File Nos. 333-40309
811-08483
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 2 [X]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 3 [X]
(Check appropriate box or boxes.)
GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT F
-------------------------------------------------
(Exact Name of Registrant)
CONSECO VARIABLE INSURANCE COMPANY
----------------------------------------
(Name of Depositor)
11825 N. Pennsylvania Street
Carmel, Indiana 46032-4572
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(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code (317) 817-3700
Name and Address of Agent for Service
Michael A. Colliflower
Conseco Variable Insurance Company
11825 N. Pennsylvania Street
Carmel, Indiana 46032-4572
(317) 817-3700
Copies to:
Judith A. Hasenauer
Blazzard, Grodd & Hasenauer, P.C.
943 Post Road East
Westport, CT 06880
It is proposed that this filing will become effective:
_____ immediately upon filing pursuant to paragraph (b) of Rule 485
_____ on (date) pursuant to paragraph (b) of Rule 485
__X__ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
_____ on (date) pursuant to paragraph (a)(1) of Rule 485.
If appropriate, check the following:
_____ This post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
Title of Securities Being Registered:
Group and Individual Fixed and Variable Annuity Contracts and Certificates
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CROSS REFERENCE SHEET
(required by Rule 495)
<TABLE>
<CAPTION>
ITEM NO. Location
<S> <C> <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 Appendix-Condensed
Financial Information
Item 5. General Description of Registrant,
Depositor, and Portfolio Companies Other Information -
Conseco Variable; The
Separate Accounts;
Investment Options;
Business of Conseco Variable
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> <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 Calculation of 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.
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[LOGO]
P R O F I L E CONSECO
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OF THE CONSECO ADVANTAGE FIXED AND MAY 1, 1999
VARIABLE ANNUITY CONTRACT
UNDERWRITTEN BY
CONSECO VARIABLE INSURANCE COMPANY
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 full prospectus which accompanies this profile. Please read the
prospectus carefully.
1 THE CONSECO ADVANTAGE ANNUITY CONTRACT:
The Conseco Advantage fixed and variable annuity contract (Contract) offered by
Conseco Variable Insurance Company (Conseco Variable) is a contract between you,
the owner, and Conseco Variable, an insurance company. Conseco Variable
Insurance Company was previously known as Great American Reserve Insurance
Company prior to October 7, 1998. The Contract provides a means for investing on
a tax-deferred basis in a fixed account of Conseco Variable, the 1, 3 and 5 year
guarantee periods of the market value adjustment option (mva option) and 40
investment portfolios. The annuity is intended for retirement savings or other
long-term investment purposes. It provides a death benefit and guaranteed income
options.
This Contract offers 40 investment portfolios which are listed in Section 4.
These portfolios are designed to offer a better return than the fixed account.
However, this is NOT guaranteed. Market conditions determine whether you make or
lose money.
The fixed account offers an interest rate that is guaranteed by the insurance
company, Conseco Variable. This interest rate is set periodically. While your
money is in the fixed account, the interest your money will earn is guaranteed
to be no less than 3% annually by Conseco Variable. The principal is backed by
Conseco Variable.
The Contract also offers 3 guarantee periods of the mva option, each for a
different time period and with a different interest rate that is guaranteed by
Conseco. Currently, 1, 3 and 5 year periods are available. An adjustment to the
value of your Contract may apply to withdrawals or transfers from the guarantee
period prior to the end of the period.
You can put money in up to 15 of the investment portfolios, the 3 guarantee
periods of the mva option and/or the fixed account. You can transfer once in
each 30-day period during the accumulation phase without charge or tax
implication. After that, a charge of $25 per transfer may be assessed. During
the income phase, you may make two transfers each year which are without charge
or tax implications.
The Contract, like all deferred annuity contracts, has two phases: the
accumulation phase and the income phase. When you are contributing to the
Contract, it is called the accumulation 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
annuity 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
the following four options:
(1) monthly payments for a specific number of years in equal installments;
(2) monthly payments for your life, but with payments continuing to the
beneficiary for 5, 10 or 20 years (as you select) if you die before the end of
the selected period;
(3) monthly payments of a specified amount until the principal and interest
are exhausted; and
(4) monthly payments for your lifetime and your survivor's lifetime.
Once you begin receiving annuity payments, you cannot change your payment plan.
During the income phase, you can choose to have payments come from the fixed
account, the investment portfolios or both. Annuity payments cannot come from
the mva option. 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 $5,000 or more under most circumstances. You can
add $500 ($200 monthly if you use the automatic premium check option) or more
any time you like during the accumulation phase. We require at least $2,000 to
be invested in a guarantee period of the mva option. If you buy the Contract as
an Individual Retirement Annuity (IRA), the minimum we will accept is $2,000
initially and $50 thereafter. Your registered representative can help you fill
out the proper forms.
4 INVESTMENT OPTIONS:
You can put your money in the investment portfolios which are described in the
prospectuses for the funds. You can only invest in up to 15 INVESTMENT
PORTFOLIOS at any one time.
CONSECO SERIES TRUST
MANAGED BY
CONSECO CAPITAL MANAGEMENT, INC.
- ---------------------------------
o Asset Allocation Portfolio
o Common Stock Portfolio
o Corporate Bond Portfolio
o Government Securities Portfolio
o Money Market Portfolio
THE ALGER AMERICAN FUND
MANAGED BY
FRED ALGER MANAGEMENT, INC.
- ----------------------------
o Alger American Growth Portfolio
o Alger American Leveraged AllCap Portfolio
o Alger American MidCap Growth Portfolio
o Alger American Small Capitalization Portfolio
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
MANAGED BY
AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.
- ---------------------------------------------
o VP Income & Growth
o VP International
o VP Value
BERGER INSTITUTIONAL
PRODUCTS TRUST
MANAGED BY
BERGER ASSOCIATES, INC.
- ------------------------
o Berger IPT - 100 Fund
o Berger IPT - Growth and Income Fund
o Berger IPT - Small Company Growth Fund
MANAGED BY
BBOI WORLDWIDE LLC
- -------------------
o Berger/BIAM IPT - International Fund
THE DREYFUS SOCIALLY RESPONSIBLE
GROWTH FUND, INC.
MANAGED BY
THE DREYFUS CORPORATION
- ------------------------
DREYFUS STOCK INDEX FUND
MANAGED BY
THE DREYFUS CORPORATION
- ------------------------
DREYFUS VARIABLE INVESTMENT FUND
MANAGED BY
THE DREYFUS CORPORATION
- ------------------------
o Disciplined Stock Portfolio
o International Value Portfolio
FEDERATED INSURANCE SERIES
MANAGED BY
FEDERATED ADVISERS
- -------------------
o Federated High Income Bond Fund II
o Federated International Equity Fund II
o Federated Utility Fund II
INVESCO VARIABLE INVESTMENT FUNDS, INC.
MANAGED BY
INVESCO FUNDS GROUP, INC.
- --------------------------
o INVESCO VIF-High Yield Portfolio
o INVESCO VIF-Industrial Income Portfolio
JANUS ASPEN SERIES
MANAGED BY
JANUS CAPITAL CORPORATION
- --------------------------
o Aggressive Growth Portfolio
o Growth Portfolio
o Worldwide Growth Portfolio
LAZARD RETIREMENT SERIES, INC.
MANAGED BY
LAZARD ASSET MANAGEMENT
- ------------------------
o Lazard Retirement Equity Portfolio
o Lazard Retirement Small Cap Portfolio
LORD ABBETT SERIES FUND, INC.
MANAGED BY
LORD, ABBETT & CO.
- -------------------
o Growth and Income Portfolio
MITCHELL HUTCHINS SERIES TRUST
MANAGED BY
MITCHELL HUTCHINS
ASSET MANAGEMENT INC.
- ----------------------
o Growth and Income Portfolio
NEUBERGER & BERMAN ADVISERS
MANAGEMENT TRUST
MANAGED BY
NEUBERGER & BERMAN
MANAGEMENT INCORPORATED
- ------------------------
o Limited Maturity Bond Portfolio
o Partners Portfolio
STRONG OPPORTUNITY FUND II, INC.
MANAGED BY
STRONG CAPITAL MANAGEMENT, INC.
- --------------------------------
o Opportunity Fund II
STRONG VARIABLE INSURANCE FUNDS, INC.
MANAGED BY
STRONG CAPITAL MANAGEMENT, INC.
- --------------------------------
o Growth Fund II
VAN ECK WORLDWIDE INSURANCE TRUST
MANAGED BY
VAN ECK ASSOCIATES CORPORATION
- -------------------------------
o Worldwide Bond Fund
o Worldwide Emerging Markets Fund
o Worldwide Hard Assets Fund
o Worldwide Real Estate 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.
o Each year Conseco Variable deducts a $30 contract maintenance charge from
your Contract. Conseco Variable currently waives this charge if the value
of your Contract is at least $50,000.
o Conseco Variable also deducts for its insurance charges which total 1.40%
of the average daily value of your Contract allocated to the investment
portfolios.
o If you take your money out of the Contract, Conseco Variable may assess a
contingent deferred sales charge which is equal to:
Contingent
Deferred Sales
No. of Years Charge (as a
From Receipt of percentage of
Purchase Payment purchase payments)
- ----------------- ----------------
First Year 7%
Second Year 7%
Third Year 6%
Fourth Year 5%
Fifth Year 4%
Sixth Year 3%
Seventh Year 2%
Eighth Year and more 0%
o You may be assessed a premium tax charge which generally ranges from
0%-3.5%, depending on the state.
o As with other professionally managed investments, there are also investment
charges which currently range from .28% to 1.58% of the average daily value
of the investment portfolio depending upon the investment portfolio you
select.
The following chart is designed to help you understand the expenses in the
Contract.
o The column "Total Annual Expenses" shows the total of the $30 contract
maintenance charge (which has been converted to a percentage and is
represented as .10% below), the 1.40% insurance charges and the investment
expenses for each investment portfolio.
o 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 contingent deferred sales
charges. For year 10, the examples show the aggregate of all the annual
expenses assessed for the 10 years, but there is no contingent deferred
sales charge.
o The premium tax is assumed to be 0% in both examples.
<TABLE>
<CAPTION>
=================================================================================================================================
EXAMPLES:
TOTAL ANNUAL TOTAL ANNUAL TOTAL ANNUAL EXPENSES AT
INSURANCE PORTFOLIO TOTAL ANNUAL END OF:
PORTFOLIO CHARGES EXPENSES EXPENSES 1 YEAR 10 YEARS
=================================================================================================================================
<S> <C> <C> <C> <C> <C>
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CONSECO SERIES TRUST
=================================================================================================================================
Asset Allocation 1.50% .75% 2.25% $85 $255
Common Stock 1.50% .80% 2.30% $86 $260
Corporate Bond 1.50% .70% 2.20% $85 $250
Government Securities 1.50% .70% 2.20% $85 $250
Money Market 1.50% .45% 1.95% $82 $224
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THE ALGER AMERICAN FUND
=================================================================================================================================
Alger American Growth 1.50% .79% 2.29% $86 $259
Alger American Leveraged AllCap 1.50% 1.00% 2.50% $88 $280
Alger American MidCap Growth 1.50% .84% 2.34% $86 $264
Alger American Small Capitalization 1.50% .89% 2.39% $87 $269
=================================================================================================================================
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
=================================================================================================================================
VP Income & Growth 1.50% .70% 2.20% $85 $250
VP International 1.50% 1.50% 3.00% $93 $328
VP Value 1.50% 1.00% 2.50% $88 $280
=================================================================================================================================
BERGER INSTITUTIONAL PRODUCTS TRUST
=================================================================================================================================
Berger IPT - 100 1.50% 1.00% 2.50% $88 $280
Berger IPT - Growth and Income 1.50% 1.00% 2.50% $88 $280
Berger IPT - Small Company Growth 1.50% 1.15% 2.65% $89 $295
Berger/BIAM IPT-International 1.50% 1.20% 2.70% $90 $300
=================================================================================================================================
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
=================================================================================================================================
1.50% .82% 2.32% $86 $262
=================================================================================================================================
DREYFUS STOCK INDEX FUND
=================================================================================================================================
1.50% .28% 1.78% $81 $206
=================================================================================================================================
DREYFUS VARIABLE INVESTMENT FUND
=================================================================================================================================
Disciplined Stock 1.50% 1.02% 2.52% $88 $282
International Value 1.50% 1.42% 2.92% $92 $321
=================================================================================================================================
FEDERATED INSURANCE SERIES
=================================================================================================================================
Federated High Income Bond II 1.50% .80% 2.30% $86 $260
Federated International Equity II 1.50% 1.23% 2.73% $90 $303
Federated Utility II 1.50% .85% 2.35% $86 $265
=================================================================================================================================
INVESCO VARIABLE INVESTMENT FUNDS, INC.
=================================================================================================================================
INVESCO VIF-High Yield 1.50% .87% 2.37% $87 $267
INVESCO VIF-Industrial Income 1.50% .95% 2.45% $87 $275
=================================================================================================================================
JANUS ASPEN SERIES
=================================================================================================================================
Aggressive Growth 1.50% .76% 2.26% $85 $256
Growth 1.50% .70% 2.20% $85 $250
Worldwide Growth 1.50% .74% 2.24% $85 $254
=================================================================================================================================
LAZARD RETIREMENT SERIES, INC.
=================================================================================================================================
Lazard Retirement Equity 1.50% 1.50% 3.00% $93 $328
Lazard Retirement Small Cap 1.50% 1.50% 3.00% $93 $328
</TABLE>
<TABLE>
<CAPTION>
=================================================================================================================================
EXAMPLES:
TOTAL ANNUAL TOTAL ANNUAL TOTAL ANNUAL EXPENSES AT
INSURANCE PORTFOLIO TOTAL ANNUAL END OF:
PORTFOLIO CHARGES EXPENSES EXPENSES 1 YEAR 10 YEARS
=================================================================================================================================
<S> <C> <C> <C> <C> <C>
=================================================================================================================================
LORD ABBETT SERIES FUND, INC.
=================================================================================================================================
Growth and Income 1.50% .67% 2.17% $85 $247
=================================================================================================================================
MITCHELL HUTCHINS SERIES TRUST
=================================================================================================================================
Growth and Income 1.50% 1.58% 3.08% $94 $336
=================================================================================================================================
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
=================================================================================================================================
Limited Maturity Bond 1.50% .77% 2.27% $86 $257
Partners 1.50% .86% 2.36% $86 $266
=================================================================================================================================
STRONG OPPORTUNITY FUND II, INC.
=================================================================================================================================
Opportunity Fund II 1.50% 1.15% 2.65% $89 $295
=================================================================================================================================
STRONG VARIABLE INSURANCE FUNDS, INC.
=================================================================================================================================
Growth II 1.50% 1.20% 2.70% $90 $300
=================================================================================================================================
VAN ECK WORLDWIDE INSURANCE TRUST
=================================================================================================================================
Worldwide Bond 1.50% 1.12% 2.62% $89 $292
Worldwide Emerging Markets 1.50% .80% 2.30% $86 $260
Worldwide Hard Assets 1.50% 1.17% 2.67% $90 $297
Worldwide Real Estate 1.50% 1.00% 2.50% $88 $280
</TABLE>
The expenses reflect any expense reimbursement or fee waivers. For newly formed
portfolios, the expenses have been estimated. 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. If your Contract was purchased as an
individual retirement annuity (IRA), your payments may be fully taxable.
7 ACCESS TO YOUR MONEY:
You can take money out at any time during the accumulation phase. Every year you
can take a portion of your money out of the Contract without a contingent
deferred sales charge (CDSC). This amount is equal to the greater of: (i) 10% of
the value of your Contract (on a non-cumulative basis), or (ii) the IRS minimum
distribution requirement for this Contract if your Contract was issued under an
Individual Retirement Annuity, or (iii) the total of your purchase payments that
have been in the Contract more than 7 complete years. Withdrawals in excess of
these amounts will be charged a contingent deferred sales charge which declines
from 7% to 0% depending upon the number of complete years we have had your
payment. After Conseco Variable has had a payment for 7 complete years, there is
no CDSC charge for withdrawals. Each purchase payment you add to your Contract
has its own 7 year CDSC period.
Withdrawals from the mva option may be subject to a market value adjustment.
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. The sale of the Contracts
began February ___, 1998. Therefore no performance is presented here.
9 DEATH BENEFIT:
If you die before entering the income phase, the beneficiary will receive a
death benefit. Prior to age 90, the death benefit will be the greater of:
(1) the value of your Contract at the time we receive proof of death and a
payment election; or
(2) the total purchase payments you have made, less any adjusted partial
withdrawals, increased by 5% each year. Adjusted partial withdrawal means the
amount of the partial withdrawal multiplied by the amount of the death benefit
just before the partial withdrawal divided by the value of your Contract just
before the partial withdrawal. A partial withdrawal is the amount paid to you
plus any taxes withheld less any contingent deferred sales charges.
For deaths occurring at age 90 or later, the death benefit will be the value of
your Contract at the time we receive proof of death and a payment election.
10 OTHER INFORMATION:
FREE LOOK. If you cancel the Contract within 10 days after receiving it (or
whatever period is required in your state) 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 contingent deferred sales
charge. If you have purchased the contract as an Individual Retirement Annuity
(IRA) you will receive back your purchase payment.
NO PROBATE. In many 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, nor does it mean the value of the Contract is not
includable in the taxable estate.
PURCHASING CONSIDERATIONS. The Conseco Advantage 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 invested.
ADDITIONAL FEATURES. The Contract has additional features you might be
interested in. These include:
o 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. You'll have to pay taxes on money you receive. You may have to also
pay a tax penalty. We call this feature the Systematic Withdrawal Program.
o You can arrange to have a certain amount of money automatically invested in
investment portfolios on a regular basis, theoretically giving you a lower
average cost per unit over time than a single one time purchase. We call
this feature Dollar Cost Averaging.
o You can instruct Conseco Variable to automatically readjust the money
between investment portfolios periodically to keep the blend you select. We
call this feature Automatic Rebalancing.
o You can add to your Contract directly from your bank account with as little
as $200 each month. We call this feature the automatic premium check
option.
o You can elect to have your fixed account interest earnings periodically
transferred to one or more investment portfolios. We call this the Sweep
Program.
11 INQUIRIES:
If you need more information about buying a Contract, please contact us at:
Conseco Variable Insurance Company
Administrative Office
11815 N. Pennsylvania Street
Carmel, Indiana 46032
(317) 817-3700
[LOGO]
Conseco
Advantage
Fixed and Variable Annuity
MAY 1, 1999
PROSPECTUS
CONSECO
VARIABLE ANNUITY ACCOUNT F
ISSUED BY CONSECO VARIABLE INSURANCE COMPANY
This cover is not part of the prospectus
CONSECO VARIABLE
1999 Account F
Individual and Group Annuity
===============================================================================
THE FIXED AND VARIABLE ANNUITY
issued by
CONSECO VARIABLE ANNUITY ACCOUNT F
(formerly Great American Reserve Variable Annuity Account F)
and
CONSECO VARIABLE INSURANCE COMPANY
(formerly Great American Reserve Insurance Company)
This prospectus describes the Group and Individual Fixed and Variable
Annuity Contract offered by Conseco Variable Insurance Company (Conseco
Variable). Prior to October 7, 1998, Conseco Variable Insurance Company's name
was Great American Reserve Insurance Company.
The annuity contract has 44 investment choices--a FIXED ACCOUNT which
offers an interest rate which is guaranteed not to be less than 3% by Conseco,
three GUARANTEE PERIODS of the market value adjustment account option (MVA
OPTION) and 40 INVESTMENT PORTFOLIOS listed below. You can put your money in the
FIXED ACCOUNT, any of the three GUARANTEE PERIODS of the MVA OPTION and/or the
INVESTMENT PORTFOLIOS. Currently, you can invest in up to 15 INVESTMENT
PORTFOLIOS at one time.
CONSECO SERIES TRUST
MANAGED BY CONSECO CAPITAL MANAGEMENT, INC.
Asset Allocation Portfolio
Common Stock Portfolio
Corporate Bond Portfolio
Government Securities Portfolio
Money Market Portfolio
THE ALGER AMERICAN FUND
MANAGED BY FRED ALGER MANAGEMENT, INC.
Alger American Growth Portfolio
Alger American Leveraged AllCap Portfolio
Alger American MidCap Growth Portfolio
Alger American Small Capitalization Portfolio
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
MANAGED BY AMERICAN CENTURY INVESTMENT
MANAGEMENT, INC.
VP Income & Growth
VP International
VP Value
BERGER INSTITUTIONAL PRODUCTS TRUST
MANAGED BY BERGER ASSOCIATES, INC.
Berger IPT--100 Fund
Berger IPT--Growth and Income Fund
Berger IPT--Small Company Growth Fund
MANAGED BY BBOI WORLDWIDE, LLC
Berger/BIAM IPT--International Fund
THE DREYFUS SOCIALLY RESPONSIBLE
GROWTH FUND, INC.
MANAGED BY THE DREYFUS CORPORATION
DREYFUS STOCK INDEX FUND
MANAGED BY THE DREYFUS CORPORATION
DREYFUS VARIABLE INVESTMENT FUND
MANAGED BY THE DREYFUS CORPORATION
Disciplined Stock Portfolio
International Value Portfolio
FEDERATED INSURANCE SERIES
MANAGED BY FEDERATED ADVISERS
Federated High Income Bond Fund II
Federated International Equity Fund II
Federated Utility Fund II
INVESCO VARIABLE INVESTMENT FUNDS, INC.
MANAGED BY INVESCO FUNDS GROUP, INC.
INVESCO VIF - High Yield Portfolio
INVESCO VIF - Industrial Income Portfolio
JANUS ASPEN SERIES
MANAGED BY JANUS CAPITAL CORPORATION
Aggressive Growth Portfolio
Growth Portfolio
Worldwide Growth Portfolio
LAZARD RETIREMENT SERIES, INC.
MANAGED BY LAZARD ASSET MANAGEMENT
Lazard Retirement Equity Portfolio
Lazard Retirement Small Cap Portfolio
LORD ABBETT SERIES FUND, INC.
MANAGED BY LORD, ABBETT & CO.
Growth and Income Portfolio
MITCHELL HUTCHINS SERIES TRUST
MANAGED BY MITCHELL HUTCHINS ASSET MANAGEMENT, INC.
Growth and Income Portfolio
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
MANAGED BY NEUBERGER & BERMAN MANAGEMENT INCORPORATED
Limited Maturity Bond Portfolio
Partners Portfolio
STRONG OPPORTUNITY FUND II, INC.
MANAGED BY STRONG CAPITAL MANAGEMENT, INC.
Opportunity Fund II
STRONG VARIABLE INSURANCE FUNDS, INC.
MANAGED BY STRONG CAPITAL MANAGEMENT, INC.
Growth Fund II
VAN ECK WORLDWIDE INSURANCE TRUST
MANAGED BY VAN ECK ASSOCIATES CORPORATION
Worldwide Bond Fund
Worldwide Emerging Markets Fund
Worldwide Hard Assets Fund
Worldwide Real Estate Fund
Please read this prospectus before investing and keep it on file for future
reference. It contains important information about the Conseco Advantage Fixed
and Variable Annuity Contract.
To learn more about the Conseco Advantage Fixed and Variable Annuity
Contract, you can obtain a copy of the Statement of Additional Information (SAI)
dated May 1, 1999. The SAI has been filed with the Securities and Exchange
Commission (SEC) and is legally a part of this prospectus. The SEC has a Web
site (http://www.sec.gov) that contains the SAI, material incorporated by
reference, and other information regarding companies that file electronically
with the SEC. The Table of Contents of the SAI is on Page __ of this prospectus.
For a free copy of the SAI, call us at (800) 824-2726 or write us at our
administrative office: 11815 N. Pennsylvania Street, Carmel, Indiana 46032.
The Contracts:
* are not bank deposits
* are not federally insured
* are not endorsed by any bank or government agency
* are not guaranteed and may be subject to loss of principal
The Securities and Exchange Commission has not approved or disapproved these
securities or determined if this prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
May 1, 1999
TABLE OF CONTENTS
PAGE
INDEX OF SPECIAL TERMS ................................
FEE TABLE..............................................
1. THE ANNUITY CONTRACT...................................
2. ANNUITY PAYMENTS (THE INCOME PHASE)....................
3. PURCHASE...............................................
Purchase Payments.....................................
Allocation of Purchase Payments.......................
Accumulation Units....................................
4. INVESTMENT OPTIONS.....................................
Investment Portfolios.................................
The Fixed Account.....................................
The MVA Option........................................
Transfers.............................................
Dollar Cost Averaging Program.........................
Rebalancing Program...................................
Asset Allocation Program..............................
Sweep Program.........................................
Voting Rights.........................................
Substitution..........................................
5. EXPENSES...............................................
Insurance Charges.....................................
Contract Maintenance Charge...........................
Contingent Deferred Sales Charge......................
Reduction or Elimination of the
Contingent Deferred Sales Charge......................
Transfer Fee..........................................
Premium Taxes.........................................
Income Taxes..........................................
Investment Portfolio Expenses.........................
6. TAXES..................................................
Annuity Contracts in General..........................
Qualified and Non-Qualified Contracts.................
Withdrawals--Non-Qualified Contracts..................
Withdrawals--Qualified Contracts......................
Diversification.......................................
Investor Control......................................
7. ACCESS TO YOUR MONEY...................................
Systematic Withdrawal Program.........................
Suspension of Payments or Transfers...................
8. PERFORMANCE............................................
9. DEATH BENEFIT..........................................
Upon Your Death.......................................
Death of Annuitant....................................
10. OTHER INFORMATION......................................
Conseco Variable......................................
The Separate Accounts.................................
Distributor...........................................
Ownership.............................................
Beneficiary...........................................
Assignment............................................
Additional Information................................
Selected Historical Financial Information of
Conseco Variable...............................
Business of Conseco Variable..........................
Management's Discussion and Analysis of
Financial Condition and Results of Operations
of Conseco Variable.................................
Directors and Executive Officers......................
Executive Compensation................................
Independent Accountants...............................
Legal Opinions........................................
Financial Statements..................................
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL
INFORMATION ..........................................
APPENDIX A--CONDENSED FINANCIAL INFORMATION.............
APPENDIX B--MARKET VALUE ADJUSTMENT.....................
CONSECO VARIABLE
1999 Account F
Individual and Group Annuity
================================================================================
INDEX OF SPECIAL TERMS
We have written this prospectus in plain English. 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...........................................
Contract..............................................
Fixed Account.........................................
Guarantee Period......................................
Income Phase..........................................
Investment Portfolios.................................
Joint Owner...........................................
MVA Option............................................
Non-Qualified.........................................
Owner.................................................
Purchase Payment......................................
Qualified.............................................
Tax-Deferral..........................................
==============================================================================
FEE TABLE
OWNER TRANSACTION EXPENSES
Contingent Deferred Sales Charge (as a percentage of purchase payments)(See Note
2 under "Explanation of Fee Table and Examples")
NO. OF YEARS FROM RECEIPT OF PAYMENT CHARGE
- ------------------------------------------------------------------------------
First Year.............................................................. 7%
Second Year............................................................. 7%
Third Year.............................................................. 6%
Fourth Year............................................................. 5%
Fifth Year.............................................................. 4%
Sixth Year.............................................................. 3%
Seventh Year............................................................ 2%
Eighth Year and more.................................................... 0%
- ------------------------------------------------------------------------------
TRANSFER FEE (see Note 3 under "Explanation of Fee Table and Examples")
No charge for one transfer in each 30 day period during the ACCUMULATION PHASE.
Thereafter, we will charge a fee of $25 per transfer. We will not charge for the
two transfers allowed each year during the INCOME PHASE.
CONTRACT MAINTENANCE CHARGE
(see Note 4 under "Explanation of Fee Table
and Examples")
$30 per CONTRACT per year
SEPARATE ACCOUNT ANNUAL EXPENSES
(as a percentage of average account value)
Mortality and Expense Risk Charge 1.25%
Administrative Charge .15%
----
TOTAL SEPARATE ACCOUNT ANNUAL EXPENSES 1.40%
<TABLE>
<CAPTION>
INVESTMENT PORTFOLIO EXPENSES
(as a percentage of the average daily net assets of an INVESTMENT PORTFOLIO)
TOTAL ANNUAL
OTHER EXPENSES PORTFOLIO
(AFTER EXPENSE EXPENSES
REIMBURSEMENT (AFTER EXPENSE
MANAGEMENT 12b-1 FOR CERTAIN REIMBURSEMENT FOR
FEES FEES PORTFOLIOS) CERTAIN PORTFOLIOS)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CONSECO SERIES TRUST (1)
Asset Allocation Portfolio (2)....................................... 0.55% -- 0.20% 0.75%
Common Stock Portfolio (2)........................................... 0.60% -- 0.20% 0.80%
Corporate Bond Portfolio............................................. 0.50% -- 0.20% 0.70%
Government Securities Portfolio...................................... 0.50% -- 0.20% 0.70%
Money Market Portfolio (2)........................................... 0.25% -- 0.20% 0.45%
THE ALGER AMERICAN FUND
Alger American Growth Portfolio...................................... 0.75% -- 0.04% 0.79%
Alger American Leveraged AllCap Portfolio (3)........................ 0.85% -- 0.15% 1.00%
Alger American MidCap Growth Portfolio............................... 0.80% -- 0.04% 0.84%
Alger American Small Capitalization Portfolio........................ 0.85% -- 0.04% 0.89%
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
VP Income & Growth................................................... 0.70% -- 0.00% 0.70%
VP International..................................................... 1.50% -- 0.00% 1.50%
VP Value............................................................. 1.00% -- 0.00% 1.00%
BERGER INSTITUTIONAL PRODUCTS TRUST
Berger IPT--100 Fund (4)............................................. 0.00% -- 1.00% 1.00%
Berger IPT--Growth and Income Fund (4)............................... 0.00% -- 1.00% 1.00%
Berger IPT--Small Company Growth Fund (4)............................ 0.00% -- 1.15% 1.15%
Berger/BIAM IPT--International Fund (4).............................. 0.00% -- 1.20% 1.20%
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.................... 0.75% -- 0.07% 0.82%
DREYFUS STOCK INDEX FUND............................................. 0.25% -- 0.03% 0.28%
DREYFUS VARIABLE INVESTMENT FUND
Disciplined Stock Portfolio.......................................... 0.75% 0.27% 1.02%
International Value Portfolio........................................ 1.00% 0.42% 1.42%
FEDERATED INSURANCE SERIES
Federated High Income Bond Fund II (5)............................... 0.51% -- 0.29% 0.80%
Federated International Equity Fund II (5)........................... 0.02% -- 1.21% 1.23%
Federated Utility Fund II (5)........................................ 0.48% -- 0.37% 0.85%
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF - High Yield Portfolio (6)............................... 0.60% -- 0.27% 0.87%
INVESCO VIF - Industrial Income Portfolio (6)........................ 0.75% -- 0.20% 0.95%
JANUS ASPEN SERIES
Aggressive Growth Portfolio (7)...................................... 0.73% -- 0.03% 0.76%
Growth Portfolio (7)................................................. 0.65% -- 0.05% 0.70%
Worldwide Growth Portfolio (7)....................................... 0.66% -- 0.08% 0.74%
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Equity Portfolio (8)............................... 0.75% 0.25% 0.50% 1.50%
Lazard Retirement Small Cap Portfolio (8)............................ 0.75% 0.25% 0.50% 1.50%
LORD ABBETT SERIES FUND, INC.
Growth and Income Portfolio (9)...................................... 0.50% 0.15% 0.02% 0.67%
MITCHELL HUTCHINS SERIES TRUST
Growth and Income Portfolio.......................................... 0.70% -- 0.88% 1.58%
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST (10)
Limited Maturity Bond Portfolio...................................... 0.65% -- 0.12% 0.77%
Partners Portfolio................................................... 0.80% -- 0.06% 0.86%
STRONG OPPORTUNITY FUND II, INC.
Opportunity Fund II.................................................. 1.00% -- 0.15% 1.15%
STRONG VARIABLE INSURANCE FUNDS, INC
Growth Fund II (11).................................................. 1.00% -- 0.20% 1.20%
VAN ECK WORLDWIDE INSURANCE TRUST (12)
Worldwide Bond Fund.................................................. 1.00% -- 0.12% 1.12%
Worldwide Emerging Markets Fund...................................... 1.00% -- (0.20%) 0.80%
Worldwide Hard Assets Fund........................................... 1.00% -- 0.17% 1.17%
Worldwide Real Estate Fund........................................... 0.00% -- 1.00% 1.00%
</TABLE>
(1) Conseco Capital Management, Inc., the investment adviser of Conseco
Series Trust, has voluntarily agreed to reimburse all expenses, including
management fees, in excess of the following percentage of the average annual net
assets of each listed Portfolio, as long as such reimbursement would not result
in a Portfolio's inability to qualify as a regulated investment company under
the Code: 0.75% for the Asset Allocation Portfolio; 0.80% for the Common Stock
Portfolio; 0.70% for the Corporate Bond Portfolio and Government Securities
Portfolio; and 0.45% for the Money Market Portfolio. The total percentages in
the above table are after reimbursement. In the absence of expense
reimbursement, the total fees and expenses in 1997 would have totaled: 0.84% for
the Asset Allocation Portfolio; 0.80% for the Common Stock Portfolio; 0.77% for
the Corporate Bond Portfolio; 0.92% for the Government Securities Portfolio; and
0.52% for the Money Market Portfolio.
(2) Conseco Capital Management, Inc., since January 1, 1993, has
voluntarily waived its management fees in excess of the annual rates set forth
above. Absent such fee waivers, the management fees would be: .65% for the Asset
Allocation Portfolio; .65% for the Common Stock Portfolio; and .50% for the
Money Market Portfolio.
(3) The Alger American Leveraged AllCap Portfolio's "Other Expenses"
includes .04% of interest expense.
(4) The Funds' investment advisers have voluntarily agreed to waive their
advisory fee and have voluntarily reimbursed the Funds 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 each of the Berger IPT--100 Fund and the Berger
IPT--Growth and Income Fund exceed 1.00%, the normal operating expenses in any
fiscal year of the Berger IPT--Small Company Growth Fund exceed 1.15%, and the
normal operating expenses of the Berger/BIAM IPT International Fund exceed 1.20%
of the respective Fund's average daily net assets. Absent the voluntary waiver
and reimbursement, the Management Fee for the Berger IPT--100 Fund, Berger
IPT--Growth and Income Fund, the Berger IPT--Small Company Growth Fund and the
Berger/BIAM IPT--International Fund would have been .75%, .75%, .90%, and .90%
respectively, and their Total Annual Portfolio Expenses would have been 9.18%,
9.62%, 5.81% and 3.83%, respectively.
(5) In the absence of a voluntary waiver by Federated Advisers, the Funds'
investment adviser, the Management Fee and Total Annual Portfolio Expenses would
have been 0.60% and .89%, respectively, for High Income Bond Fund II and 0.75%
and 1.12%, respectively, for Utility Fund II. Absent a voluntary waiver of the
management fee and the voluntary reimbursement of certain other operating
expenses by Federated Advisers, the Management Fee and Total Annual Portfolio
Expenses for International Equity Fund II would have been 1.00% and 2.21%,
respectively.
(6) Certain expenses are being absorbed voluntarily by the investment
adviser and sub-adviser. Total expenses (after expenses were absorbed but before
any expense offset arrangement) of the INVESCO VIF - High Yield Portfolio and
INVESCO VIF - Industrial Income Portfolio for the year ended December 31, 1997
amounted to 0.83% and 0.91%, respectively, of each Portfolio's average net
assets. In the absence of such voluntary expense limitation, the total operating
expenses of the INVESCO VIF - High Yield Portfolio and INVESCO VIF - Industrial
Income Portfolio for the fiscal period ended December 31, 1997 would have been
0.94% and 0.97%, respectively, of each Portfolio's average net assets.
It should be noted that the Portfolio's actual expenses were lower than the
figures shown because the Portfolio's custodian fees and pricing expenses were
reduced under expense offset arrangements. However, as a result of an SEC
requirement for mutual funds to state their total operating expenses without
crediting any such expense offset arrangements, the figures shown above do not
reflect these reductions.
(7) The expense figures shown are net of certain fee waivers or reductions
from Janus Capital Corporation, the investment adviser of the Janus Aspen
Series. Without such waivers or reductions, the total fees and expenses in 1997
would have totaled: 0.78% for Aggressive Growth; 0.78% for Growth; and 0.81% for
Worldwide Growth.
(8) Lazard Asset Management, the Fund's investment adviser, has voluntarily
agreed to reimburse all expenses, including management fees, in excess of 1.50%
of the average annual net assets of the Portfolio.
(9) The Growth and Income Portfolio of Lord Abbett Series Fund, Inc. has a
12b-1 plan which provides for payments to Lord, Abbett & Co. for remittance to a
life insurance company for certain distribution expenses (see the Fund
Prospectus). The 12b-1 plan provides that such remittances, in the aggregate,
will not exceed .15%, on an annual basis, of the daily net asset value of shares
of the Growth and Income Portfolio. For the year ending December 31, 1998, the
12b-1 fees are estimated to be .15%. The examples below for this Portfolio
reflect the estimated 12b-1 fees.
(10) Neuberger & Berman Advisers Management Trust is divided into
portfolios (Portfolios), each of which invests all of its net investable assets
in a corresponding series of Advisers Managers Trust. The figures reported under
"Management Fees" include the total of the administration fees paid by the
Portfolio and the management fees paid by its corresponding series. Similarly,
"Other Expenses" includes all other expenses of the Portfolio and its
corresponding series.
(11) Strong Capital Management, Inc., the investment adviser of the Strong
Growth Fund II, has voluntarily agreed to cap the Fund's total operating
expenses at 1.20%. The Adviser has no current intention to, but may in the
future, discontinue or modify any waiver of fees or absorption of expenses at
its discretion with appropriate notification to its shareholders.
(12) All figures are annualized. Expenses of the Worldwide Real Estate
Fund, which commenced operation in June 1997, are being assumed by the Fund's
investment adviser. Without such assumption, Worldwide Real Estate Fund's
Management Fee would be 1.00%, Other Expenses would be 3.88% and Total Expenses
would be 4.88%. Other Expenses of Worldwide Real Estate Fund are an estimate
which assumes $80 million in average daily net assets, and may be greater or
less than those shown. Prior to April 30, 1997, Worldwide Hard Assets Fund was
named Gold and Natural Resources Fund. Other Expenses of Worldwide Hard Assets
Fund are net of soft dollar credits. Without such credits, Other Expenses would
have been 0.18% and Total Expenses would have been 1.18%. Other Expenses of
Worldwide Emerging Markets Fund are net of the reduction of the Fund's operating
fees in connection with a fee arrangement, based on cash balances left on
deposit with the custodian, and net of the waiver or assumption by the Fund's
investment adviser of certain fees and expenses. Without such fee arrangement
and, to a lesser extent, the waiver/assumption, Other Expenses would have been
0.34% and Total Expenses would have been 1.34%. The Fund's investment adviser is
no longer waiving or assuming fees and expenses.
EXAMPLES:
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return on assets:
(a) if you surrender your CONTRACT at the end of each time period; (b) if
you do not surrender your CONTRACT; (c)if you annuitize your CONTRACT (except
under certain circumstances).
TIME PERIODS
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------
CONSECO SERIES TRUST
Asset Allocation (a) $85 (a) $123
(b) $23 (b) $ 69
(c) $85 (c) $123
Common Stock (a) $86 (a) $124
(b) $23 (b) $ 71
(c) $86 (c) $124
Corporate Bond (a) $85 (a) $121
(b) $22 (b) $ 68
(c) $85 (c) $121
Government Securities (a) $85 (a) $121
(b) $22 (b) $ 68
(c) $85 (c) $121
Money Market (a) $82 (a) $114
(b) $20 (b) $ 60
(c) $82 (c) $114
THE ALGER AMERICAN FUND
Alger American Growth (a) $86 (a) $124
(b) $23 (b) $ 71
(c) $86 (c) $124
Alger American Leveraged
AllCap (a) $88 (a) $130
(b) $25 (b) $ 77
(c) $88 (c) $130
Alger American MidCap Growth (a) $86 (a) $126
(b) $23 (b) $ 72
(c) $86 (c) $126
Alger American Small
Capitalization (a) $87 (a) $127
(b) $24 (b) $ 74
(c) $87 (c) $127
AMERICAN CENTURY VARIABLE
PORTFOLIOS, INC
VP Income & Growth (a) $85 (a) $121
(b) $22 (b) $ 68
(c) $85 (c) $121
VP International (a) $93 (a) $145
(a) $30 (b) $ 92
(c) $93 (c) $145
VP Value (a) $88 (a) $130
(b) $25 (b) $ 77
(c) $88 (c) $130
BERGER INSTITUTIONAL PRODUCTS
TRUST
Berger IPT--100 (a) $88 (a) $130
(b) $25 (b) $ 77
(c) $88 (c) $130
Berger IPT--Growth and Income (a) $88 (a) $130
(b) $25 (b) $ 77
(c) $88 (c) $130
Berger IPT--Small Company
Growth (a) $89 (a) $135
(b) $27 (b) $ 81
(c) $89 (c) $135
Berger/BIAM IPT--International (a) $90 (a) $136
(b) $27 (b) $ 83
(c) $90 (c) $136
THE DREYFUS SOCIALLY RESPONSIBLE
GROWTH FUND, INC.
(a) $86 (a) $125
(b) $25 (b) $ 71
(c) $86 (c) $125
DREYFUS STOCK INDEX FUND
(a) $81 (a) $109
(b) $18 (b) $ 55
(c) $81 (c) $109
DREYFUS VARIABLE INVESTMENT FUND
Disciplined Stock (a) $88 (a) $131
(b) $25 (b) $ 77
(c) $88 (c) $131
International Value (a) $92 (a) $143
(b) $29 (b) $ 89
(c) $92 (c) $143
FEDERATED INSURANCE SERIES
Federated High Income Bond II (a) $86 (a) $124
(b) $23 (b) $ 71
(c) $86 (c) $124
Federated International
Equity II (a) $90 (a) $137
(b) $27 (b) $ 84
(c) $90 (c) $137
Federated Utility II (a) $86 (a) $126
(b) $24 (b) $ 72
(c) $86 (c) $126
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF - High Yield (a) $87 (a) $127
(b) $24 (b) $ 73
(c) $87 (c) $127
INVESCO VIF - Industrial Income (a) $87 (a) $129
(b) $25 (b) $ 75
(c) $87 (c) $129
JANUS ASPEN SERIES
Aggressive Growth (a) $85 (a) $123
(b) $23 (b) $ 70
(c) $85 (c) $123
Growth (a) $85 (a) $121
(b) $22 (b) $ 68
(c) $85 (c) $121
Worldwide Growth (a) $85 (a) $123
(b) $22 (b) $ 69
(c) $85 (c) $123
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Equity (a) $93 (a) $145
(b) $30 (b) $ 92
(c) $93 (c) $145
Lazard Retirement Small Cap (a) $93 (a) $145
(b) $30 (b) $ 92
(c) $93 (c) $145
LORD ABBETT SERIES FUND, INC.
Growth and Income (a) $85 (a) $120
(b) $22 (b) $ 67
(c) $85 (c) $120
MITCHELL HUTCHINS SERIES TRUST
Growth and Income (a) $93 (a) $147
(b) $31 (b) $ 93
(c) $93 (c) $147
NEUBERGER & BERMAN ADVISERS
MANAGEMENT TRUST
Limited Maturity Bond (a) $86 (a) $123
(b) $23 (b) $ 70
(c) $86 (c) $123
Partners (a) $86 (a) $126
(b) $24 (b) $ 73
(c) $86 (c) $126
STRONG OPPORTUNITY FUND II, INC.
Opportunity Fund II (a) $89 (a) $135
(b) $27 (b) $ 81
(c) $89 (c) $135
STRONG VARIABLE INSURANCE FUNDS, INC.
Growth II (a) $90 (a) $136
(b) $27 (b) $ 83
(c) $90 (c) $136
VAN ECK WORLDWIDE INSURANCE TRUST
Worldwide Bond (a) $89 (a) $134
(b) $26 (b) $ 80
(c) $89 (c) $134
Worldwide Emerging Markets (a) $86 (a) $124
(b) $23 (b) $ 71
(c) $86 (c) $124
Worldwide Hard Assets (a) $90 (a) $136
(b) $27 (b) $ 82
(c) $90 (c) $136
Worldwide Real Estate (a) $88 (a) $130
(b) $25 (b) $ 77
(c) $88 (c) $130
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 the INVESTMENT PORTFOLIOS.
2. Every year you can take money out of your CONTRACT, without the
contingent deferred sales charge, of an amount equal to the greater of: (i) 10%
of the value of your CONTRACT (on a non-cumulative basis), or (ii) the IRS
minimum distribution requirement for your CONTRACT if issued as an Individual
Retirement Annuity, or (iii) the total of your PURCHASE PAYMENTS that have been
in the CONTRACT more than 7 complete years.
3. Conseco Variable will not charge you the transfer fee even if there is
more than one transfer in a 30-day period during the ACCUMULATION PHASE if the
transfer is for the Dollar Cost Averaging, Sweep or Rebalancing Programs. We
will also not charge you a transfer fee on transfers made at the end of the free
look period. All reallocations made on the same day count as one transfer.
4. Conseco Variable will not charge the contract maintenance charge if the
value of your CONTRACT is $50,000 or more. However, if you make a complete
withdrawal, we will charge the contract maintenance charge.
5. Premium taxes are not reflected. Premium taxes may apply depending on
the state where you live.
6. The assumed average CONTRACT size is $30,000.
7. THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
There is Condensed Financial Information in Appendix A to this prospectus.
1. THE CONSECO ADVANTAGE ANNUITY CONTRACT
This Prospectus describes the Conseco Advantage Fixed and Variable Annuity
CONTRACT offered by Conseco Variable.
An annuity is a CONTRACT between you, the OWNER, and an insurance company
(in this case Conseco Variable), where the insurance company promises to pay you
an income, in the form of ANNUITY PAYMENTS. 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 a variable annuity. You can choose among 40 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 contains a FIXED ACCOUNT. The FIXED ACCOUNT offers an interest
rate that is guaranteed to be no less than 3% by Conseco Variable. If you select
the 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 FIXED ACCOUNT portion of the CONTRACT will remain level
for the entire INCOME PHASE.
The CONTRACT also contains 3 GUARANTEE PERIODS within the MVA OPTION. Your
money will earn interest at the rate set by Conseco Variable. The interest rate
is guaranteed by Conseco Variable for the time you agree to leave your money in
the GUARANTEE PERIOD. We currently offer GUARANTEE PERIODS for 1, 3 and 5 years.
If you allocate money to a GUARANTEE PERIOD, 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. An adjustment to your CONTRACT will apply to
withdrawals, transfers or annuitizations from the 1, 3 and 5 year GUARANTEE
PERIODS prior to the end of the selected period.
As OWNER of the CONTRACT, you exercise all rights under the CONTRACT. You
can change the OWNER at any time by notifying Conseco Variable in writing. You
and another person 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 month and year in which those payments begin. We call that date the ANNUITY
DATE. Your ANNUITY DATE can be any date selected by you. Your ANNUITY DATE
cannot be any earlier than 90 days after we issue the CONTRACT. ANNUITY PAYMENTS
must begin by the earlier of the ANNUITANT's 90th birthday or the maximum date
allowed by law. 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. With
30 days notice to us, you can change the ANNUITY DATE or ANNUITY OPTION at any
time before the ANNUITY DATE. The ANNUITANT is the person whose life we look to
when we determine ANNUITY PAYMENTS.
You can select an ANNUITY OPTION any time 30 days before the ANNUITY DATE.
If you do not choose an ANNUITY OPTION, we will assume that you selected Option
2 which provides a life annuity with 10 years of guaranteed payments.
On the ANNUITY DATE the value of your CONTRACT, less any premium tax, plus
any market value adjustment (which may be positive or negative), less any
contingent deferred sales charge, and less any contract maintenance charge will
be applied under the ANNUITY OPTION you selected. If you select an ANNUITY DATE
that is at least 4 years after your CONTRACT was issued and you choose an
ANNUITY OPTION that has a life contingency or is for a minimum of 5 years, the
value of your CONTRACT, less any premium tax and less any contract maintenance
charge will be applied under the ANNUITY OPTION you selected. A contingent
deferred sales charge will not be deducted under these circumstances.
During the INCOME PHASE, you can choose to have payments come from the
INVESTMENT PORTFOLIOS, the FIXED ACCOUNT or both. Payments cannot come from the
MVA OPTION during the INCOME PHASE. If you don't tell us otherwise, your ANNUITY
PAYMENTS will be based on the investment allocations in the INVESTMENT
PORTFOLIOS and FIXED ACCOUNT that were in place on the ANNUITY DATE.
If you choose to have any portion of your ANNUITY PAYMENTS come from the
INVESTMENT PORTFOLIO(S), the dollar amount of your payment will depend upon 3
things:
1) the value of your CONTRACT in the INVESTMENT PORTFOLIO(S) on the
ANNUITY DATE;
2) the 3% or 5% (as you selected) assumed investment rate used in the
annuity table for the CONTRACT; and
3) the performance of the INVESTMENT PORTFOLIO(S) you selected.
You can choose either a 5% or a 3% assumed investment rate. If the actual
performance exceeds the 3% or 5% (as you selected) assumed rate, your ANNUITY
PAYMENTS will increase. Similarly, if the actual rate is less than 3% or 5% (as
you selected) your ANNUITY PAYMENTS will decrease.
Unless you notify us otherwise, we will pay the ANNUITY PAYMENTS to you.
You can change the payee at any time prior to the ANNUITY DATE. Income from any
distribution will be reported to you for tax purposes.
You can choose one of the following ANNUITY OPTIONS or any other ANNUITY
OPTION which is acceptable to Conseco. After ANNUITY PAYMENTS begin, you cannot
change the ANNUITY OPTION.
OPTION 1. INCOME FOR A SPECIFIED PERIOD. We will pay an income for a
specific number of years in equal installments.
OPTION 2. LIFE ANNUITY WITH 5, 10 OR 20 YEARS GUARANTEED. We will make
monthly ANNUITY PAYMENTS so long as the ANNUITANT is alive. However, when the
ANNUITANT dies, if 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.
OPTION 3. INCOME OF SPECIFIED AMOUNT. We will pay income of a specified
amount until the principal and interest are exhausted.
OPTION 4. JOINT AND SURVIVOR ANNUITY. We will make monthly ANNUITY PAYMENTS
so long as the ANNUITANT and a joint ANNUITANT are both alive. When either of
these people die, the amount of the ANNUITY PAYMENTS we will make to the
survivor can be equal to 100%, 66 2/3% or 50% of the amount that we would have
paid if both were alive.
ANNUITY PAYMENTS are made monthly unless you have less than $5,000 to apply
toward a payment. In that case, Conseco Variable may make a single lump sum
payment to you. Likewise, if your ANNUITY PAYMENTS would be less than $50 a
month, Conseco has the right to change the frequency of payments so that your
ANNUITY PAYMENTS are at least $50.
3. PURCHASE
PURCHASE PAYMENTS
A PURCHASE PAYMENT is the money you give us to buy the CONTRACT. The
minimum we will accept is $5,000 when the CONTRACT is bought as a NON-QUALIFIED
CONTRACT. If you are buying the CONTRACT as part of an Individual Retirement
Annuity (IRA), the minimum we will accept is $2,000. For each GUARANTEE PERIOD
of the MVA OPTION, a minimum of $2,000 is required. The maximum we accept is
$500,000 without our prior approval.
You can make additional PURCHASE PAYMENTS of $500 or more to a NON-QUALIFIED
CONTRACT and $50 to an IRA CONTRACT. However, if you select the automatic
premium check option, you can make additional payments of $200 each month for
NON-QUALIFIED CONTRACTS and $50 each month for IRA CONTRACTS.
ALLOCATION OF PURCHASE PAYMENTS
When you purchase a CONTRACT, we will allocate your PURCHASE PAYMENT to the
FIXED ACCOUNT, the GUARANTEE PERIODS of the MVA OPTION and/or one or more of the
INVESTMENT PORTFOLIOS you have selected. CURRENTLY, YOU CAN ALLOCATE MONEY TO UP
TO 15 INVESTMENT PORTFOLIOS AT ANY ONE TIME. If you make additional PURCHASE
PAYMENTS, we will allocate them in the same way as your first PURCHASE PAYMENT
unless you tell us otherwise. Currently, the minimum amount which can be
allocated to any of the GUARANTEE PERIODS of the MVA OPTION is $2,000. We
reserve the right to change this amount in the future.
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 provide us all of the information needed, we will
contact you. 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.
FREE LOOK
If you change your mind about owning the CONTRACT, you can cancel it within
10 days after receiving it (or whatever period is required in your state). When
you CANCEL the CONTRACT within this time period, Conseco Variable will not
assess a contingent deferred sales charge. On the day we receive your request we
will return the value of your CONTRACT. In some states, we may be required to
refund your PURCHASE PAYMENT. 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 (or whatever period is required in
your state).
ACCUMULATION UNITS
The ACCUMULATION UNIT value for each account was arbitrarily set initially
at $10.00. The value of the variable annuity portion of your CONTRACT will
increase or decrease 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 period by a factor for the current period. The factor is determined by:
1. dividing the value of an INVESTMENT PORTFOLIO share at the end of the
current period (and any charges for taxes) by the value of an INVESTMENT
PORTFOLIO share for the previous period; and
2. subtracting the daily amount of the insurance charges.
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 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 Wednesday we receive an additional PURCHASE PAYMENT of $4,000 from you.
You have told us you want this to go to the Common Stock Portfolio. When the New
York Stock Exchange closes on that Wednesday, we determine that the value of an
ACCUMULATION UNIT for the Common Stock Portfolio is $12.25. We then divide
$4,000 by $12.25 and credit your CONTRACT on Wednesday night with 326.53
ACCUMULATION UNITS for the Common Stock Portfolio.
4. INVESTMENT OPTIONS
INVESTMENT PORTFOLIOS
The CONTRACT offers 40 INVESTMENT PORTFOLIOS which are listed below. You
can invest in up to 15 INVESTMENT PORTFOLIOS at any one time. Additional
INVESTMENT PORTFOLIOS may be available in the future.
Shares of the funds are offered in connection with certain variable annuity
contracts and variable life insurance policies of various life insurance
companies which may or may not be affiliated with Conseco Variable. Certain
INVESTMENT PORTFOLIOS are also sold directly to QUALIFIED plans. The funds do
not believe that offering their shares in this manner will be disadvantageous to
you.
Conseco Variable may enter into certain arrangements under which it is
reimbursed by the INVESTMENT PORTFOLIOS' advisers, distributors and/or
affiliates for the administrative services which it provides to the portfolios.
YOU SHOULD READ THE PROSPECTUSES FOR THESE FUNDS CAREFULLY BEFORE
INVESTING. COPIES OF THESE PROSPECTUSES ARE ATTACHED TO THIS PROSPECTUS.
CONSECO SERIES TRUST
Conseco Series Trust is a mutual fund with multiple portfolios. Conseco
Series Trust is managed by Conseco Capital Management, Inc. The following
portfolios are available under the CONTRACT:
Asset Allocation Portfolio
Common Stock Portfolio
Corporate Bond Portfolio
Government Securities Portfolio
Money Market Portfolio
THE ALGER AMERICAN FUND
The Alger American Fund is a mutual fund with multiple portfolios. Fred
Alger Management, Inc. serves as the investment adviser. The following
portfolios are available under the CONTRACT:
Alger American Growth Portfolio
Alger American Leveraged AllCap Portfolio
Alger American MidCap Growth Portfolio
Alger American Small Capitalization Portfolio
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
American Century Variable Portfolios, Inc. is a series of funds managed by
American Century Investment Management, Inc. The following portfolios are
available under the CONTRACT:
VP Income & Growth
VP International
VP Value (long-term capital growth with income as a secondary objective)
BERGER INSTITUTIONAL PRODUCTS TRUST
Berger Institutional Products Trust is a mutual fund with multiple
portfolios. Berger Associates, Inc. is the investment adviser to all portfolios
except the Berger/BIAM IPT--International Fund. BBOI Worldwide, LLC is the
adviser to the Berger/BIAM IPT--International Fund. The following portfolios are
available under the CONTRACT:
Berger IPT--100 Fund (long-term capital appreciation)
Berger IPT--Growth and Income Fund
Berger IPT--Small Company Growth Fund
Berger/BIAM IPT--International Fund
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
The Dreyfus Socially Responsible Growth Fund, Inc. is managed by The
Dreyfus Corporation. Dreyfus has hired NCM Capital Management Group, Inc. to
serve as sub-investment adviser and provide day-to-day management of the Fund's
investments.
DREYFUS STOCK INDEX FUND
The Dreyfus Corporation serves as the Fund's manager. Dreyfus has hired its
affiliate, Mellon Equity Associates, to serve as the Fund's index fund manager
and provide day-to-day management of the Fund's investments.
DREYFUS VARIABLE INVESTMENT FUND
The Dreyfus Variable Investment Fund is a mutual fund with multiple
portfolios. The Dreyfus Corporation serves as the investment adviser. The
following portfolios are available under the CONTRACT:
Disciplined Stock Portfolio (seeks to outperform the total return
performance of the Standard & Poor's 500 Composite Stock Price Index)
International Value Portfolio
FEDERATED INSURANCE SERIES
Federated Insurance Series is a mutual fund with multiple portfolios.
Federated Advisers is the investment adviser. The following portfolios are
available under the CONTRACT:
Federated High Income Bond Fund II
Federated International Equity Fund II
Federated Utility Fund II
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO Variable Investment Funds, Inc. is a mutual fund with multiple
portfolios. INVESCO Funds Group, Inc. is the investment adviser. The following
portfolios are available under the CONTRACT:
INVESCO VIF - High Yield Portfolio
INVESCO VIF - Industrial Income Portfolio (seeks high current income with
capital appreciation as a secondary goal)
JANUS ASPEN SERIES
The Janus Aspen Series is a mutual fund with multiple portfolios which are
advised by Janus Capital Corporation. The following portfolios are available
under the CONTRACT:
Aggressive Growth Portfolio
Growth Portfolio
Worldwide Growth Portfolio
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Series, Inc. is a mutual fund with multiple portfolios.
Lazard Asset Management, a division of Lazard Freres & Co., LLC, is the
investment manager for each portfolio. The following portfolios are available
under the CONTRACT:
Lazard Retirement Equity Portfolio
Lazard Retirement Small Cap Portfolio
LORD ABBETT SERIES FUND, INC.
Lord Abbett Series Fund, Inc. is a mutual fund managed by Lord, Abbett &
Co. The following portfolio is available under the CONTRACT:
Growth and Income Portfolio
MITCHELL HUTCHINS SERIES TRUST
Mitchell Hutchins Series Trust is a mutual fund with multiple portfolios.
Mitchell Hutchins Asset Management, Inc. provides advisory and administrative
services to the Fund. The following portfolio is available under the CONTRACT:
Growth and Income Portfolio
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
Each portfolio of Neuberger & Berman Advisers Management Trust invests in a
corresponding series of Advisers Managers Trust. All series of Advisers Managers
Trust are managed by Neuberger & Berman Management Incorporated. The following
are available under the CONTRACT:
Limited Maturity Bond Portfolio
Partners Portfolio (capital growth)
STRONG OPPORTUNITY FUND II, INC.
Strong Opportunity Fund II is a mutual fund managed by Strong Capital
Management, Inc. The following portfolio is available under the CONTRACT:
Opportunity Fund II (capital growth)
STRONG VARIABLE INSURANCE FUNDS, INC.
Strong Variable Insurance Funds, Inc. is a mutual fund with multiple
series. Strong Capital Management, Inc. serves as the investment adviser. The
following series is available under the CONTRACT:
Growth Fund II
VAN ECK WORLDWIDE INSURANCE TRUST
Van Eck Worldwide Insurance Trust is a mutual fund with multiple portfolios
which are managed by Van Eck Associates Corporation. The following portfolios
are available under the CONTRACT:
Worldwide Bond Fund
Worldwide Emerging Markets Fund
Worldwide Hard Assets Fund
Worldwide Real Estate Fund
THE FIXED ACCOUNT
You can invest in the one year FIXED ACCOUNT of Conseco Variable. The FIXED
ACCOUNT offers an interest rate that is guaranteed to be no less than 3%
annually by Conseco Variable. If you select the FIXED ACCOUNT, your money will
be placed with the other general assets of Conseco Variable.
THE MVA OPTION
The CONTRACT also offers three GUARANTEE PERIODS of the market value
adjustment option (MVA OPTION). A GUARANTEE PERIOD is the period of time for
which interest is credited in the market value adjustment option. Each
allocation or transfer to the MVA OPTION creates one or more new GUARANTEE
PERIODS. We currently offer GUARANTEE PERIODS of 1, 3 and 5 years. You can
allocate your PURCHASE PAYMENT or transfer money to any of the currently
available periods.
The GUARANTEE PERIODS of the MVA OPTION offer interest rates that are
guaranteed by Conseco Variable. Interest rates may differ from time to time
because of changes in market conditions. The interest rates set for a GUARANTEE
PERIOD for new PURCHASE PAYMENTS may be different from the interest rates
offered for money already in the GUARANTEE PERIODS. We set interest rates at our
discretion. Once we set an interest rate for a GUARANTEE PERIOD, it will not
change during that period.
If you do not specify a GUARANTEE PERIOD at the time of renewal, we will
select the same GUARANTEE PERIOD that just finished as long as it does not
extend beyond the latest ANNUITY DATE. If it does, we will choose the one year
period. If there is no GUARANTEE PERIOD for the same period available, the one
year period will be selected. If it is not available, the next longest period
will be selected.
If you take money out (whether by withdrawal, transfer or annuitization) of
the GUARANTEE PERIOD before the end of the period in excess of the free amount
(see below), an adjustment will be made to the amount withdrawn. This adjustment
is referred to as a market value adjustment. The market value adjustment can
increase or decrease the amount you take out of your CONTRACT. However, after
the first year in a period, you can make one withdrawal each year of up to a
total of 10% of the value of your MVA OPTION in that period and no market value
adjustment will be made to that withdrawal (free amount).
We will not apply a market value adjustment for any withdrawals in the
following situations:
o to pay a death benefit;
o to pay fees or charges under the CONTRACT;
o amounts which you withdraw or transfer during the 30-day period before the
end of the GUARANTEE PERIOD;
o when your CONTRACT switches to the INCOME PHASE if your ANNUITY PAYMENTS
begin after the 4th year from the date your CONTRACT was issued and you
have chosen an ANNUITY OPTION that provides for a life contingency or is
for a period of at least 5 years; or
o withdrawals of the free amount.
The market value adjustment is determined by comparing the U.S. Treasury
rate which was in effect at the beginning of the GUARANTEE PERIOD for the length
of the GUARANTEE PERIOD selected versus the current U.S. Treasury Rate as of the
date of the withdrawal or transfer for the number of years remaining (rounded
up) plus .005. The U.S. Treasury Rate is the Bloomberg published Treasury rate
found in the Wall Street Journal or on the Bloomberg System, representing the
last trade made in the Treasury market for the applicable maturities related to
the product. In general, if interest rates have dropped between the time you
allocated your money to the GUARANTEE PERIOD and the time you took it out, there
will be a positive adjustment to the value of your CONTRACT. But, if interest
rates have increased between the time you allocated your money to the GUARANTEE
PERIOD and the time you took it out, there will be a negative adjustment.
Appendix B contains more information regarding how Conseco Variable
calculates the market value adjustment, including examples.
TRANSFERS
You can transfer money among the FIXED ACCOUNT, the MVA OPTION and the
INVESTMENT PORTFOLIOS. However, you cannot be invested in more than 15
INVESTMENT PORTFOLIOS, the 3 GUARANTEE PERIODS of the MVA OPTION and/or the
FIXED ACCOUNT at any time.
TRANSFERS DURING THE ACCUMULATION PHASE.
You can make one transfer in a 30-day period during the ACCUMULATION PHASE
without charge. You can make a transfer to or from the FIXED ACCOUNT, the MVA
OPTION and to or from any INVESTMENT PORTFOLIO. Transfers from a GUARANTEE
PERIOD of the MVA OPTION before the end of the period may be subject to an
adjustment. If you make more than one transfer in a 30-day period, a transfer
fee of $25 may be deducted. The following apply to any transfer during the
ACCUMULATION PHASE:
1. The minimum amount which you can transfer is $500 or your entire value
in the INVESTMENT PORTFOLIO, or $2,000 into any GUARANTEE PERIOD of the MVA
OPTION or FIXED ACCOUNT. This requirement is waived if the transfer is pursuant
to the dollar cost averaging or rebalancing programs.
2. You must leave at least $500 in each INVESTMENT PORTFOLIO, GUARANTEE
PERIOD of the MVA OPTION or the FIXED ACCOUNT after you make a transfer unless
the entire amount is being transferred. Transfers out of the FIXED ACCOUNT are
limited to 20% of the value of your CONTRACT every 6 months.
3. Your request for a transfer must clearly state which INVESTMENT
PORTFOLIO(S), the GUARANTEE PERIOD of the MVA OPTION or the FIXED ACCOUNT are
involved in the transfer.
4. Your request for transfer must clearly state how much the transfer is
for.
TRANSFERS DURING THE INCOME PHASE.
You can only make two transfers every year during the INCOME PHASE. The two
transfers are free. We measure a year from the anniversary of the day we issued
your CONTRACT. The following apply to any transfer during the INCOME PHASE:
1. You can make transfers at least 30 days before the due date of the first
ANNUITY PAYMENT for which the transfer will apply.
2. The minimum amount which you can transfer is $500 or your entire value
in the INVESTMENT PORTFOLIO.
3. You must leave at least $500 in each INVESTMENT PORTFOLIO (or $0 if you
are transferring the entire amount) after a transfer.
4. No transfers can be made between the FIXED ACCOUNT and the INVESTMENT
PORTFOLIOS. You may only make transfers between the INVESTMENT PORTFOLIOS.
This product is not designed for professional market timing organizations.
Conseco Variable reserves the right to modify the transfer privileges described
above.
TELEPHONE TRANSFERS. You can elect to make transfers by telephone. You can
also authorize someone else to make transfers for you. If you own the CONTRACT
with a JOINT OWNER, unless Conseco Variable is instructed otherwise, Conseco
Variable will accept instructions from either you or the other OWNER. Conseco
Variable will use reasonable procedures to confirm that instructions given us by
telephone are genuine. All telephone calls will be recorded and the caller will
be asked to produce personalized data about the OWNER before we will make the
telephone transfer. We will send you a written confirmation of the transfer. If
Conseco Variable fails to use such procedures, we may be liable for any losses
due to unauthorized or fraudulent instructions.
DOLLAR COST AVERAGING PROGRAM
The Dollar Cost Averaging Program allows you to systematically transfer a
set amount either monthly, quarterly, semi-annually or annually from the Money
Market Portfolio or the FIXED ACCOUNT to any of the other INVESTMENT
portfolio(s). You cannot transfer to the MVA OPTION under this program. 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.
You must have at least $2,000 in the Money Market Portfolio or the FIXED
ACCOUNT in order to participate in the Dollar Cost Averaging Program.
All Dollar Cost Averaging transfers will be made on the first business day
of the month. Dollar Cost Averaging must be for 36-60 months. Dollar Cost
Averaging will end when the value in the Money Market Portfolio or the FIXED
ACCOUNT is zero. We will notify you when that happens.
If you participate in the Dollar Cost Averaging Program, the transfers made
under the program are not taken into account in determining any transfer fee.
REBALANCING PROGRAM
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 $5,000, you can direct us to automatically
rebalance your CONTRACT to return to your original percentage allocations by
selecting our Rebalancing Program. You can tell us whether to rebalance
quarterly, semi-annually or annually. We will measure these periods from the
date you selected. You must use whole percentages in 1% increments for
rebalancing. There will be no rebalancing within the FIXED ACCOUNT or the MVA
OPTION. You can discontinue rebalancing at any time. You can change your
rebalancing requests at any time in writing which we must receive before the
next rebalancing date. If you participate in the Rebalancing Program, 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 Corporate Bond Portfolio and
60% to be in Growth 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 Corporate Bond 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, Conseco Variable
would sell some of your units in the Corporate Bond Portfolio to bring its value
back to 40% and use the money to buy more units in the Growth Portfolio to
increase those holdings to 60%.
ASSET ALLOCATION PROGRAM
We understand the importance to you of having advice from a financial
adviser regarding your investments in the CONTRACT (asset allocation program).
Certain investment advisers have made arrangements with us to make their
services available to you. Conseco Variable has not made any independent
investigation of these advisers and is not endorsing such programs. You may be
required to enter into an advisory agreement with your investment adviser to
have the fees paid out of your CONTRACT during the ACCUMULATION PHASE.
Conseco Variable will, pursuant to an agreement with you, make a partial
withdrawal from the value of your CONTRACT to pay for the services of the
investment adviser. If the CONTRACT is NON-QUALIFIED, the withdrawal will be
treated like any other distribution and may be included in gross income for
federal tax purposes. Further, if you are under age 59 1/2, it may be subject to
a tax penalty. If the CONTRACT is QUALIFIED, the withdrawal for the payment of
fees may not be treated as a taxable distribution if certain conditions are met.
Additionally, any withdrawals for this purpose may be subject to a contingent
deferred sales charge. You should consult a tax adviser regarding the tax
treatment of the payment of investment adviser fees from your CONTRACT.
SWEEP PROGRAM
You can elect to transfer (sweep) your earnings from the FIXED ACCOUNT to
the INVESTMENT PORTFOLIOS on a periodic and systematic basis.
VOTING RIGHTS
Conseco Variable is the legal OWNER of the INVESTMENT PORTFOLIO shares.
However, Conseco Variable 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. Should Conseco Variable determine that it is no longer
required to comply with the above, we will vote the shares in our own right.
SUBSTITUTION
Conseco Variable may, in the interest of shareholders, deem it necessary to
discontinue one or more of the INVESTMENT PORTFOLIOS or substitute a new might
occur, we will notify you in advance. We will obtain prior approval by the
Securities and Exchange Commission before any such change is made.
5. EXPENSES
There are charges and other expenses associated with the CONTRACT that
reduce the return on your investment in the CONTRACT. These charges and expenses
are:
INSURANCE CHARGES
Each day, Conseco Variable makes a deduction for its insurance charges.
Conseco Variable does this as part of its calculation of the value of the
ACCUMULATION UNITS and the ANNUITY UNITS.
The insurance charge has two parts: 1) the mortality and expense risk
charge and 2) the administrative charge.
o MORTALITY AND EXPENSE RISK CHARGE. This charge is equal, on an annual
basis, to 1.25% of the average daily value of the CONTRACT invested in an
INVESTMENT PORTFOLIO, after expenses have been deducted. This charge is for
the insurance benefits provided under the CONTRACT and certain
administrative and distribution expenses associated with the CONTRACT.
o ADMINISTRATIVE CHARGE. This charge is equal, on an annual basis, to .15% of
the average daily value of the CONTRACT invested in an INVESTMENT
PORTFOLIO, after expenses have been deducted. This charge may be increased
but will not exceed .25% of the average daily value of the CONTRACT
invested in an INVESTMENT PORTFOLIO, after expenses have been deducted. We
will give you 60 days' notice if this charge is increased. This charge is
for certain administrative expenses.
CONTRACT MAINTENANCE CHARGE
During the ACCUMULATION PHASE, every year on the anniversary of the date
when your CONTRACT was issued, Conseco Variable deducts $30 from your CONTRACT
as a contract maintenance charge. We reserve the right to change this charge but
it will not be more than $60 each year. No contract maintenance charge is
deducted during the INCOME PHASE. This charge is for certain administrative
expenses associated with the CONTRACT.
Under current practices, Conseco Variable does not deduct this charge if
the value of your CONTRACT is $50,000 or more. Conseco Variable 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. The charge will be deducted if the
ANNUITY DATE is other than an anniversary.
CONTINGENT DEFERRED SALES CHARGE
During the ACCUMULATION PHASE, you can make withdrawals from your CONTRACT.
Conseco Variable keeps track of each PURCHASE PAYMENT.
Every year you can take money out of your CONTRACT, without charge, of an
amount equal to the greater of:
o 10% of the value of your CONTRACT (on a non-cumulative basis), or
o the IRS minimum distribution requirement for this CONTRACT if it was issued
under an Individual Retirement Annuity, or
o the total of your PURCHASE PAYMENTS that have been in the CONTRACT more
than 7 complete years. Withdrawals in excess of these amounts will be
charged a contingent deferred sales charge which equals:
NO. OF YEARS CONTINGENT
FROM RECEIPT DEFERRED SALES
OF PURCHASE PAYMENT CHARGE
================================================================
First Year........................................ 7%
Second Year....................................... 7%
Third Year........................................ 6%
Fourth Year....................................... 5%
Fifth Year........................................ 4%
Sixth Year........................................ 3%
Seventh Year...................................... 2%
Eighth Year and more.............................. 0%
In addition, the following circumstances further limit or reduce withdrawal
charges:
o for issue ages up to 52, there is no contingent deferred sales charge made
after the 15th CONTRACT year and later;
o for issue ages 53 to 56, there is no contingent deferred sales charge made
after you attain age 67 or later;
o for issue ages 57 and later, any otherwise applicable contingent deferred
sales charge will be multiplied by a factor ranging from .9 to 0 for
CONTRACT years one through ten and later, respectively.
The contingent deferred sales charge is assessed against each PURCHASE
PAYMENT withdrawn and will reduce the remaining value of your CONTRACT. The
contingent deferred sales charge compensates us for expenses associated with
selling the CONTRACT.
Withdrawals from a GUARANTEE PERIOD of the MVA OPTION may also be subject
to a market value adjustment. (See Appendix B for information on the market
value adjustment.)
NOTE: For tax purposes, withdrawals are generally considered to have come
from earnings first.
Conseco Variable does not assess the contingent deferred sales charge on
death benefits or on any payments paid out as ANNUITY PAYMENTS if your ANNUITY
DATE is at least four years after we issue your CONTRACT and your ANNUITY OPTION
has a life contingency or is for a minimum of 5 years.
REDUCTION OR ELIMINATION OF THE CONTINGENT DEFERRED SALES CHARGE
Conseco Variable will reduce or eliminate the amount of the contingent
deferred sales charge when the CONTRACT is sold under circumstances which reduce
its sales expenses. 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 Conseco Variable. Conseco Variable will not deduct a
contingent deferred sales charge when a CONTRACT is issued to an officer,
director or employee or Conseco Variable or any of its affiliates. Any
circumstances resulting in the reduction or elimination of the contingent
deferred sales charge requires our prior approval. In no event will elimination
of the contingent deferred sales charge be permitted where it would be unfairly
discriminatory to any person.
TRANSFER FEE
You can make one free transfer every 30 days during the ACCUMULATION PHASE.
If you make more than one transfer in a 30-day period, you could be charged a
transfer fee of $25 per transfer. We reserve the right to change the transfer
fee. The transfer fee is deducted from the account from which the transfer was
made. If the entire amount in the account is transferred, the fee will be
deducted from the amount transferred. If you transfer money from more than one
account, the charge is deducted from the account with the largest balance. The
two transfers permitted each year during the INCOME PHASE are free.
All reallocations made in the same day count as one transfer. Transfers
made at the end of the free look period by us are not counted in determining the
transfer fee. If the transfer is part of the Dollar Cost Averaging Program, the
Rebalancing Program or the Sweep Program it will not count in determining the
transfer fee.
Transfers from a GUARANTEE PERIOD of the MVA OPTION may also be subject to
a market value adjustment. (See Appendix B for information on the market value
adjustment.)
PREMIUM TAXES
Some states and other governmental entities (e.g., municipalities) charge
premium taxes or similar taxes. Conseco Variable is responsible for the payment
of these taxes and will make a deduction from the value of the CONTRACT for
them. These taxes are due either when the CONTRACT is issued or when ANNUITY
PAYMENTS begin. It is Conseco Variable's current practice to deduct these taxes
when either ANNUITY PAYMENTS begin or upon partial or full surrender of the
CONTRACT. Conseco Variable may in the future discontinue this practice and
assess the charge when the tax is due. Premium taxes currently range from 0% to
3.5%, depending on the jurisdiction.
INCOME TAXES
Conseco Variable 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: Conseco Variable 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. Conseco Variable 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 a trust holding the CONTRACT as
an agent for a natural person), 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 under 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 generally 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 you reach age 59 1/2;
(2) paid after you die;
(3) paid if you become totally disabled (as that term is defined in the
Code);
(4) paid in a series of substantially equal payments made annually (or
more frequently) for life or a period not exceeding life expectancy;
(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
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. Conseco Variable believes that the INVESTMENT PORTFOLIOS are
being managed so as to comply with the requirements.
INVESTOR CONTROL
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 Conseco
would be considered the OWNER of the shares of the INVESTMENT PORTFOLIOS. If you
are considered the owner of the shares, 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 without being considered the owner of the
shares. 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, Conseco Variable reserves the right to
modify the CONTRACT as reasonably deemed necessary to maintain favorable tax
treatment.
7. ACCESS TO YOUR MONEY
You can have access to the money in your CONTRACT:
o by making a withdrawal (either a partial or a complete withdrawal);
o by electing to receive ANNUITY PAYMENTS; or
o 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 contingent
deferred sales charge, less any premium tax less, any contract maintenance
charge and plus or minus any market value adjustment (which may be positive or
negative). (See Section 5--Expenses for a discussion of the charges and Section
4--Investment Options--The MVA OPTION and Appendix B for a discussion of
withdrawals from the MVA OPTION.)
You must tell us which account (INVESTMENT PORTFOLIO(s), GUARANTEE PERIODS
of the MVA OPTION and/or the FIXED ACCOUNT) you want the withdrawal to come
from. Under most circumstances, the amount of any partial withdrawal from any
INVESTMENT PORTFOLIO, GUARANTEE PERIOD of the MVA OPTION or the FIXED ACCOUNT
must be for at least $500. Conseco Variable requires that after a partial
withdrawal is made there must be at least $500 left in your CONTRACT.
Conseco Variable will pay the amount of any withdrawal from the INVESTMENT
PORTFOLIOS within 7 days of your request in good order unless the suspension of
payments or transfers provision (see below) is in effect.
INCOME TAXES, TAX PENALTIES AND CERTAIN RESTRICTIONS MAY APPLY TO ANY
WITHDRAWAL YOU MAKE.
SYSTEMATIC WITHDRAWAL PROGRAM
The Systematic Withdrawal Program allows you to choose to receive your
automatic payments either monthly, quarterly, semi-annually or annually. You
must have at least $5,000 in your CONTRACT to start the program. You cannot take
systematic withdrawals from any GUARANTEE PERIOD of the MVA OPTION. You can
instruct us to withdraw a specific amount which can be a percentage of the value
of your CONTRACT or a dollar amount. The systematic withdrawal program will end
any time you designate. If you make a partial withdrawal outside the program and
the value of your CONTRACT is less than $5,000 the program will automatically
terminate. Conseco Variable does not have any charge for this program, however,
the withdrawal may be subject to a contingent deferred sales charge. For a
discussion of the withdrawal charge, see Section 5-- Expenses.
All systematic withdrawals will be paid on the last business day of the
month (beginning with the first full month after you bought your CONTRACT).
You may not participate in the Systematic Withdrawal Program and the Dollar
Cost Averaging Program at the same time.
INCOME TAXES AND TAX PENALTIES MAY APPLY TO SYSTEMATIC WITHDRAWALS.
SUSPENSION OF PAYMENTS OR TRANSFERS
Conseco Variable may be required to suspend or postpone payments for
withdrawals 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 Conseco Variable 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.
Conseco Variable has reserved the right to defer payment for a withdrawal
or transfer from the FIXED ACCOUNT and/or the MVA ACCOUNT for the period
permitted by law but not for more than six months.
8. PERFORMANCE
Conseco Variable may periodically advertise performance of the annuity
investment in the various INVESTMENT PORTFOLIOS. Conseco Variable 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 insurance charges and the fees and expenses of the
investment portfolio. It does not reflect the deduction of any applicable
contract maintenance charge and contingent deferred sales charge. The deduction
of any applicable contract maintenance charge and contingent deferred sales
charge would reduce the percentage increase or make greater any percentage
decrease. Any advertisement will also include standardized average annual total
return figures which reflect the deduction of the insurance charges, contract
maintenance charge, contingent deferred sales charge and the fees and expenses
of the INVESTMENT PORTFOLIO.
For periods starting prior to the date the CONTRACTS were first offered,
the performance will be based on the historical performance of the corresponding
portfolios, modified to reflect the charges and expenses of the CONTRACT as if
the CONTRACT had been in existence during the period stated in the
advertisement. These figures should not be interpreted to reflect actual
historic performance.
Conseco Variable 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 before ANNUITY PAYMENTS begin, Conseco Variable 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 OWNER dies. The surviving JOINT OWNER will
be treated as the BENEFICIARY.
If death occurs prior to age 90, the amount of the death benefit will be
the greater of:
(1) the value of your CONTRACT at the time Conseco Variable receives proof
of death and a payment election; or
(2) the total PURCHASE PAYMENTS you have made, less any adjusted partial
withdrawals, increased by 5% each year up to the date of death.
Adjusted partial withdrawal means the amount of the partial withdrawal
multiplied by the amount of the death benefit just before the partial
withdrawal divided by the value of your CONTRACT just before the partial
withdrawal. A partial withdrawal is the amount paid to you plus any taxes
withheld less any contingent deferred sales charge.
If death occurs at age 90 or later, the death benefit will be the CONTRACT
value at the time Conseco Variable receives proof of death and a payment
election.
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. If a lump sum payment is elected and
all the necessary requirements are met, the payment will be made within 7 days.
Different rules may apply in the case of an Individual Retirement Annuity.
If you or any JOINT OWNER (who is not the ANNUITANT) dies during the INCOME
PHASE, any remaining payments under the ANNUITY OPTION elected will continue at
least as rapidly as under the method of distribution prior to the death of the
OWNER or JOINT OWNER. If you die during the INCOME PHASE, the BENEFICIARY
becomes the OWNER. If any JOINT OWNER dies during the INCOME PHASE, the
surviving JOINT OWNER, if any, will be treated as the primary BENEFICIARY. Any
other BENEFICIARY on record at the time of death will be treated as a contingent
BENEFICIARY. Different rules may apply in the case of an Individual Retirement
Annuity.
DEATH OF ANNUITANT
If the ANNUITANT, who is not an OWNER or JOINT OWNER, dies during the
ACCUMULATION PHASE, you can name a new ANNUITANT. Unless another 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 the 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
benefit will be paid at least as rapidly as under the method of distribution in
effect at the ANNUITANT'S death.
10. OTHER INFORMATION
CONSECO VARIABLE
Conseco Variable Insurance Company was originally organized in 1937. Prior
to October 7, 1998, Conseco Variable Insurance Company was known as Great
American Reserve Insurance Company. In certain states, we may still use the name
Great American Reserve Insurance Company until our name change is approved in
the state. It is principally engaged in the life insurance business in 49 states
and the District of Columbia. Conseco Variable is a stock company organized
under the laws of the state of Texas and is an indirect wholly-owned subsidiary
of Conseco, Inc. The operations of Conseco Variable Insurance Company are
handled by Conseco, Inc. Conseco, Inc. is a publicly owned financial services
organization headquartered in Carmel, Indiana. Through its subsidiaries,
Conseco, Inc. is one of the nation's leading providers of supplemental health
insurance, retirement annuities and universal life insurance.
THE SEPARATE ACCOUNTS
Conseco Variable has established two separate accounts to hold the assets
that underlie the CONTRACTS. One account, Conseco Variable Annuity Account F,
serves the variable annuity portion of the CONTRACT. Prior to May 1, 1998,
Conseco Variable Annuity Account F was known as Great American Reserve Variable
Annuity Account F. The other separate account, Conseco Market Value Adjustment
Account, serves the portion of the CONTRACT that may be subject to a market
value adjustment. Prior to May 1, 1999, Conseco Market Value Adjustment Account
was known as Great American Reserve Market Value Adjustment Account. The Board
of Directors of Conseco Variable adopted a resolution to establish the Separate
Accounts under Texas Insurance law on September 26, 1997. Conseco Variable
Annuity Account F is registered with the Securities and Exchange Commission as a
unit investment trust under the Investment Company Act of 1940. Conseco Market
Value Adjustment Account is not registered with the Securities and Exchange
Commission.
The assets of the Separate Accounts are held in Conseco Variable's name on
behalf of the Separate Accounts and legally belong to Conseco Variable. However,
those assets that underlie the CONTRACTS, are not chargeable with liabilities
arising out of any other business Conseco Variable 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
Conseco Variable may issue.
DISTRIBUTOR
Conseco Equity Sales, Inc. (CES), 11815 N. Pennsylvania Street, Carmel,
Indiana 46032, acts as the distributor of the CONTRACTS. CES, an affiliate of
Conseco Variable, is registered as a broker-dealer under the Securities Exchange
Act of 1934. CES is a member of the National Association of Securities Dealers,
Inc.
Commissions will be paid to broker-dealers who sell the CONTRACTS.
Broker-dealers commissions may cost up to 8.25% of PURCHASE PAYMENTS and may
include reimbursement of promotional or distribution expenses associated with
the marketing of the CONTRACTS. Conseco Variable may, by agreement with the
broker-dealer, pay commissions as a combination of a certain percentage amount
at the time of sale and a trail commission. This combination may result in the
broker-dealer receiving more commission over time than would be the case if it
had elected to receive only a commission at the time of sale. The commission
rate paid to the broker-dealer will depend upon the nature and level of services
provided by the broker-dealer.
OWNERSHIP
The CONTRACT is a group allocated fixed and variable deferred annuity
CONTRACT. This group CONTRACT is issued to a CONTRACT holder, for the benefit of
the participants in the group. You are a participant in the group and will
receive a certificate evidencing your ownership. You, as the OWNER of a
certificate, are entitled to all the rights and privileges of ownership. As used
in this prospectus, the term CONTRACT refers to your certificate. In some
states, an individual fixed and variable deferred annuity CONTRACT may be
available instead, which is identical to the group CONTRACT described in this
prospectus except that it is issued directly to the OWNER.
Spousal JOINT OWNERS are allowed with this CONTRACT (except if it is issued
pursuant to a QUALIFIED plan). Upon the death of either JOINT OWNER, the
surviving OWNER will be the designated BENEFICIARY. Any other BENEFICIARY
designation at the time the CONTRACT was issued or as may have been later
changed 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 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. Conseco
Variable will not be bound by the assignment until it receives the written
notice of the assignment. Conseco Variable 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 are
limitations on your ability to assign the CONTRACT.
ADDITIONAL INFORMATION
Conseco Variable is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended. In accordance with such
requirements, we file reports and other information with the SEC. Such reports
and other information we file can be inspected and copied. Copies can be
obtained at the public reference facilities of the SEC at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, or at the regional offices in Chicago and
New York. The addresses of these regional offices are as follows: 500 West
Madison Street, Chicago, Illinois 60661 and 7 World Trade Center, 13th Floor,
New York, New York 10048. Copies of such material also can be obtained by mail
from the Public Reference Section of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549, upon payment of the fees prescribed by the rules and
regulations of the SEC at prescribed rates.
Registration statements have been filed with the SEC, Washington, D.C.,
under the Securities Act of 1933 as amended, relating to the CONTRACTS offered
by this prospectus. This prospectus does not contain all the information set
forth in the registration statements and the exhibits filed as part of the
registration statements. Reference should be made to such registration
statements and exhibits for further information concerning the Separate
Accounts, Conseco Variable and its general account, the INVESTMENT PORTFOLIOS
and the CONTRACT.
SELECTED HISTORICAL FINANCIAL INFORMATION OF CONSECO VARIABLE
[INFORMATION TO BE INCLUDED IN 485(b) POST-EFFECTIVE AMENDMENT]
BUSINESS OF CONSECO VARIABLE
[INFORMATION TO BE INCLUDED IN 485(b) POST-EFFECTIVE AMENDMENT]
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS OF CONSECO VARIABLE
[INFORMATION TO BE INCLUDED IN 485(b) POST-EFFECTIVE AMENDMENT]
DIRECTORS AND EXECUTIVE OFFICERS
Conseco Variable's directors and executive officers as of ___________, 1999 are
listed below:
<TABLE>
<CAPTION>
PRINCIPAL BUSINESS OCCUPATION
NAME DURING LAST FIVE YEARS
- - ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Ngaire E. Cuneo Since 1992, Executive Vice President, Corporate Development of Conseco, Inc. and various positions with
(Age 47) certain of its affiliates. Director of Conseco Variable.
Stephen C. Hilbert Since 1979, Chairman of the Board, Chief Executive Officer and Director and since 1988 President of Conseco,
(Age 52) Inc. Director and Chairman of the Board of Conseco Variable.
Rollin M. Dick Since 1986, Executive Vice President, Chief Financial Officer and Director of Conseco, Inc.
(Age 66) Director and Executive Vice President and Chief Financial Officer of Conseco Variable.
Thomas J. Kilian Since 1998, Executive Vice President, Chief Operations Officer of Conseco, Inc. and from 1989 until 1998 Senior
(Age 46) Vice President of various subsidiaries of Conseco, Inc. Director and President of Conseco Variable.
John J. Sabl Since 1997, Executive Vice President, General Counsel and Secretary of Conseco, Inc. Prior thereto, Mr. Sabl
(Age 46) was a partner in the law firm of Sidley & Austin in Chicago, Illinois. Director and Executive Vice President,
General Counsel and Secretary of Conseco Variable.
James S. Adams Since 1997, Senior Vice President, Chief Accounting Officer and Treasurer of Conseco, Inc. Since 1989,
(Age 39) Senior Vice President of various subsidiaries of Conseco, Inc. Senior Vice President and Treasurer of Conseco
Variable.
</TABLE>
EXECUTIVE COMPENSATION
Conseco Variable has no full-time employees and does not compensate any
employee, officer or director of Conseco Variable.
INDEPENDENT ACCOUNTANTS
The financial statements of Conseco Variable as of December 31, 1998 and
1997 and for the years ended December 31, 1998, 1997 and 1996, included in this
prospectus, have been audited by _________________________, independent
accountants, as set forth in their report appearing herein.
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 described in this prospectus.
FINANCIAL STATEMENTS
The financial statements of Conseco Variable which are included in this
prospectus should be considered only as bearing on the ability of Conseco
Variable to meet its obligations under the CONTRACTS. They should not be
considered as bearing on the investment performance of the INVESTMENT
PORTFOLIOS. The value of the INVESTMENT PORTFOLIOS is affected primarily by the
performance of the underlying investments.
[FINANCIAL STATEMENTS WILL BE INCLUDED IN 485(b) POST-EFFECTIVE AMENDMENT]
TABLE OF CONTENTS OF THE STATEMENT OF
ADDITIONAL INFORMATION
Company
Independent Accountants
Legal Opinions
Distribution
Calculation of Performance Information
Federal Tax Status
Annuity Provisions
Financial Statements
APPENDIX A-CONDENSED FINANCIAL INFORMATION
Accumulation Unit Value History
The following schedule includes ACCUMULATION UNIT values for the period
indicated. This data has been taken from the Conseco Variable Annuity Account
F's financial statements. This information should be read in conjunction with
Conseco Variable Annuity Account F's financial statements and related notes
which are included in the Statement of Additional Information.
Period Ended
Sub-Account 12/31/98
- ------------ -------------
Asset Allocation
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Common Stock
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Corporate Bond
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Government Securities
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Money Market
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Alger American Growth
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Alger American Leveraged AllCap
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Alger American MidCap Growth
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Alger American Small Capitalization
Beginning of Period
End of Period
No. of Accum. Units Outstanding
VP Income & Growth
Beginning of Period
End of Period
No. of Accum. Units Outstanding
VP International
Beginning of Period
End of Period
No. of Accum. Units Outstanding
VP Value
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Berger IPT--100
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Berger IPT--Growth and Income
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Berger IPT--Small Company Growth
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Berger/BIAM IPT--International
Beginning of Period
End of Period
No. of Accum. Units Outstanding
The Dreyfus Socially Responsible Growth
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Dreyfus Stock Index
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Disciplined Stock
Beginning of Period
End of Period
No. of Accum. Units Outstanding
International Value
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Federated High Income Bond II
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Federated International Equity II
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Federated Utility II
Beginning of Period
End of Period
No. of Accum. Units Outstanding
INVESCO VIF - High Yield
Beginning of Period
End of Period
No. of Accum. Units Outstanding
INVESCO VIF-Industrial Income
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Aggressive Growth
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Growth
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Worldwide Growth
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Lazard Retirement Equity
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Lazard Retirement Small Cap
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Growth and Income (Lord Abbett)
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Growth and Income (Mitchell Hutchins)
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Limited Maturity Bond
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Partners
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Opportunity II
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Growth II
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Worldwide Bond
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Worldwide Emerging Markets
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Worldwide Hard Assets
Beginning of Period
End of Period
No. of Accum. Units Outstanding
Worldwide Real Estate
Beginning of Period
End of Period
No. of Accum. Units Outstanding
APPENDIX B-MARKET VALUE ADJUSTMENT
The market value adjustment reflects the impact that changing interest
rates have on the value of your money in a GUARANTEE PERIOD of the MVA OPTION.
The longer the period of time remaining in the term you selected, the greater
the impact of changing interest rates. The market value adjustment can be
positive or negative. We will apply the following factor to amounts withdrawn,
transferred or annuitized from a GUARANTEE PERIOD in excess of the MVA waiver
amount (see below):
((1 + A)/(1 + B)^N/365-1
where:
A is the U.S. Treasury rate that is in effect at the beginning of the
GUARANTEE PERIOD for the length of the GUARANTEE PERIOD you selected.
B is the current U.S. Treasury rate as of the date of the withdrawal or
transfer plus .005. The Treasury rate period is determined by N/365 rounded to
the next highest year.
N is the number of days remaining in the GUARANTEE PERIOD.
If the Treasury rate is not available for the period, the rate will be
determined by interpolation. If no Treasury rates are available, an index will
be selected by Conseco Variable which will be approved by the state insurance
commissioners.
MVA Waiver Amount: After the first year in a GUARANTEE PERIOD, you can make
one withdrawal or transfer from a GUARANTEE PERIOD each year of up to 10% of the
value in that GUARANTEE PERIOD without the market value adjustment.
EXAMPLES OF THE MARKET VALUE ADJUSTMENT:
EXAMPLE 1: FIVE-YEAR GUARANTEE PERIOD; INCREASE IN TREASURY RATE
Assume you make a $50,000 payment allocated to a 5-year GUARANTEE PERIOD on
January 1, 1998. The current 5-year Treasury rate is 6.00%, and the current
interest rate is 7.00%. On June 13, 1999 you surrender the CONTRACT with 3 years
and 202 days, or 1,297 days (12/31/2002-6/13/1999) remaining in the GUARANTEE
PERIOD. The current Treasury rate at this point is found by rounding 3 years,
202 days to the next greatest year and taking the rate for that GUARANTEE
PERIOD. In this case, we would look at the 4-year rate. Assume that the 4-year
Treasury rate on June 13, 1999 is 6.50%. The market value adjustment would be
calculated as follows:
CONTRACT value at 6/13/1999 (529 days from the day your CONTRACT was issued):
$50,000 x [1.07^(529/365)] = $55,151.38
MVA Waiver Amount: $ 5,515.14 (10% after year 1)
Amount remaining: $49,636.24
$49,636.24 x [((1+.06)/(1+.065+.005)) ^ (1,297/365)-1] = -$1,628.83
resulting in an adjustment to the amount you withdraw as follows:
$49,636.24 - $1,628.83 + $5,515.14 = $53,522.55
EXAMPLE 2: FIVE-YEAR GUARANTEE PERIOD; DECREASE IN TREASURY RATE
Assuming the same facts as Example 1, but with a 4-year Treasury rate as of
the date of surrender of 5.00%, the following market value adjustment would
result:
CONTRACT value at 6/13/1999 (529 days from the day your CONTRACT was
issued):
$50,000 x [1.07^(529/365)] = $55,151.38
MVA Waiver Amount: $5,515.14 (10% after 1 year)
Amount remaining: $49,636.24
$49,636.24 x [((1+.06)/(1+.050+.005)) ^ (1,297/365)-1] = $840.99
resulting in an adjustment to the amount you withdraw as follows:
$49,636.24 + $840.99 + $5,515.14 = $55,992.37
(contingent deferred sales charges may also apply)
================================================================================
If you would like a free copy of the Statement of Additional Information
dated May 1, 1999, for this prospectus, please complete this form, detach, and
mail to:
Conseco Variable Insurance Company
Administrative Office
11815 N. Pennsylvania Street
Carmel, Indiana 46032
Please send me a free copy of the Statement of Additional Information for the
Conseco Variable Annuity Account F fixed and variable annuity at the following
address:
Name: _________________________________________________
Mailing Address: _______________________________________
_________________________________________________________
Sincerely,
_________________________________________________________
(Signature)
- ------------------------------------------------------------------------------
==============================================================================
Conseco Variable Insurance Company
11815 N. Pennsylvania Street
Carmel, Indiana 46032
c 1999, CONSECO VARIABLE INSURANCE COMPANY 05-8318 (5/99)
STATEMENT OF ADDITIONAL INFORMATION
INDIVIDUAL AND GROUP FIXED AND
VARIABLE DEFERRED ANNUITY CONTRACTS
issued by
CONSECO VARIABLE ANNUITY ACCOUNT F
(formerly Great American Reserve Variable Annuity Account F)
and
CONSECO VARIABLE INSURANCE COMPANY
(formerly Great American Reserve Insurance Company)
THIS IS NOT A PROSPECTUS. THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD BE
READ IN CONJUNCTION WITH THE PROSPECTUS DATED MAY 1, 1999, FOR THE INDIVIDUAL
AND GROUP FIXED AND VARIABLE DEFERRED ANNUITY CONTRACTS WHICH ARE DESCRIBED
HEREIN.
THE PROSPECTUS CONCISELY SETS FORTH INFORMATION THAT A PROSPECTIVE INVESTOR
OUGHT TO KNOW BEFORE INVESTING. FOR A COPY OF THE PROSPECTUS CALL US AT (800)
342-6307 OR WRITE US AT OUR ADMINISTRATIVE OFFICE: 11815 N. PENNSYLVANIA STREET,
CARMEL, INDIANA 46032.
THIS STATEMENT OF ADDITIONAL INFORMATION IS DATED MAY 1, 1999.
CONSECO
1999 Account F
Individual and Group Annuity
================================================================================
TABLE OF CONTENTS
PAGE
COMPANY...................................................................
INDEPENDENT ACCOUNTANTS...................................................
LEGAL OPINIONS............................................................
DISTRIBUTION..............................................................
Reduction or Elimination of the Contingent Deferred Sales Charge......
CALCULATION OF PERFORMANCE INFORMATION....................................
Total Return..........................................................
Performance Information...............................................
Historical Unit Values................................................
Reporting Agencies....................................................
FEDERAL TAX STATUS........................................................
General...............................................................
Diversification.......................................................
Multiple Contracts....................................................
Contracts Owned by Other than Natural Persons.........................
Tax Treatment of Assignments..........................................
Income Tax Withholding................................................
Tax Treatment of Withdrawals - Non-Qualified Contracts................
Individual Retirement Annuities.......................................
Roth IRAs.............................................................
Tax Treatment of Withdrawals - Individual Retirement Annuities........
ANNUITY PROVISIONS........................................................
Variable Annuity Payout...............................................
Annuity Unit..........................................................
Fixed Annuity Payout..................................................
FINANCIAL STATEMENTS .....................................................
=============================================================================
COMPANY
Information regarding Conseco Variable Insurance Company ("Company" or
"Conseco Variable") is contained in the prospectus. On October 7, 1998, the
Company changed its name from Great American Reserve Insurance Company to its
present name.
INDEPENDENT ACCOUNTANTS
The financial statements of Conseco Variable as of December 31, 1998 and
1997, and for the years ended December 31, 1998, 1997 and 1996, included in the
prospectus, have been audited by __________________________, independent
accountants, as set forth in their report appearing therein.
LEGAL OPINIONS
Blazzard, Grodd & Hasenauer, P.C. of Westport, Connecticut has provided
advice on certain matters relating to the federal securities and income tax laws
in connection with the Contracts described in the prospectus.
DISTRIBUTION
Conseco Equity Sales, Inc., an affiliate of the Company, acts as the
distributor. The offering is on a continuous basis.
REDUCTION OR ELIMINATION OF THE CONTINGENT DEFERRED SALES CHARGE
The amount of the Contingent Deferred Sales Charge on the Contracts may be
reduced or eliminated when sales of the Contracts are made to individuals or to
a group of individuals in a manner that results in savings of sales expenses.
The entitlement to reduction of the Contingent Deferred Sales Charge will be
determined by the Company after examination of all the relevant factors such as:
1. The size and type of group to which sales are to be made will be
considered. Generally, the sales expenses for a larger group are less than for a
smaller group because of the ability to implement large numbers of Contracts
with fewer sales contacts.
2. The total amount of purchase payments to be received will be considered.
Per Contract sales expenses are likely to be less on larger purchase payments
than on smaller ones.
3. Any prior or existing relationship with the Company will be considered.
Per Contract sales expenses are likely to be less when there is a prior existing
relationship because of the likelihood of implementing the Contract with fewer
sales contacts.
4. There may be other circumstances, of which the Company is not presently
aware, which could result in reduced sales expenses.
If, after consideration of the foregoing factors, the Company determines
that there will be a reduction in sales expenses, the Company may provide for a
reduction or elimination of the Contingent Deferred Sales Charge.
The Contingent Deferred Sales Charge may be eliminated when the Contracts
are issued to an officer, director or employee of the Company or any of its
affiliates. In no event will any reduction or elimination of the Contingent
Deferred Sales Charge be permitted where the reduction or elimination will be
unfairly discriminatory to any person.
CALCULATION OF PERFORMANCE INFORMATION
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 standardized average annual total
return figures for the time periods indicated in the advertisement. Such total
return figures will reflect the deduction of a 1.25% Mortality and Expense Risk
Charge, a .15% Administrative Charge, the expenses for the underlying investment
portfolio being advertised and any applicable Contract Maintenance Charges and
Contingent Deferred Sales Charges.
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 Contract Maintenance Charge and Contingent Deferred Sales Charge. The
deduction of any Contract Maintenance Charge and Contingent Deferred Sales
Charge would reduce any percentage increase or make greater any percentage
decrease.
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 Contingent
Deferred Sales 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:
P (1 + T)^n = ERV
Where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value 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.
You 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 your total return may be in any future period.
Performance Information
The Contracts are relatively new and therefore do not have a meaningful
investment performance history. However, the corresponding Portfolios have been
in existence for some time and consequently have investment performance history.
In order to demonstrate how the actual investment experience of the Portfolios
affects Accumulation Unit values, the Company may develop performance
information. The information will be based upon the historical experience of the
Portfolios and will be for the periods shown.
Actual performance will vary and the results which may be shown are not
necessarily representative of future results. Performance for periods ending
after those shown may vary substantially. The performance of the Accumulation
Units will be calculated for a specified period of time assuming an initial
Purchase Payment of $1,000 allocated to each Portfolio and a deduction of all
charges and deductions (see "Expenses" in the Prospectus for more information).
Performance may also be shown without certain charges being included. If
the charges were included in the calculations, the performance would be lower.
The percentage increases are determined by subtracting the initial Purchase
Payment from the ending value and dividing the remainder by the beginning value.
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.
FEDERAL TAX STATUS
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.
GENERAL
Section 72 of the Internal Revenue Code of 1986, as amended ("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.
Regulations issued by the Treasury Department ("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. For purposes of this rule, contracts received in a
Section 1035 exchange will be considered issued in the year of the exchange.
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. You should
therefore consult competent tax advisers should they wish to assign or pledge
your Contract.
If the Contract is issued pursuant to a retirement plan which receives
favorable treatment under the provision of Section 408 of the Code, it may not
be assigned, pledged or otherwise transferred except as allowed under applicable
law.
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 many cases, may
elect not to have taxes withheld or to have withholding done at a different
rate.
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 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 you reach age 59 1/2; (b) after your death; (c) if you
become 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 your life (or life expectancy) or for
the joint lives (or joint life expectancies) of you and your Beneficiary; (e)
under an immediate annuity; or (f) which are allocable to purchase payments made
prior to August 14, 1982.
With respect to (d) above, if the series of substantially equal periodic
payments is modified before the later of your attaining age 59 1/2 or 5 years
from the date of the first periodic payment, then the tax for the year of the
modification is increased by an amount equal to the tax which would have been
imposed (the 10% penalty tax) but for the exception, plus interest for the tax
years in which the exception was used.
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 - Individual Retirement Annuities"
below.)
INDIVIDUAL RETIREMENT ANNUITIES
The Contracts offered by the prospectus are designed to be suitable for use
as an Individual Retirement Annuity (IRA). Generally, individuals who purchase
IRAs are not taxed on increases to the value of the contributions until
distribution occurs. Following is a general description of IRAs with which the
Contract may be used. The description is not exhaustive and is for general
informational purposes only.
Section 408(b) of the Code permits eligible individuals to contribute to an
individual retirement program known as an IRA. Under applicable limitations,
certain amounts may be contributed to an IRA which will be deductible from the
individual's taxable income. These IRAs are subject to limitations on
eligibility, contributions, transferability and distributions. (See "Tax
Treatment of Withdrawals - Individual Retirement Annuities" 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.
ROTH IRAs
Section 408A of the Code provides that beginning in 1998, individuals may
purchase a new type of non-deductible IRA, known as a Roth IRA. Purchase
payments for a Roth IRA are limited to a maximum of $2,000 per year and are not
deductible from taxable income. Lower maximum limitations may apply to
individuals with adjusted gross incomes between $95,000 and $110,000 in the case
of single taxpayers, between $150,000 and $160,000 in the case of married
taxpayers filing joint returns, and between $0 and $10,000 in the case of
married taxpayers filing separately. An overall $2,000 annual limitation
continues to apply to all of a taxpayer's IRA contributions, including Roth IRAs
and non-Roth IRAs.
Qualified distributions from Roth IRAs are free from federal income tax. A
qualified distribution requires that an individual has held a Roth IRA for at
least five taxable years and, in addition, that the distribution is made; (i)
after the individual reaches age 59 1/2, (ii) on the individual's death or
disability, or (iii) as a qualified first-time home purchase (subject to a
$10,000 lifetime maximum) for the individual, a spouse, child, grandchild, or
ancestor. Any distribution which is not a qualified distribution is taxable to
the extent of earnings in the distribution. Distributions are treated as made
from contributions first and therefore no distributions are taxable until
distributions exceed the amount of contributions and conversions to the Roth
IRA. The 10% penalty tax and the regular IRA exceptions to the 10% penalty tax
apply to taxable distributions from a Roth IRA.
Amounts may be rolled over from one Roth IRA to another Roth IRA.
Furthermore, an individual may make a rollover contribution from a non-Roth IRA
to a Roth IRA ("conversion deposits"), unless the individual has adjusted gross
income over $100,000 or the individual is a married taxpayer filing a separate
return. The individual must pay tax on any portion of the IRA being rolled over
that represents income or a previously deductible IRA contribution. However, for
rollovers in 1998, the individual may pay that tax ratably over the four taxable
year period beginning with tax year 1998. In addition, distribution of amounts
attributable to conversion deposits held for less than 5 taxable years will also
be subject to the penalty tax.
Purchasers of Contracts intended to be qualified as a Roth IRA should
obtain competent tax advice as to the tax treatment and suitability of such an
investment.
TAX TREATMENT OF WITHDRAWALS - INDIVIDUAL RETIREMENT ANNUITIES
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 and 408A (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 tax penalty will not apply to the following distributions: (a)
if distribution is made on or after the date on which the Owner reaches age 59
1/2; (b) distributions following the death or disability of the Owner (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 Owner or
the joint lives (or joint life expectancies) of such Owner and his or her
designated Beneficiary; (d) distributions made to the Owner to the extent such
distributions do not exceed the amount allowable as a deduction under Code
Section 213 to the Owner for amounts paid during the taxable year for medical
care; (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 and his or her spouse and dependents if the Owner has received
unemployment compensation for at least 12 weeks (this exception will no longer
apply after the Owner has been re-employed for at least 60 days); (f)
distributions made to the Owner to the extent such distributions do not exceed
the qualified higher education expenses (as defined in Section 72(t)(7) of the
Code) of the Owner for the taxable year; and (g) distributions up to $10,000
made to the Owner which are qualified first-time home buyer distributions (as
defined in Section 72(t)(8) of the Code). With respect to (c) above, if the
series of substantially equal periodic payments is modified before the later of
your attaining age 59 1/2 or 5 years from the date of the first periodic
payment, then the tax for the year of the modification is increased by an amount
equal to the tax which would have been imposed (the 10% penalty tax) but for the
exception, plus interest for the tax years in which the exception was used.
MANDATORY DISTRIBUTIONS - INDIVIDUAL RETIREMENT ANNUITIES
Generally, distributions from an IRA must begin no later than April 1st of
the calendar year following the year in which the participant 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
The Company makes available payment plans on a fixed and variable basis.
VARIABLE ANNUITY PAYOUT
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. Annuity payments also
depend upon the age of the annuitant and any joint annuitant and the assumed
interest factor utilized. The Annuity Table used will depend upon the annuity
option chosen. The dollar amount of annuity payments after the first is
determined as follows:
1. The dollar amount of the first variable annuity payment is divided by
the value of an annuity unit for each investment portfolio as of the annuity
date. This sets the number of annuity units for each monthly payment for the
applicable investment portfolio.
2. The fixed number of annuity units for each payment in each investment
portfolio is multiplied by the annuity unit value for that investment portfolio
for the last valuation period of the month preceding the month for which the
payment is due. This result is the dollar amount of the payment for each
applicable investment portfolio.
The total dollar amount of each variable annuity payment is the sum of all
variable annuity payments reduced by the applicable portion of the Contract
Maintenance Charge.
ANNUITY UNIT
The value of an annuity unit was arbitrarily set initially at $10. The
annuity unit value at the end of any subsequent valuation period is determined
as follows:
1. The net investment factor for the current valuation period is multiplied
by the value of the annuity unit for the immediately preceding valuation period.
2. The result in (1) is then divided by the assumed investment rate factor
which equals 1.00 plus the assumed investment rate for the number of days
assumed investment rate.
FIXED ANNUITY PAYOUT
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 investment portfolios. The dollar amount of each fixed annuity payment is
determined in accordance with Annuity Tables contained in the Contract.
FINANCIAL STATEMENTS
The financial statements of the Company included in the prospectus should
be considered only as bearing upon the ability of the Company to meet its
obligations under the Contracts.
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
A. FINANCIAL STATEMENTS
The financial statements of the Separate Account and Conseco Variable Insurance
Company (the "Company") will be filed by amendment.
B. EXHIBITS
1. Resolution of Board of Directors of the Company authorizing the
establishment of the Separate Account.*
2. Not Applicable.
3. (i) Form of Principal Underwriters Agreement.**
(ii) Form of Selling Agreement.*
4. (i) Individual Fixed and Variable Deferred Annuity
Contract.*
(ii) Allocated Fixed and Variable Group Annuity
Contract.*
(iii) Allocated Fixed and Variable Group Annuity
Certificate.*
5. Application Form.*
6. (i) Articles of Incorporation of the Company.*
(ii) Bylaws of the Company.*
7. Not Applicable.
8. (i) Form of Fund Participation Agreement by and among the Alger American
Fund, Great American Reserve Insurance Company and Fred Alger and
Company, Incorporated.**
(ii) Form of Fund Participation Agreement by and among Great American
Reserve Insurance Company, Berger Institutional Products Trust and
BBOI Worldwide LLC.**
(iii)Form of Fund Participation by and between Great American Reserve
Insurance Company, Insurance Management Series and Federated
Securities Corp.**
(iv) Form of Fund Participation between Great American Reserve Insurance
Company, Van Eck Worldwide Insurance Trust and Van Eck Associates
Corporation.**
(v) Form of Fund Participation Agreement by and between Lord Abbett Series
Fund, Inc., Lord, Abbett and Co. and Great American Reserve Insurance
Company.**
(vi) Form of Fund Participation Agreement by and between American Century
Investment Services, Inc. and Great American Reserve Insurance
Company.**
(vii)Form of Fund Participation Agreement between INVESCO Variable
Investment Funds, Inc., INVESCO Funds Group, Inc. and the Company.***
9. Opinion and Consent of Counsel (to be filed by amendment).
10. Consent of Independent Accountants (to be filed by amendment).
11. Not Applicable.
12. Not Applicable.
13. Not Applicable.
14. Not Applicable.
15. Company Organizational Chart.**
27. Not Applicable.
*Incorporated by reference to Registrant's Form N-4 filed electronically on
November 14, 1997.
**Incorporated by reference to Registrant's Pre-Effective Amendment No. 1 to
Form N-4 filed electronically on February 3, 1998.
***Incorporated by reference to Great American Reserve Variable Annuity Account
G, Form N-4, File Nos. 333-00373 and 811-07501, filed electronically on January
23, 1996.
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
The following are the Executive Officers and Directors of the Company which
are engaged directly or indirectly in activities relating to the Registrant or
the Contracts offered by the Registrant:
Name and Principal Position and Offices
Business Address* with Depositor
- ------------------- ---------------------------------------
Ngaire E. Cuneo Director
Stephen C. Hilbert Director and Chairman of the Board
Rollin M. Dick Director, Executive Vice President and
Chief Financial Officer
Thomas J. Kilian Director and President
John J. Sabl Director, Executive Vice President, General
Counsel and Secretary
James S. Adams Senior Vice President and Treasurer
*The Principal business address for all officers and directors listed above is
11825 N. Pennsylvania Street, Carmel, Indiana 46032.
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT
The Company organizational chart was filed as Exhibit 15 in Registrant's
Pre-Effective Amendment No. 1 and is incorporated herein by reference.
ITEM 27. NUMBER OF CONTRACT OWNERS
As of January 20, 1999, there were 207 Non-Qualified Contract Owners and
11 Qualified Contract Owners.
ITEM 28. INDEMNIFICATION
The Bylaws (Article VI) of the Company provide, in part, that:
The Corporation shall indemnify any person who was or is a party, or is
threatened to be made a party, to any threatened, pending, or completed action,
suit or proceeding, whether civil, criminal, administrative, or investigative,
by reason of the fact that he is or was a director or officer of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise (collectively, "Agent") against expenses
(including attorneys' fees), judgments, fines, penalties, court costs and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit, or proceeding by judgment, order, settlement (whether with or
without court approval), conviction or upon a plea of NOLO CONTENDERE or its
equivalent, shall not, of itself, create a presumption that the Agent did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe that his
conduct was unlawful. If several claims, issues or matters are involved, an
Agent may be entitled to indemnification as to some matters even though he is
not entitled as to other matters. Any director or officer of the Corporation
serving in any capacity of another corporation, of which a majority of the
shares entitled to vote in the election of its directors is held, directly or
indirectly, by the Corporation, shall be deemed to be doing so at the request of
the Corporation.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted 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) Conseco Equity Sales, Inc. is the principal underwriter for the following
investment companies (other than the Registrant):
Great American Reserve Variable Annuity Account C
Great American Reserve Variable Annuity Account E
Great American Reserve Variable Annuity Account G
Conseco Fund Group
Rydex Advisor Variable Annuity Account
(b) Conseco Equity Sales, Inc. ("CES") is the principal underwriter for the
Contracts. The following persons are the officers and directors of CES. The
principal business address for each officer and director of CES is 11815 N.
Pennsylvania Street, Carmel, Indiana 46032.
Name and Principal Positions and Offices
Business Address with Underwriter
------------------------ ---------------------------------------
L. Gregory Gloeckner President and Director
William P. Latimer Vice President, Senior Counsel,
Secretary and Director
James S. Adams Senior Vice President, Treasurer
and Director
William T. Devanney, Jr. Senior Vice President, Corporate
Taxes
Christene H. Darnell Vice President, Management
Reporting
Donald B. Johnston Vice President, National Sales Director
Christine E. Monical Second Vice President and Assistant General
Counsel
(c) Not Applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
Lowell Short, whose address is 11825 N. Pennsylvania Street, Carmel, IN
46032, maintains physical possession of the accounts, books or documents of the
Separate Account required to be maintained by Section 31(a) of the Investment
Company Act of 1940 and the rules promulgated thereunder.
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 statement required to be made available under this
Form promptly upon written or oral request.
d. Conseco Variable Insurance Company (the "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 certifies that it has caused this Registration
Statement to be signed on its behalf, in the City of Carmel, and State of
Indiana on this 22nd day of January, 1999.
GREAT AMERICAN RESERVE VARIABLE ANNUITY
ACCOUNT F
Registrant
By: CONSECO VARIABLE INSURANCE COMPANY
By: /S/ ROLLIN M. DICK
------------------------------
Rollin M. Dick, Executive Vice
President and Chief Financial Officer
By: CONSECO VARIABLE INSURANCE COMPANY
Depositor
By: /S/ ROLLIN M. DICK
-------------------------------
Rollin M. Dick, Executive Vice
President and Chief Financial Officer
As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ------------------------ -------------------------- ---------------
Director
- ------------------------ -----------------
Ngaire E. Cuneo
/S/ THOMAS J. KILIAN Director 1/22/99
- ------------------------ -----------------
Thomas J. Kilian
Director and Chairman of
/S/ STEPHEN C. HILBERT of the Board (Principal 1/22/99
- ------------------------ Executive Officer) -----------------
Stephen C. Hilbert
/S/ ROLLIN M. DICK Director, Executive Vice 1/22/99
- ------------------------ President and Chief -----------------
Rollin M. Dick Financial Officer
(Principal Financial
Officer)
/S/ JOHN J. SABL Director 1/22/99
- ----------------------- ----------------
John J. Sabl
/S/ JAMES S. ADAMS Senior Vice President and 1/22/99
- ----------------------- Treasurer (Chief Accounting ---------------
James S. Adams Officer)
