VARIABLE ANNUITY ACCOUNT B
Aetna Life Insurance and Annuity Company
Supplement dated September 20, 2000 to Prospectus dated September 20, 2000
as Amended by Supplement Dated August 21, 2000
The information in this Supplement updates and amends certain information
contained in the September 20, 2000, Aetna Variable Annuity Prospectus. You
should read this Supplement along with the Prospectus.
1. The following footnote updates and replaces the footnote to Example A in the
"Hypothetical Example: If You Elect the Premium Bonus Option" for contracts
issued outside of the State of New York on page 13 of the Prospectus:
* This example reflects deduction of an early withdrawal charge using the
early withdrawal charge schedule that applies to all contracts, including
Roth IRA contracts issued after September 19, 2000. This example does not
reflect the amount of any premium bonus forfeited because of an early
withdrawal during the first seven account years.
2. The following footnote is added to Example A in the "Hypothetical Example:
If You Elect the Premium Bonus Option" for contracts issued in the State of
New York on page 15 of the Prospectus:
** This example does not reflect the amount of any premium bonus forfeited
because of an early withdrawal during the first seven account years.
3. The following information updates and replaces the subsection on
"Suitability" found on page 19 of the Prospectus:
Suitability. If you expect to make purchase payments to your account after the
first account year, the premium bonus option may not be right for you. Your
account will not be credited with a premium bonus for purchase payments made
after the first account year yet we will assess the premium bonus option charge
against your account value which is increased by these additional purchase
payments. Consequently, the amount of the premium bonus option charge you would
pay over time may be more than the amount of the premium bonus we credited to
your account. Also, if you anticipate that you will need to make withdrawals
from your account during the first seven account years, you may not want to
elect the premium bonus option. When you make such a withdrawal you may forfeit
part of your premium bonus, and the amount of the premium bonus option charge
you have paid may be more than the amount of the premium bonus not forfeited.
Likewise, if you make a withdrawal during the first seven account years and the
market is down, the amount of the bonus forfeited may be greater than the then
current market value of the premium bonus. Your sales representative can help
you decide if the premium bonus option is right for you.
4. The following information updates and replaces the subsection on Legal
Matters and Proceedings found on page 60 of the Prospectus:
LEGAL MATTERS AND PROCEEDINGS
We are aware of no material legal proceedings pending which involve the
separate account as a party or which would materially affect the separate
account. The validity of the securities offered by this prospectus has been
passed upon by Counsel to the Company.
In recent years, several life insurance and annuity companies have been named
as defendants in lawsuits, including class action lawsuits, relating to life
insurance and annuity pricing and sales practices. The Company is a defendant
in two class actions:
A purported class action complaint was filed in the Circuit Court of Lauderdale
County, Alabama on March 28, 2000, by Loretta Shaner against the Company (the
"Shaner Complaint"). The case has been removed to the United States District
Court for the Northern District of Alabama. The Shaner Complaint sought
unspecified compensatory damages from the Company and unnamed affiliates of the
Company, alleging that the Company's sale of deferred annuity products for use
as investments in tax-deferred contributory retirement plans (e.g., IRAs) is
improper. On August 31, 2000, the Court granted the Company's motion to dismiss
the case. If plaintiff elects to appeal, the appeal must be noticed on or
before September 30, 2000.
X.56297.00 September 2000
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A purported class action complaint was filed in the United States District
Court for the Middle District of Florida on June 30, 2000, by Helen Reese,
Richard Reese, Villere Bergeron, and Allan Eckert against the Company (the
"Reese Complaint"). The Reese Complaint seeks compensatory and punitive
damages, and injunctive relief from the Company. The Reese Complaint claims
that the Company engaged in unlawful sales practices in marketing life
insurance policies. This litigation is in the preliminary stages. The Company
intends to defend the action vigorously.
The Company also is a party to other litigation and arbitration proceedings in
the ordinary course of its business, none of which is expected to have a
material adverse effect on the Company.
X.56297.00 September 2000
