File Nos. 333-
811-08325
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. ___ [ ]
Post-Effective Amendment No. ___ [ ]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. ___ [ ]
(Check appropriate box or boxes.)
BMA Variable Annuity Account A
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(Exact Name of Registrant)
Business Men's Assurance Company of America
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(Name of Depositor)
700 Karnes Boulevard, Kansas City, Missouri 64108
------------------------------------------------------------ ----------
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code (XXX)XXX - XXXX
Name and Address of Agent for Service
David A. Gates
Business Men's Assurance Company of America
700 Karnes Blvd.
Kansas City, Missouri 64108
Copies to:
Judith A. Hasenauer
Blazzard, Grodd & Hasenauer, P.C.
P.O. Box 5108
Westport, CT 06881
(203) 226-7866
Approximate Date of Proposed Public Offering:
As soon as practicable after the effective date of this Filing.
Calculation of Registration Fee under the Securities Act of 1933: Registrant is
registering an indefinite number of securities under the Securities Act of
1933 pursuant to Investment Company Act Rule 24f-2.
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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.
CROSS REFERENCE SHEET
(required by Rule 495)
<TABLE>
<CAPTION>
ITEM NO. Location
<S> <C>
PART A
Item 1. Cover Page Cover Page
Item 2. Definitions Index of Special Terms
Item 3. Synopsis Profile
Item 4. Condensed Financial Information Not Applicable
Item 5. General Description of Registrant,
Depositor, and Portfolio Companies Other Information -
BMA; The Separate
Account; Investors Mark Series
Fund, Inc., Berger Institutional
Products Trust
Item 6. Deductions and Expenses Expenses
Item 7. General Description of Variable
Annuity Contracts The Annuity Contract
Item 8. Annuity Period Annuity Payments
(The Income Phase)
Item 9. Death Benefit Death Benefit
Item 10. Purchases and Contract Value Purchase
Item 11. Redemptions Access to Your Money
Item 12. Taxes Taxes
Item 13. Legal Proceedings None
Item 14. Table of Contents of the Statement
of Additional Information Table of Contents of the
Statement of Additional
Information
</TABLE>
CROSS REFERENCE SHEET
(required by Rule 495)
<TABLE>
<CAPTION>
ITEM NO. LOCATION
<S> <C>
PART B
Item 15. Cover Page Cover Page
Item 16. Table of Contents Table of Contents
Item 17. General Information and History Company
Item 18. Services Not Applicable
Item 19. Purchase of Securities Being Offered Not Applicable
Item 20. Underwriters Distribution
Item 21. Calculation of Performance Data Performance Information
Item 22. Annuity Payments Annuity Provisions
Item 23. Financial Statements Financial Statements
</TABLE>
PART C
Information required to be included in Part C is set forth under the appropriate
Item so numbered in Part C to this Registration Statement.
Business Men's Assurance Company of America _______, 1997
PROFILE OF THE FIXED AND VARIABLE ANNUITY CONTRACT
THIS PROFILE IS A SUMMARY OF SOME OF THE MORE IMPORTANT POINTS THAT YOU SHOULD
CONSIDER AND KNOW BEFORE PURCHASING THE CONTRACT. THE CONTRACT IS MORE FULLY
DESCRIBED IN THE PROSPECTUS WHICH ACCOMPANIES THIS PROFILE. PLEASE READ THE
PROSPECTUS CAREFULLY.
1. THE ANNUITY CONTRACT: The fixed and variable annuity contract offered by BMA
is a contract between you, the owner, and Business Men's Assurance Company of
America (BMA), an insurance company. The Contract provides a means for investing
on a tax-deferred basis in 2 fixed account options of BMA and 10 investment
portfolios. The Contract is intended for retirement savings or other long-term
investment purposes and provides for a death benefit and guaranteed income
options.
We offer 2 fixed accounts (Fixed Account I and Fixed Account II). The fixed
accounts offer interest rates that are guaranteed by the insurance company, BMA.
For Fixed Account I, an interest rate is set at the time of each purchase
payment or transfer to Fixed Account I. This initial interest rate is guaranteed
for 12 months. For Fixed Account II, currently there are 3 different guarantee
periods available, each with its own interest rate. If you make a withdrawal or
transfer from Fixed Account II before the end of the guarantee period, it may be
subject to an interest adjustment. While your money is in either fixed account,
the interest your money will earn as well as your principal is guaranteed by
BMA.
This Contract also offers 10 investment portfolios which are listed in Section
4. The returns on these Portfolios are NOT guaranteed. You can lose money.
You can put money into any or all of the investment portfolios, Fixed Account I
and/or any currently available guarantee period of Fixed Account II. You can
transfer between accounts up to 12 times a year without charge or tax
implications during the accumulation phase and 4 times each year without charge
or tax implications during the income phase. There are certain limitations on
the amounts that can be transferred to or from the Fixed Accounts. After 12
transfers each year during the accumulation period and four transfers each year
during the income phase, the charge is $25 per transfer.
The Contract, like all deferred annuity contracts, has two phases: the
accumulation phase and the income phase. During the accumulation phase, earnings
accumulate on a tax-deferred basis and are taxed as income when you make a
withdrawal. The income phase occurs when you begin receiving regular payments
from your Contract.
The amount of money you are able to accumulate in your account during the
accumulation phase will determine the amount of income payments during the
income phase.
2. ANNUITY PAYMENTS (THE INCOME PHASE): If you want to receive regular income
from your annuity, you can choose one of four options: (1) monthly payments for
your life (assuming you are the annuitant); (2) monthly payments for your life,
but with payments continuing to the beneficiary for 10 or 20 years (as you
select) if you die before the end of the selected period; (3) monthly payments
for your life and for the life of another person (usually your spouse) selected
by you; and (4) monthly payments for your life and for the life of another
person (usually your spouse), but if you or the other person die before payments
have been made for the 10 or 20 year period, payments will continue for the
remainder of the period. Once you begin receiving regular payments, you cannot
change your payment plan.
During the income phase, you can choose from the same investment options you had
during the accumulation phase. You can choose to have payments come from our
general account, the investment portfolios or both. If you choose to have any
part of your payments come from the investment portfolios, the dollar amount of
your payments may go up or down.
3. PURCHASE: You can buy this Contract with $10,000 or more under most
circumstances. You can add $1,000 or more any time you like during the
accumulation phase. Your registered representative can help you fill out the
proper forms.
4. INVESTMENT OPTIONS: You can put your money in any or all of these investment
portfolios which are described in the prospectuses for the funds:
MANAGED BY STANDISH, AYER & WOOD, INC.
Money Market Portfolio
Intermediate Fixed Income Portfolio
Mid Cap Equity Portfolio
MANAGED BY STANDISH INTERNATIONAL MANAGEMENT COMPANY, L.P.
Global Fixed Income Portfolio
MANAGED BY KORNITZER CAPITAL MANAGEMENT, INC.
Balanced Portfolio
MANAGED BY STEIN ROE & FARNHAM, INCORPORATED
Small Cap Equity Portfolio
Large Cap Growth Portfolio
MANAGED BY DAVID L. BABSON & CO., INC.
Large Cap Value Portfolio
MANAGED BY LORD, ABBETT & CO.
Growth & Income Portfolio
MANAGED BY BBOI WORLDWIDE LLC
Berger/BIAM IPT - International Fund
Depending upon market conditions, you can make or lose money in any of these
portfolios.
5. EXPENSES: The Contract has insurance features and investment features,
and there are costs related to each.
Each year BMA deducts a $35 contract maintenance charge from your Contract.
During the accumulation phase, BMA currently waives this charge if the value of
your Contract is at least $100,000. BMA also deducts a coverage charge which is
equal to 1.40% annually of the average daily value of your Contract allocated to
the investment portfolios.
There are also investment charges which range from .50% to 1.20% of the average
daily value of the investment portfolio depending upon the investment portfolio.
If you take your money out, BMA may assess a withdrawal charge. The withdrawal
charge is equal to:
<TABLE>
<CAPTION>
Number of Complete Years from
Date of Purchase Payment Withdrawal Charge
----------------------------- -----------------
<S> <C>
0 7%
1 6%
2 5%
3 4%
4 3%
5 2%
6 1%
7 and thereafter 0%
</TABLE>
Under some circumstances BMA may waive the withdrawal charge.
When you begin receiving regular income payments from your annuity, BMA will
assess a state premium tax charge which ranges from 0 - 4%, depending upon the
state.
The following chart is designed to help you to understand the expenses in the
Contract. The column "Total Annual Expenses" shows the total of the $35 contract
maintenance charge (which is represented as .10% below), the 1.40% coverage
charge and the investment expenses for each investment portfolio. The next two
columns show you two examples of the expenses, in dollars, you would pay under a
Contract. The examples assume that you invested $1,000 in a Contract which earns
5% annually and that you withdraw your money: (1) at the end of year 1, and (2)
at the end of year 10. For year 1, the Total Annual Expenses are assessed as
well as the withdrawal charges. For year 10, the example shows the aggregate of
all the annual expenses assessed for the 10 years, but there is no withdrawal
charge.
The premium tax is assumed to be 0% in both examples.
<TABLE>
<CAPTION>
EXAMPLES
Total Annual
Total Annual Total Annual Total Expenses At End of:
Insurance Portfolio Annual (1) (2)
Charges Expenses Expenses 1 Year 10 Years
------------ ------------ -------- ------------ --------
<S> <C> <C> <C> <C> <C>
MANAGED BY STANDISH, AYER & WOOD, INC.
Money Market Portfolio 1.50% .50% 2.00% $_______ $_______
Intermediate Fixed Income Portfolio 1.50% .80% 2.30% $_______ $_______
Mid Cap Equity Portfolio 1.50% .90% 2.40% $_______ $_______
MANAGED BY STANDISH INTERNATIONAL
MANAGEMENT COMPANY, L.P.
Global Fixed Income Portfolio 1.50% 1.00% 2.50% $_______ $_______
MANAGED BY KORNITZER CAPITAL MANAGEMENT, INC.
Balanced Portfolio 1.50% .90% 2.40% $_______ $_______
MANAGED BY STEIN ROE & FARNHAM, INCORPORATED
Small Cap Equity Portfolio 1.50% 1.05% 2.55% $_______ $_______
Large Cap Growth Portfolio 1.50% .90% 2.40% $_______ $_______
MANAGED BY DAVID L. BABSON & CO., INC.
Large Cap Value Portfolio 1.50% .90% 2.40% $_______ $_______
MANAGED BY LORD, ABBETT & CO.
Growth & Income Portfolio 1.50% .90% 2.40% $_______ $_______
MANAGED BY BBOI WORLDWIDE LLC
Berger/BIAM IPT - International Fund 1.50% 1.20% 2.70% $_______ $_______
</TABLE>
The expenses reflect the expense reimbursements or fee waivers by the Fund
managers. For more detailed information, see the Fee Table in the prospectus for
the Contract.
6. TAXES: Your earnings are not taxed until you take them out. If you take money
out during the accumulation phase, earnings come out first and are taxed as
income. If you are younger than 59 1/2 when you take money out, you may be
charged a 10% federal tax penalty on the earnings. Payments during the income
phase are considered partly a return of your original investment. That part of
each payment is not taxable as income.
7. ACCESS TO YOUR MONEY: You can take money out at any time during the
accumulation phase. After the first year, the first 10% of a withdrawal is not
subject to a withdrawal charge, unless you have already made another withdrawal
during the same contract year. Withdrawals in excess of that will be charged a
withdrawal charge which ranges to 7% in the first year and declines to 0% after
the seventh year. After BMA has had a payment for 7 years, there is no charge
for withdrawals. Each purchase payment you add to your Contract has its own 7
year withdrawal charge period. Of course, you may also have to pay income tax
and a tax penalty on any money you take out.
8. PERFORMANCE: The value of the Contract will vary up or down depending upon
the investment performance of the investment portfolios you choose. BMA may
provide total return figures for each investment portfolio.
9. DEATH BENEFIT: If you die before moving to the income phase, the beneficiary
will receive a death benefit. This death benefit will be the greater of: 1) the
payments you have made, less any money you have taken out and related withdrawal
charges; or 2) the value of your Contract.
10. OTHER INFORMATION: Free Look. If you cancel the Contract within 10 days
after receiving it we will send you whatever your Contract is worth on the day
we receive your request (this may be more or less than your original payment)
without assessing a withdrawal charge. If you have purchased the Contract as an
Individual Retirement Annuity (IRA), you will receive back your purchase
payment.
No Probate. In most cases, when you die, the beneficiary will receive the death
benefit without going through probate. However, the avoidance of probate does
not mean that the beneficiary will not have tax liability as a result of
receiving the death benefit.
Who should purchase the Contract? This Contract is designed for people seeking
long-term tax-deferred accumulation of assets, generally for retirement or other
long-term purposes. The tax-deferred feature is most attractive to people in
high federal and state tax brackets. You should not buy this Contract if you are
looking for a short-term investment or if you cannot take the risk of getting
back less money than you put in.
Additional Features. The Contract has additional features you might be
interested in. These include:
* You can arrange to have money automatically sent to you (monthly,
quarterly, semi-annually or annually) while your Contract is still in the
accumulation phase. Of course, you'll have to pay taxes on money you receive.
You may also have to pay a penalty tax on money you receive. We call this
feature the Automatic Withdrawal Program.
* If you purchased the Contract under an Individual Retirement Annuity, you
can arrange to have money sent to you each month or quarter to meet certain
required distribution requirements imposed by the Internal Revenue Code. We call
this feature the Minimum Distribution Program.
* You can arrange to have a regular amount of money automatically
transferred from the Money Market Portfolio or Fixed Account I to the investment
portfolios each month, theoretically giving you a lower average cost per unit
over time than a single one time purchase. We call this feature the Dollar Cost
Averaging Option.
* BMA will automatically readjust the money between investment portfolios
periodically to keep the blend you select. We call this feature the Asset
Rebalancing Option.
* Under certain circumstances, BMA will give you your money without a
withdrawal charge if you need it while you're in a nursing home, totally
disabled, terminally ill, involuntarily unemployed or divorced.
These features may not be available in your state and may not be suitable
for your particular situation.
11. INQUIRIES: If you need more information about buying a Contract, please
contact us at:
BMA
=============
(800) XXX-XXXX
THE FIXED
AND VARIABLE ANNUITY
ISSUED BY
BMA VARIABLE ANNUITY ACCOUNT A
AND
BUSINESS MEN'S ASSURANCE COMPANY OF AMERICA
This prospectus describes the Fixed and Variable Annuity Contract offered by
Business Men's Assurance Company of America (BMA).
The annuity contract has 12 investment choices - 2 fixed account options and 10
investment portfolios listed below. The 10 investment portfolios are part of
Investors Mark Series Fund, Inc. and Berger Institutional Products Trust. You
can put your money in Fixed Account I, any currently available guarantee period
of Fixed Account II and/or any of these investment portfolios.
INVESTORS MARK SERIES FUND, INC.
MANAGED BY STANDISH, AYER & WOOD, INC.
Money Market
Intermediate Fixed Income
Mid Cap Equity
MANAGED BY STANDISH INTERNATIONAL MANAGEMENT COMPANY, L.P.
Global Fixed Income
MANAGED BY KORNITZER CAPITAL MANAGEMENT, INC.
Balanced
MANAGED BY STEIN ROE & FARNHAM, INCORPORATED
Small Cap Equity
Large Cap Growth
MANAGED BY DAVID L. BABSON & CO., INC.
Large Cap Value
MANAGED BY LORD, ABBETT & CO.
Growth & Income
BERGER INSTITUTIONAL PRODUCTS TRUST
MANAGED BY BBOI WORLDWIDE LLC
Berger/BIAM IPT - International
Please read this prospectus before investing and keep it on file for future
reference. It contains important information about the BMA Fixed and Variable
Annuity Contract.
To learn more about the BMA Fixed and Variable Annuity Contract, you can obtain
a copy of the Statement of Additional Information (SAI) dated _________, 1997.
The SAI has been filed with the Securities and Exchange Commission (SEC) and is
legally a part of the prospectus. The SEC has a website (http://www.sec.gov)
that contains the SAI, material incorporated by reference, and other information
regarding companies that file electronically. The Table of Contents of the SAI
is on Page __ of this prospectus. For a free copy of the SAI, call us at (800)
XXX-XXXX or write us at:
- -----------------------------.
INVESTMENT IN A VARIABLE ANNUITY CONTRACT IS SUBJECT TO RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL. THE CONTRACTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY FINANCIAL INSTITUTION AND ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD,
OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
______________, 1997.
TABLE OF CONTENTS
PAGE
INDEX OF SPECIAL TERMS
FEE TABLE
EXAMPLES
1. THE ANNUITY CONTRACT
2. ANNUITY PAYMENTS (THE INCOME PHASE)
3. PURCHASE
Purchase Payments
Allocation of Purchase Payments
Accumulation Units
4. INVESTMENT OPTIONS
Transfers
Dollar Cost Averaging Option
Asset Rebalancing Option
Asset Allocation Option
Voting Rights
Substitution
5. EXPENSES
Coverage Charge
Contract Maintenance Charge
Withdrawal Charge
Waiver of Withdrawal Charge Benefits
Reduction or Elimination of the Withdrawal Charge
Premium Taxes
Transfer Fee
Income Taxes
Investment Portfolio Expenses
6. TAXES
Annuity Contracts in General
Qualified and Non-Qualified Contracts
Withdrawals - Non-Qualified Contracts
Withdrawals - Qualified Contracts
Diversification
7. ACCESS TO YOUR MONEY
Automatic Withdrawal Program
Minimum Distribution Program
8. PERFORMANCE
9. DEATH BENEFIT
Upon Your Death
Death of Annuitant
10. OTHER INFORMATION
BMA
The Separate Account
Distributor
Administration
Beneficiary
Assignment
Suspension of Payments or Transfers
Financial Statements
TABLE OF CONTENTS OF THE
STATEMENT OF ADDITIONAL INFORMATION
INDEX OF SPECIAL TERMS
We have tried to make this prospectus as readable and understandable for you as
possible. By the very nature of the contract, however, certain technical words
or terms are unavoidable. We have identified the following as some of these
words or terms. They are identified in the text in italic and the page that is
indicated here is where we believe you will find the best explanation for the
word or term.
PAGE
Accumulation Phase
Accumulation Unit
Annuitant
Annuity Date
Annuity Options
Annuity Payments
Annuity Unit
Beneficiary
Fixed Account
Guarantee Period
Income Phase
Investment Portfolios
Joint Owner
Non-Qualified
Owner
Purchase Payment
Qualified
Tax Deferral
FEE TABLE
<TABLE>
<CAPTION>
<S> <C> <C>
OWNER TRANSACTION EXPENSES Number of Complete
Withdrawal Charge (as a percentage of Years from date Withdrawal
purchase payments) (see Note 2 below) of Purchase Payment Charge
------------------- ----------
0 7%
1 6%
2 5%
3 4%
4 3%
5 2%
6 1%
7 and thereafter 0%
</TABLE>
TRANSFER FEE (see Note 3 below)
No charge for first 12 transfers in a contract year during the accumulation
phase and no charge for four transfers in a contract year during the income
phase; thereafter, the fee is $25 per transfer.
CONTRACT MAINTENANCE CHARGE (see Note 4 below) $35 per contract per year
SEPARATE ACCOUNT ANNUAL EXPENSES
(as a percentage of average account value)
Coverage Charge 1.40%
-----
TOTAL SEPARATE ACCOUNT ANNUAL EXPENSES 1.40%
INVESTMENT PORTFOLIO EXPENSES
(as a percentage of the average daily net assets of an investment portfolio)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Total Annual
Other Portfolio
Expenses Expenses
(after expense (after expense
reimbursement- reimbursement-
Management See Notes 5 See Notes 5
Fees and 6 below) and 6 below)
---------- ------------- ---------------
INVESTORS MARK SERIES FUND, INC.
MANAGED BY STANDISH, AYER & WOOD, INC.
Money Market Portfolio .40% .10% .50%
Intermediate Fixed Income Portfolio .60% .20% .80%
Mid Cap Equity Portfolio .80% .10% .90%
MANAGED BY STANDISH INTERNATIONAL
MANAGEMENT COMPANY, L.P.
Global Fixed Income Portfolio .75% .25% 1.00%
MANAGED BY KORNITZER CAPITAL MANAGEMENT, INC.
Balanced Portfolio .80% .10% .90%
MANAGED BY STEIN ROE & FARNHAM, INCORPORATED
Small Cap Equity Portfolio .95% .10% 1.05%
Large Cap Growth Portfolio .80% .10% .90%
MANAGED BY DAVID L. BABSON & CO., INC.
Large Cap Value Portfolio .80% .10% .90%
MANAGED BY LORD, ABBETT & CO.
Growth & Income Portfolio .80% .10% .90%
BERGER INSTITUTIONAL PRODUCTS TRUST
MANAGED BY BBOI WORLDWIDE LLC
Berger/BIAM IPT - International Fund .00% 1.20% 1.20%
</TABLE>
EXAMPLES
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return on assets:
(a) upon surrender at the end of each time period;
(b) if the contract is not surrendered or is annuitized with a life
annuity option or another annuity option with an annuity payment period of more
than 5 years.
<TABLE>
<CAPTION>
Time Periods
1 Year 3 Years
------ -------
<S> <C> <C>
INVESTORS MARK SERIES FUND, INC.
MANAGED BY STANDISH, AYER & WOOD, INC.
Money Market $_______ $_______
Intermediate Fixed Income $_______ $_______
Mid Cap Equity $_______ $_______
MANAGED BY STANDISH INTERNATIONAL
MANAGEMENT COMPANY, L.P.
Global Fixed Income $_______ $_______
MANAGED BY KORNITZER CAPITAL MANAGEMENT, INC.
Balanced $_______ $_______
MANAGED BY STEIN ROE & FARNHAM, INCORPORATED
Small Cap Equity $_______ $_______
Large Cap Growth $_______ $_______
MANAGED BY DAVID L. BABSON & CO., INC.
Large Cap Value $_______ $_______
MANAGED BY LORD, ABBETT & CO.
Growth & Income $_______ $_______
BERGER INSTITUTIONAL PRODUCTS TRUST
MANAGED BY BBOI WORLDWIDE LLC
Berger/BIAM IPT - International $_______ $_______
</TABLE>
EXPLANATION OF FEE TABLE AND EXAMPLES
1. The purpose of the Fee Table is to show you the various expenses you
will incur directly or indirectly with the contract. The Fee Table reflects
expenses of the Separate Account as well as of the investment portfolios.
2. After BMA has had a purchase payment for 7 years, there is no charge by
BMA for a withdrawal of that purchase payment. You may also have to pay income
tax and a tax penalty on any money you take out. After the first Contract Year,
the first 10% of a withdrawal is not subject to a withdrawal charge, unless you
have already made another withdrawal during that same Contract Year.
3. BMA will not charge you the transfer fee even if there are more than 12
transfers in a year during the accumulation phase if the transfer is for the
Dollar Cost Averaging Option, the Asset Allocation Option or Asset Rebalancing
Option.
4. During the accumulation phase, BMA will not charge the contract
maintenance charge if the value of your contract is $100,000 or more, although,
if you make a complete withdrawal, BMA will charge the contract maintenance
charge. If you own more than one BMA contract, we will determine the total value
of all the contracts. If the total value of all the contracts is more than
$100,000, we will not assess the contract maintenance charge. During the income
phase, BMA will deduct the contract maintenance charge from each annuity payment
on a prorata basis.
5. Investors Mark Advisors, LLC has voluntarily agreed to reimburse
expenses of each Portfolio of Investors Mark Series Fund, Inc. for the first
year of operations so that the annual expenses do not exceed the amounts set
forth above under "Total Annual Portfolio Expenses" for each Portfolio. Absent
such expense reimbursement, the Total Annual Portfolio Expenses are estimated to
be: 1.15% for the Money Market Portfolio; 2.04% for the Intermediate Fixed
Income Portfolio; 2.04% for the Global Fixed Income Portfolio; 1.10% for the Mid
Cap Equity Portfolio; 1.10% for the Balanced Portfolio; 1.25% for the Small Cap
Equity Portfolio; 1.02% for the Large Cap Growth Portfolio and Large Cap Value
Portfolio; and 1.10% for the Growth & Income Portfolio.
6. BBOI Worldwide LLC has voluntarily agreed to waive its advisory fee and
expects to voluntarily reimburse the Berger/BIAM IPT - International Fund for
additional expenses to the extent that normal operating expenses in any fiscal
year, including the investment advisory fee but excluding brokerage commissions,
interest, taxes and extraordinary expenses, of the Fund exceed 1.20% of the
Fund's average daily net assets. Absent the voluntary waiver and reimbursement,
the management fee for the Fund would be .90% and its "Total Annual Portfolio
Expenses" are estimated to be 8.96%.
7. Premium taxes are not reflected. Premium taxes may apply depending on
the state where you live.
8. The assumed average contract size is $________________.
9. THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
1. THE ANNUITY CONTRACT
This Prospectus describes the Fixed and Variable Annuity Contract offered by
BMA.
An annuity is a contract between you, the owner, and an insurance company (in
this case BMA), where the insurance company promises to pay you an income, in
the form of annuity payments, beginning on a designated date that's at least one
year after we issue your contract. Until you decide to begin receiving annuity
payments, your annuity is in the accumulation phase. Once you begin receiving
annuity payments, your contract switches to the income phase. The contract
benefits from tax deferral.
Tax deferral means that you are not taxed on earnings or appreciation on the
assets in your contract until you take money out of your contract.
The contract is called a variable annuity because you can choose among 10
investment portfolios and, depending upon market conditions, you can make or
lose money in any of these portfolios. If you select the variable annuity
portion of the contract, the amount of money you are able to accumulate in your
contract during the accumulation phase depends upon the investment performance
of the investment portfolio(s) you select. The amount of the annuity payments
you receive during the income phase from the variable annuity portion of the
contract also depends upon the investment performance of the investment
portfolios you select for the income phase.
The contract also contains two fixed account options (Fixed Account I and Fixed
Account II). The fixed accounts offer interest rates that are guaranteed by BMA.
For Fixed Account I, an interest rate is set at the time of each purchase
payment or transfer to the account. This initial interest rate is guaranteed for
12 months. Fixed Account II offers different guarantee periods. A guarantee
period is the time period for which an interest rate is credited in Fixed
Account II. Currently, the following guarantee periods are available: three
years, five years, and seven years. Each purchase payment or transfer to a
guarantee period has its own interest rate. BMA guarantees that the interest
credited to the fixed account options will not be less than 3% per year. If you
make a withdrawal, transfer or if your contract switches to the income phase
before the end of the guarantee period you have selected, an interest adjustment
will be made to the value of your contract. If you select either fixed account
option, your money will be placed with the other general assets of BMA. If you
select either fixed account, the amount of money you are able to accumulate in
your contract during the accumulation phase depends upon the total interest
credited to your contract. The amount of the annuity payments you receive during
the income phase from the general account will remain level for the entire
income phase.
As owner of the contract, you exercise all rights under the contract. You can
change the owner at any time by notifying BMA in writing. You and your spouse
can be named joint owners. We have described more information on this in Section
10 - Other Information.
2. ANNUITY PAYMENTS (THE INCOME PHASE)
Under the contract you can receive regular income payments. You can choose the
date on which those payments begin. We call that date the annuity date. Your
first annuity payment will be made one month (or one modal period if you do not
choose monthly payments) after the annuity date. Currently, the amount of each
payment is determined ten business days prior to the payment date. You can also
choose among income plans. We call those annuity options.
We ask you to choose your annuity date when you purchase the contract. You can
change it at any time before the annuity date with 30 days notice to us. Your
annuity date cannot be any earlier than one year after we issue the contract.
Annuity payments must begin by the later of the first day of the first calendar
month after annuitant's 95th birthday or 10 years after we issue your contract
(or the maximum date allowed under state law). The annuitant is the person whose
life we look to when we make annuity payments.
You can select and/or change an annuity option at any time prior to the annuity
date (with 30 days notice to us). If you do not choose an annuity option, we
will assume that you selected Option 2 which will provide a life annuity with
120 monthly payments guaranteed.
At the annuity date, you can choose whether payments will come from a fixed
account, referred to as a fixed annuity, or from the same investment
portfolio(s) available during the accumulation phase, referred to as a variable
annuity, or a combination of both. If you choose to have any portion of your
annuity payments come from the fixed accounts, Fixed Accounts I and II will be
terminated, and the fixed annuity payments will be made from BMA's general
account. The general account of BMA contains all of our assets except the assets
of the Separate Account and other separate accounts we may have. The dollar
amount of each fixed annuity payment will be determined in accordance with the
annuity tables in the contract. If, on the annuity date, we are using annuity
payment tables for similar fixed annuity contracts which would provide a larger
annuity payment, we will use those tables. Once determined, the amount of the
fixed annuity payment will not change, unless you transfer a portion of your
variable annuity payment into the fixed annuity. Up to four times each contract
year you may increase the amount of your fixed annuity payment by a transfer of
all or portion of your variable annuity payment to the fixed annuity option.
After the annuity date, you may not transfer any portion of the fixed annuity
into the variable annuity payment.
If you choose to have any portion of your annuity payments come from the
investment portfolio(s), the dollar amount of the initial variable annuity
payment will depend upon the value of your contract in the investment
portfolio(s) and the annuity tables in the contract. The dollar amount of this
variable annuity payment is not guaranteed to remain level. Each variable
annuity payment will vary depending on the investment performance of the
investment portfolio(s) you have selected. A 3.5% annual investment rate is used
in the annuity tables in the contract. If the actual performance of the
investment portfolio(s) you have selected equals 3.5%, then the variable annuity
payments will remain level. If the actual performance of the investment
portfolio(s) you have selected exceeds the 3.5% assumption, the variable annuity
payments will increase, and conversely, if the performance is less than the
3.5%, the payments will decrease.
You can choose one of the following annuity options. Any other annuity option
acceptable to us may also be selected. After annuity payments begin, you cannot
change the annuity option.
OPTION 1. LIFE ANNUITY. Under this option, we will make an annuity payment each
month so long as the annuitant is alive. After the annuitant dies, we stop
making annuity payments.
OPTION 2. LIFE ANNUITY WITH 10 OR 20 YEARS GUARANTEED. Under this option, we
will make an annuity payment each month so long as the annuitant is alive.
However, if, when the annuitant dies, we have made annuity payments for less
than the selected guaranteed period, we will then continue to make annuity
payments for the rest of the guaranteed period to the beneficiary. If the
beneficiary does not want to receive annuity payments, he or she can ask us for
a single lump sum.
OPTION 3. JOINT AND LAST SURVIVOR ANNUITY. Under this option, we will make
annuity payments each month so long as the annuitant and a second person are
both alive. When either of these people dies, we will continue to make annuity
payments, so long as the survivor continues to live. The amount of the annuity
payments we will make to the survivor can be equal to 100%, 75% or 50% of the
amount that we would have paid if both were alive.
OPTION 4. JOINT AND LAST SURVIVOR ANNUITY WITH 10 OR 20 YEARS GUARANTEED. Under
this option, we will make annuity payments each month so long as the annuitant
and a second person are both alive. However, if when the last annuitant dies, we
have made annuity payments for less than the selected guaranteed period, we will
then continue to make annuity payments for the rest of the guaranteed period to
the beneficiary. If the beneficiary does not want to receive annuity payments,
he or she can ask us for a single lump sum.
3. PURCHASE
PURCHASE PAYMENTS
A purchase payment is the money you give us to buy the contract. The minimum we
will accept for a non-qualified contract is $10,000. If you buy the contract as
part of an Individual Retirement Annuity (IRA), the minimum purchase payment we
will accept is $2,000. The maximum we accept is $1 million without our prior
approval. You can make additional purchase payments of $1,000 or more.
ALLOCATION OF PURCHASE PAYMENTS
When you purchase a contract, we will allocate your purchase payment to Fixed
Account I, any currently available guarantee period of Fixed Account II and/or
one or more of the investment portfolios you have selected. If you make
additional purchase payments, we will allocate them in the same way as your
first purchase payment unless you tell us otherwise. Any allocation to Fixed
Account I or to any guarantee period option of Fixed Account II must be at least
$5,000. Any allocation to an investment portfolio must be at least $1,000.
Allocation percentages need to be in whole numbers. Each allocation must be at
least 10%. BMA reserves the right to decline any purchase payment.
At its discretion, BMA may refuse purchase payments into Fixed Account I or
Fixed Account II if the total value of Fixed Accounts I and II is greater than
or equal to 30% of the value of your contract at the time of the purchase
payment.
If you change your mind about owning the contract, you can cancel it within 10
days after receiving it (free look period). When you cancel the contract within
this time period, BMA will not assess a withdrawal charge. You will receive back
whatever your contract is worth on the day we receive your request. If you have
purchased the contract as an IRA, we are required to give you back your purchase
payment if you decide to cancel your contract within 10 days after receiving it.
Once we receive your purchase payment and the necessary information, we will
issue your contract and allocate your first purchase payment within 2 business
days. If you do not give us all of the information we need, we will contact you
to get it. If for some reason we are unable to complete this process within 5
business days, we will either send back your money or get your permission to
keep it until we get all of the necessary information. If you add more money to
your contract by making additional purchase payments, we will credit these
amounts to your contract within one business day. Our business day closes when
the New York Stock Exchange closes, usually 4:00 P.M. Eastern time.
ACCUMULATION UNITS
The value of the variable annuity portion of your contract will go up or down
depending upon the investment performance of the investment portfolio(s) you
choose. In order to keep track of the value of your contract, we use a unit of
measure we call an accumulation unit. (An accumulation unit works like a share
of a mutual fund.) During the income phase of the contract we call the unit an
annuity unit.
Every day we determine the value of an accumulation unit for each of the
investment portfolios by multiplying the accumulation unit value for the
previous business day by a factor for the current business day. The factor is
determined by:
1. dividing the value of an investment portfolio share at the end of the
current business day by the value of an investment portfolio share for the
previous business day; and
2. multiplying it by one minus the daily amount of the insurance charges
and any charges for taxes.
The value of an accumulation unit may go up or down from day to day.
When you make a purchase payment, we credit your contract with accumulation
units. The number of accumulation units credited is determined by dividing the
amount of the purchase payment allocated to an investment portfolio divided by
the value of the accumulation unit for that investment portfolio.
We calculate the value of an accumulation unit for each investment portfolio
after the New York Stock Exchange closes each day and then credit your contract.
EXAMPLE:
On Monday we receive an additional purchase payment of $4,000 from you. You have
told us you want this to go to the Balanced Portfolio. When the New York Stock
Exchange closes on that Monday, we determine that the value of an accumulation
unit for the Balanced Portfolio is $12.70. We then divide $4,000 by $12.70 and
credit your contract on Monday night with 314.96 accumulation units for the
Balanced Portfolio.
4. INVESTMENT OPTIONS
The Contract offers 10 investment portfolios which are listed below. Additional
investment portfolios may be available in the future.
YOU SHOULD READ THE PROSPECTUSES FOR THESE FUNDS CAREFULLY BEFORE INVESTING.
COPIES OF THESE PROSPECTUSES ARE ATTACHED TO THIS PROSPECTUS.
INVESTORS MARK SERIES FUND, INC.
Investors Mark Series Fund, Inc. is managed by Investors Mark Advisors, LLC
(Adviser), which is an affiliate of BMA. Investors Mark Series Fund, Inc. is a
mutual fund with multiple portfolios. Each investment portfolio has a different
investment objective. The Adviser has engaged sub-advisers to provide investment
advice for the individual investment portfolios. The following investment
portfolios are available under the contract.
Standish, Ayer & Wood, Inc. is the sub-adviser to the following portfolios:
Money Market Portfolio
Intermediate Fixed Income Portfolio
Mid Cap Equity Portfolio
Standish International Management Company, L.P. is the sub-adviser to the
following portfolio:
Global Fixed Income Portfolio
Kornitzer Capital Management, Inc. is the sub-adviser to the following
portfolio:
Balanced Portfolio
Stein Roe & Farnham, Incorporated is the sub-adviser to the following
portfolios:
Small Cap Equity Portfolio
Large Cap Growth Portfolio
David L. Babson & Co., Inc. is the sub-adviser to the following portfolio:
Large Cap Value Portfolio
Lord, Abbett & Co. is the sub-adviser to the following portfolio:
Growth & Income Portfolio
BERGER INSTITUTIONAL PRODUCTS TRUST
Berger Institutional Products Trust is a mutual fund with multiple portfolios,
one of which, the Berger/BIAM IPT - International Fund, is managed by BBOI
Worldwide LLC. BBOI Worldwide LLC has retained Bank of Ireland Asset Management
(U.S.) Limited ("BIAM") as subadviser.
The following investment portfolio is available under the contract:
Berger/BIAM IPT - International Fund
TRANSFERS
You can transfer money among the fixed accounts and the 10 investment
portfolios.
TRANSFERS DURING THE ACCUMULATION PHASE.
You can make 12 transfers every year during the accumulation phase without
charge. We measure a year from the anniversary of the day we issued your
contract. You can make a transfer to or from the fixed accounts and to or from
any investment portfolio. If you make more than 12 transfers in a year, there is
a transfer fee deducted. The fee is $25 per transfer. The following apply to any
transfer during the accumulation phase:
1. The minimum amount which you can transfer from the investment portfolio,
Fixed Account I or any guarantee period of Fixed Account II is $250 or your
entire interest in the investment portfolio, Fixed Account I or a guarantee
period of Fixed Account II, if less.
2. We reserve the right to restrict the maximum amount which you can
transfer from any fixed account option (unless the transfer is from a guarantee
period of Fixed Account II just expiring) to 25% of the amount in Fixed Account
I or any guarantee period of Fixed Account II. Currently, BMA is waiving this
restriction. This requirement is waived if the transfer is part of the dollar
cost averaging, asset allocation or asset rebalancing options. This requirement
is also waived if the transfer is to switch your contract to the income phase.
3. At its discretion, BMA may refuse transfers to Fixed Account I or Fixed
Account II if the total value of Fixed Accounts I and II is greater than or
equal to 30% of the value of your contract at the time of the transfer.
4. The minimum amount which must remain in any investment portfolio after a
transfer is $1,000. The minimum amount which must remain in Fixed Account I or
any guarantee period of Fixed Account II after a transfer is $5,000.
5. You may not make a transfer until after the end of the free look
period.
6. We reserve the right to restrict the number of transfers per year and to
restrict transfers made on consecutive business days.
Your right to make transfers may be modified if we determine, in our sole
opinion, that the exercise of the transfer right by one or more owners is, or
would be, harmful to other owners.
You can make transfers by telephone. If you own the contract with a joint owner,
unless BMA is instructed otherwise, BMA will accept instructions from either you
or the other owner. BMA will use reasonable procedures to confirm that
instructions given us by telephone are genuine. If BMA fails to use such
procedures, we may be liable for any losses due to unauthorized or fraudulent
instructions. BMA tape records all telephone instructions.
TRANSFERS DURING THE INCOME PHASE.
You can make 4 transfers between the investment portfolio(s) during a contract
year during the income phase. We measure a year from the anniversary of the day
we issued your contract. You can also make 4 transfers each contract year from
the investment portfolios to the general account. You may not make a transfer
from the general account to the investment portfolios. These four transfers each
contract year during the income phase are free. If you make more than 4
transfers in a year during the income phase, a transfer fee of $25 per transfer
(after the 4 free) will be charged.
You can make transfers by telephone. If you own the contract with a joint owner,
unless BMA is instructed otherwise, BMA will accept instructions from either you
or the other owner. BMA will use reasonable procedures to confirm that
instructions given us by telephone are genuine. If BMA fails to use such
procedures, we may be liable for any losses due to unauthorized or fraudulent
instructions. BMA tape records all telephone instructions.
DOLLAR COST AVERAGING OPTION
The dollar cost averaging option allows you to systematically transfer a set
amount each month from the Money Market Portfolio or Fixed Account I to any of
the other investment portfolio(s). By allocating amounts on a regular schedule
as opposed to allocating the total amount at one particular time, you may be
less susceptible to the impact of market fluctuations.
The minimum amount which can be transferred each month is $250. You must have at
least $25,000 in the Money Market Portfolio or Fixed Account I (or the amount
required to complete your program, if less) in order to participate in dollar
cost averaging.
All dollar cost averaging transfers will be made on the 15th day of the month
unless that day is not a business day. If it is not, then the transfer will be
made the next business day. You must participate in dollar cost averaging for at
least 6 months.
If you participate in dollar cost averaging, the transfers made under this
option are not taken into account in determining any transfer fee.
No automatic withdrawals and minimum distributions will be allowed if you are
participating in dollar cost averaging.
ASSET REBALANCING OPTION
Once your money has been allocated among the investment portfolios, the
performance of each portfolio may cause your allocation to shift. If the value
of your contract is at least $10,000, you can direct us to automatically
rebalance your contract each quarter to return to your original percentage
allocations by selecting our asset rebalancing option. The program will
terminate if you make any transfer outside of the investment portfolios you have
selected under the asset rebalancing option. The minimum period to participate
in this program is 6 months. The transfer date will be the 15th of the month
unless that day is not a business day. If it is not, then the transfer will be
made the next business day. The fixed account options are not part of asset
rebalancing. If you participate in the asset rebalancing option, the transfers
made under the program are not taken into account in determining any transfer
fee.
EXAMPLE:
Assume that you want your initial purchase payment split between 2 investment
portfolios. You want 40% to be in the Intermediate Fixed Income Portfolio and
60% to be in the Mid Cap Equity Portfolio. Over the next 2 1/2 months the bond
market does very well while the stock market performs poorly. At the end of the
first quarter, the Intermediate Fixed Income Portfolio now represents 50% of
your holdings because of its increase in value. If you had chosen to have your
holdings rebalanced quarterly, on the first day of the next quarter, BMA would
sell some of your units in the Intermediate Fixed Income Portfolio to bring its
value back to 40% and use the money to buy more units in the Mid Cap Equity
Portfolio to increase those holdings to 60%.
ASSET ALLOCATION OPTION
BMA recognizes the value to certain owners of having available, on a continuous
basis, advice for the allocation of your money among the investment options
available under the Contracts. Certain providers of these types of services have
agreed to provide such services to owners in accordance with BMA's
administrative rules regarding such programs.
BMA has made no independent investigation of these programs. BMA has only
established that these programs are compatible with our administrative systems
and rules. Approved asset allocation programs are only available during the
accumulation phase.
Even though BMA permits the use of approved asset allocation programs, the
contract was not designed for professional market timing organizations. Repeated
patterns of frequent transfers are disruptive to the operations of the
investment portfolios, and should BMA become aware of such disruptive practices,
we may modify the transfer provisions of the contract.
If you participate in an approved asset allocation program, the transfers made
under the program are not taken into account in determining any transfer fee.
VOTING RIGHTS
BMA is the legal owner of the investment portfolio shares. However, BMA believes
that when an investment portfolio solicits proxies in conjunction with a vote of
shareholders, it is required to obtain from you and other owners instructions as
to how to vote those shares. When we receive those instructions, we will vote
all of the shares we own in proportion to those instructions. This will also
include any shares that BMA owns on its own behalf. Should BMA determine that it
is no longer required to comply with the above, we will vote the shares in our
own right.
SUBSTITUTION
BMA may be required to substitute one of the investment portfolios you have
selected with another portfolio. We would not do this without the prior approval
of the Securities and Exchange Commission. We will give you notice of our intent
to do this.
5. EXPENSES
There are charges and other expenses associated with the contracts that reduce
the return on your investment in the contract. These charges and expenses are:
COVERAGE CHARGE
Each day, BMA makes a deduction for its coverage charge. BMA does this as part
of its calculation of the value of the accumulation units and the annuity units.
The coverage charge is equal, on an annual basis, to 1.40% of the average daily
value of the contract invested in an investment portfolio, after expenses have
been deducted. We reserve the right to increase this charge but it will never be
more than 1.75% of the average daily value of the contract invested in an
investment portfolio, after expenses have been deducted.
CONTRACT MAINTENANCE CHARGE
During the accumulation phase, every year on the anniversary of the date when
your contract was issued, BMA deducts $35 from your contract as a contract
maintenance charge. We reserve the right to increase this charge but it will
never be more than $60 each year.
BMA will not deduct this charge, if when the deduction is to be made, the value
of your contract is $100,000 or more. If you own more than one BMA contract, we
will determine the total value of all your contracts. If the owner is a
non-natural person (e.g., a corporation), we will look to the annuitant to
determine this information. BMA may some time in the future discontinue this
practice and deduct the charge.
If you make a complete withdrawal from your contract, the contract maintenance
charge will also be deducted. A pro rata portion of the charge will be deducted
if the annuity date is other than an anniversary. After the annuity date, the
charge will be collected monthly out of each annuity payment.
WITHDRAWAL CHARGE
During the accumulation phase, you can make withdrawals from your contract. BMA
keeps track of each purchase payment. After the first contract year, the first
10% of a withdrawal is not subject to the withdrawal charge (unless you have
already made another withdrawal during that same contract year), if on the day
you make your withdrawal, the value of your contact is $10,000 or more (free
withdrawal amount). A withdrawal charge will be deducted from any withdrawals in
excess of the free withdrawal amount. The withdrawal charge and the free
withdrawal amount are calculated at the time of each withdrawal.
The withdrawal charge is:
<TABLE>
<CAPTION>
Number of Complete Years
from Date of Purchase Payment Withdrawal Charge
----------------------------- -----------------
<S> <C>
0 7%
1 6%
2 5%
3 4%
4 3%
5 2%
6 1%
7 and thereafter 0%
</TABLE>
After BMA has had a purchase payment for 7 years, there is no charge when you
withdraw that purchase payment. When the withdrawal is for only part of the
value of your contract, the withdrawal charge is deducted from the remaining
value in your contract.
NOTE: For tax purposes, withdrawals are considered to have come from the last
money into the contract. Thus, for tax purposes, earnings are considered to come
out first.
BMA does not assess the withdrawal charge on any amounts paid out as death
benefits or as annuity payments if a life annuity option or another option with
an annuity payment period of more than 5 years is selected.
WAIVER OF WITHDRAWAL CHARGE BENEFITS
Under certain circumstances, after the first year, BMA will allow you to take
your money out of the contract without deducting the withdrawal charge: 1) if
you become confined to a long term care facility, nursing facility or hospital
for at least 90 consecutive days; 2) if you become totally disabled; or 3) if
you become terminally ill (which means that you are not expected to live more
than 12 months); (4) if you are involuntarily unemployed for at least 90
consecutive days; or (5) if you get divorced. These benefits may not be
available in your state.
REDUCTION OR ELIMINATION OF THE WITHDRAWAL CHARGE
BMA will reduce or eliminate the amount of the withdrawal charge when the
contract is sold under circumstances which reduce its sales expense. Some
examples are: if there is a large group of individuals that will be purchasing
the contract or a prospective purchaser already had a relationship with BMA. BMA
will not deduct a withdrawal charge under a contract issued to an officer,
director or employee of BMA or any of its affiliates.
PREMIUM TAXES
Some states and other governmental entities (e.g., municipalities) charge
premium taxes or similar taxes. BMA is responsible for the payment of these
taxes and will make a deduction from the value of the contract for them. Some of
these taxes are due when the contract is issued, others are due when annuity
payments begin. It is BMA's current practice to not charge anyone for these
taxes until annuity payments begin. BMA may some time in the future discontinue
this practice and assess the charge when the tax is due. Premium taxes generally
range from 0% to 4%, depending on the state.
TRANSFER FEE
You can make 12 free transfers every year during the accumulation phase and 4
free transfers every year during the income phase. We measure a year from the
day we issue your contract. If you make more than 12 transfers a year during the
accumulation phase or more than 4 transfers a year during the income phase, we
will deduct a transfer fee of $25.
If the transfer is part of the dollar cost averaging option, the asset
rebalancing option or an approved asset allocation program, it will not count in
determining the transfer fee.
INCOME TAXES
BMA will deduct from the contract for any income taxes which it incurs because
of the contract. At the present time, we are not making any such deductions.
INVESTMENT PORTFOLIO EXPENSES
There are deductions from and expenses paid out of the assets of the various
investment portfolios, which are described in the attached fund prospectuses.
6. TAXES
NOTE: BMA has prepared the following information on taxes as a general
discussion of the subject. It is not intended as tax advice to any individual.
You should consult your own tax adviser about your own circumstances. BMA has
included in the Statement of Additional Information an additional discussion
regarding taxes.
ANNUITY CONTRACTS IN GENERAL
Annuity contracts are a means of setting aside money for future needs usually
retirement. Congress recognized how important saving for retirement was and
provided special rules in the Internal Revenue Code (Code) for annuities.
Simply stated these rules provide that you will not be taxed on the earnings on
the money held in your annuity contract until you take the money out. This is
referred to as tax deferral. There are different rules as to how you will be
taxed depending on how you take the money out and the type of contract qualified
or non-qualified (see following sections).
You, as the owner, will not be taxed on increases in the value of your contract
until a distribution occurs - either as a withdrawal or as annuity payments.
When you make a withdrawal you are taxed on the amount of the withdrawal that is
earnings. For annuity payments, different rules apply. A portion of each annuity
payment is treated as a partial return of your purchase payments and will not be
taxed. The remaining portion of the annuity payment will be treated as ordinary
income. How the annuity payment is divided between taxable and non-taxable
portions depends upon the period over which the annuity payments are expected to
be made. Annuity payments received after you have received all of your purchase
payments are fully includible in income.
When a non-qualified contract is owned by a non-natural person (e.g.,
corporation or certain other entities other than tax-qualified trusts), the
contract will generally not be treated as an annuity for tax purposes.
QUALIFIED AND NON-QUALIFIED CONTRACTS
If you purchase the contract as an individual and not an Individual Retirement
Annuity (IRA), your contract is referred to as a non-qualified contract.
If you purchase the contract under an IRA, your contract is referred to as a
qualified contract.
WITHDRAWALS - NON-QUALIFIED CONTRACTS
If you make a withdrawal from your contract, the Code treats such a withdrawal
as first coming from earnings and then from your purchase payments. Such
withdrawn earnings are includible in income.
The Code also provides that any amount received under an annuity contract which
is included in income may be subject to a penalty. The amount of the penalty is
equal to 10% of the amount that is includible in income. Some withdrawals will
be exempt from the penalty. They include any amounts: (1) paid on or after the
taxpayer reaches age 59 1/2; (2) paid after you die; (3) paid if the taxpayer
becomes totally disabled (as that term is defined in the Code); (4) paid in a
series of substantially equal payments made annually (or more frequently) under
a lifetime annuity, (5) paid under an immediate annuity; or (6) which come from
purchase payments made prior to August 14, 1982.
WITHDRAWALS - QUALIFIED CONTRACTS
The above information describing the taxation of non-qualified contracts does
not apply to qualified contracts. There are special rules that govern with
respect to qualified contracts. We have provided a more complete discussion in
the Statement of Additional Information.
DIVERSIFICATION
The Code provides that the underlying investments for a variable annuity must
satisfy certain diversification requirements in order to be treated as an
annuity contract. BMA believes that the investment portfolios are being managed
so as to comply with the requirements.
Neither the Code nor the Internal Revenue Service Regulations issued to date
provide guidance as to the circumstances under which you, because of the degree
of control you exercise over the underlying investments, and not BMA would be
considered the owner of the shares of the investment portfolios. If this occurs,
it will result in the loss of the favorable tax treatment for the contract. It
is unknown to what extent under federal tax law owners are permitted to select
investment portfolios, to make transfers among the investment portfolios or the
number and type of investment portfolios owners may select from. If any guidance
is provided which is considered a new position, then the guidance would
generally be applied prospectively. However, if such guidance is considered not
to be a new position, it may be applied retroactively. This would mean that you,
as the owner of the contract, could be treated as the owner of the investment
portfolios.
Due to the uncertainty in this area, BMA reserves the right to modify the
contract in an attempt to maintain favorable tax treatment.
7. ACCESS TO YOUR MONEY
You can have access to the money in your contract: (1) by making a withdrawal
(either a partial or a complete withdrawal); (2) by electing to receive annuity
payments; or (3) when a death benefit is paid to your beneficiary. Withdrawals
can only be made during the accumulation phase.
When you make a complete withdrawal you will receive the value of the contract
on the day you made the withdrawal less any applicable withdrawal charge, less
any premium tax and less any contract maintenance charge. (See Section 5.
Expenses for a discussion of the charges.)
Unless you instruct BMA otherwise, any partial withdrawal will be made pro-rata
from all the investment portfolio(s) and the fixed account option(s) you
selected. Under most circumstances the amount of any partial withdrawal must be
for at least $1,000 (withdrawals made pursuant to the automatic withdrawal
program and the minimum distribution option are not subject to this minimum).
BMA requires that after a partial withdrawal is made you keep at least $1,000 in
any investment portfolio and $5,000 in Fixed Account I or any guarantee period
of Fixed Account II. BMA also requires that after a partial withdrawal is made
you keep at least $10,000 in your contract.
INCOME TAXES, TAX PENALTIES AND CERTAIN RESTRICTIONS MAY APPLY TO ANY WITHDRAWAL
YOU MAKE.
AUTOMATIC WITHDRAWAL PROGRAM
This program provides periodic payments to you of up to 10% of the value of your
contract each year. No withdrawal charge will be deducted for these payments.
Each payment must be for at least $250. You may select to have payments made
monthly, quarterly, semi-annually or annually. If you use this program, you may
not also make the single 10% free withdrawal allowed each year. For a discussion
of the withdrawal charge and the 10% free withdrawal, see Section 5. Expenses.
All automatic withdrawals will be made on the 15th day of the month unless that
day is not a business day. If it is not, then the payment will be the next
business day.
No minimum distribution payments and/or dollar cost averaging transfers will be
allowed if you are participating in the automatic withdrawal program.
INCOME TAXES AND TAX PENALTIES MAY APPLY TO AUTOMATIC WITHDRAWALS.
MINIMUM DISTRIBUTION PROGRAM
If you own an IRA contract, you may select the minimum distribution program.
Under this program, BMA will make payments to you from your contract that are
designed to meet the applicable minimum distribution requirements imposed by the
Internal Revenue Code for qualified plans. BMA will make payments to you monthly
or quarterly. The payments will not be subject to the withdrawal charge and will
be instead of the 10% single free withdrawal amount.
No dollar cost averaging transfers or automatic withdrawals will be allowed if
you are participating in the minimum distribution program.
8. PERFORMANCE
BMA may periodically advertise performance of the various investment portfolios.
BMA will calculate performance by determining the percentage change in the value
of an accumulation unit by dividing the increase (decrease) for that unit by the
value of the accumulation unit at the beginning of the period. This performance
number reflects the deduction of the coverage charge and the fees and expenses
of the investment portfolio. It does not reflect the deduction of any applicable
contract maintenance charge and withdrawal charge. The deduction of any
applicable contract maintenance charge and withdrawal charge would reduce the
percentage increase or make greater any percentage decrease. Any advertisement
will also include average annual total return figures which will reflect the
deduction of the coverage charge, contract maintenance charges, withdrawal
charges as well as the fees and expenses of the investment portfolio.
BMA may also advertise yield information. If it does, it will provide you with
information regarding how yield is calculated. More detailed information
regarding how performance is calculated is found in the SAI.
BMA may, from time to time, include in its advertising and sales materials, tax
deferred compounding charts and other hypothetical illustrations, which may
include comparisons of currently taxable and tax deferred investment programs,
based on selected tax brackets.
9. DEATH BENEFIT
UPON YOUR DEATH
If you die during the accumulation phase, BMA will pay a death benefit to your
beneficiary (see below). If you have a joint owner, the death benefit will be
paid when the first of you dies. The surviving joint owner will be treated as
the beneficiary.
The death benefit will be the greater of:
1. Total purchase payments, less withdrawals (and any withdrawal charges
paid on the withdrawals); or
2. The value of your contract at the time the death benefit is to be
paid.
The entire death benefit must be paid within 5 years of the date of death unless
the beneficiary elects to have the death benefit payable under an annuity
option. The death benefit payable under an annuity option must be paid over the
beneficiary's lifetime or for a period not extending beyond the beneficiary's
life expectancy. Payment must begin within one year of the date of death. If the
beneficiary is the spouse of the owner, he/she can continue the contract in
his/her own name at the then current value. Payment to the beneficiary (other
than a lump sum) may only be elected during the 60 day period beginning with the
date we receive proof of death. If a lump sum payment is elected and all the
necessary requirements are met, the payment will be made within 7 days.
If you or any join owner dies during the income phase (and you are not the
annuitant) any remaining payments under the annuity option chosen will continue
at least as rapidly as under the method of distribution in effect at the time of
death. If you die during the income phase, the beneficiary becomes the owner.
DEATH OF ANNUITANT
If the annuitant, not an owner or joint owner, dies during the accumulation
phase, you can name a new annuitant. If no annuitant is named within 30 days of
the death of the annuitant, you will become the annuitant. However, if the owner
is a non-natural person (for example, a corporation), then the death of
annuitant will be treated as the death of the owner, and a new annuitant may not
be named.
Upon the death of the annuitant during the income phase, the death benefit, if
any, will be as provided for in the annuity option selected. The death benefits
will be paid at least as rapidly as under the method of distribution in effect
at the annuitant's death.
10. OTHER INFORMATION
BMA
Business Men's Assurance Company of America (BMA), BMA Tower, One Penn Valley
Park, Kansas City, Missouri 64108 was incorporated in 1909 under the laws of the
state of Missouri. BMA is licensed to do business in all states and the District
of Columbia. BMA is a wholly owned subsidiary of Generali-Assicurazioni Generali
group, which is the largest insurance organization in Italy.
THE SEPARATE ACCOUNT
BMA has established a separate account, BMA Variable Annuity Account A (Separate
Account), to hold the assets that underlie the contracts. The Board of Directors
of BMA adopted a resolution to establish the Separate Account under Missouri
insurance law on December 10, 1996. We have registered the Separate Account with
the Securities and Exchange Commission as a unit investment trust under the
Investment Company Act of 1940.
The assets of the Separate Account are held in BMA's name on behalf of the
Separate Account and legally belong to BMA. However, those assets that underlie
the contracts, are not chargeable with liabilities arising out of any other
business BMA may conduct. All the income, gains and losses (realized or
unrealized) resulting from these assets are credited to or charged against the
contracts and not against any other contracts BMA may issue.
DISTRIBUTOR
Jones & Babson, Inc., acts as the distributor of the contracts. Jones & Babson,
Inc. is a wholly-owned subsidiary of BMA.
Commissions will be paid to broker-dealers who sell the contracts.
Broker-dealers will be paid commissions of up to 6% of purchase payments.
Sometimes, BMA may enter into an agreement with the broker-dealer to pay the
broker-dealer commissions as a combination of a certain amount of the commission
at the time of sale and a trail commission (which when totaled will not exceed
6% of purchase payments).
ADMINISTRATION
BMA has hired ____________ to perform certain administrative services regarding
the contracts. The administrative services include issuance of the contracts and
maintenance of contract owner's records.
OWNERSHIP
OWNER. You, as the owner of the contract, have all the rights under the
contract. The owner is as designated at the time the contract is issued, unless
changed. The beneficiary becomes the owner when a death benefit is payable.
JOINT OWNER. The contract can be owned by joint owners. Any joint owner must be
the spouse of the other owner. Upon the death of either joint owner, the
surviving owner will be the primary beneficiary. Any other beneficiary
designation will be treated as a contingent beneficiary unless otherwise
indicated.
BENEFICIARY
The beneficiary is the person(s) or entity you name to receive any death
benefit. The beneficiary is named at the time the contract is issued unless
changed at a later date. Unless an irrevocable beneficiary has been named, you
can change the beneficiary at any time before you die.
ASSIGNMENT
You can assign the contract at any time during your lifetime. BMA will not be
bound by the assignment until it receives the written notice of the assignment.
BMA will not be liable for any payment or other action we take in accordance
with the contract before we receive notice of the assignment. AN ASSIGNMENT MAY
BE A TAXABLE EVENT.
If the contract is issued pursuant to a qualified plan, there may be limitations
on your ability to assign the contract.
SUSPENSION OF PAYMENTS OR TRANSFERS
BMA may be required to suspend or postpone payments for withdrawal or transfers
for any period when:
1. the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
2. trading on the New York Stock Exchange is restricted;
3. an emergency exists as a result of which disposal of shares of the
investment portfolios is not reasonably practicable or BMA cannot reasonably
value the shares of the investment portfolios;
4. during any other period when the Securities and Exchange Commission, by
order, so permits for the protection of owners.
BMA has reserved the right to defer payment for a withdrawal or transfer from
the fixed accounts for the period permitted by law but not for more than six
months.
FINANCIAL STATEMENTS
The financial statements of BMA have been included in the Statement of
Additional Information.
TABLE OF CONTENTS OF THE
STATEMENT OF ADDITIONAL INFORMATION
Company
Experts
Legal Opinions
Distributor
Calculation of Performance Data
Tax Status
Annuity Provisions
Mortality and Expense Guarantee
Financial Statements
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FRONT
Business Men's Assurance Company of America
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Please send me, at no charge, the Statement of Additional
Information dated _____________, for the Annuity Contract issued
by BMA
(Please print or type and fill in all information)
BACK ________________________________________________________________________
Name
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Address
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City State Zip Code
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Form #
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STATEMENT OF ADDITIONAL INFORMATION
INDIVIDUAL FLEXIBLE PAYMENT
VARIABLE ANNUITY CONTRACTS
ISSUED BY
BMA VARIABLE ANNUITY ACCOUNT A
AND
BUSINESS MEN'S ASSURANCE COMPANY OF AMERICA
____________________, 1997
THIS IS NOT A PROSPECTUS. THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD BE
READ IN CONJUNCTION WITH THE PROSPECTUS FOR THE INDIVIDUAL FLEXIBLE PAYMENT
VARIABLE ANNUITY CONTRACTS WHICH ARE REFERRED TO HEREIN.
THE PROSPECTUS CONCISELY SETS FORTH INFORMATION THAT A PROSPECTIVE INVESTOR
OUGHT TO KNOW BEFORE INVESTING. FOR A COPY OF THE PROSPECTUS, CALL OR WRITE THE
COMPANY AT: .
THIS STATEMENT OF ADDITIONAL INFORMATION AND THE PROSPECTUS ARE DATED
____________, 1997.
TABLE OF CONTENTS
COMPANY
EXPERTS
LEGAL OPINIONS
DISTRIBUTOR
CALCULATION OF PERFORMANCE DATA
TAX STATUS
ANNUITY PROVISIONS
MORTALITY AND EXPENSE GUARANTEE
FINANCIAL STATEMENTS
COMPANY
Business Men's Assurance Company of America ("BMA" or the "Company"), BMA Tower,
One Penn Valley Park, Kansas City, Missouri, 64108 was incorporated in 1909
under the laws of the state of Missouri. BMA is licensed to do business in all
states and the District of Columbia. BMA is a wholly owned subsidiary of
Generali-Assicurazioni Generali group, which is the largest insurance
organization in Italy.
EXPERTS
The financial statements of the Company as of December 31, 199 , included in
this Statement of Additional Information have been audited by _______________,
independent auditors, as indicated in their reports included in this Statement
of Additional Information and are included herein in reliance upon such reports
and upon the authority of said firm as experts in accounting and auditing.
LEGAL OPINIONS
Blazzard, Grodd & Hasenauer, P.C., Westport, Connecticut, has provided advice on
certain matters relating to the federal securities and income tax laws in
connection with the contracts.
DISTRIBUTOR
Jones & Babson, Inc., acts as the distributor. The offering is on a continuous
basis.
CALCULATION OF PERFORMANCE DATA
TOTAL RETURN
From time to time, the Company may advertise performance data. Such data will
show the percentage change in the value of an accumulation unit based on the
performance of an investment portfolio over a period of time, usually a calendar
year, determined by dividing the increase (decrease) in value for that unit by
the accumulation unit value at the beginning of the period.
Any such advertisement will include total return figures for the time periods
indicated in the advertisement. Such total return figures will reflect the
deduction of a 1.40% coverage charge, the expenses for the underlying investment
portfolio being advertised and any applicable contract maintenance charges and
withdrawal charges.
The hypothetical value of a Contract purchased for the time periods described in
the advertisement will be determined by using the actual accumulation unit
values for an initial $1,000 purchase payment, and deducting any applicable
contract maintenance charges and any applicable withdrawal charges to arrive at
the ending hypothetical value. The average annual total return is then
determined by computing the fixed interest rate that a $1,000 purchase payment
would have to earn annually, compounded annually, to grow to the hypothetical
value at the end of the time periods described. The formula used in these
calculations is:
n
P ( 1 + T) = ERV
Where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the time periods used (or
fractional portion thereof) of a hypothetical $1,000 payment made at
the beginning of the time periods used.
The Company may also advertise performance data which will be calculated in the
same manner as described above but which will not reflect the deduction of any
withdrawal charge and contract maintenance charge. The deduction of any
withdrawal charge and contract maintenance charge would reduce any percentage
increase or make greater any percentage decrease.
Owners should note that the investment results of each investment portfolio will
fluctuate over time, and any presentation of the investment portfolio's total
return for any period should not be considered as a representation of what an
investment may earn or what an Owner's total return may be in any future period.
YIELD
THE MONEY MARKET PORTFOLIO. The Company may advertise yield and effective
information for the Money Market Portfolio. Both yield figures are based on
historical earnings and are not intended to indicate future performance. The
"yield" of the subaccount refers to the income generated by an investment in the
subaccount over a seven-day period (which period will be stated in the
advertisement). This income is then "annualized." That is, the amount of income
generated by the investment during that week is assumed to be generated each
week 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 the subaccount 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 Money Market Portfolio's current yield is computed on a base period return
of a hypothetical Contract having a beginning balance of one accumulation unit
for a particular period of time (generally seven days). The return is determined
by dividing the net change (exclusive of any capital changes) in such
accumulation unit by its beginning value, and then multiplying it by 365/7 to
get the annualized current yield. The calculation of net change reflects the
value of additional shares purchased with the dividends paid by the Portfolio,
and the deduction of the coverage charge and contract maintenance charge. The
effective yield reflects the effects of compounding and represents an
annualization of the current return with all dividends reinvested.
(Effective yield = [(Base Period Return + 1)365/7]-1.)
The Company does not currently advertise any yield information for the Money
Market Portfolio.
OTHER PORTFOLIOS. The Company may also quote current yield in sales literature,
advertisements and Owner communications for the other Portfolios. Each Portfolio
(other than the Money Market Portfolio) will publish standardized total return
information with any quotation of current yield.
The yield computation is determined by dividing the net investment income per
accumulation unit earned during the period (minus the deduction for the coverage
charge and the contract maintenance charge) by the accumulation unit value on
the last day of the period, according to the following formula:
6
Yield = 2 [[(a-b) + 1] - 1]
-----
cd
Where:
a = net investment income earned during the period by the Portfolio
attributable to shares owned by the subaccount.
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.
The above formula will be used in calculating quotations of yield, based on
specified 30-day periods identified in the advertisement or communication. Yield
calculations assume no withdrawal charge. The Company does not currently
advertise any yield information for any Portfolio.
HISTORICAL UNIT VALUES
The Company may also show historical accumulation unit values in certain
advertisements containing illustrations. These illustrations will be based on
actual accumulation unit values.
In addition, the Company may distribute sales literature which compares the
percentage change in accumulation unit values for any of the investment
portfolios against established market indices such as the Standard & Poor's 500
Composite Stock Price Index, the Dow Jones Industrial Average or other
management investment companies which have investment objectives similar to the
investment portfolio being compared. The Standard & Poor's 500 Composite Stock
Price Index is an unmanaged, unweighted average of 500 stocks, the majority of
which are listed on the New York Stock Exchange. The Dow Jones Industrial
Average is an unmanaged, weighted average of thirty blue chip industrial
corporations listed on the New York Stock Exchange. Both the Standard & Poor's
500 Composite Stock Price Index and the Dow Jones Industrial Average assume
quarterly reinvestment of dividends.
REPORTING AGENCIES
The Company may also distribute sales literature which compares the performance
of the accumulation unit values of the Contracts with the unit values of
variable annuities issued by other insurance companies. Such information will be
derived from the Lipper Variable Insurance Products Performance Analysis
Service, the VARDS Report or from Morningstar.
The Lipper Variable Insurance Products Performance Analysis Service is published
by Lipper Analytical Services, Inc., a publisher of statistical data which
currently tracks the performance of almost 4,000 investment companies. The
rankings compiled by Lipper may or may not reflect the deduction of asset-based
insurance charges. The Company's sales literature utilizing these rankings will
indicate whether or not such charges have been deducted. Where the charges have
not been deducted, the sales literature will indicate that if the charges had
been deducted, the ranking might have been lower.
The VARDS Report is a monthly variable annuity industry analysis compiled by
Variable Annuity Research & Data Service of Roswell, Georgia and published by
Financial Planning Resources, Inc. The VARDS rankings may or may not reflect the
deduction of asset-based insurance charges. In addition, VARDS prepares risk
adjusted rankings, which consider the effects of market risk on total return
performance. This type of ranking may address the question as to which funds
provide the highest total return with the least amount of risk. Other ranking
services may be used as sources of performance comparison, such as
CDA/Weisenberger.
Morningstar rates a variable annuity against its peers with similar investment
objectives. Morningstar does not rate any variable annuity that has less than
three years of performance data.
TAX STATUS
GENERAL
NOTE: THE FOLLOWING DESCRIPTION IS BASED UPON THE COMPANY'S UNDERSTANDING OF
CURRENT FEDERAL INCOME TAX LAW APPLICABLE TO ANNUITIES IN GENERAL. THE COMPANY
CANNOT PREDICT THE PROBABILITY THAT ANY CHANGES IN SUCH LAWS WILL BE MADE.
PURCHASERS ARE CAUTIONED TO SEEK COMPETENT TAX ADVICE REGARDING THE POSSIBILITY
OF SUCH CHANGES. THE COMPANY DOES NOT GUARANTEE THE TAX STATUS OF THE CONTRACTS.
PURCHASERS BEAR THE COMPLETE RISK THAT THE CONTRACTS MAY NOT BE TREATED AS
"ANNUITY CONTRACTS" UNDER FEDERAL INCOME TAX LAWS. IT SHOULD BE FURTHER
UNDERSTOOD THAT THE FOLLOWING DISCUSSION IS NOT EXHAUSTIVE AND THAT SPECIAL
RULES NOT DESCRIBED HEREIN MAY BE APPLICABLE IN CERTAIN SITUATIONS. MOREOVER, NO
ATTEMPT HAS BEEN MADE TO CONSIDER ANY APPLICABLE STATE OR OTHER TAX LAWS.
Section 72 of the Code governs taxation of annuities in general. An Owner is not
taxed on increases in the value of a Contract until distribution occurs, either
in the form of a lump sum payment or as annuity payments under the Annuity
Option selected. For a lump sum payment received as a total withdrawal (total
surrender), the recipient is taxed on the portion of the payment that exceeds
the cost basis of the Contract. For Non-Qualified Contracts, this cost basis is
generally the purchase payments, while for Qualified Contracts there may be no
cost basis. The taxable portion of the lump sum payment is taxed at ordinary
income tax rates.
For annuity payments, a portion of each payment in excess of an exclusion amount
is includible in taxable income. The exclusion amount for payments based on a
fixed annuity option is determined by multiplying the payment by the ratio that
the cost basis of the Contract (adjusted for any period or refund feature) bears
to the expected return under the Contract. The exclusion amount for payments
based on a variable annuity option is determined by dividing the cost basis of
the Contract (adjusted for any period certain or refund guarantee) by the number
of years over which the annuity is expected to be paid. Payments received after
the investment in the Contract has been recovered (i.e. when the total of the
excludable amount equals the investment in the Contract) are fully taxable. The
taxable portion is taxed at ordinary income tax rates. For certain types of
Qualified Plans there may be no cost basis in the Contract within the meaning of
Section 72 of the Code. Owners, Annuitants and Beneficiaries under the Contracts
should seek competent financial advice about the tax consequences of any
distributions. The Company is taxed as a life insurance company under the Code.
For federal income tax purposes, the Separate Account is not a separate entity
from the Company, and its operations form a part of the Company.
DIVERSIFICATION
Section 817(h) of the Code imposes certain diversification standards on the
underlying assets of variable annuity contracts. The Code provides that a
variable annuity contract will not be treated as an annuity contract for any
period (and any subsequent period) for which the investments are not, in
accordance with regulations prescribed by the United States Treasury Department
("Treasury Department"), adequately diversified. Disqualification of the
Contract as an annuity contract would result in the imposition of federal income
tax to the Owner with respect to earnings allocable to the Contract prior to the
receipt of payments under the Contract. The Code contains a safe harbor
provision which provides that annuity contracts such as the Contract meet the
diversification requirements if, as of the end of each quarter, the underlying
assets meet the diversification standards for a regulated investment company and
no more than fifty-five percent (55%) of the total assets consist of cash, cash
items, U.S. Government securities and securities of other regulated investment
companies.
On March 2, 1989, the Treasury Department issued Regulations (Treas.
Reg.1.817-5), which established diversification requirements for the investment
portfolios underlying variable contracts such as the Contract. The Regulations
amplify the diversification requirements for variable contracts set forth in the
Code and provide an alternative to the safe harbor provision described above.
Under the Regulations, an investment portfolio will be deemed adequately
diversified if: (1) no more than 55% of the value of the total assets of the
portfolio is represented by any one investment; (2) no more than 70% of the
value of the total assets of the portfolio is represented by any two
investments; (3) no more than 80% of the value of the total assets of the
portfolio is represented by any three investments; and (4) no more than 90% of
the value of the total assets of the portfolio is represented by any four
investments.
The Code provides that, for purposes of determining whether or not the
diversification standards imposed on the underlying assets of variable contracts
by Section 817(h) of the Code have been met, "each United States government
agency or instrumentality shall be treated as a separate issuer."
The Company intends that all investment portfolios underlying the Contracts will
be managed in such a manner as to comply with these diversification
requirements.
The Treasury Department has indicated that the diversification Regulations do
not provide guidance regarding the circumstances in which Owner control of the
investments of the Separate Account will cause the Owner to be treated as the
owner of the assets of the Separate Account, thereby resulting in the loss of
favorable tax treatment for the Contract. At this time it cannot be determined
whether additional guidance will be provided and what standards may be contained
in such guidance.
The amount of Owner control which may be exercised under the Contract is
different in some respects from the situations addressed in published rulings
issued by the Internal Revenue Service in which it was held that the policy
owner was not the owner of the assets of the separate account. It is unknown
whether these differences, such as the Owner's ability to transfer among
investment choices or the number and type of investment choices available, would
cause the Owner to be considered as the owner of the assets of the Separate
Account resulting in the imposition of federal income tax to the Owner with
respect to earnings allocable to the Contract prior to receipt of payments under
the Contract.
In the event any forthcoming guidance or ruling is considered to set forth a new
position, such guidance or ruling will generally be applied only prospectively.
However, if such ruling or guidance was not considered to set forth a new
position, it may be applied retroactively resulting in the Owners being
retroactively determined to be the owners of the assets of the Separate Account.
Due to the uncertainty in this area, the Company reserves the right to modify
the Contract in an attempt to maintain favorable tax treatment.
MULTIPLE CONTRACTS
The Code provides that multiple non-qualified annuity contracts which are issued
within a calendar year to the same contract owner by one company or its
affiliates are treated as one annuity contract for purposes of determining the
tax consequences of any distribution. Such treatment may result in adverse tax
consequences including more rapid taxation of the distributed amounts from such
combination of contracts. Owners should consult a tax adviser prior to
purchasing more than one non-qualified annuity contract in any calendar year.
CONTRACTS OWNED BY OTHER THAN NATURAL PERSONS
Under Section 72(u) of the Code, the investment earnings on premiums for the
Contracts will be taxed currently to the Owner if the Owner is a non-natural
person, e.g., a corporation or certain other entities. Such Contracts generally
will not be treated as annuities for federal income tax purposes. However, this
treatment is not applied to a Contract held by a trust or other entity as an
agent for a natural person nor to Contracts held by Qualified Plans. Purchasers
should consult their own tax counsel or other tax adviser before purchasing a
Contract to be owned by a non-natural person.
TAX TREATMENT OF ASSIGNMENTS
An assignment or pledge of a Contract may be a taxable event. Owners should
therefore consult competent tax advisers should they wish to assign or pledge
their Contracts.
INCOME TAX WITHHOLDING
All distributions or the portion thereof which is includible in the gross income
of the Owner are subject to federal income tax withholding. Generally, amounts
are withheld from periodic payments at the same rate as wages and at the rate of
10% from non-periodic payments. However, the Owner, in most cases, may elect not
to have taxes withheld or to have withholding done at a different rate.
Effective January 1, 1993, certain distributions from retirement plans qualified
under Section 401 or Section 403(b) of the Code, which are not directly rolled
over to another eligible retirement plan or individual retirement account or
individual retirement annuity, are subject to a mandatory 20% withholding for
federal income tax. The 20% withholding requirement generally does not apply to:
a) a series of substantially equal payments made at least annually for the life
or life expectancy of the participant or joint and last survivor expectancy of
the participant and a designated beneficiary or for a specified period of 10
years or more; or b) distributions which are required minimum distributions; or
c) the portion of the distributions not includible in gross income (i.e. returns
of after-tax contributions). Participants should consult their own tax counsel
or other tax adviser regarding withholding requirements.
TAX TREATMENT OF WITHDRAWALS - NON-QUALIFIED CONTRACTS
Section 72 of the Code governs treatment of distributions from annuity
contracts. It provides that if the Contract Value exceeds the aggregate purchase
payments made, any amount withdrawn will be treated as coming first from the
earnings and then, only after the income portion is exhausted, as coming from
the principal. Withdrawn earnings are includible in gross income. It further
provides that a ten percent (10%) penalty will apply to the income portion of
any premature distribution. However, the penalty is not imposed on amounts
received: (a) after the taxpayer reaches age 59 1/2; (b) after the death of the
Owner; (c) if the taxpayer is totally disabled (for this purpose disability is
as defined in Section 72(m)(7) of the Code); (d) in a series of substantially
equal periodic payments made not less frequently than annually for the life (or
life expectancy) of the taxpayer or for the joint lives (or joint life
expectancies) of the taxpayer and his or her Beneficiary; (e) under an immediate
annuity; or (f) which are allocable to purchase payments made prior to August
14, 1982.
The above information does not apply to Qualified Contracts. However, separate
tax withdrawal penalties and restrictions may apply to such Qualified Contracts.
(See "Tax Treatment of Withdrawals - Qualified Contracts" below.)
QUALIFIED PLANS
The Contracts offered herein may also be used as Qualified Contracts. Owners,
Annuitants and Beneficiaries are cautioned that benefits under a Qualified
Contract may be subject to the terms and conditions of the plan regardless of
the terms and conditions of the Contracts issued pursuant to the plan. The
following discussion of Qualified Contracts is not exhaustive and is for general
informational purposes only. The tax rules regarding Qualified Contracts are
very complex and will have differing applications depending on individual facts
and circumstances. Each purchaser should obtain competent tax advice prior to
purchasing Qualified Contracts.
Qualified Contracts include special provisions restricting Contract provisions
that may otherwise be available as described herein. Generally, Qualified
Contracts are not transferable except upon surrender or annuitization.
On July 6, 1983, the Supreme Court decided in ARIZONA GOVERNING COMMITTEE V.
NORRIS that optional annuity benefits provided under an employer's deferred
compensation plan could not, under Title VII of the Civil Rights Act of 1964,
vary between men and women. Qualified Contracts will utilize annuity tables
which do not differentiate on the basis of sex. Such annuity tables will also be
available for use in connection with certain non-qualified deferred compensation
plans.
Section 408(b) of the Code permits eligible individuals to contribute to an
individual retirement program known as an Individual Retirement Annuity (IRA).
Under applicable limitations, certain amounts may be contributed to an IRA which
will be deductible from the individual's gross income. These IRAs are subject to
limitations on eligibility, contributions, transferability and distributions.
(See "Tax Treatment of Withdrawals - Qualified Contracts" below.) Under certain
conditions, distributions from other IRAs and other Qualified Plans may be
rolled over or transferred on a tax-deferred basis into an IRA. Sales of
Contracts for use with IRAs are subject to special requirements imposed by the
Code, including the requirement that certain informational disclosure be given
to persons desiring to establish an IRA. Purchasers of Contracts to be qualified
as Individual Retirement Annuities should obtain competent tax advice as to the
tax treatment and suitability of such an investment.
Section 408(p) of the Code permits certain employers (generally those with less
than 100 employees) to establish a retirement program for employees by using
Savings Incentive Match Plan Individual Retirement Annuities ("SIMPLE IRA").
SIMPLE IRA programs can only be established with the approval of and adoption by
the employer of the Owner of the SIMPLE IRA. Contributions to SIMPLE IRAs will
be made pursuant to a salary reduction agreement in which an Owner would
authorize his/her employer to deduct a certain amount from his/her pay and
contribute it directly to the SIMPLE IRA.
TAX TREATMENT OF WITHDRAWALS - QUALIFIED CONTRACTS
Section 72(t) of the Code imposes a 10% penalty tax on the taxable portion of
any distribution from qualified retirement plans, including Contracts issued and
qualified under Code Section 408(b) (Individual Retirement Annuities). To the
extent amounts are not includible in gross income because they have been rolled
over to an IRA or to another eligible Qualified Plan, no tax penalty will be
imposed. The penalty is increased to 25% instead of 10% for SIMPLE IRAs if
distribution occurs within the first two years after the Owner first
participated in the SIMPLE IRA. The tax penalty will not apply to the following
distributions: (a) if distribution is made on or after the date on which the
Annuitant reaches age 59 1/2; (b) distributions following the death or
disability of the Annuitant (for this purpose disability is as defined in
Section 72(m)(7) of the Code); (c) distributions that are part of substantially
equal periodic payments made not less frequently than annually for the life (or
life expectancy) of the Annuitant or the joint lives (or joint life
expectancies) of the Annuitant and his or her designated Beneficiary; (d)
distributions made to the Owner or Annuitant (as applicable) to the extent such
distributions do not exceed the amount allowable as a deduction under Code
Section 213 to the Owner or Annuitant (as applicable) for amounts paid during
the taxable year for medical care; or (e) distributions from an Individual
Retirement Annuity for the purchase of medical insurance (as described in
Section 213(d)(1)(D) of the Code) for the Owner or Annuitant (as applicable) and
his or her spouse and dependents if the Owner or Annuitant (as applicable) has
received unemployment compensation for at least 12 weeks. This exception will no
longer apply after the Owner or Annuitant (as applicable) has been re-employed
for at least 60 days.
Generally, distributions from a qualified plan must commence no later than April
1 of the calendar year following the year in which the employee attains age 70
1/2. Required distributions must be over a period not exceeding the life
expectancy of the individual or the joint lives or life expectancies of the
individual and his or her designated beneficiary. If the required minimum
distributions are not made, a 50% penalty tax is imposed as to the amount not
distributed.
ANNUITY PROVISIONS
FIXED ANNUITY
A fixed annuity is an annuity with payments which are guaranteed as to dollar
amount by the Company and do not vary with the investment experience of the
Separate Account. The dollar amount of each fixed annuity will be determined in
accordance with annuity tables contained in the contract.
VARIABLE ANNUITY
A variable annuity is an annuity with payments which: (1) are not predetermined
as to dollar amount; and (2) will vary in amount with the net investment results
of the applicable investment portfolio(s) of the Separate Account.
ANNUITY UNIT VALUE:
On the Annuity Date a fixed number of Annuity Units will be purchased as
follows:
For each Subaccount the fixed number of Annuity Units is equal to the Adjusted
Contract Value for all Subaccounts, divided first by $1000, then multiplied by
the appropriate Annuity Payment amount from the Annuity Table contained in the
Contract for each $1000 of value for the Annuity Option selected, and then
divided by the Annuity Unit value for that Subaccount on the Annuity Date. After
that, the number of Annuity Units in each Subaccount remains unchanged unless
you elect to transfer between Subaccounts. All calculations will appropriately
reflect the Annuity Payment frequency selected.
On each Annuity Payment date, the total Variable Annuity Payment is the sum of
the Annuity Payments for each Subaccount. The Variable Annuity Payment in each
Subaccount is determined by multiplying the number of Annuity Units then
allocated to such Subaccount by the Annuity Unit value for that Subaccount.
On each subsequent business day, the value of an Annuity Unit is determined in
the following way:
First: The net Investment Factor is determined as described in the Prospectus
under "Accumulation Units".
Second: The value of an Annuity Unit for a business day is equal to:
a. the value of the Annuity Unit for the immediately preceding
business day;
b. multiplied by the Net Investment Factor for current business day;
c. divided by the Assumed Net Investment Factor (see below) for the
business day.
The Assumed Net Investment Factor is equal to one plus the Assumed Investment
Return which is used in determining the basis for the purchase of an Annuity,
adjusted to reflect the particular business day. The Assumed Investment Return
that we will use is 3 1/2%. However, we may agree with you to use a different
value.
MORTALITY AND EXPENSE GUARANTEE
We guarantee that the dollar amount of each Annuity Payment after the first will
not be affected by variations in mortality or expense experience.
FINANCIAL STATEMENTS
The audited financial statements of the Company as of December 31, 199_ included
herein should be considered only as bearing upon the ability of the Company to
meet its obligations under the Contracts.
[Financial Statements will be filed by Amendment]
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
a. Financial Statements
The financial statements of the Company will be filed by Pre-Effective
Amendment.
b. Exhibits
1. Resolution of Board of Directors of the Company authorizing the
establishment of the Variable Account
2. Not Applicable
3. Principal Underwriter's Agreement (to be filed by Amendment)
4. Individual Variable Annuity Contract
5. Application for Individual Variable Annuity Contract (to be filed
by Amendment)
6. (i) Copy of Articles of Incorporation of the Company (to be
filed by Amendment)
(ii) Copy of the Bylaws of the Company (to be filed by Amendment)
7. Not Applicable
8. Form of Fund Participation Agreement (to be filed by Amendment)
9. Opinion and Consent of Counsel (to be filed by Amendment)
10. Independent Auditors' Consent (to be filed by Amendment)
11. Not Applicable
12. Not Applicable
13. Not Applicable
14. Company Organizational Chart (to be filed by Amendment)
27. Not Applicable
Item 25. Directors and Officers of the Depositor
The following are the Officers and Directors of the Company:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices
Business Address with Depositor
<S> <C>
Giorgio Balzer Director, Chairman of the Board and
BMA Tower Chief Executive Officer
700 Karnes Blvd.
Kansas City, MO 64108-3306
Robert Thomas Rakich Director, President and Chief Operating Officer
BMA Tower
700 Karnes Blvd.
Kansas City, MO 64108-3306
Dennis Keith Cisler Senior Vice President - Information
BMA Tower Systems
700 Karnes Blvd.
Kansas City, MO 64108-3306
David Lee Higley Senior Vice President & Chief Financial
BMA Tower Officer
700 Karnes Blvd.
Kansas City, MO 64108-3306
Stephen Stanley Soden Senior Vice President - BMA Financial
BMA Tower Group
700 Karnes Blvd.
Kansas City, MO 64108-3306
Michael Kent Deardorff Vice President - BMA Financial Group
BMA Tower Marketing
700 Karnes Blvd.
Kansas City, MO 64108-3306
James Evan Kilmer Vice President - Taxes
BMA Tower
700 Karnes Blvd.
Kansas City, MO 64108-3306
Edward Scott Ritter Vice President - Corporate Development
BMA Tower
700 Karnes Blvd.
Kansas City, MO 64108-3306
David A. Gates Director - Regulatory Affairs
BMA Tower
700 Karnes Blvd.
Kansas City, MO 64108-3306
Martin Jefferson Fuller Senior Vice President - Insurance
BMA Tower Distribution
700 Karnes Blvd.
Kansas City, MO 64108-3306
Robert Noel Sawyer Senior Vice President & Chief Investment
BMA Tower Officer
700 Karnes Blvd.
Kansas City, MO 64108-3306
Vernon Wirt Voorhees II Director, Senior Vice President -
BMA Tower Corporate Services & Secretary
700 Karnes Blvd.
Kansas City, MO 64108-3306
Margaret Mary Heidkamp Vice President - Management Services
BMA Tower
700 Karnes Blvd.
Kansas City, MO 64108-3306
Jay Brian Kinnamon Vice President & Corporate Actuary
BMA Tower
700 Karnes Blvd.
Kansas City, MO 64108-3306
Susan Annette Sweeney Vice President - Treasurer & Controller
BMA Tower
700 Karnes Blvd.
Kansas City, MO 64108-3306
Gerald W. Selig Actuary - Accumulation Products
BMA Tower
700 Karnes Blvd.
Kansas City, MO 64108-3306
Thomas Morton Bloch Director
Gianguido Castagno Director
William Thomas Grant II Director
Donald Joyce Hall, Jr. Director
Allan Drue Jennings Director
David Woods Kemper Director
Giorgio Liveris Director
John Kessander Lundberg Director
John Pierre Mascotte Director
Giovanni Perissinotto Director
</TABLE>
Item 26. Persons Controlled by or Under Common Control with the Depositor
or Registrant
The Company organizational chart will be filed by Amendment
Item 27. Number of Contract Owners
Not Applicable
Item 28. Indemnification
The Bylaws of the Company provide that:
[to be filed by Amendment]
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted for directors and officers or controlling persons of the
Company pursuant to the foregoing, or otherwise, the Company 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, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company 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
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
Item 29. Principal Underwriters
a. Jones & Babson, Inc. is the principal underwriter for the Contracts.
b. The following are the officers and directors of Jones & Babson, Inc.:
<TABLE>
<CAPTION>
Name and Positions and Offices
Business Address with Underwriter
- ------------------------- ---------------------
<S> <C>
Larry D. Armel President,
5540 Belinder Director and CEO
Shawnee Mission, KS 66205
P. Bradley Adams Vice President and
12019 Cherokee Lane Treasurer
Leawood, KS 66209
Michael A. Brummel Vice President
1304 NE Oakwood Drive Asst. Sec. and Asst. Treas.
Lee's Summit, MO 64086
Martin A. Cramer Vice President and
13885 S. Brougham Drive Secretary
Olathe, KS 66062
Beth L. Allwood Asst Vice President and
601 SW Walden Lane Asst. Secretary
Lee's Summit, MO 64081
John G. Dyer Asst. Secretary and
36-L Street Legal Counsel
Lake Latowana, MO 64086
Constance B. Martin Asst. Vice President
2305 W 95th Street
Leawood, KS 66206
Stephen S. Soden Chairman of the Board and
BMA Tower Director
One Penn Valley Park
Kansas City, MO 64141
Giorgio Balzer Director
BMA Tower
One Penn Valley Park
Kansas City, MO 64141
Robert T. Rakich Director
BMA Tower
One Penn Valley Park
Kansas City, MO 64141
Edward S. Ritter Director
BMA Tower
One Penn Valley Park
Kansas City, MO 64141
Robert N. Sawyer Director
BMA Tower
One Penn Valley Park
Kansas City, MO 64141
Vernon W. Voorhees Director
BMA Tower
One Penn Valley Park
Kansas City, MO 64141
</TABLE>
Item 30. Location of Accounts and Records
The physical possession of the accounts, books or documents of the Separate
Account which are required to be maintained by Section 31(a) of the Investment
Company Act of 1940, as amended, and the rules promulgated thereunder will be
maintained by the Company at 700 Karnes Boulevard, Kansas City Missouri 64108.
Item 31. Management Services
Not Applicable
Item 32. Undertakings
a. Registrant hereby 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 sixteen
(16) months old for so long as payment under the variable annuity contracts may
be accepted.
b. Registrant hereby 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. Registrant hereby 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. Business Men's Assurance Company of America ("Company") hereby
represents that the fees and charges deducted under the Contracts described in
the Prospectus, in the aggregate, are reasonable in relation to the services
rendered, the expenses to be incurred and the risks assumed by the Company.
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, as amended, the Registrant has caused this Registration Statement to be
signed on its behalf in the City of Kansas City and the State of Missouri, on
this 1st day of August, 1997.
BMA VARIABLE ANNUITY ACCOUNT A
(Registrant)
By: BUSINESS MEN'S ASSURANCE COMPANY
OF AMERICA
(Depositor)
By: /s/ MICHAEL K. DEARDORFF
--------------------------------
BUSINESS MEN'S ASSURANCE COMPANY
OF AMERICA
(Depositor)
By: /S/ DAVID A. GATES
---------------------------------
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
SIGNATURE AND TITLE
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ GIORGIO BALZER Director, Chairman of the Board 7/31/97
- --------------------- and Chief Executive Officer --------
Giorgio Balzer Date
- --------------------- Director ----------
Thomas Morton Bloch Date
/s/ GIANGUIDO CASTAGNO 8/1/97
- -------------------------- Director ----------
Gianguido Castagno Date
- --------------------------- Director ----------
William Thomas Grant II Date
/s/ DONALD JOYCE HALL, JR. 7/31/97
- --------------------------- Director ----------
Donald Joyce Hall, Jr. Date
/s/ ALLAN DRUE JENNINGS 7/31/97
- --------------------------- Director ----------
Allan Drue Jennings Date
/s/ DAVID WOODS KEMPER 7/31/97
- --------------------------- Director ----------
David Woods Kemper Date
/s/ GIORGIO LIVERIS 8/1/97
- --------------------------- Director ----------
Giorgio Liveris Date
- --------------------------- Director ----------
John Kessander Lundberg Date
- ---------------------------- Director ----------
John Pierre Mascotte Date
- --------------------------- Director ----------
Giovanni Perissinotto Date
/s/ ROBERT THOMAS RAKICH 7/31/97
- --------------------------- Director, President and Chief ----------
Robert Thomas Rakich Operating Officer Date
/s/ VERNON WIRT VOORHEES II 7/31/97
- --------------------------- Director, Senior Vice President - ----------
Vernon Wirt Voorhees II Corporate Services & Secretary Date
/s/ DAVID LEE HIGLEY 7/31/97
- -------------------------- Senior Vice President & Chief ----------
David Lee Higley Financial Officer Date
/s/ SUSAN ANNETTE SWEENEY 7/31/97
- -------------------------- Vice President - Treasurer & ----------
Susan Annette Sweeney Controller Date
</TABLE>
EXHIBITS
TO
FORM N-4
BMA VARIABLE ANNUITY ACCOUNT A
BUSINESS MEN'S ASSURANCE COMPANY OF AMERICA
INDEX TO EXHIBITS
Exhibit Page
99.B1 Resolution of Board of Directors of the Company
99.B4 Individual Variable Annuity Contract
BUSINESS MEN'S ASSURANCE COMPANY
OF AMERICA
RESOLUTION
AUTHORIZING
VARIABLE INSURANCE CONTRACTS
WHEREAS, the Company is desirous of developing and marketing certain types of
variable and fixed insurance contracts, including life insurance and annuities,
which may be required to be registered with the Securities and Exchange
Commission pursuant to the various securities laws; and
WHEREAS, it will be necessary to take certain actions including, but not limited
to, establishing separate accounts for segregation of assets and seeking
approval of regulatory authorities;
NOW THEREFORE, BE IT RESOLVED, that the Company is hereby authorized to develop
the necessary program in order to effectuate the issuance and sale of variable
and fixed insurance contracts, including life insurance and annuities; and
FURTHER RESOLVED, that the company is hereby authorized to establish one or more
separate accounts in accordance with the state insurance laws and to issue
variable and fixed annuity contracts and variable and fixed life insurance
policies with the reserves for such contracts and policies being segregated in
such separate accounts or in the general accounts of the company in the manner
specified in said accounts; and
FURTHER RESOLVED, that the President or such other Officer of the Company as
shall be designated by the President is hereby authorized to designate such
separate accounts as may be deemed necessary or convenient and to register such
separate accounts and those variable and fixed annuity contracts and life
insurance policies authorized hereby under such federal securities laws as are
deemed appropriate; and
FURTHER RESOLVED, that the President or such other Officer of the Company as
shall be designated by the President is hereby authorized to invest such sums in
any separate account established hereby as may be deemed necessary or
appropriate to comply with requirements of applicable law; and
FURTHER RESOLVED, that the Investment Committee of the Board of Directors shall
supervise the investment policy of the separate account assets and that the
President or such other Officers of the Company as may be appropriate, are
hereby authorized to recommend investment policies that, upon approval by the
Investment Committee of the Board of Directors, shall be utilized in the
investment of the separate account assets; and
FURTHER RESOLVED, that the President or such other Officer of the Company as
shall be designated by the President is hereby authorized:
1. to file the variable and fixed insurance contracts participating in any
such separate accounts with the appropriate state insurance departments and
to prepare and execute all necessary documents to obtain approval of the
insurance departments;
2. to prepare or have prepared and execute all necessary documents to obtain
approval of, or clearance with, or other appropriate actions required, of
any other regulatory authority that may be necessary; and
FURTHER RESOLVED, that for the purposes of facilitating the execution and filing
of any registration statement and of remedying any deficiencies therein by
appropriate amendments (including post-effective amendments) or supplements
thereto, the President and the Secretary of the Company, and each of them, are
hereby designated as attorneys and agents of the Company; and the appropriate
officers of the Company be, and they hereby are, authorized and directed to
grant the power of attorney of the Company to the President and the Secretary of
the Company by executing and delivering to such individuals, on behalf of the
Company, a power of attorney; and
FURTHER RESOLVED, that in connection with the offering and sale of fixed and
variable insurance contracts in the various States of the United States, as and
to the extent necessary, the appropriate officers of the Company be, and they
hereby are, authorized to take any and all such action, including but not
limited to the preparation, execution and filing with proper State authorities,
on behalf of and in the name of the Company, of such applications, notices,
certificates, affidavits, powers of attorney, consents to service of process,
issuer's covenants, certified copies of minutes of shareholders' and directors'
meetings, bonds, escrow and impounding agreements and other writings and
instruments, as may be required in order to render permissible the offering and
sale of fixed and variable insurance contracts in such jurisdictions; and
FURTHER RESOLVED, that the forms of any resolutions required by any State
authority to be filed in connection with any of the documents or instruments
referred to in any of the preceding resolutions be, and the same hereby are,
adopted as if fully set forth herein if (1) in the opinion of the appropriate
officers of the Company, the adoption of such resolution is advisable and (2)
the Secretary or any Assistant Secretary of the Company evidences such adoption
by inserting into these minutes copies of such resolution; and
FURTHER RESOLVED, that the officers of the Company, and each of them, are hereby
authorized to prepare and to execute the necessary documents and to take such
further actions as may be deemed necessary or appropriate, in their discretion,
to implement the purpose of these resolutions.
- --------------------------------------------------------------------------------
BMA INDIVIDUAL FLEXIBLE PAYMENT
A member of the Generali Group DEFERRED VARIABLE ANNUITY
NON-PARTICIPATING
- --------------------------------------------------------------------------------
BUSINESS MEN'S ASSURANCE COMPANY OF AMERICA
BMA TOWER, P.O. BOX 419458
KANSAS CITY, MO 64141
CALL (816) 753-8000 FOR ASSISTANCE OR QUESTIONS.
BUSINESS MEN'S ASSURANCE COMPANY OF AMERICA (referred to in this Contract as us,
we) will make Annuity Payments as set forth in this Contract beginning on the
Annuity Date.
This Contract is issued in consideration of the payment of the initial Purchase
Payment.
FREE LOOK
This Contract may be returned within [10] days after you receive it. It can be
mailed or delivered to either us or the agent who sold it. Return of this
Contract by mail is effective on being postmarked, properly addressed and
postage prepaid. The returned Contract will be treated as if we had never issued
it. We will promptly refund your Contract Value in states where permitted which
may be less than your Purchase Payment. In some states, we may be required to
refund the Purchase Payment. In those states, we will allocate the initial
Purchase Payments to the Money Market Subaccount for [15] days from the Issue
Date. Upon the expiration of the [15] days, the Contract Value in the Money
Market Subaccount will be allocated as you have directed. If we allocate your
Purchase Payment to the Money Market Subaccount, we will refund the greater of
your Purchase Payments, less any withdrawals and related charges, or your
Contract Value.
Executed by us on the Issue Date.
Secretary President
THIS IS A LEGAL CONTRACT, PLEASE READ IT CAREFULLY
ANNUITY PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE
INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT
GUARANTEED AS TO DOLLAR AMOUNT.
- --------------------------------------------------------------------------------
THE VARIABLE PROVISIONS OF THIS CONTRACT ARE ON PAGES __, __.
INDEX
PAGE
CONTRACT SCHEDULE
DEFINITIONS
PURCHASE PAYMENTS PROVISION
PURCHASE PAYMENTS
CHANGE IN PURCHASE PAYMENTS
ALLOCATION OF PURCHASE PAYMENTS
CONTRACT VALUE PROVISION
SEPARATE ACCOUNT PROVISION
THE SEPARATE ACCOUNT
VALUATION OF ASSETS
ACCUMULATION UNITS
ACCUMULATION UNIT VALUE
NET INVESTMENT FACTOR
COVERAGE CHARGE
CONTRACT MAINTENANCE CHARGE PROVISION
TRANSFER PROVISION
WITHDRAWAL PROVISION
WITHDRAWALS
WITHDRAWAL CHARGE
DEATH BENEFIT PROVISION
DEATH OF OWNER DURING THE ACCUMULATION PERIOD
DEATH BENEFIT OPTIONS DURING THE ACCUMULATION PERIOD
DEATH OF OWNER DURING THE ANNUITY PERIOD
DEATH OF ANNUITANT
PAYMENT OF DEATH BENEFIT
ANNUITY PROVISION
GENERAL
ANNUITY DATE
SELECTION OF AN ANNUITY OPTION
ANNUITY OPTIONS
OPTION 1 - LIFE ANNUITY
OPTION 2 - LIFE ANNUITY WITH 120 OR 240 MONTHLY ANNUITY PAYMENTS
GUARANTEED
OPTION 3 - JOINT AND LAST SURVIVOR ANNUITY
OPTION 4 - JOINT AND LAST SURVIVOR ANNUITY WITH 120 OR 240 MONTHLY
ANNUITY PAYMENTS GUARANTEED
ANNUITY
FIXED ANNUITY
VARIABLE ANNUITY
ANNUITANT, OWNERSHIP, ASSIGNMENT PROVISION
OWNER
JOINT OWNER
ANNUITANT
ASSIGNMENT OF A CONTRACT
BENEFICIARY
BENEFICIARY
CHANGE OF BENEFICIARY
SUSPENSION OF DEFERRAL OF PAYMENTS OR TRANSFERS
FROM THE SEPARATE ACCOUNT
GENERAL PROVISIONS
THE CONTRACT
NON-PARTICIPATING IN SURPLUS
INCONTESTABILITY
MISSTATEMENT OF AGE OR SEX
CONTRACT SETTLEMENT
REPORTS
TAXES
EVIDENCE OF SURVIVAL
PROTECTION OF PROCEEDS
MODIFICATION OF CONTRACT
RESERVES, VALUES AND BENEFITS
CONTRACT SCHEDULE
OWNER: [John Doe] AGE AT ISSUE: [52]
JOINT OWNER: [Mary Doe] AGE AT ISSUE: [50]
ANNUITANT: [John Doe] AGE AT ISSUE: [52]
CONTRACT NUMBER: [12345] ISSUE DATE: [May 1, 1997]
PLAN TYPE: [Non-qualified] ANNUITY DATE: [2015]
PURCHASE PAYMENTS:
Initial Purchase Payment: [$10,000 Non-Qualified; $2,000 IRA]
Minimum Subsequent Purchase Payment: [$1,000]
Maximum Total Purchase Payments: [$1 million, without our prior
approval]
BENEFICIARY:
As designated by Owner at Issue Date unless changed in accordance with
the Contract provisions.
CONTRACT MAINTENANCE CHARGE:
The Contract Maintenance Charge is currently [$35.00] each Contract
Year. [We reserve the right to increase the Contract Maintenance
Charge, but it will not exceed $60 per Contract Year.] The Contract
Maintenance Charge will be deducted from the Contract Value on each
Contract Anniversary while this Contract is in force. However, during
the Accumulation Period, if your Contract Value on a Contract
Anniversary is at least [$100,000], then no Contract Maintenance Charge
is deducted. If a total withdrawal is made on other than a Contract
Anniversary and your Contract Value for the Business Day during which
the total withdrawal is made is less than [$100,000], the full Contract
Maintenance Charge will be deducted at the time of the total
withdrawal. The Contract Maintenance Charge will be deducted from the
Subaccounts and any Fixed Account Option selected in the same
proportion that the amount of the Contract Value in each Subaccount
and/or Fixed Account bears to the total Contract Value. During the
Annuity Period, the Contract Maintenance Charge will be collected pro
rata from each Annuity Payment. [In the event you own more than one
Contract, we will determine the total Contract Value for all of the
Contracts. If the total Contract Value exceeds [$100,000], we will not
assess the Contract Maintenance Charge.] If the Contract Owner is not a
natural person, we will look to the Annuitant in determining the
foregoing.
COVERAGE CHARGE:
Equal on an annual basis to [1.4%] of the average daily net asset
value of the Separate Account. [We may increase this charge, but it
may not be greater than [1.75%].]
INVESTMENT OPTIONS:
[INVESTORS MARK SERIES FUND, INC.]
[Intermediate Fixed Income Portfolio
Global Fixed Income Portfolio
Balanced Portfolio
Small Cap Equity Portfolio
Mid Cap Equity Portfolio
Large Cap Value Portfolio
Large Cap Growth Portfolio
Growth & Income Portfolio
International Equity Portfolio
Money Market Portfolio]
[THE BERGER INSTITUTIONAL PRODUCTS TRUST]
[Berger/BIAM IPT - International Fund]
SEPARATE ACCOUNT: [BMA Variable Annuity Account A]
ALLOCATION GUIDELINES:
[1. Currently, you can select as many Subaccounts as you wish.
However, we reserve the right to limit this in the future.
2. Currently, you can also select Fixed Account I or any Guarantee
Period option within Fixed Account II which is available at the time
the Purchase Payment or transfer is made.
3. Any allocation to Fixed Account I or to any Guarantee Period option
of Fixed Account II which is selected must be at least $5,000 and any
allocation to a Subaccount must be at least $1,000.
4. If the Purchase Payment and forms required to issue a Contract are
in good order, the initial Purchase Payment will be credited to your
Contract within two (2) business days after receipt at the BMA Service
Center. Additional Purchase Payments, which are in good order, will be
credited to your Contract as of the Business Day they are received.
5. Allocation percentages must be in whole numbers. Each allocation
must be at least [10%]. Allocations made pursuant to a pre-scheduled
transfer are not subject to these limitations.]
TRANSFERS:
NUMBER OF TRANSFERS PERMITTED: [During the Accumulation Period: Subject
to any transfer fees and any minimum and maximum amounts that may be
transferred, there is no limitation on the number of transfers that can
currently be made between Subaccounts. Currently, you can make
unlimited transfers to any Fixed Account Option, subject to any
transfer fees and any required minimum and maximum amounts that may be
transferred. You can make a transfer from any Guarantee Period of Fixed
Account II, without any limitation or transfer fee, at the end of the
Guarantee Period. We reserve the right to modify the above, but the
Owner will always be allowed at least [12] transfers between
Subaccounts in a Contract Year during the Accumulation Period.
During the Annuity Period: Currently, during a Contract Year you can
make [4] transfers between Subaccounts of the Separate Account, subject
to any minimum and maximum amounts that may be transferred. Currently
you can make [4] transfers each Contract Year from one or more
Subaccounts to the General Account, subject to any minimum and maximum
amounts that may be transferred. You may not make a transfer from the
General Account to the Separate Account.]
NUMBER OF FREE TRANSFERS: [Currently, you are allowed [12] free
transfers each Contract Year during the Accumulation Period and [4]
free transfers each Contract Year during the Annuity Period.]
TRANSFER FEE: [For each transfer in excess of the free transfers
permitted, the Transfer Fee is [$25]. Transfers made pursuant to a
pre- scheduled transfer will not be counted in determining the
application of the transfer fee.]
MINIMUM AND MAXIMUM AMOUNT TO BE TRANSFERRED: [The minimum amount which
can be transferred is $250 or your entire interest in any Subaccount,
Fixed Account I or any Guarantee Period of Fixed Account II, if less.
At the Company's discretion, the maximum amount which can be
transferred from any Fixed Account Option, unless the transfer is from
a Guarantee Period just expiring, may be limited to 25% of the amount
in Fixed Account I or any Guarantee Period of Fixed Account II. This
requirement is waived if the transfer is pursuant to a pre-scheduled
transfer or applied to an Annuity Option.]
MINIMUM AMOUNT WHICH MUST REMAIN IN AN ACCOUNT AFTER A TRANSFER:
[$1,000 in any Subaccount or $5,000 in Fixed Account I or any
Guarantee Period of Fixed Account II.]
PRE-SCHEDULED TRANSFERS: [You can elect the Dollar Cost Averaging
Option, the Asset Allocation Option and the Asset Rebalancing Option.
However, that portion of Contract Value held in any Fixed Account
options is not included in any pre-scheduled transfer option except
you can elect to have Fixed Account I as the source fund for Dollar
Cost Averaging. We reserve the right to limit the availability of any
Account for a Pre-Scheduled Transfer.]
WITHDRAWALS:
WITHDRAWAL CHARGE: [A Withdrawal Charge is assessed against each
Purchase Payment withdrawn and will result in a reduction in remaining
Contract Value. The Withdrawal Charge is calculated at the time of each
withdrawal. Each Purchase Payment is tracked from its date of receipt
and the Withdrawal Charges are determined in accordance with the
following:
<TABLE>
<CAPTION>
Number of Complete Years
from Date of Purchase Payment Withdrawal Charge
----------------------------- -----------------
<S> <C>
0 7%
1 6%
2 5%
3 4%
4 3%
5 2%
6 1%
7 and thereafter 0%
</TABLE>
WAIVER OF WITHDRAWAL CHARGE: [The first 10% of a withdrawal may be
made free from the Withdrawal Charge (unless you have already made
another withdrawal during that same Contract Year) on a non-cumulative
basis as follows:
1. Once each Contract Year after the first Contract Year, as a
single sum payment if the Contract Value prior to the withdrawal
exceeds [$10,000]; or
2. At any time, subject to any conditions and fees we may impose,
as equal periodic installments.]
MINIMUM PARTIAL WITHDRAWAL AMOUNT: [$1,000. Withdrawals made pursuant
to the Automatic Withdrawal Option or the Minimum Distribution Option
are not subject to this minimum.]
MINIMUM CONTRACT VALUE WHICH MUST REMAIN IN AN ACCOUNT AFTER A PARTIAL
WITHDRAWAL: [$1,000 in any Subaccount or $5,000 in Fixed Account I or
any Guarantee Period of Fixed Account II.]
MINIMUM CONTRACT VALUE WHICH MUST REMAIN IN THE CONTRACT AFTER A
PARTIAL WITHDRAWAL: [$10,000]
[FIXED ACCOUNT OPTIONS:
FIXED ACCOUNT I:
MINIMUM GUARANTEE INTEREST RATE: [3%]
CURRENT INTEREST RATE AS OF ISSUE DATE [ X%, guaranteed for
any Purchase Payments allocated or transferred to Fixed
Account I during the calendar month in which this Contract is
issued. This rate is guaranteed for 12 months.]
FIXED ACCOUNT II:
MINIMUM GUARANTEE INTEREST RATE: [3%]
CURRENT FIXED ACCOUNT II GUARANTEE PERIODS : [2, 3, 4, 5, 6,
7, 8, 9, 10] CURRENT INTEREST RATES FOR SELECTIVE GUARANTEE
PERIOD(S): Each current interest rate applies only to Purchase
Payments allocated or transferred to Fixed Account II during
the calendar month in which this Contract is issued.
[2 Years - %
3 Years - %
4 Years - %
5 Years - %
6 Years - %
7 Years - %
8 Years - %
9 Years - %
10 Years- %]
INTEREST ADJUSTMENT FACTOR: If a total or partial withdrawal
or transfer is made from Fixed Account II other than at the
end of a Guarantee Period, an Interest Adjustment will be made
to the Contract Value. The Interest Adjustment Factor with
respect to each purchase payment or transfer allocated to
Fixed Account II is:
(.75 x (A-B) x N/12) where:
A = the guaranteed interest rate (expressed as a
decimal) in effect for the specific purchase payment
or transfer.
B = the guaranteed interest rate (expressed as a decimal)
available for new contracts of this type of contract
for the applicable guarantee period, as of the
withdrawal or transfer. If a guaranteed interest
rate is not available for the same type of
contract, a suitable replacement rate will be
determined by us.
N = the number of complete months from the date of the
withdrawal or transfer to the end of the applicable
Guarantee Period as shown on the Contract Schedule.
The amount of the Interest Adjustment with respect to each
Purchase Payment or transfer is equal to the Interest
Adjustment Factor multiplied by the amount of the withdrawal
or transfer.
If the Interest Adjustment is a negative value, the Interest
Adjustment is subtracted from the Contract Value. If the
Interest Adjustment is a positive value, the Interest
Adjustment is added to the Contract Value.
Within each guarantee period of Fixed Account II, withdrawals
and transfers will be determined on a first-in, first-out
(FIFO) basis.
ENDORSEMENTS:
[Individual Retirement Annuity Endorsement]
[Fixed Account I Endorsement]
[Fixed Account II Endorsement]
[Waiver of Withdrawal Charges & Interest Adjustment Rider]
BMA SERVICE CENTER:
[BMA
9735 Landmark Parkway Dr.
St. Louis, MO 63127-1690]
DEFINITIONS
ACCOUNT: Any Subaccount, any available Fixed Account Option or the General
Account.
ACCUMULATION PERIOD: The period prior to the Annuity Date during which you can
make Purchase Payments.
ACCUMULATION UNIT: A unit of measure used to calculate the Contract Value prior
to the Annuity Date.
ADJUSTED CONTRACT VALUE: The Contract Value less any applicable Premium Tax.
This amount is applied to the applicable Annuity Table to determine the initial
Annuity Payment.
AGE: Age last birthday, except when calculating age for the Annuity Date when
it is the actual age to the nearest month.
ANNUITANT: The natural person upon whose continuation of life any Annuity
Payment involving life contingencies depends. You may change the Annuitant at
any time prior to the Annuity Date unless the Contract Owner is not a natural
person. On or after the Annuity Date, any reference to Annuitant shall also
include any Joint Annuitant.
ANNUITY DATE: The date on which Annuity Payments are to begin.
ANNUITY OPTION: An arrangement under which Annuity Payments are made under this
Contract.
ANNUITY PAYMENTS: The series of payments made to you or any named payee after
the Annuity Date under the Annuity Option selected.
ANNUITY PERIOD: The period of time beginning on the Annuity Date during which
Annuity Payments are made.
ANNUITY RESERVE: The assets which support the Annuity Option you have selected
during the Annuity Period.
ANNUITY UNIT: A unit of measure used to calculate Annuity Payments after the
Annuity Date.
AUTHORIZED REQUEST: A request, in a form satisfactory to us, which is received
by the BMA Service Center.
BMA SERVICE CENTER: The office indicated on the Contract Schedule of the
Contract to which notices, requests and Purchase Payments must be sent. All sums
payable to us under the Contract are payable only at the BMA Service Center.
BENEFICIARY: The person(s) or entity(ies) who will receive any death benefit
payable under this Contract.
BUSINESS DAY: Each day that the New York Stock Exchange is open for trading. The
Separate Account will be valued each Business Day.
COMPANY: Business Men's Assurance Company of America (BMA).
CONTRACT ANNIVERSARY: A calendar year anniversary of the Issue Date of this
Contract.
CONTRACT WITHDRAWAL VALUE: The Contract Value less any applicable Premium Tax,
less any Withdrawal Charge and less any applicable Contract Maintenance Charge.
CONTRACT VALUE: The dollar value as of any Business Day of all amounts
accumulated under this Contract.
CONTRACT YEAR: Any period of twelve (12) months commencing with the Issue Date
and each Contract Anniversary thereafter.
INVESTMENT OPTION(S): Those investments available under the Contract. Current
Investment Option(s) are shown on the Contract Schedule.
GENERAL ACCOUNT: Our general investment account which contains all of our assets
with the exception of the Separate Account and other segregated asset accounts.
ISSUE DATE: The date shown on the Contract Schedule on which the first Contract
Year begins.
JOINT OWNER: If there is more than one Owner, each Owner shall be a Joint Owner
of the Contract. Joint Owners have equal ownership rights and, except for
telephone transfers, must both authorize any exercising of those ownership
rights unless otherwise allowed by us. Any Joint Owner must be the spouse of the
other Joint Owner.
OWNER: The person(s) or entity(ies) entitled to the ownership rights stated in
this Contract. If Joint Owners are named, all references to Owner shall mean the
Joint Owners.
PREMIUM TAX: Any premium taxes owed by us to any governmental entity and
assessed against Purchase Payments or Contract Value.
PURCHASE PAYMENT: A payment you make toward this Contract.
SEPARATE ACCOUNT: A segregated asset account maintained by us in which a portion
of our assets has been allocated for this and certain other contracts. It has
been designated on the Contract Schedule.
SUBACCOUNT: Separate Account assets are divided into Subaccounts. Assets of
each Subaccount will be invested in shares of an Investment Option.
PURCHASE PAYMENTS PROVISION
PURCHASE PAYMENTS: Purchase Payments are payable according to the frequency and
in the amount selected by you. The initial Purchase Payment is due on the Issue
Date. We reserve the right to decline any Purchase Payment. The Minimum
Subsequent Purchase Payment allowed and the Maximum Total Purchase Payments
accepted without our prior permission are shown on the Contract Schedule.
CHANGE IN PURCHASE PAYMENTS: You may elect to increase or decrease or to change
the frequency of Purchase Payments. Unless surrendered, this Contract remains in
force until the Annuity Date and will not be in default if no additional
Purchase Payments are made.
ALLOCATION OF PURCHASE PAYMENTS: Purchase Payments are allocated to one or more
of the Subaccounts of the Separate Account or the available Fixed Account
Options in accordance with your selection. The allocation of the initial
Purchase Payment is made in accordance with your selection made at the Issue
Date. Unless you inform us otherwise, subsequent Purchase Payments are allocated
in the same manner as the Initial Purchase Payment. However, the Company has
reserved the right to allocate the initial Purchase Payment to the Money Market
Subaccount as set forth on the face page of this Contract. All allocations of
Purchase Payments are subject to the Allocation Guidelines shown on the Contract
Schedule.
CONTRACT VALUE PROVISION
The Contract Value for any Business Day is equal to the total dollar value
accumulated under this Contract.
The Contract Value in a Subaccount of the Separate Account is determined by
multiplying the number of Accumulation Units allocated to the Contract Value for
the Subaccount by the Accumulation Unit Value for that Subaccount.
Purchase Payments, withdrawals and transfers from or to a Subaccount will result
in the addition of or the cancellation of Accumulation Units in a Subaccount.
SEPARATE ACCOUNT PROVISION
THE SEPARATE ACCOUNT: The Separate Account is designated on the Contract
Schedule. It consists of assets we have set aside and have kept separate from
the rest of our assets and those of our other separate accounts. The assets of
the Separate Account, equal to reserves and other liabilities of your Contract
and those of other Owners, will not be charged with liabilities arising out of
any other business we may conduct.
The Separate Account assets are divided into Subaccounts. The assets of the
Subaccounts are allocated to the Investment Option(s) shown on the Contract
Schedule. We may add additional Investment Option(s) to those shown. You may be
permitted to transfer your Contract Value or allocate Purchase Payments to the
additional Subaccount(s). However, the right to make such transfers or
allocations will be limited by any terms and conditions we may impose.
Should the shares of any Investment Option(s) become unavailable for investment
by the Separate Account, or our Board of Directors deems further investment in
the shares inappropriate, we may limit further purchase of such shares or
substitute shares of another Investment Option for shares already purchased.
VALUATION OF ASSETS: Assets of Investment Options held within the Subaccounts
will be valued at their net asset value on each Business Day.
ACCUMULATION UNITS: Accumulation Units shall be used to account for all amounts
allocated to or withdrawn from the Subaccounts of the Separate Account as a
result of Purchase Payments, withdrawals, transfers, or fees and charges. We
will determine the number of Accumulation Units of a Subaccount purchased or
canceled. This will be done by dividing the amount allocated to (or the amount
withdrawn from) the Subaccount by the dollar value of one Accumulation Unit of
the Subaccount as of the end of the Business Day during which the request for
the transaction is received at the BMA Service Center.
ACCUMULATION UNIT VALUE: The Accumulation Unit Value for each Subaccount was
arbitrarily set initially at $10. Subsequent Accumulation Unit Values for each
Subaccount are determined by multiplying the Accumulation Unit Value for the
immediately preceding Business Day by the Net Investment Factor for the
Subaccount for the current Business Day.
The Accumulation Unit Value may increase or decrease from Business Day to
Business Day.
NET INVESTMENT FACTOR: The Net Investment Factor for each Subaccount is
determined by dividing A by B and multiplying by (1 - C) where:
A is (i) the net asset value per share of the Investment Option
held by the Subaccount at the end of the current Business Day;
plus
(ii) any dividend or capital gains per share declared on
behalf of such Investment Option that has an ex-dividend date
within the current Business Day.
B is the net asset value per share of the Investment Option held
by the Subaccount for the immediately preceding Business Day.
C is (i) the Business Day equivalent of the Coverage Charge, which
is shown on the Contract Schedule; plus
(ii) a charge factor, if any, for any taxes or any tax reserve
we have established as a result of the operation or
maintenance of the Subaccount.
COVERAGE CHARGE: Each Business Day, we deduct a Coverage Charge from the
Subaccounts of the Separate Account which is equal, on an annual basis, to the
amount shown on the Contract Schedule.
CONTRACT MAINTENANCE CHARGE PROVISION
We deduct an annual Contract Maintenance Charge shown on the Contract Schedule.
TRANSFER PROVISION
A transfer is subject to the following:
1. the maximum number of transfers and the number of transfers which
may be made which are not subject to a Transfer Fee are shown on the
Contract Schedule;
2. a Transfer Fee is deducted if a transfer exceeds the maximum number
of free transfers. The Transfer Fee is shown on the Contract Schedule.
The Transfer Fee is deducted from the amount which is transferred.
3. you may not make a transfer until after the end of the Free Look
period.
4. the minimum and maximum amounts which may be transferred are shown
on the Contract Schedule.
5. a transfer will be effected as of the end of the Business Day when
we receive an acceptable transfer request containing all required
information.
6. neither us nor our BMA Service Center are liable for a transfer
made in accordance with your instructions.
7. we reserve the right to restrict the number of transfers per year
and to restrict transfers from being made on consecutive Business
Days.
8. your right to make transfers is subject to modification if we
determine, in our sole opinion, that the exercise of the right by one
or more Owners is, or would be, to the disadvantage of other Owners.
Restrictions may be applied in any manner reasonably designed to
prevent any use of the transfer right which is considered by us to be
the disadvantage of other Owners. A modification could be applied to
transfers to or from one or more of the Subaccounts and could include,
but not be limited to:
a. the requirement of a minimum time period between each
transfer;
b. not accepting transfer requests of an agent acting under a
power of attorney on behalf of more than one Owner; or
c. limiting the dollar amount that may be transferred by an Owner
at any one time.
9. In addition to the above, transfers made during the Annuity Period
are subject to the following:
the amount transferred to the General Account from a
Subaccount of the Separate Account will be equal to the
Annuity Reserve which was transferred from the payee's
interest in that Subaccount. The Annuity Reserve is the
product of "(a)" multiplied by "(b)" multiplied by "(c)",
where (a) is the number of Annuity Units representing the
Owner's interest in the Subaccount per Annuity Payment; (b) is
the Annuity Unit Value for the Subaccount; and (c) is the
present value of $1.00 per payment period based on the Age of
the Annuitant at time of transfer for the Annuity Option,
determined using the 1983 Individual Annuity Mortality Tables,
with mortality projected to the year 2000 and with an annual
effective interest rate of 3 1/2%. Amounts transferred to the
General Account will be applied under the Annuity Option
elected at the Age of the Annuitant at the time of the
transfer. All amounts and Annuity Unit Values will be
determined as of the end of the Business Day preceding the
effective date of the transfer.
If you elect to use your transfer privilege, neither us nor our BMA Service
Center will be liable for transfers made in accordance with your instructions.
If there are Joint Owners, we will accept telephone transfer instructions from
either Owner.
WITHDRAWAL PROVISION
WITHDRAWALS: During the Accumulation Period, you may, upon Authorized Request,
make a total or partial withdrawal of the Contract Withdrawal Value. Withdrawals
will result in the cancellation of Accumulation Units from each Subaccount in
the ratio that the value of each Subaccount bears to the total Contract Value.
You must specify, by Authorized Request, which Accumulation Units are to be
canceled if other than the above mentioned method of cancellation is desired. We
will pay the amount of any withdrawal within seven (7) days of receipt, in good
order, of a request unless the "Suspension or Deferral of Payment or Transfers
from the Separate Account Provision" is in effect.
Each partial withdrawal must be for an amount which is not less than the amount
shown on the Contract Schedule. The minimum Contract Value which must remain in
an Account and in the Contract after a partial withdrawal is shown on the
Contract Schedule.
WITHDRAWAL CHARGE: Upon a total or partial withdrawal of Contract Value a
Withdrawal Charge as set forth on the Contract Schedule may be assessed. Under
certain circumstances, we allow withdrawals without the Withdrawal Charge.
DEATH BENEFIT PROVISION
DEATH OF OWNER DURING THE ACCUMULATION PERIOD: Upon the death of the Owner
during the Accumulation Period, the death benefit will be paid to the
Beneficiary(ies) designated by the Owner. Upon the death of a Joint Owner during
the Accumulation Period, the surviving Joint Owner will become the primary
Beneficiary to whom the death benefit will be paid. Any other Beneficiary
designation on record at the time of such death will be treated as a contingent
Beneficiary.
DEATH BENEFIT AMOUNT DURING THE ACCUMULATION PERIOD: The death benefit will be
the greater of (a) the Purchase Payment, less any withdrawals and related
Withdrawal Charges; or (b) the Contract Value determined as of the end of the
Business Day during which we receive both due proof of death and an election for
the payment method.
DEATH BENEFIT OPTIONS DURING THE ACCUMULATION PERIOD: A Beneficiary must request
that the death benefit be paid under one of the Death Benefit Options below. In
addition, if the Beneficiary is the spouse of the Owner, he or she may elect to
continue the Contract in his or her own name and exercise all the Owner's rights
under the Contract.
Option 1 - lump sum payment of the death benefit; or
Option 2 - the payment of the entire death benefit within 5 years of
the date of the death of the Owner or any Joint Owner; or
Option 3 - payment of the death benefit under an Annuity Option over
the lifetime of the Beneficiary or over a period not extending beyond
the life expectancy of the Beneficiary with distribution beginning
within one year of the date of death of the Owner or any Joint Owner.
Any portion of the death benefit not applied under Option 3 within one year of
the date of the Owners' death, must be distributed within five years of the date
of death.
If a lump sum payment is requested, the amount will be paid within seven (7)
days of receipt of proof of death and the election, unless the "Suspension or
Deferral of Payment or Transfers from the Separate Account Provision" is in
effect.
Payment to the Beneficiary, other than in a single sum, may only be elected
during the sixty-day period beginning with the date of receipt of proof of
death.
DEATH OF OWNER DURING THE ANNUITY PERIOD: If you, or any Joint Owner, dies
during the Annuity Period and you are not an Annuitant, any remaining payments
under the Annuity Option elected will continue at least as rapidly as under the
method of distribution in effect at such Owner's death. Upon your death during
the Annuity Period, the Beneficiary becomes the Owner.
DEATH OF ANNUITANT: Upon the death of an Annuitant, who is not the Owner, during
the Accumulation Period, you may designate a new Annuitant, subject to our
underwriting rules then in effect. If no designation is made within 30 days of
the death of the Annuitant, you will become the Annuitant. If the Owner is a
non-natural person, the death of the Annuitant will be treated as the death of
the Owner and a new Annuitant may not be designated.
Upon the death of the Annuitant during the Annuity Period, the death benefit, if
any, will be as specified in the Annuity Option elected. Death benefits will be
paid at least as rapidly as under the method of distribution in effect at the
Annuitant's death.
PAYMENT OF DEATH BENEFIT: We will require due proof of death before any death
benefit is paid. Due proof of death will be:
1. a certified death certificate; or
2. a certified decree of a court of competent jurisdiction as to the
finding of death; or
3. any other proof satisfactory to us.
All death benefits will be paid in accordance with applicable law or regulations
governing death benefit payments.
ANNUITY PROVISION
GENERAL: On the Annuity Date, the Adjusted Contract Value will be applied under
the Annuity Option you have selected. You may elect to have the Adjusted
Contract Value applied to provide a Fixed Annuity, a Variable Annuity or a
combination Fixed and Variable Annuity. If a combination is elected, you must
specify what part of the Adjusted Contract Value is to be applied to the Fixed
and Variable Options.
ANNUITY DATE: You select an Annuity Date at the time of issue. The earliest
Annuity Date you can select is one year after the Issue Date. The latest Annuity
Date you can select is the later of the first day of the first calender month
following the Annuitant's 95th birthday or 10 years from the Issue Date, or the
maximum date permitted under state law. You may, at any time prior to the
Annuity Date, change the Annuity Date by Authorized Request 30 days in advance.
SELECTION OF AN ANNUITY OPTION: You can select an Annuity Option by Authorized
Request. If no Annuity Option is selected, Option 2, with 120 Monthly Payments
Guaranteed, will automatically be applied. You may, at any time prior to the
Annuity Date, by an Authorized Request made 30 days in advance, select and/or
change the Annuity Option.
ANNUITY OPTIONS: This Contract provides for Annuity Payments under one of the
Annuity Options described below. Any other Annuity Option acceptable to us may
be selected.
OPTION 1 - LIFE ANNUITY. We will make monthly Annuity Payments during the life
of the Annuitant and ceasing with the last Annuity Payment due prior to the
Annuitant's death.
OPTION 2 - LIFE ANNUITY WITH 120 OR 240 MONTHLY ANNUITY PAYMENTS GUARANTEED. We
will make monthly Annuity Payments during the life of the Annuitant with a
guarantee that if at the Annuitant's death there have been less than 120 or 240
monthly Annuity Payments made as selected, monthly Annuity Payments will
continue for the remainder of the guaranteed period. You may elect to have the
present value of the guaranteed monthly Annuity Payments remaining, as of the
date notice of the Annuitant's death is received at the BMA Service Center,
commuted at the Assumed Investment Return selected for a Variable Annuity or for
a Fixed Annuity the Statutory Calendar Year Interest Rate based on the NAIC
Standard Valuation Law for Single Premium Immediate Annuities corresponding to
the Annuity Date. We will require the return of this Contract and proof of death
prior to the payment of any commuted values.
OPTION 3 - JOINT AND LAST SURVIVOR ANNUITY. We will make monthly Annuity
Payments during the joint lifetime of the Annuitant and the Joint Annuitant.
Upon the death of the Annuitant, if the Joint Annuitant is then living, Annuity
Payments will continue to be paid during the remaining lifetime of the Joint
Annuitant at a level of 100%, 75% or 50% of the previous level, as selected.
Monthly Annuity Payments cease with the final Annuity Payment due prior to the
last survivor's death.
OPTION 4 - JOINT AND LAST SURVIVOR ANNUITY WITH 120 OR 240 MONTHLY ANNUITY
PAYMENTS GUARANTEED. We will make monthly Annuity Payments during the joint
lifetime of the Annuitant and the Joint Annuitant. Monthly Annuity Payments will
continue to be paid during the remaining lifetime of the Joint Annuitant at 100%
of the previous level, as selected. If at the last death of the Annuitant and
the Joint Annuitant, there have been less than 120 or 240 monthly Annuity
Payments made as selected, monthly Annuity Payments will continue to be made for
the remainder of the guaranteed period. You may elect to have the present value
of the guaranteed monthly Annuity Payments remaining, as of the date notice of
the last Annuitant's death is received by us, commuted at the Assumed Investment
Return selected for a Variable Annuity or for a Fixed Annuity the Statutory
Calendar Year Interest Rate based on the NAIC Standard Valuation Law for Single
Premium Immediate Annuities corresponding to the Annuity Date. We will require
the return of this Contract and proof of death prior to the payment of any
commuted values.
ANNUITY: If you select a Fixed Annuity, the Adjusted Contract Value is allocated
to the General Account and the Annuity is paid as a Fixed Annuity. If you select
a Variable Annuity, the Adjusted Contract Value will be allocated to the
Subaccounts of the Separate Account in accordance with your selection, and the
Annuity will be paid as a Variable Annuity. You may also select a combination of
a Fixed Annuity and a Variable Annuity in which case your Annuity Payment would
be the sum of the Fixed Annuity and the Variable Annuity. Unless you designate
another payee, you will be the payee of the Annuity Payments. If when Annuity
Payments begin we are using tables of annuity rates for these Contracts which
result in larger Annuity Payments, we will use those tables instead. Where
permitted, Annuity Payments will depend on the Age and sex of the Annuitant.
The first annuity payment will be due one month (or one modal period if other
than a monthly Annuity Payment frequency is elected) following the later of the
Annuity Date or the date of receipt of all required forms.
BMA may elect to determine the amount of each Annuity Payment up to 10 business
days prior to the elected payment date.
FIXED ANNUITY: You may elect to have the Adjusted Contact Value applied to
provide a Fixed Annuity. The dollar amount of each Fixed Annuity Payment shall
be determined in accordance with Annuity Tables contained in this Contract which
are based on the 1983 Individual Annuity Mortality Table with mortality
projected to the year 2000 by projection scale G and with an annual effective
interest rate of 3 1/2%.
VARIABLE ANNUITY: You may elect to have the Adjusted Contract Value applied to
provide a Variable Annuity. Variable Annuity Payments reflect the investment
performance of the Separate Account in accordance with the allocation of the
Adjusted Contract Value to the Subaccounts during the Annuity Period. Variable
Annuity Payments are not guaranteed as to dollar amount.
On the Annuity Date a fixed number of Annuity Units will be purchased as
follows:
For each Subaccount the fixed number of Annuity Units is equal to the Adjusted
Contract Value for all Subaccounts, divided first by $1000, then multiplied by
the appropriate Annuity Payment amount from the Annuity Table contained in this
Contract for each $1000 of value for the Annuity Option selected, and then
divided by the Annuity Unit value for that Subaccount on the Annuity Date.
Thereafter, the number of Annuity Units in each Subaccount remains unchanged
unless you elect to transfer between Subaccounts. All calculations will
appropriately reflect the Annuity Payment frequency selected.
On each Annuity Payment date, the total Variable Annuity Payment is the sum of
the Annuity Payments for each Subaccount. The Variable Annuity Payment in each
Subaccount is determined by multiplying the number of Annuity Units then
allocated to such Subaccount by the Annuity Unit value for that Subaccount.
On each subsequent Business Day, the value of an Annuity Unit is determined in
the following way:
First: The Net Investment Factor is determined as described under "Separate
Account Provision - Net Investment Factor" above.
Second: The value of an Annuity Unit for a Business Day is equal to:
a. the value of the Annuity Unit for the immediately preceding Business
Day;
b. multiplied by the Net Investment Factor for the current Business Day;
c. divided by the Assumed Net Investment Factor (see below) for the
Business Day.
The Assumed Net Investment Factor is equal to one plus the Assumed Investment
Return which is used in determining the basis for the purchase of an Annuity,
adjusted to reflect the particular Business Day. The Assumed Investment Return
that we will use is [3 1/2%]. However, we may agree with you to use a different
value.
MORTALITY AND EXPENSE GUARANTEE: We guarantee that the dollar amount of each
Annuity Payment after the first will not be affected by variations in mortality
or expense experience.
ANNUITANT, OWNERSHIP, ASSIGNMENT PROVISION
OWNER: As the Owner you have all the interest and rights under this Contract.
The Owner is the person designated as such on the Issue Date, unless changed.
Any change of Owner is subject to our underwriting rules then in effect.
You may change Owners of the Contract at any time by Authorized Request. A
change of Owner will automatically revoke any prior designation of Owner. The
change will become effective as of the date the Authorized Request is signed. We
will not be liable for any payment made or action taken before we record the
change.
JOINT OWNER: A Contract may be owned by Joint Owners. If Joint Owners are named,
any Joint Owner must be the spouse of the other Owner. Upon the death of either
Owner, the surviving spouse will be the Primary Beneficiary. Any other
Beneficiary designation will be treated as a Contingent Beneficiary unless
otherwise indicated in an Authorized Request.
ANNUITANT: The Annuitant is the person on whose life Annuity Payments are based.
The Annuitant is the person designated by you at the Issue Date, unless changed
prior to the Annuity Date. The Annuitant may not be changed in a Contract which
is owned by a non-natural person. Any change of Annuitant is subject to our
underwriting rules then in effect.
ASSIGNMENT OF A CONTRACT: An Authorized Request specifying the terms of an
assignment of a Contract must be provided to the BMA Service Center. We will not
be liable for any payment made or action taken before we record the assignment.
We will not be responsible for the validity or tax consequences of any
assignment. Any assignment made after the death benefit has become payable will
be valid only with our consent.
If the Contract is assigned, your rights may only be exercised with the consent
of the assignee of record.
BENEFICIARY
BENEFICIARY: The Beneficiary designation in effect on the Issue Date will remain
in effect until changed. The Beneficiary is entitled to receive the benefits to
be paid at your death.
Unless you provide otherwise, the death benefit will be paid in equal shares to
the survivor(s) as follows:
1. to the primary Beneficiary(ies) who survive you and/or the
Annuitant's death, as applicable; or if there are none
2. to the contingent Beneficiary(ies) who survive you and/or the
Annuitant's death, as applicable; or if there are none
3. to your estate.
CHANGE OF BENEFICIARY: Subject to the rights of any irrevocable
Beneficiary(ies), you may change the Primary Beneficiary(ies) or Contingent
Beneficiary(ies). A change may be made by Authorized Request. The change will
take effect as of the date the Authorized Request is signed. The Company will
not be liable for any payment made or action taken before it records the change.
SUSPENSION OF DEFERRAL OF PAYMENTS OR TRANSFERS
FROM THE SEPARATE ACCOUNT
The Company reserves the right to suspend or postpone payments from the Separate
Account for a withdrawal or transfer for any period when:
1. the New York Stock Exchange is closed (other than customary
weekend and holiday closings);
2. trading on the New York Stock Exchange is restricted;
3. an emergency exists as a result of which disposal of
securities held in the Separate Account is not reasonably
practicable or it is not reasonably practicable to determine the
value of the Separate Account's net assets; or
4. during any other period when the Securities and Exchange
Commission, by order, so permits for the protection of Owners;
provided that applicable rules and regulations of the Securities and Exchange
Commission will govern as to whether the conditions described in (2) and (3)
exist.
GENERAL PROVISIONS
THE CONTRACT: The entire Contract consists of this Contract, and any attached
application, endorsements or riders. This Contract may be changed or altered
only by our President or Secretary. Any change, modification or waiver must be
made in writing.
NON-PARTICIPATING IN SURPLUS: This Contract does not share in any distribution
of our profits or surplus.
INCONTESTABILITY: We will not contest this Contract from its Issue Date.
MISSTATEMENT OF AGE OR SEX: We may require proof of Age of the Annuitant before
making any life contingent Annuity Payment provided for by this Contract. If the
Age or sex of the Annuitant has been misstated the amount payable will be the
amount that the Contract Value would have provided at the true Age or sex.
Once Annuity Payments have begun, any underpayments will be made up in one sum
with the next Annuity Payment, and overpayments will be deducted from the future
Annuity Payments until the total is repaid.
CONTRACT SETTLEMENT: This Contract must be returned to us upon any settlement.
Prior to any settlement as a death claim, due proof of death must be submitted
to us. Any paid-up annuity, withdrawal or death benefits that may be available
are not less than the minimum benefits required by statute.
REPORTS: We will furnish you with a report showing the Contract Value at least
once each calender year. We will also furnish an annual report of the Separate
Account. These reports will be sent to your last known address.
TAXES: Any taxes paid to any governmental entity will be charged against the
Contract Value. We will, in our sole discretion, determine when taxes have
resulted from: the investment experience of the Separate Account; receipt by us
of the Purchase Payment(s); or commencement of Annuity Payments. We may, at our
discretion, pay taxes when due and deduct that amount from the Contract Value at
a later date. Payment at an earlier date does not waive any right we may have to
deduct amounts at a later date. We reserve the right to establish a provision
for federal income taxes if we determine, in our sole discretion, that we will
incur a tax as a result of the operation of the Separate Account. We will deduct
for any income taxes incurred by it as a result of the operation of the Separate
Account whether or not there was a provision for taxes and whether or not it was
sufficient. We will deduct any withholding taxes required by applicable law.
EVIDENCE OF SURVIVAL: Where any benefits under this Contract are contingent upon
the recipient being alive on a given date, we may require proof satisfactory to
us that the condition has been met.
PROTECTION OF PROCEEDS: No Beneficiary may commute, encumber, alienate or assign
any payments under this Contract before they are due. To the extent permitted by
law, no payments will be subject to the debts, contracts or engagements of any
Beneficiary or to any judicial process to levy upon or attach the same for
payment thereof.
MODIFICATION OF CONTRACT: This Contract may not be modified by us without your
consent except as may be required by applicable law.
RESERVES, VALUES AND BENEFITS
All reserves are greater to or equal to those required by statute. Any values
and death benefits that may be available under this Contract are not less than
the minimum benefits required by any law in the state in which this Contract is
delivered.
TABLES
