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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PHL VARIABLE INSURANCE COMPANY
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(Exact name of registrant as specified in its charter)
Connecticut
- ------------------ ---------------------- -------------------
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification
incorporation or Classification Number)
organization) Code Number)
ONE AMERICAN ROW
HARTFORD, CT 06102-5056
(800) 447-4312
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(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
DONA D. YOUNG, ESQ.
PHL VARIABLE INSURANCE COMPANY
ONE AMERICAN ROW
HARTFORD, CT 06102-5056
(860) 403-5967
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(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale to the public: ______________
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of this earlier effective
registration statement for the same offering. [ ] __________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
Registration statement number of the earlier effective registration statement
for the same offering. [ ] __________
If the delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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<PAGE>
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
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Title of each class Proposed Proposed maximum
of securities to be Amount to be maximum offering aggregate offering Amount of
registered registered price per unit price registration fee
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<S> <C> <C> <C> <C>
Participating * * $50,000,000 $15,151.52
Interests in Market
Value Adjustment
Account under
Variable Annuity
Contract
</TABLE>
*The maximum aggregate offering price is estimated solely for the purpose of
determining the registration fee. The amount to be registered and the proposed
maximum offering price per unit are not applicable in that these contracts are
not issued in predetermined amounts or units.
The Registrant hereby amends this Registration Statement on such date as may be
necessary to delay its effective date until the Registrant shall file a further
amendment which specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of the Securities
Act of 1933 or until the Registration Statement shall become effective on such
date as the Commission, acting pursuant to said Section 8(a), may determine.
<PAGE>
PHL VARIABLE INSURANCE COMPANY
<TABLE>
CROSS REFERENCE SHEET PURSUANT TO
REGULATION S-K, ITEM 501(B)
<CAPTION>
FORM S-1 ITEM NUMBER CAPTION HEADING IN PROSPECTUS
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<S> <C> <C>
1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus............................... Outside Front Cover
2. Inside Front and Outside Back Pages of Prospectus.................... Inside Front Cover
3. Summary Information, Risk Factors and Ratio of Fixed Charges......... Product Description
4. Use of Proceeds...................................................... Investments by PHL Variable
5. Determination of Offering Price...................................... Not Applicable
6. Dilution............................................................. Not Applicable
7. Selling Security Holders............................................. Not Applicable
8. Plan of Distribution................................................. Distribution of Contracts
9. Description of Securities to be Registered........................... Product Description
10. Interests of Named Experts and Counsel............................... Not Applicable
11. Information with Respect to the Registrant........................... Description of the Business of PHL
Variable; Directors and Officers of PHL
Variable; Experts and Legal Proceedings;
Financial Statements
12. Disclosure of Commission Position on Indemnification
for Securities Act Liabilities....................................... Not Applicable
</TABLE>
<PAGE>
PROSPECTUS
MARKET VALUE ADJUSTED GUARANTEED INTEREST ACCOUNT
Offered through PHL Variable Accumulation Account Annuities
issued by
PHL VARIABLE INSURANCE COMPANY
VARIABLE PRODUCTS OPERATIONS
101 MUNSON STREET
GREENFIELD, MASSACHUSETTS 01301
TELEPHONE: (800) 447-4312
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mailing address:
PHOENIX VARIABLE PRODUCTS MAIL OPERATIONS
P.O. BOX 8027
BOSTON, MASSACHUSETTS 02266-8027
This Prospectus describes PHL Variable Insurance Company's ("PHL Variable"
or the "Company") Market Value Adjusted Guaranteed Interest Account (MVA). The
MVA is available for use under the Company's deferred variable accumulation
annuity contract (the "Contract"). The MVA is an account to which Contract
Owners may allocate purchase payments or transfer accumulation value to and
from, subject to the rules outlined in the Contract prospectus. As this
Prospectus focuses on the operations and features of the MVA, an investor should
carefully review the Contract prospectus.
PHL Variable guarantees specified rates of interest for amounts allocated to
the MVA for specified periods (Guarantee Period). The Guaranteed Rate offered
will, in no event, be less than 3%.
The assets supporting the Company's obligations based on allocations to the
MVA are held in PHL Variable Separate Account MVA1 ("Separate Account MVA1"),
which is a "non-unitized" separate account. Such obligations are based on the
interest rates credited to allocations to the MVA and the terms of the Contract.
These obligations do not depend on the investment performance of the assets in
Separate Account MVA1. Separate Account MVA1 was established by the Company
according to Connecticut law.
Any partial or full surrenders or transfers from the MVA, before the end of
a Guarantee Period, may be adjusted up or down by the application of the Market
Value Adjustment. Any values allocated to the MVA that are applied to determine
the annuity benefit before the end of the Guarantee Period also will be subject
to the Market Value Adjustment. Accordingly, a Contract Owner may experience a
negative investment return.
The annuity benefits available under the Contract may be either fixed or
variable amounts. The Contract Value before maturity will vary with the
investment performance of the Sub-accounts of the PHL Variable Accumulation
Account selected and amounts allocated to the Guaranteed Interest Account and
the MVA. The amount of any variable annuity payments thereafter will fluctuate
with the investment performance of the Sub-accounts of the PHL Variable
Accumulation Account selected.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THIS PROSPECTUS MUST BE ACCOMPANIED BY THE PROSPECTUSES FOR A PHL VARIABLE
ACCUMULATION ACCOUNT ANNUITY CONTRACT, THE PHOENIX EDGE SERIES FUND AND WANGER
ADVISORS TRUST. THIS PROSPECTUS AND THE PROSPECTUSES FOR THE CONTRACT AND THE
FUNDS SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
MAY 1, 1997
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TABLE OF CONTENTS
Heading Page
SPECIAL TERMS.................................................................3
PRODUCT DESCRIPTION...........................................................3
The Nature of the Contract and the MVA.....................................3
Availability of the MVA....................................................3
The Market Value Adjusted Guaranteed Interest Account .....................3
Market Value Adjustment....................................................4
Setting the Guaranteed Rate................................................5
Application of the Market Value Adjustment on Withdrawals..................5
INVESTMENTS BY PHL VARIABLE...................................................5
DISTRIBUTION OF CONTRACTS.....................................................6
FEDERAL TAXATION DISCUSSION...................................................6
ACCOUNTING PRACTICES..........................................................6
DESCRIPTION OF THE BUSINESS OF PHL VARIABLE ..................................6
DIRECTORS AND OFFICERS OF PHL VARIABLE........................................6
EXPERTS.......................................................................7
LEGAL PROCEEDINGS.............................................................7
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Any statement contained in a document incorporated by reference herein shall
be deemed modified or superseded hereby to the extent that a statement contained
in a later-filed document or herein shall modify or supersede such statement.
Any statement so modified or superseded shall be deemed, except as so modified
or superseded, to constitute a part of the Prospectus.
The Company will furnish, without charge, to each person to whom a copy this
Prospectus is delivered, upon the written or oral request of such person, a copy
of the document referred to above which has been incorporated by reference in
the Prospectus, other than exhibits to such document (unless such exhibits are
specifically incorporated by reference in the Prospectus). Requests for such
document should be directed to 800-447-4312.
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SPECIAL TERMS
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As used in this Prospectus, the following terms mean:
ACCOUNT: PHL Variable Accumulation Account.
CONTINGENT DEFERRED SALES CHARGE: Surrender charges.
CONTRACT: The deferred variable accumulation annuity contract issued by PHL
Variable Insurance Company.
CONTRACT VALUE: Prior to its maturity, the sum of the values under a Contract of
all accumulation units held in the Sub-accounts of the Account plus the values
held in the Guaranteed Interest Account and the Market Value Adjusted Guaranteed
Interest Account.
CURRENT RATE: The Guaranteed Rate currently in effect for amounts allocated to
the Market Value Adjusted Guaranteed Interest Account, established from time to
time for various durations.
EXPIRATION DATE: The date on which the Guarantee Period ends.
GUARANTEE PERIOD: The duration for which interest accrues at the Guaranteed Rate
on amounts allocated to the Market Value Adjusted Guaranteed Interest Account.
GUARANTEED INTEREST ACCOUNT (GIA): An allocation option under which premium
amounts are guaranteed to earn a fixed rate of interest. Excess interest also
may be credited, in the sole discretion of PHL Variable Insurance Company.
GUARANTEED RATE: The effective annual interest rate PHL Variable uses to accrue
interest on amounts allocated to the Market Value Adjusted Guaranteed Interest
Account for a Guarantee Period. Guaranteed Rates are fixed at the time an amount
is credited to the Market Value Adjusted Guaranteed Interest Account and remain
level throughout the Guarantee Period.
MARKET VALUE ADJUSTED GUARANTEED INTEREST ACCOUNT (MVA): An account that pays
interest at a Guaranteed Rate if held to maturity. If such amounts are withdrawn
before the end of the Guarantee Period, a Market Value Adjustment will be made.
Assets allocated to the MVA are not part of the assets allocated to the Account
or the general account of PHL Variable Insurance Company.
MARKET VALUE ADJUSTMENT: An adjustment made to the amount that a Contract Owner
will receive if money is withdrawn or transferred from the Market Value Adjusted
Guaranteed Interest Account before the Expiration Date of its Guarantee Period.
PHL VARIABLE: PHL Variable Insurance Company.
WINDOW PERIOD: The 15-day period before and after the Expiration Date during
which time any withdrawals or transfers from the MVA will not be subject to a
Market Value Adjustment.
PRODUCT DESCRIPTION
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THE NATURE OF THE CONTRACT AND THE MVA
The investment option described in this Prospectus is a Market Value
Adjusted Guaranteed Interest Account (MVA) available only under the flexible
premium deferred variable annuity contract (the "Contract") offered by PHL
Variable Insurance Company ("PHL Variable" or the "Company"). The Contract is
described in detail in its prospectus. You should review the Contract prospectus
with this Prospectus before deciding to invest in the Contract or allocate
purchase payments to the MVA.
The MVA currently provides four choices of interest rate Guarantee Periods:
3-year, 5-year, 7-year and 10-year. Purchase payments can be allocated to one or
more of the available MVA Guarantee Period options, either at the time the
payment is made or by transferring amounts held in the Sub-accounts of the PHL
Variable Accumulation Account (the "Account"), the Guaranteed Interest Account
or other available MVA options, anytime prior to Contract maturity. Generally,
amounts allocated to an MVA option must be for at least $1,000.
Amounts may be transferred to or from the MVA according to the Contract
transfer rules. (See "The Accumulation Period - Transfers" of the Contract
prospectus.)
Allocations that remain in the MVA until the applicable Expiration Date will
be equal to the amount originally allocated multiplied, on an annually
compounded basis, by its Guaranteed Rate.
A Market Value Adjustment will be made if amounts are withdrawn or
transferred from the MVA before the Expiration Date. (See "The Market Value
Adjusted Guaranteed Interest Account.")
The Contract provides for the accumulation of values before maturity and for
the payment of annuity benefits thereafter. A death benefit also is available
under the Contract. Since MVA values are part of the Contract Value, earnings on
allocations to the MVA will impact the values available at surrender, maturity
or death.
AVAILABILITY OF THE MVA
The MVA is not available in all states.
THE MARKET VALUE ADJUSTED GUARANTEED INTEREST ACCOUNT
The MVA is available only during the accumulation phase of the Contract. The
MVA option currently offers different Guarantee Periods, which provide the
ability to earn interest at different Guaranteed Rates on all or part of the
Contract Value. Each allocation has its own Guaranteed Rate and Expiration Date.
Because the Company changes Guaranteed Rates periodically, amounts allocated to
a Guarantee Period at different times may have varied Guaranteed Rates and
Expiration Dates. The applicable Guaranteed Rate does not change during the
Guarantee Period. The Guaranteed Rate may never be less than 3%.
PHL Variable will notify you of the expiration of the Guarantee Period and
of your available options within 30 days of the Expiration Date. You will have
15 days before and 15 days following the Expiration Date ("Window Period") to
notify us of your election. During this Window Period, any withdrawals or
transfers from the MVA will not be subject to a market value adjustment. Unless
you elect to transfer funds to another Guarantee Period, Account, the Guaranteed
Interest Account or elect to withdraw funds, we will begin another Guarantee
Period of the same duration as the one just ended and credit interest at the
then current rate for that new Guarantee Period. If you chose a Guarantee Period
that is no longer available or your original Guarantee Period is no longer
available, we will use the Guarantee Period with the next longest duration.
To the extent permitted by law, we reserve the right, anytime, to offer
Guarantee Periods that differ from those available at the time
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your Contract was issued. Since Guarantee Periods may change, please contact
Variable Products Operations to determine the current Guarantee Periods being
offered.
MARKET VALUE ADJUSTMENT
Any withdrawal from your MVA will be subject to a Market Value Adjustment
unless the effective date of the withdrawal is within 15 days before and after
the end of a Guarantee Period. For this purpose, redemptions, transfers and
maturity amounts are treated as withdrawals. The Market Value Adjustment will be
applied to the amount being withdrawn after the deduction of any applicable
Administrative Charge and before the deduction of any applicable Contingent
Deferred Sales Charges (surrender charges). The Market Value Adjustment can be
positive or negative. The amount being withdrawn after application of the Market
Value Adjustment can be greater than or less than the amount withdrawn before
the application of the Market Value Adjustment.
A Market Value Adjustment will not be applied upon the payment of the Death
Benefit.
The Market Value Adjustment will reflect the relationship between the
Current Rate (defined below) for the amount being withdrawn and the Guaranteed
Rate. It is also reflective of the time remaining in the applicable Guarantee
Period. Generally, if the Guaranteed Rate is lower than the applicable Current
Rate, then the application of the Market Value Adjustment will result in a lower
payment upon withdrawal. Conversely, if the Guaranteed Rate is higher than the
applicable Current Rate, the application of the Market Value Adjustment will
produce a higher payment upon withdrawal.
The Market Value Adjustment which is applied to the amount being withdrawn
is determined by using the following formula:
Market Value Adjustment
1+i n/12
= Amount x [(----------) -1]
1+j+0.0025
where,
Amount, is the amount being withdrawn from a given accumulated amount less
any applicable administrative charges.
i, is the Guaranteed Rate being credited to the amount subject to
the Market Value Adjustment; and
j, is the Current Rate for new deposits with a Guarantee Period equal to the
number of years remaining in the current Guarantee Period, rounded up to the
next higher number of complete years; and
n, is the number of months rounded up to the next whole number from the date
of the withdrawal or transfer to the end of the Guarantee Period.
If the Company does not offer a Guarantee Period equal to the number of
years remaining in the Guarantee Period, "j" will be determined by interpolation
or extrapolation of the Guaranteed Rate for the Guarantee Periods then
available.
EXAMPLES
The following examples illustrate how the Market Value Adjustment operates:
EXAMPLE 1
$10,000 is deposited on January 1, 1997, into an MVA with a 5-year Guarantee
Period. The Guaranteed Rate for this deposit amount is 5.50%.
If, on January 1, 1999 (2 years after deposit), the full amount is taken
from this MVA segment, the following amount is available:
1. The accumulated amount prior to application of Market Value Adjustment
is:
2
$10,000 x (1.055) = $11,130.25
2. The Current Rate that would be applied on January 1, 1999 to amounts
credited to a 3-year MVA segment is 6.50%.
3. The number of months remaining in the Guarantee Period (rounded up to
next whole number) is 36.
4. The Market Value Adjustment equals $-386.43, and is calculated as
follows:
1+0.055 36/12
$-386.43 = $11,130.25 x [(--------------) -1]
1+0.065+0.0025
The market value for the purposes of surrender on January 1, 1999 is
therefore equal to $10,743.82 ($11,130.25 - $386.43).
EXAMPLE 2
$10,000 is deposited on January 1, 1997, into an MVA with a 5-year Guarantee
Period. The Guaranteed Rate for this amount is 5.50%.
If, on January 1, 1999 (2 years from deposit), the full amount is taken from
this MVA segment, the following amount is available:
1. The accumulated amount prior to application of Market Value Adjustment
is:
2
$10,000 x (1.055) = $11,130.25
2. The Current Rate being applied on January 1, 1999 to amounts credited to
a 3-year MVA segment is 4.50%.
3. The number of months remaining in the Guarantee Period (rounded up to
next whole number) is 36.
4. The Market Value Adjustment equals $240.79, and is calculated as follows:
1+0.055 36/12
$+240.79 = $11,130.25 x [(--------------) -1]
1+0.045+0.0025
The market value for the purposes of surrender on January 1, 1999 is
therefore equal to $11,371.04 ($11,130.25 + $240.79).
THE ABOVE EXAMPLES ARE HYPOTHETICAL AND ARE NOT INDICATIVE OF FUTURE OR PAST
PERFORMANCE.
4
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SETTING THE GUARANTEED RATE
PHL Variable determines Guaranteed Rates for current and future purchase
payments, transfers or renewals. Although future Guaranteed Rates cannot be
predicted, the Company guarantees that the Guaranteed Rate will never be less
than 3% per annum.
APPLICATION OF THE MARKET VALUE ADJUSTMENT ON WITHDRAWALS
A Market Value Adjustment will apply if a withdrawal is made before the
Expiration Date and outside the Window Period as described above. When a
withdrawal is made for full or partial surrender, the Contract Value also may be
reduced by a Contingent Deferred Sales Charge (surrender charge) according to
the following schedule:
SURRENDER CHARGE
YEAR SINCE PAYMENT ASSESSED
------------------ --------
1st 7%
2nd 6%
3rd 5%
4th 4%
5th 3%
6th 2%
7th 1%
8th None
The company makes this adjustment for surrender charge since we make no
deduction for sales charges when a purchase payment is made. The surrender
charge is computed based on the date that the particular payment is received
into the Contract.
Purchase payments that remain on deposit for 7 complete years are not
subject to surrender charges. Amounts allocated to the MVA however, continue to
be subject to a Market Value Adjustment. For more information regarding the
application of surrender charges, please consult the Contract prospectus.
Please note that other charges also are imposed against the Contract
including mortality and expense risk and administrative charges. For a more
detailed explanation of applicable charges, please see the "Deductions and
Charges" section of the Contract prospectus.
INVESTMENTS BY PHL VARIABLE
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Assets of PHL Variable must be invested according to applicable state laws
regarding the nature and quality of investments that may be made by life
insurance companies and the percentage of their assets that may be committed to
any particular type of investment. In general, these laws permit investments
within specified limits and subject to certain qualifications, in federal, state
and municipal obligations, corporate bonds, stock, real estate mortgages, real
estate and other investments.
Proceeds from the MVA will be deposited into Separate Account MVA1, which is
a non-unitized separate account. Such proceeds are based on the interest rate we
credit to MVA allocations and terms of the Contract. These proceeds do not
depend on the investment performance of the assets in Separate Account MVA1.
Separate Account MVA1 was established under Connecticut law.
Under Connecticut law, all income, gains or losses of Separate Account MVA1
whether realized or not, must be credited to or charged against the amounts
placed in Separate Account MVA1 without regard to other income, gains and losses
of PHL Variable. The assets of the Separate Account may not be charged with
liabilities arising out of any other business that the Company may conduct.
Obligations under the Contracts are obligations of PHL Variable.
There are no discreet units in Separate Account MVA1. No party with rights
under any Contract participates in the investment gain or loss from assets
belonging to Separate Account. Such gain or loss accrues solely to the Company.
Phoenix retains the risk that the value of the assets in Separate Account MVA1
may drop below the reserves and other liabilities the Company must maintain.
Should the value of the assets in Separate Account MVA1 drop below the reserve
and other liabilities the Company must maintain in relation to the Contracts
supported by such assets, the Company will transfer assets from its general
account to Separate Account MVA1, conversely, if the amount the Company is
maintaining is too much, the Company may transfer the excess to the general
account.
In establishing Guaranteed Rates, PHL Variable intends to take into account
the yields available on the instruments in which it intends to invest the
proceeds from the Contracts. The Company's investment strategy with respect to
the proceeds attributable to the Contracts generally will be to invest in
investment-grade debt instruments having durations tending to match the
applicable Guarantee Periods.
Investment-grade debt instruments in which the Company intends to invest the
proceeds from the Contracts include:
Securities issued by the United States Government or its agencies or
instrumentalities, which issues may or may not be guaranteed by the United
States Government.
Debt securities which have an investment grade, at the time of purchase,
within the four highest grades assigned by Moody's Investors Services, Inc.
(Aaa, Aa, A or Bb), Standard & Poor's Corporation (AAA, AA, A or BBB) or any
other nationally recognized rating service.
Other debt instruments, including but not limited to, issues of or
guaranteed by banks or bank holding companies and corporations, which
obligations, although not rated by Moody's or Standard & Poor's are deemed by
the Company's management to have an investment quality comparable to securities
which may be purchased as stated above.
While the foregoing generally describes the Company's investment strategy
with respect to the proceeds attributable to the Contracts, the Company is not
obligated to invest the proceeds attributable to the Contract according to any
particular strategy, except as may be required by Connecticut and other state
insurance law.
DISTRIBUTION OF CONTRACTS
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Phoenix Equity Planning Corporation ("PEPCO") acts as the
principal underwriter of the Contracts. Contracts may be purchased
through representatives of W.S. Griffith & Company ("W.S. Griffith")
licensed to sell PHL Variable Annuity Contracts. PEPCO and W.S.
Griffith are registered as broker-dealers under the Securities Exchange
Act of 1934 and are members of the National Association of Securities
Dealers, Inc. (the "NASD"). PHL Variable, PEPCO and W.S. Griffith are
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indirect wholly-owned subsidiaries of Phoenix Home Life Mutual Insurance
Company.
PEPCO enters selling agreements with other broker-dealers or entities
registered under or exempt under the Securities Act of 1934 ("selling brokers").
The Contracts are sold through agents who are licensed by state insurance
officials to sell the Contracts. These agents also are registered
representatives of selling brokers or W.S. Griffith. Contracts with the MVA
option are offered in states where PHL Variable has received authority to write
modified guarantee annuity business and the MVA and the Contracts have been
approved. The maximum dealer concession that a selling broker will receive for
selling a Contract is 7.25%.
Although the Glass-Steagall Act prohibits banks and bank affiliates from
engaging in the business of underwriting securities, banking regulators have not
indicated that such institutions are prohibited from purchasing variable annuity
contracts upon the order and for the account of their customers.
FEDERAL TAXATION DISCUSSION
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Please refer to "Federal Income Taxes" of the Contract prospectus for a
discussion of the tax status of the Contract.
ACCOUNTING PRACTICES
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The information presented below should be read with the audited financial
statements and other information included elsewhere in this Prospectus.
The financial statements and other financial information included in this
Prospectus have been prepared in conformity with accounting practices of the
National Association of Insurance Commissioners and the accounting practices
prescribed or permitted by the Division of Insurance of the State of Connecticut
("statutory accounting practices"), which are currently considered in accordance
with generally accepted accounting principles ("GAAP") for stock life insurance
subsidiaries of a mutual life insurance company.
The Financial Accounting Standards Board, which has no role in establishing
regulatory accounting practices issued Interpretation 40, Applicability of
Generally Accepted Accounting Principles to Mutual Life Insurance and Other
Enterprises, and Statement of Financial Accounting Standards No. 120, Accounting
and Reporting by Mutual Life Insurance Enterprises and by Insurance Enterprises
for certain Long-Duration Participating Contracts. The American Institute of
Certified Public Accountants, which also has no role in establishing regulatory
accounting practices, issued Statement of Position 95-1, Accounting for Certain
Insurance Activities of Mutual Life Insurance Enterprises. These pronouncements
will require mutual life companies and their stock life insurance subsidiaries
to modify their financial statements to continue to be in accordance with the
GAAP, effective for 1996 financial statements. The manner in which policy
reserves, new business acquisition costs, asset valuations and the related tax
effects are recorded will change. The impact of these changes has not yet been
determined. The financial statements included in this Prospectus have been on
the basis as filed with regulatory authorities.
DESCRIPTION OF THE BUSINESS OF PHL VARIABLE
- --------------------------------------------------------------------------------
PHL Variable is a life insurance company and a wholly-owned subsidiary of
Phoenix Home Life Mutual Insurance Company ("Phoenix"). The Company (formerly
known as Dreyfuss Consumers Life) was purchased by Phoenix and its name was
changed accordingly in 1994. The Company is an issuer of variable annuity
contracts. The Company plans to obtain authority to sell variable annuity
contracts in all states except New York, and as of December 1, 1996, it had
obtained such authority in 42 states and the District of Columbia.
The Company's Home Office is located in Hartford, Connecticut.
The Company's principal administrative office is located at 101
Munson Street, Greenfield, Massachusetts. Functionally, the Company
is part of Phoenix's operations and all administrative and operational
services are provided by Phoenix.
DIRECTORS AND OFFICERS OF PHL VARIABLE
- --------------------------------------------------------------------------------
NAME POSITION WITH REGISTRANT
Richard H. Booth Director and Executive
Vice President
Robert G. Chipkin Director
Robert W. Fiondella Director, Chairman and
President
Joseph E. Kelleher Director and Senior
Vice President
Philip R. McLoughlin Director and Executive
Vice President
Charles J. Paydos Director and Executive
Vice President
David W. Searfoss Director, Executive President,
Chief Financial Officer and
Treasurer
Simon Y. Tan Director and Senior Vice
President
Dona D. Young Director and Executive
Vice President
Robert G. Lautensack Senior Vice President
Lisa-Lynn Bassi Vice President
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EXPERTS
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The financial statements of PHL Variable Insurance Company as of December
31, 1996 have been examined by Price Waterhouse LLP, independent public
accountants, whose reports are set forth herein, and the financial statements
have been included upon the authority of said firm as experts in accounting and
auditing. Price Waterhouse LLP, whose address is One Financial Plaza, Hartford,
Connecticut, also provides other accounting and tax-related services as
requested by PHL Variable from time to time.
Legal matters involving federal securities laws in connection with the
Contracts have been passed upon by Jorden Burt Berenson & Johnson LLP,
Washington, D.C.
Legal matters relating to the validity of the securities being issued have
been passed upon by Richard J. Wirth, Counsel, Phoenix Home Life Mutual
Insurance Company, Hartford, Connecticut.
LEGAL PROCEEDINGS
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PHL Variable, the Account and PEPCO are not parties to any litigation that
would have a material adverse effect upon the Account or the Contracts.
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PHL VARIABLE INSURANCE COMPANY
CONSOLIDATED FINANCIAL STATEMENTS
[To be filed by Amendment]
7
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PHL VARIABLE SEPARATE ACCOUNT MVA1
THE EFFECTIVE DATE OF THE PHL VARIABLE
SEPARATE ACCOUNT MVA1 IS THE EFFECTIVE
DATE OF THIS REGISTRATION STATEMENT,
THEREFORE, FINANCIAL DATA IS NOT AVAILABLE.
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PART II
INFORMATION NOT REQUIRED IN A PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Not applicable.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 5.9 of the Connecticut Corporation Law & Practice, provides that a
corporation may indemnify any director or officer of the corporation made, or
threatened to be made, a party to an action or proceeding other than one by or
in the right of the corporation to procure a judgment in its favor, whether
civil or criminal, including an action by or in the right of any other
corporation of any type or kind, by reason of the fact that he, his testator
or intestate, served such other corporation in any capacity at the request of
the indemnifying corporation.
Article III Section 14 of the By-Laws of the Company provides: "Each
Director, officer or employee of the Company, and his heirs, executors or
administrators, shall be indemnified or reimbursed by the Company for all
expenses necessarily incurred by him in connection with the defense or
reasonable settlement of any action, suit or proceeding in which he is made a
party by reason of his being or having been a Director, officer or employee of
the Company, or of any other company which he was serving as a Director or
officer at the request of the Company, except in relation to matters as to
which such Director, officer or employee is finally adjudged in such action,
suit or proceeding to be liable for negligence or misconduct in the
performance of his duties as such Director, officer or employee. The foregoing
right of indemnification or reimbursement shall not be exclusive of any other
rights to which he may be entitled under any statute, by-law, agreement, vote
of shareholders or otherwise."
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 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.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Not applicable.
ITEM 16. EXHIBITS
1 Underwriting Agreement. Incorporated by reference to Exhibit 3 of
File No. 33-87376 Pre-Effective Amendment No. 1 to Form N-4
filed on July 20, 1995.
2 Plan of acquisition, reorganization, arrangement, liquidation or
succession. Not applicable.
3 (i) Articles of Incorporation. Incorporated by reference to
Exhibit 6(a) of File No. 33-87376 Registration Statement on
Form N-4 filed on December 14, 1994.
3 (ii) By-Laws. Incorporated by reference to Exhibit 6(b) of File
No. 33-87376 Registration Statement on Form N-4 filed on
December 14, 1994.
4 Form of Variable Annuity Contract with MVA Rider. Filed herewith.
5 Opinion re legality. To be filed by amendment.
8 Opinion re tax matters. Not applicable.
9 Voting trust agreement. Not applicable.
10 Material contracts. Not applicable.
11 Statement re computation of per share earnings. Not applicable.
12 Statements re computation of ratios. Not applicable.
15 Letter re unaudited interim financial information. Not
applicable.
16 Letter re change in certifying accountant. Not applicable.
II-1
<PAGE>
21 Subsidiaries of the registrant. Not applicable.
23.1 Consent of Price Waterhouse LLP. To be filed by amendment.
23.2 Consent of Counsel. To be filed by amendment.
24 Powers of attorney. Incorporated by reference to Exhibit 15 of
File No. 33-87376 Post-Effective Amendment No. 1 to Form N-4
filed via Edgar on April 19, 1996 and Post-Effective Amendment
No. 2 to Form N-4 filed via Edgar on September 13, 1996.
25 Statement of eligibility of trustee. Not applicable.
26 Invitation for competitive bids. Not applicable.
27 Financial Data Schedule. To be filed by amendment.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers of sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a
20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in
the effective registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(4) Not applicable.
ITEM 18. FINANCIAL STATEMENTS AND SCHEDULES
To be filed by amendment.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Hartford, State of
Connecticut, on this 23rd day of January, 1997.
PHL Variable Insurance Company
By____________________________________
*Robert W. Fiondella
President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the persons in the capacities
indicated with PHL Variable Insurance Company on this 23rd day of
January, 1997.
Signature Title
--------- -----
________________________ Director
*Richard H. Booth
________________________ Director
*Robert G. Chipkin
________________________ Chairman of the Board and President
*Robert W. Fiondella (Principal Executive Officer)
________________________ Director
*Joseph E. Kelleher
________________________ Director
*Philip R. McLoughlin
________________________ Director
*Charles J. Paydos
________________________ Director, Executive Vice President,
*David W. Searfoss Chief Financial Officer and Treasurer
(Principal Financial and
Accounting Officer)
________________________ Director
*Simon Y. Tan
/s/ Dona D. Young
________________________ Director
Dona D. Young
By:/s/ DONA D. YOUNG
---------------------
Dona D. Young
*DONA D. YOUNG, as Attorney-in-Fact pursuant to Powers of Attorney, copies of
which are filed herewith. (See Exhibit 24.)
EXHIBIT 16.4
Form of Variable Annuity Contract with MVA Rider
<PAGE>
PHL Variable Insurance Company
Primary Annuitant: :Age and Sex
Contract Number: :Contract Date
Initial Premium: :Maturity Date
Dear Contract Owner:
Thank you for purchasing this annuity contract from PHL Variable Insurance
Company.
One of our corporate objectives is to ensure that you receive the benefits
to which you are entitled. We agree to pay the benefits of this contract
in accordance with its provisions.
IT IS IMPORTANT TO US THAT YOU ARE SATISFIED WITH YOUR CONTRACT AND THAT IT
MEETS YOUR FINANCIAL GOALS. IF FOR ANY REASON YOU ARE NOT SATISFIED WITH THIS
CONTRACT, YOU MAY RETURN IT WITHIN 10 DAYS AFTER WE DELIVER IT TO YOU FOR A
REFUND OF THE CONTRACT VALUE PLUS ANY CHARGES MADE UNDER THIS CONTRACT. IT MAY
BE RETURNED TO EITHER THE AGENT THROUGH WHOM IT WAS PURCHASED OR TO US AT THE
FOLLOWING ADDRESS:
PHL Variable Insurance Company
Variable Products Operations
101 Munson Street
P.O. Box 942
Greenfield, MA 01302-0942
THE CONTRACT VALUE WILL BE DETERMINED AS OF THE NEAREST VALUATION DATE FOLLOWING
RECEIPT OF THE RETURNED CONTRACT AT OUR VARIABLE PRODUCTS OPERATIONS.
This contract provides for the payment of a 10-year period certain variable
monthly life annuity. Other options are available and may be elected prior to
the Maturity Date. The Contract Value will depend on the rate of interest
credited to the Guaranteed Interest Account and the investment experience of
the Sub-accounts. The annuity payments will be based on the Contract Value on
the Maturity Date, the annuity purchase rates stated herein, and the investment
experience of the Sub-accounts during the annuity payout period.
Signed for PHL Variable Insurance Company at its Main Administrative Office:
One American Row, Hartford, Connecticut 06115.
Sincerely Yours,
/s/ Dona D. Young /s/ Robert W. Fiondella
Secretary Chief Executive Officer
Registrar
FLEXIBLE PREMIUM VARIABLE ACCUMULATION DEFERRED ANNUITY
ALL VALUES AND BENEFITS BASED ON THE INVESTMENT EXPERIENCE OF THE SUB-ACCOUNTS
OF THE SEPARATE ACCOUNT ARE VARIABLE AND NOT GUARANTEED AS TO DOLLAR AMOUNT. SEE
PART 7 FOR A DESCRIPTION OF HOW THE CONTRACT VALUES ARE DETERMINED, AND PART 9
FOR A DESCRIPTION OF HOW THE DEATH BENEFITS ARE DETERMINED.
D601 Non-Participating
<PAGE>
SCHEDULE PAGE
Primary Annuitant: :Age and Sex
Contract Number: :Contract Date
Initial Premium: :Maturity Date
Contingent Annuitant:
Owner:
Beneficiaries: As Stated in the Application or as Later Changed.
Subsequent Premiums: FLEXIBLE
Payment Intervals: FLEXIBLE
SUB-ACCOUNT FEES
Mortality and Expense Risk Fee on Contract Date: .00342% (BASED ON AN ANNUAL
RATE OF 1.25%)
Daily Administrative Fee: .00034% (BASED ON AN ANNUAL RATE OF 0.125%)
Daily Tax Fee: 0.0000% OR SUCH GREATER AMOUNT AS MAY BE ASSESSED AS A RESULT
OF A CHANGE IN TAX LAWS.
Premium Tax: 0.000% of Each Premium Paid.
Annual Administrative Fee: Up to $35
Transfer Charge: NONE
Contingent Deferred Sales Charge: See Part 5 for a Description of How this
Charge Is Determined.
SUB-ACCOUNT ALLOCATION SCHEDULE
D601
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SCHEDULE PAGE (CONTINUED)
Annuitant: :Contract Number
SEPARATE ACCOUNT SUB-ACCOUNTS
FUND: THE PHOENIX EDGE SERIES FUND
MONEY MARKET The investment objective of the Money Market Sub-Account is
to provide maximum current income consistent with Capital
preservation and liquidity.
GROWTH The investment objective of the Growth Sub-Account is to
achieve intermediate and long-term growth of capital, with
income as a secondary consideration.
MULTI-SECTOR The primary investment objective of the Multi-Sector
Sub-Account is to seek high current income. Capital growth
as a secondary objective which will also be considered when
consistent with the objective of high current income.
TOTAL RETURN The investment objective of the Total Return Sub-Account is
to realize as high a level of total rate of return over an
extended period of time as is considered consistent with
prudent investment Risk.
INTERNATIONAL The investment objective of the International Sub-Account
is to seek a high total return consistent with reasonable
risk. The International Sub-account intends to invest
primarily in an internationally diversified portfolio of
equity securities. The International Portfolio provides a
means for investors to invest a portion of their assets
outside the United States.
BALANCED The investment objective of the Balanced Sub-Account is to
seek reasonable income, long-term capital growth and
conservation of capital. The Balanced Sub-account intends
to invest based on combined considerations of risk, income,
capital enhancement and protection of capital value.
REAL ESTATE The investment objective of the Real Estate Securities
SECURITIES Sub-Account is to seek capital appreciation and income with
approximately equal emphasis. It intends under normal
circumstances to invest in marketable securities of publicly
traded real estate investment trusts (REITs) and companies
that operate, develop, manage and/or invest in real estate
located primarily in the United States.
STRATEGIC THEME The investment objective of the Strategic Theme Sub-Account
is to seek long-term appreciation of capital by identifing
securities benefiting from long-term trends present in the
United States and abroad. The Strategic Theme Sub-Account
intends to invest primarily in common stocks believed to
have substantial potential for capital growth.
FUND: WANGER ADVISORS TRUST
WANGER U.S. The investment objective of the Wanger U.S. Small Cap
SMALL CAP Sub-Account is to provide long-term growth. The Wanger U.S.
Small Cap Sub-Account will invest primarily in a series
that invests in securities of U.S. companies with a total
common stockmarket cap of less than $1 billion.
WANGER The investment objective of the Wanger International Small
INTERNATIONAL Cap Sub-Account is to provide long-term growth. The Wanger
SMALL CAP International Small Cap Sub-Account will invest primarily
in a series that invests in securities of Non-U.S. companies
with a total stockmarket cap of less than $1 billion.
D601
<PAGE>
SCHEDULE PAGE (CONTINUED)
Annuitant: :Contract Number
GUARANTEED INTEREST ACCOUNTS
GUARANTEED The GIA with 1-year guarantee is accounted for as part of
INTEREST ACCOUNT our General Account. We will credit interest daily on any
WITH 1-YEAR amounts under this account at such rates as we shall
GUARANTEE determine, but in event will the effective annual rate of
(GIA) interest be less than 4%. At least once each month we will
set the interest rate (GIA) that will apply new rates are
set for deposits and transfers made to this account. That
applicable rate will remain in effect for one year for any
such deposits or transfers made to this account during that
time. Upon expiry of the 1- year Guarantee Period, the new
effective interest rate for the 1-year Guarantee Period will
be the same as that which applies for new deposits to this
account. This new rate also will remain in effect for a
subsequent Guarantee Period of one year. We reserve the
right to limit cumulative deposits made to this account
during any one week period to no more than $250,000. No
market value adjustment is applied to withdrawals from the
GIA.
MARKET VALUE The MVA provides four choices of interest rate Guarantee
ADJUSTED Periods: 3-year, 5-year, 7-year and 10-year. The MVA is
GUARANTEED accounted for as part of a non-unitized separate account.
INTEREST ACCOUNT We will credit interest daily on any amounts held under
(MVA) this account at such rates as we shall determine, but in no
event will the effective annual rate of interest be less
than 3%. At least once each month we will set interest rates
that will apply for each of these Guarantee Periods until
new rates are set for deposits and transfers made to each of
these accounts. The applicable rate will remain in effect
until the end of the Guarantee Period selected by you, the
Contract Owner. Upon expiry of the selected Guarantee
Period, unless you elect to transfer funds to another
Guarantee Period or Sub-account, or elect to withdraw funds,
we will begin another Guarantee Period of the same duration
as the one that just ended, and will credit interest at the
then current rate for that new Guarantee Period. If your
original Guarantee Period is no longer available, or if you
choose a Guarantee Period that is no longer available, we
will use the Guarantee Period with the next longest
duration. To the extent permitted by law, we reserve the
right to discontinue Guarantee Periods and to offer other
Guarantee Periods that differ from those available at the
time your contract was issued. Any withdrawals or transfers
from the MVA will be subject to a market value adjustment,
except that funds may be withdrawn or transferred from this
account without a market value adjustment in the 30-day
Window Period from 15 days before to 15 days after the
Guarantee Period expiry date. We reserve the right to limit
cumulative deposits made to any one of these accounts during
any 1-week period to not more than $250,000.
D601
<PAGE>
CONTRACT SUMMARY
ABOUT THIS This summary briefly highlights some of the major contract
SUMMARY provisions. Since this is only a summary, the detailed
provisions of the contract will control. See those provisions
for full information and any limits or restrictions that
apply. A Table of Contents is provided to help you find specific
provisions. Your contract is a legal contract between you and
us. You should, therefore, READ YOUR CONTRACT CAREFULLY.
Check the Schedule Page of this contract to make sure it
reflects the premium payment allocation requested. Please call
your agent or us any time you have questions about your
contract.
THE TYPE OF This contract provides for payment of a 10-year period certain
CONTRACT variable monthly life annuity based on the value accumulated
prior to the Maturity Date. The amount of each annuity payment
will be based on the Contract Value on the Maturity Date, the
annuity purchase rates stated herein, and the investment
experience of the Sub-accounts during the annuity payout
period. Other Annuity Payment Options are available.
PREMIUM The values that accumulate under this contract prior to the
PAYMENTS Maturity Date are based on the premium payments made, the rates
ALLOCATED TO of interest credited on any premium payments allocated to the
SUB-ACCOUNTS Guaranteed Interest Account, and the investment experience of
the Sub-accounts within the Separate Account on any premium
payments allocated to the Sub-accounts. Except for the
Guaranteed Interest Account which is part of our General
Account, the Sub-accounts are part of PHL Variable Insurance
Company's Variable Accumulation Separate Account (VA Account)
and have differing investment objectives as shown on the
Schedule Page. We have the right to add additional Sub-accounts
of the Separate Account subject to approval by the Securities
and Exchange Commission and, where required, the insurance
supervisory official of the state where this contract is
delivered. Subject to the terms of this contract, you may
transfer the Contract's Value between and among the various
Sub-accounts and Guaranteed Interest Account.
The VA Account is a Separate Account established by our company
under Connecticut Law and is registered as a unit investment
trust under the Investment Company Act of 1940. All income,
gains and losses, realized and unrealized, of the VA Account are
credited to or charged against the amounts placed in the VA
Account without reference to other income, gains and losses of
our General Account. The assets of the VA Account are owned
solely by us and we are not a trustee with respect to such
assets. These assets are not chargeable with liabilities arising
out of any other business that we may conduct.
We use the assets of the VA Account to buy shares of the Fund(s)
identified on the Schedule Page of this contract according to
your most recent allocation instruction on file with us at our
Variable Products Operations. The Fund(s) are registered under
the 1940 Act as an open-end, diversified management investment
company. The Fund(s) have separate Series that correspond to the
Sub-accounts of the VA Account. Assets of each Sub-account are
invested in shares of the corresponding Fund Series.
D601 Contract Summary
<PAGE>
This contract also contains a Guaranteed Interest Account to
which premium payments may be allocated. The Guaranteed Interest
Account is not part of the Separate Account. It is accounted for
as part of our General Account. We will credit interest on the
amount in the Guaranteed Interest Account at such rate(s) as
provided under the terms of this contract. We reserve the right
to add other Guaranteed Interest Accounts subject to approval
(as required by some states) by the insurance supervisory
official of states where this contract is delivered.
WITHDRAWAL Subject to the terms of this contract, the Contract Value, less
PRIVILEGE any applicable contingent deferred sales charge, may be
withdrawn in whole or in part on or before the Maturity Date.
After the Maturity Date, you may only withdraw from the
remaining value under Variable Payment Options K or L, less any
applicable contingent deferred sales charge.
OTHER BENEFITS This contract provides for the payment of death proceeds in the
event of the death of either the Owner or the Annuitant prior to
the Maturity Date. The amount of the death proceeds will depend
upon whether it is the Owner or the Annuitant whose death has
occurred. The amount of the death proceeds is determined as
described in Part 9 of this Contract.
D601 Contract Summary
<PAGE>
Table of Contents
Part Page
- --------------------------------------------------------------------------------
1. DEFINITIONS............................................................ 1
2. ABOUT THE CONTRACT..................................................... 3
Effective Date ........................................................ 3
Contract and Application .............................................. 3
Proof of Age and Survival ............................................. 3
Misstatement of Age or Sex ............................................ 3
Assignments ........................................................... 3
Statement of Account .................................................. 4
3. THE OWNER ............................................................. 4
Who is the Owner ...................................................... 4
What are the Rights of the Owner ...................................... 4
How to Change the Owner ............................................... 5
Designation of Contingent Annuitant ................................... 5
4. PREMIUM PAYMENTS & ALLOCATIONS TO SUB-ACCOUNTS ........................ 5
Premium Payment Amounts ............................................... 5
Premium Payment Allocation ............................................ 5
Accumulation Units .................................................... 5
Additional Sub-Accounts ............................................... 6
Deferred Premium Tax .................................................. 6
5. TRANSFERS, WITHDRAWALS AND LAPSE ...................................... 6
Transfers among Sub-Accounts and the Guaranteed Interest Account ...... 6
Withdrawals and Full Surrender ........................................ 6
Lapse ................................................................. 7
Rules and Limitations ................................................. 7
Deferral of Payment ................................................... 7
6. EXPENSE CHARGES ....................................................... 8
Premium Tax ........................................................... 8
Surrender Charge ...................................................... 8
Transfer Charge ....................................................... 8
Annual Administrative Charge .......................................... 8
Mortality and Expense Risk Fee ........................................ 9
Daily Tax Fee ......................................................... 9
Daily Administrative Fee .............................................. 9
7. DETERMINING THE CONTRACT AND ACCUMULATION UNIT VALUES ................. 9
Crediting of Sub-Account Units and Premiums ........................... 9
Determination of Contract's Value ..................................... 9
Valuation of Sub-Accounts ............................................. 9
D601
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Part Page
- --------------------------------------------------------------------------------
8. ANNUITY BENEFITS ...................................................... 9
Maturity Date Guaranteed Rates ........................................ 10
9. DEATH BENEFITS ........................................................ 10
Death Proceeds ........................................................ 10
Death Before Maturity Date ............................................ 11
Distribution at Death Requirements .................................... 12
Death on or After Maturity Date ....................................... 12
The Beneficiary ....................................................... 12
Rights of the Beneficiary ............................................. 13
How to Change the Beneficiary ......................................... 13
10. PAYMENT OPTIONS ....................................................... 13
Calculation of Fixed Annuity Payments ................................. 13
Calculation of Variable Annuity Payments .............................. 14
Option A - Life Annuity with Specified Period Certain ................. 14
Option B - Non-Refund Life Annuity .................................... 14
Option D - Joint and Survivorship Life Annuity ........................ 14
Option E - Installment Refund Life Annuity ............................ 14
Option F - Joint and Survivorship Life Annuity with Specified
Period Certain ............................................. 14
Option G - Payments for a Specified Period ............................ 15
Option H - Payments of a Specified Amount ............................. 15
Option I - Variable Life Annuity with 10-Year Period Certain .......... 15
Option J - Joint Survivorship Variable Life Annuity with
10-Year Period Certain ..................................... 15
Option K - Variable Annuity for Specified Period ...................... 15
Option L - Variable Life Expectancy Annuity ........................... 15
Option M - Unit Refund Variable Life Annuity .......................... 15
Option N - Variable Non-Refund Life Annuity ........................... 16
Other Options ......................................................... 16
11. TABLE OF PAYMENT OPTION AMOUNTS ....................................... 16
Options A & E - Life Annuity with Specified Period Certain,
Installment Refund Life Annuity ....................... 16
Option B - Non-Refund Life Annuity..................................... 16
Option D - Joint and Survivorship Life Annuity ........................ 17
Option F - Joint and Survivorship Life Annuity with 10-Year
Period Certain ............................................. 17
Option G - Payments for a Specified Period ............................ 17
Option I - Variable Payment Life Annuity with 10-Year Period Certain .. 18
Option J - Joint Survivorship Variable Payment Life Annuity with
10-Year Period Certain ..................................... 18
Option K - Variable Payment Annuity for a Specified Period ............ 18
Option M - Variable Payment Life Annuity with Unit Refund ............. 19
Option N - Variable Payment Life Annuity .............................. 19
D601
<PAGE>
PART 1: DEFINITIONS
YOU (YOUR) The Owner of this contract.
WE (OUR, US) PHL Variable Insurance Company
ACCUMULATION A standard of measurement as described in Part 4, used to
UNIT determine the value of a Contract and its interest in the
Sub-accounts prior to the Maturity Date and for amounts held
under Payment Option L.
ACCUMULATION On the first Valuation Date selected by us, we set all
UNIT VALUE Accumulation Unit Values of each Sub-account of the Separate
Account at 1.000000. The Accumulation Unit Value on any
subsequent Valuation Date is determined by multiplying the
Accumulation Unit Value of the Sub-account on the immediately
preceding Valuation Date by the Net Investment Factor for that
Sub-account for the Valuation Period just ended.
ADJUSTED Any premium to the Guaranteed Interest Account, as adjusted to
PREMIUM include any interest credited on and any contract charges or
withdrawals deducted from such premium payment.
ANNUITANT On or prior to the Maturity Date, the term "Annuitant" as used in
this contract refers to the Primary Annuitant as shown on the
Schedule Page, while such Primary Annuitant is living, and then
the Contingent Annuitant, if any, as designated on the written
application for this contract or as later changed by you in
writing, provided such Contingent Annuitant is living at the
death of the Primary Annuitant. After the Maturity Date, the
term "Annuitant" shall mean the Annuitant under this contract
determined as of the Maturity Date.
ANNUITANT'S The beneficiary entitled to receive payment of any amounts
BENEFICIARY payable under this contract upon death of the Annuitant.
ANNUITY A contract promising a periodic series of payments.
ANNUITY UNIT A standard of measurement used to determine the amount of each
variable income payment made under the Variable Payment Options
I, J, K, M and N. The number of Annuity Units in each
Sub-account with assets under the chosen option is equal to the
portion of the first payment provided by that Sub-account
divided by the Annuity Unit Value for that Sub-account on the
first Payment Calculation Date.
ANNUITY On the first Valuation Date selected by us, we set all Annuity
UNIT VALUE Unit Values in each Sub-account of the Separate Account at
$1.000000. The Annuity Unit Value on any subsequent Valuation
Date is equal to the Annuity Unit Value of the Sub-account on
the immediately preceding Valuation Date multiplied by the Net
Investment Factor for that Sub-account for the Valuation Period
divided by 1.000000 plus the rate of interest for the number of
days in the Valuation Period based on the Assumed Investment
Rate.
ASSIGNS Any person to whom you assign an interest in this contract if we
have notice of the assignment in accordance with the provisions
stated in Part 2.
ASSUMED The Assumed Investment Rate is 4.5% per year. We use this rate
INVESTMENT to determine the first payment under Variable Payment Annuity
RATE Options I, J, K, M and N. Future payment amounts under these
options will depend on the relationship between the Assumed
Investment Rate and the actual investment performance of each
Sub-account as reflected in the Sub-account's Annuity Unit Value.
D601 1
<PAGE>
The Assumed Investment Rate is the annual investment return that
will need to be earned by each Sub-account of the Separate
Account for there to be no reduction in the amount of the monthly
payments under these options.
CONTRACT The same date each year as the Contract Date.
ANNIVERSARY
CONTRACT DATE The Contract Date shown on the Schedule Page. It is the date from
which contract years and anniversaries are measured.
CONTRACT The sum of the values under a Contract of all Accumulation
VALUE Units held in the Sub-accounts of the separate account and the
value held in the Guaranteed Interest Account.
CONTRACT YEAR The first contract year is the one-year period from the Contract
Date. Following Contract Years run from one Contract Anniversary
to the next.
FIXED PAYMENT An annuity providing payments which do not vary in amount after
ANNUITY the first payment is made.
MATURITY DATE The Maturity Date shown on the Schedule Page or such changed
Maturity Date as may result from death of the Primary Annuitant
while a Contingent Annuitant is living or as we may later agree
in writing. The Maturity Date may not be earlier than the fifth
Contract Anniversary, or later than the Contract Anniversary
nearest the Annuitant's 95th birthday unless we agree otherwise.
If a Contingent Annuitant becomes the Annuitant as the result of
death of the Primary Annuitant prior to the Maturity Date, unless
you and we agree otherwise, the Maturity Date will change to the
Contract Anniversary nearest the Contingent Annuitant's 95th
birthday.
NET INVESTMENT The Net Investment Factor for each Sub-account of the Separate
FACTOR Account is determined by the investment performance of the assets
underlying the sub-account for the Valuation Period just ended.
The Net Investment Factor is equal to 1.000000 plus the
applicable net investment rate for the Valuation Period. The
net investment rate is determined by:
a. taking the sum of the accrued net investment income and
capital gains and losses, realized or unrealized, of the
Sub-account for the Valuation Period; and
b. dividing the result of (a) by the Sub-account's share of
the Contract Value at the beginning of the Valuation
Period; and
c. for each calendar day in the Valuation Period subtracting
from the result of (a) divided by (b), an amount equal to
the mortality and expense risk fee plus the daily
administrative fee and any daily tax fee.
OWNER/ An individual who is both Owner and Annuitant under the contract.
ANNUITANT
OWNER'S The beneficiary entitled to receive payment of any amounts
BENEFICIARY payable under this contract upon death of the Owner.
PAYMENT The date we calculate annuity payments under a Variable Payment
CALCULATION Annuity Option. The first Payment Calculation Date is the
DATE Valuation Date on or next following the Settlement Date unless
we agree otherwise.
D601 2
<PAGE>
After the first Payment Calculation Date, we will calculate
payments on the same date each month. We use the next following
Valuation Date if such date is not a Valuation Date.
After the first Payment Calculation Date, you may not change
the Payment Option you elected.
PREMIUM The Valuation Date on which a premium payment is received at our
PAYMENT DATE Variable Products Operations unless it is received after the
close of the New York Stock Exchange, in which case it will be
the next Valuation Date.
SETTLEMENT The date contract proceeds are applied under a payment annuity
DATE option. Unless we agree otherwise, for death benefits, the
Settlement Date is the date that we receive a certified copy of
the Annuitant's certificate of death; for proceeds payable on
the Maturity Date, it is the Maturity Date; and for proceeds
payable upon a surrender, it is the effective date of the
surrender.
SUB-ACCOUNTS The accounts within our Separate Account to which assets under
the contract may be allocated.
SURRENDER Contract Value less any applicable contingent deferred sales
VALUE charge.
VALUATION Every day the New York Stock Exchange is open for trading and
DATE PHL Variable Insurance Company is open for business.
VALUATION The period in days beginning with the day following the last
PERIOD Valuation Date and ending on the next succeeding Valuation Date.
VARIABLE An annuity where each payment will vary with the investment
PAYMENT experience of the Sub-accounts within the separate account.
ANNUITY
VPO Our Variable Products Operations division. The address is shown
on the cover page of this contract.
WRITTEN A request in writing in a form satisfactory to us received by
REQUEST (AND us at VPO.
WRITTEN NOTICE)
PART 2: ABOUT THIS CONTRACT
THE EFFECTIVE This contract will begin in effect on the Contract Date provided
DATE the initial premium due is paid while the Annuitant is alive.
THE CONTRACT This contract and the written application, a copy of which is
AND attached to and made a part of this contract is the entire
APPLICATION contract between you and us. Any change in terms of this
contract, to be in effect, must be signed by one of our
executive officers and countersigned by our Registrar or one of
our executive officers. This contract is issued at our Main
Administrative Office in Hartford, Connecticut. Any benefits
payable under this contract are payable at VPO.
REQUIRED We may require proof of the Annuitant's age before any annuity
PROOF OF AGE payments will begin. We also have the right to require proof of
AND SURVIVAL the identity, age and survival of any person entitled to any
payment under this contract or upon whose life any payments
depend.
ADJUSTMENT FOR If the age or sex of the Annuitant has been misstated, any
MISSTATEMENT benefits payable will be adjusted to the amount that the
OF AGE OR SEX Contract Value would have purchased based on the Annuitant's
correct age and sex. Any over payment(s) and under payment(s)
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made by us will be charged or credited against future payments
to be made under the contract.
ASSIGNMENTS We will not be considered to have notice of any assignment of an
interest in this contract until we receive the original or copy
of the written assignment at VPO. In no event will we be
responsible for its validity.
STATEMENT OF We will furnish you, at least annually, a statement of the
ACCOUNT Contract Value of this contract in each of the Sub-accounts. We
will also provide you with a statement of the investments held
by each Sub-account of the Separate Account. After the Maturity
Date, we will provide you with an Annual Statement of Account
Activity.
PART 3: THE OWNER
WHO IS THE The Owner is the person named as Owner in the application. The
OWNER Owner may be the Annuitant, an employer, a trust or any other
individual or entity specified in the application for the
Contract. However, under Contracts used with certain tax
qualified plans, the Owner must be the Annuitant. A husband and
wife may be designated as Joint Owners, and if such a Joint
Owner dies, the other Joint Owner becomes the sole Owner of the
Contract. If no Owner is named, the Annuitant will be the Owner.
WHAT ARE THE You control this contract during the Annuitant's lifetime but not
RIGHTS OF THE until the effective date. Unless you and we agree otherwise, you
OWNER may exercise all rights provided under this contract without the
consent of anyone else. Your rights include the right to:
a. Receive any amounts payable under this contract during the
Annuitant's lifetime.
b. Change the Owner.
c. Change the premium payment amount and premium payment
intervals. See Part 4.
d. Change the allocation schedule for premium payments. See
Part 4.
e. Transfer Contract Values between and among the various
Sub-accounts and the Guaranteed Interest Account. See
Part 5.
f. Make withdrawals from the various Sub-accounts and the
Guaranteed Interest Account or fully surrender the contract
for its Surrender Value. See Part 5.
g. Select a Payment Option for amounts payable upon a
withdrawal or full surrender.
h. Select an alternative Payment Option to commence on the
Maturity Date. See Part 8.
i. Change the Owner's or Annuitant's Beneficiary.
j. Assign, subject to the restrictions stated in Part 2,
release, or surrender any interest in this contract. See
Parts 2 and 5.
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k. Change the Contingent Annuitant any time prior to the death
of the Primary Annuitant.
You may exercise these rights only while the Annuitant is alive.
Your exercise of any rights will, to the extent thereof, assign,
release, or surrender the interest of the Annuitant and all
beneficiaries and Owners under this contract.
HOW TO CHANGE To change the Owner you must submit a written request
THE OWNER satisfactory to us.
DESIGNATION Prior to the death of the Annuitant, you may designate or change
OF CONTINGENT the Contingent Annuitant by notifying VPO in writing with the
ANNUITANT name, date of birth, sex, Social Security Number and address of
the new Contingent Annuitant.
If you are an Owner/Annuitant and your spouse is designated as
your beneficiary under this Contract, your surviving spouse will
automatically be designated as the Contingent Annuitant.
PART 4: PREMIUM PAYMENTS AND ALLOCATIONS TO SUB-ACCOUNTS
PREMIUM The initial premium payment is due on the Contract Date. The
PAYMENT Annuitant must be alive when the initial premium payment is
AMOUNTS made. Thereafter, the premium payment amount and intervals are
as shown on the Schedule Page unless later changed as described
below. All premium payments are payable at VPO, except that the
initial premium payment may be given to an authorized agent for
forwarding to VPO. No benefit associated with any such premium
payment will be provided until it is actually received by us at
VPO.
You may vary the amount and premium payment intervals for
subsequent premium payments, and additional premium payments
may be made within the following limits:
a. Each premium payment must at least equal $25.
b. No more than $1,000,000 in total premium payments may be
paid on this contract, unless we agree otherwise.
c. The premium payment intervals may be unscheduled or
changed to annual, semi-annual, quarterly, monthly, or any
other arrangement agreed to by us.
d. Additional premium payments may only be made while an
Annuitant is living, prior to the Maturity Date.
We reserve the right to waive the limits in a & b above.
PREMIUM The premium payment will be applied on its Premium Payment Date
PAYMENT to the various Sub-accounts and the Guaranteed Interest Account
ALLOCATION shown on the Schedule Page in accordance with your instructions.
You may change the allocation schedule with respect to subsequent
or additional premium payments by written or telephone request.
We reserve the right to waive the requirement of written notice.
ACCUMULATION The number of Accumulation Units credited to each Sub-account
UNITS of the Separate Account will be determined by dividing the
premium payment applied to that Sub-account by the Accumulation
Unit Value of that Sub-account on the Premium Payment Date. The
amount deposited to the Guaranteed Interest Account will equal
the amount of any premium payment applied on the Premium Payment
Date.
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ADDITIONAL We have the right to add additional Sub-accounts of the Separate
SUB-ACCOUNTS Account subject to approval by the Securities and Exchange
Commission and, where required, other regulatory authority. We
further reserve the right to add other Guaranteed Interest
Accounts.
DEFERRED Depending upon state law, a premium tax may be required based on
PREMIUM TAX the laws of the state of issue or the state in which the Owner
resides when a premium payment is applied. The premium tax rate
for the initial premium payment will be shown on the Schedule
Page. This rate may change for subsequent premium payments in
accordance with State law. We will pay any premium tax due and
will only reimburse ourselves upon the earlier of partial
withdrawal, surrender of the Contract, payment of death proceeds
or the Maturity Date. At the time of reimbursement, we will
deduct the tax proportionately from the Sub-accounts and
Guaranteed Interest Account based on their proportionate Contract
Value. On partial withdrawals, we will deduct a pro-rata amount
of the tax based upon the ratio of the amount withdrawn to the
Contract Value.
PART 5: TRANSFERS, WITHDRAWALS, AND LAPSE
TRANSFERS You may transfer all or a portion of the Contract Value of this
AMONG contract among one or more of the Sub-accounts and the
SUB-ACCOUNTS Guaranteed Interest Account. You can make up to six transfers per
AND THE contract year from Sub-accounts of the Separate Account and only
GUARANTEED one transfer per contract year from the Guaranteed Interest
INTEREST Account unless the Systematic Transfer Program is elected. We
ACCOUNT reserve the right to limit the number of transfers you may make.
Under that program, funds may be transferred automatically among
the Sub-accounts on a monthly, quarterly, semi-annual or annual
basis. Unless we agree otherwise, the minimum initial and
subsequent transfer amounts are $25 monthly, $75 quarterly, $150
semi-annually or $300 annually. Except as otherwise provided
under the Systematic Transfer Program, the amount that may be
transferred from the Guaranteed Interest Account at any one-time
cannot exceed the higher of $1000 or 25% of the value of the
Guaranteed Interest Account.
Transfers may be made by written or telephone request. The
transfer charge if any, as of the Contract Date, is shown on the
Schedule Page. Any such charge will be deducted from the
Sub-accounts or Guaranteed Interest Account from which the
amounts are to be transferred in the same proportion as the
amounts to be transferred to each Sub-account or Guaranteed
Interest Account bear to the total amount transferred. The value
of each Sub-account will be determined on the Valuation Date that
coincides with the date of transfer. Any Accumulation Units held
under a Sub-account of the Separate Account or Adjusted Premiums
held under the Guaranteed Interest Account as the result of any
transfer shall retain its original Premium Payment Date.
WITHDRAWALS You may withdraw in cash the Contract Value of this contract,
AND FULL less any applicable deferred premium tax and contingent deferred
SURRENDER sales charge, in whole or in part any time prior to the Maturity
Date or at any time for amounts held under Variable Payment
Annuity Options K or L. Such withdrawals must be by written
request in a form satisfactory to us and must include such tax
withholding information as we may reasonably require. The portion
withdrawn from any Sub-account of the Separate Account will be
taken by the surrender and release of such number of Accumulation
Units in such Sub-account required to make the withdrawal,
including any deferred premium tax or contingent deferred sales
charge applicable to such withdrawal. Any portion withdrawn
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from the Guaranteed Interest Account will be taken by the release
of Adjusted Premiums in the amount needed to make the withdrawal
including any deferred premium tax or contingent deferred sales
charge applicable to such withdrawal. If as the result of a
withdrawal, no Contract Value remains under this contract, the
contract will be deemed fully surrendered and of no further value
or effect. The Contract Value of each Sub-account will be
determined on the Valuation Date that coincides with the date of
the withdrawal.
After the first Contract Year, and each Contract Year before the
Maturity Date, an amount up to 10% of the Contract Value as of
the end of the prior contract year may be withdrawn free of any
contingent deferred sales charge. Any amount withdrawn during the
first contract year or in excess of the 10% in subsequent
contract years will be subject to the following contingent
deferred sales charge, expressed as a percentage of the amount
withdrawn:
Age in Complete Years from Payment
Date of Unit or Adjusted Premium Contingent Deferred
Released to Effectuate Withdrawal Sales Charge
------------------------------------ -------------------
0 7%
1 6%
2 5%
3 4%
4 3%
5 2%
6 1%
7 and over 0%
In no event, however, will the total of all contingent deferred
sales charges applied under this contract exceed 9% of the total
premium payments paid on this contract.
You may elect to apply the amount withdrawn or surrendered to the
various Payment Options described in Part 10.
LAPSE If on any Valuation Date the Contract Value of this contract
becomes zero, the contract will immediately terminate and lapse
without value unless any Contract Value has been applied under
one of the Variable Payment Options. We will mail to you, at your
most recent post office address on file with us at VPO, a written
notice of lapse within 30 days after any such Valuation Date.
RULES AND The Accumulation Units and Adjusted Premiums released for
LIMITATIONS transfer or withdrawal will be determined on a First-In,
First-Out (FIFO) basis based on Premium Payment Date. No
withdrawals, or full surrender may be made after commencement of
an annuity on the Maturity Date except for any Contract Value
remaining under Options K or L. Also, you may not transfer any
assets under Option M, unless we agree otherwise.
DEFERRAL OF With the exception of transfers from the Guaranteed Interest
PAYMENT Account, as described above under Transfers Among Sub-Accounts
and withdrawals from such Sub-account as described below,
transfers, withdrawals, or a request for a full surrender will
usually be processed within 7 days after we receive the written
request at VPO. However, we may postpone the processing of any
such transactions for any of the following reasons (as provided
under the Investment Company Act of 1940):
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(a) when the New York Stock Exchange is closed, other than
customary weekend and holiday closings; (b) when trading on the
exchange is restricted by the Securities and Exchange Commission;
(c) when the Securities and Exchange Commission declares that an
emergency exists as a result of which disposal of securities in
the Fund is not reasonably practicable or it is not reasonably
practicable to determine the value of the Units in the
Sub-accounts of the Separate Account; or (d) when a governmental
body having jurisdiction over the VA Account by order permits
such suspension.
Rules and regulations of the Securities and Exchange Commission,
if any, are applicable and will govern as to whether conditions
described in (b) or (c) or (d) exist.
For withdrawals from the Guaranteed Interest Account, we may
defer payment for six months from the date the request is
received by us at VPO. If payment is delayed 30 days or more,
we will add interest at an annual rate of 4%.
PART 6: EXPENSE CHARGES
Charges to cover expenses incurred by us in the distribution and
administration of this contract are made in the manner described
below.
PREMIUM TAX The premium tax, if any, as of the Contract Date, is shown on the
Schedule Page. This rate may change for subsequent premium
payments in accordance with applicable State law. We will pay any
premium tax due and will only reimburse ourselves upon the
earlier of partial withdrawal, surrender of the Contract, payment
of death proceeds or the Maturity Date. At the time of
reimbursement, we will deduct the tax proportionately from the
Sub-accounts and Guaranteed Interest Account based on their
proportionate Contract Value. On partial withdrawals, we will
deduct a pro-rata amount of the tax based upon the ratio of the
amount withdrawn to the Contract Value.
SURRENDER A charge to cover expenses incurred in the sale and distribution
CHARGE of this contract is taken in the form of a contingent deferred
sales charge as described in Part 5 which is applied to any
withdrawals or full surrender made within the seven-year period
following the Premium Payment Date of the Accumulation Units or
Adjusted Premiums released to make such withdrawal or surrender.
TRANSFER A transfer charge as shown on the Schedule Page is imposed on
CHARGE transfers.
ANNUAL A portion of the administrative expense incurred by us is
ADMINISTRATIVE assessed in the form of an annual charge as shown on the Schedule
CHARGE Page. We reserve the right to lower such charge. Such charge will
be deducted at the end of each contract year from the total
Contract Value with each Sub-account and Guaranteed Interest
Account bearing a pro-rata share of such expense based on the
proportionate Contract Value of each of the Sub-accounts and
Guaranteed Interest Account. By agreement with us, you may,
instead, elect to pay this charge in cash.
If you elect Payment Options I, J, K, M or N, the Annual
Administrative Charge after the Maturity Date will be deducted
from each annuity payment in proportionately equal amounts.
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MORTALITY AND The mortality and expense risk fee is taken in the form of a
EXPENSE RISK daily fee against each Sub-account of the Separate Account in
FEE such amount as shown on the Schedule Page. We reserve the right
to lower such fee.
DAILY TAX A daily tax fee, if any, is taken by us in the form of a daily
FEE fee against each Sub-account of the Separate Account in such
amount as shown on the Schedule Page.
DAILY A portion of the administrative expense incurred by us is
ADMINISTRATIVE assessed in the form of a daily fee against each Sub-account of
FEE the Separate Account as shown on the Schedule Page.
PART 7: DETERMINING THE CONTRACT AND ACCUMULATION UNIT VALUES
CREDITING OF When a premium payment is received by us, we will apply it on the
SUB-ACCOUNT Premium Payment Date to credit Accumulation Units to one or more
UNITS AND Sub-accounts of the Separate Account or to credit premiums to the
PREMIUMS Guaranteed Interest Account in accordance with the most recent
allocation schedule on file with us. The number of Accumulation
Units credited to each Sub-account will be determined by
dividing the premium payment, applied to that Sub-account by the
then current Accumulation Unit Value of that Sub-account. The
Accumulation Unit Value of each Sub-account on a Valuation Date
is determined at the end of that day.
DETERMINATION The value of a Sub-account of the Separate Account, at any time
OF THE prior to the Maturity Date, is determined by multiplying the
CONTRACT total number of Accumulation Units under this contract for that
VALUE Sub-account by the current Accumulation Unit Value of that
Sub-account. The Contract Value for amounts held under Variable
Payment Annuity Option L is determined in the same manner. The
value of the Guaranteed Interest Account equals the total value
of the Adjusted Premiums. The total Contract Value under this
contract equals the sum of the values of each of the Sub-accounts
and the Adjusted Premiums.
THE VALUATION The values and benefits of the Guaranteed Interest Account are
OF not less than those required by the laws of the state in which it
SUB-ACCOUNTS is delivered.
AND
GUARANTEED The values of the assets in each Sub-account will be calculated
INTEREST in accordance with applicable law and accepted procedures.
ACCOUNT
PART 8: ANNUITY BENEFITS
Unless you elect an alternative Payment Option as described in
Part 10 on or before the Maturity Date, the Contract Value less
any premium tax due on the Maturity Date will automatically be
applied to provide you a variable monthly life annuity with
10-year period certain based on the Annuitant's age and sex under
Payment Option I as described in Part 10. Any annuity payments
falling due after the Annuitant's death during the period certain
will be paid to the Annuitant's Beneficiary.
If the amount to be applied on the Maturity Date is less than
$2,000 or would result in monthly payments of less than $20, we
shall have the right to pay such amount to you in one lump sum in
lieu of providing such annuity. We also have the right to change
the annuity payment frequency to annual if the monthly annuity
payment would otherwise be less than $20.
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MATURITY DATE The amount of the first monthly annuity payment for each $1,000
GUARANTEED of Contract Value applied on the Maturity Date to purchase a
RATES variable life annuity with 10-year period certain on the
Annuitant's life under Payment Option I as described in Part 10,
will be no less than the rates shown below. However, if our
current rates in effect for this contract on the Maturity Date
are more favorable, we will use them.
OPTION I -- VARIABLE PAYMENT LIFE ANNUITY WITH 10-YEAR
PERIOD CERTAIN
------------------------------------------
AGE OF
PAYEE MALE FEMALE
------------------------------------------
40 $4.15 $4.02
45 4.29 4.12
50 4.40 4.27
55 4.73 4.46
60 5.06 4.71
65 5.51 5.05
70 6.08 5.52
75 6.79 6.17
80 7.65 6.99
85 8.57 7.98
------------------------------------------
PART 9: DEATH BENEFITS
DEATH For deaths occurring prior to the Maturity Date, the term death
PROCEEDS proceeds is defined as follows:
1. Upon the death of an Owner/Annuitant, (an individual who is
both the Owner and the Annuitant under a contract), the
death proceeds are equal to the same Death Benefit as
described under number 2 below less any deferred premium
tax.
2. Upon the death of an Annuitant who is not the Owner, the
death proceeds are equal to the Death Benefit as described
below less any deferred premium tax.
Prior to the Annuitant's Age 85, the Death Benefit is calculated
as follows:
a. Death occurring in the first 7 Contract Years - The
greater of:
i. the sum of all premium payments made under the
Contract less any prior partial withdrawals (see
"Withdrawals and Full Surrenders" in Part 5); or
ii. the Contract Value next determined following receipt
of a certified copy of the death certificate at VPO.
b. Death occurring during the Contract Years 8 through 14 (and
each 7 year period thereafter) - the greater of:
i. the death benefit that would have been payable at the
end of the immediately preceding 7-year period, plus
the sum of premium payments less any partial
withdrawals made since such date; or
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ii. the Contract Value next determined following receipt
of a certified copy of the death certificate at VPO.
After the Annuitant's age 85, the Death Benefit equals the
Contract Value next determined following receipt of a certified
copy of the death certificate at VPO.
3. Upon the death of an Owner who is not the Annuitant, the
death proceeds are equal to the cash Surrender Value of the
Contract, (Contract Value less any applicable contingent
deferred sales charges and any deferred premium tax).
4. In the event of the election by the Owner's or
Owner/Annuitant's beneficiary to defer payment of the death
proceeds for a period of longer than one Contract Year, the
death proceeds payable upon distribution shall be as
calculated in accordance with the method defined under Death
occurring in the first 7 Contract Years as described above.
The death proceeds due may be applied under any of the Payment
Options described in Part 10 subject to the following
limitations:
a. Options D, F and J are not available for death
benefits;
b. Under Options A, E, G, H and K the period specified
must be at least 5 years, but not beyond the life
expectancy of such beneficiary.
DEATH BEFORE l. Death of an Owner/Annuitant (an individual WHO IS BOTH the
MATURITY DATE Owner and the Annuitant under the contract):
If an Owner/Annuitant dies before the Maturity Date, upon
receipt of due proof of death, the death proceeds will be
paid to the Annuitant's Beneficiary except as follows:
0 If the Owner/Annuitant's Beneficiary (i.e., Owner's
Beneficiary) is the surviving spouse, within 60 days
of our receipt of due proof of death, the surviving
spouse may elect to continue the Contract as new
Owner/Annuitant as if no death had occurred.
2. Death of an Annuitant WHO IS NOT the Owner:
If an Annuitant who is not the Owner dies before the
Maturity Date, upon receipt of due proof of death, the death
proceeds will be paid to the Annuitant's Beneficiary except
as follows:
0 If there is a Contingent Annuitant, the Contract will
continue with the Contingent Annuitant becoming the
new Annuitant.
We shall have the right to first require return of the contract
to us so that we may amend it to reflect these changes.
3. Death of an Owner WHO IS NOT the Annuitant:
If an Owner who is not the Annuitant dies before the
Maturity Date, upon receipt of due proof of death, we will
pay the Owner's Beneficiary the death proceeds, except in
the following instances:
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a. If the Owner's surviving spouse is a Joint Owner, the
Contract will continue with the surviving Joint Owner
becoming the sole Owner.
b. If the Owner's Beneficiary is the surviving spouse,
within 60 days of our receipt of due proof of death the
surviving spouse may elect to continue the Contract as
the new Owner as if no death had occurred.
DISTRIBUTION If the Owner/Annuitant dies before the Maturity date and there is
AT DEATH no Contingent Annuitant, then the Annuitant's Beneficiary must
REQUIREMENTS elect within 60 days of our receipt of due proof of death to
receive the death proceeds in a lump sum or elect to apply the
death proceeds due under a Payment Option, provided that the
payments begin within one year of the date of death of the
Owner/Annuitant. If there is a Contingent Annuitant who is not
the Owner/Annuitant's spouse, then the Owner/Annuitant's entire
interest in this contract must be distributed within five years
of the date of the Owner/Annuitant's death, provided that the
Owner's Beneficiary may elect to apply the death proceeds to a
Payment Option not extending beyond the life (or life expectancy)
of such Owner's Beneficiary and the payments begin within one
year after the Owner/Annuitant's death.
If the Annuitant who is not the Owner dies before the Maturity
Date and there is no Contingent Annuitant, then the Annuitant's
Beneficiary must elect within 60 days of our receipt of due proof
of death to receive the death proceeds in a lump sum or elect to
apply the death proceeds due under a Payment Option, provided
that the payments begin within one year of the date of death of
the Annuitant.
If the Owner who is not the Annuitant dies before the Maturity
Date and the Owner's surviving spouse is not the Joint Owner or
the Owner's Beneficiary, the Owner's entire interest in this
Contract must be distributed within five years of the date of the
Owner's death, provided that the Owner's Beneficiary may elect to
apply the death proceeds to a Payment Option not extending beyond
the life (or life expectancy) of the Owner's Beneficiary and the
payments begin within one year after the Owner's death.
DEATH ON OR If either the Owner/Annuitant, Annuitant, or Owner dies on or
AFTER THE after the Maturity Date, any remaining income payments will be
MATURITY DATE continued to the Annuitant's Beneficiary (or Owner's Beneficiary
if there is no Annuitant's Beneficiary). Under Payment Option M,
the sum of the number of remaining Annuity Units for each
Sub-account multiplied by the current Annuity Unit Value for that
Sub-account will be paid to the Annuitant's or Owner's
Beneficiary in a lump sum, (see "Option M - Unit Refund Variable
Life Annuity" in Part 10).
THE ANNUITANT'S BENEFICIARY:
BENEFICIARY
The Annuitant's Beneficiary shall be as stated in the application
for this Contract, unless later changed as provided under the
terms of this contract. Any death benefit payable to the
Annuitant's Beneficiary will be paid to the Owner or the Owner's
estate if the Annuitant's Beneficiary is not living when such
death benefit becomes payable.
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THE OWNER'S BENEFICIARY:
The Owner's Beneficiary shall be as stated in the application for
this Contract, unless later changed as provided under this
contract. Any death proceeds payable to the Owner's Beneficiary
will be paid to the Owner's estate if the Owner's Beneficiary is
not living when such death proceeds become payable.
In the case of the death of an Owner/Annuitant where conflicting
Owner and Annuitant's Beneficiaries have been named, any death
proceeds payable will be paid to the Annuitant's Beneficiary.
The naming of an Owner's or Annuitant's beneficiary by
familial relationship (such as Mother, Father, etc.) shall be
understood to be their relationship to the Owner or Annuitant
making such designation.
WHAT ARE THE 1. Receive the death proceeds payable under this contract; or
RIGHTS OF THE
BENEFICIARY 2. Select a Payment Option for the death proceeds; or
3. Transfer the amount of any deferred death proceeds between
and among the various Sub-accounts. See Part 5.
HOW TO CHANGE At any time prior to the death of the last of the Annuitants
THE under this contract, you may change the Owner's Beneficiary
BENEFICIARY or the Annuitant's Beneficiary. The change must be made by
written notice signed by you and filed with us at VPO. When we
receive it, the change will be effective as of the date it was
signed by you. However, the change will be subject to any payment
made or actions taken by us before we received the notice at VPO.
PART 10: PAYMENT OPTIONS
The election of a payment option must be in a written form
satisfactory to us. We reserve the right to require that the
election of a payment option be in the form of a supplementary
contract distributed by us reflecting the terms of the payment
option elected. We have the right to require proof of age and sex
of any person on whose life payments depend, as well as proof of
the continued survival of any such person. We further have the
right to require that the amount applied on the settlement date
to any payment option elected at least equal $2,000 and result in
a monthly payment of at least $20. As regards the election of a
payment option by the beneficiary of any death benefit payable
under this contract, limited as described in Part 9, the term
"Annuitant" as used below shall refer to such beneficiary.
CALCULATION OF The guaranteed annuity payment rates under the following options
FIXED ANNUITY will be based on the Annuitant's age and sex, and will be no less
PAYMENTS favorable than the following:
Under Options A, B, D, E and F rates are based on the a-49
Annuity Table projected to 1985 with Projection Scale B. We use
an interest rate of 3-3/8% for 5 and 10 year certain periods
under Option A, for the 10 year certain period under Option F,
and for Option E; an interest rate 3-1/4% for the 20 year certain
period under Options A and F; an interest rate of 3-1/2% under
Options B and D. Under Options G and H the guaranteed interest
rate is 3%.
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If our rates in effect on the Settlement Date are more favorable,
we will use those rates.
CALCULATION Under the following options, all payments after the first payment
OF VARIABLE will vary with the investment experience of the Sub-accounts.
ANNUITY Payments may be either higher or lower than the first payment.
PAYMENTS
Under Options I, J, K, M and N, we determine the first payment by
multiplying the amounts held under the selected option in each
Sub-account of the Separate Account by the applicable option
rate. The first payment equals the total of such amounts
determined for each Sub-account. We determine future payments
under these options by multiplying the number of Annuity Units in
each Sub-account by the Annuity Unit Value for each Sub-account
on the Payment Calculation Date. The payment will equal the sum
of the amounts provided by each Sub-account.
Under Option L, we determine the amount of the annual
distribution by dividing the amount of Contract Value held under
this option on December 31 of the previous year by the life
expectancy of the Annuitant or the joint life expectancy of the
Annuitant and Joint Annuitant at that time.
Under Options I, J, M and N, the applicable option rate used to
determine the first payment amount will not be less than the rate
based on the 1983 Table A (1983 IAM) projected with Projection
Scale G to the year 2040, and with continued projection
thereafter, and on the Assumed Investment Rate. Under Option K,
the rate will be based on the number of payments to be made
during the specified period and the Assumed Investment Rate.
OPTION A- LIFE A fixed payout annuity payable monthly while the Annuitant is
ANNUITY WITH living or, if later, the end of the specified period certain. The
SPECIFIED period certain may be specified as 5, 10, or 20 years. The period
PERIOD CERTAIN certain must be elected at the time this option is elected.
OPTION B - A fixed payout annuity payable monthly while the Annuitant is
NON-REFUND living and ending with the last Life payment due preceding the
LIFE ANNUITY date of the Annuitant's death.
OPTION D - A fixed payout annuity payable monthly while the Annuitant and
JOINT AND the designated Joint Annuitant are living, and continuing
SURVIVORSHIP thereafter during the lifetime of the survivor. The amount to be
LIFE ANNUITY continued to the survivor is 100% of the joint annuity payment,
as specified at the time this option is elected. The designated
Joint Annuitant must be designated at the time this option is
elected and must have an adjusted age of at least 40. The
adjusted age is the person's age on his or her birthday nearest
the Settlement Date.
OPTION E - A fixed payout annuity payable monthly while the Annuitant is
INSTALLMENT living or, if later, the date the annuity payments made under
REFUND LIFE this option total an amount which refunds the entire amount
ANNUITY applied under this option. If the Annuitant is not living when
the final payment falls due, that payment will be limited to the
amount which needs to be added to the payments already made to
equal the entire amount applied under this option.
OPTION F - A fixed payout annuity payable monthly while either the Annuitant
JOINT AND or designated Joint Annuitant is living, or if later, the end of
SURVIVORSHIP 10 years. The designated Joint Annuitant must be designated at
LIFE ANNUITY the time this option is elected and must have an adjusted age of
WITH 10-YEAR at least 40 years. The adjusted age is the person's age on his
PERIOD CERTAIN or her birthday nearest the settlement date.
D601 14
<PAGE>
OPTION G - Equal income installments for a specified period of years are
PAYMENTS FOR paid whether the payee lives or dies. The period certain
A SPECIFIED specified must be in whole numbers of years from 5 to 30.
PERIOD
OPTION H - Equal income installments of a specified amount are paid until
PAYMENTS OF the principal sum remaining under this option from the amount
A SPECIFIED applied is less than the amount of the installment. When that
AMOUNT happens, the principal sum remaining will be paid as a final
payment. The amount specified must provide for payments for a
period of at least 5 years.
OPTION I - This option provides variable monthly payments that will continue
VARIABLE LIFE during the lifetime of the Annuitant or for ten years, if longer.
ANNUITY WITH If the beneficiary of any death benefits payable under this
10-YEAR PERIOD contract elects this payment option, the term "Annuitant" as used
CERTAIN in the preceding paragraph shall refer to such beneficiary and
the period certain will equal 10 years, or the life expectancy of
such beneficiary, if shorter.
OPTION J - This option provides variable monthly payments while the
JOINT Annuitant and the designated Joint Annuitant are living. Payments
SURVIVORSHIP will continue during the life of the survivor or until the end of
VARIABLE LIFE 10 years if later. You must designate the Joint Annuitant at the
ANNUITY WITH time you elect this option. The designated Joint Annuitant must
10-YEAR PERIOD be at least age 40 on the birthday nearest the first Payment
CERTAIN Calculation Date. This option is not available for the payment of
any death benefit under the Contract.
OPTION K - This option provides variable monthly payments through the
VARIABLE release of a fixed number of Annuity Units over a specified
ANNUITY FOR period of time. Payment continues whether the Annuitant lives or
SPECIFIED dies. The specified period must be in whole numbers of years from
PERIOD 5 to 30. However, the period selected by the beneficiary may not
extend beyond the life expectancy of such beneficiary. This
option also provides for unscheduled withdrawals. An unscheduled
withdrawal will reduce the number of remaining annuity units.
Thus, the specified period will be reduced to the period that the
remaining annuity units can provide.
OPTION L - This option provides a variable income which is payable over the
VARIABLE LIFE Annuitant's annually recalculated life expectancy or the annually
EXPECTANCY recalculated life expectancy of the Annuitant and Joint
ANNUITY Annuitant. This option also provides for unscheduled withdrawals.
An unscheduled withdrawal will reduce the Contract Value. This
will thus affect the amount of future payments. Upon the death of
the Annuitant (and Joint Annuitant, if there is a Joint
Annuitant) the remaining Contract Value will be paid in a lump
sum to the Annuitant's beneficiary.
OPTION M - This option provides variable monthly payments as long as the
UNIT REFUND Annuitant lives. In the event of the death of the Annuitant, the
VARIABLE LIFE income will stop and the Annuitant's Beneficiary will receive in
ANNUITY a lump sum the value of the remaining Annuity Units. This value
is equal to the sum of the number of remaining Annuity Units for
each Sub-account multiplied by the current Annuity Unit Value for
that Sub-account. The number of remaining Annuity Units for each
Sub-account of the Separate Account will be calculated as
follows:
(1) The net amount in the Sub-account applied under this option
on the first Payment Calculation Date divided by the
corresponding Annuity Unit Value on that date minus
D601 15
<PAGE>
(2) the sum of the Annuity Units released from the Sub-account
to make the payments under this option.
OPTION N - This option provides a variable monthly income for the lifetime
VARIABLE of the Annuitant. No income is payable after the death of the
NON-REFUND Annuitant.
LIFE ANNUITY
OTHER OPTIONS We may offer other payment options or alternative versions of the
options listed above.
PART 11: TABLE OF PAYMENT OPTION AMOUNTS
The tables that follow show the guaranteed minimum monthly
payments for Options A-G, and the minimum initial payment for
the Variable Payment Options I, J, K, M and N for each $1,000
applied. If our rates in effect at the Settlement Date are more
favorable, we will use those rates. Subsequent monthly payments
for the Variable Payment Options will vary and may be higher or
lower than the first payment. Amounts for payment frequencies,
periods or ages not shown will be furnished upon request.
The term "age" as used in the tables refers to the adjusted age.
The adjusted age is defined as follows: the age of the
annuitant on the annuitant's birthday nearest the effective date
of the payment option elected.
OPTIONS A & E -- LIFE ANNUITY WITH SPECIFIED PERIOD CERTAIN;
INSTALLMENT REFUND LIFE ANNUITY
-------------------------------------------------------------------
INSTALLMENT REFUND 10 YEARS CERTAIN 20 YEARS CERTAIN
AGE OF ----------------------------------------------------------
PAYEE MALE FEMALE MALE FEMALE MALE FEMALE
-------------------------------------------------------------------
40 $3.80 $3.64 $3.86 $3.60 $3.74 $3.54
45 4.05 3.85 4.14 3.82 3.99 3.74
50 4.36 4.12 4.50 4.10 4.28 3.99
55 4.76 4.47 4.95 4.47 4.61 4.31
60 5.28 4.93 5.54 4.96 4.97 4.67
65 5.97 5.54 6.30 5.63 5.29 5.06
70 6.91 6.39 7.24 6.50 5.43 5.31
75 8.21 7.57 8.26 7.56 5.44 5.40
80 10.04 9.26 9.12 8.60 5.46 5.46
85 12.61 11.68 9.60 9.31 5.46 5.46
-------------------------------------------------------------------
OPTION B -- NON-REFUND LIFE ANNUITY
----------------------------
AGE OF
PAYEE MALE FEMALE
----------------------------
40 $3.95 $3.75
45 4.24 3.98
50 4.62 4.28
55 5.12 4.68
60 5.79 5.24
65 6.75 6.04
70 8.15 7.22
75 10.26 9.03
80 13.54 11.88
85 18.72 16.54
----------------------------
D601 16
<PAGE>
OPTION D -- JOINT AND SURVIVORSHIP LIFE ANNUITY
------------------------------------------------------------------------
FEMALE MALE
----------------------------------------------------------------------
AGE 40 45 50 55 60 65 70 75
------------------------------------------------------------------------
40 $3.49 $3.55 $3.59 $3.62 $3.64 $3.65 $3.66 $3.67
45 3.58 3.67 3.74 3.80 3.83 3.86 3.88 3.89
50 3.65 3.79 3.90 4.00 4.07 4.12 4.16 4.18
55 3.72 3.89 4.06 4.22 4.35 4.44 4.51 4.56
60 3.77 3.97 4.20 4.43 4.65 4.83 4.96 5.05
65 3.80 4.04 4.31 4.62 4.94 5.25 5.51 5.71
70 3.83 4.08 4.34 4.77 5.20 5.67 6.13 6.52
75 3.85 4.12 4.46 4.88 5.40 6.04 6.75 7.46
------------------------------------------------------------------------
OPTION F -- JOINT AND SURVIVORSHIP LIFE ANNUITY WITH
10-YEAR PERIOD CERTAIN
------------------------------------------------------------------------
FEMALE MALE
----------------------------------------------------------------------
AGE 40 45 50 55 60 65 70 75
------------------------------------------------------------------------
40 $3.49 $3.55 $3.59 $3.62 $3.64 $3.65 $3.66 $3.67
45 3.58 3.67 3.74 3.80 3.83 3.86 3.88 3.89
50 3.65 3.78 3.90 4.00 4.07 4.12 4.15 4.17
55 3.72 3.89 4.06 4.22 4.34 4.44 4.50 4.54
60 3.77 3.97 4.19 4.43 4.64 4.82 4.95 5.03
65 3.80 4.03 4.31 4.61 4.93 5.23 5.45 5.65
70 3.83 4.08 4.39 4.75 5.18 5.63 6.07 6.41
75 3.85 4.11 4.45 4.86 5.36 5.96 6.62 7.21
------------------------------------------------------------------------
OPTION G -- PAYMENTS FOR A SPECIFIED PERIOD
-------------------------------------------
NUMBER OF ANNUAL MONTHLY
YEARS INSTALLMENT INSTALLMENT
-------------------------------------------
5 $211.99 $17.91
6 179.22 15.14
7 155.83 13.16
8 138.31 11.68
9 124.69 10.53
10 113.82 9.61
11 104.93 8.86
12 97.54 8.24
13 91.29 7.71
14 85.95 7.26
15 81.33 6.87
16 77.29 6.53
17 73.74 6.23
18 70.59 5.96
19 67.78 5.73
20 65.26 5.51
25 55.76 4.71
30 49.53 4.18
-------------------------------------------
D601 17
<PAGE>
OPTION I -- VARIABLE PAYMENT LIFE ANNUITY WITH 10-YEAR PERIOD CERTAIN
----------------------------
AGE OF
PAYEE MALE FEMALE
----------------------------
40 $4.15 $4.02
45 4.29 4.12
50 4.40 4.27
55 4.73 4.46
60 5.06 4.71
65 5.51 5.05
70 6.08 5.52
75 6.79 6.17
80 7.65 6.99
85 8.57 7.98
----------------------------
OPTION J -- JOINT SURVIVOR VARIABLE PAYMENT LIFE ANNUITY WITH
10-YEAR PERIOD CERTAIN
------------------------------------------------------------------------
FEMALE MALE
----------------------------------------------------------------------
AGE 40 45 50 55 60 65 70 75
------------------------------------------------------------------------
40 $3.92 $3.94 $3.96 $3.98 $3.99 $4.00 $4.00 $4.01
45 3.96 4.00 4.03 4.06 4.08 4.09 4.10 4.11
50 4.00 4.05 4.10 4.15 4.18 4.21 4.23 4.24
55 4.03 4.10 4.18 4.24 4.30 4.35 4.39 4.41
60 4.06 4.15 4.25 4.34 4.43 4.52 4.58 4.63
65 4.09 4.19 4.31 4.44 4.57 4.70 4.81 4.90
70 4.11 4.22 4.36 4.53 4.70 4.89 5.07 5.22
75 4.12 4.75 4.41 4.60 4.82 5.07 5.34 5.59
------------------------------------------------------------------------
OPTION K -- VARIABLE PAYMENT ANNUITY FOR A SPECIFIED PERIOD
-------------------------------------------
NUMBER OF ANNUAL MONTHLY
YEARS INSTALLMENT INSTALLMENT
-------------------------------------------
5 $217.98 $18.53
6 185.53 15.77
7 162.39 13.81
8 145.08 12.34
9 131.65 11.19
10 120.94 10.28
11 112.20 9.54
12 104.94 8.92
13 98.83 8.40
14 93.61 7.96
15 89.10 7.58
16 85.18 7.24
17 81.74 6.95
18 78.70 6.69
19 75.99 6.46
20 73.57 6.25
25 64.53 5.49
30 58.75 5.00
-------------------------------------------
D601 18
<PAGE>
OPTION M -- VARIABLE PAYMENT LIFE ANNUITY WITH UNIT REFUND
----------------------------
AGE OF
PAYEE MALE FEMALE
----------------------------
40 $4.12 $4.01
45 4.25 4.11
50 4.42 4.24
55 4.64 4.41
60 4.92 4.64
65 5.28 4.94
70 5.74 5.33
75 6.32 5.86
80 7.07 6.55
85 8.01 7.43
----------------------------
OPTION N -- VARIABLE PAYMENT LIFE ANNUITY
----------------------------
AGE OF
PAYEE MALE FEMALE
----------------------------
40 $4.15 $4.02
45 4.30 4.13
50 4.50 4.27
55 4.76 4.47
60 5.11 4.73
65 5.60 5.09
70 6.29 5.60
75 7.20 6.34
80 8.49 7.41
85 10.30 8.98
----------------------------
D601 19
<PAGE>
FLEXIBLE PREMIUM VARIABLE ACCUMULATION DEFERRED ANNUITY.
ALL VALUES AND BENEFITS BASED ON THE INVESTMENT EXPERIENCE OF THE SUB-ACCOUNTS
OF THE SEPARATE ACCOUNT ARE VARIABLE AND NOT GUARANTEED AS TO DOLLAR AMOUNT.
SEE PART 7 FOR A DESCRIPTION OF HOW THE CONTRACT VALUES ARE DETERMINED, PART 9
FOR A DESCRIPTION OF HOW THE DEATH BENEFITS ARE DETERMINED.
D601 Non-Participating
<PAGE>
POLICY AMENDMENT
MARKET VALUE ADJUSTED GUARANTEED INTEREST ACCOUNT
(MVA)
THIS AMENDMENT IS ISSUED AS PART OF THE CONTRACT TO WHICH IT IS ATTACHED.
CONTRACT NUMBER:
ANNUITANT:
The policy is amended to include a Market Value Adjusted Guaranteed Interest
Account (MVA) in addition to the already established Guaranteed Interest Account
with 1-Year Guarantee (GIA). The provisions of the Contract applying to the
Guaranteed Interest Account apply to both the GIA and the MVA, except as noted
below. The Guaranteed Interest Accounts are described on the Schedule Pages of
the Contract.
DEFINITIONS
CONTRACT VALUE: The definition of Contract Value in Part 1 of the
Contract is changed to the following:
The Contract Value for withdrawals and transfers is
equal to the sum of the values under the Contract of
all Accumulation Units held in the Sub-accounts of
the VA Account and the values held in the GIA and
MVA, after any applicable market value adjustment.
The Contract Value used to determine the Death
Benefit in Part 9 of the Contract is the same as the
Contract Value for withdrawals except that there is
no market value adjustment.
GUARANTEE PERIOD: The period for which interest accrues at the
Guaranteed Rate on amounts allocated to the MVA.
WINDOW PERIOD: The period during which any withdrawals and transfers
from the MVA will not be subject to a market value
adjustment. The Window Period is stated in the
description of the MVA on the Schedule Pages of the
Contract.
MVA
The MVA provides various choices of interest rate Guarantee Periods. The
interest rate Guarantee Periods available are described on the Schedule Pages.
Premiums payments may be allocated to the MVA as described in Part 4 of the
Contract for the Guaranteed Interest Account.
Transfers to and from the MVA may be made as described in Part 5 of the Contract
for the Guaranteed Interest Account except that (1) the limitation to one
transfer per year from the Guaranteed Interest Account and the limitation on
amounts transferred from the Guaranteed Interest Account do not apply to the
MVA, and (2) the Systematic Transfer Program is not available for the MVA. You
may make up to six transfers per year from the MVA.
DR20
<PAGE>
Allocations that remain in the MVA until the end of the applicable Guarantee
Period will be equal to that amount accumulated at its Guaranteed Rate
compounded annually less any applicable Annual Administrative Fees charged to
this account including applicable interest thereon. Amounts withdrawn or
transferred prior to the end of the Guarantee Period will be subject to a market
value adjustment, as described below. However, the market value adjustment will
not apply to any amounts withdrawn or transferred during the 30-day Window
Period for the MVA.
MARKET VALUE ADJUSTMENT
Transfers and withdrawals from the MVA prior to the end of the Guarantee Period
and outside of its 30-day Window Period are subject to a market value
adjustment.
The market value adjustment is determined by the following formula:
market value adjustment = A x (((1+i)/(1+j+0.0025))N/12 - 1),
where, A = the amount withdrawn or transferred,
i = the guaranteed interest rate credited to the amount being
withdrawn or transferred,
j = the current rate for new deposits with a Guarantee Period equal
to the number of years remaining in the current Guarantee Period,
rounded to the next higher number of complete
years, and
N = the number of months, rounded up to the next whole number,
from the date of withdrawal or transfer to the end of the
current Guarantee Period.
If we do not offer a Guarantee Period equal to the number of years remaining in
the current Guarantee Period, j will be determined by interpolation of the
Guaranteed Rate for available Guarantee Periods of the Guaranteed Interest
Account.
Amounts withdrawn from the MVA will be subject to any applicable Contingent
Deferred Sales Charge as described in Part 5 of the Contract after application
of the market value adjustment.
PHL Variable Insurance Company
/s/ Dona D. Young
Secretary
DR20
