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Previous: AXIOM INC, S-1/A, 1997-07-03 |
Next: LASALLE PARTNERS INC, S-1/A, 1997-07-03 |
<PAGE>
As filed with the Securities and Exchange Commission on
Registration No. 333-25289
SECURITIES AND
EXCHANGE COMMISSION
WASHINGTON,D.C. 20549
FORMN-4
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933 ( )
PRE-EFFECTIVE AMENDMENT NO. 1
(X)
-----
POST-EFFECTIVE AMENDMENT NO.
( )
-----
and/or
REGISTRATION STATEMENT UNDER
THE INVESTMENT
COMPANY ACT
OF 1940 ( )
Amendment No.
1 (X)
(Check appropriate box or
boxes)
VARIABLE ANNUITY-1 SERIES
ACCOUNT
(Exact name of
Registrant)
FIRST GREAT-WEST LIFE & ANNUITY
INSURANCE COMPANY
(Name
of Depositor)
125 Wolf
Road, Suite 110
<PAGE>
Albany,
New York 12205
(Address of Depositor's Principal Executive
Offices) (Zip Code)
Depositor's Telephone Number,
including Area Code:
(800) 537-2033
William
T. McCallum
President and Chief
Executive Officer
First Great-West Life & Annuity
Insurance Company
8515 East Orchard
Road
Englewood, Colorado 80111
(Name and Address of
Agent for Service)
Copy to:
James
F. Jorden, Esq.
Jorden Burt
Berenson & Johnson LLP
1025 Thomas Jefferson Street,
N.W., Suite 400 East
Washington, D.C. 20007-0805
<PAGE>
<PAGE>
Approximate Date of Proposed Public Offering: Upon the
effective
date of this Registration Statement.
It is proposed that this filing will become effective on July
, 1997.
The Registrant has chosen to register an indefinite number
of securities in
accordance with Rule 24f-2.
The Registrant hereby amends this registration statement on
such date or dates
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>
VARIABLE ANNUITY-1
SERIES ACCOUNT
Cross Reference Sheet
Showing Location in
Prospectus
and Statement of
Additional Information
As Required by Form
N-4
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FORM N-4 ITEM
PROSPECTUS CAPTION
1. Cover Page..........................
Cover Page
2. Definitions.........................
Definitions
3. Synopsis............................
Fee Table; Key Features of
the Annuity
4. Condensed Financial Information.....
Performance Data
5. General Description of
Registrant, Depositor and
Portfolio Companies...............
First Great-West Life & Annuity
Insurance Company and the Series
Account; Eligible Funds;
Voting Rights
6. Deductions and Expenses............
Charges and Deductions; Appendix
A; Distribution of the Contracts
7. General Description of
Variable Annuity Contracts........
The Contracts; Eligible Funds;
<PAGE>
Statement of Additional
Information
8. Annuity Period......................
Payment Options
9. Death Benefit.......................
Death Benefit
<PAGE>
10. Purchases and Contract Value........
Application and Contributions;
Annuity Account Value
11. Redemptions.........................
Cash Withdrawals; Payment
Options; Key Features of the
Annuity
12. Taxes...............................
Federal Tax Consequences
13. Legal Proceedings...................
Legal Proceedings
14. Table of Contents of
Statement of Additional
Information.......................
Statement of Additional
Information
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF ADDITIONAL INFORMATION
FORM N-4
ITEM
CAPTION
15. Cover Page..........................
Cover Page
16. Table of Contents...................
Table of Contents
17. General Information and
History...........................
General Information; First
Great-West Life & Annuity and
the Variable Annuity-1 Series
Account
18. Services............................
Services
19. Purchase of Securities
Being Offered.....................
Not Applicable
20. Underwriters........................
Services - Principal Underwriter
21. Calculation of
Performance Data..................
Calculation of Performance
Data
22. Annuity Payments....................
Calculation of Annuity Payments
23. Financial Statements................
Financial Statements
</TABLE>
<PAGE>
<PAGE>
PART A
INFORMATION REQUIRED IN
A PROSPECTUS
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION
OR AMENDMENT. A
REGISTRATION STATEMENT RLEATING TO THESE SECURITIES HAS
BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY
NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE
REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE
AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE
ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICIATION
OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE
SECURITIES LAWS
OF ANY SUCH STATE.
THE
SCHWAB VARIABLE
ANNUITY(TM)
A FLEXIBLE PREMIUM
DEFERRED FIXED AND
VARIABLE ANNUITY
Distributed by
CHARLES SCHWAB &
CO., INC.
---------------------------------------------
Issued
by
FIRST
<PAGE>
GREAT-WEST LIFE
& ANNUITY
INSURANCE
COMPANY
This prospectus describes interests under a
flexible premium
deferred annuity
contract, The Schwab Variable Annuity (the
"Contract"). The
Contract is issued
on a group basis by First Great-West Life &
Annuity Insurance
Company (the
"Company"). Participation in the Contract will be
accounted for by
the issuance
of a certificate showing your interest under the
Contract. Your
certificate is
also hereafter referred to as the "Contract."
Your investment in the Contract may be allocated
among twenty-four
Investment
Divisions of the Variable Annuity-1 Series
Account ("Series
Account") and the
<PAGE>
available Guarantee Periods under the Guarantee
Period Fund. The
Investment
Divisions invest in various underlying funds
(open-end investment
companies)
offered by fund families such as Federated,
INVESCO, Janus,
Lexington, Berger,
Alger, Schwab Funds, Stein Roe, Strong, Montgomery,
American Century,
<PAGE>
SAFECO and
Van Eck. You also have the option of allocating
some or all of your
investment
in the Contract to the Guarantee Period Fund
which allows you to
select one or
more Guarantee Periods, each of which offers you a
specified interest
rate for a
specified period. There may be a market value
adjustment on
the amounts
withdrawn from the Guarantee Period Fund.
The minimum initial investment is $5,000
($2,000 if an IRA) or
$1,000 if made
under an Automatic Contribution Plan ("ACP").
The minimum
subsequent
Contribution is $500 (or $100 per month if made under
an ACP).
There are no sales charges, redemption,
surrender or withdrawal
charges. The
Contract provides a Free Look Period of 10
days from your
receipt of the
Contract, during which time you may cancel your
investment in the
Contract.
During the Free Look Period, all Contributions
allocated to an
Investment
Division will be allocated first to the
Schwab Money Market
Investment Division
and will remain there until the next Transaction
<PAGE>
Date following the
end of the
Free Look Period. Contributions to the Guarantee
Period Fund will
be allocated
immediately into the specified Guarantee Period(s).
Your Variable Account Value will increase or
decrease based on the
investment
performance of the options you select. You bear the
entire investment
risk under
the Contract prior to the annuity
commencement date for all
amounts in your
<PAGE>
Variable Sub-Accounts. While there is a guaranteed
death benefit,
there is no
guaranteed or minimum Variable Account Value on
amounts allocated to
Investment
Divisions. Therefore, the Annuity Account Value
you receive could
be less than
the total amount of your Contributions.
<PAGE>
<PAGE>
Amounts allocated to the Guarantee Period Fund may
be subject to a
Market Value
Adjustment which could result in receipt of
less than your
Contributions if you
surrender, Transfer, make a partial withdrawal or
apply amounts to
purchase an
annuity before a Guarantee Period Maturity Date.
Whether such a
result actually
occurs depends on the timing of the transaction,
the amount of the
Market Value
Adjustment and the interest rate credited. The
interest rate in
subsequent
Guarantee Periods may be more or less than the
rate of a previous
Guarantee
Period.
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE
SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE
SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION
<PAGE>
PASSED UPON THE
ACCURACY OR ADEQUACY OF THE PROSPECTUS. ANY
REPRESENTATION TO THE
CONTRARY IS A
CRIMINAL OFFENSE. NO PERSON IS AUTHORIZED BY THE
COMPANY TO GIVE
INFORMATION OR
TO MAKE ANY REPRESENTATION, OTHER THAN THOSE
CONTAINED IN THIS
PROSPECTUS, IN
CONNECTION WITH THE OFFERS CONTAINED IN THIS
PROSPECTUS. THIS
PROSPECTUS DOES
NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION
IN WHICH SUCH
OFFERING MAY NOT
LAWFULLY BE MADE. PLEASE READ THIS PROSPECTUS AND
KEEP IT FOR FUTURE
REFERENCE.
Prospectus
Dated
______________, 1997
<PAGE>
The Contracts are not deposits of, or guaranteed or
endorsed by any
bank, nor
are the Contracts federally insured by the
Federal Deposit
Insurance
Corporation, the Federal Reserve Board or any
other government
agency. The
<PAGE>
Contracts involve certain investment
risks, including
possible loss of
principal.
To Place Orders and for Account Information:
Contact the Schwab
Annuity Service
Center at 800-838-0649 or P.O. Box 7806, San
Francisco, California
94120-9327.
About This Prospectus: This Prospectus concisely
presents important
information
you should have before investing in the Contract.
Please read it
carefully and
retain it for future reference. You can find
more detailed
information
pertaining to the Contract in the Statement
of Additional
Information dated
_____________, 1997 (as may be amended from time
to time), and
filed with the
Securities and Exchange Commission. The
Statement of Additional
Information is
incorporated by reference into this
Prospectus, and may be
obtained without
charge by contacting the Schwab Annuity
Service Center at
800-838-0649 or P.O.
Box 7806 San Francisco, California 94120-9327.
<PAGE>
<PAGE>
<PAGE>
TABLE OF
CONTENTS
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Page
DEFINITIONS......................................................
..........
....................
K E Y F E A T U R E
S O
F T H E
ANNUITY..........................................................
..........
FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
A N D
T H E
S E R I E S
<PAGE>
ACCOUNT..........................................................
....
T H E E L
I G
I B L E
FUNDS............................................................
..........
.......
T H E G U A R A N T
E E
P E R I O D
FUND.............................................................
.........
T H E M A R K E
T
V A L U E
ADJUSTMENT.......................................................
..........
...
<PAGE>
A P P L I C A
T I
O N A N D
CONTRIBUTIONS....................................................
..........
....
A N N U I T Y A C C O
U N T
V A L U E
<PAGE>
.................................................................
........
TRANSFERS........................................................
..........
....................
C
A
S H
WITHDRAWALS......................................................
..........
...............
T E L E
P H
O N E
TRANSACTIONS.....................................................
..........
..........
D E
A
T H
BENEFIT..........................................................
..........
..............
C H A R
G E
S A N D
DEDUCTIONS.......................................................
<PAGE>
..........
........
P A Y
M E
N T
OPTIONS..........................................................
..........
............
F E D E
R A
L T A X
MATTERS..........................................................
..........
........
A S S I G N M
E N
T S O R
PLEDGES..........................................................
..........
.....
P E R F O
R M A
N C E
DATA.............................................................
..........
........
D I S T R I B U T I O
N O
<PAGE>
F T H E
CONTRACTS........................................................
..........
S E L E C T E D
F I N
A N C I A L
DATA.............................................................
..........
<PAGE>
.
V O T
I
N G
RIGHTS...........................................................
..........
.............
R I G H T S R E S E R V
E D
B Y T H E
<PAGE>
COMPANY..........................................................
.......
L E
G
A L
PROCEEDINGS......................................................
..........
..............
L E
G
A L
MATTERS..........................................................
..........
..............
EXPERTS..........................................................
..........
....................
A V A I
L A
B L E
INFORMATION......................................................
..........
..........
<PAGE>
EXHIBITS.........................................................
..........
....................
F I N A
N C
I A L
STATEMENTS.......................................................
..........
..........F-1
</TABLE>
-----------------------------------------------------------------
----------
-----
THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFERING IN ANY
JURISDICTION IN WHICH
<PAGE>
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO DEALER,
SALESPERSON, OR
OTHER PERSON
IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS IN
CONNECTION
WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS,
AND, IF GIVEN
OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED
<PAGE>
ON.
-----------------------------------------------------------------
----------
-----
<PAGE>
The Contract is not
available in all states.
<PAGE>
<PAGE>
-----------------------------------------------
DEFINITIONS
-----------------------------------------------
Accumulation Period - The period between the
Effective Date and
the Payment
Commencement Date.
Annuitant - The person named in the application
upon whose life the
payment of
an annuity is based and who will receive annuity
payments. If a
Contingent
Annuitant is named, then the Annuitant will be
considered the Primary
Annuitant.
While the Annuitant is living and at least 30
days prior to
the annuity
commencement date, the Owner may, by Request, change
the Annuitant.
<PAGE>
Annuity Account - An account established by the
Company in the name
of the Owner
that reflects all account activity under this
Contract.
Annuity Account Value - The sum of the
Variable and Fixed
Sub-Accounts credited
to the Owner under the Annuity Account; less
Transfers, partial
withdrawals,
amounts applied to an annuity option, periodic
withdrawals,
charges deducted
under the Contract and, less Premium Tax, if any.
Annuity Payment Period - The period beginning
on the annuity
commencement date
and continuing until all annuity payments have been
made under the
<PAGE>
Contract.
Annuity Unit - An accounting measure used to
determine the dollar
value of any
variable annuity payment after the first annuity
payment is made.
Automatic Contribution Plan ("ACP") - A plan
which allows for
<PAGE>
automatic periodic
Contributions. The Contribution amount will be
withdrawn from a
designated
pre-authorized account and automatically credited
to the Annuity
Account.
Beneficiary - The person(s) designated by the
Owner, in the
application, or as
subsequently changed by the Owner by Request, to
receive any death
benefit which
may become payable under the terms of the Contract.
If the surviving
spouse of
an Owner is the surviving Joint Owner, the
surviving spouse will
become the
Beneficiary upon such Owner's death and may elect
to take the death
benefit, if
any, or elect to continue the Contract in force.
Company - First Great-West Life & Annuity Insurance
Company, the
issuer of this
annuity, located at 125 Wolf Road, Suite 110, Albany,
New York 12205.
Contingent Annuitant - The person named in the
application, unless
later changed
by the Owner by Request while the Annuitant is
alive and before
annuity payments
have commenced, who becomes the Annuitant
when the Primary
Annuitant dies. No
<PAGE>
new Contingent Annuitant may be designated
after the death of
the Primary
Annuitant.
Contractual Guarantee of a Minimum Rate of
Interest - The minimum
interest rate
applicable to each Fixed Sub-Account equal to an
annual effective
rate in effect
at the time the Contribution is made and as
reflected in written
confirmation of
<PAGE>
the Contribution. This is the minimum rate
allowed by law and is
subject to
change in accordance with changes in
applicable law. Under
current law, the
minimum rate is 3%.
Contributions - Purchase amounts received under
the Contract and
allocated to
the Fixed or Variable Sub-Account(s) prior to
any Premium Tax
or other
deductions.
Effective Date - The date on which the first
Contribution is
credited to the
Annuity Account.
Eligible Fund - A registered management
investment company, or
portfolio
thereof, in which the assets of the Series Account
may be invested.
<PAGE>
<PAGE>
Fixed Sub-Accounts - The subdivision(s) of
the Owner's
Annuity
Account
reflecting the value of Contributions made
to a fixed
interest
investment option
available under the Contract and any Fixed
Sub-Account Riders.
Guarantee Period - One of the time intervals
available in
the
Guarantee Period
Fund during which the Company will credit a stated
rate of interest.
The
Company
may stop offering any time interval at any
time for new
Contributions.
Amounts
allocated to one or more Guaranteed Periods
may be subject to
a
Market Value
Adjustment.
Guarantee Period Fund - A Fixed Sub-Account
in which amounts
allocated
will be
<PAGE>
credited a stated rate of interest for
the applicable
Guarantee
Period(s).
Guarantee Period Maturity Date - The last day of
any Guarantee
Period.
Individual Retirement Annuity (IRA) - An annuity
contract used
in a
retirement
savings program that is intended to satisfy the
requirements
of
Section 408 of
the Internal Revenue Code of 1986, as amended.
<PAGE>
Investment Division - A division of the Series
Account containing
the
shares of
an Eligible Fund. There is an Investment
Division for each
Eligible
Fund.
<PAGE>
Market Value Adjustment - An adjustment which
may be made to
amounts
paid out
before the Guarantee Period Maturity
Date due to
surrenders,
partial
withdrawals, Transfers, and amounts applied to
the periodic
withdrawal
option or
to purchase an annuity, as applicable. The Market
Value Adjustment
may
increase
or decrease the amount payable on one
of the
above-described
distributions. A
negative adjustment may result in an effective
interest rate
lower
than the
applicable Contractual Guarantee of a Minimum Rate
of Interest and
the
value of
the Contribution(s) allocated to the Guarantee
Period being
less
than the
Contribution(s) made. The Market Value Adjustment
is detailed on
page
---.
Net Investment Factor - The Net Investment
Factor for each
Variable
<PAGE>
<PAGE>
Sub-Account
for any valuation date is determined by
dividing (a) by (b),
and
subtracting (c)
from the result where: (a) is the net result
of (i) the net
asset
value per
share of underlying fund shares determined as
of the end of
the
current
valuation period, plus (ii) the per share amount
of any dividend
(or
capital
gain, if applicable) if the "ex-dividend" date
occurs during
the
current
valuation period, minus or plus (iii) a per unit
charge or credit
for
any taxes
incurred by or provided for in the Variable
Sub-Account, which
is
determined by
First GWL&A to have resulted from the investment
operations of
the
Variable
<PAGE>
Sub-Account; and (b) is the net result of (i) the
net asset value
per
share of
the underlying fund determined as of the
end of the
immediately
preceding
valuation period, minus or plus (ii) the per unit
charge or credit
for
any taxes
incurred by or provided for in the Variable Sub-
Account; and (c)
the
mortality
risk charge of 0.85%.
Non-Qualified Annuity Contract - An annuity
contract which is
<PAGE>
not
intended to be
part of a qualified retirement plan and is
not intended
to
satisfy the
requirements of Section 408 of the Internal Revenue
Code of 1986,
as
<PAGE>
amended.
Owner (Joint Owner) or You - The person(s),
while the Annuitant
is
living, named
in the Contract Data Page who is entitled to
exercise all rights
and
privileges
under the Contract. Joint Owners must be husband
and wife as of
the
date the
Contract is issued. The Annuitant will be
the Owner unless
otherwise
indicated
in the application. If a Contract is purchased
as an IRA, the
Owner
and the
Annuitant must be the same individual and no
Joint Owner may
be
named. Any
reference to Owner in the singular tense
shall include the
plural,
and vice
versa, as applicable.
Payment Commencement Date - The date on which
annuity payments
or
periodic
withdrawals commence under a payment
option. The Payment
Commencement
Date must
<PAGE>
<PAGE>
be at least one year after the Effective Date of
the Contract.
If a
Payment
Commencement Date is not shown on the
Contract Data Page,
annuity
payments will
commence on the first day of the month of the
Annuitant's
90th
birthday. The
Payment Commencement Date may be changed by the
Owner within 60
days
prior to
commencement of annuity payments or it may
be changed by
the
Beneficiary upon
the death of the Owner. If this is an IRA,
payments which satisfy
the
minimum
distribution requirements of the Internal Revenue
Code of 1986,
as
amended, must
begin no later than the Owner's attainment of age 70
1/2.
<PAGE>
<PAGE>
Premium Tax - The amount of tax, if any,
charged by a
state
or other
governmental authority.
Request - Any instruction in a form satisfactory
to the Company
and
received at
the Schwab Annuity Service Center (or other
annuity service
center
subsequently
named) from the Owner or the Owner's designee
(as specified in a
form
acceptable to the Company) or the Beneficiary
(as applicable)
as
required by
any provision of the Contract or as required by
the Company.
All
Requests are
subject to any action taken or payment made by the
Company before it
was
processed.
Schwab Annuity Service Center - P.O.
Box 7806, San
Francisco,
<PAGE>
California
94120-9327, telephone 800-838-0649.
Series Account - The segregated account
established by the
Company
under New
York law and registered as a unit investment
trust under the
Investment
Company
Act of 1940, as amended.
Simplified Employee Pension - An individual
retirement annuity
(IRA)
which may
accept contributions from one or more
employers under a
<PAGE>
retirement
savings
program intended to satisfy the requirements of
Section 408(k) of
the
Internal
Revenue Code of 1986, as amended.
<PAGE>
Surrender Value - The Annuity Account Value
with a Market
Value
Adjustment, if
applicable, on the effective date of the surrender,
less Premium Tax,
if
any.
Transaction Date - The date on which any
Contribution or Request
from
the Owner
will be processed by the Company at the
Schwab Annuity
Service
Center.
Contributions and Requests received after 4:00
p.m. EST/EDT will
be
deemed to
have been received on the next business day.
Requests will be
processed
and the
Variable Account Value will be determined on
each day that the
New
York Stock
Exchange is open for trading.
Transfer - The moving of money from among
and between the
Investment
Division(s)
and the Guaranteed Period Fund.
<PAGE>
Variable Account Value - The sum of the
values of the
Variable
Sub-Accounts
credited to the Owner under the Annuity Account.
Variable Sub-Accounts - The sub-division(s)
of the Owner's
Annuity
Account
containing the value credited to the Owner
under the Annuity
Account
from an
Investment Division.
We, our, us, or First GWL&A: First Great-West
Life & Annuity
Insurance
Company.
<PAGE>
<PAGE>
KEY FEATURES OF
THE
ANNUITY
The Contract currently allows you to invest
in your choice
of
twenty-four
different Investment Divisions offered
by thirteen
different
mutual fund
investment advisers. You can also invest in
the Guarantee
Period
Fund. Your
Annuity Account Value allocated to an Investment
Division will
vary
with the
investment performance of the Investment
Division you select.
You
bear the
entire investment risk for all amounts
invested in the
Investment
Division(s).
Your Annuity Account Value could be less
than the total
amount
<PAGE>
of your
Contributions.
Who should invest. The Contract is designed for
investors who
are
seeking
long-term tax deferred asset accumulation
with a wide range
of
investment
options. The Contract can be used for
retirement or other
long-term
investment
purposes. The deferral of income taxes is
particularly attractive
to
investors
<PAGE>
in high federal and state tax brackets who have
already fully
taken
advantage of
their ability to make IRA contributions
or "pre-tax"
contributions
to their
employer sponsored retirement or savings plans.
<PAGE>
A Wide Range of Variable Investment Choices.
The Contract
gives
you an
opportunity to select among twenty-four
different
Investment
Divisions. Each
Investment Division invests in shares of an
Eligible Fund.
The
Eligible Funds
cover a wide range of investment objectives as
follows:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Investment Objective
Eligible Funds
Aggressive Growth
SteinRoe Capital
Appreciation Fund
Janus Aspen
Aggressive Growth Portfolio
Alger American
Small Capitalization
Portfolio
American
Century VP Capital
Appreciation
Berger IPT-Small
Company Growth Fund
<PAGE>
Strong Discovery
Fund II
International Aggressive Growth
Montgomery Variable Series:
International
Small Cap
Fund
Lexington
Emerging Markets Fund
Growth
Montgomery
Variable Series: Growth Fund
Schwab Asset
Director - High Growth
Portfolio
Janus Aspen
Growth Portfolio
Alger American
Growth Portfolio
International Growth
Janus Aspen
Worldwide Growth Portfolio
<PAGE>
American Century
VP International
Index
Schwab S&P 500
Portfolio
Growth & Income
SAFECO RST
Equity Portfolio
Federated
American Leaders Fund II
Equity Income
INVESCO
VIF-Industrial Income Portfolio
Balanced/Asset Allocation
INVESCO
VIF-Total Return Portfolio
<PAGE>
Specialized
Federated
Utility Fund II
Van Eck
Worldwide Hard Assets Fund
High Yield Bond
INVESCO VIF-High
Yield Portfolio
<PAGE>
Government Bond
Federated Fund
for U.S. Government
Securities II
Money Market
Schwab Money
Market Portfolio
</TABLE>
<PAGE>
<PAGE>
The distinct investment objectives and policies
for each Eligible
Fund
are more
fully described in their individual fund
prospectuses which
are
available from
the Schwab Annuity Service Center, P.O.
Box 7806, San
Francisco,
California
94120-9327, or via telephone at 1-800-838-0649.
The Guarantee Period Fund. The Contract
also gives you
an
opportunity to
allocate your Contributions and to transfer
your Annuity
Account
Value to the
Guarantee Period Fund. This Fixed Sub-Account
option is comprised
of
Guarantee
Periods, each of which has its own stated rate of
interest and its
own
maturity
date. The stated rate of interest for the
<PAGE>
Guarantee Period
will
depend on the
date the Guarantee Period is established and
the duration of
the
Guarantee
Period you select from among those available. The
rates declared
are
subject to
a minimum (Contractual Guarantee of a Minimum Rate of
Interest), but
the
Company
may declare higher rates (the stated rate
of interest).
The
Contractual
<PAGE>
Guarantee of a Minimum Rate of Interest will be
disclosed in
the
written
confirmation. The stated rate of interest will
not be less than
the
Contractual
Guarantee of a Minimum Rate of Interest
and will also be
<PAGE>
disclosed
in the
written confirmation. Amounts withdrawn or
transferred from
a
Guarantee Period
prior to the Guarantee Period Maturity Date
may be subject
to a
Market Value
Adjustment. (See "Market Value Adjustment," page __.)
How to Invest. You must complete a Contract
application form in
order
to invest
in the Contract and you must pay by check or
instruct us to
transfer
funds from
your Schwab account. The minimum initial
investment is $5,000
(or
$2,000 if in
an IRA). Subsequent investments must be at
least $500. The
minimum
initial
investment may be reduced to $1,000 should the
Owner agree to
make
additional
$100 per month minimum recurring deposits through an
ACP.
Free Look Period. The Contract provides for a
Free Look Period
which
allows you
<PAGE>
to cancel your investment generally within
10 days of your
receipt
of the
Contract. You can cancel the Contract during the
Free Look Period
by
delivering
or mailing the Contract to the Schwab Annuity
Service Center.
The
cancellation
is not effective unless we receive a notice
which is postmarked
before
the end
of the Free Look Period. If the Contract is
returned, the Contract
will
be void
from the start and the greater of: (a)
Contributions received
less
surrenders,
withdrawals and distributions, or (b) the Annuity
Account Value
less
surrenders,
withdrawals and distributions, will be refunded.
These procedures
may
vary where
required by state law. (See "Application and
<PAGE>
Contributions," page
___.)
Allocation of the Initial Investment.
Any initial
Contribution
allocated to an
Investment Division (other than certain
1035 exchanges -
see
"Application and
Contributions," page __) will be allocated to
the Schwab Money
Market
Portfolio
until the next Transaction Date following the
end of the Free
Look
Period. At
that time, the Variable Account Value will be
allocated to
<PAGE>
the
Investment
Divisions in accordance with your instructions.
(See "Annuity
Account
Value,"
page __.) Your initial investment inthe
Guarantee Period Fund
will be
<PAGE>
immediately allocated to the Guarantee
Period(s) specified in
the
application.
Charges and Deductions Under the Contract. The
Contract is a "no
load"
variable
annuity and, as such, imposes no sales
charges, redemption
or
withdrawal
charges.
There is a Mortality and Expense Risk Charge
at an effective
annual
rate of
0.85% of the value of the net assets in the
Variable Account.
A
Contract
Maintenance Charge of $25 will be deducted
annually from your
Annuity
Account
Value. There will be a transfer fee of $10 for
each Transfer in
excess
of twelve
Transfers per calendar year. (See "Charges and
Deductions," page __.)
Depending on your state of residence, we may
deduct a charge
for
Premium Tax
from purchase payments or amounts withdrawn
or at the
<PAGE>
Payment
<PAGE>
Commencement Date.
(See "Charges and Deductions," page __.)
The Market Value Adjustment may increase or
decrease the value
of a
Guarantee
Period if the Guarantee Period is broken prior
to the Guarantee
Period
Maturity
Date. A negative adjustment may result in an
effective interest
rate
lower than
the stated rate of interest for the Guarantee
Period and
the
Contractual
Guarantee of a Minimum Rate of Interest and
the value of the
Guarantee
Period
being less than Contribution(s). (See "Market
Value Adjustment,"
page
__.)
<PAGE>
<PAGE>
Switching Investments. You may switch
Contributions among
the
Investment
Divisions or Guarantee Period Fund as often as
you like with
no
immediate tax
consequences. You may make a Transfer Request
to the Schwab
Annuity
Service
Center. A transfer fee may apply. (See
"Charges and
Deductions,"
page __.)
Amounts Transferred out of a Guarantee
Period prior to the
Guarantee
Period
Maturity Date may be subject to a Market Value
Adjustment.
(See
"Market Value
Adjustment," page __.)
Full and Partial Withdrawals. You may withdraw
all or part of
your
Annuity
Account Value before the earlier of the annuity
commencement date
you
<PAGE>
selected
or the Annuitant's or Owner's death. Withdrawals
may be taxable
and
if made
prior to age 59 1/2 may be subject to a 10% penalty
tax. Withdrawals
of
amounts
allocated to a Guarantee Period prior to the
Guarantee Period
Maturity
Date may
be subject to Market Value Adjustment. (See
"Market Value
Adjustment,"
page __.)
The minimum partial withdrawal prior to
the Market Value
Adjustment
<PAGE>
is $500.
There is no limit on the number of withdrawals
made. The
Company
may delay
payment of withdrawals from your Variable
Sub-Accounts by up to 7
days
and may
<PAGE>
delay withdrawals from the Guarantee Period
Fund by up to 6
months.
(See "Cash
Withdrawals," page __.)
Annuity Options. Beginning on the first day
of the month
immediately
following
the annuity commencement date you select,
you may elect to
receive
annuity
payments on a fixed or variable basis. (The
default date is the
first
day of the
month that the Annuitant attains age 91.) A
wide range of
annuity
options are
available to provide flexibility in choosing
an annuity
payment
schedule that
meets your particular needs. These annuity
options include
alternatives
designed
to provide payments for life (for either a
single or joint
life),
with or
without a guaranteed minimum number of
payments. (See
"Payment
Options," page
__.)
<PAGE>
Death Benefit. The amount of the death
benefit, if payable
before
annuity
payments commence, will be the greater of
(a) the Annuity
Account
Value with a
Market Value Adjustment, if applicable, as of the
date a Request
for
payment is
received, less Premium Tax, if any; or (b)
the sum of
Contributions
paid, less
partial withdrawals and Periodic Withdrawals,
less charges
deducted
under the
Contract, if any, less Premium Tax, if any. (See
"Death Benefit,"
page
__.)
Customer Service. Schwab's professional
representatives are
available
toll-free
to assist you. If you have any questions about
your Contract,
please
telephone
<PAGE>
the Schwab Annuity Service Center (800-838-0649)
or write to the
Schwab
Annuity
Service Center at P.O. Box 7806, San
Francisco,
California
94120-9327. All
inquiries should include the Contract number and the
Owner's name.
As a
Contract
Owner you will receive periodic statements
confirming any
transactions
relating
to your Contract, as well as a quarterly statement
and an annual
report.
<PAGE>
<PAGE>
<PAGE>
VARIABLE ANNUITY FEE
TABLE
The purpose of this table and the examples
that follow is
to
assist you
in understanding the various costs and expenses
that you will
bear
directly or
indirectly when investing in the Contract.
The table and
examples
reflect
expenses related to the Investment Divisions
as well as of
the
Eligible Funds.
The table assumes that the entire Annuity
Account Value is
allocated
to one or
more Investment Divisions. The information set
forth should
be
considered
together with the narrative provided under the
heading "Charges
and
Deductions,"
<PAGE>
page __ of this Prospectus, and with the
Funds' prospectuses.
In
addition to the
expenses listed below, Premium Tax may be applicable.
<PAGE>
Contract Owner Transaction Expenses1
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Sales Load
None
Surrender Fee
None
Transfer Fee (First 12 Per Year)2
None
Annual Contract Maintenance Charge3
$25.00
<PAGE>
Investment Division Annual Expenses1
(as a percentage of average Variable
Account assets)
Mortality and Expense Risk Charge
0.85%
Administrative Expense Charge
<PAGE>
0.00%
Other Fees and Expenses of the
Variable Account
<PAGE>
0.00%
-----
Total Investment Division Annual
Expenses
0.85%
<PAGE>
</TABLE>
--------
1 The Contract Owner Transaction Expenses
apply to each
Contract,
regardless of
how the Annuity Account Value is allocated.
The Investment
Division
Annual
Expenses do not apply to the Guarantee Period Fund.
2 There is a $10 fee for each transfer in
excess of 12 in any
calendar
year.
3 The Contract Maintenance Charge is currently
waived for
Contracts
with an
Annuity Account Value of at least $50,000.
If your Annuity
Account
Value falls
below $50,000 due to a withdrawal, the
Contract Maintenance
Charge
will be
reinstated until such time as your Annuity Account
Value is equal to
or
greater
than $50,000. This charge may also be waived for
<PAGE>
Contracts issued
under
certain
sponsored arrangements.
<PAGE>
<PAGE>
Eligible Fund Annual
Expenses (1)
(as a percentage of Eligible Fund net
assets, after
expenses
reimbursements)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Total
Management
Other 12b-1
Eligible Fund
Fees
Expenses Fees
<PAGE>
Expenses
(after expenses
(after expenses (after
expenses (after expenses
reimbursement)
reimbursement)
reimbursement) reimbursement)
Portfolio
Alger American Growth Portfolio .75%
.04%
<PAGE>
0%
.79%
Alger American Small
Capitalization Portfolio
.85%
<PAGE>
.03% 0%
.88%
American Century VP Capital Appreciation
1.00%
0%
0% 1.00%
American Century VP International
1.50%
0%
0% 1.50%
<PAGE>
Berger IPT-Small Company Growth Fund
.0%
1.15% 0%
1.15%
Federated American Leaders Fund II
.53% .32%
0% .85%
Federated Fund for U.S. Government
Securities II .0%
.80%
0% .80%
Federated Utility Fund II
.24%
.61% 0%
.85%
INVESCO VIF-High Yield Portfolio
.60%
.27% 0%
<PAGE>
<PAGE>
.87%
INVESCO VIF-Industrial Income Portfolio
.75% .20%
0%
.95%
INVESCO VIF-Total Return Portfolio
.75%
.19% 0%
.94%
Janus Aspen Aggressive
Growth Portfolio
.72%
.04% 0%
.76%
Janus Aspen Growth Portfolio .65%
.04%
<PAGE>
0%
.69%
Janus Aspen Worldwide
Growth Portfolio
.66%
.14% 0%
.80%
<PAGE>
Lexington Emerging Markets Fund
.85%
.79%
0% 1.64%
Montgomery Variable Series: Growth Fund2
1.00%
<PAGE>
.25%
0% 1.25%
Montgomery Variable Series:
International Small Cap Fund2
1.25%
.25%
0% 1.50%
SAFECO RST Equity Portfolio .70%
.02%
0% .72%
Schwab Asset Director -
<PAGE>
High Growth Portfolio .60%
.15%
0%
.75%
Schwab Money Market Portfolio
.44%
.06% 0%
.50%
Schwab S&P 500 Portfolio3
.13%
.15% 0%
.28%
SteinRoe Capital Appreciation Fund
.50%
.26%
0% .76%
Strong Discovery Fund II
1.00%
.21% 0%
<PAGE>
1.21%
Van Eck Worldwide Hard Assets Fund
.90%
.18%
0% 1.08%
</TABLE>
---------------------------------
<PAGE>
(1) The figures given above (other than for
the Montgomery
Variable
Series:
Growth Fund, Montgomery Variable Series:
International Small Cap
Fund
and Schwab
<PAGE>
S&P 500 Portfolio - see notes 2 and 3,
below) reflect the
amounts
deducted after
expense offset arrangements, if any, from the
Eligible Funds
during
1996. From
time to time, an Eligible Fund's investment
adviser, in its
sole
discretion, may
waive all or part of its fees and/or
voluntarily assume
certain
expenses. For a
more complete description of the Eligible
Funds' fees and
expenses,
see the
Eligible Funds' prospectuses. As of the
date of this
Prospectus,
certain fees
are being waived or expenses are being assumed,
in each case on
a
voluntary
basis. Without such waivers or
reimbursements, the total
Eligible
Fund annual
expenses that would have been incurred for the
<PAGE>
last completed
fiscal
year would
be: 8.57% for Berger IPT-Small Company Growth
Fund; 1.07% for
Federated
American
Leaders Fund II; 1.81% for Federated Fund
for U.S.
Government
Securities II;
1.32% for INVESCO VIF-High Yield
Portfolio; 1.19% for
INVESCO
VIF-Industrial
Income Portfolio; 1.30% for INVESCO VIF-Total
Return Portfolio;
.83%
for Janus
Aspen Aggressive Growth Portfolio; .83% for
Janus Aspen
<PAGE>
Growth
Portfolio; .91%
for Janus Aspen Worldwide Growth Portfolio;
2.23% for Lexington
Emerging
Markets
Fund; and 0.95% for Schwab Money Market Portfolio;
2.68% forSchwab
S&P 500
<PAGE>
Portfolio and 3.92% for Schwab asset Directors-
High Growth
Portfolio.
See the
Eligible Funds' prospectuses for a discussion
of fee waiver
and
expense
reimbursements.
2 For the Montgomery Variable Series:
Growth Fund and
Montgomery
Variable
Series: International Small-Cap Fund, the
fund manager has
agreed
to reduce
management fees, if necessary, to keep total
annual operating
expenses
to 1.25%
and 1.50%, respectively. The fund
manager may also
voluntarily
further reduce
management fees and other expenses to increase
the return to
the
Funds'
investors and voluntarily elected to do so in
1996 so that the
actual
expenses
charged in 1996 for both of these funds were
0.00%. Without
such
waivers or
reimbursements, the total Eligible Fund expenses
that would have
<PAGE>
been
incurred
<PAGE>
for the last completed fiscal year would be:
6.98% for the
Montgomery
Variable
Series: Growth Fund and 6.30% for the
Montgomery Variable
Series:
International
Small-Cap Fund.
3 The figures given above reflect a voluntary
waiver of a
portion
of the
management fee for the Schwab S&P 500 Portfolio
effective May 1,
1997.
Prior to
that date the applicable management fee was 0.20%.
5
<PAGE>
<PAGE>
Examples(1)
If you retain, annuitize, or surrender the Contract
at the end of
the
applicable
time period, you would pay the following
fees and expenses
on a
$1,000
investment, assuming a 5% annual return on assets:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Investment Divisions
1 Year
3
Years
Alger American Growth Portfolio
$ 8.26
$27.11
Alger American Small
Capitalization Portfolio
$ 9.20
<PAGE>
$30.16
American Century VP Capital Appreciation
$10.45
$34.21
American Century VP International
$15.63
$50.93
Berger IPT-Small Company Growth Fund
$12.00
<PAGE>
$39.25
Federated American Leaders Fund II
$ 8.89
$29.14
Federated Fund for U.S. Government Securities II
$ 8.37
<PAGE>
$27.45
Federated Utility Fund II
$ 8.89
$29.14
INVESCO VIF-High Yield Portfolio
$ 9.09
$29.82
INVESCO VIF-Industrial Income Portfolio
$ 9.93
$32.52
INVESCO VIF-Total Return Portfolio
$ 9.82
$32.19
Janus Aspen Aggressive
Growth Portfolio
$ 7.95
<PAGE>
$26.09
Janus Aspen Growth Portfolio
$ 7.22
$23.71
Janus Aspen Worldwide
Growth Portfolio
$ 8.37
$27.45
Lexington Emerging Markets Fund
$17.08
$55.57
Montgomery Variable Series: Growth Fund
$13.04
$42.60
Montgomery Variable Series:
International Small-Cap Fund
$15.63
$50.93
SAFECO RST Equity Portfolio
$ 7.53
$24.73
<PAGE>
Schwab Asset Director -
High Growth Portfolio
$ 7.84
$25.75
Schwab Money Market Portfolio
$ 5.24
$17.23
Schwab S&P 500 Portfolio
$ 2.94
$
9.68
<PAGE>
SteinRoe Capital Appreciation Fund
$ 7.95
$26.09
Strong Discovery Fund II
$12.63
<PAGE>
$41.26
Van Eck Worldwide Hard Assets Fund
$11.28
$36.90
</TABLE>
THESE EXAMPLES SHOULD NOT BE CONSIDERED
REPRESENTATIONS OF PAST
OR
FUTURE
EXPENSES. ACTUAL EXPENSES PAID MAY BE GREATER OR
LESS THAN THOSE
SHOWN,
SUBJECT
TO THE GUARANTEES IN THE CONTRACT.
These examples assume that no premium taxes
have been assessed
(although
premium
taxes may be applicable - see "Premium Tax," page
__).
(1) The Eligible Fund Annual Expenses and these
examples are
based
<PAGE>
on data
provided by the Eligible Funds. The Company has no
reason to doubt
the
accuracy
or completeness of that data, but the Company
has not verified
the
Eligible
Funds' figures. In preparing the Eligible Fund
Expense table and
the
Examples
above, the Company has relied on the figures
provided by the
Eligible
Funds.
6
<PAGE>
<PAGE>
------------------------------------------------------
FIRST GREAT-WEST LIFE
& ANNUITY
INSURANCE
COMPANY
AND
THE SERIES
ACCOUNT
------------------------------------------------------
First Great-West Life & Annuity Insurance Company
("First GWL&A")
The Company is a stock life insurance
company organized
under
the laws
of the state of New York. First GWL&A was
incorporated on April 9,
1996
and is a
wholly owned subsidiary of Great-West Life
& Annuity
Insurance
Company
("Great-West"). First GWL&A commenced operations
upon receipt of
its
<PAGE>
certificate
of authority from the Superintendent of Insurance of
New York on May
28,
1997.
First GWL&A is principally engaged
in the sale of
life
insurance,
accident and health insurance and annuities. It
is admitted to
do
business in
the states of New York and Iowa.
Great-West is a wholly-owned subsidiary of
The Great-West
<PAGE>
Life
Assurance Company ("GWL"). GWL is a subsidiary
of Great-West
Lifeco
Inc., a
holding company. Great-West Lifeco Inc. is in
turn a subsidiary
of
Power
<PAGE>
Financial Corporation, a financial services
company. Power
Corporation
of
Canada, a holding and management company, has
voting control of
Power
Financial
Corporation. Mr. Paul Desmarais, through a
group of private
holding
companies,
which he controls, has voting control of Power
Corporation of Canada.
The Series Account
The Variable Annuity-1 Series
Account
("Series
Account") was
established by the Company on January 15,
1997 as a separate
account
under the
laws of the State of New York. The Series
Account is
registered
with the
Securities and Exchange Commission
("Commission") under the
Investment
Company
Act of 1940, as amended ("1940 Act"), as a
unit investment
trust.
<PAGE>
The Series
Account meets the definition of a "separate
account" under
the
federal
securities laws. However, such
registration does not
involve
supervision of the
management of the Series Account or the Company by
the Commission.
The Company does not guarantee the
investment performance
of
the Series
Account. The portion of the Annuity Account
Value attributable
to
the Series
Account and the amount of variable annuity
payments depend on
the
investment
performance of the Eligible Funds. Thus, the
Contract Owner
bears
the full
investment risk for all Contributions allocated
to the Series
Account.
The Series Account is administered and
<PAGE>
accounted for
as
part of the
general business of the Company; but the income,
capital gains,
or
capital
losses of each Investment Division are credited
to or charged
against
the assets
held in that Investment Division in accordance
with the terms of
the
Contract,
without regard to other income, capital gains or
capital losses
of
any other
Investment Division or arising out of any
other business
<PAGE>
the
Company may
conduct. Under New York law, the assets of the
Series Account are
not
chargeable
with liabilities arising out of any other
business the Company
may
<PAGE>
conduct.
Nevertheless, all obligations arising under
the Contracts
are
generally
corporate obligations of the Company.
The Series Account currently has
twenty-four
Investment
Divisions
available for allocation of Contributions. If,
in the future,
the
Company
determines that marketing needs and
investment conditions
warrant,
it may
establish additional Investment Divisions which
will be made
available
to Owners
to the extent and on a basis to be determined
by the Company,
(See
"Addition,
Deletion, or Substitution"). Each Investment
Division invests
in
shares of an
Eligible Fund, each having a specific investment
objective.
7
<PAGE>
<PAGE>
<PAGE>
------------------------------------------------------
THE
ELIGIBLE FUNDS
------------------------------------------------------
The Eligible Funds described below
are offered
exclusively
for use as
funding vehicles for insurance products and,
consequently, are
not
publicly
available mutual funds. Each Eligible Fund
has separate
investment
objectives
and policies. As a result, each Eligible Fund
operates as a
separate
investment
portfolio and the investment performance of one
Eligible Fund has
no
effect on
the investment performance of any other Eligible
Fund. See the
Eligible
Funds'
prospectuses for more information.
<PAGE>
The Alger American Fund
Alger American Small Capitalization
Portfolio: Seeks
long-term
capital
appreciation by investing at least
65% of its total
assets,
except
during temporary defensive periods, in
equity securities
of
companies
that, at the time of purchase,
have total
market
<PAGE>
capitalization within
the range of companies included
in the Russell
2000
Growth Index
("Russell Index") or the S&PSmallCap
600Index ("S&P Index"),
updated
quarterly. Both indexes are broad
indexes of
<PAGE>
small
capitalization
stocks. As of March 31, 1997,
the range of
market
capitalization of the
companies in the Russell Index was
$10 million to
$1.94
billion; the
range of market capitalization of the
companies in the
S&P
Index at
that date was $32 million to $2.579
billion. The
combined
range as of
that date was $10 million to $2.579
billion. The
Portfolio
may invest
up to 35% of its total assets in
equity securities
of
companies that,
at the time of purchase, have
total market
capitalization
outside this
combined range, and in excess of that
amount (up to 100% of
its
assets)
during temporary defensive periods.
<PAGE>
Alger American Growth Portfolio:
Seeks long-term
capital
appreciation
by investment of at least 65% of its
total assets,
except
during
temporary defensive periods, in equity
securities of
companies
that, at
the time of purchase of the
securities, have
total
market
capitalization of $1 billion or greater.
The Portfolio
may
invest up to
35% of its total assets in equity
securities of
companies
that, at the
time of purchase, have total market
capitalization of
less
than $1
billion.
American Century Variable Portfolios, Inc.
American Century VP Capital
<PAGE>
Appreciation: Seeks
capital
growth by
investing in common stocks
(including
securities
convertible into
common stocks and other equity
equivalents) and
other
securities that
meet certain fundamental and technical
standards of
selection
and have,
in the opinion of the
investment manager,
better-than-average
potential
<PAGE>
for appreciation. The Portfolio's
investment manager
intends
to stay
fully invested in such securities,
regardless of the
movement
of stock
prices generally.
<PAGE>
American Century VP International: Seeks
capital growth
by
investing
primarily in an internationally
diversified portfolio
of
securities of
foreign companies that meet certain
fundamental and
technical
standards
of selection and have, in the
opinion of the
investment
manager,
potential for capital appreciation. The
Portfolio will
invest
primarily
in common stocks (defined to
include depository
receipts
for common
stock and other equity
equivalents) of such
companies.
Investment in
securities for foreign issues
typically involves a
greater
degree of
risk than an investment in domestic
securities.
Berger Institutional Products Trust
<PAGE>
Berger IPT-Small Company Growth
Fund: Seeks
capital
appreciation by
investing primarily in equity securities
(including common
and
preferred stocks, convertible debt
securities and other
8
<PAGE>
<PAGE>
securities having equity
features) of small
growth
companies with
market capitalization of less than $1
billion at the time
of
initial
purchase.
Federated Insurance Series
Federated American Leaders Fund
II: Seeks to
achieve
long-term growth
of capital as a primary objective
and seeks to
provide
income as a
secondary objective through investment
of at least 65 %
of
its total
assets (under normal circumstances)
in common stocks
of
"blue chip"
companies.
Federated Fund for U.S. Government
Securities II: Seeks
<PAGE>
to
provide
current income through investment of
at least 65% of
its
total assets
in securities which are primary or
direct obligations
of
the U.S.
government or its agencies or
instrumentalities or which
are
guaranteed
as to principal and interest by the
U.S. government,
its
agencies, or
<PAGE>
instrumentalities and in certain
collateralized
mortgage
obligations,
and repurchase agreements.
Federated Utility FundII: Seeks to
provide highcurrent
income and
<PAGE>
moderate capital appreciation by
investing in
a
professionally-managed,
diversified portfolio of utility
company equity and
debt
securities.
INVESCO Variable Investment Funds, Inc.
INVESCO VIF-Industrial Income
Portfolio: Seeks the
best
possible
current income while following sound
investment
practices.
Capital
growth potential is an additional
consideration in
the
selection of
portfolio securities. The Portfolio
normally invests
at
least 65% of
its total assets in dividend-paying
common stocks. Up
to
10% of the
Portfolio's total assets may be
invested in equity
securities
that do
<PAGE>
not pay regular dividends. The
remaining assets are
invested
in other
income-producing securities such as
corporate bonds.
The
Portfolio also
has the flexibility to invest in other types
of securities.
INVESCO VIF-Total Return Portfolio:
Seeks a high
total
return on
investment through capital
appreciation and current
income.
The Total
Return Portfolio seeks to achieve its
investment objective
by
investing
in a combination of equity securities
(consisting of
common
stocks and,
to a lesser degree, securities
convertible into common
stock)
and fixed
income securities.
<PAGE>
INVESCO VIF-High Yield Portfolio: Seeks
a high level
of
current income
by investing substantially all of its
assets in lower
rated
bonds and
other debt securities and in preferred
stock. These
bonds
and other
securities are sometimes referred to
as "junk bonds."
The
High Yield
Portfolio pursues its investment
objective
through
investment in a
<PAGE>
variety of long-term,
intermediate-term, and
short-term
bonds.
Potential capital appreciation is a
factor in
the
selection of
investments, but is secondary to
the Portfolio's
<PAGE>
primary
objective.
Janus Aspen Series
Janus Aspen Aggressive Growth
Portfolio: Seeks
long-term
growth of
capital in a manner consistent with
the preservation
of
capital. The
Portfolio normally invests at least
50% of its
equity
assets in
securities issued by
medium-sized companies.
Medium-sized
companies are
those whose market capitalizations fall
within the range
of
companies
in the S&P MidCap 400 Index
(the "MidCap
Index").
Companies whose
capitalization falls outside this
range after the
Portfolio's
initial
purchase continue to be
considered medium-sized
companies
for the
purpose of this policy. As of December
30, 1996,
the
<PAGE>
<PAGE>
MidCap Index
included companies with
capitalizations
between
approximately $192
million to $6.5 billion. The range of
the MidCap Index
is
expected to
change on a regular basis. Subject to the
above policy,
the
Portfolio
may also invest in smaller or larger
issuers.
9
<PAGE>
<PAGE>
Janus Aspen Growth Portfolio: Seeks
long-term growth
of
capital in a
manner consistent with the
preservation of capital.
The
Portfolio
pursues its objective by investing in
common stocks
of
companies of any
size. This Portfolio generally
invests in larger,
more
established
issuers.
Janus Aspen Worldwide Growth
Portfolio: Seeks
long-term
growth of
capital in a manner consistent with the
preservation
of
capital. The
Portfolio pursues its objective
primarily through
investments
in common
stocks of foreign and domestic
issuers. The
<PAGE>
Portfolio
has the
flexibility to invest on a
worldwide basis
in
companies and
organizations of any size,
regardless of country
of
organization or
place of principal business activity.
The Portfolio
normally
invests in
issuers from at least five
different countries,
including
the United
States; however, it may at times invest
in fewer than
<PAGE>
five
countries or
even a single country.
Lexington Emerging Markets Fund, Inc.
Lexington Emerging Markets Fund: Seeks
long term growth
<PAGE>
of
capital
primarily through investment in
equity securities
of
companies
domiciled in, or doing business in
emerging countries
and
emerging
markets. For purposes of its investment
objective, the
Fund
considers
emerging country equity securities to
be any country
whose
economy and
market the World Bank or United Nations
considers to
be
emerging or
developing. The Fund may also
invest in
equity
securities and
equivalents traded in any market of
companies that derive
50%
or more
of their total revenue from either
goods or services
produced
in such
emerging countries or markets or sales
made in such
countries.
Montgomery Variable Series
<PAGE>
Montgomery Growth Fund: Seeks capital
appreciation
by
investing at
least 65% of its total assets (under
normal conditions)
in
the equity
securities of domestic corporations.
In addition
to
capital
appreciation, this Fund emphasizes
value. While the
Fund
emphasizes
investments in common stock, it also
invests in other
types
of equity
securities (including options
on equity
securities,
warrants and
futures contracts on equity securities).
The Fund may
invest
up to 35%
of its total assets in debt securities
rated within the
three
highest
grades of S&P, Moody's or Fitch, or
<PAGE>
unrated debt
securities
deemed to
be of comparable quality by its
portfolio manager
using
guidelines
approved by the Board of Trustees.
Montgomery International Small Cap
Fund: Seeks
capital
appreciation by
investing at least 65% of its total
assets (under
normal
conditions) in
equity securities of companies
outside the United
States
<PAGE>
having total
market capitalizations of less than
$1 billion,
sound
fundamental
values and potential for long-term
growth at a
reasonable
price. The
<PAGE>
Fund generally invests the
remaining 35% of its
total
assets in a
similar manner but may invest
those assets in
companies
having market
capitalizations of $1 billion or more,
or in debt
securities,
including
up to 5% of its total assets in debt
securities rated
below
investment
grade.
SAFECO Resource Series Trust
SAFECO RST Equity Portfolio: Seeks
long-term growth
of
capital and
reasonable current income. The
Portfolio ordinarily
invests
principally
in common stocks or securities
convertible into common
stocks.
Schwab Annuity Portfolios
Schwab Money Market Portfolio: Seeks
maximum current
income
consistent
<PAGE>
with liquidity and stability of capital.
It seeks to
achieve
its
objective by investing in short-term money
market
10
<PAGE>
<PAGE>
instruments. This Portfolio is
neither insured
nor
guaranteed by the
United States Government and there can be
no assurance that
it
will be
able to maintain a stable net asset
value of $1.00 per
share.
Schwab Asset Director-High Growth
Portfolio: Seeks
to
provide high
capital growth with less volatility
than an all
stock
portfolio. The
High Growth Fund seeks to meet its
investment objective
by
investing in
a mix of stocks, bonds, and cash
equivalents.
Schwab S&P 500 Portfolio: Seeks to
track the price
and
dividend
performance (total return) of
<PAGE>
common stocks of
U.S.
companies, as
represented in the Standard & Poor's
Composite Index of
500
stocks (the
"Index"). The S&P 500 Fund invests
primarily in the
common
stocks of
companies composing the Index.
SteinRoe Variable Investment Trust
SteinRoe Capital Appreciation Fund: Seeks
capital growth
by
<PAGE>
investing
primarily in common stocks,
convertible
securities,
and other
securities selected for prospective capital
growth.
Strong Discovery Fund II, Inc.
<PAGE>
Strong Discovery Fund II: Seeks
capital growth. The
Fund
invests in
securities that the Fund's
investment adviser
believes
represent
attractive growth opportunities.
The Fund
normally
emphasizes equity
investments, although it has the
flexibility to invest in
any
security
the Fund's investment adviser believes
has the potential
for
capital
appreciation.
Van Eck Worldwide Insurance Trust
Van Eck Worldwide Hard Assets
Fund: Seeks
long-term
capital
appreciation by investing in hard
asset securities;
i.e.,
commodities
<PAGE>
or securities of firms involved
(directly or
indirectly)
in the
following areas: precious metals,
ferrous and
non-ferrous
metals,
energy, real estate, and other
non-agricultural
commodities.
The Fund
seeks opportunities in all the global
stock, bond,
and
commodity
markets, including domestic markets.
Current income
is
not an
investment objective.
The two Alger American Funds are
advised by Fred
Alger
Management, Inc.
of New York, New York. The two American
Century Variable
Portfolios,
Inc., are
advised by American Century Investment
Management of Kansas
City,
<PAGE>
Missouri,
advisers to the American Century family of
mutual funds. The
Berger
IPT-Small
Company Growth Fund is advised by Berger
Associates of Denver,
Colorado.
The
three Federated Insurance Series Portfolios
are advised by
Federated
Advisers of
Pittsburgh, Pennsylvania. The three INVESCO
Variable Investment
Funds,
Inc.,
Portfolios are advised by INVESCO Funds
Group, Inc., of
Denver,
<PAGE>
Colorado.
INVESCO Trust Company is the sub-adviser
for the INVESCO
VIF-Industrial
Income
Portfolio. The three Janus Aspen Series Portfolios
are advised by
Janus
Capital
<PAGE>
Corporation of Denver, Colorado. The Lexington
Emerging Markets Fund
is
advised
by Lexington Management Corporation of Saddle
Brook, New Jersey.
The
two
Montgomery Variable Series Funds are advised
by Montgomery
Asset
Management,
L.P. of San Francisco, California. The SAFECO RST
Equity Portfolio
is
advised
by SAFECO Asset Management Company of Seattle,
Washington. The
three
Schwab
Annuity Portfolios are advised by Charles
Schwab Investment
Management,
Inc., of
San Francisco, California. The SteinRoe Capital
Appreciation Fund
is
advised by
Stein Roe & Farnham Incorporated of Chicago,
Illinois. Strong
Discovery
Fund II
is advised by Strong Capital Management, Inc.
of Milwaukee,
Wisconsin.
The Van
Eck Worldwide Hard Assets Fund is advised
by Van Eck
Associates
Corporation of
<PAGE>
New York, New York.
<PAGE>
***
<PAGE>
<PAGE>
Meeting investment objectives
depends on various
factors,
including,
but not limited to, how well the Eligible
Fund managers
anticipate
changing
economic and market conditions. THERE IS NO
ASSURANCE THAT ANY OF
THESE
ELIGIBLE
FUNDS WILL ACHIEVE THEIR STATED OBJECTIVES.
The Contracts are not deposits of, or
guaranteed or
endorsed
by, any
bank, nor are the Contracts federally insured
by the Federal
Deposit
Insurance
Corporation, the Federal Reserve Board
or any other
government
agency. The
Contracts involve certain investment
risks, including
possible
loss of
principal.
Each Eligible Fund is registered with
<PAGE>
the Commission as
an
open-end
management investment company or portfolio
thereof. The
Commission
does not
supervise the management or the investment
practices and policies
of
any of the
Eligible Funds.
Since some of the Eligible Funds are
available to
registered
separate
accounts of other insurance companies offering
variable annuity
<PAGE>
and
variable
life products, there is a possibility that a
material conflict may
arise
between
the interests of the Series Accountand one or more
other separate
accounts
<PAGE>
investing in the Eligible Funds. In the
event of a
material
conflict, the
affected insurance companies are required to take any
necessary steps
to
resolve
the matter, including stopping their
separate accounts
from
investing in the
Eligible Funds. See the Eligible Funds'
prospectuses for more
details.
Additional information
concerning the
investment
objectives and
policies of all of the Eligible Funds and
the investment
advisory
services and
administrative services and charges can be
found in the
current
prospectuses for
the Eligible Funds, which can be obtained by
calling the Schwab
Annuity
Service
Center at 800-838-0649, or by writing to Schwab
Annuity Service
Center,
P.O. Box
7806, San Francisco, California 94120-9327.
The Eligible
Funds'
prospectuses
<PAGE>
<PAGE>
should be read carefully before any decision is
made concerning
the
allocation
of Contributions to, or Transfers among, the
Investment Divisions.
Addition, Deletion, or Substitution
The Company does not control the
Eligible Funds and
cannot
guarantee
that any of the Eligible Funds will always
be available
for
allocation of
Contributions or Transfers. The Company retains
the right to
make
changes in the
Series Account and in its investments.
Currently, Schwab must
approve
certain
changes.
First GWL&A and Schwab reserve the
right to eliminate
the
shares of any
Eligible Fund held by an Investment Division and to
<PAGE>
substitute shares
of
another
Eligible Fund or of another investment company,
for the shares of
any
Eligible
Fund, if the shares of the Eligible Fund are no
longer available
for
investment
or if, in First GWL&A's and Schwab's judgment,
investment in
any
Eligible Fund
would be inappropriate in view of the
purposes of the Series
Account.
To the
<PAGE>
extent required by the 1940 Act, a
substitution of
shares
attributable to the
Owner's interest in an Investment Division will
not be made
without
prior notice
to the Owners and the prior approval of
the Commission.
<PAGE>
Nothing
contained herein
shall prevent the Series Account from
purchasing other
securities
for other
series or classes of variable annuity policies,
or from effecting
an
exchange
between series or classes of variable policies
on the basis of
Requests
made by
you.
New Investment Divisions may be
established when, in
our
discretion,
marketing, tax, investment or other conditions
so warrant. Any
new
Investment
Divisions will be made available to Owners
on a basis to
be
determined by us.
Each additional Investment Division will
purchase shares in a
Eligible
Fund or
in another mutual fund or investment vehicle. We
may also eliminate
one
or more
Investment Divisions if, in our sole discretion,
marketing,
tax,
<PAGE>
investment or
other conditions so warrant. In the event any
Investment Division
is
eliminated,
we will notify the Owners and request a
re-allocation of the
amounts
invested in
the eliminated Investment Division.
12
<PAGE>
<PAGE>
In the event of any such substitution
or change, we
may
make such
changes to your Contract as may be necessary
or appropriate
to
reflect such
substitution or change. Furthermore, if
deemed to be in the
best
interests of
persons having voting rights under the
Contracts, the
Series
Account may be
operated as a management company under the 1940
Act or any other
form
permitted
by law, may be de- registered under such Act
in the event
such
registration is
no longer required, or may be combined with
one or more other
separate
accounts.
Such changes will be made in compliance with
applicable law.
------------------------------------------------------
<PAGE>
THE
GUARANTEE PERIOD
FUND
------------------------------------------------------
Guarantee Period Fund
Amounts allocated to the Guarantee
Period Fund under
the
Contract will
be deposited to, and accounted for, in a
non-unitized market
value
separate
account established by the Company under Section
4240 of the New
<PAGE>
York
Insurance
Code and in accordance with New York
Regulation 128. These
amounts
accordingly,
are not partof the Series Account.A non-unitized
market valueseparate
account
<PAGE>
is a separate account in which the Owner does not
participate in
the
performance
of the assets through unit values.
Therefore, Owners
allocating
Contributions do
not receive a unit ownership of assets
accounted for in this
separate
account.
The assets accrue solely to the benefit of the
Company and any gain
or
loss in
the separate account is borne entirely by the
Company. For
amounts
allocated to
the Guarantee Period Fund, Owners will
receive the Contract
guarantees
made by
the Company.
Contributions allocated to or amounts
transferred to
the
Guarantee
Period Fund will establish a new Guarantee
Period of a
duration
selected by the
Owner from those currently being offered by
the Company.
Every
<PAGE>
Guarantee Period
offered by the Company will have a time
interval of at
least
one year.
Contributions allocated to the Guarantee
Period Fund will
be
credited on the
Transaction Date.
Each Guarantee Period will have its
own stated rate
of
interest and
Guarantee Period Maturity Date. The
stated rate of
interest
applicable to a
Guarantee Period will depend on the date the
Guarantee Period
is
established and
the duration chosen by the Owner.
As of the date of this Prospectus,
Guarantee Periods
with
annual time
intervals of 1 to 10 years are offered. The
Guarantee Periods may
be
changed in
<PAGE>
the future; however, any such modification
will not have an
impact
on any
Guarantee Period then in effect.
The value of amounts in each
Guarantee Period is
the
Owner's
Contributions, less Premium Tax, if any, in that
Guarantee Period,
plus
interest
earned, less amounts distributed, withdrawn
(in whole or in
part),
Transferred
<PAGE>
or applied to an annuity option, periodic
withdrawals, and
charges
deducted
under the Contract. If a Guarantee Period is
broken, a Market
Value
Adjustment
may be assessed. Any such amount withdrawn
or Transferred
<PAGE>
from a
Guarantee
Period will be paid in accordance with the
MVA formula
(See
"Market Value
Adjustment," page __.)
Investments
The Company intends to invest in
assets which, in
the
aggregate, have
characteristics, especially cash flow
patterns, reasonably
related
to the
characteristics of its liabilities. Various
techniques will be used
to
achieve
the objective of close aggregate matching of assets
and liabilities.
The
Company
will primarily invest in investment-grade
fixed income
securities
including:
Securities issued by the U.S.
Government or
its
agencies or
<PAGE>
instrumentalities, which issues may or may not be
guaranteed by the
U.S.
Government.
13
<PAGE>
<PAGE>
Debt securities which have an
investment grade, at
the
time of
purchase, within the four highest
grades assigned by
Moody's
Investment
Services, Inc. (Aaa, Aa, A or Baa),
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 banks or bank holding
companies and of
corporations,
which
obligations, although not rated by
Moody's, Standard &
Poor's,
or other
nationally recognized rating firms,
are deemed by
the
Company's
<PAGE>
management to have an investment
quality comparable
to
securities which
may be purchased as stated above.
Commercial paper, cash
or cash
equivalents,
and other
short-term investments having a
maturity of less than
one
year which
are considered by the Company's
management to have
investment
quality
comparable to securities which may be
purchased as
<PAGE>
stated
above.
In addition, the Company may invest
in futures and
options.
Financial
futures and related options thereon and options
on securities
<PAGE>
are
purchased
solely for non-speculative hedging purposes.
The Company may
sell a
futures
contract or purchase a put option on futures or
securities to
protect
the value
of securities held in or to be sold for the
general account or
the
non-unitized
separate account in the event the securities prices
are anticipated
to
decline.
Similarly, if securities prices are expected to
rise, the Company
may
purchase a
futures contract or a call option thereon
against anticipated
positive
cash flow
or may purchase options on securities.
WHILE THE FOREGOING GENERALLY DESCRIBES
THE INVESTMENT
STRATEGY
FOR THE
GUARANTEE PERIOD FUND, THE COMPANY IS NOT OBLIGATED
TO INVEST THE
ASSETS
ATTRIBUTABLE TO THE GUARANTEE PERIOD FUND ACCORDING
TO ANY PARTICULAR
STRATEGY, EXCEPT AS MAY BE REQUIRED BY NEW
YORK AND OTHER
STATE
<PAGE>
INSURANCE
<PAGE>
LAWS, NOR WILL THE STATED RATE OF INTEREST
THAT THE COMPANY
ESTABLISHES
NECESSARILY RELATE TO THE PERFORMANCE OF THE
NON-UNITIZED MARKET
VALUE
SEPARATE ACCOUNT.
Subsequent Guarantee Periods
Prior to the date annuity payments
commence, you may
invest
the value
of amounts held in a maturing Guarantee Period
in any Guarantee
Period
that we
offer at that time. On the quarterly statement
issued prior to
the
end of any
Guarantee Period, we will notify you of the
upcoming maturity of
a
Guarantee
Period. THE GUARANTEE PERIOD AVAILABLE FOR NEW
CONTRIBUTIONS MAY
BE
CHANGED AT
ANY TIME, INCLUDING BETWEEN THE DATE OF
NOTIFICATION OF A
MATURING
GUARANTEE
<PAGE>
PERIOD AND THE DATE A SUBSEQUENT GUARANTEE
PERIOD BEGINS.
Information
regarding
the current Guarantee Periods then available and
their stated rate
of
interest
may be obtained by calling the Schwab Annuity Service
Center at:
1-800-838-0649.
If the Company receives no direction
from the
Contract
Owner by the
<PAGE>
Guarantee Period Maturity Date, the
Company will
automatically
allocate the
amount from the maturing Guarantee Period to
a Guarantee
Period
equal in
duration to the one just ended. If at
that time, the
<PAGE>
duration
previously chosen
is no longer available, the amount will be
allocated to the
next
shortest
available Guarantee Period duration. If
none of the above
is
available, the
value of matured Guarantee Periods will be
allocated to the
Schwab
Money Market
Investment Division. In any event, a Guarantee
Period will not
renew
for a term
equal in duration to the one just ended if
the Guarantee
Period
will mature
after the Payment Commencement Date. No
Guarantee Period may
mature
later than
six months after a Payment Commencement Date.
For example, if a
3-year
Guarantee
Period matures and the Payment Commencement
Date begins 1 3/4
years
from the
Guarantee Period Maturity Date, the
matured value will
be
transferred to a
2-year Guarantee Period.
<PAGE>
14
<PAGE>
<PAGE>
Breaking A Guarantee Period
Any Transfer, withdrawal or the
selection of an annuity
option
prior to
the Guarantee Period Maturity Date will be known
as breaking a
Guarantee
Period.
When a Request to break a Guarantee Period is
received, the
Guarantee
Period
that is closest to the Guarantee Period
Maturity Date will be
broken
first. If a
Guarantee Period is broken, a Market Value
Adjustment may
be
assessed. The
Market Value Adjustment may increase or
decrease the value of
the
amount
Transferred or withdrawn from the Guarantee
Period Fund.
The
Market Value
Adjustment may reduce the value of amounts held
in a Guarantee
Period
<PAGE>
below the
amount of your Contribution(s) allocated to that
Guarantee Period.
(See
"Market
Value Adjustment," page __.)
Interest Rates
Declared rates are effective annual
rates of interest.
The
rate is
guaranteed throughout the Guarantee Period.
FOR GUARANTEE
PERIODS
NOT YET IN
EFFECT, FIRST GWL&A MAY DECLARE INTEREST RATES
DIFFERENT THAN
<PAGE>
THOSE
CURRENTLY IN
EFFECT. When a subsequent Guarantee Period
begins, the rate
applied
will not be
less than the rate then applicable to new Contracts
of the same type
with the
<PAGE>
same Guarantee Period.
The stated rate of interest must be at
least equal to
the
Contractual
Guarantee of a Minimum Rate of Interest.
The Company may
declare
higher rates.
The Contractual Guarantee of a Minimum Rate
of Interest is
based
on the
applicable state standard non-forfeiture law
which is currently
3%
for the
Contract.
The determination of the stated rate
of interest is
influenced
by, but
does not necessarily correspond to, interest
rates available
on
fixed income
investments which the Company may acquire
using funds
deposited
into the
Guarantee Period Fund. In addition, the Company
will consider
other
items in
<PAGE>
determining the stated rate of interest
including
regulatory
and tax
requirements, sales commissions and
administrative expenses
borne
by the
Company, general economic trends, and competitive
factors.
Market Value Adjustment
Distributions from the amounts allocated
to a Guarantee
Period
due to a
full surrender or partial withdrawal,
Transfer, application
of
amounts to the
periodic withdrawal option or to purchase an
annuity prior to
a
Guarantee Period
Maturity Date will be subject to a Market Value
Adjustment ("MVA").
An
MVA may
increase or decrease the amount payable on
one of the
above
described
<PAGE>
distributions. Amount available for a
full surrender,
partial
withdrawal or
Transfer = amount Requested + MVA. The MVA is
calculated
by
multiplying the
amount Requested by the Market Value Adjustment
Factor ("MVAF").
The MVA reflects the relationship as
of the time of
its
calculation
between (a) the U.S. Treasury Strip ask side yield
as published
in
the Wall
Street Journal on the last business day of the
week prior to the
<PAGE>
date
the stated
rate of interest was established for the
Guarantee Period; and
(b)
the U.S.
Treasury Strip ask side yield as published
in the Wall
Street
<PAGE>
Journal on the
last business day of the week prior to the week the
Guarantee Period
is
broken.
There would be a downward adjustment if Treasury
rates at the time
the
Guarantee
Period is broken, exceed Treasury rates when the
Guarantee Period
was
created.
There would be an upward adjustment if Treasury
rates at the time
the
Guarantee
Period is broken, are lower than when the
Guarantee Period was
created.
The MVA
factor is the same for all Contracts.
1. The formula used to determine the MVA is:
MVA = (amount applied) X (MVAF)
15
<PAGE>
<PAGE>
<PAGE>
The Market Value Adjustment Factor
(MVAF) is:
MVAF = {[(1 + i)/(1 + j)] N/12} - 1
where:
a) i is the U.S.
Treasury Strip ask side
yield
as
published in the Wall Street
Journal on the
last
business day
of the week prior to the date
the stated rate
of
interest was
established for the Guarantee
Period. The term
of i
is
measured in years and equals
the term of the
Guarantee
Period;
b) j is the U.S. Treasury
Strip ask side
yield
as
published in the Wall Street
<PAGE>
Journal on the
last
business day
of the week prior to the week the
Guarantee Period
is
broken.
The term of j equals the remaining
term to maturity
of
the
Guarantee Period, rounded up to
the higher number
of
years;and
c) N is the number of
complete months
remaining
<PAGE>
until
maturity.
If N is less than 6, the MVA will equal 0.
2. The Market Value Adjustment will apply to any
Guarantee Period
six
<PAGE>
or more
months prior to the Guarantee Period Maturity
Date in each of
the
following
situations:
a) Transfer to another
Guarantee Period or to
an
Investment Division offered under
this Contract; or
b)
Surrenders, partial
withdrawals,
annuitization or
Periodic Withdrawals.
3. The Market Value Adjustment will not
apply to any
Guarantee
Period having
fewer than six months prior to the Guarantee
Period Maturity Date
in
each of the
following situations:
<PAGE>
a) Transfer to an
Investment Division
offered
under this
Contract; or
b)
Surrenders, partial
withdrawals,
annuitization or
Periodic Withdrawals.
c) A single sum payment
upon death of the
Owner
or
Annuitant.
See Appendix A for Illustrations of the MVA.
------------------------------------------------------
APPLICATION
AND
CONTRIBUTIONS
------------------------------------------------------
Contributions
<PAGE>
All Contributions may be paid at the
Schwab Annuity
Service
Center by a
check payable to the Company or by transfer
to the Company
of
available funds
from your Schwab account.
The initial Contribution for the
Contract must be at
least
$5,000 (or
<PAGE>
$2,000 if for an IRA). Subsequent
Contributions must be at
least
$500. This
minimum initial investment may be reduced to
$1,000, but only if
you
participate
in an Automatic Contribution Plan and contribute at
least $100 per
<PAGE>
16
<PAGE>
<PAGE>
month through a recurring deposit. A confirmation
will be issued to
you
upon
the acceptance of each Contribution.
Your Contract will be issued and your
Contribution
generally
will be
accepted and credited within two business days
after receipt of
an
acceptable
application and receipt of the initial
Contribution at the
Schwab
Annuity
Service Center. All Contributions should be paid
to the Schwab
Annuity
Service
Center by check (payable to First GWL&A) or by
instructing Schwab
to
transfer to
First GWL&A available funds from your account with
Schwab. Acceptance
is
subject
to there being sufficient information in a form
acceptable to us and
we
<PAGE>
reserve
the right to reject any application or Contribution.
The Schwab Annuity Service Center
will process
your
application and
Contributions. If your application is
complete and your
initial
Contribution is
being transferred from funds available
in your Schwab
account,
then the
Contribution will generally be credited
within two business
days
following
<PAGE>
receipt of the application. If your
application is
incomplete,
the Schwab
Annuity Service Center will either complete the
application
from
information
Schwab has on file, or contact you for the
additional information.
<PAGE>
No
transfer
of funds will be made from your Schwab
account until
your
application is
complete. The funds will be credited as
Contributions to the
Contract
when they
are transferred.
If your Contribution is by check, and
the application
is
complete,
Schwab will use its best efforts to credit
the Contribution
on
the day of
receipt, but in all such cases it will be
credited to your
Contract
within two
business days of receipt. If your application is
incomplete, the
Schwab
Annuity
Service Center will complete the application from
information Schwab
has
on file
or contact you by telephone to obtain
the required
information.
If your
application remains incomplete for five
business days, we
will
return to you
<PAGE>
<PAGE>
both the check and the application unless
you consent to
our
retaining the
initial Contribution and crediting it as soon as
the requirements
are
fulfilled.
A Contract may be returned within
ten days after
receipt
("Free Look
Period"). During the Free Look Period, all
contributions will
be
processed as
follows:
(1) Amounts to be allocated to one
or more of the
then
available
Guarantee Periods will be
allocated as
directed,
effective
upon the Transaction Date.
(2) Amounts the Owner has directed to
be allocated to
one
or more
<PAGE>
of the Investment
Divisions will first
be
allocated to the
Schwab Money Market
Investment Division
until
the next
Transaction Date following the
end of the Free
Look
Period. On
that date, the Variable Account
Value held in
the
Schwab Money
Market Investment Division will
be allocated to
the
<PAGE>
Investment
Divisions selected by the Owner.
(3) During the Free Look Period,
you may change
the
allocation
percentages among the
Investment
<PAGE>
Divisions
and/or your
selection of Investment
Divisions to
which
Contributions will
be allocated after the Free Look
Period.
(4) If the Contract is returned,
the contract will
be
void from
the start and the
greater of: (a)
Contributions
received less
surrenders, withdrawals and
distributions, or (b)
the
Annuity
Account Value less surrenders,
withdrawals
and
distributions,
will be refunded. Exercising
the return
privilege
requires the
return of the Contract to the
Company or to the
Schwab
Annuity
Service Center.
Amounts the Owner has contributed from a
1035 exchange of
the
<PAGE>
variable
annuity issued by Transamerica Occidental
Life Insurance
Company
and First
Transamerica Occidental Life Insurance Company
distributed by
Charles
Schwab &
Co., Inc. (previously referred to as the
Schwab Investment
Advantage
Annuity
Contract) will be immediately allocated to
the Investment
Divisions
selected by
the Owner. If the Contract is returned, it will
be void from the
start
and the
greater of: (a) Contributions
17
<PAGE>
<PAGE>
received less surrenders, withdrawals and
distributions, or (b)
the
Annuity
Account Value less surrenders, withdrawals and
distributions, will
be
refunded.
Additional Contributions may be made at
any time prior to
the
Payment
Commencement Date, as long as the Annuitant
is living.
Additional
Contributions
must be at least $500 or $100 per month
if under an
ACP.
Additional
Contributions will be credited within two days
following receipt.
Total Contributions may exceed
$1,000,000 with our
prior
approval.
The Company reserves the right to modify
the limitations
set
forth in
<PAGE>
this section.
------------------------------------------------------
ANNUITY ACCOUNT
VALUE
------------------------------------------------------
Before the date annuity payments
commence, your
Annuity
Account Value
is the sum of each Variable and Fixed
Sub-Account
established
<PAGE>
under your
Contract.
Before the annuity commencement date,
the Variable
Account
Value is the
total dollar amount of all Accumulation Units
under each of
<PAGE>
your
Variable
Sub-Accounts. Initially, the value of each
Accumulation Unit was set
at
$10.00.
Each Variable Sub-Account's value prior to
the Payment
Commencement
Date is
equal to: (a) net Contributions
allocated to the
corresponding
Investment
Division; plus or minus (b) any increase or
decrease in the value
of
the assets
of the Variable Sub- Account due to investment
results; less
(c)
the daily
Mortality and Expense Risk Charge; less (d)
reductions for
the
Contract
Maintenance Charge deducted on the last
business day of each
Contract
Year; less
(e) any applicable Transfer Fees; and less (f)
any withdrawals
or
Transfers from
the Variable Sub-Account.
<PAGE>
A Valuation Period is the period
between successive
Valuation
Dates. It
begins at the close of the New York Stock
Exchange (generally
4:00
p.m. ET) on
each Valuation Date and ends at the close of
the New York
Stock
Exchange on the
next succeeding Valuation Date. A Valuation Date
is each day that
the
New York
Stock Exchange is open for regular business.
The value of
an
Investment
Division's assets is determined at the end of each
Valuation Date.
To
determine
the value of an asset on a day that is not a
Valuation Date, the
value
of that
asset as of the end of the previous Valuation Date
will be used.
The Variable Account Value is
expected to change
<PAGE>
from
Valuation Period
to Valuation Period, reflecting the investment
experience of
the
selected
Investment Division(s) as well as the deductions for
charges.
Contributions which you allocate to an
Investment Division
are
used to
purchase Variable Accumulation Units in the
Investment Division(s)
you
select.
The number of Accumulation Units to be credited
will be determined
by
dividing
<PAGE>
the portion of each Contribution
allocated to the
Investment
Division by the
value of an Accumulation Unit determined at
the end of the
Valuation
Period
during which the Contribution was received.
In the case of
<PAGE>
the
initial
Contribution, Accumulation Units for that
payment will be
credited
to the
Variable Account Value (and, except for
certain 1035
exchanges),
held in the
Schwab Money Market Investment Division until
the end of the
Free
Look Period
(see "Application and Contributions," page __).
In the case of
any
subsequent
Contribution, Accumulation Units for that payment
will be credited
at
the end of
the Valuation Period during which we receive the
Contribution.
The
value of an
Accumulation Unit for each Investment
Division for a
Valuation
Period is
established at the end of each Valuation Period and
is calculated
by
multiplying
the value of that unit at the end of the
prior Valuation
Period
by the
Investment Division's Net Investment Factor for the
Valuation Period.
<PAGE>
<PAGE>
18
<PAGE>
<PAGE>
Unlike a brokerage account, amounts
held under a
Contract
are not
covered by the Securities Investor Protection
Corporation ("SIPC") .
------------------------------------------------------
TRANSFERS
------------------------------------------------------
In General
Prior to the Payment Commencement Date you
may Transfer all
or
part of
your Annuity Account Value among and between
the Investment
Divisions
and the
available Guarantee Periods by sending a
Request to the Schwab
Annuity
Service
Center. The Request must specify the amounts being
Transferred,
the
Investment
<PAGE>
Division(s) and/or Guarantee Period(s) from which
the Transfer is
to
be made,
and the Investment Division(s) and/or Guarantee
Period(s) that
will
receive the
Transfer.
Currently, there is no limit on the
number of Transfers
you
can make
among the Investment Divisions during any calendar
year. There is
no
charge for
<PAGE>
the first twelve Transfers per calendar year,
but there will
be a
charge of $10
for each additional Transfer in each calendar year.
We reserve the
right to
limit the number of Transfers you make. The
charge will be
deducted
<PAGE>
from the
amount transferred. All Transfers made on a
single Transaction
Date
will be
aggregated to count as only one Transfer
toward the twelve
free
Transfers;
however, if a one time rebalancing Transfer
also occurs on
the
Transaction Date,
it will be counted as a separate and additional
Transfer.
Transfers involving the Guarantee
Period Fund
(including
Transfers to
or from the Investment Division(s)) are not
limited during
any
calendar year.
These Guarantee Period Fund Transfers are
counted against
your
twelve free
Transfers as discussed above. The $10 charge will
apply to each
Transfer
made in
excess of the first twelve Transfers each calendar
year.
<PAGE>
A Transfer generally will be effective
on the date
the
Request for
Transfer is received by the Schwab Annuity
Service Center if
received
before
4:00 p.m. Eastern Time. Under current law, there
will not be any
tax
liability
to you if you make a Transfer.
Transfers involving the Investment
Divisions will
result
in the
purchase and/or cancellation of Accumulation Units
having a total
value
equal to
the dollar amount being Transferred to or from
a particular
Investment
Division.
The purchase and/or cancellation of such units
generally shall be
made
using the
Variable Account Value as of the end of the
Valuation Date on which
<PAGE>
the
Transfer
is effective.
When a Transfer is made from amounts
in a Guarantee
Period
before the
Guarantee Period Maturity Date, the amount
Transferred may
be
subject to a
Market Value Adjustment. (See "Market Value
Adjustment," page
--.) A
Request for
Transfer from amounts in a Guarantee Period
made prior to the
Guarantee
<PAGE>
Period
Maturity Date for Transfers on the Guarantee
Period Maturity
Date
will not be
counted for the purpose of determining any
Transfer Fee on
Transfers
in excess
<PAGE>
of the twelve Transfers per calendar year if these
Transfers are
to
take place
on the Guarantee Period Maturity Date.
Possible Restrictions
We reserve the right without prior
notice to modify,
restrict,
suspend
or eliminate the Transfer privileges at any
time. For
example,
restrictions may
be necessary to protect Owners from adverse
impacts on
portfolio
management of
large and/or numerous Transfers by market timers
or others. We
have
determined
that the movement of significant amounts from one
Investment Division
to
another
may prevent the underlying Eligible Fund from
taking advantage
of
investment
opportunities because the Eligible Fund
must maintain
a
significant cash
position in order to handle redemptions. Such
movement
<PAGE>
19
<PAGE>
<PAGE>
may also cause a substantial increase in
Eligible Fund
transaction
costs which
must be indirectly borne by Owners. Therefore, we
reserve the right
to
require
that all Transfer Requests be made by the Owner
and not by an
Owner's
designee
and to require that each Transfer Request
be made by a
separate
communication to
us. We also reserve the right to request that each
Transfer Request
be
submitted
in writing and be manually signed by the
Owner; facsimile
Transfer
Requests may
not be allowed. Transfers among the Investment
Divisions may also
be
subject to
such terms and conditions as may be imposed by the
Eligible Funds.
Custom Transfer: Dollar Cost Averaging (Automatic
Transfers)
<PAGE>
The Owner may Request to automatically
Transfer at
regular
intervals,
predetermined amounts from one Investment
Division selected
from
among those
being allowed under this option (which may be
modified by the
Company
from time
to time) to any of the other Investment
Divisions. The
intervals
between
Transfers may be monthly, quarterly,
semi-annually or annually.
The
Transfer
<PAGE>
will be initiated on the Transaction Date
one frequency
period
following the
date of the Request. Transfers will continue
on that same day
each
interval
unless terminated by you or for other reasons
as set forth in
<PAGE>
the
Contract. If
there are insufficient funds in the applicable
Variable Sub-Account
on
the date
of Transfer, no Transfer will be made;
however, Dollar
Cost
Averaging will
resume once there are sufficient funds in
the applicable
Variable
Sub-Account.
Dollar Cost Averaging will terminate
automatically upon the
annuity
commencement
date. Amounts transferred through Dollar Cost
Averaging are not
counted
against
the twelve free Transfers allowed in a calendar year.
Automatic Transfers must meet the following
conditions:
1. The minimum amount that can be
Transferred out of
the
selected
Investment Division is $100 per month.
2. The Owner must specify dollar
amount to be
Transferred,
designate
<PAGE>
he Investment Division(s)to which the Transfer
will be made and
the
percent to
be allocated to such Investment Division(s).
The Accumulation
Unit
values will
be determined on the Transfer Date.
Dollar Cost Averaging may be used
to purchase
Accumulation
Units of the
Investment Divisions over a period of time.
The Owner, by
Request,
may cease
Dollar Cost Averaging at any time.
Participation in Dollar
Cost
Averaging does
not, however, assure a greater profit, nor
will it prevent
or
necessarily
alleviate losses in a declining market. The
Company reserves
the
right to
modify, suspend or terminate Dollar Cost Averaging at
any time.
<PAGE>
Custom Transfer: Rebalancer Option
The Owner may Request to automatically
Transfer among
the
Investment
Divisions on a periodic basis by electing
the Rebalancer
Option.
This option
automatically reallocates the Variable Account
Value to maintain
a
particular
allocation among Investment Divisions selected
by the Owner.
The
amount
allocated to each Investment Division will
increase or decrease
<PAGE>
at
different
rates depending on the investment experience of
the Investment
Division.
The Owner may Request that the
rebalancing occur one
time
<PAGE>
only, in
which case the Transfer will take place on the
Transaction Date of
the
Request.
This Transfer will count as one Transfer
towards the twelve
free
Transfers
allowed in a calendar year. (See "Transfer Fee," page
__.)
Rebalancing may also be set up on
a quarterly,
semiannual
or annual
basis, in which case the first Transfer will
be initiated on
the
Transaction
Date one frequency period following the date of
the Request. On
the
Transaction
Date for the specified Request,
assets will be
automatically
reallocated to the
selected Investment Divisions. Rebalancing will
continue on the
same
Transaction
Date for
20
<PAGE>
<PAGE>
<PAGE>
subsequent periods. In order to participate in
the Rebalancer
Option,
the entire
Variable Account Value must be included.
Transfers set up with
these
frequencies
will not count against the twelve free Transfers
allowed in a
calendar
year.
The Owner must specify the percentage
of Variable
Account
Value to be
allocated to each Investment Division and
the frequency
of
rebalancing. The
Owner, by Request, may modify the allocations
or cease the
Rebalancer
Option at
any time. The Rebalancer Option will terminate
automatically upon
the
Payment
Commencement Date. Participation in the
Rebalancer Option
and
Dollar Cost
<PAGE>
Averaging at the same time is not allowed.
Participation in
the
Rebalancer
Option does not assure a greater profit, nor
will it prevent
or
necessarily
alleviate losses in a declining market. The
Company reserves
the
right to
modify, suspend, or terminate the Rebalancer Option
at any time.
------------------------------------------------------
CASH WITHDRAWALS
<PAGE>
------------------------------------------------------
Withdrawals
You (the Owner) may withdraw from the
Contract all or
part
<PAGE>
of your
Annuity Account Value at any time during the life
of the Annuitant
and
prior to
the date annuity payments commence by Request
at the Schwab
Annuity
Service
Center subject to the rules below. Federal or
state laws, rules
or
regulations
may apply. The amount payable to you if you
surrender your
Contract
is your
Annuity Account Value, with a Market Value
Adjustment, if
applicable,
on the
effective date of the surrender, and less
any applicable
Premium
Tax. No
withdrawals may be made after the date annuity
payments commence.
A Request for a partial withdrawal
will result in a
reduction
in your
Annuity Account Value equal to the sum of the
dollar amount
withdrawn.
A Market
<PAGE>
Value Adjustment may apply. (See "Market
Value Adjustment,"
page
__.) The
partial withdrawal proceeds may be greater or
less than the
amount
requested,
depending on the effect of the Market Value
Adjustment.
The minimum partial withdrawal before
application of the
MVA
is $500.
Partial withdrawals are unlimited; however,
you must specify
the
Investment
Division(s) or Guarantee Period(s) from which the
withdrawal is
to
be made.
After any partial withdrawal, if the remaining
Annuity Account
Value
is less
than $2,000, then a full surrender may be required.
The following terms apply:
(a) No partial withdrawals are
permitted after the
date
<PAGE>
annuity
payments commence.
(b) A partial withdrawal will be
effective upon
the
Transaction
Date.
(c) A partial withdrawal from
amounts in a
Guarantee
Period may be
subject to the
Market Value
Adjustment
provisions, the
Guarantee Period Fund
provisions of the
<PAGE>
Contract,
and the
terms of the attached
Guarantee Period Fund
Rider(s),
if any.
Withdrawals may be taxable
(this includes
<PAGE>
Periodic
Withdrawals,
discussed below). Moreover, the Internal
Revenue Code (the
"Code")
provides that
a 10% penalty tax may be imposed on the
taxable portions
of
certain early
withdrawals. The Code generally requires us to
withhold federal
income
tax from
withdrawals. However, generally you will be
entitled to elect,
in
writing, not
to have tax withholding apply unless withholding
is mandatory for
your
Contract.
Withholding applies to the portion of the
withdrawal which is
included
in your
income and subject to federal income tax. The tax
withholding rate
is
10% of the
taxable amount of the withdrawal. Withholding
applies only if
the
taxable amount
of the withdrawal is at least $200.
Some states also
require
withholding for
<PAGE>
state income taxes. (See "Federal Tax Matters," page
__.)
21
<PAGE>
<PAGE>
Withdrawal Requests must be in writing
to ensure that
your
instructions
regarding withholding are followed. If an
adequate election is
not
made, the
Request will be denied and no withdrawal
or partial
withdrawal
will be
processed.
After a withdrawal of all of your
total Annuity
Account
Value, or at
any time that your Annuity Account Value is
zero, all your
rights
under the
Contract will terminate.
Since IRAs are offered by this Prospectus,
reference should
be
made to
the applicable provisions of the Code
for any
additional
limitations or
restrictions on cash withdrawals.
<PAGE>
------------------------------------------------------
TELEPHONE
TRANSACTIONS
------------------------------------------------------
We will employ reasonable
procedures to confirm
that
instructions
communicated by telephone are genuine and if
we follow such
procedures
<PAGE>
we will
not be liable for any losses due to
unauthorized or
fraudulent
instructions.
However, we may be liable for such losses if
we do not follow
those
reasonable
<PAGE>
procedures. The procedures we will follow for
telephone transactions
may
include
requiring some form of personal identification
prior to acting
on
instructions
received by telephone, providing written
confirmation of
the
transaction, and/or
tape recording the instructions given by telephone.
We reserve the right to
suspend telephone
transaction
privileges at any
time, for some or all Contracts, and
for any reason.
Withdrawals
are not
permitted by telephone.
------------------------------------------------------
DEATH BENEFIT
<PAGE>
------------------------------------------------------
Payment of Death Benefit
Before the date annuity payments
commence, the death
benefit,
if any,
will be equal to the greater of: (a) the Annuity
Account Value with
an
MVA, if
applicable, as of the date the Request for
payment is received,
less
Premium
Tax, if any, or (b) the sum of Contributions
paid, less
partial
withdrawals
and/or Periodic Withdrawals, less Premium
Tax, if any. The
death
benefit will
become payable following the Company's
receipt of a
Request
from the
Beneficiary. When an Owner or the Annuitant
dies before the
annuity
commencement
<PAGE>
date and a death benefit is payable to a
Beneficiary, the death
benefit
proceeds
will remain invested in accordance with
the allocation
instructions
given by the
Owner(s) until new allocation instructions
are Requested by
the
Beneficiary or
until the death benefit is actually paid to the
Beneficiary. The
death
benefit
will be determined as of the date payments
commence; however,
on
<PAGE>
the date a
payment option is processed, amounts in
the Variable
Sub-Account
will be
Transferred to the Money Market Investment
Division unless
the
Beneficiary
<PAGE>
otherwise elects by Request. Subject to the
distribution rules
set
forth below,
payment of the death benefit may be Requested to be
made as follows:
A. Proceeds from the Variable
Sub-Account(s)
1. payment in a single sum;
or
2. payment under any
of the variable
annuity
options
provided under this
Contract.
B. Proceeds from the Guarantee Period(s)
22
<PAGE>
<PAGE>
1. payment in a single sum;
or
2. payment under any
of the annuity
options
provided
under this Contract.
In any event, no payment of benefits
provided under
the
Contract will
be allowed that does not satisfy the requirements
of Section 72(s)
of
the Code
and any other applicable federal or state laws, rules
or regulations.
Distribution Rules
1. Death of Annuitant
Upon the death of the Annuitant
while the Owner is
living,
and before
the annuity commencement date, the Company
will pay the
death
benefit to the
Beneficiary unless there is a Contingent Annuitant.
<PAGE>
If a Contingent Annuitant was
named by the
Owner(s)
prior to the
Annuitant's death, and the Annuitant dies
before the
annuity
commencement date
while the Owner and Contingent Annuitant are
living, no death
benefit
will be
payable by reason of the Annuitant's
death and the
Contingent
Annuitant will
become the Annuitant.
<PAGE>
If the Annuitant dies after the
date annuity
payments
commence and
before the entire interesthas been distributed, any
benefit payable
must be
distributed to the Beneficiary in accordance
with and at least
<PAGE>
as
rapidly as
under the payment option applicable to the
Annuitant on the
Annuitant's
date of
death.
If a corporation or other non-individual
is an Owner,
or
if the
deceased Annuitant is an Owner, the death of the
Annuitant will
be
treated as
the death of an Owner and the Contract will
be subject to the
"Death
of Owner"
provisions described below.
2. Death of Owner
If the Owner is not the Annuitant:
<PAGE>
(1) If there is a Joint Owner who is
the surviving
spouse
of the
deceased Owner, the Joint Owner will
become the Owner
and
Beneficiary
and may elect to take the death
benefit or elect
to
continue the
Contract in force.
(2) In all other cases, the Company
will pay the
death
benefit to the
Beneficiary even if a Joint Owner
(who was not the
Owner's
spouse on
the date of the Owner's death), the
Annuitant and/or
the
Contingent
Annuitant are alive at the time of the
Owner's death,
unless
the sole
Beneficiary is the deceased Owner's
surviving
spouse
<PAGE>
and the
Beneficiary elects to become the Owner and
Annuitant and
to
continue
the Contract in force.
If the Owner is not the Annuitant, and
the Owner dies
after
annuity
payments commence and before the entire
interest has been
distributed
while the
Annuitant is living, any benefit payable will
continue to
be
distributed to the
<PAGE>
Annuitant at least as rapidly as under the
payment option
applicable
on the
Owner's death. All rights granted the Owner
under the Contract
will
pass to any
surviving Joint Owner and, if none, to the Annuitant.
<PAGE>
If the Owner is the Annuitant
(Owner/Annuitant):
(1) If there is a Joint Owner who is
the surviving
spouse
of the
deceased Owner and a Contingent
Annuitant, the Joint
Owner
will become
the Owner and the Beneficiary, the
Contingent Annuitant
will
become the
Annuitant, and the Contract will continue in
force.
23
<PAGE>
<PAGE>
(2) If there is a Joint Owner who is
the surviving
spouse
of the
deceased Owner but no Contingent
Annuitant, the Joint
Owner
will become
the Owner, Annuitant and Beneficiary
and may elect to
take
the death
benefit or continue the Contract in force.
(3) In all other cases, the Company
will pay the
death
benefit to the
Beneficiary, even if a Joint Owner
(who was not the
Owner's
spouse on
the date of the Owner's death),
Annuitant and/or
Contingent
Annuitant
are alive at the time of the Owner's
death, unless the
sole
Beneficiary
is the deceased Owner's surviving
spouse and the
Beneficiary
<PAGE>
Requests
to become the Owner and Annuitant
and to continue
the
Contract in
force.
Any death benefit payable to the
Beneficiary upon an
Owner's
death will
be distributed as follows:
(1) If the Owner's surviving spouse is the
person entitled
to
receive
benefits upon the Owner's death, the
surviving spouse will
<PAGE>
be
treated
as the Owner and will be allowed to take
the death benefit
or
continue
the Contract in force; or
<PAGE>
(2) If the Beneficiary is a non-spouse
individual,
she/he
may elect,
not later than one year after the Owner's
date of death,
to
receive the
death benefit in either a single
sum or payment
under
any of the
variable or fixed annuity options
available under
the
Contract,
provided that (a) such annuity is
distributed
in
substantially equal
installments over the life or life
expectancy of
the
Beneficiary or
over a period not extending
beyond the life
expectancy
of the
Beneficiary; and (b) such distributions
begin not later
than
one year
after the Owner's date of death.
If no election
is
received by the
Company from a non-spouse
Beneficiary such
that
substantially equal
<PAGE>
<PAGE>
installments have begun not later than
one year after
the
Owner's date
of death, then the entire amount must
be distributed
within
five years
of the Owner's date of death. The death
benefit will
be
determined as
of the date the payments commence; or
(3) If a corporation or other
non-individual entity
is
entitled to
receive benefits upon the Owner's
death, the death
benefit
must be
completely distributed within five years of
the Owner's date
of
death.
Beneficiary
You may select one or more Beneficiaries.
If more than
one
Beneficiary
<PAGE>
is selected, unless you indicate otherwise, they
will share equally
in
any death
benefit payable. You may change the Beneficiary
any time before
the
Annuitant's
death.
You may, while the Annuitant is
living, change
the
Beneficiary by
Request. A change of Beneficiary will take effect
as of the date
the
Request is
<PAGE>
processed by the Schwab Annuity Service
Center, unless a
certain
date is
specified by the Owner. If the Owner dies
before the Request
was
processed, the
change will take effect as of the date the Request
was made, unless
<PAGE>
the
Company
has already made a payment or otherwise taken
action on a
designation
or change
before receipt or processing of such
Request. A
beneficiary
designated
irrevocably may not be changed without the
written consent of
that
Beneficiary,
except as allowed by law.
The interest of any Beneficiary who
dies before
the
Owner or the
Annuitant will terminate at the death of the
Beneficiary.
The
interest of any
Beneficiary who dies at the time of, or within
30 days after,
the
death of an
Owner or the Annuitant will also terminate if no
benefits have been
paid
to such
Beneficiary, unless the Owner otherwise
indicates by Request.
The
benefits will
then be paid as though the Beneficiary had
died before the
deceased
<PAGE>
Owner or
Annuitant. If no Beneficiary survives the Owner
or Annuitant,
as
applicable, the
Company will pay the death benefit proceeds to the
Owner's estate.
If the surviving spouse of an Owner is
the surviving
Joint
Owner,
the surviving spouse will
24
<PAGE>
<PAGE>
become the Beneficiary upon such Owner's death
and may elect to
take
the death
benefit or may elect to continue the Contract in
force. If there is
no
surviving
Joint Owner, and no named Beneficiary is
alive at the time at
the
time of an
Owner's death, any benefits payable will be paid
to the Owner's
estate.
Contingent Annuitant
While the Annuitant is living, the
Owner(s) may, by
Request,
designate
or change a Contingent Annuitant from time to
time. A change
of
Contingent
Annuitant will take effect as of the date the
Request is processed
at
the Schwab
Annuity Service Center, unless a certain date
is specified by
the
<PAGE>
Owner(s).
------------------------------------------------------
CHARGES AND
DEDUCTIONS
------------------------------------------------------
No deductions are made from
Contributions except for
any
applicable
Premium Tax. Therefore, the full
amount of the
Contributions
<PAGE>
(less any
applicable Premium Tax) are invested in the Contract.
As more fully described below, charges
under the Contract
are
assessed
only as deductions for Premium Tax, if
applicable, for
<PAGE>
certain
Transfers, as a
Contract Maintenance Charge, and as charges
against the assets in
the
Owner's
Variable Sub-Account(s) for our assumption of
mortality and
expense
risks. In
addition, a Market Value Adjustment may apply
to withdrawals
and
surrenders,
Transfers, amounts applied to purchase an
annuity, and
distributions
resulting
from death of the Owner or Annuitant if the
amounts held in a
Guarantee
Period
are paid out prior to the Guarantee Period Maturity
Date.
Mortality and Expense Risk Charge
We deduct a Mortality and Expense
Risk Charge from
your
Variable
Sub-Account(s) at the end of each Valuation Period
to compensate us
for
bearing
<PAGE>
certain mortality and expense risks under the
Contract. This is
a
daily charge
equal to an effective annual rate of 0.85% of
the value of the
net
assets in
your Variable Sub-Account(s). The
approximate portion of
this
charge
attributable to mortality risks is 0.68%; the
approximate portion
of
this charge
estimated to be attributable to expense risk is
0.17% of the value
of
the net
assets in your Variable Sub-Account(s). We
guarantee that this
charge
will never
increase beyond 0.85%.
The Mortality and Expense Risk Charge
is reflected in
the
Accumulation
Unit Values for each of your Variable
Sub-Accounts. Thus,
this
<PAGE>
charge will
continue to be applicable should you choose a
variable annuity
payment
option or
the periodic withdrawal option.
Annuity Account Values and annuity payments
are not affected
by
changes
in actual mortality experience incurred by us.
The mortality
risks
assumed by us
arise from our contractual obligations to
make annuity
payments
determined in
<PAGE>
accordance with the annuity tables and
other provisions
contained
in the
Contract. Thus you are assured that neither
the Annuitant's
longevity
nor an
unanticipated improvement in general life
expectancy will
<PAGE>
adversely
affect the
annuity payments under the Contract.
We bear substantial risk in
connection with the
death
benefit before
the annuity commencement date, since we
will pay a death
benefit
equal to the
greater of the Annuity Account Value
with a Market
Value
Adjustment, if
applicable, as of the later of the date of
death or the date
the
Request for
payment is received, less Premium Tax, if any;
or the sum of
the
Contributions
paid, less partial withdrawals and/or Periodic
Withdrawals, less
any
charges
under Contract less Premium Tax, if any (i.e., we
bear the risk
of
unfavorable
experience in your Variable Sub-Accounts).
The expense risk assumed is the risk
that our actual
expenses
in
<PAGE>
administering the Contracts and
25
<PAGE>
<PAGE>
the Series Account will be greater than
anticipated, or
exceed
the amount
recovered through the Contract Maintenance
Charge plus the
amount,
if any,
recovered through Transfer Fees.
If the Mortality and Expense
Risk Charge is
insufficient
to cover
actual costs and risks assumed, the loss
will fall on us.
Conversely,
if this
charge is more than sufficient, any excess will
be profit to
us.
Currently, we
expect a profit from this charge. Our expenses
for distributing
the
Contracts
will be borne by our general assets, including
any profits from
this
charge.
Contract Maintenance Charge
<PAGE>
We currently deduct a $25 annual
Contract Maintenance
Charge
from the
Annuity Account Value only on each Contract
anniversary date.
This
charge
partially covers our costs for administering the
Contracts and
the
Series
Account. Once you have selected a payment option,
this charge
will
cease to
apply other than for the Periodic Withdrawal
Option. The
Contract
<PAGE>
Maintenance
Charge is deducted from your Annuity Account
Value allocated to
the
Schwab Money
Market Investment Division. If you do not
have sufficient
Annuity
Account Value
<PAGE>
allocated to the Schwab Money Market Investment
Division to cover
the
Contract
Maintenance Charge, then the charge or any
portion thereof will
be
deducted on a
pro rata basis from all your Variable
Sub-Accounts with current
value.
If the
entire Annuity Account is held in the Guarantee
Period Fund or
there
are not
enough funds in any Variable Sub-Account to
pay the entire
charge,
then the
Contract Maintenance Charge will be deducted on
a pro rata basis
from
amounts
held in all Guarantee Periods. There is no
MVA on amounts
deducted
from a
Guarantee Period for the Contract
Maintenance Charge. The
Contract
Maintenance
Charges is currently waived for Contracts
with an Annuity
Account
Value of at
least $50,000. If your Annuity Account
Value falls below
$50,000
due to a
<PAGE>
withdrawal, the Contract Maintenance Charge will
be reinstated
until
<PAGE>
such time
as your Annuity Account Value is equal to
or greater than
$50,000.
This charge
may also be waived for Contracts issued
under certain
sponsored
arrangements. We
do not expect a profit from amounts
received from the
Contract
Maintenance
Charge.
Premium Tax
We may be required to pay state
premium taxes
or
retaliatory taxes
currently ranging from 0% to 3.5% in
connection with
Contributions
or values
under the Contracts. Currently, the premium tax
rate in New York
for
annuities
is 0%. Depending on applicable state law, we will
deduct charges for
the
premium
<PAGE>
taxes we incur with respect to a particular
Contract from
the
Contributions,
from amounts withdrawn, or from amounts
applied on the
Payment
Commencement
Date. In some states, charges for both direct
premium taxes
and
retaliatory
premium taxes may be imposed at the same or
different times
with
respect to the
same Contribution, depending on applicable state law.
<PAGE>
Transfer Fee
There will be a $10 charge for each
Transfer in
excess
of twelve
Transfers in anycalendar year. We do not expect a
profit from the
Transfer fee
<PAGE>
for excess Transfers.
Other Taxes
Under present laws, we will incur state
or local taxes
(in
addition to
the Premium Tax described above) in New York.
No charges are
currently
made for
taxes other than Premium Tax. However, we reserve
the right to
deduct
charges in
the future for federal, state, and local taxes
or the economic
burden
resulting
from the application of any tax laws that
we determine to
be
attributable to the
Contracts.
Expenses of the Eligible Funds
<PAGE>
26
<PAGE>
<PAGE>
The value of the assets in the
Investment Divisions
reflect
the value
of Eligible Fund shares and therefore the
fees and expenses
paid
by each
Eligible Fund. A complete description of the
fees, expenses,
and
deductions from
the Eligible Funds are found in the
Eligible Funds'
prospectuses.
(See "The
Eligible Funds," page __.) Current prospectuses
for the Funds can
be
obtained by
calling the Schwab Annuity Service Center at
800-838-0649, or
by
writing to the
Schwab Annuity Service Center, P.O.
Box 7806, San
Francisco,
California
94120-9327.
------------------------------------------------------
<PAGE>
PAYMENT OPTIONS
------------------------------------------------------
Periodic Withdrawal Option
The Owner may Request that all or part
of the Annuity
Account
Value be
applied to a Periodic Withdrawal Option. The
amount applied
to a
Periodic
Withdrawal is the Annuity Account Value with an MVA,
if applicable,
<PAGE>
less
Premium
Tax, if any.
In Requesting Periodic Withdrawals, the
Owner must elect:
- The withdrawal frequency of
either 12-, 6-, 3-,
<PAGE>
or
1-month
intervals;
- A withdrawal amount; a minimum of
$100 is required;
- The calendar day of the month on
which withdrawals
will
be made;
- One withdrawal option; and
- The allocation of withdrawals
from the Owner's
Variable
and/or
Fixed Sub-Account(s) as
follows:
1) Prorate the amount to
be paid across
all
Variable and
Fixed Sub-Accounts in
proportion to
the
<PAGE>
assets in
each sub-account; or
2) Select the
Variable and/or
Fixed
Sub-Account(s) from
which withdrawals will
be made. Once
the
Variable
and/or Fixed
Sub-Accounts have
been
depleted, the
Company will
automatically prorate
the
remaining
withdrawals against
all remaining
available
Variable
and/or Fixed
Sub-Accounts unless the
Owner
Requests
the selection of
another
Variable
and/or Fixed
Sub-Account.
<PAGE>
The Owner may elect to change
the withdrawal
option
and/or the
frequency once each calendar year.
While Periodic Withdrawals are being
received:
1. the Owner may continue to
exercise all
contractual
rights that
are available prior to
electing an annuity
option,
except that
no Contributions may be made;
2. for Periodic Withdrawals from
Guarantee Periods six
<PAGE>
or
more
months prior to its Guarantee
Period Maturity
Date, a
Market
Value Adjustment, if applicable,
will be assessed;
3. the Owner may keep the same
investment options as
<PAGE>
were
in
force before periodic withdrawals
began;
4. charges and fees under the
Contract continue to
apply;
and
5. maturing Guarantee Periods
renew into the
shortest
Guarantee
Period then available.
27
<PAGE>
<PAGE>
Periodic Withdrawals will cease on the
earlier of the date:
1. the amount elected to be
paid under the
option
selected has
been reduced to zero;
2. the Annuity Account Value is zero;
3. the Owner Requests that withdrawals
stop; or
4. an Owner or the Annuitant dies.
The Owner must elect one of the
following five (5)
withdrawal
options:
1. Income for a Specified
Period for at least
thirty-six
(36)
months - The Owner elects the
duration over
which
withdrawals
will be made. The amount paid
will vary based on
the
duration; or
2. Income of a Specified
Amount for at least
thirty-six
<PAGE>
(36)
months - The Owner elects the
dollar amount of
the
withdrawals.
Based on the amount elected, the
duration may vary;
or
3. Interest Only - The withdrawals
will be based on
the
amount of
interest credited to the
Guarantee Period Fund
between
each
withdrawal. Available only if
100% of the
account
<PAGE>
value is
invested in the Guarantee Period
Fund; or
4. MinimumDistribution - If thisis an
IRA contract, the
Owner
may Request minimum
distributions as specified
under
<PAGE>
Code
Section 401(a)(9); or
5. Any Other Form for a period of at
least thirty-six
(36)
months - Any
other form of Periodic Withdrawal which is
acceptable to
the
Company.
If Periodic Withdrawals cease,
the Owner may
resume
making
Contributions. The Owner may elect to
restart a Periodic
Withdrawal
program;
however, the Company may limit the number of
times the Owner
may
restart a
Periodic Withdrawal program.
Periodic withdrawals may be taxable,
subject to withholding
and
subject
to the 10% penalty tax. IRAs are subject to
complex rules
with
<PAGE>
respect to
restrictions on and taxation of
distributions, including
the
applicability of
penalty taxes. A competent tax adviser
should be consulted
before a
Periodic
Withdrawal Option is requested. (See "Federal Tax
Matters," page __.)
Annuity Date
The date annuity payments commence may
be chosen when
the
Contract is
purchased or at a later date. This date must
be at least one
year
after the
initial Contribution. In the absence of an
earlier election, the
annuity
date is
the first day of the month of the Annuitant's 90th
birthday.
If an option has not been elected
within 30 days of
the
annuity
<PAGE>
commencement date, the Annuity Account Value
held in the
Fixed
Sub-Account(s)
will be applied under Fixed Annuity
Payment Option 3,
discussed
below, to
provide payments for life with a guaranteed
period of 20 years.
The
Annuity
Account Value held in the Variable Sub-Account(s)
will be applied
under
Variable
Annuity Payment Option 1, discussed below, to
provide payments
for
life with a
<PAGE>
guaranteed period of 20 years.
Under section 401(a)(9) of the Code, a
Contract which
is
purchased and
used in connection with an Individual
Retirement Account or
with
<PAGE>
certain other
plans qualifying for special federal income tax
treatment is subject
to
complex
"minimum distribution" requirements, which
require that
distributions
under such
a plan must begin by a specific date, and
also that the
entire
interest of the
plan participant must be distributed
within certain
specified
periods under
formulas that specify minimum annual
distributions. The
application
of the
minimum distribution requirements to each
person will vary
according
to the
person's age and other circumstances. A
prospective purchaser
may
wish to
28
<PAGE>
<PAGE>
<PAGE>
consult a competent tax adviser regarding the
application of the
minimum
distribution requirements. (See "Federal Tax
Matters," page __.)
Annuity Options
An annuity option may be selected by
the Owner when
the
Contract is
purchased, or at a later date. This selection
may be changed,
by
Request, at any
time up to 30 days before the annuity date. In
the absence of
an
election,
payments will automatically commence on the
annuity date as
described
above. The
amount to be applied is the Annuity Account
Value on the
annuity
date. The
minimum amount that may be withdrawn from the Annuity
Account Value
to
purchase
an annuity payment option is $2,000 with an MVA, if
<PAGE>
applicable. If
the
amount is
less than $2,000, the Company may pay the
amount in a single
sum
subject to the
Contract provisions applicable to a partial
withdrawal. Payments may
be
elected
to be received monthly, quarterly,
semi-annually or
annually.
Payments to be
made under the annuity payment option selected must
be at least $50.
The
Company
reserves the right to make payments using the
most frequent
<PAGE>
payment
interval
which produces a payment of not less than
$50. The maximum
amount
that may be
applied under any payment option is
$1,000,000, unless
prior
<PAGE>
approval is
obtained from the Company.
A single sum payment may be elected.
If it is, then
the
amount to be
paid is the Surrender Value. If the Owner
elects a variable
annuity
with funds
from the Owner's Variable Sub-Accounts,
then the amount to
be
applied is the
Annuity Account Value held in the Variable
Sub-Account(s), as of
the
annuity
commencement date, less any applicable Premium
Tax. If the Owner
elects
a fixed
annuity with funds from the Fixed Sub-Accounts,
then the amount to
be
applied is
the Annuity Account Value held in the Fixed
Sub-Account(s), as of
the
annuity
commencement date with an MVA, if
applicable, less any
applicable
Premium Tax.
Fixed Annuity Payment Options
<PAGE>
Option 1: Income of Specified Amount
The amount applied under this option
may be paid in
equal
annual,
semiannual, quarterly or monthly installments
of the dollar
amount
elected for
not more than 240 months. Upon death of
the Annuitant,
the
Beneficiary will
begin to receive the remaining payments at the
same interval that
was
elected by
the Owner.
Option 2: Income for a Specified Period
Payments are paid annually,
semiannually, quarterly
or
monthly, as
elected, for a selected number of years not to
exceed 240 months.
Upon
death of
the Annuitant, the Beneficiary will begin
to receive the
remaining
<PAGE>
payments at
the same interval that was elected by the Owner.
Option 3: Fixed Life Annuity with Guaranteed
Period
This option provides for monthly
payments during a
designated
period
and thereafter throughout the lifetime of
the Annuitant.
The
designated period
may be 5, 10, 15 or 20 years. Upon death of the
Annuitant, for
each
remaining
<PAGE>
designated period, the amounts payable under this
payment option will
be
paid to
the Beneficiary.
Option 4: Fixed Life Annuity
<PAGE>
This annuity is payable monthly during
the lifetime of
the
Annuitant,
terminating with the last payment due prior to
the death of
the
Annuitant. Since
no minimum number of payments is guaranteed, this
option may offer
the
maximum
level of monthly payments of the annuity options. It
is possible that
29
<PAGE>
<PAGE>
only one payment may be made if the Annuitant died
before the date
on
which the
second payment was due. Upon the death of the
Annuitant, all
payments
cease and
no amounts are payable to the Beneficiary.
Option 5: Any Other Form
This option allows an Owner the ability
to choose any
other
form of
annuity which is acceptable to the Company.
Variable Annuity Payment Options
Option 1: Variable Life Annuity with
Guarantee Period
This option provides for
payments during a
designated
period and
thereafter throughout the life time of the
Annuitant. The
designated
period may
be 5, 10, 15 or 20 years. Upon death of the
Annuitant, for
<PAGE>
each
remaining
designated period, the amounts payable under this
payment option will
be
paid to
the Beneficiary.
Option 2: Variable Life Annuity
This annuity is payable during the
lifetime of
the
Annuitant. The
annuity terminates with the last payment due
prior to the
death
<PAGE>
of the
Annuitant. Since no minimum number of payments
is guaranteed,
this
option may
offer the maximum level of monthly payments
of the annuity
options. It is
possible that only one payment may be made if
the Annuitant died
<PAGE>
before
the date
on which the second payment was due.
Upon the death of
the
Annuitant, all
payments cease and no amounts are payable to the
Beneficiary.
Variable annuity payment options
are subject to
the
following
provisions:
Amount of First Payment
The first payment under a variable
annuity payment option
will
be based
on the value of the amounts held in each
Variable Sub-Account
on
the 5th
Valuation Date preceding the annuity commencement
date. It will
be
determined by
<PAGE>
applying the appropriate rate to the amount
applied under the
payment
option.
Annuity Units
The number of Annuity Units paid to the
Annuitant for
each
Variable
Sub-Account is determined by dividing the
amount of the first
monthly
payment by
its Accumulation Unit Value on the 5th Valuation
Date preceding
the
date the
first payment is due. The number of Annuity Units
used to calculate
each
payment
for a Variable Sub-Account remains fixed
during the Annuity
Payment
Period.
Amount of Payments after the First
Payments after the first will vary
depending upon
the
<PAGE>
investment
experience of the Investment Divisions. The
subsequent amount
paid
from each
sub-account is determined by multiplying (a) by
(b) where (a) is
the
number of
sub-account Annuity Units to be paid and
(b) is the
sub-account
Annuity Unit
value on the 5th Valuation Date preceding the
date the annuity
payment
is due.
The total amount of each variable annuity
payment will be
<PAGE>
the
sum of the
variable annuity payments for each Variable
Sub- Account. The
Company
guarantees
that the dollar amount of each payment after the
first will not
be
<PAGE>
affected by
variations in expenses or mortality experience.
30
<PAGE>
<PAGE>
Transfers After the Annuity Commencement Date
Once annuity payments have begun, no
Transfers may be made
from
a fixed
annuity payment option to a variable annuity
payment option,
or
vice versa;
however, for variable annuity payment options,
Transfers may
be
made among
Investment Divisions. Transfers after the annuity
commencement date
will
be made
by converting the number of Annuity Units being
Transferred to
the
number of
Accumulation Units of the Variable Sub-Account
to which the
Transfer
is made.
The result will be that the next annuity payment,
if it were made
at
that time,
would be the same amount that it would have
been without
the
<PAGE>
Transfer.
Thereafter, annuity payments will reflect
changes in the value
of
the new
Annuity Units.
***
For annuity options involving life
income, the actual
age
and/or sex of
the Annuitant will affect the amount of each
payment. We reserve
the
right to
ask for satisfactory proof of the Annuitant's
age. We may delay
<PAGE>
annuity
payments
until satisfactory proof is received.
Since payments to
older
Annuitants are
expected to be fewer innumber, the amount of each
annuity payment
under a
<PAGE>
selected annuity form will be greater for older
Annuitants than
for
younger
Annuitants.
If the age or sex of the Annuitant has
been misstated,
the
payments
established will be made on the basis of the
correct age or sex.
If
payments
were too large because of misstatement,
the difference
with
interest may be
deducted by the Company from the next payment
or payments. If
payments
were too
small, the difference with interest may be added
by the Company
to
the next
payment. This interest is at an annual effective
rate which will
not
be less
than the Contractual Guarantee of a Minimum Rate of
Interest.
The Payment Commencement Date and
annuity options
available
for IRAs
<PAGE>
may also be controlled by endorsements, the
plan documents,
or
applicable law.
Once payments start under the annuity
form selected by
the
Owner: (a)
no changes can be made in the annuity
form, (b) no
additional
Contributions will
be accepted under the Contract, and
(c) no further
withdrawals,
other than
withdrawals made to provide annuity benefits, will be
allowed.
***
A portion or the entire amount of the
annuity payments may
be
taxable
as ordinary income. If, at the time the annuity
payments begin,
we
have not
received a proper written election not to have
federal income
<PAGE>
taxes
withheld, we
must by law withhold such taxes from the
taxable portion of
such
annuity
payments and remit that amount to the federal
government
(an
election not to
have taxes withheld is not permitted
for certain
Qualified
Contracts). State
income tax withholding may also apply.
(See "Federal
Tax-Matters,"
below.)
<PAGE>
------------------------------------------------------
FEDERAL TAX MATTERS
------------------------------------------------------
Introduction
<PAGE>
The following discussion is a general
description of
federal
income tax
considerations relating to the Contracts and is
not intended as
tax
advice.
Further, this discussion is based on the
assumption that the
Contract
qualifies
as an annuity contract for federal income
tax purposes.
This
discussion is not
intended to address the tax consequences
resulting from all of
the
situations in
which a person may be entitled to or may
receive a
distribution
under the
Contract. Any person concerned about these
tax implications
should
consult a
competent tax adviser before initiating any
transaction.
This
discussion is
based upon our
<PAGE>
31
<PAGE>
<PAGE>
understanding of the present federal income
tax laws as they
are
currently
interpreted by the Internal Revenue Service. No
representation is
made
as to the
likelihood of the continuation of the present
federal income tax
laws
or of the
current interpretation by the Internal Revenue
Service. Moreover,
no
attempt has
been made to consider any applicable state or other
tax laws.
The Contract may be purchased on
a non-tax
qualified
basis
("Non-Qualified Contract") or purchased and used
in connection
with
IRAs. The
ultimate effect of federal income taxes on
the amounts held
under a
Contract, on
annuity payments, and on the economic
benefit to you, the
<PAGE>
Annuitant,
or the
Beneficiary may depend on the type of
Contract, and on the
tax
status of the
individual concerned. In addition, certain
requirements must
be
satisfied in
purchasing an IRA and receiving distributions from
an IRA in order
to
continue
receiving favorable tax treatment.
Therefore, purchasers of
IRAs
should seek
competent legal and tax advice regarding the
suitability of
the
<PAGE>
Contract for
their situation, the applicable
requirements, and the
tax
treatment of the
rights and benefits of the Contract. The
following discussion
assumes
that an
<PAGE>
IRA is purchased with proceeds from and/or
Contributions that
qualify
for the
intended special federal income tax treatment.
Tax Status
The Company is taxed as a life
insurance company
under
Part I of
Subchapter L of the Code.
Taxation of Annuities
In General
Section 72 of the Code governs taxation
of annuities
in
general. An
Owner who is a natural person generally is not
taxed on increases
(if
any) in
the value of an Annuity Account Value until
distribution occurs
by
withdrawing
all or part of the Annuity Account Value (e.g.,
withdrawals or
annuity
payments
<PAGE>
under the annuity form elected). However,
under certain
circumstances,
the Owner
may be subject to taxation currently. In
addition, an
assignment,
pledge, or
agreement to assign or pledge any portion of the
Annuity Account
Value
generally
will be treated as a distribution. The taxable
portion of a
distribution
(in the
form of a single sum payment or an annuity)
is taxable as
ordinary
income. An
IRA Contract may not be assigned as collateral.
The Owner of any annuity contract who
is not a natural
person
(e.g. a
corporation) generally must include in income
any increase in
the
excess of the
Annuity Account Value over the "investment in
the contract"
(discussed
<PAGE>
below)
during each taxable year. The rule does not
apply where the
non-natural
person
is the nominal owner of a Contract and the
beneficial owner is a
natural
person.
The rule also does not apply in the following
circumstances:
(1)
where the
annuity Contract is acquired by the estate of a
decedent, (2) where
the
Contract
is held under an IRA, (3) where the Contract
is a qualified
funding
<PAGE>
asset for a
structured settlement, and (4) where the
Contract is purchased
on
behalf of an
employee upon termination of a qualified plan. A
prospective Owner
that
is not a
<PAGE>
natural person may wish to discuss these matters
with a competent
tax
adviser.
The following discussion generally
applies to a
Contract
owned by a
natural person.
Withdrawals
In the case of a withdrawal under
an IRA,
including
withdrawals under
the Periodic Withdrawal Option, a ratable
portion of the
amount
received may be
non-taxable. The amount of the non-taxable
portion is
generally
determined by
the ratio of the "investment in the contract" to
the individual's
total
accrued
benefit under the retirement plan. The
"investment in the
contract"
generally
equals the amount of any nondeductible
Contributions paid by or
on
behalf of any
individual. Special tax rules may be
available for certain
distributions
<PAGE>
<PAGE>
from an
IRA.
32
<PAGE>
<PAGE>
With respect to Non-Qualified
Contracts, partial
withdrawals,
including
Periodic Withdrawals, are generally treated as
taxable income to
the
extent that
the Annuity Account Value immediately
before the
withdrawal
exceeds the
"investment in the contract" at that time. If a
partial withdrawal
is
made from
a Guarantee Period which is subject to a
Market Value
Adjustment,
then the
Annuity Account Value immediately before the
withdrawal will not
be
altered to
take into account the Market Value Adjustment.
As a result,
for
purposes of
determining the taxable portion of the partial
withdrawal, the
Annuity
Account
Value will not reflect the amount, if any,
<PAGE>
deducted from
or
added to the
Guarantee Period due to the Market Value Adjustment.
Full surrenders
are
treated
as taxable income to the extent that the amount
received exceeds
the
"investment
in the contract." The taxable portion of any
annuity payment
is
taxed at
ordinary income tax rates.
Annuity Payments
<PAGE>
Although the tax consequences may vary
depending on
the
annuity form
elected under the Contract, in general, only the
portion of the
annuity
payment
that represents the amount by which the
Annuity Account
<PAGE>
Value
exceeds the
"investment in the contract" will be taxed; after
the investment in
the
contract
is recovered, the full amount of any additional
annuity payments
is
taxable. For
fixed annuity payments, in general there
is no tax on the
portion
of each
payment which represents the same ratio that the
"investment in
the
contract"
bears to the total expected value of the
annuity payments for
the
term of the
payments; however, the remainder of each
annuity payment is
taxable.
Once the
investment in the Contract has been fully
recovered, the
full
amount of any
additional annuity payments is taxable. If
the annuity
payments
cease as a
result of an Annuitant's death before full
recovery of
the
"investment in the
contract," you should consult a
competent tax
<PAGE>
adviser
regarding the
<PAGE>
deductibility of the unrecovered amount.
Penalty Tax
In the case of a distribution
pursuant to a
Non-Qualified
Contract,
there may be imposed a federal income tax
penalty equal to 10%
of
the amount
treated as taxable income. In general,
however, there is no
penalty
tax on
distributions: (1) made on or after the date on
which the recipient
of
payments
under the Contract attains age 59 1/2; (2)
made as a result
of
death or
disability of the recipient of payments under
the Contract; or
(3)
received in
substantially equal periodic payments as a life
annuity or a joint
and
survivor
annuity for the lives or life expectancies
<PAGE>
of the Owner
and a
"designated
beneficiary." Other exemptions or tax
penalties may apply
to
certain
distributions pursuant to an IRA. For more
details regarding
these
exemptions or
penalties consult a competent tax adviser.
Taxation of Death Benefit Proceeds
Amounts may be distributed from the
Contract because of
the
<PAGE>
death of an
Owner or the Annuitant. Generally such amounts
are includible in
the
income of
the recipient as follows: (1) if distributed in
a lump sum, they
are
taxed in
<PAGE>
the same manner as a full surrender, as described
above, or (2)
if
distributed
under an annuity form, they are taxed in the
same manner as
annuity
payments, as
described above.
Distribution-at-Death Rules
In order to be treated as an
annuity contract,
the
terms of the
Contract must provide the following two distribution
rules: (A) if
any
Contract
Owner dies on or after the date annuity
payments commence, and
before
the entire
interest in the Contract has been distributed,
the remainder of
his
interest
will not be distributed under a slower distribution
schedule than
that
provided
for in the method in effect on the Contract
Owner's death;
and
(B) if any
<PAGE>
Contract Owner dies before the date
annuity payments
commence,
his entire
interest must generally be distributed within five
years after the
date
of death
provided that if such interest is payable to
a designated
Beneficiary,
then such
interest may be made over the life of
that designated
Beneficiary
or over a
period not extending beyond the life expectancy of
that Beneficiary,
so
long as
payments commence within one year after the
Contract Owner's death.
If
the sole
designated Beneficiary
33
<PAGE>
<PAGE>
is the spouse of the Contract Owner, the Contract
may be continued
in
the name
of the spouse as Contract Owner. The designated
Beneficiary is
the
natural
person designated by the terms of the
Contract or by the
Contract
Owner as the
individual to whom ownership of the contract
passes by reason of
the
Contract
Owner's death. If the Contract Owner is not an
individual, then
for
purposes of
the distribution at death rules, the
Primary Annuitant
is
considered the
Contract Owner. In addition, when the
Contract Owner is not
an
individual, a
change in the Primary Annuitant is treated as
the death of the
Contract
Owner.
<PAGE>
Transfers, Assignments, or Exchanges
A Transfer of ownership of a Contract, the
designation of
an
Annuitant,
Payee or other Beneficiary who is not also
the Owner, or
the
exchange of a
Contract may result in adverse tax
consequences to the Owner
that
are not
discussed herein. An Owner contemplating
any such
designation,
transfer,
assignment, or exchange of a Contract should
contact a competent
<PAGE>
tax
adviser
with respect to the potential tax effects of such a
transaction.
Multiple Contracts
All deferred, non-qualified annuity
contracts that
<PAGE>
are
issued by the
Company (or our affiliates) to the same Owner
during any calendar
year
will be
treated as one annuity contract for purposes
of determining
the
amount
includible in gross income under section 72(e)
of the Code.
Amounts
received
under any such Contract may be taxable (and may
be subject to the
10%
Penalty
Tax) to the extent of the combined income in all
such Contracts.
In
addition,
the Treasury Department has specific authority to
issue regulations
that
prevent
the avoidance of section 72(e) through the
serial purchase of
annuity
contracts
or otherwise. Congress has also indicated
that the Treasury
Department
may have
authority to treat the combination purchase
of an immediate
annuity
contract and
separate deferred annuity contracts as a
single annuity
<PAGE>
contract
<PAGE>
under its
general authority to prescribe rules as may
be necessary to
enforce
the income
tax laws.
Withholding
Annuity distributions generally
are subject to
withholding
for the
recipient's federal income tax liability
at rates that
vary
according to the
type of distribution and the recipient's
tax status.
Recipients,
however,
generally are provided the opportunity to
elect not to have
tax
withheld from
distributions. Certain distributions from IRAs
are subject to
mandatory
federal
income tax withholding.
Possible Changes in Taxation
<PAGE>
In past years, legislation has been
proposed that would
have
adversely
modified the federal taxation of certain
annuities. For
example,
one such
proposal would have changed the tax
treatment of
non-qualified
annuities that
did not have "substantial life contingencies" by
taxing income as it
is
credited
to the annuity. There is always the
possibility that the
<PAGE>
tax
treatment of
annuities could change by legislation or other
means (such as
IRS
regulations,
revenue rulings, judicial decisions, etc.).
Moreover,it is also
possible that
<PAGE>
any change could be retroactive (that is,
effective prior to
the
date of the
change).
Section 1035 Exchanges
Code Section 1035 provides that no gain
or loss shall
be
recognized on
the exchange of one annuity contract for
another. A
replacement
contract
obtained in a tax-free exchange of contracts
succeeds to
the
status of the
original contract. Special rules apply to
Contracts issued prior
to
August 14,
1982. Prospective Owners wishing to take
advantage of a Section
1035
exchange
should consult their tax adviser.
Individual Retirement Annuities
<PAGE>
The Contract may be used with IRAs as
described in Section
408
of the
Code. Section 408 of the
34
<PAGE>
<PAGE>
Code permits eligible individuals to
contribute to an
individual
retirement
program known as an Individual Retirement
Annuity. Also,
certain
kinds of
distributions from certain types of
qualified and
non-qualified
retirement plans
may be "rolled over" following the rules set
out in the Code
to
maintain
favorable tax treatment, to an Individual
Retirement Annuity.
The
sale of a
Contract for use with an IRA may be subject
to special
disclosure
requirements
of the Internal Revenue Service. Purchasers of
the Contract for
use
with IRA's
will be provided with supplemental information
required by the
Internal
Revenue
Service or other appropriate agency. Such
<PAGE>
purchasers will have
the
right to
revoke their purchase within seven days of
purchase of the IRA
Contract.
Various tax penalties may apply to
contributions in excess
of
specified
limits, aggregate distributions in excess
of $150,000
annually,
distributions
that do not satisfy specified requirements,
and certain
other
transactions. The
Contract will be amended as necessary to
conform to the
<PAGE>
requirements
of the
Code. Purchasers should seek competent
advice as to the
suitability
of the
Contract for use with IRA's.
<PAGE>
If a Contract is issued in
connection with an
employer's
Simplified
Employee Pension ("SEP") plan, Owners,
Annuitants
and
Beneficiaries are
cautioned that the rights of any person
to any of the
benefits
under the
Contract may be subject to the terms and
conditions of the
plan
itself,
regardless of the terms and conditions of the
Contract.
If a Contract is purchased to fund an IRA
the Annuitant
must
also be
the Owner. In addition, if a Contract is
purchased to fund an
IRA,
minimum
distributions must commence not later than
April 1st of
the
calendar year
following the calendar year in which you attain
age 70 1/2. You
should
consult
your tax adviser concerning these matters.
The Contract and prototype IRA
endorsement have been
submitted
<PAGE>
for IRS
<PAGE>
approval and determination that they are
acceptable under
Section
408 of the
Code, so that each individual who purchases a
Contract with an
IRA
endorsement
will be considered to have adopted a retirement
savings program
that
satisfies
the requirements of Section 408 of the Code.
The IRS approval
is a
determination
only as to the form of the Contract and does
not represent
a
determination of
the merits of the Contract.
At the time the Initial
Contribution is paid, a
prospective
purchaser
must specify whether he or she is purchasing a
Non-Qualified Contract
or
an IRA.
If the initial Contribution is derived from an
exchange or surrender
of
<PAGE>
another
annuity contract, we may require that the
prospective
purchaser
provide
information with regard to the federal income tax
status of the
previous
annuity
contract. We will require that persons
purchase separate
Contracts
if they
desire to invest monies qualifying for
different annuity tax
treatment
under the
Code. Each such separate Contract would require
the minimum
initial
<PAGE>
Contribution
stated above. Additional Contributions under
a Contract must
qualify
for the
same federal income tax treatment as
the initial
Contribution
under the
<PAGE>
Contract; we will not accept an additional
Contribution
under a
Contract if the
federal income tax treatment of such
Contribution would be
different
from that
of the initial Contribution.
Seek Tax Advice
The foregoing discussion of the
federal income tax
consequences
is only
a brief summary and is not intended as tax
advice. Further,
the
federal income
tax consequences discussed herein reflect our
understanding of
current
law and
the law may change. Federal estate tax
consequences and state and
local
estate,
inheritance, and other tax consequences of
ownership or receipt
of
distributions
under a Contract depend on the individual
circumstances of
each
Owner or
recipient of the distribution. A COMPETENT TAX
ADVISER SHOULD
BE
CONSULTED FOR
<PAGE>
<PAGE>
FURTHER INFORMATION.
35
<PAGE>
<PAGE>
------------------------------------------------------
ASSIGNMENTS OR
PLEDGES
------------------------------------------------------
Generally, rights in the Contract may
be assigned or
pledged
for loans
at any time during the life of the Annuitant;
however, if
the
Contract is an
IRA, the Owner may not assign the Contract as
collateral.
If a non-IRA Contract is assigned,
the interest of
the
assignee has
priority over the interest of the Owner and
the interest of
the
Beneficiary. Any
amount payable to the assignee will be paid in a
single sum.
A copy of any assignment must be submitted
to the Company
<PAGE>
at
the Schwab
Annuity Service Center. Any assignment is subject to
any action taken
or
payment
made by the Company before the assignment
was processed.
The
Company is not
responsible for the validity or sufficiency of any
assignment.
If any portion of the Annuity Account
Value is assigned
or
pledged for
a loan, it may be treated as a distribution. A
competent tax
adviser
<PAGE>
should be
consulted for further information.
------------------------------------------------------
PERFORMANCE DATA
<PAGE>
------------------------------------------------------
From time to time, we may advertise
yields and
average
annual total
returns for the Investment Divisions. In
addition, we
may
advertise the
effective yield of the Schwab Money Market
Investment Division.
These
figures
will be based on historical information and
are not intended
to
indicate future
performance.
The yield of the Schwab Money
Market Investment
Division
refers to the
annualized income generated by an
investment in that
Investment
Division over a
<PAGE>
specified seven-day period. The yield is
calculated by assuming
that
the income
generated for that seven-day period is
generated each
seven-day
period over a
52-week period and is shown as a percentage of
the investment.
The
effective
yield is calculated similarly but, when
annualized, the
income
earned by an
investment in that Investment Division
is assumed to
be
reinvested. The
effective yield will be slightly higher
than the yield
because
of the
compounding effect of this assumed reinvestment.
The yield of an Investment Division
(other than the
Schwab
Money Market
Investment Division) refers to the annualized
income generated by
an
<PAGE>
investment
in that Investment Division over a specified
thirty-day period.
The
yield is
calculated by assuming that the income
generated by the
investment
during that
thirty-day period is generated each
thirty-day period over
a
twelve-month period
and is shown as a percentage of the investment.
The yield calculations do not reflect
the effect of
any
Premium Tax
<PAGE>
that may be applicable to a particular Contract.
To the extent
that
premium
taxes are applicable to a particular Contract,
the yield of
that
Contract will
be reduced. For a description of the methods
used to determine
<PAGE>
yield
and total
returns, see the Statement of Additional Information.
Investment Division Effective
Yield
Money Market 4.10%
The average annual total return of
an Investment
Division
refers to
return quotations assuming an investment has
been held in
the
Investment
Division for various periods of time including,
but not limited
to,
a period
measured from the date the Investment
Division commenced
operations.
When an
Investment
36
<PAGE>
<PAGE>
Division has been in operation for 1, 5, and 10
years, respectively,
the
average
annual total return for these periods will be
provided. The
average
annual total
return quotations will represent the average
annual compounded
rates
of return
that would equate an initial investment of
$1,000 to the
redemption
value of
that investment (excluding Premium Tax) as of
the last day
of
each of the
periods for which total return quotations
are provided.
For
additional
information regarding yields and total returns
calculated using
the
standard
formats briefly described herein, please refer
to the Statement
of
<PAGE>
Additional
Information.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Investment Division
One
Three Five
Since Inception Date of
Year
Year
Year
Inception Underlying Fund
<PAGE>
Alger American
Growth Portfolio 12.39%
15.18%
15.60%
17.58%
<PAGE>
1/9/89
Alger American Small
Capitalization Portfolio
3.30%
11.89% 10.04%
17.70%
9/21/88
American Century VP Capital
Appreciation
-5.11%
6.49% 5.23%
9.78%
11/20/87
American Century VP International 13.35%
N/A
N/A
12.17%
5/1/94
<PAGE>
Berger IPT-Small Company N/A
N/A
N/A
1.73%
4/15/96
Growth Fund
Federated American Leaders
Fund II 20.55%
N/A
N/A
17.01%
2/10/94
Federated Fund for U.S.
Government Securities 3.32%
N/A
N/A
4.71%
3/28/94
Federated Utility Fund II 10.62%
N/A
N/A
<PAGE>
9.67%
2/10/94
INVESCO VIF-High
Yield Portfolio 15.60%
N/A
N/A
12.61%
5/1/94
INVESCO VIF-Industrial
<PAGE>
Income Portfolio 21.25%
N/A
N/A
20.41%
8/1/94
<PAGE>
INVESCO VIF-Total
Return Portfolio 11.23%
N/A
N/A
12.98%
6/1/94
Janus Aspen Aggressive
Growth Portfolio
7.04%
15.97% N/A
20.27%
9/13/93
Janus Aspen
Growth Portfolio
17.45%
15.57% N/A
15.21%
9/13/93
Janus Aspen Worldwide
<PAGE>
Growth Portfolio
27.95%
17.59% N/A
22.13%
9/13/93
Lexington Emerging Markets Fund
6.55%
N/A
N/A
0.56%
3/30/94
Montgomery Variable Series:
Growth Fund N/A
N/A
N/A
26.14%
2/9/96
Montgomery Variable Series:
International Small-Cap Fund N/A
N/A
N/A
<PAGE>
-2.54%
11/27/96
SAFECO RST Equity Portfolio
23.73%
19.44% 18.25%
13.45%
7/21/87
37
<PAGE>
<PAGE>
<PAGE>
Schwab Asset Director-High
Growth Portfolio N/A
N/A
N/A
3.54%
11/1/96
Schwab S&P 500 Portfolio N/A
N/A
N/A
5.16%
11/1/96
SteinRoe Capital Appreciation
Fund
25.87%
11.84% 16.37%
16.50%
1/1/89
Strong Discovery Fund II
-0.04%
7.92% N/A
<PAGE>
11.30%
5/8/92
Van Eck Worldwide Hard Assets
Fund
17.04%
6.72% 13.54%
7.25%
9/1/89
</TABLE>
<PAGE>
Performance information for any
Investment Division
reflects
only the
performance of a hypothetical Contract under
which Annuity
Account
Value is
<PAGE>
allocated to an Investment Division during a
particular time period
on
which the
calculations are based. Performance information
should be considered
in
light of
the investment objectives and policies and
characteristics of
the
Eligible Funds
in which the Investment Division invests,
and the market
conditions
during the
given time period, and should not be considered as
a representation
of
what may
be achieved in the future.
Reports and promotional literature may
also contain
other
information
including (1) the ranking of any Investment
Division derived
from
rankings of
variable annuity separate accounts or their
investment
products
tracked by
Lipper Analytical Services, Inc., VARDS,
Morningstar, Value
Line,
<PAGE>
IBC/Donoghue's
Money Fund Report, Financial Planning
Magazine, Money
Magazine,
Bank Rate
Monitor, Standard & Poor's Indices, Dow
Jones Industrial
Average,
and other
rating services, companies, publications, or
other persons who
rank
separate
accounts or other investment products on overall
performance or
other
criteria,
and (2) the effect of tax-deferred compounding on
investment returns,
or
returns
in general, which may be illustrated by
graphs, charts, or
otherwise,
and which
may include a comparison, at various points
in time, of the
return
from an
investment in a Contract (or returns
in general)
on a
tax-deferred basis
<PAGE>
(assuming one or more tax rates) with the return
on a currently
taxable
basis.
Other ranking services and indices may be used.
We may from time to time also
disclose
cumulative
(non-annualized)
total returns for the Investment Divisions. We
may from time
to
time also
disclose yield and standard total returns
for any or all
Investment
Divisions.
<PAGE>
We may also advertise performance
figures for the
Investment
Divisions
based on the performance of an Eligible Fund
prior to the time
the
Series
Account commenced operations.
<PAGE>
For additional information
regarding the
calculation
of other
performance data, please refer to the
Statement of
Additional
Information.
------------------------------------------------------
DISTRIBUTION OF
THE
CONTRACTS
------------------------------------------------------
Charles Schwab & Co., Inc.
("Schwab") is the
principal
underwriter and
distributor of the Contracts. Schwab is
registered with the
Securities
and
Exchange Commission as a broker/dealer and is a
member of the
National
Association of Securities Dealers, Inc. ("NASD").
Its principal
offices
are
located at 101 Montgomery, San Francisco, California
94104, telephone
<PAGE>
800-838-0649.
Certain administrative services are
provided by Schwab
to
assist the
Company in the processing of the Contracts,
which services are
described
in
written agreements between Schwab and the
Company. The Company
has
agreed to
indemnify Schwab (and its agents, employees,
and controlling
persons)
for
certain damages arising out of the sale of
the Contracts,
including
those
arising under the securities laws.
------------------------------------------------------
SELECTED FINANCIAL
DATA
------------------------------------------------------
<PAGE>
First GWL&A was incorporated on April
9, 1996 and had
no
operations
until receipt of its certificate of
authority from
the
Superintendent of
Insurance of New York on May 28, 1997.
Please see the
financial
statements of
First Great-West Life & Annuity Insurance
Company included
elsewhere
in this
Prospectus for information related to its financial
condition.
<PAGE>
MANAGEMENT'S
DISCUSSION AND ANALYSIS
OF
FINANCIAL
CONDITION AND
RESULTS OF
OPERATIONS
<PAGE>
The Company
The Company commenced operations as a New
York domiciled
life
insurer
as of May 28, 1997. Accordingly, as of the date of
this Prospectus,
the
Company
has not had a significant operating history.
The Company
will
operate in one
business segment as a provider of life, health and
annuity products
to
groups of
individuals associated with employers or
distributors; however,
the
business
operations of First GWL&A will be segregated
into two major
business
units: the
Employee Benefits division, which
distributes life,
health,
disability income
insurance and 401(k) products to
employee groups,
primarily to
<PAGE>
small-to-mid-sized corporations; and the
Financial
Services
Division, which
distributes accumulation and payout annuity
products for
both
group and
individual clients, primarily in the
public\non-profit sectors,
as
well as
insurance products for individual clients.
Liquidity and Capital Resources
The principal short- and long-term
liquidity needs of
the
Company will
be closely managed to satisfy policyholder
benefits. The
liquidity
needs of the
Company will be closely managed through cash
flow matching
of
assets and
liabilities, and the forecasting of earned
and required
yields
to ensure
<PAGE>
consistency between policyholder requirements and
the yield of
assets.
Regulation and Reserves
The Company is subject to regulation and
supervision by
the
insurance
departments of the state in which it is
licensed. This
regulation
covers a
variety of areas, including policy reserve
requirements, adequacy
of
company
<PAGE>
capital and surplus, operational standards,
and financial
accounting
policies
and procedures.
Pursuant to state insurance laws and
regulations, the
Company is
<PAGE>
obligated to hold policy reserves to meet its
obligations under
all
outstanding
insurance contracts. These reserves are
based on a number
of
assumptions as to
future experience. Neither the reserve
requirements nor the
other
aspects of
state insurance regulation provide absolute
protection to holders
of
insurance
contracts if the Company were to experience
unexpected losses
(e.g.,
infectious
diseases or catastrophic investment losses).
Competition
The Company is engaged in a business
that is highly
competitive
due to
the large number of
39
<PAGE>
<PAGE>
insurance companies and other entities
competing in
marketing,
administering,
and selling insurance products. There are
approximately
2,300
insurers in the
life insurance business in the United States.
Segment Information
The Company operates in one business
segment as a
provider
of life,
health and annuity products to groups of
individuals associated
with
employers
or distributors.
Employees and Facilities
The Company has an administrative
services agreement
with
Great-West
Life & Annuity Insurance Company, to provide
<PAGE>
administrative
support
for all
aspects of the Company's business. Great-West
Life & Annuity
has
approximately
4,300 employees in its U.S. operations.
The Company's
executive
offices are
located at 125 Wolf Road, Suite 110, Albany, New York
12205.
State Regulation
<PAGE>
As a life insurance company organized and
operated under
New
York law,
First GWL&A is subject to provisions governing
such companies
and
regulation by
the New York Superintendent of Insurance.
<PAGE>
First GWL&A's books and accounts are
subject to review
and
examination
by the New York Division of Insurance at
any time, and a
full
examination of its
operations is conducted triennially.
In addition, First GWL&A is subject to
comprehensive
and
detailed
regulation and supervision by the supervisory
agencies in
each
jurisdiction in
which it conducts business. Each state's
supervisory
agency
has broad
administrative authority which includes, but is
not limited to,
the
power to
regulate licenses to transact business,
trade practices,
agent
licensing, policy
<PAGE>
forms, claims practices, underwriting
practices, reserve
requirements,
fixing
maximum interest rates on life insurance
policy loans and
minimum
rates for
accumulation of surrender values, the form
and content of
required
financial
statements and the type and amounts of
investments permitted.
First
GWL&A is
required to file detailed annual reports with
supervisory agencies
in
each of
the jurisdictions in which it does business and
its accounts
are
subject to
examination by such agencies at regular
intervals. Under
insurance
guaranty fund
laws in most states, insurers can be
assessed up to
prescribed
limits for
insurance contract losses incurred by insolvent
<PAGE>
companies.
In addition, most jurisdictions,
including New
York,
regulate
affiliated groups of insurers such as
First GWL&A and
its
affiliates under
insurance holding company legislation. Under
such laws,
intercorporate
transfers
of assets and dividend payments from insurance
subsidiaries may
be
subject to
prior notice or approval, depending on the size of
such transfers
and
<PAGE>
payments
in relation to the financial position of the
company making
the
transfer.
Changes in control also are regulated under these
laws.
Although the federal government
generally does not
<PAGE>
directly
regulate
the business of insurance, federal
initiatives often have
an
impact on the
business in a variety of ways. Current and
proposed federal
measures
which may
significantly affect First GWL&A's insurance
business include
employee
benefits
regulation, controls on medical care
costs, insurance
reform,
managed care
regulation, medical entitlement programs (e.g.,
Medicare), removal
of
barriers
preventing banks from engaging in the
insurance and mutual
fund
businesses, the
taxation of insurance companies and the tax
treatment of
insurance
products.
The Securities and Exchange
Commission regulates
certain
separate
accounts of First GWL&A and the mutual funds
used as funding
vehicles
for those
accounts.
<PAGE>
<PAGE>
Directors and Officers
Set forth below is information
concerning the
Company's
directors and
executive officers, together
40
<PAGE>
with their principal occupation for the past
five years.
Unless
otherwise
indicated, all of the directors and executive
officers have been
engaged
for not
less than five years in their present principal
occupation or
in
another
executive capacity with the companies or firms
identified.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Directors Principal
Occupation Last
5 Years
<PAGE>
Marcia D. Alazraki Partner,
Simpson Thacher
& Bartlett
James Balog
Director of
Great-West since March 1993;
previously
Chairman,
Lambert
Brussels Capital
Corporation
James W. Burns, O.C.
Chairman of the
Boards of Lifeco1 and GWL;
Deputy
<PAGE>
Chairman,
PCC2
Paul Desmarais, Jr.
Chairman and Co-Chief
Executive Officer, PCC;
Chairman, PFC3
<PAGE>
Robert Gratton
Chairman of the Board
of Great-West; President
and
Chief Executive
Officer,
PFC
N. Berne Hart
Director of Great-West
since February 1992;
previously Chairman,
United
Banks of Colorado,
Inc.
Stuart Z. Katz
Partner, Fried,
Frank, Harris, Shriver &
Jacobson
William T. McCallum
President and
Chief Executive Officer,
Great-West;
President and
Chief
Executive Officer
(U.S. Operations), GWL
<PAGE>
Brian E. Walsh
Partner,
Trinity L.P. since January
1996;
previously Managing
Director and
Co-head, Global Investment
Bank, Bankers Trust
Company
1 Great-West Lifeco Inc.
2 Power Corporation of Canada
3 Power Financial Corporation
<PAGE>
Executive Officers Principal
Occupation Last 5 Years
------------------
---------------------------------
William T. McCallum President and
Chief Executive
Officer of the
Company and Great-
West;
President and Chief
Executive Officer (U.S.
Operations), GWL
Dennis Low Executive
Vice President,
Financial Services of the
Company, Great-
West and GWL
James D. Motz Executive
Vice President,
Employee Benefits of the
Company, Great-
West and GWL
Robert D. Bond Senior
Vice President,
Financial Services of the
Company,
Great-
West and GWL;
prior to May
<PAGE>
1992, National Director,
Public
Marketing, Aetna
Life Insurance
Company
John T. Hughes Senior Vice
President, Chief
Investment Officer of
the Company,
Great-West and
GWL
41
<PAGE>
<PAGE>
D. Craig Lennox Senior Vice
President, General
Counsel and Secretary of
the
Company and
Great-West; Senior
Vice President and Chief
U.S.
Legal Officer,
GWL
Martin L. Rosenbaum Senior Vice
President, Employee
Benefits Operations
of the
Company,
Great-West and GWL
Douglas L. Wooden Senior Vice
President, Financial
Services of the
Company, Great-
West and GWL
</TABLE>
Executive Compensation
Executive officers of the Company may
also serve one or
more
affiliated
companies of First GWL&A. Allocations have
been made as to
<PAGE>
each
individual's
time devoted to his duties as an executive officer
of the Company.
The
following
table shows the cash compensation paid, based on
these allocations,
to
the Chief
Executive Officer and the other four most
highly compensated
executive
officers
(collectively, the "Named Executive
Officers") whose
allocated
compensation
exceeded $60,000, for services rendered in all
capacities to
<PAGE>
the
Company in
1996.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
<PAGE>
Compensation Table
=================================================================
==========
====================
==============================
Name and Year
Annual
Long-Term
Principal Position
Compensation(1)
Compensation Awards
Salary
Bonus
Securities Under
($)
($)
Options Granted (2)
-----------------------------------------------------------------
----------
--------------------
------------------------------
W.T. McCallum, 1996
0
0
<PAGE>
None
President and
Chief Executive
Officer
-----------------------------------------------------------------
----------
--------------------
------------------------------
D. Low, Executive 1996
0
0
None
Vice President,
Financial Services
-----------------------------------------------------------------
----------
--------------------
------------------------------
J.T. Hughes, Senior 1996
0
0
<PAGE>
None
Vice President, Chief
Investment Officer
-----------------------------------------------------------------
----------
--------------------
------------------------------
D.L. Wooden, Senior 1996
0
0
<PAGE>
None
Vice President,
Financial Services
<PAGE>
-----------------------------------------------------------------
----------
--------------------
------------------------------
J.D. Motz, 1996
0
0
None
Executive Vice
President, Employee
Benefits
=================================================================
==========
====================
==============================
</TABLE>
<PAGE>
(1) The aggregate of perquisites and other
personal benefits,
securities or
property provided to each Named Executive Officer
in 1996 did not
exceed the
lesser of $50,000 and 10% of the total of the
individual's annual
salary and
bonus.
(2) Options are for common shares of Lifeco
("Lifeco Options").
Lifeco options
are granted by Great-West
42
<PAGE>
<PAGE>
Lifeco pursuant to the Great-West Lifeco Inc.
Stock Option
Plan which was
approved by Great-West Lifeco shareholders on
April 24, 1996.
Lifeco options
become exercisable 20% per year commencing on the
first anniversary
date of the
grant and expire 10 years after the date of the
grant.
Pension Plan Table
The following table sets out the pension
benefits payable
to the Named
Executive Officers by Great- West Life or the
Company, as of December
31, 1996.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Employees' Pension
Plan
=================================================================
==========
====================
<PAGE>
=====
Remuneration
Years of Service
($)
15 20
25
30
35
-----------------------------------------------------------------
----------
--------------------
-----
400,000 120,000 160,000
200,000
240,000 240,000
<PAGE>
-----------------------------------------------------------------
----------
--------------------
-----
500,000 150,000 200,000
250,000
300,000 300,000
<PAGE>
-----------------------------------------------------------------
----------
--------------------
-----
600,000 180,000 240,000
300,000
360,000 360,000
-----------------------------------------------------------------
----------
--------------------
-----
700,000 210,000 280,000
350,000
420,000 420,000
-----------------------------------------------------------------
----------
--------------------
-----
800,000 240,000 320,000
400,000
480,000 480,000
-----------------------------------------------------------------
----------
--------------------
-----
900,000 270,000 360,000
450,000
540,000 540,000
<PAGE>
-----------------------------------------------------------------
----------
--------------------
-----
1,000,000 300,000 400,000
500,000
600,000 600,000
=================================================================
==========
====================
=====
<PAGE>
</TABLE>
The Named Executive Officers have the following years
of service:
Name Years of Service
W.T. McCallum 30
D. Low 31
J.T. Hughes 6
D.L. Wooden 5
J.D. Motz 27
For W.T. McCallum, the benefits shown are
payable commencing
December
31, 2000,
and remuneration is the average of the
highest 36
consecutive
months of
compensation during the last 86 months of
employment. For D. Low,
J.T.
Hughes,
D.L. Wooden and J.D. Motz, the benefits shown
are payable upon
the
attainment of
age 62, and remuneration is the average of
the highest 60
consecutive
months of
compensation during the last 86 months of
<PAGE>
employment.
Compensation
includes
salary and bonuses prior to any deferrals. The
normal form of
pension
is a life
only annuity. Other optional forms of
pension payment
are
available on an
actuarially equivalent basis. The benefits
listed in the table
are
subject to
deduction for social security and other retirement
benefits.
<PAGE>
43
<PAGE>
<PAGE>
Ownership of Securities
All of the Company's outstanding
shares are owned
by
Great-West Life &
Annuity Insurance Company, 8515 East Orchard
Road, Englewood, CO
80111.
GWL&A is
in turn owned 100% by the Great-West Life
Assurance Company, 100
Osborne
Street
North, Winnipeg, Manitoba, Canada R3C 3A5. The
Great-West Life
Assurance
Company
is owned 99.5% by Great-West Lifeco Inc., both of
which share the
same
address.
Great-West Lifeco Inc. is owned
86.5% by Power
Financial
Corporation, 751
Victoria Square, Montreal, Quebec, Canada H2Y
2J3. It is owned
68.3%
by 171263
<PAGE>
Canada Inc., which is owned 100% by Power
Corporation of Canada,
both
of which
share the same address as Power Financial
Corporation. Mr.
Paul
Desmarais, 751
Victoria Square, Montreal, Quebec, Canada H2Y 2J3,
through a group
of
private
holding companies, which he controls, has
voting control of
Power
Corporation of
Canada.
------------------------------------------------------
VOTING RIGHTS
------------------------------------------------------
To the extent required by applicable
law, all Eligible
Fund
shares held
in the Series Account will be voted by the
Company at regular
and
<PAGE>
special
shareholder meetings of the respective
Eligible Funds
in
accordance with
instructions received from persons having
voting interests in
the
corresponding
Investment Division. If, however, the
1940 Act or any
regulation
thereunder
should be amended, or if the present
interpretation thereof
should
change, or if
we determine that we are allowed to vote all
Eligible Funds shares
<PAGE>
in
our own
rights, we may elect to do so.
Before the annuity commencement date, you
the Owner, have
the voting
interest. The number of votes which are
available to you will
<PAGE>
be
calculated
separately for each of your Variable
Sub-Accounts. That
number
will be
determined by applying your percentage
interest, if any,
in a
particular
Investment Division to the total number of votes
attributable to
that
Investment
Division. You hold a voting interest in each
Investment Division
to
which your
Annuity Account Value is allocated. If you
select a variable
annuity
option, the
votes attributable to a Contract will decrease as
annuity payments
are
made.
The number of votes of an Eligible
Fund will be
determined
as of the
date coincident with the date established by
that Eligible Fund
for
determining
<PAGE>
shareholders eligible to vote at the meeting
of the Eligible
Funds.
Voting
instructions will be solicited by written
communication prior to
such
meeting in
accordance with procedures established by the
respective Eligible
Funds.
Shares as to which no timely
instructions are received
and
shares held
by us as to which Owners have no beneficial
interest will be voted
in
proportion
to the voting instructions which are received
with respect to
all
Contracts
participating in the Investment Division.
Voting instructions
to
abstain on any
item to be voted upon will be applied on a pro
rata basis to
reduce
the votes
eligible to be cast.
<PAGE>
Each person or entity having a voting
interest in a
Investment
Division
will receive proxy material, reports and
other material
relating
to the
appropriate Eligible Fund.
It should be noted that generally the
Eligible Funds are
not
required
to, and do not intend to, hold annual or other
regular meetings
of
shareholders.
<PAGE>
Contract Owners have no voting rights in the
Company.
44
<PAGE>
<PAGE>
<PAGE>
------------------------------------------------------
RIGHTS
RESERVED BY
THE
COMPANY
------------------------------------------------------
The Company reserves the right to
make certain
changes
if, in its
judgment, they would best serve the interests
of Owners and
Annuitants
or would
be appropriate in carrying out the purposes of
the Contracts.
Any
changes will
be made only to the extent and in the manner
permitted by
applicable
laws. Also,
when required by law, the Company will obtain
your approval of
the
changes and
approval from any appropriate regulatory
authority. Such
approval
<PAGE>
may not be
required in all cases, however. Examples of
the changes the
Company
may make
include:
- To operate the Series Account
in any form
permitted
under the
Investment Company Act of 1940 or in
any other form
permitted
by law.
- To transfer any assets in any
Investment Division
<PAGE>
to
another
Investment Division, or to one or
more separate
accounts,
or to a
Guarantee Period; or to add,
combine or remove
Investment
<PAGE>
Divisions of
the Series Account.
- To substitute, for the Eligible
Fund shares in
any
Investment
Division, the shares of another Eligible
Fund or shares
of
another
investment company or any other investment
permitted by law.
- To make any changes required by the
Internal Revenue
Code
or by any
other applicable law in order to continue
treatment of
the
Contract as
an annuity.
- To change the time or time of day at
which a Valuation
Date
is
deemed to have ended.
- To make any other necessary
technical changes in
the
<PAGE>
Contract in
order to conform with any action
the above
provisions
permit the
Company to take, including to
change the way the
Company
assess
charges, but without increasing as
to any then
outstanding
Contract the
aggregate amount of the types of
charges which
the
Company has
guaranteed.
------------------------------------------------------
LEGAL PROCEEDINGS
------------------------------------------------------
There are at present no material legal
proceedings to
which
the Series
Account is a party or to which the assets of
the Series Account
<PAGE>
are
subject. The
Company is not currently a party to, and its
property is not
currently
subject
to, any material legal proceedings. The lawsuits to
which the Company
is
a party
are, in the opinion of management, in the
ordinary course of
business,
and are
not expected to have a material adverse
effect on the
financial
results,
<PAGE>
conditions or prospects of the Company.
------------------------------------------------------
LEGAL MATTERS
<PAGE>
------------------------------------------------------
Advice regarding certain legal
matters concerning
the
federal
securities laws applicable to the issue
and sale of the
Contract
has been
provided by Jorden Burt Berenson & Johnson LLP. The
organization of
the
Company,
the Company's authority to issue the Contract, and
the validity of
the
form of
the Contract have been passed upon by W. Kay
Adam, Vice
President,
Counsel and
Associate Secretary of the Company.
45
<PAGE>
<PAGE>
<PAGE>
------------------------------------------------------
EXPERTS
------------------------------------------------------
The balance sheet of First Great-West
Life & Annuity
Insurance
Company
as of April 4, 1997 included in this prospectus
has been audited
by
Deloitte &
Touche LLP, independent auditors, as stated
in their report
appearing
herein,
and is included in reliance upon the
report of such firm
given
upon their
authority as experts in accounting and auditing.
------------------------------------------------------
AVAILABLE
INFORMATION
<PAGE>
------------------------------------------------------
We have filed a
registration statement
("Registration
Statement") with
the Commission under the 1933 Act relating to
the Contracts
offered
by this
Prospectus. This Prospectus has been filed
as a part of
the
Registration
Statement and does not contain all of the
information set
forth
<PAGE>
in the
Registration Statement and exhibits thereto.
Reference is
hereby
made to the
Registration Statementand exhibits for further
information relating
to us and
the Contracts. Statements contained in this
Prospectus, as to
<PAGE>
the
content of the
Contracts and other legal instruments, are
summaries. For a
complete
statement
of the terms thereof, reference is made to the
instruments as filed
as
exhibits
to the Registration Statement. The
Registration Statement and
its
exhibits may
be inspected and copied at the offices of the
Commission located
at
450 Fifth
Street, N.W., Washington, D.C.
The Statement of Additional
Information contains
more
specific
information relating to the Series Account
and First GWL&A.
The
Table of
Contents of the Statement of Additional
Information is set forth
below:
<PAGE>
1. General Information
2. First Great-West Life & Annuity
Insurance Company
and
the
Variable Annuity-1 Series Account
3. Calculation of Annuity Payments
4. Postponement of Payments
5. Services
6. Withholding
7. Calculation of Performance Data
46
<PAGE>
<PAGE>
Appendix A
On the following pages are four
examples of Market
Value
Adjustments
illustrating (1) increasing interest rates,
(2) decreasing
interest
rates, (3)
flat interest rates (i and j are within .10% of
each other), and
(4)
less than 6
months to maturity.
Example #1 - Increasing Interest Rates
Deposit: $25,000
on November 1,
1996
Maturity Date: December
31, 2006
Interest Guarantee Period: 10 years
i: assumed
to be 6.15%
Surrender Date: July 1,
2001
j: 7.00%
Amount Surrendered: $10,000
<PAGE>
N: 65
MVAF = {[(1 + i)/(1 +
j)]N/12} - 1
=
{[1.0615/1.07]65/12} - 1
= .957718 - 1
= -.042282
MVA = (amount
Transferred or
surrendered)
x MVAF
= $10,000 x -
.042282
= - $422.82
Surrender Value = (amount Transferred
or surrendered
+
<PAGE>
MVA)x(1-CDSC)
=
($10,000 +
-
$422.82)x(1-0)
=
$9,577.18
<PAGE>
Example #2 - Decreasing Interest Rates
Deposit:
$25,000 on November 1,
1996
Maturity Date: December
31, 2006
Interest Guarantee Period: 10 years
i: assumed
to be 6.15%
Surrender Date: July 1, 2001
j: 5.00%
Amount Surrendered: $10,000
N: 65
MVAF = {[(1 + i)/(1 +
j)]N/12} - 1
=
{[1.0615/1.05]65/12} - 1
= .060778
<PAGE>
MVAF = (amount
Transferred or
surrendered)
x MVAF
= $10,000 x .060778
= $607.78
Surrender Value = (amount Transferred
or surrendered
+
MVA)x(1-CDSC)
=
($10,000
+
$607.78)x(1-0)
=
$10,607.78
47
<PAGE>
<PAGE>
Example #3 - Flat Interest Rates
Deposit: $25,000
on November 1,
1996
Maturity Date: December
31, 2006
Interest Guarantee Period: 10 years
i: assumed
to be 6.15%
Surrender Date: July 1, 2001
j: 6.24%
Amount Surrendered: $10,000
N: 65
MVAF = {[(1 + i)/(1 +
j)]N/12} - 1
=
{[1.0615/1.0624]65/12} - 1
= .995420 - 1
= -.004580
MVA = (amount
Transferred or
surrendered)
x MVAF
= $10,000 x
-.004589
= - $45.80
Surrender Value = (amount Transferred
or surrendered
<PAGE>
+
MVA)x(1-CDSC)
=
($10,000
-
$45.80)x(1-0)
=
$9,954.20
Example #4 - N is less than 6 (less
than 6 months to
maturity)
Deposit: $25,000
on November 1,
1996
<PAGE>
Maturity Date: December
31, 2006
Interest Guarantee Period: 10 years
i: assumed
to be 6.15%
Surrender Date: July 1, 2006
j: 7.00%
Amount Surrendered: $10,000
N: 5
<PAGE>
MVAF = {[(1 + i)/(1 + j)]N/12} -
1
= {[1.0615/1.07]5/12} - 1
= .99668 - 1
= -.00332
However, N is less than 6, so MVAF
= 0
MVAF = (amount Transferred or
surrendered) x MVAF
= $10,000 x 0
= $0
Surrender Value = (amount Transferred
or surrendered
+
MVA)x(1-CDSC)
<PAGE>
= ($10,000
+ $0)x(1-0)
= $10,000
48
<PAGE>
49
<PAGE>
<PAGE>
<PAGE>
FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
(A wholly-owned subsidiary of
Great-West Life & Annuity Insurance Company)
Balance Sheet as of April 4, 1997 and
Independent Auditors' Report
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholder
of First Great-West Life & Annuity Insurance Company:
We have audited the accompanying balance sheet of First
Great-West
Life & Annuity Insurance Company (a wholly-owned subsidiary of
Great-West Life & Annuity Insurance Company) as of April 4,
1997.
This financial statement is the responsibility of the
Company's
management. Our responsibility is to express an opinion on
this
financial statement based on our audit.
We conducted our audit in accordance with generally accepted
<PAGE>
standards. Those standards require that we plan and perform
the
audit to obtain reasonable assurance about whether the
financial
statement is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts
and
disclosures in the financial statement. An audit also
includes
assessing the accounting principles used and significant
estimates
made by management, as well as evaluating the overall
financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
<PAGE>
In our opinion, such balance sheet presents fairly, in all
material
respects, the financial position of First Great-West Life &
Annuity
Insurance Company as of April 4, 1997 in conformity with
generally
accepted accounting principles.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Denver, Colorado
April 14, 1997
FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
BALANCE SHEET
APRIL 4, 1997
ASSETS
Cash
$6,000,000
TOTAL ASSETS
$6,000,000
STOCKHOLDER'S EQUITY
Common stock, $1,000 par value, 2,000 shares authorized,
$2,000,000
issued and outstanding
Additional paid-in capital
$4,000,000
TOTAL STOCKHOLDER'S EQUITY
$6,000,000
FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
APRIL 4, 1997
<PAGE>
1. ORGANIZATION
Organization - First Great-West Life & Annuity Insurance
Company (the Company) is a wholly-owned subsidiary of
Great-West
Life & Annuity Insurance Company (The Parent Corporation).
The
Company was incorporated as a stock life insurance company on
April
9, 1996 in the State of New York and was capitalized on April
4,
1997 through a $6,000,000 cash investment from its Parent for
2,000
shares of common stock. The Company is currently seeking
licensure
as an insurance company in the State of New York.
<PAGE>
Basis of Presentation - The preparation of financial
statements in conformity with generally accepted accounting
principles which requires management to make estimates and
assumptions that affected the reported amounts of assets and
liabilities at the date of the financial statements. Actual
results could differ from those estimates.
2. SIGNIFICANT ACCOUNTING PRINCIPLES
Cash - cash includes only amounts in demand deposit
accounts.
<PAGE>
VARIABLE ANNUITY-1 SERIES ACCOUNT
Contracts Under
Flexible Premium Deferred
Combination Variable and Fixed Annuity
Contracts
issued by
First Great-West Life & Annuity Insurance
Company
125 Wolf Road, Suite 110
Albany, New York 12205
Telephone: (800) 537-2033
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information is not a Prospectus
and should be read
in conjunction with the Prospectus, dated , 1997 which is
available without
charge by contacting the Schwab Annuity Service Center,
P.O. Box 7785, San
Francisco, California 94120-9420 or at 1-800-838-0650.
<PAGE>
B-1
TABLE OF CONTENTS
Page
G E N E R A L
INFORMATION......................................................
..B-3
<PAGE>
FIRST GREAT-WEST LIFE & ANNUITY
AND THE VARIABLE ANNUITY-1 SERIES
ACCOUNT................................B-3
C A L C U L A T I O N O F A N N U I T Y
PAYMENTS............................................B-3
P O S T P O N E M E N T O F
PAYMENTS...................................................B-4
SERVICES.........................................................
..........B-4
- Safekeeping of Series Account
Assets............................B-4
-
Experts.........................................................B
-4
- P r i n c i p a l
Underwriter...........................................B-5
- Administrative Services
Agreement...............................B-5
WITHHOLDING......................................................
..........B-5
C A L C U L A T I O N O F P E R F O R M A N C E
DATA............................................B-5
F I N A N C I A L
STATEMENTS.......................................................
B-7
B-2
GENERAL INFORMATION
In order to supplement the description in the Prospectus, the
following provides
additional information about the Contracts and other
matters which may be of
interest to you. Terms used in this Statement of Additional
Information have the
same meanings as are defined in the Prospectus under the
heading "Definitions."
FIRST GREAT-WEST LIFE & ANNUITY INSURANCE
COMPANY
AND THE VARIABLE ANNUITY-1 SERIES ACCOUNT
<PAGE>
First Great-West Life & Annuity Insurance Company (the
"Company"), the issuer of
the Contract, is a New York corporation qualified to sell life
insurance
and annuity contracts in New York and Iowa. It was qualified
to do business on
May 28, 1997 and, therefore, has no prior history. The Company
is a wholly-owned
subsidiary of Great-West Life & Annuity Insurance Company, a
Colorado stock life
insurance company, which is a wholly owned subsidiary of
The Great-West Life
Assurance Company, a stock life insurance company incorporate
under the laws of
Canada. The Great-West Life Assurance Company is in turn
86.4% by Great-West
Lifeco Inc., a holding company. Great-West Lifeco Inc. is
owned 68.4% by Power
Financial Corporation of Canada, a financial services company.
Power Corporation
of Canada, a holding and management company, has voting
control of Power
Financial Corporation of Canada. Mr. Paul Desmarais, through
a group of private
holding companies, which he controls, has voting control of
Power Corporation of
Canada.
The assets allocated to the Series Account are the
exclusive property
of the Company. Registration of the Series Account under the
Investment Company
Act of 1940 does not involve supervision of the
management or investment
practices or policies of the Series Account or of the Company
by the Securities
and Exchange Commission. The Company may accumulate in
the Series Account
proceeds from charges under the Contracts and other
amounts in excess of the
Series Accountassets representing reserves and liabilities
under the Contract
and other variable annuity contracts issued by the Company.
The Company may from
time to time transfer to its general account any of such
excess amounts. Under
<PAGE>
certain remote circumstances, the assets of one Investment
Division may not be
insulated from liability associated with another Investment
Division.
CALCULATION OF ANNUITY PAYMENTS
A. Fixed Annuity Options
The amount of each annuity payment
under a fixed annuity
option is fixed and guaranteed by the Company. On the Payment
Commencement Date,
the Annuity Account Value held in the Fixed Sub-Account(s),
with a Market Value
Adjustment, if applicable, less Premium Tax, if any, is
computed and that
portion of the Annuity Account Value which will be applied to
the fixed annuity
option selected is determined. The amount of the first monthly
payment under the
fixed annuity option selected will be at least as large as
would result from
using the annuity tables contained in the Contract to
apply to the annuity
option selected. The dollar amounts of any fixed annuity
payments will not vary
during the entire period of annuity payments and are
determined according to the
provisions of the annuity option selected.
B-3
<PAGE>
B. Variable Annuity Options
To the extent a variable annuity option has
been selected, the
Company converts the Accumulation Units for each of the
Owner's Variable
Sub-Accounts into Annuity Units for each Variable
Sub-Account at their values
<PAGE>
determined as of the end of the Valuation Period which
contains the Payment
Commencement Date. The number of Annuity Units paid
for each Variable
Sub-Account is determined by dividing the amount of the first
monthly payment by
the sub-account's Annuity Unit Value on the fifth Valuation
Date preceding the
date the first payment is due. The number of Annuity Units
used to calculate
each payment for a Variable Sub-Account remains fixed during
the annuity payment
period.
The first payment under a variable annuity
payment option will
be based on the value of each Variable Sub-Account on the
fifth Valuation Date
preceding the Payment Commencement Date. It will be
determined by applying the
appropriate rate to the amount applied under the Payment
Option. Payments after
the first will vary depending upon the investment
experience of the Variable
Sub-Accounts. The subsequent amount paid from each
sub-account is determined by
multiplying (a) by (b) where (a) is the number of sub-account
Annuity Units to
be paid and (b) is the sub-account Annuity Unit value on
the fifth Valuation
Date preceding the date the annuity payment is due. The
total amount of each
Variable Annuity Payment will be the sum of the Variable
Annuity Payments for
each Variable Sub-Account.
POSTPONEMENT OF PAYMENTS
<PAGE>
With respect to amounts allocated to the
Series Account,
payment of any amount due upon a total or partial surrender,
death or under an
annuity option will ordinarily be made within seven days
after all documents
required for such payment are received by the Schwab Annuity
Service Center.
However, the determination, application or payment of
any death benefit,
Transfer, full surrender, partial withdrawal or annuity
payment may be deferred
to the extent dependent on Accumulation or Annuity Unit
Values, for any period
during which the New York Stock Exchange is closed (other than
customary weekend
and holiday closings) or trading on the New York Stock
Exchange is restricted as
determined by the Securities and Exchange Commission, for
any period during
which any emergency exists as a result of which it is not
reasonably practicable
for the Company to determine the investment experience, of
such Accumulation or
Annuity Units or for such other periods as the
Securities and Exchange
Commission may by order permit for the protection of
investors.
SERVICES
A. Safekeeping of Series Account Assets
The assets of Variable Annuity-1 Series
Account (the "Series
Account") are held by First Great-West Life & Annuity
Insurance Company ("First
GWL&A"). The assets of the Series Account are kept
physically segregated and
held separate and apart from the general account of First
GWL&A. First GWL&A
maintains records of all purchases and redemptions of shares
of the underlying
funds. Additional protection for the assets of the Series
Account is afforded by
blanket fidelity bonds issued to The Great- West Life
Assurance Company in the
<PAGE>
amount of $25 million, which covers all officers and employees
of First GWL&A.
B. Experts
The accounting firm of Deloitte & Touche LLP
performs certain
accounting and auditing services for First GWL&A and the
Series Account. The
principal business address of Deloitte & Touche LLP is 555
Seventeenth Street,
Suite 3600, Denver, Colorado 80202.
B-4
<PAGE>
The balance sheet of First GWL&A at April
4, 1997 included in
the prospectus has been audited by Deloitte & Touche LLP,
independent auditors,
as set forth in their report appearing therein and is
included in reliance upon
such report given upon the authority of such firm as experts
in accounting and
auditing.
C. Principal Underwriter
The offering of the Contracts is made on a continuous
basis by Charles
Schwab & Co., Inc. ("Schwab"). Schwab is a California
corporation and is a
member of the National Association of Securities Dealers
("NASD"). The Company
does not anticipate discontinuing the offering of the
Contract, although it
<PAGE>
reserves the right to do so. The Contract generally
will be issued for
Annuitants from birth to age ninety.
D. Administrative Services Agreement
First GWL&A and Great-West Life & Annuity Insurance
Company ("GWL&A")
have entered into an Administrative Services Agreement
dated May 15, 1997.
Pursuant to the agreement, GWL&A performs certain corporate
support services,
investment services and other back office administrative
services for First
GWL&A. In addition, certain of GWL&A's property,
equipment, personnel and
facilities are made available for First GWL&A for its
operations. All charges
for services and use of facilities to the extent
practicable reflect actual
costs, and are intended to be in accordance with New York
Insurance Laws.
WITHHOLDING
Annuity payments and other amounts received
under the Contract
are subject to income tax withholding unless the recipient
elects not to have
taxes withheld. The amounts withheld will vary among
recipients depending on the
tax status of the individual and the type of payments from
which taxes are
withheld.
Notwithstanding the recipient's election,
withholding may be
required with respect to certain payments to be delivered
outside the United
States and, with respect to certain distributions from
certain types of
qualified retirement plans, unless the proceeds are
transferred directly to
another qualified retirement plan. Moreover, special "backup
withholding" rules
<PAGE>
may require the Company to disregard the recipient's
election if the recipient
fails to supply the Company with a "TIN" or taxpayer
identification number
(social security number for individuals), or if the
Internal Revenue Service
notifies the Company that the TIN provided by the recipient is
incorrect.
CALCULATION OF PERFORMANCE DATA
A. Yield and Effective Yield Quotations for the Money
Market Investment
Division
The yield quotation for the Money Market Investment
Division will be
for the seven-day period and is computed by determining
the net change,
exclusive of capital changes, in the value of a
hypothetical pre-existing
account having a balance of one Accumulation Unit in the Money
Market Investment
Division at the beginning of the period, subtracting a
hypothetical charge
reflecting deductions from Participant accounts, and dividing
the difference by
the value of the account at the beginning of the base period
to obtain the base
period return, and then multiplying the base period return
by (365/7) with the
resulting yield figure carried to the nearest hundredth of one
percent.
The effective yield quotation for the Money Market
Investment Division
will be for the seven-day period and is carried to the nearest
hundredth of one
percent, computed by determining the net change, exclusive
of capital changes,
in the value of a hypothetical pre-existing account having a
balance of one
<PAGE>
B-5
<PAGE>
Accumulation Unit in the Money Market Investment Division
at the beginning of
the period, subtracting a hypothetical charge reflecting
deductions from
Participant accounts, and dividing the difference by the value
of the account at
the beginning of the base period to obtain the base period
return, and then
compounding the base period return by adding 1, raising the
sum to a power equal
to 365 divided by 7, and subtracting 1 from the result,
according to the
following formula:
EFFECTIVE YIELD = [(BASE PERIOD RETURN
+1)365/7]-1.
For purposes of the yield and effective yield
computations, the
hypothetical charge reflects all deductions that are charged
to all Participant
accounts in proportion to the length of the base period, and
for any fees that
vary with the size of the account, the account size is
assumed to be the Money
Market Investment Division's mean account size. The
specific percentage
applicable to a particular withdrawal would depend on a
number of factors
including the length of time the Contract Owner has
participated under the
Contracts. (See "Charges and Deductions" on page 17 of the
Prospectus.) No
deductions or sales loads are assessed upon annuitization
under the Contracts.
Realized gains and losses from the sale of securities
and unrealized
appreciation and depreciation of the Money Market Investment
Division and the
Fund are excluded from the calculation of yield.
<PAGE>
B. Total Return and Yield Quotations for All Investment
Divisions
(Other than Money Market)
The total return quotations for all Investment
Divisions, other than
the Money Market, will be average annual total return
quotations for the
one-year period. The quotations are computed by finding
the average annual
compounded rates of return over the relevant periods that
would equate the
initial amount invested to the ending redeemable value,
according to the
following formula:
P(1+T)n = ERV
Where: P = a hypothetical initial
payment of $1,000
T = average annual total
return
N = number of years
ERV = ending redeemable value
of a hypothetical
$1,000 payment made at
the beginning of the
particular period at
the end of the
particular period
For purposes of the total return quotations for these
Investment Divisions, the
<PAGE>
calculations take into effect all fees that are charged to
the Contract Value ,
and for any fees that vary with the size of the account, the
account size is
assumed to be the respective Investment Divisions' mean
account size. The
calculations also assume a complete redemption as of the end
of the particular
period.
The yield quotations for these Investment
Divisions set forth in the
Prospectus are based on the thirty-day period ended on
December 31, 1996, and
are computed by dividing the net investment income per
Accumulation Unit earned
during the period by the maximum offering price per unit on
the last day of the
period, according to the following formula:
YIELD = 2[((a-b)cd +1)6 -1]
Where: a = net investment income earned during
the period by
the corresponding portfolio of the Fund attributable to shares
owned by the
Investment Division.
B-6
<PAGE>
b = expenses accrued for the
period (net of
reimbursements).
c = the average daily number
of Accumulation
Units outstanding during the period.
d = the maximum offering price
per Accumulation
Unit on the last day of the period.
<PAGE>
For purposes of the yield quotations for these
Investment Divisions, the
calculations take into effect all fees that are charged to
the Contract Value,
and for any fees that vary with the size of the account, the
account size is
assumed to be the respective Investment Divisions' mean
account size.
FINANCIAL STATEMENTS
The balance sheet of First GWL&A as contained in the
prospectus should
be considered only as bearing upon First GWL&A's ability to
meet its obligations
under the Contracts, and they should not be considered
as bearing on the
investment performance of the Series Account. The interest
of Contract Owners
under the Contracts are affected solely by the investment
results of the Series
Account. This Statement of Additional Information
contains no financial
statements for the Series Account because the Series
Account has not yet
commenced operations, has no assets or liabilities, and has
received no income
nor incurred any expenses as of the date of this
Statement of Additional
Information.
B-7
<PAGE>
<PAGE>
<PAGE>
PART
C
OTHER
INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
The financial statements for First Great-West Life &
Annuity Insurance
Company are included in the prospectus.
(b) Exhibits
(1) Certified copy of resolution of
Board of Directors or
Depositor establishing Registrant is
incorporated by reference
to Registrant's Registration Statement
(2) Not applicable.
(3) Copy of distribution contract
between Depositor and
Principal Underwriter is incorporated
by reference to
Registrant's Registration Statement.
(4) Copy of the form of the variable
annuity contract is
attached as Exhibit 4.
(5) Copy of the form of application to
be used with the
variable annuity contract provided pursuant
to (4) is attached
as Exhibit 5.
(6) Copy of Articles of Incorporation and
Bylaws of Depositor
are incorporated by reference to
Registrant's Registration
Statement.
(7) Not applicable.
<PAGE>
(8) Copies of participation agreements with
underlying funds
are incorporated by reference to
Registrant's Registration
Statement.
(9) Opinion of counsel and consent of W.
Kay Adam is attached
as Exhibit 9.
(10)(a) Written Consent of Jorden Burt
Berenson & Johnson LLP
is incorporated by reference to
Registrant's Registration
Statement.
(b) Written Consent of Deloitte & Touche LLP
is incorporated
by reference to Registrant's Registration
Statement.
(c) Written Consent of W. Kay Adam is
attached as Exhibit 9.
(11) Not Applicable.
<PAGE>
(12) Not Applicable.
(13) Schedule for computation of each
performance quotation
provided in response to Item 21 is
incorporated by reference
to Registrant's Registration Statement.
(14) Financial Data Schedule is
incorporated by reference to
Registrant's Registration Statement.
C-1
<PAGE>
Item 25. Directors and Officers of the
Depositor
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Position and Offices
Name Principal Business
Address
with Depositor
Marcia D. Alazraki 425 Lexington
Avenue
Director
New York City, New York
10017
James Balog 2205 North Southwinds
Boulevard
Director
Vero Beach, Florida 39263
James W. Burns, O.C.
<PAGE>
(4)
Director
Paul Desmarais, Jr. (4)
Director
Robert Gratton (5)
Chairman
N. Berne Hart 2552 East Alameda
Avenue, #99
Director
Denver, Colorado 80209
Stuart Z. Katz One New York
Plaza
<PAGE>
Director
New York City, New York
10004
William T. McCallum (1)
President and
Chief
Executive Officer
Brian E. Walsh Trinity L.P.
Director
115 East Putnam Avenue
Greenwich, Connecticut
06830
Robert D. Bond (1)
Senior Vice President,
Financial Services
Glen Derback (1)
Vice President and Controller
John T. Hughes (1)
Senior Vice President,
Chief
Investment Officer
D. Craig Lennox (1)
Senior Vice President,
General
<PAGE>
Counsel and
Secretary
Dennis Low (1)
Director, Executive Vice
President, Financial Services
James D. Motz (2)
Executive Vice President,
Employee Benefits
Martin L. Rosenbaum (2)
Senior Vice President,
<PAGE>
Employee Benefits Operations
Douglas L. Wooden (1)
Director, Senior Vice
______________________________________
President,
Financial Services
</TABLE>
(1) 8515 East Orchard Road, Englewood, Colorado
80111.
(2) 8505 East Orchard Road, Englewood, Colorado
80111.
C-2
<PAGE>
Item 26. Persons controlled by or under common control with
the Depositor or
Registrant
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Power Corporation of Canada
100% - Marquette Communications Corporation
100% - 171263 Canada Inc.
68.1% - Power Financial Corporation
86.5% - Great-West Lifeco
Inc.
99.5% - The Great-West Life Assurance
Company
100% -
Great-West Life & Annuity Insurance
Company
100% First Great-West Life &
Annuity Insurance Company
<PAGE>
100% - GW Capital Management,
Inc.
100% - Financial Administrative
Services Corporation
100% - One Corporation
100% - One Health Plan
of Illinois, Inc.
100% - One Health Plan
of Texas, Inc.
100% - One Health Plan
of California, Inc.
100% - One Health Plan
of Colorado, Inc.
100% - One Health Plan
of Georgia, Inc.
100% - One Health Plan
of North Carolina, Inc.
<PAGE>
100% - One Health Plan
of Washington, Inc.
100% - One Health Plan
of Ohio, Inc.
100% - One Health Plan
of Oregon, Inc.
100% - One Health Plan
of Tennessee, Inc.
100% - One Orchard
Equities, Inc.
100% - Great-West Benefit
Services, Inc.
13% - Private
Healthcare Systems, Inc.
100% -
Benefits
Communication
Corporation
100% -
BenefitsCorp
Equities,
Inc.
94% - Maxim Series Fund, Inc.
100% - Greenwood Property
Corporation
100% - GWL Properties Inc.
100% - Great-West Realty
Investments, Inc.
<PAGE>
50% - Westkin
Properties Ltd.
100% - Confed Admin Services,
Inc.
</TABLE>
Item 27. Number of Contractowners
Not applicable.
Item 28. Indemnification
Provisions exist under the laws of the
state of New York and
the Bylaws of First GWL&A whereby First GWL&A may indemnify a
director, officer,
or controlling person of First GWL&A against liabilities
arising under the
Securities Act of 1933. The following excerpts contain the
substance of these
provisions:
New York
Corporate Code
Section 721. Nonexclusivity of statutory provisions for
indemnification of
directors and officers.
The indemnification and advancement of expenses granted
pursuant to, or provided
by, this article shall not be deemed exclusive of any other
rights to which a
<PAGE>
director or officer seeking indemnification or advancement
of expenses may be
entitled, whether contained in the certificate of
incorporation or the by-laws
or, when authorized by such certificate of incorporation
or by-laws, (i) a
resolution of shareholders, (ii) a resolution of directors, or
(iii)
C-3
<PAGE>
an agreement providing for such indemnification,
provided that no
indemnification may be made to or on behalf of any director
or officer if a
judgment or other final adjudication adverse to the
director or officer
establishes that his acts were committed in bad faith or
were the result of
active and deliberate dishonesty and were material to the
cause of action so
adjudicated, or that he personally gained in fact a
financial profit or other
advantage to which he was not legally entitled. Nothing
contained in this
article shall affect any rights to indemnification to which
corporate personnel
other than directors and officers may be entitled by contract
or otherwise under
law.
Section 722. Authorization for indemnification of directors
and officers.
(a) A corporation may indemnify any person 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
<PAGE>
kind, domestic or foreign, or any partnership, joint venture,
trust, employee
benefit plan or other enterprise, which any director
or officer of the
corporation served in any capacity at the request of the
corporation, by reason
of the fact that he, his testator or intestate, was a director
or officer of the
corporation, or served such other corporation,
partnership, joint venture,
trust, employee benefit plan or other enterprise in any
capacity, against
judgments, fines, amounts paid in settlement and reasonable
expenses, including
attorneys' fees actually and necessarily incurred as a result
of such action or
proceeding, or any appeal therein, if such director or
officer acted, in good
faith, for a purpose which he reasonably believed to be in,
or, in the case of
service for any other corporation or any partnership, joint
venture, trust,
employee benefit plan or other enterprise, not opposed to, the
best interests of
the corporation and, in criminal actions or proceedings, in
addition, had no
reasonable cause to believe that his conduct was unlawful.
(b) The termination of any such civil or criminal action
or proceeding by
judgment, settlement, conviction or upon a plea of nolo
contendere, or its
equivalent, shall not in itself create a presumption that
any such director or
officer did not act, in good faith, for a purpose which he
reasonably believed
to be in, or, in the case of service for any other
corporation or any
partnership, joint venture, trust, employee benefit plan or
other enterprise,
not opposed to, the best interests of the corporation or that
he had reasonable
cause to believe that his conduct was unlawful.
(c) A corporation may indemnify any person made, or
threatened to be made, a
<PAGE>
party to an action by or in the right of the corporation to
procure a judgment
in its favor by reason of the fact that he, his testator or
intestate, is or was
a director or officer of the corporation, or is or was serving
at the request of
the corporation as a director or officer of any other
corporation of any type or
kind, domestic or foreign, of any partnership, joint venture,
trust, employee
benefit plan or other enterprise, against amounts paid
in settlement and
reasonable expenses, including attorneys' fees, actually
and necessarily
incurred by him in connection with the defense or settlement
of such action, or
in connection with an appeal therein, if such director or
officer acted, in good
faith, for a purpose which he reasonably believed to be in,
or, in the case of
service for any other corporation or any partnership, joint
venture, trust,
employee benefit plan or other enterprise, not opposed to, the
best interests of
the corporation, except that no indemnification under this
paragraph shall be
made in respect of (1) a threatened action, or a pending
action which is settled
or otherwise disposed of, or (2) any claim, issue or
matter as to which such
person shall have been adjudged to be liable to the
corporation, unless and only
to the extent that the court in which the action was brought,
or, if no action
was brought, any court of competent jurisdiction,
determines upon application
that, in view of all the circumstances of the case, the
person is fairly and
reasonably entitled to indemnity for such portion of the
settlement amount and
expenses as the court deems proper.
(d) For the purpose of this section, a corporation shall
be deemed to have
requested a person to serve an employee benefit plan where
the performance by
such person of his duties to the corporation also
<PAGE>
imposes duties on, or
otherwise involves services by, such person to the plan or
participants or
beneficiaries of the plan; excise taxes assessed on a person
with respect to an
employee benefit plan pursuant to applicable law shall be
considered fines; and
action taken or omitted by a person with respect to an
employee benefit plan in
the performance of such person's duties for a purpose
reasonably believed by
such person to be in the interest of the participants and
beneficiaries of the
plan shall be deemed to be for a purpose which is not
opposed to the best
interests of the corporation.
C-4
<PAGE>
C-5
<PAGE>
Section 723. Payment of indemnification other than by court
award.
(a) A person who has been successful, on the merits or
otherwise, in the defense
<PAGE>
of a civil or criminal action or proceeding of the
character described in
section 722 shall be entitled to indemnification as authorized
in such section.
(b) Except as provided in paragraph (a), any indemnification
under section 722
or otherwise permitted by section 721, unless ordered by a
court under section
724 (Indemnification of directors and officers by a court),
shall be made by the
corporation, only if authorized in the specific case:
(1) By the board acting by a quorum consisting of directors
who are not parties
to such action or proceeding upon a finding that the director
or officer has met
the standard of conduct set forth in section 722 or
established pursuant to
section 721, as the case may be, or,
(2) If a quorum under subparagraph (1) is not obtainable or,
even if obtainable,
a quorum of disinterested directors so directs; (A) By
the board upon the
opinion in writing of independent legal counsel that
indemnification is proper
in the circumstances because the applicable standard of
conduct set forth in
such sections has been met by such director or
officer, or (B) By the
shareholders upon a finding that the director or officer has
met the applicable
standard of conduct set forth in such sections.
(c) Expenses incurred in defending a civil or criminal action
or proceeding may
be paid by the corporation in advance of the final disposition
of such action or
proceeding upon receipt of an undertaking by or on behalf
of such director or
officer to repay such amount as, and to the extent, required
by paragraph (a) of
section 725.
Section 724. Indemnification of directors and officers by a
court.
<PAGE>
(a) Notwithstanding the failure of a corporation to provide
indemnification, and
despite any contrary resolution of the board or of the
shareholders in the
specific case under section 723 (Payment of indemnification
other than by court
award), indemnification shall be awarded by a court to the
extent authorized
under section 722 (Authorization for indemnification of
directors and officers),
and paragraph (a) of section 723. Application therefor may
be made, in every
case, either:
(1) In the civil action or proceeding in which the expenses
were incurred or
other amounts were paid, or
(2) To the supreme court in a separate proceeding, in which
case the application
shall set forth the disposition of any previous application
made to any court
for the same or similar relief and also reasonable cause for
the failure to make
application for such relief in the action or proceeding in
which the expenses
were incurred or other amounts were paid.
(b) The application shall be made in such manner and form as
may be required by
the applicable rules of court or, in the absence thereof,
by direction of a
court to which it is made. Such application shall be
upon notice to the
corporation. The court may also direct that notice be given
at the expense of
the corporation to the shareholders and such other persons
as it may designate
in such manner as it may require.
(c) Where indemnification is sought by judicial action, the
court may allow a
<PAGE>
person such reasonable expenses, including attorneys' fees,
during the pendency
of the litigation as are necessary in connection with his
defense therein, if
the court shall find that the defendant has by his
pleadings or during the
course of the litigation raised genuine issues of fact or law.
Section 725. Other provisions affecting indemnification
of directors and
officers.
(a) All expenses incurred in defending a civil or criminal
action or proceeding
which are advanced by the corporation under paragraph
(c) of section 723
(Payment of indemnification other than by court award) or
allowed by a court
C-6
<PAGE>
under paragraph (c) of section 724 (Indemnification of
directors and officers by
a court) shall be repaid in case the person receiving
such advancement or
allowance is ultimately found, under the procedure set
forth in this article,
not to be entitled to indemnification or, where
indemnification is granted, to
the extent the expenses so advanced by the corporation or
allowed by the court
exceed the indemnification to which he is entitled.
(b) No indemnification, advancement or allowance shall be
made under this
article in any circumstance where it appears:
(1) That the indemnification would be inconsistent with
the law of the
jurisdiction of incorporation of a foreign corporation
which prohibits or
otherwise limits such indemnification;
<PAGE>
(2) That the indemnification would be inconsistent with a
provision of the
certificate of incorporation, a by-law, a resolution of
the board or of the
shareholders, an agreement or other proper corporate action,
in effect at the
time of the accrual of the alleged cause of action asserted in
the threatened or
pending action or proceeding in which the expenses were
incurred or other
amounts were paid, which prohibits or otherwise limits
indemnification; or
(3) If there has been a settlement approved by the
court, that the
indemnification would be inconsistent with any condition
with respect to
indemnification expressly imposed by the court in approving
the settlement.
(c) If any expenses or other amounts are paid by way of
indemnification,
otherwise than by court order or action by the shareholders,
the corporation
shall, not later than the next annual meeting of
shareholders unless such
meeting is held within three months from the date of such
payment, and, in any
event, within fifteen months from the date of such
payment, mail to its
shareholders of record at the time entitled to vote for
the election of
directors a statement specifying the persons paid, the
amounts paid, and the
nature and status at the time of such payment of the
litigation or threatened
litigation.
<PAGE>
(d) If any action with respect to indemnification of
directors and officers is
taken by way of amendment of the by-laws, resolution of
directors, or by
agreement, then the corporation shall, not later than the next
annual meeting of
shareholders, unless such meeting is held within three
months from the date of
such action, and, in any event, within fifteen months
from the date of such
action, mail to its shareholders of record at the time
entitled to vote for the
election of directors a statement specifying the action taken.
(e) Any notification required to be made pursuant to the
foregoing paragraph (c)
or (d) of this section by any domestic mutual insurer
shall be satisfied by
compliance with the corresponding provisions of section one
thousand two hundred
sixteen of the insurance law.
(f) The provisions of this article relating to
indemnification of directors and
officers and insurance therefor shall apply to domestic
corporations and foreign
corporations doing business in this state, except as
provided in section 1320
(Exemption from certain provisions).
Section 726. Insurance for indemnification of directors and
officers.
(a) Subject to paragraph (b), a corporation shall have
power to purchase and
maintain insurance:
(1) To indemnify the corporation for any obligation which it
incurs as a result
of the indemnification of directors and officers under the
provisions of this
article, and
(2) To indemnify directors and officers in instances in
which they may be
indemnified by the corporation under the provisions of this
article, and
<PAGE>
C-7
<PAGE>
(3) To indemnify directors and officers in instances in
which they may not
otherwise be indemnified by the corporation under the
provisions of this article
provided the contract of insurance covering such
directors and officers
provides, in a manner acceptable to the superintendent of
insurance, for a
retention amount and for co-insurance.
(b) No insurance under paragraph (a) may provide for any
payment, other than
cost of defense, to or on behalf of any director or officer:
(1) if a judgment or other final adjudication adverse to the
insured director or
officer establishes that his acts of active and deliberate
dishonesty were
material to the cause of action so adjudicated, or that he
personally gained in
fact a financial profit or other advantage to which he was not
legally entitled,
or
(2) in relation to any risk the insurance of which is
prohibited under the
<PAGE>
insurance law of this state.
(c) Insurance under any or all subparagraphs of paragraph (a)
may be included in
a single contract or supplement thereto. Retrospective rated
contracts are
prohibited.
(d) The corporation shall, within the time and to the
persons provided in
paragraph (c) of section 725 (Other provisions affecting
indemnification of
directors or officers), mail a statement in respect of any
insurance it has
purchased or renewed under this section, specifying the
insurance carrier, date
of the contract, cost of the insurance, corporate
positions insured, and a
statement explaining all sums, not previously reported
in a statement to
shareholders, paid under any indemnification insurance
contract.
(e) This section is the public policy of this state to
spread the risk of
corporate management, notwithstanding any other general or
special law of this
state or of any other jurisdiction including the federal
government.
Bylaws of
First GWL&A
Article II, Section 11. Indemnification of Directors.
The corporation may, by resolution of the Board of Directors,
indemnify and save
harmless out of the funds of the Company to the extent
permitted by applicable
law, any Director, Officer, or employee of the corporation
or any member or
officer of any Committee, and his or her heirs, executors
and administrators,
from and against all claims, liabilities, costs,
charges, and expenses
whatsoever that any such Director, Officer, employee or
any such member or
<PAGE>
officer sustains or incurs in or about any action, suit, or
proceeding that is
brought, commenced, or prosecuted against him or her for or
in respect of any
act, deed, matter or thing whatsoever made, done, or
permitted by him or her in
or about the execution of the duties of his or her office or
employment with the
corporation, or in or about the execution of his or her
duties as a Director or
Officer of another company which he or she so serves at
the request and on
behalf of the corporation, or in or about the execution of
his or her duties as
a member or officer of any such Committee, and all other
claims, liabilities,
costs, charges and expenses that he or she sustains or incurs,
in or about or in
relation to any such duties or the affairs of the
corporation, the affairs of
such other company which he or she so serves or the affairs
of such Committee,
except such claims, liabilities, costs, charges or expenses as
are occasioned by
acts of omissions which were in bad faith, involved
intentional misconduct, a
violation of the New York Insurance Law or a knowing
violation of any other law
or which resulted in such person gaining in fact a
financial profit or other
advantage to which he or she was not entitled. The
corporation may, by
resolution of the Board of Directors, indemnify and save
harmless out of the
funds of the corporation to the extent permitted by
applicable law, any
Director, Officer, or employee of any subsidiary corporation
of the corporation
on the same basis, and within the same constraints as,
described in the
preceding sentence. No payment of indemnification shall be
made unless notice
has been filed with the Superintendent of Insurance pursuant
to Section 1216 of
the New York Insurance Law.
Item 29. Principal Underwriter
<PAGE>
(a) Charles Schwab & Co., Inc. ("Schwab") is the distributor
of securities of
the Registrant.
C-8
<PAGE>
(b) Directors and Officers of Schwab
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Position and
Offices
Name Principal Business Address
with Underwriter
Charles R. Schwab (1)
Chairman and Director
David S. Pottruck (1)
President and Chief Executive Officer
and Director
Steven L. Scheid (1)
Executive Vice President and
Chief
Financial Officer and Director
Tom D. Seip (1)
Executive
Vice President -
Retail
<PAGE>
John P. Coghlan (1)
Executive Vice President,
Schwab
Institutional
Linnet Deily (1)
Executive Vice President, Services for
Investment Managers
Carrie Dwyer (1)
Executive Vice President, Corporate
Oversight
Lon Gorman (1)
Executive
Vice President and
<PAGE>
President,
Schwab Capital
Markets and
Trading
Daniel O. Leemon (1)
Executive Vice President
Business
Strategy
Dawn G. Lepore (1)
Executive Vice President, and
Chief
Information Officer - SITE
Timothy F. McCarthy (1)
Executive Vice President and
President, Financial Products and
International - Group
Elizabeth G. Sawi (1)
Executive Vice President -
Electronic
Brokerage
Richard Tinervin (1)
Executive Vice President -
Retirement
Plan Services
Luis E. Valencia (1)
<PAGE>
Executive Vice President and Chief
Administrative Officer
Suzanne D. Lyons (1)
Executive Vice President -
Retail
Marketing
C-9
<PAGE>
Position and
Offices
Name Principal Business Address
<PAGE>
with Underwriter
Karen Chang (1)
Executive
Vice President -
Head of
Branches
William J. Klipp (1)
Executive Vice President -
SchwabFunds
Peter J. McIntosh (1)
Executive Vice President -
Brokerage
Operations and
National
Investor Services
Parkash P. Ahuja (1)
Senior Vice President-
Administrative Services
Rhet Andrews (1)
Senior Vice President -
Schwab
Institutional Trading
and
Operations
William S. Baughman (1)
Senior Vice President -
<PAGE>
Strategic
Marketing
Rochelle A. Bays (1)
Senior Vice President -
CM & T
Support Services
Michelle B. Blieberg (1)
Senior Vice President -
HR Support
Services
Reid P. Conklin (1)
Senior Vice President -
Southeast
Group
John Danton (1)
Senior Vice
President, Retail
Financial
<PAGE>
Planning
Martha J. Deevy (1)
Senior Vice President -
SITE
Specialized Services
Evelyn S. Dilsaver (1)
Senior Vice President
Christopher V. Dodds (1)
Treasurer and Senior Vice
President
Sidney J. Dorr (1)
Senior Vice President -
Capital
Markets and Trading
Wayne W. Fieldsa (1)
Senior Vice President -
Securities
Operations
Edward V. Garlich, Jr. (1)
Senior Vice President and Managing
Director - Washington Research
Group
<PAGE>
C-10
<PAGE>
Position and
Offices
Name Principal Business Address
with Underwriter
Therese Haberle (1)
Senior Vice President -
Chief
Compliance Officer
James M. Hackley (1)
Senior Vice President -
<PAGE>
Active
Trader
Gerry L. Hansen (1)
Senior Vice President -
Controller
Jan K. Hier-King (1)
Senior Vice President -
Schwab
Institutional Technology
Colleen M. Hummer (1)
Senior Vice President -
Mutual Fund
Operations
Daniel J. Keller (1)
Senior Vice President -
Mutual Funds
Technology
Michael S. Knight (1)
Senior Vice President -
Midwest
Group
Gloria J. Lau (1)
Senior Vice President -
Schwab
International
<PAGE>
Thomas N. Lawrie (1)
Senior Vice President -
Electronic
Brokerage Services
James G. Losi (1)
Senior Vice President -
Retail
and
Chief Administrative Officer
Jeffrey M. Lyons (1)
Senior Vice President -
Mutual Funds
Marketing
Elinor MacKinnon (1)
Senior Vice President -
<PAGE>
Retail
Systems
Frederick F. Matteson (1)
Senior Vice President -
SITE
Operations and Infrastructure
John McGonigle (1)
Senior Vice President -
Active
Trader
Roger G. Neaves (1)
Senior Vice President -
Production
Services
C-11
<PAGE>
Position and
Offices
Name Principal Business Address
with Underwriter
Geoffrey Penney (1)
Senior Vice President -
Financial
Products and International
<PAGE>
Technology
Solutions
Kenneth W. Perlman (1)
Senior Vice President -
Capital
Markets & Trading -
Regulatory
Division
Earlene Perry (1)
Senior Vice President -
Retail
Operations
Hugo W. Quackenbush (1)
Senior Vice President -
Corporate
Communications
<PAGE>
Edward M. Rodden (1)
Senior Vice
President -
Affluent
Customer Enterprise
Myra Rothfield (1)
Senior Vice President -
Customer
Development and
Retention
Louise J. Rothman (1)
Senior Vice President -
Compensation
and Benefits
Gideon Sasson (1)
Senior Vice President -
Electronic
Brokerage Site
Arthur V. Shaw (1)
Senior Vice President -
Electronic
Brokerage
Leonard Short (1)
Senior Vice President -
CRS
Advertising and Brand
Management
<PAGE>
Betsy Snow (1)
Senior Vice
President -
ISD
Technical Operations
Ray Straka (1)
Senior Vice
President -
Finance and
Corporate Administration
Technology
Support
Michelle Swenson (1)
Senior Vice President -
Mutual Funds
Marketing and
Development
Mary B. Templeton (1)
Senior Vice President -
General
<PAGE>
Counsel and Corporate
Secretary
C-12
<PAGE>
Mark C. Thompson (1)
Senior Vice
President -
Government
and Public Affairs
Daniel J. Voet (1)
Senior Vice President -
Controller
Stephen B. Ward (1)
Senior Vice President -
Investment
Officer and Chief
Portfolio
Management
Cynthia K. Holbrook (1)
Vice President and Assistant
Corporate
Secretary
--------------------------------------
</TABLE>
<PAGE>
(1) 101 Montgomery, San Francisco, California 94104.
(c) Commissions and other compensation
received by Principal
Underwriter during registrant's last fiscal year:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Net
Name of Underwriting
Compensation
Principal Discounts and
on
Brokerage
Underwriter Commissions
Redemption
Commissions Compensation
Schwab -0-
-0-
-0- -0-
</TABLE>
<PAGE>
Item 30. Location of Accounts and Records
All accounts, books, or other documents
required to be maintained
by Section 31(a) of the 1940 Act and the
rules promulgated
thereunder are maintained by the registrant
through Great-West Life
& Annuity Insurance Company, 8515 East Orchard
Road, Englewood,
Colorado 80111.
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
(a) Registrant undertakes to file a
post-effective amendment
to this Registration Statement as
frequently as is
necessary to ensure that the audited
financial statements
in the Registration Statement are
never more than 16
months old for so long as payments
under the variable
annuity contracts may be accepted.
(b) Registrant undertakes to include either
(1) as part of any
application to purchase a contract
offered by the
Prospectus, a space that an applicant
can check to request
a Statement of Additional Information,
or (2) a postcard
or similar written communication affixed
to or included in
the Prospectus that the applicant can
remove to send for a
Statement of Additional Information.
C-13
<PAGE>
<PAGE>
(c) Registrant undertakes to deliver
any Statement of
Additional Information and any
financial statements
required to be made available under
this form promptly
upon written or oral request.
(d) Insofar as indemnification for liability
arising under the
Securities Act of 1933 may be permitted
to directors,
officers and controlling persons of the
registrant
pursuant to the foregoing provisions, or
otherwise, the
registrant has been advised that in the
opinion of the
Securities and Exchange Commission such
indemnification is
against public policy as expressed in
the Act and is,
therefore, unenforceable. In the event
that a claim for
indemnification against such liabilities
(other than the
<PAGE>
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.
(e) First GWL&A represents that the fees
and charges deducted
under the Contracts, in the aggregate,
are reasonable in
relation to the services rendered,
the expenses to be
incurred, and the risks assumed by First
GWL&A.
C-14
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933 and the
Investment Company Act of 1940, the Registrant has
duly caused this
Pre-Effective Amendment No. 1 to its Registration Statement
on Form N-4 to be
signed on its behalf, in the City of Englewood, State of
Colorado, on this 30th
day of June , 1997.
VARIABLE
ANNUITY-1 SERIES ACCOUNT
(Registrant)
By: /s/
William T. McCallum
William T.
McCallum, President
and Chief
Executive Officer of
First
Great-West Life & Annuity
Insurance Company
FIRST
GREAT-WEST LIFE & ANNUITY
INSURANCE
COMPANY
(Depositor)
By: /s/
William T. McCallum
William T.
McCallum, President
and Chief
Executive Officer
As required by the Securities Act of 1933, this
Registration Statement
<PAGE>
has been signed by the following persons in the capacities
with First Great-West
Life & Annuity Insurance Company
and on the dates indicated:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Signature and Title
Date
s/ Robert Gratton*
6/30 ,
1997
Director and Chairman of the
Board (Robert Gratton)
/s/ William T. McCallum
6/30 ,
1997
Director, President and Chief Executive
Officer (William T. McCallum)
<PAGE>
S-1
<PAGE>
Signature and Title
Date
/s/ G.R. Derback
6/30 ,
1997
Controller (Glen R. Derback)
/s/ Marcia D. Alazraki*
6/30 ,
1997
Director, (Marcia D. Alazraki)
/s/ James Balog*
6/30 ,
1997
Director, (James Balog)
/s/ James W. Burns*
6/30 ,
1997
Director, (James W. Burns)
/s/ Paul Desmarais, Jr.*
6/30 ,
1997
Director (Paul Desmarais, Jr.)
<PAGE>
/s/ N. Berne Hart*
6/30 , 1997
Director (N. Berne Hart)
/s/ Stuart Z. Katz*
6/30 ,
1997
Director (Stuart Z. Katz)
/s/ Brian E. Walsh
6/30 ,
1997
<PAGE>
Director (Brian E. Walsh)
*By: /s/ D.C. Lennox
6/30 ,
1997
D. C. Lennox
Attorney-in-fact pursuant to Powers of Attorney filed
with the
Registration Statement.
</TABLE>
<PAGE>
Exhibit
Table
Form N-4
Exhibit
1. Certified copy of resolution of Board
of Directors establishing Registrant
1
3. Copy of distribution contract between
Depositor and Principal Underwriter
1
4. Copy of the form of variable
annuity contract
2
5. Copy of the form of application to
be used with the variable contract
2
<PAGE>
6. (a) Copy of Articles of Incorporation of Depositor
1
(b) Copy of Bylaws of Depositor
1
8. Copies of participation agreements
with underlying funds
1
9. Opinion and consent of W. Kay Adam
2
10. (a) Consent of Jorden Burt Berenson & Johnson LLP
1
(b) Consent of Deloitte & Touche LLP
1
(c) Consent of W. Kay Adam
2
<PAGE>
13. Schedule for computation of each
performance quotation
1
14. Financial Data Schedule
1
1 Filed with the Registration Statement.
2 Filed with this Pre-Effective Amendment No. 1 to the
Registration Statement.
<PAGE>
Exhibit 4
Form of Variable
Annuity Contract
<PAGE>
CERTIFICATE DATA PAGE
ANNUITY INFORMATION
OWNER INFORMATION
<PAGE>
Annuity Certificate Number: 1234567
Effective Date: March 1, 1996
Status of Annuity: Non-Qualified
Initial Contribution: $5,000
Payment Commencement Date: March 1, 2006
Owner: JOHN C. DOE
<PAGE>
Date of Birth: April 1, 1944
Tax ID Number: 111-11-1111
Joint Owner: JANE B. DOE
Date of Birth: November 12, 1948
Tax ID Number: ###-##-####
ANNUITANT INFORMATION
Annuitant: JOHN C. DOE
Date of Birth: March 22, 1942
Tax ID Number: ###-##-####
Contingent Annuitant: DAVID J. DOE
Date of Birth: June 6, 1964
Tax ID Number: ###-##-####
CERTIFICATE INFORMATION
This Certificate Data Page, together with the Initial
Premium Allocation
Confirmation, reflects the information with which your
Certificate has been
established as of the Effective Date. If you wish to
change or correct any
information on this page, please call the Schwab Annuity
Service Center
immediately at 1-800-838-0649.
o_CONTRACTUAL GUARANTEE OF A MINIMUM RATE OF INTEREST: 3%
o_CHARGES: Charges at the time we issued this Certificate are
shown below.
Risk Charge:
Mortality: Expense: Total:
.68% maximum .17% maximum .85%
maximum
Certificate Maintenance Charge: $25.00 maximum
<PAGE>
annually
o_PAYMENT COMMENCEMENT DATE: The date on which annuity
payments or periodic
withdrawals will start. This Certificate Data Page
indicates the date that
you selected, or if no date is specified, the latest date
on which payments
can start. (You may change the Payment
Commencement Date prior to
commencement of annuity payments, or it may be changed
by the Beneficiary
upon the death of an Owner.)
SERVICE CENTER:
Schwab
Annuity Service Center
P.O.
Box 7806
<PAGE>
San Francisco,
California 94120
-7806
1-800-838-0649
POLICYHOLDER INFORMATION: Trustees of
ABC Trust, Inc.
Policyholder
<PAGE>
BENEFICIARY INFORMATION
Beneficiary: Sally Smith
Date of Birth:
January 17, 1956
Tax ID Number:
###-##-####
<PAGE>
First Great-West Life &
Annuity Insurance
Company
A Stock
<PAGE>
Company
125 Wolf Road
Albany, NY 12205
FLEXIBLE PREMIUM FIXED
AND VARIABLE
DEFERRED GROUP ANNUITY
PLEASE READ THIS ANNUITY
CERTIFICATE CAREFULLY.
PAYMENTS AND VALUES BASED ON THE FIXED ACCOUNT VALUE MAY BE
SUBJECT TO A MARKET
VALUE ADJUSTMENT, AND MAY RESULT IN POSITIVE OR NEGATIVE
ADJUSTMENTS TO AMOUNTS
<PAGE>
PAYABLE DUE TO SURRENDERS, TRANSFERS, AND AMOUNTS
APPLIED TO PURCHASE AN
ANNUITY. THE MARKET VALUE ADJUSTMENT IS APPLIED TO THE
AMOUNT OF TRANSFER OR
WITHDRAWAL REQUESTED AND A NEGATIVE ADJUSTMENT MAY CAUSE THE
AMOUNT TRANSFERRED
OR WITHDRAWN TO BE LESS THAN THE AMOUNT REQUESTED. THE
MARKET VALUE ADJUSTMENT
WILL NOT APPLY TO ANY GUARANTEE PERIOD HAVING FEWER THAN 6
MONTHS PRIOR TO THE
GUARANTEE PERIOD MATURITY DATE FOR: 1) TRANSFER TO ANOTHER
GUARANTEE PERIOD,
FIXED SUB-ACCOUNT OR TO A VARIABLE SUB-ACCOUNT OFFERED UNDER
THIS CERTIFICATE; OR
2) SURRENDERS, PARTIAL WITHDRAWALS, ANNUITIZATION OR PERIODIC
WITHDRAWALS; OR
3) A SINGLE SUM PAYMENT UPON DEATH OF AN OWNER OR THE
ANNUITANT.
ALL PAYMENTS AND VALUES BASED ON THE INVESTMENT
EXPERIENCE OF THE VARIABLE
ACCOUNT VALUE ARE VARIABLE, MAY INCREASE OR DECREASE
ACCORDINGLY, AND ARE NOT
GUARANTEED AS TO AMOUNT.
THE SMALLEST ANNUAL RATE OF INVESTMENT RETURN WHICH WOULD
HAVE TO BE EARNED ON
THE ASSETS OF THE SEPARATE ACCOUNT SO THAT THE DOLLAR AMOUNT
OF VARIABLE ANNUITY
PAYMENTS WILL NOT DECREASE IS 5.85%.
A 10% FEDERAL TAX PENALTY MAY APPLY IF A SURRENDER,
WITHDRAWAL, OR DISTRIBUTION
IS TAKEN PRIOR TO THE TAXPAYER'S ATTAINMENT OF AGE 59 1/2.
FREE LOOK PERIOD
10 DAY RIGHT TO EXAMINE CERTIFICATE. IF NOT SATISFIED WITH
THE CERTIFICATE,
RETURN IT TO THE COMPANY OR THE SCHWAB ANNUITY SERVICE CENTER
WITHIN 10 DAYS OF
RECEIVING IT. THE CERTIFICATE WILL BE VOID FROM THE START, AND
THE COMPANY WILL REFUND THE GREATER OF: 1) CONTRIBUTIONS
RECEIVED; OR
2) THE ANNUITY ACCOUNT VALUE LESS SURRENDERS, WITHDRAWALS, AND
DISTRIBUTIONS.
<PAGE>
FLEXIBLE PREMIUM FIXED AND VARIABLE DEFERRED GROUP ANNUITY.
Contributions may be made until the Payment Commencement Date
or until the death
benefit is payable to a Beneficiary. The Owner is as shown
on the Certificate
Data Page unless changed as provided for in this Certificate.
The Company will
pay the Annuitant the first of a series of annuity
payments on the annuity
commencement date by applying the Annuity Account Value
with a Market Value
Adjustment, if applicable, of the Owner's Annuity Account
according to the
Payment Options Provisions. Subsequent payments will be paid
on the same day of
each frequency period according to the provisions of this
Certificate. Any
paid-up annuity, cash surrender value or death benefits
that may be available
under this Certificate will not be less than the minimum
benefits required by
any statute of the state in which this Certificate is
delivered.
Non-Participating. Not eligible to share in the Company's
divisible surplus.
Signed for First Great-West Life & Annuity Insurance Company
on the issuance of
this Certificate.
[GRAPHIC OMITTED] [GRAPHIC OMITTED]
D.C. Lennox, W.T. McCallum,
Secretary President and Chief
Executive Officer
J434 NY
(97)
<PAGE>
<PAGE>
Table
of Contents
Use this Table of Contents to locate
specific topics in
this annuity Certificate.
DEFINITIONS......................................................
......3
GENERAL PROVISIONS
E n t i r e
Contract....................................................5
C e r t i f i c a t e
Modification...........................................5
Non-Participating................................................
..5
Misstatement of Age or
Sex.........................................5
Reports..........................................................
..6
N o t i c ea n d
Proof...................................................6
T a x C o n s e q u e n c e s o f
Payments.......................................6
Currency.........................................................
..6
V o t i n g
Rights......................................................6
OWNERSHIP PROVISIONS
R i g h t s o f
Owner....................................................6
<PAGE>
Beneficiary......................................................
..6
D e s i g n a t i o n o f
Beneficiary........................................6
C h a n g e o f
Beneficiary..............................................7
D e a t h o f
Beneficiary...............................................7
S u c c e s s i v e
Beneficiaries...........................................7
Annuitant........................................................
..7
C o n t i n g e n t
Annuitant...............................................7
C h a n g e o f
Ownership................................................7
C o l l a t e r a l
Assignment..............................................7
O w n e r s h i p o f S e r i e s
Account.......................................7
CONTRIBUTIONS PROVISIONS
E f f e c t i v e
Date.....................................................8
Contributions....................................................
..8
A l l o c a t i o n o f
Contributions.......................................8
ACCOUNT VALUE AND MARKET VALUE ADJUSTMENT PROVISIONS
Certificate Maintenance
Charge.....................................8
V a r i a b l e A c c o u n t
Value.............................................8
A c c u m u l a t i o n
Units.................................................9
A c c u m u l a t i o n U n i t
Value............................................9
N e t I n v e s t m e n t
Factor..............................................9
R i s k
Charge........................................................9
<PAGE>
Guarantee Period Fund.........................................9
Value of Guarantee Period.....................................10
Allocation at Guarantee Period Maturity Date..................10
Breaking a Guarantee Period...................................10
Market Value Adjustment.......................................11
<PAGE>
Table of
Contents (continued)
Use this Table of Contents to locate specific topics
in this annuity
Certificate.
TRANSFER PROVISIONS
Transfers........................................................
.11
D o l l a rC o s t
Averaging.............................................12
T h e R e b a l a n c e r
Option.............................................12
DEATH BENEFIT PROVISIONS
P a y m e n t o f D e a t h
Benefit..........................................13
D i s t r i b u t i o n
Rules...............................................13
Compliance with Code Section
72(s)................................14
SURRENDERS AND PARTIAL WITHDRAWALS
<PAGE>
S u r r e n d e r
Benefit.................................................14
P a r t i a l
Withdrawals...............................................14
Postponement.....................................................
.15
PAYMENT OPTIONS
H o w t o
Elect......................................................15
Selection of Payment
Options......................................15
Variable Annuity Payment
Options..................................15
Fixed Annuity Payment
Options.....................................16
P e r i o d i c W i t h d r a w a l
Option........................................17
How to Elect Periodic
Withdrawals.................................17
Periodic Withdrawal Options
Available.............................17
<PAGE>
<PAGE>
Definitions
Accumulation Period - the period between the Effective
Date and the Payment
Commencement Date.
Accumulation Unit - an accounting measure used to determine
the Variable Account
Value before the date annuity payments commence.
Annuitant - the person named in the application and in the
Certificate Data Page
upon whose life the payment of an annuity is based and who
will receive annuity
payments. If a Contingent Annuitant is named, then the
Annuitant will be
considered the Primary Annuitant.
Annuity Account - an account that reflects the total
value of the Owner's
Variable and Fixed Sub-Accounts.
Annuity Account Value - the sum of the Variable and Fixed
Sub-Accounts credited
to the Owner under the Annuity Account.
Annuity Payment Period - the period beginning on the Payment
Commencement Date
and continuing until all annuity payments have been made under
this Certificate.
<PAGE>
Annuity Unit - an accounting measure used to determine the
dollar value of any
variable dollar annuity payment after the first annuity
payment is made.
Automatic Contribution Plan - a plan provided to the
Owner to allow for
automatic payment of Contributions. The Contribution amount
will be withdrawn
from a pre-authorized account and automatically credited to
the Annuity Account.
Beneficiary - the person(s) designated by the Owner to
receive death proceeds
which may become payable upon the death of an Owner or the
Annuitant. If the
surviving spouse of an Owner is the surviving Joint Owner,
the surviving spouse
will be deemed to be the Beneficiary upon such Owner's
death and may take the
death benefit or elect to continue this Certificate in force.
The Beneficiary is
<PAGE>
shown on the Certificate Data Page unless later changed by the
Owner.
Certificate - the document issued to the Owner which
specifies the rights and
obligations of the Owner.
Company - First Great-West Life & Annuity Insurance Company,
the underwriter
for this annuity, located at 125 Wolf Road, Albany, New York
12205.
Contingent Annuitant - the person named in the application
who will become the
Annuitant upon the death of the Primary Annuitant. The
Contingent Annuitant is
the person named in the Certificate Data Page, unless later
changed by Request
while the Primary Annuitant is alive and before annuity
payments have commenced.
Contract - the document issued to the Policyholder which
specifies the rights
and obligations of the Policyholder.
Contractual Guarantee of a Minimum Rate of Interest -
the minimum interest rate applicable to each Fixed
Sub-Account in effect at the time the Contribution is
made. The Contractual Guarantee of a Minimum Rate
of Interest is 3%.
Contributions - purchase amounts received and allocated to the
Variable or Fixed
Sub-Account(s) prior to any Premium Tax or other deductions.
<PAGE>
Effective Date - the date on which the first Contribution
is credited to the
Annuity Account.
Eligible Fund - a registered management investment company
in which the assets
of the Series Account may be invested.
Fixed Account Value - the sum of the values of the Fixed
Sub-Accounts credited
to the Owner under the Annuity Account.
Fixed Sub-Accounts - the sub-division(s) of the Annuity
Account described in the
<PAGE>
Certificate and in the attached Fixed Sub-Account Riders, if
any.
Guarantee Period - one of the time intervals of the
Guarantee Period Fund
available under this Certificate. The Company will specify
the Guarantee Period
time intervals that are available and the predetermined
rate of interest that
will apply to each of the Guarantee Period time intervals.
This rate of interest
will be equal to the annual effective rate in effect
at the time the
Contribution is made and as reflected in written
confirmation of the
Contribution. The Company may stop offering any time
interval at any time for
new Contributions. Amounts allocated to one or more
Guarantee Periods may be
subject to a Market Value Adjustment. Definitions (continued)
Guarantee Period Fund - A type of Fixed Sub-Account.
Guarantee Period Maturity Date - the last day of any Guarantee
Period.
Individual Retirement Annuity (IRA) - an annuity Contract
used for a retirement
savings program that is intended to satisfy the requirements
of Section 408 of
the Internal Revenue Code of 1986, as amended.
Investment Division - a division of the Series Account
containing the shares of
<PAGE>
a specific portfolio of the Eligible Fund. There is an
Investment Division for
each portfolio of the Eligible Fund.
Market Value Adjustment - an adjustment which may be made
to amounts paid out
before the Guarantee Period Maturity Date due to
surrenders, partial
withdrawals, Transfers, and amounts applied to a periodic
withdrawal or to
purchase an annuity, as applicable. The Market Value
Adjustment may increase or
decrease the amount payable on one of the above described
distributions. A
negative adjustment may result in an effective interest
rate lower than the
Contractual Guarantee of a Minimum Rate of Interest
applicable to this Contract
and the value of the Contribution(s) allocated to the
Guarantee Period being
less than the Contribution(s) made.
Non-qualified Annuity Certificate - an annuity Certificate
which is not intended
to be a part of a qualified retirement plan and is not
intended to satisfy the
requirements of Section 408 of the Internal Revenue Code of
1986, as amended.
<PAGE>
Owner (Joint Owners) - the person or persons named in the
Certificate Data Page.
The Owner is entitled to exercise all rights and
privileges under the
Certificate, while the Annuitant is living, except as
reserved by the
Policyholder. Joint Owners must be husband and wife as of the
Effective Date.
The Annuitant will be the Owner unless otherwise indicated
in the application.
If a Certificate is purchased as an Individual Retirement
Annuity under Section
408 of the Code, the Annuitant must be the sole Owner; no
Joint Owner may be
named.
Payment Commencement Date - the date on which annuity
payments or periodic
withdrawals commence under a payment option. The Payment
Commencement Date must
be at least one year after this Certificate's Effective
Date. If a Payment
Commencement Date is not shown on the Certificate Data Page,
annuity payments
will begin on the first day of the month of the Annuitant's
90th birthday. The
Payment Commencement Date may be changed by the Owner prior
to commencement of
annuity payments or it may be changed by the Beneficiary
upon the death of an
Owner. If this is an IRA Certificate, payments which
satisfy the minimum
distribution requirements of the Code must begin no
later than the
Owner/Annuitant's attainment of age 70 1/2.
Policyholder - the organization entering into the
contract and whose name
appears on the Certificate Data Page as the Policyholder.
<PAGE>
Premium Tax - the amount of tax, if any, charged by a
state or other
governmental authority.
Request - any instruction in a form satisfactory to the
Company and received at
the Schwab Annuity Service Center (or other annuity service
center subsequently
named) from the Owner or the Owner's designee (as specified in
a form acceptable
to the Company) or the Beneficiary, (as applicable) as
required by any provision
of this Certificate or as required by the Company. The Request
is subject to any
action taken or payment made by the Company before it was
processed.
Schwab Annuity Service Center - Post Office Box 7806, San
Francisco, California 94120-7806. The toll-free telephone
number is 1-800-838-0649.
Simplified Employee Pension (SEP) - an Individual Retirement
Annuity (IRA) which
may accept Contributions from one or more employers under a
retirement savings
program intended to satisfy the requirements of Section
408(k) of the Internal
<PAGE>
Revenue Code of 1986, as amended.
Series Account - the segregated investment account
established by the Company
under New York law and registered as a unit investment
trust under the
Investment Company Act of 1940, as amended.
Surrender Value - will be equal to:
(a) Annuity Account Value with a Market Value
Adjustment, if applicable, on the effective date
of the surrender; less
(b) Premium Tax, if any.
Definitions (continued)
Transaction Date - the date on which any Contribution or
Request from the Owner
will be processed by the Company at the Schwab Annuity
Service Center.
Contributions and Requests received after 4:00 p.m. EST/EDT
will be deemed to
have been received on the next business day. Requests will be
processed and the
Variable Account Value will be valued on each date that
the New York Stock
Exchange is open for trading.
Transfer - the moving of money from one sub-account
to one or more
sub-account(s).
<PAGE>
Valuation Date - the date on which the net asset value of
each Eligible Fund is
determined.
Valuation Period - the period between two successive Valuation
Dates.
Variable Account Value - the sum of the values of the
Variable Sub-Accounts
credited to the Owner under the Annuity Account. The
Variable Account Value is
credited with a return based upon the investment experience
of the Investment
Division(s) selected by the Owner and will increase or
decrease accordingly.
<PAGE>
Variable Sub-Accounts - sub-division(s) of the Owner's
Annuity Account
containing the value credited to the Owner from an Investment
Division.
General Provisions
What is your agreement with us?
ENTIRE CONTRACT
This Certificate, Certificate Data Page, riders and
amendments, if any, form the
Entire Contract between the Owner and the Company. This
Entire Contract
supersedes all prior representations, statements,
warranties, promises and
agreements of any kind, whether oral or written, relating to
the subject matter
of this Certificate. All statements in the application made
by an Owner or the
Annuitant will be considered representations and not
warranties.
How can this Certificate be modified?
CERTIFICATE MODIFICATION
Upon 30 days notice to the Policyholder, the Company may at
any time and without
the consent of the Policyholder or any other person, modify
this Certificate as
needed to conform to changes in tax or other law. Such
modifications will become
part of this Certificate. Nothing in the group annuity
<PAGE>
contract invalidates or
impairs any right granted to the Certificate Owner by
New York Statutes
Insurance Law Section 3219 or the Certificate.
If this Certificate is purchased as an IRA, the Company
reserves the right to
modify this Certificate to the extent necessary to qualify
it as an Individual
Retirement Annuity as described in Section 408 of the
Internal Revenue Code of
1986, as amended, and all related sections and regulations
which are in effect
during the term of this Certificate.The Company may
terminate certain Variable
and Fixed Sub-Accounts. In that event, the Owner, by
Request, may change the
allocation of the Contributions and maturing Guarantee
Periods. If no Request is
made by the date the sub-account is terminated, future
Contributions and
maturing Guarantee Periods will be allocated to the Money
Market Sub-Account.
Any modification will not affect the terms, provisions or
conditions which are,
or may be, applicable to Contributions previously made to
any such Variable
Sub-Account. Any modification will not affect the terms
of any unmatured
Guarantee Period or other Fixed Sub- Account, except as may
be described in the
<PAGE>
attached Fixed Sub-Account riders, if any.
The Company may cease offering existing variable or fixed
annuity payment
options.
ONLY THE PRESIDENT, A VICE-PRESIDENT, OR
THE SECRETARY OF THE COMPANY CAN MODIFY
OR WAIVE ANY PROVISION OF THIS CERTIFICATE.
NON-PARTICIPATING
This Certificate is non-participating. It is not eligible
to share in the
Company's divisible surplus.
What if the Annuitant's age or sex is misstated?
MISSTATEMENT OF AGE OR SEX
If the age or sex of the Annuitant has been misstated, the
annuity payments
established will be made on the basis of the correct age. If
payments were too
large because of misstatement, the difference with interest
may be deducted by
the Company from the next payment or payments. If payments
were too small, the
difference with interest may be added by the Company to the
next payment. The
interest rate used will be 3%.
General Provisions (continued)
<PAGE>
How will the Contract values be reported?
REPORTS
The Company will furnish the Owner, at least annually, a
statement of the
Annuity Account Value and the Surrender Value. The
Company will furnish the
Owner copies of any other notices, reports or documents
required by law.
What are the notice and proof requirements?
<PAGE>
NOTICE AND PROOF
Any notice or demand by the Company to or upon the Owner, or
any other person
may be given by mailing it to that person's last known
address as stated in the
Company's file. In the event of the death of an Owner or
the Annuitant, the
Company will require proof of death.
Any application, report, Request, election, direction,
notice or demand by the
Owner, or any other person, must be made in a form
satisfactory to the Company.
What are the tax consequences?
TAX CONSEQUENCES OF PAYMENTS
The Owner or Beneficiary, as the case may be, must
determine the timing and
amount of any benefit payable. Payments elected by the
Owner in the form of
periodic withdrawals, surrenders or partial withdrawals will
be tax reported to
the Owner. Annuity payments are payable to the
Annuitant and will be tax
reported to the Annuitant. Payments made to a Beneficiary
will be tax reported
to the Beneficiary. It is recommended that a competent tax
adviser be consulted
prior to obtaining any distribution from, or changing the
ownership of, this
Certificate. A 10% federal tax penalty may apply if a
surrender, withdrawal, or
distribution is taken prior to the taxpayer's attainment of
age 59 1/2.
Nothing contained herein will be construed to be tax or
legal advice. Neither
the Policyholder nor the Company assumes any responsibility or
<PAGE>
liability for any
damages or costs, including but not limited to taxes,
penalties, interest or
attorney's fees incurred by the Owner, the Annuitant, the
Beneficiary, or any
other person arising out of any such determination.
CURRENCY
All Contributions and all transactions will be in the
currency of the United
States of America.
What are the voting rights?
VOTING RIGHTS
The Company will vote the shares of an Eligible Fund. To the
extent required by
law, the Company will vote according to the
instructions of the Owner in
proportion to the interest in the Variable Sub-Account.
In such event, the
Company will send proxy materials and form(s) to the Owner
for a reply. If no
reply is received by the date specified in the proxy
materials, the Company will
<PAGE>
vote shares of the appropriate Eligible Fund in the same
proportion as shares of
the Eligible Fund for which replies have been received.
During the Annuity Payment Period, the number of votes
will decrease as the
assets held to fund annuity payments decrease. The Owner
will be entitled to
receive the proxy materials and form(s).
Ownership Provisions
What are the Owner's rights?
RIGHTS OF OWNER
While the Annuitant is living, the Owner has the sole and
absolute power to
exercise all rights and privileges in this Certificate.
Upon the death of an
Owner or the Annuitant, the Death Benefit Provisions section
will
apply.
How is the Beneficiary determined?
BENEFICIARY
The Owner may, while the Annuitant is living, designate or
change a Beneficiary
by Request from time to time as provided below. If an
Owner dies and the
surviving Joint Owner is the surviving spouse of the
deceased Owner, such
surviving spouse will become the Beneficiary and may take
the death benefit or
elect to continue this Certificate in force.DESIGNATION OF
<PAGE>
BENEFICIARY
Unless changed as provided below, or as otherwise
required by law, the
Beneficiary will be as shown on the Certificate Data Page.
Unless otherwise
indicated, if more than one Beneficiary is designated,
then each such
Beneficiary so designated will share equally in any
benefits and or rights
granted by the Contract to such Beneficiary or allowed by
the Company. If the
Beneficiary is a partnership, any benefits will be paid to the
partnership as it
existed at the time of an Owner's or the Annuitant's death.
The Company may rely
on an affidavit by any responsible person to identify a
Beneficiary or verify
the non-existence of a Beneficiary not identified by name.
Ownership Provisions
(continued)
<PAGE>
CHANGE OF BENEFICIARY
The Owner may, while the Annuitant is living, change the
Beneficiary by Request.
The Company shall not be bound by any change of Beneficiary
unless it is made in
writing and recorded at the Schwab Annuity Service
Center. A change of
Beneficiary will take effect as of the date the Request is
processed at the
Schwab Annuity Service Center, unless a certain date is
specified by the Owner.
If an Owner dies before the date the Request was processed,
the change will take
effect as of the date of the Request, unless the Company
has already made a
payment or has otherwise taken action on a designation or
change before receipt
or processing of such Request. A Beneficiary designated
irrevocably may not be
changed without the written consent of that Beneficiary,
except to the extent
required by law.
DEATH OF BENEFICIARY
The interest of any Beneficiary who dies before an Owner or
the Annuitant will
terminate at the death of such Beneficiary. The interest of
any Beneficiary who
dies at the time of, or within 30 days after, the death
of an Owner or the
Annuitant will also terminate if no benefits have been paid to
such Beneficiary,
unless the Owner has indicated otherwise by Request. The
benefits will then be
paid as though the Beneficiary had died before the deceased
<PAGE>
Owner or Annuitant.
SUCCESSIVE BENEFICIARIES
If an Owner dies, and the surviving Joint Owner is the
surviving spouse of the
deceased Owner, the surviving spouse will become the
Beneficiary and may take
the death benefit or elect to continue this Certificate in
force. If there is no
surviving Joint Owner, and no named Beneficiary is alive
at the time of an
Owner's death, any benefits payable will be paid to the
Owner's estate.
ANNUITANT
While the Annuitant is living and at least 30 days
prior to the annuity
commencement date, the Owner may, by Request, change the
Annuitant. A change of
Annuitant will take effect as of the date the Request is
processed at the Schwab
Annuity Service Center.
<PAGE>
How is the Contingent Annuitant determined?
CONTINGENT ANNUITANT
While the Annuitant is alive, the Owner may, by Request,
designate or change a
Contingent Annuitant from time to time. A change of
Contingent Annuitant will
take effect as of the date the Request is processed at
the Schwab Annuity
Service Center, unless a certain date is specified by
the Owner. Can the
ownership of this Certificate be changed?
CHANGE OF OWNERSHIP
If this is an IRA Certificate, the Owner's right to change
the ownership is
restricted. An IRA Certificate may not be sold,
assigned, transferred,
discounted or pledged as collateral for a loan or as
security for the
performance of an obligation or for any other purpose to any
person other than
as may be required or permitted under Section 408 of the
Internal Revenue Code
of 1986, or under any other applicable section of the Code, as
amended.
If this is a non-qualified Certificate, the Owner may change
the ownership while
the Annuitant is living. Any change of ownership must be
made by Request on a
form satisfactory to the Company. The change will take effect
as of the date the
Request is processed at the Schwab Annuity Service Center,
unless a certain date
is specified by the Owner, and is subject to any action taken
or payment made by
the Company before it was processed.
Can this Certificate be assigned?
<PAGE>
COLLATERAL ASSIGNMENT
If this is an IRA Certificate, the Owner may not assign
this Certificate as
collateral.
If this is a non-qualified Certificate, the Owner can assign
this Certificate as
collateral while the Annuitant is living. The interest of
the assignee has
priority over the interest of the Owner and the interest of
any Beneficiary. Any
amounts payable to the assignee will be paid in a single sum.
A copy of any assignment must be submitted to the Company at
the Schwab Annuity
Service Center. Any assignment is subject to any action taken
or payment made by
the Company before the assignment was processed. The Company
is not responsible
for the validity of any assignment. An assignment, pledge or
agreement to assign
or pledge any portion of the Annuity Account Value generally
will be treated as
a distribution. It is recommended that a competent tax
adviser be consulted
prior to making such a change to this Certificate.
<PAGE>
Who owns the Series Account?
OWNERSHIP OF SERIES ACCOUNT
The Company has absolute ownership of the assets of the
Series Account. The
portion of the assets of the Series Account equal to the
reserves and other
Certificate liabilities with respect to the Series Account
are not chargeable
with liabilities arising out of any other business the Company
may conduct.
Contributions Provisions
What is the Effective Date?
EFFECTIVE DATE
The Effective Date, shown on the Certificate Data Page, is
the date the initial
Contribution is credited to the Annuity Account.
How may Contributions be made?
CONTRIBUTIONS
Contributions should be payable to First Great-West Life &
Annuity Insurance
Company (the Company) at the Schwab Annuity Service Center
at any time during
the Accumulation Period. All Contributions must be paid in a
form acceptable to
<PAGE>
the Company, during the lifetime of the Annuitant and
before the Payment
Commencement Date. Coverage will begin on the Effective Date.
At any time after the Effective Date, the Owner may
make additional
Contributions. The minimum amount accepted after the initial
Contribution is
$500 except subsequent payments made via an Automatic
Contribution Plan have a
minimum of $100 per month. Total Contributions while this
Certificate is in
force may exceed $1,000,000 with prior approval from the
Company. The Company
may modify these limitations.
How are Contributions allocated?
ALLOCATION OF CONTRIBUTIONS
<PAGE>
During the Free Look Period, all Contributions will be
processed as follows:
Amounts to be allocated to one or more of the Fixed
Sub-Accounts will be
allocated as directed, effective upon the Transaction
Date. (Allocation
will not be delayed until the end of the Free
Look Period.)
Amounts to be allocated to one or more of the Variable
Sub-Accounts will first
be allocated to the Money Market Sub-Account and
will remain there
until the next Transaction Date following end of
the Free Look Period
plus five calendar days. On that date, the Variable
Account Value held
in the Money Market Sub-Account will be allocated
to the Variable
Sub-Accounts selected by the Owner. During the Free
Look Period, the
Owner may re-allocate among the Variable Sub-
Accounts.
If the Certificate is returned during the Free Look
Period, it will be void from the start, and the Company
will refund the greater of: 1) Contributions received; or
2) the Annuity Account Value less surrenders,
withdrawals, and distributions.
After the Free Look Period, subsequent Contributions will
be allocated in the
Annuity Account as Requested by the Owner. If there
are no accompanying
instructions, then allocations will be made in
accordance with standing
instructions. Allocations will be effective upon the
Transaction Date.
<PAGE>
Account Value and Market Value Adjustment Provisions
What is the annual Certificate Maintenance Charge?
CERTIFICATE MAINTENANCE
CHARGE The following charge is applicable to a Certificate
having an Annuity
Account Value of less than $50,000. Each year,
beginning on the first
anniversary of the Certificate Effective Date, a Certificate
Maintenance Charge
of not more than $25 will be deducted from the Annuity
Account. This charge will
be deducted from the Money Market Fund Sub-Account. If there
is not sufficient
value in the Money Market Sub-Account to cover all of
the Certificate
Maintenance Charge, the remainder will be deducted
proportionately from the
other Variable Sub-Accounts based on their relative
values. If there is not
sufficient value in the Variable Sub-Accounts, then the
remainder will be
deducted from the Fixed Sub- Accounts. There is no
Certificate Maintenance
Charge after the Annuity Commencement Date. There is no
Market Value Adjustment
on amounts taken from Fixed Sub-Accounts for a Certificate
Maintenance Charge.
VARIABLE ACCOUNT PROVISIONS
<PAGE>
How is the Variable Account Value determined?
VARIABLE ACCOUNT VALUE
The Variable Account Value for the Owner on any date during
the Accumulation
Period will be the sum of the values of the Variable
Sub-Accounts.
The value of the Owner's interest in a Variable Sub- Account
will be determined
by multiplying the number of the Owner's Accumulation Units
by the accumulation
unit value for that Variable Sub-Account.
Account Value and Market Value
Adjustment Provisions (continued)
ACCUMULATION UNITS
For each Contribution, the number of Accumulation Units
credited for the Owner
to a Variable Sub-Account will be determined by dividing
the amount of the
Contribution, less Premium Tax, if any, by the accumulation
unit value for that
Variable Sub-Account on the applicable Transaction Date.
ACCUMULATION UNIT VALUE
The initial accumulation unit value of each Variable
Sub- Account was
established at $10. The accumulation unit value of a Variable
<PAGE>
Sub-Account on a
Valuation Date is calculated by multiplying the accumulation
unit value as of
the immediately preceding Valuation Date by the net
investment factor as
described in the Net Investment Factor provision below.
The dollar value of an Accumulation Unit will vary in amount
depending on the
investment experience of the Eligible Fund and charges
taken from the
Sub-Account.
NET INVESTMENT FACTOR
The net investment factor for any Variable Sub-Account for
any Valuation Period
<PAGE>
is determined by dividing (a) by (b), and subtracting (c) from
the result where:
(a) is the net result of:
(i) the net asset value per share of the Eligible Fund
shares held in the
Variable Sub-Account determined as of the end
of the current
Valuation Period; plus
(ii) the per share amount of any dividend (or, if
applicable, capital gain
distributions) made by the applicable Eligible Fund
on shares held in
the Variable Sub-Account if the "ex-dividend" date
occurs during the
current Valuation Period; minus or plus
(iii) a per unit charge or credit for any taxes incurred
by or reserved for
in the Variable Sub-Account, which is determined
by the Company to
have resulted from the investment operations
of the Variable
Sub-Account.
(b) is the net result of:
(i) the net asset value per share of the Eligible Fund
shares held in the
Variable Sub-Account determined as of the end
of the immediately
preceding Valuation Period; minus or plus
(ii) the per unit charge or credit for any taxes
incurred by or reserved
for in the Variable Sub-Account for the
immediately preceding
Valuation Period.
(c) is an amount representing the risk charge deducted
from each Variable
Sub-Account on a daily basis, equal to an annual
rate as shown in the
table below as a percentage of the daily net asset
value of each Variable
Sub-Account. This charge will not exceed:
<PAGE>
Mortality: Expense: Total:
.68% maximum .17% maximum .85% maximum
The net investment factor may be greater than, less than,
or equal to one.
Therefore, the accumulation unit value may increase,
decrease or remain
unchanged.
The per share amount of any dividend referred to in paragraph
(a)(ii) includes a
deduction for an investment advisory fee. This fee
compensates the investment
adviser for services provided to the Eligible Fund. The fee
may differ between
Eligible Funds and may be renegotiated each year.
RISK CHARGE
<PAGE>
The risk charge compensates the Company for its assumption of
certain mortality
and expense risks. This charge is set forth above in the Net
Investment Factor
provision.
FIXED ACCOUNT PROVISIONS
How is the Fixed Account Value determined?
GUARANTEE PERIOD FUND
The Guarantee Period Fund is a type of Fixed Sub-
Account. The Owner, by
Request, may allocate all or a portion of a Contribution to
any of the several
Guarantee Periods then offered by the Company. The sum of
the values of the
Owner's Guarantee Periods is the value of the Owner's
interest in the Guarantee
Period Fund.
Account Value and Market Value
Adjustment Provisions (continued)
What is the value of each Guarantee Period?
VALUE OF GUARANTEE PERIOD
All Contributions allocated to a Guarantee Period will earn
an annual effective
rate of interest equal to the rate stated by the Company
for the applicable
Guarantee Period from the Transaction Date to the end of the
Guarantee Period.
The account will be credited daily with interest earned.
If the Owner does not break a Guarantee Period, the annual
effective rate will
be at least the Contractual Guarantee of a Minimum Rate of
Interest. If the
Owner breaks a Guarantee Period, a Market Value Adjustment may
apply. The Market
Value Adjustment is applied to the amount of Transfer or
<PAGE>
withdrawal Requested
and a negative adjustment may cause the amount Transferred
or withdrawn to be
less than the amount Requested.
Each Guarantee Period has its own value, which is calculated
as follows:
the Owner's Contributions, less Premium Tax, if any, in
that Guarantee Period; plus
interest earned; less
amounts Transferred, distributed, surrendered (in whole
or in part), or applied to an annuitization
option; less
periodic withdrawals; less
A"A Certificate Maintenance Charges.
<PAGE>
ALLOCATION AT GUARANTEE PERIOD
MATURITY DATE
At any time prior to the Guarantee Period Maturity Date, the
Owner may Request
to allocate the maturity value of that Guarantee Period
among any of the
Variable and Fixed Sub-Accounts then offered by the
Company under this
Certificate. The election is effective on its Guarantee Period
Maturity Date.
If the election is not received at the Schwab Annuity
Service Center prior to
the Guarantee Period Maturity Date, the value of the matured
Guarantee Period
will be allocated to a new Guarantee Period with the same
Guarantee Period as
the matured Guarantee Period. If the new Guarantee Period
would mature later
than the Payment Commencement Date, the value will be
allocated to the Guarantee
Period that matures closest to the Payment Commencement Date.
If the Company is not then offering the same Guarantee
Period under the
Certificate, the value of the matured Guarantee Period will
be allocated to a
new Guarantee Period with the closest shorter Guarantee Period
then available.
If none of the above is available, the value of the matured
Guarantee Period
will be allocated to the Money Market Sub-Account.
If held to maturity, amounts from a matured Guarantee Period
allocated to a new
Guarantee Period or other Fixed Sub-Account will earn the
<PAGE>
annual effective rate
applicable to that Guarantee Period or Fixed Sub- Account.
This annual effective
rate may differ from the annual effective rate
applicable to the matured
Guarantee Period.
What if the Guarantee Period is broken prior to maturity?
BREAKING A GUARANTEE PERIOD
Any Transfer, surrender (in whole or in part), distribution
due to death, or the
selection of an annuity option prior to the Guarantee Period
Maturity Date will
be known as breaking a Guarantee Period. When a Request to
break a Guarantee
Period is received, the Guarantee Period that is closest to
the Guarantee Period
Maturity Date will be broken first.
If a Guarantee Period is broken, a Market Value
Adjustment may be assessed. The Market Value
Adjustment may increase or decrease the value of the
<PAGE>
amount being Transferred or withdrawn from the
Guarantee Period. The Market Value Adjustment is
described below.
Account Value and Market Value
Adjustment Provisions (continued)
MARKET VALUE ADJUSTMENT
Distributions from the amounts allocated to a Guarantee
Period due to a full
surrender or partial withdrawal, Transfer, application
of amounts to the
Periodic Withdrawal Option or to purchase an annuity,
prior to a Guarantee
Period Maturity Date will be subject to a Market Value
Adjustment ("MVA"). An
MVA may increase or decrease the amount payable on one of
the above described
distributions. The Amount Available for a full surrender,
partial withdrawal, or
Transfer is the Amount Requested plus the MVA.
Amount Available = Amount Requested +
MVA
The MVA is calculated by multiplying the amount Requested
by the Market Value
Adjustment Factor ("MVAF"). The formula used to determine the
MVA
is:
MVA = (Amount Requested) X
(MVAF)
The Market Value Adjustment Factor (MVAF) is:
[GRAPHIC
OMITTED]-1
where:
i is the U.S. Treasury Strip ask side yield as published
<PAGE>
in The Wall Street
Journal on the last business day of the week prior to
the date the stated
rate of interest was established for the Guarantee
Period. The term of i
is measured in years and equals the term of the
Guarantee Period; and
j is the U.S. Treasury Strip ask side yield as published in
The Wall
Street Journal on the last business day of the week
prior to the week the
Guarantee Period is broken. The term of j equals the
remaining term to
maturity of the Guarantee Period, rounded up to the
higher number of
years; and
N is the number of complete months remaining until
maturity.
The Market Value Adjustment will equal 0 if N is less than 6.
If The Wall Street Journal ceases to publish the U.S.
Treasury Strip ask side
yield, an alternate source for the same index will be used.
If the Treasury
Strip ask side yield is not published anywhere, an appropriate
substitute index
<PAGE>
of publicly traded obligations will be chosen.
The Market Value Adjustment will apply to any Guarantee
Period broken six or
more months prior to the Guarantee Period Maturity Date in
each of the following
situations:
Transfers to another Guarantee Period, Fixed Sub- Account
or to an Investment
Division offered under this Certificate; or
Surrenders, partial withdrawals, annuitization or periodic
withdrawals.
The Market Value Adjustment will not apply to any Guarantee
Period having fewer
than 6 months prior to the Guarantee Period Maturity
Date in each of the
following situations:
Transfer to another Guarantee Period, Fixed Sub- Account
or to a Variable
Sub-Account offered under this Certificate; or
Surrenders, partial withdrawals, annuitization or periodic
withdrawals.
<PAGE>
Transfer Provisions
Can Transfers be made between the Fixed and Variable
Sub-Accounts?
TRANSFERS
The Owner may make Transfers by Request. The
following provisions apply:
(a) At any time prior to the date annuity payments
begin, the Owner, by Request, may Transfer all or
a portion of the Annuity Account Value among the
Variable and Fixed Sub-Accounts currently offered
by the Company. No Transfers are permitted after
<PAGE>
the election of a fixed annuity payment option;
however, if a variable annuity payment option is
elected, Transfers may be made from one Variable
Sub-Account to another.
(b) A Transfer will be effective upon the Transaction
Date.
(c) A Transfer from Fixed Sub-Accounts will be
subject to the terms of the Fixed Account
Provisions and the attached Fixed Sub-Account
Rider(s), if any. The Annuity Account Value may
be Transferred prior to the Guarantee Period
Maturity Date. The Market Value Adjustment will
be assessed except in the situations described in
the Market Value Adjustment Provision.
<PAGE>
(d) There is no administrative charge for the first
twelve Transfers made in a calendar year. There is
a $10 administrative fee for each subsequent
Transfer. All Transfers made on a single
Transaction Date will be aggregated to count as
only one Transfer toward the twelve free Transfers;
however, if a one time rebalancing Transfer also
occurs on the Transaction Date, it will be counted
as a separate and additional Transfer.
Transfer Provisions (continued)
Is Dollar Cost Averaging offered?
DOLLAR COST AVERAGING
By Request, the Owner may elect Dollar Cost Averaging in order
to purchase units
of the Variable Sub-Accounts over a period of time.
The Owner may Request to automatically Transfer a
predetermined dollar amount,
subject to the Company's minimum, at regular intervals
from any one or more
designated Variable Sub-Accounts to one or more of the
remaining, then
available, Variable Sub-Accounts. The unit value will be
determined on the dates
of the Transfers. The Owner must specify the percentage to be
Transferred into
each designated Variable Sub-Account. Transfers may be set up
on any one of the
following frequency periods: monthly, quarterly,
semiannually, or annually. The
Transfer will be initiated on the Transaction Date one
frequency period
following the date of the Request. The Company will provide
a list of Variable
Sub-Accounts eligible for Dollar Cost Averaging which may be
modified from time
to time. Amounts Transferred through Dollar Cost
Averaging are not counted
against the twelve free Transfers allowed in a calendar year.
The Owner may terminate Dollar Cost Averaging at any time
by Request. Dollar
Cost Averaging will terminate automatically upon the annuity
commencement date.
<PAGE>
Participation in Dollar Cost Averaging and the Rebalancer
Option at the same
time is not allowed. Participation in Dollar Cost Averaging
does not assure a
greater profit, or any profit, nor will it prevent or
necessarily alleviate
losses in a declining market. The Company reserves the right
to modify, suspend,
or terminate Dollar Cost Averaging at any time.
Is rebalancing available?
THE REBALANCER OPTION
By Request, the Owner may elect the Rebalancer Option in
order to automatically
Transfer among the Variable Sub-Accounts on a periodic
basis. This type of
automatic Transfer program automatically reallocates the
Variable Account Value
to maintain a particular percentage allocation among
Variable Sub-Accounts
selected by the Owner. The amount allocated to each Variable
Sub-Account will
grow or decline at different rates depending on the investment
experience of the
Variable Sub-Account.
The Owner may Request that rebalancing occur one time only,
in which case the
Transfer will take place on the Transaction Date of the
Request. This Transfer
will count as one Transfer towards the twelve free Transfers
<PAGE>
allowed in a calendar year.
Rebalancing may also be set up on a quarterly, semiannual,
or annual basis, in
which case the first Transfer will be initiated on the
Transaction Date one
frequency period following the date of the Request. On the
Transaction Date for
the specified Request, assets will be automatically
reallocated to the selected
funds. Rebalancing will continue on the same Transaction
Date for subsequent
periods. In order to participate in the Rebalancer Option,
the entire Variable
Account Value must be included. Transfers set up with these
frequencies will not
count against the twelve free Transfers allowed in a calendar
year.
The Owner must specify the percentage of Variable Account
Value to be allocated
to each Variable Sub-Account and the frequency of
rebalancing. The Owner may
terminate the Rebalancer Option at any time by Request. The
Rebalancer Option
will terminate automatically upon the annuity commencement
date.
Participation in the Rebalancer Option and Dollar Cost
Averaging at the same
time is not allowed. Participation in the Rebalancer Option
does not assure a
greater profit, nor will it prevent or necessarily
alleviate losses in a
declining market. The Company reserves the right to
modify, suspend, or
terminate the Rebalancer Option at any time.
Death Benefit Provisions
How is the death benefit paid?
PAYMENT OF DEATH BENEFIT
Upon the death of an Owner or the Annuitant, the death
benefit will become
payable in accordance with these death benefit
<PAGE>
provisions following the
Company's receipt of a Request, while this Certificate is in
force.
The amount of the death benefit will be as follows:
If the Owner or Annuitant dies after the date annuity
payments commence and
before the entire interest has been distributed, the remaining
annuity payments,
if any, will be paid to the Beneficiary under the payment
option applicable on
the date of death. The Beneficiary will not be allowed to
change the method of
distribution in effect on the date of the Owner's or
Annuitant's death or to
elect a new payment option; or
If the Owner or Annuitant dies before the date annuity
payments commence, the
Company will pay proceeds to the Beneficiary the greater
of A and B, plus C
below:
A. the Variable Account Value as of the date the
Request for payment is received, less Premium Tax,
if any; and
B. the sum of Contributions allocated to the Variable
Sub-Account(s), less partial surrenders and
Periodic Withdrawals taken from the Variable
Sub-Account(s), less amounts Transferred to the
Fixed Sub-Account(s), less Premium Tax, if any.
<PAGE>
Plus
C. the Fixed Account Value as of the date the Request
for payment is received, less Premium Tax, if any.
When an Owner or the Annuitant dies before the annuity
commencement date and a
death benefit is payable to a Beneficiary, the death
benefit proceeds will
remain invested in accordance with the allocation
instructions given by the
Owner until new allocation instructions are Requested by
the Beneficiary or
until the death benefit is actually paid to the Beneficiary.
The death benefit
will be determined as of the date payments commence;
however, on the date a
payment option is processed, amounts in the Variable
Sub-Account will be
Transferred to the Money Market Investment Division
unless the Beneficiary
otherwise elects by Request. Distribution of the death
benefit may be Requested
to be made as follows (subject to the distribution rules set
forth below):
A. Proceeds from the Variable Sub-Account(s)
1. payment in a single sum; or
2. payment under any of the variable annuity options
provided under the Certificate.
B. Proceeds from the Fixed Sub-Account(s)
1. payment in a single sum; or
2. payment under any of the annuity options provided
under this Certificate.
DISTRIBUTION RULES
If Annuitant Dies Before Annuity Commencement Date
Upon the death of the Annuitant while the Owner is living,
and before the
<PAGE>
annuity commencement date, the death benefit provided under
the Certificate will
be paid to the Beneficiary unless there is a surviving
Contingent Annuitant.
If a Contingent Annuitant was named by the Owner prior to the
Annuitant's death,
and the Annuitant dies before the annuity commencement date,
while the Owner and
Contingent Annuitant are living, no death benefit will be
payable by reason of
the Annuitant's death and the Contingent Annuitant will become
the Annuitant.
If a corporation or other non-individual is an Owner,
or if the deceased
Annuitant is an Owner, the death of the Annuitant will be
treated as the death
of an Owner and the Certificate will be subject to the
death of an Owner
provisions described below.
If an Owner Dies Before Annuity Commencement Date If an
Owner dies before the
annuity commencement date, and such Owner was the
Annuitant, the following
provisions shall apply:
(1) If there is a Joint Owner (who is the surviving
spouse of the deceased
<PAGE>
Owner) and a Contingent Annuitant, the Joint Owner will
become the Owner and
the Beneficiary, the Contingent Annuitant will become the
Annuitant, and the
Certificate will continue in force;
(2) If there is a Joint Owner who is the surviving
spouse of the deceased
Owner but no Contingent Annuitant, the Joint Owner will
become the Owner,
the Annuitant and the Beneficiary, and may take the
death benefit or elect
to continue this Certificate in force;
(3) In all other cases, the Company will pay the
death benefit to the
Beneficiary even if a former spouse Joint Owner, the
Annuitant and/or the
Contingent Annuitant are alive at the time of an Owner's
death, unless the
sole Beneficiary is the deceased Owner's surviving
spouse and the
Beneficiary Requests to become the Owner and the
Annuitant, and to continue
the Certificate in force.
If an Owner dies before the annuity commencement date, and
such Owner was not
the Annuitant, the following provisions shall apply:
(1) If there is a Joint Owner who is the surviving
spouse of the deceased
Owner, the Joint Owner will become the Owner and
Beneficiary and may take
the death benefit or elect to continue this Certificate in
force. (2) In all
other cases, the Company will pay the death benefit to
the Beneficiary even
if a former spouse Joint Owner, the Annuitant
and/or the Contingent
Annuitant are alive at the time of the Owner's death,
unless the sole
Beneficiary is the
Death Benefit Provisions (continued)
deceased Owner's surviving spouse and such Beneficiary
Requests to become
<PAGE>
the Owner and the Annuitant and to continue the Certificate in
force.
To whom and when is the death benefit payable? Any death
benefit payable to the
Beneficiary upon an Owner's death will be distributed as
follows:
(1) If the Owner's surviving spouse is the person
entitled to receive
benefits upon the Owner's death, the surviving spouse will
be treated as the
Owner and will be allowed to take the death benefit
or continue the
Certificate in force.
(2) If a non-spouse individual is the person entitled to
receive benefits
upon the Owner's death, such individual may elect, not
later than one year
after the Owner's date of death, to receive the death
benefit in either a
single sum or payment under any of the variable or fixed
annuity options
available under the Certificate, provided that: (a)
such annuity is
distributed in substantially equal installments over
the life or life
expectancy of such Beneficiary; and (b) such
distributions begin not later
than one year after the Owner's date of death. If no
election is received
by the Company from an individual non- spouse
Beneficiary such that
substantially equal installments have begun no later
than one year after
the Owner's date of death, then the entire amount
must be distributed
within five years of the Owner's date of death; or
(3) If a corporation or other non-individual entity is
entitled to receive benefits upon the Owner's death,
<PAGE>
the
death benefit must be completely distributed within
five years of the
Owner's date of death.
The death benefit will be determined as of the date the
payments commence.
If Annuitant Dies After Annuity Commencement Date Upon
the death of the
Annuitant (or any Owner/Annuitant) after the annuity
commencement date, any
benefit payable must be distributed to the Beneficiary in
accordance with and at
least as rapidly as under the annuity option then in effect.
If an Owner Dies After Annuity Commencement Date and While
the Annuitant is
Living Upon the death of an Owner after the annuity
commencement date and while
the Annuitant is living, any benefit payable will continue to
be distributed to
the Annuitant at least as rapidly as under the annuity
option then in effect.
All of the Owner's rights granted under the Certificate
or allowed by the
Company will pass to any surviving Joint Owner and, if none,
to the Annuitant.
COMPLIANCE WITH CODE SECTION 72(s)
In any event, no payment of benefits provided under the
Certificate will be
allowed that does not satisfy the requirements of Code Section
72(s), as amended
from time to time, and any other applicable federal or
state law, rules or
regulations. These death benefit provisions will be
interpreted and administered
in accordance with such requirements.
Surrenders And Partial Withdrawals
Can withdrawals be made from this Certificate? SURRENDER
BENEFIT At any time
prior to the date annuity payments commence and subject to
the provisions of
<PAGE>
this Certificate, the Owner may surrender this Certificate
for the Surrender
Value which will be computed as of the Transaction Date. The
Company will make
the distribution, paid in a single sum, as soon as practical
after receipt of
the Request.
PARTIAL WITHDRAWALS
The Owner may make a partial withdrawal from the Annuity
Account Value at any
time, by Request, prior to the date annuity payments commence
and subject to the
terms of this Certificate. A Market Value Adjustment may
apply. The minimum
partial withdrawal amount is $500. After any partial
withdrawal, if the
remaining Annuity Account Value is less than $2,000, then a
full surrender may
be required.
By Request, the Owner must elect the Variable or Fixed
Sub-Account(s), or a
combination of them, from which a partial withdrawal is
to be made and the
amount to be withdrawn from each sub-account.
The Annuity Account Value will be reduced by the partial
withdrawal amount. The
partial withdrawal proceeds may be greater than or less
than the amount
requested, depending on the effect of the Market Value
Adjustment.
The following terms apply:
(a) No partial withdrawals are permitted after the date
annuity payments commence.
<PAGE>
(b) If a partial withdrawal is made within 30 days of
the date annuity
payments are scheduled to commence, the Company may
delay the Payment
Commencement Date by 30 days.
(c) A partial withdrawal will be effective upon the
Transaction Date.
(d) A partial withdrawal from a Fixed Sub-Account may be
subject to the Market
Value Adjustment Provisions, the Fixed Account
Provisions of this
Certificate, and the terms of the attached Fixed
Sub-Account Rider(s), if
any.
Surrenders And Partial Withdrawals
(continued)
POSTPONEMENT
In accordance with state law, if the Company receives a
Request for surrender or
partial withdrawal, the Company may postpone any cash payment
as follows:
from the Fixed Account Value, for no more than 6
months (30 days in West Virginia); and
from the Variable Account Value, for no more than 7 business
days.
During the postponement period:
the Fixed Sub-Account(s) will continue to earn
interest at the annual
effective rate applicable to the Guarantee Period
(or at the rate
applicable to the attached Fixed Sub-Account Riders,
if any) that was in
effect at the time the Request for surrender or
partial withdrawal was
made; and
the Variable Account Value will continue to be subject
to the investment
experience (gains or losses) of the underlying
Eligible Fund(s) and all
<PAGE>
applicable charges.
Payment Options
How are annuity payment options and the Periodic Withdrawal
Option
elected?
HOW TO ELECT
The Request of the Owner is required to elect, or change
the election of, a
payment option and must be received by the Company at least 30
days prior to the
Payment Commencement Date.
At any time prior to the Payment Commencement Date, the
Owner may Transfer
between Fixed and Variable Sub-Account options, subject
to the Transfer
provisions of this Certificate.
<PAGE>
However, on the Payment Commencement Date, the following
restrictions apply:
the Variable Account Value may be applied only to
any of the variable annuity payment options
available; and
the Fixed Account Value may be applied only to any of
the fixed annuity
payment options available.
If an option has not been elected within 30 days of the
Payment Commencement
Date:
The Variable Account Value will be applied under Variable
Annuity Payment
Option 1 to provide payments for life with a
guaranteed period of 20
years; and
The Fixed Account Value will be applied under Fixed
Annuity Payment
Option 3 to provide payments for life with a
guaranteed period of 20
years.
What guidelines apply to annuity payment options?
SELECTION OF PAYMENT OPTIONS
(a) A single sum payment may be elected. If so, the
amount to be paid is the Surrender Value.
(b) If a fixed annuity payment option is elected, the
amount to be applied is
the Fixed Account Value, as of the Payment
Commencement Date, plus a
Market Value Adjustment, if applicable, less
Premium Tax, if any.
(c) If a variable annuity payment option is elected, the
amount to be applied
is the Variable Account Value, as of the Payment
Commencement Date, less
Premium Tax, if any.
<PAGE>
(d) The minimum amount that may be withdrawn
from the Annuity Account Value to purchase an
annuity payment option is $2,000. If the amount
is less than $2,000, the Company may pay the
amount in a single sum subject to the Partial
Withdrawals Provision. Payments may be elected
to be received on any of the following frequency
periods: monthly, quarterly, semiannually, or
annually.
(e) Payments to be made under the annuity payment option
selected must be at
least $50. The Company reserves the right to make the
payments using the
most frequent payment interval which produces a
payment of not less than
$50.
(f) The maximum amount that may be applied under any
annuity payment option
is $1,000,000, unless prior approval is obtained from
the Company.
<PAGE>
(g) For information on electing periodic withdrawals,
refer to the Periodic
Withdrawal Option section on Page 17.
What variable annuity payment options are
available?
VARIABLE ANNUITY PAYMENT OPTIONS
The guaranteed annuity table is based on mortality from the
1983 Table (a) for
Individual Annuity Valuation and a guaranteed interest rate of
5% per year.
The following variable annuity payment options are available:
(a) Option 1: Variable Life Annuity with Guaranteed
Period
Payments for the guaranteed Annuity Payment Period
elected or the lifetime
of the Annuitant whichever is longer. The guaranteed
Annuity Payment
Period elected may be 5, 10, 15, or 20 years. Upon death
of the Annuitant,
the Beneficiary will begin to receive the remaining
payments at the same
interval elected by the Owner. See Table A.
Payment Options (continued)
(b) Option 2: Variable Life Annuity
Payments for the Annuitant's lifetime, without a
guaranteed period. See Table A. Upon death of
the Annuitant, all payments cease and no
amounts are payable to the Beneficiary.
(c) Option 3: Any Other Form
Any other form of variable annuity which is acceptable
to the Company.
<PAGE>
VARIABLE ANNUITY PAYMENT PROVISIONS
These variable annuity payment options are subject to the
following provisions:
Amount of First Payment
The first payment under a variable annuity payment option
will be based on the
value of each Variable Sub- Account on the 5th Valuation Date
preceding the date
annuity payments commence. It will be determined by
applying the appropriate
rate from Table A to the amount applied under the payment
option.
Annuity Units
<PAGE>
The number of Annuity Units paid to the Annuitant for each
Variable Sub-Account
is determined by dividing the amount of the first payment by
the sub- account's
annuity unit value on the 5th Valuation Date preceding
the date the first
payment is due. The number of Annuity Units used to calculate
each payment for a
Variable Sub-Account remains fixed during the Annuity Payment
Period.
Amount of Payments after the First
Payments after the first will vary depending upon the
investment experience of
the Variable Sub-Accounts. The subsequent amount paid from
each sub-account is
determined by multiplying (a) by (b) where (a) is the
number of sub-account
Annuity Units to be paid and (b) is the sub-account annuity
unit value on the
5th Valuation Date preceding the date the annuity payment
is due. The total
amount of each variable annuity payment will be the sum of
the variable annuity
payments for each Variable Sub-Account. The Company
guarantees that the dollar
amount of each payment after the first will not be affected
by variations in
expenses or mortality experience.
The 5% interest rate stated above is the measuring point for
subsequent annuity
payments. If the actual Net Investment Factor (annualized)
exceeds 5%, the
payment will increase at a rate equal to the amount of such
excess. Conversely,
if the actual rate is less than 5%, annuity payments will
decrease. It the
assumed rate of interest were to be increased, annuity
payments would start at a
higher level, but would increase more slowly or decrease more
rapidly.
The annuity Unit value at the end of any Valuation Period
<PAGE>
is determined by
multiplying the Annuity Unit value for the immediately
preceding Valuation
Period by the product of:
(a) the Net Investment Factor of the Variable Sub-
Account for the Valuation Period for which the
Annuity Unit is being determined; and
(b) a daily factor of .999866 to neutralize the assumed
investment return of 5%
per year used in the annuity table.
The value of each Variable Sub-Account's Annuity Unit is set
initially at $10.
The value of the Annuity Units is determined as of a Valuation
Period five days
prior to the payment in order to permit calculation of
amounts of annuity
payments and mailing of checks in advance of their due date.
Transfers After the Payment Commencement Date
Once variable annuity payments have begun, the Owner may
Transfer all or part of
the Variable Account Value from one Variable Sub-Account to
another. Transfers
after the Payment Commencement Date will be made by
converting the number of
Annuity Units being Transferred to the number of
Annuity Units of the
sub-account to which the Transfer is made. The result
will be that the next
annuity payment, if it were made at that time, would be the
same amount that it
would have been without the Transfer. Thereafter, annuity
payments will reflect
changes in the value of the new Annuity Units. Once annuity
payments have begun,
no Transfers may be made from a fixed annuity payment
option to a variable
<PAGE>
annuity payment option, or from a variable annuity payment
option to a fixed
annuity payment option. The Contract's Transfer provisions
will apply.
What fixed annuity payment options are available?
FIXED ANNUITY PAYMENT OPTIONS
The guaranteed annuity table is based on mortality from the
1983 Table (a) for
Individual Annuity Valuation and a guaranteed interest rate
of 2 1/2% per year.
The Company may offer a better rate than the guaranteed
rate shown. The rate
offered will result in annuity benefits at the time of
commencement that will
not be less than those available to new single premium annuity
applicants of the
same class at the time.
The following fixed annuity payment options are available:
(a) Option 1: Income of Specified Amount
An annuity payment at 12-, 6-, 3-, or 1-month
intervals, of an amount
elected by the Owner for an Annuity Payment Period of
not more than 240
months. Upon death of the Annuitant, the
Beneficiary will begin to
receive the remaining payments at the same interval
that was elected by
the Owner. See Table C.
Payment Options (continued)
(b) Option 2: Income for a Specified Period
An annuity payment at 12-, 6-, 3-, or 1-month intervals,
for the number of
months elected, for an Annuity Payment Period of
not more than 240
months. Upon death of the Annuitant, the
Beneficiary will begin to
receive the remaining payments at the same interval
<PAGE>
that was elected by
the Owner. See Table C.
(c) Option 3: Fixed Life Annuity with Guaranteed Period
Payments for the guaranteed Annuity Payment Period
elected which may be 5,
10, 15, or 20 years or the lifetime of the Annuitant
whichever is longer.
Upon death of the Annuitant, any amounts remaining
payable under this
payment option will be paid to the Beneficiary. See
Table B.
(d) Option 4: Fixed Life Annuity
Monthly payments for the Annuitant's lifetime, without
a guaranteed period. See Table B. Upon death of
the Annuitant, all payments cease and no amounts
are payable to the Beneficiary.
(e) Option 5: Any Other Form
Any other form of annuity which is acceptable to the
Company.
<PAGE>
What guidelines apply to periodic withdrawals?
PERIODIC WITHDRAWAL OPTION
The Owner must Request that all or part of the Annuity
Account Value be applied
to a Periodic Withdrawal Option. Premium Tax, if applicable,
will be deducted
before applying the amount Requested. While periodic
withdrawals are being
received:
a Market Value Adjustment applies to periodic
withdrawals from Guarantee
Periods 6 or more months prior to maturity;
the Owner may keep the same Fixed and Variable
Sub-Accounts as were in force before periodic
withdrawals began;
Charges and fees under this Certificate continue to
apply;
o the Owner may continue to exercise all contractual
rights that are
available prior to electing a payment option, except
that no Contributions
may be made;
o if a partial withdrawal is made from a Fixed Sub-
Account, the Market
Value Adjustment, if applicable, will be applied;
Guarantee Periods renew into the shortest Guarantee Period
then available.
HOW TO ELECT PERIODIC WITHDRAWALS
The Request of the Owner is required to elect, or change
the election of, the Periodic Withdrawal Option. The
Owner must Request:
o the withdrawal frequency of either 12-, 6-, 3-,
or 1-month intervals;
o a withdrawal amount; a minimum of $100 is
required;
<PAGE>
o the calendar month, day, and year on which
withdrawals are to begin;
o one Periodic Withdrawal Option; and
o the allocation of withdrawals from the Variable
and/or Fixed Sub-Account(s) as follows:
1) Prorate the amount to be paid across all
Variable and Fixed Sub-Accounts in
proportion to the assets in each sub-account;
or
2) Select the Variable and/or Fixed Sub-
<PAGE>
Account(s) from which withdrawals will be
made. Once the Variable and/or Fixed Sub-
Accounts(s) have been depleted, the Company
will automatically prorate the remaining
withdrawals against all remaining available
Sub-Accounts, unless the Owner Requests the
selection of another Variable Sub-Account.
The Owner may elect to change the
withdrawal option and/or frequency once each
calendar year.
Periodic Withdrawals will cease on the earlier of the date:
the amount elected to be paid under the option selected
has been reduced to zero;
the Annuity Account Value is zero;
the Owner Requests that withdrawals stop;
the Owner purchases an annuity option; or
of death of an Owner or the Annuitant.
PERIODIC WITHDRAWAL OPTIONS
AVAILABLE
The Owner must elect one of these 5 withdrawal options:
1) Income for a Specified Period for at least thirty-six
(36) months - The Owner elects the duration over
which withdrawals will be made. The amount paid
will vary based on the duration; or
2) Income of a Specified Amount for at least thirty-
six (36) months - The Owner elects the dollar
amount of the withdrawals. Based on the amount
elected, the duration may vary; or
3) Interest Only - The withdrawals will be based on
the amount of interest credited to the Fixed Sub-
Account(s) between each withdrawal. Available
only if 100% of the account value is invested in the
Fixed Sub-Account; or
4) Minimum Distribution - If this is an IRA
<PAGE>
Certificate, the Owner may Request minimum
distributions as specified under Internal Revenue
Code 401(a)(9); or
5) Any Other Form for a period of at least thirty-six
(36) months - Any
other form of periodic withdrawal which is acceptable
to the Company.
<PAGE>
TABLE A -
Variable Life Annuity
FEMALE
Monthly
Payment for Each $1,000
of Annuity
Account Value
Without With Guaranteed Period
Age of Guaranteed 5 10 15 20
Annuitant Period Years Years Years Years
20 4.29 4.29 4.29 4.29 4.29
21 4.31 4.31 4.30 4.30 4.30
22 4.32 4.32 4.32 4.31 4.31
23 4.33 4.33 4.33 4.32 4.32
24 4.34 4.34 4.34 4.34 4.33
25 4.36 4.36 4.35 4.35 4.35
<PAGE>
26 4.37 4.37 4.37 4.37 4.36
27 4.39 4.39 4.38 4.38 4.38
28 4.40 4.40 4.40 4.40 4.39
29 4.42 4.42 4.42 4.41 4.41
30 4.44 4.44 4.44 4.43 4.42
31 4.46 4.46 4.45 4.45 4.44
<PAGE>
32 4.48 4.48 4.47 4.47 4.46
33 4.50 4.50 4.49 4.49 4.48
34 4.52 4.52 4.52 4.51 4.50
35 4.55 4.54 4.54 4.53 4.52
36 4.57 4.57 4.56 4.56 4.55
37 4.60 4.60 4.59 4.58 4.57
38 4.63 4.62 4.62 4.61 4.59
39 4.65 4.65 4.65 4.64 4.62
40 4.69 4.68 4.68 4.67 4.65
41 4.72 4.72 4.71 4.70 4.68
42 4.75 4.75 4.74 4.73 4.71
43 4.79 4.79 4.78 4.76 4.74
44 4.83 4.83 4.82 4.80 4.77
45 4.87 4.87 4.86 4.84 4.81
46 4.91 4.91 4.90 4.88 4.85
47 4.96 4.96 4.94 4.92 4.88
48 5.01 5.00 4.99 4.96 4.92
49 5.06 5.06 5.04 5.01 4.97
50 5.12 5.11 5.08 5.06 5.01
Without With Guaranteed Period
Age of Guaranteed 5 10 15 20
Annuitant Period Years Years Years Years
51 5.17 5.17 5.14 5.11 5.05
52 5.23 5.23 5.20 5.16 5.10
<PAGE>
53 5.30 5.29 5.26 5.22 5.15
54 5.37 5.36 5.33 5.27 5.20
55 5.44 5.43 5.40 5.34 5.25
56 5.52 5.51 5.47 5.40 5.31
<PAGE>
57 5.60 5.59 5.54 5.47 5.37
58 5.69 5.68 5.62 5.54 5.43
59 5.79 5.77 5.71 5.62 5.49
60 5.89 5.87 5.80 5.69 5.55
61 6.00 5.97 5.90 5.78 5.61
62 6.11 6.08 6.00 5.86 5.67
63 6.24 6.20 6.11 5.95 5.74
64 6.37 6.33 6.22 6.04 5.80
65 6.51 6.47 6.34 6.14 5.87
66 6.66 6.61 6.47 6.24 5.93
67 6.82 6.77 6.60 6.34 5.99
68 7.00 6.93 6.74 6.44 6.05
69 7.19 7.11 6.89 6.54 6.11
70 7.39 7.31 7.05 6.65 6.16
71 7.62 7.51 7.21 6.75 6.21
72 7.86 7.74 7.38 6.85 6.26
73 8.12 7.98 7.56 6.96 6.30
74 8.41 8.23 7.74 7.05 6.34
75 8.72 8.51 7.93 7.15 6.37
76 9.06 8.80 8.12 7.24 6.40
77 9.42 9.11 8.31 7.32 6.42
78 9.81 9.44 8.51 7.39 6.44
79 10.24 9.80 8.70 7.46 6.46
80 10.71 10.16 8.88 7.52 6.47
<PAGE>
<PAGE>
If payments commence on any other date than the exact age of
the Annuitant as
shown above, the amount of the monthly payment shall be
determined by the
Company on the actuarial basis used in determining the above
amounts.
<PAGE>
TABLE A -
Variable Life Annuity
MALE
Monthly
Payment for Each $1,000
of Annuity
Account Value
<PAGE>
Without With Guaranteed Period
Age of Guaranteed 5 10 15 20
Annuitant Period Years Years Years Years
20 4.38 4.38 4.37 4.37 4.36
21 4.39 4.39 4.39 4.38 4.38
<PAGE>
22 4.41 4.41 4.40 4.40 4.39
23 4.43 4.42 4.42 4.42 4.41
24 4.44 4.44 4.44 4.43 4.42
25 4.46 4.46 4.46 4.45 4.44
26 4.48 4.48 4.48 4.47 4.46
27 4.50 4.50 4.50 4.49 4.48
28 4.52 4.52 4.52 4.51 4.50
29 4.55 4.55 4.54 4.53 4.52
30 4.57 4.57 4.56 4.55 4.54
31 4.60 4.59 4.59 4.58 4.57
32 4.62 4.62 4.62 4.60 4.59
33 4.65 4.65 4.64 4.63 4.61
34 4.68 4.68 4.67 4.66 4.64
35 4.72 4.71 4.70 4.69 4.67
36 4.75 4.75 4.74 4.72 4.70
37 4.79 4.78 4.77 4.75 4.73
38 4.82 4.82 4.81 4.79 4.76
39 4.86 4.86 4.85 4.82 4.79
40 4.91 4.90 4.89 4.86 4.82
41 4.95 4.95 4.93 4.90 4.86
42 5.00 4.99 4.97 4.94 4.90
43 5.05 5.04 5.02 4.98 4.93
44 5.10 5.09 5.07 5.03 4.97
45 5.16 5.15 5.12 5.07 5.02
<PAGE>
46 5.21 5.20 5.17 5.12 5.06
47 5.28 5.26 5.23 5.17 5.10
48 5.34 5.33 5.29 5.23 5.15
<PAGE>
49 5.41 5.39 5.35 5.28 5.20
50 5.48 5.46 5.41 5.34 5.24
Without With Guaranteed Period
Age of Guaranteed 5 10 15 20
Annuitant Period Years Years Years Years
51 5.55 5.53 5.48 5.40 5.29
52 5.63 5.61 5.55 5.46 5.35
53 5.71 5.69 5.63 5.53 5.40
54 5.80 5.77 5.70 5.60 5.45
55 5.89 5.87 5.79 5.67 5.51
56 5.99 5.96 5.88 5.74 5.57
57 6.10 6.06 5.97 5.82 5.62
58 6.21 6.17 6.07 5.90 5.68
59 6.33 6.29 6.17 5.98 5.74
60 6.46 6.42 6.28 6.07 5.80
61 6.60 6.55 6.40 6.16 5.86
62 6.75 6.69 6.52 6.26 5.91
63 6.91 6.84 6.64 6.34 5.97
64 7.09 7.01 6.78 6.43 6.02
65 7.27 7.18 6.91 6.52 6.07
66 7.47 7.36 7.06 6.62 6.12
67 7.68 7.56 7.21 6.71 6.17
68 7.91 7.76 7.36 6.80 6.21
69 8.15 7.98 7.52 6.90 6.26
<PAGE>
70 8.42 8.21 7.68 6.98 6.29
71 8.69 8.46 7.84 7.07 6.33
72 8.99 8.71 8.01 7.15 6.36
73 9.31 8.98 8.18 7.23 6.38
<PAGE>
74 9.65 9.27 8.35 7.30 6.41
75 10.02 9.57 8.52 7.37 6.43
76 10.41 9.88 8.68 7.43 6.44
77 10.84 10.21 8.84 7.49 6.46
78 11.29 10.55 9.00 7.54 6.47
79 11.78 10.93 9.15 7.59 6.48
80 12.29 11.27 9.30 7.63 6.49
If payments commence on any other date than the exact age of
the Annuitant as
shown above, the amount of the monthly payment shall be
determined by the
Company on the actuarial basis used in determining the above
amounts.
<PAGE>
<PAGE>
TABLE B -
Life Annuity
FEMALE
<PAGE>
Monthly
Payment for Each $1,000
of Annuity
Account Value
Without With Guaranteed Period
Age of Guaranteed 5 10 15 20
Annuitant Period Years Years Years Years
20 2.61 2.61 2.61 2.61 2.61
21 2.63 2.63 2.63 2.63 2.63
22 2.65 2.65 2.65 2.64 2.64
23 2.67 2.67 2.66 2.66 2.66
24 2.69 2.69 2.68 2.68 2.68
25 2.71 2.71 2.70 2.70 2.70
26 2.73 2.73 2.72 2.72 2.72
27 2.75 2.75 2.75 2.74 2.74
28 2.77 2.77 2.77 2.77 2.76
29 2.79 2.79 2.79 2.79 2.79
30 2.82 2.82 2.82 2.81 2.81
31 2.84 2.84 2.84 2.84 2.83
32 2.87 2.87 2.87 2.86 2.86
<PAGE>
33 2.90 2.90 2.89 2.89 2.89
34 2.93 2.93 2.92 2.92 2.91
35 2.96 2.96 2.95 2.95 2.94
36 2.99 2.96 2.98 2.98 2.97
37 3.02 3.02 3.02 3.01 3.00
<PAGE>
38 3.05 3.05 3.05 3.04 3.04
39 3.09 3.09 3.09 3.08 3.07
40 3.13 3.13 3.12 3.12 3.10
41 3.17 3.16 3.16 3.15 3.14
42 3.21 3.21 3.20 3.19 3.18
43 3.25 3.25 3.24 3.23 3.22
44 3.30 3.29 3.29 3.28 3.26
45 3.34 3.34 3.33 3.32 3.30
46 3.39 3.39 3.38 3.37 3.35
47 3.44 3.44 3.43 3.42 3.39
48 3.50 3.50 3.49 3.47 3.44
49 3.56 3.55 3.54 3.52 3.49
50 3.62 3.61 3.60 3.58 3.54
Without With Guaranteed Period
Age of Guaranteed 5 10 15 20
Annuitant Period Years Years Years Years
51 3.68 3.68 3.66 3.64 3.59
52 3.75 3.74 3.73 3.70 3.65
53 3.82 3.81 3.79 3.76 3.71
54 3.89 3.88 3.86 3.83 3.77
55 3.97 3.96 3.94 3.90 3.83
56 4.05 4.04 4.02 3.97 3.89
57 4.14 4.13 4.10 4.05 3.96
58 4.23 4.22 4.19 4.13 4.03
<PAGE>
59 4.33 4.32 4.28 4.21 4.10
60 4.44 4.42 4.38 4.30 4.17
61 4.55 4.53 4.48 4.39 4.24
62 4.67 4.65 4.59 4.48 4.31
<PAGE>
63 4.79 4.77 4.70 4.58 4.39
64 4.93 4.90 4.82 4.68 4.46
65 5.07 5.04 4.95 4.78 4.53
66 5.23 5.19 5.09 4.89 4.61
67 5.39 5.35 5.23 5.00 4.68
68 5.57 5.52 5.38 5.11 4.74
69 5.76 5.71 5.53 5.23 4.81
70 5.96 5.90 5.70 5.34 4.87
71 6.19 6.11 5.87 5.46 4.93
72 6.43 6.34 6.05 5.57 4.98
73 6.69 6.58 6.24 5.68 5.03
74 6.97 6.84 6.43 5.79 5.07
75 7.28 7.12 6.63 5.90 5.11
76 7.61 7.41 6.83 5.99 5.14
77 7.97 7.73 7.04 6.09 5.17
78 8.36 8.06 7.24 6.17 5.19
79 8.78 8.42 7.44 6.24 5.21
80 9.24 8.79 7.64 6.31 5.22
If payments commence on any other date than the exact age of
the Annuitant as
shown above, the amount of the monthly payment shall be
determined by the
Company on the actuarial basis used in determining the above
<PAGE>
amounts.
<PAGE>
<PAGE>
TABLE B -
Life Annuity
MALE
Monthly
Payment for Each $1,000
of Annuity
Account Value
Without With Guaranteed Period
Age of Guaranteed 5 10 15 20
Annuitant Period Years Years Years Years
20 2.72 2.72 2.72 2.72 2.71
21 2.74 2.74 2.74 2.74 2.73
22 2.76 2.76 2.76 2.76 2.75
<PAGE>
23 2.79 2.78 2.78 2.78 2.78
24 2.81 2.81 2.81 2.80 2.80
25 2.83 2.83 2.83 2.83 2.82
26 2.86 2.86 2.86 2.85 2.85
27 2.89 2.88 2.88 2.88 2.87
<PAGE>
28 2.91 2.91 2.91 2.91 2.90
29 2.94 2.94 2.94 2.93 2.93
30 2.97 2.97 2.97 2.96 2.95
31 3.00 3.00 3.00 2.99 2.98
32 3.04 3.03 3.03 3.03 3.01
33 3.07 3.07 3.07 3.06 3.05
34 3.11 3.10 3.10 3.09 3.08
35 3.14 3.14 3.14 3.13 3.11
36 3.18 3.18 3.18 3.17 3.15
37 3.22 3.22 3.22 3.21 3.19
38 3.27 3.28 3.26 3.25 3.23
39 3.31 3.31 3.30 3.29 3.27
40 3.36 3.36 3.35 3.33 3.31
41 3.41 3.41 3.40 3.38 3.35
42 3.46 3.46 3.45 3.43 3.39
43 3.52 3.51 3.50 3.48 3.44
44 3.57 3.57 3.56 3.53 3.49
45 3.63 3.63 3.61 3.58 3.54
46 3.70 3.69 3.67 3.64 3.59
47 3.76 3.75 3.73 3.69 3.64
48 3.83 3.82 3.80 3.76 3.69
49 3.90 3.89 3.87 3.82 3.75
50 3.98 3.97 3.94 3.88 3.81
Without With Guaranteed Period
<PAGE>
Age of Guaranteed 5 10 15 20
Annuitant Period Years Years Years Years
51 4.05 4.04 4.01 3.95 3.86
52 4.14 4.12 4.09 4.02 3.93
<PAGE>
53 4.22 4.21 4.17 4.10 3.99
54 4.32 4.30 4.25 4.17 4.05
55 4.41 4.39 4.34 4.25 4.11
56 4.51 4.50 4.44 4.33 4.18
57 4.62 4.60 4.54 4.42 4.25
58 4.74 4.72 4.64 4.51 4.31
59 4.86 4.84 4.75 4.60 4.38
60 5.00 4.96 4.87 4.69 4.45
61 5.14 5.10 4.99 4.79 4.51
62 5.29 5.25 5.12 4.89 4.58
63 5.45 5.40 5.25 4.99 4.65
64 5.62 5.57 5.39 5.09 4.71
65 5.81 5.74 5.54 5.20 4.77
66 6.00 5.93 5.69 5.30 4.83
67 6.21 6.12 5.85 5.41 4.88
68 6.44 6.33 6.01 5.51 4.93
69 6.68 6.55 6.18 5.61 4.98
70 6.94 6.79 6.35 5.71 5.02
71 7.21 7.03 6.52 5.80 5.06
72 7.51 7.29 6.70 5.90 5.09
73 7.82 7.57 6.88 5.98 5.12
74 8.16 7.86 7.06 6.08 5.15
75 8.52 8.16 7.24 6.14 5.17
76 8.90 8.48 7.42 6.21 5.19
<PAGE>
77 9.32 8.81 7.59 6.27 5.21
78 9.77 9.16 7.76 6.33 5.22
79 10.24 9.52 7.93 6.38 5.24
<PAGE>
80 10.75 9.90 8.09 6.43 5.24
If payments commence on any other date than the exact age of
the Annuitant as
shown above, the amount of the monthly payment shall be
determined by the
Company on the actuarial basis used in determining the above
amounts.
<PAGE>
TABLE C - Income of
Specified Amount
- Income for a
Specified Period
<PAGE>
Payment
for Each $1,000
of Annuity
Account Value
<PAGE>
Years Monthly Quarterly
Semiannually Annually
1 84.28 252.32
503.09 1,000.00
2 42.66 127.72
254.65 506.17
3 28.79 86.19
171.85 341.60
4 21.86 65.44
130.47 259.33
5 17.70 52.99
105.65 210.00
6 14.93 44.69
89.11 177.12
7 12.95 38.77
77.30 153.65
8 11.47 34.33
68.45 136.07
9 10.32 30.88
61.58 122.40
10 9.39 28.13
56.08 111.47
11 8.64 25.87
51.59 102.54
12 8.02 24.00
47.85 95.11
13 7.49 22.41
44.69 88.83
14 7.03 21.06
41.98 83.45
15 6.64 19.88
<PAGE>
39.64 78.80
16 6.30 18.86
37.60 74.73
17 6.00 17.95
35.79 71.15
18 5.73 17.15
34.20 67.97
19 5.49 16.43
32.77 65.13
20 5.27 15.79
31.48 62.58
<PAGE>
If payments are for an amount or duration
different than that
outlined above, the Company will determine the
proper amount or
duration using the actuarial basis used to
determine the above
amounts.
<PAGE>
FLEXIBLE PREMIUM FIXED AND VARIABLE DEFERRED GROUP ANNUITY.
Contributions may be made until the Payment Commencement Date
or until the death
benefit is payable to a Beneficiary. The Owner is as shown
on the Certificate
Data Page unless changed as provided for in this Certificate.
The Company will
pay the Annuitant the first of a series of annuity
payments on the annuity
commencement date by applying the Annuity Account Value
with a Market Value
Adjustment, if applicable, of the Owner's Annuity Account
according to the
Payment Options Provisions. Subsequent payments will be paid
on the same day of
each frequency period according to the provisions of this
Certificate. Any
paid-up annuity, cash surrender value or death benefits
that may be available
under this Certificate will not be less than the minimum
benefits required by
any statute of the state in which this Certificate is
delivered.
Non-Participating. Not eligible to share in the Company's
divisible surplus.
<PAGE>
CORPORATE HEADQUARTERS - Albany, New York
J434 NY
<PAGE>
<PAGE>
EXHIBIT 5
Form of Application to be used with the
Variable Contract
<PAGE>
Underwritten by:
[GRAPHIC OMITTED]
The Schwab
Variable Annuity(TM)
Distributed by:
Charles Schwab & Co., Inc.
PO Box 7806
San Francisco, CA 94120-7806
-----------------------------------------------------------------
-------------
FLEXIBLE PREMIUM FIXED AND VARIABLE DEFERRED
ANNUITY APPLICATION
Please complete and sign this application
and return it in the
enclosed postage paid envelope. Please take
a moment to review
the application to make sure all sections
are completed and
you have signed where indicated.
Thank You!
-----------------------------------------------------------------
-------------
<PAGE>
Have
Questions?
Call Us!
Schwab
Annuity Service Center
1-800-838-0649
6:30am - 4:00 pm,
Monday-Friday Pacific Time
<PAGE>
J434app NY1
2602(9/96) (C) 1996 Charles Schwab & Co., Inc. Member
NYSE/SIPC
All Rights Reserved
Underwritten by:
<PAGE>
[GRAPHIC OMITTED]
The Schwab
Variable Annuity(TM)
Distributed by:
Charles Schwab & Co., Inc.
PO Box 7806
San Francisco, CA 94120-7806
1. Who will own the annuity? The Owner is the person
entitled to all rights
under the annuity. If the Owner is a Trust, additional forms
may be required and
certain restrictions may apply. Call the Schwab Annuity
Service Center at
1-800-838-0649 for assistance.
Name (First/Middle/Last)
Home Address
<PAGE>
City State Zip
Birth Date Male/Female
Social Security/Tax I.D. Number
( ) ( )
Daytime Telephone Number Evening Telephone Number
<PAGE>
2. Who will be the Joint Owner? This is optional, and only a
spouse may be a
Joint Owner of this annuity. If this is an IRA, a Joint Owner
cannot be named.
Name (First/Middle/Last)
Home Address
City State Zip
Birth Date Male/Female
Social Security/Tax I.D. Number
( ) ( )
Daytime Telephone Number Evening Telephone Number
3. Primary Annuitant. The Annuitant is the person on whose
life the annuity
payments are based. The Annuitant must be age 90 or younger.
If the Annuitant
and the Owner are the same, check the appropriate box below
and skip to
question #5.
q Same as Owner or q The person listed below
Name (First/Middle/Last)
Home Address
City State Zip
Birth Date Male/Female
<PAGE>
Social Security/Tax I.D. Number
( ) ( )
Daytime Telephone Number Evening Telephone Number
4. Contingent Annuitant. This is optional. The Contingent
Annuitant is the
person who will become the Annuitant upon the death of the
Primary Annuitant.
The Contingent Annuitant must be age 90 or younger. If the
Contingent
Annuitant and the Owner are the same, check the appropriate
box below and skip
to question #5.
<PAGE>
q Same as Owner or q The person listed below
Name (First/Middle/Last)
Home Address
City State Zip
Birth Date Male/Female
Social Security/Tax I.D. Number
( ) ( )
Daytime Telephone Number Evening Telephone Number
J434app NY1 2602(9/96) (C) 1996 Charles Schwab & Co.,
Inc.
Member NYSE/SIPC All Rights Reserved Page 1
(Continued on Next Page)
<PAGE>
FLEXIBLE PREMIUM FIXED AND VARIABLE DEFERRED ANNUITY
APPLICATION (continued)
5. Beneficiary(ies). Who would you like to receive the
benefits payable upon
the death of the Owner or Annuitant (as applicable)? You may
name a person, a
trust, a charity, or other entity as Beneficiary. You may
name one or more
Beneficiaries, indicating the percentage for each (whole
<PAGE>
percentages only).
If you need additional space, please use a separate sheet.
Name (First/Middle/Last) Social Security No.
Birth Date
Percentage
Name (First/Middle/Last) Social Security No.
Birth Date
Percentage
Name (First/Middle/Last) Social Security No.
Birth Date
Percentage
<PAGE>
Must = 100%
6. Citizenship Status. Is each individual named on this
application a citizen
of the United States?
q YES q NO If "No" give details below.
Name(s) Country of Legal Residence Country of
Citizenship
7. Will this annuity replace a life insurance policy or
annuity that you
currently own? State law requires that you provide this
information when you
replace a life insurance or annuity contract with another.
q YES, this will replace the life insurance policy or annuity
listed below.
q NO, this will NOT replace another life insurance policy or
annuity.
Name of Insurance Company Being Replaced Policy Number
8. When would you like periodic withdrawals or annuity
payments to begin? If
you want payments to begin on a certain date, indicate the
month and year. If no
date is indicated, annuity payments will begin on the first
day of the month of
the Annuitant's 91st birthday.
I would like the payments to begin on (month)
(year)
q Periodic Withdrawals OR
----------------------
-------------
q Annuity Payments
<PAGE>
9. Are you currently a Schwab customer?
q YES, My account number is .q NO, I am not currently a
Schwab customer.
10. How will you pay for this annuity? Minimum initial
contribution is $5,000,
$2,000 if an IRA, or $1,000 if paid through an Automatic
Contribution Plan.
Subsequent minimum contributions are $500, $100 if paid
through an Automatic
Contribution Plan. To establish an Automatic Contribution
Plan, please call the
Schwab Annuity Service Center for appropriate forms.
For non-IRA's:
q Check is attached. (Make check payable to First
Great-West Life &
Annuity Insurance Company)
q Transfer $ from my Schwab brokerage account as
listed in #9 above.
-----------
<PAGE>
q Transfer the entire balance from my existing annuity
or life insurance
policy. (Complete enclosed Absolute Assignment/Replacement
forms.)
For IRA's:
q Check is attached for a new IRA for tax year(s):
.
(Make check payable to First Great-West Life & Annuity
--------------------
Insurance Company.)
q Transfer funds from my existing IRA annuity or other
qualified plan.
(Complete enclosed IRA rollover/transfer form.)
11. Compliance Information. The Securities Exchange Act of
1934 requires that
we have reasonable grounds to believe, based upon the
information provided by
you, that your investment selections are suitable given
your objectives and
financial situation. Please answer the following
questions relating to the
suitability of your investment choices.
Overall Investment Objective q Capital Preservation q
Income q Growth q
Speculation Federal Income Tax Bracket q 15% q 28% q 31% or
more Annual Income
q Under $15,000 q $15,000 to $24,999 q $25,000 to $49,999 q
$50,000 to $99,999
q $100,000 or more Liquid Net Worth q Under $15,000 q
$15,000 to $49,999 q
$50,000 to $99,999 q $100,000 or more
J434app NY1 2602(9/96) (C) 1996 Charles Schwab & Co.,
Inc.
Member NYSE/SIPC All Rights Reserved Page 2
(Continued on Next Page)
<PAGE>
<PAGE>
FLEXIBLE PREMIUM FIXED AND VARIABLE DEFERRED ANNUITY
APPLICATION (continued)
12. How would you like to allocate your payment? You may
either choose one
investment option from the enclosed list or combine your
payment among several.
Please write the name of each investment option you choose
and indicate the
whole percentage of your contribution for each investment
option you select.
This section must be completed for your application to be
processed.
Name of Investment Option
Allocation %
-----------------------------------------------------------------
-----------%
-----------------------------------------------------------------
----------- %
<PAGE>
-----------------------------------------------------------------
------------ %
-----------------------------------------------------------------
----------- %
-----------------------------------------------------------------
----------- %
-----------------------------------------------------------------
-------------%
-----------------------------------------------------------------
-----------%
-----------------------------------------------------------------
-------------%
-----------------------------------------------------------------
-----------%
-----------------------------------------------------------------
----------%
-----------------------------------------------------------------
-----------%
-----------------------------------------------------------------
------------%
<PAGE>
-----------------------------------------------------------------
-------------%
-----------------------------------------------------------------
--------------
TOTAL
=100%
-----------------------------------------------------------------
------------
13. Signatures
q Please send me a copy of the Statement of Additional
Information
to the prospectus.
I understand that I am applying for a Flexible Premium
Variable and Fixed
Deferred Annuity, Contract Form J434 NY, issued by First
Great-West Life &
Annuity Insurance Company. I declare that all
statements made on this
application are true to the best of my knowledge and
belief. I acknowledge
receipt of the prospectus for the variable and fixed
annuity contract. I
believe the contract is suitable for my retirement and
insurance needs. I
understand that amounts allocated to a Variable
Sub-Account are variable
and are not guaranteed as to dollar amount. I further
understand that
amounts allocated to a Fixed Sub-Account may be subject
to a Market Value
Adjustment which may result in positive or negative
adjustments to amounts
payable under the contract.
I hereby direct that my instructions to the Schwab
Annuity Service Center
be honored for transactions unless otherwise notified
by me in writing. I
understand that telephone calls may be recorded to
monitor the quality of
service I receive and to verify contract transaction
information. If a
transfer from my Schwab brokerage account is
indicated in Section 10, I
authorize Schwab to transfer the amount specified. I
<PAGE>
certify under penalty
of perjury that the taxpayer identification
numbers listed on this
application are correct. The Internal Revenue
Service does not require
<PAGE>
your consent to any provision of this document
other than the
certifications required to avoid backup withholding.
Owner's Signature
Date
Joint Owner's Signature (if applicable)
Date
For Internal Use Only
Do you have reason to believe the annuity applied for
will replace any
insurance or annuity with us or any other company?
q yes q no
Signature (if required)
Rep Code Source Code
Date
J434app NY1 2602(9/96) (C) 1996 Charles Schwab & Co.,
Inc.
Member NYSE/SIPC All Rights Reserved Page 3 (Continued on
Next Page)
<PAGE>
FLEXIBLE PREMIUM FIXED AND VARIABLE DEFERRED ANNUITY
APPLICATION (continued)
Here is a list of the investment options available. You may
either choose one
<PAGE>
investment option from the following list or combine your
payment among several.
Please write on the previous page the name of each investment
option you choose
and specify the whole percentage of your contribution for each
investment option
you select. Section 12 must be completed for your application
to be processed.
VARIABLE SUB-ACCOUNTS
Investment Objective
Aggressive Growth
<PAGE>
International Aggressive Growth
Growth
International Growth
Index
Growth & Income
Equity Income
Balanced/Asset Allocation
Hard Assets
High Yield Bond
Government Bond
Money Market
Eligible Investment Options
SteinRoe Capital Appreciation Fund Janus Aspen Aggressive
Growth Portfolio Alger
American Small Capitalization Portfolio American Century VP
Capital Appreciation
Berger IPT - Small Company Growth Fund Strong Discovery Fund
II
Montgomery Variable Series: International Small Cap Fund
Lexington Emerging Markets Fund
Montgomery Variable Series: Growth Fund
Schwab Asset Director - High Growth Portfolio
Janus Aspen Growth Portfolio
Alger American Growth Fund
<PAGE>
Janus Aspen Worldwide Growth Portfolio
American Century VP International
Schwab S & P 500 Portfolio
SAFECO RST Equity Portfolio
Federated American Leaders Fund II
Federated Utility Fund II
<PAGE>
INVESCO VIF - Industrial Income Portfolio
INVESCO VIF - Total Return Portfolio
Van Eck Worldwide Hard Assets Fund
INVESCO VIF - High Yield Portfolio
Federated Fund for U.S. Government Securities II
Schwab Money Market Portfolio
Fixed Sub-Accounts
Investment Objective
Fixed Sub-Account chosen for specified time intervals, subject
to Market Value
Adjustment
Eligible Guarantee Periods
Guarantee Period Fund - 1 Year Guarantee Period Fund - 2
Years Guarantee Period
Fund - 3 Years Guarantee Period Fund - 4 Years Guarantee
Period Fund - 5 Years
Guarantee Period Fund - 6 Years Guarantee Period Fund - 7
Years Guarantee Period
Fund - 8 Years Guarantee Period Fund - 9 Years Guarantee
Period Fund - 10 Years
J434app NY1 2664(9/96) (C) 1996 Charles Schwab &
Co., Inc
Member NYSE/SIPC All Rights Reserved Page 4
<PAGE>
<PAGE>
EXHIBIT 9
Opinion of Counsel
<PAGE>
<PAGE>
June 27, 1997
Securities and Exchange Commission
450 Fifth St., N.W.
Washington, D.C. 20549
Re: Opinion of Counsel
Gentlemen:
This letter is furnished as the requisite opinion of
counsel described
in Form N-4, Part C, Item 24(9) and (10c) in connection
with a registration
statement on Form N-4 (File No. 333-25289) (the "Registration
Statement") filed
by First Great-West Life & Annuity Insurance Company
(the "Company"), as
depositor, for the registration of an indefinite amount of
securities under the
Securities Act of 1933, as amended, as provided in Rule 24f-2
of the Investment
Company Act of 1940.
I am the Vice President, Counsel and Associate
Secretary of the
Company. In so acting, I have made such examination of
the Registration
Statement, applicable law, records and documents as in my
judgment are necessary
or appropriate to enable me to render the opinion expressed
below. For purposes
of such examination, I have assumed the genuineness of all
signatures and the
conformity to the original of all copies.
<PAGE>
My opinion herein as to any other law is based upon
a limited inquiry
thereof which I have deemed appropriate under the
circumstances.
Based on the foregoing, I am of the opinion
with respect to the
securities, assuming that the securities will be issued and
sold in accordance
with the provisions of the registration statement, to which
the Registration
Statement is applicable and with which this opinion
accompanies, will be legally
issued and represent binding obligations of the depositor.
I hereby consent to the use of my name under
the caption "Legal
Opinions" in the prospectus contained in the Registration
Statement and the use
of this opinion as an exhibit to the Registration Statement.
Sincerely,
/s/ W. Kay Adam
<PAGE>
W. Kay Adam
Vice
President, Counsel
and
Associate Secretary
<PAGE>
<PAGE>
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