.
**We may in the future charge $25 per transfer if you make more
than 12 transfers in a contract year.
ANNUAL CONTRACT ADMINISTRATIVE CHARGE
Administrative Charge..........................................$30
(We waive this charge if your premium payments or current contract
value is $100,000 or more.)
SEPARATE ACCOUNT NY-B ANNUAL CHARGES***
STANDARD ENHANCED DEATH BENEFIT
DEATH BENEFIT ANNUAL RATCHET
Mortality and Expense Risk Charge 1.10% 1.25%
Asset-Based Administrative Charge 0.15% 0.15%
---- ----
Total Separate Account NY-B Charges 1.25% 1.40%
***As a percentage of average assets in each subaccount.
THE GCG TRUST ANNUAL EXPENSES (as a percentage of the average daily
net assets of an investment portfolio or on the combined average
daily net assets of the indicated groups of portfolios):
[Table with Shaded Heading and Shaded Lines for readability]
|----------------------------------------------------------------------|
| OTHER TOTAL |
| EXPENSES(2) EXPENSES |
| MANAGEMENT AFTER EXPENSE AFTER EXPENSE |
| PORTFOLIO FEES(1) REIMBURSEMENT REIMBURSEMENT(3) |
|----------------------------------------------------------------------|
| Total Return 0.94% 0.03% 0.97%(3) |
| Research 0.94% 0.00% 0.94% |
| Mid-Cap Growth 0.94% 0.01% 0.95% |
|----------------------------------------------------------------------|
(1)Fees decline as combined assets increase. See the prospectus for
the GCG Trust for more information.
(2)Other expenses generally consist of independent trustees fees and
certain expenses associated with investing in international
markets. Since the portfolios commenced operations during 1998,
other expenses have been annualized.
(3)Directed Services, Inc. is currently reimbursing expenses to
maintain total expenses at 0.97% for the Total Return portfolio
as shown. Without this reimbursement, and based on current
estimates, total expenses for the Total Return portfolio would be
0.98%. This reimbursement agreement will remain in place through
December 31, 1999.
2
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TRAVELERS SERIES FUND INC. ANNUAL EXPENSES (as a percentage of the
average daily net assets of a portfolio):
[Table with Shaded Heading and Shaded Lines for readability]
|----------------------------------------------------------------------|
| MANAGEMENT OTHER TOTAL |
| PORTFOLIO FEES EXPENSES(1) EXPENSES |
|----------------------------------------------------------------------|
| Smith Barney Large Cap Value 0.65% 0.03% 0.68% |
| Smith Barney International Equity 0.90% 0.10% 1.00% |
| Smith Barney High Income 0.60% 0.07% 0.67% |
| Smith Barney Money Market 0.50% 0.14% 0.64% |
|----------------------------------------------------------------------|
(1)Other expenses are based on actual expenses for the year
ended October 31, 1998.
GREENWICH STREET SERIES FUND ANNUAL EXPENSES (as a percentage of the
average daily net assets of a portfolio):
[Table with Shaded Heading]
|----------------------------------------------------------------------|
| MANAGEMENT OTHER TOTAL |
| PORTFOLIO FEES EXPENSES(1) EXPENSES |
|----------------------------------------------------------------------|
| Appreciation 0.55% 0.25% 0.80% |
|----------------------------------------------------------------------|
(1)Other expenses are based on actual expenses for the year
ended December 31, 1998.
SMITH BARNEY CONCERT ALLOCATION SERIES INC. ANNUAL EXPENSES (as a
percentage of the average daily net assets of a portfolio):
[Table with Shaded Heading and Shaded Lines for readability]
|----------------------------------------------------------------------|
| MANAGEMENT OTHER TOTAL |
| PORTFOLIO FEES EXPENSES(1) EXPENSES |
|----------------------------------------------------------------------|
| Select High Growth 0.35% [0.90%] [1.25%] |
| Select Growth 0.35% [0.81%] [1.16%] |
| Select Balanced 0.35% [0.70%] [1.05%] |
| Select Conservative 0.35% [0.72%] [1.07%] |
| Select Income 0.35% [0.67%] [1.02%] |
|----------------------------------------------------------------------|
(1)Other expenses are based on a weighted average of the expense
ratios of the underlying funds in which a particular portfolio
was invested on January 31, 1999. The expense ratios for the
underlying funds are based on actual expenses for each fund's
Class Y shares as of the end of such fund's most recent fiscal
year.
The purpose of the foregoing tables is to help you understand the
various costs and expenses that you will bear directly and
indirectly. See the prospectuses of the GCG Trust, Travelers Series
Fund Inc., Greenwich Street Series Fund and Smith Barney Concert
Allocation Series Inc. for additional information on portfolio
expenses.
Premium taxes (which currently range from 0% to 3.5% of premium
payments) may apply, but are not reflected in the tables above or in
the examples below.
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EXAMPLES:
In the following examples, surrender charges may apply if you choose
to annuitize within the first 7 contract years. The examples also
assume election of the Annual Ratchet Enhanced Death Benefit and are
based on an assumed 5% annual return.
If you surrender your Contract at the end of the applicable time
period, you would pay the following expenses for each $1,000
invested:
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THE GCG TRUST 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Total Return................. $94.92 $126.61 $160.86 $278.66
Research..................... $94.62 $125.70 $159.36 $275.65
Mid-Cap Growth .............. $94.72 $126.01 $159.86 $276.66
TRAVELERS SERIES FUND INC.
Smith Barney Large Cap Value. $92.01 $117.85 $146.21 $249.20
Smith Barney International
Equity .................... $95.22 $127.51 $162.37 $281.65
Smith Barney High Income..... $91.91 $117.54 $145.70 $248.16
Smith Barney Money Market.... $91.61 $116.63 $144.17 $245.06
GREENWICH STREET SERIES FUND
Appreciation ................ $93.22 $121.48 $152.30 $261.50
SMITH BARNEY CONCERT
ALLOCATION SERIES INC.
Select High Growth........... $97.72 $134.99 $174.80 $306.24
Select Growth................ $96.82 $132.31 $170.34 $297.47
Select Balanced.............. $95.72 $129.01 $164.87 $286.62
Select Conservative.......... $95.92 $129.61 $165.86 $288.61
Select Income................ $95.42 $128.11 $163.37 $283.65
If you do not surrender your Contract or if you annuitize on the
annuity start date, you would pay the following expenses for each
$1,000 invested:
- ----------------------------------------------------------------------
THE GCG TRUST 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Total Return..................$24.92 $76.61 $130.86 $278.66
Research......................$24.62 $75.70 $129.36 $275.65
Mid-Cap Growth................$24.72 $76.01 $129.86 $276.66
TRAVELERS SERIES FUND INC.
Smith Barney Large Cap Value..$22.01 $67.85 $116.21 $249.20
Smith Barney International
Equity......................$25.22 $77.51 $132.37 $281.65
Smith Barney High Income......$21.91 $67.54 $115.70 $248.16
Smith Barney Money Market.....$21.61 $66.63 $114.17 $245.06
GREENWICH STREET SERIES FUND
Appreciation..................$23.22 $71.48 $122.30 $261.50
SMITH BARNEY CONCERT
ALLOCATION SERIES INC.
Select High Growth............$27.72 $84.99 $144.80 $306.24
Select Growth.................$26.82 $82.31 $140.34 $297.47
Select Balanced...............$25.72 $79.01 $134.87 $286.62
Select Conservative...........$25.92 $79.61 $135.86 $288.61
Select Income.................$25.42 $78.11 $133.37 $283.65
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The examples above reflect the annual administrative charge as an
annual charge of 0.09% of assets (based on an average contract value
of $33,000). If the Standard Death Benefit is elected instead of the
Annual Ratchet Enhanced Death Benefit used in the examples, the
actual expenses will be less than those represented in the examples.
THESE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN SUBJECT TO THE TERMS OF YOUR CONTRACT.
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PERFORMANCE INFORMATION
- --------------------------------------------------------------------------
ACCUMULATION UNIT
We use accumulation units to calculate the value of a Contract. Each
subaccount of Separate Account NY-B has its own accumulation unit
value. The accumulation units are valued each business day that the
New York Stock Exchange is open for trading. Their values may
increase or decrease from day to day according to a Net Investment
Factor, which is primarily based on the investment performance of the
applicable investment portfolio. Shares in the investment portfolios
are valued at their net asset value.
THE NET INVESTMENT FACTOR
The Net Investment Factor is an index number which reflects charges
under the Contract and the investment performance of the subaccount.
The Net Investment Factor is calculated as follows:
(1)We take the net asset value of the subaccount at the end of
each business day.
(2)We add to (1) the amount of any dividend or capital gains
distribution declared for the subaccount and reinvested in
such subaccount. We subtract from that amount a charge for
our taxes, if any.
(3)We divide (2) by the net asset value of the subaccount at the
end of the preceding business day.
(4)We then subtract the applicable daily mortality and expense
risk charge and the daily asset-based administrative charge
from each subaccount.
Calculations for the subaccounts are made on a per share basis.
CONDENSED FINANCIAL INFORMATION
Tables containing (i) the accumulation unit value history of each
subaccount of First Golden American Separate Account NY-B offered in
this prospectus and (ii) the total investment value history of each
such subaccount are presented in Appendix A - Condensed Financial
Information.
FINANCIAL STATEMENTS
The audited financial statements of Separate Account NY-B for the
years ended December 31, 1998 and 1997 are included in the Statement
of Additional Information. The audited financial statements of First
Golden American for the years ended December 31, 1998, 1997 and 1996
are included in this prospectus.
PERFORMANCE INFORMATION
From time to time, we may advertise or include in reports to contract
owners performance information for the subaccounts of Separate
Account NY-B, including the average annual total return performance,
yields and other nonstandard measures of performance. Such
performance data will be computed, or accompanied by performance data
computed, in accordance with standards defined by the SEC.
Except for the Smith Barney Money Market subaccount, quotations of
yield for the subaccounts will be based on all investment income per
unit (contract value divided by the accumulation unit) earned during
a given 30-day period, less expenses accrued during such period.
5
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Information on standard total average annual return performance will
include average annual rates of total return for 1, 5 and 10 year
periods, or lesser periods depending on how long the subaccount of
Separate Account NY-B has been in existence. We may show other total
returns for periods less than one year. Total return figures will be
based on the actual historic performance of the subaccounts of
Separate Account NY-B, assuming an investment at the beginning of the
period, withdrawal of the investment at the end of the period, and
the deduction of all applicable portfolio and contract charges. We
may also show rates of total return on amounts invested at the
beginning of the period with no withdrawal at the end of the period.
Total return figures which assume no withdrawals at the end of the
period will reflect all recurring charges, but will not reflect the
surrender charge. In addition, we may present historic performance
data for the mutual fund investment portfolios since their inception
reduced by some or all of the fees and charges under the Contract.
Such adjusted historic performance includes data that precedes the
inception dates of the subaccounts of Separate Account NY-B. This
data is designed to show the performance that would have resulted if
the Contract had been in existence during that time.
Current yield for the Smith Barney Money Market subaccount is based
on income received by a hypothetical investment over a given 7-day
period, less expenses accrued, and then "annualized" (i.e., assuming
that the 7-day yield would be received for 52 weeks). We calculate
"effective yield" for the Smith Barney Money Market subaccount 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 thus be slightly higher than the "yield"
because of the compounding effect of earnings. We calculate
quotations of yield for the remaining subaccounts on all investment
income per accumulation unit earned during a given 30-day period,
after subtracting fees and expenses accrued during the period.
We may compare performance information for a subaccount to: (i) the
Standard & Poor's 500 Stock Index, Dow Jones Industrial Average,
Donoghue Money Market Institutional Averages, or any other applicable
market indices, (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), or any other rating service, and (iii)
the Consumer Price Index (measure for inflation) to assess the real
rate of return from an investment in the Contract. Our reports and
promotional literature may also contain other information including
the ranking of any subaccount based on rankings of variable annuity
separate accounts or other investment products tracked by Lipper
Analytical Services or by similar rating services.
Performance information reflects only the performance of a
hypothetical contract and should be considered in light of other
factors, including the investment objective of the investment
portfolio and market conditions. Please keep in mind that past
performance is not a guarantee of future results.
[Shaded Section Header]
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FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
- --------------------------------------------------------------------------
First Golden American Life Insurance Company of New York is a New
York stock life insurance company. First Golden American is a wholly
owned subsidiary of Golden American Life Insurance Company. Golden
American, in turn, is a wholly owned subsidiary of Equitable of Iowa
Companies, Inc. ("Equitable of Iowa") which, in turn, is a wholly
owned subsidiary of ING Groep N.V. ("ING"), a global financial
services holding company with approximately $461.8 billion in assets
as of December 31, 1998. First Golden American is authorized to sell
variable annuities in the states of New York and Delaware. First
Golden American's financial statements appear in this prospectus.
Our principal office is located at 230 Park Avenue, Suite 966, New
York, New York 10169.
6
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THE TRUSTS
- --------------------------------------------------------------------------
The GCG Trust is a mutual fund whose shares are available to separate
accounts funding variable annuity and variable life insurance
policies offered by First Golden American, and its parent, Golden
American Life Insurance Company. The GCG Trust also sells its shares
to separate accounts of other insurance companies, both affiliated
and not affiliated with Golden American. Pending SEC approval,
shares of the GCG Trust may also be sold to certain qualified pension
and retirement plans.
The Travelers Series Fund, Greenwich Street Series Fund and Smith
Barney Concert Allocation Series Inc. are also mutual funds whose
shares are available to Separate Account NY-B which funds variable
insurance products offered by First Golden American. The Travelers
Series Fund Inc. and Greenwich Street Series Fund shares may also be
available to other separate accounts funding variable insurance
products offered by First Golden American. The Travelers Series Fund
Inc., Greenwich Street Series Fund and Smith Barney Concert
Allocation Series Inc. may also sell their shares to separate
accounts of other insurance companies, both affiliated and not
affiliated with First Golden American. The principal address of
Travelers Series Fund Inc., Greenwich Street Series Fund and Smith
Barney Concert Allocation Series Inc. is 388 Greenwich Street, New
York, New York 10013.
In the event that, due to differences in tax treatment or other
considerations, the interests of contract owners of various contracts
participating in the Trusts conflict, we, the Boards of Trustees of
the GCG Trust, Travelers Series Fund, Greenwich Street Series Fund
and Smith Barney Concert Allocation Series, Directed Services, Inc.,
and any other insurance companies participating in the Trusts will
monitor events to identify and resolve any material conflicts that
may arise.
YOU WILL FIND COMPLETE INFORMATION ABOUT THE GCG TRUST, TRAVELERS
SERIES FUND INC., GREENWICH STREET SERIES FUND AND SMITH BARNEY
CONCERT ALLOCATION SERIES INC. IN THE ACCOMPANYING TRUSTS'
PROSPECTUSES. YOU SHOULD READ THEM CAREFULLY BEFORE INVESTING.
[Shaded Section Header]
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FIRST GOLDEN AMERICAN SEPARATE ACCOUNT NY-B
- --------------------------------------------------------------------------
First Golden Separate Account B ("Account NY-B") was established as a
separate account of the Company on June 13, 1996. It is registered
with the Securities and Exchange Commission as a unit investment
trust under the Investment Company Act of 1940. Account NY-B is a
separate investment account used for our variable annuity contracts.
We own all the assets in Account NY-B but such assets are kept
separate from our other accounts.
Account NY-B is divided into subaccounts. Each subaccount invests
exclusively in shares of one investment portfolio of the GCG Trust,
Travelers Series Fund, Greenwich Street Series Fund and Smith Barney
Concert Allocation Series Inc. Each investment portfolio has its own
distinct investment objectives and policies. Income, gains and
losses, realized or unrealized, of a portfolio are credited to or
charged against the corresponding subaccount of Account NY-B without
regard to any other income, gains or losses of the Company. Assets
equal to the reserves and other contract liabilities with respect to
each are not chargeable with liabilities arising out of any other
business of the Company. They may, however, be subject to
liabilities arising from subaccounts whose assets we attribute to
other variable annuity contracts supported by Account B. If the
assets in Account NY-B exceed the required reserves and other
liabilities, we may transfer the excess to our general account. We
are obligated to pay all benefits and make all payments provided
under the Contracts.
We currently offer other variable annuity contracts that invest in
Account NY-B but are not discussed in this prospectus. Account NY-B
may also invest in other investment portfolios which are not
available under your Contract.
7
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THE INVESTMENT PORTFOLIOS
- --------------------------------------------------------------------------
During the accumulation phase, you may allocate your premium payments
and contract value to any of the investment portfolios listed below.
YOU BEAR THE ENTIRE INVESTMENT RISK FOR AMOUNTS YOU ALLOCATE TO THE
INVESTMENT PORTFOLIOS AND MAY LOSE YOUR PRINCIPAL.
INVESTMENT OBJECTIVES
The investment objective of each investment portfolio is set forth
below. You should understand that there is no guarantee that any
portfolio 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. MORE DETAILED INFORMATION ABOUT THE INVESTMENT
PORTFOLIOS CAN BE FOUND IN THE PROSPECTUSES FOR THE GCG TRUST,
TRAVELERS SERIES FUND INC., GREENWICH STREET SERIES FUND AND SMITH
BARNEY CONCERT ALLOCATION SERIES INC. YOU SHOULD READ THESE
PROSPECTUSES BEFORE INVESTING.
[Shaded Section Header]
- --------------------------------------------------------------------------
INVESTMENT PORTFOLIO INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------
Total Return Seeks above-average income (compared to a portfolio
entirely invested in equity securities)
consistent with the prudent employment of
capital.
Invests primarily in a combination of equity
and fixed income securities.
------------------------------------------------------
Research Seeks long-term growth of capital and future income.
Invests primarily in common stocks or
securities convertible into common stocks of
companies believed to have better than average
prospects for long-term growth.
------------------------------------------------------
Mid-Cap Growth Seeks long-term growth of capital.
Invests primarily in equity securities of
companies with medium market capitalization
which the portfolio manager believes have
above-average growth potential.
------------------------------------------------------
Smith Barney
Large Cap
Value Seeks current income and long-term growth of income
and capital.
Invests primarily in common stocks of U.S. companies
having market capitalization of at least $5 billion
at the time of investment.
------------------------------------------------------
Smith Barney
International
Equity Seeks total return on its assets from growth of capital
and income.
Invests primarily in a diversified portfolio
of equity securities of established non-U.S.
issuers.
------------------------------------------------------
Smith Barney High
Income Seeks high current income. Secondary objective:
capital appreciation.
Invests in high-yielding corporate debt
obligations and preferred stock of foreign issuers.
In addition, the portfolio may invest up to 20% of its
assets in the securities of foreign issuers
that are denominated in currencies other than
U.S. dollars.
------------------------------------------------------
Smith Barney
Money Market Seeks maximum current income and preservation of capital.
Invests in bank obligations and high quality
commercial paper, corporate obligations and
municipal obligations in addition to U.S.
government securities and related repurchase
agreements.
------------------------------------------------------
Appreciation Seeks long-term appreciation of capital.
Invests primarily in equity and equity-related
securities that are believed to afford
attractive opportunities for appreciation.
------------------------------------------------------
8
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Select High
Growth Seeks capital appreciation.
Invests a large portion of its assets in
aggressive equity mutual funds that focus on
smaller, more speculative companies as well as
mid-sized (or larger) companies with the
potential for rapid growth. A significant
portion of the portfolio may be invested in
international or emerging markets funds in
order to achieve a greater level of
diversification.
------------------------------------------------------
Select Growth Seeks long-term growth of capital.
Invests primarily in nutual funds that focus in
large-capitalization equity securities, to provide
growth. The portfolio also invests in mutual funds
that focus on small- and middle-capitalization
equity securities and international securities. In
addition, a significant portion of the
portfolio is also allocated to bonds, to help
reduce volatility.
------------------------------------------------------
Select Balanced Seeks long-term growth of capital and income,
placing equal emphasis on current income and
capital appreciation.
The portfolio divides its assets roughly
between equity and fixed-income mutual funds.
The equity funds are primarily large-
capitalization, dividend-paying stock funds.
The fixed-income portion of the portfolio is
mainly invested in funds that invest in U.S.
government and agency securities, as well as
mortgage-backed securities.
------------------------------------------------------
Select
Conservative Seeks income, and secondarily, long-term capital growth.
The portfolio consists primarily of taxable
fixed income funds, with a significant portion
invested in equity funds that invest primarily
in large-capitalization U.S. stocks.
------------------------------------------------------
Select Income Seeks high current income.
The portfolio allocates most of its assets to
taxable fixed-income funds designed to
generate a high level of income consistent
with safety and relative stability of
principal. A small portion of the portfolio
is invested in equity funds that primarily invest
in large-capitalization U.S. stocks.
------------------------------------------------------
INVESTMENT PORTFOLIO MANAGEMENT FEES
Directed Services, Inc. serves as the overall manager of the GCG
Trust and SSBC Fund Management Inc. serves as the overall manager of
Travelers Series Fund, Greenwich Street Series Fund and Smith Barney
Concert Allocation Series Inc. Directed Services, Inc. has retained
a portfolio manager to manage the assets of the portfolios of the GCG
Trust.
Directed Services and SSBC Fund Management Inc. provide or procure,
at their own expense, the services necessary for the operation of the
portfolios. The GCG Trust pays Directed Services for its services a
monthly fee based on the annual rates of the average daily net assets
of the investment portfolios. Each portfolio pays its portfolio
manager, for its services a fee, payable monthly, based on the annual
rates of the average daily net assets of the portfolio. Directed
Services (and not the GCG Trust) in turn pays each portfolio manager
a monthly fee for managing the assets of the portfolios.
Directed Services, Inc. and SSBC Fund Management Inc. do not bear the
expense of brokerage fees and other transactional expenses for
securities, taxes (if any) paid by a portfolio, interest on
borrowing, fees and expenses of the independent trustees, and
extraordinary expenses, such as litigation or indemnification
expenses.
More detailed information about each portfolio's management fees can
be found in the prospectuses for each Trust. You should read these
prospectuses before investing.
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THE FIXED INTEREST ALLOCATION
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You may allocate premium payments and transfer your contract value to
the guaranteed interest periods of our Fixed Account at any time
during the accumulation period. Every time you allocate money to the
Fixed Account, we set up a Fixed Interest Allocation for the
guaranteed interest period you select. We currently offer guaranteed
interest periods of 1, 3, 5, 7 and 10 years, although we may not
offer all these periods in the future. You may select one or more
guaranteed interest periods at any one time. We will credit your
Fixed Interest Allocation with a guaranteed interest rate for the
interest period you select, so long as you do not withdraw money from
that Fixed Interest Allocation before the end of the guaranteed
interest period. Each guaranteed interest period ends on its
maturity date which is the last day of the month in which the
interest period is scheduled to expire.
If you surrender, withdraw, transfer or annuitize your investment in
a Fixed Interest Allocation more than 30 days before the end of the
guaranteed interest period, we will apply a Market Value Adjustment
to the transaction. A Market Value Adjustment could increase or
decrease the amount you surrender, withdraw, transfer or annuitize,
depending on current interest rates at the time of the transaction.
YOU BEAR THE RISK THAT YOU MAY RECEIVE LESS THAN YOUR PRINCIPAL IF WE
APPLY A MARKET VALUE ADJUSTMENT.
Assets supporting amounts allocated to the Fixed Account are
available to fund the claims of all classes of our customer, contract
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 GUARANTEED INTEREST PERIOD
You may select one or more Fixed Interest Allocations with specified
guaranteed interest periods. A guaranteed interest period is the
period that a rate of interest is guaranteed to be credited to your
Fixed Interest Allocation. We may at any time decrease or increase
the number of guaranteed interest periods offered.
Your contract value in the Fixed Account is the sum of your Fixed
Interest Allocations and the interest credited as adjusted for any
withdrawals (including any Market Value Adjustment applied to such
withdrawal), transfers or other charges we may impose, including any
Market Value Adjustment. Your Fixed Interest Allocation will be
credited with the guaranteed interest rate in effect for the
guaranteed interest period you selected when we receive and accept
your premium or reallocation of contract value. We will credit
interest daily at a rate which yields the quoted guaranteed interest
rate.
GUARANTEED INTEREST RATES
Each Fixed Interest Allocation will have an interest rate that is
guaranteed as long as you hold it until its maturity date. We do not
have a specific formula for establishing the guaranteed interest
rates for the different guaranteed interest periods. We determine
guaranteed interest rates at our sole discretion. The determination
may be influenced by the interest rates on fixed income investments
in which we may invest with the amounts we receive under the
Contracts. We will invest these amounts primarily in investment-
grade fixed income securities (i.e., rated by Standard & Poor's
rating system to be suitable for prudent investors) although we are
not obligated to invest according to any particular strategy, except
as may be required by applicable law. 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 the level of future interest rates but no
Fixed Interest Allocation will ever have a guaranteed interest rate
of less than 3% per year.
We may from time to time at our discretion offer interest rate
specials for new premiums that are higher than the current base
interest rate then offered. Renewal rates for such rate specials
will be based on the base interest rate and not on the special rates
initially declared.
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TRANSFERS FROM A FIXED INTEREST ALLOCATION
You may transfer your contract value in a Fixed Interest Allocation
to one or more new Fixed Interest Allocations with new guaranteed
interest periods, or to any of the subaccounts of Account NY-B.
Unless you tell us the Fixed Interest Allocations from which such
transfers will be made, we will transfer amounts from your Fixed
Interest Allocations starting with the guaranteed interest period
nearest its maturity date, until we have honored your transfer
request.
The minimum amount that you can transfer to or from any Fixed
Interest Allocation is $250. If a transfer request would reduce the
contract value remaining in a Fixed Interest Allocation to less than
$250, we will treat such transfer request as a request to transfer
the entire contract value in such Fixed Interest Allocation.
Transfers from a Fixed Interest Allocation may be subject to a Market
Value Adjustment. If you have a special Fixed Interest Allocation
offered only with dollar cost averaging, cancelling dollar cost
averaging will cause a transfer of the entire contract value in such
Fixed Interest Allocation to the Liquid Asset subaccount, and such a
transfer is subject to a Market Value Adjustment.
On the maturity date of a guaranteed interest period, you may
transfer amounts from the applicable Fixed Interest Allocation to the
subaccounts and/or to new Fixed Interest Allocations with guaranteed
interest periods of any length we are offering at that time. You may
not, however, transfer amounts to any Fixed Interest Allocation with
a guaranteed interest period that extends beyond the annuity start
date.
At least 30 calendar days before a maturity date of any of your Fixed
Interest Allocations, or earlier if required by state law, we will
send you a notice of the guaranteed interest periods that are
available. You must notify us which subaccounts or new guaranteed
interest periods you have selected before the maturity date of your
Fixed Interest Allocations. If we do not receive timely instructions
from you, we will transfer the contract value in the maturing Fixed
Interest Allocation to a new Fixed Interest Allocation with a
guaranteed interest period that is the same as the expiring
guaranteed interest period. If such guaranteed interest period is
not available or would go beyond the annuity start date, we will
transfer your contract value in the maturing Fixed Interest
Allocation to the next shortest guaranteed interest period which does
not go beyond the annuity start date. If no such guaranteed interest
period is available, we will transfer the contract value to a
subaccount specially designated by the Company for such purpose.
Currently we use the Smith Barney Money Market subaccount for such
purpose.
WITHDRAWALS FROM A FIXED INTEREST ALLOCATION
During the accumulation phase, you may withdraw a portion of your
contract value in any Fixed Interest Allocation. You may make
systematic withdrawals of only the interest earned during the prior
month, quarter or year, depending on the frequency chosen, from a
Fixed Interest Allocation under our systematic withdrawal option.
Systematic withdrawals from a Fixed Interest Allocation are not
permitted if such Fixed Interest Allocation is currently
participating in the dollar cost averaging program. A withdrawal
from a Fixed Interest Allocation may be subject to a Market Value
Adjustment and, in some cases, a surrender charge. Be aware that
withdrawals may have federal income tax consequences, including a 10%
penalty tax.
If you tell us the Fixed Interest Allocation from which your
withdrawal will be made, we will assess the withdrawal against that
Fixed Interest Allocation. If you do not, we will assess your
withdrawal against the subaccounts in which you are invested, unless
the withdrawal exceeds the contract value in the subaccounts. If
there is no contract value in those subaccounts, we will deduct your
withdrawal from your Fixed Interest Allocations starting with the
guaranteed interest periods nearest their maturity dates until we
have honored your request.
MARKET VALUE ADJUSTMENT
We will apply a Market Value Adjustment (i) whenever you withdraw or
transfer money from a Fixed Interest Allocation (unless made within
30 days before the maturity date of the applicable guaranteed
interest period, or under the systematic withdrawal or dollar cost
averaging program) and (ii) if on the annuity start date a guaranteed
interest period for any Fixed Interest Allocation does not end on or
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within 30 days of the annuity start date. A Market Value Adjustment
may decrease, increase or have no effect on your contract value.
We determine the Market Value Adjustment by multiplying the amount
you withdraw, transfer or apply to an income plan by the following
factor:
( 1+I )N/365 -1
(---------)
(1+J+.0025)
Where,
o "I" is the Index Rate for a Fixed Interest Allocation on the
first day of the guaranteed interest period;
o "J" is the Index Rate for a new Fixed Interest Allocation with
a guaranteed interest period equal to the time remaining in
the guaranteed interest period; and
o "N" is the remaining number of days in the guaranteed interest
period at the time of calculation.
The Index Rate is the average of the Ask Yields for U.S. Treasury
Strips as quoted by a national quoting service for a period equal to
the applicable guaranteed interest period. The average currently is
based on the period starting from the 22nd day of the calendar month
two months prior to the month of the Index Rate determination and
ending the 21st day of the calendar month immediately before the
month of determination. We currently calculate the Index Rate once
each calendar month but have the right to calculate it more
frequently. The Index Rate will always be based on a period of at
least 28 days. If the Ask Yields are no longer available, we will
determine the Index Rate by using a suitable and approved, if
required, replacement method.
A Market Value Adjustment may be positive, negative or result in no
change. In general, if interest rates are rising, you bear the risk
that any Market Value Adjustment will likely be negative and reduce
your contract value. On the other hand, if interest rates are
falling, it is more likely that you will receive a positive Market
Value Adjustment that increases your contract value. In the event of
a full surrender, transfer or annuitization from a Fixed Interest
Allocation, we will add or subtract any Market Value Adjustment from
the amount surrendered, transferred or annuitized. In the event of a
partial withdrawal, transfer or annuitization, we will add or
subtract any Market Value Adjustment from the total amount withdrawn,
transferred or annuitized in order to provide the amount requested.
If a negative Market Value Adjustment exceeds your contract value in
the Fixed Interest Allocation, we will consider your request to be a
full surrender, transfer or annuitization of the Fixed Interest
Allocation.
Several examples which illustrate how the Market Value Adjustment
works are included in Appendix B.
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THE ANNUITY CONTRACT
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The Contract described in this prospectus is a deferred combination
variable and fixed annuity contract. The Contract provides a means
for you to invest in one or more of the available mutual fund
portfolios of the GCG Trust, Travelers Series Fund, Greenwich Street
Series and Smith Barney Concert Allocation Series funded by Account
NY-B. It also provides a means for you to invest in a Fixed Interest
Allocation through the Fixed Account.
CONTRACT DATE AND CONTRACT YEAR
The date the Contract became effective is the contract date. Each 12-
month period following the contract date is a contract year.
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ANNUITY START DATE
The annuity start date is the date you start receiving annuity
payments under your Contract. The Contract, like all deferred
variable annuity contracts, has two phases: the accumulation phase
and the income phase. The accumulation phase is the period between
the contract date and the annuity start date. The income phase
begins when you start receiving regular annuity payments from your
Contract on the annuity start date.
CONTRACT OWNER
You are the contract 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 will determine the applicable death benefit if such
death benefit is available for multiple owners.
The death benefit becomes payable when you die. In the case of a
sole contract owner who dies before the income phase begins, we will
pay the beneficiary the death benefit then due. The sole contract
owner's estate will be the beneficiary if no beneficiary has been
designated or the beneficiary has predeceased the contract owner. In
the case of a joint owner of the Contract dying before the income
phase begins, we will designate the surviving contract owner as the
beneficiary. This will override any previous beneficiary
designation.
If the contract owner is a trust and a beneficial owner of the trust
has been designated, the beneficial owner will be treated as the
contract owner for determining the death benefit. If a beneficial
owner is changed or added after the contract date, this will be
treated as a change of contract owner for determining the death
benefit. If no beneficial owner of the Trust has been designated,
the availability of enhanced death benefits will be based on the age
of the annuitant at the time you purchase the Contract.
JOINT OWNER. For non-qualified Contracts only, joint owners may
be named in a written request before the Contract is in effect.
Joint owners may independently exercise transfers and other
transactions allowed under the Contract. All other rights of
ownership must be exercised by both owners. Joint owners own equal
shares of any benefits accruing or payments made to them. All rights
of a joint owner end at death of that owner if the other joint owner
survives. The entire interest of the deceased joint owner in the
Contract will pass to the surviving joint owner. The age of the
older owner will determine the applicable death benefit if Enhanced
Death Benefits are available for multiple owners.
ANNUITANT
The annuitant is the person designated by you to be the measuring
life in determining annuity payments. The annuitant's age determines
when the income phase must begin and the amount of the annuity
payments to be paid. You are the annuitant unless you choose to name
another person. The annuitant may not be changed after the Contract
is in effect.
The contract owner will receive the annuity benefits of the Contract
if the annuitant is living on the annuity start date. If the
annuitant dies before the annuity start date, and a contingent
annuitant has been named, the contingent annuitant becomes the
annuitant (unless the contract owner is not an individual, in which
case the death benefit becomes payable).
If there is no contingent annuitant when the annuitant dies before
the annuity start date, the contract owner will become the annuitant.
The contract 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 before
the annuity start date and the contract owner is not an individual,
we will pay the designated beneficiary the death benefit then due.
If a beneficiary has not been designated, or if there is no
designated beneficiary living, the contract owner will be the
beneficiary. If the annuitant was the sole contract owner and there
is no beneficiary designation, the annuitant's estate will be the
beneficiary.
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Regardless of whether a death benefit is payable, if the annuitant
dies and any contract owner is not an individual, distribution rules
under federal tax law will apply. You should consult your tax
advisor for more information if you are not an individual.
BENEFICIARY
The beneficiary is named by you in a written request. The
beneficiary is the person who receives any death benefit proceeds and
who becomes the successor contract owner if the contract owner (or
the annuitant if the contract owner is other than an individual) dies
before the annuity start date. We pay death benefits to the primary
beneficiary (unless there are joint owners, in which case death
proceeds are payable to the surviving owner(s)).
If the beneficiary dies before the annuitant or the contract 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 contract owner's estate.
One or more persons may be a beneficiary or contingent beneficiary.
In the case of more than one beneficiary, 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 some of
the rights and options under the Contract.
CHANGE OF CONTRACT OWNER OR BENEFICIARY. During the annuitant's
lifetime, you may transfer ownership of a non-qualified Contract. A
change in ownership may affect the amount of the death benefit and
the guaranteed death benefit. You may also change the beneficiary.
All requests for changes must be in writing and submitted to our
Customer Service Center in good order. The change will be effective
as of the day you sign the request. The change will not affect any
payment made or action taken by us before recording the change.
PURCHASE AND AVAILABILITY OF THE CONTRACT
We will issue a Contract only if both the annuitant and the contract
owner are not older than age 85.
The initial premium payment must be $10,000 or more ($1,500 for
qualified Contracts). You may make additional payments of $500 or
more ($250 for qualified Contracts) at any time after the free look
period before you turn age 85. Under certain circumstances, we may
waive the minimum premium payment requirement. We may also change the
minimum initial or additional premium requirements for certain group
or sponsored arrangements. Any initial or additional premium payment
that would cause the contract value of all annuities that you
maintain with us to exceed $1,000,000 requires our prior approval.
CREDITING OF PREMIUM PAYMENTS
We will allocate your initial premium within 2 business days after
receipt, if the application and all information necessary for
processing the Contract are complete. Subsequent premium payments
received in good order will be credited to a Contract within 1
business day if they are received in good order. In certain states we
also accept initial and additional premium payments by wire order.
Wire transmittals must be accompanied by sufficient electronically
transmitted data. We may retain premium payments for up to 5
business days while attempting to complete an incomplete application.
If the application cannot be completed within this period, we will
inform you of the reasons for the delay. We will also return the
premium payment immediately unless you direct us to hold the premium
payment until the application is completed. Once the completed
application is received, we will allocate the payment to the
subaccount and/or Fixed Interest Allocations specified by you within
2 business days. We will make inquiry to discover any missing
information related to subsequent payments. For any subsequent
premium payments, the payment will be credited at the accumulation
unit value next determined after receipt of your premium payment.
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Once we allocate your premium payment to the subaccounts selected by
you, we convert the premium payment into accumulation units. We
divide the amount of the premium payment allocated to a particular
subaccount by the value of an accumulation unit for the subaccount to
determine the number of accumulation units of the subaccount to be
held in Account NY-B with respect to your Contract. The net
investment results of each subaccount vary with its investment
performance.
In some states, we may require that an initial premium designated for
a subaccount of Account B or the Fixed Account be allocated to a
subaccount specially designated by the Company (currently, the Smith
Barney Money Market subaccount) during the free look period. After
the free look period, we will convert your contract value (your
initial premium plus any earnings less any expenses) into
accumulation units of the subaccounts you previously selected. The
accumulation units will be allocated based on the accumulation unit
value next computed for each subaccount. Initial premiums designated
for Fixed Interest Allocations will be allocated to a Fixed Interest
Allocation with the guaranteed interest period you have chosen;
however, in the future we may allocate the premiums to the specially
designated subaccount during the free look period.
CONTRACT VALUE
We determine your contract value on a daily basis beginning on the
contract date. Your contract value is the sum of (a) the contract
value in the Fixed Interest Allocations, and (b) the contract value
in each subaccount in which you are invested.
CONTRACT VALUE IN FIXED INTEREST ALLOCATIONS. The contract value
in your Fixed Interest Allocation(s) is the sum of premium payments
allocated to the Fixed Interest Allocation(s) under the Contract,
plus contract value transferred to the Fixed Interest Allocation,
plus credited interest, minus any transfers and withdrawals from the
Fixed Interest Allocation (including any Market Value Adjustment
applied to such withdrawal), contract fees, and premium taxes.
CONTRACT VALUE IN THE SUBACCOUNTS. On the contract date, the
contract value in the subaccount in which you are invested is equal
to the initial premium paid and designated to be allocated to the
subaccount. On the contract date, we allocate your contract value to
each subaccount and/or a Fixed Interest Allocation specified by you,
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 Interest
Allocation will be allocated to a subaccount specially designated by
the Company during the free look period for this purpose (currently,
the Smith Barney Money Market subaccount).
On each business day after the contract date, we calculate the amount
of contract value in each subaccount as follows:
(1)We take the contract value in the subaccount at the end of the
preceding business day.
(2)We multiply (1) by the subaccount's Net Investment Factor
since the preceding business day.
(3)We add (1) and (2).
(4)We add to (3) any additional premium payments, and then add or
subtract transfers to or from that subaccount.
(5)We subtract from (4) any withdrawals and any related charges,
and then subtract any contract fees and premium taxes.
CASH SURRENDER VALUE
The cash surrender value is the amount you receive when you surrender
the Contract. The cash surrender value will fluctuate daily based on
the investment results of the subaccounts in which you are invested
and interest credited to Fixed Interest Allocations and any Market
Value Adjustment. We do not guarantee any minimum cash surrender
value. On any date during the accumulation phase, we calculate the
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cash surrender value as follows: we start with your contract value,
then we adjust for any Market Value Adjustment, then we deduct any
surrender charge, any charge for premium taxes, and any other charges
incurred but not yet deducted.
SURRENDERING TO RECEIVE THE CASH SURRENDER VALUE
You may surrender the Contract at any time while the annuitant is
living and before the annuity start date. A surrender will be
effective on the date your written request and the Contract are
received at our Customer Service Center. We will determine and pay
the cash surrender value at the price next determined after receipt
of your request. Once paid, all benefits under the Contract will be
terminated. For administrative purposes, we will transfer your money
to a specially designated subaccount (currently the Smith Barney
Money Market subaccount) prior to processing the surrender. This
transfer will have no effect on your cash surrender value. You may
receive the cash surrender value in a single sum payment or apply it
under one or more annuity options. We will usually pay the cash
surrender value within 7 days.
Consult your tax advisor regarding the tax consequences associated
with surrendering your Contract. A surrender made before you reach
age 59 1/2 may result in a 10% tax penalty. See "Federal Tax
Considerations" for more details.
ADDITION, DELETION OR SUBSTITUTION OF SUBACCOUNTS AND OTHER CHANGES
We may make additional subaccounts available to you under the
Contract. These subaccounts will invest in investment portfolios we
find suitable for your Contract.
We may amend the Contract to conform to applicable laws or
governmental regulations. If we feel that investment in any of the
investment portfolios has become inappropriate to the purposes of the
Contract, we may, with approval of the SEC (and any other regulatory
agency, if required) substitute another portfolio for existing and
future investments.
We also reserve the right to: (i) deregister Account B under the 1940
Act; (ii) operate Account B as a management company under the 1940
Act if it is operating as a unit investment trust; (iii) operate
Account B as a unit investment trust under the 1940 Act if it is
operating as a managed separate account; (iv) restrict or eliminate
any voting rights as to Account B; and (v) combine Account B with
other accounts.
We will, of course, provide you with written notice before any of
these changes are effected.
THE FIXED ACCOUNT
The Fixed Account is a segregated asset account which contains the
assets that support a contract owner's Fixed Interest Allocations.
See "The Fixed Interest Allocations" for more information.
Other Contracts
We offer other variable annuity contracts that also invest in the
same portfolios of the Trusts. These contracts have different
charges that could effect their performance, and may offer different
benefits more suitable to your needs. To obtain more information
about these other contracts, contact our Customer Service Center or
your registered representative.
OTHER IMPORTANT PROVISIONS
See "Withdrawals," "Transfers Among Your Investments," "Death Benefit
Choices," "Charges and Fees," "The Annuity Options" and "Other
Contract Provisions" in this prospectus for information on other
important provisions in your Contract.
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WITHDRAWALS
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Any time during the accumulation phase and before the death of the
annuitant, you may withdraw all or part of your money. Keep in mind
that if you request a withdrawal for more than 90% of the cash
surrender value, we will treat it as a request to surrender the
Contract. If any single withdrawal or the sum of withdrawals exceeds
the Free Withdrawal Amount, you will incur a surrender charge. The
Free Withdrawal Amount in any contract year is 15% of your contract
value on the date of withdrawal less any withdrawals during that
contract year.
You need to submit to us a written request specifying the Fixed
Interest Allocations or subaccounts from which amounts are to be
withdrawn, otherwise the withdrawal will be made on a pro rata basis
from all of the subaccounts in which you are invested. If there is
not enough contract value in the subaccounts, we will deduct the
balance of the withdrawal from your Fixed Interest Allocations
starting with the guaranteed interest periods nearest their maturity
dates until we have honored your request. We will apply a Market
Value Adjustment to any withdrawal from your Fixed Interest
Allocation taken more than 30 days before its maturity date. We will
determine the contract value as of the close of business on the day
we receive your withdrawal request at our Customer Service Center.
The contract value may be more or less than the premium payments
made.
For administrative purposes, we will transfer your money to a
specially designated subaccount (currently, the Smith Barney Money
Market subaccount) prior to processing the withdrawal. This transfer
will not effect the withdrawal amount you receive.
We offer the following three withdrawal options:
REGULAR WITHDRAWALS
After the free look period, you may make regular withdrawals. Each
withdrawal must be a minimum of $1,000. We will apply a Market Value
Adjustment to any regular withdrawals from a Fixed Interest
Allocation that is taken more than 30 days before its maturity date.
SYSTEMATIC WITHDRAWALS
You may choose to receive automatic systematic withdrawals on a
monthly, quarterly, or annual basis from the contract value in the
subaccounts in which you are invested or from your Fixed Interest
Allocations. You may elect payments to start as early as 28 days
after the contract date. You select the date on which the
withdrawals will be made but this date cannot be later than the 28th
day of the month. If you do not choose a date, we will make the
withdrawals on the same calendar day of each month as the contract
date. Each withdrawal payment must be at least $100.
The amount of your withdrawal can either be a (i) fixed dollar
amount, or (ii) an amount based on a percentage of the contract value
from the subaccounts in which you are invested. Both options are
subject to the following maximums:
FREQUENCY MAXIMUM PERCENTAGE
Monthly 1.25%
Quarterly 3.75%
Annually 15.00%
If you select a fixed dollar amount and the amount to be
systematically withdrawn would exceed the applicable maximum
percentage of your contract value on the withdrawal date, we will
reduce the amount withdrawn so that it equals such percentage. If
you select a percentage and the amount to be systematically withdrawn
based on that percentage would be less than the minimum of $100, we
will increase the amount to $100 provided it does not exceed the
maximum percentage. If it is below the maximum percentage we will
send the $100. If it is above the maximum percentage we will send
the amount and then cancel the option.
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Systematic withdrawals from Fixed Interest Allocations are limited to
interest earnings during the prior month, quarter, or year, depending
on the frequency you choose. Systematic withdrawals are not subject
to a Market Value Adjustment, unless you choose the fixed payment
option discussed below and the payments exceed your interest
earnings. A Fixed Interest Allocation may not participate in both
the systematic withdrawal option and the dollar cost averaging
program at the same time.
You may choose an option available under our systematic withdrawal
program that will allow you to receive systematic payments in fixed
amounts. Under this option, you choose the amount of the fixed
systematic withdrawal which may total up to 15% of your cumulative
premium payments, or in amounts calculated to satisfy Section 72(q)
or 72(t) of the Tax Code. Since the amount of the systematic fixed
payment under this option may exceed the Free Withdrawal Amount, (i)
a surrender charge would apply to the extent the systematic payment
exceeds the Free Withdrawal Amount, and (ii) a Market Value
Adjustment would apply to the extent the systematic payment exceeds
interest earnings on your Fixed Interest Allocations. Under this
option, we apply the surrender charge and any Market Value Adjustment
directly to your contract value (rather than the systematic payment)
so that the amount of your systematic withdrawals remain the amount
you requested.
Subject to the above, you may change the amount or percentage of your
systematic withdrawal once each contract year or cancel this option
at any time by sending satisfactory notice to our Customer Service
Center at least 7 days before the next scheduled withdrawal date.
You may elect to have this option commence in a contract year where a
regular withdrawal has been taken but you may not change the amount
or percentage of your withdrawals in any contract year during which
you have previously taken a regular withdrawal. You may not elect
this if you are taking IRA withdrawals.
IRA WITHDRAWALS
If you have a non-Roth IRA Contract and will be at least age 70 1/2
during the current calendar year, you may elect to have distributions
made to you to satisfy requirements imposed by Federal tax law. IRA
withdrawals provide payout of amounts required to be distributed by
the Internal Revenue Service rules governing mandatory distributions
under qualified plans. We will send you a notice before your
distributions commence. You may elect to take IRA withdrawals at
that time, or at a later date. You may not elect IRA withdrawals and
participate in systematic withdrawals at the same time. If you do
not elect to take IRA withdrawals, and distributions are required by
Federal tax law, distributions adequate to satisfy the requirements
imposed by Federal tax law may be made. Thus, if you are
participating in systematic withdrawals, distributions under that
option must be adequate to satisfy the mandatory distribution rules
imposed by federal tax law.
You may choose to receive IRA withdrawals on a monthly, quarterly or
annual basis. Under this option, you may elect payments to start as
early as 28 days after the contract date. 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, we will make the
withdrawals on the same calendar day of the month as the contract
date.
You may request that we calculate for you 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. When we determine the required IRA 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 IRA
withdrawal amount is greater than the contract value, we will cancel
the Contract and send you the amount of the cash surrender value.
You may change the payment frequency of your IRA withdrawals once
each contract year or cancel this option at any time by sending us
satisfactory notice to our Customer Service Center at least 7 days
before the next scheduled withdrawal date.
An IRA withdrawal in excess of the amount allowed under systematic
withdrawals will be subject to a Market Value Adjustment.
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CONSULT YOUR TAX ADVISOR REGARDING THE TAX CONSEQUENCES ASSOCIATED
WITH TAKING WITHDRAWALS. You are responsible for determining that
withdrawals comply with applicable law. A withdrawal made before the
taxpayer reaches age 59 1/2 may result in a 10% penalty tax. See
"Federal Tax Considerations" for more details.
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TRANSFERS AMONG YOUR INVESTMENTS
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You may transfer your contract value among the subaccounts in which
you are invested and your Fixed Interest Allocations at the end of
the free look period until the annuity start date. We currently do
not charge you for transfers made during a contract year, but reserve
the right to charge $25 for each transfer after the twelfth transfer
in a contract year. We also reserve the right to limit the number of
transfers you may make and may otherwise modify or terminate transfer
privileges if required by our business judgement or in accordance
with applicable law. We will apply a Market Value Adjustment to
transfers from a Fixed Interest Allocation taken more than 30 days
before its maturity date, unless the transfer is made under the
dollar cost averaging program.
Transfers will be based on values at the end of the business day in
which the transfer request is received at our Customer Service
Center.
The minimum amount that you may transfer is $100 or, if less, your
entire contract value held in a subaccount or a Fixed Interest
Allocation.
To make a transfer, you must notify our Customer Service Center and
all other administrative requirements must be met. Any transfer
request received after 4:00 p.m. eastern time or the close of the New
York Stock Exchange will be effected on the next business day.
Account NY-B and the Company will not be liable for following
instructions communicated by telephone that we reasonably believe to
be genuine. We require personal identifying information to process a
request for transfer made over the telephone.
DOLLAR COST AVERAGING
You may elect to participate in our dollar cost averaging program if
you have at least $1,200 of contract value in the Smith Barney Money
Market subaccount, or in a Fixed Interest Allocation with a 1-year
guaranteed interest period. These subaccounts or Fixed Interest
Allocations serve as the source accounts from which we will, on a
monthly basis, automatically transfer a set dollar amount of money to
other subaccounts selected by you.
The dollar cost averaging program is designed to lessen the impact of
market fluctuation on your investment. Since we transfer the same
dollar amount to other subaccounts each month, more units of a
subaccount are purchased if the value of its unit is low and less
units are purchased if the value of its unit is high. Therefore, a
lower than average value per unit may be achieved over the long term.
However, we cannot guarantee this. When you elect the dollar cost
averaging program, you are continuously investing in securities
regardless of fluctuating price levels. You should consider your
tolerance for investing through periods of fluctuating price levels.
You elect the dollar amount you want transferred under this program.
Each monthly transfer must be at least $100. The maximum amount that
can be transferred each month is your contract value in the Smith
Barney Money Market subaccount or a Fixed Interest Allocation with a
one-year guaranteed interest period, divided by 12. You may change
the transfer amount once each contract year.
Transfers from a Fixed Interest Allocation under the dollar cost
averaging program are not subject to a Market Value Adjustment.
If you do not specify the subaccounts to which the dollar amount of
the source account is to be transferred, we will transfer the money
to the subaccounts in which you are invested on a proportional basis.
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The transfer date is the same day each month as your contract date.
If, on any transfer date, your contract value in a source account is
equal or less than the amount you have elected to have transferred,
the entire amount will be transferred and the program will end. You
may terminate the dollar cost averaging program at any time by
sending satisfactory notice to our Customer Service Center at least 7
days before the next transfer date. A Fixed Interest Allocation may
not participate in the dollar cost averaging program and in
systematic withdrawals at the same time.
We may in the future offer additional subaccounts or withdraw any
subaccount or Fixed Interest Allocation to or from the dollar cost
averaging program, or otherwise modify, suspend or terminate this
program. Of course, such change will not affect any dollar cost
averaging programs in operation at the time.
AUTOMATIC REBALANCING
If you have at least $10,000 of contract value invested in the
subaccounts of Account NY-B, you may elect to have your investments
in the subaccounts automatically rebalanced. We will transfer funds
under your Contract on a quarterly, semi-annual, or annual calendar
basis among the subaccounts to maintain the investment blend of your
selected subaccounts. The minimum size of any allocation 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 withdrawal option only if 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, send satisfactory notice to
our Customer Service Center. We will begin the program on the last
business day of the 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 contract value among the
subaccounts 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.
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DEATH BENEFIT CHOICES
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DEATH BENEFIT DURING THE ACCUMULATION PHASE
During the accumulation phase, a death benefit is payable when either
the annuitant (when contract owner is not an individual), the
contract owner or the first of joint owners dies. Assuming you are
the contract owner, your beneficiary will receive a death benefit
unless the beneficiary is your surviving spouse and elects to
continue the Contract. The death benefit value is calculated at the
close of the business day on which we receive proof of death at our
Customer Service Center. If your beneficiary elects to delay receipt
of the death benefit until a date after the time of death, the amount
of the benefit payable in the future may be affected. The proceeds
may be received in a single sum or applied to any of the annuity
options. If we do not receive a request to apply the death benefit
proceeds to an annuity option, we will make a single sum
distribution. We will generally pay death benefit proceeds within 7
days after our Customer Service Center has received sufficient
information to make the payment.
You may choose from the following 2 death benefit choices: (1) the
Standard Death Benefit Option; and (2) the Annual Ratchet Enhanced
Death Benefit Option. Once you choose a death benefit, it cannot be
changed. We may in the future stop or suspend offering any of the
enhanced death benefit options to new Contracts. A change in
ownership of the Contract may affect the amount of the death benefit
and the guaranteed death benefit.
STANDARD DEATH BENEFIT. You will automatically receive the
Standard Death Benefit unless you elect the Annual Ratchet Enhanced
Death Benefit. The Standard Death Benefit under the Contract is the
greatest of (i) your contract value; (ii) total premium payments less
any withdrawals; and (iii) the cash surrender value.
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ANNUAL RATCHET ENHANCED DEATH BENEFIT. The Annual Ratchet
Enhanced Death Benefit under the Contract is the greatest of (i) the
contract value; (ii) total premium payments less any withdrawals;
(iii) the cash surrender value; and (iv) the enhanced death benefit
as calculated below.
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HOW THE ENHANCED DEATH BENEFIT IS CALCULATED
FOR THE ANNUAL RATCHET ENHANCED DEATH BENEFIT
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On each contract anniversary that occurs on or before the
contract owner turns age 80, we compare the prior enhanced
death benefit to the contract value and select the larger
amount as the new enhanced death benefit.
On all other days, the enhanced death benefit is the amount
determined below. We first take the enhanced death benefit
from the preceding day (which would be the initial premium if
the valuation date is the contract date) and then we add
additional premiums paid since the preceding day, then we
subtract any withdrawals (including any Market Value Adjustment
applied to such withdrawals) since the preceding day, and then
we subtract any associated surrender charges. That amount
becomes the new enhanced death benefit.
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The Annual Ratchet Enhanced Death Benefit is available only at the
time you purchase your Contract and only if the contract owner or
annuitant (when the contract owner is other than an individual) is
not more than 79 years old at the time of purchase. The Annual
Ratchet Enhanced Death Benefit may not be available where a Contract
is held by joint owners.
DEATH BENEFIT DURING THE INCOME PHASE
If any contract owner or the annuitant dies after the annuity start
date, the Company will pay the beneficiary any certain benefit
remaining under the annuity in effect at the time.
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CHARGES AND FEES
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We deduct the charges described below to cover our cost and expenses,
services provided and risks assumed under the Contracts. We incur
certain costs and expenses for distributing and administrating the
Contracts, for paying the benefits payable under the Contracts and
for bearing various risks associated with the Contracts. The amount
of a charge will not always correspond to the actual costs
associated. For example, the surrender charge collected may not
fully cover all of the distribution expenses incurred by us with the
service or benefits provided. In the event there are any profits
from fees and charges deducted under the Contract, we may use such
profits to finance the distribution of contracts.
CHARGE DEDUCTION SUBACCOUNT
You may elect to have all charges against your contract value
deducted directly from a single subaccount designated by the Company.
Currently we use the Smith Barney Money Market subaccount for this
purpose. If you do not elect this option, or if the amount of the
charges is greater than the amount in the designated subaccount, the
charges will be deducted as discussed below. You may cancel this
option at any time by sending satisfactory notice to our Customer
Service Center.
CHARGES DEDUCTED FROM THE CONTRACT VALUE
We deduct the following charges from your contract value:
SURRENDER CHARGE. We will deduct a contingent deferred sales
charge (a "surrender charge") if you surrender your Contract or if
you take a withdrawal in excess of the Free Withdrawal Amount during
the 7-year period from the date we receive and accept a premium
payment. The surrender charge is based on a percentage of each
premium payment. This charge is intended to cover sales expenses
that we have incurred. We may in the future reduce or waive the
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surrender charge in certain situations and will never charge more
than the maximum surrender charges. The percentage of premium
payments deducted at the time of surrender or excess withdrawal
depends on 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 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7+|
SINCE PREMIUM PAYMENT | | | | | | | |
| | | | | | | |
SURRENDER CHARGE 7%| 6%| 5%| 4%| 3%| 2%| 1%| 0%|
We will waive the surrender charge in most states in the following
events: (i) you begin receiving qualified extended medical care on or
after the first contract anniversary for at least 45 days during a 60
day period and your request for the surrender or withdrawal, together
with all required documentation is received at our Customer Service
Center during the term of your care or within 90 days after the last
day of your care; or (ii) you are first diagnosed by a qualifying
medical professional, on or after the first contract anniversary, as
having a qualifying terminal illness. We have the right to require
an examination by a physician of our choice. If we require such an
examination, we will pay for it. You are required to send us
satisfactory written proof of illness. The waiver of surrender charge
may not be available in all states.
FREE WITHDRAWAL AMOUNT. The Free Withdrawal Amount in any
contract year is 15% of your contract value on the date of withdrawal
less any withdrawals during that contract year.
SURRENDER CHARGE FOR EXCESS WITHDRAWALS. We will deduct a
surrender charge for excess withdrawals. We consider a withdrawal to
be an "excess withdrawal" when the amount you withdraw in any
contract year exceeds the Free Withdrawal Amount. Where you are
receiving systematic withdrawals, any combination of regular
withdrawals taken and any systematic withdrawals expected to be
received in a contract year will be included in determining the
amount of the excess 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. We will deduct such
charges from the contract value in proportion to the contract value
in each subaccount or Fixed Interest Allocation from which the excess
withdrawal was taken. In instances where the excess withdrawal
equals the entire contract value in such subaccounts or Fixed
Interest Allocations, we will deduct charges proportionately from all
other subaccounts and Fixed Interest Allocations in which you are
invested. ANY WITHDRAWAL FROM A FIXED INTEREST ALLOCATION MORE THAN
30 DAYS BEFORE ITS MATURITY DATE WILL TRIGGER A MARKET VALUE
ADJUSTMENT.
For the purpose of calculating the surrender charge for an excess
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 withdrawal are not considered a withdrawal of any premium
payments. We have included an example of how this works in Appendix
C. Although we treat premium payments as being withdrawn before
earnings for purpose of calculating the surrender charge for excess
withdrawals, the federal tax law treats earnings as withdrawn first.
PREMIUM TAXES. We may make a charge for state and local premium
taxes depending on the contract owner's state of residence. The tax
can range from 0% to 3.5% of the premium. We have the right to change
this amount to conform with changes in the law or if the contract
owner changes state of residence.
We deduct the premium tax from your contract value on the annuity
start date. However, some jurisdictions impose a premium tax at the
time that initial and additional premiums are paid, regardless of
when the annuity payments begin. In those states we may defer
collection of the premium taxes from your contract value and deduct
it on surrender of the Contract, on excess withdrawals or on the
annuity start date.
ADMINISTRATIVE CHARGE. We deduct an annual administrative charge
on each Contract anniversary, or if you surrender your Contract prior
to a Contract anniversary, at the time we determine the cash
surrender value payable to you. The amount deducted is $30 per
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Contract. This charge is waived if you have a contract value
exceeding $100,000 at the end of a contract year or the sum of the
premiums paid equals or exceeds $100,000. We deduct the annual
administrative charge proportionately from all subaccounts in which
you are invested. If there is no contract value in those subaccounts,
we will deduct the charge from your Fixed Interest Allocations
starting with the guaranteed interest periods nearest their maturity
dates until the charge has been paid.
TRANSFER CHARGE. We currently do not deduct any charges for
transfers made during a contract year. We have the right, however,
to assess up to $25 for each transfer after the twelfth transfer in a
contract year. If such a charge is assessed, we would deduct the
charge from the subaccounts and the Fixed Interest Allocations from
which each such transfer is made in proportion to the amount being
transferred from each such subaccount and Fixed Interest Allocation
unless you have chosen to have all charges deducted from a single
subaccount. The charge will not apply to any transfers due to the
election of dollar cost averaging, automatic rebalancing and
transfers we make to and from any subaccount specially designated by
the Company for such purpose.
CHARGES DEDUCTED FROM THE SUBACCOUNTS
MORTALITY AND EXPENSE RISK CHARGE. The amount of the mortality
and expense risk charge depends on the death benefit you have
elected. If you have elected the Standard Death Benefit, the charge,
on an annual basis, is equal to 1.10% of the assets you have in each
subaccount. The charge is deducted on each business day at the rate
of .003030% for each day since the previous business day. If you
have elected the Annual Ratchet Enhanced Death Benefit, the charge,
on an annual basis, is equal to 1.25% of the assets you have in each
subaccount. The charge is deducted each business day at the rate of
.003446% for each day since the previous business day.
ASSET-BASED ADMINISTRATIVE CHARGE. We will deduct a daily charge
from the assets in each subaccount, to compensate us for a portion of
the administrative expenses under the Contract. The daily charge is
at a rate of .000411% (equivalent to an annual rate of 0.15%) on the
assets in each subaccount.
TRUST EXPENSES
There are fees and charges deducted from each investment portfolio of
the Trusts. Please read the respective Trust prospectus for details.
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THE ANNUITY OPTIONS
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ANNUITIZATION OF YOUR CONTRACT
If the annuitant and contract owner are living on the annuity start
date, we will begin making payments to the contract owner under an
income plan. We will make these payments under the annuity option
chosen. You may change annuity option by making a written request to
us at least 30 days before the annuity start date. The amount of the
payments will be determined by applying your contract value adjusted
for any applicable Market Value Adjustment on the annuity start date
in accordance with the annuity option you chose.
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 start date. If, at the time of the
contract owner's death or the annuitant's death (if the contract
owner is not an individual), no option has been chosen for paying
death benefit proceeds, the beneficiary may choose an annuity 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 contract
value is less than $2,000 or if the calculated monthly annuity income
payment is less than $20.
For each annuity option we will issue a separate written agreement
putting the annuity option into effect. Before we pay any annuity
benefits, we require the return of your Contract. If your Contract
has been lost, we will require that you complete and return the
applicable lost Contract form. Various factors will affect the level
of annuity benefits, such as the annuity option chosen, the
applicable payment rate used and the investment performance of the
portfolios and interest credited to the Fixed Interest Allocations.
Our current annuity options provide only for fixed payments. Fixed
annuity payments are regular payments, the amount of which is fixed
and guaranteed by us. Some fixed annuity options provide fixed
payments either for a specified period of time or for the life of the
annuitant. The amount of life income payments will depend on the
form and duration of payments you chose, the age of the annuitant or
beneficiary (and gender, where appropriate), the total contract value
applied to purchase a Fixed Interest Allocation, and the applicable
payment rate.
Our approval is needed for any option where:
(1)The person named to receive payment is other than the contract
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.
SELECTING THE ANNUITY START DATE
You select the date on which the annuity payments commence. The
annuity start date must be at least 5 years from the contract date
but before the month immediately following the annuitant's 90th
birthday, or 10 years from the contract date, if later. If, on the
annuity start date, a surrender charge remains, the elected annuity
option must include a period certain of at least 5 years.
If you do not select an annuity start date, it will automatically
begin in the month following the annuitant's 90th birthday, or 10
years from the contract date, if later.
If the annuity start 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" and the Statement of Additional Information. For a
Contract purchased in connection with a qualified plan, other than a
Roth IRA, distributions must commence not later than April 1st of the
calendar year following the calendar year in which you attain age 70
1/2 or,in some cases, retire. Distributions may be made through
annuitization or withdrawals. Consult your tax advisor.
FREQUENCY OF ANNUITY PAYMENTS
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, we will make the payments monthly. There
may be certain restrictions on minimum payments that we will allow.
THE ANNUITY OPTIONS
We offer the 4 annuity options shown below. Payments under Options
1, 2 and 3 are fixed. Payments under Option 4 may be fixed or
variable. For a fixed annuity option, the contract value in the
subaccounts is transferred to the Company's general account.
OPTION 1. INCOME FOR A FIXED PERIOD. Under this option, we make
monthly payments in equal installments for a fixed number of years
based on the contract value on the annuity start date. We guarantee
that each monthly payment will be at least the amount stated in your
Contract. If you prefer, you may request that payments be made in
annual, semi-annual or quarterly installments. We will provide you
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with illustrations if you ask for them. If the cash surrender value
or contract value is applied under this option, a 10% penalty tax may
apply to the taxable portion of each income payment until the
contract owner reaches age 591/2.
OPTION 2. INCOME FOR LIFE WITH A PERIOD CERTAIN. Payment is made
for the life of the annuitant in equal monthly installments and
guaranteed for at least a period certain such as 10 or 20 years.
Other periods certain may be available to you on request. You may
choose a refund period 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 specified in the Contract corresponding to the person's age on
his or her last birthday before the annuity start date. Amounts for
ages not shown in the Contract are available if you ask for them.
OPTION 3. JOINT LIFE INCOME. This option is available when there
are 2 persons named to determine annuity payments. At least one of
the persons named must be either the contract owner or beneficiary of
the Contract. We guarantee monthly payments will be 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 if you ask
for them.
OPTION 4. ANNUITY PLAN. The contract value can be applied to any
other annuitization plan that we choose to offer on the annuity start
date.
PAYMENT WHEN NAMED PERSON DIES
When the person named to receive payment dies, we will pay any
amounts still due as provided in the annuity agreement between you
and First Golden American. The amounts we will pay are determined as
follows:
(1)For Option 1, or any remaining guaranteed payments under
Option 2, we will continue payments. 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 option agreement will state the
amount we will pay, if any.
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OTHER CONTRACT PROVISIONS
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REPORTS TO CONTRACT OWNERS
We will send you a quarterly report within 31 days after the end of
each calendar quarter. The report will show the contract value, cash
surrender value, and the death benefit as of the end of the calendar
quarter. The report will also show the allocation of your contract
value and reflects the amounts deducted from or added to the contract
value since the last report. We will also send you copies of any
shareholder reports of the investment portfolios in which Account NY-
B invests, as well as any other reports, notices or documents we are
required by law to furnish to you.
SUSPENSION OF PAYMENTS
The Company reserves the right to suspend or postpone the date of any
payment or determination of values on any business day (1) when the
New York Stock Exchange is closed; (2) when trading on the New York
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Stock Exchange is restricted; (3) when an emergency exists as
determined by the Securities and Exchange Commission so that the sale
of securities held in Account NY-B may not reasonably occur or so
that the Company may not reasonably determine the value of Account
B's net assets; or (4) during any other period when the Securities
and Exchange Commission so permits for the protection of security
holders. We have the right to delay payment of amounts from a Fixed
Interest Allocation for up to 6 months.
IN CASE OF ERRORS IN YOUR APPLICATION
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.
ASSIGNING THE CONTRACT AS COLLATERAL
You may assign a non-qualified Contract as collateral security for a
loan but understand that your rights and any beneficiary's rights may
be subject to the terms of the assignment. An assignment may have
federal tax consequences. 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.
CONTRACT CHANGES APPLICABLE TAX LAW
We have the right to make changes in the Contract to continue to
qualify the Contract as an annuity. You will be given advance notice
of such changes.
FREE LOOK
You may cancel your Contract within your 10-day free look period. We
deem the free look period to expire 15 days after we mail the
Contract to you. Some states may require a longer free look period.
To cancel, you need to send your Contract to our Customer Service
Center or to the agent from whom you purchased it. We will refund
the contract value. For purposes of the refund during the free look
period, your contract value includes a refund of any charges deducted
from your contract value. Because of the market risks associated
with investing in the portfolios, the contract value returned may be
greater or less than the premium payment you paid. Some states
require us to return to you the amount of the paid premium (rather
than the contract value) in which case you will not be subject to
investment risk during the free look period. In these states, your
premiums designated for investment in the subaccounts will be
allocated during the free look period to a subaccount specially
designated by the Company for this purpose (currently, the Smith
Barney Money Market subaccount). We may, in our discretion, require
that premiums designated for investment in the subaccounts from all
other states as well as premiums designated for a Fixed Interest
Allocation be allocated to the specially designated subaccount during
the free look period. Your Contract is void as of the day we receive
your Contract and cancellation request. We determine your contract
value at the close of business on the day we receive your written
request. If you keep your Contract after the free look period, we
will put your money in the subaccount(s) chosen by you, based on the
accumulation unit value next computed for each subaccount, and/or in
the Fixed Interest Allocation chosen by you.
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 an alternative or reduced death benefit.
SELLING THE CONTRACT
Directed Services, Inc. is principal underwriter and distributor of
the Contract as well as for other contracts issued through Account NY-
B and other separate accounts of First Golden American and Golden
American Life Insurance Company. We pay Directed Services Inc. for
acting as principal underwriter under a distribution agreement which
in turn pays the writing agent. The principal address of Directed
Services is 1475 Dunwoody Drive, West Chester, Pennsylvania 19380.
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Directed Services enters into sales agreements with broker-dealers to
sell the Contracts through registered representatives who are
licensed to sell securities and variable insurance products. These
broker-dealers are registered with the SEC and are members of the
National Association of Securities Dealers, Inc. DSI receives a
maximum of 6.5% commission, and passes through 100% of the commission
to the broker-dealer whose registered representative sold the
contract.
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Underwriter Compensation
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| NAME OF PRINCIPAL | AMOUNT OF | OTHER |
| UNDERWRITER | COMMISSION TO BE PAID | COMPENSATION |
| | | |
| Directed Services, Inc. | Maximum of 6.5% | Reimbursement of any |
| | of any initial | covered expenses incurred|
| | or additional | by registered |
| | premium payments | representatives in |
| | except when combined | connection with |
| | with some annual | the distribution |
| | trail commissions. | of the Contracts. |
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Certain sales agreements may provide for a combination of a certain
percentage of commission at the time of sale and an annual trail
commission (which when combined could exceed 6.5% of total premium
payments).
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OTHER INFORMATION
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VOTING RIGHTS
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 subaccount by
dividing the Contract's contract value in that subaccount by the net
asset value of one share of the portfolio in which a subaccount
invests. We count fractional votes. 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 receive your instructions in
time, we will vote the shares in the same proportion as the
instructions received from all Contracts in that subaccount. We will
also vote shares we hold in Account B which are not attributable to
contract owners in the same proportion.
YEAR 2000 PROBLEM
Like other business organizations and individuals around the world,
First Golden American and Account NY-B could be adversely affected if
the computer systems doing the accounts processing or on which First
Golden American and/or Account NY-B relies do not properly process
and calculate date-related information related to the end of the year
1999. This is commonly known as the Year 2000 (or Y2K) Problem.
First Golden American is taking steps that it believes are reasonably
designed to address the Year 2000 Problem with respect to the
computer systems that it uses and to obtain satisfactory assurances
that comparable steps are being taken by its and Account NY-B's major
service providers. At this time, however, we cannot guarantee that
these steps will be sufficient to avoid any adverse impact on First
Golden American and Account NY-B.
STATE REGULATION
We are regulated by the Insurance Department of the State of New
York. 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
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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
The Company and its parent, like other insurance companies, may be
involved in lawsuits, including class action lawsuits. In some class
action and other lawsuits involving insurers, substantial damages
have been sought and/or material settlement payments have been made.
We believe that currently there are no pending or threatened lawsuits
that are reasonably likely to have a material adverse impact on the
Company or Account B.
LEGAL MATTERS
The legal validity of the Contracts was passed on by Myles R.
Tashman, Esquire, Executive Vice President, General Counsel and
Secretary of First Golden American. Sutherland Asbill & Brennan LLP
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 and Account NY-B appearing or
incorporated by reference in the Statement of Additional Information
and Registration Statement have been audited by Ernst & Young LLP,
independent auditors, as set forth in their reports thereon appearing
or incorporated by reference in the Statement of Additional
Information and in the Registration Statement and are included or
incorporated by reference in reliance upon such reports given upon
the authority of such firm as experts in accounting and auditing.
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FEDERAL TAX CONSIDERATIONS
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The following summary provides a general description of the federal
income tax considerations associated with this Contract and does not
purport to be complete or to cover all tax situations. This
discussion is not intended as tax advice. You should consult your
counsel or other competent tax advisers for more complete
information. This discussion is based upon our understanding of the
present federal income tax laws. We do not make any representations
as to the likelihood of continuation of the present federal income
tax laws or as to how they may be interpreted by the IRS.
TYPES OF CONTRACTS: NON-QUALIFIED OR QUALIFIED
The Contract may be purchased on a non-tax-qualified basis or
purchased on a tax-qualified basis. Qualified Contracts are designed
for use by individuals whom premium payments are comprised solely of
proceeds from and/or contributions under retirement plans that are
intended to qualify as plans entitled to special income tax treatment
under Sections 401(a), 403(b), 408, or 408A of the Code. The
ultimate effect of federal income taxes on the amounts held under a
Contract, or annuity payments, depends on the type of retirement
plan, on the tax and employment status of the individual concerned,
and on our tax status. In addition, certain requirements must be
satisfied in purchasing a qualified Contract with proceeds from a tax-
qualified plan and receiving distributions from a qualified Contract
in order to continue receiving favorable tax treatment. Some
retirement plans are subject to distribution and other requirements
that are not incorporated into our Contract administration
procedures. Contract owners, participants and beneficiaries are
responsible for determining that contributions, distributions and
other transactions with respect to the Contract comply with
applicable law. Therefore, you should seek competent legal and tax
advice regarding the suitability of a Contract for your particular
situation. The following discussion assumes that qualified Contracts
are purchased with proceeds from and/or contributions under
retirement plans that qualify for the intended special federal income
tax treatment.
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TAX STATUS OF THE CONTRACTS
DIVERSIFICATION REQUIREMENTS. The Code requires that the
investments of a variable account be "adequately diversified" in
order for the Contracts to be treated as annuity contracts for
federal income tax purposes. It is intended that Account B, through
the subaccounts, will satisfy these diversification requirements.
In certain circumstances, owners of variable annuity contracts have
been considered for federal income tax purposes to be the owners of
the assets of the separate account supporting their contracts due to
their ability to exercise investment control over those assets. When
this is the case, the contract owners have been currently taxed on
income and gains attributable to the separate account assets. There
is little guidance in this area, and some features of the Contracts,
such as the flexibility of a contract owner to allocate premium
payments and transfer contract values, have not been explicitly
addressed in published rulings. While we believe that the Contracts
do not give contract owners investment control over Account B assets,
we reserve the right to modify the Contracts as necessary to prevent
a contract owner from being treated as the owner of the Account B
assets supporting the Contract.
REQUIRED DISTRIBUTIONS. In order to be treated as an annuity
contract for federal income tax purposes, the Code requires any non-
qualified Contract to contain certain provisions specifying how your
interest in the Contract will be distributed in the event of your
death. The non-qualified Contracts contain provisions that are
intended to comply with these Code requirements, although no
regulations interpreting these requirements have yet been issued. We
intend to review such provisions and modify them if necessary to
assure that they comply with the applicable requirements when such
requirements are clarified by regulation or otherwise.
Other rules may apply to Qualified Contracts.
The following discussion assumes that the Contracts will qualify as
annuity contracts for federal income tax purposes.
TAX TREATMENT OF ANNUITIES
IN GENERAL. We believe that if you are a natural person you will
generally not be taxed on increases in the value of a Contract until
a distribution occurs or until annuity payments begin. (For these
purposes, the agreement to assign or pledge any portion of the
contract value, and, in the case of a qualified Contract, any portion
of an interest in the qualified plan, generally will be treated as a
distribution.)
TAXATION OF NON-QUALIFIED CONTRACTS
NON-NATURAL PERSON. The owner of any annuity contract who is not
a natural person generally must include in income any increase in the
excess of the contract value over the "investment in the contract"
(generally, the premiums or other consideration paid for the
contract) during the taxable year. There are some exceptions to this
rule and a prospective contract owner that is not a natural person
may wish to discuss these with a tax adviser. The following
discussion generally applies to Contracts owned by natural persons.
WITHDRAWALS. When a withdrawal from a non-qualified Contract
occurs, the amount received will be treated as ordinary income
subject to tax up to an amount equal to the excess (if any) of the
contract value (unreduced by the amount of any surrender charge)
immediately before the distribution over the contract owner's
investment in the Contract at that time. The tax treatment of market
value adjustments is uncertain. You should consult a tax adviser if
you are considering taking a withdrawal from your Contract in
circumstances where a market value adjustment would apply.
In the case of a surrender under a non-qualified Contract, the amount
received generally will be taxable only to the extent it exceeds the
contract owner's investment in the Contract.
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PENALTY TAX ON CERTAIN WITHDRAWALS. In the case of a distribution
from a non-qualified Contract, there may be imposed a federal tax
penalty equal to 10% of the amount treated as income. In general,
however, there is no penalty on distributions:
o made on or after the taxpayer reaches age 59 1/2;
o made on or after the death of a contract owner;
o attributable to the taxpayer's becoming disabled; or
o made as part of a series of substantially equal periodic
payments for the life (or life expectancy) of the taxpayer.
Other exceptions may be applicable under certain circumstances and
special rules may be applicable in connection with the exceptions
enumerated above. A tax adviser should be consulted with regard to
exceptions from the penalty tax.
ANNUITY PAYMENTS. Although tax consequences may vary depending on
the payment option elected under an annuity contract, a portion of
each annuity payment is generally not taxed and the remainder is
taxed as ordinary income. The non-taxable portion of an annuity
payment is generally determined in a manner that is designed to allow
you to recover your investment in the Contract ratably on a tax-free
basis over the expected stream of annuity payments, as determined
when annuity payments start. Once your investment in the Contract
has been fully recovered, however, the full amount of each annuity
payment is subject to tax as ordinary income.
TAXATION OF DEATH BENEFIT PROCEEDS. Amounts may be distributed
from a Contract because of your death or the death of the annuitant.
Generally, such amounts are includible in the income of recipient as
follows: (i) if distributed in a lump sum, they are taxed in the
same manner as a surrender of the Contract, or (ii) if distributed
under a payment option, they are taxed in the same way as annuity
payments.
TRANSFERS, ASSIGNMENTS, EXCHANGES AND ANNUITY DATES OF A CONTRACT.
A transfer or assignment of ownership of a Contract, the designation
of an annuitant, the selection of certain dates for commencement of
the annuity phase, or the exchange of a Contract may result in
certain tax consequences to you that are not discussed herein. A
contract owner contemplating any such transfer, assignment or
exchange, should consult a tax advisor as to the tax consequences.
WITHHOLDING. Annuity distributions are generally subject to
withholding for the recipient's federal income tax liability.
Recipients can generally elect, however, not to have tax withheld
from distributions.
MULTIPLE CONTRACTS. All non-qualified deferred annuity contracts
that are issued by us (or our affiliates) to the same contract owner
during any calendar year are treated as one non-qualified deferred
annuity contract for purposes of determining the amount includible in
such contract owner's income when a taxable distribution occurs.
TAXATION OF QUALIFIED CONTRACTS
The Contracts are designed for use with several types of qualified
plans. The tax rules applicable to participants in these qualified
plans vary according to the type of plan and the terms and
contributions of the plan itself. Special favorable tax treatment
may be available for certain types of contributions and
distributions. Adverse tax consequences may result from:
contributions in excess of specified limits; distributions before age
59 1/2(subject to certain exceptions); distributions that do not
conform to specified commencement and minimum distribution rules; and
in other specified circumstances. Therefore, no attempt is made to
provide more than general information about the use of the Contracts
with the various types of qualified retirement plans. Contract
owners, annuitants, and beneficiaries are cautioned that the rights
of any person to any benefits under these qualified retirement plans
may be subject to the terms and conditions of the plans themselves,
regardless of the terms and conditions of the Contract, but we shall
not be bound by the terms and conditions of such plans to the extent
such terms contradict the Contract, unless the Company consents.
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DISTRIBUTIONS. Annuity payments are generally taxed in the same
manner as under a non-qualified Contract. When a withdrawal from a
qualified Contract occurs, a pro rata portion of the amount received
is taxable, generally based on the ratio of the contract owner's
investment in the Contract (generally, the premiums or other
consideration paid for the Contract) to the participant's total
accrued benefit balance under the retirement plan. For Qualified
Contracts, the investment in the Contract can be zero. For Roth
IRAs, distributions are generally not taxed, except as described
below.
For qualified plans under Section 401(a) and 403(b), the Code
requires that distributions generally must commence no later than the
later of April 1 of the calendar year following the calendar year in
which the contract owner(or plan participant)(i)reaches age 70 1/2 or
(ii) retires, and must be made in a specified form or manner. If the
plan participant is a "5 percent owner" (as defined in the Code),
distributions generally must begin no later than April 1 of the
calendar year following the calendar year in which the contract owner
(or plan participant) reaches age 70 1/2. For IRAs described in Section
408, distributions generally must commence no later than the later of
April 1 of the calendar year following the calendar year in which the
contract owner (or plan participant) reaches age 70 1/2. Roth IRAs
under Section 408A do not require distributions at any time before
the contract owner's death.
WITHHOLDING. Distributions from certain qualified plans generally
are subject to withholding for the contract owner's federal income
tax liability. The withholding rates vary according to the type of
distribution and the contract owner's tax status. The contract owner
may be provided the opportunity to elect not to have tax withheld
from distributions. "Eligible rollover distributions" from section
401(a) plans and section 403(b) tax-sheltered annuities are subject
to a mandatory federal income tax withholding of 20%. An eligible
rollover distribution is the taxable portion of any distribution from
such a plan, except certain distributions that are required by the
Code or distributions in a specified annuity form. The 20%
withholding does not apply, however, if the contract owner chooses a
"direct rollover" from the plan to another tax-qualified plan or IRA.
Brief descriptions of the various types of qualified retirement plans
in connection with a Contract follow. We will endorse the Contract
as necessary to conform it to the requirements of such plan.
REQUIRED DISTRIBUTIONS UPON CONTRACT OWNER'S DEATH
We will not allow any payment of benefits provided under the Contract
which do not satisfy the requirements of Section 72(s) of the Code.
If any owner of a non-qualified Contract dies before the annuity
start date, the death benefit payable to the beneficiary will be
distributed as follows: (a) the death benefit must be completely
distributed within 5 years of the contract owner's date of death; or
(b) the beneficiary may elect, within the 1-year period after the
contract owner's date of death, to receive the death benefit in the
form of an annuity from us, provided that (i) such annuity is
distributed in substantially equal installments over the life of such
beneficiary or over a period not extending beyond the life expectancy
of such beneficiary; and (ii) such distributions begin not later than
1 year after the contract owner's date of death.
Notwithstanding (a) and (b) above, if the sole contract owner's
beneficiary is the deceased owner's surviving spouse, then such
spouse may elect to continue the Contract under the same terms as
before the contract owner's death. Upon receipt of such election
from the spouse at our Customer Service Center: (1) all rights of
the spouse as contract owner's beneficiary under the Contract in
effect prior to such election will cease; (2) the spouse will become
the owner of the Contract and will also be treated as the contingent
annuitant, if none has been named and only if the deceased owner was
the annuitant; and (3) all rights and privileges granted by the
Contract or allowed by First Golden American will belong to the
spouse as contract owner of the Contract. This election will be
deemed to have been made by the spouse if such spouse makes a premium
payment to the Contract or fails to make a timely election as
described in this paragraph. If the owner's beneficiary is a
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nonspouse, the distribution provisions described in subparagraphs (a)
and (b) above, will apply even if the annuitant and/or contingent
annuitant are alive at the time of the contract owner's death.
If we do not receive an election from a nonspouse owner's beneficiary
within the 1-year period after the contract owner's date of death,
then we will pay the death benefit to the owner's beneficiary in a
cash payment within five years from date of death. We will determine
the death benefit as of the date we receive proof of death. We will
make payment of the proceeds on or before the end of the 5-year
period starting on the owner's date of death. Such cash payment will
be in full settlement of all our liability under the Contract.
If the contract owner dies after the annuity start date, we will
continue to distribute any benefit payable at least as rapidly as
under the annuity option then in effect. All of the contract owner's
rights granted under the Contract or allowed by us will pass to the
contract owner's beneficiary.
If the Contract has joint owners we will consider the date of death
of the first joint owner as the death of the contract owner and the
surviving joint owner will become the contract owner of the Contract.
CORPORATE AND SELF-EMPLOYED PENSION AND PROFIT SHARING PLANS
Section 401(a) of the Code permits corporate employers to establish
various types of retirement plans for employees, and permits self-
employed individuals to establish these plans for themselves and
their employees. These retirement plans may permit the purchase of
the Contracts to accumulate retirement savings under the plans.
Adverse tax or other legal consequences to the plan, to the
participant, or to both may result if this Contract is assigned or
transferred to any individual as a means to provide benefit payments,
unless the plan complies with all legal requirements applicable to
such benefits before transfer of the Contract. Employers intending
to use the Contract with such plans should seek competent advice.
INDIVIDUAL RETIREMENT ANNUITIES
Section 408 of the Code permits eligible individuals to contribute to
an individual retirement program known as an "Individual Retirement
Annuity" or "IRA." These IRAs are subject to limits on the amount
that can be contributed, the deductible amount of the contribution,
the persons who may be eligible, and the time when distributions
commence. Also, distributions from certain other types of qualified
retirement plans may be "rolled over" or transferred on a tax-
deferred basis into an IRA. There are significant restrictions on
rollover or transfer contributions from Savings Incentive Match Plans
(SIMPLE), under which certain employers may provide contributions to
IRAs on behalf of their employees, subject to special restrictions.
Employers may establish Simplified Employee Pension (SEP) Plans to
provide IRA contributions on behalf of their employees. Sales of the
Contract for use with IRAs may be subject to special requirements of
the IRS.
ROTH IRAS
Section 408A of the Code permits certain eligible individuals to
contribute to a Roth IRA. Contributions to a Roth IRA, which are
subject to certain limitations, are not deductible, and must be made
in cash or as a rollover or transfer from another Roth IRA or other
IRA. A rollover from or conversion of an IRA to a Roth IRA may be
subject to tax, and other special rules may apply. Distributions
from a Roth IRA generally are not taxed, except that, once aggregate
distributions exceed contributions to the Roth IRA, income tax and a
10% penalty tax may apply to distributions made (1) before age 59 1/2
(subject to certain exceptions) or (2) during the five taxable years
starting with the year in which the first contribution is made to the
Roth IRA.
TAX SHELTERED ANNUITIES
Section 403(b) of the Code allows employees of certain Section
501(c)(3) organizations and public schools to exclude from their
gross income the premium payments made, within certain limits, on a
Contract that will provide an annuity for the employee's retirement.
These premium payments may be subject to FICA (social security) tax.
Distributions of (1) salary reduction contributions made in years
beginning after December 31, 1988; (2) earnings on those
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contributions; and (3) earnings on amounts held as of the last year
beginning before January 1,1989, are not allowed prior to age 59 1/2,
separation from service, death or disability. Salary reduction
contributions may also be distributed upon hardship, but would
generally be subject to penalties.
Enhanced Death Benefit
The Contract includes an Enhanced Death Benefit that in some cases
may exceed the greater of the premium payments or the account value.
The Internal Revenue Service has not ruled whether an Enhance Death
Benefit could be characterized as an incidental benefit, the amount
of which is limited in any Code section 401(a) pension or profit-
sharing plan or Code section 403(b) tax-sheltered annuity. Employers
using the Contract may want to consult their tax adviser regarding
such limitation. Further, the Internal Revenue Service has not
addressed in a ruling of general applicability whether a death
benefit provision such as the Enhanced Death Benefit provision in the
Contract comports with IRA qualification requirements.
OTHER TAX CONSEQUENCES
As noted above, the foregoing comments about the federal tax
consequences under the Contracts are not exhaustive, and special
rules are provided with respect to other tax situations not discussed
in this prospectus. Further, the federal income tax consequences
discussed herein reflect our understanding of current law, and the
law may change. Federal estate and state and local estate,
inheritance and other tax consequences of ownership or receipt of
distributions under a Contract depend on the individual circumstances
of each contract owner or recipient of the distribution. A competent
tax adviser should be consulted for further information.
POSSIBLE CHANGES IN TAXATION
Although the likelihood of legislative change is uncertain, there is
always the possibility that the tax treatment of the Contracts could
change by legislation or other means. It is also possible that any
change could be retroactive (that is, effective before the date of
the change). A tax adviser should be consulted with respect to
legislative developments and their effect on the Contract.
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MORE INFORMATION ABOUT FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW
YORK
SELECTED FINANCIAL DATA
The following selected financial data prepared in accordance with generally
accepted accounting principles ("GAAP") for First Golden should be read in
conjunction with the financial statements and notes thereto included in this
Prospectus.
On October 24, 1997, PFHI Holdings, Inc. ("PFHI"), a wholly owned subsidiary
of ING Groep N.V. ("ING") and a Delaware corporation, acquired all of the
outstanding capital stock of First Golden's ultimate parent, Equitable of Iowa
Companies, pursuant to a merger agreement. For financial statement purposes,
the change in control of First Golden was accounted for as a purchase effective
October 25, 1997. This merger resulted in a new basis of accounting reflecting
estimated fair values of assets and liabilities at the merger date. As a result,
the GAAP financial data presented below for the period after October 24, 1997,
is presented on the Post-Merger new basis of accounting, while the financial
statements for October 24, 1997 and prior periods are presented on the
Pre-Merger historical cost basis of accounting.
<TABLE>
<CAPTION>
SELECTED GAAP BASIS
FINANCIAL DATA
(IN THOUSANDS)
--------------------------------------------------
POST-MERGER | PRE-MERGER
-------------------------|------------------------
| FOR THE
FOR THE | PERIOD FOR THE
FOR THE PERIOD |JANUARY 1, PERIOD
YEAR OCTOBER 25, | 1997 DECEMBER 17,
ENDED 1997 THROUGH| THROUGH 1996 THROUGH
DECEMBER 31, DECEMBER 31,|OCTOBER 24, DECEMBER 31,
1998 1997 | 1997 1996
------------ ------------|----------- ------------
<S> <C> <C> |<C> <C>
Annuity Product Charges.................. $ 239 $ 8 | $ 4 --
Net Income before Federal Income Tax..... $ 1,277 $ 97 | $ 953 $ 65
Net Income............................... $ 775 $ 63 | $ 666 $ 42
Total Assets............................. $66,034 $33,927 | N/A $24,967
Total Liabilities........................ $38,924 $ 7,832 | N/A $ 24
Total Stockholder's Equity............... $27,110 $26,095 | N/A $24,943
</TABLE>
The following selected financial data was prepared on the basis of statutory
accounting practices ("SAP"), which have been prescribed by the Department of
Insurance of the State of New York and the National Association of Insurance
Commissioners. These practices differ in certain respects from GAAP. The
selected financial data should be read in conjunction with the financial
statements and notes thereto included in this Prospectus, which describe
the differences between SAP and GAAP. See First Golden's Annual Report for
more detail.
<TABLE>
<CAPTION>
SELECTED STATUTORY
FINANCIAL DATA
(IN THOUSANDS)
---------------------------
FOR THE YEARS ENDED
---------------------------
DECEMBER 31, DECEMBER 31,
1998 1997
------------ ------------
<S> <C> <C>
Premiums and Annuity Considerations.................. $ 9,005 $ 2,514
Net Income (Loss) before Federal Income Tax.......... $ (938) $ 635
Net Income (Loss).................................... $ (966) $ 439
Total Assets......................................... $62,469 $32,965
Total Liabilities.................................... $38,092 $ 7,541
Total Capital and Surplus............................ $24,377 $25,424
</TABLE>
BUSINESS ENVIRONMENT
The current business and regulatory environment remains challenging for
the insurance industry. The variable annuity competitive environment is
intense and is dominated by a number of large variable product companies
with strong distribution, name recognition and wholesaling capabilities.
Increasing competition from traditional insurance carriers as well as banks
and mutual fund companies offer consumers many choices. However, overall
demand for variable products remains strong for several reasons including:
strong stock market performance over the last five years; relatively low
interest rates; an aging U. S. population that is increasingly concerned
about retirement and estate planning, as well as maintaining their standard
of living in retirement; and potential reductions in government and
employer-provided benefits at retirement as well as lower public confidence
in the adequacy of those benefits.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS.
The purpose of this section is to discuss and analyze First Golden American
Life Insurance Company of New York's ("First Golden" or "Company") results
of operations. In addition, some analysis and information regarding financial
condition and liquidity and capital resources has also been provided. This
analysis should be read jointly with the Company's financial statements,
related notes and the Cautionary Statement Regarding Forward-Looking
Statements, which appear elsewhere in this Prospectus.
RESULTS OF OPERATIONS
MERGER. On October 23, 1997, Equitable of Iowa Companies ("Equitable")
shareholders approved an Agreement and Plan of Merger ("Merger Agreement")
dated July 7, 1997 among Equitable, PFHI Holdings, Inc. ("PFHI") and ING
Groep N.V. ("ING"). On October 24, 1997, PFHI, a Delaware corporation,
acquired all of the outstanding capital stock of Equitable according to
the Merger Agreement. PFHI is a wholly owned subsidiary of ING, a global
financial services holding company based in The Netherlands. Equitable,
an Iowa corporation, in turn, owned all the outstanding capital stock of
Equitable Life Insurance Company of Iowa and Golden American Life Insurance
Company ("Golden American" or "Parent") and their wholly owned subsidiaries.
In addition, Equitable owned all the outstanding capital stock of Locust
Street Securities, Inc., Equitable Investment Services, Inc. (subsequently
dissolved), Directed Services, Inc., Equitable of Iowa Companies Capital
Trust, Equitable of Iowa Companies Capital Trust II and Equitable of Iowa
Securities Network, Inc. (subsequently renamed ING Funds Distributor, Inc.).
In exchange for the outstanding capital stock of Equitable, ING paid total
consideration of approximately $2.1 billion in cash and stock and assumed
approximately $400 million in debt. As a result of this transaction,
Equitable was merged into PFHI, which was simultaneously renamed Equitable
of Iowa Companies, Inc. ("EIC"), a Delaware corporation.
For financial statement purposes, the change in control of the Company
through the ING merger was accounted for as a purchase effective October 25,
1997. This merger resulted in a new basis of accounting reflecting estimated
fair values of assets and liabilities at the merger date. As a result, the
Company's financial statements for the periods after October 24, 1997 are
presented on the Post-Merger new basis of accounting. The financial
statements for October 24, 1997 and prior periods are presented on the Pre-
Merger historical cost basis of accounting.
The purchase price was allocated to EIC and its subsidiaries with $25.9
million allocated to the Company. Goodwill of $1.4 billion was established
for the excess of the merger cost over the fair value of the assets and
liabilities of EIC with $96,000 attributed to the Company. Goodwill resulting
from the merger is being amortized over 40 years on a straight-line basis.
The carrying value will be reviewed periodically for any indication of
impairment in value.
The following analysis combines the Post-Merger and Pre-Merger activity for
1997 in order to compare to the results of 1998.
PREMIUMS. First Golden received policy approvals in New York on March 25,
1997 and in Delaware on December 23, 1997. The Company reported variable
annuity premiums of $29.2 million for the year ended December 31, 1998 and
$7.3 million for the year ended December 31, 1997.
For the Company's variable contracts, premiums collected are not reported as
revenues, but are reported as deposits to insurance liabilities. Revenues for
these products are recognized over time in the form of investment income and
product charges.
Premiums, net of reinsurance, for variable products from three significant
broker/dealers for the year ended December 31, 1998 totaled $27.5 million, or
94.4% of premiums ($6.9 million, or 94.5% from two significant broker/dealers
for the year ended December 31, 1997). One of these distributors sold 62.1%
of the Company's products in 1998 and 59.4% in 1997. This distributor has
discontinued the sales relationship by the end of 1998. The sales made by
this distributor are anticipated to be absorbed by other distribution
channels during 1999. Based on this assumption, the discontinuance of this
relationship is not anticipated to significantly impact the Company's sales
in 1999.
REVENUES. Product charges from variable annuities totaled $239,000 in
1998 and $12,000 in 1997 due to a full year's worth of sales in 1998,
compared to a partial year in 1997. Net investment income was $1.8
million for the year ended December 31, 1998. This was an increase of
6.3% compared to net investment income of $1.7 million for the year
ended December 31, 1997. The Company recognized a realized gain of
$24,000 from the sale of investments during the year ended December
31, 1998.
EXPENSES. The Company reported total insurance benefits and expenses
of $830,000 for the year ended December 31, 1998 and $698,000 for the
year ended December 31, 1997. Insurance benefits and expenses consisted
of interest credited to account balances, commissions, general expenses,
insurance taxes, amortization of deferred policy acquisition expenses,
goodwill and value of purchased insurance in force, net of deferred
policy acquisition costs. Interest credited to account balances was
$376,000 and $74,000 for the years ended December 31, 1998 and December
31, 1997, respectively. Commissions, general expenses and insurance
taxes were $1.8 million, $834,000 and $44,000, respectively, for the
year ended December 31, 1998. For the year ended December 31, 1997,
commissions, general expenses and insurance taxes were $408,000,
$585,000 and $109,000, respectively. Expenses have increased in 1998
due to higher sales. Most costs incurred as the result of new sales have
been deferred, thus having very little impact on earnings.
At the merger date, the Company's deferred policy acquisition costs ("DPAC")
was eliminated and an asset of $132,000 representing value of purchased
insurance in force ("VPIF") was established for policies in force at the
merger date. The Company deferred $2.3 million of expenses associated with
the sale of variable annuity contracts for the year ended December 31, 1998.
Expenses of $502,000 were deferred for the year ended December 31, 1997.
These acquisition costs are amortized in proportion to the expected gross
profits. Amortization of DPAC was $76,000 for the year ended December 31,
1998 and $20,000 for the year ended December 31, 1997. The amortization of
VPIF was $8,000 for the year ended December 31, 1998 and $3,000 for the
period October 25, 1997 through December 31, 1997. In 1998, VPIF was adjusted
to reduce amortization by $6,000 during 1998 to reflect changes in the
assumptions related to the timing of future gross profits. Based on current
conditions and assumptions as to the impact of future events on acquired
policies in force, the expected approximate net amortization relating to VPIF
as of December 31, 1998 is $10,000 in 1999, $12,000 in 2000, $13,000 in 2001,
$13,000 in 2002 and $12,000 in 2003. Actual amortization may vary based upon
changes in assumptions and experience.
Amortization of goodwill for the year ended December 31, 1998 was $2,000 and
during the period from the merger date to December 31, 1997 totaled
approximately $1,000. Goodwill is being amortized on a straight-line basis
over 40 years.
INCOME. Net income for the year ended December 31, 1998 was $775,000. This
was an increase of $46,000 from net income for the year ended December 31,
1997.
Comprehensive income for 1998 was $1,015,000, an increase of $320,000 from
$695,000 for 1997.
1997 COMPARED TO 1996
The following analysis combines the Post-Merger and Pre-Merger activity for
1997 in order to compare to the results of 1996. Such a comparison does not
recognize the impact of the purchase accounting and goodwill amortization
except for the period after October 24, 1997.
PREMIUMS. On March 25, 1997 and December 23, 1997, First Golden received
policy approvals in New York and Delaware, respectively. The Company reported
$7.3 million in variable annuity premiums during the year ending December 31,
1997.
Premiums, net of reinsurance, for variable products from two significant
broker/dealers for the year ended December 31, 1997, totaled $6.9 million, or
94.5% of premiums. One of these distributors sold 59.4% of the Company's
products in 1997 but indicated its intention to discontinue the sales
relationship by the end of 1998.
REVENUES. Product charges from variable annuities totaled $12,000 in 1997. Net
investment income was $1,735,000 and $65,000 for the year ending December 31,
1997 and for the period December 17, 1996 through December 31, 1996,
respectively.
EXPENSES. The Company reported total insurance benefits and expenses of
$698,000 for the year ending December 31, 1997. Insurance benefits and
expenses consisted of interest credited to account balances, commissions,
general expenses, insurance taxes, amortization of deferred policy acquisition
expenses, goodwill and present value of in force acquired, net of deferred
policy acquisition costs. Interest credited to account values was $74,000 for
the year ending December 31, 1997. For the year ending December 31, 1997,
commissions, general expenses and insurance taxes were $408,000, $585,000 and
$109,000, respectively.
The Company's deferred policy acquisition costs ("DPAC") was eliminated as of
the merger date and an asset of $132,000 representing present value of in
force acquired ("PVIF") was established for policies in force at the merger
date. First Golden deferred $502,000 of expenses associated with the sale of
variable annuity contracts for the year ending December 31, 1997. These
acquisition costs are amortized in proportion to the expected gross profits.
Amortization of deferred policy acquisition costs was $20,000 for the year
ending December 31, 1997. The amortization of PVIF for the period October 25,
1997 through December 31, 1997 was $3,000. Based on current conditions and
assumptions as to the impact of future events on acquired policies in force,
the expected approximate net amortization for the next five years, relating
to the PVIF as of December 31, 1997 is $19,000 in 1998, $18,000 in 1999,
$17,000 in 2000, $15,000 in 2001 and $13,000 in 2002.
Amortization of goodwill during the period from the merger date to December
31, 1997 totaled approximately $1,000.
NET INCOME. Net income was $729,000 and $42,000 for the year ending December
31, 1997 and the period December 17, 1996 through December 31, 1997,
respectively.
FINANCIAL CONDITION
RATINGS. Currently, the Company's ratings are at A+ by A.M. Best Company,
AAA by Duff & Phelps Credit Rating Company, AA+ by Standard & Poor's Rating
Services and Aa2 by Moody's Investors Service.
INVESTMENTS. First Golden's assets are invested in accordance with
applicable 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 purchases 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.
All of the Company's investments are carried at fair value in the Company's
financial statements. The increase in the carrying value of the Company's
investment portfolio included changes in unrealized appreciation and
depreciation of fixed maturities as well as a growth in the cost basis of
these securities. Growth in the cost basis of the Company's investment
portfolio resulted from the investment of premiums from the sale of the fixed
account option of the Company's variable insurance products. The Company
manages the growth of its insurance operations in order to maintain adequate
capital ratios.
FIXED MATURITIES: At December 31, 1998, the Company had fixed maturities with
an amortized cost of $30.4 million and an estimated fair value of $31.0
million. The individual securities in the Company's fixed maturities
portfolio (at amortized cost) include investment grade securities which
include securities issued by the U. S. government, agencies and corporations
that are rated at least A- by Standard & Poor's Rating Services ("Standard &
Poor's") ($18.1 million or 59.6%), that are rated BBB+ to BBB- by Standard &
Poor's ($9.2 million or 30.1%) and below investment grade securities which
are securities issued by corporations that are rated BB+ to BB- by Standard &
Poor's ($1.0 million or 3.4%). Securities not rated by Standard & Poor's had
a National Association of Insurance Commissioners ("NAIC") rating of 1 ($2.1
million or 6.9%).
The Company classifies 100% of its securities as available for sale. Net
unrealized appreciation on fixed maturities of $563,000 was comprised of
gross appreciation of $624,000 and gross depreciation of $61,000. Net
unrealized holding gains on these securities, net of adjustments to VPIF,
DPAC, and deferred income taxes of $336,000 was included in stockholder's
equity at December 31, 1998.
At December 31, 1998, the amortized cost value of the Company's total
investment in below investment grade securities was $1.0 million, or 3.4%, of
the Company's investment portfolio. The Company intends to purchase
additional below investment grade securities, but does not expect the
percentage of its portfolio invested in such securities to exceed 10% of its
investment portfolio. At December 31, 1998, the yield at amortized cost on
the Company's below investment grade portfolio was 8.11% compared to 6.28%
for the Company's investment grade corporate bond portfolio. The Company
estimates the fair value of its below investment grade portfolio was $1.0
million, or 100% of amortized cost value, at December 31, 1998.
Below investment grade securities have different characteristics than
investment grade corporate debt securities. Risk of loss upon default by the
borrower is significantly greater with respect to below investment grade
securities than with other corporate debt securities. Below investment grade
securities are generally unsecured and are often subordinated to other
creditors of the issuer. Also, issuers of below investment grade securities
usually have higher levels of debt and are more sensitive to adverse economic
conditions, such as a recession or increasing interest rates, than are
investment grade issuers. The Company attempts to reduce the overall risk in
its below investment grade portfolio, as in all of its investments, through
careful credit analysis, strict investment policy guidelines and
diversification by company and by industry.
The Company analyzes its investment portfolio, including below investment
grade securities, at least quarterly in order to determine if its ability to
realize its carrying value on any investment has been impaired. For debt
securities, if impairment in value is determined to be other than temporary
(i.e., if it is probable the Company will be unable to collect all amounts
due according to the contractual terms of the security), the cost basis of
the impaired security is written down to fair value, which becomes the new
cost basis. The amount of the write-down is included in earnings as a
realized loss. Future events may occur, or additional or updated information
may be received, which may necessitate future write-downs of securities in
the Company's portfolio. Significant write-downs in the carrying value of
investments could materially adversely affect the Company's net income in
future periods.
During the year ended December 31, 1998, the amortized cost basis of the
Company's fixed maturities portfolio was reduced by $1.1 million as a result
of scheduled principal repayments. In total, net pre-tax gains from sales,
calls and repayments of fixed maturity investments amounted to $24,000 in
1998.
At December 31, 1998, no fixed maturities were deemed to have impairments in
value that are other than temporary. At December 31, 1998, the Company had no
investment in default. The Company's fixed maturities portfolio had a
combined yield at amortized cost of 6.37% at December 31, 1998.
OTHER ASSETS. DPAC represents certain deferred costs of acquiring insurance
business, principally commissions and other expenses related to the
production of new business after the merger. The Company's DPAC was
eliminated as of the merger date and an asset of $132,000 representing
VPIF was established for all policies in force at the merger date. VPIF is
amortized into income in proportion to the expected gross profits of in
force acquired business in a manner similar to DPAC amortization. Any
expenses which vary directly with the sales of the Company's products are
deferred and amortized. At December 31, 1998, the Company had VPIF and DPAC
balances of $117,000 and $2.3 million, respectively.
Goodwill totaling $96,000, representing the excess of the acquisition cost
over the fair value of net assets acquired, was established at the merger
date. Accumulated amortization of goodwill as of December 31, 1998 was
approximately $3,000.
At December 31, 1998, the Company had $26.7 million of separate account
assets compared to $4.9 million at December 31, 1997. The increase in
separate account assets resulted from market appreciation and growth in sales
of the Company's variable products, net of redemptions.
At December 31, 1998, the Company had total assets of $66.0 million, an
increase of 94.6% over total assets at December 31, 1997.
LIABILITIES. Future policy benefits increased $8.3 million during 1998
to $10.8 million due to premium growth in the Company's fixed account
option of its variable products. Policy reserves represent the premiums
received plus accumulated interest less mortality and administration
charges. At December 31, 1998, the Company had $26.7 million of separate
account liabilities. This is an increase of 447.7% over separate account
liabilities as of December 31, 1997, and is primarily related to market
appreciation and increased sales of the Company's variable products, net
of redemptions.
Other liabilities increased $370,000 during 1998. The increase results
primarily due to an increase in outstanding checks and accounts payable.
The Company's total liabilities increased $31.1 million, or 397.0%, during
1998 and totaled $38.9 million at December 31, 1998. The increase is
primarily the result of an increase in future policy benefits and separate
account liabilities.
The effects of inflation and changing prices on the Company's financial
position are not material since insurance assets and liabilities are both
primarily monetary and remain in balance. An effect of inflation, which has
been low in recent years, is a decline in purchasing power when monetary
assets exceed monetary liabilities.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity is the ability of the Company to generate sufficient cash flows to
meet the cash requirements of its operating, investing and financing
activities. The Company's principal sources of cash are variable annuity
premiums and product charges, investment income and maturing investments.
Primary uses of these funds are payments of commissions and operating
expenses, interest, investment purchases, as well as withdrawals and
surrenders.
Net cash used in operating activities was $307,000 in 1998 compared to net
cash provided by operations of $551,000 in 1997. The negative operating cash
flows result primarily from the funding of commissions and other deferrable
expenses related to the growth in the variable annuity products of the
Company.
Net cash used in investing activities was $6.3 million during 1998 as
compared to $2.4 million in 1997. This increase is primarily due to greater
net purchases of fixed maturities resulting from an increase in funds
available from net fixed account deposits. Net purchases of fixed maturities
reached $3.9 million in 1998 versus $1.9 million in 1997.
Net cash provided by financing activities was $8.0 million during 1998 as
compared to $2.4 million during the prior year. In 1998, net cash provided by
financing activities was positively impacted by net fixed account deposits of
$8.8 million compared to $2.5 million in 1997. This increase was partially
offset by net reallocations to the Company's separate account, which
increased to $872,000 from $58,000 during the prior year.
The Company's liquidity position is managed by maintaining adequate levels of
liquid assets, such as cash or cash equivalents and short-term investments.
Additional sources of liquidity include borrowing facilities to meet short-
term cash requirements. The Company has established a $10.0 million revolving
note facility with SunTrust Bank. Management believes that these sources of
liquidity are adequate to meet the Company's short-term cash obligations.
On December 17, 1996, Golden American made capital contributions to First
Golden of $25 million. Of this amount, $2 million represented 200,000 shares
of common stock with a par value of $10.00 per share. The remaining $23
million was contributed as additional paid-in capital. First Golden believes
it will be able to fund the capital required for projected new business
primarily with existing capital and future capital contributions from its
Parent. First Golden expects to continue to receive capital contributions
from Golden American if necessary. It is ING's policy to ensure adequate
capital and surplus is provided for the Company and, if necessary, additional
funds will be contributed.
First Golden's principal office is located in New York, New York, where
certain of the Company's records are maintained. The 2,568 square feet of
office space is leased through 2001.
The Golden American Board of Directors has agreed by resolution to provide
funds as needed for the Company to maintain policyholders' surplus that meets
or exceeds the greater of: (1) the minimum capital adequacy standards to
maintain a level of capitalization necessary to meet A.M. Best Company's
guidelines for a rating one level less than the one originally given to First
Golden or (2) the New York State Insurance Department risk-based capital
minimum requirements as determined in accordance with New York statutory
accounting principles. No funds were transferred from Golden American in 1997
or 1998.
First Golden is required to maintain a minimum capital and surplus of not
less than $4 million 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 stockholder unless a notice of
its intent to declare a dividend and the amount of the dividend has been
filed at least thirty days in advance of the proposed declaration. If the
Superintendent finds the financial condition of First Golden does not warrant
the distribution, the Superintendent may disapprove the distribution by
giving written notice to the Company within thirty days after the filing.
The management of First Golden does not anticipate paying any dividends to
its Parent during 1999.
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 monitor the
capitalization of 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 has complied with the NAIC's risk-based capital reporting
requirements. Amounts reported indicate the Company has total adjusted
capital which is significantly above all required capital levels.
First Golden's operations consist of one business segment, the sale of
insurance products. First Golden is not dependent upon any single customer,
however, three broker/dealers accounted for a significant portion of its
sales volume in 1998. One of these distributors sold 62.1% of the Company's
products in 1998. This distributor has discontinued the sales relationship as
of December 31, 1998. The Company is licensed to sell products in the states
of New York and Delaware.
REINSURANCE: At December 31, 1998, First Golden had a reinsurance treaty with
an unaffiliated reinsurer covering a significant portion of the mortality
risks under its variable contracts. First Golden remains liable to the extent
its reinsurer does not meet its obligation under the reinsurance agreement.
YEAR 2000 READINESS DISCLOSURE: Based on and in conjunction with a 1997 study
and an ongoing analysis of computer software and hardware, Golden American
has assessed the Company's exposure to the Year 2000 change of the century
date issue. Some of the Company's computer programs were originally written
using two digits rather than four to define a particular year. As a result,
these computer programs contain "time sensitive" software that may recognize
"00" as the year 1900 rather than the year 2000, which could cause system
failure or miscalculations resulting in disruptions to operations. These
disruptions could include, but are not limited to, a temporary inability to
process transactions. To a lesser extent, the Company depends on various non-
information technology systems, which could also fail or malfunction as a
result of the Year 2000.
Golden American has developed a plan for the Company to address the Year 2000
issue in a timely manner. The following schedule details the plan's phases,
progress towards completion and estimated completion dates:
% Complete Actual/
as of Estimated
March 15, Completion
PHASES 1999 Dates
- -------------------------------------------------------------------------------
ASSESSMENT AND DEVELOPMENT of the steps to be taken to
address Year 2000 systems issues 100% 12/31/1997
REMEDIATION of business critical systems to address
Year 2000 issues 100% 2/28/1999
REMEDIATION of non-critical systems to address Year
2000 issues 76-99% 6/01/1999
TESTING of business critical systems 100% 3/05/1999
TESTING of non-critical systems and integrated testing
of hardware and infrastructure 25-50% 6/15/1999
POINT-TO-POINT TESTING of external interfaces with third
party computer systems that communicate with Company
systems 50-75% 4/30/1999
IMPLEMENTATION of tested business critical software
addressing Year 2000 systems issues 100% 3/05/1999
IMPLEMENTATION of tested non-critical software
addressing Year 2000 systems issues 25-50% 6/30/1999
CONTINGENCY PLAN 76-99% 6/01/1999
The Company's operations could be adversely affected if significant
customers, suppliers and other third parties, including underlying mutual
funds, would be unable to transact business in the Year 2000 and thereafter
as a result of the Year 2000 issue. To mitigate the effect of outside
influences and other dependencies relative to the Year 2000, Golden American
has identified and contacted these third parties on behalf of the Company to
obtain assurances that necessary steps are being taken to prepare for the
Year 2000. Golden American will continue these communications and establish
compliance checkpoints through the Year 2000 transition.
Management believes the Company's systems are or will be substantially
compliant by Year 2000. Golden American will bear all systems upgrade costs
to make the Company's system Year 2000 compliant. Management expects some of
Golden American's resources to be utilized in early 1999 to complete system
upgrades and finalize the contingency plan.
Despite Golden American's efforts on behalf of the Company to modify or
replace "time sensitive" computer and information systems, the Company could
experience a disruption to its operations as a result of the Year 2000.
Golden American is currently developing a contingency plan for the Company to
address any systems that may malfunction despite the testing being performed.
The contingency plan is anticipated to be completed by June 1, 1999.
The Year 2000 project's progress is based on management's best estimates.
These estimates were derived using numerous assumptions of future events,
including the continued availability of resources, third party Year 2000
compliance and other factors. There is no guarantee these estimates will be
achieved and actual results could materially differ from those anticipated.
Specific factors that might cause such material differences include, but are
not limited to, the availability and cost of trained personnel, the ability
to locate and correct all relevant computer codes and other uncertainties.
It is the Company's intention to make every reasonable effort to achieve
business continuity through appropriate planning, testing and establishing
contingency scenarios; however, the Company does not make any representations
because of many unknown factors beyond the control of the Company.
MARKET RISK AND RISK MANAGEMENT
Asset/liability management is integrated into many aspects of the Company's
operations, including investment decisions, product development and crediting
rates determination. As part of its risk management process, different
economic scenarios are modeled, including cash flow testing required for
insurance regulatory purposes, to determine that existing assets are adequate
to meet projected liability cash flows. Key variables include contractowner
behavior and the variable separate account's performance.
Contractowners bear the majority of the investment risks related to the
variable products. Therefore, the risks associated with the investments
supporting the variable separate account are assumed by contractowners, not
by the Company (subject to, among other things, certain minimum guarantees).
The Company's products also provide certain minimum death benefits that
depend on the performance of the variable separate account. Currently the
majority of death benefit risks are reinsured, which protects the Company
from adverse mortality experience and prolonged capital market decline.
A surrender, partial withdrawal, transfer or annuitization made prior to the
end of a guarantee period from the fixed account may be subject to a market
value adjustment. As the liabilities in the fixed account are subject to
market value adjustment, the Company does not face a material amount of
market risk volatility. The fixed account liabilities are supported by a
portfolio principally composed of fixed rate investments that can generate
predictable, steady rates of return. The portfolio management strategy for
the fixed account considers the assets available for sale. This enables the
Company to respond to changes in market interest rates, changes in prepayment
risk, changes in relative values of asset sectors and individual securities
and loans, changes in credit quality outlook and other relevant factors. The
objective of portfolio management is to maximize returns, taking into account
interest rate and credit risks as well as other risks. The Company's
asset/liability management discipline includes strategies to minimize
exposure to loss as interest rates and economic and market conditions change.
On the basis of these analyses, management believes there is no material
solvency risk to the Company. With respect to a 10% drop in equity values
from year-end 1998 levels, variable separate account funds, which represent
71% of the in force, pass the risk in underlying fund performance to the
contractowner (except for certain minimum guarantees that are mostly
reinsured). With respect to interest rate movements up or down 100 basis
points from year-end 1998 levels, the remaining 29% of the in force are fixed
account funds and almost all of these have market value adjustments which
provide significant protection against changes in interest rates.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Any forward-looking statements contained herein or in any other oral or
written statement by the Company or any of its officers, directors or
employees is qualified by the fact that actual results of the Company may
differ materially from such statement, among other risks and uncertainties
inherent in the Company's business, due to the following important factors:
1. Prevailing interest rate levels and stock market performance, which may
affect the ability of the Company to sell its products, the market value
and liquidity of the Company's investments and the lapse rate of the
Company's policies, notwithstanding product design features intended to
enhance persistency of the Company's products.
2. Changes in the federal income tax laws and regulations which may affect
the relative tax advantages of the Company's products.
3. Changes in the regulation of financial services, including bank sales and
underwriting of insurance products, which may affect the competitive
environment for the Company's products.
4. Increasing competition in the sale of the Company's products.
5. Other factors that could affect the performance of the Company,
including, but not limited to, market conduct claims, litigation,
insurance industry insolvencies, availability of competitive reinsurance
on new business, investment performance of the underlying portfolios of
the variable products, variable product design and sales volume by
significant sellers of the Company's variable products.
6. To the extent third parties are unable to transact business in the Year
2000 and thereafter, the Company's operations could be adversely
affected.
OTHER INFORMATION
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 First Golden. Expenses incurred by
Golden American in relation to this service agreement will be reimbursed by
First Golden on an allocated cost basis. First Golden entered into a similar
agreement with another affiliate, Equitable Life Insurance Company of Iowa
("Equitable Life"), for additional services. For the years ended December 31,
1998 and 1997, First Golden incurred expenses of $248,000 and $24,000,
respectively, under the agreement with Golden American and $165,000 and
$29,000, respectively, under the agreement with Equitable Life.
Effective January 1, 1998, the Company entered into an asset management
agreement with ING Investment Management LLC ("ING IM"), an affiliate,
under which ING IM provides asset management and accounting services.
For the year ended December 31, 1998, the Company incurred expenses of
$56,000.
Priot to 1998, First Golden had an agreement with Equitable Investment
Services Inc., under which Equitable Investment Services, Inc. performed
investment advisory services. For the year ended December 31, 1997, First
Golden incurred expenses of $62,000 under this agreement which was
terminated as of December 31, 1997.
First Golden has an agreement with Golden American and DSI pursuant to which
First Golden has agreed to provide Golden American and DSI certain of its
personnel to perform management, administrative and clerical services and the
use of certain of its facilities. First Golden charges Golden American and 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 Golden
American and DSI. For the year ended December 31, 1998, charges to Golden
American and DSI for these services were $210,000 and $75,000, respectively.
DISTRIBUTION AGREEMENT. First Golden has entered into agreements with 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. For the years ended December 31, 1998 and 1997,
commissions paid by First Golden to DSI were $1,754,000 and $408,000,
respectively.
EMPLOYEES. During 1996, Golden American provided the support necessary for the
incorporation and licensing of First Golden. During 1998 and 1997, First
Golden had 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 EIC, and/or Equitable
Life Insurance Company of Iowa. 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.
DIRECTORS AND EXECUTIVE OFFICERS
NAME (AGE) POSITIONS(S) WITH THE COMPANY
---------- -----------------------------
[S] [C]
Barnett Chernow (49) Director and President
Myles R. Tashman (56) Director, Executive Vice President, General
Counsel and Secretary
James R. McInnis (51) Executive Vice President
R. Brock Armstrong (52) Director and Chairman
Carol V. Coleman (49) Director
Michael W. Cunningham (50) Director
Stephen J. Friedman (61) Director
Bernard Levitt (73) Director
Roger A. Martin (67) Director
Andrew Kalinowski (54) Director
David L. Jacobson (49) Senior Vice President and Assistant Secretary
Stephen J. Preston (41) Senior Vice President and Chief Actuary
Mary B. Wilkinson (42) Senior Vice President and Treasurer (Chief
Financial Officer)
Marilyn Talman (52) 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 and/or officers are directors and/or officers of First Golden's
insurance company affiliates. The principal positions of First Golden's
directors and senior executive officers for the past five years are listed
below:
Mr. Barnett Chernow became President of First Golden and Golden American in
April, 1998. From 1996 to 1998, Mr. Chernow served as Executive Vice President
of First Golden. From 1993 to 1998, Mr. Chernow also served as Executive Vice
President of Golden American. He was elected to serve as a director of First
Golden in June, 1996 and Golden American in April, 1998.
Mr. Myles R. Tashman is Executive Vice President, General Counsel, Secretary
and Director of First Golden. Since December, 1995, Mr. Tashman has also
served as Executive Vice President of Golden American, and since January,
1998, he has served as a director of Golden American. He was elected to
serve as a director of First Golden in June, 1996.
Mr. James R. McInnis became Executive Vice President of First Golden in
December, 1997. From 1982 through November, 1997, he was with the Endeavor
Group and held various offices, including President at the time of his
departure.
Mr. R. Brock Armstrong is a Director and Chairman of the Board of Directors of
First Golden, having been elected a Director in December, 1998 and as Chairman
in April, 1999. Mr. Armstrong was also elected to serve as a Director of Golden
American in April 1999. He was appointed to serve as President and Chairman
of The GCG Trust in February 1999 and President of Equitable Life Insurance
Company of Iowa in April 1999. He has also served as Group Executive of
ING Group since October 1998. Mr. Armstrong was Senior Vice President,
The Prudential Insurance Company of America, April 1997 to October 1998;
Executive Vice President, London Insurance Group, August 1994 to April 1997;
President and Chief Financial Officer of Security First Group, August 1991
to August 1994.
Ms. Carol V. Coleman is a Director of First Golden, having been first
appointed in December, 1997. She has been a financial recruiter with Vantage
Staffing since 1994.
Mr. Michael W. Cunningham became a Director of First Golden and Golden
American in April 1999. Also, he has served as a Director of Life
of Georgia and Security Life of Denver since 1995. Currently, he
serves as Executive Vice President and Chief Financial Officer of ING
North America Insurance Corporation, and has worked for them since
1991.
Mr. Stephen J. Friedman is a Director of First Golden, having been first
elected in June, 1996. Mr. Friedman is a partner of the law firm of
Debevoise & Plimpton in New York, NY since 1993.
Mr. Bernard Levitt is a Director of First Golden, having been first elected
in June, 1996. Until his retirement in 1990, Mr. Levitt was a life insurance
consultant with American Life Insurance Company of New York, since 1989.
Mr. Roger A. Martin is a Director of First Golden, having been first appointed
in June, 1996. From 1984 until his retirement in July, 1995, Mr. Martin was a
Vice President with Bear Sterns.
Mr. Andrew Kalinowski is a Director of First Golden, having been first
elected in June, 1996. Mr. Kalinowski has been a Principal and the President
of Upstate Special Risk Services, Incorporated since 1974. He also has been 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 is a Principal and Director
of LIFE Incorporated.
Mr. David L. Jacobson is Senior Vice President and Assistant Secretary of
First Golden. Since November, 1993, Mr. Jacobson has also served as Senior
Vice President and Assistant Secretary of Golden American. Since September,
1996, Mr. Jacobson has also served as Assistant Secretary of Equitable Life
Insurance Company of Iowa.
Mr. Stephen J. Preston is Senior Vice President and Chief Actuary of First
Golden. He also serves as Executive Vice President and Chief Actuary of
GOlden American, where he has served in several capacitites since 1993.
Ms. Mary Bea Wilkinson is Senior Vice President and Treasurer of First Golden.
From November, 1993 through 1996, Ms. Wilkinson served as Senior Vice
President, Assistant Secretary and Treasurer of Golden American.
Ms. Marilyn Talman is Vice President, Associate General Counsel and Assistant
Secretary of First Golden. Since April, 1996, Ms. Talman has also served as
Vice President, Associate General Counsel and Assistant Secretary for Golden
American. Since September, 1996, Ms. Talman has also served as Assistant
Secretary of Equitable Life Insurance Company of Iowa. From March, 1992
through March, 1994, she held various positions with Rodney Square
Management Corp. and was Vice President and General Counsel upon leaving.
COMPENSATION TABLES AND OTHER INFORMATION
The following sets forth information with respect to the Chief
Executive Officer of First Golden as well as the annual salary and
bonus for the next five highly compensated executive officers for the
fiscal years ended December 31, 1998 and 1997. Certain executive officers
of First Golden are also officers of Golden American and DSI. The salaries
of such individuals are allocated among First Golden, Golden American
and DS pursuant to an arrangement among these companies.
EXECUTIVE COMPENSATION TABLE
The following table sets forth information with respect to the annual
salary and bonus for Golden American's Chief Executive Officers and the
five other most highly compensated executive officers for the fiscal
years ended December 31, 1998 and 1997.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------- ------------------------
RESTRICTED SECURITIES
NAME AND STOCK AWARDS UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS (/1/) /2/) OPTIONS COMPENSATION
- ------------------ ---- -------- ----------- ------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Barnett Chernow,....... 1998 $284,171 $105,375 8,000
President 1997 $234,167 $ 31,859 $ 277,576 4,000
James R. McInnis,...... 1998 $250,004 $626,245 2,000
Executive Vice
President
Keith Glover,.......... 1998 $250,000 $145,120 3,900
Executive Vice
President
Myles R. Tashman,...... 1998 $189,337 $ 54,425 3,500
Executive Vice 1997 $181,417 $ 25,000 $ 165,512 5,000
President, General
Counsel and Secretary
Stephen J. Preston,.... 1998 $173.870 $ 32,152 3,500
Executive Vice 1997 $160,758 $ 16,470
President and Chief
Actuary
Terry L. Kendall,...... 1998 $145,237 $181,417
Former President and 1997 $362,833 $ 80,365 $ 644,844 16,000
CEO
</TABLE>
________________
(1) The amount shown relates to bonuses paid in 1998, 1997 and 1996.
(2) Restricted stock awards granted to executive officers vested on October
24, 1997 with the change in control of Equitable of Iowa. As of
December 31, 1998, no officer held any restricted stock.
Option Grants in Last Fiscal Year (1998)
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL
% OF TOTAL RATES OF STOCK
NUMBER OF OPTIONS PRICE APPRECIATION
SECURITIES GRANTED TO FOR OPTION
UNDERLYING EMPLOYEES EXERCISE TERM (/3/)
OPTIONS IN FISCAL OR BASE EXPIRATION -------------------
NAME GRANTED (/1/) YEAR PRICE (/2/) DATE 5% 10%
- ---- ------------- ---------- ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Barnett Chernow......... 8,000 11.99 $60.518 5/26/2003 $164,016 $ 362,433
James R. McInnis........ 2,000 3.00 $60.518 5/26/2003 $ 41,004 $ 90,608
Keith Glover............ 3,900 5.85 $60.518 5/26/2003 $ 79,958 $ 176,686
Myles Tashman........... 3,500 5.25 $60.518 5/26/2003 $ 71,758 $ 158,564
Stephen J. Preston...... 3,500 5.25 $60.518 5/26/2003 $ 71,758 $ 158,564
</TABLE>
________________
(1) Stock appreciation rights granted on May 26, 1998 to the officers of
First Golden have a three-year vesting period and an expiration
date as shown.
(2) The base price was equal to the fair market value of ING's stock on
on the date of grant.
(3) Total dollar gains based on indicated rates of appreciation of share
price over a the five year term of the rights.
<PAGE>
<PAGE>
FINANCIAL STATEMENTS OF FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY
OF NEW YORK
For the years ended December 31, 1998 and 1997
[FS] 1
<PAGE>
<PAGE>
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 sheets of First Golden American Life
Insurance Company of New York as of December 31, 1998 and 1997, and the
related statements of operations, changes in stockholder's equity, and cash
flows for the year ended December 31, 1998 and for periods from October 25,
1997 through December 31, 1997, January 1, 1997 through October 24, 1997, and
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 audits 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, 1998 and 1997, and the results
of its operations and its cash flows for the year ended December 31, 1998 and
for the periods from October 25, 1997 through December 31, 1997, January 1,
1997 through October 24, 1997, and December 17, 1996 through December 31,
1996, in conformity with generally accepted accounting principles.
s/Ernst & Young LLP
Des Moines, Iowa
February 12, 1999
[FS] 2
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
BALANCE SHEETS
(Dollars in thousands, except per share data)
POST-MERGER
--------------------------------------
December 31, 1998 December 31, 1997
----------------- -----------------
ASSETS
Investments:
Fixed maturities, available for sale,
at fair value (cost: 1998 - $30,431;
1997 - $26,570) $30,994 $26,721
Short-term investments 3,231 799
------- -------
Total investments 34,225 27,520
Cash and cash equivalents 1,932 621
Due from affiliates 37 --
Accrued investment income 414 376
Deferred policy acquisition costs 2,347 189
Value of purchased insurance in force 117 126
Current income taxes recoverable 89 63
Property and equipment, less allowances
for depreciation of $16 in 1998 and
$3 in 1997 48 57
Goodwill, less accumulated amortization
of $3 in 1998 and $1 in 1997 93 95
Other assets 15 2
Separate account assets 26,717 4,878
------- -------
Total assets $66,034 $33,927
======= =======
LIABILITIES AND STOCKHOLDER'S
EQUITY
Policy liabilities and accruals:
Future policy benefits:
Annuity products $10,830 $ 2,506
Deferred income tax liability 850 247
Due to affiliates 17 61
Other liabilities 510 140
Separate account liabilities 26,717 4,878
------- -------
38,924 7,832
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 2,000
Additional paid-in capital 23,936 23,936
Accumulated other comprehensive income 336 96
Retained earnings 838 63
------- -------
Total stockholder's equity 27,110 26,095
------- -------
Total liabilities and stockholder's
equity $66,034 $33,927
======= =======
See accompanying notes.
[FS] 3
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF OPERATIONS
(Dollars in thousands)
<TABLE>
<CAPTION>
POST-MERGER PRE-MERGER
---------------------------| -----------------------------
For the period| For the period For the period
October 25,| January 1, December 17,
For the year 1997 | 1997 1996*
ended through | through through
December 31, December 31,| October 24, December 31,
1998 1997 | 1997 1996
------------ --------------| -------------- --------------
|
<S> <C> <C> <C> <C>
Revenues: |
Annuity product charges $ 239 $ 8 | $ 4 --
Net investment income 1,844 286 | 1,449 $ 65
Realized gains on investments 24 1 | -- --
-------- -------- | -------- --------
2,107 295 | 1,453 65
|
Insurance benefits and expenses: |
Annuity benefits: |
Interest credited to |
account balances 376 26 | 48 --
Underwriting, acquisition and |
insurance expenses: |
Commissions 1,754 141 | 267 --
General expenses 834 124 | 461 --
Insurance taxes 44 94 | 15 --
Policy acquisition costs |
deferred (2,264) (204)| (298) --
Amortization: |
Deferred policy acquisition |
costs 76 13 | 7 --
Value of purchased insurance |
in force 8 3 | -- --
Goodwill 2 1 | -- --
-------- -------- | -------- --------
830 198 | 500 --
-------- -------- | -------- --------
|
Income before income taxes 1,277 97 | 953 65
|
Income taxes 502 34 | 287 23
-------- -------- | -------- --------
|
Net income $ 775 $ 63 | $ 666 $ 42
======== ======== | ======== ========
</TABLE>
* Commencement of operations on December 17, 1996.
See accompanying notes.
[FS] 4
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
(Dollars in thousands)
<TABLE>
<CAPTION>
PRE-MERGER
--------------------------------------------------------------------------
Accumulated
Other
Additional Comprehensive Total
Common Paid-in Income Retained Stockholder's
Stock Capital (Loss) 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
Comprehensive loss:
Net income -- -- -- $42 42
Change in net unrealized
investment gains (losses) -- -- ($99) -- (99)
-------
Comprehensive loss (57)
------ ------- ----- ---- -------
Balance at December 31, 1996 2,000 23,000 (99) 42 24,943
Comprehensive income:
Net income -- -- -- 666 666
Change in net unrealized
investment gains (losses) -- -- (130) -- (130)
-------
Comprehensive income 536
------ ------- ----- ---- -------
Balance at October 24, 1997 $2,000 $23,000 ($229) $708 $25,479
====== ======= ===== ==== =======
<CAPTION>
POST-MERGER
--------------------------------------------------------------------------
Accumulated
Other
Additional Comprehensive Total
Common Paid-in Income Retained Stockholder's
Stock Capital (Loss) Earnings Equity
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Balance at October 25, 1997 $2,000 $23,936 -- -- $25,936
Comprehensive income:
Net income -- -- -- $63 63
Change in net unrealized
investment gains (losses) -- -- $96 -- 96
-------
Comprehensive income 159
------ ------- ----- ---- -------
Balance at December 31, 1997 2,000 23,936 96 63 26,095
Comprehensive income:
Net income -- -- -- 775 775
Change in net unrealized
investment gains (losses) -- -- 240 -- 240
-------
Comprehensive income 1,015
------ ------- ----- ---- -------
Balance at December 31, 1998 $2,000 $23,936 $336 $838 $27,110
====== ======= ===== ==== =======
</TABLE>
* Commencement of operations on December 17, 1996.
See accompanying notes.
[FS] 5
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
POST-MERGER PRE-MERGER
------------ ------------ | ------------ ------------
For the | For the For the
period | period period
October 25, | January 1, December 17,
For the year 1997 | 1997 1996*
ended through | through through
December 31, December 31, | October 24, December 31,
1998 1997 | 1997 1996
------------ ------------ | ------------ ------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES |
Net income $ 775 $ 63 | $ 666 $ 42
Adjustments to reconcile net income to net |
cash provided by (used in) operations: |
Adjustments related to annuity products: |
Interest credited to account balances 376 26 | 48 --
Charges for mortality and |
administration (11) -- | (1) --
Decrease (increase) in accrued |
investment income (38) 35 | (73) (58)
Policy acquisition costs deferred (2,264) (204) | (298) --
Amortization of deferred policy |
acquisition costs 76 13 | 7 --
Amortization of value of purchased |
insurance in force 8 3 | -- --
Net amortization of discount on |
short-term investments -- -- | -- (7)
Change in other assets, other liabilities |
and accrued income taxes 248 (625) | 739 24
Provision for depreciation |
and amortization 82 12 | 17 --
Provision for deferred income taxes 465 98 | 26 --
Realized gains on investments (24) (1) | -- --
-------- -------- | ------------ ------------
Net cash provided by (used in) |
operating activities (307) (580) | 1,131 1
|
INVESTING ACTIVITIES |
Sale, maturity or repayment of |
investments: |
Fixed maturities - available for sale 1,644 556 | 226 --
Short-term investments - net -- -- | -- 25,255
------------ ------------ | ------------ ------------
1,644 556 | 226 25,255
Acquisition of investments: |
Fixed maturities - available for sale (5,549) (2,635) | -- (24,653)
Short-term investments - net (2,432) (59) | (390) (25,598)
------------ ------------ | ------------ ------------
(7,981) (2,694) | (390) (50,251)
Purchase of property and equipment (4) (2) | (64) --
------------ ------------ | ------------ ------------
Net cash used in investing activities (6,341) (2,140) | (228) (24,996)
|
FINANCING ACTIVITIES |
Capitalization of Company by issuance |
of common stock and contribution |
of paid-in capital -- -- | -- 25,000
Receipts from investment contracts |
credited to account balances 9,009 354 | 2,160 --
Return of account balances |
on investment contracts (178) (8) | (15) --
Net reallocations to Separate Account (872) (20) | (38) --
-------- -------- | -------- --------
Net cash provided by financing |
activities 7,959 326 | 2,107 25,000
-------- -------- | -------- --------
Increase (decrease) in cash and |
cash equivalents 1,311 (2,394) | 3,010 5
|
Cash and cash equivalents at |
beginning of period 621 3,015 | 5 --
-------- -------- | -------- --------
Cash and cash equivalents at end |
of period $ 1,932 $ 621 | $ 3,015 $ 5
======== ======== | ======== ========
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW |
INFORMATION |
Cash paid during the period for |
income taxes $99 -- | $283 --
</TABLE>
* Commencement of operations on December 17, 1996.
See accompanying notes.
[FS] 6
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES
- ------------------------------------------------------------------------------
ORGANIZATION
First Golden American Life Insurance Company of New York ("First Golden" or
"Company"), a wholly owned subsidiary of Golden American Life Insurance
Company ("Golden American" or "Parent"), was incorporated on May 24, 1996.
Golden American is a wholly owned subsidiary of Equitable of Iowa Companies,
Inc. On December 17, 1996, Golden American provided capitalization in the
amount of $25,000,000 to First Golden. First Golden commenced investment
operations on December 17, 1996. On January 2, 1997 and December 23, 1997,
First Golden became licensed as a life insurance company under the laws of
the states of New York and Delaware, respectively. First Golden received
policy approvals on March 25, 1997 and December 23, 1997 in New York and
Delaware, respectively. The Company's products are marketed by
broker/dealers, financial institutions and insurance agents. The Company's
primary customers are consumers and corporations. See Note 8 for further
information regarding related party transactions.
On October 24, 1997, PFHI Holdings, Inc. ("PFHI"), a Delaware corporation,
acquired all of the outstanding capital stock of Equitable of Iowa Companies
("Equitable") according to the terms of an Agreement and Plan of Merger
("Merger Agreement") dated July 7, 1997 among Equitable, PFHI and ING Groep
N.V. ("ING"). PFHI is a wholly owned subsidiary of ING, a global financial
services holding company based in The Netherlands. As a result of this
transaction, Equitable was merged into PFHI, which was simultaneously renamed
Equitable of Iowa Companies, Inc. ("EIC"), a Delaware corporation. See
Note 6 for additional information regarding the merger.
For financial statement purposes, the ING merger was accounted for as a
purchase effective October 25, 1997. The merger resulted in a new basis of
accounting reflecting estimated fair values of assets and liabilities. As a
result, the Company's financial statements for the periods after October 24,
1997 are presented on the Post-Merger new basis of accounting and financial
statements for October 24, 1997 and prior periods are presented on the Pre-
Merger historical cost basis of accounting.
INVESTMENTS
FIXED MATURITIES: 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," which requires fixed
maturities to be 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 value of purchased insurance in force ("VPIF"), deferred
policy acquisition costs ("DPAC") and deferred income taxes. At December 31,
1998 and 1997, all of the Company's fixed maturities are designated as
available for sale, although the Company is not precluded from designating
fixed maturities as held for investment or trading at some future date.
Securities determined to have a decline in value that is other than temporary
are written down to estimated fair value, which becomes the new cost basis by
a charge to realized losses in the Company's Statements of Operations.
Premiums and discounts are amortized/accrued utilizing a method which results
in a constant yield over the securities' expected lives. Amortization/accrual
of premiums and discounts on mortgage-backed securities incorporates a
prepayment assumption to estimate the securities' expected lives.
OTHER INVESTMENTS: Short-term investments are reported at cost, adjusted for
amortization of premiums and accrual of discounts.
REALIZED GAINS AND LOSSES: Realized gains and losses are determined on the
basis of specific identification and average cost methods for manager
initiated and issuer initiated disposals, respectively.
FAIR VALUES: Estimated fair values, as reported herein, of conventional
mortgage-backed securities not actively traded in a liquid market and
publicly traded fixed maturities are estimated using a third party pricing
system. This pricing system 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.
CASH AND CASH EQUIVALENTS
For purposes of the Statements of Cash Flows, the Company considers all
demand deposits and 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 POLICY ACQUISITION COSTS
Certain costs of acquiring new insurance business, principally first year
commissions and other expenses related to the production of new business,
have been deferred. Acquisition costs for variable annuity products are being
amortized generally in proportion to the present value (using the assumed
crediting rate) of expected future gross profits. This amortization is
adjusted retrospectively when the Company revises its estimate of current or
future gross profits to be realized from a group of products. DPAC is
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.
VALUE OF PURCHASED INSURANCE IN FORCE
As the result of the merger, a portion of the purchase price was allocated to
the right to receive future cash flows from the existing insurance contracts.
This allocated cost represents VPIF which reflects the value of those
purchased policies calculated by discounting actuarially determined expected
future cash flows at the discount rate determined by the purchaser.
Amortization of VPIF is charged to expense in proportion to expected gross
profits of the underlying business. This amortization is adjusted
retrospectively when the Company revises its estimate of current or future
gross profits to be realized from the insurance contracts acquired. VPIF is
adjusted to reflect the pro forma impact of unrealized gains and losses on
available for sale fixed maturities. See Note 6 for additional information on
VPIF resulting from the merger.
PROPERTY AND EQUIPMENT
Property and equipment primarily represent leasehold improvements and office
furniture and equipment and are not considered to be significant to the
Company's overall operations. Property and equipment are reported at cost
less allowances for depreciation. Depreciation expense is computed primarily
on the basis of the straight-line method over the estimated useful lives of
the assets.
GOODWILL
Goodwill was established as a result of the merger and is being amortized
over 40 years on a straight-line basis. See Note 6 for additional information
on the merger.
FUTURE POLICY BENEFITS
Future policy benefits for the fixed interest division of the variable
products are established utilizing the retrospective deposit accounting
method. Policy reserves represent the premiums received plus accumulated
interest, less mortality and administration charges. Interest credited to
these policies ranged from 3.95% to 7.10% during 1998 and 5.60% to 7.50%
during 1997.
SEPARATE ACCOUNT
Assets and liabilities of the separate account reported in the accompanying
Balance Sheets represent funds that are separately administered principally
for variable annuity contracts. Contractowners, rather than the Company, bear
the investment risk for the variable products. At the direction of the
contractowners, the separate account invests the premiums from the sale of
variable annuity products in shares of specified mutual funds. The assets and
liabilities of the separate account are clearly identified and segregated
from other assets and liabilities of the Company. The portion of the separate
account assets equal to the reserves and other liabilities of variable
annuity contracts cannot be charged with liabilities arising out of any other
business the Company may conduct.
Variable separate account assets are carried at fair value of the underlying
investments and generally represent contractowner investment values
maintained in the accounts. Variable separate account liabilities represent
account balances for the variable annuity contracts invested in the separate
account; the fair value of these liabilities is equal to their carrying
amount. Net investment income and realized and unrealized capital gains and
losses related to separate account assets are not reflected in the
accompanying Statements of Operations.
Product charges recorded by the Company from variable annuity products
consist of charges applicable to each contract for mortality and expense
risk, contract administration and surrender charges.
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 maturities 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 Statements of Operations are based on the changes in the
deferred tax asset or liability from period to period (excluding the SFAS No.
115 adjustment).
DIVIDEND RESTRICTIONS
Under the provisions of the insurance laws of the State of New York, First
Golden cannot distribute any dividends to its stockholder unless a notice of
its intention to declare a dividend and the amount of the dividend has been
filed at least thirty days in advance of the proposed declaration. If the
Superintendent finds the financial condition of the Company does not warrant
the distribution, the Superintendent may disapprove the distribution by
giving written notice to the Company within thirty days after the filing.
SEGMENT REPORTING
As of December 31, 1998, the Company adopted SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information." SFAS No. 131 superseded
SFAS No. 14, "Financial Reporting for Segments of a Business Enterprise."
SFAS No. 131 establishes standards for the way public business enterprises
report information about operating segments in annual financial statements
and requires enterprises to report selected information about operating
segments in interim financial reports. SFAS No. 131 also establishes
standards for related disclosures about products and services, geographic
areas and major customers.
The Company manages its business as one segment, the sale of variable
products designed to meet customer needs for tax-advantaged methods of saving
for retirement and protection from unexpected death. Variable products are
sold to consumers and corporations throughout New York. The adoption of SFAS
No. 131 did not affect the results of operations or financial position of the
Company.
USE OF ESTIMATES
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions affecting the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Management is required to utilize historical experience and assumptions about
future events and circumstances in order to develop estimates of material
reported amounts and disclosures. Included among the material (or potentially
material) reported amounts and disclosures that require extensive use of
estimates and assumptions are (1) estimates of fair values of investments in
securities and other financial instruments, as well as fair values of
policyholder liabilities, (2) policyholder liabilities, (3) deferred policy
acquisition costs and value of purchased insurance in force, (4) fair values
of assets and liabilities recorded as a result of the merger transaction, (5)
asset valuation allowances, (6) deferred tax benefits (liabilities) and (7)
estimates for commitments and contingencies including legal matters, if a
liability is anticipated and can be reasonably estimated. Estimates and
assumptions regarding all of the preceding are inherently subject to change
and are reassessed periodically. Changes in estimates and assumptions could
materially impact the financial statements.
RECLASSIFICATIONS
Certain amounts in the financial statements for the periods ended within the
years ended December 31, 1997 and 1996 have been reclassified to conform to
the December 31, 1998 financial statement presentation.
2. BASIS OF FINANCIAL REPORTING
- ------------------------------------------------------------------------------
The financial statements of the Company differ from related statutory-basis
financial statements principally as follows: (1) acquisition costs of
acquiring new business are deferred and amortized over the life of the
policies rather than charged to operations as incurred; (2) an asset
representing the present value of future cash flows from insurance contracts
acquired was established as a result of the merger and is amortized and
charged to expense; (3) future policy benefit reserves for the fixed interest
division of the variable products are based on full account values, rather
than the greater of cash surrender value or amounts derived from discounting
methodologies utilizing statutory interest rates; (4) reserves are reported
before reduction for reserve credits related to reinsurance ceded and a
receivable is established, net of an allowance for uncollectible amounts, for
these credits rather than presented net of these credits; (5) fixed maturity
investments are designated as "available for sale" and valued at fair value
with unrealized appreciation/depreciation, net of adjustments to value of
purchased insurance in force, deferred policy acquisition costs and deferred
income taxes (if applicable), credited/charged directly to stockholder's
equity rather than valued at amortized cost; (6) the carrying value of fixed
maturities is reduced to fair value by a charge to realized losses in the
Statements of Operations when declines in carrying value are judged to be
other than temporary, rather than through the establishment of a formula-
determined statutory investment reserve (carried as a liability), changes in
which are charged directly to surplus; (7) deferred income taxes are provided
for the difference between the financial statement and income tax bases of
assets and liabilities; (8) net realized gains or losses attributed to
changes in the level of interest rates in the market are recognized when the
sale is completed rather than deferred and amortized over the remaining life
of the fixed maturity security; (9) revenues for variable annuity products
consist of policy administration charges and surrender charges assessed
rather than premiums received; and (10) assets and liabilities are restated
to fair values when a change in ownership occurs, with provisions for
goodwill and other intangible assets, rather than continuing to be presented
at historical cost.
A reconciliation of net income and stockholder's equity as reported to
regulatory authorities under statutory accounting principles to equivalent
amounts reported under generally accepted accounting principles is as
follows:
POST-MERGER | PRE-MERGER
-------------------------- |-------------
|
Net Income | Net Income
-------------------------- |-------------
For the | For the
period | period
October 25, | January 1,
For the year 1997 | 1997
ended through | through
December 31, December 31, | October 24,
1998 1997 | 1997
------------ ------------ | ------------
(Dollars in thousands)
As reported under statutory |
accounting principles ($966) ($142) | $581
Interest maintenance reserve 14 1 | --
Asset valuation reserve -- -- | --
Future policy benefits 45 115 | (179)
Nonadmitted assets -- -- | --
Net unrealized appreciation of fixed |
maturities at fair value -- -- | --
Change in investment basis |
as result of merger (39) (1) | --
Deferred policy acquisition costs 2,188 191 | 291
Value of purchased insurance in force (8) (3) | --
Goodwill (2) (1) | --
Deferred income taxes (465) (98) | (26)
Other 8 1 | (1)
------- ------ | -------
As reported herein $775 $63 | $666
======= ====== =======
POST-MERGER
---------------------------
Stockholder's Equity
---------------------------
December 31, December 31,
1998 1997
------------- ------------
(Dollars in thousands)
As reported under statutory
accounting principles $24,377 $25,424
Interest maintenance reserve 15 1
Asset valuation reserve 96 54
Future policy benefits (16) (61)
Nonadmitted assets 43 2
Net unrealized appreciation of fixed
maturities at fair value 563 151
Change in investment basis
as result of merger 318 357
Deferred policy acquisition costs 2,347 189
Value of purchased insurance in force 117 126
Goodwill 93 95
Deferred income taxes (850) (247)
Other 7 4
-------- --------
As reported herein $27,110 $26,095
========= =========
3. INVESTMENT OPERATIONS
- ------------------------------------------------------------------------------
INVESTMENT RESULTS
Major categories of net investment income are summarized below:
POST-MERGER | PRE-MERGER
---------------------------|---------------------------
For the | For the For the
period | period period
October 25,| January 1, December 17,
For the year 1997 | 1997 1996
ended through | through through
December 31, December 31,| October 24, December 31,
1998 1997 | 1997 1996
------------- ------------|------------- ------------
(Dollars in thousands)
[S] [C] [C] | [C] [C]
Fixed maturities $1,726 $294 | $1,449 $57
Short-term investments 157 13 | 30 9
Other, net -- -- | 2 --
------ ------ | ------ ------
Gross investment income 1,883 307 | 1,481 66
Less investment expenses (39) (21)| (32) (1)
------ ------ | ------ ------
Net investment income $1,844 $286 | $1,449 $65
====== ====== ====== ======
The change in unrealized appreciation (depreciation) on fixed maturities
designated as available for sale at fair value for the year ended
December 31, 1998, the period October 25, 1997 through December 31, 1997, the
period January 1, 1997 through October 24, 1997 and the period December 17,
1996 through December 31, 1996 were $412,000, $(212,000), $516,000 and
$(153,000), respectively.
At December 31, 1998 and December 31, 1997, amortized cost, gross unrealized
gains and losses and estimated fair values of fixed maturities, all of which
are designated as available for sale, are as follows:
POST-MERGER
-----------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
-----------------------------------------------
(Dollars in thousands)
December 31, 1998
- ----------------------------
U.S. government and
governmental agencies
and authorities $3,997 $118 ($3) $4,112
Public utilities 2,543 63 (4) 2,602
Corporate securities 20,351 426 (53) 20,724
Mortgage-backed securities 3,540 17 (1) 3,556
-------- -------- -------- --------
Total $30,431 $624 ($61) $30,994
======== ======== ======== ========
December 31, 1997
- ----------------------------
U.S. government and
governmental agencies
and authorities $3,033 $4 -- $3,037
Public utilities 1,000 10 -- 1,010
Corporate securities 17,921 160 ($32) 18,049
Mortgage-backed securities 4,616 9 -- 4,625
-------- -------- -------- --------
Total $26,570 $183 ($32) $26,721
======== ======== ======== ========
At December 31, 1998, net unrealized investment gains on fixed maturities
designated as available for sale totaled $563,000. Appreciation of $336,000
was included in stockholder's equity at December 31, 1998 (net of an
adjustment of $5,000 to VPIF, an adjustment of $32,000 to DPAC and deferred
income taxes of $190,000). Short-term investments with maturities of 30 days
or less have been excluded from the above schedules. Amortized cost
approximates fair values for these securities.
Amortized cost and estimated fair value of fixed maturities designated as
available for sale, by contractual maturity, at December 31, 1998 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.
POST-MERGER
-----------------------------
Estimated
Amortized Fair
December 31, 1998 Cost Value
- -----------------------------------------------------------------------------
(Dollars in thousands)
Due after one year through five years $11,659 $11,800
Due after five years through ten years 15,232 15,638
--------- ---------
26,891 27,438
Mortgage-backed securities 3,540 3,556
--------- ---------
Total $30,431 $30,994
========== ==========
An analysis of sales, maturities and principal repayments of the Company's
fixed maturities portfolio is as follows:
Gross Gross Proceeds
Amortized Realized Realized from
Cost Gains Losses Sale
- -----------------------------------------------------------------------------
(Dollars in thousands)
POST-MERGER:
For the year ended December 31, 1998:
Scheduled principal repayments,
calls and tenders $1,080 -- -- $1,080
Sales 540 $24 -- 564
-------- -------- -------- -------
Total $1,620 $24 -- $1,644
======== ======== ======== =======
For the period October 25, 1997
through December 31, 1997:
Scheduled principal repayments,
calls and tenders $555 $1 -- $556
======== ======== ======== =======
PRE-MERGER:
For the period January 1, 1997
through October 24, 1997:
Scheduled principal repayments,
calls and tenders $226 -- -- $226
======== ======== ======== =======
For the period December 17, 1996 through December 31, 1996, the Company did
not have any sales, maturities or repayments of its fixed maturities
portfolio.
For the periods October 25, 1997 through December 31, 1997 and January 1,
1997 and October 24, 1997, the amortized cost basis of the Company's fixed
maturities portfolio was reduced by $43,000 and $226,000, respectively, as a
result of scheduled principal repayments.
INVESTMENT VALUATION ANALYSIS: The Company analyzes its investment portfolio
at least quarterly in order to determine if the carrying value of any
investment has been impaired. The carrying value of fixed maturities is
written down to fair value by a charge to realized losses when an impairment
in value appears to be other than temporary. During 1998, 1997 and 1996, no
investments were identified as having an impairment other than temporary.
INVESTMENTS ON DEPOSIT: At December 31, 1998 and 1997, affidavits of deposits
covering bonds with a par value of $400,000 were on deposit with regulatory
authorities pursuant to certain statutory requirements.
INVESTMENT DIVERSIFICATIONS: The Company's investment policies related to its
investment portfolio require diversification by asset type, company and
industry and set limits on the amount which can be invested in an individual
issuer. Such policies are at least as restrictive as those set forth by
regulatory authorities. The following percentages relate to holdings at
December 31, 1998 and December 31, 1997. Fixed maturities included
investments in basic industrials (40% in 1998, 31% in 1997), financial
companies (24% in 1998, 23% in 1997), various government bonds and government
or agency mortgage-backed securities (13% in 1998, 29% in 1997), conventional
mortgage-backed securities (11% in 1998) and consumer products (3% in 1998,
10% in 1997).
No investment in any person or its affiliates (other than bonds issued by
agencies of the United States government) exceed ten percent of stockholder's
equity at December 31, 1998.
4. COMPREHENSIVE INCOME
- ------------------------------------------------------------------------------
As of January 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income." SFAS No. 130 establishes new rules for the reporting
and display of comprehensive income and its components; however, the adoption
of this statement had no impact on the Company's net income or stockholder's
equity. SFAS No. 130 requires unrealized gains or losses on the Company's
available for sale securities (net of VPIF, DPAC and deferred income taxes)
to be included in other comprehensive income. Prior to the adoption of SFAS
No. 130 unrealized gains or losses were reported separately in stockholder's
equity. Prior year financial statements have been reclassified to conform to
the requirements of SFAS No. 130.
Other comprehensive income excludes net investment gains (losses) included in
net income which merely represent transfers from unrealized to realized gains
and losses. These amounts totaled $16,000 in 1998. Such amounts, which have
been measured through the date of sale, are net of income taxes and
adjustments to VPIF and DPAC totaling $8,000 in 1998.
5. FAIR VALUES OF FINANCIAL INSTRUMENTS
- ------------------------------------------------------------------------------
SFAS No. 107, "Disclosures about Fair Value of Financial Instruments,"
requires disclosure of estimated fair value of all financial instruments,
including both assets and liabilities recognized and not recognized in a
company's balance sheet, unless specifically exempted. SFAS No. 119,
"Disclosure about Derivative Financial Instruments and Fair Value of
Financial Instruments," requires additional disclosures about derivative
financial instruments. Most of the Company's investments, investment
contracts and debt fall within the standards' definition of a financial
instrument. In cases where quoted market prices are not available, estimated
fair values are based on estimates using present value or other valuation
techniques. Those techniques are significantly affected by the assumptions
used, including the discount rate and estimates of future cash flows.
Accounting, actuarial and regulatory bodies are continuing to study the
methodologies to be used in developing fair value information, particularly
as it relates to such things as liabilities for insurance contracts.
Accordingly, care should be exercised in deriving conclusions about the
Company's business or financial condition based on the information presented
herein.
The Company closely monitors the composition and yield of its invested
assets, the duration and interest credited on insurance liabilities and
resulting interest spreads and timing of cash flows. These amounts are taken
into consideration in the Company's overall management of interest rate risk,
which attempts to minimize exposure to changing interest rates through the
matching of investment cash flows with amounts expected to be due under
insurance contracts. These assumptions may not result in values consistent
with those obtained through an actuarial appraisal of the Company's business
or values that might arise in a negotiated transaction.
The following compares carrying values as shown for financial reporting
purposes with estimated fair values:
POST-MERGER
------------------------------------------------
December 31 1998 1997
- -------------------------------------------------------------------------------
Estimated Estimated
Carrying Fair Carrying Fair
Value Value Value Value
----------------------- -----------------------
(Dollars in thousands)
ASSETS
Fixed maturities, available
for sale $30,994 $30,994 $26,721 $26,721
Short-term investments 3,231 3,231 799 799
Cash and cash equivalents 1,932 1,932 621 621
Separate account assets 26,717 26,717 4,878 4,878
LIABILITIES
Annuity products 10,830 10,166 2,506 2,377
Separate account liabilities 26,717 26,717 4,878 4,878
The following methods and assumptions were used by the Company in estimating
fair values.
FIXED MATURITIES: Estimated fair values of conventional mortgage-backed
securities not actively traded in a liquid market and publicly traded fixed
maturities are estimated using a third party pricing system. This pricing
system uses a matrix calculation assuming a spread over U. S. Treasury bonds
based upon the expected average lives of the securities.
SHORT-TERM INVESTMENTS AND CASH AND CASH EQUIVALENTS: Carrying values
reported in the Company's historical cost basis balance sheet approximate
estimated fair value for these instruments due to their short-term nature.
SEPARATE ACCOUNT ASSETS: Separate account assets are reported at the quoted
fair values of the individual securities in the separate account.
ANNUITY PRODUCTS: Estimated fair values of the Company's liabilities for
future policy benefits for the fixed interest division of the variable
products are stated at cash surrender value, the cost the Company would incur
to extinguish the liability.
SEPARATE ACCOUNT LIABILITIES: Separate account liabilities are reported at
full account value in the Company's historical cost balance sheet. Estimated
fair values of separate account liabilities are equal to their carrying
amount.
6. MERGER
- ------------------------------------------------------------------------------
TRANSACTION: On October 23, 1997, Equitable's shareholders approved the
Merger Agreement dated July 7, 1997 among Equitable, PFHI and ING. On October
24, 1997, PFHI, a Delaware corporation, acquired all of the outstanding
capital stock of Equitable according to the Merger Agreement. PFHI is a
wholly owned subsidiary of ING, a global financial services holding company
based in The Netherlands. Equitable, an Iowa corporation, in turn, owned all
the outstanding capital stock of Equitable Life Insurance Company of Iowa and
Golden American and their wholly owned subsidiaries. In addition, Equitable
also owned all the outstanding capital stock of Locust Street Securities,
Inc., Equitable Investment Services, Inc. (subsequently dissolved), Directed
Services, Inc., Equitable of Iowa Companies Capital Trust, Equitable of Iowa
Companies Capital Trust II and Equitable of Iowa Securities Network, Inc.
(subsequently renamed ING Funds Distributor, Inc.). In exchange for the
outstanding capital stock of Equitable, ING paid total consideration of
approximately $2.1 billion in cash and stock plus the assumption of
approximately $400 million in debt. As a result of this transaction,
Equitable was merged into PFHI, which was simultaneously renamed Equitable of
Iowa Companies, Inc. ("EIC"), a Delaware corporation. All costs of the
merger, including expenses to terminate certain benefit plans, were paid by
EIC.
ACCOUNTING TREATMENT: The merger has been accounted for as a purchase
resulting in a new basis of accounting, reflecting estimated fair values for
assets and liabilities at October 24, 1997. The purchase price was allocated
to EIC and its subsidiaries with $25,936,000 allocated to the Company.
Goodwill was established for the excess of the merger cost over the fair
value of the net assets and attributed to EIC and its subsidiaries including
Golden American and First Golden. The amount of goodwill allocated to the
Company relating to the merger was $96,000 at the merger date and is being
amortized over 40 years on a straight-line basis. The carrying value of
goodwill will be reviewed periodically for any indication of impairment in
value.
VALUE OF PURCHASED INSURANCE IN FORCE: As part of the merger, a portion of
the acquisition cost was allocated to the right to receive future cash flows
from the insurance contracts existing with the Company at the merger date.
This allocated cost represents VPIF reflecting the value of those purchased
policies calculated by discounting the actuarially determined expected future
cash flows at the discount rate determined by ING.
An analysis of the VPIF asset is as follows:
POST-MERGER
--------------------------------------
For the period
October 25, 1997
For the year ended through
December 31, 1998 December 31, 1997
------------------ -----------------
(Dollars in thousands)
Beginning balance $126 $132
------ -------
Imputed interest 9 3
Amortization (23) (6)
Changes in assumptions of timing
of gross profits 6 --
------ -------
Net amortization (8) (3)
Adjustment for unrealized gains
on available for sale securities (1) (3)
------ -------
Ending balance $117 $126
====== =======
Interest is imputed on the unamortized balance of VPIF at a rate of 7.06% for
the year ended December 31, 1998 and 7.03% for the period October 25, 1997
through December 31, 1997. The amortization of VPIF, net of imputed interest,
is charged to expense. VPIF is adjusted for the unrealized gains (losses) on
available for sale securities; such changes are included directly in
stockholder's equity. Based on current conditions and assumptions as to the
impact of future events on acquired policies in force, the expected
approximate net amortization relating to VPIF as of December 31, 1998 is
$10,000 in 1999, $12,000 in 2000, $13,000 in 2001, $13,000 in 2002, and
$12,000 in 2003. Actual amortization may vary based upon changes in
assumptions and experience.
7. INCOME TAXES
- ------------------------------------------------------------------------------
The Company files a consolidated federal income tax return with Golden
American, also a life insurance company.
At December 31, 1998, the Company has a net operating loss ("NOL")
carryforward for federal income tax purposes of approximately $935,000 which
is available to offset future taxable income of the Company through the year
2018.
INCOME TAX EXPENSE
Income tax expense included in the financial statements is as follows:
POST-MERGER | PRE-MERGER
--------------------------- | ---------------------------
For the | For the For the
period | period period
October 25, | January 1, December 17,
For the year 1997 | 1997 1996
ended through | through through
December 31, December 31, | October 24, December 31,
1998 1997 | 1997 1996
------------ ------------ | ------------ -----------
(Dollars in thousands)
Current $37 ($64) | $261 $23
Deferred 465 98 | 26 --
------ ------ | ------ ------
$502 $34 | $287 $23
====== ====== ====== ======
The effective tax rate on income before income taxes is different from the
prevailing federal income tax rate. A reconciliation of this difference is as
follows:
POST-MERGER | PRE-MERGER
---------------------------|---------------------------
For the | For the For the
period | period period
October 25,| January 1, December 17,
For the year 1997 | 1997 1996
ended through | through through
December 31, December 31,| October 24, December 31,
1998 1997 | 1997 1996
------------- ----------- | ------------ ------------
(Dollars in thousands)
Income before income tax $1,277 $97 | $953 $65
======== ======== | ======== ========
Income tax at federal |
statutory rate $447 $34 | $334 $23
Tax effect (decrease) of: |
Compensatory stock option |
and restricted stock |
expense -- -- | (35) --
Other items 55 -- | (12) --
-------- -------- | -------- --------
Income tax expense $502 $34 | $287 $23
======== ======== ======== ========
DEFERRED INCOME TAXES
The tax effect of temporary differences giving rise to the Company's deferred
income tax assets and liabilities at December 31, 1998 and 1997 is as
follows:
POST-MERGER
-----------------------------------
December 31 1998 1997
- ------------------------------------------------------------ ----------------
(Dollars in thousands)
[S] [C] [C]
Deferred tax assets:
Future policy benefits $11 $22
Net operating loss carryforwards 327 --
--------- ---------
338 22
Deferred tax liabilities:
Net unrealized appreciation of available for
sale fixed maturities (184) (51)
Fixed maturities (222) (134)
Deferred policy acquisition costs (714) (39)
Value of purchased insurance in force (41) (45)
Other (27) --
--------- ---------
(1,188) (269)
--------- ---------
Deferred income tax liability ($850) ($247)
========= =========
8. RELATED PARTY TRANSACTIONS
- ------------------------------------------------------------------------------
Directed Services, Inc. ("DSI") acts as the principal underwriter (as defined
in the Securities Act of 1933 and the Investment Company Act of 1940, as
amended) and distributor of the variable insurance products issued by the
Company. DSI is authorized to enter into agreements with broker/dealers to
distribute the Company's variable insurance products and appoint
representatives of the broker/dealers as agents. As of December 31, 1998, the
Company's variable insurance products were sold primarily through three
broker/dealer institutions. The Company paid commissions and expenses to DSI
totaling $1,754,000 for the year ended December 31, 1998. For the period
October 25, 1997 through December 31, 1997 and January 1, 1997 through
October 24, 1997, the commissions and expenses were $141,000 and $267,000,
respectively.
The Company has service agreements with Golden American and Equitable Life
Insurance Company of Iowa ("Equitable Life"), an affiliate, in which Golden
American and Equitable Life provide administrative and financial related
services. For the year ended December 31, 1998, the Company incurred expenses
of $248,000 and $165,000, respectively, from Golden American and Equitable
Life under these agreements. For the periods October 25, 1997 through
December 31, 1997, expenses incurred were $8,000 and $13,000, respectively,
from Golden American and Equitable Life. For the period January 1, 1997
through October 24, 1997, expenses incurred were $16,000 and $16,000,
respectively, from Golden American and Equitable Life.
The Company provides resources and services to Golden American and DSI.
Revenues for these services, which reduce general expenses incurred by the
Company, totaled $210,000 and $75,000 from Golden American and DSI,
respectively, for the year ended December 31, 1998.
Effective January 1, 1998, the Company has an asset management agreement with
ING Investment Management LLC ("ING IM"), an affiliate, in which ING IM
provides asset management and accounting services. Under the agreement, the
Company records a fee based on the value of the assets under management. The
fee is payable quarterly. For the year ended December 31, 1998, the Company
incurred fees of $56,000 under this agreement.
Prior to 1998, the Company had a service agreement with Equitable Investment
Services, Inc. ("EISI"), an affiliate, in which EISI provided investment
management services. Payments for these services totaled $11,000 and $51,000
for the periods October 25, 1997 through December 31, 1997 and January 1,
1997 through October 24, 1997, respectively.
The Company had premiums, net of reinsurance, for variable products for the
year ended December 31, 1998, that totaled $94,000 from Locust Street
Securities, Inc. ("LSSI"), an affiliate. For the year ended December 31,
1997, the premiums, net of reinsurance, for variable products from LSSI
totaled $13,000.
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 paid-in capital. All expenses related to the
incorporation and licensing of First Golden were incurred by Golden American.
The Golden American Board of Directors has agreed by resolution to provide
funds as needed for the Company to maintain policyholders' surplus that meets
or exceeds the greater of: (1) the minimum capital adequacy standards to
maintain a level of capitalization necessary to meet A.M. Best Company's
guidelines or one level less than the one originally given to First Golden,
or (2) the New York State Insurance Department risk-based capital minimum
requirements as determined in accordance with New York statutory accounting
principles. No funds were transferred from Golden American in 1998 or 1997.
9. COMMITMENTS AND CONTINGENCIES
- ------------------------------------------------------------------------------
REINSURANCE: At December 31, 1998, First Golden had a reinsurance treaty with
an unaffiliated reinsurer covering a significant portion of the mortality
risks under its variable contracts. First Golden remains liable to the extent
its reinsurer does not meet its obligation under the reinsurance agreement.
At December 31, 1998 and December 31, 1997, the Company has a payable of
$1,000 for reinsurance premiums. Included in the accompanying financial
statements are net considerations to the reinsurer of $9,000 and $1,000 for
the year ended December 31, 1998 and for the period October 25, 1997 through
December 31, 1997, respectively.
LITIGATION: The Company, like other insurance companies, may be named or
otherwise involved in lawsuits, including class action lawsuits. In some
class action and other lawsuits involving insurers, substantial damages have
been sought and/or material settlement payments have been made. The Company
currently believes no pending or threatened lawsuits exist that are
reasonably likely to have a material adverse impact on the Company.
VULNERABILITY FROM CONCENTRATIONS: The Company has various concentrations in
its investment portfolio (see Note 3 for further information). The Company's
asset growth, net investment income and cash flow are primarily generated
from the sale of variable products and associated future policy benefits.
Substantial changes in tax laws would make these products less attractive to
consumers and extreme fluctuations in interest rates or stock market returns
which may result in higher lapse experience than assumed could cause a severe
impact to the Company's financial condition. A significant portion of the
Company's sales is generated by three broker/dealers. One of these
distributors sold 62.1% of the Company's products in 1998. This distributor
has discontinued the sales relationship as of December 31, 1998.
LEASES: The Company has a lease for its home office space which expires
December 31, 2001. The Company also leases certain other equipment under
operating leases which expire in 2000. Rent expense for the year ended
December 31, 1998 and the periods October 25, 1997 through December 31, 1997
and January 1, 1997 through October 24, 1997 was $95,000, $25,000 and
$34,000, respectively. At December 31, 1998, minimum rental payments due
under the operating leases are $83,000 in 1999, $82,000 in 2000 and $76,000
in 2001.
REVOLVING NOTE PAYABLE: To enhance short-term liquidity, the Company has
established a revolving note payable effective July 27, 1998 and expiring
July 31, 1999 with SunTrust Bank, Atlanta (the "Bank"). The note was approved
by the Company's Board of Directors on September 29, 1998. The total amount
the Company may have outstanding is $10,000,000. The note accrues interest at
an annual rate equal to: (1) the cost of funds for the Bank for the period
applicable for the advance plus 0.25% or (2) a rate quoted by the Bank to the
Company for the advance. The terms of the agreement require the Company to
maintain the minimum level of Company Action Level Risk Based Capital as
established by applicable state law or regulation. At December 31, 1998, the
Company did not have any borrowings under this agreement.
<PAGE>
<PAGE>
[Shaded Section Header]
--------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
- --------------------------------------------------------------------------
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...................................... 2
Distribution of Contracts................................. 2
Performance Information .................................. 2
IRA Withdrawal Option .................................... 6
Other Information......................................... 6
Financial Statements of Separate Account NY-B............. 6
Appendix Description of Bond Ratings................... A-1
- --------------------------------------------------------------------------
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 PROSPECTUS 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
91
<PAGE>
<PAGE>
PE-1-NY
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92
<PAGE>
<PAGE>
APPENDIX A
CONDENSED FINANCIAL INFORMATION
The following tables give (1) the accumulation unit value ("AUV"),
(2) the total number of accumulation units, and (3) the total
accumulation unit value, for each subaccount of Separate Account NY-B
available under the Contract for the indicated periods. The
subaccounts became available to investors on May 6, 1997 with the
starting accumulation unit value indicated on the last row of each
table.
TOTAL RETURN
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $17.83 11,146 $199 |
| 1997 16.18 2,430 39 |
| 5/6/97 14.36 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $ 17.72 56,611 $1,003 |
| 1997 16.10 11,887 191 |
| 5/6/97 14.31 -- -- |
|-------------------------------------------------------------|
RESEARCH
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $23.03 25,979 $598 |
| 1997 18.95 3,988 76 |
| 5/6/97 16.72 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $22.89 70,248 $1,608 |
| 1997 18.87 9,239 174 |
| 5/6/97 16.66 -- -- |
|-------------------------------------------------------------|
MID-CAP GROWTH
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
|1998 $22.60 5,636 $127 |
|1997 18.64 1,402 26 |
|5/6/97 15.76 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| |
| 1998 $22.43 22,568 $506 |
| 1997 18.52 2,322 43 |
| 5/6/97 15.68 -- -- |
|-------------------------------------------------------------|
A1
<PAGE>
<PAGE>
SMITH BARNEY LARGE CAP VALUE
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
|1998 $19.35 36,973 $715 |
|1997 17.84 4,356 78 |
|5/6/97 15.64 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $19.24 76,929 $1,480 |
| 1997 17.77 14,386 256 |
| 5/6/97 15.60 -- -- |
|-------------------------------------------------------------|
SMITH BARNEY INTERNATIONAL EQUITY
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
|1998 $14.35 8,767 $126 |
|1997 13.65 1,021 14 |
|5/6/97 13.79 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $14.28 23,498 $335 |
| 1997 13.59 4,996 68 |
| 5/6/97 13.75 -- -- |
|-------------------------------------------------------------|
SMITH BARNEY HIGH INCOME
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
|1998 $13.66 9,402 $128 |
|1997 13.77 1,880 26 |
|5/6/97 12.53 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $13.58 15,846 $215 |
| 1997 13.72 2,031 28 |
| 5/6/97 12.49 -- -- |
|-------------------------------------------------------------|
SMITH BARNEY MONEY MARKET
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
|1998 $11.43 35,357 $404 |
|1997 11.02 16,207 179 |
|5/6/97 10.75 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $11.37 165,659 $1,883 |
| 1997 10.97 36,721 402 |
| 5/6/97 10.71 -- -- |
|-------------------------------------------------------------|
A2
<PAGE>
<PAGE>
APPRECIATION
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
|1998 $16.53 73,470 $1,215 |
|1997 14.05 9,350 131 |
|5/6/97 12.35 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $16.47 151,948 $2,502 |
| 1997 14.01 16,089 225 |
| 5/6/97 12.33 -- -- |
|-------------------------------------------------------------|
SELECT HIGH GROWTH
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
|1998 $12.36 $ |
|1997 10.89 -- -- |
|5/6/97 9.96 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $12.33 $ |
| 1997 10.87 19,321 210 |
| 5/6/97 9.95 -- -- |
|-------------------------------------------------------------|
SELECT GROWTH
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
|1998 $12.32 $ |
|1997 11.06 367 $4 |
|5/6/97 10.04 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $12.29 $ |
| 1997 11.05 63,115 697 |
| 5/6/97 10.03 -- -- |
|-------------------------------------------------------------|
SELECT BALANCED
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
|1998 $11.83 $ |
|1997 11.07 27,709 307 |
|5/6/97 10.21 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $11.79 $ |
| 1997 11.06 48,240 294 |
| 5/6/97 10.20 -- -- |
|-------------------------------------------------------------|
A3
<PAGE>
<PAGE>
SELECT CONSERVATIVE
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
|1998 $11.55 $ |
|1997 11.08 32,783 63 |
|5/6/97 10.19 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $11.52 $ |
| 1997 11.07 26,551 -- |
| 5/6/97 10.18 -- -- |
|-------------------------------------------------------------|
SELECT INCOME
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
|1998 $11.49 $ |
|1997 11.04 -- -- |
|5/6/97 10.19 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $11.45 $ |
| 1997 11.03 -- -- |
| 5/6/97 10.18 -- -- |
|-------------------------------------------------------------|
A4
<PAGE>
<PAGE>
APPENDIX B
MARKET VALUE ADJUSTMENT EXAMPLES
EXAMPLE #1: FULL SURRENDER--EXAMPLE OF A NEGATIVE MARKET VALUE
ADJUSTMENT
Assume $100,000 was allocated to a Fixed Interest Allocation with
a guaranteed interest period of 10 years, a guaranteed interest rate
of 7.5%, an initial Index Rate ("I") of 7%; that a full surrender is
requested 3 years into the guaranteed interest period; that the then
Index Rate for a 7 year guaranteed interest period ("J") is 8%; and
that no prior transfers or withdrawals affecting this Fixed Interest
Allocation have been made.
CALCULATE THE MARKET VALUE ADJUSTMENT
1. The contract value of the Fixed Interest Allocation on the date
of surrender is $124,230 ($100,000 x 1.075^3)
2. N = 2,555 ( 365 x 7 )
3. Market Value Adjustment = $124,230 x
(( 1.07/1.0825 ) ^ 2,555/365 - 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 Interest Allocation with
a guaranteed interest period of 10 years, a guaranteed interest rate
of 7.5%, an initial Index Rate ("I") of 7%; that a full surrender is
requested 3 years into the guaranteed interest period; that the then
Index Rate for a 7 year guaranteed interest period ("J") is 6%; and
that no prior transfers or withdrawals affecting this Fixed Interest
Allocation have been made.
CALCULATE THE MARKET VALUE ADJUSTMENT
1. The contract value of the Fixed Interest Allocation on the date
of surrender is $124,230 ($100,000 x 1.075^3)
2. N = 2,555 ( 365 x 7 )
3. Market Value Adjustment = $124,230 x
(( 1.07/1.0625 ) ^ 2,555/365 - 1)=$6,270
Therefore, the amount paid to you on full surrender ignoring any
surrender charge is $130,500 ($124,230 + $6,270 ).
EXAMPLE #3: WITHDRAWAL--EXAMPLE OF A NEGATIVE MARKET VALUE
ADJUSTMENT
Assume $200,000 was allocated to a Fixed Interest Allocation with
a guaranteed interest period of 10 years, a guaranteed interest rate
of 7.5%, an initial Index Rate ("I") of 7%; that a withdrawal of
$114,530 is requested 3 years into the guaranteed interest period;
that the then Index Rate ("J") for a 7 year guaranteed interest
period is 8%; and that no prior transfers or withdrawals affecting
this Fixed Interest Allocation have been made.
First calculate the amount that must be withdrawn from the Fixed
Interest Allocation to provide the amount requested.
B1
<PAGE>
<PAGE>
1. The contract value of the Fixed Interest Allocation on the date
of withdrawal is $248,459 ( $200,000 x 1.075^3 )
2. N = 2,555 ( 365 x 7 )
3. Amount that must be withdrawn =
($114,530/(1.07/1.0825)^ 2,555/365 -1) = $124,230
Then calculate the Market Value Adjustment on that amount.
4. Market Value Adjustment = $124,230 x
((1.07/1.08 )^ 2,555 /365 -1 ) = $9,700
Therefore, the amount of the withdrawal paid to you ignoring any
surrender charge is $114,530, as requested. The Fixed Interest
Allocation will be reduced by the amount of the withdrawal, $114,530,
and also reduced by the Market Value Adjustment of $9,700, for a
total reduction in the Fixed Interest Allocation of $124,230.
EXAMPLE #4: WITHDRAWAL--EXAMPLE OF A POSITIVE MARKET VALUE
ADJUSTMENT
Assume $200,000 was allocated to a Fixed Interest Allocation with
a guaranteed interest period of 10 years, a guaranteed interest rate
of 7.5%, an initial Index Rate of 7%; that a withdrawal of $130,500
requested 3 years into the guaranteed interest period; that the then
Index Rate ("J") for a 7 year guaranteed interest period is 6%; and
that no prior transfers or withdrawals affecting this Fixed Interest
Allocation have been made.
First calculate the amount that must be withdrawn from the Fixed
Interest Allocation to provide the amount requested.
1. The contract value of Fixed Interest Allocation on the date of
surrender is $248,459( $200,000 x 1.075^3)
2. N = 2,555 ( 365 x 7 )
3. Amount that must bewithdrawn =
($130,500 /(1.07/1.0625)^2,555/365) = $124,230
Then calculate the Market Value Adjustment on that amount.
4. Market Value Adjustment = $124,230 x
((1.07/1.0625)^2,555 /365 -1 ) = $6,270
Therefore, the amount of the withdrawal paid to you ignoring any
surrender charge is $130,500, as requested. The Fixed Interest
Allocation will be reduced by the amount of the withdrawal, $130,500,
but increased by the Market Value Adjustment of $6,270, for a total
reduction in the Fixed Interest Allocation of $124,230.
B2
<PAGE>
<PAGE>
APPENDIX C
SURRENDER CHARGE FOR EXCESS WITHDRAWALS EXAMPLE
The following assumes you made 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 withdrawal at the beginning of the
fourth contract year of 20% of the contract value of $35,000.
In this example, $5,250 ($35,000 x .15) is the maximum free
withdrawal amount that you may withdraw during the contract year
without a surrender charge. The total withdrawal would be $7,000
($35,000 x .20). Therefore, $1,750 ($7,000 - $5,250) is considered
an excess 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.
C1
<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
(Shaded Line)
PE-1-NY 5/99
<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 10169-0999 or telephone 1-800-963-9539.
DATE OF PROSPECTUS AND
STATEMENT OF ADDITIONAL INFORMATION:
MAY 1, 1999
<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 6
Other Information 6
Financial Statements of Separate Account NY-B 6
Appendix - Description of Bond Ratings A-1
i
<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"). On
August 13, 1996, Equitable of Iowa Companies, Inc. (formerly
Equitable of Iowa Companies) ("Equitable of Iowa") acquired all of
the interest in Golden American and Directed Services, Inc. On
October 24, 1997, Equitable of Iowa and ING Groep N.V. ("ING")
completed a merger agreement, and Equitable of Iowa became a wholly
owned subsidiary of ING. ING, headquartered in The Netherlands, is a
global financial services holding company with over $461.8 billion in
assets as of December 31, 1998. As of December 31, 1998, First
Golden has approximately $66 million in total assets. First Golden
is licensed to do variable annuity business in the states of Delaware
and New York.
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. First
Golden entered into a similar agreement with another affiliate,
Equitable Life Insurance Company of Iowa ("Equitable Life"), for
additional services. For the years ended December 31, 1998 and 1997,
First Golden incurred expenses of $248,000 and $24,000, respectively,
under the agreement with Golden American and $165,000 and $29,000,
respectively, under the agreement with Equitable Life.
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. For the
year ended December 31, 1998, charges to Golden American and DSI for
these services were $210,000 and $75,000, respectively.
INDEPENDENT AUDITORS
Ernst & Young LLP, independent auditors, performs annual audits of
First Golden and Account NY-B.
DISTRIBUTION OF CONTRACTS
The offering of contracts under the prospectus associated with this
Statement of Additional Information is continuous. Directed
Services, Inc., an affiliate of First Golden American, 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 American. The variable
insurance products were sold primarily through two broker/dealer
institutions during the year ended December 31, 1996, through two
broker/dealer institutions during the year ended December 31, 1997
and through two broker/dealer institutions during the year ended
December 31, 1998. For the years ended 1998, and 1997 commissions
paid by First Golden to Directed Services, Inc. aggregated $1,754,000
and $408,000 respectively. All commissions received by the
distributor were passed through to the broker-dealers who sold the
contracts. Directed Services, Inc. is located at 1475 Dunwoody
Drive, West Chester, Pennsylvania 19380-1478.
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
1
<PAGE>
<PAGE>
cost allocation is reasonable. DSI paid to First Golden a fee calculated
as a percentage of average net assets in the variable separate
account of $75,000 for the year ended 1998.
PERFORMANCE INFORMATION
Performance information for the subaccounts of Account NY-B,
including yields, standard annual returns and other non-standard
measures of performance of all subaccounts, may appear in reports or
promotional literature to current or prospective owners. Such non-
standard measures of performance will be computed, or accompanied by
performance data computed, in accordance with standards defined by
the SEC. 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 6.5% of premium, and any
applicable premium tax that can range from 0% to 3.5%.
SEC STANDARD MONEY MARKET SUBACCOUNT YIELDS
Current yield for the Liquid Asset Subaccount will be based on the
change in the value of a hypothetical investment (exclusive of
capital changes or income other than investment income) over a
particular 7-day period, less a pro-rata share of subaccount 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 Subaccount
for the 7-day period December 25, 1998 to December 31, 1998 were
3.25% and 3.30%, respectively.
SEC STANDARD 30-DAY YIELD FOR ALL SUBACCOUNTS
Quotations of yield for the remaining subaccounts will be based on
all investment income per Unit (contract value divided by the index
of investment experience) earned during a particular 30- 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 Investment portfolio attributable to
shares owned by a subaccount
[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 subaccounts of Account NY-B is earned from the increase in
net asset value of shares of the Investment portfolio in which the
Subaccount invests and from dividends declared and paid by the
Investment portfolio, which are automatically reinvested in shares of
the Investment portfolio.
SEC (SECURITIES AND EXCHANGE COMMISSION) STANDARD AVERAGE
ANNUAL TOTAL RETURN FOR ALL SUBACCOUNTS
Quotations of average annual total return for any Subaccount 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 investment
portfolio), calculated pursuant to the formula:
2
<PAGE>
<PAGE>
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)
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 Annual Total Return for the subaccounts presented on a
standardized basis, which includes deductions for the mortality and
expense risk charge, administrative charge, contract charge and
surrender charge for the year ending December 31, 1998 were as
follows:
Average Annual Total Return for Periods Ending 12/31/98 - Standardized
- --------------------------------------------------------------------------
One Year Five Year Inception
Period Ending Period Ending to Ending Inception
Subaccount 12/31/98 12/31/98 12/31/98 Date
- --------- ------------- ------------- --------- ---------
Equity Income 0.70% n/a 9.00% 1/25/89
Fully Managed -1.63% n/a 6.82% 1/25/89
Capital 5.06% n/a 17.86% 5/4/92
Appreciation
Rising Dividends 6.50% n/a 17.01% 10/4/93
All-Growth 1.95% n/a 11.88% 1/25/89
Real Estate -20.70% n/a -0.54% 1/25/89
Hard Assets -36.61% n/a -18.97% 1/25/89
Value Equity -5.91% n/a 8.52% 1/1/95
Strategic Equity -6.61% n/a 9.22% 10/2/95
Small Cap 13.25% n/a 25.73% 1/2/96
Emerging Markets -31.20% n/a -28.13% 5/1/97
Managed Global 21.46% n/a 17.46% 5/1/97
Growth Opportunities n/a n/a -10.90%# 2/18/98
Developing World n/a n/a -37.26%# 2/18/98
Research 15.29% n/a 20.34%* 10/7/94
Total Return 3.99%* n/a 11.71%* 10/7/94
Mid-Cap Growth 15.05% n/a 25.46%* 10/7/94
Growth & Income 4.37% n/a 19.69% 4/1/96
Growth 19.01% n/a 17.44% 4/1/96
Global Fixed Income 4.25%* n/a 4.29%* 10/7/94
High Yield Bond n/a n/a -7.80%*# 5/1/98
StocksPLUS Growth n/a n/a 7.68%*# 5/1/98
and Income
Limited Maturity -0.68% n/a 2.37% 1/25/89
Bond
Liquid Asset -2.46% n/a 0.02% 1/25/89
_________________________
* Total return calculation reflects partial waiver of fees and
expenses.
# Non-annualized.
3
<PAGE>
<PAGE>
NON-STANDARD AVERAGE ANNUAL TOTAL RETURN FOR ALL SUBACCOUNTS
Quotations of non-standard average annual total return for any
subaccount 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 Investment portfolio), 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 Annual Total Return for the subaccounts presented on a non-
standardized basis which includes deductions for the mortality and
expense risk charge, administrative charge, contract charge and
surrender charge for the year ending December 31, 1998 were as
follows:
Average Annual Total Return for Periods Ending 12/31/98 - Non-Standardized
- --------------------------------------------------------------------------
One Year Five Year Inception
Period Ending Period Ending to Ending Inception
Subaccount 12/31/98 12/31/98 12/31/98 Date
- --------- ------------- ------------- --------- ---------
Equity Income 6.75% n/a 12.40% 1/25/89
Fully Managed 4.41% n/a 10.28% 1/25/89
Capital 11.10% n/a 21.10% 5/4/92
Appreciation
Rising Dividends 12.54% n/a 20.26% 10/4/93
All-Growth 7.99% n/a 15.23% 1/25/89
Real Estate -14.66% n/a 3.08% 1/25/89
Hard Assets -30.57% n/a -14.84% 1/25/89
Value Equity 0.13% n/a 11.94% 1/1/95
Strategic Equity -0.57% n/a 12.62% 10/2/95
Small Cap 19.29% n/a 28.84% 1/2/96
Emerging Markets -25.15% n/a -23.67% 5/1/97
Managed Global 27.51% n/a 20.71% 5/1/97
Growth Opportunities n/a n/a -3.99%# 2/18/98
Developing World n/a n/a -30.66%# 2/18/98
Research 21.33% n/a 23.54%* 10/7/94
Total Return 10.03%* n/a 15.07%* 10/7/94
Mid-Cap Growth 21.09% n/a 28.57%* 10/7/94
Growth & Income 10.41% n/a 22.91% 4/1/96
Growth 25.05% n/a 20.70% 4/1/96
Global Fixed Income 10.29%* n/a 7.80%* 10/7/94
High Yield Bond n/a n/a 1.20%*# 5/1/98
StocksPLUS Growth n/a n/a 17.08%*# 5/1/98
and Income
Limited Maturity 5.37% n/a 5.92% 1/25/89
Bond
Liquid Asset 3.58% n/a 3.62% 1/25/89
_________________________
* Total return calculation reflects partial waiver of fees and
expenses.
# Non-annualized.
4
<PAGE>
<PAGE>
Performance information for a Subaccount 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 Subaccount'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 Subaccount reflects only the
performance of a hypothetical contract under which accumulation 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 Investment
portfolio of the trust in which the Account NY-B Subaccounts 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 Subaccount 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.
ACCUMULATION UNIT VALUE
The calculation of the Accumulation Unit Value ("AUV") is discussed
in the prospectus for the Contracts under Measurement of Investment
Experience. Note that in your contract contract value is referred to
as Index of Investment Experience. The following illustrations show
a calculation of a new AUV 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 AUV's or contract values.
ILLUSTRATION OF CALCULATION OF AUV
EXAMPLE 1.
1. AUV, 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........ 0.00003446
6. Less asset based administrative charge......... 0.00000411
7. Net investment return (4)minus (5) minus (6)... 0.00996164
8. Net investment factor (1.000000) plus (7)...... 1.00996164
9. AUV, end of period (1) multiplied by (8)....... 10.09961644
5
<PAGE>
<PAGE>
ILLUSTRATION OF PURCHASE OF UNITS (ASSUMING NO STATE PREMIUM TAX)
EXAMPLE 2.
1. Initial Premium Payment............................ $ 1,000
2. AUV on effective date of purchase (see Example 1).. $ 10.00
3. Number of Units purchased [(1) divided by (2)]..... 100
4. AUV for valuation date following purchase (see
Example 1)......................................... $10.0996164
5. Contract value in account for valuation date
following purchase [(3) multiplied by (4)] $ 1,009.96
IRA PARTIAL WITHDRAWAL OPTION
If the contract owner has an IRA contract and will attain age 70 1/2
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 1/2. 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 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 1/2 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 modes elected 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
contract value by the life expectancy. In the first year withdrawals
begin, we use the contract value as of the date of the first payment.
Thereafter, we use the contract 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
The audited financial statements of Account NY-B are listed below and
are included in this Statement of Additional Information:
Report of Independent Auditors
Audited Financial Statements
Statement of Assets and Liability as of December 31, 1998
Statement of Operations for the year ended December 31, 1998
Statements of Changes in Net Assets for the year ended December
31, 1998 and the period ended December 31, 1997
Notes to Financial Statements
6
<PAGE>
<PAGE>
FINANCIAL STATEMENTS
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY
OF NEW YORK
SEPARATE ACCOUNT NY-B
YEAR ENDED DECEMBER 31, 1998
AND FOR THE PERIOD MAY 19, 1997
(COMMENCEMENT OF OPERATIONS)
THROUGH DECEMBER 31, 1997
WITH REPORT OF INDEPENDENT AUDITORS
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD MAY 19, 1997 (COMMENCEMENT OF OPERATIONS)
THROUGH DECEMBER 31, 1997
TABLE OF CONTENTS
Report of Independent Auditors
Audited Financial Statements
Statement of Assets and Liability
Statement of Operations
Statements of Changes in Net Assets
Notes to Financial Statements
Report of Independent Auditors
The Board of Directors
First Golden American Life Insurance Company of New York
We have audited the accompanying statement of assets and liability of First
Golden American Life Insurance Company of New York Separate Account NY-B as
of December 31, 1998, and the related statements of operations for the year
then ended and the changes in net assets for the year ended December 31, 1998
and for the period May 19, 1997 (commencement of operations) through
December 31, 1997. These financial statements are the responsibility of the
Account's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits 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.
Our procedures included confirmation of securities owned as of December 31,
1998, by correspondence with the custodian. 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 Separate Account NY-B at December 31, 1998, and
the results of its operations for the year then ended and the changes in its
net assets for the year ended December 31, 1998 and for the period May 19,
1997 (commencement of operations) through December 31, 1997 in conformity
with generally accepted accounting principles.
/S/ Ernst & Young LLP
Des Moines, Iowa
February 25, 1999
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF ASSETS AND LIABILITY
DECEMBER 31, 1998
<TABLE>
<CAPTION>
COMBINED
_____________
<S> <C>
ASSETS
Investments at net asset value:
The GCG Trust:
Limited Maturity Bond Series,
2,366 shares (cost - $25,616) $25,271
Hard Assets Series,
1,498 shares (cost - $20,401) 14,380
All-Growth Series,
5,458 shares (cost - $68,098) 81,814
Real Estate Series,
2,939 shares (cost - $48,133) 39,913
Fully Managed Series,
9,667 shares (cost - $154,885) 147,228
Multiple Allocation Series,
27,326 shares (cost - $365,906) 346,218
Capital Appreciation Series,
7,432 shares (cost - $141,985) 134,444
Rising Dividends Series,
37,039 shares (cost - $810,250) 815,224
Emerging Markets Series,
2,844 shares (cost - $26,347) 19,001
Value Equity Series,
7,092 shares (cost - $119,569) 112,614
Strategic Equity Series,
4,343 shares (cost - $56,807) 55,684
Small Cap Series,
12,986 shares (cost - $186,284) 208,158
Managed Global Series,
12,624 shares (cost - $161,472) 179,130
Liquid Asset Series,
125,651 shares (cost - $125,651) 125,651
Mid-Cap Growth Series,
44,121 shares (cost - $758,268) 798,586
Growth & Income Series,
28,714 shares (cost - $420,714) 448,508
Research Series,
122,171 shares (cost - $2,343,717) 2,481,286
Total Return Series,
108,899 shares (cost - $1,721,481) 1,720,790
Value + Growth Series,
26,987 shares (cost - $389,543) 421,543
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF ASSETS AND LIABILITY
DECEMBER 31, 1998
(CONTINUED)
<TABLE>
<CAPTION>
COMBINED
_____________
<S> <C>
ASSETS - Continued
Greenwich Street Series Fund Inc.:
Appreciation Portfolio,
175,647 shares (cost - $3,476,049) $3,716,689
Smith Barney Concert Allocation Series Inc.:
Select High Growth Portfolio,
127,628 shares (cost - $1,494,093) 1,606,842
Select Growth Portfolio,
204,918 shares (cost - $2,379,516) 2,563,524
Select Balanced Portfolio,
306,820 shares (cost - $3,508,997) 3,660,367
Select Conservative Portfolio,
133,265 shares (cost - $1,505,801) 1,549,872
Select Income Portfolio,
13,570 shares (cost - 154,004) 157,141
Travelers Series Fund Inc.:
Smith Barney Money Market Portfolio,
2,287,109 shares (cost - $2,287,109) 2,287,109
Smith Barney Large Cap Value Portfolio,
108,632 shares (cost - $2,129,987) 2,195,458
Smith Barney International Equity Portfolio,
33,574 shares (cost - $469,875) 461,304
Smith Barney High Income Portfolio,
27,146 shares (cost - $351,610) 343,664
_____________
TOTAL ASSETS (cost - $25,702,168) 26,717,413
LIABILITY
Payable to First Golden American Life Insurance Company of
New York for charges and fees 18,211
_____________
TOTAL NET ASSETS $26,699,202
=============
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
<TABLE>
<CAPTION>
Limited
Maturity Hard All-
Bond Assets Growth
Division Division Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $4,057 $807 --
Capital gains distributions -- 518 $470
______________________________________
TOTAL INVESTMENT INCOME 4,057 1,325 470
Expenses:
Mortality and expense risk and
other charges 988 140 432
Annual administrative charges 44 14 34
Contingent deferred sales charges 8 -- 12
______________________________________
TOTAL EXPENSES 1,040 154 478
______________________________________
NET INVESTMENT INCOME (LOSS) 3,017 1,171 (8)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 1,392 (82) (177)
Net unrealized appreciation
(depreciation) of investments 203 (5,017) 14,043
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $4,612 ($3,928) $13,858
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Real Fully Multiple
Estate Managed Allocation
Division Division Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $1,915 $4,319 $17,406
Capital gains distributions 3,602 8,029 18,777
______________________________________
TOTAL INVESTMENT INCOME 5,517 12,348 36,183
Expenses:
Mortality and expense risk and
other charges 335 1,241 1,880
Annual administrative charges 34 102 193
Contingent deferred sales charges 29 -- --
______________________________________
TOTAL EXPENSES 398 1,343 2,073
______________________________________
NET INVESTMENT INCOME (LOSS) 5,119 11,005 34,110
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (57) 140 189
Net unrealized appreciation
(depreciation) of investments (8,862) (7,735) (18,339)
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($3,800) $3,410 $15,960
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Capital Rising Emerging
Appreciation Dividends Markets
Division Division Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $1,695 $3,635 --
Capital gains distributions 9,864 26,986 --
______________________________________
TOTAL INVESTMENT INCOME 11,559 30,621 --
Expenses:
Mortality and expense risk and
other charges 1,035 6,073 $221
Annual administrative charges 99 367 8
Contingent deferred sales charges 27 74 --
______________________________________
TOTAL EXPENSES 1,161 6,514 229
______________________________________
NET INVESTMENT INCOME (LOSS) 10,398 24,107 (229)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (1,319) 9,972 (111)
Net unrealized appreciation
(depreciation) of investments (7,271) (683) (4,156)
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $1,808 $33,396 ($4,496)
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Value Strategic Small
Equity Equity Cap
Division Division Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $2,451 $1,485 --
Capital gains distributions 902 2,075 --
______________________________________
TOTAL INVESTMENT INCOME 3,353 3,560 --
Expenses:
Mortality and expense risk and
other charges 1,136 436 $1,216
Annual administrative charges 93 30 118
Contingent deferred sales charges 227 -- 64
______________________________________
TOTAL EXPENSES 1,456 466 1,398
______________________________________
NET INVESTMENT INCOME (LOSS) 1,897 3,094 (1,398)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (1,535) 43 108
Net unrealized appreciation
(depreciation) of investments (3,654) (2,309) 22,839
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($3,292) $828 $21,549
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Managed Liquid Mid-Cap
Global Asset Growth
Division Division(b) Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $2,457 $3,454 $31,084
Capital gains distributions 4,935 -- --
______________________________________
TOTAL INVESTMENT INCOME 7,392 3,454 31,084
Expenses:
Mortality and expense risk and
other charges 1,535 903 4,897
Annual administrative charges 126 65 629
Contingent deferred sales charges 131 4 383
______________________________________
TOTAL EXPENSES 1,792 972 5,909
______________________________________
NET INVESTMENT INCOME (LOSS) 5,600 2,482 25,175
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (94) -- 1,857
Net unrealized appreciation
(depreciation) of investments 21,964 -- 43,328
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $27,470 $2,482 $70,360
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Growth & Total
Income Research Return
Division Division Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $7,709 $122,748 $92,006
Capital gains distributions -- -- --
______________________________________
TOTAL INVESTMENT INCOME 7,709 122,748 92,006
Expenses:
Mortality and expense risk and
other charges 2,370 16,675 12,840
Annual administrative charges 98 2,191 1,186
Contingent deferred sales charges 68 1,110 268
______________________________________
TOTAL EXPENSES 2,536 19,976 14,294
______________________________________
NET INVESTMENT INCOME (LOSS) 5,173 102,772 77,712
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (2,689) 3,010 682
Net unrealized appreciation
(depreciation) of investments 28,182 141,414 458
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $30,666 $247,196 $78,852
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Value + High
Growth Appreciation Growth
Division Division Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $15,295 $22,592 $7,182
Capital gains distributions -- 89,080 --
______________________________________
TOTAL INVESTMENT INCOME 15,295 111,672 7,182
Expenses:
Mortality and expense risk and
other charges 2,639 27,089 13,467
Annual administrative charges 205 3,339 2,037
Contingent deferred sales charges 194 4,310 6,420
______________________________________
TOTAL EXPENSES 3,038 34,738 21,924
______________________________________
NET INVESTMENT INCOME (LOSS) 12,257 76,934 (14,742)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (2,543) 1,129 3,082
Net unrealized appreciation
(depreciation) of investments 38,290 251,837 114,108
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $48,004 $329,900 $102,448
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select Select Select
Growth Balanced Conservative
Division Division Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $16,153 $34,434 $18,972
Capital gains distributions -- -- --
______________________________________
TOTAL INVESTMENT INCOME 16,153 34,434 18,972
Expenses:
Mortality and expense risk and
other charges 22,122 29,596 14,092
Annual administrative charges 2,513 1,809 611
Contingent deferred sales charges 3,681 10,390 51
______________________________________
TOTAL EXPENSES 28,316 41,795 14,754
______________________________________
NET INVESTMENT INCOME (LOSS) (12,163) (7,361) 4,218
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 4,062 3,647 4,927
Net unrealized appreciation
(depreciation) of investments 174,548 143,123 36,419
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $166,447 $139,409 $45,564
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith Smith
Barney Barney
Select Money Large Cap
Income Market Value
Division(a) Division Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $945 $54,079 $12,948
Capital gains distributions -- -- 32,373
______________________________________
TOTAL INVESTMENT INCOME 945 54,079 45,321
Expenses:
Mortality and expense risk and
other charges 901 14,886 16,479
Annual administrative charges 50 512 1,358
Contingent deferred sales charges -- -- 283
______________________________________
TOTAL EXPENSES 951 15,398 18,120
______________________________________
NET INVESTMENT INCOME (LOSS) (6) 38,681 27,201
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 18 -- 1,374
Net unrealized appreciation
(depreciation) of investments 3,137 -- 53,676
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $3,149 $38,681 $82,251
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith Smith
Barney Barney
International High
Equity Income
Division Division Combined
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends -- $8,243 $488,071
Capital gains distributions -- 1,897 199,508
______________________________________
TOTAL INVESTMENT INCOME -- 10,140 687,579
Expenses:
Mortality and expense risk and
other charges $3,665 2,436 201,725
Annual administrative charges 366 243 18,474
Contingent deferred sales charges 370 929 29,033
______________________________________
TOTAL EXPENSES 4,401 3,608 249,232
______________________________________
NET INVESTMENT INCOME (LOSS) (4,401) 6,532 438,347
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 297 289 27,611
Net unrealized appreciation
(depreciation) of investments (6,646) (9,106) 1,013,791
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($10,750) ($2,285) $1,479,749
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
<TABLE>
<CAPTION>
Limited
Maturity
Bond
Division(n)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $600
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments (548)
_____________
Net increase (decrease) in net assets resulting from operations 52
Changes from principal transactions:
Purchase payments 10,001
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions --
_____________
Increase in net assets derived from principal transactions 10,001
_____________
Total increase 10,053
_____________
NET ASSETS AT DECEMBER 31, 1997 10,053
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Limited
Maturity
Bond
Division(n)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $3,017
Net realized gain (loss) on investments 1,392
Net unrealized appreciation (depreciation) of investments 203
_____________
Net increase (decrease) in net assets resulting from operations 4,612
Changes from principal transactions:
Purchase payments 4,243
Contract distributions and terminations (5,921)
Transfer payments from (to) Fixed Account and other Divisions 12,241
_____________
Increase in net assets derived from principal transactions 10,563
_____________
Total increase 15,175
_____________
NET ASSETS AT DECEMBER 31, 1998 $25,228
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Hard
Assets
Division(o)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $902
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments (1,004)
_____________
Net increase (decrease) in net assets resulting from operations (102)
Changes from principal transactions:
Purchase payments 4,999
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions --
_____________
Increase in net assets derived from principal transactions 4,999
_____________
Total increase 4,897
_____________
NET ASSETS AT DECEMBER 31, 1997 4,897
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Hard
Assets
Division(o)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $1,171
Net realized gain (loss) on investments (82)
Net unrealized appreciation (depreciation) of investments (5,017)
_____________
Net increase (decrease) in net assets resulting from operations (3,928)
Changes from principal transactions:
Purchase payments 10,986
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 2,411
_____________
Increase in net assets derived from principal transactions 13,397
_____________
Total increase 9,469
_____________
NET ASSETS AT DECEMBER 31, 1998 $14,366
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
All-
Growth
Division(e)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $197
Net realized gain (loss) on investments 1
Net unrealized appreciation (depreciation) of investments (327)
_____________
Net increase (decrease) in net assets resulting from operations (129)
Changes from principal transactions:
Purchase payments 5,000
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 3,429
_____________
Increase in net assets derived from principal transactions 8,429
_____________
Total increase 8,300
_____________
NET ASSETS AT DECEMBER 31, 1997 8,300
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
All-
Growth
Division(e)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($8)
Net realized gain (loss) on investments (177)
Net unrealized appreciation (depreciation) of investments 14,043
_____________
Net increase (decrease) in net assets resulting from operations 13,858
Changes from principal transactions:
Purchase payments 52,783
Contract distributions and terminations (2,091)
Transfer payments from (to) Fixed Account and other Divisions 8,932
_____________
Increase in net assets derived from principal transactions 59,624
_____________
Total increase 73,482
_____________
NET ASSETS AT DECEMBER 31, 1998 $81,782
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Real
Estate
Division(a)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $703
Net realized gain (loss) on investments 6
Net unrealized appreciation (depreciation) of investments 642
_____________
Net increase (decrease) in net assets resulting from operations 1,351
Changes from principal transactions:
Purchase payments 8,370
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 2,450
_____________
Increase in net assets derived from principal transactions 10,820
_____________
Total increase 12,171
_____________
NET ASSETS AT DECEMBER 31, 1997 12,171
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Real
Estate
Division(a)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $5,119
Net realized gain (loss) on investments (57)
Net unrealized appreciation (depreciation) of investments (8,862)
_____________
Net increase (decrease) in net assets resulting from operations (3,800)
Changes from principal transactions:
Purchase payments 23,949
Contract distributions and terminations (1,942)
Transfer payments from (to) Fixed Account and other Divisions 9,503
_____________
Increase in net assets derived from principal transactions 31,510
_____________
Total increase 27,710
_____________
NET ASSETS AT DECEMBER 31, 1998 $39,881
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Fully
Managed
Division(a)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $2,352
Net realized gain (loss) on investments 12
Net unrealized appreciation (depreciation) of investments 78
_____________
Net increase (decrease) in net assets resulting from operations 2,442
Changes from principal transactions:
Purchase payments 26,106
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 4,900
_____________
Increase in net assets derived from principal transactions 31,006
_____________
Total increase 33,448
_____________
NET ASSETS AT DECEMBER 31, 1997 33,448
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Fully
Managed
Division(a)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $11,005
Net realized gain (loss) on investments 140
Net unrealized appreciation (depreciation) of investments (7,735)
_____________
Net increase (decrease) in net assets resulting from operations 3,410
Changes from principal transactions:
Purchase payments 75,951
Contract distributions and terminations (2,915)
Transfer payments from (to) Fixed Account and other Divisions 37,266
_____________
Increase in net assets derived from principal transactions 110,302
_____________
Total increase 113,712
_____________
NET ASSETS AT DECEMBER 31, 1998 $147,160
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Multiple
Allocation
Division(a)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $2,119
Net realized gain (loss) on investments 8
Net unrealized appreciation (depreciation) of investments (1,349)
_____________
Net increase (decrease) in net assets resulting from operations 778
Changes from principal transactions:
Purchase payments 22,315
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 2,450
_____________
Increase in net assets derived from principal transactions 24,765
_____________
Total increase 25,543
_____________
NET ASSETS AT DECEMBER 31, 1997 25,543
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Multiple
Allocation
Division(a)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $34,110
Net realized gain (loss) on investments 189
Net unrealized appreciation (depreciation) of investments (18,339)
_____________
Net increase (decrease) in net assets resulting from operations 15,960
Changes from principal transactions:
Purchase payments 102,392
Contract distributions and terminations (2,978)
Transfer payments from (to) Fixed Account and other Divisions 205,138
_____________
Increase in net assets derived from principal transactions 304,552
_____________
Total increase 320,512
_____________
NET ASSETS AT DECEMBER 31, 1998 $346,055
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Capital
Appreciation
Division(c)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $1,278
Net realized gain (loss) on investments 4
Net unrealized appreciation (depreciation) of investments (270)
_____________
Net increase (decrease) in net assets resulting from operations 1,012
Changes from principal transactions:
Purchase payments 15,165
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions --
_____________
Increase in net assets derived from principal transactions 15,165
_____________
Total increase 16,177
_____________
NET ASSETS AT DECEMBER 31, 1997 16,177
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Capital
Appreciation
Division(c)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $10,398
Net realized gain (loss) on investments (1,319)
Net unrealized appreciation (depreciation) of investments (7,271)
_____________
Net increase (decrease) in net assets resulting from operations 1,808
Changes from principal transactions:
Purchase payments 106,557
Contract distributions and terminations (2,271)
Transfer payments from (to) Fixed Account and other Divisions 12,077
_____________
Increase in net assets derived from principal transactions 116,363
_____________
Total increase 118,171
_____________
NET ASSETS AT DECEMBER 31, 1998 $134,348
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Rising
Dividends
Division(a)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $3,038
Net realized gain (loss) on investments 51
Net unrealized appreciation (depreciation) of investments 5,657
_____________
Net increase (decrease) in net assets resulting from operations 8,746
Changes from principal transactions:
Purchase payments 146,447
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 11,767
_____________
Increase in net assets derived from principal transactions 158,214
_____________
Total increase 166,960
_____________
NET ASSETS AT DECEMBER 31, 1997 166,960
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Rising
Dividends
Division(a)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $24,107
Net realized gain (loss) on investments 9,972
Net unrealized appreciation (depreciation) of investments (683)
_____________
Net increase (decrease) in net assets resulting from operations 33,396
Changes from principal transactions:
Purchase payments 502,600
Contract distributions and terminations (30,903)
Transfer payments from (to) Fixed Account and other Divisions 142,849
_____________
Increase in net assets derived from principal transactions 614,546
_____________
Total increase 647,942
_____________
NET ASSETS AT DECEMBER 31, 1998 $814,902
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Emerging
Markets
Division(e)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($68)
Net realized gain (loss) on investments (15)
Net unrealized appreciation (depreciation) of investments (3,190)
_____________
Net increase (decrease) in net assets resulting from operations (3,273)
Changes from principal transactions:
Purchase payments 17,317
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 1,717
_____________
Increase in net assets derived from principal transactions 19,034
_____________
Total increase 15,761
_____________
NET ASSETS AT DECEMBER 31, 1997 15,761
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Emerging
Markets
Division(e)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($229)
Net realized gain (loss) on investments (111)
Net unrealized appreciation (depreciation) of investments (4,156)
_____________
Net increase (decrease) in net assets resulting from operations (4,496)
Changes from principal transactions:
Purchase payments 3,608
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 4,120
_____________
Increase in net assets derived from principal transactions 7,728
_____________
Total increase 3,232
_____________
NET ASSETS AT DECEMBER 31, 1998 $18,993
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Value
Equity
Division(d)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $3,043
Net realized gain (loss) on investments 2
Net unrealized appreciation (depreciation) of investments (3,301)
_____________
Net increase (decrease) in net assets resulting from operations (256)
Changes from principal transactions:
Purchase payments 38,774
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions --
_____________
Increase in net assets derived from principal transactions 38,774
_____________
Total increase 38,518
_____________
NET ASSETS AT DECEMBER 31, 1997 38,518
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Value
Equity
Division(d)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $1,897
Net realized gain (loss) on investments (1,535)
Net unrealized appreciation (depreciation) of investments (3,654)
_____________
Net increase (decrease) in net assets resulting from operations (3,292)
Changes from principal transactions:
Purchase payments 71,576
Contract distributions and terminations (7,632)
Transfer payments from (to) Fixed Account and other Divisions 13,355
_____________
Increase in net assets derived from principal transactions 77,299
_____________
Total increase 74,007
_____________
NET ASSETS AT DECEMBER 31, 1998 $112,525
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Strategic
Equity
Division(a)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $755
Net realized gain (loss) on investments 10
Net unrealized appreciation (depreciation) of investments 1,186
_____________
Net increase (decrease) in net assets resulting from operations 1,951
Changes from principal transactions:
Purchase payments 13,676
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 2,450
_____________
Increase in net assets derived from principal transactions 16,126
_____________
Total increase 18,077
_____________
NET ASSETS AT DECEMBER 31, 1997 18,077
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Strategic
Equity
Division(a)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $3,094
Net realized gain (loss) on investments 43
Net unrealized appreciation (depreciation) of investments (2,309)
_____________
Net increase (decrease) in net assets resulting from operations 828
Changes from principal transactions:
Purchase payments --
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 36,747
_____________
Increase in net assets derived from principal transactions 36,747
_____________
Total increase 37,575
_____________
NET ASSETS AT DECEMBER 31, 1998 $55,652
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Small
Cap
Division(b)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($142)
Net realized gain (loss) on investments 13
Net unrealized appreciation (depreciation) of investments (965)
_____________
Net increase (decrease) in net assets resulting from operations (1,094)
Changes from principal transactions:
Purchase payments 39,418
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 5,883
_____________
Increase in net assets derived from principal transactions 45,301
_____________
Total increase 44,207
_____________
NET ASSETS AT DECEMBER 31, 1997 44,207
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Small
Cap
Division(b)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($1,398)
Net realized gain (loss) on investments 108
Net unrealized appreciation (depreciation) of investments 22,839
_____________
Net increase (decrease) in net assets resulting from operations 21,549
Changes from principal transactions:
Purchase payments 79,797
Contract distributions and terminations (3,119)
Transfer payments from (to) Fixed Account and other Divisions 65,610
_____________
Increase in net assets derived from principal transactions 142,288
_____________
Total increase 163,837
_____________
NET ASSETS AT DECEMBER 31, 1998 $208,044
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Managed
Global
Division(b)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $2,340
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments (4,306)
_____________
Net increase (decrease) in net assets resulting from operations (1,966)
Changes from principal transactions:
Purchase payments 32,435
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 4,167
_____________
Increase in net assets derived from principal transactions 36,602
_____________
Total increase 34,636
_____________
NET ASSETS AT DECEMBER 31, 1997 34,636
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Managed
Global
Division(b)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $5,600
Net realized gain (loss) on investments (94)
Net unrealized appreciation (depreciation) of investments 21,964
_____________
Net increase (decrease) in net assets resulting from operations 27,470
Changes from principal transactions:
Purchase payments 85,280
Contract distributions and terminations (7,541)
Transfer payments from (to) Fixed Account and other Divisions 39,165
_____________
Increase in net assets derived from principal transactions 116,904
_____________
Total increase 144,374
_____________
NET ASSETS AT DECEMBER 31, 1998 $179,010
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Liquid
Asset
Division(q)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) --
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
_____________
Net increase (decrease) in net assets resulting from operations --
Changes from principal transactions:
Purchase payments --
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions --
_____________
Increase in net assets derived from principal transactions --
_____________
Total increase --
_____________
NET ASSETS AT DECEMBER 31, 1997 --
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Liquid
Asset
Division(q)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $2,482
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
_____________
Net increase (decrease) in net assets resulting from operations 2,482
Changes from principal transactions:
Purchase payments 404,872
Contract distributions and terminations (4,052)
Transfer payments from (to) Fixed Account and other Divisions (277,715)
_____________
Increase in net assets derived from principal transactions 123,105
_____________
Total increase 125,587
_____________
NET ASSETS AT DECEMBER 31, 1998 $125,587
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Mid-Cap
Growth
Division(b)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $2,668
Net realized gain (loss) on investments 14
Net unrealized appreciation (depreciation) of investments (3,010)
_____________
Net increase (decrease) in net assets resulting from operations (328)
Changes from principal transactions:
Purchase payments 17,788
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 61,644
_____________
Increase in net assets derived from principal transactions 79,432
_____________
Total increase 79,104
_____________
NET ASSETS AT DECEMBER 31, 1997 79,104
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Mid-Cap
Growth
Division(b)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $25,175
Net realized gain (loss) on investments 1,857
Net unrealized appreciation (depreciation) of investments 43,328
_____________
Net increase (decrease) in net assets resulting from operations 70,360
Changes from principal transactions:
Purchase payments 165,922
Contract distributions and terminations (9,513)
Transfer payments from (to) Fixed Account and other Divisions 492,058
_____________
Increase in net assets derived from principal transactions 648,467
_____________
Total increase 718,827
_____________
NET ASSETS AT DECEMBER 31, 1998 $797,931
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Growth &
Income
Division(e)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $385
Net realized gain (loss) on investments 1
Net unrealized appreciation (depreciation) of investments (388)
_____________
Net increase (decrease) in net assets resulting from operations (2)
Changes from principal transactions:
Purchase payments --
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 5,150
_____________
Increase in net assets derived from principal transactions 5,150
_____________
Total increase 5,148
_____________
NET ASSETS AT DECEMBER 31, 1997 5,148
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Growth &
Income
Division(e)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $5,173
Net realized gain (loss) on investments (2,689)
Net unrealized appreciation (depreciation) of investments 28,182
_____________
Net increase (decrease) in net assets resulting from operations 30,666
Changes from principal transactions:
Purchase payments 294,490
Contract distributions and terminations (9,417)
Transfer payments from (to) Fixed Account and other Divisions 127,530
_____________
Increase in net assets derived from principal transactions 412,603
_____________
Total increase 443,269
_____________
NET ASSETS AT DECEMBER 31, 1998 $448,417
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Research
Division(d)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $5,891
Net realized gain (loss) on investments (9)
Net unrealized appreciation (depreciation) of investments (3,845)
_____________
Net increase (decrease) in net assets resulting from operations 2,037
Changes from principal transactions:
Purchase payments 31,272
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 225,882
_____________
Increase in net assets derived from principal transactions 257,154
_____________
Total increase 259,191
_____________
NET ASSETS AT DECEMBER 31, 1997 259,191
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Research
Division(d)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $102,772
Net realized gain (loss) on investments 3,010
Net unrealized appreciation (depreciation) of investments 141,414
_____________
Net increase (decrease) in net assets resulting from operations 247,196
Changes from principal transactions:
Purchase payments 360,909
Contract distributions and terminations (45,655)
Transfer payments from (to) Fixed Account and other Divisions 1,657,534
_____________
Increase in net assets derived from principal transactions 1,972,788
_____________
Total increase 2,219,984
_____________
NET ASSETS AT DECEMBER 31, 1998 $2,479,175
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Total
Return
Division(d)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $7,181
Net realized gain (loss) on investments 11
Net unrealized appreciation (depreciation) of investments (1,149)
_____________
Net increase (decrease) in net assets resulting from operations 6,043
Changes from principal transactions:
Purchase payments 17,715
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 225,115
_____________
Increase in net assets derived from principal transactions 242,830
_____________
Total increase 248,873
_____________
NET ASSETS AT DECEMBER 31, 1997 248,873
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Total
Return
Division(d)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $77,712
Net realized gain (loss) on investments 682
Net unrealized appreciation (depreciation) of investments 458
_____________
Net increase (decrease) in net assets resulting from operations 78,852
Changes from principal transactions:
Purchase payments 512,655
Contract distributions and terminations (22,799)
Transfer payments from (to) Fixed Account and other Divisions 902,063
_____________
Increase in net assets derived from principal transactions 1,391,919
_____________
Total increase 1,470,771
_____________
NET ASSETS AT DECEMBER 31, 1998 $1,719,644
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Value +
Growth
Division(k)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($168)
Net realized gain (loss) on investments (15)
Net unrealized appreciation (depreciation) of investments (6,290)
_____________
Net increase (decrease) in net assets resulting from operations (6,473)
Changes from principal transactions:
Purchase payments 46,752
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions --
_____________
Increase in net assets derived from principal transactions 46,752
_____________
Total increase 40,279
_____________
NET ASSETS AT DECEMBER 31, 1997 40,279
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Value +
Growth
Division(k)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $12,257
Net realized gain (loss) on investments (2,543)
Net unrealized appreciation (depreciation) of investments 38,290
_____________
Net increase (decrease) in net assets resulting from operations 48,004
Changes from principal transactions:
Purchase payments 224,415
Contract distributions and terminations (14,318)
Transfer payments from (to) Fixed Account and other Divisions 122,959
_____________
Increase in net assets derived from principal transactions 333,056
_____________
Total increase 381,060
_____________
NET ASSETS AT DECEMBER 31, 1998 $421,339
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Appre-
ciation
Division(h)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $18,921
Net realized gain (loss) on investments 5
Net unrealized appreciation (depreciation) of investments (11,197)
_____________
Net increase (decrease) in net assets resulting from operations 7,729
Changes from principal transactions:
Purchase payments 16,390
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 332,433
_____________
Increase in net assets derived from principal transactions 348,823
_____________
Total increase 356,552
_____________
NET ASSETS AT DECEMBER 31, 1997 356,552
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Appre-
ciation
Division(h)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $76,934
Net realized gain (loss) on investments 1,129
Net unrealized appreciation (depreciation) of investments 251,837
_____________
Net increase (decrease) in net assets resulting from operations 329,900
Changes from principal transactions:
Purchase payments 246,628
Contract distributions and terminations (104,211)
Transfer payments from (to) Fixed Account and other Divisions 2,884,568
_____________
Increase in net assets derived from principal transactions 3,026,985
_____________
Total increase 3,356,885
_____________
NET ASSETS AT DECEMBER 31, 1998 $3,713,437
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
High
Growth
Division(l)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($694)
Net realized gain (loss) on investments (21)
Net unrealized appreciation (depreciation) of investments (1,359)
_____________
Net increase (decrease) in net assets resulting from operations (2,074)
Changes from principal transactions:
Purchase payments 25,235
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 186,535
_____________
Increase in net assets derived from principal transactions 211,770
_____________
Total increase 209,696
_____________
NET ASSETS AT DECEMBER 31, 1997 209,696
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
High
Growth
Division(l)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($14,742)
Net realized gain (loss) on investments 3,082
Net unrealized appreciation (depreciation) of investments 114,108
_____________
Net increase (decrease) in net assets resulting from operations 102,448
Changes from principal transactions:
Purchase payments 29,101
Contract distributions and terminations (103,262)
Transfer payments from (to) Fixed Account and other Divisions 1,366,959
_____________
Increase in net assets derived from principal transactions 1,292,798
_____________
Total increase 1,395,246
_____________
NET ASSETS AT DECEMBER 31, 1998 $1,604,942
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Growth
Division(i)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($1,426)
Net realized gain (loss) on investments (11)
Net unrealized appreciation (depreciation) of investments 9,460
_____________
Net increase (decrease) in net assets resulting from operations 8,023
Changes from principal transactions:
Purchase payments 217,030
Contract distributions and terminations (200)
Transfer payments from (to) Fixed Account and other Divisions 476,090
_____________
Increase in net assets derived from principal transactions 692,920
_____________
Total increase 700,943
_____________
NET ASSETS AT DECEMBER 31, 1997 700,943
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Growth
Division(i)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($12,163)
Net realized gain (loss) on investments 4,062
Net unrealized appreciation (depreciation) of investments 174,548
_____________
Net increase (decrease) in net assets resulting from operations 166,447
Changes from principal transactions:
Purchase payments 192,819
Contract distributions and terminations (81,738)
Transfer payments from (to) Fixed Account and other Divisions 1,582,676
_____________
Increase in net assets derived from principal transactions 1,693,757
_____________
Total increase 1,860,204
_____________
NET ASSETS AT DECEMBER 31, 1998 $2,561,147
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Balanced
Division(j)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($1,777)
Net realized gain (loss) on investments 5
Net unrealized appreciation (depreciation) of investments 8,247
_____________
Net increase (decrease) in net assets resulting from operations 6,475
Changes from principal transactions:
Purchase payments 103,562
Contract distributions and terminations (600)
Transfer payments from (to) Fixed Account and other Divisions 730,435
_____________
Increase in net assets derived from principal transactions 833,397
_____________
Total increase 839,872
_____________
NET ASSETS AT DECEMBER 31, 1997 839,872
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Balanced
Division(j)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($7,361)
Net realized gain (loss) on investments 3,647
Net unrealized appreciation (depreciation) of investments 143,123
_____________
Net increase (decrease) in net assets resulting from operations 139,409
Changes from principal transactions:
Purchase payments 265,944
Contract distributions and terminations (162,374)
Transfer payments from (to) Fixed Account and other Divisions 2,575,782
_____________
Increase in net assets derived from principal transactions 2,679,352
_____________
Total increase 2,818,761
_____________
NET ASSETS AT DECEMBER 31, 1998 $3,658,633
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Conservative
Division(m)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($1,439)
Net realized gain (loss) on investments (11)
Net unrealized appreciation (depreciation) of investments 7,652
_____________
Net increase (decrease) in net assets resulting from operations 6,202
Changes from principal transactions:
Purchase payments 11,009
Contract distributions and terminations (1,648)
Transfer payments from (to) Fixed Account and other Divisions 641,485
_____________
Increase in net assets derived from principal transactions 650,846
_____________
Total increase 657,048
_____________
NET ASSETS AT DECEMBER 31, 1997 657,048
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Conservative
Division(m)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $4,218
Net realized gain (loss) on investments 4,927
Net unrealized appreciation (depreciation) of investments 36,419
_____________
Net increase (decrease) in net assets resulting from operations 45,564
Changes from principal transactions:
Purchase payments 30,578
Contract distributions and terminations (21,156)
Transfer payments from (to) Fixed Account and other Divisions 837,276
_____________
Increase in net assets derived from principal transactions 846,698
_____________
Total increase 892,262
_____________
NET ASSETS AT DECEMBER 31, 1998 $1,549,310
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Income
Division(p)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) --
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
_____________
Net increase (decrease) in net assets resulting from operations --
Changes from principal transactions:
Purchase payments --
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions --
_____________
Increase in net assets derived from principal transactions --
_____________
Total increase --
_____________
NET ASSETS AT DECEMBER 31, 1997 --
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Income
Division(p)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($6)
Net realized gain (loss) on investments 18
Net unrealized appreciation (depreciation) of investments 3,137
_____________
Net increase (decrease) in net assets resulting from operations 3,149
Changes from principal transactions:
Purchase payments 10
Contract distributions and terminations (1,383)
Transfer payments from (to) Fixed Account and other Divisions 155,315
_____________
Increase in net assets derived from principal transactions 153,942
_____________
Total increase 157,091
_____________
NET ASSETS AT DECEMBER 31, 1998 $157,091
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith
Barney
Money
Market
Division(f)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $6,589
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
_____________
Net increase (decrease) in net assets resulting from operations 6,589
Changes from principal transactions:
Purchase payments 3,856,873
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions (3,283,025)
_____________
Increase in net assets derived from principal transactions 573,848
_____________
Total increase 580,437
_____________
NET ASSETS AT DECEMBER 31, 1997 580,437
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith
Barney
Money
Market
Division(f)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $38,681
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
_____________
Net increase (decrease) in net assets resulting from operations 38,681
Changes from principal transactions:
Purchase payments 16,185,163
Contract distributions and terminations (1,865)
Transfer payments from (to) Fixed Account and other Divisions (14,516,270)
_____________
Increase in net assets derived from principal transactions 1,667,028
_____________
Total increase 1,705,709
_____________
NET ASSETS AT DECEMBER 31, 1998 $2,286,146
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith
Barney
Large Cap
Value
Division(g)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($1,020)
Net realized gain (loss) on investments 12
Net unrealized appreciation (depreciation) of investments 11,795
_____________
Net increase (decrease) in net assets resulting from operations 10,787
Changes from principal transactions:
Purchase payments 35,736
Contract distributions and terminations (310)
Transfer payments from (to) Fixed Account and other Divisions 286,757
_____________
Increase in net assets derived from principal transactions 322,183
_____________
Total increase 332,970
_____________
NET ASSETS AT DECEMBER 31, 1997 332,970
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith
Barney
Large Cap
Value
Division(g)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $27,201
Net realized gain (loss) on investments 1,374
Net unrealized appreciation (depreciation) of investments 53,676
_____________
Net increase (decrease) in net assets resulting from operations 82,251
Changes from principal transactions:
Purchase payments 99,461
Contract distributions and terminations (33,049)
Transfer payments from (to) Fixed Account and other Divisions 1,712,477
_____________
Increase in net assets derived from principal transactions 1,778,889
_____________
Total increase 1,861,140
_____________
NET ASSETS AT DECEMBER 31, 1998 $2,194,110
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith
Barney
Inter-
national
Equity
Division(h)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($255)
Net realized gain (loss) on investments (8)
Net unrealized appreciation (depreciation) of investments (1,925)
_____________
Net increase (decrease) in net assets resulting from operations (2,188)
Changes from principal transactions:
Purchase payments 2,279
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 81,637
_____________
Increase in net assets derived from principal transactions 83,916
_____________
Total increase 81,728
_____________
NET ASSETS AT DECEMBER 31, 1997 81,728
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith
Barney
Inter-
national
Equity
Division(h)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($4,401)
Net realized gain (loss) on investments 297
Net unrealized appreciation (depreciation) of investments (6,646)
_____________
Net increase (decrease) in net assets resulting from operations (10,750)
Changes from principal transactions:
Purchase payments 44,293
Contract distributions and terminations (8,720)
Transfer payments from (to) Fixed Account and other Divisions 354,375
_____________
Increase in net assets derived from principal transactions 389,948
_____________
Total increase 379,198
_____________
NET ASSETS AT DECEMBER 31, 1998 $460,926
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith
Barney
High
Income
Division(h)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($183)
Net realized gain (loss) on investments 5
Net unrealized appreciation (depreciation) of investments 1,160
_____________
Net increase (decrease) in net assets resulting from operations 982
Changes from principal transactions:
Purchase payments 3,252
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 49,480
_____________
Increase in net assets derived from principal transactions 52,732
_____________
Total increase 53,714
_____________
NET ASSETS AT DECEMBER 31, 1997 53,714
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith
Barney
High
Income
Division(h)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $6,532
Net realized gain (loss) on investments 289
Net unrealized appreciation (depreciation) of investments (9,106)
_____________
Net increase (decrease) in net assets resulting from operations (2,285)
Changes from principal transactions:
Purchase payments 5,132
Contract distributions and terminations (18,198)
Transfer payments from (to) Fixed Account and other Divisions 305,058
_____________
Increase in net assets derived from principal transactions 291,992
_____________
Total increase 289,707
_____________
NET ASSETS AT DECEMBER 31, 1998 $343,421
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Combined
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $51,790
Net realized gain (loss) on investments 70
Net unrealized appreciation (depreciation) of investments 1,454
_____________
Net increase (decrease) in net assets resulting from operations 53,314
Changes from principal transactions:
Purchase payments 4,764,916
Contract distributions and terminations (2,758)
Transfer payments from (to) Fixed Account and other Divisions 58,831
_____________
Increase in net assets derived from principal transactions 4,820,989
_____________
Total increase 4,874,303
_____________
NET ASSETS AT DECEMBER 31, 1997 4,874,303
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Combined
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $438,347
Net realized gain (loss) on investments 27,611
Net unrealized appreciation (depreciation) of investments 1,013,791
_____________
Net increase (decrease) in net assets resulting from operations 1,479,749
Changes from principal transactions:
Purchase payments 20,182,114
Contract distributions and terminations (709,023)
Transfer payments from (to) Fixed Account and other Divisions 872,059
_____________
Increase in net assets derived from principal transactions 20,345,150
_____________
Total increase 21,824,899
_____________
NET ASSETS AT DECEMBER 31, 1998 $26,699,202
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE 1 - ORGANIZATION
First Golden American Life Insurance Company of New York Separate Account NY-
B (the "Account") was established by First Golden American Life Insurance
Company of New York ("First Golden") to support the operations of variable
annuity contracts ("Contracts"). First Golden is a wholly owned subsidiary of
Golden American Life Insurance Company ("Golden American"), a wholly owned
subsidiary of Equitable of Iowa Companies, Inc. First Golden is primarily
engaged in the issuance of variable insurance products and is licensed as a
stock life insurance company in the states of New York and Delaware.
Operations of the Account commenced on May 19, 1997. The Account is
registered as a unit investment trust with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended. First
Golden provides for variable accumulation and benefits under the contracts by
crediting annuity considerations to one or more divisions within the Account
or the Fixed Separate Account, which is not part of the Account, as directed
by the Contractowners. The portion of the Account's assets applicable to
Contracts will not be chargeable with liabilities arising out of any other
business First Golden may conduct, but obligations of the Account, including
the promise to make benefit payments, are obligations of First Golden. The
assets and liabilities of the Account are clearly identified and
distinguished from the other assets and liabilities of First Golden.
At December 31, 1998, the Account had, under GoldenSelect Contracts ("DVA
Plus"), nineteen investment divisions: Limited Maturity Bond, Hard Assets,
All-Growth, Real Estate, Fully Managed, Multiple Allocation, Capital
Appreciation, Rising Dividends, Emerging Markets, Value Equity, Strategic
Equity, Small Cap, Managed Global, Liquid Asset, Mid-Cap Growth (formerly
OTC), Growth & Income, Research, Total Return, and Value + Growth. The
Account also had, under Empire PrimElite Contracts ("Empire DVA"), thirteen
investment divisions: Appreciation, Select High Growth, Select Growth,
Select Balanced, Select Conservative, Select Income, Smith Barney Money
Market, Smith Barney Large Cap Value (formerly Smith Barney Income and
Growth), Smith Barney International Equity, Smith Barney High Income, Mid-Cap
Growth, Research, and Total Return Divisions (collectively with the divisions
noted above, "Divisions"). The assets in each Division are invested in
shares of a designated series ("Series," which may also be referred to as a
"Portfolio") of mutual funds of The GCG Trust, the Greenwich Street Series
Fund Inc., the Smith Barney Concert Allocation Series Inc. or the Travelers
Series Fund Inc. (the "Trusts"). At December 31, 1998, the following
divisions were available under GoldenSelect Contracts but did not have
investments: Global Fixed Income, Developing World, Growth Opportunities,
PIMCO High Yield Bond, and PIMCO StocksPLUS Growth and Income.
Prior to August 14, 1998, the Account also had certain investment divisions
available from the Equi-Select Series Trust. In an effort to consolidate
operations, First Golden requested permission from the Securities and
Exchange Commission ("SEC") to substitute shares of each Portfolio of the
Equi-Select Series Trust with shares of a similar Series of The GCG Trust. On
August 14, 1998, after approval from the SEC, shares of each Portfolio of the
Equi-Select Series Trust were substituted with shares of a similar Series of
The GCG Trust. The consolidation resulted in the following Series being
substituted from The GCG Trust:
<TABLE>
<CAPTION>
Equi-Select Series Trust The GCG Trust
Investment Division Investment Division
___________________________ ___________________________
<S> <S>
OTC Mid-Cap Growth
Research Research
Total Return Total Return
Value + Growth Value + Growth
</TABLE>
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies of the
Account:
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: Investments are made in shares of a Series or Portfolio of the
Trusts and are valued at the net asset value per share of the respective
Series or Portfolio of the Trusts. Investment transactions in each Series or
Portfolio of the Trusts are recorded on the trade date. Distributions of net
investment income and capital gains from each Series or Portfolio of the
Trusts are recognized on the ex-distribution date. Realized gains and losses
on redemptions of the shares of the Series or Portfolio of the Trusts are
determined on the specific identification basis.
FEDERAL INCOME TAXES: Operations of the Account form a part of, and are
taxed with, the total operations of First Golden which is taxed as a life
insurance company under the Internal Revenue Code. Earnings and realized
capital gains of the Account attributable to the Contractowners are excluded
in the determination of the federal income tax liability of First Golden.
NOTE 3 - CHARGES AND FEES
There are two different death benefit options referred to as Standard and
Annual Ratchet. Under the terms of the Contracts, certain charges are
allocated to the Contracts to cover First Golden's expenses in connection
with the issuance and administration of the Contracts. Following is a
summary of these charges:
MORTALITY AND EXPENSE RISK CHARGES: First Golden assumes mortality and
expense risks related to the operations of the Account and, in accordance
with the terms of the Contracts, deducts a daily charge from the assets of
the Account. Daily charges are deducted at annual rates of 1.10% and 1.25%
of the assets attributable to the Standard and Annual Ratchet, respectively,
to cover these risks.
ASSET BASED ADMINISTRATIVE CHARGES: A daily charge at an annual rate of .15%
of assets attributable to the Contracts is deducted daily.
ADMINISTRATIVE CHARGES: An administrative charge of $30 per Contract year is
deducted from the accumulation value of the Contracts to cover ongoing
administrative expenses. The charge is incurred at the beginning of the
Contract processing period and deducted at the end of the Contract processing
period.
CONTINGENT DEFERRED SALES CHARGES: 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 a premium payment is received. The
Surrender Charge is imposed at a rate of 7% during the first year of purchase
declining to 6%, 5%, 4%, 3%, 2% and 1% in the second, third, fourth, fifth,
sixth, and seventh years, respectively.
PREMIUM TAXES: For certain Contracts, premium taxes are deducted, where
applicable, from the accumulation value of each Contract. The amount and
timing of the payment by First Golden depends on the annuitant's state of
residence and currently ranges up to 3.5% of premiums.
FEES WAIVED: Certain charges and fees for various types of Contracts may be
waived by First Golden. Currently no charges and fees are being waived.
NOTE 4 - PURCHASES AND SALES OF INVESTMENT SECURITIES
The aggregate cost of purchases and proceeds from sales of investments were
as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
___________________________
1998
___________________________
PURCHASES SALES
___________________________
<S> <C> <C>
The GCG Trust:
Limited Maturity Bond Series $235,270 $221,658
Hard Assets Series 14,708 134
All-Growth Series 61,539 1,900
Real Estate Series 38,778 2,124
Fully Managed Series 124,010 2,642
Multiple Allocation Series 343,055 4,237
Capital Appreciation Series 162,917 36,070
Rising Dividends Series 719,476 80,558
Emerging Markets Series 7,711 210
Value Equity Series 87,808 8,564
Strategic Equity Series 40,224 370
Small Cap Series 144,977 3,999
Managed Global Series 128,677 6,075
Liquid Asset Series 568,535 442,884
Mid-Cap Growth Series 696,570 22,376
Growth & Income Series 507,147 89,281
Research Series 2,125,108 47,761
Total Return Series 1,522,048 51,457
Value + Growth Series 374,316 28,818
Greenwich Street Series Fund Inc.:
Appreciation Portfolio 3,149,672 42,817
Smith Barney Concert Allocation Series Inc.:
Select High Growth Portfolio 1,463,771 184,149
Select Growth Portfolio 1,748,031 64,469
Select Balanced Portfolio 2,896,438 223,104
Select Conservative Portfolio 952,350 101,016
Select Income Portfolio 156,208 2,222
Travelers Series Fund Inc.:
Smith Barney Money Market Portfolio 10,349,942 8,643,728
Smith Barney Large Cap Value Portfolio 1,832,568 25,463
Smith Barney International Equity Portfolio 393,338 7,523
Smith Barney High Income Portfolio 339,882 41,154
___________________________
COMBINED $31,185,074 $10,386,763
===========================
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
___________________________
1997
___________________________
PURCHASES SALES
___________________________
<S> <C> <C>
The GCG Trust:
Limited Maturity Bond Series $10,631 $19
Hard Assets Series 5,914 5
All-Growth Series 8,651 16
Real Estate Series 11,586 56
Fully Managed Series 33,599 234
Multiple Allocation Series 27,006 115
Capital Appreciation Series 16,510 57
Rising Dividends Series 161,798 489
Emerging Markets Series 19,032 60
Value Equity Series 41,962 104
Strategic Equity Series 16,993 93
Small Cap Series 45,283 98
Managed Global Series 39,096 132
Liquid Asset Series -- --
Mid-Cap Growth Series 82,349 146
Growth & Income Series 5,553 17
Research Series 263,917 548
Total Return Series 250,608 411
Value + Growth Series 46,747 144
Greenwich Street Series Fund Inc.:
Appreciation Portfolio 368,564 504
Smith Barney Concert Allocation Series Inc.:
Select High Growth Portfolio 211,682 272
Select Growth Portfolio 692,561 658
Select Balanced Portfolio 833,531 1,520
Select Conservative Portfolio 652,178 2,627
Select Income Portfolio -- --
Travelers Series Fund Inc.:
Smith Barney Money Market Portfolio 2,759,578 2,178,683
Smith Barney Large Cap Value Portfolio 322,245 749
Smith Barney International Equity Portfolio 83,926 155
Smith Barney High Income Portfolio 52,776 188
___________________________
COMBINED $7,064,276 $2,188,100
===========================
</TABLE>
NOTE 5 - SUMMARY OF CHANGES FROM UNIT TRANSACTIONS
Contractowners' transactions shown in the following table reflect gross
inflows ("Purchases") and outflows ("Sales") in units for each Division.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
__________________________
1998
__________________________
PURCHASES SALES
__________________________
<S> <C> <C>
Limited Maturity Bond Division 13,900 13,026
Hard Assets Division 769 --
All-Growth Division 4,825 105
Real Estate Division 1,438 86
Fully Managed Division 5,510 80
Multiple Allocation Division 14,526 132
Capital Appreciation Division 6,319 1,571
Rising Dividends Division 31,350 3,619
Emerging Markets Division 1,106 1
Value Equity Division 4,502 464
Strategic Equity Division 2,640 1
Small Cap Division 10,361 265
Managed Global Division 9,472 429
Liquid Asset Division 39,492 30,763
Mid-Cap Growth Division 32,310 1,029
Growth & Income Division 31,543 5,535
Research Division 97,017 2,517
Total Return Division 84,907 3,335
Value + Growth Division 24,811 2,069
Appreciation Division 206,044 6,065
Select High Growth Division 126,910 15,947
Select Growth Division 149,805 4,774
Select Balanced Division 253,839 19,620
Select Conservative Division 82,952 7,887
Select Income Division 13,837 123
Smith Barney Money Market Division 1,056,277 908,145
Smith Barney Large Cap Value Division 96,558 1,398
Smith Barney International Equity Division 26,616 367
Smith Barney High Income Division 24,173 2,838
__________________________
COMBINED 2,453,809 1,032,191
==========================
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
__________________________
1997
__________________________
PURCHASES SALES
__________________________
<S> <C> <C>
Limited Maturity Bond Division 632 --
Hard Assets Division 238 --
All-Growth Division 582 --
Real Estate Division 478 --
Fully Managed Division 1,701 --
Multiple Allocation Division 1,243 --
Capital Appreciation Division 734 --
Rising Dividends Division 8,313 --
Emerging Markets Division 1,812 --
Value Equity Division 2,104 --
Strategic Equity Division 1,265 --
Small Cap Division 3,434 --
Managed Global Division 2,969 --
Liquid Asset Division -- --
Mid-Cap Growth Division 4,268 --
Growth & Income Division 334 --
Research Division 13,748 11
Total Return Division 15,456 --
Value + Growth Division 3,093 --
Appreciation Division 25,446 7
Select High Growth Division 19,327 6
Select Growth Division 63,499 17
Select Balanced Division 76,003 54
Select Conservative Division 59,484 150
Select Income Division -- --
Smith Barney Money Market Division 259,338 206,454
Smith Barney Large Cap Value Division 18,764 22
Smith Barney International Equity Division 6,021 4
Smith Barney High Income Division 3,916 5
__________________________
COMBINED 594,202 206,730
==========================
</TABLE>
NOTE 6 - NET ASSETS
Investments at net asset value less the payable to First Golden American Life
Insurance Company of New York for charges and fees at December 31, 1998
consisted of the following:
<TABLE>
<CAPTION>
Limited
Maturity Hard All- Real
Bond Assets Growth Estate
Division Division Division Division
_____________________________________________________
<S> <C> <C> <C> <C>
Unit transactions $20,564 $18,396 $68,053 $42,330
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 5,009 1,991 13 5,771
Net unrealized appreciation
(depreciation) of
investments (345) (6,021) 13,716 (8,220)
_____________________________________________________
$25,228 $14,366 $81,782 $39,881
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Fully Multiple Capital Rising
Managed Allocation Appreciation Dividends
Division Division Division Division
_____________________________________________________
<S> <C> <C> <C> <C>
Unit transactions $141,308 $329,317 $131,528 $772,760
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 13,509 36,426 10,361 37,168
Net unrealized appreciation
(depreciation) of
investments (7,657) (19,688) (7,541) 4,974
_____________________________________________________
$147,160 $346,055 $134,348 $814,902
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Emerging Value Strategic Small
Markets Equity Equity Cap
Division Division Division Division
_____________________________________________________
<S> <C> <C> <C> <C>
Unit transactions $26,762 $116,073 $52,873 $187,589
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments (423) 3,407 3,902 (1,419)
Net unrealized appreciation
(depreciation) of
investments (7,346) (6,955) (1,123) 21,874
_____________________________________________________
$18,993 $112,525 $55,652 $208,044
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Managed Liquid Mid-Cap Growth &
Global Asset Growth Income
Division Division Division Division
_____________________________________________________
<S> <C> <C> <C> <C>
Unit transactions $153,506 $123,105 $727,899 $417,753
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 7,846 2,482 29,714 2,870
Net unrealized appreciation
(depreciation) of
investments 17,658 -- 40,318 27,794
_____________________________________________________
$179,010 $125,587 $797,931 $448,417
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Total Value +
Reseach Return Growth Appreciation
Division Division Division Division
_____________________________________________________
<S> <C> <C> <C> <C>
Unit transactions $2,229,942 $1,634,749 $379,808 $3,375,808
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 111,664 85,586 9,531 96,989
Net unrealized appreciation
(depreciation) of
investments 137,569 (691) 32,000 240,640
_____________________________________________________
$2,479,175 $1,719,644 $421,339 $3,713,437
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Select Select Select Select
High Growth Growth Balanced Conservative
Division Division Division Division
_____________________________________________________
<S> <C> <C> <C> <C>
Unit transactions $1,504,568 $2,386,677 $3,512,749 $1,497,544
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments (12,375) (9,538) (5,486) 7,695
Net unrealized appreciation
(depreciation) of
investments 112,749 184,008 151,370 44,071
_____________________________________________________
$1,604,942 $2,561,147 $3,658,633 $1,549,310
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Smith Smith Smith
Barney Barney Barney
Select Money Large Cap International
Income Market Value Equity
Division Division Division Division
_____________________________________________________
<S> <C> <C> <C> <C>
Unit transactions $153,942 $2,240,876 $2,101,072 $473,864
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 12 45,270 27,567 (4,367)
Net unrealized appreciation
(depreciation) of
investments 3,137 -- 65,471 (8,571)
_____________________________________________________
$157,091 $2,286,146 $2,194,110 $460,926
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Smith
Barney
High
Income
Division Combined
__________________________
<S> <C> <C>
Unit transactions $344,724 $25,166,139
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 6,643 517,818
Net unrealized appreciation
(depreciation) of
investments (7,946) 1,015,245
__________________________
$343,421 $26,699,202
==========================
</TABLE>
NOTE 7 - UNIT VALUES
Accumulation unit value information (which is based on total assets) for
units outstanding by Contract type as of December 31, 1998 was as follows:
<TABLE>
<CAPTION>
TOTAL UNIT
DIVISION/CONTRACT UNITS UNIT VALUE VALUE
_______________________________________________________________________________
<S> <C> <C> <C>
LIMITED MATURITY BOND
Contracts in accumulation period:
DVA PLUS - Annual Ratchet 1,506 $16.77 $25,271
HARD ASSETS
Contracts in accumulation period:
DVA PLUS - Annual Ratchet 1,007 14.28 14,380
ALL-GROWTH
Contracts in accumulation period:
DVA PLUS - Standard 98 15.66 1,539
DVA PLUS - Annual Ratchet 5,204 15.43 80,275
______________
81,814
REAL ESTATE
Contracts in accumulation period:
DVA PLUS - Standard 356 22.07 7,857
DVA PLUS - Annual Ratchet 1,474 21.74 32,056
______________
39,913
FULLY MANAGED
Contracts in accumulation period:
DVA PLUS - Standard 2,619 20.84 54,594
DVA PLUS - Annual Ratchet 4,512 20.53 92,634
______________
147,228
MULTIPLE ALLOCATION
Contracts in accumulation period:
DVA PLUS - Standard 9,623 22.27 214,273
DVA PLUS - Annual Ratchet 6,014 21.94 131,945
______________
346,218
CAPITAL APPRECIATION
Contracts in accumulation period:
DVA PLUS - Standard 578 24.75 14,312
DVA PLUS - Annual Ratchet 4,904 24.50 120,132
______________
134,444
RISING DIVIDENDS
Contracts in accumulation period:
DVA PLUS - Standard 1,734 22.79 39,507
DVA PLUS - Annual Ratchet 34,310 22.61 775,717
______________
815,224
</TABLE>
<TABLE>
<CAPTION>
TOTAL UNIT
DIVISION/CONTRACT UNITS UNIT VALUE VALUE
_______________________________________________________________________________
<S> <C> <C> <C>
EMERGING MARKETS
Contracts in accumulation period:
DVA PLUS - Annual Ratchet 2,917 $6.51 $19,001
VALUE EQUITY
Contracts in accumulation period:
DVA PLUS - Standard 1,678 18.41 30,885
DVA PLUS - Annual Ratchet 4,464 18.31 81,729
______________
112,614
STRATEGIC EQUITY
Contracts in accumulation period:
DVA PLUS - Standard 2,037 14.30 29,124
DVA PLUS - Annual Ratchet 1,867 14.23 26,560
______________
55,684
SMALL CAP
Contracts in accumulation period:
DVA PLUS - Standard 3,612 15.44 55,752
DVA PLUS - Annual Ratchet 9,918 15.37 152,406
______________
208,158
MANAGED GLOBAL
Contracts in accumulation period:
DVA PLUS - Standard 2,440 15.02 36,651
DVA PLUS - Annual Ratchet 9,572 14.88 142,479
______________
179,130
LIQUID ASSET
Contracts in accumulation period:
DVA PLUS - Standard 2,755 14.54 40,063
DVA PLUS - Annual Ratchet 5,974 14.33 85,588
______________
125,651
MID-CAP GROWTH
Contracts in accumulation period:
DVA PLUS - Standard 2,042 22.60 46,154
DVA PLUS - Annual Ratchet 5,304 22.43 118,939
Empire DVA - Standard 5,635 22.60 127,380
Empire DVA - Annual Ratchet 22,568 22.43 506,113
______________
798,586
</TABLE>
<TABLE>
<CAPTION>
TOTAL UNIT
DIVISION/CONTRACT UNITS UNIT VALUE VALUE
_______________________________________________________________________________
<S> <C> <C> <C>
GROWTH & INCOME
Contracts in accumulation period:
DVA PLUS - Standard 6,031 $17.08 $103,003
DVA PLUS - Annual Ratchet 20,311 17.01 345,505
______________
448,508
RESEARCH
Contracts in accumulation period:
DVA PLUS - Standard 784 23.03 18,057
DVA PLUS - Annual Ratchet 11,227 22.89 257,003
Empire DVA - Standard 25,978 23.03 598,234
Empire DVA - Annual Ratchet 70,248 22.89 1,607,992
______________
2,481,286
TOTAL RETURN
Contracts in accumulation period:
DVA PLUS - Standard 4,266 17.83 76,042
DVA PLUS - Annual Ratchet 24,995 17.72 442,845
Empire DVA - Standard 11,145 17.83 198,699
Empire DVA - Annual Ratchet 56,622 17.72 1,003,204
______________
1,720,790
VALUE + GROWTH
Contracts in accumulation period:
DVA PLUS - Standard 8,286 16.36 135,579
DVA PLUS - Annual Ratchet 17,549 16.29 285,964
______________
421,543
APPRECIATION
Contracts in accumulation period:
Empire DVA - Standard 73,470 16.53 1,214,748
Empire DVA - Annual Ratchet 151,948 16.47 2,501,941
______________
3,716,689
SELECT HIGH GROWTH
Contracts in accumulation period:
Empire DVA - Standard 29,056 12.36 359,169
Empire DVA - Annual Ratchet 101,228 12.33 1,247,673
______________
1,606,842
</TABLE>
<TABLE>
<CAPTION>
TOTAL UNIT
DIVISION/CONTRACT UNITS UNIT VALUE VALUE
_______________________________________________________________________________
<S> <C> <C> <C>
SELECT GROWTH
Contracts in accumulation period:
Empire DVA - Standard 30,896 $12.32 $380,776
Empire DVA - Annual Ratchet 177,617 12.29 2,182,748
______________
2,563,524
SELECT BALANCED
Contracts in accumulation period:
Empire DVA - Standard 73,693 11.83 871,589
Empire DVA - Annual Ratchet 236,475 11.79 2,788,778
______________
3,660,367
SELECT CONSERVATIVE
Contracts in accumulation period:
Empire DVA - Standard 48,704 11.55 562,685
Empire DVA - Annual Ratchet 85,695 11.52 987,187
______________
1,549,872
SELECT INCOME
Contracts in accumulation period:
Empire DVA - Standard 2,546 11.49 29,244
Empire DVA - Annual Ratchet 11,168 11.45 127,897
______________
157,141
SMITH BARNEY MONEY MARKET
Contracts in accumulation period:
Empire DVA - Standard 35,357 11.43 404,147
Empire DVA - Annual Ratchet 165,659 11.37 1,882,962
______________
2,287,109
SMITH BARNEY LARGE CAP VALUE
Contracts in accumulation period:
Empire DVA - Standard 36,973 19.35 715,300
Empire DVA - Annual Ratchet 76,929 19.24 1,480,158
______________
2,195,458
SMITH BARNEY INTERNATIONAL EQUITY
Contracts in accumulation period:
Empire DVA - Standard 8,768 14.35 125,840
Empire DVA - Annual Ratchet 23,498 14.28 335,464
______________
461,304
</TABLE>
<TABLE>
<CAPTION>
TOTAL UNIT
DIVISION/CONTRACT UNITS UNIT VALUE VALUE
_______________________________________________________________________________
<S> <C> <C> <C>
SMITH BARNEY HIGH INCOME
Contracts in accumulation period:
Empire DVA - Standard 9,401 $13.66 $128,417
Empire DVA - Annual Ratchet 15,845 13.58 215,247
______________
343,664
____________ ______________
COMBINED 1,809,090 $26,717,413
============ ==============
</TABLE>
<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.
A-1
<PAGE>
<PAGE>
Statement of Additional Information
EMPIRE PRIMELITE
DEFERRED COMBINATION VARIABLEAND FIXED ANNUITY CONTRACT
ISSUED BYSEPARATE ACCOUNT NY-B("Account NY-B" or the "Account")
OFFIRST GOLDEN AMERICAN LIFE INSURANCECOMPANY 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 10169-0999 or telephone 1-800-963-9539.
DATE OF PROSPECTUS AND
STATEMENT OF ADDITIONAL INFORMATION:
MAY 1, 1999
<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...................................... 1
IRA Partial Withdrawal Option................................ 5
Other Information............................................ 6
Financial Statements of Separate Account NY-B................ 6
Appendix - Description of Bond Ratings...................... A-1
i
<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"). On
August 13, 1996, Equitable of Iowa Companies, Inc. (formerly
Equitable of Iowa Companies) ("Equitable of Iowa") acquired all of
the interest in Golden American and Directed Services, Inc. On
October 24, 1997, Equitable of Iowa and ING Groep N.V. ("ING")
completed a merger agreement, and Equitable of Iowa became a wholly
owned subsidiary of ING. ING, headquartered in The Netherlands, is a
global financial services holding company with over $461.8 billion in
assets as of December 31, 1998. As of December 31, 1998, First
Golden has approximately $66 million in total assets. First Golden
is licensed to do variable annuity business in the states of Delaware
and New York.
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. .
First Golden entered into a similar agreement with another affiliate,
Equitable Life Insurance Company of Iowa ("Equitable Life"), for
additional services. For the years ended December 31, 1998 and 1997,
First Golden incurred expenses of $248,000 and $24,000, respectively,
under the agreement with Golden American and $165,000 and $29,000,
respectively, under the agreement with Equitable Life.
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. For the
year ended December 31, 1998, charges to Golden American and DSI for
these services were $210,000 and $75,000, respectively.
INDEPENDENT AUDITORS
Ernst & Young LLP, independent auditors, performs annual audits of
First Golden and Account NY-B.
DISTRIBUTION OF CONTRACTS
The offering of contracts under the prospectus associated with this
Statement of Additional Information is continuous. Directed
Services, Inc., an affiliate of First Golden American, 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 American. The variable
insurance products were sold primarily through two broker/dealer
institutions during the year ended December 31, 1996, through two
broker/dealer institutions during the year ended December 31, 1997
and through two broker/dealer institutions during the year ended
December 31, 1998. For the years ended 1998, and 1997 commissions
paid by First Golden to Directed Services, Inc. aggregated $1,754,000
and $408,000 respectively. All commissions received by the
distributor were passed through to the broker-dealers who sold the
contracts. Directed Services, Inc. is located at 1475 Dunwoody
Drive, West Chester, Pennsylvania 19380-1478.
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. DSI paid to First Golden a fee calculated
as a percentage of average net assets in the variable separate
account of $75,000 for the year ended 1998.
1
<PAGE>
<PAGE>
PERFORMANCE INFORMATION
Performance information for the subaccounts of Account NY-B,
including the yield and effective yield of the Money Market
Portfolio, the yield of the remaining subaccounts, and the total
return of all subaccounts, 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 SUBACCOUNT YIELDS
Current yield for the Liquid Asset Subaccount will be based on the
change in the value of a hypothetical investment (exclusive of
capital changes or income other than investment income) over a
particular 7-day period, less a pro-rata share of subaccount 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 Subaccount
for the 7-day period December 25, 1998 to December 31, 1998 were
3.13% and 3.06%, respectively.
SEC STANDARD 30-DAY YIELD FOR ALL SUBACCOUNTS
Quotations of yield for the remaining subaccounts will be based on
all investment income per Unit (contract value divided by the index
of investment experience) earned during a particular 30-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 Investment portfolio attributable to
shares owned by a subaccount
[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 subaccounts of Account NY-B is earned from the increase in
net asset value of shares of the Investment portfolio in which the
Subaccount invests and from dividends declared and paid by the
Investment portfolio, which are automatically reinvested in shares of
the Investment portfolio.
SEC STANDARD AVERAGE ANNUAL TOTAL RETURN FOR ALL SUBACCOUNTS
Quotations of average annual total return for any Subaccount 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 investment
portfolio), 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
2
<PAGE>
<PAGE>
(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)
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 Annual Total Return for the subaccounts presented on a
standardized basis, which includes deductions for the mortality and
expense risk charge, administrative charge, contract charge and
surrender charge for the year ending December 31, 1998 were as
follows:
Average Annual Total Return for Periods Ending 12/31/98 - Standardized
- ----------------------------------------------------------------------
One Year Period Inception to Subaccount
Ended 12/31/98 12/31/98 Inception Date
--------------- ------------ --------------
THE GCG TRUST
Mid-Cap Portfolio 15.00% 20.58%* 10/07/94
Research Portfolio 15.24% 21.17%* 10/07/94
Total Return Portfolio 3.94%* 13.94%* 10/07/94
TRAVELERS INVESTMENT
PORTFOLIO FUND INC.
Smith Barney Large Cap
Value Portfolio 2.21% 18.40% 04/05/95
Smith Barney International
Equity Portfolio -1.07% 9.03% 03/27/95
Smith Barney High Income
Portfolio -7.06% 7.74% 04/28/95
Smith Barney Money Market
Portfolio -2.49% 2.52% 05/24/95
GREENWICH INVESTMENT
PORTFOLIO FUND
Appreciation Portfolio 11.40% 18.29% 03/22/96
SMITH BARNEY CONCERT
ALLOCATION INVESTMENT
PORTFOLIO INC.
Select High Growth 7.68% 17.59% 02/05/97
Select Growth 6.28% 18.07% 02/05/97
Select Balanced 1.91% 13.35% 02/05/97
Select Conservative -1.40% 9.79% 02/05/97
Select Income -1.98% 8.73% 02/05/97
_________________________
* Total return calculation reflects partial waiver of fees and expenses.
# Non-annualized.
NON-STANDARD AVERAGE ANNUAL TOTAL RETURN FOR ALL SUBACCOUNTS
Quotations of non-standard average annual total return for any
subaccount 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 Investment portfolio), 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
3
<PAGE>
<PAGE>
(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)
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 Annual Total Return for the subaccounts presented on a non-
standardized basis which includes deductions for the mortality and
expense risk charge, administrative charge, contract charge and
surrender charge for the year ending December 31, 1998 were as
follows:
Average Annual Total Return for Periods Ending 12/31/98 - Non-Standardized
One Year Period Inception to Subaccount
Ended 12/31/98 12/31/98 Inception Date
--------------- ------------ --------------
THE GCG TRUST
Mid-Cap Portfolio 21.09% 21.01%* 10/07/94
Research Portfolio 21.33% 21.59%* 10/07/94
Total Return Portfolio 10.03%* 14.46%* 10/07/94
TRAVELERS INVESTMENT
PORTFOLIO FUND INC.
Smith Barney Large Cap
Value Portfolio 8.29% 19.11% 04/05/95
Smith Barney International
Equity Portfolio 5.02% 9.91% 03/27/95
Smith Barney High Income
Portfolio -0.97% 8.68% 04/28/95
Smith Barney Money Market
Portfolio 3.60% 3.61% 05/24/95
GREENWICH INVESTMENT
PORTFOLIO FUND
Appreciation Portfolio 17.49% 19.66% 03/22/96
SMITH BARNEY CONCERT
ALLOCATION INVESTMENT
PORTFOLIO INC.
Select High Growth 13.77% 11.83% 02/05/97
Select Growth 12.37% 12.05% 02/05/97
Select Balanced 8.00% 9.79% 02/05/97
Select Conservative 4.69% 8.06% 02/05/97
Select Income 4.11% 7.54% 02/05/97
_________________________
* Total return calculation reflects partial waiver of fees and expenses.
# Non-annualized.
Performance information for a Subaccount 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 Subaccount'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 Subaccount reflects only the
performance of a hypothetical contract under which contract value is
allocated to a Subaccount 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 Investment
portfolio of the trust in which the Account NY-B Subaccounts invest,
4
<PAGE>
<PAGE>
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 Subaccount 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.
ACCUMULATION UNIT VALUE
The calculation of the Accumulation Unit Value ("AUV") is discussed
in the prospectus for the Contracts under Measurement of Investment
Experience. Note that in your Contract, accumulation unit value is
referred to as the Index of Investment Experience. The following
illustrations show a calculation of a new AUV 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 AUV's or contract
values.
ILLUSTRATION OF CALCULATION OF AUV
EXAMPLE 1.
1. AUV, 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 0.00003446
6. Less asset based administrative charge 0.00000411
7. Net investment return (4) minus (5) minus (6) 0.00996164
8. Net investment factor (1.000000) plus (7) 1.00996164
9. AUV, end of period (1) multiplied by (8) 10.09961644
ILLUSTRATION OF PURCHASE OF UNITS (ASSUMING NO STATE PREMIUM TAX)
EXAMPLE 2.
1. Initial Premium Payment $ 1,000
2. AUV on effective date of purchase (see Example 1) $ 10.00
3. Number of Units purchased [(1) divided by (2)] 100
4. AUV for valuation date following purchase (see
Example 1) $ 10.0996164
5. Contract value in account for valuation date
following purchase [(3) multiplied by (4)] $ 1,009.96
IRA PARTIAL WITHDRAWAL OPTION
If the contract owner has an IRA contract and will attain age 70 1/2
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 1/2. 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 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.
5
<PAGE>
<PAGE>
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 1/2 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
contract value by the life expectancy. In the first year withdrawals
begin, we use the contract value as of the date of the first payment.
Thereafter, we use the contract 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
The audited financial statements of Separate Account NY-B are listed
below and are included in this Statement of Additional Information:
Report of Independent Auditors
Audited Financial Statements
Statement of Assets and Liability as of December 31, 1998
Statement of Operations for the year ended December 31, 1998
Statements of Changes in Net Assets for the year ended
December 31, 1998 and the period ended December 31, 1997
Notes to Financial Statements
6
<PAGE>
<PAGE>
FINANCIAL STATEMENTS
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY
OF NEW YORK
SEPARATE ACCOUNT NY-B
YEAR ENDED DECEMBER 31, 1998
AND FOR THE PERIOD MAY 19, 1997
(COMMENCEMENT OF OPERATIONS)
THROUGH DECEMBER 31, 1997
WITH REPORT OF INDEPENDENT AUDITORS
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD MAY 19, 1997 (COMMENCEMENT OF OPERATIONS)
THROUGH DECEMBER 31, 1997
TABLE OF CONTENTS
Report of Independent Auditors
Audited Financial Statements
Statement of Assets and Liability
Statement of Operations
Statements of Changes in Net Assets
Notes to Financial Statements
Report of Independent Auditors
The Board of Directors
First Golden American Life Insurance Company of New York
We have audited the accompanying statement of assets and liability of First
Golden American Life Insurance Company of New York Separate Account NY-B as
of December 31, 1998, and the related statements of operations for the year
then ended and the changes in net assets for the year ended December 31, 1998
and for the period May 19, 1997 (commencement of operations) through
December 31, 1997. These financial statements are the responsibility of the
Account's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits 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.
Our procedures included confirmation of securities owned as of December 31,
1998, by correspondence with the custodian. 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 Separate Account NY-B at December 31, 1998, and
the results of its operations for the year then ended and the changes in its
net assets for the year ended December 31, 1998 and for the period May 19,
1997 (commencement of operations) through December 31, 1997 in conformity
with generally accepted accounting principles.
/S/ Ernst & Young LLP
Des Moines, Iowa
February 25, 1999
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF ASSETS AND LIABILITY
DECEMBER 31, 1998
<TABLE>
<CAPTION>
COMBINED
_____________
<S> <C>
ASSETS
Investments at net asset value:
The GCG Trust:
Limited Maturity Bond Series,
2,366 shares (cost - $25,616) $25,271
Hard Assets Series,
1,498 shares (cost - $20,401) 14,380
All-Growth Series,
5,458 shares (cost - $68,098) 81,814
Real Estate Series,
2,939 shares (cost - $48,133) 39,913
Fully Managed Series,
9,667 shares (cost - $154,885) 147,228
Multiple Allocation Series,
27,326 shares (cost - $365,906) 346,218
Capital Appreciation Series,
7,432 shares (cost - $141,985) 134,444
Rising Dividends Series,
37,039 shares (cost - $810,250) 815,224
Emerging Markets Series,
2,844 shares (cost - $26,347) 19,001
Value Equity Series,
7,092 shares (cost - $119,569) 112,614
Strategic Equity Series,
4,343 shares (cost - $56,807) 55,684
Small Cap Series,
12,986 shares (cost - $186,284) 208,158
Managed Global Series,
12,624 shares (cost - $161,472) 179,130
Liquid Asset Series,
125,651 shares (cost - $125,651) 125,651
Mid-Cap Growth Series,
44,121 shares (cost - $758,268) 798,586
Growth & Income Series,
28,714 shares (cost - $420,714) 448,508
Research Series,
122,171 shares (cost - $2,343,717) 2,481,286
Total Return Series,
108,899 shares (cost - $1,721,481) 1,720,790
Value + Growth Series,
26,987 shares (cost - $389,543) 421,543
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF ASSETS AND LIABILITY
DECEMBER 31, 1998
(CONTINUED)
<TABLE>
<CAPTION>
COMBINED
_____________
<S> <C>
ASSETS - Continued
Greenwich Street Series Fund Inc.:
Appreciation Portfolio,
175,647 shares (cost - $3,476,049) $3,716,689
Smith Barney Concert Allocation Series Inc.:
Select High Growth Portfolio,
127,628 shares (cost - $1,494,093) 1,606,842
Select Growth Portfolio,
204,918 shares (cost - $2,379,516) 2,563,524
Select Balanced Portfolio,
306,820 shares (cost - $3,508,997) 3,660,367
Select Conservative Portfolio,
133,265 shares (cost - $1,505,801) 1,549,872
Select Income Portfolio,
13,570 shares (cost - 154,004) 157,141
Travelers Series Fund Inc.:
Smith Barney Money Market Portfolio,
2,287,109 shares (cost - $2,287,109) 2,287,109
Smith Barney Large Cap Value Portfolio,
108,632 shares (cost - $2,129,987) 2,195,458
Smith Barney International Equity Portfolio,
33,574 shares (cost - $469,875) 461,304
Smith Barney High Income Portfolio,
27,146 shares (cost - $351,610) 343,664
_____________
TOTAL ASSETS (cost - $25,702,168) 26,717,413
LIABILITY
Payable to First Golden American Life Insurance Company of
New York for charges and fees 18,211
_____________
TOTAL NET ASSETS $26,699,202
=============
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
<TABLE>
<CAPTION>
Limited
Maturity Hard All-
Bond Assets Growth
Division Division Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $4,057 $807 --
Capital gains distributions -- 518 $470
______________________________________
TOTAL INVESTMENT INCOME 4,057 1,325 470
Expenses:
Mortality and expense risk and
other charges 988 140 432
Annual administrative charges 44 14 34
Contingent deferred sales charges 8 -- 12
______________________________________
TOTAL EXPENSES 1,040 154 478
______________________________________
NET INVESTMENT INCOME (LOSS) 3,017 1,171 (8)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 1,392 (82) (177)
Net unrealized appreciation
(depreciation) of investments 203 (5,017) 14,043
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $4,612 ($3,928) $13,858
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Real Fully Multiple
Estate Managed Allocation
Division Division Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $1,915 $4,319 $17,406
Capital gains distributions 3,602 8,029 18,777
______________________________________
TOTAL INVESTMENT INCOME 5,517 12,348 36,183
Expenses:
Mortality and expense risk and
other charges 335 1,241 1,880
Annual administrative charges 34 102 193
Contingent deferred sales charges 29 -- --
______________________________________
TOTAL EXPENSES 398 1,343 2,073
______________________________________
NET INVESTMENT INCOME (LOSS) 5,119 11,005 34,110
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (57) 140 189
Net unrealized appreciation
(depreciation) of investments (8,862) (7,735) (18,339)
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($3,800) $3,410 $15,960
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Capital Rising Emerging
Appreciation Dividends Markets
Division Division Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $1,695 $3,635 --
Capital gains distributions 9,864 26,986 --
______________________________________
TOTAL INVESTMENT INCOME 11,559 30,621 --
Expenses:
Mortality and expense risk and
other charges 1,035 6,073 $221
Annual administrative charges 99 367 8
Contingent deferred sales charges 27 74 --
______________________________________
TOTAL EXPENSES 1,161 6,514 229
______________________________________
NET INVESTMENT INCOME (LOSS) 10,398 24,107 (229)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (1,319) 9,972 (111)
Net unrealized appreciation
(depreciation) of investments (7,271) (683) (4,156)
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $1,808 $33,396 ($4,496)
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Value Strategic Small
Equity Equity Cap
Division Division Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $2,451 $1,485 --
Capital gains distributions 902 2,075 --
______________________________________
TOTAL INVESTMENT INCOME 3,353 3,560 --
Expenses:
Mortality and expense risk and
other charges 1,136 436 $1,216
Annual administrative charges 93 30 118
Contingent deferred sales charges 227 -- 64
______________________________________
TOTAL EXPENSES 1,456 466 1,398
______________________________________
NET INVESTMENT INCOME (LOSS) 1,897 3,094 (1,398)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (1,535) 43 108
Net unrealized appreciation
(depreciation) of investments (3,654) (2,309) 22,839
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($3,292) $828 $21,549
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Managed Liquid Mid-Cap
Global Asset Growth
Division Division(b) Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $2,457 $3,454 $31,084
Capital gains distributions 4,935 -- --
______________________________________
TOTAL INVESTMENT INCOME 7,392 3,454 31,084
Expenses:
Mortality and expense risk and
other charges 1,535 903 4,897
Annual administrative charges 126 65 629
Contingent deferred sales charges 131 4 383
______________________________________
TOTAL EXPENSES 1,792 972 5,909
______________________________________
NET INVESTMENT INCOME (LOSS) 5,600 2,482 25,175
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (94) -- 1,857
Net unrealized appreciation
(depreciation) of investments 21,964 -- 43,328
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $27,470 $2,482 $70,360
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Growth & Total
Income Research Return
Division Division Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $7,709 $122,748 $92,006
Capital gains distributions -- -- --
______________________________________
TOTAL INVESTMENT INCOME 7,709 122,748 92,006
Expenses:
Mortality and expense risk and
other charges 2,370 16,675 12,840
Annual administrative charges 98 2,191 1,186
Contingent deferred sales charges 68 1,110 268
______________________________________
TOTAL EXPENSES 2,536 19,976 14,294
______________________________________
NET INVESTMENT INCOME (LOSS) 5,173 102,772 77,712
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (2,689) 3,010 682
Net unrealized appreciation
(depreciation) of investments 28,182 141,414 458
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $30,666 $247,196 $78,852
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Value + High
Growth Appreciation Growth
Division Division Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $15,295 $22,592 $7,182
Capital gains distributions -- 89,080 --
______________________________________
TOTAL INVESTMENT INCOME 15,295 111,672 7,182
Expenses:
Mortality and expense risk and
other charges 2,639 27,089 13,467
Annual administrative charges 205 3,339 2,037
Contingent deferred sales charges 194 4,310 6,420
______________________________________
TOTAL EXPENSES 3,038 34,738 21,924
______________________________________
NET INVESTMENT INCOME (LOSS) 12,257 76,934 (14,742)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (2,543) 1,129 3,082
Net unrealized appreciation
(depreciation) of investments 38,290 251,837 114,108
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $48,004 $329,900 $102,448
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select Select Select
Growth Balanced Conservative
Division Division Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $16,153 $34,434 $18,972
Capital gains distributions -- -- --
______________________________________
TOTAL INVESTMENT INCOME 16,153 34,434 18,972
Expenses:
Mortality and expense risk and
other charges 22,122 29,596 14,092
Annual administrative charges 2,513 1,809 611
Contingent deferred sales charges 3,681 10,390 51
______________________________________
TOTAL EXPENSES 28,316 41,795 14,754
______________________________________
NET INVESTMENT INCOME (LOSS) (12,163) (7,361) 4,218
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 4,062 3,647 4,927
Net unrealized appreciation
(depreciation) of investments 174,548 143,123 36,419
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $166,447 $139,409 $45,564
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith Smith
Barney Barney
Select Money Large Cap
Income Market Value
Division(a) Division Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $945 $54,079 $12,948
Capital gains distributions -- -- 32,373
______________________________________
TOTAL INVESTMENT INCOME 945 54,079 45,321
Expenses:
Mortality and expense risk and
other charges 901 14,886 16,479
Annual administrative charges 50 512 1,358
Contingent deferred sales charges -- -- 283
______________________________________
TOTAL EXPENSES 951 15,398 18,120
______________________________________
NET INVESTMENT INCOME (LOSS) (6) 38,681 27,201
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 18 -- 1,374
Net unrealized appreciation
(depreciation) of investments 3,137 -- 53,676
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $3,149 $38,681 $82,251
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith Smith
Barney Barney
International High
Equity Income
Division Division Combined
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends -- $8,243 $488,071
Capital gains distributions -- 1,897 199,508
______________________________________
TOTAL INVESTMENT INCOME -- 10,140 687,579
Expenses:
Mortality and expense risk and
other charges $3,665 2,436 201,725
Annual administrative charges 366 243 18,474
Contingent deferred sales charges 370 929 29,033
______________________________________
TOTAL EXPENSES 4,401 3,608 249,232
______________________________________
NET INVESTMENT INCOME (LOSS) (4,401) 6,532 438,347
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 297 289 27,611
Net unrealized appreciation
(depreciation) of investments (6,646) (9,106) 1,013,791
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($10,750) ($2,285) $1,479,749
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
<TABLE>
<CAPTION>
Limited
Maturity
Bond
Division(n)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $600
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments (548)
_____________
Net increase (decrease) in net assets resulting from operations 52
Changes from principal transactions:
Purchase payments 10,001
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions --
_____________
Increase in net assets derived from principal transactions 10,001
_____________
Total increase 10,053
_____________
NET ASSETS AT DECEMBER 31, 1997 10,053
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Limited
Maturity
Bond
Division(n)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $3,017
Net realized gain (loss) on investments 1,392
Net unrealized appreciation (depreciation) of investments 203
_____________
Net increase (decrease) in net assets resulting from operations 4,612
Changes from principal transactions:
Purchase payments 4,243
Contract distributions and terminations (5,921)
Transfer payments from (to) Fixed Account and other Divisions 12,241
_____________
Increase in net assets derived from principal transactions 10,563
_____________
Total increase 15,175
_____________
NET ASSETS AT DECEMBER 31, 1998 $25,228
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Hard
Assets
Division(o)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $902
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments (1,004)
_____________
Net increase (decrease) in net assets resulting from operations (102)
Changes from principal transactions:
Purchase payments 4,999
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions --
_____________
Increase in net assets derived from principal transactions 4,999
_____________
Total increase 4,897
_____________
NET ASSETS AT DECEMBER 31, 1997 4,897
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Hard
Assets
Division(o)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $1,171
Net realized gain (loss) on investments (82)
Net unrealized appreciation (depreciation) of investments (5,017)
_____________
Net increase (decrease) in net assets resulting from operations (3,928)
Changes from principal transactions:
Purchase payments 10,986
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 2,411
_____________
Increase in net assets derived from principal transactions 13,397
_____________
Total increase 9,469
_____________
NET ASSETS AT DECEMBER 31, 1998 $14,366
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
All-
Growth
Division(e)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $197
Net realized gain (loss) on investments 1
Net unrealized appreciation (depreciation) of investments (327)
_____________
Net increase (decrease) in net assets resulting from operations (129)
Changes from principal transactions:
Purchase payments 5,000
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 3,429
_____________
Increase in net assets derived from principal transactions 8,429
_____________
Total increase 8,300
_____________
NET ASSETS AT DECEMBER 31, 1997 8,300
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
All-
Growth
Division(e)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($8)
Net realized gain (loss) on investments (177)
Net unrealized appreciation (depreciation) of investments 14,043
_____________
Net increase (decrease) in net assets resulting from operations 13,858
Changes from principal transactions:
Purchase payments 52,783
Contract distributions and terminations (2,091)
Transfer payments from (to) Fixed Account and other Divisions 8,932
_____________
Increase in net assets derived from principal transactions 59,624
_____________
Total increase 73,482
_____________
NET ASSETS AT DECEMBER 31, 1998 $81,782
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Real
Estate
Division(a)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $703
Net realized gain (loss) on investments 6
Net unrealized appreciation (depreciation) of investments 642
_____________
Net increase (decrease) in net assets resulting from operations 1,351
Changes from principal transactions:
Purchase payments 8,370
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 2,450
_____________
Increase in net assets derived from principal transactions 10,820
_____________
Total increase 12,171
_____________
NET ASSETS AT DECEMBER 31, 1997 12,171
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Real
Estate
Division(a)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $5,119
Net realized gain (loss) on investments (57)
Net unrealized appreciation (depreciation) of investments (8,862)
_____________
Net increase (decrease) in net assets resulting from operations (3,800)
Changes from principal transactions:
Purchase payments 23,949
Contract distributions and terminations (1,942)
Transfer payments from (to) Fixed Account and other Divisions 9,503
_____________
Increase in net assets derived from principal transactions 31,510
_____________
Total increase 27,710
_____________
NET ASSETS AT DECEMBER 31, 1998 $39,881
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Fully
Managed
Division(a)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $2,352
Net realized gain (loss) on investments 12
Net unrealized appreciation (depreciation) of investments 78
_____________
Net increase (decrease) in net assets resulting from operations 2,442
Changes from principal transactions:
Purchase payments 26,106
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 4,900
_____________
Increase in net assets derived from principal transactions 31,006
_____________
Total increase 33,448
_____________
NET ASSETS AT DECEMBER 31, 1997 33,448
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Fully
Managed
Division(a)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $11,005
Net realized gain (loss) on investments 140
Net unrealized appreciation (depreciation) of investments (7,735)
_____________
Net increase (decrease) in net assets resulting from operations 3,410
Changes from principal transactions:
Purchase payments 75,951
Contract distributions and terminations (2,915)
Transfer payments from (to) Fixed Account and other Divisions 37,266
_____________
Increase in net assets derived from principal transactions 110,302
_____________
Total increase 113,712
_____________
NET ASSETS AT DECEMBER 31, 1998 $147,160
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Multiple
Allocation
Division(a)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $2,119
Net realized gain (loss) on investments 8
Net unrealized appreciation (depreciation) of investments (1,349)
_____________
Net increase (decrease) in net assets resulting from operations 778
Changes from principal transactions:
Purchase payments 22,315
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 2,450
_____________
Increase in net assets derived from principal transactions 24,765
_____________
Total increase 25,543
_____________
NET ASSETS AT DECEMBER 31, 1997 25,543
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Multiple
Allocation
Division(a)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $34,110
Net realized gain (loss) on investments 189
Net unrealized appreciation (depreciation) of investments (18,339)
_____________
Net increase (decrease) in net assets resulting from operations 15,960
Changes from principal transactions:
Purchase payments 102,392
Contract distributions and terminations (2,978)
Transfer payments from (to) Fixed Account and other Divisions 205,138
_____________
Increase in net assets derived from principal transactions 304,552
_____________
Total increase 320,512
_____________
NET ASSETS AT DECEMBER 31, 1998 $346,055
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Capital
Appreciation
Division(c)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $1,278
Net realized gain (loss) on investments 4
Net unrealized appreciation (depreciation) of investments (270)
_____________
Net increase (decrease) in net assets resulting from operations 1,012
Changes from principal transactions:
Purchase payments 15,165
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions --
_____________
Increase in net assets derived from principal transactions 15,165
_____________
Total increase 16,177
_____________
NET ASSETS AT DECEMBER 31, 1997 16,177
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Capital
Appreciation
Division(c)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $10,398
Net realized gain (loss) on investments (1,319)
Net unrealized appreciation (depreciation) of investments (7,271)
_____________
Net increase (decrease) in net assets resulting from operations 1,808
Changes from principal transactions:
Purchase payments 106,557
Contract distributions and terminations (2,271)
Transfer payments from (to) Fixed Account and other Divisions 12,077
_____________
Increase in net assets derived from principal transactions 116,363
_____________
Total increase 118,171
_____________
NET ASSETS AT DECEMBER 31, 1998 $134,348
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Rising
Dividends
Division(a)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $3,038
Net realized gain (loss) on investments 51
Net unrealized appreciation (depreciation) of investments 5,657
_____________
Net increase (decrease) in net assets resulting from operations 8,746
Changes from principal transactions:
Purchase payments 146,447
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 11,767
_____________
Increase in net assets derived from principal transactions 158,214
_____________
Total increase 166,960
_____________
NET ASSETS AT DECEMBER 31, 1997 166,960
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Rising
Dividends
Division(a)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $24,107
Net realized gain (loss) on investments 9,972
Net unrealized appreciation (depreciation) of investments (683)
_____________
Net increase (decrease) in net assets resulting from operations 33,396
Changes from principal transactions:
Purchase payments 502,600
Contract distributions and terminations (30,903)
Transfer payments from (to) Fixed Account and other Divisions 142,849
_____________
Increase in net assets derived from principal transactions 614,546
_____________
Total increase 647,942
_____________
NET ASSETS AT DECEMBER 31, 1998 $814,902
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Emerging
Markets
Division(e)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($68)
Net realized gain (loss) on investments (15)
Net unrealized appreciation (depreciation) of investments (3,190)
_____________
Net increase (decrease) in net assets resulting from operations (3,273)
Changes from principal transactions:
Purchase payments 17,317
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 1,717
_____________
Increase in net assets derived from principal transactions 19,034
_____________
Total increase 15,761
_____________
NET ASSETS AT DECEMBER 31, 1997 15,761
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Emerging
Markets
Division(e)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($229)
Net realized gain (loss) on investments (111)
Net unrealized appreciation (depreciation) of investments (4,156)
_____________
Net increase (decrease) in net assets resulting from operations (4,496)
Changes from principal transactions:
Purchase payments 3,608
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 4,120
_____________
Increase in net assets derived from principal transactions 7,728
_____________
Total increase 3,232
_____________
NET ASSETS AT DECEMBER 31, 1998 $18,993
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Value
Equity
Division(d)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $3,043
Net realized gain (loss) on investments 2
Net unrealized appreciation (depreciation) of investments (3,301)
_____________
Net increase (decrease) in net assets resulting from operations (256)
Changes from principal transactions:
Purchase payments 38,774
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions --
_____________
Increase in net assets derived from principal transactions 38,774
_____________
Total increase 38,518
_____________
NET ASSETS AT DECEMBER 31, 1997 38,518
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Value
Equity
Division(d)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $1,897
Net realized gain (loss) on investments (1,535)
Net unrealized appreciation (depreciation) of investments (3,654)
_____________
Net increase (decrease) in net assets resulting from operations (3,292)
Changes from principal transactions:
Purchase payments 71,576
Contract distributions and terminations (7,632)
Transfer payments from (to) Fixed Account and other Divisions 13,355
_____________
Increase in net assets derived from principal transactions 77,299
_____________
Total increase 74,007
_____________
NET ASSETS AT DECEMBER 31, 1998 $112,525
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Strategic
Equity
Division(a)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $755
Net realized gain (loss) on investments 10
Net unrealized appreciation (depreciation) of investments 1,186
_____________
Net increase (decrease) in net assets resulting from operations 1,951
Changes from principal transactions:
Purchase payments 13,676
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 2,450
_____________
Increase in net assets derived from principal transactions 16,126
_____________
Total increase 18,077
_____________
NET ASSETS AT DECEMBER 31, 1997 18,077
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Strategic
Equity
Division(a)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $3,094
Net realized gain (loss) on investments 43
Net unrealized appreciation (depreciation) of investments (2,309)
_____________
Net increase (decrease) in net assets resulting from operations 828
Changes from principal transactions:
Purchase payments --
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 36,747
_____________
Increase in net assets derived from principal transactions 36,747
_____________
Total increase 37,575
_____________
NET ASSETS AT DECEMBER 31, 1998 $55,652
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Small
Cap
Division(b)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($142)
Net realized gain (loss) on investments 13
Net unrealized appreciation (depreciation) of investments (965)
_____________
Net increase (decrease) in net assets resulting from operations (1,094)
Changes from principal transactions:
Purchase payments 39,418
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 5,883
_____________
Increase in net assets derived from principal transactions 45,301
_____________
Total increase 44,207
_____________
NET ASSETS AT DECEMBER 31, 1997 44,207
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Small
Cap
Division(b)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($1,398)
Net realized gain (loss) on investments 108
Net unrealized appreciation (depreciation) of investments 22,839
_____________
Net increase (decrease) in net assets resulting from operations 21,549
Changes from principal transactions:
Purchase payments 79,797
Contract distributions and terminations (3,119)
Transfer payments from (to) Fixed Account and other Divisions 65,610
_____________
Increase in net assets derived from principal transactions 142,288
_____________
Total increase 163,837
_____________
NET ASSETS AT DECEMBER 31, 1998 $208,044
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Managed
Global
Division(b)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $2,340
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments (4,306)
_____________
Net increase (decrease) in net assets resulting from operations (1,966)
Changes from principal transactions:
Purchase payments 32,435
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 4,167
_____________
Increase in net assets derived from principal transactions 36,602
_____________
Total increase 34,636
_____________
NET ASSETS AT DECEMBER 31, 1997 34,636
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Managed
Global
Division(b)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $5,600
Net realized gain (loss) on investments (94)
Net unrealized appreciation (depreciation) of investments 21,964
_____________
Net increase (decrease) in net assets resulting from operations 27,470
Changes from principal transactions:
Purchase payments 85,280
Contract distributions and terminations (7,541)
Transfer payments from (to) Fixed Account and other Divisions 39,165
_____________
Increase in net assets derived from principal transactions 116,904
_____________
Total increase 144,374
_____________
NET ASSETS AT DECEMBER 31, 1998 $179,010
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Liquid
Asset
Division(q)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) --
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
_____________
Net increase (decrease) in net assets resulting from operations --
Changes from principal transactions:
Purchase payments --
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions --
_____________
Increase in net assets derived from principal transactions --
_____________
Total increase --
_____________
NET ASSETS AT DECEMBER 31, 1997 --
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Liquid
Asset
Division(q)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $2,482
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
_____________
Net increase (decrease) in net assets resulting from operations 2,482
Changes from principal transactions:
Purchase payments 404,872
Contract distributions and terminations (4,052)
Transfer payments from (to) Fixed Account and other Divisions (277,715)
_____________
Increase in net assets derived from principal transactions 123,105
_____________
Total increase 125,587
_____________
NET ASSETS AT DECEMBER 31, 1998 $125,587
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Mid-Cap
Growth
Division(b)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $2,668
Net realized gain (loss) on investments 14
Net unrealized appreciation (depreciation) of investments (3,010)
_____________
Net increase (decrease) in net assets resulting from operations (328)
Changes from principal transactions:
Purchase payments 17,788
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 61,644
_____________
Increase in net assets derived from principal transactions 79,432
_____________
Total increase 79,104
_____________
NET ASSETS AT DECEMBER 31, 1997 79,104
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Mid-Cap
Growth
Division(b)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $25,175
Net realized gain (loss) on investments 1,857
Net unrealized appreciation (depreciation) of investments 43,328
_____________
Net increase (decrease) in net assets resulting from operations 70,360
Changes from principal transactions:
Purchase payments 165,922
Contract distributions and terminations (9,513)
Transfer payments from (to) Fixed Account and other Divisions 492,058
_____________
Increase in net assets derived from principal transactions 648,467
_____________
Total increase 718,827
_____________
NET ASSETS AT DECEMBER 31, 1998 $797,931
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Growth &
Income
Division(e)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $385
Net realized gain (loss) on investments 1
Net unrealized appreciation (depreciation) of investments (388)
_____________
Net increase (decrease) in net assets resulting from operations (2)
Changes from principal transactions:
Purchase payments --
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 5,150
_____________
Increase in net assets derived from principal transactions 5,150
_____________
Total increase 5,148
_____________
NET ASSETS AT DECEMBER 31, 1997 5,148
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Growth &
Income
Division(e)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $5,173
Net realized gain (loss) on investments (2,689)
Net unrealized appreciation (depreciation) of investments 28,182
_____________
Net increase (decrease) in net assets resulting from operations 30,666
Changes from principal transactions:
Purchase payments 294,490
Contract distributions and terminations (9,417)
Transfer payments from (to) Fixed Account and other Divisions 127,530
_____________
Increase in net assets derived from principal transactions 412,603
_____________
Total increase 443,269
_____________
NET ASSETS AT DECEMBER 31, 1998 $448,417
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Research
Division(d)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $5,891
Net realized gain (loss) on investments (9)
Net unrealized appreciation (depreciation) of investments (3,845)
_____________
Net increase (decrease) in net assets resulting from operations 2,037
Changes from principal transactions:
Purchase payments 31,272
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 225,882
_____________
Increase in net assets derived from principal transactions 257,154
_____________
Total increase 259,191
_____________
NET ASSETS AT DECEMBER 31, 1997 259,191
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Research
Division(d)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $102,772
Net realized gain (loss) on investments 3,010
Net unrealized appreciation (depreciation) of investments 141,414
_____________
Net increase (decrease) in net assets resulting from operations 247,196
Changes from principal transactions:
Purchase payments 360,909
Contract distributions and terminations (45,655)
Transfer payments from (to) Fixed Account and other Divisions 1,657,534
_____________
Increase in net assets derived from principal transactions 1,972,788
_____________
Total increase 2,219,984
_____________
NET ASSETS AT DECEMBER 31, 1998 $2,479,175
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Total
Return
Division(d)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $7,181
Net realized gain (loss) on investments 11
Net unrealized appreciation (depreciation) of investments (1,149)
_____________
Net increase (decrease) in net assets resulting from operations 6,043
Changes from principal transactions:
Purchase payments 17,715
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 225,115
_____________
Increase in net assets derived from principal transactions 242,830
_____________
Total increase 248,873
_____________
NET ASSETS AT DECEMBER 31, 1997 248,873
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Total
Return
Division(d)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $77,712
Net realized gain (loss) on investments 682
Net unrealized appreciation (depreciation) of investments 458
_____________
Net increase (decrease) in net assets resulting from operations 78,852
Changes from principal transactions:
Purchase payments 512,655
Contract distributions and terminations (22,799)
Transfer payments from (to) Fixed Account and other Divisions 902,063
_____________
Increase in net assets derived from principal transactions 1,391,919
_____________
Total increase 1,470,771
_____________
NET ASSETS AT DECEMBER 31, 1998 $1,719,644
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Value +
Growth
Division(k)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($168)
Net realized gain (loss) on investments (15)
Net unrealized appreciation (depreciation) of investments (6,290)
_____________
Net increase (decrease) in net assets resulting from operations (6,473)
Changes from principal transactions:
Purchase payments 46,752
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions --
_____________
Increase in net assets derived from principal transactions 46,752
_____________
Total increase 40,279
_____________
NET ASSETS AT DECEMBER 31, 1997 40,279
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Value +
Growth
Division(k)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $12,257
Net realized gain (loss) on investments (2,543)
Net unrealized appreciation (depreciation) of investments 38,290
_____________
Net increase (decrease) in net assets resulting from operations 48,004
Changes from principal transactions:
Purchase payments 224,415
Contract distributions and terminations (14,318)
Transfer payments from (to) Fixed Account and other Divisions 122,959
_____________
Increase in net assets derived from principal transactions 333,056
_____________
Total increase 381,060
_____________
NET ASSETS AT DECEMBER 31, 1998 $421,339
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Appre-
ciation
Division(h)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $18,921
Net realized gain (loss) on investments 5
Net unrealized appreciation (depreciation) of investments (11,197)
_____________
Net increase (decrease) in net assets resulting from operations 7,729
Changes from principal transactions:
Purchase payments 16,390
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 332,433
_____________
Increase in net assets derived from principal transactions 348,823
_____________
Total increase 356,552
_____________
NET ASSETS AT DECEMBER 31, 1997 356,552
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Appre-
ciation
Division(h)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $76,934
Net realized gain (loss) on investments 1,129
Net unrealized appreciation (depreciation) of investments 251,837
_____________
Net increase (decrease) in net assets resulting from operations 329,900
Changes from principal transactions:
Purchase payments 246,628
Contract distributions and terminations (104,211)
Transfer payments from (to) Fixed Account and other Divisions 2,884,568
_____________
Increase in net assets derived from principal transactions 3,026,985
_____________
Total increase 3,356,885
_____________
NET ASSETS AT DECEMBER 31, 1998 $3,713,437
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
High
Growth
Division(l)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($694)
Net realized gain (loss) on investments (21)
Net unrealized appreciation (depreciation) of investments (1,359)
_____________
Net increase (decrease) in net assets resulting from operations (2,074)
Changes from principal transactions:
Purchase payments 25,235
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 186,535
_____________
Increase in net assets derived from principal transactions 211,770
_____________
Total increase 209,696
_____________
NET ASSETS AT DECEMBER 31, 1997 209,696
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
High
Growth
Division(l)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($14,742)
Net realized gain (loss) on investments 3,082
Net unrealized appreciation (depreciation) of investments 114,108
_____________
Net increase (decrease) in net assets resulting from operations 102,448
Changes from principal transactions:
Purchase payments 29,101
Contract distributions and terminations (103,262)
Transfer payments from (to) Fixed Account and other Divisions 1,366,959
_____________
Increase in net assets derived from principal transactions 1,292,798
_____________
Total increase 1,395,246
_____________
NET ASSETS AT DECEMBER 31, 1998 $1,604,942
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Growth
Division(i)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($1,426)
Net realized gain (loss) on investments (11)
Net unrealized appreciation (depreciation) of investments 9,460
_____________
Net increase (decrease) in net assets resulting from operations 8,023
Changes from principal transactions:
Purchase payments 217,030
Contract distributions and terminations (200)
Transfer payments from (to) Fixed Account and other Divisions 476,090
_____________
Increase in net assets derived from principal transactions 692,920
_____________
Total increase 700,943
_____________
NET ASSETS AT DECEMBER 31, 1997 700,943
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Growth
Division(i)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($12,163)
Net realized gain (loss) on investments 4,062
Net unrealized appreciation (depreciation) of investments 174,548
_____________
Net increase (decrease) in net assets resulting from operations 166,447
Changes from principal transactions:
Purchase payments 192,819
Contract distributions and terminations (81,738)
Transfer payments from (to) Fixed Account and other Divisions 1,582,676
_____________
Increase in net assets derived from principal transactions 1,693,757
_____________
Total increase 1,860,204
_____________
NET ASSETS AT DECEMBER 31, 1998 $2,561,147
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Balanced
Division(j)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($1,777)
Net realized gain (loss) on investments 5
Net unrealized appreciation (depreciation) of investments 8,247
_____________
Net increase (decrease) in net assets resulting from operations 6,475
Changes from principal transactions:
Purchase payments 103,562
Contract distributions and terminations (600)
Transfer payments from (to) Fixed Account and other Divisions 730,435
_____________
Increase in net assets derived from principal transactions 833,397
_____________
Total increase 839,872
_____________
NET ASSETS AT DECEMBER 31, 1997 839,872
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Balanced
Division(j)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($7,361)
Net realized gain (loss) on investments 3,647
Net unrealized appreciation (depreciation) of investments 143,123
_____________
Net increase (decrease) in net assets resulting from operations 139,409
Changes from principal transactions:
Purchase payments 265,944
Contract distributions and terminations (162,374)
Transfer payments from (to) Fixed Account and other Divisions 2,575,782
_____________
Increase in net assets derived from principal transactions 2,679,352
_____________
Total increase 2,818,761
_____________
NET ASSETS AT DECEMBER 31, 1998 $3,658,633
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Conservative
Division(m)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($1,439)
Net realized gain (loss) on investments (11)
Net unrealized appreciation (depreciation) of investments 7,652
_____________
Net increase (decrease) in net assets resulting from operations 6,202
Changes from principal transactions:
Purchase payments 11,009
Contract distributions and terminations (1,648)
Transfer payments from (to) Fixed Account and other Divisions 641,485
_____________
Increase in net assets derived from principal transactions 650,846
_____________
Total increase 657,048
_____________
NET ASSETS AT DECEMBER 31, 1997 657,048
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Conservative
Division(m)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $4,218
Net realized gain (loss) on investments 4,927
Net unrealized appreciation (depreciation) of investments 36,419
_____________
Net increase (decrease) in net assets resulting from operations 45,564
Changes from principal transactions:
Purchase payments 30,578
Contract distributions and terminations (21,156)
Transfer payments from (to) Fixed Account and other Divisions 837,276
_____________
Increase in net assets derived from principal transactions 846,698
_____________
Total increase 892,262
_____________
NET ASSETS AT DECEMBER 31, 1998 $1,549,310
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Income
Division(p)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) --
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
_____________
Net increase (decrease) in net assets resulting from operations --
Changes from principal transactions:
Purchase payments --
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions --
_____________
Increase in net assets derived from principal transactions --
_____________
Total increase --
_____________
NET ASSETS AT DECEMBER 31, 1997 --
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Income
Division(p)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($6)
Net realized gain (loss) on investments 18
Net unrealized appreciation (depreciation) of investments 3,137
_____________
Net increase (decrease) in net assets resulting from operations 3,149
Changes from principal transactions:
Purchase payments 10
Contract distributions and terminations (1,383)
Transfer payments from (to) Fixed Account and other Divisions 155,315
_____________
Increase in net assets derived from principal transactions 153,942
_____________
Total increase 157,091
_____________
NET ASSETS AT DECEMBER 31, 1998 $157,091
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith
Barney
Money
Market
Division(f)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $6,589
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
_____________
Net increase (decrease) in net assets resulting from operations 6,589
Changes from principal transactions:
Purchase payments 3,856,873
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions (3,283,025)
_____________
Increase in net assets derived from principal transactions 573,848
_____________
Total increase 580,437
_____________
NET ASSETS AT DECEMBER 31, 1997 580,437
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith
Barney
Money
Market
Division(f)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $38,681
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
_____________
Net increase (decrease) in net assets resulting from operations 38,681
Changes from principal transactions:
Purchase payments 16,185,163
Contract distributions and terminations (1,865)
Transfer payments from (to) Fixed Account and other Divisions (14,516,270)
_____________
Increase in net assets derived from principal transactions 1,667,028
_____________
Total increase 1,705,709
_____________
NET ASSETS AT DECEMBER 31, 1998 $2,286,146
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith
Barney
Large Cap
Value
Division(g)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($1,020)
Net realized gain (loss) on investments 12
Net unrealized appreciation (depreciation) of investments 11,795
_____________
Net increase (decrease) in net assets resulting from operations 10,787
Changes from principal transactions:
Purchase payments 35,736
Contract distributions and terminations (310)
Transfer payments from (to) Fixed Account and other Divisions 286,757
_____________
Increase in net assets derived from principal transactions 322,183
_____________
Total increase 332,970
_____________
NET ASSETS AT DECEMBER 31, 1997 332,970
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith
Barney
Large Cap
Value
Division(g)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $27,201
Net realized gain (loss) on investments 1,374
Net unrealized appreciation (depreciation) of investments 53,676
_____________
Net increase (decrease) in net assets resulting from operations 82,251
Changes from principal transactions:
Purchase payments 99,461
Contract distributions and terminations (33,049)
Transfer payments from (to) Fixed Account and other Divisions 1,712,477
_____________
Increase in net assets derived from principal transactions 1,778,889
_____________
Total increase 1,861,140
_____________
NET ASSETS AT DECEMBER 31, 1998 $2,194,110
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith
Barney
Inter-
national
Equity
Division(h)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($255)
Net realized gain (loss) on investments (8)
Net unrealized appreciation (depreciation) of investments (1,925)
_____________
Net increase (decrease) in net assets resulting from operations (2,188)
Changes from principal transactions:
Purchase payments 2,279
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 81,637
_____________
Increase in net assets derived from principal transactions 83,916
_____________
Total increase 81,728
_____________
NET ASSETS AT DECEMBER 31, 1997 81,728
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith
Barney
Inter-
national
Equity
Division(h)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($4,401)
Net realized gain (loss) on investments 297
Net unrealized appreciation (depreciation) of investments (6,646)
_____________
Net increase (decrease) in net assets resulting from operations (10,750)
Changes from principal transactions:
Purchase payments 44,293
Contract distributions and terminations (8,720)
Transfer payments from (to) Fixed Account and other Divisions 354,375
_____________
Increase in net assets derived from principal transactions 389,948
_____________
Total increase 379,198
_____________
NET ASSETS AT DECEMBER 31, 1998 $460,926
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith
Barney
High
Income
Division(h)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($183)
Net realized gain (loss) on investments 5
Net unrealized appreciation (depreciation) of investments 1,160
_____________
Net increase (decrease) in net assets resulting from operations 982
Changes from principal transactions:
Purchase payments 3,252
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 49,480
_____________
Increase in net assets derived from principal transactions 52,732
_____________
Total increase 53,714
_____________
NET ASSETS AT DECEMBER 31, 1997 53,714
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith
Barney
High
Income
Division(h)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $6,532
Net realized gain (loss) on investments 289
Net unrealized appreciation (depreciation) of investments (9,106)
_____________
Net increase (decrease) in net assets resulting from operations (2,285)
Changes from principal transactions:
Purchase payments 5,132
Contract distributions and terminations (18,198)
Transfer payments from (to) Fixed Account and other Divisions 305,058
_____________
Increase in net assets derived from principal transactions 291,992
_____________
Total increase 289,707
_____________
NET ASSETS AT DECEMBER 31, 1998 $343,421
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Combined
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $51,790
Net realized gain (loss) on investments 70
Net unrealized appreciation (depreciation) of investments 1,454
_____________
Net increase (decrease) in net assets resulting from operations 53,314
Changes from principal transactions:
Purchase payments 4,764,916
Contract distributions and terminations (2,758)
Transfer payments from (to) Fixed Account and other Divisions 58,831
_____________
Increase in net assets derived from principal transactions 4,820,989
_____________
Total increase 4,874,303
_____________
NET ASSETS AT DECEMBER 31, 1997 4,874,303
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Combined
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $438,347
Net realized gain (loss) on investments 27,611
Net unrealized appreciation (depreciation) of investments 1,013,791
_____________
Net increase (decrease) in net assets resulting from operations 1,479,749
Changes from principal transactions:
Purchase payments 20,182,114
Contract distributions and terminations (709,023)
Transfer payments from (to) Fixed Account and other Divisions 872,059
_____________
Increase in net assets derived from principal transactions 20,345,150
_____________
Total increase 21,824,899
_____________
NET ASSETS AT DECEMBER 31, 1998 $26,699,202
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE 1 - ORGANIZATION
First Golden American Life Insurance Company of New York Separate Account NY-
B (the "Account") was established by First Golden American Life Insurance
Company of New York ("First Golden") to support the operations of variable
annuity contracts ("Contracts"). First Golden is a wholly owned subsidiary of
Golden American Life Insurance Company ("Golden American"), a wholly owned
subsidiary of Equitable of Iowa Companies, Inc. First Golden is primarily
engaged in the issuance of variable insurance products and is licensed as a
stock life insurance company in the states of New York and Delaware.
Operations of the Account commenced on May 19, 1997. The Account is
registered as a unit investment trust with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended. First
Golden provides for variable accumulation and benefits under the contracts by
crediting annuity considerations to one or more divisions within the Account
or the Fixed Separate Account, which is not part of the Account, as directed
by the Contractowners. The portion of the Account's assets applicable to
Contracts will not be chargeable with liabilities arising out of any other
business First Golden may conduct, but obligations of the Account, including
the promise to make benefit payments, are obligations of First Golden. The
assets and liabilities of the Account are clearly identified and
distinguished from the other assets and liabilities of First Golden.
At December 31, 1998, the Account had, under GoldenSelect Contracts ("DVA
Plus"), nineteen investment divisions: Limited Maturity Bond, Hard Assets,
All-Growth, Real Estate, Fully Managed, Multiple Allocation, Capital
Appreciation, Rising Dividends, Emerging Markets, Value Equity, Strategic
Equity, Small Cap, Managed Global, Liquid Asset, Mid-Cap Growth (formerly
OTC), Growth & Income, Research, Total Return, and Value + Growth. The
Account also had, under Empire PrimElite Contracts ("Empire DVA"), thirteen
investment divisions: Appreciation, Select High Growth, Select Growth,
Select Balanced, Select Conservative, Select Income, Smith Barney Money
Market, Smith Barney Large Cap Value (formerly Smith Barney Income and
Growth), Smith Barney International Equity, Smith Barney High Income, Mid-Cap
Growth, Research, and Total Return Divisions (collectively with the divisions
noted above, "Divisions"). The assets in each Division are invested in
shares of a designated series ("Series," which may also be referred to as a
"Portfolio") of mutual funds of The GCG Trust, the Greenwich Street Series
Fund Inc., the Smith Barney Concert Allocation Series Inc. or the Travelers
Series Fund Inc. (the "Trusts"). At December 31, 1998, the following
divisions were available under GoldenSelect Contracts but did not have
investments: Global Fixed Income, Developing World, Growth Opportunities,
PIMCO High Yield Bond, and PIMCO StocksPLUS Growth and Income.
Prior to August 14, 1998, the Account also had certain investment divisions
available from the Equi-Select Series Trust. In an effort to consolidate
operations, First Golden requested permission from the Securities and
Exchange Commission ("SEC") to substitute shares of each Portfolio of the
Equi-Select Series Trust with shares of a similar Series of The GCG Trust. On
August 14, 1998, after approval from the SEC, shares of each Portfolio of the
Equi-Select Series Trust were substituted with shares of a similar Series of
The GCG Trust. The consolidation resulted in the following Series being
substituted from The GCG Trust:
<TABLE>
<CAPTION>
Equi-Select Series Trust The GCG Trust
Investment Division Investment Division
___________________________ ___________________________
<S> <S>
OTC Mid-Cap Growth
Research Research
Total Return Total Return
Value + Growth Value + Growth
</TABLE>
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies of the
Account:
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: Investments are made in shares of a Series or Portfolio of the
Trusts and are valued at the net asset value per share of the respective
Series or Portfolio of the Trusts. Investment transactions in each Series or
Portfolio of the Trusts are recorded on the trade date. Distributions of net
investment income and capital gains from each Series or Portfolio of the
Trusts are recognized on the ex-distribution date. Realized gains and losses
on redemptions of the shares of the Series or Portfolio of the Trusts are
determined on the specific identification basis.
FEDERAL INCOME TAXES: Operations of the Account form a part of, and are
taxed with, the total operations of First Golden which is taxed as a life
insurance company under the Internal Revenue Code. Earnings and realized
capital gains of the Account attributable to the Contractowners are excluded
in the determination of the federal income tax liability of First Golden.
NOTE 3 - CHARGES AND FEES
There are two different death benefit options referred to as Standard and
Annual Ratchet. Under the terms of the Contracts, certain charges are
allocated to the Contracts to cover First Golden's expenses in connection
with the issuance and administration of the Contracts. Following is a
summary of these charges:
MORTALITY AND EXPENSE RISK CHARGES: First Golden assumes mortality and
expense risks related to the operations of the Account and, in accordance
with the terms of the Contracts, deducts a daily charge from the assets of
the Account. Daily charges are deducted at annual rates of 1.10% and 1.25%
of the assets attributable to the Standard and Annual Ratchet, respectively,
to cover these risks.
ASSET BASED ADMINISTRATIVE CHARGES: A daily charge at an annual rate of .15%
of assets attributable to the Contracts is deducted daily.
ADMINISTRATIVE CHARGES: An administrative charge of $30 per Contract year is
deducted from the accumulation value of the Contracts to cover ongoing
administrative expenses. The charge is incurred at the beginning of the
Contract processing period and deducted at the end of the Contract processing
period.
CONTINGENT DEFERRED SALES CHARGES: 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 a premium payment is received. The
Surrender Charge is imposed at a rate of 7% during the first year of purchase
declining to 6%, 5%, 4%, 3%, 2% and 1% in the second, third, fourth, fifth,
sixth, and seventh years, respectively.
PREMIUM TAXES: For certain Contracts, premium taxes are deducted, where
applicable, from the accumulation value of each Contract. The amount and
timing of the payment by First Golden depends on the annuitant's state of
residence and currently ranges up to 3.5% of premiums.
FEES WAIVED: Certain charges and fees for various types of Contracts may be
waived by First Golden. Currently no charges and fees are being waived.
NOTE 4 - PURCHASES AND SALES OF INVESTMENT SECURITIES
The aggregate cost of purchases and proceeds from sales of investments were
as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
___________________________
1998
___________________________
PURCHASES SALES
___________________________
<S> <C> <C>
The GCG Trust:
Limited Maturity Bond Series $235,270 $221,658
Hard Assets Series 14,708 134
All-Growth Series 61,539 1,900
Real Estate Series 38,778 2,124
Fully Managed Series 124,010 2,642
Multiple Allocation Series 343,055 4,237
Capital Appreciation Series 162,917 36,070
Rising Dividends Series 719,476 80,558
Emerging Markets Series 7,711 210
Value Equity Series 87,808 8,564
Strategic Equity Series 40,224 370
Small Cap Series 144,977 3,999
Managed Global Series 128,677 6,075
Liquid Asset Series 568,535 442,884
Mid-Cap Growth Series 696,570 22,376
Growth & Income Series 507,147 89,281
Research Series 2,125,108 47,761
Total Return Series 1,522,048 51,457
Value + Growth Series 374,316 28,818
Greenwich Street Series Fund Inc.:
Appreciation Portfolio 3,149,672 42,817
Smith Barney Concert Allocation Series Inc.:
Select High Growth Portfolio 1,463,771 184,149
Select Growth Portfolio 1,748,031 64,469
Select Balanced Portfolio 2,896,438 223,104
Select Conservative Portfolio 952,350 101,016
Select Income Portfolio 156,208 2,222
Travelers Series Fund Inc.:
Smith Barney Money Market Portfolio 10,349,942 8,643,728
Smith Barney Large Cap Value Portfolio 1,832,568 25,463
Smith Barney International Equity Portfolio 393,338 7,523
Smith Barney High Income Portfolio 339,882 41,154
___________________________
COMBINED $31,185,074 $10,386,763
===========================
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
___________________________
1997
___________________________
PURCHASES SALES
___________________________
<S> <C> <C>
The GCG Trust:
Limited Maturity Bond Series $10,631 $19
Hard Assets Series 5,914 5
All-Growth Series 8,651 16
Real Estate Series 11,586 56
Fully Managed Series 33,599 234
Multiple Allocation Series 27,006 115
Capital Appreciation Series 16,510 57
Rising Dividends Series 161,798 489
Emerging Markets Series 19,032 60
Value Equity Series 41,962 104
Strategic Equity Series 16,993 93
Small Cap Series 45,283 98
Managed Global Series 39,096 132
Liquid Asset Series -- --
Mid-Cap Growth Series 82,349 146
Growth & Income Series 5,553 17
Research Series 263,917 548
Total Return Series 250,608 411
Value + Growth Series 46,747 144
Greenwich Street Series Fund Inc.:
Appreciation Portfolio 368,564 504
Smith Barney Concert Allocation Series Inc.:
Select High Growth Portfolio 211,682 272
Select Growth Portfolio 692,561 658
Select Balanced Portfolio 833,531 1,520
Select Conservative Portfolio 652,178 2,627
Select Income Portfolio -- --
Travelers Series Fund Inc.:
Smith Barney Money Market Portfolio 2,759,578 2,178,683
Smith Barney Large Cap Value Portfolio 322,245 749
Smith Barney International Equity Portfolio 83,926 155
Smith Barney High Income Portfolio 52,776 188
___________________________
COMBINED $7,064,276 $2,188,100
===========================
</TABLE>
NOTE 5 - SUMMARY OF CHANGES FROM UNIT TRANSACTIONS
Contractowners' transactions shown in the following table reflect gross
inflows ("Purchases") and outflows ("Sales") in units for each Division.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
__________________________
1998
__________________________
PURCHASES SALES
__________________________
<S> <C> <C>
Limited Maturity Bond Division 13,900 13,026
Hard Assets Division 769 --
All-Growth Division 4,825 105
Real Estate Division 1,438 86
Fully Managed Division 5,510 80
Multiple Allocation Division 14,526 132
Capital Appreciation Division 6,319 1,571
Rising Dividends Division 31,350 3,619
Emerging Markets Division 1,106 1
Value Equity Division 4,502 464
Strategic Equity Division 2,640 1
Small Cap Division 10,361 265
Managed Global Division 9,472 429
Liquid Asset Division 39,492 30,763
Mid-Cap Growth Division 32,310 1,029
Growth & Income Division 31,543 5,535
Research Division 97,017 2,517
Total Return Division 84,907 3,335
Value + Growth Division 24,811 2,069
Appreciation Division 206,044 6,065
Select High Growth Division 126,910 15,947
Select Growth Division 149,805 4,774
Select Balanced Division 253,839 19,620
Select Conservative Division 82,952 7,887
Select Income Division 13,837 123
Smith Barney Money Market Division 1,056,277 908,145
Smith Barney Large Cap Value Division 96,558 1,398
Smith Barney International Equity Division 26,616 367
Smith Barney High Income Division 24,173 2,838
__________________________
COMBINED 2,453,809 1,032,191
==========================
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
__________________________
1997
__________________________
PURCHASES SALES
__________________________
<S> <C> <C>
Limited Maturity Bond Division 632 --
Hard Assets Division 238 --
All-Growth Division 582 --
Real Estate Division 478 --
Fully Managed Division 1,701 --
Multiple Allocation Division 1,243 --
Capital Appreciation Division 734 --
Rising Dividends Division 8,313 --
Emerging Markets Division 1,812 --
Value Equity Division 2,104 --
Strategic Equity Division 1,265 --
Small Cap Division 3,434 --
Managed Global Division 2,969 --
Liquid Asset Division -- --
Mid-Cap Growth Division 4,268 --
Growth & Income Division 334 --
Research Division 13,748 11
Total Return Division 15,456 --
Value + Growth Division 3,093 --
Appreciation Division 25,446 7
Select High Growth Division 19,327 6
Select Growth Division 63,499 17
Select Balanced Division 76,003 54
Select Conservative Division 59,484 150
Select Income Division -- --
Smith Barney Money Market Division 259,338 206,454
Smith Barney Large Cap Value Division 18,764 22
Smith Barney International Equity Division 6,021 4
Smith Barney High Income Division 3,916 5
__________________________
COMBINED 594,202 206,730
==========================
</TABLE>
NOTE 6 - NET ASSETS
Investments at net asset value less the payable to First Golden American Life
Insurance Company of New York for charges and fees at December 31, 1998
consisted of the following:
<TABLE>
<CAPTION>
Limited
Maturity Hard All- Real
Bond Assets Growth Estate
Division Division Division Division
_____________________________________________________
<S> <C> <C> <C> <C>
Unit transactions $20,564 $18,396 $68,053 $42,330
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 5,009 1,991 13 5,771
Net unrealized appreciation
(depreciation) of
investments (345) (6,021) 13,716 (8,220)
_____________________________________________________
$25,228 $14,366 $81,782 $39,881
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Fully Multiple Capital Rising
Managed Allocation Appreciation Dividends
Division Division Division Division
_____________________________________________________
<S> <C> <C> <C> <C>
Unit transactions $141,308 $329,317 $131,528 $772,760
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 13,509 36,426 10,361 37,168
Net unrealized appreciation
(depreciation) of
investments (7,657) (19,688) (7,541) 4,974
_____________________________________________________
$147,160 $346,055 $134,348 $814,902
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Emerging Value Strategic Small
Markets Equity Equity Cap
Division Division Division Division
_____________________________________________________
<S> <C> <C> <C> <C>
Unit transactions $26,762 $116,073 $52,873 $187,589
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments (423) 3,407 3,902 (1,419)
Net unrealized appreciation
(depreciation) of
investments (7,346) (6,955) (1,123) 21,874
_____________________________________________________
$18,993 $112,525 $55,652 $208,044
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Managed Liquid Mid-Cap Growth &
Global Asset Growth Income
Division Division Division Division
_____________________________________________________
<S> <C> <C> <C> <C>
Unit transactions $153,506 $123,105 $727,899 $417,753
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 7,846 2,482 29,714 2,870
Net unrealized appreciation
(depreciation) of
investments 17,658 -- 40,318 27,794
_____________________________________________________
$179,010 $125,587 $797,931 $448,417
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Total Value +
Reseach Return Growth Appreciation
Division Division Division Division
_____________________________________________________
<S> <C> <C> <C> <C>
Unit transactions $2,229,942 $1,634,749 $379,808 $3,375,808
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 111,664 85,586 9,531 96,989
Net unrealized appreciation
(depreciation) of
investments 137,569 (691) 32,000 240,640
_____________________________________________________
$2,479,175 $1,719,644 $421,339 $3,713,437
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Select Select Select Select
High Growth Growth Balanced Conservative
Division Division Division Division
_____________________________________________________
<S> <C> <C> <C> <C>
Unit transactions $1,504,568 $2,386,677 $3,512,749 $1,497,544
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments (12,375) (9,538) (5,486) 7,695
Net unrealized appreciation
(depreciation) of
investments 112,749 184,008 151,370 44,071
_____________________________________________________
$1,604,942 $2,561,147 $3,658,633 $1,549,310
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Smith Smith Smith
Barney Barney Barney
Select Money Large Cap International
Income Market Value Equity
Division Division Division Division
_____________________________________________________
<S> <C> <C> <C> <C>
Unit transactions $153,942 $2,240,876 $2,101,072 $473,864
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 12 45,270 27,567 (4,367)
Net unrealized appreciation
(depreciation) of
investments 3,137 -- 65,471 (8,571)
_____________________________________________________
$157,091 $2,286,146 $2,194,110 $460,926
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Smith
Barney
High
Income
Division Combined
__________________________
<S> <C> <C>
Unit transactions $344,724 $25,166,139
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 6,643 517,818
Net unrealized appreciation
(depreciation) of
investments (7,946) 1,015,245
__________________________
$343,421 $26,699,202
==========================
</TABLE>
NOTE 7 - UNIT VALUES
Accumulation unit value information (which is based on total assets) for
units outstanding by Contract type as of December 31, 1998 was as follows:
<TABLE>
<CAPTION>
TOTAL UNIT
DIVISION/CONTRACT UNITS UNIT VALUE VALUE
_______________________________________________________________________________
<S> <C> <C> <C>
LIMITED MATURITY BOND
Contracts in accumulation period:
DVA PLUS - Annual Ratchet 1,506 $16.77 $25,271
HARD ASSETS
Contracts in accumulation period:
DVA PLUS - Annual Ratchet 1,007 14.28 14,380
ALL-GROWTH
Contracts in accumulation period:
DVA PLUS - Standard 98 15.66 1,539
DVA PLUS - Annual Ratchet 5,204 15.43 80,275
______________
81,814
REAL ESTATE
Contracts in accumulation period:
DVA PLUS - Standard 356 22.07 7,857
DVA PLUS - Annual Ratchet 1,474 21.74 32,056
______________
39,913
FULLY MANAGED
Contracts in accumulation period:
DVA PLUS - Standard 2,619 20.84 54,594
DVA PLUS - Annual Ratchet 4,512 20.53 92,634
______________
147,228
MULTIPLE ALLOCATION
Contracts in accumulation period:
DVA PLUS - Standard 9,623 22.27 214,273
DVA PLUS - Annual Ratchet 6,014 21.94 131,945
______________
346,218
CAPITAL APPRECIATION
Contracts in accumulation period:
DVA PLUS - Standard 578 24.75 14,312
DVA PLUS - Annual Ratchet 4,904 24.50 120,132
______________
134,444
RISING DIVIDENDS
Contracts in accumulation period:
DVA PLUS - Standard 1,734 22.79 39,507
DVA PLUS - Annual Ratchet 34,310 22.61 775,717
______________
815,224
</TABLE>
<TABLE>
<CAPTION>
TOTAL UNIT
DIVISION/CONTRACT UNITS UNIT VALUE VALUE
_______________________________________________________________________________
<S> <C> <C> <C>
EMERGING MARKETS
Contracts in accumulation period:
DVA PLUS - Annual Ratchet 2,917 $6.51 $19,001
VALUE EQUITY
Contracts in accumulation period:
DVA PLUS - Standard 1,678 18.41 30,885
DVA PLUS - Annual Ratchet 4,464 18.31 81,729
______________
112,614
STRATEGIC EQUITY
Contracts in accumulation period:
DVA PLUS - Standard 2,037 14.30 29,124
DVA PLUS - Annual Ratchet 1,867 14.23 26,560
______________
55,684
SMALL CAP
Contracts in accumulation period:
DVA PLUS - Standard 3,612 15.44 55,752
DVA PLUS - Annual Ratchet 9,918 15.37 152,406
______________
208,158
MANAGED GLOBAL
Contracts in accumulation period:
DVA PLUS - Standard 2,440 15.02 36,651
DVA PLUS - Annual Ratchet 9,572 14.88 142,479
______________
179,130
LIQUID ASSET
Contracts in accumulation period:
DVA PLUS - Standard 2,755 14.54 40,063
DVA PLUS - Annual Ratchet 5,974 14.33 85,588
______________
125,651
MID-CAP GROWTH
Contracts in accumulation period:
DVA PLUS - Standard 2,042 22.60 46,154
DVA PLUS - Annual Ratchet 5,304 22.43 118,939
Empire DVA - Standard 5,635 22.60 127,380
Empire DVA - Annual Ratchet 22,568 22.43 506,113
______________
798,586
</TABLE>
<TABLE>
<CAPTION>
TOTAL UNIT
DIVISION/CONTRACT UNITS UNIT VALUE VALUE
_______________________________________________________________________________
<S> <C> <C> <C>
GROWTH & INCOME
Contracts in accumulation period:
DVA PLUS - Standard 6,031 $17.08 $103,003
DVA PLUS - Annual Ratchet 20,311 17.01 345,505
______________
448,508
RESEARCH
Contracts in accumulation period:
DVA PLUS - Standard 784 23.03 18,057
DVA PLUS - Annual Ratchet 11,227 22.89 257,003
Empire DVA - Standard 25,978 23.03 598,234
Empire DVA - Annual Ratchet 70,248 22.89 1,607,992
______________
2,481,286
TOTAL RETURN
Contracts in accumulation period:
DVA PLUS - Standard 4,266 17.83 76,042
DVA PLUS - Annual Ratchet 24,995 17.72 442,845
Empire DVA - Standard 11,145 17.83 198,699
Empire DVA - Annual Ratchet 56,622 17.72 1,003,204
______________
1,720,790
VALUE + GROWTH
Contracts in accumulation period:
DVA PLUS - Standard 8,286 16.36 135,579
DVA PLUS - Annual Ratchet 17,549 16.29 285,964
______________
421,543
APPRECIATION
Contracts in accumulation period:
Empire DVA - Standard 73,470 16.53 1,214,748
Empire DVA - Annual Ratchet 151,948 16.47 2,501,941
______________
3,716,689
SELECT HIGH GROWTH
Contracts in accumulation period:
Empire DVA - Standard 29,056 12.36 359,169
Empire DVA - Annual Ratchet 101,228 12.33 1,247,673
______________
1,606,842
</TABLE>
<TABLE>
<CAPTION>
TOTAL UNIT
DIVISION/CONTRACT UNITS UNIT VALUE VALUE
_______________________________________________________________________________
<S> <C> <C> <C>
SELECT GROWTH
Contracts in accumulation period:
Empire DVA - Standard 30,896 $12.32 $380,776
Empire DVA - Annual Ratchet 177,617 12.29 2,182,748
______________
2,563,524
SELECT BALANCED
Contracts in accumulation period:
Empire DVA - Standard 73,693 11.83 871,589
Empire DVA - Annual Ratchet 236,475 11.79 2,788,778
______________
3,660,367
SELECT CONSERVATIVE
Contracts in accumulation period:
Empire DVA - Standard 48,704 11.55 562,685
Empire DVA - Annual Ratchet 85,695 11.52 987,187
______________
1,549,872
SELECT INCOME
Contracts in accumulation period:
Empire DVA - Standard 2,546 11.49 29,244
Empire DVA - Annual Ratchet 11,168 11.45 127,897
______________
157,141
SMITH BARNEY MONEY MARKET
Contracts in accumulation period:
Empire DVA - Standard 35,357 11.43 404,147
Empire DVA - Annual Ratchet 165,659 11.37 1,882,962
______________
2,287,109
SMITH BARNEY LARGE CAP VALUE
Contracts in accumulation period:
Empire DVA - Standard 36,973 19.35 715,300
Empire DVA - Annual Ratchet 76,929 19.24 1,480,158
______________
2,195,458
SMITH BARNEY INTERNATIONAL EQUITY
Contracts in accumulation period:
Empire DVA - Standard 8,768 14.35 125,840
Empire DVA - Annual Ratchet 23,498 14.28 335,464
______________
461,304
</TABLE>
<TABLE>
<CAPTION>
TOTAL UNIT
DIVISION/CONTRACT UNITS UNIT VALUE VALUE
_______________________________________________________________________________
<S> <C> <C> <C>
SMITH BARNEY HIGH INCOME
Contracts in accumulation period:
Empire DVA - Standard 9,401 $13.66 $128,417
Empire DVA - Annual Ratchet 15,845 13.58 215,247
______________
343,664
____________ ______________
COMBINED 1,809,090 $26,717,413
============ ==============
</TABLE>
<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.
A-1
<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) Schedules I and III follow:
SCHEDULE I
SUMMARY OF INVESTMENTS
OTHER THAN INVESTMENTS IN RELATED PARTIES
(Dollars in thousands)
<TABLE>
<CAPTION>
Balance
Sheet
December 31, 1998 Cost 1 Value Amount
_______________________________________________________________________________
<S> <C> <C> <C>
TYPE OF INVESTMENT
Fixed maturities, available for sale:
Bonds:
United States government and govern-
mental agencies and authorities $3,997 $4,112 $4,112
Public utilities 2,543 2,602 2,602
Corporate securities 20,351 20,724 20,724
Mortgage-backed securities 3,540 3,556 3,556
_______________________________________
Total fixed maturities, available
for sale 30,431 30,994 30,994
Short-term investments 3,231 3,231
___________ ___________
Total investments $33,662 $34,225
=========== ===========
<FN>
Note 1: Cost is defined as amortized cost for bonds and short-term investments
adjusted for amortization of premiums and accrual of discounts.
</TABLE>
<PAGE>
<PAGE>
SCHEDULE III
SUPPLEMENTARY INSURANCE INFORMATION
(Dollars in thousands)
<TABLE>
<CAPTION>
Column Column Column Column Column Column
A B C D E F
________________________________________________________________________________
Future
Policy Other
De- Benefits, Policy
ferred Losses, Claims Insur-
Policy Claims Un- and ance
Acqui- and earned Bene- Premiums
sition Loss Revenue fits and
Segment Costs Expenses Reserve Payable Charges
________________________________________________________________________________
POST-MERGER
________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1998:
Life insurance $2,347 $10,830 -- -- $239
Period October 25, 1997
through December 31, 1997:
Life insurance $189 $2,506 -- -- $8
PRE-MERGER
________________________________________________________________________________
Period January 1, 1997
through October 24, 1997:
Life insurance N/A N/A N/A N/A $4
Period December 17, 1996
through December 31, 1996:
Life insurance -- -- -- -- --
</TABLE>
<PAGE>
<PAGE>
SCHEDULE III
SUPPLEMENTARY INSURANCE INFORMATION - CONTINUED
(Dollars in thousands)
<TABLE>
<CAPTION>
Column Column Column Column Column Column
A G H I J K
________________________________________________________________________________
Amorti-
Benefits zation
Claims, of
Losses Deferred
Net and Policy Other
Invest- Settle- Acqui- Opera-
ment ment sition ting Premiums
Segment Income Expenses Costs Expenses Written
________________________________________________________________________________
POST-MERGER
________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1998:
Life insurance $1,844 $376 $76 $378 --
Period October 25, 1997
through December 31, 1997:
Life insurance $286 $26 $13 $159 --
PRE-MERGER
________________________________________________________________________________
Period January 1, 1997
through October 24, 1997:
Life insurance $1,449 $48 $7 $445 --
Period December 17, 1996
through December 31, 1996:
Life insurance $65 -- -- -- --
</TABLE>
<PAGE>
<PAGE>
EXHIBITS
(b) (1) Resolution of the board of directors of the Depositor
authorizing the establishment of the Registrant /1
(2) Custodial Agreement between Registrant and the Bank
of New York
(3) (a) Distribution Agreement between the
Depositor and Directed Services, Inc /1
(b) Dealers Agreement /1
(4) (a) Individual Deferred Combination Variable and Fixed
Annuity Contract
(b) Individual Deferred Combination Variable and Fixed
Annuity Contract
(c) Individual Retirement Annuity Rider Page./1
(5) (a) Individual Deferred Combination Variable and Fixed
Annuity Application
(b) Individual Deferred Combination Variable and Fixed
Annuity Application
(6) (a) Articles of Incorporation of First Golden
American Life Insurance Company of New York./1
(b) By-Laws of First Golden American Life Insurance
Company of New York./1
(c) Resolution of board of directors for Powers of Attorney
(7) Not applicable
(8) (a) Services Agreement, dated November 8, 1996, between
Directed Services, Inc. and First Golden American Life
Insurance Company of New York /1
(b) Administrative Services Agreement, dated November 8, 1996,
between First Golden American Life Insurance Company of New
York and Golden American Life Insurance /1
(c) Administrative Services Agreement between First Golden
American Life Insurance Company of New York and Equitable
Life Insurance Company of Iowa
(d) Participation Agreement between Depositor and the Travelers
Series Fund Inc
(e) Participation Agreement between Depositor and the Greenwich
Street Series
(f) Participation Agreement between Depositor and the Smith Barney
Concert Allocation Series Inc
(g) Participation Agreement between Depositor and PIMCO Variable
Insurance Trust
(h) Asset Management Agreement, dated March 30, 1998,
between First Golden and ING Investment Management LLC
(i) Revolving Note Payable between First Golden and SunTrust Bank
(9) Opinion and Consent of Myles R. Tashman, Esq.
(10) (a) Consent of Sutherland Asbill & Brennan LLP
(b) Consent of Independent Auditors
(c) Consent of Myles R. Tashman, incorporated in Item 9 of this
Part C, together with the Opinion of Myles R. Tashman
(11) Not applicable
(12) Not applicable
(13) Schedule of Performance Data /1
(14) Not applicable
(15) Powers of Attorney
(16) Subsidiaries of ING Groep N.V.
________________________
/1 Incorporated by reference to Pre-Effective Amendment No. 1 to the
Registration Statement for Separate Account NY-B filed with the
Securities and Exchange Commission on March 18, 1997.
<PAGE>
Item 25: Directors and Officers of the Depositor
- -------- ---------------------------------------
Principal Position(s)
Name Business Address with Depositor
R. Brock Armstrong ING Insurance Operations Director
5780 Powers Ferry Road
Atlanta, GA 30327-4390
Barnett Chernow Golden American Life Ins. Co. President and
1475 Dunwoody Drive Director
West Chester, PA 19380
Myles R. Tashman Golden American Life Ins. Co. Executive Vice President,
1475 Dunwoody Drive General Counsel,
West Chester, PA 19380 Secretary and Director
Carol V. Coleman 5 Flint Ave Director
Larchmont, NY 10538
Stephen J. Friedman Debevoise and Plimpton Director
875 Third Avenue
New York, NY 10022
Andrew Kalinowski Upstate Special Risk/Life Director
Mark
8 Tobey Village Office Park
Pittsford, NY 14534
Bernard Levitt 2603 N.W. 13th Street Director
Delray Beach, FL 33445
Roger A. Martin Lawrence O'Donnell Marcus, Director
L.L.P.
61 Broadway, Suite 2324
New York, NY 10006
Michael W. Cunningham ING Insurance Operations Director
5780 Powers Ferry Road
Atlanta, GA 30327-4390
James R. McInnis Golden American Life Ins. Co. Executive Vice President
1475 Dunwoody Drive
West Chester, PA 19380
Stephen J. Preston Golden American Life Ins. Co. Executive Vice President
1475 Dunwoody Drive and Chief Actuary
West Chester, PA 19380
David L. Jacobson Golden American Life Ins. Co. Senior Vice President
1475 Dunwoody Drive and Assistant Secretary
West Chester, PA 19380
Mary Bea Wilkinson First Golden American Life Senior Vice President
Ins. Co. of New York and Chief Financial
230 Park Avenue, Suite 966 Officer
New York, NY 10169
Marilyn Talman Golden American Life Ins. Co. Vice President,
1475 Dunwoody Drive Associate General Counsel
West Chester, PA 19380 and Assistant Secretary
<PAGE>
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:
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
Equitable of Iowa Companies, Inc. ("EIC"). 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 EIC and is authorized
to do business in the District of Columbia and all
all states except New York.
The registrant is a segregated asset account of the Company and is
therefore owned and controlled by the Company. All of the Company's
outstanding stock is owned and controlled by Golden American, a
subsidiary of EIC, which is a wholly owned subsidiary of ING Groep
N.V.("ING"). Various companies and other entities controlled by ING
may therefore be considered to be under common control with the
registrant or the Company. Such other companies and entities,
together with the identity of their controlling persons (where
applicable), are set forth on the organizational chart in Exhibit 16.
Item 27: Number of Contract Owners
- -------- -------------------------
There are 191 Qualified contract owners and
660 Non-Qualified contract owners as of March 31, 1999.
<PAGE>
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, DSI, 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 of Golden American, Separate Account B of Golden
American, Alger Separate Account A of Golden American,
Separate Account NY-B of First Golden, Separate Account A for
Equitable Life Insurance Company of Iowa and The GCG Trust.
(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
Business Address with Underwriter
- ------------------ ---------------------
James R. McInnis President
1475 Dunwoody Drive
West Chester, PA 19380
Barnett Chernow Director and Executive
1475 Dunwoody Drive Vice President
West Chester, PA 19380
Myles R. Tashman Director, Executive
1475 Dunwoody Drive Vice President
West Chester, PA 19380 Secretary and General
Counsel
R. Lawrence Roth Director
VESTAX Capital Corporation
1931 Georgetown Road
Hudson, OH 44236
Stephen J. Preston Executive Vice
1475 Dunwoody Drive President
West Chester, PA 19380
David L. Jacobson Senior Vice President
1475 Dunwoody Drive
West Chester, PA 19380
Jodie R. Schult Treasurer
909 Locust Street
Des Moines, IA 50309
(c) Not applicable
1998 Net
Name of Underwriting Compensation
Principal Discounts and on Brokerage
Underwriter Commissions Redemption Commissions Compensation
----------- ----------- ---------- ----------- ------------
DSI $1,754,000 $0 $0 $0
<PAGE>
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 1475 Dunwoody Drive, West Chester, PA 19380
and by Equitable Life Insurance Company of Iowa, an affiliate,
at 909 Locust Street, Des Moines, IA 50309
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 certifies that it meets the requirements of Securities
Act Rule 485(b) for effectiveness of this Registration Statement and has
caused this Registration Statement to be signed on its behalf in the City
of West Chester, and the Commonwealth of Pennsylvania, on the 29th day of April,
1999.
SEPARATE ACCOUNT NY-B
(Registrant)
By: FIRST GOLDEN AMERICAN LIFE
INSURANCE COMPANY OF NEW YORK
(Depositor)
By: -----------------------------
Barnett Chernow*
President 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 April 29, 1999.
Signature Title
--------- -----
------------------ President and Director
Barnett Chernow* of Depositor
------------------- Senior Vice President and
Mary Bea Wilkinson* Chief Financial Officer
DIRECTORS OF DEPOSITOR
--------------------- ------------------
Myles R. Tashman* Bernard Levitt*
--------------------- ------------------
Michael W. Cunningham* Roger A. Martin*
--------------------- ------------------
Stephen J. Friedman* Andrew Kalinowski*
--------------------- ------------------
Carol V. Coleman* Barnett Chernow*
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 #
2 Custodial Agreement between Registrant and The
Bank of New York . . . . . . . . . . . . . . . . . . . EX-99.B2
4(a) Individual Deferred Combination Variable and Fixed
Annuity Contract . . . . . . . . . . . . . . . . . . . EX-99.B4A
4(b) Individual Deferred Combination Variable and Fixed
Annuity Contract . . . . . . . . . . . . . . . . . . . EX-99.B4B
5(a) Individual Deferred Combination Variable and Fixed
Annuity Application . . . . . . . . . . . . . . . . . EX-99.B5A
5(b) Individual Deferred Combination Variable and Fixed
Annuity Application . . . . . . . . . . . . . . . . . EX-99.B5B
6(c) Resolution of the Board of Directors for Power
of Attorney . . . . . . . . . . . . . . . . . . . . . EX-99.B6C
8(c) Administrative Services Agreement between First
Golden American Life Insurance Company of New York
and Equitable Life Insurance Company of Iowa . . . . . EX-99.B8C
8(d) Participation Agreement between Depositor and the
Travelers Series Fund Inc. . . . . . . . . . . . . . . EX-99.B8D
8(e) Participation Agreement between Depositor and the
Greenwich Street Series. . . . . . . . . . .. . . . . EX-99.B8E
8(f) Participation Agreement between Depositor and the
Smith Barney Concert Allocation Series Inc . . . . . . EX-99.B8F
8(g) Participation Agreement between Depositor and PIMCO
Variable Insurance Trust . . . . . . . . . . . . . . . EX-99.B8G
8(h) Asset Management Agreement, dated March 30, 1998,
between First Golden and ING Investment Management
LLC . . . . . . . . . . . . . . . . . . . . . . . . . EX-99.B8H
8(i) Revolving Note Payable between First Golden
and SunTrust Bank . . . . . . . . . . . . . . . . . . EX-99.B8I
9 Opinion and Consent of Myles Tashman . . . . . . . . . EX-99.B9
10(a) Consent of Sutherland Asbill & Brennan LLP . . . . . EX-99.B10A
10(b) Consent of Independent Auditors . . . . . . . . . . . EX-99.B10B
15 Powers of Attorney . . . . . . . . . . . . . . . . . . EX-99.B15
16 Subsidiaries of ING Groep N.V. . . . . . . . . . . . . EX-99.B16
<PAGE>
<PAGE>
<PAGE>
<PAGE> EXHIBIT 2
CUSTODY AGREEMENT
(U.S. SECURITIES)
AGREEMENT, dated as of December 13, 1996 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.
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.
<PAGE>
<PAGE>
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 carry 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
in the Book-Entry System or a Depository will be held subject to
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
2
<PAGE>
<PAGE>
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.
(b) Custodian shall endeavor to notify Customer of such rights
or discretionary actions or of the date or dates by when such rights must
be excercised or such action must be taken provided that Custodian has
received, from the issuer, timely notice of such rights or discretionary
corporate action or of the date or dates such rights must be exercised or
such action must be taken. Absent actual receipt of such notice, Custodian
shall have no liability for failing to so notify Customer.
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.
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
3
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<PAGE>
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.
(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
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
4
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Instructions 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 useits
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;
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 ash 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.
5
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<PAGE>
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.
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 ime 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.
6
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<PAGE>
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: /s/Myles R. Tashman
-------------------------
Myles R. Tashman
Title: Executive Vice President
Tax Identification No.: 13-3919096
THE BANK OF NEW YORK
By: /s/Christopher M. Teevan
--------------------------
Christopher M. Teevan
Title: Vice President
7
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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.
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.
A-1
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<PAGE>
EXHIBIT 4(a)
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 Secretary: /s/Myles R. Tashman
Service Center -------------------
230 Park Avenue, Suite 966
New York, NY 10169 President: /s/Barnett Chernow
-------------------
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.
<PAGE>
<PAGE>
TABLE OF CONTENTS
THE SCHEDULE...................3 YOUR CONTRACT BENEFITS
.........12
Premium Payment and Investment
Information Cash Value Benefit
The Variable Separate Accounts Partial Withdrawal Option
Contract Facts Proceeds Payable to the
Charges Beneficiary
Income Plan Factors
DEATH BENEFIT
INTRODUCTION TO THIS PROCEEDS............13
CONTRACT...........4
Proceeds Payable to the
The Contract Beneficiary
The Owner
The Annuitant CHOOSING AN INCOME
The Beneficiary PLAN..........14
Change of Owner or Beneficiary
Annuity Benefits
PREMIUM PAYMENTS AND ALLOCATION Annuity Commencement Date
CHANGES..6 Selection
Frequency Selection
Initial Premium Payment The Income Plan
Additional Premium Payment Option The Annuity Options
Your Right to Change Allocation of Payments When Named Person Dies
Accumulation Value
What Happens if a Division is Not OTHER IMPORTANT
Available INFORMATION.......16
Sending Notice to Us
HOW WE MEASURE THE CONTRACT'S Reports to Owner
ACCUMULATION VALUE............7 Assignment - Using this
Contract as
The Variable Separate Accounts Collateral Security
Valuation Period Changing this Contract
Accumulation Value Contract Changes -
Accumulation Value in each Applicable Tax Law
Division and Fixed Misstatement of Age or Sex
Allocation Non-Participating
Fixed Account Payments We may Defer
Measurement of Investment Authority to Make
Experience Agreements
Charges Deducted from Required Note on Our
Accumulation Value on Computations
each Contract Processing Date
Copies of any Riders and Endorsements are at the back of this Contract.
THE SCHEDULE
The Schedule gives specific facts about this Contract and
its coverage. Please refer to them while reading this
Contract.
2
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<PAGE>
THE SCHEDULE
PAYMENT AND INVESTMENT INFORMATION
- -------------------------------------------------------------------------------
|-----------------------------------------------------------------------------|
| Annuitant Owner |
| [THOMAS 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] |
|-----------------------------------------------------------------------------|
INITIAL INVESTMENT
Initial Premium Payment received: $100,000.00
Your initial Accumulation Value has been invested as follows:
Percentage of
Divisions Accumulation Value
--------- ------------------
Real Estate 100.00%
------------------ -----------------
Total 100%
----- ---
3A1
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THE SCHEDULE
PAYMENT AND INVESTMENT INFORMATION
- -------------------------------------------------------------------------------
|-----------------------------------------------------------------------------|
| Annuitant Owner |
| [THOMAS 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] |
|-----------------------------------------------------------------------------|
Additional Premium Payment Information
In no event may you contribute to your IRA for the taxable year in
which you attain age 70 1/2 and thereafter (except for rollover
contributions). The minimum additional payment which may be made is
$250.00.
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. The Excess
Allocation Charge is shown in the Schedule.
3A2
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<PAGE>
THE SCHEDULE
THE 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 (the "Trust") managed by Directed Services, Inc.
ALL-GROWTH ALL-GROWTH SERIES
DIVISION Portfolio - Pilgrim Baxter & Associates, Ltd.
Manager
CAPITAL CAPITAL APPRECIATION SERIES
APPRECIATION Portfolio - INVESCO (NY), Inc.
DIVISION Manager
DEVELOPING DEVELOPING WORLD SERIES
WORLD Portfolio - Montgomery Asset Management, LLC
DIVISION Manager
FULLY FULLY MANAGED SERIES
MANAGED Portfolio - T. Rowe Price Associates, Inc.
DIVISION Manager
GROWTH GROWTH OPPORTUNITIES SERIES
OPPORTUNITIES Portfolio - Montgomery Asset Management, LLC
DIVISION Manager
MULTIPLE MULTIPLE ALLOCATION SERIES
ALLOCATION Portfolio - Zweig Advisors Inc
DIVISION Manager
RISING RISING DIVIDENDS SERIES
DIVIDENDS Portfolio - Kayne Anderson Investment
DIVISION Manager Management, LLC
STRATEGIC STRATEGIC EQUITY SERIES
EQUITY Portfolio - Zweig Advisors Inc
DIVISION Manager
VALUE VALUE EQUITY SERIES
EQUITY Portfolio - Eagle Asset Management, Inc.
DIVISION Manager
3A2
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<PAGE>
THE SCHEDULE
THE 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 ] |
|-----------------------------------------------------------------------------|
EMERGING EMERGING MARKETS SERIES
MARKETS Portfolio - J. P. Morgan Investment
DIVISION Manager Management Inc.
GLOBAL GLOBAL FIXED INCOME PORTFOLIO
FIXED Portfolio - Baring Investment Limited
INCOME Manager International
DIVISION
GROWTH AND GROWTH AND INCOME PORTFOLIO
INCOME Portfolio - Robertson, Stephens & Company
DIVISION Manager Investment Management, L.P.
HARD HARD ASSETS SERIES
ASSETS Portfolio - Van Eck Associates Corporation
DIVISION Manager
LIMITED LIMITED MATURITY BOND SERIES
MATURITY Portfolio - ING Investment Management, LLC
BOND Manager
DIVISION
LIQUID LIQUID ASSET SERIES
ASSET Portfolio - ING Investment Management, LLC
DIVISION Manager
MANAGED MANAGED GLOBAL SERIES
GLOBAL Portfolio - Putnam Investment Management, Inc.
DIVISION Manager
MID-CAP MID-CAP GROWTH SERIES
GROWTH Portfolio - Massachusetts Financial Services Co.
DIVISION Manager
REAL REAL ESTATE SERIES
ESTATE Portfolio - EII Realty Securities, Inc.
DIVISION Manager
RESEARCH RESEARCH PORTFOLIO
DIVISION Portfolio - Massachusetts Financial Services
Manager Company
SMALL SMALL CAP SERIES
CAP Portfolio - Fred Alger Management, Inc.
DIVISION Manager
3B2
<PAGE>
<PAGE>
THE SCHEDULE
THE 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 ] |
|-----------------------------------------------------------------------------|
TOTAL TOTAL RETURN PORTFOLIO
RETURN Portfolio - Massachusetts Financial Services
DIVISION Manager Company
VALUE + VALUE + GROWTH PORTFOLIO
GROWTH Portfolio - Robertson, Stephens & Company
DIVISION Manager Investment Management, L.P.
NOTE: PLEASE REFER TO THE PROSPECTUSES FOR THE CONTRACT AND THE GCG
TRUST FOR MORE DETAILS.
Each Division below invests in shares of the mutual fund portfolio (the
"Portfolio") designated. Each portfolio is a part of the PIMCO Trust
managed by Pacific Investment Management Company ("PIMCO")
HIGH YIELD HIGH YIELD BOND PORTFOLIO
BOND Portfolio - PIMCO.
DIVISION Manager
STOCKSPLUS STOCKSPLUS GROWTH AND INCOME PORTFOLIO
GROWTH AND Portfolio - PIMCO
INCOME Manager
DIVISION
3B3
<PAGE>
<PAGE>
THE SCHEDULE
CERTIFICATE 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 Money Market
Portfolio 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 taxes. 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 thirty days 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 Amount:
Separate Account Divisions: 1.25% monthly or 3.75%
quarterly of Accumulation Value.
.
Fixed Allocations: Interest earned on a 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 Adjustments
3C1
<PAGE>
<PAGE>
THE SCHEDULE
CERTIFICATE 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 greater of (i) the Cash Surrender Value, (ii) the
Accumulation Value, and (iii) 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:
Standard:
- --------
(1) Start with the Guaranteed Death Benefit from the prior Valuation Date;
(2) Add any additional premiums paid during the current Valuation Period to(1);
(3) Subtract any Partial Withdrawal made during the current Valuation Period
from (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.
The Guaranteed Death Benefit Option after the change of Contractowner
will remain the same as before the change.
3C2
<PAGE>
<PAGE>
THE SCHEDULE
CERTIFICATE 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 a 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 of less than
28 days
3C3
<PAGE>
<PAGE>
THE SCHEDULE
CHARGES AND FEES
- -------------------------------------------------------------------------------
|-----------------------------------------------------------------------------|
| 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 $30 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 Surrender
Elapsed Charges
Since Premium ---------
Payment
--------------
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.
3D1
<PAGE>
<PAGE>
THE SCHEDULE
CHARGES AND FEES
- -------------------------------------------------------------------------------
|-----------------------------------------------------------------------------|
| 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 0.003030% of the assets
- ---------------------------------
in the Separate Account Division on a daily basis (equivalent to an
annual rate of 1.10) for mortality and expense risks. This charge is
not deducted from the Fixed Account values.
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.
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 Fixed
Period Monthly Period Monthly Period Monthly
of Years Income of Years Income of Years Income
- --------- ------- -------- ------- -------- -------
11 $8.88 21 $5.33
2 $42.9 12 8.26 22 5.16
3 6 13 7.73 23 5.00
4 29.06 14 7.28 24 4.85
5 22.12 15 6.89 25 4.72
6 17.95 16 6.54 26 4.60
7 15.18 17 6.24 27 4.49
8 13.20 18 5.98 28 4.38
9 11.71 19 5.74 29 4.28
10 10.56 20 5.53 30 4.19
9.64
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
60 5.45/4.96 4.68/4.40 4.74/4.42
65 6.11/5.52
70 6.91/6.26 4.99/4.72 5.16/4.79
75 7.79/7.18
80 8.61/8.18 5.30/5.07 5.75/5.29
85 & 9.24/9.01
Over 5.54/5.40 6.52/5.97
5.68/5.62 7.33/6.74
5.75/5.73 8.61/7.90
5.77/5.76 10.43/9.50
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.
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.
5
<PAGE>
<PAGE>
PREMIUM PAYMENTS AND ALLOCATION CHARGES
- -------------------------------------------------------------------------------
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 allocations changes permitted.
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 Account.
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 judgement, 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.
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 of the Maturity Date.
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 + J + .0025 ) -1
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 that 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.
9
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HOW WE MEASURE THE CONTRACT'S ACCUMULATION VALUE (continued)
- -------------------------------------------------------------------------------
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.
10
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<PAGE>
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 Charges;
(4) We deduct any charges shown in the Schedule that have been
incurred but not yet deducted, including:
(a) any first-year administrative fee that has not yet been
deducted;
(b) any quarterly administrative fee to be deducted on the next
Contract Processing Date;
(c) the pro rata part of any charges for Optional Benefit Riders; and
(d) any applicable premiums or similar tax.
Canceling 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 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.
11
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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.
12
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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 2 by making a written request at least 30 days
prior to the Annuity Commencement Date. Unless you have chosen
otherwise, Annual Ratchet 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 the 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.
13
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<PAGE>
CHOOSING AN INCOME PLAN (continued)
- -------------------------------------------------------------------------------
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
for 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.
14
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<PAGE>
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 right 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, and 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.
15
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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 CashSurrender 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.
16
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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.
GA-IA-1000-10/96
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<PAGE>
<PAGE>
<PAGE>
EXHIBIT 4(b)
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: /s/ Myles R. Tashman
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
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<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
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<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.
PORTFOLIO
MID-CAP GROWTH
RESEARCH
TOTAL RETURN
Each Division listed below invests in shares of the mutual fund
portfolio (the "Portfolio") designated. Each portfolio is a part of
the Travelers Series Fund Inc., a trust.
PORTFOLIO
HIGH INCOME INTERNATIONAL EQUITY
LARGE CAP VALUE MONEY MARKET
The Division listed below invests in shares of the mutual fund
portfolio (the "Portfolio") designated. The portfolio is a part of
Greenwich Street Series, a trust.
PORTFOLIO
APPRECIATION
Each Division listed below invests in shares of the mutual fund
portfolio (the "Portfolio") designated. Each portfolio is a part of
Smith Barney Concert Series Inc., a trust.
PORTFOLIO
HIGH GROWTH GROWTH
BALANCED CONSERVATIVE
INCOME
NOTE: PLEASE REFER TO THE PROSPECTUS FOR THE CONTRACT AND THE
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
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<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.
FG-IA-1000-12/95
9
<PAGE>
<PAGE>
How We Measure the Contract's Accumulation Value
(continued)
- ------------------------------------------------------------------------------
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.
FG-IA-1000-12/95
11
<PAGE>
<PAGE>
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.
FG-IA-1000-12/95
12
<PAGE>
<PAGE>
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.
FG-IA-1000-12/95
13
<PAGE>
<PAGE>
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.
FG-IA-1000-12/95
14
<PAGE>
<PAGE>
Choosing an Income Plan (continued)
- ------------------------------------------------------------------------------
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
15
<PAGE>
<PAGE>
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
16
<PAGE>
<PAGE>
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
17
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
<PAGE>
<PAGE>
EXHIBIT 5(a)
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)
MID-CAP GROWTH MASSACHUSETTS FINANCIAL SERVICES %
COMPANY (MFS)
TOTAL RETURN MASSACHUSETTS FINANCIAL SERVICES %
COMPANY (MFS)
SMALL CAP FRED ALGER MANAGEMENT, INC. %
GROWTH & INCOME ALLIANCE CAPITAL MANAGEMENT L.P. %
GROWTH JANUS CAPITAL CORPORATION %
FULLY MANAGED T. ROWE PRICE ASSOCIATES INC. %
STRATEGIC EQUITY AIM CAPITAL MANAGEMENT, INC. %
EQUITY INCOME T. ROWE PRICE ASSOCIATES INC. %
RISING DIVIDENDS KAYNE, ANDERSON INV. MGMT., L.P. %
CAPITAL APPRECIATION AIM CAPITAL MANAGEMENT, INC. %
VAlUE EQUITY EAGLE ASSET MANAGEMENT, INC. %
MANAGED GLOBAL PUTNAM INVESTMENT MANAGEMENT, INC. %
EMERGING MARKETS PUTNAM INVESTMENT MANAGEMENT, INC. %
HARD ASSETS BARING INTERNATIONAL INVESTMENT LIMITED %
REAL ESTATE EII REALTY SECURITIES, INC. %
LIMITED MATURITY BOND ING INVESTMENT MANAGEMENT, LLC %
LIQUID ASSET ING INVESTMENT MANAGEMENT, LLC %
GLOBAL FIXED INCOME BARING INTERNATIONAL INVESTMENT LIMITED %
DEVELOPING WORLD BARING INTERNATIONAL INVESTMENT LIMITED %
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, P.O. Box 11520, Church Street Station, New York, NY 10286-1520
1-800-963-9539
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, P.O. Box 11520, Church Street Station, New York, NY 10286-1520
1-800-963-9539
FG-AA-1000-12/95
<PAGE>
<PAGE>
<PAGE>
<PAGE>
EXHIBIT 5(b)
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)
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EXHIBIT 6(c)
RESOLVED, the Board of Directors of First Golden American Life
Insurance Company of New York ("First Golden") hereby authorizes the
use of powers of attorney by each First Golden Director and Officer
granting to the General Counsel or any Associate General Counsel the
authority to sign as attorney-in-fact any and all of First Golden's
registration statements to be filed with the Security and Exchange
Commission and amendments thereto and any other documents necessary
or advisable in connection with First Golden's registration
statements or amendments thereto, each such power of attorney
becoming effective only upon its manual signature by the Director
and/or Officer granting said power of attorney.
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EXHIBIT 8(c)
ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement (this "Agreement") is
made effective as of June 1, 1997 ("Effective Date"), by and between
First Golden American Life Insurance Company of New York ("Company")
and Equitable Life Insurance Company of Iowa("Provider").
WHEREAS, Provider has extensive experience in life insurance
business operations; and
WHEREAS, Company desires Provider to perform certain
administrative and special services (collectively, "services") for
Company in its insurance operations and desires further to make use
in its day-to-day operations of certain property, equipment and
facilities (collectively, "facilities") of Provider as Company may
request; and
WHEREAS, Provider and Company contemplate that such an
arrangement will achieve certain operating economies and improve
services to the mutual benefit of both; and
WHEREAS, Provider and Company wish to assure that all charges
for services and the use of facilities incurred hereunder are
reasonable and in accordance with the requirements of New York
Insurance Department Regulation No. 33 and to the extent practicable
reflect actual costs and are arrived at in a fair and equitable
manner, and that estimated costs, whenever used, are adjusted
periodically, to bring them into alignment with actual costs; and
WHEREAS, Provider and Company wish to identify the services to
be rendered to Company by Provider and the facilities to be used by
Company and to provide a method of fixing basis for determining the
charges to be made to Company;
NOW THEREFORE, in consideration of the premises and of the
mutual promises set forth herein, and intending to be legally bound
hereby, Provider and Company agree as follows:
1. PERFORMANCE OF SERVICES AND USE OF FACILITIES. Subject to the
terms, conditions and limitations of this Agreement, Provider
agrees to the extent requested by Company to perform diligently
and in a professional manner such services for Company as
Company determines to be reasonably necessary in the conduct of
its insurance operations and as set forth in Section 2 of this
Agreement.
Subject to the terms, conditions and limitations of this
Agreement, Provider agrees to the extent requested by Company to
make available to Company such of its facilities as Company may
determine to be reasonably necessary in the conduct of it
insurance operations, including data processing equipment,
business property (whether owned or leased) and communications
equipment.
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Provider agrees at all times to maintain sufficient facilities
and trained personnel of the kind necessary to perform this
Agreement.
(a) CAPACITY OF PERSONNEL AND STATUS OF FACILITIES.
Whenever Provider utilizes its personnel to perform
services for Company pursuant to this Agreement, such
personnel shall at all times remain employees of Provider
subject solely to its direction and control, and Provider
shall alone retain full liability to such employees for
their welfare, salaries, fringe benefits, legally required
employer contributions and tax obligations.
No facility of Provider used in performing services
for or subject to use by Company shall be deemed to be
transferred, assigned, conveyed or leased by performance or
use pursuant to this Agreement.
(b) EXERCISE OF JUDGMENT IN RENDERING SERVICES. In
providing any services hereunder which require the exercise
of judgment by Provider, Provider shall perform any such
service in accordance with any standards and guidelines
Company develops and communicates to Provider. In
performing any services hereunder, Provider shall at all
times act in a manner reasonably calculated to be in or not
opposed to the best interests of Company.
(c) CONTROL. The performance of services by Provider for
Company pursuant to this Agreement shall in no way impair
the absolute control of the business and operations of
Provider or Company by their respective Boards of
Directors. Provider shall act hereunder so as to assure
the separate operating identity of Company.
(d) USE OF DATA PROCESSING FACILITIES. Subject to the
terms (including any limitations and restrictions) of any
applicable software or hardware licensing agreement then in
effect between Provider and any licensor, Provider shall,
upon termination of this Agreement, grant to Company a
perpetual license, with payment of a reasonable fee, in any
electronic data processing software developed or used by
Provider in connection with the services provided to
Company hereunder if such software is not commercially
available and is necessary, in Company's reasonable
judgment, for Company to perform subsequent to termination
the functions provided by Provider hereunder.
2. SERVICES. The performance of Provider under this Agreement with
respect to the business and operations of Company shall at all
times be subject to the direction and control of the Board of
Directors of Company.
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Subject to the foregoing and to the terms, conditions and
limitations of this Agreement, Provider shall provide to Company
the services set forth below.
(a) ACCOUNTING, DATA PROCESSING, TAX AND AUDITING. Under
the general supervision of the Board of Directors of
Company, and provided that the records and transactions are
initiated by Company, the final product is verified by
Company and Provider shall cause Company's Chief
Administrative Officer (or his or her designee within
Company) to be familiar with all details of services
provided, including, but not limited to, accounting and
adjusting entries, Provider shall provide the following
accounting services: preparation and maintenance of the
financial statements and reports including annual
statements on both statutory and GAAP bases and tax
returns, and processing of the related financial records
and transactions of Company. Provider shall also provide
such assistance as may be required with respect to
corporate tax and auditing services.
(b) UNDERWRITING. Subject to underwriting standards
established by Company and communicated to Provider,
Provider shall provide underwriting services, including
review of policy applications, MIB review and medical
review. All final underwriting decisions will be made by
Company.
(c) CLAIMS. Subject to claims settlement procedures
established by Company and communicated to Provider,
Provider shall provide claims consulting services. Company
shall exercise final approval authorization for all claims
settlements.
(d) ADVERTISING AND SALES PROMOTIONAL SERVICES. Under the
general supervision of the Board of Directors of Company
and subject to the direction, control and prior approval of
the responsible officers of Company, Provider shall provide
typesetting of promotional materials and assistance in
fulfillment.
(e) FUNCTIONAL SUPPORT SERVICES. Provider shall provide
(i) actuarial services, including periodic review of
reserves by line of business, periodic audit of annuity
benefit payment calculations, rate and profit share
analysis, counseling on reserving requirements, work
required for or in support of rate and/or form submissions
and actuarial certifications, (ii) legal services regarding
general corporate matters, and (iii) employee relations
services, payroll and benefits.
(f) DISASTER RECOVERY PROGRAM. Provider agrees to
maintain back-up systems and contingency plans to assure
that any work stoppages, interruptions, or other failures
resulting from any types of disaster will not jeopardize
the integrity of data or records maintained by Provider
under this Agreement
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on behalf of the Company. Provider warrants that it will
maintain such systems and plans in conformity with prudent
business practices.
3. CHARGES. Company agrees to reimburse Provider for services and
facilities provided by Provider to Company pursuant to this
Agreement. The charge to Company for such services and
facilities shall include all direct and directly allocable
expenses, reasonably and equitably determined to be attributable
to Company by Provider, plus a reasonable charge for direct
overhead, the amount of such charge for overhead to be agreed
upon by the parties from time to time.
Subject to New York Insurance Department Regulation 33, the
bases for determining such charges to Company shall be those
used by Provider for internal cost distribution including, where
appropriate, time records prepared at least annually for this
purpose. Such bases shall be modified and adjusted by mutual
agreement where necessary or appropriate to reflect fairly and
equitably the actual incidence of cost incurred by Provider on
behalf of Company.
Cost analyses will be made at least annually by Provider to
determine, as closely as possible, the actual cost of services
rendered and facilities made available to Company hereunder.
Provider shall forward to Company the information developed by
these analyses, and such information shall be used to develop
bases for the distribution of expenses which more currently
reflect the actual incidence of cost incurred by Provider on
behalf of Company.
Provider's determination of charges hereunder shall be presented
to Company, and if Company objects to any such determination, it
shall so advise Provider within thirty (30) days of receipt of
notice of said determination. Unless the parties can reconcile
any such objection, they shall agree to the selection of a firm
of independent certified public accountants which shall
determine the charges properly allocable to Company and shall,
within a reasonable time, submit such determination, together
with the basis therefor, in writing to Provider and Company
whereupon such determination shall be binding. The expenses of
such a determination by a firm of independent certified public
accountants shall be borne equally by Provider and Company.
4. PAYMENT. Provider shall submit to Company within thirty (30)
days of the end of each calendar month a written statement of
the amount estimated to be owed by Company for services and the
use of facilities pursuant to this Agreement in that calendar
month, and Company shall pay to Provider within thirty (30) days
following receipt of such written statement the amount set forth
in the statement.
Within thirty (30) days after the end of each calendar quarter,
Provider will submit to Company a detailed written statement of
the charges due from Company to Provider in the preceding
calendar quarter, including charges not included in any previous
statements,
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and any balance payable or to be refunded as shown
in such statement shall be paid or refunded within fifteen (15)
days following receipt of such written statement by Company.
5. ACCOUNTING RECORDS AND DOCUMENTS. Provider shall be responsible
for maintaining full and accurate accounts and records of all
services rendered and facilities used pursuant to this Agreement
and such additional information as Company may reasonably
request for purposes of its internal bookkeeping and accounting
operations. Provider shall keep such accounts and records
insofar as they pertain to the computation of charges hereunder
available at its principal offices for audit, inspection and
copying by Company and persons authorized by it or any
governmental agency having jurisdiction over Company during all
reasonable business hours.
With respect to accounting and statistical records prepared by
Provider by reason of its performance under this Agreement, such
records shall be delivered to Company within thirty (30) days
from the end of the month to which the records pertain.
6. OTHER RECORDS AND DOCUMENTS. All books, records, and files
established and maintained by Provider by reason of its
performance under this Agreement which, absent this Agreement,
would have been held by Company, shall be deemed the property of
Company, and shall be subject to examination at all times by
Company and persons authorized by it or any governmental agency
having jurisdiction over Company, and shall be delivered to
Company at least quarterly.
With respect to original documents other than those provided for
in Section 5 hereof which would otherwise be held by Company and
which may be obtained by Provider in performing under this
Agreement. Provider shall deliver such documents to Company
within thirty (30) days of their receipt by Provider except
where continued custody of such original documents is necessary
to perform hereunder.
7. RIGHT TO CONTRACT WITH THIRD PARTIES. Nothing herein shall be
deemed to grant Provider an exclusive right to provide services
to Company, and Company retains the right to contract with any
third party, affiliated or unaffiliated, for the performance of
services or for the use of facilities as are available to or
have been requested by Company pursuant to this Agreement.
8. CONTACT PERSON(S). Company and Provider each shall appoint one
or more individuals who shall serve as contact person(s) for the
purpose of carrying out this Agreement. Such contact person(s)
shall be authorized to act on behalf of their respective parties
as to the matters pertaining to this Agreement. Effective upon
execution of this Agreement, the initial contact person(s) shall
be those set forth in Appendix A.
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Each party shall notify the other, in writing, as to the name,
address and telephone number of any replacement for any such
designated contact person.
9. TERMINATION AND MODIFICATION. This Agreement shall remain in
effect until terminated by either Provider or Company upon
giving thirty (30) days or more advance written notice, provided
that Company shall have the right to elect to continue to
receive data processing services and/or to continue to utilize
data processing facilities and related software for up to one
year from the date of such notice. Upon termination, Provider
shall promptly deliver to Company all books and records that
are, or are deemed by this Agreement to be, the property of
Company.
10. SETTLEMENT ON TERMINATION. No later than ninety (90) days after
the effective date of Complete Termination of this Agreement,
Provider shall deliver to Company a detailed written statement
for all charges incurred and not included in any previous
statement to the effective date of termination. The amount owed
or to be refunded hereunder shall be due and payable within
thirty (30) days of receipt of such statement.
11. ASSIGNMENT. This Agreement and any rights pursuant hereto shall
not be assignable by either party hereto, except as set forth
herein or by operation of law. Except as and to the extent
specifically provided in this Agreement, nothing in this
Agreement, expressed or implied, is intended to confer on any
person other than the parties hereto, or their respective legal
successors, any rights, remedies, obligations or liabilities, or
to relieve any person other than the parties hereto, or their
respective legal successors, from any obligations or liabilities
that would otherwise be applicable. The representations,
warranties, covenants and agreements contained in this Agreement
shall be binding upon, extend to and inure to the benefit of the
parties hereto, their, and each of their, successors and assigns
respectively.
12. GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of
the State of New York applicable to contracts made and to be
performed in that State, without regard to principles of
conflict of laws.
13. ARBITRATION. In the event of any irreconcilable dispute between
the parties in connection with this Agreement, the dispute shall
be submitted to arbitration. Either party may submit the
dispute to arbitration by notifying the other of its submission
and naming its arbitrator. The other party shall name its
arbitrator within 30 days after receiving such notice. If the
arbitrators cannot agree, they shall choose an umpire through
the nomination of three persons by each arbitrator, the
declination by each arbitrator of two of the nominees named by
the other arbitrator and the drawing of lots to choose between
the two arbitrators within thirty days after the arbitrators and
umpire, if any, are chosen. The arbitrators and umpire shall be
disinterested insurance company executives. The arbitrators are
relieved from judicial formalities and may refrain from following strict
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rules of evidence. The decisions of the arbitrators and umpire,
or the majority of them, shall be final and binding upon the parties.
Each party shall bear the expense of its own arbitrator and one-half
the other expenses of the arbitration proceedings. Any arbitration
shall take place in New York, New York, unless otherwise mutually agreed.
14. NOTICE. All notices, statements or requests provided for
hereunder shall be deemed to have been duly given when delivered
by hand to an officer of the other party, or when deposited with
the U.S. Postal Service, as first class certified or registered
mail, postage prepaid, overnight courier service, telex or
telecopier, addressed:
(a) if to Company:
Mary Bea Wilkinson
First Golden American Life Insurance Company of
New York
230 Park Avenue, Suite 966
Helmsley Building
New York, New York 10169-0999
(b) if to Provider:
John Merriman
Equitable Life Insurance Company of Iowa
700 Locust Street
Des Moines, Iowa 50309
or to such other persons or places as each party may from time
to time designate by written notice sent as aforesaid.
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15. ENTIRE AGREEMENT. This Agreement, together with such amendments
as may from time to time be executed in writing by the parties,
constitutes the entire agreement and understanding between the
parties in respect of the transactions contemplated hereby and
supersedes all prior agreements, arrangements and understandings
relating to the subject matter hereof. Any amendments to this
Agreement are subject to prior approval by the Superintendent,
State of New York, Department of Insurance.
16. SECTION HEADINGS. Section headings contained herein are for
reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
17. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
18. ADDITIONAL PROVISIONS. Appendix A, attached hereto, is hereby
incorporated into and made a part of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate by their respective officers duly authorized so
to do, and their respective corporate seals to be affixed hereto, as
of the date and year first above written.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
/s/David L. Jacobson
- -------------------------------------
David L. Jacobson, Sr. Vice President (Seal)
Attest: /s/Myles R. Tashman
----------------------------
Myles R. Tashman, Secretary
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
/s/John Merriman
- ------------------------
John Merriman (Seal)
Attest:_______________________________
APPENDIX A
CONTACT PERSON(S) FOR PROVIDER
John Merriman
CONTACT PERSON(S) FOR COMPANY
Mary Bea Wilkinson
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EXHIBIT 8(d)
PARTICIPATION AGREEMENT
AMONG
SMITH BARNEY/TRAVELERS SERIES FUND INC.,
SMITH BARNEY MUTUAL FUNDS MANAGEMENT INC.
AND
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
THIS AGREEMENT, made as of the ____ day of ___________, 1997 and effective
as of the ____ day of ___________, 1995 by and among the FIRST GOLDEN AMERICAN
LIFE INSURANCE COMPANY 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 SMITH BARNEY/TRAVELERS SERIES
FUND INC., a Maryland corporation (hereinafter the "Fund"), and SMITH BARNEY
MUTUAL FUNDS MANAGEMENT INC. (hereinafter the "Adviser"), a Delaware
corporation.
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 expected to be obtained from the Securities and Exchange Commission
(the "SEC"), expects to be 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 "l940 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 l940 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 l940 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 l.l, 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 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 by
such designee shall constitute receipt by the Fund; provided that the Fund
receives 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 Iowa Code Section 508A.1 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
Maryland 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 not so qualify in
the future.
2.4. The Company represents that the Contacts are currently treated as
endowment, annuity or life insurance contacts, 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 1040 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
polices) 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 Maryland 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 Maryland and that it does and will
comply in all material respects with the 1940 Act.
2.8. The Adviser represents and warrants that the Adviser is and shall
remain duly registered in all material respects under all applicable federal
and state securities 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 Maryland 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, 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 Regulations. In the event of any changes to such Section or
Regulations 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 appropriate 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 able 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 agent), 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 New York.
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. The 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 obligation 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 contractowners of variable insurance products of 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 so
elects to make available additional shares of 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 contractowner 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 contractowners 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:
Smith Barney/Travelers Series Fund Inc.
388 Greenwich Street, 22nd Floor
New York, NY 10013
Attn: Christina T. Sydor, Secretary
If to the Company:
First Golden American Life Insurance
Company of New York
230 Park Avenue, Suite 966
New York, NY 10169
Attn: Myles R. Tashman, Secretary
If to the Adviser:
Smith Barney Mutual Funds Management Inc.
388 Greenwich Street, 22nd Floor
New York, NY 10013
Attn: Christina T. Sydor, General Counsel
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 provision hereof
or otherwise affect their construction or effect.
12.4. This Agreement maybe 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 stat 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.
FIRST GOLDEN AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK
By its authorized officer
By:_____________________________________
Title:__________________________________
Date:___________________________________
SMITH BARNEY/TRAVELERS SERIES FUND INC.
By its authorized officer
By:_____________________________________
Title:__________________________________
Date:___________________________________
SMITH BARNEY MUTUAL FUNDS MANAGEMENT INC.
By its authorized officer
By:_____________________________________
Title:__________________________________
Date:___________________________________
EXHIBIT B
Smith Barney Income and Growth Portfolio
Smith Barney International Equity Portfolio
Smith Barney High Income Portfolio
Smith Barney Money Market Portfolio
7.1. The Board will monitor the Fund for the existence of any material
irreconcilable conflict among the interests of the contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict
may arise for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or state
insurance, tax or securities laws or regulations, or a public ruling, private
letter ruling, no-action or interpretive letter, or any similar action by
insurance, tax, or securities regulatory authorities; (c) an administrative or
judicial decision in any relevant proceeding; (d) the manner in which the
investments of any Portfolio are being managed; (e) a difference in voting
instructions given by variable annuity contract owners and variable life
insurance contract owners; or (f) a decision by an insurer to disregard the
voting instructions of contract owners. The Board shall promptly inform the
Company if it determines that an irreconcilable material conflict exists and
the implications thereof.
7.2. The Company will report any potential or existing conflicts of
which it is aware to the Board. The Company will assist the Board in carrying
out its responsibilities under the Mixed and Shared Funding Exemptive Order,
by providing the Board upon request with all information reasonably necessary
for the Board to consider any issues raised. This includes, but is not
limited to, an obligation by the Company to inform the Board whenever contract
owner voting instructions are disregarded.
7.4. If a material irreconcilable conflict arises because of a decision
by the Company to disregard contract owner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company may be required, at the Fund's election, to withdraw the affected
Account's investment in the Fund and terminate this Agreement with respect to
such Account; provided, however that such withdrawal and termination shall be
limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested members of the
Board. Any such withdrawal and termination must take place within six (6)
months after the Fund gives written notice that this provision is being
implemented, and until the end of that six month period the Adviser and Fund
shall continue to accept and implement orders by the Company for the purchase
(and redemption) of shares of the Fund.
7.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Account's investment in the Fund and terminate this Agreement with
respect to such Account within six months after the Board informs the Company
in writing that it has determined that such decision has created an
irreconcilable material conflict; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested
members of the Board. Until the end of the foregoing six month period, the
Adviser and Fund shall continue to accept and implement orders by the Company
for the purchase (and redemption) of shares of the Fund.
<PAGE>
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EXHIBIT 8(e)
PARTICIPATION AGREEMENT
AMONG
SMITH BARNEY SERIES FUND
SMITH BARNEY MUTUAL FUNDS MANAGEMENT INC.
AND
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
THIS AGREEMENT, made as of the ____ day of ___________, 1997 and effective
as of the ____ day of ___________, 1995 by and among the FIRST GOLDEN AMERICAN
LIFE INSURANCE COMPANY 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 SMITH BARNEY SERIES FUND, a
Masachusetts business trust (hereinafter the "Fund"), and SMITH BARNEY
MUTUAL FUNDS MANAGEMENT INC. (hereinafter the "Adviser"), a Delaware
corporation.
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 expected to be obtained from the Securities and Exchange Commission
(the "SEC"), expects to be 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 "l940 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 l940 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 l940 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 l.l, 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 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 by
such designee shall constitute receipt by the Fund; provided that the Fund
receives 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 Iowa Code Section 508A.1 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
Maryland 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 not so qualify in
the future.
2.4. The Company represents that the Contacts are currently treated as
endowment, annuity or life insurance contacts, 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 1040 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
polices) 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 Maryland 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 Maryland and that it does and will
comply in all material respects with the 1940 Act.
2.8. The Adviser represents and warrants that the Adviser is and shall
remain duly registered in all material respects under all applicable federal
and state securities 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 Maryland 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, 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 Regulations. In the event of any changes to such Section or
Regulations 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 appropriate 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 able 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 agent), 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 New York.
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. The 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 obligation 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 contractowners of variable insurance products of 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 so
elects to make available additional shares of 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 contractowner 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 contractowners 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:
Smith Barney Series Fund
388 Greenwich Street, 22nd Floor
New York, NY 10013
Attn: Christina T. Sydor, Secretary
If to the Company:
First Golden American Life Insurance
Company of New York
230 Park Avenue, Suite 966
New York, NY 10169
Attn: Myles R. Tashman, Secretary
If to the Adviser:
Smith Barney Mutual Funds Management Inc.
388 Greenwich Street, 22nd Floor
New York, NY 10013
Attn: Christina T. Sydor, General Counsel
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 provision hereof
or otherwise affect their construction or effect.
12.4. This Agreement maybe 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 stat 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.
FIRST GOLDEN AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK
By its authorized officer
By:_____________________________________
Title:__________________________________
Date:___________________________________
SMITH BARNEY SERIES FUND
By its authorized officer
By:_____________________________________
Title:__________________________________
Date:___________________________________
SMITH BARNEY MUTUAL FUNDS MANAGEMENT INC.
By its authorized officer
By:_____________________________________
Title:__________________________________
Date:___________________________________
EXHIBIT B
Appreciation Portfolio
7.1. The Board will monitor the Fund for the existence of any material
irreconcilable conflict among the interests of the contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict
may arise for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or state
insurance, tax or securities laws or regulations, or a public ruling, private
letter ruling, no-action or interpretive letter, or any similar action by
insurance, tax, or securities regulatory authorities; (c) an administrative or
judicial decision in any relevant proceeding; (d) the manner in which the
investments of any Portfolio are being managed; (e) a difference in voting
instructions given by variable annuity contract owners and variable life
insurance contract owners; or (f) a decision by an insurer to disregard the
voting instructions of contract owners. The Board shall promptly inform the
Company if it determines that an irreconcilable material conflict exists and
the implications thereof.
7.2. The Company will report any potential or existing conflicts of
which it is aware to the Board. The Company will assist the Board in carrying
out its responsibilities under the Mixed and Shared Funding Exemptive Order,
by providing the Board upon request with all information reasonably necessary
for the Board to consider any issues raised. This includes, but is not
limited to, an obligation by the Company to inform the Board whenever contract
owner voting instructions are disregarded.
7.4. If a material irreconcilable conflict arises because of a decision
by the Company to disregard contract owner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company may be required, at the Fund's election, to withdraw the affected
Account's investment in the Fund and terminate this Agreement with respect to
such Account; provided, however that such withdrawal and termination shall be
limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested members of the
Board. Any such withdrawal and termination must take place within six (6)
months after the Fund gives written notice that this provision is being
implemented, and until the end of that six month period the Adviser and Fund
shall continue to accept and implement orders by the Company for the purchase
(and redemption) of shares of the Fund.
7.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Account's investment in the Fund and terminate this Agreement with
respect to such Account within six months after the Board informs the Company
in writing that it has determined that such decision has created an
irreconcilable material conflict; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested
members of the Board. Until the end of the foregoing six month period, the
Adviser and Fund shall continue to accept and implement orders by the Company
for the purchase (and redemption) of shares of the Fund.
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EXHIBIT 8(f)
PARTICIPATION AGREEMENT
Among
SMITH BARNEY CONCERT SERIES INC.,
TRAVELERS INVESTMENT ADVISER, INC.
and
FIRST GOLDEN LIFE INSURANCE COMPANY OF NEW YORK
THIS AGREEMENT, made as of the [ ] st day of [ ] 1999,
by and among the FIRST GOLDEN LIFE INSURANCE COMPANY 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 SMITH BARNEY CONCERT
SERIES INC., a Maryland corporation (hereinafter the "Fund"), and
TRAVELERS INVESTMENT ADVISER, INC. (hereinafter the "Adviser"), a
Delaware corporation.
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"), expects to be 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 has obtained an order from the SEC, granting
Participating Insurance Companies and variable annuity
-1-
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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 "l940 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 l940 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, to the extent required under federal law,
has registered or will register each Account as a unit investment
trust under the l940 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 l.l, the Company shall be the designee of
the Fund for receipt of such orders from each Account
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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 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 by such designee shall constitute receipt by the Fund;
provided that the Fund receives notice of
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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 purposes 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
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<PAGE>
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.
-5-
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<PAGE>
ARTICLE II. Representations and Warranties
------------------------------
2.1. The Company represents and warrants that the Contracts are
or will be registered under the 1933 Act, or qualify for an exemption
therefrom; 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 the laws of the State
of New York 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, unless exempt
therefrom, 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 Maryland 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 not 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.
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<PAGE>
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
Maryland 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 Maryland and that it
does and will comply in all material respects with the 1940 Act.
2.8. The Adviser represents and warrants that the Adviser is
and shall remain duly registered in all material respects under all
applicable federal and state securities 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 Maryland 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
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<PAGE>
<PAGE>
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 in a combined document with the prospectuses of other funds
invested in by the Account (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;
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<PAGE>
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
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<PAGE>
<PAGE>
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, 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
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<PAGE>
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 Regulations. In the event of
any changes to such Section or Regulations 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
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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 appropriate 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
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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:
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(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
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<PAGE>
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
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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
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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 regulated 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 agent), 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
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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 New York.
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. The 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,
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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 obligation 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 contractowners of
variable insurance products of 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
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(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.
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(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 so elects to make
available additional shares of 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
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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 contractowner
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 contractowners
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:
Smith Barney Concert Series Inc.
388 Greenwich Street, 22nd Floor
New York, NY 10013
Attn: Christina T. Sydor, Secretary
If to the Company:
First Golden Life Insurance Company
of New York
230 Park Avenue, Suite 966
New York, NY 10169
Attn: Myles R. Tashman, Secretary
If to the Adviser:
Travelers Investment Adviser, Inc.
388 Greenwich Street, 22nd Floor
New York, NY 10013
Attn: Christina T. Sydor, General Counsel
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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
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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.
FIRST GOLDEN LIFE INSURANCE COMPANY OF NEW YORK
By its authorized officer
By:
-----------------------
Title:
--------------------
Date:
---------------------
SMITH BARNEY CONCERT SERIES INC.
By its authorized officer
By:
-----------------------
Title:
--------------------
Date:
---------------------
TRAVELERS INVESTMENT ADVISER, INC.
By its authorized officer
By:
-----------------------
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Title:
--------------------
Date:
---------------------
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Schedule A
Asset Accounts of the Company Date Estab.
First Golden Life Insurance Company 6/13/96
of New York Separate Account NY-B
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Schedule B
Select High Growth Portfolio
Select Growth Portfolio
Select Balanced Portfolio
Select Conservative Portfolio
Select Income Portfolio
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Schedule C
Accounts Form No.
First Golden Life Insurance Company of New York FG-IA-1000-12/95
Deferred Combination Variable and
Fixed Annuity Contract
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EXHIBIT 8(g)
PARTICIPATION AGREEMENT
AMONG
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
PIMCO VARIABLE INSURANCE TRUST,
AND
PIMCO FUNDS DISTRIBUTORS LLC
THIS AGREEMENT, dated as of the 1st day of May, 1998 by
and among First Golden American Life Insurance Company of New York,
(the "Company"), a New York life insurance 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 account hereinafter referred to as the "Account"),
PIMCO Variable Insurance Trust (the "Fund"), a Delaware business
trust, and PIMCO Funds Distributors LLC (the "Underwriter"), a
Delaware limited liability company.
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
life insurance and variable annuity contracts (the "Variable
Insurance Products") to be offered by insurance companies which
have entered into participation agreements with the Fund and
Underwriter ("Participating Insurance Companies");
WHEREAS, the shares of beneficial interest of the Fund are
divided into several series of shares, each designated a
"Portfolio" and representing the interest in a particular managed
portfolio of securities and other assets;
WHEREAS, the Fund has obtained an order from the Securities
and Exchange Commission (the "SEC") granting Participating
Insurance Companies and variable annuity and variable life
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, (the "1940 Act") and Rules 6e-2(b)(15)
and 6e-3(T)(b)(15) thereunder, if and 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 (the "Mixed
and Shared Funding Exemptive Order");
WHEREAS, the Fund is registered as an open-end management
investment company under the 1940 Act and shares of the
Portfolios are registered under the Securities Act of 1933, as
amended (the "1933 Act");
WHEREAS, Pacific Investment Management Company (the
"Adviser"), which serves as investment adviser to the Fund, is
duly registered as an investment adviser under the federal
Investment Advisers Act of 1940, as amended;
WHEREAS, the Company has issued or will issue certain
variable life insurance and/or variable annuity contracts
supported wholly or partially by the Account (the "Contracts"),
and said Contracts are listed in Schedule A hereto, as it may be
amended from time to time by mutual written agreement;
WHEREAS, the Account is duly established and maintained as a
segregated asset account, duly established by the Company, on the
date shown for such Account on Schedule A hereto, to set aside
and invest assets attributable to the aforesaid Contracts;
WHEREAS, the Underwriter, which serves as distributor to the
Fund, is registered as a broker dealer with the SEC under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and
is a member in good standing of the National Association of
Securities Dealers, Inc. (the "NASD"); and
WHEREAS, to the extent permitted by applicable insurance
laws and regulations, the Company intends to purchase shares in
the Portfolios listed in Schedule A hereto, as it may be amended
from time to time by mutual written agreement (the "Designated
Portfolios") on behalf of the Account to fund the aforesaid
Contracts, and the Underwriter is authorized to sell such shares
to the Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises,
the Company, the Fund and the Underwriter agree as follows:
ARTICLE I. Sale of Fund Shares
1. This text is hidden, do not remove.
1.1. The Fund has granted to the Underwriter exclusive authority
to distribute the Fund's shares, and has agreed to instruct, and
has so instructed, the Underwriter to make available to the
Company for purchase on behalf of the Account Fund shares of
those Designated Portfolios selected by the Underwriter.
Pursuant to such authority and instructions, and subject to
Article X hereof, the Underwriter agrees to make available to the
Company for purchase on behalf of the Account, shares of those
Designated Portfolios listed on Schedule A to this Agreement,
such purchases to be effected at net asset value in accordance
with Section 1.3 of this Agreement. Notwithstanding the
foregoing, (i) Fund series (other than those listed on Schedule
A) in existence now or that may be established in the future will
be made available to the Company only as the Underwriter may so
provide, and (ii) the Board of Trustees of the Fund (the "Board")
may suspend or terminate the offering of Fund shares of any
Designated Portfolio or class thereof, if such action is required
by law or by regulatory authorities having jurisdiction or if, in
the sole discretion of the Board acting in good faith and in
light of its fiduciary duties under federal and any applicable
state laws, suspension or termination is necessary in the best
interests of the shareholders of such Designated Portfolio.
1.2. The Fund shall redeem, at the Company's request,
any full or fractional Designated Portfolio shares held by the
Company on behalf of the Account, such redemptions to be effected
at net asset value in accordance with Section 1.3 of this Agreement.
Notwithstanding the foregoing, (i) the Company shall not redeem
Fund shares attributable to Contract owners except in the
circumstances permitted in Section 10.3 of this Agreement, and
(ii) the Fund may delay redemption of Fund shares of any
Designated Portfolio to the extent permitted by the 1940 Act, and
any rules, regulations or orders thereunder.
1.3. Purchase and Redemption Procedures
(a) The Fund hereby appoints the Company as an agent
of the Fund for the limited purpose of receiving purchase and
redemption requests on behalf of the Account (but not with respect
to any Fund shares that may be held in the general account of the
Company) for shares of those Designated Portfolios made available
hereunder, based on allocations of amounts to the Account or
subaccounts thereof under the Contracts and other transactions
relating to the Contracts or the Account. Receipt of any such
request (or relevant transactional information therefor) on any
day the New York Stock Exchange is open for trading and on which
the Fund calculates it net asset value pursuant to the rules of
the SEC (a "Business Day") by the Company as such limited agent
of the Fund prior to the time that the Fund ordinarily calculates
its net asset value as described from time to time in the Fund
Prospectus (which as of the date of execution of this Agreement
is 4:00 p.m. Eastern Time) shall constitute receipt by the Fund
on that same Business Day, provided that the Fund receives notice
of such request by 9:30 a.m. Eastern Time on the next following
Business Day.
(b) The Company shall pay for shares of each Designated
Portfolio on the same day that it notifies the Fund of a purchase
request for such shares. Payment for Designated Portfolio shares
shall be made in federal funds transmitted to the Fund by wire to
be received by the Fund by 4:00 p.m. Eastern Time on the day the
Fund is notified of the purchase request for Designated Portfolio
shares (unless the Fund determines and so advises the Company
that sufficient proceeds are available from redemption of shares
of other Designated Portfolios effected pursuant to redemption
requests tendered by the Company on behalf of the Account). If
federal funds are not received on time, such funds will be
invested, and Designated Portfolio shares purchased thereby will
be issued, as soon as practicable and the Company shall promptly,
upon the Fund's request, reimburse the Fund for any charges,
costs, fees, interest or other expenses incurred by the Fund in
connection with any advances to, or borrowing or overdrafts by,
the Fund, or any similar expenses incurred by the Fund, as a
result of portfolio transactions effected by the Fund based upon
such purchase request. Upon receipt of federal funds so wired,
such funds shall cease to be the responsibility of the Company
and shall become the responsibility of the Fund.
(c) Payment for Designated Portfolio shares redeemed by the
Account or the Company shall be made in federal funds transmitted
by wire to the Company or any other designated person on the next
Business Day after the Fund is properly notified of the
redemption order of such shares (unless redemption proceeds are
to be applied to the purchase of shares of other Designated
Portfolio in accordance with Section 1.3(b) of this Agreement),
except that the Fund reserves the right to redeem Designated
Portfolio shares in assets other than cash and to delay payment
of redemption proceeds to the extent permitted under Section
22(e) of the 1940 Act and any Rules thereunder, and in accordance
with the procedures and policies of the Fund as described in the
then current prospectus. The Fund shall not bear any
responsibility whatsoever for the proper disbursement or
crediting of redemption proceeds by the Company, the Company
alone shall be responsible for such action.
(d) Any purchase or redemption request for Designated
Portfolio shares held or to be held in the Company's general account
shall be effected at the net asset value per share next determined
after the Fund's receipt of such request, provided that, in the
case of a purchase request, payment for Fund shares so requested
is received by the Fund in federal funds prior to close of
business for determination of such value, as defined from time to
time in the Fund Prospectus.
1.4. The Fund shall use its best efforts to make the net asset
value per share for each Designated Portfolio available to the
Company by 6:30 p.m. Eastern Time each Business Day, and in any
event, as soon as reasonably practicable after the net asset
value per share for such Designated Portfolio is calculated, and
shall calculate such net asset value in accordance with the
Fund's Prospectus. Neither the Fund, any Designated Portfolio,
the Underwriter, nor any of their affiliates shall be liable for
any information provided to the Company pursuant to this
Agreement which information is based on incorrect information
supplied by the Company or any other Participating Insurance
Company to the Fund or the Underwriter.
1.5. The Fund shall furnish notice (by wire or telephone followed
by written confirmation) to the Company as soon as reasonably
practicable of any income dividends or capital gain distributions
payable on any Designated Portfolio shares. The Company, on its
behalf and on behalf of the Account, hereby elects to receive all
such dividends and distributions as are payable on any Designated
Portfolio shares in the form of additional shares of that
Designated Portfolio. The Company reserves the right, on its
behalf and on behalf of the Account, to revoke this election and
to receive all such dividends and capital gain distributions in
cash. The Fund shall notify the Company promptly of the number
of Designated Portfolio shares so issued as payment of such
dividends and distributions.
1.6. Issuance and transfer of Fund shares shall be by book entry
only. Stock certificates will not be issued to the Company or
the Account. Purchase and redemption orders for Fund shares
shall be recorded in an appropriate ledger for the Account or the
appropriate subaccount of the Account.
1.7. (a) The parties hereto acknowledge that the arrangement
contemplated by this Agreement is not exclusive; the Fund's
shares may be sold to other insurance companies (subject to
Section 1.8 hereof) and the cash value of the Contracts may be
invested in other investment companies, provided, however, that
until this Agreement is terminated pursuant to Article X, the
Company shall promote the Designated Portfolios on the same basis
as other funding vehicles available under the Contracts. Funding
vehicles other than those listed on Schedule A to this Agreement
may be available for the investment of the cash value of the
Contracts, provided, however, (i) any such vehicle or series
thereof, has investment objectives or policies that are
substantially different from the investment objectives and
policies of the Designated Portfolios available hereunder; (ii)
the Company gives the Fund and the Underwriter 45 days written
notice of its intention to make such other investment vehicle
available as a funding vehicle for the Contracts; and (iii)
unless such other investment company was available as a Funding
vehicle for the Contracts prior to the date of this Agreement and
the Company has so informed the Fund and the Underwriter prior to
their signing this Agreement, the Fund or Underwriter consents in
writing to the use of such other vehicle, such consent not to be
unreasonably withheld.
(a) This text is hidden, do not remove.
(b) The Company shall not, without prior notice to the
Underwriter (unless otherwise required by applicable law), take
any action to operate the Account as a management investment
company under the 1940 Act.
(c) The Company shall not, without prior notice to the
Underwriter (unless otherwise required by applicable law), induce
Contract owners to change or modify the Fund or change the Fund's
distributor or investment adviser.
(d) The Company shall not, without prior notice
to the Fund, induce Contract owners to vote on any matter
submitted for consideration by the shareholders of the Fund in a
manner other than as recommended by the Board of Trustees of the
Fund.
1.8. The Underwriter and the Fund shall sell Fund shares only
to Participating Insurance Companies and their separate accounts and
to persons or plans ("Qualified Persons") that communicate to the
Underwriter and the Fund that they qualify to purchase shares of
the Fund under Section 817(h) of the Internal Revenue Code of
1986, as amended (the "Code") and the regulations thereunder
without impairing the ability of the Account to consider the
portfolio investments of the Fund as constituting investments of
the Account for the purpose of satisfying the diversification
requirements of Section 817(h). The Underwriter and the Fund
shall not sell Fund shares to any insurance company or separate
account unless an agreement complying with Article VI of this
Agreement is in effect to govern such sales, to the extent
required. The Company hereby represents and warrants that it and
the Account are Qualified Persons. The Fund reserves the right
to cease offering shares of any Designated Portfolio in the
discretion of the Fund.
ARTICLE II. Representations and Warranties
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2.1. The Company represents and warrants that the Contracts
(a) are, or prior to issuance will be, registered under the 1933 Act,
or (b) are not registered because they are properly exempt from
registration under the 1933 Act or will be offered exclusively in
transactions that are properly exempt from registration under the
1933 Act. The Company further represents and warrants that the
Contracts will be issued and sold in compliance in all material
respects with all applicable federal securities and state
securities and insurance 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, that it has legally and
validly established the Account prior to any issuance or sale
thereof as a segregated asset account under [insert state]
insurance laws, and that it (a) has registered or, prior to any
issuance or sale of the Contracts, will register the 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, or alternatively (b) has not registered the Account in
proper reliance upon an exclusion from registration under the
1940 Act. The Company shall register and qualify the Contracts
or interests therein as securities in accordance with the laws of
the various states only if and to the extent deemed advisable by
the Company.
2.2. The Fund represents and warrants that Fund shares sold
pursuant to this Agreement shall be registered under the 1933
Act, duly authorized for issuance and sold in compliance with
applicable state and federal 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 in accordance with the
laws of the various states only if and to the extent deemed
advisable by the Fund or the Underwriter.
2.3. The Fund may make payments to finance distribution expenses
pursuant to Rule 12b-1 under the 1940 Act. Prior to financing
distribution expenses pursuant to Rule 12b-1, the Fund will have
the Board, a majority of whom are not interested persons of the
Fund, formulate and approve a plan pursuant to Rule 12b-1 under
the 1940 Act to finance distribution expenses.
2.4. The Fund makes no representations as to whether any aspect
of its operations, including, but not limited to, investment
policies, fees and expenses, complies with the insurance and
other applicable laws of the various states.
2.5. The Fund represents that it is lawfully organized and
validly existing under the laws of the State of Delaware and that
it does and will comply in all material respects with the 1940
Act.
2.6. The Underwriter represents and warrants that it is a member
in good standing of the NASD and is registered as a broker-dealer
with the SEC. The Underwriter further represents that it will
sell and distribute the Fund shares in accordance with any
applicable state and federal securities laws.
2.7. The Fund and the Underwriter represent and warrant that all
of their trustees/directors, officers, employees, investment
advisers, and other individuals or 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 minimum 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.
2.8. The Company represents and warrants that all of its
directors, officers, employees, and other individuals/entities
employed or controlled by the Company dealing with the money
and/or securities of the Account are covered by a blanket
fidelity bond or similar coverage for the benefit of the Account,
in an amount not less than $5 million. The aforesaid bond
includes coverage for larceny and embezzlement and is issued by a
reputable bonding company. The Company agrees to hold for the
benefit of the Fund and to pay to the Fund any amounts lost from
larceny, embezzlement or other events covered by the aforesaid
bond to the extent such amounts properly belong to the Fund
pursuant to the terms of this Agreement. The Company agrees to
make all reasonable efforts to see that this bond or another bond
containing these provisions is always in effect, and agrees to
notify the Fund and the Underwriter in the event that such
coverage no longer applies.
ARTICLE III. Prospectuses and Proxy Statements; Voting
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3.1. The Underwriter shall provide the Company with as many
copies of the Fund's current prospectus (describing only the
Designated Portfolios listed on Schedule A) or, to the extent
permitted, the Fund's profiles as the Company may reasonably
request. The Company shall bear the expense of printing copies
of the current prospectus and profiles for the Contracts that
will be distributed to existing Contract owners, and the Company
shall bear the expense of printing copies of the Fund's
prospectus and profiles that are used in connection with offering
the Contracts issued by the Company. If requested by the Company
in lieu thereof, the Fund shall provide such documentation
(including a final copy of the new prospectus on diskette 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 Fund's prospectus or profile printed
together in one document (such printing to be at the Company's
expense).
3.2. The Fund's prospectus shall state that the current Statement
of Additional Information ("SAI") for the Fund is available, and
the Underwriter (or the Fund), at its expense, shall provide a
reasonable number of copies of such SAI free of charge to the
Company for itself and for any owner of a Contract who requests
such SAI.
3.3. The Fund shall provide the Company with information
regarding the Fund's expenses, which information may include a
table of fees and related narrative disclosure. for use in any
prospectus or other descriptive document relating to a Contract.
The Company agrees that it will use such information in the form
provided. The Company shall provide prior written notice of any
proposed modification of such information, which notice will
describe in detail the manner in which the Company proposes to
modify the information, and agrees that it may not modify such
information in any way without the prior consent of the Fund.
3.4. 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.
3.5. 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
variable contract owners or to the extent otherwise required by
law. The Company will vote Fund shares held in any segregated
asset account in the same proportion as Fund shares of such
portfolio for which voting instructions have been received from
Contract owners, to the extent permitted by law.
3.6. Participating Insurance Companies shall be responsible
for assuring that each of their separate accounts participating in a
Designated Portfolio calculates voting privileges as required by
the Shared Funding Exemptive Order and consistent with any
reasonable standards that the Fund may adopt and provide in
writing.
ARTICLE IV. Sales Material and Information
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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 that the Company develops and in which
the Fund (or a Designated Portfolio thereof) or the Adviser or
the Underwriter is named. No such material shall be used until
approved by the Fund or its designee, and the Fund will use its
best efforts for it or its designee to review such sales
literature or promotional material within ten Business Days after
receipt of such material. The Fund or its designee reserves the
right to reasonably object to the continued use of any such sales
literature or other promotional material in which the Fund (or a
Designated Portfolio thereof) or the Adviser or the Underwriter
is named, and no such material shall be used if the Fund or its
designee so object.
4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning
the Fund or the Adviser or the Underwriter in connection with the
sale of the Contracts other than the information or
representations contained in the registration statement or
prospectus or SAI for the Fund shares, as such registration
statement and prospectus or SAI 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 Underwriter,
except with the permission of the Fund or the Underwriter or the
designee of either.
4.3. The Fund and the Underwriter, or their designee, shall
furnish, or cause to be furnished, to the Company, each piece of
sales literature or other promotional material that it develops
and in which the Company, and/or its Account, is named. No such
material shall be used until approved by the Company, and the
Company will use its best efforts to review such sales literature
or promotional material within ten Business Days after receipt of
such material. The Company reserves the right to reasonably
object to the continued use of any such sales literature or other
promotional material in which the Company and/or its Account is
named, and no such material shall be used if the Company so
objects.
4.4. The Fund and the Underwriter shall not give any information
or make any representations on behalf of the Company or
concerning the Company, the Account, or the Contracts other than
the information or representations contained in a registration
statement, prospectus (which shall include an offering
memorandum, if any, if the Contracts issued by the Company or
interests therein are not registered under the 1933 Act), or SAI
for the Contracts, as such registration statement, prospectus, or
SAI may be amended or supplemented from time to time, or in
published reports for the 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, SAIs, 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, promptly after the filing of such
document(s) 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 (which shall
include an offering memorandum, if any, if the Contracts issued
by the Company or interests therein are not registered under the
1933 Act), SAIs, reports, solicitations for voting instructions,
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 Contracts or
the Account, promptly after the filing of such document(s) with
the SEC or other regulatory authorities. The Company shall
provide to the Fund and the Underwriter any complaints received
from the Contract owners pertaining to the Fund or the Designated
Portfolio.
4.7. The Fund will provide the Company with as much notice
as is reasonably practicable of any proxy solicitation for any
Designated Portfolio, and of any material change in the Fund's
registration statement, particularly any change resulting in a
change to the registration statement or prospectus for any
Account. The Fund will work with the Company so as to enable the
Company to solicit proxies from Contract owners, or to make
changes to its prospectus or registration statement, in an
orderly manner. The Fund will make reasonable efforts to attempt
to have changes affecting Contract prospectuses become effective
simultaneously with the annual updates for such prospectuses.
4.8. For purposes of this Article IV, the phrase "sales
literature and other promotional materials" includes, but is not
limited to, any of the following that refer to the Fund or any
affiliate of the Fund: 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, 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, SAIs,
shareholder reports, proxy materials, and any other
communications distributed or made generally available with
regard to the Fund.
ARTICLE V. Fees and Expenses
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5.1. The Fund and the Underwriter 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 Fund or
Underwriter may make payments to the Company or to the
underwriter for the Contracts if and in amounts agreed to by the
Underwriter in writing, and such payments will be made out of
existing fees otherwise payable to the Underwriter, past profits
of the Underwriter, or other resources available to the
Underwriter. 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. The Fund shall see to it
that all its shares are registered and authorized for issuance in
accordance with applicable federal law and, if and to the extent
deemed advisable by the Fund, in accordance with applicable state
laws prior to their sale. 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 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,
and all taxes on the issuance or transfer of the Fund's shares.
5.3. The Company shall bear the expenses of distributing the
Fund's prospectus to owners of Contracts issued by the Company
and of distributing the Fund's proxy materials and reports to
such Contract owners.
ARTICLE VI. Diversification and Qualification
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6.1. The Fund will invest its assets in such a manner as to
ensure that the Contracts will be treated as annuity or life
insurance contracts, whichever is appropriate, under the Code and
the regulations issued thereunder (or any successor provisions).
Without limiting the scope of the foregoing, each Designated
Portfolio has complied and will continue to comply with Section
817(h) of the Code and Treasury Regulation 1.817-5, and any
Treasury interpretations thereof, relating to the diversification
requirements for variable annuity, endowment, or life insurance
contracts, and any amendments or other modifications or successor
provisions to such Section or Regulations. In the event of a
breach of this Article VI by the Fund, it will take all
reasonable steps (a) to notify the Company of such breach and (b)
to adequately diversify the Fund so as to achieve compliance
within the grace period afforded by Regulation 1.817-5.
6.2. The Fund represents that it is or will be qualified as a
Regulated Investment Company under Subchapter M of the Code, and
that it will make every effort to maintain such qualification
(under Subchapter M or any successor or similar provisions) 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 not so qualify in the future.
6.3. The Company represents that the Contracts are currently,
and at the time of issuance shall be, treated as life insurance or
annuity 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 Underwriter
immediately upon having a reasonable basis for believing the
Contracts have ceased to be so treated or that they might not be
so treated in the future. The Company agrees that any prospectus
offering a contract that is a "modified endowment contract" as
that term is defined in Section 7702A of the Code (or any
successor or similar provision), shall identify such contract as
a modified endowment contract.
ARTICLE VII. Potential Conflicts
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The following provisions shall apply only upon issuance of the
Mixed and Shared Funding Order and the sale of shares of the Fund
to variable life insurance separate accounts, and then only to
the extent required under the 1940 Act.
7.1. The Board will monitor the Fund for the existence of
any material irreconcilable conflict between the interests of the
Contract owners of all separate accounts investing in the Fund.
An irreconcilable material conflict may arise for a variety of
reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state
insurance, tax, or securities laws or regulations, or a public
ruling, private letter ruling, no-action or interpretative
letter, or any similar action by insurance, tax, or securities
regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the
investments of any Portfolio are being managed; (e) a difference
in voting instructions given by variable annuity contract and
variable life insurance contract owners; or (f) a decision by an
insurer to disregard the voting instructions of contract owners.
The Board shall promptly inform the Company if it determines that
an irreconcilable material conflict exists and the implications
thereof.
7.2. The Company will report any potential or existing
conflicts of which it is aware to the Board. The Company will assist
the Board in carrying out its responsibilities under the Mixed and
Shared Funding Exemptive Order, by providing the Board with all
information reasonably necessary for the Board to consider any
issues raised. This includes, but is not limited to, an
obligation by the Company to inform the Board whenever Contract
owner voting instructions are disregarded.
7.3. If it is determined by a majority of the Board, or a
majority of its disinterested members, 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 Board members), take whatever steps are
necessary to remedy or eliminate the irreconcilable material
conflict, up to and including: (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 appropriate 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
because of a decision by the Company to disregard Contract owner
voting instructions and that decision represents a minority position
or would preclude a majority vote, the Company may be required, at
the Fund's election, to withdraw the Account's investment in the
Fund and terminate this Agreement with respect to each Account;
provided, however, that such withdrawal and termination shall be
limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the
disinterested members of the Board. Any such withdrawal and
termination must take place within six (6) months after the Fund
gives written notice that this provision is being implemented,
and until the end of that six month period the Fund shall
continue to accept and implement orders by the Company for the
purchase (and redemption) of shares of the Fund.
7.5. If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to the
Company conflicts with the majority of other state regulators,
then the Company will withdraw the affected Account's investment
in the Fund and terminate this Agreement with respect to such
Account within six months after the Board informs the Company in
writing that it has determined that such decision has created an
irreconcilable material conflict; provided, however, that such
withdrawal and termination shall be limited to the extent
required by the foregoing material irreconcilable conflict as
determined by a majority of the disinterested members of the
Board. Until the end of the foregoing six month period, the Fund
shall continue to accept and implement orders by the Company for
the purchase (and redemption) of shares of the Fund.
7.6. For purposes of Section 7.3 through 7.6 of this
Agreement, a majority of the disinterested members of the Board shall
determine whether any proposed action adequately remedies any
irreconcilable material conflict, but in no event will the Fund
be required to establish a new funding medium for the Contracts.
The Company shall not be required by Section 7.3 to establish a
new funding medium for the Contract if an offer to do so has been
declined by vote of a majority of 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.
7.7. If and to the extent the Mixed and Shared Funding
Exemption Order or any amendment thereto contains terms and conditions
different from Sections 3.4, 3.5, 3.6, 7.1, 7.2, 7.3, 7.4, and
7.5 of this Agreement, then the Fund and/or the Participating
Insurance Companies, as appropriate, shall take such steps as may
be necessary to comply with the Mixed and Shared Funding
Exemptive Order, and Sections 3.4, 3.5, 3.6, 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 the Mixed and Shared Funding Exemptive
Order or any amendment thereto. 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 1940 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 Mixed and 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 3.5, 3.6, 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
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8.1. Indemnification By the Company
8.1(a). The Company agrees to indemnify and hold
harmless the Fund and the Underwriter and each of its
trustees/directors and officers, and each person, if any, who
controls the Fund or Underwriter within the meaning of Section 15
of the 1933 Act or who is under common control with the
Underwriter (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 or regulation, 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 statements of any material fact contained in the
registration statement, prospectus (which shall include a written
description of a Contract that is not registered under the 1933
Act), or SAI for the Contracts 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, prospectus or SAI 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, SAI, or sales literature of
the Fund not supplied by the Company or persons under its
control) or wrongful conduct of the Company or its agents or
persons under the Company's authorization or 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, SAI, 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 material failure by the Company to
provide the services and furnish the materials under the terms of
this Agreement (including a failure, whether unintentional or in
good faith or otherwise, to comply with the qualification
requirements specified in Article VI 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;
(vi) as limited by and in accordance with the provisions of
Sections 8.1(b) and 8.1(c) hereof.
8.1(b). The Company 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
its obligations or duties under this Agreement.
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 an Indemnified Party, 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 Indemnified Parties will promptly
notify the Company of the commencement of any litigation or
proceedings against them in connection with the issuance or sale
of the Fund shares or the Contracts or the operation of the Fund.
8.2. Indemnification by the Underwriter
8.2(a). The Underwriter 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
Underwriter) or litigation (including legal and other expenses)
to which the Indemnified Parties may become subject under any
statute or regulation, 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 SAI 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 Underwriter
or Fund by or on behalf of the Company for use in the
registration statement, prospectus or SAI 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, SAI or sales literature for
the Contracts not supplied by the Underwriter or persons under
its control) or wrongful conduct of the Fund or Underwriter or
persons under their 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, SAI 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 the Underwriter; or
(iv) arise as a result of any failure by the Fund or the
Underwriter to provide the services and furnish the materials
under the terms of this Agreement (including a failure of the
Fund, whether unintentional or in good faith or otherwise, to
comply with the diversification and other qualification
requirements specified in Article VI of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Underwriter;
as limited by and in accordance with the provisions of Sections
8.2(b) and 8.2(c) hereof.
8.2(b). The Underwriter 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 or 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
the Account, whichever is applicable.
8.2(c). The Underwriter 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 Underwriter 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 Underwriter of any
such claim shall not relieve the Underwriter 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 Party, the Underwriter will be entitled
to participate, at its own expense, in the defense thereof. The
Underwriter also shall be entitled to assume the defense thereof,
with counsel satisfactory to the party named in the action.
After notice from the Underwriter to such party of the
Underwriter'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 Underwriter 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.
The Company agrees promptly to notify the
Underwriter of the commencement of any litigation or proceedings
against it or any of its officers or directors in connection with
the issuance or sale of the Contracts or the operation of the
Account.
8.3. Indemnification By the Fund
8.3(a). The Fund 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 8.3) against any and all
losses, claims, expenses, damages, liabilities (including amounts
paid in settlement with the written consent of the Fund) or
litigation (including legal and other expenses) to which the
Indemnified Parties may be required to pay or may become subject
under any statute or regulation, at common law or otherwise,
insofar as such losses, claims, expenses, damages, liabilities or
expenses (or actions in respect thereof) or settlements, are
related to the operations of the Fund and:
(i) arise as a result of any failure by the Fund to provide the
services and furnish the materials under the terms of this
Agreement (including a failure, whether unintentional or in good
faith or otherwise, to comply with the diversification and other
qualification requirements specified in Article VI of this
Agreement); or
(ii) arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this Agreement
or arise out of or result from any other material breach of this
Agreement by the Fund;
as limited by and in accordance with the provisions of Sections
8.3(b) and 8.3(c) hereof.
8.3(b). The Fund 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, the Fund, the
Underwriter or the Account, whichever is applicable.
8.3(c). The Fund 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 Fund 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 Fund of any such claim shall not relieve the Fund 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 Fund will be entitled to
participate, at its own expense, in the defense thereof. The
Fund also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After
notice from the Fund to such party of the Fund'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 Fund 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.
8.3(d). The Company and the Underwriter agree
promptly to notify the Fund of the commencement of any litigation
or proceeding against it or any of its respective officers or
directors in connection with the Agreement, the issuance or sale
of the Contracts, the operation of the Account, or the sale or
acquisition of shares of the Fund.
ARTICLE IX. Applicable Law
9. This text is hidden, do not remove.
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of
California.
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, any Mixed and Shared Funding Exemptive Order)
and the terms hereof shall be interpreted and construed in
accordance therewith. If, in the future, the Mixed and Shared
Funding Exemptive Order should no longer be necessary under
applicable law, then Article VII shall no longer apply.
ARTICLE X. Termination
10. This text is hidden, do not remove.
10.1. This Agreement shall continue in full force and effect
until the first to occur of:
(a) termination by any party, for any reason with respect to
some or all Designated Portfolios, by three (3) months advance
written notice delivered to the other parties; or
(b) termination by the Company by written notice to the Fund and
the Underwriter based upon the Company's determination that
shares of the Fund are not reasonably available to meet the
requirements of the Contracts; or
(c) termination by the Company by written notice to the Fund and
the Underwriter in the event any of the Designated Portfolio's
shares are not registered, issued or sold in accordance with
applicable state and/or federal law or such law precludes the
use of such shares as the underlying investment media of the
Contracts issued or to be issued by the Company; or
(d) termination by the Fund or Underwriter in the event that
formal administrative proceedings are instituted against the
Company by the NASD, the SEC, the Insurance Commissioner or like
official 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 operation of any Account, or the purchase of
the Fund's shares; provided, however, that the Fund or
Underwriter determines in its sole judgment exercised in good
faith, that any such administrative proceedings will have a
material adverse effect upon the ability of the Company to
perform its obligations under this Agreement; or
(e) termination by the Company in the event that formal
administrative proceedings are instituted against the Fund or
Underwriter by the NASD, the SEC, or any state securities or
insurance department or any other regulatory body; provided,
however, that the Company determines in its sole judgment
exercised in good faith, that any such administrative proceedings
will have a material adverse effect upon the ability of the Fund
or Underwriter to perform its obligations under this Agreement;
or
(f) termination by the Company by written notice to the Fund and
the Underwriter with respect to any Designated Portfolio in the
event that such Portfolio ceases to qualify as a Regulated
Investment Company under Subchapter M or fails to comply with the
Section 817(h) diversification requirements specified in Article
VI hereof, or if the Company reasonably believes that such
Portfolio may fail to so qualify or comply; or
(g) termination by the Fund or Underwriter by written notice to
the Company in the event that the Contracts fail to meet the
qualifications specified in Article VI hereof; or
(h) termination by either the Fund or the Underwriter by written
notice to the Company, if either one or both of the Fund or the
Underwriter respectively, shall determine, in their sole judgment
exercised in good faith, that the Company has suffered a material
adverse change in its business, operations, financial condition,
or prospects since the date of this Agreement or is the subject
of material adverse publicity; or
(i) termination by the Company by written notice to the Fund and
the Underwriter, if the Company shall determine, in its sole
judgment exercised in good faith, that the Fund, Adviser, or the
Underwriter has suffered a material adverse change in its
business, operations, financial condition or prospects since the
date of this Agreement or is the subject of material adverse
publicity; or
(j) termination by the Fund or the Underwriter by written notice
to the Company, if the Company gives the Fund and the Underwriter
the written notice specified in Section 1.7(a)(ii) hereof and at
the time such notice was given there was no notice of termination
outstanding under any other provision of this Agreement;
provided, however, any termination under this Section 10.1(j)
shall be effective forty-five days after the notice specified in
Section 1.7(a)(ii) was given; or
(k) termination by the Company upon any substitution of the
shares of another investment company or series thereof for shares
of a Designated Portfolio of the Fund in accordance with the
terms of the Contracts, provided that the Company has given at
least 45 days prior written notice to the Fund and Underwriter of
the date of substitution; or
(l) termination by any party in the event that the Fund's Board
of Trustees determines that a material irreconcilable conflict
exists as provided in Article VII.
10.2. Notwithstanding any termination of this Agreement, the
Fund and the Underwriter shall, at the option of the Company,
continue to make available additional shares of the Fund pursuant
to the terms and conditions of this Agreement, for all Contracts
in effect on the effective date of termination of this Agreement
(hereinafter referred to as "Existing Contracts"), unless the
Underwriter requests that the Company seek an order pursuant to
Section 26(b) of the 1940 Act to permit the substitution of other
securities for the shares of the Designated Portfolios. The
Underwriter agrees to split the cost of seeking such an order,
and the Company agrees that it shall reasonably cooperate with
the Underwriter and seek such an order upon request.
Specifically, the owners of the Existing Contracts may 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
(subject to any such election by the Underwriter). The parties
agree that this Section 10.2 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. The parties
further agree that this Section 10.2 shall not apply to any
terminations under Section 10.1(g) of this Agreement.
10.3. 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) except (i) as necessary to
implement Contract owner initiated or approved transactions, (ii)
as required by state and/or federal laws or regulations or
judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption"),
(iii) upon 45 days prior written notice to the Fund and
Underwriter, as permitted by an order of the SEC pursuant to
Section 26(b) of the 1940 Act, but only if a substitution of
other securities for the shares of the Designated Portfolios is
consistent with the terms of the Contracts, or (iv) as permitted
under the terms of the Contract. Upon request, the Company will
promptly furnish to the Fund and the Underwriter reasonable
assurance that any redemption pursuant to clause (ii) above is a
Legally Required Redemption. Furthermore, except in cases where
permitted under the terms of the Contacts, the Company shall not
prevent Contract owners from allocating payments to a Portfolio
that was otherwise available under the Contracts without first
giving the Fund or the Underwriter 45 days notice of its
intention to do so.
10.4. Notwithstanding any termination of this Agreement, each
party's obligation under Article VIII to indemnify the other
parties shall survive.
ARTICLE XI. Notices
11. This text is hidden, do not remove.
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: PIMCO Variable InsuranceTrust
840 Newport Center Drive, Suite 360
Newport Beach, CA 92660
If to the Company:
If to Underwriter: PIMCO Funds Distributors LLC
2187 Atlantic Street
Stamford, CT 06902
ARTICLE XII. Miscellaneous
12. This text is hidden, do not remove.
12.1. All persons dealing with the Fund must look solely to
the property of the Fund, and in the case of a series company,
the respective Designated Portfolios listed on Schedule A hereto
as though each such Designated Portfolio had separately
contracted with the Company and the Underwriter for the
enforcement of any claims against the Fund. The parties agree
that neither the Board, officers, agents or shareholders of the
Fund assume any personal liability or responsibility for
obligations entered into by or on behalf of the Fund.
12.2. Subject to the requirements of legal process and
regulatory authority, each party hereto shall treat as
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 without the express written consent of the affected
party until such time as such information has come into the
public domain.
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.
Notwithstanding the generality of the foregoing, each party
hereto further agrees to furnish the [insert state] Insurance
Commissioner with any information or reports in connection with
services provided under this Agreement which such Commissioner
may request in order to ascertain whether the variable annuity
operations of the Company are being conducted in a manner
consistent with the [insert state] variable annuity laws and
regulations and any other applicable law or regulations.
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.
12.8. This Agreement or any of the rights and obligations
hereunder may not be assigned by any party without the prior
written consent of all parties hereto.
12.9. The Company shall furnish, or shall cause to be
furnished, to the Fund or its designee copies of the following
reports:
(a) the Company's annual statement (prepared under statutory
accounting principles) and annual report (prepared under
generally accepted accounting principles) filed with any state
or federal regulatory body or otherwise made available to the
public, as soon as practicable and in any event within 90 days
after the end of each fiscal year; and
(b) any registration statement (without exhibits) and financial
reports of the Company filed with the Securities and Exchange
Commission or any state insurance regulatory, as soon as
practicable after the filing thereof.
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.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
By its authorized officer
By:/s/Barnett Chernow
---------------------------
Barnett Chernow
Title: President
------------------------
Date: May 1, 1998
------------------------
PIMCO VARIABLE INSURANCE TRUST
By its authorized officer
By:/s/ Brent R. Harris
---------------------------
Title: Chairman
------------------------
Date: May 1, 1998
------------------------
PIMCO FUNDS DISTRIBUTORS LLC
By its authorized officer
By:/s/ Newton Schott
---------------------------
Title: Executive Vice President
------------------------
Date: May 1, 1998
------------------------
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EXHIBIT 8(h)
ASSET MANAGEMENT AGREEMENT
THIS ASSET MANAGEMENT AGREEMENT (the "Agreement"), dated March 30, 1998, and
effective as of the date specified in Section 18 hereof, is by and between
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK, a New York
corporation (the "Client"), and ING INVESTMENT MANAGEMENT LLC, a Delaware
limited liability company ("ING-IM").
SECTION 1. APPOINTMENT OF ING-IM - The Client hereby appoints ING-IM to
provide asset management services for the Client's general account (the
"Account") under the terms and conditions set forth in this Agreement.
ING-IM hereby accepts such appointment and agrees to provide such asset
management services as specified in EXHIBIT "A" attached hereto and
incorporated herein by reference.
All investments made by ING-IM on behalf of Client shall be approved by an
officer of Client, which has been duly authorized by the Board of Directors
of Client to approve investments, and shall be in accordance with investment
policies and objectives, rules and regulations established periodically by
the Board of Directors of Client or by a committee of the Board charged with
the supervision thereof. ING-IM shall acquire or dispose of any specific
investment if so directed by the Board or duly authorized committee.
SECTION 2. INVESTMENTS - ING-IM shall provide direction to the Client
regarding the investment and reinvestment of assets in the Account and any
additions thereto. No cash or securities due to or held for the Account
shall be paid or delivered to ING-IM except in payment of the fee payable to
ING-IM under this Agreement. Client and/or the Custodian shall hold and
maintain all assets in the Account in the State of New York.
SECTION 3. DISCRETIONARY AUTHORITY - BROKERAGE - ING-IM shall have full and
complete discretion to establish brokerage accounts in the name of the Client
and execute transactions in securities markets in the name of the Client,
pursuant to proper authorization from the Client, through one or more
securities broker/dealer firms as ING-IM may select, including those which
from time to time may furnish ING-IM statistical and investment research
information and other services. The Client accepts the Statement of Policy
on Brokerage Practices which is attached to this Agreement as EXHIBIT "B".
This policy may be modified by ING-IM in consultation with the Client.
SECTION 4. INVESTMENT OBJECTIVES - The investment objectives and guidelines
for the Account will be communicated in writing by the Client from time to
time. ING-IM will utilize these objectives in managing the Account.
SECTION 5. ADMINISTRATIVE SERVICES - ING-IM will provide the Client with the
following administrative services: preparation of Schedules B and D to the
Client's annual statement; pricing of portfolios on a periodic basis as
mutually agreed; mortgage loan servicing for both direct and mortgage banker-
serviced loans; private placement securities servicing; coordination of
purchases and sales at custodian bank; and coordination of securities lending
by agent banks.
SECTION 6. FEES - The Client will pay to ING-IM as full compensation for
services rendered a quarterly fee based on the quarterly fees set forth in
EXHIBIT "C", as it may be amended in writing.
If ING-IM shall serve for less than the whole of any quarterly period, its
compensation determined as provided above shall be calculated and shall be
payable on a pro rata basis for the period of the calendar quarter for which
it has served as an adviser hereunder.
SECTION 7. PROCEDURES - All transactions will be consummated by payment to,
or delivery by, the Client, or such other party as the Client may designate
in writing (the "Custodian") of all cash and/or securities due to or from the
Account. ING-IM shall not act as custodian for the Account. ING-IM shall
instruct all brokers or dealers executing orders on behalf of the Account to
forward to the Client and/or the Custodian copies of all brokerage
confirmations promptly after execution of transactions. The Client will
instruct the Custodian, if any, to provide ING-IM with such periodic reports
concerning the status of the Account as ING-IM may reasonably request. Unless
otherwise notified in writing by Client, ING-IM shall be authorized to rely
upon instruction received from the named Client representatives set forth in
EXHIBIT "D".
SECTION 8. BOOK AND RECORDS - ING-IM shall keep proper books and records
wherein shall be recorded the business transacted by it on behalf of Client
and shall forward to Client's New York office, on a monthly basis, copies of
such books and records in printed form, on a computer diskette, or as
otherwise agreed by ING-IM and Client. All books, records and files
established by ING-IM by reason of its performance under this Agreement shall
be deemed the property of Client and shall be subject to examination at any
time by Client or persons authorized by Client, or any governmental agency
having jurisdiction over Client. ING-IM agrees to provide to Client such
records, statements, and reports as Client shall reasonably request in a
timely and diligent manner.
SECTION 9. PROXIES - ING-IM shall vote securities held in the Account in
response to proxies solicited by the issuers of such securities in accordance
with guidelines established by Client. ING-IM will provide such information
with respect to such voting as the Client may reasonably request.
SECTION 10. SERVICE TO OTHER CLIENTS - It is understood that ING-IM provides
asset management services for other clients. It is further understood that
ING-IM may take management action on behalf of such other clients which
differs from management action taken on behalf of the Account. If the
purchase or sale of securities for the Account and for one or more such other
clients is considered at or about the same time, the transactions in such
securities will be allocated among the several clients in a manner deemed
equitable by ING-IM.
SECTION 11. LIABILITY OF ING-IM - In rendering services under this
Agreement, ING-IM will not be subject to any liability to the Client to any
other party for any act or omission of ING-IM except as the result of ING-
IM's gross negligence or willful misconduct. Nothing herein shall in any way
constitute a waiver or limitation of any right of any person under applicable
Federal or State law.
SECTION 12. REPRESENTATIONS BY CLIENT - By execution of this Agreement, the
Client represents that the terms hereof do not violate any obligation by
which the Client is bound, whether arising by contract, operation of law or
otherwise and that this Agreement has been duly authorized.
SECTION 13. FORM ADV PART II - The parties hereto acknowledge that,
concurrently with the execution of this Agreement, ING-IM is furnishing to
Client, for Client's review and inspection, a copy of Form ADV Part II most
recently filed by ING-IM with the Securities and Exchange Commission, and a
copy of such Form ADV Part II is attached here as EXHIBIT "E". Upon Client's
written or oral request, ING-IM shall provide to Client a copy of any future
Form ADV Part II.
SECTION 14. TERMINATION - This Agreement may be terminated by either party
on the month-end next following receipt of written notice of termination.
SECTION 15. NOTICE - Any notice, advice or report to be given pursuant to
this Agreement shall be delivered or mailed:
To ING-IM: ING INVESTMENT MANAGEMENT LLC
5780 Powers Ferry Road, NW
Suite 300
Atlanta, GA 30327-4349
To Client: FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
230 Park Avenue, Suite 966
New York, New York 10169
Attn: Mary Bea Wilkinson, Senior V.P.
SECTION 16. CONSTRUCTION OF AGREEMENT - This Agreement shall be construed
and the rights and obligations of the parties hereunder enforced in
accordance with the laws of the State of New York.
SECTION 17. ASSIGNMENT - This Agreement shall bind and inure to the benefit
of and be enforceable by the parties hereto and their permitted successors
and assigns hereunder; provided, however, that ING-IM may not assign its
rights and obligations under this Agreement unless and until it shall have
first received the prior written consent of the Client. The above consent
may be withheld for any reason, but if such consent if given, ING-IM's
assignee shall be required to assume and agree to perform all the obligations
of ING-IM hereunder and ING-IM shall remain fully liable for the full and
faithful performance of all obligations arising prior to any such assignment.
SECTION 18. EFFECTIVE DATE - Notwithstanding the date set forth in the first
paragraph hereof, this Agreement shall be effective as of January 1, 1998.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused
it to be executed by their duly authorized officers, all as of the day and
year first above.
CLIENT: FIRST GOLDEN AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK
By: /s/ David L. Jacobson
----------------------
Title: Senior Vice President
---------------------
ING-IM: ING INVESTMENT MANAGEMENT LLC
By: /s/ Thomas J. Balachowski
-------------------------
Title: President and CEO
---------------------
EXHIBIT "A"
Asset Management Services
- -------------------------
To the extent permitted by applicable law, ING-IM shall provide all asset
management services for Client's Account, including the following:
Private placement bonds and preferred stocks in an amount not to exceed
the maximum established from time to time by Client's Investment
Committee and communicated to ING-IM.
Public Market Corporate and Government Bonds.
Public Market Preferred Stocks.
Common Stocks.
Participating and Non-participating Mortgage Loans.
Equity Real Estate.
Mortgage Backed Securities and Collateralized Mortgage Obligations and
derivatives thereof.
Cash Management services, as required, in conjunction with Mortgage
Loans, Equity Real Estate, and/or the servicing of same.
Swap Transactions.
"Cap", "Floors", "Puts", "Calls" and similar derivative transactions.
EXHIBIT "B"
STATEMENT OF POLICY ON BROKERAGE PRACTICES
As of May 1, 1975, all national securities exchanges were prohibited from
requiring their members to charge fixed rates of commissions on the execution
of transactions. This prohibition resulted from the adoption by the
Securities and Exchange Commission of Rule 19b-3 under the Securities and
Exchange Act of 1934 and the subsequent passage by Congress of the Securities
Acts Amendments to include Section 28(e) relating to the payment of brokerage
commissions on specific securities transactions in excess of the commission
which might be charged by another broker for the same transaction. The
provisions of Section 28(e) are specifically incorporated herein by
reference.
In recognition of the regulatory changes, ING-IM has adopted this statement
of policy with respect to commissions paid on portfolio transactions executed
on behalf of our clients. It is the responsibility of individuals trading on
behalf of our clients to carry out this statement of policy, including the
fiduciary responsibility of negotiating for each agency transaction the
amount of the brokerage commission.
Essentially, this policy reaffirms the principle of seeking "best available
price and most favorable execution" with respect to all portfolio
transactions. This principle recognized that commissions on portfolio
transactions must be negotiated and utilized for the ultimate benefit of our
clients.
Our brokerage commission policy is as follows:
1. We will continue to use our best efforts to obtain the best
available price and most favorable execution with respect to all
portfolio transactions executed on behalf of our clients.
2. "Best available price and most favorable execution" is defined to
mean the execution of a particular investment decision at the
price and commission which provides the most favorable total cost
or proceeds reasonably obtainable under the circumstances.
3. In selecting a broker for each specific transaction, we will use
our best judgment to choose the broker most capable of providing
the brokerage services necessary to obtain best available price
and most favorable execution. The full range and quality of
brokerage services available will be considered in making these
determinations. For example, brokers may be selected on the basis
of the quality of such "brokerage services" related to the
requirements of the specific transaction as the following:
capable floor brokers and traders, competent block trading
coverage, good communications, ability to position, retail
distribution and underwriting, use of automation, research
contacts, arbitrage skills, administrative ability, or provision
of market information relating to the security. We will continue
to make periodic evaluations of the quality of these brokerage
services against our own standards of execution. Brokerage
services will be obtained only from those firms which meet our
standards, maintain a reasonable capital position, and can be
expected to reliably and continuously supply these services. We
will continue our endeavor to develop and maintain brokerage
contacts and relationships in the interest of providing our
clients with maximum liquidity.
4. We are not obliged to choose the broker offering the lowest
available commission rate if, in our best judgment, there is a
material risk that the total cost or proceeds from the transaction
might be less favorable than obtainable elsewhere. We will make
every effort to keep informed of rate structures offered by the
brokerage community. In the selection of brokers, we will not
solicit competitive bids or "shop" the order for a lower rate if
this would, in our best judgment, be harmful to the execution
process and not in the best interests of our clients.
5. In those instances where it is reasonably determined that more
than one broker can offer the brokerage services needed to obtain
the best available price and most favorable execution,
consideration will be given to those brokers which supply research
and other services in addition to execution services. Such
services may include factual and statistical information or other
items of supplementary research assistance. The individuals
trading on behalf of our clients will be informed as to the
broker/dealers who supply specific or general research assistance.
However, we will not select an executing broker on the basis of
research or other services unless such selection is otherwise
consistent with best available price and most favorable execution.
6. In no event will we enter into agreements, expressed or implied,
with broker/dealer wherein we would select a firm for execution as
a means of remuneration for recommending us as an asset manager
for prospective or present clients. However, portfolio
transactions may be executed through broker/dealers who have made
such a recommendation, if otherwise consistent with best price and
most favorable execution.
7. In those instances where a client has expressed a preference for a
particular broker, that broker will be selected only when the
broker is reasonably determined in our best judgment, to be
capable of providing the best available and most favorable
execution. With the exception of clients subject to the
provisions of The Employee Retirement Income Security Act of 1974
("ERISA"), a client may direct us in writing to execute
transactions with one or more specific brokers at such commission
rate or rates as may be agreed to by the client and such brokers.
With respect to clients subject to ERISA, we may accept clients'
direction to execute transactions with one or more specific
brokers upon written direction of the clients. Such written
notice shall specify the services provided by the broker(s) to the
clients, the amount of rate of commissions to be paid and the
determination by the clients that such direction is consistent
with the provisions of ERISA.
EXHIBIT "C"
ING INVESTMENT MANAGEMENT
ADVISORY FEE SCHEDULE
AS OF JANUARY 1, 1998
ANNUAL ASSET MANAGEMENT FEES (based on assets under management):
<TABLE>
<CAPTION>
ASSET CLASS BASIS POINT FEE
- ----------------------------------------------------------------
<S> <C>
- public bonds, MBS, CMO-A, preferred
stock, insured residential mortgages
and short term investments 20.0
- private placements (investment grade) 20.0
- below investment grade 25.0
- derivatives 50.0
- CMO-B 50.0
- actively managed common stock and
other high yield stock programs 50.0
- indexed common stocks 10.0
- commercial mortgages 20.0
- real estate, foreclosed mortgages,
and problem commercial loans 72.7
- portfolio management and
investment services (applied to 1.8 b.p for first
all assets under management per $1.0 billion and
portfolio) 0.8 b.p for the excess
- separate accounts, segregated 5.0 b.p. in addition to
funds, and pension trusts the asset class charge
</TABLE>
PRODUCTION FEE (one-time fee assessed at close of transaction):
(excludes Equitable of Iowa)
<TABLE>
<CAPTION>
ASSET CLASS BASIS POINT FEE
- ----------------------------------------------------------------
<S> <C>
- private placements (investment grade) 20.7
- private placements (international -
investment grade) 30.0
- private placements (BIG) 40.0
- commercial mortgages 16.7
</TABLE>
EXHIBIT "D"
AUTHORIZED REPRESENTATIVES OF CLIENT
- ------------------------------------
Until otherwise notified in writing by Client, ING-IM shall be authorized to
rely upon instruction received from the following named representatives of the
Client:
Thomas J. Balachowski
Robert F. Bowman
Maurice M. Moore
Jeffery W. Seel
Fred C. Smith
Michael B. Stevens
Mary Bea Wilkinson
Terry L. Kendall
David L. Jacobson
EXHIBIT "E"
Part II of Form ADV of ING Investment Management LLC reference is made to Form
ADV of ING Investment Management LLC, Securities and Exchange Commission File
No. 801-15160, which is incorporated herein by reference.
<PAGE>
<PAGE>
<PAGE>
<PAGE>
EXHIBIT 8(i)
SINGLE PAYMENT NOTE
$10,000,000 July 27, 1998
For value received, the Obligor promises to pay to the order of
SunTrust Bank, Atlanta (the "Bank"), on July 31, 1999, or at such earlier
date as hereinafter provided, the principal sum of
TEN MILLION DOLLARS ($10,000,000)
or such lesser amount of loans as may from time to time, at the Bank's sole
discretion, be advanced or, upon repayment, readvanced by the Bank hereunder
together with interest from the date hereof on the unpaid principal balance
at such annual rate or rates of interest as shall be computed and paid in
accordance with the terms and conditions hereinafter set forth.
This note evidences the obligation of the Obligor to repay, with
interest, any and all present and future indebtedness of the Obligor for
loans at any time hereafter made or extended by the Bank hereunder up to the
aggregate principal amount of $10,000,000 at any time outstanding. The
payment of any indebtedness evidenced by this note shall not affect the
enforceability of this note as to any future, different or other indebtedness
evidenced hereby.
The Obligor acknowledges and agrees that Southland Life Insurance
Company (hereinafter "Southland"), Life Insurance Company of Georgia
(hereinafter "LICG"), ING America Life Corporation (hereinafter "America
Life"), Security Life of Denver Insurance Company (hereinafter "Security
Life"), Columbine Life Insurance Company (hereinafter "Columbine"),
Midwestern United Life Insurance Company (hereinafter "Midwestern"), and
First ING Life Insurance Company of New York ("First ING New York") are all
direct or indirect subsidiaries of ING America Insurance Holdings, Inc.
("America Holdings"). The Obligor further acknowledges and agrees that
Equitable Life Insurance Company of Iowa ("Equitable Life") USG Annuity and
Life Insurance Company ("USG"), Golden American Life Insurance Company
("Golden American"), Equitable American Insurance Company ("Equitable
American"), Locust Street Securities, Inc. ("Locust Street"), and the Obligor
are all direct or indirect subsidiaries of Equitable of Iowa Companies, Inc.
("Equitable of Iowa"). American Holdings and Equitable of Iowa are both
wholly-owned direct subsidiaries of ING Insurance International B.V. On the
date that this note is being executed, LICG, Security Life, America Life,
Southland, Equitable Life, USG, and America Holdings are executing separate
notes to the Bank in the maximum principal amount of $100,000,000 each;
Golden American and Columbine are executing separate notes to the Bank in the
maximum principal amount of $75,000,000 each; Equitable of Iowa is executing
a separate note to the Bank in the maximum principal amount of $50,000,000;
First ING New York and Locust Street are executing separate notes to the Bank
in the maximum principal amount of $10,000,000 each; Midwestern is executing
a separate note to the Bank in the maximum principal amount of $30,000,000;
and Equitable American is executing a separate note to the Bank in the
maximum principal amount of $25,000,000, each of which notes are
substantially similar to this note (the "Affiliate Notes"). Obligor agrees
that the aggregate unpaid principal balance from time to time outstanding on
this note plus the aggregate unpaid principal balance from time to time
outstanding on the Affiliate Notes will at no time exceed $150,000,000.
Obligor will not request any disbursement of principal under this note if,
after such disbursement, the unpaid principal balance of this note plus the
aggregate unpaid principal of the Affiliate Notes will exceed $150,000,000.
If the Obligor desires a disbursement of principal hereunder (an
"Advance") the Obligor shall give the Bank written or telephonic notice of
the amount of such Advance and the period of time from one (1) day to thirty
(30) days that such Advance shall be outstanding (the "Interest Period"),
provided, however, (a) if any Interest Period would otherwise end on a day
which is not a day on which the Bank and commercial banks in New York, New
York, are open for business (a "Business Day"), that Interest Period shall be
extended through the next succeeding day which is a Business Day, and (b) no
Interest Period shall extend beyond the maturity date of this note. Such
written or telephonic notice with respect to the amount of an Advance and the
Interest Period to be applicable thereto shall be given to the Bank by the
Obligor before one o'clock p.m. Atlanta time, on the first Business Day of
the applicable Interest Period. All telephonic notices shall be promptly
confirmed in writing.
The Obligor shall pay interest upon each Advance from the date of
disbursement through the last day of the applicable Interest Period
(including the date of disbursement but excluding the date of repayment) at a
rate per annum, calculated on the basis of a 360 day year and upon the actual
number of days elapsed, equal to either of the following rates of interest as
selected by the Obligor: (1) the per annum rate of interest equal to the
cost of funds of Bank for the Interest Period applicable to such Advance for
amounts substantially similar to the amount of such Advance plus .25% all as
determined by Bank in accordance with its usual practices in determining its
cost of funds (the "Cost of Funds Rate") or (2) a per annum rate of interest
that would be applicable to the requested Advance as quoted by the Bank to
the Obligor (the "Quoted Rate"). Unpaid interest accruing at either of such
rates will be due and payable on the last Business Day of the applicable
Interest Period. The Bank will advise the Obligor of the Cost of Funds Rate
and the Quoted Rate that will be applicable to a requested Advance before
1:30 p.m. Atlanta time on the Business Day that the Bank receives a request
for an Advance from the Obligor. The Obligor will advise the Bank as to
whether the Obligor has selected the Cost of Funds Rate or the Quoted Rate
before 2:00 p.m. Atlanta time on the Business Day that the Bank receives a
request for an Advance from the Obligor. Any telephonic selection of
interest rates by the Obligor will promptly be confirmed in writing. The
Bank will promptly disburse the amount of an Advance to the Obligor upon
receiving notice of the Obligor's interest rate selection. Unpaid interest
accruing at such interest rate will be due and payable on the last Business
Day of the applicable Interest Period.
The Obligor shall repay the entire outstanding principal balance of
each Advance on the last Business Day of the Interest Period applicable
thereto.
The Obligor may on any Business Day renew an outstanding Advance into
an Advance with the same or different Interest Period, provided that the Bank
must be advised of the Obligor's election to renew the Advance and the
Interest Period applicable to such renewal before one o'clock p.m. on the
last Business Day of the then current Interest Period. The interest rate to
be applicable to the renewal of any Advance shall be selected in the same
manner that the interest rate is selected at the time an Advance is made.
Any such renewal shall be at the Bank's sole discretion.
If no Interest Period has been elected for any Advance or for any
principal balance outstanding hereunder, or if such election shall not be
timely, then the Interest Period with respect thereto shall be deemed to be
one day and the applicable interest rate shall be the Cost of Funds Rate.
No prepayment of any Advance shall be permissible during the Interest
Period applicable thereto.
Should the Obligor fail for any reason to pay this note in full on the
maturity date or on the date of acceleration of payment, the Obligor further
promises to pay interest on the unpaid amount from such date until the date
of final payment at a Default Rate equal to the Prime Rate plus 4%. Should
legal action or an attorney at law be utilized to collect any amount due
hereunder, the Obligor further promises to pay all costs of collection, plus
reasonable attorney's fees. All amounts due hereunder may be paid at any
office of Bank. The principal balance of this note shall conclusively be
deemed to be the unpaid principal balance appearing on the Bank's records
unless such records are manifestly in error.
Page 1 of 2
<PAGE>
<PAGE>
As security for the payment of this and any other liability of the
Obligor to the holder, direct or contingent, irrespective of the nature of
such liability or the time it arises, the Obligor hereby grants a security
interest to the holder in all property of the Obligor in or coming into the
possession, control or custody of the holder, or in which the holder has or
hereafter acquires a lien, security interest, or other right. Upon default,
holder may, without notice, immediately take possession of and then sell or
otherwise dispose of the collateral, signing any necessary documents as
Obligor's attorney in fact, and apply the proceeds against any liability of
Obligor to holder. Upon demand, the Obligor will furnish such additional
collateral, and execute any appropriate documents related thereto, deemed
necessary by the holder for its security. The Obligor further authorizes the
holder, without notice, to set-off any deposit or account and apply any
indebtedness due or to become due from the holder to the Obligor in
satisfaction of any liability described in this paragraph, whether or not
matured. The holder may, without notice, transfer or register any property
constituting security for this note into its or its nominee name with or
without any indication of its security interest therein.
This note shall immediately mature and become due and payable, without
notice or demand, upon the appointment of a receiver for the Obligor or upon
the filing of any petition or the commencement of any proceeding by the
Obligor for relief under any bankruptcy or insolvency laws, or any law
relating to the relief of debtors, readjustment of indebtedness, debtor
reorganization, or composition or extension of debt. Furthermore, this note
shall, at the option of the holder, immediately mature and become due and
payable, without notice or demand, upon the happening of any one or more of
the following events; (1) nonpayment on the due date of any amount due
hereunder; (2) failure of the Obligor to perform any other material
obligation to the holder; (3) if the Obligor shall fail to make any payment
as and when such payment is due upon any obligation for borrowed money other
than the obligation owing pursuant to this Note, and by reason thereof such
obligation becomes due prior to its stated maturity or prior to its regularly
scheduled dates of payment; (4) a reasonable belief on the part of the
holder that the Obligor is unable to pay its obligations when due or is
otherwise insolvent; (5) the filing of any petition or the commencement of
any proceeding against the Obligor for relief under bankruptcy or insolvency
laws, or any law relating to the relief of debtors, readjustment of
indebtedness, debtor reorganization, or composition or extension of debt,
which petition or proceeding is not dismissed within 60 days of the date of
filing thereof; (6) the suspension of the transaction of the usual business
of the Obligor, or the dissolution, liquidation or transfer to another party
of a significant portion of the assets of the Obligor and any such action
shall have a material adverse effect on the ability of the Obligor to repay
the unpaid principal balance hereof; (7) a reasonable belief on the part of
the holder that the Obligor has made a representation or warranty in
connection with any loan by or other transaction with the holder and such
representation or warranty was false in any material respect; (8) the
issuance or filing of any levy, attachment, garnishment, or lien against the
property of the Obligor which shall remain unpaid or undischarged for a
period of thirty (30) days and such failure to pay shall have a material
adverse effect on the ability of the Obligor to repay the unpaid principal
balance hereof; (9) the failure of the Obligor to satisfy any judgment,
penalty or fine imposed by a court or administrative agency of any government
and such judgment, penalty, or fine shall remain unpaid, unstayed on appeal,
undischarged or undismissed for a period of thirty (30) days; (10) failure
of the Obligor, after demand, to furnish financial information or to permit
inspection of any books or records during Obligor's normal business hours;
(11) Golden American shall no longer own 100% of the outstanding voting
stock of the Obligor; or (12) the Obligor shall fail to maintain the minimum
level of Company Action Level Risk Based Capital as established by applicable
state law or regulation.
The failure or forbearance of the holder to exercise any right
hereunder, or otherwise granted by law or another agreement, shall not affect
or release the liability of the Obligor, and shall not constitute a waiver of
such right unless so stated by the holder in writing. The Obligor agrees
that the holder shall have no responsibility for the collection or protection
of any property securing this note, and expressly consents that the holder
may from time to time, without notice, extend the time for payment of this
note, or any part thereof, waive its rights with respect to any property or
indebtedness without releasing the Obligor from any liability to the holder.
This note is governed by Georgia law.
The term "Obligor" means First Golden American Life Insurance Company
of New York. The term "Prime Rate", if used herein, shall mean that rate of
interest designated by Bank from time to time as its "Prime Rate" which rate
is not necessarily the Bank's best rate. The term "holder" means Bank and
any subsequent transferee or endorsee hereof.
PRESENTMENT AND NOTICE OF DISHONOR ARE HEREBY WAIVED BY THE OBLIGOR
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
BY:/s/Christopher R. Welp
----------------------
TITLE: Vice President
---------------
Page 2 of 2
<PAGE>
<PAGE>
<PAGE>
EXHIBIT 9
First Golden American Life Insurance Company of New York
230 Park Avenue, Suite 966, New York, New York 10169 Phone:(212) 973-9647
Fax: (212) 297-0645
April 20, 1999
Members of the Board of Directors
First Golden American Life Insurance
Company of New York
230 Park Avenue, Suite 966
New York, NY 10169
Ms. Coleman and Gentlemen:
In my capacity as Executive Vice President and Secretary of First Golden
American Life Insurance Company of New York, a New York domiciled
corporation (the "Company"), 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 the Company (the "Account"). I am familiar
with the proceedings taken and proposed to be taken in connection with
the authorization, issuance and sale of 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 New York and the laws of any state 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
chargeable with liabilities arising out of any other business the
Company 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 the Company and will be legally 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 heading
"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>
<PAGE>
<PAGE>
Exhibit 10(a) - Consent of Sutherland Asbill & Brennan LLP
SUTHERLAND
ASBILL & 1275 Pennsylvania Ave., NW
BRENNAN LLP Washington, DC 20004-2415
Attorneys at Law Tel: (202) 383-0100
Fax: (202) 637-3593
www.sablaw.com
April 23, 1999
STEPHEN E. ROTH
DIRECT LINE: (202) 383-0158
Internet: [email protected]
VIA EDGARLINK
- -------------
Board of Directors
First Golden American Life Insurance Company of New York
230 Park Avenue, Suite 966
New York, NY 10017
Ms. Coleman and Gentlemen:
We hereby consent to the reference to our name under the
caption "Legal Matters" in the Prospectus filed as part of the
Post-Effective Amendment No.3 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>
<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 reports dated February 12, 1999, with respect to the
financial statements of First Golden American Life Insurance Company
of New York, and February 25, 1999, with respect to the financial
statements of Separate Account NY-B, included in Post-Effective
Amendment No. 3 to the Registration Statement (Form N-4 No. 333-16501)
and related Prospectuses of Separate Account NY-B.
Our audits also included the financial statement schedules of First
Golden American Life Insurance Company of New York included in Item
24(a)(2). These schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion based on our
audits. In our opinion, the financial statement schedules referred to
above, when considered in relation to the basic financial statements
taken as a whole, present fairly in all material respects the
information set forth therein.
/s/ Ernst & Young LLP
Des Moines, Iowa
April 23, 1999
<PAGE>
<PAGE>
<PAGE>
<PAGE>
EXHIBIT 15
First Golden American Life Insurance Company of New York
230 Park Avenue, Suite 966, New York, New York 10169 Phone: (212)973-9647
Fax: (212)297-0645
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned, being duly
elected Directors and/or Officers of First Golden American Life Insurance
Company of New York ("First Golden"), constitute and appoint Myles R.
Tashman, and Marilyn Talman, and each of them, his or her true and lawful
attorneys-in-fact and agents with full power of substitution and
resubstitution for him or her in his or her name, place and stead, in any
and all capacities, to sign the following First Golden registration
statements, and current amendments to registration statements, and to
file the same, with all exhibits thereto, on or before May 3, 1999, 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 or 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:
o Post-Effective Amendment currently designated #3 to Separate Account
NY-B of First Golden's Registration Statement on Form N-4 (Nos. 333-
16501; 811-7935)
o First Golden's Registration Statement on Form S-1
SIGNATURE TITLE DATE
- --------- ----- ----
/s/R. Brock Armstrong Director and Chairman April 12, 1999
- ---------------------
R. Brock Armstrong
/s/Barnett Chernow Director and President April 9, 1999
- ---------------------
Barnett Chernow
/s/Myles R. Tashman Director, Executive April 8, 1999
- --------------------- Vice President,General
Myles R. Tashman Counsel and Secretary
/s/Carol V. Coleman
- --------------------- Director April 8, 1999
Carol V. Coleman
/s/Stephen J. Friedman
- --------------------- Director April 8, 1999
Stephen J. Friedman
/s/Andrew Kalinowski
- --------------------- Director April 9, 1999
Andrew Kalinowski
/s/Bernard Levitt
- --------------------- Director April 8, 1999
Bernard Levitt
/s/Roger A. Martin
- --------------------- Director April 9, 1999
Roger A. Martin
/s/Michael W. Cunningham
- --------------------- Director April 8, 1999
Michael W. Cunningham
/s/Mary Bea Wilkinson
- --------------------- Senior Vice President April 8, 1999
Mary Bea Wilkinson Officer and Chief
Financial
<PAGE>
<PAGE>
<PAGE>
<PAGE>
EXHIBIT 16
ING Bank N.V.
Alegron Belegging B.V.
ING Bank Ukraine
ING Baring Securities (Romania) S.A.
Amsterdam Exchanges N.V.
Argencontrol
Artolis B.V.
Assurantiebedrijf ING Bank N.V.
Assurantiekantdoor Honig & Hageman BV
Noordster V.O.F.
Volmachtbedrijf ING Bank B.V.
Atlas Investeringsgroep N.V.
Atlas Investors Partnership III C.V.
B.V. Gemeenschappelijk Bezit Aandelen Necigef
Bank Brussels Lambert S.A.
ING Bank (Belgium) N.V./S.A.
Bancard Company S.A.
Cooperation Liquidation Terme Bourse S.C.
Europay Belgium S.C.
Institut De Reescompte S.C.
Societe Belge D' Investissement International S.C.
Society for Worldwide Interbank Financial Telecommunication S.C.
Visa Belgium SC
Bank Mendes Gans NV
B.V. Deelnemings En Financieringsmaatschappij "Nova Zembla"
B.V. Trust En Administratiekantoor Van Bank Mendes Gans N.V.
Bank Mendes Gans Effectenbewaarbedrijf N.V.
Brenko B.V.
Cabel B.V.
Handamar N.V.
Handamar Corporation
Intervest B.V.
Intervest PPM B.V.
Bank Slaski S.A. W Katowicach
*Rodkowoeropejskie Centrum Ratingu I Analiz S.A.
Bankowe Przedsi*Biorstwo Telekom. Telebank S.A.
BSK Konsulting SP Z.O.O.
BSK Leasing S.A.
Centralna Tabela Ofert S.A.
Dom Maklerski BSK S.A.
Gie*Da Papierow Warto*Clowych S.A.
ING BSK Asset Management S.A.
Krajowa Izba Rozliczeniowa S.A.
Biuro Informacji Kredytowe S.A.
Mi*Dzvnarodowa Szko*A Bankowo*Ci I Finansow SP Z.O.O.
Society for Worldwide Interbank Financial Telecommunication S.C.
Banque Baring Brothers (Suisse) S.A.
Benelux Investment Fund B.V.
Berliner Handels - Und Frankfurter Bank A.G.
Buenos Aires Equity Investments N.V.
Emprendimiento Recoleta S.A. (ERSA)
BPEP Holdings Limited
Baring Asia (GP) Limited
Baring European Fund Managers Limited
Baring Latin America GP Limited
Baring Latin America Partners Limited
Baring Private Equity Partners (Asia) PTE. Limited
Baring Private Equity Partners (China) Limited
ING Barings Private Equity (China) Limited
ING BPE (China) Advisers Limited
Baring Private Equity Partners (India) Limited
Baring Private Equity Partners GMBH
Baring Private Equity Partners Limited
Baring Venture Partners GMBH
Baring Venture Partners S.A
BHB Management Limited
BPEP General Partner I Limited
BPEP General Partner II Limited
BPEP Management (UK) Limited
BPEP Nominees Limited
Quartz Capital Partners Limited
Transtech Limited
BCEE Advisers Limited
BCEF Advisers Limited
BHR Management Limited
BI Advisers Limited
Blac Holdings Inc.
Blac Corp. Incorperated
BPEP Management Limited
Baring Mexico (GP) Limited
Baring Private Equity Partners Espana S.A.
Baring Private Equity Partners Mexico S.C.
BVP Mexico S.A.
Cavendish Nominees Limited
BPEP Participations Limited
Baring Vostok Capital Partners Limited
Baring Vostok Fund Managers Limited
ESD Managers Limited
Easdaq S.A.
International Private Equity Services Limited
Polytechnos Venture Partners GMBH
BVP Holdings Limited
Baring Capricorn Ventures Limited
Baring Communications Equity Limited
BCEA Advisers Limited
BCEA Management PTE. Limited
Capricorn Venture Fund N.V.
Procuritas Partners KB
PAB Partner AB
BVP Management Limited
Capricorn Venture Partners N.V.
Czech Venture Partners S.R.O.
CI European Limited
SCGF Advisers Limited
BV Maatschappij Van Onroerende Goederen 'Het Middenstandshuis B'
BV Maatschappij Van Onroerende Goederen 'Het Middenstandshuis'
Amsterdamse Poort III B.V.
Bijlmerplein Leasing BV
Foppingadreef Leasing B.V.
BV Maatschappij Van Onroerende Goederen 'Het Middenstandshuis A'
BV Maatschappij Van Onroerende Goederen 'Het Middenstandshuis C'
Grondpoort III B.V.
C.V. Exploitatiemaatschappij Tunnel Onder De Noord
Cardona B.V.
Cedel International S.A.
Centrum Cocarde B.V.
Cene Bankiers N.V.
Administratie & Trustkantoor Beleggingsfonds Protestants Nederland BV
Amsterdam Exchanges N.V.
Arma Beheer B.V.
Beheer Administratie en Beleggingsmaatschappij Kant B.V.
Bewaarbedrijf Cene Bankiers B.V.
BV Algemene Beleggingsmaatschappij Cene Bankiers N.V.
Beheermaatschappij Jansen Groenekan B.V.
Copar B.V.
Fidele Management B.V.
Flexibel Beheer Utrecht B.V.
Hercules Beheer B.V.
Langosta B.V.
Mercurius Beheer B.V.
Nivo Investments B.V.
Remazon B.V.
Cene Bankiers Holdings N.V.
Cene Asset Management N.V.
Cene Management N.V.
Tawny Owl Investment Company N.V.
Cene Verzekeringen B.V.
N.V. Instituut Voor Ziekenhuisfinanciering
Utrechtse Participatiemaatschappij B.V.
Cofiton B.V.
Sterling Developments B.V.
Brooks Equities Inc.
Location 3 Ltd.
SDC Properties Inc.
Tripolis Vastgoed B.V.
Tripolis A C.V.
Tripolis B C.V.
Tripolis C C.V.
Combdring B.V.
Compensadora Electronica S.A.
Computer Centrum Twente B.V.
Corporacion Financiera ING (Colombia) S.A.
Credit Commercial De France S.A.
Depositary Company ING Bank B.V.
Destara B.V.
ING Bank Ukraine
ING Baring Securities (Romania) S.A.
Effectenbeursvennootschap Van Brussel C.V.
Effectenbewaarbedrijf ING Bank N.V.
Euroclear Clearance System Public Limited Company
European Investment Fund (Center 757)
European Investment Fund (Center 920)
Extra Clearing B.V.
Amsterdam Exchanges N.V.
Extra Clearing GMBH
YVOF Floorbrokers B.V.
Easdaq S.A.
Financial Advisory & Consultancy Services B.V.
Owen Stanley Financial S.A.
Financial Facilities Management B.V.
Finemij B.V.
Gabela Belegging B.V.
Hamgia Beheer B.V.
ING Bank Urkraine
ING Baring Securities (Romania)S.A.
Ingvest III B.V.
Institucion Financiera Externa Middenbank Curacao N.V. (Uruguay)
Interbank On-Line System Limited
International Bankers S.A.
Interpay Nederland B.V.
Interunion Bank (Antilles) N.V.
Interadvies N.V.
Administratiekantoor De Leuve BV
Crediet Service Bank B.V.
Incassobureau Fiditon BV
NV Nationale Volksbank
Arenda B.V.
Spaarfondsen Beheer B.V.
Spaarfondsen Bewaar B.V.
Welvaert Financieringen NV
Welstand B.V.
Internationale Nederlanden (U.S.) Funding Corporation
ING (U.S.) Financial Holdings Corporation
ING (U.S.) Capital Financial Holdings LLC
ING (U.S.) Capital LLC
ING (U.S.) Capital Management Company LLC
ING (U.S.) Investment Corporation
Alliance Precision Plastics Corporation
Nitrogen Products, Inc.
ING Furman Selz Asset Management LLC
FSIP LLC
Taurus Partners, L.P.
The Corner Fund, L.P.
Fairway Capital Partners, L.P.
Anvers, L.P.
Anvers II, L.P.
Artemis Partners, L.P.
Furman Selz Capital Management LLC
Delta Asset Management
NorthStar Asset Management
ING Capital Advisors, LLC
ING Capital Advisors Portfolio Management Corp.
ING Capital Senior Secured High Income Fund, L.P.
ING Emerging Markets Investors LLC
ING Emerging Partners L.P.
ING Equity Holdings, Inc.
ING Equity Partners L.P.
ING Realty Services, Inc.
ING (U.S.) Financial Services Corporation
ING Baring Grupo Financiero (Mexico) S.A. De C.V.
ING Inmobiliaria (Mexico) S.A. de C.V.
ING Bank (Mexico) S.A.
ING Baring (Mexico), S.A. de C.V., Casa de Bolsa
ING Baring (U.S.) Financial Holdings LLC
ING Baring (U.S.) Capital Markets, LLC
ING Baring (U.S.) Capital LLC
ING (U.S.) Latin American Capital LLC
Internationale Nederlanden (U.S.) Real Estate Finance, Inc.
1996 Olympic Corporation
California Acquisition Partners I
Coast Atlantic, Inc.
Highridge ING Atlantic L.P.
Apache Investments, Inc.
Kokopelli Associates, Ltd.
Blue Sky Properties Inc.
Montague Court, LLC
Calprop Portfolio, Inc.
The Center at San Marcos Corporation
Crow's Nest Corporation
Genesee Corporation
Algerine Inc.
Genreo Corporation
Northern Springs Portfolio, Inc
Laketon Corporation
Lucre Lake Corporation
ING Real Estate Investors, Inc.
Little Muddy Creek Corporation
FN Realty Advisors, Inc.
Mountain AMD L.P.
First Ohio Service Corporation
5850 Corporation
Colrad Development Corp.
Evergreen Valley Development
LFS Capital Corporation
Lisle Center, Inc.
Spectrum Holdings, Inc.
Cardinal Mortgage Corporation
E.N. One, Inc.
Fairfield Village Mortgage Corporation
Lincoln Ventures Corporation
Pathway Lands Incorporated
Amarak II Investments Corporation
Pimco Corporation
Baloo Corporation
Can II, LLC
Cap II Foreclosure Corporation
Penn Mar Associates, LLC
Calprop II Portfolio, Inc.
Clear River Associates, Inc.
Amarak Investments Corporation
Great Lakes Management, Inc.
Canadian Ventures I L.P.
Falcon Gate, Inc.
Long Ears Corporation
Pleasantlake Corporation
S G Investors Corporation
Southgate Plaza, LLC
Ventura Ridge Associates, Inc.
Triangle Development Corporation
39 Vestry LLC
Tech Air Corporation
ING Barings Real Estate Acquisition Company
Pentagon Parkway Corporation
Artis Realty Advisors, Inc.
Coconut Corp.
Promontory Point, Inc.
Promontory Point Partnership
Seagate Development Corporation
Able Gateway Plaza, LLC
Mountain Creek Investors, Inc.
Mountain Creek Company, LLC
Telluride Mountain Village Ventures, LLC
Nashpike Corporation
Velocity One Inc.
B&I Associates, LLC
Brookhollow Associates, L.P.
Courtyard Plaza Associates, L.P.
Glen Harbor Associates, LLC
Hightree Associates, LLC
Lakebridge Partners, L.P.
Kent Hospitality Associates, L.P.
Northern Springs Limited Partnership
Ventura Hospitality Partners, L.P.
40 East Associates, L.P.
Springfield Corporate Center, LLC
Fountain Park Partners, L.P.
Westmoreland Associates, L.P.
Green Neck, LLC
Mallard Cove Investors, LLC
Calshops, LLC
BHI-Dover VII, L.P.
BHI-Dover VIII, L.P.
BHI-Dover X, L.P.
BHI-Dover XI, L.P.
Brickyard Investors, L.P.
Eastgate Hospitality Partners, L.P.
Festival Pasadena Associates, L.P.
Golden Bear Homes I, L.P.
Golden Bear Homes II, L.P.
Golden Bear Homes III, L.P.
Golden Bear Homes IV, L.P.
SPA Partners, L.P.
Miami Bay Hospitality Associates, L.P.
Royal River Partners, L.P.
Wildewood Holdings, LLC
Madramp, LLC
201 Madison, LLC
RTC Commercial Assets Trust, NP3-3
Boulders Phoenician Limited Partnership
CPR Investments, Inc.
Phoenician Investments, L.P.
Wisconsin Option Inc.
Hammer & Nails, Inc.
RIB Residential LLC
RBG Residential Investors, LLC
RBG XXXV Corp.
Centerline/RBG XXXV, L.P.
RB Florida Partners, L.P.
Center VII Corporation
Center VIII Corporation
Center X Corporation
Fountain Park Corporation
Royal Falls Corporation
Woodward Investors Corporation
Woodward First National LLC
Qualco, Inc.
Quality Fifth Avenue Hotel Associates, LLc
Fifth Avenue Hospitality Associates, LLC
Baldco, Inc.
Sleepy Lake Corporation
High Flyer Corporation
Airport One Investors, LLC
Lower Westside Development Corp.
359 West 11th Street, LLC
Velocity Two, Inc.
Baldwin Hospitality, LLC
Sleepy Lake Partners, L.P.
ING Merger Inc.
Furman Selz Trust Company
Furman Selz (Ireland) LLC
Furman Selz Financial Services Unlimited
Furman Selz Advisors LLC
Furman Selz Capital LLC
Furman Selz Management (BVI) Ltd.
Furman Selz Investments LLC
Furman Selz Investors, L.P.
Furman Selz SBIC Investments LLC
Furman Selz SBIC, L.P.
ING Baring Furman Selz LLC
Furman Selz Investment II
Furman Selz Investors II, L.P.
Furman Selz Parallel Fund
Artisan Investment Management LLC
Michelangelo Partners, L.P.
Total Resources LLC
Furman Selz Resources LLC
Furman Selz Financial Services LLC
Furman Selz Merchant Capital LLC
Furman Selz Ventures, L.P.
Karnak Partners, L.P.
Saugatuck Partners, L.P.
Crestwood Capital Partners, L.P.
Crestwood Capital Partners II, L.P.
Bridgewood Capital Partners, L.P.
ING TT&S (U.S.) Holdings Corporation
ING TT&S (U.S.) Securities, Inc.
ING (U.S.) Securities, Futures & Options Inc.
ING TT&S (U.S.) Capital Corporation
Furman Selz Proprietary, Inc.
ING (U.S.) Capital Investors Holdings, Inc.
ING (U.S.) Capital Securities, Inc.
Brecco, Inc.
FSIC LLC
Mutual Fund Funding 1994-1
Pacifica Funds Distributor, Inc.
Furman Selz Residential Funding LLC
FS Trust Company
ING Bank (Chile) S.A.
Edibank S.A.
Sociedad Interbancaria De Depositos De Valores S.A.
ING Bank (Eurasia)
ING Bank (Hungary) Rt.
Giro Elszamolasforgalmi Rt.
ING Duna Ingatlanhasznositc KFT
ING Bank (Luxembourg) S.A.
CMF Advisory S.A.H.
Euromix Advisory S.A.H.
ING Bank Luxfund Management S.A.
ING International Advisory S.A.H.
ING International II Advisory S.A.H.
ING Bank (Schweiz) A.G.
Kredietbank S.A. Luxembourgeoise
ING Bank (Uruguay) S.A.
Bolsa Electronica De Valores Del Uruguay S.A.
Compania Uruguaya De Medios De Procesamiento S.A.
Red. De Intercomunicacion De Alta Seguridad S.R.L.
ING Bank of Canada
ING Bank Corporate Investments B.V.
Entero B.V.
Eruca Belegging B.V.
ING Bank Mezzaninefonds B.V.
ING Bank Participatie PPM B.V.
MKB Beleggingen B.V.
MKB Vliehors II B.V.
Wijkertunnel Beheer II B.V.
Wijkertunnel Beheer II Management B.V.
MKB Vliehors III B.V.
Small Business Publishing B.V.
N&M Holding N.V.
ING Bank Dutch Fund N.V.
ING Bank Fondsen Beheer B.V.
ING Bank Geldmarkt Fonds N.V.
ING Bank Global Custody UK Nominees Limited
ING Bank Global Fund N.V.
ING Bank Guldem Fonds N.V.
ING Bank I.T. Fund N.V.
ING Bank Luxfund Management S.A.
ING Bank Middutch Fund N.V.
ING Bank Obligatie Fonds N.V.
ING Bank Rentegroei Fonds N.V.
ING Bank Spaardividend Fonds N.V.
ING Bank Vastgoed Fonds B.V.
ING Bank Verre Oosten Fonds N.V.
ING Baring Capital Markets (C.R.), A.S.
ING Baring Financial Products
ING Baring Holding Nederland B.V.
Atlas Capital (Thailand) Limited ("Atlas")
ING Baring Securities (Thailand) Limited
ING Baring Holdings Limited
Baring Asset Management Holdings Ltd.
Baring Asset Management Ltd.
Baring International Investment Limited
Baring International Investment Management Holdings Ltd.
Baring Asset Management Inc.
Baring International Investment (Canada) Limited
Baring International Investment Management Limited
Baring Asset Management Holdings Inc.
Baring Asset Management UK Holdings Limited
Baring Asset Management (Asia) Holdings Limited
Austin Assets Limited
Baring Asset Management (Asia) Limited
Baring Asset Management (Australia) Limited
Baring Asset Management (Japan) Limited
Baring International Fund Managers (Bermuda) Limited
Baring International Fund Managers Limited
Baring International Investment (Far East) Limited
Baring Pacific Investments Limited
Baring Asset Management (C.I.) Limited
Baring International Fund Managers (Ireland) Ltd.
Baring Investment Services Inc.
Baring Mutual Fund Management S.A.
European and Asian Fund Management S.A.
Baring Investment Management Ltd.
Baring Quantative Management Ltd.
Baring Global Fund Managers Limited
Baring Private Asset Management Ltd.
Baring Fund Managers Limited
Baring Managed Funds Services Ltd.
Baring Private Investment Management Ltd.
Baring Trust Company Ltd.
Baring Trustees (Guernsey) Limited
Arnold Limited
International Metal Trading Limited
Barings (Isle of Man) Limited
Control Management Limited
Doyle Administration Limited
International Metal Trading Limited
ING Trust (Jersey) Ltd
Saline Nominees Limited
Truchot Limited
Vivian Limited
Barings (Guernsey) Limited
Barfield Nominees Limited
Barings Ireland Limited
Guernsey International Fund Managers Limited
Arnold Limited
International Metal Trading Limited
Control Management Limited
Doyle Administration Limited
International Metal Trading Limited
International Fund Managers (Ireland) Ltd.
International Securitisation Managers (Ireland) Ltd
Saline Nominees Limited
Truchot Limited
Vivian Limited
International Fund Managers UK Ltd.
Ravensbourne Registration Services Ltd.
Barings Investment Services Limited
Baring Brothers Holdings Limited
Baring (U.S.) Holdings Limited
Abbotstone Investment Company Limited
Baring Brothers Limited
Baring Brothers (Finance) Limited
Baring Brothers Argentina S.A.
Baring Brothers International Limited
Barings C.F. Holdings Limited
B.B.A.H. Pty Limited
Baring Brothers Burrows & Co. Limited
Baring Brothers Burrows Securities Limited
SAIPH Pty Limited
BBHP Pty Limited
Baring Brothers (Deutschland) GMBH
Baring Brothers International GMBH
Baring Brothers (Espana) S.A.
Barings Brothers (Italia) SRL
Baring Properties (London Wall) Limited
Baring Properties Limited
Outwich Finance Limited
Outwich Limited
Baring Warrants PLC
Barings France S.A.
Barings Nominees Limited
Bishopscourt Holdings Limited
Bishipscourt Leasing (Holdings) Limited
Bishopscourt Asset Leasing Limited
Bishopscourt Equipment Leasing Limited
Bishopscourt Industrial Finance Limited
Bishopscourt Limited
Bishopscourt Securities Limited
BVC Nominees Limited
Cotton Nominees Limited
ING Baring International Advisers Limited
ING Baring Services (Eastern Europe) Limited
ING Baring Services Limited
The Mortgage Acceptance Corporation (Holdings) Limited
The Mortgage Acceptance Corporation Limited
Yealme Securities Limited
ING Baring Financial Products
ING Baring Securities Holdings Limited
ING Baring Securities Limited
ING Baring Securities (Andean Pact) Ltda
ING Barings Peru S.A.
ING Baring Securities Services Limited
Baring Securities (Property Services) Ltd
BS Property Services (Japan) Limited
ING Baring Data Limited
INGB Dormant Holding Company Limited
Baring Securities (London) Limited
Baring Securities (OTC Options) Limited
ING Baring Management Services PTE Ltd
ING Baring Research Limited
ING Baring Securities (Overseas) Ltd.
ING Baring Securities Management Services (Hong Kong) Ltd
Maketravel Limited
INGB Securities (International) Holdings Limited
Baring Securities (Financial Services) Limited
Barsec (International) Limited
Baring Nominees (Australia) Pty Ltd
Baring Research S.A. De C.V.
Baring Securities (Australia) Limited
Baring Securities (France) S.A.
Baring Securities Pakistan (Private) Limited
Barings Mauritius Limited
ING Barings India Private Limited
ING Baring Securities (India) Pvt. Ltd.
Celtec Holdings S.A.
ING Baring Corretora De Valores Mobiliarios S.A.
Corinvest Limited
Epcorp Limited
Galax Limited
Dropny B.V.
ING Baring Chile Limitada
ING Baring International PTE Ltd
ING Baring Operational Services (Taiwan) Limited
ING Baring Securities (Andean Pact) Ltda
ING Baring Securities (Hong Kong) Ltd
ING Baring Far East Nominees Limited
ING Baring Securities (Philippines) Inc.
ING Baring Securities (Singapore) PTE Ltd
ING Baring Nominees (Singapore) PTE Ltd
ING Baring Research (Malaysia) SDN. Bhd.
ING Baring Securities (Taiwan) Limited (SICE)
ING Baring Securities, Argentina S.A.
ING Baring South Africa Limited
ING Barings Southern Africa (Proprietary) Ltd
Anodyne Nominees (Proprietary) Limited
ING Barings Peru S.A.
ING Futures & Options (Hong Kong) Limited
ING UK Capital Limited
Lokmaipattana Co. Limited
PT ING Baring Securities Indonesia
INGB Securities Client Services Limited
Aliwall Limited
Barings Securities Nominees Limited
Brunera Limited
Cereus Limited
Dianthus Limited
Eranthis Limited
Francoa Limited
Grassmere Limited
Leacroft Limited
Mountbatten Limited
ING Baring Securities (Japan) Limited
ING Baring Securities (Thailand) Limited
ING Baring Investment (Eurasia) Zao
ING Baring Securities (Hungary) Rt.
ING Baring Securities (Poland) Holding B.V.
ING Baring Securities (Romania) S.A.
ING Baring Securities (Slovakia), S.R.O.
Proctor & Gamble S.R.O.
ING Barings Ecuador Casa De Valores S.A.
ING BSK Asset Management S.A.
ING Capital Markets (Hong Kong) Limited
ING Compania De Inversiones Y Servicios Limitada
Bolsa Electronica De Chile, Bolsa De Valores S.A.
CISL Aruba A.E.C.
ING Consultants Co., Ltd.
ING Derivatives (London) Limited
Belgian Futures & Options Exchange
London Clearing House Limited
Liffe (Holdings) PLC
The International Petroleum Exchange of London Limited
ING Empreendimentos E Participacaos Ltda.
Guilder Corretora De Valores Mobiliarios S/A
ING Guilder Distribuidora De Titulos E Valores Mobiliarios S/A
ING Investment Management Ltda.
ING Servicos Ltda.
ING Finance (Ireland) Ltd
ING Forex Corporation
ING Futures & Options (Singapore) PTE Ltd
ING Inversiones, Ltda.
Corporacion Financiera ING (Colombia) S.A.
ING Investment Management Holdings (Antilles) N.V.
ING Lease Holding N.V.
CW Lease Belgium NV
CW Finance N.V.
CW Lease Luxembourg S.A.
Dealer Lease Service Belgium N.V.
CW Lease Nederland BV
Autolease OSS B.V.
CW Finance N.V.
CW Lease Belgium NV
CW Finance N.V.
CW Lease Luxembourg S.A.
Dealer Lease Service Belgium N.V.
CW Lease France S.N.C.
CW Lease Luxembourg S.A.
Dealer Lease Service Belgium N.V.
Gothia Estate II B.V.
Westment II B.V.
International Driver Service B.V.
Schade Herstel Bedrijf B.V.
ING Aircraft Lease B.V.
Fokker Brasil B.V.
ING Lease (Belgium) N.V.
Real Estate Lease SPC 1 N.V.
Savin Lease N.V.
ING Lease (Espana) EFC, SA
ING Lease (France) S.A.
ING Lease (France) S.N.C.
ING Lease (Italia) SPA
ING Lease (Nederland) B.V.
Blauwe IRM B.V.
Graphic Lease B.V.
Groen Lease B.V.
GIL 1997 (Windkracht) B.V.
ING Lease Vastgoed B.V.
Newco-One Corp.
Ship Lease International B.V.
ZIL '96 B.V.
ING Lease (Polska)
ING Lease Holding (Deutschland) GMBH
CW Lease Deutschland GMBH
CW Lease Berlin GMBH
ING Lease Deutschland GMBH
IFSC Beteiligungsgesellschaft GMBH
ING Lease (Berlin) GMBH
ING Lease Kran und Schwertransport GMBH
ING Leasing Besitzgesellschaft MBH
ING Leasing Geschaeftsfuhrungsgesellschaft MBH
ING Leasing Gesellschaft Fur Beteiligungen MBH
ING Leasing GMBH & Co. Golf KG
ING Leasing GMBH & Co. Juliett KG
ING Leasing Treuhandsgeselschaft GMBH
ING Leasing Verwaltungsgesellschaft GMBH
Uta Finanz und Leasing GMBH
ING Lease Holdings (UK) Limited
CW Lease UK Ltd
CW Finance Ltd.
Leasing Principals Limited
ING Lease (UK) Limited
ING Farm Finance Limited
ING Farm Finance (June) Limited
ING Farm Finance (March) Limited
ING Farm Finance (September) Limited
ING Lease (UK) Nine Limited
ING Lease (UK) Six Limited
ING Lease (UK) Three Limited
MKL Rentals Limited
ING Lease Interfinance B.V.
CW Lease France S.N.C.
ING Lease (Italia) SPA
Real Estate Lease SPC 1 N.V.
Runoto Belgium N.V.
Diamond Lease
ING Lease International Equipment Finance B.V.
ING Aviation Lease B.V.
Air Finance Holland B.V.
Aviation Service Holland B.V.
ING Lease (Far East 2) B.V.
ING Lease (Far East) N.V.
ING Lease (Ireland) B.V.
ING Lease (France) S.N.C.
ING Lease Structured Finance B.V.
Esbelto B.V.
Green Assets B.V.
Hirando B.V.
Hokabe Lease B.V.
ING Bank Geldmarkt Fonds Beheer B.V.
ING Lease Milieu B.V.
Quadralock 2 B.V.
SFING Europe B.V.
Tropelia B.V.
Virgula B.V.
ING Lease International Equipment Management B.V.
Air Finance Amsterdam B.V.
Air Holland Leasing II B.V.
ING (Holland Aircraft Lease) B.V.
ING Lease Aircraft B.V.
ING Lease Delaware, Inc.
Noord Lease B.V.
Postbank-Lease B.V.
Renting De Equipos E Inmuebles SA
Runoto Leasing BV
Runoto Belgium N.V.
Diamond Lease
ING Mercantile Mutual Bank Limited
ING Merchant Bank (Singapore) Limited
Export Credit Insurance Corporation of Singapore Ltd
ING Asset Management (Singapore) Ltd
ING Nominees (Singapore) PTE Ltd
ING Participation Dalrybbank B.V.
ING Private Banking Beheer B.V.
ING Bank Vastgoed Management B.V.
ING Securities (Eurasia) Zao
ING Servicios, C.A.
ING Sociedad De Bolsa (Argentina), S.A.
Mercado De Valores De Buenos Aires S.A.
ING Sviluppo Sim S.P.A.
ING Trust B.V.
Ingress N.V.
ING Management (Hong Kong) Ltd
ING Nominees (Hong Kong) Ltd
ING Trust (Antilles) NV
Formid Management N.V.
ING (Antilles) Portfolio Management N.V.
Monna NV
Jet NV
Simbad N.V.
ING Trust (Aruba) N.V.
ING Trust (BVI) Ltd.
ING Trust (Luxembourg) S.A.
ING Trust (Nederland) B.V.
ING Bank (Eurasia)
ING Bank (Luxembourg) S.A.
CMF Advisory S.A.H.
Euromix Advisory S.A.H.
ING Bank Luxfund Management S.A.
ING International Advisory S.A.H.
ING International II Advisory S.A.H.
ING Baring Securities (Romania) S.A.
ING Holdings Empreendimentos Participacao Ltda.
Guilder Corretora De Valores Mobiliarios S/A
Management Services ING Bank B.V.
ING Bank (Eurasia)
ING Baring Investment (Eurasia) Zao
ING Securities (Eurasia) Zao
Muteka BV
ING Trust (Suisse) AG
Trust Maatschappij ING Bank B.V.
Anorga B.V.
Corpovea B.V.
N.V. Balmore Vastgoed U.S.A.
Den Hamer Beheer B.V.
Diagonac B.V.
Henry F. Holding B.V.
ING Aconto N.V.
N.V. Balmore Vastgoed U.S.A.
Mijcene B.V.
Vitigudino B.V.
N.V. Balmore Vastgoed U.S.A.
N.V. Balmore Vastgoed U.S.A.
Paramito B.V.
Rescit I BV
Storeria B.V.
Tuvor B.V.
Vitigudino B.V.
N.V. Balmore Vastgoed U.S.A.
Vitigudino B.V.
N.V. Balmore Vastgoed U.S.A.
Westward Capital II B.V.
ING Valores (Venezuela) C.A.
ING Vastgoed B B.V.
ING Real Estate (BHS) B.V.
ING Real Estate International Development B.V.
Holland Park Sp. Zoo
ING Real Estate Iberica SL
ING Real Estate International Development (Liege) B.V.
ING Real Estate Sp. Zoo
ING Real Estate Vasco Da Gama B.V.
London & Amsterdam Properties Ltd
London and Amsterdam Development Ltd.
London & Amsterdam Properties Ltd
MBO Camargo SA
Inmolor SA
MBO La Farga SA
Hospitalet Center, SL
MBO Morisson Ltd
Warsaw I B.V.
1300 Connecticut Avenue Joint Venture Ltd
ING Real Estate International Investment II B.V.
ING Real Estate International Investment III B.V.
ING Vastgoed Financiering N.V.
Bedrijfsgebouw MBO - Riho C.V.
Groeneveld MBO C.V.
M.B.O. Vastgoed Lease B.V.
Lindenburgh C.V.
Maria Hove C.V.
MBO Brova C.V.
MBO North America Finance B.V.
Residential Financial Development LLC
ING Vastgoed Fondsen B.V.
Winkelfonds Nederland Management B.V.
ING Vastgoed Ontwikkeling B.V.
Amsterdamse Poort Holding IV B.V.
Amsterdamse Poort IV B.V.
Grondpoort IV B.V.
Amsterdamse Poort II B.V.
BV Bedrijvenpark G.P.
CV Bedrijvenpark G.P.
Grondpoort II B.V.
Gulogulo B.V.
Antibes Holding B.V.
ING Vastgoed Arena B.V.
Muller Bouwparticipatie B.V.
V.O.F. Winkelcentrum Markt Noorderpromenade Drachten
MBO - Ruijters B.V.
Holding 'T Loon B.V.
Vastgoed 'T Loon B.V.
Wolfstreet Holding B.V.
Wolfstreet B.V.
Wolfstreet Grond B.V.
MBO Brinkstraat Holding B.V.
MBO Brinkstraat B.V.
MBO Brinkstraat Grond B.V.
MBO Catharijnesingel Holding B.V.
MBO Catharijnesingel B.V.
MBO Catharijnesingel Grond B.V.
MBO De Centrale Holding B.V.
MBO De Centrale B.V.
MBO De Centrale Grond B.V.
MBO Dommelstaete Holding B.V.
MBO Dommestaete B.V.
MBO Emmasingel Holding B.V.
MBO Emmasingel B.V.
MBO Emmasingel Grond B.V.
MBO Guyotplein Holding B.V.
MBO Guyotplein B.V.
MBO Guyotplein Grond B.V.
MBO Kousteensedijk Holding B.V.
MBO Kousteensedijk B.V.
MBO Kousteensedijk Grond B.V.
MBO Kruseman Van Eltenweg Holding B.V.
MBO Kruseman Van Eltenweg B.V.
MBO Kruseman Van Eltenweg Grond B.V.
MBO Marienburg B.V.
Marienburg V.O.F.
MBO Martinetsingel Holding B.V.
MBO Martinetsingel B.V.
MBO Martinetsingel Grond B.V.
MBO Oranjerie Holding B.V.
MBO Oranjerie B.V.
MBO Oranjerie Grond B.V.
MBO Pleintoren Holding b.V.
MBO Pleintoren BV
MBO Pleintoren Grond BV
MBO Via Catarina B.V.
Via Catarina "Empredimentos Imobiliarios" SA
MBO Walburg Holding B.V.
MBO Walburg B.V.
MBO Walburg Grond B.V.
MBO Willem II Singel Holding B.V.
MBO Willem II Singel B.V.
MBO Willem II Singel Grond B.V.
Q-Park Bovenmaas I B.V.
Q-Park N.V.
Q-Park Nederland B.V.
Q-Park Exploitatie B.V.
Q-Park De Bijenkorf B.V.
Q-Park Beheer B.V.
Q-Park Brabant B.V.
Q-Park Reserve I B.V.
Q-Park Byzantium B.V.
Q-Park City Holding B.V.
Q-Park City B.V.
Q-Park Schouwburg B.V.
Q-Park De Klomp B.V.
Q-Park Raadhuis B.V.
Q-Park Reserve II B.V.
Stadsherstel Historisch Rotterdam N.V.
Supermarkt Krouwel B.V.
V.O.F. Winkelcentrum Markt Noorderpromenade Drachten
Vastgoed De Brink Holding B.V.
Vastgoed De Brink B.V.
Wilhelminahof MBO B.V.
Zuidplein Beheer BV
ING Verwaltung (Deutschland) GMBH A.G.
Allgemeine Deutsche Direktbank AG
BNL Beteiligungsgeselschaft Neue Laender GMBH & Co. KG
Liquiditats-Konsortialbank GMBH
ING-North East Asia Bank
INIB N.V.
Locura Belegging B.V.
Luteola B.V.
Melifluo B.V.
Middenbank Curacao N.V.
Advisory Company Luxembourg
Altasec N.V.
Corporacion Financiera ING (Colombia) S.A.
Aralco N.V.
Atlas Venture Fund I, L.P.
Banco Latino-Americano De Exportaciones S.A.
Cayman Islands Funds N.V.
Corporacion Financiera ING (Colombia) S.A.
Datasegur S.R.L.
Fiseco N.V.
Granity Shipping N.V.
Institucion Financiera Externa Middenbank Curacao N.V. (Uruguay)
ING Bank (Chile) S.A.
Edibank S.A.
Sociedad Interbancaria De Depositor De Valores S.A.
ING Barings Ecuador Casa De Valores S.A.
ING Compania De Inversiones Y Servicios Limitada
Bolsa Electronica De Chile, Bolsa De Valores S.A.
CISL Aruba A.E.C.
ING Inversiones, Ltda.
Corporacion Financiera ING (Colombia) S.A.
ING Sociedad De Bolsa (Argentina), S.A.
Mercado De Valores De Buenos Aires S.A.
Kamadora Investments N.V.
Corporacion Financiera ING (Colombia) S.A.
Lerac Investment S.A.
Red Rose Investments N.V.
Unilarse
Zermatt N.V.
Miopia B.V.
Multiaccess B.V.
MKB Adviseurs B.V.
MKB Card B.V.
MKB Investments BV
De Springelberg B.V.
Het Dijkhuis B.V.
Palino B.V.
Tiberia B.V.
MKB Punt B.V.
Business Compass Holding B.V.
N.V. Instituut Voor Ziekenhuisfinanciering
Nationale-Nederlanden Financiele Diensten B.V.
B.V. Financieringsmaatschappij Vola
B.V. Kredietmaatschappij Vola
Dealer Cash Plan B.V.
Cash Plan B.V.
Finantel B.V.
Sentax Assurantie B.V.
G. J. Van Geet Beheer B.V.
Alegro Krediet B.V.
Gelderse Discount Maatschappij B.V.
Sentax Beheer B.V.
Finam Krediet B.V.
Sentax Lease B.V.
Vola Geldleningen B.V.
Nederlandse Bouwbank N.V.
Nederlandse Financieringsmaatschappij Voor Ontwikkelingslanden N.V.
Nedermex Limited N.V.
Netherlands Caribbean Bank N.V.
Nethworks Integrated Project Consultancy B.V.
Nofegol Beheer B.V.
NCM Holding N.V.
NMB Equity Participaitons N.V.
NMB-Heller Holding N.V.
Handlowy-Heller SA
Heller GMBH
Heller Bank A.G.
International Credit Service S.A.S.
Heller Finanz GMBH
Info-Und Beratungsunternehmen GMBH
NMB-Heller Ltd.
NMB-Heller N.V.
Agpo Participatiemaatschappij B.V.
Felix Tigris B.V.
Inter Credit B.V.
International Credit Service S.A.S.
International Credit Service S.A.S.
NMB-Heller Zweigniederlassung Neuss
Zamenbrink B.V.
Zamenterp B.V.
OB Heller AS
Okalia N.V.
Olivacea B.V.
Ontwikkelingsmaatschappij Noordrand B.V.
Orcinus B.V.
Oscar Smit's Bank N.V.
Bouwmaatschappij Mecklenburgplein B.V.
Kenau B.V.
P.T. ING Indonesia Bank
Parmola B.V.
Paronyme B.V.
Pendola B.V.
Perotis B.V.
Policy Extra Holdings Limited
Postbank N.V.
Amsterdam Exchanges N.V.
Interpartes Incasso B.V.
Postbank Aandelenfonds N.V.
Postbank Beleggingsfonds N.V.
Postbank Beleggingsfondsen Beheer B.V..
Postbank Beleggingsfondsen Bewaar B.V.
Postbank Chipper Beheer B.V.
Postbank Euro Aandelen Fonds N.V.
Postbank Groen N.V.
Postbank I.T. Fonds N.V.
Postbank Interfinance B.V.
Postbank Nederlandfonds N.V.
Postbank Obligatie Fonds N.V.
Postbank Obligatiefonds Beheer B.V.
Postbank Vastgoedfonds N.V.
Postbank Vermogensgroeifonds N.V.
Postbank Wereldmerkenfonds N.V.
Postkantoren B.V.
Prena Belegging B.V.
T Oye Deventer B.V.
A. Van Der Molen Herenmode B.V.
A. Van Der Pol Beleggingsmaatschappij Amsterdam B.V.
A. Van Venrooy Beleggingen B.V.
A. Van Weringh Beleggingen B.V.
A.C.M. Nienhuis Houdstermaatschappij B.V.
B.V. Raadgevend Bureau Nienhuis Consultans
A.H. Blok Holding B.V.
A.H.M. Habets Beheer B.V.
A.J. Vos Makelaardij Onroerende Goederen B.V.
Abades B.V.
Abrocoma B.V.
Ad Barnhard Holding B.V.
Albranis B.V.
Almenzor B.V.
Altimira B.V.
Ambito N.V.
Aralar B.V.
Atitlan B.V.
B.V. Beheersmaatschappij Nuyt En Heikens
B.V. Odripi
B.V. Varen ABC
B.V. Vulca Beleggingsmaatschappij
Barbatus B.V.
Barbuda B.V.
Bebida B.V.
Beheermaatschappij Van Der Reijnst B.V.
Beheermaatschappij Van Het Beleggingsfonds Van De 7 B.V.
Beheermaatschappij Darius B.V.
Beheermaatschappij Stouwe B.V.
Beheermaatschappij Van Putten B.V.
Beheersmaatschappij Elma Schrijen B.V.
Beheersmaatschappij K.G. Tjia B.V.
Beheersmaatschappij Luco Zuidlaren B.V.
Beheersmij A.J. Konst B.V.
Belagua B.V.
Bergara B.V.
Bermillio B.V.
Betulina B.V.
Bidasoa B.V.
Biporus B.V.
Blarina B.V.
Brasas B.V.
Bravura B.V.
Bremer-Van Mierlo Belegginsgmaatschappij B.V.
Bustia B.V.
C. J. Buyzen Beheer B.V.
C. J. H. - En J. J. Heimeriks Holding B.V.
Calando Belegging B.V.
Camilo B.V.
Castroverde B.V.
Catoneria B.V.
Cermanita B.V.
Cicania B.V.
Clacri B.V.
Colocar B.V.
OCB Beheer B.V.
Concolor B.V.
Cortada B.V.
Cotranco B.V.
Crescentes Prins B.V.
Cumbras B.V.
Cupula B.V.
D'Eijk B.V.
De Groninger Lederwaren Industrie B.V.
Delta Nederland Beheer B.V.
Dorsalis B.V.
Dr. De Grood Beheer B.V.
DKP Beheer B.V.
Dick Kooiman Publication/Productions B.V.
DSBV-Enserink B.V.
DSBV-Ploeger B.V.
E. Romar Beheer B.V.
Omnium B.V.
Empluma B.V.
Entorno B.V.
Epic Investments B.V.
Ernsatus B.V.
Esvice B.V.
Exel Beheer B.V.
Exploitatie En Beleggingsmaatschappij Alja Eindhoven B.V.
F. R. Hoffschlag Beleggingen B.V.
Familiale Investerings Maatschappij F.I.M.
Farlita B.V.
Flantua Beheer B.V.
Fregenda B.V.
Funjob Investments B.V.
G. Laterveer Beheer B.V.
Garlito B.V.
Gebrema Beheer B.V.
Gekrabeheer B.V.
Germs Beleggingen B.V.
Glabana B.V.
Golpejas B.V.
H. Van Duinen Beheer B.V.
H. Mekenkamp Holding B.V.
Mekenkamp Beheer B.V.
H. Weterings Holding B.V.
H. D. En L.B. Meijer Beheer B.V.
H. G. Van Der Most Beheer B.V.
Handelsonderneming E. Spee B.V.
Hepec Beheer B.V.
Hilschip BV
Hispidus B.V.
Hof En Frieling Beheer B.V.
Hof & Frieling Onroerend Goed B.V.
Holding Hoveling Beheer B.v.
Holding J.W.G. Huijbregts B.V.
Holding Schildersbedrijf West-Friesland B.V.
Holding Schuiling B.V.
Holding Th. A. Wellink B.V.
Hotel-Restaurant Boerhave B.V.
Huaco B.V.
Humada B.V.
Ignaro B.V.
Imbricata B.V.
Incoloro B.V.
Indonea B.V.
Allshoes Schoengroothandel B.V.
ING Bank Spaardividend Fonds Beheer B.V.
J & A Holding B.V.
J. B. Van Den Brink Beleggingsmaatschappij B.V.
J. G. Mekenkamp Holding B.V.
Mekenkamp Beheer B.V.
J. H. Moes Holding B.V.
J. P. Korenwinder Beheer B.V.
J. W. Th. M. Kohlen Beheer B.V.
Jemaas Beheer B.V.
Jongert Beheer B.V.
K & M Beheer B.V.
Kalliope B.V.
Bacolac B.V.
Kapellenberg B.V.
Kijkgroep B.V.
Koehorst Promotion Beheer B.V.
KBM Maarssen B.V.
L. Martens Beheer B.V.
La Douce Vie Network B.V.
Lagotis B.V.
Larino B.V.
Latourette B.V.
Leaver B.V.
Ledanca B.V.
Lektura Tiel Beheer B.V.
Licorera B.V.
Liecene B.V.
Lin Beheer B.V.
Lomajoma Holdings B.V.
Lorkendreef Beheer N.V.
Lustroso B.V.
M. B. Van Der Vlerk B.V.
Madrigal B.V.
Marres B.V.
Masegoso B.V.
Matthew Holding B.V.
Mazairac Belegging B.V.
Minnaar Holding B.V.
Mirabilis B.V.
Molenwiede B.V.
Muguet B.V.
Multicover B.V.
Pulido B.V.
Mustang B.V.
Olseria B.V.
Arend Broekhuis B.V.
P. Nienhuis Houdstermaatschappij
P. J. Heinrici Beheer B.V.
Pastrana B.V.
Pedralva B.V.
Pemac B.V.
Penuria B.V.
Perola Belegging B.V.
Pertusa B.V.
Peter Trompalphen Aan Den Rijn Beheer B.V.
Phobos Beleggingen
Pinicola B.V.
Pluijmen Holding B.V.
Portelas B.V.
Postigo B.V.
Prestamo B.V.
Pruis Elburg Beheer B.V.
Puebla B.V.
Pulido B.V.
Rayhold Management En Deelneming B.V.
Rescoldo B.V.
Ressel B.v.
Retrasos B.V.
Rodeba Deurne B.v.
Roelcene B.V.
Rowanda B.V.
Rudlolf & Peter Herenmode En Confectie B.V.
Sabra Holding B.V.
Valpacos B.V.
Sacobel Beheer B.V.
Schnieders Beheer B.V.
Simonis Beheer B.V.
Simonis Beleggingsmaatschappij B.V.
Sipororo B.V.
Spaleta B.V.
Spatgens Beheer B.V.
Stampida B.V.
Stamveld B.V.
Steendam Beleggingsmaatschappij Drachten B.V.
Storm Beheer B.V.
Beheermaatschappij Baarlo B.V.
Strokkur B.V.
Sunrise Investments B.V.
Sustento B.V.
Svalbard Beheer B.V.
T. A. Lie Beheer B.V.
T. M. D. Beheer B.V.
Beheermaatschappij Baarlo B.V.
Tadavia B.V.
Beleggings - En Beheer Maatschappij Solina B.V.
Refina B.V.
Talboom Beheer B.V.
Tapirus B.V.
Tarsius B.V.
Technisch Advies Bureau Jaba B.V.
Ter Linden En Heijer Holding B.V.
Tessara Zaanlandia B.V.
Thecoar B.V.
Theo Kentie Holding B.V.
Theo Kentie Design B.V.
Traslado B.V.
Trasgo B.V.
Treetop B.V.
Trituris B.V.
Truckstar Holding B.V.
Tucupido B.V.
Tricor B.V.
U. Ringsma Beheer B.V.
Unitres Holding B.V.
Vaanhold & Van Zon Holding B.V.
Van Den Heuvel Beheer B.V.
Van Loon Beheer B.V.
Van Roij Holding B.V.
Van Zwamen Holding B.V.
Vebe Olst B.V.
Vegem Beheer B.V.
Venidero B.V.
Vette Consultants B.V.
Vicar B.V.
Vidriales B.V.
W. Van Den Berg B.V.
W. N. Van Twist Holding B.V.
Wabemij B.V.
Wiancini B.V.
Rentista B.V.
Reoco Limited
Rutilus B.V.
RL & T (International) N.V.
Securo De Depositos S.A.
Siam City Asset Management Co., Ltd
Slivast B.V.
Societe Financiere Du Libans. A.L.
Society for Worldwide Interbank Financial Telecommunication S.C.
Stichting Administratiekantoor ING Bank Global Custody
Tablero B.V.
Tolinea B.V.
Tripudio B.V.
Tunnel Onder De Noord B.V.
C. V. Exploitatiemaatschappij Tunnel Onder De Noord
Unidanmark A/S
Verenigde Bankbedrijven N. V.
Westland Utrecht Hypotheekbank N.V.
Amstgeld Management AG
Amstgeld N.V.
Amstgeld Trust AG
Bouw En Exploitatiemaatschappij Deska XXIII B.V.
Charterhouse Vermogensbeheer B.V.
Hypothecair Belang Gaasperdam I N.V.
Assorti Beheer Amsterdam B.V.
Muidergracht Onroerend Goed B.V.
Amstel Gaasperdam B. V.
Bouw-, Exploitatie En Administratie Maatschappij Amer IV B.V.
N.V. Zeker Vast Gaasperdam
Rijn Gaasperdam B.V.
Juza Onroerend Goed B.V.
Hazo Immobilia B.V.
Kort Ambacht Maatschappij Tot Exploitatie Van Onroerende Goederen B.V.
Utrechtse Financierings Bank N.V.
Utrechtse Hypotheekbank N.V.
Algemeene Waarborgmaatschappij N.V.
Hypotheekbank Voor Nederland II N.V.
Hypotheekbank Voor Nederland N.V.
Standard Hypotheekbank N.V.
ING Bank Hypotheken N.V.
Nationale Hypotheekbank N.V.
Hollandsche Hypotheekbank N.V.
Zuid Nederlandsche Hypotheekbank N.V.
Vermogensplanning N.B.I. B.V.
W.U.H. Finanz A.G.
Westland/Utrecht Leasing B.V.
Berchem Onroerend Goed B.V.
Berkelse Poort B.V.
Beuke Poort B.V.
Brasemer Poort B.V.
Bruine Poort B.V.
Denne Poort B.V.
Doetichem Immobilia B.V.
Dommelse Poort B.V.
Drechtse Poort B.V.
Eike Poort B.V.
Esse Poort B.V.
Frabu Immobilia B.V.
Friese Poort B.V.
Gelderse Poort B.V.
Gele Poort B.V.
Grijze Poort B.V.
Groninger Poort B.V.
Helo Immobilia B.V.
Holendrecht Gemeenschappelijk Beheer B.V.
Holendrecht Parking B.V.
Hollandse Poort B.V.
Iepe Poort B.V.
Kager Poort B.V.
Kilse Poort B.V.
Lekse Poort B.V.
Limburgse Waterpoort B.V.
Lingese Poort B.V.
Markse Poort B.V.
Oranje Poort B.V.
Paarse Poort B.V.
Reggese Poort B.V.
Roerse Poort B.V.
Schepa Immobilia B.V.
Sparre Poort B.V.
Spoolde B.V.
Spuise Poort B.V.
Thames Poort B.V.
Utrechtse Poort B.V.
Vechtse Poort B.V.
Vliestse Poort B.V.
Westland/Utrecht Bouwonderneming Wubo VI B.V.
Westland/Utrecht Bouwonderonderneming Wubo IV B.V.
Wilge Poort B.V.
Zeeuwse Poort B.V.
Westland/Utrecht Verzekeringen B.V.
Westlandsche Hypotheekbank N.V.
Algemeene Hypotheekbank N.V.
Hypotheekbank Maatschappij Voor Hypothecaire Crediet N.V.
Groningsche Hypotheekbank N.V.
Vaderlandsche Hypotheekbank N.V.
Zeeuwsche Hypotheekbank N.V.
Zuid-Hollandsche Hypotheekbank N.V.
Zugut B.V.
ING Verzekeringen N.V.
ING Insurance International B.V.
Nationale-Nederlanden Intervest II B.V.
ING North America Real Estate Holdings Inc.
ING Financial Services International (Asia) Ltd.
Nationale-Nederlanden Intervest XIII B.V.
Nationale-Nederlanden Intertrust B.V.
N.N. US Realty Corp
B.V. Nederlandsche Flatbouwmaatschappij
NN Korea
ING Continental Europe Holdings B.V.
De Vaderlandsche N.V.
Nationale Omnium N.V.
De Vaderlandsche Spaarbank N.V.
RVS Financial Services N.V.
Fiducre N.V.
Sodefina S.A.
SA De Vaderlandsche Luxemburg
Immo "De Hertoghe" NV
Westland/Utrecht Hypotheekmaatschappij N.V.
Intermediair Services N.V.
RVS Verzekeringen N.V.
Gefinac N.V.
Proodos General Insurances S.A.
NN Mutual Fund Management Co.
The Seven Provinces International B.V.
Nationale-Nederlanden Magyarorszagi Biztosito Rt
NN Mutual Fund Services and Consulting Ltd.
ING Management Services s.r.o.
Prumy Penzijni fond a.s.
Nationale-Nederlanden Polska S.A.
Nationale-Nederlanden Poist'ovna S.A.
ING Management Services Slovensko spol s.r.o.
Nationale-Nederlanden Agencia de Valores S.A.
NN Romania Asigurari de Viata S.A.
Sviluppo Finanziaria
ING Investment Management Italy
NN Vida Compania de Seguros y Raeseguros S.A.
NN Generales Compania e Seguros y Raeseguros
Nationale-Nederlanden Pojistovna
ING Latin American Holdings
ING Insurance Chile Holdings Limitada
ING Seguros de Vida S.A.
NNOFIC
Nationale-Nederlanden (UK) Ltd.
NN (UK General) Ltd.
The Orion Insurance
ING Australia Limited
Mercantile Mutual Holdings Ltd.
Mercantile Mutual Funds Management
Mercantile Mutual Global Ltd.
Athelas
Mercantile Mutual Insurance (Australia) Ltd.
M.A.F.G. Ltd.
Mercantile Equities Ltd.
Greater Pacific (Leasing) Ltd.
Amfas Australia Pty Ltd.
Australian General Insurance Co. Ltd.
"The Seven Provinces" Insurance Underwriters
MM Investment Management Ltd.
The Mercantile Mutual Life Insurance Co. Ltd.
MML Properties Pty Ltd.
Mercantile Mutual Deposits Ltd.
Union Investment Co. Ltd.
Mercantile Mutual Securities Ltd.
Tazak Pty Ltd.
Mercantile Mutual Custodians Pty. Ltd.
Mercantile Mutual Casualty Insurance Ltd.
Australian Brokers Holdings Ltd.
Australian Brokers Ltd.
Australian Community Insurance Ltd.
Mercantile Mutual Insurance (Workers Compensation) Ltd.
Mercantile Mutual Insurance (N.S.W. Workers Compensation) Ltd.
Prosafe Investments Ltd.
Dinafore Pty Ltd.
Tongkang Pty Ltd.
MM Investment Management
ING Canada Holdings Inc.
AFP Financial Services
ING Canada Inc.
The Halifax Insurance Company
Western Union Insurance Company
Wellington Insurance Company
La Compagnie d'Assurances Belair
The Commerce Group Insurance La Compagnie d'Assurances
NN Life Insurance Company of Canada
NN Funds Limited
NN Capital Management
NN Maple Leaf
ING America Insurance Holdings Inc.
Equitable of Iowa Companies
Directed Services, Inc.
Equitable Investment Services, Inc.
Equitable Life Insurance Company of Iowa
Equitable American Insurance Company
Equitable Creative Services, Ltd.
Equitable Companies
CLC, Ltd.
Equitable American Marketing Services, Inc.
Equitable Marketing Services, Inc.
Younkers Insurance & Investments, Ltd.
USG Annuity & Life Company
USGL Service Corporation
Equitable of Iowa Companies Capital Trust
Equitable of Iowa Companies Capital Trust II
Equitable of Iowa Securities Network, Inc.
Golden American Life Insurance Company
First Golden American Life Insurance Company of New York
Locust Street Securities, Inc.
IFG Network Securities
Shiloh Farming Company
Tower Locust, Ltd.
ING America Life Corporation
Georgia US Capital Inc.
Life Insurance Company of Georgia
Springstreet Associates, Inc.
Southland Life Insurance Co.
Security Life of Denver Insurance Company
First ING Life of New York
First Secured Mortgage Deposit Corp.
ING American Equities, Inc.
Midwestern United Life Insurance Company
Wilderness Associates
Afore Bital ING, S.A. de C.V.
Columbine Life Insurance Co.
ING Fund Services Co., Inc.
ING Investment Management, Inc.
ING Investment Management LLC
ING Mutual Funds Management LLC
ING Funds Distributor Inc.
ING Funds Services LLC
ING North America Insurance Corporation
ING Seguros Sociedad Anonima de Capital Variable
Lion Custom Investments Inc.
Lion Custom Investments II Inc.
MIA Office Americas, Inc.
Multi-Financial Group, Inc.
Multi-Financial Securities Corporation
Multi-Financial Securities Corporation Massachusetts
Multi-Financial Securities Corporation of Ohio
Multi-Financial Securities Corporation of Texas
Orange Investment Enterprises Inc.
Security Life Assignment Corp.
ING Seguros S.A. de C.V.
United Protective Company
Security Life of Denver International Ltd.
SLR Management (Bermuda) Ltd.
VESTAX Capital Corporation, Inc.
VESTAX Securities Corp.
VTX Agency Inc.
PMG Agency, Inc.
VTX Agency of Michigan, Inc.
ING US P&C Corporation
Diversified Settlements, Inc.
Peerless Insurance Company
The Netherlands Insurance Company
America First Insurance Company
Alabama First Insurance Company
Excelsior Insurance Company
Indiana Insurance
Consolidated Insurance Company
Cooling-Grumme-Mumford Company, Inc.
Blue Cross Medical Consultancy (Singapore) Pte. Ltd.
ING Indonesia Insurance P.T.
ING Life Insurance Japan
Nederlandse Reassurantie Groep Holding N.V.
Nederlandse Reassurantie Groep N.V.
NRG London Levensherverzekering
Algemene Levensherverzekering Maatschappij N.V.
Vereenigde Assurantie Bedrijven "Nederland" N.V.
Reassurantie Holding Nederland N.V.
Internationale Reassurantie Maatschappij Nederland N.V.
Reassurantie Maatschappij Nederland N.V.
Ruckversicherungs-Clearing A.G.
Reinsurers Marketing B.V.
N.V. Beleggingsmaatschappij NRG
Reassurantie Beleggingen N.V.
NRG Woningbouw B.V.
BMA Beleggingsmaatschappij "Alliance" B.V.
"Traviata" Onroerend Goed B.V.
The Victory Reinsurance Corporation of the Netherlands N.V.
NRG Victory Holdings Ltd.
NRG London Reinsurance Company Ltd.
NRG Fenchurch Insurance Company Ltd.
NRG Victory Australia Holdings Ltd.
NRG Victory Australia Ltd.
NRG Victory Reinsurance Corporation Ltd.
The Victory Health Reinsurance Corporation Ltd.
NRG Victory Management Ltd.
European Life Marketing & Actuarial Consultancy Ltd.
European Life Marketing & Actuarial Consultancy 92 Ltd.
Medical Expenses Development and Insurance Consultancy Services Ltd.
NRG Victory Management Services Ltd.
General Reinsurance Syndicate Ltd.
General Reinsurance Syndicate Ltd. (Trustee)
London Reinsurance Comp. Ltd.
NRG Victory Life and Health Services Ltd.
NRG Victory Canada Management Ltd.
NRG Victory Management (Hong Kong) Ltd.
NRG America Holding Company
Philadelphia Reinsurance Corporation
NRG America Life Reassurance Corporation
NRG American Management Corporation
Market Run Off Services Ltd.
NRG Antillean Holding N.V.
NRG Antillean Reinsurance Company N.V.
NRG Victory International Ltd.
NRG Victory Management (Bermuda) Ltd.
SRO Run-Off Ltd. Bermuda
ING Life Insurance Co. (Phillippines)
ING Penta Life Insurance Indonesia P.T.
ING Insurance Consultants (HK) Ltd.
ING Reinsurance International Holding Co. Ltd.
ING Reinsurance International
Nationale-Nederlanden Nederland B.V.
Nationale-Nederlanden Schadeverzekering Maatschappij N.V.
H. van Veeren B.V.
Nationale-Nederlanden Greek General Insurance Company S.A.
Nationale-Nederlanden Levensverzekering Maatschappij N.V.
B.V. Beleggingsmaatschappij Berendaal
Consortium Scheveninggen B.V.
RVS Beroeps-en Bedrijfsfinanciering B.V.
De Bossche Poort B.V.
ING Vastgoed V B.V.
ING Vastgoed Belegging B.V.
B.V. Beleggingsmaatschappij Vinkendaal
Muggenburg Beheer B.V.
Muggenburg C.V.
ING REI Investment U.K. B.V.
Nationale-Nederlanden Real Estate Ltd.
ING Vastgoed Beheer Maatschappij I B.V.
ING Vastgoed Bewaar Maatschappij I B.V.
Nationale-Nederlanden Intervest 52 B.V.
Bouwfonds Nationale-Nederlanden B.V.
Nationale-Nederlanden Bouwfonds 1975 B.V.
Bouwfonds AVG B.V.
Bouwfonds Nemavo B.V.
Bouwfonds Anklaar-Apeldoorn 1967 B.V.
Bouwfonds Bilthoven 1969 B.V.
Bouwfonds Roveso B.V.
RVS Bouwfonds B.V.
Bouwfonds Utrecht 1967 B.V.
Amersfoort Premiewoningen B.V.
Bouwfonds Valken Staete B.V.
Nationale-Nederlanden Bouwfonds 1976 B.V.
ING Real Estate International Investment I B.V.
ING REI Investment U.K. B.V.
ING Vastgoed Fondsbelegging BV
Jetta Vastgoed B.V.
B.V. Algemene Beleggingsmaatschappij "Lapeg"
ING Insurance Argentina
Nationale-Nederlanden Greek Life Insurance Company S.A.
RVS Levensverzekering N.V.
RVS Schadeverzekering N.V.
Tiel Utrecht Levensverzekering N.V.
Tiel Utrecht Schadeverzekering N.V.
Utrechtsche Algemeene Brandverzekering Maatschappij N.V.
Assurantiekantoor A Brugmans B.V.
Algemene Zeeuwse Verzekering Maatschappij N.V.
Apollonia Levensverzekering N.V.
N.V. Nationale Borg-Maatschappij
N.V. Belegging- en Beheer Maatschappij Keizersgracht
Antilliaanse Borg-Maatschappij N.V.
Amfas Exploitatie Maatschappij B.V.
AVG Exploitatie en Beheer B.V.
Amfas Hypotheken N.V.
Noordwester Hypotheken N.V.
Amfinex II B.V.
Westermij B.V.
Amfico B.V.
AVG Exploitatie I B.V.
ING Bewaar Maatschappij IV B.V.
S.C.P. AVG Investissement
Assurantiemaatschappij "De Zeven Provincien" N.V.
"Transatlantica" Herverzekering Maatschappij N.V.
"The Seven Provinces" Insurance Underwriters Ltd.
Ramus Insurance Ltd.
Tiel Utrecht Verzekerd Sparen N.V.
B.V. Algemene Beleggings Maatschappij Reigerdaal
Oostermij B.V.
Nationale-Nederlanden Pensioendiensten B.V.
Nationale-Nederlanden Zorgvezekering N.V.
B.V. Algemene Beleggingsmaatschappij "Kievietsdaal"
NeSBIC-Postbank B.V.
Nitido B.V.
Podocarpus Beheer B.V.
Parcom Ventures B.V.
Parcom Beheer BV
Parcom CV
Parcom Services BV
Postbank Schadeverzekering N.V.
Maatschappij tot Exploitatie van Onroerende Goederen "Gevers Deynootplein" BV
Maatschappij tot Exploitatie van Onroerende Goederen "Kurhaus" B.V.
Postbank Levensverzekering N.V.
RVS Beleggingen N.V.
Netherlands Life Insurance Company Ltd.
AO Artsen-Verzekeringen N.V.
Grabenstrasse Staete B.V.
ING Life Insurance International N.V.
Nationale-Nederlanden Internationale Schadeverzekering N.V.
Fatum Vermogensbeheer
N.V. Surinaamse Verzekeringsagenturen Maatschappij
Seguros Norman Moron N.V.
N.V. Arubaanse Verzekeringsagenturen Maatschappij
Nationale-Nederlanden Herverzekering Maatschappij N.V.
AVG Exploitatie IX B.V.
Jahnstrasze Gebaude B.V.
Maatschappij tot Exploitatie van Onroerende Goederen "Palace" B.V.
Nationale-Nederlanden Interfinance B.V.
Maatschappij tot Exploitatie van Onroerende Goederen "Grand Hotel" B.V.
N.V. Haagsche Herverzekering Maatschappij van 1836
Baring Central European Investments B.V.
Baring Asian Flagship Investments B.V.
ING Fund Management B.V.
Wijkertunnel Beheer I B.V.
Nationale-Nederlanden Beleggingsrekening N.V.
Nationale-Nederlanden CSFR Real Estate v.o.s.
ING Bewaar Maattschappij I B.V
ING Vastgoed B.V.
ING Real Estate (Asia) PTE Ltd.
ING Real Estate North America Corporation
Nationale-Nederlanden Intervest XII B.V.
B.V. Algemene Beleggingsmaatschappij Van Markenlaan
Kantoorgebouw Johan de Wittlaan B.V.
Nationale-Nederlanden Holdinvest B.V.
Nationale-Nederlanden International Investment Advisors B.V.
B.V. Algemene Beleggingsmaatschappij Fazantendaal
Maatschappij Stadhouderslaan B.V.
DESKA LII B.V.
J.H. Alta en Co. B.V.
Westland/Utrecht Projektontwikkeling B.V.
Bouwonderneming Amer LII B.V.
ING Real Estate Colombo B.V.
Loeffpleingarage B.V.
B.V. Maatschappij tot Exploitatie van Onroerende Goederen Smeetsland
B.V. Vastgoedmaatschappij "Combuta"
B.V. Vastgoed Maatschappij "Promes"
Beheer- en Exploitatiemaatschappij "De Vestingwachter" B.V.
Nationale-Nederlanden Hypotheekbank N.V.
N.V. Arnhemsche Hypotheekbank voor Nederland
Nationale-Nederlanden Financiering Maatschappij B.V.
B.V. Betaalzegelbedrijf "De Voorzorg" J. van Ouwel
Nationale-Nederlanden Finance Corporation (Curacao) I.L.
Nationale-Nederlanden Vermogensbeheer B.V.
NeSBIC Nationale-Nederlanden B.V.
BOZ B.V.
ABV Staete B.V.
B.V. "De Administratie" Maatschappij tot Exploitatie van Onroerende Goederen
Amersfoort-Staete B.V.
Arnhem Staete B.V.
Belart Staete B.V.
Belart S.A.
N.V. Square Montgomery
Steenstaete S.A.
Berkel-Staete I B.V.
Berkel-Staete II B.V.
Blijenhoek Staete B.V.
S.N.C. Blijenhoek Staete et Cie
SNC Peau Bearn
Brussel Staete B.V.
Grote Markt Staete B.V.
Hoogoorddreef I B.V.
SNC Haven
Trompenburg Parking B.V.
Lena Vastgoed B.V.
S.A. du 59 Avenue d'lena
SNC le Murier
Kleber Vastgoed B.V.
S.A. du 42 Avenue Kleber
B.V. De Oude Aa-Stroom
Portefeuille Staete B.V.
S.C.I. 1e Portefeuille
S.C.I. le Michelet
S.C.I. Roissy Bureaux International
S.C.I. Square d'Asnieres
SNC Le Dome
B.V. Amiloh
ING Vastgoed N.V.
Immo Management Service S.A.
S.A. Regent-Bruxelles
Nationale-Nederlanden/Immobilier S.A.R.L.
Immogerance S.A.R.L.
Nationale-Nederlanden Intervest IV B.V.
SAS Espace Daumesnil
Nationale-Nederlanden V B.V.
Nationale-Nederlanden VII B.V.
ING Real Estate Espace Daumesnil B.V.
ING Real Estate Parking Daumesnil Viaduc B.V.
SAS Parking Daumesnil Viaduc
Cadran Invest S.A.
ING Bewaar Maatschappij II B.V.
ING Bewaar Maatschappij III B.V.
ING REI Investment Spain B.V.
ING Inmeubles S.A.
ING Bewaar Maatschappij V B.V.
ING Asset Management B.V.
Postbank Verzekeringen Beheer Maatschappij B.V.
Postbank Verzekeringen Bewaar Maatschappij B.V.
ING Vastergoed B.V.
Nationale-Nederlanden Intervest IX B.V.
Nationale-Nederlanden CSFR Intervest S.R.O.
ING Real Estate Praha Housing a.s.
Nationale-Nederlanden Praha Real Estate V.O.S.
Nationale-Nederlanden Intervest XI B.V.
Nationale-Nederlanden Hungary Real Estate KFT
ING Investment Management (Hungary) Rt.
ING Investment Management (Asia Pacific) Limited
ING Investment Management (Czech Republic) S.A.
IIM India (India) Private Ltd.
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