As filed with the Securities and Exchange Commission on February 9, 1999
File No. 333-______
811-09227
Securities And Exchange Commission
Washington, D.C. 20549
Form N-4
Registration Statement Under The Securities Act Of 1933 [X]
Pre-Effective Amendment No.
[ ]
Post Effective Amendment No.
[ ]
and/or
Registration Statement Under The Investment
Company Act Of 1940
[X]
Amendment No.
Allstate Life Insurance Company Separate Account A
(Exact Name of Registrant)
Allstate Life Insurance Company
(Name of Depositor)
Allstate Life Insurance Company
3100 Sanders Road
Northbrook, Illinois 60062
(Address of Depositor's Principal Offices)
847/402-2400
(Depositor's Telephone Number, Including Area Code)
Michael J. Velotta
Vice President, Secretary And General Counsel
Allstate Life Insurance Company
3100 Sanders Road
Northbrook, Illinois 60062
847/402-2400
(Name and Complete Address of Agent for Service)
Copy to:
Richard T. Choi, Esquire
Freedman, Levy, Kroll & Simonds
1050 Connecticut Avenue, N.W.
Suite 825
Washington, D.C. 20036-5366
Approximate date of proposed public offering: As soon as practicable after the
effective date of the registration statement.
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 shall become effective on such
date as the Commission, acting pursuant to Section 8(a), may determine.
Title of Securities Being Registered: Units of interest in the Allstate Life
Insurance Company Separate Account A under deferred variable annuity
contracts.
<PAGE>
ALLSTATE VARIABLE ANNUITY
Offered By
ALLSTATE LIFE INSURANCE COMPANY
THROUGH ITS SEPARATE ACCOUNT A
3100 Sanders Road
Northbrook, Illinois 60062
1-800/xxx-xxxx
This prospectus describes the "Allstate Variable Annuity," a flexible premium
deferred variable annuity contract ("contract") offered by Allstate Life
Insurance Company ("Allstate"). This prospectus contains important information
about the contract. Please read it and keep it for future reference.
The contract offers __ investment alternatives including three fixed account
options that offer an interest rate guaranteed by Allstate and ___ subaccounts
that invest in the corresponding mutual fund portfolios ("funds") listed below.
The __ funds are portfolios of the ___________________ Trust. You can put your
money in any of these investment alternatives (except as noted).
(fund information to be inserted)
We have filed a Statement of Additional Information ("SAI"), dated May 1, 1999,
with the Securities and Exchange Commission ("SEC"). The SAI contains more
information about the contract and is legally a part of the prospectus. The SEC
maintains a Web site (http://www.sec.gov) that contains the SAI, material
incorporated by reference, and other information regarding registrants that file
electronically with the SEC. The Table of Contents of the SAI is on page __of
this prospectus. For a free copy of the SAI, call us at (800) xxx-xxxx or write
us at: P.O. Box xxxx, Palatine, Illinois 60xxxx.
THE CONTRACTS MAY BE DISTRIBUTED THROUGH BROKER-DEALERS WHICH HAVE RELATIONSHIPS
WITH BANKS OR OTHER FINANCIAL INSTITUTIONS OR BY EMPLOYEES OF SUCH BANKS;
HOWEVER, THE CONTRACTS AND THE INVESTMENTS IN THE VARIABLE ACCOUNT ARE NOT
DEPOSITS, OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY ANY BANK, AND THE ARE
NOT FEDERALLY INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. INVESTMENT
IN THE CONTRACTS INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
THE SEC HAS NOT APPROVED OR DISAPPROVED THE SECURITIES DESCRIBED IN THIS
PROSPECTUS NOR HAS IT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING A FEDERAL CRIME.
The date of this prospectus is May 1, 1999
<PAGE>
TABLE OF CONTENTS Page
DEFINITIONS
SUMMARY
FEE TABLE
CONDENSED FINANCIAL INFORMATION
1. THE ANNUITY CONTRACT
2. PURCHASE
Purchase Payments
Allocation of Purchase Payments
Accumulation Units
Free Look
3. INVESTMENT ALTERNATIVES
Funds
Fixed Account Options
Transfers
Dollar Cost Averaging Program
Automatic Fund Rebalancing Program
Voting Rights
Substitution
4. EXPENSES
Insurance Charges
Contract Maintenance Charge
Withdrawal Charge
Premium Taxes
Transfer Fee
Fund Expenses
5. ACCESS TO YOUR MONEY
Systematic Withdrawal Program
6. PERFORMANCE
7. DEATH BENEFIT
Distribution Upon Death Payment Provisions
Death Benefit Amount
8. INCOME PAYMENTS (THE PAYOUT PHASE)
Retirement Income Guarantee Options
9. TAXES
Introduction
Taxation of Annuities in General
Tax Qualified Contracts
Income Tax Withholding
<PAGE>
10. OTHER INFORMATION
Allstate
The Variable Account
Distributor
Ownership
Beneficiary
Assignment
Suspension of Payments or Transfers
Modification
Year 2000
Financial Statements
TABLE OF CONTENTS OF THE STATEMENT OF
ADDITIONAL INFORMATION
ORDER FORM
<PAGE>
DEFINITIONS
Accumulation Unit: A measure of your ownership interest in a subaccount of the
variable account prior to the payout start date.
Accumulation Unit Value: The value of each accumulation unit that we calculate
each valuation date. Each subaccount of the variable account has its own
accumulation unit value.
Annuitant(s): The person or persons whose life determines the latest payout
start date and the amount and duration of any income payments for income plan
options other than the guaranteed payments for a specified period option. Joint
annuitants are only permitted on or after the payout start date. Joint
annuitants may be permitted prior to the payout start date at Allstate's
discretion.
Beneficiary(ies): The person(s) to whom any benefits are due when a death
benefit is payable and there is no surviving owner.
Company: Allstate Life Insurance Company ("Allstate").
Contract: The Allstate Life Insurance Company Flexible Premium Deferred Variable
Annuity Contract, known as the "Allstate Variable Annuity," that is described in
this prospectus.
Contract Anniversary: An anniversary of the date that the contract was issued.
Contract Value: The value of all amounts accumulated under the contract prior to
the payout start date, equivalent to the accumulation units in each subaccount
of the variable account multiplied by the respective accumulation unit value,
plus the value in the fixed account options.
Contract Year: A period of 12 months starting with the issue date or any
contract anniversary.
Enhanced Beneficiary Protection Rider: An additional death benefit option which
can be selected (at additional charge).
Fixed Account: All of the assets of Allstate that are not in separate accounts.
Income Plan: One of several ways to receive income payments after the payout
start date. Income payments are based on the contract value adjusted by any
taxes on the payout start date. Income payment amounts may vary based on any
subaccount and/or may be fixed for the duration of the income plan.
Investment Alternatives: The subaccounts of the variable account and the three
fixed account options.
Non-Qualified Contracts: Contracts other than qualified contracts.
Owner(s)("You"): The person or persons designated as the owner in the contract.
Payout Start Date: The date on which income payments begin.
Qualified Contracts: Contracts issued under plans that qualify for special
federal income tax treatment under Sections 401(a), 403(a), 403(b), 408A and 408
of the Internal Revenue Code.
Retirement Income Guarantee Riders: Optional riders you can select that
guarantee a minimum amount to be applied to an income plan (at additional
charge).
Rider Date: The date of issue of any rider under the contract.
Settlement Value: The contract value less any applicable withdrawal charge,
contract maintenance charge, and premium tax. The settlement value will be
calculated at the end of a valuation period coinciding with a request for
payment.
Subaccount: A portion of the variable account invested in shares of a
corresponding fund. The investment performance of each subaccount is linked
directly to the investment performance of its corresponding fund.
Valuation Date: Each day that the New York Stock Exchange is open for business.
The valuation date does not include such Federal and non-Federal holidays as are
observed by the New York Stock Exchange.
Valuation Period: The period between successive valuation dates, commencing at
the close of regular trading on the New York Stock Exchange (which is normally
4:00 pm Eastern Time) and ending as of the close of regular trading on the New
York Stock Exchange on the next succeeding valuation date.
Variable Account: Allstate Life Insurance Company Separate Account A, a separate
investment account established by Allstate to receive and invest purchase
variable account payments paid under the contracts.
SUMMARY
The sections in this summary correspond to sections in this prospectus that
discuss the topics in more detail.
1. THE ANNUITY CONTRACT:
The Allstate Variable Annuity contract is a contract between you, the owner, and
Allstate, an insurance company. The contract provides a means for investing on a
tax deferred basis in ___ subaccounts and three fixed account options. The
contract is intended for retirement savings or other long-term investment
purposes and provides for a death benefit and guaranteed income options.
The contract offers __ subaccounts that invest in the funds listed on the cover
of this prospectus. The subaccounts may offer a better return than the fixed
account. However, this is NOT guaranteed. You also can lose your money by
investing in the subaccounts. The fixed account options offer an interest rate
that Allstate guarantees. While your money is in the fixed account, we guarantee
both the interest your money will earn as well as your principal.
You can put money into any or all of the subaccounts (except as noted) and the
fixed account options. You can transfer among the subaccounts up to 12 times a
year without charge. After the 12 transfers, the charge is 0.50% of the amount
transferred.
The contract, like all deferred annuity contracts, has two phases: the
accumulation phase and the payout phase. During the accumulation phase, earnings
accumulate on a tax deferred basis and are taxed as income when you make a
withdrawal. The payout phase occurs when you begin receiving regular payments
from your contract.
The amount of money you are able to accumulate in your account during the
accumulation phase will determine the amount of income payments during the
payout phase.
2. PURCHASE:
You can buy a contract with a minimum payment of $1,000 ($500 minimum for tax
qualified contracts). You can add $500 or more any time you like during the
accumulation phase ($50 minimum for automatic additions). Your registered
representative can help you fill out the proper forms.
3. INVESTMENT ALTERNATIVES:
You can put your money in any or all of these investment alternatives:
Funds:
(fund information to be inserted)
Fixed Account Options:
o Standard Fixed Account
o Six month Dollar Cost Averaging Fixed Account
o Twelve month Dollar Cost Averaging Fixed Account
4. EXPENSES:
The contract has insurance features and investment features, and there are costs
related to each.
Each year, on the contract anniversary, Allstate deducts a $30 annual contract
fee from your contract. During the accumulation phase, Allstate waives this
charge if the value of your contract is greater than $50,000 or if you have
allocated all of your money to the fixed account options on the contract
anniversary. During the payout phase, we will deduct the $30 charge equally from
each income payment. We will also waive the charge if the contract value on the
payout start date is $50,000 or more or if all payments are fixed amount income
payments.
Allstate deducts for its insurance charges a total of 1.25% of the average daily
value of your contract allocated to the subaccounts. An additional insurance
charge of 0.15% applies if you elect the optional enhanced beneficiary
protection rider.
If you elect an optional retirement income guarantee rider, on each contract
anniversary prior to the payout start date, Allstate will deduct a charge equal
to 0.05% for rider 1 or 0.30% for rider 2, multiplied by the income base in
effect on that contract anniversary.
If you withdraw your money, Allstate may assess a withdrawal charge of up to 7%,
of the purchase payment(s) you withdraw. The charge declines to 0% over a 7 year
period beginning on the day we receive each purchase payment. When you begin
receiving regular income payments from your annuity, Allstate will assess a
state premium tax charge, if applicable, which ranges from 0% - 4% depending
upon your state.
You can make 12 transfers every year during the accumulation phase without
charge. We measure a year from the anniversary of the day we issued your
contract. If you make more than 12 transfers in one year, we will deduct a
transfer fee for each subsequent transfer. The fee is 0.50% of the amount
transferred.
There are also fund expenses that currently range from __% to 1._% of the
average daily value of the selected fund.
5. ACCESS TO YOUR MONEY:
You can take money out at any time during the accumulation phase. During each
contract year, you can take out up to the greater of earnings not previously
withdrawn or 15% of your total purchase payments without charge from Allstate.
Withdrawals in excess of that will be subject to a declining seven year
withdrawal charge schedule ranging from 7% to 0% of each payment you take out.
Each purchase payment you add to your contract has its own seven year withdrawal
charge period. After Allstate has had a payment for seven years, there is no
charge for withdrawing that payment. Of course, you also may have to pay income
tax and a tax penalty on money you take out.
6. PERFORMANCE:
The value of the contract will vary up or down depending upon the investment
performance of the subaccount(s) you choose. Allstate provides performance
information in the Statement of Additional Information. Past performance is not
a guarantee of future results.
7. DEATH BENEFIT:
If the owner or the annuitant dies before the payout phase, any surviving
owner(s) or, if none, the person you have chosen as your beneficiary is eligible
to receive a death benefit.
8. ANNUITY PAYMENTS (THE PAYOUT PHASE):
If you want to receive regular income from your annuity, you can choose one of
three income options. Once you begin receiving regular payments, you cannot
change your payment plan. At the beginning of the payout phase, you can choose
to have payments come from the fixed account, the subaccounts or both. If you
choose to have any part of your payments come from the subaccounts, the dollar
amount of your payments may go up or down. Allstate also offers two retirement
income guarantee options which will allow you to lock in a dollar amount which
can be applied to a fixed income option.
9. TAXES:
Your earnings are not taxed until you take them out. If you take money out
during the accumulation phase, earnings come out first and are taxed as income.
If you are younger than 59 1/2 when you take money out, you may have to pay a
10% federal income tax penalty on the earnings. Payments during the payout phase
are considered partly a return of your original investment. That part of each
payment is not taxable as income.
10. OTHER INFORMATION:
Free Look. If you cancel the contract within 20 days after receiving it (or
longer if required by state law), we will send your money back without assessing
a withdrawal charge. You will receive whatever your contract is worth on the day
we receive your request. This may be more or less than your original payment. If
in a particular state we are required by law to return your original payment, we
reserve the right to put your money in the money market subaccount during the
free look period.
No Probate. In most cases, when you die, the person you choose as your
beneficiary will receive the death benefit without going through probate.
Who should purchase the contract? We designed the contract for people seeking
long-term tax deferred accumulation of assets, generally for retirement or other
long-term purposes. The tax deferred feature is most attractive to people in
high federal and state tax brackets. You should not buy a contract if you are
looking for a short-term investment or if you cannot take the risk of getting
back less money than you put in.
Additional Features. The contract has additional features you might be
interested in. For example:
o You can arrange to have money automatically sent to you each month while
your contract is still in the accumulation phase. Of course, you'll have to
pay taxes on money you receive. We call this feature the systematic
withdrawal program.
o You can arrange to have a regular amount of money automatically invested in
the subaccounts each month, theoretically giving you a lower average cost
per unit over time than a single one time purchase. We call this feature
dollar cost averaging.
o You can arrange to automatically readjust the money among the subaccounts
periodically to keep the blend you select. We call this feature automatic
rebalancing.
o Under certain circumstances, Allstate will give you your money without a
withdrawal charge if you need it while you're in a nursing home. We call
this feature the nursing home waiver.
o Under certain circumstances, Allstate will give you your money without a
withdrawal charge if you are diagnosed with a terminal illness. We call
this feature the terminal illness waiver.
o Under certain circumstances, Allstate will give you your money without a
withdrawal charge if you become unemployed. We call this feature the
unemployment waiver.
These features may not be suitable for your particular situation and may not be
available in all states.
11. INQUIRIES:
If you need more information, please contact us at:
Allstate Life Insurance Company
P.O. Box xxxx
Palatine, IL xxxxx
1-800/xxx-xxxx
<PAGE>
FEE TABLE
Owner Transaction Expenses (all subaccounts)
Sales Load Imposed on Purchases (as a percentage of purchase None
payments)......................................................
Contingent Deferred Sales Charge (as a percentage of purchase *
payments)......................................................
Applicable Year Since Withdrawal
Purchase Payment Accepted Charge Percentage
------------------------------------------------------------ -----------------
1st Year................................................... 7%
2nd Year................................................... 7%
3rd Year................................................... 6%
4th Year................................................... 5%
5th Year................................................... 4%
6th Year................................................... 3%
7th Year................................................... 2%
Thereafter................................................. 0%
Transfer Fee............................................... **
Annual Contract Fee........................................ $ 30***
Variable Account Annual Expenses (as a percentage of the
contract's average net assets in the variable account):
Mortality and Expense Risk Charge.......................... 1.25%****+
Retirement Income Guarantee Annual Charge (multiplied by the
income base in effect on contract anniversary):
Rider 1 0.05%
Rider 2 0.30%
- ----------
* During each contract year, you can take out up to the greater of earnings
not previously withdrawn or 15% of your total purchase payments without
charge from Allstate.
** If you make more than 12 transfers per year, for each subsequent transfer,
we will deduct a transfer fee of 0.50% of the dollar amount transferred.
*** During the accumulation phase, we will waive the annual contract fee if the
total account value as of a contract anniversary is $50,000 or more, or if
the entire contract value is allocated to the fixed account options. During
the payout phase, different restrictions may apply. Please see your
contract for further details.
**** If you select the enhanced beneficiary protection rider, the mortality and
expense risk charge will equal on an annual basis 1.40% (rather than 1.25%)
of the daily net assets of the variable account.
+ For amounts allocated to the variable account, we assess the mortality and
expense risk charge during both the accumulation and the payout phases of
the contract.
Fund Expenses (as a percentage of the average daily net assets of a fund):
Other Expenses
(after expense Total Annual
Management 12b-1 reimbursement for Fund
Fee Fees certain Funds) Expenses
- ---------- ----- ----------------- ------------
(fund information to be inserted)
Example:
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return on assets:
upon surrender at the end of each time period:
Time Periods
1 year 3 years
------ -------
(fund information to be inserted)
if you do not surrender or if you elect to receive income payments:
Time Periods
1 year 3 years
------ -------
(fund information to be inserted)
The purpose of the Fee Table is to show you the various expenses you will incur
directly or indirectly with the contract. The Fee Table reflects expenses of the
variable account as well as the funds. The Fee Table does not reflect premium
taxes. Premium taxes may apply depending on the state where you reside. The
assumed average contract size is $30,000. You should not consider the examples
to be a representation of past or future expenses. Actual expenses may be
greater or less than those shown.
CONDENSED FINANCIAL INFORMATION
The offering of the contracts commenced as of the date of this prospectus.
Accordingly, there are no accumulation unit values to report for the contracts.
1. THE ANNUITY CONTRACT
The Allstate Variable Annuity is an annuity contract that you can use to save
for retirement and then receive an income, in the form of annuity payments,
beginning on a designated date that is at least 30 days after you purchase the
annuity. Until you decide to begin receiving annuity payments, your contract is
in the accumulation phase. Once you begin receiving annuity payments, your
contract is in the payout phase.
The contract benefits from tax deferral. Tax deferral means that you are not
taxed on any earnings on the assets in your contract until you take money out of
your contract.
The contract is called a variable annuity because you can choose among __
subaccounts that invest in corresponding funds. Depending upon market
conditions, you can make or lose money in any of these subaccounts. If you
select a subaccount, the amount of money you accumulate in your contract during
the accumulation phase will depend upon the investment performance of the
subaccounts you select. Similarly, the amount of the annuity payments you
receive during the payout phase will depend upon the investment performance of
the subaccounts you select for the payout phase.
The contract also offers three fixed account options. Each fixed account option
offers an interest rate that Allstate guarantees. Allstate guarantees that the
interest credited to the fixed account will not be less than 3% per year. If you
select one of the fixed account options, your money will be placed with the
other general assets of Allstate, and the amount of money you accumulate in the
fixed account option during the accumulation phase will depend upon the total
interest we credit to your contract. In addition, the amount of the annuity
payments you receive during the payout phase will remain level for the entire
payout phase.
As owner of the contract, you exercise all rights under the contract. You can
change the owner at any time by notifying Allstate in writing. We have described
more information on this topic in Section 10 Other Information.
We may issue the contracts as individual contracts or as group contracts. In
states where the contracts are available only as group contracts, we will issue
a certificate that summarizes the provisions of the group contract. For
convenience, this prospectus refers to both contracts and certificates as
"contracts."
For contracts issued to employees of Allstate and certain other eligible
organizations, and in lieu of Allstate paying any commissions, the contract
owner will receive a credit of 6% of the amount of each purchase payment that
will be applied to each purchase payment. Allstate will allocate this credit in
the same allocation as your most recent instruction. The amount returned to you
upon a free look of the contract will be reduced by the amount of any credit.
The credit may not be available in all states. We do not consider the credit to
be an "investment in the contract" for income tax purposes.
2. PURCHASE
Purchase Payments
A purchase payment is the money you give us to buy the contract. The minimum we
will accept is $1,000 when you buy the contract as a non-qualified contract. If
you are buying the contract as part of an IRA (Individual Retirement Annuity),
or other qualified plan, the minimum we will accept is $500. The maximum we
accept is $1 million without our prior approval. You can make additional
purchase payments of $500 or more to either type of contract ($50 minimum for
automatic additions).
Allocation of Purchase Payments
When you purchase a contract, we will allocate your purchase payment to the
subaccounts and/or any fixed account options you have selected. If you make
additional purchase payments, we will allocate them in the same way as your
first purchase payment unless you tell us otherwise.
Once we receive your purchase payment and the necessary information, we will
issue your contract and allocate your first purchase payment within 2 business
days. If you do not give us all of the information we need, we will contact you.
If for some reason we are unable to complete this process within 5 business
days, we will either send back your money or get your permission to keep it
until we get all of the necessary information. If you make additional purchase
payments, we will credit these amounts to your contract within one business day.
Our business day closes when the New York Stock Exchange closes, usually 4:00
P.M. Eastern time.
Accumulation Units
The value of the variable annuity portion of your contract will go up or down
depending upon the investment performance of the subaccount(s) you choose. To
keep track of the value of your contract, we use a unit of measure we call an
"accumulation unit". (An accumulation unit works like a share of a mutual fund.)
During the payout phase of the contract we use a similar unit of measure we call
an "annuity unit."
Every day we determine the value of an accumulation unit for each subaccount. We
do this by:
1. determining the total amount of money invested in the particular
subaccount;
2. subtracting from that amount any insurance charges and any other charges
such as taxes we have deducted; and
3. dividing this amount by the number of outstanding accumulation units.
The value of an accumulation unit may go up or down from day to day.
When you make a purchase payment, we credit your contract with accumulation
units. To determine the number of accumulation units to credit, we divide the
amount of the purchase payment allocated to a subaccount by the value of the
accumulation unit for that subaccount.
We calculate the value of an accumulation unit for each subaccount after the New
York Stock Exchange closes each day and then credit your contract.
Free Look
If you change your mind about owning your contract, you can cancel it within 20
days after receiving it, or longer if required by state law. When you cancel the
contract within this time period, Allstate will not assess a withdrawal charge.
Unless a refund of purchase payment is required by law, Allstate will refund any
purchase payments allocated to the variable account, adjusted to reflect any
gain or loss from the date of allocation to the date of cancellation, plus any
purchase payments allocated to the fixed account options. During the free look
period, we reserve the right to put your purchase payment in the money market
subaccount.
3. INVESTMENT ALTERNATIVES
The contract currently offers ___ subaccounts and three fixed account options.
Additional subaccounts may be available in the future. Each subaccount invests
in a corresponding fund.
YOU SHOULD READ THE PROSPECTUS FOR THE FUNDS CAREFULLY BEFORE INVESTING. A COPY
OF THE PROSPECTUS IS ATTACHED TO THIS PROSPECTUS.
Variable Funds:
(fund information to be inserted)
Fixed Account Options:
o Standard Fixed Account
o Six month Dollar Cost Averaging Fixed Account
o Twelve month Dollar Cost Averaging Fixed Account
Funds
(fund information to be inserted)
Shares of the funds may be offered in connection with certain variable annuity
contracts and variable life insurance policies of various life insurance
companies that may or may not be affiliated with Allstate. Certain funds may
also be sold directly to qualified plans. The funds do not believe that offering
their shares in this manner will be disadvantageous to you.
Allstate may enter into certain arrangements under which it is reimbursed by the
funds' advisors, distributors and/or affiliates for the administrative services
that it provides to the funds.
Fixed Account Options
Monies you allocate to any fixed account option become part of the general
account of Allstate, which supports Allstate's insurance and annuity
obligations. Instead of you bearing the investment risk, as is the case for
amounts in the variable account, Allstate bears the investment risk for all
amounts in any fixed account option. The interest rates for the fixed account
options will never be less than 3%. Currently, Allstate offers three fixed
account options.
Standard Fixed Account
Monies you allocate to the standard fixed account will earn interest at the
current rate in effect at the time of allocation or transfer to the standard
fixed account for the duration of the guarantee period. Allstate currently
offers a one year guarantee period. Allstate may offer additional guarantee
periods. After the initial guarantee period, we will guarantee a renewal rate.
Six Month Dollar Cost Averaging Fixed Account
Monies you allocate to the six month dollar cost averaging fixed account will
earn interest at the current rate in effect at the time of allocation. Each
purchase payment and accrued interest must be transferred to one or more
subaccounts that you select in equal monthly installments within a six month
transfer period. You cannot transfer money from another fixed account option or
from a subaccount into the six month dollar cost averaging fixed account.
Twelve Month Dollar Cost Averaging Fixed Account
Monies you allocate to the twelve month dollar cost averaging fixed account will
earn interest at the current rate in effect at the time of allocation. Each
purchase payment and accrued interest must be transferred to one or more
subaccounts that you select in equal monthly installments within a twelve month
transfer period. You cannot transfer money from another fixed account option or
from a subaccount into the twelve month dollar cost averaging fixed account.
There may be certain restrictions on dollar cost averaging based upon state law.
Please consult your sales representative for information regarding the
availability these fixed account options in your state.
Transfers
Prior to the payout start date, you can transfer money among the subaccounts and
the fixed account options subject to the following restrictions:
o You may not transfer money into the six month or twelve month dollar cost
averaging fixed accounts.
o The maximum amount you can transfer from the standard fixed account during
any contract year is the greater of 30% of the standard fixed account
balance as of the last contract anniversary or the greatest dollar amount
of any prior transfer from the standard fixed account. This limitation does
not apply to dollar cost averaging.
o If any interest rate is renewed at a rate at least one percentage point
less than the previous rate, you may elect to transfer up to 100% of the
monies receiving that reduced rate within 60 days of the notification of
the interest rate decrease.
o Allstate reserves the right to defer transfers from the standard fixed
account for up to six months from the date of the request.
o Allstate reserves the right to limit the number of transfers in any
contract year or to refuse any transfer request for any owner or certain
owners, in our sole discretion if:
o We believe that excessive trading by such owner or owners or a
specific transfer request or group of transfer requests may have a
detrimental effect on unit values of the subaccounts or the share
prices of the funds or would be to the disadvantage of other contract
owners; or
o One or more of the funds informs us that (a) the funds would restrict
the purchase or redemption of shares because of excessive trading or
(b) the funds believe that a specific transfer or group of transfers
would have a detrimental effect on share prices of the funds.
o You can make transfers by telephone. If you own the contract with a joint
owner, unless Allstate receives contrary instructions, Allstate will accept
instructions from either you or the other owner. Allstate will use
reasonable procedures to confirm that instructions given us by telephone
are genuine. If Allstate fails to use such procedures, we may be liable for
any losses due to unauthorized or fraudulent instructions. Allstate tape
records all telephone instructions.
o You can make 12 transfers every year during the accumulation phase without
charge. We measure a year from the anniversary of the day we issued your
contract. If you make more than 12 transfers in one contract year, we will
deduct a transfer fee. The fee is 0.50% of the amount transferred.
o For a subaccount and the standard fixed account, the minimum amount that
you can transfer is $100 or, if less, the remaining value of your
investment in the subaccount or standard fixed account.
o During the payout phase, you can only make transfers among the subaccounts
once every six months. You cannot transfer from a fixed amount income
payment to a subaccount, but you can transfer from one or more subaccounts
to a fixed amount income payment if income plan 3 is in effect and the
transfer occurs six months after the payout start date.
Allstate reserves the right to terminate or modify the transfer provisions
described above.
Dollar Cost Averaging Program
The dollar cost averaging program allows you to systematically transfer a set
amount each month from any subaccount or fixed account option to any of the
other subaccounts. By allocating amounts on a regular schedule as opposed to
allocating the total amount at one particular time, you may be less susceptible
to the impact of market fluctuations. The dollar cost averaging program is
available only during the accumulation phase.
The transfers made under the program do not count towards the 12 transfers you
can make without paying a transfer fee.
Automatic Rebalancing Program
Once your money has been allocated among the subaccounts, the performance of
each subaccount may cause your allocation to shift. You can automatically
rebalance your contract and return it to your original percentage allocations by
selecting our automatic rebalancing program. You can tell us whether to
rebalance quarterly, semi-annually or annually. We will measure these periods
from the anniversary of the date we issued your contract. The transfer date will
be the first day after the end of the period you selected. The automatic
rebalancing program is available only during the accumulation phase. If you
participate in this program, the transfers made under the program do not count
towards the 12 transfers you can make without paying a transfer fee.
Example:
Assume that you want your initial purchase payment split among 2
subaccounts. You want 40% to be in the Bond subaccount and 60% to be in
the Stock subaccount. Over the next 2 months the bond market does very
well while the stock market performs poorly. At the end of the first
quarter, the Bond subaccount now represents 50% of your holdings because
of its increase in value. If you had chosen to have your holdings
rebalanced quarterly, on the first day of the next quarter, Allstate
would sell some of your units in the Bond subaccount and use the money to
buy more units in the Stock subaccount so that the percentage allocations
would again be 40% and 60% respectively.
Voting Rights
Allstate is the legal owner of the fund shares held by the subaccounts. However,
Allstate believes that when a fund solicits proxies in conjunction with a vote
of shareholders, it is required to obtain from you and other owners instructions
as to how to vote those shares. When we receive those instructions, we will vote
all of the shares we own in proportion to those instructions. Should Allstate
determine that it is no longer required to comply with the above, we will vote
the shares in our own right.
Substitution
Allstate may be required to substitute one of the funds you have selected with
another fund. We would not do this without the prior approval of the SEC. We
will give you notice of our intent to do this.
4. EXPENSES
There are charges and other expenses associated with the contracts that reduce
the return on your investment in the contract. These charges and expenses
include:
Insurance Charge
Each day, Allstate makes a deduction for its insurance charge. Allstate does so
as part of its calculation of the value of the accumulation units and the
annuity units.
Mortality and Expense Risk Charge. This charge is equal, on an annual basis, to
1.25% of the daily value of the assets you have invested in the variable
account. This charge is for all the insurance benefits available with your
contract (e.g., guarantee of annuity rates and the death benefits), for certain
expenses of the contract, and for assuming the risk (expense risk) that the
current charges will be sufficient in the future to cover the cost of
administering the contract. If the charges under the contract are not
sufficient, then Allstate will bear the loss.
If you select the enhanced beneficiary protection rider, Allstate will deduct a
mortality and expense risk charge equal, on an annual basis, to 1.40% of the
daily value of the assets you have invested to the variable account (1.25% plus
0.15% for the rider). Allstate reserves the right to change the enhanced
beneficiary protection rider charge. Once your rider is issued, Allstate cannot
change your rider fee. The charge for this rider will never exceed 0.25%.
See Section 9 of this prospectus for a description of the charge for the
retirement income guarantee riders.
Contract Maintenance Charge
During the accumulation phase, every year on the anniversary of the date when we
issued your contract, Allstate will deduct $30 from your contract as a contract
maintenance charge. The charge is for administrative expenses. We cannot
increase the charge. We will deduct the charge from the money market subaccount.
If there are insufficient assets in the money market subaccount, we will deduct
the charge proportionally from the remaining subaccounts of the variable
account. We will deduct the charge from the subaccounts of the variable account.
Allstate will not deduct the charge during the accumulation phase if, when the
deduction is to be made, the value of your contract is $50,000 or more or if all
your money is allocated to the fixed account options on the contract
anniversary. During the payout phase, we will deduct the $30 charge
proportionally from each income payment. We will waive the charge if the
contract value on the payout start date is $50,000 or more or if all payments
are fixed income payments. Allstate also reserves the right to waive this charge
if you own more than one contract and the contracts meet certain minimum dollar
amount requirements.
If you make a complete withdrawal from your contract, we will deduct the
contract maintenance charge at that time as well.
Withdrawal Charge
During the accumulation phase, you can make withdrawals from your contract.
Allstate keeps track of each purchase payment. During each contract year, you
can withdraw up to the greater of earnings not previously withdrawn or 15% of
your total purchase payments without charge from Allstate. Otherwise, the
withdrawal charge for each payment will range from 7% - 0% over 7 years. For
purposes of the withdrawal charge, Allstate treats withdrawals as coming from
the oldest purchase payment first.
NOTE: For tax purposes, withdrawals are considered to have come from the last
money into the contract. Thus, for tax purposes, earnings are considered to come
out first.
Nursing Home Waiver
Allstate will waive any withdrawal charge on any withdrawal taken prior to the
payout start date if at least 30 days after the contract date any owner, or
annuitant if the owner is not a living individual:
o is first confined to a long term care facility or hospital for at least 90
consecutive days;
o confinement is prescribed by a physician and is medically necessary; and
the request for a withdrawal and adequate written proof of confinement are
received by us no later than 90 days after discharge.
Terminal Illness Waiver
Allstate will waive any withdrawal charge on any withdrawal taken prior to the
payout start date if at least 30 days after the contract date any owner, or any
annuitant if the owner is not a living individual, is first diagnosed by a
physician as having a terminal illness, as defined in the contract.
Unemployment Waiver
Allstate will permit a one time waiver of any withdrawal charge on a partial or
full withdrawal taken prior to the payout start date if: the owner, or, if the
owner is not a living individual, the annuitant:
o becomes unemployed at least one year after the contract date;
o the owner, or, if the owner is not a living individual, the annuitant,
receives at least 30 consecutive days of unemployment compensation, as
defined in the contract, for that unemployment; and,
o the owner, or, if the owner is not a living individual, the annuitant,
request the waiver within 180 days of the owner's, or, if the owner is not
a living individual, the annuitant's, initial receipt of unemployment
compensation, as defined in the contract.
The laws of your state may limit the availability of these waivers and may also
change certain terms and/or benefits available under the waivers. You should
consult your contract for further details on these variations. Allstate also
will waive the withdrawal charge on withdrawals taken from qualified contracts
to satisfy IRS required minimum distribution rules for the contract.
Premium Taxes
Some states and other governmental entities (e.g., municipalities) charge
premium taxes or similar taxes. Allstate is responsible for the payment of these
taxes and will deduct them from the value of the contract. Some of these taxes
are due when the contract is issued, others are due when income payments begin
or upon surrender. It is Allstate's current practice to not charge anyone for
these taxes until income payments begin or the contract is terminated. Allstate
may some time in the future discontinue this practice and assess the charge when
the tax is due. Premium taxes generally range from 0% to 4%, depending on the
state.
Transfer Fee
You can make 12 free transfers every year. We measure a year from the day we
issue your contract. If you make more than 12 transfers in any one year, for
each subsequent transfer, we will deduct a transfer fee of 0.50% of the dollar
amount transferred.
If the transfer is part of the dollar cost averaging program or the automatic
rebalancing program, it will not count in determining the number of free
transfers.
Fund Expenses
The deductions from and expenses paid out of the assets of the various funds
are described in the attached prospectus for the funds.
5. ACCESS TO YOUR MONEY
You can access the money in your contract:
(1) by making a withdrawal (either a partial or a complete withdrawal); or
(2) by electing to receive income payments. Under most circumstances,
withdrawals can only be made during the accumulation phase.
When you make a complete withdrawal you will receive the value of the contract
on the day you made the withdrawal less any applicable withdrawal charge, less
any premium tax and less any contract maintenance charge (see - Section 4.
"Expenses" for a discussion of the charges).
Unless you instruct Allstate otherwise, we will deduct any partial withdrawal
proportionately from all the subaccounts and the fixed account option(s) you
selected. Under most circumstances the amount of any partial withdrawal must be
at least $50. If the contract value after a partial withdrawal would be less
than $1,000, Allstate will treat the request as one for termination of the
contract and will pay out the entire contract value, less any charges and
premium taxes.
Withdrawals may reduce the amount of the death benefit (see Section 8. "Death
Benefits").
INCOME TAXES, TAX PENALTIES AND CERTAIN RESTRICTIONS MAY APPLY TO ANY WITHDRAWAL
YOU MAKE.
Systematic Withdrawal Program
The systematic withdrawal program provides an automatic payment to you on a
monthly, quarterly, semi-annual or annual basis. INCOME TAXES MAY APPLY TO
SYSTEMATIC WITHDRAWALS.
6. PERFORMANCE
Allstate periodically advertises the performance of the subaccounts. Allstate
will calculate performance (i.e., the percentage change in the value of an
accumulation unit) by dividing the increase (decrease) for that unit by the
value of the accumulation unit at the beginning of the period. This performance
number would reflect the deduction of the insurance charges, but not the
deduction of any applicable contract maintenance charge or withdrawal charge.
The deduction of any applicable contract maintenance charge and withdrawal
charges would reduce the percentage increase or make greater any percentage
decrease. Any advertisement also will include total return figures that reflect
the deduction of the insurance charges, contract maintenance charges, and
withdrawal charges.
For periods starting prior to the date the contracts were first offered, the
performance will be based on the historical performance of the corresponding
funds for the periods commencing from the inception dates of the funds. You
should not interpret these figures to reflect actual historical performance of
the variable account.
Allstate also may include in its advertising and sales materials tax deferred
compounding charts and other hypothetical illustrations, which may include
comparisons of currently taxable and tax deferred investment programs based on
selected tax brackets.
7. DEATH BENEFIT
Distribution Upon Death Payment Provisions
Death of Owner
If you die before the payout start date, the new owner will be the surviving
owner. If there is no surviving owner, the new owner will be the
beneficiary(ies). The new owner will have the options described below.
1. If the sole new owner is your spouse:
a. Your spouse may elect, within 180 days of the date of your death, to
receive the death benefit described under "Death Benefit Amount" below
in a lump sum.
b. Your spouse may elect, within 180 days of the date of your death, to
receive an amount equal to the death benefit paid out under one of the
income plans described in Section 8 "Income Phase" below. The payout
start date must be within one year of your date of death. Income
Payments must be:
i. over the life of your spouse; or
ii. for a guaranteed number of payments from 5 to 30 years but not to
exceed the life expectancy of your spouse; or
iii. over the life of your spouse with a guaranteed number of payments
from 5 to 30 years but not to exceed the life expectancy of your
spouse.
c. If your spouse does not elect one of the options above, then your
spouse may continue the contract in the accumulation phase as if the
death had not occurred. If the contract is continued in the
accumulation phase, the following conditions apply:
i. On the day the contract is continued, the contract value will be
the death benefit as determined at the end of the valuation
period during which we received due proof of death satisfactory
to us.
ii. The surviving spouse may make a single withdrawal of any amount
within one year of the date of death without incurring a
withdrawal charge.
iii. Before the payout start date, the death benefit of the continued
contract will be the greater of:
o the sum of all purchase payments reduced by a withdrawal
adjustment; or
o the maximum anniversary value, as described below under
"Death Benefit Amount," with the following changes:
o "issue date" is replaced by the date the contract is
continued; and
o "Initial purchase payment" is replaced with the death
benefit as determined at the end of the valuation period
during which we received due proof of death satisfactory to
us.
2. If the new owner is not your spouse but is a natural person, then the new
owner has the following options:
a. The new owner may elect, within 180 days of the date of your death, to
receive the death benefit described in "Death Benefit Amount," below,
in a lump sum.
b. The new owner may elect, within 180 days of the date of your death, to
receive an amount equal to the death benefit paid out under one of the
income plans described in the payout phase section. The payout start
date must be within one year of your date of death. Income payments
must be:
i. over the life of the new owner; or
ii. for a guaranteed number of payments from 5 to 30 years but not to
exceed the life expectancy of the new owner; or
iii. over the life of the new owner with a guaranteed number of
payments from 5 to 30 years but not to exceed the life expectancy
of the new owner.
c. The new owner may elect to receive the settlement value payable in a
lump sum within 5 years of your date of death.
3. If the new owner is a corporation or other non-natural person:
a. The non-natural owner may elect, within 180 days of your death, to
receive the death benefit in a lump sum.
b. The non-natural owner may elect to receive the settlement value
payable in a lump sum within 5 years of your date of death.
If any new owner is a non-natural person, all new owners will be considered to
be non-natural persons for the above purposes.
If the new owner who is not your spouse does not make one of the above described
elections, the settlement value must be withdrawn by the new owner on or before
the mandatory distribution date 5 years after your date of death. Under any of
these options, all ownership rights are available to the new owner from the date
of your death to the date on which the death benefit or settlement value is
paid. We reserve the right to extend beyond 180 days the period in which a death
benefit may be elected.
Death of Annuitant
If the annuitant who is not also the owner dies prior to the payout start date,
the owner must elect an applicable option listed below. If the option selected
is 1(a) or 1(b)(ii) below, the new annuitant will be the youngest owner, unless
the owner names a different annuitant.
1. If the owner is a natural person:
a. The owner may choose to continue this contract as if the death had not
occurred; or
b. If we receive due proof of death within 180 days of the date of the
annuitant's death, then the owner may alternatively choose to:
i. receive the death benefit in a lump sum; or
ii. apply the death benefit to an income plan which must begin within
one year of the date of death.
2. If the owner is a non-natural person:
a. The non-natural owner may elect, within 180 days of the annuitant's
date of death, to receive the death benefit in a lump sum; or
b. The non-natural owner may elect to receive the settlement value
payable in a lump sum within 5 years of the annuitant's date of death.
If the non-natural owner does not make one of the above described elections, the
settlement value must be withdrawn by the non-natural owner on or before the
mandatory distribution date 5 years after the annuitant's death.
Under any of these options, all ownership rights are available to the owner from
the date of the annuitant's death to the date on which the death benefit or
settlement value is paid. We reserve the right to extend beyond 180 days the
period when we will pay the death benefit.
Death Benefit Amount
Before the payout start date, the death benefit is equal to the greatest of the
following death benefit alternatives:
(a) the contract value on the date Allstate determines the death benefit;
or
(b) the sum of all purchase payments reduced by a withdrawal adjustment,
as defined below; or
(c) the "maximum anniversary value," increased by any purchase payments
made since that death benefit anniversary and reduced by a withdrawal
adjustment, described below:
On the day we issue the contract ("issue date"), the maximum anniversary value
is equal to the initial purchase payment. Thereafter, we recalculate the maximum
anniversary value when a purchase payment or withdrawal is made or an a contract
anniversary as follows:
o On each contract anniversary, the maximum anniversary value is equal
to the greater of the contract value or the most recently calculated
maximum anniversary value.
o For purchase payments, the maximum anniversary value is equal to the
most recently calculated maximum anniversary value plus the purchase
payment.
o For withdrawals, the maximum anniversary value is equal to the most
recently calculated maximum anniversary value reduced by the
withdrawal adjustment, described below.
In the absence of any withdrawals or purchase payments, the maximum anniversary
value will be the greatest of all contract anniversary contract values on or
prior to the date Allstate calculates the death benefit.
We will recalculate the maximum anniversary value until the first contract
anniversary after the 80th birthday of the oldest owner or, if the owner is not
a natural person, the 80th birthday of the oldest annuitant. After that date, we
will recalculate the maximum anniversary value only for purchase payments and
withdrawals.
Withdrawal Adjustment Amount
The withdrawal adjustment is equal to (a) divided by (b), with the result
multiplied by (c), where:
(a) = the withdrawal amount;
(b) = the contract value immediately prior to the withdrawal; and
(c) = the value of the applicable death benefit alternative immediately
prior to the withdrawal.
Allstate will determine the value of the death benefit as of the end of the
valuation period during which Allstate receives a complete request for payment
of the death benefit. A complete request includes due proof of death, and such
other documentation as Allstate may require in its discretion. In addition to
the above alternatives, if the owner is age 75 or less, the owner can select the
enhanced beneficiary protection rider.
Enhanced Beneficiary Protection Rider
If the owner of the contract is a living individual, the enhanced beneficiary
protection rider applies upon the death of the owner or annuitant. If the owner
is not a living individual, the enhanced beneficiary protection rider applies
upon the death of the annuitant. If you select this rider, the death benefit
will be the greater of the death benefit described above or the enhanced
beneficiary protection rider.
The enhanced beneficiary protection rider on the date we issue the rider ("rider
date") is equal to the contract value on that date. After the rider date, the
rider, plus any subsequent payments and less a withdrawal adjustment, will
accumulate at the rate of 5% per year until the earlier of (i) the date Allstate
determines the death benefit, or (ii) the first contract anniversary following
the 80th birthday of the oldest owner or, if no owner is a living individual,
the 80th birthday of the oldest annuitant.
We will determine the value of the death benefit at the end of the valuation
period during which we receive a complete request for payment of the death
benefit, as described above. Allstate will not settle any death claim until it
receives due proof of death satisfactory to it.
The enhanced beneficiary protection rider may not be available in all states.
8. INCOME PAYMENTS (THE PAYOUT PHASE)
You can choose to receive regular income payments during the payout phase. You
can choose the month and year in which those payments begin. We call that date
the payout start date. You can choose among three income plans.
We ask you to choose your payout start date and income option when you purchase
the contract. You can change either at any time before the payout start date
with 30 days written notice to us. Your payout start date cannot be any earlier
than one month after you buy the contract. Income payments must begin by the
annuitant's 90th birthday or 10 years from the date we issue the contract,
whichever is later. The annuitant is the person whose life we look to when we
make income payments.
You can choose whether to receive fixed or variable income payments or a
combination of both.
If you choose to receive variable income payments, the dollar amount of your
payments will depend upon 3 things:
1) the value of your contract in the subaccount(s) on the annuity date;
2) the 3% assumed investment rate used in the annuity table for the contract
(note, we reserve the right to offer other assumed investment rates); and
3) the performance of the subaccounts you selected. If the actual performance
exceeds the 3% assumed rate, your annuity payments will increase.
Similarly, if the actual performance is less than 3%, your annuity payments
will decrease.
If you choose to receive fixed income payments, the dollar amount of your
payments will be fixed for the duration of the income plan. We calculate the
amount of your payments by applying the portion of the contract value in the
fixed account on the payout start date, less any applicable premium tax, to the
greater of the appropriate value from the income payment table selected or such
other value as we are offering at that time.
You can choose one of the following income plans or any other income plan
acceptable to Allstate. After income payments begin, you cannot change the
income plan.
Income Plan 1. Life Income with Guaranteed Payments. Under this option, we
will make payments for as long as the annuitant is alive. If the annuitant
dies before the selected number of guaranteed payments have been made, we
will continue to pay the remainder of the guaranteed payments.
Income Plan 2. Joint and Survivor Life Income with Guaranteed Payments.
Under this option, we will make payments for as long as either the
annuitant or joint annuitant, named at the time of income plan selection,
lives. If both the annuitant and the joint annuitant die before the
selected number of guaranteed payments have been made, we will continue to
pay the remainder of the guaranteed payments.
Income Plan 3. Guaranteed Number of Payments. Under this option, we will
make payments for a specified number of months beginning on the payout
start date. These payments do not depend on the annuitant's life. The
number of months guaranteed may be from 60 to 360.
If you do not choose an income plan at the time you purchase the contract, we
will assume that you selected Income Plan 1 which will provide a life annuity
with 10 years of guaranteed payments.
We will make income payments monthly unless you have less than $2,000 to apply
to an income plan. In that case, Allstate may terminate your contract and
provide your income payment in a single lump sum. Likewise, if your income
payments would be less than $20 a month, Allstate may change the frequency of
payments so that your income payments are at least $20, or Allstate may
terminate the contract and provide your income payment in a single lump sum.
Retirement Income Guarantee Options
For owners up to and including age 75, you may elect to choose one of two
Retirement Income Guarantee options (Rider 1 or Rider 2). Each rider guarantees
a dollar amount (known as the "guaranteed income benefit") to be applied to an
income plan.
Eligibility
To qualify for this benefit, you must meet the following conditions as of the
payout start date:
o You must elect a payout start date that is on or after the tenth
anniversary of the rider date;
o The payout start date must occur during the 30 day period following a
contract anniversary;
o You must elect to receive fixed income payments; and
o The income plan you have selected must provide for payments guaranteed for
either single or joint life with a period certain of at least:
o 10 years, if the youngest annuitant's age is 80 or less on the date
the amount is applied, or
o 5 years, if the youngest annuitant's age is greater than 80 on the
date the amount is applied.
Retirement Income Guarantee Rider 1
This rider guarantees that the amount you apply to an income plan will not be
less than the total of your purchase payments less any withdrawals and any
applicable taxes.
The current charge for this rider, on an annual basis, is 0.05% multiplied by
the income base in effect on each contract anniversary. We deduct the fee only
from your assets in the variable account. In the case of a full withdrawal of
the contract value on any date other than the contract anniversary, Allstate
will deduct the rider fee from the amount paid upon withdrawal. In the case of a
full withdrawal, the rider fee is equal to 0.05% multiplied by the income base
immediately prior to the withdrawal. For purposes of determining the rider fee,
we will treat income payment commencement as a full withdrawal. Allstate
reserves the right to change the rider fee. Once we issue your rider, we cannot
change your rider fee. This charge will never exceed 0.15%.
We calculate the income base that we use to determine the value of the
guaranteed income benefit as follows:
1. On the rider date, the income base is equal to the contract value.
2. After the rider date, we recalculate the income base when a purchase
payment or withdrawal is made as follows:
a) For purchase payments, the income base is equal to the most recently
calculated income base plus the purchase payment.
b) For withdrawals, the income base is equal to the most recently
calculated income base reduced by a withdrawal adjustment.
In the absence of any withdrawals or purchase payments, the income base will be
equal to the contract value as of the date of the rider.
The withdrawal adjustment is equal to (1) divided by (2), with the result
multiplied by (3), where:
(1) = withdrawal amount.
(2) = the contract value immediately prior to the withdrawal.
(3) = the most recently calculated income base.
The guaranteed income benefit amount is determined by applying the income base,
less any applicable taxes, to the guaranteed rates for the income plan elected
by the owner. On the payout start date, the income payment will be the greater
of (i) the income payment produced by the guaranteed income benefit and (ii) the
income payment provided in the fixed amount income payment provision of the
contract.
Retirement Income Guarantee Rider 2
This rider guarantees that the amount you apply to an income option will not be
less than the greater of 1) your contract value on your most recent contract
anniversary adjusted for any withdrawals or purchase payments; or 2) your
contract value as of the rider date, adjusted for any withdrawals or purchase
payments, accumulated daily at a rate equal to 6% per year until the first day
of the month following the oldest owner's or, if the owner is not a living
individual, the annuitant's 85th birthday.
The annual charge for this rider is 0.30% multiplied by the income base in
effect on each contract anniversary. Allstate deducts the fee only from the
variable account. In the case of a full withdrawal of the contract value on any
date other than the contract anniversary, Allstate will deduct the rider fee
from the amount paid upon withdrawal. In the case of a full withdrawal, the
rider fee is equal to 0.30% multiplied by the income base immediately prior to
the withdrawal. For purposes of determining the rider fee, we will treat income
payment commencement as a full withdrawal. Allstate reserves the right to change
the rider fee. Once we issue your rider, we cannot change your rider fee. This
charge will never exceed 0.50%.
The income base is the greater of Income Base A and Income Base B. We determine
each income base as follows:
Income Base A
1. On the rider date, Income Base A is equal to the contract value.
2. After the rider date, we recalculate Income Base A as follows on the
contract anniversary and when a purchase payment or withdrawal is made:
a) For purchase payments, Income Base A is equal to the most recently
calculated income base plus the purchase payment.
b) For withdrawals, Income Base A is equal to the most recently
calculated income base reduced by a withdrawal adjustment.
c) On each contract anniversary, Income Base A is equal to the greater of
the contract value on that date or the most recently calculated Income
Base A.
In the absence of any withdrawals or purchase payments, Income Base A will be
equal to the greatest contract value as of the date of the rider and all
contract anniversary contract values between the rider date and the payout start
date.
We will recalculate Income Base A for purchase payments, for withdrawals and on
contract anniversaries until the first contract anniversary after the 85th
birthday of the oldest owner or, if no owner is a living individual, the oldest
annuitant. After that date, Income Base A will be recalculated for purchase
payments and withdrawals.
Income Base B
On the rider date, Income Base B is equal to the contract value. After the rider
date, Income Base B, plus any subsequent purchase payments and less a withdrawal
adjustment for any subsequent withdrawals, will accumulate daily at a rate equal
to 6% per year until the first day of the month following the oldest owner's or,
if the owner is not a living individual, the annuitant's 85th birthday.
For purposes of computing Income Base A or B, the withdrawal adjustment is equal
to (1) divided by (2), with the result multiplied by (3), where:
(1) = withdrawal amount.
(2) = the contract value immediately prior to the withdrawal.
(3) = the most recently calculated income base.
The guaranteed income benefit amount is determined by applying the income base,
less any applicable taxes, to the guaranteed rates for the income plan elected
by the owner. On the payout start date, the income payment will be the greater
of (i) the income payment provided by the guaranteed income benefit or (ii) the
income payment provided in the fixed amount income payment provision of the
contract.
9. TAXES
Introduction
THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. ALLSTATE
MAKES NO GUARANTEE REGARDING THE TAX TREATMENT OF ANY CONTRACT OR TRANSACTION
INVOLVING A CONTRACT. Federal, state, local and other tax consequences of
ownership or receipt of distributions under an annuity contract depend on your
individual circumstances. If you are concerned about any tax consequences with
regard to your individual circumstances, you should consult a competent tax
adviser.
Taxation of Annuities in General
Tax Deferral
Generally, you are not taxed on increases in the contract value until a
distribution occurs. This rule applies only where:
(1) the owner is a natural person,
(2) the investments of the Separate Account are "adequately diversified"
according to Treasury Department regulations, and
(3) Allstate is considered the owner of the Separate Account assets for federal
income tax purposes.
Non-natural Owners
As a general rule, annuity contracts owned by non-natural persons such as
corporations, trusts, or other entities are not treated as annuity contracts for
federal income tax purposes. The income on such contracts is taxed as ordinary
income received or accrued by the owner during the taxable year. Please see the
Statement of Additional Information for a discussion of several exceptions to
the general rule for contracts owned by non-natural persons.
Diversification Requirements
For a contract to be treated as an annuity for federal income tax purposes, the
investments in the Separate Account must be "adequately diversified" consistent
with standards under Treasury Department regulations. If the investments in the
Separate Account are not adequately diversified, the contract will not be
treated as an annuity contract for federal income tax purposes. As a result, the
income on the contract will be taxed as ordinary income received or accrued by
the owner during the taxable year. Although Allstate does not have control over
the Portfolios or their investments, we expect the Portfolios to meet the
diversification requirements.
Ownership Treatment
The IRS has stated that you will be considered the owner of Separate Account
assets if you possess incidents of ownership in those assets, such as the
ability to exercise investment control over the assets. At the time the
diversification regulations were issued, the Treasury Department announced that
the regulations do not provide guidance concerning circumstances in which
investor control of the Separate Account investments may cause an investor to be
treated as the owner of the Separate Account. The Treasury Department also
stated that future guidance would be issued regarding the extent that owners
could direct sub-account investments without being treated as owners of the
underlying assets of the Separate Account.
Your rights under this contract are different than those described by the IRS in
rulings in which it found that contract owners were not owners of Separate
Account assets. For example, you have the choice to allocate premiums and
contract values among more investment options. Also, you may be able to transfer
among investment options more frequently than in such rulings. These differences
could result in you being treated as the owner of the Separate Account. If this
occurs, income and gain from the Separate Account assets would be includible in
your gross income. Allstate does not know what standards will be set forth in
any regulations or rulings which the Treasury Department may issue. It is
possible that future standards announced by the Treasury Department could
adversely affect the tax treatment of your contract. We reserve the right to
modify the contract as necessary to attempt to prevent you from being considered
the federal tax owner of the assets of the Separate Account. However, we make no
guarantee that such modification to the contract will be successful.
Taxation of Partial and Full Withdrawals
If you make a partial withdrawal under a non-qualified contract, amounts
received are taxable to the extent the contract value, without regard to
surrender charges, exceeds the investment in the contract. The investment in the
contract is the gross premium paid for the contract minus any amounts previously
received from the contract if such amounts were properly excluded from your
gross income. If you make a partial withdrawal under a qualified contract, the
portion of the payment that bears the same ratio to the total payment that the
investment in the contract (i.e., nondeductible IRA contributions, after tax
contributions to qualified plans) bears to the contract value, is excluded from
your income. If you make a full withdrawal under a non-qualified contract or a
qualified contract, the amount received will be taxable only to the extent it
exceeds the investment in the contract.
"Nonqualified distributions" from Roth IRAs are treated as made from
contributions first and are included in gross income only to the extent that
distributions exceed contributions. "Qualified distributions" from Roth IRAs are
not included in gross income. "Qualified distributions" are any distributions
made more than five taxable years after the taxable year of the first
contribution to any Roth IRA and which are:
o made on or after the date the individual attains age 59 1/2,
o made to a beneficiary after the owner's death,
o attributable to the owner being disabled, or
o for a first time home purchase (first time home purchases are subject to
a lifetime limit of $10,000).
If you transfer a nonqualified contract without full and adequate consideration
to a person other than your spouse (or to a former spouse incident to a
divorce), you will be taxed on the difference between the contract value and the
investment in the contract at the time of transfer. Except for certain qualified
contracts, any amount you receive as a loan under a contract, and any assignment
or pledge (or agreement to assign or pledge) of the contract value is treated as
a withdrawal of such amount or portion.
Taxation of Annuity Payments
Generally, the rule for income taxation of annuity payments received from a
nonqualified contract provides for the return of your investment in the contract
in equal tax-free amounts over the payment period. The balance of each payment
received is taxable. For fixed annuity payments, the amount excluded from income
is determined by multiplying the payment by the ratio of the investment in the
contract (adjusted for any refund feature or period certain) to the total
expected value of annuity payments for the term of the contract. If you elect
variable annuity payments, the amount excluded from taxable income is determined
by dividing the investment in the contract by the total number of expected
payments. The annuity payments will be fully taxable after the total amount of
the investment in the contract is excluded using these ratios. If you die, and
annuity payments cease before the total amount of the investment in the contract
is recovered, the unrecovered amount will be allowed as a deduction for your
last taxable year.
Taxation of Annuity Death Benefits
Death of an owner, or death of the annuitant if the contract is owned by a
non-natural person, will cause a distribution of death benefits from a contract.
Generally, such amounts are included in income as follows:
(1) if distributed in a lump sum, the amounts are taxed in the same manner as a
full withdrawal, or
(2) if distributed under an annuity option, the amounts are taxed in the same
manner as an annuity payment. Please see the Statement of Additional
Information for more detail on distribution at death requirements.
Penalty Tax on Premature Distributions
A 10% penalty tax applies to the taxable amount of any premature distribution
from a nonqualified contract. The penalty tax generally applies to any
distribution made prior to the date you attain age 59 1/2. However, no penalty
tax is incurred on distributions:
(1) made on or after the date the owner attains age 59 1/2;
(2) made as a result of the owner's death or disability;
(3) made in substantially equal periodic payments over the owner's life or life
expectancy,
(4) made under an immediate annuity; or
(5) attributable to investment in the contract before August 14, 1982.
You should consult a competent tax advisor to determine if any other exceptions
to the penalty apply to your situation. Similar exceptions may apply to
distributions from qualified contracts.
Aggregation of Annuity Contracts
All non-qualified deferred annuity contracts issued by Allstate (or its
affiliates) to the same owner during any calendar year will be aggregated and
treated as one annuity contract for purposes of determining the taxable amount
of a distribution.
Tax Qualified Contracts
Contracts may be used as investments with certain Qualified Plans such as:
o Individual Retirement Annuities or Accounts (IRAs) under Section 408 of the
Code;
o Roth IRAs under Section 408A of the Code;
o Simplified Employee Pension Plans under Section 408(k) of the Code;
o Savings Incentive Match Plans for Employees (SIMPLE) Plans under Section
408(p) of the Code;
o Tax Sheltered Annuities under Section 403(b) of the Code;
o Corporate and Self Employed Pension and Profit Sharing Plans; and
o State and Local Government and Tax-Exempt Organization Deferred
Compensation Plans.
In the case of certain Qualified Plans, the terms of the plans may govern the
right to benefits, regardless of the terms of the contract.
Restrictions Under Section 403(b) Plans
Section 403(b) of the Tax Code provides tax-deferred retirement savings plans
for employees of certain non-profit and educational organizations. Under Section
403(b), any contract used for a 403(b) plan must provide that distributions
attributable to salary reduction contributions made after 12/31/88, and all
earnings on salary reduction contributions, may be made only on or after the
date the employee:
o attains age 59 1/2,
o separates from service,
o dies,
o becomes disabled, or
o on account of hardship (earnings on salary reduction contributions may
not be distributed on the account of hardship).
These limitations do not apply to withdrawals where Allstate is directed to
transfer some or all of the contract value to another '403(b) plan.
Income Tax Withholding
Allstate is required to withhold federal income tax at a rate of 20% on all
"eligible rollover distributions" unless you elect to make a "direct rollover"
of such amounts to an IRA or eligible retirement plan. Eligible rollover
distributions generally include all distributions from qualified contracts,
excluding IRAs, with the exception of:
(1) required minimum distributions, or
(2) a series of substantially equal periodic payments made over a period of at
least 10 years, or,
(3) over the life (joint lives) of the participant (and beneficiary).
Allstate may be required to withhold federal and state income taxes on any
distributions from non-qualified contracts or qualified contracts that are not
eligible rollover distributions, unless you notify us of your election to not
have taxes withheld.
10. OTHER INFORMATION
Allstate
Allstate is the issuer of the contract. Allstate is an Illinois stock life
insurance company organized in 1957. Allstate is licensed to operate in the
District of Columbia, Puerto Rico, and all states except New York. Allstate
intends to market the contract in those jurisdictions. Allstate's home office is
located at 3100 Sanders Road, Northbrook, Illinois 60062.
Allstate is a wholly owned subsidiary of Allstate Insurance Company, a stock
property-liability insurance company organized under the laws of Illinois. All
of the outstanding capital stock of Allstate Insurance Company is owned by The
Allstate Corporation.
The Variable Account
Allstate established its Separate Account A (variable account) under Illinois
insurance law on January 27, 1999. We have registered the variable account with
the Securities and Exchange Commission as a unit investment trust under the
Investment Company Act of 1940.
The assets of the variable account are held in Allstate's name on behalf of the
variable account and legally belong to Allstate. However, the assets that
underlie the contracts are not chargeable with liabilities arising out of any
other business Allstate may conduct. All the income, gains and losses (realized
or unrealized) resulting from these assets are credited to or charged against
the contracts and not against any other contracts Allstate may issue.
Distributor
Allstate _________Company ("xxxxxx"), 3100 Sanders Road, Northbrook, Illinois,
acts as the distributor of the contracts. xxxxxx is an affiliate of Allstate.
Commissions will be paid to broker-dealers who sell the contracts.
Broker-dealers will be paid commissions up to 7.0% of purchase payments.
Sometimes, Allstate also pays the broker-dealer a persistency bonus in addition
to the standard commissions.
Ownership
Owner. You, as the owner of the contract, have all the rights under the
contract. Prior to the payout start date, the owner is the person designated at
the time the contract is issued, unless changed.
Joint Owner. Joint owners can own the contract. Upon the death of either joint
owner, the surviving owner will be the designated beneficiary. We will treat any
other beneficiary designated at the time the contract was issued or at a later
date as a contingent beneficiary unless otherwise indicated.
Beneficiary
The beneficiary is the person(s) or entity you name to receive any death
benefit. The beneficiary is named at the time the contract is issued unless
changed at a later date. Unless you name an irrevocable beneficiary, you can
change the beneficiary at any time before you die.
Assignment
You may not assign an interest in the contract as collateral or security for a
loan.
Suspension of Payments or Transfers
Allstate may be required to suspend or postpone payments for withdrawals or
transfers for any period when:
1. the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
2. trading on the New York Stock Exchange is restricted;
3. an emergency exists as a result of which disposal of shares of the funds is
not reasonably practicable or Allstate cannot reasonably value the shares
of the variable funds;
4. during any other period when the Securities and Exchange Commission, by
order, so permits for the protection of owners.
Allstate has reserved the right to defer payment for a withdrawal or transfer
from the fixed account options for the period permitted by law but not for more
than six months.
Modification
Allstate may not modify the contract without your consent except to make the
contract meet the requirements of the Investment Company Act of 1940, or to make
the contract comply with any changes in the Internal Revenue Code or to make any
changes required by the Code or by any other applicable law.
Year 2000
Allstate is heavily dependent upon complex computer systems for all phases of
its operations, including customer service, and policy and contract
administration. Since many of Allstate's older computer software programs
recognize only the last two digits of the year in any date, some software may
fail to operate properly in or after the year 1999, if the software is not
reprogrammed or replaced, ("Year 2000 Issue"). Allstate believes that many of
its counterparties and suppliers also have Year 2000 Issues that could affect
Allstate. In 1995, Allstate began a plan intended to mitigate and/or prevent the
adverse effects of Year 2000 Issues. These strategies include normal development
and enhancement of new and existing systems, upgrades to operating systems
already covered by maintenance agreements and modifications to existing systems
to make them Year 2000 compliant. The plan also includes Allstate actively
working with its major external counterparties and suppliers to assess their
compliance efforts and Allstate's exposure to them. Allstate presently believes
that it will resolve the Year 2000 Issue in a timely manner, and the financial
impact will not materially affect its results of operations, liquidity or
financial position. Year 2000 costs are and will be expensed as incurred.
Financial Statements
The financial statements of Allstate appear in the Statement of Additional
Information. As of the date of the prospectus, the variable account had not
commenced operations.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
PAGE
Additions, Deletions or Substitutions of Investments
Reinvestment
The Contract
Purchase of Contracts
Performance Data
Tax-free Exchanges (1035 Exchanges, Rollovers and Transfers)
Premium Taxes
Tax Reserves
Income Payments
Calculation of Variable Annuity Unit Values
General Matters
Incontestability
Settlements
Safekeeping of the Variable Account's Assets
Federal Tax Matters
Introduction
Taxation of Allstate
Exceptions to the Non-Natural Owner Rule
IRS Required Distribution at Death Rules
Qualified Plans
Types of Qualified Plans
Experts
Legal Matters
Sales Commissions
Financial Statements
<PAGE>
Allstate Life Insurance Company
Attn: Variable Products
P.O. Box xxxxx
Palatine, Illinois xxxxx-xx
Please send me, at no charge, the Statement of Additional Information dated May
1, 1999, for "The Annuity Contract" issued by Allstate.
(Please print or type and fill in all information)
Name
Address
City State Zip Code
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
ALLSTATE VARIABLE ANNUITY
Offered By
ALLSTATE LIFE INSURANCE COMPANY
Through
ALLSTATE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
Post Office Box xxxxx
Palatine, IL xxxxx-xxxx
1-(800)xxx-xxxx
This Statement of Additional Information supplements the information in the
prospectus, dated May 1, 1999, for the Allstate Variable Annuity contract. You
may obtain a copy of the prospectus by writing or calling the address or
telephone number listed above. This Statement of Additional Information uses the
same defined terms as the prospectus.
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD BE READ
ONLY IN CONJUNCTION WITH THE PROSPECTUS FOR THE CONTRACT
Dated May 1, 1999
<PAGE>
TABLE OF CONTENTS
PAGE
ADDITIONS, DELETIONS OR SUBSTITUTIONS OF INVESTMENTS
REINVESTMENT
THE CONTRACT
Purchase of Contracts
Performance Data
Premium Taxes
INCOME PAYMENTS
Calculation of Variable Annuity Unit Values
GENERAL MATTERS
Incontestability
Settlements
Safekeeping of the Variable Account's Assets
FEDERAL TAX MATTERS
Introduction
Taxation of Allstate
Exceptions to the Non-Natural Owner Rule
IRS Required Distribution at Death Rules
Qualified Plans
Types of Qualified Plans
EXPERTS
LEGAL MATTERS
SALES COMMISSIONS
FINANCIAL STATEMENTS
<PAGE>
ADDITIONS, DELETIONS OR SUBSTITUTIONS OF INVESTMENTS
Allstate may, subject to any legal limits, add funds, delete funds, or
substitute shares of another fund, or of another open-end, registered investment
company, if the shares of a fund are no longer available for investment, or if,
in Allstate's judgment, investment in any fund would become inappropriate in
view of the purposes of the variable account. We will not substitute any funds
without first notifying contract owners and obtaining the SEC's approval, to the
extent such notification and approval is legally required. Nothing contained in
this Statement of Additional Information shall prevent the variable account from
purchasing other securities for other series or classes of contracts, or from
effecting a conversion between series or classes of contracts on the basis of
requests made by owners.
Allstate also may establish additional subaccounts or series of subaccounts of
the variable account. Each additional subaccount would purchase shares in a new
portfolio in another mutual fund. New subaccounts may be established when, in
the sole discretion of Allstate, marketing needs or investment conditions
warrant. Any new subaccounts offered in conjunction with the contract will be
made available to existing owners on a basis to be determined by Allstate.
Allstate may also eliminate one or more subaccounts if, in its sole discretion,
marketing, tax or investment conditions so warrant.
In the event of any such substitution or change, Allstate may, by appropriate
endorsement, make such changes in the contract as may be necessary or
appropriate to reflect such substitution or change. If deemed to be in the best
interests of persons having voting rights under the policies, the variable
account may be operated as a management company under the Investment Company Act
of 1940 or it may be deregistered under such Act in the event such registration
is no longer required.
REINVESTMENT
All dividends and capital gains distributions from the funds are automatically
reinvested in shares of the distributing fund at their net asset value.
THE CONTRACT
Purchase of Contracts
The contracts are offered to the public through brokers as well as banks
licensed under the federal securities laws and state insurance laws. The
contracts are distributed through the principal underwriter for the variable
account, "_______________", an affiliate of Allstate. The offering of the
contracts is continuous and Allstate does not anticipate discontinuing the
offering of the contracts. However, Allstate reserves the right to discontinue
the offering of the contracts.
Performance Data
From time to time the variable account may publish advertisements containing
performance data relating to its subaccounts. The performance data for the
subaccounts (other than for the Money Market subaccount) will always be
accompanied by total return quotations. Performance figures used by the variable
account are based on actual historical performance of its subaccounts or the
funds for specified periods, and the figures are not intended to indicate future
performance. As of the date of the prospectus and this Statement of Additional
Information, the subaccounts had not commenced operations; therefore, there is
no actual performance data for the subaccounts.
Standardized Total Returns
A subaccount's "average annual total return" represents an annualization of the
subaccount's total return over a particular period. We compute it by finding the
annual percentage rate that, when compounded annually, will accumulate a
hypothetical $1,000 purchase payment to the redeemable value at the end of the
one, five or ten year period, or for a period from the date of commencement of
the subaccount's operations, if shorter than any of the foregoing. The average
annual total return is obtained by dividing the ending redeemable value, after
deductions for any withdrawal charges or contract maintenance charges imposed on
the contracts by the variable account, by the initial hypothetical $1,000
purchase payment, taking the "n"th root of the quotient (where "n" is the number
of years in the period) and subtracting 1 from the result.
The withdrawal charges assessed upon redemption are computed as follows: the
free withdrawal amount is not assessed a withdrawal charge. Withdrawal charges
are charged on the amount of redemption equal to the purchase payment, reduced
by the amount of the free withdrawal amount, if any. The remaining amount of the
redemption, if any, is not assessed a withdrawal charge. The withdrawal charge
schedule specifies rates based on the number of complete years since each
purchase payment was made. The contract maintenance charge ($30 per contract)
used in the total return calculation is normally prorated using the following
method: The total amount of annual contract fees collected during the year is
divided by the total average net assets of all the subaccounts. The resulting
percentage is then multiplied by the ending contract value.
Non-Standardized Total Returns
From time to time, sales literature or advertisements also may quote average
annual total returns that do not reflect the withdrawal charge. These are
calculated in exactly the same way as the average annual total returns described
above, except that the ending redeemable value of the hypothetical account for
the period is replaced with an ending value for the period that does not take
into account any charges on amounts surrendered. In addition, the variable
account may advertise the total return over different periods of time by means
of aggregate, average, year-by-year or other types of total return figures. Such
calculations would not reflect deductions for withdrawal charges that may be
imposed on the contracts by the variable account which, if reflected, would
reduce the performance quoted. The formula for computing such total return
quotations involves a per unit change calculation. This calculation is based on
the accumulation unit value at the end of the defined period divided by the
accumulation unit value at the beginning of such period, minus 1. The periods
included in such advertisements are "year-to-date" (prior calendar year end to
the day of the advertisement); "year to most recent quarter" (prior calendar
year end to the end of the most recent quarter); "the prior calendar year"; "
'n' most recent Calendar Years"; and "Inception (commencement of the
subaccount's operation) to date" (day of the advertisement).
Hypothetical Historical Total Returns
The variable account also may advertise yield and total return for periods prior
to the date that the variable account commenced operations. For periods prior to
the date the variable account commenced operations, performance information for
the subaccounts will be calculated based on the performance of the funds and the
assumption that the subaccounts were in existence for the same periods as those
of the funds, with a level of charges equal to those currently assessed against
the subaccounts.
The annualized hypothetical historical total returns for the subaccounts as of
the quarter ended March 30, 1999 are presented below:
(to be provided in pre-effective amendment)
The variable account also may advertise the performance of the subaccounts
relative to certain performance rankings and indexes compiled by independent
organizations, such as: (a) Lipper Analytical Services, Inc.; (b) the Standard &
Poor's 500 Composite Stock Price Index ("S & P 500"); (c) A.M. Best Company; (d)
Bank Rate Monitor; and (e) Morningstar.
Premium Taxes
Applicable premium tax rates depend on the owner's state of residency and the
insurance laws and status of Allstate in those states where premium taxes are
incurred. Premium tax rates may be changed by legislation, administrative
interpretations or judicial acts.
INCOME PAYMENTS
Calculation of Variable Annuity Unit Values
The amount of the first income payment is calculated by applying the contract
value allocated to each subaccount, less any applicable premium tax charge
deducted at this time, to the income payment tables in the contract. The first
variable annuity income payment is divided by the subaccount's then current
annuity unit value to determine the number of annuity units upon which later
income payments will be based. Variable annuity income payments after the first
will be equal to the sum of the number of annuity units determined in this
manner for each subaccount times the then current annuity unit value for each
respective subaccount.
Annuity units in each subaccount are valued separately and annuity unit values
will depend upon the investment experience of the particular portfolios in which
the subaccount invests. The value of the annuity unit for each subaccount at the
end of any valuation period is calculated by:
(a) multiplying the annuity unit value at the end of the immediately
preceding valuation period by the subaccount's net investment factor
during the period; and then
(b) dividing the product by the sum of 1.0 plus the assumed investment rate
for the period. The assumed investment rate adjusts for the interest
rate assumed in the income payment tables used to determine the dollar
amount of the first variable annuity income payment, and is at an
effective annual rate which is disclosed in the contract.
The amount of the first income payment paid under an income plan is determined
using the interest rate and mortality table disclosed in the contract. Due to
judicial or legislative developments regarding the use of tables which do not
differentiate on the basis of sex, different annuity tables may be used.
GENERAL MATTERS
Incontestability
We will not contest the contract after we issue it.
Settlements
Due proof of the owner(s) death (or annuitant's death if there is a non-natural
owner) must be received prior to settlement of a death claim.
Safekeeping of the Variable Account's Assets
Allstate holds title to the assets of the variable account. The assets are kept
physically segregated and held separate and apart from Allstate's general
corporate assets. Records are maintained of all purchases and redemptions of the
fund shares held by each of the subaccounts.
The funds do not issue certificates and, therefore, Allstate holds the variable
account's assets in open account in lieu of stock certificates. See the Trust
prospectus for a more complete description of the custodians of the funds.
FEDERAL TAX MATTERS
Introduction
THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. ALLSTATE
MAKES NO GUARANTEE REGARDING THE TAX TREATMENT OF ANY CONTRACT OR TRANSACTION
INVOLVING A CONTRACT. Federal, state, local and other tax consequences of
ownership or receipt of distributions under an annuity contract depend on the
individual circumstances of each person. If you are concerned about any tax
consequences with regard to your individual circumstances, you should consult a
competent tax adviser.
Taxation of Allstate
Allstate is taxed as a life insurance company under Part I of Subchapter L of
the Internal Revenue Code. The variable account is not an entity separate from
Allstate, and its operations form a part of Allstate. As a consequence, the
variable account will not be taxed separately as a "Regulated Investment
Company" under Subchapter M of the Code. Investment income and realized capital
gains of the variable account are automatically applied to increase reserves
under the contract. Under current federal tax law, Allstate believes that the
variable account investment income and capital gains will not be taxed to the
extent that such income and gains are applied to increase the reserves under the
contract. Generally, reserves are amounts that Allstate is legally required to
accumulate and maintain in order to meet future obligations under the contracts.
Allstate does not anticipate that it will incur any federal income tax liability
attributable to the variable account. Therefore, we do not intend to make
provisions for any such taxes. If we are taxed on investment income or capital
gains of the variable account, then we may impose a charge against the variable
account in order to make provision for such taxes.
Exceptions to the Non-natural Owner Rule
Generally, contracts held by a non-natural owner are not treated as annuity
contracts for federal income tax purposes, unless one of several exceptions
applies. Contracts will generally be treated as held by a natural person if the
nominal owner is a trust or other entity that holds the contract for the benefit
of a natural person. However, this special exception will not apply in the case
of an employer who is the nominal owner of a contract under a non-qualified
deferred compensation arrangement for employees.
Other exceptions to the non-natural owner rule are:
(1) Contracts acquired by an estate of a decedent by reason of the death of the
decedent;
(2) Certain qualified contracts;
(3) Contracts purchased by employers upon the termination of certain qualified
plans;
(4) Certain contracts used in connection with structured settlement agreements,
and
(5) Contracts purchased with a single premium when the annuity starting date is
no later than a year from date of purchase of the annuity and substantially
equal periodic payments are made, not less frequently than annually, during
the annuity period.
IRS Required Distribution at Death Rules
To qualify as an annuity contract for federal income tax purposes, a
nonqualified contract must provide:
(1) if any owner dies on or after the annuity start date, but before the entire
interest in the contract has been distributed, the remaining portion of
such interest must be distributed at least as rapidly as under the method
of distribution being used as of the date of the owner's death;
(2) if any owner dies prior to the annuity start date, the entire interest in
the contract must be distributed within five years after the date of the
owner's death.
The five year requirement is satisfied if:
(1) any portion of the owner's interest which is payable to a designated
beneficiary is distributed over the life of such beneficiary (or over a
period not extending beyond the life expectancy of the beneficiary), and
(2) the distributions begin within one year of the owner's death.
Qualified Plans
This contract may be used with several types of qualified plans. The tax rules
applicable to participants in qualified plans vary according to the type of plan
and the terms and conditions of the plan. Qualified plan participants, and
owners, annuitants and beneficiaries under the contract may be subject to the
terms and conditions of the qualified plan regardless of the terms of the
contract.
Types of Qualified Plans
IRAs
Section 408 of the Code permits eligible individuals to contribute to an
individual retirement plan known as an IRA. IRAs are subject to limitations on
the amount that can be contributed and on the time when distributions may
commence. Certain distributions from other types of qualified plans may be
"rolled over" on a tax-deferred basis into an IRA. An IRA generally may not
provide life insurance, but it may provide a death benefit that equals the
greater of the premiums paid or the contract value. The contract provides a
death benefit that in certain situations, may exceed the greater of the payments
or the contract value. If the IRS treats the death benefit as violating the
prohibition on investment in life insurance contracts, the contract would not
qualify as an IRA.
Roth IRAs
Section 408A of the Code permits eligible individuals to make nondeductible
contributions to an individual retirement plan known as a Roth IRA. Roth IRAs
are subject to limitations on the amount that can be contributed. In certain
instances, distributions from Roth IRAs are excluded from gross income. Subject
to certain limits, a traditional Individual Retirement Account or annuity may be
converted or "rolled over" to a Roth IRA. The taxable portion of a conversion or
rollover distribution is included in gross income, but is exempt from the 10%
penalty tax on premature distributions
Simplified Employee Pension Plans
Section 408(k) of the Code allows employers to establish simplified employee
pension plans for their employees using the employees' IRAs if certain criteria
are met. Under these plans the employer may, within limits, make deductible
contributions on behalf of the employees to their individual retirement
annuities. Employers intending to use the contract in connection with such plans
should seek competent advice
Savings Incentive Match Plans for Employees (SIMPLE Plans)
Sections 408(p) and 401(k) of the Tax Code allow employers with 100 or fewer
employees to establish SIMPLE retirement plans for their employees. SIMPLE plans
may be structured as a SIMPLE retirement account using an employee's IRA to hold
the assets, or as a Section 401(k) qualified cash or deferred arrangement. In
general, a SIMPLE plan consists of a salary deferral program for eligible
employees and matching or nonelective contributions made by employers. Employers
intending to use the contract in conjunction with SIMPLE plans should seek
competent tax and legal advice.
Tax Sheltered Annuities
Section 403(b) of the Tax Code permits public school employees and employees of
certain types of tax-exempt organizations (specified in Section 501(c)(3) of the
Code) to have their employers purchase contracts for them. Subject to certain
limitations, a Section 403(b) plan allows an employer to exclude the purchase
payments from the employees' gross income. A contract used for a Section 403(b)
plan must provide that distributions attributable to salary reduction
contributions made after 12/31/88, and all earnings on salary reduction
contributions, may be made only on or after:
o the date the employee attains age 59 1/2,
o separates from service,
o dies,
o becomes disabled, or
o on the account of hardship (earnings on salary reduction contributions may
not be distributed for hardship).
These limitations do not apply to withdrawals where Allstate is directed to
transfer some or all of the contract value to another 403(b) plan.
Corporate and Self-Employed Pension and Profit Sharing Plans
Sections 401(a) and 403(a) of the Tax Code permit corporate employers to
establish various types of tax favored retirement plans for employees. The Tax
Code permits self-employed individuals to establish tax favored retirement plans
for themselves and their employees. Such retirement plans may permit the
purchase of contracts to provide benefits under the plans.
State and Local Government and Tax-Exempt Organization
Deferred Compensation Plans
Section 457 of the Code permits employees of state and local governments and
tax-exempt organizations to defer a portion of their compensation without paying
current income taxes. The employees must be participants in an eligible deferred
compensation plan. Employees with contracts under the plan are considered
general creditors of the employer. The employer, as owner of the contract, has
the sole right to the proceeds of the contract. Generally, under the non-natural
owner rules, contracts are not treated as annuity contracts for federal income
tax purposes. Under these plans, contributions made for the benefit of the
employees will not be included in the employees' gross income until distributed
from the plan. However, all compensation deferred under a 457 plan must remain
the sole property of the employer. As property of the employer, the assets of
the plan are subject only to the claims of the employer's general creditors,
until such time as the assets become available to the employee or a beneficiary.
EXPERTS
The financial statements of Allstate appearing in this Statement of Additional
Information (which is incorporated by reference in the prospectus of Allstate
Life Insurance Company Separate Account A of Allstate Life Insurance Company)
have been audited by ________________, (address), independent auditors, as
stated in their reports appearing herein and are included in reliance upon the
reports of such firm given upon their authority as experts in accounting and
auditing.
LEGAL MATTERS
Freedman, Levy, Kroll & Simonds, Washington, D.C., has advised Allstate on
certain federal securities laws matters. All matters of Illinois law pertaining
to the Contracts, including the validity of the contracts and Allstate's right
to issue such contracts under Illinois insurance law, have been passed upon by
Michael J. Velotta, General Counsel of Allstate.
SALES COMMISSIONS
Commissions paid may vary, but in the aggregate are not anticipated to exceed
7.0% of any purchase payment. In addition, under certain circumstances, Allstate
may pay certain sellers of the contracts a persistency bonus which will take
into account, among other things, the length of time purchase payments have been
held under a contract and the amount of purchase payments.
FINANCIAL STATEMENTS
The financial statements of Allstate begin on Page F-1 of this Statement of
Additional Information. The financial statements of the Allstate Life Insurance
Company Separate Account A are not included herein because the variable account
had not commenced operations as of the date of the prospectus and this Statement
of Additional Information.
[Financial statements of Allstate to be filed by amendment]
<PAGE>
PART C
OTHER INFORMATION
24A. FINANCIAL STATEMENTS
Allstate Life Insurance Company Financial Statements and Financial Schedule (to
be filed by amendment).
24B. EXHIBITS
The following exhibits, correspond to those required by paragraph (b) of
item 24 as to exhibits in Form N-4:
(1) Resolution of the Board of Directors of Allstate Life Insurance Company
authorizing establishment of the Allstate Life Insurance Company Separate
Account A
(2) Not Applicable
(3) Underwriting Agreement*
(4) Form of Contract and Certificate Amendments
(5) Form of application for a Contract*
(6)(a) Articles of Incorporation of Allstate Life Insurance Company
(b) By-laws of Allstate Life Insurance Company
(7) Not applicable
(8) Participation Agreement*
(9) Opinion of Michael J. Velotta, Vice President, Secretary and General
Counsel of Allstate Life Insurance Company*
(10)(a) Consent of Accountants*
(b) Consent of Attorneys*
(11) Not applicable
(12) Not applicable
(13) Performance Data Calculations*
(14) Not applicable
(99) Powers of Attorney
* To be filed by pre-effective amendment.
<TABLE>
<CAPTION>
25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
<S> <C>
NAME AND PRINCIPAL POSITION AND OFFICE WITH
BUSINESS ADDRESS DEPOSITOR OF THE ACCOUNT
Louis G. Lower, II Chairman of the Board of Directors
and Chief Executive Officer
Thomas J. Wilson, II Director and President
Michael J. Velotta Director, Vice President, Secretary
and General Counsel
Marla G. Friedman Director and Vice President
Robert W. Gary Director
Peter H. Heckman Director and Vice President
Phillip E. Lawson Director
Edward M. Liddy Director
John C. Lounds Director and Vice President
Robert W. Pike Director
Timothy H. Plohg Director and Vice President
Kevin R. Slawin Director and Vice President
Casey J. Sylla Director and Chief Investment Officer
Charles F. Thalheimer Director and Vice President
B. Eugene Wraith Director and Assistant Vice President
Karen C. Gardner Vice President
Thomas A. McAvity, Jr. Vice President
Mary J. McGinn Vice President and Assistant Secretary
James P. Zils Treasurer
Keith A. Hauschildt Assistant Vice President and Controller
C. Nelson Strom Assistant Vice President and Corporate Actuary
Patricia W. Wilson Assistant Vice President, Assistant Secretary
and Assistant Treasurer
Richard L. Baker Assistant Vice President
D. Steven Boger Assistant Vice President
Sarah R. Donahue Assistant Vice President
Douglas F. Gaer Assistant Vice President
John R. Hunter Assistant Vice President
Kimberly A. Johnson Assistant Vice President
Ronald Johnson Assistant Vice President
Robert Park Assistant Vice President
Barry S. Paul Assistant Vice President
Robert E. Rich Assistant Vice President
Robert N. Roeters Assistant Vice President
Leonard G. Sherman Assistant Vice President
Linda L. Shumilas Assistant Vice President
Robert E. Transon Assistant Vice President
Timothy N. Vander Pas Assistant Vice President
G. Craig Whitehead Assistant Vice President
Laura R. Zimmerman Assistant Vice President
Joanne M. Derrig Assistant Secretary and Chief
Compliance Officer
Emma M. Kalaidjian Assistant Secretary
Paul N. Kierig Assistant Secretary
Brenda D. Sneed Assistant Secretary and Assistant
General Counsel
Nancy M. Bufalino Assistant Treasurer
</TABLE>
The principal business address of the foregoing officers and directors is 3100
Sanders Road, Northbrook, Illinois 60062.
26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH DEPOSITOR OR REGISTRANT
Information in response to this item is incorporated by reference to the Form
10-K Annual Report of The Allstate Corporation (File #1-11840).
27. NUMBER OF CONTRACT OWNERS
Registrant intends to begin operations shortly after the effective date of this
Registration Statement. As of the date hereof there are no contract owners.
28. INDEMNIFICATION
The by-laws of Allstate Life Insurance Company (Depositor) provide for the
indemnification of its Directors, Officers and Controlling Persons, against
expenses, judgements, fines and amounts paid in settlement as incurred by such
person, if such person acted properly. No indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable for negligence or misconduct in the performance of a duty
to the Company, unless a court determines such person is entitled to such
indemnity.
Insofar as indemnification for liability arising out of the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than payment by the registrant of expenses incurred by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of is 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.
29A. RELATIONSHIP OF PRINCIPAL UNDERWRITER TO OTHER INVESTMENT COMPANIES
To be filed by amendment.
29B. PRINCIPAL UNDERWRITER
Name and Principal Business Positions and Offices
Address of Each Such Person with Underwriter
To be filed by amendment.
29C. COMPENSATION OF PRINCIPAL UNDERWRITER
To be filed by amendment.
30. LOCATION OF ACCOUNTS AND RECORDS
The Depositor, Allstate Life Insurance Company, is located at 3100 Sanders Road,
Northbrook, Illinois 60062.
The Distributor, _______________, is located at _______________________________.
Each company maintains those accounts and records required to be maintained
pursuant to Section 31(a) of the Investment Company Act and the rules
promulgated thereunder.
31. MANAGEMENT SERVICES
None.
32. UNDERTAKINGS
Registrant promises to file a post-effective amendment to the 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.
Registrant furthermore agrees to include either 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 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. Finally,
Registrant agrees to deliver any Statement of Additional Information and any
financial statements required to be made available under this Form N-4 promptly
upon written or oral request.
33. REPRESENTATIONS PURSUANT TO SECTION 403(B) OF THE INTERNAL
REVENUE CODE
The Company represents that it is relying upon the letter, dated November 28,
1988, from the Commission staff to the American Council of Life Insurance and
that it intends to comply with the provisions of paragraphs 1-4 of that letter.
34. REPRESENTATION REGARDING CONTRACT EXPENSES
Allstate Life Insurance Company ("Allstate Life") represents that the fees and
charges deducted under the Contracts described in the prospectus included in
this Registration Statement (as amended or supplemented), in the aggregate, are
reasonable in relation to the services rendered, the expenses expected to be
incurred, and the risks assumed by Allstate Life.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, Registrant, Allstate Life Insurance Company Separate Account A, has caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, and its seal to be hereunto affixed and attested, all
in the Township of Northfield, State of Illinois, on the 5th day of February,
1999.
ALLSTATE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
(REGISTRANT)
BY: ALLSTATE LIFE INSURANCE COMPANY
(DEPOSITOR)
(SEAL)
Attest: /s/Brenda D. Sneed By: /s/Michael J. Velotta
------------------ ---------------------
Brenda D. Sneed Michael J. Velotta
Assistant Secretary Vice President, Secretary and
And Assistant General Counsel General Counsel
As required by the Securities Act of 1933, this Registration Statement has been
duly signed below by the following Directors and Officers of Allstate Life
Insurance Company on the 5th day of February, 1999.
*/LOUIS G. LOWER, II Chairman of the Board and Director
- -------------------- (Principal Executive Officer)
Louis G. Lower, II
/s/MICHAEL J. VELOTTA Vice President, Secretary, General
- --------------------- Counsel and Director
Michael J. Velotta
*/THOMAS J. WILSON, II President and Director
- ---------------------- (Principal Operating Officer)
Thomas J. Wilson, II
*/KEVIN R. SLAWIN Vice President and Director
- ----------------- (Principal Financial Officer)
Kevin R. Slawin
*/CASEY J. SYLLA Chief Investment Officer and Director
- ----------------
Casey J. Sylla
*/KEITH A. HAUSCHILDT Assistant Vice President and Controller
- --------------------- (Principal Accounting Officer)
Keith A. Hauschildt
*/MARLA G. FRIEDMAN Vice President and Director
- -------------------
Marla G. Friedman
*/PETER H. HECKMAN Vice President and Director
- ------------------
Peter H. Heckman
*/JOHN C. LOUNDS Vice President and Director
- -----------------
John C. Lounds
*/TIMOTHY H. PLOHG Vice President and Director
- ------------------
Timothy H. Plohg
*/ By Michael J. Velotta, pursuant to Powers of Attorney filed herewith.
<PAGE>
EXHIBIT INDEX
(1) Resolution of the Board of Directors of Allstate Life Insurance Company
authorizing establishment of the Allstate Life Insurance Company Separate
Account A
(4) Form of Contract and Certificate Amendments
(6)(a) Articles of Incorporation of Allstate Life Insurance Company
(6)(b) By-laws of Allstate Life Insurance Company
(99) Powers of Attorney
ALLSTATE LIFE INSURANCE COMPANY SEPARATE ACCOUNT A
RESOLVED, that the Corporation, pursuant to the provisions of Section
245.21 of the Illinois Insurance Code, hereby establishes a separate account
designated Allstate Life Insurance Company Separate Account A (hereafter the
"Separate Account") for the following use and purposes, and subject to such
conditions as hereinafter set forth.
FURTHER RESOLVED, that the Separate Account shall be established for the
purpose of providing for the issuance by the Corporation of such variable
annuity or such other contracts ("Contracts") as the President or designated
representative may designate for such purpose and shall constitute a separate
account into which are allocated amounts paid to or held by the Corporation
under such Contracts.
FURTHER RESOLVED, that the income, gains and losses, whether or not
realized, from assets allocated to the Separate Account shall, in accordance
with the Contracts, be credited to or charged against such account without
regard to other income, gains, or losses of the Corporation.
FURTHER RESOLVED, that the fundamental investment policy of the Separate
Account shall be to invest or reinvest the assets of the Separate Account in
securities issued by an investment company or investment companies registered
under the Investment Company Act of 1940, as amended, as the President or
designated representative may designate pursuant to the provisions of the
Contracts.
FURTHER RESOLVED, that multiple subaccount divisions be, and hereby are,
established within the Separate Account to which net payments under the
Contracts will be allocated in accordance with instructions received from
contractholders, and that the President or designated representative be, and
hereby is, authorized to increase or decrease the number of investment divisions
in the Separate Account as deemed necessary or appropriate.
FURTHER RESOLVED, that the President and Treasurer be, and they hereby are,
authorized to deposit such amount in the Separate Account or in each investment
division thereof as may be necessary or appropriate to facilitate the
commencement of the Separate Account's operations.
FURTHER RESOLVED, that the President of the Corporation or designated
representative be, and hereby is, authorized to change the designation of the
Separate Account to such other designation as the President or designated
representative may deem necessary or appropriate.
FURTHER RESOLVED, that the appropriate officers of the Corporation, with
such assistance from the Corporation's auditors, legal counsel and independent
consultants or others as they may require, be, and they hereby are, authorized
and directed to take all action necessary to: (a) register the Separate Account
as a unit investment trust under the Investment Company Act of 1940, as amended;
(b) register the Contracts in such amounts, which may be an indefinite amount,
as the officers of the Corporation shall from time to time deem appropriate
under the Securities Act of 1933; and (c) take all other actions which are
necessary in connection with the offering of said Contracts for sale and the
operation of the Separate Account in order to comply with the Investment Company
Act of 1940, the Securities Exchange Act of 1934, the Securities Act of 1933,
and other applicable federal laws, including the filing of any amendments to
registration statements, any undertakings, and any applications for exemptions
from the Investment Company Act of 1940 or other applicable federal laws as the
officers of the Corporation shall deem necessary or appropriate.
FURTHER RESOLVED, that the President and the General Counsel, and either of
them with full power to act without the other, hereby are authorized and
empowered to prepare, execute and cause to be filed with the Securities and
Exchange Commission on behalf of the Separate Account and by the Corporation as
sponsor and depositor, a Form of Notification of Registration on Form N-8A, a
Registration Statement registering the Separate Account as an investment company
under the Investment Company Act of 1940, and a Registration Statement under the
Securities Act of 1933.
FURTHER RESOLVED, that the appropriate officers of the Corporation be, and
they hereby are, authorized on behalf of the Separate Account and on behalf of
the Corporation to take any and all action that they may deem necessary or
advisable in order to sell the Contracts, including any registrations, filings
and qualifications of the Corporation, its officers, agents and employees, and
the Contracts under the insurance and securities laws of any of the states of
the United States of America or other jurisdictions, and in connection
therewith, to prepare, execute, deliver and file all such applications, reports,
covenants, resolutions, applications for exemptions, consents to service of
process and other papers and instruments as may be required under such laws, and
to take any and all further action which said officers of the Corporation may
deem necessary or desirable (including entering into whatever agreements and
contracts may be necessary) in order to maintain such registrations or
qualifications for as long as said officers deem them to be in the best
interests of the Separate Account and the Corporation.
<PAGE>
FURTHER RESOLVED, that the General Counsel for the Corporation or
designated representative be, and hereby is, authorized in the names and on
behalf of the Separate Account and the Corporation to execute and file
irrevocable written consents on the part of the Separate Account and of the
Corporation to be used in such states wherein such consents to service of
process may be requisite under the insurance or securities laws therein in
connection with said registration or qualification of Contracts and to appoint
the appropriate state official, or such other person as may be allowed by said
insurance or securities laws, agent of the Separate Account and of the
Corporation for the purpose of receiving and accepting process.
FURTHER RESOLVED, that the President of the Corporation or designated
representative be, and hereby is, authorized to establish criteria by which the
Corporation shall institute procedures to provide for a pass-through of voting
rights to the owners of such Contracts as required by the applicable laws with
respect to securities owned by the Separate Account.
FURTHER RESOLVED, that the President of the Corporation or designated
representative is hereby authorized to execute such agreement or agreements on
such terms and subject to such modifications as deemed necessary or appropriate
(i) with a qualified entity that will be appointed principal underwriter and
distributor for the Contracts and (ii) with one or more qualified banks or other
qualified entities to provide administrative and/or custodial services in
connection with the establishment and maintenance of the Separate Account and
the design, issuance, and administration of the Contracts.
FURTHER RESOLVED, that since it is expected that the Separate Account will
invest in the securities issued by one or more investment companies, the
appropriate officers of the Corporation are hereby authorized to execute
whatever agreement or agreements as may be necessary or appropriate to enable
such investments to be made.
FURTHER RESOLVED, that the appropriate officers of the Corporation, and
each of them, are hereby authorized to execute and deliver all such documents
and papers and to do or cause to be done all such acts and things as they may
deem necessary or desirable to carry out the foregoing resolutions and the
intent and purposes thereof.
Allstate Life
Insurance Company
A Stock Company
Home Office: Allstate Plaza, Northbrook, Illinois 60062-7154
- ------------------------------------------------------------------------------
Flexible Premium Deferred Variable Annuity Certificate
This Certificate is issued to customers of participating financial services
corporations according to the terms of Master Policy number 64895003 issued by
Allstate Life Insurance Company to the Trustee of the Financial Services Group
Insurance Trust. The Trustee of the Financial Services Group Insurance Trust is
called the Master Policyholder. This Certificate is issued in the state of
Illinois and is governed by Illinois law.
Throughout this Certificate, "you" and "your" refer to the Certificate owner(s).
"We", "us" and "our" refer to Allstate Life Insurance Company.
Certificate Summary
This flexible premium deferred variable annuity provides a cash withdrawal
benefit and a death benefit during the Accumulation Phase and periodic income
payments beginning on the Payout Start Date during the Payout Phase.
The dollar amount of income payments or other values provided by this
Certificate, when based on the investment experience of the Variable Account,
will vary to reflect the performance of the Variable Account and are not
guaranteed as to dollar amount.
This Certificate and Master Policy do not pay dividends.
The tax status of this Certificate as it applies to the owner should be reviewed
each year.
PLEASE READ YOUR CERTIFICATE CAREFULLY.
This is a legal contract between the Certificate owner and Allstate Life
Insurance Company.
Return Privilege
If you are not satisfied with this Contract for any reason, you may return it to
us or our agent within 20 days after you receive it. We will refund any purchase
payments allocated to the Variable Account, adjusted to reflect investment gain
or loss from the date of allocation to the date of cancellation, plus any
purchase payments allocated to the Fixed Account Options. (Where required by
state law, we will refund any purchase payments.) If this Contract is qualified
under Section 408 of the Internal Revenue Code, we will refund the greater of
any purchase payments or the Contract Value.
If you have any questions about your Allstate Life variable annuity, please
contact Allstate Life at (800) 366-1411.
Secretary Chairman and Chief Executive Officer
LU4429
Page 1
<PAGE>
TABLE OF CONTENTS
- ------------------------------------------------------
THE PERSONS INVOLVED.................................3
ACCUMULATION PHASE...................................3
PAYOUT PHASE........................................10
INCOME PAYMENT TABLES...............................12
GENERAL PROVISIONS..................................14
LU4429
Page 2
<PAGE>
THE PERSONS INVOLVED
- -------------------------------------------------------------------------------
Owner The person named at the time of application is the Owner of this
Certificate unless subsequently changed. As Owner, you will receive any periodic
income payments, unless you have directed us to pay them to someone else.
You may exercise all rights stated in this Certificate, subject to the rights of
any irrevocable Beneficiary.
You may change the Owner or Beneficiary at any time. You may name a new
Annuitant only upon the death of the current Annuitant. Once we have received a
satisfactory written request for a change of Owner or Beneficiary, the change
will take effect as of the date you signed it. We are not liable for any payment
we make or other action we take before receiving any written request for a
change from you. You may not assign an interest in this Certificate as
collateral or security for a loan.
If the sole surviving Owner dies prior to the Payout Start Date, the Beneficiary
becomes the new Owner. If the sole surviving Owner dies after the Payout Start
Date, the Beneficiary becomes the new Owner and will receive any subsequent
guaranteed income payments.
If more than one person is designated as Owner:
o Owner as used in this Certificate refers to all persons named as Owners,
unless otherwise indicated;
o any request to exercise ownership rights must be signed by all Owners; and
o on the death of any person who is an Owner, the surviving person(s) named
as Owner will continue as Owner.
Annuitant The Annuitant is the person named on the Annuity Data Page. The
Annuitant must be a living individual.
Beneficiary The Beneficiary is the person(s) named on the Annuity Data Page, but
may be changed by the Owner, as described above. We will determine the
Beneficiary from the most recent written request we have received from you. If
you do not name a Beneficiary or if the Beneficiary named is no longer living,
the Beneficiary will be:
o your spouse if living; otherwise
o your children equally if living; otherwise
o your estate.
The Beneficiary may become the Owner under the circumstances described in the
Owner provision above.
Natural Person As used in this Certificate, Natural Person means a living
individual or trust entity that is treated as an individual for Federal Income
Tax purposes under the Internal Revenue Code.
ACCUMULATION PHASE
- --------------------------------------------------------------------------------
Accumulation Phase Defined The "Accumulation Phase" is the first of two phases
during your Certificate. The Accumulation Phase begins on the issue date of the
Certificate stated on the Annuity Data Page. This phase
LU4429
<PAGE>
will continue until the Payout Start Date unless the Certificate is terminated
before that date.
Certificate Year "Certificate Year" is the one year period beginning on the
issue date of the Certificate and on each anniversary of the issue date.
Investment Alternatives The "Investment Alternatives" are the subaccounts of the
Variable Account and the Fixed Account Options. We reserve the right to limit
the availability of the Investment Alternatives for new investments.
Purchase Payments The initial payment is shown on the Annuity Data Page. You may
make subsequent purchase payments during the Accumulation Phase. We may limit
the amount of each purchase payment that we will accept to a minimum of $500 and
a maximum of $1,000,000.
We will invest the purchase payments in the Investment Alternatives you select.
You may allocate any portion of your purchase payment in whole percents from 0%
to 100% or in exact dollar amounts to any of the Investment Alternatives. The
total allocation must equal 100%.
The allocation of the initial purchase payment is shown on the Annuity Data
Page. Allocation of each subsequent purchase payment will be the same as the
allocation for the most recent purchase payment unless you change the
allocation. You may change the allocation of subsequent purchase payments at any
time, without charge, simply by giving us written notice. Any change will be
effective at the time we receive the notice.
Variable Account The "Variable Account" for this Certificate is the Allstate
Life Insurance Company Separate Account A. This account is a separate investment
account to which we allocate assets contributed under this and certain other
certificates. These assets will not be charged with liabilities arising from any
other business we may have.
Variable Subaccounts The Variable Account is divided into subaccounts. Each
subaccount invests solely in the shares of the mutual fund underlying that
subaccount.
Fixed Account Options The Fixed Account Options are the Standard Fixed Account,
the Six-Month Dollar Cost Averaging Fixed Account, and the Twelve-Month Dollar
Cost Averaging Fixed Account.
Standard Fixed Account Money in the Standard Fixed Account will earn interest at
the current rate in effect at the time of allocation or transfer to the Standard
Fixed Account for the guarantee period. We will offer a one year guarantee
period. Other guarantee periods will be offered at our discretion. Subsequent
renewal dates will be on anniversaries of the first renewal date. After the
initial guarantee period, a renewal rate will be declared.
Six-Month Dollar Cost Averaging Fixed Account Money in the Six-Month Dollar Cost
Averaging Fixed Account will earn interest at the annual rate in effect at the
time of allocation to the Six-Month Dollar Cost Averaging Fixed Account. Each
purchase payment and associated interest in the Six-Month Dollar Cost Averaging
Fixed Account must be transferred to subaccounts of the Variable Account in
equal monthly installments within the six-month transfer period. If you
discontinue the Six-Month Dollar Cost Averaging Program before the end of the
transfer period, the remaining balance in the Six-Month Dollar Cost Averaging
Fixed Account will be transferred to the money market subaccount unless you
request a different Investment Alternative. No amount may be transferred into
the Six-Month Dollar Cost Averaging Fixed Account.
LU4429
<PAGE>
Twelve-Month Dollar Cost Averaging Fixed Account Money in the Twelve-Month
Dollar Cost Averaging Fixed Account will earn interest at the annual rate in
effect at the time of allocation to the Twelve-Month Dollar Cost Averaging Fixed
Account. Each purchase payment and associated interest in the Twelve-Month
Dollar Cost Averaging Fixed Account must be transferred to subaccounts of the
Variable Account in equal monthly installments within the twelve-month transfer
period. If you discontinue the Twelve-Month Dollar Cost Averaging Program before
the end of the transfer period, the remaining balance in the Twelve-Month Dollar
Cost Averaging Fixed Account will be transferred to the money market subaccount
unless you request a different Investment Alternative. No amount may be
transferred into the Twelve-Month Dollar Cost Averaging Fixed Account.
Crediting Interest We credit interest daily to money allocated to the Fixed
Account Options at a rate which compounds over one year to the interest rate we
guaranteed when the money was allocated. We will credit interest to the initial
purchase payment allocated to the Fixed Account Options from the issue date. We
will credit interest to subsequent purchase payments allocated to the Fixed
Account Options from the date we receive them at a rate declared by us. We will
credit interest to transfers to the Standard Fixed Account from the date the
transfer is made. The interest rate for the Fixed Account Options will never be
less than the minimum guaranteed rate shown on the Annuity Data Page.
Transfers Prior to the Payout Start Date, you may transfer amounts among
Investment Alternatives. You may make 12 transfers per Certificate Year without
charge. Each transfer after the 12th transfer in any Certificate Year may be
assessed a transfer fee of .50% of the amount transferred. Transfers are subject
to the following restrictions:
o No amount may be transferred into the Six-Month or Twelve-Month Dollar Cost
Averaging Fixed Accounts.
o The maximum amount transferable from the Standard Fixed Account during any
Certificate Year is the greater of 30% of the Standard Fixed Account
balance as of the last Certificate Anniversary or the greatest of any prior
transfer from the Standard Fixed Account. This limitation does not apply to
Dollar Cost Averaging. However, if any interest rate is renewed at a rate
at least one percentage point less than the previous rate, the Certificate
Owner may elect to transfer up to 100% of the Funds receiving that reduced
rate within 60 days of the notification of the interest rate decrease. The
Company reserves the right to defer transfers from the Standard Fixed
Account for up to six months from the date of request.
o The minimum amount that may be transferred from the Standard Fixed Account
or a Subaccount of the Variable Account is $100; if the total amount
remaining in the Standard Fixed Account or the Subaccount of the Variable
Account after a transfer would be less than $100, the entire amount may be
transferred. These limitations do not apply to the Six-Month and
Twelve-Month Dollar Cost Averaging Fixed Accounts.
o We reserve the right to limit the number of transfers in any Certificate
Year or to refuse any transfer request for an Owner or certain Owners if,
in our sole discretion, we believe that:
o excessive trading by such Owner or Owners or a specific transfer
request or group of transfer requests may have a detrimental effect on
Unit Values or the share prices of the underlying mutual funds or
would be to the disadvantage of other Certificate Owners; or
o we are informed by one or more of the underlying mutual funds that the
purchase or redemption of shares is to be restricted because of
excessive trading or a specific transfer or group of transfers is
deemed to have a detrimental effect on share prices of affected
underlying mutual funds.
Such restrictions may be applied in any manner which is reasonably designed
to prevent any use of the transfer right which is considered by us to be to
the disadvantage of the other Certificate Owners.
We reserve the right to waive the transfer restrictions contained in this
Certificate.
Certificate Value On the issue date of the Certificate, the "Certificate Value"
is equal to the initial purchasepayment. After the issue date, the "Certificate
Value" is equal to the sum of:
LU4429
<PAGE>
o the number of Accumulation Units you hold in each subaccount of the
Variable Account multiplied by the Accumulation Unit Value for that
subaccount on the most recent Valuation Date; plus
o the total value you have in the Fixed Account Options.
If you withdraw the entire Certificate Value, you may receive an amount less
than the Certificate Value because a Withdrawal Charge, income tax withholding,
and a premium tax charge may apply.
Valuation Period and Valuation Date A "Valuation Period" is the time interval
between the closing of the New York Stock Exchange on consecutive Valuation
Dates. A "Valuation Date" is any date the New York Stock Exchange is open for
trading.
Accumulation Units and Accumulation Unit Value Amounts which you allocate to a
subaccount of the Variable Account are used to purchase Accumulation Units in
that subaccount. The Accumulation Unit Value for each subaccount at the end of
any Valuation Period is calculated by multiplying the Accumulation Unit Value at
the end of the immediately preceding Valuation Period by the subaccount's Net
Investment Factor for the Valuation Period. The Accumulation Unit Values may go
up or down. Additions or transfers to a subaccount of the Variable Account will
increase the number of Accumulation Units for that subaccount. Withdrawals or
transfers from a subaccount of the Variable Account and Certificate Maintenance
Charges will decrease the number of Accumulation Units for that subaccount.
Net Investment Factor For each Variable Subaccount, the "Net Investment Factor"
for a Valuation Period is equal to:
o The sum of:
o the net asset value per share of the mutual fund underlying the
subaccount determined at the end of the current Valuation Period, plus
o the per share amount of any dividend or capital gain distributions
made by the mutual fund underlying the subaccount during the current
Valuation Period.
o Divided by the net asset value per share of the mutual fund underlying the
subaccount determined as of the end of the immediately preceding Valuation
Period.
o The result is reduced by the Mortality and Expense Risk Charge
corresponding to the portion of the current calendar year that is in the
current Valuation Period.
Charges The charges for this Certificate include Mortality and Expense Risk
Charges, Certificate Maintenance Charges, transfer charges, and taxes. If a
withdrawal is made, the Certificate may also be subject to a Withdrawal Charge.
Mortality and Expense Risk Charge The annualized Mortality and Expense Risk
Charge will never be greater than 1.25%. (See Net Investment Factor for a
description of how this charge is applied.)
Our actual mortality and expense experience will not adversely affect the dollar
amount of variable benefits or other contractual payments or values under this
Certificate.
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<PAGE>
Certificate Maintenance Charge Prior to the Payout Start Date, a Certificate
Maintenance Charge will be deducted from your Certificate Value on each
Certificate anniversary. The charge is deducted only from the subaccounts of the
Variable Account. The charge will be deducted from the money market subaccount;
if the money market subaccount has insufficient funds to cover the Certificate
Maintenance Charge, the balance will be deducted on a pro-rata basis from each
of the other subaccounts of the Variable Account in the proportion that your
value in each bears to your total value in all subaccounts of the Variable
Account, excluding the money market subaccount. A full Certificate Maintenance
Charge will be deducted if the Certificate is terminated on any date other than
a Certificate anniversary. The annualized charge will never be greater than $30
per Certificate Year. The Certificate Maintenance Charge will be waived if the
Certificate Value is greater than $50,000 or if all money is allocated to the
Fixed Account Options on the Certificate anniversary.
After the Payout Start Date the Certificate Maintenance Charge will be deducted
in equal parts from each income payment. The Certificate Maintenance Charge will
be waived if the Certificate Value on the Payout Start Date is $50,000 or more
or if all payments are Fixed Amount Income Payments.
Taxes Any premium tax or income tax withholding relating to this Certificate may
be deducted from purchase payments or the Certificate Value when the tax is
incurred or at a later time.
Withdrawal You have the right to withdraw part or all of your Certificate Value
at any time during the Accumulation Phase. A withdrawal must be at least $50. If
any withdrawal reduces the Certificate Value to less than $1,000, we will treat
the request as a withdrawal of the entire Certificate Value. If you withdraw the
entire Certificate Value, the Certificate will terminate.
You must specify the Investment Alternative(s) from which you wish to make a
withdrawal. When you make a withdrawal, your Certificate Value will be reduced
by the amount paid to you and any applicable Withdrawal Charge and/or taxes. A
Certificate Maintenance Charge will also be deducted if the Certificate is
terminated. Any Withdrawal Charge will be waived on withdrawals taken to satisfy
IRS minimum distribution rules. This waiver is permitted only for withdrawals
which satisfy distributions resulting from this Certificate.
Free Withdrawal Amount Each Certificate Year, the Free Withdrawal Amount is
equal to the greater of earnings not previously withdrawn or 15% of purchase
payments. Each Certificate Year, you may withdraw the Free Withdrawal Amount
without any Withdrawal Charge. Any Free Withdrawal Amount which is not withdrawn
during a Certificate year may not be carried over to increase the Free
Withdrawal Amount available in a subsequent year.
Withdrawal Charge Withdrawals in excess of the Free Withdrawal Amount will be
subject to a Withdrawal Charge as follows:
Payment Year: 1 2 3 4 5 6 7 8 and Later
Percentage: 7% 7% 6% 5% 4% 3% 2% 0%
To determine the Withdrawal Charge, we assume that purchase payments are
withdrawn first, beginning with the oldest payment. When all purchase payments
have been withdrawn, additional withdrawals will not be assessed a Withdrawal
Charge.
For each purchase payment withdrawal, the "Payment Year" in the table is
measured from the date we received the purchase payment. The Withdrawal Charge
is determined by multiplying the percentage corresponding to the Payment Year
times that part of each purchase payment withdrawal that is in excess of the
Free Withdrawal Amount.
Death of Owner If you die prior to the Payout Start Date, the new Owner will be
the surviving Owner. If there is no surviving Owner, the new Owner will be the
Beneficiary(ies). The new Owner will have the options described below.
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<PAGE>
1. If the sole new Owner is your spouse:
a. Your spouse may elect, within 180 days of the date of your death, to
receive the Death Benefit described below in a lump sum.
b. Your spouse may elect, within 180 days of the date of your death, to
receive an amount equal to the Death Benefit paid out under one of the
Income Plans described in the Payout Phase section. The Payout Start
Date must be within one year of your date of death. Income Payments
must be:
i. over the life of your spouse; or
ii. for a guaranteed number of payments from 5 to 30 years but not to
exceed the life expectancy of your spouse; or
iii. Over the life of your spouse with a guaranteed number of payments
from 5 to 30 years but not to exceed the life expectancy of your
spouse.
c. If your spouse does not elect one of the options above, then your
spouse may continue the Certificate in the Accumulation Phase as if
the death had not occurred. If the Certificate is continued in the
Accumulation Phase, the following conditions apply:
o On the day the Certificate is continued, the Certificate Value
will be the Death Benefit as determined at the end of the
Valuation Period during which we received due proof of death.
o The surviving spouse may make a single withdrawal of any amount
within one year of the date of death without incurring a
Withdrawal Charge.
o Prior to the Payout Start Date, the Death Benefit of the
continued Certificate will be the greater of:
o the sum of all purchase payments reduced by a withdrawal
adjustment, as defined in the Death Benefit provision; or
o the Certificate Value on the date we determine the Death Benefit;
or
o the Maximum Anniversary Value, as defined in the Death Benefit
provision, with the following changes:
o "Date of Issue" is replaced by the date the Certificate is
continued; and
o "Initial purchase payment" is replaced with the Death Benefit as
determined at the end of the Valuation Period during which we
received due proof of death.
2. If the new Owner is not your spouse but is a Natural Person, then this new
Owner has the following options:
a. The new Owner may elect, within 180 days of the date of your death, to
receive the death benefit described below in a lump sum.
b. The new Owner may elect, within 180 days of the date of your death, to
receive an amount equal to the Death Benefit paid out under one of the
Income Plans described in the Payout Phase section. The Payout Start
Date must be within one year of your date of death. Income Payments
must be:
LU4429
<PAGE>
i. over the life of the new Owner; or
ii. for a guaranteed number of payments from 5 to 30 years but not to
exceed the life expectancy of the new Owner; or
iii. Over the life of the new Owner with a guaranteed number of
payments from 5 to 30 years but not to exceed the life expectancy
of the new Owner.
c. The new Owner may elect to receive the Settlement Value payable in a
lump sum within 5 years of your date of death.
3. If the new Owner is a corporation or other non-Natural Person:
a. The non-natural Owner may elect, within 180 days of your death, to
receive the Death Benefit in a lump sum.
b. The non-natural Owner may elect to receive the Settlement Value
payable in a lump sum within 5 years of your date of death.
If any new Owner is a non-Natural Person, all new Owners will be considered to
be be non-Natural Persons for the above purposes.
If the new Owner who is not your spouse does not make one of the above described
elections, the Settlement Value must be withdrawn by the new Owner on or before
the mandatory distribution date 5 years after your date of death. Under any of
these options, all ownership rights are available to the new Owner from the date
of your death to the date on which the Death Benefit or Settlement Value is
paid. We reserve the right to extend beyond 180 days the period when we will pay
the Death Benefit.
Death of Annuitant If the Annuitant who is not also the Owner dies prior to the
Payout Start Date, the Owner must elect an applicable option listed below. If
the option selected is 1(a) or 1(b)(ii) below, the new Annuitant will be the
youngest Owner, unless the Owner names a different Annuitant.
1. If the Owner is a Natural Person:
a. The Owner may choose to continue this Certificate as if the death had
not occurred; or
b. If we receive due proof of death within 180 days of the date of the
Annuitant's death, then the Owner may alternatively choose to:
i. Receive the Death Benefit in a lump sum; or
ii. Apply the Death Benefit to an Income Plan which must begin within
one year of the date of death.
2. If the Owner is a non-Natural Person:
a. The non-natural Owner may elect, within 180 days of the Annuitant's
date of death, to receive the Death Benefit in a lump sum; or
b. The non-natural Owner may elect to receive the Settlement Value
payable in a lump sum within 5 years of the Annuitant's date of death.
If the non-natural Owner does not make one of the above described elections, the
Settlement Value must be withdrawn by the non-natural Owner on or before the
mandatory distribution date 5 years after the Annuitant's death.
Under any of these options, all ownership rights are available to the Owner from
the date of the Annuitant's death to the date on which the Death Benefit or
Settlement Value is paid. We reserve the right to extend beyond 180 days the
period when we will pay the Death Benefit.
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<PAGE>
Death Benefit Except as defined above when the surviving spouse continues the
Certificate, prior to the Payout Start Date, the Death Benefit is equal to the
greatest of the following Death Benefit alternatives:
o the sum of all purchase payments reduced by a withdrawal adjustment,
as defined below; or
o the Certificate Value on the date we determine the Death Benefit; or
o the Maximum Anniversary Value.
o On the date of issue, the Maximum Anniversary Value is equal to the
initial purchase payment.
o After issue, the Maximum Anniversary Value is recalculated when a
purchase payment or withdrawal is made or on a certificate anniversary
as follows:
A. For purchase payments, the Maximum Anniversary Value is equal to
the most recently calculated Maximum Anniversary Value plus the
purchase payment.
B. For withdrawals, the Maximum Anniversary Value is equal to the
most recently calculated Maximum Anniversary Value reduced by a
withdrawal adjustment, as defined below.
C. On each certificate anniversary, the Maximum Anniversary Value is
equal to the greater of the Certificate Value or the most
recently calculated Maximum Anniversary Value.
In the absence of any withdrawals or purchase payments, the
Maximum Anniversary Value will be the greatest of all anniversary
Certificate Values on or prior to the date we calculate the death
benefit.
The Maximum Anniversary Value will be recalculated until the
first Certificate Anniversary after the 80th birthday of the
oldest Owner or, if no Owner is a living individual, the
Annuitant. After that date, the Maximum Anniversary Value will be
recalculated only for purchase payments and withdrawals. The
Maximum Anniversary Value will never be greater than the maximum
death benefit allowed by any non-forfeiture laws which govern
this Certificate.
The withdrawal adjustment is equal to (a) divided by (b), with the result
multiplied by (c), where:
(a) = the withdrawal amount.
(b) = the Certificate Value immediately prior to the withdrawal.
(c) = the value of the applicable Death Benefit alternative
immediately prior to the withdrawal.
We will determine the value of the Death Benefit as of the end of the Valuation
Period during which we receive a complete request for payment of the Death
Benefit. A complete request includes due proof of death.
Settlement Value The Settlement Value is the same amount that would be paid in
the event of a full withdrawal of the Certificate Value. We will calculate the
Settlement Value at the end of the Valuation Period coinciding with the
requested distribution date for payment or on the mandatory distribution date of
5 years after the date of death, whichever is earlier.
PAYOUT PHASE
- --------------------------------------------------------------------------------
Payout Phase Defined The "Payout Phase" is the second of the two phases during
your Certificate. During this phase the Certificate Value less any applicable
taxes is applied to the Income Plan you choose and is paid out as provided in
that plan.
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<PAGE>
The Payout Phase begins on the Payout Start Date. It continues until we make the
last payment as provided by the Income Plan chosen.
Payout Start Date The "Payout Start Date" is the date the Certificate Value less
any applicable taxes is applied to an Income Plan. The anticipated Payout Start
Date is shown on the Annuity Data Page. You may change the Payout Start Date by
writing to us at least 30 days prior to this date.
The Payout Start Date must be on or before the later of:
o the Annuitant's 90th birthday; or
o the 10th anniversary of the Certificate's issue date.
Income Plans An "Income Plan" is a series of payments on a scheduled basis to
you or to another person designated by you. The Certificate Value on the Payout
Start Date less any applicable taxes, will be applied to your Income Plan choice
from the following list:
1. Life Income with Guaranteed Payments. We will make payments for as long as
the Annuitant lives. If the Annuitant dies before the selected number of
guaranteed payments have been made, we will continue to pay the remainder
of the guaranteed payments.
2. Joint and Survivor Life Income with Guaranteed Payments. We will make
payments for as long as either the Annuitant or joint Annuitant, named at
the time of Income Plan selection, lives. If both the Annuitant and the
joint Annuitant die before the selected number of guaranteed payments have
been made, we will continue to pay the remainder of the guaranteed
payments.
3. Guaranteed Number of Payments. We will make payments for a specified number
of months beginning on the Payout Start Date. These payments do not depend
on the Annuitant's life. The number of months guaranteed may be from 60 to
360. Income payments for less than 120 months may be subject to a
Withdrawal Charge.
We reserve the right to make available other Income Plans.
Income Payments Income payment amounts may be Variable Amount Income Payments,
Fixed Amount Income Payments, or both. The method of calculating the initial
payment is different for the two types of payments. The Certificate Maintenance
Charge will be deducted in equal payments from each income payment. The
Certificate Maintenance Charge will be waived if the Certificate Value on the
Payout Start Date is $50,000 or more or if all payments are Fixed Amount Income
Payments.
Variable Amount Income Payments Variable Amount Income Payments will vary to
reflect the performance of the Variable Account. The portion of the initial
income payment based upon a particular Variable subaccount is determined by
applying the amount of the Certificate Value in that subaccount on the Payout
Start Date, less any applicable premium tax, to the appropriate value from the
Income Payment Table. This portion of the initial income payment is divided by
the Annuity Unit Value on the Payout Start Date for that Variable subaccount to
determine the number of Annuity Units from that subaccount which will be used to
determine subsequent income payments. Unless transfers are made between
subaccounts, each subsequent income payment from that subaccount will be that
number of Annuity Units times the Annuity Unit Value for the subaccount for the
Valuation Date on which the income payment is made.
Annuity Unit Value The Annuity Unit Value for each subaccount of the Variable
Account at the end of any Valuation Period is calculated by:
LU4429
<PAGE>
o multiplying the Annuity Unit Value at the end of the immediately preceding
Valuation Period by the subaccount's Net Investment Factor during the
period; and then
o dividing the result by 1.000 plus the assumed investment rate for the
period. The assumed investment rate is an effective annual rate of 3%. We
reserve the right to offer an assumed investment rate greater than 3%.
Fixed Amount Income Payments The income payment amount derived from any monies
allocated to the Fixed Account Options during the Accumulation Phase is fixed
for the duration of the Income Plan. The Fixed Amount Income Payment is
calculated by applying the portion of the Certificate Value in the Fixed Account
Options on the Payout Start Date, less any applicable premium tax, to the
greater of the appropriate value from the Income Payment Table selected or such
other value as we are offering at that time.
Annuity Transfers After the Payout Start Date, no transfers may be made from the
Fixed Amount Income Payment. Transfers between subaccounts of the Variable
Account may not be made for six months after the Payout Start Date. Transfers
from the Variable Amount Income Payment to the Fixed Amount Income Payment may
be made only if Income Plan 3 has been chosen, and may not be made for six
months after the Payout Start Date. Transfers permitted above may be made once
every six months after the initial six-month waiting period concludes.
Payout Terms and Conditions The income payments are subject to the following
terms and conditions:
o If no purchase payments have been received for two years and the
Certificate Value is less than $2,000, or not enough to provide an initial
payment of at least $20, we reserve the right to:
o change the payment frequency to make the payment at least $20; or
o terminate the Certificate and pay you the Certificate Value less any
applicable taxes in a lump sum.
o If we do not receive a written choice of an Income Plan from you at least
30 days before the Payout Start Date, the Income Plan will be Life Income
with Guaranteed Payments for 120 months.
o If you choose an Income Plan which depends on any person's life, we may
require:
o proof of age and sex before income payments begin; and
o proof that the Annuitant or joint Annuitant is still alive before we
make each payment.
o After the Payout Start Date, the Income Plan cannot be changed and
withdrawals cannot be made unless income payments are being made from the
Variable Account under Income Plan 3. You may terminate the income payments
being made from the Variable Account under Income Plan 3 at any time and
withdraw their value, subject to Withdrawal Charges.
o If any Owner dies during the Payout Phase, the remaining income payments
will be paid to the successor Owner as scheduled.
INCOME PAYMENT TABLES
- -----------------------------------------------------------------------------
The initial income payment will be at least the amount based on the adjusted age
of the Annuitant(s) and the tables below, less any federal income taxes which
are withheld. The adjusted age is the actual age on the Payout Start Date
reduced by one year for each six full years between January 1, 1983 and the
Payout Start Date. Income payments for ages and guaranteed payment periods not
shown below will be determined on a basis consistent with that used to determine
those that are shown. The Income Payment Tables are based on 3.0% interest and
the 1983a Annuity Mortality Tables.
LU4429
<PAGE>
<TABLE>
<CAPTION>
Income Plan 1 - Life Income with Guaranteed Payments for 120 Months
Monthly Income Payment for each $1,000 Applied to this Income Plan
- -----------------------------------------------------------------------------------------------------------------------------
Annuitant's Annuitant's Annuitant's
Age Male Female Age Male Female Age Male Female
- ------------------ ------------------------ ----------------- ----------------------- ----------------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 $3.43 $3.25 49 $4.15 $3.82 63 $5.52 $4.97
36 3.47 3.28 50 4.22 3.88 64 5.66 5.09
37 3.51 3.31 51 4.29 3.94 65 5.80 5.22
38 3.55 3.34 52 4.37 4.01 66 5.95 5.35
39 3.60 3.38 53 4.45 4.07 67 6.11 5.49
40 3.64 3.41 54 4.53 4.14 68 6.27 5.64
41 3.69 3.45 55 4.62 4.22 69 6.44 5.80
42 3.74 3.49 56 4.71 4.29 70 6.61 5.96
43 3.79 3.53 57 4.81 4.38 71 6.78 6.13
44 3.84 3.58 58 4.92 4.46 72 6.96 6.31
45 3.90 3.62 59 5.02 4.55 73 7.13 6.50
46 3.96 3.67 60 5.14 4.65 74 7.31 6.69
47 4.02 3.72 61 5.26 4.75 75 7.49 6.88
48 4.08 3.77 62 5.39 4.86
================== ======================== ================= ======================= ================= =========================
</TABLE>
<TABLE>
<CAPTION>
Income Plan 2 - Joint and Survivor Life Income with Guaranteed Payments for 120 Months
Monthly Income Payment for each $1,000 Applied to this Income Plan
- -----------------------------------------------------------------------------------------------------------------------------
Female Annuitant's Age
Male
Annuitant's 35 40 45 50 55 60 65 70 75
Age
- ------------------- ----------- ------------- ------------- ----------- ---------- ----------- ----------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 $3.09 $3.16 $3.23 $3.28 $3.32 $3.36 $3.39 $3.40 $3.42
40 3.13 3.22 3.31 3.39 3.46 3.51 3.56 3.59 3.61
45 3.17 3.28 3.39 3.50 3.60 3.69 3.76 3.81 3.85
50 3.19 3.32 3.45 3.60 3.74 3.87 3.98 4.07 4.14
55 3.21 3.35 3.51 3.68 3.87 4.06 4.23 4.37 4.48
60 3.23 3.37 3.55 3.75 3.98 4.23 4.47 4.70 4.88
65 3.24 3.39 3.57 3.80 4.07 4.37 4.71 5.04 5.34
70 3.24 3.40 3.59 3.83 4.13 4.48 4.90 5.36 5.81
75 3.25 3.41 3.61 3.86 4.17 4.56 5.04 5.61 6.22
=================== =========== =========== =========== =========== ============= =========== ============ ============ =======
</TABLE>
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<PAGE>
Income Plan 3 - Guaranteed Number of Payments
Monthly Income Payment for each
Specified Period $1,000 Applied to this Income Plan
- -------------------------------- ----------------------------------------------
10 Years $9.61
11 Years 8.86
12 Years 8.24
13 Years 7.71
14 Years 7.26
15 Years 6.87
16 Years 6.53
17 Years 6.23
18 Years 5.96
19 Years 5.73
20 Years 5.51
================================ ==============================================
GENERAL PROVISIONS
- -------------------------------------------------------------------------------
The Entire Contract The entire contract consists of this Certificate, the Master
Policy, the Master Policy application, any written application, and any
Certificate endorsements and riders.
All statements made in a written application are representations and not
warranties. No statement will be used by us in defense of a claim or to void the
Certificate unless it is included in a written application.
We may not modify this Certificate without your consent, except to make it
comply with any changes in the Internal Revenue Code or as required by any other
applicable law. Only our officers may change this Certificate. No other
individual may do this.
Master Policy Amendment or Termination The Master Policy may be amended by us,
terminated by us, or terminated by the Master Policyholder without the consent
of any other person. No termination completed after the issue date of this
Certificate will adversely affect your rights under this Certificate.
Incontestability We will not contest the validity of this Certificate after the
issue date.
Misstatement of Age or Sex If any age or sex has been misstated, we will pay the
amounts which would have been paid at the correct age and sex.
If we find the misstatement of age or sex after the income payments begin, we
will:
o pay all amounts underpaid including interest calculated at an effective
annual rate of 6%; or
o stop payments until the total payments are equal to the corrected amount.
Annual Statement At least once a year, prior to the Payout Start Date, we will
send you a statement containing Certificate Value information. The effective
date of the information in the annual statement will not be more than two months
before date of mailing. We will provide you with Certificate Value information
at any time upon request. The information presented will comply with any
applicable law.
LU4429
<PAGE>
Settlements We may require that this Certificate be returned to us prior to any
settlement. We must receive due proof of death of the Owner or Annuitant prior
to settlement of a death claim. Due proof of death is one of the following:
o a certified copy of a death certificate; or
o a certified copy of a decree of a court of competent jurisdiction as to a
finding of death; or
o any other proof acceptable to us.
Any full withdrawal or Death Benefit under this Certificate will not be less
than the minimum benefits required by any statute of the state in which the
Certificate is delivered.
Deferment of Payments We will pay any amounts due from the Variable Account
under this Certificate within seven days, unless:
o the New York Stock Exchange is closed for other than usual weekends or
holidays, or trading on such Exchange is restricted;
o an emergency exists as defined by the Securities and Exchange Commission;
or
o the Securities and Exchange Commission permits delay for the protection of
Certificate holders.
We reserve the right to postpone payments or transfers from the Fixed Account
options for up to six months. If we elect to postpone payments from the Fixed
Account for 30 days or more, we will pay interest as required by applicable law.
Any interest would be payable from the date the withdrawal request is received
by us to the date the payment is made.
Variable Account Modifications We reserve the right, subject to applicable law,
to make additions to, deletions from, or substitutions for the mutual fund
shares underlying the subaccounts of the Variable Account. We will not
substitute any shares attributable to your interest in a subaccount of the
Variable Account without notice to you and prior approval of the Securities and
Exchange Commission, to the extent required by the Investment Company Act of
1940, as amended.
We reserve the right to establish additional subaccounts of the Variable
Account, each of which would invest in shares of a mutual fund. You may then
instruct us to allocate purchase payments or transfers to such subaccounts,
subject to any terms set by us or the mutual fund.
In the event of any such substitution or change, we may by endorsement, make
such changes as may be necessary or appropriate to reflect such substitution or
change.
If we deem it to be in the best interests of persons having voting rights under
the certificates, the Variable Account may be operated as a management company
under the Investment Company Act of 1940, as amended, or it may be deregistered
under such Act in the event such registration is no longer required.
LU4429
<PAGE>
ANNUITY DATA
- ----------------------------------------------------------------------
CERTIFICATE NUMBER:..........................................444444444
ISSUE DATE:...........................................January 15, 1999
INITIAL PURCHASE PAYMENT:...................................$10,000.00
IRA
INITIAL ALLOCATION OF PURCHASE PAYMENT:
ALLOCATED
AMOUNT (%)
VARIABLE SUB-ACCOUNTS
Sub-account 1 10%
Sub-account 2 15%
Sub-account 3 15%
Sub-account 4 10%
<TABLE>
<CAPTION>
RATE
ALLOCATED GUARANTEED GUARANTEED
AMOUNT (%) INTEREST RATE THROUGH
---------- ------------- ----------
<S> <C> <C> <C>
STANDARD FIXED ACCOUNT
1 Year Guarantee Period 10% 5.00% 01/15/2000
DOLLAR COST AVERAGING FIXED ACCOUNTS
Six-Month DCA Account 20% 5.00% 07/15/1999
Twelve-Month DCA Account 20% 5.00% 01/15/2000
</TABLE>
MINIMUM GUARANTEED RATE
Fixed Account Options:.....................3.00%
PAYOUT START DATE:......................January 15, 2054
OWNER:..........................................John Doe
................................................Jane Doe
ANNUITANT:......................................John Doe
AGE AT ISSUE:.................................35
SEX:........................................Male
RELATIONSHIP
BENEFICIARY TO OWNER PERCENTAGE
- ----------- ------------ ----------
Jane Doe Wife 100%
RELATIONSHIP
CONTINGENT BENEFICIARY TO OWNER PERCENTAGE
- ---------------------- ------------ ----------
Susan Doe Daughter 100%
DPA4429
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY
(herein called "we" or "us")
Enhanced Beneficiary Protection Rider
This rider was issued because you selected the Enhanced Beneficiary Protection
Rider.
As used in this rider, "Contract" means the Contract or Certificate to which
this rider is attached.
For purposes of this rider, "Rider Date" is the date this rider was issued as a
part of your Contract: xx/xx/xxxx
The Death Benefit provision of your Contract is modified as follows:
I. The Death Benefit will be the greatest of the values stated in your
Contract, or the value of the Enhanced Beneficiary Protection Rider.
The Enhanced Beneficiary Protection Rider is calculated as follows:
o On the Rider Date, the Enhanced Beneficiary Protection Rider is equal
to the Contract Value.
o After the Rider Date, the Enhanced Beneficiary Protection Rider plus
any subsequent purchase payments and less a withdrawal adjustment for
any subsequent withdrawals will accumulate daily at a rate equivalent
to 5% per year until the earlier of:
1. the date we determine the Death Benefit, or
2. the first Contract Anniversary following the 80th birthday of the
oldest Owner or, if no Owner is a living individual, the oldest
Annuitant.
Withdrawal Adjustment
The adjustment is equal to (1) divided by (2), with the result
multiplied by (3), where:
(1) = the withdrawal amount.
(2) = the Contract Value immediately prior to the withdrawal.
(3) = the most recently calculated Income Base.
The Enhanced Beneficiary Protection Rider will never be greater than
the maximum death benefit allowed by any nonforfeiture laws which
govern this Contract.
II. The Mortality and Expense Risk Charge provision of your Contract is
modified as follows:
LU4430 (11/98)
<PAGE>
On and after the Rider Date, the maximum annualized Mortality and Expense
Risk Charge is increased by 0.15% for this rider.
Except as amended by this rider, the Contract remains unchanged.
Secretary Chairman and Chief Executive Officer
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY
(herein called "we" or "us")
Retirement Income Guarantee Rider 1
This rider was issued because you selected Retirement Income Guarantee Rider 1.
As used in this rider, "Contract" means the Contract or Certificate to which
this rider is attached.
For purposes of this rider, "Rider Date" is the date this rider was made a part
of your Contract: xx/xx/xxxx
The following provision is added to your Contract.
Retirement Income Guarantee Rider 1
Qualifications
On the Payout Start Date, the Owner may choose to receive income payments
defined in the Retirement Income Guarantee Rider 1 provision if all of the
following conditions are met.
o The Owner elects a Payout Start Date that is on or after the tenth
anniversary of the Rider Date;
o The Payout Start Date occurs during the 30 day period following a Contract
anniversary;
o The Income Base is applied to Fixed Amount Income Payments; and
o The selected Income Plan provides payments guaranteed for either single or
joint life with a period certain of at least:
o 10 years, if the youngest Annuitant's age is 80 or less on the date
the amount is applied, or
o 5 years, if the youngest Annuitant's age is greater than 80 on the
date the amount is applied.
Income Base
The Income Base is used to determine the value of the Guaranteed Income Benefit.
The Income Base is determined as follows:
o On the Rider Date, the Income Base is equal to the Contract Value.
o After the Rider Date, the Income Base is recalculated when a purchase
payment or withdrawal is made as follows:
o For purchase payments, the Income Base is equal to the most recently
calculated Income Base plus the purchase payment.
o For withdrawals, the Income Base is equal to the most recently
calculated Income Base reduced by a withdrawal adjustment.
LU4431 Page 1
<PAGE>
In the absence of any withdrawals or purchase payments, the Income Base will be
equal to the Contract Value on the Rider Date.
The Income Base is used solely for the purpose of calculating the Guaranteed
Income Benefit and does not provide a contract value or guarantee performance of
any investment option.
Withdrawal Adjustment
The adjustment is equal to (1) divided by (2), with the result
multiplied by (3), where:
(1) = the withdrawal amount.
(2) = the Contract Value immediately prior to the withdrawal.
(3) = the most recently calculated Income Base.
Guaranteed Income Benefit
The Guaranteed Income Benefit amount is determined by applying the Income Base
less any applicable taxes to the guaranteed rates for the Income Plan elected by
the Owner. The Income Plan selected must satisfy the conditions defined in
Qualifications above. The rates are the guaranteed rates defined in the Income
Payment Tables section of the Contract for either a single or joint life with a
period certain.
On the Payout Start Date, the income payment will be the greater of the
Guaranteed Income Benefit and the income payment provided in the Fixed Amount
Income Payments provision of the Contract.
Rider Fee
On or before the Maturity Date, the Rider Fee is deducted on each contract
anniversary. The amount of the Rider Fee is equal to .05% multiplied by the
Income Base in effect on that Contract Anniversary. The fee is deducted only
from the subaccounts of the Variable Account. The fee will be deducted on a
pro-rata basis from each of the subaccounts of the Variable Account in the
proportion that your value in each bears to your total value in all subaccounts
of the Variable Account.
In the case of full withdrawal of the contract value on any date other than the
contract anniversary,we will deduct the Rider Fee from the amount paid upon
withdrawal. In the case of a full withdrawal, the Rider Fee is equal to .05%
multiplied by the Income Base immediately prior to withdrawal. The Rider Fee
will not be deducted during the Payout Phase. For purposes of determining the
Rider Fee, income payment commencement shall be treated as a full withdrawal.
Accumulation Units
The "Accumulation Units and Accumulation Unit Value" provision of your Contract
is amended to read as follows:
Accumulation Units and Accumulation Unit Value Amounts which you
allocate to a subaccount of the Variable Account are used to purchase
Accumulation Units in that subaccount. The Accumulation Unit Value for
each subaccount at the end of any Valuation Period is calculated by
multiplying the Accumulation Unit Value at the end of the immediately
preceding Valuation Period by the subaccount's Net Investment Factor
for the Valuation Period. The Accumulation Unit Values may go up or
down. Additions or transfers to a subaccount of the Variable Account
will increase the number of Accumulation
LU4431 Page 2
<PAGE>
Units for that subaccount. Withdrawals or transfers from a subaccount
of the Variable Account, Contract Maintenance Charges, and Rider Fees
will decrease the number of Accumulation Units for that subaccount.
Except as amended in this Rider, the Contract remains unchanged.
Secretary Chairman and Chief Executive Officer
LU4431 Page 3
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY
(herein called "we" or "us")
Retirement Income Guarantee Rider 2
This rider was issued because you selected Retirement Income Guarantee Rider 2.
As used in this rider, "Contract" means the Contract or Certificate to which
this rider is attached.
For purposes of this rider, "Rider Date" is the date this rider was made a part
of your Contract: xx/xx/xxxx
The following provision is added to your Contract.
Retirement Income Guarantee Rider 2
Qualifications
On the Payout Start Date, the Owner may choose to receive income payments
defined in the Retirement Income Guarantee Rider 2 provision if all of the
following conditions are met.
o The Owner elects a Payout Start Date that is on or after the tenth
anniversary of the Rider Date;
o The Payout Start Date occurs during the 30 day period following a Contract
anniversary;
o The Income Base is applied to Fixed Amount Income Payments; and
o The selected Income Plan provides payments guaranteed for either single or
joint life with a period certain of at least:
o 10 years, if the youngest Annuitant's age is 80 or less on the date
the amount is applied, or
o 5 years, if the youngest Annuitant's age is greater than 80 on the
date the amount is applied.
Income Base
The Income Base is the greater of Income Base A and Income Base B.
Income Base A.
o On the Rider Date, Income Base A is equal to the Contract Value.
o After the Rider Date, Income Base A is recalculated as follows on the
Contract Anniversary and when a purchase payment or withdrawal is
made:
o For purchase payments, Income Base A is equal to the most
recently calculated Income Base plus the purchase payment.
LU4432 (11/98)
<PAGE>
o For withdrawals, Income Base A is equal to the most recently
calculated Income Base reduced by a withdrawal adjustment.
o On each Contract anniversary, Income Base A is equal to the
greater of the Contract Value or the most recently calculated
Income Base A.
In the absence of any withdrawals or purchase payments, Income Base A will
be the greatest of the Contract Value on the Rider Date and all contract
anniversary Contract Values between the Rider Date and the Payout Start
Date.
Income Base A will be recalculated for purchase payments, for withdrawals
and on Contract Anniversaries until the first Contract Anniversary after
the 85th birthday of the oldest Owner or, if no Owner is a living
individual, the oldest Annuitant.
After that date, Income Base A will be recalculated only for purchase
payments and withdrawals.
Income Base A is used solely for the purpose of calculating the Guaranteed
Income Benefit and does not provide a contract value or guarantee
performance of any investment option.
Income Base B.
On the Rider Date, Income Base B is equal to the Contract Value. After the
Rider Date, Income Base B plus any subsequent purchase payments and less a
withdrawal adjustment for any subsequent withdrawals will accumulate daily
at a rate equivalent to 6% per year until the first day of the month
following the oldest owner's or, if the owner is not a living individual,
the annuitant's 85th birthday.
Withdrawal Adjustment
The adjustment is equal to (1) divided by (2), with the result
multiplied by (3), where:
<PAGE>
(1) = the withdrawal amount.
(2) = the Contract Value immediately prior to the withdrawal.
(3) = the most recently calculated Income Base.
Guaranteed Income Benefit
The Guaranteed Income Benefit amount is determined by applying the Income
Base less any applicable taxes to the guaranteed rates for the Income Plan
elected by the Owner. The Income Plan selected must satisfy the conditions
defined in Qualifications above. The rates are the guaranteed rates defined
in the Income Payment Tables section of the Contract for either a single or
joint life with a period certain.
On the Payout Start Date, the income payment will be the greater of the
Guaranteed Income Benefit and the income payment provided in the Fixed
Amount Income Payments provision of the Contract.
Rider Fee
On or before the Maturity Date, the Rider Fee is deducted on each contract
anniversary. The amount of the Rider Fee is equal to .30% multiplied by the
Income Base in effect on that Contract Anniversary. The fee is deducted
only from the subaccounts of the Variable Account. The fee will be deducted
on a pro-rata basis from each of the subaccounts of the Variable Account in
the proportion that your value in each bears to your total value in all
subaccounts of the Variable Account.
In the case of full withdrawal of the contract value on any date other than
the contract anniversary,we will deduct the Rider Fee from the amount paid
upon withdrawal. In the case of a full withdrawal, the Rider Fee is equal
to .30% multiplied by the Income Base immediately prior to withdrawal. The
Rider Fee will not be deducted during the Payout Phase. For purposes of
determining the Rider Fee, income payment commencement shall be treated as
a full withdrawal.
Accumulation Units
The "Accumulation Units and Accumulation Unit Value" provision of your
Contract is amended to read as follows:
LU4432 (11/98)
<PAGE>
Accumulation Units and Accumulation Unit Value Amounts which you allocate
to a subaccount of the Variable Account are used to purchase Accumulation
Units in that subaccount. The Accumulation Unit Value for each subaccount
at the end of any Valuation Period is calculated by multiplying the
Accumulation Unit Value at the end of the immediately preceding Valuation
Period by the subaccount's Net Investment Factor for the Valuation Period.
The Accumulation Unit Values may go up or down. Additions or transfers to a
subaccount of the Variable Account will increase the number of Accumulation
Units for that subaccount. Withdrawals or transfers from a subaccount of
the Variable Account, Contract Maintenance Charges, and Rider Fees will
decrease the number of Accumulation Units for that subaccount.
Except as amended in this Rider, the Contract remains unchanged.
Michael J. Velotta Louis G. Lower, II
Secretary Chairman and Chief Executive
Officer
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY
(herein called "we" or "us")
Amendatory Endorsement for Waiver of Charges
As used in this endorsement, "Contract" means the Contract or Certificate to
which this endorsement is attached.
The benefits provided by this endorsement do not impact any tax liabilities or
IRS penalties incurred as a result of a withdrawal. You are responsible for all
such liabilities and penalties.
The following provisions are added to your Contract:
Waiver for Confinement in Long Term Care Facility or Hospital We will waive any
applicable Withdrawal Charge and Market Value Adjustment prior to the Payout
Start Date if at least 30 days after the issue date any owner, or, if the owner
is not a living individual, the annuitant is first confined to a Long Term Care
Facility or Hospital under the following conditions:
o confinement is for at least 90 consecutive days;
o confinement is prescribed by a Physician;
o confinement is Medically Necessary; and
o the request for a withdrawal and Due Proof of confinement are received by
us no later than 90 days after discharge.
"Physician" is a licensed medical doctor (M.D.) or a licensed doctor of
osteopathy (D.O.) practicing within the scope of his or her license. Physician
does not include the individual, a spouse, children, parents, grandparents,
grandchildren, siblings, or in-laws.
"Due Proof" includes, but is not limited to, a letter signed by a Physician
stating the dates the owner or annuitant was confined, the name and location of
the Long Term Care Facility or Hospital, a statement that the confinement was
Medically Necessary, and, if released, the date the owner or annuitant was
released from the Long Term Care Facility or Hospital.
"Medically Necessary" means appropriate and consistent with the diagnosis in
accord with accepted standards of practice, and which could not have been
omitted without adversely affecting the individual's condition.
"Long Term Care Facility" is a facility which:
1. is located in the United States or its territories;
2. is licensed by the jurisdiction in which it is located;
3. provides custodial care under the supervision of a registered nurse (R.N.);
and
4. can accommodate three or more persons.
"Hospital" is a facility which:
1. is licensed as a hospital by the jurisdiction in which it is located;
2. is supervised by a staff of licensed physicians;
3. provides nursing services 24 hours a day by, or under the supervision of, a
registered nurse (R.N.);
4. operates primarily for the care and treatment of sick or injured persons as
inpatients for a charge; and
5. has access to medical, diagnostic and major surgical facilities.
Waiver for Terminal Illness We will waive any applicable Withdrawal Charge and
Market Value Adjustment prior to the Payout Start Date if at least 30 days after
the issue date any owner, or, if the owner is not a living individual, the
annuitant is first diagnosed by a Physician as having a Terminal Illness. The
request for the withdrawal must be received by us at least 30 days after the
issue date. Due Proof of the diagnosis must be given to us prior to, or at the
time of, the withdrawal request. We may require a second opinion at our expense
by a Physician chosen by us. In the event that the first and second Physicians
disagree, we will require a third opinion at our expense by a Physician chosen
by us. We will honor a consensus of any two of the three Physicians.
"Physician" is a licensed medical doctor (M.D.) or a licensed doctor of
osteopathy (D.O.) practicing within the scope of his or her license.
LU4433 (12/98)
<PAGE>
Physician does not include the individual, a spouse, children, parents,
grandparents, grandchildren, siblings, or in-laws.
"Due Proof" includes, but is not limited to, a letter signed by a Physician
stating that the owner or annuitant has a Terminal Illness and the date the
Terminal Illness was first diagnosed.
"Terminal Illness" is a condition which is expected to result in death within
one year from the date of onset for 80% of the diagnosed cases.
Waiver for Unemployment You may request a one time waiver of any applicable
Withdrawal Charge and Market Value Adjustment on a partial or full withdrawal
prior to the Payout Start Date if:
1. you become unemployed at least 1 year after the issue date of the Contract;
and
2. you receive Unemployment Compensation for at least 30 consecutive days as a
result of that unemployment; and
3. this benefit is exercised within 180 days of your initial receipt of
Unemployment Compensation.
If the owner is not a living individual, then the above three conditions apply
to the annuitant.
This benefit may be exercised only once during the Accumulation Phase.
Before we waive Withdrawal Charges, you must give us Due Proof that the owner or
annuitant has been unemployed and have been granted Unemployment Compensation
for at least 30 consecutive days. You must give us Due Proof prior to, or at the
time of, the withdrawal request.
"Unemployment Compensation" means unemployment compensation received from a unit
of government in the U.S. (state or federal).
"Due Proof" includes, but is not limited to, a legible photocopy of an
Unemployment Compensation payment that meets the above described criteria with
regard to dates and a signed letter from you stating that the owner or annuitant
meets the above described criteria.
Except as amended in this endorsement, the Contract remains unchanged.
Secretary Chairman and Chief Executive Officer
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY
(herein called "we" or "us")
Amendatory Endorsement for Employees
As used in this endorsement, "Contract" means the Contract or Certificate to
which this endorsement is attached
The following changes are made to your Contract.
The following "Credits" section is added to your Contract after the "Purchase
Payments" section:
Credits A credit of 6% will be applied to each Purchase Payment made during the
Accumulation Phase. Credits are applied pro-rata to the investment alternatives
in the same ratio as the applicable Purchase Payments. The amount returned if
you exercise the "Return Privilege" provision (in Minnesota, "Right to Cancel
Your Contract") will be reduced by any credit applied. We do not consider
Credits to be "investment in the Contract" for income tax purposes.
The following sentence is added to the "Return Privilege" provision (in
Minnesota, "Right to Cancel Your Contract") of your Contract:
Credits applied pursuant to the Amendatory Endorsement for Employees are not
included in the definition of "Purchase Payments" for purposes of this
provision.
Except as amended in this endorsement, the Contract remains unchanged.
Secretary Chairman and Chief Executive Officer
LU4446 (1/99)
ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION
OF
ALLSTATE LIFE INSURANCE COMPANY
ARTICLE I
(a) The name of the company shall be ALLSTATE LIFE INSURANCE COMPANY.
(b) The principal office of the company shall be located in the township
of Northfield, County of Cook, in the State of Illinois.
(c) The period of duration of the company shall be perpetual.
ARTICLE II
The objects and purposes of the company shall be to make, write and issue
the following classes and kinds of insurance:
(a) Life: Insurance on the lives of persons and every insurance
appertaining thereto or connected therewith and granting, purchasing
or disposing of annuities. Policies of life or endowment insurance or
annuity contracts or contracts supplemental thereto which contain
provisions for additional benefits in case of death by accidental
means and provisions operating to safeguard such policies or contracts
against lapse or to give a special surrender value, or special
benefit, or an annuity, in the event that the insured or annuitant
shall become totally and permanently disabled as defined by the policy
or contract, shall be deemed to be policies of life or endowment
insurance or annuity contracts within the intent of this clause.
(b) Accident and Health: Insurance against bodily injury, disablement or
death by accident and against disablement resulting from sickness or
old age and every insurance appertaining thereto.
(c) Legal Expense: Insurance which involves the assumption of a
contractual obligation to reimburse the beneficiary against or pay on
behalf of the beneficiary, all or a portion of his fees, costs or
expenses related to or arising out of services performed by or under
the supervision of an attorney licensed to practice in the
jurisdiction wherein the services are performed, regardless of whether
the payment is made by the beneficiary individually or by a third
person for them, but does not include the provision of or
reimbursement for legal services incidental to other insurance
coverages.
ARTICLE III
(a) The number of Directors shall be as provided in the By-Laws, but shall
not be less than three, nor more than twenty-one. The Directors shall
be elected at each annual meeting of the shareholders for a term of
one year. Vacancies in the Board of Directors shall be filled by vote
of the shareholders.
(b) The corporate powers of the company shall be vested in the Board of
Directors, who shall have the power to do any and all acts the company
may do under the law and not otherwise to be performed by the
shareholders, and shall have the power to adopt By-Laws not
inconsistent with law for the government and regulation of the
business.
ARTICLE IV
The amount of authorized capital of the company shall be Two Hundred Two
Million Five Hundred Thousand Dollars ($202,500,000), divided into twenty one
thousand four hundred (21,400) shares of common stock of the par value of
$116.8224299065 per share, and two million (2,000,000) shares of non-voting
preferred stock of the par value of One Hundred Dollars ($100.00) per share.
Preferred stock may be issued, from time to time and as permitted by law,
in one or more series and with such designation for each such series as shall be
stated in the resolution of the Board of Directors authorizing such series. The
Board of Directors shall fix and determine the relative rights and preferences
of each such series, and shall establish the number of shares to be included in
each such series; provided, however, that in no event may any such series of
preferred stock be issued subject to a right or preference which grants to the
holder thereof any voting rights in the affairs of the Company or permits
conversion of such preferred stock to common stock of the Company; and provided,
further, that the aggregate par value of all such series of preferred stock
issued and outstanding shall not exceed Two Hundred Million Dollars
($200,000,000).
ARTICLE V
The designation of the general officers shall be Chairman of the Board,
President, two or more Vice Presidents, Treasurer and Secretary.
ARTICLE VI
The fiscal year of the company shall commence on the first day of January
and terminate on the 31st day of December of each year.
ARTICLE VII
The company may indemnify any agent as permitted by the Business
Corporation Act of Illinois. The company shall have the power to purchase and
maintain insurance on behalf of any agent against any liability asserted against
and incurred by such agent or arising out of such status as an agent, whether or
not the corporation would have the power to indemnify such agent against such
liability. The company shall also have the power to purchase and maintain
insurance to indemnify the company for any obligation which it may incur as a
result of such indemnification of an agent. Any indemnification provided to an
agent (a) shall not be deemed exclusive of any other rights to which such agent
may be entitled by law or under any by-law, agreement, vote of shareholders or
disinterested Directors or otherwise, and (b) shall inure to the benefit of the
legal representative of such agent or the estate of such agent, whether such
representatives are court-appointed or otherwise designated, and to the benefit
of the heirs of such agent. As used in this Article, "agent" shall mean any
person who is or was (i) a director, officer or employee of the company and/or
any subsidiary, (ii) a trustee or a fiduciary under any employee pension, profit
sharing, welfare or similar plan or trust of the company and/or any subsidiary,
or (iii) serving at the request of the company as a director, officer and/or
employee of or in a similar capacity in another corporation, partnership, joint
venture, trust or other enterprise (which shall, for the purpose of this Article
be deemed to include not-for-profit entities of any type), whether acting in
such capacity or in any other capacity including, without limitation, as a
trustee or fiduciary under any employee pension, profit sharing, welfare or
similar plan.
ARTICLE VIII
The Company shall be bound by all the terms and provisions of the Illinois
Insurance Code applicable to similar companies organized or incorporated
thereunder.
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ LOUIS G. LOWER, II
-------------------------------
President
Attest:
/s/ MICHAEL J. VELOTTA
- -----------------------------
Secretary
SEAL
Approved this 30th day of
December, 1997
/s/ MARK BOOZELL
-----------------------------
Mark Boozell, Director of Insurance
ALLSTATE LIFE INSURANCE COMPANY
BY-LAWS
AMENDED OCTOBER 1, 1997
<PAGE>
amended October 1, 1997
AMENDED BY-LAWS OF
ALLSTATE LIFE INSURANCE COMPANY
ARTICLE I
Directors
Section 1. The property, business and affairs of the Company shall be
managed and controlled by a Board of Directors composed of not less than fifteen
nor more than twenty members. The number of directors may be fixed or changed
from time to time, within the minimum and maximum, by the Board of Directors
without further amendment to these By-Laws. The Directors shall be elected at
each annual meeting of the shareholders of the Company for a term of one year.
Each Director shall hold office for the term for which he or she was elected and
until the election and qualification of his or her successor.
Section 2. In the event of a vacancy occurring in the Board of Directors,
the shareholders of the Company shall, by a majority vote at a special meeting
called for that purpose or at the next annual meeting of shareholders, elect a
Director to fill such vacancy, who shall hold office during the unexpired
portion of the term of the Director whose place he or she was elected to fill.
Section 3. The Board of Directors may declare dividends payable out of the
surplus funds of the Company when warranted by law.
Section 4. The Board of Directors shall elect all the general officers of
the Company hereafter provided and may prescribe additional descriptive titles
for any such officers.
The Board of Directors may from time to time appoint an Actuary, Assistant
Vice Presidents, Assistant Secretaries, Assistant Treasurers, Assistant
Actuaries and other officers of the Company. The Board of Directors may
prescribe the duties and fix the compensation of any elected or appointed
officer and may require from any officer security for his or her faithful
service and for his or her proper accounting for monies and property from time
to time in his or her possession.
All officers of the Company shall hold office at the will of the Board of
Directors.
Section 5. The Board of Directors shall designate in what bank or banks the
funds of the Company shall be deposited and the person or persons who may sign,
on behalf of the Company, checks or drafts against such deposits. Such
designations may also be made by such person or persons as shall be appointed
for that purpose by the Board of Directors.
Section 6. The Board of Directors shall have the power to make rules and
regulations not inconsistent with the laws of this State, the Articles of
Incorporation of the Company, or these By-Laws, for the conduct of its own
meetings and the management of the affairs of the Company.
Section 7. The Board of Directors may authorize payment of compensation to
Directors for their services as Directors, and fix the amount thereof.
Section 8. The Board of Directors shall have the power to appoint
committees and to grant them powers not inconsistent with the laws of this
State, the Articles of Incorporation of the Company, or these By-Laws.
Section 9. An annual meeting of the Board of Directors shall be held each
year immediately after the adjournment of the annual meeting of the
shareholders. Other meetings of the Board of Directors may be held at such time,
as the Board of Directors may determine or when called by the President or by a
majority of the Board of Directors.
Notice of every meeting of the Directors other than the stated annual
meeting shall be given by letter or telegraph sent to each Director at his
business address, not less than three days prior to the meeting. Any Director
may, in writing, waive notice of any meeting, and the presence of a Director at
any meeting shall be considered a waiver by him or her of notice of such
meeting, except as otherwise provided by law.
Any action required or permitted to be taken at any meeting of the Board of
Directors, or of any Committee thereof, may be taken without a meeting if all
members of the Board or such Committee, as the case may be, consent thereto in
writing. Such writing or writings shall be filed with the minutes of proceedings
of the Board or such Committee.
Section 10. A majority of the whole Board of Directors shall constitute a
quorum for the transaction of business, but if at any meeting of the Board of
Directors there shall be less than a quorum present, a majority of those present
may adjourn the meeting, from time to time, until a quorum shall have been
obtained.
ARTICLE II
Officers
Section 1. The general officers of the Company shall consist of a
President, two or more Vice Presidents, a Secretary, a Treasurer, and a
Controller, who shall be elected annually by the Board of Directors at the
stated annual meeting held upon adjournment of the annual shareholders' meeting,
and if not elected at such meeting, such officers may be elected at any meeting
of the Board of Directors held thereafter. Such officers shall be elected by a
majority of the Directors, and shall hold office for one year and until their
respective successors are elected and qualified, subject to removal at will by
the Board of Directors. In case of a vacancy in any of the general offices of
the Company, such vacancy may be filled by the vote of a majority of the Board
of Directors. Any two of the aforesaid offices may be filled by the same person,
with the exception of the offices of President and Vice President, or President
and Secretary.
Section 2. The President shall preside at all meetings of the shareholders
and of the Board of Directors. He or she shall be the Chief Executive Officer of
the Company, shall have general and active management of the business of the
Company subject to the supervision of the Board of Directors, and shall see that
all orders and resolutions of the Board of Directors are carried into effect.
The President shall execute bonds, mortgages and other contracts requiring a
seal, under the seal of the corporation, except where required or permitted by
law to be otherwise signed and executed and except where the signing and
execution thereof shall be expressly delegated by the Board of Directors to some
other officer or agent of the corporation. He or she shall also perform such
other duties as may properly belong to his or her office or as shall be
prescribed from time to time by the Board of Directors.
Section 3. Each Vice President shall have such powers and shall perform
such duties as may be assigned to him or her by the President or by the Board of
Directors. In the absence or in the case of the inability of the President to
act, the Board of Directors may designate which one of the Vice Presidents shall
be the acting Chief Executive Officer of the Company during such absence or
inability, whereupon such acting Chief Executive Officer shall have all the
powers and perform all of the duties incident to the office of the President
during the absence or inability of the President to act.
Section 4. The Secretary shall keep the minutes of all meetings of the
Board of Directors, and of all meetings of the shareholders, in books provided
by the Company for such purpose. He or she shall attend to the giving of all
notices of meetings of the Board of Directors or shareholders. He or she may
sign with the President or a Vice President in the name of the Company when
authorized by the Board of Directors so to do, all contracts and other
instruments requiring the seal of the Company and may affix the seal thereto. He
or she shall, in general, perform all of the duties which are incident to the
office of Secretary and such other duties as the Board of Directors or President
may from time to time prescribe.
Section 5. The Treasurer shall deposit the monies of the Company in the
Company's name in depositories designated by the Board of Directors, or by such
person or persons as shall be appointed for that purpose by the Board of
Directors. He or she shall, in general, perform all of the duties which are
incident to the office of Treasurer and such other duties as the Board of
Directors or President may from time to time prescribe. The Board of Directors
may, in its discretion, require him or her to give bond for the faithful
discharge of his or her duties.
Section 6. The Controller shall have such powers and perform such duties as
the Board of Directors or the President may from time to time prescribe.
ARTICLE III
Shareholders' Meeting
Section 1. The annual meeting of the shareholders shall be held at the
principal office of the Company in Northfield Township, Cook County, Illinois,
or at such other location within or without the State of Illinois as may be set
forth in the notice of call, on the third Tuesday in February of each year,
except when such day shall be a legal holiday, in which case the meeting shall
be held on the next succeeding business day. The President or the Board of
Directors may at any time call a special meeting of the shareholders, and the
President shall call such special meeting when requested, in writing, so to do
by the owners of not less than one-fifth of the outstanding share of the
Company.
Section 2. Notice of every meeting of the shareholders shall be given by
mailing notice thereof at least ten days before such meeting to all the
shareholders at their respective post office addresses last furnished by them,
respectively, to the Company. The shareholders may waive notice of any such
meeting, in writing, and the presence of a shareholder, either in person or by
proxy, shall be considered a waiver of notice, except as otherwise provided by
law.
Section 3. The presence at such meeting in person or by proxy of
shareholders of the Company representing at least fifty-one percent of the then
outstanding shares of the Company shall be necessary to constitute a quorum for
the purpose of transacting business, except as otherwise provided by law, but a
smaller number may adjourn the meeting from time to time until a quorum shall be
obtained. Each shareholder shall be entitled to cast one vote in person or by
proxy for each share of stock of the Company held and of record in his or her
name on the books of the Company.
Section 4. A shareholder may vote at any meeting of the shareholders either
in person or by proxy duly constituted in writing. No special form of proxy
shall be necessary.
ARTICLE IV
Shares
Section 1. Share certificates shall be signed by the President or a Vice
President and countersigned by the Secretary, shall be sealed with the corporate
seal of the Company, and shall be registered upon the Share Register of the
Company. Each certificate shall express on its face the name of the Company, the
number of the certificate, the number of shares for which it is issued, the name
of the person to whom it is issued, the par value of each of said shares, and
the amount actually received by the Company for each share represented by said
certificate.
Section 2. Transfer of shares of the Company shall be made only on the
books of the Company by the holder thereof in person or by his or her attorney
duly authorized, in writing, and upon the surrender of the certificates or
certificate for the share transfer, upon which surrender and transfer new
certificates will be issued. The Board of Directors may, by resolution, close
the share transfer books of the Company for a period not exceeding ten days
before the holding of any annual or special meeting of the shareholders. The
Board of Directors may, by resolution, also close the transfer books of the
Company for a period not exceeding ten days before the payment of any dividends
which may be declared upon the shares of the Company.
ARTICLE V
Preferred Shares
Section 1. The issuance of preferred shares shall be evidenced by entry
thereof in the Preferred Share Register of the Company or by distribution of
preferred Share Certificates, signed by the President or a Vice President,
countersigned by the Secretary and sealed with the corporate seal of the
Company. Each such certificate shall express on its face the name of the
Company, the series in which it is issued, the number of the certificate, the
number of shares for which it is issued, the name of the person to whom it is
issued, the par value of each of the said shares, and the amount actually
received by the Company or each share represented by said certificate. Such
information shall likewise be recorded in the Preferred Share Register of the
Company.
Section 2. Transfers of Preferred Shares of the Company shall be made on
the books of the Company by the holder thereof in person or by the holder's
attorney duly authorize, in writing, and, where a certificate or certificates
have been issued, upon surrender of the certificates or certificate for the
share transfer, upon which surrender and transfer new certificates will be
issued. The Board of Directors may, by resolution, close the preferred share
transfer books of the Company for a period not exceeding ten days before the
payment of any dividends which may be declared upon the preferred shares of the
Company.
ARTICLE VI
Insurance Polices
Section 1. All policies of insurance issued by this Company shall comply
with the laws of the respective states or territories in which the policies are
issued. All policies of insurance issued by this Company shall be signed, either
manually or by facsimile, by the President and the Secretary or by such officer
or officers as the President may designate, and shall be countersigned by a duly
licensed resident agent where so required by law or regulation.
ARTICLE VII
Miscellaneous
Section 1.
(a) As used in this Section:
(i) "acted properly" as to any person shall mean that such person
(A) acted in good faith;
(B) acted in a manner which he or she reasonably believed
to be in or not opposed to the best interests of the
corporation; and
(C) with respect to any criminal action or proceeding, had
no reasonable cause to believe that his or her conduct
was unlawful.
The termination of any proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act properly.
(ii) "covered person" shall mean an Indemnitee (as defined below) or
an Employee Indemnitee (as defined below).
(iii)"Employee Indemnitee" shall mean any non-officer employee of the
corporation (but not subsidiaries of the corporation).
(iv) "expenses" shall include attorneys' fees and expenses and any
attorneys' fees and expenses of establishing a right to
indemnification under this Section.
(v) "Indemnitee" shall mean any person who is or was
(A) a director or officer of the corporation and/or any
subsidiary;
(B) a trustee or a fiduciary under any employee pension, profit
sharing, welfare or similar plan or trust of the corporation
and/or any subsidiary; or
(C) serving at the request of the corporation as a director or
officer of or in a similar capacity in another corporation,
partnership, joint venture, trust or other enterprise,
(which shall, for the purpose of this Section be deemed to
include not-for-profit or for-profit entities of any type),
whether acting in such capacity or in any other capacity
including, without limitation, as a trustee or fiduciary
under any employee pension, profit sharing, welfare or
similar plan of trust.
(vi) "proceeding" shall mean any threatened, pending or completed
action or proceeding, whether civil or criminal, and whether
judicial, legislative or administrative and shall include
investigative action by any person or body.
(vii)"subsidiary" shall mean a corporation, 50% or more of the shares
of which at the time outstanding having voting power for the
election of directors are owned directly or indirectly by the
corporation or by one or more subsidiaries or by the corporation
and one or more subsidiaries.
(b) The corporation shall indemnify any Indemnitee to the fullest extent
permitted under law (as the same now or hereafter exists), who was or
is a party or is threatened to be made a party to any proceeding by
reason of the fact that such person is or was an Indemnitee against
liabilities, expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred by him or her.
(c) The corporation shall indemnify any Employee Indemnitee who was or is
a party or is threatened to be made a party to any proceeding (other
than an action by or in the right of the corporation) by reason of the
fact that such person is or was an employee against liabilities,
expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by him or her in connection with such proceeding
if such person acted properly.
(d) The corporation shall indemnify any Employee Indemnitee who was or is
a party or is threatened to be made a party to any proceeding by or in
the right of the corporation to procure a judgment in its favor by
reason of the fact that such person is or was an employee against
amounts paid in settlement and against expenses actually and
reasonably incurred by him or her in connection with the defense or
settlement of such proceeding if he or she acted properly, except that
no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable
for negligence or misconduct in the performance of his or her duty to
the corporation unless and only to the extent that the court in which
such action or suit was brought shall determine upon application that,
despite the adjudication or liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such court shall deem
proper.
(e) Expense incurred in defending a proceeding shall be paid by the
corporation to or on behalf of a covered person in advance of the
final disposition of such proceeding if the corporation shall have
received an undertaking by or on behalf of such person to repay such
amounts unless it shall ultimately be determined that he or she is
entitled to be indemnified by the corporation as authorized in this
Section. (f) Any indemnification or advance under this Section (unless
ordered by a court) shall be made by the corporation only as
authorized in the specific proceeding upon a determination that
indemnification or advancement to a covered person is proper in the
circumstances. Such determination shall be made:
(i) by the Board of Directors, by a majority vote of a quorum
consisting of directors who were not made parties to such
proceedings, or
(ii) if such a quorum is not obtainable, or, even if obtainable and a
quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or
(iii)in the absence of a determination made under (i) or (ii), by the
stockholders.
(g) The corporation shall indemnify or advance funds to any Indemnitee
described in Section (a)(v)(C), only after such person shall have
sought indemnification or an advance from the corporation,
partnership, joint venture, trust or other enterprise in which he or
she was serving at the corporation's request, shall have failed to
receive such indemnification or advance and shall have assigned
irrevocably to the corporation any right to receive indemnification
which he or she might be entitled to assert against such other
corporation, partnership, joint venture, trust or other enterprise.
(h) The indemnification provided to a covered person by this Section:
(i) shall not be deemed exclusive of any other rights to which such
person may be entitled by law or under any articles of
incorporation, by-law, agreement, vote of shareholders or
disinterested directors or otherwise;
(ii) shall inure to the benefit of the legal representatives of such
person or his or her estate, whether such representatives are
court appointed or otherwise designated, and to the benefit of
the heirs of such person; and
(iii)shall be a contract right between the corporation and each such
person who serves in any such capacity at any time while this
Section 1 of Article VII is in effect, and any repeal or
modification of this Section shall not affect any rights or
obligations then existing with respect to any state of facts or
any proceedings then existing.
(i) The indemnification and advances provided to a covered person by this
Section shall extend to and include claims for such payments arising
out of any proceeding commenced or based on actions of such person
taken prior to the effective date of this Section; provided that
payment of such claims had not been agreed to or denied by the
corporation at the effective date.
(j) The corporation shall have power to purchase and maintain insurance on
behalf of any covered person against any liability asserted against
him or her and incurred by him or her as a covered person or arising
out of his or her status of such, whether or not the corporation would
have the power to indemnify him or her against such liability under
the provisions of this Section. The corporation shall also have power
to purchase and maintain insurance to indemnify the corporation for
any obligation which it may incur as a result of the indemnification
of covered persons under the provisions of this Section.
(k) The invalidity or unenforceability of any provision in this Section
shall not affect the validity or enforceability of the remaining
provisions of this Section.
Section 2. The fiscal year of the Company shall begin in each year on the
first day of January, and end on the thirty-first day of the December following.
Section 3. The common seal of the Company shall be circular in form and
shall contain the name of the Company and the words: "CORPORATE SEAL" and
"ILLINOIS".
Section 4. These By-Laws may be amended or repealed by the vote of a
majority of the Directors present at any meeting at which a quorum is present.
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ LOUIS G. LOWER, II
----------------------
President
Attest:
/s/ MICHAEL J. VELOTTA
- -------------------------------
Secretary
SEAL
POWER OF ATTORNEY
WITH RESPECT TO
THE ALLSTATE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
Know all men by these presents that Marla G. Friedman, whose signature
appears below, constitutes and appoints Louis G. Lower, II and Michael J.
Velotta, her attorneys-in-fact, with power of substitution, and each of them in
any and all capacities, to sign any registration statements and amendments
thereto for the Allstate Life Insurance Company Separate Account A and related
Contracts and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
February 3, 1999
----------------
Date
/s/Marla G. Friedman
--------------------
Marla G. Friedman
Vice President and Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
THE ALLSTATE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
Know all men by these presents that Peter H. Heckman, whose signature
appears below, constitutes and appoints Louis G. Lower, II and Michael J.
Velotta, his attorneys-in-fact, with power of substitution, and each of them in
any and all capacities, to sign any registration statements and amendments
thereto for the Allstate Life Insurance Company Separate Account A and related
Contracts and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
February 2, 1999
----------------
Date
/s/Peter H. Heckman
-------------------
Peter H. Heckman
Vice President and Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
THE ALLSTATE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
Know all men by these presents that John C. Lounds, whose signature
appears below, constitutes and appoints Louis G. Lower, II and Michael J.
Velotta, his attorneys-in-fact, with power of substitution, and each of them in
any and all capacities, to sign any registration statements and amendments
thereto for the Allstate Life Insurance Company Separate Account A and related
Contracts and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
February 3, 1999
----------------
Date
/s/John C. Lounds
-----------------
John C. Lounds
Vice President and Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
THE ALLSTATE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
Know all men by these presents that Louis G. Lower, II, whose signature
appears below, constitutes and appoints Michael J. Velotta, his
attorney-in-fact, with power of substitution, and in any and all capacities, to
sign any registration statements and amendments thereto for the Allstate Life
Insurance Company Separate Account A and related Contracts and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact, or his substitute or substitutes, may do or cause to be
done by virtue hereof.
February 3, 1999
----------------
Date
/s/Louis G. Lower, II
---------------------
Louis G. Lower, II
Chairman of the Board
and Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
THE ALLSTATE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
Know all men by these presents that Timothy H. Plohg, whose signature
appears below, constitutes and appoints Louis G. Lower, II and Michael J.
Velotta, his attorneys-in-fact, with power of substitution, and each of them in
any and all capacities, to sign any registration statements and amendments
thereto for the Allstate Life Insurance Company Separate Account A and related
Contracts and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
February 2, 1999
----------------
Date
/s/Timothy H. Plohg
-------------------
Timothy H. Plohg
Vice President and Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
THE ALLSTATE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
Know all men by these presents that Kevin R. Slawin, whose signature
appears below, constitutes and appoints Louis G. Lower, II and Michael J.
Velotta, his attorneys-in-fact, with power of substitution, and each of them in
any and all capacities, to sign any registration statements and amendments
thereto for the Allstate Life Insurance Company Separate Account A and related
Contracts and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
February 2, 1999
----------------
Date
/s/Kevin R. Slawin
------------------
Kevin R. Slawin
Vice President and Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
THE ALLSTATE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
Know all men by these presents that Casey J. Sylla, whose signature
appears below, constitutes and appoints Louis G. Lower, II and Michael J.
Velotta, his attorneys-in-fact, with power of substitution, and each of them in
any and all capacities, to sign any registration statements and amendments
thereto for the Allstate Life Insurance Company Separate Account A and related
Contracts and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
February 3, 1999
----------------
Date
/s/Casey J. Sylla
-----------------
Casey J. Sylla
Chief Investment Officer
and Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
THE ALLSTATE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
Know all men by these presents that Thomas J. Wilson, II, whose
signature appears below, constitutes and appoints Louis G. Lower, II and Michael
J. Velotta, his attorneys-in-fact, with power of substitution, and each of them
in any and all capacities, to sign any registration statements and amendments
thereto for the Allstate Life Insurance Company Separate Account A and related
Contracts and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
February 3, 1999
----------------
Date
/s/Thomas J. Wilson, II
-----------------------
Thomas J. Wilson, II
President and Director
