As filed with the Securities and Exchange Registration No. 33-75962*
Commission on April 13, 2000 Registration No. 811-2513
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
- --------------------------------------------------------------------------------
POST-EFFECTIVE AMENDMENT NO. 22 TO
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
and Amendment To
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
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Variable Annuity Account C of Aetna Life Insurance and Annuity Company
(Exact Name of Registrant)
Aetna Life Insurance and Annuity Company
(Name of Depositor)
151 Farmington Avenue, TS31, Hartford, Connecticut 06156
(Address of Depositor's Principal Executive Offices) (Zip Code)
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)
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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 Statement:
33-75978.
<PAGE>
VARIABLE ANNUITY ACCOUNT C
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
FORM N-4 LOCATION - PROSPECTUS DATED MAY
ITEM NO. PART A (PROSPECTUS) 1, 2000
<S> <C> <C>
1 Cover Page......................... Cover Page
2 Definitions........................ Not Applicable
3 Synopsis........................... Contract Overview; Fee Table
4 Condensed Financial Information.... Condensed Financial Information;
Appendix IV - Condensed Financial
Information
5 General Description of Registrant,
Depositor, and Portfolio Companies. Other Topics - The Company;
Variable Annuity Account C;
Appendix III - Fund Descriptions
6 Deductions and Expenses............ 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....... Contract Purchase and
Participation; Your Account Value
11 Redemptions........................ Right to Cancel; Withdrawals;
Systematic Distribution Options
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
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FORM N-4 PART B (STATEMENT OF ADDITIONAL LOCATION - STATEMENT OF ADDITIONAL
ITEM NO. INFORMATION) INFORMATION DATED MAY 1, 2000
<S> <C> <C>
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 of the Separate
Account; Financial Statements of
Aetna Life Insurance and Annuity
Company
</TABLE>
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>
Prospectus - May 1, 2000
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The Funds
Aetna Ascent VP
Aetna Balanced VP, Inc.
Aetna Income Shares d/b/a Aetna Bond VP
Aetna Crossroads VP
Aetna Variable Fund d/b/a Aetna Growth and Income VP
Aetna Index Plus Bond VP*
Aetna Index Plus Large Cap VP
Aetna Index Plus Mid Cap VP
Aetna Index Plus Small Cap VP
Aetna Legacy VP
Aetna Variable Encore Fund d/b/a Aetna Money Market VP
Aetna Value Opportunity VP
Calvert Social Balanced Portfolio
Fidelity Variable Insurance Products Fund (VIP) Equity-Income Portfolio
Fidelity Variable Insurance Products Fund (VIP) High Income Portfolio
Fidelity Variable Insurance Products Fund II (VIP II) Asset Manager Portfolio
Fidelity Variable Insurance Products Fund II (VIP II) Contrafund[RegTM]
Portfolio
Fidelity Variable Insurance Products Fund II (VIP II) Index 500 Portfolio
Janus Aspen Aggressive Growth Portfolio
Janus Aspen Growth Portfolio
Janus Aspen Worldwide Growth Portfolio
Lexington Emerging Markets Fund, Inc.
Lexington Natural Resources Trust**
MFS Total Return Series
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 group deferred
variable annuity contracts issued by Aetna Life Insurance and Annuity Company
(the Company). The contracts may be single purchase payment contracts, which
allow for lump-sum payments, or installment purchase payment contracts, which
allow for installment payments. They are intended to be used as funding vehicles
for certain types of retirement plans, including those that qualify for
beneficial tax treatment and/or to provide current income reduction under
certain sections of the Internal Revenue Code of 1986, as amended (Tax Code).
- --------------------------------------------------------------------------------
Why Reading this Prospectus is Important. Before you participate in the contract
through a retirement plan, you should read this prospectus. It provides facts
about the contract and its investment options. Plan sponsors (generally your
employer) should read this prospectus to help determine if the contract is
appropriate for their plan. Keep this document for future reference.
Table of Contents . . . page 4
- --------------------------------------------------------------------------------
You may participate in this contract if you are an eligible employee of a school
board or public university in the State of New York and if you are a member of
the New York State United Teachers Trust (NYSUT) or the United University
Professions (UUP).
Investment Options. The contracts offer 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. Some investment options may be
unavailable through certain contracts and plans.
Variable Investment Options. These options are called subaccounts. The
subaccounts are within Variable Annuity Account C (the separate account). 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. Information about the risks of
investing in the funds is located in the "Investment Options" section in this
prospectus at page 11 and in each fund prospectus. Read this prospectus in
conjunction with the fund prospectuses, and retain the fund prospectuses for
future reference.
- -------------------------
* Effective May 15, 2000, transfers or deposits are not allowed into the
subaccount investing in this fund except those made pursuant to standing
customer instructions (e.g., payroll deduction allocations, dollar cost
averaging) in effect prior to this date. See "Important Information Regarding
Aetna Index Plus Bond VP Subaccount".
** Transfers or deposits are not allowed into the subaccount investing in this
fund, except from accounts established under the contract before May 1, 1998.
As soon as all those who have current allocations to the subaccount under the
contract have redirected their allocations to other investment options, we
will close the subaccount to all investments (except loan repayments that we
automatically deposit into the subaccount according to our loan repayment
procedures).
<PAGE>
Prospectus - May 1, 2000 (continued)
- --------------------------------------------------------------------------------
Fixed Interest Options.
> Guaranteed Accumulation Account
> Fixed Account
Except as specifically mentioned, this prospectus describes only the variable
investment options. However, we describe the fixed interest options in the
appendices to this prospectus. There is also a separate prospectus for the
Guaranteed Accumulation Account.
Important Information Regarding Aetna Index Plus Bond VP Subaccount
Subaccount to be Closed to New Investments
Effective May 15, 2000, the Aetna Index Plus Bond VP subaccount will no longer
be available for new investments. After that date, the Company will only accept
deposits into that subaccount that are made pursuant to standing customer
instructions (e.g., payroll deduction allocations, dollar cost averaging, etc.)
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 fund, all
existing balances in Aetna Index Plus Bond VP will be invested in (substituted
with) shares of Aetna Money Market VP. Contract owners or participants 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 Index Plus Bond VP subaccount will be redirected to the Aetna Money Market
VP subaccount. The Company believes that the substitution will not create any
tax liability for contract owners or participants.
Transfer Rights. At any time prior to the date of substitution, participants may
transfer their accumulation values from the subaccounts 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, contract owners or participants who had values transferred from a
subaccount as a result of a substitution may transfer among any of the
remaining investment options in accordance with the terms of the contract,
also free of any transfer fees and charges.
Surrender Rights. If a contract owner or participant whose shares are
substituted elects to make a surrender under the contract (if permitted by the
plan and applicable tax law) within 30 days after the date of the substitution,
the Company 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 Index Plus Bond VP subaccount. A contract owner
or participant who exercises this surrender right 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. Contract owners
or participants should seek qualified tax advice before exercising their
surrender rights.
<PAGE>
Prospectus - May 1, 2000 (continued)
- --------------------------------------------------------------------------------
Getting Additional Information. You may obtain the May 1, 2000, Statement of
Additional Information (SAI) by indicating your request on your enrollment
materials or calling the Opportunity Plus Service Center at 1-800-677-4636. You
may also obtain an SAI for any of the funds by calling that number. The 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
38 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 current prospectuses of the funds and the Guaranteed
Accumulation Account. 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 than that contained in this prospectus.
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Contract Overview ...................................................... 5
Who's Who
The Contract and Your Retirement Plan
Contract Rights
Contract Facts
Contract Phases: The Accumulation Phase, The Income Phase
Questions: Contacting the Company (sidebar)
Sending Forms and Written Requests in Good Order (sidebar)
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Fee Table ............................................................... 7
Condensed Financial Information ......................................... 11
Investment Options ...................................................... 11
Transfers ............................................................... 12
Contract Purchase or Participation ...................................... 13
Contract Ownership and Rights ........................................... 14
Right to Cancel ......................................................... 15
Fees .................................................................... 16
Your Account Value ...................................................... 19
Withdrawals ............................................................. 21
Loans ................................................................... 22
Systematic Distribution Options ......................................... 23
Death Benefit ........................................................... 24
The Income Phase ........................................................ 25
Taxation ................................................................ 29
Other Topics ............................................................ 34
</TABLE>
The Company -- Variable Annuity Account C -- Performance Reporting -- Voting
Rights -- Contract Distribution -- Changes in Beneficiary Designations --
Opportunity Plus Service Center -- Agreement with the Company -- Contract
Modification -- Legal Matters and Proceedings -- Payment Delay or Suspension --
Intent to Confirm Quarterly
<TABLE>
<S> <C>
Contents of the Statement of Additional Information ..................... 38
Appendix I -- Guaranteed Accumulation Account ........................... 39
Appendix II -- Fixed Account ............................................ 41
Appendix III -- Fund Descriptions ....................................... 42
Appendix IV -- Condensed Financial Information .......................... 45
</TABLE>
4
<PAGE>
Questions: Contacting the Company. To answer your questions, contact your local
representative or write or call the Company through:
Opportunity Plus
Service Center
P.O. Box 12894
Albany, New York 12212-2894
1-800-OPP-INFO
(1-800-677-4636)
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 your local representative or the Company through the
Opportunity Plus Service Center 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.
Contract Overview
- --------------------------------------------------------------------------------
The following is a summary. Please read each section of this prospectus for
additional information.
- --------------------------------------------------------------------------------
Who's Who
- --------------------------------------------------------------------------------
You (the participant): The individual participating in a retirement plan, where
the plan uses the contracts as funding options.
Plan Sponsor: The sponsor of your retirement plan. Generally, your employer.
Contract Holder: The person or entity to whom we issue the contract. Generally,
the plan sponsor.
We (the Company): Aetna Life Insurance and Annuity Company. We issue the
contract.
- --------------------------------------------------------------------------------
The Contract and Your Retirement Plan
- --------------------------------------------------------------------------------
Retirement Plan (plan): A plan sponsor has established a retirement plan for
you. The contracts are offered as funding options for that plan. We are not a
party to the plan, so the terms and the conditions of the contracts and the plan
may differ.
Plan Type: We refer to plans in this prospectus as 403(b) plans. For a
description, see "Taxation."
- --------------------------------------------------------------------------------
Contract Rights
- --------------------------------------------------------------------------------
You hold all rights under the contract and may make all elections for your
accounts.
- --------------------------------------------------------------------------------
Contract Facts
- --------------------------------------------------------------------------------
Free Look/Right to Cancel: Contract holders and participants may cancel their
purchase no later than ten days after they receive the contract (or other
document evidencing their interest.) See "Right To Cancel."
Death Benefit: A beneficiary may receive a benefit in the event of your death
prior to the income phase. Death benefits during the income phase depend on the
payment option selected. See "Death Benefit" and "The Income Phase."
Withdrawals: During the accumulation phase, you may, subject to the limits in
the contract, withdraw all or a part of your account value. Certain fees and
taxes may apply. See "Withdrawals" and "Taxation." Amounts withdrawn from the
Guaranteed Accumulation Account may be subject to market value adjustment. See
Appendix I.
Systematic Distribution Options: You may elect to receive regular payments 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."
5
<PAGE>
Taxation: You will not generally pay taxes on any earnings from the annuity
contract described in this prospectus until they are withdrawn. Tax-qualified
retirement arrangements (e.g., 403(b) plans) also defer payment of taxes on
earnings until they are withdrawn. When an annuity contract is used to fund a
tax-qualified retirement arrangement, you should know that the annuity contract
does not provide any additional tax deferral of earnings beyond the tax deferral
provided by the tax-qualified retirement arrangement. However, annuities do
provide other features and benefits which may be valuable to you. You should
discuss your alternatives with your financial representative.
Amounts you receive as a distribution will be generally included in your gross
income and will be subject to taxation. Tax penalties may apply in some
circumstances. See "Taxation".
- --------------------------------------------------------------------------------
Contract Phases
- --------------------------------------------------------------------------------
I. The Accumulation Phase. (accumulating retirement benefits)
<TABLE>
<S> <C>
------------------ STEP 1: You or the contract
Payments to holder provide Aetna Life
Your Account Insurance and Annuity Company
------------------ with your completed enrollment
Step 1 materials. The contract holder
--------------------------------------------------- directs us to set up one or more
Aetna Life Insurance and Annuity Company accounts for you. We may set up
--------------------------------------------------- account(s) for employer
contributions and/ or
a) Step 2 b) contributions from your salary.
- --------- ---------------------------------------------------
Variable Annuity STEP 2: You direct us to invest
Fixed Account C your account dollars in any of
Interest the following investment
Options Variable Investment Options options:
- --------- (a) Fixed Interest Options; or
(b) Variable Investment Options.
--------------------------------------------------- (The variable investment
The Subaccounts options are the subaccounts
--------------------------------------------------- of Variable Annuity Account
C. Each one invests in a
A B Etc. specific mutual fund.)
The subaccount(s) selected
--------------------------------------------------- purchases shares of its
corresponding fund.
Step 2 b)
---------------------
Mutual Mutual
Fund A Fund B
---------------------
</TABLE>
II. The Income Phase (Receiving income phase payments from your contract). If
you wish to begin receiving payments from your contracts, you may select
from the options available. The contract offers several income phase payment
options, if you wish to elect one (see "The Income Phase.") In general, you
may:
> Receive income phase payments over a lifetime or for a specified period;
> Receive income phase payments monthly, quarterly, semi-annually or annually;
> Select an income phase payment option that provides a death benefit to your
beneficiary(ies); or
> Select fixed income phase payments, variable income phase payments (that vary
based on the performance of the variable investment options you select), or a
combination of fixed and variable income phase payments.
6
<PAGE>
In This Section:
> Early Withdrawal Charge Schedule
> Fees Deducted From the Subaccounts
> Fund Fees
> Hypothetical Examples
Also See the "Fees" Section for:
> Early Withdrawal Charge Schedules
> How, When and Why Fees are Deducted
> Premium and Other Taxes
See "The Income Phase" for:
> Fees During the Income Phase
Fee Table
- --------------------------------------------------------------------------------
The tables and examples in this section show the fees your account may incur
while accumulating dollars under the contract (the Accumulation Phase). See "The
Income Phase" for fees that may apply after you begin receiving payments under
the contract. The fees shown below do not include premium taxes that may be
applicable.
Transaction Fees
Early Withdrawal Charge. As a percentage of the amount withdrawn.
Early Withdrawal Charge Schedule(1)
<TABLE>
<CAPTION>
- -------------------------------------------------
Installment Purchase Payment Contracts
- -------------------------------------------------
Purchase Payment Early Withdrawal
Periods Completed Charge
<S> <C>
Fewer than 5 5%
5 or more but fewer than 7 4%
7 or more but fewer than 9 3%
9 or 10 2%
More than 10 0%
</TABLE>
Fees Deducted From the Subaccounts During the Accumulation Phase (Daily
deductions equal to the given percentage of values invested in the subaccounts
on an annual basis)
<TABLE>
<S> <C>
Mortality and Expense Risk Charge ......... 1.10%(2)
Administrative Expense Charge ............. 0.00%-0.25%(3)
-----------
Total Separate Account Expenses ........... 1.10%-1.35%
===========
</TABLE>
(1)For Single Purchase Payment Contracts, there is no withdrawal charge. For
Installment Purchase Payment Contracts, we waive the withdrawal charge for
dollars contributed to the funds or the Guaranteed Accumulation Account on or
after April 1, 1995. (See "Fees--Early Withdrawal Charge.")
(2)The mortality and expense risk charge for all subaccounts except the Aetna
Money Market VP subaccount is 1.10% on an annual basis effective February 15,
2000, 1.05% on an annual basis effective February 15, 2001, and 1.00% on an
annual basis effective February 15, 2002. The mortality and expenses risk
charge for the Aetna Money Market VP subaccount is 0.35% on an annual basis
effective February 15, 2000. During the income phase, the mortality and
expense risk charge for all subaccounts is 1.25% annually.
(3)We do not currently impose an administrative expense charge. However, we
reserve the right to deduct a daily charge of not more than 0.25% on an
annual basis from the subaccounts.
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,
fees are deducted from the value of fund shares on a daily basis, which in turn
will affect the value of each subaccount on a daily basis. 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
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 and Income VP 0.50% 0.08% 0.58% -- 0.58%
Aetna Index Plus Bond VP(2) 0.30% 0.33% 0.63% 0.18% 0.45%
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 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 Value Opportunity VP(2) 0.60% 0.13% 0.73% 0.00% 0.73%
Calvert Social Balanced Portfolio(3) 0.70% 0.19% 0.89% 0.00% 0.89%
Fidelity VIP Equity-Income Portfolio(4) 0.48% 0.09% 0.57% -- 0.57%
Fidelity VIP High Income Portfolio(4) 0.58% 0.11% 0.69% -- 0.69%
Fidelity VIP II Asset Manager Portfolio(4) 0.53% 0.10% 0.63% -- 0.63%
Fidelity VIP II Contrafund[RegTM] Portfolio(4) 0.58% 0.09% 0.67% -- 0.67%
Fidelity VIP II Index 500 Portfolio(5) 0.24% 0.10% 0.34% 0.06% 0.28%
Janus Aspen Aggressive Growth Portfolio(6) 0.65% 0.02% 0.67% 0.00% 0.67%
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%
Lexington Emerging Markets Fund, Inc. 0.85% 0.85% 1.70% -- 1.70%
Lexington Natural Resources Trust 1.00% 0.33% 1.33% -- 1.33%
MFS Total Return Series(7) 0.75% 0.15% 0.90% 0.00% 0.90%
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(8) 0.65% 0.25% 0.90% 0.00% 0.90%
PPI MFS Emerging Equities Portfolio(8) 0.67% 0.13% 0.80% 0.00% 0.80%
PPI MFS Research Growth Portfolio(8) 0.70% 0.15% 0.85% 0.00% 0.85%
PPI Scudder International Growth Portfolio(8) 0.80% 0.20% 1.00% 0.00 1.00%
PPI T. Rowe Price Growth Equity Portfolio(8) 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.
(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) "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%.
(4) 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; 0.62% for Fidelity VIP II Asset Manager
Portfolio; and 0.65% for Fidelity VIP II Contrafund[RegTM] Portfolio.
(5) The investment adviser agreed to reimburse a portion of Fidelity VIP II
Index 500 Portfolio's expenses during the period.
(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, Growth and Worldwide Growth Portfolios. All expenses are shown
without the effect of expense offset arrangements.
(7) The series has an expense offset arrangement which reduces the series'
custodian fee based upon the amount of cash maintained by the series with
its custodian and dividend disbursing agent. The series may enter into
other such arrangements and directed brokerage arrangements, which would
also have the effect of reducing the series' expenses. The "Other
Expenses" shown above do not take into account these expense reductions,
and are therefore higher than the actual expenses of the series. Had these
fee reductions been taken into account, Net Fund Annual Expenses After
Waivers or Reductions would be lower and would equal 0.89% for the series.
(8) 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 Incurred Over Time. The following hypothetical examples show the
fees paid over time if $1,000 is invested in a subaccount, assuming a 5% annual
return on the investment. For the purposes of these examples, we deducted a
mortality and expense risk charge of 1.10% annually for all subaccounts except
the Aetna Money Market VP subaccount, and 0.35% annually for the Aetna Money
Market VP subaccount, and the maximum administrative expense charge of 0.25%
annually (not currently charged). The total fund expenses used are those shown
in the column "Total Annual Expenses Without Waivers or Reductions" in the Fund
Expense Table.
> These examples are purely hypothetical.
<TABLE>
<CAPTION>
- ---------------------------------------------
> These examples are purely hypothetical.
> They should not be considered a
representation of past or future expenses
or expected returns.
> Actual fees and/or returns may be more or
less than those shown in these examples.
- ---------------------------------------------
EXAMPLE A EXAMPLE B
--------------------------------------- --------------------------------------
If you leave your entire account
If you withdraw your entire account value invested or if you select an
value at the end of the periods shown, income phase payment option at the
you would pay the following fees, end of the periods shown, you would
including any applicable Early pay the following fees (no Early
Withdrawal Charge assessed:* Withdrawal Charge is 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 $73 $120 $170 $242 $21 $65 $112 $242
Aetna Balanced VP, Inc. $71 $116 $163 $226 $20 $61 $105 $226
Aetna Bond VP $70 $113 $158 $216 $19 $58 $100 $216
Aetna Crossroads VP $73 $120 $170 $242 $21 $65 $112 $242
Aetna Growth and Income VP $71 $115 $162 $225 $20 $61 $104 $225
Aetna Index Plus Bond VP $72 $117 $165 $231 $20 $62 $107 $231
Aetna Index Plus Large Cap VP $70 $112 $156 $212 $18 $57 $ 97 $212
Aetna Index Plus Mid Cap VP $73 $122 $173 $248 $22 $67 $115 $248
Aetna Index Plus Small Cap VP $74 $125 $178 $258 $23 $70 $120 $258
Aetna Legacy VP $73 $120 $171 $243 $21 $66 $113 $243
Aetna Money Market VP $62 $ 86 $113 $115 $10 $30 $ 52 $115
Aetna Value Opportunity VP $73 $120 $170 $241 $21 $65 $112 $241
Calvert Social Balanced Portfolio $74 $124 $177 $257 $23 $70 $120 $257
Fidelity VIP Equity-Income Portfolio $71 $115 $162 $224 $20 $60 $104 $224
Fidelity VIP High Income Portfolio $72 $119 $168 $237 $21 $64 $110 $237
Fidelity VIP II Asset Manager Portfolio $72 $117 $165 $231 $20 $62 $107 $231
Fidelity VIP II Contrafund[RegTM] Portfolio $72 $118 $167 $235 $21 $63 $109 $235
Fidelity VIP II Index 500 Portfolio $69 $108 $151 $200 $17 $53 $ 92 $200
Janus Aspen Aggressive Growth Portfolio $72 $118 $167 $235 $21 $63 $109 $235
Janus Aspen Growth Portfolio $72 $118 $167 $235 $21 $63 $109 $235
Janus Aspen Worldwide Growth Portfolio $72 $119 $168 $238 $21 $64 $110 $238
Lexington Emerging Markets Fund, Inc. $82 $147 $215 $336 $31 $94 $160 $336
Lexington Natural Resources Trust $78 $137 $198 $301 $27 $83 $142 $301
MFS Total Return Series $74 $125 $178 $258 $23 $70 $120 $258
Oppenheimer Global Securities Fund/VA $72 $119 $168 $237 $21 $64 $110 $237
Oppenheimer Strategic Bond Fund/VA $73 $121 $172 $246 $22 $67 $114 $246
PPI MFS Capital Opportunities Portfolio $74 $125 $178 $258 $23 $70 $120 $258
PPI MFS Emerging Equities Portfolio $73 $122 $173 $248 $22 $67 $115 $248
PPI MFS Research Growth Portfolio $74 $123 $175 $253 $22 $69 $118 $253
PPI Scudder International Growth Portfolio $75 $127 $183 $269 $24 $73 $126 $269
PPI T. Rowe Price Growth Equity Portfolio $73 $120 $171 $243 $21 $66 $113 $243
</TABLE>
- -----------------
* This example reflects deduction of an early withdrawal charge calculated
using the schedule applicable to Installment Purchase Payment Contracts.
Under that schedule, if only one $1,000 payment was made as described above,
fewer than 5 purchase payment periods would have been completed at the end of
years 1, 3 and 5, and the 5% charge would apply. At the end of the tenth
account year, the early withdrawal charge is waived regardless of the number
of purchase payment periods completed, and no early withdrawal charge would
apply.
** This example does not apply if during the income phase, a nonlifetime payment
option with variable payments is selected and a lump-sum withdrawal is
requested within 3 years after payments start. In this case, the lump-sum
payment is treated as a withdrawal during the accumulation phase and may be
subject to an early withdrawal charge as shown in Example A.
10
<PAGE>
Condensed Financial Information
- --------------------------------------------------------------------------------
Understanding Condensed Financial Information. In Appendix IV, we provide
condensed financial information about the Variable Annuity Account C (the
separate account) subaccounts available under the contracts. The tables show the
value of the subaccounts over the past 10 years. For subaccounts that were not
available 10 years ago, we give a history from the date of first availability.
Investment Options
- --------------------------------------------------------------------------------
The contract offers variable investment options and fixed interest options. When
we establish your account(s), 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. Earnings on amounts invested in a subaccount
will vary depending upon the performance and fees of its underlying fund. You do
not invest directly in or hold shares of the funds.
> Fund Descriptions. We provide brief descriptions of the funds in Appendix III.
Please refer to the fund prospectuses for additional information. Fund
prospectuses may be obtained, free of charge, from the Opportunity Plus
Service Center at the address and phone number listed in "Contract Overview"
or by accessing the SEC's website or the SEC Public Reference Room.
Fixed Interest Options. For descriptions of the fixed interest options, see
Appendix I and II and the Guaranteed Accumulation Account prospectus.
- --------------------------------------------------------------------------------
Selecting Investment Options
o Choose options appropriate for you. Your Aetna 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 a value that rises and falls more rapidly and to a
greater degree than other funds. For example, funds investing in foreign or
international securities are subject to additional risks not associated with
domestic investments, and their 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 prospectus, fixed interest option
appendices and the Guaranteed Accumulation Account prospectus.
- --------------------------------------------------------------------------------
Limits on Option Availability. Some funds and fixed interest options may not be
available through certain contracts or plans. We may add, withdraw or substitute
funds, subject to the conditions in the contract and compliance with regulatory
requirements.
Limits on Number of Options Selected. No more than 18 investment options may be
selected for your account at any one time during the accumulation
11
<PAGE>
phase. If you have an outstanding loan, you may currently make a total of 18
cumulative selections over the life of your account. Each subaccount, the Fixed
Account and each classification of the Guaranteed Accumulation Account counts as
one option. If you have a loan on the account, each option counts toward the
limit, even after the full value is transferred to other options.
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 purchase payments 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, is 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, that could adversely impact the 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 values to decrease. Each fund's board of directors or trustees will
monitor events to identify any conflicts which might arise and to determine what
action, if any, should be taken to address such conflicts.
Transfers
- --------------------------------------------------------------------------------
Transfers Among Investment Options. During the accumulation phase and the income
phase, you may transfer among investment options. You may make a request in
writing, by telephone or, where applicable, electronically. Transfers must be
made in accordance with the terms of the contract and your plan. Transfers from
fixed interest options are restricted as outlined in Appendices I and II.
Value of Transferred Dollars. The value of amounts transferred into or out of
the subaccounts will be based on the subaccount unit values next determined
after we receive your request in good order at our Home Office, or if you are
participating in the Dollar Cost Averaging Program, after your scheduled
transfer. (See "Contract Overview -- Questions.")
Telephone and Electronic Transfers: 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
12
<PAGE>
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.
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 or participants. Such restrictions could include: (1) not
accepting transfer instructions from an agent acting on behalf of more than one
contract holder or participant; and (2) not accepting preauthorized transfer
forms from market timers or other entities acting on behalf of more than one
contract holder or participant 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 or
participants.
The Dollar Cost Averaging Program. The contracts allow you to participate in our
Dollar Cost Averaging Program. There is no additional charge for this service.
Dollar cost averaging is a system for investing that buys fixed dollar amounts
of an investment at regular intervals, regardless of price. Our program
transfers, at regular intervals, a fixed dollar amount from Aetna Money Market
VP to the Fixed Account, GAA, or one or more subaccounts that you select.
Allocations to the Aetna Fixed Account may limit your ability to execute
subsequent transfers out of this fixed option. Amounts transferred to or from
the Fixed Account and subsequently withdrawn from the contract during the
accumulation phase may be subject to early withdrawal charge. (See "Fees").
Amounts transferred from the Guaranteed Accumulation Account before the end of a
guaranteed term may be subject to a market value adjustment. (See Appendix I and
the Guaranteed Accumulation Account prospectus.) Dollar cost averaging is not
permitted into the Lexington Natural Resources Trust subaccount. 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. For additional information about this program,
contact your local representative or call the Company at the number listed in
"Contract Overview--Questions."
Contract Purchase or Participation
- --------------------------------------------------------------------------------
Contracts Available for Purchase. The contracts available for purchase are
deferred annuity contracts that the Company offers in connection with
retirement plans under Code Section 403(b). The plans are established by
13
<PAGE>
school boards and public universities in the state of New York, for participants
who are members and agency fee payers of the New York State United Teachers
Trust (NYSUT) and United University Professions (UUP).
There are two group deferred variable annuity contracts:
(1) Single purchase payment contracts issued for lump-sum transfers to us of
amounts accumulated under a pre-existing plan; and
(2) Installment purchase payment contracts established to accept continuing
periodic payments.
We reserve the right to set a minimum purchase payment on single purchase
payment contracts. Lump-sum transfers below this minimum will be applied to an
installment purchase payment contract.
Purchasing the Contract. The contract holder submits the required forms and
application to the Company. We approve the forms and issue a contract to the
contract holder.
Participating in the Contract. To participate in the contract, complete an
enrollment form and submit it to the Opportunity Plus Service Center. (See
"Contract Overview -- Questions.") If your enrollment is accepted, we establish
one or more accounts for you under the contract(s). We may establish an employee
account for contributions from your salary or rollover amount and an employer
account for employer contributions. Your account includes amounts held under
both the installment purchase payment contract and the single purchase payment
contract.
Acceptance or Rejection of Application or Enrollment Forms. We must accept or
reject an application or your enrollment materials within two business days of
receipt. If the forms are incomplete, we may hold any forms and accompanying
payments for five days, unless you consent to our holding them longer. Under
limited circumstances, we may also agree, for a particular plan, to hold
payments for longer periods with the permission of the contract holder. If we
agree to this, we will deposit the payments in the Aetna Money Market VP
subaccount until the forms are completed (for a maximum of 105 days). If we
reject the application or enrollment forms, we will return the forms and any
payments.
Allocating Purchase Payments to the Investment Options. You direct us to
allocate initial contributions to the investment options available under the
plan. Generally you will specify this information on your enrollment materials.
After your enrollment, changes to allocations for future purchase payments or
transfer of existing balances among investment options may be requested in
writing and, where available, by telephone or electronically.
Allocations must be in whole percentages and there may be limitations on the
number of investment options that can be selected at any one time. (See
"Investment Options" and "Transfers.")
Contract Ownership and Rights
- --------------------------------------------------------------------------------
Who Owns the Contract? The contract holder. This is the person or entity to
whom we issue the contract, usually your employer.
14
<PAGE>
Who Owns Money Accumulated Under the Contract? We establish one or more accounts
for you under the contracts. Generally, we establish an employee account to
receive salary reduction and rollover amounts and an employer account to receive
employer contributions. You have the right to the value of your employee account
and any employer account.
What Rights Do I Have Under the Contract? You hold all rights under the contract
and may make all elections for your accounts.
Right to Cancel
- --------------------------------------------------------------------------------
When and How to Cancel. You or the contract holder may cancel your purchase
within ten days after receiving the contract (or other document evidencing your
interest) by returning it to the Opportunity Plus Service Center or the agent
along with a written notice of cancellation.
Refunds. We will produce a refund to you or the contract holder not later than
seven days after we receive the contract or other document evidencing your
interest and the written notice of cancellation at the Opportunity Plus Service
Center. The refund will equal the dollars contributed to the contract plus any
earnings or less any losses attributable to the purchase payments allocated to
the variable investment options.
15
<PAGE>
Types of Fees
There are three types of fees your account may incur:
> Transaction Fees
o Early Withdrawal Charge
> Fees Deducted from the Subaccounts
o Mortality and Expense Risk Charge
o Administrative Expense Charge
> Fees Deducted by the Funds
o Investment Advisory Fees
o Other Expenses
Terms to Understand in
the Schedules
> Account Year--a 12-month period measured from the date we establish your
account, or measured from any anniversary of that date.
> Purchase Payment Period (for installment purchase payment contracts)--the
period of time it takes to complete the number of installment payments
expected to be made to your account over a year. For example, if your payment
frequency is monthly, a payment period is completed after 12 payments are
made. If only 11 payments are made, the payment period is not completed
until the twelfth payment is made. At any given time, the number of payment
periods completed can not exceed the number of account years completed,
regardless of the number of payments made.
Fees
- --------------------------------------------------------------------------------
The following repeats and adds to information provided in the "Fee Table"
section. Please review both this section and the Fee Table for information on
fees.
Transaction Fees
Early Withdrawal Charge
Under installment purchase payment contracts, withdrawals of all or a portion of
your account value may be subject to a charge. There is no early withdrawal
charge for single purchase payment contracts.
Amount. The charge is a percentage of the amount withdrawn. The percentage will
be determined by the early withdrawal charge schedule that applies to your
account. The charge will never be more than 8.5% of total payments to your
account.
Purpose. This is a deferred sales charge. The charge 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:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Installment Purchase Payment Contracts
- --------------------------------------------------------------------------------
Purchase Payment Periods Completed Early Withdrawal Charge
<S> <C>
Fewer than 5 5%
5 or more but fewer than 7 4%
7 or more but fewer than 9 3%
9 or 10 2%
More than 10 0%
- --------------------------------------------------------------------------------
</TABLE>
Free Withdrawals. If you are between the ages of 59-1/2 and 70-1/2, you may
withdraw up to 10% of your account value during each calendar year without being
charged a withdrawal fee. The free withdrawal only applies to the first partial
withdrawal you make in each calendar year. The 10% amount will be based on your
account value calculated on the valuation date next following our receipt of
your request for withdrawal. Outstanding contract loans are excluded from the
account value when calculating the 10% free withdrawal amount.
The free withdrawal will not apply:
> To a full withdrawal of your account;
> To partial withdrawals due to a default on a contract loan; or
> If ECO or SWO is elected.
Waiver. The early withdrawal charge is waived for portions of a withdrawal
where one or more of the following apply:
> Used to provide payments to you during the income phase;
> Paid because of your death before income phase payments begin;
> Paid where your account value is $2,500 or less and no part of the account has
been taken as a withdrawal or a loan or used to provide income phase payments
within the prior 12 months;
> Taken because of the election of a systematic distribution option (See
"Systematic Distribution Options");
16
<PAGE>
> Taken when you are 59-1/2 or older, have an installment purchase payment
account and have completed at least nine purchase payment periods;
> Withdrawn due to disability as specified in the Tax Code;
> Taken on or after the tenth anniversary of the effective date of the account;
> Due to a financial hardship as defined in the Tax Code;
> Withdrawn due to your separation from service with your current employer,
while meeting the age and service requirements to receive benefits under the
New York State Teachers' or Employee's Retirement Systems (even if you are not
a member of either system); or
> Withdrawn from the portion of the account value invested in the subaccounts
and/or GAA attributable to payments made on or after April 1, 1995. This
waiver does not apply to:
> Amounts deposited in the Fixed Account;
> Amounts deposited in a subaccount or GAA but then transferred to the Fixed
Account; or
> Amounts that came from the Fixed Account but were then transferred to a
subaccount or GAA.
> For any withdrawal, the account value of the payments made on or after
April 1, 1995 will be withdrawn first, then the remaining value will be used
to satisfy the disbursement request.
Early Withdrawal Charge Schedule For GAA For Certain New York Contracts The
following schedule applies to withdrawals from GAA under installment purchase
payment master contracts issued after July 29, 1993 in the State of New York.
This schedule is based on the number of completed account years.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Installment Purchase Payment Contracts
- --------------------------------------------------------------------------------
Account Years Completed Early Withdrawal Charge
<S> <C>
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>
Fees Deducted From the Subaccounts
Mortality and Expense Risk Charge
Amount. During the accumulation phase, for all subaccounts except the Aetna
Money Market VP subaccount, 1.10% annually of your account value invested in the
subaccounts, to be reduced to 1.05% annually effective February 15, 2001, and
1.00% annually effective February 15, 2002. For the Aetna Money Market VP
subaccount, 0.35% annually of your account value invested in the subaccount. See
"The Income Phase" for fees deducted during the income phase.
When/How. We deduct this fee daily from the subaccounts corresponding to the
funds you select. We do not deduct this from any fixed interest option.
17
<PAGE>
Purpose. The fee 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 payments based on annuity rates specified in the contracts and our
funding of the death benefit and other payments we make to owners or
beneficiaries of the accounts.
> The expense risk is the risk that the actual expenses we incur under the
contracts will exceed the maximum costs that we can charge.
If the amount we deduct for this fee is not enough to cover our mortality costs
and expenses under the contracts, 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 fee.
Administrative Expense Charge
Maximum Amount. 0.25% We currently do not impose this fee. We reserve the
right, however, to charge up to 0.25% on an annual basis from your account
value invested in the funds.
When/How. If imposed, we will deduct this fee daily from your account value held
in the subaccounts corresponding to the funds you select. This fee may be
assessed during the accumulation phase and/or the income phase. If we are
imposing this fee under the contract when you enter the income phase, the fee
will apply to you during the entire income phase.
Purpose. This fee helps defray our administrative expenses that cannot be
covered by the mortality and expense risk charge described above. The fee is not
intended to exceed the average expected cost of administering the contracts. We
do not expect to make a profit from this fee.
Fund Expenses
Amount. Each fund determines its own advisory fee and expenses. For a list of
fund fees see "Fee Table." The fees are described in more detail in each fund
prospectus.
When/How. Fund fees are not deducted from your account. Fund advisory fees and
expenses are reflected in the daily value of the fund shares, which will in turn
affect the daily value of each subaccount.
Purpose. These amounts help to pay the funds' investment advisor and operating
expenses.
Premium and Other Taxes. Currently, there is no premium tax on annuities under
New York regulations. If the state does impose a premium tax, it would be
deducted from the amount applied to an income option. We reserve the right to
deduct a state premium tax at any time from the purchase payment(s) or from the
account value at any time, but no earlier than when we have a tax liability
under state law.
In addition, the Company reserves the right to assess a charge for any federal
taxes due against the separate account. (See "Taxation.")
18
<PAGE>
Your Account Value
- --------------------------------------------------------------------------------
During the accumulation phase, your account value at any given time equals:
> Account dollars directed to the fixed interest options, including interest
earnings to date; less
> Deductions, if any, from the fixed interest options (e.g. withdrawals, fees);
plus
> The current dollar value of amounts invested in the subaccounts.
Subaccount Accumulation Units. When a fund is selected 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 value of
accumulation units vary 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 charge (if any). We
discuss these deductions in more detail in "Fee Table" and "Fees."
Valuation. We determine the AUV every 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 units at the preceding valuation; minus
> A daily deduction for the mortality and expense risk charge, and
administrative expense charge, if any, and any other fees, such as guarantee
charges for Aetna GET Fund, deducted from investments in the separate account.
The net investment rate may be either positive or negative.
19
<PAGE>
Hypothetical Illustration. As a hypothetical illustration, assume that an
investor contributes $5,000 to his account and directs us to invest $3,000 in
Fund A and $2,000 in Fund B. After receiving the contribution and following the
next close of business of the New York Stock Exchange, the applicable AUV's are
$10 for Subaccount A, and $25 for Subaccount B. The investor's account is
credited with 300 accumulation units of Subaccount A and 80 accumulation units
of Subaccount B.
---------------------
$5,000 contribution
---------------------
Step 1
---------------------------------------------------
Aetna Life Insurance and Annuity Company
---------------------------------------------------
Step 2
---------------------------------------------------
Variable Annuity Account B
---------------------------------------------------
Subaccount A Subaccount B Etc.
300 80
accumulation accumulation
units units
---------------------------------------------------
Step 3
---------- -----------
Fund A Fund B
---------- -----------
Step 1: You make an initial contribution of $5000.
Step 2:
A. You direct us to invest $3,000 in Fund A. The purchase payment purchases 300
accumulation units of Subaccount A ($3,000 divided by the current $10 AUV).
B. You directs us to invest $2,000 in Fund B. The purchase payment purchases 80
accumulation units of Subaccount B ($2,000 divided by the current $25 AUV).
Step 3: The separate account then purchases shares of the applicable funds at
the then current market value (net asset value or NAV).
The 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 initial purchase
payments are directed to the subaccounts, they will purchase subaccount
accumulation units at the AUV next computed after our acceptance of the
applicable application or enrollment forms. Any subsequent purchase payments or
transfers directed to the subaccounts that we receive by the close of business
of the New York Stock Exchange (Exchange) will purchase subaccount accumulation
units at the AUV computed after the close of the Exchange on that day. The value
of subaccounts may vary day to day.
20
<PAGE>
Taxes, Fees and Deductions
Amounts withdrawn may be subject to one or more of the following:
> Early Withdrawal Charge (see "Fees--Early Withdrawal Charge")
> Market Value Adjustment (see Appendix I)
> Tax Penalty (see "Taxation")
> Tax Withholding (see "Taxation")
To determine which may apply, refer to the appropriate sections of this
prospectus, contact your Aetna representative or call the Company at the number
listed in "Contract Overview-- Questions."
Withdrawals
- --------------------------------------------------------------------------------
Making a Withdrawal. Subject to the Tax Code withdrawal restrictions described
below, you may withdraw all or a portion of your account value at any time
during the accumulation phase.
Steps for Making A Withdrawal. You must:
>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 Accumulation
Account (plus or minus any applicable market value adjustment) and to the
Fixed Account, minus any applicable early withdrawal charge.
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.
> Select Investment Options. If this is not specified, we will withdraw dollars
proportionally from each investment option in which you have an account
value.
> Properly complete a disbursement form and submit it to the Opportunity Plus
Service Center.
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 either: (1) As of the next valuation after
we receive a request for withdrawal in good order at the Opportunity Plus
Service Center, or (2) On such later date as specified on the disbursement form.
Delivery of Payment. Payments for withdrawal requests will be made in accordance
with SEC requirements. Normally, the payment will be sent not later than seven
calendar days following our receipt of the disbursement form in good order at
the Opportunity Plus Service Center.
Withdrawal Restrictions from 403(b) Plans. Section 403(b)(11) of the Tax Code
generally prohibits withdrawal under 403(b) contracts prior to your death,
disability, attainment of age 59-1/2, separation from service or financial
hardship, of the following:
1) Salary reduction contributions made after December 31, 1988 and;
2) Earnings on those contributions and earnings on amounts held before 1989 and
credited after December 31, 1988.
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Reinvestment Privilege. The contracts allow one-time use of a reinvestment
privilege. Within 30 days after a full withdrawal, if allowed by law and the
contract, you may elect to reinvest all or a portion of the proceeds. We must
receive reinvested amounts within 60 days of the withdrawal. We will credit the
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 early withdrawal charges imposed
at the time of withdrawal. 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. Special rules
apply to reinvestments of amounts withdrawn from the Guaranteed Accumulation
Account (see Appendix I). Seek competent advice regarding the tax consequences
associated with reinvestment.
Loans
- --------------------------------------------------------------------------------
Availability. You may take a loan from your account value during the
accumulation phase. Loans are only allowed from amounts allocated to certain
subaccounts and fixed interest options. Additional restrictions may apply under
the Tax Code or due to our administrative practices.
Requests. If you are eligible to obtain a loan, you may request one by properly
completing the loan request form and submitting it to the Opportunity Plus
Service Center. Read the terms of the loan agreement before submitting any
request.
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<PAGE>
Features of a Systematic Distribution Option
A Systematic Distribution Option allows the contract holder to elect for you to
receive regular payments from your account, without moving into the income
phase. By maintaining your account in the accumulation phase, certain rights and
flexibility are retained and any accumulation phase fees may apply.
Systematic Distribution Options
- --------------------------------------------------------------------------------
Availability of Systematic Distribution Options. To exercise one of these
options the account value must meet any minimum dollar amount and age criteria
applicable to that option. To determine what Systematic Distribution Options are
available, check with the contract holder or the Company at the Opportunity Plus
Service Center.
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 the payment method selected. It is
designed for those who want a periodic income while retaining investment
flexibility for amounts accumulated under the contract. You may not elect this
option if you have an outstanding contract loan.
> LEO--Life Expectancy Option. This options provides for annual payments for a
number of years equal to your life expectancy or the expectancy of you and a
designated beneficiary. It is designed to meet the substantially equal
periodic payment exception to the 10% premature distribution penalty under Tax
Code Section 72. (See "Taxation.")
> 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 at
the later of age 70-1/2 or retirement and pay you that amount once a year.
> 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 local
representative or from the Company at the Opportunity Plus Service Center.
Availability of Systematic Distribution Options. The Company may discontinue the
availability of one or all of the Systematic Distribution Options at any time,
and/or change the terms of future elections.
Terminating a Systematic Distribution Option. Once a Systematic Distribution
Option is elected, you may revoke it at any time by submitting a written request
to the Opportunity Plus Service Center. Any revocation will apply only to the
amount not yet paid. Once an option is revoked for an account, it may not be
elected again, nor may any other Systematic Distribution Option be elected
unless the Tax Code permits it.
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 the "Fees" section. Taking a withdrawal through a
Systematic Distribution Option may have tax consequences. If you are concerned
about tax implications consult a tax adviser before one of these options is
elected.
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<PAGE>
During the Income Phase
This section provides information about the accumulation phase. For death
benefit information applicable to the income phase, see "Income Phase".
Death Benefit
- --------------------------------------------------------------------------------
The contract provides a death benefit in the event of your death, which is
payable to the beneficiary you name for your account.
During the Accumulation Phase
Payment Process
1. Following your death, your beneficiary must provide the Company with proof of
death acceptable to us and a payment request in good order.
2. The payment request should include selection of a benefit payment option.
3. Within seven days after we receive proof of death acceptable to us and
payment request in good order at the Opportunity Plus Service Center, we will
mail payment, unless otherwise requested.
Until a payment option is selected, account dollars will remain invested as at
the time of your death, and no distribution will be made.
If you die during the accumulation phase of your account, the following payment
options are available to your beneficiary, if allowed by the Tax Code:
> Lump-sum payment;
> Payment in accordance with any of the available income phase payment options
(see "The Income Phase--Payment Options"); or
> If the beneficiary is your spouse, payment in accordance with an available
Systematic Distribution Option (See "Systematic Distribution Options").
The following options are also available; however, the Tax Code limits how long
the death benefit proceeds may be left in these options:
> Leaving your account value invested in the contract; or
> Under some contracts, leaving your account value on deposit in the Company's
general account, and receiving monthly, quarterly, semi-annual or annual
interest payments at the interest rate then being credited on such deposits.
The beneficiary may withdraw the balance on deposit at any time or request to
receive payment in accordance with any of the available income phase payment
options. (See "The Income Phase--Payment Options").
The Value of the Death Benefit. The death benefit will be based on your account
value as calculated on the next valuation following the date on which we receive
proof of death in good order. Interest, if any, will be paid from the date of
death at a rate no less than required by law. For amounts held in the Guaranteed
Accumulation Account (GAA), 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
I and in the GAA prospectus.
Tax Code Requirements. 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.)
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We may have used the following terms in prior prospectuses:
Annuity Phase--Income Phase
Annuity Option--Payment Option
Annuity Payment--Income Phase Payment
Annuitization--Initiating Income Phase Payments
The Income Phase
- --------------------------------------------------------------------------------
During the income phase you stop contributing dollars to your account and start
receiving payments from your accumulated account value.
Initiating Payments. At least 30 days prior to the date you want to start
receiving income phase 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 an assumed net investment rate (only if variable payments are
elected).
Your account will continue in the accumulation phase until you properly initiate
payments. Once a payment option is selected, it may not be changed; however,
certain options allow you to withdraw a lump sum.
What Affects Income Phase Payment Amounts? Some of the factors that may affect
the amount of your income phase payment include: your age, your account value,
the income phase payment option selected, number of guaranteed payments (if any)
selected, and whether fixed, variable or a combination of both fixed and
variable payments are selected; and, for variable payments, the assumed net
investment rate selected.
Fixed Income Phase Payments. Amounts funding fixed income phase payments will be
held in the Company's general account. The amount of fixed payment amounts do
not vary over time.
Variable Payments. Amounts funding your variable income phase payments will be
held in the subaccount(s) selected. The contracts may restrict the subaccounts
available during the income phase. You may make up to twelve transfers per
calendar year among available investment options. For variable payments, an
assumed net investment rate must be selected.
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
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, request a copy of
the Statement of Additional Information by calling the Opportunity Plus Service
Center. (See "Contract Overview--Questions.")
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Minimum Payment Amounts. The income phase payment option selected must result
in one or both of the following:
> A first income phase payment of at least $20; or
> Total yearly income phase payments of at least $100.
If your account value is too low to meet these minimum payment amounts, you must
elect a lump sum payment.
Charges Deducted. During the income phase, we make a daily deduction of 1.25%
annually 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
selected, even though we no longer assume any mortality risk for you. We may
also deduct a daily administrative 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 payment option table below. If a lump-sum
payment is due as a death benefit, we will make payment within seven calendar
days after we receive proof of death acceptable to us and the payment request in
good order at the Opportunity Plus Service Center.
Taxation. To avoid certain tax penalties, you and any beneficiary must meet the
distribution rules imposed by the Tax Code. (See "Taxation.")
Income Phase Payment Options
The following tables list the income phase payment options and accompanying
death benefits which may be available under the contracts. Some contracts
restrict the options and the terms available. Check with your contract holder
for details. We may offer additional income phase payment options under the
contract from time to time.
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Terms used in the Tables:
Annuitant: The person(s) on whose life expectancy the income phase payments are
calculated.
Beneficiary: The person designated to receive the death benefit payable under
the contract.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Lifetime Income Phase Payment Options
- ---------------------------------------------------------------------------------------------------------------------
<S> <C>
Length of Payments: For as long as the annuitant lives. It is possible that
Life Income only one payment will be made should the annuitant die prior to the second
payment's due date.
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 a choice of 5-30 years or as otherwise specified in the contract.
Life Income-- Death Benefit--Payment to the Beneficiary: If the annuitant dies before we
Guaranteed have made all the guaranteed payments, we will continue to pay the beneficiary
Payments the remaining payments. Unless prohibited by a prior election of the contractholder,
the beneficiary may elect 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 should both annuitants die before the second payment's
due date. Continuing Payments:
(a) This option allows a choice of 100%, 66-2/3% or 50% of the payment to continue
Life Income-- to the surviving annuitant after the first 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 to continue to the second annuitant on the annuitant's
death.
- ---------------------------------------------------------------------------------------------------------------------
Death Benefit--None: Payments end after the deaths of both annuitants.
Length of Payments: For as long as either annuitant lives, with payments guaranteed
for a minimum of 60 months and a maximum of 360 months, or as otherwise specified in
the contract.
Life Income-- Continuing Payments: 100% of the payment to continue to the surviving annuitant
Two Lives-- after the first death.
Guaranteed Death Benefit--Payment to the Beneficiary: If both annuitants die before the guaranteed
Payments payments have all been paid, we will continue to pay the beneficiary the remaining payments.
Unless prohibited by a prior election of the contractholder, the beneficiary may elect
to receive a lump-sum payment equal to the present value of the remaining guaranteed payments.
- ---------------------------------------------------------------------------------------------------------------------
Life Income-- Length of Payments: For as long as the annuitants lives.
Refund Option-- premium tax) and less the total amount of fixed income payments paid.
fixed payment only
--------------------------------------------------------------------------------------------------------------------
Life Income-- Length of Payments: For as long as either annuitant lives.
Two Lives--Cash Continuing Payment: 100% of the payment to continue after the first death.
Refund Option-- (less any premium tax) and less the total amount of fixed income payments paid.
fixed payment only
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Nonlifetime Income Phase Payment Options
- -----------------------------------------------------------------------------------------------------------
<S> <C>
Length of Payments: Payments generally may be fixed or variable and may be made for
3-30 years. In certain cases a lump sum payment may be requested at any time (see below).
Death Benefit--Payment to the Beneficiary: If the annuitant dies before we make all the
Nonlifetime-- guaranteed payments, we will continue to pay the beneficiary the remaining payments.
Guaranteed Unless prohibited by a prior election of the contractholder, the beneficiary may receive
Payments a lump-sum payment equal to the present value of the remaining guaranteed payments, and
we will not impose any early withdrawal charge.
- -----------------------------------------------------------------------------------------------------------
Lump-Sum Payment: 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 sum. A lump sum elected before three years of payments have been completed will be treated as a
withdrawal during the accumulation phase and we will charge any applicable early withdrawal charge. If
the early withdrawal charge is based on completed purchase payment periods, each year that passes after
income payments begin will be treated as a completed purchase payment period, even if no additional
payments are made. (See "Fees--Early Withdrawal Charge.") Lump-sum payments will be sent within seven
calendar days after we receive the request for payment in good order at the Opportunity Plus Service
Center.
Calculation of Lump-Sum Payments: If a lump-sum payment is available to a beneficiary or to you in the
options above, the rate we use to calculate the present value of the remaining guaranteed payments is the
same rate we use to calculate the income phase payments (i.e., the actual fixed rate used for fixed
payments, or the 3-1/2% or 5% assumed net investment rate for variable payments.)
- -----------------------------------------------------------------------------------------------------------
</TABLE>
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In This Section
> Introduction
> The Contract
> Withdrawals and Other Distributions
o Taxation of Distributions
o 10% Penalty Tax
o Withholding for Federal Income Tax Liability
> Minimum Distribution Requirements
> Assignment or Transfer of Contracts
> Exclusion from Gross Income
> Restrictions on Distributions
> Transfers from 403(b)(7) Custodial Accounts
> Taxation of Gains Prior to Distribution
> 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.
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.
> We do not make any guarantee about the tax treatment of the contract or
transaction 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. For more comprehensive information contact
the Internal Revenue Service.
- --------------------------------------------------------------------------------
The Contract
The Contract is designed for use with Tax Code section 403(b) plans. Contract
holders and participants 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, and death benefit proceeds.
We report the taxable portion of all distributions to the IRS.
Taxation of Distributions
All distributions from 403(b) plans are taxed as received unless:
> The distribution is rolled over to another plan of the same type or to a
traditional individual retirement annuity/account (IRA) in accordance with the
Tax Code; or
> You made after-tax contributions to the plan. In this case, depending upon the
type of distribution, a portion of the amount may be excluded from gross
income according to the rules detailed in the Tax Code.
In general, payments received by your beneficiaries after your death are taxed
in the same manner as if you had received those payments.
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<PAGE>
10% Penalty Tax
The Tax Code may impose a 10% penalty tax on the taxable portion of a
distribution from a 403(b) plan, unless one or more of the following have
occurred:
> You have attained age 59-1/2;
> You have become totally and permanently disabled;
> You have died;
> You have separated from service with the plan sponsor at or after age 55;
> The distribution is rolled over into another plan of the same type or to an
IRA in accordance with the Tax Code;
> The distribution is due to an IRS levy upon the individual's account; or
> 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. Also, you must have separated from
service with the plan sponsor.
In addition, the penalty tax does not apply for the amount of a distribution
equal to unreimbursed medical expenses that qualify for deduction as specified
in the Tax Code. The Tax Code may impose other penalty taxes in other
circumstances.
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, distributions from 403(b) plans are subject to a mandatory 20%
federal income tax withholding. However, you or a beneficiary may elect not to
have tax withheld from certain distributions. If you or your beneficiary is 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. 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 by April 1 of the
calendar year following the calendar year in which you attain age 70-1/2 or
retire, whichever occurs later, unless you had amounts under the contract as of
December 31, 1986. In this case, distribution of these amounts generally must
begin by the end of the calendar year in which you attain age 75 or retire, if
later. However, if you take any distributions in excess of the minimum required
amount, then special rules require that some or all of the December 31, 1986
balance be distributed earlier.
Time Period. We must pay out distributions from the contract over one of the
following time periods:
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> 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. Different distribution
requirements apply if your death occurs:
> 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. Tax Code section 401(a)(9) provides specific
rules for calculating the minimum required distributions at your death. The
rules differ, dependent upon:
> 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 distribution begins by
December 31 of the calendar year following the calendar year of your death, then
payments may be made in 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, the
distribution 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 70-1/2.
Assignment or Transfer of Contracts
Adverse tax consequences to the plan and/or to you may result if your beneficial
interest in the contract is assigned or transferred to any person except to an
alternate payee under a qualified domestic relations order in accordance with
Tax Code section 414(p) or to the Company as collateral for a loan.
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<PAGE>
Exclusions from Gross Income
Under Tax Code section 403(b), contributions made by public school systems or
nonprofit healthcare organizations and other Tax Code section 501(c)(3) tax
exempt organizations to purchase annuity contracts for their employees are
generally excludable from the gross income of the employee.
In order to be excludable from gross income, total annual contributions made by
you and your employer to a 403(b) plan cannot exceed the lesser of the following
limits set by the Tax Code:
> The first limit, under Tax Code section 415, is generally the lesser of 25% of
your compensation or $30,000. Compensation means your compensation from the
employer sponsoring the plan and, for years beginning after December 31, 1997,
includes any elective deferrals under Tax Code section 402(g) and any amounts
not includible in gross income under Tax Code sections 125 or 457.
> The second limit, which is the exclusion allowance under Tax Code section
403(b), is usually calculated according to a formula that takes into account
your length of employment, any pretax contributions you and your employer have
already made under the plan, and any pretax contributions to certain other
retirement plans.
These two limits apply to your contributions as well as to any contributions
made by your employer on your behalf.
> An additional limit specifically limits your salary reduction contributions to
generally no more than $10,500 annually (subject to indexing). Your own limit
may be higher or lower, depending on certain conditions.
Payments to your account(s) will be excluded from your gross income only if the
plan meets certain nondiscrimination requirements.
Restrictions on Distributions.
Tax Code section 403(b)(11) restricts the distribution under 403(b) contracts
of:
> salary reduction contributions made after December 31, 1988;
> earnings on those contributions; and
> earnings during such period on amounts held as of December 31, 1988.
Distribution of those amounts may only occur upon your death, attainment of age
59-1/2, separation from service, disability, or financial hardship. Income
attributable to salary reduction contributions and credited on or after January
1, 1989 may not be distributed in the case of hardship.
Transfers from 403(b)(7) Custodial Accounts.
If pursuant to Revenue Ruling 90-24, the Company agrees to accept under the
contracts amounts transferred from a code section 403(b)(7) custodial account,
such amounts will be subject to the withdrawal restrictions set forth in code
section 403(b)(7)(A)(iii).
Taxation of Gains Prior to Distribution.
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 under Tax Code section 403(b) also generally defer payment of taxes
on earnings until they are withdrawn. (See "Taxation of Distributions" in
32
<PAGE>
this "Taxation" section for a discussion of how distributions under 403(b) plans
are taxed.) When an annuity contract is used to fund a tax-qualified retirement
arrangement with an annuity contract, you should know that the annuity contract
does not provide any additional tax deferral of earnings beyond the tax deferral
provided by the tax-qualified retirement arrangement. However, annuities do
provide other features and benefits which may be valuable to you. You should
discuss your alternatives with your financial representative.
Additionally, although earnings under the contract are generally not taxed until
withdrawn, the IRS has stated in published rulings that a variable contract
owner, including participants under Tax Code section 403(b) plans, will be
considered the owner of separate account assets if the 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 owner from being considered the
federal tax owner of a pro rata share of the assets of the separate account.
Taxation of the Company
We are taxed as a life insurance company under the Tax Code. Variable Annuity
Separate 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
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.
33
<PAGE>
Other Topics
- --------------------------------------------------------------------------------
The Company
Aetna Life Insurance and Annuity Company (the Company, we, us, our) issues the
contracts described in this 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 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 (the "40 Act"). It also meets the definition of "separate account"
under the federal securities laws.
The separate account is divided into "subaccounts." These 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.
Performance Reporting
We may advertise different types of historical performance for the subaccounts
including:
> Standardized average annual total returns; and
> Non-standardized average annual total 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, request a Statement of Additional
Information at the number listed in "Contract Overview--Questions."
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 10-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 the deduction of all recurring
34
<PAGE>
charges during each period (e.g., 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. 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.
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. Under the contracts described in this
prospectus, you have a fully vested interest in the value of your account.
Therefore, under the plan you generally have the right to instruct the contract
holder how to direct us to vote shares attributable to your account. Currently,
for group contracts used with section 403(b) plans, we obtain participant voting
instructions directly from participants, subject to receipt of authorization
from the contract holder to accept such instructions. 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) any person is entitled to
direct will be determined as of the record date set by any fund in which that
person invests through the subaccounts.
> During the accumulation phase the number of votes is equal to the portion of
the 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.
Contract Distribution
The Company will serve as the principal underwriter for the securities sold by
this prospectus. The Company is registered as a broker-dealer with the SEC and
is a member of the National Association of Securities Dealers, Inc. (NASD).
As principal underwriter, the Company will enter into arrangements with one or
more registered broker-dealers, including at least one affiliate of the Company,
to offer and sell the contracts described in this prospectus. We call these
entities "distributors."
We and one or more of our affiliates may also sell the contracts directly. All
individuals offering and selling the contracts must be registered
representatives of a broker-dealer and must be licensed as insurance agents to
sell variable annuity contracts.
35
<PAGE>
Commission Payments. We may pay commissions to persons who offer and sell the
contracts. The maximum percentage amount we ever pay with respect to a given
purchase payment is the first-year percentage which ranges from 1% to 4% of the
first year of payments to an account. We may also pay renewal commissions on
payments made after the first year and asset-based service fees. The average of
all commissions and asset-based service fees paid is estimated to equal
approximately 2.5% of the total payments made over the life of an average
contract. 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.
We may reimburse the distributor for certain expenses. The name of the
distributor and the registered representative responsible for your account are
stated in your enrollment materials. Commissions and sales related expenses are
paid by us and are not deducted from payments to your account.
Changes in Beneficiary Designations
The designated Beneficiary may be changed at any time. Such change will not
become effective until written notice of the change is received by the Company.
Opportunity Plus Service Center
We established the Opportunity Plus Service Center to provide administrative
support to you and other participants of the Opportunity Plus Program. This
office handles enrollment, billing, transfers, redemptions and inquiries. Send
forms and correspondence to:
Aetna Life Insurance and Annuity Company
Opportunity Plus Service Center
P.O. Box 12894
Albany, New York 12212-2894
Telephone Number: 1-800-677-4636
Agreement with the Company
NYSUT Benefit Trust is a non-profit trust organized and existing under the laws
of the State of New York. This Trust operates for the benefit of its members and
agency fee payers of New York State United Teachers.
The Company (our, we) and NYSUT Benefit Trust agree to the following:
> Sponsorship of the Opportunity Plus program by NYSUT Benefit Trust;
> Our provision, to all members and agency fee payers of educational programs
focused on financial planning for retirement; and
> Our employment of trained personnel to conduct these programs exclusively for
members.
Additionally:
> We reimburse NYSUT Benefit Trust for direct out-of-pocket expenses up to a
maximum of $40,000 per year incurred in the promotion of the Opportunity Plus
program.
> We will pay NYSUT Benefit Trust $46,000 per month through 2000. It utilizes
these amounts to enhance benefits to the membership.
36
<PAGE>
> We compensate United University Professions $4,000 per month for the use of
on-site campus facilities and the sponsorship of the Opportunity Plus program.
Contract Modification
We may change the contract as required by federal or state law. In addition, we
may, upon 30 days' written notice to the contract holder, make other changes to
group contracts that would apply only to individuals who become participants
under that contract after the effective date of such changes. If the group
contract holder does not agree to a change, we reserve the right to refuse to
establish new accounts under the contract. Certain changes will require the
approval of appropriate state or federal regulatory authorities.
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 Comapny 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.
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: (a) on any valuation date when the
New York Stock Exchange is closed (except customary weekend and holidays) when
trading on the Exchange is restricted; b) 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 fairly determine
the value of the subaccount's assets; (c) during any other periods the SEC may
by order permit 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.
Intent to Confirm Quarterly
We will provide confirmation of scheduled transactions quarterly rather than
immediately to the participant.
37
<PAGE>
Contents of the Statement of Additional Information
- --------------------------------------------------------------------------------
The Statement of Additional Information 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
Variable Annuity Account C
Offering and Purchase of Contracts
Performance Data
General
Average Annual Total Return Quotations
Income Phase Payments
Sales Material and Advertising
Independent Auditors
Financial Statements of the Separate Account
Financial Statements of Aetna Life Insurance and Annuity Company
You may request an SAI by calling the Opportunity Plus Service Center at the
number listed in "Contract Overview -- Questions."
38
<PAGE>
Appendix I
Guaranteed Accumulation Account
- --------------------------------------------------------------------------------
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 about GAA. Please read 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
representative or the Company to learn:
> The interest rate we will apply to the amounts that you invest in GAA. We
change this rate periodically, so be certain 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. For a
particular interest rate and guaranteed term to apply to your account dollars,
you must invest them during the deposit period during 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.
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"; or
> Early Withdrawal Charge--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 you have elected ECO as described in
"Systematic Distribution Options," no MVA applies to amounts withdrawn from GAA.
> 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 specified for that
guaranteed term. We offer different guaranteed terms at different times. Check
with your representative or the Company to learn the details about the
guaranteed term(s) currently being offered.
39
<PAGE>
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
section.
Transfer of Account Dollars. 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.
Income Phase. GAA can not be used as an investment option during the income
phase. However, you may notify us at least 30 days in advance to elect a
variable payment option and to transfer your GAA account dollars to any of the
subaccounts available during the income phase.
Borrowing Against Amounts held in GAA. You cannot take a loan from your account
value in GAA. However, we include your account value in GAA when determining the
amount of your account value we will distribute as a loan.
Reinvesting Amounts Withdrawn from GAA. 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.
40
<PAGE>
Appendix II
Fixed Account
- --------------------------------------------------------------------------------
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.
The Fixed Account is only available under installment purchase payment
contracts.
- --------------------------------------------------------------------------------
Additional information about this option may be found in the contract.
- --------------------------------------------------------------------------------
General Disclosure. 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 about 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.
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. Interest rate
guarantees are based on the claims-paying ability of the Company. 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.
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.
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--Early Withdrawal Charge.")
Transfers. During the accumulation phase, you may transfer account dollars from
the Fixed Account to any other available investment option. There is no limit on
the number of transfers that you can make out of the Fixed Account in a calendar
year. However, we only allow you to transfer amounts which equal your account
value in the Fixed Account multiplied by the current maximum percentage of the
transfer allowed (the "window") minus any previous transfers you made from this
option during the calendar year. We will waive the transfer limit when your
account value in the Fixed Account is $1,000 or less.
Income Phase. By notifying the Opportunity Plus Service Center at least 30 days
before income 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.
Contract Loans. Contract loans may be made from account values held in the
Fixed Account.
41
<PAGE>
Appendix III
Fund Descriptions
- --------------------------------------------------------------------------------
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. 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.(1)
> Aetna Income Shares d/b/a Aetna Bond VP 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.(1)
> Aetna Variable Fund d/b/a Aetna Growth and Income VP 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.(1)
> Aetna Variable Encore Fund d/b/a Aetna Money Market VP seeks to provide high
current return, consistent with preservation of capital and liquidity, through
investment in high-quality money market instruments. An investment in the fund
is neither insured nor guaranteed by the U.S. Government.(1)
> Aetna Generation Portfolios, Inc.--Aetna Ascent VP seeks to provide capital
appreciation. The Portfolio is managed for investors who generally have an
investment horizon exceeding 15 years and who have a high level of risk
tolerance.(1)
> Aetna Generation Portfolios, Inc.--Aetna Crossroads VP seeks to provide total
return (i.e., income and capital appreciation, both realized and unrealized).
The Portfolio is managed for investors who generally have an investment
horizon exceeding 10 years and who have a moderate level of risk tolerance.(1)
> Aetna Generation Portfolios, Inc.--Aetna Legacy VP seeks to provide total
return consistent with preservation of capital. The Portfolio is managed for
investors who generally have an investment horizon exceeding five years and
who have a low level of risk tolerance.(1)
> Aetna Variable Portfolios, Inc.--Aetna Index Plus Bond VP seeks maximum total
return, consistent with preservation of capital, primarily through investment
in a diversified portfolio of fixed-income securities, which will be chosen
to substantially replicate the characteristics of the Lehman Brothers
Aggregate Bond Index (LBAB), an unmanaged index comprised of approximately
6,900 securities.(1)
> Aetna Variable Portfolios, Inc.--Aetna Index Plus Large Cap VP 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.(1)
> Aetna Variable Portfolios, Inc.--Aetna Index Plus Mid Cap VP 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.(1)
> Aetna Variable Portfolios, Inc.--Aetna Index Plus Small Cap VP seeks to
outperform the total return performance of the Standard & Poor's SmallCap 600
Index (S&P 600), while maintaining a market level of risk.(1)
> Aetna Variable Portfolios, Inc.--Aetna Value Opportunity VP seeks growth of
capital primarily through investment in a diversified portfolio of common
stocks and securities convertible into common stock. (1)
> Calvert Social Balanced Portfolio is a nondiversified portfolio that seeks to
achieve a competitive total return through an actively managed portfolio of
stocks, bonds, and money market instruments which offer income and capital
growth opportunity and which satisfy the investment and social criteria
established for the Portfolio.(2)(a)
42
<PAGE>
> Fidelity Variable Insurance Products Fund Equity--Income Portfolio seeks
reasonable income. The fund will also consider the potential for capital
appreciation. The fund seeks a yield which exceeds the composite yield on the
securities comprising the S&P 500.(3)
> Fidelity Variable Insurance Products Fund--High Income Portfolio seeks a high
level of current income while also considering growth of capital.(3)(a)
> Fidelity Variable Insurance Products Fund II-- Asset Manager Portfolio seeks
high total return with reduced risk over the long term by allocating its
assets among stocks, bonds and short-term instruments.(3)(b)
> Fidelity Variable Insurance Products Fund II--Contrafund[RegTM] Portfolio
seeks long term capital appreciation by investing primarily in common stocks
of companies whose value the investment adviser believes is not fully
recognized by the public.(3)(a)
> Fidelity Variable Insurance Products Fund II--Index 500 Portfolio seeks
investment results that correspond to the total return of common stocks
publicly traded in the United States, as represented by the S&P 500.(3)(c)
> Janus Aspen Series--Aggressive Growth Portfolio is a nondiversified portfolio
that seeks long-term growth of capital. The Portfolio pursues its investment
objective by investing 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 S&P MidCap 400 Index. Market capitalization is a commonly used measure
of the size and value of a company. The market capitalizations within the
Index will vary, but as of December 31, 1999, they ranged from approximately
$170 million to $37 billion.(4)
> Janus Aspen Series--Growth Portfolio seeks long-term growth of capital in a
manner consistent with the preservation of capital. The Portfolio pursues its
investment objective by investing primarily in common stocks selected for
their growth potential. Although the Portfolio can invest in companies of any
size, it generally invests in larger, more established issuers.(3)
> Janus Aspen Series--Worldwide Growth Portfolio seeks long-term growth of
capital in a manner consistent with the preservation of capital. The Portfolio
pursues its investment objective by investing primarily in common stocks of
companies of any size throughout the world. The Portfolio normally invests in
issuers from at least five different countries, including the United States.
The Portfolio may at times invest in fewer than five countries or even a
single country.(4)
> Lexington Emerging Markets Fund, Inc. seeks long-term growth of capital
primarily through investment in equity securities of companies domiciled in,
or doing business in emerging countries and emerging markets. Investments in
emerging markets involve risks not present in domestic markets. See the Fund's
prospectus for information on risks inherent in this investment.(5)(a)
> Lexington Natural Resources Trust is a nondiversified portfolio that seeks
long-term growth of capital through investment primarily in common stocks of
companies which own or develop natural resources and other basic commodities
or supply goods and services to such companies.(5)(b)
> MFS Total Return Series seeks primarily to provide above average income
(compared to a portfolio invested entirely in equity securities) consistent
with the prudent employment of capital. Its secondary objective is to provide
a reasonable opportunity for growth of capital and income. The series is a
"balanced fund." Under normal market conditions, the series invests (i) at
least 40%, but not more than 75%, of its net assets in equity securities; and
(ii) at least 25% of its net assets in non-convertible fixed income
securities.(6)
> Oppenheimer Global Securities Fund/VA 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.(7)
> Oppenheimer Strategic Bond Fund/VA 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.(7)
> Portfolio Partners, Inc. (PPI)-MFS Capital Opportunities Portfolio (formerly
known as PPI MFS Value Equity Portfolio) seeks capital appreciation.(8)(a)
43
<PAGE>
> Portfolio Partners, Inc. (PPI)--MFS Emerging Equities Portfolio seeks
long-term growth of capital.(8)(a)
> Portfolio Partners, Inc. (PPI)--MFS Research Growth Portfolio seeks long-term
growth of capital and future income.(8)(a)
> Portfolio Partners, Inc. (PPI)--Scudder International Growth Portfolio seeks
long-term growth of capital.(8)(b)
> Portfolio Partners, Inc. (PPI)--T. Rowe Price Growth Equity Portfolio seeks
long-term capital growth, and secondarily, increasing dividend income.(8)(c)
Investment Adviser:
(1) Investment Adviser: Aeltus Investment Management, Inc.
(2) Investment Adviser: Calvert Asset Management Company, Inc.
(a) NCM Capital Management, Inc. (subadviser)
(3) Investment Adviser: Fidelity Management & Research Company
(a) Fidelity Management & Research (U.K.) Inc. (subadviser)
Fidelity Management & Research Far East Inc. (subadviser)
Fidelity Investments Japan Limited (subadviser)
(b) Fidelity Management & Research (U.K.) Inc. (subadviser)
Fidelity Management & Research Far East Inc. (subadviser)
Fidelity Investments Japan Limited (subadviser)
Fidelity Investments Money Management, Inc. (subadviser)
(c) Bankers Trust Company (subadviser)
(4) Investment Adviser: Janus Capital Corporation
(5) Investment Adviser: Lexington Management Corporation
(a) Stratos Advisors, Inc. (subadviser)
(b) Market Systems Research Advisors, Inc. (subadviser)
(6) Investment Adviser: Massachusetts Financial Services Company
(7) Investment Adviser: OppenheimerFunds, Inc.
(8) Investment Adviser: Aetna Life Insurance and Annuity Company
(a) Massachusetts Financial Services Company (subadviser)
(b) Scudder Kemper Investments, Inc. (subadviser)
(c) T. Rowe Price Associates, Inc. (subadviser)
44
<PAGE>
Appendix IV
Condensed Financial Information
- --------------------------------------------------------------------------------
(Selected data for accumulation units outstanding throughout each period)
================================================================================
The condensed financial information presented below for each of the periods 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
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
BOND VP
Value at beginning of
period $ 10.578 $ 10.128(2)
Value at end of period $ 10.333 $ 10.578
Number of accumulation
units outstanding at
end of period 96,745 134,777
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(2)
Value at end of period $ 12.967 $ 11.338
Number of accumulation
units outstanding at
end of period 73,984 35,201
<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
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
BOND 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
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
</TABLE>
45
<PAGE>
Condensed Financial Information (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998 1997 1996
----------- --------- --------- -----------
<S> <C> <C> <C> <C>
AETNA INDEX PLUS
SMALL CAP VP
Value at beginning of
period $ 9.157 $ 10.193(2)
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(4)
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(2)
Value at end of period $ 14.274 $ 12.088
Number of accumulation
units outstanding at
end of period 74,768 33,957
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 HIGH
INCOME PORTFOLIO
Value at beginning of
period $ 9.023 $ 9.995(2)
Value at end of period $ 9.638 $ 9.023
Number of accumulation
units outstanding at
end of period 194,440 178,601
FIDELITY VIP II ASSET
MANAGER PORTFOLIO
Value at beginning of
period $ 16.719 $ 14.715 $ 12.349 $ 10.912
Value at end of period $ 18.343 $ 16.719 $ 14.715 $ 12.349
Number of accumulation
units outstanding at
end of period 1,511,789 1,596,943 1,576,603 1,384,927
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
<CAPTION>
1995 1994 1993 1992 1991 1990
--------- --------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
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
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(5)
Value at end of period $ 11.617
Number of accumulation
units outstanding at
end of period 628,582
FIDELITY VIP HIGH
INCOME PORTFOLIO
Value at beginning of
period
Value at end of period
Number of accumulation
units outstanding at
end of period
FIDELITY VIP II ASSET
MANAGER PORTFOLIO
Value at beginning of
period $ 9.447 $ 10.000(6)
Value at end of period $ 10.912 $ 9.447
Number of accumulation
units outstanding at
end of period 1,316,916 1,254,504
FIDELITY VIP II
CONTRAFUND[RegTM]
PORTFOLIO
Value at beginning of
period $ 10.000(5)
Value at end of period $ 11.763
Number of accumulation
units outstanding at
end of period 525,476
</TABLE>
46
<PAGE>
Condensed Financial Information (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998 1997 1996
----------- --------- ----------- -----------
<S> <C> <C> <C> <C>
FIDELITY VIP II
INDEX 500
PORTFOLIO
Value at beginning of
period $ 23.650 $ 18.662 $ 14.240 $ 11.740
Value at end of period $ 28.147 $ 23.650 $ 18.662 $ 14.240
Number of accumulation
units outstanding at
end of period 4,354,723 3,947,187 3,093,080 1,490,937
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
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
LEXINGTON EMERGING
MARKETS FUND, INC.
Value at beginning of
period $ 5.470 $ 7.715 $ 8.832 $ 8.323
Value at end of period $ 12.315 $ 5.470 $ 7.715 $ 8.832
Number of accumulation
units outstanding at
end of period 940,817 745,856 750,330 548,618
LEXINGTON NATURAL
RESOURCES TRUST
Value at beginning of
period $ 11.433 $ 14.403 $ 13.611 $ 10.862
Value at end of period $ 12.882 $ 11.433 $ 14.403 $ 13.611
Number of accumulation
units outstanding at
end of period 437,491 534,962 650,486 587,248
MFS TOTAL RETURN
SERIES
Value at beginning of
period $ 10.531 $ 10.182(2)
Value at end of period $ 10.720 $ 10.531
Number of accumulation
units outstanding at
end of period 63,822 36,633
OPPENHEIMER GLOBAL
SECURITIES FUND/VA
Value at beginning of
period $ 10.303 $ 10.077(10)
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(2)
Value at end of period $ 10.089 $ 9.935
Number of accumulation
units outstanding at
end of period 173,219 100,555
<CAPTION>
1995 1994 1993 1992 1991 1990
--------- --------- -------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
FIDELITY VIP II
INDEX 500
PORTFOLIO
Value at beginning of
period $ 10.000(5)
Value at end of period $ 11.740
Number of accumulation
units outstanding at
end of period 290,547
JANUS ASPEN
AGGRESSIVE
GROWTH PORTFOLIO
Value at beginning of
period $ 12.169 $ 10.000(7)
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
GROWTH PORTFOLIO
Value at beginning of
period $ 10.000(8)
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(8)
Value at end of period $ 12.158
Number of accumulation
units outstanding at
end of period 314,653
LEXINGTON EMERGING
MARKETS FUND, INC.
Value at beginning of
period $ 8.772 $ 10.000(9)
Value at end of period $ 8.323 $ 8.772
Number of accumulation
units outstanding at
end of period 371,156 144,750
LEXINGTON NATURAL
RESOURCES TRUST
Value at beginning of
period $ 9.412 $ 10.071 $ 9.193 $ 9.018 $ 9.608 $11.441
Value at end of period $ 10.862 $ 9.412 $ 10.071 $ 9.193 $ 9.018 $ 9.608
Number of accumulation
units outstanding at
end of period 530,562 533,016 341,771 198,338 144,139 75,052
MFS TOTAL RETURN
SERIES
Value at beginning of
period
Value at end of period
Number of accumulation
units outstanding at
end of period
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
</TABLE>
47
<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 CAPITAL
OPPORTUNITIES
PORTFOLIO
Value at beginning of
period $ 29.339 $ 23.440 $ 23.106(11)
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
PPI MFS EMERGING
EQUITIES
PORTFOLIO
Value at beginning of
period $ 19.268 $ 15.046 $ 15.236(11)
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(11)
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(11)
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(11)
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>
- -----------------
(1) Funds were first received in this option during February 1997. (2) Funds
were first received in this option during May 1998.
(3) Funds were first received in this option during December 1997.
(4) Funds were first received in this option during May 1997.
(5) The initial accumulation unit value was established at $10.000 during May
1995, when the fund became available under the contract.
(6) The initial accumulation unit value was established at $10.000 during March
1994, when funds were first received under this option.
(7) The initial accumulation unit value was established at $10.000 during June
1994, when funds were first received in this option.
(8) The initial accumulation unit value was established at $10.000 during July
1995, when the fund became available under the contract.
(9) Funds were first received in this option during October 1994.
(10) Funds were first received in this option during June 1998.
(11) Funds were first received in this option during November 1997.
48
<PAGE>
For Master Applications Only
- --------------------------------------------------------------------------------
I hereby acknowledge receipt of an Account C Opportunity Plus group deferred
variable annuity prospectus dated May 1, 2000 as well as all current
prospectuses pertaining to the variable investment options available under the
Contracts.
- --- Please send an Account C Statement of Additional Information (Form No.
SAI.75962-00) dated May 1, 2000.
- --------------------------------------------------------------------------------
CONTRACT HOLDER'S SIGNATURE
- --------------------------------------------------------------------------------
DATE
PROS.75962-00
<PAGE>
- --------------------------------------------------------------------------------
VARIABLE ANNUITY ACCOUNT C
OF
AETNA LIFE INSURANCE AND ANNUITY COMPANY
- --------------------------------------------------------------------------------
Statement of Additional Information dated May 1, 2000
for
OPPORTUNITY PLUS
Group Variable Multiple Option Annuity Contracts
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 Life Insurance and Annuity Company
Opportunity Plus Service Center
P. O. Box 12894
Albany, New York 12212-2894
1-800-677-4636
Read the prospectus before you invest. Unless otherwise indicated, terms used in
this Statement of Additional Information have the same meaning as in the
prospectus.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
General Information and History................................................. 2
Variable Annuity Account C...................................................... 3
Offering and Purchase of Contracts.............................................. 3
Performance Data................................................................ 4
General..................................................................... 4
Average Annual Total Return Quotations...................................... 4
Income Phase Payments........................................................... 8
Sales Material and Advertising.................................................. 9
Independent Auditors............................................................ 9
Financial Statements of the Separate Account.................................... S-1
Financial Statements of Aetna Life Insurance and Annuity Company................ F-1
</TABLE>
1
<PAGE>
GENERAL INFORMATION AND HISTORY
Aetna Life Insurance and Annuity Company (the "Company," we, us, our) is a stock
life insurance company which was organized under the insurance laws of the State
of Connecticut in 1976. Through a merger, it succeeded to the business of Aetna
Variable Annuity Life Insurance Company (formerly Participating Annuity Life
Insurance Company organized in 1954). 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 based on assets among the top 2% of all life
insurance companies rated by A.M. Best Company as of December 31, 1998. The
Company is an indirect wholly-owned subsidiary of Aetna Inc. The Company is
engaged in the business of issuing life insurance policies and annuity
contracts. Our Home Office is located at 151 Farmington Avenue, Hartford,
Connecticut 06156.
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).
The Company has established the Opportunity Plus Service Center to provide
administrative support to contract holders and participants investing in the
Opportunity Plus Contract. This office will handle enrollments, billing,
transfers, redemptions, and inquiries for all Opportunity Plus contract holders
and participants. All forms and correspondence should be sent to:
Aetna Life Insurance and Annuity Company
Opportunity Plus Service Center
P. O. Box 12894
Albany, New York 12212-2894
Telephone number: 1-800-677-4636
Other than the mortality and expense risk charges 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.
2
<PAGE>
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.
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 substitution of
available variable 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, under all contracts, or under all plans. The funds currently
available under the contract are as follows:
<TABLE>
<S> <C>
o Aetna Ascent VP o Fidelity Variable Insurance Products Fund (VIP)
o Aetna Balanced VP, Inc. High Income Portfolio
o Aetna Income Shares d/b/a Aetna Bond VP o Fidelity Variable Insurance Products Fund II (VIP II)
o Aetna Crossroads VP Asset Manager Portfolio
o Aetna Variable Fund d/b/a Aetna Growth and Income VP o Fidelity Variable Insurance Products Fund II (VIP II)
o Aetna Index Plus Bond VP* Contrafund[Reg TM] Portfolio
o Aetna Index Plus Large Cap VP o Fidelity Variable Insurance Products Fund II (VIP II)
o Aetna Index Plus Mid Cap VP Index 500 Portfolio
o Aetna Index Plus Small Cap VP o Janus Aspen Aggressive Growth Portfolio
o Aetna Legacy VP o Janus Aspen Growth Portfolio
o Aetna Variable Encore Fund d/b/a Aetna Money Market VP o Janus Aspen Worldwide Growth Portfolio
o Aetna Value Opportunity VP o Lexington Emerging Markets Fund, Inc.
o Calvert Social Balanced Portfolio o Lexington Natural Resources Trust**
o Fidelity Variable Insurance Products Fund o MFS Total Return Series
(VIP) Equity-Income Portfolio o Oppenheimer Global Securities Fund/VA
o Oppenheimer Strategic Bond Fund/VA
o Portfolio Partners Inc. (PPI) MFS Capital Equities Portfolio
(formerly known as Portfolio Partners MFS Value Equity Portfolio)
o Portfolio Partners Inc. (PPI) MFS Emerging Equities Portfolio
o Portfolio Partners Inc. (PPI) MFS Research Growth Portfolio
o Portfolio Partners Inc. (PPI) Scudder International Growth
Portfolio
o Portfolio Partners Inc. (PPI) T. Rowe Price Growth Equity
Portfolio
</TABLE>
*Effective May 15, 2000, transfers or deposits are not allowed into the
subaccount investing in this fund except those made pursuant to standing
customer instructions (e.g., payroll deduction allocations, dollar cost
averaging) in effect prior to this date.
** Transfers or deposits are not allowed into the subaccount investing in this
fund, except from accounts established under the contract before May 1, 1998. As
soon as all those who have current allocations to the subaccount under the
contract have redirected their allocations to other investment options, we will
close the subaccount to all investments (except loan repayments that we
automatically deposit into the subaccount according to our loan repayment
procedures).
Complete descriptions of each of the funds, including their investment
objectives, policies, risks and fees and expenses, is 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 by 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 contracts are purchased may be found in the prospectus under the
sections titled "Contract - Ownership and Rights" and "Your Account Value."
3
<PAGE>
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 contracts. 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 payment of $1,000 is
applied 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 fund under the separate account and
then adjust them to reflect the deduction of all applicable recurring charges
under the contracts during each period (e.g., mortality and expense risk
charges, administrative expense charges, if any, and early withdrawal charges).
These charges will be deducted on a pro rata basis in the case of fractional
periods. 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
(which 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.
Investment results of the subaccounts 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 shown below show the average annual standardized and non-standardized
total return quotation figures for the periods ended December 31, 1999 for the
subaccounts under installment purchase payment contracts. Both sets of returns
reflect the 1.25% annual mortality and expense risk charge which was in effect
through December 31, 1999. The mortality and expense risk charge for all
subaccounts except the Aetna Money Market VP subaccount is 1.10% on an annual
basis effective February 15, 2000, 1.05% on an annual basis effective February
15, 2001, and 1.00% on an annual basis effective February 15, 2002. The
mortality and expense risk charge for the Aetna Money Market VP subaccount is
0.35% on an annual basis effective February 15, 2000. During the income phase,
the mortality and expense risk charge for all subaccounts is 1.25% annually. The
standardized returns reflect the deduction of the early withdrawal charge
applicable to installment purchase payment contracts. If we advertise
standardized returns for single purchase payment contracts they would not
reflect the deduction of the early withdrawal charge since that charge is not
applicable to those contracts. The non-standardized returns shown in the tables
do not reflect the deduction of the early withdrawal charge. 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 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 average annual total return since the fund's
inception date.
4
<PAGE>
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.
5
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Date
Contributions
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 7.28% 13.32% 07/05/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Balanced VP, Inc.(1) 6.59% 16.30% 11.86%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Bond VP(1) (6.87%) 4.91% 6.38%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Crossroads VP 3.40% 11.05% 07/05/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Growth and Income VP(1) 10.16% 20.73% 14.09%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Bond VP (7.19%) (1.93%) 05/27/1998
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Large Cap VP 16.62% 26.33% 10/31/1996
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Mid Cap VP 8.65% 9.96% 05/04/1998
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Small Cap VP 3.94% (5.11%) 05/04/1998
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Legacy VP 0.48% 8.73% 07/05/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Money Market VP(1) (2) (1.42%) 3.11% 4.02%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Value Opportunity VP 12.19% 21.00% 05/30/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Calvert Social Balanced Portfolio(1) 5.29% 15.37% 10.67%
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio (0.24%) 15.94% 15.05% 05/31/1994
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP High Income Portfolio 1.47% (5.21%) 05/12/1998
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP II Asset Manager Portfolio 4.23% 13.03% 10.78% 03/31/1994
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP II Contrafund[Reg TM] Portfolio 16.58% 23.13% 05/31/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP II Index 500 Portfolio 13.06% 23.61% 05/31/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Aggressive Growth Portfolio 111.48% 33.17% 34.59% 06/30/1994
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Growth Portfolio 35.09% 26.81% 06/30/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Worldwide Growth Portfolio 54.29% 32.71% 05/31/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Lexington Emerging Markets Fund, Inc. 113.12% 5.93% 3.38% 10/31/1994
- ------------------------------------------------------------------------------------------------------------------------------------
Lexington Natural Resources Trust 7.04% 5.40% 4.05% 10/14/1991
- ------------------------------------------------------------------------------------------------------------------------------------
MFS Total Return Series (3.29%) 0.01% 05/26/1998
- ------------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA 48.69% 26.53% 05/04/1998
- ------------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund/VA (3.53%) (2.86%) 05/07/1998
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
PPI MFS Capital Opportunities Portfolio 39.60% 31.50% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Neuberger Berman AMT Growth/PPI MFS Capital Opportunities(3) 39.60% 25.04% 14.88%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
PPI MFS Emerging Equities Portfolio 41.55% 32.12% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Alger American Small Cap/PPI MFS Emerging Equities(3) 41.55% 23.45% 17.65% 09/30/1993
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
PPI MFS Research Growth Portfolio 16.37% 16.91% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
American Century VP Capital Appreciation/PPI MFS Research
Growth(3) 16.37% 10.63% 9.43% 08/31/1992
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
PPI Scudder International Growth Portfolio 48.62% 31.41% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Scudder International Portfolio Class A/PPI Scudder
International Growth(3) 48.62% 18.54% 12.18%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
PPI T. Rowe Price Growth Equity Portfolio 14.77% 20.46% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Alger American Growth/PPI T. Rowe Price Growth Equity(3) 14.77% 22.53% 21.32% 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 4.55%. 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.
(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.
6
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Fund
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 12.93% 11.26% 14.62% 07/05/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Balanced VP, Inc.(1) 12.20% 16.16% 17.50% 11.86%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Bond VP(1) (1.97%) 3.84% 5.99% 6.38%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Crossroads VP 8.85% 9.75% 12.32% 07/05/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Growth and Income VP(1) 15.96% 18.92% 21.98% 14.09%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Bond VP (2.31%) 2.25% 12/18/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Large Cap VP 22.76% 28.25% 28.89% 09/16/1996
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Mid Cap VP 14.37% 20.05% 12/16/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Small Cap VP 9.41% 5.33% 12/19/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Legacy VP 5.77% 8.10% 9.98% 07/05/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Money Market VP(1)(2) 3.77% 4.03% 4.17% 4.02%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Value Opportunity VP 18.09% 25.24% 25.64% 12/13/1996
- ------------------------------------------------------------------------------------------------------------------------------------
Calvert Social Balanced Portfolio(1) 10.83% 14.71% 16.56% 10.67%
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio(1) 5.01% 13.56% 17.14% 13.07%
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP High Income Portfolio(1) 6.81% 5.45% 9.50% 11.04%
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP II Asset Manager Portfolio(1) 9.71% 14.10% 14.19% 11.74%
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP II Contrafund[Reg TM] Portfolio 22.71% 24.53% 26.17% 01/03/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP II Index 500 Portfolio 19.01% 25.50% 26.57% 19.58% 08/27/1992
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Aggressive Growth Portfolio 122.61% 48.64% 34.54% 32.75% 09/13/1993
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Growth Portfolio 42.20% 32.18% 28.28% 22.74% 09/13/1993
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Worldwide Growth Portfolio 62.41% 35.62% 31.94% 28.10% 09/13/1993
- ------------------------------------------------------------------------------------------------------------------------------------
Lexington Emerging Markets Fund, Inc. 124.33% 11.72% 7.02% 6.03% 03/30/1994
- ------------------------------------------------------------------------------------------------------------------------------------
Lexington Natural resources Trust 12.68% (1.82%) 6.48% 4.70% 10/14/1991
- ------------------------------------------------------------------------------------------------------------------------------------
MFS Total Return Series 1.80% 10.60% 13.98% 01/03/1995
- ------------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA 56.52% 28.71% 20.16% 15.34% 11/12/1990
- ------------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund/VA 1.55% 3.47% 6.91% 4.86% 05/03/1993
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
PPI MFS Capital Opportunities Portfolio 46.94% 34.77% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Neuberger Berman AMT Growth/PPI MFS Capital
Opportunities(3) 46.94% 31.90% 26.33% 14.88%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
PPI MFS Emerging Equities Portfolio 49.00% 35.41% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Alger American Small Cap/PPI MFS Emerging
Equities(3) 49.00% 27.20% 24.73% 18.48%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
PPI MFS Research Growth Portfolio 22.50% 19.82% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
American Century VP Capital Appreciation/PPI MFS
Research Growth(3) 22.50% 12.56% 11.77% 9.46%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
PPI Scudder International Growth Portfolio 56.45% 34.67% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Scudder International Portfolio Class A/PPI Scudder
International Growth(3) 56.45% 25.58% 19.76% 12.18%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
PPI T. Rowe Price Growth Equity Portfolio 20.81% 23.45% 11/28/1997
- ------------------------------------------------------------------------------------------------------------------------------------
Alger American Growth/PPI T. Rowe Price Growth Equity(3) 20.81% 24.46% 23.79% 18.75%
- ------------------------------------------------------------------------------------------------------------------------------------
</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 4.55%. 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 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.
7
<PAGE>
INCOME PHASE PAYMENTS
When you begin receiving payments under the contract during the income phase
(see "Income Phase" in the prospectus), the value of your account is determined
using accumulation unit values as of the tenth valuation before the first
payment is due. Such value (less any applicable premium tax) is applied to
provide payments to you in accordance with the payment options and investment
options elected.
The annuity option tables found in the contract show, for each option, the
amount of the first payment for each $1,000 of value applied. Thereafter,
variable annuity payments fluctuate as the Annuity Unit value(s) fluctuates with
the investment experience of the selected investment option(s). The first
payment and subsequent payments also vary depending on the assumed net
investment rate selected (3.5% or 5% per annum). Selection of a 5% rate causes a
higher first payment, but payments will increase thereafter only to the extent
that the net investment rate increases by more than 5% on an annual basis.
Payments would decline if the rate failed to increase by 5%. Use of the 3.5%
assumed rate causes a lower first payment, but subsequent payments would
increase more rapidly or decline more slowly as changes occur in the net
investment rate.
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 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 "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 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 payments are to begin, there are 3,000 accumulation
units credited under a particular contract or account 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.
Also assume that no premium tax is payable and that the annuity table in the
contract provides, for the payment option elected, a first monthly variable
payment of $6.68 per $1,000 of value applied; the annuitant's first monthly
payment would thus be 40.950 multiplied by $6.68, or $273.55.
Assume then that the value of an Annuity Unit upon the valuation on which the
first payment was due was $13.400000. When this value is divided into the first
monthly 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
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 payment is due.
8
<PAGE>
The second monthly 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 a 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 funds in terms of the asset classes they
represent and use such categories in marketing material 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.
We may provide in advertising, sales literature, periodic publications or other
materials information on various topics of interest to current and prospective
contract holders or participants. 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 contracts 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.
9
<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.75962-00 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 Contract (G-TDA-HH(XC/M))(4)
(4.2) Variable Annuity Contract (G-TDA-HH(XC/S))(4)
(4.3) Variable Annuity Certificate (GTCC-HH(XC/M))(5)
(4.4) Variable Annuity Certificate (GTCC-HH(XC/S))(5)
(4.5) Endorsement (EGET-IC(R)) to Contracts G-TDA-HH(XC/M) and
G-TDA-HH(XC/S)(3)
(4.6) Endorsement (ENYSUTMF97) to Contract G-TDA-HH(XC/M)(6)
(4.7) Endorsement (ENYSUTMF97(S)) to Contract G-TDA-HH(XC/S)(6)
(4.8) Endorsement (ENYSTSDO97) to Contracts G-TDA-HH(XC/M) and
G-TDA-HH(XC/S)(6)
<PAGE>
(4.9) Endorsement (EGAA(5/98) NY) to Contracts G-TDA-HH(XC/M) and
G-TDA-HH(XC/S) and Certificates GTCC-HH(XC/M) and GTCC-HH(XC/S)(5)
(4.10) Endorsement (EG403-GIE-98) to Contract G-TDA-HH(XC/M) and
Certificate GTCC-HH(XC/M)(7)
(4.11) Endorsement (EG403-GI-98) to Contract G-TDA-HH(XC/M) and
Certificate GTCC-HH(XC/M)(8)
(4.12) Endorsement (EGET-99) to Contracts G-TDA-HH(XC/M) and
G-TDA-HH(XC/S) and Certificates GTCC-HH(XC/M) and GTCC-HH(XC/S)(9)
(4.13) Endorsement (ENYS-XC/M-00) to Contract G-TDA-HH(XC/M) and
Certificate G-TDA-HH(XC/M
(4.14) Endorsement (ENYS-XC/S-00) to Contract G-TDA-HH(XC/S) and
Certificate G-TDA-HH(XC/S)
(5) Variable Annuity Contract Application (300-GTD-NY(5/98))(8)
(6.1) Certificate of Incorporation of Aetna Life Insurance and Annuity
Company(10)
(6.2) Amendment of Certificate of Incorporation of Aetna Life Insurance
and Annuity Company(11)
(6.3) By-Laws as amended September 17, 1997 of Aetna Life Insurance and
Annuity Company(12)
(7) Not applicable
(8.1) 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)
(8.2) 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(13)
(8.3) 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(14)
(8.4) 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.
<PAGE>
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(15)
(8.5) 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 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(15)
(8.6) 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)
(8.7) 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(13)
(8.8) 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(15)
(8.9) 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(15)
(8.10) 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(16)
(8.11) Service Agreement between Calvert Asset Management Company, Inc.
and Aetna Life Insurance and Annuity Company dated December 1,
1997(16)
<PAGE>
(8.12) 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(11)
(8.13) 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, 1995, May 1, 1995, January 1, 1996 and March 1,
1996(17)
(8.14) 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(18)
(8.15) 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)
(8.16) 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(14)
(8.17) 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(11)
(8.18) 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, 1995, May 1, 1995, January 1, 1996 and March 1,
1996(17)
(8.19) 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(19)
(8.20) 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
<PAGE>
on December 15, 1994, February 1, 1995, May 1, 1995, January 1,
1996, March 1, 1996, May 1, 1997 and January 20, 1998(2)
(8.21) 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(15)
(8.22) Service Agreement between Aetna Life Insurance and Annuity Company
and Fidelity Investments Institutional Operations Company dated as
of November 1, 1995(20)
(8.23) 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(17)
(8.24) Service Contract between Fidelity Distributors Corporation and
Aetna Life Insurance and Annuity Company dated May 2, 1997(13)
(8.25) Fund Participation Agreement among Janus Aspen Series and Aetna
Life Insurance and Annuity Company and Janus Capital Corporation
dated December 8, 1997(19)
(8.26) 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(13)
(8.27)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(14)
(8.28) Service Agreement between Janus Capital Corporation and Aetna Life
Insurance and Annuity Company dated December 8, 1997(21)
(8.29) Fund Participation Agreement between Aetna Life Insurance and
Annuity Company and Lexington Management Corporation regarding
Natural Resources Trust dated December 1, 1988 and amended February
11, 1991(3)
(8.30) Fund Participation Agreement between Aetna Life Insurance and
Annuity Company, Lexington Emerging Markets Fund, Inc. and
Lexington Management Corporation (its investment advisor) dated
April 28, 1994(22)
(8.31) Fund Participation Agreement among MFS Variable Insurance Trust,
Aetna Life Insurance and Annuity Company and Massachusetts
Financial Services Company dated April 30, 1996, and amended on
September 3, 1996, March 14, 1997 and November 28, 1997(2)
(8.32) Fourth Amendment dated May 1, 1998 to the Fund Participation
Agreement by and among MFS Variable Insurance Trust, Aetna Life
Insurance and Annuity Company and Massachusetts Financial Services
Company dated April 30, 1996, and amended on September 3, 1996,
March 14, 1997 and November 28, 1997(23)
(8.33) Fifth Amendment dated May 1, 1998 to the Fund Participation
Agreement by and among MFS Variable Insurance Trust, Aetna Life
Insurance and Annuity Company
<PAGE>
and Massachusetts Financial Services Company dated April 30, 1996,
and amended on September 3, 1996, March 14, 1997 and November 28,
1997(24)
(8.34) Fifth Amendment dated July 1, 1999 to Fund Participation Agreement
by and among MFS Variable Insurance Trust, Aetna Life Insurance and
Annuity Company and Massachusetts Financial Services Company dated
April 30, 1996, and amended on September 3, 1996, March 14, 1997,
November 28, 1997 and May 1, 1998(25)
(8.35) 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)
(8.36) 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(15)
(8.37) 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(5)
(14.1) Powers of Attorney(15)
(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. 6 to Registration
Statement on Form N-4 (File No. 33-75962), as filed on April 17, 1996.
5. Incorporated by reference to Post-Effective Amendment No. 14 to Registration
Statement on Form N-4 (File No. 33-75962), as filed on April 17, 1998.
6. Incorporated by reference to Post-Effective Amendment No. 11 to Registration
Statement on Form N-4 (File No. 33-75962), as filed on April 14, 1997.
7. Incorporated by reference to Post-Effective Amendment No. 11 to Registration
Statement on Form N-4 (File No. 333-01107), as filed on September 10, 1998.
8. Incorporated by reference to Post-Effective Amendment No. 15 to Registration
Statement on Form N-4 (File No. 33-75962), as filed on September 15, 1998.
9. 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.
10. 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.
<PAGE>
11. 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.
12. 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.
13. 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.
14. 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.
15. 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.
16. 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.
17. 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.
18. 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.
19. 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.
20. 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.
21. 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.
22. Incorporated by reference to Post-Effective Amendment No. 22 to Registration
Statement on Form N-4 (File No. 33-34370), as filed on April 22, 1996.
23. 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.
24. Incorporated by reference to Post-Effective Amendment No. 4 to Registration
Statement on Form N-4 (File No. 333-56297), as filed on February 16, 1999.
25. Incorporated by reference to Post-Effective Amendment No. 11 to Registration
Statement on Form N-4 (File No. 333-56297), as filed on November 23, 1999.
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
Director, Chief Financial Officer and
Catherine H. Smith Senior Vice President
Shaun P. Mathews Director and Senior Vice President
Vice President, Corporate Controller,
Deborah Koltenuk and Assistant Treasurer
Vice President and Chief Compliance
Therese M. Squillacote Officer
Senior Vice President, General
Kirk P. Wickman 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, 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
<PAGE>
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
and
Opportunity Plus Service Center
18 Corporate Woods Blvd., Fourth Floor
Albany, NY 12211
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;
<PAGE>
(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
(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) The Company hereby represents that it is relying upon and complies with
the provisions of Paragraphs (1) through (4) of the SEC Staff's No-Action
Letter dated November 28, 1988 with respect to language concerning
withdrawal restrictions applicable to plans established pursuant to
Section 403(b) of the Internal Revenue Code. See American Counsel of Life
Insurance; SEC No-Action Letter, [1988 WL 1235221 *13 (S.E.C.)].
(e) 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.
(f) 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. 33-75962) and has duly 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
13th 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. 22 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 )
)
Catherine H. Smith* Director and Chief Financial Officer ) April
- ------------------------ )
Catherine H. Smith ) 13, 2000
)
Shaun P. Mathews* Director )
- ------------------------ )
Shaun P. Mathews )
)
Deborah Koltenuk* Vice President, Corporate Controller, and )
- ------------------------ Assistant Treasurer )
Deborah Koltenuk )
By: /s/ Julie E. Rockmore
-----------------------------------------
Julie E. Rockmore
*Attorney-in-Fact
<PAGE>
VARIABLE ANNUITY ACCOUNT C
EXHIBIT INDEX
Exhibit No. Exhibit
- ----------- -------
99-B.4.13 Endorsement (ENYS-XC/M-00) to Contract
G-TDA-HH(XC/M) and Certificate G-TDA-HH(XC/M)
---------
99-B.4.14 Endorsement (ENYS-XC/S-00) to Contract
G-TDA-HH(XC/S) and Certificate G-TDA-HH(XC/S)
---------
99-B.9 Opinion and Consent of Counsel
---------
99-B.10 Consent of Independent Auditors
---------
EXHIBIT 99-B.4.13
Aetna Life Insurance and Annuity Company
ENDORSEMENT
The Contract and Certificate are endorsed as outlined below.
All references in the Contract and Certificate to the "Opportunity Plus
Processing Office" are changed to "Opportunity Plus Service Center".
The following definition is added to Part I. GENERAL DEFINITIONS:
Dollar Cost Averaging - A program which allows a Participant to
systematically transfer amounts from the Aetna money market fund
under the Contract to the Fixed Account, the Guaranteed Accumulation
Account and/or one or more of the Funds held by the Separate
Account. Amounts may be transferred out of existing funds into the
Aetna money market fund under the Contract. Amounts transferred to
or from the Fixed Account and subsequently surrendered during the
accumulation period will be subject to the surrender fee described
in the Contract. Amounts transferred from the Guaranteed
Accumulation Account Guaranteed Term before the end of that
Guaranteed Term may be subject to a Market Value Adjustment. Aetna
reserves the right to change terms and conditions for Dollar Cost
Averaging upon notification to the Contract Holder and Participants.
To elect to participate in Dollar Cost Averaging, Participants
should contact the Opportunity Plus Service Center.
In Part III. PURCHASE PAYMENT, CURRENT VALUE, SURRENDER PROVISIONS, the first
paragraph of Individual Account(s) is revised to read:
Aetna will maintain Individual Accounts for Participants. The
Individual Accounts may be as follows:
a) Employer Account: This Individual Account will be credited
with employer Net Purchase Payments, if any, and
b) Employee Account: This Individual Account will be credited
with employee Net Purchase Payments, specifically employee
salary reduction Purchase Payments.
Should a Participant wish to exchange an existing Aetna tax deferred
annuity contract for this Contract, the original enrollment date
will be used to calculate the surrender fee, if any.
If, pursuant to Internal Revenue Service Revenue Ruling 90-24, Aetna
agrees to accept under this Contract amounts transferred from a Code
Section 403(b)(7) custodial account, such amounts will be subject to
the surrender restrictions set forth in Code Section
403(b)(7)(A)(ii).
The statement below is added to the Surrender Value section under Part III:
The Participant may surrender any portion or all of an Individual
Account Current Value and transfer such amount to another investment
provider under the Plan or roll over such amount that qualifies as
an eligible rollover distribution in accordance with Code Sections
403(b)(8), 401(a)(31) and 402(c) and applicable regulations.
The statement below is added to the Surrender Fee section in Part III of the
Contract and Part V of the Certificate.
(k) As a distribution under a systematic distribution option
(SDO).
Distribution Options in Part III is replaced with the following:
Systematic Distribution Options (SDO's)
During the accumulation period, three distribution options are available:
the Systematic Withdrawal Option (SWO), the Estate Conservation Option
(ECO), and the Life Expectancy Option (LEO). Under these options,
Participants may request regularly scheduled, automatic, partial
distributions of their Individual Account Current Value.
ENYS-XC/M-00
<PAGE>
Withdrawals from the Individual Account Current Value for an SDO are taken
proportionately from each investment option in which the account is
invested or as otherwise allowed. No surrender fee applies to amounts
distributed under a systematic distribution option. An MVA may apply to
amounts withdrawn from the GA Account.
If applicable, all payments comply with the incidental death benefit test
of Code Section 401(a)(9). Any single or joint life expectancy factor(s)
used in the calculation of a systematic distribution option will comply
with Code Section 401(a)(9) and related regulations and are generally
based on the tables associated with that section of the Code.
To request SWO, ECO or LEO, the Participant or beneficiary, as applicable,
must complete an election form and forward it to the Opportunity Plus
Service Center. A minimum Individual Account Current Value may be required
to elect an SDO. If SWO, ECO or LEO is revoked, the Participant or
beneficiary may not subsequently elect that option again, nor may the
Participant or beneficiary elect another systematic distribution option
unless permitted under the Code minimum distribution rules.
The availability of any specific option will be subject to terms and
conditions applicable to that option. Availability is also determined by
the Plan. Aetna reserves the right to discontinue the availability of an
SDO option for future election. Payments will, however, continue to
Participants who elected the option before the date it is no longer
available.
Systematic Withdrawal Option (SWO)
Under SWO, a portion of the Individual Account value is automatically
withdrawn and paid to the Participant. The earliest date SWO payments may
begin is the date the Participant attains age 59 1/2, or age 55 if the
Participant has separated from service at or later than age 55. SWO is not
available when a loan is in effect.
The Participant or beneficiary, as applicable, may elect one of the
following payments methods:
(a) Payment of a specified dollar amount annually - The amount
distributed may not be more than 20% of the Individual Account
Current Value as of the date SWO is elected. The specified amount
will be paid unless a larger amount is required under the Code's
minimum distribution rules.
(b) Payment over a specified period - Payments must be over a period of
at least five years unless a larger amount is required under the
Code's minimum distribution rules. The maximum period allowed is
determined by the life expectancy factor. The amount paid each year
is the Individual Account Current Value as of December 31 of the
prior year divided by the remaining number of payment years.
(c) Payment of a percentage of the Individual Account value - Aetna will
distribute an amount equal to or less than 20% of the Individual
Account Current Value as of the date SWO is elected. Each year the
amount distributed is calculated by multiplying the Individual
Account Current Value on December 31 of the prior year by the
percentage elected. Payments are made each year until the year the
Participant attains age 70 1/2.
If amounts are withdrawn from the GA Account, an MVA (see 3.03) will apply
to amounts withdrawn under SWO.
Estate Conservation Option (ECO)
Under ECO, a portion of the Individual Account Current Value is
automatically withdrawn and paid to the Participant. The earliest date ECO
payments may begin is the first day of the calendar year in which the
Participant attains age 70 1/2.
When ECO is in effect, Aetna will calculate and distribute an amount equal
to the minimum distribution required under the Code. Generally, the amount
distributed is equal to the Individual Account Current Value as of
December 31 of the year prior to the payment year divided by a single or
joint life expectancy factor.
If amounts are withdrawn from the GA Account, no MVA applies to amounts
withdrawn under ECO.
2
<PAGE>
Life Expectancy Option (LEO)
This option is available only to Participants who have separated from
service. LEO provides automatic, substantially equal periodic payments of
the Individual Account Current Value prior to age 59 1/2. LEO is not
available when a loan is in effect.
To avoid tax penalties, the calculation of payments under LEO must comply
with methods allowed under federal regulations.
Payments must continue for at least five years or until the Participant
attains age 59 1/2, whichever is later. Aetna will not make payments under
LEO once the Participant attains age 70.
If amounts are withdrawn from the GA Account, an MVA (see 3.03) will apply
to amounts withdrawn under LEO.
In Part IV. ANNUITY PROVISIONS, the Annuity Options section is amended as
follows:
Options 2, 3 and 4 are amended and restated as outlined below.
Option 2 - Payments for a Stated Period of Time
This option provides payments for a stated period. The number of years
must be at least three (3) and not more than thirty (30) and the Annuity
may be a Fixed or Variable Annuity or a combination.
If payments for this option are under a Variable Annuity, the present
value of any remaining payments may be withdrawn at any time. If a
withdrawal is requested within three years of the first payment, the
lump-sum payment is treated as a withdrawal during the accumulation period
and any applicable surrender fee will apply (see 3.16 or 5.02, as
applicable).
If the payments are fixed-only, an annual increase of one, two or three
percent (compounded annually) may be elected at the time the Annuity
option is chosen (if permitted by the Code).
Option 3: Life Income for One Annuitant
This option provides payments for the life of the Annuitant. If this
option is elected, the Participant or beneficiary, as applicable, must
also choose one of the following:
(a) Payments cease at the death of the Annuitant; or
(b) Payments are guaranteed for a period of at least five (5) and not
more than thirty (30) years; or
(c) Fixed-only cash refund: At the death of the Annuitant, the
beneficiary receives a lump-sum payment in an amount equal to the
amount applied to the Annuity (less any applicable premium tax),
minus the amount of payments made to the Annuitant.
Under (a) or (b), if the payments are fixed-only, an annual increase of
one, two or three percent (compounded annually) may be elected at the time
the Annuity option is chosen (if permitted by the Code).
Option 4: Life Income for Two Annuitants
This option provides payments for the lives of the Annuitant and a second
Annuitant. Payments continue until both Annuitants have died. If this
option is elected, the Participant or beneficiary as applicable, must also
choose one of the following:
(a) 100% of the payment amount to continue after the first death; or
(b) 66 2/3% of the payment amount to continue after the first death; or
(c) 50% of the payment amount to continue after the first death; or
3
<PAGE>
(d) 100% of the payment amount to continue after the first death with
payments guaranteed to the beneficiary after the second death for a
period of at least five (5) and no more than thirty (30) years; or
(e) 100% of the payment amount to continue at the death of the specified
second Annuitant and 50% of the payment amount to continue at the
death of the specified Annuitant; or
(f) 100% of the fixed-only payment amount to continue after the first
death with a cash refund to the Contract beneficiary after the
second death. The amount of the cash refund is equal to the amount
applied to the Annuity (less any applicable premium tax), minus the
amount of payments made.
Under (a) or (d), if the payments are fixed-only, an annual increase of
one, two or three percent (compounded annually) may be elected at the time
the Annuity option is chosen (if permitted by the Code).
Other Options
As allowed under applicable state law, Aetna reserves the right to make
other options available.
The sections below are added to Part IV.
Election of Annuity Option:
The Participant or beneficiary, as applicable, may elect an Annuity option
by properly completing an election form and forwarding it to the
Opportunity Plus Service Center no later than 30 calendar days before the
desired first Annuity payment date. All Annuity option elections must
comply with any regulatory requirements including the Code minimum
distribution requirements.
Variable Fund Transfers:
When a variable Annuity is elected, the Participant or beneficiary, as
applicable, may request Aetna to transfer all or any portion of the amount
allocated to a Fund to any other available Fund. Transfer requests must be
expressed as a percentage of the allocation among the Funds on which the
variable payment is based. Twelve transfers are allowed each calendar
year. Aetna reserves the right to allow additional transfers.
The Tables on the following pages are added to Part IV.
4
<PAGE>
OPTION 3
Life Income
Fixed Only Cash Refund
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.5%
Age of Monthly Age of Monthly
Annuitant Payment Annuitant Payment
--------- ------- --------- -------
50 $ 4.19 63 $ 5.17
51 4.25 64 5.27
52 4.31 65 5.38
53 4.37
54 4.43 66 5.50
55 4.50 67 5.62
68 5.75
56 4.57 69 5.89
57 4.64 70 6.03
58 4.72
59 4.80 71 6.18
60 4.88 72 6.34
73 6.51
61 4.97 74 6.69
62 5.07 75 6.87
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above table.
5
<PAGE>
OPTION 4
Life Income for Two Annuitants
Fixed Only Cash Refund
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.5%
Age of Second Annuitant
-----------------------
Age of
Annuitant 45 50 55 60 65 70 75 80 85
--------- -- -- -- -- -- -- -- -- --
45 $3.68 $3.75 $3.79 $3.83 $3.85 $3.85 $3.85 $3.83 $3.93
50 3.75 3.88 3.96 4.02 4.06 4.07 4.07 4.05 4.01
55 3.79 3.96 4.13 4.23 4.30 4.34 4.35 4.32 4.27
60 3.83 4.02 4.23 4.46 4.58 4.66 4.69 4.67 4.60
65 3.85 4.06 4.30 4.58 4.88 5.04 5.12 5.12 5.03
70 3.85 4.07 4.34 4.66 5.04 5.43 5.61 5.67 5.58
75 3.85 4.07 4.35 4.69 5.12 5.61 6.13 6.31 6.26
80 3.83 4.05 4.32 4.67 5.12 5.67 6.31 6.93 7.03
85 3.93 4.01 4.27 4.60 5.03 5.58 6.26 7.03 7.60
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above table.
6
<PAGE>
Endorsed and made part of the Contract or Certificate on May 1, 2000 or on the
Effective Date of the Contract or Certificate, if later.
/s/ Thomas J. McInerney
President
Aetna Life Insurance and Annuity Company
ENYS-XC/M-00 7
EXHIBIT 99-B.4.14
Aetna Life Insurance and Annuity Company
ENDORSEMENT
The Contract and Certificate are endorsed as outlined below.
All references in the Contract and Certificate to the "Opportunity Plus
Processing Office" are changed to "Opportunity Plus Service Center".
The Table of Contents reference in the Contract for section 1.03 is corrected to
read "Fixed Annuity". All other references to the Fixed Account in the Contract
and the Certificate are deleted.
The following definition is added to Part I. GENERAL DEFINITIONS:
Dollar Cost Averaging - A program which allows a Participant to
systematically transfer amounts from the Aetna money market fund
under the Contract to the Guaranteed Accumulation Account and/or one
or more of the Funds held by the Separate Account. Amounts may be
transferred out of existing funds into the Aetna money market fund
under the Contract. Amounts transferred from the Guaranteed
Accumulation Account Guaranteed Term before the end of that
Guaranteed Term may be subject to a Market Value Adjustment. Aetna
reserves the right to change terms and conditions for Dollar Cost
Averaging upon notification to the Contract Holder and Participants.
To elect to participate in Dollar Cost Averaging, Participants
should contact the Opportunity Plus Service Center.
In Part III. PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS, the
section of the Contract entitled Individual Accounts is revised to read as
follows. This is added as a new section under Part III of the Certificate.
Aetna will maintain Individual Accounts for Participants. The
Individual Accounts may be as follows:
a) Employer Account: This Individual Account will be credited
with employer Net Purchase Payments, if any, and
b) Employee Account: This Individual Account will be credited
with employee Net Purchase Payments, specifically employee
salary reduction Purchase Payments.
Should a Participant wish to exchange an existing Aetna tax deferred
annuity contract for this Contract, the original enrollment date
will be used to calculate the surrender fee, if any.
In addition to any Purchase Payment stated to be made to the
Contract, a lump-sum Purchase Payment, of not less than a minimum
amount stated by Aetna, may be made on behalf of one or more
Participants. Any lump-sum Purchase payment will be subject to the
terms and conditions of the Contract.
If, pursuant to Internal Revenue Service Revenue Ruling 90-24, Aetna
agrees to accept under this Contract amounts transferred from a Code
Section 403(b)(7) custodial account, such amounts will be subject to
the surrender restrictions set forth in Code Section
403(b)(7)(A)(ii).
The statement below is added to the Surrender Value section under Part III:
The Participant may surrender any portion or all of an Individual
Account Current Value and transfer such amount to another investment
provider under the Plan or roll over such amount that qualifies as
an eligible rollover distribution in accordance with Code Sections
403(b)(8), 401(a)(31) and 402(c) and applicable regulations.
Distribution Options in Part III is replaced with the following:
Systematic Distribution Options (SDO's)
During the accumulation period, three distribution options are
available: the Systematic Withdrawal Option (SWO), the Estate
Conservation Option (ECO), and the Life Expectancy Option (LEO).
Under these options, Participants may request regularly scheduled,
automatic, partial distributions of their Individual Account Current
Value.
ENYS-XC/S-00
<PAGE>
Withdrawals from the Individual Account Current Value for an SDO are
proportionately from each investment option in which the account is
invested or as otherwise allowed. An MVA may apply to amounts
withdrawn from the GA Account.
If applicable, all payments comply with the incidental death benefit
test of Code Section 401(a)(9). Any single or joint life expectancy
factor(s) used in the calculation of a systematic distribution
option will comply with Code Section 401(a)(9) and related
regulations and are generally based on the tables associated with
that section of the Code.
To request SWO, ECO or LEO, the Participant or beneficiary, as
applicable, must complete an election form and forward it to the
Opportunity Plus Service Center. A minimum Individual Account
Current Value may be required to elect an SDO. If SWO, ECO or LEO is
revoked, the Participant or beneficiary may not subsequently elect
that option again, nor may the Participant or beneficiary elect
another systematic distribution option unless permitted under the
Code minimum distribution rules.
The availability of any specific option will be subject to terms and
conditions applicable to that option. Availability is also
determined by the Plan. Aetna reserves the right to discontinue the
availability of an SDO option for future election. Payments will,
however, continue to Participants who elected the option before the
date it is no longer available.
Systematic Withdrawal Option (SWO)
Under SWO, a portion of the Individual Account value is
automatically withdrawn and paid to the Participant. The earliest
date SWO payments may begin is the date the Participant attains age
59 1/2, or age 55 if the Participant has separated from service at
or later than age 55. SWO is not available when a loan is in effect.
The Participant or beneficiary, as applicable, may elect one of the
following payments methods:
(a) Payment of a specified dollar amount annually - The amount
distributed may not be more than 20% of the Individual Account
Current Value as of the date SWO is elected. The specified
amount will be paid unless a larger amount is required under
the Code's minimum distribution rules.
(b) Payment over a specified period - Payments must be over a
period of at least five years unless a larger amount is
required under the Code's minimum distribution rules. The
maximum period allowed is determined by the life expectancy
factor. The amount paid each year is the Individual Account
Current Value as of December 31 of the prior year divided by
the remaining number of payment years.
(c) Payment of a percentage of the Individual Account value -
Aetna will distribute an amount equal to or less than 20% of
the Individual Account Current Value as of the date SWO is
elected. Each year the amount distributed is calculated by
multiplying the Individual Account Current Value on December
31 of the prior year by the percentage elected. Payments are
made each year until the year the Participant attains age 70
1/2.
If amounts are withdrawn from the GA Account, an MVA (see 3.02 or
3.03, as applicable) will apply to amounts withdrawn under SWO.
Estate Conservation Option (ECO)
Under ECO, a portion of the Individual Account Current Value is
automatically withdrawn and paid to the Participant. The earliest
date ECO payments may begin is the first day of the calendar year in
which the Participant attains age 70 1/2.
When ECO is in effect, Aetna will calculate and distribute an amount
equal to the minimum distribution required under the Code.
Generally, the amount distributed is equal to the Individual Account
Current Value as of December 31 of the year prior to the payment
year divided by a single or joint life expectancy factor.
If amounts are withdrawn from the GA Account, no MVA applies to
amounts withdrawn under ECO.
2
<PAGE>
Life Expectancy Option (LEO)
This option is available only to Participants who have separated
from service. LEO provides automatic, substantially equal periodic
payments of the Individual Account Current Value prior to age 59
1/2. LEO is not available when a loan is in effect.
To avoid tax penalties, the calculation of payments under LEO must
comply with methods allowed under federal regulations.
Payments must continue for at least five years or until the
Participant attains age 59 1/2, whichever is later. Aetna will not
make payments under LEO once the Participant attains age 70.
If amounts are withdrawn from the GA Account, an MVA (see 3.02 or
3.03, as applicable) will apply to amounts withdrawn under LEO.
In Part IV. ANNUITY PROVISIONS, the Annuity Options section is
amended as follows:
Options 2, 3 and 4 are amended and restated as outlined below.
Option 2 - Payments for a Stated Period of Time
This option provides payments for a stated period. The number of
years must be at least three (3) and not more than thirty (30) and
the Annuity may be a Fixed or Variable Annuity or a combination.
If payments for this option are under a Variable Annuity, the
present value of any remaining payments may be withdrawn at any
time.
If the payments are fixed-only, an annual increase of one, two or
three percent (compounded annually) may be elected at the time the
Annuity option is chosen (if permitted by the Code).
Option 3: Life Income for One Annuitant
This option provides payments for the life of the Annuitant. If this
option is elected, the Participant or beneficiary, as applicable,
must also choose one of the following:
(a) Payments cease at the death of the Annuitant; or
(b) Payments are guaranteed for a period of at least five (5) and
not more than thirty (30) years; or
(c) Fixed-only cash refund: At the death of the Annuitant, the
beneficiary receives a lump-sum payment in an amount equal to
the amount applied to the Annuity (less any applicable premium
tax), minus the amount of payments made to the Annuitant.
Under (a) or (b), if the payments are fixed-only, an annual increase
of one, two or three percent (compounded annually) may be elected at
the time the Annuity option is chosen (if permitted by the Code).
Option 4: Life Income for Two Annuitants
This option provides payments for the lives of the Annuitant and a
second Annuitant. Payments continue until both Annuitants have died.
If this option is elected, the Participant or beneficiary as
applicable, must also choose one of the following:
(a) 100% of the payment amount to continue after the first death;
or
(b) 66 2/3% of the payment amount to continue after the first
death; or
(c) 50% of the payment amount to continue after the first death;
or
(d) 100% of the payment amount to continue after the first death
with payments guaranteed to the beneficiary after the second
death for a period of at least five (5) and no more than
thirty (30) years; or
3
<PAGE>
(e) 100% of the payment amount to continue at the death of the
specified second Annuitant and 50% of the payment amount to
continue at the death of the specified Annuitant; or
(f) 100% of the fixed-only payment amount to continue after the
first death with a cash refund to the Contract beneficiary
after the second death. The amount of the cash refund is equal
to the amount applied to the Annuity (less any applicable
premium tax), minus the amount of payments made.
Under (a) or (d), if the payments are fixed-only, an annual increase
of one, two or three percent (compounded annually) may be elected at
the time the Annuity option is chosen (if permitted by the Code).
Other Options
As allowed under applicable state law, Aetna reserves the right to
make other options available.
The sections below are added to Part IV.
Election of Annuity Option:
The Participant or beneficiary, as applicable, may elect an Annuity
option by properly completing an election form and forwarding it to
the Opportunity Plus Service Center no later than 30 calendar days
before the desired first Annuity payment date. All Annuity option
elections must comply with any regulatory requirements including the
Code minimum distribution requirements.
Variable Fund Transfers:
When a variable Annuity is elected, the Participant or beneficiary,
as applicable, may request Aetna to transfer all or any portion of
the amount allocated to a Fund to any other available Fund. Transfer
requests must be expressed as a percentage of the allocation among
the Funds on which the variable payment is based. Twelve transfers
are allowed each calendar year. Aetna reserves the right to allow
additional transfers.
The Tables on the following pages are added to Part IV.
4
<PAGE>
OPTION 3
Life Income
Fixed Only Cash Refund
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.5%
Age of Monthly Age of Monthly
Annuitant Payment Annuitant Payment
--------- ------- --------- -------
50 $ 4.19 63 $ 5.17
51 4.25 64 5.27
52 4.31 65 5.38
53 4.37
54 4.43 66 5.50
55 4.50 67 5.62
68 5.75
56 4.57 69 5.89
57 4.64 70 6.03
58 4.72
59 4.80 71 6.18
60 4.88 72 6.34
73 6.51
61 4.97 74 6.69
62 5.07 75 6.87
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above table.
5
<PAGE>
OPTION 4
Life Income for Two Annuitants
Fixed Only Cash Refund
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.5%
Age of Second Annuitant
Age of
Annuitant 45 50 55 60 65 70 75 80 85
--------- -- -- -- -- -- -- -- -- --
45 $3.68 $3.75 $3.79 $3.83 $3.85 $3.85 $3.85 $3.83 $3.93
50 3.75 3.88 3.96 4.02 4.06 4.07 4.07 4.05 4.01
55 3.79 3.96 4.13 4.23 4.30 4.34 4.35 4.32 4.27
60 3.83 4.02 4.23 4.46 4.58 4.66 4.69 4.67 4.60
65 3.85 4.06 4.30 4.58 4.88 5.04 5.12 5.12 5.03
70 3.85 4.07 4.34 4.66 5.04 5.43 5.61 5.67 5.58
75 3.85 4.07 4.35 4.69 5.12 5.61 6.13 6.31 6.26
80 3.83 4.05 4.32 4.67 5.12 5.67 6.31 6.93 7.03
85 3.93 4.01 4.27 4.60 5.03 5.58 6.26 7.03 7.60
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above table.
6
<PAGE>
Endorsed and made part of the Contract or Certificate on May 1, 2000 or on the
Effective Date of the Contract or Certificate, if later.
/s/ Thomas J. McInerney
President
Aetna Life Insurance and Annuity Company
ENYS-XC/S-00 7
Exhibit 99-B.9
[LOGO] AETNA Aetna Inc.
151 Farmington Avenue
Hartford, CT 06156-8975
Julie E. Rockmore
Counsel
AFS Law, TS31
April 13, 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. 22 to Registration Statement on Form N-4
Prospectus Title: Opportunity Plus - Group Variable Multiple Option
Annuity Contracts
File Nos.: 33-75962* 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. 22. 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 a
prospectus relating to the securities covered by the following earlier
Registration Statement: 33-75978.
<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
EX-99-B.10
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, 2,000, 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. 22 to Registration Statement (File No. 33-75962) 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 13, 2000
