As Filed with the Securities and Exchange Commission on February 6, 1998
Registration No. 333-
811-
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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. [ ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. [ ]
Variable Account A
(Exact Name of Registrant)
Keyport Benefit Life Insurance Company
(Name of Depositor)
125 High Street, Boston, Massachusetts 02110
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code: 617-526-1400
Bernard R. Beckerlegge, Esq.
Keyport Benefit Life Insurance Company
125 High Street
Boston, MA 02110
(Name and Address of Agent for Service)
Copies to:
Joan E. Boros, Esq.
Katten Muchin & Zavis
1025 Thomas Jefferson Street, N.W.
Washington, DC 20007
Approximate Date of Proposed Public Offering: As soon as practicable after
the effective date of this Registration Statement.
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
( ) 60 days after filing pursuant to paragraph (a)(1) of Rule 485
( ) on [date] pursuant to paragraph (a)(1) of Rule 485
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
Title of Securities Being Registered: Units of Interest in the Separate
Account under the Contracts
No filing fee is due because an indefinite amount of securities is deemed to
have been registered in reliance on Section 24(f) of the Investment Company
Act of 1940.
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Exhibit List on Page ____
CONTENTS OF REGISTRATION STATEMENT
The Facing Sheet
The Contents Page
Cross-Reference Sheet
PART A
Prospectus
PART B
Statement of Additional Information
PART C
Items 24 - 32
The Signatures
Exhibits
VARIABLE ACCOUNT [ A ]
KEYPORT BENEFIT LIFE INSURANCE COMPANY
CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-4
N-4 Item Caption in Prospectus
1. Cover Page
2. Glossary of Special Terms
3. Summary of Expenses
4. Performance Information
5. Keyport Benefit and the Variable Account
Eligible Funds
6. Deductions
7. Allocations of Purchase Payments
Transfer of Variable Account Value
Substitution of Eligible Funds and Other Variable Account
Changes
Modification of the Certificate
Death Provisions for Non-Qualified Certificates
Death Provisions for Qualified Certificates
Certificate Ownership
Assignment
Partial Withdrawals and Surrender
Annuity Benefits
Suspension of Payments
Inquiries by Certificate Owners
8. Annuity Provisions
9. Death Provisions for Non-Qualified Certificates
Death Provisions for Qualified Certificates
Annuity Options
10. Purchase Payments and Applications
Variable Account Value
Valuation Periods
Net Investment Factor
Sales of the Certificates
11. Partial Withdrawals and Surrender
Option A: Income For a Fixed Number of Years
Right to Revoke
12. Tax Status
13. Legal Proceedings
14. Table of Contents - Statement of Additional Information
Caption in Statement of Additional Information
15. Cover Page
16. Table of Contents
17. Keyport Benefit Life Insurance Company
18. Safekeeping of Assets, Experts
19. Not applicable
20. Principal Underwriter
21. Investment Performance
22. Variable Annuity Benefits
23. Financial Statements
PART A
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The information contained within double rows of asterisks is
provided at the request of the staff of the Securities and Exchange
Commission. It is not and will not be part of any documents
delivered to purchasers or existing owners, and is included solely
for purposes of clarifying the content of this registration
statement. In addition, throughout the prospectus and statement of
additional information ("SAI") that follow there are similar
inserts that specifically summarize the parameters of change for
the particular design feature.
This registration statement includes a prospectus and SAI that
describes a generic form of the Group Flexible Premium Deferred
Annuity Contracts (the "Contracts") that are the subject of the
registration statement. The prospectus and SAI contain numerous
bracketed portions to indicate those portions which may be included
or eliminated in any particular form of the Contracts, including
but not limited to those, as follows:
death benefits;
funding media;
withdrawal rights;
transfer privileges;
annuity options;
other features
such as dollar cost averaging,
asset allocation,
systematic withdrawals, and
Account rebalancing.
In all cases variations in other bracketed features, such as issue and
annuity ages and interest rates, will be in conformity with state
insurance law. Bracketed features representing maximum limits for which
a range is not provided will not exceed, but may be less than, the
amount shown. Bracketed features representing minimum limits for which
a range is not provided will not be less than, but may exceed, the
amount shown.
The prospectus and SAI also include bracketed references to the fees and
charges to be imposed under the particular form of the Contract. Of
course, in each case, Keyport Benefit only will impose such charges in a
manner and subject to the conditions of applicable rules. In connection
with the various charges under the Contracts, Keyport Benefit and its
separate accounts will comply with the requirements of Section 26(e) and
will rely upon and be limited by such rules as 0-1(e), 6c-8, and 22d-2
under the Investment Company Act of 1940, as amended, and in compliance
with their respective requirements. Any descriptions of the potential
range of fees and charges should be read in the context of such rules
requirements.
Each form of the Contracts will be offered pursuant to a separate
prospectus and a separate or combined SAI, as appropriate. The content
of all prospectuses and SAIs will be identical with respect to
contractual and securities law related features to those contained in
this registration statement, except for provisions that are bracketed
and which will vary within the parameters established herein, and except
for non-material changes consistent with the requirements of Rule 485(b)
under the 1933 Act ("Rule 485(b)").
Except as provided for by Rule 485(b), each prospectus and SAI and
related exhibits will be filed pursuant to Rule 485(a) with a request
for expedited or selective review consistent with precedent and the fact
that all relevant disclosure is included in this registration statement.
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GROUP FLEXIBLE PURCHASE PAYMENT
DEFERRED VARIABLE ANNUITY CONTRACT
ISSUED BY
Variable Account A
OF
KEYPORT BENEFIT LIFE INSURANCE COMPANY
This prospectus offers Group Variable Annuity Contracts (the
"Contracts") and the related Certificates (the "Certificates")
that are designed to fund benefits under certain group
arrangements including those that qualify for special tax
treatment under the Internal Revenue Code of 1986 (the "Code").
As required by certain states, the Certificates may be offered as
individual contracts. Unless otherwise noted or the context so
requires all references to the Certificates include the Contracts
and the individual Contracts. The Certificates are offered on a
flexible payment basis.
The variable annuity Contract (form number DVA(1)/NY) and the
Certificates described in this prospectus provide for
accumulation of Certificate Values on a variable basis, [and also
on a fixed basis], and payments of periodic annuity payments on
[either a variable or] a fixed basis. The Certificates are
designed for use by individuals for retirement planning purposes.
This prospectus generally describes only the variable features of
the Certificate [(for a summary of the fixed features, see
Appendix A on Page xx)]. If the Certificate Owner elects to have
Certificate Values accumulated on a variable basis, Purchase
Payments will be allocated to a segregated investment account of
Keyport Benefit Life Insurance Company ("Keyport Benefit"),
designated Variable Account A ("Variable Account").
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The terms XXXXX Trust, YYYYY Fund, and XX-1 Sub-Account
are included to indicate that disclosure relevant to an
actual Eligible Fund will be provided. The actual names
of the Eligible Funds and corresponding Sub-Accounts
will be included in the subsequent forms of the
prospectus and SAI.
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The Variable Account invests in shares of the following Eligible
Funds of [The XXXXX Trust ("XXXXX Trust")] at their net asset
value: [X-1, X-2 and X-3]. The Variable Account also invests in
shares of the following Eligible Funds of [The YYYYY Fund ("YYYYY
Fund")] at their net asset value: [Y-1, Y-2, Y-3].
The Variable Account may offer other forms of the Contracts and
Certificates with features, and fees and charges which vary from
the Certificates, and provide for investment in other Sub-
Accounts which may invest in different or additional mutual
funds. Other Contracts and Certificates will be described in
separate prospectuses and statements of additional information.
The agent selling the Contracts and Certificates has information
concerning the eligibility for and the availability of the other
forms of the Contracts and Certificates.
A Statement of Additional Information dated the same as this
prospectus has been filed with the Securities and Exchange
Commission and is herein incorporated by reference. It is
available, at no charge, by writing the Principal Underwriter,
Keyport Financial Services Corp., at 125 High Street, Boston, MA
02110, by calling Keyport Benefit's Service Office at (800) 437-
4466, or by returning the postcard on the back cover of this
prospectus. A table of contents for the Statement of Additional
Information is on Page xx.
The Certificates may be sold by or through banks or other
depository institutions. The Contract and Certificates: are not
insured by the FDIC; are not a deposit or other obligation of, or
guaranteed by, the depository institution; and are subject to
investment risks, including the possible loss of principal amount
invested.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THIS PROSPECTUS SETS FORTH THE INFORMATION A PROSPECTIVE INVESTOR
SHOULD KNOW BEFORE INVESTING. THE PROSPECTUS SHOULD BE RETAINED
FOR FUTURE REFERENCE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY STATE OR
JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO
PERSON IS AUTHORIZED BY KEYPORT BENEFIT TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, IN CONNECTION WITH THIS OFFERING, AND IF GIVEN
OR MADE, SUCH UNAUTHORIZED INFORMATION OR REPRESENTATIONS SHOULD
NOT BE RELIED UPON.
The date of this prospectus is _______________, [1998]
TABLE OF CONTENTS
Page
Glossary of Special Terms
Summary of Expenses
Synopsis
Performance Information
Keyport Benefit and the Variable Account
[Year 2000 Matters]
Purchase Payments and Applications
Investments of the Variable Account
Allocations of Purchase Payments
Eligible Funds
Transfer of Variable Account Value
Substitution of Eligible Funds and
Other Variable Account Changes
Deductions
[Deductions for Certificate Maintenance Charge]
Deductions for Mortality and Expense Risk Charge
[Deductions for Daily Distribution Charge]
[Deductions for Daily Administrative Charge]
[Deductions for Contingent Deferred Sales Charge]
[Deductions for Transfers of Variable Account Value]
Deductions for Premium Taxes
Deductions for Income Taxes
Total Variable Account Expenses
Other Services
The Certificates
Variable Account Value
Valuation Periods
Net Investment Factor
Modification of the Certificate
Right to Revoke
Death Provisions for Non-Qualified Certificates
Death Provisions for Qualified Certificates
Certificate Ownership
Assignment
Partial Withdrawals and Surrender
Annuity Provisions
Annuity Benefits
Income Date and Annuity Option
Change in Income Date and Annuity Option
Annuity Options
Variable Annuity Payment Values
Proof of Age, Sex, and Survival of Annuitant
Suspension of Payments
Tax Status
Introduction
[Recent Developments]
Taxation of Annuities in General
Qualified Plans
Tax-Sheltered Annuities
Individual Retirement Annuities
Corporate Pension and Profit-Sharing Plans
Deferred Compensation Plans with Respect to
Service for State and Local Governments
Variable Account Voting Privileges
Sales of the Certificates
Legal Proceedings
Inquiries by Certificate Owners
Table of Contents_Statement of Additional Information
[Appendix A_The Fixed Account [(also known as the Modified
Guaranteed Annuity Account)]
[Appendix [B]_Telephone Instructions]
GLOSSARY OF SPECIAL TERMS
Accumulation Unit: An accounting unit of measure used to
calculate Variable Account Value.
Annuitant: The Annuitant is the natural person to whom any
annuity payments will be made starting on the Income Date. The
Annuitant may not be over age [90] on the Certificate Date (age
[75] for Qualified Certificates [and age [90] for [Roth IRA]
Qualified Certificates]).
Certificate Anniversary: The same month and day as the
Certificate Date in each subsequent year of the Certificate.
Certificate Date: The effective date of the Certificate; it is
shown on the Certificate Schedule.
Certificate Owner: The person (or persons in the case of joint
ownership) who possesses all the ownership rights under the
Certificate. The primary Certificate Owner may not be over age
[90] on the Certificate Date (age [75] for Qualified Certificates
[, age [90] for [Roth IRA] Qualified Certificates] and age [90]
for a joint Owner).
Certificate Value: The [sum of the] Variable Account Value [and
the Fixed Account Value].
Certificate Withdrawal Value: The Certificate Value [increased
or decreased by a limited Market Value Adjustment] less any
premium taxes [and] [Certificate Maintenance Charge] [and]
[applicable Contingent Deferred Sales Charges].
Certificate Year: Any period of 12 months commencing with the
Certificate Date and each Certificate Anniversary thereafter
shall be a Certificate Year.
[Covered Person: The person(s) identified on the Certificate
Schedule whose death may result in an Adjustment of Certificate
Value [and waiver of any Contingent Deferred Sales Charges] [and
a waiver of any Market Value Adjustment] [or whose medically
necessary stay in a hospital or nursing facility may allow the
Certificate Owner to be eligible for either a total or partial
waiver of the Contingent Deferred Sales Charge].]
Designated Beneficiary: The person who may be entitled to receive
benefits following the death of the Annuitant, Certificate Owner,
or joint Certificate Owner. The Designated Beneficiary will be
the first person among the following who is alive on the date of
death: primary Certificate Owner; joint Certificate Owner;
primary beneficiary; contingent beneficiary; and if none of the
above is alive, the primary Certificate Owner's estate. If the
primary Certificate Owner and joint Certificate Owner are both
alive, they will be the Designated Beneficiary together.
Eligible Funds: The mutual funds that are eligible investments
for the Variable Account under the Certificates.
[Fixed Account: Part of Keyport Benefit's general account to
which Purchase Payments may be allocated or Certificate Values
may be transferred.]
[Fixed Account Value: The value of all Fixed Account amounts
accumulated under the Certificate prior to the Income Date.]
[Guarantee Period Anniversary: An anniversary of a Guarantee
Period's Start Date.]
[Guarantee Period Month: The first Guarantee Period Month is the
monthly period which begins on the Start Date. Subsequent
Guarantee Period Months begin on the same day in the ensuing
months.]
[Guarantee Period Year: The first Guarantee Period Year is the
annual period which begins on the Start Date. Subsequent
Guarantee Period Years begin on each Guaranteed Period
Anniversary.]
In Force: The status of the Certificate before the Income Date so
long as it is not totally surrendered, the Certificate Value
under a Certificate does not go to zero, and there has not been a
death of the Annuitant or any Certificate Owner that will cause
the Certificate to end within at most five years of the date of
death.
Income Date: The date on which annuity payments are to begin.
Non-Qualified Certificate: Any Certificate that is not issued
under a Qualified Plan.
Office: Keyport Benefit's executive office, which is 125 High
Street, Boston, Massachusetts 02110.
Qualified Certificate: Certificates issued under Qualified Plans.
Qualified Plan: A retirement plan established pursuant to the
provisions of Sections 401, 403(b), 408(b) or 408A of the
Internal Revenue Code. Keyport Benefit treats Section 457 plans
as Qualified Plans.
Service Office: Keyport Benefit's Service Office which is 125
High Street, Boston, Massachusetts 02110.
[Start Date: The date an amount is first allocated to a Guarantee
Period].
Variable Account: A separate investment account of Keyport
Benefit into which Purchase Payments under the Certificates may
be allocated. The Variable Account is divided into Sub-Accounts
("Sub-Account") that correspond to the Eligible Funds in which
they invest.
Variable Account Value: The value of all Variable Account amounts
accumulated under the Certificate prior to the Income Date.
Written Request: A request written on a form satisfactory to
Keyport Benefit, signed by the Certificate Owner and a
disinterested witness, and filed at Keyport Benefit's Service
Office.
SUMMARY OF EXPENSES
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Summary of Expenses will be completed in each Rule 485(a) filing.
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The expense summary format below, including the examples, was
adopted by the Securities and Exchange Commission to assist the
owner of a variable annuity certificate in understanding the
transaction and operating expenses the owner will directly or
indirectly bear under a certificate. The values reflect expenses
of the Variable Account as well as the Eligible Funds under the
Certificates. The expenses shown for the Eligible Funds and the
examples should not be considered a representation of future
expenses.
Certificate Owner Transaction Expenses
Sales Load Imposed on Purchases: 0%
Maximum Contingent Deferred Sales Charge
(as a percentage of Purchase Payments): [7%1
Years from Date of Payment Sales Charge
1 7%
2 6%
3 5%
4 4%
5 3%
6 2%
7 1%
8 or later 0%]
Maximum Total Certificate Owner Transaction Expenses[2]
(as a percentage of purchase payments): [7%]
Annual Certificate Maintenance Charge[3] $[36]
[The Certificate Maintenance Charge will be waived before the
Income Date if:
(i) it is the first Certificate Anniversary,
[(ii)] the Certificate Value is greater than or equal to
[$40,000] on the Certificate Anniversary date this charge is
imposed, or
[(iii)] Purchase Payments of at least [$2,500] have been
made in the prior Certificate Year and there has been no
partial withdrawal in the prior Certificate Year.]
[The Certificate Maintenance Charge will be waived on or after
the Income Date for the current year if:
(i) variable annuity Option A (Income for a Fixed Number of
Years) is applicable; and
(ii) at the time of the first payment of the year, the
present value of all remaining payments (See "Option A" on Page
xx) is greater than or equal to [$40,000].]
Variable Account Annual Expenses
(as a percentage of average net assets)
Mortality and Expense Risk Charge: [1.25%]
[Distribution Charge:] [ .15%]
[Administrative Charge:] [ .15%]
Total Variable Account Annual Expenses: [1.55%]
[XXXXX Trust and YYYYY Fund] Annual Expenses[4]
(as a percentage of average net assets)
Total Fund
Operating Expenses
Management Other [ After Any Expense
Fund Fees Expenses Reimbursements] [5]
The above expenses for the Eligible Funds were provided by the
Funds. Keyport Benefit has not independently verified the
accuracy of the information.
Example #1 _ Assuming surrender of the Certificate at the end of
the periods shown.6
A $1,000 investment in each Sub-Account listed would be subject
to the expenses shown, assuming 5% annual return on assets.
Sub-Account 1 Year 3 Years 5 Years 10 Years
Example #2 _ Assuming annuitization of the Certificate at the end
of the periods shown. 6
A $1,000 investment in each Sub-Account listed would be subject
to the expenses shown, assuming 5% annual return on assets.
Sub-Account 1 Year 3 Years 5 Years 10 Years
Example #3 _ Assuming the Certificate stays in force through the
periods shown.
A $1,000 investment in each Sub-Account listed would be subject
to the same expenses shown in Example #2, assuming 5% annual
return on assets.
[1Contingent Deferred Sales Charges are deducted only if the
Certificate is totally or partially surrendered. A surrender
will not incur the Charge percentage shown as follows:
1. In any Certificate Year, Certificate Owners may
withdraw an aggregate amount, not to exceed, at the time of
withdrawal, the Certificate's earnings, which equal: (a) the
Certificate Value, less (b) the portion of the Purchase
Payments not previously withdrawn.
2. In any Certificate Year after the first, Certificate
Owners may withdraw, in addition to the amount available in
1., the amount by which 10% of the Certificate Value as of
the preceding Certificate Anniversary exceeds the amount
available in 1.]
[2This charge will be waived on the first Certificate Anniversary
and in certain other instance (see "Deductions for Certificate
Maintenance Charge").]
3[Keyport Benefit reserves the right to impose a transfer fee
after prior notice to Certificate Owners, but currently does not
impose any charge.] Premium taxes are not shown. Keyport
Benefit deducts the amount of premium taxes, if any, when paid
unless Keyport Benefit elects to defer such deduction.
4[The XXXXX Trust] expenses are for [ ]. [The YYYYY Fund]
expenses [are estimated and] reflect the [YYYYY Fund's] Manager's
agreement to reimburse expenses above certain limits (see
footnote 5).
[5[YYYYY Fund's] manager has agreed until [a/bb/cc] to reimburse
all expenses, including management fees, in excess of the
following percentage of the average annual net assets of each
Fund, so long as such reimbursement would not result in the
Fund's inability to qualify as a regulated investment company
under the Internal Revenue Code. The total percentages shown in
the table for [YY-1, YY-2 and YY-3] are after expense
reimbursement. Each percentage shown in the parentheses is what
the total for 199[ ] would be in the absence of expense
reimbursement: for [YY-1 -xxx%; for YY-2 - xxx%; and for YYY-3 -
xxx%].]
6The annuity is designed for retirement planning purposes.
Surrenders prior to the Income Date are not consistent with the
long-term purposes of the Certificate and the applicable tax
laws.
The examples should not be considered a representation of past or
future expenses and charges of the Sub-Accounts. Actual expenses
may be greater or less than those shown. Similarly, the assumed
5% annual rate of return is not an estimate or a guarantee of
future investment performance. See "Deductions" in this
prospectus, ["How the Funds are Managed"] in the prospectus for
[XXXXX Trust], and ["Trust Management Organizations"] and
["Expenses of the Funds"] in the prospectus for [YYYYY Fund].
SYNOPSIS
The following Synopsis should be read in conjunction with the
detailed information in this prospectus and the Statement of
Additional Information. Please refer to the Glossary of Special
Terms for the meaning of certain defined terms. Variations from
the information appearing in this prospectus due to individual
state requirements are described in supplements which are
attached to this prospectus, or in endorsements to the
Certificates, as appropriate.
The Certificate allows Certificate Owners to allocate Purchase
Payments to the Variable Account [and also to the Fixed Account.]
The Variable Account is a separate investment account maintained
by Keyport Benefit. [The Fixed Account is part of Keyport
Benefit's "general account", which consists of all Keyport
Benefit's assets except the Variable Account and the assets of
other separate accounts maintained by Keyport Benefit.]
Certificate Owners may allocate payments to, and receive annuity
payments from the Variable Account [and/or the Fixed Account].
If the Certificate Owner allocates payments to the Variable
Account, the accumulation values and annuity payments will
fluctuate according to the investment experience of the Sub-
Accounts chosen. [If the Certificate Owner allocates payments to
the Fixed Account, the accumulation values will increase at
guaranteed interest rates and annuity payments will be of a fixed
amount. [Fixed Account Values are subject to a limited market
value adjustment]. (See Appendix A on Page xx for more
information on the Fixed Account.)] [If the Certificate Owner
allocates payments to both Accounts, then the accumulation values
and annuity payments will be variable in part and fixed in part.]
The Certificate permits Purchase Payments to be made on a
flexible Purchase Payment basis. The minimum initial payment is
$[5,000] [and [$2,000] for individual retirement annuities]. The
minimum amount for each subsequent payment is $[1,000] or such
lesser amount as Keyport Benefit may permit from time to time
[(currently $250)]. (See "Purchase Payments and Applications" on
Page x.)
There are no deductions made from Purchase Payments for sales
charges at the time of purchase. [A Contingent Deferred Sales
Charge may be deducted in the event of a total or partial
surrender (see "Partial Withdrawals and Surrender" on Page xx).
The Contingent Deferred Sales Charge is based on a graded table
of charges. The charge will not exceed [7]% of that portion of
the amount surrendered that represents Purchase Payments made
during the [seven] years immediately preceding the request for
surrender. (See "Deductions for Contingent Deferred Sales Charge"
on Page xx.)]
Keyport Benefit deducts a Mortality and Expense Risk Charge,
which is equal on an annual basis to [1.25]% of the average daily
net asset values in the Variable Account attributable to the
Certificates. (See "Deductions for Mortality and Expense Risk
Charge" on Page xx.) [Keyport Benefit also deducts a daily
distribution charge which is equal on an annual basis to [.15%]
of the same values. (See "Deductions for Daily Distribution
Charge" on Page xx.)] [Keyport Benefit deducts a Daily
Administrative Charge which is equal on an annual basis to [.15]%
of the same values. (See "Deductions for Daily Administrative
Charge" on Page xx.)]
[Keyport Benefit deducts an annual Certificate Maintenance Charge
(currently $[36.00]) from the Variable Account Value for
administrative expenses. Prior to the Income Date, Keyport
Benefit reserves the right to change this charge for future
years. [Keyport Benefit will in certain instances waive this
charge.] (See "Deductions for Certificate Maintenance Charge" on
Page xx.)]
Keyport Benefit reserves the right to deduct a charge of [$50]
for each transfer in excess of [12] per Certificate Year [but
currently does not do so]. [(See "Recent Developments" on Page
xx.)]
Premium taxes will be charged against the Certificate Value.
Currently such premium taxes range from 0% to 5.0%. (See
"Deductions for Premium Taxes" on Page xx.)
There are no federal income taxes on increases in the value of a
Certificate until a distribution occurs, in the form of a lump
sum payment, annuity payments, or the making of a gift or
assignment of the Certificate. A federal penalty tax (currently
10%) may also apply. (See "Tax Status" on Page xx.)
The Certificate allows the Certificate Owner to revoke the
Certificate generally within 10 days of delivery (see "Right to
Revoke" on Page xx). Since Keyport Benefit will refund the
Certificate Value, the Certificate Owner will bear the investment
risk during the revocation period.
The full financial statements for [the Variable Account and]
Keyport Benefit are in the Statement of Additional Information.
PERFORMANCE INFORMATION
The Variable Account may from time to time advertise certain
performance information concerning its various Sub-Accounts.
[Certain of the Eligible Funds have been available for contracts
for periods prior to the commencement of the offering of the
Certificates described in this prospectus. Any performance
information for such periods will be based on historical results
of the Eligible Funds being applied to the Certificate for the
specified time periods.]
Performance information is not intended to indicate either past
performance under an actual Certificate or future performance.
The Sub-Accounts may advertise total return information for
various periods of time. Total return performance information is
based on the overall percentage change in value of a hypothetical
investment in the specific Sub-Account over a given period of
time.
Average annual total return information shows the average
percentage change in the value of an investment in the Sub-
Account from the beginning date of the measuring period to the
end of that period. This standardized version of average annual
total return reflects all historical investment results, less all
charges and deductions applied against the Sub-Account and a
Certificate [(including any Contingent Deferred Sales Charge that
would apply if a Certificate Owner surrendered the Certificate at
the end of each period indicated)]. Average total return does
not take into account any premium taxes and would be lower if
these taxes were included.
In order to calculate average annual total return, Keyport
Benefit divides the change in value of a Sub-Account under a
Certificate surrendered on a particular date by a hypothetical
$1,000 investment in the Sub-Account made by the Certificate
Owner at the beginning of the period illustrated. The resulting
total rate for the period is then annualized to obtain the
average annual percentage change during the period.
Annualization assumes that the application of a single rate of
return each year during the period will produce the ending value,
taking into account the effect of compounding.
The Sub-Accounts may present additional total return information
computed on a different basis.
[First, the Sub-Accounts may present total return information
computed on the same basis as described above, except deductions
will not include the Contingent Deferred Sales Charge. This
presentation assumes that the investment in the Certificate
continues beyond the period when the Contingent Deferred Sales
Charge applies, consistent with the long-term investment and
retirement objectives of the Certificate. The total return
percentage will thus be higher under this method than the
standard method described above.]
[Second,] the Sub-Accounts may present total return information
calculated by dividing the change in a Sub-Account's Accumulation
Unit value over a specified time period by the Accumulation Unit
value of that Sub-Account at the beginning of the period. This
computation results in a 12-month change rate or, for longer
periods, a total rate for the period which Keyport Benefit
annualizes in order to obtain the average annual percentage
change in the Accumulation Unit value for that period. The
change percentages do not take into account [the Contingent
Deferred Sales Charge, the Certificate Maintenance Charge and]
premium tax charges. The percentages would be lower if these
charges were included.
The [XX-1] Sub-Account is a money market Sub-Account that also
may advertise yield and effective yield information. The yield
of the Sub-Account refers to the income generated by an
investment in the Sub-Account over a specifically identified 7-
day period. This income is annualized by assuming that the
amount of income generated by the investment during that week is
generated each week over a 52-week period and is shown as a
percentage. The yield reflects the deduction of all charges
assessed against the Sub-Account and a Certificate but does not
take into account [Contingent Deferred Sales Charges and] premium
tax charges. The yield would be lower if these charges were
included.
The effective yield of the [XX-1] Sub-Account is calculated in a
similar manner but, when annualizing such yield, income earned by
the Sub-Account is assumed to be reinvested. This compounding
effect causes effective yield to be higher than yield.
KEYPORT BENEFIT AND THE VARIABLE ACCOUNT
Keyport Benefit Life Insurance Company was organized under the
laws of the State of New York in 1987 as a stock life insurance
company, and is a wholly-owned subsidiary of Keyport Life
Insurance Company. The executive offices of Keyport Benefit are
at 125 High Street, Boston, Massachusetts 02110. The home office
is located at 100 Manhattanville Road, Purchase, New York 10577.
Keyport Benefit is admitted to conduct life insurance business in
New York and Rhode Island.
The Variable Account was established by Keyport Benefit pursuant
to the provisions of New York Law on February 6, 1998. The
Variable Account meets the definition of "separate account" under
the federal securities laws. The Variable Account is registered
with the Securities and Exchange Commission as a unit investment
trust under the Investment Company Act of 1940. Such registration
does not involve supervision of the management of the Variable
Account or Keyport Benefit by the Securities and Exchange
Commission.
[Keyport Benefit has been rated [A+ (Superior)] by A.M. Best and
Company, independent analysts of the insurance industry.]
[Standard & Poor's ("S & P") has rated Keyport Benefit [AA] for
[excellent] financial security,[ Moody's has rated Keyport [A1]
for [good] financial strength] [and Duff & Phelps has rated
Keyport Benefit [AA-] for [very high] claims paying ability].
The Best's [A+] rating is in the [highest] rating category, which
also includes [A++]. S & P [and Duff & Phelps] has [have] [one]
rating category above [AA] [and Moody's has two rating categories
above A]. Within the S & P [AA] category, [only AA+ is higher].
[The Moody's ["1"] modifier signifies that Keyport Benefit is in
the [higher] end of the [A] category] [while the Duff & Phelps
["-"] modifier signifies that Keyport Benefit is at the [lower]
end of the [AA] category.] These ratings merely reflect the
opinion of the rating company as to the relative financial
strength of Keyport Benefit and Keyport Benefit's ability to meet
its contractual obligations to its policyholders. Even though
assets in the Variable Account are held separately from Keyport
Benefit's other assets, ratings of Keyport Benefit may still be
relevant to Certificate Owners since not all of Keyport Benefit's
contractual obligations relate to payments based on those
segregated assets (e.g., see "Death Provisions" for Keyport
Benefit's obligation after certain deaths to increase the
Certificate Value if it is less than Death Benefit Amount or
otherwise enhance the death benefit with interest).]
[Keyport Benefit is a member of the Insurance Marketplace
Standards Association ("IMSA"), and as such may use the IMSA logo
and membership in IMSA in advertisements. Being a member means
that Keyport Benefit has chosen to participate in IMSA's Life
Insurance Ethical Market Conduct Program.]
Keyport Benefit is one of the Liberty Financial Companies.
Keyport Benefit is ultimately controlled by Liberty Mutual
Insurance Company of Boston, Massachusetts, a multi-line
insurance and financial services institution.
Obligations under the Certificates are the obligations of Keyport
Benefit. Although the assets of the Variable Account are the
property of Keyport Benefit, these assets are held separately
from the other assets of Keyport Benefit and are not chargeable
with liabilities arising out of any other business Keyport
Benefit may conduct. Income, capital gains and/or capital
losses, whether or not realized, from assets allocated to the
Variable Account are credited to or charged against the Variable
Account without regard to the income, capital gains, and/or
capital losses arising out of any other business Keyport Benefit
may conduct. Thus, Keyport Benefit does not guarantee the
investment performance of the Variable Account. The Variable
Account Value and the amount of variable annuity payments will
vary with the investment performance of the investments in the
Variable Account.
[YEAR 2000 MATTERS
Many existing computer programs use only two digits to identify a
year in the date field. These programs were designed and
developed without considering the impact of the upcoming change
in the century. If not corrected, many computer applications
could fail or create erroneous results by or at the Year 2000.
This potential problem has become known as the "Year 2000 issue".
The Year 2000 issue affects virtually all companies and
organizations.
Computer applications which are affected by the Year 2000 issue
could impact Keyport Benefit's business functions in various
ways, ranging from a complete inability to perform critical
business functions to a loss of productivity in varying degrees.
Likewise, the failure of some computer applications could have no
impact on critical business functions.
Keyport Benefit is assessing and addressing the Year 2000 issue
by implementing a four-step plan. The first two steps involve
inventorying all the computer applications which support Keyport
Benefit's business functions and prioritizing computer
applications which are affected by the Year 2000 issue based upon
the degree of impact each has on the functioning of Keyport
Benefit's business units. The first two steps of the plan are
substantially complete.
The final two steps of the four-step plan involve remediation of
affected computer applications (i.e., repairing or replacing
programs, including those which interface with third-party
computer applications that have unremediated Year 2000 issues,
and appropriate testing) and reinstallation of computer
applications. For computer applications which are "mission
critical" (i.e., their failure would result in the complete
inability to perform critical business functions), Keyport
Benefit expects to complete the final two steps of the plan by
December 31, 1998. Remediation and reinstallation of non-critical
computer applications is scheduled to be completed by December
31, 1999.
Keyport Benefit believes that the Year 2000 issue could have a
material impact on Keyport Benefit's operations if the four-step
plan is not timely implemented. However, based upon the progress
that is being made, Keyport Benefit believes that the timetable
for implementing the plan will be met and that the Year 2000
issue will not pose significant operational problems for its
computer systems.
Keyport Benefit does not expect that the cost of addressing the
Year 2000 issue will be material to its financial condition or
its results of operations.]
PURCHASE PAYMENTS AND APPLICATIONS
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The minimums and maximums described in the following
paragraph may vary within any limits permitted under
state insurance law and Keyport Benefit's
administrative guidelines in existence at the time of
issuance of the Certificate.
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*
The initial Purchase Payment is due on the Certificate Date. The
minimum initial Purchase Payment is $[5,000] [and [$2,000] for
individual retirement annuities]. Additional Purchase Payments
can be made at the Certificate Owner's option. Each subsequent
Purchase Payment must be at least $[1,000] or such lesser amount
as Keyport Benefit may permit from time to time [(currently
$250)]. Keyport Benefit may reject any Purchase Payment.
If the application for a Certificate is in good order and it
calls for amounts to be allocated to the Variable Account,
Keyport Benefit will apply the initial Purchase Payment to the
Variable Account and credit the Certificate with Accumulation
Units within two business days of receipt. If the application
for a Certificate is not in good order, Keyport Benefit will
attempt to get it in good order within five business days. If it
is not complete at the end of this period, Keyport Benefit will
inform the applicant of the reason for the delay and that the
Purchase Payment will be returned immediately unless the
applicant specifically consents to Keyport Benefit's keeping the
Purchase Payment until the application is complete. Once the
application is complete, the Purchase Payment will be applied
within two business days of its completion. Keyport Benefit has
reserved the right to reject any application.
Keyport Benefit confirms, in writing, to the Certificate Owner
the allocation of all Purchase Payments and the re-allocation of
values after any requested transfer. Keyport Benefit must be
notified immediately by the Certificate Owner of any processing
error.
Keyport Benefit will permit others to act on behalf of an
applicant in certain instances, including the following two
examples. First, Keyport Benefit will accept an application for a
Certificate that contains a signature signed under a power of
attorney if a copy of that power of attorney is submitted with
the application. Second, Keyport Benefit will issue a
Certificate that is replacing an existing life insurance or
annuity policy that was issued by Keyport Benefit or an
affiliated company without having previously received a signed
application from the applicant. Certain dealers or other
authorized persons such as employers and Qualified Plan
fiduciaries will inform Keyport Benefit of an applicant's answers
to the questions in the application by telephone or by order
ticket and cause the initial Purchase Payment to be paid to
Keyport Benefit. If the information is in good order, Keyport
Benefit will issue the Certificate with a copy of an application
completed with that information. The Certificate will be
delivered to the Certificate Owner with a letter from Keyport
Benefit that will give the Certificate Owner an opportunity to
respond to Keyport Benefit if any of the application information
is incorrect. Alternatively, Keyport Benefit's letter may
request the Certificate Owner to confirm the correctness of the
information by signing either a copy of the application or a
Certificate delivery receipt that ratifies the application in all
respects (in either case, a copy of the signed document would be
returned to Keyport Benefit for its permanent records). All
purchases are confirmed, in writing, to the applicant by Keyport
Benefit. Keyport Benefit's liability under a Certificate extends
only to amounts so confirmed.
INVESTMENTS OF THE VARIABLE ACCOUNT
Allocations of Purchase Payments
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The percentage of required allocations to each Sub-Account
may vary from 1% to 10%.
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Purchase payments applied to the Variable Account will be
invested in one or more of the Eligible Fund Sub-Accounts
designated as permissible investments in accordance with the
selection made by the Certificate Owner in the application. Any
selection must specify the percentage of the Purchase Payment
that is allocated to each Sub-Account [or must specify the asset
allocation model selected. (See "Other Services, the Programs" on
Page xx)]. The percentage for each Sub-Account, if not zero,
must be at least [10]% and must be a whole number. A Certificate
Owner may change the allocation percentages without fee, penalty
or other charge. Allocation changes must be made by Written
Request unless the Certificate Owner has by Written Request
authorized Keyport Benefit to accept telephone allocation
instructions from the Certificate Owner or from a person acting
for the Certificate Owner as an attorney-in-fact under a power of
attorney. By authorizing Keyport Benefit to accept telephone
changes, a Certificate Owner agrees to accept and be bound by the
conditions and procedures established by Keyport Benefit from
time to time. The current conditions and procedures are in
Appendix [B] and Certificate Owners authorizing telephone
allocation instructions will be notified, in advance, of any
changes.
The Variable Account is segmented into Sub-Accounts. Each Sub-
Account contains the shares of one of the Eligible Funds and such
shares are purchased at net asset value. Eligible Funds and
Sub-Accounts may be added or withdrawn as permitted by applicable
law. The Sub-Accounts in the Variable Account and the
corresponding Eligible Funds currently are as follows:
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TEXT HERE WILL DESCRIBE ELIGIBLE FUNDS AND
CORRESPONDING SUB-ACCOUNTS
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Eligible Funds of [XXXXX Trust] Sub-Accounts
[XX-1] [XX-1 Sub-Account]
[XX-2] [XX-2 Sub-Account]
[XX-3] [XX-3 Sub-Account]
Eligible Funds of [YYYYY Fund] Sub-Accounts
[YY-1] [YY-1 Sub-Account]
[YY-2] [YY-2 Sub-Account]
[YY-3] [YY-3 Sub-Account]
Eligible Funds
The Eligible Funds which are the permissible investments of the
Variable Account are the separate funds of [XXXXX Trust, the
separate funds of YYYYY Fund], and any other mutual funds with
which Keyport Benefit and the Variable Account may enter into a
participation agreement for the purpose of making such mutual
funds available as Eligible Funds under certain Certificates.
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TEXT HERE WILL DESCRIBE INDIVIDUAL INVESTMENT ADVISERS
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The investment objectives of the Eligible Funds are briefly
described below. More detailed information, including investor
considerations related to the risks of investing in a particular
Eligible Fund, may be found in the current prospectus for that
Fund. An investor should read that prospectus carefully before
selecting a fund for investing. The prospectus is available, at
no charge, from a salesperson or by writing Keyport Benefit'
Service Office at the address shown on Page 1 or by calling (800)
437-4466.
Eligible Funds of [XXXXX Trust]
and Variable Account Sub-Accounts Investment Objective
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TEXT HERE WILL DESCRIBE FUNDS AND INVESTMENT OBJECTIVES
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Eligible Funds of [YYYYY Fund]
and Variable Account Sub-Accounts Investment Objective
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TEXT HERE WILL DESCRIBE FUNDS AND INVESTMENT OBJECTIVES
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There is no assurance that the Eligible Funds will achieve their stated
objectives.
[XXXXX and YYYYY] Funds are funding vehicles for variable annuity contracts
and variable life insurance policies offered by separate accounts of Keyport
Benefit and of insurance companies affiliated and unaffiliated with Keyport
Benefit. The risks involved in this "mixed and shared funding" are disclosed
in the Trust's and Fund's prospectus under the caption ["The Trust"] and
[SALES AND REDEMPTIONS,] respectively.
Transfer of Variable Account Value
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The number of transfers will vary between zero (0) and the maximum
number that Keyport Benefit determines is consistent with
interpretations of applicable tax law restrictions on contract
owner control which may permit an unlimited number of transfers.
The transfer charge, if any, imposed on transfers in excess of the
stipulated number will not exceed $50. The maximum number of free
transfers, assuming the imposition of a transfer charge, will be
12. The minimum amount that may be transferred will range between
$0 and $500, and the minimum required remaining Sub-Account Value
ranges between $0 and $100.
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Certificate Owners may transfer Variable Account Value from one Sub-Account
to another Sub-Account [and/or to the Fixed Account]. [See "Recent
Developments".][Currently [x] transfers are permitted.][ The minimum amount
of Variable Account Value that may be transferred is [$500] and the remaining
Variable Account Value in the Sub-Account is [$100].]
The Certificate allows Keyport Benefit to charge a transfer fee and to limit
the number of transfers that can be made in a specified time period.
Certificate Owners should be aware that transfer limitations may prevent a
Certificate Owner from making a transfer on the date he or she wants to, with
the result that the Certificate Owner's future Certificate Value may be lower
than it would have been had the transfer been made on the desired date.
Currently, Keyport Benefit [has no limit on the number or frequency of
transfers and it] is [not] charging a transfer fee [of [n] for each transfer
in excess of [xx] per Certificate Year.] For transfers under different
Certificates that are being requested under powers of attorney with a common
attorney-in-fact or that are, in Keyport Benefit's determination, based on
the recommendation of a common investment adviser or broker/dealer, there is
a transfer limitation of one transfer every 30 days or such shorter period as
Keyport Benefit may permit.
Keyport Benefit is also limiting each transfer to a maximum of $500,000 or
such greater amount as Keyport Benefit may permit. All transfers requested
for a Certificate on the same day will be treated as a single transfer and
the total combined transfer amount will be subject to the $500,000
limitation. If the $500,000 limitation is exceeded, no amount of the
transfer will be executed by Keyport Benefit.
In applying the $500,000 limitation, Keyport Benefit may treat as one
transfer all transfers requested by a Certificate Owner for multiple
Certificates he or she owns. If the $500,000 limitation is exceeded for
multiple transfers requested on the same day that are treated as a single
transfer, no amount of the transfer will be executed by Keyport Benefit.
In applying the $500,000 limitation to transfers requested by a common
attorney-in-fact or investment adviser, Keyport Benefit will treat as one
transfer all transfers requested under different Certificates that are being
requested under powers of attorney with a common attorney-in-fact or that
are, in Keyport Benefit's determination, based on the recommendation of a
common investment adviser or broker/dealer. If the $500,000 limitation is
exceeded for multiple transfers requested on the same day that are treated as
a single transfer, no amount of the transfer will be executed by Keyport
Benefit. If a transfer is executed under one Certificate and, within the
next 30 days, a transfer request for another Certificate is determined by
Keyport Benefit to be related to the executed transfer under this paragraph's
rules, the transfer request will not be executed by Keyport Benefit. In order
for it to be executed, it would need to be requested again after the 30 day
period has expired and it, along with any other transfer requests that are
collectively treated as a single transfer, would need to total less than
$500,000.
Keyport Benefit's interest in applying these limitations is to protect the
interests of both Certificate Owners who are not engaging in significant
transfer activity and Certificate Owners who are engaging in such activity.
Keyport Benefit has determined that the actions of Certificate Owners
engaging in significant transfer activity among Sub-Accounts may cause an
adverse effect on the performance of the Eligible Fund for the Sub-Account
involved. The movement of Sub-Account values from one Sub-Account to another
may prevent the appropriate Eligible Fund from taking advantage of investment
opportunities because it must maintain a liquid position in order to handle
redemptions. Such movement may also cause a substantial increase in Fund
transaction costs which must be indirectly borne by Certificate Owners.
Certificate Owners will be notified, in advance, of the imposition of any
transfer fee or of a change in the limitation on the number of transfers.
The fee will not exceed [$50].
Transfers must be made by Written Request unless the Certificate Owner has by
Written Request authorized Keyport Benefit to accept telephone transfer
requests from the Certificate Owner or from a person acting for the
Certificate Owner as an attorney-in-fact under a power of attorney. By
authorizing Keyport Benefit to accept telephone transfer instructions, a
Certificate Owner agrees to accept and be bound by the conditions and
procedures established by Keyport Benefit from time to time. The current
conditions and procedures are in Appendix [B] and Certificate Owners
authorizing telephone transfers will be notified, in advance, of any changes.
Written transfer requests may be made by a person acting for the Certificate
Owner as an attorney-in-fact under a power of attorney.
Transfer requests received by Keyport Benefit before the close of trading on
the New York Stock Exchange (currently 4:00 PM Eastern Time) will be
initiated at the close of business that day. Any requests received later
will be initiated at the close of the next business day. Each request from a
Certificate Owner to transfer value will be executed by both redeeming and
acquiring Accumulation Units on the day Keyport Benefit initiates the
transfer.
If 100% of any Sub-Account's value is transferred and the allocation formula
for Purchase Payments includes that Sub-Account, then the allocation formula
for future Purchase Payments will automatically change unless the Certificate
Owner instructs otherwise. For example, if the allocation formula is 50% to
Sub-Account A and 50% to Sub-Account B and all of Sub-Account A's value is
transferred to Sub-Account B, the allocation formula will change to 100% to
Sub-Account B unless the Certificate Owner instructs otherwise.
Substitution of Eligible Funds and Other Variable Account Changes
If the shares of any of the Eligible Funds should no longer be available for
investment by the Variable Account or if in the judgment of Keyport Benefit's
management further investment in such fund shares should become inappropriate
in view of the purpose of the Certificate, Keyport Benefit may add or
substitute shares of another Eligible Fund or of another mutual fund for
Eligible Fund shares already purchased under the Certificate. No
substitution of Fund shares in any Sub-Account may take place without prior
approval of the Securities and Exchange Commission and notice to Certificate
Owners, to the extent required by the Investment Company Act of 1940.
Keyport Benefit has also reserved the right, subject to compliance with the
law as currently applicable or subsequently changed: (a) to operate the
Variable Account in any form permitted under the Investment Company Act of
1940 or in any other form permitted by law; (b) to take any action necessary
to comply with or obtain and continue any exemptions from the Investment
Company Act of 1940 or to comply with any other applicable law; (c) to
transfer any assets in any Sub-Account to another Sub-Account, or to one or
more separate investment accounts, or to Keyport Benefit's general account;
or to add, combine or remove Sub-Accounts in the Variable Account; and (d) to
change the way Keyport Benefit assesses charges, so long as the aggregate
amount is not increased beyond that currently charged to the Variable Account
and the Eligible Funds in connection with the Certificates.
DEDUCTIONS
[Deductions for Certificate Maintenance Charge
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The Certificate Maintenance Charge will not exceed a maximum dollar
amount of $100. Under certain forms of the Certificate Keyport
Benefit may not impose any Certificate Maintenance Charge. The
amount of purchase payments necessary to support a waiver of the
charge ranges between $1000 and $5000.
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Keyport Benefit has responsibility for all administration of the Certificates
and the Variable Account. This administration includes, but is not limited
to, preparation of the Certificates, maintenance of Certificate Owners'
records, and all accounting, valuation, regulatory and reporting
requirements. Keyport Benefit makes a Certificate Maintenance Charge for
such services during the accumulation and annuity payment periods. At the
present time the Certificate Maintenance Charge is $[36.00] per Certificate
Year. PRIOR TO THE INCOME DATE THE CERTIFICATE MAINTENANCE CHARGE IS NOT
GUARANTEED AND MAY BE CHANGED BY KEYPORT BENEFIT.
[The Certificate Maintenance Charge will be waived if:
[(i)] it is the first Certificate Anniversary,]
[(ii)] the Certificate Value is greater than or equal to [$40,000] on the
Certificate Anniversary date this charge is imposed, or
[(iii)] Purchase Payments of at least [$2,000] have been made in the prior
Certificate Year and there has been no partial withdrawal in the prior
Certificate Year.]
[The Certificate Maintenance Charge will be waived on and after the Income
Date for the current year if:
(i) variable annuity Option A is applicable; and
(ii) at the time of the first payment of the year, the present value of all
of the remaining payments (see "Option A" on Page xx) is greater than or
equal to [$40,000].]
Prior to the Income Date, the full amount of the charge will be deducted from
the Variable Account Value on each Certificate Anniversary and on the date of
any total surrender not falling on the Certificate Anniversary. On the
Income Date, a pro-rata portion of the charge due on the next Certificate
Anniversary will be deducted from the Variable Account Value. This pro-rata
charge covers the period from the prior Certificate Anniversary to the Income
Date. For example, if the Income Date occurs 73 days after that prior
anniversary, then one-fifth (i.e., 73 days/365 days) of the annual charge
would be deducted on the Income Date. The charge will be deducted from each
Sub-Account in the proportion that the value of each bears to the Variable
Account Value.
Once annuity payments begin on the Income Date or once they begin after
surrender benefits are applied under a settlement option, the yearly cost of
the Certificate Maintenance Charge for a payee's annuity will be the same as
the yearly amount in effect immediately before the annuity payments begin.
Keyport Benefit may not later change the amount of the Certificate
Maintenance Charge deducted from the annuity payments. The charge will be
deducted on a pro-rata basis from each annuity payment. For example, if
annuity payments are monthly, then one-twelfth of the annual charge will be
deducted from each payment.
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The Mortality and Expense Risk Charge as stated in the body of the
prospectus will vary between 35 and 125 basis points. The
variations will depend upon the precise combination of features
incorporated into the particular form of the Certificate.
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Deductions for Mortality and Expense Risk Charge
Although variable annuity payments made to Annuitants will vary in accordance
with the investment performance of the investments of the Variable Account,
they will not be affected by the mortality experience (death rate) of persons
receiving such payments or of the general population. Keyport Benefit
guarantees the Death Benefits described below (see "Death Benefits").
[Keyport Benefit assumes an expense risk that the asset-based Administrative
Charge will be insufficient to cover the anticipated portion of Keyport
Benefit's administrative expenses.] [Keyport Benefit assumes an expense risk
since the Certificate Maintenance Charge after the Income Date will stay the
same and not be affected by variations in expenses.]
To compensate it for assuming these mortality and expense risks, for each
Valuation Period Keyport Benefit deducts from each Sub-Account a Mortality
and Expense Risk Charge equal on an annual basis to [.35 - 1.25]% of the
average daily net asset value of the Sub-Account. The charge is deducted
during both the accumulation and annuity periods (i.e., both before and after
the Income Date). Less than the full charge will be deducted from Sub-
Account values attributable to Certificates issued to employees of Keyport
Benefit and other persons specified in "Sales of the Certificates".
[Deductions for Daily Distribution Charge
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A daily Distribution Charge may not apply to all forms of the
Certificate. It will be imposed at a maximum rate of 15 basis
points of net assets when such imposition combined with any
contingent deferred sales charge does not result in the imposition
of sales charges that exceed 9% of Purchase Payments.
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Keyport Benefit also deducts from each Sub-Account each Valuation Period a
daily Distribution Charge equal on an annual basis to 0.[15]% of the average
daily net asset value of the Sub-Account. This charge compensates Keyport
Benefit for certain sales distribution expenses relating to the Certificate.
This charge will not be deducted from Sub-Account values attributable to
Certificates that have reached the maximum cumulative distribution charge
limit defined below and to Certificates issued to employees of Keyport
Benefit and other persons specified in "Sales of the Certificates". The
charge is also not deducted from Sub-Account values attributable to Annuity
Units. Keyport Benefit may decide not to deduct the charge from Sub-Account
values attributable to a Certificate issued in an internal exchange or
transfer of an annuity contract of Keyport Benefit's general account.]
[Deductions for Daily Administrative Charge
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A daily Administrative Charge may not apply to all forms of the
Certificate. The maximum daily Administrative Charge will be 15 basis
points. This charge may be adjusted giving consideration to the amount
of the Certificate Maintenance Charge.
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Keyport Benefit also deducts from each Sub-Account each Valuation Period an
Administrative Charge equal on an annual basis to 0.[15]% of the average
daily net asset value of the Sub-Account. This charge compensates Keyport
Benefit for a portion of the administrative expenses relating to the Contract
and the Certificate.]
[Deductions for Contingent Deferred Sales Charge
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The Contingent Deferred Sales Charge may not apply to all forms of
the Certificate. The Contingent Deferred Sales Charge, including
any amounts deducted through the daily Sales Charge, will not
exceed 9% of Purchase Payments. The Contingent Deferred Sales
Charge, not including any amount deducted through the daily Sales
Charge, will in no event exceed a duration of 7 years and 7%.
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A sales charge is not deducted from the Certificate's Purchase Payments when
initially received. However, a Contingent Deferred Sales Charge may be
deducted upon a surrender.
In order to determine whether a Contingent Deferred Sales Charge will be due
upon a partial or total surrender, Keyport Benefit maintains a separate set
of records. These records identify the date and amount of each Purchase
Payment made to the Certificate and the Certificate Value over time.
Certificate Owners will be permitted to make partial surrenders during the
Accumulation Period without incurring a Contingent Deferred Sales Charge, as
follows:
1. In any Certificate Year, Certificate Owners may withdraw an aggregate
amount not to exceed, at the time of the withdrawal, the Certificate's
earnings, which equal: (a) the Certificate Value, less (b) the portion of the
Purchase Payments not previously withdrawn.
2. In any Certificate Year after the first, Certificate Owners may
withdraw, in addition to the amount available in 1., the amount by which 10%
of the Certificate Value as of the preceding Certificate Anniversary exceeds
the amount available in 1.
Contingent Deferred Sales Charges, as discussed below, will be deducted with
respect to withdrawals in excess of these amounts.
In computing the applicable charge amounts, the amount of any surrender in
any Certificate Year after the first as set forth in 2. above, will be
deducted from the Purchase Payments in chronological order from the oldest to
the most recent until the amount is fully deducted. Any amount so deducted
will not be subject to a charge.
The following additional amounts will be deducted from the Purchase Payments
in the same chronological order: the amount of any surrender in the first
Certificate Year in excess of the amount set forth in 1. above and the amount
of any surrender in any later Certificate Year in excess of the combined
amount set forth in 1. and 2. above. The Contingent Deferred Sales Charge for
each Purchase Payment from which a deduction is made will be equal to (a)
multiplied by (b), where:
(a) is the amount so deducted; and
(b) is the applicable percentage for the number of years that have elapsed
from the date of that payment to the date of surrender. Years are
measured from the month and day of payment to the same month and day in
each subsequent calendar year. The percentages applicable to each
Purchase Payment during the [seven] years after the date of its payment
are: [7% during year 1; 6% during year 2; 5% during year 3; 4% during
year 4; 3% during year 5; 2% during year 6; 1% during year 7;] and 0%
thereafter.
The applicable Contingent Deferred Sales Charges for each Purchase Payment
are then totalled. The lesser of this total amount and the Certificate's
maximum cumulative distribution charge will be deducted from the Certificate
Value in the same manner as the surrender amount. The maximum cumulative
distribution charge is equal to (a) less (b), where (a) is 9% of the total
Purchase Payments made to the Certificate and (b) is the sum of all prior
Contingent Deferred Sale Charge deductions from the Certificate Value [and
all prior Variable Account daily distribution charges applicable to the
Certificate from the 0.15% distribution charge factor.] After each
surrender, Keyport Benefit's records will be adjusted to reflect any
deductions made from the applicable Purchase Payments.
Example: Two Purchase Payments were made one year apart for $5,000 and
$7,000. The Certificate Value has grown to an assumed $13,200 when the
Certificate Owner decides to withdraw $8,000. The Certificate Value at the
beginning of the Certificate Year of surrender was $13,000. The Contingent
Deferred Sales Charge percentages at the time of surrender are an assumed 5%
for the $5,000 payment and 6% for the $7,000 payment. The portion of the
surrender representing the Certificate's earnings ($13,200 less $12,000, or
$1,200) would not be subject to charges. Since $1,200 is less than the
amount guaranteed not to have charges (10% of $13,000, or $1,300), an
additional $100 would not be subject to charges. This $100 would be deducted
from the oldest Purchase Payment, reducing it from $5,000 to $4,900. The
$1,200 increase in value plus the additional $100 leaves $6,700 ($8,000 -
1,200 - 100) to be deducted. This $6,700 would be deducted from the $4,900
of the first payment still left and $1,800 of the second payment. The total
Contingent Deferred Sales Charge would be $4,900 multiplied by the applicable
5% and $1,800 times the applicable 6%, or a total of $353. The distribution
charge records would now reflect $0 for the 1st payment and $5,200 for the
2nd payment. The $8,000 requested plus the $353 charge would be deducted
from Certificate Values under the rules specified in the "Partial Withdrawals
and Surrender" on Page x.
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The maximum compensation payable on the sale of Certificates is 6.50%
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The Contingent Deferred Sales Charge, when it is applicable, will be used to
cover the expenses of selling the Certificate, including compensation paid to
selling dealers and the cost of sales literature. Any expenses not covered
by the charge will be paid from Keyport Benefit's general account, which may
include monies deducted from the Variable Account for the Mortality and
Expense Risk Charge. A dealer selling the Certificate may receive up to
[6.25%] of Purchase Payments [with additional compensation later based on the
Certificate Value of those payments. During certain time periods selected by
Keyport Benefit and [KFSC], the percentage may increase to [6.50]%.] [In
addition, under certain circumstances, Keyport Benefit or certain of its
affiliates, under a marketing support agreement with [KFSC] may pay certain
sellers for other services not directly related to the sale of the
Certificates such as special marketing support allowances.]
The Contingent Deferred Sales Charge will be waived in the event a Covered
Person is confined in a medical facility in accordance with the provisions
and conditions of an endorsement relating to such confinements.
The Contingent Deferred Sales Charge will be eliminated under Certificates
issued to employees of Keyport Benefit and other persons specified in "Sales
of the Certificates".
[Keyport Benefit may reduce or change to 0% any Contingent Deferred Sales
Charge percentage under a Certificate issued in an internal exchange or
transfer of an annuity contract of Keyport Benefit's general account.]
[Keyport Benefit may allow, under the Systematic Withdrawal Program and under
other permitted circumstances, all or part of the amount in 2. above to also
be available in the first Certificate Year. If so, the amount in 2. above
will be calculated by substituting the initial Purchase Payment for the
Certificate Value.]
[Deductions for Transfers of Variable Account Value
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The charge for transfers will range from zero to an amount not to
exceed $50.
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The Certificate allows Keyport Benefit to charge a transfer fee. Currently no
fee is being charged. Certificate Owners will be notified, in advance, of
the imposition of any fee. The fee will not exceed $[50].]
Deductions for Premium Taxes
Keyport Benefit deducts the amount of any premium taxes levied by any state
or governmental entity when paid unless Keyport Benefit elects to defer such
deduction. Such premium taxes depend, among other things, on the type of
Certificate (Qualified or Non-Qualified), on the state of residence of the
Certificate Owner, the state of residence of the Annuitant, the status of
Keyport Benefit within such states, and the insurance tax laws of such
states. For New York Certificates, the current premium tax rate is 0%.
Deductions for Income Taxes
Keyport Benefit will deduct from any amount payable under the Certificate any
income taxes that a governmental authority requires Keyport Benefit to
withhold with respect to that amount. See "Income Tax Withholding" and "Tax-
Sheltered Annuities".
Total Variable Account Expenses
The Variable Account's total expenses in relation to the Certificate will be
[the Certificate Maintenance Charge,] the Mortality and Expense Risk Charge,
[the Daily Sales Charge, and the Daily Administrative Charge.]
The value of the assets in the Variable Account will reflect the value of
Eligible Fund shares and therefore the deductions from and expenses paid out
of the assets of the Eligible Funds. These deductions and expenses are
described in the Eligible Fund prospectus.
OTHER SERVICES
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Each of the following Programs may or may not be offered under any
form of the Certificate. If only one Program is offered, the plural
nature of the first two paragraphs will be adjusted accordingly.
The minimum amount that may be transferred under the Dollar Cost
Averaging Program ranges between $75 and $750. The required notice
period for the Rebalancing Program will not exceed thirty days. The
minimum Purchase Payment for the Systematic Investment Program
ranges between $50 and $1000. The minimum amount that may be
withdrawn under the Systematic Withdrawal Program ranges between
$100 and $250.
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The Programs. Keyport Benefit offers several investment related programs
which are available only prior to the Income Date: [Asset Allocation];
[Dollar Cost Averaging]; [Systematic Investment]; and [Systematic Withdrawal]
Programs. [A Rebalancing Program is available prior to and after the Income
Date.] Under each Program that utilizes transfers, the related transfers
between and among Sub-Accounts [and the Fixed Account] are not counted as one
of the [twelve] free transfers. Each of the Programs has its own
requirements, as discussed below. Keyport Benefit reserves the right to
terminate any Program.
If the Certificate Owner has submitted the required telephone authorization
form, certain changes may be made by telephone. For those Programs involving
transfers, Owners may change instructions by telephone with regard to which
Sub-Accounts [or the Fixed Account] Certificate Value may be transferred.
The current conditions and procedures are described in Appendix [B].
[Dollar Cost Averaging Program. Keyport Benefit offers a Dollar Cost
Averaging program that Certificate Owners may participate in by Written
Request. The program periodically transfers Accumulation Units from the [XX-
1] Sub-Account [or the One-Year Guarantee Period of the Fixed Account] to
other Sub-Accounts selected by the Certificate Owner. The program allows a
Certificate Owner to invest in Variable Sub-Accounts over time rather than
having to invest in those Sub-Accounts all at once. The program is available
for initial and subsequent Purchase Payments and for Certificate Value
transferred into the [XX-1] Sub-Account [or the One-Year Guarantee Period.]
Under the program, Keyport Benefit makes automatic transfers on a periodic
basis out of the [XX-1] Sub-Account [or the One-Year Guarantee Period] into
one or more of the other available Sub-Accounts (Keyport Benefit reserves the
right to limit the number of Sub-Accounts the Certificate Owner may choose
but there are currently no limits).
The Certificate Owner by Written Request must specify the [XX-1] Sub-Account
[or the One-Year Guarantee Period] from which the transfers are to be made,
the monthly amount to be transferred [(minimum $750)] and the Sub-Account(s)
to which the transfers are to be made. The first transfer will occur at the
close of the Valuation Period that includes the 30th day after the receipt of
the Certificate Owner's Written Request. Each succeeding transfer will occur
one month later (e.g., if the 30th day after the receipt date is April 8, the
second transfer will occur at the close of the Valuation Period that includes
May 8). When the remaining value is less than the monthly transfer amount,
that remaining value will be transferred and the program will end. Before
this final transfer, the Certificate Owner may extend the program by
allocating additional Purchase Payments to the [XX-1] Sub-Account [or the One-
Year Guarantee Period] or by transferring Certificate Value to the [XX-1] Sub-
Account [or the One-Year Guarantee Period.] The Certificate Owner may, by
Written Request or by telephone, change the monthly amount to be transferred,
change the Sub-Account(s) to which the transfers are to be made, or end the
program. The program will automatically end if the Income Date occurs.
Keyport Benefit reserves the right to end the program at any time by sending
the Certificate Owner a notice one month in advance.
Written or telephone instructions must be received by Keyport Benefit by the
end (currently 4:00 PM Eastern Time) of the business day preceding the next
scheduled transfer in order to be in effect for that transfer. Telephone
instructions are subject to the conditions and procedures established by
Keyport Benefit from time to time. The current conditions and procedures
appear in Appendix [B], and Certificate Owners in a dollar cost averaging
program will be notified, in advance, of any changes.]
[Asset Allocation Program
Certificate Owners may select from five asset allocation model portfolios
separately developed by Ibbotson Associates and Standard & Poor's. (Model A
- - Capital Preservation, Model B - Income and Growth, Model C - Moderate
Growth, Model D - Growth, and Model E - Aggressive Growth.) If a Certificate
Owner elects one of the models, initial and subsequent Purchase Payments will
automatically be allocated among the Sub-Accounts in the model. Only one
model may be used in a Certificate at a time. Certificate Owners may use a
questionnaire and scoring system to determine the model which corresponds to
their risk tolerance and time horizons.
Periodically Ibbotson Associates and Standard & Poor's will review the models
and may determine that a reconfiguration of the Sub-Accounts and percentage
allocations among those Sub-Accounts is appropriate. Certificate Owners will
receive notification prior of any reconfiguration.
[The Fixed Account is not available in any asset allocation model. A
Certificate Owner may allocate initial or subsequent Purchase Payments, or
Certificate Value, between an asset allocation model and the Fixed Account.]]
[Rebalancing Program. In accordance with the Certificate Owner's election of
the relative Purchase Payments percentage allocations, Keyport Benefit will
automatically rebalance the Certificate Value of each Sub-Account either
monthly, quarterly, semi-annually, or annually. On the last day of the
period selected, Keyport Benefit will automatically rebalance the Certificate
Value in each of the Sub-Accounts to match the current Purchase Payments
percentage allocations. The Program may be terminated at any time and the
percentages may be altered by Written Request. The requested change must be
received at the Service Office [thirty (30)] days prior to the end of the
period selected. [Certificate Value allocated to the Fixed Account is not
subject to automatic rebalancing.] After the Income Date, automatic
rebalancing applies only to variable annuity payments and Keyport Benefit
will rebalance the number of Annuity Units in each Sub-Account. Annuity
Units are used to calculate the amount of each Sub-Account annuity payment;
see "Variable Annuity Benefits") in the Statement of Additional Information.]
[Systematic Investment Program. Purchase Payments under Non-Qualified
Certificates may be made by monthly deductions from the bank account [or
payroll] of any Certificate Owner that has completed and returned to Keyport
Benefit a Systematic Investment Program application and authorization form.
The application and authorization form may be obtained from Keyport Benefit
or from the sales representative. Each Systematic Investment Program
Purchase Payment is subject to a minimum of $50.]
[Systematic Withdrawal Program. To the extent permitted by law, Keyport
Benefit will make monthly, quarterly, semi-annually or annual distributions
of a predetermined dollar amount to a Certificate Owner that has enrolled in
the Systematic Withdrawal Program. Under the Program, all distributions will
be made directly to the Certificate Owner and will be treated for federal tax
purposes as any other withdrawal or distribution of Certificate Value. (See
"Tax Status".) A Certificate Owner may specify the amount of each partial
withdrawal, subject to a minimum of [$50]. [Systematic withdrawals may
[only] be made from the Sub-Accounts [and the [One] Year Guarantee Period of
the Fixed Account.]] [In each Certificate Year, portions of Certificate Value
may be withdrawn without the imposition of any Contingent Deferred Sales
Charge ("Free Withdrawal Amount"). If withdrawals pursuant to the Program
are greater than the Free Withdrawal Amount, the amount of the withdrawals
greater than the Free Withdrawal Amount will be subject to the applicable
Contingent Deferred Sales Charge. Any unrelated voluntary partial withdrawal
a Certificate Owner makes during a Certificate Year will be aggregated with
withdrawals pursuant to the Program to determine the applicability of any
Contingent Deferred Sales Charge under the Certificate provisions regarding
partial withdrawals.]
Unless the Certificate Owner specifies the Sub-Account or Sub-Accounts [or
the Fixed Account] from which withdrawals of Certificate Value shall be made
or if the amount in a specified Sub-Account is less than the predetermined
amount, Keyport Benefit will make withdrawals under the Program from the Sub-
Accounts [and the Fixed Account] in amounts proportionate to the amounts in
the Sub-Accounts [and the Fixed Account.] All withdrawals under the Program
will be effected by canceling the number of Accumulation Units equal in value
to the amount to be distributed to the Certificate Owner [and any applicable
Contingent Deferred Sales Charge].
[The Program may be combined with all other Programs [except the Systematic
Investment Program].]
[It may not be advisable to participate in the Systematic Withdrawal Program
and incur a Contingent Deferred Sales Charge when making additional Purchase
Payments under the Certificate.]]
THE CERTIFICATES
Variable Account Value
The Variable Account Value for a Certificate is the sum of the value of each
Sub-Account to which values are allocated under a Certificate. The value of
each Sub-Account is determined at any time by multiplying the number of
Accumulation Units attributable to that Sub-Account by the Accumulation Unit
value for that Sub-Account at the time of determination. The Accumulation
Unit value is an accounting unit of measure used to determine the change in
an Accumulation Unit's value from Valuation Period to Valuation Period.
Each Purchase Payment that is made results in additional Accumulation Units
being credited to the Certificate and the appropriate Sub-Account thereunder.
The number of additional units for any Sub-Account will equal the amount
allocated to that Sub-Account divided by the Accumulation Unit value for that
Sub-Account at the time of investment.
Valuation Periods
The Variable Account is valued each Valuation Period using the net asset
value of the Eligible Fund shares. A Valuation Period is the period
commencing at the close of trading on the New York Stock Exchange on each
Valuation Date and ending at the close of trading for the next succeeding
Valuation Date. A Valuation Date is each day that the New York Stock
Exchange is open for business. The New York Stock Exchange is currently
closed on weekends, New Year's Day, Martin Luther King, Jr. Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas Day.
Net Investment Factor
Variable Account Value will fluctuate in accordance with the investment
results of the underlying Eligible Funds. In order to determine how these
fluctuations affect value, Keyport Benefit utilizes an Accumulation Unit
value. Each Sub-Account has its own Accumulation Units and value per Unit.
The Unit value applicable during any Valuation Period is determined at the
end of that period.
When Keyport Benefit first purchased Eligible Fund shares on behalf of the
Variable Account, Keyport Benefit valued each Accumulation Unit at a
specified dollar amount. The Unit value for each Sub-Account in any
Valuation Period thereafter is determined by multiplying the value for the
prior period by a net investment factor. This factor may be greater or less
than 1.0; therefore, the Accumulation Unit may increase or decrease from
Valuation Period to Valuation Period. Keyport Benefit calculates a net
investment factor for each Sub-Account by dividing (a) by (b) and then
subtracting (c) (i.e., (a/b) _ c), where:
(a) is equal to:
(i) the net asset value per share of the Eligible Fund at the end
of the Valuation Period; plus
(ii) the per share amount of any distribution made by the Eligible
Fund if the "ex-dividend" date occurs during that same Valuation
Period.
(b) is the net asset value per share of the Eligible Fund at the end of the
prior Valuation Period.
(c) is equal to:
(i) the Valuation Period equivalent of the Mortality and
Expense Risk Charge; plus
[(ii) the Valuation Period equivalent of the daily
Distribution Charge; plus]
[(iii) the Valuation Period equivalent of the daily
Administrative Charge; plus]
[(iv)] a charge factor, if any, for any tax provision
established by Keyport Benefit as a result of the operations
of that Sub-Account.
[If a Certificate ever reaches the maximum cumulative sales charge limit
defined in "Deductions for Contingent Deferred Sales Charge", Unit values
without (c)(ii) above will be used thereafter.] For Certificates issued to
employees of Keyport Benefit and other persons specified in "Sales of the
Certificates", Unit values with [.35]% in (c)(i) above [and without (c)(ii)
above will be used. Unit values without (c)(ii) above may be used for
certain Certificates issued in an internal exchange or transfer (see
"Deductions for Daily Distribution Charges".]
Modification of the Certificate
Only Keyport Benefit's President or Secretary may agree to alter the
Certificate or waive any of its terms. Any changes must be made in writing
and with the Certificate Owner's consent, except as may be required by
applicable law.
Right to Revoke
The Certificate Owner may return the Certificate within 10 days after he or
she receives it by delivering or mailing it to Keyport Benefit's Service
Office. The return of the Certificate by mail will be effective when the
postmark is affixed to a properly addressed and postage-prepaid envelope.
The returned Certificate will be treated as if Keyport Benefit never issued
it and Keyport Benefit will refund the Certificate Value.
DEATH PROVISIONS FOR NON-QUALIFIED CERTIFICATES
Death of Primary Owner, Joint Owner or Certain Non-Owner Annuitant
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One or more of the three Death Benefit options described below may
be included under any form of the Certificate.
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These provisions apply if, before the Income Date while the Certificate is In
Force, the primary Certificate Owner or any joint Certificate Owner dies
(whether or not the decedent is also the Annuitant) or the Annuitant dies
under a Certificate with a non-natural Certificate Owner such as a trust.
The Designated Beneficiary will control the Certificate after such a death.
If the decedent's surviving spouse (if any) is the sole Designated
Beneficiary, the surviving spouse will automatically become the new sole
primary Certificate Owner as of the decedent's date of death. And, if the
Annuitant is the decedent, the new Annuitant will be any living contingent
annuitant, otherwise the surviving spouse. The Certificate may continue
until another death occurs (i.e., until the death of the Annuitant, primary
Certificate Owner or joint Certificate Owner). Except for this paragraph, all
of "Death Provisions" will apply to that subsequent death.
In all other cases, the Certificate may continue up to five years from the
date of death. During this period, the Designated Beneficiary may exercise
all ownership rights, including the right to make transfers or partial
surrenders or the right to totally surrender the Certificate for its
Surrender Value. If the Certificate is still in effect at the end of the
five-year period, Keyport Benefit will automatically end it then by paying
the Certificate Value to the Designated Beneficiary. If the Designated
Beneficiary is not then alive, Keyport Benefit will pay any person(s) named
by the Designated Beneficiary in a Written Request; otherwise the Designated
Beneficiary's estate.
The Covered Person under this paragraph shall be [the decedent if he or she
is the first to die of] the primary Certificate Owner, [Joint Certificate
Owner], [Annuitant], or, if there is a non-natural Certificate Owner such as
a trust, the Annuitant shall be the Covered Person. If the Covered Person
dies, the Certificate Value will be increased, as provided below, if it is
less than the Death Benefit Amount ("DBA"). The DBA is:
[[1]. The DBA at issue is the initial Purchase Payment. Thereafter, it is
the prior death benefit plus any additional Purchase Payments, less any
partial withdrawals, including any applicable surrender charge.]
[[2]. The DBA at issue is the initial Purchase Payment. Thereafter, the DBA
is calculated for each Valuation Period by adding any additional Purchase
Payments, and deducting any partial withdrawals, including any applicable
surrender charge. This resulting amount is the "net Purchase Payment death
benefit". The Certificate Value for each Certificate Anniversary (the
"Anniversary Value") before the [81st] birthday of the Covered Person is
determined. Each Anniversary Value is increased by any Purchase Payments
made after that anniversary. This resultant value is then decreased by an
amount calculated at the time of any partial withdrawal made after that
anniversary. The amount is calculated by taking the amount of any partial
withdrawal, and dividing by the Certificate Value immediately preceding the
partial withdrawal, and then multiplying by the Anniversary Value immediately
preceding the withdrawal. The greatest Anniversary Value, as so adjusted,
(the "greatest Anniversary Value") is the DBA unless the net Purchase Payment
death benefit is higher. The net Purchase Payment death benefit will be the
DBA if such amount is higher than the greatest Anniversary Value.]
[[3]. The DBA at issue is the initial Purchase Payment. Thereafter, the DBA
is calculated for each Valuation Period by applying a death benefit interest
rate to the previously calculated DBA, adding any Purchase Payments made
during the current Valuation Period and deducting any partial withdrawals,
including any applicable surrender charge, taken during the current Valuation
Period. The death benefit interest rate is applied to each Purchase Payment
until it equals the Maximum Guaranteed Death Benefit. Initially, the Maximum
Guaranteed Death Benefit will be a multiple of the initial and additional
Purchase Payments made, each computed separately, determined as of the date
of death based on such factors as the then stipulated interest rate or the
net rate of return of certain Sub-Accounts [or the Fixed Account], as
described below. Thereafter, the Maximum Guaranteed Death Benefit as of the
effective date of a partial withdrawal is reduced first by the amount of the
withdrawal representing earnings and second in proportion to the reduction in
Certificate Value for any partial withdrawal representing Purchase Payments.
The death benefit interest rate compounded annually will be a stipulated
interest rate, except that with regard to amounts in the Sub-Accounts
investing in money market, short term bond or income Funds or [the General
Account (the "Fixed Account")] the interest rate applied will be the net rate
of return for such Funds, respectively, if it is less than the stipulated
death benefit interest rate.]
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The period of time during which the Surrender Charge may be waived following
death ranges between 60 and 180 days.
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When Keyport Benefit receives due proof of the Covered Person's death,
Keyport Benefit will compare, as of the date of death, the Certificate Value
to the DBA. If the Certificate Value was less than the DBA, Keyport Benefit
will increase the current Certificate Value by the amount of the difference.
Note that while the amount of the difference is determined as of the date of
death, that amount is not added to the Certificate Value until Keyport
Benefit receives due proof of death. The amount to be credited will be
allocated to the Variable Account [and/or the Fixed Account] based on the
Purchase Payment allocation selection that is in effect when Keyport Benefit
receives due proof of death. [Whether or not the Certificate Value is
increased because of this minimum death provision, the Designated Beneficiary
may, by the later of the 90th day after the Covered Person's death and the
60th day after Keyport Benefit is notified of the death, surrender the
Certificate for the Certificate Withdrawal Value without any applicable
Contingent Deferred Sales Charge being deducted. For a surrender after the
applicable 90 or 60 day period and for a surrender at any time after the
death of a non-Covered Person, any applicable Contingent Deferred Sales
Charge would be deducted.] If the Certificate is not surrendered, it will
continue for the time period specified above.
Payment of Benefits. Instead of receiving a lump sum, the Certificate Owner
or any Designated Beneficiary may direct by Written Request that Keyport
Benefit pay any benefit of $5,000 or more under an annuity payment option
that meets the following: (a) the first payment to the Designated Beneficiary
must be made no later than one year after the date of death; (b) payments
must be made over the life of the Designated Beneficiary or over a period not
extending beyond that person's life expectancy; and (c) any payment option
that provides for payments to continue after the death of the Designated
Beneficiary will not allow the successor payee to extend the period of time
over which the remaining payments are to be made.
Death of Certain Non-Certificate Owner Annuitant. These provisions apply if,
before the Income Date while the Certificate is In Force, (a) the Annuitant
dies, (b) the Annuitant is not a Certificate Owner, and (c) the Certificate
Owner is a natural person. The Certificate will continue after the
Annuitant's death. The new Annuitant will be any living contingent
annuitant, otherwise the primary Certificate Owner. If the Annuitant is the
first to die of the Certificate's primary Certificate Owner, Joint
Certificate Owner and Annuitant, then the Annuitant is the Covered Person and
the Certificate Value will be increased, as provided below, if it is less
than the Death Benefit Amount ("DBA"), as defined above. When Keyport Benefit
receives due proof of the Annuitant's death, Keyport Benefit will compare, as
of the date of death, the Certificate Value to the DBA. If the Certificate
Value was less than the DBA, Keyport Benefit will increase the current
Certificate Value by the amount of the difference. Note that while the
amount of the difference is determined as of the date of death, that amount
is not added to the Certificate Value until Keyport Benefit receives due
proof of death. The amount to be credited will be allocated to the Variable
Account and/or the Fixed Account based on the Purchase Payment allocation
selection that is in effect when Keyport Benefit receives due proof of death.
Whether or not the Certificate Value is increased because of this minimum
death provision, the Certificate Owner may surrender the Certificate within
90 days of the date of the Annuitant's death for the Certificate Withdrawal
Value without any applicable Contingent Deferred Sales Charge being deducted.
For a surrender after 90 days, any applicable Contingent Deferred Sales
Charge would be deducted.
DEATH PROVISIONS FOR QUALIFIED CERTIFICATES
Death of Annuitant. If the Annuitant dies before the Income Date while the
Certificate is In Force, the Designated Beneficiary will control the
Certificate after such a death. The Certificate Value will be increased, as
provided below, if it is less than the Death Benefit Amount ("DBA") as
defined above. When Keyport Benefit receives due proof of the Annuitant's
death, Keyport Benefit will compare, as of the date of death, the Certificate
Value to the DBA. If the Certificate Value was less than the DBA, Keyport
Benefit will increase the current Certificate Value by the amount of the
difference. Note that while the amount of the difference is determined as of
the date of death, that amount is not added to the Certificate Value until
Keyport Benefit receives due proof of death. The amount to be credited will
be allocated to the Variable Account [and/or the Fixed Account] based on the
Purchase Payment allocation selection that is in effect when Keyport Benefit
receives due proof of death. [Whether or not the Certificate Value is
increased because of this minimum death provision, the Designated Beneficiary
may, by the later of the 90th day after the Annuitant's death and the 60th
day after Keyport Benefit is notified of the death, surrender the Certificate
for the Certificate Withdrawal Value without any applicable Contingent
Deferred Sales Charge being deducted. For a surrender after the applicable
90 or 60 day period, any applicable Contingent Deferred Sales Charge would be
deducted.]
If the Certificate is not surrendered, it may continue for the time period
permitted by the Internal Revenue Code provisions applicable to the
particular Qualified Plan. During this period, the Designated Beneficiary
may exercise all ownership rights, including the right to make transfers or
partial withdrawals or the right to totally surrender the Certificate for its
Certificate Withdrawal Value. If the Certificate is still in effect at the
end of the period, Keyport Benefit will automatically end it then by paying
the Certificate Withdrawal Value (without the deduction of any applicable
Contingent Deferred Sales Charge) to the Designated Beneficiary. If the
Designated Beneficiary is not alive then, Keyport Benefit will pay any
person(s) named by the Designated Beneficiary in a Written Request; otherwise
the Designated Beneficiary's estate.
Payment of Benefits. Instead of receiving a lump sum, the Certificate Owner
or any Designated Beneficiary may direct by Written Request that Keyport
Benefit pay any benefit of $5,000 or more under an annuity payment option
that meets the following: (a) the first payment to the Designated Beneficiary
must be made no later than one year after the date of death; (b) payments
must be made over the life of the Designated Beneficiary or over a period not
extending beyond that person's life expectancy; and (c) any payment option
that provides for payments to continue after the death of the Designated
Beneficiary will not allow the successor payee to extend the period of time
over which the remaining payments are to be made.
CERTIFICATE OWNERSHIP
The Certificate Owner shall be the person designated in the application. The
Certificate Owner may exercise all the rights of the Certificate. Joint
Certificate Owners are permitted but not contingent Certificate Owners.
The Certificate Owner may by Written Request change the Certificate Owner,
primary beneficiary, contingent beneficiary or contingent annuitant. An
irrevocably-named person may be changed only with the written consent of such
person.
Because a change of Certificate Owner by means of a gift (i.e., a transfer
without full and adequate consideration) may be a taxable event, a
Certificate Owner should consult a competent tax adviser as to the tax
consequences resulting from such a transfer.
Any Qualified Certificate may have limitations on transfer of ownership. A
Certificate Owner should consult the Plan Administrator and a competent tax
adviser as to the tax consequences resulting from such a transfer.
ASSIGNMENT
The Certificate Owner may assign the Certificate at any time. A copy of any
assignment must be filed with Keyport Benefit. The Certificate Owner's
rights and those of any revocably-named person will be subject to the
assignment. Any Qualified Certificate may have limitations on assignability.
Because an assignment may be a taxable event, a Certificate Owner should
consult a competent tax adviser as to the tax consequences resulting from any
such assignment.
PARTIAL WITHDRAWALS AND SURRENDER
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The minimum amount to be withdrawn will range between $100 and $500
and required Certificate Value following a withdrawal will range
between $500 to $2500.
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The Certificate Owner may make partial withdrawals from the Certificate.
Keyport Benefit must receive a Written Request and the minimum amount to be
withdrawn must be at least [$300] or such lesser amount as Keyport Benefit
may permit in conjunction with a Systematic Withdrawal Program. If the
Certificate Value after a partial withdrawal would be below $[2,500], Keyport
Benefit will treat the request as a withdrawal of only the excess amount over
$[2,500]. [The amount withdrawn will include any applicable Contingent
Deferred Sales Charge and therefore the amount actually withdrawn may be
greater than the amount of the surrender check requested.] Unless the
request specifies otherwise, the total amount withdrawn will be deducted from
all Sub-Accounts of the Variable Account in the ratio that the value in each
Sub-Account bears to the total Variable Account Value. [If there is no
value, or insufficient value, in the Variable Account, then the amount
surrendered, or the insufficient portion, will be deducted from the Fixed
Account in the ratio that each Guarantee Period's value bears to the total
Fixed Account Value.]
The Certificate Owner may totally surrender the Certificate by making a
Written Request. Surrendering the Certificate will end it. Upon surrender,
the Certificate Owner will receive the Certificate Withdrawal Value.
Keyport Benefit will pay the amount of any surrender within seven days of
receipt of such request. Alternatively, the Certificate Owner may purchase
for himself or herself an annuity option with any surrender benefit of at
least $5,000. Keyport Benefit's consent is needed to choose an option if the
Certificate Owner is not a natural person.
Annuity options based on life contingencies cannot be surrendered after
annuity payments have begun. Option A, which is not based on life
contingencies, may be surrendered if a variable payout has been selected.
Because of the potential tax consequences of a full or partial surrender, a
Certificate Owner should consult a competent tax adviser regarding a
surrender.
ANNUITY PROVISIONS
Annuity Benefits
If the Annuitant is alive on the Income Date and the Certificate is In Force,
payments will begin under the annuity option or options the Certificate
Owner has chosen. The amount of the payments will be determined by applying
the Certificate Value [increased or decreased by a limited Market Value
Adjustment of Fixed Account Value described in Appendix A](less any premium
taxes not previously deducted [and less any applicable Certificate
Maintenance Charge]) on the Income Date in accordance with the option
selected.
Income Date and Annuity Option
The Certificate Owner may select an Income Date and an Annuity Option at the
time of application. If the Certificate Owner does not select a Annuity
Option, Option B will automatically be designated. If the Certificate Owner
does not select an Income Date for the Annuitant, the Income Date will
automatically be the earlier of (i) the later of the Annuitant's 90th
birthday and the 10th Certificate Anniversary and (ii) any maximum date
permitted under state law.
Change in Income Date and Annuity Option
The Certificate Owner may choose or change an Annuity Option or the Income
Date by making a Written Request to Keyport Benefit at least 30 days prior to
the Income Date. However, any Income Date must be: (a) for fixed annuity
options, not earlier than the first Certificate Anniversary; and (b) not
later than the earlier of (i) the later of the Annuitant's 90th birthday and
the 10th Certificate Anniversary and (ii) any maximum date permitted under
state law.
Annuity Options
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Keyport Benefit does not currently anticipate offering any
additional variable annuity options, but may offer additional fixed
annuity options. Any additional variable annuity options would be
limited to those that could be added by a filing pursuant to Rule
497 or Rule 485(b).
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The Annuity Options are:
Option A: Income for a Fixed Number of Years;
Option B: Life Income with 10 Years of Payments Guaranteed; and
Option C: Joint and Last Survivor Income.
Other options may be arranged by mutual consent. Each option is available in
two forms--as a variable annuity for use with the Variable Account and as a
fixed annuity for use with [Keyport Benefit's general account] [Fixed
Account]. Variable annuity payments will fluctuate while fixed annuity
payments will not. The dollar amount of each fixed annuity payment will be
determined by deducting from the Certificate Value [increased or decreased by
a limited Market Value Adjustment described in Appendix A] any premium taxes
not previously deducted and any applicable Certificate Maintenance Charge and
then dividing the remainder by $1,000 and multiplying the result by the
greater of: (a) the applicable factor shown in the appropriate table in the
Certificate; or (b) the factor currently offered by Keyport Benefit at the
time annuity payments begin. This current factor may be based on the sex of
the payee unless to do so would be prohibited by law.]
If no Annuity Option is selected, Option B will automatically be applied.
Unless the Certificate Owner chooses otherwise, Variable Account Value, less
any premium taxes not previously deducted [and less any applicable
Certificate Maintenance Charge] will be applied to a variable annuity option
[and Fixed Account Value [increased or decreased by a limited Market Value
Adjustment described in Appendix A] less any premium taxes not previously
deducted will be applied to a fixed annuity option.] Whether variable or
fixed, the same Certificate Value applied to each option will produce a
different initial annuity payment as well as different subsequent payments.
The payee is the person who will receive the sum payable under an annuity
option. Any annuity option that provides for payments to continue after the
death of the payee will not allow the successor payee to extend the period of
time over which the remaining payments are to be made.
If the amount available to apply under any variable or fixed option is less
than $5,000, Keyport Benefit has reserved the right to pay such amount in one
sum to the payee in lieu of the payment otherwise provided for.
Annuity payments will be made monthly unless quarterly, semi-annual or annual
payments are chosen by Written Request. However, if any payment provided for
would be or becomes less than $100, Keyport Benefit has the right to reduce
the frequency of payments to such an interval as will result in each payment
being at least $100.
Option A: Income For a Fixed Number of Years. Keyport Benefit will pay an
annuity for a chosen number of years, not fewer than 5 nor over [50] [(a
period of years over 30 may be chosen only if it does not exceed the
difference between age 100 and the Annuitant's age on the date of the first
payment)]. [Option A is referred to as Preferred Income Plan (PIP).] At any
time while variable annuity payments are being made, the payee may elect to
receive the following amount: (a) the present value of the remaining
payments, commuted at the interest rate used to create the annuity factor for
this option (this interest rate is [5%] per year, unless [3]% per year is
chosen by Written Request at the time the option is selected); [less (b) any
Contingent Deferred Sales Charge due by treating the value defined in (a) as
a total surrender. (See "Deductions for Contingent Deferred Sales Charge".]
Instead of receiving a lump sum, the payee may elect another payment option
and the amount applied to the option will not be reduced by the charge
defined in (b) above. If, at the death of the payee, Option A payments have
been made for fewer than the chosen number of years:
(a) payments will be continued during the remainder of the period to the
successor payee; or
(b) that successor payee may elect to receive in a lump sum the present
value of the remaining payments, commuted at the interest rate used to
create the annuity factor for this option. For the variable annuity,
this interest rate is [5%] per year, unless [3]% per year has been
chosen by the payee at the time the option is selected.
The Mortality and Expense Risk Charge is deducted during the Option A payment
period if a variable payout has been selected, but Keyport Benefit has no
mortality risk during this period.
[Keyport Benefit has available a "level monthly" payment option that can be
chosen for variable payments under Option A. Under this option, the monthly
payment amount changes every twelve months instead of every month as would be
the case under the standard monthly payment frequency. The "level monthly"
option converts an annual payment amount into twelve equal monthly payments
as follows. Each annual payment will be determined as described below in
"Variable Annuity Payment Values". Each annual payment will then be placed
in Keyport Benefit's general account, from which it will be paid out in
twelve equal monthly payments. The sum of the twelve monthly payments will
exceed the annual payment amount because of an interest rate factor used by
Keyport Benefit that will vary from year to year. If the payments are
commuted, (1) the commutation method described above for calculating the
present value of remaining payments applies to any remaining annual payments
and (2) any unpaid monthly payments out of the current twelve will be
commuted at the interest rate that was used to determine those twelve current
monthly payments.]
See "Annuity Payments" on Page x for the manner in which Option A may be
taxed.
Option B: Life Income with 10 Years of Payments Guaranteed. Keyport Benefit
will pay an annuity during the lifetime of the payee. If, at the death of
the payee, payments have been made for less than 10 years:
(a) payments will be continued during the remainder of the period to the
successor payee; or
(b) that successor payee may elect to receive in a lump sum the present
value of the remaining payments, commuted at the interest rate used to
create the annuity factor for this option. For the variable annuity,
this interest rate is [5%] per year, unless [3]% per year was chosen by
Payee's Written Request.
The amount of the annuity payments will depend on the age of the payee on the
Income Date and it may also depend on the payee's sex.
Option C: Joint and Last Survivor Income. Keyport Benefit will pay an
annuity for as long as either the payee or a designated second natural person
is alive. The amount of the annuity payments will depend on the age of both
persons on the Income Date and it may also depend on each person's sex. IT
IS POSSIBLE UNDER THIS OPTION TO RECEIVE ONLY ONE ANNUITY PAYMENT IF BOTH
PAYEES DIE AFTER THE RECEIPT OF THE FIRST PAYMENT OR TO RECEIVE ONLY TWO
ANNUITY PAYMENTS IF BOTH PAYEES DIE AFTER RECEIPT OF THE SECOND PAYMENT AND
SO ON.
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The frequency with which Certificate Owners may transfer the Sub-Accounts
from which variable annuity payments are made with vary between 0 and an
unlimited number of times during periods varying between 1 and 12 months.
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Variable Annuity Payment Values
The amount of the first variable annuity payment is determined by Keyport
Benefit using an annuity purchase rate that is based on an assumed annual
investment return of [5%] per year, unless [3]% is chosen by Written Request.
Subsequent variable annuity payments will fluctuate in amount and reflect
whether the actual investment return of the selected Sub-Account(s) (after
deducting the Mortality and Expense Risk Charge) is better or worse than the
assumed investment return. The total dollar amount of each variable annuity
payment will be equal to: (a) the sum of all Sub-Account payments; [less (b)
the pro-rata amount of the annual Certificate Maintenance Charge.]
Currently, a payee may instruct Keyport Benefit to change the Sub-Account(s)
used to determine the amount of the variable annuity payments [unlimited] [1]
time[s] every [6] months.
Proof of Age, Sex, and Survival of Annuitant
Keyport Benefit may require proof of age, sex or survival of any payee upon
whose age, sex or survival payments depend. If the age or sex has been
misstated, Keyport Benefit will compute the amount payable based on the
correct age and sex. If income payments have begun, any underpayments
Keyport Benefit may have made will be paid in full with the next annuity
payment. Any overpayments, unless repaid in one sum, will be deducted from
future annuity payments until Keyport Benefit is repaid in full.
SUSPENSION OF PAYMENTS
Keyport Benefit reserves the right to postpone surrender payments from the
Fixed Account for up to six months. Keyport Benefit reserves the right to
suspend or postpone any type of payment from the Variable Account for any
period when: (a) the New York Stock Exchange is closed other than customary
weekend or holiday closings; (b) trading on the Exchange is restricted; (c)
an emergency exists as a result of which it is not reasonably practicable to
dispose of securities held in the Variable Account or determine their value;
or (d) the Securities and Exchange Commission permits delay for the
protection of security holders. The applicable rules and regulations of the
Securities and Exchange Commission shall govern as to whether the conditions
described in (b) and (c) exist.
TAX STATUS
Introduction
The Certificate is designed for use by individuals in retirement plans which
may or may not be Qualified Plans under the provisions of the Internal
Revenue Code (the "Code"). The ultimate effect of federal income taxes on
the Certificate Value, on annuity payments, and on the economic benefit to
the Certificate Owner, Annuitant or Designated Beneficiary depends on the
type of retirement plan for which the Certificate is purchased and upon the
tax and employment status of the individual concerned. The discussion
contained herein is general in nature and is not intended as tax advice.
Each person concerned should consult a competent tax adviser. No attempt is
made to consider any applicable state or other tax laws. Moreover, the
discussion herein is based upon Keyport Benefit's understanding of current
federal income tax laws as they are currently interpreted. No representation
is made regarding the likelihood of continuation of those current federal
income tax laws or of the current interpretations by the Internal Revenue
Service.
[Recent Developments
The President has proposed and Congress will be considering certain changes
to the Code that would have significant adverse tax consequences for
exchanges of variable annuities and transfers between sub-accounts, and the
calculation of the taxable portion of a full surrender or partial
withdrawals. It is impossible to predict whether any of the proposed changes
to the Code will be enacted or in what form.]
Taxation of Annuities in General
Section 72 of the Code governs taxation of annuities in general. There are
no income taxes on increases in the value of a Certificate until a
distribution occurs, in the form of a full surrender, a partial surrender, an
assignment or gift of the Certificate, or annuity payments.
Surrenders, Assignments and Gifts. A Certificate Owner who fully surrenders
his or her Certificate is taxed on the portion of the payment that exceeds
his or her cost basis in the Certificate. For Non-Qualified Certificates,
the cost basis is generally the amount of the Purchase Payments made for the
Certificate and the taxable portion of the surrender payment is taxed as
ordinary income. For Qualified Certificates, the cost basis is generally
zero and the taxable portion of the surrender payment is generally taxed as
ordinary income subject to special 5-year income averaging. A Designated
Beneficiary receiving a lump sum surrender benefit after the death of the
Annuitant or Certificate Owner is taxed on the portion of the amount that
exceeds the Certificate Owner's cost basis in the Certificate. If the
Designated Beneficiary elects to receive annuity payments within 60 days of
the decedent's death, different tax rules apply. See "Annuity Payments"
below. For Non-Qualified Certificates, the tax treatment applicable to
Designated Beneficiaries may be contrasted with the income-tax-free treatment
applicable to persons inheriting and then selling mutual fund shares with a
date-of-death value in excess of their basis.
Partial withdrawals received under Non-Qualified Certificates prior to
annuitization are first included in gross income to the extent Certificate
Value exceeds Purchase Payments. Then, to the extent the Certificate Value
does not exceed Purchase Payments, such withdrawals are treated as a non-
taxable return of principal to the Certificate Owner. For partial
withdrawals under a Qualified Certificate, payments are treated first as a
non-taxable return of principal up to the cost basis and then a taxable
return of income. Since the cost basis of Qualified Certificates is
generally zero, partial surrender amounts will generally be fully taxed as
ordinary income.
A Certificate Owner who assigns or pledges a Non-Qualified Certificate is
treated as if he or she had received the amount assigned or pledged and thus
is subject to taxation under the rules applicable to partial withdrawals or
surrenders. A Certificate Owner who gives away the Certificate (i.e.,
transfers it without full and adequate consideration) to anyone other than
his or her spouse is treated for income tax purposes as if he or she had
fully surrendered the Certificate.
A special computational rule applies if Keyport Benefit issues to the
Certificate Owner, during any calendar year, (a) two or more Certificates or
(b) one or more Certificates and one or more of Keyport Benefit's other
annuity contracts. Under this rule, the amount of any distribution
includable in the Certificate Owner's gross income is to be determined under
Section 72(e) of the Code by treating all the Keyport Benefit contracts as
one contract. Keyport Benefit believes that this means the amount of any
distribution under one Certificate will be includable in gross income to the
extent that at the time of distribution the sum of the values for all the
Certificates or contracts exceeds the sum of the cost bases for all the
contracts.
Annuity Payments. The non-taxable portion of each variable annuity payment
is determined by dividing the cost basis of the Certificate by the total
number of expected payments while the non-taxable portion of each fixed
annuity payment is determined by an "exclusion ratio" formula which
establishes the ratio that the cost basis of the Certificate bears to the
total expected value of annuity payments for the term of the annuity. The
remaining portion of each payment is taxable. Such taxable portion is taxed
at ordinary income rates. For Qualified Certificates, the cost basis is
generally zero. With annuity payments based on life contingencies, the
payments will become fully taxable once the payee lives longer than the life
expectancy used to calculate the non-taxable portion of the prior payments.
Because variable annuity payments can increase over time and because certain
payment options provide for a lump sum right of commutation, it is possible
that the IRS could determine that variable annuity payments should not be
taxed as described above but instead should be taxed as if they were received
under an agreement to pay interest. This determination would result in a
higher amount (up to 100%) of certain payments being taxable.
With respect to the "level monthly" payment option available under Annuity
Option A, pursuant to which each annual payment is placed in Keyport
Benefit's general account and paid out with interest in twelve equal monthly
payments, it is possible the IRS could determine that receipt of the first
monthly payout of each annual payment is constructive receipt of the entire
annual payment. Thus, the total taxable amount for each annual payment would
be accelerated to the time of the first monthly payout and reported in the
tax year in which the first monthly payout is received.
Penalty Tax. Payments received by Certificate Owners, Annuitants, and
Designated Beneficiaries under Certificates may be subject to both ordinary
income taxes and a penalty tax equal to 10% of the amount received that is
includable in income. The penalty tax is not imposed on amounts received:
(a) after the taxpayer attains age 59-1/2; (b) in a series of substantially
equal payments made for life or life expectancy; (c) after the death of the
Certificate Owner (or, where the Certificate Owner is not a human being,
after the death of the Annuitant); (d) if the taxpayer becomes totally and
permanently disabled; or (e) under a Non-Qualified Certificate's annuity
payment option that provides for a series of substantially equal payments,
provided only one Purchase Payment is made to the Certificate, the
Certificate is not issued as a result of a Section 1035 exchange, and the
first annuity payment begins in the first Certificate Year.
Income Tax Withholding. Keyport Benefit is required to withhold federal
income taxes on taxable amounts paid under Certificates unless the recipient
elects not to have withholding apply. Keyport Benefit will notify recipients
of their right to elect not to have withholding apply. See "Tax-Sheltered
Annuities" (TSAs) for an alternative type of withholding that may apply to
distributions from TSAs that are eligible for rollover to another TSA or an
individual retirement annuity or account (IRA).
Section 1035 Exchanges. A Non-Qualified Certificate may be purchased with
proceeds from the surrender of an existing annuity contract. Such a
transaction may qualify as a tax-free exchange pursuant to Section 1035 of
the Code. It is Keyport Benefit's understanding that in such an event: (a)
the new Certificate will be subject to the distribution-at-death rules
described in "Death Provisions for Non-Qualified Certificates"; (b) Purchase
Payments made between August 14, 1982 and January 18, 1985 and the income
allocable to them will, following an exchange, no longer be covered by a
"grandfathered" exception to the penalty tax for a distribution of income
that is allocable to an investment made over ten years prior to the
distribution; and (c) Purchase Payments made before August 14, 1982 and the
income allocable to them will, following an exchange, continue to receive the
following "grandfathered" tax treatment under prior law: (i) the penalty tax
does not apply to any distribution; (ii) partial withdrawals are treated
first as a non-taxable return of principal and then a taxable return of
income; and (iii) assignments are not treated as surrenders subject to
taxation. Keyport Benefit's understanding of the above is principally based
on legislative reports prepared by the Staff of the Congressional Joint
Committee on Taxation. [See "Recent Developments".]
Diversification Standards. The U.S. Secretary of the Treasury has issued
regulations that set standards for diversification of the investments
underlying variable annuity contracts (other than pension plan contracts).
The Eligible Funds are designed to be managed to meet the diversification
requirements for the Certificate as those requirements may change from time
to time. If the diversification requirements are not satisfied, the
Certificate would not be treated as an annuity contract. As a consequence to
the Certificate Owner, income earned on a Certificate would be taxable to the
Certificate Owner in the year in which diversification requirements were not
satisfied, including previously non-taxable income earned in prior years. As
a further consequence, Keyport Benefit would be subjected to federal income
taxes on assets in the Variable Account.
The Secretary of the Treasury announced in September 1986 that he expects to
issue regulations which will prescribe the circumstances in which a
Certificate Owner's control of the investments of a segregated asset account
may cause the Certificate Owner, rather than the insurance company, to be
treated as the owner of the assets of the account. The regulations could
impose requirements that are not reflected in the Certificate. Keyport
Benefit, however, has reserved certain rights to alter the Certificate and
investment alternatives so as to comply with such regulations. Since the
regulations have not been issued, there can be no assurance as to the content
of such regulations or even whether application of the regulations will be
prospective. For these reasons, Certificate Owners are urged to consult with
their own tax advisers.
Qualified Plans
The Certificate is designed for use with several types of Qualified Plans.
The tax rules applicable to participants in such Qualified Plans vary
according to the type of plan and the terms and conditions of the plan
itself. Therefore, no attempt is made herein to provide more than general
information about the use of the Certificate with the various types of
Qualified Plans. Participants under such Qualified Plans as well as
Certificate Owners, Annuitants, and Designated Beneficiaries are cautioned
that the rights of any person to any benefits under such Qualified Plans may
be subject to the terms and conditions of the plans themselves regardless of
the terms and conditions of the Certificate issued in connection therewith.
Following are brief descriptions of the various types of Qualified Plans and
of the use of the Certificate in connection therewith. Purchasers of the
Certificate should seek competent advice concerning the terms and conditions
of the particular Qualified Plan and use of the Certificate with that Plan.
Tax-Sheltered Annuities
Section 403(b) of the Code permits public school employees and employees of
certain types of charitable, educational and scientific organizations
specified in Section 501(c)(3) of the Code to purchase annuity contracts and,
subject to certain contribution limitations, exclude the amount of Purchase
Payments from gross income for tax purposes. However, such Purchase Payments
may be subject to Social Security (FICA) taxes. This type of annuity
contract is commonly referred to as a "Tax-Sheltered Annuity" (TSA).
Section 403(b)(11) of the Code contains distribution restrictions.
Specifically, benefits may be paid, through surrender of the Certificate or
otherwise, only (a) when the employee attains age 59-1/2, separates from
service, dies or becomes totally and permanently disabled (within the meaning
of Section 72(m)(7) of the Code) or (b) in the case of hardship. A hardship
distribution must be of employee contributions only and not of any income
attributable to such contributions. Section 403(b)(11) does not apply to
distributions attributable to assets held as of December 31, 1988. Thus, it
appears that the law's restrictions would apply only to distributions
attributable to contributions made after 1988, to earnings on those
contributions, and to earnings on amounts held as of 12/31/88. The Internal
Revenue Service has indicated that the distribution restrictions of Section
403(b)(11) are not applicable when TSA funds are being transferred tax-free
directly to another TSA issuer, provided the transferred funds continue to be
subject to the Section 403(b)(11) distribution restrictions.
Keyport Benefit will notify a Certificate Owner who has requested a
distribution from a Certificate if all or part of such distribution is
eligible for rollover to another TSA or to an individual retirement annuity
or account (IRA). Any amount eligible for rollover treatment will be subject
to mandatory federal income tax withholding at a 20% rate if the Certificate
Owner receives the amount rather than directing Keyport Benefit by Written
Request to transfer the amount as a direct rollover to another TSA or IRA.
Individual Retirement Annuities
Sections 408(b) and 408A of the Code permit eligible individuals to
contribute to an individual retirement program known as an "Individual
Retirement Annuity" and "Roth IRA", respectively. These individual retirement
annuities are subject to limitations on the amount which may be contributed,
the persons who may be eligible, and on the time when distributions may
commence. In addition, distributions from certain types of Qualified Plans
may be placed on a tax-deferred basis into a Section 408(b) Individual
Retirement Annuity.
Corporate Pension and Profit-Sharing Plans
Sections 401(a) and 403(a) of the Code permit corporate employers to
establish various types of retirement plans for employees. Such retirement
plans may permit the purchase of the Certificate to provide benefits under
the plans.
Deferred Compensation Plans With Respect to Service for State and Local
Governments
Section 457 of the Code, while not actually providing for a Qualified Plan as
that term is normally used, provides for certain deferred compensation plans
that enjoy special income tax treatment with respect to service for tax-
exempt organizations, state governments, local governments, and agencies and
instrumentalities of such governments. The Certificate can be used with such
plans. Under such plans, a participant may specify the form of investment in
which his or her participation will be made. However, all such investments
are owned by and subject to the claims of general creditors of the sponsoring
employer.
VARIABLE ACCOUNT VOTING PRIVILEGES
In accordance with its view of present applicable law, Keyport Benefit will
vote the shares of the Eligible Funds held in the Variable Account at regular
and special meetings of the shareholders of the Eligible Funds in accordance
with instructions received from persons having the voting interest in the
Variable Account. Keyport Benefit will vote shares for which it has not
received instructions in the same proportion as it votes shares for which it
has received instructions.
However, if the Investment Company Act of 1940 or any regulation thereunder
should be amended or if the present interpretation thereof should change, and
as a result Keyport Benefit determines that it is permitted to vote the
shares of the Eligible Funds in its own right, it may elect to do so.
The person having the voting interest under a Certificate prior to the Income
Date shall be the Certificate Owner. The number of shares held in each Sub-
Account which are attributable to each Certificate Owner is determined by
dividing the Certificate Owner's Variable Account Value in each Sub-Account
by the net asset value of the applicable share of the Eligible Fund. The
person having the voting interest after the Income Date under an annuity
payment option shall be the payee. The number of shares held in the Variable
Account which are attributable to each payee is determined by dividing the
reserve for the annuity payments by the net asset value of one share. During
the annuity payment period, the votes attributable to a payee decrease as the
reserves underlying the payments decrease.
The number of shares in which a person has a voting interest will be
determined as of the date coincident with the date established by the
respective Eligible Fund for determining shareholders eligible to vote at the
meeting of the Fund and voting instructions will be solicited by written
communication prior to such meeting in accordance with the procedures
established by the Eligible Fund.
Each person having the voting interest in the Variable Account will receive
periodic reports relating to the Eligible Fund(s) in which he or she has an
interest, proxy material and a form with which to give such voting
instructions with respect to the proportion of the Eligible Fund shares held
in the Variable Account corresponding to his or her interest in the Variable
Account.
SALES OF THE CERTIFICATES
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Another registered broker-dealer that is an affiliate of Keyport
Benefit may serve as the principal underwriter of the Certificates.
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[Keyport Financial Services Corp. ("KFSC")] serves as the Principal
Underwriter for the Certificate described in this prospectus. The
Certificate will be sold by salespersons who represent Keyport Benefit, an
affiliate of KFSC, as variable annuity agents and who are registered
representatives of broker/dealers who have entered into distribution
agreements with [KFSC]. [KFSC] is registered under the Securities Exchange
Act of 1934 and is a member of the National Association of Securities
Dealers, Inc. It is located at [125 High Street, Boston, Massachusetts
02110].
Certificates may be sold with lower or no dealer compensation (1) to a person
who is an officer, director, or employee of Keyport Benefit, or an affiliate
of Keyport Benefit, [a trustee or officer of an Eligible Fund,] [an employee
of the investment adviser or sub-investment adviser of an Eligible Fund,] [or
an employee or associated person of an entity which has entered into a sales
agreement with the Principal Underwriter for the distribution of
Certificates,] or (2) to any Qualified Plan established for such a person.
Such Certificates may be different from the Certificates sold to others in
that [(1) they are not subject to the deduction for the Certificate
Maintenance Charge, the asset-based Sales charge] [or the Contingent Deferred
Sales Charge] and (2)] they have a Mortality and Expense Risk Charge of
0[.35]% per year.
[Certificates may be sold with lower or no dealer compensation as part of an
exchange program for other variable annuity contracts previously issued by
[Keyport Benefit] ("Old VA"). Such a Certificate will be issued with an
exchange endorsement. One effect of the endorsement is that no Contingent
Deferred Sales Charge will be assessed under the Old VA at the time of the
exchange and that any Contingent Deferred Charge assessed under the
Certificate in relation to the initial Purchase Payment (i.e., the amount
exchanged) will be calculated based on the actual time of each purchase
payment under the Old VA. The endorsement also provides that the refund
amount described in "Right to Revoke" will not be made if the Certificate is
returned. Instead, [Keyport Benefit] will return the Old VA to the owner and
treat it as if no exchange had occurred.] [See Recent Developments".]
LEGAL PROCEEDINGS
There are no legal proceedings to which the Variable Account or the Principal
Underwriter are a party. Keyport Benefit is engaged in various kinds of
routine litigation which in its judgment is not of material importance in
relation to the total capital and surplus of Keyport Benefit.
INQUIRIES BY CERTIFICATE OWNERS
Certificate Owners with questions about their Certificates may write Keyport
Benefit's Service Office, 125 High Street, Boston, MA 02110, or call (800)
367-3653.
TABLE OF CONTENTS_STATEMENT OF ADDITIONAL INFORMATION
Page
Keyport Benefit Life Insurance Company
Variable Annuity Benefits
Variable Annuity Payment Values
Re-Allocating Sub-Account Payments
Safekeeping of Assets
Principal Underwriter
Experts
Investment Performance
Average Annual Total Return for a Certificate
that is Surrendered and for a Certificate that Continues
Change in Accumulation Unit Value
Yields for [XX-1] Sub-Account
Financial Statements
Keyport Benefit Life Insurance Company
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The Certificate may or may not provide for a Fixed Account Option.
******************************************************************
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[APPENDIX A
THE FIXED ACCOUNT [(ALSO KNOWN AS THE MODIFIED GUARANTEED ANNUITY ACCOUNT)]
Introduction
This Appendix describes the Fixed Account option available under the
Certificate.
[FIXED ACCOUNT VALUES PROVIDED BY THE CERTIFICATE ARE SUBJECT TO A MARKET
VALUE ADJUSTMENT, THE OPERATION OF WHICH MAY RESULT IN UPWARD OR DOWNWARD
ADJUSTMENTS IN AMOUNTS TRANSFERRED AND AMOUNTS PAID (INCLUDING WITHDRAWALS,
SURRENDERS, DEATH BENEFITS, AND AMOUNTS APPLIED TO PURCHASE ANNUITY PAYMENTS)
TO A CERTIFICATE OWNER OR OTHER PAYEE. IN NO EVENT WILL THE DOWNWARD MARKET
VALUE ADJUSTMENT ELIMINATE INTEREST AT THE RATE OF 3% PER YEAR APPLIED TO THE
AMOUNT ALLOCATED TO A GUARANTEED PERIOD. PAYMENTS MADE FROM FIXED ACCOUNT
VALUES AT THE END OF THEIR GUARANTEE PERIOD ARE NOT SUBJECT TO THE MARKET
VALUE ADJUSTMENT.]
Purchase Payments allocated to the Fixed Account option become part of
Keyport Benefit's general account. Because of applicable exemptive and
exclusionary provisions, interests in the Fixed Account options have not been
registered under the Securities Act of 1933 ("1933 Act"), nor is the general
account an investment company under the Investment Company Act. Accordingly,
neither the general account, the Fixed Account option, nor any interest
therein, are subject to regulation under the 1933 Act or the Investment
Company Act. Keyport Benefit understands that the Securities and Exchange
Commission has not reviewed the disclosure in the prospectus relating to the
general account and the Fixed Account option.
Investments in the Fixed Account and Capital Protection Plus
Purchase Payments will be allocated to the Fixed Account in accordance with
the selection made by the Certificate Owner in the application. Any
selection must specify that percentage of the Purchase Payment that is to be
allocated to each Guarantee Period of the Fixed Account. The percentage, if
not zero, must be at least 10%. The Certificate Owner may change the
allocation percentages without fee, penalty or other charge. Allocation
changes must be made by Written Request unless the Certificate Owner has by
Written Request authorized Keyport Benefit to accept telephone allocation
instructions from the Certificate Owner. By authorizing Keyport Benefit to
accept telephone changes, a Certificate Owner agrees to accept and be bound
by the conditions and procedures established by Keyport Benefit from time to
time. The current conditions and procedures are in Appendix [B] and
Certificate Owners authorizing telephone allocation instructions will be
notified, in advance, of any changes.
Keyport Benefit currently offers Guarantee Periods of 1, [3, 5, and 7] years.
Keyport Benefit may change at any time the number of Guarantee Periods it
offers under newly-issued and in-force Certificates, as well as the length of
those Guarantee Periods. If Keyport Benefit stops offering a particular
Guarantee Period, existing Fixed Account Value in such Guarantee Period would
not be affected until the end of the Period (at that time, a Period of the
same length would not be a transfer option). Each Guarantee Period currently
offered is available for initial and subsequent Purchase Payments and for
transfers of Certificate Value.
[Keyport Benefit offers a Capital Protection Plus program that a Certificate
Owner may request. Under this program, Keyport Benefit will allocate part of
the Purchase Payment to the Guarantee Period selected by the Certificate
Owner so that such part, based on that Guarantee Period's interest rate in
effect on the date of allocation, will equal at the end of the Guarantee
Period the total Purchase Payment. The rest of the Purchase Payment will be
allocated to the Sub-Account(s) of the Variable Account based on the
Certificate Owner's allocation. If any part of the Fixed Account Value is
surrendered or transferred before the end of the Guarantee Period, the Value
at the end of that Period will not equal the original Purchase Payment
amount.
For an example of Capital Protection Plus, assume Keyport Benefit receives a
Purchase Payment of $10,000 when the interest rate for the 7-year Guarantee
Period is 6.75% per year. Keyport Benefit will allocate $6,331 to that
Guarantee Period because $6,331 will increase at that interest rate to
$10,000 after 7 years. The remaining $3,669 of the payment will be allocated
to the Sub-Account(s) selected by the Certificate Owner.]
Fixed Account Value
The Fixed Account Value at any time is equal to:
(a) all Purchase Payments allocated to the Fixed Account plus the interest
subsequently credited on those payments; plus
(b) any Variable Account Value transferred to the Fixed Account plus the
interest subsequently credited on the transferred value; less
(c) any prior partial withdrawals from the Fixed Account, including any
charges therefor; less
(d) any Fixed Account Value transferred to the Variable Account.
Interest Credits
Keyport Benefit will credit interest daily (based on an annual compound
interest rate) to Purchase Payments allocated to the Fixed Account at rates
declared by Keyport Benefit for Guarantee Periods of one or more years from
the month and day of allocation. Any rate set by Keyport Benefit will be at
least [3%] per year.
Keyport Benefit's method of crediting interest means that Fixed Account Value
might be subject to different rates for each Guarantee Period the Certificate
Owner has selected in the Fixed Account. For purposes of this section,
Variable Account Value transferred to the Fixed Account and Fixed Account
Value renewed for another Guarantee Period shall be treated as a Purchase
Payment allocation.
[Application of Market Value Adjustment
Any surrender, withdrawal, transfer, or application to an Annuity Option of
Fixed Account Value from a Guarantee Period of three years or more is subject
to a limited Market Value Adjustment, unless: (1) the effective date of the
transaction is at the end of the Guarantee Period; or (2) the effective date
of a surrender is within 90 days of the date of death of the first Covered
Person to die.
If a Market Value Adjustment applies to either a surrender or the application
to an Annuity Option, then any negative Market Value Adjustment amount will
be deducted from the Certificate Value and any positive Market Value
Adjustment amount will be added to the Certificate Value. If a Market Value
Adjustment applies to either a partial withdrawal or a transfer, then any
negative Market Value Adjustment amount will be deducted from the partial
withdrawal or transfer amount after the withdrawal or transfer amount has
been deducted from the Fixed Account Value, and any positive Market Value
Adjustment amount will be added to the applicable amount after it has been
deducted from the Fixed Account Value.
No Market Value Adjustment is ever applicable to Guarantee Periods of fewer
than three years.
Effect of Market Value Adjustment
A Market Value Adjustment reflects the change in prevailing current interest
rates since the beginning of a Guarantee Period. The Market Value Adjustment
may be positive or negative, but any negative Adjustment may be limited in
amount (see Market Value Adjustment Factor below).
Generally, if the Treasury Rate for the Guarantee Period is lower than the
Treasury Rate for a new Guarantee Period with a length equal to the time
remaining in the Guarantee Period, then the application of the limited Market
Value Adjustment will result in a reduction of the amount being surrendered,
withdrawn, transferred, or applied to an Annuity Option.
Similarly, if the Treasury Rate for the Guarantee Period is higher than the
Treasury Rate for a new Guarantee Period with a length equal to the time
remaining in the Guarantee Period, then the application of the Market Value
Adjustment will result in an increase in the amount being surrendered,
withdrawn, transferred, or applied to an Annuity Option.
The Market Value Adjustment will be applied before the deduction of any
applicable surrender charges or applicable taxes.
Market Value Adjustment Factor
The Market Value Adjustment is computed by multiplying the amount being
surrendered, withdrawn, transferred, or applied to a Payment Option, by the
Market Value Adjustment Factor. The Market Value Adjustment Factor is
calculated as the larger of Formula (1) or (2):
(1) [(1+a)/(1+b)](n/12) - 1
where:
"a" is the Treasury Rate for the number of Guarantee Period Years in the
Guarantee Period;
"b" is the Treasury Rate for a period equal to the time remaining (rounded up
to the next whole number of Guarantee Period Years) to the expiration of the
Guarantee Period; and
"n" is the number of complete Guarantee Period Months remaining before the
expiration of the Guarantee Period.
(2) [(1.03)/(1+i)](y+d/#) - 1
where:
"i" is the Guaranteed Interest Rate for the Guarantee Period;
"y" is the number of complete Guarantee Period Years that have elapsed in
Your Guarantee Period;
"d" is the number of days since the last Guarantee Period Anniversary or, if
"y" is zero, the number of days since the start of the Guarantee Period; and
"#" is the number of days in the current Guarantee Period Year (i.e., the sum
of "d" and the number of days until the next Guarantee Period Anniversary).
In Formulas (1) and (2), all references to Guarantee Period, Guarantee Period
Anniversary, Guarantee Period Month, and Guarantee Period Year relate to the
Guarantee Period from which is being taken the amount being surrendered,
withdrawn, transferred, or applied to an Annuity Option.
As stated above, the Formula (2) amount will apply only if it is greater than
the Formula (1) amount. This will occur only when the Formula (1) amount is
negative and the Formula (2) amount is a smaller negative number. Formula (2)
thus ensures that a full (normal) negative Market Value Adjustment of Formula
(1) will not apply to the extent it would decrease the Guarantee Period's
Fixed Account Value (before the deduction of any applicable surrender charges
or any applicable taxes) below the following amount:
(a) the amount allocated to the Guarantee Period; less
(b) any prior systematic or partial withdrawal amounts; less
(c) any prior amounts transferred to the Variable Account or
to another Guarantee Period in the Fixed Account; plus
(d) interest on the above items (a) through (c) credited
annually at a rate of 3% per year.
Treasury Rates
The Treasury Rate for a Guarantee Period is the interest rate in the Treasury
Constant Maturity Series, as published by the Federal Reserve Board, for a
maturity equal to the number of years specified in "a" and "b" in Formula (1)
above. Weekly Series are published at the beginning of the following week. To
determine "a", Keyport Benefit uses the weekly Series first published on or
after the most recent Determination Date which occurs on or before the Start
Date for the Guarantee Period, except that if the Start Date is the same as
the Determination Date or the date of publication, or any date in between,
Keyport Benefit instead uses the weekly Series first published after the
prior Determination Date. To determine "b", Keyport Benefit uses the Weekly
Series first published on or after the most recent Determination Date which
occurs on or before the date on which the Market Value Adjustment Factor is
calculated, except that if the calculation date is the same as the
Determination Date or the date of publication, or any date in between,
Keyport Benefit instead uses the weekly Series first published after the
prior Determination Date. The Determination Dates are the last business day
prior to the first and fifteenth of each calendar month.
If the number of years specified in "a" or "b" is not equal to a maturity in
the Treasury Constant Maturity Series, the Treasury Rate will be determined
by straight line interpolation between the interest rates of the next highest
and next lowest maturities.
If the Treasury Constant Maturity Series becomes unavailable, Keyport Benefit
will adopt a comparable constant maturity index or, if such a comparable
index also is not available, Keyport Benefit will replicate calculation of
the Treasury Constant Maturity Series Index based on U.S. Treasury Security
coupon rates.
End of A Guarantee Period
Keyport Benefit will notify a Certificate Owner in writing at least 30 days
prior to the end of a Guarantee Period. At the end of the Guarantee Period,
Keyport Benefit will automatically transfer the Guarantee Period's Fixed
Account Value to the Money Market Sub-Account of the Variable Account unless
Keyport Benefit previously received a Certificate Owner's Written Request of:
(1) election of a new Guarantee Period from among those being offered by
Keyport Benefit at that time; or (2) instructions to transfer the ending
Guarantee Period's Fixed Account Value to one or more Sub-Accounts of the
Variable Account. A new Guarantee Period cannot be longer than the number of
years remaining until the Income Date.]
Transfers of Fixed Account Value
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The limits on the number of transfers will range between unlimited transfers
and 12 per year. The limitations on transfers from the Fixed Account will
range between 10% and 50%.
******************************************************************
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The Certificate Owner may transfer Fixed Account Value from one Guarantee
Period to another or to one or more Sub-Accounts of the Variable Account
subject to any applicable Market Value Adjustment. If the Fixed Account
Value represents multiple Guarantee Periods, the transfer request must
specify from which values the transfer is to be made.
The Certificate allows Keyport Benefit to limit the number of transfers that
can be made in a specified time period. Currently, Keyport Benefit is
limiting Variable Account and Fixed Account transfers to generally [xx]
transfers per calendar year with a $500,000 per transfer dollar limit. See
"Transfer of Variable Account Value". Transfers from the Fixed Account to the
Variable Account are limited to [50%] of the Fixed Account Value at the
beginning of the Certificate Year. This limitation will be waived if a
Systematic Withdrawal Program is in effect. These limitations will not apply
to any transfer made at the end of a Guarantee Period. Certificate Owners
will be notified, in advance, of a change in the limitation on the number of
transfers.
Transfer requests must be by Written Request unless the Certificate Owner has
authorized Keyport Benefit by Written Request to accept telephone transfer
instructions from the Certificate Owner or from a person acting for the
Certificate Owner as an attorney-in-fact under a power of attorney. By
authorizing Keyport Benefit to accept telephone transfer instructions, a
Certificate Owner agrees to accept and be bound by the conditions and
procedures established by Keyport Benefit from time to time. The current
conditions and procedures are in Appendix [B] and Certificate Owners
authorizing telephone transfers will be notified, in advance, of any changes.
Written transfer requests may be made by a person acting for the Certificate
Owner as an attorney-in-fact under a power of attorney.
Transfer requests received by Keyport Benefit before the close of trading on
the New York Stock Exchange (currently 4:00 PM Eastern Time) will be executed
at the close of business that day. Any requests received later will be
executed at the close of the next business day.
The amount of the transfer will be deducted from the specified values in the
manner stated in the next section below.
If 100% of a Guarantee Period's value is transferred and the current
allocation for Purchase Payments includes that Guarantee Period, then the
allocation formula for future Purchase Payments will automatically change
unless the Certificate Owner instructs otherwise. For example, if the
allocation formula is 50% to the one-year Guarantee Period and 50% to Sub-
Account A and all Fixed Account Value is transferred to Sub-Account A, the
allocation formula will change to 100% to Sub-Account A.
[APPENDIX [B]
TELEPHONE INSTRUCTIONS
Telephone Transfers of Certificate Values
1. If there are joint Certificate Owners, both must authorize Keyport
Benefit to accept telephone instructions but either Certificate Owner may
give Keyport Benefit telephone instructions.
2. All callers will be required to identify themselves. Keyport Benefit
reserves the right to refuse to act upon any telephone instructions in cases
where the caller has not sufficiently identified himself/herself to Keyport
Benefit's satisfaction.
3. Neither Keyport Benefit nor any person acting on its behalf shall be
subject to any claim, loss, liability, cost or expense if it or such person
acted in good faith upon a telephone instruction, including one that is
unauthorized or fraudulent; however, Keyport Benefit will employ reasonable
procedures to confirm that a telephone instruction is genuine and, if Keyport
Benefit does not, Keyport Benefit may be liable for losses due to an
unauthorized or fraudulent instruction. The Certificate Owner thus bears the
risk that an unauthorized or fraudulent instruction that is executed may
cause the Certificate Value to be lower than it would be had no instruction
been executed.
4. All conversations will be recorded with disclosure at the time of the
call.
5. The application for the Certificate may allow a Certificate Owner to
create a power of attorney by authorizing another person to give telephone
instructions. Unless prohibited by state law, such power will be treated as
durable in nature and shall not be affected by the subsequent incapacity,
disability or incompetency of the Certificate Owner. Either Keyport Benefit
or the authorized person may cease to honor the power by sending written
notice to the Certificate Owner at the Certificate Owner's last known
address. Neither Keyport Benefit nor any person acting on its behalf shall
be subject to liability for any act executed in good faith reliance upon a
power of attorney.
6. Telephone authorization shall continue in force until (a) Keyport
Benefit receives the Certificate Owner's written revocation, (b) Keyport
Benefit discontinues the privilege, or (c) Keyport Benefit receives written
evidence that the Certificate Owner has entered into a market timing or asset
allocation agreement with an investment adviser or with a broker/dealer.
7. Telephone transfer instructions received by Keyport Benefit at 800-367-
3653 before the close of trading on the New York Stock Exchange (currently
4:00 P.M. Eastern Time) will be initiated that day based on the unit value
prices calculated at the close of that day. Instructions received after the
close of trading on the NYSE will be initiated the following business day.
8. Once instructions are accepted by Keyport Benefit, they may not be
canceled.
9. All transfers must be made in accordance with the terms of the
Certificate and current prospectus. If the transfer instructions are not in
good order, Keyport Benefit will not execute the transfer and will notify the
caller within 48 hours.
10. If 100% of any Sub-Account's value is transferred and the allocation
formula for Purchase Payments includes that Sub-Account, then the allocation
formula for future Purchase Payments will change accordingly unless Keyport
Benefit receives telephone instructions to the contrary. For example, if the
allocation formula is 50% to Sub-Account A and 50% to Sub-Account B and all
of Sub-Account A's value is transferred to Sub-Account B, the allocation
formula will change to 100% to Sub-Account B unless Keyport Benefit is
instructed otherwise.
Telephone Changes to Purchase Payment Allocation Percentages
Numbers 1-6 above are applicable.]
PROSPECTUS
[DATE]
Distributed by:
[Keyport Financial Services Corp.
125 High Street, Boston, MA 02110-2712]
Issued by:
Keyport Benefit Life Insurance Company
100 Manhattanville Road, Purchase, NY 10577
Keyport Benefit Service Office
125 High Street
Boston, MA 02110-2712
Service Hotline 800-367-3653 (Press 3)
Yes. I would like to receive the Keyport Benefit [NAME OF ANNUITY] Statement
of Additional Information.
Yes. I would like to receive the [NAME OF FUND] Statement of Additional
Information.
Yes. I would like to receive the [NAME OF FUND] Statement of Additional
Information.
Name
Address
City, State Zip
BUSINESS REPLY MAIL
FIRST CLASS MAIL PERMIT NO. 6719 BOSTON, MA
POSTAGE WILL BE PAID BY ADDRESSEE
KEYPORT BENEFIT LIFE INSURANCE COMPANY
SERVICE OFFICE
125 HIGH STREET
BOSTON, MA 02110-9773
NO POSTAGE NECESSARY IF MAILED IN THE UNITED STATES.
PART B
STATEMENT OF ADDITIONAL INFORMATION
GROUP FLEXIBLE PURCHASE PAYMENT
DEFERRED VARIABLE ANNUITY CONTRACT
ISSUED BY
VARIABLE ACCOUNT A
OF
KEYPORT BENEFIT LIFE INSURANCE COMPANY ("Keyport Benefit")
This Statement of Additional Information (SAI) is not a prospectus but it
relates to, and should be read in conjunction with, the variable annuity
prospectus dated , [1998]. The SAI is incorporated
by reference into the prospectus. The prospectus is available, at no charge,
by writing Keyport Benefit at 125 High Street, Boston, MA 02110 or by calling
(800) 437-4466.
TABLE OF CONTENTS
Page
Keyport Benefit Life Insurance Company............................
Variable Annuity Benefits.........................................
Variable Annuity Payment Values.................................
Re-Allocating Sub-Account Payments..............................
Safekeeping of Assets ............................................
Principal Underwriter.............................................
Experts...........................................................
Investment Performance............................................
Average Annual Total Return for a Certificate that is
Surrendered and for a Certificate that Continues..............
Change in Accumulation Unit Value...............................
Yields for [XX-1] Sub-Account ..................................
Financial Statements..............................................
Keyport Benefit Life Insurance Company..........................
The date of this statement of additional information is , [998]
KEYPORT BENEFIT LIFE INSURANCE COMPANY
Liberty Mutual Insurance Company ("Liberty Mutual") is the ultimate corporate
parent of Keyport Benefit. Liberty Mutual Insurance Company is a multi-line
insurance company. For additional information about Keyport Benefit, see
page ___ of the prospectus.
VARIABLE ANNUITY BENEFITS
Variable Annuity Payment Values
For each variable payment option, the total dollar amount of each periodic
payment will be equal to: (a) the sum of all Sub-Account payments; less [(b)
the pro-rata amount of the annual Certificate Maintenance Charge.]
The first payment for each Sub-Account will be determined by deducting [any
applicable Certificate Maintenance Charge and] any applicable state premium
taxes and then dividing the remaining value of that Sub-Account by $1,000 and
multiplying the result by the greater of: (a) the applicable factor from the
Certificate's annuity table for the particular payment option; or (b) the
factor currently offered by Keyport Benefit at the time annuity payments
begin. This current factor may be based on the sex of the payee unless to do
so would be prohibited by law.
The number of Annuity Units for each Sub-Account will be determined by
dividing such first payment by the Sub-Account Annuity Unit value for the
Valuation Period that includes the date of the first payment. The number of
Annuity Units remains fixed for the annuity payment period. Each Sub-Account
payment after the first one will be determined by multiplying (a) by (b),
where: (a) is the number of Sub-Account Annuity Units; and (b) is the Sub-
Account Annuity Unit value for the Valuation Period that includes the date of
the particular payment.
Variable annuity payments will fluctuate in accordance with the investment
results of the underlying Eligible Funds. In order to determine how these
fluctuations affect annuity payments, Keyport Benefit uses an Annuity Unit
value. Each Sub-Account has its own Annuity Units and value per Unit. The
Annuity Unit value applicable during any Valuation Period is determined at
the end of such period.
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The formula for the net investment factor will vary depending upon
whether certain asset charges are imposed, as explained in the notes in
the Prospectus. With regard to the AIR, the AIR will vary within the
limits permitted under state insurance law, but no less than 3%.
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When Keyport Benefit first purchased the Eligible Fund shares of [XXX Trust
and YYY Fund] on behalf of the Variable Account, Keyport Benefit valued each
Annuity Unit for each Sub-Account at a specified dollar amount. The Unit
value for each Sub-Account in any Valuation Period thereafter is determined
by multiplying the value for the prior period by a net investment factor.
This factor may be greater or less than 1.0; therefore, the Annuity Unit may
increase or decrease from Valuation Period to Valuation Period. For each
assumed annual investment rate (AIR), Keyport Benefit calculates a net
investment factor for each Sub-Account by dividing (a) by (b), where:
(a) is equal to the net investment factor as defined in the
prospectus [without any deduction for the sales charge defined in
(c)(ii) of the net investment factor formula]; and
(b) is the assumed investment factor for the current Valuation
Period. The assumed investment factor adjusts for the interest
assumed in determining the first variable annuity payment. Such
factor for any Valuation Period shall be the accumulated value, at
the end of such period, of $1.00 deposited at the beginning of such
period at the assumed annual investment rate (AIR). The AIR for
Annuity Units based on the Contract's annuity tables is [5]% per
year. [An AIR of 3% per year is also currently available upon
Written Request.]
With a particular AIR, payments after the first one will increase or decrease
from month to month based on whether the actual annualized investment return
of the selected Sub-Account(s) (after deducting the Mortality and Expense
Risk Charge) is better or worse than the assumed AIR percentage. If a given
amount of Sub-Account value is applied to a particular payment option, the
initial payment will be smaller if a [3]% AIR is selected instead of a [5]%
AIR but, all other things being equal, the subsequent [3]% AIR payments have
the potential for increasing in amount by a larger percentage and for
decreasing in amount by a smaller percentage. For example, consider what
would happen if the actual annualized investment return (see the first
sentence of this paragraph) is [9]%, [5]%, [3]%, or 0% between the time of
the first and second payments. With an actual [9]% return, the [3]% AIR and
[5]% AIR payments would both increase in amount but the [3]% AIR payment
would increase by a larger percentage. With an actual [5]% return, the [3]%
AIR payment would increase in amount while the [5]% AIR payment would stay
the same. With an actual return of [3]%, the [3]% AIR payment would stay the
same while the [6]% AIR payment would decrease in amount. Finally, with an
actual return of 0%, the [3]% AIR and [5]% AIR payments would both decrease
in amount but the [3]% AIR payment would decrease by a smaller percentage.
Note that the changes in payment amounts described above are on a percentage
basis and thus do not illustrate when, if ever, the [3]% AIR payment amount
might become larger than the [5]% AIR payment amount. Note though that if
Option A (Income for a Fixed Number of Years) is selected and payments
continue for the entire period, the [3]% AIR payment amount will start out
being smaller than the [5]% AIR payment amount but eventually the [3]% AIR
payment amount will become larger than the [5]% AIR payment amount.
Re-Allocating Sub-Account Payments
*****************************************************************************
***************************************************************************
The number of times that Sub-Account(s) used to determine the
amount of variable annuity payments will range between unlimited times
to once every twelve months. The minimum percentage per Sub-Account will
range between 1% and 10%.
*****************************************************************************
***************************************************************************
The number of Annuity Units for each Sub-Account under any variable annuity
option will remain fixed during the entire annuity payment period unless the
payee makes a written request for a change. Currently, a payee can instruct
Keyport Benefit to change the Sub-Account(s) used to determine the amount of
the variable annuity payments [1] time[s] every [12] months. The payee's
request must specify the percentage of the annuity payment that is to be
based on the investment performance of each Sub-Account. The percentage for
each Sub-Account, if not zero, must be at least [10]% and must be a whole
number. At the end of the Valuation Period during which Keyport Benefit
receives the request, Keyport Benefit will: (a) value the Annuity Units for
each Sub-Account to create a total annuity value; (b) apply the new
percentages the payee has selected to this total value; and (c) recompute the
number of Annuity Units for each Sub-Account. This new number of units will
remain fixed for the remainder of the payment period unless the payee
requests another change.
SAFEKEEPING OF ASSETS
Keyport Benefit is responsible for the safekeeping of the assets of the
Variable Account.
Keyport Benefit has responsibility for providing all administration of the
Certificates and the Variable Account. This administration includes, but is
not limited to, preparation of the Contracts and Certificates, maintenance of
Certificate Owners' records, and all accounting, valuation, regulatory and
reporting requirements. Keyport Benefit has contracted with Keyport Life
Insurance Company, its corporate parent, to provide all administration for
the Contracts and Certificates, as its agent. Keyport Benefit pays Keyport
Life Insurance Company for the costs it incurs for providing those
administrative services.
PRINCIPAL UNDERWRITER
The Contract and Certificates, which are offered continuously, are
distributed by [Keyport Financial Services Corp. ("KFSC")], an affiliate.
EXPERTS
The financial statements of Keyport Benefit as of December 31, [1997] and
[1996] and for each of the years in the three-year period ended December 31,
[1997] included herein, have been included herein in reliance on the reports
of [Ernst & Young LLP], independent certified public accountants, and upon
authority of said firm as experts in accounting and auditing.
INVESTMENT PERFORMANCE
The Variable Account may from time to time quote performance information
concerning its various Sub-Accounts. A Sub-Account's performance may also be
compared to the performance of sub-accounts used with variable annuities
offered by other insurance companies. This comparative information may be
expressed as a ranking prepared by Financial Planning Resources, Inc. of
Miami, FL (The VARDS Report), Lipper Analytical Services, Inc., or by
Morningstar, Inc. of Chicago, IL (Morningstar's Variable Annuity Performance
Report), which are independent services that compare the performance of
variable annuity sub-accounts. The rankings are done on the basis of changes
in accumulation unit values over time and do not take into account any
charges (such as sales charges or administrative charges) that are deducted
directly from contract values.
Ibbotson Associates of Chicago, IL provides historical returns from 1926 on
capital markets in the United States. The Variable Account may quote the
performance of its Sub-Accounts in conjunction with the long-term performance
of capital markets in order to illustrate general long-term risk versus
reward investment scenarios. Capital markets tracked by Ibbotson Associates
include common stocks, small company stocks, long-term corporate bonds, long-
term government bonds, U.S. Treasury Bills, and the U.S. inflation rate.
Historical total returns are determined by Ibbotson Associates for: Common
Stocks, represented by the Standard and Poor's Composite Price Index (an
unmanaged weighted index of 90 stocks prior to March 1957 and 500 stocks
thereafter of industrial, transportation, utility and financial companies
widely regarded by investors as representative of the stock market); Small
Company Stocks, represented by the fifth capitalization quintile (i.e., the
ninth and tenth deciles) of stocks on the New York Stock Exchange for 1926-
1981 and by the performance of the Dimensional Fund Advisors Small Company
9/10 (for ninth and tenth deciles) Fund thereafter; Long Term Corporate
Bonds, represented beginning in 1969 by the Salomon Brothers Long-Term High-
Grade Corporate Bond Index, which is an unmanaged index of nearly all Aaa and
Aa rated bonds, represented for 1946-1968 by backdating the Salomon Brothers
Index using Salomon Brothers' monthly yield data with a methodology similar
to that used by Salomon Brothers in computing its Index, and represented for
1925-1945 through the use of the Standard and Poor's monthly High-Grade
Corporate Composite yield data, assuming a 4% coupon and a 20-year maturity.
Long-Term Government Bonds, measured each year using a portfolio containing
one U.S. government bond with a term of approximately twenty years and a
reasonably current coupon; U.S. Treasury Bills, measured by rolling over each
month a one-bill portfolio containing, at the beginning of each month, the
shortest-term bill having not less than one month to maturity; Inflation,
measured by the Consumer Price Index for all Urban Consumers, not seasonably
adjusted, since January, 1978 and by the Consumer Price Index before then.
The stock capital markets may be contrasted with the corporate bond and U.S.
government securities capital markets. Unlike an investment in stock, an
investment in a bond that is held to maturity provides a fixed rate of
return. Bonds have a senior priority to common stocks in the event the
issuer is liquidated and interest on bonds is generally paid by the issuer
before it makes any distributions to common stock owners. Bonds rated in the
two highest rating categories are considered high quality and present minimal
risk of default. An additional advantage of investing in U.S. government
bonds and Treasury bills is that they are backed by the full faith and credit
of the U.S. government and thus have virtually no risk of default. Although
government securities fluctuate in price, they are highly liquid.
*****************************************************************************
***************************************************************************
Information regarding the Performance of the Certificates will be
included in the subsequent filings.
*****************************************************************************
***************************************************************************
[Average annual Total Return for A Certificate that is surrendered and for a
Certificate that Continues]
[Change in Accumulation Unit Value]
Yields for [XX-1 Sub-Account]
Yield and effective yield percentages for the [XX-1 Sub-Account] are
calculated using the method prescribed by the Securities and Exchange
Commission. Both yields reflect the deduction of the annual [1.25]% asset-
based Certificate charges. [Both yields also reflect, on an allocated basis,
the Certificate's annual $[36] Certificate Maintenance Charge.] Both yields
do not reflect [Contingent Deferred Sales Charges and] premium tax charges.
The yields would be lower if these charges were included. The following are
the standardized formulas:
Yield equals: (A - B - 1) X 365
C 7
Effective Yield Equals: (A - B)365/7 - 1
C
Where:
A = the Accumulation Unit value at the end of the 7-day period.
B = [hypothetical Certificate Maintenance Charge for the 7-day
period. The assumed annual [XX-1] Sub-Account charge is equal to
the $[36] Certificate charge multiplied by a fraction equal to the
average number of Certificates with [XX-1] Sub-Account value during
the 7-day period divided by the average total number of
Certificates during the 7-day period. This annual amount is
converted to a 7-day charge by multiplying it by 7/365. It is then
equated to an Accumulation Unit size basis by multiplying it by a
fraction equal to the average value of one [XX-1] Sub-Account
Accumulation Unit during the 7-day period divided by the average
Certificate Value in [XX-1] Sub-Account during the 7-day period.]
C = the Accumulation Unit value at the beginning of the 7-day
period.
The yield formula assumes that the weekly net income generated by an
investment in the [XX-1] Sub-Account will continue over an entire year. The
effective yield formula also annualizes seven days of net income but it
assumes that the net income is reinvested over the year. This compounding
effect causes effective yield to be higher than the yield.
FINANCIAL STATEMENTS
The Variable Account has not yet commenced operations and therefore no
financial statements are included. The Financial Statements of Keyport
Benefit are provided as relevant to its ability to meet its financial
obligations under the Certificates.
FINANCIAL STATEMENTS
KEYPORT BENEFIT LIFE INSURANCE COMPANY
[To Be Filed by Amendment]
PART C
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Included in Part B:
** Keyport Benefit Life Insurance Company:
Balance Sheets for the years ended December 31, 1997and 1996.
Statements of Income for the years ended December 31, 1997, 1996
and 1995.
Statements of Stockholders' Equity for the years ended December
31, 1997 and 1996.
Statements of Cash Flows for the years ended December 31, 1997
and 1996.
Notes to Financial Statements
(b) Exhibits:
(1) Resolution of the Board of Directors establishing Variable
Account A
(2) Not applicable
(3a) Form of Principal Underwriter's Agreement
(3b) Specimen Agreement between Principal Underwriter and Dealer
(4a) Form of Group Variable Annuity Contract of Keyport Benefit
Life Insurance Company
(4b) Form of Group Variable Annuity Certificate of Keyport Benefit
Life Insurance Company
(4c) Form of Tax-Sheltered Annuity Endorsement
(4d) Form of Individual Retirement Annuity Endorsement
(4e) Form of Corporate/Keogh 401(a) Plan Endorsement
(4f) Form of Unisex Endorsement
(4g) Form of Qualified Plan Endorsement
(5a) Form of Application for a Group Variable Annuity Contract
(5b) Form of Application for a Group Variable Annuity Certificate
** (6a) Articles of Incorporation of Keyport Benefit Life Insurance
Company
** (6b) By-Laws of Keyport Benefit Life Insurance Company
(7) Not applicable
(8) Form of Participation Agreement
(9) Opinion and Consent of Counsel
** (10) Consent of Independent Auditors
(11) Not applicable
(12) Not applicable
** (13) Schedule for Computations of Performance Quotations
* (15) Chart of Affiliations
(16) Powers of Attorney
(17) Specimen Tax-Sheltered Annuity Acknowledgement
(18) Form of Administrative Services Agreement
** (27) Financial Data Schedule
* Incorporated by reference to Post-Effective Amendment No. 7 to the
Registration Statement (Files No. 333-1043; 811-7543) filed on or about
February 6, 1998.
** To be Filed by Amendment.
Item 25. Officers and Directors of the Depositor.
Name and Position and Offices
Business Address* with Depositor
William P. Donohue Director
Senior Advisor
Bentley Associates LP
1155 Avenue of the Americas
New York, NY 10036
Peter M. Lehrer Director
Opus Three Ltd.
550 Mamaroneck Ave.
Harrison, NY 10528
Jeff S. Liebmann Director
Partner
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, NY 10019-6092
Christopher C. York Director
Principal
C.C. York Company
200 Rector Place, 18-E
New York, NY 11280-1101
John W. Rosensteel Chairman of the Board, Director, President and
Chief Executive Officer
Paul H. LeFevre, Jr. Director, Executive Vice President
Bernard R. Beckerlegge Director, Senior Vice President and General
Counsel
Stephen B. Bonner Director and Senior Vice President - Income
Markets
Bernhard M. Koch Director, Senior Vice President and Chief
Financial Officer
Stewart R. Morrison Senior Vice President and Chief Investment
Officer
Francis E. Reinhart Senior Vice President and Chief Information
Officer
Mark R. Tully Senior Vice President and Chief Sales Officer
Garth A. Bernard Vice President
Daniel C. Bryant Vice President and Assistant Secretary
James P. Greaton Vice President and Corporate Actuary
Jacob M. Herschler Vice President
Kenneth M. Hughes Vice President
James J. Klopper Vice President and Secretary
Jeffrey J. Lobo Vice President-Risk Management
Suzanne E. Lyons Vice President-Human Resources
Jeffery J. Whitehead Vice President and Treasurer
John G. Bonvouloir Assistant Vice President and Assistant
Treasurer
Alan R. Downey Assistant Vice President
Scott E. Morin Assistant Vice President and Controller
Edward M. Shea Assistant Vice President
Donald A. Truman Assistant Secretary
Daniel Yin Assistant Vice President
*125 High Street, Boston, Massachusetts 02110, unless noted otherwise
Item 26. Persons Controlled by or Under Common Control with the Depositor or
Registrant.
The Depositor controls the Registrant, and is a wholly-owned subsidiary
of Keyport Life Insurance Company, which controls KMA Variable Account,
Keyport 401 Variable Account, Keyport Variable Account I, and Keyport
Variable Account II.
The Depositor is under common control with Keyport Financial Services
Corp. (KFSC), a Massachusetts corporation functioning as a broker/dealer of
securities. KFSC files separate financial statements.
The Depositor is under common control with Liberty Advisory Services
Corp. (LASC), a Massachusetts corporation functioning as an investment
adviser. LASC files separate financial statements.
The Depositor is under common control with Independence Life and Annuity
Company ("Independence Life"), a Rhode Island corporation functioning as a
life insurance company. Independence Life files separate financial
statements.
Chart for the affiliations of the Depositor is incorporated by
reference to Post-Effective Amendment No. 7 to the Registration
Statement (Files No. 333-1043; 811-7543) filed on or about February 6,
1998.
Item 27. Number of Contract Owners.
None.
Item 28. Indemnification.
Directors and officers of the Depositor and the principal underwriter
are covered persons under Directors and Officers/Errors and Omissions
liability insurance policies. Insofar as indemnification for liability
arising under the Securities Act of 1933 may be permitted to directors and
officers under such insurance policies, or otherwise, the Depositor has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Depositor of expenses
incurred or paid by a director or officer in the successful defense of any
action, suit or proceeding) is asserted by such director or officer in
connection with the variable annuity contracts, the Depositor 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.
Keyport Financial Services Corp. (KFSC) is principal underwriter of the
SteinRoe Variable Investment Trust and the Liberty Variable Investment Trust,
which offer eligible funds for variable annuity and variable life insurance
contracts. KFSC is the principal underwriter for Variable Account A of
Keyport Benefit Life Insurance Company. KFSC is also principal underwriter
for Variable Account J and Variable Account K of Liberty Life Assurance
Company of Boston and for the KMA Variable Account, Variable Account A and
Keyport Variable Account-I of Keyport Life Insurance Company and for the
Independence Variable Annuity Account and Independence Variable Life Account
of Independence Life and Annuity Company, which are affiliated companies of
Keyport Benefit.
The directors and officers are:
Name and Principal Position and Offices
Business Address* with Underwriter
John W. Rosensteel Chairman of the Board and President
James J. Klopper Director and Clerk
Francis E. Reinhart Director and Vice President-Administration
Rogelio P. Japlit Treasurer
Paul T. Holman Assistant Clerk
Donald A. Truman Assistant Clerk
*125 High Street, Boston, Massachusetts 02110.
Item 30. Location of Accounts and Records.
Keyport Benefit Life Insurance Company, 125 High St., Boston, MA 02110
Keyport Life Insurance Company, 125 High St., Boston, MA 02110
Item 31. Management Services.
Not applicable.
Item 32. Undertakings.
The Registrant undertakes to file a post-effective amendment to this
Registration Statement as frequently as is necessary to ensure that the
audited financial statements in the Registration Statement are never more
than 16 months old for so long as payments under the variable annuity
contracts may be accepted.
The Registrant undertakes to include either (1) as part of any
application to purchase a contract offered by the prospectus, a space that an
applicant can check to request a Statement of Additional Information, or (2)
a post card or similar written communication affixed to or included in the
prospectus that the applicant can remove to send for a Statement of
Additional Information.
The Registrant undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available under
this Form promptly upon written or oral request.
Registrant represents that it is relying on the November 28, 1988 no-
action letter (Ref. No. IP-6-88) relating to variable annuity contracts
offered as funding vehicles for retirement plans meeting the requirements of
Section 403(b) of the Internal Revenue Code. Registrant further represents
that it has complied with the provisions of paragraphs (1) - (4) of that
letter. Specimen of acknowledgement form used to comply with paragraph (4)
is included as Exhibit 17 in this Registration Statement.
Representation
Depositor represents that the fees and charges deducted under the
contract, in the aggregate, are reasonable in relation to the services
rendered, the expenses expected to be incurred, and the risks assumed by the
Depositor. Further, this representation applies to each form of the contract
described in a prospectus and statement of additional information included in
this Registration Statement.
SIGNATURES
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act
of 1940, the Registrant certifies that it has duly caused this Registration
Statement to be signed on its behalf, in the City of Boston and Commonwealth
of Massachusetts, on this 6th day of February, l998.
Variable Account A
(Registrant)
By: Keyport Benefit Life Insurance Company
(Depositor)
By: /s/ John W. Rosensteel*
John W. Rosensteel
President
*BY: /s/James J. Klopper February 6, 1998
James J. Klopper Date
Attorney-in-Fact
* James J. Klopper has signed this document on the indicated date on
behalf of Mr. Rosensteel pursuant to power of attorney duly executed by him
and included herein as part of Exhibit 16.
As required by the Securities Act of 1933, this Registration Statement has
been signed below by the following persons in the capacities and on the dates
indicated.
/s/JOHN W. ROSENSTEEL* /s/JOHN W. ROSENSTEEL*
JOHN W. ROSENSTEE. JOHN W. ROSENSTEEL
Chairman of the Board President
/s/BERNARD R. BECKERLEGGE* /s/BERNHARD M. KOCH*
BERNARD R. BECKERLEGGE BERNHARD M. KOCH
Director Chief Financial Officer
/s/STEPHEN B. BONNER*
STEPHEN B. BONNER
Director
/s/WILLIAM P. DONOHUE*
WILLIAM P. DONOHUE
Director
/s/BERNHARD M. KOCH*
BERNHARD M. KOCH
Director
/s/PAUL H. LEFEVRE, JR.*
PAUL H. LEFEVRE, JR.
Director
*BY: /s/James J. Klopper February 1, 1998
/s/PETER M. LEHRER* James J. Klopper Date
PETER M. LEHRER Attorney-in-Fact
Director
/s/JEFF S. LIEBMANN*
JEFF S. LIEBMANN
Director
/s/CHRISTOPHER C. YORK*
CHRISTOPHER C. YORK
Director
*James J. Klopper has signed this document on the indicated date on behalf
of each of the above Directors and Officers of the Depositor pursuant to
powers of attorney duly executed by such persons and included herein as
Exhibit 16.
EXHIBIT INDEX
Exhibit Page
(1) Resolution of Board of Directors establishing Variable Account A
(3a) Principal Underwriter's Agreement
(3b) Specimen Agreement between Principal Underwriter and Dealer
(4a) Form of Group Variable Annuity Contract of Keyport Benefit Life
Insurance Company
(4b) Form of Group Variable Annuity Certificate of Keyport Benefit Life
Insurance Company
(4c) Form of Tax-Sheltered Annuity Endorsement
(4d) Form of Individual Retirement Annuity Endorsement
(4e) Form of Corporate/Keogh 401(a) Plan Endorsement
(4f) Form of Unisex Endorsement
(4g) Form of Qualified Plan Endorsement
(5a) Form of Application for a Group Variable Annuity Contract
(5b) Form of Application for a Group Variable Annuity Certificate
(8) Form of Participation Agreement
(9) Opinion and Consent of Counsel
(16) Powers of Attorney
(17) Specimen Tax-Sheltered Annuity Acknowledgement
(18) Administrative Services Agreement
EXHIBIT 1
RESOLVED, that this Corporation is hereby authorized to establish one or
more separate accounts in accordance with state insurance laws and to issue
annuity and life insurance contracts with the reserves for such contracts
being segregated in such separate accounts; and
FURTHER RESOLVED, that the proper officers of this Corporation are
hereby authorized to designate said separate accounts as may be deemed
necessary or convenient and to register such separate accounts and separate
account and non-separate account annuity and life insurance contracts under
such federal security laws as are deemed appropriate; and
FURTHER RESOLVED, that the proper officers of this Corporation are
hereby authorized to invest such sums in any separate account established
hereby as may be deemed necessary or appropriate to comply with requirements
of applicable law; and
FURTHER RESOLVED, that the proper officers of this Corporation are
hereby authorized to do any act necessary to carry out the purposes of this
resolution.
EXHIBIT 3(a)
PRINCIPAL UNDERWRITER'S AGREEMENT
IT IS HEREBY AGREED by and between AMERICAN BENEFIT LIFE INSURANCE
COMPANY ("INSURANCE COMPANY"), a New York corporation, on behalf of Variable
Account [ ] (the "Variable Account") and KEYPORT FINANCIAL SERVICES
CORP. ("PRINCIPAL UNDERWRITER"), a Massachusetts corporation, as follows:
I
INSURANCE COMPANY has established, pursuant to Massachusetts Insurance
Law, a separate account designated as the Variable Account [ ].
INSURANCE COMPANY proposes to issue and sell flexible premium variable
annuity contracts and certificates designated by form number [ ]
("Contracts") to the public through PRINCIPAL UNDERWRITER. Contracts to be
sold are more fully described in the Registration Statement (including the
Prospectus and Statement of Additional Information) hereinafter mentioned.
II
INSURANCE COMPANY appoints PRINCIPAL UNDERWRITER, during the term of
this Agreement, to be the principal underwriter and distributor of Contracts,
subject to the registration requirements of the Securities Act of 1933 and
the Investment Company Act of 1940 applicable to INSURANCE COMPANY and the
Variable Account, and to the provisions of the Securities Exchange Act of
1934 applicable to PRINCIPAL UNDERWRITER. PRINCIPAL UNDERWRITER will sell
and cause to be sold Contracts under such terms as are agreed to by INSURANCE
COMPANY and PRINCIPAL UNDERWRITER and will make direct sales in its own right
to purchasers permitted to buy such Contracts as specified in the Prospectus,
as well as arrange for the sale of Contracts through other qualified broker-
dealers in its capacity as principal underwriter of such Contracts.
III
PRINCIPAL UNDERWRITER shall be compensated for its distribution services
with respect to Contracts as set forth in the attached Compensation Schedule.
PRINCIPAL UNDERWRITER shall pay all broker/dealers out of the compensation it
receives from INSURANCE COMPANY. INSURANCE COMPANY has the right to charge
back any such compensation under the conditions stated in such Schedule. Any
Compensation Schedule may be changed by INSURANCE COMPANY as of a specified
date, provided such date is at least 30 days after the date notice of the
change is received by PRINCIPAL UNDERWRITER. Any such change will apply only
to purchase payments received by INSURANCE COMPANY on or after the effective
date of the change.
IV
PRINCIPAL UNDERWRITER shall maintain or cause to be maintained all such
required books and records which shall: (a) be maintained in conformity with
all applicable requirements of the Securities Exchange Act of 1934, any other
applicable federal or state laws, and the National Association of Securities
Dealers, Inc. ("NASD"), and, to the extent of such requirements, shall remain
property of PRINCIPAL UNDERWRITER; and (b) be subject to inspection at all
times by duly authorized officers, auditors or representatives of the
INSURANCE COMPANY, Securities and Exchange Commission, NASD and applicable
state regulatory agencies.
V
On behalf of the Variable Account, INSURANCE COMPANY shall furnish
PRINCIPAL UNDERWRITER with copies of all Prospectuses, Statements of
Additional Information, sales literature and other documents which PRINCIPAL
UNDERWRITER reasonably requests for use in connection with the distribution
of the Contracts.
VI
PRINCIPAL UNDERWRITER is not authorized to give any information or to
make any representations concerning the Variable Account, INSURANCE COMPANY
or the Contracts other than those contained in the current Registration
Statement (including the Prospectus and Statement of Additional Information)
filed with the Securities and Exchange Commission or in such sales literature
as is authorized by INSURANCE COMPANY.
VII
The parties to this Agreement agree to work together to make certain
that the necessary records, as enumerated in Section IV, above, are
maintained and to render the necessary assistance to one another for the
accurate and timely preparation of such records.
VIII
This Agreement shall be effective upon its execution and shall replace
in all respects the parties' Principal Underwriter's Agreement of [
]. This Agreement shall remain in effect unless terminated as hereinafter
provided. This Agreement shall be automatically terminated in the event of
its assignment by PRINCIPAL UNDERWRITER.
This Agreement may be terminated at any time by either party hereto upon
not less than 60 days written notice to the other party.
IX
All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been given on the
date of service if served personally on the party to whom notice is to be
given, or on the date of mailing if sent by certified mail, postage prepaid
and properly addressed.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
signed on their behalf on by their respective officers
thereunto duly authorized.
AMERICAN BENEFIT LIFE
INSURANCE COMPANY
("INSURANCE COMPANY")
ATTEST: BY:
President
KEYPORT FINANCIAL SERVICES
CORP.
("PRINCIPAL UNDERWRITER")
ATTEST: BY:
Secretary
EXHIBIT 3(b)
KEYPORT BENEFIT LIFE INSURANCE COMPANY BROKER/DEALER'S
AGREEMENT
Keyport Benefit Life Insurance Company ("Keyport Benefit"), a New York
corporation, Keyport Financial Services Corp. ("KFSC"), a Massachusetts
corporation, and Broker/Dealer hereby agree as follows:
1. KFSC is the principal underwriter for variable annuity contracts and
certificates DVA(1)NY (hereafter "Contract") issued by Keyport Benefit
and the separate account of Keyport Benefit designated Variable Account
A.
2. Broker/Dealer desires to enter into a distribution agreement with KFSC
and to have its registered representatives appointed as agents of
Keyport Benefit for the purpose of selling the Contract to New York
residents.
3. Broker/Dealer certifies that it is a registered broker/dealer under the
Securities Exchange Act of 1934 and is a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD").
Broker/Dealer agrees to abide by all applicable rules and regulations of
the NASD and to comply with all applicable state and federal laws and
rules and regulations of authorized regulatory agencies affecting the
sale of the Contracts.
4. Broker/Dealer will select persons associated with it who are to be
appointed as agents of Keyport Benefit to solicit applications for the
Contracts in conformance with applicable state and federal laws. No
agent will be permitted to solicit sales of the Contracts in any state
other than New York.
5. All solicitations for the Contracts will be made only by duly authorized
agents who possess the required licenses and appointments and
Broker/Dealer will pay compensation only to such agents. Continued
solicitation for the Contracts shall be contingent upon the continued
qualification of such agents by possession of the required licenses and
appointments.
6. Broker/Dealer shall have the responsibility to supervise all agents
appointed under this Agreement and shall indemnify and hold harmless the
separate account, the eligible mutual funds and their directors and
trustees, KFSC, and Keyport Benefit from any damage or expenses on
account of any wrongful act by Broker/Dealer, its representatives, and
agents in connection with the solicitation of Contracts.
7. Broker/Dealer shall review all applications for the Contracts, accept
them on Broker/Dealer's behalf, and promptly forward them to Keyport
Benefit (at the address shown on the then current prospectus for the
Contracts) together with any purchase payments received with such
applications without deduction for any compensation. Keyport Benefit
has the right to reject any application for a Contract and return any
purchase payment made in connection therewith.
8. Broker/Dealer will offer and sell the Contract only in accordance with
the terms and conditions of the then current prospectus applicable to
the Contracts and the eligible mutual funds and will make no
representations not included in the prospectus or in any authorized
supplemental material approved by KFSC and Keyport Benefit.
Broker/Dealer shall not use or permit to be used supplemental material
or advertising media with regard to the Contracts other than with the
prior written approval of KFSC and Keyport Benefit.
9. Broker/Dealer is performing the acts covered by this Agreement in the
capacity of independent contractor and not as an agent or employee of
either KFSC or Keyport Benefit. Neither KFSC nor Keyport Benefit shall
be liable for any obligation, act or omission of Broker/Dealer.
10. Broker/Dealer shall be paid by Keyport Benefit (on behalf of KFSC)
compensation for the sale of Contracts as set forth in the attached
Compensation Schedules(s). Keyport Benefit has the right to charge back
any such compensation under the conditions stated in such Schedule(s).
Any Compensation Schedule can be changed by KFSC and Keyport Benefit as
of a specified date, provided such date is at least 10 days after the
date the change is mailed to Broker/Dealer's last known address. Any
such change will apply only to purchase payments received by Keyport
Benefit after the effective date of the change.
11. Keyport Benefit may offset against any claim for compensation herein any
debts now due or which may become due Keyport Benefit from Broker/Dealer
or from a General Agent affiliated with Broker/Dealer, and such debts
shall be a first lien against any compensation due Broker/Dealer
hereunder. Broker/Dealer may not offset against any such debts any
compensation accrued or to accrue hereunder but not yet payable to
Broker/Dealer.
12. This Agreement shall take effect as of the date it is signed by Keyport
Benefit, which date is shown below. It shall continue in force from
year to year unless it is terminated. This Agreement may be terminated
for any reason by any party; such termination will become effective 60
days after the mailing of a notice of termination to the other parties
last known address. This Agreement may be terminated by KFSC or Keyport
Benefit for cause (i.e. Broker/Dealer's violation of any of the terms of
this Agreement); such termination will become effective upon the mailing
of a notice of termination to the Broker/Dealer's last known address.
Failure of KFSC or Keyport Benefit to terminate this Agreement upon
knowledge of a cause shall not constitute a waiver of the right to
terminate at a later time for such cause. This Agreement shall
immediately terminate automatically if Broker/Dealer shall cease to be a
member of the NASD or to possess the requisite licenses and
appointments, and Broker/Dealer agrees to immediately notify KFSC and
Keyport Benefit of such an occurrence. No provisions of this Agreement
other than numbers 6, 9, 10, 11 and 13 shall continue in force after any
termination and the provisions of number 10 shall be subject to any
limitations contained in the Compensation Schedule(s).
13. This Agreement may not be assigned by Broker/Dealer except with the
written consent of KFSC and Keyport Benefit. This Agreement shall be
construed in accordance with the laws of the Commonwealth of
Massachusetts.
Keyport Financial Services Corp.
(Name of Broker/Dealer)
BY: BY:
TITLE: TITLE:
DATE: DATE:
Keyport Benefit Life
Insurance Company STATE OF INCORPORATION:
BY:
TITLE:
DATE:
EXHIBIT 4(a)
KEYPORT BENEFIT LIFE INSURANCE COMPANY
Read this Contract carefully. This document is a description of the
legal contract between the Group Contract Owner and Us.
A Certificate Owner may return a Certificate to Us within 10 days after
receipt by delivering or mailing it to Our Office. The return of the
Certificate by mail will be effective when the postmark is affixed to a
properly addressed and postage prepaid envelope. This returned Certificate
will be treated as if We never issued it and We will refund the Certificate
Value plus any amount deducted from the purchase payment before it was
allocated to the Variable Account. The Certificate Value will be determined
as of the date of surrender (i.e., for a mailed contract, the postmark date).
The Group Contract, as issued to the Group Contract Owner by Us with any
riders or endorsements, alone makes up the agreement under which benefits are
paid. The Group Contract may be inspected at the office of the Group
Contract Owner. In consideration of any application for a Certificate and
the payment of purchase payments, We agree, subject to the terms and
conditions of the Group Contract, to provide the benefits described in the
Certificate to the Certificate Owner. If a Certificate is In Force on the
Income Date, We will begin making income payments to the Annuitant. We will
make such payments according to the terms of the Certificate and Group
Contract.
Signed for the Company on the Issue Date at Our Executive Office, 125
High Street, Boston, Massachusetts 02110:
_________________________ _________________________
Secretary President
POLICY DESCRIPTION
This is a GROUP VARIABLE ANNUITY CONTRACT with limited purchase payment
flexibility. This contract is nonparticipating with no dividends.
ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY THIS CONTRACT, WHEN BASED
ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT
GUARANTEED AS TO DOLLAR AMOUNT. VARIABLE ANNUITY PAYMENTS WILL NOT DECREASE
OVER TIME IF THE SEPARATE ACCOUNT (AFTER DEDUCTION OF THE ANNUAL [1.55%]
ASSET CHARGE) HAS AN ANNUALIZED INVESTMENT RETURN OF AT LEAST 5.0%. SEE PAGES
12-13 AND 19 FOR FURTHER EXPLANATION. CONTRACT ASSETS ALLOCATED TO THE
SEPARATE ACCOUNT INCUR CHARGES OF [1.55%] BEFORE ANNUITY PAYMENTS BEGIN AND
[1.40%] ONCE ANNUITY PAYMENTS BEGIN. INCOME, CAPITAL GAINS, AND/OR LOSSES
WHETHER OR NOT REALIZED, FROM ASSETS ALLOCATED TO THE SEPARATE ACCOUNT ARE
CREDITED TO OR CHARGED AGAINST THE SEPARATE ACCOUNT WITHOUT REGARD TO INCOME,
CAPITAL GAINS, AND/OR LOSSES ARISING OUT OF ANY OTHER BUSINESS THE COMPANY
MAY CONDUCT.
<PAGE>
Table of Contents
Page
Right to Examine Certificate 1
Definitions 2
Contract Schedule 3
General Provisions 5
Variable Account Provisions 10
Transfers 13
Partial Withdrawals and Total Surrender 14
Death Provisions 15
Annuity Provisions 16
Endorsements (if any) are before page 22
Definitions
Accumulation Period: The period prior to the Income Date during which
Purchase Payments may be made by a Certificate Owner.
Accumulation Unit: An accounting unit used to calculate a Certificate Owner's
interest in a Sub-account of the Variable Account during the Accumulation
Period.
Adjusted Certificate Value: The Certificate Value less any applicable taxes
relating to a Certificate and Certificate Maintenance Charge. This amount is
applied to the applicable Annuity Tables to determine Annuity Payments.
Annuitant: The natural person on whose life Annuity Payments are based, and
to whom any Annuity Payments will be made starting on the Income Date.
Annuity Options: Options available for Annuity Payments.
Annuity Payments: The series of payments made to the Annuitant, starting on
the Income Date, under the Annuity Option selected.
Annuity Period: The period after the Income Date during which Annuity
Payments are made.
Annuity Unit: An accounting unit used to calculate Variable Annuity Payments
during the Annuity Period.
Beneficiary: The person(s) or entity(ies) who controls the Certificate if
any Certificate Owner dies before the Income Date.
<PAGE>
KEYPORT BENEFIT LIFE INSURANCE COMPANY
125 High Street, Boston, MA 02110
Service Office
125 High Street, 11th Floor
Boston, MA 02110
Contract Schedule
GROUP CONTRACT OWNER [Liberty Insurance Trust]
GROUP CONTRACT NUMBER [678999]
GROUP CONTRACT ISSUE DATE [6/30/96]
MINIMUM INITIAL PAYMENT [$5,000]
MINIMUM ADDITIONAL PAYMENT [$1,000]
Charges
Distribution Charge [We deduct [0.000411%] of the assets in each Variable
Account Sub-Account on a daily basis (equivalent to an annual rate of
[0.15%]) to compensate Us for a portion of Our distribution costs.]
Administrative Charge [We deduct [0.000411%] of the assets in each Variable
Account Sub-account on a daily basis (equivalent to an annual rate of
[0.15%]) to compensate Us for a portion of Our administrative expenses.]
Mortality and Expense Risk Charge [We deduct [0.003403%] of the assets in
each Variable Account Sub-account on a daily basis (equivalent to an annual
rate of [1.25%]) for Our mortality and expense risks.]
Certificate Maintenance Charge [We charge [$36] to cover a portion of Our
ongoing Certificate maintenance expenses. The charge is incurred at the
beginning of the Certificate Year and is deducted from the assets of the
Variable Account on each Certificate Anniversary and at the time of total
surrender. We reserve the right to charge up from the assets of the Variable
Account $100 per year.]
Transfer Charge [Currently none, however, We reserve the right to charge
[$25] for a transfer if a Certificate Owner makes more than [12] transfers
per Certificate Year.]
Surrender Charge [At the time of each partial withdrawal or at total
surrender a contingent deferred sales charge is imposed as a percentage of
each Purchase Payment during the [seven] years after the date of its payment,
as follows:
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
7% 6% 5% 4% 3% 2% 1%
Thereafter 0%].
Initial Purchase Payment Allocation
Currently, Certificate Owners can select [7] Sub-accounts [and the Fixed
Account]. We reserve the right to increase or decrease the number of
available Sub-accounts. The minimum a Certificate Owner may allocate to any
Sub-account [or the Fixed Account] is [10%] of any Purchase Payment. An
initial Purchase Payment may be invested as follows:
[Manning & Napier Moderate Growth
Manning & Napier Growth
Manning & Napier Maximum Horizon
Manning & Napier Equity
Manning & Napier Small Cap
Manning & Napier Bond
SteinRoe Cash Income Fund
Interest Rate at Issue
Fixed Account - 1 Year x% ____%
3 Year x% ____%
5 Year x% ____%
7 Year x% ____%
Transfer Guidelines
Number of Transfers and Transfer Charge: [Currently, Certificate Owners are
permitted [12] transfers per Certificate Year during the Accumulation Period
and [1] transfer every [6] months during the Annuity Period. We reserve the
right to change, upon notice, the frequency of transfers a Certificate Owner
can make. We also reserve the right to impose a charge for any transfer in
excess of [12] per Certificate Year. The transfer charge is shown in the
Charges section of the Schedule.]
Minimum amount to be transferred: [None]
Minimum amount which must remain in a Sub-account after transfer: [None]
[Limitations on transfers from Fixed Account: Transfers during a Certificate
Year from the Fixed Account to the Variable Account are limited to [25%] of
the Fixed Account Value at the beginning of the Certificate Year. This
limitation will be waived if a systematic program of monthly transfers has
been established.]
Partial Withdrawals
A Certificate Owner may make partial withdrawals during the Accumulation
Period without incurring a Surrender Charge[, as follows:
(1) In any Certificate Year a Certificate Owner may withdraw an
aggregate amount not to exceed, at the time of withdrawal:
(a) the Certificate Value, less
(b) the portion of the Purchase Payments not previously
withdrawn by that Certificate Owner; and
(2) In any Certificate Year after the first, a Certificate Owner may
also withdraw the positive difference, if any, between the amount
withdrawn pursuant to (1) above in any such subsequent year and
10% of the Certificate Value as of the preceding Certificate
Anniversary.We will collect the Surrender Charge shown on the
Schedule with respect to partial withdrawals in excess of the
amounts described in (1) and (2) above].
Minimum withdrawal amount: [$300], [unless the withdrawal is made pursuant to
Our Systematic Withdrawal Program described below, in which case the minimum
withdrawal is [$100].]
Minimum Certificate Value which must remain after a partial withdrawal:
[$2,500].
Death Benefits
Adjustment of Certificate Value
When We receive due proof of death of the Certificate Owner, [any Joint
Certificate Owner,] or the Annuitant if the Certificate Owner is a non-
natural Person, We will compare, as of the date of death, the Certificate
Value to the Death Benefit amount defined in the Certificate Schedule. If
the Certificate Value is less than the Death Benefit, We will increase the
current Certificate Value by the amount of the difference. Any amount
credited will be allocated to the Variable Account [and/or the Fixed Account]
based on the Purchase Payment allocation selection that is in effect when We
receive due proof of death.
[Waiver of Surrender Charges
If the Certificate is surrendered within [90] days of the date of death of
the Certificate Owner, [any Joint Certificate Owner,] or the Annuitant if the
Certificate Owner is a non-natural Person, any applicable Surrender Charges
will not be deducted from the Certificate Withdrawal Value.]
Death Benefit Amount
A Certificate Schedule will contain one [or more] of the following Death
Benefit provisions.
[Purchase Payment Death Benefit
On the Certificate Date the Death Benefit is the initial Purchase Payment.
On subsequent Valuation Dates, the Death Benefit is calculated as follows:
(1) Start with the Death Benefit from the prior Valuation Date;
(2) Add to (1) any additional Purchase Payments paid during the
current Valuation Period and subtract from (1) any partial
withdrawals (including any associated Surrender Charge incurred)
made during the current Valuation Period.]
[Certificate Anniversary Death Benefit
On the Certificate Date, the Death Benefit is the initial Purchase Payment.
On subsequent Valuation Dates, the Death Benefit is calculated as follows:
(1) (a) Start with the Death Benefit from the Certificate Date;
(b) Add to (a) any additional Purchase Payments paid since the
Certificate Date and subtract from (a) any partial
withdrawals (including any associated Surrender Charge
incurred) made since the Certificate Date;
(2) (a) Determine the Certificate Value for each Certificate
Anniversary (the "Anniversary Value") before the [81st]
birthday of the Certificate Owner or, if the Certificate
Owner is a non-natural Person, the Annuitant;
(b) Increase each "Anniversary Value" by any Purchase Payments
made after that Value's Anniversary;
(c) Decrease each "Anniversary Value" by the following amount
calculated at the time of each partial withdrawal made
after that Value's Anniversary: (i) the partial withdrawal
amount (including any associated Surrender Charge incurred)
divided by the Certificate Value immediately preceding the
withdrawal, (ii) multiplied by the "Anniversary Value"
immediately preceding the withdrawal;
(d) Select the highest "Anniversary Value" after the
adjustments in (b) and (c) above;
(3) Set the Death Benefit equal to the greater of (1) and (2).]
[If there is a change of Certificate Owner, the new Certificate Owner's age
will be used to determine the amount in (2) above.]
The Variable Separate Account[s]
Sub-accounts investing in shares of mutual funds
[Variable Account [J] is a unit investment trust variable separate account,
organized in and governed by the laws of the State of Massachusetts, Our
state of domicile. Variable Account [J] is divided into Sub-accounts. Each
Sub-account listed below invests in shares of the corresponding Portfolio of
the Eligible Fund shown.
Sub-account Eligible Fund and Portfolio
[Manning & Napier Insurance Fund, Inc.
Moderate Growth Manning & Napier Moderate Growth Portfolio
Sub-account seeks with equal emphasis long-term growth and
preservation of capital.
Growth Sub-account Manning & Napier Growth Portfolio - seeks
long term growth of capital. The secondary
objective is the preservation of capital.
Maximum Horizon Manning & Napier Maximum Horizon Portfolio -
Sub-account seeks to achieve the high level of long-term
capital growth typically associated with the
stock market.
Equity Sub-account Manning & Napier Equity Portfolio- seeks long-
term growth of capital.
Small Cap Sub- Manning & Napier Small Cap Portfolio -
account seeks to achieve long term growth of capital
by investing principally in the equity
securities of small issuers.
Bond Sub-account Manning & Napier Bond Portfolio - seeks to
maximize total return in the form of both
income and capital appreciation by investing
in fixed income securities without regard to
maturity.
The Alger American Fund
Alger Growth Alger American Growth Portfolio - seeks
Sub-account long-term capital appreciation.
Alger Small Cap Alger American Small Capitalization
Sub-account Portfolio - seeks long-term capital
appreciation.
Alliance Variable Products Series Fund, Inc.
Alliance Global Bond Global Bond Portfolio - seeks a high level of
Sub-account return from a combination of current income
and capital appreciation by investing in a
globally diversified portfolio of high quality
debt securities denominated in the U.S. Dollar
and a range of foreign currencies.
Alliance Premier Growth Premier Growth Portfolio - seeks growth of
Sub-account capital rather than current income.
Keyport Variable Investment Trust
Colonial Growth & Income Colonial-Keyport Growth and Income
Sub-account Fund - seeks primarily income and long-
term capital growth and, secondarily,
preservation of capital.
Colonial Strategic Income Colonial-Keyport Strategic Income Fund -
Sub-account seeks a high level of current income, as is
consistent with prudent risk and maximizing
total return, by diversifying investments
primarily in U.S. and foreign government and
high yield, high risk corporate debt
securities.
Colonial Int'l Fund for Colonial-Keyport International Fund for
Growth Sub-account Growth- seeks long-term capital growth, by
investing primarily in non-U.S. equity
securities.
Colonial U.S. Fund for Colonial-Keyport U.S. Fund for Growth -
Growth Sub-account seeks growth exceeding over time the S&P
500 Index (Standard & Poor's Corporation
Composite Price Index) performance.
Colonial Utilities Colonial-Keyport Utilities Fund - seeks
Sub-account primarily current income and, secondarily,
long-term capital growth.
Newport Tiger Newport-Keyport Tiger Fund - seeks long-
Sub-account term capital growth by investing primarily
in equity securities of companies located in
the four Tigers of Asia (Hong Kong, Singapore,
South Korea and Taiwan) and the other mini-
Tigers of East Asia (Malaysia, Thailand,
Indonesia, China and the Philippines).
MFS Variable Insurance Trust
MFS Emerging Growth MFS Emerging Growth Series - seeks to provide
Sub-account long-term growth of capital.
MFS Research MFS Research Series - seeks to provide long-
Sub-Account term growth of capital and future income.
SteinRoe Variable Investment Trust
SteinRoe Cap Appreciation Capital Appreciation Fund - seeks capital
Sub-account growth by investing primarily in common
stocks, convertible securities, and other
securities selected for prospective capital
growth.
SteinRoe Cash Income Cash Income Fund - seeks high current income
Sub-account from short-term money market instruments
("Money Market" Sub-account) while emphasizing preservation of capital and
maintaining excellent liquidity.
SteinRoe Managed Assets Managed Assets Fund - seeks high total inves-
Sub-account tment return through investment in a changing
mix of securities.
SteinRoe Managed Growth Managed Growth Stock Fund - seeks long-term
Stock Sub-account growth of capital through investment primarily
in common stocks.
SteinRoe Mortgage Securities Mortgage Securities Income Fund - seeks
Income Sub-account highest possible level of current income
consistent with safety of principal and
maintenance of liquidity through investment
primarily in mortgage-backed securities.
[Variable Account [M] is an investment company variable separate account
which invests directly in securities, organized in and governed by the laws
of the State of Massachusetts, Our state of domicile. Variable Account [M]
is divided into Sub-accounts. The investment advisor to each Sub-account is
set forth opposite each Sub-account shown below:
Sub-account Investment Advisor
Currently, none] [Currently, none] ]
The Fixed Account
[The Fixed Account is part of Our General Account, which consists of all of
Our assets except the assets of the Variable Account and the assets of other
separate accounts that We maintain. Subject to applicable law, We have sole
discretion over investments of the assets of the Fixed Account. If a
Certificate Owner allocates assets to the Fixed Account, the Certificate
Owner's accumulation values and annuity payments will have guaranteed
minimums.
Before the Income Date, a Certificate Owner's interest in the Fixed Account
is measured by the Fixed Account Value. When annuity payments begin, the
payee's interest in the Fixed Account is measured by the amount of each
periodic payment.
Benefits from the Fixed Account will not be less than the minimum values
required by any law of the jurisdiction where the Certificate is delivered.
Purchase Payments will be allocated to the Fixed Account in accordance with a
Certificate Owner's selection at the Certificate Date. A Certificate Owner
may change such selection by Written Request.
The Fixed Account Value at any time is equal to:
(1) all Purchase Payments allocated to the Fixed Account plus the
interest subsequently credited on those payments; plus
(2) any Variable Account value transferred to the Fixed Account plus the
interest subsequently credited on the transferred value; less
(3) any prior partial withdrawals from the Fixed Account;less
(4) any Fixed Account Value transferred to the Variable Account.
We will credit interest to Purchase Payments allocated to the Fixed Account
at rates declared by Us for Guarantee Periods of one [or more] year[s] from
the month and day of allocation. The minimum Guaranteed Interest Rate is
[3%] per year.]
Certificate Owner Services
The Programs. [Keyport Benefit offers [the following] investment related
program[s] which [is] are available only prior to the Income Date: [Dollar
Cost Averaging;] [Capital Protection Plus]; [and] [Systematic Withdrawal
Programs]. [A Rebalancing Program is available prior to and after the Income
Date.] Under [each] [this] Program, the related transfers between and among
Sub-Accounts and the Fixed Account are not counted as one of the [twelve]
free transfers. Each Program[s] has its own requirements, as discussed
below. Keyport Benefit reserves the right to terminate any Program.]
[Dollar Cost Averaging Program. The program periodically transfers
Accumulation Units from the SteinRoe Cash Income Sub-Account or the One-Year
Guarantee Period of the Fixed Account to other Sub-Accounts selected by the
Certificate Owner. The program allows a Certificate Owner to invest in
Variable Sub-Accounts over time rather than having to invest in those Sub-
Accounts all at once. The program is available for initial and subsequent
Purchase Payments and for Certificate Value transferred into the SteinRoe
Cash Income Sub-Account or the One-Year Guarantee Period. Under the program,
Keyport Benefit makes automatic transfers on a periodic basis out of the
SteinRoe Cash Income Sub-Account or the One-Year Guarantee Period into one or
more of the other available Sub-Accounts (Keyport Benefit reserves the right
to limit the number of Sub-Accounts the Certificate Owner may choose but
there are currently no limits). The program will automatically end if the
Income Date occurs. Keyport Benefit reserves the right to end the program at
any time by sending the Certificate Owner a notice one month in advance.]
[Rebalancing Program. In accordance with the Certificate Owner's election
of the relative Purchase Payment percentage allocations, Keyport Benefit will
automatically rebalance the Certificate Value of each Sub-Account either
monthly, quarterly, semi-annually, or annually. On the last day of the
period selected, Keyport Benefit will automatically rebalance the Certificate
Value in each of the Sub-Accounts to match the current Purchase Payment
percentage allocations. The Program may be terminated at any time and the
percentages may be altered by Written Request. Certificate Value allocated to
the Fixed Account is not subject to automatic rebalancing. After the Income
Date, automatic rebalancing applies only to variable annuity payments and
Keyport Benefit will rebalance the number of Annuity Units in each Sub-
Account.]
[Systematic Withdrawal Program. Keyport Benefit will make monthly, quarterly,
semi-annually or annual distributions of a predetermined dollar amount to the
Certificate Owner that has enrolled in the Systematic Withdrawal Program. The
Certificate Owner may specify the amount of each partial withdrawal, subject
to a minimum of $100. Systematic withdrawals may only be made from the Sub-
Accounts and the One Year Guarantee Period of the Fixed Account. In each
Certificate Year, portions of Certificate Value may be withdrawn without the
imposition of any Contingent Deferred Sales Charge ("Free Withdrawal
Amount"). If withdrawals pursuant to the Program are greater than the Free
Withdrawal Amount, the amount of the withdrawals greater than the Free
Withdrawal Amount will be subject to the applicable Contingent Deferred Sales
Charge. Any unrelated voluntary partial withdrawal a Certificate Owner makes
during a Certificate Year will be aggregated with withdrawals pursuant to the
Program to determine the applicability of any Contingent Deferred Sales
Charge under the Certificate provisions regarding partial withdrawals.]
[Capital Protection Plus Under this program, Keyport Benefit will allocate
part of the Purchase Payment to the Guarantee Period selected by the
Certificate Owner so that such part, based on that Guarantee Period's
interest rate in effect on the date of allocation, will equal at the end of
the Guarantee Period the total Purchase Payment. The rest of the Purchase
Payment will be allocated to the Sub-Account(s) of the Variable Account based
on the Certificate Owner's allocation. If any part of the Fixed Account
Value is surrendered or transferred before the end of the Guarantee Period,
the Value at the end of that Period will not equal the original Purchase
Payment amount.]
<PAGE>
Definitions (continued)
Certificate: The document issued to a Certificate Owner to evidence a
Certificate Owner's participation under the Group Contract. The Certificate
summarizes the benefits and provisions of the Group Contract.
Certificate Anniversary: An anniversary of the Certificate Date.
Certificate Date: The date a Certificate is issued to a Certificate Owner.
The Certificate Date is shown on the Certificate Schedule.
Certificate Owner: The person who owns a Certificate under the Group
Contract. Any Joint Certificate Owners and the Certificate Owner own the
Certificate equally with rights of survivorship. All Owners must exercise
ownership rights and privileges together, including the signing of Written
Requests.
Certificate Value: The sum of the Certificate Owner's interest in the Sub-
accounts of the Variable Account and the Fixed Account during the
Accumulation Period.
Certificate Year: The first Certificate Year is the annual period which
begins on the Certificate Date. Subsequent Certificate Years begin on each
Certificate Anniversary.
Eligible Fund: An investment entity shown on the Certificate Schedule.
Fixed Account: The account We establish to support Fixed Allocations. The
Contract Schedule shows whether the Fixed Account is available under the
Certificates.
Fixed Account Value: The value of all Fixed Account amounts accumulated
under a Certificate prior to the Income Date.
Fixed Allocation: An amount allocated to the Fixed Account that is credited
with a Guaranteed Interest Rate for a specified Guarantee Period.
Fixed Annuity: An annuity with a series of payments made during the Annuity
Period which are guaranteed as to dollar amount by Us.
General Account: Our general investment account which contains all of Our
assets except those in the Variable Account and Our other separate accounts.
Group Contract Owner: The person or entity to which the Group Contract is
issued.
Guaranteed Interest Rate: The effective annual interest rate which We will
credit for a specified Guarantee Period.
Guarantee Period: The period of year(s) a rate of interest is guaranteed to
be credited within the Fixed Account.
Income Date: The date on which Annuity Payments begin. The Income Date is
shown on the Certificate Schedule.
In Force: The status of a Certificate before the Income Date so long as it
has not been totally surrendered and there has not been a death of a
Certificate Owner or Joint Certificate Owner that will cause the Certificate
to end within five years of the date of death.
Office: Our service office shown on the Certificate Schedule.
Person: A human being, trust, corporation, or any other legally recognized
entity.
Portfolio: A series of an Eligible Fund which constitutes a separate and
distinct class of shares.
Purchase Payment: A payment made by or on behalf of a Certificate Owner with
respect to a Certificate.
Sub-account: Variable Account assets are divided into Sub-accounts. Assets
of each Sub-account will be invested in shares of a Portfolio of an Eligible
Fund, or directly in portfolio securities.
Valuation Date: Each day on which We and the New York Stock Exchange
("NYSE") are open for business, or any other day that the Securities and
Exchange Commission requires that mutual funds, unit investment trusts or
other investment portfolios be valued.
Valuation Period: The period of time beginning at the close of business of
the NYSE on each Valuation Date and ending at the close of business on the
next succeeding Valuation Date.
Variable Account: Our Variable Account(s) shown on the Certificate Schedule.
Variable Annuity: An annuity with payments which vary as to dollar amount in
relation to the investment performance of specified Sub-accounts of the
Variable Account.
We, Us, Our: Keyport Benefit Life Insurance Company.
Written Request: A request in writing, in a form satisfactory to Us, and
received by Us at Our Office.
General Provisions
Purchase Payments
The initial Purchase Payment is due on the Certificate Date. It must be paid
at Our Office in United States currency. Coverage under a Certificate does
not take effect until We have accepted the initial Purchase Payment during a
Certificate Owner's lifetime. Each Purchase Payment after the Certificate
Date must be at least the amount shown on the Certificate Schedule. Provided
the Certificate Value under a Certificate does not go to zero, a Certificate
will stay in force until the Income Date even if a Certificate Owner make no
payments after the initial one. We reserve the right to reject any
subsequent Purchase Payment.
Allocation of Purchase Payments
An initial Purchase Payment is allocated to the Sub-accounts of the Variable
Account, and to the Fixed Account if available, in accordance with the
selections made by a Certificate Owner at the Certificate Date. Unless
otherwise changed by a Certificate Owner, subsequent Purchase Payments are
allocated in the same manner as the initial Purchase Payment. Allocation of
Purchase Payments is subject to the terms and conditions imposed by Us. We
reserve the right to allocate initial Purchase Payments to the Money Market
Sub-account until the expiration of the Right to Examine Certificate period
set forth on the first page of the Group Contract and the Certificate.
The Contract
The Group Contract, including the application, if any, and any attached rider
or endorsement constitute the entire contract between the Group Contract
Owner and Us. All statements made by the Group Contract Owner, any
Certificate Owner or any Annuitant will be deemed representations and not
warranties. No such statement will be used in any contest unless it is
contained in the application signed by the Group Contract Owner or in a
written instrument signed by the Certificate Owner, a copy of which has been
furnished to the Certificate Owner, the Beneficiary or to the Group Contract
Owner.
Only Our President or Secretary may agree to change any of the terms of the
Group Contract. Any changes must be in writing. Any change to the terms of
a Certificate must be in writing and with Certificate Owner's consent,
unless provided otherwise by the Group Contract and the Certificate.
To assure that the Group Contract and the Certificate will maintain their
status as a variable annuity under the Internal Revenue Code, We reserve the
right to change the Group Contract and any Certificate issued thereunder to
comply with future changes in the Internal Revenue Code, any regulations or
rulings issued thereunder, and any requirements otherwise imposed by the
Internal Revenue Service. The Group Contract Owner and the affected
Certificate Owner will be sent a copy of any such amendment.
We reserve the right, subject to the approval of the New York Superintendent
of Insurance and compliance with U.S. Laws as currently applicable or
subsequently changed, to: (a) operate the Variable Account in any form
permitted under the Investment Company Act of 1940, as amended, (the "1940
Act"), or in any other form permitted by law; (b) take any action necessary
to comply with or obtain and continue any exemptions from the 1940 Act, or to
comply with any other applicable law; (c) transfer any assets in any Sub-
account to another Sub-account, or to one or more separate investment
accounts, or the General Account; or to add, combine or remove Sub-accounts
in the Variable Account; and (d) change the way We assess charges, so long as
We do not increase the aggregate amount beyond that currently charged to the
Variable Account and the Eligible Funds in connection with a Certificate. If
the shares of any of the Eligible Funds should become unavailable for
investment by the Variable Account or if in Our judgment further investment
in such Portfolio shares should become inappropriate in view of the purpose
of the Certificate, We may add or substitute shares of another mutual fund
for the Portfolio shares already purchased under the Certificate. No
substitution of Portfolio shares in any Sub-account may take place without
prior approval of the Securities and Exchange Commission and notice to the
affected Certificate Owners, to the extent required by the 1940 Act.
Certificate Owner
A Certificate Owner has all rights and may receive all benefits under a
Certificate. A Certificate Owner is the person designated as such on the
Certificate Date, unless changed. A Certificate Owner may exercise all
rights of a Certificate while it is In Force, subject to the rights of (a)
any assignee under an assignment filed with Us, and (b) any irrevocably named
Beneficiary.
Joint Certificate Owner
A Certificate can be owned by Joint Certificate Owners. Upon the death of
any Certificate Owner or Joint Certificate Owner, the surviving owner(s) will
be the primary Beneficiary(ies). Any other beneficiary designation will be
treated as a Contingent Beneficiary unless otherwise indicated in a Written
Request filed with Us.
Annuitant
The Annuitant is the person on whose life Annuity Payments are based. The
Annuitant is the person designated by a Certificate Owner at the Certificate
Date, unless changed prior to the Income Date. Any change of Annuitant is
subject to Our underwriting rules then in effect. The Annuitant may not be
changed in a Certificate which is owned by a non-natural person. A
Certificate Owner may name a Contingent Annuitant. The Contingent Annuitant
becomes the Annuitant if the Annuitant dies while a Certificate is In Force.
If the Annuitant dies and no Contingent Annuitant has been named, We will
allow a Certificate Owner sixty days to designate someone other than the
Certificate Owner as Annuitant. The Certificate Owner will be the Contingent
Annuitant unless the Certificate Owner names someone else. If the Certificate
is owned by a non-natural person, the death of the Annuitant will be treated
as the death of the Certificate Owner and a new Annuitant may not be
designated.
Beneficiary
The Beneficiary is the person who controls the Certificate if any Certificate
Owner dies prior to the Income Date. If the Certificate is owned by Joint
Certificate Owners, upon the death of any Certificate Owner or Joint
Certificate Owner, the surviving owner(s) will become the primary
Beneficiary. Any other beneficiary designation will be treated as a
Contingent Beneficiary unless otherwise indicated in a Written Request filed
with Us. If a Certificate Owner names more than one Person as Primary
Beneficiary or as Contingent Beneficiary, and does not state otherwise on an
application or in a Written Request to Us, any non-survivors will not receive
a benefit. The survivors will receive equal shares. Subject to the rights
of any irrevocable Beneficiary(ies), a Certificate Owner may change primary
or contingent Beneficiary(ies). A change must be made by Written Request and
will be effective as of the date the Written Request is signed. We will not
be liable for any payment We make or action We take before We receive the
Written Request.
Group Contract Owner
The Group Contract Owner has title to the Group Contract. The Group Contract
and any amount accumulated under any Certificate are not subject to the
claims of the Group Contract Owner or any of its creditors. The Group
Contract Owner may transfer ownership of this Group Contract. Any transfer
of ownership terminates the interest of any existing Group Contract Owner.
It does not change the rights of any Certificate Owner. Nothing in the Group
Contract shall invalidate or impair any rights granted to the Certificate
Owner by the Certificate or New York law.
Change of Certificate Owner, Beneficiary or Contingent Annuitant
While a Certificate is In Force, a Certificate Owner may by Written Request
change the primary Certificate Owner, Joint Certificate Owner, primary
Beneficiary, Contingent Beneficiary, Contingent Annuitant, or in certain
instances, the Annuitant. An irrevocably named Person may be changed only
with the written consent of such Person. The change will be effective,
following Our receipt of the Written Request, as of the date the Written
Request is signed. The change will not affect any payments We make or
actions We take prior to the time We receive the Written Request.
Assignment of the Certificate
A Certificate Owner may assign a Certificate at any time while it is In
Force. The assignment must be in writing and a copy must be filed at Our
Office. A Certificate Owner's rights and those of any revocably named Person
will be subject to the assignment. An assignment will not affect any
payments We make or actions We take before We receive the assignment. We are
not responsible for the validity of any assignment.
Misstatement of Age or Sex
If the age or sex of the Annuitant or any payee has been misstated, We will
compute the amount payable based on the correct age and sex. If Annuity
Payments have begun, any underpayment(s) that have been made plus interest at
a rate of 5% per year will be paid in full with the next Annuity Payment.
Any overpayment plus interest at a rate of 5% per year, unless repaid to Us
in one sum, will be deducted from future Annuity Payments otherwise due until
We are repaid in full.
Non-Participating
A Certificate does not participate in Our divisible surplus.
Evidence of Death, Age, Sex or Survival
If a Certificate provision relates to the death of a natural Person, We will
require proof of death before We will act under that provision. Proof of
death shall be: (a) a certified death certificate; or (b) a certified decree
of a court of competent jurisdiction as to the finding of death; or (c) a
written statement by a medical doctor who attended the deceased; or (d) any
other document constituting due proof of death under applicable state law.
If Our action under a Certificate provision is based on the age, sex, or
survival of any Person, We may require evidence of the particular fact before
We act under that provision.
Protection of Proceeds
No Beneficiary or payee may commute or assign any payments under a
Certificate before they are due. To the extent permitted by law, no payments
shall be subject to the debts of any Beneficiary or payee or to any judicial
process for payment of those debts.
Reports
We will send Certificate Owners a report that shows the Certificate Value at
least once each Certificate Year. We will send any other reports that may be
required by law.
Taxes
Any taxes paid to any governmental entity relating to a Certificate will be
deducted from the Purchase Payments or Certificate Value. We may, in Our
sole discretion, delay the deduction until a later date. By not deducting
tax payments at the time of Our payment, We do not waive any right We may
have to deduct amounts at a later date. We will, in Our sole discretion,
determine when taxes relate to a Certificate or to the operation of the
Variable Account. We reserve the right to establish a provision for federal
income taxes if We determine, in Our sole discretion, that We will incur a
tax as a result of the operation of the Variable Account. Such a provision
will be reflected in the Accumulation and Annuity Unit Values. We will
deduct for any income taxes incurred by Us as a result of the operation of
the Variable Account whether or not there was a provision for taxes and
whether or not it was sufficient. We will deduct from any payment under a
Certificate any withholding taxes required by applicable law.
Regulatory Requirements
All values payable under a Certificate will not be less than the minimum
benefits required by the laws and regulations of the states in which the
Certificate is delivered.
Suspension or Deferral of Payments
We reserve the right to suspend or postpone payments for a withdrawal,
transfer, surrender or death benefit for any period when:
(1) the New York Stock Exchange is closed (other than customary
weekend and holiday closings); or
(2) trading on the New York Stock Exchange is restricted; or
(3) an emergency exists as a result of which valuation or disposal of
the assets and securities of the Variable Account is not
reasonably practicable; or
(4) the Securities and Exchange Commission, by order or pronouncement,
so permits for the protection of Certificate Owners;
provided that applicable rules and regulations of the Securities and Exchange
Commission govern as to whether the conditions described in (2) and (3) above
exist.
We reserve the right to delay payment of amounts allocated to the Fixed
Account for up to six months.
Variable Account Provisions
The Variable Account
The Variable Account(s) is designated on the Certificate Schedule and
consists of assets set aside by Us, which are kept separate from Our general
assets and all other variable account assets We maintain. We own the assets
of the Variable Account. Variable Account assets equal to reserves and other
contract liabilities will not be chargeable with liabilities arising out of
any other business We may conduct. We may transfer to Our General Account
assets which exceed the reserves and other liabilities of the Variable
Account. Income and realized and unrealized gains or losses from assets in
the Variable Account are credited to or charged against the account without
regard to other income, gains or losses in Our other investment accounts.
The Variable Account assets are divided into Sub-accounts. The Sub-accounts
which are available under the Certificate are shown on the Certificate
Schedule. The assets of the Sub-accounts of the unit investment trust
variable separate account are allocated to the Eligible Fund(s) and the
Portfolio(s), if applicable, within an Eligible Fund shown on the Certificate
Schedule. The assets of the Sub-accounts of the investment company variable
separate account, if applicable, are invested in portfolios of securities
designed to meet the objectives of the Sub-Account shown on the Certificate
Schedule. We may, from time to time, add additional Sub-accounts, Eligible
Funds or Portfolios to those shown on the Certificate Schedule. A
Certificate Owner may be permitted to transfer Certificate Values or allocate
Purchase Payments to the additional Sub-Accounts, Eligible Funds or
Portfolios. However, the right to make such transfers or allocations will be
limited by the terms and conditions imposed by Us.
We also have the right to eliminate Sub-accounts from the Variable Account,
to combine two or more Sub-accounts or to substitute a new Portfolio for the
Portfolio in which a Sub-account invests. A substitution may become
necessary if, in Our discretion, a Portfolio or Sub-account no longer suits
the purposes of the Group Contract. This may happen: due to a change in
laws or regulations or a change in a Portfolio's investment objectives or
restrictions; because the Portfolio or Sub-account is no longer available for
investment; or for some other reason. We will obtain any prior approvals
that may be required from the insurance department of Our state of domicile,
the New york Superintendent of Insurance and from the SEC or any other
governmental entity before making such a substitution.
When permitted by law, We reserve the right to:
(1) Deregister a Variable Account under the 1940 Act;
(2) Operate a Variable Account as a management company under the 1940 Act,
if it is operating as a unit investment trust;
(3) Operate a Variable Account as a unit investment trust under the 1940
Act, if it is operating as a management company;
(4) Restrict or eliminate any voting rights as to the account;
(5) Combine the Variable Account with any other variable account.
Valuation of Assets
The assets of the Variable Account are valued at their fair market value in
accordance with Our procedures.
Accumulation Units
A Certificate Owner's Variable Account value will fluctuate in accordance
with the investment results of the Sub-accounts to which the Certificate
Owner has allocated his or her Purchase Payments or Certificate Value. In
order to determine how these fluctuations affect a Certificate Owner's
Certificate Value, We use an Accumulation Unit value. Accumulation Units are
used to account for all amounts allocated to or withdrawn from the Sub-
accounts of the Variable Account as a result of Purchase Payments, partial
withdrawals, transfers, or charges deducted from the Certificate Value. We
determine the number of Accumulation Units of a Sub-account purchased or
canceled by dividing the amount allocated to, or withdrawn from, the Sub-
account by the dollar value of one Accumulation Unit of the Sub-account as of
the end of the Valuation Period during which We receive the request for the
transaction.
Accumulation Unit Value
The Accumulation Unit Value for each Sub-account was initially set at $10.
Subsequent Accumulation Unit Values for each Sub-account are determined by
multiplying the Accumulation Unit Value for the immediately preceding
Valuation Period by a net investment factor for the Sub-account for the
current period. This factor may be greater or less than 1.0; therefore, the
Accumulation Unit Value may increase or decrease from Valuation Period to
Valuation Period.
We calculate the net investment factor for each Sub-account investing in
shares of mutual funds by dividing (a) by (b) and then subtracting (c) where:
(a) is equal to:
(i) the net asset value per share of the Portfolio in which the Sub-
account invests at the end of the Valuation Period; plus
(ii) any dividend per share declared for the Portfolio that has an ex-
dividend date within the current Valuation Period.
(b) is the net asset value per share of the Portfolio at the end of the
preceding Valuation Period.
(c) is equal to:
(i) the sum of each Valuation Period equivalent of the annual rate for the
Mortality and Expense Risk Charge, for the Administrative Charge, and
for the Distribution Charge, if any, which are shown on the
Certificate
Schedule; plus
(ii) a charge factor, if any, for any tax provision established by Us a
result of the operation of the Sub-account.
We calculate the net investment factor for each Sub-account investing
directly in securities with the same formula, except:
(a) is equal to:
(i) the value of the assets in the Sub-account at the end of the
preceding Valuation Period; plus
(ii) any investment income and capital gains, realized or
unrealized, credited to the assets during the current Valuation
Period; less
(iii) any capital losses, realized or unrealized, charged against the
assets during the current Valuation Period; less
(iv) all operating and investment expenses relating to the assets
that are incurred during the current Valuation Period.
(b) is the value of the assets in the Sub-account at the end of the
preceding Valuation Period.
Mortality and Expense Risk Charge
Each Valuation Period We deduct a Mortality and Expense Risk Charge from each
Sub-account of the Variable Account which is equal, on an annual basis, to
the amount shown on the Certificate Schedule. The Mortality and Expense Risk
Charge compensates Us for assuming the mortality and expense risks with
respect to the Certificates We issue. We guarantee the dollar amount of each
Annuity Payment after the first Annuity Payment will not be affected by
variations in mortality or expense experience.
Administrative Charge
Each Valuation Period We deduct an Administrative Charge from the Variable
Account which is equal, on an annual basis, to the amount shown on the
Certificate Schedule. The Administrative Charge compensates Us for the costs
associated with administration of the Variable Account and the Certificates
We issue.
Distribution Charge
Each Valuation Period We deduct a Distribution Charge from the Variable
Account which is equal, on an annual basis, to the amount shown on the
Certificate Schedule. The Distribution Charge compensates Us for the costs
associated with the distribution of the Certificates We issue.
Certificate Maintenance Charge
We deduct a Certificate Maintenance Charge from the Certificate Value by
canceling Accumulation Units from each applicable Sub-account to reimburse
Us for expenses relating to the maintenance of the Certificate. We will
deduct the Certificate Maintenance Charge from the Sub-accounts of the
Variable Account in the same proportion that the amount of Certificate Value
in each Sub-account bears to the Certificate Value. The Certificate
Maintenance Charge is shown on the Certificate Schedule. The Certificate
Maintenance Charge will be deducted from the Certificate Value on each
Certificate Anniversary during the Accumulation Period.
If a total surrender is made on a date other than a Certificate Anniversary,
the Certificate Maintenance Charge will be deducted at the time of surrender.
During the Annuity Period, the Certificate Maintenance Charge will be
deducted on a pro-rata basis from each Annuity Payment.
Transfers
Transfers: Subject to any limitation We impose on the number of transfers
permitted in a Certificate Year, a Certificate Owner may transfer all or part
of Certificate Owner's Certificate Value among the Sub-accounts and the Fixed
Account, if any, by Written Request or by telephone without the imposition of
any fees or charges. Transfers among the Sub-accounts and the Fixed Account
are permitted only during the Accumulation Period. The number of permitted
transfers, and the charge for transfers in excess of that number, are shown
on the Certificate Schedule. All transfers are subject to the following:
(1) If more than the number of free transfers, shown on the
Certificate Schedule, are made in a Certificate Year, We will deduct a
transfer charge, shown on the Certificate Schedule, for each subsequent
transfer. The transfer fee will be deducted from the Sub-account from which
the transfer is made. However, if Certificate Owner transfers his or her
entire interest in a Sub-account, the transfer fee will be deducted from the
amount transferred. If a Certificate Owner makes a transfer from more than
one Sub-account, any transfer fee will be allocated pro-rata among such Sub-
accounts in proportion to the amount transferred from each. The deduction of
any fees We impose on such transfers will not exceed the maximum listed on
page 3.
(2) During the Annuity Period, transfers of values between Sub-
accounts will be made by converting the number of Annuity Units being
transferred to the number of Annuity Units in the Sub-account to which a
transfer is made, so that the next Annuity Payment, if it were made at that
time, would be the same amount that it would have been without the transfer.
Thereafter, Annuity Payments will reflect changes in the value of the new
Annuity Units.
(3) The minimum amount which can be transferred is shown on the
Certificate Schedule. The minimum amount which must remain in a Sub-account
after a transfer is shown on the Certificate Schedule.
(4) If 100% of the value of any Sub-account is transferred and the
current allocation for Purchase Payments includes that Sub-account, the
allocation for future Purchase Payments will change to reflect a Certificate
Owner's allocation of Certificate Value following the transfer.
(5) We reserve the right, at any time and without prior notice to any
party, to terminate, suspend or modify the transfer privileges described
above.
We will not be liable for transfers made in accordance with a Certificate
Owner's instructions. All amounts and Accumulation Units will be determined
as of the end of the Valuation Period in which We receive the request for
transfer.
Partial Withdrawals and Total Surrender
Partial Withdrawals
During the Accumulation Period while the Certificate is In Force, a
Certificate Owner may, upon Written Request, make a partial withdrawal,
subject to the provisions and limitations shown on the Certificate Schedule.
For purposes of determining whether a Surrender Charge is applicable to a
partial withdrawal:
(1) A partial withdrawal will first be taken from the portion of a
Certificate Owner's Certificate Value which is in excess of
Purchase Payments, and then from Purchase Payments; and
(2) We will allocate partial withdrawals to Purchase Payments in the
order in which the Purchase Payments were made, starting with the
first.
A withdrawal will result in the cancellation of Accumulation Units from each
applicable Sub-account in the ratio that a Certificate Owner's interest in
the Sub-account bears to his or her Certificate Value in all the Sub-
accounts. A Certificate Owner must specify by Written Request in advance if
he or she wants Accumulation Units to be canceled in a manner other than the
method described above. If there is no value or insufficient value in the
Variable Account, then the amount withdrawn, or the insufficient portion,
will be deducted from the Fixed Account. If a Certificate Owner has multiple
Guarantee Periods, We will deduct such amount from each Guarantee Period's
values in the ratio that each Period's values bears to the total Fixed
Account Value. A Certificate Owner must specify by Written Request in
advance if he or she wants multiple Guarantee Periods to be reduced in a
manner other than the method described above. Any amount deducted from the
fixed account value may be subject to a market value adjustment, if
applicable.
Each partial withdrawal must be for an amount not less than the amount shown
on the Certificate Schedule. The Certificate Value which must remain in a
Certificate is shown on the Certificate Schedule. The Certificate Schedule
also shows any charge.
Total Surrender
During the Accumulation Period while the Certificate is In Force, a
Certificate Owner may, upon Written Request, make a total surrender of the
Certificate Withdrawal Value. The Certificate Withdrawal Value is:
(1) the Certificate Value as of the end of the Valuation Period during
which We receive a Written Request for a withdrawal or surrender;
less
(2) any applicable taxes not previously deducted; less
(3) any Surrender Charge; less
(4) any Certificate Maintenance Charge.
The Fixed Account Value, which is a component of the Certificate Value, may
be subject to a market value adjustment, if applicable.
We will pay the amount of any withdrawal or surrender within seven days
unless the Suspension or Deferral of Payments Provision is in effect.
Death Provisions
Death of Certificate Owner
These provisions apply if, during the Accumulation Period while the
Certificate is In Force, the Certificate Owner or any Joint Certificate Owner
dies (whether or not the decedent is also the Annuitant) or the Annuitant
dies under a Certificate owned by a non-natural Person. The "designated
beneficiary" will control the Certificate after such a death. This
"designated beneficiary" will be the first Person among the following who is
alive on the date of death: Certificate Owner; Joint Certificate Owner;
primary Beneficiary; Contingent Beneficiary; and Certificate Owner's estate.
If the Certificate Owner and Joint Certificate Owner are both alive, they
shall be the "designated beneficiary" together.
If the decedent's surviving spouse (if any) is the sole "designated
beneficiary", the surviving spouse will automatically become the new sole
Certificate Owner as of the date of the death. And, if the Annuitant is the
decedent, the new Annuitant will be any living Contingent Annuitant,
otherwise the surviving spouse. The Certificate may stay in force until
another death occurs (i.e., until the death of the Certificate Owner or Joint
Certificate Owner). Except for this paragraph, all of "Death Provisions" will
apply to that subsequent death.
In all other cases, the Certificate may stay in force up to five years from
the date of death. During this period, the "designated beneficiary" may
exercise all ownership rights, including the right to make transfers or
partial withdrawals or the right to surrender the Certificate for its
Certificate Withdrawal Value. If this Certificate is still in force at the
end of the five-year period, We will automatically end it then by paying to
the "designated beneficiary" the Certificate Withdrawal Value without the
deduction of any applicable Surrender Charges. If the "designated
beneficiary" is not alive then, We will pay any Person(s) named by the
"designated beneficiary" in a Written Request; otherwise the "designated
beneficiary's" estate.
Death of Annuitant
These provisions apply if during the Accumulation Period while the
Certificate is In Force, (a) the Annuitant dies, (b) the Annuitant is not an
Owner, and (c) the Owner is a natural person. The Certificate will continue
In Force after the Annuitant's death. The new Annuitant will be any living
Contingent Annuitant, otherwise the Certificate Owner.
Payment of Benefits
Instead of receiving a lump sum, a Certificate Owner or any "designated
beneficiary" may by Written Request direct that We pay any benefit of $2,000
or more under an Annuity Option that meets the following: (a) the first
payment to the "designated beneficiary" must be made no later than one year
after the date of death; (b) payments must be made over the life of the
"designated beneficiary" or over a period not extending beyond that person's
life expectancy; and (c) any Annuity Option that provides for payments to
continue after the death of the "designated beneficiary" will not allow the
successor payee to extend the period of time over which the remaining
payments are to be made.
Annuity Provisions
General
If the Certificate is In Force on the Income Date, the Adjusted Certificate
Value will be applied under the Annuity Option selected by a Certificate
Owner. Annuity Payments may be made on a fixed or variable basis or both.
Income Date
The Income Date may be selected by a Certificate Owner. It is shown on the
Certificate Schedule. The Income Date can be any time after the Certificate
Date for variable payments and any time after the first Certificate
Anniversary for fixed payments. The Income Date may not be later than the
earlier of when the Annuitant reaches attained age 90 or that required under
state law. If no Income Date is selected, it will be the earlier of when the
Annuitant reaches attained age 90 or the maximum date permitted under state
law, if any.
Prior to the Income Date, a Certificate Owner may change the Income Date by
Written Request. Any change must be requested at least 30 days prior to the
new Income Date.
Selection of an Annuity Option
An Annuity Option may be selected by a Certificate Owner. If no Annuity
Option is selected, Option B will automatically be applied. Prior to the
Income Date, a Certificate Owner can change the Annuity Option selected by
Written Request. Any change must be requested at least 30 days prior to the
Income Date.
Frequency and Amount of Annuity Payments
Annuity Payments are paid in monthly installments unless quarterly, semi-
annual or annual payments are chosen. The Adjusted Certificate Value is
applied to the Annuity Table for the Annuity Option selected. If the
Adjusted Certificate Value to be applied under an Annuity Option is less than
$2,000, We reserve the right to make a lump sum payment in lieu of Annuity
Payments. If the Annuity Payment would be or becomes less than $100, We will
reduce the frequency of payments to a longer interval which will result in
each payment being at least $100.
Annuity Options
The following Annuity Options or any other Annuity Option acceptable to Us
may be selected:
OPTION A. ANNUITY FOR A FIXED NUMBER OF YEARS: Annuity Payments for a
chosen number of years, not less than 5. If the payee dies during the
payment period and the Beneficiary does not desire payments to continue for
the remainder of the period, he/she may elect to have the present value of
the remaining payments commuted and paid in a lump sum. During the payment
period of a Variable Annuity, the payee may elect by Written Request to
receive the following amount: (a) the present value of the remaining payments
commuted; less (b) any Surrender Charge that may be due by treating the value
defined in (a) as a surrender. Instead of receiving a lump sum, the payee
may elect another Annuity Option. The amount applied to that Option would
not be reduced by the charge defined in (b).
OPTION B. LIFE ANNUITY WITH PERIOD CERTAIN OF 10 YEARS: Annuity Payments
during the lifetime of the payee and in any event for 10 years certain. If
the payee dies during the guaranteed payment period and the Beneficiary does
not desire payments to continue for the remainder of the guaranteed period,
he/she may elect to have the present value of the guaranteed payments
remaining commuted and paid in a lump sum.
OPTION C. JOINT AND SURVIVOR ANNUITY: Annuity Payments payable during the
joint lifetime of the payee and a designated second natural person and then
during the lifetime of the survivor.
Unless the Annuity Option provides for commutation by the payee, a payee may
not withdraw or otherwise end an Annuity Option after it begins. Payments
will end upon the payee's death unless the Annuity Option provides for
payments continuing to a successor payee. No successor payee may extend the
period of time over which the remaining payments are to be made.
Annuity
If a Certificate Owner selects a Fixed Annuity, the Adjusted Certificate
Value is allocated to the General Account and the Annuity is paid as a Fixed
Annuity. If the Certificate Owner selects a Variable Annuity, the Adjusted
Certificate Value will be allocated to the Sub-accounts of the Separate
Account in accordance with the selection he or she makes, and the Annuity
will be paid as a Variable Annuity. A Certificate Owner can also select a
combination of a Fixed and Variable Annuity and the Adjusted Certificate
Value will be allocated accordingly. If a Certificate Owner does not select
between a Fixed Annuity and a Variable Annuity, any Adjusted Certificate
Value in the Variable Account will be applied to a Variable Annuity and any
Adjusted Certificate Value in the Fixed Account will be applied to a Fixed
Annuity.
The Adjusted Certificate Value will be applied to the applicable Annuity
Table contained in the Certificate based upon the Annuity Option a
Certificate Owner selects. If, as of the Income Date, the current Annuity
Option rates applicable to the class of Certificates issued under the Group
Contract provide an initial Annuity Payment greater than the initial Annuity
Payment guaranteed under the applicable Annuity Table in the Certificate, the
greater payment will be made.
Fixed Annuity
The minimum dollar amount of each Fixed Annuity Payment for each $1,000 of
Adjusted Certificate Value is shown in the Annuity Tables. After the initial
Fixed Annuity payment, the payments will not change regardless of investment,
mortality or expense experience.
Variable Annuity
Variable Annuity Payments reflect the investment performance of the Variable
Account in accordance with the allocation of the Adjusted Certificate Value
to the Sub-accounts during the Annuity Period. Variable Annuity payments are
not guaranteed as to dollar amount.
The dollar amount of the first Variable Annuity payment for each $1,000 of
Adjusted Certificate Value is shown in the Annuity Tables. The dollar amount
of Variable Annuity payments for each applicable Sub-account after the first
Variable Annuity Payment 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 applicable Sub-account as
of the Income Date. This sets the number of Annuity Units for each
monthly payment for the applicable Sub-account. The number of
Annuity Units for each applicable Sub-account remains fixed during
the Annuity Period;
(2) the fixed number of Annuity Units per payment in each Sub-account is
multiplied by the Annuity Unit Value for that Sub-account for the
Valuation Period for which the payment is due. This result is the
dollar amount of the payment for each applicable Sub-account.
The total dollar amount of each Variable Annuity payment is the sum of all
Sub-account Variable Annuity payments reduced by the applicable portion of
the Certificate Maintenance Charge.
Annuity Unit
The value of any Annuity Unit for each Sub-Account of the Separate Account
was initially set at $10.
The Sub-account Annuity Unit Value at the end of any subsequent Valuation
Period is determined as follows:
(1) the net investment factor calculated as set forth on pages 11-12
(but without the Distribution Charge, if any) for the current
Valuation Period is multiplied by the value of the Annuity Unit for
the Sub-account 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 Valuation Period equivalent of the
Assumed Investment Rate for the number of days in the current
Valuation Period. The Assumed Investment Rate is equal to 6% per
year.
The value of an Annuity Unit may increase or decrease from Valuation Period
to Valuation Period.
Using the Tables
Tables 2, 3, 5, and 6 are age-dependent. The amount of the first annuity
payment will be based on an age a specified number of years younger than the
person's then-attained age (i.e., age last birthday). This age setback is as
follows:
Date of First Payment Age Setback
1996-1999 1 year
2000-2009 2 years
2010-2019 4 years
2020-2029 5 years
2030 or later 6 years
We will calculate the amount for a payment frequency other than monthly and
for any ages not shown in Tables 2, 3, 5, and 6 in accordance with the next
section. Upon request, We will tell a Certificate Owner any such amount.
Basis of Calculation
Tables 1 and 4 are based on interest at 5% and 3%, respectively. Tables 2,
3, 5, and 6 are based on the 1983 Individual Annuity Valuation Tables (sex
distinct), with interest at 5% (Tables 2 and 3) and 3% (Tables 5 and 6),
projected dynamically with Projection Scale G.
TABLE 1: FIRST MONTHLY PAYMENT PAYABLE UNDER VARIABLE OPTION 1 FOR EACH
$1,000 APPLIED
Years Payment Years Payment Years Payment Years Payment
5 $18.74 12 $9.16 19 $6.71 25 $5.76
6 15.99 13 8.64 20 6.51 26 5.65
7 14.02 14 8.20 21 6.33 27 5.54
8 12.56 15 7.82 22 6.17 28 5.45
9 11.42 16 7.49 23 6.02 29 5.36
10 10.51 17 7.20 24 5.88 30 5.28
11 9.77 18 6.94
TABLE 2: FIRST MONTHLY PAYMENT PAYABLE UNDER VARIABLE OPTION 2 FOR EACH
$1,000 APPLIED
Age Male Female Age Male Female Age Male Female Age Male Female
30 $4.45 $4.34 47 $5.05 $4.78 64 $6.54 $5.98 80 $9.14 $8.67
31 4.47 4.35 48 5.11 4.82 65 6.68 6.10 81 9.29 8.86
32 4.50 4.37 49 5.17 4.87 66 6.82 6.22 82 9.44 9.05
33 4.52 4.39 50 5.23 4.92 67 6.97 6.35 83 9.57 9.23
34 4.55 4.41 51 5.29 4.97 68 7.12 6.49 84 9.69 9.40
35 4.57 4.43 52 5.36 5.02 69 7.28 6.63 85 9.81 9.55
36 4.60 4.45 53 5.43 5.08 70 7.44 6.79 86 9.91 9.69
37 4.63 4.47 54 5.50 5.13 71 7.61 6.95 87 10.01 9.82
38 4.67 4.49 55 5.58 5.20 72 7.78 7.12 88 10.10 9.94
39 4.70 4.52 56 5.67 5.27 73 7.95 7.30 89 10.17 10.04
40 4.74 4.55 57 5.76 5.34 74 8.12 7.48 90 10.24 10.13
41 4.78 4.57 58 5.85 5.41 75 8.30 7.67 91 10.30 10.21
42 4.82 4.60 59 5.95 5.49 76 8.47 7.87 92 10.35 10.27
43 4.86 4.64 60 6.06 5.58 77 8.65 8.07 93 10.39 10.33
44 4.91 4.67 61 6.17 5.67 78 8.82 8.27 94 10.43 10.37
45 4.95 4.70 62 6.29 5.77 79 8.98 8.47 96 10.45 10.41
46 5.00 4.74 63 6.41 5.87
TABLE 3: FIRST MONTHLY PAYMENT PAYABLE UNDER VARIABLE OPTION 3 FOR EACH
$1,000 APPLIED
COMBINATION OF AGES
FEMALE AGE
30 35 40 45 50 55 60 65 70 75 80 85 90 95
30$4.24$4.28$4.31$4.34$4.36$4.38$4.40$4.42$4.43$4.44$4.45 $4.45 $4.45 $4.46
35 4.26 4.30 4.35 4.39 4.43 4.47 4.50 4.52 4.54 4.56 4.57 4.57 4.58 4.58
40 4.28 4.33 4.39 4.45 4.51 4.56 4.61 4.65 4.68 4.71 4.73 4.74 4.75 4.75
M 45 4.29 4.35 4.42 4.50 4.58 4.66 4.74 4.80 4.86 4.90 4.93 4.96 4.97 4.98
A 50 4.30 4.37 4.46 4.55 4.66 4.77 4.88 4.98 5.07 5.14 5.20 5.23 5.25 5.27
L 55 4.31 4.39 4.48 4.59 4.73 4.87 5.03 5.18 5.32 5.44 5.53 5.59 5.63 5.65
E 60 4.32 4.40 4.50 4.63 4.78 4.97 5.18 5.40 5.61 5.80 5.96 6.07 6.13 6.17
65 4.33 4.41 4.52 4.65 4.83 5.05 5.31 5.61 5.92 6.23 6.50 6.70 6.83 6.90
A 70 4.33 4.42 4.53 4.68 4.87 5.11 5.42 5.80 6.23 6.70 7.14 7.50 7.75 7.90
G 75 4.34 4.42 4.54 4.69 4.89 5.16 5.50 5.95 6.50 7.15 7.83 8.45 8.92 9.23
E 80 4.34 4.43 4.54 4.70 4.91 5.19 5.56 6.06 6.71 7.55 8.52 9.50 10.34 10.93
85 4.34 4.43 4.55 4.71 4.92 5.21 5.60 6.13 6.86 7.85 9.10 10.52 11.87 12.93
90 4.34 4.43 4.55 4.71 4.93 5.22 5.62 6.18 6.96 8.06 9.55 11.39 13.34 15.05
95 4.34 4.43 4.55 4.71 4.93 5.23 5.64 6.21 7.02 8.20 9.86 12.09 14.69 17.20
TABLE 4: MINIMUM MONTHLY PAYMENT PAYABLE UNDER FIXED OPTION A FOR EACH $1,000
APPLIED
Years Payment Years Payment Years Payment Years Payment
5 $17.91 12 $8.24 19 $5.73 25 $4.71
6 15.14 13 7.71 20 5.51 26 4.59
7 13.16 14 7.26 21 5.32 27 4.47
8 11.68 15 6.87 22 5.15 28 4.37
9 10.53 16 6.53 23 4.99 29 4.27
10 9.61 17 6.23 24 4.84 30 4.18
11 8.86 18 5.96
TABLE 5: MINIMUM MONTHLY PAYMENT PAYABLE UNDER FIXED OPTION B FOR EACH $1,000
APPLIED
Age Male Female Age Male Female Age Male Female Age Male Female
30 $3.12 $2.99 47 $3.82 $3.53 64 $5.40 $4.83 80 $8.15 $7.66
31 3.15 3.01 48 3.88 3.58 65 5.55 4.96 81 8.32 7.86
32 3.18 3.03 49 3.94 3.63 66 5.69 5.08 82 8.47 8.06
33 3.21 3.06 50 4.01 3.68 67 5.85 5.22 83 8.61 8.25
34 3.24 3.08 51 4.08 3.74 68 6.01 5.37 84 8.75 8.43
35 3.27 3.11 52 4.15 3.80 69 6.18 5.52 85 8.87 8.60
36 3.31 3.13 53 4.23 3.86 70 6.35 5.68 86 8.98 8.75
37 3.34 3.16 54 4.31 3.93 71 6.52 5.85 87 9.08 8.88
38 3.38 3.19 55 4.39 4.00 72 6.70 6.03 88 9.18 9.01
39 3.42 3.22 56 4.48 4.07 73 6.89 6.21 89 9.26 9.12
40 3.46 3.25 57 4.58 4.15 74 7.07 6.41 90 9.33 9.21
41 3.51 3.29 58 4.68 4.23 75 7.26 6.61 91 9.40 9.30
42 3.55 3.32 59 4.78 4.32 76 7.44 6.81 92 9.45 9.37
43 3.60 3.36 60 4.89 4.41 77 7.63 7.02 93 9.49 9.43
44 3.65 3.40 61 5.01 4.50 78 7.81 7.23 94 9.53 9.47
45 3.71 3.44 62 5.14 4.61 79 7.98 7.45 95 9.55 9.51
46 3.76 3.49 63 5.27 4.72
TABLE 6: MINIMUM MONTHLY PAYMENT PAYABLE UNDER FIXED OPTION C FOR EACH $1,000
APPLIED
COMBINATION OF AGES
FEMALE AGE
30 35 40 45 50 55 60 65 70 75 80 85 90 95
30$2.88$2.93$2.97$3.01$3.04$3.07$3.08$3.10$3.11$3.12$3.12 $3.12 $3.13 $3.13
35 2.91 2.97 3.03 3.09 3.14 3.18 3.21 3.23 3.25 3.26 3.27 3.27 3.28 3.28
40 2.93 3.01 3.09 3.17 3.24 3.30 3.35 3.39 3.42 3.44 3.46 3.46 3.47 3.47
45 2.95 3.04 3.14 3.24 3.34 3.43 3.51 3.58 3.63 3.66 3.69 3.71 3.72 3.72
M 50 2.96 3.06 3.17 3.30 3.43 3.56 3.68 3.79 3.87 3.94 3.98 4.01 4.03 4.03
A 55 2.97 3.07 3.20 3.34 3.50 3.68 3.85 4.02 4.16 4.27 4.34 4.39 4.42 4.44
L 60 2.98 3.09 3.22 3.38 3.56 3.78 4.01 4.25 4.47 4.66 4.80 4.89 4.95 4.98
E 65 2.98 3.09 3.23 3.40 3.61 3.86 4.15 4.48 4.81 5.12 5.37 5.55 5.66 5.72
70 2.99 3.10 3.24 3.42 3.64 3.92 4.26 4.67 5.13 5.60 6.04 6.38 6.60 6.73
A 75 2.99 3.10 3.25 3.43 3.66 3.96 4.34 4.81 5.39 6.06 6.75 7.35 7.79 8.07
G 80 2.99 3.11 3.25 3.44 3.68 3.99 4.39 4.92 5.60 6.45 7.44 8.42 9.23 9.79
E 85 2.99 3.11 3.26 3.44 3.69 4.00 4.42 4.98 5.73 6.74 8.01 9.44 10.77 11.81
90 2.99 3.11 3.26 3.45 3.69 4.01 4.44 5.02 5.82 6.93 8.43 10.29 12.25 13.95
95 2.99 3.11 3.26 3.45 3.70 4.02 4.45 5.04 5.87 7.05 8.73 10.97 13.58 16.11
<PAGE>
Endorsements
To be inserted only by Us
<PAGE>
POLICY DESCRIPTION
This is a GROUP VARIABLE ANNUITY CONTRACT with limited purchase payment
flexibility. This Contract is non participating with no dividends.
EXHIBIT 4(b)
KEYPORT BENEFIT LIFE INSURANCE COMPANY
Read this Certificate carefully. This document is a description of the
legal contract between the Group Contract Owner and Us.
You may return this Certificate within 10 days after You receive it by
delivering or mailing it to Our Office. The return of this Certificate by
mail will be effective when the postmark is affixed to a properly addressed
and postage prepaid envelope. We will refund any purchase payments allocated
to the Fixed Account and the Certificate Value plus any amount deducted from
Your purchase payment before it was allocated to the Variable Account,
including the Certificate Maintenance charge. The Certificate Value will be
determined as of the date of surrender (i.e., for a mailed contract, the
postmark date).
This Certificate describes the benefits and provisions of the Group
Contract. The Group Contract, as issued to the Group Contract Owner by Us
with any riders or endorsements, alone makes up the agreement under which
benefits are paid. The Group Contract may be inspected at the office of the
Group Contract Owner. In consideration of any application for this
Certificate and the payment of purchase payments, We agree, subject to the
terms and conditions of the Group Contract, to provide the benefits described
in this Certificate to the Certificate Owner.
If this Certificate is In Force on the Income Date, We will begin making
income payments to the Annuitant. We will make such payments according to
the terms of the Certificate and Group Contract.
Signed for the Company on the Issue Date at Our Home Office, 175 Berkeley
Street, Boston, Massachusetts 02117:
_______________________________ _________________________________
Secretary President
POLICY DESCRIPTION
This is a GROUP VARIABLE ANNUITY CERTIFICATE with limited purchase payment
flexibility. This contract is nonparticipating with no dividends.
Annuity payments and other values provided by this certificate when based
on the investment experience of a separate account, may increase or decrease
and are not guaranteed as to dollar amount. Variable annuity payments will
not decrease over time if the separate account (before deduction of the
annual [1.40%] asset charge) has an annualized investment return of at least
[6.4%.] See pages 12-13 and 19 for further explanation. Certificate assets
allocated to the separate account incur charges of [1.55%] before annuity
payments begin and [1.40%] once annuity payments begin. Income, capital
gains, and/or losses whether or not realized, from assets allocated to the
separate account are credited to or charged against the separate account
without regard to income, capital gains, and/or losses arising out of any
other business the company may conduct.
<PAGE>
KEYPORT BENEFIT LIFE INSURANCE COMPANY
125 High Street, Boston, MA 02110
Service Office
125 High Street, 11th Floor
Boston, MA 02110
Certificate Schedule
GROUP CONTRACT OWNER Liberty Insurance Trust
GROUP CONTRACT NUMBER [678999]
CERTIFICATE NUMBER [123455]
CERTIFICATE OWNER [John Q. Public]
JOINT CERTIFICATE OWNER [Jane Q. Public]
CERTIFICATE OWNER DOB [January 1, 1940]
JOINT CERTIFICATE OWNER DOB [February 29, 1940]
ANNUITANT [Thomas Doe]
ANNUITANT DOB [November 22, 1960]
[COVERED PERSON[(S)]] [John Q. Public, [, Jane Q.
Public][,Thomas Doe]]
CERTIFICATE DATE [November 1, 1995]
INCOME DATE [November 1, 2010]
INITIAL PURCHASE PAYMENT [$10,000]
MINIMUM INITIAL PAYMENT [$5,000]
MINIMUM ADDITIONAL PAYMENT [$1,000]
Charges
Distribution Charge [We deduct [0.000411%] of the assets in each Variable
Account Sub-Account on a daily basis (equivalent to an annual rate of
[0.15%]) to compensate Us for a portion of Our distribution costs.][None]
Administrative Charge [We deduct [0.000411%] of the assets in each Variable
Account Sub-account on a daily basis (equivalent to an annual rate of
[0.15%]) to compensate Us for a portion of Our administrative expenses.]
[None]
Mortality and Expense Risk Charge [We deduct [0.003403%] of the assets in
each Variable Account Sub-account on a daily basis (equivalent to an annual
rate of [1.25%]) for Our mortality and expense risks.] [None]
Certificate Maintenance Charge [We charge [$36] to cover a portion of Our
ongoing Certificate maintenance expenses. The charge is incurred at the
beginning of the Certificate Year and is deducted from the assets in the
Variable Account on each Certificate Anniversary and at the time of total
surrender. We reserve the right to charge up to $100 per year. This charge
will not apply after annuitization.] [None]
Transfer Charge [Currently none, however, We reserve the right to charge
[$25] for a transfer if You make more than [12] transfers per Certificate
Year.] [None]
Market Value Adjustment [None]
<PAGE>
Surrender Charge [At the time of each partial withdrawal or at total
surrender a contingent deferred sales charge is imposed as a percentage of
each Purchase Payment during the [seven] years after the date of its payment,
as follows:
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
7% 6% 5% 4% 3% 2% 1%
Thereafter 0%].[None]
[In any total surrender, a surrender charge will only be imposed on the
balance of any purchase payments remaining after the maximum partial
withdrawal amount for a year is determined.]
Initial Purchase Payment Allocation
Currently, Certificate Owners can select [7] Sub-accounts [and the Fixed
Account]. We reserve the right to increase or decrease the number of
available Sub-accounts. The minimum You may allocate to any Sub-account [or
the Fixed Account] is [10%] of any Purchase Payment. Your initial Purchase
Payment has been invested as follows:
[Manning & Napier Moderate Growth x%
Manning & Napier Growth x%
Manning & Napier Maximum Horizon x%
Manning & Napier Equity x%
Manning & Napier Small Cap x%
Manning & Napier Bond x%
SteinRoe Cash Income Fund x%
Interest Rate at Issue
Fixed Account - 1 Year x% ____%
[3 Year x% ____%]
[5 Year x% ____%]
[7 Year x% ____%]
Transfer Guidelines
Number of Transfers and Transfer Charge: [Currently, Certificate Owners are
permitted [12] transfers per Certificate Year during the Accumulation Period
and [1] transfer every [6] months during the Annuity Period. We reserve the
right to change, upon notice, the frequency of transfers You can make. We
also reserve the right to impose a charge for any transfer in excess of [12]
per Certificate Year. The transfer charge is shown in the Charges section of
the Schedule.]
Minimum amount to be transferred: [None]
Minimum amount which must remain in a Sub-account after transfer: [None]
[Limitations on transfers from Fixed Account: Transfers during a Certificate
Year from the Fixed Account to the Variable Account are limited to [25%] of
the Fixed Account Value at the beginning of the Certificate Year. This
limitation will be waived if a systematic program of monthly transfers has
been established.]
<PAGE>
Partial Withdrawals
You may make partial withdrawals during the Accumulation Period without
incurring a surrender charge, as follows:
(1) In any Certificate Year You may withdraw an aggregate amount not
to exceed, at the time of withdrawal:
(a) the Certificate Value, less
(b) the portion of Your Purchase Payments not previously
withdrawn[; and
(2) In any Certificate Year after the first, You may also withdraw
the positive difference, if any, between the amount withdrawn
pursuant to (1) above in any such subsequent year and [10%] of
Your Certificate Value as of the preceding Certificate
Anniversary.]
We will collect the Surrender Charge shown on the Schedule with respect to
partial withdrawals in excess of the amounts described in (1) [and (2)
above].
Minimum withdrawal amount: [$300], [unless the withdrawal is made pursuant to
Our Systematic Withdrawal Program described below, in which case the minimum
withdrawal is [$100].]
Minimum Certificate Value which must remain after a partial withdrawal:
[$2,500]
Death Benefits
Adjustment of Certificate Value
When We receive due proof of death of the [first to die of the Covered
Person(s) identified on the Certificate Schedule hereinafter "Covered
Person"] [Certificate Owner], [any Joint Certificate Owner,] or the
Annuitant if the Certificate Owner is a non-natural Person, We will compare,
as of the date of death, the Certificate Value to the Death Benefit amount
defined in this Schedule. If the Certificate Value is less than the Death
Benefit, We will increase the current Certificate Value by the amount of the
difference. If the Certificate Value is greater than the Death Benefit, the
Certificate Value will be the Death Benefit. Any amount credited will be
allocated to the Variable Account [and/or the Fixed Account] based on the
Purchase Payment allocation selection that is in effect when We receive due
proof of death.
Waiver of Surrender Charges
If the Certificate is surrendered within 90 days of the date of death of the
[Covered Person(s)], [Certificate Owner], [any Joint Certificate Owner,] or
the Annuitant if the Certificate Owner is a non-natural Person, any
applicable surrender charges will not be deducted from the Certificate
Withdrawal Value.
Death Benefit Amount
[Purchase Payment Death Benefit
On the Certificate Date the Death Benefit is the initial Purchase Payment.
On subsequent Valuation Dates, the Death Benefit is calculated as follows:
(1) Start with the Death Benefit from the prior Valuation Date;
(2) Add to (1) any additional Purchase Payments paid during the
current Valuation Period and subtract from (1) any partial
withdrawals (including any associated surrender charge incurred)
made during the current Valuation Period.]
<PAGE>
[Certificate Anniversary Death Benefit
On the Certificate Date, the Death Benefit is the initial Purchase Payment.
On subsequent Valuation Dates, the Death Benefit is calculated as follows:
(1) (a) Start with the Death Benefit from the Certificate Date;
(b) Add to (a) any additional Purchase Payments paid since
the Certificate Date and subtract from (a) any partial
withdrawals (including any associated surrender charge
incurred) made since the Certificate Date;
(2) (a) Determine the Certificate Value for each Certificate
Anniversary (the "Anniversary Value") before the [81st]
birthday of the [Certificate Owner] [Covered Person] or,
if the Certificate Owner is a non-natural Person, the
Annuitant;
(b) Increase each "Anniversary Value" by any Purchase
Payments made after that Value's Anniversary;
(c) Decrease each "Anniversary Value" by the following
amount calculated at the time of each partial withdrawal
made after that Value's Anniversary: (i) the partial
withdrawal amount (including any associated surrender
charge incurred) divided by the Certificate Value
immediately preceding the withdrawal, (ii) multiplied by
the "Anniversary Value" immediately preceding the
withdrawal;
(d) Select the highest "Anniversary Value" after the
adjustments in (b) and (c) above;
(3) Set the Death Benefit equal to the greater of (1) and (2).]
[If there is a change of [Certificate Owner,] [Covered Person] the new
[Certificate Owner's] [Covered Person's] age will be used to determine the
amount in (2) above.]
[If there is a change of [Certificate Owner,] [Covered Person] and the new
[Certificate Owner's] [Covered Person] age is less than or equal to 75, the
Death Benefit described above will remain in effect. If the new Certificate
Owner's age is greater than 75, the Death Benefit in effect will not apply;
the Death Benefit will be the greater of the Certificate Value or the sum of
the Purchase Payments less any partial withdrawals (including any associated
surrender charge incurred) made since the Certificate Date.]
The Variable Separate Account[s]
Sub-accounts investing in shares of mutual funds
[Variable Account [J] is a unit investment trust variable separate account,
organized in and
governed by the laws of the State of Massachusetts, Our state of domicile.
Variable Account [J] is divided into Sub-accounts. Each Sub-account listed
below invests in shares of the corresponding Portfolio of the Eligible Fund
shown.
Sub-account Eligible Fund and Portfolio
[Manning & Napier Insurance Fund, Inc.
Moderate Growth Manning & Napier Moderate Growth Portfolio
Sub-account seeks with equal emphasis long-term growth
and preservation of capital.
<PAGE>
Growth Sub-account Manning & Napier Growth Portfolio -
seeks long-term growth of capital. The
secondary objective is the preservation of
capital.
Maximum Horizon Manning & Napier Maximum Horizon Portfolio -
Sub-account seeks to achieve the high level of long-term
capital growth typically associated with the
stock market.
Equity Sub-account Manning & Napier Equity Portfolio- seeks
long-term growth of capital.
Small Cap Sub- Manning & Napier Small Cap Portfolio - seeks
account to achieve long term growth of capital by
investing principally in the equity
securities of small issuers.
Bond Sub-account Manning & Napier Bond Portfolio - seeks to
maximize total return in the form of both
income and capital appreciation by investing
in fixed income securities without regard to
maturity.
The Alger American Fund
Alger Growth Alger American Growth Portfolio - seeks
Sub-account long-term capital appreciation.
Alger Small Cap Alger American Small Capitalization
Sub-account Portfolio - seeks long-term capital
appreciation.
Alliance Variable Products Series Fund, Inc.
Alliance Global Bond Global Bond Portfolio - seeks a high level
Sub-account of return from a combination of current
income and capital appreciation by investing
in a globally diversified portfolio of high
quality debt securities denominated in the
U.S. Dollar and a range of foreign
currencies.
Alliance Premier Growth Premier Growth Portfolio - seeks growth of
Sub-account capital rather than current income.
Keyport Variable Investment Trust
Colonial Growth & Income Colonial-Keyport Growth and Income
Sub-account Fund - seeks primarily income and long-
term capital growth and, secondarily,
preservation of capital.
<PAGE>
Colonial Strategic Income Colonial-Keyport Strategic Income Fund -
Sub-account seeks a high level of current income, as is
consistent with prudent risk and maximizing
total return, by diversifying investments
primarily in U.S. and foreign government and
high yield, high risk corporate debt
securities.
Colonial Int'l Fund for Colonial-Keyport International Fund for
Growth Sub-account Growth seeks long-term capital growth, by
investing primarily in non-U.S. equity
securities.
Colonial U.S. Fund for Colonial-Keyport U.S. Fund for Growth -
Growth Sub-account seeks growth exceeding over time the S&P
500 Index (Standard & Poor's Corporation
Composite Price Index) performance.
Colonial Utilities Colonial-Keyport Utilities Fund - seeks
Sub-account primarily current income and, secondarily,
long-term capital growth.
Newport Tiger Newport-Keyport Tiger Fund - seeks long-
Sub-account term capital growth by investing primarily
in equity securities of companies located in
the four Tigers of Asia (Hong Kong,
Singapore, South Korea and Taiwan) and the
other mini-Tigers of East Asia (Malaysia,
Thailand, Indonesia, China and the
Philippines).
MFS Variable Insurance Trust
MFS Emerging Growth MFS Emerging Growth Series - seeks to
Sub-account provide long-term growth of capital.
MFS Research MFS Research Series - seeks to provide long-
Sub-account term growth of capital and future income.
SteinRoe Variable Investment Trust
SteinRoe Cap Appreciation Capital Appreciation Fund - seeks capital
Sub-account growth by investing primarily in common
stocks, convertible securities, and other
securities selected for prospective capital
growth.
SteinRoe Cash Income Cash Income Fund - seeks high current income
Sub-account from short-term money market instruments
("Money Market" Sub-account) while emphasizing preservation of capital
and maintaining excellent liquidity.
<PAGE>
SteinRoe Managed Assets Managed Assets Fund - seeks high total
Sub-account investment return through investment in a
changing mix of securities.
SteinRoe Managed Growth Managed Growth Stock Fund - seeks long-term
Stock Sub-account growth of capital through investment
primarily in common stocks.
SteinRoe Mortgage Securities Mortgage Securities Income Fund - seeks
Income Sub-account highest possible level of current income
consistent with safety of principal and
maintenance of liquidity through investment
primarily in mortgage-backed securities.
Sub-accounts investing directly in securities - None.
[Variable Account [M] is an investment company variable separate account
which invests directly in securities, organized in and governed by the laws
of the State of Massachusetts, Our state of domicile. Variable Account [M]
is divided into Sub-accounts. The investment advisor to each Sub-account is
set forth opposite each Sub-account shown below:
Sub-account Investment Advisor
[Currently, none] [Currently, none] ]
The Fixed Account
[The Fixed Account is part of Our General Account, which consists of all of
Our assets except the assets of the Variable Account and the assets of other
separate accounts that We maintain. Subject to applicable law, We have sole
discretion over investments of the assets of the Fixed Account. If You
allocate assets to the Fixed Account, Your accumulation values and annuity
payments will have guaranteed minimums.
Before the Income Date, Your interest in the Fixed Account is measured by the
Fixed Account Value. When annuity payments begin, the payee's interest in
the Fixed Account is measured by the amount of each periodic payment.
Benefits from the Fixed Account will not be less than the minimum values
required by any law of the jurisdiction where the Certificate is delivered.
Purchase Payments will be allocated to the Fixed Account in accordance with
Your selection at the Certificate Date. You may change such selection by
Written Request.
The Fixed Account Value at any time is equal to:
(1) all Purchase Payments allocated to the Fixed Account plus the
interest subsequently credited on those payments; plus
(2) any Variable Account value transferred to the Fixed Account plus the
interest subsequently credited on the transferred value; less
<PAGE>
(3) any prior partial withdrawals from the Fixed Account; less
(4) any Fixed Account Value transferred to the Variable Account.
We will credit interest to Purchase Payments allocated to the Fixed Account
at rates declared by Us for Guarantee Periods of one [or more] year[s] from
the month and day of allocation. The minimum Guaranteed Interest Rate is
[3%] per year.]
[Certificate Owner Services
The Programs. [Keyport offers [the following] investment related program[s]
which [is] are available only prior to the Income Date: [Dollar Cost
Averaging;] [Capital Protection Plus]; [and] [Systematic Withdrawal
Programs]. [A Rebalancing Program is available prior to and after the Income
Date.] Under [each] [this] Program, the related transfers between and among
Sub-Accounts and the Fixed Account are not counted as one of the [twelve]
free transfers. Each Program[s] has its own requirements, as discussed
below. Keyport reserves the right to terminate any Program.]
[Dollar Cost Averaging Program. The program periodically transfers
Accumulation Units from the SteinRoe Cash Income Sub-Account or the One-Year
Guarantee Period of the Fixed Account to other Sub-Accounts selected by the
Certificate Owner. The program allows a Certificate Owner to invest in
Variable Sub-Accounts over time rather than having to invest in those Sub-
Accounts all at once. The program is available for initial and subsequent
Purchase Payments and for Certificate Value transferred into the SteinRoe
Cash Income Sub-Account or the One-Year Guarantee Period. Under the program,
Keyport makes automatic transfers on a periodic basis out of the SteinRoe
Cash Income Sub-Account or the One-Year Guarantee Period into one or more of
the other available Sub-Accounts (Keyport reserves the right to limit the
number of Sub-Accounts the Certificate Owner may choose but there are
currently no limits). The program will automatically end if the Income Date
occurs. Keyport reserves the right to end the program at any time by sending
the Certificate Owner a notice one month in advance.]
[Rebalancing Program. In accordance with the Certificate Owner's election
of the relative Purchase Payment percentage allocations, Keyport will
automatically rebalance the Certificate Value of each Sub-Account either
monthly, quarterly, semi-annually, or annually. On the last day of the
period selected, Keyport will automatically rebalance the Certificate Value
in each of the Sub-Accounts to match the current Purchase Payment percentage
allocations. The Program may be terminated at any time and the percentages
may be altered by Written Request. Certificate Value allocated to the Fixed
Account is not subject to automatic rebalancing. After the Income Date,
automatic rebalancing applies only to variable annuity payments and Keyport
will rebalance the number of Annuity Units in each Sub-Account.]
[Systematic Withdrawal Program. Keyport will make monthly, quarterly, semi-
annually or annual distributions of a predetermined dollar amount to the
Certificate Owner that has enrolled in the Systematic Withdrawal Program. The
Certificate Owner may specify the amount of each partial withdrawal, subject
to a minimum of $100. Systematic withdrawals may only be made from the Sub-
Accounts and the One Year Guarantee Period of the Fixed Account. In each
Certificate Year, portions of Certificate Value may be withdrawn without the
imposition of any Contingent Deferred Sales Charge ("Free Withdrawal
Amount"). If withdrawals pursuant to the Program are greater than the Free
Withdrawal Amount, the amount of the withdrawals greater than the Free
Withdrawal Amount will be subject to the applicable Contingent Deferred Sales
Charge. Any unrelated voluntary partial withdrawal a Certificate Owner makes
during a Certificate Year will be aggregated with
<PAGE>
withdrawals pursuant to the Program to determine the applicability of any
Contingent Deferred Sales Charge under the Certificate provisions regarding
partial withdrawals.]
[Capital Protection Plus Under this program, Keyport will allocate part of
the Purchase Payment to the Guarantee Period selected by the Certificate
Owner so that such part, based on that Guarantee Period's interest rate in
effect on the date of allocation, will equal at the end of the Guarantee
Period the total Purchase Payment. The rest of the Purchase Payment will be
allocated to the Sub-Account(s) of the Variable Account based on the
Certificate Owner's allocation. If any part of the Fixed Account Value is
surrendered or transferred before the end of the Guarantee Period, the Value
at the end of that Period will not equal the original Purchase Payment
amount.]
<PAGE>
Table of Contents
Page
Right to Examine Certificate 1
Certificate Schedule 2
Definitions 3
General Provisions 5
Variable Account Provisions 10
Transfers 13
Partial Withdrawals and Total Surrender 14
Death Provisions 15
Annuity Provisions 16
Endorsements (if any) are before page 22
Definitions
Accumulation Period: The period prior to the Income Date during which
Purchase Payments may be made by a Certificate Owner.
Accumulation Unit: An accounting unit used to calculate a Certificate Owner's
interest in a Sub-account of the Variable Account during the Accumulation
Period.
Adjusted Certificate Value: The Certificate Value less any applicable taxes
relating to a Certificate and Certificate Maintenance Charge. This amount is
applied to the applicable Annuity Tables to determine Annuity Payments.
Annuitant: The natural person on whose life Annuity Payments are based, and
to whom any Annuity Payments will be made starting on the Income Date.
Annuity Options: Options available for Annuity Payments.
Annuity Payments: The series of payments made to the Annuitant, starting on
the Income Date, under the Annuity Option selected.
Annuity Period: The period after the Income Date during which Annuity
Payments are made.
Annuity Unit: An accounting unit used to calculate Variable Annuity Payments
during the Annuity Period.
Beneficiary: The person(s) or entity(ies) who controls the Certificate if
any Certificate Owner dies before the Income Date.
<PAGE>
Definitions (continued)
Certificate: The document issued to a Certificate Owner to evidence a
Certificate Owner's participation under the Group Contract. The Certificate
summarizes the benefits and provisions of the Group Contract.
Certificate Anniversary: An anniversary of the Certificate Date.
Certificate Date: The date a Certificate is issued to a Certificate Owner.
The Certificate Date is shown on the Certificate Schedule.
Certificate Owner: The person who owns a Certificate under the Group
Contract. Any Joint Certificate Owners and the Certificate Owner own the
Certificate equally with rights of survivorship.
Certificate Value: The sum of the Certificate Owner's interest in the Sub-
accounts of the Variable Account and the Fixed Account during the
Accumulation Period.
Certificate Year: The first Certificate Year is the annual period which
begins on the Certificate Date. Subsequent Certificate Years begin on each
Certificate Anniversary.
Eligible Fund: An investment entity shown on the Certificate Schedule.
Fixed Account: The account We establish to support Fixed Allocations. The
Certificate Schedule shows whether the Fixed Account is available under the
Certificate.
Fixed Account Value: The value of all Fixed Account amounts accumulated
under this Certificate prior to the Income Date.
Fixed Allocation: An amount allocated to the Fixed Account that is credited
with a Guaranteed Interest Rate for a specified Guarantee Period.
Fixed Annuity: An annuity with a series of payments made during the Annuity
Period which are guaranteed as to dollar amount by Us.
General Account: Our general investment account which contains all of Our
assets except those in the Variable Account and Our other separate accounts.
Group Contract Owner: The person or entity to which the Group Contract is
issued.
Guaranteed Interest Rate: The effective annual interest rate which We will
credit for a specified Guarantee Period.
Guarantee Period: The period of year(s) a rate of interest is guaranteed to
be credited within the Fixed Account.
Income Date: The date on which Annuity Payments begin. The Income Date is
shown on the Certificate Schedule.
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In Force: The status of a Certificate before the Income Date so long as it
has not been totally surrendered and there has not been a death of a
Certificate Owner or Joint Certificate Owner that will cause the Certificate
to end within five years of the date of death.
Office: Our service office shown on the Certificate Schedule.
Person: A human being, trust, corporation, or any other legally recognized
entity.
Portfolio: A series of an Eligible Fund which constitutes a separate and
distinct class of shares.
Purchase Payment: A payment made by or on behalf of a Certificate Owner with
respect to a Certificate.
Sub-account: Variable Account assets are divided into Sub-accounts. Assets
of each Sub-account will be invested in shares of a Portfolio of an Eligible
Fund, or directly in portfolio securities.
Valuation Date: Each day on which We and the New York Stock Exchange
("NYSE") are open for business, or any other day that the Securities and
Exchange Commission requires that mutual funds, unit investment trusts or
other investment portfolios be valued.
Valuation Period: The period of time beginning at the close of business of
the NYSE on each Valuation Date and ending at the close of business on the
next succeeding Valuation Date.
Variable Account: Our Variable Account(s) shown on the Certificate Schedule.
Variable Annuity: An annuity with payments which vary as to dollar amount in
relation to the investment performance of specified Sub-accounts of the
Variable Account.
We, Us, Our: Keyport Benefit Life Insurance Company of Boston.
Written Request: A request in writing, in a form satisfactory to Us, and
received by Us at Our Office.
You, Your: The Certificate Owner and any Joint Certificate Owners.
General Provisions
Purchase Payments
The initial Purchase Payment is due on the Certificate Date. It must be paid
at Our Office in United States currency. Coverage under a Certificate does
not take effect until We have accepted the initial Purchase Payment during
Your lifetime. Each Purchase Payment after the Certificate Date must be at
least the amount shown on the Certificate Schedule. Provided the Certificate
Value under a Certificate does not go to zero, a Certificate will stay in
force until the Income Date even if You make no payments after the initial
one. We reserve the right to reject any subsequent Purchase Payment.
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Allocation of Purchase Payments
Your initial Purchase Payment is allocated to the Sub-accounts of the
Variable Account, and to the Fixed Account if available, in accordance with
the selections made by You at the Certificate Date. Unless otherwise changed
by You, subsequent Purchase Payments are allocated in the same manner as the
initial Purchase Payment. Allocation of Purchase Payments is subject to the
terms and conditions imposed by Us. We reserve the right to allocate initial
Purchase Payments to the Money Market Sub-account until the expiration of the
Right to Examine Certificate period set forth on the first page of the
Certificate.
The Contract
The Group Contract, including the application, if any, and any attached rider
or endorsement constitute the entire contract between the Group Contract
Owner and Us. All statements made by the Group Contract Owner, any
Certificate Owner or any Annuitant will be deemed representations and not
warranties. No such statement will be used in any contest unless it is
contained in the application signed by the Group Contract Owner or in a
written instrument signed by the Certificate Owner, a copy of which has been
furnished to the Certificate Owner, the Beneficiary or to the Group Contract
Owner.
Only Our President or Secretary may agree to change any of the terms of the
Group Contract. Any changes must be in writing. Any change to the terms of
a Certificate must be in writing and with Your consent, unless provided
otherwise by the Group Contract and the Certificate.
To assure that the Group Contract and the Certificate will maintain their
status as a variable annuity under the Internal Revenue Code, We reserve the
right to change the Group Contract and any Certificate issued thereunder to
comply with future changes in the Internal Revenue Code, any regulations or
rulings issued thereunder, and any requirements otherwise imposed by the
Internal Revenue Service. The Group Contract Owner and the affected
Certificate Owner will be sent a copy of any such amendment.
We reserve the right, subject to the approval of the New York Superintendent
of Insurance and compliance with U.S. laws as currently applicable or
subsequently changed, to: (a) operate the Variable Account in any form
permitted under the Investment Company Act of 1940, as amended, (the "1940
Act"), or in any other form permitted by law; (b) take any action necessary
to comply with or obtain and continue any exemptions from the 1940 Act, or to
comply with any other applicable law; (c) transfer any assets in any Sub-
account to another Sub-account, or to one or more separate investment
accounts, or the General Account; or to add, combine or remove Sub-accounts
in the Variable Account; and (d) change the way We assess charges, so long as
We do not increase the aggregate amount beyond that currently charged to the
Variable Account and the Eligible Funds in connection with this Certificate.
If the shares of any of the Eligible Funds should become unavailable for
investment by the Variable Account or if in Our judgment further investment
in such Portfolio shares should become inappropriate in view of the purpose
of the Certificate, We may add or substitute shares of another mutual fund
for the Portfolio shares already purchased under the Certificate. No
substitution of Portfolio shares in any Sub-account may take place without
prior approval of the Securities and Exchange Commission and notice to the
affected Certificate Owners, to the extent required by the 1940 Act.
Certificate Owner
You are the Certificate Owner of this Certificate. You have all rights and
may receive all benefits under a Certificate. A Certificate Owner is the
person designated as such on the Certificate Date, unless changed. You may
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exercise all rights of this Certificate while it is In Force, subject to the
rights of (a) any assignee under an assignment filed with Us, and (b) any
irrevocably named Beneficiary.
Joint Certificate Owner
A Certificate can be owned by Joint Certificate Owners. Upon the death of
any Certificate Owner or Joint Certificate Owner, the surviving owner(s) will
be the primary Beneficiary(ies). Any other beneficiary designation will be
treated as a Contingent Beneficiary unless otherwise indicated in a Written
Request filed with Us.
Annuitant
The Annuitant is the person on whose life Annuity Payments are based. The
Annuitant is the person designated by You at the Certificate Date, unless
changed prior to the Income Date. Any change of Annuitant is subject to Our
underwriting rules then in effect. The Annuitant may not be changed in a
Certificate which is owned by a non-natural person. You may name a
Contingent Annuitant. The Contingent Annuitant becomes the Annuitant if the
Annuitant dies while this Certificate is In Force. If the Annuitant dies
and no Contingent Annuitant has been named, We will allow You sixty days to
designate someone other than Yourself as Annuitant. You will be the
Contingent Annuitant unless You name someone else. If the Certificate is
owned by a non-natural person, the death of the Annuitant will be treated as
the death of the Certificate Owner and a new Annuitant may not be designated.
Beneficiary
The Beneficiary is the person who controls the Certificate if any Certificate
Owner dies prior to the Income Date. If the Certificate is owned by Joint
Certificate Owners, upon the death of any Certificate Owner or Joint
Certificate Owner, the surviving owner(s) will become the primary
Beneficiary. Any other beneficiary designation will be treated as a
Contingent Beneficiary unless otherwise indicated in a Written Request filed
with Us. If You name more than one Person as Primary Beneficiary or as
Contingent Beneficiary, and do not state otherwise on an application or in a
Written Request to Us, any non-survivors will not receive a benefit. The
survivors will receive equal shares. Subject to the rights of any
irrevocable Beneficiary(ies), You may change primary or contingent
Beneficiary(ies). A change must be made by Written Request and will be
effective as of the date the Written Request is signed. We will not be
liable for any payment We make or action We take before We receive the
Written Request.
Group Contract Owner
The Group Contract Owner has title to the Group Contract. The Group Contract
and any amount accumulated under any Certificate are not subject to the
claims of the Group Contract Owner or any of its creditors. The Group
Contract Owner may transfer ownership of this Group Contract. Any transfer
of ownership terminates the interest of any existing Group Contract Owner.
It does not change the rights of any Certificate Owner. Nothing in the Group
Contract shall invalidate or impair any right granted to the Certificate
Owner by the Certificate or New York law.
Change of Certificate Owner, Beneficiary or Contingent Annuitant
While this Certificate is In Force, You may by Written Request change the
primary Certificate Owner, Joint Certificate Owner, primary Beneficiary,
Contingent Beneficiary, Contingent Annuitant, or in certain instances, the
Annuitant. An irrevocably named Person may be changed only with the written
consent of such Person. The change will be effective, following Our receipt
of the Written Request, as of the date the Written Request is signed. The
change will not affect any payments We make or actions We take
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prior to the time We receive the Written Request.
Assignment of the Certificate
You may assign this Certificate at any time while it is In Force. The
assignment must be in writing and a copy must be filed at Our Office. Your
rights and those of any revocably named Person will be subject to the
assignment. An assignment will not affect any payments We make or actions We
take before We receive the assignment. We are not responsible for the
validity of any assignment.
Misstatement of Age or Sex
If the age or sex of the Annuitant or any payee has been misstated, We will
compute the amount payable based on the correct age and sex. If Annuity
Payments have begun, any underpayment(s) that have been made plus interest
thereon at a rate of 5% per year will be paid in full with the next Annuity
Payment. Any overpayment plus interest thereon at a rate of 5% per year,
unless repaid to Us in one sum, will be deducted from future Annuity Payments
otherwise due until We are repaid in full.
Non-Participating
This Certificate does not participate in Our divisible surplus.
Evidence of Death, Age, Sex or Survival
If a Certificate provision relates to the death of a natural Person, We will
require proof of death before We will act under that provision. Proof of
death shall be: (a) a certified death certificate; or (b) a certified decree
of a court of competent jurisdiction as to the finding of death; or (c) a
written statement by a medical doctor who attended the deceased; or (d) any
other document constituting due proof of death under applicable state law.
If Our action under a Certificate provision is based on the age, sex, or
survival of any Person, We may require evidence of the particular fact before
We act under that provision.
Protection of Proceeds
No Beneficiary or payee may commute or assign any payments under a
Certificate before they are due. To the extent permitted by law, no payments
shall be subject to the debts of any Beneficiary or payee or to any judicial
process for payment of those debts.
Reports
We will send Certificate Owners a report that shows the Certificate Value,
the Certificate Withdrawal Value and the Death Benefit at least once each
Certificate Year. We will send any other reports that may be required by
law.
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Taxes
Any taxes paid to any governmental entity relating to a Certificate will be
deducted from the Purchase Payments or Certificate Value. We may, in Our
sole discretion, delay the deduction until a later date. By not deducting
tax payments at the time of Our payment, We do not waive any right We may
have to deduct amounts at a later date. We will, in Our sole discretion,
determine when taxes relate to a Certificate or to the operation of the
Variable Account. We reserve the right to establish a provision for federal
income taxes if We determine, in Our sole discretion, that We will incur a
tax as a result of the operation of the Variable Account. Such a provision
will be reflected in the Accumulation and Annuity Unit Values. We will
deduct for any income taxes incurred by Us as a result of the operation of
the Variable Account whether or not there was a provision for taxes and
whether or not it was sufficient. We will deduct from any payment under this
Certificate any withholding taxes required by applicable law.
Regulatory Requirements
All values payable under a Certificate will not be less than the minimum
benefits required by the laws and regulations of the state in which the
Certificate is delivered.
Suspension or Deferral of Payments
We reserve the right to suspend or postpone payments for a withdrawal,
transfer or surrender for any period when:
(1) the New York Stock Exchange is closed (other than customary
weekend and holiday closings); or
(2) trading on the New York Stock Exchange is restricted; or
(3) an emergency exists as a result of which valuation or disposal
of the assets and securities of the Variable Account is not
reasonably practicable; or
(4) the Securities and Exchange Commission, by order or
pronouncement, so permits for the protection of Certificate
Owners;
provided that applicable rules and regulations of the Securities and Exchange
Commission govern as to whether the conditions described in (2) and (3) above
exist.
We reserve the right to delay payment of amounts allocated to the Fixed
Account for up to six months.
Variable Account Provisions
The Variable Account
The Variable Account(s) is designated on the Certificate Schedule and
consists of assets set aside by Us, which are kept separate from Our general
assets and all other variable account assets We maintain. We own the assets
of the Variable Account. Variable Account assets equal to reserves and other
contract liabilities will not be chargeable with liabilities arising out of
any other business We may conduct. Income and realized and unrealized gains
or losses from assets in the Variable Account are credited to or charged
against the account without regard to other income, gains or losses in Our
other investment accounts.
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The Variable Account assets are divided into Sub-accounts. The Sub-accounts
which are available under the Certificate are shown on the Certificate
Schedule. The assets of the Sub-accounts of the unit investment trust
variable separate account are allocated to the Eligible Fund(s) and the
Portfolio(s), if applicable, within an Eligible Fund shown on the Certificate
Schedule. The assets of the Sub-accounts of the investment company variable
separate account, if applicable, are invested in portfolios of securities
designed to meet the objectives of the Sub-Account shown on the Certificate
Schedule. We may, from time to time, add additional Sub-accounts, Eligible
Funds or Portfolios to those shown on the Certificate Schedule. You may be
permitted to transfer Certificate Values or allocate Purchase Payments to the
additional Sub-Accounts, Eligible Funds or Portfolios. However, the right to
make such transfers or allocations will be limited by the terms and
conditions imposed by Us.
We also have the right to eliminate Sub-accounts from the Variable Account,
to combine two or more Sub-accounts or to substitute a new Portfolio for the
Portfolio in which a Sub-account invests. A substitution may become
necessary if, in Our discretion, a Portfolio or Sub-account no longer suits
the purposes of the Group Contract. This may happen: due to a change in
laws or regulations or a change in a Portfolio's investment objectives or
restrictions; because the Portfolio or Sub-account is no longer available for
investment; or for some other reason. We will obtain any prior approvals
that may be required from the insurance department of Our state of domicile,
the New York Superintendent of Insurance and from the SEC or any other
governmental entity before making such a substitution.
When permitted by law, We reserve the right to:
(1) Deregister a Variable Account under the 1940 Act;
(2) Operate a Variable Account as a management company under the
1940 Act, if it is operating as a unit investment trust;
(3) Operate a Variable Account as a unit investment trust under the
1940 Act, if it is operating as a management company;
(4) Restrict or eliminate any voting rights as to the account;
(5) Combine the Variable Account with any other variable account.
Valuation of Assets
The assets of the Variable Account are valued at their fair market value in
accordance with Our procedures.
Accumulation Units
Your Variable Account value will fluctuate in accordance with the investment
results of the Sub-accounts to which You have allocated Your Purchase
Payments or Certificate Value. In order to determine how these fluctuations
affect Your Certificate Value, We use an Accumulation Unit value.
Accumulation Units are used to account for all amounts allocated to or
withdrawn from the Sub-accounts of the Variable Account as a result of
Purchase Payments, partial withdrawals, transfers, or charges deducted from
the Certificate Value. We determine the number of Accumulation Units of a
Sub-account purchased or canceled by dividing the amount allocated to, or
withdrawn from, the Sub-account by the dollar value of one Accumulation Unit
of the Sub-account as of the end of the Valuation Period during which We
receive the request for the transaction.
Accumulation Unit Value
The Accumulation Unit Value for each Sub-account was initially set at $10.
Subsequent Accumulation Unit Values for each Sub-account are determined by
multiplying the Accumulation Unit Value for the immediately preceding
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Valuation Period by a net investment factor for the Sub-account for the
current period. This factor may be greater or less than 1.0; therefore, the
Accumulation Unit Value may increase or decrease from Valuation Period to
Valuation Period.
We calculate the net investment factor for each Sub-account investing in
shares of mutual funds by dividing (a) by (b) and then subtracting (c) where:
(a) is equal to:
(i) the net asset value per share of the Portfolio in which the
Sub-account invests at the end of the Valuation Period; plus
(ii) any dividend per share declared for the Portfolio that has
an ex-dividend date within the current Valuation Period.
(b) is the net asset value per share of the Portfolio at the end of
the preceding Valuation Period.
(c) is equal to:
(i) the sum of each Valuation Period equivalent of the annual
rate for the Mortality and Expense Risk Charge, for the
Administrative Charge, and for the Distribution Charge, if
any, which are shown on the Certificate Schedule; plus
(ii) a charge factor, if any, for any tax provision established
by Us a result of the operation of the Sub-account.
We calculate the net investment factor for each Sub-account investing
directly in securities with the same formula, except:
(a) is equal to:
(i) the value of the assets in the Sub-account at the end of the
preceding Valuation Period; plus
(ii) any investment income and capital gains, realized or
unrealized, credited to the assets during the current
Valuation Period; less
(iii) any capital losses, realized or unrealized, charged against
the assets during the current Valuation Period; less
(iv) all operating and investment expenses relating to the
assets that are incurred during the current Valuation
Period.
(b) is the value of the assets in the Sub-account at the end of the
preceding Valuation Period.
Mortality and Expense Risk Charge
Each Valuation Period We deduct a Mortality and Expense Risk Charge from each
Sub-account of the Variable Account which is equal, on an annual basis, to
the amount shown on the Certificate Schedule. The Mortality and Expense Risk
Charge compensates Us for assuming the mortality and expense risks with
respect to the Certificates We issue. We guarantee the dollar amount of each
Annuity Payment after the first Annuity Payment will not be affected by
variations in mortality or expense experience.
<PAGE>
Administrative Charge
Each Valuation Period We deduct an Administrative Charge from the Variable
Account which is equal, on an annual basis, to the amount shown on the
Certificate Schedule. The Administrative Charge compensates Us for the costs
associated with administration of the Variable Account and the Certificates
We issue.
Distribution Charge
Each Valuation Period We deduct a Distribution Charge from the Variable
Account which is equal, on an annual basis, to the amount shown on the
Certificate Schedule. The Distribution Charge compensates Us for the costs
associated with the distribution of the Certificates We issue.
Certificate Maintenance Charge
We deduct a Certificate Maintenance Charge from the Certificate Value by
canceling Accumulation Units from each applicable Sub-account to reimburse
Us for expenses relating to the maintenance of the Certificate. We will
deduct the Certificate Maintenance Charge from the Sub-accounts of the
Variable Account in the same proportion that the amount of Certificate Value
in each Sub-account bears to the Certificate Value. The Certificate
Maintenance Charge is shown on the Certificate Schedule. The Certificate
Maintenance Charge will be deducted from the Certificate Value on each
Certificate Anniversary during the Accumulation Period.
If a total surrender is made on a date other than a Certificate Anniversary,
the Certificate Maintenance Charge will be deducted at the time of surrender.
Transfers
Subject to any limitation We impose on the number of transfers permitted in a
Certificate Year, You may transfer all or part of Your Certificate Value
among the Sub-accounts and the Fixed Account, if any, by Written Request or
by telephone without the imposition of any fees or charges. Transfers among
the Sub-accounts and the Fixed Account are permitted only during the
Accumulation Period. The number of permitted transfers, and the charge for
transfers in excess of that number, are shown on the Certificate Schedule.
All transfers are subject to the following:
(1) If more than the number of free transfers, shown on the
Certificate Schedule, are made in a Certificate Year, We will deduct a
transfer charge, shown on the Certificate Schedule, for each subsequent
transfer. The transfer fee will be deducted from the Sub-account from which
the transfer is made. However, if You transfer Your entire interest in a Sub-
account, the transfer fee will be deducted from the amount transferred. If
You make a transfer from more than one Sub-account, any transfer fee will be
allocated pro-rata among such Sub-accounts in proportion to the amount
transferred from each. The deduction of any fees We impose on such transfers
will not exceed the maximum listed on page 3.
(2) During the Annuity Period, transfers of values between Sub-
accounts will be made by converting the number of Annuity Units being
transferred to the number of Annuity Units in the Sub-account to which a
transfer is made, so that the next Annuity Payment, if it were made at that
time, would be the same amount that it would have been without the transfer.
Thereafter, Annuity Payments will reflect changes in the value of the new
Annuity Units.
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(3) The minimum amount which can be transferred is shown on the
Certificate Schedule. The minimum amount which must remain in a Sub-account
after a transfer is shown on the Certificate Schedule.
(4) If 100% of the value of any Sub-account is transferred and the
current allocation for Purchase Payments includes that Sub-account, the
allocation for future Purchase Payments will change to reflect Your
allocation of Certificate Value following the transfer.
(5) We reserve the right, at any time and without prior notice to any
party, to terminate, suspend or modify the transfer privileges described
above.
We will not be liable for transfers made in accordance with Your
instructions. All amounts and Accumulation Units will be determined as of
the end of the Valuation Period in which We receive the request for
transfer.
Partial Withdrawals and Total Surrender
Partial Withdrawals
During the Accumulation Period while the Certificate is In Force, You may,
upon Written Request, make a partial withdrawal, subject to the provisions
and limitations shown on the Certificate Schedule. For purposes of
determining whether a surrender charge is applicable to Your partial
withdrawal:
(1) Your partial withdrawal will first be taken from the portion of
Your Certificate Value which is in excess of Your Purchase
Payments, and then from Your Purchase Payments; and
(2) We will allocate partial withdrawals to Purchase Payments in the
order in which the Purchase Payments were made, starting with
the first.
A withdrawal will result in the cancellation of Accumulation Units from each
applicable Sub-account in the ratio that Your interest in the Sub-account
bears to Your Certificate Value in all the Sub-accounts. You must specify by
Written Request in advance if You want Accumulation Units to be canceled in a
manner other than the method described above. If there is no value or
insufficient value in the Variable Account, then the amount withdrawn, or the
insufficient portion, will be deducted from the Fixed Account. If You have
multiple Guarantee Periods, We will deduct such amount from each Guarantee
Period's values in the ratio that each Period's values bears to the total
Fixed Account Value. You must specify by Written Request in advance if You
want multiple Guarantee Periods to be reduced in a manner other than the
method described above. [Any amount deducted from the Fixed Account Value may
be subject to a market value adjustment, if applicable.]
Each partial withdrawal must be for an amount not less than the amount shown
on the Certificate Schedule. The Certificate Value which must remain in a
Certificate is shown on the Certificate Schedule. The Certificate Schedule
also shows any charge.
Total Surrender
During the Accumulation Period while the Certificate is In Force, You may,
upon Written Request, make a total surrender of the Certificate Withdrawal
Value. The Certificate Withdrawal Value is:
(1) the Certificate Value as of the end of the Valuation Period
during which We receive a Written Request for a withdrawal or
surrender; less
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(2) any applicable taxes not previously deducted; less
(3) any Surrender Charge; less
(4) any Certificate Maintenance Charge.
[The Fixed Account Value, which is a component of the Certificate Value, may
be subject to a market value adjustment, if applicable.]
We will pay the amount of any withdrawal or surrender within seven days
unless the Suspension or Deferral of Payments Provision is in effect.
Death Provisions
Death of Certificate Owner
These provisions apply if, during the Accumulation Period while the
Certificate is In Force, the Certificate Owner or any Joint Certificate Owner
dies (whether or not the decedent is also the Annuitant) or the Annuitant
dies under a Certificate owned by a non-natural Person. The "designated
beneficiary" will control the Certificate after such a death. This
"designated beneficiary" will be the first Person among the following who is
alive on the date of death: Certificate Owner; Joint Certificate Owner;
primary Beneficiary; Contingent Beneficiary; and Certificate Owner's estate.
If the Certificate Owner and Joint Certificate Owner are both alive, they
shall be the "designated beneficiary" together.
If the decedent's surviving spouse (if any) is the sole "designated
beneficiary", the surviving spouse will automatically become the new sole
Certificate Owner as of the date of the death. And, if the Annuitant is the
decedent, the new Annuitant will be any living Contingent Annuitant,
otherwise the surviving spouse. The Certificate may stay in force until
another death occurs (i.e., until the death of the Certificate Owner or Joint
Certificate Owner). Except for this paragraph, all of "Death Provisions" will
apply to that subsequent death.
In all other cases, the Certificate may stay in force up to five years from
the date of death. During this period, the "designated beneficiary" may
exercise all ownership rights, including the right to make transfers or
partial withdrawals or the right to surrender the Certificate for its
Certificate Withdrawal Value. If this Certificate is still in force at the
end of the five-year period, We will automatically end it then by paying to
the "designated beneficiary" the Certificate Withdrawal Value without the
deduction of any applicable surrender charges. If the "designated
beneficiary" is not alive then, We will pay any Person(s) named by the
"designated beneficiary" in a Written Request; otherwise the "designated
beneficiary's" estate.
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Death of Annuitant
These provisions apply if during the Accumulation Period while the
Certificate is In Force, (a) the Annuitant dies, (b) the Annuitant is not an
Owner, and (c) the Owner is a natural person. The Certificate will continue
In Force after the Annuitant's death. The new Annuitant will be any living
Contingent Annuitant, otherwise the Certificate Owner.
Payment of Benefits
Instead of receiving a lump sum, You or any "designated beneficiary" may by
Written Request direct that We pay any benefit of $2,000 or more under an
Annuity Option that meets the following: (a) the first payment to the
"designated beneficiary" must be made no later than one year after the date
of death; (b) payments must be made over the life of the "designated
beneficiary" or over a period not extending beyond that person's life
expectancy; and (c) any Annuity Option that provides for payments to continue
after the death of the "designated beneficiary" will not allow the successor
payee to extend the period of time over which the remaining payments are to
be made.
Annuity Provisions
General
If the Certificate is In Force on the Income Date, the Adjusted Certificate
Value will be applied under the Annuity Option selected by You. Annuity
Payments may be made on a fixed or variable basis or both.
Income Date
The Income Date may be selected by You. It is shown on the Certificate
Schedule. The Income Date can be any time after the Certificate Date for
variable payments and any time after the first Certificate Anniversary for
fixed payments. The Income Date may not be later than the earlier of when
the Annuitant reaches attained age 90 or that required under state law. If
no Income Date is selected, it will be the earlier of when the Annuitant
reaches attained age 90 or the maximum date permitted under state law, if
any.
Prior to the Income Date, You may change the Income Date by Written Request.
Any change must be requested at least 30 days prior to the new Income Date.
Selection of an Annuity Option
An Annuity Option may be selected by You. If no Annuity Option is selected,
Option B will automatically be applied. Prior to the Income Date, You may
change the Annuity Option selected by Written Request. Any change must be
requested at least 30 days prior to the Income Date.
Frequency and Amount of Annuity Payments
Annuity Payments are paid in monthly installments unless quarterly, semi-
annual or annual payments are chosen. The Adjusted Certificate Value is
applied to the Annuity Table for the Annuity Option selected. If the
Adjusted Certificate Value to be applied under an Annuity Option is less than
$2,000, We reserve the right to make a lump sum payment in lieu of Annuity
Payments. If the Annuity Payment would be or becomes less than $100, We will
reduce the frequency of payments to a longer interval which will result in
each payment being at least $100.
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Annuity Options
The following Annuity Options or any other Annuity Option acceptable to Us
may be selected:
OPTION A. ANNUITY FOR A FIXED NUMBER OF YEARS: Annuity Payments for a
chosen number of years, not less than 5. If the payee dies during the
payment period and the Beneficiary does not desire payments to continue
for the remainder of the period, he/she may elect to have the present
value of the remaining payments commuted and paid in a lump sum.
During the payment period of a Variable Annuity, the payee may elect by
Written Request to receive the following amount: (a) the present value
of the remaining payments commuted using a 3% interest rate for fixed
payments and a 5% interest rate for variable payments; less (b) any
surrender charge that may be due by treating the value defined in (a)
as a surrender. Instead of receiving a lump sum, the payee may elect
another Annuity Option. The amount applied to that Option would not be
reduced by the charge defined in (b).
OPTION B. LIFE ANNUITY WITH PERIOD CERTAIN OF 10 YEARS: Annuity
Payments during the lifetime of the payee and in any event for 10 years
certain. If the payee dies during the guaranteed payment period and
the Beneficiary does not desire payments to continue for the remainder
of the guaranteed period, he/she may elect to have the present value of
the guaranteed payments remaining commuted using a 3% interest rate for
fixed payments and a 5% interest rate for variable payments and paid in
a lump sum.
OPTION C. JOINT AND SURVIVOR ANNUITY: Annuity Payments payable during
the joint lifetime of the payee and a designated second natural person
and then during the lifetime of the survivor.
Unless the Annuity Option provides for commutation by the payee, a payee may
not withdraw or otherwise end an Annuity Option after it begins. Payments
will end upon the payee's death unless the Annuity Option provides for
payments continuing to a successor payee. No successor payee may extend the
period of time over which the remaining payments are to be made.
Annuity
If You select a Fixed Annuity, the Adjusted Certificate Value is allocated to
the General Account and the Annuity is paid as a Fixed Annuity. If You
select a Variable Annuity, the Adjusted Certificate Value will be allocated
to the Sub-accounts of the Separate Account in accordance with the selection
You make, and the Annuity will be paid as a Variable Annuity. You can also
select a combination of a Fixed and Variable Annuity and the Adjusted
Certificate Value will be allocated accordingly. If You don't select between
a Fixed Annuity and a Variable Annuity, any Adjusted Certificate Value in the
Variable Account will be applied to a Variable Annuity and any Adjusted
Certificate Value in the Fixed Account will be applied to a Fixed Annuity.
The Adjusted Certificate Value will be applied to the applicable Annuity
Table contained in the Certificate based upon the Annuity Option You select.
If, as of the Income Date, the current Annuity Option rates or the rates for
a single premium consideration for any immediate annuity applicable to the
class of Certificates issued under the Group Contract provide an initial
Annuity Payment greater than the initial Annuity Payment guaranteed under the
applicable Annuity Table in the Certificate, the greater payment will be
made.
<PAGE>
Fixed Annuity
The minimum dollar amount of each Fixed Annuity Payment for each $1,000 of
Adjusted Certificate Value is shown in the Annuity Tables. After the initial
Fixed Annuity payment, the payments will not change regardless of investment,
mortality or expense experience.
Variable Annuity
Variable Annuity Payments reflect the investment performance of the Variable
Account in accordance with the allocation of the Adjusted Certificate Value
to the Sub-accounts during the Annuity Period. Variable Annuity payments are
not guaranteed as to dollar amount.
The dollar amount of the first Variable Annuity payment for each $1,000 of
Adjusted Certificate Value is shown in the Annuity Tables. The dollar amount
of Variable Annuity payments for each applicable Sub-account after the first
Variable Annuity Payment 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 applicable Sub-
account as of the Income Date. This sets the number of Annuity
Units for each monthly payment for the applicable Sub-account.
The number of Annuity Units for each applicable Sub-account
remains fixed during the Annuity Period;
(2) the fixed number of Annuity Units per payment in each Sub-
account is multiplied by the Annuity Unit Value for that Sub-
account for the Valuation Period for which the payment is due.
This result is the dollar amount of the payment for each
applicable Sub-account.
The total dollar amount of each Variable Annuity payment is the sum of all
Sub-account Variable Annuity payments.
Annuity Unit
The value of any Annuity Unit for each Sub-Account of the Separate Account
was initially set at $10.
The Sub-account Annuity Unit Value at the end of any subsequent Valuation
Period is determined as follows:
(1) the net investment factor calculated as set forth on pages 11-12
(but without the Distribution Charge, if any) for the current
Valuation Period is multiplied by the value of the Annuity Unit
for the Sub-account 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 Valuation Period equivalent of
the Assumed Investment Rate for the number of days in the
current Valuation Period. The Assumed Investment Rate is equal
to 5% per year.
The value of an Annuity Unit may increase or decrease from Valuation Period
to Valuation Period.
<PAGE>
Using the Tables
Tables 2, 3, 5, and 6 are age-dependent. The amount of the first annuity
payment will be based on an age a specified number of years younger than the
person's then-attained age (i.e., age last birthday). This age setback is as
follows:
Date of First Payment Age Setback
1996-1999 1 year
2000-2009 2 years
2010-2019 4 years
2020-2029 5 years
2030 or later 6 years
We will calculate the amount for a payment frequency other than monthly and
for any ages not shown in Tables 2, 3, 5, and 6 in accordance with the next
section. Upon request, We will tell You any such amount.
Basis of Calculation
Tables 1 and 4 are based on interest at 5% and 3%, respectively. Tables 2,
3, 5, and 6 are based on the 1983 Individual Annuity Valuation Tables (sex
distinct) with interest at 5% (Tables 2 and 3) and 3% (Tables 5 and 6),
projected dynamically with Projection Scale G.
TABLE 1: FIRST MONTHLY PAYMENT PAYABLE UNDER VARIABLE OPTION A FOR EACH
$1,000 APPLIED
Years Payment Years Payment Years Payment Years Payment
5 $18.74 12 $9.16 19 $6.71 25 $5.76
6 15.99 13 8.64 20 6.51 26 5.65
7 14.02 14 8.20 21 6.33 27 5.54
8 12.56 15 7.82 22 6.17 28 5.45
9 11.42 16 7.49 23 6.02 29 5.36
10 10.51 17 7.20 24 5.88 30 5.28
11 9.77 18 6.94
<PAGE>
TABLE 2: FIRST MONTHLY PAYMENT PAYABLE UNDER VARIABLE OPTION B FOR EACH
$1,000 APPLIED
Age Male Female Age Male Female Age Male Female Age Male Female
30 $4.45 $4.34 47 $5.05 $4.78 64 $6.54 $5.98 80 $9.14 $8.67
31 4.47 4.35 48 5.11 4.82 65 6.68 6.10 81 9.29 8.86
32 4.50 4.37 49 5.17 4.87 66 6.82 6.22 82 9.44 9.05
33 4.52 4.39 50 5.23 4.92 67 6.97 6.35 83 9.57 9.23
34 4.55 4.41 51 5.29 4.97 68 7.12 6.49 84 9.69 9.40
35 4.57 4.43 52 5.36 5.02 69 7.28 6.63 85 9.81 9.55
36 4.60 4.45 53 5.43 5.08 70 7.44 6.79 86 9.91 9.69
37 4.63 4.47 54 5.50 5.13 71 7.61 6.95 87 10.01 9.82
38 4.67 4.49 55 5.58 5.20 72 7.78 7.12 88 10.10 9.94
39 4.70 4.52 56 5.67 5.27 73 7.95 7.30 89 10.17 10.04
40 4.74 4.55 57 5.76 5.34 74 8.12 7.48 90 10.24 10.13
41 4.78 4.57 58 5.85 5.41 75 8.30 7.67 91 10.30 10.21
42 4.82 4.60 59 5.95 5.49 76 8.47 7.87 92 10.35 10.27
43 4.86 4.64 60 6.06 5.58 77 8.65 8.07 93 10.39 10.33
44 4.91 4.67 61 6.17 5.67 78 8.82 8.27 94 10.43 10.37
45 4.95 4.70 62 6.29 5.77 79 8.98 8.47 96 10.45 10.41
46 5.00 4.74 63 6.41 5.87
TABLE 3: FIRST MONTHLY PAYMENT PAYABLE UNDER VARIABLE OPTION C FOR EACH
$1,000 APPLIED
COMBINATION OF AGES
FEMALE AGE
30 35 40 45 50 55 60 65 70 75 80 85 90 95
30$4.24$4.28$4.31$4.34$4.36$4.38$4.40$4.42$4.43$4.44$4.45$4.45 $4.45 $4.46
35 4.26 4.30 4.35 4.39 4.43 4.47 4.50 4.52 4.54 4.56 4.57 4.57 4.58 4.58
40 4.28 4.33 4.39 4.45 4.51 4.56 4.61 4.65 4.68 4.71 4.73 4.74 4.75 4.75
M45 4.29 4.35 4.42 4.50 4.58 4.66 4.74 4.80 4.86 4.90 4.93 4.96 4.97 4.98
A50 4.30 4.37 4.46 4.55 4.66 4.77 4.88 4.98 5.07 5.14 5.20 5.23 5.25 5.27
L55 4.31 4.39 4.48 4.59 4.73 4.87 5.03 5.18 5.32 5.44 5.53 5.59 5.63 5.65
E60 4.32 4.40 4.50 4.63 4.78 4.97 5.18 5.40 5.61 5.80 5.96 6.07 6.13 6.17
65 4.33 4.41 4.52 4.65 4.83 5.05 5.31 5.61 5.92 6.23 6.50 6.70 6.83 6.90
A70 4.33 4.42 4.53 4.68 4.87 5.11 5.42 5.80 6.23 6.70 7.14 7.50 7.75 7.90
G75 4.34 4.42 4.54 4.69 4.89 5.16 5.50 5.95 6.50 7.15 7.83 8.45 8.92 9.23
E80 4.34 4.43 4.54 4.70 4.91 5.19 5.56 6.06 6.71 7.55 8.52 9.50 10.34 10.93
85 4.34 4.43 4.55 4.71 4.92 5.21 5.60 6.13 6.86 7.85 9.1010.52 11.87 12.93
90 4.34 4.43 4.55 4.71 4.93 5.22 5.62 6.18 6.96 8.06 9.5511.39 13.34 15.05
95 4.34 4.43 4.55 4.71 4.93 5.23 5.64 6.21 7.02 8.20 9.8612.09 14.69 17.20
<PAGE>
TABLE 4: MINIMUM MONTHLY PAYMENT PAYABLE UNDER FIXED OPTION A FOR EACH $1,000
APPLIED
Years Payment Years Payment Years Payment Years Payment
5 $17.91 12 $8.24 19 $5.73 25 $4.71
6 15.14 13 7.71 20 5.51 26 4.59
7 13.16 14 7.26 21 5.32 27 4.47
8 11.68 15 6.87 22 5.15 28 4.37
9 10.53 16 6.53 23 4.99 29 4.27
10 9.61 17 6.23 24 4.84 30 4.18
11 8.86 18 5.96
TABLE 5: MINIMUM MONTHLY PAYMENT PAYABLE UNDER FIXED OPTION B FOR EACH $1,000
APPLIED
Age Male Female Age Male Female Age Male Female Age Male Female
30 $3.12 $2.99 47 $3.82 $3.53 64 $5.40 $4.83 80 $8.15 $7.66
31 3.15 3.01 48 3.88 3.58 65 5.55 4.96 81 8.32 7.86
32 3.18 3.03 49 3.94 3.63 66 5.69 5.08 82 8.47 8.06
33 3.21 3.06 50 4.01 3.68 67 5.85 5.22 83 8.61 8.25
34 3.24 3.08 51 4.08 3.74 68 6.01 5.37 84 8.75 8.43
35 3.27 3.11 52 4.15 3.80 69 6.18 5.52 85 8.87 8.60
36 3.31 3.13 53 4.23 3.86 70 6.35 5.68 86 8.98 8.75
37 3.34 3.16 54 4.31 3.93 71 6.52 5.85 87 9.08 8.88
38 3.38 3.19 55 4.39 4.00 72 6.70 6.03 88 9.18 9.01
39 3.42 3.22 56 4.48 4.07 73 6.89 6.21 89 9.26 9.12
40 3.46 3.25 57 4.58 4.15 74 7.07 6.41 90 9.33 9.21
41 3.51 3.29 58 4.68 4.23 75 7.26 6.61 91 9.40 9.30
42 3.55 3.32 59 4.78 4.32 76 7.44 6.81 92 9.45 9.37
43 3.60 3.36 60 4.89 4.41 77 7.63 7.02 93 9.49 9.43
44 3.65 3.40 61 5.01 4.50 78 7.81 7.23 94 9.53 9.47
45 3.71 3.44 62 5.14 4.61 79 7.98 7.45 95 9.55 9.51
46 3.76 3.49 63 5.27 4.72
TABLE 6: MINIMUM MONTHLY PAYMENT PAYABLE UNDER FIXED OPTION C FOR EACH $1,000
APPLIED
COMBINATION OF AGES
FEMALE AGE
30 35 40 45 50 55 60 65 70 75 80 85 90 95
30$2.88$2.93$2.97$3.01$3.04$3.07$3.08$3.10$3.12$3.12$3.12$3.12 $3.13 $3.13
35 2.91 2.97 3.03 3.09 3.14 3.18 3.21 3.23 3.25 3.26 3.27 3.27 3.28 3.28
40 2.93 3.01 3.09 3.17 3.24 3.30 3.35 3.39 3.42 3.44 3.46 3.46 3.47 3.47
M45 2.95 3.04 3.14 3.24 3.34 3.43 3.51 3.58 3.63 3.66 3.69 3.71 3.72 3.72
A50 2.96 3.06 3.17 3.30 3.43 3.56 3.68 3.79 3.87 3.94 3.98 4.01 4.03 4.03
L55 2.97 3.07 3.20 3.34 3.50 3.68 3.85 4.02 4.16 4.27 4.34 4.39 4.42 4.44
E60 2.98 3.09 3.22 3.38 3.56 3.78 4.01 4.25 4.47 4.66 4.80 4.89 4.95 4.98
65 2.98 3.09 3.23 3.40 3.61 3.86 4.15 4.48 4.81 5.12 5.37 5.55 5.66 5.72
A70 2.99 3.10 3.24 3.42 3.64 3.92 4.26 4.67 5.13 5.60 6.04 6.38 6.60 6.73
G75 2.99 3.10 3.25 3.43 3.66 3.96 4.34 4.81 5.39 6.06 6.75 7.35 7.79 8.07
E80 2.99 3.11 3.25 3.44 3.68 3.99 4.39 4.92 5.60 6.45 7.44 8.42 9.23 9.79
85 2.99 3.11 3.26 3.44 3.69 4.00 4.42 4.98 5.73 6.74 8.01 9.44 10.77 11.81
90 2.99 3.11 3.26 3.45 3.69 4.01 4.44 5.02 5.82 6.93 8.4310.29 12.25 13.95
95 2.99 3.11 3.26 3.45 3.70 4.02 4.45 5.04 5.87 7.05 8.7310.97 13.58 16.11
<PAGE>
Endorsements
To be inserted only by Us
<PAGE>
POLICY DESCRIPTION
This is a GROUP VARIABLE ANNUITY CERTIFICATE with limited purchase payment
flexibility. This certificate is nonparticipating with no dividends.
EXHIBIT 4(c)
TAX-SHELTERED
KEYPORT BENEFIT LIFE ANNUITY (TSA)
INSURANCE COMPANY ENDORSEMENT
We have issued this endorsement as part of the Certificate to which it is
attached to be effective on the later of the Certificate Issue Date or the
following date (if any):
Notwithstanding any provision in the Certificate to the contrary:
(a) The Certificate is intended to be a tax-sheltered annuity (TSA) created
for the exclusive benefit of You and Your Beneficiary and qualified under
Section 403(b) of the Internal Revenue Code ("Code"). Any Purchase Payment
must be a rollover or transfer contribution from another qualified TSA. Your
entire interest in the Certificate is nonforfeitable. You and the Annuitant
must be the same person. You may not designate a Contingent Annuitant or a
Joint Certificate Owner. You may not transfer ownership of the Certificate.
(b) Section 403(b)(11) of the Code provides that distributions from the
Certificate can occur only under the following circumstances: (1) the amount
is being distributed after You attain age 59 1/2, separate from service, die,
or become permanently and totally disabled; (2) the amount is being
distributed in the case of hardship but such amount may not include any
income attributable to Your TSA contributions; or (3) the amount to be
distributed, when added to (i) any amounts previously distributed from the
Certificate and (ii) any amounts distributed after December 31, 1988 from the
TSA(s) that is a predecessor of the Certificate, does not exceed the value of
the predecessor TSA(s) on December 31, 1988.
(c) You must begin taking distributions no later than the later of April 1
of the calendar year after You attain age 70 1/2 or April 1 of the calendar
year after you retire (the required beginning date). You may elect to have
the Certificate Value distributed in equal or substantially equal amounts
over (1) Your life or the lives of You and Your designated Beneficiary or (2)
a period certain not extending beyond Your life expectancy or the joint and
last survivor expectancy of You and Your designated Beneficiary. Periodic
payments will be made at intervals of no longer than one year and will
fluctuate in accordance with the investment results of the underlying Sub-
account(s) You have chosen for variable payments but will otherwise be
nonincreasing. Unless You elect otherwise by Written Request, You must apply
the Adjusted Certificate Value to annuity payments that begin on or before
the required beginning date under an annuity payment option that complies
with minimum distribution regulations adopted under Section 403(b)(10) of the
Code. You may elect that We pay You the Certificate Withdrawal Value on or
before the required beginning date or, if offered by Us, that payments begin
on or before that date under a partial withdrawal option that complies with
the regulations previously referred to. If You elect to meet Your
distribution requirements through variable income payments under "Option A:
Annuity for a Fixed Number of Years", the following additional requirements
apply. If You are under age 59 1/2 on the Income Date, the payment period
will be equal to Your life expectancy. If You are 59 1/2 or older on the
Income Date, but under age 70 1/2, the payment period will be for the period
You have specified, which may not extend beyond Your life expectancy or the
joint and last survivor expectancy of You and Your designated Beneficiary.
If You are over age 70 1/2 on the Income Date, the payment period will be for
the period You have specified, which may not exceed Your remaining life
expectancy or the remaining joint and last survivor expectancy of You and
Your designated Beneficiary.
(d) All distributions made hereunder shall be made in accordance with the
requirements of Section 401(a)(9) of the Code, including the incidental-death-
benefit requirements of Section 401(a)(9)(G) of the Code, and the regulations
thereunder, including the minimum distribution incidental benefit requirement
of Section 1.401(a)(9)-2 of the Proposed Income Tax Regulations.
(e) In the event of Your death, Your entire interest in the Certificate must
be distributed in conformity with regulations adopted under Section
403(b)(10) of the Code, which regulations contain rules similar to the after-
death-distribution rules of Section 401(a)(9)(G) of the Code and to the
incidental-death-benefit requirements of Section 401(a)(9)(G) of the Code.
These regulations provide that TSAs are subject to the distribution rules
provided in those Sections and in Regulation 1.401(a)(9)-1 and 1.401(a)(9)-2.
If You die after distributions have begun, the remaining portion of Your
interest will continue to be distributed at least as rapidly as under the
method of distribution being used prior to Your death. If You die before
distributions have begun, Your entire interest must be distributed within
five years of the date of death. Distributions are considered to have begun
if payments are made on account of Your reaching Your required beginning date
or, if prior to that date, annuity payments begin to You under (c) above.
The Certificate's provisions relating to the death of the Annuitant are
changed to the extent necessary to conform with the regulations and statutory
rules referred to in this paragraph (e).
(f) Life expectancy and joint and last survivor expectancy will be
calculated by use of the return multiples in Tables V and VI of Regulation
1.72-9. If We offer a partial withdrawal option, (1) the life expectancy
factor used by us will be based on the joint life expectancy of You and Your
designated Beneficiary unless You make a Written Request that it be based on
just Your life expectancy, (2) neither Your life expectancy nor the life
expectancy of any Beneficiary will be annually recalculated, and (3) instead,
the original life expectancy factor will be reduced by 1.0 in each succeeding
year.
IN THIS EVENT, PAYMENTS MAY NOT CONTINUE FOR YOU AND/OR YOUR
BENEFICIARIES LIFE.
(g) Nothwithstanding any provision of the Certificate to the contrary that
would otherwise limit a distributee's election, a "distributee" may elect,
at the time and in the manner prescribed by Us, to have any portion of an
"eligible rollover distribution" paid directly to an "eligible retirement
plan" specified by the distributee in a "direct rollover".
The "distributee" is You. In addition, Your surviving spouse and Your
spouse or former spouse who is the alternate payee under a qualified domestic
relations order, as defined in Section 414(p) of the Code, are distributees
with regard to the interest of the spouse or former spouse.
An "eligible rollover distribution" is any distribution of all or any
portion of the balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any distribution that is one
of a series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the distributee or
the joint lives (or joint life expectancies) of the distributee and the
distributee's designated Beneficiary, or for a specified period of ten years
or more; any distribution to the extent such distribution is required under
Section 401(a)(9) of the Code; and the portion of any distribution that is
not includible in gross income.
An "eligible retirement plan" is an individual retirement account
described in Section 408(a) of the Code, an individual retirement annuity
described in Section 408(b) of the Code, or a TSA described in Section 403(b)
of the Code, that accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual retirement account or
individual retirement annuity.
A "direct rollover" is a payment by Us to the eligible retirement plan
specified by the distributee.
(h) In the event of any conflict between the terms of the Certificate and
these TSA provisions or any sections of the Code applicable to annuities
described in Section 403(b) of the Code, those TSA provisions or sections
will govern. Any distribution options in the Certificate that are
inconsistent with Section 401(a)(9) or are inconsistent with other provisions
reflecting Section 401(a)(9) as are prescribed by the Commissioner of
Internal Revenue, are overridden and that Section or provision reflecting
that Section shall govern.
Signed for the Company by: /s/James J. Klopper
Secretary
END.TSA(8)/NY
EXHIBIT 4(d)
INDIVIDUAL RETIREMENT
KEYPORT BENEFIT LIFE ANNUITY (IRA)
INSURANCE COMPANY ENDORSEMENT
We have issued this endorsement as part of the Certificate to which it is
attached to be effective on the later of the Certificate Issue Date or the
following date (if any):
Notwithstanding any provision in the Certificate to the contrary:
(a) The Certificate is intended to be an individual retirement annuity (IRA)
plan created for the exclusive benefit of You and Your Beneficiary and
qualified under Section 408 of the Internal Revenue Code ("Code"). Your
entire interest in the Certificate is nonforfeitable. You and the Annuitant
must be the same person. You may not designate a Contingent Annuitant or a
Joint Certificate Owner. You may not transfer ownership of the Certificate
nor may You pledge, collaterally assign, or otherwise use it as security for
a loan.
(b) Except in the case of a rollover or transfer contribution as described
in Section 402(c), 403(a)(4), 403(b)(8) or 408(d)(3) of the Code, (1) the
payments made to an IRA for any taxable year must be in cash and may not
exceed $2,000 or such higher amount as may be permitted under the Code (e.g.,
for a contribution made in accordance with the terms of a Simplified Employee
Pension Plan (SEP) as described in Section 408(k)), and (2) You may not make
additional payments beginning with the calendar year in which You attain age
70 1/2. If the Certificate Schedule requires that any minimum payment be
over $2,000, the actual payment will generally have to be paid, at least in
part, by a rollover or transfer.
(c) You must begin taking distributions no later than April 1 of the
calendar year after You attain age 70 1/2 (the required beginning date). You
may elect to have the Certificate Value distributed in equal or substantially
equal amounts over (1) Your life or the lives of You and Your designated
Beneficiary or (2) a period certain not extending beyond Your life expectancy
or the joint and last survivor expectancy of You and Your designated
Beneficiary. Periodic payments will be made at intervals of no longer than
one year and will fluctuate in accordance with the investment results of the
underlying Sub-account(s) You have chosen for variable payments but will
otherwise be nonincreasing. Unless You elect otherwise by Written Request,
You must apply the Adjusted Certificate Value to annuity payments that begin
on or before the April 1st date under an annuity payment option that complies
with minimum distribution regulations adopted under Section 408(b)(3) of the
Code. You may elect that We pay You the Certificate Withdrawal Value on or
before the April 1st date or, if offered by Us, that payments begin on or
before that date under a partial withdrawal option that complies with the
regulations previously referred to. If You elect to meet Your distribution
requirements through variable income payments under "Option A: Annuity for a
Fixed Number of Years", the following additional requirements apply. If You
are under age 59 1/2 on the Income Date, the payment period will be equal to
Your life expectancy. If You are 59 1/2 or older on the Income Date, but
under age 70 1/2, the payment period will be for the period You have
specified, which may not extend beyond Your life expectancy or the joint and
last survivor expectancy of You and Your designated Beneficiary. If You are
over age 70 1/2 on the Income Date, the payment period will be for the
period You have specified, which may not exceed Your remaining life
expectancy or the remaining joint and last survivor expectancy of You and
Your designated Beneficiary.
(d) All distributions made hereunder shall be made in accordance with the
requirements of Section 401(a)(9) of the Code, including the incidental-death-
benefit requirements of Section 401(a)(9)(G) of the Code, and the regulations
thereunder, including the minimum distribution incidental benefit requirement
of Section 1.401(a)(9)-2 of the Proposed Income Tax Regulations.
(e) In the event of Your death, Your entire interest in the Certificate must
be distributed in conformity with regulations adopted under Section 408(b)(3)
of the Code, which regulations contain rules similar to the after-death-
distribution rules of Section 401(a)(9)(G) of the Code and to the incidental-
death-benefit requirements of Section 401(a)(9)(G) of the Code. These
regulations provide that IRAs are subject to the distribution rules provided
in those Sections and in Regulation 1.401(a)(9)-1 and 1.401(a)(9)-2.
If You die after distributions have begun, the remaining portion of Your
interest will continue to be distributed at least as rapidly as under the
method of distribution being used prior to Your death. If You die before
distributions have begun, Your entire interest must be distributed within
five years of the date of death. Distributions are considered to have begun
if payments are made on account of Your reaching Your required beginning date
or, if prior to that date, annuity payments begin to You under (c) above.
If the designated Beneficiary is Your surviving spouse, the surviving
spouse may treat the Certificate as his or her own IRA. This election will
be deemed to have been made if such surviving spouse fails to elect a
distribution acceptable under Regulation 1.401(a)(9). The Certificate's
provisions relating to the death of the Annuitant are changed to the extent
necessary to conform with the regulations and statutory rules referred to in
this paragraph.
(f) Life expectancy and joint and last survivor expectancy will be
calculated by use of the return multiples in Tables V and VI of Regulation
1.72-9. If We offer a partial withdrawal option, (1) the life expectancy
factor used by us will be based on the joint life expectancy of You and Your
designated Beneficiary unless You make a Written Request that it be based on
just Your life expectancy, (2) neither Your life expectancy nor the life
expectancy of any Beneficiary will be annually recalculated, and (3) instead,
the original life expectancy factor will be reduced by 1.0 in each succeeding
year. IN THIS EVENT, PAYMENTS MAY NOT CONTINUE FOR YOU AND/OR YOUR
BENEFICIARIES LIFE.
(g) We will send You annually a report concerning the status of the annuity.
(h) In the event of any conflict between the terms of the Certificate and
these IRA provisions or any sections of the Code applicable to annuities
described in Section 408(b) of the Internal Revenue Code, those IRA
provisions or sections will govern. Any distribution options in the
Certificate that are inconsistent with Section 401(a)(9) or are inconsistent
with other provisions reflecting Section 401(a)(9) as are prescribed by the
Commissioner of Internal Revenue, are overridden and that Section or
provision reflecting that Section shall govern.
Signed for the Company by: /s/James J. Klopper
Secretary
END.IRA(8)/NY
EXHIBIT 4(e)
CORPORATE/KEOGH
KEYPORT BENEFIT LIFE INSURANCE 401(a) PLAN
COMPANY ENDORSEMENT
We have issued this endorsement as part of the Certificate to which it is
attached to be effective on the later of the Certificate Issue Date or the
following date (if any):
Notwithstanding any provisions in the Certificate to the contrary:
(a) The Certificate is issued to a trust or custodial account forming
part of an employer's pension or profit-sharing plan qualified under Section
401 of the Internal Revenue Code. While the Certificate is in effect, You
must continue to maintain the tax-qualified status of the plan. The
Certificate does not reflect any plan provisions; it is simply an asset of
the plan.
(b) You may not designate a Contingent Annuitant, a Joint Certificate
Owner, or a Beneficiary. You are the Beneficiary. If You do not designate
an Annuitant because the initial payment to the Certificate represents the
unallocated interests of multiple participants under the plan, then You may
apply a partial withdrawal amount either to a non-transferable Annuity Option
payable to a participant or to a non-transferable Joint and Survivor Annuity
Option payable to a participant and his or her spouse.
(c) The provisions of Section 401 of the Internal Revenue Code will
apply in the event of any conflict with the provisions of this Certificate.
Signed for the Company by: /s/James J. Klopper
Secretary
END.C/K(8)
EXHIBIT 4(f)
KEYPORT BENEFIT LIFE UNISEX
INSURANCE COMPANY ENDORSEMENT
We have issued this endorsement as part of the Certificate to which it is
attached as of the Issue Date.
The "Misstatement of Age or Sex" and "Basis of Calculation" sections are
changed to eliminate all references to the sex of the payee so that no
annuity payment will be calculated using the sex of the payee. The reference
in the "Basis of Calculation" section to "(sex distinct)" is changed to
"weighted 40% male and 60% female".
The "Evidence of Death, Age, Sex or Survival" section is changed to eliminate
evidence of sex as a requirement.
Tables 2, 3, 5, and 6 on Pages 21 and 22 are changed to read:
TABLE 2: FIRST MONTHLY PAYMENT PAYABLE UNDER VARIABLE OPTION B FOR EACH
$1,000 APPLIED
Age Payment Age Payment Age Payment Age Payment Age Payment
30 $4.39 43 $4.73 56 $5.43 69 $6.90 82 $9.22
31 4.40 44 4.77 57 5.51 70 7.06 83 9.38
32 4.42 45 4.81 58 5.59 71 7.22 84 9.52
33 4.44 46 4.85 59 5.68 72 7.39 85 9.66
34 4.46 47 4.89 60 5.78 73 7.57 86 9.79
35 4.49 48 4.94 61 5.88 74 7.75 87 9.90
36 4.51 49 4.99 62 5.98 75 7.94 88 10.01
37 4.54 50 5.04 63 6.09 76 8.12 89 10.10
38 4.57 51 5.10 64 6.21 77 8.31 90 10.18
39 4.59 52 5.16 65 6.34 78 8.50 91 10.25
40 4.63 53 5.22 66 6.47 79 8.69 92 10.31
41 4.66 54 5.29 67 6.60 80 8.87 93 10.36
42 4.69 55 5.36 68 6.75 81 9.05 94 10.40
95 10.43
TABLE 3: FIRST MONTHLY PAYMENT PAYABLE UNDER VARIABLE OPTION C FOR EACH
$1,000 APPLIED
COMBINATION OF AGES
30 35 40 45 50 55 60 65 70 75 80 85 90 95
30 $4.24$4.27$4.29$4.31$4.33$4.34$4.36$4.37$4.37$4.38$4.38 $4.39 $4.39 $4.39
35 4.30 4.34 4.37 4.40 4.42 4.44 4.46 4.47 4.48 4.48 4.49 4.49 4.49
40 4.39 4.44 4.48 4.52 4.55 4.57 4.59 4.61 4.62 4.63 4.63 4.63
45 4.50 4.57 4.62 4.68 4.72 4.75 4.78 4.80 4.81 4.82 4.82
50 4.66 4.75 4.83 4.90 4.95 5.00 5.03 5.05 5.06 5.07
55 4.87 4.99 5.11 5.20 5.28 5.33 5.37 5.39 5.40
60 5.17 5.34 5.50 5.63 5.73 5.79 5.83 5.85
65 5.60 5.85 6.07 6.24 6.37 6.44 6.49
70 6.22 6.58 6.89 7.12 7.28 7.37
75 7.13 7.66 8.10 8.41 8.61
80 8.48 9.25 9.86 10.29
85 10.47 11.56 12.42
90 13.27 14.78
95 17.11
TABLE 5: MINIMUM MONTHLY PAYMENT PAYABLE UNDER FIXED OPTION B FOR EACH $1,000
APPLIED
Age Payment Age Payment Age Payment Age Payment Age Payment
30 $3.05 43 $3.46 56 $4.24 69 $5.79 82 $8.24
31 3.07 44 3.50 57 4.32 70 5.96 83 8.41
32 3.09 45 3.55 58 4.41 71 6.13 84 8.57
33 3.12 46 3.60 59 4.51 72 6.31 85 8.72
34 3.15 47 3.65 60 4.61 73 6.50 86 8.85
35 3.18 48 3.70 61 4.71 74 6.69 87 8.97
36 3.21 49 3.76 62 4.82 75 6.88 88 9.08
37 3.24 50 3.82 63 4.94 76 7.08 89 9.18
38 3.27 51 3.88 64 5.07 77 7.28 90 9.27
39 3.31 52 3.94 65 5.20 78 7.48 91 9.34
40 3.34 53 4.01 66 5.34 79 7.68 92 9.40
41 3.38 54 4.08 67 5.48 80 7.87 93 9.46
42 3.42 55 4.16 68 5.63 81 8.06 94 9.50
95 9.53
TABLE 6: MINIMUM MONTHLY PAYMENT PAYABLE UNDER FIXED OPTION C FOR EACH $1,000
APPLIED
COMBINATION OF AGES
30 35 40 45 50 55 60 65 70 75 80 85 90 95
30 $2.88$2.92$2.95$2.98$3.00$3.01$3.02$3.03$3.04$3.04$3.04$3.05 $3.05 $3.05
35 2.97 3.02 3.06 3.09 3.12 3.14 3.15 3.16 3.17 3.17 3.18 3.18 3.18
40 3.09 3.15 3.20 3.24 3.27 3.30 3.32 3.33 3.34 3.34 3.34 3.35
45 3.24 3.31 3.38 3.44 3.48 3.51 3.53 3.54 3.55 3.56 3.56
50 3.43 3.53 3.62 3.69 3.74 3.78 3.80 3.82 3.83 3.83
55 3.68 3.81 3.93 4.02 4.09 4.13 4.16 4.18 4.19
60 4.01 4.19 4.35 4.47 4.56 4.61 4.65 4.66
65 4.47 4.73 4.94 5.11 5.21 5.28 5.32
70 5.11 5.48 5.78 6.00 6.13 6.21
75 6.04 6.57 6.99 7.28 7.46
80 7.40 8.16 8.75 9.15
85 9.38 10.46 11.29
90 12.18 13.68
95 16.02
Signed for the Company by: /s/James J. Klopper
Secretary
END.A(138)
EXHIBIT 4(g)
KEYPORT BENEFIT LIFE QUALIFIED PLAN
INSURANCE COMPANY ENDORSEMENT
We have issued this endorsement as part of the Group Contract to which it is
attached on the Issue Date.
At least one of the following Certificate endorsements will be offered to
Certificate Owners (only one endorsement will be issued with any one
Certificate):
END.IRA(8) Individual Retirement Annuity (IRA) Endorsement
END.TSA(8) Tax-Sheltered Annuity (TSA) Endorsement
END.C/K(8) Corporate/Keogh 401(a) Plan Endorsement
When required by applicable law, the following Certificate endorsement will
also be issued:
END.A(138) Unisex Endorsement
Signed for the Company: /s/James J. Klopper
Secretary
END.A(139)
EXHIBIT 5(a)
APPLICATION FOR KEYPORT BENEFIT LIFE INSURANCE COMPANY
GROUP VARIABLE ANNUITY CONTRACT
Please send application to: Keyport Benefit Life Insurance Company
125 High Street
Boston, MA 02110
1. Contract Owner: ________________________________________________________
(Name)
________________________________________________________________________
(Street) (City) (State) (Zip Code)
________________________________________________________________________
(Telephone Number) (Name of Person to Contact)
2. Nature of Group: _______________________________________________________
3. Number of Participants in Group: _______________________________________
4. Special Requests: ______________________________________________________
________________________________________________________________________
Signed At: _________________________ _______________________
(City, State) (Date)
_____________________________________
(Signature of Contract Owner)
By: _________________________________
(Name)
_________________________________
(Title)
AGENT'S REPORT
Agent's Name: _____________________________ Agency Phone: ______________
(Print Exact Name on License)
Agency Name: _____________________________
Agency Address: ___________________________
___________________________________________
(Signature of Agent)
[ ] [ ] [ ] [ ] [ ] - [ ] [ ] [ ] [ ] [ ]
(Home Office Use Only)
AP/DVA-1998(NY) Keyport Benefit Contract #
EXHIBIT 5(b)
APPLICATION FOR A GROUP VARIABLE ANNUITY CERTIFICATE
Mail to: Keyport Benefit Life Insurance Company, 125 High Street, Boston, MA
02110-2712
ANNUITANT 1
First Middle Last Phone( )
Street Address City State Zip
Social Sec. No: [ ] [ ] [ ] - [ ] [ ] -[ ] [ ] [ ] [ ] Sex: [ ] M [ ] F
Birthdate: Month / Day / Year
PRIMARY CERTIFICATE OWNER 2
(Only if different from annuitant)
First Middle Last
Street Address City State Zip
Relationship to Annuitant Phone( )
[ ] Social Sec. No. [ ] Taxpayer I.D. No. [ ] [ ] [ ] - [ ] [ ] - [ ] [ ]
[ ] [ ] Birthdate: Month / Day / Year
BENEFICIARY(IES) 3
(Person(s) you want to "own" the annuity if the primary owner and any joint
owner are both dead)
Name Birthdate Relationship to Annuitant
Street Address City State Zip
Name Birthdate Relationship to Annuitant
Street Address City State Zip
JOINT CERTIFICATE OWNER 4
(Optional) (Signature is required on reverse)
First Middle Last Birthdate
Street Address City State Zip
Social Sec. No: [ ] [ ] [ ] - [ ] [ ] - [ ] [ ] [ ] [ ] Phone No: ( )
CONTINGENT BENEFICIARY (Optional) 5
Name Birthdate Relationship to Annuitant
Street Address City State Zip
PURCHASE AMOUNT 6
($5,000 minimum and make check payable to Liberty Life Assurance Company of
Boston; subsequent purchases must be at least $1,000)
$ [ ] Check is attached. [ ] Funds will be sent later.
ALLOCATION 7
____ % ________________________
____ % ________________________
____ % ________________________
____ % ________________________
____ % ________________________
____ % ________________________
____ % ________________________
____ % ________________________
____ % ________________________
____ % ________________________
____ % ________________________
____ % ________________________
____ % ________________________
____ % ________________________
____ % ________________________
Each amount must be at least 10% and a whole number. Amounts must total
100%. Percentages will also be used to allocate subsequent purchase amounts.
TELEPHONE INSTRUCTIONS (Optional) 8
[ ] Check box if certificate owner(s) want the ability to make transfers
and purchase amount allocation changes by telephone. Insert the name of any
other person also authorized to do the same:
(It is agreed this designation is subject to the power of attorney provisions
in the prospectus). It is agreed that telephone instructions will be subject
to the conditions and procedures in the prospectus.
AP/DVA-CER-1998(NY) Keyport Benefit Group Contract No. Keyport Benefit
Certificate No.
- -OVER-
TYPE OF PLAN 9
[ ] Non-Qualified [ ] Qualified
QUALIFIED PLANS ONLY 10
Complete For All Plans:
This money should be set up as a:
Type:
[ ] IRA [ ] _____________ [ ] _____________
[ ] Custodial IRA [ ] _____________ [ ] _____________
[ ] _____________ _____________
Complete If Applicable:
This money comes from a:
[ ] Trustee Transfer or [ ] Direct Rollover or [ ] Rollover from a:
[ ] IRA [ ] SEP IRA [ ] Keogh [ ] 401(a) [ ] TSA
Complete For IRAs Only:
This money represents: Regular contributions of $
for Tax Year 19 and $ for Tax Year 19 ;
Transfer $ Direct Rollover $ Rollover $
REPLACEMENT 11
Will the certificate applied for replace any existing annuity or insurance
policy?
[ ] Yes [ ] No If yes, list insurance company, policy #, and attach
transfer or exchange forms.
SPECIAL REQUESTS 12
[ ] Check box if owner wants the statement of additional information referred
to in the prospectus.
Other
AGREEMENT 13
It is agreed that all statements and answers given above are true and
complete to the best of my knowledge and this application shall become part
of the annuity certificate issued by the Company. I understand that annuity
payments and surrender values, when based upon the investment experience of a
separate account, are variable and are not guaranteed as to fixed dollar
amount. Receipt of a current variable annuity prospectus is hereby
acknowledged.
SIGNED AT 14
City State (REQUIRED) Date
Signature of Annuitant (REQUIRED)
Signature of Certificate Owner (if other than Annuitant) (Any representative
capacity, such as trustee, must include the full legal designation.)
Signature of Joint Certificate Owner (if any)
AGENT'S REPORT 15
Do you have any reason to believe that the certificate applied for may
replace an existing annuity or insurance policy?
[ ] Yes [ ] No If yes, list carrier, policy #, whether 1035 exchange,
and attach State Replacement Form if applicable.
Agent's Legal Name (Printed)
Business Address Street City State Zip
Agent's Bus. Phone ( )
Agent's Social Sec. No. [ ] [ ] [ ] - [ ] [ ] - [ ] [ ] [ ] [ ]
Agency Name
Signature of Agent
(AGENCY/AGENT NO.) [ ] [ ] [ ] [ ] [ ] - [ ] [ ] [ ] [ ] [ ]
508.5/98(NY)
EXHIBIT 8
FORM OF
PARTICIPATION AGREEMENT
AMONG
[mutual fund]
[distributor]
[investment adviser]
AND
KEYPORT BENEFIT LIFE INSURANCE COMPANY
This Agreement, made and entered into this day of , 19[ ] by
and among Keyport Benefit Life Insurance, a New York corporation, (referred
to as the "Company"), each on its own behalf and on behalf of its Separate
Account, which is a segregated asset account of the Company; [mutual fund]
(the "Fund"), a [ ] organized under the laws of the State of [ ];
[distributor] ("Distributor"), a [ ] corporation; and [investment
adviser] ("Adviser"), a [ ] corporation.
WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established for variable life insurance policies and
variable annuity contracts ("Variable Insurance Products") to be offered by
insurance companies which have entered into participation agreements with the
Fund and Distributor substantially identical to this Agreement (hereinafter
"Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several
series of shares (such series being hereinafter referred to individually as a
"Portfolio" or collectively as the "Portfolios") as shown on Schedule A
attached hereto; and
WHEREAS, the Fund currently intends to apply for an order from the
Securities and Exchange Commission ("SEC"), granting Participating Insurance
Companies and variable annuity and variable life insurance separate accounts
exemptions from the provisions of Sections 9(a), 13(a), 15(a), and 15(b) of
the Investment Company Act of 1940, as amended (hereinafter the "1940 Act")
and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder to the extent necessary
to permit shares of the Fund to be sold to and held by variable annuity
separate and variable life insurance accounts of both affiliated and
unaffiliated life insurance companies (hereinafter the "Shared Funding
Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and its shares are registered under the Securities
Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, [investment adviser] (the "Adviser") is duly registered as an
investment adviser under the federal Investment Advisers Act of 1940 and any
applicable state securities law; and
WHEREAS, the Company has registered or will register certain Variable
Insurance Products under the 1933 Act; and
WHEREAS, the Company has established duly organized, a validly existing
segregated asset account as shown on Schedule B attached hereto (the
"Separate Account") established by resolution of the Boards of Directors of
the Company, and divided such Separate Account into subaccounts to set aside
and invest assets attributable to aforesaid variable annuity contracts; and
WHEREAS, the Company has registered or will register the certain
Separate Account as a unit investment trust under the 1940 Act; and
WHEREAS, Distributor is registered as a broker-dealer with the
Securities and Exchange Commission ("SEC") under the Securities Exchange Act
of 1934, as amended, (hereinafter the "1934 Act"), and is a member in good
standing of the National Association of Securities Dealers, Inc. (hereinafter
"NASD"); and
WHEREAS, [ ] ([" "]) the underwriter for the individual
variable annuity and the variable life policies, is registered as a broker-
dealer with the SEC under the 1934 Act and is a member in good standing of
the NASD; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios on
behalf of the Separate Account to fund certain Variable Insurance Products.
Distributor is authorized to sell such shares to unit investment trusts such
as the Separate Account at net asset value, and acts as distributor of the
Portfolio shares.
NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Fund and the Distributor agree as follows:
ARTICLE I. Sale of Fund Shares
1.1 Distributor shall sell to the Company those shares of the Fund
which the Separate Account orders, executing such orders on a daily basis at
the net asset value next computed after receipt by the Fund or its designee
of the order for shares of the Fund. For purposes of this Section 1.1, the
Company shall be the designee of the Fund for receipt of such orders from the
Separate Account and receipt by such designee shall constitute receipt by the
Fund provided that each Company receives the order by [4:00 p.m. New York]
time and the Fund receives notice from the Company, as the Company and Fund
may agree, by [9:00 a.m. New York] time on the next Business Day. "Business
Day" shall mean any day on which the New York Stock Exchange is open for
regular trading and on which the Fund calculates its net asset value pursuant
to the rules of the SEC.
1.2 The Fund agrees subject to the terms of this Agreement, to make its
shares available indefinitely for purchase at the applicable net asset value
per share by the Companies and their Separate Accounts on those days on which
the Fund calculates its net asset value pursuant to rules of the SEC and the
Fund shall use reasonable efforts to calculate such net asset value on each
day on which the New York Stock Exchange is open for trading.
Notwithstanding the foregoing, the Board of Trustees of the Fund (hereinafter
the "Board") may refuse to sell shares of any Portfolio to any person, or
suspend or terminate the offering of shares of any Portfolio if such action
is required by law or by regulatory authorities having jurisdiction or is, in
the sole discretion of the Board acting in good faith and in light of its
fiduciary duties under federal and any applicable state laws, necessary in
the best interests of the shareholders of such Portfolio.
1.3 The Fund agrees that shares of the Fund will be sold only to
Participating Insurance Companies and their separate accounts which have
agreed to participate in the Fund to fund their Separate Accounts and/or
certain qualified plans, all in accordance with the requirements of Section
817(h) of the Internal Revenue Code of 1986, as amended (hereinafter "Code")
and Treasury Regulation 1.817-5. No shares of any Portfolio will be sold to
the general public.
1.4 The Fund and Distributor will not sell Fund shares to any insurance
company or separate account unless an agreement containing substantially
similar provisions as Articles I, III, V, VI and Sections 2.5 of Article II
of this Agreement is in effect to govern such sales.
1.5 The Fund will redeem for cash, on the Company's request, any full
or fractional shares of the Fund held by the Company, executing such requests
on a daily basis at the net asset value next computed after receipt by the
Fund or its designee of redemption requests. For purposes of this Section
1.5, the Company shall be the designee of the Fund for receipt of requests
for redemption from the Separate Account, and receipt by such designee should
constitute receipt by the Fund; provided that the Company receives the
request for redemption by [4:00 p.m. New York] time, and the Fund receives
notice from the Company, as the Company and Fund may agree, by [9:00 a.m. New
York] time on the next Business Day.
Subject to the applicable rules and regulations, if any, of the SEC, the
Fund may pay the redemption price for shares of any Portfolio in whole or in
part by a distribution in kind of securities from the Portfolio of the Fund
allocated to such Portfolio in lieu of money, valuing such securities at
their value employed for determining net asset value governing such
redemption price, and selecting such securities in a manner the Board may
determine in good faith to be fair and equitable.
1.6 The Fund may suspend the redemption of any full or fractional
shares of the Fund (1) for any period (a) during which the New York Stock
Exchange is closed (other than customary weekend and holiday closings) or (b)
during which trading on the New York Stock Exchange is restricted; (2) for
any period during which an emergency exists as a result of which (a) disposal
by the Fund of securities owned by it is not reasonably practicable or (b) it
is not reasonably practicable for the Fund fairly to determine the value of
its net assets; or (3) for such other periods as the SEC may by order permit
for the protection of shareholders of the Fund.
1.7 The Company will purchase and redeem the shares of each Portfolio
offered by the then current prospectus of the Fund in accordance with the
provisions of such prospectus and statement of additional information ("SAI")
(collectively referred to as "Prospectus," unless otherwise provided). The
Company agrees that all net amounts available under the Variable Insurance
Products with the form number(s) that are listed on Schedule B attached
hereto and incorporated herein by this reference, as such Schedule B may be
amended from time to time hereafter by mutual written agreement of all the
parties hereto (the "Contracts"), shall be invested in the Fund, in such
other Funds advised by Stein, Roe & Farnham Incorporated or the Adviser as
may be mutually agreed to in writing by the parties hereto, or in the
Company's general accounts, or in such other funds as the parties hereto
agree in writing.
1.8 The Company shall pay for Fund shares on the same Business Day as
an order to purchase Fund shares is made in accordance with the provisions of
Section 1.1 hereof. Payment shall be in federal funds transmitted by wire,
or may otherwise be provided by separate agreement. For purpose of Section
2.10 and 2.11, upon receipt by the Fund of the federal funds so wired, such
funds shall cease to be the responsibility of the Company and shall become
the responsibility of the Fund.
1.9 Issuance and transfer of the Funds' shares will be by book entry
only. Stock certificates will not be issued to the Company or the Separate
Account. Shares ordered from the Fund will be recorded in an appropriate
title for the Separate Account or the appropriate subaccount of the Separate
Account.
1.10 The Fund shall furnish same day notice (by wire or telephone,
followed by written confirmation) to the Company of any income dividends or
capital gain distributions payable on the shares of any Portfolio. The
Company hereby elects to receive all such income dividends and capital gain
distributions as are payable on the Portfolio shares in additional shares of
that Portfolio. The Company reserves the right to revoke this election and
to receive all such income, dividends and capital gain distributions in cash.
The Fund shall notify the Company of the number of shares so issued as
payment of such income, dividends and capital gains distributions.
1.11 The Fund shall make the net asset value per share for each Series
available to the Company on a daily basis as soon as reasonably practical
after the net asset value per share is calculated and shall use its best
efforts to make such net asset value per share available by [7 p.m., New
York] time.
ARTICLE II. Representations and Warranties
2.1 The Company represents and warrants that the Contracts are or will
be registered under the 1933 Act to the extent required by the 1933 Act; that
the Contracts will be issued and distributed in compliance in all material
respects with all applicable federal and state laws and that the sale of the
Contracts shall comply in all material respects with state insurance
suitability requirements. The Company further represents and warrants that
it is an insurance company duly organized and in good standing under
applicable law and that prior to any issuance or sale of any Contract it has
legally and validly established the Separate Account as a segregated asset
account under the applicable state insurance laws and has registered or,
prior to any issuance or sale of the Contracts, will register the Separate
Account as a unit investment trust in accordance with the provisions of the
1940 Act to serve as a segregated investment account for the Contracts.
2.2 The Company represents and warrants that [ ], the underwriter
for the individual variable annuity and the variable life policies, is a
member in good standing of the NASD and is a registered broker-dealer with
the SEC. The Company represents and warrants that the Company and [ ]
will issue and distribute such policies in accordance in all material
respects with all applicable state and federal securities laws, including
without limitation the 1933 Act, the 1934 Act, and the 1940 Act.
2.3 The Fund represents and warrants that Fund shares sold pursuant to
this Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in compliance with the laws of the State of [ ] and
all applicable federal and any state securities laws and that the Fund is and
shall remain registered under the 1940 Act. The Fund shall amend the
registration statement for its shares under the 1933 Act and the 1940 Act
from time to time as required in order to effect the continuous offering of
its shares. The Fund shall register and qualify the shares for sale in
accordance with the laws of the various states only if and to the extent
deemed advisable by the Fund or Distributor.
2.4 The Fund represents that it intends to qualify as a Regulated
Investment Company under Subchapter M of the Code and that it will make every
effort to maintain such qualification (under Subchapter M or any successor or
similar provision) and that it will notify the Company immediately upon
having a reasonable basis for believing that it has ceased to so qualify or
that it might not so qualify in the future. The Fund represents and warrants
that each Portfolio will comply with the diversification requirements set
forth in Section 817(h) of the Code, and the rules and regulations
thereunder, including without limitation Treasury Regulation 1.817-5, and
will notify the Company immediately upon having a reasonable basis for
believing any Fund has ceased to comply or might not so comply and will
immediately take all reasonable steps to adequately diversify the Fund to
achieve compliance within the grace period afforded by Regulation 1.817-5.
The Fund acknowledges that any failure to qualify as a Regulated Investment
Company will eliminate the ability of the subaccounts to avail themselves of
the "look through" provisions of section 817(h) of the Code, and that as a
result the Contracts will almost certainly fail to qualify as annuity
contracts under section 817(h) of the Code.
2.5 The Company represents that the Contracts are currently treated as
endowment or annuity contracts under applicable provisions of the Code and
that it will make every effort to maintain such treatment and that it will
notify the Fund and Distributor immediately upon having a reasonable basis
for believing that the Contracts have ceased to be so treated or that they
might not be so treated in the future.
2.6 The Fund makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various
states except that the Fund represents that it is currently in compliance and
shall at all times remain in compliance with the applicable insurance laws of
the domiciliary states of the Participating Insurance Companies to the extent
that the Participating Insurance Companies advise the Fund, in writing, of
such laws or any changes in such laws.
2.7 Distributor represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC.
Distributor further represents that it will sell and distribute the Fund's
shares in accordance with applicable state and federal securities laws,
including without limitation the 1933 Act, the 1934 Act, and the 1940 Act.
2.8 The Fund represents that it is lawfully organized and validly
existing under the laws of the State of [ ] and that it does and will comply
in all material respects with the 1940 Act.
2.9 The Fund represents and warrants that the Adviser is and shall
remain duly registered under all applicable federal and state securities laws
and that the Adviser shall perform its obligations for the Fund in compliance
in all material respects with the applicable laws of the State of [ ]
and any applicable state and federal securities laws.
2.10 The Fund represents and warrants that all of its Trustees,
officers, employees, investment advisers, and other individuals/entities
dealing with the money and/or to securities of the Fund are and shall
continue to be at all times covered by a blanket fidelity bond or similar
coverage in an amount not less than the minimal coverage as required
currently by Rule 17g-(1) of the 1940 Act or related provisions as may be
promulgated from time to time. The aforesaid bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding company.
2.11 The Company represents and warrants that all of their directors,
officers, employees, investment advisers, and other individuals/entities
dealing with the money and/or securities of the Fund are covered by a blanket
fidelity bond or similar coverage for the benefit of the Fund, in an amount
not less than ten million dollars ($10,000,000) with no deductible amount.
The aforesaid bond shall include coverage for larceny and embezzlement and
shall be issued by a reputable fidelity insurance company. The Company agrees
to make all reasonable efforts to see that this bond or another bond
containing these provisions is always in effect, and agrees to notify the
Fund and Distributor in the event such coverage no longer applies.
ARTICLE III. Prospectus and Proxy Statements; Voting
3.1 The Fund and the Adviser shall provide the Company with as many
copies of the Fund's current prospectus and Statement of Additional
Information as the Company may reasonably request in connection with delivery
of the prospectus to shareholders and purchasers of Variable Insurance
Products. If requested by Company in lieu thereof, the Fund or the Adviser
shall provide such documentation (including a "camera ready" copy of the new
prospectus as set in type or, at the request of Company, as a diskette in the
form sent to the financial printer) and other assistance as is reasonably
necessary in order for the parties hereto once a year (or more frequently if
the prospectus for the shares is supplemented or amended) to have the
prospectus for the Variable Insurance Products and the prospectus for the
Fund shares printed together in one document. The expenses of such printing
will be apportioned between the Company and the Fund as the parties agree to
in writing. In the event that the Company requests that the Fund or the
Adviser provide the Fund's prospectus in a "camera ready" or diskette format,
the Fund shall be responsible for providing the prospectus in the format in
which it is accustomed to formatting prospectuses and shall bear the expense
of providing the prospectus in such format (e.g. typesetting expenses) and
the Company shall bear the expense of adjusting or changing the format to
conform with any of its prospectus.
3.2 The Fund's prospectus shall state that the Statement of Additional
Information for the Fund is available from Distributor and the Company, and
at its expense, shall provide final copy of such Statement of Additional
Information to Distributor for duplication and provision to any Owner of a
Variable Insurance Product or prospective owner who requests it.
3.3 The Fund, at its expense, shall provide the Company with copies of
its proxy materials, reports to shareholders and other communications (except
for prospectus and Statements of Additional Information, which are covered in
Section 3.1) to shareholders in such quantity as the Company shall reasonably
require for distribution to Owners.
3.4 If and to the extent required by law the Company shall:
(i) solicit voting instructions from Owners;
(ii) vote the Fund shares in accordance with
instructions received from Owners; and
(iii) vote Fund shares for which no instructions have
been received in a particular Separate Account in
the same proportion as Fund shares of such
Portfolio for which instructions have been
received in that Separate Account,
so long and to the extent that the SEC continues to interpret the 1940 Act to
require pass-through voting privileges for variable contract owners. The
Company reserves the right to vote Fund shares held in any segregated asset
account in its own right, to the extent permitted by law. Participating
Insurance Companies shall be responsible for assuring that each of their
Separate Accounts participating in the Fund calculates voting privileges in a
manner consistent with the standards to be provided in writing to the
Participating Insurance Companies.
3.5 The Fund shall comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular the Fund will either provide for
annual meetings or comply with Section 16(c) of the 1940 Act (although the
Fund is not one of the trusts described in Section 16(c) of that Act) as well
as with Section 16(a) and, if and when applicable, 16(b). Further, the Fund
will act in accordance with the SEC's interpretation of the requirements of
Section 16(a) with respect to periodic elections of trustees and with
whatever rules the Commission may promulgate with respect thereto.
ARTICLE IV. Sales Material and Information
4.1 The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee, the form of each piece of sales literature or other
promotional material in which the Fund or its investment adviser is named, at
least ten (10) Business Days prior to its use. No such material shall be used
if the Fund or its designee reasonably objects to such use within five (5)
Business Days after receipt of its material.
4.2 The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the sale of Variable Insurance Products other than the
information or representations contained in the registration statement or
Prospectus for the Fund shares, as such registration statement and Prospectus
may be amended or supplemented from time to time, or in reports or proxy
statements for the Fund, or in sales literature or other promotional material
approved by the Fund or its designee, except with the permission of the Fund
or its designee.
4.3 The Fund or its designee shall furnish, or shall cause to be
furnished, to the Company or its designee, each piece of sales literature or
other promotional material in which the Company and/or its Separate
Account(s), are named at least ten (10) Business Days prior to its use. No
such material shall be used if the Company or its designee reasonably objects
to such use within five (5) Business Days after receipt of such material.
4.4 The Fund shall not give any information or make any representations
or statements on behalf of the Company or concerning the Company, each
Separate Account, or the Variable Insurance Products other than the
information or representations contained in or accurately derived from a
registration statement or prospectus for such Variable Insurance Products, as
such registration statement and prospectus may be amended or supplemented
from time to time, or in published reports for such Separate Account which
are in the public domain or approved by the Company for distribution to
Owners, or in sales literature or other promotional material approved by the
Company or its designee, except with the permission of the Company.
4.5 The Fund shall provide to the Company at least one complete copy of
all registration statements, prospectuses, Statements of Additional
Information, reports, proxy statements, sales literature and other
promotional materials, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to the Fund or
its shares, contemporaneously with the filing of such document with the SEC
or other regulatory authorities.
4.6 The Company shall provide to the Fund at least one complete copy of
all registration statements, prospectuses, Statements of Additional
Information, reports, solicitations for voting instructions, sales literature
and other promotional materials, applications for exemptions, requests for
no-action letters, and all amendments to any of the above, that relate to the
Variable Insurance Products or any Separate Account, contemporaneously with
the filing of such document with the SEC or other regulatory authorities.
4.7 For purposes of this Article IV, the phrase "sales literature or
other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use in, a newspaper, magazine,
or other periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures, or other public
media), sales literature (i.e., any written communication distributed or made
generally available to customers or the public, including brochures,
circulars, research reports, market letters, form letters, seminar texts,
reprints or excerpts of any other advertisement, sales literature, or
published article), educational or training materials or other communications
distributed or made generally available to some or all agents or employees,
and registration statements, prospectuses, Statements of Additional
Information, shareholder reports, and proxy materials and any other material
constituting sales literature or advertising under the 1933 Act, the 1940 Act
or NASD rules.
ARTICLE V. Fees and Expenses
5.1 The Fund shall pay no fee or other compensation to the Company
under this Agreement (except for items covered in Article III), except that
if the Fund or any Portfolio adopts and implements a plan pursuant to Rule
12b-1 to finance distribution expenses, then Distributor may make payments to
the Company for the Variable Insurance Products if and in amounts agreed to
by Distributor in writing and such payments will be made out of existing fees
payable to Distributor, past profits of Distributor or other resources
available to Distributor. No such payments shall be made directly by the
Fund. Currently, no such payments are contemplated.
5.2 All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund. The Fund shall see to it that all its
shares are registered and authorized for issuance in accordance with
applicable federal law and if and to the extent deemed advisable by the Fund,
in accordance with applicable state laws prior to their sale. The Fund shall
bear the expenses of registration and qualification of the Fund's shares,
preparation and filing of the Fund's prospectus and registration statement,
proxy materials and reports, setting the prospectus in type, setting in type
and printing the proxy materials and reports to shareholders (including the
costs of printing a prospectus that constitutes an annual report), the
preparation of all statements and notices required by any federal or state
law, and all taxes on the issuance or transfer of the Fund's shares.
5.3 The Company shall bear the expenses of distributing the Fund's
proxy materials and reports to Owners.
ARTICLE VI. Potential Conflicts
6.1 The parties acknowledge that the Fund presently intends to file an
application with the SEC to request an order granting relief from various
provisions of the 1940 Act and the rules thereunder to the extent necessary
to permit the Fund shares to be sold to and held by variable annuity and
variable life insurance separate accounts of both affiliated and unaffiliated
Participating Insurance Companies and Qualified Plans. It is anticipated that
the Exemptive Order, when and if issued, shall require the Fund and each
Participating Insurance Company to comply with conditions and undertakings
substantially as provided in this Section 6. If the Exemptive Order imposes
conditions materially different from those provided for in this Section 6,
the conditions and undertakings imposed by the Exemptive Order shall govern
this Agreement and the parties hereto agree to amend this Agreement
consistent with the Exemptive Order. The Fund will not enter into a
participation agreement with any other Participating Insurance Company unless
it imposed the same conditions and undertakings as are imposed on the
Company.
6.2 The Board shall monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the Owners of separate
accounts of Participating Insurance Companies investing in the Fund. A
material irreconcilable conflict may arise for a variety of reasons,
including: (a) an action by any state insurance regulatory authority; (b) a
change in applicable federal or state insurance, tax, or securities laws or
regulations, or a public ruling, private letter ruling, no-action or
interpretative letter, or any similar action by insurance, tax, or securities
regulatory authorities; (c) an administrative or judicial decision in any
relevant proceeding; (d) the manner in which the investments of any Portfolio
are being managed; (e) a difference in voting instructions given by variable
annuity contract and variable life insurance policy Owners; (f) a decision by
an insurer to disregard the voting instructions of Owners; or (g) if
applicable, a decision of a Qualified Plan to disregard the voting
instructions of plan participants. The Board shall promptly inform the
Company if it determines that a material irreconcilable conflict exists and
the implications thereof.
6.3 The Company will report any potential or existing conflicts
(including the occurrence of any event specified in paragraph 6.1 which may
give rise to such a conflict) of which it is aware to the Board. The Company
will assist the Board in carrying out their responsibilities under the Shared
Funding Exemptive Order, by providing the Board with all information
reasonably necessary for the Board to consider any issues raised. This
includes, but is not limited to, an obligation by the Company to inform the
Board whenever Owner voting instructions are disregarded. The
responsibilities of the Company will be carried out with a view to the
interests of the Owners.
6.4 If it is determined by a majority of the Board, or a majority of
its disinterested trustees, that a material irreconcilable conflict exists,
the Company and other Participating Insurance Companies shall, at their
expense and to the extent reasonably practicable (as determined by a majority
of the disinterested trustees), take whatever steps are necessary to remedy
or eliminate the material irreconcilable conflict, up to and including: (1)
withdrawing the assets allocable to some or all of the separate accounts of
Participating Insurance Companies from the Fund or any Portfolio and
reinvesting such assets in a different investment medium, including (but not
limited to) another Portfolio of the Fund, or submitting the question whether
such segregation should be implemented to a vote of all affected Owners and,
as appropriate, segregating the assets of any particular group (i.e., annuity
contract owners, life insurance contract owners, or variable contract owners
of one or more Participating Insurance Companies) that votes in favor of such
segregation, or offering to the affected Owners the option of making such a
change; and (2) establishing a new registered management investment company
or managed separate account.
6.5 If a material irreconcilable conflict arises because of a decision
by the Company to disregard Owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
shall be required, at the Fund's election, to withdraw the affected Separate
Account's (or subaccount's) investment in the Fund and terminate this
Agreement with respect to such Separate Account (or subaccount); provided,
however, that such withdrawal and termination shall be limited to the extent
required by the foregoing material irreconcilable conflict as determined by a
majority of the disinterested members of the Board. The responsibility to
take such remedial action shall be carried out with a view only to the
interests of the Owners. Any such withdrawal and termination must take place
within six (6) months after the Fund gives written notice that this provision
is being implemented, and until the end of that six (6) month period
Distributor and the Fund shall continue to accept and implement orders by the
Company for the purchase and redemption of shares of the Fund.
6.6 If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Separate Account's investment in the Fund and terminate this
Agreement within six (6) months after the Board informs the Company in
writing that it has determined that such decision has created a
irreconcilable material conflict; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing
irreconcilable material conflict as determined by a majority of the
disinterested members of the Board. Until the end of the foregoing six (6)
month period, Distributor and the Fund shall continue to accept and implement
orders by the Company for the purchase and redemption of shares of the Fund.
6.7 For purposes of Sections 6.4 through 6.7 of this Agreement, a
majority of the disinterested members of the Board shall determine whether
any proposed action adequately remedies any irreconcilable material
conflict, but in no event will the Fund be required to establish a new
funding medium for the Variable Insurance Products. The Company shall not be
required by Section 6.4 to establish a new funding medium for the Variable
Insurance Products if an offer to do so has been declined by vote of a
majority of Owners materially adversely affected by the irreconcilable
material conflict. In the event that the Board determines that any proposed
action does not adequately remedy any irreconcilable material conflict, then
the Company shall withdraw the affected Separate Account's investment in the
Fund and terminate this Agreement within six (6) months after the Board
informs the Company in writing of the foregoing determination; provided,
however, that such withdrawal and termination shall be limited to the extent
required by any such material irreconcilable conflict as determined by a
majority of the disinterested Members of the Board.
6.8 If and to the extent that Rule 6e-2 or Rule 6e-3(T) are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
1940 Act or the rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Shared Funding Exemptive Order) on terms and
conditions materially different from those contained in the Shared Funding
Exemptive Order, then (a) the Fund and/or the Participating Insurance
Companies, as appropriate, shall take such steps as may be necessary to
comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to
the extent such Rules are applicable; and (b) Sections 3.4, 3.5, 6.2, 6.3,
6.4, 6.5, and 6.6 of this Agreement shall continue in effect only to the
extent that terms and conditions substantially identical to such Sections are
contained in such Rule(s) as so amended or adopted.
ARTICLE VII. Indemnification
7.1 Indemnification By the Company
7.1(a) The Company shall indemnify and hold harmless the Distributor,
the Adviser, the Fund and each member of the Board and officers and each
person, if any, who controls the Fund within the meaning of Section 15 of the
1933 Act (collectively, the "Indemnified Parties" for purposes of this
Section 7.1) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the
Company) or litigation (including legal and other expenses), to which the
Indemnified Parties may become subject under any statute, regulation, at
common law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements are related to the
sale of the Variable Insurance Products and:
(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in
the registration statement or prospectus for the Variable Insurance
Products or in the sales literature for the Variable Insurance
Products (or any amendment or supplement to any of the foregoing),
or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading,
provided that this Agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in conformity
with information furnished in writing to the Company by or on
behalf of the Fund for use in the registration statement or
prospectus for the Variable Insurance Products or in the sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Variable Insurance Products or Fund
shares; or
(ii) arise out of or are based upon statements or
representations (other than statements or representations
contained in the Registration Statement, prospectus or sales
literature of the Fund not supplied by the Company, or persons
under its control) or wrongful conduct of the Company or persons
under its control, with respect to the sale or distribution of the
Variable Insurance Products; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a Registration
Statement, prospectus, or sales literature of the Fund or any
amendment thereof or supplement thereto or the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading
if such a statement or omission was made in reliance upon
information furnished to the Fund by or on behalf of the Company;
or
(iv) arise as a result from any failure by the Company to
provide the services and furnish the materials under the terms
of this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material breach
of this Agreement by the Company, as limited by and in accordance
with the provisions of Sections 7.1(b) and 7.1(c) hereof.
7.1(b) The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation incurred or assessed against an Indemnified Party as such may
arise from such Indemnified Party's willful misfeasance, bad faith, or gross
negligence in the performance of such Indemnified Party's duties or by reason
of such Indemnified Party's reckless disregard of obligations or duties under
this Agreement or to the Fund, whichever is applicable.
7.1(c) The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify the Company
of any such claim shall not relieve the Company from any liability which it
may have to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision. In case any
such action is brought against an Indemnified Party, the Company shall be
entitled to participate, at its own expense, in the defense of such action.
The Company also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice from the
Company to such party of the election of one or both of the Company to assume
the defense thereof, the Indemnified Party shall bear the fees and expenses
of any additional counsel retained by it, and the Company will not be liable
to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the
defense thereof other than reasonable costs of investigation.
7.1(d) The Indemnified Parties shall promptly notify the Company of the
commencement of any litigation or proceeding against them in connection with
the issuance or sale of Variable Insurance Products or the operation of the
Fund. This indemnification shall be in addition to any liability which the
Company may otherwise have.
7.2 Indemnification By the Adviser
7.2(a) The Adviser shall indemnify and hold harmless the Companies, and
each of their directors and officers and each person, if any, who controls
the Companies within the meaning of Section 15 of the 1933 Act (collectively,
the "Indemnified Parties" for purposes of this Section 7.2) against any and
all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Fund) or litigation (including
legal and other expenses) to which the Indemnified Parties may become subject
under any statute, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the operations of the Fund and:
(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in
the registration statement or prospectus or sales literature for
the Fund (or any amendment or supplement to any of the foregoing),
or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading,
provided that this Agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in conformity
with information furnished in writing to the Advisor, Distributor
or the Fund by or on behalf of the Company for use in the
registration statement or prospectus for the Fund or in the sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of Fund shares;or
(ii) arise out of or are based upon statements or
representations (other than statements or representations
contained in the Registration Statement, prospectus or sales
literature of the Variable Insurance Products not supplied by the
Adviser, Distributor or persons under its control) or wrongful
conduct of one or both of the Fund or the Adviser or persons under
its control, with respect to the sale or distribution of Fund
shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a Registration Statement,
prospectus, or sales literature of the Variable Insurance Products,
or any amendment thereof or supplement thereto, or the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading if such a statement or omission was made in reliance
upon and in conformity with information furnished to the Company by
or on behalf of the Fund; or
(iv) arise out of or result from any failure by the Adviser
to provide the services and furnish the materials under the
terms of this Agreement (including a failure to comply with the
diversification requirements specified in Article II of this
Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this
Agreement or arise out of or result from any other material breach
of this Agreement by the Fund;
as limited by and in accordance with the provisions of Sections 7.2(b) and
7.2(c) hereof.
7.2(b) The Adviser shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation incurred or assessed against an Indemnified Party as such may
arise from such Indemnified Party's willful misfeasance, bad faith, or gross
negligence in the performance of such Indemnified Party's duties or by reason
of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement or to the Company, the Fund, Distributor or each
Separate Account, whichever is applicable.
7.2(c) The Adviser shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Adviser in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have served upon such
Indemnified Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify the Adviser
of any such claim shall not relieve the Adviser from any liability which it
may have to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision. In case any
such action is brought against and Indemnified Party, the Adviser will be
entitled to participate, at its own expense, in the defense thereof. The
Adviser also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the Adviser
to such party of the Adviser's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Adviser will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable
costs of investigation.
7.2(d) The Company agrees promptly to notify the Adviser of the
commencement of any litigation or proceedings against it or any of its
officers or directors in connection with this Agreement, the issuance or sale
of the Variable Insurance Products or the operation of the Account. This
indemnification shall be in addition to any liability which the Adviser may
otherwise have.
7.3 Indemnification by the Distributor
7.3(a) The Distributor shall indemnify and hold harmless the Company,
and each of its directors and officers and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act (collectively,
the "Indemnified Parties" for purposes of this Section 7.3) against any and
all losses, claims, damages, liabilities or litigation (including legal and
other expenses) to which the Indemnified Parties may become subject under any
statute, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements are
related to the sale or acquisition of the Fund's shares and:
(i) arise out of or are based upon statements or
representations (other than statements or
representations contained in the Registration
Statement, prospectus or sales literature for the
Variable Insurance Products not supplied by the
Distributor, Advisor, Fund or persons under its
control) or wrongful conduct of the Distributor or
persons under its control, with respect to the sale or
distribution of the Fund shares; or
(ii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in sales literature of
the Variable Insurance Products, or any amendment thereof or
supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading if such a statement
or omission was made in reliance upon and in conformity with
information furnished to the Company by the Distributor, or
(iii) arise out of or result from any failure by the
Distributor to provide the services and furnish the materials under
the terms of this Agreement; or
(iv) arise out of or result from any material breach of any
representation and/or warranty made by the Distributor in this
Agreement or arise out of or result from any other material breach
of this Agreement by the Distributor;
as limited by and in accordance with the provisions of Sections 7.3(b) and
7.3(c) hereof.
7.3(b) The Distributor shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by reason
of such Indemnified Party's willful misfeasance, bad faith, or gross
negligence in the performance of such Indemnified Party's duties or by reason
of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement or to the Company or the Separate Account, whichever is
applicable.
7.3(c) The Distributor shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Distributor in writing within
a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have served upon such
Indemnified Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify the
Distributor of any such claim shall not relieve the Distributor from any
liability which it may have to the Indemnified Party against and whom such
action is brought otherwise than on account of this indemnification
provision. In case any such action is brought against an Indemnified Party,
the Distributor will be entitled to participate, at its own expense, in the
defense thereof. The Distributor also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the action.
After notice from the Distributor to such party of the Distributor's election
to assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Distributor will
not be liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.
7.3(d) The Company agrees promptly to notify the Distributor of the
commencement of any litigation or proceedings against them or any of their
respective officers or directors in connection with this Agreement, the
issuance or sale of the Variable Insurance Products or the operation of
either Account. This indemnification shall be in addition to any liability
which the Distributor may otherwise have.
ARTICLE VIII. Applicable Law
8.1 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of [ ].
8.2 This Agreement shall be subject to the provisions of the 1933, 1934
and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the
SEC may grant (including, but not limited to, the Shared Funding Exemptive
Order) and the terms hereof shall be interpreted and construed in accordance
therewith.
ARTICLE XI. Termination
9.1. This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party for any reason by six months' advance
written notice delivered to the other parties; or
(b) termination by the Company by written notice to the Fund and
the Distributor with respect to any Portfolio based upon the
Company's determination that shares of such Portfolio are not
reasonably available to meet the requirements of the Contracts or
not consistent with the Company's obligations to Owners; or
(c) termination by the Company by written notice to the Fund and
the Distributor with respect to any Portfolio in the event any of
the Portfolio's shares are not registered, issued or sold in
accordance with applicable state and/or federal law or such law
precludes the use of such shares as the underlying investments
media of the Variable Insurance Products issued or to be issued by
the Company; or
(d) termination by the Company by written notice to the Fund and
the Distributor with respect to any Portfolio in the event that
such Portfolio ceases to qualify as a Regulated Investment Company
under Subchapter M of the Code or any independent or resulting
failure under Section 817 of the Code, or under any successor or
similar provision of either, or if the Company reasonably believe
that the Fund may fail to so qualify; or
(e) termination by either the Fund or the Distributor by written
notice to the Company, if either one or both of the Fund or the
Distributor respectively, shall determine, in their sole judgement
exercised in good faith, that the Company has suffered a material
adverse change in their business, operations, financial condition
or prospects since the date of this Agreement or are the subject of
material adverse publicity; but no termination shall be effective
under this subsection (e) until the Company has been afforded a
reasonable opportunity to respond to a statement by the Fund or the
Distributor concerning the reason for notice of termination
hereunder; or
(f) termination by the Company by written notice to the Fund and
the Distributor, if the Company shall determine, in its sole
judgement exercised in good faith, that either the Fund or the
Distributor has suffered a material adverse change in its business,
operations, financial condition or prospects since the date of this
Agreement or is the subject of material adverse publicity; but no
termination shall be effective under this subsection (f) until the
Company has been afforded a reasonable opportunity to respond to a
statement by the Fund or the Distributor concerning the reason for
notice of termination hereunder.
(g) At the option of the Fund if the Variable Insurance Products
cease to qualify as annuity contracts or life insurance contracts,
as applicable, under the Code, of if the Fund reasonably believes
that the Variable Insurance Products may fail to so qualify.
Termination shall be effective upon receipt of notice by the
Company.
(h) At the option of the Company, upon the Funds breach of any
material provision of this Agreement, which breach has not been
cured to the satisfaction of the Company within ten (10) days after
written notice of such breach is delivered to the Funds.
(i) At the option of the Fund, upon the Company's breach of any
material provision of this Agreement, which breach has not been
cured to the satisfaction of the Fund within ten (10) days after
written notice of such breach is delivered to the Company.
(j) At the option of the Company, if the Variable Insurance
Products are not sold in accordance with applicable federal and/or
state law by the Distributor. Termination shall be effective
immediately upon such occurrence without notice.
(k) At the option of the Fund, if the Variable Insurance Products
are not registered and issued in accordance with applicable federal
and/or state law. Termination shall be effective immediately upon
such occurrence without notice.
9.2 Effect of Termination. Notwithstanding any termination of this
Agreement, the Fund and the Distributor shall at the option of the Company,
continue to make available additional shares of the Fund pursuant to the
terms and conditions of this Agreement, for all Variable Insurance Products
in effect on the effective date of termination of this Agreement (hereinafter
referred to as "Existing Contracts"). Specifically, without limitation, the
Owners of the Existing Contracts shall be permitted to reallocate investments
in the Fund, redeem investments in the Fund and/or invest in the Fund upon
the making of additional purchase payments under the Existing Contracts. The
parties agree that this Section 9.2 shall not apply to any terminations under
Article VI and the effect of such Article VI terminations shall be governed
by Article VI of this Agreement. However, in no event shall the Fund and
Distributor be required to make additional shares available to Existing
Contracts for more that six (6) months after the date of termination of the
Agreement.
9.3 The Company shall not redeem Fund shares attributable to the
Variable Insurance Products (as opposed to Fund shares attributable to the
Company's assets held in the Separate Account) except (i) as necessary to
implement Owner initiated or approved transactions, or (ii) as required by
state and/or federal laws or regulations or judicial or other legal precedent
of general application (hereinafter referred to as a "Legally Required
Redemption") or (iii) as permitted by an order of the SEC pursuant to Section
26(b) of the 1940 Act. Upon request, the Company will promptly furnish to the
Fund and the Distributor the opinion of counsel for the Company (which
counsel shall be reasonably satisfactory to the Fund and the Distributor) to
the effect that any redemption pursuant to the clause (ii) above is a Legally
Required Redemption. Furthermore, except in cases where permitted under the
terms of the Variable Insurance Products, and as may be in the best interests
of Owners, as determined by the Company, the Company shall not prevent Owners
from allocating payments to a Portfolio that was otherwise available under
the Contracts without first giving the Fund or the Distributor ninety (90)
days notice of its intention to do so.
9.4 Notwithstanding any termination of this Agreement for any reason,
the terms and conditions of the following provisions of this Agreement shall
remain in effect with respect to any Existing Contract, for so long as such
Existing Contract has assets invested in the Fund: Section 1.3 to 1.10 of
Article I (governing the pricing and redemption of shares); Article II
(Representations and Warranties); Sections 3.1 through 3.3 and 3.5 of Article
III (Prospectus and Proxy Statements, and Voting); Articles IV and VIII
(Sales Material and Information; Fees and Expenses, Diversification;
Potential Conflicts; Indemnification; and Applicable Law); Article X
(Notices); and Sections 11.1, 11.2, and 11.5 through 11.8 of Article XI
(Miscellaneous). Further, notwithstanding any termination of this Agreement
for any reason, the terms and conditions of the following provisions of this
Agreement shall remain in effect with regard to Variable Insurance Products
previously invested in the Fund: Article II (Representations and Warranties);
and Article VIII (Indemnification).
ARTICLE X. Notices
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth
below or at such other address as such party may from time to time specify in
writing to the other party.
If to the Fund:
[ ]
If to the Company:
Keyport Benefit Life Insurance Company
125 High Street
Boston, MA 02110
Attention: General Counsel
If to Distributor:
[ ]
If to Adviser:
[ ]
ARTICLE XI. Miscellaneous
11.1 All persons dealing with the Fund must look solely to the property
of the Fund for the enforcement of any claims against the Fund as neither the
Board, officers, agents or shareholders assume any personal liability for any
obligations entered into on behalf of the Fund.
11.2 Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and
addresses of the Owners and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information until such time as it may come
into the public domain without the express written consent of the affected
party.
11.3 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.
11.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
11.5 If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
11.6 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC,
the NASD, and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
11.7 The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to
under state and federal laws.
11.8 This Agreement or any of the rights and obligations hereunder may
not be assigned by any party without the prior written consent of all parties
hereto; provided, however, that the Distributor may assign the Agreement or
any rights or obligations hereunder to any affiliate of or company under
common control with the Distributor (but in such event the Distributor shall
continue to be liable under Article VII of this Agreement for any indemnifi
cation due to the Company, and assignee shall also be liable), if such
assignee is duly licensed and registered to perform the obligations of the
Distributor under this Agreement.
11.9 No provision of the Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by the
Fund, the Distributor and the Company.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.
KEYPORT BENEFIT LIFE INSURANCE COMPANY
By its authorized officer,
By: ________________________________
Title: _____________________________
Date: ______________________________
[distributor]
By its authorized officer,
By: _______________________________
Title: ____________________________
Date: _____________________________
[mutual fund]
By its authorized officer,
By: _______________________________
Title: ____________________________
Date: _____________________________
[investment adviser]
By its authorized officer,
By: _______________________________
Title: ____________________________
Date: _____________________________
Schedule A
[mutual fund]
[ ]
Schedule B
Separate Accounts Selected Funds
Variable Account A [ ]
EXHIBIT 9
February 6, 1998
John W. Rosensteel, President
Keyport Benefit Life Insurance Company
125 High Street
Boston, MA 02110
RE: OPINION OF COUNSEL - VARIABLE ACCOUNT A
Dear Mr. Rosensteel:
You have requested my opinion concerning the legality of the variable annuity
contracts being registered with the Securities and Exchange Commission by
this Registration Statement.
I have made such examination of the law and have examined such records and
documents as in my judgment was necessary or appropriate to enable me to
render the opinion expressed below.
I am of the opinion that the contracts will be legally issued and will
represent binding obligations of the depositor (Keyport Benefit Life
Insurance Company).
You may use this opinion letter, or a copy thereof, as an exhibit to the
Registration Statement.
Sincerely,
/s/Bernard R. Beckerlegge
Bernard R. Beckerlegge
General Counsel
EXHIBIT 16
LIMITED POWER OF ATTORNEY
I, John W. Rosensteel, a director, the Chairman of the Board, President
and Chief Executive Officer of American Benefit Life Insurance Company (soon
to be renamed Keyport Benefit Life Insurance Company), a corporation duly
organized under the laws of the State of New York, do hereby appoint Bernard
R. Beckerlegge and James J. Klopper, and each of them singly, my true and
lawful attorneys, with full power to them and each of them to sign for me and
in my name as a director, the Chairman of the Board, President and Chief
Executive Officer of this Company all documents required for registration of
a security under the Securities Act of 1933, as amended, all documents
required for registration of an investment company under the Investment
Company Act of 1940, as amended, and all other documents required to be filed
with the Securities and Exchange Commission under those two Acts and
regulations under the Acts.
Dated: February 6, 1998
/s/Bernard R. Beckerlegge /s/John W. Rosensteel
Signature of Witness Signature of Mr. Rosensteel
LIMITED POWER OF ATTORNEY
I, Bernard R. Beckerlegge, a director of American Benefit Life Insurance
Company (soon to be renamed Keyport Benefit Life Insurance Company), a
corporation duly organized under the laws of the State of New York, do hereby
appoint John W. Rosensteel and James J. Klopper, and each of them singly, my
true and lawful attorneys, with full power to them and each of them to sign
for me and in my name as a director of this Company all documents required
for registration of a security under the Securities Act of 1933, as amended,
all documents required for registration of an investment company under the
Investment Company Act of 1940, as amended, and all other documents required
to be filed with the Securities and Exchange Commission under those two Acts
and regulations under the Acts.
Dated: February 6, 1998
/s/James J. Klopper /s/Bernard R,. Beckerlegge
Signature of Witness Signature of Mr. Beckerlegge
LIMITED POWER OF ATTORNEY
I, Stephen B. Bonner, a director of American Benefit Life Insurance
Company (soon to be renamed Keyport Benefit Life Insurance Company), a
corporation duly organized under the laws of the State of New York, do hereby
appoint John W. Rosensteel, Bernard R. Beckerlegge and James J. Klopper, and
each of them singly, my true and lawful attorneys, with full power to them
and each of them to sign for me and in my name as a director of this Company
all documents required for registration of a security under the Securities
Act of 1933, as amended, all documents required for registration of an
investment company under the Investment Company Act of 1940, as amended, and
all other documents required to be filed with the Securities and Exchange
Commission under those two Acts and regulations under the Acts.
Dated: February 6, 1998
/s/Bernard R. Beckerlegge /s/Stephen B. Bonner
Signature of Witness Signature of Mr. Bonner
LIMITED POWER OF ATTORNEY
I, William P. Donohue, a director of American Benefit Life Insurance
Company (soon to be renamed Keyport Benefit Life Insurance Company), a
corporation duly organized under the laws of the State of New York, do hereby
appoint John W. Rosensteel, Bernard R. Beckerlegge and James J. Klopper, and
each of them singly, my true and lawful attorneys, with full power to them
and each of them to sign for me and in my name as a director of this Company
all documents required for registration of a security under the Securities
Act of 1933, as amended, all documents required for registration of an
investment company under the Investment Company Act of 1940, as amended, and
all other documents required to be filed with the Securities and Exchange
Commission under those two Acts and regulations under the Acts.
Dated: February 6, 1998
/s/Bernard R. Beckerlegge /s/William P. Donohue
Signature of Witness Signature of Mr. Donohue
LIMITED POWER OF ATTORNEY
I, Bernhard M. Koch, a director and the Chief Financial Officer of
American Benefit Life Insurance Company (soon to be renamed Keyport Benefit
Life Insurance Company), a corporation duly organized under the laws of the
State of New York, do hereby appoint John W. Rosensteel, Bernard R.
Beckerlegge and James J. Klopper, and each of them singly, my true and lawful
attorneys, with full power to them and each of them to sign for me and in my
name as a director and the Chief Financial Officer of this Company all
documents required for registration of a security under the Securities Act of
1933, as amended, all documents required for registration of an investment
company under the Investment Company Act of 1940, as amended, and all other
documents required to be filed with the Securities and Exchange Commission
under those two Acts and regulations under the Acts.
Dated: February 6, 1998
/s/Bernard R. Beckerlegge /s/Bernhard M. Koch
Signature of Witness Signature of Mr. Koch
LIMITED POWER OF ATTORNEY
I, Paul H. LeFevre, Jr., a director of American Benefit Life Insurance
Company (soon to be renamed Keyport Benefit Life Insurance Company), a
corporation duly organized under the laws of the State of New York, do hereby
appoint John W. Rosensteel, Bernard R. Beckerlegge and James J. Klopper, and
each of them singly, my true and lawful attorneys, with full power to them
and each of them to sign for me and in my name as a director of this Company
all documents required for registration of a security under the Securities
Act of 1933, as amended, all documents required for registration of an
investment company under the Investment Company Act of 1940, as amended, and
all other documents required to be filed with the Securities and Exchange
Commission under those two Acts and regulations under the Acts.
Dated: February 6, 1998
/s/Bernard R. Beckerlegge /s/Paul H. LeFevre, Jr.
Signature of Witness Signature of Mr. LeFevre
LIMITED POWER OF ATTORNEY
I, Peter M. Lehrer, a director of American Benefit Life Insurance
Company (soon to be renamed Keyport Benefit Life Insurance Company), a
corporation duly organized under the laws of the State of New York, do hereby
appoint John W. Rosensteel, Bernard R. Beckerlegge and James J. Klopper, and
each of them singly, my true and lawful attorneys, with full power to them
and each of them to sign for me and in my name as a director of this Company
all documents required for registration of a security under the Securities
Act of 1933, as amended, all documents required for registration of an
investment company under the Investment Company Act of 1940, as amended, and
all other documents required to be filed with the Securities and Exchange
Commission under those two Acts and regulations under the Acts.
Dated: February 6, 1998
/s/Bernard R. Beckerlegge /s/Peter M. Lehrer
Signature of Witness Signature of Mr. Lehrer
LIMITED POWER OF ATTORNEY
I, Jeff S. Liebmann, a director of American Benefit Life Insurance
Company (soon to be renamed Keyport Benefit Life Insurance Company), a
corporation duly organized under the laws of the State of New York, do hereby
appoint John W. Rosensteel, Bernard R. Beckerlegge and James J. Klopper, and
each of them singly, my true and lawful attorneys, with full power to them
and each of them to sign for me and in my name as a director of this Company
all documents required for registration of a security under the Securities
Act of 1933, as amended, all documents required for registration of an
investment company under the Investment Company Act of 1940, as amended, and
all other documents required to be filed with the Securities and Exchange
Commission under those two Acts and regulations under the Acts.
Dated: February 6, 1998
/s/Bernard R. Beckerlegge /s/Jeff S. Liebmann
Signature of Witness Signature of Mr. Liebmann
LIMITED POWER OF ATTORNEY
I, Christopher C. York, a director of American Benefit Life Insurance
Company (soon to be renamed Keyport Benefit Life Insurance Company), a
corporation duly organized under the laws of the State of New York, do hereby
appoint John W. Rosensteel, Bernard R. Beckerlegge and James J. Klopper, and
each of them singly, my true and lawful attorneys, with full power to them
and each of them to sign for me and in my name as a director of this Company
all documents required for registration of a security under the Securities
Act of 1933, as amended, all documents required for registration of an
investment company under the Investment Company Act of 1940, as amended, and
all other documents required to be filed with the Securities and Exchange
Commission under those two Acts and regulations under the Acts.
Dated: February 6, 1998
/s/Bernard R. Beckerlegge /s/Christopher C. York
Signature of Witness Signature of Mr. York
EXHIBIT 17
Tax-Sheltered Annuity ("TSA") Acknowledgement
I am aware that: (a) due to Section 403(b)(11) of the Internal Revenue Code,
there will be restrictions on my right to redeem the variable annuity
contract to be issued by Keyport Benefit Life Insurance Company; (b) these
restrictions are described in the prospectus for such contract; and (c)
subject to the continuation of current IRS policy, there are other investment
alternatives under my employer's 403(b) arrangement to which I may later
elect to transfer the surrender value of my Keyport Benefit variable annuity
contract.
__________________ ____________________________
Date Signature of TSA Applicant
EXHIBIT 18
FORM OF
ADMINISTRATIVE SERVICES AGREEMENT
This Agreement is effective on the ___ day of ____________, 1998 and is
between Keyport Life Insurance Company (KEYPORT), a Rhode Island corporation,
Keyport Benefit Life Insurance Company (KEYPORT BENEFIT), a New York
corporation, and Keyport Financial Services Corp. (KFSC), a Massachusetts
corporation and a broker/dealer registered with the National Association of
Securities Dealers (NASD) and the Securities and Exchange Commission (SEC).
In consideration of the mutual covenants expressed in this Agreement, and of
the mutual expectations of benefit accruing from the activities contemplated,
the parties agree as follows:
1. General. Notwithstanding any other provision of this
Agreement, the business and affairs of KEYPORT BENEFIT shall be
managed by its Board of Directors or by the Executive Committee of
its Board of Directors and, as may otherwise be appropriate, by its
Officers. In providing services under this Agreement, KEYPORT
shall not have management prerogatives or discretion with respect
to KEYPORT BENEFIT's business and affairs except as may be granted
by KEYPORT BENEFIT's Board of Directors from time to time. KEYPORT
BENEFIT shall own all records pertaining to its business and shall
have access to any of its records which may, from time to time, be
in the custody of KEYPORT. KEYPORT BENEFIT retains complete
authority over and responsibility for the direction and control of
the services provided under this Agreement. To the extent that this
Agreement relates to services pertaining to variable life insurance
and variable annuities or to other products registered with the
SEC, the provisions of paragraph 18 of this Agreement shall govern.
2. Practices and Procedures. The services provided by KEYPORT
under this Agreement shall be substantially the same services as it
provides to its own plans of insurance and annuities. KEYPORT
BENEFIT has evaluated those services and found them to be
satisfactory. Without prior consent of KEYPORT BENEFIT, KEYPORT
shall not depart from these practices, work-flows, procedures and
services in a way which materially affects the nature of the
services provided under this Agreement. KEYPORT shall use its best
efforts to effect any reasonable changes in practices, work-flows,
procedures and services that are requested by KEYPORT BENEFIT on
reasonable advance notice. KEYPORT BENEFIT shall pay all
reasonable costs incurred by KEYPORT to effect requested changes
which individually or in the aggregate materially increase
KEYPORT's cost to provide services under this Agreement.
3. Forms, Notices, etc. When providing services under this
Agreement, KEYPORT shall use those forms, notices, reports, checks
and other similar instruments as KEYPORT and KEYPORT BENEFIT may
agree upon from time to time. KEYPORT BENEFIT shall provide
reasonable advance notice to KEYPORT of any changes in the forms,
notices, reports, checks or other similar instruments which it may
request. KEYPORT BENEFIT shall pay all reasonable costs incurred by
KEYPORT to effect those changes which individually or in the
aggregate materially increase KEYPORT's cost to provide services
under this Agreement.
4. Selling Services; Sales Aids. Subject to paragraph 18,
KEYPORT may in the future provide selling services for KEYPORT
BENEFIT and shall provide sales aids to those persons that KEYPORT
and KEYPORT BENEFIT agree upon from time to time. KEYPORT shall
charge the recipient of the sales aids either: (i) at rates that
are published from time to time by KEYPORT in schedules of sales
aids which are generally made available by KEYPORT; or, (ii) at
reasonable rates established by KEYPORT for sales aids developed
and made available specifically by KEYPORT. All sales aids shall
be subject to prior approval by KEYPORT BENEFIT.
5. Selection and Underwriting. KEYPORT may in the future provide
selection, underwriting and issue services for KEYPORT BENEFIT
policies. KEYPORT selection and underwriting decisions shall be in
accordance with the standard selection and underwriting practices
of KEYPORT BENEFIT; provided, that KEYPORT underwriting personnel
shall consult with KEYPORT BENEFIT underwriting personnel in any
unusual risk selection or underwriting situations or upon the
request of KEYPORT BENEFIT underwriting personnel. KEYPORT BENEFIT
shall have final authority over the underwriting and selection of
risks.
6. Premium Billing and Collection. KEYPORT may provide premium
and billing services utilizing its premium billing and collection
system to bill and collect all premiums on KEYPORT BENEFIT policies
and shall disburse amounts so collected to or on behalf of KEYPORT
BENEFIT at the earliest practicable time. KEYPORT shall at all
times maintain records which identify KEYPORT BENEFIT funds
separately from all other funds, shall hold such funds in a
fiduciary capacity in an account in the name of KEYPORT BENEFIT
and, within twenty (20) days, or within such lesser period as may
be required by law, shall account for such funds to KEYPORT
BENEFIT.
7. Commissions. KEYPORT BENEFIT, itself or through KEYPORT and
or KFSC as its agent, shall calculate and pay commissions to
KEYPORT or KFSC when such commissions are to be paid by KEYPORT or
KFSC on behalf of KEYPORT BENEFIT.
8. Claims and Other Policy Payments. KEYPORT shall provide all
claims and other policy payment services, including investigation,
adjustment and defense of claims arising from any KEYPORT BENEFIT
policy of insurance. KEYPORT shall make all claim and other policy
payments with respect to KEYPORT BENEFIT policies, including
payments representing claims, policy loans, surrenders, and amounts
paid under policy settlement options. In matters involving claim
decisions, KEYPORT claim personnel shall consult with KEYPORT
BENEFIT Officers in unusual situations involving disputed claims or
upon request of KEYPORT BENEFIT claim personnel; and provided
further, that Officers of KEYPORT BENEFIT shall monitor the KEYPORT
claims handling service and shall retain ultimate authority for
adjustment and claim payments made on its behalf. Claim payments
made by KEYPORT following such consultation shall be final and
conclusive.
9. Field Administration. KEYPORT shall provide those field
administration services, product development, advertising and sales
promotion services to KEYPORT BENEFIT as may be reasonably
requested by KEYPORT BENEFIT from time to time. All advertising
and sales material shall be reviewed and approved by KEYPORT
BENEFIT Officers prior to its use.
10. Information Systems. KEYPORT shall provide KEYPORT BENEFIT
with all information systems support, including but not limited to
programming, analysis, technical advice and operations support as
may be reasonably requested by KEYPORT BENEFIT from time to time.
11. Executive and Staff Services. KEYPORT shall provide those
executive, legal, clerical, human resources and other services as
may be reasonably requested by KEYPORT BENEFIT from time to time.
12. Functional Services. KEYPORT shall provide such actuarial,
financial, statistical, accounting and tax preparation and filing
services as may be reasonably requested by KEYPORT BENEFIT from
time to time.
13. Administration and Record-Keeping. KEYPORT shall provide
internal record-keeping and general office administration
incidental to or necessary for the proper rendering of services
performed under this Agreement. KEYPORT shall maintain: (i) books
and records relating to performance under this Agreement; and, (ii)
records and files relating to KEYPORT BENEFIT policies, which
materials will be available to KEYPORT BENEFIT and to properly
constituted governmental authorities, and which shall be in a form
so that, upon termination of this Agreement, they can be delivered
to KEYPORT BENEFIT or to another party at KEYPORT BENEFIT's
request. Records required to be produced for the NASD or SEC shall
be delivered in a satisfactory form within 14 days of a
sufficiently complete request therefor. The records shall be in
satisfactory form if they both: (i) meet relevant legal or
regulatory requirements, and (ii) are in a form approved by KEYPORT
BENEFIT. KEYPORT shall keep confidential and shall not disclose or
use any records or information obtained pursuant to this Agreement
except as expressly authorized or as expressly required by state or
federal law and/or regulations. In addition, KEYPORT BENEFIT shall
keep accounts and records as may be necessary in the conduct of its
business as an independent entity and shall own and have custody of
such accounts and records.
13. Investment Services. KEYPORT shall provide to KEYPORT BENEFIT
those investment advisory and investment accounting services
(including summary and detail accounting, general ledger entry for
all investment activity, and monthly accrual of investment income
and expenses, and preparation of annual statement schedules) as may
be reasonably requested from time to time. KEYPORT BENEFIT
nevertheless shall at all times have complete control and
management of its investable assets. KEYPORT BENEFIT shall
compensate KEYPORT for services performed under this paragraph
based on the fees reflected in Schedule A which is attached to this
Agreement. Compensation shall be paid to KEYPORT pursuant to
paragraph 15.
14. Compensation and Cost Allocation. Except for services
performed under paragraph 13, KEYPORT BENEFIT shall compensate
KEYPORT for services performed under this Agreement in amounts
determined under a cost allocation system developed by KEYPORT
based upon the percentage of time spent by KEYPORT personnel in
providing the services. The percentage allocation thus determined
by KEYPORT shall be applied to the salaries of, benefits accrued to
and expenses incurred by the KEYPORT personnel. The percentage
allocation for the first year shall be estimated. The percentage
allocation for each subsequent year shall be estimated based upon
the actual percentage allocation from the previous year. Such
estimates shall be adjusted at the end of each year to reflect the
actual percentage allocation. KEYPORT BENEFIT shall compensate
KEYPORT in full for the salaries, benefits and expenses of persons
hired by KEYPORT solely to perform services for KEYPORT BENEFIT
under this Agreement. All out-of-pocket expenses (including, for
example, printing costs, the costs of insurance department
examinations, travel expenses, direct data processing charges,
etc.) incurred on behalf of KEYPORT BENEFIT in performing services
under this Agreement shall be charged to KEYPORT BENEFIT at the
actual cost to KEYPORT.
15. General Accounting. KEYPORT shall deliver to KEYPORT BENEFIT
each month an itemized statement of all amounts owed to it by
KEYPORT BENEFIT for services rendered and expenses incurred during
the preceding month. KEYPORT BENEFIT shall pay all amounts owed
KEYPORT for the preceding month within 30 days following delivery
of the itemized statement. Any payments made after the 30 day
period shall bear interest at the then-current Prime Rate of
interest charged by the Chase Manhattan Bank of New York and shall
be payable on demand.
16. Office Space and Furniture. KEYPORT shall allocate and
provide to KEYPORT BENEFIT reasonably required office space and
furniture at rates and upon terms that are mutually agreed to by
KEYPORT and KEYPORT BENEFIT.
17. Competition. The operations of KEYPORT and KEYPORT BENEFIT
are designed to be generally complementary to each other and it is
therefore understood that neither is expected to be in any
substantial competition with the other. KEYPORT shall recognize
the proprietary nature of KEYPORT BENEFIT customer lists and shall
not utilize them for its own benefit, nor shall it disclose them to
others without KEYPORT BENEFIT's written consent.
18. Special Provisions For Servicing Variable Life Insurance and
Variable Annuities. To the extent that services rendered under
this Agreement relate to variable life insurance policies or
variable annuity contracts issued by a separate account of KEYPORT
BENEFIT, the following provisions shall apply:
a. KFSC shall assume full responsibility for the
securities activities of, and for securities law compliance
by, any "person associated" (as that term is defined in
Section 3(a)(18) of the Securities Exchange Act of 1934) with
KFSC and engaged directly or indirectly in the variable life
insurance or variable annuity business (the "associated
persons"). This shall include: (i) compliance with NASD Rules
of Fair Practice and with federal and state laws and
regulations; (ii) appropriate training of associated persons;
and (iii) the filing with the SEC, NASD and other appropriate
regulatory authorities of any sales literature or materials
required to be filed regarding sales of variable life
insurance policies and variable annuity contracts.
b. All books and records maintained in connection
with the offer and sale of the variable life insurance
policies or variable annuity contracts shall be: (i)
maintained and preserved in conformity with the requirements
of Rules 17a-3 and 17a-4 under the Securities Exchange Act of
1934; (ii) maintained and held on behalf of and as agent for
KFSC, whose property they are and shall remain; and (iii) at
all times subject to inspection by the SEC (within the United
States, within 14 days of request therefor) in accordance with
Section 17(a) of such Act.
c. Upon or prior to the completion of each
transaction for which a confirmation is legally required,
KEYPORT shall, on behalf of KFSC acting as agent for KEYPORT
BENEFIT separate accounts, send a written confirmation of all
such transactions reflecting the facts of each transaction.
d. This Agreement shall not relieve KEYPORT BENEFIT
from any responsibilities or obligations imposed upon the
operations of its variable life insurance or variable annuity
business by law or regulation.
e. KFSC shall be liable to KEYPORT BENEFIT for any
loss caused by its own negligence or misconduct in connection
with the services rendered under this Agreement.
19. Limitation of Liability. KEYPORT shall be liable to KEYPORT
BENEFIT for any loss caused by its own negligence or misconduct in
connection with the services rendered under this Agreement.
20. Termination. This Agreement shall be effective on the date
noted above and shall remain in full force and effect thereafter;
provided, however, that either party may terminate this Agreement
without penalty, with or without cause, on not less than ninety
(90) days notice to the other party; provided, further, that
KEYPORT's obligation under Section 19 of this Agreement shall
survive any termination.
21. Amendment. This Agreement may be amended at any time by a
writing executed by the parties.
22. Non-Assignment. This Agreement shall not be assigned by any
party without the prior written consent of the other parties.
23. Governing Law. This Agreement shall be interpreted in
accordance with and governed by the laws of the State of Rhode
Island.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first written above.
Keyport Life Insurance Company
By:
John W. Rosensteel
President
Keyport Benefit Life Insurance Company
By:
Paul H. LeFevre, Jr.
Executive Vice President
Keyport Financial Services Corp.
By:
James J. Klopper
Clerk
Schedule A
Investment Advisory Fees
KEYPORT BENEFIT Portfolio:
First $20 million .35 %
$20 million to $40 million .20 %
$40 million to $70 million .125%
Over $70 million .10 %
These fees are annualized, effective _____________________, 1998, and subject
to change by KEYPORT upon 30 days advance written notice.
_______________________________
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