Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
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FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
SEPARATE ACCOUNT VLI
of
THE EQUITABLE OF COLORADO, INC. Joseph G. Williams Jr., Vice President
(Exact Name of Trust) and Associate General Counsel
The Equitable Life Assurance Society
THE EQUITABLE OF COLORADO, INC. of the United States
(Exact Name of Depositor) 1290 Avenue of the Americas, 12th Floor
370 17th Street, Suite 4950 New York, NY 10104
Denver, CO 80202 (Name and Address of Agent for Service)
(Address of Depositor's Principal
Executive Offices)
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Telephone Number, Including Area Code: (303) 892-5700
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Please send copies of all communications to:
MARY P. BREEN, ESQ. with a copy to:
Vice President and THOMAS C. LAUERMAN, ESQ.
Associate General Counsel Freedman , Levy, Kroll & Simonds
The Equitable Life Assurance 1050 Connecticut Avenue, N.W., Suite 825
Society of the United States Washington, D.C. 20036
1290 Avenue of the Americas, 12th Floor
New York, NY 10104
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Securities Being Registered: Units of Interest in Separate Account VLI
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Approximate date of proposed public offering: As soon as practicable after the
effective date of the Registration Statement.
<PAGE>
SEPARATE ACCOUNT VLI OF
THE EQUITABLE OF COLORADO, INC.
Reconciliation and Tie
IL Protector (SM)
Items of
Form N-8B-2* Captions in Prospectus
1(a), (b) How we support the policies' investment options.
2 Who is Equitable of Colorado?
3 Inapplicable
4 How we market the policies.
5,6 How we support the policies' investment options.
7 Inapplicable**
8 Inapplicable**
9 Inapplicable
10(a) How we support the policies' investment options; Your
options for receiving policy proceeds; Proceeds payment
options; Assigning your policy.
(b) Determining your policy's value: Your policy's account value;
Your policy's value in our variable investment options; How we
support the policies' investment options: Our separate account
VLI.
(c)(d) Charges and Expenses you will pay: Changes in charges;
Accessing your money: Borrowing from your policy; Making
withdrawals from your policy; Surrendering your policy for its
net cash surrender value; When the insured person reaches age
100 ("maturity"); Your option to receive a living benefit;
More information about procedures that apply to your policy:
Requirements for surrender requests; Proceeds Payment Options;
Assigning your policy; Payments under our living benefit
rider; Dates and prices at which policy events occur.
(e) The minimum amount of premium you must pay--Policy lapse and
termination; --Restoring a terminated policy; --No-lapse
guarantee and premiums; --No-lapse guarantee test.
(f) Your voting privileges.
10(g)(1) 10(g)(2) Changes we can make; Your voting privileges.
10(h)(1) 10(h)(2)
10(g)(3) 10(g)(4) Inapplicable**
10(h)(3) 10(h)(4)
_________________
*Registrants include this Reconciliation and Tie in their Registration Statement
in compliance with Instruction 4 as to the Prospectus as set out in Form S-6.
Separate Account VLI will be an investment company registered under the
Investment Company Act of 1940 on a Form N-8B-2 Registration Statement. Pursuant
to Sections 8 and 30(b)(1) of the Investment Company Act of 1940, Rule 30a-1
under the Act, and Forms N-8B-2 and N-SAR under that Act, the Account keeps its
Form N-8B-2 Registration Statement current through the filing of periodic
reports required by the Securities and Exchange Commission.
**Not required pursuant to either Instruction 1(a) as to the Prospectus as set
out in Form S-6 or the administrative practice of the Commission and its staff
of adapting the disclosure requirements of the Commission's registration
statement forms in recognition of the differences between variable life
insurance policies and other periodic payment plan certificates issued by
investment companies and between separate account organized as management
companies and unit investment trusts.
<PAGE>
10(i) Determining your policy's account value; Tax
information; Charges and expenses you will pay; Investment
options within your policy; Transferring your money among
investment options.
11 What is IL Protector; Investment options within your policy.
12(a) What is IL Protector?
12(b) Inapplicable
12(c) How we support the policies' investment options.
12(d) How we market our policies.
12(e) Inapplicable**
13(a) Charges and expenses you will pay; More information on
other matters: Deducting policy charges.
13(b), (c), (g) Inapplicable**
13(d) Variations among IL Protector policies
13(e), (f) Inapplicable
14,15 Policy features and Benefits: How you can pay for and
contribute to your policy; More information about procedures
that apply to your policy: Alternative ways to make premium
and loan payments; Dates and prices at which policy events
occur; Policy issuance.
16 More information on other matters: How we support the
policies' investment options; Determining your policy's value:
Your account value; Transferring your money among investment
options; Accessing your money.
17(a),(b) Captions referenced under Items 10 (c), (d) and (e) above.
17(c) Inapplicable**
18(a) Policy features and benefits: Determining your policy's value
18(b), (d) Inapplicable
18(c) Tax Information: Our taxes.
19 More information about other matters: Reports we will send
you; Your voting privileges.
20(a) Captions referenced under Items 10(g)(1), 10(g)(2), 10(h)(1)
and 10(h)(2).
20(b), 20(c),
20(d), 20(e),
20(f) Inapplicable
21(a), 21(b) Accessing your money: Borrowing from your policy.
21(c) Inapplicable**
<PAGE>
22 More information on other matters: Suicide and certain
misstatements; When we pay policy proceeds; --Delay to
challenge coverage.
23 Inapplicable
24 All prospectus captions.
25 Who is Equitable of Colorado?
26(a), 26(b) Inapplicable**
27 Who is Equitable of Colorado?; More information on other
matters: How we market the policies.
28 More information on other matters: Directors and principal
officers.
29 Who is Equitable of Colorado?
30 Inapplicable
31, 32, 33, 34 Inapplicable**
35 More information about other matters: Insurance regulation
that applies to Equitable of Colorado.
36 Inapplicable**
37 Inapplicable**
38 More information on other matters: How we market the
policies.
39(a) Who is Equitable of Colorado?
39(b) More information on other matters: How we market the
policies.
40(a) Inapplicable** (But see More information on other matters:
How we market the policies.
40(b) Inapplicable
41(a) Who is Equitable of Colorado?; More information on other
matters: How we market the policies.
41(b),41(c),42 Inapplicable**
43 Inapplicable
44 (a) (1) Policy features and benefits: Determining your policy's
value.
44 (a) (2) More information on other matters: How we support
the policies' investment options; Our general account;
Transfers of your account value; Telephone requests;
Determining your policy's value: Your account value; Your
policy's value in our variable investment options; Your
policy's value in our guaranteed interest option; Accessing
your money; When the insured person reaches age 100
("Maturity"); About your Life Insurance benefit.
<PAGE>
44(a)(3) Determining your policy's value: Transferring your money
among investment options; Accessing your money.
44(a)(4) Tax Information.
44(a)(5) Charges and expenses you will pay; More information on other
matters: Deducting policy charges.
44(a)(6) Determining your policy's value: Your account value; More
information about other matters; How we support the policies'
investment options; Transfers of our account value; Deducting
policy charges; Charges and expenses you will pay.
44(b) Inapplicable**
44(c) Charges and expenses you will pay: changes in charges; More
information on other matters: Changes we can make.
45 Inapplicable
46(a) Captions referenced under Item 44(a) above.
46(b) Inapplicable**
47,48,49 Inapplicable
50 More information on other matters: How we support the
policies' investment options.
51(a)-(j) Inapplicable**
52(a), (c) More information on other matters: Changes we can make.
52(b), (d) Inapplicable
53(a) Tax information: Our taxes.
54(b), 54 Inapplicable
55 Inapplicable**
56-59 Inapplicable**
<PAGE>
[Outside Wrapper]
IL PROTECTOR(R)
A flexible premium variable life insurance policy
April 1, 1999
Equitable of Colorado Logo
This booklet is called a "prospectus." It describes many aspects of an IL
Protector policy, but this prospectus is not itself a policy. The policy is the
actual contract that determines your benefits and obligations under IL
Protector. For readability, this prospectus sometimes uses different words than
the policy. Your Equitable of Colorado associate can provide any further
explanation about your policy.
Your Equitable of Colorado associate can provide you with information about all
forms of life insurance available from us and help you decide which may best
meet your needs. Replacing existing insurance with IL Protector or another
policy may not be to your advantage.
Copyright 1999 The Equitable of Colorado, Inc. All rights reserved.
IL Protector(R) is a registered Service Mark of
The Equitable Life Assurance Society of the United States.
1
<PAGE>
[Front Cover]
IL PROTECTOR(R)
A flexible premium variable life insurance policy
Prospectus dated April 1, 1999
Equitable of Colorado Logo
Please read this prospectus and keep it for future reference. It contains
important information that you should know before purchasing, or taking any
other action under a policy. Also, at the end of this prospectus you will find
attached the prospectuses for The Hudson River Trust and EQ Advisors Trust,
which contain important information about any Portfolios you may be interested
in.
WHAT IS IL PROTECTOR? IL Protector provides life insurance coverage, plus the
opportunity for you to earn a return in our guaranteed interest option and/or
one or more of the following variable investment options:
<TABLE>
<CAPTION>
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FIXED INCOME OPTIONS: EQUITY OPTIONS: ASSET ALLOCATION OPTIONS:
- ------------------------- --------------------------------------------------- --------------------------
<S> <C> <C> <C>
Domestic Fixed Income Domestic Equity International Equity o Alliance Conservative
- --------------------- --------------- -------------------- Investors
o Alliance Money Market o T. Rowe Price Equity o Alliance Global o EQ/Putnam Balanced
o Alliance Intermediate Income o Alliance International o Alliance Balanced
Government Securities o EQ/Putnam Growth & o T. Rowe Price o Alliance Growth
o Alliance Quality Bond Income Value International Stock Investors
o Alliance Growth & o Morgan Stanley o Merrill Lynch World
Aggressive Fixed Income Income Emerging Markets Strategy
- ----------------------- o Alliance Equity Equity
o Alliance High Yield Index Aggressive Equity
o Merrill Lynch Basic -----------------
Value Equity o Alliance Aggressive
o Alliance Common Stock
Stock o Warburg Pincus Small
o MFS Research Company Value
o Alliance Small Cap
Growth
o MFS Emerging
Growth Companieso
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
Amounts that you allocate under your policy to one of the variable investment
options are invested in a corresponding "Portfolio" that is part of one of the
following two mutual funds: The Hudson River Trust or the EQ Advisors Trust.
Your investment results in any such variable option will depend on those of the
related Portfolio. Any gains will generally be tax-deferred and the life
insurance benefits we pay if the policy's insured person dies will generally be
income tax-free.
Other choices you have. You have considerable flexibility to tailor the
policy to your needs. For example, subject to our rules, you can (1) choose when
and how much you contribute (as "premiums") to your policy, (2) pay specified
minimum premium amounts to guarantee that your insurance coverage will continue
for a number of years, regardless of investment performance, (3) borrow or
withdraw amounts you have accumulated, (4) change the amount of insurance
coverage, (5) choose whether the life insurance benefit we pay if the insured
person dies will be increased by the amounts you then have in your policy's
investment options, (6) elect to receive an insurance benefit if the insured
person becomes terminally ill, and (7) add or delete certain optional benefits
that we offer by "riders" to your policy.
THE SECURITIES AND EXCHANGE COMMISSION (SEC) HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE POLICIES ARE NOT
INSURED BY THE FDIC OR ANY OTHER AGENCY. THEY ARE NOT DEPOSITS OR OTHER
OBLIGATIONS OF ANY BANK AND ARE NOT BANK GUARANTEED. THEY ARE SUBJECT TO
INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL.
2
<PAGE>
[Inside of Front Cover]
WHO IS EQUITABLE OF COLORADO? The IL Protector policies are issued by The
Equitable of Colorado, Inc. ("Equitable of Colorado"). Equitable of Colorado was
established in 1984 as a Colorado stock life insurance company. Equitable of
Colorado is a wholly owned subsidiary of The Equitable Life Assurance Society of
the United States ("Equitable Life"). Equitable Life is a New York stock life
insurance corporation and has been doing business since 1859. Equitable Life is
a wholly-owned subsidiary of The Equitable Companies, Inc. ("Equitable
Companies"), whose majority shareholder is AXA, a French insurance holding
company. As a majority shareholder, and under its other arrangements with
Equitable of Colorado, Equitable Life and Equitable Companies, AXA exercises
significant influence over the operations and capital structure of Equitable
Companies and its subsidiaries. Equitable of Colorado's related companies,
however, have no legal responsibility to pay amounts that Equitable of Colorado
owes under the policies.
Equitable Companies and its subsidiaries, including Equitable of Colorado,
managed over $_______ billion in assets as of December 31, 1998. Equitable of
Colorado is authorized to sell life insurance in forty-six states, and annuities
in twenty-one states. Our home office is located at 370 17th Street, Denver,
Colorado 80202.
HOW TO REACH US. To obtain (1) any forms you need for communicating with us, (2)
unit values and other values under your policy, and (3) any other information or
materials that we provide in connection with your policy or the Portfolios, you
can contact us
<TABLE>
<S> <C> <C>
BY MAIL: BY EXPRESS DELIVERY: BY TOLL-FREE PHONE: 1-888-855-5100
at the Post Office Box for our At the Street Address for our (automated voice response system available
Administrative Office specified in your Administrative Office specified in weekdays 7 AM to 9 PM, Eastern Time)
policy. your __________ . (Customer service representative available
BY E-MAIL: _________________ BY FAX: 1-704-540-9714 weekdays 8 AM to 9 PM, Eastern Time)
</TABLE>
Our web site (www.____________) can also provide information; some of the forms
listed below are available for you to print out through our web site. You may
also contact your Equitable of Colorado associate for help in obtaining what you
need and exercising your rights and privileges under your policy.
The following types of communications must be on specific forms that we provide
for each purpose: (1) request for automatic transfer service; and (2)
authorization for telephone transfers by a person who is not also the insured
person; and (3) request for asset rebalancing service. We also have specific
forms that we recommend you use for the following: (a) policy surrenders; (b)
address changes; (c) beneficiary changes; (d) transfers between investment
options; and (e) changes in premium allocation percentages.
Except for properly authorized telephone transactions, any notice or request
that does not use our standard form must be in writing dated and signed by you
and should also specify your name, the insured person's name (if different),
your policy number, and adequate details about the notice you wish to give or
other action you wish us to take. For information about transaction requests you
can make by phone, see "Telephone Transfers" on page __ and "Telephone Requests"
on page __ of this prospectus.
The proper person to sign notices and requests would normally be the owner or
any other person that our procedures permit to exercise the right or privilege
in question. If there are joint owners both must sign. Any irrevocable
beneficiary or assignee that we have on our records also must sign certain types
of requests.
You should send all requests, and notices to our Administrative Office at the
above addresses. We will also accept requests and notices by fax at the above
number, if we believe them to be genuine. We reserve the right, however, to
require an original signature before acting on any faxed item. You must send
premium payments after the first one to our Administrative Office at the above
addresses; except that you should send any premiums for which we have billed you
to the address on the billing notice.
3
<PAGE>
CONTENTS OF THIS PROSPECTUS
PAGE IN THIS
PROSPECTUS
------------
WHAT IS IL PROTECTOR?
WHO IS EQUITABLE OF COLORADO?
HOW TO REACH US
CHARGES AND EXPENSES YOU WILL PAY
RISK/REWARD CONSIDERATIONS
POLICY FEATURES AND BENEFITS
How You Can Pay For and Contribute to Your Policy
The Minimum Amount of Premiums You Must Pay
Investment Options Within Your Policy
About Your Life Insurance Benefit
You Can Change Your Policy's Insured Person
You Can Increase or Decrease Your Insurance Coverage
Other Benefits You Can Add by Rider
Your Options For Receiving Policy Proceeds
Your Right to Cancel Within a Certain Number of Days
Variations Among IL Protector Policies
DETERMINING YOUR POLICY'S VALUE
Your Account Value
TRANSFERRING YOUR MONEY AMONG OUR INVESTMENT OPTIONS
Transfers You Can Make
Telephone Transfers
Our Automatic Transfer Service
Our Asset Rebalancing Service
ACCESSING YOUR MONEY
Borrowing From Your Policy
Making Withdrawals From Your Policy
Surrendering Your Policy for its Net Cash Surrender Value
When the Insured Person Reaches Age 100 ("Maturity")
Your Option to Receive a Living Benefit
TAX INFORMATION
Basic Tax Treatment For You and Your Beneficiary
Tax Treatment of Distributions to You
Tax Treatment of Living Benefit Rider
Effect of Policy on Interest Deductions Taken by Business Entities
Requirement That We Diversify Investments
Estate, Gift, and Generation-Skipping Taxes
Pension and Profit Sharing Plans
Other Employee Benefit Programs
ERISA
Our Taxes
When We Withhold Taxes From Policy Proceeds
Possibility of Future Tax Changes
MORE INFORMATION ABOUT PROCEDURES THAT APPLY TO YOUR POLICY
Alternative Ways to Make Premium and Loan Payments
Requirements for Surrender Requests
Proceeds Payment Options
Assigning Your Policy
Payments Under Our Living Benefit Rider
4
<PAGE>
Dates and Prices at Which Policy Events Occur
Policy Issuance
Gender-neutral Policies
MORE INFORMATION ABOUT OTHER MATTERS
FINANCIAL STATEMENTS OF EQUITABLE OF COLORADO AND SEPARATE ACCOUNT VLI
APPENDICES
I -- Investment Performance Record
II -- Our Data on Market Performance
III -- An Index of Key Words and Phrases
THE HUDSON RIVER TRUST PROSPECTUS (follows after page __ of this prospectus,
but is not a part of this prospectus)
EQ ADVISORS TRUST PROSPECTUS (follows after page __ of The Hudson River Trust
Prospectus, but is not a part of that prospectus or this prospectus.)
WHEN WE ADDRESS THE READER OF THIS PROSPECTUS WITH WORDS SUCH AS "YOU" AND
"YOUR", WE MEAN THE PERSON WHO HAS THE RIGHT OR RESPONSIBILITY THAT THE
PROSPECTUS IS DISCUSSING AT THAT POINT. THIS USUALLY IS THE POLICY'S OWNER. WHEN
WE USE THE WORD "STATE," WE ALSO MEAN ANY OTHER LOCAL JURISDICTION WHOSE LAWS OR
REGULATIONS AFFECT A POLICY.
EQUITABLE OF COLORADO DOES NOT SELL IL PROTECTOR IN ALL STATES. THIS PROSPECTUS
DOES NOT OFFER IL PROTECTOR ANYWHERE THAT SUCH OFFERS ARE NOT LAWFUL. EQUITABLE
OF COLORADO DOES NOT AUTHORIZE ANY INFORMATION OR REPRESENTATION ABOUT THE
OFFERING OTHER THAN THAT CONTAINED OR INCORPORATED IN THIS PROSPECTUS, IN ANY
CURRENT SUPPLEMENTS THERETO, OR IN ANY RELATED SALES MATERIALS AUTHORIZED BY
EQUITABLE OF COLORADO.
5
<PAGE>
CHARGES AND EXPENSES YOU WILL PAY
This table shows the charges that we deduct under the terms of your policy. For
more information, see "Deducting Policy Charges" beginning on page __ below.
<TABLE>
<CAPTION>
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TABLE OF POLICY CHARGES
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DEDUCTIONS WE TAKE FROM AMOUNTS YOU CONTRIBUTE TO YOUR POLICY:
<S> <C>
Sales charge........................................ 6% of each premium payment you make
Charge for state taxes on premiums.................... Ranges from 0.50% to 5% (depending on state) of each
payment you make
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
DEDUCTIONS WE TAKE FROM YOUR POLICY'S VALUE EACH MONTH:
<S> <C>
Administrative charge............................... $25 in each of your policy's first 12 months
$6 in each subsequent month (which we may increase up
to $10)
Cost of insurance charges and
optional rider charges........................... Amount varies depending on the specifics of your policy(1)
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
DEDUCTION WE TAKE FROM YOUR POLICY'S INVESTMENT PERFORMANCE EACH DAY:
<S> <C>
Mortality and expense risk charge................... .80% (effective annual rate) of the value you have in
our variable investment options(2)
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<CAPTION>
DEDUCTIONS WE TAKE AT THE TIME OF THE FOLLOWING TRANSACTIONS YOU CAN REQUEST:
<S> <C>
Surrender (turning in) of your policy
during its first 15 years........................ A surrender charge equal to the smaller of (a) 66% of
one "target premium"(3) (or less for surrenders after the
ninth year) (4) or (b) 24% of all premium payments you
make in the first year up to the target premium, plus
3% of all additional premiums paid in that year or
subsequently. (We will also deduct the amount of
surrender charge remaining for any face amount
increases, as discussed immediately below.)
</TABLE>
- ----------------------------
(1) See "Monthly cost of insurance charge" on page __ below and "Other Benefits
You Can Add by Rider" on page __ below. The Illustrations of Policy Benefits
that your Equitable associatewill provide will illustrate the impact of the
actual current and maximum ratesof these and any other charges, based on
various assumptions.
(2) This charge does not apply to amounts in our guaranteed interest option.
(3) The "target premium" is actuarially determined for each policy, based on
that policy's particular characteristics.
(4) Begining in your policy's tenth year, this amount declines at a constant
rate each month until no surrender charge applies to surrenders made after
the policy's 15th year. The maximum amount of surrender charge under clause
(a) will be set forth in your policy.
6
<PAGE>
<TABLE>
<S> <C>
Surrender of your policy during the first 15 years
after you have increased your policy's
face amount(5)...................................... An amount of surrender charge that we will compute on
essentially the same basis as if each such face amount
increase had been a separate, newly-issued IL Protector
policy.(6) For this purpose, we consider that a portion
of each additional premium you pay is for the
increase.)
Requested decrease in your policy's face amount..... A pro-rata portion of the full surrender charge
that would apply to a surrender at the time of the
decrease
Change of your policy's insured person.............. $100
Election to add "living benefit" rider after policy
issue............................................. $100
Exercise of option to receive a "living benefit".... Up to $250
Transfers among investment options.................. $0 for each of the first 12 transfers per year (which
we may increase up to $25) and $25 for each additional
transfer in the same year7
Partial withdrawal.................................. $25 (or, if less, 2% of the withdrawal)
Increase in your policy's face amount............... $1.50 for each $1000 of the increase (but not more than
$240 in total)
- ----------------------------------------------------------------------------------------------------------------------
<FN>
- -----------------------------
(5) The "face amount" is the basic amount of insurance coverage under your policy.
(6) This additional surrender charge, however, applies only to the amount (if any) by which the increase causes the face
amount to exceed its highest previous amount. See "Surrender Charge" on page __ below.
(7) No charge, however, would ever apply to a transfer of all of your variable investment option amounts to our guaranteed
interest option.
</FN>
</TABLE>
7
<PAGE>
YOU ALSO BEAR YOUR PROPORTIONATE SHARE OF ALL FEES AND EXPENSES PAID BY A
"PORTFOLIO" THAT CORRESPONDS TO ANY VARIABLE INVESTMENT OPTION YOU ARE USING:
This table shows the fees and expenses paid by each Portfolio for the year ended
December 31, 1998. These fees and expenses are reflected in value of the
Portfolio's net assets each day. Therefore, they reduce the investment return of
the Portfolio and of the related variable investment option. Actual fees and
expenses are likely to fluctuate from year to year. All figures are expressed as
an annual percentage of each Portfolio's daily average net assets.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
1998 FEES AND EXPENSES
---------------------------------------------------------------------------
PORTFOLIOS THAT ARE PART OF THE HUDSON RIVER TRUST MANAGEMENT FEE OTHER EXPENSES TOTAL ANNUAL EXPENSES
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Alliance Money Market
Alliance Intermediate Government Securities
Alliance Quality Bond
Alliance High Yield
Alliance Growth & Income
Alliance Equity Index
Alliance Common Stock
Alliance Global
Alliance International
Alliance Aggressive Stock
Alliance Small Cap Growth
Alliance Conservative Investors
Alliance Balanced
Alliance Growth Investors
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------
1998 FEES AND EXPENSES
------------------------------------------------------------------------
PORTFOLIOS THAT ARE PART OF THE EQ ADVISORS TRUST TOTAL
MANAGEMENT FEE 12B-1 FEES OTHER EXPENSES* ANNUAL EXPENSES
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
T. Rowe Price Equity Income
EQ/Putnam Growth & Income Value
Merrill Lynch Basic Value Equity
MFS Research
T. Rowe Price International Stock
Morgan Stanley Emerging Markets Equity
Warburg Pincus Small Company Value
MFS Emerging Growth Companies
EQ/Putnam Balanced
Merrill Lynch World Strategy
<FN>
- -------------------
* After fee waivers or assumptions by EQ Advisors Trust's manager pursuant to an expense limitation agreement. See the attached
EQ Advisors Trust prospectus.
</FN>
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
HOW WE ALLOCATE CHARGES AMONG YOUR INVESTMENT OPTIONS
In your application for a policy, you tell us from which investment
options you want us to take the policy's monthly deductions as they fall due.
You can change these instructions at any time. If we cannot deduct the charge as
your most current instructions direct, we will allocate the deduction among your
investment options proportionately to your value in each.
8
<PAGE>
CHANGES IN CHARGES
We reserve the right in the future to (1) make a periodic charge for
certain taxes or reserves set aside for taxes (see "Our Taxes" on page ___
below), (2) make a charge for any illustration of how your policy's values could
change over time, if you request more than one illustration in the same year, or
(3) make a charge for our asset rebalancing service.
Any changes that we make in our current charges or charge rates will be
by class of insured person and will be based on changes in future expectations
about such factors as investment earnings, mortality experience, the length of
time policies will remain in effect, premium payments, expenses and taxes. Any
changes in charges may apply to then outstanding policies, as well as to new
policies, but we will not raise any charges above any maximums discussed in this
prospectus.
9
<PAGE>
RISKS YOU SHOULD CONSIDER
Some of the principal risks of investing in a policy are as follows:
o If the investment options you choose perform poorly, you could lose
some or all of your money.
o If the investment options you choose do not make enough money to pay
for the policy charges, you could have to pay more premiums to keep
your policy from terminating.
o Within limits, we can increase certain charges without your consent.
o You may have to pay a surrender charge if you wish to discontinue
some or all of your insurance coverage under a policy.
Your policy permits other transactions that also have risks. These and other
risks and benefits of investing in a policy are discussed in detail throughout
this prospectus.
POLICY FEATURES AND BENEFITS
HOW YOU CAN PAY FOR AND CONTRIBUTE TO YOUR POLICY
Premium payments. We call the amounts you contribute to your policy
"premiums" or "premium payments." The amount we require as your first premium
varies depending on the specifics of your policy and the insured person. Each
subsequent premium payment must be at least $100, although we can increase this
minimum if we give you advance notice. (Policies issued in some states or
automatic premium payment plans may have different minimums.) Otherwise, with a
few exceptions mentioned below, you can make premium payments at any time and in
any amount.
[Side bar: You can generally pay premiums at such times and in such amounts as
you like, so long as (i) you pay enough to cover the charges we deduct and (ii)
you don't exceed certain limits determined by the federal income tax laws
applicable to life insurance.]
Limits on premium payments. The federal tax law definition of "life
insurance" limits your ability to pay certain high levels of premiums (relative
to the amount of your policy's insurance coverage). If your premium payments
exceed certain other amounts specified under the Internal Revenue Code, your
policy will become a "modified endowment contract," which may subject you to
additional taxes and penalties on any distributions from your policy. These tax
law premium limits are summarized further under "Tax Information" beginning on
page __ below. We may return to you any premium payments that would exceed those
limits.
The Illustrations of Policy Benefits that your Equitable of Colorado
associate will provide you show how much premiums you could pay, based on
various assumptions, without exceeding these tax law limits. The tax law limits
can change as a result of certain changes you make under your policy. For
example, a reduction in the face amount of your policy may reduce the amount of
premiums that you can pay.
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At any time when your policy's account value is high enough that the
alternative death benefit discussed on page ___ below would apply, we reserve
the right to limit the amount of any premiums that you pay, unless the insured
person provides us with adequate evidence that he/she continues to meet our
requirements for issuing insurance. The requirement for such evidence, however,
would apply only to the amounts of premiums you paid in any year of your policy
that exceeds your annual no-lapse guarantee premium or your annual planned
periodic premium (whichever is greater). Planned periodic premiums are discussed
immediately below, and no-lapse guarantee premiums are discussed below on page
___.
Planned periodic premiums. Page __ of your policy will specify a "planned
periodic premium." This is the amount that you request us to bill you. However,
payment of these or any other specific amounts of premiums is not mandatory. You
need to pay only enough premiums to ensure that your policy has enough "net cash
surrender value" to cover your policy's monthly charges as they fall due or that
your no-lapse guarantee (discussed below) remains in effect. ("Net cash
surrender value" is explained under "Surrendering Your Policy For its Net Cash
Surrender Value" on page __ below.)
Checks and money orders. Premiums generally must be paid by check or money
order drawn on a U.S. bank in U.S. dollars and made payable to "Equitable of
Colorado." See "Alternative Ways to Make Premium and Loan Repayments" on page __
below.
THE MINIMUM AMOUNT OF PREMIUMS YOU MUST PAY
Policy "lapse" and termination. Your policy will lapse if it does not have
enough net cash surrender value to pay the monthly charges when due and the no
lapse guarantee is not then in effect. We will mail a notice to you at your last
known address if your policy lapses. You will have a 61 day grace period to pay
at least an amount prescribed in your policy, which would be enough to keep your
policy in force for approximately three months. You may not make any transfers
or request any other policy changes during a grace period. If we do not receive
your payment by the end of the grace period, your policy (and all riders to the
policy) will terminate without value and all coverage under your policy will
cease. We will mail an additional notice to you if your policy terminates.
[Side bar: Your policy will terminate if you don't pay enough premiums either to
pay the charges we deduct or to keep the no-lapse guarantee in effect. However,
we will first send you a notice and give you a chance to cure any shortfall.]
You may owe taxes if your policy terminates while you have a loan
outstanding, even though you receive no additional money from your policy at
that time. See "Tax Information," beginning on page __ below.
Restoring a terminated policy. To have your policy "restored" (put back in
force), you must apply within six months after the date of termination. In some
states, you may have a longer period of time. You must also present evidence
that the insured person still meets our requirements for issuing coverage and
pay at least the amount of premium that we require. Your policy contains
additional information about the minimum amount of this premium and about the
values and terms of the policy after it is restored.
No-lapse guarantee and premiums. Page __ of your policy will specify a
"no-lapse guarantee premium." Payment of the no-lapse guarantee premiums is not
required. However, we measure the actual premiums you have paid against the
no-lapse guarantee premiums to see if the no-lapse guarantee provision will
prevent a policy from lapsing. For more detail about how we do this, see "No
lapse guarantee test"
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below. The no-lapse guarantee provision, however, will not prevent your policy
from lapsing if you have an outstanding policy loan.
[Side bar: In most states, if you pay at least certain prescribed amounts of
premiums, and limit your policy loans, your policy will not lapse for a number
of years, even if the value in your policy becomes insufficient to pay the
monthly charges.]
In most states, the no lapse guarantee provision will last for the first
twenty years of your policy if the insured person was age 59 or younger when the
policy was issued, and for the first fifteen years in the case of other issue
ages. In some states, however, the no-lapse guarantee is unavailable or limited
to a much shorter period of time. Any such variations will appear on page 3 of
your policy.
We will bill you only for planned periodic premiums. Therefore, if you
want to be billed for your no-lapse guarantee premium, you should select that
option in your application for a policy. Your planned periodic premium will then
be your no-lapse guarantee premium.
No-lapse guarantee test. If your policy's net cash surrender value is not
sufficient to pay a monthly deduction that has become due, we check to see if
the cumulative amount of premiums that you have paid to date at least equals the
cumulative no-lapse guarantee premiums due to date. So long as at least this
amount has been paid, your policy will not lapse.
The amount of premiums you must pay to maintain the no-lapse guarantee
will be increased by the cumulative amount of any partial withdrawals you have
taken from your policy. When we calculate these cumulative amounts of premiums,
no-lapse guarantee premiums, and withdrawals, we compound each amount at a 4%
annual interest rate from the date of the transaction (for a no-lapse guarantee
premium, the due date) through the date of the calculation. This interest rate
is purely hypothetical, however, and does not necessarily bear any relation to
the returns you will actually earn or any loan interest you will actually pay.
The amount of the no-lapse guarantee premium set forth in your policy is
actuarially determined at policy issuance and depends on the age and other
insurance risk characteristics of the insured person, as well as the amount and
nature of the coverage you select. The no-lapse guarantee premiums may change if
you make policy changes that increase or decrease the face amount of the policy
or a rider, add or eliminate a rider, or if there is a change in the insured
person's risk characteristics. Certain additional benefit riders will cause the
no-lapse guarantee to increase each year. We will send you a new policy page
showing any change in your no-lapse guarantee premium. Any change will be
prospective only, and no change will extend the no-lapse period beyond its
original number of years.
INVESTMENT OPTIONS WITHIN YOUR POLICY
We will initially allocate all of your policy's value to our Alliance
Money Market investment option. On the twenty-first day after your policy's
issue date, (the "Allocation Date"), we will re-allocate that investment in
accordance with your premium allocation instructions then in effect. You give
such instructions in your application to purchase a policy. You can change the
premium allocation percentages at any time, but this will not affect any prior
allocations. The allocation percentages that you specify must always be in whole
numbers and total exactly 100%.
Variable investment options. The 24 variable investment options currently
available are listed on the front cover of this prospectus. The investment
results you will achieve in any one of these options will depend on the
investment performance of a corresponding Portfolio that shares the same name as
that option.
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The advisers who make the investment decisions for the Portfolio that
corresponds to each variable investment option are as follows:
[Side bar: You can choose among 24 variable investment options]
Alliance Capital Management L.P. (for each "Alliance" option)
T. Rowe Price Associates, Inc. and
Rowe Price-Fleming International, Inc.(for both "T. Rowe Price"
options)
Putnam Investment Management, Inc. (for both "EQ/Putnam" options)
Merrill Lynch Asset Management L.P. (for both "Merrill Lynch" options)
Massachusetts Financial Services Company (for both "MFS" options)
Morgan Stanley Asset Management Inc. (for the "Morgan Stanley" option)
Warburg Pincus Asset Management, Inc. (for the "Warburg Pincus"
option)
The Portfolio that corresponds to each variable investment option that has
"Alliance" in its name is a part of The Hudson River Trust. Each other Portfolio
is a part of EQ Advisors Trust. EQ Financial Consultants, Inc., a subsidiary of
Equitable Life and an affiliate of Equitable of Colorado, serves as investment
manager of the EQ Advisers Trust. As such, EQ Financial Consultants oversees the
activities of the above-listed advisers with respect to EQ Advisers Trust and is
responsible for retaining or discontinuing the services of those advisers. You
will find other important information about each Portfolio in the separate
prospectuses for The Hudson River Trust and EQ Advisors Trust attached at the
end of this prospectus. We may add or delete variable investment options or
Portfolios at any time.
Guaranteed interest option. You can also allocate some or all of your
policy's value to our guaranteed interest option. We, in turn, invest such
amounts as part of our general assets. For each year of your policy, we declare
a fixed rate of interest on amounts you allocate to our guaranteed interest
option.
[Side-bar: We will pay at least 4% annual interest on our guaranteed interest
option.]
ABOUT YOUR LIFE INSURANCE BENEFIT
Your policy's face amount. In your application to buy an IL Protector
policy, you tell us how much insurance coverage you want on the life of the
insured person. We call this the "face amount" of the policy. $50,000 is the
smallest amount of coverage you can request.
[Side-bar: If the insured person dies, we pay a life insurance benefit to the
"beneficiary" you have named. The amount we pay
depends on whether you have chosen death benefit Option A or death benefit
Option B.]
Your policy's "death benefit" options. In your policy application, you
also choose whether the basic amount (or "benefit") we will pay if the insured
person dies is
o Option A - THE POLICY'S FACE AMOUNT on the date of the insured
person's death. The amount of this death benefit doesn't change over
time, unless you take any action that changes the policy's face
amount;
- or -
o Option B - THE FACE AMOUNT PLUS THE POLICY'S "ACCOUNT VALUE" on the
date of death. Under this option, the amount of death benefit
generally changes from day to day, because many factors
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(including investment performance, charges, premium payments and
withdrawals) affect your policy's account value.
[Side bar: Your policy's "account value" is the total amount that at any time is
earning interest for you or being credited with investment gains and losses
under your policy. (Account value is discussed in more detail under "Determining
Your Policy's Value" beginning on page __ below.)]
Under Option B, your policy's death benefit will tend to be higher than
under Option A. As a result, the monthly insurance charge we deduct will also be
higher, to compensate us for our additional risk.
Alternative higher death benefit in limited cases. Your policy is designed
to always provide a minimum level of insurance protection relative to your
policy's account value. Thus, we will automatically pay an alternative death
benefit if it is HIGHER than the basic Option A or Option B death benefit you
have selected. This alternative death benefit is computed by multiplying your
policy's account value on the insured person's date of death by a percentage
specified in your policy. The percentage depends on the insured person's age.
Representative percentages are as follows:
[Side bar: If the value in your policy is high enough, relative to the face
amount, the life insurance benefit will automatically be greater than the Option
A or Option B death benefit you have selected.]
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Age:* 40 or Under 45 50 55 60 65 70 75 to 95 100
%: 250% 215% 185% 150% 130% 120% 115% 105% 100%
<FN>
* For the then-current policy year.
</FN>
</TABLE>
This higher alternative death benefit exposes us to greater insurance risk
than the regular Option A and B death benefits. Because the cost of insurance
charges we make under your policy are based in part on the amount of our risk,
you will pay higher cost of insurance charges for any periods during which the
higher alternative death benefit is the operative one.
Other adjustments to death benefit. We will increase the death benefit
proceeds by the amount of any other benefits we owe upon the insured person's
death under any optional riders you have chosen.
We will reduce the death benefit proceeds by the amount of any remaining
policy loans and unpaid loan interest, as well as any amount of monthly charges
under the policy that have become due but have not been paid because of
insufficient value in the policy. We also reduce the death benefit if we have
already paid part of it under a living benefit rider. See "Payments Under Our
Living Benefit Rider" on page __ below.
[Side-bar: You can request to change your death benefit option any time after
the second year of the policy.]
Change of death benefit option. If you change from Option A to B, we
automatically reduce your policy's face amount by an amount equal to your
policy's account value at the time of the change. We may refuse this change if
the policy's face amount would thus be reduced below our then current minimum
for new policies. Also, we may require you to provide us with satisfactory
evidence that the insured person remains insurable at the time of this change.
If you change from Option B to A, we automatically increase your policy's face
amount by the amount of such account value. We will not deduct or establish any
amount of surrender charge as a result of a change in death benefit option.
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If the alternative death benefit discussed above would be in effect at the
time of the change, we will determine the new face amount somewhat differently
from the general procedures described above.
Please refer to "Tax Information" beginning on page __ below, to learn
about certain possible income tax consequences that may result from a change in
death benefit option.
YOU CAN CHANGE YOUR POLICY'S INSURED PERSON
After the policy's second year, we will permit you to request that a new
insured person replace the existing one. This requires that you provide us with
adequate evidence that the proposed new insured person meets our requirements
for insurance.
Upon making this change, the monthly insurance charges we deduct and
prospective no-lapse guarantee premiums will be based on the new insured
person's insurance risk characteristics. The change of insured person will not,
however, affect the surrender charge computation for the amount of coverage that
is then in force.
Substituting the insured person is a taxable event and may, depending upon
individual circumstances, have other tax consequences as well. For example, the
change could cause the policy to be a "modified endowment contract" or to fail
the Internal Revenue Code's definition of "life insurance," unless we also
distribute certain amounts to you from the policy. See "Tax Information"
beginning on page __ below. You should consult your tax advisor prior to
substituting the insured person. As a condition to substituting the insured
person we may require you to sign a form acknowledging the potential tax
consequences. In no event, however, will we permit a change that causes your
policy to fail the definition of life insurance.
YOU CAN INCREASE OR DECREASE YOUR INSURANCE COVERAGE
You may increase the life insurance coverage under your policy by
requesting an increase in your policy's face amount. You can do so any time
after the first year of your policy. You may request a decrease in your policy's
face amount any time after the second year of your policy. The requested
increase or decrease must be at least $10,000. Please refer to "Tax Information"
beginning on page __ for certain possible tax consequences of changing the face
amount.
We can refuse any requested increase or decrease. We will not approve any
increase or decrease if we are at that time being required to waive charges
under any optional disability waiver rider that is part of the policy. The
following additional conditions also apply:
Face amount increases. We treat an increase in face amount in many respects as
if it were the issuance of a new policy. For example, you must submit
satisfactory evidence that the insured person still meets our requirements for
coverage; and the monthly insurance charge we make for the amount of the
increase will be based on the age and other insurance risk characteristics of
the insured person at the time of the increase. Also, we establish an additional
amount of surrender charge and no-lapse premium under your policy for the face
amount increase; these amounts are essentially the same as they would be if we
were instead issuing the same amount of additional coverage as a new policy.
In most states, you can cancel the face amount increase within 10 days
after you receive a new policy page showing the increase. If you cancel, we will
reverse any charges attributable to the increase and recalculate all values
under your policy to what they would have been had the increase not taken place.
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If we refuse a requested face amount increase because the insured person's
risk characteristics have become less favorable, we may issue the additional
coverage as a separate IL Protector policy with a different insurance risk
classification.
Face amount decreases. You may not reduce the face amount below the
minimum we are then requiring for new policies. Nor will we permit a decrease
that would cause your policy to fail the Code's definition of life insurance. No
lapse guarantee premiums, as well as our monthly deductions for the cost of
insurance coverage, will generally decrease (prospectively) after you reduce the
face amount.
If you reduce the face amount during the first 15 years of your policy, or
during the first 15 years after a face amount increase you have requested, we
will deduct from your policy all or part of the remaining surrender charge.
Assuming you have not previously changed the face amount, the amount of
surrender charge we will deduct will be determined by dividing the amount of the
decrease by the initial face amount and multiplying that fraction by the total
amount of surrender charge that still remains applicable to your policy
In some cases, we may have to make a distribution to you from your policy
in order to implement a face amount decrease that you have requested. This may
be necessary in order to preserve your policy's status as life insurance under
the Internal Revenue Code.
OTHER BENEFITS YOU CAN ADD BY RIDER
You may be eligible for the following other optional benefits we currently
make available by rider:
o disability waiver benefit o term insurance on an additional insured
o accidental death benefit person
o children's term insurance o option to purchase additional insurance
o cost-of-living rider
Equitable of Colorado or your Equitable of Colorado associate can provide you
with more information about these riders. The riders provide additional
information, and we will furnish samples of them to you on request. The maximum
amount of any charge we make for a rider will be set forth in the rider or in
the policy itself. We can, however, add, delete, or modify the riders we are
making available, at any time before they become effective as part of your
policy.
The option to purchase additional insurance rider permits you to purchase
additional coverage on the insured person, without evidence of insurability, if
specified events occur.
The cost of living rider provides for scheduled automatic face amount
increases that, within limits, reflect increases in the Consumer Price Index.
These automatic face amount increases will result in a prospective increase in
your no lapse guarantee premiums and an additional surrender charge, in the same
manner as would any other face amount increase you request. However, the
administrative charge applicable to other face amount increases does not apply
to increases made under this rider.
See also "Tax Information" beginning on page __ below for certain possible
tax consequences of face amount increases or adding or deleting riders.
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<PAGE>
YOUR OPTIONS FOR RECEIVING POLICY PROCEEDS
Beneficiary of death benefit. You designate your beneficiary in your
policy application. You can change your policy's beneficiary at any other time
during the insured person's life. If no beneficiary is living when the insured
person dies, we will pay the death benefit proceeds in equal shares to the
insured person's surviving children. If there are no surviving children, we will
instead pay the insured person's estate.
Payment options. In your policy application, or at any other time during
the insured person's life, you may choose among several payment options for all
or part of any death benefit proceeds that subsequently become payable. These
payment options are described in the policy and may result in varying tax
consequences. The terms and conditions of each option are set out in a separate
contract that we will send the payee when any such option goes into effect.
Equitable of Colorado or your Equitable of Colorado associate can provide you
with samples of such contracts on request.
[Side-bar: You can choose to have the proceeds from the policy's life insurance
benefit paid under one of our payment options, rather than as a single sum.]
If you have not elected a payment option, we will pay any death benefit in
a single sum. If the beneficiary is a natural person (i.e., not an entity such
as a corporation or trust) we will pay any such single sum death benefit through
an interest-bearing checking account (the "Access Account") that we will
automatically open for the beneficiary. The beneficiary will have immediate
access to the proceeds by writing a check on the account. We pay interest on the
proceeds from the date of death to the date the beneficiary closes the Access
Account. The annual rate will be at least 3%.
If an Equitable of Colorado associate has assisted the beneficiary to
prepare the documents that are required for payment of the death benefit, we
will send the Access Account checkbook or check to the associate within the
periods specified for death benefit payments under "When We Pay Policy
Proceeds," beginning on page __ below. Our associates will take reasonable steps
to arrange for prompt delivery to the beneficiary.
A beneficiary for whom we have opened an Access Account has up to __ days
to select among our death benefit payment options.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your policy, you may return
it to us for a full refund. In some states, we will adjust this amount for any
investment performance you have earned. If the policy was purchased through an
exchange of another Equitable or Equitable of Colorado insurance policy, the
refund may take the form of restoring that prior policy.
To exercise this cancellation right, you must mail the policy directly to
our Administrative Office. Your cancellation request must be postmarked within
10 days after you receive it and your coverage will terminate as of the date of
the postmark. In a few jurisdictions, the period is longer than 10 days, if page
__ of your policy so states.
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VARIATIONS AMONG IL PROTECTOR POLICIES
Time periods and other terms and conditions described in this prospectus
may vary due to legal requirements in your state. These variations will be
reflected in your policy.
Equitable of Colorado also may vary the charges and other terms of IL
Protector where special circumstances result in sales or administrative expenses
or mortality risks that are different from those normally associated with IL
Protector. We will make such variations only in accordance with uniform rules
that we establish.
Equitable of Colorado or your Equitable of Colorado associate can advise
you about any variations that may apply to your policy.
DETERMINING YOUR POLICY'S VALUE
YOUR ACCOUNT VALUE
As set forth on page __ above, we deduct certain charges from each premium
payment you make. We credit the rest of each premium payment to your policy as
"account value." You instruct us to allocate your account value to one or more
of the policy's investment options indicated on the front cover of this
prospectus.
In addition to amounts in our investment options, your account value
includes any amounts that we are holding to secure policy loans that you have
taken out. See "Borrowing From Your Policy" beginning on page _____ below.
Your policy's value in our variable investment options. We invest the
account value that you have allocated to any variable investment option in
shares of the corresponding Portfolio. That Portfolio, in turn, follows
investment practices, policies and objectives that are appropriate to the
variable investment option you have chosen. Your account value in that option
will increase or decrease by the same amount as if you had invested it in the
corresponding Portfolio's shares directly (and reinvested all dividends and
distributions from the Portfolio in additional Portfolio shares); except that
your account value will be reduced by the amount of the charges described in the
table on pages __ above.)
[Side-Bar: Generally speaking, your account value will be credited with the same
returns as are achieved by the Portfolios (or guaranteed interest option) that
you select, but will also be reduced by the amount of charges we deduct under
the policy.]
For convenience, we keep track of your account value in each variable
investment option by use of a measuring device that we call a "unit." Each
variable investment option has its own "unit," whose value increases or
decreases each day. The rate of such increase or decrease for any period is the
same as the corresponding Portfolio's investment return for that same period
(assuming reinvestment of any dividends or distributions from the Portfolio)
less the percentage equivalent of the policy's mortality and expense charge for
that period. On any day, your account value in any variable investment option
equals the number of that option's units credited to your policy, multiplied by
that day's value for one such unit.
Whenever any amount is withdrawn or deducted from one of your policy's
variable investment options, we "redeem" (cancel) the number of units that has a
value equal to that amount. This can happen, for example, when monthly
deductions and transaction-based charges are allocated to that option, or when
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<PAGE>
loans, transfers, withdrawals and surrenders are made from that option.
Similarly, we "purchase" for you additional units having the same value as the
amount of any premium, loan repayment, or transfer that you allocate to that
variable investment option. The number of your policy's units in any variable
investment option does not change, absent an event or transaction under your
policy that involves moving assets into or out of that option.
Your policy's value in our guaranteed interest option. Your policy's
account value in our guaranteed interest option includes not only any amounts
you have specifically requested that we allocate to that option, but also any
"restricted" amounts that we hold in that option as a result of your election to
receive a living benefit. See "Payments Under Our Living Benefit Rider" on page
__ below. We credit all of such amounts with interest at rates we declare. We
guarantee that these rates will not be less than a 4% effective annual rate. The
mortality and expense risk charge mentioned above does not apply to our
guaranteed interest option.
Amounts may be allocated to or removed from your policy's account value in
our guaranteed interest option for the same purposes as described above for the
variable investment options. We credit your policy with a number of dollars in
that option that equals any amount that is being allocated to it. Similarly, if
amounts are being removed from your guaranteed interest option for any reason,
we reduce the amount you have credited to that option on a dollar-for-dollar
basis.
TRANSFERRING YOUR MONEY AMONG OUR INVESTMENT OPTIONS
TRANSFERS YOU CAN MAKE
After your policy's initial investment Allocation Date, you can transfer
amounts from one investment option to another. The total of all transfers you
make on the same day must be at least $500; except that you may transfer your
entire balance in an investment option, even if it is less than 500. You may
submit a written request for a transfer to our Administrative Office or you can
make a telephone request (see below).
[Side-bar: You can transfer freely among our variable investment options and
into our guaranteed interest option.]
However, we permit you to make only one transfer out of our guaranteed
interest option during each year of your policy. (No such limit applies to
transfers out of our variable investment options.) Also, no transfer from our
guaranteed interest option may be for more than the greater of (a) 25% of your
then current balance in that option (b) $500, or (c) the amount (if any) that
you transferred out of the guaranteed interest option during the immediately
preceding year of your policy.
[Side-bar: Transfers out of our guaranteed interest option are more limited.]
We will not accept a request to transfer out of the guaranteed interest
option unless we receive it within the period beginning 30 days before and
ending 60 days after an anniversary of your policy. If we receive the request
within that period, the transfer will occur as of that anniversary or, if later,
the date we receive it.
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TELEPHONE TRANSFERS
You can make telephone transfers by following one of two procedures:
o if you are both the policy's insured person and its owner, by calling
1-888-855-5100 (toll free) from a touch tone phone; or
o if you are not both the insured person and owner, by signing a
telephone transfer authorization form and sending it to us. Once we
have the form on file, we will provide you with a toll-free telephone
number to make transfers.
For more information see "Telephone Requests" on page __ below. We allow only
one telephone transfer each day, and we will not allow you to revoke a telephone
transfer. If you are unable to reach us by telephone, you should send a written
transfer request to our Administrative Office.
OUR AUTOMATIC TRANSFER SERVICE
Our automatic transfer service enables you to make automatic monthly
transfers from the Alliance Money Market option to our other variable investment
options. You need a minimum of $5,000 in the Alliance Money Market option to
begin using the automatic transfer service. You can choose up to eight other
variable options to receive the automatic transfers but each transfer to each
option must be at least $50. Note: Transfers made using our automatic transfer
service do not count toward the twelve free transfers you may otherwise make
each year.
You may elect the automatic transfer service with your policy application
or at any later time. You can also cancel the automatic transfer service at any
time.
OUR ASSET REBALANCING SERVICE
You may wish us to periodically redistribute the amounts you have in our
variable investment options so that the relative amount of your account value in
each variable option is restored to the initial allocation you specify, or to
any other allocation percentages you choose. You can accomplish this
automatically through our asset rebalancing service. The rebalancing may be on a
one-time basis or at monthly, quarterly, semi-annual, or annual intervals.
You may request the asset rebalancing service in your original policy
application or at any time thereafter. You may discontinue participation in the
asset rebalancing service at any time. The allocation percentage you specify for
each variable investment option selected must be a whole number (5% minimum) of
your total value you hold under variable investment options, and the sum of the
percentages must equal 100%. You may not use more than eight variable investment
options at any time you are using the asset rebalancing service. You may not
simultaneously participate in the asset rebalancing service and the automatic
transfer service (discussed above). Note: Transfers made using the asset
rebalancing service do not count toward the twelve free transfers you may make
each year.
ACCESSING YOUR MONEY
BORROWING FROM YOUR POLICY
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You may borrow up to 90% of the difference between your policy's account
value and any surrender charges that are in effect under your policy. However,
the amount you can borrow will be reduced by any amount that we hold on a
"restricted" basis following your receipt of a living benefit payment. See
"Payments Under Our Living Benefit Rider" beginning on page __ below. Each new
loan you request must be at least $500.
[Side-bar: You can use policy loans to obtain funds from your policy without
surrender charges or tax consequences.]
When you take a policy loan, we remove an amount equal to the loan from
one or more of your investment options and hold it as collateral for the loan's
repayment. We hold this loan collateral under the same terms and conditions as
apply to amounts supporting our guaranteed interest option, with two exceptions.
First, you cannot make transfers of the collateral; and second, we expect to
credit different rates of interest to loan collateral than we credit under our
guaranteed interest option.
When you request your loan, you should tell us how much of the loan
collateral you wish to have taken from any amounts you have in each of our
investment options. If you do not give us directions (or if we are making the
loan automatically to cover unpaid interest), we will take the loan from your
investment options in the same proportion as we are then taking monthly
deductions. If that is not possible, we will take the loan from your investment
options in proportion to your value in each.
Loan interest we charge. The interest we charge on a policy loan accrues
daily at an adjustable interest rate. We determine the rate at the beginning of
each year of your policy, and that rate applies to all policy loans that are
outstanding at any time during the year. The maximum rate is the greater of (a)
5% or (b) the "Monthly Average Corporate" yield published in Moody's Corporate
Bond Yield Averages for the month that ends two months before the interest rate
is set. (If that average is no longer published, we will use another average, as
the policy provides.) We will notify you of the current loan interest rate when
you apply for a loan, and will notify you in advance of any rate increase.
Loan interest payments are due on each policy anniversary. If not paid
when due, we automatically add the interest as a new policy loan.
Interest that we credit on loan collateral. Under our current rules, the
annual interest rate we credit on your loan collateral during any of your
policy's first fifteen years will be 1% less than the rate we are then charging
you for policy loan interest, and, beginning in the policy's 16th year, 1/4%
less than the loan interest rate. Because IL Protector was first offered only in
199_, no such reduction in the interest rate differential has yet been attained
under any outstanding policy. The rate differentials are not guaranteed.
Accordingly, we have discretion to increase the rate differential for any
period, including under policies that are already outstanding. We do guarantee
that the annual rate of interest credited on your loan collateral will never be
less than 4% and that the differential will not exceed 2% (except if tax law
changes increase the taxes we pay on policy loans or loan interest).
[Side-bar: At our current rates, taking a loan effectively costs you 1% per
annum. Also, the borrowed amount is no longer credited with the investment
results of any of our investment options under the policy, and we will deduct
the loan from your policy's proceeds if you do not pay it back.]
Interest we pay on your loan collateral accrues daily. On each anniversary
of your policy (or when your policy loans are fully discharged) we contribute
that interest to your policy's investment options in the same proportions as if
it were a premium payment.
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Effects of policy loans. A loan can reduce the length of time that your
insurance remains in force, because the amount we set aside as loan collateral
cannot be used to pay charges as they become due. A loan will also prevent your
policy's no-lapse guarantee from keeping the policy in force. See "Tax
Information" beginning on page __ below for a discussion of the tax consequences
of policy loans.
Paying off your loan. You can repay all or part of your loan at any time.
We normally assume that payments you send us are premium payments. Therefore,
you must submit instructions with your payment indicating that it is a loan
repayment. If you send us more than all of the loan principal and interest you
owe, we will treat the excess as a premium payment.
When you send us a loan payment, we will transfer an amount equal to such
repayment from your loan collateral back to the investment options under your
policy. First we will restore any amounts that, before being designated as loan
collateral, had been in the guaranteed interest option under your policy. We
will allocate any additional repayments among investment options as you
instruct; or, if you don't instruct us, in the same proportion as if they were
premium payments.
MAKING WITHDRAWALS FROM YOUR POLICY
You may make a partial withdrawal of your net cash surrender value at any
time after the first year of your policy. The request must be for at least $500,
however, and we have discretion to decline any request. If you do not tell us
from which investment options you wish us to take the withdrawal, we will use
the same allocation that then applies for the monthly deductions we make; and,
if that is not possible, we will take the withdrawal from all of your investment
options in proportion to your value in each.
[Side-bar: You can withdraw all or part of your policy's net cash surrender
value, although you may incur charges and tax consequences by doing so.]
Effect of partial withdrawals on insurance coverage. If the Option A death
benefit is in effect, a partial withdrawal results in a dollar-for-dollar
automatic reduction in the policy's face amount (and, hence, an equal reduction
in the Option A death benefit). We will not permit a partial withdrawal that
would reduce the face amount below our minimum for new policy issuances at the
time, or that would cause the policy to no longer be treated as life insurance
for federal income tax purposes. If death benefit Option B is in effect, a
partial withdrawal also reduces the death benefit on a dollar for dollar basis,
but does not affect the face amount.
The result is different, however, during any time when the alternative
death benefit (discussed on page __ above) would be higher than the Option A or
B death benefit you have selected. In that case, a partial withdrawal will cause
the death benefit to decrease by more than the amount of the withdrawal. Please
also remember that a partial withdrawal reduces the amount of your premium
payments that counts toward maintaining the policy's no-lapse guarantee.
You can choose to receive all or part of the proceeds from a partial
withdrawal under one of our payment options, rather than as a single sum. You
should refer to "Tax Information" beginning on page __ below, for information
about possible tax consequences of partial withdrawals and any associated
reduction in policy benefits.
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SURRENDERING YOUR POLICY FOR ITS NET CASH SURRENDER VALUE
You can surrender (give us back) your policy for its "net cash surrender
value" at any time. The net cash surrender value equals your account value,
minus any outstanding loans and unpaid loan interest, minus any amount of your
account value that is "restricted" as a result of previously distributed "living
benefits," minus any surrender charge that then remains applicable. The
surrender charge is described on page __ above.
You can choose to receive all or part of this amount under one of our
payment options, rather than as a single sum. Please refer to "Tax Information"
beginning on page __ below for the possible tax consequences of surrendering
your policy.
WHEN THE INSURED PERSON REACHES AGE 100 ("MATURITY")
If the insured person is still living on the policy anniversary closest to
his or her 100th birthday, we will pay you the policy's account value on that
date, reduced by any outstanding loans, by unpaid loan interest, and by any
amounts of the account value that are "restricted" as a result of previously
distributed "living benefits." The policy will then terminate. You can choose to
receive all or part of this amount under one of our payment options, rather than
as a single sum. See "Tax Information" beginning on page __ below for the tax
consequences of maturity.
YOUR OPTION TO RECEIVE A LIVING BENEFIT
Subject to our insurance underwriting guidelines and availability in your
state, your policy will automatically include our living benefit rider. This
feature enables you to receive a portion of the policy's death benefit
(excluding death benefits payable under certain other policy riders), if the
insured person has a terminal illness (as defined in the rider). We make no
additional charge for the rider, but we deduct an administrative charge of up to
$250 from any living benefit payment.
If you tell us that you do not wish to have the living benefit rider added
at issue, but you later ask to add it, there will be a $100 administrative
charge. Also, we will need to evaluate the insurance risk at that time, and we
may decline to issue the rider.
If you receive a living benefit, the remaining benefits under your policy
will also be affected in the manner discussed under "Payments Under Our Living
Benefit Rider" on page __ below.
The receipt of a living benefit payment may qualify for exclusion from
income tax. See "Tax Information" below. Receipt of a living benefit payment may
affect your eligibility for certain government benefits or entitlements.
[Side-bar: You can arrange to receive a "living benefit" if the insured person
becomes terminally ill.]
TAX INFORMATION
This discussion is based on current federal income tax law and
interpretations. It assumes that the policy owner is a natural person who is a
U.S. citizen and resident. The tax effects on corporate taxpayers, non-U.S.
residents or non-U.S. citizens may be different. This discussion is general in
nature, and should not be considered tax advice, for which you should consult a
qualified tax advisor.
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BASIC TAX TREATMENT FOR YOU AND YOUR BENEFICIARY
An IL Protector policy will be treated as "life insurance" for federal
income tax purposes (a) if it meets the definition of life insurance under
Section 7702 of the Internal Revenue Code (the "Code") and (b) as long as the
investments made by the underlying Portfolios satisfy certain investment
diversification requirements under Section 817(h) of the Code. We believe that
the policies will meet these requirements and, therefore, that
o the death benefit received by the beneficiary under your policy will
not be subject to federal income tax; and
o increases in your policy's account value as a result of interest or
investment experience will not be subject to federal income tax,
unless and until there is a distribution from your policy, such as a
surrender, a partial withdrawal, loan or a payment to you that we
believe is required to maintain your policy's status as life insurance
under the Code.
There may be different tax consequences if you assign your policy or
designate a new owner. See "Assigning Your Policy" at page __ below.
TAX TREATMENT OF DISTRIBUTIONS TO YOU
The federal income tax consequences of a distribution from your policy
depend on whether your policy is a "modified endowment contract" (sometimes also
referred to as a "MEC"). In all cases, however, the character of any income
described below as being taxable to the recipient will be ordinary income (as
opposed to capital gain).
Testing for modified endowment contract status. Your policy will be a
"modified endowment contract" if, at any time during the first seven years of
your policy, you have paid a cumulative amount of premiums that exceeds the
premiums that would have been paid by that time under a similar fixed-benefit
insurance policy that was designed (based on certain assumptions mandated under
the Code) to provide for paid-up future benefits after the payment of seven
equal annual premiums. This is called the "seven-pay" test.
Whenever there is a "material change" under a policy, the policy will
generally be (a) treated as a new contract for purposes of determining whether
the policy is a modified endowment contract and (b) subjected to a new seven-pay
period and a new seven-pay limit. The new seven-pay limit would be determined
taking into account, under a prescribed formula, the account value of the policy
at the time of such change. A materially changed policy would be considered a
modified endowment contract if it failed to satisfy the new seven-pay limit at
any time during the new seven-pay period. A "material change" for these purposes
could occur as a result of a change in death benefit option, the selection of
additional rider benefits, an increase in your policy's face amount, and certain
other changes.
If your policy's benefits are reduced during its first seven years (or
within seven years after a material change), the seven-pay limit will be
redetermined based on the reduced level of benefits and applied retroactively
for purposes of the seven-pay test. (Such a reduction in benefits could include,
for example, a requested decrease in face amount, the termination of additional
benefits under a rider or, in some cases, a partial withdrawal.) If the premiums
previously paid are greater than the recalculated seven-pay limit, the policy
will become a modified endowment contract.
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A life insurance policy that you receive in exchange for a modified
endowment contract will also be considered a modified endowment contract.
Taxation of pre-death distributions if your policy is not a modified
endowment contract. As long as your policy remains in force as a non-modified
endowment contract, policy loans will be treated as indebtedness, and no part of
the loan proceeds will be subject to current federal income tax. Interest on the
loan will generally not be tax deductible.
If you make a partial withdrawal after the first 15 years of your policy,
the proceeds will not be subject to federal income tax except to the extent such
proceeds exceed your "basis" in your policy. (Your basis generally will equal
the premiums you have paid, less the amount of any previous distributions from
your policy that were not taxable.) During the first 15 years, however, the
proceeds from a partial withdrawal could be subject to federal income tax, under
a complex formula, to the extent that your account value exceeds your basis.
On the maturity date or upon full surrender, any amount by which the
proceeds we pay (including amounts we use to discharge any policy loan and
unpaid loan interest) exceed your basis in the policy will be subject to federal
income tax. IN ADDITION, IF A POLICY TERMINATES AFTER LAPSE, THE EXTINGUISHMENT
OF ANY THEN-OUTSTANDING POLICY LOAN AND UNPAID LOAN INTEREST WILL BE TREATED AS
A DISTRIBUTION AND COULD BE SUBJECT TO TAX UNDER THE FOREGOING RULES. Finally,
if you make an assignment of rights or benefits under your policy, you may be
deemed to have received a distribution from your policy, all or part of which
may be taxable.
Taxation of pre-death distributions if your policy is a modified endowment
contract. Any distribution from your policy will be taxed on an "income-first"
basis if your policy is a modified endowment contract. Distributions for this
purpose include a loan (including any increase in the loan amount to pay
interest on an existing loan or an assignment or a pledge to secure a loan) or
withdrawal. Any such distributions will be considered taxable income to you to
the extent your account value exceeds your basis in the policy. (For modified
endowment contracts, your basis is similar to the basis described above for
other policies, except that it also would be increased by the amount of any
prior loan under your policy that was considered taxable income to you.)
For purposes of determining the taxable portion of any distribution, all
modified endowment contracts issued by Equitable of Colorado (or its affiliate)
to the same owner (excluding certain qualified plans) during any calendar year
are treated as if they were a single contract.
A 10% penalty tax also will apply to the taxable portion of most
distributions from a policy that is a modified endowment contract. The penalty
tax will not, however, apply to (i) taxpayers whose actual age is at least 59
1/2, (ii) distributions in the case of a disability (as defined in the Code) or
(iii) distributions received as part of a series of substantially equal periodic
annuity payments for the life (or life expectancy) of the taxpayer or the joint
lives (or joint life expectancies) of the taxpayer and his or her beneficiary.
IF YOUR POLICY TERMINATES AFTER A LAPSE, THE EXTINGUISHMENT OF ANY THEN
OUTSTANDING POLICY LOAN AND UNPAID LOAN INTEREST WILL BE TREATED AS A
DISTRIBUTION (to the extent the loan was not previously treated as such) and
could be subject to tax, including the 10% penalty tax, as described above. In
addition, on the maturity date and upon a full surrender, any excess of the
proceeds we pay (including any amounts we use to discharge any loan) over your
basis in the policy, will be subject to federal income tax and, unless an
exception applies, the 10% penalty tax.
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Distributions that occur during a year of your policy in which it becomes
a modified endowment contract, and during any subsequent years, will be taxed as
described in the four preceding paragraphs. In addition, distributions from a
policy within two years before it becomes a modified endowment contract also
will be subject to tax in this manner. This means that a distribution made from
a policy that is not a modified endowment contract could later become taxable as
a distribution from a modified endowment contract.
Restoration of a terminated policy. For tax purposes, some restorations of
a policy that terminated after lapse may be treated as the purchase of a new
policy.
TAX TREATMENT OF LIVING BENEFIT PROCEEDS
Amounts received under an insurance policy on the life of an individual
who is terminally ill, as defined by the tax law, are generally excludable from
the payee's gross income. We believe that the benefits provided under our living
benefit rider meet the tax law's definition of terminally ill and can qualify
for this income tax exclusion. This exclusion does not apply to amounts paid to
someone other than the insured person, however, if the payee has an insurable
interest in the insured person's life only because the insured person is a
director, officer or employee of the payee or by reason of the insured person
being financially interested in any trade or business carried on by the payee.
EFFECT OF POLICY ON INTEREST DEDUCTIONS TAKEN BY BUSINESS ENTITIES
Ownership of a policy by a trade or business entity can limit the amount
of any interest on business borrowings that entity otherwise could deduct for
federal income tax purposes, even though such business borrowings may be
unrelated to the policy. To avoid the limit, the insured person must be an
officer, director, employee or 20% owner of the trade or business entity when
coverage on that person commences.
The limit does not generally apply for policies owned by natural persons
(even if those persons are conducting a trade or business as sole
proprietorships), unless a trade or business entity that is not a sole
proprietorship is a direct or indirect beneficiary under the policy. Entities
commonly have such a beneficial interest, for example, in so-called "split
dollar" arrangements. If the trade or business entity has such an interest in a
policy, it will be treated the same as if it owned the policy for purposes of
the limit on deducting interest on unrelated business income.
The limit generally applies only to policies issued after June 8, 1997 in
taxable years ending after such date. However, for this purpose, any material
increase in face amount that you request, or other material change in a policy,
will be treated as the issuance of a new policy.
In cases where the above-discussed limit on deductibility applies, the
non-deductible portion of unrelated interest on business loans is determined by
multiplying the total amount of such interest by a fraction. The numerator of
the fraction is the policy's average account value (excluding amounts we are
holding to secure any policy loans) for the year in question, and the
denominator is the average for the year of the aggregate tax bases of all the
entity's other assets.
Any corporate, trade, or business use of a policy should be carefully
reviewed by your tax adviser with attention to these rules, as well as the other
rules and possible tax law changes that could occur with respect to such
coverage.
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REQUIREMENT THAT WE DIVERSIFY INVESTMENTS
Under Section 817(h) of the Code, the Treasury Department has issued
regulations that implement investment diversification requirements. Failure to
comply with these regulations would disqualify your policy as a life insurance
policy under Section 7702 of the Code. If this were to occur, you would be
subject to federal income tax on any income and gains under the policy and the
death benefit proceeds would lose their income tax-free status. These
consequences would continue for the period of the disqualification and for
subsequent periods. Through the Portfolios, we intend to comply with the
applicable diversification requirements.
ESTATE, GIFT, AND GENERATION-SKIPPING TAXES
If the policy's owner is the insured person, the death benefit will
generally be includable in the owner's estate for purposes of federal estate
tax. If the owner is not the insured person, and the owner dies before the
insured person, the value of the policy would be includable in the owner's
estate. If the owner is neither the insured person nor the beneficiary, the
owner will be considered to have made a gift to the beneficiary of the death
benefit proceeds when they become payable.
In general, a person will not owe estate or gift taxes until gifts made by
such person, plus that person's taxable estate, total at least $650,000 (a
figure that is scheduled to rise at periodic intervals to $1 million by the year
2006). For this purpose, however, certain amounts are excludable, such as gifts
and bequests to the person's spouse or charitable institutions and certain gifts
of $10,000 or less.
As a general rule, if you make a "transfer" to a person two or more
generations younger than you, a generation skipping tax may be payable.
Generation skipping transactions would include, for example, a case where a
grandparent "skips" his or her children and names grandchildren as a policy's
beneficiaries. In that case, the generation-skipping "transfer" would be deemed
to occur when the insurance proceeds are paid. The generation-skipping tax rates
are similar to the maximum estate tax rate in effect at the time. Individuals,
however, are generally allowed an aggregate generation skipping tax exemption of
$1 million.
The particular situation of each policy owner, insured person or
beneficiary will determine how ownership or receipt of policy proceeds will be
treated for purposes of federal estate, gift and generation skipping taxes, as
well as state and local estate, inheritance and other taxes. Because these rules
are complex, you should consult with a qualified tax advisor for specific
information, especially where benefits are passing to younger generations.
PENSION AND PROFIT-SHARING PLANS
There are special limits on the amount of insurance that may be purchased
by a trust or other entity that forms part of a pension or profit-sharing plan
qualified under Section 401(a) or 403 of the Code. In addition, the federal
income tax consequences will be different from those described in this
prospectus. These rules are complex, and you should consult a qualified tax
advisor.
OTHER EMPLOYEE BENEFIT PROGRAMS
Complex rules may also apply when a policy is held by an employer or a
trust, or acquired by an employee, in connection with the provision of other
employee benefits. These policy owners must consider whether the policy was
applied for by or issued to a person having an insurable interest under
applicable state law and with the insured person's consent. The lack of an
insurable interest or consent may, among other
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things, affect the qualification of the policy as life insurance for federal
income tax purposes and the right of the beneficiary to receive a death benefit.
ERISA
Employers and employer-created trusts may be subject to reporting,
disclosure and fiduciary obligations under the Employee Retirement Income
Security Act of 1974. You should consult a qualified legal advisor.
OUR TAXES
The operations of our Separate Account VLI are reported in our federal
income tax return. The separate account's investment income and capital gains,
however, are, for tax purposes, reflected in our variable life insurance policy
reserves. Therefore, we currently pay no taxes on such income and gains and
impose no charge for such taxes. We reserve the right to impose a charge in the
future for taxes incurred; for example, a charge to the separate account for
income taxes incurred by us that are allocable to the policies.
We may have to pay state, local or other taxes (in addition to applicable
taxes based on premiums). At present, these taxes are not substantial. If they
increase, charges may be made for such taxes when they are attributable to our
separate account or allocable to the policies.
WHEN WE WITHHOLD TAXES FROM POLICY PROCEEDS
Generally, unless you provide us with an election to the contrary prior to
the distribution, we are required to withhold income tax from any proceeds we
distribute as part of a taxable transaction under your policy. If you do not
wish us to withhold tax from the payment, or if we do not withhold enough, you
may have to pay later. In some cases, where generation skipping taxes may apply,
we may also be required to withhold for such taxes unless we are provided
notification that no such taxes are due. Withholding may apply to state, as well
as federal income taxes. Special withholding rules apply if you are not a U.S.
resident or not a U.S. citizen.
POSSIBILITY OF FUTURE TAX CHANGES
The U.S. Congress frequently considers legislation that, if enacted, could
change the tax treatment of life insurance policies. In addition, the Treasury
Department may amend existing regulations, issue regulations on the
qualification of life insurance and modified endowment contracts, or adopt new
interpretations of existing law. State and local tax law or, if you are not a
U.S. citizen and resident, foreign tax law, may also affect the tax consequences
to you, the insured person or your beneficiary, and are subject to change. Any
changes in federal, state, local or foreign tax law or interpretations could
have a retroactive effect. We suggest you consult a qualified tax advisor.
The Treasury Department has stated that it anticipated the issuance of
guidelines prescribing the circumstances in which your ability to direct your
investment to particular Portfolios within a separate account may cause you,
rather than the insurance company, to be treated as the owner of the Portfolio
shares attributable to your policy. In that case, income and gains attributable
to such Portfolio shares would be included in your gross income for federal
income tax purposes. Under current law, however, we believe that Equitable of
Colorado, and not the owner of a policy, would be considered the owner of the
Portfolio shares.
MORE INFORMATION ABOUT PROCEDURES THAT APPLY TO YOUR POLICY
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This section provides further detail about certain subjects that are
addressed in pages __ above. The following discussion generally does not repeat
the information already contained in those pages.
ALTERNATIVE WAYS TO MAKE PREMIUM AND LOAN PAYMENTS
We prefer that you make each payment to us with a single check drawn on
your business or personal bank account. We also will accept a single money
order, bank draft or cashier's check payable directly to Equitable of Colorado,
although we must report such "cash equivalent" payments to the Internal Revenue
Service under certain circumstances. Cash and travelers' checks are not
acceptable. We will accept third party checks payable to someone other than
Equitable of Colorado and endorsed over to Equitable of Colorado only (1) as a
direct payment from a qualified retirement plan or (2) if it is made out to a
trustee who owns the policy and endorses the entire check (without any refund)
as a payment to the policy.
REQUIREMENTS FOR SURRENDER REQUESTS
Your surrender request must include the policy number, your name, the name
of the insured person, and the address where proceeds should be mailed. The
request must be signed by you, as the owner, and by any joint owner, collateral
assignee or irrevocable beneficiary. If you do not want income tax withheld from
the proceeds, you must also include a completed withholding authorization
(I.R.S. Form W-9).
Finally, in order for your surrender request to be complete, you must
return your policy to us.
PROCEEDS PAYMENT OPTIONS
The payee for death benefit or other policy proceeds may name a successor
to receive any amounts that we still owe following the payee's death. Otherwise,
we will pay any such amounts to the payee's estate.
We must approve any payment arrangements that involve more than one
payment option, or a payee who is not a natural person (for example, a
corporation), or a payee who is a fiduciary. Also, the details of all payment
arrangements will be subject to our rules at the time the arrangements are
selected and take effect. This includes rules on the minimum amount we will pay
under an option, minimum amounts for installment payments, withdrawal or
commutation rights (your rights to receive payments over time, for which we may
offer a lump sum payment), the naming of payees, and the methods for proving the
payee's age and continued survival.
ASSIGNING YOUR POLICY
You may assign (transfer) your rights in a policy to someone else as
collateral for a loan or for some other reason, if we agree. A copy of the
assignment must be forwarded to our Administrative Office. We are not
responsible for any payment we make or any action we take before we receive
notice of the assignment or for the validity of the assignment. An absolute
assignment is a change of ownership.
Certain transfers for value may subject you to income tax and penalties
and cause the death benefit to lose its income-tax free treatment. Further, a
gift of a policy that has a loan outstanding may be treated as part gift and
part transfer for value, which could result in both gift tax and income tax
consequences. You should consult your tax advisor prior to making a transfer or
other assignment.
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PAYMENTS UNDER OUR LIVING BENEFIT RIDER
The living benefit rider is discussed on page __ above. We will deduct the
amount of any living benefit we have paid, plus interest, from the death benefit
proceeds that become payable under the policy if and when the insured person
dies. (For this purpose, we charge an adjustable rate of interest equal to the
greater of: (i) the yield on a 90-day Treasury bill and (ii) the maximum
adjustable policy loan interest rate permitted under applicable state law.)
Also, when we pay a living benefit we automatically transfer a [pro-rata]
portion of your policy's net cash surrender value to the policy's guaranteed
interest option. This amount, [together with the interest you earn thereon,]
will be "restricted" - that is, it will not be available for any loans,
transfers or partial withdrawals that you may wish to make. In addition, we will
deduct these restricted amounts from any subsequent surrender or maturity
proceeds that we pay.
DATES AND PRICES AT WHICH POLICY EVENTS OCCUR
We describe below the general rules for when, and at what prices, events
under your policy will occur. Other portions of this prospectus describe
circumstances that give rise to exceptions. We generally do not repeat such
exceptions below.
Date of receipt. Where this prospectus refers to the day when we receive a
payment, request, election, or notice from you, we usually mean the day on which
that item (or the last thing necessary for us to process that item) arrives in
complete and proper form at our Administrative Office or via the appropriate
telephone or fax number if the item is a type we accept by those means. There
are two main exceptions: if the item arrives (1) on a day that is not a business
day or (2) after the close of a business day, then, in each case, we are deemed
to have received that item on the next business day.
Business days. Every day that the New York Stock Exchange is open for
regular trading is a business day for us. Each business day ends at the time
regular trading on the exchange closes (or is suspended) for the day. We compute
unit values for our variable investment options as of the end of each business
day. This usually is 4:00 p.m., Eastern Time.
Payments you make. The following are reflected in your policy as of the
date we receive them:
o premium payments received after the policy's investment start date
(discussed below)
o loan repayments and interest payments
Requests you make. The following transactions occur as of the date we
receive your request:
o withdrawals o tax withholding elections
o face amount decreases that result o changes of allocation percentages
from a withdrawal for premium payments or monthly
o surrenders deductions
o transfers from a variable o changes of beneficiary
investment option o changes in form of death benefit
payment
o loans
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The following transactions occur on your policy's next monthly anniversary
that coincides with or follows the date we approve your request:
o changes in face amount o changes of insured person
o changes in death benefit option o restoration of lapsed policies
Automatic transfer service. Transfers pursuant to our automatic transfer
service occur as of the first day of each month of your policy. We make the
first such transfer, as of your policy's first monthly anniversary that
coincides with or follows the date we receive your request. If you request the
automatic transfer service in your original policy application, however, the
first transfer will occur as of the first day of the second month of your policy
that begins after your policy's initial Allocation date.
Asset rebalancing service. We will effect one-time asset rebalancing
requests, and the initial transaction of a periodic rebalancing program, as of
the later of the date we receive the request and your initial Allocation Date.
Subsequent periodic rebalancings occur on each monthly, quarterly, annual or
semi-annual anniversary of your policy, as you have requested.
Delay in certain cases. We may delay allocating any payment you make to
our variable investment options, or any transfer, for the same reasons stated in
"Delay of variable investment option proceeds" on page __ below. We may also
delay such transactions for any other legally permitted purpose.
Prices applicable to policy transactions. If a transaction will increase
or decrease the amount you have in a variable investment option as of a certain
date, we process the transaction using the unit values for that option computed
as of that day's close of business, unless that day is not a business day. In
that case, we use unit values computed as of the next business day's close.
Effect of death or surrender. You may not make any surrender or partial
withdrawal request after the insured person has died. Also, all insurance
coverage ends at the time as of which we process any request for a surrender.
POLICY ISSUANCE
Register date. When we issue a policy, we assign it a "register date,"
which will be noted on page __ of the policy. We measure the months, years, and
anniversaries of your policy from your policy's register date.
o If you submit the full minimum initial premium to your Equitable of
Colorado associate at the time you sign the application, and we issue
the policy as it was applied for, then the register date will be the
later of (a) the date you signed part I of the policy application or
(b) the date a medical professional signed part II of the policy
application.
o If we do not receive your full minimum initial premium at our
Administrative Office before the issue date or, if we issue the policy
on a different basis than you applied for, the register date will be
the same as the date we actually issue the policy (the "issue date").
Policies that would otherwise receive a register date of the 29th, 30th or 31st
of any month will receive a register date of the 28th of that month.
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We may also permit an earlier than customary register date (a) for
employer-sponsored cases, to accommodate a common register date for all
employees or (b) to provide a younger age at issue. (A younger age at issue
reduces the charges that we deduct under a policy.) The charges and deductions
commence as of the register date, even when we have permitted an early register
date. We may also permit policyowners to delay a register date (up to three
months) in employer-sponsored cases.
Investment start date. This is the date your investment first begins to
earn a return for you in our Alliance Money Market option (prior to the
Allocation Date). Generally, this is the register date, or, if later, the date
we receive your full minimum initial premium at our Administrative Office.
Commencement of insurance coverage. You must have given the full minimum
initial premium to your Equitable of Colorado associate on or before the day the
policy is delivered to you. No insurance under your policy will take effect
unless (1) the insured person is still living at the time such payment and
delivery are completed and (2) unless the information in the application
continues to be true and complete, without material change, as of the time of
such payment. If you have submitted the full minimum initial premium with your
application, we may, subject to certain conditions, provide a limited amount of
temporary insurance on the proposed insured person. You may review a copy of our
temporary insurance agreement, on request, for more information about the terms
and conditions of that coverage.
Non-issuance. If, after considering your application, we decide not to
issue a policy, we will refund any premium you have paid, without interest.
Age; age at issue. Unless the context in this prospectus requires
otherwise, we consider the insured person's "age" on any date to be his or her
age at the beginning of the policy year that includes that date. The insured
person's age at the beginning of the first policy year ("age at issue") is that
person's age on whichever birthday (i.e., before or after) is closer to the
policy's register date.
GENDER-NEUTRAL POLICIES
Congress and various states have from time to time considered legislation
that would require insurance rates to be the same for males and females. In
addition, employers and employee organizations should consider, in consultation
with counsel, the impact of Title VII of the Civil Rights Act of 1964 on the
purchase of IL Protector in connection with an employment-related insurance or
benefit plan. In a 1983 decision, the United States Supreme Court held that,
under Title VII, optional annuity benefits under a deferred compensation plan
could not vary on the basis of sex.
There will be no distinctions based on sex in the cost of insurance rates
for IL Protector policies sold in Montana. We will also make such gender-neutral
policies available on request in connection with certain employee benefit plans.
Cost of insurance rates applicable to a gender-neutral policy will not be
greater than the comparable male rates under a gender specific IL Protector
policy.
MORE INFORMATION ABOUT OTHER MATTERS
YOUR VOTING PRIVILEGES
Voting of Portfolio shares. As the legal owner of any Portfolio shares
that support a variable investment option, we will attend (and have the right to
vote at) any meeting of shareholders of the Portfolio (or the Trust of which
that Portfolio is a part). To satisfy currently-applicable legal requirements,
however, we will give you the opportunity to tell us how to vote the number of
each Portfolio's shares that are
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attributable to your policy. We will vote shares attributable to policies for
which we receive no instructions in the same proportion as the instructions we
do receive from all policies that participate in our Separate Account VLI
(discussed below). With respect to any Portfolio shares that we are entitled to
vote directly (because we do not hold them in a separate account or because they
are not attributable to policies), we will vote in proportion to the
instructions we have received from all holders of variable annuity and variable
life insurance policies who are using that Portfolio.
Under current legal requirements, we may disregard the voting instructions
we receive from policy owners only in certain narrow circumstances prescribed by
SEC regulations. If we do, we will advise you of the reasons in the next annual
or semi-annual report we send to you.
Voting as policy owner. In addition to being able to instruct voting of
Portfolio shares as discussed above, owners that use our variable investment
options may in a few instances be called upon to vote on matters that are not
the subject of a shareholder vote being taken by any Portfolio. If so, you will
have one vote for each $100 of account value in any such option; and we will
vote our interest in Separate Account VLI in the same proportion as the
instructions we receive from holders of IL Protector and other policies that
Separate Account VLI supports.
HOW WE SUPPORT THE POLICIES' INVESTMENT OPTIONS
Our Separate Account VLI. Each variable investment option is a part (or
"subaccount") of our Separate Account VLI. We established Separate Account VLI
under provisions of the Colorado Insurance Law that prevent creditors from any
other business we conduct from reaching the assets we hold in our variable
investment options for owners of our variable life insurance policies. Policy
owners do not, however, have any similar preferred claim on any amounts we have
in Separate Account VLI that exceed our reserves and other liabilities with
respect to variable investment options under our policies. Furthermore, we are
the legal owner of all of the assets in Separate Account VLI.
We established our Separate Account VLI under Colorado Law in June 1996.
Separate Account VLI is registered under the Investment Company Act of 1940 and
is classified by that act as a "unit investment trust." The SEC, however, does
not manage or supervise Equitable of Colorado or Separate Account VLI.
Each subaccount (variable investment option) within Separate Account VLI
invests solely in one class of shares issued by the corresponding Portfolio. For
Portfolios that are part of The Hudson River Trust, these are class IA shares;
and for Portfolios that are part of EQ Advisors Trust, these are class IB
shares. Separate Account VLI immediately reinvests all dividends and other
distributions it receives from a Portfolio in additional shares of that
Portfolio.
The EQ Advisors Trust and The Hudson River Trust sell its shares to
Equitable of Colorado's separate accounts in connection with Equitable of
Colorado's variable life insurance and annuity products, as well as to separate
accounts of Equitable Life. The Hudson River Trust also sells its shares to
insurance companies unaffiliated with Equitable of Colorado. We currently do not
foresee any disadvantages to our policy owners arising out of this. However, the
Board of Trustees of The Hudson River Trust intends to monitor events to
identify any material irreconcilable conflicts that may arise and to determine
what action, if any, should be taken in response. If we believe that the Board's
response insufficiently protects our policy owners, we will see to it that
appropriate action is taken to do so. Also, if we ever believe that any of the
Trusts' Portfolios is so large as to materially impair the investment
performance of the Portfolio the Trust involved, we will examine other
investment alternatives.
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Our general account. Our general account assets support all of our
obligations, (including those under the IL Protector policies and, more
specifically, the guaranteed interest option). Our general assets consist of all
of our assets as to which no class or classes of our annuity or life insurance
policies have any preferential claim. You will not share in the investment
experience of our general account assets, however; and we have full discretion
about how we invest those assets (subject only to any requirements of law).
Because of applicable exemptions and exclusions, we have not registered
interests in the general account under the Securities Act of 1933 or registered
the general account as an investment company with the SEC. Accordingly, neither
the general account, the guaranteed interest option, nor any interests therein,
are subject to regulation under those acts. The staff of the SEC has not
received the material that we have included in this prospectus for your
information about the general account and the guaranteed interest option. These
disclosures, however, may be subject to generally applicable provisions of the
federal securities law relating to the accuracy and completeness of statements
made in prospectuses.
We declare the rate of interest for each year of your policy at the
beginning of that year, but it will not be less than 4%. We credit and compound
the interest daily at an effective annual rate that equals the declared rate for
the year. The rates we are at any time declaring on outstanding policies may
differ from the rates we are then declaring for newly issued policies.
TRANSFERS OF YOUR ACCOUNT VALUE
Transfers not implemented. When we cannot process part of a transfer
request, we will not process any other part of the request. This could occur,
for example, where the request does not comply with our transfer limitations, or
where you request transfer of an amount greater than that currently allocated to
an investment option.
Similarly, the automatic transfer service will terminate immediately if:
(1) your amount in the Alliance Money Market option is insufficient to cover the
automatic transfer amount; (2) your policy is in a grace period; or (3) we
receive notice of the insured person's death.
TELEPHONE REQUESTS
If you are a properly authorized person, you may make telephone transfers
as described above on page __.
Also, if you are both the owner and the insured person under your policy,
you may call 1-888-855-5100 (toll free) from a touch tone phone to make the
following additional types of requests:
o Policy loans o changes of premium allocation percentages
o changes of address
All telephone requests are automatically tape-recorded and are invalid if
the information given is incomplete or any portion of the request is inaudible.
We have established procedures reasonably designed to confirm that telephone
instructions are genuine. These include: requiring personal identification
information from the caller and providing subsequent written confirmation of the
instructions. If we do not employ reasonable procedures to confirm the
genuineness of telephone instructions, we may be liable for any losses arising
out of any act or omission that constitutes negligence, lack of good faith, or
willful misconduct.
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In light of our procedures, we will not be liable for following telephone
instructions that we reasonably believe to be genuine.
Any telephone transaction request that you make after the close of our
business day (which is usually 4:00 p.m. Eastern Time) will be processed as of
the next business day. During times of extreme market activity, or for other
reasons, you may be unable to contact us to make a telephone request. If this
occurs, you should submit a written transactions request to our Administrative
Office. We reserve the right to discontinue telephone transactions, or modify
the procedures and conditions for such transactions, at any time.
DEDUCTING POLICY CHARGES
Charge for taxes. This charge is the approximate rate of premium taxes or
similar assessments we are required to pay in the applicable state of residence.
If the applicable state or rate changes, we will modify the charge, if
appropriate. You should also let us know if the insured person moves, so we can
consider whether we need to modify the charge. You cannot deduct these amounts
as state or local taxes on your federal income tax return.
Monthly cost of insurance charge. The monthly cost of insurance charge is
determined by multiplying the cost of insurance rate that is then applicable to
your policy by the amount we have at risk under your policy. Our amount at risk
on any date is the difference between (a) the death benefit that would be
payable if the insured person died on that date and (b) the then total account
value under the policy. A greater amount at risk, or a higher cost of insurance
rate, will result in a higher monthly charge.
As a general rule, the cost of insurance rate increases each year that you
own your policy. This happens automatically because of the insured person's
increasing age. On the other hand, for policies that have been outstanding for
more than nine years, we reduce the current monthly insurance charge. The dollar
amount by which we reduce each month's charge is a percentage of the total
amount you then have in our investment options. The percentage reduction begins
at an annual rate of .05% for the policy's tenth year and increases by .05% in
each subsequent year, until it is .65% in the 25th and all subsequent years.
These charge reductions are not guaranteed, however. Because IL Protector was
first offered only in 199_, no such reduction has yet been attained under any
outstanding policy.
Our cost of insurance rates are guaranteed not to exceed those that will
be specified in your policy. For most insured persons at most ages, however, our
current rates are lower than those maximums. Therefore, we have the ability at
any time to raise these rates (including by reducing or eliminating the current
monthly charge reduction that otherwise would begin in the tenth year) up to the
guaranteed maximum.
Our cost of insurance rates will generally be lower (except in Montana and
in connection with certain employee benefit plans) if the insured person is a
female than if a male. They also will generally be lower for non-smokers than
smokers and lower for persons that have other highly favorable health
characteristics, as compared to those that do not. On the other hand, insured
persons who present particular health, occupational or avocational risks may be
charged higher cost of insurance rates and other additional charges as specified
in their policies.
The guaranteed maximum cost of insurance rates for gender neutral IL
Protector policies are based on the Commissioner's 1980 Standard Ordinary SB
Smoker and NB Non-Smoker Mortality Table. For all other policies, the guaranteed
maximum cost of insurance rates are based on the Commissioner's 1980
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Standard Ordinary Male and Female Smoker and Non-Smoker Mortality Tables. In
addition, the current rates also vary depending on the duration of the policy
(i.e., the length of time since the policy was issued).
We offer lower rates for non-tobacco users only if they are at least age
20. You may ask us to review a younger insured person's tobacco habits following
the policy anniversary on which such person is age 20.
Date of monthly deductions. We make the regular monthly deductions as of
the first day of each month of the policy.
Surrender charge. In theory, it could be possible to reduce the amount of
surrender charges by minimizing the amount of premiums you pay in any of the
first 15 years of your policy. We do not recommend this, however, because (1)
your policy would be more likely to lapse, thereby depriving you of insurance
coverage, and (2) you would minimize your possibility of accumulating cash value
on a tax-deferred basis (which is, of course, one of the policy's principal
advantages).
If you increase your face amount above the highest previous face amount
that your policy has ever had, we will establish an additional amount of
surrender charge. (For these purposes, however, we disregard any face amount
changes that we make automatically as a result of any change in your death
benefit option.) To calculate the amount of any additional surrender charge, we
will deem a portion of any premiums you pay at or after the time of the increase
to have been paid for the increase. We do this in the manner prescribed by SEC
regulations for such premium allocations.
Purposes of policy charges. The charges under the policies are designed to
cover, in the aggregate, our direct and indirect costs of selling, administering
and providing benefits under the policies. They are also designed, in the
aggregate, to compensate us for the risks of loss we assume pursuant to the
policies. If, as we expect, the charges that we collect from the policies exceed
our total costs in connection with the policies, we will earn a profit.
Otherwise, we will incur a loss.
The current and maximum rates of certain of our charges have been set with
reference to estimates of the amount of specific types of expenses or risks that
we will incur. In most cases, this prospectus identifies such expenses or risks
in the name of the charge: e.g., the administrative charge, cost of insurance
charge, and mortality and expense risk charge. However, the fact that any charge
bears the name of a particular expense or risk does not mean that the amount we
collect from that charge will never be more than the amount of such expense or
risk, or that we may not also be compensated for such expense or risk out of any
other charges we are permitted to deduct by the terms of the policies.
SUICIDE AND CERTAIN MISSTATEMENTS
If an insured person commits suicide within certain time periods, the
amount of death benefit we pay will be limited as described in the policy. Also,
if an application misstated the age or gender of an insured person, we will
adjust the amount of any death benefit (and certain rider benefits), as
described in the policy (or rider).
WHEN WE PAY POLICY PROCEEDS
General. We will generally pay any death benefit, surrender, withdrawal,
or loan within seven days after we receive the request and any other required
items. In the case of a death benefit, however, if we do not have information
about the desired manner of payment within 60 days after the date we receive
36
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notification of the insured person's death, we will pay the proceeds as a single
sum, normally within seven days thereafter. Similarly, we pay maturity proceeds
within seven days after the maturity date.
Clearance of checks. We reserve the right to defer payment of that portion
of your account value that is attributable to a premium payment made by check
for a reasonable period of time (not to exceed 15 days) to allow the check to
clear the banking system.
Delay of guaranteed interest option proceeds. We also have the right to
defer payment or transfers of amounts out of our guaranteed interest option for
up to six months. If we delay more than 30 days in paying you such amounts, we
will pay interest of at least 3% per year from the date we receive your request.
Delay of variable investment option proceeds. We reserve the right to
defer payment of any death benefit, transfer, loan or other distribution that is
derived from a variable investment option if (a) the New York Stock Exchange is
closed (other than customary weekend and holiday closings) or trading on that
exchange is restricted; (b) the SEC has declared that an emergency exists, as a
result of which disposal of securities is not reasonably practicable or it is
not reasonably practicable to fairly determine the account value; or (c) the law
permits the delay for the protection of owners. If we need to defer calculation
of values for any of the foregoing reasons, all delayed transactions will be
processed at the next values that we do compute.
Delay to challenge coverage. We may challenge the validity of your
insurance policy or any rider based on any material misstatements in an
application you have made to us. We cannot make such challenges, however, beyond
certain time limits set forth in the policy or rider. If the insured person dies
within one of these limits, we may delay payment of any proceeds until we decide
whether to challenge the policy.
CHANGES WE CAN MAKE
In addition to any of the other changes described in this prospectus, we
have the right to modify how we or Separate Account VLI operate. We intend to
comply with applicable law in making any changes and, if necessary, we will seek
policyowner approval. We have the right to:
o combine two or more variable investment options or withdraw assets
relating to IL Protector from one investment option and put them into
another;
o end the registration of, or re-register, Separate Account VLI under
the Investment Company Act of 1940;
o operate Separate Account VLI under the direction of a "committee" or
discharge such a committee at any time;
o restrict or eliminate any voting rights or privileges of policyowners
(or other persons) that affect Separate Account VLI;
o operate Separate Account VLI, or one or more of the variable
investment options, in any other form the law allows. This includes
any form that allows us to make direct investments, in which case we
may charge Separate Account VLI an advisory fee. We may make any legal
investments we wish for Separate Account VLI. In addition, we may
disapprove any change in investment advisers or in investment policy
unless a law or regulation provides differently.
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If we take any action that results in a material change in the underlying
investments of a variable investment option, we will notify you as required by
law. We may, for example, cause the variable investment option to invest in a
mutual fund other than, or in addition to, The Hudson River Trust or EQ Advisors
Trust. If you then wish to transfer the amount you have in that option to
another investment option, you may do so.
We may make any changes in the policy or its riders, require additional
premium payments, or make distributions from the policy to the extent we deem
necessary to ensure that your policy qualifies or continues to qualify as life
insurance for tax purposes. Any such change will apply uniformly to all policies
that are affected. We will give you written notice of such changes. We also may
make other changes in the policies that do not reduce any net cash surrender
value, death benefit, account value, or other accrued rights or benefits.
REPORTS WE WILL SEND YOU
Shortly after the end of each year of your policy, we will send you a
report that includes information about your policy's current death benefit,
account value, cash surrender value (i.e., account value minus any current
surrender charge), policy loans, and amounts of charges deducted. We will send
you individual notices to confirm premium payments (except premiums paid through
an automated arrangement), transfers and certain other policy transactions.
ILLUSTRATIONS OF POLICY BENEFITS
In order to help you understand how your policy values would vary over
time under different sets of assumptions, we will provide you with certain
illustrations upon request. These will be based on the age and insurance risk
characteristics of the insured person under your policy and such factors as the
face amount, death benefit option, premium payment amounts, and rates of return
(within limits) that you request. You can request such illustrations at any
time. We have filed an example of such an illustration as an exhibit to the
registration statement referred to below.
SEC REGISTRATION STATEMENT
We have on file with the SEC a registration statement under the Securities
Act of 1933 that relates to the IL Protector policies. The registration
statement contains additional information that is not required to be included in
this prospectus. You may obtain this information, for a fee, from the SEC's
Public Reference Section at 450 5th Street, N.W., Washington, D.C. 20549 or,
without charge, from the SEC's web-site (www.sec.gov).
HOW WE MARKET THE POLICIES
We offer variable life insurance policies (including IL Protector) and
variable annuity contracts through EQ Financial Consultants, Inc. ("EQF"). The
Investment Company Act of 1940, therefore, classifies EQF as the "principal
underwriter" of those policies and contracts. EQF also serves as manager and a
principal underwriter of EQ Advisors Trust and as the principal underwriter of
The Hudson River Trust. EQF is a wholly-owned subsidiary of Equitable Life and
an affiliate of Equitable of Colorado, with its address at 1290 Avenue of the
Americas, New York, NY 10104. EQF is registered with the SEC as a broker-dealer
and is a member of the National Association of Securities Dealers, Inc.
Equitable of Colorado will pay EQF a fee for its services as principal
underwriter of the policies.
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We sell IL Protector through licensed insurance agents who are also
registered representatives of EQF. The agent who sells you this policy receives
sales commission from Equitable of Colorado. The commissions don't cost you
anything above the charges and expenses already discussed elsewhere in this
prospectus. Generally, the agents will receive maximum commissions of 50% of the
amount of the target premium you pay in your policy's first year, plus 6% of the
amount of the target premium you pay in the second through the tenth years, plus
3% of all other premiums you pay in any year. We pay comparable commissions on
the amount of premiums you pay that we deem attributable to any face amount
increase that you request. The agent may be required to return to us any
commissions on premiums that we have refunded to a policy owner.
We also sell the policies through licensed independent insurance brokers.
They will also be registered representatives either of EQF or of another SEC
registered broker-dealer. The commissions for independent brokers will be no
more than those for agents. The commissions will be paid through the registered
broker-dealer and will be subject to our above-noted return policy if premiums
are refunded.
INSURANCE REGULATION THAT APPLIES TO EQUITABLE OF COLORADO
We are regulated and supervised by the Division of Insurance of the State
of Colorado. In addition, we are subject to the insurance laws and regulations
in every state where we sell policies. We submit annual reports on our
operations and finances to insurance officials in all of these states. The
officials are responsible for reviewing our reports to see that we are
financially sound. Such regulation, however, does not guarantee or provide
absolute assurance of our soundness.
YEAR 2000 PROGRESS
[Copy to come based on Form 10-K disclosure that Equitable will provide.]
DIRECTORS AND PRINCIPAL OFFICERS
Set forth below is information about our directors and principal officers.
Unless otherwise noted, their address is 1290 Avenue of the Americas, New York,
New York 10104.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------
DIRECTORS
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
Michel Beaulieu Director, Equitable of Colorado. Senior Vice President, Equitable Life.
- ------------------------------------------------------------------------------------------------------------------------
Harvey E. Blitz Director, Equitable of Colorado. Senior Vice President, Equitable Life;
prior thereto, Senior Vice President and Deputy Chief Financial Officer,
Equitable Life. Senior Vice President, Equitable Companies. Vice President
and Chief Financial Officer since March 1997, EQ ADVISORS TRUST. Chairman,
Frontier Trust Company ("Frontier"). Executive Vice President since November
1996 and Director, EQ Financial Consultants, Inc. ("EQF"). Director until May
1997, Equitable Distributors, Inc. ("EDI") and Director and Officer of
various Equitable of Colorado affiliates. Previously held other officerships
with Equitable Life and its affiliates.
- ------------------------------------------------------------------------------------------------------------------------
OFFICER-DIRECTORS
- ------------------------------------------------------------------------------------------------------------------------
Michael S. Martin Director and Executive Vice President, Equitable of Colorado. Executive Vice
President and Chief Marketing Officer, Equitable Life. Prior thereto, Senior
Vice
</TABLE>
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<TABLE>
<S> <C>
President, Equitable Life. Chairman and Chief Executive Officer, EQF.
Vice President, EQ ADVISORS TRUST (since March 1997) and THE HUDSON RIVER
TRUST (until March 1998). Director, Equitable Underwriting and Sales Agency
(Bahamas), Ltd. (since May 1996) and EquiSource. Previously held other
officerships with Equitable Life and its affiliates.
- ------------------------------------------------------------------------------------------------------------------------
Samuel B. Shlesinger Chairman of the Board, President and Chief Executive Officer, Equitable of
Colorado. Senior Vice President, Equitable Life.
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
OTHER PRINCIPAL OFFICERS
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
Kevin R. Byrne Senior Vice President and Treasurer, Equitable of Colorado, Equitable Life
and Equitable Companies. Treasurer, EquiSource, Frontier Trust Company and
Equitable Investment Corporation. President and Chief Executive Officer,
Equitable Casualty Insurance Company ("Casualty"). Vice President and
Treasurer, EQ ADVISORS TRUST (since March 1997). Holds various other
officerships and directorships with other Equitable of Colorado affiliates.
- ------------------------------------------------------------------------------------------------------------------------
Alvin H. Fenichel Senior Vice President and Chief Financial Officer, Equitable of Colorado.
Senior Vice President and Controller, Equitable Life and Equitable Companies.
Previously held other officerships with Equitable Life and its affiliates.
- ------------------------------------------------------------------------------------------------------------------------
Linda J. Galasso Vice President and Secretary, Equitable of Colorado. Vice President and
Secretary, Equitable Life. Assistant Secretary, Equitable Companies, EQF and
other Equitable of Colorado affiliates.
- ------------------------------------------------------------------------------------------------------------------------
Mark A. Hug Senior Vice President, Equitable of Colorado. Senior Vice President since
April 1997, Equitable Life. Prior thereto, Vice President, Aetna.
- ------------------------------------------------------------------------------------------------------------------------
Charles Marino Vice President and Actuary, Equitable of Colorado. Vice President and Senior
Actuary (since Sept. 1998), and Vice President and Actuary (Feb. 1996 to
Sept. 1998), Equitable Life. Prior thereto, Assistant Vice President and
Actuary, Equitable Life.
- ------------------------------------------------------------------------------------------------------------------------
John P. Natoli Vice President and Chief Underwriting Officer, Equitable of Colorado. Vice
President and Chief Underwriter, Equitable Life.
- ------------------------------------------------------------------------------------------------------------------------
Mildred M. Oliver Vice President, Equitable of Colorado. Vice President, Equitable Life.
- ------------------------------------------------------------------------------------------------------------------------
Michael J. Remus Vice President and Chief Administrative Officer, Equitable of Colorado. Vice
3001 Westown Parkway President and Chief Administrative Officer, Equitable Life.
West Des Moines, IA 50266
- ------------------------------------------------------------------------------------------------------------------------
Allen Zabusky Vice President and Controller, Equitable of Colorado. Vice President and
135 West 50th Street Deputy Controller, Equitable Life. Vice President and Controller, EQ
New York, New York 10020 ADVISORS TRUST.
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
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FINANCIAL STATEMENTS
The financial statements of Equitable of Colorado included in this
prospectus have been audited for the years ended December 31, 1998, 1997 and
1996 by PricewaterhouseCoopers LLP, independent accountants, as stated in their
reports. These financial statements have been so included in reliance on the
reports of PricewaterhouseCoopers, given on the authority of such firm as
experts in accounting and auditing. The financial statements of Equitable of
Colorado have relevance for the policies only to the extent that they bear upon
the ability of Equitable of Colorado to meet its obligations under the policies.
There are no financial statements for Separate Account VLI as the policies are
being offered for the first time in 1999.
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[Financial Statements to be filed by amendment]
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APPENDIX I: INVESTMENT PERFORMANCE RECORD
The tables below show performance information for the variable investment
options. The performance shown for each option equals the performance of the
Portfolio corresponding to that option, reduced by the rate of the policies'
mortality and expense risk charge (.80% annual rate). You can find more
information about the performance of the Portfolios under the heading
"__________" in the Trust prospectuses attached at the end of this prospectus.
The performance figures on which the tables are based is after deduction of all
fees and expenses paid by the Trusts or any of the Portfolios.
The tables below, however, do not take into account the following
additional changes that we will deduct under your policy: (1) the 6% sales
charge and the tax charge that we deduct from each premium payment you make; (2)
the monthly cost of insurance charge; (3) the monthly administrative charge
(currently $25 for your policy's first 12 months and $6 per month thereafter);
(4) the surrender charge; or (5) any charge for optional rider benefits you may
select. For more information about these charges, see "Charges and Expenses You
Will Pay" beginning on page __ of this prospectus. If we reflected these
charges, the performance shown below would be reduced. We have not done so,
however, because the actual impact of these charges on a particular policy
varies considerably based on such factors as the insurance risk characteristics
of the insured person; the face amount and other options you select for your
policy; the state of policy issuance; the amount and timing of your premium
payments; and whether you make transfers or withdrawals, take policy loans, or
surrender your policy. In order to better understand how the charges we have
omitted from the below tables will affect your policy's value, you should refer
to your Illustrations of Policy Benefits that your Equitable of Colorado
associate will provide. You can request Equitable of Colorado or your Equitable
of Colorado associate to provide you with such illustrations at any time,
whether before or after you purchase a policy.
<TABLE>
<CAPTION>
AVERAGE ANNUAL RATE OF RETURN FOR PERIODS ENDING
DECEMBER 31, 1998
<S> <C> <C> <C> <C> <C> <C>
SINCE PORTFOLIO
VARIABLE INVESTMENT OPTION 1 YR. 3 YRS. 5 YRS. 10 YRS. 20 YRS. INCEPTION (DATE*)
FIXED INCOME OPTIONS
Alliance Money Market x.x% x.x% x.x% x.x% -- x.x%
Alliance Intermediate Gov't
Securities
Alliance Quality Bond
Alliance High Yield
EQUITY OPTIONS
T. Rowe Price Equity Income
EQ/Putnam Growth & Income
Value
Alliance Growth & Income
Alliance Equity Index
Merrill Lynch Basic Value
Equity
Alliance Common Stock
MFS Research
Alliance Global
Alliance International
T. Rowe Price International
Stock
Morgan Stanley Emerging
Markets Equity
Alliance Aggressive Stock
Warburg Pincus Small
</TABLE>
43
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Company Value
Alliance Small Cap Growth
MFS Emerging Growth
Companies
ASSET ALLOCATION OPTIONS
Alliance Conservative
Investors
EQ/Putnam Balanced
Alliance Balanced
Alliance Growth Investors
Merrill Lynch World Strategy
</TABLE>
- ---------------------------------------------------------------------------
* The inception date shown is the date that the relevant Portfolio (or its
predecessor) received its initial funding.
In some cases, the return information shown above includes a period of
time prior to when Separate Account VLI first offered a corresponding variable
investment option under any form of variable life insurance policy. Therefore,
the below table provides additional performance information from the date that
those investment options actually received initial funding.
<TABLE>
<CAPTION>
AVERAGE ANNUAL RATES OF RETURN FOR
VARIABLE INVESTMENT OPTION PERIODS ENDING DECEMBER 31, 1998
-------------------------- ---------------------------------
Since Variable Investment Option Inception (Date)
<S> <C>
Alliance Money Market x.x% (__/__/__)
Alliance Common Stock
</TABLE>
Unlike the rate of return tables above, the following yield information
does not include capital gains and losses that the Portfolios corresponding to
the indicated variable investment options may have experienced.
<TABLE>
<CAPTION>
ANNUALIZED YIELD FOR PERIODS
VARIABLE INVESTMENT OPTION ENDING DECEMBER 31, 1998
-------------------------- ----------------------------
<S> <C> <C>
7 DAYS 30 DAYS
------ -------
Alliance Money Market __% --
Alliance Intermediate Government Securities
Alliance Quality Bond
Alliance High Yield
</TABLE>
The information in the tables above is not a guarantee, a prediction, or
necessarily an indication of future performance.
44
<PAGE>
APPENDIX II: OUR DATA ON MARKET PERFORMANCE
In reports or other communications to policy owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options, and the Portfolios and may compare the performance
or ranking of those options and the Portfolios with:
o those of other insurance company separate accounts or mutual funds
included in the rankings prepared by Lipper Analytical Services, Inc.,
Morningstar, Inc. or similar investment services that monitor the
performance of insurance company separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for
peer universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective policyowners advertisements
or other communications that include evaluations of a variable investment option
or Portfolio by nationally recognized financial publications. Examples of such
publications are:
Barron's Money Management Letter
Morningstar's Variable Annuities/Life Investment Dealers Digest
Business Week National Underwriter
Forbes Pension & Investments
Fortune USA Today
Institutional Investor Investor's Daily
Money The New York Times
Kiplinger's Personal Finance The Wall Street Journal
Financial Planning The Los Angeles Times
Investment Adviser The Chicago Tribune
Investment Management Weekly
Lipper Analytical Services, Inc. (Lipper) compiles performance data for
peer universes of Portfolios with similar investment objectives in its Lipper
Variable Insurance Products Performance Analysis Service (Lipper Survey).
Morningstar, Inc. compiles similar data in the Morningstar Variable Annuity/Life
Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800
mutual funds underlying variable annuity and life insurance products. It divides
these actively managed portfolios into 25 categories by portfolio objectives.
The Lipper Survey contains two different universes, which reflect different
types of fees in performance data:
o The "Separate Account" universe reports performance data net of
investment management fees, direct operating expenses and asset-based
charges applicable under variable insurance and annuity contracts; and
o The "Mutual Fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects
only charges that relate to the underlying mutual fund.
The Morningstar Report consists of nearly 700 variable life and annuity
portfolios, all of which report their data net of investment management fees,
direct operating expenses and separate account level charges.
LONG-TERM MARKET TRENDS
The following chart presents historical return trends for various types of
securities. The information presented does not directly relate to the
performance of our variable investment options or the Trusts. Nevertheless, it
may help you gain a perspective on the potential returns of different asset
classes over different periods of time. By combining this
45
<PAGE>
information with your knowledge of your own financial needs, you may be able to
better determine how you wish to allocate your IL Protector premiums.
Historically, the investment performance of common stocks over the long
term has generally been superior to that of long- or short-term debt securities.
However, common stocks have also experienced dramatic changes in value over
short periods of time. One of our variable investment options that invests
primarily in common stocks may, therefore, be a desirable selection for owners
who are willing to accept such risks. If, on the other hand, you wish to limit
your short-term risk, you may find it preferable to allocate a smaller
percentage of net premiums to those options that invest primarily in common
stock. All investments in securities, whether equity or debt, involve varying
degrees of risk. They also offer varying degrees of potential reward.
The chart on page ___ illustrates the average annual compound rates of
return over selected time periods between December 31, 1926 and December 31,
1998 for the types of securities indicated in the chart. These rates of return
assume the reinvestment of dividends, capital gains and interest. The Consumer
Price Index is also shown as a measure of inflation for comparison purposes. The
investment return information presented is an historical record of unmanaged
categories of securities. In addition, the rates of return shown do not reflect
either (1) investment management fees and expenses, or (2) costs and charges
associated with ownership of a variable life insurance policy.
The rates of return illustrated do not represent returns of our variable
investment options or the Portfolios and do not constitute a representation that
the performance of those options or the Portfolios will correspond to rates of
return such as those illustrated in the chart.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Average Annual Rates of Return
Long-Term Long-Term U.S.
For the following periods ending Common Government Corporate Intermediate-Term Treasury Consumer
December 31, 1998 Stocks Bonds Bonds Gov't Bonds Bills Price Index
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 Year
3 Years
5 years
10 years
20 years
30 years
40 years
50 years
60 years
Since 1926
Inflation Adjusted
Since 1926
</TABLE>
_________________________________________________________________
Source: Ibbotson, Roger G. and Rex A. Sinquefield, STOCKS, BONDS, BILLS, AND
INFLATION (SBBI), 1982, updated in STOCKS, BONDS, BILLS, AND INFLATION 1998
YEARBOOK, (TM) Ibbotson Associates, Inc., Chicago. All rights reserved.
Common Stocks (S&P 500) - Standard and Poor's Composite Index, an unmanaged
weighted index of the stock performance of 500 industrial, transportation,
utility and financial companies.
Long-Term Government Bonds - Measured using a one-bond portfolio constructed
each year containing a bond with approximately a twenty-year maturity and a
reasonably current coupon.
46
<PAGE>
Long-Term Corporate Bonds - For the period 1969-1997, represented by the Salomon
Brothers Long-Term, High-Grade Corporate Bond Index; for the period 1946-1968,
the Salomon Brothers' Index was backdated using Salomon Brothers' monthly yield
data and a methodology similar to that used by Salomon for 1969-1997; for the
period 1926-1945, the Standard and Poor's monthly High-Grade Corporate Composite
yield data were used, assuming a 4 percent coupon and a twenty-year maturity.
Intermediate-Term Government Bonds - Measured by a one-bond portfolio
constructed each year containing a bond with approximately a five-year maturity.
U.S. Treasury Bills - Measured by rolling over each month a one-bill portfolio
containing, at the beginning of each month, the bill having the shortest
maturity not less than one month.
Consumer Price Index - Measured by the Consumer Price Index for all Urban
Consumers (CPI-U), not seasonally adjusted.
47
<PAGE>
APPENDIX III: AN INDEX OF KEY WORDS AND PHRASES
This index should help you locate more information on the terms used in this
prospectus.
<TABLE>
<CAPTION>
<S> <C> <C>
PAGE TO SEE IN PAGE TO SEE IN
THIS PROSPECTUS THIS PROSPECTUS
--------------- ---------------
account value monthly processing day
Administrative Office net cash surrender value
age no-lapse guarantee
Allocation Date no-lapse guarantee premium
alternative death benefit option A, B
amount at risk our
anniversary owner
assign; assignment partial withdrawal
automatic transfer service payment option
basis planned periodic premium
beneficiary policy
business day Portfolio
Code premium payments
Collateral prospectus
cost of insurance rates receive
Day restore, restoration
EQ Advisers Trust rider
Equitable of Colorado SEC
Access Account Separate Account VLI
face amount state
grace period subaccount
Guaranteed interest option surrender
Hudson River Trust surrender charge
IL Protector target premium
insured person telephone transfers
Investment option transfers
issue date Trust(s)
Lapse units
loan, loan interest unit values
matures, maturity, maturity date us
Modified endowment contract variable investment option
month, year we
monthly deduction withdrawal
monthly insurance charge you, your
</TABLE>
107190v1
48
<PAGE>
Part II
REPRESENTATION REGARDING REASONABLENESS OF
AGGREGATE POLICY FEES AND CHARGES
The Equitable of Colorado, Inc. ("EOC") represents that the fees and
charges deducted under the Policies described in this Registration Statement, in
the aggregate, are reasonable in relation to the services rendered, the expenses
to be incurred, and the risks assumed by EOC under the Policies. EOC bases its
representation on its assessment of all of the facts and circumstances,
including such relevant factors as: the nature and extent of such services,
expenses and risks, the need for EOC to earn a profit, the degree to which the
Policies include innovative features, and regulatory standards for the grant of
exemptive relief under the Investment Company Act of 1940 used prior to October
1996, including the range of industry practice. This representation applies to
all policies sold pursuant to this Registration Statement, including those sold
on the terms specifically described in the prospectus contained herein, or any
variations therein, based on supplements, data pages or riders to any policies
or prospectus, or otherwise.
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
UNDERTAKING PURSUANT TO RULE 484(b)(1) UNDER
THE SECURITIES ACT OF 1933
EOC's By-Laws provide, in Article VII, as follows:
7.1 Indemnification of Directors, Officers, Employees and Incorporators. To
the extent permitted by the law of the State of Colorado, and subject to all
applicable requirements thereof:
(a) any person made or threatened to be made a party to any action or
proceeding, whether civil or criminal, by reason of the fact that he, his
testator or intestate, is or was a director, officer, employee or incorporator
of the Company shall be indemnified by the Company;
(b) any person made or threatened to be made a party to any action or
proceeding, whether civil or criminal, by reason of the fact that he, his
testator or intestate serves or served any other organization in any capacity at
the request of the Company may be indemnified by the Company; and
(c) the related expenses of any such person in any of said categories may
be advanced by the Company.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-1
<PAGE>
Part II
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The facing sheet.
Reconciliation and Tie.
The Prospectus dated April 1, 1999 consisting of 48 pages.
Representation regarding reasonableness of aggregate policy fees and charges.
Undertaking to file reports.
Undertaking pursuant to Rule 484(b)(1) under the Securities Act of 1933
The signatures.
Written Consents of the following persons:
Mary P. Breen, Vice President and Associate General Counsel of Equitable Life
Assurance Society of the United States ("Equitable")(see exhibit 2(a))
Independent Public Accountants
The following exhibits: Exhibits required by Article IX, paragraph A of Form
N-8B-2:
<TABLE>
<S> <C> <C>
1-A(1)(a)(i) Certified Resolutions re Authority to Market
Variable Life Insurance and Establish
Separate Accounts, dated December 16, 1996.
1-A(2) Inapplicable.
1-A(3)(a) See Exhibit 1-A(8).
1-A(3)(b) See Exhibit 1-A(8)(i).
1-A(4) Inapplicable.
1-A(5)(a) Flexible Premium Variable Life Insurance
Policy (C099-500) (IL Protector).
+ 1-A(5)(b) Option to Purchase Additional Insurance
Rider (R94-204).
+ 1-A(5)(c) Disability Rider - Waiver of Monthly
Deductions (R94-216).
+ 1-A(5)(d) Term Insurance Rider on Additional Insured
(R90-217).
+ 1-A(5)(e) Children's Term Insurance Rider (R94-218).
+ 1-A(5)(f) Accidental Death Benefit Rider (R94-219).
1-A(5)(g) Accelerated Death Benefit Rider (R94-102).
+ 1-A(5)(h) Cost of Living Rider (R96-101).
+ 1-A(5)(i) Substitution of Insured Rider (R94-212).
1-A(6)(a) Declaration and Charter of The Equitable of
Colorado, Inc. ("EOC"), as amended.
1-A(6)(b) By-Laws of EOC, as amended.
1-A(7) Inapplicable.
- - -------------------------------
+ State variations not included
</TABLE>
II-2
<PAGE>
<TABLE>
<S> <C> <C>
1-A(8) Form of Distribution and Servicing Agreement
among EOC and EQ Financial Consultants, Inc.
("EQFC") authorizing EQFC to distribute all
EOC products in the agency channel.
1-A(8)(i) Schedule of Commissions.
1-A(8)(ii) Form of Distribution Agreement between EOC
and Equitable Distributors, Inc. ("EDI"),
authorizing EDI to distribute all EOC
products in the retail channel.
1-A(8)(iii) Form of Sales Agreement between EQFC and
EOC committing EQFC to provide shares of The
Hudson River Trust ("HRT") for all EOC
separate account products sold in the agency
channel.
1-A(8)(iv) Form of Sales Agreement between EOC and EDI
committing EDI to provide HRT shares for all
EOC separate account products sold in the
retail channel.
1-A(8)(v) Participation Agreement by and among EQ
Advisors Trust ("EQAT"), EDI, EOC and EQFC,
committing EQAT and its distributors, EQFC
and EDI, to provide EQAT and EQFC shares for
all EOC separate account products sold in
the agency channel and the retail channel.
1-A(9) Agreement for Cooperative and Joint Use of
Personnel, Property and Services between
Equitable Life Assurance Society of the
United States and EOC, dated April 16, 1984.
1-A(10) Form of Application.
2(a) Opinion and Consent of Mary P. Breen, Vice
President and Associate General Counsel of
Equitable Life Assurance Society of the
United States (policy form C099-500) (to be
filed by amendment).
3 Inapplicable.
4 Inapplicable.
6 Consent of Independent Public Accountant (to
be filed by amendment).
7(a) Powers-of-Attorney.
8 Description of EOC's Issuance, Transfer and
Redemption Procedures for Flexible Premium
Policies pursuant to Rule
6e-3(T)(b)(12)(iii) under the Investment
Company Act of 1940.
</TABLE>
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has
duly 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 City and State of New York on the 12th day of February,
1999.
[SEAL] SEPARATE ACCOUNT VLI OF THE EQUITABLE OF
COLORADO, INC.
(Registrant)
By: THE EQUITABLE OF COLORADO, INC.,
(Depositor)
By: /s/ Mildred M. Oliver
----------------------
(Mildred M. Oliver)
Vice President
Attest: /s/ Linda Galasso
-----------------
(Linda Galasso)
Secretary
February 12, 1999
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Depositor has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City and State of New York on the
12th day of February, 1999.
THE EQUITABLE OF COLORADO, INC.
(Depositor)
By: /s/Mildred M. Oliver
---------------------
(Mildred M. Oliver)
Vice President
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
date indicated:
PRINCIPAL EXECUTIVE OFFICER:
<TABLE>
<S> <C>
* Samuel B. Shlesinger Chairman of the Board, President and Chief
Executive Officer.
PRINCIPAL FINANCIAL OFFICER:
/s/Alvin H. Fenichel
- --------------------
* Alvin H. Fenichel Senior Vice President and Chief Financial
February 12, 1999 Officer
PRINCIPAL ACCOUNTING OFFICER:
* Allen Zabusky Vice President and Controller
*DIRECTORS:
Michel Beaulieu Michael S. Martin
Harvey E. Blitz Samuel B. Shlesinger
</TABLE>
*By: /s/ Mildred M. Oliver
-----------------------
(Mildred M. Oliver)
Attorney-in-Fact
February 12, 1999
II-5
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
EXHIBIT NO. TAG VALUE
- ---------- ---------
<S> <C> <C>
1-A(1)(a)(i) Certified Resolutions re Authority to Market Variable EX-99.1A1ai
Life Insurance and Establish Separate Accounts.
1-A(5)(a) Flexible Premium Variable Life Insurance Policy (CO99-500) EX-99.1A5a
(IL Protector)
1-A(5)(b) Option to Purchase Additional Insurance Rider (R94-204). EX-99.1A5b
1-A(5)(c) Disability Rider - Waiver of Monthly Deductions (R94-216). EX-99.1A5c
1-A(5)(d) Term Insurance Rider on Additional Insured (R90-217). EX-99.1A5d
1-A(5)(e) Children's Term Insurance Rider (R94-218). EX-99.1A5e
1-A(5)(f) Accidental Death Benefit Rider (R94-219). EX-99.1A5f
1-A(5)(g) Accelerated Death Benefit Rider (R94-102). EX-99.1A5g
1-A(5)(h) Cost of Living Rider (R96-101). EX-99.1A5h
1-A(5)(i) Substitution of Insured Rider (R94-212). EX-99.1a5i
1-A(6)(a) Declaration and Charter of The Equitable of Colorado, Inc., EX-99.1A6a
("EOC"), as amended.
1-A(6)(b) By-Laws of EOC, as amended. EX-99.1A6b
1-A(8) Form of Distribution and Servicing Agreement among EX-99.1A8
EOC and EQ Financial Consultants ("EQFC").
1-A(8)(i) Schedule of Commissions. EX-99.1A8i
1-A(8)(ii) Form of Distribution Agreement between EOC and Equitable EX-99.1A8ii
Distributors, Inc. ("EDI").
1-A(8)(iii) Form of Sales Agreement between EQFC and EOC to provide EX-99.1A8iii
shares of Hudson River Trust ("HRT").
1-A(8)(iv) Form of Sales Agreement between EOC and EDI for sale of EX-99.1A8iv
HRT shares.
1-A(8)(v) Participation Agreement between EQAT, EOC, EDI and EQFC. EX-99.1A8v
1-A(9) Agreement for Cooperative and Joint Use between Equitable EX-99.1A9
Life Assurance Society of the United States and EOC.
1-A(10) Form of Application. EX-99.1A10
7(a) Powers-of-Attorney. EX-99.7a
8 Description of EOC's Issuance, Transfer and Redemption EX-99.8
Procedures for Flexible Premium Policies pursuant to Rule
6e-3(T)(b)(12)(iii) under the Investment Company Act of 1940.
</TABLE>
II-6
[EQUITABLE LOGO]
I, Linda Galasso, Secretary of THE EQUITABLE OF COLORADO, INC., do hereby
certify that attached hereto marked "EXHIBIT A" is a true and correct copy of
Resolution No. EOC7-96 duly adopted by the Board of Directors on December 16,
1996 and that said resolution has not been amended, annulled, rescinded, or
revoked; and is in full force and effect.
[SEAL] IN WITNESS WHEREOF, I have hereunto affixed my
signature and Seal of THE EQUITABLE OF COLORADO,
INC., this 10th day of February 1999.
/s/ Linda Galasso
-----------------------------
Secretary
1901/4
<PAGE>
EXHIBIT "A"
EOC BOARD DECEMBER 16, 1996
AUTHORITY TO MARKET VARIABLE LIFE INSURANCE
AND VARIABLE ANNUITY CONTRACTS AND
ESTABLISH SEPARATE ACCOUNTS
---------------------------
RESOLVED, That upon the recommendation of Chairman, President and Chief
Executive Officer Samuel B. Shlesinger, authority is hereby given to The
Equitable of Colorado, Inc. (the "Company") to engage in the variable life
insurance and annuity business and authorize the establishment of Separate
Accounts to support the Company's variable life insurance policies and annuity
contracts;
FURTHER RESOLVED, That the Chief Investment Officer of the Company, with
power to sub-delegate, is authorized in his discretion as he may deem
appropriate from time to time and in accordance with applicable laws and
regulations (a) to divide the Separate Accounts into one or more divisions or
subdivisions, (b) to modify or eliminate any such division or subdivision, (c)
to change the designation of the Separate Accounts to another designation, (d)
to designate additional divisions or subdivisions thereof and (e) to authorize
and establish any and all additional separate accounts as may be deemed by such
officer to be necessary or desirable for the Company's variable life insurance
and annuity business and having investment policies substantially similar to any
current or future separate account of the Company which has been or may be
specifically approved by this Board;
FURTHER RESOLVED, That the officers of the Company be, and each of them
hereby is, authorized to invest cash in the Separate Accounts or in any division
thereof as may be deemed necessary or appropriate to facilitate the commencement
of the Separate Account's operations or to meet any minimum capital requirements
under the Investment Company Act of 1940 (the "1940 Act") and to transfer cash
or securities from time to time between the Company's general account and any
Separate Account as deemed necessary or appropriate as long as such transfers
are not prohibited by law and are consistent with the terms of the variable life
insurance policies and annuity contracts issued by the Company providing for
allocations to such Separate Account;
FURTHER RESOLVED, That authority is hereby delegated to the Chief Executive
Officer, the President and the Chief Investment Officer, with power to
sub delegate, to adopt Rules and Regulations for Certain Operations of the
Separate Accounts, providing for, among other things, criteria by which the
Company shall institute procedures to provide for a pass-through of voting
rights to the owners of variable life insurance policies and annuity contracts
issued by the Company providing for allocation to any Separate Account with
respect to the shares of any investment companies which are held in such
Separate Account;
<PAGE>
-2-
FURTHER RESOLVED, That the Company may register under the Securities Act of
1933 (the "1933 Act") variable life insurance policies and variable annuity
contracts, or units of interest thereunder, under which amounts will be
allocated by the Company to the Separate Accounts to support reserves for such
policies and, in connection therewith, the officers of the Company be, and each
of them hereby is, authorized, with the assistance of accountants, legal counsel
and other consultants, to prepare, execute and file with the Securities and
Exchange Commission, in the name and on behalf of the Company, registration
statements under the 1933 Act, including prospectuses, supplements, exhibits and
other documents relating thereto, and amendments to the foregoing, in such form
as the officer executing the same may deem necessary or appropriate;
FURTHER RESOLVED, That the officers of the Company are authorized, with the
assistance of accountants, legal counsel and other consultants, to take all
actions necessary to register the Separate Accounts under the 1940 Act and to
take such related actions as they deem necessary and appropriate to carry out
the foregoing;
FURTHER RESOLVED, That the officers of the Company be, and each of them
hereby is, authorized to prepare, execute, and file with the Securities and
Exchange Commission such no-action requests and applications for such exemptions
from or orders under the federal or state securities laws as they may from time
to time deem necessary or desirable;
FURTHER RESOLVED, That the President of the Company is hereby appointed as
agent for service under any registration statement under the 1933 Act or the
1940 Act relating to the Separate Accounts, such person to be duly authorized to
receive communications and notices from the Securities and Exchange Commission
with respect to such registration statement and to exercise powers given to such
agent by the 1933 Act and 1940 Act and the rules and regulations thereunder, and
any other applicable law;
FURTHER RESOLVED, That the officers of the Company be, and each of them
hereby is, authorized to effect, in the name and on behalf of the Company, all
such registrations, filings and qualifications under applicable securities laws
and regulations and under insurance securities laws and insurance laws and
regulations of such states and other jurisdictions as they may deem necessary or
appropriate, with respect to the Company, and with respect to any variable life
insurance policies and variable annuity contracts under which amounts will be
allocated by the Company to the Separate Accounts to support reserves for such
policies and contracts; such authorization to include registration, filing and
qualification of the Company and of said policies and contracts, as well as
registration, filing and qualification of officers,
<PAGE>
-3-
employees and agents of the Company as brokers, dealers, agents, salesmen, or
otherwise; and such authorization shall also include, in connection therewith,
authority to prepare, execute, acknowledge and file all such applications for
exemptions, certificates, affidavits, covenants, consents to service of process
and other instruments and to take all such action as the officer executing the
same or taking such action may deem necessary or desirable;
FURTHER RESOLVED, That the standards of suitability and code of conduct
relating to the doing by the Company of a variable life insurance and annuity
business, in the forms annexed hereto, are hereby approved; and
FURTHER RESOLVED, That the officers of the Company are, and each of them
hereby is, authorized and instructed to take all such acts and prepare and
deliver all such documents in the name and on behalf of the Company, including
all documents required by state licensing authorities to conduct a variable life
insurance and annuity business, as may be necessary or desirable to effectuate
the purposes of the foregoing resolutions.
<PAGE>
CODE OF CONDUCT - VARIABLE LIFE INSURANCE AND ANNUITY CONTRACT
SEPARATE ACCOUNTS
Unless otherwise approved by the New York State Superintendent of Insurance,
with respect to variable life insurance and variable annuity contract separate
accounts, neither the Company nor any of its affiliates nor any director,
officer or employee thereof, shall (i) sell to, or purchase from, any such
separate account established by the Company any securities or other property,
other than variable life insurance policies or variable annuity contracts, as
appropriate; (ii) purchase, or allow to be purchased, for any such separate
account, any securities of which the Company or an affiliate is the issuer;
(iii) accept any compensation, other than a regular salary or wages from the
Company or any affiliate, for the sale or purchase of securities to or from any
such separate account except in the course of acting as a broker in connection
with the sale of securities to or by such separate account if the compensation
for such sale of securities does not exceed (a) the usual and customary broker's
commission if the sale is effected on a securities exchange; or (b) two percent
of the sales price if the sale is effected in connection with a secondary
distribution of such securities; or (c) one percent of the purchase or sale
price of such securities if the sale is otherwise effected, unless the
Securities and Exchange Commission permits a larger commission; (iv) engage in
any joint transaction, participation, or common undertaking whereby the Company
or an affiliate participates with such a separate account in any transaction in
which the Company or any of its affiliates obtains an advantage in the price or
quality of the item purchased, in the service received, or in the cost of such
service and the Company or any of its other affiliates is disadvantaged in any
of these respects by the same transaction; and (v) borrow money or securities
from any such separate account other than under a policy loan provision.
<PAGE>
STANDARDS OF SUITABILITY - VARIABLE LIFE INSURANCE POLICIES
AND ANNUITY CONTRACTS
A recommendation shall be made to a potential applicant to purchase a variable
life insurance policy or variable annuity contract and a variable life insurance
policy or variable annuity contract shall be issued only if the Company has
reasonable grounds to believe that the purchase of such policy or contract is
suitable for such applicant on the basis of information furnished after
reasonable inquiry of such applicant concerning the applicant's insurance and
investment objectives, financial situation and needs, and any other information
known to the Company or to the agent making the recommendation.
INSURED PERSON RICHARD ROE
POLICY OWNER RICHARD ROE
THE EQUITABLE
OF COLORADO, INC.
FACE AMOUNT
OF INSURANCE $50,000 VARIABLE LIFE
INSURANCE
DEATH BENEFIT OPTION A (SEE PAGE 6) POLICY
POLICY NUMBER XX XXX XXX
WE AGREE to pay the Insurance Benefit of this policy and to provide its other
benefits and rights in accordance with its provisions.
FLEXIBLE PREMIUM VARIABLE LIFE POLICY
This is a flexible premium variable life insurance policy. You can, within
limits:
o increase or decrease the Face Amount of Insurance;
o make premium payments at any time and in any amount;
o change the death benefit option;
o change the allocation of net premiums and deductions among your
investment options; and
o transfer amounts among your investment options.
THIS POLICY IS GUARANTEED NOT TO LAPSE DURING THE POLICY YEARS SHOWN ON PAGE 3,
SUBJECT TO PREMIUMS HAVING BEEN PAID IN ACCORDANCE WITH THE NO LAPSE GUARANTEE
PROVISION AS DESCRIBED IN THIS POLICY.
All of these rights and benefits are subject to the terms and conditions of this
policy. All requests for policy changes are subject to our approval and may
require evidence of insurability.
We will put your net premiums into your Policy Account. You may then allocate
them to one or more investment funds of our Separate Account(s) (SA) and to our
Guaranteed Interest Account (GIA).
THE PORTION OF YOUR POLICY ACCOUNT THAT IS IN AN INVESTMENT FUND OF OUR SA WILL
VARY UP OR DOWN DEPENDING ON THE UNIT VALUE OF SUCH INVESTMENT FUND, WHICH IN
TURN DEPENDS ON THE INVESTMENT PERFORMANCE OF THE SECURITIES HELD BY THAT SA
FUND. THERE ARE NO MINIMUM GUARANTEES AS TO SUCH PORTION OF YOUR POLICY ACCOUNT.
The portion of your Policy Account that is in our GIA will accumulate, after
deductions, at rates of interest we determine. Such rates will not be less than
4% a year.
THE AMOUNT AND DURATION OF THE DEATH BENEFIT MAY BE VARIABLE OR FIXED AS
DESCRIBED IN THIS POLICY.
This is a non-participating policy.
RIGHT TO EXAMINE POLICY. You may examine this policy and if for any reason you
are not satisfied with it, you may cancel it by returning this policy with a
written request for cancellation to our Administrative Office by the 10th day
after you receive it. If you do this, we will refund the premiums that were paid
on this policy.
/s/ Linda J. Glasso /s/ Samuel B. Shlesinger
- ------------------------------- ---------------------------------------
Linda J. Galasso, Samuel B. Shlesinger, Chairman,
Secretary President & Chief Executive Officer
<PAGE>
No. CO99-500
CONTENTS
Policy Information 3
Table of Maximum Monthly Charges
for Benefits 4
Those Who Benefit from this Policy 5
The Insurance Benefit We Pay 5
Changing the Face Amount of Insur-
ance or the Death Benefit Option 7
<TABLE>
<CAPTION>
The Premiums You Pay 7 In this Policy Administrative Office
-------------- ---------------------
<S> <C> <C>
Your Policy Account and How it "We, "our," and "us mean the The address of our administra-
Works 9 Equitable Of Colorado, Inc. tive Office is shown on Page 3.
You should send premiums and
Your Investment Options 10 "You" and "your" mean the correspondence to that address
owner of the policy at the time unless instructed otherwise.
The Value of Your Policy Account 11 an owners right is exercised.
The Cash Surrender Value of this Unless otherwise stated all
Policy 12 references to interest in this
Policy are effective annual rates
How a Loan Can Be Made 13 of interest.
Our Separate Account(s) (SA) 14
Our Annual Report to You 15 Attained age means the age on the
Birthday nearest to the beginning Copies of the application for this
How Benefits are Paid 15 of the current policy year. policy and any additional benefit
riders are attached to the policy.
Other Important Information 16
In this policy:
</TABLE>
INTRODUCTION
The premiums you pay, after deductions are made in accordance with the Table of
Expense Charges in the Policy Information section, are put into your Policy
Account. Amounts in your Policy Account are allocated at your direction to one
or more investment funds of our SA and to our GIA.
The investment funds of our SA invest in securities and other investments whose
value is subject to market fluctuations and investment risk. There is no
guarantee of principal or investment experience.
Our GIA earns interest at rates we declare in advance of each policy year. The
rates are guaranteed for each policy year. The principal, after deductions, is
also guaranteed.
If death benefit Option A is in effect, the death benefit is the Face Amount of
Insurance, and the amount of the death benefit is fixed except when it is a
percentage of your Policy Account. If death benefit Option B is in effect, the
death benefit is the Face Amount of Insurance plus the amount in your Policy
Account. The amount of the death benefit is variable. Under either option, the
death benefit will never be less than a percentage of your Policy Account as
stated on Page 6.
This policy is guaranteed not to lapse during the policy years shown on Page 3,
subject to premiums having been paid in accordance with the No Lapse Guarantee
provision as described in this policy.
We make monthly deductions from your Policy Account to cover the cost of the
benefits provided by this policy and the cost of any benefits provided by riders
to this policy. If you give up this policy for its Net Cash Surrender Value,
reduce the Face Amount of Insurance, or if this policy ends without value at the
end of the grace period, we may deduct a surrender charge from your Policy
Account.
This is only a summary of what this policy provides. You should read all of it
carefully. Its terms govern your rights and our obligations.
No. CO99-500-2 Page 2
<PAGE>
POLICY INFORMATION
INSURED PERSON RICHARD ROE
POLICY OWNER RICHARD ROE
FACE AMOUNT
OF INSURANCE $50,000
DEATH BENEFIT OPTION A (SEE PAGE 6)
POLICY NUMBER XX XXX XXX SEPARATE ACCOUNT [VLI]
BENEFICIARY MARGARET H. ROE
REGISTER DATE JANUARY 11, 1999 ISSUE AGE 35
DATE OF ISSUE JANUARY 11, 1999 SEX MALE
INSURED PERSON'S PREFERRED
STATE OF RESIDENCE SPECIMEN NON-TOBACCO USER
A MINIMUM INITIAL PREMIUM PAYMENT OF $96.42 IS DUE ON OR BEFORE DELIVERY OF THE
POLICY.
THE PLANNED PERIODIC PREMIUM OF [$150.00] IS PAYABLE [QUARTERLY.]
NO LAPSE GUARANTEE PERIOD - 20 YEARS - SEE NO LAPSE GUARANTEE PROVISION
SEE PAGE 3 -- CONTINUED FOR TABLE OF NO LAPSE GUARANTEE PREMIUMS
PREMIUM PAYMENTS ARE FOR THE INSURANCE BENEFIT AND ANY ADDITIONAL BENEFIT RIDERS
LISTED BELOW.
THE PLANNED PERIODIC PREMIUMS SHOWN ABOVE MAY NOT BE SUFFICIENT TO CONTINUE THE
POLICY AND LIFE INSURANCE COVERAGE IN FORCE TO THE FINAL POLICY DATE, WHICH IS
THE POLICY ANNIVERSARY NEAREST THE INSURED PERSON'S 100TH BIRTHDAY. THE PERIOD
FOR WHICH THE POLICY AND COVERAGE WILL CONTINUE IN FORCE WILL DEPEND ON: (1) THE
AMOUNT, TIMING AND FREQUENCY OF PREMIUM PAYMENTS; (2) CHANGES IN THE FACE AMOUNT
OF INSURANCE AND THE DEATH BENEFIT OPTIONS; (3) CHANGES IN THE INTEREST RATES
CREDITED TO OUR GIA AND IN THE INVESTMENT PERFORMANCE OF THE INVESTMENT FUNDS OF
OUR SA; (4) CHANGES IN THE MONTHLY DEDUCTIONS FROM THE POLICY ACCOUNT FOR THIS
POLICY AND ANY BENEFITS PROVIDED BY RIDERS TO THIS POLICY; AND (5) LOAN AND
PARTIAL NET CASH SURRENDER VALUE WITHDRAWAL ACTIVITY.
PAGE 3
CO99-500-3 (CONTINUED ON NEXT PAGE) Page 3
<PAGE>
POLICY INFORMATION CONTINUED - POLICY NUMBER XX XXX XXX
-----------------TABLE OF NO LAPSE GUARANTEE PREMIUMS---------------
BENEFITS MONTHLY PREMIUM PREMIUM PERIOD
- -------- --------------- --------------
BASIC LIFE INSURANCE 31.42 20 YEARS
CO99-500-4 PAGE 3 -- CONTINUED Page 4
<PAGE>
POLICY INFORMATION CONTINUED--POLICY NUMBER XX XXX XXX
-----------TABLE OF AUTOMATIC EXPENSE CHARGES----------
DEDUCTIONS FROM PREMIUM PAYMENTS:
CHARGE FOR APPLICABLE TAXES (OTHER THAN TAXES DISCUSSED ON PAGE 12):
[2.000%] OF EACH PREMIUM PAYMENT. THIS AMOUNT IS SUBTRACTED FROM EACH
PREMIUM PAYMENT. WE RESERVE THE RIGHT TO CHANGE THIS PERCENTAGE TO
CONFORM TO CHANGES IN THE LAW OR IF THE INSURED PERSON CHANGES
RESIDENCE.
PREMIUM CHARGE:
6% OF EACH PREMIUM PAYMENT.
DEDUCTIONS FROM YOUR POLICY ACCOUNT:
INITIAL ADMINISTRATIVE CHARGE:
$25.00 IS DEDUCTED AT THE BEGINNING OF EACH POLICY MONTH DURING THE
FIRST POLICY YEAR.
SUBSEQUENT YEARS ADMINISTRATIVE CHARGE:
[$6.00] IS DEDUCTED AT THE BEGINNING OF EACH POLICY MONTH DURING EACH
POLICY YEAR AFTER THE FIRST POLICY YEAR. WE RESERVE THE RIGHT TO
CHANGE THIS CHARGE BUT IT WILL NEVER BE MORE THAN $10.00 A MONTH.
CHANGES WILL BE AS DESCRIBED IN "CHANGES IN POLICY COST FACTORS" ON
PAGE 16.
CO99-500-5 PAGE 3 -CONTINUED Page 5
<PAGE>
POLICY INFORMATION CONTINUED-POLICY NUMBER XX XXX XXX
--------TABLE OF MAXIMUM SURRENDER CHARGES--------
FOR THE INITIAL FACE AMOUNT
BEGINNING OF BEGINNING OF
POLICY POLICY
YEAR CHARGE YEAR CHARGE
---- ------ ---- ------
1 $300.30 9 $300.30
2 300.30 10 296.13
3 300.30 11 246.08
4 300.30 12 196.03
5 300.30 13 145.98
6 300.30 14 95.93
7 300.30 15 45.88
8 300.30 16 AND LATER 0.00
A SURRENDER CHARGE WILL BE SUBTRACTED FROM YOUR POLICY ACCOUNT IF THIS POLICY IS
GIVEN UP FOR ITS NET CASH SURRENDER VALUE OR IF THIS POLICY TERMINATES WITHIN
THE FIRST FIFTEEN POLICY YEARS. THE MAXIMUM CHARGE IN THE FIRST POLICY MONTH OF
EACH POLICY YEAR IS SHOWN IN THE TABLE ABOVE (SUBJECT TO ANY APPLICABLE
LIMITATIONS IMPOSED BY THE INVESTMENT COMPANY ACT OF 1940). AFTER THE NINTH
POLICY YEAR, THE MAXIMUM CHARGE IN ANY OTHER POLICY MONTH WILL BE BASED ON THE
NUMBER OF POLICY MONTHS SINCE THE BEGINNING OF THE POLICY YEAR.
THIS TABLE ASSUMES NO FACE AMOUNT INCREASES. SEE PAGE 12 FOR A DESCRIPTION OF
CHANGES TO MAXIMUM SURRENDER CHARGES FOR FACE AMOUNT INCREASES.
IF THE FACE AMOUNT OF INSURANCE IS REDUCED WITHIN THE FIRST FIFTEEN POLICY
YEARS, A PRO RATA SHARE OF THE APPLICABLE SURRENDER CHARGE AT THAT TIME WILL BE
DEDUCTED FROM YOUR POLICY ACCOUNT. SEE PAGE 12 FOR A DESCRIPTION OF THE PRO RATA
SURRENDER CHARGE.
****ADMINISTRATIVE OFFICE: THE EQUITABLE OF COLORADO, INC. ****
SPECIMEN SERVICE CENTER
100 SPECIMEN STREET
CITY, STATE 10001-6018
CO99-500-6 PAGE 3 -CONTINUED Page 6
<PAGE>
POLICY INFORMATION CONTINUED - POLICY NUMBER XX XXX XXX
-----------TABLE OF MAXIMUM MONTHLY CHARGES FOR BENEFITS----------
MONTHLY DEDUCTION
BENEFITS FROM POLICY ACCOUNT PERIOD
- -------- ------------------- ------
BASIC COST OF INSURANCE MAXIMUM MONTHLY COST OF
INSURANCE RATE (SEE PAGE
4--CONTINUED) TIMES
THOUSANDS OF NET AMOUNT
AT RISK (SEE PAGE 9) 65 YEARS
CO99-500-7 PAGE 4 Page 7
(CONTINUED ON NEXT PAGE)
<PAGE>
POLICY INFORMATION CONTINUED - POLICY NUMBER XX XXX XXX.
-------TABLE OF GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES------
PER $1,000 OF NET AMOUNT AT RISK (SEE PAGE 9) FOR BASIC LIFE INSURANCE
INSURED INSURED INSURED
PERSON'S PERSON'S PERSON'S
ATTAINED ATTAINED ATTAINED
AGE RATE AGE RATE AGE RATE
35 0.14083 55 0.65333 75 5.03667
36 0.14750 56 0.72167 76 5.59000
37 0.15667 57 0.79417 77 6.17500
38 0.16667 58 0.87250 78 6.78667
39 0.17833 59 0.96083 79 7.44000
40 0.19083 60 1.05917 80 8.16167
41 0.20583 61 1.16833 81 8.97250
42 0.22083 62 1.29417 82 9.89750
43 0.23833 63 1.43667 83 10.95167
44 0.25583 64 1.59833 84 12.11833
45 0.27667 65 1.77750 85 13.37417
46 0.29917 66 1.97083 86 14.69833
47 0.32333 67 2.18083 87 16.08083
48 0.34917 68 2.40583 88 17.49667
49 0.37833 69 2.65333 89 18.96583
50 0.41000 70 2.93250 90 20.51167
51 0.44667 71 3.30167 91 22.16500
52 0.48917 72 3.61750 92 23.98667
53 0.53667 73 4.04167 93 26.06583
54 0.59250 74 4.52000 94 28.78417
95 32.81750
96 39.64250
97 53.06583
98 83.33250
99 83.33250
CO99-500-8 PAGE 4 -- CONTINUED Page 8
<PAGE>
- ------------------------------------------------------------------------
THOSE WHO BENEFIT FROM THIS POLICY
OWNER. The owner of this policy is the insured person unless otherwise stated in
the application, or later changed.
As the owner, you are entitled to exercise all the rights of this policy while
the insured person is living. To exercise a right, you do not need the consent
of anyone who has only a conditional or future ownership interest in this
policy.
BENEFICIARY. The beneficiary is as stated in the application, unless later
changed. The beneficiary is entitled to the Insurance Benefit of this policy.
One or more beneficiaries for the Insurance Benefit can be named in the
application. If more than one beneficiary is named, they can be classed as
primary or contingent. If two or more persons are named in a class, their shares
in the benefit can be stated. The stated shares in the Insurance Benefit will be
paid to any primary beneficiaries who survive the insured person. If no primary
beneficiaries survive, payment will be made to any surviving contingent
beneficiaries. Beneficiaries who survive in the same class will share the
Insurance Benefit equally, unless you have made another arrangement with us.
If there is no designated beneficiary living at the death of the insured person,
we will pay the Insurance Benefit to the insured person's surviving children in
equal shares. If none survive, we will pay the insured person's estate.
CHANGING THE OWNER OR BENEFICIARY. While the insured person is living, you may
change the owner or beneficiary by written notice in a form satisfactory to us.
You can get such a form from our agent or by writing to us at our Administrative
Office. The change will take effect on the date you sign the notice. But, it
will not apply to any payment we make or other action we take before we receive
the notice. If you change the beneficiary, any previous arrangement you made as
to a payment option for benefits is cancelled. You may choose a payment option
for the new beneficiary in accordance with "How Benefits Are Paid" on Page 15.
ASSIGNMENT. You may assign this policy, if we agree. In any event, we will not
be bound by an assignment unless we have received it in writing at our
Administrative Office. Your rights and those of any other person referred to in
this policy will be subject to the assignment. We assume no responsibility for
the validity of an assignment. An absolute assignment will be considered as a
change of ownership to the assignee.
- --------------------------------------------------------------------------------
THE INSURANCE BENEFIT WE PAY
We will pay the Insurance Benefit of this policy to the beneficiary when we
receive at our Administrative Office (1) proof satisfactory to us that the
insured person died before the Final Policy Date; and (2) all other requirements
we deem necessary before such payment may be made. The Insurance Benefit
includes the following amounts, which we will determine as of the date of the
insured person's death:
o the death benefit described on Page 6;
o plus any other benefits then due from riders to this policy;
o minus any policy loan and accrued interest;
o minus any overdue deductions from your Policy Account if the insured person
dies during a grace period.
We will add interest to the resulting amount in accordance with applicable law.
We will compute the interest at a rate we determine, but not less than the
greater of (a) the rate we are paying on the date of payment under the Deposit
Option on Page 15, or (b) the rate required by any applicable law. Payment of
the Insurance Benefit may also be affected by other provisions of this policy.
See Pages 16 and 17, where we specify our right to contest the policy, the
suicide exclusion, and what happens if age or sex has been misstated. Special
exclusions or limitations (if any) are listed in the Policy Information section.
CO99-500-9 Page 9
<PAGE>
DEATH BENEFIT. The death benefit at any time will be determined under either
Option A or Option B below, whichever you have chosen and is in effect at such
time.
Under Option A, the death benefit is the greater of (a) the Face Amount of
Insurance; or (b) a percentage (see Table below) of the amount in your Policy
Account. Under this option, the amount of the death benefit is fixed, except
when it is determined by such percentage.
Under Option B, the death benefit is the greater of (a) the Face Amount of
Insurance plus the amount in your Policy Account; or (b) a percentage (see Table
below) of the amount in your Policy Account. Under this option the amount of the
death benefit is variable.
The percentages referred to above are the percentages from the following table
for the insured person's age (nearest birthday) at the beginning of the policy
year of determination.
TABLE OF PERCENTAGES
For ages not shown, the percentages shall
decrease by a ratable portion for each full year
INSURED INSURED
PERSON'S AGE PERCENTAGE PERSON'S AGE PERCENTAGE
- ------------ ---------- ------------ ----------
40 and under 250% 65 120%
45 215 70 115
50 185 75 thru 95 105
55 150 100 100
60 130
Section 7702 of the Internal Revenue Code of 1986, as amended (i.e., the
"Code"), gives a definition of life insurance which limits the amounts that may
be paid into a life insurance policy relative to the benefits it provides. Even
if this policy states otherwise, at no time will the "future benefits" under
this policy be less than an amount such that the "premiums paid" do not exceed
the Code's "guideline premium limitations". We may adjust the amount of premium
paid to meet these limitations. Also, at no time will the "death benefit" under
the policy be less than the "applicable percentage" of the "cash surrender
value" of the policy. The above terms are as defined in the Code. In addition,
we may take certain actions, described here and elsewhere in the policy, to meet
the definitions and limitations in the Code, based on our interpretation of the
Code. Please see "Policy Changes ^A Applicable Tax Law" for more information.
MATURITY BENEFIT. If the Insured person is living on the Final Policy Date
defined in the Policy Information section, we will pay you the amount in your
Policy Account on that date minus any policy loan and accrued interest. This
policy will then end.
CO99-500-10 Page 10
<PAGE>
- --------------------------------------------------------------------------------
CHANGING THE FACE AMOUNT OF INSURANCE OR THE DEATH BENEFIT OPTION
You may change the death benefit option or the Face Amount of Insurance by
written request to us at our Administrative Office, subject to our approval and
the following:
1. At any time after the first policy year while this policy is in force, you
may ask us to increase the Face Amount of Insurance if you provide evidence
satisfactory to us of the insurability of the insured person. If you
request an increase and the rating class of the insured person on the date
of the increase is higher, a separate policy will be issued for the amount
of the increase. Any increase you ask for must be at least $10,000. There
is a charge for such increase of $1.50 for each $1,000 of insurance, but
not more than $240.00 per increase. We will deduct the charge from your
Policy Account as of the date the increase takes effect. Such deduction
will be made in accordance with the "Allocations" provision on Page 10. If
you increase the face amount, an additional fifteen year surrender charge
may apply to that increase if any or all of that increase is surrendered
before the end of the fifteenth year from the effective date of increase.
2. At any time after the second policy year while this policy is in force, you
may ask us to reduce the Face Amount of Insurance but not to less than the
minimum amount for which we would then issue this policy under our rules.
Any such reduction in the Face Amount of Insurance may not be less than
$10,000. If you do this before the end of the fifteenth policy year or
before the end of the fifteenth year following an increase in the face
amount, we will deduct from your Policy Account a pro rata share of the
applicable surrender charge (see Page 12). Reductions will first be applied
against the most recent increase in the Face Amount of Insurance. They will
then be applied to prior increases in the Face Amount of Insurance in the
reverse order in which such increases took place, and then to the original
Face Amount of Insurance.
3. At any time after the second policy year while this policy is in force, you
can change your death benefit option. If you ask us to change from Option A
to Option B, we will decrease the Face Amount of Insurance by the amount in
your Policy Account on the date the change takes effect. However, we
reserve the right to decline to make such change if it would reduce the
Face Amount of Insurance below the minimum amount for which we would then
issue this policy under our rules. We also reserve the right to request
evidence of insurability for a change to Option B. If you ask us to change
from Option B to Option A, we will increase the Face Amount of Insurance by
the amount in your Policy Account on the date the change takes effect. Such
decreases and increases in the Face Amount of Insurance are made so that
the death benefit remains the same immediately before and after the change.
4. The change will take effect at the beginning of the policy month that
coincides with or next follows the date we approve your request.
5. We reserve the right to decline to make any change that we determine would
cause this policy to fail to qualify as life insurance under applicable tax
law as interpreted by us (see Page 16).
6. You may ask for a change by completing an application for change, which you
can get from our agent or by writing to us at our Administrative Office. A
copy of your application for change will be attached to the new Policy
Information section that we will issue when the change is made. The new
section and the application for change will become a part of this policy.
We may require you to return this policy to our Administrative Office to
make a policy change.
- --------------------------------------------------------------------------------
THE PREMIUMS YOU PAY
The minimum initial premium payment shown in the Policy Information section is
due on or before delivery of this policy. No insurance will take effect before a
premium at least equal to the minimum initial premium payment is paid. Other
premiums may be paid at any time while this policy is in force and before the
Final Policy Date at our Administrative Office.
We will send premium notices to you for the planned periodic premium shown in
the Policy Information section. You may skip planned periodic premium payments.
However, this may adversely affect the duration of the death benefit and your
policy's values. We will assume that any payment you make to us is a premium
payment, unless you tell us in writing that it is a loan repayment.
CO99-500-11 Page 11
<PAGE>
LIMITS. Each premium payment after the initial one must be at least $100. We may
increase this minimum limit 90 days after we send you written notice of such
increase. We reserve the right to limit the amount of any premium payments you
may make which are in excess of the greater of the Planned Periodic Premium or
the No Lapse Guarantee Premium shown on Page 3-Continued.
We also reserve the right not to accept premium payments or to return excess
amounts (in a policy year) that we determine would cause this policy to fail to
qualify as life insurance under applicable tax law as interpreted by us (see
Page 16).
NO LAPSE GUARANTEE.
This policy is guaranteed not to lapse during the policy years shown on Page 3
if the sum of premium payments accumulated at 4%, less any partial withdrawals
accumulated at 4%, is at least equal to the No Lapse Guarantee Premium(s) (shown
on Page 3-Continued for base policy and additional benefit riders, if any)
accumulated at 4%, and any outstanding loan and accrued loan interest does not
exceed the cash surrender value. Certain policy changes after issue will change
the No Lapse Guarantee Premium(s). This no lapse guarantee terminates at the end
of the policy year shown on Page 3.
GRACE PERIOD. At the beginning of each policy month, the Net Cash Surrender
Value will be compared to the total monthly deductions described on Page 9. If
the Net Cash Surrender Value is sufficient to cover the total monthly
deductions, the policy is not in default.
If the Net Cash Surrender Value at the beginning of any policy month during the
no lapse guarantee period is less than such deductions for that month we will
perform the following calculations to determine whether the policy is in
default:
1. Determine the No Lapse Guarantee Premium fund. The No Lapse Guarantee
Premium fund for any policy month is the accumulation of all the No Lapse
Guarantee premiums shown on Page 3-Continued up to that month at 4%
interest.
2. Determine the actual premium fund. The actual premium fund for any policy
month is the accumulation of all the premiums received at 4% interest minus
all withdrawals accumulated at 4% interest.
3. If the result in Step 2 is greater than or equal to the result in Step 1,
and any loan and accrued loan interest does not exceed the Cash Surrender
Value, the policy is not in default. The no lapse guarantee will be in
effect and monthly deductions in excess of the Policy Account will be
waived.
4. If the result of Step 2 is less than the result in Step 1, or if the result
of Step 2 is greater than or equal to the result in Step 1 and any loan and
accrued loan interest exceeds the Cash Surrender Value, the policy is in
default as of the first day of this policy month. This is the date of
default.
If the no lapse guarantee has terminated (see No Lapse Guarantee provision) the
calculations in Steps 1. - 4. above will not be performed. In that case, if the
Net Cash Surrender Value at the beginning of any policy month is less than the
monthly deductions for that month, the policy is in default as of the first day
of such policy month.
If the policy is in default, we will send you and any assignee on our records at
last known addresses written notice stating that a grace period of 61 days has
begun as of the date of default. The notice will also state the amount of
payment that is due.
The payment required will not be more than an amount sufficient to increase the
Net Cash Surrender Value to cover all monthly deductions for 3 months calculated
assuming no interest or investment performance were credited to or charged
against the Policy Account and no policy changes were made.
If we do not receive such amount at our Administrative Office before the end of
the grace period, your policy will lapse as of the date of default and we will
then (1) withdraw and retain the entire amount in your Policy Account; and (2)
send a written notice to you and any assignee on our records at last known
addresses stating that this policy has ended without value.
If we receive the requested amount before the end of the grace period, but the
Net Cash Surrender Value is still insufficient to cover total monthly
deductions, we will send a written notice that a new 61-day grace period has
begun and request an additional payment.
If the insured person dies during a grace period, we will pay the Insurance
Benefit as described on Page 5.
CO99-500-12 Page 12
<PAGE>
RESTORING YOUR POLICY BENEFITS. If this policy has ended without value, you may
restore policy benefits while the insured person is alive if you: Ask for
restoration of policy benefits within 6 months from the end of the grace period;
and
1. Provide evidence of insurability satisfactory to us; and
2. Make a required payment. The required payment will not be more than an
amount sufficient to cover (i) the monthly administrative charges from the
date of default to the effective date of restoration; (ii) total monthly
deductions for 3 months, calculated from the effective date of restoration;
(iii) any excess of the applicable surrender charge on the date of
restoration over the surrender charge that was deducted on the date of
default; and (iv) the charge for applicable taxes, the premium charge, and
any increase in surrender charges associated with this payment. We will
determine the amount of this required payment as if no interest or
investment performance were credited to or charged against your Policy
Account.
From the required payment we will deduct the charge for applicable taxes and the
premium charge. The policy account on the date of restoration will be equal to
the balance of the required payment plus a surrender charge credit. The
surrender charge credit will be the surrender charge that was deducted on the
date of default, but not greater than the applicable surrender charge as of the
effective date of restoration.
The effective date of the restoration of policy benefits will be the beginning
of the policy month which coincides with or next follows the date we approve
your request.
We will start to make monthly charges again as of the effective date of
restoration. The monthly administrative charges from the date of default to the
effective date of restoration will be deducted from the Policy Account as of the
effective date of restoration.
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YOUR POLICY ACCOUNT AND HOW IT WORKS
PREMIUM PAYMENTS. When we receive your premium payments, we subtract the expense
charges shown in the table in the Policy Information section and any overdue
monthly deductions (unless waived under the No Lapse Guarantee provision.) We
put the balance (the net premium) into your Policy Account as of the date we
receive the premium payment at our Administrative Office, and before any
deductions from your Policy Account due on that date are made. However, we will
put the initial net premium payment into your Policy Account as of the Register
Date if it is later than the date of receipt. No premiums will be applied to
your Policy Account until the minimum initial premium payment, as shown in the
Policy Information Section, is received at our Administrative Office.
MONTHLY DEDUCTIONS. At the beginning of each policy month we make a deduction
from your Policy Account to cover monthly administrative charges and to provide
insurance coverage. Such deduction for any policy month is the sum of the
following amounts determined as of the beginning of that month:
o the monthly administrative charges;
o the monthly cost of insurance for the insured person; and
o the monthly cost of any benefits provided by riders to this policy.
The monthly cost of insurance is the sum of a) our current monthly cost of
insurance rate times the net amount at risk at the beginning of the policy month
divided by $1,000; plus b) any flat extra charge shown in the Policy Information
section. The net amount at risk at any time is the death benefit minus the
amount in your Policy Account at that time.
We will determine cost of insurance rates from time to time. Any change in the
cost of insurance rates we use will be as described in "Changes in Policy Cost
Factors" on Page 16. They will never be more than those shown in the Table of
Guaranteed Maximum Cost of Insurance Rates on Page 4-Continued.
CO99-500-13 Page 13
<PAGE>
OTHER DEDUCTIONS. We also make the following other deductions from your Policy
Account as they occur:
o We deduct a withdrawal charge if you make a partial withdrawal of the Net
Cash Surrender Value (see Page 13).
o We deduct a surrender charge if, before the end of the fifteenth policy
year, you give up this policy for its Net Cash Surrender Value, you reduce
the Face Amount of Insurance, or if this policy terminates without value at
the end of a grace period (see Page 12). A surrender charge will also apply
to such transactions for up to fifteen years following a face amount
increase.
o We deduct a charge if you increase the Face Amount of Insurance (see Page
7).
o We deduct a charge for certain transfers (see below).
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YOUR INVESTMENT OPTIONS
ALLOCATIONS. This policy provides investment options for the amount in your
Policy Account. Amounts put into your Policy Account and deductions from it are
allocated to the investment funds of our SA and to the unloaned portion of our
GIA at your direction. You specified your initial premium allocation and
deduction allocation percentages in your application for this policy, a copy of
which is attached to this policy. Unless you change them, such percentages shall
also apply to subsequent premium and deduction allocations. However, any amounts
which are put into your Policy Account prior to the Allocation Date and which
are to be allocated to the investment funds of our SA will initially be
allocated to (and monthly deductions taken from) the Money Market Fund of our SA
except for any amount allocated to the GIA. The Allocation Date is the first
business day (see Page 12) twenty calendar days after the date of issue of this
policy. On the Allocation Date, any such amounts then in the Money Market Fund
will be allocated in accordance with the directions contained in your policy
application.
Allocation percentages must be zero or a whole number not greater than 100. The
sum of the premium allocation percentages and of the deduction allocation
percentages must each equal 100.
You may change such allocation percentages by written notice to our
Administrative Office. A change will take effect on the date we receive it at
our Administrative Office except for changes received on or prior to the
Allocation Date which will take effect on the first business day following the
Allocation Date.
If we cannot make a monthly deduction on the basis of the deduction allocation
percentages then in effect, we will make that deduction based on the proportion
that your unloaned value in our GIA and your values in the investment funds of
our SA bear to the total unloaned value in your Policy Account.
TRANSFERS. At your written request to our Administrative Office, we will
transfer amounts from your value in any investment fund of our SA to one or more
other funds of our SA or to our GIA. Any such transfer will take effect on the
date we receive your written request at our Administrative Office. However, no
transfers will be made prior to the Allocation Date.
Once during each policy year you may ask us by written request to our
Administrative Office to transfer an amount you specify from your unloaned value
in our GIA to one or more investment funds of our SA. However, we will make such
a transfer only if (1) we receive your written request at our Administrative
Office within 30 days before or after a policy anniversary; and (2) the amount
you specify is not more than the greater of 25% of your unloaned value in our
GIA as of the date the transfer takes effect or $500.00. In no event will we
transfer more than your unloaned value in our GIA. The transfer will take effect
on the date we receive your written request for it at our Administrative Office
but not before the policy anniversary.
The minimum amount that we will transfer from your value in an investment fund
of our SA on any date is the lesser of $500.00 or your value in that investment
fund on that date, except as stated in the next paragraph. The minimum amount
that we will transfer from your value in our GIA is the lesser of $500.00 or
your unloaned value in our GIA as of the date the transfer takes effect, except
as stated in the next paragraph.
We will waive the minimum amount limitations set forth in the immediately
preceding paragraph if the total amount being transferred on that date is at
least $500.00.
CO99-500-14 Page 14
<PAGE>
We reserve the right to make a transfer charge up to $25.00 for each transfer of
amounts among your investment options. The transfer charge, if any, is deducted
from the amounts transferred from the investment funds of our SA and the GIA
based on the proportion that the amount transferred from each investment fund
and the GIA bears to the total amount being transferred. A transfer from the
Money Market Fund on the Allocation Date (if applicable) will not incur a
transfer charge. If you ask us to transfer the entire amount of your value in
the investment funds of our SA to our GIA, we will not make a charge for that
transfer.
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THE VALUE OF YOUR POLICY ACCOUNT
The amount in your Policy Account at any time is equal to the sum of the amounts
you then have in our GIA and the investment funds of our SA under this policy.
YOUR VALUE IN OUR GIA. The amount you have in our GIA at any time is equal to
the amounts allocated and transferred to it, plus the interest credited to it,
minus amounts deducted, transferred and withdrawn from it.
We will credit the amount in our GIA with interest rates we determine. We will
determine such interest rates annually in advance for unloaned and loaned
amounts in our GIA. The rates may be different for unloaned and loaned amounts.
The interest rates we determine each year will apply to the policy year that
follows the date of determination. Any change in the interest rates we determine
will be as described in "Changes in Policy Cost Factors" on Page 16. Such
interest rates will not be less than 4%. Interest accrues and is credited on
unloaned amounts in the GIA daily. However, we will credit interest on the
initial net premium from the Register Date if it is later than the date of
receipt provided the initial premium is at least equal to the minimum initial
premium shown on Page 3 of the policy.
We credit interest on the loaned portion of our GIA daily. The interest rate we
credit to the loaned portion of our GIA will be at an annual rate up to 2% less
than the loan interest rate we charge. However, we reserve the right to credit a
lower rate than this if in the future tax laws change such that our taxes on
policy loans or policy loan interest is increased. In no event will we credit
less than 4% a year. On each policy anniversary and at any time you repay all of
a policy loan, we allocate the interest that has been credited to the loaned
portion of our GIA to the investment funds of our SA and the unloaned portion of
our GIA in accordance with your premium allocation percentages.
YOUR VALUE IN THE INVESTMENT FUNDS OF OUR SA. The amount you have in an
investment fund of our SA under this policy at any time is equal to the number
of units this policy then has in that fund multiplied by the fund's unit value
at that time.
Amounts allocated, transferred or added to an investment fund of our SA are used
to purchase units of that fund; units are redeemed when amounts are deducted,
loaned, transferred or withdrawn. These transactions are called policy
transactions.
The number of units a policy has in an investment fund at any time is equal to
the number of units purchased minus the number of units redeemed in that fund to
that time. The number of units purchased or redeemed in a policy transaction is
equal to the dollar amount of the policy transaction divided by the fund's unit
value on the date of the policy transaction. Policy transactions may be made on
any day. The unit value that applies to a transaction made on a business day
will be the unit value for that day. The unit value that applies to a
transaction made on a non-business day will be the unit value for the next
business day.
We determine unit values for the investment funds of our SA at the end of each
business day. Generally, a business day is any day we are open and the New York
Stock Exchange is open for trading. A business day immediately preceded by one
or more non-business days will include those non-business days as part of that
business day. For example, a business day which falls on a Monday will consist
of that Monday and the immediately preceding Saturday and Sunday.
CO99-500-15 Page 15
<PAGE>
The unit value of an investment fund of our SA on any business day is equal to
the unit value for that fund on the immediately preceding business day
multiplied by the net investment factor for that fund on that business day.
The net investment factor for an investment fund of our SA on any business day
is (a) divided by (b), minus (c), where:
(a) is the net asset value of the shares in designated investment companies that
belong to the investment fund at the close of business on such business day
before any policy transactions are made on that day, plus the amount of any
dividend or capital gain distribution paid by the investment companies on that
day;
(b) is the value of the assets in that investment fund at the close of business
on the immediately preceding business day after all policy transactions were
made for that day; and
(c) is a charge for each calendar day in that business day, as defined above,
corresponding to a charge not exceeding .80% yearly for mortality and expense
risks, plus any charge for that day for taxes or amounts set aside as a reserve
for taxes.
The net asset value of an investment company's shares held in each investment
fund shall be the value reported to us by that investment company.
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THE CASH SURRENDER VALUE OF THIS POLICY
CASH SURRENDER VALUE. The Cash Surrender Value on any date is equal to the
amount in your Policy Account on that date minus any surrender charge.
NET CASH SURRENDER VALUE. The Net Cash Surrender Value is equal to the Cash
Surrender Value minus any policy loan and accrued loan interest. You may give up
this policy for its Net Cash Surrender Value at any time while the insured
person is living. You may do this by sending us a written request for it and
this policy to our Administrative Office. Your written request for cancellation
or surrender must include the following:
1. An unequivocal request for cancellation or surrender;
2. The policy number of the policy to be canceled or surrendered;
3. The name of the insured and owner (if other than the insured) and address
where proceeds should be mailed;
4. The signature of the owner of the policy and, if required by the policy or
by a legally binding document of which we have an actual notice, the
signature of a collateral assignment, irrevocable beneficiary, or other
person having an interest in the policy through the legally binding
document.
If this policy has a cash surrender value and is being given up for its net cash
surrender value, a completed withholding authorization (I.R.S. Form W-9) must
also be included with your written request. If this form is not provided to us
with your written request for cancellation or surrender, we will withhold income
tax on the taxable portion of your distribution at the mandated federal and
state tax rates. We will compute the Net Cash Surrender Value as of the date we
receive your request for it and this policy at our Administrative Office. If the
policy has been lost, stolen or destroyed, you must include a statement in the
written request that the policy was lost, stolen or destroyed with an
approximate date of when the policy was lost, stolen or destroyed. All insurance
coverage under this policy ends on the date we receive your written request.
SURRENDER CHARGES. If you give up this policy for its Net Cash Surrender Value
or if it ends without value at the end of a grace period before the end of the
fifteenth policy year, we will subtract a surrender charge from your Policy
Account. A table of maximum surrender charges for the initial face amount is in
the Policy Information section.
We will also establish surrender charges for any increase in the Face Amount of
Insurance that represents an increase over the previous highest Face Amount.
These will apply before the end of the fifteenth year from the effective date of
the increase. Changes in Face Amount resulting from a change in death benefit
option will not be considered in computing the previous highest Face Amount.
If the Face Amount of Insurance is reduced before the end of the fifteenth
policy year or within fifteen years following a face amount increase, we will
also deduct a proportionate amount of any applicable surrender charge from your
Policy Account. Such deduction will be made in accordance with the "Allocations"
provision on Page 10. Reductions will first be applied against the most recent
increase in the Face Amount of Insurance. They will then be applied to prior
increases in the Face Amount of Insurance in the reverse order in which such
increases took place, and then to the original Face Amount of Insurance.
We have filed a detailed statement of the method of computing surrender charges
with the insurance supervisory official of the jurisdiction in which this policy
is delivered.
CO99-500-16 Page 16
<PAGE>
PARTIAL NET CASH SURRENDER VALUE WITHDRAWAL. After the first policy year and
while the insured person is living, you may ask for a partial Net Cash Surrender
Value withdrawal by written request to our Administrative Office. Your request
will be subject to our approval based on our rules in effect when we receive
your request, and to the minimum withdrawal amount of $500.00. The amount
withdrawn from the Policy Account is equal to the amount requested plus an
expense charge equal to the lesser of $25.00 and 2% of the amount withdrawn. We
have the right to decline a request for a partial Net Cash Surrender Value
withdrawal. A partial withdrawal will result in a reduction in the Cash
Surrender Value and in your Policy Account equal to the amount withdrawn plus
the expense charge as well as a reduction in your death benefit. If the death
benefit is Option A, the withdrawal may also result in a decrease in the face
amount.
You may tell us how much of each partial withdrawal is to come from your
unloaned value in our GIA and from your values in each of the investment funds
of our SA. If you do not tell us, we will make the withdrawal on the basis of
your monthly deduction allocation percentages then in effect. The expense charge
is deducted from your value remaining in the investment options from which the
withdrawal was made, based on the proportion that the amount withdrawn from each
investment fund and the GIA bears to the total amount being withdrawn. If we
cannot make the withdrawal or deduct the expense charge as indicated above, we
will make the withdrawal and deduction based on the proportion that your
unloaned value in our GIA and your values in the investment funds of our SA bear
to the total unloaned value in your Policy Account.
Such withdrawal and resulting reduction in the death benefit, in the Cash
Surrender Value and in your Policy Account will take effect on the date we
receive your written request at our Administrative Office. We will send you a
new Policy Information section if a withdrawal results in a reduction in the
Face Amount of Insurance. It will become a part of this policy. We may require
you to return this policy to our Administrative Office to make a change.
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HOW A LOAN CAN BE MADE
POLICY LOANS. You can take a loan on this policy while it has a loan value. This
policy will be the only security for the loan. The initial loan and each
additional loan must be for at least $500.00. Any amount on loan is part of your
Policy Account (see Page 11). We refer to this as the loaned portion of your
Policy Account.
LOAN VALUE. The loan value on any date is 90% of the Cash Surrender Value on
that date.
The amount of the loan may not be more than the loan value. If you request an
increase to an existing loan, the additional amount requested will be added to
the amount of the existing loan and accrued loan interest.
Your request for a policy loan must be in writing to our Administrative Office.
You may tell us how much of the requested loan is to be allocated to your
unloaned value in our GIA and your value in each investment fund of our SA. Such
values will be determined as of the date we receive your request. If you do not
tell us, we will allocate the loan on the basis of your monthly deduction
allocation percentages then in effect. If we cannot allocate the loan on the
basis of your direction or those percentages, we will allocate it based on the
proportion that your unloaned value in our GIA and your values in the investment
funds of our SA bear to the total unloaned value in your Policy Account.
The loaned portion of your Policy Account will be maintained as a part of our
GIA. Thus, when a loaned amount is allocated to an investment fund of our SA, we
will redeem units of that investment fund sufficient in value to cover the
amount of the loan so allocated and transfer that amount to our GIA.
LOAN INTEREST. Interest on a loan accrues daily at an adjustable loan interest
rate. We will determine the rate at the beginning of each policy year, subject
to the following paragraphs. It will apply to any new or outstanding loan under
the policy during the policy year next following the date of determination.
The maximum loan interest rate for a policy year shall be the greater of: (1)
the "Published Monthly Average," as defined below, for the calendar month that
ends two months before the date of determination; or (2) 5%. "Published Monthly
Average" means the Monthly Average Corporates yield shown in Moody's Corporate
Bond Yield Averages published by Moody's Investors Service, Inc., or any
successor thereto. If such averages are no longer published, we will use such
other averages as may be established by regulation by the insurance supervisory
official of the jurisdiction in which this policy is delivered. In no event will
the loan interest rate for a policy year
CO99-500-17 Page 17
<PAGE>
be greater than the maximum rate permitted by applicable law. We reserve the
right to establish a rate lower than the maximum.
No change in the rate shall be less than 1/2 of 1% a year. We may increase the
rate whenever the maximum rate as determined by clause (1) of the preceding
paragraph exceeds the rate being charged by 1/2 of 1% or more. We will reduce
the rate to or below the maximum rate as determined by clause (1) of the
preceding paragraph if such maximum is lower than the rate being charged by 1/2
of 1% or more.
We will notify you of the initial loan interest rate when you make a loan. We
will also give you advance written notice of any increase in the interest rate
of any outstanding loan.
Loan interest is due on each policy anniversary. If the interest is not paid
when due, it will be added to your outstanding loan and allocated on the basis
of the deduction allocation percentages then in effect. If we cannot make the
allocation on the basis of these percentages, we will make it based on the
proportion that your unloaned value in our GIA and your values in the investment
funds of our SA bear to the total unloaned value in your Policy Account. The
unpaid interest will then be treated as part of the loaned amount and will bear
interest at the loan rate.
When unpaid loan interest is allocated to an investment fund of our SA, we will
redeem units of that investment fund sufficient in value to cover the amount of
the interest so allocated and transfer that amount to our GIA.
LOAN REPAYMENT. You may repay all or part of a policy loan at any time while the
insured person is alive and this policy is in force.
Repayments will first be allocated to our GIA until you have repaid any loaned
amounts that were allocated to our GIA. You may tell us how to allocate payments
above that amount among our GIA and the investment funds of our SA. If you do
not tell us, we will make the allocation on the basis of the premium allocation
percentages then in effect.
Failure to repay a policy loan or to pay loan interest will not terminate this
policy unless at the beginning of a policy month the Net Cash Surrender Value is
less than the total monthly deduction then due. In that case, the Grace Period
provision will apply (see Page 8).
A policy loan will have a permanent effect on your benefits under this policy
even if it is repaid.
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OUR SEPARATE ACCOUNT(S) (SA)
We established and we maintain our SA under the laws of New York State. Realized
and unrealized gains and losses from the assets of our SA are credited or
charged against it without regard to our other income, gains, or losses. Assets
are put in our SA to support this policy and other variable life insurance
policies. Assets may be put in our SA for other purposes, but not to support
contracts or policies other than variable contracts.
The assets of our SA are our property. The portion of its assets equal to the
reserves and other policy liabilities with respect to our SA will not be
chargeable with liabilities arising out of any other business we conduct. We may
transfer assets of an investment fund in excess of the reserves and other
liabilities with respect to that fund to another investment fund or to our
General Account.
INVESTMENT FUNDS. Our SA consists of investment funds. Each fund may invest its
assets in a separate class of shares of a designated investment company or
companies or make direct investments in securities. The investment funds of our
SA that you chose for your initial allocations are shown on the application for
this policy, a copy of which is attached to this policy. We may from time to
time make other investment funds available to you or we may create a new SA. We
will provide you with written notice of all material details including
investment objectives and all charges.
We have the right to change or add designated investment companies. We have the
right to add or remove investment funds. We have the right to withdraw assets of
a class of policies to which this policy belongs from an investment fund and put
them in another investment fund. We also have the right to combine any two or
more investment funds. The term investment fund in this policy shall then refer
to any other investment fund in which the assets of a class of policies to which
this policy belongs were placed.
CO99-500-18 Page 18
<PAGE>
We have the right to:
1. register or deregister any SA available under this policy under the
Investment Company Act of 1940;
2. run any SA available under this policy under the direction of a committee,
and discharge such committee at any time;
3. restrict or eliminate any voting rights of policy owners, or other persons
who have voting rights as to any SA available under this policy; and
4. Operate any SA available under this policy or one or more of its investment
funds by making direct investments or in any other form. If we do so, we
may invest the assets of such SA or one or more of the investment funds in
any legal investments. We will rely upon our own or outside counsel for
advice in this regard. Also, unless otherwise required by law or
regulation, an investment adviser or any investment policy may not be
changed without our consent. If required by law or regulation, the
investment policy of an investment fund of any SA available under this
policy will not be changed by us unless approved by the Superintendent of
Insurance of New York State or deemed approved in accordance with such law
or regulation.
If any of these changes result in a material change in the underlying
investments of an investment fund of our SA, we will notify you of such change,
as required by law. If you have value in that investment fund, if you wish, we
will transfer it at your written direction from that fund (without charge) to
another fund of our SA or to our GIA, and you may then change your premium and
deduction allocation percentages.
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OUR ANNUAL REPORT TO YOU
For each policy year we will send you a report for this policy that shows the
current death benefit, the value you have in our GIA and the value you have in
each investment fund of any SA available under this policy, the Cash Surrender
Value and any policy loan with the current loan interest rate. It will also show
the premiums paid and any other information as may be required by the insurance
supervisory official of the jurisdiction in which this policy is delivered.
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HOW BENEFITS ARE PAID
You can have the Insurance Benefit, your Net Cash Surrender Value withdrawals or
your Policy Account payable on the Final Policy Date paid immediately in one
sum. Or, you can choose another form of payment for all or part of them. If you
do not arrange for a specific choice before the insured person dies, the
beneficiary will have this right when the insured person dies. If you do make an
arrangement, however, the beneficiary cannot change it after the insured person
dies.
Payments under the following options will not be affected by the investment
experience of any investment fund of our SA after proceeds are applied under
such options.
The options are:
1. DEPOSIT: The sum will be left on deposit for a period mutually agreed upon.
We will pay interest at the end of every month, every 3 months, every 6
months or every 12 months, as chosen.
2. INSTALLMENT PAYMENTS: There are two ways that we pay installments:
A. FIXED PERIOD: We will pay the sum in equal installments for a
specified number of years (not more than 30). The installments
will be at least those shown in the Table of Guaranteed Payments
on Page 18.
B. FIXED AMOUNT: We will pay the sum in installments as mutually
agreed upon until the original sum, together with interest on the
unpaid balance, is used up.
1. MONTHLY LIFE INCOME: We will pay the sum as a monthly income for life. The
amount of the monthly payment will be at least that shown in the Table of
Guaranteed Payments on Page 18. You may choose any one of three ways to
receive monthly life income. We will guarantee payments for at least 10
years (called "10 Years Certain"); at least 20 years (called "20 Years
Certain"); or until the payments we make equal the original sum (called
"Refund Certain").
2. OTHER: We will apply the sum under any other option requested that we make
available at the time of payment.
CO99-500-19 Page 19
<PAGE>
The payee may name and change a successor payee for any amount we would
otherwise pay to the payee's estate.
Any arrangements involving more than one of the options, or a payee who is not a
natural person (for example, a corporation) or who is a fiduciary, must have our
approval. Also, details of all arrangements will be subject to our rules at the
time the arrangement takes effect. These include rules on: the minimum amount we
will apply under an option and minimum amounts for installment payments;
withdrawal or commutation rights; naming payees and successor payees; and
proving age and survival.
Payment choices (or any later changes) will be made and will take effect in the
same way as a change of beneficiary. Amounts applied under these options will
not be subject to the claims of creditors or to legal process, to the extent
permitted by law.
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OTHER IMPORTANT INFORMATION
YOUR CONTRACT WITH US. This policy is issued in consideration of payment of the
initial premium payment shown in the Policy Information section.
This policy, and the attached copy of the initial application and all subsequent
applications to change this policy, and all additional Policy Information
sections added to this policy, make up the entire contract. The rights conferred
by this policy are in addition to those provided by applicable Federal and State
laws and regulations.
Only our Chairman of the Board, our President or one of our Vice Presidents can
modify this contract or waive any of our rights or requirements under it. The
person making these changes must put them in writing and sign them.
POLICY CHANGES - APPLICABLE TAX LAW. For you and the beneficiary to receive the
tax treatment accorded to life insurance under Federal law, this policy must
qualify initially and continue to qualify as life insurance under the Code or
successor law. Therefore, we have reserved earlier in this policy the right to
decline to accept premium payments, to decline to change death benefit options,
to decline to change the Face Amount of Insurance, or to decline to make partial
withdrawals that, in our opinion, would cause this policy to fail to qualify as
life insurance under applicable tax law. Further, we reserve the right to make
changes in this policy or its riders (for example, in the percentages on Page 6)
or to require additional premium payments or to make distributions from this
policy or to change the Face Amount of Insurance to the extent we deem it
necessary to continue to qualify this policy as Life insurance. Any such changes
will apply uniformly to all policies that are affected. You will be given
advance written notice of such changes.
CHANGES IN POLICY COST FACTORS. Changes in policy cost factors (interest rates
we credit, cost of insurance deductions and expense charges) will be by class
and based upon changes in future expectations for such elements as: investment
earnings, mortality, persistency, expenses and taxes. Any change in policy cost
factors will be determined in accordance with procedures and standards on file,
if required, with the insurance supervisory official of the jurisdiction in
which this policy is delivered.
WHEN THE POLICY IS INCONTESTABLE. We have the right to contest the validity of
this policy based on material misstatements made in the initial application for
this policy. We also have the right to contest the validity of any policy change
or restoration based on material misstatements made in any application for that
change or restoration. However, we will not contest the validity of this policy
after it has been in effect during the lifetime of the insured person for two
years from the date of issue shown in the Policy Information section. We will
not contest any policy change that requires evidence of insurability, or any
restoration of this policy, after the change or restoration has been in effect
for two years during the insured person's lifetime.
No statement shall be used to contest a claim unless contained in an
application.
All statements made in an application are representations and not warranties.
See any additional benefit riders for modifications of this provision that apply
to them.
WHAT IF AGE OR SEX HAS BEEN MISSTATED? If the insured person's age or sex has
been misstated on any application, the death benefit and any benefits provided
by riders to this policy shall be those which would be purchased by the most
recent deduction for the cost of insurance, and the cost of any benefits
provided by riders, at the correct age and sex.
CO99-500-20 Page 20
<PAGE>
HOW THE SUICIDE EXCLUSION AFFECTS BENEFITS. If the insured person commits
suicide (while sane or insane) within two years after the Date of Issue shown in
the Policy Information section, our liability will be limited to the payment of
a single sum. This sum will be equal to the premiums paid, minus any loan and
accrued loan interest and minus any partial withdrawal of the Net Cash Surrender
Value. If the insured person commits suicide (while sane or insane) within two
years after the effective date of a change that you asked for that increases the
death benefit, then our liability as to the increase in amount will be limited
to the payment of a single sum equal to the monthly cost of insurance deductions
made for such increase plus the expense charge deducted for the increase (see
Page 7).
HOW WE MEASURE POLICY PERIODS AND ANNIVERSARIES. We measure policy years, policy
months, and policy anniversaries from the Register Date shown in the Policy
Information section. Each policy month begins on the same day in each calendar
month as the day of the month in the Register Date.
HOW, WHEN AND WHAT WE MAY DEFER. We may not be able to obtain the value of the
assets of the investment funds of our SA if: (1) the New York Stock Exchange is
closed; or (2) the Securities and Exchange Commission requires trading to be
restricted or declares an emergency. During such times, as to amounts allocated
to the investment funds of our SA, we may defer:
1. Determination and payment of Net Cash Surrender Value withdrawals;
2. Determination and payment of any death benefit in excess of the Face Amount
of Insurance;
3. Payment of loans;
4. Determination of the unit values of the investment funds of our SA; and
5. Any requested transfer or the transfer on the Allocation Date.
As to amounts allocated to our GIA, we may defer payment of any Net Cash
Surrender Value withdrawal or loan amount for up to six months after we receive
a request for it. We will allow interest, at a rate of at least 3% a year, on
any Net Cash Surrender Value payment derived from our GIA that we defer for 30
days or more.
THE BASIS WE USE FOR COMPUTATION. We provide Cash Surrender Values that are at
least equal to those required by law. If required to do so, we have filed with
the insurance supervisory official of the jurisdiction in which this policy is
delivered a detailed statement of our method of computing such values. We
compute reserves under this policy by the Commissioners Reserve Valuation
Method.
We base minimum cash surrender values and reserves on the Commissioners 1980
Standard Ordinary Male and Female Mortality Tables at attained ages 0-19 or the
Commissioners 1980 Standard Ordinary, Male and Female, Smoker and Non-Smoker,
Mortality Tables at attained ages 20 and over. We also use these tables as the
basis for determining maximum insurance costs, taking account of sex, attained
age, class of risk and Tobacco User status of the insured person. We use an
effective annual interest rate of 4%.
POLICY ILLUSTRATIONS. Upon request we will give you an illustration of the
future benefits under this policy based upon both guaranteed and current cost
factor assumptions. However, if you ask us to do this more than once in any
policy year, we reserve the right to charge you a fee for this service.
POLICY CHANGES. You may add additional benefit riders or make other changes,
subject to our rules at the time of change.
CO99-500-21 Page 21
<PAGE>
<TABLE>
<CAPTION>
TABLE OF GUARANTEED PAYMENTS
(MINIMUM AMOUNT FOR EACH $1,000 APPLIED)
OPTION 2A OPTION 3
FIXED PERIOD INSTALLMENTS MONTHLY LIFE INCOME
------------------------- -------------------
Number of Monthly Annual Age (10 Years Certain) (20 Years Certain) (Refund Certain)
years Installment Installment --- Male Female Male Female Male Female
installments ----------- ----------- ---- ------ ---- ------ ---- ------
- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $84.28 $1000.00 50 $3.48 $3.19 $3.42 $3.17 $3.37 $3.14
2 42.66 506.17 51 3.54 3.23 3.47 3.21 3.42 3.17
3 28.79 341.60 52 3.59 3.28 3.51 3.25 3.46 3.21
4 21.86 259.33 53 3.65 3.32 3.56 3.29 3.51 3.25
5 17.70 210.00 54 3.70 3.37 3.61 3.33 3.56 3.29
55 3.77 3.42 3.66 3.37 3.61 3.34
6 14.93 177.12 56 3.83 3.47 3.72 3.42 3.67 3.38
7 12.95 153.65 57 3.90 3.52 3.77 3.47 3.72 3.43
8 11.47 136.07 58 3.97 3.58 3.83 3.52 3.78 3.48
9 10.32 122.40 59 4.04 3.64 3.88 3.57 3.84 3.53
10 9.39 11.47
60 4.12 3.70 3.94 3.62 3.90 3.58
61 4.20 3.76 4.00 3.68 3.97 3.64
11 8.64 102.54 62 4.29 3.83 4.06 3.74 4.04 3.69
12 8.02 95.11 63 4.38 3.90 4.12 3.79 4.11 3.75
13 7.49 88.83 64 4.48 3.98 4.18 3.85 4.19 3.82
14 7.03 83.45
15 6.64 78.80 65 4.58 4.06 4.25 3.92 4.26 3.88
66 4.68 4.14 4.31 3.98 4.35 3.95
67 4.79 4.23 4.37 4.04 4.43 4.02
16 6.30 74.73 68 4.90 4.32 4.43 4.11 4.52 4.10
17 6.00 71.15 69 5.02 4.42 4.50 4.18 4.62 4.18
18 5.73 67.97
19 5.49 65.13 70 5.14 4.52 4.56 4.25 4.71 4.26
20 5.27 62.58 71 5.26 4.63 4.62 4.31 4.82 4.35
72 5.39 4.75 4.67 4.38 4.92 4.44
73 5.52 4.87 4.73 4.45 5.03 4.53
21 5.08 60.28 74 5.66 4.99 4.78 4.51 5.14 4.63
22 4.90 58.19
23 4.74 56.29 75 5.80 5.12 4.83 4.58 5.27 4.74
24 4.60 54.55 76 5.95 5.26 4.88 4.64 5.39 4.84
25 4.46 52.95 77 6.10 5.40 4.93 4.70 5.53 4.96
78 6.25 5.55 4.97 4.75 5.66 5.08
79 6.40 5.70 5.01 4.80 5.80 5.20
80 6.56 5.85 5.04 4.86 5.96 5.33
26 4.34 51.48 81 6.72 6.01 5.08 4.90 6.11 5.45
27 4.22 50.12 82 6.88 6.18 5.11 4.95 6.27 5.60
28 4.12 48.87 83 7.04 6.34 5.13 4.99 6.43 5.73
29 4.02 47.70 84 7.20 6.51 5.16 5.03 6.62 5.89
30 3.93 46.61 85 & over 7.36 6.67 5.18 5.07 6.81 6.04
</TABLE>
If installments are paid every 3 months, Amounts for Monthly Life Income are
they will be 25.23% of the annual based on age nearest birthday when
installments. If they are paid every 6 income starts. Amounts for ages
months, they will be 50.31% of the annual not shown will be furnished on
installments. request.
CO99-500-22 Page 22
<PAGE>
THE EQUITABLE
OF COLORADO, INC.
Home Office: 370 17th Street, Suite 4750, Denver, CO 80802
Flexible Premium Variable Life Insurance Policy. Insurance payable upon
death before Final Policy Date. Policy Account less outstanding loans
and accrued interest payable on Final Policy Date. Adjustable Death
Benefit. Premiums may be paid while insured person is living and before
the Final Policy Date. Premiums must be sufficient to keep the policy
in force. Values provided by this policy are based on declared interest
rates, and on the investment experience of the investment funds of a
separate account which in turn depends on the investment performance of
the securities held by such investment fund. They are not guaranteed as
to dollar amount. Investment options are described on Page 10. This is
a non-participating policy.
No. CO99-500-23 Page 23
OPTION TO PURCHASE
ADDITIONAL INSURANCE RIDER
In this rider, "we", "our" and "us" mean The Equitable of Colorado, Inc. "You"
and "your" mean the owner of the policy at the time an owner's right is
exercised.
- --------------------------------------------------------------------------------
You may buy new insurance policies on the life of the Insured under Options A, B
and C, subject to the terms of this rider. We will not ask for evidence of
insurability, except as stated in Option B and except where required for
additional benefit riders. The consent of the Insured is required.
OPTION AMOUNT. This amount is shown on page 3 of the policy or on the Additional
Benefits Rider if this rider is added after issue of the policy.
THIS RIDER'S COST. While this rider is in effect, its charge will be a part of
the monthly deduction from the Policy Account. The maximum monthly charge for
this benefit is shown in the Table of Maximum Monthly Charges For Benefits on
Page 4 of the policy.
OPTION A -- REGULAR OPTION (AVAILABLE ON OPTION DATES). You may buy a new policy
with a face amount up to the Option Amount on each of the Option Dates that
applies to the Insured while this rider is in effect. These dates are the policy
anniversaries after issue of this rider on which the Insured's age at nearest
birthday is 22, 25, 28, 31, 34, 37 and 40. The number of Option Dates available
depends on the Insured's age at issue of this rider.
You must submit an application for the new policy and pay its first premium on
or within 60 days before the Option Date. The new policy will not take effect
until the Option Date, which will be its Register Date.
OPTION B -- ALTERNATIVE OPTION (AVAILABLE INSTEAD OF NEXT REGULAR OPTION).
Within three years before an Option Date specified in Option A and while this
rider is in effect, you may buy a new policy on the life of the Insured with a
face amount up to the Option Amount. You may do this only if evidence of
insurability satisfactory to us is furnished.
We will issue the new policy with a current Register Date and at a premium rate
based on the same rating class as applies to this rider if the following
condition is met. We must be satisfied that the Insured then qualifies for a
permanent plan of life insurance policy, with premiums payable for life and at a
premium rate not more than 150% of the premium rate then in effect for that
policy at the same class of risk as under this rider.
You must submit an application for the new policy and pay its first premium
while the Insured is living. Any purchase under this option automatically
cancels the regular option on the next Option Date.
OPTION C -- BIRTH OR ADOPTION OF A CHILD. You may also buy a new policy on the
life of the Insured if a live birth of a child of the Insured or a legal
adoption of a child by the Insured occurs while this rider is in effect. Its
face amount may be up to the Option Amount. In the case of multiple live births,
its face amount may be up to the Option Amount times the number of live births.
You must submit an application for the new policy and pay its first premium
within 90 days after the birth or adoption while this rider is in effect. The
new policy will not take effect until its Register Date. This date will be the
earlier of: (1) the 90th day after the date of birth or adoption; or (2) the day
after this rider terminates. We may require evidence of birth or adoption.
TEMPORARY INSURANCE UPON BIRTH OR ADOPTION. We will provide temporary insurance
on the life of the Insured starting on the date of the live birth of a child of
the Insured or legal adoption of the child by the Insured, if this rider is then
in effect. If the Insured dies before the 90th day following such date and while
this rider is in effect, we will pay an amount equal to the Option Amount upon
receipt of proof of death. In the case of multiple births, we will pay the
Option Amount times the number of live births. We will include this amount with
the other insurance benefits of this policy.
THE NEW POLICY. You may choose that the new policy be on any permanent plan of
insurance for which it qualifies under our rules in effect on its Register Date
as to plan, amount, age and class of risk. You may not choose a policy of term
insurance, a policy which includes term insurance, or one that provides
insurance on more than one life. Premiums will be at our rate then in effect for
the Insured's attained insurance age and for the same class of risk as under
this rider.
The new policy may contain an Accidental Death Benefit rider if such a rider is
then in effect under this policy. The amount of its benefit may not be more than
the face amount of the new policy. The new policy may also contain a Disability
Waiver of premium or monthly deductions rider if such a rider is then in effect
under this policy. Otherwise, inclusion of an additional benefit rider will
require our consent and evidence of insurability satisfactory to us. The new
policy may not contain an Option to Purchase Additional Insurance.
R94-204 Option to Purchase Additional Insurance Rider (continued on back)
<PAGE>
TERMINATION. This rider will no longer be in effect:
1. on and after the policy anniversary nearest the Insured's 40th birthday
(except as to any Regular Option then available);
2. if the insurance under the policy terminates.
You may terminate this rider on any premium due date by asking for this in
writing.
GENERAL. This rider is a part of the policy. Its benefits are subject to all of
the terms of this rider and the policy.
The Suicide Exclusion and Incontestability provisions of the policy apply to
this rider. However, if this rider is added after the policy is issued, the
periods referred to in them are measured for this rider from its Date of Issue
as shown on the Additional Bene its Rider.
THE EQUITABLE OF COLORADO, INC.
/s/ Linda Galasso /s/ Samuel B. Shlesinger
Linda Galasso, Samuel B. Shlesinger,
Vice President & Secretary Chairman & Chief Executive Officer
R94-204
DISABILITY RIDER --
WAIVER OF MONTHLY DEDUCTIONS
In this rider, "we", "our" and "us" mean The Equitable of Colorado, Inc. "You"
and "your" mean the owner of the policy at the time an owner's right is
exercised.
- --------------------------------------------------------------------------------
THIS RIDER'S BENEFITS AND ITS COST. We will waive the monthly deductions from
the Policy Account as described in the policy, when we receive proof that total
disability of the insured person has existed continuously for at least six
months, as provided in this rider.
If total disability begins on or after the insured person's fifth birthday and
before the age 60 anniversary, we will waive all such deductions while total
disability continues.
If total disability begins at or after the age 60 anniversary, we will waive
only such deductions due to be made before the age 65 anniversary while total
disability continues.
In this rider, "age 60 anniversary" and "age 65 anniversary" mean the policy
anniversaries nearest the insured person's 60th and 65th birthdays,
respectively.
While such deductions are being waived:
1. Insurance under the policy and under any additional benefit riders will be
provided in accordance with their terms; and
2. You may not increase or decrease the Face Amount of Insurance; and
3. Except for the waiver of monthly deductions, your Policy Account will
continue to operate as if monthly deductions were not being waived.
Monthly deductions made from your Policy Account during total disability that
are later waived will be refunded as credits to your Policy Account as of the
dates they were subtracted. Such credits will be allocated to your value in the
unloaned portion of our Guaranteed Interest Division and to your values in the
investment divisions of our Separate Account on the basis of your monthly
deduction allocation percentages in effect on the date the deductions were made.
The value of your Policy Account will be determined as if such deductions had
never been made.
While this rider is in effect, its cost will be a part of the monthly deduction
from the Policy Account. The monthly cost is a percentage of the total monthly
deduction from the Policy Account, as described in the policy.
Such percentage will be determined by us from time to time, based on the insured
person's sex, attained age and rating class. It will never be more than the
percentage shown in the Table of Guaranteed Maximum Rates For Disability Waiver
of Monthly Deductions on Page 4 -- Continued of the policy. Any change in the
cost of insurance percentage we use for this benefit will apply to all
individuals of the same class as the insured person.
WHAT IS TOTAL DISABILITY? Total disability means the insured person's complete
inability, because of bodily injury or disease, to perform all of the
substantial and material duties of his or her regular occupation. However, after
24 consecutive months of such disability, total disability will mean the insured
person's complete inability to engage in any gainful occupation for which he or
she is reasonably fitted by education, training, or experience.
We will also recognize the complete and irrevocable loss of sight of both eyes,
or the use of both hands or both feet, or of one hand and one foot as total
disability. We will presume any such loss to be total disability even if the
insured person engages in any occupation.
WHAT IS NOT COVERED? We will not waive such monthly deductions:
1. For a total disability that begins before the insured person's fifth
birthday, or that begins while this rider is not in effect; or
2. If total disability results from:
a. Intentionally self-inflicted injury; or
b. Service in the armed forces of any country at war, including declared
and undeclared war and resistance to armed aggression.
YOU MUST GIVE US PROOF OF DISABILITY. Before we waive any monthly deductions, we
must be given written notice of claim, and proof that total disability of the
insured person has existed continuously for at least six months. This must be
done while total disability continues and while the insured person is still
living, or as soon as reasonably possible. If notice or proof is not given as
soon as reasonably possible, we will not refund as a credit monthly deductions
due more than one year prior to the date that proof is given to us.
R94-216 Disability Rider Waiver of Monthly Deductions (continued on back)
<PAGE>
We may require proof at reasonable intervals that total disability continues.
After total disability has continued for two years we will not require proof
more than once a year. We will not require proof after the age 65 anniversary if
monthly deductions have been waived for the five preceding years.
We may require examination of the insured person by our medical representatives
at our expense as part of any proof of total disability.
We will not waive monthly deductions if proof is not furnished as required.
WHEN THIS RIDER WILL TERMINATE. This rider will not be in effect:
1. At and after the age 65 anniversary; or
2. If the policy terminates.
You may terminate this rider by asking for this in writing. The effective date
of termination will be the beginning of the policy month which coincides with or
next follows the date we receive your request.
A claim based on total disability that begins before termination of this rider
will not be affected by the termination.
WHEN THIS RIDER IS INCONTESTABLE. This rider will become incontestable only
after it has been in effect, during the lifetime of the insured person and
without the occurrence of total disability of the insured person, for two years
from the later of: (a) the Date of Issue of the Policy; or (b) the date as of
which this rider becomes effective if added or restored after issue of the
policy.
HOW THIS RIDER RELATES TO THE POLICY. This rider is a part of the policy. Its
benefits are subject to all the terms of this rider and the policy.
THE EQUITABLE OF COLORADO, INC.
/s/ Linda Galasso /s/ Samuel B. Shlesinger
Linda Galasso, Samuel B. Shlesinger,
Vice President & Secretary Chairman & Chief Executive Officer
R94-216
TERM INSURANCE RIDER ON THE ADDITIONAL INSURED PERSON
In this rider, "we", "our" and "us" mean The Equitable of Colorado, Inc. "You"
means the owner of the policy at the time an owner's right is exercised.
- --------------------------------------------------------------------------------
THIS RIDER'S BENEFIT AND ITS COST. We will pay to the Beneficiary the amount of
term insurance in effect under this rider at the additional insured person's
death, when we receive proof that the additional insured person died before this
rider's Expiry Date. The Expiry Date is the policy anniversary nearest the
additional insured person's 70th birthday.
The Policy Information section of the policy or the rider that adds this benefit
shows the name of the additional insured person and the amount of term insurance
on the additional insured person. You may ask us to change the amount of term
insurance on the additional insured person subject to our rules then in effect.
We will send you a written notice showing each change. The notice is to be
attached to and made part of this rider and the policy. The information in it
will supersede the corresponding information in the Policy Information section
of the policy or the rider that adds this benefit. We may require you to return
the policy and this rider to us to make a change.
While this rider is in effect, its charge will be a part of the monthly
deduction from the Policy Account. The monthly rate for this benefit for each
$1,000 of term insurance in effect under this rider will be determined by us
from time to time. The rate is based on the additional insured person's sex,
attained age and rating class. It will never be more than the rate shown in the
Table of Guaranteed Maximum Rates For Term Insurance On The Additional Insured
Person on Page 4-continued of the policy. Any change in the cost of insurance
rates we use for this benefit will apply to all individuals of the same class as
the additional insured person.
THE BENEFICIARY FOR THIS BENEFIT. The term "Beneficiary" in this rider means
only the Beneficiary for the benefit payable at the additional insured person's
death. The term "beneficiary" in other provisions of the policy means only the
beneficiary for the benefits payable at the insured person's death.
You will be the Beneficiary for the benefit payable at the additional insured
person's death, unless another Beneficiary for it has been named in the
application or by any later change and is living at the additional insured
person's death.
While the additional insured person is living, you may change the Beneficiary by
written notice in a form satisfactory to us. The change will take effect on the
date you sign the notice, except that it will not apply to any payment we make
or other action we take before we receive the notice.
If two or more persons are named Beneficiary, those surviving the additional
insured person will share equally unless otherwise stated.
HOW YOU MAY EXCHANGE THIS RIDER FOR A NEW POLICY. While this rider is in effect
you may exchange it for a new policy on the life of the additional insured
person. You may do this at the beginning of any policy month that is on or
before the policy anniversary nearest the additional insured person's 62nd
birthday. We will not ask for evidence of insurability, except as stated below
for additional benefit riders.
The new policy will have an insurance amount equal to the amount of term
insurance in effect on this rider on the date of exchange. Or, you may choose a
lower amount allowed by our rules then in effect.
The Register Date of the new policy will be the date of exchange. Premiums for
the new policy will be based on our rates in effect on that date. They will be
for the additional insured person's then attained insurance age and for the same
class of risk as for this rider. You may choose that the new policy be on any
level premium plan of insurance for which it qualifies under our rules then in
effect as to plan, amount, age and class of risk.
You may ask that additional benefit riders be included in the new policy. The
issue of any rider will require our consent and evidence of the additional
insured person's insurability satisfactory to us.
The first premium for the new policy must be received by us on or within 31 days
before the date of exchange. We will tell you the amount of the first premium
for the new policy on request.
WHEN THIS RIDER WILL TERMINATE. This rider will not be in effect:
1. On and after its Expiry Date;
2. After the end of the grace period;
3. If this rider is exchanged for a new policy; or
R90-217 Term Insurance on the Additional Insured Person Rider
(continued on back)
<PAGE>
4. If the insurance under the policy terminates. (However, if this is because
the insured person died, the terms of the Survivor's Insurance Option and
Temporary Insurance Benefit shall apply.)
You may terminate this rider by asking for this in writing. The effective date
for termination will be the beginning of the policy month which coincides with
or next follows the date we receive your request.
HOW YOU MAY RESTORE THIS RIDER'S BENEFITS. If you restore the policy's benefits,
you may restore it with this rider in accordance with the section of the policy
entitled "Restoration of Policy Benefits." You must also provide evidence of the
additional insured person's insurability satisfactory to us.
WHAT IF AGE OR SEX HAS BEEN MISSTATED? If the additional insured person's age or
sex has been misstated on any application, we will adjust any death benefits of
this rider to reflect the correct age and sex.
SUICIDE EXCLUSION. If the additional insured person commits suicide, while sane
or insane, within two years after the later of: (a) the Date of Issue of the
policy; or (b) the date as of which this rider becomes effective if added after
issue of the policy, our liability under this rider will be limited to the
payment of a single sum equal to the monthly deductions made for it.
If the insured person commits suicide while this rider is in effect, the
Survivor's Insurance Option and Temporary Insurance Benefit will apply.
WHEN THIS RIDER IS INCONTESTABLE. We have the right to contest the validity of
this rider based on material misstatements made in the application for it.
However, this rider will become incontestable after it has been in effect during
the lifetime of the additional insured person for two years from the later of:
(a) the Date of Issue of the policy; or (b) the date as of which this rider
becomes effective if added after issue of the policy. All statements made in
such application are representations and not warranties.
HOW THIS RIDER RELATES TO THE POLICY. This rider is a part of the policy. Its
benefit is subject to all the terms of this rider and the policy.
This rider has no cash or loan value. It does not affect any reserve referred to
in the policy.
You may choose while the additional insured person is living that any amount to
be paid under this rider be applied for the benefit of the Beneficiary under the
payment options described in the section of the policy entitled "How Benefits
Are Paid." If you have not done this, the Beneficiary will have this right when
the additional insured person dies. If you change the Beneficiary, any previous
choice of payment options under this rider is cancelled. You may choose a
payment option for the new Beneficiary in accordance with such section of the
policy.
SURVIVOR'S INSURANCE OPTION AND TEMPORARY INSURANCE BENEFIT
If the insured person dies while this rider is in effect, the following option
and benefit are applicable subject to the Suicide Exclusion of this rider.
THE SURVIVOR'S INSURANCE OPTION. If the insured person dies before the policy
anniversary nearest the additional insured person's 62nd birthday, this rider
may be exchanged for a new policy on the life of the additional insured person
in accordance with the exchange provision of this rider. The exchange must be
made within 90 days after the insured person's death. This may be done by you
or, if you are not living, by the additional insured person. The new policy will
take effect and have an Register Date on the 90th day after the insured person's
death. All other terms and conditions of the exchange provision shall apply.
THE SURVIVOR'S TEMPORARY INSURANCE BENEFIT. If the additional insured person
dies before the 90th day after the insured person's death, we will pay to the
Beneficiary the amount of term insurance in effect under this rider on the
additional insured person at the insured person's death. The payment will be
made subject to the terms of this rider, including our receiving proof that the
additional insured person died before that 90th day. We will pay any benefit for
which there is no stated Beneficiary living at the death of the additional
insured person to the children of the additional insured person who then
survive, in equal shares. If none survive, we will pay the estate of the
additional insured person.
THE EQUITABLE OF COLORADO, INC.
/s/ Linda Galasso /s/ Samuel B. Shlesinger
Linda Galasso, Samuel B. Shlesinger,
Vice President Chairman & Chief Executive
& Secretary Officer
R90-217
CHILDREN'S TERM In this rider, "we", "our" and "us"
INSURANCE RIDER mean The Equitable of Colorado, Inc.
"You" and "your" mean the owner of
the policy at the time an owner's
right is exercised.
- --------------------------------------------------------------------------------
THIS RIDER'S BENEFIT AND ITS COST. We will pay to the Beneficiary the amount of
term insurance in effect on an insured child under this rider, upon receiving
proof that the child died on or before the earlier of: (a) the child's 25th
birthday; or (b) the Expiry Date of this rider, which is the policy anniversary
nearest the insured person's 65th birthday or any earlier termination of the
insurance under the policy.
The amount of term insurance on each insured child is $1,000 for each unit of
coverage.
The Policy Information section of the policy or the rider that adds this benefit
shows the number of units of coverage.
While this rider is in effect, its charge will be a part of the monthly
deduction from the Policy Account. The maximum monthly charge for this benefit
is shown in the Table of Maximum Monthly Charges For Benefits on Page 4 of this
policy.
INSURED CHILD. An insured child under this rider is any child at least 15 days
old who is:
o a child, stepchild, or legally adopted child of the insured person, who is
named for coverage in the application for this rider and had not reached
his or her 18th birthday on the date of application; or
o a child born to the insured person after the date of the application for
this rider; or
o a child legally adopted by the insured person after the date of the
application for this rider but before the child's 18th birthday.
BENEFICIARY FOR THIS BENEFIT. The term "Beneficiary" in this rider means only
the Beneficiary for the benefit payable at the death of an insured child.
The Beneficiary for the benefit payable at the death of an insured child will be
tht insured person, if living; if not living, the surviving children of the
insured person, unless another Beneficiary for this benefit has been named in
the application (or by any later change) and is living at the death of that
child. If no Beneficiary under this arrangement is living at an insured child's
death, the benefit will be paid to that child's estate.
"Surviving children of the insured person" as used in this rider means: (1)
surviving children (including legally adopted children) of the insured person,
whether or not insured under this rider; and (2) surviving stepchildren who are
or have been insured under this rider. If there are two or more surviving
children of the insured person, they will share equally.
You may change the Beneficiary for insurance on an insured child while that
child is living by written notice in a form satisfactory to us. The change will
take effect on the date you sign the notice, except that it will not apply to
any payment we make or other action we take before we receive the notice.
PAID-UP INSURANCE. If the insured person dies while this rider is in effect, we
will issue a paid-up term insurance policy on the life of each surviving insured
child then insured under this rider, subject to the Suicide Exclusion of this
rider. The policy will provide the same term insurance benefits as this rider.
Unless otherwise stated in the application or later changed: (1) the owner of
the policy will be the insured child; and (2) the beneficiary of the policy will
be the surviving children of the insured person.
CONVERSION PRIVILEGE. While this rider is in effect, you may convert term
insurance on an insured child to a new policy on the life of that child. You may
do this as of the day following the earlier of: (a) the child's 25th birthday;
or (b) the Expiry Date of this rider. We will not ask for evidence of
insurability, except as stated herein for additional benefit riders.
The new policy will have an insurance amount equal to the amount of term
insurance on the child. Or, if the conversion date is determined by (a) of the
paragraph above, you may choose that the insurance amount be up to five times
the amount of term insurance on the child. Or, you may choose a lower amount
allowed by our rules in effect on the conversion date.
The Register Date of the new policy will be the conversion date. Premiums for
the new policy will be based on our rates in effect on that date. They will be
for the insured child's then attained insurance age. You may choose that the new
policy be on any permanent plan of insurance for which it qualifies under our
rules then in effect as to plan, amount, age and class of risk.
You may ask that additional benefit riders be included in the new policy. The
issue of any rider will require our consent and evidence of the insured child's
insurability satisfactory to us.
The first premium for the new policy must be received by us on or within 31 days
before the conversion date. We will tell you the amount of the first premium for
the new policy on request.
R94-218 Children's Term Insurance Rider (continued on back)
<PAGE>
WHEN THIS RIDER WILL TERMINATE. This rider will not be in effect:
1. On and after its Expiry Date;
2. If the insurance under this rider is replaced by paid-up insurance; or
3. If the policy terminates.
You may terminate this rider by asking for this in writing. The effective date
of termination will be the beginning of the policy month which coincides with or
next follows the date we receive your request.
HOW YOU MAY RESTORE THIS RIDER'S BENEFIT. If you restore the policy's benefit,
you may restore it with this rider in accordance with the section of the policy
entitled "Restoration of Policy Benefits." You must also provide evidence
satisfactory to us of the insurability of each child who will be insured under
this restored rider. No benefit will be payable for any insured child who died
betweeen the end of the grace period and the date of restoration of rider
benefits.
SUICIDE EXCLUSION. If the insured person commits suicide, while sane or insane,
within two years after the later of: (a) the Date of Issue of the policy; or (b)
the date as of which this rider becomes effective if added or restored after
issue of the policy, our liability under this rider will be limited to the
payment of a single sum equal to the monthly deductions made for it.
However, the expiring term insurance on each insured child covered by this rider
may be converted to a new policy with an insurance amount equal to such term
insurance, in accordance with the Conversion Privilege of this rider. This
conversion may be made within 31 days after the insured person dies.
WHEN THIS RIDER IS INCONTESTABLE. We have the right to contest the validity of
this rider based on material misstatements made in the application for it.
However, the insurance as to each insured child included for coverage in the
application for this rider will become incontestable after it has been in effect
during the lifetime of that child for two years from the later of: (a) the Date
of Issue of the policy; or (b) the date as of which this rider becomes effective
if added or restored after issue of the policy. All statements made in such
application are representations and not warranties.
HOW THIS RIDER RELATES TO THE POLICY. This rider is a part of the policy. Its
benefits are subject to all the terms of this rider and the policy.
You may choose while an insured child is living that any amount to be paid under
this rider at that child's death be applied for the benefit of the Beneficiary
in accordance with the payment options described in the section of the policy
entitled "How Benefits Are Paid." If you have not done this, the Beneficiary
will have this right upon the death of the insured child. If you change the
Beneficiary, any previous choice of payment options under this rider is
cancelled. You may choose a payment option for the new Beneficary in accordance
with such section of the policy.
THE EQUITABLE OF COLORADO, INC.
/s/ Linda Galasso /s/ Samuel B. Shlesinger
Linda Galasso, Samuel B. Shlesinger,
Vice President Chairman & Chief Executive
& Secretary Officer
R94-218
ACCIDENTAL In this rider, "we", "our" and "us"
DEATH BENEFIT mean The Equitable of Colorado, Inc.
RIDER "You" means the owner of the policy
at the time an owner's right is
exercised.
- --------------------------------------------------------------------------------
THIS RIDER'S BENEFIT. We will pay the Accidental Death Benefit of this rider to
the beneficiary when we receive proof that the insured person's death resulted
from accidental bodily injury, directly and independently of all other causes,
and that death occurred:
1. Within 120 days after the injury and while this rider was in effect; and
2. After the insured person's first birthday and before the policy anniversary
nearest the insured person's 70th birthday.
THE AMOUNT OF THE BENEFIT AND ITS COST. The Policy Information section of the
policy or the rider that adds this benefit shows the amount of the Accidental
Death Benefit.
While this rider is in effect, its charge will be a part of the monthly
deduction from the Policy Account. The maximum monthly charge for this benefit
is shown in the Table of Maximum Monthly Charges for Benefits on Page 4 of the
policy.
WHAT IS NOT COVERED? No Accidental Death Benefit will be paid if the insured
person's death is caused or contributed to by:
1. Any disease or illness of any kind, physical or mental infirmity, or
medical or surgical treatment of these;
2. Suicide, while sane or insane;
3. Any drug, unless taken as prescribed by a physician;
4. Poison, gas or fumes voluntarily or involuntarily taken, administered or
inhaled, except from an occupational accident;
5. Travel in or descent from any aircraft, while the insured person is
receiving training or acting in any capacity other than a passenger; or
6. Declared or undeclared war, or any act incident to war, or any conflict
involving the armed forces of one or more countries.
We will have the right to require an autopsy at our expense unless prohibited by
law.
WHEN THIS RIDER WILL TERMINATE. This rider will not be in effect:
1. On and after the policy anniversary nearest the insured person's 70th
birthday; or
2. If the policy is terminated.
You may terminate this rider by asking for this in writing. The effective date
of termination will be the beginning of the policy month which coincides or next
follows the date we receive your request.
WHEN THIS RIDER IS INCONTESTABLE. This rider will become incontestable only
after it has been in effect, during the lifetime of the insured person, for two
years from the later of: (a) the Date of Issue of the policy; (b) the date as of
which this rider becomes effective if added or restored after issue of the
policy.
HOW THIS RIDER RELATES TO THE POLICY. This rider is a part of the policy. Its
benefit is subject to all the terms of this rider and the policy.
The Equitable of Colorado Inc,
/s/ Linda Galasso /s/ Samuel B. Shlesinger
Linda Galasso, Samuel B. Shlesinger,
Vice President Chairman & Chief Executive
& Secretary Officer
R94-219 Accidental Death Benefit Rider
ACCELERATED DEATH BENEFIT RIDER
DISCLOSURE. THE RECEIPT OF THE ACCELERATED DEATH BENEFIT AMOUNT MAY BE TAXABLE.
YOU SHOULD SEEK ASSISTANCE FROM YOUR PERSONAL TAX ADVISOR PRIOR TO ELECTING THE
BENEFIT.
In this rider "we", "our" and "us" mean The Equitable of Colorado, Inc. "You"
means the Owner of the policy at the time an Owner's right is exercised. "This
Policy" means the policy to which this rider is attached.
POLICY NUMBER:
- --------------------------------------------------------------------------------
THIS RIDER'S BENEFIT. We will pay an accelerated death benefit in the amount
requested by the Owner, if the Insured is terminally ill, subject to the
provisions of this rider. We will pay an accelerated death benefit under this
policy only once and in one lump sum.
The maximum accelerated death benefit you may receive is the lesser of:
1. 75% of the death benefit payable under this policy, less any policy
loan and loan interest, and
2. $500,000.
The maximum aggregate amount of Accelerated Death Benefit payments that will be
paid under all policies issued by us on the life of the Insured is $500,000.
For purposes of this benefit, the death benefit does not include any accidental
death benefits, non-convertible term riders or convertible term riders not in
their conversion period or any benefits payable because of the death of any
person other than the Insured.
There is no premium or cost of insurance charge for this rider.
We reserve the right to deduct a processing charge of up to $250.00 per policy
from the accelerated death benefit payment.
We reserve the right to set a minimum of $5,000 on the amount you may receive
under this rider.
To be eligible for this benefit you must provide satisfactory evidence to us
that the Insured's life expectancy is six months or less. This evidence must
include, but is not limited to, certification by a physician licensed to
practice medicine in the United States or Canada and who is acting within the
scope of such license. A physician does not include the Owner, the Insured or a
member of either's family.
HOW THIS RIDER RELATES TO THE POLICY. This rider is a part of the policy. Its
benefits are subject to all the terms of this rider and the policy. This rider
has no cash or loan value. This rider is non-participating.
INTEREST. Interest will be charged on the amount of the Accelerated Death
Benefit and on any unpaid premium we advance after the payment of an Accelerated
Death Benefit. The interest rate at the time the Accelerated Death Benefit
payment is made will not exceed the greater of the following on such date:
1. the yield on a 90-day treasury bill; or
2. the maximum adjustable policy loan interest rate permitted in the
state in which this policy is delivered.
EFFECT OF ACCELERATED DEATH BENEFIT PAYMENT ON THE POLICY. The Accelerated Death
Benefit payment, plus any accrued interest will be treated as a lien against the
policy values. The amount of the lien will be pro-rated against the policy's net
cash surrender value, if any, and the net amount at risk. (The net amount at
risk is defined as the death benefit of the policy minus the cash surrender
value, if any.)
For variable life policies, the portion of the cash surrender value that is on
lien and is allocated to investment divisions of the Separate Account will be
transferred to and maintained as a part of the unloaned Guaranteed Investment
Division (GID). You may tell us how much of the accelerated payment is to be
transferred from each investment division. Units will be redeemed from each
investment division sufficient to cover the amount that is on lien and
transferred to the unloaned portion of the GID. If you do not tell us how to
allocate the payment, we will allocate it based on our rules then in effect. For
variable life policies that do not have a GID, the portion of the cash surrender
value that is on lien will be transferred to and maintained in the Money Market
Division of our Separate Account. Such transfers will occur as of the date we
approve an Accelerated Death Benefit payment. The amount payable at death under
the policy will be reduced by the full amount of the lien and any other
indebtedness outstanding under the policy. The Owner's access to the policy's
cash surrender value will be limited to the excess of the policy's cash
surrender value over the amount of the lien secured against the cash surrender
value and any other outstanding policy loans and loan interest.
R94-102 Accelerated Death Benefit Rider
<PAGE>
If premiums are required to be paid under the policy, they will continue to be
due after the payment of the accelerated payment. If any premium is not paid
when due, the amount of the unpaid premium will be added to the lien.
If the policy is a flexible premium life policy, and the net cash surrender
value is not large enough to cover a monthly deduction, Equitable Variable will
advance a premium sufficient enough to keep the policy in force for up to six
months following the date we approve an Accelerated Death Benefit payment. This
premium advance will be added to the lien.
If a Disability Premium Waiver Rider is in effect under the policy, this
policy's premiums or monthly deductions will be waived as of the date we approve
an Accelerated Death Benefit payment.
RIDER LIMITATIONS. Your right to be paid under the Accelerated Death Benefit
Rider is subject to the following conditions:
1. The policy must be in force other than as extended term insurance.
2. For term insurance policies, there must be at least one year left
before the final term expiry date.
3. For adjustable life policies (Equitable Life Account), if policy is
term insurance or paid-up extended term insurance, there must be at
least one year left before the final term expiry date.
4. You must make a claim in writing in a form that is satisfactory to us.
5. If the policy is collaterally assigned, except to us as security for a
policy loan or an Accelerated Death Benefit lien, we must receive a
full release of this assignment for the election of this benefit.
6. An Accelerated Death Benefit payment must be approved in writing by
any irrevocable beneficiary.
7. For joint last to die policies, a claim may be made under the rider
only after the death of the first of the Insureds to die.
8. You may not be eligible for the Accelerated Death Benefit if we are
notified that:
a) you are required by law to elect this rider's benefit in order to
meet the claims of creditors, whether in bankruptcy or otherwise;
or
b) you are required by a government agency to elect this rider's
benefit in order to apply for, obtain, or keep a government
benefit or entitlement.
9. You may request only one Accelerated Death Benefit Amount to be paid
per policy.
10. We may require examination of the Insured by our medical
representatives at our expense as part of any proof to establish
eligibility for benefits under this rider.
WHEN THIS RIDER WILL TERMINATE. You may terminate this rider by asking us in
writing in a form satisfactory to us and by sending the rider to our
Administrative Office. The effective date of the termination will be the
beginning of the policy month which coincides with or next follows the date we
receive your request. Once this rider has been terminated, another Accelerated
Death Benefit Rider cannot be attached to the policy.
This rider will terminate when the policy terminates. If at any time the amount
of the lien equals the total death benefit the policy will terminate.
Termination will occur 31 days after we have mailed notice to the last known
address of the Owner, unless the full amount of the lien is repaid within 31
days of the notice.
THE EQUITABLE OF COLORADO, INC.
/s/ Linda Galasso /s/ Samuel B. Shlesinger
Linda Galasso Samuel B. Shlesinger
Vice President & Secretary Chairman & Chief Executive Officer
R94-102 Accelerated Death Benefit Rider
COST OF LIVING RIDER In this rider "we," "our" and "us"
mean The Equitable of Colorado, Inc.
"You" and "your" mean the owner of
the policy at the time an owner's
right is exercised.
- --------------------------------------------------------------------------------
We will automatically increase the face amount of insurance under the policy
from time to time to reflect increases in the cost of living, which we will
measure by increases in the Consumer Price Index (CPI). We will not require
evidence of the insured person's insurability for these increases, but the
increases will be subject to the terms of this rider.
WHEN INCREASES GO INTO EFFECT. Increases are regularly scheduled to go into
effect on every third anniversary of the effective date of this rider.
The effective date of this rider is the Register Date of the policy or, if it is
added after the policy is issued, the policy anniversary on or next following
the Date of Issue of this rider. If this rider terminates and is later restored,
the new effective date of this rider for the purpose of determining future
increases is the policy anniversary on or next following the date of
restoration.
THE INDEX WE USE TO DETERMINE THE INCREASES. We will determine an increase in
the cost of living by using the Consumer Price Index (for all urban households)
published by the United States Department of Labor. We have the right to choose
what we believe to be an appropriate standard as a substitute for the CPI if:
(a) any alteration of the composition, base, or method of computation of the CPI
is introduced which, in our opinion, makes it inappropriate for this rider; or
(b) publication of the CPI is discontinued or delayed.
HOW THE AMOUNT OF THE INCREASE IS CALCULATED. We figure the increased face
amount of insurance by applying the following ratio to the face amount of
insurance just before we increase it:
CPI for the month that is 6 months before the current cost of
living increase is scheduled to go into effect.
CPI Ratio = -----------------------------------------------------------------
CPI for the month that is 6 months before the last cost of living
increase was made under this rider, or before the effective date
of this rider in the case of the first increase.
The increase in amount is equal to the increased face amount of insurance minus
the face amount of insurance just before the increase.
If an increase would otherwise be effective and the formula produces no
increase, we will not make any change in the face amount of insurance at that
time. This will have no effect on the timing of future increases.
THIS RIDER'S COST. While this rider is in effect, its charge will be part of the
monthly deduction from the Policy Account. The maximum monthly charge for this
benefit is shown in the Table of Maximum Monthly Charges For Benefits on Page 4
of the policy.
HOW YOU WILL BE NOTIFIED OF AN INCREASE. We will notify you in writing of an
increase in the face amount of insurance before the increase is scheduled to go
into effect.
The increase will be made in accordance with the section on Changing the Face
Amount of Insurance described in the policy.
We will reflect any change in face amount and surrender charges by issuing a new
Policy Information section of the policy.
Subject to the terms of this rider, we will automatically increase the face
amount of insurance when a cost of living increase is to be effective under this
rider if we are then waiving deductions in accordance with a disability rider to
the policy.
THE LIMITATIONS ON INCREASES. We will make an increase in the face amount of
insurance only if this rider is in effect.
In no event will any one cost of living increase be more than 50% of the face
amount of insurance or $150,000, whichever is smaller.
The total of all cost of living increases under this rider cannot exceed two
times the sum of the face amount of insurance at issue, or the face amount of
insurance inforce on the effective date of the rider if the rider is added after
issue, and any underwritten increases since that time.
R96-101 Cost of Living Rider (continued on back)
<PAGE>
WHEN THIS RIDER WILL TERMINATE. This rider will terminate:
1. if you ask us to terminate the rider in writing; or
2. if you decline an automatic increase in writing during the period in which
you have the right to examine the increase; or
3. if the policy terminates; or
4. following the increase at attained age 58, 59 or 60; or
5. when the maximum increase limit has been reached.
The effective date of termination for both Item 1 and Item 2 above will be the
beginning of the policy month which coincides with or next follows the date we
receive your request.
If this rider terminates due to any of the first two of these reasons, you may
restore it while the policy is not lapsed. This will be subject to our consent
and satisfactory evidence of insurability provided to us. If the policy
terminates, the rider may be restored with the policy in accordance with the
policy's restoration provision. However, this rider may not be restored after
the policy anniversary nearest the insured person's 57th birthday.
HOW THIS RIDER RELATES TO THE POLICY. This rider is a part of the policy. Its
benefits are subject to all the terms of this rider and the policy.
However, if this rider is added after the policy is issued the time periods
referred to in the "Incontestability" and "Suicide Exclusion" provisions of the
policy will be measured as to this rider from the date it becomes effective.
THE EQUITABLE OF COLORADO, INC.
/s/ Linda Galasso /s/ Samuel B. Shlesinger
--------------- ---------------------
Linda Galasso Samuel B. Shlesinger
Vice President and Chairman and
Secretary Chief Executive Office
R96-101
SUBSTITUTION OF
INSURED
RIDER
In this rider, "we", "our" and "us" mean The Equitable of Colorado, Inc. "You"
means the Owner of the policy at the time an Owner's right is exercised.
- --------------------------------------------------------------------------------
After the second policy year you may substitute coverage on the life of a new
insured person for coverage on the life of the original insured person, subject
to conditions we determine. The conditions include but are not limited to the
following:
1. We must be satisfied that the new insured person is insurable for the
amount of insurance applied for.
2. The new insured person must join in the request for substitution and the
owner of the policy must have an insurable interest in the new insured
person. If the policy is assigned, the assignee must consent to the
substitution of coverage.
3. The substitution may be made as of the beginning of any policy month if the
new insured person is not then over age 65.
4. The new insured person's date of birth must not be later than the Register
Date of the policy.
5. This policy must be in effect on the date of substitution with all monthly
deductions from the Policy Account having been made, and with no such
deductions or premiums then being waived nor amounts credited to the Policy
Account by a disability rider.
6. Within 31 days before the date of substitution, we must receive: (a)
written request for the substitution on our application form; (b) evidence
of the new insured person's insurability satisfactory to us; and (c) any
extra sum we may require.
7. Insurance on the original insured person will cease when insurance on the
new insured person takes effect.
8. Any additional benefit riders in effect under the policy will terminate at
the time of substitution of insureds. You may apply for any of them as to
the new insured person. The issue of such riders will require our consent
and evidence of insurability satisfactory to us.
9. In our determination the substitution must not affect the qualification of
this policy as life insurance under the Internal Revenue Code or successor
legislation, as interpreted by us.
EFFECTS OF SUBSTITUTION. Premiums for the policy will be based on our rules in
effect on its Register Date for the insurance age of the new insured person on
that date. The Register Date for the policy will not be affected by the
substitution of insureds. The face amount of insurance and the death benefit
option in the policy will be the same as in effect immediately before the
substitution, unless either (i) you ask for a change or (ii) a change is
required in order to continue the qualification of the policy as life insurance
under the Internal Revenue Code or successor legislation.
We reserve the right to charge an administrative fee of $100 for the
substitution. This fee will be deducted from the policy account.
The substitution of a new insured person for the original insured person shall
not preclude additional later substitutions of insureds, in which case reference
to the "original insured person" shall include such substituted insureds as the
context requires.
The time periods in the Incontestability and Suicide Exclusion provisions of
this policy will begin on the date of substitution.
HOW THIS RIDER RELATES TO THE POLICY. This rider is a part of the policy. Its
benefits are subject to all the terms of this rider and the policy.
THE EQUITABLE OF COLORADO, INC.
/s/ Linda Galasso /s/ Samuel B. Shlesinger
Linda Galasso, Samuel B. Shlesinger,
Vice President & Secretary Chairman & Chief Executive Officer
R94-212 Substitution of Insured Rider
[EQUITABLE LOGO]
I, Linda Galasso, Secretary of THE EQUITABLE OF COLORADO, INC., do hereby
certify that:
attached hereto marked "EXHIBIT B" is a full, true and
correct copy of the Charter of The Equitable of Colorado,
Inc., with amendments to date.
IN WITNESS WHEREOF, I have hereunto affixed my
signature and Seal of THE EQUITABLE OF COLORADO, INC.,
[SEAL]
this 10th day of February, 1999.
/s/ Linda Galasso
Linda Galasso
<PAGE>
EX-99.1A6a
EXHIBIT "B"
(illegible text)
FILED
JAN 18 1984
553857
STATE OF COLORADO
DEPARTMENT OF STATE
ARTICLES OF INCORPORATION
OF
THE EQUITABLE LIFE ASSURANCE SOCIETY OF COLORADO INC.
I, the undersigned natural person of the age of eighteen years or
more, acting as incorporator of a corporation under the Colorado Corporation
Act, adopt the following Articles of Incorporation for such corporation:
1. The name of the corporation is Equitable Life Assurance Society of
Colorado Inc.
2. The corporation shall have a perpetual duration.
3. The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the Insurance Laws of
Colorado.
4. The corporation shall have authority to issue a total of 1,000,000
shares of common stock of the par value of $1.00, which shall be non-assessable.
5. The stockholders of the corporation shall have no pre-emptive
rights.
6. The address of the corporation's registered office and principal
office in the state of Colorado is 111 South Cascade, Colorado Springs, County
of El Paso. The name of its registered agent at such address is Gerald H.
Bruning.
7. The initial Board of Directors will be comprised of seven
Directors. Their names and addresses are:
Franklin Maisano - 1285 Avenue of the Americas
New York, New York 10019
Donald J. Mooney - 1285 Avenue of the Americas
New York, New York 10019
Peter J. Moran - 1285 Avenue of the Americas
New York, New York 10019
Thomas J. Roach - 1285 Avenue of the Americas
New York, New York 10019
Melvin Stein - 1285 Avenue of the Americas
New York, New York 10019
APPROVED FOR FILING
INSURANCE DIVISION
1/16/84
- -----------------------------
DATE
/s/ (signature illegible)
- -----------------------------
BY
COMPUTER UPDATE COMPLETE
<PAGE>
Richard M. Stenson - 1285 Avenue of the Americas
New York, New York 10019
Irwin T. Vanderhoof - 1285 Avenue of the Americas
New York, New York 10019
8. The business and affairs of the corporation shall be managed by the
Board of Directors. The stockholders and the Board of Directors shall each have
the power to make, alter or repeal the by-laws of the corporation.
9. The corporation shall indemnify to the fullest extent permitted by
Section 7-3-101 of the Colorado Corporation Code as amended from time to time
each person who is or was a director or officer of the corporation and the
heirs, executors and administrators of such a person.
10. The name of the sole incorporator is William Schor, and his
mailing address is 1285 Avenue of the Americas, New York, New York 10019.
/s/ William Schor
---------------------------------------
William Schor
Incorporator
STATE OF NEW YORK )
) SS.
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this 11th day of January
1984, by William Schor.
In witness whereof I have hereunto set my hand and seal.
My commission expires .
-------------------------
/s/ Eleanor P. Weber
---------------------------------------
Notary Public
[SEAL]
ELEANOR P. WEBER
NOTARY PUBLIC, STATE OF NEW YORK
NO. 41-(ILLEGIBLE)
QUALIFIED IN QUEENS COUNTY
(ILLEGIBLE)
---------------------------------------
Address
3287I
<PAGE>
IC0553857
RECEIVED 3-15-84
MAR 1 (illegible) David (illegible)
(illegible) A+C
STATE OF COLORADO
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
EQUITABLE LIFE ASSURANCE SOCIETY OF COLORADO INC.
-------------------------------------------------
Pursuant to the provisions of the Colorado Corporation Act, the undersigned
corporation adopts the following Articles of Amendment to its Articles of
Incorporation:
FIRST: The name of the corporation is Equitable Life Assurance Society
------------------------------------
of Colorado Inc.
---------------------------------------------------------------------------
SECOND: The following amendment to the Articles of Incorporation was
adopted by the directors of the corporation on March 2, 1984 in the
---------------------
manner prescribed by the Colorado Corporation Act:
(Insert Attachment)
Paragraph 4 of the Corporation's Articles of Incorporation is amended as
follows:
The par value of the shares of common stock that the
Corporation is authorized to issue is increased from $1.00
to $2.00.
APPROVED FOR FILING FILED
INSURANCE DIVISION COLO. DEPT. OF STATE
562527 (ILLEGIBLE)19
- -----------------------------
DATE
/s/ (signature illegible)
- -----------------------------
BY
COMPUTER UPDATE COMPLETE
AR
(illegible text)
-1-
<PAGE>
ARTICLES OF AMENDMENT - Continued
THIRD: The number of shares of the corporation outstanding at the time of
such adoption was 0. No shares have been issued; and the number of shares
------------------------------
entitled to vote thereon was 0 .
--------
FOURTH: The designation and number of outstanding shares of each claim
entitled to vote thereon as a class were as follows:
Number of
Class Shares
--------- ---------
(Note 1)
None
FIFTH: The number of shares voted for such amendment was 0 ; and
------------
the number of shares voted against such amendment was 0 .
-------------
SIXTH: The number of shares of each class entitled to vote thereon as a
class voted for and against such amendment, respectively, was:
Number of Shares Voted
--------------------------
Class For Against
--------- ----- ---------
(Note 1)
None
SEVENTH: The manner, if not set forth in such amendment, in which any
exchange, reclassification, or cancellation of issued shares provided for in the
amendment shall be effected, is as follows: (Note 2)
No change
EIGHTH: The manner in which such amendment effects a change in the amount
of stated capital, and the amount of stated capital as changed by such
amendment, are as follows: (Note 2)
Since none of the Corporation's shares has been issued, the amendment does
not effect a change on stated capital.
Dated March 2 1984
----------------------- --
Equitable Life Assurance Society
of Colorado Inc. (Note 3)
---------------------------
By /s/ Melvin Stein )
------------------------)
Its Vice President )
-------------- )(Note 4)
Melvin Stein )
and /s/ Kevin Keefe )
-----------------------)
Its Secretary, Kevin Keefe
STATE OF NEW YORK )
----------------------)
) ss.
County of New York )
---------------------)
Before me, Joan B. Mastrowski, a Notary Public in and for the said County
--------------------
and State, personally appeared Kevin Keefe who acknowledged before me that he
----------------
is the Secretary of Equitable Life Assurance Society of Colorado, Inc.
-------------- ----------------------------------------------------------
a Colorado corporation and that he signed the foregoing Articles of Amendment as
his free and voluntary act and deed for the uses and purposes thereto set forth.
In witness whereof I have hereunto set my hand and seal this 2nd day of
-----
March , A.D. 19 84
- ------ ---
My commission expires (illegible)
-------------
/s/ Joan B. Mastrowski
---------------------------------------
Notary Public
(illegible text)
Notes: 1. If inapplicable, insert "None."
2. If inapplicable, insert "No change."
3. Exact corporate name of the corporation adopting the
Articles of Amendment
4. Signatures and titles of officers signing for the corporation.
(COLO. - 635)
-2-
<PAGE>
CHANGE OF NAME (illegible text)
FILED
COLO. DEPT. OF STATE
579257 (illegible) 10
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
SEC 553857
Equitable Life Assurance Society of Colorado Inc.
-------------------------------------------------
Pursuant to the provisions of the Colorado Corporation Act, the undersigned
corporation adopts the following Articles of Amendment to its Articles of
Incorporation:
FIRST: The name of the corporation is Equitable Life Assurance Society
--------------------------------
of Colorado Inc.
---------------------------------------------------------------------------
SECOND: The following amendment of the Articles of Incorporation was
adopted by the shareholders of the corporation on June 14, 1984 in the
---------------------
manner prescribed by the Colorado Corporation Act:
(Insert Attachment)
Paragraph 1 of the Corporation's Articles of Incorporation is amended
as follows:
The name of the corporation is changed to The Equitable of Colorado,
Inc.
APPROVED FOR FILING
INSURANCE DIVISION
6/27/84
- -----------------------------
DATE
/s/ (signature illegible)
- -----------------------------
BY
COMPUTER UPDATE COMPLETE
AB
(illegible text)
(COLO. - illegible)
-1-
<PAGE>
ARTICLES OF AMENDMENT - Continued
THIRD: The number of shares of the corporation outstanding at the time of
such adoption was 750,000 ; and the number of shares entitled
-------------------------
to vote thereon was 750,000.
-------
FOURTH: The designation and number of outstanding shares of each class
entitled to vote thereon as a class were as follows:
Number of
Class Shares
--------- ---------
(Note 1)
None
FIFTH: The number of shares voted for such amendment was 750,000 ; and
------------
the number of shares voted against such amendment was 0
-------------.
SIXTH: The number of shares of each class entitled to vote thereon as a
class voted for and against such amendment, respectively, was:
Number of Shares Voted
--------------------------
Class For Against
--------- ----- ---------
(Note 1)
None
SEVENTH: The manner, if not set forth in such amendment, in which any
exchange, reclassification, or cancellation of issued shares provided for in the
amendment shall be effected, is as follows: (Note 2)
The corporation will cancel its issued shares and reissue shares
containing the new corporate name.
EIGHTH: The manner in which such amendment effects a change in the amount
of stated capital, and the amount of stated capital as changed by such
amendment, are as follows: (Note 3)
no change
Dated June 14 1984
----------------------- --
Equitable Life Assurance
Society of Colorado Inc. (Note 3)
---------------------------
By /s/ Donald J. Mooney )
------------------------)
Its President )
-------------- )(Note 4)
)
and /s/ Kevin Keefe )
-----------------------)
Its Secretary
--------
STATE OF New York )
----------------------)
) ss.
County of New York )
---------------------)
Before me, Joan B. Mastrowski, a Notary Public in and for the said County
-----------------------
and State, personally appeared Donald J. Mooney who acknowledged before me that
----------------
he is the President of Equitable Life Assurance Society of Colorado, Inc.
-------------- ----------------------------------------------------------
a Colorado corporation and that he signed the foregoing Articles of Amendment as
his free and voluntary act and deed for the uses and purposes thereto set forth.
In witness whereof I have hereunto set my hand and seal this 14th day of
----
June, A.D. 1984.
- ---- --
JOAN B. MASTROWSKI
NOTARY PUBLIC, STATE OF NEW YORK
(illegible)
My commission expires
-------------
/S/ Joan B. Mastrowski
---------------------------------------
Notary Public
Notes: 1. If inapplicable, insert "None."
2. If inapplicable, insert "No change."
3. Exact corporate name of the corporation adopting the
Articles of Amendment.
4. Signatures and titles of officers signing for the corporation.
(COLO. - 635)
-2-
<PAGE>
SC Form D-4 (Rev.) for office use only
Submit in Duplicate
Filing Fee: $30.00
This document must be typewritten
MAIL TO:
Colorado Secretary of State
Corporations Office
1560 Broadway, Suite 200
Denver, Colorado 08202
(323) 866-2361
(illegible signature)
DATE: 6-5-91
----------------
ARTICLES OF AMENDMENT
to the
ARTICLES OF INCORPORATION
IC 871553857
Pursuant to the provisions of the Colorado Corporation Code, the
undersigned corporation adopts the following Articles of Amendments to its
Articles of Incorporation:
FIRST: The name of the corporation is (note 1) The Equitable of Colorado,
-----------------------------
Inc. NCGS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECOND: The following amendment to the Articles of Incorporation was
adopted on May 13, 1991, as prescribed by the Colorado Corporation Code, in
-------- --
the manner marked with an X below:
Such amendment was adopted by the board of directors where no shares
---- have been issued.
X Such amendment was adopted by a vote of the shareholders. The number
---- of shares voted for the amendment was sufficient for approval.
"RESOLVED, That an amendment of the Articles of Incorporation be
made to change the address of the Home Office of the "Corporation"
from 111 South Cascade, Colorado Springs, CO 80903 to 370 17th Street,
Suite 4950, Denver, CO 80202."
APPROVED FOR FILING
INSURANCE DIVISION
6/24/91
- -----------------------------
DATE
/s/ (signature illegible)
- -----------------------------
BY
COMPUTER UPDATE COMPLETE
MRA
THIRD: The manner, if not set forth in such amendment, in which any
exchange, reclassification, or cancellation of issued shares provided for in the
amendment shall be effected, is as follows: N/A
FOURTH: The manner in which such amendment effects a change in the amount
of stated capital, and the amount of stated capital as changed by such
amendment, are as follows: N/A
The Equitable of Colorado, Inc.
------------------------------- (Note 1)
By (illegible signature)
----------------------------
Its
and (illegible signature)
---------------------------- (Note 2)
Its
N/A
------------------------------- (Note 3)
Its
Notes: 1. Enter corporate name of corporation adopting the Articles of
Amendment. (If this is a change of name amendment the name before
this amendment is filed.)
2. Signatures and titles of officers signing for the corporation.
3. Where no shares have been issued, signature of a director.
(illegible text)
[EQUITABLE LOGO]
I, Linda Galasso, Secretary of THE EQUITABLE OF COLORADO, INC., do hereby
certify that:
attached hereto marked "EXHIBIT A" is a full, true and correct
copy of the By-Laws of The Equitable of Colorado, Inc., as
amended to date;
[SEAL]
IN WITNESS WHEREOF, I have hereunto affixed
my signature and Seal of THE EQUITABLE OF
COLORADO, INC.,
this 10th day of February, 1999.
/s/ Linda Galasso
-------------------------------------
<PAGE>
EX-99.1A6b
-2-
EXHIBIT A
================================================================================
BY-LAWS
THE EQUITABLE OF COLORADO
================================================================================
ARTICLE I
MEETINGS OF STOCKHOLDERS
------------------------
SECTION 1.1 ANNUAL MEETING. The annual meeting of the Stockholders for the
election of Directors and the transaction of other business shall be held on
the second Thursday in March of each year (or, if such day is a legal holiday,
then on the next succeeding business day), or on such other date as may be fixed
by the Board of Directors.
SECTION 1.2 SPECIAL MEETINGS. A special meeting of the Stockholders may be
called at any time by the Board of Directors, the Chairman of the Board or the
President, and shall be called by the Secretary upon the written request of the
holders of record of a majority of the outstanding shares entitled to vote at
the meeting. At any such special meeting only such business may be transacted
which is related to the purpose of purposes set forth on the notice or waiver of
notice of the meeting.
SECTION 1.3 TIME AND PLACE OF MEETINGS. Meetings of the Stockholders may be held
in or outside of Colorado at the time and place specified by the Board of
Directors or Stockholders requesting the meeting, as the case may be.
SECTION 1.4 NOTICE. Written notice shall be given to each meeting of the
Stockholders stating the place, date and hour of the meeting and, unless it is
the annual meeting, indicating that it is being issued by or at the direction of
the person or persons calling the meeting. Notice of a special meeting shall
also state the purpose or purposes for which the meeting is called. A copy of
the notice of any meeting shall be given, personally or by mail, not less than
ten (10) nor more than fifty (50) days before the date of the meeting, to each
Stockholder entitled to vote at the meeting. Notice of meeting need not be given
to any Stockholder who submits a signed waiver of notice, in person or by proxy,
whether before or after the meeting. The attendance of any Stockholder at any
meeting, in person or by proxy, without protesting prior to the conclusion of
the meeting the lack of notice of the meeting, shall constitute a waiver of
notice by him.
SECTION 1.5 PROXIES; VOTING. Each Stockholder of record shall be entitled at
every meeting of the Stockholders to one vote for each share of capital stock
standing in his name or the record of Stockholders. Every Stockholder entitled
to vote at a meeting or to express consent or dissent without a meeting may
authorize another person or persons to act for
<PAGE>
-3-
him by proxy. Every proxy must be signed by the Stockholder or his
attorney-in-fact. Directors shall be elected by a plurality of the votes cast at
a meeting of the Stockholders by the holders of shares entitled to vote in the
election. Whenever any corporate action, other than the election of Directors,
is to be taken by vote of the Stockholders, it shall, except as otherwise
required by law, be authorized by a majority of the votes cast at a meeting of
the Stockholders by the holders of shares entitled to vote thereon.
SECTION 1.6 QUORUM. The presence, in person or by proxy, of the holders of the
majority of the outstanding shares entitled to vote thereat shall constitute a
quorum at a meeting of the Stockholders for the transaction of any business.
Despite the absence of a quorum, the Stockholders present in person or by
proxy may adjourn the meeting to another time or place. At any adjourned meeting
at which a quorum is present, any business may be transacted that might have
been transacted on the original date of the meeting.
SECTION 1.7 CONSENT OF STOCKHOLDERS WITHOUT A MEETING. Whenever Stockholders are
required or permitted to take any action by vote, such action may be taken
without a meeting on written consent, setting forth the action so taken, signed
by the holders of all outstanding shares entitled to vote thereon.
ARTICLE II
BOARD OF DIRECTORS
------------------
SECTION 2.1 NUMBER OF DIRECTORS. The Board of Directors shall consist of not
less than three (3) or more than thirty-six (36) Directors as determined from
time to time by vote of the Stockholders or of a majority of the entire Board.
As used in these By-Laws, "entire Board of Directors" or "entire Board" means
the total number of Directors which the Company would have if there were no
vacancies.
SECTION 2.2 ELECTION AND TERMS OF DIRECTORS. At each annual meeting of the
Stockholders, Directors shall be elected to hold office until the next annual
meeting. Each Director shall hold office until the expiration of the term for
which he is elected and until his successor has been elected and qualified, or
until his death, resignation or removal.
sECTION 2.3 REGULAR MEETINGS. The Board of Directors shall meet for the purpose
of electing officers and the transaction of other business immediately following
the adjournment of the annual meeting of the Stockholders at the place or such
annual meeting. The time and place of other regular meetings of the Board shall
be fixed by the Board.
<PAGE>
-4-
SECTION 2.4 SPECIAL MEETINGS. A special meeting of the Board of Directors may be
called at any time by the Chairman of the Board, the President or three
Directors.
SECTION 2.5 QUORUM. A majority of the entire Board of Directors shall constitute
a quorum for the transaction of business at any regular or special meeting of
the Board, except as otherwise prescribed by these By-Laws. A majority of the
Directors present, whether or not a quorum is present, may adjourn any meeting
to another time or place.
SECTION 2.6 ACTION BY THE BOARD. Except as otherwise prescribed by the law, the
Articles of Incorporation of the Company or these By-Laws, the vote of a
majority of the Directors present at the time of the vote, if a quorum is
present at such time, shall be the act of the Board of Directors.
SECTION 2.7 NOTICE OF MEETINGS. Notice of a regular meeting of the Board of
Directors need not be given. Notice in writing of each special meeting of the
Board of Directors shall be given to each Director at least two days in advance
thereof and shall state in general terms the purpose or purposes of the meeting.
Any such notice shall be deemed given to a Director when delivered to him or
sent by mail, telegram, cablegram, or radiogram addressed to him at his address
furnished to the Secretary. Notice need not be given to any director who submits
a signed waiver of notice before or after the meeting, or who attends the
meeting without protesting, at the beginning of the meeting, that the meeting is
not lawfully called or convened. Notice of any adjournment of a meeting to
another time or place need not be given if such time and place are announced at
the meeting.
SECTION 2.8 PARTICIPATION IN MEETINGS; ACTION BY CONSENT WITHOUT MEETING. Any
Director may participate in a meeting of the Board or of a committee thereof by
means of a conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and such
participation shall constitute presence in person at such meeting. Any action
required or permitted to be taken at any meeting of the Board or of any
committee thereof may be taken without a meeting if all members of the Board or
of such committee, as the case may be, consent thereto in writing and such
meeting is filed with the minutes of the Board or such committee, as the case
may be.
SECTION 2.9 RESIGNATIONS. Any Director may resign at any time by giving written
notice to the Chairman of the Board, the President or the Secretary. Such
resignation shall take effect on receipt of such notice or at any later time
specified therein.
SECTION 2.10 REMOVAL OF DIRECTORS. Any Director may be removed by action of the
Board of Directors for cause or by vote of the Stockholders with or without
cause.
<PAGE>
-5-
SECTION 2.11 VACANCIES. Newly created directorships resulting from an increase
in the number of Directors and vacancies occurring in the Board of Directors for
any reason (except the removal of Directors without cause) may be filled by vote
of the Stockholders or of a majority of the Directors then in office, although
less than a quorum exists. Vacancies occurring in the Board by reason of the
removal of Directors without cause may be filled by vote of the Stockholders or
action of the Board.
SECTION 2.12 DIRECTOR'S FEES. The Directors shall be paid such fees for services
as Directors as may have been authorized by the Board of Directors.
ARTICLE III
COMMITTEES
-----------
SECTION 3.1 GENERAL. The Board of Directors, by resolution adopted by a majority
of the entire Board, may designate from among its members, an executive
committee and other standing committees each consisting of at least three
Directors. The Board may designate by resolution adopted by a majority of the
entire Board one or more Directors as alternate members of the committee, who
may replace any absent member or members at any meeting of such committee. Each
committee shall serve at the pleasure of the Board.
SECTION 3.2 POWERS. Each committee shall have the authority of the Board of
Directors to the extent provided in the resolution designating such committee,
except that no committee shall have authority to submit to the Stockholders any
action for which Stockholders' approval is required by law, to fill vacancies in
the Board or in any committee, to fix the compensation of the Directors for
serving on the Board or any committee, to amend or repeal any of these By-Laws
or to adopt new by-laws, or to amend or repeal any resolution of the Board which
by its terms shall not be so amenable or repeatable.
SECTION 3.3 QUORUM AND MANNER OF ACTING. Except as otherwise prescribed by the
Board of Directors, a majority of the total membership which a committee would
have if there were no vacancies shall constitute a quorum for the transaction of
business and the vote of a majority of the members present at the time of the
vote, if a quorum is present at such time, shall be the act of such committee.
Except as provided in these By-Laws or otherwise prescribed by the Board, each
committee may elect a Chairman from among its members, fix the time and date of
its meetings and adopt other rules of procedure. Any action taken by a committee
shall be reported to the Board at its next meeting.
<PAGE>
-6-
SECTION 3.4 RESIGNATION. Any member of a committee may resign at any time by
giving written notice to the Chairman of the Board, the President or the
Secretary. Such resignation shall take effect on receipt of such notice or at
any later time specified therein.
SECTION 3.5 REMOVAL OF MEMBERS. Any member of a committee may be removed by
action of the Board of Directors with or without cause.
SECTION 3.6 VACANCIES. Any vacancy occurring in any committee for any reason may
be filled by resolution adopted by a majority of the entire Board.
SECTION 3.7 SUBCOMMITTEES. Any committee may appoint one or more subcommittees
from its members. Any such subcommittee may be charged with the duty of
considering and reporting to the appointing committee on any matter within the
responsibility of the committee appointing such subcommittee.
ARTICLE IV
OFFICERS
----------
SECTION 4.1 GENERAL. The officers of the Company shall be Chairman of the Board,
a President, one or more Vice Presidents, a Controller, a Secretary, a
Treasurer, an Actuary and such other officers as the Board of Directors may
determine. Each officer shall be elected by the Board to hold office for the
term for which he is elected and until his successor has been elected and
qualified or until his death, resignation or removal. Any two or more offices
may be held by the same person, except the offices of President and Secretary.
The Board may determine not to fill any office from time to time. The Board may
require any officer to give security for the faithful performance of his duties.
SECTION 4.2 RESIGNATIONS. Any officer may resign at any time by giving written
notice to the Chairman of the Board, the President or the Secretary. Such
resignation shall take effect on receipt of such notice or at any later time
specified therein.
SECTION 4.3 REMOVAL OF OFFICERS AND VACANCIES. Any officer elected by the Board
of Directors may be removed by the Board with or without cause. A vacancy
occurring in any office for any reason may be filled by action of the Board of
Directors.
SECTION 4.4 CHIEF EXECUTIVE OFFICER. The Chairman of the Board or the President
shall be chief executive officer of the Company as the Board of Directors from
time to time shall
<PAGE>
-7-
determine, and the Board of Directors from time to time may determine who shall
act as chief executive officer in the absence or inability to act of the
then incumbent. Subject to the control of the Board and to the extent not
otherwise prescribed by these By-Laws, the chief executive officer shall be
responsible for the general management and direction of all the business and
affairs of the Company.
SECTION 4.5 CHAIRMAN OF THE BOARD. The Chairman of the Board shall be elected
from among the members of the Board of Directors. He shall preside at all
meetings of the Stockholders and of the Board at which he is present. He shall
also exercise such powers and perform such duties as may be delegated or
assigned to or required of him by these By-Laws or by or pursuant to
authorization of the Board.
SECTION 4.6 PRESIDENT. The President shall exercise such powers and perform such
duties as may be delegated or assigned to or required of him by these By-Laws or
by or pursuant to the authorization of the Board or (if the President is not the
chief executive officer) by the chief executive officer. In the absence of the
Chairman of the Board, the President shall preside at all meetings of the
Stockholders and of the Board at which he is present.
SECTION 4.7 VICE PRESIDENTS. Each Vice President shall exercise such powers and
perform such duties as may be delegated or assigned to or required of him by
these By-Laws or pursuant to authorization of the Board or the President.
SECTION 4.8 CONTROLLER. The Controller shall be responsible for keeping and
maintaining the books of accounts of the Company, subject to the control of the
Board of Directors and the President. The Controller shall exercise such powers
and perform such other duties as relate to the office of the Controller, and
also such powers and duties as may be delegated or assigned to or required of
him by these By-Laws or by or pursuant to authorization of the Board or the
President.
SECTION 4.9 SECRETARY. The Secretary shall issue notices and keep the minutes of
the meetings of the Stockholders and of the Board of Directors and its
committees and shall have custody of the Company's corporate seal and records.
The Secretary shall exercise such powers and perform such other duties as relate
to the office of the Secretary, and also such powers and duties as may be
delegated or assigned to or required of him by or pursuant to the authorization
of the Board, the Chairman of the Board, or the President.
SECTION 4.10 TREASURER. The Treasurer shall be responsible for purchasing and
selling securities pursuant to authorization of the Board of Directors or any
committee thereof and the safe keeping of the Company's funds and securities.
The Treasurer shall
<PAGE>
-8-
exercise such powers and perform such other duties as relate to the office of
the Treasurer, and also such powers and duties as may be delegated or assigned
to or required of him by these By-Laws or by or pursuant to the authorization of
the Board or the President.
SECTION 4.11 ACTUARY. The Actuary shall be responsible for all actuarial
calculations and the preparation of all policy forms to be issued by the
Company, subject to the control of the Board of Directors and the President. The
Actuary shall exercise such powers and perform such other duties as relate to
the office of the Actuary, and also such powers and duties as may be delegated
or assigned to or required of him by these By-Laws or by or pursuant to the
authorization of the Board or the President.
SECTION 4.12 OTHER OFFICERS. Each other officer shall exercise such powers and
perform such duties as may be delegated or assigned to or required of him by or
pursuant to the authorization of the Board or the President.
ARTICLE V
EXECUTION OF INSTRUMENTS
SECTION 5.1 EXECUTION OF INSTRUMENTS. Any one of the following, namely, the
Chairman of the Board, the President, any Vice President (including a Deputy or
Assistant Vice President or any other Vice President designated by a number or a
word or words added before or after the title Vice President to indicate his
rank or responsibility), the Secretary or the Treasurer, or any officer,
employee or agent designated by or pursuant to authorization of the Board of
Directors or any committee thereof, shall have power to execute instruments on
behalf of the Company (other than checks, drafts and other orders drawn on
funds of the Company deposited in its name in banks) and to affix the corporate
seal. If any such instrument is to be executed on behalf of the Company by more
than one person, any two or more of the foregoing or any one or more of the
foregoing with an Assistant Secretary or an Assistant Treasurer shall have power
to execute such instrument and affix the corporate seal. If any such instrument
is to be executed on behalf of the Company by more than one person, any two or
more of the foregoing or any one or more of the foregoing with an Assistant
Secretary or an Assistant Treasurer shall have the power to execute such
instrument and affix the corporate seal.
The signature of any officer may be in facsimile on any such instrument if
it shall also bear the actual signature, or personally inscribed initials, of an
officer, employee or agent empowered by or pursuant to the first sentence of
this Section to execute such instrument, provided that the Board of Directors or
a committee thereof may authorize the issuance of insurance contracts and
annuity contracts on behalf of the Company bearing the facsimile signature of an
officer without the actual signature or personally inscribed initials of any
person.
<PAGE>
-9-
All checks, drafts and other orders drawn on funds of the Company deposited
in its name in banks shall be signed by one or more officers or employees, but
only pursuant to authorization of and in accordance with rules prescribed by the
Board, which rules may permit the use of facsimile signatures.
SECTION 5.2 FACSIMILE SIGNATURES OF FORMER OFFICERS. If any officer whose
facsimile signature has been placed upon any instrument shall have ceased to be
such officer before such instrument is issued, it may be issued with the same
effect as if he had been such officer at the time of its issue.
SECTION 5.3 MEANING OF TERM "INSTRUMENTS". As used in this Article V, the term
"instruments" includes, but is not limited to, contracts and agreements, checks,
drafts and other orders for the payment of money, transfers of bonds, stocks,
notes and other securities, and powers of attorney, deeds, leases, releases or
mortgages, satisfactions and all other instruments entitled to be recorded in
any jurisdiction.
ARTICLE VI
FINANCIAL STATEMENTS AND AUDIT
SECTION 6.1 ANNUAL STATEMENT AND REPORTS. At the meeting of the Board of
Directors following the annual meeting of the Stockholders, the Annual
Statement of the Company for the preceding year, together with a certification
of certification thereof by such independent Public Accountants as may have been
selected by the Board of Directors, shall be submitted to the Board. Interim
quarterly reports, certified by the Actuary and the Controller, on the financial
condition of the Company shall also be submitted to the Board. The Annual
Statement and interim reports shall be filed with the records of the Board and a
note of such submission shall be spread upon the minutes. The Controller shall
also report from time to time to the Board or any committee any other matters
coming to his attention in the course of his duties which in his judgment
should be brought to their attention.
SECTION 6.2 INDEPENDENT PUBLIC ACCOUNTANTS. The books and accounts of the
Company shall be audited throughout each year by such independent Public
Accountants as shall be selected by the Board of Directors.
<PAGE>
-10-
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND INCORPORATORS.
To the extent permitted by the law of the State of Colorado, subject to all
applicable requirements thereof
(a) any person made or threatened to be made a party to any action or
proceeding, whether civil or criminal, by reason of the fact that he, his
testator or intestate, is or was a director, officer, employee or incorporator
of the Company shall be indemnified by the Company;
(b) any person made or threatened to be made a party to any action or
proceeding, whether civil or criminal, by reason of the fact that he, his
testator or intestate serves or served any other organization in any capacity at
the request of the Company may be indemnified by the Company; and
(c) the related expenses of any such person in any said categories may be
advanced by the Company.
ARTICLE VIII
CAPITAL STOCK
SECTION 8.1 FORM OF CERTIFICATES. Certificates representing shares of capital
stock of the Company shall be in such form as shall be approved by the Board of
Directors. Each certificate shall be signed by the Chairman of the Board, the
President or a Vice President and the Secretary or the Treasurer, and may be
sealed with the corporate seal of the Company or a facsimile thereof. The
signatures of the officers upon a certificate may be facsimiles if the
certificate is countersigned by a transfer agent or registered by a registrar
other than the Company itself or its employee.
SECTION 8.2 REGISTERED OWNER. Prior to due presentment for registration of
transfer of a certificate for shares of its capital stock, the Company may treat
the registered owner as the person exclusively entitled to vote, to receive
notifications and otherwise to exercise all the rights and powers of an owner.
SECTION 8.3 CERTIFICATES LOST OR DESTROYED. The Company may issue a new
certificate for shares in place of any certificate therefore issued by it,
alleged to have been lost or destroyed, and the Board of Directors may require
the owner of the lost or destroyed
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certificate, or his legal representative, to give the Company a bond sufficient
to indemnify the Company against any claim that may be made against it on
account of the alleged loss or destruction of any such certificate or the
issuance of any such new certificate.
SECTION 8.4 RECORD DATE. The Board of Directors may fix, in advance, a date as
the record date for the determination of Stockholders or any adjournment
thereof, or to express consent to or dissent from any proposal without a
meeting, or to receive payment of any dividend or the allotment or any rights.
The Board may also fix a date as the record date for the purpose of any other
action The record date may not be more than fifty (50) nor less than ten (10)
days before the date of the meeting, nor more than fifty (50) days prior to any
other action. If no record date is fixed, the record date for the determination
of Stockholders entitled to notice of or to vote at a meeting of the
Stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if no notice is given, the day on which the
meeting is held, and the record date for determining Stockholders for any other
purpose shall be at the close of business of on the day on which the resolution
of the Board relating thereto is adopted.
ARTICLE IX
AMENDMENT OF BY-LAWS
SECTION 9.1 AMENDMENT OF BY-LAWS. These By-Laws may be amended or repealed and
new by-laws may be adopted by vote of the Stockholders or of a majority of the
entire Board.
FORM OF DISTRIBUTION AND SERVICING AGREEMENT
This DISTRIBUTION AND SERVICING AGREEMENT, dated as of , is made by
and among The Equitable of Colorado, Inc. ("EOC"), and EQ Financial Consultants,
Inc. ("EQFC") as follows:
WHEREAS, pursuant to a Distribution Agreement, dated as of June 30, 1996
and a Distribution Agreement dated July 1, 1998 EQFC is a principal underwriter
of The Hudson River Trust ("Trust"), a series mutual fund registered under the
Investment Company Act of 1940 ("1940 Act") whose shareholders are separate
accounts of EOC and of other insurance companies;
WHEREAS, EOC issues variable insurance contracts ("Variable Contracts")
whose net premiums or considerations are allocated in whole or in part to the
respective separate accounts of EOC for investment in the Trust, for direct
investment or for investment in other funding media ("Separate Accounts");
WHEREAS, units of interest in the Separate Accounts are registered under
the Securities Act of 1933 ("1933 Act") to the extent such registration is
required;
WHEREAS, EOC is a broker-dealer registered under the Securities Exchange
Act of 1934, as amended ("1934 Act"), and is a member of the National
Association of Securities Dealers, Inc. ("NASD");
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WHEREAS, EOC desires to engage EQFC, which is a registered broker-dealer
under the 1934 Act and a member of the NASD to assume the responsibilities set
forth in this Agreement with respect to the distribution of the Variable
Contracts, including in particular the responsibility for compliance with
broker-dealer requirements under federal and any applicable state or foreign
securities laws and the NASD Rules of Fair Practice ("NASD Rules") with respect
to the offering of the Variable Contracts, and EQFC desires to assume such
responsibilities;
NOW, THEREFORE, the parties hereto agree as follows;
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ARTICLE I
Distribution Responsibility for the Variable Contracts
Sec. 1.1 EOC authorizes to act, and EQFC agrees to serve, as broker-dealer
in connection with the distribution of their respective Variable Contracts to
the extent provided in this Agreement. EQFC shall be fully responsible for
carrying out all compliance and supervisory obligations in connection with the
distribution of the Variable Contracts, as required by the NASD rules and by
federal and any applicable state or foreign securities laws. Equitable shall be
fully responsible for compensating the Agents for their sales of Variable
Contracts, as provided in Section 1.4.
Sec. 1.2 Without limiting the generality of Section 1.1, EQFC agrees that
it shall be fully responsible for:
(A) Requiring that each person who is appointed by EOC as an insurance
agent and is authorized to offer and sell the Variable Contracts under the
insurance laws (an "Agent")is duly registered as a representative of EQFC and is
appropriately licensed, registered or otherwise qualified to offer and sell the
Variable Contracts under the federal securities laws and any applicable
securities laws of each state or other jurisdiction in which the Variable
Contracts offered by such person may be lawfully sold;
(B) Training, supervising and directing the Agents for purposes of
complying on a continuous basis with the NASD rules and with federal and state
securities laws applicable in connection with the offer and sale of the Variable
Contracts. In this connection EQFC shall:
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(i) Establish and implement reasonable written procedures which
provide for diligent supervision of sales practices of the Agents;
(ii) Require that Agents shall recommend the purchase of Variable
Contracts only upon reasonable grounds to believe that the purchase is suitable
for each prospective purchaser, and verify their compliance with such
requirement;
(iii) Provide a sufficient number of registered principals and an
adequate compliance staff to carry out the responsibilities set forth herein;
and
(iv) Impose disciplinary measures on the Agents.
(C) Oversight of the securities activities of all persons engaged
directly or indirectly in operations of EQFC and EOC related to the offer or
sale of the Variable Products, each of whom shall be considered a "person
associated" with EQFC, as defined in Section 3(a)(18) of the 1934 Act. EQFC
shall have full responsibility for each such person with regard to his or her
training, supervision and control, as contemplated by Section 15 of the 1934
Act, and, in that connection, shall have the authority to require that
disciplinary action be taken with respect to such persons.
Sec. 1.3 EQFC represents that it is a broker-dealer duly registered under
1934 Act and is a member in good standing of the NASD and, to the extent
necessary to perform the activities contemplated hereunder, is duly registered,
or otherwise qualified, under securities laws of every state or other
jurisdiction in
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which the Variable Contracts are available for sale, and EQFC agrees to maintain
such status. Consistent with its designation as distributor of the Variable
Contracts, as provided in Section 1.1 of this Agreement, EQFC acknowledges that
it may be deemed to be an "underwriter" of a "principal underwriter" of the
Separate Accounts under the federal securities laws.
Sec. 1.4 EOC shall have exclusive responsibility for the payment of
commissions or other fees to the Agents. All compensation paid by EOC to the
Agents with respect to sales of the Variable Contracts shall be paid by EOC on
its own behalf, and shall be reflected on the books and records of EOC. The
responsibility of EOC shall include the performance of all activities necessary
in order that the payment of compensation hereunder complies with all applicable
federal securities laws and state securities and insurance laws. EOC retains the
ultimate right to determine the rates of commission and other fees to be paid to
the Agents in connection with their respective Variable Contracts. Nothing
contained in this Agreement shall obligate EQFC to pay any commissions or other
fees to Agents or to reimburse any Agents for expenses incurred by them with
respect to the Variable Contracts, nor shall EQFC have any responsibility for
the adequacy or accuracy of any amount paid to an Agent in connection with the
sale of the Variable Contracts. EQFC shall have no right or interest whatsoever
in any commissions or other fees payable to Agents by EOC.
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Sec. 1.5 EQFC and EOC shall each cause to be maintained and perserved such
accounts, books and other documents as are required by the 1934 Act and 1940 Act
and any other applicable laws and regulations. In particular, without limiting
the foregoing, EQFC shall cause all the books and records in connection with the
offer and sale of the Variable Contracts to be maintained and perserved in
conformity with the requirements of Rules 17a-3 and 17a-4 under the 1934 Act, to
the extent that such requirements are applicable to the Variable Contracts. The
payment of premiums, purchase payments, commissions and other fees and payments
in connection with the Variable Contracts shall be reflected on the books and
records of EOC and, as provided in Section 1.4 here of and as may otherwise be
required under applicable NASD regulations and federal and applicable state
securities laws requirements.
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Sec. 1.6 EQFC, and EOC shall each submit to all regulators and
administrative bodies having jurisdiction over the sales of the Variable
Contracts, present or future, any information, reports, or other material that
any such body by reason of this Agreement may request or require pursuant to
applicable laws or regulations. In particular, without limiting the foregoing,
EOC agrees that any books and records which it maintains pursuant to Section 1.5
of this Agreement which are required to be maintained under Rule 17a-3 or 17a-4
of the 1934 Act shall be subject to inspection by the SEC in accordance with
Section 17(a) of the 1934 Act.
Sec. 1.7 EQFC, and EOC each agree and understand that all documents,
reports, records, books, files and other materials required under applicable
NASD regulations and federal and state securities laws relative to the sale of
Variable Contracts shall be the property of EQFC, with the exception of those
books and records maintained by EOC pursuant to Section 1.4 which relate to
sales compensation and shall be the joint property of EOC and EQFC. If, however,
such documents, reports, records, books, files and other materials which are the
property of EQFC are required by applicable regulation or law to be maintained
also by EOC, such material shall be the joint property of EQFC and EOC. All
other documents, reports, records, books, files and other materials maintained
relative to this Agreement shall be the property of EOC. Upon the termination of
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this Agreement, all such material shall be returned to the applicable party.
Sec. 1.8 EQFC and EOC from time to time during the term of this Agreement,
shall allocate among themselves, subject to a right of further delegaiton, the
administrative responsibility for maintaining and preserving the books, records
and accounts kept in connection with the Variable Contracts; provided, however,
in the case of books, records and accounts kept pursuant to a requirement of
applicable law or regulation, the ultimate responsibility for maintaining and
preserving such books, records and accounts shall be that of the party which is
required to maintain or preserve such books, records and accounts under the
applicable law or regulation, and such books, records and accounts shall be
maintained and preserved under the supervision of that party. EQFC and EOC shall
cause each other to be furnished with such reports as each may reasonably
request for the purpose of meeting its respective reporting and recordkeeping
requirements under such regulations and laws and under the insurance laws of the
State of Colorado and any other applicable states or jurisdictions.
ARTICLE II
Procedures for Sale of Variable Contracts
Sec. 2.1 EOC represents and warrants that units of interest of its
respective Separate Accounts offered under the Variable Contracts are registered
under the 1933 Act to the extent such registration is required, that the
Separate Accounts are registered under the 1940 Act unless
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exempt from such registration, and that the Variable Contracts are qualified to
be sold under the insurance laws and any applicable securities laws of all
states and other jurisdictions in which the Variable Contracts are authorized
for sale. EOC further repesents and warrants that it is a life insurance company
duly organized under the laws of the State of Colorado and in good standing and
authorized to conduct business under the laws of each state in which the
Variable Contracts are offered and sold.
Sec. 2.2 EQFC will require that the Agents use only the effective
prospectuses, statements of additional information ("SAIs") and other authorized
materials in soliciting and selling the Variable Contracts. EQFC is not
authorized to give any information or to make any representations concerning the
Variable Contracts other than those contained in the current prospectus or SAI
therefor filed with the SEC or in such materials as may be authorized by EOC.
SEC. 2.3 All applications for Variable Contracts shall be made on
application forms supplied by EOC, as appropriate, and all payments collected by
EQFC shall be remitted by EQFC promptly in full, together with such application
or enrollment forms and any other required documentation, directly to EOC, at
the address indicated on such application or to such other address as EOC may,
from time to time, designate in writing. EOC shall review all such applications
for suitability. Checks or money orders in payment on any Variable Contract
shall be drawn to the order of "The Equitable of Colorado, Inc." All
applications for Variable Contracts shall be subject to
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acceptance or rejection by EOC at its discretion.
Sec. 2.4 All money payable in connection with any of the Variable
Contracts, whether as premiums, purchase payment or otherwise, and whether paid
by, or on behalf of any applicant or contractowner, is the property of EOC and
shall be transmitted promptly in accordance with the administrative procedures
of EOC without any deduction or offset for any reason, including by example but
not limitation, any deduction or offset for compensation claimed by EQFC. No
cash payments shall be accepted by EQFC in connection with the Variable
Contracts.
Sec. 2.5 EOC shall be responsible for payment of the costs of printing the
prospectuses, SAIs and sales material used in connection with the solicitation
of applications for the Variable Contracts and to allocate such costs between
themselves. EOC shall provide to EQFC copies of such prospectusus. SAIs and
sales material in such number as EQFC shall reasonably request. EOC shall make
available to EQFC copies of all financial statements and other documents that
EQFC shall reasonably request for use in connection with the distribution of the
Variable Contracts.
Sec. 2.6 Notwithstanding anything in this Agreement to the contrary, EQFC
may enter into sales agreements with independent broker-dealers for the sale of
the Variable Contracts, subject to the prior written approval of EOC of each
such sales agreement and the terms thereof. All such
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sales agreements entered into by EQFC shall provide that each independent
broker-dealer will assume full responsibility for continued compliance by itself
and its associated persons with the NASD Rules and applicable federal and state
securities and insurance laws. All associated persons of such independent
broker-deal soliciting applications for the Variable Contracts shall be duly and
appropriately licensed or appointed for the sale of the Variable Contracts under
the NASD Rules and federal and state securities and insurance laws in which such
person shall offer or sell the Variable Contracts.
Sec. 2.7 EOC shall apply for and maintain the proper insurance licenses for
each of the Agents selling the Variable Contracts in all states or jurisdictions
in which the Variable Contracts are offered for sale by such Agent. EOC reserves
the right to refuse to appoint any proposed agent, independent broker-dealer, or
any representative thereof as an Agent, and may terminate an Agent or
independent broker-dealer once appointed. EOC shall promptly notify EQFC of each
such termination. EOC agrees to be responsible for all licensing or other fees
required under pertinent state insurance laws to properly authorize Agents for
the sale of the Variable Contracts; however, the foregoing shall not limit EOC's
right to collect such amount from any person or entity other than EQFC.
Sec.2.8 The parties hereto recognize that any person selling the Variable
Contracts as contemplated by this Agreement shall be acting as an insurance
agent of EOC or as an insurance broker, and that the rights of EQFC to supervise
such persons shall be limited to the extent specifically described herein or
required under applicable federal or state securities laws or NASD regulations.
Such persons shall not be considered employees of EQFC and
<PAGE>
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shall be considered agents of EQFC only as and to the extent required by such
laws and regulations. Further, it is intended by the parties hereto that such
persons are and shall continue to be considered to have a common law independent
contractor relationship with EOC and not to be common law employees of EOC,
unless any contract between EQFC and any person selling the Variable Contracts
specifically provides otherwise.
Sec. 2.9 Consistent with the responsibility of EQFC to discharge all
compliance and supervisory obligations relating to the distribution of the
Variable Contracts as provided in this Agreement and consistent with the
authority given to EQFC hereunder, EOC shall retain the ultimate right of
control over, and responsibility for, the issuance, servicing and marketing of
its Variable Contracts. In that connection, EOC shall review and approve all
advertising concerning the Variable Contracts issued by each of them; however,
EQFC shall be responsible for filing such materials, as required, with the NASD
and with state securities regulators and for obtaining such approvals as may be
necessary.
Sec. 2.10 Unless otherwise agreed in writing by EOC, neither EQFC nor any
Agent nor any independent broker-dealer shall have an interest in any surrender
charges, deductions or other fees payable to EOC.
<PAGE>
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ARTICLE III
Services and Personnel Provied by EOC
Sec. 3.1 EOC agrees to furnish compliance and related support services,
including personnel, to assist EQFC in the performance of the services which
EQFC is required to provide hereunder. In furnishing such services, all
personnel of EOC shall be subject at all times to the supervision and control of
EQFC.
ARTICLE IV
Compensation and Expenses
Sec. 4.1 EQFC shall be compensated, not less frequently than quarterly, by
EOC for its services under this Agreement in an aggregate annual amount which
shall be equal to the actual expenses incurred by EQFC to provide compliance and
related support services, plus a percentage of such expenses which shall
approximate the annual rate of profit earned by EQFC from its performance of
comparable services for unaffiliated clients.
Sec 4.2 EQFC shall pay the costs and expenses, direct and indirect,
incurred by EOC in furnishing services and personnel, pursuant to Article III of
this Agreement. In determining the basis for the apportionment of expenses,
specific identification or estimates based on time, company assets, square
footage or any other mutually agreeable method providing for a fair and
reasonable allocation of cost may be used, provided such method is in conformity
with the requirements of the Colorado Insurance Law and regulations. The charge
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to EQFC for such apportioned expenses shall be at cost as described in this
Section 4.2.
Sec. 4.3 Within 45 days after the end of each calendar quarter, and more
often if desired, EOC shall submit to EQFC a statement of apportioned expenses
showing the basis for such apportionment; and settlement shall be made within 15
days thereafter. The statement of apportioned expenses shall set forth in
reasonable detail the nature of the expenses being apportioned and other
relevant information to support the charge.
ARTICLE V
Term of Agreement
Sec. 5.1 Subject to termination as herein provided, this Agreement shall
remain in full force and effect for a two-year peroid commencing on the date
first above written, and this Agreement shall continue in full force and effect
from year to year thereafter, until terminated as herein provided.
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Sec. 5.2 This Agreement may be terminated by any party hereto on not less
than 60 days' prior written notice to the other parties or by an agreement in
writing signed by all of the parties hereto, except that data processing
services may not be terminated on less than 180 days' prior written notice, if
requested by Equico in writing promptly following its receipt of written notice
of termination of this Agreement. This Agreement shall automatically be
terminated in the event of its assignment.
Sec. 5.3 Upon termination of this Agreement, all authorizations, rights,
and obligations shall cease except the obligations to settle accounts hereunder,
including the settlement of monies due in connection with Variable Contracts in
effect at the time of termination or issued pursuant to applications received by
EOC prior to termination.
ARTICLE VI
Miscellaneous
Sec. 6.1 Should an irreconcilable difference of opinion arise between or
among the parties to this Agreement as to the interpretation of any matter
respecting this Agreement, it is hereby mutually agreed that such differences
shall be submitted to arbitration as the sole remedy available to the parties.
Such arbitration shall be in accordance with the rules of the American
Arbitration Association, the arbitrators shall have extensive experience in the
insurance industry, and the arbitration shall take place in New York, New York.
<PAGE>
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Sec. 6.2 For purposes of this Agreement, the term "Variable Contracts"
shall not include any vairable insurance contract issued by EOC which is not
offered and sold by employees or agents of EOC.
Sec. 6.3 If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule, or otherwise, the remainder of this
Agreement shall not be affected thereby.
Sec. 6.4 This Agreement constitutes the entire agreement between the
parties hereto and may not be modified except in a written instrument executed
by all parties hereto.
Sec. 6.5 This Agreement shall be subject to the provisions of the 1934 Act
and, to the extent applicable, the 1940 Act and the rules, requlations and
rulings thereunder and of the NASD, from time to time in effect, including such
exemptions from the 1940 Act as the SEC may grant, and the terms hereof shall be
interpreted and constured in accordance therewith.
Sec. 6.6 This Agreement shall be interpreted in accordance with the laws of
the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officials thereunto duly authorized, as of the day
and year first above written.
THE EQUITABLE OF COLORADO, INC.
By: /s/Name
----------------------------
Name:
-----------------------
Title:
----------------------
EQ FINANCIAL CONSULTANTS, INC.
By: /s/Name
----------------------------
Name:
-----------------------
Title:
-----------------------
Up to Commissionable Prem Over CP
Policy Year 1*
Issue Ages 0-19 40% 3%
Issue Ages 20-65 50% 3%
Issue Ages 66+ # 3%
PYs 2-10**** 4%** 3%***
PY 11 and over***** 3% 3%
# The first year commission rate of 50% is reduced by 1% for each year
that the insured's age exceeds 65. For example, at age 67, the first
year commission rate is 48%. No commission chargeback applies.
* PCs are payable on all commissions earned in policy year 1.
** Includes Transferable service fee of 2% and 2% renewal commission.
*** The 3% is comprised of a 1% renewal commission and 2% TSF.
**** A persistency bonus is paid on renewal premiums received in policy
years 2-10 to qualifying agents.
***** Includes 1% service fee boost payable to the original writing agent(s),
if eligible, and 2% TSF.
FORM OF DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT, dated as of _____________________ by and between
THE EQUITABLE OF COLORADO, INC. ("EOC") for itself and as depositor on behalf of
each presently existing or hereafter created separate accounts supporting EOC
variable products (the "Separate Accounts"), and EQUITABLE DISTRIBUTORS, INC.
(the "Distributor").
W I T N E S S E T H :
WHEREAS, EOC is a life insurance company which offers or may hereafter
offer a number of products, including without limitation, fixed and variable
annuities, fixed and variable life insurance, long-term care coverage and the
like;
WHEREAS, the net consideration from the sale of such products may be
allocated for investment in whole or in part to EOC's general account and/or one
or more of the Separate Accounts;
WHEREAS, the Separate Accounts are separate accounts established and
maintained by EOC pursuant to the laws of the State of Colorado under which
income, gains and losses, whether or not realized, from assets allocated to the
Separate Accounts, are credited to or charged against the Separate Accounts
without regard to other income, gains or losses of EOC;
WHEREAS, the Separate Accounts for which registration is required are
registered as investment companies under the Investment Company Act of 1940
("1940 Act"), and units of interest in the Separate Accounts are registered
under the Securities Act of 1933 ("1933 Act");
WHEREAS, certain general account and/or separate account interests, such
as MVA interests, are registered under the 1933 Act;
WHEREAS, the Distributor, a wholly-owned subsidiary of Equitable Life
Assurance Society of the United States ("Equitable Life"), is a broker-dealer
registered under the Securities Exchange Act of 1934 ("1934 Act") and is a
member of the National Association of Securities Dealers, Inc. ("NASD");
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
Distribution Responsibilities
Section 1.1 EOC authorizes the Distributor to act, and the Distributor
agrees to serve, as a principal underwriter and distributor of the EOC products
listed on Schedule I attached hereto
<PAGE>
and such other EOC products as the parties may from time to time agree will be
distributed by EOC (the "Products") for and on behalf of EOC and, if applicable,
the Separate Accounts with respect to such Products in all states and other
jurisdictions in which the Products may legally be sold. During the term of this
Agreement the Distributor agrees in turn that during such same period it will
act exclusively for Equitable Life and EOC and will not underwrite or distribute
or contract to underwrite or distribute any other financial services products
without the prior written consent of EOC in each instance.
Section 1.2 The Distributor represents that it is a broker-dealer duly
registered under the 1934 Act and is a member in good standing of the NASD and,
to the extent necessary to perform the activities contemplated hereunder, is
duly registered, or otherwise qualified, under the securities laws of every
state and other jurisdiction in which the Products are available for sale, and
the Distributor agrees to maintain such status.
Section 1.3 The Distributor shall at all times function as and be deemed
to be an independent contractor and will be under no obligation to effectuate
any particular number of sales of Products or to promote or make sales, except
to the extent the Distributor deems advisable. The Distributor shall be fully
responsible for carrying out all compliance and supervisory obligations in
connection with its distribution of the Products, to the extent the same are
securities, as required by the NASD Rules of Fair Practice ("NASD Rules") and by
federal and any applicable state or foreign securities laws. The Distributor
shall assume full responsibility for the oversight of securities activities of
any person associated with the Distributor, as defined in Section 3(a)(18) of
the 1934 Act, and engaged directly or indirectly in the distribution of the
Products ("Associated Persons"), and shall have the authority to require that
disciplinary action be taken with respect to the Associated Persons. The
Distributor shall be fully responsible for any and all compensation due and
payable to any persons distributing the Products and/or soliciting applications
therefor directly or indirectly by reason of the authorization granted to
Distributor herein.
Section 1.4 The Distributor is presently a party to or may hereafter enter
into written agreements ("Sales Agreements") with (a) broker-dealers ("Third
Party Broker Dealers") to solicit applications for the sale of securities, (b)
with general agents ("Third Party General Agents") to solicit applications for
insurance products and (c) with Third Party Broker Dealers and their affiliated
Third Party General Agents to jointly solicit applications for the sale of
products that are both securities and insurance products, and is hereby
authorized to PERMIT the solicitation of the products pursuant thereto. A Third
Party Broker Dealer may be a Third Party General Agent. Where state law does not
provide for or require general agents, existing Sales Agreements and new Sales
Agreements may be with individual insurance agents affiliated with a Third Party
Broker Dealer to act as designated insurance principals in place of a Third
Party General Agent, and all references herein to Third Party General Agents
shall also apply to such designated insurance principals. The Distributor
warrants and represents that it has delivered true and complete copies of all
existing Sales Agreements to EOC and that all the terms and conditions of this
Agreement applicable to Sales Agreements hereafter entered into are true with
respect to the existing Sales Agreements. All Sales Agreements hereafter entered
into herein for any Product shall be in the standard form thereof as to such
Product approved in advance by
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EOC with such nonmaterial changes thereto as the other parties thereto may
require. The Distributor shall not hereafter enter into any other form of Sales
Agreement without the prior approval of EOC in each case. EOC has reviewed the
compensation agreements in all existing Sales Agreements and approved such
arrangements. All compensation arrangements in any Sales Agreement with Third
Party Broker Dealers and/or Third Party General Agents hereafter entered into
shall be approved in advance by EOC. The Distributor shall not modify or amend
any compensation arrangement in any Sales Agreement or offer any commission
specials, promotions, bonuses or other cash or non-cash compensation incentives,
without in each case first obtaining the prior consent of EOC thereto;
Section 1.5 The Sales Agreements hereafter entered into shall require that
each party thereto which is a Third Party Broker Dealer shall assume full
responsibility for continued compliance by itself and its associated persons (as
defined in Section 3(a)(18) of the 1934 Act) with the NASD Rules and applicable
federal and state securities and insurance laws. Each Third Party Broker Dealer
and its registered representatives ("Registered Representatives") soliciting
applications for the Products shall be duly and appropriately licensed,
registered and otherwise qualified for the sale of the Products under the NASD
Rules and federal and state securities and insurance laws applicable to the
offer and sale of the Products. The Distributor shall have full responsibility
for the supervision of all Third Party Broker Dealers and shall assume, and
indemnify and hold EOC harmless from and against, all liability for the acts and
omissions of any Third Party Broker Dealer or its Registered Representatives.
Section 1.6 The Distributor is authorized to recommend the appointment of
Third Party General Agents and Qualified Agents (as hereinafter defined) of such
Third Party General Agent as agents of EOC for the sale of particular Products.
As used herein a "Qualified Agent" shall mean an insurance agent of a Third
Party General Agent who is licensed to sell products such as the Products it is
being appointed to sell in all states and other jurisdictions in which such
agent intends to sell such Products and, if such Products are both securities
and insurance products, is also a Registered Representative of the Third Party
Broker Dealer affiliated with such Third Party General, an "Appointed EOC Agent"
shall mean a Qualified Agent who has been appointed as an agent of EOC for the
sale of particular Products, and a "Sales Representative" shall mean a
Registered Representative or Appointed EOC Agent, as the case may be. Each Sales
Agreement with a Third Party General Agent, hereafter entered into, shall
obligate such party to apply for and maintain proper insurance licenses for
itself and each of its Appointed EOC Agents in all states and other
jurisdictions in which applications for Products are to be solicited by such
agent. EOC will appoint Qualified Agents recommended by the Distributor as
Appointed EOC Agents in all states and other jurisdictions in which such agent
proposes to solicit applications for Products, provided that EOC reserves the
right to refuse to appoint any Third Party General Agent or individual agent
recommended by the Distributor which EOC determines in its sole discretion to be
unsatisfactory for appointment and, following written notice to the Distributor,
to terminate any such appointment thereafter.
Section 1.7 The parties hereto recognize that Appointed EOC Agents will be
acting as insurance agents of EOC and that the obligations and rights of the
Distributor to supervise such persons shall be limited to the extent
specifically described herein or required under applicable
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<PAGE>
federal or state securities laws or NASD Rules. All Sales Agreements hereinafter
entered into shall specifically provide that no sales representative shall be a
third party beneficiary of this Agreement or of such Sales Agreement. No Sales
Representative shall be considered an agent or employee of either EOC or the
Distributor.
Section 1.8 The Distributor shall take reasonable steps to ensure that no
Sales Representative shall recommend the purchase of a Product to any applicant
in the absence of reasonable grounds to believe that the purchase of the Product
is suitable for such applicant. While not limited to the following, a
determination of suitability shall be based on information furnished to the
Sales Representative after reasonable inquiry of such applicant (and any other
information known about the applicant) concerning the applicant's insurance and
investment objectives and financial situation and needs, including the
likelihood (depending upon the nature of the Product) that the applicant will
make sufficient payments or retain the Product for a sufficient period of time
to derive the benefits of the Product.
Section 1.9 The Distributor shall not use, develop or distribute, nor
permit any other person, including, without limitation, any Third Party Broker
Dealer, Third Party General Agent or Sales Representative to use, develop or
distribute, any promotional, sales, marketing and advertising materials relating
to Products, including, without limitation, advertisements, sales brochures,
circulars, research reports, market letters, form letters, seminar texts,
proposals, illustrations, or other materials and communications (collectively,
"Sales Materials") which have not been approved in advance by EOC. The
Distributor agrees that it will make timely filings, as required, with the NASD
and all other securities regulators of all Sales Materials and obtain such
approvals as may be necessary. EOC will be responsible for filing all Sales
Materials, as necessary, with insurance regulatory authorities and obtaining any
required approvals. The Distributor shall not make, nor shall it permit any
other person including, without limitation, any Third Party Broker Dealer, Third
Party General Agent or Sales Representative to make, any warranties or
representations with respect to the Products or communicate any information
regarding EOC, the Products, any Separate Account, any MVA interests or the
funding media as to any Product which is not contained in Sales Materials
approved by EOC, as provided in this Agreement, or included in any registration
statements with respect to such Product effective under the 1933 Act at the time
of such warranty, representation or communication.
Section 1.10 The Distributor shall not possess or exercise any authority
on behalf of EOC other than that expressly conferred pursuant to this Agreement.
In particular, and without limiting the foregoing, the Distributor shall not,
nor shall it permit any Third Party Broker Dealer, Third Party General Agent or
Sales Representative to, (i) modify or amend any Product in any respect or make,
alter or discharge any contract or policy or other contract entered into
pursuant to any such contract or policy; (ii) waive any contract or policy
provision; (iii) extend the time for payment of any premiums; (iv) receive any
monies in payment of premiums in respect of any contract or policy (except for
the sole purpose of forwarding the same to EOC); (v) make any representations
concerning any of the terms, rates, charges or provisions of any contract or
policy except as expressly authorized in writing by EOC, (vi) agree to any
private labeling of any Product or sell or distribute any Product under any name
other than EOC, (vii) enter into any reinsurance or coinsurance agreement or
undertaking, or (viii) issue, modify or amend any regulations or
-4-
<PAGE>
procedures concerning the Products or the sale or distribution of the Products,
without in each case first obtaining the prior consent of EOC thereto.
Section 1.11 The Distributor shall be responsible for maintaining all
records with respect to Sales Representatives and for furnishing periodic
reports to EOC as to the sale of Products made pursuant to Sales Agreements
entered into pursuant to this Agreement.
Section 1.12 Anything in this Agreement to the contrary notwithstanding,
EOC shall retain the ultimate right of control over, and the responsibility for,
the issuance, servicing and marketing of the Products, including the right to
review and approve all advertising concerning the Products, to suspend sales of
the Products in any jurisdiction or jurisdictions, to appoint and discharge its
agents authorized to sell the Products, and to refuse to sell a Product to any
applicant for any reason whatsoever.
-5-
<PAGE>
ARTICLE II
Recordkeeping Responsibility for the Products
Section 2.1 The Distributor and EOC shall each cause to be maintained and
preserved such accounts, books and other documents as are required of each of
them by the 1934 Act and 1940 Act and any other applicable laws and regulations.
In particular, without limiting the foregoing, the Distributor shall cause all
the books and records in connection with the offer and sale of the Products to
be maintained and preserved in conformity with the requirements of Rules 17a-3
and 17a-4 under the 1934 Act and as may otherwise be required under the NASD
Rules and federal and applicable state securities laws, to the extent that such
requirements are applicable to the Products.
Section 2.2 The Distributor and EOC shall each submit to all regulators
and administrative bodies having jurisdiction over the sales of the Products,
present or future, any information, reports or other material that any such body
may request or require pursuant to applicable laws or regulations. In
particular, without limiting the foregoing, EOC agrees that any books and
records which it maintains which are required to be maintained by the
Distributor under Rule 17a-3 or 17a-4 of the 1934 Act shall be subject to
inspection by the Securities and Exchange Commission ("SEC") in accordance with
Section 17(a) of the 1934 Act.
Section 2.3 The Distributor and EOC each agree and understand that all
documents, reports, records, books, files and other materials required under
applicable NASD regulations and federal and state securities laws relative to
the sale of Products shall be the property of the Distributor, with the
exception of any books and records maintained by EOC which relate to sales
compensation and which shall be the joint property of EOC and the Distributor.
If, however, such documents, reports, records, books, files and other materials
which are the property of the Distributor are required by applicable regulation
or law to be maintained also by EOC, such material shall be the joint property
of the Distributor and EOC. All other documents, reports, records, books, files
and other materials maintained relative to this Agreement shall be the property
of EOC. Upon the termination of this Agreement, all such material shall be
returned to the applicable party.
Section 2.4 The Distributor and EOC, from time to time during the term of
this Agreement, shall allocate among themselves, subject to a right of further
delegation, the administrative responsibility for maintaining and preserving the
books, records and accounts kept in connection with the Products; provided,
however, in the case of books, records and accounts kept pursuant to a
requirement of applicable law or regulation, the ultimate responsibility for
maintaining and preserving such books, records and accounts shall be that of the
party which is required to maintain or preserve such books, records and accounts
under the applicable law or regulation, and such books, records and accounts
shall be maintained and preserved under the supervision of that party. The
Distributor and EOC shall cause each other to be furnished with such reports as
each may reasonably request for the purpose of meeting its respective reporting
and recordkeeping requirements under such regulations and laws and under the
insurance laws of the State of Colorado and any other applicable states or
jurisdictions.
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<PAGE>
ARTICLE III
Sale Procedures
Section 3.1 EOC represents and warrants that all Products and units of
interest therein, if any, which must be registered under the 1933 Act have been
so registered, that all Separate Accounts to which any of the products are
allocated are registered under the 1940 Act, that the Products which are
insurance products are qualified to be sold under the insurance laws and that
the Products which are securities are qualified to be sold under the applicable
securities laws of all states and other jurisdictions in which the Products are
authorized for sale. EOC further represents and warrants that it is a life
insurance company duly organized under the laws of the State of Colorado in good
standing and authorized to conduct business under the laws of each state in
which the Products are offered and sold.
Section 3.2 The Sales Agreements hereafter entered into will obligate
Third Party Broker Dealers, Third Party General Agents and Sales Representatives
to use only the currently effective prospectuses, statements of additional
information ("SAIs") and other authorized materials in soliciting the sale of
the Products.
Section 3.3 The Sales Agreements hereafter entered into shall provide that
all applications for the Products shall be made on application forms supplied by
EOC or in a form otherwise satisfactory to EOC, and shall be forwarded directly
to EOC, together with any other required documentation and all premiums and
other sums at the address indicated on such application or to such other address
as EOC may, from time to time, designate in writing. Checks, money orders or
electronic transmissions of funds in payment on any Product shall be drawn to
the order of "Equitable of Colorado, Inc." All applications for Products shall
be subject to acceptance or rejection by EOC at its discretion. Any
applications, other documents or payments received by the Distributor shall be
immediately remitted by the Distributor to EOC. All matters relating to the
review and acceptance of applications and the negotiation and issuance of the
Products shall be solely within EOC's control.
Section 3.4 All money payable in connection with the Products, whether as
purchase payments or otherwise, and whether paid by, or on behalf of any
applicant or Product owner, is the property of EOC. If such money is not
transmitted directly by a Third Party Broker Dealer or the Third Party General
Agent to EOC in accordance with the administrative procedures of EOC and is
received by the Distributor, it shall be transmitted promptly by the Distributor
in accordance with the administrative procedures of EOC without any deduction or
offset for any reason, including by example but not limitation, any deduction or
offset for compensation claimed by the Distributor or payable to the Third Party
Broker Dealers or Third Party General Agents, without the prior written consent
of EOC. No payments shall be accepted by the Distributor in connection with the
Products.
Section 3.5 Subject to Section 4.2 below, EOC shall provide to the
Distributor copies of such prospectuses, statements of additional information,
financial statements sales materials and other documents in such numbers as the
Distributor shall reasonably request for use in connection with the solicitation
of applications for the Products.
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<PAGE>
Section 3.6 Unless otherwise agreed in writing by EOC, neither the
Distributor, the Third Party Broker Dealers, the Third Party General Agents nor
the Sales Representatives shall have any interest in any premiums, surrender
charges, deductions or other fees payable to EOC.
ARTICLE IV
Commissions and Expense Allowances
Section 4.1 EOC will pay the Distributor as full and complete compensation
for its services under this Agreement a commission and an expense allowance on
each premium actually received by EOC on a contract or policy (a "Contract") for
a Product solicited by a Third Party Broker Dealer and its affiliated Third
Party General Agent pursuant to a Sales Agreement. The amount of such commission
and such expense allowance shall, in each case, be determined in accordance with
the provisions of Schedule II annexed hereto. In no event, however, shall any
compensation paid hereunder exceed the compensation paid in the relevant market
for comparable services. Commissions and expense allowances shall be due and
payable by EOC to the Distributor monthly following the end of each calendar
month in an amount equal to the difference between (1) the total amount of all
commissions and expense allowances due and payable for the calendar year in
question calculated as above provided through and including the last day of such
calendar month and (2) all commissions and expense allowances previously paid to
the Distributor on account of such calendar year. EOC will maintain appropriate
documentation supporting the calculation of commissions and expense allowances
due and payable hereunder which shall be available to the Distributor upon
request. For the purposes of the above formula, the amount of total annual
premiums collected shall be reduced by the amount of premiums returned in the
year in question because of declinations, free look cancellations and, if within
twelve months of original issuance, rescissions.
Section 4.2 The Distributor shall pay all costs and expenses incurred by
it in the performance of its services hereunder, including without limitation,
sums due and payable to Third Party Broker Dealers and/or Third Party General
Agents under the Sales Agreements, without reimbursement or contribution by EOC
or any Separate Account, except that (a) unless otherwise provided in Schedule 1
to the contrary, EOC will reimburse the Distributor for sums due and payable to
Third Party Broker Dealers and/or Third Party General Agents under the Sales
Agreements, (b) the costs of printing the prospectuses, statements of additional
information and sales material used in connection with the solicitation of
applications for the Products pursuant to the Sales Agreements shall be borne by
EOC or the Distributor, or shall be paid in part by each of them, as EOC and the
Distributor shall from time to time mutually agree and (c) appointment and
similar fees with respect to Appointed EOC Agents, including without limitation,
initial appointment fees, renewal appointment fees, transfer fees and
termination fees, shall be borne by EOC or the Distributor, or shall be paid in
part by each of them, as EOC and the Distributor shall from time to time
mutually agree. Sums paid to Third Party Broker Dealers and/or Third Party
General Agents under the Sales Agreements shall be commissions and/or expense
allowances as provided in such Sales Agreements. Sums, if any, borne by EOC with
respect to printing costs pursuant to subsection (b) above and/or appointment
and/or similar fees pursuant to subsection (c) above will be expense allowances.
-8-
<PAGE>
ARTICLE V
Complaints and Regulatory Proceedings
Section 5.1 The Distributor and EOC agree to cooperate fully in insurance
regulatory investigations or proceedings or judicial proceedings arising in
connection with the offering, sale or distribution of the Products. The
Distributor and Equitable Life further agree to cooperate fully in any
securities regulatory investigation or proceeding or judicial proceeding with
respect to Equitable Life, the Distributor, their respective affiliates and
agents or representatives, to the extent that such investigation or proceeding
is in connection with the Products.
Section 5.2 Without limiting the generality of Section 5.1, the
Distributor and EOC agree that:
(A) Each will promptly notify the other of any customer complaint or
notice of any regulatory investigation or proceeding or judicial proceeding
received by either of them or any agent or representative thereof which may
affect EOC's issuance of the Products and/or the Distributor.
(B) Each will promptly notify the other of any customer complaint or
notice of any regulatory investigation or proceeding received by it or any of
its affiliates with respect to any Product or the sale thereof.
(C) In the case of a substantive customer complaint, the Distributor
and EOC will cooperate in investigating such complaint and any response to such
complaint which either of them has prepared will be sent to the other for
approval not less than five (5) business days prior to its transmittal to the
customer or regulatory authority, except that if a more prompt response is
required, the proposed response shall be communicated by telephone or facsimile
transmission.
ARTICLE VI
Indemnification
Section 6.1 EOC agrees to indemnify and hold harmless the Distributor and
its officers, directors, employees, agents and representatives against any
losses, claims, damages or liabilities, joint or several, to which the
Distributor or its affiliates or such officer or director may become subject,
under the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact, required to be
stated therein or necessary to make the statements therein not misleading,
contained in
(A) any registration statement relating the Products or any interests
offered under the Products, or any amendment thereof, or
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<PAGE>
(B) any document executed by EOC specifically for the purpose of
qualifying the Products for sale under the securities laws of any jurisdiction.
EOC will reimburse the Distributor and each such officer, director, employee,
agent and/or representative for any legal or other expenses reasonably incurred
by the Distributor or such officer, director, employee, agent and/or
representative in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that EOC will not be
liable in any such case to the extent that such loss, claim, damage or liability
arises out of, or is based upon, an untrue statement or alleged untrue statement
or omission or alleged omission made in reliance upon and in conformity with
information (including, without limitation, negative responses to inquiries)
furnished to EOC by or on behalf of the Distributor specifically for use in the
preparation of any such registration statement or any amendment thereof or any
such qualification document or any amendment thereof.
Section 6.2 The Distributor agrees to indemnify and hold harmless EOC, its
directors, each of its officers who has signed a registration statement relating
to a Product, each person, if any, who controls EOC within the meaning of the
1933 Act or the 1934 Act, and the Separate Accounts against any losses, claims,
damages or liabilities to which EOC and any such director, officer, employee,
agent and/or representative or controlling person may become subject, under the
1933 Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon:
(A) Any untrue statement or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, contained in (i)
any registration statement relating to a Product or any interest offered under
the Product or any amendment thereof, or (ii) any qualification document
relating to the Product or interest offered under the Product or any amendment
thereof, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with information (including without
limitation, negative responses to inquiries) furnished to EOC by the Distributor
specifically for use in the preparation of such registration statement,
qualification document or amendment thereof; or
(B) Any unauthorized use of sales materials or any verbal or written
misrepresentations or any unlawful sales practices concerning the Products by
the Distributor or otherwise attributable to a failure by the Distributor to
discharge properly its responsibilities under this Agreement; or
(C) Claims by officers, directors, employees, agents or
representatives or employees of the Distributor for commissions, service fees,
expense allowances or other compensation or remuneration of any type.
The Distributor will reimburse EOC and any director, officer, employee, agent,
representative or controlling person for any legal or other expenses reasonably
incurred by EOC, such director, officer, employee, agent and/or representative
or controlling person in connection with
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<PAGE>
investigating or defending any such loss, claim, damage, liability or action.
This indemnity agreement will be in addition to any liability which the
Distributor may otherwise have.
Section 6.3 Promptly after receipt by a party entitled to indemnification
("Indemnified Party") under this Article VI of notice of the commencement of any
action, if a claim in respect thereof is to be made against any person obligated
to provide indemnification under this Article VI ("Indemnifying Party"), such
Indemnified Party will notify the Indemnifying Party in writing of the
commencement thereof, but the omission so to notify the Indemnifying Party will
not relieve it from any liability under this Article VI, except to the extent
that the omission results in a failure of actual notice to the Indemnifying
Party and such Indemnifying Party is damaged solely as a result of the failure
to give such notice. In case any such action is brought against any Indemnified
Party, and it notifies the Indemnifying Party of the commencement thereof, the
Indemnifying Party will be entitled to participate therein, and, to the extent
that it may wish to assume the defense thereof, with separate counsel
satisfactory to the Indemnified Party. Such participation shall not relieve such
Indemnifying Party of the obligation to reimburse the Indemnified Party for
reasonable legal and other expenses incurred by such Indemnified Party in
defending itself, except for such expenses incurred after the Indemnifying Party
has deposited funds sufficient to effect the settlement, with prejudice, of the
claim in respect of which indemnity is sought. Any such Indemnifying Party shall
not be liable to any such Indemnified Party on account of any settlement of any
claim or action effected without the consent of such Indemnifying Party.
Section 6.4 The indemnity agreements contained in this Article VI shall
remain operative and in full force and effect, regardless of:
(A) any investigation made by or on behalf of the Distributor or any
officer or director thereof or by or on behalf of Equitable Life or any officer
or director thereof;
(B) delivery of any Products and payments therefor; and
(C) any termination of this Agreement.
A successor by law of the Distributor or of any other party to this Agreement,
as the case may be, shall be entitled to the benefits of the indemnity
agreements contained in this Article VI.
ARTICLE VII
Term of Agreement
Section 7.1 This Agreement shall become effective as of the date first
above written and shall continue in full force and effect from year to year
thereafter, until terminated as herein provided.
Section 7.2 This Agreement may be terminated by any party hereto on not
less than sixty (60) days' prior written notice to the other parties or by an
agreement in writing signed by all of the parties hereto. Unless otherwise
agreed by the parties hereto, this Agreement shall automatically be terminated
in the event of its assignment.
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<PAGE>
Section 7.3 Upon termination of this Agreement, all authorizations,
rights, and obligations shall cease except as expressly provided to the contrary
herein and except for the obligations of the parties to settle accounts
hereunder, including the settlement of monies due in connection with Products in
effect at the time of termination or issued pursuant to applications received by
EOC prior to termination, and the agreements contained in Articles V and VI.
ARTICLE VIII
Miscellaneous
Section 8.1 None of the parties hereto shall be liable to the other for
any action taken or omitted by it, or any of its officers, agents or employees,
in performing their respective responsibilities under this Agreement in good
faith and without negligence, willful misfeasance or reckless disregard of such
responsibilities.
Section 8.2 The Distributor will execute such papers and do such acts and
things as shall from time to time be reasonably requested by EOC for the purpose
of (a) maintaining the registration of the interests under the Contracts under
the 1933 Act and the Separate Accounts under the 1940 Act, and (b) qualifying
and maintaining qualification of the Contracts for sale under the applicable
laws of any state.
Section 8.3 All notices under this Agreement shall be given in writing and
addressed as follows:
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<PAGE>
if to the Distributor, to:
Equitable Distributors, Inc.
1290 Avenue of the Americas
New York, New York 10104
Attention: President
if to EOC, to:
The Equitable of Colorado, Inc.
370 17th Street, Suite 4950
Denver, Colorado 80202
Attention: Chief Distribution Officer
or to such other address as such party may hereafter specify in writing. Each
such notice shall be either hand delivered or transmitted by certified United
States mail, return receipt requested, and shall be effective upon delivery.
Section 8.4 If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
Section 8.5 This Agreement constitutes the entire agreement between the
parties hereto and may be amended only in a written instrument executed by all
parties hereto.
Section 8.6 This Agreement shall be subject to the provisions of the 1934
Act and, to the extent applicable, the 1940 Act and the rules, regulations and
rulings thereunder and of the NASD, from time to time in effect, including such
exemptions from the 1940 Act as the SEC may grant, and the terms hereof shall be
interpreted and construed in accordance therewith.
Section 8.7 This Agreement shall be interpreted in accordance with the
laws of the State of Colorado.
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<PAGE>
Section 8.8 This Agreement may be executed in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
amended and restated as of [Date] and to be signed by their respective officials
thereunto duly authorized, as of said date.
THE EQUITABLE OF COLORADO EQUITABLE DISTRIBUTORS, INC.
for itself and as depositor on behalf
of each of the Separate Accounts. By:
--------------------------------
Name:
---------------------------
Title:
-------------------------
By:
------------------------------------
Name:
--------------------------------- By:
Title: -----------------------------
-------------------------------- Name:
-------------------------
Title:
------------------------
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SCHEDULE I
PRODUCTS
PART 1 - Separate Account VLI
------ --------------------
The Distributor shall distribute the following Products allocated to
Separate Account VLI:
IL Protector
PART 2.-Separate Account VA
------ -------------------
The Distributor shall distribute the following Products allocated to
Separate Account VA:
Accumulator Plus (Non-Qualified)
Accumulator Plus (IRA)
Accumulator Plus Roth IRA
Accumulator Plus (QP)
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<PAGE>
SCHEDULE II
COMPENSATION
This Schedule II is annexed to the Distribution Agreement dated as of
January 1, 1998 by and between Equitable of Colorado, Inc., and Equitable
Distributors, Inc.
Compensation payable pursuant to Section 4.1 of the Distribution Agreement
shall be payable as follows:
<TABLE>
<CAPTION>
Aggregate Base Expense
Compensation Commision Allowance
Total Annual Premiums on Premiums on Premiums on Premiums
Received(i) Received(ii) Received Received(iii) Trail
---------- ----------- -------- ------------ -----
<S> <C> <C> <C> <C>
Up to $350 Million
The next $350 Million
(i.e., over $350 but not more
than $700 Million)
The next $350 Million
(i.e., over $700 but not more
than $1,050 Million)
The next $350 Million
(i.e., over $1,050 but not more
than $1,400 Million)
All additional premiums
(i.e., over $1,400 Million)
</TABLE>
- -------------------------
(i) Compensation will be paid on each premium received by EOC on any contract
or policy for a Product which was solicited by a Third Party Broker Dealer and
its affiliated Third Party General Agent pursuant to a Sales Agreement (a
"Contract"). Compensation on each such premium will be in an amount equal to the
premium in question multiplied by the appropriate percentage provided for above.
The percentage used in each case will be determined on the basis of the
aggregate amount of all premiums previously received by EOC on all Contracts
during the calendar year in question.
(ii) Aggregate compensation on premiums received is the sum of base commissions
on premiums received and expense allowances on premiums received.
(iii) Expense allowances are paid in accordance with Colorado Insurance Law and
regulations thereunder. No payment hereunder will be used to effect compensation
in excess of the limits for the sale of insurance.
-i-
Document Summary: In this agreement EQFC as a principal underwriter of HRT
shares agrees to make HRT shares available to eligible EOC separate accounts in
connection with the sale of EOC variable products.
FORM OF AGREEMENT
CONCERNING
SALES OF SHARES
OF
THE HUDSON RIVER TRUST
AGREEMENT, dated as of [ ] by and among EQ FINANCIAL CONSULTANTS, INC.
("EQFC") and THE EQUITABLE OF COLORADO, INC.("EOC"), individually and as
depositor on behalf of each presently existing or hereafter created separate
account supporting EOC variable products (each an EOC "Separate Account" and
collectively the "EOC Separate Accounts").
W I T N E S S E T H:
WHEREAS, EQFC is a principal underwriter of shares of The Hudson River
Trust (the "Trust") pursuant to a Distribution Agreement between the Trust and
EQFC dated as of July 8, 1996 (the "Distribution Agreement");
WHEREAS, the Trust is a series mutual fund, registered as an open-end
investment company under the Investment Company Act of 1940 (the "1940 Act");
WHEREAS, shares of the Trust are sold only to (a) separate accounts
("Eligible Separate Accounts") of insurance companies ("Participating Insurance
Companies") issuing variable life insurance and annuity products ("Variable
Products") whose net premiums, contributions or other considerations are
allocated to such Eligible Separate Accounts, and (b) tax-qualified retirement
plans ("Retirement Plans");
WHEREAS, the Board of Trustees of the Trust may, in its sole discretion,
determine that certain classes of shares and/or portfolios shall be available
only to certain types of Variable Products or to certain Participating Insurance
Companies and/or Retirement Plans;
WHEREAS, EOC is a Participating Insurance Company and issues Variable
Products, whose net premiums are allocated to the EOC Separate Accounts;
WHEREAS, the Separate Accounts are Eligible Separate Accounts and are
eligible to invest in shares of the portfolios of the Trust more particularly
described in the Distribution Agreement;
WHEREAS, EQFC is authorized pursuant to the Distribution Agreement to enter
into sales agreements with Participating Insurance Companies which agree to
participate in the distribution of the shares directly or through affiliates by
means of the distribution of Variable Products;
WHEREAS, EOC intends to distribute its Variable Products on behalf of the
EOC Separate Accounts through its affiliates EQFC and Equitable Distributors,
Inc.("EDI"), each of which is a registered broker-dealer under the Securities
Exchange Act of 1934 (the "1934 Act") and a member of the National Association
of Securities Dealers, Inc. (the "NASD");
WHEREAS, EQFC and EOC for itself and on behalf of the Separate Accounts
wish to define and describe the conditions under which shares of the Trust will
be made available for investment by the EOC Separate Accounts;
NOW, THEREFORE, EQFC and EOC for itself and as depositor on behalf of the
EOC Separate Accounts hereby agree as follows:
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<PAGE>
1. The Board of Trustees of the Trust has adopted a Policy on Conflicts
(the "Policy"). This Agreement shall be subject to the provisions of the Policy,
the terms of which shall be incorporated herein by reference, made a part hereof
and controlling. The Policy may be amended or superseded, without prior notice,
and this Agreement shall be deemed amended to the extent the Policy is amended
or superseded. EOC warrants and represents for itself and each of the EOC
Separate Accounts that it will act in a manner consistent with the Policy as so
set forth and as it may be amended or superseded, so long such EOC Separate
Account owns any shares of the Trust. This provision shall survive the
termination of this Agreement.
2. EQFC will make available to the Separate Accounts all classes of shares
of all of the portfolios of the Trust which it is authorized to distribute under
the Distribution Agreement in connection with the distribution by EOC of its
Variable Products allocated to the Separate Accounts.
3. Purchases and redemptions of shares of any class of any portfolio of the
Trust will be at net asset value of the shares of such portfolio, computed as
set forth in the most recent Trust prospectus and Statement of Additional
Information (respectively, "Trust Prospectus" and "SAI") for such class and
portfolio and any supplements thereto, and shall be submitted by EOC to the
Trust's transfer agent pursuant to procedures and in accordance with payment
provisions adopted by the parties from time to time. No shares may be sold or
transferred by EOC or any of the EOC Separate Accounts except to the Trust or an
Eligible Separate Account which is authorized to own shares of such class of
such portfolio.
4. In good faith and as soon as practicable, EQFC will provide, at Trust
expense, camera ready copy of the current Trust Prospectus and SAI and any
supplements thereto for distribution by EOC with the prospectus for the Variable
Products, and camera ready copy of Trust proxy materials, annual and semi-annual
reports, and any supplements thereto. To the extent that the foregoing documents
are distributed by EOC to existing owners of Variable Products, EQFC will
request reimbursement from the Trust for the printing and mailing costs
associated with such distribution, upon receipt from EOC of adequate
documentation for presentation to the Trust. EQFC will use its best efforts to
coordinate with EOC and to provide notice of anticipated filings or supplements.
EOC may alter the form of the Trust Prospectus, SAI, annual and semi-annual
reports, proxy statements or other Trust documents, with the prior approval of
the Trust's officers. EOC shall bear all costs associated with such alteration
of form. Without the prior written consent of EQFC, which shall not be
unreasonably withheld or delayed, EOC shall not (i) give any information or make
any representations concerning the Trust, its shares or operations except those
contained in the most recent Trust Prospectus and SAI and any supplements
thereto or (ii) use any description of the Trust in any sales literature or
advertising (including brochures, letters, illustrations and other similar
materials, whether transmitted directly to potential purchasers of Variable
Products or published in print or audio-visual media).
5. (a) EOC shall indemnify and hold harmless EQFC from any and all losses,
claims, damages or liabilities (or actions in respect thereof) to which EQFC may
be subject, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or result from negligent, improper, fraudulent
or unauthorized acts or omissions by EOC, their broker-dealers or their
respective employees, agents or representatives, including but not limited to
improper solicitation of applications for the Variable Products; provided,
however, that EOC shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon the
negligent, improper, fraudulent or unauthorized acts or omissions by EQFC or its
employees, agents or representatives in EQFC's capacity as a broker-dealer of
EOC.
(b) EQFC will indemnify and hold harmless EOC and the EOC Separate
Accounts against any losses, claims, damages or liabilities, to which EOC or the
EOC Separate Accounts may become subject, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of any material fact
contained in any Trust Prospectus and/or SAI or any supplements thereto, (ii)
the omission or alleged omission to state any material fact required to be
stated in any Trust Prospectus and/or SAI or any supplements thereto or
necessary to make the statements therein not misleading, or (iii) other
misconduct or negligence of EQFC in its capacity as a
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<PAGE>
distributor of the Trust; and will reimburse EOC and the EOC Separate Accounts
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending against such loss, claim, damage, liability or
action; provided, however, that EQFC shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in any Trust Prospectus and/or SAI or any such supplement in good
faith reliance upon and in conformity with written information furnished by EOC
specifically for use in the preparation thereof.
(c) EQFC shall not indemnify EOC for the failure to furnish, send or
give an applicant for a Variable Product, a contract owner or a policyholder at
or prior to written confirmation of the sale thereof and at such later times as
required by state or federal securities laws, a copy of the prospectus relating
to the Variable Products, together with the applicable Trust Prospectus, any
supplements to the applicable Trust Prospectus furnished to EOC and, if
requested by the applicant from EOC or required by applicable law, the
applicable Trust SAI and any supplements thereto and, as required by applicable
law, the Trust's annual and semi-annual reports, other required reports and
proxy statements.
6. This Agreement will terminate automatically if it is assigned. The
Agreement shall also terminate automatically in its entirety if the Distribution
Agreement is terminated or in part as to any Class 1B Shares which EQFC is no
longer authorized to distribute under the Distribution Agreement, as the same
may be modified and amended from time to time.
7. If EQFC is notified that the Distribution Agreement will be terminated
and that it shall cease to be a principal underwriter of the Class 1B Shares of
the Trust, EQFC shall immediately notify EOC in writing of such termination,
and this Agreement shall continue in effect until the effective date of the
termination of the Distribution Agreement. This Agreement may be terminated by
any party at any time on one hundred eighty days' written notice to the other
parties, without the payment of any penalty.
8. This Agreement shall be subject to the provisions of the 1940 Act, the
1934 Act and the Securities Act of 1933 and the rules, regulations, and rulings
thereunder and of the NASD, from time to time in effect, including such
exemptions from the 1940 Act and no-action positions as the Securities and
Exchange Commission or its staff may grant, and the terms hereof shall be
interpreted and construed in accordance therewith. Without limiting the
generality of the foregoing, the term "assigned" shall not include any
transaction exempt from section 15(b)(2) of the Investment Company Act by order
of the Securities and Exchange Commission or any transaction as to which the
staff of the Securities and Exchange Commission has taken a no-action position.
9. EOC shall, in connection with its obligations hereunder, comply with all
laws and regulations applicable thereto, whether federal or state, and whether
relating to insurance, securities or other general areas, including but not
limited to the record keeping and sales supervision requirements of such laws
and regulations.
10. EQFC shall immediately notify EOC of the issuance by any regulatory
body of any stop order with respect to any Trust Prospectus or SAI or the
initiation of any proceeding for that purpose or for any other purpose relating
to the registration or an offering of shares of the Trust and of any other
action or circumstances that may prevent the lawful offer or sale of shares of
the Trust in any state or jurisdiction.
11. EQFC and EOC shall each submit to all regulatory and administrative
bodies having jurisdiction over the operation of any party hereto or the Trust,
present or future, any information, reports or other material which any such
body by reason of this Agreement may request or require as authorized by
applicable laws or regulations.
12. EQFC shall keep confidential any information about the Variable
Products or policy owners obtained pursuant to this Agreement and shall disclose
such information only if EOC has authorized such disclosure, or if such
disclosure is required by state or federal regulatory bodies, as authorized by
applicable law. EQFC will notify EOC of disclosures required by regulatory
bodies as soon as possible.
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<PAGE>
13. EQFC agrees that all records and other data pertaining to the Variable
Products are the exclusive property of EOC and that all such records and other
data in EQFC's possession, whether maintained in written or electronic format,
shall be furnished to EOC upon termination of this Agreement for any reason
whatsoever. This shall not preclude EQFC from keeping copies of such data or
records for its own files subject to the provisions of this paragraph.
14. EOC retains the ultimate right of control over, and responsibility for
marketing the Variable Products.
15. EQFC represents that neither EQFC nor any person employed in any
material connection with respect to the services provided pursuant to this
Agreement:
(a) Within the last 10 years has been convicted of any felony or
misdemeanor arising out of conduct involving embezzlement, fraudulent
conversion, or misappropriation of funds or securities, or involving violations
of Sections 1341, 1342, or 1343 of Title 18, United States Code; or
(b) Within the last 10 years has been found by any state regulatory
authority to have violated or has acknowledged violation of any provision of any
state insurance law involving fraud, deceit or knowing misrepresentation; or
(c) Within the last 10 years has been found by any federal or state
regulatory authorities to have violated or have acknowledged violation of any
provision of federal or state securities laws involving fraud, deceit or knowing
misrepresentation.
16. EQFC and EOC each represent to the other that no commission or other
fee shall be charged or paid to any person or entity in connection with the sale
or purchase of any shares of the Trust to or from the EOC Separate Accounts,
other than regular salary or wages.
17. This Agreement may be executed in multiple counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written. The effective date of
this Agreement shall be the date first above written.
THE EQUITABLE OF COLORADO, INC. EQ FINANCIAL CONSULTANTS, INC.
for itself and as depositor on behalf of
all presently existing and hereafter
created separate accounts supporting its
variable products
By:
------------------------------
Name:
---------------------------
Title:
-------------------------
By:
------------------------------------
Name:
--------------------------------- By:
Title: -----------------------------
--------------------------------- Name:
-------------------------
Title:
------------------------
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108082
FORM OF AGREEMENT
CONCERNING
SALES OF SHARES
OF
THE HUDSON RIVER TRUST
AGREEMENT, dated as of [ ] by and among EQUITABLE DISTRIBUTORS, INC.
("EDI") and THE EQUITABLE OF COLORADO, INC.("EOC"), individually and as
depositor on behalf of each presently existing or hereafter created separate
account supporting EOC variable products (each an EOC "Separate Account" and
collectively the "EOC Separate Accounts").
W I T N E S S E T H:
WHEREAS, EDI is a principal underwriter of shares of The Hudson River
Trust (the "Trust") pursuant to a Distribution Agreement between the Trust and
EDI dated as of July 8, 1996 (the "Distribution Agreement");
WHEREAS, the Trust is a series mutual fund, registered as an open-end
investment company under the Investment Company Act of 1940 (the "1940 Act");
WHEREAS, shares of the Trust are sold only to (a) separate accounts
("Eligible Separate Accounts") of insurance companies ("Participating Insurance
Companies") issuing variable life insurance and annuity products ("Variable
Products") whose net premiums, contributions or other considerations are
allocated to such Eligible Separate Accounts, and (b) tax-qualified retirement
plans ("Retirement Plans");
WHEREAS, the Board of Trustees of the Trust may, in its sole
discretion, determine that certain classes of shares and/or portfolios shall be
available only to certain types of Variable Products or to certain Participating
Insurance Companies and/or Retirement Plans;
WHEREAS, EOC is a Participating Insurance Company and issues Variable
Products, whose net premiums are allocated to the EOC Separate Accounts;
WHEREAS, the Separate Accounts are Eligible Separate Accounts and are
eligible to invest in shares of the portfolios of the Trust more particularly
described in the Distribution Agreement;
WHEREAS, EDI is authorized pursuant to the Distribution Agreement to
enter into sales agreements with Participating Insurance Companies which agree
to participate in the distribution of the shares directly or through affiliates
by means of the distribution of Variable Products;
WHEREAS, EOC intends to distribute its Variable Products on behalf of
the EOC Separate Accounts through its affiliates, EDI and EQ Financial
Consultants, Inc. ("EQFC"), each of which is a registered broker-dealer under
the Securities Exchange Act of 1934 (the "1934 Act") and a member of the
National Association of Securities Dealers, Inc. (the "NASD");
WHEREAS, EDI and EOC for itself and on behalf of the Separate Accounts
wish to define and describe the conditions under which shares of the Trust will
be made available for investment by the EOC Separate Accounts;
108082
<PAGE>
NOW, THEREFORE, EDI and EOC for itself and as depositor on behalf of
the EOC Separate Accounts hereby agree as follows:
1. The Board of Trustees of the Trust has adopted a Policy on Conflicts
(the "Policy"). This Agreement shall be subject to the provisions of the Policy,
the terms of which shall be incorporated herein by reference, made a part hereof
and controlling. The Policy may be amended or superseded, without prior notice,
and this Agreement shall be deemed amended to the extent the Policy is amended
or superseded. EOC warrants and represents for itself and each of the EOC
Separate Accounts that it will act in a manner consistent with the Policy as so
set forth and as it may be amended or superseded, so long such EOC Separate
Account owns any shares of the Trust. This provision shall survive the
termination of this Agreement.
2. EDI will make available to the Separate Accounts all classes of
shares of all of the portfolios of the Trust which it is authorized to
distribute under the Distribution Agreement in connection with the distribution
by EOC of its Variable Products allocated to the Separate Accounts.
3. Purchases and redemptions of shares of any class of any portfolio of
the Trust will be at net asset value of the shares of such portfolio, computed
as set forth in the most recent Trust prospectus and Statement of Additional
Information (respectively, "Trust Prospectus" and "SAI") for such class and
portfolio and any supplements thereto, and shall be submitted by EOC to the
Trust's transfer agent pursuant to procedures and in accordance with payment
provisions adopted by the parties from time to time. No shares may be sold or
transferred by EOC or any of the EOC Separate Accounts except to the Trust or an
Eligible Separate Account which is authorized to own shares of such class of
such portfolio.
4. In good faith and as soon as practicable, EDI will provide, at Trust
expense, camera ready copy of the current Trust Prospectus and SAI and any
supplements thereto for distribution by EOC with the prospectus for the Variable
Products, and camera ready copy of Trust proxy materials, annual and semi-annual
reports, and any supplements thereto. To the extent that the foregoing documents
are distributed by EOC to existing owners of Variable Products, EDI will request
reimbursement from the Trust for the printing and mailing costs associated with
such distribution, upon receipt from EOC of adequate documentation for
presentation to the Trust. EDI will use its best efforts to coordinate with EOC
and to provide notice of anticipated filings or supplements. EOC may alter the
form of the Trust Prospectus, SAI, annual and semi-annual reports, proxy
statements or other Trust documents, with the prior approval of the Trust's
officers. EOC shall bear all costs associated with such alteration of form.
Without the prior written consent of EDI, which shall not be unreasonably
withheld or delayed, EOC shall not (i) give any information or make any
representations concerning the Trust, its shares or operations except those
contained in the most recent Trust Prospectus and SAI and any supplements
thereto or (ii) use any description of the Trust in any sales literature or
advertising (including brochures, letters, illustrations and other similar
materials, whether transmitted directly to potential purchasers of Variable
Products or published in print or audio-visual media.
5. (a) EOC shall indemnify and hold harmless EDI from any and all
losses, claims, damages or liabilities (or actions in respect thereof) to which
EDI may be subject, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or result from negligent, improper,
fraudulent or unauthorized acts or omissions by EOC, their broker-dealers or
their respective employees, agents or representatives, including but not limited
to improper solicitation of applications for the Variable Products; provided,
however, that EOC shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon the
negligent, improper, fraudulent or unauthorized acts or omissions by EDI or its
employees, agents or representatives in EDI's capacity as a broker-dealer of
EOC.
(b) EDI will indemnify and hold harmless EOC and the EOC Separate
Accounts against any losses, claims, damages or liabilities, to which EOC or the
EOC Separate Accounts may become subject, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of any material fact
contained in any Trust Prospectus and/or SAI or any supplements thereto, (ii)
the omission or alleged omission to state any material
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108082
<PAGE>
fact required to be stated in any Trust Prospectus and/or SAI or any supplements
thereto or necessary to make the statements therein not misleading, or (iii)
other misconduct or negligence of EDI in its capacity as a distributor of the
Trust; and will reimburse EOC and the EOC Separate Accounts for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending against such loss, claim, damage, liability or action; provided,
however, that EDI shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Trust Prospectus and/or SAI or any such supplement in good faith reliance
upon and in conformity with written information furnished by EOC specifically
for use in the preparation thereof.
(c) EDI shall not indemnify EOC for the failure to furnish, send or
give an applicant for a Variable Product, a contract owner or a policyholder at
or prior to written confirmation of the sale thereof and at such later times as
required by state or federal securities laws, a copy of the prospectus relating
to the Variable Products, together with the applicable Trust Prospectus, any
supplements to the applicable Trust Prospectus furnished to EOC and, if
requested by the applicant from EOC or required by applicable law, the
applicable Trust SAI and any supplements thereto and, as required by applicable
law, the Trust's annual and semi-annual reports, other required reports and
proxy statements.
6. This Agreement will terminate automatically if it is assigned. The
Agreement shall also terminate automatically in its entirety if the Distribution
Agreement is terminated or in part as to any Class 1B Shares which EDI is no
longer authorized to distribute under the Distribution Agreement, as the same
may be modified and amended from time to time.
7. If EDI is notified that the Distribution Agreement will be
terminated and that it shall cease to be a principal underwriter of the Class 1B
Shares of the Trust, EDI shall immediately notify EOC in writing of such
termination, and this Agreement shall continue in effect until the effective
date of the termination of the Distribution Agreement. This Agreement may be
terminated by any party at any time on one hundred eighty days' written notice
to the other parties, without the payment of any penalty.
8. This Agreement shall be subject to the provisions of the 1940 Act,
the 1934 Act and the Securities Act of 1933 and the rules, regulations, and
rulings thereunder and of the NASD, from time to time in effect, including such
exemptions from the 1940 Act and no-action positions as the Securities and
Exchange Commission or its staff may grant, and the terms hereof shall be
interpreted and construed in accordance therewith. Without limiting the
generality of the foregoing, the term "assigned" shall not include any
transaction exempt from section 15(b)(2) of the Investment Company Act by order
of the Securities and Exchange Commission or any transaction as to which the
staff of the Securities and Exchange Commission has taken a no-action position.
9. EOC shall, in connection with its obligations hereunder, comply with
all laws and regulations applicable thereto, whether federal or state, and
whether relating to insurance, securities or other general areas, including but
not limited to the record keeping and sales supervision requirements of such
laws and regulations.
10. EDI shall immediately notify EOC of the issuance by any regulatory
body of any stop order with respect to any Trust Prospectus or SAI or the
initiation of any proceeding for that purpose or for any other purpose relating
to the registration or an offering of shares of the Trust and of any other
action or circumstances that may prevent the lawful offer or sale of shares of
the Trust in any state or jurisdiction.
11. EDI and EOC shall each submit to all regulatory and administrative
bodies having jurisdiction over the operation of any party hereto or the Trust,
present or future, any information, reports or other material which any such
body by reason of this Agreement may request or require as authorized by
applicable laws or regulations.
12. EDI shall keep confidential any information about the Variable
Products or policy owners obtained pursuant to this Agreement and shall disclose
such information only if EOC has authorized such
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<PAGE>
disclosure, or if such disclosure is required by state or federal regulatory
bodies, as authorized by applicable law. EDI will notify EOC of disclosures
required by regulatory bodies as soon as possible.
13. EDI agrees that all records and other data pertaining to the
Variable Products are the exclusive property of EOC and that all such records
and other data in EDI's possession, whether maintained in written or electronic
format, shall be furnished to EOC upon termination of this Agreement for any
reason whatsoever. This shall not preclude EDI from keeping copies of such data
or records for its own files subject to the provisions of this paragraph.
14. EOC retains the ultimate right of control over, and responsibility
for marketing the Variable Products.
15. EDI represents that neither EDI nor any person employed in any
material connection with respect to the services provided pursuant to this
Agreement:
(a) Within the last 10 years has been convicted of any felony
or misdemeanor arising out of conduct involving embezzlement, fraudulent
conversion, or misappropriation of funds or securities, or involving violations
of ss.ss. 1341, 1342, or 1343 of Title 18, United States Code; or
(b) Within the last 10 years has been found by any state
regulatory authority to have violated or has acknowledged violation of any
provision of any state insurance law involving fraud, deceit or knowing
misrepresentation; or
(c) Within the last 10 years has been found by any federal or
state regulatory authorities to have violated or have acknowledged violation of
any provision of federal or state securities laws involving fraud, deceit or
knowing misrepresentation.
16. EDI and EOC each represent to the other that no commission or other
fee shall be charged or paid to any person or entity in connection with the sale
or purchase of any shares of the Trust to or from the EOC Separate Accounts,
other than regular salary or wages.
17. This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written. The effective date of
this Agreement shall be the date first above written.
THE EQUITABLE OF COLORADO, INC. EQUITABLE DISTRIBUTORS, INC.
for itself and as depositor on behalf of
all presently existing and hereafter
created separate accounts supporting
its variable products By:
-------------------------
Name:
---------------------
Title:
--------------------
By:
------------------------------------
Name:
--------------------------------- By:
Title: -----------------------------
--------------------------------- Name:
-------------------------
Title:
------------------------
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108082
FORM OF PARTICIPATION AGREEMENT
-------------------------------
Among
EQ ADVISORS TRUST,
-----------------
THE EQUITABLE OF COLORADO, INC.
-------------------------------
EQUITABLE DISTRIBUTORS, INC.,
-----------------------------
and
EQ FINANCIAL CONSULTANTS, INC.
------------------------------
THIS AGREEMENT, made and entered into as of the ___day of ____ by and among
THE EQUITABLE OF COLORADO, INC., ("EOC"), a Colorado stock life insurance
company on its own behalf and on behalf of each of its presently existing and
hereafter created separate accounts (each referred to as the "Account"), EQ
ADVISORS TRUST, a business trust organized under the laws of the State of
Delaware (the "Trust"), and EQUITABLE DISTRIBUTORS, INC., a Delaware
corporation, and EQ FINANCIAL CONSULTANTS, INC., a Delaware corporation
(collectively, the "Distributors").
WHEREAS, the Trust engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts of insurance companies that issue variable life insurance
policies, variable annuity contracts and certificates relating to such policies
or contracts (collectively, the "Variable Contracts") and which have entered
into participation agreements with the Trust and its Distributors (the
"Participating Insurance Companies"); and
WHEREAS, the beneficial interests in the Trust are divided into series
of shares, (each a "Portfolio"), each representing the interest in a particular
managed portfolio of securities and other assets, and each Portfolio is divided
or may be divided into one or more classes of shares, i.e., currently the Class
IA shares and the Class IB shares, or such other classes of shares as may be
created in the future (the "Classes"); and
WHEREAS, one or more Portfolios or Classes thereof may be made
available by the Trust to serve as funding vehicles for Participating Insurance
Companies and their separate accounts funding Variable Contracts; and
WHEREAS, the Trust has received an order from the Securities and
Exchange Commission (the "Commission" or the "SEC") granting Participating
Insurance Companies and their separate accounts funding Variable Contracts
exemptions from the provisions of Sections 9(a), 13(a), 15(a), and 15(b) of the
Investment Company Act of 1940, as amended (the "1940 Act") and Rules
6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit
shares of the Trust and each of its Portfolios or Classes to be sold to and held
by insurance company separate accounts funding Variable Contracts of both
affiliated and unaffiliated life insurance companies (the "Shared
-1-
<PAGE>
Funding Exemptive Order"); and
WHEREAS, the Trust is registered as an open-end management investment
company under the 1940 Act, and shares of its Portfolios are registered under
the Securities Act of 1933, as amended (the "1933 Act"); and
WHEREAS, EQ Financial Consultants, Inc., in addition to being one of
the Distributors, is also the investment manager to the Trust (the "Manager")
and is duly registered with the SEC as an investment adviser under the
Investment Advisers Act of 1940, as amended, and is registered or exempt from
registration under all applicable state securities laws; and
WHEREAS, EOC has registered or will register each of its Accounts as a
unit investment trust under the 1940 Act and has registered or will register
interests in each Account under the 1933 Act, other than those exempt from such
registration under applicable statutory provisions or regulations; and
WHEREAS, each Account is, or will be, a duly organized, validly
existing segregated asset account, established by resolution of the Board of
Directors of EOC or through properly delegated authority, and divided into
subaccounts, to set aside and invest assets attributable to the Variable
Contracts; and
WHEREAS, each of the Distributors is registered as a broker-dealer with
the SEC under the Securities Exchange Act of 1934, as amended (the "1934 Act"),
and is a member in good standing of the National Association of Securities
Dealers, Inc. (the "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, EOC intends to purchase shares in the Portfolios and one or more
Classes thereof, (the "Designated Portfolios and Classes") on behalf of each
Account, in order to fund certain of the Variable Contracts, and each of the
Distributors is authorized to sell such shares to each Account at the net asset
value applicable to such Portfolios and the Classes thereof.
NOW, THEREFORE, in consideration of their mutual promises, EOC, the
Trust and each of the Distributors agree as follows:
ARTICLE I. Sale of Trust Shares
--------------------
1.1. Each of the Distributors agrees to sell to each Account those
shares of the Designated Portfolios and Classes for which it serves as the
Trust's principal underwriter and which each Account orders, executing such
orders on a daily basis at the net asset value per share next computed after
receipt by the Trust or its designee of the order for the shares of the
Designated Portfolios and Classes. For purposes of this Section 1.1, neither EOC
nor any Account shall be considered the designee of the Trust for receipt of
such purchase orders and receipt by EOC or any Account shall not constitute
receipt by the Trust for purposes of calculating each Portfolio's net asset
value per share.
1.2. The Trust agrees to make its shares of the Designated Portfolios
and Classes available for purchase by each Account at the applicable net asset
value per share on those days on which the
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<PAGE>
Trust calculates the net asset value per share of the Designated Portfolios and
Classes pursuant to rules of the SEC. The Trust shall use reasonable efforts to
calculate the net asset value per share of the Designated Portfolios and Classes
on each day on which the New York Stock Exchange is open for trading.
Notwithstanding the foregoing, the Board of Trustees of the Trust (the "Board")
may refuse to sell shares of any Designated Portfolio or Class to any person, or
suspend or terminate the offering of shares of any Portfolio or Class thereof,
if such action is required by law or by regulatory authorities having
jurisdiction or is, in the sole discretion of the Board acting in good faith and
in light of its fiduciary duties under federal and any applicable state laws,
necessary in the best interests of the shareholders of such Portfolio or Class
thereof.
1.3. The Trust and each of the Distributors agree that shares of the
Designated Portfolios and Classes will be sold only to Participating Insurance
Companies and/or their separate accounts funding Variable Contracts or to other
persons or entities permitted under Section 817 of the Internal Revenue Code of
1986, as amended (the "Code"), or regulations promulgated thereunder. No shares
of any Portfolio will be sold to the general public, except to the extent
permitted under the Code.
1.4. The Trust and each of the Distributors will not sell Trust shares
to any Participating Insurance Company or separate account funding Variable
Contracts unless an agreement containing provisions substantially the same as
Articles I, III, V, VII and Section 2.5 of Article II of this Agreement is in
effect to govern such sales.
1.5. The Trust agrees to redeem for cash or in-kind, at the request of
any Account or EOC, any full or fractional shares of the Trust held by the
Account or EOC. The Trust will execute such requests on a daily basis at the net
asset value per share of the Designated Portfolios and Classes next computed
after receipt by the Trust or its designee of the request for redemption. For
purposes of this Section 1.5, neither EOC nor any Account shall be considered
the designee of the Trust for receipt of requests for redemption, and receipt by
EOC or any Account shall not constitute receipt by the Trust for purposes of
calculating each Portfolio's net asset value per share.
1.6 EOC agrees that purchases and redemptions of shares of the
Designated Portfolios and Classes offered by a then-current prospectus of the
Trust shall be made in accordance with the provisions of such prospectus.
1.7. EOC shall pay for shares of Designated Portfolios and Classes
thereof purchased for the Accounts or its general account on the business day on
which an order to purchase Trust shares is made in accordance with the
provisions of Section 1.1 hereof. "Business Day" shall mean any day on which the
New York Stock Exchange is open for trading and on which the Trust calculates
its net asset value pursuant to the rules of the SEC. Payment shall be in
federal funds transmitted by wire. For purposes of Section 2.9 and 2.10, upon
receipt by the Trust of the federal funds so wired, such funds shall cease to be
the responsibility of EOC and shall become the responsibility of the Trust.
1.8. Issuance and transfer of the shares of the Designated Portfolios
and Classes thereof will be by book entry only. Stock certificates will not be
issued to EOC or any Account. Shares ordered from the Trust will be recorded in
an appropriate title for each Account or the appropriate subaccount of each
Account.
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<PAGE>
1.9. The Trust shall furnish same day notice (by wire or telephone,
followed by written confirmation) of any income dividends or capital gain
distributions payable on the shares of the Designated Portfolios and Classes
thereof. EOC and each Account hereby elect to receive all such income dividends
and capital gain distributions as are payable on the shares of the Designated
Portfolios and Classes thereof in additional shares of the relevant Designated
Portfolios and Classes. (EOC and each Account reserve the right to revoke this
election and to receive all such income dividends and capital gain distributions
in cash.) The Trust shall provide notification by the end of the next Business
Day of the number of shares so issued as payment of such dividends and
distributions. The Trust shall provide advance notice to EOC and each Account of
any date on which the Trust reasonably expects to make a dividend distribution;
normally this notice will be given at least ten (10) days in advance of the
ex-dividend date.
1.10. The Trust shall make the net asset value per share for each
Designated Portfolio and Class thereof available to EOC and each Account or
their designee on a daily basis as soon as reasonably practical after the net
asset value per share is calculated (normally by 6:30 p.m. New York time) and
shall use its best efforts to make such net asset value per share available by
7:00 p.m. New York time.
ARTICLE II. Representations and Warranties
------------------------------
2.1. EOC represents and warrants that: (a) the EOC Contracts will be
issued and sold in compliance, in all material respects, with all applicable
federal and state laws; and (b) it requires each Distributor to comply, in all
material respects, with state insurance suitability requirements. EOC further
represents and warrants that: (a) it is an insurance company duly organized and
in good standing under applicable law; (b) it has legally and validly
established each Account, prior to any issuance or sale of interests therein, as
a segregated asset account under applicable insurance laws; (c) it has
registered or, prior to any issuance or sale of the EOC Contracts, will register
each Account as a unit investment trust in accordance with the provisions of the
1940 Act to serve as a segregated investment account for the EOC Contracts,
unless such Accounts are exempt from such registration under applicable
statutory provisions or regulations; and (d) it has registered or, prior to the
issuance or sale of the EOC Contracts, will register interests in the Accounts
under the 1933 Act, unless interests in such Accounts are exempt from such
registration under applicable statutory provisions or regulations.
2.2. The Trust, to the best of its knowledge, represents and warrants
that Trust shares sold pursuant to this Agreement shall be: (a) registered under
the 1933 Act; and (b) duly authorized for issuance; and (c) sold in compliance
with and all applicable federal securities laws. The Trust further represents
and warrants that it is and shall remain registered under the 1940 Act. The
Trust shall amend the registration statement for its shares (the "Registration
Statement") under the 1933 Act and the 1940 Act from time to time as required in
order to effect the continuous offering of shares of the Designated Portfolios
and Classes. This requirement shall not, however, in any manner limit the
Trust's ability to cease offering shares in one or more of the Designated
Portfolios or Classes, provided such action complies with applicable laws and
regulations.
2.3. EOC represents that the EOC Contracts are currently treated as
annuity, endowment or life insurance contracts under applicable provisions of
the Code and that it will make every effort to
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maintain such treatment and that it will notify the Trust and the Distributors
immediately upon having a reasonable basis for believing that the EOC Contracts
have ceased to be so treated or that they might not be so treated in the future.
2.4. The Trust currently intends for one or more Classes, particularly
Class IB, to make payments to finance its distribution expenses pursuant to a
Plan adopted under Rule 12b-1 under the 1940 Act, although it may determine to
discontinue such practice in the future. To the extent that any Class of the
Trust finances its distribution expenses pursuant to a Plan adopted under Rule
12b-1, the Trust undertakes to have a Board, a majority of whose members are not
interested persons of the Trust or its Distributors or Manager, and to otherwise
comply with any then current SEC and SEC staff interpretations concerning Rule
12b-1 or any successor provision.
2.5. The Trust makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various states,
except that the Trust represents that the investment objectives, policies, fees
and expenses of each of the Designated Portfolios and Classes thereof are and
shall at all times remain in compliance with the insurance laws of the State of
Colorado, and the Trust and the Distributors severally represent that their
respective operations are and shall at all times remain in compliance, in all
material respects, with the insurance laws of the State of Colorado to the
extent required to perform their respective obligations under this Agreement.
2.6. Each of the Distributors represents and warrants that: (a) it is a
member in good standing of the NASD; and (b) it is registered as a broker-dealer
with the SEC and all necessary states. Each Distributor further represents that
it will sell and distribute the Trust's shares in accordance with the laws of
the State of New York and all applicable federal and state securities laws,
including without limitation the 1933 Act, the 1934 Act, the 1940 Act, and all
applicable Rules of the NASD.
2.7. The Trust represents that it is lawfully organized and validly
existing under the laws of the State of Delaware and that it does and will
comply, in all material respects, with the 1940 Act.
2.8. EQ Financial Consultants, Inc. represents and warrants that it, in
its capacity as the Manager, is and shall remain duly registered under all
applicable federal and state securities laws and that it, in its capacity as the
Manager shall perform its obligations for the Trust in compliance, in all
material respects, with any and all applicable federal and state securities
laws.
2.9. The Trust and each of the Distributors severally represent and
warrant that all of their trustees, directors, officers, employees, investment
managers and investment advisers, and other individuals/entities dealing with
the money and/or securities of the Trust are and shall continue to be at all
times covered by a blanket fidelity bond or similar coverage for the benefit of
the Trust in an amount not less than the minimal coverage required by Rule
17g-(1) of the 1940 Act or such related provisions as may be promulgated from
time to time. The aforesaid fidelity bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding company.
2.10. EOC represents and warrants that all of its directors, officers,
employees, and other
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individuals/entities dealing with the money and/or securities of the Trust are
covered by a blanket fidelity bond or similar coverage for the benefit of the
Trust. EOC further represents and warrants that said fidelity bond is issued by
a reputable bonding company, includes coverage for larceny and embezzlement, and
is in an amount not less than $5 million. EOC agrees to make all reasonable
efforts to see that this fidelity bond or another bond containing these
provisions is continuously in effect and agrees to notify the Trust and the
Distributors in the event that such coverage no longer applies.
ARTICLE III. Prospectuses and Proxy Statements; Voting
-----------------------------------------
3.1. The Trust or its Distributors shall provide EOC with as many
printed copies of the Trust's current prospectus and Statement of Additional
Information and any supplements thereto for the Designated Portfolios and
Classes thereof as EOC may reasonably request. If requested by EOC in lieu
thereof, the Trust or its Distributors shall provide camera-ready film
containing the Trust's prospectus and Statement of Additional Information and
any supplements thereto for the Designated Portfolios and Classes thereof, and
such other assistance as is reasonably necessary in order for EOC once each year
(or more frequently if the prospectus and/or Statement of Additional Information
for the Designated Portfolios and Classes thereof is amended during the year) to
have the prospectus for the Account, with respect to the EOC Contracts, and the
Trust's prospectus printed together in one document, and to have the Statement
of Additional Information for the Trust and the Statement of Additional
Information for the Account, with respect to the EOC Contracts, printed together
in one document. Alternatively, EOC may print the prospectus and/or Statement of
Additional Information for the Designated Portfolios and Classes thereof in
combination within the prospectuses and Statements of Additional Information for
other investment companies. To the extent that the foregoing Trust prospectuses,
Statements of Additional Information and any supplements thereto are with
respect to Class IB shares, or other Classes of shares subject to a Plan adopted
under Rule 12b-1 under the 1940 Act, the cost of preparing, printing, and
distributing such documents will be at the expense of such Class or Classes of
shares, with respect to prospective owners of EOC Contracts. In addition, with
respect to prospectuses and Statements of Additional Information for the
Designated Portfolios and Classes thereof provided by EOC to its existing owners
of EOC Contracts ("Contractowners") in order to update disclosure as required by
the 1933 Act and/or the 1940 Act, the cost of preparing, printing, mailing and
otherwise distributing such prospectuses and Statements of Additional
Information and any supplements thereto shall be borne by the Trust.
Furthermore, if in such case EOC or the Distributors are provided with
camera-ready film of such documents in lieu of printed documents, EOC or the
Distributors shall request reimbursement from the Trust for their printing,
mailing and other costs associated with such distribution.
EOC and the Distributors each agree to provide the Trust or its
designee with such information as may be reasonably requested by the Trust to
assure that the Trust's expenses or the expenses of any Class do not include the
cost of printing, mailing and otherwise distributing any prospectuses,
Statements of Additional Information or supplements thereto for the Designated
Portfolios and Classes thereof other than those actually distributed (a) to
existing Contractowners; or (b) under a Rule 12b-1 Plan for a particular Class
of shares to prospective Contractowners.
3.2 EOC may alter the form of the Trust's prospectus, Statement of
Additional Information, Annual and Semi-Annual Reports to shareholders, proxy
statements, and other Trust documents
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with the prior approval of the Trust. EOC shall bear all costs associated with
such alteration of form.
3.3. The Trust's prospectus for the Designated Portfolios and Classes
thereof shall state that the Statement of Additional Information for the
Designated Portfolios and Classes thereof is available from the Distributors or
EOC (or in the Trust's discretion, the prospectus shall state that such
Statement of Additional Information is available from the Trust).
3.4. The Trust, at its expense, shall provide EOC with copies of its
proxy statements, Annual and Semi-Annual Reports to shareholders, and other
communications to shareholders in such quantities as EOC shall reasonably
require for mailing or otherwise distributing such materials to Contractowners
and shall assume all expenses associated with mailing or otherwise distributing
those materials. In the alternative, the Trust shall reimburse EOC for its costs
in printing, mailing and distributing such materials to Contractowners.
3.5. If and to the extent required by law, EOC shall:
(a) solicit voting instructions from Contractowners;
(b) vote the Trust shares for the Designated Portfolios and
Classes in accordance with instructions received from Contractowners;
and
(c) vote Trust shares for the Designated Portfolios and
Classes for which no instructions have been received in a particular
Account in the same proportion as Trust shares for the Designated
Portfolios and Classes for which instructions have been received so
long as and to the extent that the SEC continues to interpret the 1940
Act to require pass-through voting privileges for Contractowners. EOC
reserves the right to vote Trust shares held in any Account in its own
right, to the extent permitted by law. Participating Insurance
Companies shall be responsible for assuring that each of their separate
accounts participating in the Trust calculates voting privileges in a
manner consistent with the standards adopted by the Board, which
standards will be provided to all other Participating Insurance
Companies.
3.6. The Trust will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular the Trust will comply with
Section 16(c) of the 1940 Act as well as with Sections 16(a) and, if and when
applicable, Section 16(b). Further, the Trust will act in accordance with the
SEC or SEC staff's written interpretation concerning the requirements of Section
16(a) with respect to periodic elections of Trustees and with whatever rules the
SEC may promulgate with respect thereto.
ARTICLE IV. Sales Material and Information
------------------------------
4.1. The Distributors shall furnish, or shall cause to be furnished, to
the Trust or its designee, the form of each piece of sales literature or other
promotional material in which the Trust, the Manager or the Distributors are
named prior to its first use. No such material shall be used if the Trust or its
designee reasonably objects to its use after the Trust's receipt of such
material.
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<PAGE>
4.2. EOC shall not give any information or make any representations or
statements on behalf of the Trust or concerning the Trust in connection with the
sale of the EOC Contracts other than the information or representations
contained in or accurately derived from the Registration Statements, prospectus
or Statement of Additional Information for the Trust, as such Registration
Statements, prospectus or Statement of Additional Information may be amended or
supplemented from time to time, or in reports or proxy statements for the Trust,
or in sales literature or other promotional material approved by the Trust or
its designee, except with the permission of the Trust or its designees.
4.3. The Trust or the Distributors, or their respective designees,
shall furnish, or shall cause to be furnished, to EOC or its designees, the form
of each piece of sales literature or other promotional material in which EOC is
named prior to its use. No such material shall be used if EOC or its designees
reasonably object to its use after receipt of such material.
4.4. The Trust and the Distributors shall not give any information or
make any representations on behalf of EOC or concerning EOC, each Account, or
the EOC Contracts other than the information or representations contained in or
accurately derived from a registration statement, prospectus or Statement of
Additional Information for the Accounts with respect to the EOC Contracts, as
such registration statement, prospectus or Statement of Additional Information
may be amended or supplemented from time to time, or in published reports for
each Account which are in the public domain or approved by EOC for distribution
to Contractowners, or in sales literature or other promotional material approved
by EOC or its designees, except with the permission of EOC.
4.5. The Trust shall provide to EOC at least one complete copy of all
Registration Statements, prospectuses, Statements of Additional Information,
reports, proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to the Trust or its shares, contemporaneously
with the filing of such document with the SEC, the NASD, or other regulatory
authorities.
4.6. EOC shall provide to the Trust at least one complete copy of all
registration statements, prospectuses, Statements of Additional Information,
reports, solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to the EOC
Contracts or any Account if such document also relates to the Trust,
contemporaneously with the filing of such document with the SEC, the NASD, or
other regulatory authorities.
4.7. For purposes of this Article IV, the phrase "sales literature or
other promotional material" includes, but is not limited to, any of the
following that refer to the Trust or any affiliate of the Trust: advertisements
(including materials published or designed for use in a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, electronic messages or
communications or other public media), sales literature (i.e., any written
communication distributed or made generally available to customers or the
public, including brochures, circulars, research reports, market letters, form
letters, seminar texts, reprints or excerpts of any other advertisement, sales
literature, or published article), educational or training materials or other
communications distributed or made generally available
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<PAGE>
to some or all agents or employees, and registration statements, prospectuses,
Statements of Additional Information, shareholder reports, and proxy materials.
However, it is anticipated that materials provided solely: (a) internally to
EOC's or the Distributors' own employees or counsel; or (b) to certain
designated third parties and that are not designed to be provided or
communicated in any manner to the general public (e.g., training materials
provided to distributors or agents) will not be filed with the SEC, the NASD, or
any state securities or insurance regulatory authorities, although such
materials will be prepared in accordance with applicable laws.
ARTICLE V. Fees and Expenses
-----------------
5.1. The Trust and the Distributors shall pay no fee or other
compensation to EOC under this Agreement except for: (a) items covered in
Article III; or (b) pursuant to a Plan adopted by the Trust in accordance with
Rule 12b-1 under the 1940 Act to finance the distribution expenses of any Class.
Nevertheless, the Distributors may make payments to EOC or to any distributor
for the EOC Contracts in amounts agreed to by the Distributors in any writing,
and such payments by the Distributors (other than pursuant to a Rule 12b-1 Plan)
may be made out of existing fees otherwise payable to the Distributors, past
profits of the Distributors, or other resources available to the Distributors.
5.2. All expenses incident to performance by the Trust under this
Agreement shall be paid by the Trust. Without limiting the foregoing, the Trust
shall see to it that all shares are registered and authorized for issuance prior
to their sale in accordance with applicable federal law, and shall bear all
expenses with respect to: registration and qualification of the Trust's shares;
preparation and filing of the Trust's Registration Statement, prospectus,
Statement of Additional Information, proxy materials, and reports; setting the
prospectus and Statement of Additional Information in type; setting in type,
printing, mailing or otherwise distributing proxy materials and Semi-Annual and
Annual Reports sent to Contractowners (including the costs of setting in type,
printing, mailing or otherwise distributing a prospectus that constitutes an
Annual Report) and if certain Classes of the Trust so elect and the Rule 12b-1
Plan so provides, the preparation, printing, mailing or otherwise distributing
of such materials to prospective owners of EOC Contracts; the preparation of all
statements and notices required by any federal or state law; and all taxes on
the issuance or transfer of the Trust's shares.
ARTICLE VI. Diversification
---------------
6.1. The Trust represents that: (a) it currently has elected to qualify
as a regulated investment company under Subchapter M of the Code; (b) it will
make every effort to maintain such qualification (under Subchapter M or any
successor or similar provision); (c) it will notify EOC immediately upon having
a reasonable basis for believing that it has ceased to so qualify or that it
might not so qualify in the future; and (d) it will seek to minimize any damages
and to rectify its failure to so qualify promptly. The Trust acknowledges that
any failure to qualify as a regulated investment company will eliminate the
ability of the Accounts to avail themselves of the "look through" provisions of
Section 817(h) of the Code and that, as a result, the EOC Contracts will almost
certainly fail to qualify as life insurance and annuity contracts under Section
817(h) of the Code.
6.2. The Trust further represents that it will at all times invest
money from the Accounts in
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such a manner as to assure that the EOC Contracts will be treated as variable
annuity or variable life insurance contracts under the Code and the regulations
issued thereunder. Without limiting the scope of the foregoing, the Trust
represents that it will at all times comply with Section 817(h) of the Code and
Treasury Regulation 1.817-5, relating to the diversification requirements for
variable annuity, endowment, or life insurance contracts, and any amendments or
other modifications to such Section or Regulations. In the event of a breach of
this Article VI by the Trust, the Trust warrants that it will take all
reasonable steps: (a) to immediately notify EOC of such breach; and (b) to
adequately diversify the Trust's assets so as to achieve compliance within the
grace period afforded by Regulation 1.817-5.
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ARTICLE VII. Potential Conflicts
-------------------
7.1. The Board will monitor the Trust for the existence of any material
irreconcilable conflict between the interests of the contractowners of all
variable annuity and variable life insurance separate accounts investing in the
Trust. A material irreconcilable conflict may arise for a variety of reasons,
including: (a) an action by any state insurance regulatory authority; or (b) a
change in applicable federal or state insurance, tax, or securities laws or
regulations, or a public ruling, private letter ruling, no-action or
interpretative letter, or any similar action by insurance, tax, or securities
regulatory authorities; or (c) an administrative or judicial decision in any
relevant proceeding; or (d) the manner in which the investments of any
Designated Portfolio are being managed; or (e) a difference in voting
instructions given by owners of Variable Contracts; or (f) a decision by an
insurer to disregard the voting instructions of owners of Variable Contracts.
The Board shall promptly inform EOC if it determines that a material
irreconcilable conflict exists and the implications thereof.
7.2. EOC will report any potential or existing conflicts, of which it
is aware, to the Board. EOC will assist the Board in carrying out its
responsibilities under any Shared Funding Exemptive Order, by providing the
Board with all information reasonably necessary for the Board to consider any
issues raised. This includes, but is not limited to, an obligation by EOC to
inform the Board whenever the voting instructions of owners of Variable
Contracts are disregarded. EOC's responsibilities under this Section 7.2 will be
carried out with a view only to the interests of its Contractowners.
7.3. If it is determined by a majority of the Board, or a majority of
its disinterested Trustees, that a material irreconcilable conflict exists, EOC
and other Participating Insurance Companies shall, at their expense and to the
extent reasonably practicable (as determined by a majority of the disinterested
Trustees), take whatever steps are necessary to remedy or eliminate the material
irreconcilable conflict, up to and including: (a) withdrawing the assets
allocable to some or all of the variable annuity and variable life insurance
separate accounts from the Trust or any Portfolio and reinvesting such assets in
a different investment medium, including (but not limited to) another Portfolio
of the Trust, or submitting the question of whether such withdrawal should be
implemented to a vote of all affected owners of Variable Contracts and, as
appropriate, withdrawing the assets of any appropriate group (i.e., owners of
variable annuity contracts or owners of variable life insurance contracts of one
or more Participating Insurance Companies) that votes in favor of such
withdrawal, or offering to the affected owners of Variable Contracts the option
of making such a change; and (b) establishing a new registered management
investment company or managed separate account. EOC's responsibilities under
this Section 7.3 will be carried out with a view only to the interests of
Contractowners.
7.4. If a material irreconcilable conflict were ever to arise because
of a decision by EOC to disregard Contractowner voting instructions and that
decision represents a minority position or would preclude a majority vote, EOC
may be required, at the Trust's election, to withdraw the affected Account's (or
subaccount's) investment in the Trust and terminate this Agreement with respect
to such Account (or subaccount); provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested members
of the Board. No charge or penalty shall be imposed as a result of such
withdrawal. Any such withdrawal and termination must take place
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within six (6) months after the Trust gives written notice that this provision
is being implemented and, until the end of that six (6) month period, the
Distributors and Trust shall continue to accept and implement orders by EOC for
the purchase (and redemption) of shares of the Trust.
7.5. If a material irreconcilable conflict were ever to arise because a
particular state insurance regulator's decision applicable to EOC conflicts with
the majority of other state regulators, then EOC shall withdraw the affected
Account's (or subaccount's) investment in the Trust and terminate this Agreement
with respect to such Account (or subaccount) within six (6) months after the
Board informs EOC in writing that it has determined that such decision has
created a material irreconcilable conflict; provided, however, that such
withdrawal and termination shall be limited to the extent required by the
foregoing material irreconcilable conflict as determined by a majority of the
disinterested members of the Board. Until the end of the foregoing six (6) month
period, the Distributors and Trust shall continue to accept and implement orders
by EOC for the purchase (and redemption) of shares of the Trust.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any material irreconcilable conflict, but in
no event will the Trust be required to establish a new funding medium for the
EOC Contracts. EOC shall not be required by Section 7.3 to establish a new
funding medium for the EOC Contracts if an offer to do so has been declined by
vote of a majority of Contractowners materially adversely affected by the
material irreconcilable conflict. In the event that the Board determines that
any proposed action does not adequately remedy any material irreconcilable
conflict, then EOC will withdraw the Account's (or subaccount's) investment in
the Trust and terminate this Agreement within six (6) months after the Board
informs EOC in writing of the foregoing determination; provided, however, that
such withdrawal and termination shall be limited to the extent required by any
such material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
1940 Act or the rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Shared Funding Exemptive Order) on terms and
conditions materially different from those contained in the Shared Funding
Exemptive Order, then: (a) the Trust and/or the Participating Insurance
Companies, as appropriate, shall take such steps as may be necessary to comply
with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the
extent such rules are applicable; (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4, and
7.5 of this Agreement shall continue in effect only to the extent that terms and
conditions substantially identical to such Sections are contained in such
Rule(s) as so amended or adopted; and (c) this Agreement shall be otherwise
amended by the Trust, without the need for any consent of the other parties, as
required by such change in law.
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ARTICLE VIII. Indemnification
---------------
8.1. Indemnification By EOC
----------------------
8.1(a). EOC agrees to indemnify and hold harmless the Trust, each
member of the Board, the Distributors, and the directors and officers and each
person, if any, who controls any such person within the meaning of Section 15 of
the 1933 Act (collectively, the "Indemnified Parties" for purposes of this
Section 8.1) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of EOC), investigation of
claims or litigation (including legal and other expenses), to which the
Indemnified Parties may become subject under any statute, regulation, at common
law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are related to the sale
or acquisition of the Trust's shares or the EOC Contracts or interests in the
Accounts and:
(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the
registration statement, prospectus, or Statement of Additional
Information for the EOC Contracts or contained in the EOC Contracts or
sales literature for the EOC Contracts (or any amendment or supplement
to any of the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, provided that this agreement to indemnify shall
not apply as to any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reliance upon and in
conformity with information furnished to EOC by or on behalf of the
Trust for use in the registration statement, prospectus, or Statement
of Additional Information for the EOC Contracts or in the EOC Contracts
or sales literature (or any amendment or supplement) or otherwise for
use in connection with the sale of the EOC Contracts or Trust shares;
or
(ii) arise out of or as a result of statements or
representations (other than statements or representations contained in
the Registration Statement, prospectus or Statement of Additional
Information, or sales literature of the Trust not supplied by EOC or
persons under its control) or wrongful conduct of EOC or persons under
its control, with respect to the sale or distribution of the EOC
Contracts or Trust shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a Registration Statement,
prospectus, or Statement of Additional Information, or sales literature
of the Trust or any amendment thereof or supplement thereto or the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading if such a statement or omission was made in reliance upon
information furnished to the Trust by or on behalf of EOC; or
(iv) arise as a result of any failure by EOC to provide the
services and furnish the materials required to be provided or furnished
by it under the terms of this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by EOC in this Agreement or arise
out of or result from any other material breach of this Agreement by
EOC;
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as limited by and in accordance with the provisions of Sections 8.1(b) and
8.1(c) hereof.
8.1(b). EOC shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities, or litigation incurred
or assessed against an Indemnified Party as such may arise from such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations or duties under this Agreement or to the
Trust, whichever is applicable.
8.1(c). EOC shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified EOC in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify EOC of any such claim shall not relieve EOC from
any liability which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this indemnification provision.
In case any such action is brought against the Indemnified Parties, EOC shall be
entitled to participate, at its own expense, in the defense of such action. EOC
also shall be entitled to assume the defense thereof, with counsel reasonably
satisfactory to the party named in the action. After notice from EOC to such
party of EOC's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
EOC will not be liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.
8.1(d). The Indemnified Parties shall promptly notify EOC of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Trust's shares or the EOC Contracts or the operation
of the Trust.
8.2. Indemnification by the Distributors
-----------------------------------
8.2(a). Each of the Distributors agrees to indemnify and hold harmless
EOC, and the Trust and each of their directors and officers and each person, if
any, who controls EOC within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Distributors), investigation of
claims or litigation (including legal and other expenses) to which the
Indemnified Parties may become subject under any statute, regulation, at common
law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are related to the sale
or acquisition of the Trust's shares or the EOC Contracts or interests in the
Accounts and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement, prospectus or Statement of Additional
Information, or sales literature of the Trust (or any amendment or
supplement to any of the foregoing), or arise out of or are based upon
the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the
-14-
<PAGE>
statements therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such statement
or omission or such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the Distributors
or Trust by or on behalf of EOC for use in the Registration Statement,
prospectus, or Statement of Additional Information for the Trust, or in
sales literature (or any amendment or supplement) or otherwise for use
in connection with the sale of the EOC Contracts or Trust shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations contained in
the registration statement, prospectus or Statement of Additional
Information, or sales literature for the EOC Contracts not supplied by
the Distributors or persons under their control) or wrongful conduct of
the Distributors or persons under their control, with respect to the
sale or distribution of the EOC Contracts or Trust shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration statement,
prospectus, or Statement of Additional Information or sales literature
covering the EOC Contracts, or any amendment thereof or supplement
thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statement or statements therein not misleading, if such statement or
omission was made in reliance upon information furnished to EOC by or
on behalf of the Distributors or the Trust; or
(iv) arise as a result of any failure by the Distributors or
the Trust to provide the services and furnish the materials required to
be provided or furnished by the Distributors or the Trust under the
terms of this Agreement (including a failure, whether unintentional or
in good faith or otherwise, to comply with the diversification or other
qualification requirements specified in Article VI of this Agreement);
or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Distributors in this
Agreement or arise out of or result from any other material breach of
this Agreement by the Distributors;
as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.
8.2(b). Each of the Distributors shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities, or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement or to EOC or any Account, whichever is applicable.
8.2(c). Each of the Distributors shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the Distributors in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated
-15-
<PAGE>
agent), but failure to notify the Distributors of any such claim shall not
relieve the Distributors from any liability which they may have to the
Indemnified Party against whom such action is brought otherwise than on account
of this indemnification provision. In case any such action is brought against
the Indemnified Parties, the Distributors will be entitled to participate, at
their own expense, in the defense thereof. Each of the Distributors also shall
be entitled to assume the defense thereof, with counsel reasonably satisfactory
to the party named in the action. After notice from the Distributors to such
party of the Distributors' election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Distributors will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
8.2(d). EOC agrees promptly to notify the Distributors of the
commencement of any material litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of the EOC
Contracts or the operation of each Account.
8.3. Indemnification By the Trust
----------------------------
8.3(a). The Trust agrees to indemnify and hold harmless EOC and each of
its directors and officers and each person, if any, who controls EOC within the
meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties"
for purposes of this Section 8.3) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
the Trust), investigation of claims or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject under any statute,
regulation, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements result
from the gross negligence, bad faith or willful misconduct of the Board or any
member thereof, are related to the operations of the Trust and:
(i) arise as a result of any failure by the Trust to provide
the services and furnish the materials required to be provided or
furnished by it under the terms of this Agreement (including a failure
to comply with the diversification and other qualification requirements
specified in Article VI of this Agreement); or
(ii) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this Agreement or
arise out of or result from any other material breach of this Agreement
by the Trust;
as limited by and in accordance with the provisions of Sections 8.3(b) and
8.3(c) hereof.
8.3(b). The Trust shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities, or
litigation incurred or assessed against an Indemnified Party as such may arise
from such Indemnified Party's willful misfeasance, bad faith, or gross
negligence in the performance of such Indemnified Party's duties or by reason of
such Indemnified Party's reckless disregard of obligations and duties under this
Agreement or to EOC, the Trust, the Distributors, or each Account, whichever is
applicable.
8.3(c). The Trust shall not be liable under this indemnification
provision with respect to
-16-
<PAGE>
any claim made against an Indemnified Party unless such Indemnified Party shall
have notified the Trust in writing within a reasonable time after the summons or
other first legal process giving information of the nature of the claim shall
have been served upon such Indemnified Party (or after such Indemnified Party
shall have received notice of such service on any designated agent), but failure
to notify the Trust of any such claim shall not relieve the Trust from any
liability which it may have to the Indemnified Party against whom such action is
brought otherwise than on account of this indemnification provision. In case any
such action is brought against the Indemnified Parties, the Trust will be
entitled to participate, at its own expense, in the defense thereof. The Trust
also shall be entitled to assume the defense thereof, with counsel reasonably
satisfactory to the party named in the action. After notice from the Trust to
such party of the Trust's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Trust will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
8.3(d). EOC and the Distributors each agree promptly to notify the
Trust of the commencement of any material litigation or proceedings against it
or any of its respective officers or directors in connection with this
Agreement, the issuance or sale of the EOC Contracts, with respect to the
operation of any Account, or the sale or acquisition of shares of the Trust.
ARTICLE IX. Applicable Law
--------------
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New York.
9.2. This Agreement shall be subject to the provisions of the 1933,
1934, and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules, and regulations as the SEC
may grant (including, but not limited to, any Shared Funding Exemptive Order)
and the terms hereof shall be interpreted and construed in accordance therewith.
ARTICLE X. Termination
-----------
10.1. This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party, with or without cause, upon six
(6) months' advance written notice delivered to the other
parties; or
(b) termination by EOC upon thirty (30) days' written notice to
the Trust and the Distributors with respect to any Designated
Portfolio or Class thereof based upon EOC's determination that
shares of such Designated Portfolio or Class thereof are not
reasonably available to meet the requirements of the EOC
Contracts or are not consistent with EOC's obligations to
Contractowners; or
(c) termination by EOC upon thirty (30) days' written notice to
the Trust and the Distributors with respect to any Designated
Portfolio or Class thereof in the event any of the Designated
Portfolio's shares or any shares with respect to any Class are
not registered, issued or sold in accordance with applicable
federal and/or state law
-17-
<PAGE>
or such law precludes the use of such shares as the underlying
investment media of the EOC Contracts issued or to be issued
by EOC; or
(d) termination by EOC by written notice to the Trust and the
Distributors with respect to any Designated Portfolio or Class
thereof in the event that such Designated Portfolio or Class
thereof ceases to qualify as a regulated investment company
under Subchapter M of the Code or any other failure under
Section 817 of the Code, or under any successor or similar
provision of either, or if EOC reasonably believes that the
Trust may fail to so qualify; or
(e) termination by either the Trust or the Distributors by written
notice to EOC, if the Trust or the Distributors shall
determine, in their sole judgment exercised in good faith,
that EOC and/or its affiliated companies have suffered a
material adverse change in their business, operations,
financial condition, or prospects since the date of this
Agreement or are the subject of material adverse publicity;
but no termination shall be effective under this subsection
(e) until EOC has been afforded a reasonable opportunity to
respond to a statement by the Trust or the Distributors
concerning the reason for notice of termination hereunder; or
(f) termination by EOC by written notice to the Trust and the
Distributors, if EOC shall determine, in its sole judgment
exercised in good faith, that either the Trust or the
Distributors has suffered a material adverse change in its
business, operations, financial condition, or prospects since
the date of this Agreement or is the subject of material
adverse publicity; but no termination shall be effective under
this subsection (f) until the Trust or the Distributors have
been afforded a reasonable opportunity to respond to a
statement by EOC concerning the reason for notice of
termination hereunder.
10.2. Notwithstanding any termination of this Agreement, the Trust and
the Distributors shall, at the option of EOC, continue to make available
additional shares of the Trust pursuant to the terms and conditions of this
Agreement, for all EOC Contracts in effect on the effective date of termination
of this Agreement (hereinafter referred to as "Existing EOC Contracts").
Specifically, without limitation, the owners of the Existing EOC Contracts shall
be permitted to reallocate investments in the Trust, redeem investments in the
Trust, and/or invest in the Trust upon the making of additional purchase
payments under the Existing EOC Contracts. The parties agree that this Section
10.2 shall not apply to any terminations under Article VII and the effect of
such Article VII terminations shall be governed by Article VII of this
Agreement.
10.3. EOC shall not redeem Trust shares attributable to the EOC
Contracts (as opposed to Trust shares attributable to EOC's assets held in any
Account) except: (a) as necessary to implement Contractowner initiated or
approved transactions; or (b) as required by federal and/or state laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption"); or (c) as
permitted pursuant to Section 26(b) of the 1940 Act or otherwise pursuant to an
order of the SEC that permits EOC to redeem Trust shares attributable to EOC
Contracts. Upon request, EOC shall promptly furnish to the Trust and the
Distributors the opinion of counsel for EOC (which counsel shall be reasonably
satisfactory to the Trust and the Distributors) to the effect that any
redemption pursuant to clause (b) above is a
-18-
<PAGE>
Legally Required Redemption or any redemption pursuant to clause (b) is
permitted without first obtaining an order of the SEC pursuant to Section 26(b)
or any other provision of the 1940 Act. Furthermore, except in cases where
permitted under the terms of the EOC Contracts, and as may be in the best
interests of Contractowners, as determined by EOC, EOC shall not prevent
Contractowners from allocating payments to a Designated Portfolio or Class
thereof that was otherwise available under the EOC Contracts without first
giving the Trust or the Distributors ninety (90) days' notice of its intention
to do so.
10.4. Notwithstanding any termination of this Agreement for any reason,
the terms and conditions of the following provisions of this Agreement shall
remain in effect with respect to any Existing Contract, for so long as any
assets invested in the Trust are attributable to such Existing Contract:
Sections 1.3 to 1.10 of Article I (governing the pricing and redemption of
shares); Article II (Representations and Warranties); Sections 3.1 through 3.4
and 3.6 of Article III (Prospectuses and Proxy Statements, and Voting); Articles
IV through IX (Sales Material and Information; Fees and Expenses;
Diversification; Potential Conflicts; Indemnification; and Applicable Law);
Article XI (Notices); and Sections 12.1, 12.2, and 12.5 through 12.8 of Article
XII (Miscellaneous). Further, notwithstanding any termination of this Agreement
for any reason, the terms and conditions of the following provisions of this
Agreement shall remain in effect with regard to EOC Contracts whose assets were
previously invested in the Trust: Article II (Representations and Warranties),
Article VI (Diversification) and Article VII (Indemnification).
ARTICLE XI. Notices
-------
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
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<PAGE>
If to the Trust:
EQ Advisors Trust
1290 Avenue of the Americas
New York, New York 10104
Attention: Peter D. Noris
If to EOC:
The Equitable of Colorado, Inc.
1290 Avenue of the Americas
New York, New York 10104
Attention: Samuel B. Shlesinger
If to the Distributors:
Equitable Distributors, Inc.
1290 Avenue of the Americas
New York, New York 10104
Attention: Jamie Shepardson
EQ Financial Consultants, Inc.
1755 Broadway
New York, New York 10019
Attention: Michael F. McNelis
ARTICLE XII. Miscellaneous
-------------
12.1. All persons dealing with the Trust must look solely to the
property of the Trust for the enforcement of any claims against the Trust as
neither the Board (or its members), officers, agents, or shareholders shall
assume any personal liability for obligations entered into on behalf of the
Trust.
12.2. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the Contractowners and all information reasonably identified as confidential
in writing by any other party hereto and, except as permitted by this Agreement,
shall not disclose, disseminate, or utilize such names and addresses and other
confidential information until such time as it may come into the public domain
without the express written consent of the affected party. Without limiting the
foregoing, no party hereto shall disclose any information that such party has
been advised is proprietary, except such information that such party is required
to disclose by any appropriate governmental authority (including without
limitation the SEC, the NASD, and state securities or insurance regulators).
12.3. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
-20-
<PAGE>
12.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.5. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule, or otherwise, the remainder of the Agreement
shall not be affected thereby.
12.6. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD, and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
12.7. The rights, remedies, and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies, and
obligations, at law or in equity, to which the parties hereto are entitled under
federal and state laws.
12.8. This Agreement or any of the rights and obligations hereunder may
not be assigned by any party without the prior written consent of all parties
hereto; provided, however, that the Distributors may assign this Agreement or
any rights or obligations hereunder to any affiliate of or company under common
control with the Distributors (but in such event the Distributors shall continue
to be liable under Article VIII of this Agreement for any indemnification due to
EOC, and the assignee shall also be liable), if such assignee is duly licensed
and registered to perform the obligations of the Distributors under this
Agreement.
12.9. EOC shall furnish, or shall cause to be furnished, to the Trust
or its designee upon request copies of the following reports:
(a) EOC's annual statements (prepared under statutory accounting
principles) and annual reports (prepared under generally accepted accounting
principles ("GAAP"), if any), as soon as practical and in any event within
ninety (90) days after the end of each fiscal year;
(b) any material financial statement, proxy statement, notice, or
report of EOC sent to policyholders, as soon as practical after the delivery
thereof to stockholders;
(c) any registration statement (without exhibits) and financial reports
of EOC filed with the SEC or any state insurance regulator, as soon as practical
after the filing thereof; and
(d) any other report submitted to EOC by independent accountants in
connection with any annual, interim, or special audit made by them of the books
of EOC, as soon as practical after the receipt thereof; but nothing in this
subsection shall require EOC to disclose any information that is privileged or
which, if disclosed, would put EOC at a competitive disadvantage or is both: (a)
confidential; and (b) not material to EOC's financial condition.
12.10 At the request of any party to this Agreement, each other party
will make available to the requesting party's independent auditors and/or
representatives of the appropriate regulatory agencies, all records, data, and
access to operating procedures that may be reasonably requested in
-21-
<PAGE>
connection with compliance and regulatory requirements related to this Agreement
or any party's obligations under this Agreement.
12.11 Any controversy or claim arising out of or relating to this
Agreement, or breach thereof, shall be settled by arbitration in a forum jointly
selected by the relevant parties (but if applicable law requires some other
forum, then such other forum) in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, and judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative as of the date specified below.
EQ ADVISORS TRUST
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
EOC
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
EQUITABLE DISTRIBUTORS, INC.
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
EQ FINANCIAL CONSULTANTS, INC.
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
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<PAGE>
SCHEDULE A
ACCOUNTS AND ASSOCIATED VARIABLE INSURANCE CONTRACTS
Name of Account
- ---------------
- ------------------------------------
EOC Contracts
Funded By Account
- -----------------
- -------------------------------------
<PAGE>
SCHEDULE B
DESIGNATED PORTFOLIOS AND CLASSES
Portfolios of
EQ Advisors Trust
-----------------
T. Rowe Price International Stock Portfolio:
Class IB Shares
T. Rowe Price Equity Income Portfolio:
Class IB Shares
EQ/Putnam Growth & Income Value Portfolio:
Class IB Shares
EQ/Putnam International Equity Portfolio:
Class IB Shares
EQ/Putnam Investors Growth Portfolio:
Class IB Shares
EQ/Putnam Balanced Portfolio:
Class IB Shares
MFS Research Portfolio:
Class IB Shares
MFS Emerging Growth Companies Portfolio:
Class IB Shares
Morgan Stanley Emerging Markets Equity Portfolio:
Class IB Shares
Warburg Pincus Small Company Value Portfolio:
Class IB Shares
<PAGE>
Merrill Lynch World Strategy Portfolio:
Class IB Shares
Merrill Lynch Basic Value Equity Portfolio:
Class IB Shares
-2-
<PAGE>
SCHEDULE C
LIST OF OTHER INVESTMENT COMPANIES
AGREEMENT FOR COOPERATIVE AND JOINT USE OF
PERSONNEL, PROPERTY AND SERVICES BETWEEN THE EQUITABLE
LIFE ASSURANCE SOCIETY OF THE UNITED STATES AND
EQUITABLE LIFE ASSURANCE SOCIETY OF COLORADO INC.
Agreement made as of the 16th day of April, 1984 between THE EQUITABLE
LIFE ASSURANCE SOCIETY OF THE UNITED STATES, a New York corporation
("Equitable") and EQUITABLE LIFE ASSURANCE SOCIETY OF COLORADO Inc., a Colorado
corporation ("Colorado Life"),
Witnesseth:
WHEREAS, Colorado Life is a wholly owned subsidiary of Equitable and
desires to utilize Equitable's personnel, property and services in carrying out
some of its corporate functions and Equitable is willing to furnish the same on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, the parties do hereby mutually agree as follows:
1. Equitable will furnish, or contract with any of its affiliates or
subsidiaries for the furnishing of, as available, personnel, property and
services, including advice and assistance with respect to investments,
requested from time to time by Colorado Life to carry out its corporate
functions.
<PAGE>
2. Colorado Life agrees to pay to Equitable those costs and expenses
incurred by Equitable or any of its affiliates or subsidiaries which, as
reasonably determined by Equitable and demonstrated to the reasonable
satisfaction of Colorado Life, reflect the actual cost to Equitable or its
affiliates or subsidiaries of furnishing such personnel, property and services.
3. The books, accounts and records of Equitable and Colorado Life as to
all transactions hereunder, shall be maintained so as to clearly and accurately
disclose the nature and details of the transactions, including such accounting
information as is necessary to support the reasonableness of the charges or fees
herein.
4. The term of this Agreement shall commence as of the date hereinabove
indicated and continue until December 31, 1984, and thereafter shall be deemed
to be renewed automatically, upon the same terms and conditions, for successive
periods of one year each, until either party, at least 60 days prior to the
expiration of the original term or of any extended term, shall give written
notice to the other party of its intention not to renew the Agreement.
5. It is understood that (a) Equitable, any of its affiliates or
subsidiaries, will invest for their own account
<PAGE>
and may act as investment adivser for others and that Equitable or such others
or persons or organizations affiliated with Equitable could have investment
interests adverse to the interests of Colorado Life in the same or related
investments, (b) Equitable is not obligated to make available to Colorado Life
any particular investment opportunity which comes to Equitable or its
subsidiaries or affiliates, regardless of whether such opportunity is consistent
with the investment policies of Colorado Life; and (c) Colorado Life shall
retain full control over its investment activities, and Equitable or any of its
affiliates or subsidiaries shall have no power or authority by virtue of this
Agreement, whether as agent or otherwise, to obligate or commit Colorado Life
for the acquisition or disposition of any investment.
6. No assignment of this Agreement shall be made by Equitable without the
consent of Colorado Life.
7. Subject to the foregoing Clause 6, this Agreement shall inure to the
benefit of and be binding upon the successors and assigns of the parties hereto.
Dated: April 16, 1984
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
By /s/ Ruth Block
-----------------------------------
EQUITABLE LIFE ASSURANCE
SOCIETY OF COLORADO INC.
By /s/ [illegible]
-----------------------------------
<PAGE>
AMENDMENT TO THE AGREEMENT FOR COOPERATIVE AND JOINT
USE OF PERSONNEL, PROPERTY AND SERVICES BETWEEN THE EQUITABLE
LIFE ASSURANCE SOCIETY OF THE UNITED STATES AND THE
EQUITABLE OF COLORADO, INC.
Clause 4 is hereby restated and amended to read as follows:
The terms of this Agreement shall commence as of the
date hereinabove indicated and continue until December 31,
1984, and thereafter shall be deemed to be renewed
automatically upon the same terms and conditions, for
successive periods of one year each, unless sooner
terminated by either party upon furnishing the other party
with 90 days written notice of its intention to terminate
the Agreement as of the end of such 90 day period.
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
By /s/ Ruth Block
-----------------------------------
Date 7-30-85
-----------------------------------
THE EQUITABLE OF COLORADO, INC.
By /s/ Melvin Stein
-----------------------------------
Date 7/30/85
-----------------------------------
PART 1: APPLICATION FOR LIFE INSURANCE TO:
THE EQUITABLE OF COLORADO, INC. (EOC)
Home Office: 370 17th Street, Suite 4950
Denver, Colorado 80202
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
1. PROPOSED INSURED (Print Name as it is to appear on the policy) Please print in ink.
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
A. Title: |_| Mr. |_| Mrs. |_| Ms. |_| Miss |_| Other Title|_|_|_|_|
B. Name:
First |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| Middle |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| Last |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
C. Date of Birth Mo. |_|_| Day |_|_| Yr. |_|_|_|_| D. Age Nearest Birthday |_|_| E. Sex |_| M |_| F
F. Place of Birth:________________________________________
G. Soc. Sec. No. |_|_|_|_|_|_|_|_|_| H. Previous/Other Name(If Applicable) _________________________
I. U.S.Citizen? |_| Yes |_| No If No, Country ____________________________________________________
J. Current Occupation(s): (1) Title:____________ (2) Duties:_________________ (3) How Long? ____________
If less than 1 year at current occupation, give previous in Special Instructions.
K. Residence/Care of: |C|/|O|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| Years There? |_|_|
Current No.& Street |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| Apt/Suite/Bldg. # |_|_|_|_|_|
City/Municipality |_|_|_|_|_|_| County/Parish |_|_|_|_|_|_|_|_|_|_| State: |_|_| Zip + 4 Code: |_|_|_|_|_|-|_|_|_|_|
Previous No.& Street ___________________________ City _____________ State: _____ Zip + 4 Code: _____________________
(If less than 2 years at current)
L. Tel.: (1) Home |_|_|_| |_|_|_| |_|_|_|_| (2) Business |_|_|_| |_|_|_| |_|_|_|_| M. Currently employed? |_| Yes |_| No
|_| Retired
N. Employer Name:______________________________ O. Years Employed:_____________
P. Employer Address: No.& Street ___________________________ City _____________ State: _____ Zip + 4 Code: _____________________
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
2. APPLICANT (If not Proposed Insured)
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
A. Name:
First |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| Middle|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| Last |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
B. Relationship to Proposed Insured _________________________ C. Date of Birth Mo. |_|_| Day |_|_| Yr. |_|_|_|_|
D. Sex |_| M |_| F
E. Place of Birth: ____________________ F. Current Occupation(s): (1) Title: _____________________________________
(2) Duties:______________________________
If less than 1 year at current occupation, give previous in Special Instructions.
G. Address: Same as-- |_| Question 1.k. Residence or |_| Question 1.p. Business
Other:
Residence: No. & Street |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| Apt/Suite/Bldg.: |_|_|_|_|_|
City: |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
State: |_|_| Zip + 4 Code: |_|_|_|_|_|-|_|_|_|_|
Business: No.& Street ___________________________ City _____________ State: _____ Zip + 4 Code: _____________________
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
3. POLICYOWNER
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
A. THE OWNER IS: (1) |_| Proposed Insured (2) |_| Applicant
(3) |_| OTHER: (A) |_| Individual (B) |_| Corporation (C) |_| Partnership (D) |_| Trust Dated Mo. |_|_| Day |_|_|
Yr. |_|_|_|_| (E) |_| Qualified Plan
(F) Name of Person
First |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| Middle |_|_|_|_|_|_|_|_|_|_|_|_| Last |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Name of firm or plan |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
(G) If an individual, indicate: |_| Mr. |_| Mrs. |_| Ms. |_| Miss |_| Other Title |_|_|_|_|
(H) Relationship to Insured _____________
B. OWNER'S MAILING ADDRESS: Same as-- |_| Current Residence (1.k.) or |_| Applicant's Residence (2.g.)
Other:
Care of:|C|/|O|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
No. & Street |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| Apt/Suite/Bldg. |_|_|_|_|_|
City/Municipality |_|_|_|_|_|_|_|_| County/Parish |_|_|_|_|_|_|_|_|_| State: |_|_| Zip + 4 Code: |_|_|_|_|_|-|_|_|_|_|
C. Answer if Policyowner is not Proposed Insured: (1) Soc. Sec. or Tax I.D. Number |_|_|_|_|_|_|_|_|_|
(2) DATE OF BIRTH: |_| Same as 2.c. or Mo. |_|_| Day |_|_| Yr. |_|_|_|_| (3) TEL.: |_|_|_| |_|_|_| |_|_|_|_|
D. SUCCESSOR OWNER (if desired) Give full name ____________________ and Relationship to Insured _____________________________
If the Owner or Successor Owner is other than the Proposed Insured, and if all persons so designated die before the Proposed
Insured, the Owner will be the estate of the last such person to die, except where the Proposed Insured is a child. In cases where
the Proposed Insured is a child and the Applicant is to be the Owner or Successor Owner and the Applicant dies before the insured
child, the child will be the Owner unless otherwise designated. In such designation, include Owner's full name and relationship to
the child, and the Owner's social security or tax number.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
4. BENEFICIARY FOR INSURANCE ON PROPOSED INSURED. Include Full Name and
Relationship to Proposed Insured.
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
A. Primary Beneficiary(ies):
(1) Name(s):___________________ Relationship: ______________ (2) Name(s):__________________ Relationship: ___________________
B. Contingent Beneficiary(ies):
(1) Name(s):___________________ Relationship: ______________ (2) Name(s):__________________ Relationship: ___________________
NOTE: Unless otherwise requested, the contingent beneficiary will be the surviving children of the Insured in equal shares. If none
survive, payment will be made to the Insured's estate. The Beneficiary(ies) under any Term Insurance Rider on any Additional Insured
or on a Child will be as stated in those riders, unless otherwise designated in Special Instructions. In any such designation, give
full name and relationship of beneficiary(ies) to the Insured.
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</TABLE>
EOC------------- NO. A130003
1
<PAGE>
5. PLAN DESCRIPTION AND PREMIUM PAYMENT METHOD
- --------------------------------------------------------------------------------
A. Plan ____________________________________________________
B. Initial Face Amount $___________________________________
C. If Modified Premium VLI (Complete only if more than Scheduled Premium. If
Billed Premium specified is less than Scheduled Premium, we automatically
bill the Scheduled Premium.)
Billed Premium $__________________________________________
D. If Flexible Premium VLI: (a.) Initial Premium Payment $____________________
(b.) Planned Periodic Payments $______________________
E. Death Benefit Option: |_| Option A |_| Option B (B-Plus for Flex. Prem.-IL
2000)
F. Premium Mode: |_| Annual |_| Semi-Annual |_| Quarterly |_| System-Matic
(Complete S-M form)
G. |_| Salary Allotment (1) Unit Name_________ (2) Register Date ___/___/___
(3) Unit/Sub Unit No. |_|_|_|_|_|_|_|_|_| (4) Payroll No. _____________
(5) Allotor's Name _____________________ (6) Allotor's No. ___________
(if other than Proposed Insured)
H. |_| Military Allotment: Branch _____________ Register Date ___/___/___
- --------------------------------------------------------------------------------
QESTION 5 CONTINUES ON NEXT PAGE
- --------------------------------------------------------------------------------
EV4-200Y (5/97) 2
<PAGE>
5. CONTINUED
5.i. INITIAL ALLOCATIONS TO INVESTMENT OPTIONS*
(WHOLE PERCENTAGES ONLY)
- --------------------------------------------------------------------------------
For Premiums For Deductions
GUARANTEED INTEREST ACCOUNT % %
HUDSON RIVER TRUST
Alliance Aggressive Stock % %
Alliance Balanced % %
Alliance Common Stock % %
Alliance Conservative Investors % %
Alliance Equity Index % %
Alliance Global % %
Alliance Growth & Income % %
Alliance Growth Investors % %
Alliance High Yield % %
Alliance Intermediate Government Securities % %
Alliance International % %
Alliance Money Market % %
Alliance Quality Bond % %
Alliance Small Cap Growth % %
% %
% %
EQ ADVISORS TRUST
EQ/Putnam Balanced % %
EQ/Putnam Growth & Income Value % %
Merrill Lynch Basic Value Equity % %
Merrill Lynch World Strategy % %
MFS Emerging Growth Companies % %
MFS Research % %
Morgan Stanley Emerging Markets Equity % %
T. Rowe Price Equity Income % %
T. Rowe Price International Stock % %
Warburg Pincus Small Company Value % %
% %
% %
TOTAL 100% 100%
* For Flexible Premium Variable Life Policies Only - For these policies your
Policy Account will be allocated according to these percentages on the
first business day 20 days after the date of issue of your policy. Before
that time, all Policy Account allocations (except to Guaranteed Interest)
will be to the Money Market Division. Consult the prospectus for investment
option information.
3
<PAGE>
- --------------------------------------------------------------------------------
6. OPTIONAL BENEFITS
- --------------------------------------------------------------------------------
A. |_| Accidental Death Benefit* (specify amount) $______________________
B. |_| Disability Premium Waiver* (Modified Premium VLI only)
C. |_| Disability - Waiver Monthly Deductions* (Flex Prem-IL 2000 only)
* JUVENILE LIMITATIONS: If applied for, the Accidental Death Benefit is
payable only if the Child dies as a result of an accident after the Child's
first birthday; the Disability Waiver Benefits are effective only if the
Child becomes totally disabled on or after the Child's 5th birthday.
D. |_| Designated Insured Option (Flex Prem/IL 2000 only)**
E. Other __________________________________________________
SURVIVORSHIP VLI RIDERS
F. |_| Option to Split Upon Divorce
G. |_| Estate Protector
TERM RIDERS
H. |_| Renewable Term:
(1) On Insured $____________ (2) On Add'l Insured** $______________
(Available on Modified Premium VLI only)
I. |_| Children's Term** $_____________ Units _______________
** If coverage is elected be sure to complete applicable parts of Question 8,
and answer Questions 10 through 16 with respect to the Additional,
Designated Insured(s) and/or Children for Term Insurance Rider.
- --------------------------------------------------------------------------------
7. COMPLETE FOR PROPOSED ADDITIONAL OR DESIGNATED INSURED(S), CHILDREN'S TERM
RIDER OR JUVENILE INSURANCE
Also answer Questions 10 through 16 with respect to Proposed Additional or
Designated Insured(s) and/or Children under Children's Term Rider.
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
A. Title: |_| Mr. |_| Mrs. |_|Ms. |_| Miss |_| Other Title |_|_|_|_|
B. Proposed Add'l Insured:
First |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| Middle |_|_|_|_|_|_|_|_|_|_|_|_|_|_| Last: |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Date of Birth Mo. |_|_| Day |_|_| Yr. |_|_|_|_| Age Nearest Birthday |_|_| Sex |_| M |_| F Place of Birth: _________________
Soc. Sec. No. |_|_|_|_|_|_|_|_|_|
Previous/Other Name (If Applicable) __________________ Relationship of Owner to Add'l Insured: _________________
State of Residence: _________________
Current Occupation(s): (1) Title: ________________ (2) Duties: ______________________ (3) How Long? _____________
If less than 1 year at current occupation, give previous in Special Instructions.
C. Proposed Designated Insured (to add others, submit form 180-333D or successor):
First: |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| Middle: |_|_|_|_|_|_|_|_|_|_|_|_|_| Last: |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Date of Birth Mo. |_|_| Day |_|_| Yr. |_|_|_|_| Age Nearest Birthday |_|_| Sex |_| M |_| F Place of Birth: __________________
Soc. Sec. No. |_|_|_|_|_|_|_|_|_|
Previous/Other Name (If Applicable) __________________ Relationship of Owner to Designated Insured: _________________
State of Residence: _________________
Current Occupation(s): (1) Title: ________________ (2) Duties: ______________________ (3) How Long? _____________
If less than 1 year at current occupation, give previous in Special Instructions.
D. Children for Term Insurance Rider (Use Special Instructions if more space is needed.)*
First |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| Middle |_|_|_|_|_|_|_|_|_|_|_|_|_| Last |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Date of Birth Mo. |_|_| Day |_|_| Yr. |_|_| Sex M |_| F |_| Relationship to Owner: ___________________________________
First |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| Middle |_|_|_|_|_|_|_|_|_|_|_|_|_| Last |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Date of Birth Mo. |_|_| Day |_|_| Yr. |_|_| Sex M |_| F |_| Relationship to Owner: ___________________________________
First |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| Middle |_|_|_|_|_|_|_|_|_|_|_|_|_| Last |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Date of Birth Mo. |_|_| Day |_|_| Yr. |_|_| Sex M |_| F |_| Relationship to Owner: ___________________________________
*NOTE: To be eligible, children (including stepchildren and legally adopted children) must not have reached their 18th birthday.
Coverage does not begin until a child is 15 days old.
E. For Juvenile Insurance (Ages 0-14): (1) Will there be more life insurance in effect on this Child than on any other child in the
family? |_| Yes |_| No
If "Yes", explain _________________________ (2) Total Life Insurance in effect on Applicant: $ _________________
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
8. OPAI. COMPLETE IF EXERCISING OPTION TO PURCHASE ADDITIONAL INSURANCE
- --------------------------------------------------------------------------------
A. (1) |_| Regular; (2) |_| Birth or Adoption; Child's Name ____________;
Date of Birth or Adoption |_|_|/|_|_|/|_|_|; (3) |_| Alternate
B. Existing original policy no. ____________ C. Option Date |_|_|/|_|_|/|_|_|
D. Option Amount $________________
E. If applying for Disability Premium Waiver, is Proposed Insured now totally
disabled as defined in the Disability Premium Waiver Provision of the
original policy indicated above in b.?..................... |_| Yes |_| No
This application is made under a provision in the existing policy indicated in
8.b. above, permitting the purchase of additional individual life insurance (the
"Option Provision"). If this application is made within the time allowed and in
accordance with the other terms in the Option Provision, including timely
payment of the full first premium for the additional insurance, then the
additional insurance shall take effect upon the terms of the policy the Insurer
would issue. Otherwise, the additional insurance shall not take effect. (Answer
Questions 10 through 16 only if evidence of insurability is required in
connection with an optional benefit or any excess of the insurance amount
applied for over the insurance amount permitted by the Option Provision.)
4
<PAGE>
PLEASE DO NOT WRITE ON THIS PAGE
5
<PAGE>
9. SUITABILITY (All VLI Plans)
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
A. Have you, the Proposed Insured or the Owner, if other than the Proposed Insured, received:
(1) a prospectus for the policy(ies) applied for?...............................................................|_| Yes |_| No
Date of prospectus |_||_|/|_|_|/|_|_|. Date of any supplement(s) |_||_|/|_|_|/|_|_|; |_||_|/|_|_|/|_|_|; |_||_|/|_|_|/|_|_|.
(2) a prospectus for the Hudson River Trust? ...................................................................|_| Yes |_| No
Date of prospectus |_||_|/|_|_|/|_|_|. Date of any supplement(s) |_||_|/|_|_|/|_|_|; |_||_|/|_|_|/|_|_|; |_||_|/|_|_|/|_|_|.
(3) a prospectus for the designated investment company(ies) ________________? .................................|_| Yes |_| No
Date of prospectus |_||_|/|_|_|/|_|_|. Date of any supplement(s) |_||_|/|_|_|/|_|_|; |_||_|/|_|_|/|_|_|; |_||_|/|_|_|/|_|_|.
B. Do you understand that (i) policy values reflect certain deductions and charges and may increase or decrease depending on
credited interest for Guaranteed Interest Division and/or the investment experience of Separate Account Divisions and (ii) the
cash value may be subject to a surrender charge, if any, upon policy surrender, lapse or face amount reduction? ...|_| Yes |_| No
C. With this in mind, is (are) the policy(ies) in accord with your insurance and long-term investment objectives and anticipated
financial needs? ..................................................................................................|_| Yes |_| No
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
OTHER INFORMATION For any "Yes" response, provide full details.
- --------------------------------------------------------------------------------
HAS ANY PERSON PROPOSED FOR INSURANCE:
10. A. Ever had a driver's license suspended or revoked, or within the last 3
years been convicted of 2 or more moving violations or driving under the
influence of alcohol or drugs? ........................... |_| Yes |_| No
(If "Yes", include dates, types of violation, and reason for suspension or
revocation.)
B. Any plans to travel or reside outside the United
States? ................................................... |_| Yes |_| No
C. Any other life insurance now in effect or application
now pending? .............................................. |_| Yes |_| No
(Give companies and amounts and policy numbers if Equitable.)
D. Been disabled for 2 or more weeks within the last 2
years?..................................................... |_| Yes |_| No
11. A. In the last year flown other than as a passenger or plan
to do so? ................................................. |_| Yes |_| No
If "Yes", enter total flying time at present _________ hours; last 12 mos.
_________ hours; next 12 mos. _________est. hours. (Complete Aviation
Supplement for crop dusting; pilot instruction; or commercial, competitive,
helicopter, military, stunt or test flying.)
B. Engaged within the last year or any plan to engage in motor racing on land
or water, underwater diving, skydiving, ballooning, hang gliding,
parachuting or flying ultra-light aircraft? (If "Yes", complete Avocation
Supplement.) .............................................. |_| Yes |_| No
C. Ever had an application for life or health insurance that was declined,
required an extra premium or other modification? .......... |_| Yes |_| No
(If "Yes", state companies and provide full details.)
D. Replaced or changed any existing insurance or annuity (or any plan to do
so) assuming the insurance applied for will be issued? .... |_| Yes |_| No
(If "Yes", state companies, plans and amounts.)
- --------------------------------------------------------------------------------
ANSWER QUESTIONS 12-16 ONLY IF NON-MEDICAL
- --------------------------------------------------------------------------------
12. A. Proposed Insured: Hgt. ____Ft. ____In.; Wgt. ____lbs.
B. Additional Insured: Hgt. ____Ft. ____In.; Wgt. ____lbs.
C. Designated Insured: Hgt. ____Ft. ____In.; Wgt. ____lbs.
HAS ANY PERSON PROPOSED FOR INSURANCE:
13. A. Ever had or been treated for heart trouble, stroke, high blood
pressure, chest pain, diabetes, tumor, cancer, respiratory or
neurological disorder? ............................... |_| Yes |_| No
B. In the last 5 years, consulted a physician, or been examined or
treated at a hospital or other medical facility? ..... |_| Yes |_| No
(Include medical check-ups in the last 2 years. Do not include colds,
minor injuries or normal pregnancy.)
14. In the last 12 months: A. Smoked cigarettes? .............. |_| Yes |_| No
B. Used any other form of
tobacco? ........................ |_| Yes |_| No
15. In the last 10 years:
A. Used, except as legally prescribed by a physician, tranquilizers;
barbiturates or other sedatives; marijuana, cocaine, hallucinogens or
other mood-altering drugs; heroin, methadone or other narcotics;
amphetamines or other stimulants; or any other illegal or controlled
substances? .......................................... |_| Yes |_| No
B. Received counseling or treatment regarding the use of alcohol or drugs
including attendance at meetings or membership in any self-help group
or program such as Alcoholics Anonymous or Narcotics
Anonymous? ........................................... |_| Yes |_| No
16. In the last 10 years, been:
A. Diagnosed by a member of the medical profession as having Acquired
Immune Deficiency Syndrome (AIDS) or AIDS-Related Complex
(ARC)? ............................................... |_| Yes |_| No
B. Treated by a member of the medical profession for AIDS
or ARC? .............................................. |_| Yes |_| No
- --------------------------------------------------------------------------------
17. DETAILS/SPECIAL INSTRUCTIONS/ADDITIONAL INFORMATION For each "Yes" answer
give Question Number, name of person(s) affected, and full details. For 13-16
include conditions, dates, durations, treatment and results, and names and
addresses of physicians and medical facilities.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
QUES. NO. NAME OF PERSON DETAILS (Attach additional sheets
if more space needed)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6
<PAGE>
- --------------------------------------------------------------------------------
18. COMPLETE IF MONEY IS PAID OR AN APPROVED PAYMENT AUTHORIZATION IS SIGNED
BEFORE THE POLICY IS DELIVERED:
Have the undersigned read and do they agree to the conditions of EOC's
Temporary Insurance Agreement, including: (i) the requirement that all of
the conditions in that Agreement must be met before any temporary insurance
takes effect, and (ii) the $500,000 insurance amount limitation? |_| Yes
|_| No (If "No," or if any Person Proposed for Insurance has been diagnosed
or treated for Acquired Immune Deficiency Syndrome (AIDS) or AIDS-Related
Complex (ARC) by a member of the medical profession within the last 10
years or had cancer, a stroke, or a heart attack within the last year, a
premium may not be paid nor an approved payment authorization signed before
the policy is delivered.)
|_| AMOUNT PAID: $_________. (Draw checks to the order of Equitable.)
|_| APPROVED PAYMENT AUTHORIZATION SIGNED.
19. SOCIAL SECURITY OR TAX I.D. NUMBER CERTIFICATION. I, the proposed
policyowner, by my signature below, certify under penalties of perjury that
(i) the number shown in question 3.c.(1) or 1.g. of this form is my correct
taxpayer identification number, and (ii) I |_| am |_| am not subject to a
backup withholding order issued by the Internal Revenue Service. I
understand that failure to furnish the correct information may subject me
to Federal backup withholding.
- --------------------------------------------------------------------------------
AGREEMENT. Each signer of this application agrees that:
(1). The statements and answers in all parts of this application are true and
complete to the best of my (our) knowledge and belief. EOC may rely on them
in acting on this application.
(2). EOC's Temporary Insurance Agreement states the conditions that must be met
before any insurance takes effect if money is paid or an approved payment
authorization is signed, before the policy is delivered. Temporary
Insurance is not provided for a policy or benefit applied for under the
terms of a guaranteed insurability option or a conversion privilege.
(3). Except as stated in the Temporary Insurance Agreement, no insurance shall
take effect on this application: (a) until a policy is delivered and the
full initial premium for it is paid, or an approved payment authorization
is signed, while the person(s) proposed for insurance is (are) living; (b)
before any Register Date specified in this application; and (c) unless to
the best of my (our) knowledge and belief the statements and answers in all
parts of this application continue to be true and complete, without
material change, as of the time such premium is paid or an approved payment
authorization is signed.
(4). No agent or medical examiner has authority to modify this Agreement or the
Temporary Insurance Agreement, nor to waive any of EOC's rights or
requirements. EOC shall not be bound by any information unless it is stated
in Application Part 1 or Part 2.
(5). POLICY VALUES INCREASE OR DECREASE DEPENDING ON CREDITED INTEREST FOR THE
GUARANTEED INTEREST DIVISION AND/OR INVESTMENT EXPERIENCE OF THE SEPARATE
ACCOUNT DIVISIONS AND REFLECT CERTAIN DEDUCTIONS AND CHARGES. THE DEATH
BENEFIT MAY BE FIXED OR VARIABLE UNDER SPECIFIED CONDITIONS, AS DESCRIBED
IN THE POLICY.
- --------------------------------------------------------------------------------
VLI Notice: Available on request are illustrations of benefits, including death
benefits, policy values and cash surrender values.
- --------------------------------------------------------------------------------
ACKNOWLEDGEMENT AND AUTHORIZATIONS
UNDERWRITING PRACTICES. I (We) have received a statement of the underwriting
practices of EOC which describes how and why EOC obtains information on my
insurability, to whom such information may be reported and how I may obtain it.
The statement also contains the notice required by the Fair Credit Reporting
Act.
AUTHORIZATIONS.
TO OBTAIN MEDICAL INFORMATION. I (we) authorize any physician, hospital, medical
practitioner or other facility, insurance company, and the Medical Information
Bureau to release to EOC and its legal representative any and all information
they may have about any diagnosis, treatment and prognosis regarding my physical
or mental condition.
TO OBTAIN NON-MEDICAL INFORMATION. I (we) authorize any employer, business
associate, government unit, financial institution, Consumer Reporting Agency,
and the Medical Information Bureau to release to EOC and its legal
representative any information they may have about my occupation, avocations,
finances, driving record, character and general reputation. I (we) authorize EOC
to obtain investigative consumer reports, as appropriate.
TO USE AND DISCLOSE INFORMATION. I (we) understand that the information that I
(we) authorize EOC to obtain will be used by EOC to help determine my
insurability or my eligibility for benefits under an existing policy. I (we)
authorize EOC to release information about my insurability to its reinsurers,
contractors and affiliates, my (our) EOC Agent, and to the Medical Information
Bureau, all as described in the statement of EOC's underwriting practices or to
other persons or businesses performing business or legal services in connection
with my application or claim of eligibility for benefits, or as may be otherwise
lawfully required, or as I (we) may further authorize. I (we) understand that I
(we) have the right to learn the contents of any report of information
(generally, through my physician, in the case of medical information).
COPY OF AUTHORIZATIONS. I (we) have a right to ask for and receive a true copy
of this Acknowledgement and Authorizations signed by me (us). I (we) agree that
a reproduced copy will be as valid as the original.
DURATION. I (we) agree that these authorizations will be valid for 12 months
from the date shown below.
- --------------------------------------------------------------------------------
Laws in your state may make it a crime to fill out an insurance or annuity
application with information you know is false or to leave out material facts.
- --------------------------------------------------------------------------------
Dated at City __________________________________________________________________
State __________________________________________________________________________
on ______________________________________________ 19 ____
- --------------------------------------------------------------------------------
Signature of Agent (Registered Representative)
- --------------------------------------------------------------------------------
X_______________________________________________________________________________
Signature of Proposed Insured or Applicant if Proposed Insured is a Child, Issue
Age 0-14.
X_______________________________________________________________________________
Signature of Proposed Additional Insured, if any.
X_______________________________________________________________________________
Signature of Applicant if not Proposed Insured or Owner.
X_______________________________________________________________________________
Signature of Owner if not Proposed Insured or Applicant. (If a corporation,
show firm's name and signature of authorized officer.)
7
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable of Colorado, Inc. (the "Company"), a Colorado stock
life insurance company, hereby constitutes and appoints Michael Martin, Alvin
Fenichel, Allen Zabusky, Mark Hug, Naomi Weinstein and Mildred Oliver, and each
of them (with full power to each of them to act alone), his or her true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
him or her and on his or her behalf and in his or her own name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 25th day of January, 1999.
/s/ Allen Zabusky
------------------------------
[sign]
Allen Zabusky
------------------------------
[print]
107280v1
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable of Colorado, Inc. (the "Company"), a Colorado stock
life insurance company, hereby constitutes and appoints Michael Martin, Alvin
Fenichel, Allen Zabusky, Mark Hug, Naomi Weinstein and Mildred Oliver, and each
of them (with full power to each of them to act alone), his or her true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
him or her and on his or her behalf and in his or her own name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 29th day of January, 1999.
/s/ Samuel B. Shlesinger
------------------------------
[sign]
Samuel B. Shlesinger
------------------------------
[print]
107280v1
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable of Colorado, Inc. (the "Company"), a Colorado stock
life insurance company, hereby constitutes and appoints Michael Martin, Alvin
Fenichel, Allen Zabusky, Mark Hug, Naomi Weinstein and Mildred Oliver, and each
of them (with full power to each of them to act alone), his or her true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
him or her and on his or her behalf and in his or her own name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 29th day of January, 1999.
/s/ Michael S. Martin
------------------------------
[sign]
Michael S. Martin
------------------------------
[print]
107280v1
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable of Colorado, Inc. (the "Company"), a Colorado stock
life insurance company, hereby constitutes and appoints Michael Martin, Alvin
Fenichel, Allen Zabusky, Mark Hug, Naomi Weinstein and Mildred Oliver, and each
of them (with full power to each of them to act alone), his or her true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
him or her and on his or her behalf and in his or her own name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 26th day of January, 1999.
/s/ Harvey E. Blitz
------------------------------
[sign]
Harvey E. Blitz
------------------------------
[print]
107280v1
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable of Colorado, Inc. (the "Company"), a Colorado stock
life insurance company, hereby constitutes and appoints Michael Martin, Alvin
Fenichel, Allen Zabusky, Mark Hug, Naomi Weinstein and Mildred Oliver, and each
of them (with full power to each of them to act alone), his or her true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
him or her and on his or her behalf and in his or her own name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 25th day of January, 1999.
/s/ Michel Beaulieu
------------------------------
[sign]
Michel Beaulieu
------------------------------
[print]
107280v1
Exhibit 8
---------
IL Protector (SM)
-----------------
Description of Equitable Of Colorado, Inc. Issuance,
Transfer and Redmption Procedures for Policies
Pursuant to Rule 6e-3(T)(b)(12)(iii)
under the Investment Company Act of 1940
February 1, 1999
Pursuant to Rule 6e-3(T)(b)(12)(iii) under the Investment Company Act
of 1940 ("1940 Act"), this exhibit sets forth the issuance, transfer and
redemption procedures to be followed by The Equitable of Colorado, Inc. ("EOC")
in connection with the issuance of IL Protector, a flexible premium variable
life insurance policy (the "policies").
EOC believes its procedures meet the requirements of Rule
6e-3(T)(b)(12)(iii) and states the following:
1. Because of the insurance nature of EOC's policies and due to the
requirements of state insurance laws, the procedures necessarily differ in
significant respects from procedures for mutual funds and contractual plans for
which the 1940 Act was designed.
2. Many of the procedures used by EOC have been adopted from its
established procedures for its scheduled premium variable life insurance
policies, its other flexible premium variable life insurance policies and its
fixed benefit life insurance products.
3. In structuring its procedures to comply with Rule 6e-3(T), state
insurance laws and its established administrative procedures, EOC has attempted
to comply with the intent of the 1940 Act, to the extent deemed feasible.
4. In general, state insurance laws, like Rule 6e-3(T)(b)(12)(iii),
require that EOC's procedures be reasonable, fair and not discriminatory.
5. Because of the nature of the insurance product, it is often
difficult to determine precisely when EOC's procedures deviate from those
required under Sections 22(d), 22(e) or 27(c)(1) of the 1940 Act or Rule 22c-1
thereunder. Accordingly, set out below is a summary of the principal policy
provisions and procedures not otherwise described in the prospectus, which may
Sbe deemed to constitute, either directly or indirectly, such a deviation. The
summary, while comprehensive, does not attempt to describe each and every
procedure or variation which might occur and does include certain procedural
steps which do not constitute deviations from the above-cited sections or rule.
Under the policies, a policyowner allocates net premiums to a
Guaranteed Interest Account, (or option) which is part of EOC's General Account,
and/or to one or more investment funds of EOC's Separate Account VLI (the
"Account"). Except as otherwise noted, the procedures described below apply
equally to each of the Account's investment funds and, accordingly, are
described in terms of the Account.
<PAGE>
I. "Public Offering Price": Purchase and Related
Transactions -- Section 22(d) and Rule 22c-1
---------------------------------------------
This section outlines those principal policy provisions and
administrative procedures which might be deemed to constitute, either directly
or indirectly, a "purchase" transaction. Because of the insurance nature of the
policies, the procedures involved necessarily differ in certain significant
respects from the purchase procedures for mutual funds and contractual plans.
The chief differences involve the structure of the cost of insurance charges and
the insurance underwriting (i.e., evaluation of risk) process. There are also
certain policy provisions -- such as restoration and loan repayment -- which do
not result in the issuance of a policy but which require certain payments by the
policyowner and involve a transfer of assets supporting the policy reserve into
the Account.
a. Application and Initial Premium Processing
------------------------------------------
Upon receipt of a completed application and other required
documentation from a prospective policyowner, EOC will follow certain insurance
underwriting (i.e., evaluation of risks) procedures designed to determine
whether the proposed insured is insurable. This process may involve such
verification procedures as medical examinations and may require that further
information be provided by the proposed policyowner and/or the proposed insured
before such a determination can be made. A policy cannot be issued, i.e.,
physically issued through EOC's computer issue system, until this underwriting
procedure has been completed.
These processing procedures will not dilute any benefit payable to any
exiting policyowner. Although a policy cannot be issued until after the
underwriting process has been completed, the proposed policyowner will receive
immediate insurance coverage on the proposed insured person once the proposed
policyowner has paid his full initial premium and assuming that the proposed
insured person proves to be insurable.
EOC will require that the policy be delivered within a specific
delivery period to protect itself against anti-selection by the prospective
policyowner resulting from a deterioration of the health of the proposed
insured. Generally, the period will not exceed 30 days from the policy's Issue
Date.
Delivery may be delayed where, for example, the full minimum initial
premium has not yet been paid, amendment is needed to the application for the
policy or where the agent has been unable to contact the prospective
policyowner. Where a policy is not delivered within 30 days, EOC will consider
reissuing the policy with a new Register Date and Issue Date. However, if EOC
does not receive the full minimum initial premium within 60 days of the Issue
Date, we will consider the prospective policyowner to have withdrawn the
application and we will refund any premium paid. To obtain a policy, it would
then be necessary for the prospective policyowner to submit a new completed
application and satisfactory evidence of insurability of the proposed insured.
2
<PAGE>
b. Insurance Charges and Underwriting Standards
--------------------------------------------
Cost of insurance charges payable under the policies will not be the same
for all policyowners. The chief reason is that the principle of pooling and
distribution of mortality risks is based upon the assumption that each
policyowner pays a cost of insurance charge commensurate with the insured's
mortality risk which is actuarially determined based upon factors such as age,
sex, health and occupation.
In the context of life insurance, uniform cost of insurance charges for all
insureds would discriminate unfairly in favor of those insureds representing
greater mortality risks to the disadvantage of those representing lesser risks.
Accordingly, although there will be a uniform "public offering price" for all
policyowners because premiums are flexible, there will be a different "price"
for each actuarial category of insureds because different cost of insurance
rates will apply. The "price" will also vary based on the net amount at risk.
The Policies will be offered and sold pursuant to our cost of insurance
charge schedule and our underwriting standards and in accordance with state
insurance laws. Such laws prohibit unfair discrimination among insureds of the
same class, but generally recognize that premiums must be based upon factors
such as age, sex, health and occupation. A table showing the maximum cost of
insurance charges will be delivered as part of the policy. Any additional
charges for persons who do not meet standard underwriting requirements or for
additional benefit riders will also be indicated in the policy.
By administrative practice, EOC will reduce the cost of insurance
rate classification for an existing policy if new evidence of insurability
demonstrates that the insured person qualifies for a lower classification. After
the reduced rating is determined, the policyowner will pay a lower current
monthly cost of insurance charge each month. A similar reduction will be made
for tobacco users who meet our non-tobacco user requirements.
c. Repayment of Loan
-----------------
When a loan is made, EOC will transfer from each investment division
of the Account to the General Account an amount of Policy Account Value equal to
the amount of the loan allocable to that division. Upon repayment of
indebtedness, EOC will reduce its General Account policy loan assets and
transfer those assets first to the Guaranteed Interest Division to the extent
loans were attributable to that Division and then to the Account's investment
funds according to the policyowner's instruction or the premium payment
allocation percentages then in effect.
d. Face Amount Increases
---------------------
EOC reserves the right to decline a Face Amount increase if the
policyowner has become a more expensive risk. The policyowner may, however,
apply for a new policy for the amount of the increase. EOC intends to
waive the monthly administrative charge, the charge for transfers and the charge
for partial withdrawals on the second policy. The minimum Face Amount for the
second policy will be $10,000.
3
<PAGE>
II. "Redemption Procedures":
Surrender and Related Transactions
----------------------------------
This section will outline those procedures which differ in certain
significant respects from redemption procedures for mutual funds and contractual
plans. The policies provide for the payment of monies to a policyowner or
beneficiary upon presentation of the policy. The amount received by the payee
will depend upon the particular benefit for which the policy is presented:
surrender for net cash surrender value, payment of a death claim, living benefit
payment or maturity benefit. There are also certain policy provisions -- such as
partial withdrawals, termination and the loan privilege -- under which the
policy will not be presented to EOC but which will affect the
policyowner's benefits and may involve a transfer of the assets supporting the
policy reserve out of the Account.
Any combined transactions on the same day which counteract each other will
be allowed. We will assume the policyowner is aware of the conflicting nature of
these transactions and desires their combined result. In addition, if a
transaction is requested which we will not allow (for example, a request for a
face amount decrease which lowers the face amount below our minimum) we will
reject the whole request and not just the portion which fails to comply with our
rules. Policyowners will be informed of the rejection and will have an
opportunity to give new instructions. Finally, state insurance or other laws may
require that certain requirements be met before EOC is permitted to make
payments to the payee.
Generally, except for the payment of death benefits, the imposition of
insurance and administrative charges and the effects of policy loans, the payee
will receive a pro rata or proportionate share of the Account's assets within
the meaning of the 1940 Act in any transaction involving "redemption
procedures."
a. Surrender for Net Cash Surrender Value
--------------------------------------
EOC will make the payment of Net Cash Surrender Value out of its
General Account and, at the same time, transfer assets from the Account to the
General Account in an amount equal to the policy reserves in the Account.
b. Death Claims
------------
EOC will issue a death benefit payable to the beneficiary within
seven days after receipt, at our Administrative Office, of the policy, due proof
of death of the insured person, and all other requirements necessary(1) to make
payment.
EOC will make payment of the death benefit out of its General
Account, and will transfer assets from the Account to the General Account in an
amount equal to the policy reserves in that Account. The excess, if any, of the
death benefit over the amount transferred will be paid out of the General
Account reserve maintained for that purpose.
- ------------
(1) State insurance laws impose various requirements, such as receipt of a tax
waiver, before payment of the death benefit may be made. In addition, payment of
the death benefit is subject to the provisions of the policies regarding suicide
and incontestability.
4
<PAGE>
c. Transfer
--------
The policies allow the policyowner, in lieu of a conversion privilege, to
transfer all the amounts in the investment funds of the Account to the
Guaranteed Interest Account (which is part of our General Account and pays
interest at a declared guaranteed rate) without charge.
d. Policy Loan
-----------
When a loan is made, EOC transfers a portion of the assets in the
Account (which is a portion of the cash surrender value and which also
constitutes a portion of the reserves for the death benefit) equal to the
indebtedness to the General Account.
e. Living Benefit Payment
----------------------
The Living Benefit option enables eligible policyowners to receive a
portion of the death benefit if the insured has a terminal illness. When
EOC receives written notice of a Living Benefit claim it will send the
policyowner a "quote letter" detailing the effect of a Living Benefit payment on
the remaining policy values as well as an explanation of amounts that are
available through policy loan or surrender. The letter will be accompanied by
the forms necessary for the policyowner to finalize his or her Living Benefit
claim. When those forms are received, EOC will determine whether the
policyowner is eligible to receive the Living Benefit payment (e.g., whether
satisfactory evidence has been received that the insured's life expectancy is
less than six months). Once this eligibility determination is complete,
Equitable will pay the Living Benefit amount within seven days.
f. Federal Income Tax
------------------
In certain circumstances, a premium payment or change to a policy may cause
a policy to be treated as a "modified endowment." (See Tax Effects in the
Prospectus). Due to the potential adverse tax consequences, EOC has
instituted procedures aimed to prevent a policy from becoming a modified
endowment without the policyowner's prior knowledge. If EOC determines
that, based on the first premium, the policy will be a modified endowment
contract, EOC will issue the policy based on the first premium remitted,
provided that the policyowner signs a form acknowledging that the policy is a
modified endowment. Alternatively, the policyowner may reduce the amount of the
first premium to a level at which the policy will not be a modified endowment.
EOC will then issue the policy based on the reduced premium. EOC
will not deliver a policy unless one of these options is selected.
In the case of a subsequent premium payment, which, if applied, would cause
a policy to become a modified endowment, EOC plans to return the excess
premium payment (the amount which would cause the contract to become a modified
endowment) to the policyowner within one business day. The excess premium
payment will be accompanied by a letter of explanation. The letter will explain
to the policyowner that the premium payment he submitted would cause the policy
to become a modified endowment under federal income tax law. The letter will
instruct the policyowner that he may either return the excess premium payment to
EOC with a signed acknowledgment form (enclosed with the letter) or forego
making the payment at this time. The acknowledgment form will describe the
federal income tax consequences
5
<PAGE>
of owning a modified endowment. In administering certain policy transactions, we
may also require an acknowledgment before processing the change.
There may be cases in which a policy becomes a modified endowment despite
the above procedures. In such cases, EOC may, but is not obligated under
applicable federal income tax law to, refund the excess premium with interest
not later than 60 days following the policy year in which it was received. In
such case the policy should generally be removed from modified endowment status.
If an offer to refund premium is made, the policyowner will be notified and
given an opportunity to elect a refund. If a refund is elected, the Policy
Account will be adjusted to take into account the amount of the refund. The
amount of the refund would include interest earned on the excess premium amount
in the Guaranteed Interest Account and net return on the excess premium amount
in the divisions of the Separate Account, but not less in total than minimum
interest of 4%. An election to take a refund and the related adjustments will be
effected upon receipt at our administrative office.
38563
6
