[AETNA LOGO] 151 Farmington Avenue Josepha M. Summa
Hartford, CT 06156 Contract & Prospectus Unit
Group Products
TS41
(860) 273-6715
(860) 273-3004 fax
December 30, 1996
Securities and Exchange Commission
Division of Investment Management
Office of Insurance Products
450 Fifth Street, N. W.
Washington, DC 20549
RE: Aetna Life Insurance and Annuity Company
File No: 33-75982
Ladies and Gentlemen:
Accompanying this letter for filing pursuant to Rule 497(e) under the Securities
Act of 1933, is a sticker to the Prospectus dated May 1, 1996 for the above
referenced Registrant.
If you have any questions or comments, please feel free to contact the
undersigned.
Sincerely,
/S/ Josepha M. Summa
Josepha M. Summa
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Variable Annuity Account B/Variable Annuity Account C
Aetna Life Insurance and Annuity Company
Supplement dated January 1, 1997, to Prospectus dated May 1, 1996
This information supplements your current Prospectus and should be read and
retained with that Prospectus.
The Small Business Job Protection Act of 1996 (the "Act"), signed into law on
August 20, 1996, has several effects on the Contracts described by this
Prospectus; these are summarized below.
[bullet] Repeal of Death Benefit Exclusion
While payments received by your beneficiaries after your death are
generally taxed in the same manner as if you had received those payments, a
limited death benefit exclusion may have applied for payments due to deaths
occurring on or before August 20, 1996. This exclusion no longer applies to
payments due to deaths occurring after August 20, 1996.
[bullet] Minimum Distribution Requirements
Prior to August 20, 1996, the Internal Revenue Code required distributions
to be made from certain plans by April 1 of the calendar year following the
calendar year in which you attain age 70 1/2. As of January 1, 1997,
distributions for qualified plan participants, other than five-percent
owners, and for all Section 457 plans, must begin by April 1 of the
calendar year following the year in which you attain age 70 1/2 or retire,
whichever occurs later.
[bullet] Section 457 Plan Trust Requirements
Under the Act, Section 457 Plans sponsored by state or local governments
will be required to hold all assets and income in trust (or a custodial
account or an annuity contract) for the exclusive benefit of participants
and their beneficiaries. Section 457 Plans that were in existence on August
20, 1996 are allowed until January 1, 1999 to meet this requirement. Until
such time as a state or local government-sponsored Section 457 Plan meets
the Act's trust requirement, all amounts of compensation deferred under the
plan, all property and rights purchased with such amounts, and all income
attributable to such amounts, property or rights remain solely the property
and rights of the employer (without being restricted to the provision of
benefits under the plan) subject only to the claims of the employer's
general creditors.
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[bullet] Revocability of Options
Formerly, Section 457 Plan participant pay out elections were required to
be irrevocable. The Act permits a second election by participants to defer
the commencement of pay out distributions. This second election must be
mailed prior to the time that distributions have commenced.
[bullet] Limits on Purchase Payments Excludable from Income
Effective January 1, 1997, the maximum limit on annual Purchase Payments
which may be excluded from your gross income under a Section 457 Plan is
generally the lesser of $7,500, as adjusted to reflect the cost of living,
or 33 1/3% of your includible compensation (25% of gross compensation).
