As filed with the Securities and Exchange Registration No. 33-75988*
Commission on April 17, 2000 Registration No. 811-2513
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
- --------------------------------------------------------------------------------
POST-EFFECTIVE AMENDMENT NO. 21 TO
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
and Amendment to
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
- --------------------------------------------------------------------------------
Variable Annuity Account C of Aetna Life Insurance and Annuity Company
Aetna Life Insurance and Annuity Company
151 Farmington Avenue, TS31, Hartford, Connecticut 06156
Depositor's Telephone Number, including Area Code: (860) 273-4686
Julie E. Rockmore, Counsel
Aetna Life Insurance and Annuity Company
151 Farmington Avenue, TS31, Hartford, Connecticut 06156
(Name and Address of Agent for Service)
- --------------------------------------------------------------------------------
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b) of Rule 485
------
X on May 1, 2000 pursuant to paragraph (b) of Rule 485
------
*Pursuant to Rule 429(a) under the Securities Act of 1933, Registrant has
included a combined prospectus under this Registration Statement which includes
all the information which would currently be required in a prospectus relating
to the securities covered by the following earlier Registration Statements:
33-75972; 33-76024; and 33-89858.
<PAGE>
VARIABLE ANNUITY ACCOUNT C
CROSS REFERENCE SHEET
FORM N-4 LOCATION - PROSPECTUS DATED
ITEM NO. PART A (PROSPECTUS) MAY 1, 2000
1 Cover Page.......................... Cover Page
2 Definitions......................... Not Applicable
3 Synopsis............................ Contract Overview; Fee Table
4 Condensed Financial Information..... Condensed Financial Information;
Appendix V - Condensed Financial
Information
5 General Description of Registrant,
Depositor, and Portfolio
Companies........................... Other Topics - The Company;
Variable Annuity Account C;
Appendix IV - Description of
Underlying Funds
6 Deductions and Expenses............. Fee Table; Fees
7 General Description of Variable
Annuity Contracts................... Contract Overview; Other Topics
8 Annuity Period...................... The Income Phase
9 Death Benefit....................... Death Benefit
10 Purchases and Contract Value Purchase; Your Account Value
11 Redemptions......................... Right to Cancel
12 Taxes............................... Taxation
13 Legal Proceedings................... Other Topics - Legal Matters and
Proceedings
14 Table of Contents of the Statement
of Additional Information........... Contents of the Statement of
Additional Information
<PAGE>
LOCATION - STATEMENT OF
FORM N-4 PART B (STATEMENT OF ADDITIONAL ADDITIONAL INFORMATION
ITEM NO. INFORMATION DATED MAY 1, 2000
15 Cover Page.......................... Cover page
16 Table of Contents................... Table of Contents
17 General Information and History..... General Information and
History
18 Services............................ General Information and
History; Independent
Auditors
19 Purchase of Securities Being Offered Offering and Purchase of
Contracts
20 Underwriters........................ Offering and Purchase of
Contracts
21 Calculation of Performance Data..... Performance Data; Average
Annual Total Return
Quotations
22 Annuity Payments.................... Income Phase Payments
23 Financial Statements................ Financial Statements
Part C (Other Information)
Information required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C to this Registration Statement.
<PAGE>
VARIABLE ANNUITY ACCOUNT C
Aetna Life Insurance and Annuity Company
Supplement dated May 1, 2000 to the Prospectus dated May 1, 2000
GENERAL DESCRIPTION OF GET I
Series I of the Aetna GET Fund (GET I) is an investment option that may be
available during the accumulation phase of the contract. Aetna Life Insurance
and Annuity Company (the Company or we) makes a guarantee, as described below,
when you direct money into GET I. Aeltus Investment Management, Inc. serves as
the investment adviser to GET I.
We will offer GET I shares only during its offering period, which is scheduled
to run from March 15, 2000 through the close of business on June 14, 2000. GET
I may not be available under your contract, your plan or in your state. Please
read the GET I prospectus for a more complete description of GET I, including
its charges and expenses.
INVESTMENT OBJECTIVE OF GET I
GET I seeks to achieve maximum total return without compromising a minimum
targeted return by participating in favorable equity market performance during
the guarantee period.
GET I's guarantee period runs from June 15, 2000 through June 14, 2005. During
the offering period, all GET I assets will be invested in short-term
instruments, and during the guarantee period will be invested in a combination
of fixed income and equity securities.
THE GET FUND GUARANTEE
The guarantee period for GET I will end on June 14, 2005, which is GET I's
maturity date. The Company guarantees that the value of an accumulation unit of
the GET I subaccount under the contract on the maturity date (as valued after
the close of business on June 14, 2005), will not be less than its value as
determined after the close of business on the last day of the offering period.
If the value on the maturity date is lower than it was on the last day of the
offering period, we will transfer funds from our general account to the GET I
subaccount to make up the difference. This means that if you remain invested in
GET I until the maturity date, at the maturity date you will receive no less
than the value of your separate account investment directed to GET I as of the
last day of the offering period, less any maintenance fees or any amounts you
transfer or withdraw from the GET I subaccount. The value of dividends and
distributions made by GET I throughout the guarantee period is taken into
account in determining whether, for purposes of the guarantee, the value of
your GET I investment on the maturity date is no less than its value as of the
last day of the offering period. The guarantee does not promise that you will
earn the fund's minimum targeted return referred to in the investment
objective.
If you withdraw or transfer funds from GET I before the maturity date, we will
process the transactions at the actual unit value next determined after we
receive your order. The guarantee will not apply to these amounts or to amounts
deducted as a maintenance fee, if applicable.
MATURITY DATE
Before the maturity date, we will send a notice to each contract holder who has
amounts in GET I. This notice will remind you that the maturity date is
approaching and that you must choose other investment options for your GET I
amounts. If you do not make a choice, on the maturity date we will transfer
your GET I amounts to another available series of the GET Fund that is
accepting deposits. If no GET Fund series is available, we will transfer your
GET I amounts to the fund or funds designated by the Company.
X.GETI75988-A May 2000
<PAGE>
The following information supplements the "Fee Table" section contained in the
prospectus:
MAXIMUM FEES DEDUCTED FROM THE SUBACCOUNTS
In addition to the amounts currently listed under the heading "Fee
Table--Maximum Fees Deducted from the Subaccounts" in the prospectus, we will
make a daily deduction of a GET I guarantee charge, equal on an annual basis to
the percentage shown below, from the amounts allocated to the GET I investment
option:
<TABLE>
<S> <C>
GET I Guarantee Charge (deducted daily during the guarantee period) ..... 0.50%
Maximum Total Separate Account Expenses ................................. 2.00%(1)
</TABLE>
(1) The total separate account expenses that apply to your contract may be
lower. Please refer to the "Fee Table" section of your prospectus.
FEES DEDUCTED BY THE FUNDS
The following information supplements the "Fund Expense Table" contained in the
prospectus:
Aetna GET Fund Series I Annual Expenses
(As a percentage of the average net assets)
<TABLE>
<CAPTION>
Investment Total Fund Annual Expenses
Advisory Fees(2) Other Expenses(3) (after expense reimbursement)(4)
---------------- ----------------- -------------------------------
<S> <C> <C> <C>
Aetna GET Fund Series I 0.60% 0.15% 0.75%
</TABLE>
For more information regarding expenses paid out of assets of the fund, see the
GET I prospectus.
- -----------------------
(2) The Investment Advisory Fee will be 0.25% during the offering period and
0.60% during the guarantee period.
(3) "Other Expenses" include an annual fund administrative fee of 0.075% of the
average daily net assets of GET I and any additional direct fund expenses.
(4) The investment adviser is contractually obligated through GET I's maturity
date to waive all or a portion of its investment advisory fee and/or its
administrative fee and/or to reimburse a portion of GET I's other expenses
in order to ensure that GET I's Total Fund Annual Expenses do not exceed
0.75% of the fund's average daily net assets. It is not expected that GET
I's actual expenses without this waiver or reimbursement will exceed this
amount.
<PAGE>
The following information supplements the "Hypothetical Examples" contained in
the prospectus:
HYPOTHETICAL EXAMPLES--AETNA GET FUND SERIES I
Account Fees Incurred Over Time. The following hypothetical examples show the
fees and expenses paid over time if you invest $1,000 in the GET I investment
option under the contract (until GET I's maturity date), assuming a 5% annual
return on the investment.(5)
<TABLE>
<CAPTION>
- -----------------------------
> THESE EXAMPLES ARE PURELY Example A Example B
HYPOTHETICAL. If you withdraw your entire If you withdraw your entire
> THEY SHOULD NOT BE account value at the end of account value at the end of
CONSIDERED A REPRESENTATION the periods shown, you would the periods shown, you would
OF PAST OR FUTURE EXPENSES pay the following expenses, pay the following expenses,
OR EXPECTED RETURNS. including any charge assessed including any charge assessed
> ACTUAL EXPENSES AND/OR under early withdrawal charge under early withdrawal charge
RETURNS MAY BE MORE OR LESS Schedule A: Schedule B:
THAN THOSE SHOWN BELOW.
- -----------------------------
1 Year 3 Years 5 Years 1 Year 3 Years 5 Years
-------- --------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Aetna GET Fund Series I $29 $88 $149 $80 $141 $194
</TABLE>
<TABLE>
<CAPTION>
Example C Example D
If you withdraw your entire If you leave your entire account
account value at the end of value invested or if you select
the periods shown, you would an income phase payment option
pay the following expenses, at the end of the periods
including any charge assessed shown, you would pay the
under early withdrawal charge following expenses, (no early
Schedule C: withdrawal charge is assessed):
1 Year 3 Years 5 Years 1 Year 3 Years 5 Years
-------- --------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Aetna GET Fund Series I $90 $130 $172 $29 $88 $149
</TABLE>
- -----------------------
(5) The examples assume that a maximum mortality and expense risk charge of
1.25% on an annual basis, a maximum administrative expense charge of 0.25%
on an annual basis, a GET I guarantee charge of 0.50% on an annual basis,
an annual maintenance fee of $25 converted to a percentage of assets equal
to 0.078% and all charges and expenses of the GET I Fund are assessed. Each
example reflects early withdrawal charges under the applicable early
withdrawal charge schedule, as noted above. (The expenses that you would
pay under your contract may be lower. Please refer to the "Fee Table"
section of your prospectus.)
<PAGE>
The following information supplements "Appendix IV--Description of Underlying
Funds" contained in the prospectus:
AETNA GET FUND (SERIES I)
INVESTMENT OBJECTIVE
Seeks to achieve maximum total return without compromising a minimum targeted
return (Targeted Return) by participating in favorable equity market
performance during the guarantee period, from June 15, 2000, through June 14,
2005, the maturity date.
POLICIES
Prior to June 15, 2000, assets are invested entirely in short-term instruments.
After that date, assets are allocated between equities and fixed income
securities. Equities consist primarily of common stocks. Fixed income
securities consist primarily of short- to intermediate-duration U.S. Government
securities and may also consist of mortgage backed securities and corporate
obligations. The investment adviser uses a proprietary computer model to
determine the percentage of assets to allocate between the fixed and the equity
components. As the value of the equity component declines, more assets are
allocated to the fixed component.
RISKS
The principal risks of investing in Series I are those generally attributable
to stock and bond investing. The success of Series I's strategy depends on the
investment adviser's skill in allocating assets between the equity and fixed
components and in selecting investments within each component. Because Series I
invests in both stocks and bonds, it may underperform stock funds when stocks
are in favor and underperform bond funds when bonds are in favor. The risks
associated with investing in stocks include sudden and unpredictable drops in
the value of the market as a whole and periods of lackluster or negative
performance. The principal risk associated with investing in bonds is that
interest rates may rise, which generally causes bond prices to fall. If at the
inception of, or any time during, the guarantee period interest rates are low,
Series I assets may be largely invested in the fixed component in order to
increase the likelihood of achieving the Targeted Return at the maturity date.
The effect of low interest rates on Series I would likely be more pronounced at
the beginning of the guarantee period as the initial allocation of assets would
include more fixed income securities. In addition, if during the guarantee
period the equity markets experienced a major decline, Series I assets may
become largely invested in the fixed component in order to increase the
likelihood of achieving the Targeted Return at the maturity date. Use of the
fixed component reduces Series I's ability to participate as fully in upward
equity market movements, and therefore represents some loss of opportunity, or
opportunity cost, compared to a portfolio that is fully invested in equities.
Investment Adviser: Aeltus Investment Management, Inc.
X.GETI75988-A May 2000
<PAGE>
VARIABLE ANNUITY ACCOUNT C
Aetna Life Insurance and Annuity Company
Supplement dated May 1, 2000 to the Prospectus dated May 1, 2000
GENERAL DESCRIPTION OF GET J
Series J of the Aetna GET Fund (GET J) is an investment option that may be
available during the accumulation phase of the contract. Aetna Life Insurance
and Annuity Company (the Company or we) makes a guarantee, as described below,
when you direct money into GET J. Aeltus Investment Management, Inc. serves as
the investment adviser to GET J.
We will offer GET J shares only during its offering period, which is scheduled
to run from June 15, 2000 through the close of business on September 13, 2000.
GET J may not be available under your contract, your plan or in your state.
Please read the GET J prospectus for a more complete description of GET J,
including its charges and expenses.
INVESTMENT OBJECTIVE OF GET J
GET J seeks to achieve maximum total return without compromising a minimum
targeted return by participating in favorable equity market performance during
the guarantee period.
GET J's guarantee period runs from September 14, 2000 through September 13,
2005. During the offering period, all GET J assets will be invested in
short-term instruments, and during the guarantee period will be invested in a
combination of fixed income and equity securities.
THE GET FUND GUARANTEE
The guarantee period for GET J will end on September 13, 2005, which is GET J's
maturity date. The Company guarantees that the value of an accumulation unit of
the GET J subaccount under the contract on the maturity date (as valued after
the close of business on September 13, 2005), will not be less than its value
as determined after the close of business on the last day of the offering
period. If the value on the maturity date is lower than it was on the last day
of the offering period, we will transfer funds from our general account to the
GET J subaccount to make up the difference. This means that if you remain
invested in GET J until the maturity date, at the maturity date you will
receive no less than the value of your separate account investment directed to
GET J as of the last day of the offering period, less any maintenance fees or
any amounts you transfer or withdraw from the GET J subaccount. The value of
dividends and distributions made by GET J throughout the guarantee period is
taken into account in determining whether, for purposes of the guarantee, the
value of your GET J investment on the maturity date is no less than its value
as of the last day of the offering period. The guarantee does not promise that
you will earn the fund's minimum targeted return referred to in the investment
objective.
If you withdraw or transfer funds from GET J before the maturity date, we will
process the transactions at the actual unit value next determined after we
receive your order. The guarantee will not apply to these amounts or to amounts
deducted as a maintenance fee, if applicable.
MATURITY DATE
Before the maturity date, we will send a notice to each contract holder who has
amounts in GET J. This notice will remind you that the maturity date is
approaching and that you must choose other investment options for your GET J
amounts. If you do not make a choice, on the maturity date we will transfer
your GET J amounts to another available series of the GET Fund that is
accepting deposits. If no GET Fund series is available, we will transfer your
GET J amounts to the fund or funds designated by the Company.
X.GETJ75988-0 May 2000
<PAGE>
The following information supplements the "Fee Table" section contained in the
prospectus:
MAXIMUM FEES DEDUCTED FROM THE SUBACCOUNTS
In addition to the amounts currently listed under the heading "Fee
Table--Maximum Fees Deducted from the Subaccounts" in the prospectus, we will
make a daily deduction of a GET J guarantee charge, equal on an annual basis to
the percentage shown below, from the amounts allocated to the GET J investment
option:
<TABLE>
<S> <C>
GET J Guarantee Charge (deducted daily during the guarantee period) ..... 0.50%
Maximum Total Separate Account Expenses ................................. 2.00%(1)
</TABLE>
(1) The total separate account expenses that apply to your contract may be
lower. Please refer to the "Fee Table" section of your prospectus.
FEES DEDUCTED BY THE FUNDS
The following information supplements the "Fund Expense Table" contained in the
prospectus:
Aetna GET Fund Series J Annual Expenses
(As a percentage of the average net assets)
<TABLE>
<CAPTION>
Investment Total Fund Annual Expenses
Advisory Fees(2) Other Expenses(3) (after expense reimbursement)(4)
---------------- ----------------- --------------------------------
<S> <C> <C> <C>
Aetna GET Fund Series J 0.60% 0.15% 0.75%
</TABLE>
For more information regarding expenses paid out of assets of the fund, see the
GET J prospectus.
- -----------------------
(2) The Investment Advisory Fee will be 0.25% during the offering period and
0.60% during the guarantee period.
(3) "Other Expenses" include an annual fund administrative fee of 0.075% of the
average daily net assets of GET J and any additional direct fund expenses.
(4) The investment adviser is contractually obligated through GET J's maturity
date to waive all or a portion of its investment advisory fee and/or its
administrative fee and/or to reimburse a portion of GET J's other expenses
in order to ensure that GET J's Total Fund Annual Expenses do not exceed
0.75% of the fund's average daily net assets. It is not expected that GET
J's actual expenses without this waiver or reimbursement will exceed this
amount.
<PAGE>
The following information supplements the "Hypothetical Examples" contained in
the prospectus:
HYPOTHETICAL EXAMPLES--AETNA GET FUND SERIES J
Account Fees Incurred Over Time. The following hypothetical examples show the
fees and expenses paid over time if you invest $1,000 in the GET J investment
option under the contract (until GET J's maturity date), assuming a 5% annual
return on the investment.(5)
<TABLE>
<CAPTION>
- ------------------------------
> THESE EXAMPLES ARE PURELY Example A Example B
HYPOTHETICAL. If you withdraw your entire If you withdraw your entire
> THEY SHOULD NOT BE account value at the end of account value at the end of
CONSIDERED A REPRESENTATION the periods shown, you would the periods shown, you would
OF PAST OR FUTURE EXPENSES pay the following expenses, pay the following expenses,
OR EXPECTED RETURNS. including any charge assessed including any charge assessed
> ACTUAL EXPENSES AND/OR under early withdrawal charge under early withdrawal charge
RETURNS MAY BE MORE OR LESS Schedule A: Schedule B:
THAN THOSE SHOWN BELOW.
- -----------------------------
1 Year 3 Years 5 Years 1 Year 3 Years 5 Years
-------- --------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Aetna GET Fund Series J $29 $88 $149 $80 $141 $194
</TABLE>
<TABLE>
<CAPTION>
Example C Example D
If you withdraw your entire If you leave your entire account
account value at the end of value invested or if you select an
the periods shown, you would income phase payment option
pay the following expenses, at the end of the periods
including any charge assessed shown, you would pay the
under early withdrawal charge following expenses, (no early
Schedule C: withdrawal charge is assessed):
1 Year 3 Years 5 Years 1 Year 3 Years 5 Years
-------- --------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Aetna GET Fund Series J $90 $130 $172 $29 $88 $149
</TABLE>
- -----------------------
(5) The examples assume that a maximum mortality and expense risk charge of
1.25% on an annual basis, a maximum administrative expense charge of 0.25%
on an annual basis, a GET J guarantee charge of 0.50% on an annual basis,
an annual maintenance fee of $25 converted to a percentage of assets equal
to 0.078% and all charges and expenses of the GET J Fund are assessed. Each
example reflects early withdrawal charges under the applicable early
withdrawal charge schedule, as noted above. (The expenses that you would
pay under your contract may be lower. Please refer to the "Fee Table"
section of your prospectus.)
<PAGE>
The following information supplements "Appendix IV--Description of Underlying
Funds" contained in the prospectus:
AETNA GET FUND (SERIES J)
INVESTMENT OBJECTIVE
Seeks to achieve maximum total return without compromising a minimum targeted
return (Targeted Return) by participating in favorable equity market
performance during the guarantee period, from September 14, 2000, through
September 13, 2005, the maturity date.
POLICIES
Prior to September 14, 2000, assets are invested entirely in short-term
instruments. After that date, assets are allocated between equities and fixed
income securities. Equities consist primarily of common stocks. Fixed income
securities consist primarily of short- to intermediate-duration U.S. Government
securities and may also consist of mortgage backed securities and corporate
obligations. The investment adviser uses a proprietary computer model to
determine the percentage of assets to allocate between the fixed and the equity
components. As the value of the equity component declines, more assets are
allocated to the fixed component.
RISKS
The principal risks of investing in Series J are those generally attributable
to stock and bond investing. The success of Series J's strategy depends on the
investment adviser's skill in allocating assets between the equity and fixed
components and in selecting investments within each component. Because Series J
invests in both stocks and bonds, it may underperform stock funds when stocks
are in favor and underperform bond funds when bonds are in favor. The risks
associated with investing in stocks include sudden and unpredictable drops in
the value of the market as a whole and periods of lackluster or negative
performance. The principal risk associated with investing in bonds is that
interest rates may rise, which generally causes bond prices to fall. If at the
inception of, or any time during, the guarantee period interest rates are low,
Series J assets may be largely invested in the fixed component in order to
increase the likelihood of achieving the Targeted Return at the maturity date.
The effect of low interest rates on Series J would likely be more pronounced at
the beginning of the guarantee period as the initial allocation of assets would
include more fixed income securities. In addition, if during the guarantee
period the equity markets experienced a major decline, Series J assets may
become largely invested in the fixed component in order to increase the
likelihood of achieving the Targeted Return at the maturity date. Use of the
fixed component reduces Series J's ability to participate as fully in upward
equity market movements, and therefore represents some loss of opportunity, or
opportunity cost, compared to a portfolio that is fully invested in equities.
Investment Adviser: Aeltus Investment Management, Inc.
X.GETJ75988-0 May 2000
<PAGE>
VARIABLE ANNUITY ACCOUNT C
Aetna Life Insurance and Annuity Company
Supplement dated May 1, 2000 to the Prospectus dated May 1, 2000
GENERAL DESCRIPTION OF GET K
Series K of the Aetna GET Fund (GET K) is an investment option that may be
available during the accumulation phase of the contract. Aetna Life Insurance
and Annuity Company (the Company or we) makes a guarantee, as described below,
when you direct money into GET K. Aeltus Investment Management, Inc. serves as
the investment adviser to GET K.
We will offer GET K shares only during its offering period, which is scheduled
to run from September 14, 2000 through the close of business on December 13,
2000. GET K may not be available under your contract, your plan or in your
state. Please read the GET K prospectus for a more complete description of GET
K, including its charges and expenses.
INVESTMENT OBJECTIVE OF GET K
GET K seeks to achieve maximum total return without compromising a minimum
targeted return by participating in favorable equity market performance during
the guarantee period.
GET K's guarantee period runs from December 14, 2000 through December 13, 2005.
During the offering period, all GET K assets will be invested in short-term
instruments, and during the guarantee period will be invested in a combination
of fixed income and equity securities.
THE GET FUND GUARANTEE
The guarantee period for GET K will end on December 13, 2005, which is GET K's
maturity date. The Company guarantees that the value of an accumulation unit of
the GET K subaccount under the contract on the maturity date (as valued after
the close of business on December 13, 2005), will not be less than its value as
determined after the close of business on the last day of the offering period.
If the value on the maturity date is lower than it was on the last day of the
offering period, we will transfer funds from our general account to the GET K
subaccount to make up the difference. This means that if you remain invested in
GET K until the maturity date, at the maturity date you will receive no less
than the value of your separate account investment directed to GET K as of the
last day of the offering period, less any maintenance fees or any amounts you
transfer or withdraw from the GET K subaccount. The value of dividends and
distributions made by GET K throughout the guarantee period is taken into
account in determining whether, for purposes of the guarantee, the value of
your GET K investment on the maturity date is no less than its value as of the
last day of the offering period. The guarantee does not promise that you will
earn the fund's minimum targeted return referred to in the investment
objective.
If you withdraw or transfer funds from GET K before the maturity date, we will
process the transactions at the actual unit value next determined after we
receive your order. The guarantee will not apply to these amounts or to amounts
deducted as a maintenance fee, if applicable.
MATURITY DATE
Before the maturity date, we will send a notice to each contract holder who has
amounts in GET K. This notice will remind you that the maturity date is
approaching and that you must choose other investment options for your GET K
amounts. If you do not make a choice, on the maturity date we will transfer
your GET K amounts to another available series of the GET Fund that is
accepting deposits. If no GET Fund series is available, we will transfer your
GET K amounts to the fund or funds designated by the Company.
X.GETK75988-0 May 2000
<PAGE>
The following information supplements the "Fee Table" section contained in the
prospectus:
MAXIMUM FEES DEDUCTED FROM THE SUBACCOUNTS
In addition to the amounts currently listed under the heading "Fee
Table--Maximum Fees Deducted from the Subaccounts" in the prospectus, we will
make a daily deduction of a GET K guarantee charge, equal on an annual basis to
the percentage shown below, from the amounts allocated to the GET K investment
option:
<TABLE>
<S> <C>
GET K Guarantee Charge (deducted daily during the guarantee period) ..... 0.50%
Maximum Total Separate Account Expenses ................................. 2.00%(1)
</TABLE>
(1) The total separate account expenses that apply to your contract may be
lower. Please refer to the "Fee Table" section of your prospectus.
FEES DEDUCTED BY THE FUNDS
The following information supplements the "Fund Expense Table" contained in the
prospectus:
Aetna GET Fund Series K Annual Expenses
(As a percentage of the average net assets)
<TABLE>
<CAPTION>
Investment Total Fund Annual Expenses
Advisory Fees(2) Other Expenses(3) (after expense reimbursement)(4)
---------------- ----------------- -------------------------------
<S> <C> <C> <C>
Aetna GET Fund Series K 0.60% 0.15% 0.75%
</TABLE>
For more information regarding expenses paid out of assets of the fund, see the
GET K prospectus.
- -----------------------
(2) The Investment Advisory Fee will be 0.25% during the offering period and
0.60% during the guarantee period.
(3) "Other Expenses" include an annual fund administrative fee of 0.075% of the
average daily net assets of GET K and any additional direct fund expenses.
(4) The investment adviser is contractually obligated through GET K's maturity
date to waive all or a portion of its investment advisory fee and/or its
administrative fee and/or to reimburse a portion of GET K's other expenses
in order to ensure that GET K's Total Fund Annual Expenses do not exceed
0.75% of the fund's average daily net assets. It is not expected that GET
K's actual expenses without this waiver or reimbursement will exceed this
amount.
<PAGE>
The following information supplements the "Hypothetical Examples" contained in
the prospectus:
HYPOTHETICAL EXAMPLES--AETNA GET FUND SERIES K
Account Fees Incurred Over Time. The following hypothetical examples show the
fees and expenses paid over time if you invest $1,000 in the GET K investment
option under the contract (until GET K's maturity date), assuming a 5% annual
return on the investment.5
<TABLE>
<CAPTION>
- ------------------------------- Example A Example B
> THESE EXAMPLES ARE PURELY If you withdraw your entire If you withdraw your entire
HYPOTHETICAL. account value at the end of account value at the end of
> THEY SHOULD NOT BE the periods shown, you would the periods shown, you would
CONSIDERED A REPRESENTATION pay the following expenses, pay the following expenses,
OF PAST OR FUTURE EXPENSES including any charge assessed including any charge assessed
OR EXPECTED RETURNS. under early withdrawal charge under early withdrawal charge
> ACTUAL EXPENSES AND/OR Schedule A: Schedule B:
RETURNS MAY BE MORE OR LESS
THAN THOSE SHOWN BELOW.
- ------------------------------- 1 Year 3 Years 5 Years 1 Year 3 Years 5 Years
-------- --------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Aetna GET Fund Series K $29 $88 $149 $80 $141 $194
</TABLE>
<TABLE>
<CAPTION>
Example C Example D
If you withdraw your entire If you leave your entire account
account value at the end of value invested or if you select an
the periods shown, you would income phase payment option
pay the following expenses, at the end of the periods
including any charge assessed shown, you would pay the
under early withdrawal charge following expenses, (no early
Schedule C: withdrawal charge is assessed):
1 Year 3 Years 5 Years 1 Year 3 Years 5 Years
-------- --------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Aetna GET Fund Series K $90 $130 $172 $29 $88 $149
</TABLE>
- -----------------------
(5) The examples assume that a maximum mortality and expense risk charge of
1.25% on an annual basis, a maximum administrative expense charge of 0.25%
on an annual basis, a GET K guarantee charge of 0.50% on an annual basis,
an annual maintenance fee of $25 converted to a percentage of assets equal
to 0.078% and all charges and expenses of the GET K Fund are assessed. Each
example reflects early withdrawal charges under the applicable early
withdrawal charge schedule, as noted above. (The expenses that you would
pay under your contract may be lower. Please refer to the "Fee Table"
section of your prospectus.)
<PAGE>
The following information supplements "Appendix IV--Description of Underlying
Funds" contained in the prospectus:
AETNA GET FUND (SERIES K)
INVESTMENT OBJECTIVE
Seeks to achieve maximum total return without compromising a minimum targeted
return (Targeted Return) by participating in favorable equity market
performance during the guarantee period, from December 14, 2000, through
December 13, 2005, the maturity date.
POLICIES
Prior to December 14, 2000, assets are invested entirely in short-term
instruments. After that date, assets are allocated between equities and fixed
income securities. Equities consist primarily of common stocks. Fixed income
securities consist primarily of short- to intermediate-duration U.S. Government
securities and may also consist of mortgage backed securities and corporate
obligations. The investment adviser uses a proprietary computer model to
determine the percentage of assets to allocate between the fixed and the equity
components. As the value of the equity component declines, more assets are
allocated to the fixed component.
RISKS
The principal risks of investing in Series K are those generally attributable
to stock and bond investing. The success of Series K's strategy depends on the
investment adviser's skill in allocating assets between the equity and fixed
components and in selecting investments within each component. Because Series K
invests in both stocks and bonds, it may underperform stock funds when stocks
are in favor and underperform bond funds when bonds are in favor. The risks
associated with investing in stocks include sudden and unpredictable drops in
the value of the market as a whole and periods of lackluster or negative
performance. The principal risk associated with investing in bonds is that
interest rates may rise, which generally causes bond prices to fall. If at the
inception of, or any time during, the guarantee period interest rates are low,
Series K assets may be largely invested in the fixed component in order to
increase the likelihood of achieving the Targeted Return at the maturity date.
The effect of low interest rates on Series K would likely be more pronounced at
the beginning of the guarantee period as the initial allocation of assets would
include more fixed income securities. In addition, if during the guarantee
period the equity markets experienced a major decline, Series K assets may
become largely invested in the fixed component in order to increase the
likelihood of achieving the Targeted Return at the maturity date. Use of the
fixed component reduces Series K's ability to participate as fully in upward
equity market movements, and therefore represents some loss of opportunity, or
opportunity cost, compared to a portfolio that is fully invested in equities.
Investment Adviser: Aeltus Investment Management, Inc.
X.GETK75988-0 May 2000
<PAGE>
Prospectus - May 1, 2000
- --------------------------------------------------------------------------------
The Funds
Aetna Ascent VP
Aetna Balanced VP, Inc.
Aetna Income Shares d/b/a Aetna
Bond VP
Aetna Crossroads VP
Aetna Growth VP
Aetna Variable Fund d/b/a Aetna
Growth and Income VP
Aetna High Yield VP*
Aetna Index Plus Large Cap VP
Aetna Index Plus Mid Cap VP
Aetna Index Plus Small Cap VP
Aetna International VP
Aetna Legacy VP
Aetna Variable Encore Fund d/b/a
Aetna Money Market VP
Aetna Real Estate Securities VP*
Aetna Small Company VP
Aetna Technology VP
Aetna Value Opportunity VP
AIM V.I. Capital Appreciation Fund
AIM V.I. Growth Fund
AIM V.I. Growth and Income Fund
AIM V.I. Value Fund
Calvert Social Balanced Portfolio
Fidelity Variable Insurance Products
Fund (VIP) Equity-Income Portfolio
Fidelity Variable Insurance Products
Fund (VIP) Growth Portfolio
Fidelity Variable Insurance Products
Fund (VIP) Overseas Portfolio
Fidelity Variable Insurance Products
Fund II (VIP II) Contrafund[RegTM]
Portfolio
Janus Aspen Aggressive Growth Portfolio
Janus Aspen Balanced Portfolio
Janus Aspen Flexible Income Portfolio
Janus Aspen Growth Portfolio
Janus Aspen Worldwide Growth Portfolio
Oppenheimer Global Securities Fund/VA
Oppenheimer Strategic Bond Fund/VA
Portfolio Partners, Inc.(PPI) MFS
Capital Opportunities Portfolio (formerly
PPI MFS Value Equity Portfolio)
Portfolio Partners, Inc. (PPI) MFS
Emerging Equities Portfolio
Portfolio Partners, Inc. (PPI) MFS
Research Growth Portfolio
Portfolio Partners, Inc. (PPI) Scudder
International Growth Portfolio
Portfolio Partners, Inc. (PPI) T. Rowe
Price Growth Equity Portfolio
The Contracts. The contracts described in this prospectus are individual
deferred fixed or variable annuity contracts issued by Aetna Life Insurance and
Annuity Company (the Company, we, us, our). They are issued to you, the
contract holder as either a traditional Individual Retirement Annuity (IRA)
under section 408(b) of the Internal Revenue Code of 1986 as amended (Tax Code)
or a Roth IRA under section 408A. Additionally, the traditional IRA may be used
as a funding option for a Simplified Employee Pension (SEP) plan under section
408(k). The contracts are not currently available as a Simple IRA under section
408(p).
Why Reading this Prospectus is Important. This prospectus contains facts
about the contract and its investment options that you should know before
purchasing. This information will help you decide if the contract is right
for you. Please read this prospectus carefully.
Table of Contents . . . page 3
Investment Options. The contract offers variable investment options and fixed
interest options. When we establish your account you instruct us to direct
account dollars to any of the available options.
Variable Investment Options. These options are called subaccounts. The
subaccounts are within Variable Annuity Account C (the separate account), a
separate account of the Company. Each subaccount invests in one of the mutual
funds (funds) listed on this page. Earnings on amounts invested in a subaccount
will vary depending upon the performance of its underlying fund. You do not
invest directly in or hold shares of the funds.
Risks Associated With Investing in the Funds. The funds in which the
subaccounts invest have various risks. Information about the risks of investing
in the funds is located in the "Investment Options" section on page 12,
Appendix IV-- Description of Underlying Funds, and each fund prospectus. Read
this prospectus in conjunction with the fund prospectuses and retain the
prospectuses for future reference.
Getting Additional Information. You may obtain the May 1, 2000 Statement of
Additional Information (SAI) about the separate account by indicating your
request on your application or calling us at 1-800-262-3862. You may also obtain
an SAI for any of the funds by calling that number. The Securities and Exchange
Commission (SEC) also makes available to the public reports and information
about the separate account and the funds. Certain reports and information
including, this prospectus and SAI, are available on the EDGAR Database on the
SEC's website, www.sec.gov, or at the SEC's public reference room in Washington,
DC. You may call 1-202-942-8090 to get information about the operations of the
public reference room. You may obtain copies of reports and other information
about the separate account and the funds, after paying a duplicating fee, by
sending an e-mail request to [email protected] or by writing to the SEC's
Public Reference Section, Washington, DC 20549-0102. The SAI table of contents
is listed on page 39 of this prospectus. The SAI is incorporated into this
prospectus by reference.
Additional Disclosure Information. Neither the SEC nor any state securities
commission has approved or disapproved the securities offered through this
prospectus or passed on the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense. This prospectus is valid
only when accompanied by the Guaranteed Accumulation Account prospectus, if
applicable. We do not intend for this prospectus to be an offer to sell or a
solicitation of an offer to buy these securities in any state that does not
permit their sale. We have not authorized anyone to provide you with
information that is different from that contained in this prospectus.
*Effective May 15, 2000, transfers or deposits are not allowed into the
subaccounts investing in these funds except those made pursuant to standing
instructions (e.g., dollar cost averaging) in effect prior to this date. See
"Important Information Regarding Aetna High Yield VP and Aetna Real Estate
Securities VP Subaccounts."
<PAGE>
Prospectus - May 1, 2000 (continued)
- --------------------------------------------------------------------------------
Fixed Interest Options.
> Guaranteed Interest Account
> Fixed Account
> Guaranteed Accumulation Account (available in New York only)
Except as specifically mentioned, this prospectus describes only the variable
investment options. However, we describe the fixed interest options in
appendices to this prospectus. There is also a separate Guaranteed Accumulation
Account prospectus.
Availability of Options. Some funds or fixed interest options may be
unavailable through your contract or in your state.
Important Information Regarding Aetna High Yield VP and Aetna Real Estate
Securities VP Subaccounts
Subaccounts to be Closed to New Investments.
Effective May 15, 2000, the Aetna High Yield VP and Aetna Real Estate
Securities VP subaccounts will no longer be available for new investments.
After that date we will only accept deposits into the subaccounts investing in
those funds if they are made pursuant to standing instructions (e.g., dollar
cost averaging) in effect before the close of business on May 12, 2000.
Fund Shares to be Substituted with Shares of Aetna Money Market VP.
Plan of Substitution. On or before September 1, 2000, subject to applicable
regulatory approvals and the requisite vote of shareholders of the applicable
fund, all existing balances in Aetna High Yield VP and Aetna Real Estate
Securities VP will be invested in (substituted with) shares of Aetna Money
Market VP. You will not incur any fees or charges as a result of the
substitution. In addition, on and after September 1, 2000, all investment
allocations then being directed to the Aetna High Yield VP and Aetna Real
Estate Securities VP subaccounts will be redirected to the Aetna Money Market
VP subaccount. We do not believe that the substitution will create any tax
liability.
Transfer Rights. At any time prior to the date of substitution, you may transfer
your accumulated values from the subaccount investing in substituted funds into
any other investment options available under the contract and no transfer fees
or other charges will be imposed. From and after the date of substitution, you
may, if you had values transferred from a subaccount as a result of a
substitution, transfer among any of the remaining investment options in
accordance with the terms of the contract and free of any transfer fees and
charges. Any such transfer will not be counted as one of the free transfers
permitted per calendar year, provided that the transfer occurs prior to, or
within 90 days after, the subsitution.
Surrender Rights. If you had shares substituted and elect to make a surrender
under the contract (if permitted by applicable tax law) within 30 days after the
date of the substitution, we will waive any early withdrawal charge on amounts
transferred as a result of the substitution. This offer to waive the early
withdrawal charge will not apply to amounts transferred after April 10, 2000
from the other investment options to the Aetna High Yield VP or Aetna Real
Estate Securities VP subaccounts. If you exercise this surrender right you may
incur income tax liability and a tax penalty. See the "Taxation" section of this
prospectus for a discussion of tax consequences resulting from surrender. You
should seek qualified tax advice before exercising their surrender rights.
These contracts are not deposits with, obligations of, or guaranteed or
endorsed by any bank, nor are they insured by the FDIC. The contracts are
subject to investment risk, including possible loss of the principal amount
invested.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Contract Overview ........................................ 4
Contract Design
1994 Contracts and 1992 Contracts
Contract Facts
Questions: Contacting the Company (sidebar)
Sending Forms and Written Requests in Good Order (sidebar)
Contract Phases: The Accumulation Phase, The Income Phase
</TABLE>
<TABLE>
<S> <C>
Fee Table .................................. 6
Condensed Financial Information ............ 12
Investment Options ......................... 12
Transfers Among Investment Options ......... 13
Purchase ................................... 15
Right to Cancel ............................ 16
Fees ....................................... 17
Your Account Value ......................... 21
Withdrawals ................................ 23
Systematic Distribution Options ............ 25
Death Benefit .............................. 26
The Income Phase ........................... 27
Taxation ................................... 31
Other Topics ............................... 35
</TABLE>
The Company -- Variable Annuity Account C -- Contract Distribution -- Payment
Delay or Suspension -- Performance Reporting -- Voting Rights -- Contract
Modification -- Involuntary Terminations -- Legal Matters and Proceedings
<TABLE>
<S> <C>
Contents of the Statement of Additional Information ......... 39
Appendix I -- Guaranteed Interest Account ................... 40
Appendix II -- Fixed Account ................................ 41
Appendix III -- Guaranteed Accumulation Account ............. 42
Appendix IV -- Description of Underlying Funds .............. 44
Appendix V -- Condensed Financial Information ............... 66
</TABLE>
3
<PAGE>
[sidebar]
Questions: Contacting the Company. To answer your questions, contact your sales
representative or write or call our Home Office at:
Aetna Financial Services
Individual Annuity Services
151 Farmington Avenue
Hartford, CT 06156-1258
1-800-262-3862
Sending Forms and Written Requests in Good Order.
If you are writing to change your beneficiary, request a withdrawal, or for any
other purpose, contact us or your sales representative to learn what
information is required in order for the request to be in "good order." We can
only act upon written requests that are received in good order.
[end sidebar]
Contract Overview
- --------------------------------------------------------------------------------
The following is intended as a summary. Please read each section of this
prospectus for additional information.
- --------------------------------------------------------------------------------
Contract Design
- --------------------------------------------------------------------------------
The contracts described in this prospectus are individual, deferred, fixed or
variable annuity contracts. They are intended to be retirement savings vehicles
that offer a variety of investment options to help meet long-term financial
goals.
- --------------------------------------------------------------------------------
1994 Contracts and 1992 Contracts
- --------------------------------------------------------------------------------
Throughout the prospectus we refer to 1994 contracts and 1992 contracts.
1994 Contracts. We began selling these contracts in 1994 and we are currently
selling these contracts. You have a 1994 contract if your contract form number,
located on the bottom of the first and last page of your contract, begins with
the letters IRA-CDA-IC. In some cases the form number will appear as IRA-CDA-93,
IRA-CDA-97 or IRA-CDA-98.
1992 Contracts. We began selling these contracts in 1992 and stopped sale of
them during 1994. You have a 1992 contract if your contract form number,
located on the bottom of the first and last page of your contract, begins with
the letters IP-CDA-IB.
- --------------------------------------------------------------------------------
Contract Facts
- --------------------------------------------------------------------------------
Free Look/Right to Cancel. You may cancel your contract within ten days (some
states require more than ten days) of receipt. See "Right to Cancel."
Death Benefit. Your beneficiary may receive a financial benefit in the event of
your death prior to the income phase. Any death benefit during the income phase
will depend upon the income phase payment option selected. See "Death Benefit"
and "The Income Phase."
Withdrawals. During the accumulation phase, you may withdraw all or part of
your account value. Certain fees, taxes and early withdrawal penalties may
apply. See "Withdrawals" and "Taxation." Amounts withdrawn from the Guaranteed
Accumulation Account may be subject to a market value adjustment. See Appendix
III.
Systematic Distribution Options. These are made available for you to receive
periodic withdrawals from your account, while retaining the account in the
accumulation phase. See "Systematic Distribution Options."
Fees. Certain fees are deducted from your account value. See "Fee Table" and
"Fees."
Taxation. You will generally not pay taxes on any earnings from the annuity
contract described in this prospectus until they are withdrawn. Tax-qualified
retirement arrangements (e.g., IRAs) also defer payment of taxes on earnings
until they are withdrawn. Because you are considering an annuity for your IRA,
you should know that the annuity contract does not provide any additional tax
deferral of earnings beyond the tax deferral provided by other types of IRAs.
However, annuities do provide other features and benefits which may be valuable
to you. You should discuss your decision with your financial representative.
Taxes will generally be due when you receive a distribution. Tax penalties may
apply in some circumstances. See "Taxation."
4
<PAGE>
- --------------------------------------------------------------------------------
Contract Phases
- --------------------------------------------------------------------------------
I. The Accumulation Phase (accumulating dollars under your contract)
STEP 1: You provide us with your completed application and initial purchase
payment. We establish an account for you and credit that account with your
initial purchase payment.
------------------
Payments to
Your Account
------------------
Step 1
---------------------------------------------------
Aetna Life Insurance and Annuity Company
---------------------------------------------------
(a) Step 2 (b)
- --------- ---------------------------------------------------
Variable Annuity
Fixed Account C
Interest
Options Variable Investment Options
- ---------
---------------------------------------------------
The Subaccounts
---------------------------------------------------
A B Etc.
---------------------------------------------------
Step 3
----------------------
Mutual Mutual
Fund A Fund B
----------------------
STEP 2: You direct us to
invest your purchase payment in one or more of the following investment
options:
(a) Fixed Interest Options; or
(b) Variable Investment Options (The variable investment options are the
subaccounts of Variable Annuity Account C. Each one invests in a specific
mutual fund.)
STEP 3: Each subaccount you select purchases shares of its
corresponding fund.
II. The Income Phase (receiving income phase payments from your contract) When
you want to begin receiving payments from your contract, you may select from
the options available. The contract offers several income phase payment options
(see "The Income Phase"). In general, you may:
> Receive income phase payments for a specified period of time or for life;
> Receive income phase payments monthly, quarterly, semi-annually or annually;
> Select an income phase option that provide for payments to your beneficiary;
or
> Select income phase payments that are fixed or vary based on the performance
of the variable investment options you select.
5
<PAGE>
Fee Table
- --------------------------------------------------------------------------------
The tables and examples in this section show the fees that may affect your
account value during the accumulation phase. See "The Income Phase" for fees
that may apply after you begin receiving income phase payments under the
contract. The fees shown below do not reflect any premium tax that may apply.
Maximum Transaction Fees
Early Withdrawal Charge. (As a percentage of the amount withdrawn.)1 See "Fees
- -- Early Withdrawal Charge" for a description of which early withdrawal charge
schedule applies to each contract.
<TABLE>
<CAPTION>
Schedule A
- ------------------------------------------
<S> <C>
Contract Years Early Withdrawal Charge
Fewer than 1 1%
1 or more 0%
</TABLE>
<TABLE>
<CAPTION>
Schedule B
- --------------------------------------------------------
<S> <C>
Contract Years Early Withdrawal Charge
Less than 5 5%
5 or more but fewer than 6 4%
6 or more but fewer than 7 3%
7 or more but fewer than 8 2%
8 or more but fewer than 9 1%
9 or more 0%
</TABLE>
<TABLE>
<CAPTION>
Schedule C
- --------------------------------------------------------
<S> <C>
Contract Years Early Withdrawal Charge
Less than 2 6%
2 or more but fewer than 3 5%
3 or more but fewer than 4 4%
4 or more but fewer than 5 3%
5 or more but fewer than 6 2%
6 or more but fewer than 7 1%
7 or more 0%
</TABLE>
Annual Maintenance Fee................................................$25.002
Transfer Charge........................................................$0.003
Maximum Fees Deducted from Investments in the Separate Account
(Daily deductions equal to the following percentages on an annual basis, from
amounts invested in the subaccounts.)
Mortality and Expense Risk Charge......................................1.25%4
Administrative Expense Charge....................................0.00%-0.25%5
------
Total Separate Account Expenses..................................1.25%-1.50%
======
[sidebar]
In this Section:
> Maximum Transaction Fees
> Maximum Fees Deducted from Investments in the Separate Account
> Fees Deducted by the Funds
> Hypothetical Examples
Also see the "Fees" section for:
> How, When and Why Fees are Deducted
> Reduction, Waiver and/or Elimination of Certain Fees
> Premium and Other Taxes
Also see "The Income Phase" section for:
> Fees During the Income Phase
[end sidebar]
6
<PAGE>
1 The total early withdrawal charge deducted will not exceed 8.5% of the total
purchase payments made to a contract. See "Fees -- Early Withdrawal Charge."
2 The annual maintenance fee may be waived if your account value is $10,000 or
greater on the day before the maintenance fee is deducted. Additionally, for
1992 contracts, if the initial purchase payment was $10,000 or greater, the
annual maintenance fee is $0. See "Fees -- Annual Maintenance Fee."
3 During the accumulation phase, we allow you twelve free transfers among
investment options each calendar year. We reserve the right to charge $10 for
each additional transfer. We currently do not impose this charge. See
"Transfers."
4 This illustrates the maximum mortality and expense risk charge that may be
deducted under the contracts. For 1994 contracts, which we currently sell,
this charge may be reduced to 1.15% under certain circumstances. See "Fees --
Mortality and Expense Risk Charge."
5 We currently do not impose this charge, however, if allowed by your contract,
we reserve the right to charge up to 0.25% annually. See "Fees --
Administrative Expense Charge."
7
<PAGE>
Fees Deducted by the Funds
Using this Information. The following table shows the investment advisory fees
and other expenses charged annually by each fund. Fund fees are one factor that
impacts the value of a fund share. To learn about additional factors, refer to
the fund prospectus.
How Fees are Deducted. Fund fees are not deducted from account values. Instead,
they are deducted from the value of the fund shares on a daily basis, which in
turn affects the value of each subaccount that purchases fund shares. Except as
noted below, the following figures are a percentage of the average net assets
of each fund and are based on figures for the year ended December 31, 1999.
Fund Expense Table
<TABLE>
<CAPTION>
Total Fund Net Fund
Annual Annual
Expenses Expenses
Investment Without Total After
Advisory Other Waivers or Waivers and Waivers or
Fund Name Fees(1) Expenses Reductions Reductions Reductions
- ------------------------------------------------ ------------ ---------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C>
Aetna Ascent VP(2) 0.60% 0.14% 0.74% 0.00% 0.74%
Aetna Balanced VP, Inc. 0.50% 0.09% 0.59% -- 0.59%
Aetna Bond VP 0.40% 0.09% 0.49% -- 0.49%
Aetna Crossroads VP(2) 0.60% 0.14% 0.74% 0.04% 0.70%
Aetna Growth VP(2) 0.60% 0.11% 0.71% 0.00% 0.71%
Aetna Growth and Income VP 0.50% 0.08% 0.58% -- 0.58%
Aetna High Yield VP(2) 0.65% 0.48% 1.13% 0.33% 0.80%
Aetna Index Plus Large Cap VP(2) 0.35% 0.10% 0.45% 0.00% 0.45%
Aetna Index Plus Mid Cap VP(2) 0.40% 0.40% 0.80% 0.20% 0.60%
Aetna Index Plus Small Cap VP(2) 0.40% 0.50% 0.90% 0.30% 0.60%
Aetna International VP(2) 0.85% 0.77% 1.62% 0.47% 1.15%
Aetna Legacy VP(2) 0.60% 0.15% 0.75% 0.10% 0.65%
Aetna Money Market VP 0.25% 0.09% 0.34% -- 0.34%
Aetna Real Estate Securities VP(2) 0.75% 0.74% 1.49% 0.54% 0.95%
Aetna Small Company VP(2) 0.75% 0.13% 0.88% 0.00% 0.88%
Aetna Technology VP(2)(3) 0.95% 0.25% 1.20% 0.05% 1.15%
Aetna Value Opportunity VP(2) 0.60% 0.13% 0.73% 0.00% 0.73%
AIM V.I. Capital Appreciation Fund 0.62% 0.11% 0.73% -- 0.73%
AIM V.I. Growth Fund 0.63% 0.10% 0.73% -- 0.73%
AIM V.I. Growth and Income Fund 0.61% 0.16% 0.77% -- 0.77%
AIM V.I. Value Fund 0.61% 0.15% 0.76% -- 0.76%
Calvert Social Balanced Portfolio(4) 0.70% 0.19% 0.89% 0.00% 0.89%
Fidelity VIP Equity-Income Portfolio(5) 0.48% 0.09% 0.57% -- 0.57%
Fidelity VIP Growth Portfolio(5) 0.58% 0.08% 0.66% -- 0.66%
Fidelity VIP Overseas Portfolio(5) 0.73% 0.18% 0.91% -- 0.91%
Fidelity VIP II Contrafund[RegTM] Portfolio(5) 0.58% 0.09% 0.67% -- 0.67%
Janus Aspen Aggressive Growth Portfolio(6) 0.65% 0.02% 0.67% 0.00% 0.67%
Janus Aspen Balanced Portfolio(6) 0.65% 0.02% 0.67% 0.00% 0.67%
Janus Aspen Flexible Income Portfolio(6) 0.65% 0.07% 0.72% 0.00% 0.72%
Janus Aspen Growth Portfolio(6) 0.65% 0.02% 0.67% 0.00% 0.67%
Janus Aspen Worldwide Growth Portfolio(6) 0.65% 0.05% 0.70% 0.00% 0.70%
Oppenheimer Global Securities Fund/VA 0.67% 0.02% 0.69% -- 0.69%
Oppenheimer Strategic Bond Fund/VA 0.74% 0.04% 0.78% -- 0.78%
PPI MFS Capital Opportunities Portfolio(7) 0.65% 0.25% 0.90% 0.00% 0.90%
PPI MFS Emerging Equities Portfolio(7) 0.67% 0.13% 0.80% 0.00% 0.80%
PPI MFS Research Growth Portfolio(7) 0.70% 0.15% 0.85% 0.00% 0.85%
PPI Scudder International Growth Portfolio(7) 0.80% 0.20% 1.00% 0.00% 1.00%
PPI T. Rowe Price Growth Equity Portfolio(7) 0.60% 0.15% 0.75% 0.00% 0.75%
</TABLE>
8
<PAGE>
Footnotes to the "Fund Expense Table"
(1) Certain of the fund advisers reimburse the company for administrative
costs incurred in connection with administering the funds as variable
funding options under the contract. These reimbursements are generally
paid out of the Investment Advisory Fees and are not charged to
investors. For the AIM Funds, the reimbursements may be paid out of fund
assets in an amount up to 0.25% annually. Any such reimbursements paid
from the AIM Funds' assets are included in the "Other Expenses" column.
(2) The investment adviser is contractually obligated through December 31,
2000 to waive all or a portion of its investment advisory fee and/or its
administrative services fee and/or to reimburse a portion of other
expenses in order to ensure that the fund's "Total Fund Annual Expenses
Without Waivers or Reductions" do not exceed the percentage reflected
under "Net Fund Annual Expenses After Waivers or Reductions."
(3) Aetna Technology VP commenced operations on May 1, 2000. Amounts
reflected in "Other Expenses" and "Total Fund Annual Expenses Without
Waivers or Reductions" are estimated amounts for the current fiscal year
based on expenses for comparable funds. Actual expenses may vary from
those shown.
(4) "Other Expenses" reflect an indirect fee of 0.03% relating to an expense
offset arrangement with the portfolio's custodian. The amount shown under
Total Waivers and Reductions does not reflect a voluntary reduction of
fees paid indirectly. If this voluntary reduction of fees paid indirectly
was reflected, the amount shown under Net Fund Annual Expenses After
Waiver or Reductions would be 0.86%.
(5) A portion of the brokerage commissions that certain funds pay was used to
reduce fund expenses. In addition, through arrangements with certain
funds', or the investment adviser on behalf of certain funds' custodian,
credits realized as a result of uninvested cash balances were used to
reduce a portion of each applicable fund's expenses. These credits are
not included under Total Waivers and Reductions. If these credits had
been included, the amounts shown under Net Fund Annual Expenses After
Waivers or Reductions presented in the table would have been 0.56% for
Fidelity VIP Equity-Income Portfolio; 0.65% for Fidelity VIP Growth
Portfolio; 0.87% for Fidelity VIP Overseas Portfolio; and 0.65% for
Fidelity VIP II Contrafund[RegTM] Portfolio.
(6) Expenses are based upon expenses for the fiscal year ended December 31,
1999, restated to reflect a reduction in the management fee for
Aggressive Growth, Balanced, Growth and Worldwide Growth Portfolios. All
expenses are shown without the effect of expense offset arrangements.
(7) The investment adviser has agreed to reimburse the portfolios for
expenses and/or waive its fees, so that, through at least April 30, 2001,
the aggregate of each portfolio's expenses will not exceed the combined
investment advisory fees and other expenses shown under the Net Fund
Annual Expenses After Waivers or Reductions column above.
9
<PAGE>
Hypothetical Examples
Account Fees You May Incur Over Time. The following hypothetical examples show
the fees and expenses paid over time if you invest $1,000 in the contract and
assume a 5% annual return on the investment. For the purpose of these examples,
we deducted total fund annual expenses, the maximum mortality and expense risk
charge of 1.25% annually, the maximum administrative expense charge of 0.25%
annually and an annual maintenance fee of $25 (converted to a percentage of
assets equal to .078%). The total annual fund expenses used are those shown in
the column "Total Fund Annual Expenses Without Waivers or Reductions" in the
Fund Expense Table.
> These examples are purely hypothetical.
> They should not be considered a
representation of past or future fees or
expected returns.
> Actual expenses and/or returns may be
more or less than those shown in these
examples.
<TABLE>
<CAPTION>
EXAMPLE A EXAMPLE B
--------------------------------------- --------------------------------------
If you withdraw your entire account If you withdraw your entire account
value at the end of the periods shown, value at the end of the periods shown,
you would pay the following expenses, you would pay the following expenses,
including any charge assessed under including any charge assessed under
early withdrawal charge Schedule A: early withdrawal charge Schedule B:
1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
-------- --------- --------- ---------- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aetna Ascent VP $ 23 $ 72 $124 $265 $ 75 $127 $170 $265
Aetna Balanced VP, Inc. $ 22 $ 68 $116 $250 $ 73 $122 $162 $250
Aetna Bond VP $ 21 $ 65 $111 $240 $ 72 $119 $157 $240
Aetna Crossroads VP $ 23 $ 72 $124 $265 $ 75 $127 $170 $265
Aetna Growth VP $ 23 $ 71 $122 $262 $ 75 $126 $168 $262
Aetna Growth and Income VP $ 22 $ 68 $116 $249 $ 73 $122 $162 $249
Aetna High Yield VP $ 27 $ 84 $143 $304 $ 79 $138 $188 $304
Aetna Index Plus Large Cap VP $ 21 $ 64 $109 $236 $ 72 $118 $156 $236
Aetna Index Plus Mid Cap VP $ 24 $ 74 $127 $271 $ 75 $128 $172 $271
Aetna Index Plus Small Cap VP $ 25 $ 77 $132 $281 $ 76 $131 $177 $281
Aetna International VP $ 32 $ 99 $167 $350 $ 83 $151 $211 $350
Aetna Legacy VP $ 24 $ 73 $124 $266 $ 75 $127 $170 $266
Aetna Money Market VP $ 19 $ 60 $104 $224 $ 71 $115 $150 $224
Aetna Real Estate Securities VP $ 31 $ 95 $161 $338 $ 82 $148 $205 $338
Aetna Small Company VP $ 25 $ 77 $131 $279 $ 76 $131 $176 $279
Aetna Technology VP $ 28 $ 86 $147 $311 $ 79 $140 $191 $311
Aetna Value Opportunity VP $ 23 $ 72 $123 $264 $ 75 $126 $169 $264
AIM V.I. Capital Appreciation Fund $ 23 $ 72 $123 $264 $ 75 $126 $169 $264
AIM V.I. Growth Fund $ 23 $ 72 $123 $264 $ 75 $126 $169 $264
AIM V.I. Growth and Income Fund $ 24 $ 73 $125 $268 $ 75 $127 $171 $268
AIM V.I. Value Fund $ 24 $ 73 $125 $267 $ 75 $127 $171 $267
Calvert Social Balanced Portfolio $ 25 $ 77 $131 $280 $ 76 $131 $177 $280
Fidelity VIP Equity-Income Portfolio $ 22 $ 67 $115 $248 $ 73 $122 $161 $248
Fidelity VIP Growth Portfolio $ 23 $ 70 $120 $257 $ 74 $124 $166 $257
Fidelity VIP Overseas Portfolio $ 25 $ 77 $132 $282 $ 76 $131 $178 $282
Fidelity VIP II Contrafund[RegTM] Portfolio $ 23 $ 70 $120 $258 $ 74 $125 $166 $258
Janus Aspen Aggressive Growth Portfolio $ 23 $ 70 $120 $258 $ 74 $125 $166 $258
Janus Aspen Balanced Portfolio $ 23 $ 70 $120 $258 $ 74 $125 $166 $258
Janus Aspen Flexible Income Portfolio $ 23 $ 72 $123 $263 $ 75 $126 $169 $263
Janus Aspen Growth Portfolio $ 23 $ 70 $120 $258 $ 74 $125 $166 $258
Janus Aspen Worldwide Growth Portfolio $ 23 $ 71 $122 $261 $ 74 $125 $168 $261
Oppenheimer Global Securities Fund/VA $ 23 $ 71 $121 $260 $ 74 $125 $167 $260
Oppenheimer Strategic Bond Fund/VA $ 24 $ 74 $126 $269 $ 75 $128 $172 $269
PPI MFS Capital Opportunities Portfolio $ 25 $ 77 $132 $281 $ 76 $131 $177 $281
PPI MFS Emerging Equities Portfolio $ 24 $ 74 $127 $271 $ 75 $128 $172 $271
PPI MFS Research Growth Portfolio $ 25 $ 76 $129 $276 $ 76 $130 $175 $276
PPI Scudder International Growth Portfolio $ 26 $ 80 $137 $291 $ 77 $134 $182 $291
PPI T. Rowe Price Growth Equity Portfolio $ 24 $ 73 $124 $266 $ 75 $127 $170 $266
</TABLE>
10
<PAGE>
Hypothetical Examples (continued)
<TABLE>
<CAPTION>
> These examples are purely hypothetical.
> They should not be considered a
representation of past or future fees or
expected returns.
> Actual expenses and/or returns may be
more or less than those shown in these
examples.
EXAMPLE C EXAMPLE D
--------------------------------------- --------------------------------------
If you leave your entire account value
If you withdraw your entire account invested or if you select an income phase
value at the end of the periods shown, payment option at the end of the periods
you would pay the following expenses, shown, you would pay the following
including any charge assessed under expenses, (no early withdrawal charge is
early withdrawal charge Schedule C: reflected):*
1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
-------- --------- --------- ---------- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aetna Ascent VP $ 85 $116 $147 $265 $ 23 $ 72 $124 $265
Aetna Balanced VP, Inc. $ 84 $111 $139 $250 $ 22 $ 68 $116 $250
Aetna Bond VP $ 83 $108 $134 $240 $ 21 $ 65 $111 $240
Aetna Crossroads VP $ 85 $116 $147 $265 $ 23 $ 72 $124 $265
Aetna Growth VP $ 85 $115 $145 $262 $ 23 $ 71 $122 $262
Aetna Growth and Income VP $ 84 $111 $139 $249 $ 22 $ 68 $116 $249
Aetna High Yield VP $ 89 $127 $166 $304 $ 27 $ 84 $143 $304
Aetna Index Plus Large Cap VP $ 82 $107 $132 $236 $ 21 $ 64 $109 $236
Aetna Index Plus Mid Cap VP $ 86 $117 $150 $271 $ 24 $ 74 $127 $271
Aetna Index Plus Small Cap VP $ 87 $120 $155 $281 $ 25 $ 77 $132 $281
Aetna International VP $ 93 $141 $189 $350 $ 32 $ 99 $167 $350
Aetna Legacy VP $ 85 $116 $147 $266 $ 24 $ 73 $124 $266
Aetna Money Market VP $ 81 $104 $127 $224 $ 19 $ 60 $104 $224
Aetna Real Estate Securities VP $ 92 $137 $183 $338 $ 31 $ 95 $161 $338
Aetna Small Company VP $ 86 $120 $154 $279 $ 25 $ 77 $131 $279
Aetna Technology VP $ 89 $129 $169 $311 $ 28 $ 86 $147 $311
Aetna Value Opportunity VP $ 85 $115 $146 $264 $ 23 $ 72 $123 $264
AIM V.I. Capital Appreciation Fund $ 85 $115 $146 $264 $ 23 $ 72 $123 $264
AIM V.I. Growth Fund $ 85 $115 $146 $264 $ 23 $ 72 $123 $264
AIM V.I. Growth and Income Fund $ 85 $117 $148 $268 $ 24 $ 73 $125 $268
AIM V.I. Value Fund $ 85 $116 $148 $267 $ 24 $ 73 $125 $267
Calvert Social Balanced Portfolio $ 87 $120 $154 $280 $ 25 $ 77 $131 $280
Fidelity VIP Equity-Income Portfolio $ 84 $111 $138 $248 $ 22 $ 67 $115 $248
Fidelity VIP Growth Portfolio $ 84 $113 $143 $257 $ 23 $ 70 $120 $257
Fidelity VIP Overseas Portfolio $ 87 $121 $155 $282 $ 25 $ 77 $132 $282
Fidelity VIP II Contrafund[RegTM] Portfolio $ 84 $114 $143 $258 $ 23 $ 70 $120 $258
Janus Aspen Aggressive Growth Portfolio $ 84 $114 $143 $258 $ 23 $ 70 $120 $258
Janus Aspen Balanced Portfolio $ 84 $114 $143 $258 $ 23 $ 70 $120 $258
Janus Aspen Flexible Income Portfolio $ 85 $115 $146 $263 $ 23 $ 72 $123 $263
Janus Aspen Growth Portfolio $ 84 $114 $143 $258 $ 23 $ 70 $120 $258
Janus Aspen Worldwide Growth Portfolio $ 85 $115 $145 $261 $ 23 $ 71 $122 $261
Oppenheimer Global Securities Fund/VA $ 85 $114 $144 $260 $ 23 $ 71 $121 $260
Oppenheimer Strategic Bond Fund/VA $ 85 $117 $149 $269 $ 24 $ 74 $126 $269
PPI MFS Capital Opportunities Portfolio $ 87 $120 $155 $281 $ 25 $ 77 $132 $281
PPI MFS Emerging Equities Portfolio $ 86 $117 $150 $271 $ 24 $ 74 $127 $271
PPI MFS Research Growth Portfolio $ 86 $119 $152 $276 $ 25 $ 76 $129 $276
PPI Scudder International Growth Portfolio $ 88 $123 $159 $291 $ 26 $ 80 $137 $291
PPI T. Rowe Price Growth Equity Portfolio $ 85 $116 $147 $266 $ 24 $ 73 $124 $266
</TABLE>
- -----------------
* This example does not apply during the income phase if you select a
nonlifetime income phase payment option with variable payments and take a
lump-sum withdrawal within five years after you begin receiving payments (or
within three years for 1992 contracts). In these circumstances, the lump-sum
payment is treated as a withdrawal during the accumulation phase and may be
subject to an early withdrawal charge (refer to examples A, B or C).
11
<PAGE>
Condensed Financial Information
- --------------------------------------------------------------------------------
Understanding Condensed Financial Information. In Appendix V of this
prospectus, we provide condensed financial information about the Variable
Annuity Account C (the separate account) subaccounts you may invest in through
the contract. The numbers show the year-end unit values of each subaccount over
the past ten years. For subaccounts that were not available ten years ago, we
give a history from the date of first availability.
Investment Options
- --------------------------------------------------------------------------------
The contract offers variable investment options and fixed interest options.
Variable Investment Options. These options are called subaccounts. The
subaccounts are within Variable Annuity Account C, a separate account of the
Company. Each subaccount invests in a specific mutual fund. You do not invest
directly in or hold shares in the funds.
> Mutual Fund (fund) Descriptions. We provide brief descriptions of the funds in
Appendix IV. Investment results of the funds are likely to differ
significantly and there is no assurance that any of the funds will achieve
their respective investment objectives. Shares of the funds will rise and fall
in value and you could lose money by investing in the funds. Shares of the
funds are not bank deposits and are not guaranteed, endorsed or insured by any
financial institution, the Federal Deposit Insurance Corporation or any other
government agency. Unless otherwise noted, all funds are diversified as
defined under the Investment Company Act of 1940. Refer to the fund
prospectuses for additional information. Fund prospectuses may be obtained,
free of charge, from our Home Office at the address and phone number listed in
"Contract Overview--Questions: Contacting the Company" or by contacting the
SEC Public Reference Room.
Fixed Interest Options. For descriptions of the fixed interest options, see
Appendices I, II and III and the Guaranteed Accumulation Account prospectus.
Selecting Investment Options
o Choose options appropriate for you. Your sales representative can help you
evaluate which investment options may be appropriate for your financial
goals.
o Understand the risks associated with the options you choose. Some
subaccounts invest in funds that are considered riskier than others. Funds
with additional risks are expected to have values that rise and fall more
rapidly and to a greater degree than other funds. For example, funds
investing in foreign or international securities are subject to risks not
associated with domestic investments, and their investment performance may
vary accordingly. Also, funds using derivatives in their investment strategy
may be subject to additional risks.
o Be informed. Read this prospectus, the fund prospectuses, the Guaranteed
Interest Account, Fixed Account and Guaranteed Accumulation Account
appendices and the Guaranteed Accumulation Account prospectus.
12
<PAGE>
Limits on Availability of Options. Some funds or fixed interest options may be
unavailable through your contract or in your state. We may add, withdraw or
substitute funds, subject to the conditions in your contract and compliance
with regulatory requirements.
Limits on How Many Investment Options You May Select. You may select no more
than 18 investment options during the accumulation phase. Each subaccount, the
Fixed Account, and each classification of the Guaranteed Interest Account and
Guaranteed Accumulation Account that you select is considered an option, even
if you no longer have amounts allocated to it. For 1994 contracts, you may
select no more than ten investment options at any one time.
Limits Imposed by the Underlying Fund. Orders for the purchase of fund shares
may be subject to acceptance by the fund. We reserve the right to reject,
without prior notice, any allocation of a purchase payment to a subaccount if
the subaccount's investment in the corresponding fund is not accepted by the
fund for any reason.
Additional Risks of Investing in the Funds (Mixed and Shared Funding).
"Shared funding" occurs when shares of a fund, which the subaccounts buy for
variable annuity contracts, are also bought by other insurance companies for
their variable annuity contracts.
"Mixed funding" occurs when shares of a fund, which the subaccounts buy for
variable annuity contracts, are bought for variable life insurance contracts
issued by us or other insurance companies.
> Shared--bought by more than one company.
> Mixed--bought for annuities and life insurance.
It is possible that a conflict of interest may arise due to mixed and/or shared
funding, which could adversely impact the value of a fund. For example, if a
conflict of interest occurred and one of the subaccounts withdrew its
investment in a fund, the fund may be forced to sell its securities at
disadvantageous prices, causing its share value to decrease. Each fund's Board
of Directors or Trustees will monitor events to identify any conflicts which
may arise and to determine what action, if any, should be taken to address such
conflicts.
Transfers Among Investment Options
- --------------------------------------------------------------------------------
During the accumulation phase, you may transfer amounts among the available
subaccounts. We allow you 12 free transfers each calendar year. We reserve the
right to charge $10.00 for each additional transfer. We currently do not impose
this charge.
Transfers from fixed interest options are restricted as outlined in Appendices
I, II and III. Transfers must be made in accordance with the terms of the
contract. You may not make transfers once you enter the income phase. See "The
Income Phase."
Transfer Requests. Requests may be made in writing, by telephone or, where
applicable, electronically.
13
<PAGE>
Limits on Frequent Transfers. The contracts are not designed to serve as
vehicles for frequent trading in response to short-term fluctuations in the
market. Such frequent trading can disrupt management of a fund and raise its
expenses. This in turn can have an adverse effect on fund performance.
Accordingly, organizations or individuals that use market-timing investment
strategies and make frequent transfers should not purchase the contracts.
We reserve the right to restrict, in our sole discretion and without prior
notice, transfers initiated by a market-timing organization or individual or
other party authorized to give transfer instructions on behalf of multiple
contract holders. Such restrictions could include: (1) not accepting transfer
instructions from an agent acting on behalf of more than one contract holder;
and (2) not accepting preauthorized transfer forms from market timers or other
entities acting on behalf of more than one contract holder at a time.
We further reserve the right to impose, without prior notice, restrictions on
any transfers that we determine, in our sole discretion, will disadvantage or
potentially hurt the rights or interests of other contract holders.
Additionally, orders for the purchase of fund shares may be subject to
acceptance by the fund. We reserve the right to reject, without prior notice,
any transfer request to a subaccount if the subaccount's investment in the
corresponding fund is not accepted for any reason.
Value of Transferred Dollars. The value of amounts transferred into or out of
the funds will be based on the subaccount unit values next determined after we
receive your transfer request in good order at our Home Office, or if you are
participating in the dollar cost averaging program, after your scheduled
transfer or reallocation.
Telephone and Electronic Transactions: Security Measures. To prevent fraudulent
use of telephone and electronic transactions (including, but not limited to,
internet transactions), we have established security procedures. These include
recording calls on our toll-free telephone lines and requiring use of a
personal identification number (PIN) to execute transactions. You are
responsible for keeping your PIN and account information confidential. If we
fail to follow reasonable security procedures, we may be liable for losses due
to unauthorized or fraudulent telephone or other electronic transactions. We
are not liable for losses resulting from telephone or electronic instructions
we believe to be genuine. If a loss occurs when we rely on such instructions,
you will bear the loss.
The Dollar Cost Averaging Program. The 1994 contract, which we currently sell,
permits participation in our dollar cost averaging program. Dollar cost
averaging is an investment strategy whereby you purchase fixed dollar amounts
of an investment at regular intervals, regardless of price. Under this program
a fixed dollar amount is automatically transferred from certain investment
options to one or more of the subaccounts you select. A market value adjustment
will not be applied to dollar cost averaging transfers from a guaranteed term
of the Guaranteed Accumulation Account during participation in the dollar cost
averaging program. If such participation is discontinued, we will automatically
transfer the remaining balance in that guaranteed term to another guaranteed
term of the same duration, unless you initiate a transfer into another
investment option. In either case, a market
14
<PAGE>
value adjustment will apply. See the Guaranteed Accumulation Account prospectus
for more information about dollar cost averaging from the Guaranteed
Accumulation Account.
Dollar cost averaging neither ensures a profit nor guarantees against loss in a
declining market. You should consider your financial ability to continue
purchases through periods of low price levels. There is no additional charge for
this program and transfers made under this program do not count as transfers
when determining the number of free transfers that may be made each calendar
year. For additional information about this program, contact your sales
representative or call us at the number listed in the "Contract Overview--
Questions: Contacting the Company" section.
Purchase
- --------------------------------------------------------------------------------
Contracts Available for Purchase. The contracts available for purchase are
intended to qualify under the Tax Code as one of the following:
> A traditional Individual Retirement Annuity (IRA) under Tax Code section
408(b); or
> A Roth IRA under Tax Code section 408A.
The traditional IRA may be used as a funding option for a Simplified Employee
Pension (SEP) plan under Tax Code section 408(k). The contract is not available
as a "Simple IRA" as defined in Tax Code section 408(p).
Eligibility. Eligibility to contribute to a traditional IRA on a pre-tax basis
or to establish a Roth IRA or to rollover or transfer from a traditional IRA to
a Roth IRA depends upon your adjusted gross income.
How to Purchase. Complete the application and submit it and your initial
purchase payment to the Company directly or through your sales representative.
Acceptance or Rejection of your Application. We must accept or reject your
application within two business days of receipt. If the application is
incomplete, we may hold any forms and accompanying purchase payment(s) for five
business days. We may hold purchase payments for longer periods, pending
acceptance of the application only with your permission. If the application is
rejected, the application and any purchase payments will be returned to you.
Purchase Payment Methods. The following purchase payment methods are allowed:
> Annual contributions. The initial purchase payment must be at least $1,000 and
subsequent payments may be added as long as they meet our minimum requirements
in place at that time. Installment purchase payments are allowed, provided
that each installment purchase payment must be at least $85 (or $1,000
annually). Monthly installments must be made via automatic bank check plan.
15
<PAGE>
> Rollovers or transfers from one or more of the following sources:
o A traditional IRA under Tax Code section 408(b);
o A Roth IRA under Tax Code section 408(a);
o An individual retirement account under Tax Code section 408(a);
o A tax-deferred annuity under Tax Code section 403(b); or
o A qualified pension or profit sharing plan under Tax Code section 401(a)
or 401(k).
Rollovers or transfers must be a minimum of $1,500, and subsequent rollovers or
payments may be added as long as they meet our minimum requirements in place at
that time.
Rollovers and direct transfers are permitted from a 401, 403(a) or a 403(b)
arrangement to a traditional IRA. Distributions from these arrangements are not
permitted to be transferred or rolled over to a Roth IRA. A Roth IRA can accept
transfers/rollovers only from a traditional IRA, subject to ordinary income
tax, or from another Roth IRA.
Purchase in the State of New York. The 1994 contract, which we currently sell,
is available in New York subject to regulatory approval. Upon regulatory
approval the 1994 contract will be available in New York only if you purchase
the contract with an internal rollover from another contract issued by us
or one of our affiliates.
Allocating Purchase Payments to the Investment Options. We will allocate your
purchase payments among the investment options you select. Allocations must be
in whole percentages and there may be limits on the number of investment
options you may select. When selecting investment options, you may find it
helpful to review the "Investment Options" section.
Right to Cancel
- --------------------------------------------------------------------------------
When and How to Cancel. You may cancel your contract within ten days of receipt
(some states require more than ten days) by returning it to our Home Office
along with a written notice of cancellation.
Refunds. We will issue you a refund within seven days of our receipt of your
contract and written notice of cancellation. Your refund will equal all
purchase payments made.
If the purchase payments for your cancelled contract came from a rollover from
another contract issued by us or one of our affiliates where an early
withdrawal charge was reduced or eliminated, the purchase payments will be
restored to your prior contract.
16
<PAGE>
[sidebar]
Types of Fees
There are four types of fees or deductions which may affect your account:
> Transaction Fees
o Early Withdrawal Charge
o Annual Maintenance Fee
o Transfer Charge
> Fees Deducted from Investments in the
Separate Account
o Mortality and Expense
Risk Charge
o Administrative Expense
Charge
> Fees Deducted by the Funds
o Investment Advisory Fees
o Other Expenses
> Premium and Other Taxes
[end sidebar]
Fees
- --------------------------------------------------------------------------------
The following repeats and adds to information provided in the "Fee Table"
section. Please review both sections for information on fees.
Transaction Fees
Early Withdrawal Charge
Withdrawals of all or a portion of your account value may be subject to a
charge.
Amount. The charge is a percentage of the amount that you withdraw. The
percentage will be determined by the early withdrawal charge schedule that
applies to your contract. The schedules are listed below and appear on your
contract schedule page. The charge will never be more than 81/2% of your total
purchase payments to the contract.
Purpose. This is a deferred sales charge. It reimburses us for some of the
sales and administrative expenses associated with the contract. If our expenses
are greater than the amount we collect for the early withdrawal charge, we may
use any of our corporate assets, including potential profit that may arise from
the mortality and expense risk charge, to make up any difference.
Early Withdrawal Charge Schedules
(Your contract schedule page shows which of the following early withdrawal
charge schedules applies to you.)
<TABLE>
<CAPTION>
Schedule A
- ------------------------------------------
Contract Years Early Withdrawal Charge
<S> <C>
Fewer than 1 1%
1 or more 0%
</TABLE>
Schedule A applies to 1994 contracts established with amounts that were
transferred or rolled over from the Company's MAP or ADAPTOR contracts (other
than MAP contracts under Variable Annuity Account C) including amounts rolled
over into a Roth IRA in connection with a conduit traditional IRA, and Aetna
Life Insurance Company contracts and Company general account contracts issued
in connection with Tax Code sections 401 and 403 qualified plans. It also
applies to previously-issued 1992 contracts established with amounts
transferred from certain contracts issued by the Company under certain pension
or profit sharing retirement plans only where you were not subject to an early
withdrawal charge (deferred sales charge) under the prior contract at the time
of transfer. The early withdrawal charge is based on the number of completed
contract years since the date of initial payment to the new contract.
<TABLE>
<CAPTION>
Schedule B
- --------------------------------------------------------
Contract Years Early Withdrawal Charge
<S> <C>
Less than 5 5%
5 or more but fewer than 6 4%
6 or more but fewer than 7 3%
7 or more but fewer than 8 2%
8 or more but fewer than 9 1%
9 or more 0%
</TABLE>
17
<PAGE>
Schedule B applies to 1992 contracts established with amounts that were
transferred from certain existing contracts issued by the Company where the
contract holder had been subject to an early withdrawal charge (deferred sales
charge). The beginning early withdrawal charge is based on the number of
completed contract years since the initial payment to the predecessor contract.
<TABLE>
<CAPTION>
Schedule C
- --------------------------------------------------------
Contract Years Early Withdrawal Charge
<S> <C>
Less than 2 6%
2 or more but fewer than 3 5%
3 or more but fewer than 4 4%
4 or more but fewer than 5 3%
5 or more but fewer than 6 2%
6 or more but fewer than 7 1%
7 or more 0%
</TABLE>
Schedule C applies to 1994 contracts established with amounts that were
transferred from contracts issued by the Company in connection with Tax Code
sections 401 and 403 qualified plans, (other than those contracts described
above under Schedule A), and rollovers from IRAs under Tax Code sections 408
and 408A. Rather than assessing an early withdrawal charge on the predecessor
contract, the early withdrawal charge is based on the number of completed
contract years since the date of initial payment to the predecessor contract.
Schedule C also applies to all new purchases that are not connected with an
internal transfer (e.g., external rollovers or contracts established with at
least a $1,000 annual contribution), and to internal rollovers from certain
variable life insurance contracts funding Tax Code section 401 qualified plans.
Waiver. The early withdrawal charge is waived if the amount withdrawn is due to
one or more of the following:
> Used to provide income phase payments to you;
> Paid due to your death;
> Withdrawn under a systematic distribution option (See "Systematic Distribution
Options");
> Paid upon a full withdrawal where your account value is $2,500 or less and no
part of the account has been withdrawn during the prior 12 months; or
> Withdrawn in an amount of 10% or less of your account value, provided you are
at least age 591/2. This applies only to the first partial withdrawal in each
calendar year and does not apply to full withdrawals, unless your contract is
issued in the states of Washington, Florida or New Jersey. The 10% amount will
be calculated using your account value as of the date the request is received
in good order at our Home Office. When a systematic distribution option is
selected, this provision includes any amounts paid under that election.
Annual Maintenance Fee
Maximum Amount. $25.00
When/How. Each year during the accumulation phase we deduct this fee on your
contract anniversary. It is deducted on a pro rata basis from each subaccount
and fixed interest option in which you have interest.
18
<PAGE>
Purpose. This fee reimburses us for our administrative expenses related to
establishing and maintaining your account.
Reduction or Elimination. We will eliminate the maintenance fee if your account
value is $10,000 or greater on the day before the maintenance fee is deducted.
Additionally for 1992 contracts, the maintenance fee is eliminated if your
initial purchase payment was $10,000 or greater.
Additionally, we may reduce or eliminate the maintenance fee if we anticipate
savings on our administrative expenses for the sale because of one or more of
the following:
> The size and type of group to whom the contract is offered; or
> The amount of expected purchase payments.
We will not unfairly discriminate against any person if we reduce or eliminate
the maintenance fee. Any reduction or elimination of this fee will be done
according to our own rules in effect at the time an application for a contract
is approved. We reserve the right to change these rules from time to time.
Transfer Charge
Amount. $0.00
During the accumulation phase, we currently allow you 12 free transfers each
calendar year. We reserve the right, however, to charge $10 for each additional
transfer. We currently do not impose this charge.
Purpose. This charge reimburses us for administrative expenses associated with
transferring your dollars among investment options.
Fees Deducted from Investments in the Separate Account
Mortality and Expense Risk Charge
Maximum Amount. This charge on an annual basis, is equal to 1.25% of your
account value invested in the subaccounts.
When/How. We deduct this charge daily from the subaccounts corresponding to the
funds you select. We do not deduct this fee from any fixed interest option.
This charge is deducted during the accumulation phase and the income phase.
Purpose. This charge compensates us for the mortality and expense risks we
assume under the contracts.
> The mortality risks are those risks associated with our promise to make
lifetime income phase payments based on annuity rates specified in the
contract.
> The expense risk is the risk that the actual expenses we incur under the
contract will exceed the maximum costs that we can charge.
If the amount we deduct for this charge is not enough to cover our mortality
costs and expenses under the contract, we will bear the loss. We may use any
excess to recover distribution costs relating to the contract and as a source
of profit. We expect to make a profit from this charge.
Reduction. For 1994 contracts, which we currently sell, we will reduce this
charge to 1.15% provided one or more of the following conditions are met:
19
<PAGE>
(1) The contract has remained in the accumulation phase for ten years
following the initial payment;
(2) The initial payment is $250,000 or more; or
(3) The value of the contract is $250,000 or more on any anniversary of the
date the initial purchase payment was applied.
Administrative Expense Charge
Amount 0.00%
We currently do not impose this charge. We reserve the right, however, to
charge up to 0.25% annually of your account value invested in the subaccounts.
When/How. If imposed, we deduct this charge daily from the subaccounts
corresponding to the funds you select. We do not deduct this charge from the
fixed interest options. This charge may be assessed during the accumulation
phase and/or the income phase. If we are imposing this charge when you enter
the income phase, the charge will apply to you during the entire income phase.
Purpose. This charge helps defray our administrative expenses that cannot be
covered by the mortality and expense risk charge described above. The charge is
not intended to exceed the average expected cost of administering the contract.
We do not expect to make a profit from this charge.
Fees Deducted by the Funds
Maximum Amount. Each fund's advisory fee and expenses are different. They are
set forth on "Fee Table--Fees Deducted by the Funds" and described in more
detail in each fund prospectus.
When/How. A fund's fees and expenses are not deducted from your account.
Instead, they are reflected in the daily value of fund shares, which in turn
will affect the daily value of the subaccounts.
Purpose. These fees and expenses help to pay the fund's investment adviser and
operating expenses.
Premium and Other Taxes
Maximum Amount. Several states and municipalities charge a premium tax on
annuities. These taxes currently range from 0% to 4%, depending upon the
jurisdiction.
When/How. We reserve the right to deduct premium taxes from your account value
or from your purchase payments to the account at any time, but not before there
is a tax liability under state law. Our current practice is to deduct premium
taxes at the time of a complete withdrawal or at the commencement of income
phase payments to reflect the cost of premium taxes in our income phase payment
rates.
In addition, we reserve the right to assess a charge for any federal taxes due
against the separate account. See "Taxation."
20
<PAGE>
Your Account Value
- --------------------------------------------------------------------------------
During the accumulation phase, your account value at any given time equals:
> The current dollar value of amounts invested in the subaccounts; plus
> The current dollar value of amounts invested in the fixed interest options,
including interest earnings to date.
Subaccount Accumulation Units. When you select a fund as an investment option,
your account dollars invest in "accumulation units" of the Variable Annuity
Account C subaccount corresponding to that fund. The subaccount invests
directly in the fund shares. The value of your interests in a subaccount is
expressed as the number of accumulation units you hold multiplied by an
"Accumulation Unit Value," as described below, for each unit.
Accumulation Unit Value (AUV). The value of each accumulation unit in a
subaccount is called the accumulation unit value or AUV. The AUV varies daily
in relation to the underlying fund's investment performance. The value also
reflects deductions for fund fees and expenses, the mortality and expense risk
charge and the administrative expense charge (if any). We discuss these
deductions in more detail in "Fee Table" and "Fees."
Valuation. We determine the AUV every normal business day after the close of
the New York Stock Exchange. At that time we calculate the current AUV by
multiplying the AUV last calculated by the net investment factor of the
subaccount. The net investment factor measures the investment performance of
the subaccount from one valuation to the next.
Current AUV = Prior AUV x Net Investment Factor
Net Investment Factor. The net investment factor for a subaccount between two
consecutive valuations equals the sum of 1.0000 plus the net investment rate.
Net Investment Rate. The net investment rate is computed according to a formula
that is equivalent to the following:
> The net assets of the fund held by the subaccount as of the current valuation;
minus
> The net assets of the fund held by the subaccount at the preceding valuation;
plus or minus
> Taxes or provisions for taxes, if any, due to subaccount operations (with any
federal income tax liability offset by foreign tax credits to the extent
allowed); divided by
> The total value of the subaccount's units at the preceding valuation; minus
> A daily deduction for the mortality and expense risk charge, the
administrative expense charge, if any, and any other fees, such as guarantee
charges for Aetna GET Fund, deducted from investments in the separate account.
See "Fees."
The net investment rate may be either positive or negative.
21
<PAGE>
Hypothetical Illustration. As an hypothetical illustration, assume that your
initial purchase payment to a qualified contract is $5,000 and you direct us to
invest $3,000 in Fund A and $2,000 in Fund B. Also assume that on the day we
receive the purchase payment the applicable AUVs after the next close of
business of the New York Stock Exchange are $10 for Subaccount A and $20 for
Subaccount B. Your account is credited with 300 accumulation units of
Subaccount A, and 100 accumulation units of Subaccount B.
<TABLE>
<S> <C>
------------------------
$5,000 Purchase Payment Step 1: You make an initial
------------------------ purchase payment of $5000.
Step 1 [arrow down] Step 2:
- -------------------------------------------- A. You direct us to invest $3,000
in Fund A. The purchase payment
Aetna Life Insurance and Annuity Company purchases 300 accumulation
units of Subaccount A ($3,000
- -------------------------------------------- divided by the current $10 AUV).
Step 2 [arrow down] B. You direct us to invest $2,000
------------------------------------------- in Fund B. The purchase payment
purchases 80 accumulation units
Variable Annuity Account C of Subaccount B ($2,000 divided
by the current $25 AUV).
- --------------------------------------------
Subaccount A Subaccount B Etc. Step 3: The separate account
300 80 purchases shares of the applicable
accumulation accumulation funds at the then current market
units units value (net asset value or NAV).
Step 3 [arrow down]
---------------- ----------------
Mutual Mutual
Fund A Fund B
---------------- ----------------
</TABLE>
Each fund's subsequent investment performance, expenses and charges, and the
daily charges deducted from the subaccount, will cause the AUV to move up or
down on a daily basis.
Purchase Payments to Your Account. If all or a portion of your initial purchase
payment is directed to the subaccounts, it will purchase subaccount
accumulation units at the AUV next computed after our acceptance of your
application as described in "Purchase." Subsequent purchase payments or
transfers directed to the subaccounts will purchase subaccount accumulation
units at the AUV next computed following our receipt of the purchase payment or
transfer request in good order. The value of subaccounts may vary day to day.
22
<PAGE>
[sidebar]
Taxes, Fees and Other Deductions
Amounts withdrawn may be subject to one or more of the following:
> Early Withdrawal Charge (see "Fees--Early Withdrawal Charge")
> Annual Maintenance Fee (see "Fees--Annual Maintenance Fee")
> Market Value Adjustment (see Appendix III and the Guaranteed Accumulation
Account prospectus)
> Tax Penalty (see "Taxation")
> Tax Withholding (see "Taxation")
To determine which may apply to you, refer to the appropriate sections of this
prospectus, contact your sales representative or call us at the number listed
in "Contract Overview--Questions: Contacting the Company.""
[end sidebar]
Withdrawals
- --------------------------------------------------------------------------------
You may withdraw all or a portion of your account value at any time during
the accumulation phase.
Steps for Making a Withdrawal
Select the withdrawal amount.
(1) Full Withdrawal: You will receive, reduced by any required withholding
tax, your account value allocated to the subaccounts, the Guaranteed
Interest Account, the Fixed Account, and the Guaranteed Accumulation
Account (plus or minus any applicable market value adjustment), minus any
applicable early withdrawal charge and annual maintenance fee.
(2) Partial Withdrawal (Percentage or Specified Dollar Amount): You will
receive, reduced by any required withholding tax, the amount you specify,
subject to the value available in your account. However, the amount actually
withdrawn from your account will be adjusted by any applicable early
withdrawal charge and any positive or negative market value adjustment for
amounts withdrawn from the Guaranteed Accumulation Account. See Appendices
I, II, III and the Guaranteed Accumulation Account prospectus for more
information about withdrawals from the fixed interest options.
> Select investment options. If you do not specify this, we will withdraw
dollars proportionally from each of your investment options.
> Properly complete a disbursement form and submit it to our Home Office.
Calculation of Your Withdrawal. We determine your account value every normal
business day after the close of the New York Stock Exchange. We pay withdrawal
amounts based on your account value as of the next valuation after we receive a
request for withdrawal in good order at our Home Office, or on such later date
as you specify on the disbursement form.
Delivery of Payment. Payments for withdrawal requests will be made in
accordance with SEC requirements. Normally, your withdrawal amount will be sent
no later than seven calendar days following our receipt of your disbursement
form in good order.
Reinvesting a Full Withdrawal. Within 30 days after a full withdrawal, if
allowed by law and the contract, you may elect to reinvest all or a portion of
your withdrawal. We must receive any reinvested amounts within 60 days of the
withdrawal. We reserve the right, however, to accept a reinvestment election
received more than 30 days after the withdrawal and accept proceeds received
more than 60 days after the withdrawal. We will credit your account for the
amount reinvested based on the subaccount values next computed following our
receipt of your request and the amount to be reinvested. We will credit the
amount reinvested proportionally for annual maintenance fees and early
withdrawal charges imposed at the time of withdrawal. We will deduct from the
amounts reinvested any annual maintenance fee which fell due after the
withdrawal and before the reinvestment. We will reinvest in the same investment
options and proportions in place at the time of withdrawal. If you withdraw
amounts from a series of the Aetna GET Fund and then elect to reinvest them, we
will reinvest them in a GET Fund series that is then accepting deposits, if one
is available. If one is not available, we will reallocate your GET amounts
among other investment options in which you invested, on a pro rata basis. The
reinvestment
23
<PAGE>
privilege may be used only once. Special rules may apply to reinvestments of
amounts withdrawn from the Guaranteed Interest Account and the Guaranteed
Accumulation Account (see Appendices I and III). We will not credit your
account for market value adjustments that we deducted at the time of your
withdrawal from the Guaranteed Accumulation Account. Seek competent advice
regarding the tax consequences associated with reinvestment.
24
<PAGE>
[sidebar]
Features of a Systematic Distribution Option
A systematic distribution option allows you to receive regular payments from
the contract, without moving into the income phase. By remaining in the
accumulation phase, you retain certain rights and investment flexibility not
available during the income phase.
[end sidebar]
Systematic Distribution Options
- --------------------------------------------------------------------------------
The following systematic distribution options may be available:
> SWO--Systematic Withdrawal Option. SWO is a series of automatic partial
withdrawals from your account based on a payment method you select. Consider
this option if you would like a periodic income while retaining investment
flexibility for amounts accumulated in the account.
> ECO--Estate Conservation Option. ECO offers the same investment flexibility as
SWO, but is designed for those who want to receive only the minimum
distribution that the Tax Code requires each year. Under ECO, we calculate the
minimum distribution amount required by law generally at age 701/2 and pay you
that amount once a year. ECO is not available under Roth IRA contracts. An
early withdrawal charge will not be deducted from and a market value
adjustment will not be applied to any part of your account value paid under an
ECO.
Other Systematic Distribution Options. We may add additional systematic
distribution options from time to time. You may obtain additional information
relating to any of the systematic distribution options from your sales
representative or by calling us at the number listed in "Contract Overview--
Questions: Contacting the Company."
Systematic Distribution Option Availability. If allowed by applicable law, we
may discontinue the availability of one or more of the systematic distribution
options for new elections at any time, and/or to change the terms of future
elections.
Eligibility for a Systematic Distribution Option. To determine if you meet the
age and account value criteria and to assess terms and conditions that may
apply, contact your sales representative or call us at the number listed in
"Contract Overview--Questions: Contacting the Company."
Terminating a Systematic Distribution Option. You may revoke a systematic
distribution option at any time by submitting a written request to our Home
Office. If ECO, once revoked, may not, unless allowed under the Tax Code, be
elected again.
Charges and Taxation. When you elect a systematic distribution option, your
account value remains in the accumulation phase and subject to the charges and
deductions described in "Fees" and "Fee Table" sections. Taking a withdrawal
under a systematic distribution option may have tax consequences. If you are
concerned about tax implications, consult a qualified tax adviser before
electing an option.
25
<PAGE>
[sidebar]
This section provides information about the death benefit during the
accumulation phase.
For death benefit
information applicable to
the income phase, see "The Income Phase."
[end sidebar]
Death Benefit
- --------------------------------------------------------------------------------
During the Accumulation Phase. The contract provides a death benefit in the
event of your death during the accumulation phase.
Who Receives the Death Benefit Proceeds? If you would like certain individuals
to receive the death benefit when it becomes payable, you may name them as your
beneficiaries. If you die and no beneficiary exists, the death benefit will be
paid in a lump sum to your estate.
Designating Your Beneficiary. You may designate a beneficiary on your
application or by contacting your sales representative or by calling us at the
number listed in "Contract Overview--Questions: Contacting the Company."
Death Benefit Amount. The amount of the death benefit is equal to your account
value as of the next time we value your account following the date on which we
receive proof of your death in good order. In addition to this amount, some
states require we pay interest calculated from date of death at a rate
specified by state law. .
For amounts held in the Guaranteed Accumulation Account, any positive aggregate
market value adjustment (the sum of all market value adjustments calculated due
to a withdrawal) will be included in your account value. If a negative
aggregate market value adjustment applies, it would be deducted only if the
death benefit is withdrawn more than six months after your death. We describe
the market value adjustment in Appendix III and in the Guaranteed Accumulation
Account prospectus.
Death Benefit Payment Options. Unless otherwise requested, we will mail payment
to the beneficiary within seven days after we receive proof of death and
payment request acceptable to us. If allowed by the Tax Code, the designated
beneficiary may elect to have the death benefit proceeds paid in any one of the
following ways:
> Lump-sum payment;
> Payment in accordance with any of the available income phase payment options
(see "The Income Phase"); or
> If the beneficiary is your spouse, payment in accordance with any of the
available systematic distribution options (see "Systematic Distribution
Options").
The following options are also available to the beneficiary, however, the Tax
Code limits how long the death benefit proceeds may be left in these options:
> Leave the account value invested in the contract; or
> For certain contracts, leave the account value on deposit in the Company's
general account, and receive monthly, quarterly, semi-annual or annual
interest payments at the interest rate then being credited on such deposits.
The beneficiary can withdraw the balance on deposit at any time or request to
receive income payments in accordance with any of the available income phase
payment options. See "The Income Phase."
Taxation. The Tax Code requires distribution of death benefit proceeds within a
certain period of time. Failure to begin receiving death benefit payments
within those time periods can result in tax penalties. Regardless of the method
of payment, death benefit proceeds will generally be taxed to the beneficiary
in the same manner as if you had received those payments. See "Taxation" for
additional information.
26
<PAGE>
[sidebar]
We may have used the following terms in prior prospectuses:
Annuity Phase--Income Phase
Annuity Option--Income Phase Payment Option
Annuity Payment--Income Phase Payment
Annuitization--Initiating Income Phase Payments
[end sidebar]
The Income Phase
- --------------------------------------------------------------------------------
During the income phase you stop contributing dollars to the contract and
start receiving payments from your accumulated account value.
Initiating Payments. At least 30 days prior to the date you want to start
receiving payments, you must notify us in writing of the following:
> Payment start date;
> Income phase payment option (see the income phase payment options table in
this section);
> Payment frequency (i.e., monthly, quarterly, semi-annually or annually);
> Choice of fixed, variable or a combination of both fixed and variable
payments; and
> Selection of subaccounts and an assumed net investment rate (only if variable
payments are elected).
Your account will continue in the accumulation phase until you properly
initiate income phase payments. Once an income phase payment option is
selected, it may not be changed.
What Affects Payment Amounts? Some of the factors that may affect the amount of
your income phase payments include your age, gender, account value, the income
phase payment option selected, the number of guaranteed payments selected, (if
any) and whether you select fixed, variable or a combination of both fixed and
variable income phase payments and, for variable payments, the assumed net
investment rate selected.
Fixed Payments. Amounts funding fixed income phase payments will be held in the
Company's general account. The amount of fixed payments does not vary with
investment performance over time.
Variable Payments. Amounts funding your variable income phase payments will be
held in the subaccount(s) you select. Not all subaccounts available during the
accumulation phase may be available during the income phase. Payment amounts
will vary depending upon the investment performance of the subaccounts you
select. For variable payments, you must also select an assumed net investment
rate.
Assumed Net Investment Rate. If you select variable income phase payments, you
must also select an assumed net investment rate of either 5% or 31/2%. If you
select a 5% rate, your first income phase payment will be higher, but
subsequent payments will increase only if the investment performance of the
subaccounts you selected is greater than 5% annually after deduction of fees.
Payment amounts will decline if the investment performance is less than 5%
after deduction of fees.
If you select a 3 1/2% rate, your first income phase payment will be lower and
subsequent payments will increase more rapidly or decline more slowly depending
upon the investment performance of the subaccounts selected. For more
information about selecting an assumed net investment rate, call us for a copy
of the SAI. See "Contract Overview--Questions: Contacting the Company."
27
<PAGE>
Selecting Subaccounts. The subaccounts currently available during the income
phase are: The Aetna Growth and Income VP, the Aetna Bond VP and the Aetna
Balanced VP, Inc. Prior to selecting a subaccount, review the prospectus of
each of these funds. You may not transfer among subaccounts during the income
phase.
Minimum Payment Amounts. For 1994 contracts, which we currently sell, the
income phase payment option you select must result in one of the following:
> A first income phase payment of at least $50; or
> Total yearly income phase payments of at least $250.
If your account value is too low to meet these minimum payment amounts, you
will receive one lump-sum payment.
For 1992 contracts the payment option you select must result in one of the
following:
> A first payment of at least $20; or
> Total yearly payments of at least $100.
If your account value is too low to meet these minimum payment amounts, you
will receive one lump-sum payment.
Restrictions on Start Dates and the Duration of Payments. When income phase
payments start, the age of the annuitant plus the number of years for which
income phase payments are guaranteed, must not exceed 95. Certain tax rules may
also limit length of income phase payments. For Roth IRAs those minimum
distribution rules do not apply. See "Taxation."
Regardless of your income phase payment start date, your income phase payments
will not begin until you have selected an income phase payment option. Failure
to select an income phase payment option may have adverse tax consequences. You
should consult with a qualified tax adviser if you are considering this course
of action.
Charges Deducted. We make a daily deduction for mortality and expense risks
from amounts held in the subaccounts. Therefore, if you choose variable income
phase payments and a nonlifetime income phase payment option, we still make
this deduction from the subaccounts you select, even though we no longer assume
any mortality risks. We may also deduct a daily administrative expense charge
from amounts held in the subaccounts. See "Fees."
Death Benefit During the Income Phase. The death benefits that may be available
to a beneficiary are outlined in the "Income Phase Payment Options table below.
If a lump-sum payment is due as a death benefit, payment will be sent within
seven days following our receipt of proof of death and the payment request in
good order at our Home Office. Any death benefit payable must be distributed to
the beneficiary at least as rapidly as under the method of distribution in
effect on the date of death.
Calculation of Death Benefit. We will calculate the value of any death benefit
at the next valuation after we receive proof of death acceptable to us and the
28
<PAGE>
payment request in good order. Such value will be reduced by any payments made
after the date of death.
Taxation. To avoid certain tax penalties, you or your beneficiary must meet the
distribution rules imposed by the Tax Code. Additionally, when selecting an
income phase payment option, the Tax Code requires that your expected payments
will not exceed certain durations. See "Taxation" for additional information.
Income Phase Payment Options
The following table lists the income phase payment options and accompanying
death benefits available during the income phase. We may offer additional
income phase payment options under the contract from time to time.
Once income phase payments begin, the income phase payment option selected may
not be changed.
Terms to Understand:
Annuitant(s): The person(s) on whose life expectancy(ies) the income phase
payments are based.
29
<PAGE>
Beneficiary(ies): The person(s) or entity(ies) entitled to receive a death
benefit under the contract.
<TABLE>
<S>
- -----------------------------------------------------------------------------------------------------------------------
Lifetime Payment Options
- -----------------------------------------------------------------------------------------------------------------------
<S> <C>
Length of Payments: For as long as the annuitant lives. It is possible that only one payment will be
made if the annuitant dies prior to the second payment's due date.
Life Income Death Benefit--None: All payments end upon the annuitant's death.
- -----------------------------------------------------------------------------------------------------------------------
Length of Payments: For as long as the annuitant lives, with payments guaranteed for your choice
of 5, 10, 15 or 20 years or as otherwise specified in the contract.
Life Income-- Death Benefit--Payment to the Beneficiary: If the annuitant dies before we have made all the
Guaranteed guaranteed payments, we will continue to pay the beneficiary the remaining payments, unless the
Payments beneficiary elects to receive a lump-sum payment equal to the present value of the remaining
guaranteed payments.
- -----------------------------------------------------------------------------------------------------------------------
Length of Payments: For as long as either annuitant lives. It is possible that only one payment will
be made if both annuitants die before the second payment's due date.
Continuing Payments: When you select this option you choose for either:
(a) 100%, 662/3% or 50% of the payment to continue to the surviving annuitant after the first
Life Income-- death; or
Two Lives (b) 100% of the payment to continue to the annuitant on the second annuitant's death, and 50%
of the payment will continue to the second annuitant on the annuitant's death.
Death Benefit--None: All payments end upon the deaths of both annuitants.
- -----------------------------------------------------------------------------------------------------------------------
Length of Payments: For as long as either annuitant lives, with payments guaranteed for ten or
more years as specified in the contract.
Continuing Payments: 100% of the payment to continue to the surviving annuitant after the first
Life Income-- death.
Two Lives-- Death Benefit--Payment to the Beneficiary: If both annuitants die before the guaranteed
Guaranteed payments have all been paid, we will continue to pay the beneficiary the remaining payments,
Payments unless the beneficiary elects to receive a lump-sum payment equal to the present value of the
remaining guaranteed payments.
- -----------------------------------------------------------------------------------------------------------------------
Nonlifetime Payment Option
- -----------------------------------------------------------------------------------------------------------------------
Length of Payments: You may select payments for 3 through 30 years under 1992 contracts or 5
through 30 years under 1994 contracts. In certain cases a lump-sum payment may be requested at
any time (see below).
Nonlifetime-- Death Benefit--Payment to the Beneficiary: If the annuitant dies before we make all the
Guaranteed guaranteed payments, we will continue to pay the beneficiary the remaining payments, unless the
Payments beneficiary elects to receive a lump-sum payment equal to the present value of the remaining
guaranteed payments. We will not impose any early withdrawal charge.
- -----------------------------------------------------------------------------------------------------------------------
Lump-Sum Payments: If the "Nonlifetime--Guaranteed Payments" option is elected with variable
payments, you may request at any time that all or a portion of the present value of the remaining payments be
paid in one lump sum. A lump sum elected before five years (for 1994 contracts) or three years (for 1992 contracts)
of payments have been completed will be treated as a withdrawal during the accumulation phase and we will charge
any applicable early withdrawal charge. See "Fees--Early Withdrawal Charge."
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
Calculation of Lump-Sum Payments. If a lump-sum payment is available to a
beneficiary or to you under the income phase payment options listed in the
table below, the rate we use to calculate the present value of the remaining
guaranteed payments is the same rate we use to calculate the income payments
(i.e., the actual fixed rate used for the fixed payments, or the 3 1/2% or 5%
assumed net investment rate for variable payments.)
30
<PAGE>
[sidebar]
In This Section
> Introduction
> Taxation of Gains Prior to Distribution
> Contract Type
> Withdrawals and Other Distributions
> 10% Penalty Tax
> Withholding for Federal Income Tax Liability
> Minimum Distribution Requirements
> Assignment or Transfer of Contracts
> Taxation of the Company
When consulting a tax adviser, be certain that he or she has expertise in the
Tax Code sections applicable to your tax concerns.
[end sidebar]
Taxation
- --------------------------------------------------------------------------------
Introduction
This section discusses our understanding of current federal income tax laws
affecting the contract. You should keep the following in mind when reading it:
> Your tax position (or the tax position of the beneficiary, as applicable)
determines federal taxation of amounts held or paid out under the contract;
> Tax laws change. It is possible that a change in the future could affect
contracts issued in the past;
> This section addresses federal income tax rules and does not discuss federal
estate and gift tax implications, state and local taxes or any other tax
provisions; and
> We do not make any guarantee about the tax treatment of the contract or any
transactions involving the contract.
We do not intend this information to be tax advice. For advice about the
effect of federal income taxes or any other taxes on amounts held or paid out
under the contract, consult a tax adviser.
Taxation of Gains Prior to Distribution
You generally will not pay taxes on any earnings from the annuity contract
described in this prospectus until they are withdrawn. Tax qualified retirement
arrangements under Tax Code sections 408(b) and 408A also generally defer
payment of taxes until they are withdrawn. (See "Taxation of Withdrawals and
Other Distributions" later in this "Taxation" section for a discussion of how
distributions under the various types of arrangements are taxed.) Because you
are considering an annuity for your IRA, you should know that the annuity
contract does not provide any additional tax deferral of earnings beyond the
tax deferral provided by other types of IRAs. However, annuities do provide
other features and benefits which may be valuable to you. You should discuss
your decision with your financial representative.
Additionally, although earnings under the contract are generally not taxed
until withdrawn, the Internal Revenue Service (IRS) has stated in published
rulings that a variable contract owner will be considered the owner of separate
account assets if the contract owner possesses incidents of investment control
over the assets. In these circumstances, income and gains from the separate
account assets would be currently includible in the variable contract owner's
gross income. The Treasury announced that it will issue guidance regarding the
extent to which owners could direct their investments among subaccounts without
being treated as owners of the underlying assets of the separate account. It is
possible that the Treasury's position, when announced, may adversely affect the
tax treatment of existing contracts. The Company therefore reserves the right
to modify the contract as necessary to attempt to prevent the contract holder
from being considered the federal tax owner of a pro rata share of the assets
of the separate account.
Contract Type
The contract is designed for use with certain retirement arrangements that
qualify under Tax Code sections 408(b), 408(k) or 408A. Tax Code section 408(b)
permits eligible individuals to contribute to a traditional IRA on a
31
<PAGE>
pre-tax (deductible) basis. Employers may establish SEP plans under Tax Code
section 408(k) and contribute to a traditional IRA owned by the employee. Tax
Code section 408A permits eligible individuals to contribute to a Roth IRA on
an after-tax (nondeductible) basis.
The Contract. You are responsible for determining that contributions,
distributions and other transactions satisfy applicable laws. Legal counsel and
a tax adviser should be consulted regarding the suitability of the contract. If
the contract is purchased in conjunction with a retirement plan, the plan is
not a part of the contract and we are not bound by the plan's terms or
conditions.
Withdrawals and Other Distributions
Certain tax rules apply to distributions from the contract. A distribution is
any amount taken from the contract including withdrawals, income phase
payments, rollovers, exchanges and death benefit proceeds.
We report the taxable portion of all distributions to the IRS.
408(b) IRAs. All distributions from a traditional IRA are taxed as received
unless either one of the following is true:
> The distribution is rolled over to another traditional IRA or, if the IRA
contains only amounts previously rolled over from a 408(a), 401(k), or 403(b)
plan, the distribution is transferred to another plan of the same type; or
> You made after-tax contributions to the plan. In this case, the distribution
will be taxed according to rules detailed in the Tax Code.
408A Roth IRAs. A qualified distribution from a Roth IRA is not taxed when it
is received. A qualified distribution is a distribution:
> Made after the five-taxable year period beginning with the first taxable year
for which a contribution was made; and
> Made after you attain age 59 1/2, die, become disabled as defined in the Tax
Code, or for a qualified first-time home purchase.
If a distribution is not qualified, it will be taxable to the extent of the
accumulated earnings. A partial distribution will first be treated as a return
of contributions which is not taxable and then as taxable accumulated earnings.
Taxation of Death Benefit Proceeds. In general, payments received by your
beneficiaries after your death are taxed in the same manner as if you had
received those payments.
10% Penalty Tax
Under certain circumstances, the Tax Code may impose a 10% penalty tax on the
taxable portion of any distribution from a 408(b) or 408A arrangement.
The 10% penalty tax applies to the taxable portion of a distribution unless
certain exceptions apply, including one or more of the following:
> You have attained age 59 1/2;
> You have become disabled as defined in the Tax Code;
> You have died;
> The distribution is rolled over in accordance with the Tax Code;
32
<PAGE>
> The distribution is made in substantially equal periodic payments (at least
annually) over your life or life expectancy or the joint lives or joint life
expectancies of you and your beneficiary;
> The distribution equals unreimbursed medical expenses that qualify for a
deduction as specified in the Tax Code;
> The distribution is used to pay for health insurance premiums for certain
unemployed individuals;
> The amount withdrawn is for a qualified first-time home purchase; or
> The amount withdrawn is for higher education expenses.
These exceptions also apply to a distribution from a Roth IRA that is not a
qualified distribution or a rollover to a Roth IRA that is not a qualified
rollover contribution.
Withholding for Federal Income Tax Liability
Any distributions under the contract are generally subject to withholding.
Federal income tax liability rates vary according to the type of distribution
and the recipient's tax status. Generally, you or your beneficiary may elect
not to have tax withheld from distributions.
Non-resident Aliens. If you or your beneficiary are a non-resident alien, then
any withholding is governed by Tax Code section 1441 based on the individual's
citizenship, the country of domicile and treaty status.
Minimum Distribution Requirements
To avoid certain tax penalties, you and any beneficiary must meet the minimum
distribution requirements imposed by the Tax Code. The requirements do not
apply to Roth IRA contracts except with regard to death benefits. These rules
may dictate one or more of the following:
> Start date for distributions;
> The time period in which all amounts in your account(s) must be distributed;
or
> Distribution amounts.
Start Date. Generally, you must begin receiving distributions from a
traditional IRA by April 1 of the calendar year following the calendar year in
which you attain age 701/2.
Time Period. We must pay out distributions from the contract over one of the
following time periods:
> Over your life or the joint lives of you and your beneficiary; or
> Over a period not greater than your life expectancy or the joint life
expectancies of you and your beneficiary.
50% Excise Tax. If you fail to receive the minimum required distribution for
any tax year, a 50% excise tax is imposed on the required amount that was not
distributed.
Minimum Distribution of Death Benefit Proceeds. The following applies to 408(b)
and 408A plans. Different distribution requirements apply if your death occurs:
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> After you begin receiving minimum distributions under the contract; or
> Before you begin receiving such distributions.
If your death occurs after you begin receiving minimum distributions under the
contract, distributions must be made at least as rapidly as under the method in
effect at the time of your death. Code section 401(a)(9) provides specific
rules for calculating the minimum required distributions at your death. The
rules differ, depending on:
> Whether your minimum required distribution was calculated each year based on
your single life expectancy or the joint life expectancies of you and your
beneficiary; and
> Whether life expectancy was recalculated.
The rules are complex and any beneficiary should consult with a tax adviser
before electing the method of calculation to satisfy the minimum distribution
requirements.
If your death occurs before you begin receiving minimum distributions under the
contract, your entire balance must be distributed by December 31 of the
calendar year containing the fifth anniversary of the date of your death. For
example, if you die on September 1, 2000, your entire balance must be
distributed to the beneficiary by December 31, 2005. However, if the
distributions begin by December 31 of the calendar year following the calendar
year of your death, then payments may be made over either of the following
time-frames:
> Over the life of the beneficiary; or
> Over a period not extending beyond the life expectancy of the beneficiary.
Start Dates for Spousal Beneficiaries. If the beneficiary is your spouse,
distributions must begin on or before the later of the following:
> December 31 of the calendar year following the calendar year of your death; or
> December 31 of the calendar year in which you would have attained age 701/2.
Special Rule for IRA Spousal Beneficiaries. In lieu of taking a distribution
under these rules, a spousal beneficiary may elect to treat the account as his
or her own IRA and defer taking a distribution until his or her age 701/2. The
surviving spouse is deemed to have made such an election if the surviving
spouse makes a rollover to or from the account or fails to take a distribution
within the required time period.
Assignment or Transfer of Contracts
Adverse tax consequences may result if you assign or transfer your interest in
the contract to persons other than your spouse incident to a divorce. Anyone
contemplating such an assignment or transfer should contact a qualified tax
adviser regarding the potential tax effects of such a transaction.
Taxation of the Company
We are taxed as a life insurance company under the Tax Code. Variable Annuity
Account C is not a separate entity from us. Therefore, it is not taxed
separately as a "regulated investment company," but is taxed as part of the
Company.
We automatically apply investment income and capital gains attributable to the
separate account to increase reserves under the contracts. Because of this,
under existing federal tax law we believe that any such income and gains will
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not be taxed to the extent that such income and gains are applied to increase
reserves under the contracts. In addition, any foreign tax credits attributable
to the separate account will be first used to reduce any income taxes imposed
on the separate account before being used by the Company.
In summary, we do not expect that we will incur any federal income tax
liability attributable to the separate account and we do not intend to make any
provision for such taxes. However, changes in federal tax laws and/or their
interpretation may result in our being taxed on income or gains attributable to
the separate account. In this case, we may impose a charge against the separate
account (with respect to some or all of the contracts) to set aside provisions
to pay such taxes. We may deduct this amount from the separate account,
including from your account value invested in the subaccounts.
Other Topics
- --------------------------------------------------------------------------------
The Company
We issue the contract described in this prospectus and are responsible for
providing each contract's insurance and annuity benefits.
We are a stock life insurance company organized under the insurance laws of the
State of Connecticut in 1976 and an indirect wholly-owned subsidiary of Aetna
Inc. Through a merger, our operations include the business of Aetna Variable
Annuity Life Insurance Company (formerly known as Participating Annuity Life
Insurance Company, an Arkansas life insurance company organized in 1954).
We are engaged in the business of issuing life insurance and annuities. Our
principal executive offices are located at:
151 Farmington Avenue
Hartford Connecticut 06156
Variable Annuity Account C
We established Variable Annuity Account C (the separate account) in 1976 as a
segregated asset account to fund our variable annuity contracts. The separate
account is registered as a unit investment trust under the Investment Company
Act of 1940. It also meets the definition of "separate account" under the
federal securities laws.
The separate account is divided into subaccounts. The subaccounts invest
directly in shares of a pre-assigned fund.
Although we hold title to the assets of the separate account, such assets are
not chargeable with the liabilities of any other business that we conduct.
Income, gains or losses of the separate account are credited to or charged
against the assets of the separate account without regard to other income,
gains or losses of the Company. All obligations arising under the contracts are
obligations of the Company.
Contract Distribution
We serve as the principal underwriter for the securities sold by this
prospectus. We are registered as a broker-dealer with the Securities and
Exchange
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Commission and we are a member of the National Association of Securities
Dealers, Inc. (NASD).
As principal underwriter, we will enter into arrangements with one or more
registered broker-dealers, including at least one affiliate of the Company, to
offer and sell the contract described in this prospectus. We call these
entities "distributors."
We and one or more of our affiliates may also sell the contract directly. All
persons offering and selling the contract must be registered representatives of
the distributors and must also be licensed as insurance agents to sell variable
annuity contracts. These registered representatives may also provide services
to contract holders in connection with their contract.
Payment of Commissions. Persons offering and selling the contracts may receive
commissions in connection with the sale of the contract. The maximum percentage
amount that the Company will ever pay as commission with respect to any given
purchase payment is with respect to those made during the first year of
purchase payments under a contract. The percentage amount will range from 2% to
4% of those purchase payments. The Company may also pay renewal commissions on
purchase payments made after the first year and service fees. The average of
all payments made by the Company is estimated to equal approximately 3% of the
total purchase payments made over the life of an average contract. In addition,
some sales personnel may receive various types of non-cash compensation as
special sales incentives, including trips and educational and/or business
seminars. However, any such compensation will be paid in accordance with NASD
rules. In addition, we may provide additional compensation to the Company's
supervisory and other management personnel if the overall amount of investments
in funds advised by the Company or its affiliates increases over time.
We may also reimburse the distributor for certain expenses. The name of the
distributor and the registered representative responsible for your contract are
set forth in your application. Commissions and sales related expenses are paid
by the Company and are not deducted from purchase payments.
Payment Delay or Suspension
We reserve the right to suspend or postpone the date of any payment of benefits
or values under the following circumstances:
> On any valuation date when the New York Stock Exchange is closed (except
customary holidays or weekends or when trading on the New York Stock Exchange
is restricted;
> When an emergency exists as determined by the SEC so that disposal of the
securities held in the subaccounts is not reasonably practicable or it is not
reasonably practicable to determine the value of the subaccount's assets; or
> During any other periods the SEC permits for the protection of investors.
The conditions under which restricted trading or an emergency exists shall be
determined by the rules and regulations of the SEC.
Performance Reporting
We may advertise different types of historical performance for the subaccounts
including:
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> Standardized average annual total returns; and
> Non-standardized average annual total returns.
Standardized Average Annual Total Returns. We calculate standardized average
annual total returns according to a formula prescribed by the SEC. This shows
the percentage return applicable to $1,000 invested in the subaccount over the
most recent one, five and ten-year periods. If the investment option was not
available for the full period, we give a history from the date money was first
received in that option under the separate account. Standardized average annual
total returns reflect deduction of all recurring charges during each period
(i.e., maintenance fees (if any), mortality and expense risk charges,
administrative expense charges (if any) and any applicable early withdrawal
charges).
Non-Standardized Average Annual Total Returns. We calculate non-standardized
average annual total returns in a similar manner as that stated above, except
we do not include the deduction of any applicable early withdrawal charge. Some
non-standardized returns may also exclude the effect of a maintenance fee. If
we reflected these charges in the calculation, they would decrease the level of
performance reflected by the calculation. Non-standardized returns may also
include performance from the fund's inception date, if that date is earlier
than the one we use for standardized returns.
We may also advertise certain ratings, rankings or other information related to
the Company, the subaccounts or the funds. For further details regarding
performance reporting and advertising, you may request a Statement of
Additional Information (SAI) by calling us at the number listed in the
"Contract Overview--Questions: Contacting the Company" section.
Voting Rights
Each of the subaccounts holds shares in a fund and each is entitled to vote at
regular and special meetings of that fund. Under our current view of applicable
law, we will vote the shares for each subaccount as instructed by persons
having a voting interest in the subaccount. We will vote shares for which
instructions have not been received in the same proportion as those for which
we received instructions. Each person who has a voting interest in the separate
account will receive periodic reports relating to the funds in which he or she
has an interest, as well as any proxy materials and a form on which to give
voting instructions. Voting instructions will be solicited by a written
communication at least 14 days before the meeting.
The number of votes (including fractional votes) you are entitled to direct
will be determined as of the record date set by any fund you invest in through
the subaccounts.
> During the accumulation phase the number of votes is equal to the portion of
your account value invested in the fund, divided by the net asset value of one
share of that fund.
> During the income phase the number of votes is equal to the portion of
reserves set aside for the contract's share of the fund, divided by the net
asset value of one share of that fund.
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Contract Modification
We may modify the contract when we deem an amendment appropriate by providing
you written notice 30 days before the effective date of the change. The most
likely reason for a change to the contract would be to ensure compliance with
applicable law. Certain changes will require the approval of appropriate state
or federal regulatory authorities.
Involuntary Terminations
Subject to state regulatory approval, following the completion of two contract
years in which no purchase payments have been made, the Company reserves the
right to pay your full account value to you if that value is less than $1,500,
provided the Company gives you 90 days written notice. Such account value paid
may not utilize the reinvestment privilege. The full account value payable to
you will not be reduced by any early withdrawal charge, and amounts withdrawn
from the Guaranteed Interest Account, if applicable, will not receive a reduced
rate of interest. Amounts withdrawn from the Guaranteed Interest Account will
receive a guaranteed effective annual yield to the date of contract termination
as if the amounts had remained in the Guaranteed Interest Account until the end
of a guaranteed term, see Appendix I. Amounts withdrawn from the Guaranteed
Accumulation Account will receive the greater of (a) the aggregate MVA amount
from all guaranteed terms prior to the end of those terms; or (b) the
applicable portion of your account value in the Guaranteed Accumulation Account.
This provision does not apply if you have initiated income phase payments.
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. 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
Shaner Complaint seeks unspecified compensatory damages from the Company and
unnamed affiliates of the Company. The Shaner Complaint claims that the
Company's sale of deferred annuity products for use as investments in
tax-deferred contributory retirement plans (e.g., IRAs) is improper. 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.
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Contents of the Statement
of Additional Information
- --------------------------------------------------------------------------------
The Statement of Additional Information (SAI) contains more specific
information on the separate account and the contract, as well as the financial
statements of the separate account and the Company. A list of the contents of
the SAI is set forth below:
General Information and History .............................. 2
Variable Annuity Account C ................................... 2
Offering and Purchase of Contracts ........................... 3
Performance Data ............................................. 3
Income Phase Payments ........................................ 11
Sales Material and Advertising ............................... 12
Independent Auditors ......................................... 13
Financial Statements of the Separate Account .................S-1
Financial Statements of Aetna Life Insurance and Annuity
Company and Subsidiaries .....................................F-1
You may request an SAI by calling the Company at the number listed in "Contract
Overview--Questions: Contacting the Company."
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Appendix I
Guaranteed Interest Account
(availability subject to regulatory approval)
- --------------------------------------------------------------------------------
The Guaranteed Interest Account (GIA) is an investment option available during
the accumulation phase. Amounts allocated to GIA are held in either the
Company's general account or a nonunitized separate account of the Company, as
described below.
General Disclosure. Interests in GIA have not been registered with the SEC in
reliance on exemptions under the Securities Act of 1933, as amended. Disclosure
in this prospectus regarding GIA, may, however, be subject to certain generally
applicable provisions of the federal securities laws relating to the accuracy
and completeness of such statements. Disclosure in this appendix regarding GIA
has not been reviewed by the SEC.
Overview. Amounts that you invest in GIA will earn a guaranteed interest rate if
amounts are left in GIA for the specified period of time. Interest is credited
daily at a rate that will provide the guaranteed effective yield by the end of
the stated period of time. If amounts are withdrawn or transferred before the
end of a stated period of time (except if pursuant to the Company's termination
of the contract, see "Other Topics - Involuntary Terminations"), we will pay a
reduced rate of interest, but never less than the minimum stated in the
contract.
During a stated period, you may apply all or a portion of your account value to
any or all available guaranteed terms within the short-term and long-term
classifications.
>Short-Term Classification--Three years or less
>Long-Term Classification--Ten years or less, but greater than three years
As a guaranteed term matures, assets accumulating under GIA may be (a)
transferred to a new guaranteed term, (b) transferred to the other available
investment options, or (c) withdrawn. Amounts withdrawn may be subject to an
early withdrawal charge and/or tax liabilities.
Allocations to the Company's General Account. Amounts allocated to short-term
classifications of GIA prior to September 1, 1998 were deposited into the
Company's general account supporting insurance and annuity obligations. These
amounts will remain invested in the general account until the end of their
guaranteed terms. On or after September 1, 1998, the only new amounts allocated
to the Company's general account are amounts allocated or rolled over to
short-term classifications of GIA under contracts that had not yet received the
necessary state approval to deposit those amounts in the Company's separate
account. The assets of the Company's general account are chargeable with
liabilities arising out of any other business of the Company.
Allocations to a Nonunitized Separate Account of the Company. Amounts allocated
to long-term classifications of GIA, and except as noted above, amounts
allocated to or rolled over to short-term classifications of GIA on or after
September 1, 1998, will be deposited in a nonunitized separate account. To the
extent provided in the contract, the assets of the separate account are not
chargeable with liabilities resulting from any other business of the Company.
Income, gains and losses of the separate account are credited to or charged
against the separate account without regard to other income, gains or losses of
the Company.
Mortality and Expense Risk Charge. We make no deductions from the credited
interest rate for mortality and expense risks; these risks are considered in
determining the credited interest rate.
Transfers. Transfers are permitted from guaranteed terms of one classification
to available guaranteed terms of another classification. We will apply a
reduced rate of interest to amounts transferred prior to the end of a
guaranteed term. Transfers of GIA values due to a maturity are not subject to a
reduced rate of interest.
Income Phase. By notifying us at least 30 days before income phase payments
begin, you may elect to have amounts that have been accumulating under GIA
transferred to one or more of the subaccounts currently available during the
income phase to provide variable income phase payments. GIA cannot be used as
an investment option during the income phase.
Reinvestment Privilege. Any amounts reinvested in GIA will be applied to the
current deposit period. Amounts are proportionately reinvested to the
classifications in the same manner as they were allocated before the
withdrawal.
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Appendix II
Fixed Account
(availability subject to regulatory approval)
- --------------------------------------------------------------------------------
General Disclosure.
> The Fixed Account is an investment option available during the accumulation
phase under the contracts.
> Amounts allocated to the Fixed Account are held in the Company's general
account which supports insurance and annuity obligations.
> Interests in the Fixed Account have not been registered with the SEC in
reliance on exemptions under the Securities Act of 1933, as amended.
> Disclosure in this prospectus regarding the Fixed Account may be subject to
certain generally applicable provisions of the federal securities laws
relating to the accuracy and completeness of the statements.
> Disclosure in this appendix regarding the Fixed Account has not been reviewed
by the SEC.
> Additional information about this option may be found in the contract.
Interest Rates.
> The Fixed Account guarantees that amounts allocated to this option will earn
the minimum interest rate specified in the contract. We may credit a higher
interest rate from time to time, but the rate we credit will never fall below
the guaranteed minimum specified in the contract. Amounts applied to the Fixed
Account will earn the interest rate in effect at the time money is applied.
Amounts in the Fixed Account will reflect a compound interest rate as credited
by us. The rate we quote is an annual effective yield. Interest rate
guarantees are based on the Company's claims-paying ability.
> Our determination of credited interest rates reflects a number of factors,
including mortality and expense risks, interest rate guarantees, the
investment income earned on invested assets and the amortization of any
capital gains and/or losses realized on the sale of invested assets. Under
this option, we assume the risk of investment gain or loss by guaranteeing the
amounts you allocate to this option and promising a minimum interest rate and
income phase payment.
Withdrawals. Under certain emergency conditions, we may defer payment of any
withdrawal for up to six months or as provided by federal law. Additionally, if
allowed by state law, we may pay withdrawals in equal payments with interest,
over a period not to exceed 60 months when:
(a) The Fixed Account withdrawal value exceeds $100,000 ($250,000 for 1992
contracts); or
(b) The sum of the current Fixed Account withdrawal and total of all Fixed
Account withdrawals within the past 12 calendar months exceeds 20% of the
amount in the Fixed Account on the day before the current withdrawal.
During the payment period, the interest rate credited to amounts held in the
Fixed Account will be determined in the manner set forth in the contract. In no
event will the interest rate be less than the guaranteed minimum stated in the
contract.
Charges. We do not make deductions from amounts in the Fixed Account to cover
mortality and expense risks. We consider these risks when determining the
credited rate. If you make a withdrawal from amounts in the Fixed Account, an
early withdrawal charge may apply. See "Fees."
Transfers. During the accumulation phase, you may transfer account dollars from
the Fixed Account to any other available investment option. We may vary the
dollar amount that you are allowed to transfer, but it will never be less than
10% of your account value held in the Fixed Account.
Additionally, your account value remaining in the Fixed Account may be
transferred in its entirety to any other investment option if one of the
following applies:
(a) Your account value in the Fixed Account is $2,000; or less
(b) You transferred the maximum amount allowed from the Fixed Account in the
last four consecutive calendar years and no additional payments have been
allocated to the Fixed Account during that same time period.
Income Phase. By notifying us at least 30 days before income phase payments
begin, you may elect to have amounts transferred to one or more of the
subaccounts available during the income phase to provide variable payments. The
Fixed Account is not available as an investment option during the income phase.
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Appendix III
Guaranteed Accumulation Account
(offered in New York only)
- --------------------------------------------------------------------------------
The Guaranteed Accumulation Account (GAA) is a fixed interest option that may
be available during the accumulation phase under the contracts. This appendix
is only a summary of certain facts pertaining to GAA. Review the GAA prospectus
before investing in this option.
General Disclosure. Amounts that you invest in GAA will earn a guaranteed
interest rate if amounts are left in GAA for the specified period of time. If
you withdraw or transfer those amounts before the specified period of time has
elapsed, we may apply a market value adjustment, which may be positive or
negative.
When you decide to invest money in GAA, you will want to contact your sales
representative or our Home Office to learn:
> The interest rate we will apply to the amounts that you invest in GAA. We
change this rate periodically, so be certain that you know what rate we
guarantee on the day your account dollars are invested into GAA.
> The period of time your account dollars need to remain in GAA in order to earn
that rate. You are required to leave your account dollars in GAA for a
specified period of time (guaranteed term), in order to earn the guaranteed
interest rate.
Deposit Periods. A deposit period is the time during which we offer a specific
interest rate if you deposit dollars for a certain guaranteed term. To have a
particular interest rate and guaranteed term apply to your account dollars, you
must invest them during the deposit period for which that rate and term are
offered.
Interest Rates. We guarantee different interest rates, depending upon when
account dollars are invested in GAA. The interest rate we guarantee is an
annual effective yield; that means that the rate reflects a full year's
interest. We credit interest daily at a rate that will provide the guaranteed
annual effective yield over one year. The guaranteed interest rate will never
be less than the rate stated in the contract. The interest rate guarantees are
based on the Company's claims-paying ability.
Fees and Other Deductions. If all or a portion of your account value in GAA is
withdrawn, you may incur the following:
> Market Value Adjustment (MVA)--as described in this appendix and in the GAA
prospectus;
> Tax Penalties and/or Tax Withholding. See "Taxation";
> Early Withdrawal Charge. See "Fees"; or
> Maintenance Fee. See "Fees".
We do not make deductions from amounts in GAA to cover mortality and expense
risks. Rather, we consider these risks when determining the credited rate.
Market Value Adjustment (MVA). If you withdraw or transfer your account value
from GAA before the guaranteed term is completed, an MVA may apply. The MVA
reflects the change in the value of the investment due to changes in interest
rates since the date of deposit. The MVA may be positive or negative.
> If interest rates at the time of withdrawal have increased since the date of
deposit, the value of the investment decreases and the MVA will be negative.
This could result in your receiving less than the amount you paid into GAA.
> If interest rates at the time of withdrawal have decreased since the date of
deposit, the value of the investment increases and the MVA will be positive.
Guaranteed Terms. The guaranteed term is the period of time account dollars must
be left in GAA in order to earn the guaranteed interest rate. We offer different
guaranteed terms at different times. Check with your sales representative or our
Home Office to learn what terms are currently being offered.
continued >
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In general we offer the following guaranteed terms:
> Short Term--three years or fewer; and
> Long Term--ten years or less, but greater than three years.
At the end of a guaranteed term you may:
> Transfer dollars to a new guaranteed term;
> Transfer dollars to other available investment options; or
> Withdraw dollars.
Deductions may apply to withdrawals. See "Fees and Other Deductions" in this
appendix.
Transfers. Generally, account dollars invested in GAA may be transferred among
guaranteed terms offered through GAA, and/or to other investment options
offered through the contract. However, transfers may not be made during the
deposit period in which your account dollars are invested in GAA or for 90 days
after the close of that deposit period. We will apply an MVA to transfers made
before the end of a guaranteed term.
The Income Phase. GAA can not be used as an investment option during the income
phase, however, by making a request in good order to our Home Office at least
30 days in advance, you may elect to transfer your GAA account dollars to any
of the subaccounts available during the income phase.
Reinvestment Privilege. If amounts are withdrawn from GAA and then reinvested
in GAA, we will apply the reinvested amount to the current deposit period. This
means that the guaranteed annual interest rate and guaranteed terms available
on the date of reinvestment will apply. Amounts will be reinvested
proportionately in the same way as they were allocated before withdrawal. Your
account value will not be credited for any negative MVA that was deducted at
the time of withdrawal.
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Appendix IV
Description of Underlying Funds
- --------------------------------------------------------------------------------
The investment results of the mutual funds (funds) are likely to differ
significantly and there is no assurance that any of the funds will achieve
their respective investment objectives. Shares of the funds will rise and fall
in value and you could lose money by investing in the funds. Investments in the
funds are not bank deposits and are not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Except as noted,
all funds are diversified, as defined under the Investment Company Act of 1940.
Aetna Balanced VP, Inc.
Investment Objective
Seeks to maximize investment return, consistent with reasonable safety of
principal by investing in a diversified portfolio of one or more of the
following asset classes: stocks, bonds, and cash equivalents, based on the
investment adviser's judgment of which of those sectors or mix thereof offers
the best investment prospects.
Policies
Under normal market conditions, allocates assets among the following asset
classes: equities such as common and preferred stocks; and debt, such as bonds,
mortgage-related and other asset-backed securities, U.S. Government securities,
and money market instruments. Typically maintains approximately 60% of total
assets in equities and 40% of total assets in debt (including money market
instruments), although those percentages may vary from time to time.
Risks
Principal risks are those generally attributable to stock and bond investing.
The success of the fund's strategy depends on the investment adviser's skill in
allocating fund assets between equities and debt and in choosing investments
within those categories. Risks attributable to stock investing include sudden
and unpredictable drops in the value of the market as a whole and periods of
lackluster or negative performance. Stocks of smaller companies tend to be less
liquid and more volatile than stocks of larger companies and can be
particularly sensitive to expected changes in interest rates, borrowing costs
and earnings. Fixed-income investments are subject to the risk that interest
rates will rise, which generally causes bond prices to fall. Also, economic and
market conditions may cause issuers to default or go bankrupt. Values of
high-yield bonds are even more sensitive to economic and market conditions than
other bonds. Prices of mortgage-related securities, in addition to being
sensitive to changes in interest rates, also are sensitive to changes in the
prepayment patterns on the underlying instruments.
Investment Adviser: Aeltus Investment Management, Inc.
Aetna Income Shares d/b/a Aetna Bond VP
Investment Objective
Seeks to maximize total return, consistent with reasonable risk, through
investments in a diversified portfolio consisting primarily of debt securities.
It is anticipated that capital appreciation and investment income will both be
major factors in achieving total return.
Policies
Under normal market conditions, invests at least 65% of total assets in
high-grade corporate bonds, mortgage-related and other asset-backed securities,
and securities issued or guaranteed by the U.S. government, its agencies or
instrumentalities. High-grade securities are rated at least A by Standard &
Poor's Corporation (S&P) or Moody's Investors Service, Inc. (Moody's), or if
unrated, considered by the investment adviser to be of comparable quality. May
also invest up to 15% of total assets in high-yield bonds, and up to 25% of
total assets in foreign debt securities.
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Risks
Principal risks are those generally attributable to debt investing, including
increases in interest rates and loss of principal. Generally, when interest
rates rise, bond prices fall. Bonds with longer maturities tend to be more
sensitive to changes in interest rates. For all bonds there is a risk that the
issuer will default. High-yield bonds generally are more susceptible to the
risk of default than higher rated bonds. Prices of mortgage-related securities,
in addition to being sensitive to changes in interest rates, also are sensitive
to changes in the prepayment patterns on the underlying instruments. Foreign
securities have additional risks. Some foreign securities tend to be less
liquid and more volatile than their U.S. counterparts. In addition, accounting
standards and market regulations tend to be less standardized in certain
foreign countries. These risks are usually higher for securities of companies
in emerging markets. Securities of foreign companies may be denominated in
foreign currency. Exchange rate fluctuations may reduce or eliminate gains or
create losses.
Investment Adviser: Aeltus Investment Management, Inc.
Aetna Variable Fund d/b/a Aetna Growth and Income VP
Investment Objective
Seeks to maximize total return through investments in a diversified portfolio
of common stocks and securities convertible into common stock. It is
anticipated that capital appreciation and investment income will both be major
factors in achieving total return.
Policies
Under normal market conditions, invests at least 65% of total assets in common
stocks that the investment adviser believes have significant potential for
capital appreciation or income growth. Tends to emphasize stocks of larger
companies. Also invests assets across other asset classes (including stocks of
small and medium-sized companies, international stock, real estate securities
and fixed income securities). May invest principally in common stocks having
significant potential for capital appreciation, or may purchase common stocks
principally for their income potential through dividends and option writing, or
may acquire securities having a mix of these characteristics.
Risks
Principal risks are those generally attributable to stock investing. These
risks include sudden and unpredictable drops in the value of the market as a
whole and periods of lackluster or negative performance. Although the
investment adviser emphasizes large cap stocks, to the extent the Fund is
diversified across asset classes, it may not perform as well as less
diversified funds when large cap stocks are in favor. Additionally, stocks of
medium-sized and smaller companies tend to be more volatile and less liquid
than stocks of larger companies.
Investment Adviser: Aeltus Investment Management, Inc.
Aetna Variable Encore Fund d/b/a Aetna Money Market VP
Investment Objective
Seeks to provide high current return, consistent with preservation of capital
and liquidity, through investment in high-quality money market instruments.
Policies
Invests only in a diversified portfolio of high-quality fixed income securities
denominated in U.S. dollars, with short remaining maturities. These securities
include U.S. Government securities, such as U.S. Treasury bills and securities
issued or sponsored by U.S. government agencies. They also may include
corporate debt securities, commercial paper, asset-backed securities and
certain obligations of U.S. and foreign banks, each of which must be highly
rated by independent rating agencies or, if unrated, considered by the
investment adviser to be of comparable quality. Maintains a dollar-weighted
average portfolio maturity of 90 days or less.
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Risks
It is possible to lose money by investing in the fund. There is no guaranty the
fund will achieve its investment objective. An investment in the fund is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
A weak economy, strong equity markets and changes by the Federal Reserve in its
monetary policies all could affect short-term interest rates and therefore the
value and yield of the fund's shares.
Investment Adviser: Aeltus Investment Management, Inc.
Aetna Generation Portfolios, Inc.--Aetna Ascent VP
Investment Objective
Seeks to provide capital appreciation.
Policies
Managed for investors seeking capital appreciation who generally have an
investment horizon exceeding 15 years and who have a high level of risk
tolerance. Under normal market conditions, allocates assets among several
classes of equities, fixed-income securities, and money market instruments. The
investment adviser has instituted both a benchmark percentage allocation and a
fund level range allocation for each asset class. Asset allocation may vary
from the benchmark allocation (within the permissible range) based on the
investment adviser's ongoing evaluation of the expected returns and risks of
each asset class relative to other classes. May invest up to 15% of total
assets in high-yield bonds.
The benchmark portfolio is 80% equities and 20% fixed income under neutral
market conditions.
Risks
The success of the fund's strategy depends significantly on the investment
adviser's skill in choosing investments and in allocating assets among the
different investment classes. Principal risks are those generally attributable
to stock and bond investing. For stock investments, risks include sudden and
unpredictable drops in the value of the market as a whole and periods of
lackluster or negative performance. Stocks of smaller companies tend to be less
liquid and more volatile. Risks associated with real estate securities include
periodic declines in the value of real estate, generally, and declines in the
rents and other income generated by real estate. For bonds, generally, when
interest rates rise, bond prices fall. Economic and market conditions may cause
issuers to default or go bankrupt. Values of high-yield bonds are even more
sensitive to economic and market conditions than other bonds. Prices of
mortgage-related securities, in addition to being sensitive to changes in
interest rates, also are sensitive to changes in the prepayment patterns on the
underlying instruments. Foreign securities have additional risks. Some foreign
securities tend to be less liquid and more volatile than their U.S.
counterparts. In addition, accounting standards and market regulations tend to
be less standardized in certain foreign countries. These risks are usually
higher for securities of companies in emerging markets. Securities of foreign
companies may be denominated in foreign currency. Exchange rate fluctuations
may reduce or eliminate gains or create losses. Hedging strategies intended to
reduce this risk may not perform as expected.
Investment Adviser: Aeltus Investment Management, Inc.
Aetna Generation Portfolios, Inc.--Aetna Crossroads VP
Investment Objective
Seeks to provide total return (i.e., income and capital appreciation, both
realized and unrealized).
Policies
Managed for investors seeking a balance between income and capital appreciation
who generally have an investment horizon exceeding ten years and who have a
moderate level of risk tolerance. Under normal market conditions, allocates
assets among several classes of equities, fixed-income securities, and money
market instruments. The investment adviser has instituted both a benchmark
percentage allocation and a fund level
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range allocation for each asset class. Asset allocation may vary from the
benchmark allocation (within the permissible range) based on the investment
adviser's ongoing evaluation of the expected returns and risks of each asset
class relative to other classes. May invest up to 15% of total assets in
high-yield bonds.
The benchmark portfolio is 60% equities and 40% fixed income under neutral
market conditions.
Risks
The success of the fund's strategy depends significantly on the investment
adviser's skill in choosing investments and in allocating assets among the
different investment classes. Principal risks are those generally attributable
to stock and bond investing. For stock investments, risks include sudden and
unpredictable drops in the value of the market as a whole and periods of
lackluster or negative performance. Stocks of smaller companies tend to be less
liquid and more volatile. Risks associated with real estate securities include
periodic declines in the value of real estate, generally, and declines in the
rents and other income generated by real estate. For bonds, generally, when
interest rates rise, bond prices fall. Economic and market conditions may cause
issuers to default or go bankrupt. Values of high-yield bonds are even more
sensitive to economic and market conditions than other bonds. Prices of
mortgage-related securities, in addition to being sensitive to changes in
interest rates, also are sensitive to changes in the prepayment patterns on the
underlying instruments. Foreign securities have additional risks. Some foreign
securities tend to be less liquid and more volatile than their U.S.
counterparts. In addition, accounting standards and market regulations tend to
be less standardized in certain foreign countries. These risks are usually
higher for securities of companies in emerging markets. Securities of foreign
companies may be denominated in foreign currency. Exchange rate fluctuations
may reduce or eliminate gains or create losses. Hedging strategies intended to
reduce this risk may not perform as expected.
Investment Adviser: Aeltus Investment Management, Inc.
Aetna Generation Portfolios, Inc.--Aetna Legacy VP
Investment Objective
Seeks to provide total return consistent with preservation of capital.
Policies
Managed for investors primarily seeking total return consistent with capital
preservation who generally have an investment horizon exceeding five years and
who have a low level of risk tolerance. Under normal market conditions,
allocates assets among several classes of equities, fixed-income securities,
and money market instruments. The investment adviser has instituted both a
benchmark percentage allocation and a fund level range allocation for each
asset class. Asset allocation may vary from the benchmark allocation (within
the permissible range) based on the investment adviser's ongoing evaluation of
the expected returns and risks of each asset class relative to other classes.
May invest up to 15% of total assets in high-yield bonds.
The benchmark portfolio is 40% equities and 60% fixed income under neutral
market conditions.
Risks
The success of the fund's strategy depends significantly on the investment
adviser's skill in choosing investments and in allocating assets among the
different investment classes. Principal risks are those generally attributable
to stock and bond investing. For stock investments, risks include sudden and
unpredictable drops in the value of the market as a whole and periods of
lackluster or negative performance. Stocks of smaller companies tend to be less
liquid and more volatile. Risks associated with real estate securities include
periodic declines in the value of real estate, generally, and declines in the
rents and other income generated by real estate. For bonds, generally, when
interest rates rise, bond prices fall. Economic and market conditions may cause
issuers to default or go bankrupt. Values of high-yield bonds are even more
sensitive to economic and market conditions than other bonds. Prices of
mortgage-related securities, in addition to being sensitive to changes in
interest rates, also are sensitive to changes in the prepayment patterns on the
underlying instruments. Foreign securities have additional risks. Some foreign
securities tend to be less liquid and more volatile than their U.S.
counterparts. In addition, accounting standards and market regulations tend to
be less standardized in certain foreign countries. These risks are usually
higher for
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securities of companies in emerging markets. Securities of foreign companies
may be denominated in foreign currency. Exchange rate fluctuations may reduce
or eliminate gains or create losses. Hedging strategies intended to reduce this
risk may not perform as expected.
Investment Adviser: Aeltus Investment Management, Inc.
Aetna Variable Portfolios, Inc.--Aetna Growth VP
Investment Objective
Seeks growth of capital through investment in a diversified portfolio
consisting primarily of common stocks and securities convertible into common
stocks believed to offer growth potential.
Policies
Under normal market conditions, invests at least 65% of total assets in common
stocks and securities convertible into common stock. Tends to emphasize stocks
of larger companies, although may invest in companies of any size. Uses
internally developed quantitative computer models to evaluate the financial
characteristics of approximately 1,000 companies. The investment adviser
analyzes these characteristics in an attempt to identify companies it believes
have strong growth characteristics or demonstrate a positive trend in earnings
estimates, but whose full value is not reflected in the stock price. Focuses on
companies that the investment adviser believes have strong, sustainable and
improving earnings growth, and established market positions in a particular
industry.
Risks
Principal risks are those generally attributable to stock investing. They
include sudden and unpredictable drops in the value of the market as a whole
and periods of lackluster or negative performance. Growth-oriented stocks
typically sell at relatively high valuations as compared to other types of
stocks. If a growth stock does not exhibit the consistent level of growth
expected, its price may drop sharply. Historically, growth-oriented stocks have
been more volatile than value-oriented stocks.
Investment Adviser: Aeltus Investment Management, Inc.
Aetna Variable Portfolios, Inc.--Aetna High Yield VP
Investment Objective
Seeks high current income and growth of capital primarily through investment in
a diversified portfolio of fixed-income securities rated lower than BBB--by
Standard and Poor's Corporation or lower than Baa3 by Moody's Investors
Service, Inc.
Policies
Under normal market conditions, invests at least 65% of total assets in
high-yield bonds. High-yield bonds are bonds rated below investment grade in
terms of quality, and may include bonds of companies in default or bankruptcy.
The investment adviser looks to meet the investment objective and reduce
volatility by constructing a diversified portfolio consisting of securities
with varying maturities and credit ratings. The investment adviser, however,
attempts to look beyond credit ratings to select investments that it believes
offer opportunities for high income, growth and credit improvement. Uses a
quantitative process for evaluating the financial criteria of issuers, such as
cash flow and profitability. Evaluates other, less quantitative factors, such
as market share, strength of management and management's equity stake in the
company. May also invest up to 35% of its total assets in foreign securities.
Risks
For all bonds, there is a risk that an issuer will default. This risk is even
greater with high-yield bonds. Moreover, high-yield bonds, as a group, often
decline in value when the market anticipates or experiences a large number of
issuers defaulting or declaring bankruptcy. Performance may be affected by weak
equity markets, when issuers of high-yield bonds generally find it difficult to
reduce debt by replacing debt with equity. Generally, when interest rates rise,
bond prices fall, which may cause the value of securities to fall as well.
Foreign securities present
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additional risks. Some foreign securities tend to be less liquid and more
volatile than their U.S. counterparts. In addition, accounting standards and
market regulations tend to be less standardized in certain foreign countries.
Investment Adviser: Aeltus Investment Management, Inc.
Aetna Variable Portfolios, Inc.--Aetna Index Plus Large Cap VP
Investment Objective
Seeks to outperform the total return performance of the Standard & Poor's 500
Composite Index (S&P 500), while maintaining a market level of risk.
Policies
Invests at least 80% of net assets in stocks included in the S&P 500 (other
than Aetna Inc. common stock). The investment adviser attempts to achieve the
objective by overweighting those stocks in the S&P 500 that the investment
adviser believes will outperform the index, and underweighting (or avoiding
altogether) those stocks that the investment adviser believes will underperform
the index. In determining stock weightings, uses internally developed
quantitative computer models to evaluate various criteria, such as the
financial strength of each company and its potential for strong, sustained
earnings growth. At any one time, the fund's portfolio generally includes
approximately 400 of the stocks included in the S&P 500. Although the fund will
not hold all the stocks in the S&P 500, the investment adviser expects that
there will be a close correlation between the performance of the fund and that
of the S&P 500 in both rising and falling markets.
Risks
Principal risks are those generally attributable to stock investing. These
risks include sudden and unpredictable drops in the value of the market as a
whole and periods of lackluster or negative performance. The success of the
fund's strategy depends significantly on the investment adviser's skill in
determining which securities to overweight, underweight or avoid altogether.
Investment Adviser: Aeltus Investment Management, Inc.
Aetna Variable Portfolios, Inc.--Aetna Index Plus Mid Cap VP
Investment Objective
Seeks to outperform the total return performance of the Standard & Poor's
MidCap 400 Index (S&P 400), while maintaining a market level of risk.
Policies
Invests at least 80% of net assets in stocks included in the S&P 400. The S&P
400 is a stock market index comprised of common stocks of 400
mid-capitalization companies in the U.S. selected by S&P. The investment
adviser attempts to achieve the objective by overweighting those stocks in the
S&P 400 that the investment adviser believes will outperform the index, and
underweighting (or avoiding altogether) those stocks that the investment
adviser believes will underperform the index. In determining stock weightings,
uses internally developed quantitative computer models to evaluate various
criteria, such as the financial strength of each issuer and its potential for
strong, sustained earnings growth. Although the fund will not hold all the
stocks in the S&P 400, the investment adviser expects that there will be a
close correlation between the performance of the fund and that of the S&P 400
in both rising and falling markets.
Risks
Principal risks are those generally attributable to stock investing. These
risks include sudden and unpredictable drops in the value of the market as a
whole and periods of lackluster or negative performance. In addition, stocks of
medium sized companies tend to be more volatile and less liquid than stocks of
larger companies. The success of the fund's strategy depends significantly on
the investment adviser's skill in determining which securities to overweight,
underweight or avoid altogether.
Investment Adviser: Aeltus Investment Management, Inc.
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Aetna Variable Portfolios, Inc.--Aetna Index Plus Small Cap VP
Investment Objective
Seeks to outperform the total return performance of the Standard and Poor's
SmallCap 600 Index (S&P 600), while maintaining a market level of risk.
Policies
Invests at least 80% of net assets in stocks included in the S&P 600. The S&P
600 is a stock market index comprised of common stocks of 600
small-capitalization companies in the U.S. selected by S&P. The investment
adviser attempts to achieve the objective by overweighting those stocks in the
S&P 600 that the investment adviser believes will outperform the index, and
underweighting (or avoiding altogether) those stocks that the investment
adviser believes will underperform the index. In determining stock weightings,
uses internally developed quantitative computer models to evaluate various
criteria, such as the financial strength of each issuer and its potential for
strong, sustained earnings growth. Although the fund will not hold all the
stocks in the S&P 600, the investment adviser expects that there will be a
close correlation between the performance of the fund and that of the S&P 600
in both rising and falling markets.
Risks
Principal risks are those generally attributable to stock investing which
include sudden and unpredictable drops in the value of the market as a whole
and periods of lackluster or negative performance. Stocks of smaller companies
carry higher risks than stocks of larger companies because smaller companies
may lack the management experience, financial resources, product
diversification, and competitive strengths of larger companies. In many
instances, the frequency and volume of trading in small cap stocks are
substantially less than stocks of larger companies which may result in wider
price fluctuations. When selling a large quantity of a particular stock, the
fund may have to sell at a discount from quoted prices or may have to make a
series of small sales over an extended period of time due to the more limited
trading volume of smaller company stocks. Stocks of smaller companies tend to
be more volatile than stocks of larger companies and can be particularly
sensitive to expected changes in interest rates, borrowing costs and earnings.
The success of the fund's strategy depends significantly on the investment
adviser's skill in determining which securities to overweight, underweight or
avoid altogether.
Investment Adviser: Aeltus Investment Management, Inc.
Aetna Variable Portfolios, Inc.--Aetna International VP
Investment Objective
Seeks long-term capital growth primarily though investment in a diversified
portfolio of common stocks principally traded in countries outside of the
United States. The fund will not target any given level of current income.
Policies
Under normal market conditions, invests at least 65% of total assets in
securities principally traded in three or more countries outside of the United
States. These securities may include common stocks as well as securities
convertible into common stock. Diversifies the fund by investing in a mix of
stocks that the investment adviser believes have the potential for long-term
growth, as well as stocks that appear to be trading below their perceived
value. Allocates assets among several geographic regions and individual
countries, investing primarily in those areas that the investment adviser
believes have the greatest potential for growth as well as stable exchange
rates. Invests primarily in established foreign securities markets, although
may invest in emerging markets as well. Uses internally developed quantitative
computer models to evaluate the financial characteristics of over 2,000
companies in an attempt to select companies with long-term sustainable growth
characteristics. Employs currency hedging strategies to protect from adverse
effects on the U.S. dollar.
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Risks
Principal risks are those generally attributable to stock investing which
include sudden and unpredictable drops in the value of the market as a whole
and periods of lackluster or negative performance. Stocks of foreign companies
tend to be less liquid and more volatile than their U.S. counterparts.
Accounting standards and market regulations tend to be less standardized in
certain foreign countries, and economic and political climates tend to be less
stable. Stocks of foreign companies may be denominated in foreign currency.
Exchange rate fluctuations may reduce or eliminate gains or create losses.
Hedging strategies intended to reduce this risk may not perform as expected.
Investments in emerging markets are subject to the same risks applicable to
foreign investments generally, although those risks may be increased due to
conditions in such countries.
Investment Adviser: Aeltus Investment Management, Inc.
Aetna Variable Portfolios, Inc.--Aetna Real Estate Securities VP
Investment Objective
Seeks maximum total return primarily through investment in a diversified
portfolio of equity securities of real estate companies, the majority of which
are real estate investment trusts (REITs).
Policies
Under normal market conditions, invests at least 65% of total assets in stocks,
convertible securities and preferred stocks of companies principally engaged in
the real estate industry. These companies may invest in, among other things,
shopping malls, healthcare facilities, office parks and apartment communities,
or may provide real estate management and development services. In selecting
investments, uses internally developed quantitative models to forecast the
returns of each security. Evaluates real estate companies based on their
earnings history and long-term growth prospects, analyst estimates of future
earnings, safety and growth in dividends, balance sheet strength and quality of
management. The investment adviser also considers whether the securities appear
to be trading below their real value. Allocates assets among property types and
economic and geographic regions. Attempts to construct the fund's portfolio so
that the overall level of risk is not in excess of its benchmark index, the
National Association of Real Estate Investment Trusts Equity (NAREIT) Index.
Risks
Concentrating in stocks of real estate-related companies presents certain risks
that are more closely associated with investing in real estate directly than
with investing in the stock market generally. Those risks include: periodic
declines in the value of real estate, generally, or in the rents and other
income generated by real estate; periodic over-building, which creates gluts in
the market, as well as changes in laws (such as zoning laws) that impair the
property rights of real estate owners; adverse developments in the real estate
industry, which may have a greater impact on this fund than on a fund that is
more broadly diversified. Performance also may be adversely affected by sudden
and unpredictable drops in the value of the market as a whole and periods of
lackluster or negative performance. Although the fund is subject to the risks
generally attributable to stock investing, because the fund has concentrated
its assets in one industry it may be subject to more abrupt swings in value
than would a fund that does not concentrate its assets in one industry.
Investment Adviser: Aeltus Investment Management, Inc.
Aetna Variable Portfolios, Inc.--Aetna Small Company VP
Investment Objective
Seeks growth of capital primarily through investment in a diversified portfolio
of common stocks and securities convertible into common stocks of companies
with smaller market capitalizations.
Policies
Under normal market conditions, invests at least 65% of total assets in common
stocks and securities convertible into common stock of small-capitalization
companies, defined as: the 2,000 smallest of the 3,000 largest U.S.
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companies (as measured by market capitalization); all companies not included
above that are included in the Standard & Poor's SmallCap 600 Index or the
Russell 2000 Index; and companies with market capitalizations lower than any
companies included in the first two categories. For purposes of the 65% policy,
the largest company in this group in which the fund intends to invest currently
has a market capitalization of approximately $1.5 billion. Invests in stocks
that the investment adviser believes have the potential for long-term growth,
as well as those that appear to be trading below their perceived value. Uses
internally developed quantitative computer models to evaluate financial
characteristics of over 2,000 companies in an attempt to identify companies
whose perceived value is not reflected in the stock price. Considers the
potential of each company to create or take advantage of unique product
opportunities, its potential to achieve long-term sustainable growth and the
quality of its management.
Risks
Principal risks are those generally attributable to stock investing which
include sudden and unpredictable drops in the value of the market as a whole
and periods of lackluster or negative performance. Stocks of smaller companies
carry higher risks than stocks of larger companies. This is because smaller
companies may lack the management experience, financial resources, product
diversification, and competitive strengths of larger companies. In many
instances, the frequency and volume of trading in small cap stocks are
substantially less than of stocks of larger companies. As a result, the stocks
of smaller companies may be subject to wider price fluctuations and/or may be
less liquid. When selling a large quantity of a particular stock, the fund may
have to sell at a discount from quoted prices or may have to make a series of
small sales over an extended period of time due to the more limited trading
volume of smaller company stocks. Stocks of smaller companies can be
particularly sensitive to expected changes in interest rates, borrowing costs
and earnings.
Investment Adviser: Aeltus Investment Management, Inc.
Aetna Variable Portfolios, Inc.--Aetna Technology VP
Investment Objective
Seeks long-term capital appreciation.
Policies
Primarily invests in common stocks and securities convertible into common stock
of companies in the information technology industry sector. These companies
include companies that the subadviser considers to be principally engaged in
the development, production, or distribution of products or services related to
the processing, storage, transmission, or presentation of information or data.
A particular company will be considered to be principally engaged in the
information technology industries if, at the time of investment, the investment
adviser determines that at least 50% of the company's assets, gross income, or
net profits are committed to, or derived from, those industries. A company will
also be considered to be principally engaged if the subadviser considers that
the company has the potential for capital appreciation primarily as a result of
particular products, technology, patents, or other market advantages in those
industries. In selecting stocks, the subadviser looks at a company's valuation
relative to its potential long-term growth rate. May look to see whether a
company offers a new or improved product, service or business operation;
whether it has experienced a positive change in its financial or business
condition; whether the market for its goods or services has expanded or
experienced a positive change; and whether there is a potential catalyst for
positive change in the company's business or stock price. May sell a security
if the subadviser determines that the company has become overvalued due to
price appreciation or has experienced a change in its business fundamentals, if
the company's growth rate slows substantially, or if the subadviser believes
that another investment offers a better opportunity.
Risks
Principal risks are those generally attributable to stock investing which
include sudden and unpredictable drops in the value of the market as a whole
and periods of lackluster or negative performance. Stocks of smaller companies
tend to be less liquid and more volatile than stocks of larger companies.
Further, stocks of smaller companies also can be particularly sensitive to
expected changes in interest rates, borrowing costs and earnings.
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Because the fund's investments are concentrated in the information technology
industries, the Fund may be subject to more abrupt swings in value than a fund
which invests in a broader range of industries. Investments in information
technology companies may be highly volatile. The fund may experience difficulty
in establishing or closing out positions in these securities at prevailing
market prices. Also, there may be less publicly available information about
small companies or less market interest in their securities as compared to
larger companies, and it may take longer for the prices of the securities to
reflect the full value of their issuers' earnings potential or assets.
Investment Adviser: Aeltus Investment Management, Inc.
Subadviser: Elijah Asset Management, LLC
Aetna Variable Portfolios, Inc.--Aetna Value Opportunity VP
Investment Objective
Seeks growth of capital primarily through investment in a diversified portfolio
of common stocks and securities convertible into common stock.
Policies
Under normal market conditions, invests at least 65% of total assets in common
stocks and securities convertible into common stock. Tends to invest in larger
companies that the investment adviser believes are trading below their
perceived value, although it may invest in companies of any size. The
investment adviser believes that the investment objective can best be achieved
by investing in companies whose stock price has been excessively discounted due
to perceived problems or for other reasons. The investment adviser evaluates
financial and other characteristics of companies, attempting to find those
companies that appear to possess a catalyst for positive change, such as strong
management, solid assets, or market position, rather than those companies whose
stocks are simply inexpensive. The investment adviser looks to sell a security
when company business fundamentals deteriorate or when price objectives are
reached.
Risks
Principal risks are those generally attributable to stock investing which
include sudden and unpredictable drops in the value of the market as a whole
and periods of lackluster or negative performance. Stocks that appear to be
undervalued may never appreciate to the extent expected. Further, because the
prices of value-oriented stocks tend to correlate more closely with economic
cycles than growth-oriented stocks, they generally are more sensitive to
changing economic conditions, such as changes in interest rates, corporate
earnings and industrial production.
Investment Adviser: Aeltus Investment Management, Inc.
AIM V.I. Capital Appreciation Fund
Investment Objective
Seeks growth of capital through investment in common stocks, with emphasis on
medium- and small-sized growth companies.
Policies
The portfolio managers focus on companies they believe are likely to benefit
from new or innovative products, services or processes as well as those that
have experienced above-average, long-term growth in earnings and have excellent
prospects for future growth. The portfolio managers consider whether to sell a
particular security when any of those factors materially changes. The fund may
also invest up to 20% of its total assets in foreign securities.
In anticipation of or in response to adverse market conditions, for cash
management purposes, or for defensive purposes, the fund may temporarily hold
all or a portion of its assets in cash, money market instruments, shares of
affiliated money market funds, bonds or other debt securities. As a result, the
fund may not achieve its investment objective.
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Risks
The prices of equity securities change in response to many factors, including
the historical and prospective earnings of the issuer, the value of its assets,
general economic conditions, interest rates, investor perceptions and market
liquidity. This is especially true with respect to common stocks of smaller
companies, whose prices may go up and down more than common stocks of larger,
more-established companies. Also, since common stocks of smaller companies may
not be traded as often as common stocks of larger, more-established companies,
it may be difficult or impossible for the fund to sell securities at a
desirable price.
Investment Adviser: A I M Advisors, Inc.
AIM V.I. Growth Fund
Investment Objective
Seeks growth of capital primarily by investing in seasoned and better
capitalized companies considered to have strong earnings momentum.
Policies
The portfolio managers focus on companies that have experienced above-average
growth in earnings and have excellent prospects for future growth. The
portfolio managers consider whether to sell a particular security when any of
those factors materially changes. The fund may also invest up to 20% of its
total assets in foreign securities.
In anticipation of or in response to adverse market conditions, for cash
management purposes, or for defensive purposes, the fund may temporarily hold
all or a portion of its assets in cash, money market instruments, shares of
affiliated money market funds, bonds or other debt securities. As a result, the
fund may not achieve its investment objective.
Risks
The prices of equity securities change in response to many factors, including
the historical and prospective earnings of the issuer, the value of its assets,
general economic conditions, interest rates, investor perceptions and market
liquidity. The fund may participate in the initial public offering (IPO)
market. Because of the fund's small asset base any investment the fund may make
in IPOs may significantly increase the fund's total returns. As the fund's
assets grow, the impact of IPO investments will decline, which may reduce the
fund's total returns.
Investment Adviser: A I M Advisors, Inc.
AIM V.I. Growth and Income Fund
Investment Objective
Seeks growth of capital with a secondary objective of current income.
Policies
The fund seeks to meet these objectives by investing at least 65% of its net
assets in income-producing securities, including dividend-paying common stocks
and convertible securities. The portfolio managers purchase securities of
established companies that have long-term above-average growth in earnings and
dividends, and growth companies that they believe have the potential for
above-average growth in earnings and dividends. The portfolio managers consider
whether to sell a particular security when they believe the security no longer
has that potential or the capacity to generate income. The fund may also invest
up to 20% of its total assets in foreign securities.
The fund may engage in active and frequent trading of portfolio securities to
achieve its investment objectives. If the fund does trade in this way, it may
incur increased transaction costs and brokerage commissions, both of which can
lower the actual return on your investment.
In anticipation of or in response to adverse market conditions, for cash
management purposes, or for defensive purposes, the fund may temporarily hold
all or a portion of its assets in cash, money market instruments, shares of
affiliated money market funds, bonds or other debt securities. As a result, the
fund may not achieve its investment objective.
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Risks
The prices of equity securities change in response to many factors, including
the historical and prospective earnings of the issuer, the value of its assets,
general economic conditions, interest rates, investor perceptions and market
liquidity. The values of the convertible securities in which the fund may
invest also will be affected by market interest rates, the risk that the issuer
may default on interest or principal payments and the value of the underlying
common stock into which these securities may be converted. Specifically, since
these types of convertible securities pay fixed interest and dividends, their
values may fall if market interest rates rise and rise if market interest rates
fall. Additionally, an issuer may have the right to buy back certain of the
convertible securities at a time and at a price that is unfavorable to the
fund.
Investment Adviser: A I M Advisors, Inc.
AIM V.I. Value Fund
Investment Objective
Seeks to achieve long-term growth of capital by investing primarily in equity
securities judged by the fund's investment adviser to be undervalued relative
to the investment adviser's appraisal of the current or projected earnings of
the companies issuing the securities, or relative to current market values of
assets owned by the companies issuing the securities or relative to the equity
market generally. Income is a secondary objective.
Policies
The fund also may invest in preferred stocks and debt instruments that have
prospects for growth of capital. The fund may also invest up to 25% of its
total assets in foreign securities.
The portfolio managers focus on undervalued equity securities of (1)
out-of-favor cyclical growth companies; (2) established growth companies that
are undervalued compared to historical relative valuation parameters; (3)
companies where there is early but tangible evidence of improving prospects
that are not yet reflected in the price of the company's equity securities; and
(4) companies whose equity securities are selling at prices that do not reflect
the current market value of their assets and where there is reason to expect
realization of this potential in the form of increased equity values. The
portfolio managers consider whether to sell a particular security when they
believe the company no longer fits into any of the above categories.
In anticipation of or in response to adverse market conditions, for cash
management purposes, or for defensive purposes, the fund may temporarily hold
all or a portion of its assets in cash, money market instruments, shares of
affiliated money market funds, bonds or other debt securities. As a result, the
fund may not achieve its investment objective.
Risks
The prices of equity securities change in response to many factors, including
the historical and prospective earnings of the issuer, the value of its assets,
general economic conditions, interest rates, investor perceptions and market
liquidity. If the seller of a repurchase agreement in which the fund invests
defaults on its obligation or declares bankruptcy, the fund may experience
delays in selling the securities underlying the repurchase agreement. As a
result, the fund may incur losses arising from decline in the value of those
securities, reduced levels of income and expenses of enforcing its rights.
Investment Adviser: A I M Advisors, Inc.
Calvert Social Balanced Portfolio
Investment Objective
Seeks to achieve a competitive total return through an actively managed,
nondiversified portfolio of stocks, bonds, and money market instruments which
offer income and capital growth opportunity and which satisfy the investment
and social criteria for the Portfolio.
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Policies
The Portfolio may purchase both common and preferred stocks. Although there is
no predetermined percentage of assets allocated to stocks, bonds, or money
market instruments, the Portfolio will invest at least 25% of its assets in
senior fixed income securities. The Portfolio normally invests in
investment-grade bonds rated in one of the four highest rating categories by
Standard & Poor's Corporation or by Moody's Investors Service, Inc. or, if not
rated, that are determined by the Portfolio's investment adviser to be of
comparable quality. The Portfolio may invest up to 10% of its assets in foreign
securities.
Risks
Since the Portfolio is nondiversified, the value of the shares may be more
susceptible to any single economic, political, or regulatory event than the
shares of a diversified portfolio. Fixed income investments are subject to
interest rate risk. There are also risks involved in investing in foreign
securities. These include currency risks, less publicly available information
about foreign companies, different audit and financial reporting standards, and
less government supervision and regulation.
Investment Adviser: Calvert Asset Management Company, Inc.
Subadviser: NCM Capital Management, Inc.
Fidelity Variable Insurance Products Fund--Equity Income Portfolio
Investment Objective
Seeks reasonable income. Also considers the potential for capital appreciation.
Seeks a yield which exceeds the composite yield on the securities comprising
the S&P 500.
Policies
Normally invests at least 65% of total assets in income-producing equity
securities. May also invest in other types of equity securities and debt
securities, including lower-quality debt securities. May invest in securities
of both foreign and domestic issuers. Emphasis on above-average
income-producing equity securities tends to lead to investments in large cap
"value" stocks. In making investment decisions, the investment adviser relies
on fundamental analysis of each issuer and its potential for success in light
of its current financial condition, its industry position, and economic and
market conditions. May use various techniques, such as buying and selling
futures contracts, to increase or decrease exposure to changing security
prices, or other factors that affect security values.
Risks
The value of equity securities fluctuates in response to issuer, political,
market and economic developments. In the short term, equity prices can
fluctuate dramatically in response to these developments. Debt securities have
varying levels of sensitivity to changes in interest rates. In general, the
price of a debt security can fall when interest rates rise. Securities with
longer maturities and mortgage securities can be more sensitive to interest
rate changes. Foreign investments, especially those in emerging markets, can be
more volatile and potentially less liquid than U.S. investments due to
increased risks of adverse issuer, political, regulatory, market or economic
developments. Lower-quality debt securities (those of less than
investment-grade quality) can be more volatile due to increased sensitivity to
adverse issuer, political, regulatory, market or economic developments.
Lower-quality debt securities involve greater risk of default or price changes
due to changes in the credit quality of the issuer. "Value" stocks can react
differently to issuer, political, market and economic developments than the
market as a whole and other types of stocks. "Value" stocks may not ever
realize their full value.
Investment Adviser: Fidelity Management & Research Company
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Fidelity Variable Insurance Products Fund--Growth Portfolio
Investment Objective
Seeks capital appreciation.
Policies
Normally invests primarily in common stocks of companies the investment adviser
believes have above-average growth potential. Companies with high growth
potential tend to be companies with higher than average price/
earning (P/E) ratios and are often called "growth" stocks. May invest in
securities of both foreign and domestic issuers. In making investment
decisions, the investment adviser relies on fundamental analysis of each issuer
and its potential for success in light of its current financial condition, its
industry position, and economic and market conditions. May use various
techniques, such as buying and selling futures contracts, to increase or
decrease exposure to changing security prices, or other factors that affect
security values.
Risks
The value of equity securities fluctuates in response to issuer, political,
market and economic developments. In the short term, equity prices can
fluctuate dramatically in response to these developments. Foreign investments,
especially those in emerging markets, can be more volatile and potentially less
liquid than U.S. investments due to increased risks of adverse issuer,
political, regulatory, market or economic developments. "Growth" stocks tend to
be sensitive to changes in their earnings and more volatile than other types of
stocks.
Investment Adviser: Fidelity Management & Research Company
Fidelity Variable Insurance Products Fund--Overseas Portfolio
Investment Objective
Seeks long-term growth of capital.
Policies
Normally invests at least 65% of total assets in foreign securities, primarily
in common stocks. Investments are allocated across countries and regions, with
consideration given to the size of the market in each country and region
relative to the size of the international market as a whole. In making
investment decisions, the investment adviser relies on fundamental analysis of
each issuer and its potential for success in light of its current financial
condition, its industry position, and economic and market conditions. May use
various techniques, such as buying and selling futures contracts, to increase
or decrease exposure to changing security prices or other factors that affect
security values.
Risks
The value of equity securities fluctuates in response to issuer, political,
market and economic developments. In the short term, equity prices can
fluctuate dramatically in response to these developments. Debt securities have
varying levels of sensitivity to changes in interest rates. In general, the
price of a debt security can fall when interest rates rise. Securities with
longer maturities and mortgage securities can be more sensitive to interest
rate changes. Foreign investments, especially those in emerging markets, can be
more volatile and potentially less liquid than U.S. investments due to
increased risks of adverse issuer, political, regulatory, market or economic
developments.
Investment Adviser: Fidelity Management & Research Company
Subadvisers: Fidelity Management & Research (U.K.) Inc.; Fidelity Management &
Research Far East Inc.; Fidelity International Investment Advisors; Fidelity
International Investment Advisors (U.K.) Limited; Fidelity Investments Japan
Limited
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Fidelity Variable Insurance Products Fund II--Contrafund[RegTM] Portfolio
Investment Objective
Seeks long-term capital appreciation.
Policies
Normally invests primarily in common stocks of companies whose value the
investment adviser believes is not fully recognized by the public. May invest
in securities of both foreign and domestic issuers. May tend to buy "growth"
stocks or "value" stocks, or a combination of both types. In making investment
decisions, the investment adviser relies on fundamental analysis of each issuer
and its potential for success in light of its current financial condition, its
industry position, and economic and market conditions. May use various
techniques, such as buying and selling futures contracts, to increase or
decrease exposure to changing security prices, interest rates or other factors
that affect security values.
Risks
The value of equity securities fluctuates in response to issuer, political,
market and economic developments. In the short term, equity prices can
fluctuate dramatically in response to these developments. Debt securities have
varying levels of sensitivity to changes in interest rates. In general, the
price of a debt security can fall when interest rates rise. Securities with
longer maturities and mortgage securities can be more sensitive to interest
rate changes. Foreign investments, especially those in emerging markets, can be
more volatile and potentially less liquid than U.S. investments due to
increased risks of adverse issuer, political, regulatory, market or economic
developments. "Growth" stocks tend to be sensitive to changes in their earnings
and more volatile than other types of stocks. "Value" stocks can react
differently to issuer, political, market and economic developments than the
market as a whole and other types of stocks. "Value" stocks may not ever
realize their full value.
Investment Adviser: Fidelity Management & Research Company
Subadvisers: Fidelity Management & Research (U.K.) Inc.; Fidelity Management &
Research Far East Inc.; Fidelity Investments Japan Limited
Janus Aspen Series--Aggressive Growth Portfolio
Investment Objective
Seeks long-term growth of capital.
Policies
A nondiversified portfolio that invests primarily in common stocks selected for
their growth potential and normally invests at least 50% of its equity assets
in medium-sized companies. Medium-sized companies are those whose market
capitalizations at the time of investment fall within the range of companies in
the Standard and Poor's (S&P) MidCap 400 Index. The market capitalizations
within the Index will vary, but as of December 31, 1999, they ranged from
approximately $170 million to $37 billion. May at times hold substantial
positions in cash or similar investments.
Risks
Because the Portfolio may invest substantially all of its assets in common
stocks, the main risk is that the value of the stocks it holds might decrease
in response to the activities of an individual company or in response to
general market and/or economic conditions. In addition, a nondiversified
portfolio has the ability to take larger positions in a smaller number of
issuers. Because the appreciation or depreciation of a single stock may have a
greater impact on the net asset value of a nondiversified portfolio, its share
price can be expected to fluctuate more than a diversified portfolio.
Performance may also be affected by risks specific to certain types of
investments, such as foreign securities, derivative investments, non-investment
grade debt securities (high-yield/high-risk securities or "junk" bonds) or
companies with relatively small market capitalizations. Smaller or newer
companies may suffer more significant losses as well as realize more
substantial growth than larger or more established issuers.
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Investments in such companies tend to be more volatile and somewhat more
speculative. Issues associated with investing in foreign securities include
currency risk, political and economic risk, regulatory risk, market risk and
transaction costs. High-yield/high-risk securities are generally more dependent
on the ability of the issuer to meet interest and principal payments (i.e.,
credit risk). They are more vulnerable to real or perceived economic changes,
political changes or other adverse developments specific to the issuer.
Investment Adviser: Janus Capital Corporation
Janus Aspen Series--Balanced Portfolio
Investment Objective
Seeks long-term capital growth, consistent with preservation of capital and
balanced by current income.
Policies
Normally invests 40-60% of its assets in securities selected primarily for
their growth potential and 40-60% of its assets in securities selected
primarily for their income potential. Will normally invest at least 25% of its
assets in fixed-income securities. Assets may shift between the growth and
income components of the Portfolio based on the portfolio manager's analysis of
relevant market, financial and economic conditions. May at times hold
substantial positions in cash or similar investments.
Risks
Because the Portfolio may invest a significant portion of its assets in common
stocks, the main risk is that the value of the stocks it holds might decrease
in response to the activities of an individual company or in response to
general market and/or economic conditions. The income component of the
Portfolio's holdings includes fixed-income securities which generally will
decrease in value when interest rates rise. Another risk associated with
fixed-income securities is the risk that an issuer of a bond will be unable to
make principal and interest payments when due (i.e. credit risk). Performance
may also be affected by risks specific to certain types of investments, such as
foreign securities, derivative investments, non-investment grade debt
securities (high-yield/high-risk securities or "junk" bonds) or companies with
relatively small market capitalizations. Smaller or newer companies may suffer
more significant losses as well as realize more substantial growth than larger
or more established issuers. Investments in such companies tend to be more
volatile and somewhat more speculative. Issues associated with investing in
foreign securities include currency risk, political and economic risk,
regulatory risk, market risk and transaction costs. High-yield/high-risk
securities are generally more susceptible to credit risk. They are more
vulnerable to real or perceived economic changes, political changes or other
adverse developments specific to the issuer.
Investment Adviser: Janus Capital Corporation
Janus Aspen Series--Flexible Income Portfolio
Investment Objective
Seeks to obtain maximum total return, consistent with the preservation of
capital.
Policies
Invests primarily in a wide variety of income-producing securities such as
corporate bonds and notes, government securities and preferred stock. Will
invest at least 80% of its assets in income-producing securities. May own an
unlimited amount of high-yield/high-risk securities ("junk bonds") which may be
a big part of the portfolio. May at times hold substantial positions in cash or
similar investments.
Risks
Because the Portfolio invests substantially all of its assets in fixed-income
securities, it is subject to risks such as credit or default risks or decreased
value due to interest rate increases. Generally, a fixed-income security will
increase in value when interest rates fall and decrease in value when interest
rates rise. Performance may also be affected by risks specific to certain types
of investments, such as foreign securities, derivative investments, non-
investment grade debt securities (high-yield/high-risk securities or "junk"
bonds) or companies with relatively
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small market capitalizations. Smaller or newer companies may suffer more
significant losses as well as realize more substantial growth than larger or
more established issuers. Investments in such companies tend to be more
volatile and somewhat more speculative. Issues associated with investing in
foreign securities include currency risk, political and economic risk,
regulatory risk, market risk and transaction costs. High-yield/high-risk
securities are generally more dependent on the ability of the issuer to meet
interest and principal payments (i.e., credit risk). They are more vulnerable
to real or perceived economic changes, political changes or other adverse
developments specific to the issuer.
Investment Adviser: Janus Capital Corporation
Janus Aspen Series--Growth Portfolio
Investment Objective
Seeks long-term growth of capital in a manner consistent with the preservation
of capital.
Policies
Generally invests primarily in common stocks of larger, more established
companies selected for their growth potential, although it can invest in
companies of any size. May at times hold substantial positions in cash or
similar investments.
Risks
Because the Portfolio may invest substantially all of its assets in common
stocks, the main risk is that the value of the stocks it holds might decrease
in response to the activities of an individual company or in response to
general market and/or economic conditions. Performance may also be affected by
risks specific to certain types of investments, such as foreign securities,
derivative investments, non-investment grade debt securities (high-yield/
high-risk securities or "junk" bonds) or companies with relatively small market
capitalizations. Smaller or newer companies may suffer more significant losses
as well as realize more substantial growth than larger or more established
issuers. Investments in such companies tend to be more volatile and somewhat
more speculative. Issues associated with investing in foreign securities
include currency risk, political and economic risk, regulatory risk, market
risk and transaction costs. High-yield/high-risk securities are generally more
dependent on the ability of the issuer to meet interest and principal payments
(i.e., credit risk). They are more vulnerable to real or perceived economic
changes, political changes or other adverse developments specific to the
issuer.
Investment Adviser: Janus Capital Corporation
Janus Aspen Series--Worldwide Growth Portfolio
Investment Objective
Seeks long-term growth of capital in a manner consistent with the preservation
of capital.
Policies
Invests primarily in common stocks of companies of any size throughout the
world. Normally invests in issuers from at least five different countries,
including the United States. May at times invest in fewer than five countries
or even in a single country. May hold substantial positions in cash or similar
investments.
Risks
Because the Portfolio may invest substantially all of its assets in common
stocks, the main risk is that the value of the stocks it holds might decrease
in response to the activities of an individual company or in response to
general market and/or economic conditions. Performance may also be affected by
risks specific to certain types of investments, such as foreign securities,
derivative investments, non-investment grade debt securities (high-yield/
high-risk securities or "junk" bonds) or companies with relatively small market
capitalizations. Smaller or newer companies may suffer more significant losses
as well as realize more substantial growth than larger or more established
issuers. Investments in such companies tend to be more volatile and somewhat
more speculative. Issues associated with investing in foreign securities
include currency risk, political and economic risk, regulatory
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risk, market risk and transaction costs. High-yield/high-risk securities are
generally more dependent on the ability of the issuer to meet interest and
principal payments (i.e., credit risk). They are more vulnerable to real or
perceived economic changes, political changes or other adverse developments
specific to the issuer.
Investment Adviser: Janus Capital Corporation
Oppenheimer Global Securities Fund/VA
Investment Objective
Seeks long-term capital appreciation by investing a substantial portion of its
assets in securities of foreign issuers, "growth-type" companies, cyclical
industries, and special situations which are considered to have appreciation
possibilities.
Policies
Invests mainly in common stocks and can also buy other equity securities,
including preferred stocks and convertible securities. The fund buys securities
of issuers in the U.S. and foreign countries. The fund can invest without limit
in any country, including countries with developed or emerging markets, but
currently emphasizes investments in developed markets. The fund will normally
invest in at least three countries (one of which may be the United States). In
selecting securities for the fund, the fund's portfolio manager looks primarily
for foreign and U.S. companies with high growth potential, using fundamental
analysis of a company's financial statements and management structure, and
analysis of the company's operations and product development, as well as the
industry of which the issuer is part.
Risks
Stocks fluctuate in price, and their short-term volatility at times may be
great. The value of foreign investments may be affected by exchange control
regulations, expropriation or nationalization of a company's assets, foreign
taxes, changes in governmental economic or monetary policy in the U.S. or abroad
or other political and economic factors. The fund can use derivatives to seek
increased returns or to try to hedge investment risks. If the issuer of the
derivative does not pay the amount due, the fund can lose money on the
investment.
Investment Adviser: OppenheimerFunds, Inc.
Oppenheimer Strategic Bond Fund/VA
Investment Objective
Seeks a high level of current income principally derived from interest on debt
securities and seeks to enhance such income by writing covered call options on
debt securities.
Policies
Invests mainly in debt securities of issuers in three market sectors: foreign
governments and companies, U.S. government securities, and lower-rated
high-yield securities of U.S. and foreign companies. Under normal market
conditions, the fund invests in each of those three market sectors. However, the
fund is not obligated to do so, and the amount of its assets in each of the
three sectors will vary over time. The fund can invest up to 100% of its assets
in any one sector at any time, if the manager believes that in doing so the fund
can achieve its objective without undue risk. The fund can invest in securities
having short, medium or long-term maturities and may invest without limit in
lower-grade high-yield debt obligations also called "junk bonds." The fund's
foreign investments can include debt securities of issuers in developed markets
as well as emerging markets, which have special risks. The fund can also use
hedging instruments and certain derivative investments to try to enhance income
or try to manage investment risks.
Risks
The fund's investments in debt securities are subject to changes in their value
from a number of factors. They include changes in general bond market movements
in the U.S. and abroad, or the change in value of particular bonds because of
an event affecting the issuer. The fund can focus significant amounts of its
investments in foreign debt securities. Therefore, it will be subject to the
risks that economic, political or other events can have
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on the values of securities of issuers in particular foreign countries. These
risks are heightened in the case of emerging market debt securities. Changes in
interest rates can also affect securities prices.
Investment Adviser: OppenheimerFunds, Inc.
Portfolio Partners, Inc. (PPI) MFS Capital Opportunities Portfolio (formerly
known as PPI MFS Value Equity Portfolio)
Investment Objective
Seeks capital appreciation.
Policies
Invests primarily (at least 65% of total assets) in common stocks and related
securities, such as preferred stock, convertible securities and depositary
receipts. Focuses on companies believed to have favorable growth prospects and
attractive valuations based on current and expected earnings or cash flow.
Investments may include securities listed on a securities exchange or traded in
the over-the-counter markets.
May invest in foreign securities (including emerging market securities) and may
have exposure to foreign currencies through its investment in these securities,
its direct holdings of foreign currencies or through its use of foreign
currency exchange contracts for the purchase or sale of a fixed quantity of a
foreign currency at a future date.
May engage in active and frequent trading to achieve its principal investment
strategies.
Risks
Investment in the portfolio is subject to the following risks:
> Market and Company Risk: The value of the securities in which the portfolio
invests may decline due to changing economic, political or market conditions,
or due to the financial condition of the company which issued the security. In
addition, securities of growth companies may be more volatile because such
companies usually invest a high portion of their earnings in their businesses
and may lack the dividends of value companies, which can cushion the security
prices in a declining market.
> Over-the-Counter Risk: Equity securities that are traded over the counter may
be more volatile than exchange listed securities, and the portfolio may
experience difficulty in purchasing or selling these securities at a fair
price.
> Foreign Markets Risk: Investment in foreign securities involves additional
risks relating to political, social and economic developments abroad. Other
risks from these investments result from the differences between the
regulations to which U.S. and foreign issuers and markets are subject.
> Emerging Markets Risk: Emerging markets are generally defined as countries in
the initial stages of their industrialization cycles with low per capita
income. Investments in emerging markets securities involve all of the risks of
investment in foreign securities, and also have additional risks.
> Currency Risk: Exposure to foreign currencies may cause the value of the
portfolio to decline in the event that the U.S. dollar strengthens against
these currencies, or in the event that foreign governments intervene in the
currency markets.
> Active or Frequent Trading Risk: The Portfolio may engage in active and
frequent trading. This may result in higher capital gains as compared to
portfolios with less active trading policies. Frequent trading also increases
transaction costs, which can detract from fund performance.
Investment Adviser: Aetna Life Insurance and Annuity Company
Subadviser: Massachusetts Financial Services Company
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Portfolio Partners, Inc. (PPI) MFS Emerging Equities Portfolio
Investment Objective
Seeks long-term growth of capital.
Policies
Invests primarily (at least 65% of total assets) in common stocks and related
securities, such as preferred stock, convertible securities and depositary
receipts, of emerging growth companies. Emerging growth companies are companies
believed to be early in their life cycle and that have the potential to become
major enterprises, or major enterprises whose rates of earnings growth are
expected to accelerate. Investments may include securities listed on a
securities exchange or traded in the over-the-counter markets.
May also invest in foreign securities (including emerging market securities) and
may have exposure to foreign currencies through its investment in these
securities, its direct holdings of foreign currencies or through its use of
foreign currency exchange contracts for the purchase or sale of a fixed quantity
of foreign currency at a future date.
May engage in active and frequent trading to achieve its principal investment
strategies.
Risks
Investment in the portfolio is subject to the following risks:
> Market and Company Risk: The value of the securities in which the portfolio
invests may decline due to changing economic, political or market conditions,
or due to the financial condition of the company which issued the security.
> Emerging Growth Risk: The portfolio's performance is particularly sensitive to
changes in the value of emerging growth companies. Investments in emerging
growth companies may be subject to more abrupt or erratic market movements and
may involve greater risks than investments in other companies.
> Over-the-Counter Risk: Equity securities that are traded over the counter may
be more volatile than exchange listed securities, and the portfolio may
experience difficulty in purchasing or selling these securities at a fair
price.
> Foreign Markets Risk: Investment in foreign securities involves risks related
to political, social and economic developments abroad. These risks result from
differences between the regulations to which U.S. and foreign issuers and
Markets are subject.
> Currency Risk: Exposure to foreign currencies may cause the value of the
portfolio to decline if the U.S. dollar strengthens against these currencies
or if foreign governments intervene in the currency markets.
> Emerging Markets Risk: Investments in emerging market securities involve all
the risks of investment in foreign markets. Additionally, markets of emerging
market countries have been more volatile, and involve greater risks, than the
markets of developed countries with more mature economies.
> Active or Frequent Trading Risk: The Portfolio may engage in active and
frequent trading. This may result in higher capital gains as compared to
portfolios with less active trading policies. Frequent trading also increases
transaction costs, which can detract from fund performance.
Investment Adviser: Aetna Life Insurance and Annuity Company
Subadviser: Massachusetts Financial Services Company
Portfolio Partners, Inc. (PPI) MFS Research Growth Portfolio
Investment Objective
Seeks long-term growth of capital and future income.
Policies
Invests primarily (at least 80% of total assets) in common stocks and related
securities, such as preferred stock, convertible securities and depositary
receipts. Focuses on companies believed to have favorable prospects for
long-term growth, attractive valuations based on current and expected earnings
or cash flow, dominant or growing market share and superior management. May
invest in companies of any size. Investments may also include securities traded
on securities exchanges or in the over-the-counter markets.
May invest in foreign securities (including emerging market securities) and may
have exposure to foreign currencies through its investment in these securities,
its direct holdings of foreign currencies or through its use of foreign currency
exchange contracts for the purchase or sale of a fixed quantity of foreign
currency at a future date.
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Risks
Investment in the portfolio is subject to the following risks:
> Market and Company Risk: The value of the securities in which the portfolio
invests may decline due to changing economic, political or market conditions,
or due to the financial condition of the company which issued the security. In
addition, securities of growth companies may be more volatile because such
companies usually invest a high portion of their earnings in their businesses
and may lack the dividends of value companies, which can cushion the security
prices in a declining market.
> Over-the-Counter Risk: Equity securities that are traded over-the-counter may
be more volatile than exchange-listed securities, and the portfolio may
experience difficulty in purchasing or selling these securities at a fair
price.
> Foreign Markets Risk: Investment in foreign securities involves additional
risks relating to political, social and economic developments abroad. Other
risks from these investments result from the differences between the
regulations to which U.S. and foreign issuers and markets are subject.
> Currency Risk: Exposure to foreign currencies may cause the value of the
portfolio to decline if the U.S. dollar strengthens against these currencies
or if foreign governments intervene in the currency markets.
Investment Adviser: Aetna Life Insurance and Annuity Company
Subadviser: Massachusetts Financial Services Company
Portfolio Partners, Inc. (PPI) Scudder International Growth Portfolio
Investment Objective
Seeks long-term growth of capital.
Policies
Invests primarily (at least 65% of total assets) in the equity securities of
foreign companies believed to have high growth potential. Normally invests in
securities of at least three different countries other than the U.S. Will
invest in securities in both developed and developing markets. Seeks to invest
in those companies believed to be best able to capitalize on the growth and
changes taking place within and between various regions of the world.
Typically, these are companies with leading or rapidly developing business
franchises, strong financial positions, and high quality management capable of
defining and implementing strategies to take advantage of local, regional or
global markets.
Also may invest in debt securities issued by both U.S. and foreign companies,
including non-investment grade debt securities.
Risks
Investment in the portfolio is subject to the following risks:
> Market and Company Risk: The value of the securities in which the portfolio
invests may decline due to changing economic, political or market conditions,
or due to the financial condition of the company which issued the security.
> Foreign Markets Risk: Investment in foreign securities involves additional
risks relating to political, social and economic developments abroad. Other
risks from these investments result from the differences between the
regulations to which U.S. and foreign issuers and markets are subject.
> Currency Risk: Exposure to foreign currencies may cause the value of the
portfolio to decline in the event that the U.S. dollar strengthens against
these currencies, or in the event that foreign governments intervene in the
currency markets.
> Emerging Growth Risk: The portfolio's performance is particularly sensitive to
changes in the value of emerging growth companies. Investments in emerging
growth companies may be subject to more abrupt or erratic market movements and
may involve greater risks than investments in other companies.
> Interest Rate Risk: Investment in debt securities involves risks relating to
interest rate movement. If interest rates go up, the value of debt securities
held by the portfolio will decline.
64
<PAGE>
> Credit Risk: Investment in non-investment grade debt securities involves
credit risk because issuers of non-investment grade securities are more likely
to have difficulty making timely payments of interest or principal.
Investment Adviser: Aetna Life Insurance and Annuity Company
Subadviser: Scudder Kemper Investments, Inc.
Portfolio Partners, Inc. (PPI) T. Rowe Price Growth Equity Portfolio
Investment Objective
Seeks long-term capital growth, and secondarily, increasing dividend income.
Policies
Invests primarily (at least 65% of total assets) in the common stocks of a
diversified group of growth companies. Seeks companies that have the ability to
pay increasing dividends through strong cash flows and whose rates of earnings
growth are above average. Also seeks companies with a lucrative niche in the
economy that will give them the ability to sustain earnings momentum even during
times of slow economic growth.
May invest in foreign securities and may have exposure to foreign currencies
through its investment in these securities, its direct holdings of foreign
currencies or through its use of foreign currency exchange contracts for the
purchase or sale of a fixed quantity of foreign currency at a future date.
Risks
Investment in the portfolio is subject to the following risks:
> Market and Company Risk: The value of the securities in which the portfolio
invests may decline due to changing economic, political or market conditions,
or due to the financial condition of the company which issued the security. In
addition, securities of growth companies may be more volatile because such
companies usually invest a high portion of their earnings in their businesses
and may lack the dividends of value companies, which can cushion the security
prices in a declining market.
> Growth Stock Risk: Growth stock companies usually invest a high portion of
earnings in their business, and they may lack the dividends of value stocks
that can cushion stock prices in a falling market. Also, earnings
disappointments often lead to sharply falling prices because investors buy
growth stocks in anticipation of superior earnings growth.
> Foreign Markets Risk: Investment in foreign securities involves additional
risks relating to political, social and economic developments abroad. Other
risks from these investments result from the differences between the
regulations to which U.S. and foreign issuers and markets are subject.
> Currency Risk: Exposure to foreign currencies may cause the value of the
portfolio to decline in the event that the U.S. dollar strengthens against
these currencies, or in the event that foreign governments intervene in the
currency markets.
Investment Adviser: Aetna Life Insurance and Annuity Company
Subadviser: T. Rowe Price Associates, Inc.
65
<PAGE>
Appendix V
Condensed Financial Information
- --------------------------------------------------------------------------------
(FOR CONTRACTS ISSUED AFTER MARCH 1994 WITH TOTAL SEPARATE ACCOUNT
ANNUAL EXPENSES OF 1.25%)*
(Selected data for accumulation units outstanding throughout each period)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The condensed financial information presented below for each of the periods in
the six-year period ended December 31, 1999 (as applicable), is derived from
the financial statements of the separate account, which have been audited by
KPMG LLP, independent auditors. The financial statements and the independent
auditors' report thereon for the year ended December 31, 1999 are included in
the Statement of Additional Information.
<TABLE>
<CAPTION>
1999 1998 1997
-------------- ---------------- -----------------
<S> <C> <C> <C>
AETNA ASCENT VP
Value at beginning of period $ 16.337 $ 15.860 $ 13.395
Value at end of period $ 18.450 $ 16.337 $ 15.860
Number of accumulation units
outstanding at end of period 473,603 592,247 554,873
AETNA BALANCED VP, INC.
Value at beginning of period $ 21.723 $ 18.811 $ 15.551
Value at end of period $ 24.372 $ 21.723 $ 18.811
Number of accumulation units
outstanding at end of period 5,427,321 6,268,762 6,663,594
AETNA BOND VP
Value at beginning of period $ 14.137 $ 13.238 $ 12.377
Value at end of period $ 13.859 $ 14.137 $ 13.238
Number of accumulation units
outstanding at end of period 2,085,755 2,490,832 2,482,652
AETNA CROSSROADS VP
Value at beginning of period $ 15.478 $ 14.797 $ 12.744
Value at end of period $ 16.847 $ 15.478 $ 14.797
Number of accumulation units
outstanding at end of period 372,046 514,093 424,250
AETNA GROWTH VP
Value at beginning of period $ 17.912 $ 13.173 $ 11.137(3)
Value at end of period $ 23.875 $ 17.912 $ 13.173
Number of accumulation units
outstanding at end of period 516,658 289,055 21,371
AETNA GROWTH AND
INCOME VP
Value at beginning of period $ 25.094 $ 22.194 $ 17.302
Value at end of period $ 29.100 $ 25.094 $ 22.194
Number of accumulation units
outstanding at end of period 17,496,241 19,989,922 21,842,444
AETNA HIGH YIELD VP
Value at beginning of period $ 9.212 $ 9.968(4)
Value at end of period $ 9.739 $ 9.212
Number of accumulation units
outstanding at end of period 10,893 7,394
AETNA INDEX PLUS LARGE
CAP VP
Value at beginning of period $ 18.772 $ 14.444 $ 10.924
Value at end of period $ 23.044 $ 18.772 $ 14.444
Number of accumulation units
outstanding at end of period 1,067,590 616,724 159,461
AETNA INDEX PLUS MID
CAP VP
Value at beginning of period $ 10.891 $ 9.925(6)
Value at end of period $ 12.455 $ 10.891
Number of accumulation units
outstanding at end of period 51,901 35,031
AETNA INDEX PLUS SMALL
CAP VP
Value at beginning of period $ 8.815 $ 9.918(6)
Value at end of period $ 9.645 $ 8.815
Number of accumulation units
outstanding at end of period 73,715 40,793
AETNA INTERNATIONAL VP
Value at beginning of period $ 9.765 $ 10.182(6)
Value at end of period $ 14.594 $ 9.765
Number of accumulation units
outstanding at end of period 55,009 25,090
<CAPTION>
1996 1995 1994
---------------- ---------------- ----------------
<S> <C> <C> <C>
AETNA ASCENT VP
Value at beginning of period $ 10.976 $ 10.000(1)
Value at end of period $ 13.395 $ 10.976
Number of accumulation units
outstanding at end of period 201,475 49,748
AETNA BALANCED VP, INC.
Value at beginning of period $ 13.673 $ 10.868 $ 11.057(2)
Value at end of period $ 15.551 $ 13.673 $ 10.868
Number of accumulation units
outstanding at end of period 7,803,572 940,933 261,895
AETNA BOND VP
Value at beginning of period $ 12.098 $ 10.360 $ 10.905(2)
Value at end of period $ 12.377 $ 12.098 $ 10.360
Number of accumulation units
outstanding at end of period 3,717,900 354,993 148,193
AETNA CROSSROADS VP
Value at beginning of period $ 10.862 $ 10.000(1)
Value at end of period $ 12.744 $ 10.862
Number of accumulation units
outstanding at end of period 165,860 47,204
AETNA GROWTH VP
Value at beginning of period
Value at end of period
Number of accumulation units
outstanding at end of period
AETNA GROWTH AND
INCOME VP
Value at beginning of period $ 14.077 $ 10.778 $ 11.020(2)
Value at end of period $ 17.302 $ 14.077 $ 10.778
Number of accumulation units
outstanding at end of period 29,130,769 2,370,234 602,838
AETNA HIGH YIELD VP
Value at beginning of period
Value at end of period
Number of accumulation units
outstanding at end of period
AETNA INDEX PLUS LARGE
CAP VP
Value at beginning of period $ 10.000(5)
Value at end of period $ 10.924
Number of accumulation units
outstanding at end of period 13,142
AETNA INDEX PLUS MID
CAP VP
Value at beginning of period
Value at end of period
Number of accumulation units
outstanding at end of period
AETNA INDEX PLUS SMALL
CAP VP
Value at beginning of period
Value at end of period
Number of accumulation units
outstanding at end of period
AETNA INTERNATIONAL VP
Value at beginning of period
Value at end of period
Number of accumulation units
outstanding at end of period
</TABLE>
66
<PAGE>
Condensed Financial Information (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995 1994
---------------- ---------------- ---------------- ------------ ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
AETNA LEGACY VP
Value at beginning of period $ 14.310 $ 13.550 $ 11.982 $ 10.626 $ 10.000(7)
Value at end of period $ 15.135 $ 14.310 $ 13.550 $ 11.982 $ 10.626
Number of accumulation units
outstanding at end of period 412,346 507,368 382,217 188,303 20,531
AETNA MONEY MARKET VP
Value at beginning of period $ 12.447 $ 11.951 $ 11.473 $ 11.026 $ 10.528 $ 10.241(2)
Value at end of period $ 12.917 $ 12.447 $ 11.951 $ 11.473 $ 11.026 $ 10.528
Number of accumulation units
outstanding at end of period 2,636,397 2,329,195 2,227,782 3,510,588 544,383 334,746
AETNA REAL ESTATE
SECURITIES VP
Value at beginning of period $ 8.873 $ 9.904(4)
Value at end of period $ 8.393 $ 8.873
Number of accumulation units
outstanding at end of period 12,462 12,789
AETNA SMALL COMPANY VP
Value at beginning of period $ 13.633 $ 13.654 $ 10.816(3)
Value at end of period $ 17.617 $ 13.633 $ 13.654
Number of accumulation units
outstanding at end of period 183,701 208,454 71,911
AETNA VALUE
OPPORTUNITY VP
Value at beginning of period $ 16.030 $ 13.261 $ 10.977(3)
Value at end of period $ 18.930 $ 16.030 $ 13.261
Number of accumulation units
outstanding at end of period 118,476 112,739 33,295
AIM V.I. CAPITAL
APPRECIATION FUND
Value at beginning of period $ 10.217(8)
Value at end of period $ 13.753
Number of accumulation units
outstanding at end of period 7,992
AIM V.I. GROWTH FUND
Value at beginning of period $ 9.819(8)
Value at end of period $ 12.069
Number of accumulation units
outstanding at end of period 31,910
AIM V.I. GROWTH AND
INCOME FUND
Value at beginning of period $ 9.627(8)
Value at end of period $ 11.716
Number of accumulation units
outstanding at end of period 53,572
AIM V.I. VALUE FUND
Value at beginning of period $ 9.746(8)
Value at end of period $ 11.506
Number of accumulation units
outstanding at end of period 49,173
CALVERT SOCIAL
BALANCED PORTFOLIO
Value at beginning of period $ 10.500 $ 9.839(4)
Value at end of period $ 11.637 $ 10.500
Number of accumulation units
outstanding at end of period 29,860 17,068
FIDELITY VIP EQUITY-
INCOME PORTFOLIO
Value at beginning of period $ 21.848 $ 19.818 $ 15.664 $ 13.880 $ 10.403 $ 10.000(9)
Value at end of period $ 22.942 $ 21.848 $ 19.818 $ 15.664 $ 13.880 $ 10.403
Number of accumulation units
outstanding at end of period 1,171,916 1,332,063 1,311,211 1,166,495 766,360 100,574
FIDELITY VIP GROWTH
PORTFOLIO
Value at beginning of period $ 26.641 $ 19.339 $ 15.858 $ 14.000 $ 10.472 $ 10.000(9)
Value at end of period $ 36.160 $ 26.641 $ 19.339 $ 15.858 $ 14.000 $ 10.472
Number of accumulation units
outstanding at end of period 1,477,316 1,278,104 1,110,079 994,616 612,992 121,070
FIDELITY VIP OVERSEAS
PORTFOLIO
Value at beginning of period $ 14.074 $ 12.640 $ 11.473 $ 10.262 $ 9.474 $ 10.000(9)
Value at end of period $ 19.825 $ 14.074 $ 12.640 $ 11.473 $ 10.262 $ 9.474
Number of accumulation units
outstanding at end of period 164,209 194,687 221,450 182,533 166,303 54,387
</TABLE>
67
<PAGE>
Condensed Financial Information (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995 1994
------------ ----------------- ------------------- ---------- ------------------ -----
<S> <C> <C> <C> <C> <C> <C>
FIDELITY VIP II
CONTRAFUND[RegTM] PORTFOLIO
Value at beginning of period $ 22.023 $ 17.156 $ 13.994 $11.681 $ 10.000(10)
Value at end of period $ 27.024 $ 22.023 $ 17.156 $13.994 $ 11.681
Number of accumulation units
outstanding at end of period 888,915 834,976 811,557 500,034 174,259
JANUS ASPEN AGGRESSIVE
GROWTH PORTFOLIO
Value at beginning of period $ 20.226 $ 15.254 $ 13.710 $12.861 $ 10.000(10)
Value at end of period $ 45.025 $ 20.226 $ 15.254 $13.710 $ 12.861
Number of accumulation units
outstanding at end of period 1,118,453 565,275 493,462 495,557 167,920
JANUS ASPEN BALANCED
PORTFOLIO
Value at beginning of period $ 20.657 $ 15.576 $ 12.917 $11.259 $ 10.000(1)
Value at end of period $ 25.859 $ 20.657 $ 15.576 $12.917 $ 11.259
Number of accumulation units
outstanding at end of period 760,024 447,035 241,028 127,631 34,072
JANUS ASPEN FLEXIBLE
INCOME PORTFOLIO
Value at beginning of period $ 10.419 $ 10.054(6)
Value at end of period $ 10.455 $ 10.419
Number of accumulation units
outstanding at end of period 58,739 54,517
JANUS ASPEN GROWTH
PORTFOLIO
Value at beginning of period $ 22.086 $ 16.485 $ 13.599 $11.626 $ 10.000(1)
Value at end of period $ 31.406 $ 22.086 $ 16.485 $13.599 $ 11.626
Number of accumulation units
outstanding at end of period 773,103 465,446 376,501 250,918 78,126
JANUS ASPEN WORLDWIDE
GROWTH PORTFOLIO
Value at beginning of period $ 23.910 $ 18.779 $ 15.566 $12.216 $ 10.000(10)
Value at end of period $ 38.832 $ 23.910 $ 18.779 $15.566 $ 12.216
Number of accumulation units
outstanding at end of period 1,490,250 1,360,741 1,206,175 526,646 65,384
OPPENHEIMER GLOBAL
SECURITIES FUND/VA
Value at beginning of period $ 10.018 $ 9.865(6)
Value at end of period $ 15.681 $ 10.018
Number of accumulation units
outstanding at end of period 29,387 11,129
OPPENHEIMER STRATEGIC
BOND FUND/VA
Value at beginning of period $ 9.895 $ 9.988(6)
Value at end of period $ 10.048 $ 9.895
Number of accumulation units
outstanding at end of period 20,573 13,885
PPI MFS CAPITAL
OPPORTUNITIES
PORTFOLIO
Value at beginning of period $ 10.495 $ 9.828(6)
Value at end of period $ 15.421 $ 10.495
Number of accumulation units
outstanding at end of period 77,143 42,213
PPI MFS EMERGING
EQUITIES PORTFOLIO
Value at beginning of period $ 19.114 $ 14.927 $ 15.114(11)
Value at end of period $ 28.481 $ 19.114 $ 14.927
Number of accumulation units
outstanding at end of period 1,234,595 1,369,984 1,368,373
PPI MFS RESEARCH
GROWTH PORTFOLIO
Value at beginning of period $ 16.758 $ 13.795 $ 14.067(11)
Value at end of period $ 20.527 $ 16.758 $ 13.795
Number of accumulation units
outstanding at end of period 930,521 1,054,685 1,200,982
</TABLE>
68
<PAGE>
Condensed Financial Information (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995 1994
---------- ---------- ------------------ ------ ------ -----
<S> <C> <C> <C> <C> <C> <C>
PPI SCUDDER
INTERNATIONAL GROWTH
PORTFOLIO
Value at beginning of period $19.978 $16.986 $ 16.776(11)
Value at end of period $31.255 $19.978 $ 16.986
Number of accumulation units
outstanding at end of period 437,547 467,484 516,231
PPI T. ROWE PRICE
GROWTH EQUITY
PORTFOLIO
Value at beginning of period $20.328 $16.131 $ 15.809(11)
Value at end of period $24.557 $20.328 $ 16.131
Number of accumulation units
outstanding at end of period 668,583 717,872 701,952
</TABLE>
- -----------------
* This table applies to all 1994 and 1992 internal rollover contracts issued
on or after March 23, 1994 and all contracts not connected with an internal
transfer (i.e., external rollovers or contracts established with at least a
$1,000 annual purchase payment) issued on or after March 29, 1994.
(1) Funds were first available in this option during June 1995.
(2) Funds were first received in this option during April 1994.
(3) Funds were first received in this option during May 1997.
(4) Funds were first received in this option during June 1998.
(5) The initial accumulation unit value was established during August 1996,
when the portfolio became available under the contract, when funds were
first received in this option or when the applicable daily asset charge
was first utilized.
(6) Funds were first received in this option during May 1998.
(7) Funds were first available in this option during July 1995.
(8) Funds were first received in this option during May 1999.
(9) Funds were first received in this option during May 1994.
(10) Funds were first available in this option during May 1995.
(11) Funds were first received in this option during November 1997.
69
<PAGE>
Condensed Financial Information
- --------------------------------------------------------------------------------
(FOR CONTRACTS WITH TOTAL SEPARATE ACCOUNT ANNUAL EXPENSES OF 1.15%)
(Selected data for accumulation units outstanding throughout each period)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The condensed financial information presented below for each of the periods in
the six-year period ended December 31, 1999 (as applicable), is derived from
the financial statements of the separate account, which have been audited by
KPMG LLP, independent auditors. The financial statements and the independent
auditors' report thereon for the year ended December 31, 1999 are included in
the Statement of Additional Information.
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995 1994
--------------- ---------- ---------------- ---------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
AETNA ASCENT VP
Value at beginning of period $ 16.395 $ 15.900 $ 13.415 $ 10.982 $ 10.000(1)
Value at end of period $ 18.533 $ 16.395 $ 15.900 $ 13.415 $ 10.982
Number of accumulation units
outstanding at end of period 11,214 21,004 20,154 28,982 15,055
AETNA BALANCED VP, INC.
Value at beginning of period $ 21.836 $ 18.889 $ 15.600 $ 13.703 $ 10.880 $ 10.951(2)
Value at end of period $ 24.523 $ 21.836 $ 18.889 $ 15.600 $ 13.703 $ 10.880
Number of accumulation units
outstanding at end of period 144,540 167,720 166,915 172,588 138,271 49,333
AETNA BOND VP
Value at beginning of period $ 14.211 $ 13.293 $ 12.416 $ 12.125 $ 10.373 $ 10.367(3)
Value at end of period $ 13.945 $ 14.211 $ 13.293 $ 12.416 $ 12.125 $ 10.373
Number of accumulation units
outstanding at end of period 71,392 102,450 98,338 92,017 50,261 16,110
AETNA CROSSROADS VP
Value at beginning of period $ 15.532 $ 14.835 $ 12.763 $ 10.868 $ 10.000(1)
Value at end of period $ 16.923 $ 15.532 $ 14.835 $ 12.763 $ 10.868
Number of accumulation units
outstanding at end of period 39,125 35,562 20,404 15,074 2,394
AETNA GROWTH VP
Value at beginning of period $ 17.943 $ 13.183 $ 14.472(4)
Value at end of period $ 23.940 $ 17.943 $ 13.183
Number of accumulation units
outstanding at end of period 30,865 26,153 2,122
AETNA GROWTH AND
INCOME VP
Value at beginning of period $ 25.225 $ 22.287 $ 17.357 $ 14.108 $ 10.791 $ 10.875(3)
Value at end of period $ 29.280 $ 25.225 $ 22.287 $ 17.357 $ 14.108 $ 10.791
Number of accumulation units
outstanding at end of period 488,810 548,039 461,571 405,331 273,578 110,420
AETNA INDEX PLUS LARGE
CAP VP
Value at beginning of period $ 18.815 $ 14.463 $ 11.406(5)
Value at end of period $ 23.120 $ 18.815 $ 14.463
Number of accumulation units
outstanding at end of period 56,950 45,787 10,121
AETNA INDEX PLUS SMALL
CAP VP
Value at beginning of period $ 9.414(6)
Value at end of period $ 9.661
Number of accumulation units
outstanding at end of period 1,062
AETNA INTERNATIONAL VP
Value at beginning of period $ 11.160(7)
Value at end of period $ 14.618
Number of accumulation units
outstanding at end of period 7,828
AETNA LEGACY VP
Value at beginning of period $ 14.360 $ 13.583 $ 12.000 $ 10.631 $ 10.000(8)
Value at end of period $ 15.203 $ 14.360 $ 13.583 $ 12.000 $ 10.631
Number of accumulation units
outstanding at end of period 43,422 76,396 77,495 19,864 17,106
AETNA MONEY MARKET VP
Value at beginning of period $ 12.512 $ 12.002 $ 11.510 $ 11.051 $ 10.541 $ 10.484(2)
Value at end of period $ 12.997 $ 12.512 $ 12.002 $ 11.510 $ 11.051 $ 10.541
Number of accumulation units
outstanding at end of period 348,708 190,680 137,699 173,308 145,629 9,736
AETNA SMALL COMPANY VP
Value at beginning of period $ 13.657 $ 13.664 $ 11.541(9)
Value at end of period $ 17.665 $ 13.657 $ 13.664
Number of accumulation units
outstanding at end of period 20,668 20,254 13,843
</TABLE>
70
<PAGE>
Condensed Financial Information (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995 1994
------------------ ---------- ------------------ ---------- ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
AETNA VALUE
OPPORTUNITY VP
Value at beginning of period $ 16.754(10) $ 13.271 $ 12.904(11)
Value at end of period $ 18.982 $ 16.057 $ 13.271
Number of accumulation units
outstanding at end of period 2,242 0 1,510
AIM V.I. CAPITAL
APPRECIATION FUND
Value at beginning of period $ 10.465(12)
Value at end of period $ 13.762
Number of accumulation units
outstanding at end of period 79
AIM V.I. GROWTH FUND
Value at beginning of period $ 10.207(12)
Value at end of period $ 12.077
Number of accumulation units
outstanding at end of period 14
AIM V.I. VALUE FUND
Value at beginning of period $ 10.171(12)
Value at end of period $ 11.514
Number of accumulation units
outstanding at end of period 662
FIDELITY VIP EQUITY-
INCOME PORTFOLIO
Value at beginning of period $ 21.948 $ 19.890 $ 15.705 $ 13.902 $ 10.409 $ 10.000(13)
Value at end of period $ 23.071 $ 21.948 $ 19.890 $ 15.705 $ 13.902 $ 10.409
Number of accumulation units
outstanding at end of period 94,759 114,565 162,627 194,798 118,679 43,852
FIDELITY VIP GROWTH
PORTFOLIO
Value at beginning of period $ 26.764 $ 19.409 $ 15.900 $ 14.023 $ 10.479 $ 10.000(2)
Value at end of period $ 36.363 $ 26.764 $ 19.409 $ 15.900 $ 14.023 $ 10.479
Number of accumulation units
outstanding at end of period 90,675 76,869 83,442 87,971 45,765 32,592
FIDELITY VIP OVERSEAS
PORTFOLIO
Value at beginning of period $ 14.140 $ 12.686 $ 11.503 $ 10.278 $ 9.480 $ 10.000(2)
Value at end of period $ 19.936 $ 14.140 $ 12.686 $ 11.503 $ 10.278 $ 9.480
Number of accumulation units
outstanding at end of period 8,089 15,876 23,721 35,293 4,284 5,098
FIDELITY VIP II
CONTRAFUND[RegTM] PORTFOLIO
Value at beginning of period $ 22.103 $ 17.201 $ 14.016 $ 11.689 $ 10.000(14)
Value at end of period $ 27.150 $ 22.103 $ 17.201 $ 14.016 $ 11.689
Number of accumulation units
outstanding at end of period 21,611 19,136 16,983 13,300 5,453
JANUS ASPEN AGGRESSIVE
GROWTH PORTFOLIO
Value at beginning of period $ 20.300 $ 15.295 $ 13.733 $ 12.869 $ 10.000(14)
Value at end of period $ 45.235 $ 20.300 $ 15.295 $ 13.733 $ 12.869
Number of accumulation units
outstanding at end of period 57,150 15,876 13,373 24,366 22,050
JANUS ASPEN BALANCED
PORTFOLIO
Value at beginning of period $ 20.731 $ 15.616 $ 12.938 $ 11.265 $ 10.000(1)
Value at end of period $ 25.978 $ 20.731 $ 15.616 $ 12.938 $ 11.265
Number of accumulation units
outstanding at end of period 73,950 22,911 24,214 15,488 9,383
JANUS ASPEN GROWTH
PORTFOLIO
Value at beginning of period $ 22.165 $ 16.528 $ 13.621 $ 11.633 $ 10.000(1)
Value at end of period $ 31.550 $ 22.165 $ 16.528 $ 13.621 $ 11.633
Number of accumulation units
outstanding at end of period 44,364 33,676 7,407 6,308 3,238
JANUS ASPEN WORLDWIDE
GROWTH PORTFOLIO
Value at beginning of period $ 23.996 $ 18.828 $ 15.592 $ 12.223 $ 10.000(14)
Value at end of period $ 39.011 $ 23.996 $ 18.828 $ 15.592 $ 12.223
Number of accumulation units
outstanding at end of period 58,658 74,104 59,450 33,350 2,617
OPPENHEIMER GLOBAL
SECURITIES FUND/VA
Value at beginning of period $ 10.923(12)
Value at end of period $ 15.707
Number of accumulation units
outstanding at end of period 658
</TABLE>
71
<PAGE>
Condensed Financial Information (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995 1994
---------- ----------------- ------------------ ------ ------ -----
<S> <C> <C> <C> <C> <C> <C>
PPI MFS CAPITAL
OPPORTUNITIES
PORTFOLIO
Value at beginning of period $10.502 $ 9.473(15)
Value at end of period $15.447 $ 10.502
Number of accumulation units
outstanding at end of period 12,266 12,126
PPI MFS EMERGING
EQUITIES PORTFOLIO
Value at beginning of period $19.216 $ 14.991 $ 15.178(16)
Value at end of period $28.661 $ 19.216 $ 14.991
Number of accumulation units
outstanding at end of period 48,709 72,542 97,555
PPI MFS RESEARCH
GROWTH PORTFOLIO
Value at beginning of period $16.844 $ 13.852 $ 14.124(16)
Value at end of period $20.653 $ 16.844 $ 13.852
Number of accumulation units
outstanding at end of period 12,985 5,155 1,447
PPI SCUDDER
INTERNATIONAL GROWTH
PORTFOLIO
Value at beginning of period $20.081 $ 17.056 $ 16.844(16)
Value at end of period $31.447 $ 20.081 $ 17.056
Number of accumulation units
outstanding at end of period 34,626 27,591 34,030
PPI T. ROWE PRICE
GROWTH EQUITY
PORTFOLIO
Value at beginning of period $20.400 $ 16.172 $ 15.848(16)
Value at end of period $24.669 $ 20.400 $ 16.172
Number of accumulation units
outstanding at end of period 43,662 47,436 44,362
</TABLE>
- -----------------
(1) Funds were first available in this option during June 1995.
(2) Funds were first received in this option during November 1994.
(3) Funds were first received in this option during October 1994.
(4) Funds were first received in this option during October 1997.
(5) Funds were first received in this option during January 1997.
(6) Funds were first received in this option during December 1999.
(7) Funds were first received in this option during October 1999.
(8) Funds were first available in this option during July 1995.
(9) Funds were first received in this option during June 1997.
(10) Funds were first received in this option during September 1999.
(11) Funds were first received in this option during August 1997.
(12) Funds were first received in this option during August 1999.
(13) Funds were first received in this option during September 1994.
(14) Funds were first available in this option during May 1995.
(15) Funds were first received in this option during November 1998.
(16) Funds were first received in this option during November 1997.
72
<PAGE>
Condensed Financial Information
- --------------------------------------------------------------------------------
(1992 CONTRACTS ISSUED PRIOR TO MARCH 1994)*
(Selected data for accumulation units outstanding throughout each period)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The condensed financial information presented below for each of the years in
the ten-year period ended December 31, 1999 (as applicable), is derived from
the financial statements of the separate account, which have been audited by
KPMG LLP, independent auditors. The financial statements and the independent
auditors' report thereon for the year ended December 31, 1999 are included in
the Statement of Additional Information.
<TABLE>
<CAPTION>
1999 1998 1997 1996
------------- ----------------- ----------------- -------------
<S> <C> <C> <C> <C>
AETNA ASCENT VP
Value at beginning of period $ 15.886 $ 15.422 $ 13.291(1)
Value at end of period $ 17.940 $ 15.886 $ 15.422
Number of accumulation units
outstanding at end of period 33,852 21,430 380
AETNA BALANCED VP, INC.
Value at beginning of period $ 28.524 $ 24.700 $ 20.419 $ 17.954
Value at end of period $ 32.002 $ 28.524 $ 24.700 $ 20.419
Number of accumulation units
outstanding at end of period 2,155,445 2,294,877 2,160,305 2,716,641
AETNA BOND VP
Value at beginning of period $ 54.819 $ 51.330 $ 47.992 $ 46.913
Value at end of period $ 53.738 $ 54.819 $ 51.330 $ 47.992
Number of accumulation units
outstanding at end of period 867,416 994,987 959,336 835,724
AETNA CROSSROADS VP
Value at beginning of period $ 15.120 $ 14.456 $ 12.577(1)
Value at end of period $ 16.458 $ 15.120 $ 14.456
Number of accumulation units
outstanding at end of period 30,738 31,468 873
AETNA GROWTH VP
Value at beginning of period $ 13.597 $ 11.392(2)
Value at end of period $ 18.124 $ 13.597
Number of accumulation units
outstanding at end of period 781 17
AETNA GROWTH AND
INCOME VP
Value at beginning of period $ 245.765 $ 217.359 $ 169.448 $ 137.869
Value at end of period $ 284.994 $ 245.765 $ 217.359 $ 169.448
Number of accumulation units
outstanding at end of period 1,555,542 1,747,097 1,826,355 2,071,139
AETNA INDEX PLUS LARGE
CAP VP
Value at beginning of period $ 18.772 $ 14.444 $ 14.493(3)
Value at end of period $ 23.044 $ 18.772 $ 14.444
Number of accumulation units
outstanding at end of period 2,748,955 1,302,825 17,771
AETNA INDEX PLUS MID
CAP VP
Value at beginning of period $ 11.338 $ 9.928(4)
Value at end of period $ 12.967 $ 11.338
Number of accumulation units
outstanding at end of period 73,984 35,201
AETNA INDEX PLUS SMALL
CAP VP
Value at beginning of period $ 9.157 $ 10.193(4)
Value at end of period $ 10.019 $ 9.157
Number of accumulation units
outstanding at end of period 118,433 81,388
AETNA LEGACY VP
Value at beginning of period $ 14.248 $ 13.491 $ 12.296(5)
Value at end of period $ 15.070 $ 14.248 $ 13.491
Number of accumulation units
outstanding at end of period 46,462 95,526 2,279
AETNA MONEY MARKET VP
Value at beginning of period $ 42.883 $ 41.174 $ 39.528 $ 37.988
Value at end of period $ 44.501 $ 42.883 $ 41.174 $ 39.528
Number of accumulation units
outstanding at end of period 845,679 564,537 455,502 597,656
AETNA VALUE
OPPORTUNITY VP
Value at beginning of period $ 12.088 $ 11.472(4)
Value at end of period $ 14.274 $ 12.088
Number of accumulation units
outstanding at end of period 74,768 33,957
<CAPTION>
1995 1994 1993 1992 1991 1990
------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
AETNA ASCENT VP
Value at beginning of period
Value at end of period
Number of accumulation units
outstanding at end of period
AETNA BALANCED VP, INC.
Value at beginning of period $ 14.270 $ 14.519 $ 13.379 $ 12.736 $ 10.896 $ 10.437
Value at end of period $ 17.954 $ 14.270 $ 14.519 $ 13.379 $ 12.736 $ 10.896
Number of accumulation units
outstanding at end of period 9,193,181 21,990,186 30,784,750 34,802,433 22,898,099 17,078,985
AETNA BOND VP
Value at beginning of period $ 40.173 $ 42.283 $ 39.038 $ 36.789 $ 31.192 $ 28.943
Value at end of period $ 46.913 $ 40.173 $ 42.283 $ 39.038 $ 36.789 $ 31.192
Number of accumulation units
outstanding at end of period 2,377,622 5,108,720 8,210,666 8,507,292 7,844,412 6,984,793
AETNA CROSSROADS VP
Value at beginning of period
Value at end of period
Number of accumulation units
outstanding at end of period
AETNA GROWTH VP
Value at beginning of period
Value at end of period
Number of accumulation units
outstanding at end of period
AETNA GROWTH AND
INCOME VP
Value at beginning of period $ 105.558 $ 107.925 $ 102.383 $ 97.165 $ 77.845 $ 76.311
Value at end of period $ 137.869 $ 105.558 $ 107.925 $ 102.383 $ 97.165 $ 77.845
Number of accumulation units
outstanding at end of period 6,364,000 13,966,072 21,148,863 24,201,565 20,948,226 18,362,906
AETNA INDEX PLUS LARGE
CAP VP
Value at beginning of period
Value at end of period
Number of accumulation units
outstanding at end of period
AETNA INDEX PLUS MID
CAP VP
Value at beginning of period
Value at end of period
Number of accumulation units
outstanding at end of period
AETNA INDEX PLUS SMALL
CAP VP
Value at beginning of period
Value at end of period
Number of accumulation units
outstanding at end of period
AETNA LEGACY VP
Value at beginning of period
Value at end of period
Number of accumulation units
outstanding at end of period
AETNA MONEY MARKET VP
Value at beginning of period $ 36.271 $ 35.282 $ 34.619 $ 33.812 $ 32.138 $ 30.012
Value at end of period $ 37.988 $ 36.271 $ 35.282 $ 34.619 $ 33.812 $ 32.138
Number of accumulation units
outstanding at end of period 1,836,260 3,679,802 5,086,515 7,534,662 8,430,082 10,220,110
AETNA VALUE
OPPORTUNITY VP
Value at beginning of period
Value at end of period
Number of accumulation units
outstanding at end of period
</TABLE>
73
<PAGE>
Condensed Financial Information (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998 1997 1996
------------- ------------------ ------------------ -------------
<S> <C> <C> <C> <C>
CALVERT SOCIAL
BALANCED PORTFOLIO
Value at beginning of period $ 27.186 $ 23.675 $ 19.965 $ 17.951
Value at end of period $ 30.131 $ 27.186 $ 23.675 $ 19.965
Number of accumulation units
outstanding at end of period 880,319 917,567 929,282 898,279
FIDELITY VIP EQUITY-
INCOME PORTFOLIO
Value at beginning of period $ 18.285 $ 16.587 $ 13.110 $ 11.617
Value at end of period $ 19.201 $ 18.285 $ 16.587 $ 13.110
Number of accumulation units
outstanding at end of period 2,271,494 2,533,673 2,139,178 1,454,755
FIDELITY VIP GROWTH
PORTFOLIO
Value at beginning of period $ 19.406 $ 14.087 $ 11.843(7)
Value at end of period $ 26.340 $ 19.406 $ 14.087
Number of accumulation units
outstanding at end of period 78 72 29
FIDELITY VIP II
CONTRAFUND[RegTM] PORTFOLIO
Value at beginning of period $ 22.177 $ 17.276 $ 14.092 $ 11.763
Value at end of period $ 27.214 $ 22.177 $ 17.276 $ 14.092
Number of accumulation units
outstanding at end of period 3,780,287 3,333,320 2,706,862 1,522,169
JANUS ASPEN AGGRESSIVE
GROWTH PORTFOLIO
Value at beginning of period $ 24.098 $ 18.174 $ 16.334 $ 15.323
Value at end of period $ 53.644 $ 24.098 $ 18.174 $ 16.334
Number of accumulation units
outstanding at end of period 3,274,450 2,142,130 1,939,607 1,893,718
JANUS ASPEN BALANCED
PORTFOLIO
Value at beginning of period $ 19.914 $ 15.016 $ 12.453 $ 10.853
Value at end of period $ 24.929 $ 19.914 $ 15.016 $ 12.453
Number of accumulation units
outstanding at end of period 476 3,698 7,873 231
JANUS ASPEN FLEXIBLE
INCOME PORTFOLIO
Value at beginning of period $ 15.548 $ 14.430 $ 13.074 $ 12.124
Value at end of period $ 15.601 $ 15.548 $ 14.430 $ 13.074
Number of accumulation units
outstanding at end of period 6,629 8,967 5,211 3,761
JANUS ASPEN GROWTH
PORTFOLIO
Value at beginning of period $ 22.529 $ 16.816 $ 13.872 $ 11.859
Value at end of period $ 32.036 $ 22.529 $ 16.816 $ 13.872
Number of accumulation units
outstanding at end of period 2,721,885 1,354,047 1,109,942 663,945
JANUS ASPEN WORLDWIDE
GROWTH PORTFOLIO
Value at beginning of period $ 23.797 $ 18.690 $ 15.493 $ 12.158
Value at end of period $ 38.648 $ 23.797 $ 18.690 $ 15.493
Number of accumulation units
outstanding at end of period 5,548,674 4,687,167 3,873,511 2,090,908
OPPENHEIMER GLOBAL
SECURITIES FUND/VA
Value at beginning of period $ 10.303 $ 10.077(11)
Value at end of period $ 16.126 $ 10.303
Number of accumulation units
outstanding at end of period 59,571 20,548
OPPENHEIMER STRATEGIC
BOND FUND/VA
Value at beginning of period $ 9.935 $ 10.055(4)
Value at end of period $ 10.089 $ 9.935
Number of accumulation units
outstanding at end of period 173,219 100,555
PPI MFS CAPITAL
OPPORTUNITIES
PORTFOLIO
Value at beginning of period $ 29.339 $ 23.440 $ 23.106(12)
Value at end of period $ 43.112 $ 29.339 $ 23.440
Number of accumulation units
outstanding at end of period 2,448,587 2,244,308 2,018,219
<CAPTION>
1995 1994 1993 1992 1991 1990
----------------- ------------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
CALVERT SOCIAL
BALANCED PORTFOLIO
Value at beginning of period $ 13.990 $ 14.640 $13.726 $12.913 $11.233 $10.568
Value at end of period $ 17.951 $ 13.990 $14.640 $13.726 $12.913 $11.233
Number of accumulation units
outstanding at end of period 856,361 743,464 705,415 503,006 355,851 148,576
FIDELITY VIP EQUITY-
INCOME PORTFOLIO
Value at beginning of period $ 10.000(6)
Value at end of period $ 11.617
Number of accumulation units
outstanding at end of period 628,582
FIDELITY VIP GROWTH
PORTFOLIO
Value at beginning of period
Value at end of period
Number of accumulation units
outstanding at end of period
FIDELITY VIP II
CONTRAFUND[RegTM] PORTFOLIO
Value at beginning of period $ 10.000(6)
Value at end of period $ 11.763
Number of accumulation units
outstanding at end of period 525,476
JANUS ASPEN AGGRESSIVE
GROWTH PORTFOLIO
Value at beginning of period $ 12.169 $ 10.000(8)
Value at end of period $ 15.323 $ 12.169
Number of accumulation units
outstanding at end of period 1,280,953 393,553
JANUS ASPEN BALANCED
PORTFOLIO
Value at beginning of period $ 10.000(9)
Value at end of period $ 10.853
Number of accumulation units
outstanding at end of period 161
JANUS ASPEN FLEXIBLE
INCOME PORTFOLIO
Value at beginning of period $ 9.911 $ 10.000(10)
Value at end of period $ 12.124 $ 9.911
Number of accumulation units
outstanding at end of period 3,345 1,555
JANUS ASPEN GROWTH
PORTFOLIO
Value at beginning of period $ 10.000(9)
Value at end of period $ 11.859
Number of accumulation units
outstanding at end of period 109,717
JANUS ASPEN WORLDWIDE
GROWTH PORTFOLIO
Value at beginning of period $ 10.000(9)
Value at end of period $ 12.158
Number of accumulation units
outstanding at end of period 314,653
OPPENHEIMER GLOBAL
SECURITIES FUND/VA
Value at beginning of period
Value at end of period
Number of accumulation units
outstanding at end of period
OPPENHEIMER STRATEGIC
BOND FUND/VA
Value at beginning of period
Value at end of period
Number of accumulation units
outstanding at end of period
PPI MFS CAPITAL
OPPORTUNITIES
PORTFOLIO
Value at beginning of period
Value at end of period
Number of accumulation units
outstanding at end of period
</TABLE>
74
<PAGE>
Condensed Financial Information (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995 1994 1993 1992 1991 1990
------------ ------------ ------------------- ------ ------ ------ ------ ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PPI MFS EMERGING
EQUITIES PORTFOLIO
Value at beginning of period $ 19.268 $ 15.046 $ 15.236(12)
Value at end of period $ 28.710 $ 19.268 $ 15.046
Number of accumulation units
outstanding at end of period 3,024,975 3,101,880 2,707,904
PPI MFS RESEARCH
GROWTH PORTFOLIO
Value at beginning of period $ 14.528 $ 11.960 $ 12.195(12)
Value at end of period $ 17.796 $ 14.528 $ 11.960
Number of accumulation units
outstanding at end of period 194,296 1,379,653 232,418
PPI SCUDDER
INTERNATIONAL GROWTH
PORTFOLIO
Value at beginning of period $ 20.829 $ 17.709 $ 17.490(12)
Value at end of period $ 32.585 $ 20.829 $ 17.709
Number of accumulation units
outstanding at end of period 2,807,485 2,962,631 3,237,710
PPI T. ROWE PRICE
GROWTH EQUITY
PORTFOLIO
Value at beginning of period $ 20.929 $ 16.608 $ 16.276(12)
Value at end of period $ 25.283 $ 20.929 $ 16.608
Number of accumulation units
outstanding at end of period 1,549,310 1,564,888 1,317,058
</TABLE>
- -----------------
* This table applies to 1992 internal rollover contracts issued prior to March
23, 1994 and 1992 contracts not connected with an internal transfer (i.e.,
external rollovers or contracts established with at least a $1,000 annual
purchase payment) issued prior to March 29, 1994.
(1) Funds were first received in this option during February 1997.
(2) Funds were first received in this option during September 1998.
(3) Funds were first received in this option during December 1997.
(4) Funds were first received in this option during May 1998.
(5) Funds were first received in this option during May 1997.
(6) The initial accumulation unit value was established at $10.000 during May
1995, when the fund became available under the contract.
(7) Funds were first received in this option during January 1997.
(8) The initial accumulation unit value was established at $10.000 during June
1994, when funds were first received in this option.
(9) The initial accumulation unit value was established at $10.000 during July
1995, when the fund became available under the contract.
(10) The initial accumulation unit value was established at $10.000 during
November 1994,when funds were first received in this option.
(11) Funds were first received in this option during June 1998.
(12) Funds were first received in this option during November 1997.
75
<PAGE>
Please attach to your application
- --------------------------------------------------------------------------------
I hereby acknowledge receipt of an Account C Individual Variable Annuity
Contract Prospectus dated May 1, 2000 for Individual Retirement Annuities and
Simplified Employee Pension Plans, as well as the current prospectus pertaining
to the Guaranteed Accumulation Account, if applicable.
- --- Please send an Account C Statement of Additional Information (Form No.
SAI.75988-00) dated May 1, 2000.
- --------------------------------------------------------------------------------
CONTRACT HOLDER'S SIGNATURE
- --------------------------------------------------------------------------------
DATE
PRO.75988-00
<PAGE>
- --------------------------------------------------------------------------------
VARIABLE ANNUITY ACCOUNT C
OF
AETNA LIFE INSURANCE AND ANNUITY COMPANY
- --------------------------------------------------------------------------------
Statement of Additional Information dated May 1, 2000
Individual Deferred Fixed or Variable Annuity Contracts for Individual
Retirement Annuities under Section 408(b), Roth Individual Retirement Annuities
under Section 408A and Simplified Employee Pension Plans under Section 408(k)
This Statement of Additional Information is not a prospectus and should be read
in conjunction with the current prospectus for Variable Annuity Account C (the
"separate account") dated May 1, 2000.
A free prospectus is available upon request from the local Aetna Life Insurance
and Annuity Company office or by writing to or calling:
Aetna Financial Services
Individual Annuity Services
151 Farmington Avenue
Hartford, Connecticut 06156-1277
1-800-262-3862
Read the prospectus before you invest. Unless otherwise indicated, terms used in
this Statement of Additional Information shall have the same meaning as in the
prospectus.
TABLE OF CONTENTS
Page
General Information and History.......................................... 2
Variable Annuity Account C............................................... 2
Offering and Purchase of Contracts....................................... 3
Performance Data......................................................... 3
General.............................................................. 3
Average Annual Total Return Quotations............................... 4
Income Phase Payments.................................................... 11
Sales Material and Advertising........................................... 12
Independent Auditors..................................................... 13
Financial Statements of the Separate Account............................. S-1
Financial Statements of Aetna Life Insurance and Annuity Company
and Subsidiaries..................................................... F-1
<PAGE>
GENERAL INFORMATION AND HISTORY
Aetna Life Insurance and Annuity Company (the Company, we, us, our) issues the
contract described in the prospectus and is responsible for providing each
contract's insurance and annuity benefits. We are a stock life insurance company
organized under the insurance laws of the State of Connecticut in 1976 and an
indirect wholly-owned subsidiary of Aetna Inc. Through a merger, our assets
include the business of Aetna Variable Annuity Life Insurance Company (formerly
Participating Annuity Life Insurance Company organized in 1954). Our Home Office
is located at 151 Farmington Avenue, Hartford, Connecticut 06156.
As of December 31, 1999, the Company and its subsidiary life company had $53
billion invested through their products, including $39 billion in their separate
accounts (of which the Company or its subsidiary Aeltus Investment Management,
Inc., oversees the management of $24 billion). The Company is ranked among the
top 2% of all U.S. life insurance companies rated by A.M. Best Company based on
assets as of December 31, 1998.
In addition to serving as the principal underwriter and the depositor for the
separate account, the Company is a registered investment adviser under the
Investment Advisers Act of 1940 and a registered broker-dealer under the
Securities Exchange Act of 1934. We provide investment advice to several of the
registered management investment companies offered as variable investment
options under the contracts funded by the separate account (see "Variable
Annuity Account C" below).
Other than the mortality and expense risk charge and administrative expense
charge described in the prospectus, all expenses incurred in the operations of
the separate account are borne by the Company. See "Fees" in the prospectus. We
receive reimbursement for certain administrative costs from some advisers of the
funds used as funding options under the contract. These fees generally range up
to 0.425%.
The assets of the separate account are held by the Company. The separate account
has no custodian. However, the funds in whose shares the assets of the separate
account are invested each have custodians, as discussed in their respective
prospectuses.
From this point forward, the term "contract(s)" refers only to those offered
through the prospectus.
VARIABLE ANNUITY ACCOUNT C
Variable Annuity Account C is a separate account established by the Company for
the purpose of funding variable annuity contracts issued by the Company. The
separate account is registered with the Securities and Exchange Commission as a
unit investment trust under the Investment Company Act of 1940, as amended.
Purchase payments to accounts under the contract may be allocated to one or more
of the subaccounts. Each subaccount invests in the shares of only one of the
funds listed below. We may make additions to, deletions from or substitutions of
available investment options as permitted by law and subject to the conditions
of the contract. The availability of the funds is subject to applicable
regulatory authorization. Not all funds are available in all jurisdictions or
under all contracts.
2
<PAGE>
The funds currently available under the contract are as follows:
Aetna Ascent VP
Aetna Balanced VP, Inc.
Aetna Income Shares d/b/a Aetna Bond VP
Aetna Crossroads VP
Aetna Growth VP
Aetna Variable Fund d/b/a Aetna Growth and Income VP
Aetna High Yield VP*
Aetna Index Plus Large Cap VP
Aetna Index Plus Mid Cap VP
Aetna Index Plus Small Cap VP
Aetna International VP
Aetna Legacy VP
Aetna Variable Encore Fund d/b/a Aetna Money Market VP
Aetna Real Estate Securities VP*
Aetna Small Company VP
Aetna Technology VP
Aetna Value Opportunity VP
AIM V.I. Capital Appreciation Fund
AIM V.I. Growth Fund
AIM V.I. Growth and Income Fund
AIM V.I. Value Fund
Calvert Social Balanced Portfolio
Fidelity Variable Insurance Products Fund (VIP) Equity-Income
Portfolio
Fidelity Variable Insurance Products Fund (VIP) Growth Portfolio
Fidelity Variable Insurance Products Fund (VIP) Overseas Portfolio
Fidelity Variable Insurance Products Fund II (VIP II) Contrafund[RegTM]
Portfolio
Janus Aspen Aggressive Growth Portfolio
Janus Aspen Balanced Portfolio
Janus Aspen Flexible Income Portfolio
Janus Aspen Growth Portfolio
Janus Aspen Worldwide Growth Portfolio
Oppenheimer Global Securities Fund/VA
Oppenheimer Strategic Bond Fund/VA
Portfolio Partners, Inc. (PPI) MFS Capital Opportunities Portfolio
(formerly PPI MFS Value Equity Portfolio)
Portfolio Partners, Inc. (PPI) MFS Emerging Equities Portfolio
Portfolio Partners, Inc. (PPI) MFS Research Growth Portfolio
Portfolio Partners, Inc. (PPI) Scudder International Growth
Portfolio
Portfolio Partners, Inc. (PPI) T. Rowe Price Growth Equity
Portfolio
*Effective May 15, 2000, transfers or deposits are not allowed into the
subaccounts investing in these funds except those made pursuant to standing
instructions (e.g., dollar cost averaging) in effect prior to this date.
Complete descriptions of each of the funds, including their investment
objectives, policies, risks and fees and expenses, are contained in the
prospectuses and statements of additional information for each of the funds.
OFFERING AND PURCHASE OF CONTRACTS
The Company is both the depositor and the principal underwriter for the
securities sold under the prospectus. We offer the contracts through life
insurance agents licensed to sell variable annuities who are registered
representatives of the Company or of other registered broker-dealers who have
sales agreements with the Company. The offering of the contracts is continuous.
A description of the manner in which the contracts are purchased can be found in
the prospectus under the sections entitled "Purchase and Rights" and "Your
Account Value."
PERFORMANCE DATA
GENERAL
From time to time we may advertise different types of historical performance for
the subaccounts of the separate account available under the contract. We may
advertise the "standardized average annual total returns," calculated in a
manner prescribed by the Securities and Exchange Commission (the "standardized
return"), as well as "non-standardized returns," both of which are described
below.
The standardized and non-standardized total return figures are computed
according to a formula in which a hypothetical initial purchase payment of
$1,000 is applied under a deferred annuity contract to the various subaccounts
under the contract, and then related to the ending redeemable values over one,
five and ten year periods (or fractional periods thereof). The redeemable value
is then divided by the initial investment and this quotient is taken to the Nth
root (N represents the number of years in the period) and 1 is subtracted from
the result which is then expressed as a percentage, carried to at least the
nearest hundredth of a percent. The standardized figures use the actual returns
of the fund since the date contributions were first received in the
3
<PAGE>
fund under the separate account, adjusted to reflect the deduction of the
maximum recurring charges under the contract during each period (i.e., 1.25%
mortality and expense risk charge, $30 annual maintenance fee and early
withdrawal charges as described below). Table I reflects the early withdrawal
charge schedule of 1% during the first contract year and 0% thereafter as shown
in Schedule A of the prospectus, Table II reflects the early withdrawal charge
of 5% grading down to 0% after nine contract years as shown in Schedule B of the
prospectus and Table III reflects the early withdrawal charge of 6% grading down
to 0% after seven years as shown in Schedule C of the prospectus. These charges
will be deducted on a pro rata basis in the case of fractional periods. The
maintenance fee is converted to a percentage of assets based on the average
account size under the contract described in the prospectus. The total return
figures shown below may be different from the actual historical total return
under your contract because for periods prior to 1994 the subaccount's
investment performance was based on the performance of the underlying fund plus
any cash held by the subaccount.
The non-standardized figures will be calculated in a similar manner, except that
they will not reflect the deduction of any applicable early withdrawal charge,
and in some advertisements will also exclude the effect of the annual
maintenance fee. The deduction of the early withdrawal charge and the annual
maintenance fee would decrease the level of performance shown if reflected in
these calculations. The non-standardized figures may also include monthly,
quarterly, year-to-date and three-year periods, and may include returns
calculated from the fund's inception date and/or the date contributions were
first received in the fund under the separate account. The non-standardized
returns shown in the tables below reflect the deduction of the maximum recurring
charges under the contract except the early withdrawal charge. The annual
maintenance fee has been deducted for the purposes of calculating the returns.
Investment results of the funds will fluctuate over time, and any presentation
of the subaccounts' total return quotations for any prior period should not be
considered as a representation of how the subaccounts will perform in any future
period. Additionally, the account value upon redemption may be more or less than
your original cost.
AVERAGE ANNUAL TOTAL RETURN QUOTATIONS - Standardized and Non-Standardized
The tables below reflect the average annual standardized and non-standardized
total return quotation figures for the periods ended December 31, 1999 for the
subaccounts under the contract. The standardized returns assume the maximum
charges under the contract as described under "General" above. The
non-standardized returns assume the same charges but do not include the early
withdrawal charges.
For the subaccounts funded by the Portfolio Partners portfolios, two sets of
performance returns are shown for each subaccount: one showing performance based
solely on the performance of the Portfolio Partners portfolio from November 28,
1997 the date the portfolio commenced operations, and one quotation based on (a)
performance through November 26, 1997 of the fund it replaced under many
contracts and (b) after November 26, 1997 based on the performance of the
Portfolio Partners portfolio.
For those subaccounts where results are not available for the full calendar
period indicated, performance for such partial periods is shown in the column
labeled "Since Inception." For standardized performance, the "Since Inception"
column shows the average annual return since the date contributions were first
received in the fund under the separate account. For non-standardized
performance, the "Since Inception" column shows the average annual total return
since the fund's inception date.
4
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------
Date
Table I Contributions
(corresponding with early withdrawal charge Schedule A) STANDARDIZED First Received
Under the
Separate Account
- ------------------------------------------------------------------------------------------------------------------------------------
Since
SUBACCOUNT 1 Year 5 Year 10 Year Inception*
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Aetna Ascent VP 12.85% 14.54% 07/05/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Balanced VP, Inc.(1) 12.12% 17.42% 11.79%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Bond VP(1) (2.05%) 5.91% 6.30%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Crossroads VP 8.77% 12.24% 07/05/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Growth VP 33.22% 34.48% 05/30/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Growth and Income VP(1) 15.88% 21.90% 14.01%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna High Yield VP 5.65% (1.47%) 05/04/1998
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Large Cap VP 22.68% 28.32% 10/31/1996
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Mid Cap VP 14.29% 13.33% 05/04/1998
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Small Cap VP 9.33% (2.21%) 05/04/1998
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna International VP 49.38% 24.14% 05/04/1998
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Legacy VP 5.69% 9.90% 07/05/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Money Market VP(1)(2) 3.70% 4.10% 3.94%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Real Estate Securities VP (5.49%) (10.77%) 05/04/1998
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Small Company VP 29.14% 18.57% 05/30/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Value Opportunity VP 18.01% 23.35% 05/30/1997
- ------------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation Fund 38.57% 05/07/1999
- ------------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Growth Fund 25.51% 05/04/1999
- ------------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Growth and Income Fund 20.40% 05/10/1999
- ------------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Value Fund 16.62% 05/05/1999
- ------------------------------------------------------------------------------------------------------------------------------------
Calvert Social Balanced Portfolio(1) 10.76% 16.48% 10.59%
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio 4.93% 17.06% 16.03% 05/31/1994
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio 35.65% 28.05% 25.70% 05/31/1994
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio 40.78% 15.84% 13.43% 05/31/1994
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP II Contrafund[RegTM] Portfolio 22.63% 24.44% 05/31/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Aggressive Growth Portfolio 122.53% 34.46% 35.78% 06/30/1994
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Balanced Portfolio 25.11% 22.99% 06/30/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Flexible Income Portfolio 0.26% 9.42% 8.86% 10/31/1994
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Growth Portfolio 42.12% 28.18% 06/30/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Worldwide Growth Portfolio 62.33% 34.12% 05/31/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA 56.44% 30.43% 05/04/1998
- ------------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund/VA 1.47% 0.12% 05/07/1998
====================================================================================================================================
PPI MFS Capital Opportunities Portfolio 46.87% 34.69% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Neuberger Berman AMT Growth/PPI MFS Capital
Opportunities(3) 46.87% 26.26% 14.80%
====================================================================================================================================
PPI MFS Emerging Equities Portfolio 48.93% 35.33% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Alger American Small Cap/PPI MFS Emerging Equities(3) 48.93% 24.65% 18.54% 09/30/1993
====================================================================================================================================
PPI MFS Research Growth Portfolio 22.42% 19.74% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
American Century VP Capital Appreciation/PPI MFS Research
Growth(3) 22.42% 11.70% 10.12% 08/31/1992
====================================================================================================================================
PPI Scudder International Growth Portfolio 56.37% 34.59% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Scudder International Portfolio Class A/PPI Scudder
International Growth(3) 56.37% 19.68% 12.10%
====================================================================================================================================
PPI T. Rowe Price Growth Equity Portfolio 20.73% 23.38% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Alger American Growth/PPI T. Rowe Price Growth Equity(3) 20.73% 23.72% 22.46% 10/31/1994
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Please refer to the discussion preceding the tables for an explanation of the
charges included and methodology used in calculating the standardized and
non-standardized figures. These figures represent historical performance and
should not be considered a projection of future performance.
* Reflects performance from the date contributions were first received in
the fund under the separate account.
(1) These funds have been available through the separate account for more than
ten years.
(2) The current yield for the subaccount for the seven-day period ended
December 31, 1999 (on an annualized basis) was 4.47%. Current yield more
closely reflects current earnings than does total return. The current
yield reflects the deduction of all charges under the contract that are
deducted from the total return quotations shown above except the maximum
1% early withdrawal charge.
(3) The fund first listed was replaced with the applicable Portfolio Partners
portfolio after the close of business on November 26, 1997. The
performance shown is based on the performance of the replaced fund until
November 26, 1997 and the performance of the applicable Portfolio Partners
portfolio
5
<PAGE>
after that date. The replaced fund may not have been available under all
contracts. The "Date Contributions First Received Under the Separate
Account" refers to the applicable date for the replaced fund. If no date
is shown, contributions were first received in the replaced fund under the
separate account more than ten years ago.
<TABLE>
<CAPTION>
----------------------------------------------------------------------
Table I (part 2) Fund
(corresponding with early withdrawal charge Schedule A) NON-STANDARDIZED Inception
Date
- ------------------------------------------------------------------------------------------------------------------------------------
Since
SUBACCOUNT 1 Year 3 Years 5 Years 10 Years Inception**
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aetna Ascent VP 12.85% 11.18% 14.54% 07/05/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Balanced VP, Inc.(1) 12.12% 16.08% 17.42% 11.79%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Bond VP(1) (2.05%) 3.76% 5.91% 6.30%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Crossroads VP 8.77% 9.67% 12.24% 07/05/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Growth VP 33.22% 33.45% 33.48% 12/13/1996
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Growth and Income VP(1) 15.88% 18.85% 21.90% 14.01%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna High Yield VP 5.65% 2.61% 12/10/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Large Cap VP 22.68% 28.17% 28.81% 09/16/1996
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Mid Cap VP 14.29% 19.97% 12/16/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Small Cap VP 9.33% 5.25% 12/19/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna International VP 49.38% 33.68% 12/22/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Legacy VP 5.69% 8.02% 9.90% 07/05/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Money Market VP(1)(2) 3.70% 3.95% 4.10% 3.94%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Real Estate Securities VP (5.49%) (8.08%) 12/15/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Small Company VP 29.14% 19.59% 19.99% 12/27/1996
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Value Opportunity VP 18.01% 25.17% 25.56% 12/13/1996
- ------------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation Fund 42.74% 23.49% 23.97% 20.75% 05/05/1993
- ------------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Growth Fund 33.48% 30.32% 27.97% 21.34% 05/05/1993
- ------------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Growth and Income Fund 32.50% 27.50% 26.53% 22.88% 05/02/1994
- ------------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Value Fund 28.21% 26.95% 25.59% 21.48% 05/05/1993
- ------------------------------------------------------------------------------------------------------------------------------------
Calvert Social Balanced Portfolio(1) 10.76% 14.63% 16.48% 10.59%
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio(1) 4.93% 13.49% 17.06% 13.00%
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio(1) 35.65% 31.54% 28.05% 18.37%
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio(1) 40.78% 19.92% 15.84% 9.97%
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP II Contrafund[RegTM] Portfolio 22.63% 24.45% 26.09% 01/03/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Aggressive Growth Portfolio 122.53% 48.56% 34.46% 32.68% 09/13/1993
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Balanced Portfolio 25.11% 25.95% 23.06% 19.05% 09/13/1993
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Flexible Income Portfolio 0.26% 5.99% 9.42% 7.08% 09/13/1993
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Growth Portfolio 42.12% 32.10% 28.20% 22.66% 09/13/1993
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Worldwide Growth Portfolio 62.33% 35.54% 31.87% 28.03% 09/13/1993
- ------------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA 56.44% 28.64% 20.08% 15.26% 11/12/1990
- ------------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund/VA 1.47% 3.39% 6.83% 4.78% 05/03/1993
====================================================================================================================================
PPI MFS Capital Opportunities Portfolio 46.87% 34.60% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Neuberger Berman AMT Growth/PPI MFS Capital Opportunities(3) 46.87% 31.83% 26.26% 14.80%
====================================================================================================================================
PPI MFS Emerging Equities Portfolio 48.93% 35.33% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Alger American Small Cap/PPI MFS Emerging Equities(3) 48.93% 27.13% 24.65% 18.40%
====================================================================================================================================
PPI MFS Research Growth Portfolio 22.42% 19.74% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
American Century VP Capital Appreciation/PPI MFS Research
Growth(3) 22.42% 12.48% 11.70% 9.38%
====================================================================================================================================
PPI Scudder International Growth Portfolio 56.37% 34.59% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Scudder International Portfolio Class A/PPI Scudder
International Growth(3) 56.37% 25.50% 19.68% 12.10%
====================================================================================================================================
PPI T. Rowe Price Growth Equity Portfolio 20.73% 23.38% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Alger American Growth/PPI T. Rowe Price Growth Equity(3) 20.73% 24.39% 23.72% 18.68%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Please refer to the discussion preceding the tables for an explanation of the
charges included and methodology used in calculating the standardized and
non-standardized figures. These figures represent historical performance and
should not be considered a projection of future performance.
** Reflects performance from the fund's inception date.
(1) These funds have been in operation for more than ten years.
(2) The current yield for the subaccount for the seven-day period ended
December 31, 1999 (on an annualized basis) was 4.47%. Current yield more
closely reflects current earnings than does total return. The current
yield reflects the deduction of all charges under the contract that are
deducted from the total return quotations shown above. As in the table
above, the maximum 1% early withdrawal charge is not reflected.
(3) The fund first listed was replaced with the applicable Portfolio Partners
portfolio after the close of business on November 26, 1997. The
6
<PAGE>
performance shown is based on the performance of the replaced fund until
November 26, 1997 and the performance of the applicable Portfolio Partners
portfolio after that date. The replaced fund may not have been available
under all contracts. The "Fund Inception Date" refers to the applicable
date for the replaced fund. If no date is shown, the replaced fund has
been in operation for more than ten years.
<TABLE>
<CAPTION>
-------------------------------------------------------------------
Date
Table II Contributions
(corresponding with early withdrawal charge Schedule B) STANDARDIZED First Received
Under the
Separate Account
- -----------------------------------------------------------------------------------------------------------------------------------
Since
SUBACCOUNT 1 Year 5 Year 10 Year Inception*
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Aetna Ascent VP 7.21% 13.24% 07/05/1995
- -----------------------------------------------------------------------------------------------------------------------------------
Aetna Balanced VP, Inc.(1) 6.51% 16.47% 11.79%
- -----------------------------------------------------------------------------------------------------------------------------------
Aetna Bond VP(1) (6.95%) 5.05% 6.30%
- -----------------------------------------------------------------------------------------------------------------------------------
Aetna Crossroads VP 3.33% 10.97% 07/05/1995
- -----------------------------------------------------------------------------------------------------------------------------------
Aetna Growth VP 26.55% 31.84% 05/30/1997
- -----------------------------------------------------------------------------------------------------------------------------------
Aetna Growth and Income VP(1) 10.09% 20.91% 14.01%
- -----------------------------------------------------------------------------------------------------------------------------------
Aetna High Yield VP 0.36% (4.47%) 05/04/1998
- -----------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Large Cap VP 16.54% 26.26% 10/31/1996
- -----------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Mid Cap VP 8.57% 9.88% 05/04/1998
- -----------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Small Cap VP 3.86% (5.19%) 05/04/1998
- -----------------------------------------------------------------------------------------------------------------------------------
Aetna International VP 41.91% 20.36% 05/04/1998
- -----------------------------------------------------------------------------------------------------------------------------------
Aetna Legacy VP 0.40% 8.65% 07/05/1995
- -----------------------------------------------------------------------------------------------------------------------------------
Aetna Money Market VP(1)(2) (1.49%) 3.25% 3.94%
- -----------------------------------------------------------------------------------------------------------------------------------
Aetna Real Estate Securities VP (10.22%) (13.48%) 05/04/1998
- -----------------------------------------------------------------------------------------------------------------------------------
Aetna Small Company VP 22.68% 16.24% 05/30/1997
- -----------------------------------------------------------------------------------------------------------------------------------
Aetna Value Opportunity VP 12.11% 20.93% 05/30/1997
- -----------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation Fund 32.97% 05/07/1999
- -----------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Growth Fund 20.44% 05/04/1999
- -----------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Growth and Income Fund 15.53% 05/10/1999
- -----------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Value Fund 11.91% 05/05/1999
- -----------------------------------------------------------------------------------------------------------------------------------
Calvert Social Balanced Portfolio(1) 5.21% 15.53% 10.59%
- -----------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio (0.32%) 16.11% 15.19% 05/31/1994
- -----------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio 28.87% 27.01% 24.78% 05/31/1994
- -----------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio 33.74% 14.89% 12.60% 05/31/1994
- -----------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP II Contrafund[RegTM] Portfolio 16.50% 23.06% 05/31/1995
- -----------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Aggressive Growth Portfolio 111.40% 33.37% 34.77% 06/30/1994
- -----------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Balanced Portfolio 18.85% 21.59% 06/30/1995
- -----------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Flexible Income Portfolio (4.75%) 8.53% 8.00% 10/31/1994
- -----------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Growth Portfolio 35.01% 26.73% 06/30/1995
- -----------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Worldwide Growth Portfolio 54.21% 32.63% 05/31/1995
- -----------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA 48.61% 26.46% 05/04/1998
- -----------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund/VA (3.61%) (2.94%) 05/07/1998
===================================================================================================================================
PPI MFS Capital Opportunities Portfolio 39.52% 31.42% 11/28/1997
- -----------------------------------------------------------------------------------------------------------------------------------
Neuberger Berman AMT Growth/PPI MFS Capital
Opportunities (3) 39.52% 25.23% 14.80%
===================================================================================================================================
PPI MFS Emerging Equities Portfolio 41.48% 32.05% 11/28/1997
- -----------------------------------------------------------------------------------------------------------------------------------
Alger American Small Cap/PPI MFS Emerging Equities(3) 41.48% 23.63% 17.97% 09/30/1993
===================================================================================================================================
PPI MFS Research Growth Portfolio 16.29% 16.83% 11/28/1997
- -----------------------------------------------------------------------------------------------------------------------------------
American Century VP Capital Appreciation/PPI MFS
Research Growth(3) 16.29% 10.79% 9.81% 08/31/1992
===================================================================================================================================
PPI Scudder International Growth Portfolio 48.55% 31.33% 11/28/1997
- -----------------------------------------------------------------------------------------------------------------------------------
Scudder International Portfolio Class A/PPI Scudder
International Growth(3) 48.55% 18.71% 12.10%
===================================================================================================================================
PPI T. Rowe Price Growth Equity Portfolio 14.69% 20.38% 11/28/1997
- -----------------------------------------------------------------------------------------------------------------------------------
Alger American Growth/PPI T. Rowe Price Growth Equity(3) 14.69% 22.71% 21.49% 10/31/1994
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Please refer to the discussion preceding the tables for an explanation of the
charges included and methodology used in calculating the standardized and
non-standardized figures. These figures represent historical performance and
should not be considered a projection of future performance.
* Reflects performance from the date contributions were first received in
the fund under the separate account.
(1) These funds have been available through the separate account for more than
ten years.
(2) The current yield for the subaccount for the seven-day period ended
December 31, 1999 (on an annualized basis) was 4.47%. Current yield more
closely reflects current earnings than does total return. The current
yield reflects the deduction of all charges under the contract that are
deducted from the total return quotations shown above except the maximum
5% early withdrawal charge.
7
<PAGE>
(3) The fund first listed was replaced with the applicable Portfolio Partners
portfolio after the close of business on November 26, 1997. The performance
shown is based on the performance of the replaced fund until November 26,
1997 and the performance of the applicable Portfolio Partners portfolio
after that date. The replaced fund may not have been available under all
contracts. The "Date Contributions First Received Under the Separate
Account" refers to the applicable date for the replaced fund. If no date is
shown, contributions were first received in the replaced fund under the
separate account more than ten years ago.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
Table II (part 2) Fund
(corresponding with early withdrawal charge Schedule B) NON-STANDARDIZED Inception
Date
- ------------------------------------------------------------------------------------------------------------------------------------
Since
SUBACCOUNT 1 Year 3 Years 5 Years 10 Years Inception**
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aetna Ascent VP 12.85% 11.18% 14.54% 07/05/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Balanced VP, Inc.(1) 12.12% 16.08% 17.42% 11.79%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Bond VP(1) (2.05%) 3.76% 5.91% 6.30%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Crossroads VP 8.77% 9.67% 12.24% 07/05/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Growth VP 33.22% 33.45% 33.48% 12/13/1996
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Growth and Income VP(1) 15.88% 18.85% 21.90% 14.01%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna High Yield VP 5.65% 2.61% 12/10/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Large Cap VP 22.68% 28.17% 28.81% 09/16/1996
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Mid Cap VP 14.29% 19.97% 12/16/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Small Cap VP 9.33% 5.25% 12/19/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna International VP 49.38% 33.68% 12/22/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Legacy VP 5.69% 8.02% 9.90% 07/05/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Money Market VP(1)(2) 3.70% 3.95% 4.10% 3.94%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Real Estate Securities VP (5.49%) (8.08%) 12/15/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Small Company VP 29.14% 19.59% 19.99% 12/27/1996
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Value Opportunity VP 18.01% 25.17% 25.56% 12/13/1996
- ------------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation Fund 42.74% 23.49% 23.97% 20.75% 05/05/1993
- ------------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Growth Fund 33.48% 30.32% 27.97% 21.34% 05/05/1993
- ------------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Growth and Income Fund 32.50% 27.50% 26.53% 22.88% 05/02/1994
- ------------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Value Fund 28.21% 26.95% 25.59% 21.48% 05/05/1993
- ------------------------------------------------------------------------------------------------------------------------------------
Calvert Social Balanced Portfolio(1) 10.76% 14.63% 16.48% 10.59%
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio(1) 4.93% 13.49% 17.06% 13.00%
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio(1) 35.65% 31.54% 28.05% 18.37%
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio(1) 40.78% 19.92% 15.84% 9.97%
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP II Contrafund[RegTM] Portfolio 22.63% 24.45% 26.09% 01/03/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Aggressive Growth Portfolio 122.53% 48.56% 34.46% 32.68% 09/13/1993
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Balanced Portfolio 25.11% 25.95% 23.06% 19.05% 09/13/1993
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Flexible Income Portfolio 0.26% 5.99% 9.42% 7.08% 09/13/1993
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Growth Portfolio 42.12% 32.10% 28.20% 22.66% 09/13/1993
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Worldwide Growth Portfolio 62.33% 35.54% 31.87% 28.03% 09/13/1993
- ------------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA 56.44% 28.64% 20.08% 15.26% 11/12/1990
- ------------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund/VA 1.47% 3.39% 6.83% 4.78% 05/03/1993
====================================================================================================================================
PPI MFS Capital Opportunities Portfolio 46.87% 34.60% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Neuberger Berman AMT Growth/PPI MFS Capital
Opportunities(3) 46.87% 31.83% 26.26% 14.80%
====================================================================================================================================
PPI MFS Emerging Equities Portfolio 48.93% 35.33% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Alger American Small Cap/PPI MFS Emerging Equities(3) 48.93% 27.13% 24.65% 18.40%
====================================================================================================================================
PPI MFS Research Growth Portfolio 22.42% 19.74% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
American Century VP Capital Appreciation/PPI MFS Research
Growth(3) 22.42% 12.48% 11.70% 9.38%
====================================================================================================================================
PPI Scudder International Growth Portfolio 56.37% 34.59% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Scudder International Portfolio Class A/PPI Scudder
International Growth(3) 56.37% 25.50% 19.68% 12.10%
====================================================================================================================================
PPI T. Rowe Price Growth Equity Portfolio 20.73% 23.38% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Alger American Growth/PPI T. Rowe Price Growth Equity(3) 20.73% 24.39% 23.72% 18.68%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Please refer to the discussion preceding the tables for an explanation of the
charges included and methodology used in calculating the standardized and
non-standardized figures. These figures represent historical performance and
should not be considered a projection of future performance.
** Reflects performance from the fund's inception date.
(1) These funds have been in operation for more than ten years.
(2) The current yield for the subaccount for the seven-day period ended
December 31, 1999 (on an annualized basis) was 4.47%. Current yield more
closely reflects current earnings than does total return. The current
yield reflects the deduction of all charges under the contract that are
deducted
8
<PAGE>
from the total return quotations shown above. As in the table above, the
maximum 5% early withdrawal charge is not reflected.
(3) The fund first listed was replaced with the applicable Portfolio Partners
portfolio after the close of business on November 26, 1997. The
performance shown is based on the performance of the replaced fund until
November 26, 1997 and the performance of the applicable Portfolio Partners
portfolio after that date. The replaced fund may not have been available
under all contracts. The "Fund Inception Date" refers to the applicable
date for the replaced fund. If no date is shown, the replaced fund has
been in operation for more than ten years.
<TABLE>
<CAPTION>
-------------------------------------------------------------------
Date
Table III Contributions
(corresponding with early withdrawal charge Schedule C) STANDARDIZED First Received
Under the
Separate Account
- ------------------------------------------------------------------------------------------------------------------------------------
Since
SUBACCOUNT 1 Year 5 Year 10 Year Inception*
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Aetna Ascent VP 6.08% 13.77% 07/05/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Balanced VP, Inc.(1) 5.39% 16.95% 11.79%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Bond VP(1) (7.93%) 5.48% 6.30%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Crossroads VP 2.24% 11.48% 07/05/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Growth VP 25.22% 31.84% 05/30/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Growth and Income VP(1) 8.93% 21.41% 14.01%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna High Yield VP (0.70%) (5.08%) 05/04/1998
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Large Cap VP 15.31% 26.68% 10/31/1996
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Mid Cap VP 7.43% 9.18% 05/04/1998
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Small Cap VP 2.77% (5.79%) 05/04/1998
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna International VP 40.41% 19.59% 05/04/1998
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Legacy VP (0.66%) 9.16% 07/05/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Money Market VP(1)(2) (2.53%) 3.68% 3.94%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Real Estate Securities VP (11.16%) (14.03%) 05/04/1998
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Small Company VP 21.39% 16.24% 05/30/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Value Opportunity VP 10.93% 20.93% 05/30/1997
- ------------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation Fund 31.57% 05/07/1999
- ------------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Growth Fund 19.17% 05/04/1999
- ------------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Growth and Income Fund 14.31% 05/10/1999
- ------------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Value Fund 10.73% 05/05/1999
- ------------------------------------------------------------------------------------------------------------------------------------
Calvert Social Balanced Portfolio(1) 4.11% 16.01% 10.59%
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio (1.37%) 16.59% 15.61% 05/31/1994
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio 27.51% 27.54% 25.25% 05/31/1994
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio 32.33% 15.37% 13.02% 05/31/1994
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP II Contrafund[RegTM] Portfolio 15.27% 23.62% 05/31/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Aggressive Growth Portfolio 109.18% 33.92% 35.28% 06/30/1994
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Balanced Portfolio 17.60% 22.16% 06/30/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Flexible Income Portfolio (5.76%) 8.98% 8.44% 10/31/1994
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Growth Portfolio 33.59% 27.32% 06/30/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Worldwide Growth Portfolio 52.59% 33.23% 05/31/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA 47.05% 25.65% 05/04/1998
- ------------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund/VA (4.62%) (3.56%) 05/07/1998
====================================================================================================================================
PPI MFS Capital Opportunities Portfolio 38.05% 31.42% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Neuberger Berman AMT Growth/PPI MFS Capital
Opportunities(3) 38.05% 25.75% 14.80%
====================================================================================================================================
PPI MFS Emerging Equities Portfolio 39.99% 32.05% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Alger American Small Cap/PPI MFS Emerging Equities(3) 39.99% 24.15% 18.35% 09/30/1993
====================================================================================================================================
PPI MFS Research Growth Portfolio 15.07% 16.83% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
American Century VP Capital Appreciation/PPI MFS Research
Growth(3) 15.07% 11.25% 10.12% 08/31/1992
====================================================================================================================================
PPI Scudder International Growth Portfolio 46.98% 31.33% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Scudder International Portfolio Class A/PPI Scudder
International Growth(3) 46.98% 19.20% 12.10%
====================================================================================================================================
PPI T. Rowe Price Growth Equity Portfolio 13.48% 20.38% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Alger American Growth/PPI T. Rowe Price Growth
Equity(3) 13.48% 23.22% 21.98% 10/31/1994
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Please refer to the discussion preceding the tables for an explanation of the
charges included and methodology used in calculating the standardized and
non-standardized figures. These figures represent historical performance and
should not be considered a projection of future performance.
* Reflects performance from the date contributions were first received in
the fund under the separate account.
9
<PAGE>
(1) These funds have been available through the separate account for more than
ten years.
(2) The current yield for the subaccount for the seven-day period ended
December 31, 1999 (on an annualized basis) was 4.47%. Current yield more
closely reflects current earnings than does total return. The current
yield reflects the deduction of all charges under the contract that are
deducted from the total return quotations shown above except the maximum
6% early withdrawal charge.
(3) The fund first listed was replaced with the applicable Portfolio Partners
portfolio after the close of business on November 26, 1997. The
performance shown is based on the performance of the replaced fund until
November 26, 1997 and the performance of the applicable Portfolio Partners
portfolio after that date. The replaced fund may not have been available
under all contracts. The "Date Contributions First Received Under the
Separate Account" refers to the applicable date for the replaced fund. If
no date is shown, contributions were first received in the replaced fund
under the separate account more than ten years ago.
<TABLE>
<CAPTION>
----------------------------------------------------------------------
Table III (part 2) Fund
(corresponding with early withdrawal charge Schedule C) NON-STANDARDIZED Inception
Date
- ------------------------------------------------------------------------------------------------------------------------------------
Since
SUBACCOUNT 1 Year 3 Years 5 Years 10 Years Inception**
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aetna Ascent VP 12.85% 11.18% 14.54% 07/05/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Balanced VP, Inc.(1) 12.12% 16.08% 17.42% 11.79%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Bond VP(1) (2.05%) 3.76% 5.91% 6.30%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Crossroads VP 8.77% 9.67% 12.24% 07/05/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Growth VP 33.22% 33.45% 33.48% 12/13/1996
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Growth and Income VP(1) 15.88% 18.85% 21.90% 14.01%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna High Yield VP 5.65% 2.61% 12/10/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Large Cap VP 22.68% 28.17% 28.81% 09/16/1996
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Mid Cap VP 14.29% 19.97% 12/16/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Small Cap VP 9.33% 5.25% 12/19/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna International VP 49.38% 33.68% 12/22/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Legacy VP 5.69% 8.02% 9.90% 07/05/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Money Market VP(1)(2) 3.70% 3.95% 4.10% 3.94%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Real Estate Securities VP (5.49%) (8.08%) 12/15/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Small Company VP 29.14% 19.59% 19.99% 12/27/1996
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Value Opportunity VP 18.01% 25.17% 25.56% 12/13/1996
- ------------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation Fund 42.74% 23.49% 23.97% 20.75% 05/05/1993
- ------------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Growth Fund 33.48% 30.32% 27.97% 21.34% 05/05/1993
- ------------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Growth and Income Fund 32.50% 27.50% 26.53% 22.88% 05/02/1994
- ------------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Value Fund 28.21% 26.95% 25.59% 21.48% 05/05/1993
- ------------------------------------------------------------------------------------------------------------------------------------
Calvert Social Balanced Portfolio(1) 10.76% 14.63% 16.48% 10.59%
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio(1) 4.93% 13.49% 17.06% 13.00%
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio(1) 35.65% 31.54% 28.05% 18.37%
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio(1) 40.78% 19.92% 15.84% 9.97%
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP II Contrafund[RegTM] Portfolio 22.63% 24.45% 26.09% 01/03/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Aggressive Growth Portfolio 122.53% 48.56% 34.46% 32.68% 09/13/1993
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Balanced Portfolio 25.11% 25.95% 23.06% 19.05% 09/13/1993
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Flexible Income Portfolio 0.26% 5.99% 9.42% 7.08% 09/13/1993
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Growth Portfolio 42.12% 32.10% 28.20% 22.66% 09/13/1993
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Worldwide Growth Portfolio 62.33% 35.54% 31.87% 28.03% 09/13/1993
- ------------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA 56.44% 28.64% 20.08% 15.26% 11/12/1990
- ------------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund/VA 1.47% 3.39% 6.83% 4.78% 05/03/1993
====================================================================================================================================
PPI MFS Capital Opportunities Portfolio 46.87% 34.60% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Neuberger Berman AMT Growth/PPI MFS Capital
Opportunities(3) 46.87% 31.83% 26.26% 14.80%
====================================================================================================================================
PPI MFS Emerging Equities Portfolio 48.93% 35.33% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Alger American Small Cap/PPI MFS Emerging Equities(3) 48.93% 27.13% 24.65% 18.40%
====================================================================================================================================
PPI MFS Research Growth Portfolio 22.42% 19.74% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
American Century VP Capital Appreciation/PPI MFS Research
Growth(3) 22.42% 12.48% 11.70% 9.38%
====================================================================================================================================
PPI Scudder International Growth Portfolio 56.37% 34.59% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Scudder International Portfolio Class A/PPI Scudder
International Growth(3) 56.37% 25.50% 19.68% 12.10%
====================================================================================================================================
PPI T. Rowe Price Growth Equity Portfolio 20.73% 23.38% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Alger American Growth/PPI T. Rowe Price Growth Equity(3) 20.73% 24.39% 23.72% 18.68%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Please refer to the discussion preceding the tables for an explanation of the
charges included and methodology used in calculating the standardized and
non-standardized figures. These figures represent historical performance and
should not be considered a projection of future performance.
** Reflects performance from the fund's inception date.
10
<PAGE>
(1) These funds have been in operation for more than ten years.
(2) The current yield for the subaccount for the seven-day period ended
December 31, 1999 (on an annualized basis) was 4.47%. Current yield more
closely reflects current earnings than does total return. The current
yield reflects the deduction of all charges under the contract that are
deducted from the total return quotations shown above. As in the table
above, the maximum 6% early withdrawal charge is not reflected.
(3) The fund first listed was replaced with the applicable Portfolio Partners
portfolio after the close of business on November 26, 1997. The
performance shown is based on the performance of the replaced fund until
November 26, 1997 and the performance of the applicable Portfolio Partners
portfolio after that date. The replaced fund may not have been available
under all contracts. The "Fund Inception Date" refers to the applicable
date for the replaced fund. If no date is shown, the replaced fund has
been in operation for more than ten years.
INCOME PHASE PAYMENTS
When you begin receiving payments under the contract during the income phase
(see "The Income Phase" in the prospectus), the value of your account is
determined using accumulation unit values as of the tenth valuation before the
first income phase payment is due. Such value (less any applicable premium tax)
is applied to provide income phase payments to you in accordance with the income
phase payment option and investment options elected.
The annuity option tables found in the contract show, for each option, the
amount of the first income phase payment for each $1,000 of value applied.
Thereafter, variable income phase payments fluctuate as the annuity unit
value(s) fluctuates with the investment experience of the selected investment
option(s). The first income phase payment and subsequent income phase payments
also vary depending upon the assumed net investment rate selected (3.5% or 5%
per annum). Selection of a 5% rate causes a higher first income phase payment,
but income phase payments will increase thereafter only to the extent that the
investment performance of the subaccounts you selected is greater than 5%
annually, after deduction of fees. Income phase payments would decline if the
performance was less than 5%. Use of the 3.5% assumed rate causes a lower first
income phase payment, but subsequent income phase payments would increase more
rapidly or decline more slowly as changes occur in the performance of the
subaccounts selected.
When the income phase begins, the annuitant is credited with a fixed number of
annuity units (which does not change thereafter) in each of the designated
investment options. This number is calculated by dividing (a) by (b), where (a)
is the amount of the first income phase payment based on a particular investment
option, and (b) is the then current annuity unit value for that investment
option. As noted, annuity unit values fluctuate from one valuation to the next
(see "Your Account Value" in the prospectus); such fluctuations reflect changes
in the net investment factor for the appropriate subaccount(s) (with a ten
valuation lag which gives the Company time to process income phase payments) and
a mathematical adjustment which offsets the assumed net investment rate of 3.5%
or 5% per annum.
The operation of all these factors can be illustrated by the following
hypothetical example. These procedures will be performed separately for the
investment options selected during the income phase.
EXAMPLE:
Assume that, at the date income phase payments are to begin, there are 3,000
accumulation units credited under a particular contract and that the value of an
accumulation unit for the tenth valuation prior to retirement was $13.650000.
This produces a total value of $40,950.
Assume also that no premium tax is payable and that the annuity table in the
contract provides, for the income phase payment option elected, a first monthly
variable income phase payment of $6.68 per $1000 of value applied; the
annuitant's first monthly income phase payment would thus be $40.950 multiplied
by $6.68, or $273.55.
11
<PAGE>
Assume then that the value of an annuity unit upon the valuation on which the
first income phase payment was due was $13.400000. When this value is divided
into the first monthly income phase payment, the number of annuity units is
determined to be 20.414. The value of this number of annuity units will be paid
in each subsequent month.
If the net investment factor with respect to the appropriate subaccount is
1.0015000 as of the tenth valuation preceding the due date of the second monthly
income phase payment, multiplying this factor by .9999058* (to take into account
the assumed net investment rate of 3.5% per annum built into the number of
annuity units determined above) produces a result of 1.0014057. This is then
multiplied by the annuity unit value for the prior valuation (assume such value
to be $13.504376) to produce an annuity unit value of $13.523359 for the
valuation occurring when the second income phase payment is due. The second
monthly income phase payment is then determined by multiplying the number of
annuity units by the current annuity unit value, or 20.414 times $13.523359,
which produces an income phase payment of $276.07.
*If an assumed net investment rate of 5% is elected, the appropriate factor to
take into account such assumed rate would be .9998663.
SALES MATERIAL AND ADVERTISING
We may include hypothetical illustrations in our sales literature that explain
the mathematical principles of dollar cost averaging, compounded interest, tax
deferred accumulation, and the mechanics of variable annuity contracts. We may
also discuss the difference between variable annuity contracts and other types
of savings or investment products such as personal savings accounts and
certificates of deposit.
We may distribute sales literature that compares the percentage change in
accumulation unit values for any of the subaccounts to established market
indices such as the Standard & Poor's 500 Stock Index and the Dow Jones
Industrial Average or to the percentage change in values of other management
investment companies that have investment objectives similar to the subaccount
being compared.
We may publish in advertisements and reports, the ratings and other information
assigned to us by one or more independent rating organizations such as A.M. Best
Company, Duff & Phelps, Standard & Poor's Corporation and Moody's Investors
Service, Inc. The purpose of the ratings is to reflect our financial strength
and/or claims-paying ability. We may also quote ranking services such as
Morningstar's Variable Annuity/Life Performance Report and Lipper's Variable
Insurance Products Performance Analysis Service (VIPPAS), which rank variable
annuity or life subaccounts or their underlying funds by performance and/or
investment objective. We may categorize the underlying funds in terms of the
asset classes they represent and use such categories in marketing materials for
the contracts. We may illustrate in advertisements the performance of the
underlying funds, if accompanied by performance which also shows the performance
of such funds reduced by applicable charges under the separate account. We may
also show in advertisements the portfolio holdings of the underlying funds,
updated at various intervals. From time to time, we will quote articles from
newspapers and magazines or other publications or reports such as The Wall
Street Journal, Money magazine, USA Today and The VARDS Report.
12
<PAGE>
We may provide in advertising, sales literature, periodic publications or other
materials information on various topics of interest to current and prospective
contract holders. These topics may include the relationship between sectors of
the economy and the economy as a whole and its effect on various securities
markets, investment strategies and techniques (such as value investing, market
timing, dollar cost averaging, asset allocation, constant ratio transfer and
account rebalancing), the advantages and disadvantages of investing in
tax-deferred and taxable investments, customer profiles and hypothetical
purchase and investment scenarios, financial management and tax and retirement
planning, and investment alternatives to certificates of deposit and other
financial instruments, including comparison between the contract and the
characteristics of and market for such financial instruments.
INDEPENDENT AUDITORS
KPMG LLP, CityPlace II, Hartford, Connecticut 06103-4103, are the independent
auditors for the separate account and for the Company. The services provided to
the separate account include primarily the examination of the separate account's
financial statements and the review of filings made with the SEC.
13
<PAGE>
FINANCIAL STATEMENTS
VARIABLE ANNUITY ACCOUNT C
Index
<TABLE>
<CAPTION>
Page
<S> <C>
Statement of Assets and Liabilities......................................S-2
Statement of Operations..................................................S-7
Statements of Changes in Net Assets......................................S-7
Condensed Financial Information..........................................S-8
Notes to Financial Statements...........................................S-35
Independent Auditors' Report............................................S-46
</TABLE>
S-1
<PAGE>
Variable Annuity Account C
Statement of Assets and Liabilities - December 31, 1999
ASSETS:
Investments, at net asset value: (Note 1)
<TABLE>
<CAPTION>
Net
Shares Cost Assets
------ ---- ------
<S> <C> <C> <C>
Aetna Ascent VP: 5,487,998 $ 77,850,801 $ 81,880,934
Aetna Balanced VP, Inc.: 63,798,342 948,295,840 993,340,184
Aetna Bond VP: 26,111,128 337,527,308 317,772,433
Aetna Crossroads VP: 4,900,036 66,342,707 67,473,490
Aetna Get Fund, Series C: 13,344,337 151,169,479 170,407,185
Aetna Get Fund, Series D: 44,266,790 445,750,521 471,441,304
Aetna Get Fund, Series E: 14,653,796 147,439,580 157,821,380
Aetna Get Fund, Series G: 4,403,891 44,362,936 45,668,355
Aetna Get Fund, Series H: 177,810 1,780,349 1,782,585
Aetna Growth and Income VP: 199,632,297 6,407,871,320 6,126,715,184
Aetna Growth VP: 8,400,854 114,098,403 145,502,794
Aetna High Yield VP: 247,442 2,290,075 2,177,493
Aetna Index Plus Bond VP: 105,454 1,063,945 999,704
Aetna Index Plus Large Cap VP: 22,759,570 380,903,893 474,992,216
Aetna Index Plus Mid Cap VP: 742,803 9,063,006 9,210,760
Aetna Index Plus Small Cap VP: 759,404 7,605,471 8,277,508
Aetna International VP: 484,592 6,442,241 7,714,709
Aetna Legacy VP: 3,434,547 42,980,971 42,897,494
Aetna Money Market VP: 24,259,864 321,393,718 325,448,505
Aetna Real Estate Securities VP: 256,614 2,056,484 1,983,625
Aetna Small Company VP: 3,809,327 49,829,392 62,930,074
Aetna Value Opportunity VP: 2,109,605 28,865,898 34,639,709
AIM V.I. Funds:
Capital Appreciation Fund: 51,442 1,663,535 1,830,289
Growth and Income Fund: 308,705 8,531,987 9,752,003
Growth Fund: 145,759 4,202,783 4,700,713
Value Fund: 254,868 7,703,036 8,538,069
Calvert Social Balanced Portfolio: 31,393,409 60,290,971 68,092,305
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio: 8,321,344 183,959,852 213,941,762
Growth Portfolio: 8,016,298 304,409,589 440,335,255
High Income Portfolio: 165,693 1,831,003 1,873,989
Overseas Portfolio: 802,972 16,957,060 22,033,565
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio: 1,485,310 23,755,294 27,730,745
Contrafund Portfolio: 16,307,149 307,785,749 475,353,405
Index 500 Portfolio: 732,174 87,437,682 122,573,178
Janus Aspen Series:
Aggressive Growth Portfolio: 18,318,476 503,488,085 1,093,429,837
Balanced Portfolio: 8,431,614 181,578,113 235,410,674
Flexible Income Portfolio: 2,881,635 34,591,070 32,908,277
Growth Portfolio: 10,799,778 243,582,035 363,412,513
Worldwide Growth Portfolio: 23,812,784 600,003,141 1,137,060,432
Lexington Emerging Markets Fund: 904,459 8,311,189 11,586,115
Lexington Natural Resources Trust Fund: 1,319,622 18,631,009 16,508,469
MFS Funds:
Total Return Series: 38,546 685,374 684,196
</TABLE>
S-2
<PAGE>
Variable Annuity Account C
Statement of Assets and Liabilities - December 31, 1999 (continued):
<TABLE>
<CAPTION>
Net
Shares Cost Assets
------ ---- ------
<S> <C> <C> <C>
Oppenheimer Funds:
Global Securities Fund/VA: 175,752 $ 4,453,856 $ 5,871,877
Strategic Bond Fund/VA: 702,571 3,494,361 3,491,776
Portfolio Partners, Inc. (PPI):
PPI MFS Emerging Equities Portfolio: 7,216,621 332,022,669 597,752,731
PPI MFS Research Growth Portfolio: 17,304,728 174,113,125 255,763,877
PPI MFS Value Equity Portfolio: 4,141,093 133,672,606 226,807,681
PPI Scudder International Growth Portfolio: 11,435,215 230,983,651 291,483,624
PPI T. Rowe Price Growth Equity Portfolio: 3,683,260 166,480,917 243,095,170
--------------- ---------------
NET ASSETS $13,239,604,080 $15,463,100,152
=============== ===============
</TABLE>
S-3
<PAGE>
Variable Annuity Account C
Statement of Assets and Liabilities - December 31, 1999 (continued):
Net assets represented by:
Reserves for annuity contracts in accumulation and payment period:
(Notes 1 and 6)
<TABLE>
<S> <C>
Aetna Ascent VP:
Annuity contracts in accumulation .............................................. $ 81,880,934
Aetna Balanced VP, Inc.:
Annuity contracts in accumulation .............................................. 958,810,376
Annuity contracts in payment period ............................................ 34,529,808
Aetna Bond VP:
Annuity contracts in accumulation .............................................. 312,007,882
Annuity contracts in payment period ............................................ 5,764,551
Aetna Crossroads VP:
Annuity contracts in accumulation .............................................. 67,400,270
Annuity contracts in payment period ............................................ 73,220
Aetna Get Fund, Series C:
Annuity contracts in accumulation .............................................. 170,407,185
Aetna Get Fund, Series D:
Annuity contracts in accumulation .............................................. 471,441,304
Aetna Get Fund, Series E:
Annuity contracts in accumulation .............................................. 157,821,380
Aetna Get Fund, Series G:
Annuity contracts in accumulation .............................................. 45,668,355
Aetna Get Fund, Series H:
Annuity contracts in accumulation .............................................. 1,782,585
Aetna Growth and Income VP:
Annuity contracts in accumulation .............................................. 5,753,192,035
Annuity contracts in payment period ............................................ 373,523,149
Aetna Growth VP:
Annuity contracts in accumulation .............................................. 145,431,206
Annuity contracts in payment period ............................................ 71,588
Aetna High Yield VP:
Annuity contracts in accumulation .............................................. 2,177,493
Aetna Index Plus Bond VP:
Annuity contracts in accumulation .............................................. 999,704
Aetna Index Plus Large Cap VP:
Annuity contracts in accumulation .............................................. 473,757,587
Annuity contracts in payment period ............................................ 1,234,629
Aetna Index Plus Mid Cap VP:
Annuity contracts in accumulation .............................................. 9,210,760
Aetna Index Plus Small Cap VP:
Annuity contracts in accumulation .............................................. 8,277,508
Aetna International VP:
Annuity contracts in accumulation .............................................. 7,714,709
Aetna Legacy VP:
Annuity contracts in accumulation .............................................. 42,650,270
Annuity contracts in payment period ............................................ 247,224
Aetna Money Market VP:
Annuity contracts in accumulation .............................................. 325,367,721
Annuity contracts in payment period ............................................ 80,784
Aetna Real Estate Securities VP:
Annuity contracts in accumulation .............................................. 1,983,625
</TABLE>
S-4
<PAGE>
Variable Annuity Account C
Statement of Assets and Liabilities - December 31, 1999 (continued):
<TABLE>
<S> <C>
Aetna Small Company VP:
Annuity contracts in accumulation ..................... $ 62,919,038
Annuity contracts in payment period ................... 11,036
Aetna Value Opportunity VP:
Annuity contracts in accumulation ..................... 34,639,709
AIM V.I. Funds:
Capital Appreciation Fund:
Annuity contracts in accumulation ..................... 1,830,289
Growth and Income Fund:
Annuity contracts in accumulation ..................... 9,752,003
Growth Fund:
Annuity contracts in accumulation ..................... 4,700,713
Value Fund:
Annuity contracts in accumulation ..................... 8,538,069
Calvert Social Balanced Portfolio:
Annuity contracts in accumulation ..................... 68,092,305
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio:
Annuity contracts in accumulation ..................... 213,941,762
Growth Portfolio:
Annuity contracts in accumulation ..................... 440,335,255
High Income Portfolio:
Annuity contracts in accumulation ..................... 1,873,989
Overseas Portfolio:
Annuity contracts in accumulation ..................... 22,033,565
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio:
Annuity contracts in accumulation ..................... 27,730,745
Contrafund Portfolio:
Annuity contracts in accumulation ..................... 475,353,405
Index 500 Portfolio:
Annuity contracts in accumulation ..................... 122,573,178
Janus Aspen Series:
Aggressive Growth Portfolio:
Annuity contracts in accumulation ..................... 1,093,429,837
Balanced Portfolio:
Annuity contracts in accumulation ..................... 235,410,674
Flexible Income Portfolio:
Annuity contracts in accumulation ..................... 32,908,277
Growth Portfolio:
Annuity contracts in accumulation ..................... 362,723,120
Annuity contracts in payment period ................... 689,393
Worldwide Growth Portfolio:
Annuity contracts in accumulation ..................... 1,136,307,574
Annuity contracts in payment period ................... 752,858
Lexington Emerging Markets Fund:
Annuity contracts in accumulation ..................... 11,586,115
Lexington Natural Resources Trust Fund:
Annuity contracts in accumulation ..................... 16,508,469
MFS Funds:
Total Return Series:
Annuity contracts in accumulation ..................... 684,196
</TABLE>
S-5
<PAGE>
Variable Annuity Account C
Statement of Assets and Liabilities - December 31, 1999 (continued):
<TABLE>
<S> <C>
Oppenheimer Funds:
Global Securities Fund/VA:
Annuity contracts in accumulation ........... $ 5,871,877
Strategic Bond Fund/VA:
Annuity contracts in accumulation ........... 3,464,259
Annuity contracts in payment period ......... 27,517
Portfolio Partners, Inc. (PPI):
PPI MFS Emerging Equities Portfolio:
Annuity contracts in accumulation ........... 597,714,231
Annuity contracts in payment period ......... 38,500
PPI MFS Research Growth Portfolio:
Annuity contracts in accumulation ........... 255,763,877
PPI MFS Value Equity Portfolio:
Annuity contracts in accumulation ........... 226,770,707
Annuity contracts in payment period ......... 36,974
PPI Scudder International Growth Portfolio:
Annuity contracts in accumulation ........... 291,483,624
PPI T. Rowe Price Growth Equity Portfolio:
Annuity contracts in accumulation ........... 243,032,240
Annuity contracts in payment period ......... 62,930
---------------
$15,463,100,152
===============
</TABLE>
See Notes to Financial Statements
S-6
<PAGE>
Variable Annuity Account C
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended
December 31, 1999
-----------------
<S> <C>
INVESTMENT INCOME:
Income: (Notes 1, 3 and 5)
Dividends ...................................................... $1,492,280,564
Expenses: (Notes 2 and 5)
Valuation period deductions .................................... (155,996,756)
--------------
Net investment income ........................................... $1,336,283,808
--------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on sales of investments: (Notes 1, 4 and 5)
Proceeds from sales ............................................ $3,038,110,918
Cost of investments sold ....................................... 2,616,313,236
--------------
Net realized gain on investments .............................. 421,797,682
--------------
Net unrealized gain on investments: (Note 5)
Beginning of year .............................................. 949,942,696
End of year .................................................... 2,223,496,072
--------------
Net change in unrealized gain on investments .................. 1,273,553,376
--------------
Net realized and unrealized gain on investments ................. 1,695,351,058
--------------
Net increase in net assets resulting from operations ............ $3,031,634,866
==============
</TABLE>
See Notes to Financial Statements
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended December 31,
1999 1998
---- ----
FROM OPERATIONS:
<S> <C> <C>
Net investment income ................................................... $ 1,336,283,808 $ 1,309,062,029
Net realized gain on investments ........................................ 421,797,682 376,057,759
Net change in unrealized gain on investments ............................ 1,273,553,376 34,476,935
--------------- ---------------
Net increase in net assets resulting from operations .................... 3,031,634,866 1,719,596,723
--------------- ---------------
FROM UNIT TRANSACTIONS:
Variable annuity contract purchase payments ............................. 1,172,840,518 1,136,921,898
Transfer from the Company for mortality guarantee adjustments ........... 2,184,815 849,771
Transfers from the Company's fixed account options ...................... 168,739,006 112,197,035
Transfer to the Company's other variable annuity accounts ............... 51,518,318 (66,773,776)
Redemptions by contract holders ......................................... (1,347,163,695) (1,591,935,338)
Annuity Payments ........................................................ (43,203,172) (41,589,989)
Other ................................................................... 184,219 1,844,602
--------------- ---------------
Net increase (decrease) in net assets from unit transactions (Note 6) .. 5,100,009 (448,485,797)
--------------- ---------------
Change in net assets .................................................... 3,036,734,875 1,271,110,926
NET ASSETS:
Beginning of year ....................................................... 12,426,365,277 11,155,254,351
--------------- ---------------
End of year ............................................................. $15,463,100,152 $12,426,365,277
=============== ===============
</TABLE>
See Notes to Financial Statements
S-7
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units
-------- in Value of Outstanding Reserves
Beginning End of Accumulation at End at End
of Year Year Unit of Year of Year
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aetna Ascent VP:
Qualified III $15.886 $17.940 12.93% 33,852.1 $ 607,317
Qualified V 15.800 17.814 12.75% 1,632.1 29,075
Qualified VI 15.886 17.940 12.93% 2,759,063.1 49,498,437
Qualified VIII 15.882 17.934 12.92% 7.6 136
Qualified X (1.15) 16.395 18.533 13.04% 11,213.5 207,822
Qualified X (1.25) 16.337 18.450 12.93% 473,603.0 8,737,920
Qualified XI 16.028 18.172 13.38% 68,230.2 1,239,866
Qualified XII (0.40) 14.086 16.043 13.89% 84,264.1 1,351,871
Qualified XII (0.45) 9.519 10.836 13.84% 53,201.3 576,512
Qualified XII (0.50) 9.848 11.205 13.78% 4,725.1 52,944
Qualified XII (0.55) 9.864 10.819 9.68% (11) 3,650.3 39,493
Qualified XII (0.65) 9.484 10.802 13.90% (4) 184,741.3 1,995,487
Qualified XII (0.70) 10.056 10.793 7.33% (5) 7,803.1 84,218
Qualified XII (0.75) 9.502 10.784 13.49% 52,441.5 565,534
Qualified XII (0.80) 10.101 11.458 13.43% 169,078.4 1,937,317
Qualified XII (0.85) 14.113 16.002 13.38% 150,454.1 2,407,530
Qualified XII (0.90) 9.953 11.279 13.32% 19,045.8 214,821
Qualified XII (0.95) 14.076 15.944 13.27% 75,808.4 1,208,657
Qualified XII (1.00) 14.057 15.915 13.22% 412,578.7 6,566,029
Qualified XII (1.05) 14.039 15.886 13.16% 33,325.3 529,395
Qualified XII (1.10) 14.020 15.857 13.10% 29,410.8 466,362
Qualified XII (1.15) 14.002 15.828 13.04% 43,436.3 687,507
Qualified XII (1.20) 13.983 15.799 12.99% 47,132.2 744,648
Qualified XII (1.25) 13.965 15.770 12.93% 1,616.8 25,497
Qualified XII (1.30) 13.946 15.742 12.88% 2,119.6 33,367
Qualified XII (1.40) 13.910 15.685 12.76% 456.6 7,162
Qualified XII (1.50) 13.873 15.628 12.65% 12,770.2 199,567
Qualified XIII 16.011 18.135 13.27% 11,395.7 206,664
Qualified XV 15.984 18.105 13.27% 11,315.1 204,861
Qualified XVI 15.818 17.818 12.64% 40,362.2 719,184
Qualified XVII 15.974 18.102 13.32% 7,679.2 139,012
Qualified XVIII 16.427 18.616 13.33% 9,028.8 168,085
Qualified XXI 16.800 18.122 7.87% (5) 14,127.4 256,014
Qualified XXII 16.828 18.152 7.87% (5) 9,509.9 172,623
- ------------------------------------------------------------------------------------------------------------------------------
Aetna Balanced VP, Inc.:
Qualified I 28.687 32.205 12.26% 46,577.5 1,500,025
Qualified III 28.524 32.002 12.19% 2,155,444.9 68,979,058
Qualified V 21.650 24.251 12.01% 2,950.4 71,552
Qualified VI 21.723 24.372 12.19% 21,610,375.0 526,690,848
Qualified VII 20.906 23.469 12.26% 244,536.2 5,739,082
Qualified VIII 20.165 22.622 12.18% 4,333.4 98,031
Qualified IX 20.269 22.855 12.76% 3,089.4 70,608
Qualified X (1.15) 21.836 24.523 12.31% 144,539.6 3,544,554
Qualified X (1.25) 21.723 24.372 12.19% 5,427,321.4 132,275,378
Qualified XI 21.917 24.687 12.64% 725,532.7 17,911,003
Qualified XII (0.40) 15.331 17.347 13.15% 720,935.4 12,506,401
Qualified XII (0.45) 10.747 12.064 12.25% (1) 80,716.6 973,804
Qualified XII (0.50) 11.077 12.521 13.04% 307,533.7 3,850,603
Qualified XII (0.55) 11.266 12.045 6.91% (11) 237,141.6 2,856,384
Qualified XII (0.65) 11.183 12.026 7.54% (4) 119,528.5 1,437,404
Qualified XII (0.70) 11.192 12.016 7.36% (5) 96,082.3 1,154,518
Qualified XII (0.75) 10.648 12.006 12.75% 194,624.9 2,336,717
Qualified XII (0.80) 11.358 12.801 12.70% 3,380,638.3 43,274,716
Qualified XII (0.85) 15.360 17.303 12.65% 1,479,143.3 25,592,940
Qualified XII (0.90) 11.157 12.561 12.58% 13,520.7 169,839
Qualified XII (0.95) 15.320 17.240 12.53% 565,751.2 9,753,347
Qualified XII (1.00) 15.300 17.208 12.47% 2,306,988.0 39,699,337
Qualified XII (1.05) 15.279 17.177 12.42% 103,304.6 1,774,462
</TABLE>
S-8
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units
-------- in Value of Outstanding Reserves
Beginning End of Accumulation at End at End
of Year Year Unit of Year of Year
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aetna Balanced VP, Inc. (continued):
Qualified XII (1.10) $15.259 $17.146 12.37% 79,952.8 $ 1,370,853
Qualified XII (1.15) 15.239 17.115 12.31% 224,431.2 3,841,053
Qualified XII (1.20) 15.219 17.083 12.25% 33,948.3 579,954
Qualified XII (1.25) 15.199 17.052 12.19% 2,089.1 35,624
Qualified XII (1.30) 15.179 17.021 12.14% 112.6 1,916
Qualified XII (1.40) 15.139 16.960 12.03% 1,121.8 19,026
Qualified XII (1.50) 15.099 16.898 11.91% 10,945.5 184,956
Qualified XIII 21.893 24.637 12.53% 127,612.2 3,143,976
Qualified XV 21.857 24.596 12.53% 86,058.1 2,116,686
Qualified XVI 21.629 24.206 11.91% 352,494.7 8,532,621
Qualified XVII 21.808 24.529 12.48% 343,841.9 8,434,153
Qualified XVIII 21.808 24.529 12.48% 567,804.2 13,927,761
Qualified XIX 28.800 32.412 12.54% 59,324.7 1,922,853
Qualified XX 28.636 32.208 12.47% 129,106.3 4,158,308
Qualified XXI 22.705 24.619 8.43% (5) 246,195.4 6,061,023
Qualified XXII 22.742 24.660 8.43% (5) 89,984.8 2,219,002
Annuity contracts in payment period 34,529,808
- --------------------------------------------------------------------------------------------------------------------------------
Aetna Bond VP:
Qualified I 55.494 54.432 (1.91%) 13,087.6 712,387
Qualified III 54.819 53.738 (1.97%) 867,416.1 46,612,996
Qualified V 14.285 13.981 (2.13%) 9,603.3 134,261
Qualified VI 14.137 13.859 (1.97%) 11,928,359.4 165,309,860
Qualified VII 13.083 12.833 (1.91%) 162,929.5 2,090,861
Qualified VIII 13.018 12.760 (1.98%) 6,576.0 83,911
Qualified IX 13.221 13.012 (1.58%) 1,660.2 21,602
Qualified X (1.15) 14.211 13.945 (1.87%) 71,392.2 995,530
Qualified X (1.25) 14.137 13.859 (1.97%) 2,085,754.6 28,905,552
Qualified XI 14.264 14.037 (1.59%) 345,814.5 4,854,370
Qualified XII (0.40) 12.079 11.942 (1.13%) 198,382.2 2,368,992
Qualified XII (0.45) 10.455 10.396 (0.56%) (9) 19,692.6 204,733
Qualified XII (0.50) 10.662 10.530 (1.24%) 84,610.6 890,970
Qualified XII (0.55) 10.419 10.380 (0.37%) (11) 31,522.7 327,195
Qualified XII (0.65) 10.594 10.363 (2.18%) (4) 113,546.9 1,176,679
Qualified XII (0.70) 10.447 10.355 (0.88%) (5) 36,754.8 380,581
Qualified XII (0.75) 10.502 10.346 (1.49%) 51,553.5 533,383
Qualified XII (0.80) 10.650 10.487 (1.53%) 617,713.8 6,477,656
Qualified XII (0.85) 12.102 11.911 (1.58%) 637,752.4 7,595,995
Qualified XII (0.90) 10.654 10.481 (1.62%) 2,670.4 27,987
Qualified XII (0.95) 12.070 11.867 (1.68%) 228,113.5 2,707,087
Qualified XII (1.00) 12.054 11.846 (1.73%) 1,191,777.2 14,117,427
Qualified XII (1.05) 12.038 11.824 (1.78%) 54,349.6 642,636
Qualified XII (1.10) 12.022 11.803 (1.82%) 24,570.7 289,999
Qualified XII (1.15) 12.006 11.781 (1.87%) 88,391.1 1,041,349
Qualified XII (1.20) 11.990 11.760 (1.92%) 26,797.5 315,130
Qualified XII (1.25) 11.975 11.738 (1.98%) 520.5 6,110
Qualified XII (1.30) 11.959 11.717 (2.02%) 36,650.4 429,431
Qualified XII (1.40) 11.927 11.674 (2.12%) 323.8 3,780
Qualified XII (1.50) 11.896 11.632 (2.22%) 6,253.3 72,737
Qualified XIII 14.248 14.009 (1.68%) 128,234.5 1,796,461
Qualified XV 14.225 13.986 (1.68%) 114,358.8 1,599,414
Qualified XVI 14.076 13.764 (2.22%) 186,302.7 2,564,315
Qualified XVII 14.171 13.912 (1.83%) 347,131.3 4,829,329
Qualified XVIII 14.171 13.912 (1.83%) 608,177.8 8,461,036
Qualified XIX 55.625 54.642 (1.77%) 14,745.1 805,707
Qualified XX 54.949 53.945 (1.83%) 22,963.9 1,238,793
Qualified XXI 14.118 13.999 (0.84%) (5) 23,788.3 333,009
Qualified XXII 14.142 14.022 (0.85%) (5) 74,783.9 1,048,631
Annuity contracts in payment period 5,764,551
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
S-9
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units
-------- in Value of Outstanding Reserves
Beginning End of Accumulation at End at End
of Year Year Unit of Year of Year
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aetna Crossroads VP:
Qualified III $15.120 $16.458 8.85% 30,738.0 $ 505,884
Qualified V 15.038 16.342 8.67% 383.9 6,274
Qualified VI 15.120 16.458 8.85% 2,306,431.0 37,959,074
Qualified VIII 15.116 16.452 8.84% 98.8 1,626
Qualified X (1.15) 15.532 16.923 8.96% 39,124.9 662,102
Qualified X (1.25) 15.478 16.847 8.84% 372,045.9 6,267,768
Qualified XI 15.255 16.670 9.28% 69,847.5 1,164,381
Qualified XII (0.40) 13.628 14.960 9.77% 62,562.9 935,938
Qualified XII (0.45) 9.800 10.752 9.71% 111,368.9 1,197,490
Qualified XII (0.50) 10.086 11.061 9.67% 1,386.1 15,332
Qualified XII (0.55) 10.032 10.735 7.01% (11) 3,809.4 40,895
Qualified XII (0.65) 9.799 10.718 9.38% (4) 90,629.0 971,345
Qualified XII (0.70) 10.178 10.709 5.22% (5) 2,882.4 30,868
Qualified XII (0.75) 9.782 10.701 9.39% 67,538.1 722,694
Qualified XII (0.80) 10.312 11.275 9.34% 93,911.4 1,058,841
Qualified XII (0.85) 13.654 14.921 9.28% 121,322.2 1,810,277
Qualified XII (0.90) 10.489 11.115 5.97% (8) 4,102.4 45,598
Qualified XII (0.95) 13.618 14.867 9.17% 75,296.8 1,119,436
Qualified XII (1.00) 13.600 14.840 9.12% 122,393.1 1,816,307
Qualified XII (1.05) 13.582 14.813 9.06% 40,689.7 602,733
Qualified XII (1.10) 13.564 14.786 9.01% 51,461.8 760,917
Qualified XII (1.15) 13.546 14.759 8.95% 34,307.7 506,351
Qualified XII (1.20) 13.528 14.732 8.90% 436,388.8 6,428,997
Qualified XII (1.25) 13.510 14.705 8.85% 9,106.6 133,916
Qualified XII (1.30) 13.492 14.679 8.80% 870.2 12,773
Qualified XII (1.40) 13.457 14.625 8.68% 1,479.4 21,636
Qualified XII (1.50) 13.421 14.572 8.58% 15,404.5 224,478
Qualified XIII 15.239 16.637 9.17% 10,401.1 173,040
Qualified XV 15.214 16.609 9.17% 14,626.7 242,937
Qualified XVI 15.055 16.346 8.58% 32,067.0 524,165
Qualified XVII 15.204 16.607 9.23% 47,768.1 793,264
Qualified XVIII 15.563 16.999 9.23% 13,248.1 225,204
Qualified XXI 15.738 16.624 5.63% (5) 12,283.9 204,214
Qualified XXII 15.764 16.652 5.63% (5) 12,822.1 213,515
Annuity contracts in payment period 73,220
- ------------------------------------------------------------------------------------------------------------------------------
Aetna Get Fund, Series C:
Qualified III 15.904 19.358 21.72% 596,623.2 11,549,650
Qualified VI 15.904 19.358 21.72% 5,363,382.8 103,826,321
Qualified XI 16.014 19.568 22.19% 577,726.4 11,305,148
Qualified XII (0.65) 16.025 19.672 22.76% 38,157.9 750,657
Qualified XII (0.70) 12.660 13.520 6.79% (11) 33,609.8 454,406
Qualified XII (0.75) 11.696 14.343 22.63% 12,252.8 175,745
Qualified XII (0.80) 12.234 13.498 10.33% (11) 8,956.2 120,893
Qualified XII (0.90) 12.110 13.477 11.29% (10) 10,850.4 146,226
Qualified XII (1.00) 10.999 13.455 22.33% 10,347.4 139,222
Qualified XII (1.05) 12.202 14.919 22.27% 665,803.2 9,933,249
Qualified XII (1.10) 16.050 19.615 22.21% 90,184.8 1,768,933
Qualified XII (1.15) 13.929 14.489 4.02% (12) 4,014.7 58,168
Qualified XII (1.20) 16.014 19.550 22.08% 98,911.8 1,933,743
Qualified XII (1.25) 15.995 19.518 22.03% 1,061,017.8 20,709,009
Qualified XII (1.30) 15.977 19.486 21.96% 1,697.8 33,083
Qualified XII (1.35) 15.959 19.454 21.90% 5,444.4 105,915
Qualified XII (1.40) 15.940 19.422 21.84% 3,217.1 62,483
Qualified XII (1.45) 15.922 19.390 21.78% 3,011.6 58,396
Qualified XII (1.75) 15.813 19.200 21.42% 495.5 9,514
Qualified XIII 16.014 19.550 22.08% 90,531.2 1,769,901
Qualified XV 16.002 19.536 22.08% 17,017.4 332,453
</TABLE>
S-10
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units
-------- in Value of Outstanding Reserves
Beginning End of Accumulation at End at End
of Year Year Unit of Year of Year
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aetna Get Fund, Series C (continued):
Qualified XVI $15.835 $19.227 21.42% 28,960.1 $ 556,808
Qualified XVII 15.904 19.358 21.72% 95,802.4 1,854,577
Qualified XXI 16.740 19.557 16.83% (6) 48,418.5 946,913
Qualified XXII 16.752 19.571 16.83% (6) 92,268.0 1,805,772
- --------------------------------------------------------------------------------------------------------------------------------
Aetna Get Fund, Series D:
Qualified III 10.062 10.726 6.60% 3,810,727.5 40,872,636
Qualified V 10.058 10.704 6.42% 5,515.1 59,034
Qualified VI 10.062 10.726 6.60% 18,170,043.9 194,886,034
Qualified IX 10.065 10.745 6.76% 15,611.1 167,749
Qualified X (1.15) 10.062 10.726 6.60% 139,046.9 1,491,372
Qualified X (1.25) 10.062 10.726 6.60% 3,231,872.5 34,664,023
Qualified XI 10.068 10.775 7.02% 2,873,392.4 30,961,803
Qualified XII (0.65) 10.076 10.833 7.51% 102,963.8 1,115,377
Qualified XII (0.70) 10.467 10.832 3.49% (11) 67,005.7 725,790
Qualified XII (0.75) 10.079 10.825 7.40% 25,428.6 275,267
Qualified XII (0.80) 10.229 10.818 5.76% (11) 41,864.1 452,904
Qualified XII (0.85) 10.071 10.779 7.03% 202,198.1 2,179,410
Qualified XII (0.90) 10.160 10.805 6.35% (10) 22,607.0 244,272
Qualified XII (1.00) 10.073 10.792 7.14% 18,211.6 196,537
Qualified XII (1.05) 10.072 10.785 7.08% 4,843,476.6 52,237,951
Qualified XII (1.15) 10.566 10.772 1.95% (12) 8,484.1 91,391
Qualified XII (1.20) 10.068 10.765 6.92% 414,563.5 4,462,919
Qualified XII (1.25) 10.067 10.759 6.87% 7,379,720.4 79,396,426
Qualified XII (1.30) 10.066 10.752 6.82% 42,788.7 460,068
Qualified XII (1.40) 10.064 10.739 6.71% 17,125.9 183,914
Qualified XII (1.50) 10.069 10.726 6.52% (1) 4,237.4 45,449
Qualified XII (1.55) 10.060 10.719 6.55% 84,745.5 908,394
Qualified XII (1.75) 10.056 10.693 6.33% 13,930.9 148,960
Qualified XIII 10.068 10.765 6.92% 420,980.0 4,531,995
Qualified XV 10.068 10.765 6.92% 83,197.7 895,652
Qualified XVI 10.056 10.693 6.33% 132,567.9 1,417,517
Qualified XVII 10.062 10.726 6.60% 157,815.2 1,692,675
Qualified XVIII 10.062 10.726 6.60% 591,778.3 6,347,224
Qualified XXI 9.949 10.777 8.32% (6) 384,568.8 4,144,416
Qualified XXII 9.949 10.777 8.32% (6) 573,839.4 6,184,145
- --------------------------------------------------------------------------------------------------------------------------------
Aetna Get Fund, Series E:
Qualified III 10.000 10.760 7.60% (6) 1,175,742.6 12,651,122
Qualified V 10.019 10.751 7.31% (7) 489.8 5,266
Qualified VI 10.000 10.760 7.60% (6) 6,811,257.7 73,289,900
Qualified X (1.15) 10.020 10.755 7.34% (6) 162,651.2 1,749,277
Qualified X (1.25) 10.012 10.752 7.39% (6) 1,460,077.3 15,699,247
Qualified XI 10.000 10.787 7.87% (6) 793,284.8 8,556,796
Qualified XII (0.70) 10.355 10.807 4.37% (11) 4,273.8 46,188
Qualified XII (0.80) 10.115 10.801 6.78% (11) 33,946.1 366,660
Qualified XII (1.00) 10.001 10.789 7.88% (6) 2,108.2 22,746
Qualified XII (1.05) 10.000 10.787 7.87% (6) 1,369,132.2 14,768,193
Qualified XII (1.10) 10.000 10.784 7.84% (6) 54,629.0 589,097
Qualified XII (1.15) 10.516 10.781 2.52% (12) 1,600.5 17,255
Qualified XII (1.20) 10.000 10.778 7.78% (6) 106,496.3 1,147,788
Qualified XII (1.25) 10.000 10.775 7.75% (6) 1,782,985.0 19,211,276
Qualified XII (1.30) 10.002 10.772 7.70% (6) 12,179.6 131,196
Qualified XII (1.35) 10.060 10.769 7.05% (8) 3,590.8 38,669
Qualified XII (1.40) 10.006 10.766 7.60% (6) 7,037.4 75,764
Qualified XII (1.50) 10.038 10.760 7.19% (7) 9,588.6 103,175
Qualified XII (1.75) 10.004 10.745 7.41% (6) 1,012.4 10,879
Qualified XIII 10.001 10.778 7.77% (6) 110,714.9 1,193,255
Qualified XV 10.005 10.778 7.73% (6) 97,325.1 1,048,943
</TABLE>
S-11
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease)
-------- in Value of
Beginning End of Accumulation
of Year Year Unit
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aetna Get Fund, Series E (continued):
Qualified XVI $ 10.004 $ 10.745 7.41%
Qualified XVII 10.005 10.760 7.55%
Qualified XVIII 10.012 10.752 7.39%
Qualified XXI 10.005 10.787 7.82%
Qualified XXII 10.000 10.787 7.87%
- -------------------------------------------------------------------------------------
Aetna Get Fund, Series G:
Qualified III 10.003 10.370 3.67%
Qualified VI 9.998 10.370 3.72%
Qualified X (1.25) 9.999 10.369 3.70%
Qualified XI 9.999 10.384 3.85%
Qualified XII (0.65) 10.014 10.397 3.82%
Qualified XII (0.80) 10.054 10.392 3.36%
Qualified XII (0.90) 10.048 10.389 3.39%
Qualified XII (0.95) 9.998 10.379 3.81%
Qualified XII (1.00) 10.029 10.386 3.56%
Qualified XII (1.05) 10.004 10.384 3.80%
Qualified XII (1.10) 10.015 10.383 3.67%
Qualified XII (1.25) 10.005 10.378 3.73%
Qualified XII (1.30) 9.999 10.376 3.77%
Qualified XII (1.35) 10.072 10.375 3.01%
Qualified XII (1.40) 10.011 10.373 3.62%
Qualified XII (1.45) 9.999 10.371 3.72%
Qualified XII (1.75) 10.073 10.362 2.87%
Qualified XIII 10.005 10.379 3.74%
Qualified XV 9.998 10.379 3.81%
Qualified XVI 10.010 10.362 3.52%
Qualified XVII 10.020 10.370 3.49%
Qualified XVIII 10.026 10.369 3.42%
Qualified XXI 10.021 10.384 3.62%
Qualified XXII 10.007 10.384 3.77%
- -------------------------------------------------------------------------------------
Aetna Get Fund, Series H:
Qualified III 10.001 10.020 0.19%
Qualified VI 10.000 10.020 0.20%
Qualified X (1.25) 10.000 10.020 0.20%
Qualified XI 10.007 10.022 0.15%
Qualified XII (0.95) 10.015 10.021 0.06%
Qualified XII (1.25) 10.000 10.021 0.21%
Qualified XII (1.30) 10.005 10.021 0.16%
Qualified XII (1.35) 10.005 10.020 0.15%
Qualified XII (1.45) 10.007 10.020 0.13%
Qualified XIII 10.008 10.021 0.13%
Qualified XV 10.006 10.021 0.15%
Qualified XVI 10.015 10.019 0.04%
Qualified XVIII 10.006 10.020 0.14%
Qualified XXI 10.014 10.022 0.08%
- -------------------------------------------------------------------------------------
Aetna Growth and Income VP:
Qualified I 323.019 374.804 16.03%
Qualified III 245.765 284.994 15.96%
Qualified V 25.037 28.987 15.78%
Qualified VI 25.094 29.100 15.96%
Qualified VII 23.657 27.450 16.03%
Qualified VIII 23.301 27.018 15.95%
Qualified IX 23.323 27.182 16.55%
Qualified X (1.15) 25.225 29.280 16.08%
Qualified X (1.25) 25.094 29.100 15.96%
Qualified XI 25.319 29.475 16.41%
Qualified XII (0.40) 16.747 19.586 16.95%
<CAPTION>
- --------------------------------------------------------------------------------------
Units
Outstanding Reserves
at End at End
of Year of Year
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aetna Get Fund, Series E (continued):
Qualified XVI (6) 36,127.2 $ 388,203
Qualified XVII (6) 163,057.8 1,754,543
Qualified XVIII (6) 69,586.5 748,228
Qualified XXI (6) 208,645.0 2,250,556
Qualified XXII (6) 181,444.5 1,957,158
- --------------------------------------------------------------------------------------
Aetna Get Fund, Series G:
Qualified III (9) 652,808.0 6,769,699
Qualified VI (9) 1,877,479.2 19,469,026
Qualified X (1.25) (9) 493,375.1 5,115,589
Qualified XI (9) 90,486.0 939,626
Qualified XII (0.65) (9) 6,272.2 65,212
Qualified XII (0.80) (11) 1,379.7 14,338
Qualified XII (0.90) (10) 340.0 3,532
Qualified XII (0.95) (9) 14,669.7 152,263
Qualified XII (1.00) (10) 498.6 5,178
Qualified XII (1.05) (9) 212,129.8 2,202,850
Qualified XII (1.10) (9) 51,654.2 536,305
Qualified XII (1.25) (9) 739,313.3 7,672,438
Qualified XII (1.30) (9) 1,182.2 12,267
Qualified XII (1.35) (11) 3,428.9 35,574
Qualified XII (1.40) (9) 3,266.1 33,879
Qualified XII (1.45) (9) 40,814.1 423,298
Qualified XII (1.75) (12) 3,871.6 40,116
Qualified XIII (9) 30,304.5 314,543
Qualified XV (9) 34,688.8 360,048
Qualified XVI (9) 11,830.8 122,588
Qualified XVII (10) 29,549.5 306,422
Qualified XVIII (10) 70,357.2 729,503
Qualified XXI (10) 13,722.6 142,499
Qualified XXII (9) 19,410.4 201,562
- --------------------------------------------------------------------------------------
Aetna Get Fund, Series H:
Qualified III (12) 53,208.1 533,130
Qualified VI (12) 54,199.7 543,065
Qualified X (1.25) (12) 11,861.2 118,846
Qualified XI (12) 420.0 4,209
Qualified XII (0.95) (12) 1,556.5 15,598
Qualified XII (1.25) (12) 36,046.3 361,213
Qualified XII (1.30) (12) 1,295.0 12,976
Qualified XII (1.35) (12) 571.4 5,726
Qualified XII (1.45) (12) 3,803.9 38,115
Qualified XIII (12) 448.9 4,498
Qualified XV (12) 357.1 3,578
Qualified XVI (12) 1,043.1 10,451
Qualified XVIII (12) 11,877.3 119,007
Qualified XXI (12) 1,214.6 12,173
- --------------------------------------------------------------------------------------
Aetna Growth and Income VP:
Qualified I 124,050.3 46,494,563
Qualified III 1,555,542.4 443,319,945
Qualified V 15,312.1 443,854
Qualified VI 107,941,231.7 3,141,089,842
Qualified VII 7,891,082.0 216,606,278
Qualified VIII 52,006.6 1,405,121
Qualified IX 18,313.2 497,783
Qualified X (1.15) 488,809.5 14,312,523
Qualified X (1.25) 17,496,240.9 509,140,609
Qualified XI 4,530,330.3 133,533,424
Qualified XII (0.40) 2,978,732.9 58,340,903
</TABLE>
S-12
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
Value
Per Unit
--------
Beginning End of
of Year Year
- -----------------------------------------------------------------
<S> <C> <C>
Aetna Growth and Income VP (continued):
Qualified XII (0.45) $ 10.152 $ 11.867
Qualified XII (0.50) 10.665 12.460
Qualified XII (0.55) 10.922 11.847
Qualified XII (0.65) 10.867 11.828
Qualified XII (0.70) 10.936 11.819
Qualified XII (0.75) 10.133 11.809
Qualified XII (0.80) 11.108 12.939
Qualified XII (0.85) 16.779 19.535
Qualified XII (0.90) 10.804 12.572
Qualified XII (0.95) 16.735 19.464
Qualified XII (1.00) 16.713 19.429
Qualified XII (1.05) 16.691 19.393
Qualified XII (1.10) 16.669 19.358
Qualified XII (1.15) 16.647 19.323
Qualified XII (1.20) 16.625 19.288
Qualified XII (1.25) 16.603 19.253
Qualified XII (1.30) 16.581 19.218
Qualified XII (1.40) 16.537 19.148
Qualified XII (1.50) 16.493 19.078
Qualified XIII 25.291 29.416
Qualified XV 25.249 29.367
Qualified XVI 24.986 28.902
Qualified XVII 25.193 29.287
Qualified XVIII 25.193 29.287
Qualified XIX 324.288 377.218
Qualified XX 246.731 286.829
Qualified XXI 26.736 29.394
Qualified XXII 26.781 29.443
Annuity contracts in payment period
- -----------------------------------------------------------------
Aetna Growth VP:
Qualified III 13.597 18.124
Qualified V 17.862 23.771
Qualified VI 17.912 23.875
Qualified VIII 17.909 23.870
Qualified X (1.15) 17.943 23.940
Qualified X (1.25) 17.912 23.875
Qualified XI 18.005 24.094
Qualified XII (0.40) 18.018 24.222
Qualified XII (0.45) 11.470 15.412
Qualified XII (0.50) 12.397 16.649
Qualified XII (0.55) 12.980 15.387
Qualified XII (0.65) 12.835 15.362
Qualified XII (0.70) 12.378 15.350
Qualified XII (0.75) 11.449 15.338
Qualified XII (0.80) 13.030 17.447
Qualified XII (0.85) 18.036 24.137
Qualified XII (0.90) 12.681 16.962
Qualified XII (0.95) 18.005 24.071
Qualified XII (1.00) 17.989 24.039
Qualified XII (1.05) 17.974 24.006
Qualified XII (1.10) 17.958 23.973
Qualified XII (1.15) 17.943 23.940
Qualified XII (1.20) 17.927 23.908
Qualified XII (1.25) 17.912 23.875
Qualified XII (1.30) 18.880 23.843
Qualified XII (1.40) 17.865 23.778
Qualified XII (1.50) 17.834 23.713
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Increase (Decrease) Units
in Value of Outstanding Reserves
Accumulation at End at End
Unit of Year of Year
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aetna Growth and Income VP (continued):
Qualified XII (0.45) 16.89% 348,478.4 $ 4,135,244
Qualified XII (0.50) 16.83% 674,274.8 8,401,436
Qualified XII (0.55) 8.47% (11) 1,191,861.0 14,120,507
Qualified XII (0.65) 8.84% (4) 479,212.5 5,668,292
Qualified XII (0.70) 8.07% (5) 296,167.3 3,500,351
Qualified XII (0.75) 16.54% 806,180.4 9,520,415
Qualified XII (0.80) 16.48% 13,348,490.1 172,721,345
Qualified XII (0.85) 16.43% 5,572,186.8 108,853,321
Qualified XII (0.90) 16.36% 128,636.7 1,617,278
Qualified XII (0.95) 16.31% 2,450,338.3 47,693,642
Qualified XII (1.00) 16.25% 12,501,599.0 242,890,830
Qualified XII (1.05) 16.19% 341,405.3 6,621,019
Qualified XII (1.10) 16.13% 143,471.8 2,777,354
Qualified XII (1.15) 16.07% 514,327.5 9,938,338
Qualified XII (1.20) 16.02% 192,381.3 3,710,616
Qualified XII (1.25) 15.96% 35,467.5 682,848
Qualified XII (1.30) 15.90% 4,575.4 87,930
Qualified XII (1.40) 15.79% 2,976.6 56,996
Qualified XII (1.50) 15.67% 55,796.6 1,064,510
Qualified XIII 16.31% 1,028,948.7 30,267,616
Qualified XV 16.31% 975,159.8 28,637,704
Qualified XVI 15.67% 1,449,637.9 41,897,597
Qualified XVII 16.25% 4,958,302.8 145,215,966
Qualified XVIII 16.25% 5,385,977.0 157,741,446
Qualified XIX 16.32% 81,134.8 30,605,514
Qualified XX 16.25% 158,086.1 45,343,739
Qualified XXI 9.94% (5) 948,653.9 27,885,068
Qualified XXII 9.94% (5) 1,234,586.7 36,350,268
Annuity contracts in payment period 373,523,149
- ----------------------------------------------------------------------------------------------------------
Aetna Growth VP:
Qualified III 33.29% 781.3 14,161
Qualified V 33.08% 2,180.1 51,825
Qualified VI 33.29% 3,505,798.2 83,701,657
Qualified VIII 33.28% 1,147.1 27,382
Qualified X (1.15) 33.42% 30,864.5 738,909
Qualified X (1.25) 33.29% 516,658.3 12,335,324
Qualified XI 33.82% 172,921.7 4,166,336
Qualified XII (0.40) 34.43% 59,855.2 1,449,804
Qualified XII (0.45) 34.37% 134,661.4 2,075,404
Qualified XII (0.50) 34.30% 34,477.5 574,011
Qualified XII (0.55) 18.54% (11) 12,695.3 195,345
Qualified XII (0.65) 19.69% (10) 17,761.6 272,862
Qualified XII (0.70) 24.01% (5) 9,291.4 142,622
Qualified XII (0.75) 33.97% 28,754.1 441,021
Qualified XII (0.80) 33.90% 728,963.9 12,718,065
Qualified XII (0.85) 33.83% 65,689.6 1,585,562
Qualified XII (0.90) 33.76% 4,181.5 70,925
Qualified XII (0.95) 33.69% 53,956.8 1,298,817
Qualified XII (1.00) 33.63% 550,969.6 13,244,542
Qualified XII (1.05) 33.56% 44,979.2 1,079,764
Qualified XII (1.10) 33.49% 14,642.6 351,029
Qualified XII (1.15) 33.42% 25,112.6 601,206
Qualified XII (1.20) 33.36% 7,994.8 191,138
Qualified XII (1.25) 33.29% 7,486.1 178,733
Qualified XII (1.30) 26.29% (2) 380.7 9,078
Qualified XII (1.40) 33.10% 745.5 17,726
Qualified XII (1.50) 32.97% 5,473.2 129,785
</TABLE>
S-13
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units
-------- in Value of Outstanding Reserves
Beginning End of Accumulation at End at End
of Year Year Unit of Year of Year
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aetna Growth VP (continued):
Qualified XIII $18.005 $24.071 33.69% 26,330.1 $ 633,804
Qualified XV 18.005 24.071 33.69% 24,433.9 588,158
Qualified XVI 17.834 23.713 32.97% 63,830.9 1,513,617
Qualified XVII 17.912 23.875 33.29% 48,373.4 1,154,926
Qualified XVIII 18.010 24.091 33.76% 26,741.4 644,219
Qualified XXI 19.053 24.094 26.46% (5) 61,302.5 1,477,003
Qualified XXII 19.053 24.094 26.46% (5) 72,900.7 1,756,446
Annuity contracts in payment period 71,588
- --------------------------------------------------------------------------------------------------------------------------------
Aetna High Yield VP:
Qualified VI 9.212 9.739 5.72% 151,580.7 1,476,308
Qualified X (1.25) 9.212 9.739 5.72% 10,892.8 106,090
Qualified XI 9.231 9.798 6.14% 6,159.5 60,351
Qualified XII (0.40) 9.238 9.850 6.62% 2,048.8 20,181
Qualified XII (0.45) 9.743 9.912 1.73% (11) 68.0 674
Qualified XII (0.50) 9.260 9.864 6.52% 2,779.3 27,414
Qualified XII (0.55) 9.577 9.896 3.33% (11) 128.7 1,273
Qualified XII (0.65) 9.554 9.880 3.41% (10) 215.0 2,124
Qualified XII (0.70) 9.827 9.872 0.46% (5) 75.9 750
Qualified XII (0.75) 9.284 9.864 6.25% 97.6 963
Qualified XII (0.80) 9.241 9.814 6.20% 6,652.0 65,281
Qualified XII (0.85) 9.238 9.806 6.15% 7,192.3 70,524
Qualified XII (0.90) 9.802 9.797 (0.05%) (12) 146.2 1,432
Qualified XII (0.95) 9.231 9.789 6.04% 14,009.2 137,135
Qualified XII (1.00) 9.228 9.781 5.99% 11,321.5 110,732
Qualified XII (1.05) 9.225 9.772 5.93% 446.9 4,367
Qualified XII (1.10) 9.222 9.764 5.88% 51.2 500
Qualified XII (1.15) 9.218 9.756 5.84% 362.6 3,538
Qualified XII (1.20) 9.215 9.748 5.78% 118.8 1,158
Qualified XII (1.25) 9.348 9.739 4.18% (1) 259.8 2,531
Qualified XII (1.40) 9.555 9.715 1.67% (5) 29.8 290
Qualified XIII 9.231 9.789 6.04% 4.5 44
Qualified XV 9.231 9.789 6.04% 1,593.9 15,603
Qualified XVI 9.196 9.698 5.46% 706.9 6,855
Qualified XVII 9.212 9.739 5.72% 2,025.3 19,726
Qualified XVIII 9.212 9.739 5.72% 1,069.9 10,420
Qualified XXI 9.492 9.798 3.22% (8) 61.2 600
Qualified XXII 9.716 9.798 0.84% (5) 3,126.0 30,629
- --------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Bond VP:
Qualified III 10.578 10.333 (2.32%) 96,745.1 999,704
- --------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Large Cap VP:
Qualified V 18.704 22.923 22.56% 1,406.1 32,233
Qualified VI 18.772 23.044 22.76% 10,058,180.6 231,780,884
Qualified VIII 18.769 23.038 22.74% 1,284.5 29,593
Qualified X (1.15) 18.815 23.120 22.88% 56,950.1 1,316,689
Qualified X (1.25) 18.772 23.044 22.76% 1,067,590.0 24,601,562
Qualified XI 18.902 23.294 23.24% 580,524.9 13,523,011
Qualified XII (0.40) 18.916 23.418 23.80% 193,246.7 4,525,512
Qualified XII (0.45) 11.307 13.991 23.74% 226,926.8 3,174,926
Qualified XII (0.50) 12.019 14.865 23.68% 24,910.6 370,302
Qualified XII (0.55) 12.633 13.968 10.57% (11) 107,026.9 1,494,998
Qualified XII (0.65) 12.586 13.946 10.81% (4) 198,941.1 2,774,421
Qualified XII (0.70) 12.362 13.935 12.72% (5) 34,699.5 483,527
Qualified XII (0.75) 11.286 13.923 23.37% 81,577.5 1,135,841
Qualified XII (0.80) 12.587 15.521 23.31% 2,792,639.0 43,344,718
Qualified XII (0.85) 18.945 23.350 23.25% 611,611.4 14,280,925
Qualified XII (0.90) 12.206 15.036 23.19% 14,614.0 219,739
Qualified XII (0.95) 18.902 23.273 23.12% 297,993.7 6,935,159
</TABLE>
S-14
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
Value
Per Unit
--------
Beginning End of
of Year Year
- --------------------------------------------------------------------
<S> <C> <C>
Aetna Index Plus Large Cap VP (continued):
Qualified XII (1.00) $18.880 $23.235
Qualified XII (1.05) 18.859 23.196
Qualified XII (1.10) 18.837 23.158
Qualified XII (1.15) 18.815 23.120
Qualified XII (1.20) 18.794 23.082
Qualified XII (1.25) 18.772 23.044
Qualified XII (1.30) 18.751 23.006
Qualified XII (1.40) 18.708 22.930
Qualified XII (1.50) 18.665 22.855
Qualified XIII 18.902 23.273
Qualified XIV 18.772 23.044
Qualified XV 18.888 23.256
Qualified XVI 18.691 22.887
Qualified XVII 18.802 23.103
Qualified XVIII 18.876 23.252
Qualified XXI 20.242 23.277
Qualified XXII 20.257 23.294
Annuity contracts in payment period
- --------------------------------------------------------------------
Aetna Index Plus Mid Cap VP:
Qualified III 11.338 12.967
Qualified VI 10.891 12.455
Qualified VIII 10.582 12.454
Qualified X (1.25) 10.891 12.455
Qualified XI 10.913 12.530
Qualified XII (0.40) 10.921 12.597
Qualified XII (0.45) 10.889 12.916
Qualified XII (0.50) 10.947 12.614
Qualified XII (0.55) 11.478 12.896
Qualified XII (0.65) 11.204 12.875
Qualified XII (0.70) 11.323 12.864
Qualified XII (0.75) 11.183 12.854
Qualified XII (0.80) 10.925 12.551
Qualified XII (0.85) 10.921 12.540
Qualified XII (0.90) 11.099 12.529
Qualified XII (0.95) 10.913 12.519
Qualified XII (1.00) 10.909 12.508
Qualified XII (1.05) 10.906 12.498
Qualified XII (1.10) 10.902 12.487
Qualified XII (1.15) 10.898 12.477
Qualified XII (1.20) 10.894 12.466
Qualified XII (1.25) 10.154 12.455
Qualified XII (1.30) 10.887 12.445
Qualified XII (1.50) 10.872 12.403
Qualified XIII 10.913 12.519
Qualified XV 10.913 12.519
Qualified XVI 10.872 12.403
Qualified XVIII 10.891 12.455
Qualified XXI 10.927 12.530
Qualified XXII 10.927 12.530
- --------------------------------------------------------------------
Aetna Index Plus Small Cap VP:
Qualified III 9.157 10.019
Qualified VI 8.815 9.645
Qualified VIII 8.606 9.644
Qualified X (1.15) 9.414 9.661
Qualified X (1.25) 8.815 9.645
Qualified XI 8.834 9.703
Qualified XII (0.40) 8.840 9.754
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Increase (Decrease) Units
in Value of Outstanding Reserves
Accumulation at End at End
Unit of Year of Year
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aetna Index Plus Large Cap VP (continued):
Qualified XII (1.00) 23.07% 1,544,113.0 $35,876,783
Qualified XII (1.05) 23.00% 61,199.8 1,419,609
Qualified XII (1.10) 22.94% 65,998.6 1,528,406
Qualified XII (1.15) 22.88% 49,777.3 1,150,854
Qualified XII (1.20) 22.82% 32,935.8 760,222
Qualified XII (1.25) 22.76% 6,042.9 139,252
Qualified XII (1.30) 22.69% 14,317.4 329,386
Qualified XII (1.40) 22.57% 1,398.9 32,077
Qualified XII (1.50) 22.45% 22,096.9 505,026
Qualified XIII 23.12% 83,940.6 1,953,535
Qualified XIV 22.76% 2,748,955.1 63,346,969
Qualified XV 23.13% 37,025.1 861,037
Qualified XVI 22.45% 118,787.7 2,718,738
Qualified XVII 22.88% 80,552.2 1,861,018
Qualified XVIII 23.18% 53,167.9 1,236,259
Qualified XXI 14.99% (5) 309,654.8 7,207,844
Qualified XXII 14.99% (5) 120,481.2 2,806,532
Annuity contracts in payment period 1,234,629
- -------------------------------------------------------------------------------------------------------------
Aetna Index Plus Mid Cap VP:
Qualified III 14.37% 73,984.0 959,354
Qualified VI 14.36% 395,149.5 4,921,781
Qualified VIII 17.69% (1) 1.5 18
Qualified X (1.25) 14.36% 51,901.1 646,454
Qualified XI 14.82% 32,616.9 408,704
Qualified XII (0.40) 15.35% 2,808.2 35,376
Qualified XII (0.45) 18.62% (9) 2,661.4 34,376
Qualified XII (0.50) 15.23% 3,620.5 45,671
Qualified XII (0.55) 12.35% (11) 60.3 777
Qualified XII (0.65) 14.91% (10) 5,592.0 71,996
Qualified XII (0.70) 13.61% (5) 285.2 3,669
Qualified XII (0.75) 14.94% 3,958.9 50,888
Qualified XII (0.80) 14.88% 50,226.6 630,372
Qualified XII (0.85) 14.82% 16,931.2 212,317
Qualified XII (0.90) 12.88% (9) 41.6 521
Qualified XII (0.95) 14.72% 2,499.6 31,292
Qualified XII (1.00) 14.66% 62,741.6 784,786
Qualified XII (1.05) 14.60% 460.2 5,751
Qualified XII (1.10) 14.54% 1,327.0 16,571
Qualified XII (1.15) 14.49% 933.2 11,643
Qualified XII (1.20) 14.43% 1,114.9 13,898
Qualified XII (1.25) 22.66% (3) 1,234.4 15,375
Qualified XII (1.30) 14.31% 385.2 4,794
Qualified XII (1.50) 14.08% 160.9 1,995
Qualified XIII 14.72% 5,399.2 67,592
Qualified XV 14.72% 3,069.4 38,425
Qualified XVI 14.08% 3,733.0 46,300
Qualified XVIII 14.36% 3,584.7 44,650
Qualified XXI 14.67% (5) 2,026.9 25,398
Qualified XXII 14.67% (5) 6,385.8 80,016
- -------------------------------------------------------------------------------------------------------------
Aetna Index Plus Small Cap VP:
Qualified III 9.41% 118,433.1 1,186,554
Qualified VI 9.42% 407,202.6 3,927,371
Qualified VIII 12.06% (1) 1.8 18
Qualified X (1.15) 2.62% (12) 1,062.2 10,262
Qualified X (1.25) 9.42% 73,715.1 710,965
Qualified XI 9.84% 14,120.0 137,004
Qualified XII (0.40) 10.34% 2,620.1 25,558
</TABLE>
S-15
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units
-------- in Value of Outstanding Reserves
Beginning End of Accumulation at End at End
of Year Year Unit of Year of Year
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aetna Index Plus Small Cap VP (continued):
Qualified XII (0.45) $ 8.954 $10.166 13.54% (9) 1,372.7 $ 13,956
Qualified XII (0.50) 8.861 9.768 10.24% 1,189.7 11,621
Qualified XII (0.55) 9.235 10.150 9.91% (11) 70.3 714
Qualified XII (0.65) 8.416 10.134 20.41% (4) 40,166.0 407,029
Qualified XII (0.70) 8.998 10.126 12.54% (9) 42.2 427
Qualified XII (0.75) 9.201 10.117 9.96% 2,982.2 30,172
Qualified XII (0.80) 8.843 9.718 9.89% 50,270.2 488,546
Qualified XII (0.85) 8.840 9.710 9.84% 20,738.7 201,377
Qualified XII (0.90) 8.837 9.702 9.79% 585.8 5,683
Qualified XII (0.95) 8.834 9.694 9.74% 16,330.3 158,302
Qualified XII (1.00) 8.831 9.686 9.68% 63,842.3 618,352
Qualified XII (1.05) 8.827 9.677 9.63% 1,537.6 14,880
Qualified XII (1.10) 8.476 9.669 14.08% (2) 1,596.3 15,435
Qualified XII (1.15) 8.821 9.661 9.52% 3,035.3 29,325
Qualified XII (1.20) 8.818 9.653 9.47% 1,732.9 16,727
Qualified XII (1.30) 8.812 9.637 9.36% 468.3 4,513
Qualified XII (1.50) 8.800 9.604 9.14% 233.0 2,238
Qualified XIII 8.834 9.694 9.74% 5,249.1 50,884
Qualified XV 8.834 9.694 9.74% 1,965.0 19,048
Qualified XVI 8.800 9.604 9.14% 1,705.1 16,376
Qualified XVII 8.815 9.645 9.42% 722.4 6,968
Qualified XVIII 8.815 9.645 9.42% 6,066.5 58,510
Qualified XXI 8.783 9.703 10.47% (5) 5,599.7 54,332
Qualified XXII 8.783 9.703 10.47% (5) 5,602.6 54,361
- ---------------------------------------------------------------------------------------------------------------------------------
Aetna International VP:
Qualified V 10.104 14.554 44.04% (4) 56.3 819
Qualified VI 9.765 14.594 49.45% 271,051.8 3,955,686
Qualified VIII 9.945 14.592 46.73% (1) 5.3 77
Qualified X (1.15) 11.160 14.618 30.99% (10) 7,827.5 114,426
Qualified X (1.25) 9.765 14.594 49.45% 55,009.4 802,798
Qualified XI 9.785 14.682 50.05% 5,886.4 86,422
Qualified XII (0.40) 10.059 14.760 46.73% (2) 1,479.7 21,840
Qualified XII (0.45) 9.567 14.414 50.66% 19,616.2 282,743
Qualified XII (0.50) 9.815 14.780 50.59% 1,028.7 15,204
Qualified XII (0.55) 11.236 14.391 28.08% (11) 59.2 852
Qualified XII (0.65) 11.021 14.367 30.36% (10) 405.0 5,818
Qualified XII (0.70) 10.927 14.356 31.38% (10) 13.7 196
Qualified XII (0.75) 9.550 14.344 50.20% 133.9 1,921
Qualified XII (0.80) 9.795 14.705 50.13% 43,135.0 634,305
Qualified XII (0.85) 9.792 14.693 50.05% 12,522.6 183,991
Qualified XII (0.90) 11.286 14.680 30.07% (9) 23.5 345
Qualified XII (0.95) 9.785 14.668 49.90% 4,750.0 69,672
Qualified XII (1.00) 9.781 14.656 49.84% 54,742.1 802,278
Qualified XII (1.05) 9.778 14.643 49.75% 416.6 6,101
Qualified XII (1.10) 9.800 14.631 49.30% (2) 767.4 11,228
Qualified XII (1.15) 9.771 14.618 49.61% 726.0 10,612
Qualified XII (1.20) 9.768 14.606 49.53% 354.4 5,176
Qualified XII (1.25) 10.086 14.594 44.70% (3) 126.2 1,841
Qualified XII (1.30) 10.019 14.582 45.54% (2) 149.4 2,178
Qualified XII (1.40) 10.925 14.557 33.24% (7) 21.1 307
Qualified XII (1.50) 10.050 14.532 44.60% (1) 36.4 529
Qualified XIII 9.785 14.668 49.90% 1,202.9 17,644
Qualified XV 9.785 14.668 49.90% 752.4 11,036
Qualified XVI 9.748 14.532 49.08% 4,118.1 59,846
Qualified XVIII 9.765 14.594 49.45% 21,170.8 308,963
Qualified XXI 10.489 14.681 39.97% (5) 1,249.9 18,351
Qualified XXII 10.489 14.681 39.97% (5) 19,174.1 281,504
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
S-16
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units
-------- in Value of Outstanding Reserves
Beginning End of Accumulation at End at End
of Year Year Unit of Year of Year
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aetna Legacy VP:
Qualified III $14.248 $15.070 5.77% 46,461.8 $ 700,166
Qualified V 14.171 14.964 5.60% 739.3 11,062
Qualified VI 14.248 15.070 5.77% 1,420,930.7 21,413,019
Qualified X (1.15) 14.360 15.203 5.87% 43,421.5 660,142
Qualified X (1.25) 14.310 15.135 5.77% 412,345.7 6,240,997
Qualified XI 14.375 15.264 6.18% 53,313.0 813,781
Qualified XII (0.40) 13.111 13.986 6.67% 21,808.7 305,011
Qualified XII (0.45) 10.103 10.738 6.29% (1) 32,691.1 351,048
Qualified XII (0.50) 10.293 10.968 6.56% 495.1 5,430
Qualified XII (0.55) 10.273 10.721 4.36% (11) 22,642.8 242,755
Qualified XII (0.65) 10.114 10.704 5.83% (4) 62,233.0 666,127
Qualified XII (0.70) 10.364 10.695 3.19% (5) 834.1 8,920
Qualified XII (0.75) 10.054 10.686 6.29% 19,173.7 204,899
Qualified XII (0.80) 10.423 11.073 6.24% 232,706.5 2,576,858
Qualified XII (0.85) 13.136 13.950 6.20% 83,669.8 1,167,153
Qualified XII (0.90) 10.351 10.986 6.13% 549.0 6,032
Qualified XII (0.95) 13.102 13.899 6.08% 38,638.7 537,032
Qualified XII (1.00) 13.084 13.874 6.04% 197,880.9 2,745,308
Qualified XII (1.05) 13.067 13.848 5.98% 38,755.2 536,693
Qualified XII (1.10) 13.050 13.823 5.92% 23,031.1 318,362
Qualified XII (1.15) 13.033 13.798 5.87% 19,761.9 272,674
Qualified XII (1.20) 13.015 13.773 5.82% 27,715.3 381,719
Qualified XII (1.25) 12.998 13.748 5.77% 5,897.3 81,074
Qualified XII (1.30) 12.981 13.723 5.72% 1,546.2 21,218
Qualified XII (1.40) 12.666 13.673 7.95% (3) 125.0 1,709
Qualified XII (1.50) 12.913 13.623 5.50% 7,895.5 107,563
Qualified XIII 14.361 15.234 6.08% 3,378.7 51,473
Qualified XV 14.336 15.208 6.08% 7,165.0 108,967
Qualified XVI 14.187 14.967 5.50% 23,514.7 351,949
Qualified XVII 14.327 15.206 6.14% 22,032.6 335,024
Qualified XVIII 14.389 15.272 6.14% 43,007.6 656,814
Qualified XXI 14.711 15.222 3.47% (5) 42,489.1 646,778
Qualified XXII 14.736 15.248 3.47% (5) 8,034.4 122,513
Annuity contracts in payment period 247,224
- -------------------------------------------------------------------------------------------------------------------------------
Aetna Money Market VP:
Qualified I 43.523 45.192 3.83% 35,830.2 1,619,232
Qualified III 42.883 44.501 3.77% 845,679.0 37,633,362
Qualified V 12.362 12.808 3.61% 26,389.7 337,990
Qualified VI 12.447 12.917 3.78% 11,010,658.5 142,219,462
Qualified VII 12.367 12.842 3.84% 318,287.7 4,087,302
Qualified VIII 11.986 12.437 3.76% 3,577.1 44,489
Qualified IX 12.349 12.847 4.03% 1,744.1 22,406
Qualified X (1.15) 12.512 12.997 3.88% 348,707.6 4,532,211
Qualified X (1.25) 12.447 12.917 3.78% 2,636,397.2 34,053,096
Qualified XI 12.558 13.083 4.18% 345,616.6 4,521,799
Qualified XII (0.40) 11.225 11.748 4.66% 271,583.3 3,190,538
Qualified XII (0.45) 10.706 10.777 0.66% (11) 41,968.6 452,293
Qualified XII (0.50) 10.399 10.872 4.55% 70,538.5 766,899
Qualified XII (0.55) 10.669 10.760 0.85% (11) 67,586.8 727,205
Qualified XII (0.65) 10.407 10.742 3.22% (4) 249,861.7 2,684,068
Qualified XII (0.70) 10.434 10.734 2.88% (5) 38,318.7 411,297
Qualified XII (0.75) 10.283 10.725 4.30% 23,586.3 252,961
Qualified XII (0.80) 10.414 10.855 4.23% 1,891,667.2 20,534,942
Qualified XII (0.85) 11.246 11.717 4.19% 472,334.7 5,534,575
Qualified XII (0.90) 10.381 10.811 4.14% 11,231.6 121,422
Qualified XII (0.95) 11.217 11.675 4.08% 392,226.2 4,579,187
Qualified XII (1.00) 11.202 11.654 4.03% 2,142,833.9 24,971,836
</TABLE>
S-17
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units
-------- in Value of Outstanding Reserves
Beginning End of Accumulation at End at End
of Year Year Unit of Year of Year
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aetna Money Market VP (continued):
Qualified XII (1.05) $11.187 $11.632 3.98% 47,453.3 $ 551,997
Qualified XII (1.10) 11.172 11.611 3.93% 25,798.4 299,553
Qualified XII (1.15) 11.158 11.590 3.87% 87,883.4 1,018,584
Qualified XII (1.20) 11.143 11.569 3.82% 40,450.3 467,972
Qualified XII (1.25) 11.128 11.548 3.77% 11,404.3 131,697
Qualified XII (1.30) 11.114 11.527 3.72% 5,569.1 64,195
Qualified XII (1.40) 11.084 11.485 3.62% 441.1 5,066
Qualified XII (1.50) 11.055 11.443 3.51% 14,502.9 165,962
Qualified XIII 12.545 13.057 4.08% 117,934.1 1,539,853
Qualified XV 12.524 13.035 4.08% 81,149.2 1,057,796
Qualified XVI 12.393 12.829 3.52% 136,761.4 1,754,461
Qualified XVII 12.447 12.917 3.78% 515,620.8 6,660,030
Qualified XVIII 12.447 12.917 3.78% 816,768.4 10,549,812
Qualified XIX 43.523 45.192 3.83% 15,404.6 696,161
Qualified XX 42.883 44.501 3.77% 82,223.8 3,659,023
Qualified XXI 12.707 13.047 2.68% (5) 139,149.8 1,815,524
Qualified XXII 12.728 13.069 2.68% (5) 124,834.9 1,631,463
Annuity contracts in payment period 80,784
- ------------------------------------------------------------------------------------------------------------------------------
Aetna Real Estate Securities VP:
Qualified V 8.529 8.370 (1.86%) (3) 13.7 115
Qualified VI 8.873 8.393 (5.41%) 140,481.1 1,179,054
Qualified VIII 8.872 8.392 (5.41%) 242.7 2,037
Qualified X (1.25) 8.873 8.393 (5.41%) 12,462.0 104,594
Qualified XI 8.891 8.444 (5.03%) 13,312.1 112,401
Qualified XII (0.40) 8.898 8.488 (4.61%) 2,266.6 19,240
Qualified XII (0.45) 8.436 8.544 1.28% (11) 33.3 284
Qualified XII (0.50) 8.919 8.500 (4.70%) 0.1 1
Qualified XII (0.65) 8.263 8.517 3.07% (11) 14.8 126
Qualified XII (0.70) 8.621 8.510 (1.29%) (9) 14.3 122
Qualified XII (0.75) 8.944 8.503 (4.93%) 74.8 636
Qualified XII (0.80) 8.900 8.457 (4.98%) 21,244.9 179,671
Qualified XII (0.85) 8.897 8.450 (5.02%) 2,944.7 24,882
Qualified XII (0.95) 8.891 8.436 (5.12%) 17,117.9 144,401
Qualified XII (1.00) 8.888 8.429 (5.16%) 11,149.7 93,976
Qualified XII (1.05) 8.885 8.421 (5.22%) 171.0 1,440
Qualified XII (1.10) 8.882 8.414 (5.27%) 382.5 3,219
Qualified XII (1.15) 8.879 8.407 (5.32%) 3,933.4 33,069
Qualified XII (1.20) 8.876 8.400 (5.36%) 913.7 7,675
Qualified XII (1.25) 8.830 8.393 (4.95%) (9) 1.1 10
Qualified XII (1.40) 9.402 8.372 (10.96%) (5) 32.8 275
Qualified XIII 8.891 8.436 (5.12%) 1,263.7 10,660
Qualified XV 8.891 8.436 (5.12%) 107.2 904
Qualified XVI 8.857 8.358 (5.63%) 1,197.0 10,004
Qualified XVIII 8.873 8.393 (5.41%) 2,294.5 19,258
Qualified XXI 9.523 8.443 (11.34%) (5) 607.9 5,133
Qualified XXII 9.523 8.443 (11.34%) (5) 3,605.0 30,438
- ------------------------------------------------------------------------------------------------------------------------------
Aetna Small Company VP:
Qualified V 13.595 17.540 29.02% 35.8 628
Qualified VI 13.633 17.617 29.22% 1,598,681.6 28,163,583
Qualified VIII 13.631 17.613 29.21% 195.3 3,440
Qualified X (1.15) 13.657 17.665 29.35% 20,667.6 365,092
Qualified X (1.25) 13.633 17.617 29.22% 183,701.3 3,236,221
Qualified XI 13.704 17.778 29.73% 58,527.7 1,040,512
Qualified XII (0.40) 13.714 17.873 30.33% 18,169.7 324,742
Qualified XII (0.45) 9.176 11.953 30.26% 63,697.3 761,345
Qualified XII (0.50) 9.312 12.124 30.20% 7,762.6 94,111
Qualified XII (0.55) 9.996 11.933 19.38% (11) 17,508.6 208,935
</TABLE>
S-18
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units
-------- in Value of Outstanding Reserves
Beginning End of Accumulation at End at End
of Year Year Unit of Year of Year
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aetna Small Company VP (continued):
Qualified XII (0.65) $ 9.740 $11.914 22.32% (10) 8,502.2 $ 101,295
Qualified XII (0.70) 9.503 11.904 25.27% (5) 3,486.1 41,501
Qualified XII (0.75) 9.159 11.895 29.87% 15,497.8 184,344
Qualified XII (0.80) 9.764 12.675 29.81% 1,290,260.0 16,353,637
Qualified XII (0.85) 13.728 17.810 29.73% 36,864.4 656,562
Qualified XII (0.90) 9.513 12.336 29.68% 6,872.1 84,774
Qualified XII (0.95) 13.704 17.762 29.61% 54,303.1 964,511
Qualified XII (1.00) 13.692 17.737 29.54% 405,201.8 7,187,234
Qualified XII (1.05) 13.680 17.713 29.48% 6,349.8 112,476
Qualified XII (1.10) 13.668 17.689 29.42% 7,547.6 133,511
Qualified XII (1.15) 13.657 17.665 29.35% 12,872.8 227,397
Qualified XII (1.20) 13.645 17.641 29.29% 18,254.1 322,017
Qualified XII (1.25) 13.633 17.617 29.22% 8,927.9 157,280
Qualified XII (1.40) 13.598 17.545 29.03% 282.6 4,959
Qualified XII (1.50) 13.574 17.497 28.90% 3,951.2 69,135
Qualified XIII 13.704 17.762 29.61% 12,641.7 224,537
Qualified XV 13.704 17.762 29.61% 9,745.4 173,094
Qualified XVI 13.574 17.497 28.90% 18,033.2 315,526
Qualified XVII 13.633 17.617 29.22% 7,350.4 129,491
Qualified XVIII 13.708 17.776 29.68% 4,403.0 78,267
Qualified XXI 14.508 17.778 22.54% (5) 29,451.5 523,590
Qualified XXII 14.508 17.778 22.54% (5) 37,984.5 675,291
Annuity contracts in payment period 11,036
- ------------------------------------------------------------------------------------------------------------------------------
Aetna Value Opportunity VP:
Qualified III 12.088 14.274 18.08% 74,767.5 1,067,264
Qualified V 15.985 18.847 17.90% 286.5 5,399
Qualified VI 16.030 18.930 18.09% 987,707.1 18,697,106
Qualified VIII 16.028 18.926 18.08% 412.6 7,810
Qualified X (1.15) 16.754 18.982 13.30% (9) 2,242.2 42,561
Qualified X (1.25) 16.030 18.930 18.09% 118,475.7 2,242,722
Qualified XI 16.113 19.103 18.56% 52,282.7 998,763
Qualified XII (0.40) 16.125 19.205 19.10% 12,433.6 238,784
Qualified XII (0.45) 12.467 12.665 1.59% (11) 10,292.9 130,365
Qualified XII (0.50) 11.369 13.527 18.98% 2,750.3 37,203
Qualified XII (0.55) 11.893 12.645 6.32% (11) 20,593.3 260,403
Qualified XII (0.65) 11.196 12.625 12.76% (4) 69,481.4 877,183
Qualified XII (0.70) 11.759 12.615 7.28% (5) 2,838.6 35,808
Qualified XII (0.75) 10.620 12.604 18.68% 16,090.7 202,814
Qualified XII (0.80) 11.692 13.870 18.63% 356,704.5 4,947,460
Qualified XII (0.85) 16.141 19.138 18.57% 19,876.9 380,395
Qualified XII (0.90) 11.462 13.583 18.50% 6,153.7 83,584
Qualified XII (0.95) 16.113 19.085 18.44% 42,539.8 811,889
Qualified XII (1.00) 16.099 19.059 18.39% 94,639.0 1,803,762
Qualified XII (1.05) 16.085 19.033 18.33% 4,555.5 86,707
Qualified XII (1.10) 16.071 19.007 18.27% 1,480.1 28,132
Qualified XII (1.15) 16.057 18.982 18.22% 5,972.7 113,371
Qualified XII (1.20) 16.044 18.956 18.15% 12,127.4 229,883
Qualified XII (1.25) 16.030 18.930 18.09% 2,021.5 38,266
Qualified XII (1.30) 16.016 18.904 18.03% 192.0 3,630
Qualified XII (1.40) 15.988 18.852 17.91% 135.5 2,554
Qualified XII (1.50) 15.960 18.801 17.80% 2,344.1 44,071
Qualified XIII 16.113 19.085 18.44% 3,855.4 73,581
Qualified XV 16.113 19.085 18.44% 4,285.3 81,787
Qualified XVI 15.960 18.801 17.80% 12,802.8 240,706
Qualified XVII 16.030 18.930 18.09% 10,011.1 189,507
Qualified XVIII 16.118 19.101 18.51% 2,382.2 45,501
Qualified XXI 17.291 19.103 10.48% (5) 11,791.7 225,258
Qualified XXII 17.291 19.103 10.48% (5) 19,132.0 365,480
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
S-19
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units
-------- in Value of Outstanding Reserves
Beginning End of Accumulation at End at End
of Year Year Unit of Year of Year
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
AIM V.I. Funds:
Capital Appreciation Fund:
Qualified V $10.681 $13.738 28.62% (10) 360.5 $ 4,952
Qualified VI 10.217 13.753 34.61% (5) 77,469.7 1,065,430
Qualified VIII 10.134 13.752 35.70% (10) 4.0 55
Qualified X (1.15) 10.465 13.762 31.51% (8) 78.7 1,083
Qualified X (1.25) 10.217 13.753 34.61% (5) 7,991.7 109,909
Qualified XII (0.40) 10.105 13.834 36.90% (9) 1,128.9 15,617
Qualified XII (0.55) 10.908 13.820 26.70% (11) 48.0 663
Qualified XII (0.70) 10.189 13.805 35.49% (9) 82.4 1,137
Qualified XII (0.75) 9.957 13.801 38.61% (5) 49.2 680
Qualified XII (0.80) 10.166 13.796 35.71% (6) 21,990.9 303,382
Qualified XII (0.85) 10.489 13.791 31.48% (6) 2,863.3 39,488
Qualified XII (0.95) 10.487 13.781 31.41% (6) 613.3 8,452
Qualified XII (1.00) 9.821 13.777 40.28% (5) 13,134.2 180,945
Qualified XII (1.05) 9.877 13.772 39.44% (5) 610.7 8,410
Qualified XII (1.10) 10.778 13.767 27.73% (7) 250.6 3,450
Qualified XII (1.15) 9.693 13.762 41.98% (5) 517.7 7,125
Qualified XII (1.20) 10.195 13.758 34.95% (9) 218.3 3,003
Qualified XII (1.25) 12.638 13.753 8.82% (12) 16.6 229
Qualified XII (1.30) 9.857 13.748 39.47% (10) 53.9 741
Qualified XV 9.660 13.745 42.29% (6) 41.7 573
Qualified XVI 10.165 13.729 35.06% (8) 2,372.0 32,565
Qualified XVII 10.649 13.759 29.20% (7) 2,465.1 33,917
Qualified XVIII 10.003 13.759 37.55% (6) 616.6 8,483
- ---------------------------------------------------------------------------------------------------------------------------
Growth and Income Fund:
Qualified VI 9.627 11.716 21.70% (5) 470,276.7 5,509,569
Qualified VIII 10.883 11.715 7.64% (12) 314.0 3,678
Qualified X (1.25) 9.627 11.716 21.70% (5) 53,572.1 627,629
Qualified XII (0.40) 10.351 11.785 13.85% (7) 425.5 5,014
Qualified XII (0.45) 10.518 11.781 12.01% (11) 882.4 10,395
Qualified XII (0.55) 10.229 11.773 15.09% (11) 879.7 10,356
Qualified XII (0.65) 10.785 11.764 9.08% (11) 16.6 195
Qualified XII (0.70) 9.404 11.760 25.05% (9) 41.2 484
Qualified XII (0.75) 9.275 11.756 26.75% (6) 2,337.5 27,480
Qualified XII (0.80) 9.280 11.752 26.64% (6) 81,159.5 953,802
Qualified XII (0.85) 9.575 11.748 22.69% (6) 19,773.7 232,303
Qualified XII (0.95) 10.261 11.740 14.41% (7) 10,352.2 121,534
Qualified XII (1.00) 9.939 11.736 18.08% (5) 160,744.5 1,886,482
Qualified XII (1.05) 9.842 11.732 19.20% (6) 10,546.3 123,728
Qualified XII (1.10) 10.373 11.728 13.06% (7) 280.9 3,295
Qualified XII (1.15) 9.204 11.724 27.38% (8) 463.7 5,436
Qualified XII (1.20) 9.601 11.720 22.07% (6) 178.9 2,096
Qualified XII (1.25) 9.470 11.716 23.72% (10) 22.4 262
Qualified XII (1.30) 10.636 11.712 10.12% (11) 892.6 10,454
Qualified XII (1.50) 9.550 11.695 22.46% (10) 22.4 262
Qualified XIII 9.645 11.710 21.41% (9) 328.1 3,842
Qualified XV 9.601 11.710 21.97% (6) 115.1 1,348
Qualified XVI 9.684 11.695 20.77% (6) 5,151.3 60,246
Qualified XVII 9.763 11.721 20.06% (9) 4,407.5 51,659
Qualified XVIII 9.566 11.721 22.53% (6) 6,703.9 78,575
Qualified XXI 9.727 11.721 20.50% (10) 1,866.7 21,879
- ---------------------------------------------------------------------------------------------------------------------------
Growth Fund:
Qualified V 10.278 12.055 17.29% (10) 375.4 4,525
Qualified VI 9.513 12.069 26.87% (5) 240,556.1 2,903,181
Qualified X (1.15) 10.207 12.077 18.32% (8) 14.3 172
Qualified X (1.25) 9.819 12.069 22.91% (5) 31,910.4 385,114
Qualified XII (0.40) 10.158 12.140 19.51% (9) 114.3 1,387
</TABLE>
S-20
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units
-------- in Value of Outstanding Reserves
Beginning End of Accumulation at End at End
of Year Year Unit of Year of Year
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Growth Fund (continued):
Qualified XII (0.55) $10.242 $12.127 18.40% (11) 989.8 $ 12,004
Qualified XII (0.65) 10.100 12.119 19.99% (10) 1,727.9 20,940
Qualified XII (0.70) 11.387 12.115 6.39% (12) 54.3 658
Qualified XII (0.75) 9.867 12.111 22.74% (8) 97.7 1,184
Qualified XII (0.80) 10.306 12.106 17.47% (7) 51,297.6 621,025
Qualified XII (0.85) 10.118 12.102 19.61% (6) 14,757.5 178,597
Qualified XII (0.90) 11.422 12.098 5.92% (12) 264.3 3,197
Qualified XII (0.95) 9.465 12.094 27.78% (5) 6,721.5 81,288
Qualified XII (1.00) 9.382 12.090 28.86% (5) 32,099.1 388,064
Qualified XII (1.05) 9.632 12.085 25.47% (5) 956.7 11,563
Qualified XII (1.10) 10.484 12.081 15.23% (7) 33.9 409
Qualified XII (1.15) 9.380 12.077 28.75% (5) 1,061.5 12,820
Qualified XII (1.20) 9.493 12.073 27.18% (8) 166.9 2,015
Qualified XII (1.25) 9.783 12.069 23.37% (10) 23.4 283
Qualified XII (1.30) 9.916 12.064 21.66% (9) 105.1 1,268
Qualified XII (1.40) 10.959 12.056 10.01% (11) 2.6 31
Qualified XII (1.50) 9.898 12.048 21.72% (7) 135.2 1,628
Qualified XIII 10.229 12.098 18.27% (7) 110.3 1,334
Qualified XV 10.595 12.098 14.19% (11) 17.8 216
Qualified XVI 10.209 12.048 18.01% (7) 2,770.5 33,378
Qualified XXI 11.240 12.110 7.74% (12) 2,843.4 34,432
- ----------------------------------------------------------------------------------------------------------------------------
Value Fund:
Qualified V 10.069 11.493 14.14% (10) 0.7 8
Qualified VI 9.747 11.506 18.05% (5) 405,286.4 4,663,125
Qualified X (1.15) 10.171 11.514 13.20% (8) 661.7 7,618
Qualified X (1.25) 9.746 11.506 18.06% (5) 49,173.1 565,774
Qualified XII (0.40) 10.177 11.574 13.73% (7) 1,915.7 22,172
Qualified XII (0.45) 9.753 11.570 18.63% (9) 8,954.0 103,595
Qualified XII (0.55) 10.242 11.562 12.89% (11) 202.9 2,345
Qualified XII (0.65) 10.194 11.554 13.34% (10) 733.3 8,472
Qualified XII (0.70) 9.661 11.550 19.55% (9) 79.6 919
Qualified XII (0.75) 9.815 11.546 17.64% (5) 1,010.9 11,672
Qualified XII (0.80) 9.762 11.542 18.23% (5) 166,175.9 1,917,951
Qualified XII (0.85) 10.458 11.538 10.33% (7) 10,688.2 123,317
Qualified XII (0.90) 10.450 11.534 10.37% (7) 616.5 7,111
Qualified XII (0.95) 9.827 11.530 17.33% (6) 14,637.9 168,771
Qualified XII (1.00) 9.747 11.526 18.25% (5) 43,171.5 497,582
Qualified XII (1.05) 10.384 11.522 10.96% (7) 3,085.2 35,547
Qualified XII (1.10) 10.159 11.518 13.38% (7) 500.1 5,760
Qualified XII (1.15) 9.747 11.514 18.13% (5) 115.4 1,329
Qualified XII (1.20) 9.848 11.510 16.88% (9) 156.0 1,795
Qualified XII (1.50) 10.442 11.502 10.15% (11) 66.9 769
Qualified XII (1.30) 10.847 11.494 5.96% (11) 9.9 113
Qualified XII (1.40) 10.003 11.486 14.83% (8) 506.8 5,822
Qualified XIII 9.915 11.495 15.94% (6) 181.1 2,082
Qualified XV 9.845 11.495 16.76% (8) 674.4 7,752
Qualified XVI 9.842 11.486 16.70% (6) 2,077.1 23,858
Qualified XVII 9.778 11.511 17.72% (5) 27,063.0 311,517
Qualified XVIII 10.017 11.511 14.91% (8) 3,587.3 41,293
- ----------------------------------------------------------------------------------------------------------------------------
Calvert Social Balanced Portfolio:
Qualified III 27.186 30.131 10.83% 880,318.8 26,524,926
Qualified V 20.904 23.131 10.65% 1,743.6 40,331
Qualified VI 20.485 22.705 10.84% 1,118,008.2 25,384,126
Qualified VIII 18.609 20.623 10.82% 7,545.8 155,618
Qualified X (1.25) 10.500 11.637 10.83% 29,860.0 347,482
Qualified XI 20.668 22.998 11.27% 68,702.6 1,580,009
Qualified XII (0.40) 14.976 16.740 11.78% 40,497.9 677,943
</TABLE>
S-21
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
Value
Per Unit
--------
Beginning End of
of Year Year
- ------------------------------------------------------------------------
<S> <C> <C>
Calvert Social Balanced Portfolio (continued):
Qualified XII (0.45) $10.714 $11.970
Qualified XII (0.50) 10.966 12.245
Qualified XII (0.55) 11.207 11.951
Qualified XII (0.65) 11.067 11.932
Qualified XII (0.70) 11.025 11.922
Qualified XII (0.75) 10.694 11.912
Qualified XII (0.80) 11.254 12.530
Qualified XII (0.85) 15.005 16.697
Qualified XII (0.90) 11.320 12.414
Qualified XII (0.95) 14.965 16.636
Qualified XII (1.00) 14.945 16.606
Qualified XII (1.05) 14.926 16.576
Qualified XII (1.10) 14.906 16.546
Qualified XII (1.15) 14.886 16.515
Qualified XII (1.20) 14.867 16.485
Qualified XII (1.25) 14.847 16.455
Qualified XII (1.30) 14.827 16.426
Qualified XII (1.40) 14.950 16.366
Qualified XII (1.50) 14.749 16.306
Qualified XIII 20.646 22.951
Qualified XV 20.612 22.913
Qualified XVI 20.397 22.550
Qualified XVII 20.485 22.705
Qualified XVIII 10.500 11.637
Qualified XXI 21.036 22.935
Qualified XXII 21.071 22.973
- ------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio:
Qualified III 18.285 19.201
Qualified V 17.305 18.143
Qualified VI 17.459 18.334
Qualified VIII 17.395 18.265
Qualified X (1.15) 21.948 23.071
Qualified X (1.25) 21.848 22.942
Qualified XI 17.615 18.570
Qualified XII (0.40) 15.192 16.089
Qualified XII (0.45) 9.968 10.552
Qualified XII (0.50) 10.363 10.964
Qualified XII (0.55) 10.462 10.535
Qualified XII (0.65) 10.691 10.518
Qualified XII (0.70) 11.230 10.509
Qualified XII (0.75) 9.950 10.501
Qualified XII (0.80) 10.850 11.445
Qualified XII (0.85) 15.220 16.047
Qualified XII (0.90) 10.671 11.245
Qualified XII (0.95) 15.180 15.989
Qualified XII (1.00) 15.160 15.960
Qualified XII (1.05) 15.140 15.931
Qualified XII (1.10) 15.120 15.902
Qualified XII (1.15) 15.100 15.873
Qualified XII (1.20) 15.080 15.844
Qualified XII (1.25) 15.061 15.815
Qualified XII (1.30) 15.041 15.786
Qualified XII (1.40) 15.001 15.729
Qualified XII (1.50) 14.961 15.672
Qualified XIII 17.596 18.533
Qualified XV 17.567 18.502
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Increase (Decrease) Units
in Value of Outstanding Reserves
Accumulation at End at End
Unit of Year of Year
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Calvert Social Balanced Portfolio (continued):
Qualified XII (0.45) 11.72% 26,121.4 $ 312,675
Qualified XII (0.50) 11.66% 54,140.9 662,972
Qualified XII (0.55) 6.64% (11) 13,438.2 160,597
Qualified XII (0.65) 7.82% (10) 3,321.9 39,636
Qualified XII (0.70) 8.14% (5) 3,735.6 44,535
Qualified XII (0.75) 11.39% 9,601.8 114,379
Qualified XII (0.80) 11.34% 73,942.9 926,469
Qualified XII (0.85) 11.28% 200,067.8 3,340,502
Qualified XII (0.90) 9.66% (8) 3,588.7 44,549
Qualified XII (0.95) 11.17% 117,901.6 1,961,427
Qualified XII (1.00) 11.11% 178,990.3 2,972,296
Qualified XII (1.05) 11.05% 8,581.1 142,238
Qualified XII (1.10) 11.00% 10,085.2 166,866
Qualified XII (1.15) 10.94% 53,769.7 888,032
Qualified XII (1.20) 10.88% 6,432.6 106,044
Qualified XII (1.25) 10.83% 270.0 4,443
Qualified XII (1.30) 10.78% 43.8 719
Qualified XII (1.40) 9.47% (2) 507.9 8,312
Qualified XII (1.50) 10.56% 3,025.6 49,337
Qualified XIII 11.16% 16,438.0 377,276
Qualified XV 11.16% 6,810.6 156,054
Qualified XVI 10.56% 27,661.0 623,765
Qualified XVII 10.84% 1,312.3 29,796
Qualified XVIII 10.83% 9,410.8 109,514
Qualified XXI 9.03% (5) 2,376.2 54,497
Qualified XXII 9.03% (5) 3,697.4 84,940
- ----------------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio:
Qualified III 5.01% 2,271,493.5 43,615,144
Qualified V 4.84% 696.2 12,631
Qualified VI 5.01% 5,366,552.8 98,388,525
Qualified VIII 5.00% 4,753.3 86,821
Qualified X (1.15) 5.12% 94,758.7 2,186,163
Qualified X (1.25) 5.01% 1,171,916.0 26,886,274
Qualified XI 5.42% 221,999.6 4,122,595
Qualified XII (0.40) 5.90% 114,724.9 1,845,765
Qualified XII (0.45) 5.86% 110,939.0 1,170,616
Qualified XII (0.50) 5.80% 15,333.0 168,111
Qualified XII (0.55) 0.70% (11) 65,153.9 686,387
Qualified XII (0.65) (1.62%) (4) 123,331.6 1,297,187
Qualified XII (0.70) (6.42%) (5) 8,104.0 85,168
Qualified XII (0.75) 5.54% 73,216.2 768,837
Qualified XII (0.80) 5.48% 833,428.1 9,538,585
Qualified XII (0.85) 5.43% 303,703.7 4,873,512
Qualified XII (0.90) 5.38% 6,809.4 76,571
Qualified XII (0.95) 5.33% 188,393.5 3,012,143
Qualified XII (1.00) 5.28% 363,065.9 5,794,363
Qualified XII (1.05) 5.22% 62,832.4 1,000,951
Qualified XII (1.10) 5.17% 39,293.5 624,827
Qualified XII (1.15) 5.12% 77,293.8 1,226,854
Qualified XII (1.20) 5.07% 21,440.3 339,694
Qualified XII (1.25) 5.01% 11,532.6 182,388
Qualified XII (1.30) 4.95% 4,118.0 65,008
Qualified XII (1.40) 4.85% 1,188.6 18,696
Qualified XII (1.50) 4.75% 11,234.6 176,064
Qualified XIII 5.33% 30,245.2 560,530
Qualified XV 5.32% 14,978.8 277,139
</TABLE>
S-22
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units
-------- in Value of Outstanding Reserves
Beginning End of Accumulation at End at End
of Year Year Unit of Year of Year
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Equity-Income Portfolio (continued):
Qualified XVI $17.384 $18.209 4.75% 145,786.4 $ 2,654,614
Qualified XVII 17.459 18.334 5.01% 31,846.3 583,859
Qualified XVIII 21.848 22.942 5.01% 19,877.9 456,041
Qualified XXI 19.392 18.519 (4.50%) (5) 25,382.2 470,058
Qualified XXII 19.424 18.550 (4.50%) (5) 37,177.4 689,641
- -------------------------------------------------------------------------------------------------------------------------------
Growth Portfolio:
Qualified I 18.115 24.603 35.82% 2,653.5 65,283
Qualified III 19.406 26.340 35.73% 77.8 2,048
Qualified V 19.285 26.134 35.51% 1,744.6 45,594
Qualified VI 19.155 25.999 35.73% 9,652,435.9 250,951,352
Qualified VIII 19.385 26.310 35.72% 6,647.6 174,898
Qualified X (1.15) 26.764 36.363 35.87% 90,675.2 3,297,257
Qualified X (1.25) 26.641 36.160 35.73% 1,477,316.1 53,419,605
Qualified XI 19.326 26.334 36.26% 476,085.8 12,537,324
Qualified XII (0.40) 17.525 23.989 36.88% 325,063.2 7,798,002
Qualified XII (0.45) 13.493 16.655 23.43% (9) 65,561.2 1,091,891
Qualified XII (0.50) 12.779 17.475 36.75% 49,321.0 861,906
Qualified XII (0.55) 14.192 16.628 17.16% (11) 129,222.6 2,148,677
Qualified XII (0.65) 13.816 16.601 20.16% (4) 309,123.5 5,131,739
Qualified XII (0.70) 13.474 16.588 23.11% (5) 37,939.7 629,327
Qualified XII (0.75) 12.150 16.574 36.41% 110,673.3 1,834,323
Qualified XII (0.80) 13.307 18.143 36.34% 1,602,405.7 29,073,018
Qualified XII (0.85) 17.558 23.927 36.27% 520,647.2 12,457,602
Qualified XII (0.90) 12.978 17.677 36.21% 9,392.8 166,039
Qualified XII (0.95) 17.512 23.840 36.14% 345,699.0 8,241,537
Qualified XII (1.00) 17.489 23.797 36.07% 1,055,741.9 25,123,389
Qualified XII (1.05) 17.466 23.754 36.00% 96,711.6 2,297,248
Qualified XII (1.10) 17.443 23.710 35.93% 59,683.5 1,415,122
Qualified XII (1.15) 17.420 23.667 35.86% 107,839.2 2,552,264
Qualified XII (1.20) 17.397 23.624 35.79% 55,526.7 1,311,781
Qualified XII (1.25) 17.374 23.581 35.73% 23,471.7 553,495
Qualified XII (1.30) 17.351 23.538 35.66% 7,250.6 170,667
Qualified XII (1.40) 17.305 23.453 35.53% 6,553.5 153,700
Qualified XII (1.50) 17.259 23.368 35.40% 30,213.3 706,018
Qualified XIII 19.305 26.281 36.14% 77,944.8 2,048,479
Qualified XV 19.273 26.237 36.13% 43,825.8 1,149,877
Qualified XVI 19.072 25.822 35.39% 200,009.1 5,164,642
Qualified XVII 19.155 25.999 35.73% 60,970.0 1,585,144
Qualified XVIII 26.641 36.160 35.73% 57,973.8 2,096,327
Qualified XXI 21.072 26.262 24.63% (5) 82,068.8 2,155,269
Qualified XXII 21.107 26.305 24.63% (5) 73,156.4 1,924,411
- -------------------------------------------------------------------------------------------------------------------------------
High Income Portfolio:
Qualified III 9.023 9.638 6.82% 194,440.2 1,873,989
- -------------------------------------------------------------------------------------------------------------------------------
Overseas Portfolio:
Qualified V 13.587 19.108 40.63% 32.3 618
Qualified VI 13.662 19.243 40.85% 676,303.2 13,014,360
Qualified VIII 13.658 19.237 40.85% 353.5 6,801
Qualified X (1.15) 14.140 19.936 40.99% 8,088.7 161,259
Qualified X (1.25) 14.074 19.825 40.86% 164,209.0 3,255,428
Qualified XI 13.784 19.492 41.41% 24,274.1 473,141
Qualified XII (0.40) 13.170 18.709 42.06% 30,213.1 565,255
Qualified XII (0.45) 10.647 13.410 25.95% (9) 8,158.2 109,404
Qualified XII (0.50) 10.183 14.451 41.91% 636.2 9,194
Qualified XII (0.55) 11.159 13.389 19.98% (11) 8,970.5 120,104
Qualified XII (0.65) 10.023 13.367 33.36% (4) 15,589.0 208,382
Qualified XII (0.70) 10.077 13.356 32.54% (5) 396.1 5,291
Qualified XII (0.75) 9.427 13.346 41.57% 6,008.6 80,189
</TABLE>
S-23
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units
-------- in Value of Outstanding Reserves
Beginning End of Accumulation at End at End
of Year Year Unit of Year of Year
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Overseas Portfolio (continued):
Qualified XII (0.80) $10.530 $14.900 41.50% 53,816.9 $ 801,849
Qualified XII (0.85) 13.195 18.661 41.42% 20,580.3 384,042
Qualified XII (0.90) 13.705 14.905 8.76% (12) 2,473.7 36,870
Qualified XII (0.95) 13.160 18.593 41.28% 10,722.9 199,368
Qualified XII (1.00) 13.143 18.559 41.21% 52,999.7 983,621
Qualified XII (1.05) 13.126 18.525 41.13% 7,697.7 142,602
Qualified XII (1.10) 13.108 18.492 41.07% 9,932.8 183,673
Qualified XII (1.15) 13.091 18.458 41.00% 10,800.7 199,359
Qualified XII (1.20) 13.074 18.424 40.92% 2,471.1 45,529
Qualified XII (1.25) 13.056 18.391 40.86% 6,717.6 123,543
Qualified XII (1.30) 13.039 18.357 40.79% 469.0 8,610
Qualified XII (1.40) 13.005 18.291 40.65% 156.2 2,857
Qualified XII (1.50) 12.971 18.224 40.50% 955.5 17,413
Qualified XIII 13.769 19.452 41.27% 7,531.1 146,498
Qualified XV 13.746 19.420 41.28% 3,845.1 74,672
Qualified XVI 13.603 19.112 40.50% 12,105.1 231,359
Qualified XVII 13.662 19.243 40.85% 1,455.6 28,011
Qualified XVIII 14.074 19.825 40.86% 2,622.2 51,984
Qualified XXI 14.422 19.438 34.78% (5) 7,321.2 142,309
Qualified XXII 14.446 19.470 34.78% (5) 11,297.7 219,970
- --------------------------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio:
Qualified III 16.719 18.343 9.71% 1,511,789.2 27,730,745
- --------------------------------------------------------------------------------------------------------------------------
Contrafund Portfolio:
Qualified III 22.177 27.214 22.71% 3,780,286.9 102,875,596
Qualified V 19.627 24.046 22.51% 1,845.8 44,384
Qualified VI 19.601 24.053 22.71% 9,498,614.4 228,467,569
Qualified VIII 19.729 24.208 22.70% 3,710.6 89,828
Qualified X (1.15) 22.103 27.150 22.83% 21,611.4 586,742
Qualified X (1.25) 22.023 27.024 22.71% 888,915.1 24,022,425
Qualified XI 19.776 24.363 23.19% 222,596.4 5,423,123
Qualified XII (0.40) 17.813 22.045 23.76% 239,028.1 5,269,342
Qualified XII (0.45) 11.475 14.194 23.69% 268,569.5 3,812,080
Qualified XII (0.50) 11.985 14.817 23.63% 22,845.8 338,510
Qualified XII (0.55) 12.452 14.171 13.81% (11) 119,840.6 1,698,279
Qualified XII (0.65) 12.698 14.148 11.42% (4) 276,640.9 3,914,000
Qualified XII (0.70) 12.471 14.137 13.36% (5) 19,119.6 270,293
Qualified XII (0.75) 11.454 14.126 23.33% 96,687.0 1,365,756
Qualified XII (0.80) 12.589 15.518 23.27% 1,895,669.7 29,416,282
Qualified XII (0.85) 17.847 21.988 23.20% 303,913.8 6,682,417
Qualified XII (0.90) 12.293 15.138 23.14% 25,518.5 386,292
Qualified XII (0.95) 17.800 21.908 23.08% 357,609.8 7,834,494
Qualified XII (1.00) 17.776 21.868 23.02% 1,508,806.9 32,994,816
Qualified XII (1.05) 17.753 21.828 22.95% 82,954.6 1,810,762
Qualified XII (1.10) 17.729 21.789 22.90% 45,202.7 984,910
Qualified XII (1.15) 17.706 21.749 22.83% 112,280.7 2,442,001
Qualified XII (1.20) 17.683 21.710 22.77% 29,985.7 650,976
Qualified XII (1.25) 17.659 21.670 22.71% 13,062.1 283,057
Qualified XII (1.30) 17.636 21.631 22.65% 12,866.9 278,320
Qualified XII (1.40) 17.590 21.552 22.52% 3,061.9 65,990
Qualified XII (1.50) 17.543 21.474 22.41% 14,452.2 310,342
Qualified XIII 19.755 24.314 23.08% 79,041.7 1,921,820
Qualified XV 19.722 24.274 23.08% 37,379.6 907,338
Qualified XVI 19.516 23.889 22.41% 170,565.1 4,074,657
Qualified XVII 19.601 24.053 22.71% 35,985.2 865,543
Qualified XVIII 22.023 27.024 22.71% 19,561.4 528,636
Qualified XXI 21.258 24.296 14.29% (5) 82,919.6 2,014,620
</TABLE>
S-24
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units
-------- in Value of Outstanding Reserves
Beginning End of Accumulation at End at End
of Year Year Unit of Year of Year
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Contrafund Portfolio: (continued):
Qualified XXII $21.293 $24.336 14.29% (5) 111,857.0 $ 2,722,205
- -----------------------------------------------------------------------------------------------------------------------------
Index 500 Portfolio:
Qualified III 23.650 28.147 19.01% 4,354,722.7 122,573,178
- -----------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series:
Aggressive Growth Portfolio:
Qualified I 17.901 32.516 81.64% (4) 2,923.0 95,042
Qualified III 24.098 53.644 122.61% 3,274,450.0 175,655,970
Qualified V 20.810 46.252 122.26% 3,751.7 173,525
Qualified VI 20.951 46.640 122.61% 12,224,096.0 570,136,151
Qualified VIII 20.945 46.621 122.59% 8,113.3 378,254
Qualified X (1.15) 20.300 45.235 122.83% 57,149.5 2,585,169
Qualified X (1.25) 20.226 45.025 122.61% 1,118,452.8 50,358,073
Qualified XI 21.139 47.242 123.48% 582,335.3 27,510,669
Qualified XII (0.40) 14.125 31.711 124.50% 405,725.2 12,865,991
Qualified XII (0.45) 17.095 27.222 59.24% (9) 153,108.7 4,167,965
Qualified XII (0.50) 12.541 28.128 124.29% 200,050.7 5,627,045
Qualified XII (0.55) 19.683 27.178 38.08% (11) 112,797.8 3,065,669
Qualified XII (0.65) 15.589 27.135 74.07% (4) 216,672.5 5,879,346
Qualified XII (0.70) 15.319 27.113 76.99% (5) 49,337.1 1,337,673
Qualified XII (0.75) 12.109 27.091 123.73% 181,270.9 4,910,822
Qualified XII (0.80) 13.056 29.195 123.61% 2,728,718.1 79,665,963
Qualified XII (0.85) 14.152 31.629 123.49% 608,435.3 19,244,434
Qualified XII (0.90) 12.830 28.662 123.40% 17,144.7 491,400
Qualified XII (0.95) 14.114 31.514 123.28% 638,670.0 20,127,352
Qualified XII (1.00) 14.096 31.457 123.16% 1,788,826.0 56,271,451
Qualified XII (1.05) 14.077 31.400 123.06% 157,087.7 4,932,554
Qualified XII (1.10) 14.059 31.343 122.94% 64,071.0 2,008,178
Qualified XII (1.15) 14.040 31.286 122.83% 150,086.8 4,695,612
Qualified XII (1.20) 14.022 31.229 122.71% 67,582.7 2,110,545
Qualified XII (1.25) 14.003 31.172 122.61% 17,486.4 545,093
Qualified XII (1.30) 13.985 31.116 122.50% 9,014.2 280,481
Qualified XII (1.40) 13.948 31.003 122.28% 2,357.0 73,073
Qualified XII (1.50) 13.911 30.890 122.05% 19,942.0 616,008
Qualified XIII 21.116 47.147 123.28% 98,303.6 4,634,714
Qualified XV 21.081 47.068 123.27% 79,375.6 3,736,084
Qualified XVI 20.861 46.323 122.06% 175,441.5 8,127,054
Qualified XVII 20.951 46.640 122.61% 63,768.6 2,974,190
Qualified XVIII 20.226 45.025 122.61% 41,961.6 1,889,313
Qualified XXI 27.003 47.112 74.47% (5) 214,522.9 10,106,578
Qualified XXII 27.048 47.190 74.47% (5) 130,373.7 6,152,396
- -----------------------------------------------------------------------------------------------------------------------------
Balanced Portfolio:
Qualified III 19.914 24.929 25.18% 476.1 11,868
Qualified V 19.800 24.747 24.98% 736.6 18,229
Qualified VI 19.908 24.922 25.19% 5,686,065.5 141,706,964
Qualified VIII 19.903 24.913 25.17% 3,566.1 88,842
Qualified X (1.15) 20.731 25.978 25.31% 73,950.4 1,921,057
Qualified X (1.25) 20.657 25.859 25.18% 760,023.7 19,653,789
Qualified XI 20.086 25.243 25.67% 248,075.6 6,262,255
Qualified XII (0.40) 17.878 22.571 26.25% 103,516.9 2,336,519
Qualified XII (0.45) 11.816 14.910 26.18% 224,105.2 3,341,389
Qualified XII (0.50) 12.415 15.658 26.12% 70,955.7 1,111,023
Qualified XII (0.55) 13.489 14.886 10.36% (11) 104,836.8 1,560,589
Qualified XII (0.65) 13.502 14.862 10.07% (4) 251,840.1 3,742,825
Qualified XII (0.70) 13.144 14.850 12.98% (5) 7,041.4 104,565
Qualified XII (0.75) 11.794 14.838 25.81% 69,363.3 1,029,209
Qualified XII (0.80) 12.741 16.022 25.75% 815,864.4 13,071,690
Qualified XII (0.85) 17.912 22.513 25.69% 141,750.2 3,191,220
</TABLE>
S-25
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units
-------- in Value of Outstanding Reserves
Beginning End of Accumulation at End at End
of Year Year Unit of Year of Year
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balanced Portfolio (continued):
Qualified XII (0.90) $12.490 $15.690 25.62% 5,703.4 $ 89,486
Qualified XII (0.95) 17.865 22.431 25.56% 232,278.8 5,210,286
Qualified XII (1.00) 17.841 22.390 25.50% 695,262.6 15,567,199
Qualified XII (1.05) 17.818 22.350 25.43% 78,371.6 1,751,579
Qualified XII (1.10) 17.794 22.309 25.37% 28,645.9 639,063
Qualified XII (1.15) 17.771 22.269 25.31% 71,007.4 1,581,229
Qualified XII (1.20) 17.747 22.228 25.25% 22,043.8 489,988
Qualified XII (1.25) 17.724 22.188 25.19% 7,932.4 176,001
Qualified XII (1.30) 17.701 22.147 25.12% 2,768.5 61,314
Qualified XII (1.40) 17.654 22.067 25.00% 1,224.1 27,013
Qualified XII (1.50) 17.607 21.987 24.88% 31,263.2 687,372
Qualified XIII 20.064 25.192 25.56% 54,960.2 1,384,582
Qualified XV 20.031 25.151 25.56% 32,084.5 806,945
Qualified XVI 19.822 24.752 24.87% 84,774.3 2,098,363
Qualified XVII 19.908 24.922 25.19% 43,804.8 1,091,694
Qualified XVIII 20.657 25.859 25.18% 58,477.1 1,512,186
Qualified XXI 22.140 25.174 13.70% (5) 80,071.3 2,015,707
Qualified XXII 22.177 25.216 13.70% (5) 42,379.6 1,068,634
- --------------------------------------------------------------------------------------------------------------------------
Flexible Income Portfolio:
Qualified III 15.548 15.601 0.34% 6,629.1 103,422
Qualified V 15.383 15.411 0.18% 72.6 1,119
Qualified VI 15.487 15.540 0.34% 1,078,342.0 16,757,704
Qualified VIII 15.482 15.534 0.34% 315.8 4,905
Qualified X (1.25) 10.419 10.455 0.35% 58,739.2 614,092
Qualified XI 15.626 15.741 0.74% 53,087.6 835,644
Qualified XII (0.40) 13.053 13.210 1.20% 20,171.3 266,453
Qualified XII (0.45) 10.446 10.566 1.15% 42,020.8 443,990
Qualified XII (0.50) 10.640 10.757 1.10% 24,750.6 266,251
Qualified XII (0.55) 10.380 10.549 1.63% (11) 27,998.1 295,351
Qualified XII (0.65) 10.622 10.532 (0.85%) (4) 88,619.6 933,335
Qualified XII (0.70) 10.473 10.523 0.48% (5) 2,087.9 21,972
Qualified XII (0.75) 10.427 10.515 0.84% 6,854.8 72,078
Qualified XII (0.80) 10.643 10.727 0.79% 300,761.2 3,226,299
Qualified XII (0.85) 13.078 13.175 0.74% 35,683.2 470,136
Qualified XII (0.90) 10.638 10.712 0.70% 5,764.2 61,744
Qualified XII (0.95) 13.043 13.127 0.64% 69,212.2 908,574
Qualified XII (1.00) 13.026 13.104 0.60% 460,612.0 6,035,640
Qualified XII (1.05) 13.009 13.080 0.55% 25,082.7 328,073
Qualified XII (1.10) 12.992 13.056 0.49% 7,040.3 91,917
Qualified XII (1.15) 12.975 13.032 0.44% 15,890.0 207,081
Qualified XII (1.20) 12.958 13.008 0.39% 6,648.3 86,484
Qualified XII (1.25) 12.940 12.985 0.35% 1,753.5 22,768
Qualified XII (1.30) 12.923 12.961 0.29% 4,549.2 58,962
Qualified XII (1.40) 12.889 12.914 0.19% 168.5 2,176
Qualified XII (1.50) 12.855 12.867 0.09% 668.9 8,607
Qualified XIII 15.609 15.709 0.64% 5,619.8 88,282
Qualified XV 15.583 15.683 0.64% 6,315.9 99,052
Qualified XVI 15.420 15.434 0.09% 13,513.5 208,573
Qualified XVII 15.487 15.540 0.34% 6,227.3 96,773
Qualified XXI 15.603 15.698 0.61% (5) 9,552.3 149,948
Qualified XXII 15.629 15.724 0.61% (5) 8,959.3 140,872
- --------------------------------------------------------------------------------------------------------------------------
Growth Portfolio:
Qualified III 22.529 32.036 42.20% 2,721,884.9 87,197,725
Qualified V 20.556 29.183 41.97% 1,417.8 41,376
Qualified VI 20.651 29.366 42.20% 5,434,097.8 159,575,131
Qualified VIII 20.663 29.380 42.19% 2,469.1 72,543
Qualified X (1.15) 22.165 31.550 42.34% 44,364.2 1,399,706
</TABLE>
S-26
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units
-------- in Value of Outstanding Reserves
Beginning End of Accumulation at End at End
of Year Year Unit of Year of Year
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Growth Portfolio (continued):
Qualified X (1.25) $22.086 $31.406 42.20% 773,102.5 $ 24,280,266
Qualified XI 20.836 29.744 42.75% 260,307.0 7,742,653
Qualified XII (0.40) 17.807 25.537 43.41% 156,804.6 4,004,271
Qualified XII (0.45) 11.979 16.753 39.85% (1) 233,330.2 3,909,059
Qualified XII (0.50) 12.391 17.752 43.27% 36,959.2 656,108
Qualified XII (0.55) 14.336 16.726 16.67% (11) 74,826.7 1,251,580
Qualified XII (0.65) 14.246 16.699 17.22% (10) 29,858.5 498,619
Qualified XII (0.70) 13.194 16.686 26.47% (5) 26,860.0 448,185
Qualified XII (0.75) 11.666 16.673 42.92% 73,998.2 1,233,737
Qualified XII (0.80) 12.836 18.335 42.84% 1,206,254.8 22,116,909
Qualified XII (0.85) 17.841 25.471 42.77% 538,137.7 13,706,789
Qualified XII (0.90) 12.464 17.786 42.70% 11,347.9 201,835
Qualified XII (0.95) 17.794 25.378 42.62% 187,296.1 4,753,232
Qualified XII (1.00) 17.770 25.332 42.55% 535,269.4 13,559,498
Qualified XII (1.05) 17.747 25.286 42.48% 49,882.8 1,261,338
Qualified XII (1.10) 17.723 25.240 42.41% 25,768.2 650,392
Qualified XII (1.15) 17.700 25.194 42.34% 56,210.8 1,416,188
Qualified XII (1.20) 17.677 25.148 42.26% 32,112.6 807,581
Qualified XII (1.25) 17.653 25.103 42.20% 9,889.5 248,254
Qualified XII (1.30) 17.630 25.057 42.13% 4,721.6 118,309
Qualified XII (1.40) 17.584 24.966 41.98% 3,142.8 78,464
Qualified XII (1.50) 17.537 24.875 41.84% 10,930.5 271,900
Qualified XIII 20.813 29.684 42.62% 52,381.4 1,554,913
Qualified XV 20.778 29.635 42.63% 38,375.8 1,137,271
Qualified XVI 20.562 29.166 41.84% 96,293.5 2,808,486
Qualified XVII 20.651 29.366 42.20% 28,973.6 850,824
Qualified XVIII 22.086 31.406 42.20% 52,432.8 1,646,718
Qualified XXI 23.156 29.662 28.10% (5) 63,405.5 1,880,766
Qualified XXII 23.195 29.712 28.10% (5) 45,183.8 1,342,494
Annuity contracts in payment period 689,393
- -------------------------------------------------------------------------------------------------------------------------------
Worldwide Growth Portfolio:
Qualified I 19.333 29.020 50.11% (5) 2,110.6 61,251
Qualified III 23.797 38.648 62.41% 5,548,673.8 214,445,606
Qualified V 21.334 34.593 62.15% 3,432.5 118,738
Qualified VI 21.288 34.574 62.41% 15,478,181.3 535,143,072
Qualified VIII 21.223 34.465 62.39% 8,372.5 288,561
Qualified X (1.15) 23.996 39.011 62.57% 58,657.5 2,288,271
Qualified X (1.25) 23.910 38.832 62.41% 1,490,250.0 57,868,699
Qualified XI 21.478 35.020 63.05% 771,009.1 27,000,589
Qualified XII (0.40) 17.582 28.797 63.79% 531,184.1 15,296,712
Qualified XII (0.45) 10.235 16.757 63.72% 466,807.5 7,822,094
Qualified XII (0.50) 11.485 18.792 63.62% 68,055.0 1,278,915
Qualified XII (0.55) 12.638 16.730 32.38% (11) 177,086.4 2,962,581
Qualified XII (0.65) 11.492 16.703 45.34% (4) 237,115.7 3,960,462
Qualified XII (0.70) 11.151 16.689 49.66% (5) 31,925.2 532,806
Qualified XII (0.75) 10.217 16.676 63.22% 211,806.8 3,532,039
Qualified XII (0.80) 12.009 19.592 63.14% 4,837,241.4 94,768,911
Qualified XII (0.85) 17.615 28.723 63.06% 864,935.8 24,843,664
Qualified XII (0.90) 11.745 19.141 62.97% 26,946.9 515,796
Qualified XII (0.95) 17.569 28.619 62.89% 643,913.5 18,428,009
Qualified XII (1.00) 17.545 28.567 62.82% 2,675,140.6 76,420,285
Qualified XII (1.05) 17.522 28.515 62.74% 199,509.8 5,688,999
Qualified XII (1.10) 17.499 28.463 62.66% 65,151.2 1,854,408
Qualified XII (1.15) 17.476 28.411 62.57% 163,390.0 4,642,134
Qualified XII (1.20) 17.453 28.360 62.49% 50,750.3 1,439,265
Qualified XII (1.25) 17.430 28.308 62.41% 19,060.1 539,558
Qualified XII (1.30) 17.407 28.257 62.33% 14,290.6 403,807
</TABLE>
S-27
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units
-------- in Value of Outstanding Reserves
Beginning End of Accumulation at End at End
of Year Year Unit of Year of Year
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Worldwide Growth Portfolio (continued):
Qualified XII (1.40) $17.361 $28.154 62.17% 2,147.7 $ 60,466
Qualified XII (1.50) 17.315 28.052 62.01% 34,243.8 960,605
Qualified XIII 21.455 34.949 62.89% 109,644.4 3,831,997
Qualified XV 21.419 34.891 62.90% 81,241.3 2,834,612
Qualified XVI 21.196 34.339 62.01% 215,248.0 7,391,423
Qualified XVII 21.288 34.574 62.41% 84,795.7 2,931,728
Qualified XVIII 23.910 38.832 62.41% 77,803.3 3,021,223
Qualified XXI 23.168 34.923 50.74% (5) 216,743.3 7,569,432
Qualified XXII 23.206 34.982 50.75% (5) 158,965.3 5,560,856
Annuity contracts in payment period 752,858
- -------------------------------------------------------------------------------------------------------------------------------
Lexington Emerging Markets Fund:
Qualified III 5.470 12.315 125.14% 940,817.1 11,586,115
- -------------------------------------------------------------------------------------------------------------------------------
Lexington Natural Resources Trust Fund:
Qualified III 11.433 12.882 12.67% 437,491.3 5,635,952
Qualified V 12.670 14.253 12.49% 2,485.0 35,419
Qualified VI 12.336 13.900 12.68% 489,112.5 6,798,533
Qualified VIII 10.693 12.047 12.66% 839.6 10,115
Qualified XI 12.446 14.079 13.12% 26,550.1 373,805
Qualified XII (0.40) 9.626 10.939 13.64% 8,855.9 96,874
Qualified XII (0.45) 8.644 8.758 1.32% (11) 4,240.5 37,137
Qualified XII (0.55) 8.255 8.744 5.92% (11) 4,256.5 37,217
Qualified XII (0.65) 8.125 8.729 7.43% (10) 2,246.3 19,609
Qualified XII (0.70) 9.037 8.722 (3.49%) (5) 2,018.1 17,602
Qualified XII (0.75) 7.696 8.715 13.24% 10,959.9 95,520
Qualified XII (0.80) 8.415 9.524 13.18% 92,365.4 879,684
Qualified XII (0.85) 9.645 10.911 13.13% 28,938.8 315,743
Qualified XII (0.95) 9.619 10.871 13.02% 51,656.2 561,554
Qualified XII (1.00) 9.606 10.851 12.96% 87,037.7 944,466
Qualified XII (1.05) 9.594 10.831 12.89% 3,378.1 36,590
Qualified XII (1.10) 9.581 10.812 12.85% 1,354.1 14,640
Qualified XII (1.15) 9.568 10.792 12.79% 8,710.7 94,006
Qualified XII (1.20) 9.556 10.772 12.72% 2,436.7 26,249
Qualified XII (1.25) 9.543 10.753 12.68% 70.6 759
Qualified XII (1.50) 9.480 10.655 12.39% 146.7 1,563
Qualified XIII 12.433 14.051 13.01% 5,185.8 72,865
Qualified XV 12.412 14.028 13.02% 9,115.8 127,872
Qualified XVI 12.283 13.805 12.39% 10,231.1 141,241
Qualified XVII 12.336 13.900 12.68% 900.1 12,511
Qualified XXI 14.452 14.041 (2.84%) (5) 4,390.1 61,640
Qualified XXII 14.476 14.064 (2.85%) (5) 4,216.7 59,303
- -------------------------------------------------------------------------------------------------------------------------------
MFS Funds:
Total Return Series:
Qualified III 10.531 10.720 1.79% 63,821.5 684,196
- -------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Funds:
Global Securities Fund/VA:
Qualified III 10.303 16.126 56.52% 59,571.1 960,641
Qualified V 11.564 15.638 35.23% (7) 21.9 343
Qualified VI 10.018 15.681 56.53% 184,292.1 2,889,837
Qualified X (1.15) 10.923 15.707 43.80% (8) 658.0 10,336
Qualified X (1.25) 10.018 15.681 56.53% 29,386.7 460,806
Qualified XI 10.039 15.775 57.14% 14,290.6 225,435
Qualified XII (0.40) 10.047 15.859 57.85% 5,065.0 80,325
Qualified XII (0.45) 13.162 15.849 20.41% (11) 26.7 423
Qualified XII (0.50) 10.070 15.881 57.71% 785.5 12,474
Qualified XII (0.55) 12.055 15.823 31.26% (11) 370.7 5,866
Qualified XII (0.65) 11.782 15.798 34.09% (10) 136.8 2,161
</TABLE>
S-28
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units
-------- in Value of Outstanding Reserves
Beginning End of Accumulation at End at End
of Year Year Unit of Year of Year
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Global Securities Fund/VA (continued):
Qualified XII (0.70) $14.516 $15.785 8.74% (12) 58.4 $ 922
Qualified XII (0.75) 10.027 15.772 57.30% 2,178.1 34,354
Qualified XII (0.80) 10.050 15.800 57.21% 8,820.1 139,361
Qualified XII (0.85) 10.046 15.787 57.15% 10,761.7 169,895
Qualified XII (0.95) 10.039 15.760 56.99% 543.5 8,566
Qualified XII (1.00) 10.036 15.747 56.91% 20,245.9 318,814
Qualified XII (1.05) 10.032 15.734 56.84% 493.8 7,770
Qualified XII (1.10) 10.029 15.721 56.76% 965.5 15,177
Qualified XII (1.15) 10.025 15.707 56.68% 775.0 12,174
Qualified XII (1.20) 9.897 15.694 58.57% (2) 131.7 2,067
Qualified XII (1.25) 11.614 15.681 35.02% (8) 8.3 130
Qualified XII (1.30) 10.015 15.668 56.45% 31.3 491
Qualified XII (1.40) 10.008 15.641 56.28% 30.7 479
Qualified XIII 10.039 15.760 56.99% 595.1 9,378
Qualified XV 10.039 15.760 56.99% 329.3 5,190
Qualified XVI 10.001 15.615 56.13% 7,932.0 123,856
Qualified XVII 10.018 15.681 56.53% 6,425.3 100,753
Qualified XVIII 11.696 15.681 34.07% (7) 29.0 454
Qualified XXI 10.913 15.775 44.55% (5) 14,640.9 230,960
Qualified XXII 10.913 15.775 44.55% (5) 2,690.3 42,439
- ---------------------------------------------------------------------------------------------------------------------------------
Strategic Bond Fund/VA:
Qualified III 9.935 10.089 1.55% 173,218.8 1,747,553
Qualified V 9.762 10.021 2.65% (3) 64.0 641
Qualified VI 9.895 10.048 1.55% 90,615.5 910,504
Qualified X (1.25) 9.895 10.048 1.55% 20,573.3 206,721
Qualified XI 9.915 10.108 1.95% 1,293.6 13,076
Qualified XII (0.40) 9.923 10.162 2.41% 1,576.1 16,017
Qualified XII (0.45) 9.953 10.188 2.36% 6,623.0 67,477
Qualified XII (0.50) 9.946 10.176 2.31% 4.5 46
Qualified XII (0.55) 9.997 10.172 1.75% (11) 1,233.2 12,544
Qualified XII (0.65) 9.942 10.155 2.14% (10) 63.5 644
Qualified XII (0.75) 9.935 10.139 2.05% 1,052.4 10,670
Qualified XII (0.80) 9.926 10.125 2.00% 4,198.4 42,507
Qualified XII (0.85) 9.922 10.116 1.96% 5,761.4 58,284
Qualified XII (0.95) 9.915 10.099 1.86% 1,105.7 11,167
Qualified XII (1.00) 9.912 10.091 1.81% 12,846.9 129,632
Qualified XII (1.05) 9.908 10.082 1.76% 243.2 2,452
Qualified XII (1.10) 9.905 10.074 1.71% 782.8 7,885
Qualified XII (1.15) 9.902 10.065 1.65% 1,185.6 11,933
Qualified XII (1.20) 9.898 10.057 1.61% 88.7 892
Qualified XII (1.25) 9.869 10.048 1.81% (1) 8.9 89
Qualified XII (1.50) 9.878 10.006 1.30% 68.8 689
Qualified XIII 9.915 10.099 1.86% 596.5 6,024
Qualified XV 9.915 10.099 1.86% 3,113.1 31,440
Qualified XVI 9.878 10.006 1.30% 233.6 2,338
Qualified XVIII 9.895 10.048 1.55% 12,816.0 128,775
Qualified XXI 9.954 10.108 1.55% (5) 3,895.0 39,373
Qualified XXII 9.954 10.108 1.55% (5) 483.4 4,886
Annuity contracts in payment period 27,517
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio Partners, Inc. (PPI):
PPI MFS Emerging Equities Portfolio:
Qualified III 19.268 28.710 49.00% 3,024,975.4 86,846,795
Qualified V 19.041 28.327 48.77% 5,879.2 166,539
Qualified VI 19.114 28.481 49.01% 9,740,293.5 277,415,257
Qualified VIII 20.023 29.833 48.99% 12,353.8 368,553
Qualified X (1.15) 19.216 28.661 49.15% 48,708.9 1,396,043
Qualified X (1.25) 19.114 28.481 49.01% 1,234,594.7 35,162,739
</TABLE>
S-29
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units
-------- in Value of Outstanding Reserves
Beginning End of Accumulation at End at End
of Year Year Unit of Year of Year
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PPI MFS Emerging Equities Portfolio (continued):
Qualified XI $19.285 $28.849 49.59% 587,576.1 $ 16,950,838
Qualified XII (0.40) 12.776 19.199 50.27% 413,846.5 7,945,488
Qualified XII (0.45) 11.002 16.525 50.20% 128,506.7 2,123,601
Qualified XII (0.50) 10.841 16.274 50.12% 181,468.3 2,953,302
Qualified XII (0.55) 12.327 16.499 33.84% (11) 103,358.4 1,705,269
Qualified XII (0.65) 10.880 16.472 51.40% (4) 109,677.9 1,806,619
Qualified XII (0.70) 11.165 16.459 47.42% (5) 32,820.8 540,190
Qualified XII (0.75) 10.982 16.446 49.75% 161,338.1 2,653,286
Qualified XII (0.80) 11.846 17.731 49.68% 2,991,234.9 53,036,901
Qualified XII (0.85) 12.800 19.150 49.61% 822,853.5 15,757,311
Qualified XII (0.90) 11.462 17.139 49.53% 20,775.8 356,082
Qualified XII (0.95) 12.767 19.080 49.45% 684,437.0 13,059,015
Qualified XII (1.00) 12.750 19.045 49.37% 2,526,496.6 48,117,681
Qualified XII (1.05) 12.733 19.011 49.30% 110,359.8 2,098,004
Qualified XII (1.10) 12.716 18.976 49.23% 34,562.6 655,861
Qualified XII (1.15) 12.699 18.942 49.16% 200,163.0 3,791,391
Qualified XII (1.20) 12.683 18.907 49.07% 69,822.2 1,320,130
Qualified XII (1.25) 12.666 18.873 49.01% 26,071.5 492,039
Qualified XII (1.30) 12.649 18.838 48.93% 7,480.3 140,916
Qualified XII (1.40) 12.616 18.770 48.78% 1,614.8 30,310
Qualified XII (1.50) 12.582 18.702 48.64% 7,941.7 148,524
Qualified XIII 19.264 28.791 49.45% 67,371.5 1,939,672
Qualified XV 19.232 28.743 49.45% 73,452.1 2,111,218
Qualified XVI 19.032 28.288 48.63% 133,578.6 3,778,611
Qualified XVII 19.114 28.481 49.01% 14,235.7 405,449
Qualified XVIII 19.114 28.481 49.01% 41,011.6 1,168,060
Qualified XXI 20.019 28.769 43.71% (5) 194,332.5 5,590,819
Qualified XXII 20.053 28.817 43.70% (5) 197,163.5 5,681,718
Annuity contracts in payment period 38,500
- -------------------------------------------------------------------------------------------------------------------------------
PPI MFS Research Growth Portfolio:
Qualified I 10.989 13.469 22.57% 603.1 8,122
Qualified III 14.528 17.796 22.49% 194,295.5 3,457,720
Qualified III 15.891 19.466 22.50% 1,102,793.9 21,466,554
Qualified V 16.593 20.293 22.30% 9,280.3 188,329
Qualified VI 16.758 20.527 22.49% 7,196,328.6 147,721,273
Qualified VII 14.132 17.322 22.57% 71,237.7 1,233,968
Qualified VIII 14.134 17.312 22.48% 13,755.1 238,128
Qualified IX 13.926 17.102 22.81% 1,935.0 33,092
Qualified X (1.15) 16.844 20.653 22.61% 12,984.9 268,183
Qualified X (1.25) 16.758 20.527 22.49% 930,520.8 19,101,090
Qualified XI 16.907 20.792 22.98% 333,629.4 6,936,944
Qualified XII (0.40) 10.641 13.146 23.54% 323,177.5 4,248,345
Qualified XII (0.45) 10.577 13.061 23.48% 50,332.2 657,388
Qualified XII (0.50) 11.127 13.733 23.42% 72,063.8 989,621
Qualified XII (0.55) 11.303 13.040 15.37% (11) 54,853.8 715,290
Qualified XII (0.65) 11.075 13.019 17.55% (4) 89,183.3 1,161,070
Qualified XII (0.70) 11.020 13.008 18.04% (5) 22,795.7 296,537
Qualified XII (0.75) 10.558 12.998 23.11% 52,316.5 680,006
Qualified XII (0.80) 11.682 14.375 23.05% 541,625.4 7,785,678
Qualified XII (0.85) 10.661 13.112 22.99% 681,108.9 8,930,414
Qualified XII (0.90) 11.375 13.982 22.92% 8,900.9 124,453
Qualified XII (0.95) 10.633 13.064 22.86% 259,783.1 3,393,776
Qualified XII (1.00) 10.619 13.040 22.80% 854,700.1 11,145,402
Qualified XII (1.05) 10.605 13.016 22.73% 22,552.0 293,545
Qualified XII (1.10) 10.591 12.993 22.68% 20,445.0 265,636
Qualified XII (1.15) 10.577 12.969 22.62% 129,349.4 1,677,539
Qualified XII (1.20) 10.563 12.945 22.55% 33,672.0 435,899
</TABLE>
S-30
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
Value
Per Unit
--------
Beginning End of
of Year Year
- ---------------------------------------------------------------------
<S> <C> <C>
PPI MFS Research Growth Portfolio (continued):
Qualified XII (1.25) $10.549 $12.922
Qualified XII (1.30) 10.535 12.898
Qualified XII (1.40) 10.507 12.851
Qualified XII (1.50) 10.479 12.805
Qualified XIII 16.889 20.750
Qualified XV 16.861 20.716
Qualified XVI 16.685 20.388
Qualified XVII 16.758 20.527
Qualified XVIII 16.758 20.527
Qualified XIX 10.989 13.469
Qualified XX 14.528 17.796
Qualified XXI 17.376 20.735
Qualified XXII 17.405 20.770
- ---------------------------------------------------------------------
PPI MFS Value Equity Portfolio:
Qualified III 29.339 43.112
Qualified V 24.053 35.288
Qualified VI 24.145 35.480
Qualified VIII 20.756 30.498
Qualified X (1.15) 10.502 15.447
Qualified X (1.25) 10.495 15.421
Qualified XI 24.361 35.938
Qualified XII (0.40) 15.676 23.231
Qualified XII (0.45) 10.673 15.809
Qualified XII (0.50) 11.320 16.760
Qualified XII (0.55) 12.844 15.783
Qualified XII (0.65) 12.653 15.758
Qualified XII (0.70) 11.997 15.745
Qualified XII (0.75) 10.653 15.732
Qualified XII (0.80) 12.055 17.793
Qualified XII (0.85) 15.706 23.171
Qualified XII (0.90) 11.654 17.184
Qualified XII (0.95) 15.664 23.087
Qualified XII (1.00) 15.644 23.045
Qualified XII (1.05) 15.623 23.003
Qualified XII (1.10) 15.602 22.961
Qualified XII (1.15) 15.582 22.919
Qualified XII (1.20) 15.561 22.878
Qualified XII (1.25) 15.541 22.836
Qualified XII (1.30) 15.520 22.794
Qualified XII (1.40) 15.479 22.712
Qualified XII (1.50) 15.438 22.629
Qualified XIII 24.335 35.866
Qualified XV 24.294 35.806
Qualified XVI 24.041 35.239
Qualified XVII 24.145 35.480
Qualified XVIII 10.495 15.421
Qualified XXI 27.595 35.839
Qualified XXII 27.641 35.899
Annuity contracts in payment period
- ---------------------------------------------------------------------
PPI Scudder International Growth Portfolio:
Qualified III 20.829 32.585
Qualified V 19.707 30.781
Qualified VI 19.978 31.255
Qualified VIII 16.832 26.330
Qualified X (1.15) 20.081 31.447
Qualified X (1.25) 19.978 31.255
Qualified XI 20.157 31.658
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Increase (Decrease) Units
in Value of Outstanding Reserves
Accumulation at End at End
Unit of Year of Year
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PPI MFS Research Growth Portfolio (continued):
Qualified XII (1.25) 22.50% 3,582.9 $ 46,298
Qualified XII (1.30) 22.43% 6,221.1 80,241
Qualified XII (1.40) 22.31% 405.6 5,213
Qualified XII (1.50) 22.20% 1,992.4 25,512
Qualified XIII 22.86% 50,206.0 1,041,798
Qualified XV 22.86% 66,414.5 1,375,838
Qualified XVI 22.19% 139,055.9 2,835,026
Qualified XVII 22.49% 64,137.6 1,316,573
Qualified XVIII 22.49% 57,610.6 1,182,591
Qualified XIX 22.57% 14,801.9 199,364
Qualified XX 22.49% 24,517.6 436,320
Qualified XXI 19.33% (5) 86,898.8 1,801,854
Qualified XXII 19.33% (5) 94,524.7 1,963,247
- --------------------------------------------------------------------------------------------------------------
PPI MFS Value Equity Portfolio:
Qualified III 46.94% 2,448,586.9 105,562,849
Qualified V 46.71% 6,568.3 231,784
Qualified VI 46.95% 2,035,825.4 72,231,550
Qualified VIII 46.94% 11,317.8 345,168
Qualified X (1.15) 47.09% 12,265.5 189,469
Qualified X (1.25) 46.94% 77,143.0 1,189,640
Qualified XI 47.52% 184,604.4 6,634,315
Qualified XII (0.40) 48.19% 44,935.8 1,043,902
Qualified XII (0.45) 48.12% 36,972.2 584,478
Qualified XII (0.50) 48.06% 69,113.2 1,158,302
Qualified XII (0.55) 22.88% (11) 51,668.9 815,496
Qualified XII (0.65) 24.54% (10) 14,719.7 231,948
Qualified XII (0.70) 31.24% (5) 4,666.5 73,474
Qualified XII (0.75) 47.68% 57,583.9 905,928
Qualified XII (0.80) 47.60% 343,239.4 6,107,402
Qualified XII (0.85) 47.53% 399,213.2 9,250,158
Qualified XII (0.90) 47.45% 11,686.5 200,826
Qualified XII (0.95) 47.39% 121,012.3 2,793,777
Qualified XII (1.00) 47.31% 416,660.2 9,601,847
Qualified XII (1.05) 47.24% 10,435.4 240,043
Qualified XII (1.10) 47.17% 3,853.0 88,468
Qualified XII (1.15) 47.09% 77,457.5 1,775,271
Qualified XII (1.20) 47.02% 19,495.1 446,000
Qualified XII (1.25) 46.94% 3,708.9 84,697
Qualified XII (1.30) 46.87% 4,031.9 91,904
Qualified XII (1.40) 46.73% 95.2 2,162
Qualified XII (1.50) 46.58% 1,540.9 34,869
Qualified XIII 47.38% 20,452.5 733,542
Qualified XV 47.39% 18,282.1 654,607
Qualified XVI 46.58% 34,760.3 1,224,918
Qualified XVII 46.95% 8,425.1 298,926
Qualified XVIII 46.94% 3,646.0 56,226
Qualified XXI 29.87% (5) 23,458.1 840,717
Qualified XXII 29.88% (5) 29,138.7 1,046,044
Annuity contracts in payment period 36,974
- --------------------------------------------------------------------------------------------------------------
PPI Scudder International Growth Portfolio:
Qualified III 56.44% 2,807,485.1 91,482,777
Qualified V 56.19% 3,184.1 98,009
Qualified VI 56.45% 3,509,645.1 109,694,655
Qualified VIII 56.43% 21,757.3 572,876
Qualified X (1.15) 56.60% 34,626.0 1,088,877
Qualified X (1.25) 56.45% 437,547.4 13,675,631
Qualified XI 57.06% 262,480.7 8,309,690
</TABLE>
S-31
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units
-------- in Value of Outstanding Reserves
Beginning End of Accumulation at End at End
of Year Year Unit of Year of Year
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PPI Scudder International Growth Portfolio (continued):
Qualified XII (0.40) $13.602 $21.461 57.78% 196,446.2 $ 4,215,834
Qualified XII (0.45) 11.701 15.452 32.06% (9) 42,207.6 652,206
Qualified XII (0.50) 10.797 17.018 57.62% 115,575.3 1,966,827
Qualified XII (0.55) 12.322 15.427 25.20% (11) 60,618.9 935,195
Qualified XII (0.65) 10.375 15.403 48.46% (4) 24,792.0 381,861
Qualified XII (0.70) 10.603 15.390 45.15% (5) 12,199.0 187,745
Qualified XII (0.75) 9.781 15.378 57.22% 37,463.1 576,100
Qualified XII (0.80) 11.041 17.351 57.15% 721,189.5 12,513,015
Qualified XII (0.85) 13.628 21.405 57.07% 471,225.5 10,086,642
Qualified XII (0.90) 11.029 17.314 56.99% 15,230.7 263,709
Qualified XII (0.95) 13.592 21.327 56.91% 248,204.3 5,293,546
Qualified XII (1.00) 13.574 21.289 56.84% 868,602.8 18,491,374
Qualified XII (1.05) 13.556 21.250 56.76% 21,941.8 466,262
Qualified XII (1.10) 13.538 21.211 56.68% 7,463.1 158,302
Qualified XII (1.15) 13.520 21.173 56.61% 80,397.5 1,702,233
Qualified XII (1.20) 13.502 21.134 56.52% 15,622.5 330,169
Qualified XII (1.25) 13.485 21.096 56.44% 3,169.6 66,866
Qualified XII (1.30) 13.467 21.057 56.36% 461.5 9,719
Qualified XII (1.40) 13.431 20.981 56.21% 182.1 3,820
Qualified XII (1.50) 13.396 20.905 56.05% 3,468.6 72,510
Qualified XIII 20.135 31.595 56.92% 29,730.7 939,330
Qualified XV 20.102 31.542 56.91% 35,479.5 1,119,099
Qualified XVI 19.892 31.043 56.06% 52,692.0 1,635,704
Qualified XVII 19.978 31.255 56.45% 6,428.2 200,914
Qualified XVIII 19.978 31.255 56.45% 9,672.4 302,313
Qualified XXI 21.199 31.571 48.93% (5) 79,515.0 2,510,383
Qualified XXII 21.234 31.624 48.93% (5) 46,782.3 1,479,431
- --------------------------------------------------------------------------------------------------------------------------
PPI T. Rowe Price Growth Equity Portfolio:
Qualified III 20.929 25.283 20.80% 1,549,309.9 39,171,615
Qualified V 18.429 22.227 20.61% 1,304.0 28,985
Qualified VI 18.146 21.922 20.81% 5,814,568.3 127,466,773
Qualified VIII 18.525 22.377 20.79% 4,311.4 96,477
Qualified X (1.15) 20.400 24.669 20.93% 43,662.1 1,077,119
Qualified X (1.25) 20.328 24.557 20.80% 668,583.2 16,418,730
Qualified XI 18.309 22.205 21.28% 297,723.2 6,610,911
Qualified XII (0.40) 16.863 20.546 21.84% 165,483.2 3,399,972
Qualified XII (0.45) 11.057 13.464 21.77% 79,776.9 1,074,133
Qualified XII (0.50) 11.551 14.059 21.71% 6,941.6 97,592
Qualified XII (0.55) 11.814 13.443 13.79% (11) 26,870.3 361,204
Qualified XII (0.65) 11.742 13.421 14.30% (10) 17,656.7 236,968
Qualified XII (0.70) 11.790 13.410 13.74% (5) 17,646.5 236,641
Qualified XII (0.75) 11.036 13.399 21.41% 52,085.5 697,906
Qualified XII (0.80) 12.153 14.748 21.35% 869,106.4 12,817,158
Qualified XII (0.85) 16.895 20.493 21.30% 195,928.3 4,015,067
Qualified XII (0.90) 11.792 14.296 21.23% 6,405.2 91,566
Qualified XII (0.95) 16.851 20.418 21.17% 257,759.2 5,262,937
Qualified XII (1.00) 16.829 20.381 21.11% 666,141.7 13,576,601
Qualified XII (1.05) 16.806 20.344 21.05% 61,160.7 1,244,246
Qualified XII (1.10) 16.784 20.307 20.99% 23,320.3 473,563
Qualified XII (1.15) 16.762 20.270 20.93% 62,597.1 1,268,841
Qualified XII (1.20) 16.740 20.233 20.87% 24,522.4 496,163
Qualified XII (1.25) 16.718 20.196 20.80% 1,434.1 28,963
Qualified XII (1.30) 16.696 20.160 20.75% 3,214.8 64,809
Qualified XII (1.40) 16.652 20.086 20.62% 2,478.4 49,781
Qualified XII (1.50) 16.608 20.013 20.50% 7,739.5 154,893
Qualified XIII 18.289 22.160 21.17% 31,427.2 696,430
Qualified XV 18.258 22.123 21.17% 19,172.1 424,151
</TABLE>
S-32
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Value
Per Unit Increase (Decrease) Units
-------- in Value of Outstanding Reserves
Beginning End of Accumulation at End at End
of Year Year Unit of Year of Year
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PPI T. Rowe Price Growth Equity Portfolio (continued):
Qualified XVI $18.068 $21.773 20.51% 93,175.6 $ 2,028,703
Qualified XVII 18.146 21.922 20.81% 24,824.6 544,205
Qualified XVIII 20.328 24.557 20.80% 19,410.1 476,664
Qualified XXI 19.112 22.144 15.86% (5) 53,724.1 1,189,654
Qualified XXII 19.144 22.181 15.86% (5) 51,974.1 1,152,819
Annuity contracts in payment period 62,930
- -------------------------------------------------------------------------------------------------------------------------------
Total $15,463,100,152
===============================================================================================================================
</TABLE>
<TABLE>
<S> <C>
Qualified I Individual contracts issued prior to May 1, 1975 in connection with "Qualified Corporate Retirement Plans"
established pursuant to Section 401 of the Internal Revenue Code ("Code"); Tax-Deferred Annuity Plans
established by the public school systems and tax-exempt organizations pursuant to Section 403(b) of the Code,
and certain Individual Retirement Annuity Plans established by or on behalf of individuals pursuant to section
408(b) of the Code; Individual contracts issued prior to November 1, 1975 in connection with "H.R. 10 Plans"
established by persons entitled to the benefits of the Self-Employed Individuals Tax Retirement Act of 1962,
as amended; allocated group contracts issued prior to May 1, 1975 in connection with Qualified Corporate
Retirement Plans; and group contracts issued prior to October 1, 1978 in connection with Tax-Deferred Annuity
Plans.
Qualified III Individual contracts issued in connection with Tax-Deferred Annuity Plans and Individual Retirement Annuity
Plans since May 1, 1975, H.R. 10 Plans since November 1, 1975; group contracts issued since October 1, 1978 in
connection with Tax-Deferred Annuity Plans and group contracts issued since May 1, 1979 in connection with
Deferred Compensation Plans adopted by state and local governments and H.R. 10 Plans.
Qualified V Certain group AetnaPlus contracts issued since August 28, 1992 in connection with "Optional Retirement Plans"
established pursuant to Section 403(b) or 401(a) of the Internal Revenue Code.
Qualified VI Certain group AetnaPlus contracts issued in connection with Tax-Deferred Annuity Plans, Retirement Plus Plans
and Deferred Compensation Plans since August 28, 1992.
Qualified VII Certain existing contracts that were converted to ACES, an administrative system (previously valued under
Qualified I).
Qualified VIII Group AetnaPlus contracts issued in connection with Tax-Deferred Annuity Plans and Deferred Compensation Plans
adopted by state and local governments since June 30, 1993.
Qualified IX Certain large group contracts (Jumbo) that were converted to ACES, an administrative system (previously valued
under Qualified VI).
Qualified X Individual Retirement Annuity and Simplified Employee Pension Plans issued or converted to ACES, an
administrative system.
Qualified XI Certain large group contracts issued in connection with Deferred Compensation Plans adopted by state and local
governments since January 1996.
Qualified XII Group Retirement Plus and Voluntary TDA contracts issued since 1996 in connection with plans established
pursuant to Section 403(b) or 401(a) of the Internal Revenue Code, shown separately by applicable daily
charge; and contracts issued since October 1, 1996 in connection with Optional Retirement Plans established
pursuant to Section 403(b) or 403(a) of the Internal Revenue Code.
Qualified XIII Certain existing contracts issued in connection with Deferred Compensation Plans issued through product
exchange on May 25, 1996 (previously valued under Qualified VI).
Qualified XIV Certain existing contracts issued in connection with Deferred Compensation Plans issued through product
exchange on November 1, 1996 (previously valued under Qualified III).
Qualified XV Certain existing contracts issued in connection with Deferred Compensation Plans issued through product
exchange on December 16, 1996 (previously valued under Qualified VI), and new contracts issued after that date
in connection with certain Deferred Compensation Plans.
Qualified XVI Group AetnaPlus contracts assessing an administrative expense charge effective April 7, 1997 issued in
connection with Tax-Deferred Annuity Plans, Retirement Plus Plans and Deferred Compensation Plans.
Qualified XVII Group AetnaPlus contracts containing contractual limits on fees issued in connection with Tax-Deferred Annuity
Plans and Deferred Compensation Plans, which result in reduced daily charges for certain funding options
effective May 29, 1997.
Qualified XVIII Individual Retirement Annuity and Simplified Employee Pension Plan contracts containing contractual limits on
fees, which resulted in reduced daily charges for certain funding options effective May 29, 1997.
Qualified XIX Group Corporate 401 contracts containing contractual limits on fees, which resulted in reduced daily charges
for certain funding options effective May 29, 1997.
Qualified XX Group HR 10 contracts containing contractual limits on fees, which resulted in reduced daily charges for
certain funding options effective May 29, 1997.
Qualified XXI Certain existing contracts issued in connection with Deferred Compensation Plans having contract modifications
effective May 20, 1999.
Qualified XXII Certain existing contracts issued in connection with Deferred Compensation Plans having contract modifications
effective May 20, 1999.
</TABLE>
S-33
<PAGE>
Variable Annuity Account C
Condensed Financial Information - Year Ended December 31, 1999 (continued):
Notes to Condensed Financial Information:
(1) - Reflects less than a full year of performance activity. Funds were first
received in this option during January 1999.
(2) - Reflects less than a full year of performance activity. Funds were first
received in this option during February 1999.
(3) - Reflects less than a full year of performance activity. Funds were first
received in this option during March 1999.
(4) - Reflects less than a full year of performance activity. Funds were first
received in this option during April 1999.
(5) - Reflects less than a full year of performance activity. Funds were first
received in this option during May 1999.
(6) - Reflects less than a full year of performance activity. Funds were first
received in this option during June 1999.
(7) - Reflects less than a full year of performance activity. Funds were first
received in this option during July 1999.
(8) - Reflects less than a full year of performance activity. Funds were first
received in this option during August 1999.
(9) - Reflects less than a full year of performance activity. Funds were first
received in this option during September 1999.
(10) - Reflects less than a full year of performance activity. Funds were first
received in this option during October 1999.
(11) - Reflects less than a full year of performance activity. Funds were first
received in this option during November 1999.
(12) - Reflects less than a full year of performance activity. Funds were first
received in this option during December 1999.
See Notes to Financial Statements
S-34
<PAGE>
Variable Annuity Account C
Notes to Financial Statements - December 31, 1999
1. Summary of Significant Accounting Policies
Variable Annuity Account C (the "Account") is a separate account
established by Aetna Life Insurance and Annuity Company (the "Company") and
is registered under the Investment Company Act of 1940 as a unit investment
trust. The Account is sold exclusively for use with variable annuity
contracts that are qualified under the Internal Revenue Code of 1986, as
amended.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect amounts reported therein. Actual results could
differ from these estimates.
a. Valuation of Investments
Investments in the following Funds are stated at the closing net asset
value per share as determined by each Fund on December 31, 1999:
<TABLE>
<S> <C>
Aetna Ascent VP Fidelity Investments Variable Insurance Products Fund:
Aetna Balanced VP, Inc. o Equity-Income Portfolio
Aetna Bond VP o Growth Portfolio
Aetna Crossroads VP o High Income Portfolio
Aetna Get Fund, Series C o Overseas Portfolio
Aetna Get Fund, Series D Fidelity Investments Variable Insurance Products Fund II:
Aetna Get Fund, Series E o Asset Manager Portfolio
Aetna Get Fund, Series G o Contrafund Portfolio
Aetna Get Fund, Series H o Index 500 Portfolio
Aetna Growth and Income VP Janus Aspen Series:
Aetna Growth VP o Aggressive Growth Portfolio
Aetna High Yield VP o Balanced Portfolio
Aetna Index Plus Bond VP o Flexible Income Portfolio
Aetna Index Plus Large Cap VP o Growth Portfolio
Aetna Index Plus Mid Cap VP o Worldwide Growth Portfolio
Aetna Index Plus Small Cap VP Lexington Emerging Markets Fund
Aetna International VP Lexington Natural Resources Trust Fund
Aetna Legacy VP MFS Funds:
Aetna Money Market VP o Total Return Series
Aetna Real Estate Securities VP Oppenheimer Funds:
Aetna Small Company VP o Global Securities Fund/VA
Aetna Value Opportunity VP o Strategic Bond Fund/VA
AIM V.I. Funds: Portfolio Partners, Inc. (PPI):
o Capital Appreciation Fund o PPI MFS Emerging Equities Portfolio
o Growth and Income Fund o PPI MFS Research Growth Portfolio
o Growth Fund o PPI MFS Value Equity Portfolio
o Value Fund o PPI Scudder International Growth Portfolio
Calvert Social Balanced Portfolio o PPI T. Rowe Price Growth Equity Portfolio
</TABLE>
b. Other
Investment transactions are accounted for on a trade date basis and
dividend income is recorded on the ex-dividend date. The cost of
investments sold is determined by specific identification.
c. Federal Income Taxes
The operations of the Account form a part of, and are taxed with, the total
operations of the Company which is taxed as a life insurance company under
the Internal Revenue Code of 1986, as amended.
S-35
<PAGE>
Variable Annuity Account C
Notes to Financial Statements - December 31, 1999 (continued):
d. Annuity Reserves
Annuity reserves held in the Account are computed for currently payable
contracts according to the Progressive Annuity, a49, 1971 Individual
Annuity Mortality, 1971 Group Annuity Mortality, 83a, and 1983 Group
Annuity Mortality tables using various assumed interest rates not to exceed
seven percent. Mortality experience is monitored by the Company. Charges to
annuity reserves for mortality experience are reimbursed to the Company if
the reserves required are less than originally estimated. If additional
reserves are required, the Company reimburses the Account.
2. Valuation Period Deductions
Deductions by the Account for mortality and expense risk charges are made
in accordance with the terms of the contracts and are paid to the Company.
3. Dividend Income
On an annual basis, the Funds distribute substantially all of their taxable
income and realized capital gains to their shareholders. Distributions to
the Account are automatically reinvested in shares of the Funds. The
Account's proportionate share of each Fund's undistributed net investment
income (distributions in excess of net investment income) and accumulated
net realized gain (loss) on investments is included in net unrealized gain
(loss) in the Statement of Operations.
4. Purchases and Sales of Investments
The cost of purchases and proceeds from sales of investments other than
short-term investments for the year ended December 31, 1999 aggregated
$4,379,494,735 and $3,038,110,918.
S-36
<PAGE>
Variable Annuity Account C
Notes to Financial Statements - December 31, 1999 (continued):
5. Supplemental Information to Statements of Operations
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Year Ended December 31, 1999
Valuation Proceeds Cost of
Period from Investments
Dividends Deductions Sales Sold
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aetna Ascent VP:
Annuity contracts in accumulation $5,424,720 ($940,095) $21,050,463 $17,923,719
- -------------------------------------------------------------------------------------------------------
Aetna Balanced VP, Inc.:
Annuity contracts in accumulation 129,648,887 (11,409,349) 171,784,150 134,352,886
- -------------------------------------------------------------------------------------------------------
Aetna Bond VP:
Annuity contracts in accumulation 20,583,480 (4,121,837) 76,211,807 75,164,913
- -------------------------------------------------------------------------------------------------------
Aetna Crossroads VP:
Annuity contracts in accumulation 4,102,960 (794,117) 20,541,177 18,623,780
- -------------------------------------------------------------------------------------------------------
Aetna Get Fund, Series B:
Annuity contracts in accumulation 19,659,225 (300,702) 61,627,051 73,666,337
- -------------------------------------------------------------------------------------------------------
Aetna Get Fund, Series C:
Annuity contracts in accumulation 49,567,794 (2,297,493) 65,399,058 46,252,270
- -------------------------------------------------------------------------------------------------------
Aetna Get Fund, Series D:
Annuity contracts in accumulation 9,818,549 (6,617,202) 79,039,494 77,044,032
- -------------------------------------------------------------------------------------------------------
Aetna Get Fund, Series E:
Annuity contracts in accumulation 1,026,607 (841,648) 4,290,162 4,199,198
- -------------------------------------------------------------------------------------------------------
Aetna Get Fund, Series G:
Annuity contracts in accumulation 126,467 (70,416) 326,817 320,955
- -------------------------------------------------------------------------------------------------------
Aetna Get Fund, Series H:
Annuity contracts in accumulation 0 (453) 124 124
- -------------------------------------------------------------------------------------------------------
Aetna Growth and Income VP:
Annuity contracts in accumulation 1,090,401,955 (69,870,331) 1,125,243,123 977,360,909
- -------------------------------------------------------------------------------------------------------
Aetna Growth VP:
Annuity contracts in accumulation 6,868,901 (1,208,168) 13,984,560 10,684,305
- -------------------------------------------------------------------------------------------------------
Aetna High Yield VP:
Annuity contracts in accumulation 240,452 (24,430) 6,400,921 6,491,793
- -------------------------------------------------------------------------------------------------------
Aetna Index Plus Bond VP:
Annuity contracts in accumulation 65,211 (16,666) 2,220,589 2,299,816
- -------------------------------------------------------------------------------------------------------
Aetna Index Plus Large Cap VP:
Annuity contracts in accumulation 19,800,531 (4,075,549) 19,224,441 13,144,705
- -------------------------------------------------------------------------------------------------------
Aetna Index Plus Mid Cap VP:
Annuity contracts in accumulation 1,034,576 (71,863) 5,521,453 5,107,109
- -------------------------------------------------------------------------------------------------------
Aetna Index Plus Small Cap VP:
Annuity contracts in accumulation 16,354 (73,367) 8,139,482 7,636,928
- -------------------------------------------------------------------------------------------------------
Aetna International VP:
Annuity contracts in accumulation 545,291 (38,870) 3,280,269 3,005,531
- -------------------------------------------------------------------------------------------------------
Aetna Legacy VP:
Annuity contracts in accumulation 2,455,488 (529,171) 18,575,474 17,994,341
- -------------------------------------------------------------------------------------------------------
Aetna Money Market VP:
Annuity contracts in accumulation 11,526,349 (3,232,107) 467,395,045 463,827,536
- -------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1999 Net Unrealized Net Net
Net Gain (Loss) Change in Increase (Decrease)
Realized ----------- Unrealized in Net Assets
Gain (Loss) Beginning End Gain (Loss) Resulting from
on Investments of Year of Year on Investments Operations
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Aetna Ascent VP:
Annuity contracts in accumulation $3,126,744 $1,897,575 $4,030,133 $2,132,558 $9,743,927
- ------------------------------------------------------------------------------------------------------------------------------
Aetna Balanced VP, Inc.:
Annuity contracts in accumulation 37,431,264 87,636,330 45,044,344 (42,591,986) 113,078,816
- ------------------------------------------------------------------------------------------------------------------------------
Aetna Bond VP:
Annuity contracts in accumulation 1,046,894 4,484,663 (19,754,875) (24,239,538) (6,731,001)
- ------------------------------------------------------------------------------------------------------------------------------
Aetna Crossroads VP:
Annuity contracts in accumulation 1,917,397 598,907 1,130,783 531,876 5,758,116
- ------------------------------------------------------------------------------------------------------------------------------
Aetna Get Fund, Series B:
Annuity contracts in accumulation (12,039,286) 6,591,127 0 (6,591,127) 728,110
- ------------------------------------------------------------------------------------------------------------------------------
Aetna Get Fund, Series C:
Annuity contracts in accumulation 19,146,788 52,568,856 19,237,706 (33,331,150) 33,085,939
- ------------------------------------------------------------------------------------------------------------------------------
Aetna Get Fund, Series D:
Annuity contracts in accumulation 1,995,462 75,991 25,690,783 25,614,792 30,811,601
- ------------------------------------------------------------------------------------------------------------------------------
Aetna Get Fund, Series E:
Annuity contracts in accumulation 90,964 0 10,381,800 10,381,800 10,657,723
- ------------------------------------------------------------------------------------------------------------------------------
Aetna Get Fund, Series G:
Annuity contracts in accumulation 5,862 0 1,305,419 1,305,419 1,367,332
- ------------------------------------------------------------------------------------------------------------------------------
Aetna Get Fund, Series H:
Annuity contracts in accumulation 0 0 2,236 2,236 1,783
- ------------------------------------------------------------------------------------------------------------------------------
Aetna Growth and Income VP:
Annuity contracts in accumulation 147,882,214 (10,415,627) (281,156,139) (270,740,512) 897,673,326
- ------------------------------------------------------------------------------------------------------------------------------
Aetna Growth VP:
Annuity contracts in accumulation 3,300,255 7,094,432 31,404,391 24,309,959 33,270,947
- ------------------------------------------------------------------------------------------------------------------------------
Aetna High Yield VP:
Annuity contracts in accumulation (90,872) (104,129) (112,582) (8,453) 116,697
- ------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Bond VP:
Annuity contracts in accumulation (79,227) (60,361) (64,241) (3,880) (34,562)
- ------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Large Cap VP:
Annuity contracts in accumulation 6,079,736 38,198,247 94,088,323 55,890,076 77,694,794
- ------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Mid Cap VP:
Annuity contracts in accumulation 414,344 420,810 147,754 (273,056) 1,104,001
- ------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Small Cap VP:
Annuity contracts in accumulation 502,554 395,906 672,037 276,131 721,672
- ------------------------------------------------------------------------------------------------------------------------------
Aetna International VP:
Annuity contracts in accumulation 274,738 53,600 1,272,468 1,218,868 2,000,027
- ------------------------------------------------------------------------------------------------------------------------------
Aetna Legacy VP:
Annuity contracts in accumulation 581,133 (120,205) (83,476) 36,729 2,544,179
- ------------------------------------------------------------------------------------------------------------------------------
Aetna Money Market VP:
Annuity contracts in accumulation 3,567,509 5,409,256 4,054,787 (1,354,469) 10,507,282
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
S-37
<PAGE>
Variable Annuity Account C
Notes to Financial Statements - December 31, 1999 (continued):
5. Supplemental Information to Statements of Operations (continued)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
Year Ended December 31, 1999
Valuation Proceeds Cost of
Period from Investments
Dividends Deductions Sales Sold
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aetna Real Estate Securities VP:
Annuity contracts in accumulation $96,758 ($21,708) $4,751,578 $4,984,993
- ----------------------------------------------------------------------------------------------
Aetna Small Company VP:
Annuity contracts in accumulation 737,403 (519,552) 40,286,820 39,790,199
- ----------------------------------------------------------------------------------------------
Aetna Value Opportunity VP:
Annuity contracts in accumulation 1,611,663 (341,816) 7,979,762 6,203,281
- ----------------------------------------------------------------------------------------------
AIM V.I. Funds:
Capital Appreciation Fund:
Annuity contracts in accumulation 28,724 3,269 1,544,175 1,410,847
- ----------------------------------------------------------------------------------------------
Growth and Income Fund:
Annuity contracts in accumulation 68,381 (17,821) 204,821 189,523
- ----------------------------------------------------------------------------------------------
Growth Fund:
Annuity contracts in accumulation 138,595 5,418 169,728 154,998
- ----------------------------------------------------------------------------------------------
Value Fund:
Annuity contracts in accumulation 132,412 (24,625) 576,329 531,365
- ----------------------------------------------------------------------------------------------
Calvert Social Balanced Portfolio:
Annuity contracts in accumulation 6,507,151 (756,397) 8,714,679 5,905,102
- ----------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio:
Annuity contracts in accumulation 10,257,428 (2,626,771) 41,095,659 30,480,559
- ----------------------------------------------------------------------------------------------
Growth Portfolio:
Annuity contracts in accumulation 27,209,682 (3,706,242) 17,808,060 11,356,644
- ----------------------------------------------------------------------------------------------
High Income Portfolio:
Annuity contracts in accumulation 145,647 (21,453) 1,233,636 1,275,624
- ----------------------------------------------------------------------------------------------
Overseas Portfolio:
Annuity contracts in accumulation 579,736 (188,699) 10,461,822 9,483,583
- ----------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio:
Annuity contracts in accumulation 1,997,141 (339,739) 4,369,870 3,500,735
- ----------------------------------------------------------------------------------------------
Contrafund Portfolio:
Annuity contracts in accumulation 14,553,764 (4,734,800) 33,984,565 18,708,684
- ----------------------------------------------------------------------------------------------
Index 500 Portfolio:
Annuity contracts in accumulation 1,559,066 (1,337,952) 21,485,592 11,241,981
- ----------------------------------------------------------------------------------------------
Janus Aspen Series:
Aggressive Growth Portfolio:
Annuity contracts in accumulation 19,472,265 (6,169,116) 31,107,794 12,726,969
- ----------------------------------------------------------------------------------------------
Balanced Portfolio:
Annuity contracts in accumulation 4,338,447 (1,930,480) 6,359,847 3,664,310
- ----------------------------------------------------------------------------------------------
Flexible Income Portfolio:
Annuity contracts in accumulation 2,263,711 (358,371) 13,162,073 13,059,305
- ----------------------------------------------------------------------------------------------
Growth Portfolio:
Annuity contracts in accumulation 1,753,103 (2,631,764) 9,901,606 5,697,727
- ----------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1999 Net Unrealized Net Net
Net Gain (Loss) Change in Increase (Decrease)
Realized ----------- Unrealized in Net Assets
Gain (Loss) Beginning End Gain (Loss) Resulting from
on Investments of Year of Year on Investments Operations
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Aetna Real Estate Securities VP:
Annuity contracts in accumulation ($233,415) ($110,732) ($72,859) $37,873 ($120,492)
- --------------------------------------------------------------------------------------------------------------------------
Aetna Small Company VP:
Annuity contracts in accumulation 496,621 (403,739) 13,100,682 13,504,421 14,218,893
- --------------------------------------------------------------------------------------------------------------------------
Aetna Value Opportunity VP:
Annuity contracts in accumulation 1,776,481 3,491,978 5,773,811 2,281,833 5,328,161
- --------------------------------------------------------------------------------------------------------------------------
AIM V.I. Funds:
Capital Appreciation Fund:
Annuity contracts in accumulation 133,328 0 166,754 166,754 332,075
- --------------------------------------------------------------------------------------------------------------------------
Growth and Income Fund:
Annuity contracts in accumulation 15,298 0 1,220,016 1,220,016 1,285,874
- --------------------------------------------------------------------------------------------------------------------------
Growth Fund:
Annuity contracts in accumulation 14,730 0 497,930 497,930 656,673
- --------------------------------------------------------------------------------------------------------------------------
Value Fund:
Annuity contracts in accumulation 44,964 0 835,034 835,034 987,785
- --------------------------------------------------------------------------------------------------------------------------
Calvert Social Balanced Portfolio:
Annuity contracts in accumulation 2,809,577 9,585,862 7,801,335 (1,784,527) 6,775,804
- --------------------------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio:
Annuity contracts in accumulation 10,615,100 37,581,942 29,981,910 (7,600,032) 10,645,725
- --------------------------------------------------------------------------------------------------------------------------
Growth Portfolio:
Annuity contracts in accumulation 6,451,416 60,197,198 135,925,667 75,728,469 105,683,325
- --------------------------------------------------------------------------------------------------------------------------
High Income Portfolio:
Annuity contracts in accumulation (41,988) 8,863 42,986 34,123 116,329
- --------------------------------------------------------------------------------------------------------------------------
Overseas Portfolio:
Annuity contracts in accumulation 978,239 253,388 5,076,505 4,823,117 6,192,393
- --------------------------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio:
Annuity contracts in accumulation 869,135 3,974,260 3,975,450 1,190 2,527,727
- --------------------------------------------------------------------------------------------------------------------------
Contrafund Portfolio:
Annuity contracts in accumulation 15,275,881 106,134,557 167,567,655 61,433,098 86,527,943
- --------------------------------------------------------------------------------------------------------------------------
Index 500 Portfolio:
Annuity contracts in accumulation 10,243,611 26,655,788 35,135,496 8,479,708 18,944,433
- --------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series:
Aggressive Growth Portfolio:
Annuity contracts in accumulation 18,380,825 99,893,644 589,941,753 490,048,109 521,732,083
- --------------------------------------------------------------------------------------------------------------------------
Balanced Portfolio:
Annuity contracts in accumulation 2,695,537 20,140,807 53,832,562 33,691,755 38,795,259
- --------------------------------------------------------------------------------------------------------------------------
Flexible Income Portfolio:
Annuity contracts in accumulation 102,768 175,498 (1,682,793) (1,858,291) 149,817
- --------------------------------------------------------------------------------------------------------------------------
Growth Portfolio:
Annuity contracts in accumulation 4,203,879 34,398,134 119,830,478 85,432,344 88,757,562
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
S-38
<PAGE>
Variable Annuity Account C
Notes to Financial Statements - December 31, 1999 (continued):
5. Supplemental Information to Statements of Operations (continued)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1999
Valuation Proceeds Cost of
Period from Investments
Dividends Deductions Sales Sold
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Worldwide Growth Portfolio:
Annuity contracts in accumulation $1,323,812 ($8,554,217) $63,944,985 $35,293,263
- ---------------------------------------------------------------------------------------------------------------------
Lexington Emerging Markets Fund:
Annuity contracts in accumulation 32,463 (70,487) 10,365,694 9,445,496
- ---------------------------------------------------------------------------------------------------------------------
Lexington Natural Resources Trust Fund:
Annuity contracts in accumulation 104,698 (205,256) 8,764,535 10,714,263
- ---------------------------------------------------------------------------------------------------------------------
MFS Funds:
Total Return Series:
Annuity contracts in accumulation 28,468 (6,861) 149,841 140,401
- ---------------------------------------------------------------------------------------------------------------------
Oppenheimer Funds:
Global Securities Fund/VA: (1)
Annuity contracts in accumulation 61,201 (28,933) 1,584,101 1,350,923
- ---------------------------------------------------------------------------------------------------------------------
Strategic Bond Fund/VA: (2)
Annuity contracts in accumulation 160,240 (35,993) 1,816,177 1,856,796
- ---------------------------------------------------------------------------------------------------------------------
Portfolio Partners, Inc. (PPI):
PPI MFS Emerging Equities Portfolio:
Annuity contracts in accumulation 4,595,402 (5,055,146) 76,719,475 57,253,122
- ---------------------------------------------------------------------------------------------------------------------
PPI MFS Research Growth Portfolio:
Annuity contracts in accumulation 458,020 (2,725,841) 47,188,957 37,113,369
- ---------------------------------------------------------------------------------------------------------------------
PPI MFS Value Equity Portfolio:
Annuity contracts in accumulation 4,866,792 (2,019,570) 19,528,061 13,513,009
- ---------------------------------------------------------------------------------------------------------------------
PPI Scudder International Growth Portfolio:
Annuity contracts in accumulation 8,941,510 (2,492,688) 347,966,927 288,716,184
- ---------------------------------------------------------------------------------------------------------------------
PPI T. Rowe Price Growth Equity Portfolio:
Annuity contracts in accumulation 5,343,084 (2,549,311) 34,628,089 25,448,794
- ---------------------------------------------------------------------------------------------------------------------
Total Variable Annuity Account C $1,492,280,564 ($155,996,756) $3,038,110,918 $2,616,313,236
=====================================================================================================================
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1999 Net Unrealized Net
Net Gain (Loss) Change in
Realized ----------- Unrealized
Gain (Loss) Beginning End Gain (Loss)
on Investments of Year of Year on Investments
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Worldwide Growth Portfolio:
Annuity contracts in accumulation $28,651,722 $137,641,800 $537,057,291 $399,415,491
- -------------------------------------------------------------------------------------------------------------------
Lexington Emerging Markets Fund:
Annuity contracts in accumulation 920,198 (1,654,236) 3,274,926 4,929,162
- -------------------------------------------------------------------------------------------------------------------
Lexington Natural Resources Trust Fund:
Annuity contracts in accumulation (1,949,728) (6,226,325) (2,122,540) 4,103,785
- -------------------------------------------------------------------------------------------------------------------
MFS Funds:
Total Return Series:
Annuity contracts in accumulation 9,440 21,009 (1,178) (22,187)
- -------------------------------------------------------------------------------------------------------------------
Oppenheimer Funds:
Global Securities Fund/VA: (1)
Annuity contracts in accumulation 233,178 90,591 1,418,022 1,327,431
- -------------------------------------------------------------------------------------------------------------------
Strategic Bond Fund/VA: (2)
Annuity contracts in accumulation (40,619) 23,736 (2,586) (26,322)
- -------------------------------------------------------------------------------------------------------------------
Portfolio Partners, Inc. (PPI):
PPI MFS Emerging Equities Portfolio:
Annuity contracts in accumulation 19,466,353 87,984,814 265,730,062 177,745,248
- -------------------------------------------------------------------------------------------------------------------
PPI MFS Research Growth Portfolio:
Annuity contracts in accumulation 10,075,588 40,672,835 81,650,752 40,977,917
- -------------------------------------------------------------------------------------------------------------------
PPI MFS Value Equity Portfolio:
Annuity contracts in accumulation 6,015,052 30,665,227 93,135,075 62,469,848
- -------------------------------------------------------------------------------------------------------------------
PPI Scudder International Growth Portfolio:
Annuity contracts in accumulation 59,250,743 18,451,441 60,499,972 42,048,531
- -------------------------------------------------------------------------------------------------------------------
PPI T. Rowe Price Growth Equity Portfolio:
Annuity contracts in accumulation 9,179,295 45,568,978 76,614,253 31,045,275
- -------------------------------------------------------------------------------------------------------------------
Total Variable Annuity Account C $421,797,682 $949,942,696 $2,223,496,072 $1,273,553,376
===================================================================================================================
<CAPTION>
- -----------------------------------------------------------------
Year Ended December 31, 1999 Net
Increase (Decrease)
in Net Assets
Resulting from
Operations
- -----------------------------------------------------------------
<S> <C>
Worldwide Growth Portfolio:
Annuity contracts in accumulation $420,836,808
- -----------------------------------------------------------------
Lexington Emerging Markets Fund:
Annuity contracts in accumulation 5,811,336
- -----------------------------------------------------------------
Lexington Natural Resources Trust Fund:
Annuity contracts in accumulation 2,053,499
- -----------------------------------------------------------------
MFS Funds:
Total Return Series:
Annuity contracts in accumulation 8,860
- -----------------------------------------------------------------
Oppenheimer Funds:
Global Securities Fund/VA: (1)
Annuity contracts in accumulation 1,592,877
- -----------------------------------------------------------------
Strategic Bond Fund/VA: (2)
Annuity contracts in accumulation 57,306
- -----------------------------------------------------------------
Portfolio Partners, Inc. (PPI):
PPI MFS Emerging Equities Portfolio:
Annuity contracts in accumulation 196,751,857
- -----------------------------------------------------------------
PPI MFS Research Growth Portfolio:
Annuity contracts in accumulation 48,785,684
- -----------------------------------------------------------------
PPI MFS Value Equity Portfolio:
Annuity contracts in accumulation 71,332,122
- -----------------------------------------------------------------
PPI Scudder International Growth Portfolio:
Annuity contracts in accumulation 107,748,096
- -----------------------------------------------------------------
PPI T. Rowe Price Growth Equity Portfolio:
Annuity contracts in accumulation 43,018,343
- -----------------------------------------------------------------
Total Variable Annuity Account C $3,031,634,866
=================================================================
</TABLE>
(1) - Effective May 1, 1999, Oppenheimer Global Securities Fund's name changed
to Oppenheimer Global Securities Fund/VA.
(2) - Effective May 1, 1999, Oppenheimer Strategic Bond Fund's name changed to
Oppenheimer Strategic Bond Fund/VA.
S-39
<PAGE>
Variable Annuity Account C
Notes to Financial Statements - December 31, 1999 (continued):
6. Supplemental Information to Statements of Changes in Net Assets
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Year Ended December 31, 1999 Net
Net Change in
Net Realized Unrealized
Investment Gain (Loss) Gain (Loss)
Income on Investments on Investments
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aetna Ascent VP:
Annuity contracts in accumulation $4,484,625 $3,126,744 $2,132,558
- -------------------------------------------------------------------------------------------
Aetna Balanced VP, Inc.:
Annuity contracts in accumulation 118,239,538 37,431,264 (42,591,986)
Annuity contracts in payment period
- -------------------------------------------------------------------------------------------
Aetna Bond VP:
Annuity contracts in accumulation 16,461,643 1,046,894 (24,239,538)
Annuity contracts in payment period
- -------------------------------------------------------------------------------------------
Aetna Crossroads VP:
Annuity contracts in accumulation 3,308,843 1,917,397 531,876
Annuity contracts in payment period
- -------------------------------------------------------------------------------------------
Aetna Get Fund, Series B:
Annuity contracts in accumulation 19,358,523 (12,039,286) (6,591,127)
- -------------------------------------------------------------------------------------------
Aetna Get Fund, Series C:
Annuity contracts in accumulation 47,270,301 19,146,788 (33,331,150)
- -------------------------------------------------------------------------------------------
Aetna Get Fund, Series D:
Annuity contracts in accumulation 3,201,347 1,995,462 25,614,792
- -------------------------------------------------------------------------------------------
Aetna Get Fund, Series E:
Annuity contracts in accumulation 184,959 90,964 10,381,800
- -------------------------------------------------------------------------------------------
Aetna Get Fund, Series G:
Annuity contracts in accumulation 56,051 5,862 1,305,419
- -------------------------------------------------------------------------------------------
Aetna Get Fund, Series H:
Annuity contracts in accumulation (453) 0 2,236
- -------------------------------------------------------------------------------------------
Aetna Growth and Income VP:
Annuity contracts in accumulation 1,020,531,624 147,882,214 (270,740,512)
Annuity contracts in payment period
- -------------------------------------------------------------------------------------------
Aetna Growth VP:
Annuity contracts in accumulation 5,660,733 3,300,255 24,309,959
Annuity contracts in payment period
- -------------------------------------------------------------------------------------------
Aetna High Yield VP:
Annuity contracts in accumulation 216,022 (90,872) (8,453)
- -------------------------------------------------------------------------------------------
Aetna Index Plus Bond VP:
Annuity contracts in accumulation 48,545 (79,227) (3,880)
- -------------------------------------------------------------------------------------------
Aetna Index Plus Large Cap VP:
Annuity contracts in accumulation 15,724,982 6,079,736 55,890,076
Annuity contracts in payment period
- -------------------------------------------------------------------------------------------
Aetna Index Plus Mid Cap VP:
Annuity contracts in accumulation 962,713 414,344 (273,056)
- -------------------------------------------------------------------------------------------
Aetna Index Plus Small Cap VP:
Annuity contracts in accumulation (57,013) 502,554 276,131
- -------------------------------------------------------------------------------------------
Aetna International VP:
Annuity contracts in accumulation 506,421 274,738 1,218,868
- -------------------------------------------------------------------------------------------
Aetna Legacy VP:
Annuity contracts in accumulation 1,926,317 581,133 36,729
Annuity contracts in payment period
- -------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------
Year Ended December 31, 1999 Net
Increase (Decrease) Net Assets
in Net Assets ----------
from Unit Beginning End
Transactions of Year of Year
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aetna Ascent VP:
Annuity contracts in accumulation ($13,863,249) $86,000,256 $81,880,934
- -----------------------------------------------------------------------------------------------
Aetna Balanced VP, Inc.:
Annuity contracts in accumulation (131,531,827) 982,574,403 958,810,376
Annuity contracts in payment period 29,218,792 34,529,808
- -----------------------------------------------------------------------------------------------
Aetna Bond VP:
Annuity contracts in accumulation (59,574,107) 377,693,504 312,007,882
Annuity contracts in payment period 6,384,037 5,764,551
- -----------------------------------------------------------------------------------------------
Aetna Crossroads VP:
Annuity contracts in accumulation (12,384,759) 74,028,644 67,400,270
Annuity contracts in payment period 71,489 73,220
- -----------------------------------------------------------------------------------------------
Aetna Get Fund, Series B:
Annuity contracts in accumulation (60,309,287) 59,581,1770 0
- -----------------------------------------------------------------------------------------------
Aetna Get Fund, Series C:
Annuity contracts in accumulation (60,859,707) 198,180,953 170,407,185
- -----------------------------------------------------------------------------------------------
Aetna Get Fund, Series D:
Annuity contracts in accumulation 169,649,573 270,980,130 471,441,304
- -----------------------------------------------------------------------------------------------
Aetna Get Fund, Series E:
Annuity contracts in accumulation 147,163,657 0 157,821,380
- -----------------------------------------------------------------------------------------------
Aetna Get Fund, Series G:
Annuity contracts in accumulation 44,301,023 0 45,668,355
- -----------------------------------------------------------------------------------------------
Aetna Get Fund, Series H:
Annuity contracts in accumulation 1,780,802 0 1,782,585
- -----------------------------------------------------------------------------------------------
Aetna Growth and Income VP:
Annuity contracts in accumulation (946,107,352) 5,846,282,205 5,753,192,035
Annuity contracts in payment period 328,867,005 373,523,149
- -----------------------------------------------------------------------------------------------
Aetna Growth VP:
Annuity contracts in accumulation 47,381,121 64,734,239 145,431,206
Annuity contracts in payment period 116,487 71,588
- -----------------------------------------------------------------------------------------------
Aetna High Yield VP:
Annuity contracts in accumulation 816,418 1,244,378 2,177,493
- -----------------------------------------------------------------------------------------------
Aetna Index Plus Bond VP:
Annuity contracts in accumulation (391,345) 1,425,611 999,704
- -----------------------------------------------------------------------------------------------
Aetna Index Plus Large Cap VP:
Annuity contracts in accumulation 158,281,330 238,578,749 473,757,587
Annuity contracts in payment period 437,343 1,234,629
- -----------------------------------------------------------------------------------------------
Aetna Index Plus Mid Cap VP:
Annuity contracts in accumulation 3,990,282 4,116,477 9,210,760
- -----------------------------------------------------------------------------------------------
Aetna Index Plus Small Cap VP:
Annuity contracts in accumulation 2,602,681 4,953,155 8,277,508
- -----------------------------------------------------------------------------------------------
Aetna International VP:
Annuity contracts in accumulation 3,698,655 2,016,027 7,714,709
- -----------------------------------------------------------------------------------------------
Aetna Legacy VP:
Annuity contracts in accumulation (12,977,974) 53,070,226 42,650,270
Annuity contracts in payment period 261,063 247,224
- -----------------------------------------------------------------------------------------------
</TABLE>
S-40
<PAGE>
Variable Annuity Account C
Notes to Financial Statements - December 31, 1999 (continued):
6. Supplemental Information to Statements of Changes in Net Assets (continued)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Year Ended December 31, 1999 Net
Net Change in
Net Realized Unrealized
Investment Gain (Loss) Gain (Loss)
Income on Investments on Investments
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aetna Money Market VP:
Annuity contracts in accumulation $8,294,242 $3,567,509 ($1,354,469)
Annuity contracts in payment period
- --------------------------------------------------------------------------------------
Aetna Real Estate Securities VP:
Annuity contracts in accumulation 75,050 (233,415) 37,873
- --------------------------------------------------------------------------------------
Aetna Small Company VP:
Annuity contracts in accumulation 217,851 496,621 13,504,421
Annuity contracts in payment period
- --------------------------------------------------------------------------------------
Aetna Value Opportunity VP:
Annuity contracts in accumulation 1,269,847 1,776,481 2,281,833
- --------------------------------------------------------------------------------------
AIM V.I. Funds:
Capital Appreciation Fund:
Annuity contracts in accumulation 31,993 133,328 166,754
- --------------------------------------------------------------------------------------
Growth and Income Fund:
Annuity contracts in accumulation 50,560 15,298 1,220,016
- --------------------------------------------------------------------------------------
Growth Fund:
Annuity contracts in accumulation 144,013 14,730 497,930
- --------------------------------------------------------------------------------------
Value Fund:
Annuity contracts in accumulation 107,787 44,964 835,034
- --------------------------------------------------------------------------------------
Calvert Social Balanced Portfolio:
Annuity contracts in accumulation 5,750,754 2,809,577 (1,784,527)
- --------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio:
Annuity contracts in accumulation 7,630,657 10,615,100 (7,600,032)
- --------------------------------------------------------------------------------------
Growth Portfolio:
Annuity contracts in accumulation 23,503,440 6,451,416 75,728,469
- --------------------------------------------------------------------------------------
High Income Portfolio:
Annuity contracts in accumulation 124,194 (41,988) 34,123
- --------------------------------------------------------------------------------------
Overseas Portfolio:
Annuity contracts in accumulation 391,037 978,239 4,823,117
- --------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio:
Annuity contracts in accumulation 1,657,402 869,135 1,190
- --------------------------------------------------------------------------------------
Contrafund Portfolio:
Annuity contracts in accumulation 9,818,964 15,275,881 61,433,098
- --------------------------------------------------------------------------------------
Index 500 Portfolio:
Annuity contracts in accumulation 221,114 10,243,611 8,479,708
- --------------------------------------------------------------------------------------
Janus Aspen Series:
Aggressive Growth Portfolio:
Annuity contracts in accumulation 13,303,149 18,380,825 490,048,109
- --------------------------------------------------------------------------------------
Balanced Portfolio:
Annuity contracts in accumulation 2,407,967 2,695,537 33,691,755
- --------------------------------------------------------------------------------------
Flexible Income Portfolio:
Annuity contracts in accumulation 1,905,340 102,768 (1,858,291)
- --------------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------------
Year Ended December 31, 1999 Net
Increase (Decrease) Net Assets
in Net Assets ----------
from Unit Beginning End
Transactions of Year of Year
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aetna Money Market VP:
Annuity contracts in accumulation $56,001,252 $258,856,854 $325,367,721
Annuity contracts in payment period 83,117 80,784
- ---------------------------------------------------------------------------------------------
Aetna Real Estate Securities VP:
Annuity contracts in accumulation 543,051 1,561,066 1,983,625
- ---------------------------------------------------------------------------------------------
Aetna Small Company VP:
Annuity contracts in accumulation 734,295 47,966,985 62,919,038
Annuity contracts in payment period 9,901 11,036
- ---------------------------------------------------------------------------------------------
Aetna Value Opportunity VP:
Annuity contracts in accumulation 526,409 28,785,139 34,639,709
- ---------------------------------------------------------------------------------------------
AIM V.I. Funds:
Capital Appreciation Fund:
Annuity contracts in accumulation 1,498,214 0 1,830,289
- ---------------------------------------------------------------------------------------------
Growth and Income Fund:
Annuity contracts in accumulation 8,466,129 0 9,752,003
- ---------------------------------------------------------------------------------------------
Growth Fund:
Annuity contracts in accumulation 4,044,040 0 4,700,713
- ---------------------------------------------------------------------------------------------
Value Fund:
Annuity contracts in accumulation 7,550,284 0 8,538,069
- ---------------------------------------------------------------------------------------------
Calvert Social Balanced Portfolio:
Annuity contracts in accumulation (2,584,906) 63,901,407 68,092,305
- ---------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio:
Annuity contracts in accumulation (22,905,250) 226,201,287 213,941,762
- ---------------------------------------------------------------------------------------------
Growth Portfolio:
Annuity contracts in accumulation 104,243,427 230,408,503 440,335,255
- ---------------------------------------------------------------------------------------------
High Income Portfolio:
Annuity contracts in accumulation 146,104 1,611,556 1,873,989
- ---------------------------------------------------------------------------------------------
Overseas Portfolio:
Annuity contracts in accumulation 1,026,570 14,814,602 22,033,565
- ---------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio:
Annuity contracts in accumulation (1,496,641) 26,699,659 27,730,745
- ---------------------------------------------------------------------------------------------
Contrafund Portfolio:
Annuity contracts in accumulation 28,744,136 360,081,326 475,353,405
- ---------------------------------------------------------------------------------------------
Index 500 Portfolio:
Annuity contracts in accumulation 10,276,427 93,352,318 122,573,178
- ---------------------------------------------------------------------------------------------
Janus Aspen Series:
Aggressive Growth Portfolio:
Annuity contracts in accumulation 279,468,672 292,229,082 1,093,429,837
- ---------------------------------------------------------------------------------------------
Balanced Portfolio:
Annuity contracts in accumulation 101,738,423 94,876,992 235,410,674
- ---------------------------------------------------------------------------------------------
Flexible Income Portfolio:
Annuity contracts in accumulation 257,212 32,501,248 32,908,277
- ---------------------------------------------------------------------------------------------
</TABLE>
S-41
<PAGE>
Variable Annuity Account C
Notes to Financial Statements - December 31, 1999 (continued):
6. Supplemental Information to Statements of Changes in Net Assets (continued)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Year Ended December 31, 1999 Net
Net Change in
Net Realized Unrealized
Investment Gain (Loss) Gain (Loss)
Income on Investments on Investments
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Growth Portfolio:
Annuity contracts in accumulation ($878,661) $4,203,879 $85,432,344
Annuity contracts in payment period
- ----------------------------------------------------------------------------------------------------
Worldwide Growth Portfolio:
Annuity contracts in accumulation (7,230,405) 28,651,722 399,415,491
Annuity contracts in payment period
- ----------------------------------------------------------------------------------------------------
Lexington Emerging Markets Fund:
Annuity contracts in accumulation (38,024) 920,198 4,929,162
- ----------------------------------------------------------------------------------------------------
Lexington Natural Resources Trust Fund:
Annuity contracts in accumulation (100,558) (1,949,728) 4,103,785
- ----------------------------------------------------------------------------------------------------
MFS Funds:
Total Return Series:
Annuity contracts in accumulation 21,607 9,440 (22,187)
- ----------------------------------------------------------------------------------------------------
Oppenheimer Funds:
Global Securities Fund/VA: (1)
Annuity contracts in accumulation 32,268 233,178 1,327,431
- ----------------------------------------------------------------------------------------------------
Strategic Bond Fund/VA: (2)
Annuity contracts in accumulation 124,247 (40,619) (26,322)
Annuity contracts in payment period
- ----------------------------------------------------------------------------------------------------
Portfolio Partners, Inc. (PPI):
PPI MFS Emerging Equities Portfolio:
Annuity contracts in accumulation (459,744) 19,466,353 177,745,248
Annuity contracts in payment period
- ----------------------------------------------------------------------------------------------------
PPI MFS Research Growth Portfolio:
Annuity contracts in accumulation (2,267,821) 10,075,588 40,977,917
- ----------------------------------------------------------------------------------------------------
PPI MFS Value Equity Portfolio:
Annuity contracts in accumulation 2,847,222 6,015,052 62,469,848
Annuity contracts in payment period
- ----------------------------------------------------------------------------------------------------
PPI Scudder International Growth Portfolio:
Annuity contracts in accumulation 6,448,822 59,250,743 42,048,531
- ----------------------------------------------------------------------------------------------------
PPI T. Rowe Price Growth Equity Portfolio:
Annuity contracts in accumulation 2,793,773 9,179,295 31,045,275
Annuity contracts in payment period
- ----------------------------------------------------------------------------------------------------
Total Variable Annuity Account C $1,336,283,808 $421,797,682 $1,273,553,376
====================================================================================================
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Year Ended December 31, 1999 Net
Increase (Decrease) Net Assets
in Net Assets ----------
from Unit Beginning End
Transactions of Year of Year
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Growth Portfolio:
Annuity contracts in accumulation $141,722,099 $132,697,360 $362,723,120
Annuity contracts in payment period 235,492 689,393
- --------------------------------------------------------------------------------------------------------
Worldwide Growth Portfolio:
Annuity contracts in accumulation 100,021,912 615,835,740 1,136,307,574
Annuity contracts in payment period 365,972 752,858
- --------------------------------------------------------------------------------------------------------
Lexington Emerging Markets Fund:
Annuity contracts in accumulation 1,680,324 4,094,455 11,586,115
- --------------------------------------------------------------------------------------------------------
Lexington Natural Resources Trust Fund:
Annuity contracts in accumulation (5,286,357) 19,741,327 16,508,469
- --------------------------------------------------------------------------------------------------------
MFS Funds:
Total Return Series:
Annuity contracts in accumulation 289,569 385,767 684,196
- --------------------------------------------------------------------------------------------------------
Oppenheimer Funds:
Global Securities Fund/VA: (1)
Annuity contracts in accumulation 3,302,879 976,121 5,871,877
- --------------------------------------------------------------------------------------------------------
Strategic Bond Fund/VA: (2)
Annuity contracts in accumulation 1,177,371 2,253,578 3,464,259
Annuity contracts in payment period 3,521 27,517
- --------------------------------------------------------------------------------------------------------
Portfolio Partners, Inc. (PPI):
PPI MFS Emerging Equities Portfolio:
Annuity contracts in accumulation (33,182,887) 434,156,330 597,714,231
Annuity contracts in payment period 27,431 38,500
- --------------------------------------------------------------------------------------------------------
PPI MFS Research Growth Portfolio:
Annuity contracts in accumulation (35,109,323) 242,087,516 255,763,877
- --------------------------------------------------------------------------------------------------------
PPI MFS Value Equity Portfolio:
Annuity contracts in accumulation 4,623,083 150,852,476 226,770,707
Annuity contracts in payment period 0 36,974
- --------------------------------------------------------------------------------------------------------
PPI Scudder International Growth Portfolio:
Annuity contracts in accumulation (18,230,281) 201,965,809 291,483,624
- --------------------------------------------------------------------------------------------------------
PPI T. Rowe Price Growth Equity Portfolio:
Annuity contracts in accumulation (15,852,163) 215,872,943 243,032,240
Annuity contracts in payment period 56,047 62,930
- --------------------------------------------------------------------------------------------------------
Total Variable Annuity Account C $5,100,009 $12,426,365,277 $15,463,100,152
========================================================================================================
</TABLE>
(1) - Effective May 1, 1999, Oppenheimer Global Securities Fund's name changed
to Oppenheimer Global Securities Fund/VA.
(2) - Effective May 1, 1999, Oppenheimer Strategic Bond Fund's name changed to
Oppenheimer Strategic Bond Fund/VA.
S-42
<PAGE>
Variable Annuity Account C
Notes to Financial Statements - December 31, 1998 (continued):
6. Supplemental Information to Statements of Changes in Net Assets (continued)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Year Ended December 31, 1998 Net
Net Change in
Net Realized Unrealized
Investment Gain (Loss) Gain (Loss)
Income on Investments on Investments
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aetna Ascent VP: (1)
Annuity contracts in accumulation $3,128,384 $2,562,397 ($3,610,219)
- --------------------------------------------------------------------------------------------
Aetna Balanced VP: (2)
Annuity contracts in accumulation 153,211,956 42,703,224 (53,862,918)
Annuity contracts in payment period
- --------------------------------------------------------------------------------------------
Aetna Bond VP: (3)
Annuity contracts in accumulation 18,437,889 521,925 5,612,691
Annuity contracts in payment period
- --------------------------------------------------------------------------------------------
Aetna Crossroads VP: (4)
Annuity contracts in accumulation 2,049,966 2,450,233 (2,015,396)
Annuity contracts in payment period
- --------------------------------------------------------------------------------------------
Aetna Get Fund, Series B:
Annuity contracts in accumulation 15,962,213 11,960,830 (16,355,219)
- --------------------------------------------------------------------------------------------
Aetna Get Fund, Series C:
Annuity contracts in accumulation 21,997,865 23,920,782 5,826,482
- --------------------------------------------------------------------------------------------
Aetna Get Fund, Series D:
Annuity contracts in accumulation 816,486 0 75,991
- --------------------------------------------------------------------------------------------
Aetna Growth and Income VP: (5)
Annuity contracts in accumulation 1,015,570,023 190,048,495 (448,991,512)
Annuity contracts in payment period
- --------------------------------------------------------------------------------------------
Aetna Growth VP: (6)
Annuity contracts in accumulation (223,647) 231,175 7,331,655
Annuity contracts in payment period
- --------------------------------------------------------------------------------------------
Aetna High Yield VP: (7)
Annuity contracts in accumulation 116,367 (49,386) (104,129)
- --------------------------------------------------------------------------------------------
Aetna Index Plus Bond VP:
Annuity contracts in accumulation 71,714 8,031 (60,361)
- --------------------------------------------------------------------------------------------
Aetna Index Plus Large Cap VP: (8)
Annuity contracts in accumulation 8,817,406 1,967,287 31,233,673
Annuity contracts in payment period
- --------------------------------------------------------------------------------------------
Aetna Index Plus Mid Cap VP: (9)
Annuity contracts in accumulation 186,430 (9,298) 420,810
- --------------------------------------------------------------------------------------------
Aetna Index Plus Small Cap VP: (10)
Annuity contracts in accumulation 180,192 (238,686) 395,906
- --------------------------------------------------------------------------------------------
Aetna International VP: (11)
Annuity contracts in accumulation 91,856 (177,741) 53,600
- --------------------------------------------------------------------------------------------
Aetna Legacy VP: (12)
Annuity contracts in accumulation 1,746,594 975,624 (708,542)
Annuity contracts in payment period
- --------------------------------------------------------------------------------------------
Aetna Money Market VP: (13)
Annuity contracts in accumulation 9,089,898 1,505,797 (303,586)
Annuity contracts in payment period
- --------------------------------------------------------------------------------------------
Aetna Real Estate Securities VP: (14)
Annuity contracts in accumulation 70,732 (47,944) (110,732)
- --------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------
Year Ended December 31, 1998 Net
Increase (Decrease) Net Assets
in Net Assets ----------
from Unit Beginning End
Transactions of Year of Year
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aetna Ascent VP: (1)
Annuity contracts in accumulation $11,804,390 $72,115,304 $86,000,256
- ------------------------------------------------------------------------------------------------
Aetna Balanced VP: (2)
Annuity contracts in accumulation (119,806,746) 968,354,403 982,574,403
Annuity contracts in payment period 21,193,276 29,218,792
- ------------------------------------------------------------------------------------------------
Aetna Bond VP: (3)
Annuity contracts in accumulation (19,343,273) 372,629,553 377,693,504
Annuity contracts in payment period 6,218,756 6,384,037
- ------------------------------------------------------------------------------------------------
Aetna Crossroads VP: (4)
Annuity contracts in accumulation 21,876,020 49,739,310 74,028,644
Annuity contracts in payment period 0 71,489
- ------------------------------------------------------------------------------------------------
Aetna Get Fund, Series B:
Annuity contracts in accumulation (31,539,579) 79,552,932 59,581,177
- ------------------------------------------------------------------------------------------------
Aetna Get Fund, Series C:
Annuity contracts in accumulation (90,386,869) 236,822,693 198,180,953
- ------------------------------------------------------------------------------------------------
Aetna Get Fund, Series D:
Annuity contracts in accumulation 270,087,653 0 270,980,130
- ------------------------------------------------------------------------------------------------
Aetna Growth and Income VP: (5)
Annuity contracts in accumulation (952,072,750) 6,078,549,136 5,846,282,205
Annuity contracts in payment period 292,045,818 328,867,005
- ------------------------------------------------------------------------------------------------
Aetna Growth VP: (6)
Annuity contracts in accumulation 56,413,060 1,098,483 64,734,239
Annuity contracts in payment period 0 116,487
- ------------------------------------------------------------------------------------------------
Aetna High Yield VP: (7)
Annuity contracts in accumulation 1,281,526 0 1,244,378
- ------------------------------------------------------------------------------------------------
Aetna Index Plus Bond VP:
Annuity contracts in accumulation 1,406,227 0 1,425,611
- ------------------------------------------------------------------------------------------------
Aetna Index Plus Large Cap VP: (8)
Annuity contracts in accumulation 113,822,649 83,098,319 238,578,749
Annuity contracts in payment period 76,758 437,343
- ------------------------------------------------------------------------------------------------
Aetna Index Plus Mid Cap VP: (9)
Annuity contracts in accumulation 3,518,535 0 4,116,477
- ------------------------------------------------------------------------------------------------
Aetna Index Plus Small Cap VP: (10)
Annuity contracts in accumulation 4,615,743 0 4,953,155
- ------------------------------------------------------------------------------------------------
Aetna International VP: (11)
Annuity contracts in accumulation 2,048,312 0 2,016,027
- ------------------------------------------------------------------------------------------------
Aetna Legacy VP: (12)
Annuity contracts in accumulation 18,514,701 32,749,254 53,070,226
Annuity contracts in payment period 53,658 261,063
- ------------------------------------------------------------------------------------------------
Aetna Money Market VP: (13)
Annuity contracts in accumulation 8,301,664 240,346,197 258,856,854
Annuity contracts in payment period 0 83,117
- ------------------------------------------------------------------------------------------------
Aetna Real Estate Securities VP: (14)
Annuity contracts in accumulation 1,649,010 0 1,561,066
- ------------------------------------------------------------------------------------------------
</TABLE>
S-43
<PAGE>
Variable Annuity Account C
Notes to Financial Statements - December 31, 1998 (continued):
6. Supplemental Information to Statements of Changes in Net Assets (continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Year Ended December 31, 1998 Net
Net Change in
Net Realized Unrealized
Investment Gain (Loss) Gain (Loss)
Income on Investments on Investments
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aetna Small Company VP: (15)
Annuity contracts in accumulation $34,075 ($632,566) ($237,039)
Annuity contracts in payment period
- -------------------------------------------------------------------------------------------
Aetna Value Opportunity VP: (16)
Annuity contracts in accumulation 72,311 170,847 3,765,980
- -------------------------------------------------------------------------------------------
Calvert Social Balanced Portfolio:
Annuity contracts in accumulation 3,912,500 1,912,051 2,389,226
- -------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio:
Annuity contracts in accumulation 9,927,989 6,494,005 3,583,644
- -------------------------------------------------------------------------------------------
Growth Portfolio:
Annuity contracts in accumulation 16,421,511 2,297,310 37,802,599
- -------------------------------------------------------------------------------------------
High Income Portfolio:
Annuity contracts in accumulation (5,690) (11,606) 8,863
- -------------------------------------------------------------------------------------------
Overseas Portfolio:
Annuity contracts in accumulation 894,375 575,848 27,910
- -------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio:
Annuity contracts in accumulation 2,664,758 493,267 52,204
- -------------------------------------------------------------------------------------------
Contrafund Portfolio:
Annuity contracts in accumulation 11,718,943 8,948,829 55,916,578
- -------------------------------------------------------------------------------------------
Index 500 Portfolio:
Annuity contracts in accumulation 1,445,737 1,421,594 15,143,241
- -------------------------------------------------------------------------------------------
Janus Aspen Series:
Aggressive Growth Portfolio:
Annuity contracts in accumulation (2,715,064) 9,472,868 63,408,377
- -------------------------------------------------------------------------------------------
Balanced Portfolio:
Annuity contracts in accumulation 2,053,127 1,503,469 15,336,313
- -------------------------------------------------------------------------------------------
Flexible Income Portfolio:
Annuity contracts in accumulation 1,403,917 484,768 (205,615)
- -------------------------------------------------------------------------------------------
Growth Portfolio:
Annuity contracts in accumulation 5,050,660 2,933,593 22,714,944
Annuity contracts in payment period
- -------------------------------------------------------------------------------------------
Worldwide Growth Portfolio:
Annuity contracts in accumulation 13,991,276 27,711,590 75,136,932
Annuity contracts in payment period
- -------------------------------------------------------------------------------------------
Lexington Emerging Markets Fund:
Annuity contracts in accumulation 341,144 (1,259,258) (685,957)
- -------------------------------------------------------------------------------------------
Lexington Natural Resources Trust Fund:
Annuity contracts in accumulation 1,386,460 551,760 (8,013,218)
- -------------------------------------------------------------------------------------------
MFS Fund:
Total Return Series:
Annuity contracts in accumulation (980) (168) 21,009
- -------------------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------------
Year Ended December 31, 1998 Net
Increase (Decrease) Net Assets
in Net Assets ----------
from Unit Beginning End
Transactions of Year of Year
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aetna Small Company VP: (15)
Annuity contracts in accumulation $43,856,203 $4,956,212 $47,966,985
Annuity contracts in payment period 0 9,901
- ---------------------------------------------------------------------------------------------
Aetna Value Opportunity VP: (16)
Annuity contracts in accumulation 22,736,361 2,039,640 28,785,139
- ---------------------------------------------------------------------------------------------
Calvert Social Balanced Portfolio:
Annuity contracts in accumulation 1,243,219 54,444,411 63,901,407
- ---------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio:
Annuity contracts in accumulation 15,460,299 190,735,350 226,201,287
- ---------------------------------------------------------------------------------------------
Growth Portfolio:
Annuity contracts in accumulation 45,629,738 128,257,345 230,408,503
- ---------------------------------------------------------------------------------------------
High Income Portfolio:
Annuity contracts in accumulation 1,619,989 0 1,611,556
- ---------------------------------------------------------------------------------------------
Overseas Portfolio:
Annuity contracts in accumulation (132,737) 13,449,206 14,814,602
- ---------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio:
Annuity contracts in accumulation 290,089 23,199,341 26,699,659
- ---------------------------------------------------------------------------------------------
Contrafund Portfolio:
Annuity contracts in accumulation 26,948,171 256,548,805 360,081,326
- ---------------------------------------------------------------------------------------------
Index 500 Portfolio:
Annuity contracts in accumulation 17,619,975 57,721,771 93,352,318
- ---------------------------------------------------------------------------------------------
Janus Aspen Series:
Aggressive Growth Portfolio:
Annuity contracts in accumulation 11,462,457 210,600,444 292,229,082
- ---------------------------------------------------------------------------------------------
Balanced Portfolio:
Annuity contracts in accumulation 38,532,102 37,451,981 94,876,992
- ---------------------------------------------------------------------------------------------
Flexible Income Portfolio:
Annuity contracts in accumulation 16,062,139 14,756,039 32,501,248
- ---------------------------------------------------------------------------------------------
Growth Portfolio:
Annuity contracts in accumulation 22,205,253 79,992,417 132,697,360
Annuity contracts in payment period 35,986 235,492
- ---------------------------------------------------------------------------------------------
Worldwide Growth Portfolio:
Annuity contracts in accumulation 70,151,913 429,093,163 615,835,740
Annuity contracts in payment period 116,838 365,972
- ---------------------------------------------------------------------------------------------
Lexington Emerging Markets Fund:
Annuity contracts in accumulation (90,067) 5,788,593 4,094,455
- ---------------------------------------------------------------------------------------------
Lexington Natural Resources Trust Fund:
Annuity contracts in accumulation (17,149,400) 42,965,725 19,741,327
- ---------------------------------------------------------------------------------------------
MFS Fund:
Total Return Series:
Annuity contracts in accumulation 365,906 0 385,767
- ---------------------------------------------------------------------------------------------
</TABLE>
S-44
<PAGE>
Variable Annuity Account C
Notes to Financial Statements - December 31, 1998 (continued):
6. Supplemental Information to Statements of Changes in Net Assets (continued)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Year Ended December 31, 1998 Net
Net Change in
Net Realized Unrealized
Investment Gain (Loss) Gain (Loss)
Income on Investments on Investments
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Oppenheimer Funds:
Global Securities Fund:
Annuity contracts in accumulation ($3,966) ($25,797) $90,591
- --------------------------------------------------------------------------------------------------
Strategic Bond Fund:
Annuity contracts in accumulation (10,626) (19,660) 23,736
Annuity contracts in payment period
- --------------------------------------------------------------------------------------------------
Portfolio Partners, Inc. (PPI):
PPI MFS Emerging Equities Portfolio:
Annuity contracts in accumulation (3,417,298) 6,217,559 91,886,007
Annuity contracts in payment period
- --------------------------------------------------------------------------------------------------
PPI MFS Research Growth Portfolio:
Annuity contracts in accumulation (2,696,448) 3,203,133 44,839,052
- --------------------------------------------------------------------------------------------------
PPI MFS Value Equity Portfolio:
Annuity contracts in accumulation (1,409,082) 1,764,276 29,028,143
- --------------------------------------------------------------------------------------------------
PPI Scudder International Growth Portfolio:
Annuity contracts in accumulation (2,085,647) 20,936,373 15,417,811
- --------------------------------------------------------------------------------------------------
PPI T. Rowe Price Growth Equity Portfolio:
Annuity contracts in accumulation (1,234,277) 2,580,929 42,197,410
Annuity contracts in payment period
- --------------------------------------------------------------------------------------------------
Total Variable Annuity Account C $1,309,062,029 $376,057,759 $34,476,935
==================================================================================================
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Year Ended December 31, 1998 Net
Increase (Decrease) Net Assets
in Net Assets ----------
from Unit Beginning End
Transactions of Year of Year
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Oppenheimer Funds:
Global Securities Fund:
Annuity contracts in accumulation $915,293 $0 $976,121
- --------------------------------------------------------------------------------------------------------
Strategic Bond Fund:
Annuity contracts in accumulation 2,263,649 0 2,253,578
Annuity contracts in payment period 0 3,521
- --------------------------------------------------------------------------------------------------------
Portfolio Partners, Inc. (PPI):
PPI MFS Emerging Equities Portfolio:
Annuity contracts in accumulation (13,492,672) 352,966,999 434,156,330
Annuity contracts in payment period 23,166 27,431
- --------------------------------------------------------------------------------------------------------
PPI MFS Research Growth Portfolio:
Annuity contracts in accumulation (30,288,218) 227,029,997 242,087,516
- --------------------------------------------------------------------------------------------------------
PPI MFS Value Equity Portfolio:
Annuity contracts in accumulation 5,182,435 116,286,704 150,852,476
- --------------------------------------------------------------------------------------------------------
PPI Scudder International Growth Portfolio:
Annuity contracts in accumulation (35,002,543) 202,699,815 201,965,809
- --------------------------------------------------------------------------------------------------------
PPI T. Rowe Price Growth Equity Portfolio:
Annuity contracts in accumulation 2,934,376 169,450,553 215,872,943
Annuity contracts in payment period 0 56,047
- --------------------------------------------------------------------------------------------------------
Total Variable Annuity Account C ($448,485,797) $11,155,254,351 $12,426,365,277
========================================================================================================
</TABLE>
(1) - Effective May 1, 1998, Aetna Ascent Variable Portfolio's name changed to
Aetna Ascent VP.
(2) - Effective May 1, 1998, Aetna Investment Advisors Fund's name changed to
Aetna Balanced VP.
(3) - Effective May 1, 1998, Aetna Income Shares began doing business under
the name Aetna Bond VP.
(4) - Effective May 1, 1998, Aetna Crossroads Variable Portfolio's name
changed to Aetna Crossroads VP.
(5) - Effective May 1, 1998, Aetna Variable Fund began doing business under
the name Aetna Growth and Income VP.
(6) - Effective May 1, 1998, Aetna Variable Growth Portfolio's name changed to
Aetna Growth VP.
(7) - Effective May 1, 1998, Aetna High Yield Portfolio's name changed to
Aetna High Yield VP.
(8) - Effective May 1, 1998, Aetna Variable Index Plus Portfolio's name
changed to Aetna Index Plus Large Cap VP.
(9) - Effective May 1, 1998, Aetna Index Plus Mid Cap Portfolio's name changed
to Aetna Index Plus Mid Cap VP.
(10) - Effective May 1, 1998, Aetna Index Plus Small Cap Portfolio's name
changed to Aetna Index Plus Small Cap VP.
(11) - Effective May 1, 1998, Aetna International Portfolio's name changed to
Aetna International VP.
(12) - Effective May 1, 1998, Aetna Legacy Variable Portfolio's name changed to
Aetna Legacy VP.
(13) - Effective May 1, 1998, Aetna Variable Encore Fund began doing business
under the name Aetna Money Market VP.
(14) - Effective May 1, 1998, Aetna Real Estate Securities Portfolio's name
changed to Aetna Real Estate Securities VP.
(15) - Effective May 1, 1998, Aetna Variable Small Company Portfolio's name
changed to Aetna Small Company VP.
(16) - Effective May 1, 1998, Aetna Variable Capital Appreciation Portfolio's
name changed to Aetna Value Opportunity VP.
S-45
<PAGE>
Independent Auditors' Report
The Board of Directors of Aetna Life Insurance and Annuity Company and
Contract Owners of Variable Annuity Account C:
We have audited the accompanying statement of assets and liabilities of Aetna
Life Insurance and Annuity Company Variable Annuity Account C (the "Account") as
of December 31, 1999, the related statement of operations for the year then
ended, statements of changes in net assets for each of the years in the two-year
period then ended and condensed financial information for the year ended
December 31, 1999. These financial statements and condensed financial
information are the responsibility of the Account's management. Our
responsibility is to express an opinion on these financial statements and
condensed financial information 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 and condensed
financial information 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, 1999, 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 and condensed financial information
referred to above present fairly, in all material respects, the financial
position of Aetna Life Insurance and Annuity Company Variable Annuity Account C
as of December 31, 1999, the results of its operations for the year then ended,
changes in its net assets for each of the years in the two-year period then
ended and condensed financial information for the year ended December 31, 1999,
in conformity with generally accepted accounting principles.
/s/ KPMG LLP
Hartford, Connecticut
February 3, 2000
S-46
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
Index to Consolidated Financial Statements
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report........................................................ F-2
Consolidated Financial Statements:
Consolidated Statements of Income for the Years Ended December 31, 1999,
1998 and 1997.................................................................. F-3
Consolidated Balance Sheets as of December 31, 1999 and 1998..................... F-4
Consolidated Statements of Changes in Shareholder's Equity for the Years Ended
December 31, 1999, 1998 and 1997............................................... F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 1999, 1998
and 1997....................................................................... F-6
Notes to Consolidated Financial Statements....................................... F-7
</TABLE>
F-1
<PAGE>
Independent Auditors' Report
The Shareholder and Board of Directors
Aetna Life Insurance and Annuity Company:
We have audited the accompanying consolidated balance sheets of Aetna Life
Insurance and Annuity Company and Subsidiaries as of December 31, 1999 and
1998, and the related consolidated statements of income, changes in
shareholder's equity and cash flows for each of the years in the three-year
period ended December 31, 1999. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated 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
statements presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the aforementioned consolidated financial statements present
fairly, in all material respects, the financial position of Aetna Life
Insurance and Annuity Company and Subsidiaries at December 31, 1999 and 1998,
and the results of their operations and their cash flows for each of the years
in the three-year period ended December 31, 1999, in conformity with generally
accepted accounting principles.
/s/ KPMG LLP
Hartford, Connecticut
February 7, 2000
F-2
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Consolidated Statements of Income
(millions)
<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------------------
1999 1998 1997
----------- ------------ ------------
<S> <C> <C> <C>
Revenue:
Premiums $ 107.5 $ 79.4 $ 69.1
Charges assessed against policyholders 388.3 324.3 262.0
Net investment income 886.3 871.8 881.7
Net realized capital (losses) gains (21.5) 10.4 29.7
Other income 129.7 100.2 96.8
-------- -------- --------
Total revenue 1,490.3 1,386.1 1,339.3
-------- -------- --------
Benefits and expenses:
Current and future benefits 746.2 714.4 720.4
Operating expenses:
Salaries and related benefits 153.0 141.0 133.5
Other 214.9 200.8 182.8
Amortization of deferred policy acquisition costs 104.9 91.2 66.3
-------- -------- --------
Total benefits and expenses 1,219.0 1,147.4 1,103.0
-------- -------- --------
Income from continuing operations before income
taxes 271.3 238.7 236.3
Income taxes 90.1 66.6 68.4
-------- -------- --------
Income from continuing operations 181.2 172.1 167.9
Discontinued operations, net of tax:
Income from operations -- 61.8 67.8
Amortization of deferred gain on sale 5.7 -- --
Immediate gain on sale -- 59.0 --
-------- -------- --------
Net income $ 186.9 $ 292.9 $ 235.7
======== ======== ========
</TABLE>
See Notes to Consolidated Financial Statements
F-3
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Consolidated Balance Sheets
(millions, except share data)
<TABLE>
<CAPTION>
December 31, December 31,
1999 1998
------------- --------------
<S> <C> <C>
Assets
Investments:
Debt securities available for sale, at fair value
(amortized cost: $11,657.9 and $11,571.3) $11,410.1 $12,068.2
Equity securities, available for sale:
Nonredeemable preferred stock (cost: $134.7 and $202.6) 130.9 203.3
Investment in affiliated mutual funds (cost: $63.5 and $96.8) 64.1 100.1
Common stock (cost: $6.7 and $1.0) 11.5 2.0
Short-term investments 74.2 48.9
Mortgage loans 6.7 12.7
Policy loans 314.0 292.2
Other investments 13.2 12.7
----------- -----------
Total investments 12,024.7 12,740.1
Cash and cash equivalents 693.3 628.3
Short-term investments under securities loan agreement 232.5 277.3
Accrued investment income 150.7 151.6
Premiums due and other receivables 298.3 61.1
Reinsurance recoverable 3,001.2 2,959.8
Deferred income taxes 150.4 114.3
Deferred policy acquisition costs 1,046.4 893.1
Other assets 96.5 70.4
Separate Accounts assets 38,692.6 29,430.2
----------- -----------
Total assets $56,386.6 $47,326.2
=========== ===========
Liabilities and Shareholder's Equity
Liabilities:
Future policy benefits $ 3,850.4 $ 3,815.9
Unpaid claims and claim expenses 27.3 18.8
Policyholders' funds left with the Company 11,121.7 11,305.6
----------- -----------
Total insurance reserve liabilities 14,999.4 15,140.3
Payables under securities loan agreement 232.5 277.3
Current income taxes 14.7 279.6
Other liabilities 1,063.0 805.5
Separate Accounts liabilities 38,692.6 29,430.2
----------- -----------
Total liabilities 55,002.2 45,932.9
----------- -----------
Shareholder's equity:
Common stock, par value $50 (100,000 shares
authorized; 55,000 shares issued and outstanding) 2.8 2.8
Paid-in capital 431.8 431.8
Accumulated other comprehensive (loss) income (44.8) 104.8
Retained earnings 994.6 853.9
----------- -----------
Total shareholder's equity 1,384.4 1,393.3
----------- -----------
Total liabilities and shareholder's equity $56,386.6 $47,326.2
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements
F-4
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Consolidated Statements of Changes in Shareholder's Equity
(millions)
<TABLE>
<CAPTION>
Years Ended December 31,
---------------------------------------------
1999 1998 1997
------------- ------------- -------------
<S> <C> <C> <C>
Shareholder's equity, beginning of year $1,393.3 $1,852.8 $1,618.3
Comprehensive income:
Net income 186.9 292.9 235.7
Other comprehensive income, net of tax:
Unrealized (losses) gains on securities
($(230.2), $18.2 $49.9, pretax)(1) (149.6) 11.9 32.4
---------- ---------- ----------
Total comprehensive income 37.3 304.8 268.1
---------- ---------- ----------
Capital contribution -- 9.3 (5.0)
Other changes 2.8 2.4 5.7
---------- ---------- ----------
Common stock dividends (49.0) (776.0) (34.3)
---------- ---------- ----------
Shareholder's equity, end of year $1,384.4 $1,393.3 $1,852.8
========== ========== ==========
</TABLE>
(1) Net of reclassification adjustments.
See Notes to Consolidated Financial Statements
F-5
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Consolidated Statements of Cash Flows
(millions)
<TABLE>
<CAPTION>
Years Ended December 31,
---------------------------------------------
1999 1998 1997
------------- ------------- -------------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net income $ 186.9 $ 292.9 $ 235.7
Adjustments to reconcile net income to net cash (used for) provided by
operating activities:
Net accretion of discount on investments (26.5) (29.5) (66.8)
Amortization of deferred gain on sale ( 5.7) -- --
Immediate gain on sale -- (59.0) --
Net realized capital losses (gains) 21.5 (11.1) (36.0)
Changes in assets and liabilities:
Decrease (increase) in accrued investment income 0.9 11.4 ( 4.0)
Increase in premiums due and other receivables 23.3 (23.7) (30.0)
(Increase) decrease in policy loans (21.8) 177.4 (70.3)
Increase in deferred policy acquisition costs (153.3) (132.8) (155.8)
Decrease in reinsurance loan to affiliate -- 397.2 231.1
Net increase in universal life account balances 55.7 122.9 157.1
Decrease in other insurance reserve liabilities (28.6) (41.8) (120.3)
Decrease in other liabilities and other assets (53.9) (53.6) (74.0)
(Decrease) increase in income taxes (259.8) 106.4 (25.8)
---------- ---------- ----------
Net cash (used for) provided by operating activities (261.3) 756.7 40.9
---------- ---------- ----------
Cash Flows from Investing Activities:
Proceeds from sales of:
Debt securities available for sale 5,890.1 6,790.2 5,311.4
Equity securities 111.2 150.1 103.1
Mortgage loans 6.1 0.3 0.2
Life Business -- 966.5 --
Investment maturities and collections of:
Debt securities available for sale 1,216.5 1,296.3 1,212.7
Short-term investments 80.6 135.3 108.4
Cost of investment purchases in:
Debt securities available for sale (7,099.7) (6,706.4) (6,734.8)
Equity securities (13.0) (125.7) (113.3)
Short-term investments (106.0) (83.9) (167.1)
Increase in property and equipment 5.7 9.0 10.0
Other, net 3.7 (2,725.9) --
---------- ---------- ----------
Net cash provided by (used for) investing activities 95.2 (294.2) (269.4)
---------- ---------- ----------
Cash Flows from Financing Activities:
Deposits and interest credited for investment contracts 2,040.2 1,571.1 1,621.2
Withdrawals of investment contracts (1,680.8) (1,393.1) (1,256.3)
Capital contribution to Separate Account -- -- (25.0)
Return of capital from Separate Account -- 1.7 12.3
Capital contribution from HOLDCO -- 9.3 (5.0)
Dividends paid to shareholder (255.0) (570.0) (34.3)
Other, net 126.7 (34.3) 26.4
---------- ---------- ----------
Net cash provided by (used for) financing activities 231.1 (415.3) 339.3
---------- ---------- ----------
Net increase in cash and cash equivalents 65.0 47.2 110.8
Cash and cash equivalents, beginning of year 628.3 581.1 470.3
---------- ---------- ----------
Cash and cash equivalents, end of year $ 693.3 $ 628.3 $ 581.1
========== ========== ==========
Supplemental cash flow information:
Income taxes paid, net $ 316.5 $ 60.5 $ 130.3
========== ========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
F-6
<PAGE>
Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Policies
Aetna Life Insurance and Annuity Company ("ALIAC") and its wholly owned
subsidiaries (collectively, the "Company") are providers of financial products
and services and investment management services in the United States. The
Company has two business segments: Financial Products and Investment Management
Services. On October 1, 1998, the Company sold its individual life insurance
business to Lincoln National Corporation ("Lincoln") and accordingly, it is now
classified as Discontinued Operations (refer to note 3).
Financial Products include annuity contracts that offer a variety of funding
and payout options for individual and employer-sponsored retirement plans
qualified under Internal Revenue Code Sections 401, 403, 408 and 457,
nonqualified annuity contracts and mutual funds. Annuity contracts may be
deferred or immediate ("payout annuities"). These products also include
programs offered to qualified plans and nonqualified deferred compensation
plans that package administrative and recordkeeping services along with a menu
of investment options, including mutual funds (both ALIAC and nonaffiliated
mutual funds), variable and fixed investment options. Financial Products also
include investment advisory services and pension plan administrative services.
Investment Management Services provides: investment advisory services to
affiliated and unaffiliated institutional and retail clients on a
fee-for-service basis; underwriting services to the Aetna Series Fund Inc.;
distribution services for other Aetna products; and trustee, administrative,
and other fiduciary services to retirement plans requiring or otherwise
utilizing a trustee or custodian.
Discontinued Operations include universal life, variable universal life,
traditional whole life and term insurance.
Principles of Consolidation
The consolidated financial statements include ALIAC and its wholly owned
subsidiaries, Aetna Insurance Company of America ("AICA") and Aetna Investment
Adviser Holding Company, Inc. ("IA Holdco"). ALIAC is a wholly owned subsidiary
of Aetna Retirement Holdings, Inc. ("HOLDCO"). HOLDCO is a wholly owned
subsidiary of Aetna Retirement Services, Inc. whose ultimate parent is Aetna
Inc. ("Aetna"). On July 1, 1999, HOLDCO contributed IA Holdco to the Company
(refer to note 2).
The consolidated financial statements have been prepared in accordance with
generally accepted accounting principles. The contribution of IA Holdco to the
Company was accounted for in a manner similar to that of a pooling-of-interests
and accordingly, the Company's historical consolidated financial statements
have been restated to include the accounts and results of operations of IA
Holdco. Certain reclassifications have been made to 1998 and 1997 financial
information to conform to the 1999 presentation.
F-7
<PAGE>
Notes to Consolidated Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
New Accounting Standards
Accounting by Insurance and Other Enterprises for Insurance-Related Assesments
As of January 1, 1999, the Company adopted Statement of Position ("SOP") 97-3,
Accounting by Insurance and Other Enterprises for Insurance-Related
Assessments, issued by the American Institute of Certified Public Accountants
("AICPA"). This statement provides guidance for determining when an insurance
or other enterprise should recognize a liability for guaranty-fund and other
insurance-related assessments and guidance for measuring the liability. The
adoption of this standard did not have a material effect on the Company's
financial position or results of operations, as the Company had previously
accounted for guaranty-fund and other insurance-related assessments in a manner
consistent with this standard.
Future Application of Accounting Standards
Deposit Accounting: Accounting for Insurance and Reinsurance Contracts That Do
Not Transfer Insurance Risk
In October 1998, the AICPA issued SOP 98-7, Deposit Accounting: Accounting for
Insurance and Reinsurance Contracts That Do Not Transfer Insurance Risk, which
provides guidance on how to account for all insurance and reinsurance contracts
that do not transfer insurance risk, except for long-duration life and health
insurance contracts. This statement is effective for the Company's financial
statements beginning January 1, 2000. The Company does not expect the adoption
of this standard to have a material effect on its financial position and
results of operations.
Accounting for Derivative Instruments and Hedging Activities
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Financial Accounting Standard ("FAS") No. 133, Accounting for Derivative
Instruments and Hedging Activities. This standard requires companies to record
all derivatives on the balance sheet as either assets or liabilities and
measure those instruments at fair value. The manner in which companies are to
record gains or losses resulting from changes in the values of those
derivatives depends on the use of the derivative and whether it qualifies for
hedge accounting. As amended by FAS No. 137, Accounting for Derivative
Instruments and Hedging Activities -- Deferral of the Effective Date of FASB
Statement No. 133, this standard is effective for the Company's financial
statements beginning January 1, 2001, with early adoption permitted. The impact
of FAS No. 133 on the Company's financial statements will vary based on certain
factors including future interpretative guidance from the FASB, the extent of
the Company's hedging activities, the types of hedging instruments used and the
effectiveness of such instruments. The Company is evaluating the impact of
adoption of this standard and currently does not believe that it will have a
material effect on its financial position and results of operations.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the
F-8
<PAGE>
Notes to Consolidated Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
financial statements and accompanying notes. Actual results could differ from
reported results using those estimates.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, money market instruments and
other debt issues with a maturity of 90 days or less when purchased.
Investments
Debt and equity securities are classified as available for sale and carried at
fair value. Securities are written down (as realized capital losses) for other
than temporary declines in value. Included in available-for-sale securities are
investments that support experience-rated products.
Experience-rated products are products where the customer, not the Company,
assumes investment (including realized capital gains and losses) and other
risks, subject to, among other things, minimum guarantees. As long as minimum
guarantees are not triggered, the effect of experience- rated products'
investment performance does not impact the Company's results of operations.
Realized and unrealized capital gains and losses on investments supporting
these products are reflected in policyholder's funds left with the Company.
Realized capital gains and losses on all other investments are reflected in the
Company's results of operations. Unrealized capital gains and losses on all
other investments are reflected in shareholders' equity, net of related income
taxes. Purchases and sales of debt and equity securities are recorded on the
trade date. Sales of mortgage loans are recorded on the closing date.
Fair values for debt and equity securities are based on quoted market prices or
dealer quotations. Where quoted market prices or dealer quotations are not
available, fair values are measured utilizing quoted market prices for similar
securities or by using discounted cash flow methods. Cost for mortgage-backed
securities is adjusted for unamortized premiums and discounts, which are
amortized using the interest method over the estimated remaining term of the
securities, adjusted for anticipated prepayments. The Company does not accrue
interest on problem debt securities when management believes the collection of
interest is unlikely.
The Company engages in securities lending whereby certain securities from its
portfolio are loaned to other institutions for short periods of time. Initial
collateral, primarily cash, is required at a rate of 102% of the market value
of a loaned domestic security and 105% of the market value of a loaned foreign
security. The collateral is deposited by the borrower with a lending agent, and
retained and invested by the lending agent according to the Company's
guidelines to generate additional income. The market value of the loaned
securities is monitored on a daily basis with additional collateral obtained or
refunded as the market value of the loaned securities fluctuates. At December
31, 1999 and 1998, the Company loaned securities (which are reflected as
invested assets) with a fair value of approximately $232.5 million and $277.3
million, respectively.
The investment in affiliated mutual funds represents an investment in Aetna
managed mutual funds which have been seeded by the Company, and is carried at
fair value.
F-9
<PAGE>
Notes to Consolidated Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
Mortgage loans and policy loans are carried at unpaid principal balances, net
of impairment reserves.
Short-term investments, consisting primarily of money market instruments and
other debt issues purchased with an original maturity of 91 days to one year,
are considered available for sale and are carried at fair value, which
approximates amortized cost.
The Company utilizes futures contracts for other than trading purposes in order
to hedge interest rate risk (i.e. market risk, refer to note 5.)
Futures contracts are carried at fair value and require daily cash settlement.
Changes in the fair value of futures contracts allocable to experience rated
contracts are deducted from capital gains and losses with an offsetting amount
reported in future policy benefits. Changes in the fair value of futures
contracts allocable to non-experienced-rated contracts that qualify as hedges
are deferred and recognized as an adjustment to the hedged asset or liability.
Deferred gains or losses on such futures contracts are amortized over the life
of the acquired asset or liability as a yield adjustment or through net
realized capital gains or losses upon disposal of an asset. Changes in the fair
value of futures contracts that do not qualify as hedges are recorded in net
realized capital gains or losses. Hedge designation requires specific asset or
liability identification, a probability at inception of high correlation with
the position underlying the hedge, and that high correlation be maintained
throughout the hedge period. If a hedging instrument ceases to be highly
correlated with the position underlying the hedge, hedge accounting ceases at
that date and excess gains or losses on the hedging instrument are reflected in
net realized capital gains or losses.
Included in common stock are warrants which represent the right to purchase
specific securities. Upon exercise, the cost of the warrants is added to the
basis of the securities purchased.
On occasion, the Company sells call options written on underlying securities
which are carried at fair value. Changes in fair value of these options are
recorded in net realized capital gains or losses.
Deferred Policy Acquisition Costs
Certain costs of acquiring certain insurance business are deferred. These
costs, all of which vary with and are primarily related to the production of
new and renewal business, consist principally of commissions, certain expenses
of underwriting and issuing contracts, and certain agency expenses. For certain
annuity and pension contracts, such costs are amortized in proportion to
estimated gross profits and adjusted to reflect actual gross profits over the
life of the contracts (up to 20 years for annuity and pension contracts.)
Periodically, modifications may be made to deferred annuity contract features,
such as shortening the surrender charge period or waiving the surrender charge,
changing the mortality and expense fees, etc. Unamortized deferred policy
acquisition costs associated with these modified contracts are not written off,
but rather, continue to be associated with the original block of business to
F-10
<PAGE>
Notes to Consolidated Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
which these costs were previously recorded. Such costs are amortized based on
revised estimates of expected gross profits based upon the contract after the
modification. Unamortized deferred policy acquisition costs related to deferred
annuity products were approximately $1.0 billion and $893 million as of
December 31, 1999 and 1998, respectively.
Deferred policy acquisition costs are written off to the extent that it is
determined that future policy premiums and investment income or gross profits
are not adequate to cover related expenses.
Insurance Reserve Liabilities
Future policy benefits include reserves for universal life, immediate annuities
with life contingent payouts and traditional life insurance contracts. Reserves
for universal life products are equal to cumulative deposits less withdrawals
and charges plus credited interest thereon. Reserves for traditional life
insurance contracts represent the present value of future benefits to be paid
to or on behalf of policyholders and related expenses less the present value of
future net premiums.
Reserves for immediate annuities with life contingent payouts contracts are
computed on the basis of assumed investment yield, mortality, and expenses,
including a margin for adverse deviations. Such assumptions generally vary by
plan, year of issue and policy duration. Reserve interest rates range from
1.50% to 11.25% for all years presented. Investment yield is based on the
Company's experience. Mortality and withdrawal rate assumptions are based on
relevant Aetna experience and are periodically reviewed against both industry
standards and experience.
Because the sale of the domestic individual life insurance business was
substantially in the form of an indemnity reinsurance agreement, the Company
reported an addition to its reinsurance recoverable approximating the Company's
total individual life reserves at the sale date.
Policyholders' funds left with the Company include reserves for deferred
annuity investment contracts and immediate annuities without life contingent
payouts. Reserves on such contracts are equal to cumulative deposits less
charges and withdrawals plus credited interest thereon (rates range from 1.50%
to 11.25% for all years presented) net of adjustments for investment experience
that the Company is entitled to reflect in future credited interest. These
reserves also include unrealized gains/losses related to FAS No. 115. Reserves
on contracts subject to experience rating reflect the rights of
contractholders, plan participants and the Company.
Unpaid claims for all lines of insurance include benefits for reported losses
and estimates of benefits for losses incurred but not reported.
Revenue Recognition
For certain annuity contracts, charges assessed against policyholders' funds
for the cost of insurance, surrender charges, actuarial margin and other fees
are recorded as revenue in charges assessed against policyholders. Other
amounts received for these contracts are reflected as deposits
F-11
<PAGE>
Notes to Consolidated Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
and are not recorded as revenue. Related policy benefits are recorded in
relation to the associated premiums or gross profit so that profits are
recognized over the expected lives of the contracts. When annuity payments with
life contingencies begin under contracts that were initially investment
contracts, the accumulated balance in the account is treated as a single
premium for the purchase of an annuity and reflected as an offsetting amount in
both premiums and current and future benefits in the Consolidated Statements of
Income.
Separate Accounts
Separate Accounts assets and liabilities generally represent funds maintained
to meet specific investment objectives of contractholders who bear the
investment risk, subject, in some cases, to minimum guaranteed rates.
Investment income and investment gains and losses generally accrue directly to
such contractholders. The assets of each account are legally segregated and are
not subject to claims that arise out of any other business of the Company.
Separate Accounts assets supporting variable options under universal life and
annuity contracts are invested, as designated by the contractholder or
participant under a contract (who bears the investment risk subject, in limited
cases, to minimum guaranteed rates) in shares of mutual funds which are managed
by the Company, or other selected mutual funds not managed by the Company.
Separate Accounts assets are carried at fair value. At December 31, 1999 and
1998 , unrealized losses of $8.0 million and unrealized gains of $10.0 million,
respectively, after taxes, on assets supporting a guaranteed interest option
are reflected in shareholder's equity. Separate Accounts liabilities are
carried at fair value, except for those relating to the guaranteed interest
option. Reserves relating to the guaranteed interest option are maintained at
fund value and reflect interest credited at rates ranging from 3.70% to 12.00%
in 1999 and 3.00 to 8.10% in 1998.
Separate Accounts assets and liabilities are shown as separate captions in the
Consolidated Balance Sheets. Deposits, investment income and net realized and
unrealized capital gains and losses of the Separate Accounts are not reflected
in the Consolidated Financial Statements (with the exception of realized and
unrealized capital gains and losses on the assets supporting the guaranteed
interest option). The Consolidated Statements of Cash Flows do not reflect
investment activity of the Separate Accounts.
Reinsurance
The Company utilizes indemnity reinsurance agreements to reduce its exposure to
large losses in all aspects of its insurance business. Such reinsurance permits
recovery of a portion of losses from reinsurers, although it does not discharge
the primary liability of the Company as direct insurer of the risks reinsured.
The Company evaluates the financial strength of potential reinsurers and
continually monitors the financial condition of reinsurers. Only those
reinsurance recoverable deemed probable of recovery are reflected as assets on
the Company's Consolidated Balance Sheets. Of the reinsurance recoverable on
the Consolidated Balance Sheets at December 31, 1999 and 1998, $2,989 million
and $2,946 million, respectively, is related to the reinsurance recoverable
from Lincoln arising from the sale of the domestic life insurance business.
(Refer to note 3)
F-12
<PAGE>
Notes to Consolidated Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
Income Taxes
The Company is included in the consolidated federal income tax return of Aetna.
The Company is taxed at regular corporate rates after adjusting income reported
for financial statement purposes for certain items. Deferred income tax
expenses/benefits result from changes during the year in cumulative temporary
differences between the tax basis and book basis of assets and liabilities.
2. Contribution of IA Holdco from HOLDCO
On July 1, 1999, HOLDCO contributed IA Holdco to the Company. The primary
operating subsidiary of IA Holdco is Aeltus Investment Management, Inc.
("Aeltus") which has two wholly-owned operating subsidiaries: Aeltus Capital,
Inc. ("ACI"), a broker dealer, and Aeltus Trust Company ("ATC"), a limited
purpose banking entity. Aeltus is a registered investment advisor under the
Investment Advisers Act of 1940 and provides investment advisory services to
institutional and retail clients on a fee-for-service basis. In addition,
Aeltus, through its ACI subsidiary, provides distribution services for certain
Aetna mutual funds and other Aetna products. Aeltus' ATC subsidiary provides
trustee, administrative, and other fiduciary services to retirement plans
requiring or otherwise utilizing a trustee or custodian.
3. Discontinued Operations-Individual Life Insurance
On October 1, 1998, the Company sold its domestic individual life insurance
business to Lincoln for $1 billion in cash. The transaction was generally in
the form of an indemnity reinsurance arrangement, under which Lincoln
contractually assumed from the Company certain policyholder liabilities and
obligations, although the Company remains directly obligated to policyholders.
Assets related to and supporting the life policies were transferred to Lincoln
and the Company recorded a reinsurance recoverable from Lincoln. The
transaction resulted in an after-tax gain on the sale of approximately $117
million, of which $57.7 million was deferred and was being recognized over
approximately 15 years. The remaining portion of the gain is recognized
immediately in net income and was largely attributed to access to the agency
sales force and brokerage distribution channel. Approximately $5.2 million
(after tax) of the deferred gain was recognized during 1999. During the fourth
quarter of 1999, the Company refined certain accrual and tax estimates which
had been established in connection with the recording of the deferred gain. As
a result, the deferred gain was increased by $12.9 million (after tax) to $65.4
million at December 31, 1999. The remaining deferred gain will be recognized
over approximately 14 years. The unamortized portion of the deferred gain is
presented in other liabilities on the Consolidated Balance Sheets.
The operating results of the domestic individual life insurance business are
presented as Discontinued Operations. All prior year income statement data has
been restated to reflect the presentation as Discontinued Operations. Revenues
for the individual life segment were $652.2 million and $620.4 million for 1998
and 1997. Premiums ceded and reinsurance recoveries made in 1999 totaled $476.5
million and $513.4 million, respectively, and in 1998 totaled $153.4 million
and $70.5 million, respectively.
F-13
<PAGE>
Notes to Consolidated Financial Statements (continued)
4. Investments
Debt securities available for sale as of December 31 were as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
1999 (Millions) Cost Gains Losses Value
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. government and government agencies
and authorities $ 1,087.2 $ 4.6 $ 22.1 $ 1,069.7
States, municipalities and political subdivisions 0.3 -- -- 0.3
U.S. corporate securities:
Utilities 514.5 5.6 12.7 507.4
Financial 1,869.8 8.2 44.7 1,833.3
Transportation/capital goods 623.4 .9 39.0 585.3
Health care/consumer products 1,138.7 9.3 51.3 1,096.7
Natural resources 424.6 1.3 15.4 410.5
Other corporate securities 214.0 1.0 14.9 200.1
- ----------------------------------------------------------------------------------------------------------------
Total U.S. corporate securities 4,785.0 26.3 178.0 4,633.3
- ----------------------------------------------------------------------------------------------------------------
Foreign securities:
Government, including political subdivisions 364.6 17.1 11.9 369.8
Utilities 196.4 7.3 .4 203.3
Other 748.2 8.9 34.3 722.8
- ----------------------------------------------------------------------------------------------------------------
Total foreign securities 1,309.2 33.3 46.6 1,295.9
- ----------------------------------------------------------------------------------------------------------------
Residential mortgage-backed securities:
Pass-throughs 1,055.9 19.8 17.6 1,058.1
Collateralized mortgage obligations 1,683.1 25.1 37.7 1,670.5
- ----------------------------------------------------------------------------------------------------------------
Total residential mortgage-backed securities 2,739.0 44.9 55.3 2,728.6
- ----------------------------------------------------------------------------------------------------------------
Commercial/Multifamily mortgage-backed
securities 1,031.5 3.4 48.7 986.2
Other asset-backed securities 705.7 0.3 9.9 696.1
- ----------------------------------------------------------------------------------------------------------------
Total debt securities $ 11,657.9 $ 112.8 $ 360.6 $ 11,410.1
================================================================================================================
</TABLE>
F-14
<PAGE>
Notes to Consolidated Financial Statements (continued)
4. Investments (continued)
Debt securities available for sale as of December 31 were as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
1998 (Millions) Cost Gains Losses Value
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. government and government agencies
and authorities $ 718.9 $ 60.4 $ 0.2 $ 779.1
States, municipalities and political subdivisions 0.3 -- -- 0.3
U.S. corporate securities:
Utilities 615.2 29.8 4.1 640.9
Financial 2,260.2 94.6 5.6 2,349.2
Transportation/capital goods 580.8 33.0 1.1 612.7
Healthcare/consumer products 1,328.2 69.8 4.8 1,393.2
Natural resources 254.5 6.9 2.3 259.1
Other corporate securities 261.7 5.8 7.4 260.1
- ----------------------------------------------------------------------------------------------------------------
Total U.S. corporate securities 5,300.6 239.9 25.3 5,515.2
- ----------------------------------------------------------------------------------------------------------------
Foreign securities:
Government, including political subdivisions 507.6 30.4 32.9 505.1
Utilities 147.0 32.4 -- 179.4
Other 511.2 14.9 1.8 524.3
- ----------------------------------------------------------------------------------------------------------------
Total foreign securities 1,165.8 77.7 34.7 1,208.8
- ----------------------------------------------------------------------------------------------------------------
Residential mortgage-backed securities:
Pass-throughs 671.9 38.4 2.9 707.4
Collateralized mortgage obligations 1,879.6 119.7 10.4 1,988.9
- ----------------------------------------------------------------------------------------------------------------
Total residential mortgage-backed securities 2,551.5 158.1 13.3 2,696.3
- ----------------------------------------------------------------------------------------------------------------
Commercial/Multifamily mortgage-backed
securities 1,114.9 30.9 9.8 1,136.0
Other asset-backed securities 719.3 13.8 0.6 732.5
- ----------------------------------------------------------------------------------------------------------------
Total debt securities $ 11,571.3 $ 580.8 $ 83.9 $ 12,068.2
================================================================================================================
</TABLE>
F-15
<PAGE>
Notes to Consolidated Financial Statements (continued)
4. Investments (continued)
At December 31, 1999 and 1998, net unrealized (depreciation) appreciation of
$(247.8) million and $496.9 million, respectively, on available-for-sale debt
securities included $(189.7) million and $355.8 million, respectively, related
to experience-rated contracts, which were not reflected in shareholder's equity
but in insurance reserves.
The amortized cost and fair value of debt securities for the year ended
December 31, 1999 are shown below by contractual maturity. Actual maturities
may differ from contractual maturities because securities may be restructured,
called, or prepaid.
<TABLE>
<CAPTION>
Amortized Fair
(Millions) Cost Value
- -------------------------------------------------------------------------
<S> <C> <C>
Due to mature:
One year or less $ 266.4 $ 266.5
After one year through five years 2,838.4 2,798.7
After five years through ten years 1,718.0 1,674.6
After ten years 2,351.4 2,250.1
Mortgage-backed securities 3,776.5 3,722.3
Other asset-backed securities 707.2 697.9
- -------------------------------------------------------------------------
Total $ 11,657.9 $ 11,410.1
=========================================================================
</TABLE>
At December 31, 1999 and 1998, debt securities carried at fair value of $8.7
million and $8.8 million, respectively, were on deposit as required by
regulatory authorities.
The Company did not have any investments in a single issuer, other than
obligations of the U.S. government, with a carrying value in excess of 10% of
the Company's shareholder's equity at December 31, 1999.
Included in the Company's debt securities were residential collateralized
mortgage obligations ("CMOs") supporting the following:
<TABLE>
<CAPTION>
1999 1998
----------------------------- --------------------------
Amortized Fair Amortized Fair
(Millions) Cost Value Cost Value
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total residential CMOs (1) $ 1,683.1 $ 1,670.5 $ 1,879.6 $ 1,988.9
=====================================================================================================
Percentage of total:
Supporting experience rated products 80.7% 81.7%
Supporting remaining products 19.3% 18.3%
- -----------------------------------------------------------------------------------------------------
100.0% 100.0%
=====================================================================================================
</TABLE>
(1) At December 31, 1999 and 1998, approximately 81% and 66%, respectively, of
the Company's residential CMO holdings were backed by government agencies
such as GNMA, FNMA, FHLMC.
F-16
<PAGE>
Notes to Consolidated Financial Statements (continued)
4. Investments (continued)
There are various categories of CMOs which are subject to different degrees of
risk from changes in interest rates and, for CMO's that are not agency-backed,
defaults. The principal risks inherent in holding CMOs are prepayment and
extension risks related to dramatic decreases and increases in interest rates
resulting in the repayment of principal from the underlying mortgages either
earlier or later than originally anticipated. At December 31, 1999 and 1998,
approximately 1% and 2%, respectively, of the Company's CMO holdings were
invested in types of CMOs which are subject to more prepayment and extension
risk than traditional CMOs (such as interest- or principal-only strips).
Investments in equity securities available for sale as of December 31 were as
follows:
<TABLE>
<CAPTION>
(Millions) 1999 1998
- ----------------------------------------------------
<S> <C> <C>
Amortized Cost $ 204.9 $ 300.4
Gross unrealized gains 12.5 13.1
Gross unrealized losses 10.9 8.1
- ----------------------------------------------------
Fair Value $ 206.5 $ 305.4
====================================================
</TABLE>
5. Financial Instruments
Estimated Fair Value
The carrying values and estimated fair values of certain of the Company's
financial instruments at December 31, 1999 and 1998 were as follows:
<TABLE>
<CAPTION>
1999 1998
-------------------------- ----------------------
Carrying Fair Carrying Fair
(Millions) Value Value Value Value
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets:
Mortgage loans $ 6.7 $ 6.8 $ 12.7 $ 12.3
Liabilities:
Investment contract liabilities:
With a fixed maturity 1,055.3 991.0 1,063.9 984.3
Without a fixed maturity 10,066.4 9,452.8 10,241.7 9,686.2
- ------------------------------------------------------------------------------------------
</TABLE>
Fair value estimates are made at a specific point in time, based on available
market information and judgments about the financial instrument, such as
estimates of timing and amount of future cash flows. Such estimates do not
reflect any premium or discount that could result from offering for sale at one
time the Company's entire holdings of a particular financial instrument, nor do
they consider the tax impact of the realization of unrealized gains or losses.
In many cases, the fair value estimates cannot be substantiated by comparison
to independent markets, nor can the disclosed value be realized in immediate
settlement of the instrument. In evaluating the Company's management of
interest rate, price and liquidity risks, the fair values of all assets and
liabilities should be taken into consideration, not only those presented above.
F-17
<PAGE>
Notes to Consolidated Financial Statements (continued)
5. Financial Instruments (continued)
The following valuation methods and assumptions were used by the Company in
estimating the fair value of the above financial instruments:
Mortgage loans: Fair values are estimated by discounting expected mortgage loan
cash flows at market rates which reflect the rates at which similar loans would
be made to similar borrowers. The rates reflect management's assessment of the
credit quality and the remaining duration of the loans.
Investment contract liabilities (included in Policyholders' funds left with the
Company):
With a fixed maturity: Fair value is estimated by discounting cash flows at
interest rates currently being offered by, or available to, the Company for
similar contracts.
Off-Balance-Sheet and Other Financial Instruments
Without a fixed maturity: Fair value is estimated as the amount payable to the
contractholder upon demand. However, the Company has the right under such
contracts to delay payment of withdrawals which may ultimately result in paying
an amount different than that determined to be payable on demand.
Futures Contracts:
Futures contracts are used to manage interest rate risk in the Company's bond
portfolio. Futures contracts represent commitments to either purchase or sell
securities at a specified future date and at a specified price or yield.
Futures contracts trade on organized exchanges and, therefore, have minimal
credit risk. Cash settlements are made daily based on changes in the prices of
the underlying assets. The notional amounts, carrying values and estimated fair
values of the Company's open treasury futures as of December 31, 1998 were
$250.9 million, $.1 million, and $.1 million, respectively. There were no open
treasury futures as of December 31, 1999.
Warrants:
Included in common stocks are warrants which are instruments giving the Company
the right, but not the obligation to buy a security at a given price during a
specified period. The carrying values and estimated fair values of the
Company's warrants to purchase equity securities as of December 31, 1999 were
both $6.5 million. The carrying values and estimated fair values as of December
31, 1998 were both $1.5 million.
Options:
During 1999, the Company earned $0.4 million of investment income for writing
call options on underlying securities. The Company did not write any call
options in 1998. As of December 31, 1999 and 1998, there were no option
contracts outstanding.
F-18
<PAGE>
Notes to Consolidated Financial Statements (continued)
5. Financial Instruments (continued)
Debt Instruments with Derivative Characteristics:
The Company also had investments in certain debt instruments with derivative
characteristics, including those whose market value is at least partially
determined by, among other things, levels of or changes in domestic and/or
foreign interest rates (short- or long-term), exchange rates, prepayment rates,
equity markets or credit ratings/spreads. The amortized cost and fair value of
these securities, included in the debt securities portfolio, as of December 31,
1999 was as follows:
<TABLE>
<CAPTION>
Amortized Fair
(Millions) Cost Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Residential collateralized mortgage obligations $ 1,683.1 $ 1,670.5
Principal-only strips (included above) 9.2 9.7
Interest-only strips (included above) 10.7 14.6
Other structured securities with derivative
characteristics (1) 81.7 67.2
- --------------------------------------------------------------------------------
</TABLE>
(1) Represents non-leveraged instruments whose fair values and credit risk are
based on underlying securities, including fixed income securities and
interest rate swap agreements.
6. Net Investment Income
Sources of net investment income were as follows:
<TABLE>
<CAPTION>
(Millions) 1999 1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Debt securities $ 823.3 $ 798.8 $ 814.6
Nonredeemable preferred stock 17.1 18.4 12.9
Investment in affiliated mutual funds 2.4 6.6 3.8
Mortgage loans 1.1 0.6 0.3
Policy loans 7.7 7.2 5.7
Reinsurance loan to affiliate -- 2.3 5.5
Cash equivalents 39.0 46.1 40.2
Other 15.3 13.2 16.1
- --------------------------------------------------------------------------------
Gross investment income 905.9 893.2 899.1
Less: investment expenses (19.6) (21.4) (17.4)
- --------------------------------------------------------------------------------
Net investment income $ 886.3 $ 871.8 $ 881.7
================================================================================
</TABLE>
Net investment income includes amounts allocable to experience rated
contractholders of $659.6 million, $655.6 million and $673.8 million for the
years ended December 31, 1999, 1998 and 1997, respectively. Interest credited
to contractholders is included in current and future benefits.
F-19
<PAGE>
Notes to Consolidated Financial Statements (continued)
7. Dividend Restrictions and Shareholder's Equity
The Company paid $255.0 million, $570.0 million and $34.3 million in cash
dividends to HOLDCO in 1999,1998 and 1997, respectively. Of the $255.0 million
paid in 1999, $206 million was accrued for in 1998. Of the $776.0 million
dividends paid or accrued in 1998, $756.0 million (all of which was approved by
the Insurance Commissioner of the State of Connecticut) was attributable to
proceeds from the sale of the domestic individual life insurance business.
The Department recognizes as net income and shareholder's capital and surplus
those amounts determined in conformity with statutory accounting practices
prescribed or permitted by the Department, which differ in certain respects
from generally accepted accounting principles. Statutory net income was $133.9
million, $148.1 million and $80.5 million for the years ended December 31,
1999, 1998 and 1997, respectively. Statutory capital and surplus was $845.2
million and $773.0 million as of December 31, 1999 and 1998, respectively.
As of December 31, 1999, the Company does not utilize any statutory accounting
practices which are not prescribed by state regulatory authorities that,
individually or in the aggregate, materially affect statutory capital and
surplus.
8. Capital Gains and Losses on Investment Operations
Realized capital gains or losses are the difference between the carrying value
and sale proceeds of specific investments sold.
Net realized capital (losses) gains on investments were as follows:
<TABLE>
<CAPTION>
(Millions) 1999 1998 1997
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Debt securities $ (23.6) $ 7.4 $ 21.1
Equity securities 2.1 3.0 8.6
- ----------------------------------------------------------------------------------
Pretax realized capital (losses) gains $ (21.5) $ 10.4 $ 29.7
==================================================================================
After-tax realized capital (losses) gains $ (14.0) $ 7.3 $ 19.2
==================================================================================
</TABLE>
Net realized capital (losses) gains of $(36.7) million, $15.0 million and $83.7
million for 1999, 1998 and 1997, respectively, allocable to experience rated
contracts, were deducted from net realized capital gains and an offsetting
amount was reflected in Policyholders' funds left with the Company. Net
unamortized gains allocable to experienced-rated contractholders were $68.5
million and $118.6 million at December 31, 1999 and 1998, respectively.
F-20
<PAGE>
Notes to Consolidated Financial Statements (continued)
8. Capital Gains and Losses on Investment Operations (continued)
Proceeds from the sale of available-for-sale debt securities and the related
gross gains and losses were as follows:
<TABLE>
<CAPTION>
(Millions) 1999 1998 1997
- ------------------------------------------------------------------
<S> <C> <C> <C>
Proceeds on sales $ 5,890.1 $ 6,790.2 $ 5,311.3
Gross gains 10.5 98.8 23.8
Gross losses 34.1 91.4 2.7
- ------------------------------------------------------------------
</TABLE>
Changes in shareholder's equity related to changes in accumulated other
comprehensive income (unrealized capital gains and losses on securities,
excluding those related to experience-rated contractholders) were as follows:
<TABLE>
<CAPTION>
(Millions) 1999 1998 1997
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Debt securities $ (199.2) $ 18.9 $ 44.3
Equity securities (3.4) (16.1) 5.6
Other (27.6) 15.4 --
- -------------------------------------------------------------------------------------
Subtotal (230.2) 18.2 49.9
(Decrease) increase in deferred income taxes
(Refer to note 9) (80.6) 6.3 17.5
- -------------------------------------------------------------------------------------
Net changes in accumulated other
comprehensive (loss) income $ (149.6) $ 11.9 $ 32.4
=====================================================================================
</TABLE>
Net unrealized capital (losses) gains allocable to experience-rated contracts
of $(189.7) and $355.8 million at December 31, 1999 and December 31, 1998
respectively, are reflected on the Consolidated Balance Sheets in
Policyholders' funds left with the Company and are not included in
shareholder's equity.
F-21
<PAGE>
Notes to Consolidated Financial Statements (continued)
8. Capital Gains and Losses on Investment Operations (continued)
Shareholder's equity included the following accumulated other comprehensive
(loss) income, which is net of amounts allocable to experience-rated
contractholders, at December 31:
<TABLE>
<CAPTION>
(Millions) 1999 1998 1997
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Debt securities:
Gross unrealized capital gains $ 18.6 $ 157.3 $ 140.6
Gross unrealized capital losses (76.7) (16.2) (18.4)
- -----------------------------------------------------------------------------------
(58.1) 141.1 122.2
- -----------------------------------------------------------------------------------
Equity securities:
Gross unrealized capital gains 12.5 13.1 21.2
Gross unrealized capital losses (10.9) (8.1) (0.1)
- -----------------------------------------------------------------------------------
1.6 5.0 21.1
- -----------------------------------------------------------------------------------
Other:
Gross unrealized capital gains 1.3 17.1 --
Gross unrealized capital losses (13.7) (1.8) --
- -----------------------------------------------------------------------------------
(12.4) 15.3 --
- -----------------------------------------------------------------------------------
Deferred income taxes (Refer to note 9) (24.1) 56.6 50.4
- -----------------------------------------------------------------------------------
Net accumulated other comprehensive (loss)
income $ (44.8) $ 104.8 $ 92.9
===================================================================================
</TABLE>
Changes in accumulated other comprehensive income related to changes in
unrealized gains (losses) on securities (excluding those related to
experience-rated contractholders) were as follows:
<TABLE>
<CAPTION>
(Millions) 1999 1998 1997
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Unrealized holding (losses) gains arising
during the year (1) $ (146.3) $ 38.3 $ 99.2
Less: reclassification adjustment for gains and
other items included in net income (2) 3.3 26.4 66.8
========================================================================================
Net unrealized (losses) gains on securities $ (149.6) $ 11.9 $ 32.4
========================================================================================
</TABLE>
(1) Pretax unrealized holding (losses) gains arising during the year were
$(225.2) million, $58.8 million and $152.7 million for 1999, 1998 and
1997, respectively.
(2) Pretax reclassification adjustments for gains and other items included in
net income were $5.0 million, $40.6 million and $102.8 million for 1999,
1998 and 1997, respectively.
F-22
<PAGE>
Notes to Consolidated Financial Statements (continued)
9. Income Taxes
The Company is included in the consolidated federal income tax return, the
combined New York return, and Illinois unitary state income tax return of
Aetna. Aetna allocates to each member, as permitted under a tax sharing
arrangement, an amount approximating the tax it would have incurred were it not
a member of the consolidated group, and credits the member for the use of its
tax saving attributes in the consolidated federal income tax return.
Income taxes from continuing operations consist of the following:
<TABLE>
<CAPTION>
(Millions) 1999 1998 1997
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Current taxes (benefits):
Federal $ 63.8 $ 257.4 $ 40.0
State 2.5 3.0 3.3
Net realized capital (losses) gains (20.1) 16.8 39.1
- -----------------------------------------------------------------------------
46.2 277.2 82.4
- -----------------------------------------------------------------------------
Deferred taxes (benefits):
Federal 31.3 (196.7) 14.3
Net realized capital gains (losses) 12.6 (13.9) (28.3)
- -----------------------------------------------------------------------------
43.9 (210.6) (14.0)
- -----------------------------------------------------------------------------
Total $ 90.1 $ 66.6 $ 68.4
=============================================================================
</TABLE>
Income taxes were different from the amount computed by applying the federal
income tax rate to income from continuing operations before income taxes for
the following reasons:
<TABLE>
<CAPTION>
(Millions) 1999 1998 1997
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income from continuing operations before
income taxes $ 271.3 $ 238.7 $ 236.3
Tax rate 35% 35% 35%
- ------------------------------------------------------------------------------------
Application of the tax rate 95.0 83.5 82.7
Tax effect of:
State income tax, net of federal benefit 1.6 2.0 2.1
Excludable dividends (6.1) (17.1) (15.6)
Other, net (0.4) (1.8) (0.8)
- ------------------------------------------------------------------------------------
Income taxes $ 90.1 $ 66.6 $ 68.4
=====================================================================================
</TABLE>
F-23
<PAGE>
Notes to Consolidated Financial Statements (continued)
9. Income Taxes (continued)
The tax effects of temporary differences that give rise to deferred tax assets
and deferred tax liabilities at December 31 are presented below:
<TABLE>
<CAPTION>
(Millions) 1999 1998
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Deferred tax assets:
Insurance reserves $ 323.1 $ 324.1
Unrealized gains allocable to experience rated contracts -- 124.5
Net unrealized capital losses 90.5 --
Investment losses 1.3 --
Postretirement benefits other than pensions 24.8 27.6
Deferred compensation 42.5 37.3
Sale of individual life 44.9 48.9
Other 20.2 20.4
- ---------------------------------------------------------------------------------------
Total gross assets 547.3 582.8
- ---------------------------------------------------------------------------------------
Deferred tax liabilities:
Deferred policy acquisition costs 324.0 282.9
Market discount 6.5 4.5
Net unrealized capital gains -- 181.1
Unrealized losses allocable to experience rated contracts 66.4 --
- ---------------------------------------------------------------------------------------
Total gross liabilities 396.9 468.5
- ---------------------------------------------------------------------------------------
Net deferred tax asset $ 150.4 $ 114.3
=======================================================================================
</TABLE>
Net unrealized capital gains and losses are presented in shareholder's equity
net of deferred taxes.
Management believes that it is more likely than not that the Company will
realize the benefit of the net deferred tax asset. The Company expects
sufficient taxable income in the future to realize the net deferred tax asset
because of the Company's long-term history of having taxable income, which is
projected to continue.
The "Policyholders' Surplus Account," which arose under prior tax law, is
generally that portion of a life insurance company's statutory income that has
not been subject to taxation. As of December 31, 1983, no further additions
could be made to the Policyholders' Surplus Account for tax return purposes
under the Deficit Reduction Act of 1984. The balance in such account was
approximately $17.2 million at December 31, 1999. This amount would be taxed
only under certain conditions. No income taxes have been provided on this
amount since management believes under current tax law the conditions under
which such taxes would become payable are remote.
The Internal Revenue Service (the "Service") has completed examinations of the
consolidated federal income tax returns of Aetna through 1994. Discussions are
being held with the Service with respect to proposed adjustments. Management
believes there are adequate defenses against, or sufficient reserves to provide
for, any such adjustments. The Service has commenced its examinations for the
years 1995 through 1997.
F-24
<PAGE>
Notes to Consolidated Financial Statements (continued)
10. Benefit Plans
Aetna has noncontributory defined benefit pension plans covering substantially
all employees. Aetna's accrued pension cost has been allocated to its
subsidiaries, including the Company, under an allocation based on eligible
salaries. Data on a separate company basis regarding the proportionate share of
the projected benefit obligation and plan assets is not available. The
accumulated benefit obligation and plan assets are recorded by Aetna. As of the
measurement date (September 30), fair value of plan assets exceed projected
benefit obligations. Allocated pretax charges to operations for the pension
plan (based on the Company's total salary cost as a percentage of Aetna's total
salary cost) were $6.6 million and $3.0 million for the years ended December
31, 1999 and 1997, respectively. There were no charges in 1998 due to favorable
plan asset performance.
Effective January 1, 1999, the Company, in conjunction with Aetna, changed the
formula from the previous final average pay formula to a cash balance formula,
which will credit employees annually with an amount equal to a percentage of
eligible pay based on age and years of service as well as an interest credit
based on individual account balances. The formula also provides for a
transition period until December 1, 2006, which allows certain employees to
receive vested benefits at the higher of the final average pay or cash balance
formula. The changing of this formula did not have a material effect on the
Company's results of operations, liquidity or financial condition.
In addition to providing pension benefits, Aetna currently provides certain
health care and life insurance benefits for retired employees. A comprehensive
medical and dental plan is offered to all full-time employees retiring at age
45 with 10 years of service. The company provides subsidized benefits to
employees whose sum of age and service is at least equal to 65. There is a cap
on the portion of the cost paid by the Company relating to medical and dental
benefits. The costs to the Company associated with the Aetna postretirement
plans for 1999, 1998 and 1997 were $2.1 million, $1.0 million and $2.4 million,
respectively.
The Company, in conjunction with Aetna, has a non-qualified pension plan
covering certain agents. The plan provides pension benefits based on annual
commission earnings. As of the measurement date (September 30), accumulated
benefit obligations exceeded fair value of plan assets.
The Company, in conjunction with Aetna, also provides certain postretirement
health care and life insurance benefits for certain agents. The costs to the
Company associated with the agents' postretirement plans for 1999, 1998 and
1997 were $2.1 million, $1.4 million and $0.6 million, respectively.
Incentive Savings Plan--Substantially all employees are eligible to participate
in a savings plan under which designated contributions, which may be invested
in common stock of Aetna or certain other investments, are matched, up to 5% of
compensation, by Aetna. Pretax charges to operations for the incentive savings
plan were $7.7 million, $5.3 million and $5.0 million in 1999, 1998 and 1997,
respectively.
Stock Plans--Aetna has a stock incentive plan that provides for stock options,
deferred contingent common stock or equivalent cash awards or restricted stock
to employees. Executive, middle
F-25
<PAGE>
Notes to Consolidated Financial Statements (continued)
10. Benefit Plans (continued)
management and non-management employees may be granted options to purchase
common stock of Aetna at or above the market price on the date of grant.
Options generally become 100% vested three years after the grant is made, with
one-third of the options vesting each year. Aetna does not recognize
compensation expense for stock options granted at or above the market price on
the date of grant under its stock incentive plans. In addition, executives may,
from time to time, be granted incentive units which are rights to receive
common stock or an equivalent value in cash. The incentive units may vest
within a range from 0% to 175% at the end of a four year period based on the
attainment of performance goals. The costs to the Company associated with the
Aetna stock plans for 1999, 1998 and 1997, were $0.4 million, $4.2 million and
$2.9 million, respectively.
11. Related Party Transactions
Investment Advisory and Other Fees
The Company serves as investment advisor to the Aetna managed mutual funds and
variable funds (collectively, the Funds). Under the advisory agreements, the
Funds pay the Company a daily fee which, on an annual basis, ranged, depending
on the fund, from 0.25% to 0.95% of their average daily net assets. The Company
is also compensated by the Separate Accounts (variable funds) for bearing
mortality and expense risks pertaining to variable life and annuity contracts.
Under the insurance and annuity contracts, the Separate Accounts pay the
Company a daily fee which, on an annual basis is, depending on the product, up
to 2.15% of their average daily net assets. The amount of compensation and fees
received from the Funds and Separate Accounts, included in charges assessed
against policyholders and other income, amounted to $424.2 million, $349.0
million and $271.2 million in 1999, 1998 and 1997, respectively.
Reinsurance Transactions
Effective December 31, 1988, the Company entered into a modified coinsurance
reinsurance agreement ("MODCO") with Aetna Life Insurance Company ("Aetna
Life"), an affiliate company, in which substantially all of the
non-participating individual life and annuity business written by Aetna Life
prior to 1981 was assumed by the Company. Effective January 1, 1997, this
agreement was amended to transition (based on underlying investment rollover in
Aetna Life) from a modified coinsurance arrangement to a coinsurance agreement.
As a result of this change, reserves were ceded to the Company from Aetna Life
as investment rollover occurred. Effective October 1, 1998, this agreement was
fully transitioned to a coinsurance arrangement and this business along with
the Company's direct individual non-participation life insurance business was
sold to Lincoln. (Refer to note 3).
The operating results of the domestic individual life business are presented as
Discontinued Operations. Premiums of $17.9 million, $336.3 million and $176.7
million and current and future benefits of $8.6 million, $341.1 million and
$183.9 million, were assumed in 1999, 1998 and 1997, respectively. Investment
income of $17.0 million and $37.5 million was generated from a reinsurance loan
to affiliate for the years ended December 31, 1998 and 1997, respectively.
Prior to the sale of the domestic individual life insurance business to Lincoln
on October 1, 1998, the Company's retention limit per individual life was $2.0
million and amounts in excess of this
F-26
<PAGE>
Notes to Consolidated Financial Statements (continued)
11. Related Party Transactions (continued)
limit, up to a maximum of $8.0 million on any new individual life business was
reinsured with Aetna Life on a yearly renewable term basis. Premium amounts
related to this agreement were $2.0 million and $5.9 million for 1998 and 1997,
respectively. This agreement was terminated effective October 1, 1998.
Effective October 1, 1997, the Company entered into a reinsurance agreement
with Aetna Life to assume amounts in excess of $0.2 million for certain of its
participating life insurance, on a yearly renewable term basis. Premium amounts
related to this agreement were $4.4 million in1998. The business assumed under
this agreement was retroceded to Lincoln effective October 1, 1998.
On December 16, 1988, the Company assumed $25.0 million of premium revenue from
Aetna Life for the purchase and administration of a life contingent single
premium variable payout annuity contract. In addition, the Company is also
responsible for administering fixed annuity payments that are made to
annuitants receiving variable payments. Reserves of $115.3 million and $87.8
million were maintained for this contract as of December 31, 1999 and 1998,
respectively.
Capital Transactions
The Company received no capital contributions in 1999. In 1998, the Company
received a capital contribution of $9.3 million in cash from HOLDCO. In 1997,
the Company returned capital of $5.0 million to HOLDCO.
Refer to note 7 for dividends paid to HOLDCO.
Other
Premiums due and other receivables include $10.5 million and $1.6 million due
from affiliates in 1999 and 1998, respectively. Other liabilities include $1.9
million and $2.2 million due to affiliates for 1999 and 1998, respectively.
Aetna transferred to the Company $0.8 million, $1.7 million and $3.8 million
based on its decision not to settle state tax liabilities for the years 1999,
1998 and 1997, respectively, as permitted under the tax sharing arrangement,
which is reported in other changes in retained earnings.
Substantially all of the administrative and support functions of the Company
are provided by Aetna and its affiliates. The financial statements reflect
allocated charges for these services based upon measures appropriate for the
type and nature of service provided.
12. Reinsurance
On October 1, 1998, the Company sold its domestic individual life insurance
business to Lincoln for $1 billion in cash. The transaction is generally in the
form of an indemnity reinsurance arrangement, under which Lincoln contractually
assumed from the Company certain policyholder liabilities and obligations,
although the Company remains directly obligated to policyholders. (Refer to
note 3)
F-27
<PAGE>
Notes to Consolidated Financial Statements (continued)
12. Reinsurance (continued)
Effective January 1, 1998, 90% of the mortality risk on substantially all
individual universal life product business written from June 1, 1991 through
October 31, 1997 was reinsured externally. Beginning November 1, 1997, 90% of
new business written on these products was reinsured externally. Effective
October 1, 1998 this agreement was assigned from the third party reinsurer to
Lincoln.
The following table includes premium amounts ceded/assumed as discussed in note
11.
<TABLE>
<CAPTION>
Ceded to Assumed
Direct Other from Other Net
(Millions) Amount Companies Companies Amount
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1999
----
Premiums:
Discontinued Operations $ 460.1 $ 478.0 $ 17.9 $ --
Accident and Health Insurance 33.4 33.4 -- --
Annuities 111.5 4.9 .9 107.5
- ---------------------------------------------------------------------------------------
Total earned premiums $ 605.0 $ 516.3 $ 18.8 $ 107.5
=======================================================================================
1998
----
Premiums:
Discontinued Operations $ 166.8 $ 165.4 $ 340.6 $ 342.0
Accident and Health Insurance 16.3 16.3 -- --
Annuities 80.8 2.9 1.5 79.4
- ---------------------------------------------------------------------------------------
Total earned premiums $ 263.9 $ 184.6 $ 342.1 $ 421.4
=======================================================================================
1997
----
Premiums:
Discontinued Operations $ 35.7 $ 15.1 $ 177.4 $ 198.0
Accident and Health Insurance 5.6 5.6 -- --
Annuities 67.9 -- 1.2 69.1
- ---------------------------------------------------------------------------------------
Total earned premiums $ 109.2 $ 20.7 $ 178.6 $ 267.1
=======================================================================================
</TABLE>
F-28
<PAGE>
Notes to Consolidated Financial Statements (continued)
13. Segment Information
Summarized financial information for the Company's principal operations was as
follows:
<TABLE>
<CAPTION>
Investment
Year ended December 31, Financial Management Discontinued
1999 (Millions) Products (1) Services (1) Operations (1) Other (1) Total
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue from external
customers $ 551.1 $ 118.3 -- $ (43.9) $ 625.5
Net investment income 881.5 1.5 -- 3.3 886.3
- ---------------------------------------------------------------------------------------------------------
Total revenue excluding net
realized capital losses $ 1,432.6 $ 119.8 -- $ (40.6) $ 1,511.8
=========================================================================================================
Amortization of deferred policy
acquisition costs $ 93.4 $ 11.5 $ 104.9
- ---------------------------------------------------------------------------------------------------------
Income taxes (benefits) $ 87.0 $ 16.5 $ (13.4) $ 90.1
- ---------------------------------------------------------------------------------------------------------
Operating earnings (losses) (2) $ 192.1 $ 28.1 -- $ (7.5) $ 212.7
Other item (3) -- -- (17.5) (17.5)
Net realized capital losses,
net of tax (14.0) -- -- (14.0)
- ---------------------------------------------------------------------------------------------------------
Income (loss) from continuing
operations 178.1 28.1 -- (25.0) 181.2
Discontinued operations,
net of tax:
Amortization of deferred
gain on sale -- $ 5.7 -- 5.7
- ---------------------------------------------------------------------------------------------------------
Net income (loss) $ 178.1 $ 28.1 $ 5.7 $ (25.0) $ 186.9
=========================================================================================================
Segment assets $ 53,324.4 $ 73.2 $ 2,989.0 $ 56,386.6
- ---------------------------------------------------------------------------------------------------------
Expenditures for long-lived
assets (4) -- -- -- $ 5.7 $ 5.7
- ---------------------------------------------------------------------------------------------------------
Balance of long-lived assets -- -- -- $ 16.5 $ 16.5
- ---------------------------------------------------------------------------------------------------------
</TABLE>
(1) Financial Products include: deferred and immediate annuity contracts,
mutual funds, programs offered to qualified plans and nonqualified
deferred compensation plans that package administrative and recordkeeping
services along with a menu of investment options, investment advisory
services and pension plan administrative services. Investment Management
Services include the following services: investment advisory to affiliated
and unaffiliated institutional and retail clients, underwriting,
distribution for Company products and trustee, administrative and other
fiduciary services to retirement plans. (Refer to notes 1 and 2.)
Discontinued operations include life insurance products. (Refer to note
3.) Other includes consolidating adjustments and Year 2000 costs.
(2) Operating earnings is comprised of net income (loss) excluding net
realized capital gains and losses and any other items. While operating
earnings is the measure of profit or loss used by the Company's management
when assessing performance or making operating decisions, it does not
replace operating income or net income as a measure of profitability.
(3) Other item excluded from operating earnings represents after-tax Year 2000
costs of $17.5 million
(4) Expenditures of long-lived assets represents additions to property and
equipment not allocable to business segments.
F-29
<PAGE>
Notes to Consolidated Financial Statements (continued)
13. Segment Information (continued)
<TABLE>
<CAPTION>
Investment
Year ended December 31, Financial Management Discontinued
1998 (Millions) Products (1) Services (1) Operations (1) Other (1) Total
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue from external
customers $ 445.6 $ 96.7 -- $ (38.4) $ 503.9
Net investment income 865.3 1.5 -- 5.0 871.8
- --------------------------------------------------------------------------------------------------------
Total revenue excluding net
realized capital gains $ 1,310.9 $ 98.2 -- $ (33.4) $ 1,375.7
========================================================================================================
Amortization of deferred policy
acquisition costs $ 80.3 -- -- $ 10.9 $ 91.2
- --------------------------------------------------------------------------------------------------------
Income Taxes (benefits) $ 67.7 $ 14.7 -- $ (15.8) $ 66.6
- --------------------------------- ---------- ------- -- ------- ----------
Operating earnings (2) $ 170.3 $ 24.0 -- $ (7.1) $ 187.2
Other item (3) -- -- -- (22.4) (22.4)
Net realized capital gains,
net of tax 7.3 -- -- -- 7.3
- --------------------------------------------------------------------------------------------------------
Income from continuing
operations 177.6 24.0 -- (29.5) 172.1
Discontinued operations,
net of tax:
Income from operations -- -- $ 61.8 -- 61.8
Immediate gain on sale -- -- 59.0 -- 59.0
- --------------------------------------------------------------------------------------------------------
Net income (loss) $ 177.6 $ 24.0 $ 120.8 $ (29.5) $ 292.9
========================================================================================================
Segment assets $ 44,366.4 $ 13.4 $ 2,946.4 $ 47,326.2
- --------------------------------------------------------------------------------------------------------
Expenditures for long-lived
assets (4) -- -- -- $ 9.0 $ 9.0
- --------------------------------------------------------------------------------------------------------
Balance of long-lived assets $ 14.8 $ 14.8
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) Financial products include: deferred and immediate annuity contracts,
mutual funds, programs offered to qualified plans and nonqualified
deferred compensation plans that package administrative and recordkeeping
services along with a menu of investment options, investment advisory
services and pension plan administrative services. Investment Management
Services include the following services: investment advisory to affiliated
and unaffiliated institutional and retail clients, underwriting,
distribution for Company products and trustee, administrative and other
fiduciary services to retirement plans. (Refer to notes 1 and 2.)
Discontinued operations include life insurance products. (Refer to note
3.) Other includes consolidating adjustments and Year 2000 costs.
(2) Operating earnings is comprised of net income (loss) excluding net
realized capital gains and losses and any other items. While operating
earnings is the measure of profit or loss used by the Company's management
when assessing performance or making operating decisions, it does not
replace operating income or net income as a measure of profitability.
(3) Other item excluded from operating earnings represents after-tax Year 2000
costs of $22.4 million
(4) Expenditures of long-lived assets represents additions to property and
equipment not allocable to business segments.
F-30
<PAGE>
Notes to Consolidated Financial Statements (continued)
13. Segment Information (continued)
<TABLE>
<CAPTION>
Investment
Year ended December 31, Financial Management Discontinued
1997 (Millions) Products (1) Services (1) Operations (1) Other (1) Total
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue from external
customers $ 371.5 $80.3 -- $(23.9) $ 427.9
Net investment income 876.7 1.4 -- 3.6 881.7
- --------------------------------------------------------------------------------------------------------
Total revenue excluding net
realized capital gains $ 1,248.2 $81.7 -- $(20.3) $ 1,309.6
========================================================================================================
Amortization of deferred policy
acquisition costs $ 57.2 -- -- $ 9.1 $ 66.3
- --------------------------------------------------------------------------------------------------------
Income Taxes (benefits) $ 59.7 $11.9 -- $ (3.2) $ 68.4
- --------------------------------------------------------------------------------------------------------
Operating earnings (2) $ 134.9 $19.7 -- $ (5.9) $ 148.7
Net realized capital gains,
net of tax 19.2 -- -- -- 19.2
- --------------------------------------------------------------------------------------------------------
Income from continuing
operations 154.1 $19.7 -- (5.9) 167.9
Discontinued operations,
net of tax:
Income from operations -- -- $ 67.8 -- 67.8
Deferred gain on sale -- -- -- -- --
- --------------------------------------------------------------------------------------------------------
Net income (loss) $ 154.1 $19.7 $ 67.8 $ (5.9) $ 235.7
========================================================================================================
Segment assets $ 36,379.5 $17.9 $ 3,792.5 -- $ 40,189.9
- --------------------------------------------------------------------------------------------------------
Expenditures for long-lived
assets (3) -- -- -- $ 10.0 $ 10.0
- --------------------------------------------------------------------------------------------------------
Balance of long-lived assets $ 12.7 $ 12.7
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) Financial products include: deferred and immediate annuity contracts,
mutual funds, programs offered to qualified plans and nonqualified
deferred compensation plans that package administrative and recordkeeping
services along with a menu of investment options, investment advisory
services and pension plan administrative services. Investment Management
Services include the following services: investment advisory to affiliated
and unaffiliated institutional and retail clients, underwriting,
distribution for Company products and trustee, administrative and other
fiduciary services to retirement plans. (Refer to notes 1 and 2.)
Discontinued operations include life insurance products. (Refer to note
3.) Other includes consolidating adjustments and Year 2000 costs.
(2) Operating earnings is comprised of net income (loss) excluding net
realized capital gains and losses and any other items. While operating
earnings is the measure of profit or loss used by the Company's management
when assessing performance or making operating decisions, it does not
replace operating income or net income as a measure of profitability.
(3) Expenditures of long-lived assets represents additions to property and
equipment not allocable to business segments.
F-31
<PAGE>
Notes to Consolidated Financial Statements (continued)
14. Commitments and Contingent Liabilities
Commitments
Through the normal course of investment operations, the Company commits to
either purchase or sell securities or money market instruments at a specified
future date and at a specified price or yield. The inability of counterparties
to honor these commitments may result in either higher or lower replacement
cost. Also, there is likely to be a change in the value of the securities
underlying the commitments. At December 31,1998, the Company had off-balance
sheet commitments to purchase investments of $68.7 million with an estimated
fair value of $68.9 million. At December 31, 1999, there were no off-balance
sheet commitments.
Litigation
The Company is involved in numerous lawsuits arising, for the most part, in the
ordinary course of its business operations. While the ultimate outcome of
litigation against the Company cannot be determined at this time, after
consideration of the defenses available to the Company and any related reserves
established, it is not expected to result in liability for amounts material to
the financial condition of the Company, although it may adversely affect
results of operations in future periods.
F-32
<PAGE>
Form No. SAI. 75988-00 ALIAC Ed. May 2000
<PAGE>
VARIABLE ANNUITY ACCOUNT C
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
(1) Included in Part A:
Condensed Financial Information
(2) Included in Part B:
Financial Statements of Variable Annuity Account C:
- Statement of Assets and Liabilities as of December 31, 1999
- Statement of Operations for the year ended December 31, 1999
- Statements of Changes in Net Assets for the years ended December
31, 1999 and 1998
- Condensed Financial Information for the year ended December 31,
1999
- Notes to Financial Statements
- Independent Auditors' Report
Financial Statements of the Depositor:
- Independent Auditors' Report
- Consolidated Statements of Income for the years ended
December 31, 1999, 1998 and 1997
- Consolidated Balance Sheets as of December 31, 1999 and 1998
- Consolidated Statements of Changes in Shareholder's Equity
for the years ended December 31, 1999, 1998 and 1997
- Consolidated Statements of Cash Flows for the years ended
December 31, 1999, 1998 and 1997
- Notes to Consolidated Financial Statements
(b) Exhibits
(1) Resolution of the Board of Directors of Aetna Life Insurance and
Annuity Company establishing Variable Annuity Account C(1)
(2) Not applicable
(3.1) Broker-Dealer Agreement(2)
(3.2) Alternative Form of Wholesaling Agreement and Related Selling
Agreement(3)
(4.1) Variable Annuity Contracts (IRA-CDA-IC) and (IP-CDA-IB)(4)
(4.2) Endorsements (EIRA-SDOIC-97) and (EIRA-SDOIC-97(NY)) to Variable
Annuity Contract IRA-CDA-IC(5)
(4.3) Endorsement (EIP-SDOIB-97) to Variable Annuity Contract
IP-CDA-IB(5)
(4.4) Endorsement (EPIRA-GI-98) to Contract IRA-CDA-IC(6)
(4.5) Endorsement (EIGET-IC[RegTM]) to Contracts IRA-CDA-IC and
IP-CDA-IB(7)
(4.6) Endorsement (EGET-99) to Contracts IRA-CDA-IC and IP-CDA-IB(8)
(4.7) Contract Schedule (IROPIRA-99) to Contract IRA-CDA-IC(9)
(4.8) Contract Schedule (IROIRA-99) to Contract IRA-CDA-IC(9)
(4.9) Contract Schedule (IMSIRA-99) to Contract IRA-CDA-IC(9)
(5.1) Variable Annuity Contract Application (304.00.1A)(10)
<PAGE>
(5.2) Variable Annuity Contract Application (703.00.1A)(11)
(5.3) Variable Annuity Contract Application (75988-97)(12)
(6.1) Certificate of Incorporation of Aetna Life Insurance and Annuity
Company(13)
(6.2) Amendment of Certificate of Incorporation of Aetna Life Insurance
and Annuity Company(14)
(6.3) By-Laws as amended September 17, 1997 of Aetna Life Insurance and
Annuity Company(15)
(7) Not applicable
(8.1) Fund Participation Agreement between Aetna Life Insurance and
Annuity Company and AIM dated June 30, 1998(16)
(8.2) Service Agreement between Aetna Life Insurance and Annuity Company
and AIM effective June 30, 1998(16)
(8.3) Fund Participation Agreement by and among Aetna Life Insurance and
Annuity Company and Aetna Variable Fund, Aetna Variable Encore
Fund, Aetna Income Shares, Aetna Balanced VP, Inc., Aetna GET Fund
on behalf of each of its series, Aetna Generation Portfolios, Inc.
on behalf of each of its series, Aetna Variable Portfolios, Inc. on
behalf of each of its series, and Aeltus Investment Management,
Inc. dated as of May 1, 1998(2)
(8.4) Amendment dated November 9, 1998 to Fund Participation Agreement by
and among Aetna Life Insurance and Annuity Company and Aetna
Variable Fund, Aetna Variable Encore Fund, Aetna Income Shares,
Aetna Balanced VP, Inc., Aetna GET Fund on behalf of each of its
series, Aetna Generation Portfolios, Inc. on behalf of each of its
series, Aetna Variable Portfolios, Inc. on behalf of each of its
series, and Aeltus Investment Management, Inc. dated as of May 1,
1998(17)
(8.5) Second Amendment dated December 31, 1999 to Fund Participation
Agreement by and among Aetna Life Insurance and Annuity Company and
Aetna Variable Fund, Aetna Variable Encore Fund, Aetna Income
Shares, Aetna Balanced VP, Inc., Aetna GET Fund on behalf of each
of its series, Aetna Generation Portfolios, Inc. on behalf of each
of its series, Aetna Variable Portfolios, Inc. on behalf of each of
its series, and Aeltus Investment Management, Inc. dated as of May
1, 1998 and amended on November 9, 1998(18)
(8.6) Third Amendment dated February 11, 2000 to Fund Participation
Agreement by and among Aetna Life Insurance and Annuity Company and
Aetna Variable Fund, Aetna Variable Encore Fund, Aetna Income
Shares, Aetna Balanced VP, Inc., Aetna GET Fund on behalf of each
of its series, Aetna Generation Portfolios, Inc. on behalf of each
of its series, Aetna Variable Portfolios, Inc. on behalf of each of
its series, and Aeltus Investment Management, Inc. dated as of May
1, 1998 and amended on November 9, 1998 and December 31, 1999(19)
(8.7) Fourth Amendment dated May 1, 2000 to Fund Participation Agreement
by and among Aetna Life Insurance and Annuity Company and Aetna
Variable Fund, Aetna Variable Encore Fund, Aetna Income Shares,
Aetna Balanced VP, Inc., Aetna GET Fund on behalf of each of its
series, Aetna Generation Portfolios, Inc. on behalf of each of its
series, Aetna Variable Portfolios, Inc. on behalf of each of
<PAGE>
its series, and Aeltus Investment Management, Inc. dated as of May
1, 1998 and amended on November 9, 1998, December 31, 1999 and
February 11, 2000(19)
(8.8) Service Agreement between Aeltus Investment Management, Inc. and
Aetna Life Insurance and Annuity Company in connection with the
sale of shares of Aetna Variable Fund, Aetna Variable Encore Fund,
Aetna Income Shares, Aetna Balanced VP, Inc., Aetna GET Fund on
behalf of each of its series, Aetna Generation Portfolios, Inc. on
behalf of each of its series, and Aetna Variable Portfolios, Inc.
on behalf of each of its series dated as of May 1, 1998(2)
(8.9) Amendment dated November 4, 1998 to Service Agreement between
Aeltus Investment Management, Inc. and Aetna Life Insurance and
Annuity Company in connection with the sale of shares of Aetna
Variable Fund, Aetna Variable Encore Fund, Aetna Income Shares,
Aetna Balanced VP, Inc., Aetna GET Fund on behalf of each of its
series, Aetna Generation Portfolios, Inc. on behalf of each of its
series and Aetna Variable Portfolios, Inc. on behalf of each of
its series dated as of May 1, 1998(17)
(8.10) Second Amendment dated February 11, 2000 to Service Agreement
between Aeltus Investment Management, Inc. and Aetna Life Insurance
and Annuity Company in connection with the sale of shares of Aetna
Variable Fund, Aetna Variable Encore Fund, Aetna Income Shares,
Aetna Balanced VP, Inc., Aetna GET Fund on behalf of each of its
series, Aetna Generation Portfolios, Inc. on behalf of each of its
series and Aetna Variable Portfolios, Inc. on behalf of each of its
series dated as of May 1, 1998 and November 14, 1998(19)
(8.11) Third Amendment dated May 1, 2000 to Service Agreement between
Aeltus Investment Management, Inc. and Aetna Life Insurance and
Annuity Company in connection with the sale of shares of Aetna
Variable Fund, Aetna Variable Encore Fund, Aetna Income Shares,
Aetna Balanced VP, Inc., Aetna GET Fund on behalf of each of its
series, Aetna Generation Portfolios, Inc. on behalf of each of its
series and Aetna Variable Portfolios, Inc. on behalf of each of its
series dated as of May 1, 1998, November 14, 1998 and February 11,
2000(19)
(8.12) Fund Participation Agreement among Calvert Responsibly Invested
Balanced Portfolio, Calvert Asset Management Company, Inc. and
Aetna Life Insurance and Annuity Company dated December 1, 1997(20)
(813) Service Agreement between Calvert Asset Management Company, Inc.
and Aetna Life Insurance and Annuity Company dated December 1,
1997(20)
(8.14) Fund Participation Agreement between Aetna Life Insurance and
Annuity Company, Variable Insurance Products Fund and Fidelity
Distributors Corporation dated February 1, 1994 and amended on
December 15, 1994, February 1, 1995, May 1, 1995, January 1, 1996
and March 1, 1996(15)
(8.15) Fifth Amendment dated as of May 1, 1997 to the Fund Participation
Agreement between Aetna Life Insurance and Annuity Company,
Variable Insurance Products Fund and Fidelity Distributors
Corporation dated February 1, 1994 and amended on December 15,
1994, February 1, 1996, May 1, 1995, January 1, 1996 and March 1,
1996(21)
<PAGE>
(8.16) Sixth Amendment dated November 6, 1997 to the Fund Participation
Agreement between Aetna Life Insurance and Annuity Company,
Variable Insurance Products Fund and Fidelity Distributors
Corporation dated February 1, 1994 and amended on December 15,
1994, February 1, 1995, May 1, 1995, January 1, 1996, March 1, 1996
and May 1, 1997(22)
(8.17) Seventh Amendment dated as of May 1, 1998 to the Fund Participation
Agreement between Aetna Life Insurance and Annuity Company,
Variable Insurance Products Fund and Fidelity Distributors
Corporation dated February 1, 1994 and amended on December 15,
1994, February 1, 1995, May 1, 1995, January 1, 1996, March 1,
1996, May 1, 1997 and November 6, 1997(2)
(8.18) Eighth Amendment dated December 1, 1999 to Fund Participation
Agreement between Aetna Life Insurance and Annuity Company,
Variable Insurance Products Fund and Fidelity Distributors
Corporation dated February 1, 1994 and amended on December 15,
1994, February 1, 1995, May 1, 1995, January 1, 1996, March 1,
1996, May 1, 1997, November 6, 1997 and May 1, 1998(18)
(8.19) Fund Participation Agreement between Aetna Life Insurance and
Annuity Company, Variable Insurance Products Fund II and Fidelity
Distributors Corporation dated February 1, 1994 and amended on
December 15, 1994, February 1, 1995, May 1, 1995, January 1, 1996
and March 1, 1996(15)
(8.20) Fifth Amendment dated as of May 1, 1997 to the Fund Participation
Agreement between Aetna Life Insurance and Annuity Company,
Variable Insurance Products Fund II and Fidelity Distributors
Corporation dated February 1, 1994 and amended on December 15,
1994, February 1, 1996, May 1, 1995, January 1, 1996 and March 1,
1996(21)
(8.21) Sixth Amendment dated as of January 20, 1998 to the Fund
Participation Agreement between Aetna Life Insurance and Annuity
Company, Variable Insurance Products Fund II and Fidelity
Distributors Corporation dated February 1, 1994 and amended on
December 15, 1994, February 1, 1995, May 1, 1995, January 1, 1996,
March 1, 1996 and May 1, 1997(23)
(8.22) Seventh Amendment dated as of May 1, 1998 to the Fund Participation
Agreement between Aetna Life Insurance and Annuity Company,
Variable Insurance Products Fund II and Fidelity Distributors
Corporation dated February 1, 1994 and amended on December 15,
1994, February 1, 1995, May 1, 1995, January 1, 1996, March 1,
1996, May 1, 1997 and January 20, 1998(2)
(8.23) Eighth Amendment dated December 1, 1999 to Fund Participation
Agreement between Aetna Life Insurance and Annuity Company,
Variable Insurance Products Fund II and Fidelity Distributors
Corporation dated February 1, 1994 and amended on December 15,
1994, February 1, 1995, May 1, 1995, January 1, 1996, March 1,
1996, May 1, 1997, January 20, 1998 and May 1, 1998(18)
(8.24) Service Agreement between Aetna Life Insurance and Annuity Company
and Fidelity Investments Institutional Operations Company dated as
of November 1, 1995(24)
<PAGE>
(8.25) Amendment dated January 1, 1997 to Service Agreement between Aetna
Life Insurance and Annuity Company and Fidelity Investments
Institutional Operations Company dated as of November 1, 1995(21)
(8.26) Service Contract between Fidelity Distributors Corporation and
Aetna Life Insurance and Annuity Company dated May 2, 1997(17)
(8.27) Fund Participation Agreement among Janus Aspen Series and Aetna
Life Insurance and Annuity Company and Janus Capital Corporation
dated December 8, 1997(25)
(8.28) Amendment dated October 12, 1998 to Fund Participation Agreement
among Janus Aspen Series and Aetna Life Insurance and Annuity
Company and Janus Capital Corporation dated December 8, 1997(17)
(8.29) Second Amendment dated December 1, 1999 to Fund Participation
Agreement among Janus Aspen Series and Aetna Life Insurance and
Annuity Company and Janus Capital Corporation dated December 8,
1997 and amended on October 12, 1998(18)
(8.30) Service Agreement between Janus Capital Corporation and Aetna Life
Insurance and Annuity Company dated December 8, 1997(25)
(8.31) Fund Participation Agreement dated March 11, 1997 between Aetna
Life Insurance and Annuity Company and Oppenheimer Variable Annuity
Account Funds and Oppenheimer Funds, Inc.(26)
(8.32) First Amendment dated December 1, 1999 to Fund Participation
Agreement between Aetna Life Insurance and Annuity Company and
Oppenheimer Variable Annuity Account Funds and Oppenheimer Funds,
Inc. dated March 11, 1997(18)
(8.33) Service Agreement effective as of March 11, 1997 between
Oppenheimer Funds, Inc. and Aetna Life Insurance and Annuity
Company(26)
(9) Opinion and Consent of Counsel
(10) Consent of Independent Auditors
(11) Not applicable
(12) Not applicable
(13) Schedule for Computation of Performance Data(11)
(14.1) Powers of Attorney(19)
(14.2) Authorization for Signatures(3)
1. Incorporated by reference to Post-Effective Amendment No. 6 to
Registration Statement on Form N-4 (File No. 33-75986), as filed on April
22, 1996.
2. Incorporated by reference to Registration Statement on Form N-4 (File No.
333-56297) as filed on June 8, 1998.
3. Incorporated by reference to Post-Effective Amendment No. 5 to
Registration Statement on Form N-4 (File No. 33-75986), as filed on April
12, 1996.
4. Incorporated by reference to Post-Effective Amendment No. 4 to
Registration Statement on Form N-4 (File No. 33-75988), as filed on April
15, 1996.
5. Incorporated by reference to Post-Effective Amendment No. 8 to
Registration Statement on Form N-4 (File No. 33-75988), as filed on April
17, 1997.
<PAGE>
6. Incorporated by reference to Post-Effective Amendment No. 12 to
Registration Statement on Form N-4 (File No. 33-75988), as filed on
September 15, 1998.
7. Incorporated by reference to Post-Effective Amendment No. 8 to
Registration Statement on Form N-4 (File No. 33-75964), as filed on
August 30, 1996.
8. Incorporated by reference to Post-Effective Amendment No. 13 to
Registration Statement on Form N-4 (File No. 333-01107), as filed on
April 7, 1999.
9. Incorporated by reference to Post-Effective Amendment No. 16 to
Registration Statement on Form N-4 (File No. 33-75988), as filed on
August 24, 1999
10. Incorporated by reference to Post-Effective Amendment No. 10 to
Registration Statement Form N-4 (File No. 33-75988), as filed on October
30, 1997.
11. Incorporated by reference to Post-Effective Amendment No. 9 to
Registration Statement on Form N-4 (File No. 33-75988), as filed on
August 18, 1997.
12. Incorporated by reference to Post-Effective Amendment No. 11 to
Registration Statement on Form N-4 (File No. 33-75988), as filed on April
20, 1998.
13. Incorporated by reference to Post-Effective Amendment No. 1 to
Registration Statement on Form S-1 (File No. 33-60477), as filed on April
15, 1996.
14. Incorporated by reference to Post-Effective Amendment No. 12 to
Registration Statement on Form N-4 (File No. 33-75964), as filed on
February 11, 1997.
15. Incorporated by reference to Post-Effective Amendment No. 12 to
Registration Statement on Form N-4 (File No. 33-91846), as filed on
October 30, 1997.
16. Incorporated by reference to Pre-Effective Amendment No. 1 to
Registration Statement on Form N-4 (File No. 333-56297), as filed on
August 4, 1998.
17. Incorporated by reference to Post-Effective Amendment No. 2 to
Registration Statement on Form N-4 (File No. 333-56297), as filed on
December 14, 1998.
18. Incorporated by reference to Post-Effective Amendment No. 19 to
Registration Statement on Form N-4 (File No. 333-01107), as filed on
February 16, 2000.
19. Incorporated by reference to Post-Effective Amendment No. 20 to
Registration Statement on Form N-4 (File No. 333-01107), as filed on
April 4, 2000.
20. Incorporated by reference to Post-Effective Amendment No. 8 to
Registration Statement on Form N-4 (File No. 333-01107), as filed on
February 19, 1998.
21. Incorporated by reference to Post-Effective Amendment No. 30 to
Registration Statement on Form N-4 (File No. 33-34370), as filed on
September 29, 1997.
22. Incorporated by reference to Post-Effective Amendment No. 16 to
Registration Statement on Form N-4 (File No. 33-75964), as filed on
February 9, 1998.
23. Incorporated by reference to Post-Effective Amendment No. 7 to
Registration Statement on Form S-6 (File No. 33-75248), as filed on
February 24, 1998.
24. Incorporated by reference to Post-Effective Amendment No. 3 to
Registration Statement on Form N-4 (File No. 33-88720), as filed on June
28, 1996.
25. Incorporated by reference to Post-Effective Amendment No. 10 to
Registration Statement on Form N-4 (File No. 33-75992), as filed on
December 31, 1997.
26. Incorporated by reference to Post-Effective Amendment No. 27 to
Registration Statement on Form N-4 (File No. 33-34370), as filed on April
16, 1997.
<PAGE>
Item 25. Directors and Officers of the Depositor
Name and Principal
Business Address* Positions and Offices with Depositor
Thomas J. McInerney Director and President
Shaun P. Mathews Director and Senior Vice President
Catherine H. Smith Director, Chief Financial Officer and
Senior Vice President
Deborah Koltenuk Vice President, Corporate Controller,
and Assistant Treasurer
Therese M. Squillacote Vice President and Chief Compliance
Officer
Kirk P. Wickman Senior Vice President, General
Counsel and Corporate Secretary
* The principal business address of all directors and officers listed is 151
Farmington Avenue, Hartford, Connecticut 06156.
Item 26. Persons Controlled by or Under Common Control with the Depositor or
Registrant
Incorporated herein by reference to Item 24 of Post-Effective Amendment
No. 38 to the Registration Statement on Form N-1A (File No. 33-41694), as filed
on February 23, 2000.
Item 27. Number of Contract Owners
As of February 29, 2000, there were 597,695 individuals holding interests in
variable annuity contracts funded through Variable Annuity Account C.
Item 28. Indemnification
Section 21 of Public Act No. 97-246 of the Connecticut General Assembly (the
"Act") provides that a corporation may provide indemnification of or advance
expenses to a director, officer, employee or agent only as permitted by Sections
33-770 to 33-778, inclusive, of the Connecticut General Statutes, as amended by
Sections 12 to 20, inclusive, of this Act. Reference is hereby made to Section
33-771(e) of the Connecticut General Statutes ("CGS") regarding indemnification
of directors and Section 33-776(d) of CGS regarding indemnification of officers,
employees and agents of Connecticut corporations. These statutes provide in
general that Connecticut corporations incorporated prior to January 1, 1997
shall, except to the extent that their certificate of incorporation expressly
provides otherwise, indemnify their directors, officers,
<PAGE>
employees and agents against "liability" (defined as the obligation to pay a
judgment, settlement, penalty, fine, including an excise tax assessed with
respect to an employee benefit plan, or reasonable expenses incurred with
respect to a proceeding) when (1) a determination is made pursuant to Section
33-775 that the party seeking indemnification has met the standard of conduct
set forth in Section 33-771 or (2) a court has determined that indemnification
is appropriate pursuant to Section 33-774. Under Section 33-775, the
determination of and the authorization for indemnification are made (a) by the
disinterested directors, as defined in Section 33-770(3); (b) by special
counsel; (c) by the shareholders; or (d) in the case of indemnification of an
officer, agent or employee of the corporation, by the general counsel of the
corporation or such other officer(s) as the board of directors may specify.
Also, Section 33-772 provides that a corporation shall indemnify an individual
who was wholly successful on the merits or otherwise against reasonable expenses
incurred by him in connection with a proceeding to which he was a party because
he was a director of the corporation. Pursuant to Section 33-771(d), in the case
of a proceeding by or in the right of the corporation or with respect to conduct
for which the director, officer, agent or employee was adjudged liable on the
basis that he received a financial benefit to which he was not entitled,
indemnification is limited to reasonable expenses incurred in connection with
the proceeding against the corporation to which the individual was named a
party.
The statute does specifically authorize a corporation to procure indemnification
insurance on behalf of an individual who was a director, officer, employer or
agent of the corporation. Consistent with the statute, Aetna Inc. has procured
insurance from Lloyd's of London and several major United States and
international excess insurers for its directors and officers and the directors
and officers of its subsidiaries, including the Depositor.
Item 29. Principal Underwriter
(a) In addition to serving as the principal underwriter and depositor
for the Registrant, Aetna Life Insurance and Annuity Company (Aetna)
also acts as the principal underwriter, only, for Aetna Variable
Encore Fund, Aetna Variable Fund, Aetna Generation Portfolios, Inc.,
Aetna Income Shares, Aetna Balanced VP, Inc. (formerly Aetna
Investment Advisers Fund, Inc.), Aetna GET Fund, and Aetna Variable
Portfolios, Inc. and as the principal underwriter and investment
adviser for Portfolio Partners, Inc. (all management investment
companies registered under the Investment Company Act of 1940 (1940
Act)). Additionally, Aetna acts as the principal underwriter and
depositor for Variable Life Account B of Aetna, Variable Life
Account C of Aetna, Variable Annuity Account B of Aetna and Variable
Annuity Account G of Aetna (separate accounts of Aetna registered as
unit investment trusts under the 1940 Act). Aetna is also the
principal underwriter for Variable Annuity Account I of Aetna
Insurance Company of America (AICA) (a separate account of AICA
registered as a unit investment trust under the 1940 Act).
(b) See Item 25 regarding the Depositor.
<PAGE>
(c) Compensation as of December 31, 1999:
(1) (2) (3) (4) (5)
Name of Net Underwriting Compensation
Principal Discounts and on Redemption Brokerage
Underwriter Commissions or Annuitization Commissions Compensation*
- ----------- ----------- ---------------- ----------- -------------
Aetna Life $5,240,551 $159,707,139
Insurance and
Annuity Company
* Compensation shown in column 5 includes deductions for mortality and expense
risk guarantees and contract charges assessed to cover costs incurred in the
sales and administration of the contracts issued under Variable Annuity
Account C.
Item 30. Location of Accounts and Records
All accounts, books and other documents required to be maintained by Section
31(a) of the 1940 Act and the rules under it relating to the securities
described in and issued under this Registration Statement are located at the
home office of the Depositor as follows:
Aetna Life Insurance and Annuity Company
151 Farmington Avenue
Hartford, Connecticut 06156
Item 31. Management Services
Not applicable
Item 32. Undertakings
Registrant hereby undertakes:
(a) to file a post-effective amendment to this registration statement on Form
N-4 as frequently as is necessary to ensure that the audited financial
statements in the registration statement are never more than sixteen
months old for as long as payments under the variable annuity contracts
may be accepted;
(b) to include as part of any application to purchase a contract offered by a
prospectus which is part of this registration statement on Form N-4, a
space that an applicant can check to request a Statement of Additional
Information; and
<PAGE>
(c) to deliver any Statement of Additional Information and any financial
statements required to be made available under this Form N-4 promptly
upon written or oral request.
(d) Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the 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 it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
(e) Aetna Life Insurance and Annuity Company represents that the fees and
charges deducted under the contracts covered by this registration
statement, in the aggregate, are reasonable in relation to the services
rendered, the expenses expected to be incurred, and the risks assumed by
the insurance company.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant, Variable Annuity Account C of Aetna Life Insurance and
Annuity Company, certifies that it meets the requirements of Securities Act Rule
485(b) for effectiveness of this Post-Effective Amendment to its Registration
Statement on Form N-4 (File No. 33-75988) and has caused this Post-Effective
Amendment to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Hartford, State of Connecticut, on the 17th day of
April, 2000.
VARIABLE ANNUITY ACCOUNT C OF AETNA LIFE
INSURANCE AND ANNUITY COMPANY
(Registrant)
By: AETNA LIFE INSURANCE AND ANNUITY COMPANY
(Depositor)
By: Thomas J. McInerney*
------------------------------------------
Thomas J. McInerney
President
As required by the Securities Act of 1933, this Post-Effective Amendment No.
21 to the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
Thomas J. McInerney* Director and President )
- -------------------------- (principal executive officer) )
Thomas J. McInerney )
)
Shaun P. Mathews* Director ) April
- -------------------------- )
Shaun P. Mathews ) 17, 2000
)
Catherine H. Smith* Director and Chief Financial Officer )
- -------------------------- )
Catherine H. Smith )
)
Deborah Koltenuk* Vice President, Corporate Controller, )
- -------------------------- and Assistant Treasurer )
Deborah Koltenuk )
By: /s/ J. Neil McMurdie
-----------------------------------------
J. Neil McMurdie
*Attorney-in-Fact
<PAGE>
VARIABLE ANNUITY ACCOUNT C
Exhibit Index
Exhibit No. Exhibit
- ----------- -------
99-B.9 Opinion and Consent of Counsel ------------
99-B.10 Consent of Independent Auditors ------------
[Aetna Letterhead] Aetna Inc.
[Aetna Logo] 151 Farmington Avenue
Hartford, CT 06156-8975
Julie E. Rockmore
Counsel
AFS Law, TS31
April 17, 2000 (860) 273-4686
Fax: (860) 273-0385
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: Aetna Life Insurance and Annuity Company and its Variable Annuity Account C
Post-Effective Amendment No. 21 to Registration Statement on Form N-4
Prospectus Title: Aetna Individual Retirement Annuity
File Nos. 33-75988* and 811-2513
Dear Sir or Madam:
The undersigned serves as counsel to Aetna Life Insurance and Annuity Company, a
Connecticut life insurance company (the "Company"). It is my understanding that
the Company, as depositor, has registered an indefinite amount of securities
(the "Securities") under the Securities Act of 1933 (the "Securities Act") as
provided in Rule 24f-2 under the Investment Company Act of 1940 (the "Investment
Company Act").
In connection with this opinion, I or those for whom I have supervisory
responsibility, have reviewed the N-4 Registration Statement, as amended to the
date hereof, and this Post-Effective Amendment No. 21. I have also examined
originals or copies, certified or otherwise identified to my satisfaction, of
such documents, trust records and other instruments I have deemed necessary or
appropriate for the purpose of rendering this opinion. For purposes of such
examination, I have assumed the genuineness of all signatures on original
documents and the conformity to the original of all copies.
I am admitted to practice law in Connecticut, and do not purport to be an expert
on the laws of any other state. My opinion herein as to any other law is based
upon a limited inquiry thereof which I have deemed appropriate under the
circumstances.
- --------
* Pursuant to Rule 429(a) under the Securities Act of 1933, Registrant has
included a combined prospectus under this Registration Statement which
includes all the information which would currently be required in
prospectuses relating to the securities covered by the following earlier
Registration Statements: 33-75972; 33-76024; and 33-89858.
<PAGE>
Based upon the foregoing, and, assuming the Securities are sold in accordance
with the provisions of the prospectus, I am of the opinion that the Securities
being registered will be legally issued and will represent binding obligations
of the Company.
I consent to the filing of this opinion as an exhibit to the Registration
Statement.
Sincerely,
/s/ Julie E. Rockmore
Julie E. Rockmore
Counsel
Consent of Independent Auditors
The Board of Directors of Aetna Life Insurance and Annuity Company and Contract
Owners of Variable Annuity Account C:
We consent to the use of our report dated February 7, 2000, relating to the
consolidated financial statements of Aetna Life Insurance and Annuity Company
and our report dated February 3, 2000, relating to the financial statements of
Variable Annuity Account C, which are included in this Post-Effective Amendment
No. 21 to Registration Statement (File No. 33-75988) on Form N-4 and to the
references to our firm under the headings "Condensed Financial Information" in
the prospectus and "Independent Auditors" in the statement of additional
information.
/s/ KPMG LLP
Hartford, Connecticut
April 17, 2000
